On behalf of one of my clients, I’ve been in commercial negotiations recently with a software vendor. We’ve been through a rigorous selection process to choose the software. We’ve prodded them, we’ve kicked the tyres on the software and we’ve almost got the T-shirt. All was going well and everyone was happy. Doesn’t sound like buying a software program does it?
Then I reiterated to the salesman, once again, that this project was critical to the client and we could not tolerate any slippage in the timelines as that would have severe repercussions to the client’s business. The salesman looked at me, eyeball to eyeball, very sincerely as salesman do, and said....
….“Don’t worry. We’ll go the extra mile to make sure there’s no slippage.”
I don’t know about you but when someone tells me not to worry, I worry. His response was about as comforting as Corporal Jones in Dads Army shouting “Don’t panic”.
And anyway what did he mean? What was this extra mile? Why was it an extra mile? Was it a mile that he wouldn’t have travelled if I hadn’t specifically pushed him to commit to travelling it? Needless to say, things went downhill rapidly from there.
Reflecting on it later, I realised that he was only doing what many businesses increasingly do which is the bare minimum to satisfy the customer. It seems that whilst corporate hyperbole is in overdrive and companies keep telling us how passionate they are about serving customers, this has been an inverse relationship with actually satisfying the customer. Fortunately the British public is getting better at complaining and demanding its rights from suppliers. But actually all we want as customers is that companies do what they say they will do efficiently, honestly and in a timely manner. If they did that they could save millions of pounds of branding, marketing and advertising spend telling us about their passion for software or hair care or pet food.
But I can’t see that happening any time soon so for the time being I will continue to ask suppliers to go the extra mile and to be on the safe side I will also worry. But, suppliers out there, please don’t tell me not to worry. To paraphrase Basil Fawlty, I don’t pay you to tell me not to worry.
Monday 27 September 2010
Monday 20 September 2010
Is Economics the new "Opium for the masses"?
The Pope was not just in town last week but just down the road from us at St Marys University College in Twickenham. The turnout according to the local press was good and mirrored the crowds seen in other parts of the country but I wonder if the press speculation about low turnouts was just good media management by the Church; setting low expectations which can then be surpassed. OK admittedly they haven’t exactly been successful in their management of the child abuse issues but managing a Papal visit must be more in their comfort zones mustn’t it?
Despite the efforts of Time Out promoting a Gay/Lesbian gathering at St Marys to protest against his views on education, faith and discrimination the event passed off without incident. Well, Twickenham isn’t exactly known for its public disorder. If a town can regularly accommodate 80,000 rugby fans without any serious disorder then an elderly man in a converted ice cream van being heckled by some Kylie Minogue fans isn’t much of a danger.
Meanwhile, I set off to Kingston to hear the views of the Chief Economist of Lloyds Banking Group, Trevor Williams. I’m not sure why I got up so early but for some reason I was just drawn in by the prospect; so it seems were the 100+ small business owners who were there at 7.30am for proceedings to commence.
This strikes me as odd because over the last two years most economists haven’t exactly impressed with their failure to warn about the credit crunch and infact you’d think as a profession they’d be only marginally less reviled by the public than those priests playing down the horrors of child abuse.
And yet the failures economists failed to predict are the reason that in many cases we want to hear their views even more. It’s almost as if we are so traumatised by events that we are clinging on in hope of any solution. I have to admit I don’t always understand what economists are on about but at the end of any economics seminar I always feel better, more wholesome even and almost cleansed. I know it’s probably good for me even if in the absence of comprehension on my part I have to rely on there having being passive osmosis of the information into my grey matter.
Economics is now headline news and will be for sometime to come; indeed many hitherto low key journalists like the irrepressible Robert Peston have made their names from the credit crunch. (As an aside, a contact of mine who worked with Peston in his early days as a cub reporter told me that “he was always a bit of a one”).
It was Karl Marx who said that religion was the “Opium for the masses” but judging by the public interest in GDP growth, interest rates and double dips I wonder if that mantle now falls to the subject of economics. What else can explain its fascination amongst the general public and look at how effective it has been in subduing an socialist uprising? Everyone just accepts that thing are bad and that we have to endure the pain.
Like religion, economics towers over most of us whilst many of us can take it or leave it but are nevertheless fascinated by it and hope that when we need it the men (almost invariably) who practice it will deliver the goods. But alas, whether you are a believer, atheist or agnostic on the religion front you have to accept that with economics it’s up to humankind to find the answers. Not even the ancient civilisations of Rome or Greece felt the need for a God of Economics.
Despite the efforts of Time Out promoting a Gay/Lesbian gathering at St Marys to protest against his views on education, faith and discrimination the event passed off without incident. Well, Twickenham isn’t exactly known for its public disorder. If a town can regularly accommodate 80,000 rugby fans without any serious disorder then an elderly man in a converted ice cream van being heckled by some Kylie Minogue fans isn’t much of a danger.
Meanwhile, I set off to Kingston to hear the views of the Chief Economist of Lloyds Banking Group, Trevor Williams. I’m not sure why I got up so early but for some reason I was just drawn in by the prospect; so it seems were the 100+ small business owners who were there at 7.30am for proceedings to commence.
This strikes me as odd because over the last two years most economists haven’t exactly impressed with their failure to warn about the credit crunch and infact you’d think as a profession they’d be only marginally less reviled by the public than those priests playing down the horrors of child abuse.
And yet the failures economists failed to predict are the reason that in many cases we want to hear their views even more. It’s almost as if we are so traumatised by events that we are clinging on in hope of any solution. I have to admit I don’t always understand what economists are on about but at the end of any economics seminar I always feel better, more wholesome even and almost cleansed. I know it’s probably good for me even if in the absence of comprehension on my part I have to rely on there having being passive osmosis of the information into my grey matter.
Economics is now headline news and will be for sometime to come; indeed many hitherto low key journalists like the irrepressible Robert Peston have made their names from the credit crunch. (As an aside, a contact of mine who worked with Peston in his early days as a cub reporter told me that “he was always a bit of a one”).
It was Karl Marx who said that religion was the “Opium for the masses” but judging by the public interest in GDP growth, interest rates and double dips I wonder if that mantle now falls to the subject of economics. What else can explain its fascination amongst the general public and look at how effective it has been in subduing an socialist uprising? Everyone just accepts that thing are bad and that we have to endure the pain.
Like religion, economics towers over most of us whilst many of us can take it or leave it but are nevertheless fascinated by it and hope that when we need it the men (almost invariably) who practice it will deliver the goods. But alas, whether you are a believer, atheist or agnostic on the religion front you have to accept that with economics it’s up to humankind to find the answers. Not even the ancient civilisations of Rome or Greece felt the need for a God of Economics.
Tuesday 7 September 2010
It's our party and we'll cry if we want to
Are we destined to be the organisers whilst others are the winners and is it a crying matter?
This article was first published in Aimzine www.aimzine.co.uk
After the intense effort for the fundraising and acquisition at Northbridge during June and July, it was nice to relax a little in August. We took off to Turkey to enjoy a resort with numerous swimming pools, tennis courts, and a bit of peace and quiet. Frisky, chirping crickets aside it was fairly peaceful. The rowdy England-shirted football supporters with scary tattoos we have encountered occasionally in resorts past were nowhere to be seen, partly because I suspect they thought that an England shirt was no appropriate attire for a football-lover, and partly because the majority of the people in the resort were German and Russian; none of which you particularly want to get into a football skirmish with.
To the delight of my children, I was dragged up on stage during the entertainment; the main purpose of which, that evening, seemed to be to humiliate the very people who had paid a not-inconsiderable amount of hard-earned cash to be there. In my case the humiliation involved the presenter asking guests to speak English and I was asked to say certain words such as water. How humiliating could that be I hear you say? Well the point was that when I pronounced the word as “war-ter” the presenter and his accomplices fell about laughing saying that I could not possibly be English because if I were I would pronounce it as “war-er”. I shall spare you the gory details of the non-stop hilarity and mirth that ensued for the rest of the show. Suffice to say that it’s a sorry state of affairs when “foreigners” (and I don’t mean “foreigners” in a Daily Express sort of way of course) not only speak better English than British people, but also feel that they can rebuke us for it.
It got me thinking that perhaps here was the ultimate example of something invented here (well not invented exactly but developed) that was now done better by others overseas. Is it the case that we can add the speaking of the English language to a myriad of other activities invented (or at least codified) here that are now done better by foreigners?
Quarter final specialists
It’s generally accepted, even by the French, that Wimbledon is the best tennis tournament in the world, and it’s not difficult to argue that the Premier League is the best football league. It even looks as if Lord Coe and Boris Johnson will contrive to make the 2012 Olympics a success.
So why can’t a Brit win Wimbledon? Why is the England football team destined to peak around the quarter finals of the World Cup? Infact why are we destined to be in the quarter-final (ie. the top eight) of almost everything, but never the winners? I don’t mean just sport. Let’s take for example GDP (6th), exports (9th), ease of doing business (5th), income per capita (8th) and so on.
The only activities we seem to go beyond the quarter finals in regularly are those where there are so few competitors that you reach the quarter finals simply by the fact of playing, such as cricket. Apologies to all Italians out there – I know that you have a cricket team but playing in Division 4 of the World Cricket League really doesn’t count in practical terms.
Anyone over 45 years old will remember a song by Barbara Gaskin (and if you’re over 55 then you may remember the original version by Leslie Gore) in which she sang “It’s my party and I’ll cry if I want to” and that seems to be quite an apt phrase for the country, because she also went on to bemoan that she had lost her Johnny. The question is that whilst we are good at organising the party, have we as a nation lost our winning Johnny and if so is it a crying matter?
That got me thinking about AIM and whether it also reflects this tendency. Has the LSE created an excellent platform only for overseas companies to be the winners on, and should we cry about it?
Not getting our share of the pie
Looking at the data it was interesting to see that although overseas companies account for only 38% of the number of companies, they represent 59% by value of the total market capitalisation of AIM. That’s not entirely unexpected as investors supporting IPOs often want to see overseas companies which are larger than a typical British company coming to market, to mitigate for the perceived additional risk in an overseas company. However, the 59% figure did surprise me because what started out as a junior market to provide a route for growing British companies has become a powerful marketing story that the LSE has used to increase its visibility in overseas markets. Over the years the LSE has run roadshows in many countries including India, China, Germany, United States, Sweden and Norway. This marketing has been a success if you judge it by the overseas companies quoted on AIM and is undoubtedly good not just for the LSE but also for London’s reputation as a financial centre.
As well as promoting AIM to overseas companies the LSE has also made advances in extending the AIM brand overseas. Following its 2007 acquisition of Borsa Italiana the LSE launched AIM Italia which now provides a quote to ten companies. Also, in May 2009 Tokyo AIM, a joint venture between the LSE and Tokyo Stock Exchange obtained its license, though whilst a number of so called J-Nomads have been approved the market still awaits its first AIM-quoted companies.
Does it matter that AIM London is increasingly becoming an overseas company market or should we be pleased that this is another British market leader in the making? Well if it brings business to the UK then it can’t be a bad thing as long as investors are happy to provide the funds for such companies to obtain their quote. On the other hand, we have seen over the last two years that the strategic options for growth companies in the UK have been limited, partly by reduced bank lending, partly by the growth of the equity gap ie. the disappearance of funds for second round growth capital, and now by the planned downsizing of regional development agencies. Are the options for smaller British companies limited further by AIM effectively outgrowing those companies and moving away from what it was originally intended to do? If so is there another way to assist growing British companies?
Regional Stock Exchanges
A discussion that has gathered momentum over the last twelve months is the re-establishment of regional stock exchanges. This movement has grown from the regions but has also garnered support from some politicians and in July the Business Secretary Vince Cable launched a consultation paper for views on whether regional stock exchanges could be made to work successfully.
Supporters of this idea claim that such stock exchanges will allow investors to reconnect with local companies, as well as giving entrepreneurs the ability to raise funding from investors with which they have some connection rather than investors a long distance away. However, even ardent supporters accept that the regional exchanges would not be bricks and mortar entities, but virtual in nature.
But these supporters overlook investor trends over the last 10 years. The use of the internet has made share dealing a frequent activity for many investors. Moreover the increased number of overseas companies on AIM and also the globalisation of many apparently British companies means that investors seem to have no fear about investing in companies in which they have little chance of seeing the operations and may only see the management once a year at the AGM. With AIM already suffering from limited liquidity, fragmenting that liquidity by having regional exchanges can’t be in anyone’s interest.
Supporters also overlook a recent example of a regional stock exchange which was funded by public money through Advantage West Midlands. Investbx launched in Birmingham in 2007 with the aim of creating a market for companies in the region. Three years later it has just three companies on its market. This might be down to the credit crunch and economic downturn but I expect that part of it is that investors just don’t see a need for it. It also perhaps illustrates that allowing the private sector to make decisions on innovations such as new stock exchanges might lead to better decision making than leaving it to public funds to drive such decision making.
So, yes let’s recognise that in the UK we might have lost our winning Johnny but we have little to cry about as we are actually quite good at creating and organising things. However, as for regional stock exchanges let’s not get carried away and expect that we can make a success out of ideas that are fundamentally flawed because they address no specific need.
(c) Ash Mehta 2010
This article was first published in Aimzine www.aimzine.co.uk
After the intense effort for the fundraising and acquisition at Northbridge during June and July, it was nice to relax a little in August. We took off to Turkey to enjoy a resort with numerous swimming pools, tennis courts, and a bit of peace and quiet. Frisky, chirping crickets aside it was fairly peaceful. The rowdy England-shirted football supporters with scary tattoos we have encountered occasionally in resorts past were nowhere to be seen, partly because I suspect they thought that an England shirt was no appropriate attire for a football-lover, and partly because the majority of the people in the resort were German and Russian; none of which you particularly want to get into a football skirmish with.
To the delight of my children, I was dragged up on stage during the entertainment; the main purpose of which, that evening, seemed to be to humiliate the very people who had paid a not-inconsiderable amount of hard-earned cash to be there. In my case the humiliation involved the presenter asking guests to speak English and I was asked to say certain words such as water. How humiliating could that be I hear you say? Well the point was that when I pronounced the word as “war-ter” the presenter and his accomplices fell about laughing saying that I could not possibly be English because if I were I would pronounce it as “war-er”. I shall spare you the gory details of the non-stop hilarity and mirth that ensued for the rest of the show. Suffice to say that it’s a sorry state of affairs when “foreigners” (and I don’t mean “foreigners” in a Daily Express sort of way of course) not only speak better English than British people, but also feel that they can rebuke us for it.
It got me thinking that perhaps here was the ultimate example of something invented here (well not invented exactly but developed) that was now done better by others overseas. Is it the case that we can add the speaking of the English language to a myriad of other activities invented (or at least codified) here that are now done better by foreigners?
Quarter final specialists
It’s generally accepted, even by the French, that Wimbledon is the best tennis tournament in the world, and it’s not difficult to argue that the Premier League is the best football league. It even looks as if Lord Coe and Boris Johnson will contrive to make the 2012 Olympics a success.
So why can’t a Brit win Wimbledon? Why is the England football team destined to peak around the quarter finals of the World Cup? Infact why are we destined to be in the quarter-final (ie. the top eight) of almost everything, but never the winners? I don’t mean just sport. Let’s take for example GDP (6th), exports (9th), ease of doing business (5th), income per capita (8th) and so on.
The only activities we seem to go beyond the quarter finals in regularly are those where there are so few competitors that you reach the quarter finals simply by the fact of playing, such as cricket. Apologies to all Italians out there – I know that you have a cricket team but playing in Division 4 of the World Cricket League really doesn’t count in practical terms.
Anyone over 45 years old will remember a song by Barbara Gaskin (and if you’re over 55 then you may remember the original version by Leslie Gore) in which she sang “It’s my party and I’ll cry if I want to” and that seems to be quite an apt phrase for the country, because she also went on to bemoan that she had lost her Johnny. The question is that whilst we are good at organising the party, have we as a nation lost our winning Johnny and if so is it a crying matter?
That got me thinking about AIM and whether it also reflects this tendency. Has the LSE created an excellent platform only for overseas companies to be the winners on, and should we cry about it?
Not getting our share of the pie
Looking at the data it was interesting to see that although overseas companies account for only 38% of the number of companies, they represent 59% by value of the total market capitalisation of AIM. That’s not entirely unexpected as investors supporting IPOs often want to see overseas companies which are larger than a typical British company coming to market, to mitigate for the perceived additional risk in an overseas company. However, the 59% figure did surprise me because what started out as a junior market to provide a route for growing British companies has become a powerful marketing story that the LSE has used to increase its visibility in overseas markets. Over the years the LSE has run roadshows in many countries including India, China, Germany, United States, Sweden and Norway. This marketing has been a success if you judge it by the overseas companies quoted on AIM and is undoubtedly good not just for the LSE but also for London’s reputation as a financial centre.
As well as promoting AIM to overseas companies the LSE has also made advances in extending the AIM brand overseas. Following its 2007 acquisition of Borsa Italiana the LSE launched AIM Italia which now provides a quote to ten companies. Also, in May 2009 Tokyo AIM, a joint venture between the LSE and Tokyo Stock Exchange obtained its license, though whilst a number of so called J-Nomads have been approved the market still awaits its first AIM-quoted companies.
Does it matter that AIM London is increasingly becoming an overseas company market or should we be pleased that this is another British market leader in the making? Well if it brings business to the UK then it can’t be a bad thing as long as investors are happy to provide the funds for such companies to obtain their quote. On the other hand, we have seen over the last two years that the strategic options for growth companies in the UK have been limited, partly by reduced bank lending, partly by the growth of the equity gap ie. the disappearance of funds for second round growth capital, and now by the planned downsizing of regional development agencies. Are the options for smaller British companies limited further by AIM effectively outgrowing those companies and moving away from what it was originally intended to do? If so is there another way to assist growing British companies?
Regional Stock Exchanges
A discussion that has gathered momentum over the last twelve months is the re-establishment of regional stock exchanges. This movement has grown from the regions but has also garnered support from some politicians and in July the Business Secretary Vince Cable launched a consultation paper for views on whether regional stock exchanges could be made to work successfully.
Supporters of this idea claim that such stock exchanges will allow investors to reconnect with local companies, as well as giving entrepreneurs the ability to raise funding from investors with which they have some connection rather than investors a long distance away. However, even ardent supporters accept that the regional exchanges would not be bricks and mortar entities, but virtual in nature.
But these supporters overlook investor trends over the last 10 years. The use of the internet has made share dealing a frequent activity for many investors. Moreover the increased number of overseas companies on AIM and also the globalisation of many apparently British companies means that investors seem to have no fear about investing in companies in which they have little chance of seeing the operations and may only see the management once a year at the AGM. With AIM already suffering from limited liquidity, fragmenting that liquidity by having regional exchanges can’t be in anyone’s interest.
Supporters also overlook a recent example of a regional stock exchange which was funded by public money through Advantage West Midlands. Investbx launched in Birmingham in 2007 with the aim of creating a market for companies in the region. Three years later it has just three companies on its market. This might be down to the credit crunch and economic downturn but I expect that part of it is that investors just don’t see a need for it. It also perhaps illustrates that allowing the private sector to make decisions on innovations such as new stock exchanges might lead to better decision making than leaving it to public funds to drive such decision making.
So, yes let’s recognise that in the UK we might have lost our winning Johnny but we have little to cry about as we are actually quite good at creating and organising things. However, as for regional stock exchanges let’s not get carried away and expect that we can make a success out of ideas that are fundamentally flawed because they address no specific need.
(c) Ash Mehta 2010
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