Tag Archives: Business Books

The Business of Life Chapter 24 – can success come from losing?

I had settled into the pattern of a weekly commuter.  Monday mornings would see Denise dropping me off at Leeds-Bradford airport to catch the first flight down to Heathrow where I would switch terminals to catch the next Swissair flight.  Because of the time difference, I didn’t get into the office much before noon.  On Fridays I managed to flee the office by late afternoon in time to catch the BA flight to Manchester where I had arrangements with a local taxi firm to pick me up.  Frequently, I would be making mid-week trips to one or more of our subsidiaries or meeting with two of my direct reports who were based in our factories in Nuremburg and Tienen (Belgium).  Evenings in Geneva would have me either entertaining visitors or taking dinner on my own in one of the small local restaurants.  Given the uncertainty of the situation, it was my intent to save as much of my Swiss salary as I could.

Highlights were the weekends when Denise came over to Geneva.  We would visit some of the restaurants in the city centre or in the small villages on both sides of the lake.  We travelled around as much as we could at weekends and also managed to take a couple of short breaks walking in the mountains.  We also had a great week when my daughter Victoria also came to visit (marred somewhat by meetings I was required to attend).  Sundays were never a complete success when Denise came to stay as it seemed as if we were simply killing time until the time came to drive her to the airport.  The realisation that we were going to spend yet another week apart would cast a gloom over the day however much we tried to divert our attention with lunch out or trips further afield.  There was always that flight to catch and the growing realisation that the sale of the company would provide little of benefit to me.  I had pretended to myself that it might not happen (maybe no-one would want to buy us) but now the reality kicked in.

The meeting with our prospective buyers was a dispiriting occasion that only served to prove to me that, whilst our own senior management might have had no strategy for long term success, this lot had even less.  The reality was a management buy-in team (MBI) backed by CVC Capital Partners represented by Michael Smith, CVC’s CEO.  Michael Smith came across well enough but said nothing of substance to enlighten us of the plans they had for the business.  The management team comprised Norman Scoular (ex CEO of a small UK conglomerate) and another individual, Eddie Bartlett, who I can only describe (on his subsequent behaviour) as Norman’s enforcer.  Norman, pleasant enough on the surface, also said little of substance except to talk of personal responsibility for personal targets.  In turn, Eddie droned on repeating most of Norman’s utterances as if he believed that the repetition would somehow add weight to the vacuous comments.  The only concrete aspect to emerge was that we were now into the due diligence phase of the sale process.  We were instructed by our new prospective masters to respond to any questions they asked to the fullest extent of our knowledge

There was no mistaking the wealth in Switzerland, with fine houses, exotic cars, expensive shops and starred restaurants everywhere.  The Credit Suisse cash machine situated in the lobby of our building had a disconcerting habit of dispensing nothing smaller than a 200 Swiss Franc note.  This was probably fine if you were pulling out a wad of these in one of the many Michelin starred restaurants in town but was a definite problem if your intended destination was merely the local bar!  However, wealth had its positive side and my Swiss bank balance was growing nicely as a result of my abstemious lifestyle.

Having assembled my evidence on the malign effects of the bonus scheme on stock levels across Europe, I decided to discuss the matter first with Alain (VP HR).  A large Belgian man who took an equal pride in his systems and procedures as he did in attempting to demonstrate the correctness of his views regardless of the subject, he listened with growing impatience.  “Listen,” he finally roared, “I spent a vast amount of time putting our incentive scheme together and I’m not about to change it on the basis of some flimsy information!”  Knowing that little happened on the HR front without Alain’s consent I argued to myself that, without Alain’s agreement, Don was unlikely to listen either.  Instead, I decided on a different tack.  We had a general managers’ meeting due for the next week so I merely told Don that I needed a substantial time slot to impress on the assembled group the importance of accurate sales forecasting.  He agreed and the time was duly allotted for late morning.  I worked on my presentation until I was absolutely confident that the logic and rationality were impeccable.

The day of the meeting dawned fine and sunny but as the meeting room started to fill I discovered that neither Don nor Swaanen were present.  I had a quick word with Germaine who informed me that Don, Swaanen and Dan (VP Finance) had decided to play golf in Evian and wouldn’t be back until lunchtime.  I tried to rearrange the agenda to put my slot back until the afternoon but found that this wasn’t possible.  I therefore either had to withdraw the subject from the agenda or go ahead without Don.  By this stage I had no alternative but to proceed.  It was conceivable that Swaanen had got wind of what I was planning and had decided to encourage Don to take the morning off.  Events would later prove at least my first supposition to be correct.

For this meeting I had decided that the issue of the bonus scheme was not relevant, it being purely a head office decision if a change was to be made.  Instead I was intending to focus on the need of minimising stock levels across Europe and the vital importance of letting the DRP system play its role.  For the presentation I had made slides of the graphs generated by DRP showing the accuracy of the system sales forecasts versus country amended ones and the actual results.  In order not to be confrontational all the information I showed was without any country identification.  Instead I had prepared an envelope for each of the general managers enclosing the results for their country that I handed out at the end.  I made known the saving we could make if everyone could trust the DRP generated forecasts and I asked for their support.  Wishful thinking.

All hell broke loose.  Ignoring the incontrovertible evidence in front of them I was attacked on all sides by men who argued black was white.  I knew that there was a degree of animosity existing between country managers and the factory managers who supplied them but I had simply not expected this outcome.  There was simply no-one in the room who was prepared to even acknowledge that their forecasting could be improved.  By the time Don appeared he wasn’t interested in becoming involved in the subject and quickly moved the meeting on to the next agenda item.  I had failed in two battles but I hadn’t given up.

The following week we had a meeting scheduled in London for Monday and that evening I travelled back to Geneva with Don & Alain.  As we had time to kill we decided to eat at Heathrow and over dinner I raised the stock and bonus subject with Don, going over the full facts.  For some reason Don would not acknowledge that there was anything wrong with either the stock or the bonus systems that couldn’t be put right by my team reviewing every single product line forecast for every country every month.  It was both an illogicality and an impossibility and I told him so.  Don disputed this and we went around the subject again but with voices getting louder with every sentence.  Alain stated that the bonus system had no part to play in the situation.  I reminded them of the investment that had been made in the DRP system and that it was being ignored by everyone.  By this time we were all shouting at each other in the middle of the restaurant.  In the end I said that I could not achieve better than the existing system.  But, if he was serious about making an improvement, he should take the whole logistics function away from Swaanen and give it to me to manage and I would commit to making it work.  We were by now red faced and out of breath but Don brought things to a close by agreeing with my proposal.

The following day I went into the logistics department to request that a further analysis I needed be produced.  Sheepishly and with great embarrassment the team informed me that Swaanen had that morning instructed them to not even speak to me again.  When I got to see Don he also looked embarrassed and said that upon reflection overnight he had changed his mind and I must proceed as he had originally instructed.  I had lost the war.  By connivance and weak management we were wasting $10m a year in working capital and no-one wanted to even look at the root causes.  I couldn’t give up.

By this time it was clear that, unless a last minute disaster occurred, the transaction to sell the business would complete.  Feeling less and less respect for the senior team I gave up the daily ritual of lunch with them and started eating instead with one or other members of my team (something that was far more relaxing).  In a last ditch effort to preserve something of the work I had put into the goal I had been given and the findings I had made, I told Norman that I would appreciate a meeting with him as soon as possible.  The problem was that he seemed always to be travelling.  Meanwhile, Christmas was approaching and I decided to drive back to England with my son Alex.  He had been attending a French language school in Chambery, had come to the end of his course, and needed a lift home.  We enjoyed the time together and it made a pleasant change from air travel.  Christmas passed too quickly and it was soon time to return.

A harsh winter had descended upon Europe after Christmas and by the time I drove back across France the temperature was showing -18C.  I had tried to keep the situation out of my mind over Christmas but as I drove along near deserted autoroutes the situations I faced looked decidedly unattractive.   If the sale by some chance fell through it was clear that my role was going to become increasingly more difficult. I had a brain that wanted to understand the big picture and address the things that influenced it.  The problem was that I had neither the skills nor the inclination to enter into politics.  I had also by now made myself something of a pariah amongst the senior team in Geneva by fighting without fear or favour for what I knew to be right.  On the other hand if, or now more likely when, the sale went through I faced new management that seemed to hold views that were an anathema to me.

Finally, in January I met Norman for dinner one evening.  He wanted to know my views on the business, which suited me just fine.  I gave him an overview that I felt was realistic and showed opportunities.  I took him through an abbreviated version of the stock saga and shared with him the savings that could be made in working capital. However, Norman surprised me with his response that indicated he had little or no interest in the DRP system and that country managers should take responsibility for their own stock levels.  They should be completely responsible for their own results.  We talked on but it became clear that in terms of modern management thinking, Norman was back in the Stone Age.  Newco was not going to possess a culture that would play to my experience, training or skills.  A new threat wormed its way into my consciousness; what if they did want me?  A great concern.  I also had to pick up the bill.

A week or so later we got the news that the transaction had completed and Norman and his team marched into the offices.  Don had disappeared and then Norman promptly got on a plane to somewhere.  Eddie quickly took up his role as enforcer with relish.  As will have become apparent by now my view was that whilst many of the problems in the industry were structural, we certainly hadn’t made the best of the hand we had drawn.  However, that is different from some diminutive clown telling us we had all been complete idiots.  The only thing of note that happened that first week was that business class travel was banned and we all received a long lecture from Eddie on the need to save money and how life was going to change.  I’m not sure what motivational training Eddie had had but he wasn’t a patch on my old headmaster at the art of bollocking.  Life at the back of the plane on Friday evening wasn’t too bad but the signs for the future were.

A few days into the following week Alain called me into his office.  Looking less like his usual bombastic self than I could ever have imagined he fidgeted and launched into the worse version of a HR scripted Dear John speech I had ever heard.  I put my hand up to halt him, “Don’t worry about the niceties, Alain” I smiled, “Just be good enough to tell me if this lot are going to honour my contract?”  It was with relief that he nodded and handed me the paper laying out the terms of my severance, which were exactly as my contract.  Alain went on to tell me that my whole team was to be fired with just one exception   He held out his hand for my office and car keys.

At the age of 47 and after 13 years of constant commitment and effort to the organisation that had given me more highs and lows than I can now recall, I was out of work once more.

Postscript

The North American business of GTE Sylvania was sold to Siemans shortly prior to CVC purchasing the European and Rest of World business.  Europe and ROW was subsequently sold on by CVC some years later and has passed through several ownerships since.  The business is currently owned by an Indian conglomerate and was the subject of an article in the Sunday Times (22 July 12) describing the difficulties they had in changing the company culture.  

My inactivity in the ‘non-job’ referred to above did not in fact stop me from carrying out a very detailed research project to establish the viability of the Linolite brand.  The results I obtained indicated that attempting to extend the brand’s franchise was not a viable proposition; this was ignored and the product range I had developed was rebranded Linolite despite my stiff opposition.  Today the Linolite brand is no longer owned by Sylvania (which has gone on to develop its very successful industrial and commercial lighting fittings identity) and appears to have a very limited market presence.

Greg retired to Florida where I understand he still lives.  Don now works for a small venture capital company owned by a past GTE Sylvania president.  Alain still lives in Geneva where he runs a successful multinational HR consultancy.  Swaanen was persuaded to stay with the business.

Norman died on Swissair flight 111 in a crash over the Atlantic in September 1998.

Image courtesy of  www.Fecielo.com

The business of life Chapter 21 – troubles mount

Gregg’s main management control system was a bi-monthly pan-European meeting of all the general managers from most of the 16 countries we operated in, plus those running our factories.  Seated in some vast hotel room in Geneva we would have to make our individual presentations of progress against our national budgets whilst being quizzed by Gregg and his large head office entourage.  There we sat for three whole days whilst the circus played out.  On one occasion (when Gregg was not suffering an attack of post prandial narcolepsy) I followed the German factory manager’s presentation with my own.  A key factor in an adverse variance to my budget so far that year was a very large exchange loss against the budget rate (set by head office) of the pound against the DM.  Gregg leapt into action, “Whaddayamean ya lost money?  Where’s it gone?” he roared, “Get the German guy back up here with his P & L, I wanna find it!”  Over half an hour was wasted whilst Peter, my German colleague and I were forced to submit our accounts to ever closer scrutiny whilst Gregg played hunt the profit that he felt sure would counter my exchange loss.  Gregg was convinced that someone was making money out of my budget variance and wasn’t placated when I finally offered the explanation that it had merely disappeared into the English Channel.

By around 1990 the situation across Europe was not improving and theUK’s performance was suffering too.  To provide an illustration; when I joined the company the average price we were achieving in the UK for a single fluorescent tube (we sold millions of these non-differentiated products) was in excess of one pound.  Ten years later I was averaging just £0.32 for each as a result of the extreme competition between the small number of manufacturers.  With common (and limited) suppliers of glass, basic metal, rare phosphors and gases across the industry, almost the only way you could drive the cost down was by finding ways to increase the speed of the automated production lines.  The result of this was that every hour you produced more product at a theoretically lower price but only if the additional production could be sold.  Unfortunately, the total market wasn’t increasing fast enough to counter the falling prices and the increased output, so the vicious cycle went on.  Efforts had shifted in my time with the business towards development of a stream of new products from all of the major manufacturers (driven also by the goal of energy savings) but the vicious cycle of downward pricing soon took over as they became commodities.  I kept a graph in my office that plotted the average price per unit sold against market share.  When I dropped the price our share rose and when I raised price it fell.  It was a perfect correlation.  I was getting beaten up on a regular basis for not raising my price in theUK.  But when I did, unit volumes dropped and the factories became starved of demand.

The business was already global with 90% of our UK production exported to the rest of the world and 85% of the ranges sold in the UK being imported from our overseas factories.  Whilst our UK production facilities were new and efficient, many of the overseas facilities we had to rely upon were old, unproductive and located in European countries with impossible labour laws and highly difficult unions.  Slowly and inexorably, our profits in the UK declined as I had to suffer far higher prices on our imports when the pound declined.  I found myself under increasing attack for failing to overcome this structural problem.  It seemed that little was being done at a European level to really counter this critical issue.  Despite my resistance to product strategies that made no sense, I always worked extremely closely with the European management and had very good relationships.  The only exceptions were a small number of Gregg’s direct team who seemed to follow his style of never discussing but only attacking.

One decision from head office illustrates the poor decision making going on at the time (exacerbated by the law of unintended consequences).  During this period of falling margins across Europe, a decision was announced that the transfer prices from our Belgium factory were to rise significantly for the next year onwards.  I never got to the bottom of what I felt were the underlying reasons for this move but I suspected it was simply to bolster manufacturing profits.  It was announced at the time that no country would be penalised for this increase as the effect would be taken into account in the budgeting process (in other words the lower margins that flowed would be ‘forgiven’ for that year).  However, the ‘forgiveness’ disappeared over time and countries, still under margin pressure, inevitably started to de-emphasise this particular product line.  In this way countries improved their margin percentages.  The Belgium factory certainly gained higher unit margins as a result but on declining volumes.  Some years later I managed to get to the bottom of this situation (as we shall see) and the reality was even more astounding.

The issue of pricing became more and more to the fore at every meeting.  Coming under attack yet again at one of the large European meetings, I put up a slide of my graph, which plotted market share against price.  I made the comment that one could either have increased market share and volume or increased prices and lower share and volumes.  Given the dynamics of the market nothing else was possible with non-differentiated commodity products.  Gregg responded with one of his usual eruptions saying that other countries were making more effort and running better marketing programmes (Sal, my Italian counterpart, had just given details of his latest sophisticated promotion – offering T shirts and beach towels).  Finally, he said he would close the UK operation if I couldn’t improve performance.  Throwing caution to the wind I turned to Swaanen, who was VP Manufacturing and the most influential of Gregg’s team, and asked him if he could afford to lose the production volume from the second largest market we had in Europe, “Of course not!” he growled back.  I turned to Gregg and asked him what he wanted to do.  I may have won that battle but I knew by then that I wasn’t winning the war.

I was becoming rapidly more disillusioned.  The company had spent a fortune on a business education for me that had been simply superb, providing cutting edge theory and technique, direct from the mouths of some of the best academic brains across the US.  The problem was that our senior management in Europe, whilst happy to tick boxes that said that bright people were getting the right training, simply didn’t understand what we were being taught.  Worse, they didn’t wish to know what we had been taught and constantly demonstrated that they wished to keep doing what they had always done (probably in the hope that it might yet produce a different result).  It was clear that there was a profound lack of real business acumen and strategic skill in our European headquarters.  My cynicism grew.

Some months later I received the news that the US company president was to make a UK visit.  I was required to meet him in London and make a presentation on the UK business.  Realising that I was probably being set up for a good kicking, I set about a robust analysis of the situation facing the entire light source industry.  A few years earlier Michael Porter, a Harvard professor, had published the first of a number of what became seminal works on strategy.  As a result of my US business education I was very familiar with Porter’s theories and decided to use these to analyse our industry.  What emerged was an indisputable picture of a global industry that was doomed to low profitability unless (and until) savage consolidation and production rationalisation took place.  Unless our ultimate parent company (now Verizon) was prepared to invest heavily in acquisition and new and fewer production facilities across the globe, we would continue to suffer declining margins.

On the day of my meeting the US president sat quietly, paid close attention and asked pertinent questions as my presentation unfolded.  Something had either prevented Gregg’s appearance or, deciding that he would leave me to my own downfall, had sent Louis our VP of marketing in his place.  Louis turned puce and kept attempting to move me onto what I was going to do to meet the UK budget that year.  At the end of the meeting, the big man thanked me warmly for the presentation and asked me to send him my full analysis.  My name inEurope was lower than low from then on and I subsequently learnt that I was being accused of ‘intellectual arrogance’ and ‘executive burnout’.

Did I know what I was talking about?  Had I been doing all that could be done?  I hold to this day, that by this stage, I had a better grasp of the market dynamics across Europe than anyone else.  Either that was the case or, much worse, others knew and wished to ignore the situation long enough to get their retirement package.  I had also succeeded in substantial market share growth and repositioned the image of the UK company.  Nevertheless, I had a weak spot and events found me out.  I had taken my eye off an important ball and it was to cost me dearly.

Image courtesy of Pacific Exchange Rate Service (© 2012 by Prof. Werner Antweiler,University of British Columbia,Vancouver BC,Canada.)

The business of life (Chapter 13 – hubris strikes)

The once enjoyable relationship I once had with Akai colleagues in Japan as their distributor, was changing quickly into a nightmare now I had joined the new business in the UK as an employee.  Constant requests for information and action came fromTokyo at all hours and I learnt quickly that the Japanese would simply not accept the failure of any plan or compliance with mere instruction.  Decisions seemed to take forever and I found that the much vaunted system of collective decision making in Japanese companies wasn’t because it was more efficient, or more motivational, or whatever the text books were claiming; it was simply to avoid personal responsibility if things went wrong. Seppuku may have been no longer practiced in its literal form in 1980 but it certainly lived on in a metaphorical sense.

The promised further injection of capital never materialised and more than once I was required to present a re-working of the financial budget at a week’s notice or less and to jump on a plane toTokyo to present it.  The journey to the bank also became a well trodden path delivering regular cashflow projecions.  On one occasion when I met Yokose at Heathrow one Saturday afternoon for yet another trip he looked like death.  It transpired that he had last slept on Wednesday evening and had continued to work through the next two nights merely allowing himself a change into pyjamas and slippers.  He worked all through the flights toTokyo and again through Sunday night following the inevitable initial rejection of our latest business plan.  Witnessing this I began to feel increasingly uneasy over my decision to join a company with such an alien (and to me inhuman) culture.

I was beginning to become selfish when it came to working beyond 18 hour days and the stress was rising.  One evening arriving home yet again extremely late and completely exhausted, my phone rang and I answered it to find  it was one of the Japanese on the phone demanding I return to the office to deal with something minor.  “It is your duty!” I was informed when I suggested that it was not an emergency. I snapped, said something inappropriate and slammed the phone down. Grabbing a bottle of Scotch, I slumped in a chair and knocked back a stiff shot.  The next thing I remember was finding myself on the floor clutching my stomach feeling like I had been stabbed through.  Although not diagnosed precisely as such at the time, subsequent events led me to realise that this was the start of stomach ulcers.  My doctor gave me stern instructions to take three weeks off, stay away from alcohol and to take things easier in future.

Gordon was supportive but more than a little surprised when I declined a drink with the lunch we had together just before I returned to work.  The pressure from Tokyo to increase sales was growing weekly.  Our results were still improving strongly (and were on course for a 50% total increase since the new company started and would be trending steeply upwards at a running rate of £13m p.a.) but this was still not enough to satisfy our masters.  The problem for us in theUK was not profit but cash and they would not accept that the relentless pressure to increase sales was fuelling a demand for working capital we couldn’t finance from our own resources. Tokyo management had reneged on its promise of further cash injections and our bank was getting more and more nervous about increasing our facilities.

My large marketing budget soon came under attack and I fought back strongly with all the logic and all the evidence I had that our strategy was working.  I put forward the most robust evidence of the brand share increase we were gaining (especially against arch rival Pioneer, which should have been greatly satisfying to Akai) and the danger of reducing momentum.  I felt let down; Akai had agreed my business plans, promised more capital support and we had delivered everything and more that been promised in terms of results.  Our marketing mix was working and I wasn’t about to roll over and see ourUK position worsen.  My natural inclination to meet opposition head on came to the fore and I continued to resist.  Sorely in need of a break (and heeding the warnings about my health), I departed with the family for a glorious holiday touring California.

Returning refreshed I found that the situation had worsened, finding Andy planning a frankly amateurish sales promotion campaign, which he had not discussed with me (and was now trying to avoid doing).  Yokose started in on me immediately, telling me that Andy had assured him that this promotion would compensate for cancelling the majority of our communications programme. I responded that the problem wasn’t one of our dealer network not buying enough, it was of chronic under-capitalisation.  At a time of intense competitor activity to establish leadership in the new VHS and racked HiFi systems, I reasoned that we would lose all of the ground we had won.  Worse, we would find it almost impossible to recover again.  Yokose simply would not listen and fell back on that logic resistant mantra that seem to be drilled into Japanese people from birth; “We have to manage somehow.”  I realised further discussion with him was impossible and beat a retreat thinking that perhaps I could yet convince him.

The following week I was working in my office one afternoon when I heard three hefty thumps on the dividing wall between my office and Gordon’s (his usual manner of attracting my attention).  I smiled to myself and walked into his office.  By then we had an easy going relationship (except when he was ‘in his cups’ after one of his ‘networking’ lunches) and I expected he wanted to chat.  “Boy, you’ve got a problem with the Japanese.” he said immediately and thrust a plain white envelope across the desk at me.  I went cold realising what was in the envelope.  “If this is what I think it is, is the situation negotiable?” I asked, looking him in the eye.  “I’m afraid not,” was the response, “but you’ll see it’s generous and, between you and I, I’m happy to tell anyone who asks that you resigned, needing a change or whatever you decide to say, and are still working for us on a contract basis.”

I hadn’t exactly put the sword in my own hands but the effect was the same.  I had been fired.

 

Shouldn’t we care more for our elders?

Yet again we have more terrible news of the failings in our much vaunted National Health Service.  The Care Quality Commission today reports on its findings into inspections at 100 acute NHS hospitals inEnglandand announces that fully 20% were not delivering care that met the standards the law says people should expect in terms of dignity and nutrition.  One in five hospitals failing to meet legal requirements in these basic areas despite the additional billions pumped into them over the last decade or so.  How can we spend so much and get so little in return? Why does such a large section of the caring profession get it so wrong?

Image courtesy of Nursing Times

As I’ve blogged before (‘No way to run a health service’ June 2011) I’ve had both first hand experience of our NHS, been married to a health professional and seen some of the failings at first hand. Now don’t get me wrong if you think that I’m someone who doesn’t believe in our health service; it has saved my life on two occasions. But that doesn’t mean that it is without blemish. Just consider, it employs c.1.5m people and, sure, not all of these are going to be up to scratch in the care stakes. But 20% of hospital failing to meet legal requirements? A sad but true story first.

A few years back my late mother was admitted into one of the major London teaching hospitals as she had suffered a fall. I travelled the long journey down to visit as soon as I got the news and what I found shocked me to the core. Mum was groaning in apparent and considerable agony some 20 feet only and in full sight of the nurses’ station where 7 or 8 nurses and doctors were doing various things (including sharing jokes). It transpired that mum had received no assistance to relieve herself since being admitted earlier the day before and clearly had been ignored. Any ‘profession’ that can permit this level of indignity to be visited on another human being has serious failings.

The National Audit Office in a separate report today finds that 80% of hospitals were in some financial difficulties and two thirds had weak leadership and management delivered poor quality care to patients. According to The Kings Fund, of the funds invested in the NHS under Labour somewhere over a third went on increased salaries “and the returns, in terms of better care, higher productivity are somewhat elusive so far”. So, despite an increase from £52.9bn in 1998 to £118.3bn in 2010, nothing much to show in efficiency gains. Now, if as a chief executive of a public or private company I had gone to shareholders and asked for this sort of percentage increase and then said I had nothing very much to show for it, what do you think my survival chances would be? Especially if I had incurred a far vaster liability in terms of ‘off balance sheet’ (in the form of PFI) commitments for years to come

Now to be fair, the Government had to pay for the effects of the EU working time directive for junior doctors and for sharply increased costs of criminal negligence claims. But who agreed to the former and who created the environment for the latter? Sure, the cost of drugs rises inexorably but the waste in the system is incredible. There is almost no other subject that gets politicians and the public rushing to their respective corners as the NHS. It’s curious but mention profit in connection with healthcare and it’s battle stations at once. The fact that a private company might be efficient enough to make a profit is anathema to the likes of the Guardian readers. But mention that an equal or far greater amount is being simply wasted and you get a shrug or, at best, hands wrung, eyes averted.

The adverse effects of shifting demographics have been known to governments for over 25 years and caring for our elderly is going to take more than a few platitudes. Democracy has failed us because, frankly, the political elite haven’t had the guts to tackle the issue of funding healthcare in a sustainable manner. Does it matter if the care my mother (or yours) receives or the dignity she is afforded came from a profit making organisation that didn’t waste the funds we invest from our taxes? The health professionals may be capable of delivering care but don’t kill them with targets. And just because we are talking of professions don’t fall into the trap of assuming they know how to lead a multifunctional team and manage vast budgets.

The NHS was, in fact, an all party wartime coalition effort (despite the fact it was a labour government that was in power to introduce it in 1948). We are now in the midst of a crisis in healthcare that has been decades in the making and it will take a great deal of time to come up with a sustainable solution. We need, somehow, to take control of the means of a solution out of the party political system.

Don’t we owe it to our elders to spend their final years with dignity? They brought us into this world; shouldn’t we try to make their passing as comfortable as we can?

The business of passion

It seems that in business today passion is the answer, whatever the question happens to be.  Wherever I happen to look, whatever passes for business reading, whenever advice is given, passion seems to find its way in there somewhere.  Now I’m not a complete spoilsport but I think it has gone a little way from the original business linkage that got this passion thing started.   It might have seemed a good idea for the innovators and the early-adopters to sprinkle their scribblings and their CVs with the ‘P’ word but when one comes across people claiming to be passionate about selling industrial drain cleaner we should clearly recognise it’s gone too far and it’s time to move on.

Image courtesy of Layoutsparks.com

My Oxford dictionary defines passion as “Ardent love or affection, intense sexual love’ and more in a similar vein, ignoring for the purposes of this chain of thought those meanings of a more spiritual nature (although there does seem to be a concerted and increasing effort from some quarters to infiltrate business with matters of faith and spirituality – but perhaps that’s best left for another day).  If I’m generous and allowing for the tendency towards inflation in language, even as the monetary equivalent eats away at our incomes, then perhaps, what is meant is what used to pass for enthusiasm or commitment?  OK, I’ll admit that having ‘commitment’ to or ‘enthusiasm’ for drain cleaner might seem a little prosaic but isn’t it safer than inferring sexual or theistic tendencies in the workplace?

 Passion implies a surfeit of emotion and to be quite honest I’ve never found emotion to be a good thing either in the board room or in business generally (other than in exceptional circumstances and those usually from the leader).  Yes, an understanding of the role of emotion when positioning our brand of drain cleaner in the minds of the nation’s housewifes for the purposes of our next advertising campaign might well be useful.  But as the sole stratagem for building and running a business?  I think not.

So, unless you happen to be charged with finding candidates for the Italian or French government (or certain international financial organisations) I suggest it would be entirely appropriate to stick to more traditional measures when assessing new company recruits or promotion candidates.  For me, I’ve always found that the right combination of qualifications, experience, behavioural characteristics, competencies and plain vanilla commitment and motivation seem to get the job done nicely.

Or have I led an unduly sheltered life?

The 397 steps to business success

  Gotcha! Since starting this blog I’ve noticed that there are a large number of my colleagues in the blogosphere who are following the received wisdom that to attract attention you have to offer a list of rules, tips, hints or habits that you must follow to succeed in business. You’ve read ‘em, haven’t you?  The five easy steps that will make you a million in your first year.  The seven top habits of really successful business people.   The nine most effective ways to make your team excel.  Unfortunately what usually follows are the facile homilies.  And when you wander into the airport bookstall, there they are again, row after row of the latest publications offering hot tips from some of the most well known business people on earth offering you success in 5 minutes.  Seductive, aren’t they? Painting by numbers for instant success.

Now I’m not saying that these various publications have no merit. A great many are from good business people who have made many more millions than yours truly.  However, I’m going to let you into a secret, one that none of these authors are going to tell you and it’s one that certainly won’t sell a load of glossy paperbacks.  It’s one that a lifetime in business has taught me.  It’s bloody hard work becoming a success and it’s even harder staying one!

Beware the airport bookstall – there is rarely a one minute answer to anything.  Business requires a whole range of competences and knowledge most of which can be learnt but all must be practiced.  I would like to share with you two books that have taught me a great deal more than any other.  The first is ‘Marketing Management’ by Philip Kotler and Kevin Keller.  Now in its 14th edition this is a veritable encyclopaedia of the marketing art covering everything you need to know in great detail.  Yes, it’s expensive but it’s the best money you’ll ever spend.  The other book is Michael Porter’s 1980 seminal work ‘Competitive Strategy’.  If you wish to understand how to analyse markets and competition and know why some are more profitable than others, this is the book. Neither of these books could ever be described as a quick read or offering quick tips; they are packed with what you need to really understand of the art of marketing and strategy but you will have to work at them and apply what you learn.

Never stop learning; you will never know it all but each day you can add a little more.  Management is not a science and there is no formula that will guarantee success.  However, there is so much professional knowledge you can, and should, acquire.  Management technique alone will never give you the answer but it is capable of putting all of the information you need in a format that allows you to make the best decision you can.  And that’s what being professional is all about, isn’t it?

So, are there 397 habits, tips or techniques you should learn?  Maybe more, maybe less; but who’s counting?  If you don’t enjoy learning and you have to ask the question, don’t give up the day job.  Yes, business is hard work with no easy answers but, boy, is it fun.

* Image courtesy of video converter factory