Giving Your Business Foresight

Business

Planning For Growth In Turbulent Times

Our next event is being planned for May when John Barnett and Richard Lukey will examine the turbulent times in which we live and lead a discussion around the potential impact on plans to grow the business. It will be a breakfast meeting in rural North Yorkshire with more details to follow shortly.

After light refreshments, over ninety minutes we will look at the characteristics of businesses that seem resilient to all the turbulence around them and give you the opportunity to assess your business in the context of its ability to withstand the buffeting of today’s business environment. We’ll share a few ideas around innovation and look at the importance of taking the team with you in times of change. You’ll leave with a self assessment of your own business’s growth potential and thought provoking ideas to help develop new and existing revenue streams.

….and it won’t cost you a penny!

 

BHP merges with Sheffield practice GVT

John Warner – BHP Managing Partner

Accountancy firm Barber Harrison & Platt (BHP) has merged with Sheffield-based gvt Chartered Accountants.

This comes after the passing of Melanie Viner, gvt’s key relationship partner, following a battle with cancer. Viner joined gvt in 1991 and agreed to the completion of the merger shortly before she died in November. Her business partner Mark Goodband has retired from the partnership and after a short handover period will pursue other opportunities.

Gvt’s team will relocate from its Nether Edge office to BHP’s Rutland Park headquarters over the coming weeks.

John Warner, managing partner at BHP says: “It was hugely important to Melanie that both gvt’s team and the firm’s client base would continue to thrive after her death.gvt has always had a strong, well-established team and a reputation for offering a high standard of service to its clients, which fits with BHP’s culture and customer centric approach.

“As a result, we were delighted to agree to this merger proposal.”

He added: “We’re now looking forward to welcoming our new colleagues into our business and continuing to provide gvt’s clients with the level of service and expertise that they have come to expect, which will form an important part of Melanie’s legacy. We would also like to wish Mark all the very best for the future.”

Established in 1970, BHP now has more than 300 employees across five offices in Sheffield, Leeds, Cleckheaton, Chesterfield and York.

Karishma Patel

Insider Media – Yorkshire

3rd January 2017

How Brexit turned the UK German – NESTA 2017 Predictions

When Britain voted to leave the European Union, few people expected it would result in the UK becoming more like Germany, the country that runs the European show. But that’s what ended up happening, and it was in 2017 that the process really began.

Industrial strategy was the first step. Theresa May’s government decided that Britain’s ever-increasing trade deficit was a luxury that the UK, as an independent nation, could no longer afford. Already in 2016 Philip Hammond had begun to deviate from decades of Treasury orthodoxy by announcing £23 billion of investments into infrastructure, skills and research.

Over the course of 2017, the UK proved the Treasury view wrong by investing effectively in downstream R&D, identifying its real industrial strengths, focusing big government budgets like health and energy on innovation, and sowing the seeds for a revival of productive business growth. It had always been thought that these kind of policies wouldn’t work in Britain, but the bracing exigencies of Brexit inspired the government to have a go, and perhaps we should not have been surprised that they worked just as they had done in the past in places like America, Israel, Finland and, of course, Germany.

Westminster takes a back seat

The Teutonic shift was not just about economics. From a constitutional point of view, Britain also took a leaf out of Germany’s book. Scotland, unhappy at being ejected from the EU against its people’s will but still wary of the economic consequences of independence, leveraged its legal power over the Article 50 process to demand total devolution. Westminster’s power over English cities also receded: the gradual move to city-level government that began with the Northern Powerhouse gained momentum.

It quickly became clear that the patchwork of urban devolution created its own headaches: some cities had a devolved NHS, some had a city deal, some had a metro mayor. This was settled with a constitutional convention that established formal powers for city regions, codified Scotland’s devolution deal and did the same for Wales. The new deal was still a messy British compromise, but when one pundit heralded it as the Bundesrepublik of Great Britain, the name stuck.

For many of these cities, assertiveness paid off. Public investment was increasingly spread across the country, and places outside the South East saw the benefit. It turned out that a fair chunk of the North-South divide was not an inescapable fact of British economics, but the consequence of government after government favouring London.

Rebalancing worked, when we gave it a chance. London continued to be a global metropolis, but touch terms of trade with Europe and stricter migration rules dampened its swagger. But Britain’s other cities, buoyed up by transport investment and a greater focus on R&D outside the Golden Triangle, thrived. Rather than being a country where ambitious people went Dick Whittington-like to the capital, Britain began to feel a little more like a country with several buzzing cities – much as Germany itself has been.

Industrial revival

The timing turned out to be fortuitous. The freewheeling global capital markets that played such a big role in London’s growth in the 1990s and 2000s had already begun to silt up after the 2009 crisis, lowering productivity in the UK as a whole. The shifts in the international order that began in Donald Trump’s first presidential term made life as an international finance hub less commercially attractive.

But Britain’s increasingly impressive industrial revival, to many people’s surprise, filled this gap and then some, and in particular reversed Britain’s ever-worsening balance of trade. Export-led growth became one of the government’s proudest economic accomplishments. (It was considered tactless to point out that in the decades before Brexit, it too was traditionally more associated with Germany than with the UK.)

All this was, of course, helped by the international situation. The surprising – though in retrospect, grimly inevitable – election of Marine Le Pen as President of France threw the EU into confusion, and made it easier to conclude a long-lasting transitional trade agreement with what remained of the EU. Industry breathed a sigh of relief that the complex European supply chains they relied on could go on indefinitely, and the date that the transition would end was elegantly fudged by all concerned.

The British government embraced its liberal tradition as a way of attracting highly skilled migrants to keep the economy ticking, both from the increasingly illiberal United States and from France. Britain and Germany, having seemed on a collision course at the end of 2016, found increasing common ground, striking accords on joint defence, trade and diplomacy.

For many of the politicians who supported Brexit, it was never meant to be this way. Leaving the EU was going to unleash English laissez-faire, turning us into a sort of North Atlantic Hong Kong. (Some of the opponents of Brexit thought the same, and didn’t like the idea.) For some Brexiteers, Germany exemplified everything they loathed about the EU. But in the end, Brexit brought Britain closer to Germany, economically, politically and constitutionally, and Britain ended up the better for it. Who’d have guessed it?

Click here to see all NESTA’s predictions for 2017

A politically “incorrect”, scientifically “correct” perspective on why EU is struggling

The 28 governments of member states all have different opinions, interests and starting points. Not to forget a different culture and economic performance. Being from Europe does not really unite, as Europe is the world’s most complex region and “European citizenship” is yet to evolve. There are 300 million people on this continent therefore the ”united in diversity” is a very appropriate motto if it can be done.

And even as the news organisations agonise over the terminology – migrant or refugee – the distinctions on the ground are becoming pointless. Let me explain my perspective using the example of international mergers.

When you merge cultures well, value is created. When you don’t, value is destroyed.

When a merger or acquisition unexpectedly heads south (83% of them) the costs are painfully clear. Morale drops. Synergies fail to materialise. A likely cause of the trouble is culture clash. In a Bain survey of executives who have managed through mergers, that was the No. 1 reason for a deal’s failure to achieve the promised value. In a culture clash, the companies’ fundamental ways of working are so different and so easily misinterpreted that people feel frustrated and anxious, leading to demoralisation and defections. Productivity flags, and no one seems to know how to fix it.

Acquirers have well-developed tool-kits for managing the financial and operational aspects of a deal; they track results closely and they hold executives accountable for hitting their targets on schedule. Integrating two disparate cultures, by contrast, typically seems “soft”— both difficult to measure and almost impossible to manage directly. As a result, few organisations apply the same rigor to managing and steering cultural integration that they apply to a conventional, hard-dollar synergy. No one is on point; no one is accountable. Senior leaders can find themselves in the uncomfortable position of watching the problem unfold without knowing what to do about it.

Setting the cultural agenda necessarily involves hard choices. What is the culture you want to see emerge from the combination of the two organisations? An acquirer can assimilate the acquired company, or it can create a blend of cultures. Setting the agenda and diagnosing the gaps create the context for action.

The senior team then has two jobs:

  • One is to determine the critical gaps to close.
  • The second is to create a detailed picture of the future culture—a picture that moves beyond vision and values statements, and that is concrete enough to be executed by managers.

The key to a successful merger is determining which culture to merge into which. Co-creating a brand new culture from scratch is a lot of hard work with a relatively low probability of success.

Let’s get back to the original topic of the EU and refugees where the cultural gaps are extremely wide. When companies decide to merge, they have a clear vision, they prepare for the event, they both want it to happen as they know they could create more value. Yet, 83% of them fail.

What happened in the EU in the last 2 years is a bit different. There was no vision, no careful planning, no preparation and by now, there is less and less intention to make it happen due to some horrific events.

This is a case where best intention can backfire without understanding the situation. Trying to help people is great, I fully support it. Trying to accommodate them by denying basic security and cultural measures is one step too far and it will cause more problems.

Gradual intake combined with cultural awareness training, accountability, human rights with the same responsibility on both sides can work, but not the uncontrolled influx of people.

Money is not the main issue, that is like drinking water when you eat something hot and spicy. You think it helps, but it doesn’t. On the other hand, drinking milk will sort out the conflict.

The challenges of reaching full potential as a person, organisation or nation are very similar. They depend on the ability to recognise and understand that the way we think, feel and behave are shaped by our experiences and cultural background. 

Human societies today run on the accumulated beliefs of our forefathers. They were created long ago by people in very different settings than what we live in today. When we meet people from another cultural group, they act in accordance with their own models of reality. And that is the key…they are all models…they can be questioned, measured and improved once you know what to look for.

“With the best of intentions you toss me a lifeline. Failing to see how a piece of rope will do me any good, I ignore it and drown.”

― Richelle E. Goodrich

Life after annual appraisals

Performance Management is meant to improve your organisation’s output, but, more often than not, an ill-conceived and ill-suited process is put in place that does little more than waste time and demotivate staff.

For years, managers across the globe have sat down with their staff once a year to review their performance and give them a rating based on a set of arbitrary measures.

Jules Goddard, a London Business School lecturer who’s spent the past 30 years studying performance management systems, calls for a fundamental shift in thinking about the annual appraisal. Such conversations, he says, must take place with staff on the frontline, and become part of everyday life for employees.

“It is the measure of a high-performance team that individuals within it know that the quality of the output comes from the individual,” he says. “We need to be open about where we feel we did well, and not so well, otherwise we won’t learn. Feedback should be part of open, natural conversation as humans; unless appraisal is received when the relevant action is fresh in one’s mind, it is often not regarded as just or interesting.”

But even if the appraisal takes place at the right time with the right people, the wrong type of rating and assessment process will still hinder, rather than promote, better performance.

One of the big problems with appraisals is that they incentivise the safe approach to tackling a problem or project – nobody wants to take a risk (even if it’s calculated), and then be punished in their appraisal when it goes wrong.

Goddard argues that such systems “encourage people to play safe and be very careful with their reputation”. They also limit the creativity and innovation flowing through an organisation.

“The vast majority of performance appraisal systems encourage people to only talk when very sure of the answer, and stay overly in control,” Goddard adds. “And nothing useful happens in business when people are in control; all the exciting things in business are happening at the edge.”

Extract from “Performance management after the annual appraisal” by Matt Scott

Professional Manager Summer 2016

“Always on” culture key cause of poor UK productivity

Germany is one of the top in the world for productivity per capita -and its average hours are among the lowest

The Spring 2016 edition of Professional Manager (the journal of the Chartered Management Institute – CMI) looks at three potential remedies for low UK productivity. Of particular interest is the result of a survey they commissioned this year which indicates an “always on” culture equates to poor productivity.

Research from CMI has found that an “always on” work culture of ever-increasing hours and rocketing stress levels is one of the driving forces behind the UK’s poor productivity.

Of the 1,574 managers surveyed in the 2016 Quality of Working Life report, that vast majority (77%) work at least one additional hour each day, adding up to an extra 29 days over the course of a year, cancelling out managers’ annual leave entitlement (28 days on average).

And 10% of those surveyed said they work an extra three hours every day – the equivalent of working a 15-month year. In total, 92% of respondents said they work more than their contracted hour. Those working long hours are more than three times as likely to feel stressed than those working no additional hours.

CMI Companion Professor Sir Cary Cooper, a lead author of the CMI report, said the finding lead him to fear for the UK economy: “The long-hours culture is very worrying. We are seventh in the G7 and 17th in the G20 on productivity per capita. Germany is one of the top in the world for productivity per capita – and its average hours of work are 35, among the world’s lowest.”

CMI Chief Executive Ann Francke said that a lack of professional management is to blame for excess working, with “accidental managers” unequipped to balance the needs of their team with the needs of the organization.

“There’s nothing wrong with hard graft, but only if you’re well supported,” she said. “Accidental managers who lack the professional skills to deal with the causes of burnout are a threat to their health and others at work. Productivity will continue to suffer unless employers train managers to prevent overwork and strike a work-life balance.”

The Quality of Working Life survey also found that more open, empowering management styles are connected to lower levels of stress, higher job satisfaction and greater personal productivity. The worst management styles generate up to four times more stress than the best: as many as 28% of those whose line managers are secretive or suspicious report that they often feel stressed – compared with just 7% of those whose managers are empowering.

NW Bosses optimistic for long-term following Brexit

The majority of North West business leaders believe the Brexit decision in last month’s EU referendum will leave their companies worse off in 2016, according to new data.

Research from accountancy and business advisory firm HURST found that although the region’s bosses are gloomy about prospects for the rest of the year, they remain more optimistic about the vote outcome’s long-term impact. While 70% of the 2,700 managing directors and finance directors quizzed are expecting Britain’s decision to leave the EU to have a negative impact on their companies in the short term, nearly half (42%) said Brexit would have a positive effect in the next five years.

Tim Potter, chief executive of HURST, believes entrepreneurs are being pragmatic and seeking new opportunities in spite of the bleak short-term outlook.

He said: “As the trusted adviser to our clients, it is important that we listen to their concerns and offer support and guidance. We need to guard against being overly negative and to encourage our clients to look for ways to move their businesses forward despite the uncertainty.”

Key fears raised by respondents included the loss of access to European markets, skilled staff shortages and the impact the falling pound will have on the cost of imported goods and materials. Elsewhere, bosses feared economic uncertainty would dampen clients’ investment plans.

One company director commented: “Many of our customers have said they will be moving their head offices out of the UK and this is likely to seriously impact on our sales.”

Another respondent worried that Europeans may be reluctant to buy British goods as a matter of principle, while others expected to face a ‘brain drain’ or lowered merger and acquisition activity levels.

Bosses who felt Brexit will be good for their companies said exports are likely to be boosted by the removal of EU regulatory shackles and the falling pound. One said: “Although it will be a bumpy road, it will give us a chance to back ourselves and allow us to trade more freely in the global market.” In the wake of Brexit, others revealed plans to seek trade deals in China, the US and other markets outside the EU.

Speaking further, HURST boss Tim said: “There are, and always have been, significant opportunities for North West companies beyond the EU. We may start to see businesses look more seriously at these markets and we are well-placed to help them do that.”

Richard Bell, BDaily 8 July 2016

Making the connections

Grimme SV 260 Potato Harvester – Off-set trailed, 2-row, up to 7.5 t bunker, for varying harvesting conditions

Over the years since Altamira (Yorkshire) Ltd was formed in 2009 the business has made a great many connections with a wide variety of businesses. Every once in a while a meeting with one business triggers a thought about another one you met, perhaps many years ago, and possible synergies between the two businesses. Once such example occurred in late March 2016.

For the last three or four years we have been involved in the delivery of the onlincolnshire business support programme through our associate CDI Alliance Ltd. During the course of delivering the programme we met in Boston an IT Specialist – Joseph Daft – who went on to become Head of IT for UK and Ireland at Grimme in Swineshead. With over 150 types of machines, Grimme offer the most comprehensive and widest product range in the potato, beet and vegetable technology. In the vegetable technology Grimme and their subsidiary ASA-LIFT build a variety of innovative machinery around the harvest of onions, beetroot, carrots, leeks, chives, celery, fennel, peas, lettuce, etc.

Going back over 10 years Altamira’s MD Richard Lukey has worked with Epitomy Solutions and their MD Andrew Vernon in Sheffield. Epitomy was founded in 2000, bringing to market a solution based around the systematic databasing of complex mechanical parts combined with online ordering and parts identification. Over the years, they have expanded their initial automotive focus to encompass other industries where complex mechanical goods are provided to end users through a traditional tiered distribution network. Winning contracts with clients like E P Barrus, Hayter, Belle Engineering and others expanded their domain expertise into sectors from marine power and lawn and garden to light construction equipment, industrial engines, and more.

Whilst involved with Epitomy working on a market research project it became increasingly apparent that there were remarkable similarities between the work Joe does at Grimme and the Andrew does at Epitomy. So at the end of March 2016 a meeting was arranged at Grimme’s UK Head Office at Swineshead just off the A17 close to Boston in Lincolnshire. The meeting between Joe and Andrew has identified a number of mutually beneficial opportunities around information sharing and software development which could in time provide a useful collaborative platform for both businesses.

At Altamira we are always looking for opportunities to connect successful businesses who we know can reliably deliver a quality service competitively priced. It’s an added benefit of working with us on more traditional business support-type projects.

Does slick decision making build a strong economy?

An interesting interview with two young people, one supporting remaining in the EU, the other supporting the out campaign on “The World Tonight” on BBC R4 on 29 March. The podcast is on this link – drag to about 11:45mins to hear them.

The point well made is that there is no objective information from either side about the consequences of an in or an out vote. In reality there perhaps never will be the level of objectivity required as supporters of both campaigns use data to their own advantage irrespective of how independent the original research might have been. But is speculation about the future whatever the result truly the best way to make a decision.

We see, particularly in the technology sector that the best businesses are those that are agile and nimble, able to respond quickly to changes in their markets, disruptive technologies and new opportunities. Does the same not apply to governing a nation state? To be competitive does the UK need to be equally agile and nimble as it responds to global events? If so, it begs the question how agile and nimble is the EU when 28 leaders with differing agendas need to endorse any decision before it can go forward?

Two years ago when Greek debt threatened the existence of the euro as a credible international currency it proved almost impossible to get a consensus despite the obvious urgency of the situation. Nothing much changes two years later – the Syrian refugee crisis has again shown how moribund the EU’s decision making process is, there being no sign of a common position that all its 28 leaders can support.

So rather than talking “what-ifs” in terms of in or out of Europe we talked about the need for the UK to be more responsive, more dynamic and ahead of the game, can we achieve that by remaining in the EU as it is today? And will the EU ever be capable of making the necessary changes to deliver dynamism?

Why leaders need to be like gardeners

by Margaret Heffernan

Nobody can define leadership but everyone believes they know it when they see it. Around the world, business schools and corporations attempt to teach leadership (or at least to cash in on its importance). Yet the only serious leadership training in the UK is provided by the military: a full 40 weeks of intensive, on site, experiential training. What commercial business offers an equivalent?

It no longer surprises me that the military is ahead of business in this regard. The consequences of leadership failure in combat are immediate, tragic and hard to fudge. Far earlier than most companies, the military realised that obedience – the human tendency to equate doing a job with doing what you’re told – constituted a profound risk. It invests more in simulations to test decision-making under pressure.

So it’s no surprise to find the best metaphor for leadership coming from a military leader. General Stanley McChrystal told me that he equated it with gardening. Why? Because gardeners can’t do anything: they can’t make flowers bloom or plants grow. Their role is to create the conditions in which everything flourishes and achieves its best. Surrounded by insurgents and disrupters, being the smartest guy (or even gal) in the room isn’t an asset; it’s a bottleneck. True leaders know they only succeed when everyone succeeds. And McChrystal’s most used phrase? Thank you.

Margaret Heffernan was CEO of five businesses and her book A Bigger Prize is out now. Follow her on Twitter: @M_Heffernan 

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