Sterling Performance

Now that spring is around the corner, it’s time to look at the bedrock of your business wardrobe, the suit.

The pinstripe suit is still a solid, acknowledge business staple, and if you’re working in an area that expects a more formal look, then it’s worth investigating.

Far from the pinstripe being out of fashion, it may even be worn without a tie these days as long as that fits your office dress-code. However, there are a few caveats to wearing one -– it all depends on your body type.

Here’s a few body types to illustrate what will work and what won’t.

Tall/thin.  If you’re tall, narrow in shape and long in the neck, arms and legs – you will look very long and skinny in pinstripes, all vertical lines tend to accentuate height and narrow the body. Plainer fabrics would be more suitable for you, and as double-breasted suits seem to be making a comeback, albeit cut narrower. You are the perfect model for that style. Read the rest of this entry »

The UK’s working fathers may have the chance to share leave with their spouses, but how many would take it? Not many, if the recent Orange survey on paternity leave is anything to judge by.

When asked if they’d take advantage of expected changes to UK regulation, which would allow fathers to take over from working mums halfway through a year’s leave, only 18 percent of working men said yes.

The biggest disadvantage to taking proposed paternity leave (which is due to take effect in April 2011) is money, but 15 percent feel they are too important to their business to spend six months away. But there’s a cultural pull, too, to remain at work, with ‘presenteeism’ a bigger issue since the recession made redundancies a reality in some organisations. Of course it all depends on your circumstances. There are plenty of businesses where your productivity is still measured by time spent at your desk, and sectors where it’s hard to imagine working fathers encouraged to take paternity leave.

Even so, a large majority (79 percent) would take advantage of flexible working arrangements, were they on offer. So is it the office culture that dictates whether dads take advantage of paternity leave — or would they really rather not? Share your views with us.

(Photo: andrew_j_w, CC2.0)

If BA’s Willie Walsh is going to give in at the end of his battle with the cabin crews, he might as well give in now. At least he’d avoid inconveniencing some 75,000 passengers wanting to fly British Airways each day. But if the chief executive has the determination to win this dispute — in which the government has now become involved — he can change forever the structure of the airline.

Business is littered with bosses who talked tough but capitulated to secure a short-term solution rather than solve the long-term problem. The recent Royal Mail settlement buys-off employees with a three-year pay deal that guarantees no ensuing efficiencies.

But Walsh’s own industry offers an example to follow. The US government fired its air-traffic controllers and recruited new staff to overcome their restrictive practices. BA has Spanish practices that will shock its merger partner, Iberia, dating from the days when HR was still called personnel and successive managements talked tough then went soft.

The cabin-crew confrontation follows disputes with check-in staff, the Gate Gourmet caterers and baggage handlers plus strikes over clocking-in and a threatened Easter pilots’ strike. Add in the management failures of cancellations caused by staff shortages and the Terminal 5 fiasco and it’s hard to see why this is anyone’s favourite airline.

The current dispute could upset 500,000 travellers’ plans but will discourage far more from flying BA. Why book with an airline that might not get you there — or might not get you back?

So a company that is already making huge losses is losing real revenues as well as its reputation because of industrial relations rows. If Walsh fights but loses, he simply adds to the losses by reducing his top-line while doing nothing to cut costs.

If he has a hidden agenda, as the cabin-crew leaders suggest, then it must be to break the union stranglehold permanently, not simply on this one issue. Walsh has the cash in his balance sheet to sustain a fight but he must also find the resolve that failed his predecessors.

This is not class war, like past industrial relations battles with miners or dockers: the cabin crews come from much the same social backgrounds as BA’s customers. But thanks partly to good PR, the clients sympathise with the company rather than the crews. Walsh’s tactic is to divide and rule, recruiting other BA workers to do cabin jobs.

Walsh has won a small victory to make staff contribute more to close BA’s pension fund deficit. If he wins the cabin-crew dispute he can rescue British Airways. But if he backs down he will join the other BA bosses who failed to solve its structural problem, and if he’s going to do that, do it now.

(Photo: BriYYZ, CC2.0)

As the dispute between BA and its cabin crew staff rumbles on, customers are in a state of confusion over whether flights they booked for the Easter holidays will actually take off. This uncertainty is bound to create a crisis of confidence in BA’s reputation and will be potentially damaging to customer loyalty.

Whether its a disruption of service or , in the case of Toyota and Honda, the recall of a faulty product, the crisis itself is often not the biggest threat to customer relationships, but how it is managed.

If the crisis is managed well, the customer can walk away with an even better impression of the organisation than before the issue occurred. If it’s bungled, the knock-on impact of negative word of mouth can be crippling. Here’s a few key do’s and don’ts to help you navigate your way through a customer crisis.
 
These are some of the things you should do:

• Alert customers to the issue quickly: If you don’t give people information, they will either make assumptions or go to other sources that you can’t control. And if competitors get wind of the crisis before you have alerted customers, they’re likely to take advantage of the assumptions customers can make.
• Provide regular updates:  You’re standing in an airport, your plane is late and you haven’t been told why. Even if you’re not in a hurry this is frustrating. Give customers regular updates about what has happened, what you’re doing about it and when they will receive the next update. That way they know you’re working on it and they’re not left wondering what you’re doing.
• Show that you care: Show your customers that if your life depended on it you couldn’t be doing more for them. Show that you have all of your resource dedicated to fixing the problem for as long as it takes.
• Use social media: Tools like Twitter and online forums are a fast and effective way to reach a very specific audience. The content is also searchable so it’s easy for people to stay on top of it.  When we’ve used social media to communicate issues to customers we’ve ended up in a dialogue that engages the customer on a personal level, and also allows others to chip in on our behalf. We know our customers use these channels so it’s about communicating with them in a way that’s convenient for them. 
• Have senior people available: Senior people must be accessible to customers in a crisis. Make sure you don’t put walls around your organisation — customers should be able to email the senior management team directly from the website and may even have their phone numbers. I give all my customers my mobile number — I may only get a call every once in a while, but they know I’m there.

Here’s some things you should avoid:

• Delaying communication in the hope things will improve: Give bad news up-front and quickly. If you delay and things don’t improve, you only undermine the moral credibility of your organisation.
• Making the same mistake twice: People expect some level of human error from time to time. What they won’t accept is the same error appearing repeatedly.
• Embellishing or exaggerating how soon the problem will be fixed: Give customers your most accurate prediction of how long the problem will last, rather than saying it will be fixed ‘soon’ and hoping for the best. Tell them the truth up-front to avoid disappointing them again — you’ll find in the long run you’ll gain their trust if you’re honest and don’t promise more than you can deliver.
• Blaming other people or organisations: Passing the responsibility buck only frustrates customers more. Be open, transparent, accept responsibility and you will win the customer over. With this approach you’re likely to win more trust, not lose it.
• Making staff do or say anything they’re not comfortable with: Don’t ask staff to lie or say something they don’t believe in. Customers won’t buy it and eventually it will all come out in the wash.

The crisis we are going through at the moment is not economic, it’s moral, according to Paul Bennett,  chief creative officer at the European office of design organisation IDEO.

We need a reboot of our values and choices, in order to make the businesses on which our economy depends durable enough to withstand the next crisis.

Speaking at the Economist and Design Council’s Redesigning Business summit, Bennett broke this moral reboot down into a number of specific areas:

• Have a higher purpose and meaning. Those companies which transcend the profit imperative and take on a real basic need felt by their customers. “It’s about having the passion burning behind the eyes,” according to Bennett. Read the rest of this entry »

Twice a year I host a strategy directors’ forum for some of the UK’s leading companies. At one of our meetings we agreed some golden rules for strategy development.

Which of them could help your organisation develop a better strategy?

1. Keep it simple. A simple solution is easier to understand, easier to explain and easier to deliver. Look at Tesco’s strategy. It may look simple, but the key is that the executive team have relentlessly and persistently pursued its delivery.
2. Be bold. Companies gain a strategic advantage when they are the first to profitably exploit a new opportunity in their market. You don’t always need to be first, but you need to be the first to succeed and this requires boldness and the willingness to take prudent risks.
3. A good strategist is a good storyteller. You need to tell a compelling story over and over again. This requires passion, clarity as well as real anecdotes and illustrations. People remember and relate to stories that exemplify your strategy far more than they do to the facts and figures that underpin them.
4. Challenge assumptions and conventional wisdoms. Sky has transformed TV viewing in the UK by challenging the assumption that people will only watch free-to-air services. Even during the current recession, Sky has been able to trade their customers up to added value services such as HD TV.
5. Strategy = informed choice + timely action. Strategy is about choices and trade-offs, which require useful data rather than ungrounded opinions. Action is the essence of strategy and its timing is crucial. For example, many companies who perform best coming out of a recession are those that were able and willing to invest in marketing, R&D and acquisitions during the downturn (see here and here).
6. Focus. It’s easier to succeed if you focus on a few key areas of the business. How many is too many? The forum’s view was that three priorities at any one time were probably enough for most executive teams. Dabbling in too many things will drive failure.
7. Ideas are the currency of strategy. Spend freely. Be a big spender and share your ideas. Measure your success by the number of other people in your organisation that present back to you your ideas as their own.
8. Don’t confuse strategy with planning. In a McKinsey survey a few years ago, less than 25 percent of senior executives agreed that they made big strategic decisions during their strategic planning process. Why? My view is that the reason is that in most organisations the emphasis is on planning not strategy, and therefore only incremental improvements to performance are delivered.

How do you cope with a bad assessment at work? Having been on both sides, I know there are good and bad ways of dealing with it.

Most, but not all, bosses are human: they hate giving bad assessments and will be desperate to get through it.

Handle it badly, and you just give your boss more evidence to use against you.  Handle it well, and they will be so relieved that you should be able to come out with a constructive outcome.

Here is how you can make a bad situation worse:

• Argue and deny. This keeps the discussion negative and backward looking. And since the boss has the power, you are unlikely to win the argument.
• Spread the blame. The “he said you said I said, so she said” discussion gets nowhere. It paints you as a poor team player who avoids responsibility: more evidence for the boss to use against you.
• Get emotional: become angry or weepy. This will simply be used as evidence by the boss that you are not up to the job.

Here is how to make it better (and to prepare, if you know what’s coming): Read the rest of this entry »

The criticism of Ernst & Young’s role in auditing Lehman Brothers’ accounts is worrying. Enron’s collapse brought down Arthur Andersen, reducing the Big Five global accounting firms to an even Bigger Four. The banking crisis cannot be allowed to reduce companies’ choice yet further.

Ernst & Young oversaw the accounts that shuffled $50bn of transactions off the US bank’s balance sheet to make Lehman look less leveraged. The audit firm says the move was both legal and met GAAP accounting standards, but that may not stop the bank’s creditors demanding recompense.

When a company collapses there is no point suing it or its directors: creditors go after the advisers and professional firms who are still standing and have deep pockets. The report released by the US bankruptcy judge detailing Ernst & Young’s role is the smoking gun sought by creditors planning class-actions.

And however good a defence Ernst & Young has, it is the potential impact on its reputation that could do the damage. That’s what did for Andersen. Lehman chose a Big Four firm because a big bank wants its accounts endorsed by firm a with a reputation at least as good as its own. If E&Y’s standing suffers, why will any top-company chairman select this firm rather than rivals?

Ernst & Young is already the smallest of the Big Four auditors, with 25 FTSE-100 companies compared with PricewaterhouseCoopers’ 41, KPMG’s 25 and Deloittes’ 21. But it carries more weight among the next 250 largest UK companies, with a 20 per cent share — and this quartet of accountants has not only a British monopoly but global audit domination. All four are international and no other firms have broken into their market.

So the company seeking a new auditor has nowhere else to go unless it is prepared to look outside the Big Four — and only one FTSE-100 company has dared do that. If the monopoly comes down to a Big Three, then the company chairman considering changing accountants will have a choice of only two other firms - one of which might be retained by the company’s main competitor or be the firm sacked in the last change.

Ernst & Young obviously hopes the Lehman link will leave it unscathed but it is scares like this that show the importance of having a wider choice of audit firms.

An anti-trust break-up of the big firms would be drastic. Barring clients from using their auditors for other accounting work might make them select smaller firms. Encouraging the creation of new firms and changing the ownership rules would help. But something needs to be done in case another firm goes the way of Andersen.

If you spent this morning strap-hanging in a stuffy, over-crowded carriage, you’ll be in favour of the latest calls to ease rush hour traffic, human and automotive.

UK business organisation the CBI is calling for major reforms to roads and public transport to ease peak-time bottlenecks, and its “fresh thinking” also calls on employers to break the nine-to-five routine.

In its report, “Tackling congestion, driving growth — a new approach to roads policy”, the CBI’s focus is the roads — which 80 percent of businesses refer to as “vital” to their success. But to ease traffic on the roads, the CBI’s recommending flexible working times and — gasp — car-pooling.

For this to work, says the CBI, government and business needs to deliver on its promise to provide every home with broadband by 2012. It claims the UK’s falling behind on broadband provision and that employers need to stump up some more cash for videoconferencing technology to help people work in “novel” ways.

This all makes perfect sense, although I’m not sure how ‘fresh’ the concept of flex working is — organisations like the Work Foundation and Working Families have long been advocates. It’s a happy convergence of the interests of environmental, employer and employee needs, but speaks volumes about how few companies are working flexibly already.

The fact that the CBI’s encouraging employers to offer staggered working hours suggests it’s not high on employers’ agendas already. Isn’t that surprising? Flexible hours are a simple way of according employees autonomy, they may save a small business on property costs, they encourage accountability, cut down on time-wasting commutes…  I’m curious as to why employers — or employees — don’t already recognise the benefits. Or is the CBI preaching to the converted. Let us know if you’ve got a view.

The Government has just announced a significant funding initiative to help secure the future of Vauxhall and Opel. Parent company General Motors Europe (GME) will receive a loan guarantee of £270m to help prop up the ailing motor manufacturer’s operations in the UK.

Although a spokesman  for the Department for Business Innovation and Skills (BIS) was reluctant to go into the conditions GME had to fulfil to receive this loan guarantee, he did confirm that the negotiations for it have been going on since November 2008, indicating the complexity of the deal.

In a prepared statement, BIS Secretary Lord Mandelson said:  “I always said the Government would stand foursquare behind Vauxhall and with this announcement today we have kept our word. These are excellent plants employing a first rate workforce. We need Vauxhall to thrive as part of Britain’s automotive manufacturing base and following our negotiations with GM Europe I am confident it will do so”.

The BIS spokesman said it was hoped the loan would allow GME to continue restructuring its operations in the UK and mainland Europe.

This was echoed by a spokeswoman for the Society of Motor Manufacturers and Traders (SMMT), who congratulated the government for supporting the auto industry. Read the rest of this entry »