The Attributes of a Great Finance Director

Have you just been promoted to Finance Director?
Or perhaps this is your career ambition for the future?

If you’ve made it, then congratulations for completing your studies, and your training, and for landing your great new role. If you’re not there yet, then keep at it and you will make the grade in no time at all!

So, when you land that Finance Director appointment, what is likely to be on your mind

  • Do you need to impress and deliver – fast – but you’re not yet sure how the place ticks?
  • What about your team? Do you know the personalities and how they fit together? Or maybe you need a new team?
  • Are all eyes on you? Perhaps some of those eyes are waiting for you to trip up?

I know how you feel. I’ve been there.

I too have worked my way up through the ranks having originally passed my professional accountancy exams back in 1997. It was a lot of number crunching back then and the environment was much different to the rarefied atmosphere of an FD. As my career progressed I found that I was spending less time working with other finance professionals and more with people from different walks of life. However, there was always that security of working within a finance team. There was always The Boss to turn to for advice, guidance and support.

Then came my first day as a Finance Director: I didn’t realise that the step change would be so significant. Although the technical demands of the role were no more demanding than before the environment was totally different. None of my peer group had any finance experience, everyone was looking to me for leadership and there was no Boss to provide support.

I confess that it was tough. I enjoy being out of my comfort zone, as it is a great way to grow, but having a support network would have helped me to grow even faster.

I know and understand the challenges. This is where the fun and the pressure, and the rewards really start. I know that you want to do your very best.

Get it right and you’ll be rewarded well. Possibly with share options or a decent pension or more.

Get it wrong and you risk slower progression, stress and missed opportunities. Worse case scenario: You fail your probationary period and leave with a damaged CV.

So what are the options for success?

Of course, you could just wing it. But do you want to take your stress home with you each night? Agreed; the worse-case-scenario probably won’t happen – but do you want to take the risk?

Or you could discuss your issues internally with your colleagues. I know that worked for me in the past, but only before I was an F.D. Do you really want to discuss your finance issues with the head of marketing or share your personal concerns with the CEO?

OK, so there are other professionals out there. When I first googled ‘coach’ and ‘mentor’ I got thousands of results. And, to be frank, I found it quite off-putting. The market seemed to be dominated websites about rainbows and tree hugging. To be honest, it isn’t any wonder that professionals such as you are cynical. I was too.

I know that you want to quickly understand what makes a great FD – from another FD – and you want to put that understanding into practice. You want a source of confidential advice and guidance that will unlock your potential and give you the inside track to success.

Here is what you need to.

Go to the box at the top-right of this web-page. The link will take you to a page where you can get free report:

The Ten Key Attributes of an Outstanding Finance Director that you need to emulate if you want to be successful

Or, if you’re already committed to working with a professional Finance Director to give your career a boost, then get in touch and ask for meeting to explore your options – free of charge.

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How to be successful in business selling to retail

I’ve spent a lot of my business life working in and around consumer goods companies.  Now, the FMCG world is an interesting place, dominated by the uneasy relationships between the big retailers and the smaller suppliers.

Over recent years the situation has become even more polarised, with the retail giants taking and even more dominant place on our high-street, as this table shows:

1960 – Independents 60% / Supermarket 20% / Co-ops 20%

1980 – Independents 20% / Supermarket 60% / Co-ops 20%

2000 – Independents 08% / Supermarket 85% / Co-ops 07%

2010 – Independents 05% / Supermarket 90% / Co-ops 05%

In contrast to this (and putting aside the giants such as unilever) the business landscape on the supplier side has been moving towards ever smaller firms.  With barriers to entry falling, more and more budding entrepreneurs are starting their own product companies in order to turn their pipe dream into a revenue stream.

These start-ups quickly find that working with retail can be a logistical and financial challenge as the retailer’s methods are designed to extract the maximum profit for themselves, whilst passing all the risk back to their suppliers.  In terms of working capital, the game is so one-sided that some retailers have become banks yet the suppliers have to resort to accounts receivable factoring.

However, help is at hand.  With the right knowledge and processes it is perfectly possible to profitably sell to stores that dominate the high street.  If you know how retail works then improving your cash flow can be easy.  As always, success for business relies on understanding the rules of the game and constructing the business processes to match.

That is why I’ve created a free report:

The Seven Secrets to Working with Retail – What you need to know to protect your margins and stay sane

This special report is designed to give an insight into how the relationship works, and give some useful tips on how to make it work for you, the supplier.

Click the link and get your copy.

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Be the blade of grass

Even this doesn't stop a blade of grass

So, I’ve been mowing the lawn this morning and it got me thinking:

Nobody told each and every one of these blades of grass to grow so tall and green – they just did it – and what a great job they have done too!  So why is it so difficult for a human being to take the actions required to be as successful as a blade of grass?

The answer is that the blade of grass doesn’t know any different.  It is 100% committed to being the best blade of grass it can be.  There are no questions, no doubts, and no alternatives.

I’ve just been all over the lawn and sliced the top off each and every one of those blades of grass but it will do nothing to dampen their resolve.  They will keep growing.  Even the snow and cold temperatures of this winter have made no difference.  I’ve even tried covering the lawn in weed barrier, concrete, pebbles and decking.  Whatever I do, a blade of grass will find a way through to reach for the sun.

The only reason that each one of us is not as successful as we can be is because we have not yet got that unshakable 100% commitment to reach our full potential.  All it takes is that unconquerable believe that we can be a success and nothing will stand in our way.  Like the blade of grass we may find ourselves cut down but we just get up and keep growing – because we know of no other option.

Everything will fall into place if we just learn to be that blade of grass.

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Company Valuation Methods – You Need to Plan Ahead

There comes a time in the life of many a small businesses when the owner wants out.  There can be a variety of reasons; retirement, the call of a new opportunity or simply boredom.  This is the point where the owner calls in his accountant and asks that dreaded question “How much is my business worth?”

The accountant, more often than not, will have to explain that there isn’t a quick an easy answer.  That there are so many conflicting valuation methods, each of which gives a different result.  Of course, none of these will satisfy the frustrated owner who will quote the story of his nephew who made a fortune selling his six-month-old dot-com.

So why is it so hard to value a business?

Let’s start by looking at some of the usual methods used by accountants:

Net Asset Value:  This simply takes an open market or replacement valuation of what assets the business owns, less any liabilities.  Basically, it represents what could you get for the factory, or the shop, or those old vans outside.  Not very exciting but easy enough to work out.  Even then, it can be misleading.  A potential purchaser may look at your inventory and conclude that you’ve got too much of the wrong stuff, for example.

Discounted Cash Flow:  This is a lovely one for the spreadsheet jockeys.  Take the future ongoing cash flows that the business will generate and discount them to a net present value.  It is a “return on investment” calculation.

Dividend Basis: I’ll skip this as it is irrelevant to an SME – and almost irrelevant elsewhere as it ignores the value of undistributed profits retained in the business.

Price/Earnings multiple:  This is the fun one and the most popular.  Take the profit of the company, adjust for any one-off issues, and multiply by a PE (price to earnings) ratio.

Now, PE ratios can vary enormously.  Smaller businesses often have PE ratios of around 3 to 5.  Larger businesses can have PE ratios of maybe 12.  Ratios also vary by sector and by country.  There are huge teams of people in The City calculating and analysing these ratios in order to figure out how to value a business – and they have been arguing about it for years.

So, the most popular method of valuing a business is to take the profit and multiply it by a huge poorly defined fiddle factor.  Why is that?

The reason lies in the fact that valuation methods start with accounting measures based on an internalised, introvert perspective.  The classic accounting mistake of knowing the price of everything but the value of nothing leads to the need for a huge self-defined multiplier.

As a business owner you need to be looking outwards.  If you can understand why PE ratios vary then you can start to manage them as part of your business strategy long before you want to sell up.  You can also use the reasons behind PE ratios to seek out potential buyers.  Businesses are bought for very different reasons to why they are sold, so let’s look at some example motivations that may push up the PE ratio:

Buying Talent:  You’ve got a great team – and great connections with outside suppliers – but, because your business doesn’t have enough funding, they are not achieving what they could.

Buying lack of Talent:  You may have potentially a great business but you’re doing a bad job of running it.  Someone may think they can do a much better job than you.

Supplier security:  Your business may be a key part of the route-to-market for one of your suppliers.  They may buy you in order to secure that chain.

Customer security:  As above but the buyer is the other side of you in the chain.

The above four are not major influencers.  Talent can be obtained elsewhere, supply chains can be rebuilt and, if you were really that bad, you would probably have gone bust anyway.  Let’s look at four more:

Complementary product:  Another company may be envious of your undersold product.  They may be able to push your product through their existing distribution network and customer base.  You may be selling 10k units a year in the UK but the market in the USA may be for 100k units.

Complementary channel.  Another company may be envious of your underutilised distribution network, customer base and relationships.  They may be able to push their existing products through this route to market.  Your special relationships may be bringing in £50 net profit for each of your customers.  However, another company may be able to use this channel and make £500 per customer.

Intellectual property:  Do you have IP that can be applied to other products and markets?  This could be your most valuable asset.

Growth potential of your marketplace: Take two markets.  The first is expected to grow at 10% per annum for five years.  The second will shrink by 10%.  The 5-year NPV of the first market is 40% higher than the second.  The PE ratio of businesses in those different markets will vary by the same proportion.

This second group of four are the real gems.  They indicate that you have a scalable business.

The first and third are interrelated – you will have to have protected any IP in your product for someone to prefer buying you rather than just copying you.  The second and fourth are also interrelated as they are the key drivers behind ultra-high PE ratios on dot-com and social media businesses.  Your sleepy little business may be just what someone is looking for.

For completeness, I’ll cover a couple more:

Rival – buying market share.  Although, in effect it is a special case of the complementary scenarios.

Rival – preventing a third party.  A rival may buy you simply to prevent a third party from carrying out the four strategies listed above.

So, the lesson for you entrepreneurs is that there is a methodology for maximising your potential PE ratio:  Focus strategically on building a strong customer network, protect your IP, and operate in a growth market.  Do that well and you can create massive value that can be unlocked when you sell.

Any bad news?

Well, yes there is.  There are factors that can reduce a PE ratio which you need to watch out for.  Of them all, the biggest factor that can depress the PE ratio of your business is you.

Yes, you read that right.  Potentially, you are the biggest handicap to getting a good price for your business.  To diagnose if you are part of the problem or the solution just think about these questions:

  • Are you entwined with the business?
  • Are you the brains behind it?
  • Can nobody else make a decision without your input or approval?
  • Would the place just collapse if you didn’t turn up?

If you answer “yes” to these questions then your business may be worthless without you.  This is why, as you grow your business, you need to put in place the right people to whom, and structures through which, you can delegate so that you can detach yourself when the time comes.  In the words of Theo Paphitis being interviewed for EnCountry:

“You could be the best salesman in the world.  You could be the most creative person.  If you can’t scale you business then it just becomes a cottage industry.  You’ve got to be able to scale.  To scale you need to find the right people to work with, to be able to give responsibility, delegate, and when do that then you really do have a business that is scalable.”

Scalable and sellable, Theo.

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Barclays – Taxation and the need to engage

The banks are in the news again.  This time Barclays is being publicly berated for supposedly not paying enough tax.  The headline on BBC Breakfast made reference to Barclay’s “Offshore tax arrangements” in a clear attempt to leverage the anti-bank feeling and grab attention. Online, in a more detailed story, the BBC did give a slightly more balanced opinion and quoted the real figures

So what is the issue with Barclays’ tax bill?

Barclays is an international company. All international companies operate via local subsidiaries, each of which makes corporation tax payments to the government of the country where they reside.  International companies also have a head office located in the country of incorporation, or residence.  Invariably this large head office function, which guides and administers the group as a whole, has no revenues of its own – so makes a loss.  The group as a whole will report the sum total (consolidated results in accounting terms) of all its worldwide entities including the taxation paid by each subsidiary.  It will also pay its own local taxation on any profits made in the local country.

Barclays is no different from any other international company.  It operates in fifty countries and territories around the world, and it is liable for corporation tax in each of those countries.  It also has a large UK-based head office function that costs about £750M to run. Making a comparison of the UK-only corporation tax figure to the worldwide profit figure is complete nonsense.  The worldwide corporation tax figure is £1.5 billion and represents 25% of the worldwide profit.

The single-figure percentage quoted by the press is a deliberately misleading, headline grabbing, distortion designed to simply gain attention.

All around us are businesses that are globally owned but have local operations.  For example, EDF Energy, Ford and Microsoft to name but three.  Each one of these organisations pays local corporation tax on the local profits.  Ford, for example is US-owned but will have to pay corporation tax to the UK government for any profits made in the UK.

If you think Barclays should pay all it’s £1.5Billion international tax bill to the UK government then you have to accept that Ford, GSK, Vauxhall, IBM etc.  should pay all their UK tax to the US government instead.

However, EDF Energy, Ford and Microsoft etc. are not being hauled across the coals when some of them are much better at avoiding tax than Barclays.  For example, why isn’t anyone making a big issue about how Microsoft, Dell etc all operate their UK businesses out of Ireland in order to avoid paying UK taxation?

The issue for the banks is that the press, the politicians and the pressure groups are massively more advanced in their communication skills.  Each time I see a banker on TV or read a city press release I squirm at the naivety of it all.  This current fiasco is just another example of the banking community’s total incompetence at the art of communication and managing the message.  Barclay’s response to this storm-in-a-teacup has been a poorly worded and inaccurate press release along with a financial results document with the real tax figure buried on page 82 – and it is a very boring, technical document.

The banks still don’t understand that there came a point in late 2008 when they became public property – both literally and metaphorically.  What they needed to do was wake up to the looming 21st century, understand that the game has changed, embrace their obligations to society, and learn how to engage.  What they did instead was hide.  Staff were told to remove all reference to their employer from any social media and not tell the public where they worked.  They shut themselves away in their glass towers and hoped that it would all blow over.  Even now, they still look surprised each time they come up for scrutiny.  They struggle to convince us that “they are local and they care” but the imagery is so last century – who really wears neck scalves?

Imagine instead a world were each local bank had a local facebook page that engaged with and commented on local issues.  That “liked” other local businesses and made a made a real contribution to society through open communication.

If they could do that, get their head around the 21st century social media world, take command of the message rather than being it’s victim, then they might start to get some better press.

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Project Merlin – Why did it take so long?

On the 9th February, the banks and the government signed a lending and bonus deal.  Under Project Merlin, banks will lend about £190bn to businesses this year – including £76bn to small firms.  There has been a lot of talk has been as to why it took so long to broker the deal.

To answer that, we have to go back in time to late 2008.

The phrases in the news are “Credit Crunch” and “Toxic Debt”.  The banking system is in serious trouble.  They’ve been taking too much risk, making loans that they should not have made, and now the bad debts are pushing them towards bankruptcy.

The chairman of the treasury committee, John McFall, in its second report on the crisis, said it had been caused largely by the banks’ own reckless behaviour.

“Bankers have made an astonishing mess of the financial system,”

“The culture within parts of British banking has increasingly been one of risk-taking, leading to the meltdown that we have witnessed”

A BBC investigation at the time had this to say about HBOS – the worst but not the only offender:

Following the Halifax merger, salesmanship predominated and executives were incentivised to expand the loan book without, it now seems, the normal checks and balances.  The merged banks risk management and credit checking processes struggled to keep pace with its rapid growth.

One former relationship manager said: “They didn’t have their risk management infrastructure in place at all. They behaved in a very reckless fashion. Nothing was done properly.”

Some of the worst excesses seem to have occurred in the area of impaired and high-risk assets, bad debts and provisioning.

“The bank had an ad hoc approach to this whole area,” said one ex-relationship manager.

For example, Bank of Scotland Corporate, HBOS’s corporate lending arm, had a policy of continuing to lend to companies which other banks would have recognised as insolvent and put into administration.

On some occasions, it is claimed the bank was told by appointed advisers that a corporate customer was technically bankrupt and should have been put into administration with the bad debt taken as a loss on the bank’s bottom line. But the bank still kept the businesses afloat.

Now let us roll the clock forward – two key changes have taken place.

  1. The banks have changed their attitude to risk.  They take a more prudent approach to lending and are less reckless in their behaviour.  I cannot find a single blog or news report that says that this is a move in the wrong direction.
  2. The economy has slowed, raw material prices have increased, and consumer spending is down.  The risks to businesses, and the likelihood of company failures, have increased.

Either one of these changes would mean that a business venture that had an element of risk may not get a loan that, in the bad old days, it might otherwise have secured.  Together they multiply and mean that bank lending has to decrease in order to satisfy the government and society’s desire for less reckless lending.  Yet it seems that every week there is another report criticising the banks for not lending enough.

So, the banks have spent the last few years getting a double whammy of being continuously told to both reduce their lending (they’ve taken too much risk in the past) and increase their lending (businesses need to borrow to get out of recession).

Even the Federation of Small Business is in on the game:

To help small firms, the FSB is calling on the government to carry out a number of measures, including forcing the banks in which it had to bail out (RBS and Lloyds) to return to 2007 lending levels.

It is this contradiction, this illogical paradox, this strange idea that you can force someone to lend you money, that has caused the delay to Merlin.

Is it rational to sign an agreement that forces you to increase lending when every instruction and indicator says that you’ve no option but to do the opposite?

Now, here is the bit that everyone forgets:  Banks love lending money.  There is nothing that they would rather do than lend money.  It is their core activity and the way that they make a profit.  I’ve met more than my fair share of and bank personnel and every single one of them wanted to support the business using whatever they could:  Loans, overdrafts, invoice factoring etc.  They will happily talk about any and every method of lending money – but they need to take account of the risks.

However, I am sure that anyone reading this could use google to find a sob story of a small business that got turned down for finance.  Well, I can assure you that the bank would have loved to have made that loan – if the business model was sound, the plan stacked up and the cash flow positive.  If you cannot – or will not – produce this then the bank will correctly view you as a risk they cannot take.

If you come up with a sound proposition, pitch it with passion and authority, you will get the funding.  The attitude of the FSB is misdirected.  The answer is not to play the victim to the nasty banks but to educate and coach businesses into producing decent business proposals.

Instead of talking of forcing banks to increase lending the FSB should be talking of forcing businesses to come up with better business plans.

You could try sitting there in your jeans and telling the bank that the business is near bankruptcy, has run out of funds, and then ask the bank to increase its line of credit.  Your chances of success are very remote but, if you can pitch a convincing business plan in a professional and authoritative manner, it can be done.

I know because I’ve done it.

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No Plan Survives First Contact With The Enemy

Having met a few entrepreneurs over the years, it is interesting to hear their views on planning.  Some of which are quiet dismissive:

  • What is the point of planning, something different always happens
  • Planning just ties you down – these days you need to be quick to react and adaptable.
  • Accountants plan – I’m an entrepreneur, I make things happen.
  • Budgets are a waste of time, who can predict where we will be in a year.

The last two, in particular, were aimed at me.  I can understand their reasons for being sceptical as we do live in an ever-changing world.  How many people can say that the last five years of their lives have gone exactly to plan?  Did you think five years ago that you’d be reading this blog, which was brought to your attention by the power of social media?

The fact that plans change is widely recognised, and nowhere more so than in military circles.  Hence the phrase:

No plan survives first contact with the enemy

Although attributed to a number of great leaders, this phrase was the creation of Helmuth von Moltke the Elder who was the chief of staff of the Prussian Army for some thirty years.  He is widely regarded as one of the great strategists of the latter 19th century, and the creator of the modern method of directing armies in the field.  Unlike many entrepreneurs of today, von Moltke was not advocating the futility of planning.  He believed in the need for a process that defines how to react in the face of changing events.  He believed in the art of deep delegation whilst remaining true to the goal.  His theories have evolved over the years into the concept of Mission Command.

Rather than rewrite the work of those before me, I’ll quote the expert: Stephan Bungay:

The two core demands of mission command are to establish a high level of alignment by being very clear about the ‘what’ and the ‘why,’ and to grant a high measure of decision-making authority to relatively low levels of the organisation who are dealing with the question of ‘how.’ Rather than following detailed orders, an officer’s responsibility is to understand his commander’s intention and to take whatever action he deems necessary to fulfil it. If the situation changes – as it is expected to – the guide to decision making is the original intent.

This can be understood as a form of what we would today call ‘empowerment.’ It involves creating space for decision making by giving power to those who need it, and not allowing it to be withheld by those who do not. Decision levels should be set as low as possible. This also reduces the need for all but essential information to be passed up and down the chain of command, ensuring that decisions are taken by the competent individual with the most up-to-date information.

The combination of aligning everyone about ‘what’ and ‘why’ and pushing down decision-making results in an organization that can adapt rapidly in the face of uncertainty while retaining cohesion.

So, how does this help the modern entrepreneur?  Well, what it tells us is that the answer to an ever-changing environment is delegation and review.  Take this simple delegation example:

The owner of a business says to the office junior “Go to the stationers and get me a pack of six dark blue A4 folders like these” at which point he waves last month’s board pack in the air.

The office junior goes to the stationers and is told “I only have light blue, but can get you the dark blue in two days”

The office junior doesn’t know what to do.  The task was delegated by a communication of the “How”, with a little piece of “What”, but with no “Why”.  As a result, it is unclear which option is the best choice.  Now imagine if the owner had used one of these two phrases instead:

“I have a board meeting in four days time but I’ve run out of my favourite folders in our corporate blue.”

“I have a board meeting tomorrow but I’m out of folders.  I usually use dark blue but the colour isn’t that important.”

In both of these versions the “Why” and the “What” take priority leaving the office junior in a position to decide on the “How”.

The other half of the answer is about review processes.

One of the most well known tools is Deming’s Plan-Do-Check-Act Cycle.  It isn’t rocket science – it just formalises the process of saying “Oh that didn’t work, let’s try a different approach.”  The official version goes something like this:

  • Plan: Identifying and analysing the problem.
  • Do: Developing and testing a potential solution.
  • Check: Measuring how effective the test solution was, and analysing whether it could be improved in any way.
  • Act: Implementing the improved solution fully.

What I always recommend is that this simple process is embedded at all levels of the business.  By doing so, the organisation remains flexible and adaptive whilst keeping decision making at the lowest level.

What happens if you don’t follow these two rules?

Good delegation and review processes are essential yet, so often, they are something that the entrepreneur fails to achieve.  The business grows yet all the decision-making remains at the highest level.  The increasing quantity and complexity of those decisions results in a business that becomes slow to react and a founder with increasing levels of stress.  The owner then reaches the point where they try to exit the business but find they cannot do so as they have become intertwined and inseparable.

Some of the blame for the understandable dislike of planning must rest with the accountant’s obsession with the annual budgeting process as, in the real world, a twelve month cycle is far too long.  A modern business must adopt a process of creating rolling fifteen-month financial plans that are reviewed and updated every quarter.  However, you will be pleased to hear that my thoughts on that subject will have to wait for another blog post.

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National Apprentice Week

It is very appropriate that the final of Michel Roux’s Service should be followed by National Apprentice Week.  Although it is a bit of an overused phrased, we need to remember that the young people of today are the wealth creators of tomorrow.

I am personally very passionate about apprenticeships and non-university education streams.  I’ve always thought that the university route didn’t suit everybody and I’m not alone. Ann Watson, managing director of specialist engineering and manufacturing awarding organisation EAL has this to say:

“The last two years have seen a dramatic shift in the way Government has viewed apprenticeships. For too long now, this country channelled our brightest and best down the degree route, suggesting it was the only option. University become the gold standard for school leavers at the expense of our skills sector. Today, the situation has changed and a degree is no longer the guarantor of a job in the way it was 20 years ago. In the meantime, the skilled sector – for example manufacturing and engineering – is crying out for new blood and can provide life-long, engaging careers for students”.

So, what does the BBC make of  National Apprentice Week?  Well, the article on the BBC website starts with the headline “Vince Cable urges companies to increase apprenticeships” and continues with “The government is hoping UK firms will create 100,000 more apprentices by 2014, as Apprenticeship Week begins.”

Forgive me Mr Cable, but what good is urging and hoping?

OK, the article continues by saying “As part of that commitment the government is to make £1.4bn available for apprenticeships in 2011-12.” What isn’t mentioned is that this isn’t new funding but a £200M increase on the existing funding levels.  Nor is there any detail on the where, the when and the how?

Graham Snowdon, writing in the Guardian has this to say:

Apprenticeships are a hot topic now – from ministers to opposition MPs to the 20 or so senior businesspeople who recently put their names to a joint letter singing their praises, it seems nobody has a bad word for them.

Nobody except the small and medium-sized businesses that are supposed to be implementing such schemes, who complain that they are stymied from doing so by, among other things, obfuscating employment law and a shortage of funding to cover the training costs. For all the good words, a report last year showed that only 8% of employers in the UK offered apprenticeships, compared with around a third in Australia.

So, what positive action is the government taking to resolve these issues?

Well, Skills Minister John Hayes, who launched the Skills Strategy in November has gone and renamed everything:

Level 2 (GCSE level equivalent) apprenticeships will now be known as Intermediate Level Apprenticeships. Level 3 (A level equivalent) will become Advanced Level Apprenticeships and Higher Apprenticeships will remain unchanged. The UK Commission for Employment and Skills is also working with Sector Skills Councils to develop more Higher Apprenticeships (Level 4) frameworks.

I’m not sure that helps much, Mr Hayes.

The last words of the BBC article from Unite general secretary Len McCluskey were particularly poignant.  I could hear the echo of the of the Finniston Report of some thirty years ago that was so influencial on my own education and career choices.

“The government needs to make sure that funding is available to schools and careers services to show that there is nothing wrong with manufacturing.”

The thing is engineering – with all its facets from construction through manufacturing to software – is the most fascinating, fulfilling and enjoyable place to work.  Just stop for a second and look around you.  Take in the buildings around you.  Think about  your iPhone or Blackberry for a moment.  Ask yourself what skill, passion and professionalism got those airplanes into the air.

From the Pyramids to the iPod – it is all engineering.  The most creative and exciting way that man can stretch the limits of endeavour is through ‘making things’.  Some argue that the enduring mark of human civilization is in the art we have created.  I argue that it is in the unstoppable march of the technology around us.  Any young person who dismisses engineering is missing out on what I am convinced would be a fabulously fulfilling career choice.

So, Mr Cable and Mr Hayes, it is time to stop all this renaming, urging and hoping.  Take some real action to light a burning passion in the hearts of tomorrow’s wealth creators.

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Michel Roux’s Service – The Finale

What can I say, but what a fabulous close to such an excellent series?  I am referring of course to the wonderful Michel Roux’s Service. Which came to a close last night with a little twist at the end of the tale:  Michel didn’t hand out the two apprenticeships as he promised.  He produced three!

Those winners being:  Danielle, James and Ashley

Danielle Meenagh – who is just 19 – won the sommelier scholarship with the Hotel du Vin group in Winchester.

James Marvin – 24 – is now under Fred’s wing at Galvin at Windows.

Ashley Flay – now 21 – is working front of house at The Hyatt Regency in Mayfair.

Personally, I thought that Brooke was going to be one of the winners so I was very pleased to hear Fred offer her a place at his restaurant.  Her choice words of acceptance were brilliant – but if you missed them you’ll have to wait for the repeats or go to iPlayer to find out what she said.

It was clear from the noise on the internet that Ashley was a very popular choice.  Ashley, who left school at 14 with no qualifications save for an anti-social behaviour order, was initially ill at ease and out of his depth.  However, you could see during a scene at the country hotel in Dartmoor that this guy was a winner:  Michel Roux was left speechless and could only nod in agreement as Ashley gave a passionate speech to Nikkita imploring that she needed to change her limiting beliefs.

The thing is, up and down this country there are thousands of guys like Ashley. We just need to get to them, coach them, train them, and unlock their true potential.

To quote Michel Roux:

Ashley has epitomized exactly what this training is all about. He has proved to me and to everybody that it is possible.

So, where do we go from here?  Well, I know Fred has some interesting plans up his sleeve so follow him on Twitter (he is @fredsirieix1) to find out more.

Finally – Fred, I promise I’ll book a table very soon!

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Proactive Positive Laziness – Part Three

Let me tell you another story:

Many years ago I went to work at an organisation as a factory accountant (I love factories) for a technology company.  Part of the role involved the cross comparison of large tables of data to find discrepancies between the factory systems and the financial systems – Yawn!  My predecessor used to spend hours diligently working through the data.  She was very happy to do so as she believed that, as an accountant, it was right & proper to spend ages on boring work.

Not me.  There was no way I was going to do that.  It took hours!

I searched through all the functions in excel and found the answer – pivot tables.  A little bit of work with the data and a pivot table would tell me the answers I needed in minutes rather than hours.  The application of Proactive Positive Laziness saved me, and the business, quite a few valuable hours each month-end.  This, in turn, gave me more time to spend on the factory floor (I love factories) adding value to the business.

Interestingly, my approach didn’t sit easily with my predecessor as it went against her values and beliefs – working late on labourious tasks and missing deadlines was a virtue as it showed how committed you were.

Roll forward to a cold and dark winter’s afternoon at that international FMCG.  The client walks into my office with one of the accountants in tow.  He is frustrated at how long it is going to take the accountant to do a vital part of the year-end analysis.  He starts describing the situation but (and this bit he didn’t confess until months later) started to get very frustrated that I appeared to be taking little notice of him as I was tapping away on my keyboard.  Just at the point when he was about to have a ‘few choice words’ with me I turned my screen towards him and said:

“That is near enough the answer.  I’ve worked out the big numbers and, just scanning this column, you can see that the leftovers don’t look like they could make much difference.”

All I’d done was let loose my drive to find the shortcuts.  I’m not a rocket scientist but I get bored by repetitive tasks.  I’ve taught myself to think of numbers in terms of shape and size, and I’ll use every trick I can find to save myself the effort.

So, do you have an accountant or an accounts team that leave you feeling frustrated by missed deadlines?  Do the end results fail to deliver value and only deliver masses of figures that give you intellectual indigestion?

Maybe they don’t need to work harder but quite the opposite?  Maybe they need some training, mentoring and coaching to understand Pareto, learn a few tricks and change their values & beliefs about numbers?

If so, then get in touch – I’d love to help.

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