Articles

The Heir Unaparent by Rene CARAYOL (Radio 5 Business Program Presenter, Author, Businessman)

There's an old saying that when the sea is calm, everyone is a great sailor. It is only when the storms come that real leadership counts. Put another way, people show their true colours when under pressure.

The economic downturn that we find ourselves in makes for very choppy seas indeed and the difference between leadership and management is even more striking than it was before. For management read strategy, process, procedure, systems, execution and an ever-increasing range of management tools such as league tables, balance scorecards and KPIs. Put simply, it is about "making sure". Whereas in the good times this was enough, in the downturn it isn't. Management has become commoditised; everyone is doing it and most are doing it well. Don't get me wrong, management is crucial to run any business successfully but it is no longer enough in isolation.

There HAS to be leadership as well.

You've heard me say it plenty of times before but what has become increasingly apparent over the last few months is that leaders who are brilliant in the good times might not necessarily be the best in the downturn. My guess is that most things our Chancellor and Prime Minister are doing to end the recession are probably the right things to do but they just cannot inspire us to believe them or energise us to change our behaviour. This is because they are managers not leaders. And micro-managers at that.

What we need now is a little less forensic analysis of the detail and far more vision around the big picture. That requires inspirational leadership. The passing of the baton from Blair to Brown demonstrates everything that is wrong with succession plans hatched by the incumbent protagonists. How did the Labour party allow Blair and Brown themselves to determine the party's future? We'll come back to that later.

The rules of engagement are changing and you only have to look at the average length of service for UK and US chief executives and you can see that they are shortening dramatically. It is now just under 4 years in the US and 3½ years in Europe. Time and again we have seen some of the best people outstay their welcome and in the fast moving yet unforgiving business world we are living in, those organisations on top of their game are refreshing their CEOs regularly to keep current and up to date. But still some of the best leaders hold on and have their outstanding reputations tarnished. Thatcher. Blair. Lord John Browne. Sir Fred Goodwin.

Even from here I can feel football supporters shouting out, "but what about someone like Sir Alex Ferguson?"

Well, he proves a different point. Over the course of his illustrious career he has stayed fresh, vibrant and contemporary by regularly changing his deputy. In doing so, he has refreshed himself. But importantly, his first four years at Manchester United were barren and it is not clear whether even this well run club would be that patient now. When someone has been in power too long and finally gets deposed there is always an urge to replace them with someone who is the polar opposite, rather than selecting the right person for the job in rapidly changing times. For Margaret Thatcher read John Major, for Tony Blair read Gordon Brown, Mandela and Mbeki, Brown and Hayward at BP, Goodwin and Hester at RBS. Despite everyone knowing that nothing stays still, there are countless examples of no natural successor being in place for when the time comes, especially when the leader has an air of invincibility. Most potential successors will not hang around long if they do not feel there is any chance of the boss moving on. Consequently, when the incident comes that finishes off the once great leader (and it will come) panic sets in and the resulting outcome almost appears to be pot luck based on the prevailing mood or having to "make do" with what is available. We saw the mess at Chelsea when Mourinho walked out. When the leader appears to have it all, the organisation and its stakeholders seem to assume that golden eras never end, but they do, and how. Succession planning is always seen as another management process.

But guess what? It should be about leadership.

In the army, leaders are always groomed and ready to step up to the plate if the leadership falls. So why can't businesses and governments be the same? Still there is a tendency at the very top of UK PLC to "recruit" the personnel for the top positions from the questionable talent pool of the "old boys club", overlooking in the process the real issue at stake; growing the business and not lining the pockets of your old school pals. Take a look at BP as we speak.

The company is recommending Sir Tom McKillop (an old friend and ally of current chairman Sir Peter Sutherland) be re-elected to its board despite Sir Tom's record as the former RBS chairman who signed off Sir Fred Goodwin's pension, failed to act on shareholder concerns over Goodwin, supported the disastrous takeover of ABN Amro and quietly contributed to the tarnished image that has engulfed the banking profession. It is an appointment that can only end in tears for the reputation of BP.

Something has got to change.

So let's start the relatively simple process right here with two golden rules.

Firstly, the current leader can't pick the candidates. They simply cannot and must not have too much say. Again, look at the Blair / Brown transition on how not to do it. Secondly, the succession should be 'owned' at the most senior level possible in the organisation. It must not be left to HR. Of course they are an integral part of the solution but it sometimes demands a confrontation that HR would rarely win. If allowed to make the decision over their successor, the current incumbent so often falls into one of two traps; they choose a non-threatening foil that sustains their own reign or they choose someone exactly in their own image. Instead the process should be left to the chairmen or independent directors.

We can all learn something from the US Presidential elections; two strikes and you're out with absolutely no say in who replaces you.

It's a simple way of facing up to the fact that we have different leaders in different eras and just because they were once great, they might no longer be relevant.

In business the days of the twenty year boss, even the ten year boss, are long gone. And it's not just in business that the sands are shifting; the days of a Sir Alex Ferguson-type spell at the top are never going to happen again. The likes of a Tony Blair ten year reign should never be ALLOWED to happen again. The business market place is so unrelenting, aggressive and unforgiving that it needs fresh leadership on a more frequent basis. In fact, it needs to be forced; an eight year upper limit should be set. But the current CEOs, MDs and leaders will not hear of such a move. People like Sir Fred Goodwin, Lord John Browne or Sir Stuart Rose have always historically surrounded themselves with people that daren't suggest that perhaps their time has come. Even the likes of the quite brilliant Steve Jobs at Apple should not be allowed to stay forever. His tragic illness has exposed a yawning gap at Apple.

You need instead to have a strong, forceful board that provides support, challenge and vitally, change.

Even then there are pitfalls. If you make the succession plan an open competition both internally and externally then it leads to a drawn-out turf war with bitter internecine warfare. And when the winner emerges, they immediately kill all of their rivals. Again look at how Brown has decimated the cabinet he inherited. All likely and potential challengers have been quickly removed.

So what to do?

The clues have come in the downturn. CEOs are being ousted regularly due to bad results and falling profits, with no heir apparent. The immediate perceived sign of weakness, and a potential power vacuum, is quickly reflected in plummeting shares. But look at the change at the top for the Prudential for an example of how it should be handled. The changeover has been grabbing headlines due to the new incumbent Tidjane Thiam being the first black CEO of a FTSE 100 company but underneath that landmark achievement the process has been immaculate. The outgoing CEO Mark Tucker resigned unexpectedly after four successful years in the role, quoting "it was a tough thing to do but I've put into place many of the things I set out to do." Him departing on a high and leaving the company in good shape for a new round of fresh, innovative ideas was a masterstroke.

The market reacted positively to Prudential's results and management shuffle, with Pru shares soaring as much as 28 percent.

Kevin Ryan, an analyst at ING said it all. "The results were good and they gave a good account of themselves. I thought the markets would like Tidjane, he is better suited to CEO than CFO." Succession planning doesn't have to be a blood bath. It just needs to be done regularly, sensibly and not allow one individual to make all the decisions.

So now is the time to answer the really tough question that only the authentic leaders ask themselves - am I still the right person to lead this organisation? Why? Could someone do it better? When I'm called into an SME that is struggling to get to the next level in the good times or fighting for survival in the downturn, it is essential that the toughest question is confronted early on. Why should these people be led by you now? It is uncomfortable and bordering on rude but it is necessary and does not have to be aggressive or confrontational.

But it must not be avoided.

The entrepreneurial spirit, vision and courage of the founder are usually irreplaceable in the formative years. They generally put the necessary processes in place, hire the top team single-handedly and cut all the initial deals with all the suppliers. It means that they tend to make all the calls and all the decisions, without consultation. As the business grows, the organisation will need bigger and better people who, in the main, will not respond well to a prescriptive and commanding style of leadership. The same things happen in huge multi-nationals when the leader has been around for a long time and especially if they have been successful.

This then becomes the crucial time for the private fireside chat with a senior member of the top team or the 'critical friend' (the chairman or the non-executive director).

It is never easy but usually when pointed out forcefully and supportively, it tends to have the desired effect. Different environments demand different approaches and no one leader is right for every occasion, no matter how brilliant they have been in the past.

Is it time for a change at the top of your organisation?

At the time of this newsletter going to press it seems common sense has prevailed and Sir Tom McKillop has released a statement saying that he will no longer seek re-election on the BP board at the group's annual meeting in two weeks time, amid growing concern from investors.

Thank You

Rene Carayol


During a boom & equally during economic difficulties,the Virtual Office is a great asset

We have just seen the end of one of the longest runs of economic boom in recent history. Many have benefited from this period of growth and anyone who had an idea or a plan was able to start a business with funds provided by a large number of lenders, all tripping over each other to part with their money. Well, actually your money ! They seem to have lent it to anyone who could walk in and ask for it, no matter what they were going to do, as long as they could sign.
So, everyone kidded themselves that all was well and whilst everyone played the same game, it was. You may recall the story of "The Emperor's New Suit"

As with the Emperor's suit, someone realised that it was all untrue. There was no suit and equally there were many unworthy of loans handed out.

We have now entered the age of gloom, doom, despondency and most of all, belt tightening

The Virtual Office service was extremely useful for all the new businesses starting up the ladder, it gave them an immediate setup for their aspiring companies, then when the business was running well, most retained the service as it became very clear that it was more cost-effective to utilise the experience of the Virtual Office rather than spend money on more staff and facilities.

Equally, in times of financial uncertainty, the Virtual Office offers excellent cost saving for companies wishing to make economies to be able to survive until the good days return.

Businesses which have to release staff (or move them to revenue generating areas) due to the economic climate can enjoy maintaining the look of continuity, larger companies can make substantial cost savings by using the outsourced switchboard or telephone answering facilities offered by the Virtual Office companies.

In conclusion, whether times are good and you are on the move up or if they are not so good and you need to make savings, The Virtual Office & The Outsourced Switchboard make great sense"


The Virtual Office…..its functions and benefits to modern business life

Over the last 10 years through technology we have many new industries, services & facilities which, until recently have not even been thought of. We can access information and services within moments. These used to be only available to large corporations with specialist staff and a lot of time to research and obtain. The Internet has given, man, woman and child the capacity to find the answer to any question and to obtain information or knowledge within moments. Welcome to the age of the super highway.

With this new found world of instant, limitless information combined with high speed communication, there is another new development. Heightened expectations at all levels, be-it in our personal lives or business. The new generation expect more and more as they have grown up with modern IT, even as basic as SMS on their mobiles. These expectations come in a number of guises. SPEED to act on opportunities without unnecessary delay which may result in loss of business or revenue. IMAGE portrayed by businesses and the professions, not only the big & long established. We live in an image conscious world. TIME to do what may be most beneficial to us to achieve our career goals coupled with leisure activities. EFFICIENCY to carry out our functions in a manner that will enhance our standing with those we interact with.

IMAGE…..We live in a world where what we look like seems to have become even more important than what we can actually do. You may think this is totally superficial and probably you are right. However, if you just give a moment of thought to our press & magazines, they all promote looks, looks & more looks. A shabby person walks into a room, shop or office, most people will unconsciously react negatively to them. A smart person walks in to the same place will be greeted positively and with a smile. This type of reaction feeds through to every aspect of our lives. Maybe wrong but that is nature and the world we live in.

SPEED….No-one wants to wait. Everyone is in a hurry, even if there is no reason for it. They want service or attention immediately. Go to a shop and ask for an assistant and you are told to wait, you may be restless as you are in a hurry, you have busy life, others are waiting for you. So what do you do?....you try elsewhere. Call a company and you are told that you will be called back but they don’t know when, so you call another company in the mean time. We just don’t want to wait anymore. This is the age of impatience.

TIME……Oh, how fast time flies. Business is good, orders are coming in, suppliers need to be hurried. Economy slows down, every potential sales avenue needs to be followed up. In either case, every minute is precious. How we spend it can make the difference between success and failure.

EFFICIENCY……..This is a combination of the above, the faster we can provide goods or services to those we appeal to and spend as little time to achieve this, will equal to our long term ability to grow our businesses in all economic climates and still give us leisure time.

So, whom can the Virtual Office benefit?

Actually, it is very simple and can fit virtually anyone in business or in the professions, whether they are a sole operator or a multi staffed corporation with or without offices and a permanent base.

I am not sure if there is another service that can be useful to such an immense cross-section of people, that-is-to-say, outside the retail service industries.

When I walk into a room, for a business meeting or a social gathering, almost everyone I see is a potential user of the Virtual Office or the Virtual Switchboard service. Lawyers, Accountants, Bankers, IFAs, Consultants. Plumbers, Electricians, Dentists, Doctors and so-on and so-on. Working on their own or with several colleagues and staff. Virtually NO limit.

The main thing that the Virtual Office client has in common is that he/she has perceived the benefits of what the service can offer to improve their working and leisure life added to the financial rewards that come with it.

How the Telephone Answering or Switchboard work?

This is where the difficulty comes. No, not the service, that is easy. The difficulty is to write about all the permutations available without filling several pages and boring you to death.

The principal function of the Virtual Office is communications management in the form of telephone answering. This is the first point of contact between you and your caller. Handled well, the caller is in a more positive mood by the time the call is connected to you. Positive can be just “Feeling Good” or “I am speaking to a quality company”. In either or both cases, this is to your advantage.

The call comes in on your dedicated number, “your” Virtual Office receptionist answers in your company/practice name. The caller’s name and company is taken and they are asked to hold whilst we connect them to you, their destination. In the meantime, they listen to pleasant music for a few seconds. Then “your” receptionist announces the caller to you and connects the call, just as if she was sitting in your office or building operating your own switchboard.

If you are out or never want calls connected, just messages taken, “your” receptionist can advise the caller that you are unavailable and take a message, whilst assuring the caller that their call will notified to you immediately and that you will deal with their call upon your return, which will be in a few hours or days……dependant on what you have instructed “your” receptionist to say.

So much more reassuring to the caller than a voicemail stating you are OUT.

For the larger company, the outsourced switchboard has a totally different meaning. Whereas the smaller operator gets a professional front, the larger business gets a major Financial and HR advantage. The cost of operating a switchboard can run into tens of thousands per year and involve the company in additional staffing and space issues. To run a switchboard, the following is a minimum required.
If the above is added up in a London office, it will come to about £30,000.00. This is a large sum, taking into consideration that it is payable irrespective of calls coming in or not. The switchboard is there, in case the call does come. So, if equated, the use of the receptionist/switchboard operator to the outlay, you will be told by any FD that this is poor business. On the other hand, the use of the Virtual Switchboard is extremely economical because, apart from a small monthly retainer, you are only paying for the call, as and when it comes.

How does the Mail service work?

Many clients also need a business address. This can be because the business is home based and the client does not wish to be seen as such (IMAGE) or they don’t wish to have cold callers visiting their homes. Others may be overseas based companies that wish to have a UK presence but cannot justify the cost or don’t need a staffed office.

The Virtual Office Mail service provides you with a proper commercial address and NOT a PO Box number. The post is received at the Virtual Office address and then the unopened letters are placed in a new envelope which is properly addressed to you and with the correct postage paid. This service can be daily, once weekly or just once monthly. The Virtual Office mail service can also offer a mail opening, scanning and emailing facility which is becoming more and more popular with overseas companies who want their post the same day as received in “their” UK office.

What to look out for when chosing a virtual office!
What kind of people are using the VO service? So… small, medium or big, in this country or overseas, the benefits of using a Virtual Office or Virtual Switchboard are obvious.

Take advantage of the Virtual Office, it is the office of the future……..NOW!

Peter Radcliffe
Managing Director
OfficefrontLtd



Executive consulting firm offers advice on how presenters can ensure a successful investor roadshow

Sink or Swim by François Moscovici of executive coaching & consulting firm White Water Strategies

A key stage in any acquisition or flotation is to convince institutional investors that your proposal is not only a good idea, but better than the other 50 sitting on their desks. Investor presentation coaches are new on the scene. They typically work alongside the investment bank/adviser and do a job that is quite different to financial PR. They come in one or two weeks before the beginning of the fundraising roadshow to ensure that the presenters are psychologically prepared, the team gels,the message is clear and that they can answer tough questions in a concise and convincing way.

Although investor presentation coaches mainly work on AIM floats, they are also used for acquisitions, investor updates or additional rounds of finance – any situation where a persuasive, non-routine presentation is needed.

François Moscovici’s top ten tips:

1. IMPERFECT PRESENTATION Many people fret about what to do with their hands, looking down, and so on. This is far less important than having a clear story and delivering it with confidence. Presenters should spend significantly more time rehearsing being interesting than being perfect.

2. THE LONG HAUL After a while, most teams are comfortable delivering a great investor presentation. However,only teams with stamina can keep their delivery quality constant up to eight times a day for up to three weeks. Some teams don’t make it because it’s tempting to coast after a while or because hotels and late nights just get to them. Roadshows are a marathon, not a sprint.

3. COLUMBO-STYLE QUESTIONING There is no such thing as ‘off the record’.Individuals are being assessed throughout the meeting. Some presenters make the mistake of relaxing after the formal part of the presentation, but beware of innocent sounding questions just as you put your coat on. You are on stage until you physically leave the building.

4. BODY LANGUAGE Anything other than total commitment to your co-presenters is sabotage, so body language support during both the presentation and the Q&A is essential.Investors much prefer a balanced and mutually supportive team than a maverick chief executive. They don’t like to see one person carry all the managerial risk.

5. DON’T FORGET COMPETITORS Most presenters live in a fantasy world with no competition and grab market share willy-nilly. A good presentation should position you strongly yet respectfully vis-à-vis competition and anticipate their reaction to your introduction or expansion.

6. DON’T LOSE THE PLOT Your attitude towards the presentation is essential. It’s easy to become irritated when answering the same question for the umpteenth time. Remember that every new potential investor is listening to your message for the first time. You must appear as fresh and enthusiastic during the fifty-sixth presentation as during the first.

7. NO PLACE TO HIDE Be prepared for difficult questions, including those of a personal nature. Many entrepreneurs have had failures in the past. It is OK to discuss them. Make sure that any skeletons come out of the cupboard before you hit the road.

8. ANOTHER PEDDLER Investors sit in countless presentations promising untold riches. In other words,your plan is a much bigger part of your life than theirs. Make your argument distinctive and communicate enthusiasm for the project. What do you want to be remembered for when the fund manager goes before his investment committee?

9. REBUILD YOUR STORY By the time your investment bankers, lawyers and financial PR have gone through the presentation it will hardly be recognisable. It’s vital that presenters take back ownership of the message even within the straightjacket of regulatory constraints. Sometimes simply reordering a couple of slides makes a big difference. This is time well spent as it will boost confidence and the ability to deliver a clear message.

10. YOU ARE YOUR BEST VISUAL Forget complex overhead slides and fancy graphics. Firstly, 99 per cent of presentations are delivered from handouts. Secondly, remember that people buy people. So put the boring stuff in an appendix and engage your audience in a conversation.

François Moscovici
Director
WHITE WATER STRATEGIES
Email: fmoscovici@wwstrategies.com

And why business schools ignore business? by John Dembitz (Letter to editor FT Jan 2008)

As chairman of the oldest established sales training business, TACK International (60 years), I have been trying to persuade business schools that they should include sales training in their MBA curriculum.

Response, zero! Reason...not an academic subject. And yet everyone in business knows that selling is a key requirement, selling products, services, ideas, even oneself!

John A Dembitz
Chairman
TACK International Limited

Non Geographical Numbering (0800, 0845, 0844, 0870, 0871)... The Pros and Cons

First, an explanation of how the NGNs work and their cost.

The NGN was introduced a few decades ago and comprised mainly of two numbers, 0845 and 0870. Since then we have had new numbers added and the way all these numbers are charged has changed. They were also “National” numbers used mainly by large companies operating throughout the country.

The 0845 was a “Lo-Call” number which most people actually thought of as, and called, “Local”. This was a misunderstanding, what it really meant was that the caller paid part of the call and the owner of the number paid the other part. Not Local at all but cost sharing.

The 0870 was an early “Premium Rate” number with the cost determined by the owner who earned revenue from every inbound call made and the cost to the caller was much higher than their normal calls.

In recent years we have had new numbers added to the list and the old numbers have changed in the way they are charged.

Recently, OFCOM (the body overseeing the telecommunications industry) announced a shake-up of the way that these NGNs can charge and who will have to pay. It is intimated that the owner of certain NGNs will pay a large chunk of the incoming call and the number most effected will be 0870.

Currently there is no firm date for the changes and the costs intimated are estimates, so please check with your line/number provider what their charges are at the moment and if they have any information when they, the provider, expect to make changes.

Two new numbers which are becoming popular are 0844 and 0871. The 0871 is to take the place of the 0870 and charge the highest rate and offer the owner a substantial revenue. The second is the 0844, whilst it is still a revenue generating number, it is understood that it is capped at 5p p/min so the caller is not being charged an unfair or exorbitant amount to make the call.

The benefits of using NGNs

The disadvantages of using NGNs


When chosing to use NGNs, we should ask ourselves if they portray the right image for our type of business and how our callers are likely to react to them.

Staff Writer, OfficeFront Ltd
May 2008

Fate & How it plays its hand……..by Jeff Fine (Interior Designer & Project Manager)

I started my working life as a ladies hairdresser in the mid 60’s going onto ladies fashion retail and at one stage owned 26 shops throughout the country. In the late 90’s I became the joint owner of a highly successful group of 6 bar, brasserie and nightclubs which was eventually sold to a PLC in 2001. Following the sale, I spent nearly six months enjoying myself after having spent many years of hard work, I soon started to get very bored and decided, with my ex partner to open a night club in North London.

This was to be the worst business decision I ever made, it failed miserably and I lost a lot of money.

At that time I was 53 years old and had spent my whole life working for myself. I found myself without an income and thought “Who would employ me?” I had no qualifications and by today’s standards I was at the “too old stage” to be employed, no matter how much experience I had. I was driving myself (and my wife) mad at home thinking of what I could do to start bringing in some money. All the business ideas required capital. Finally I realized that there was nothing available to me and decided to become a mini cab driver.

Even though it paid a pittance, I was out of the house and was actually doing something!

I had been driving for about nine months (and hating it) when I got a phone call from someone I knew in the leisure industry. He was in the process of buying pubs throughout the country and re styling them. He had just bought a large pub in Exeter and luckily he remembered that I had designed and project managed the six units in our old bar/restaurant group and asked me if I would go to Exeter and come up with some design ideas for a bar and club.

I obviously jumped at it and spent a weekend in Exeter researching, presenting my designs to his board.They loved it and gave me a budget of £400k and told me to “get on with it”. I was to build & project manage the pub, search for and employ the manager, organize the kitchen and menus. What an opportunity and what fun.

Whilst this was going on, my new "benefactor’s" wife, a highly successful business woman in her own right, had just bought a £4.2m house in Kensington wanting to extend and refurbish it to sell on as an investment. She had seen and liked my design of the Exeter project and asked me if I would help her do the same for the Kensington house.

The work took almost a year and cost £900k to complete. She sold it, three days after going on the market for £7.4m.

So, now fate has helped me to become a successful interior designer and project manager.

I am now designing and project managing full time. Over the last four years I have had numerous projects and am currently working on a £90k refurbishment of a Victorian house, a £500k extension to a six bed house and also building seven new flats. What is very satisfying is that all my work to date has been by recommendation and has not required advertising. Having spent my whole working life employing staff, paying rent and having the headaches of running a business, I now work from home, have no staff and minimum expenses and what I earn is mine!

Funny how life and fate takes a turn.

Jeff Fine
07815 041781
www.jayfine.co.uk

The articles within these pages are written in good faith & represent the thoughts & opinions of each writer.
Readers are advised to check the validity & accuracy of the information when applied to their own requirements