JFDI (without the risk)

Posted on June 29, 2012     1 Comment

Being reserved is a Great British trait, but is it outdated? And did it ever have a place in business? There is a time and a place to be polite, to be modest, but sometimes you just need to grow a pair.

The Americans are great at this. The land of ‘Hell Yeah’ makes our land of ‘after you, I insist’ and ‘do you really think we ought’ look frankly, weak. The British will conversely see those people as brash, before sinking back into a meeting, to discuss a meeting, about a former meeting, no doubt leading to a committee, or two.

The British on the other hand are great at thinking, and planning, and consulting, and ensuring no-one gets offended….meanwhile, others just get on and do it. By the time us Brits finish our meetings, and our consultations, and committee hearings, and our assessment of the findings of those committee hearings, before seeking formal introductions through intermediaries…..etc… our contemporaries have Just F*****g Done It – and are too busy counting their rewards to notice how correctly and proper the British are conducting themselves.

Too many people spend their lives trying to work out what to do, rather than simply doing what they know. Never more true than in business. We want our leaders to lead. A hugely common theme on this blog is the importance of strong leadership and allowing these strong leaders to do their job. But leaders need conviction, they typically know what to do, their skill is in believing in their actions.

Look at the businesses that have thrived in the past 4 years, big and small. They have strength of leadership that has a defined, cohesive strategy and they have followed it. Flexibility and adaptability is important, responding to changes in internal and external conditions is a vital skill, but it boils down to the same thing – doing what you know, don’t let time kill the deal. JFDI.

This is never truer than with recruitment. We all know people are any businesses most important resource, and the attraction of key talent is the single biggest stated threat and inhibitor to growth – yet but businesses STILL postpone, delay and take so much time in recruiting this vital, key talent that they miss out, losing those key execs to their competitors.

However, if the macro-economic environment we have experienced for the past 4 years has taught us anything, it is to understand and be aware of risk. 1,000s of businesses that didn’t fully understand their own risk position are no longer with us – typically through an onerous debt profile or failing to understand or have the knowledge to deal with a sudden drop in demand/revenue.

Surely ‘JFDI’ and risk aversion are mutually exclusive?

Certainly, an over risk averse attitude amongst businesses has affected the recruitment industry. Some of the larger recruitment businesses have reported upto a 40% drop in both headcount and revenue. Even some smaller businesses have suffered dramatically, the assumption that they were immune from the economic environment proving unfounded – usually through the poor actions of their leaders ….and an unwillingness to evolve and/or innovate….

The Executive Search sector in particular hasn’t really seen any evolution in 25 years. We have a few less oak panelled offices and few less grey haired semi-retired industry ‘chaps’, but beyond that the premise of search hasn’t hugely changed (see The Dark Art of Head-Hunting for more). The credible firms still pull together target organisations, search for key individuals within those firms, approach, assess…and the rest is history.

Fee wise, ‘we’ still charge a third of a 30-35% fee up front, another third on short-listing and the final third on completion. The process takes on average 24 weeks, and as far as a risk profile is concerned, our ‘client’ doesn’t see any form of a result until he pays two-thirds of a sizable fee. Risk is heavily skewed client side. JFDI? Not as likely with such a one-sided risk approach, especially when the industry only delivers on around 70% of mandates.

So how do you innovate and respond to the modern world?

How about charging a third upfront, no third on shortlisting and the remainder on successful completion? How about also promising to deliver in SIX weeks, rather than 24 weeks? And how about underpinning that promise with a guarantee that if we don’t deliver in six weeks….we refund 100% of all monies paid, in cash? Totally removes risk from the client and allows them to ‘JFDI’…but crucially still offers the full search service and crucially the full search result. Welcome to the Contingent Retainer!

But there’s more….

As mentioned in The Dark Art of Head-Hunting, a huge part of a head-hunters skill is his/her network of contacts. By keeping close to individuals, particularly C-Level execs, we know what is happening before Chairmen do – we know which C-Level execs are likely to be resigning and/or likely to be looking for new opportunities before their Chairman does, and crucially, before the press does. Forewarned is forearmed.

Confidentiality is everything, but that knowledge enables us to construct shortlists in lightening quick time as well as knowing when C-Level openings are due. Little wonder why we can construct a shortlist in as little as 2 weeks and conclude a process in 6. We JFDI. No stuffy protocol, no old boys club handshakes, no pointless delays…..JFDI.

In these days of shareholder value being paramount, that approach is exactly what serious chairmen and board directors want – boards that don’t want procrastination, they just want results, quickly, with minimal risk. We guarantee a delivery time frame and if we don’t hit it, our clients can walk paying nothing (although we have never failed to hit that deadline). That approach is becoming increasingly popular, especially within the FTSE-350 and especially within the FTSE-100.

For the very biggest businesses, especially in the era of the Shareholder Spring, restructuring boards, quickly and with an immensely keen eye on shareholder value, as well as media attention, is critical. No longer are FTSE-100 C-Level appointments the preserve of the old guard, established search firms, their public school educated ‘principals’ and their decades of cobwebs heritage. The businesses want to JFDI.

At the top of the tree, Chairmen trust us because we don’t pretend to do anything other than what they pay us to do – find the best person for their particular job. They also recognise that unlike other Headhunters we don’t work on C-Level preferred supplier agreements, so we aren’t held back by “hands off” clauses like many of the old guard who can only ever consider 50% of the real top contenders due to such agreements.

Chairmen also like us because our process is so quick, yet so effective that we can turn the search around in less time than it takes the nominations committee to decide on the optimum course of action. We can deliver results while the ‘British’ process is running its course. We JFDI.

Our process has become so effective that we have had to limit the number of C-Level assignments we undertake to two per month, forcing our clients to JFDI as well.

How much growth is enough?

Posted on March 7, 2012     Leave a Comment

We appear to be obsessed with growth. It’s the subject of just about every board meeting and strategic discussion.  It is also often topic number one in the ‘broadsheets’ and even in the tabloids.

Will the economy grow by 2% this year? Or will we face disaster and barely make 1%? But what is growth? And crucially, how much do we really want?

Macro economic growth is what we hear about, incessantly it seems, from politicians, media and commentators – especially the doom and gloom merchants. Positive growth is good, negative growth is bad. Quarterly [GDP] growth figures are the barometer for just about everything it would appear – two consecutive quarters of negative growth means we are in recession.

The obsession over these growth figures is almost as great over that of Bankers and Banker’s remuneration. When we saw a negative growth figure for Q4 2011 the political doom-merchants and economic nay-sayers went into overdrive, panicking over the prospect of the dreaded double-dip. Seemingly a fate worse than being  offered the Chelsea FC manager’s job. All of that due to a 0.2% contraction – that’s right, a fifth of one percent. In school that would comfortably be rounded up to zero.

Over the course of the 08/09 recession, the UK economy (output) contracted by 7%. Not 70%, not even 17%, but 7%. This was bad, and more severe than any recession in living memory, but one could argue, not as bad as several other factors currently dogging the UK – especially the UK’s debt position which currently stands at somewhere between £1trillion and £3trillion (dependant on whose figures you listen to, and whether you include all liabilities, including pensions).

Yet it is still growth that we are obsessed with, largely because the media tell us to be, while building the negative case, spreading doom and gloom. This is the reason that a massive number of the general public think we are currently in recession – despite us having not been in recession for approaching 3 years.

Economists predict growth will be approx 1% this year (downgraded from the dizzily high expectation of nearly 1.4%) and not much above 2% per year for the rest of this decade – considered poor compared to an average of less than 3% for the last decade. This seemingly miniscule difference is still managing to fill 1000s of pages of media commentary, as well as fuelling immense political debate.

Everyone is striving for macro economic growth – but how much do we want? Do we really want the UK economy growing at 5%? Or 10%? Growth would see the demands on key materials stretched (witness some commodities and raw materials rocket in price purely on that back of China’s 9% growth), critical pricing indices rocket (witness house prices in times of economic ‘boom’) and risk attitudes relaxed to potentially dangerous levels (witness pre-2007 leverage levels).

Lessons from the East

Even China, through Wen Jiabao, has lowered their growth targets for 2012 to a mere 7.5%, their 10/11% growth having caused them long-term issues. China without doubt has prospered by industrialising rapidly. Chinese workers formerly employed in agriculture have been lured to cities to produce goods for export. The export demand for such goods, coupled with an undervalued currency, ensured that China built up a huge surplus of savings. But did it become a fateful consequence.

Inexpensive imports kept inflation low. The central banks thus had leeway to ‘play’ with interest rates. Easy monetary policy, combined with lax banking regulations, sparked a credit boom that turned to bust (does all this sound familiar yet?). However, because of the underdeveloped state of the Chinese banking system, much of the country’s immense foreign currency reserves were recycled in the US debt markets…. The rest is history.

Now it could be highlighted that China’s recent robust growth has helped the western world escape a double-dip recession, and that if the pace of Chinese growth decelerates, that may make such western recovery more difficult.

Chinese growth had led to greater economic strength, but having expanded through exports, China now has an emerging middle class and a demand for services and imported products, rather than indigenous manufactured products. Service sectors do not have the same potential for productivity gains as manufacturing. Ergo: Chinese growth over the medium term will probably be more geared to domestic demand and slower than it has been in the past decade. Victim of its own success.

Furthermore, with pressure for wage rises (that have been lagging behind production growth) on the back of such tremendous economic growth, the pressure on the (weakening?) economy will increase. All because of high growth. Minor concerns compared to the Eurozone, and the rest of the world, but it still goes to highlight an inherent risk in comparatively high growth (macro) economies.

The UK would have a further challenge against high growth.  Chinese growth levels in this country would likewise see business prosper, likewise see the rich get richer, likewise see wages lag behind business growth (and business owner earnings)….which would in turn inflame the same media commentators that deride our lack of growth today.

SO is there a level of Macro Economic Growth with which we would see universal acceptance and happiness?…and maybe even a smile appear on Robert Peston’s face?

What about YOUR business.

What about Micro-Economic Growth? For a start, forget the GDP figures. Fractions-of-a-percent changes in Macro-Economic growth are utterly meaningless to an SME. Even whole percentages have very, very little relevance to most businesses, and obsessing on it will mean you are not in turn spending the relevant time on your own growth. Forget the growth outside your business; make sure your metrics are heading in the right direction.

Clearly, even within micro-economic environments, growth at all costs is equally foolish.  Witness a well known business, famed for meteoric growth during and despite the recession, doubled its turnover over the course of 3 years, launched new products, entered new markets, began supplying top-tier customers…but forgot fundamentals such as cash, margin and crucially ensuring that profit didn’t shift in the opposite way to turnover. Its administration and subsequent break-up will be announced over the next 6 weeks.

Top-line growth is easy. As the old euphemism goes, any fool can sell something at a loss. Profitable growth is harder, maintaining positive cash-flow through profitable growth even harder still. But sustainable, profitable growth should be, in theory, uncapped.

Plenty of businesses witness annual top and bottom line growth in excess of 50%, many greater than 100% but they do so with planning, intelligent leadership and a growth strategy (see my guest blog on the Business Growth Hub website about ensuring People are at the centre of your growth strategy)

“It’s not knowing what to do, it’s doing what you know”

The answer to both business and country/GDP (Micro and Macro Economic) growth is to know your ‘business’. Tony Robbins’ quote above may sound flippant, but anyone who had led a business to a specific level, knows what that business needs to do – even if what they need to do is replace themselves with a right leader for their business’s next phase.

Too many leaders spend time re-inventing what they need to do, rather than just following what they know needs doing. These leaders forget the notion of having two ears and one mouth for a reason. Understand where you want to be, decide how you are going to get there, design the path/route/strategy to follow (and be open to others suggests on route-planning) and follow it.

Governments can’t do this, they have politics/media/opposition benches/less-informed public opinion to pander to…..but businesses don’t have that excuse.

Grow within your capabilities, by design, by plan, by strategy. Push yourself, drive yourself to achieve more but know when your growth targets are enough.

Fur Coat, No Knickers.

Posted on March 5, 2012     1 Comment

Style over substance.

“Image is everything”. We spend £1,000s on clothes, skin care, hair products every year (and women can be even worse) all in the quest of improving our image. Dozens of entire industries have been born out of humans desire to maximise how others see and perceive us – irrespective of what the reality is underneath.

We are all guilty of assessing people based on their image, and those opinions formed are seldom changed easily. The way someone looks, talks, smells – their body language, their vocabulary, their clothing, their perceived Body-Mass-Index.  Some will term them prejudices, others just being human. And it is just human.

One of the worst examples of a snap shot assessment of individuals is in an interview situation. “You pass or fail an interview in the first 5 minutes” is incorrect – you have nothing like as long as five minutes. Visual assessment of an interviewee (and interviewer) – 10 Seconds? 20 seconds?  Full opinion formed – 2 minutes? As long as it takes to assess their handshake? You get the idea.

NB: This is where your Head-Hunter/Consultant should really earn their stripes: Interview preparation (expect a future Blog, but contact me in the meantime for further info). Understanding the person you are meeting and ensuring that crucial first impression is maximised is vital. Chemistry is everything in recruitment. Beyond that you become more technical and enter the amazing world of Neuro-Linguistic-Programming (NLP) – but more of that in a future Blog as well; in the meantime Google Richard Bandler or Tony Robbins (twitter: @TonyRobbins) for more on NLP.

But what about in broader life and crucially, in business?

Image/Style is important. Everyone likes to see and be in a smart office. The law firm with a prestigious Downtown/City/New York address, or their professional advisor that is ‘obviously so good/successful’ that he arrives in a £150,000 executive car (and negating the weak “your fees are obviously too high” retort – see Celebrating Success for more details), but where does substance fit in?

The internet, and dare I say it, Social Media has made Style easy to maximise.  Anyone with a reasonable £4-figure budget can build an impressive looking website; even better, with wordpress sites (such as this one) and a bit of time, patience and flair you can build a passable website for nothing. Add in a reasonable social media understanding, strategy and presence, even the smallest entrepreneur can look like a global enterprise – ever wondered why some search businesses perennially have ’25 staff’ yet you only ever hear about 5 of them?

But style is short lived. Even impressive looking websites, owned by drivers of £150k executive cars with a flash City address will be left wanting as soon as you dig beneath the surface. No-where is this more prevalent that in recruitment, and particular in executive search. With minimal barriers to entry, the industry is awash with businesses and business leaders for whom style is greater than substance. Fortunately the majority of these are comparatively easy to spot. Anything that appears too good to be true, especially with cost, is usually cause for alarm bells.

Many head-hunters have made great careers out of promising masses at minimal percentages, but delivering very little, and wasting weeks and weeks of client time in the process. But by then the head-hunter has two-thirds of his fee, without any contractual refund or even rebate clause, and he can move his slick sales patter on to the next.  Style over substance.

So it’s all substance?

Substance (delivery) is important, again especially in a recruitment context. People serious about attracting the best talent are focussed on the acquisition and delivery of that talent – it’s all about the candidate. Ergo; the ability to deliver, to successfully complete becomes the critical factor. Those few head hunters with a 100% successful track record have an unparalleled USP – having maintained a 100% success track record on retained mandates throughout my career is still my biggest USP, and the element that wins more business than any other. It is all about delivery.

Beyond that, both individual and client companies will benefit from a substance biased advisor. Straight talking, knowledgeable, direct and in control.  Passion is also a vital component. The last two mandates I won were hugely influenced by the fact that both contacts saw how much I wanted the business, and how tirelessly I would work to ensure delivery, and not just to maintain my 100% record.

However…..If you are serious about finding THE best candidate, and not just the best candidate on cheaper recruiter’s database, substance will need style to be successful. In a world where we have to sell your opportunity and your business, at times more than selling candidates to you, it is essential you have an advisor that has the ability to manage your PR, understand your business, and then sell your business, and gain significant  interest, without over-selling it.

If we accept that the bulk of the higher quality talent will have to be headhunted – they don’t sit on recruitment databases – then for many such prospective senior managers, their first introduction to your business will be the head-hunt call they get. Much like the interview situation, the initial impressions are formed in seconds. Style has a place. Likewise through the process, every impression gained of you/your business prior to interview will be in the hands of your Head-Hunter. You don’t want a beige cardigan (miss)selling your business.

Money where our mouth is

Ceteris Paribus – ensuring a delivery focus (substance) solution is still the most important objective for the best recruitment and executive search firms. Doing so in the most client focussed manner is what has driven me to work differently. Eliminating risk from Executive Search and rebutting the criticisms levied against our sector.

Guaranteeing successful conclusion within 6 weeks (against an industry average of 4 times that) or your money back – not a rebate/credit note, cash wired to your account immediately, such is our confidence in our ability to deliver. Furthermore, offering a free-replacement for a YEAR after placement should the individual leave. No one else in the recruitment sector has the confidence in their substance to offer the same. 

The Final Caution

The final caution on employing style over substance is the most common reason why in-house recruitment solutions fail. Remember our interview comment above – the first impression. Many businesses forget or simply don’t bother to dig beneath the surface of those they interview. In short, recruiting people they personally like and could be friends with, rather than matching both skillset and organisation chemistry fit. Without the control of an independent head-hunter, many businesses not only fall into the Fur Coat/No Knickers trap, they get caught fully exposed.

Wanted: Disabled Black Lesbian?

Posted on January 22, 2012     7 Comments

Over the last few days we’ve had a number of people bleating about the lack of Salfordians getting jobs at the BBC’s new ‘Manchester’ base…..in Salford.  The MEN, The Guardian, Hazel Blears MP (spot a trend?) have all thrown their moans in, after only 24 successful applicants out of over 3,000 applicants came from Salford, and only around a third of the non-internal hires came from Greater Manchester.

Last year, we saw Lord Davies of Abersoch preach to businesses about the lack of women around the boardroom table and signing up a number of politically malleable Head-Hunting firms to a charter to opening discriminate to get more women included in short-lists – despite a wealth of data to highlight that the lack of female representation at the higher grades was down to supply, not prejudice.

Put this against a backdrop of comments from Entrepreneurs and business leaders who consistently cite one of the biggest hindrances to [their] business growth is finding, attracting and engaging the right/best talent.

Spot the issue yet?

Businesses crave and critically need the best talent. The right Head-Hunter will go and find the best talent. Perfect solution…..until the bed-wetters arrive with their rule books, charters, demographic breakdowns, political agendas, diversity policies and enormous range of criteria for you to avoid any potential, vague of-chance of perceived discrimination and/or inequality…..and countering it by openly discriminating.

But it’s ok because this Discrimination is Positive Discrimination (usually as decreed by the same bed-wetters that hold the rule books, and political agendas). The trouble is, it is seldom genuinely positive.

Businesses need the best people to drive their business forward. The BBC in Manchester Salford needs the best people to ensure that the highly contentious move to Manchester Salford is an overwhelming success not only for the BBC and its customers, but also for Salford, Manchester and Greater Manchester.

Appeasing the naysayers, by giving the locals jobs en masse over those better qualified will not help achieve that.

Likewise, telling me that the shortlist I have presented to my client is not good enough because it doesn’t contain sufficient diversity is lunacy – yet thanks to Lord Davies et al., this is the way it is going.

We have already had Europe stamp their feet where they are largely unwelcome, deciding that such wildly discriminatory phrases such as ‘dynamic’, ‘hungry’, ‘fast-paced’, ‘energetic’ etc might not be the best way to attract Mr/Ms Uninspiring/Unmotivated/Underachieving and thus should be outlawed. If they had their way, “Person seeks Accountant” might be as specific as you are allowed to be, publically.

No-one I know would argue against the need to ensure fairness and eradicate discrimination from recruitment and business as a whole, but doing so through further unfairness and further discrimination is not the way to do it.

The only time I have been asked to openly discriminate for any mandate has been to increase the number of a deemed under-populated demograph – including a proudly all-female board that wanted it to stay that way (but ended up hiring a male Finance Director!) Can you imagine if a ‘proudly all-male board’ led business advertised itself as such? And openly searched for a male colleague?

Lord Davies’ well-qualified intervention has increased the number of female directors in the country’s largest companies from 12.5% to almost 15%. Doubtless a positive move in the eyes of the Lord [Davies], but how many better qualified individuals have been discriminated against to ensure a short-list contains its requisite make-up?

The Head-Hunters I have spoken to quietly fly-in-the-face of their employer’s corporate line and admit that they have disregarded better candidates to ensure they hit this politically motivated, arbitrary set level of 25% of shortlists being female.

What then happens when a different Lord decides that a further 25% should come from a different under-represented demographic background? And then a third thinks of a further under represented group? Or geographic location? Or specified hair-colour? Or regional accent?

Imagine delivering the best candidate to your client when over 75% of a 5 person short-list *has* to be from these pre-ordained, irrelevant backgrounds. Are you really delivering the best? Or merely the best within an every lengthening set of constraints? And do you want your business, and it’s performance constrained?

Political correctness or not, I deliver the best shortlist, and the best candidates to my clients. I openly disregard the voluntary charter to ensure X% of shortlists contain arbitrary levels of certain people. I deliver the best.

…..yet ironically, over the past 3 years, more than Lord Davies’ magical 25% of the shortlists I have presented have been female. Because each time, they have been amongst the best candidates for the job.

Great Britain. GREATER Manchester.

Posted on January 18, 2012     13 Comments

This morning, at North-West Business Insider’s latest economic forum, one of the two ‘Dons’ of Manchester, the great Sir Richard Leese, was joined by Mike Emmerich; CEO of New Economy, Rachel Combie; Director of Strategic Marketing at Marketing Manchester along with event host, presenter and eloquent narrator – the eternally youthful Michael Taylor; Outgoing Editor of North West Business Insider

The Economic Forum (#MCRForum) was, as always, a great session, looking at the region’s future, and specifically the economic leadership in the city region. It also touched on ‘The Family’.

Manchester has done amazingly well. Under Sir Richard and Sir Howard’s tutelage, and testament to their commitment and hard work, Manchester has cemented it’s place as not only the UK’s second city, but also a blue-print that many cities do (and/or should) follow, to say nothing of it’s position of an international brand – few corners of the earth do not know “Manchester”, even if they think the Mayor is a chap named ‘Beckham’.

But the strength of Brand Manchester isn’t just the two Manchester Dons, Leese and Bernstein, though. “The Family” (Midas, Marketing Manchester, Manchester Solutions and New Economy Manchester) have become central to the region’s intellect, power and impact – the achievements in all areas, not least in inward investment and regeneration, are immense.

The City region’s, and specifically Sirs Richard and Howard’s embrace of the private sector and of commerciality as a whole, is widely applauded and seemingly still ahead of the game compared to more traditional, more political, more ‘them-and-us’ style regional stances. The promotion of enterprise (genuine enterprise and the support of Entrepreneurs, not just political posturing) has been a big part of the region’s success story – but continuing that is now key, especially in more austere times.

This is the risk as I see it.  The best businesses listen to their customers. Witness my various ramblings on twitter about the retail sector. There have been no surprises about which businesses have failed and which have blossomed (and it is the Northern businesses that appear to have benefitted – see HERE.  No Longer Grim up North!). It is the businesses that engage with and listen to their customers….then learn from them and act accordingly.

“Never tell anyone outside the Family what you’re thinking again”

The Manchester Family can give the impression of a closed-shop. The interaction, and working relationship between the agencies is great – even moreso when you consider they act for 10 local authorities and the differing political and hidden agendas that could elicit, but the perceived barriers to inclusion are significant: The phrase closed-shop was heard from several people on the way out of yesterday’s forum. Very ‘Family’.

I’m sure they do listen. The intellectual firepower The Family can muster is immense, but is it innovating? Is it keeping up with the times? We have some immense minds in Manchester; some leading Entrepreneurs, visionary leaders and business leviathans. But do we hear them speak of, or be engaged by The Family?

We’ve not suffered so far, as mentioned above, no-one can decry the achievements made to date – but even innovators have to keen innovating, or at least keep-up to survive, let alone thrive…witness the announcement being played on Sky News‘ evening programme as I write this, that the inventor of the Hand-Held Camera, Kodak, has filed for Chapter Eleven protection due to the evolved success of it’s own product.

One area this appears to be most evident is in business support for SMEs. The question of small business support was asked yesterday, twice, in different ways. The only definition of support that appeared to be understood was financial. Grants. Hand-outs. The highlighting that the NWDA and Business Link was soon to be no more, and certainly didn’t have funds available was the mainstay of the response. Replacement investment support options being the answer.

The overall support structure appears outdated and thus often overlooked by the Entrepreneurial/SME sectors. Most entrepreneurs I know don’t crave government money; they don’t need business versions of social handouts. They want access to opportunities; They want access to those people who have developed in the areas they seek to emulate; They want relevant first hand support from bodies with the power of The Family.

Perhaps that would be the offer they can’t refuse?

No Longer Grim Up North

Posted on January 10, 2012     3 Comments

It’s a good day to run a business in the North.

Of all the businesses announcing figures in the last two days, the Northern businesses have cleared the table.

Bentley: Record sales announced. Pets at Home: New stores announced. Morrisons: Increased sales. Booths Supermarkets: 3% rise like-for-like. JD Sports: Increased sales, now announced acquisition of Blacks. KPMG North: Revenue increase. ShopDirect: Sales Increase. ….even legacy Northern-at-heart business, Rolls-Royce Motor Cars have announced record sales.

Contrast that with the woes of Blacks, La Senza, Hawkins Bazaar and even the poor & flat performances from Debenhams, GAME and M&S.

So is the north rebutting the economic gloom? Or is the economy not as bad as people (you can choose to exchange the word ‘people’ for ‘media’, ‘Robert Peston’ or ‘Rachel Reeves’) think and keep telling us?

Macro indicators are ‘OK’, and equities in particular are holding up really quite well. The FTSE-100 has risen 14% since October’s low and is now 4% higher than early 2008. Factor in UK & US equities performance against Euro Zone and Emerging Market and the performance looks yet stronger (both down, 33% & 23% respectively).

Equities are back as an attractive investment proposition: OK, a 3.5% dividend yield isn’t breaking records – but it is almost double that being offered on 10 year UK Govt Bonds. (and businesses with a strong balance sheet and good revenues are arguably a safer long-term bet than bonds of highly indebted governments?)

Equities aren’t the be all and end all, far from it – but if they keep performing, maybe even the Robert Peston’s of the world might start to feel, and be a little less gloomy.

North-Star shining

So back to the Northern performance. Why is the North seemingly shining? Yesterday’s Business Desk / DLA Piper / PwC State of the Market report made for interesting reading (report can be found here).

Two-Thirds of businesses expected turnover to increase in 2012. Crucially for a Head-Hunter, the number of businesses expecting to increase staff number has increased by 250% on a year ago to just under 40%.

Even funding is becoming less of an issue – two-thirds of Northern businesses believing they have adequate access to finance to cope with economic pressures.

Even the Private Equity market has bounced back with significant increases in transaction numbers and overall transaction values – 2001 seeing a 5-fold increase in transaction value compared to 2009.

Contrast that with the plethora of gloom coming from elsewhere in the country – today’s Chamber of Commerce national findings that ”Britain’s limp recovery is grinding to a halt” a prime example, portraying a picture of gloom. EuroZone crisis being a key blame, with funding and concerns over unemployment coming closely afterwards (in stark contrast to the NW survey findings above).

Espionage

I’m a proud Northerner currently sitting in a hotel in Westminster, London; and spending two days a week down here. I call it missionary work, but it is also interesting to observe the North/South split, particularly in attitude. I’m reluctantly becoming a big of a fan of London – early morning runs along the Embankment, sampling the city scene – but getting to speak with random London business(wo)men is equally enjoyable, and enlightening. Despite success, good news and obvious wealth, the talk is all about macro-economic gloom.

Northern Grit

So why? Why is the North, and in particular the North-West fairing so comparatively well?  Part of it is hinted at in the final sentence of the Business Desk article. “Most private businesses in the region have set their sights on growth despite recognising that significant challenges lie ahead.”

Many northern businesses have just set their sights on ‘getting on with it’. As the straight-talking Entrepreneurial hero Scott Fletcher said “Recession? I’ve just decided I’m not taking part”.

It’s Attitude.  Northern businesses are just ‘getting on with it’, not blaming everyone else. “JFDI” (Google it). The SME sector in particular is largely immune from the Macro-Economic environment. Fluctuations of 0.1% in GDP are utterly irrelevant to small businesses and even most large businesses.

Even ‘catastrophic’ 7% drops in GDP don’t really make a massive difference to the SME sector, so the smarter businesses are ignoring it and focusing on their own top and bottom lines rather than using irrelevant, pseudo-political macro-economic data as an excuse for their own short-comings, or inability to respond to challenges.

This attitude often results in less reliance on funding – taking the Shakespearian missive, “Never a borrower or a lender be”. Northern businesses are far more likely to self-fund.

Northern Soul

But there’s more than just Northern Grit. The personalities in the north….the People. The south has some big business successful personalities: Alan Sugar/Theo Paphitis/etc but the north has a huge number of natural, down-to-earth, leaders, driving the SME sector.

The north is famous for strong, inspirational business leaders – right back to Titus Salt, but it is the plethora of entrepreneurial ventures, led by great modern leaders that are helping to really drive the north.

The respect for these leaders from their colleagues and staff is unique, the benefit to the businesses is enormous. Their personalities and leadership style breeds an empowered, motivating culture throughout the business – their prime challenge being to find the best talent to maintain that culture and not allow dilution as the business grows.

High Speed Links to the North

It is easy to see why national, and international talent is migrating north. Every sector has massive representation in the North, and increasing representation.  The talent is following.

HS2 might be offering high-speed links to the North, but some of us are already here, 14 years (and £33bn) earlier.

The Man That (shouldn’t have) Pressed Send

Posted on December 29, 2011     8 Comments

“Success is the result of good judgment, good judgment is the result of experience; Experience is often the result of bad judgment.” — Tony Robbins
We all have moments of bad judgement. We all make mistakes.  My mistake was allowing a set of negative circumstances to affect behaviour and judgement.  Mistakes are part of being human, recognising the mistake is the often less-human part.

“Regrets, I’ve had a few…..”

I reacted to one person’s professional approach and others’ decisions to use that approach to spam and solicit. Regret? You bet.  Irrespective of the benign intent of the retort, (distorted through gross exaggeration and tabloid reporting) the result has been as unpleasant as the almost salacious reporting of the event – my time spent in solicitors offices to commence legal proceedings being the least of the ill-effects.  Whilst a large number of the 49 actual recipients (not 4000) saw it in the more light-hearted vein in which it was intended, and replied to that effect, a handful of the other recipients were obviously offended, and/or took issue with me/my intent. To those people, I apologise again.

“Bit off more than I could chew….”

On the subject of intent, I’ve been asked “why” several times, not least of which a question self-posed. The easy, yet perfectly factual answer is that it was a mistake, a moment of weakness and a misguided, sarcastic retort; a combination of a sleep-less night due to an ill 2-year old daughter, a fruitless online recruitment portal and a raw nerve.

But there is a deeper response to the question “WHY”.

I am immensely passionate about my industry, as I am about business. I am passionate about doing recruitment properly, and seeing the benefit doing so brings to the businesses of this country, and beyond. In a world where people are everything, the search and selection of those people into the businesses that lead this country, drive the economy and fuel our entrepreneurial spirit should be seen as vitally important. It should be taken seriously.

The recruitment industry is an oft maligned sector. Easily clubbed together with Double Glazing Sales/Estate Agent. But the people that do so have never experienced the true Executive Search sector, and certainly don’t understand what a Head-Hunter actually does; nor what it takes to be one (read more on that here).

The Executive Search sector is a $6bn industry (Source: Association of Executive Search Consultants). That doesn’t happen by accident.  Many people see no difference between the CV-shifting ‘High-Street’ agencies, and career experienced Executive Search Consultancies; Head-Hunters. But those that have used such an individual, and recognise the skills they possess to say nothing of the contact bases they offer, certainly do appreciate the difference.

One of the starkest differences is the seriousness Executive Search consultants, Head-Hunters, employ to complement their passion for recruitment – and the seriousness they expect to see to from people they deal with.  “Tyre kickers” whether job seekers or prospective hiring managers become that bane of the Head-Hunters life. In a week that usually extends past 60 hours and frequently past 80, time-wasting (and time-wasters) become toxic.

We demand people take their quest for a new role, or for a new Executive seriously. No other professional advisor is treated with in the same blasé attitude. I’ve spent enough time with solicitors in the last 2 weeks to know that a lazy approach and a non-serious attitude wouldn’t have gotten me anywhere. Yet people will seek to engage a Head-Hunter, get him or her to undertake dozens of hours of work without any commitment to continue or perceived need to remunerate for those services.

“Saw it through without exception…”

The third attribute you will often find in a Head-Hunter, to compliment passion and seriousness is the ability to be bluntly objective. To be straight-talking.

Every B2B sector business claims to be straight-talking; every professional advisor will insist they are candid and forthright, yet many will shy away from saying what they really mean or be fearful of giving bad news, or even just saying “no”.  Yet the bluntness of my approach, my ability to be straight talking is the attribute my clients and contacts voice as being the strongest of my characteristics, along with the size of my network and my ability to spot potential chemistry between two parties.

Straight-Talking leads to controversy. Few people like being told the naked truth, to be given negative responses, but without this level of honesty, the reality we sit within is false. Much as the Queen thinks the world smells of fresh paint [due to someone painting every surface 100 feet in front of her]; likewise the person that is never told that their approach is wrong, their expectations farcical, their spelling dreadful and their interview style atrocious, will continue in blissful ignorance in Emperor’s New Clothes style.

“My Way…..”

Does any of the above excuse my (well reported) actions? No matter how grossly exaggerated? Of course not.

Has it had a profound effect on my life? And a detrimental effect on my family? Like you could not even begin to imagine.

Will it change my principles? Or my effectiveness as a Head-Hunter? Absolutely not. As James Joyce said “A man’s errors are his portals of discovery”.

Anyone who is serious about recruiting, finding high quality talent, or themselves finding a career defining new role will get full attention, they will get honest feedback; like it or not and once engaged, they will get an absolute commitment to deliver, no matter how hard the work involved.

…..But come without realistic expectations, an un-commercial proposition, an unserious approach or without commitment to recruit (or find a realistic, high quality executive role) and whilst you most certainly won’t be told to “**** Off”, you can expect to be told as to the error of your approach, commitment and expectations.

Do not brood over your past mistakes and failures as this will only fill your mind with grief, regret and depression. Just do not repeat them in the future.” — Swami Sivananda

>> Be Serious

Director Movements

Posted on November 20, 2011     1 Comment

Recent survey of the countries leading businesses gave interesting results.

A number of unsurprising trends emerged from the survey:

NEDs: UP
Women: DOWN
CEO NEDs: DOWN
Directors: DOWN
Risk Committees: UP

It is no surprise that the number of risk committees has doubled in the past two years, and that the increase has taken place both among banks and other companies.

Again, not a surprise to see board sizes continue to decline, following the trend seen for over 10 years that smaller groups of more expert directors are more effective than the larger boards that used to prevail.

Downward Shifts

Female Leaders
Despite Lord Davies of Abersoch’s ascertains that there should be more women on Boards, there are less than there were when his report was published – only 20 in the FTSE-150 and only 43 in the FTSE-350, equating to just 4%! A slightly more encouraging 14.3 per cent of non-executive directors are female though. Easy to see why the pressure for reform is increasing, with the general recognition that diverse boards simply perform better – but it is realistic? Are there enough women to go round?

HOWEVER, the number of Female CEOs has more than DOUBLED in the last 12 months – leading female CEOs being Angela Ahrendts (Burberry), Cynthia Carroll (Anglo American), Alison Cooper (Imperial Tobacco), Katherine Garrett-Cox (Alliance Trust), Caroline McCall (easyJet), Heidi Mottram (Northumbrian Water) and Marjorie Scardino (Pearson).

Board Sizes Decreasing
The number of Boards with 12 or more members in the FTSE-150 is now only 22%, down from 30% just last year. The inevitable result of Boards getting smaller is that they include fewer executives. However, this means there must be sufficient non-executives to populate Board committees appropriately as work becomes more scrutinised and time consuming. A trend backed up by our Non-Executive Practice seeing a 600% increase in NED appointment!

Foreign Directors
In 2005, the proportion of foreign directors on FTSE 150 Boards was 32%. This year’s number represents a significant drop of more than a-third and suggests there may be a post-crisis reluctance on the part of foreign executives to commit the time to serving on an overseas Board when their own businesses need their full attention. UK Boards have until recently been among the most culturally diverse in the world, which has been a source of competitive advantage. A trend that needs very close monitoring over the next few years.

CEO NEDs
Chairmen are increasingly reluctant to allow their CEOs to take on outside Boards, with only 41% of CEOs having non-executive interests. This can be attributed for two related reasons:

• Time commitment expected of non-executives has grown steadily in recent years (See Board Sizes Decreasing Above!)
• In the present economic climate CEOs have pressing needs to deal with in their own businesses.

The proportion of CFOs serving on an outside Board is also just over 40%. The reasons will be similar, but with the countering fact that CFOs are in great demand as audit committee chairmen, which demands a very significant time commitment. It is a concern that so much experience and talent is unavailable to large company Boards, to say nothing of the benefits that executives can gain themselves from serving on an outside Board.

It’s not fair

Posted on November 10, 2011     1 Comment

Same old statistics/same old complaints?

Another report citing that the proportion of total income earned by the top 1% of earners in the UK has grown from 6% to 14% in the last 30 years. (8% to 18% in the US in the same period).

Yet…..

An OECD study in 2010 showed that Real Income grew 110% in the 30 years to 1980, but only 11% in the following 30 years.

Are the Hard-Working of the current generation really being that hard done-by?
Or are the Fat Cats taking the cream and letting the other 99% squander?

30 years ago, the average Blue-Chip CEO remuneration was approximately 20 times the average UK earnings. Today it is nearer 200 times.

Why?

A genuine global market has seen high-skill professions explode. Coupled with massive, accelerated global growth in both the number of businesses and in the scale of businesses, the demand for highly skilled business leaders with a track record of achievement has never been higher – The supply of ‘the best’ however has not kept pace.  Rudimentary supply/demand economics dictate that prices increase.

Salary Decreases

Despite huge increases in Blue-Chip, Top Table remuneration, salaries have typically decreased; Gains made instead through performance incentives, pension contributions and significantly, LTIP/Wealth Creations Vehicles.

So today’s CEOs are a lucky bunch.

Not really. Today’s large company ‘Blue-Chip’ CEO have a very big role and immense responsibility. Gone are the days of the company Rolls-Royce waiting, ready warmed, for you at 5.30pm sharp with your driver stood to attention in his peaked cap. The average CEO we spoke to works between 80 & 100 hours per week, spread over 7 days. What’s more, the majority of them have had such a work life for over 20 years to get to that position.

We asked Lord Sugar about his work/life balance. “Work Life Balance? I’ve been a s**t Father and a s**t husband. I’ve worked just about every working hour and it’s getting worse and worse. To be successful in business, you have to make compromises.”

No smooth path to Success.

Overall earnings may be better for the very top earners, justified or otherwise, but those climbing the corporate ladder aren’t having it any easier. Salary pressures are still heavily evident for the bulk of professions, and whilst outstanding opportunities are certainly returning, the expectations placed on applicants throughout the recruitment process and even more so, from Day 1 of employment are immense. Employers are seeking their pound of flesh from their aspirational high earners.

So it’s just professionals that are seeing salary/earnings pressures?

No. The lower paid are fairing even worse. Despite the introduction of the UK national wage, and the subsequent rises to £6.08 from this year, the lower income brackets are still fairing worse.

Largely through rising immigration, offshoring and the rise of new technology, semi and inskilled workers have seen their fortunes worsen. For example, since 1997, the number of foreign nationals working in the UK has risen by 2 million, far more than the 766,000 rise in employment among UK nationals. All giving downward demand/downward salary pressures (and leading to UK National attitude issues…..but thats a whole different subject)

DINKYS driving the gulf?

The final element that is causing the gulf between the Top earners and the low earners is the changing structure of Households in the UK.

The growth of one-person/single parent households typically inhibits the ability to become one of the 80-100 hour per week CEOs from above, whilst also reducing the scope for such families to benefit from the savings associated with pooling resources and sharing expenditures.

The converse element of the household structure is attributed to professional couples “assortative mating”: Top earners are increasingly pairing up. Today, c40% of working couples/partners belong to the same or neighbouring earnings deciles compared to less than 25% in 1981

So what can you do?

It really is up to you. You could do nothing. “Some guys (or girls) simply get all the breaks”.

…..Or you could speak to a recruitment specialist that can ensure you get the best chances to ensure your business, your recruitment strategy and your interests are aligned and optimised. You know where I am.

Darwin in 2011: Survival of the…..Average Jo(anne)?

Posted on October 20, 2011     Leave a Comment

Be the best you can be. Once upon a time, we were all encouraged to work hard, to excel, to maximise our natural talent (nature or nurture), race to win, go the extra mile.  The brightest students in school were put in the top class/set so they could maximise their potential.  Meritocracy was part of life, part of our schools and part of the workplace.  The best did the best and were encouraged to do better.

Then we became frightfully British and were told, that it was the taking part that mattered.

We then ‘evolved’ further (some would say became ‘European’) and winning somehow was frowned on. The best should help those who were not as good – now branded the less fortunate.  Equality was the new meritocracy.  And someone else told us what was important….What was best.  All for our own good, of course.

The same thing happened in the workplace.  And more importantly in people’s careers.  10, 20, 30+ years ago there were super employers.  Blue-Chip businesses that didn’t wait for the University Milk Round, they pulled strings and got the best students, from the best Universities, well before the Milk-Rounds (back when Universities were still allowed to take just the best students that they wanted).  They took these best-of-the-best, paid them to do better, groomed them through placements, and then put them on the Elite Graduate Training schemes turning them into the Super-Execs of the future.  Go and count the number of FTSE-100 Main Board Directors that have been through that route and the merits of such an approach are well demonstrated.

These Fast-Track schemes, Executive advancement schemes, dozens of other similar schemes polished the future stars, working the hard working, harder. Making the bright, brighter.

This meant employers and head-hunters instantly knew, anyone from ‘X’ was going to be a top candidate. In the 70s/80s (in the North-West) it was ICI, Unilever etc. In the 90s it was Airtours, Zeneca etc.  But once we got into the ‘noughties’, there was no longer that automatic star training ground.

Our ‘It’s the taking part that matters’ has weakened the flow of people through education, and now weakened it into the workplace.

John Caudwell recognised this, and very famously sought to recruit the top graduates from the top Universities. Being John, he did so through TV coverage and offering 21yr olds £60,000 salaries and £six-figure packages. This was done at the same time as offering already blossoming stars from competing businesses, great careers, in a business exploding with growth….and earnings potential well beyond their current levels.  One look at where some of his protégés now sit. Business leaders, PLC board directors, Entrepreneurs….dozens and dozens of Millionaires. Created not BY Caudwell, but by giving the naturally talented the unlimited power, resource and motivation to excel. To be the best they can be.

But who has picked up that mantle?  What one business today has got such a plethora of talent, and such a proven development scheme that they are the breeding grounds for the stars of 2021?

Lord Sugar is having to turn ‘Media ‘ to find his future stars in The Apprentice.  Even Richard Branson ran his own version, “The Rebel Billionaire” to find his future President(s).

We are not even allowed to decide what is best for our business, or ourselves. Who are the best people, what the best structure is or how we can design a leadership function for our businesses.  With untold laws, guidelines and suggestions forcing businesses/organisations/schools to recruit X% from specific areas….all in the name of Equality, but placing Equality above Darwinism – the natural selection of The Best.  Even Lord Davies of Abersoch – former Trade Minister, Former Banker, has waded in suggesting that all FTSE-100 companies should have 25% Female Board of Directors.  Not ensuring Shareholders choice of the best candidate, just the blanket stipulation that it should be and arbitrary level of 25%.  Not 50%, not 20%, not 24%…..25%.  So what about the 4^th Director recruitment process – IF the strongest candidate happens to be male, but gets rejected on the grounds of gender?

Back to our graduates. The Macro-Economic Environment has hurt businesses in many ways, directly and indirectly.  One hidden area is the cessation, or at least slowing down of Fast-Track Graduate Management Training Programmes. The best no longer have the vehicle to push them.

There is still the appetite for personal development..  1000s of self-help books, motivational seminars etc sold each day demonstrate that.  So where can the Brightest Future Stars Shine?

This is why I work with the brightest future stars, offering a free career and guidance service for the brightest young professionals. Typically clients’ family/friends, or nominated by their peers and/or their employers, assisting them in the management of their career. Helping them understand the path to their futures, helping them design that future in the first place. Giving them access to those who they aspire to follow, to learn from them.

Q3: What Happened? What can we do?

Posted on September 30, 2011     Leave a Comment

Growth slowed: The pace of US, UK and German growth slowed sharply in the quarter.

Gloomier outlook: OECD significantly revised down its forecasts for the global economy. ONS downgraded UK Q2 growth to 0.1%

Emerging markets cooled: India’s GDP grew at the slowest pace in more than a year, China’s equity market underperformed the US market despite the economic turmoil in the US.

Volatility jumped: Equities gyrated, torn between fears of a double dip and hopes of more quantitative easing. The VIX index, a measure of stock market volatility, averaged 35, twice the level of the previous seven months. Equity prices are 20% lower than the end of Q2.

Inflation stayed high: US and UK inflation rates rose again and are close to a three year highs.

Quantative Easing: The BoE issued another £75bn to help small businesses

Market expectations for interest rates dropped back: Financial markets now assume that interest rates across the industrialised world will stay lower for longer; until late 2012.

Sovereign debt concerns rose: S & P downgraded USA’s credit rating by one notch to AA from AAA.

Retailers Collapsed: Habitat, Jane Norman, Focus DIY, OddBins all locked up for the final time

Domestic Market: The Q3 domestic balances recorded disturbing declines; weak for both manufacturing and services.

Export Market: Despite attractive currency positions, Export balances worsened in Q3, for both manufacturingand services dropping to the lowest level for 2 years.

Investment: The Q3 plant and machinery investment balances worsened for both sectors although investment in training rose slightly.

Cashflow: Businesses in both manufacturing and service sectors reported negative positions at -8% and -6% respectively

Capacity Utilisation and Cashflow: The percentage of manufacturing firms operating at full capacity is unchanged, at 34%, with the percentage of Service firms operating at full capacity falling four points to 34%.

Summary?

The Q3 results point to a deterioration in the economic situation, with worrying signs of stagnation in the domestic economy. The disappointing balances for exports, and for investment in plant and machinery, suggest that the much-needed rebalancing of the UK economy is not yet occurring. Negative cashflow balances indicate financial pressures. Given the worsening global economic prospects and the acute problems facing the Eurozone, there was a clear need for the MPC and the Government to make every effort to avert risks of recession – hopefully now seen through the recent increase in the QE programme to £275 billion which while welcomed, sees more radical measures needed; these should be mainly concentrated on purchasing securitised SME loans and other private sector assets.

On its part, the Government is under pressure to introduce a comprehensive deregulation programme, and re-prioritise its spending plans to promote growth, investment and exports. The Government must seemingly persevere with the deficit-cutting plan, to stabilise our public finances and protect our AAA credit rating. But radical changes are needed within the overall spending envelope, to avoid setbacks and sustain the recovery.

However…. At a Micro-Economic level it can be a very different tale. We are seeing plenty of businesses that are fairing well, and even more that are doing OK. Even this week we have started working with three different businesses that are experiencing in excess of 50% per annum growth, one of which is planning a £bn IPO.

Some of these businesses have the benefit of a product advantage, others have raw commercial advantage, but for most it is a combination of sound controls and solid, real-world, commercial acumen.

This all boils down to people. Strong, common sense, driven Leaders – understanding their strengths, covering their weaknesses with others strengths.  But not just Leaders: ensuring that all the people in your business are engaged and motivated – and informed of where the business is, and is heading. A spread of behavioural profiles, and good element of entrepreneurialism and a well communicated strategy is vital. People being king…..that’s why the best recruitment businesses and head-hunters are continuing to buck the trend.