Network rail revealed a £34bn investment plan yesterday which will see London being able to be reached from Manchester in just over an hour. It will take up to ten years to sort out. Five in the planning, five in the building, (so don’t go booking your tickets just yet). I’m pleased about this. Access to the Capital city in such a short travel time will be good for the City region, it will expand the number of businesses who are prepared to locate here, you could even commute to London (if the cost stacked up of course) aswell as increasing the number of people taking day trips back and forth. Much still needs to be done of course, but in principle, this is good news. As the world gets smaller and smaller, peoples basic expecation is to be able to move around. It will open more doors, bring more opportunitiy and more GVA to the region.
The UK holiday industry is happy. The devalued pound has led to a boom in “staycations” (families holidaying here in the UK. One of the biggest static caravan site operators – Haven Holidays – has seen a sharp increase in its sales, up 38% vs. the previous year, good stuff. Inbound tourists from Europe are loving their cheaper UK holidays, particularly making London less expensive for international visitors (around 14.8 million people a year visit the capital). Ironically, visitor numbers overall to the UK are slightly down due to the global recession but those that do come are spending more with an estimated £16.3bn of sales being attributed to them. So, if you’re looking for a positive recession story, here it is! If feedback from my Greek taxi driver is anything to go by, mainland Europe is missing its annual migration of British tourists and their wallet spend to go with it. It’s a real opportunity to really reinvent the concept of the British holiday, let’s hope the industry really grabs it with both hands.
Corridor and spontaneous conversations can be fascinating, you can learn so much. Today I’ve had three. Three really good interactions, each bringing with it a perspective on how that individual sees the world and more importantly the business. The more open questions you ask, the more you learn and – of course – the more opportunity you have to drive your core leadership directions or principles. With time becoming even more precious, I’m really conscious that fewer and fewer interactions happen as people get busier and busier. It’s a real shame and as a reminder to self (and all), we mustn’t let them expire under the weight of work.
Bank lending is still falling according to the latest “Trends in Lending” report published by the Bank of England yesterday. Given the huge amount of
quantitative easing the bank has undertaken, money supply still remains relatively weak to businesses and consumers alike. It’s no surprise of course, everyone knows it and the figures are simply validating it.
When
Charles Bean, Deputy-Governor of the
Bank of England visited Manchester recently, he showed a really interesting chart which compared the cost of money to SME’s year on year. What money that was available, was potentially much more expensive than previous with interest rates being up to 9% higher than the year before, so what money is being loaned is considerably more expensive. At the higher end of the scale, larger businesses have been repairing their battle weary balance sheets by raising equity in the bond markets, some to repay bank debt.
Although the MPC are split around
QE and how much more to pump into the economy, it seems the wheels aren’t still turning anywhere near full speed yet. For businesses like my own, which require our customers to have working capital to invest in technology, the numbers aren’t great. The quicker lending eases, the quicker the economy will recover.
Retail sales received a small boost in July. The Office for National Statistics have reported a 0.4% increase in retail sales. Food sales were down 1%, non-food slightly up at 1.1%. Household goods had the biggest swing with a 4.5% jump in sales, all positive stuff. Or is it? We can’t ignore that the pound is over 20% weaker than at this point a year ago. Most household goods are imported, which means the value of the goods has to be higher (assuming that many of the manufactuers are linked to the Euro).
So, just measuring value can mask the problem of unit volume demand. You can increase value sales with lower volume when you have a devalued currency. There have been some positive indicators of late. I’m pleased about that. The wave of recovery will start when everyone gets some belief, we do need to keep our eyes on the numbers and retain some caution no doubt, however it’s good to see numbers going in the right way.
When did you last sit down and have a good think? Free of distraction. Wait, did you have to think about it? You wouldn’t be on your own if you did, it’s a consequence of the “information overload” society we live in now. Everything is done “on the fly,” time is precious, deadlines are looming.
Nevertheless, if you take time to think properly it can give you a major boost. If your workload is heavy, you get immersed in it, it creates pressure and you enter a downward spiral of pressure overload. Taking time to think can enable you to re-assess your priority for the workload to make it more manageable. Equally, if you have a problem, some quality thinking time is the way to tackle it. Granted, we can’t just take huge chunks of our time out of our diary, time and life just doesn’t always lend itself to that.
However, you can do yourself a massive favour by at least diarising whatever time you feel you can afford. Make it free of distraction, don’t try to think about too much, focus yourself on a specific problem or challenge and get it down somewhere to make it more rational. Prioritise outcomes and act on them. When creative thoughts get actioned, innovation follows.
Michael O’ Leary is taking his bat and ball home after announcing that Ryanair would be “quitting” Manchester airport. The decision will lead to around 600 job losses, nine routes and 60,000 or so passengers less travelling through the airport. So, is this good news or bad news? O’ Leary is renowned for his tough negotiating style and in Ryanair’s press release they use the word “refusal” to describe the response from Manchester airport to reduce their landing fees.
The airports MD – Andrew Cornish – was quoted as saying “they made us an offer we could refuse.” What’s evident is that O’ Learys view of the world doesn’t fit Manchester airports (which is uniquely owned by the Greater Manchester Authorities). O’ Leary is committed to trying to drive costs down and in order to do that he needs to be constantly marginalising all costs in his business (and his customers from time to time). Manchester airport are investing and want to stabilise fees on a per passenger basis to improve the airports international status.
The important principle is that you can’t get your own way all the time, you can ask – but you don’t always get. You can make an offer, it doesn’t mean that it will be acceptable to the other party. Beneath it all, O’ Leary is trying to bring down the cost of flying, you can see that and despite disagreeing with some of his methodologies, I admire his passion. For Manchester airport, they have an economic model which they need to achieve and if they believe in it, they should stand by it, I admire them too. Who will the biggest loser be? Only time will tell.
I appeared on BBC GMR (Greater Manchester Radio) this morning for a short slot devoted to the credit crunch, you can listen to it here (forward wind to 18 mins). It’s around two years since the credit crunch entered our lives and it has had a big impact on many businesses, whether through reduced demand, sterling devaluation, trade credit being squeezed, bad debt or time spent re-organising strategies or shape.
The French Finance Minister
Christine Lagarde I thought talked a lot of sense on Newsnight last night when she called for much better globalised regulation of banks and bonuses, it simply has to happen. I walked out of the BBC with my co-interviewee and I thought she made a great corridor point off-air, which was that many of the younger people that come into her hair salon are impatient for the recession to be over. They are restless and just want to get things back to normal (aren’t we all).
Driving to the office I thought about it more, in so much as they haven’t been in a recession before, they have no idea what to expect and therefore they may not see it as a barrier to do something. Those that have been therefore before may have pre-conceived ideas, behaviour or risk averseness. The Y generation just want to get on with things and they have the technology now to start businesses quickly, to spread the word via social media and to benefit from all the digital resources around them. So, come on you youngsters, do your bit, get entrepreneurial, help out, generate some ideas, do something new. The UK economy needs you.
TAT. For my readers outside of the UK, it’s a slang word we use for rubbish or poor quality. My headline is a play on words using TAT as an acronym for Time, Attention and Trust, the things that buyers are lacking most these days.
So what does this all mean? Firstly, interruption based marketing is become more and more irrelevant. Disturbing peoples working days or downtime is a sure fire way to turn them off of your company. Businesses have to think smarter and have to act in new ways to generate their sales leads. Secondly, communicating with an audience who increasingly see advertising as an intrusion into their precious time is becoming more complex as social groups divide and divide again, you have to be smarter.
Twitter is a great way of starting new conversations with new people. Thirdly, buyers are mistrusting of what you say and Corporate babble. You have to be transparent with clear values. Just look at the damage that Levi’s and GAP have inflicted on themselves recently with the revelations of the pollution their manufacturing facilities were causing African villages. Todays transparent world means Corporatewash is exposed. Acquiring new customers is turning into a fine art. So, when you’re spending money on the same old stuff you always do for customer acquisition, just stop for a moment and think T.A.T.
Another bleak announcement from the government today. 2.44M people now unemployed – or in other words – around 7.8% of the working population. Buried in the figures is the worrying statistic that 40% of 18-24 year olds and 71% of 16-17 year olds are unemployed. Not a great start for our young people (living on benefits).
Last week a young man knocked on my door selling household items door to door. He lived in Middlesbrough and had gone to his Job centre to find work, saying that he wanted to sell motorcycles. They advised him that he needed sales experience and sent him to this company who sold dishcloths and the like, in order to get some experience. I spent about half an hour talking to him and was really touched by the effort he was making to get a start in life and some experience under his belt. He had travelled away from home, was doing a really hard job (with loads of rejection) and not getting paid a lot for it. But, he had an end game.
So often, young people get unfairly stereotyped, consumerism and reality TV gives them a reputation of doing nothing and wanting everything. I was inspired by this young man, he will make it and I think a great example for other young people.
