Business feeds Amber Rudd’s ‘money tree’

July 19, 2017 2:01 pm
View Article

Just over a year ago the business community of the United Kingdom (UK) was coming to terms with the quite seismic decision of the British to leave the European Union (EU). The majority of the business community wanted to remain in the Union, the “devil you know” seemingly better than the one you don’t.

It is also true that big business had a stronger penchant for staying in than many smaller firms, companies that feel the sharp end of Bruxelles bureaucracy without the administrative central resources of a large corporation to monitor and manage the regulatory burden; that said, much regulation comes from Whitehall that does not seem to garner the same interest from the Daily Mail; employment, planning and the thorny issue of relative enforcement.

The result of the EU Referendum, in the main, was accepted by business – the City, where the UK is too dependent, car manufacturers and big Pharma continued to protest – and the mantra after the big vote was, ‘well we just have to get on with it’. And so we did, H2 CY2016 was much, much stronger from an economic perspective than any City or Treasury economist forecast; the Governor of the Bank of England appearing especially out of touch with his emergency rate cut whilst the Evening Standard’s current editor was simply foolish with his scaremongering for an emergency budget.

What was also clear last year is that a lot of business folks went away and dwelt upon what the Referendum result actually meant for them. In doing so, tired of the political hum drum they went away on mass, most to the EU continent as it happens, and after some sleep, a few sangria and a couple of good books, started to plan the September push. Such rest was necessary and Briton’s business folks did the country proud in the following months.

 

Sadly, the summer of 2017 has the same feel. This is not an emotion that those same business folks – who take risks, invest, employ and generate wealth – wanted to repeat one year on from the UK-EU Referendum. However, Theresa May’s calamitous election campaign has left the UK a bit of a laughing stock around the world, from a political perspective at least, emboldened and united the EU with whom we have to negotiate an exit and so created another round of uncertainty, which just about all businesses, apart from flight of foot capital rich and/or speculators, abhor.

The damaged goods Prime Minister, her dysfunctional party when it comes to Europe, the minority government and the fully costed near lunatics that are the Labour Party represent a disaster of a political economy for British business. For anyone who is in any doubt about the misuse of the term “fully costed” read the Institute of Fiscal Studies paper on John McDonnell’s plans, noting that the bloke who was probably most relieved that Labour did not win the General Election was probably John McDonnell as he would have had a sterling collapse and capital controls to impose if he was Chancellor.

So, sadly, once again hard working entrepreneurs and industrialists will need time to reflect on what this all means and how to react this time around. I have to say that this time around there is more need to worry than was the case with the EU Referendum where for one reason and another we did think that the UK would dust itself down. Now we watch carefully as to how the Brexit negotiations actually go – don’t be too swayed by the propaganda on each side, make sure one looks at the detail where it effects your firm – and also business confidence and expectations.

We shall be mightily relieved if managers come back from holiday stoical again, believing that the pint is more than half full rather than empty. There is a lot still to go for, for British firms. The devaluation of sterling does indeed pose import substitution opportunities. That devaluation should also stimulate structural exporting, as opposed to just trading at the margins. What is also clear too is that we will have to trade beyond the EU at a strategic level, for which business organisations – the bodies firms pay subs too – need to be on their mettle.

I have also argued elsewhere that in an economy where labour may be re-priced and in short supply – UK unemployment in June 2017 was as low as it was in 1975 – people productivity, overall cost control – nay leadership – and tight cash management need particular attention strategically going forward. Now, I am not going to insult the management priorities of business folks but the wider context does underscore these themes to my mind.

In this respect, Coriolis is an organisation that I feel is particularly well placed to add value at the coal face, where it matters for British firms. More broadly though we must, whatever our industry, be noisy to fight for entrepreneurs’ interests in the face of an intellectually challenged Government. In a previous piece I asked for a manifesto for business. Whatever your view, make sure business’ interests are heard, because it is business that keeps the lights on, it is business that pays the bills and it is business that feeds Amber Rudd’s ‘money tree’.

Dr Clive Black
Advisor to Coriolis

What about a manifesto for the engine room?

June 6, 2017 1:08 pm
View Article

I guess that in the end we get the politics and the politicians that we deserve. However, it is hard, post the Scottish Referendum and the UK-EU Referendum, never mind Trump and Macron vs., Le Pen, not to come close to despair amidst the current UK General Election campaign. Indeed, for entrepreneurs and business folks, it is hard not to feel quite fatalistic about things political.

Few politicians and their associated chattering political classes, which embraces swathes of the media of course, seem to have much awareness or interest in the engine room of the UK, the organisations that employ people day in, day out, pay tax, invest in the future and so create GDP and wealth. That engine room is, of course, business.

 

In midst of such seismic events and looking at the “basket” of current leaders it is indeed hard, not to fall back on a sense of dark humour:

An incumbent Prime Minister that is seemingly clutching defeat from the jaws of victory with a disastrous and ill-thought out campaign that does not exactly encourage the business community to think with confidence that the UK is a place to create, invest and commit.

A Leader of the Opposition that redefines idealism, has a very questionable past albeit what does that matter these days, and believes that money does indeed grow on trees; I do wonder if he has any familiarity with the power of currency markets and capital flows?

A leader of the Liberal Democrats who’s strongest rant to date has been about the Prime Minister’s no show at a far from compelling gathering in Cambridge, that Nicola Sturgeon could not be arsed turning up to either but Jeremy Corbyn had nothing else to do seemingly and so rocked up.

A leader of the Green Party, who appears well meaning it should be said but one senses would struggle to run the bath in 10 Downing Street never mind the Government.

I rest my case your honour…

So, taking a few glasses of Bushmills malt in to help clear the mind, what could business reasonably ask for from its politicians ahead of this Election, noting the small matter of pending exit from the EU? Well, whilst I am no Socrates or Plato, how would the following sound?

The establishment of a clear priority and commitment to provide the most stable and business friendly environment; one where business fully participates understanding its responsibilities as well as seeking to fulfil opportunities.

A commitment to an open and flexible market economy that seeks to encourage, nurture and support innovation and entrepreneurship for all; clearly in this respect we need to trade with the whole world.

A clear priority to raise education and training standards so that the UK develops the public and private sector human capital that it needs to be competitive in the future; within this important arena, for too long a political football, a structural priority should be given to mathematics, science & engineering, the digital universe and creativity.

Clear understanding, reassurance and effective processes to ensure that the appropriate labour force is available to business in the short and long-term; repeating the need for business to nurture, develop and treat with respect its human capital.

New structures and resources to link the UK’s world-class universities to business nationwide, a central part of what should be a wider and larger plan to structurally adjust levels of innovation in product and process.

Confidence building measures to acknowledge the need plus the will to improve Britain’s economic infrastructure; global air links, internal rail and road development, the digital air space (objectivity, capability & capacity) and necessary long-term energy needs. The latter should embrace innovation in the potential from the low carbon and renewable economy.

Liam Byrne’s note, Labour 2010; “I’m afraid there is no money”.

Prioritise confidence measures that responsible risk-takers can reasonably expect to benefit from their hard work and enterprise alongside the right checks & balances through the welfare state and tax system to work toward a more cohesive, wealthier and ultimately happier society.

A thriving business community that helps to fund world-class public services, services that in turn help to support and provide the context for business to press on.

A clear message to and resourcing for the UK business community about the opportunity and importance of both strategic import substitution and export activity to see through the necessary potential for growing competitiveness and participation in the global economy.

In a re-balancing economy, a City of London brings all of its global capability and competitiveness to work more effectively for UK business and not as a self-perpetuating club devoid from the responsibilities and accountabilities.

 

 

In uncertain times business will need to be on its mettle. No one knows how the Brexit negotiations are going to go nor whether the world economy will recover and be more inflationary or contract into a deflationary grind. Globalisation has brought many benefits but also challenges, which have not been identified or carefully enough managed, reflected in the rise of the discontented. However, the UK must bring forward a balanced economic model that allows our companies to be world class players.

Competitiveness, innovation and entrepreneurship are the mantras that Coriolis seeks to nurture, support and realise; mantras that the UK will need in bucket loads to withstand forthcoming headwinds and, if the rabid Brexiteers are correct, to see-through the world of opportunity that is seemingly coming our way.

Let’s hope that after the 8th June 2017 we can perhaps focus more readily on the day job without increasingly shallow politics colouring our business lives. Let’s also hope that our wholly uninspiring political leaders remember who keeps their lights on.

Dr Clive Black
Advisor to Coriolis Consulting

June 2017.

Problem Solving: Sketching it makes Sense

May 16, 2017 9:07 am
View Article

We only retain 7% of what we hear and around 10% of what we read, so when it comes to the other 80% or so we need to make best use of it! Visual aids and learning by teaching someone what you have learned make up a big chunk of the remainder. It’s worth considering this when it comes to problem solving. By engaging your team in utilising this approach you can greatly increase the holistic understanding of the problem, find the root cause or failure mode, and find the best solution to solve it.

It’s very easy today to hold all your tools and information electronically. This ultimately makes your management of data easier, but you can bring the risk of locking the information away and not truly gaining its full benefit.

While having other media such as schematics, user manuals and SCADA screens is extremely helpful, getting the team to pull together a visual of the problem with pen and paper and explaining to each other their knowledge and experiences benefits the situation in several ways:

Understand the working principle. No matter the size of the team carrying out the activity, it is key that they first understand the nature of the problem. Each individual may have different skill sets and levels of knowledge, so a sketch of the scope and what the equipment does will align understanding and focus the problem solving.

Identify wear points. Going through the drawing, identifying the touch points and flow of the product through the machine, forces exerted during the process and parts designed to naturally wear will help begin to narrow the focus to the root of the problem. This can also work when wanting to define standard settings or listing bill of materials for a sub assembly or area. Using this approach can really bring the machine, sub assembly of a piece of equipment or process to life.

Share knowledge through different experience. Whether it be operations, maintenance, hygiene or quality, each will bring a key perspective to the problem, and therefore finding the solution. For example, there could be a design flaw or past modification which operationally looks fine, and can even be accessed for maintenance, but cannot be properly cleaned. This could give key insights into unlocking perspectives normally missed, or past redesigns that have not been fully documented.

Finally, it doesn’t have to be a work of art… Although some of us may aspire to be the next Banksy, your drawings don’t need to be perfect. Basic diagrams will give enough fuel to fire the discussion, unlock shared learning, and provide a ‘live’ visual aid. Let everyone have a go with the pen to explain their perspective of the problem.

In summary, problem solving is essential in driving behavioural change and improving performance. Utilise a cross-functional collaborative approach by sketching the working principle and learning from the team to bring it to life.

 

Written by Jeff Wilkinson, Coriolis Ltd

The Tactical Engagement Project

May 2, 2017 2:48 pm
View Article

I like a good military adage, as one might expect after 30 years of Army service. A wry smile often creeps across my face when I hear talk of Mission Success and Taking the fight to the enemy in business. However, there are often parallels in how missions, or projects in this case, are approached.

Coriolis recently supported a major CAPEX project in which the initial engagement was a tactical one. We reacted quickly to meet a client capability requirement in a major project that was in dire need of support. The deployment time was hasty with little time for detailed planning.  The team were assembled quickly, using existing resources and deployed in a tactical role with a brief to support and drive the project to completion.

It is easy in a situation like this to assume no planning is required. The framework of the project and the group dynamic is largely set. It would be easy to simply slip into the existing team and go with the flow without disturbing the group dynamic. However, this was a tactical engagement which came about as the result of a project which was starting to show potential for failure.

A few simple tools and techniques allowed the Coriolis team to have immediate impact.

FIND (locate) the problem: Where is it taking place and in what environment am I to operate? Understand who is involved and what part they play in the project. Observe group dynamics between the stakeholders; it is useful in determining whether the issue is with relationships.

FIX (pin down) the problem: I use a simple technique. Measure each task in terms of Importance, Urgency and Growth. Acknowledge those that are important and those that have growth and start planning. Time is often at a premium but this function will lead to a fuller operational level of engagement.

STRIKE: Quick wins often turn the situation quickly. In a project such as this, the more urgent tasks need to be addressed to maintain momentum. Achieve them and then move on to deal with complexity.

EXPLOIT: All teams go through the Bruce Tucker team cycle with both internal and external team members.  It is necessary and serves to address group dynamics. In particular, I found the storming element essential. It is a struggling project and key players within the existing team have played their part in that failure for whatever reason. Strong leadership supported by good people and communication skills are key in this phase; there’s no time for egos. Start more detailed planning to build on success. Use this foothold to buy more time and secure more resources. Push out from the initial scope and react quickly to change.

Having started this project as a reinforcement, the Coriolis Team went on to become a major part of the solution, taking a leading role in both the management and execution of the project. We gained valuable experience, enhanced our credibility, and were able to build upon success, thus moving to a longer term operational and strategic level relationship with our clients.

“While it may seem small, the ripple effects of small things is extraordinary” Matt Bevin

 

Written by Jim Richardson, Coriolis Ltd

Article by Clive Black: Coriolis’ growing relevance in the deeply foggy political UK economy

May 2, 2017 12:13 pm
View Article

Businesses continually try to explain to politicians that the best thing they can do to create conditions to thrive is deliver economic stability. Such stability rarely comes by chance, reflecting as it does the combination of a sound macro-economic position, calm times, good governance, and a society comfortable in its own skin.

Politicians of course, are both a symptom and outcome of their own policies and the way that they listen to, reflect upon,  engage with, and represent their constituents. For some years now, the listening part has been a serial weakness of the political classes. This has allowed an increasingly divided Britain to emerge where, in the end, frustrated elements of society across these Isles have bitten back. The outcome is anything but clear and stable.

An example of politics and business overlapping is immigration; a delicate subject that requires a calm, balanced and accurate assessment of matters. Arguably, liberal policies under Blair served to keep the supply of labour high, giving many industries an easily accessible pool of highly motivated people helping to deliver sound economic growth in the UK for many years.

Indeed, that migrant workforce, largely from the EU, has often covered the fundamental cracks and deficiencies of the UK’s indigenous labour market. An inconsistent education and training system as well as an unbalanced relationship between welfare benefits and low paid work has encouraged a work shy and unskilled community.

Combined, these forces have also served to deteriorate the UK’s labour productivity, albeit many firms have been very rational in deferring capital expenditure on machinery and automation over manual processes from a profitability perspective. This is something which is too often overlooked by politicians and City economists, who collectively produce very little for the economy themselves.

David Smith, sensible economic commentator at The Sunday Times, recently compared France’s 35-hour week and restrictive labour laws to the UK’s more flexible labour process. Unemployment in France is more than 10% compared to the UK which is less than 5%. Labour productivity is much higher in France than in the UK,  perhaps because businesses automate to avoid employing people. So what do society, politicians and business folks prefer; high productivity or high employment?

Over-liberal immigration has, it turns out, revolutionised British politics. It is a prime factor in why the UK is leaving the EU. The leaving process is very difficult to predict; early signs suggest the EU is unhappy with the UK despite a democratic decision, and is also keen to discourage other departures. As such the probability of no deal between the UK-EU cannot be dismissed, which will pose considerable challenges for business.

Labour processes will be a prime area of focus because British business, individually and collectively, will be competing on changing stages in future years. Some firms will see their domestic position strengthened with import substitution opportunities, others may be challenged by new international competitors from outside the EU that operate on very low cost bases. Some firms may see bridges raised in their EU markets whilst others may seize the pressure and opportunity to seek to access the wider world as the Leave proponents suggested. Many firms, of course, will experience all of the above.

Either way, change will require entrepreneurs to be on the ball to their cost bases and particularly the role of labour and automation to a degree perhaps not seen before; noting that it is clearly the case that most businesses understand their markets, customers and competitors in this respect.

As the UK leaves the EU, new competitors and markets may require additional insight. Assuming competitive products and services whilst another debate rolls on on the knowledge economy, innovation, research and development, UK business folk will need to be well connected to the virtues and vices of international trade. Being noisy to trade association and governments alike as to the supply-side policies that they need in order to meet the claims and calls of politicians that Brexit will be alright on the night.

At the moment, the political economy is distinctly foggy as the political classes awake from their deafness and start dealing with the more direct demands of their electorate; both sides of the Atlantic and the Channel intact too. For UK business, the Scottish Referendum, the EU Referendum, and now another UK General Election represent chaos not stability.

While predicting the future is less straightforward than ever, change and volatility also brings opportunity. If the UK will be facing the wider world more so than the EU in future, businesses need to be thinking about the threats they need to confound and the opportunities that they can seize upon for future profitability. At a strategic and operational level, Coriolis faces into the emerging environment effective, determined and aligned to the needs and wants of its client base because global markets require global perspectives and competitiveness.

Written by Dr. Clive Black, Advisor to Coriolis