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A short overview of the problems of British Business

The generals of the Roman empire reported back to their emperor that everything was going well.  They were the last to notice when their empire started to collapse from within.  Futile expeditions, wasteful extravagance, expensive wars, decentralised control of the provinces, integration with local cultures and barbarians at the frontiers all lead to the empire collapsing.  But the main thing was that nobody knew whilst it was happening.

There's been no time in the history of modern commerce when companies have had such short lives - the turnover of the FTSE 100 is much greater than it has ever been before.  Companies which thrive generally do so by diversifying from the core business and having every now and then root and branch overhaul of products that are not selling so well.  Sometimes they move to selling something else (more money to be made from printers when no one has them, when everyone has one make money from printer ink).  Business models need strong brands of reliable quality - consistent over decades - or they need to invest in development, try new things.  Productivity is the UK bugbear - nowhere in Europe are such talented people making so little for the companies they work for.  The companies don't invest in their skills, particularly when investing in new products, the rely on the same people doing the same things, often employing more people to get the same output rather than working smarter.  When the axe comes it can happen though a sales slump, a better competitor or just a steady seeping away of customers because the product grows jaded.

A winning team is about consistent leadership - so Sir Alex Ferguson says - he also reveals it's about deep and reliable intelligence, understanding what the customers (fans) want, a recognition of everyone in the team, imposing discipline and dealing with trouble through different motivational techniques.  A team works as a team, it doesn't fight itself, it co-operates.  Herbert von Karajan described conducting a great orchestra like like riding a horse - you can't make a horse jump if it doesn't want to, but you can set the conditions where jumping for the horse is the most natural thing for it to do. Gentle pressure, nudging if you will, is about that little thing that persuades everyone to adopt a change in behaviour.  Great companies don't shout nowadays: they inspire, inform and then transact/sell.  Mere advertising isn't the key, especially when it swamps the buyer, comes from every angle or is base don the lowest common denominator.

Little things can mean a lot but they have to be well handled.  Send more staff to an event then is necessary and people will ask where their money goes, send too few and the event loses effectiveness.  Social media is distrusted as much as it is trusted - a load of people who haven't paid for something shouting about how great it is as disingenuous on Facebook as it is on TripAdvisor. And it can bite you especially if no one every says - "no this is not for you".

The best sellers of any product generate a feeling or an atmosphere about every part of the experience.  A great dining room in a hotel is let down by a dirty bedroom, knackered shower or stinking carpet.  It loses stars and it loses customers.  British cycling achieved so much by incremental change in every part of their experience.  Front of house needs not to pick their nose or be tardy in dealing with customers, talk over their customers, take the piss out of their customers, slag off their colleagues or, worst of all, tell their customers they are wrong.  Most time their customers are part of their sales force - treat them with a superior air and you fall under the bus when somethings serious happens.

Everything should be data driven for the business, deep data which refines your thinking and takes you to the next place.  Denying the data is the worst thing.  Everyone can see the shut down pubs, the empty seats at a restaurant, in a cinema or at a football match.  When the terraces are full only when the sunshines - a club chairman must make some changes.  When the formation only works cos the formation says it works, then it's time for changes. When the best becomes the enemy of good then its time for changes. When the largesse of the company becomes blatant wastefulness for the customer, then you may as well start deciding who turns the light out.

The Arab conquest was one of the miracles of modern historical empire building.  It was also pretty much bloodless.  Swords man on fast horses tore across the Arab world across North Africa and took over lands at a prodigious rate.  There was no killing for the sake of it.  The inhabitants were offered a very good deal - your old lord has gone, you now pay taxes to the new lord, and if you want to practice your religion that's fine, you'll just be taxed a bit more.  And with it an acceptance of the peace these great soldiers could bring, meant culture was absorbed, art, language and customs embraced.  A sort of bloodless conquest that would have enraged Gengis Khan.  And so it happens in business - Tesco never expected to have a greater corporate debt than the debt of the entire Greek economy - but it has.  They couldn't cope with a silent, slow and stealthy attack from two fronts - those dreaded four letter words Aldi and Lidl.  Tesco maintained their stack em high mentality, medium to low quality, low margins...but they built grand edifices - you can't run half a superstore. In five years Tesco will be dead and buried who would have thought it so.  The problem is they thought they were invincible - until there was an investigation for some irregularity.  With such a huge workforce it could have been bullying, drug offences on site, disingenuous with the taxman or the Charity Commission - Tesco's problems happened in the accounts department - someone somewhere took their eye off the ball. And the wall have come tumbling down.

The bottom line is that most companies think they are great - they reward their CEOs in the light of this.  There is NO evidence that CEO wages and wage rises in Great Britain reflects company productivity and so British companies are ripe for better organised competition to step in.  British productivity is appalling - both the French and the Germans produce more and work many fewer hours. Measuring productivity in companies is just not done or done well, where it is done well EVERYONE has a self-interest in seeing how they measure up.

Like the Roman emperors, lied to by their generals, too many British companies don't see the decay in productivity.  Pushing more sales through more ventures isn't even growth until it's sustained, and nowhere near productivity.  The empire rots from within - the stasis of established custom and practice is mistaken for growth and success. Great leaders ask - how is my workers load easier so they can be fresh the next morning, not how much can this worker take until they break down.

John Lewis paid everyone in the company (a co-operative) a bonus of 11% of salary (that's the lowest bonus they have received since 2003).  The year before they got 15% bonus - thats over two months wages AND everyone got that, every fucking employee, all 38,100! At 25 years service the member of staff gets six months paid leave. I'll say that again SIX months.  So if you think you work for a great business look at those returns for working for this simple, good, well run high street shop.

Darwin was wrong about animals - but he was right about businesses - the weak, enfeebled, bloated, inattentive, blasé, self-absorbed are ripe for the predator...

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