Sterling Performance

I’m just back from Mobile World Congress (MWC) in Barcelona, and I’m feeling a little self-important.

MWC is a huge telecoms tradeshow where the great, the good and the proflagate debate the future of the industry. I went along because I’ve recently launched a tech-startup in the mobile technology space. This year there was change in the air, a power-shift from the giganta-networks like AT&T, Vodafone et al, towards the nimble and powerful web-based players such as Google and Skype. Even better, those upstarts are falling over themselves to work with little players, like me.

Of course some things never change. Tech giants are still building exhibition stands with more space and better décor than my own apartment. Eastern European companies continue to fluff their stands with under-dressed pretty girls like it’s 1977. Best of all are the national stereotypes, from the sports-jacketed US executives to the buttoned-up, terrified looking Japanese ladies. When all of those are gone I’ll know times have really changed.

You probably already know that some Big Stuff happened. Samsung screamed about a new phone called Wave, based on an operating system called Bada. Microsoft (the ‘Bing’ people, there’s a joke in there somewhere) released Windows Phone 7, replacing the antiquated Windows Mobile operating system. All this is happening because these companies have Big Problems with iPhone (and its App Store) Google (and it’s Android operating system) and the fact that mobile innovation now resides with the global army of app developers. I’m one of those people, though I claim no special credit - there were thousands of us in Barcelona.

I didn’t see these big launches. I was too busy, and knew I could check them out online later. Instead I spent my time briefing journalists on our latest exploits while keeping my business running from hotel hotspots and quiet corners. I think I managed it, though I’ll know if I’m bankrupt when my mobile roaming charges become clear.

This year, the new kids were given their own playground - A hall at the top of the hill named App Planet. This was my favourite spot and was never less than packed to the rafters. Here the suits gave way to t-shirts, Blackberries became iPhones and exhibitors appeared a decade younger than those in other halls. Sensing the mood, Skype were there offering free phone calls, while beaming developers carried around their free Nexus One phones from Google. Sadly I arrived too late for the giveaway and am still kicking myself.

My company is into mobile augmented reality, and the organizers invited us onto a panel to debate this emerging industry. With 300 people packed into the hall, three start-ups flanked a nervous Nokia executive on the stage. A sense of humility is required. After all, Nokia’s event budget probably exceeds the combined revenue of all the other companies on the stage, but the point is that we belonged there. Later, I took part in an augmented reality demonstration event - Essentially technology speed-dating. It had been billed as a press event, but in truth most of the demos were given to the big exhibitors who were all keen to know “where are you going with this? How many downloads have you had? What is your business model?”

Perhaps I’m getting a little carried away, I’m sure my mother would say I’m over-tired, but there really was something different this year, a palpable changing of the guard. Now though, I’m planning on sleeping for the whole weekend.

(Pic: James Nash cc2.0)

Portsmouth University is one of a number of colleges kicking off an initiative to boost graduate recruitment amongst small and medium businesses (SMBs) in their area with a government funded internship subsidy.

Earlier this year, the Higher Education Funding Council for England (HEFCE) announced £13.6m for a graduate internship scheme designed to give new entrants a way into the job market and at the same time, provide support for local businesses by giving them access to educated interns for a limited time.

The scheme in Portsmouth has enough funding for 90 graduate internships. Employers will receive £1,200 towards the intern’s salary, provided they match that with a further £2,400. Internships have to last for at least 12 weeks. That’s a wage of around £8.50 per hour — more than the £5.80 per hour national minimum wage.

So far, 54 other colleges have received funding for between 20 and 700 placements in their area.

In total, just under 7,000 placements have been created, but there is still funding available for a further 1,500 internships to be created by colleges not yet applied to the scheme.

Although this won’t solve the problem of the chronic shortage of vacancies for the 22,000 graduates on Job Seekers Allowance, it will go some way to taking the heat off those who have just finished or are about to leave university.

Alice Hickman, recruitment manager at Purple Door Recruitment, the in-house recruitment agency at Portsmouth University explained how involved she was in the selection and ongoing development of the graduates she places. (more…)

Barclays Bank’s proposed bonuses to high performing staff illustrates the dilemmas banks face — reward high-flyers or risk them skipping off to rivals, increase lending and risk being accused of abandoning fiscal prudence.

Barclays has tried to offset any umbrage caused by the doubling of its yearly profits for 2009 to £11.6bn by announcing the chairman, president and CEO will not take their annual bonuses and that it lent £35bn to individuals and businesses last year — three times more than it promised at the beginning of the tax year.

That said, it is paying 22,000 investment bankers £2.7bn in short-term and long-term bonuses — about £100,000 extra in their pay packet. The announcement looks selfish against the background of a report out by the Institute of Directors which found 60 per cent of small businesses have been refused the loans they need to keep their heads above water and many have been forced to rely on unsecured credit, such as credit cards.

Undoubtedly there will be a real fear that if investment bankers don’t get the remuneration they feel they deserve, they will defect, especially after the news that two senior investment bankers at majority state-owned RBS have done just that, a week before the bank announces its bonus package. Barclays glowing figures are entirely down to its investment arm, with the retail division halving its yearly profits. Is it not good business sense then to invest in the booming part of the business and cut back on the poorly performing part?

It’s understandable that banks are more careful in lending to small businesses, which carry a higher risk of defaulting on debt. The banks were branded the irresponsible catalysts of the credit crunch and are much more risk averse in all areas of business than they were two years ago.

However, Barclays and all the other UK big banks have a duty to the economy now. Barclays didn’t take any of the government hand-out, but it benefitted from the banking industry as a whole being propped up by the public purse. Business customers are also tax-payers and so deserve to benefit from banks’ stellar profits.

There are lots of good business reasons too for banks to release more funds to small businesses. Foremost, it wasn’t lending to small businesses that caused the credit crunch, so there is little good reason that they should be penalised any more than they were before the economic downturn. As a group, they are a significant customer group for the banks. This customer group may find their custom is more welcome elsewhere if UK banks restrict credit for the long-term.

More than this though, although many small businesses fall by the wayside, some eventually become big businesses that are prudent investments. To throttle small businesses now limits the potential for profits for banks in the future.

Employee engagement has been a buzz-phrase among businesses for a few years now. For some managers, its value has hit home. The Chartered Management Institute’s ”Future Forecast” survey at the end of 2009 found that business leaders were already resolved to do more to help individuals and team development in 2010.

And the MacLeod report, “Engaging for Success: Enhancing Performance Through Employee Engagement“, compiled by Nita Clarke and David MacLeod, raised the concept  at governmental level, seeking to demonstrate how engagement can counter the negative effects of recession and help a company to recover faster.

“Everyone is concerned with performance and how to get through the recession — there is a growing understanding that people are key,” says MacLeod. There is a group out there that think this is about doing an employee survey and then delegating the findings to work-groups and then getting them to act on the findings. This doesn’t lead to the transformational benefits you can get.”

Here, he talks to BNET UK about how the national engagement initiative is taking shape and shares his tips on how to prioritise people at work. (more…)

In the three years since I left the corporate world and started my own consulting business, the biggest single lesson I’ve learned is the need to accept and embrace failure.

I don’t mean failing at my everyday operations – my clients wouldn’t pay for that and I wouldn’t last too long – I mean being willing to fail when I develop and try something new.

To be honest, it’s a lesson I’m still learning, but the demands of selling my services have shown me:

• If I demand 100 per cent success then I’m very unlikely to do anything interesting or worthwhile.
• if I put the pressure on myself to ‘get it right first time, every time’, I end up planning and planning, rather than taking action.

In fact, failure is at the heart of all progress. As Woody Allen once said, “If you’re not failing every now and again, it’s a sign you’re not doing anything very innovative.”

Yet many large corporations detest failure. In the minds of large company executives it’s a word that brings to mind images of a P45 and a black bin bag of hastily collected office belongings. For many, the desire to protect current business overwhelms any wish to radically change their customer offer or business model.

Most breakthrough innovations are, instead, driven by new entrants and upstarts with nothing to lose. Ryanair and EasyJet, not BA or Lufthansa, for example, transformed the European airline market. Similarly, Google rather than Microsoft has transformed the way we use the web, and, going back 30 years, it was Microsoft that acted as the catalyst for the explosion in our use of PCs.

Becoming better at failing should be at the top of many senior executives’ list of objectives for 2010. So how can they better take on the risk-seeking attitudes and approaches of start-ups?

Earlier this year I hosted and facilitated a roundtable discussion of strategy officers from some of the UK’s leading companies. Our collective view was that the key for large companies to innovate better was for them to be willing and able to fail more quickly and cheaply than they currently do.

Instead of relying on detailed analysis and research, in a vain and futile attempt for the initial version to be perfect, it is faster and more effective to create and test a simple prototype for your idea. It shouldn’t cost a lot of money –- in fact, the cheaper the better, usually -– and although it won’t be perfect, it will help you quickly learn whether you have something of interest or a dog on your hands.

In other words, by starting to behave more like a cash-strapped new-start company, focusing on creating a series of straightforward but ever-improving prototypes rather than an ideal one-off solution, large companies can become faster, more agile and, ultimately, more innovative.

(Pic: tibchris cc2.0)

Chancellor Alistair Darling’s pre-budget report has been met with complaints from various business organisations, but reactions against his proposals have actually been quite muted, indicating that although they aren’t popular, they are bearable.

In reaction to the much-trailed windfall tax on bank bonuses, the British Banking Association chief executive Angela Knight warned international banks will view London as a less attractive place to build a business. The one-off supertax of 50 per cent on any bonus over £25,000 is expected to reap the Treasury £500,000. However this levy will be made against the banks, not employees

This is against a rise in National Insurance Contributions (NIC) of 0.5 per cent from 2011, which should provide £3bn a year to government coffers, putting into context how much impact the bonus cap is going to have.

Unsurprisingly, business organisations across the board are against upping NICs. CBI director general Richard Lambert said the move will hold back job creation and business growth. David Frost, director general of the British Chambers of Commerce (BCC) called it a tax on jobs.

Again, private sector industry bodies were keen to shift the Chancellor’s focus away from them and on to public sector spending. There were applause all round for measures designed to cap pay and pensions in the public sector. The latest survey from business software company Sage of 2,000 small businesses found over half were in favour of the government tightening up public sector inefficiencies before it started dipping into private sector pay.

So, not a positive reaction to the pre-budget report, but not a riot of protest either. More than outright rejection, there was a note of unease over what the implications could be if Darling has got his sums wrong.

BCC’s Frost called government predictions for growth in the next two years too optimistic and a miscalculation would force a u-turn on the NIC increase and longer time-frame in reducing the national debt of 78 per cent of GDP.

Other than putting a fat cheque in your hand, what more could your bank do for you?

Now, I can understand all the hurdles with respect to regulation and banking structures, but there is no organisation better than a bank to address the market need and reap the considerable rewards presented by an understanding of how business works.

If the banks could garner their knowledge through their sales teams they could have a profound impact on innovation and the economic growth of the nation.

There’s one particular project I’m working on that has thrown up a huge opportunity. It serves to show the hidden value that middle-market business banking is missing out on.

Early stage company, Tailored Learning Resources is running 3 informal pilots in Gateshead, Solihull and Reading. They show that they can positively change the eating habits of large numbers of primary school children. Current UK government policy on health and obesity is creating huge demand for this kind of capability and so far no one else has come close to demonstrating an ability to have this level of impact. 

One possible growth strategy for TLR is to partner with a big food manufacturer to support a nationwide roll-out. The implications for the partner, in terms of reputation and brand awareness, as well as direct sales are significant – in the tens of millions range. On TLR’s behalf I’m talking to the MD of a big food manufacturer, which is owned by a US based private equity firm, which owns other food brands, that in turn have global reach.

And there’s a similar obesity problem in North America.

Anyone with a reasonable understanding of the business environment can see potential routes to funding, high margin revenue and high value exits. Along the way you can see big credit balances, triple A rated debt requirements and corporate finance advisory services, all amounting to lots of high margin business for a bank.

All the experience I have, that lets me see the opportunity and help TLR, is available in a bank such as RBS, LloydsTSB, HSBC or Barclays.

I’ve asked Angeline Westley, TLR’s CEO the question and it’s never occurred to her that her bank could be a trusted advisor. Her bank manager has never offered anything other than financial products. And it turns out that TLR has its account with the same bank as the big food manufacturer.

So why not tell your bank manager all about your business and what you’re trying to achieve? Ask him how he can help. If you sell B2B tell him what kind of customers you’re looking for and can he help you get to key decision makers that might be customers of his bank.

Like most service companies, banks are driven by the demands of their customers. if enought of them start asking for business building advice, they will soon get the message and start building product portfolios to meet that need.

(Pic: avlxyz cc2.0)

It’s not high on anyone’s list of most interesting things, but the rise in VAT on 1 January is something all companies must take seriously. It might be tempting to think that if you aren’t in retail, it’s not a big issue, but unless you don’t purchase supplies or charge people money, chances are it will have an impact on your business in some way.

According to Kevin Hart, the man at business software specialist Sage in charge of government relations, there are around two million VAT registered companies, and a recent poll conducted by Sage, of over 2,000 customers, found one in eight of them were not aware of the impending rise in VAT.

Not only will the rise in VAT itself cause disruption, but for many companies, principally retail and hospitality, the change comes at the busiest time of year, when staff are concentrating on pulling revenues.

If your company isn’t in retail or hospitality, chances are it will be winding down for the holiday and short-staffed, so complying with the VAT change could become a challenge for other areas too.

On top of this is a number of other changes, which may or may not affect you. For instance, the car scrappage scheme closes, so any company related to the motor industry is likely to suffer multiple hiccups over the new year.

If you export services to countries in the EU, you will also have to comply with EC sales listing for the first time in 2010. So, there is the compound compliance workload to consider and it’s vital that you start managing the switch early.

Here’s a few tips from Sage on how to cope:

• Plan early for the change - don’t leave it until after Christmas. Make sure enough of your staff are on hand to process the change.
• Consult with your accountant early on to understand how the VAT change will impact the way you handle transactions - they may be busy with clients’ self-assessment returns towards the end of the year.
• Pay particular attention to any revenues or costs that have been quoted in 2009, but won’t be paid until after the New Year. Make sure automatically recurring transactions are updated.
• Explore whether there are any special dispensations for your business to help you manage the change. Retailers, Hospitality and Telecommunications companies do not need to make the change until after 1 January, rather than on the day. Retailers also may well also have the two week’s grace to re-price stock at the shelf extended to four.
• Don’t forget to check that your suppliers or sales channel is doing the necessary work to cope with the changes themselves.
• Check out the advice document published by HMRC to help you manage the change as smoothely as possible.

Finally, if you are in a newly registered business or one that turns over more than £100,000pa, you can’t rest up once you’ve completed the necessary changes, because new regulations coming into force next April will require you to file all returns and make all VAT payments electronically.

(Pic: Finsec cc2.0)

Enterprise UK, the organisation set up to encourage social entrepreneurship and run by the Department for Business Innovation and Skills has kicked off Global Entrepreneurship Week. The event was launched by a morning of panel discussions at the British Library in London and while there was some sage advice from big business consultants and successful start-up kings, not all of it was in line with current accepted thinking.

Despite Dragon Peter Jones, who represented Enterprise UK, pressing for the need for the UK at large and the UK media in particular to speak up for British entrepreneurs and for entrepreneurship to be part of the national curriculum, other speakers advocated a bit of a more maverick approach.

Here’s some of the more subversive advice to come from the panellists: (more…)

At the launch of Small Business Week 2009, BT presented the results of a massive survey of SMEs. A sample of over 7,000 business people revealed 20 per cent were using social media in some way to promote their businesses.

I had some questions for Mick Hegarty, strategy director at BT Business, who heads up the telecoms behemoth’s own social networking tool, Tradespace.

BNET: One in five using social media is quite a surprisingly high number, considering the size of the sample. Why do you think so many have embraced the new technology?

MH: For small businesses word of mouth is one of the most powerful ways of attracting and retaining customers, business social networking is now taking this online and enabling them to extend their networks and thereby the power of word of mouth.

Are social media projects quantifiable in any meaningful way or is it merely a nebulous profile augmenter that can’t really be judged a success or failure?

We have seen through the extensive feedback on our own business social networking site that small business are seeing real benefits. Some of our members, such as Lyn Hill from Hedgepig have cited a significant increase to their monthly turnover – in this particular case 20 per cent.

It is also important to remember the impact that social media content has on the search rankings of a business and their ability to manage an effective digital marketing campaign with Search Engine Optimisation (SEO).

[BNET notes: Googling 'Lynn Hill' and 'Hedgepig' results in a BT Tradespace link coming top, so SEO not working entirely for the user's benefit in this particular instance then.]

What three tips would you give a SME looking at using social media?

• View social media as a way of not just getting noticed but also building your online reputation, there are tools now available as part of business social networks that help you take advantage of communities and give you a means to build up a online fan base.
• Look at video as part of your digital marketing not only does it allow you to offer a unique perspective on your business but also can help you climb the search rankings andstand out from your competitors.
• Updating content and keywords will ensure that you continue to get noticed and enabling you to compete on a more level playing field with even your largest competitors, this doesn’t need to be complicated there are simple tools available to let you blog, podcast and update online content yourselfwithout being a techno wizard.

(Pic: oskay cc2.0)