For the first time in 23 years, Microsofts revenues didn’t grow. Imagine how hard that must feel when all you’ve ever been used to is charts that always go skywards? Microsoft have been hit by the slowdown in the PC and server market, they’ve reported fourth quarter revenues of $13.1 bn, down 17% year on year and profits down 30%. It’s no surprise that the global recession inevitably touches even the strongest of businesses and continuing changes in technology are gathering pace again. Microsoft were well behind in the search wars, Google just seemed to come from nowhere and play in Microsofts back yard (hats off to them).
Linux has become more popular. Cloud computing and SAAS is the buzz right now. A lot is being pinned on Windows 7, launching in October, they’re cutting costs and have managed to hack off $750M of operational costs compared to the previous quarter, previous year. That must of taken some doing. For a business so used to success, there must be some tough conversations going on right now.
The Office for National Statistics reported a 1.2% increase in retail sales between May and June, good news. Year on year, the reported increase was 2.9%. The big winners were clothing and textiles, the big losers were high ticket items, which continue to hurt the big electrical retailers experiencing reduced footfalls. This looks set to continue as many of the price increases caused by sterlings devaluation at the end of 2008 now flush through the supply chain and find their way to shelf edge tickets.
When I recently talked to
Charles Bean, the
Deputy-Governor of the Bank of England, I explained that the de-valuation had hit importers hard. His view was that the overall balance of trade needs to be taken into account and the exporters need to make up the difference. The electricals market needs a boost, there’s no doubt. Switch to digital TV will help, more and more people are buying LCD and Plasma TV’s. Perhaps an amnesty on old fridges or energy inefficient electrical products should be considered? It seems to have worked for the car market. Whatever happens, we can’t just rely on clothing sales to drive the economy and buried beneath the good news of increased retail sales is some more worrying underlying news for electricals manufacturers and retailers.
Your excellent masterplan, which at the point of conception – seemed perfect, may need adjustment as you roll it out and get implementing. It is vitally important to keep checking as you go, to ensure that your masterplan is actually going to plan. There are many ways of doing this, a simple way, is the PDCA (Plan, Do, Check, Act) method. Plan = Self-explanatory, Do = Roll It Out, Check = How is it doing? Act = If it’s not running to plan, do something! It’s vital that you make clear your objectives at the beginning. If you don’t this, it is easily caught in your first PDCA review as the feedback loop lets you know. Don’t stick with your plan if feedback tells you that you need to adjust, that’s the whole point. A virtuous circle of feedback and action, to get things implemented effectively.
Marketing and Advertising industry website How-Do have released their Top 100 list for 2009. I’ve made the list for the second year running, you can view it
here. There are some top people and top brands there, I’m really flattered to make the Top 10 and would like to mention the excellent team of people I have around me, who make me look great. I’d also like to congratulate Richard Hayes from Warburtons who made it to the #1 spot. A deserving individual who has done a great job with the Warburtons brand.
Surveying out of 10, isn’t the best way of getting decent feedback. Ask anyone to rate something from 1-10 and you’ll not always get the results you are looking for, people always ending up scoring fives and eights. Studies conducted suggested that offering a response scale between 5 and 7 can be far more statistically significant than ten. Personally, I always think a scale of five is really effective (see picture on the left).
What this allows you to do is get your feedback more simple and more accurate. In this example, we could say XX% of people strongly agreed that our product or service exceeded their expectation. It’s much better than saying xx% of people scored us 8/10 as it has more relevance of direct experience. Where it gets really fancy is when you start adding weightings to questions. This can be very powerful when you want to really bubble up how you are doing on key categories. Simply multiplying the answer (providing you assign it with a number) against a weighting factor drills out some fantastic results.
This morning, I helped to host a really interesting event for business leaders in Manchester. I invited along Chartered Occupational Psychologist and Organisational Development expert –
Dr. Phil Bardzil from
Impact Consulting - to explore the impact that stress has in a recession and to specifically look at how leadership styles change when the going gets tough.
In an enlightining hour, he took us on a journey which explored all elements of stress and how organisational performance can suffer. One particular part that stood out for me was the idea of “Presenteeism”. That is, the opposite of “absenteeism”. The notion of people being sat at their desk all the hours that god sends (even if unwell) as a way of protecting themselves from the threat of redundancy, is worrying. Nothing could be more unproductive for an organisation if the person then underperforms as a consequence through tiredness of bringing illness to the workplace.
However, fear can drive this reaction and it is for the leaders to ensure that the health of the organisation remains intact. The other key learning was that stress is OK in the workplace and can contribute to performance, however there is a limit to how little or how much is applied. Too little and people can become quickly bored, too much and people can become under severe pressure and make mistakes. What business needs to do is ensure that everyone is working at their optimum. I’m a big believer in organisational psychology and have seen big performance shifts when it is deployed effectively. A good Corporate culture can elimate absenteeism and presenteeism. It all starts with the person at the top. I’ll post more on this issue in forthcoming blogs.
I sat as part of a four man panel discussing the impacts of social media networking for business in Manchester tonight. I made three key points. 1) Fad or Trend. Social media networking is a trend. In the same way that vinyl went to cassettes, then to CD’s, then to MP3′s. Traditional methods of networking are also transitioning. 2) The expecatation economy. Buyers are harrassed, time poor and stressed. Time is now a precious resource, more precious than Gold. Interruptive methods of marketing just aren’t working, in fact, they are having an opposite effect of turning buyers off. Social media networking allows you to have a different type of conversation direct with a key stakeholder, bypassing traditional gatekeepers. 3) ROI. We’ve all got our eyes on a good return, no more so, than now.
Social media networking requires human capital investment, more than financial investment. The metrics – right now – aren’t as clear as some other financial driven investmens business is more used too, howeve the halo effects on your brand or personal reputation can be enormous. I met a person tonight that saw me speak a year or so ago, off the back of my talk, it motivated her to look at a piece of business a different way. It resulted in a £1M contract for her, which I’m delighted about.
She now thinks totally differently about our brand and has become an advocate, social media can amplify that message. Powerful stuff. My underlying point was, ignore it at your peril. The world is moving on, like black and white TV’s turning to colour. Be sure you’re deploying a listening strategy at the very least, or talking to someone who can help get you started. If anyone would like my free guide to Twitter, please follow me on Twitter
here and send me a request.
“Taking it one month at a time.” That’s how Deputy Governor of the
Bank of England -
Charles Bean - described the monetary policy committees approach to the economy whilst speaking to business leaders in Manchester today. I (lucky me) was sat next to him over lunch and was able to ask questions of him relating to interest rates, the pound and how he ended up in the deputy Governors chair. What struck me was that he is a down to earth fellow, very clever and passionate about what he does for a living (good job). Today’s talk is part of a nationwide offensive the bank are undertaking to inform business about how quantitative easing (QE) process is going. There were a lot of charts to understand, however the underlying message was that it may take another nine or so months to fully flow through the system. Learning from the Japanese banking crisis, Bean explained that the Bank had been been procuring private sector assets, rather than just pumping currency into the economy. Worringly though, the Banks performance can only be as good as the political party driving them. There is an underlying issue of the huge public debt we have, inflation and inevitably how all that is being done today is going to get paid for. Bean ducked my question on which political party might be best to lead the country out of this, of course he has to, to stay independent. On the whole, a thoroughly enjoyable lunch and rather excellent to be sat next to one of the guys that pulls the levers in the economy. This Mr. Bean looked well in control.
Swine flu is gathering momentum. The media continue to hype it up to the point of pandemonium. Nevertheless the facts are there, it is spreading. Is there a risk from
Swine flu to business? Yes there is. As with any viral pandemic, if it leads to large numbers of people contracting it, then the risk is, people aren’t in work and productivity or service suffers. However, in todays connected world there is no reason why people who have a virus or are in direct contact with someone who has the virus, can’t work remotely. In fact, if you have any disaster planning in place, you will already have the technology and people in situ to allow people to do this. Think about it. If you have one central office with no homeworkers, you’re risk of impact is high. A distributed workforce may dramatically reduce any impact that any pandemic or alternative disaster (such as terrorism) may have on your business. In my own business, around 28% of our employees are already remote workers, with a further 7% of employees able to work from with 24hrs notice (35% of available workforce). In the event of a major crisis, 88% of available staff could work from home and be hooked in via broadband if equipped with laptops. You have to think about this stuff. With the future becoming increasing unpredictable, we all have to plan for the unexpected. If you want to find out about
Swine flu specificially, click
here.
It’s easy to settle for second best at the minute. It’s easy, don’t you know there’s a recession on? When times are tight, people are rewarded for saving, not spending. Normal rules go out the window and we revert to “survival thinking” and this can lead to easy compromises. These- in my view – can lead to mediocrity. The easy route, to make everyones life easier – in the short term – invariably can lead to mid or long term underperformance in products or people. So, don’t settle for second best, you’re better than that. Wait if you can, dig a little bit deeper, save a little longer and invest in something/someone that will offer you greater savings or returns in the longer term. There are too many mediocre businesses out there, live a little, take a few chances and you’ll see greater payback in the longer term.
