Wednesday, 28 November 2012

Founders Thoughts: Double edged swords

When it comes to anything to do with the community, be it volunteering, charities, public services or social enterprises there is always a difficult equation to get right. As the services involved effect us all and are the backbone to our sophisticated society we simply cannot do without them, but funding them is (to some minds at least), akin to shredding money and throwing down the waste disposal unit.

There is no limit to what could be spent to help remedy such issues as poverty, crime, health, education and unemployment, hence any accountant is averse to there not being a cap on spending for them all. What price though should be put on these services when it is in all our interests to make them as effective as possible? I would argue that if we want the best of services we have to invest in them more if we are to ever hope to achieve a healthy, well educated society with no homelessness or unemployment.

Where our taxes get allocated is difficult enough without it being compounded by the knock on effects of a recession. How would you choose between homes, health or education? If you just chose to bankroll those three where would that leave our emergency services who have also suffered from massive cuts to the extent that all three are having to scrabble around for staff and some basic resources in order to function at all e.g. equipment not being replaced when it has reached the point of being unrepairable and there are even rumours of fire and ambulance stations closing.

"Why not make them charities?" said one person to me this week. While the ambulance and fire services could be turned into charities (we have the precedent with mountain rescue, air ambulance and the RNLI), I don't think we should, and especially not when it comes to the police! Even so, the difficulty in financing these services does not go away.

When cuts are necessary, I don't believe it is wise to make them by getting shot of staff and particularly not the front line staff as they are the nuts and bolts of any operation. Far better to reduce hours and enter into job shares so that no one need end up being made redundant. In some ways recessions are good for decision makers as it forces people to spend wisely, of it should do. It neatly highlights what the priorities are and what are the essentials to any operation to enable it to function; hence downsizing to a smaller office and pooling resources through collaborations as well as finding more economical suppliers all help.

Lessons in education

Some sectors are hampered in being able to share resources though due to what I'll call governmental rating systems e.g. education. Ofsted is necessary in order to ensure that standards of education are upheld but recently this has led in some instances to some underhand practises from some educational establishments in order to secure that only the most adept students are taken on so that their Ofsted rating never drops. I heard of some schools going as far as sending out invites to the parents of the most successful GCSE students to get them to switch schools for their A levels. Such practises are not new, but it does highlight the negative side of governmental ratings.

While it is quite common for secondary schools to share some facilities with middle and junior schools it is far less common for them to do the same with other secondary schools and colleges. Who loses out? The students. It's almost unheard of for councils to pool resources and although the health service does try to it's far more complicated when some hospital facilities are so specialised and totally impractical for other hospitals to borrow. You can hardly expect them to be able to loan out an MRI scanner as at any point it might be needed in an emergency.

Loaning facilities and equipment is possibly the only way to survive in these times of austerity while finances remain so limited. I would advise networking like never before to maintain good standards of service. It's something that most charities, volunteer and social enterprises are adept in and accustomed to. What remains concerning though is how they are currently being forced to think more and more about funding streams at the potential risk of neglecting service delivery because of the sheer amount of time it takes up.

in my opinion, overall profit should not be the goal and top priority of any service for the community, services should be. Nothing wrong with aiming to make them all self-sustaining, but let's be honest, if we want to live in a world where we all have full access to any and all the services any of us might come to need most services will need subsidising at some point. If we don't won't we be in danger of losing them and if that were to happen wouldn't the problems merely escalate? We are all participants and customers when it comes to community services. How much poorer our lives would be without them and how much more difficult ordinary life would be.

Most alarmingly I recently saw a report this week about how business sponsorship was stretched to its limit now. As I've said before, the same amount of money must be around somewhere from 10 years ago, it can't simply disappear - unless it was never there to begin with. I can only hope that is not true as we could end up undoing all that has been ethically good that we should be proud of. Our nation has worked extremely hard over the last 100 years to get this far with regard to improving the quality of life for everyone living here, it would be to our eternal shame to let it slip or go to waste as aside from all else it helps make our nation economically stable and well... great!

Wednesday, 21 November 2012

Article: Skills of the future

In the early 1980s I was involved in typesetting. Back then full colour screens and certainly pictures were not commonly available to most businesses; your business was considered advanced and state of the art if it had green and black screens instead of white and black, but at least floppy discs for storing information had arrived instead of cassette tapes. Mobile phones too were just being introduced and were heavy cumbersome things that few could afford and instead of Internet we had fax and answer phone machines.

It meant that everything that needed to happen had to be done at a much slower pace and in a much more manual fashion. Go back a little further in history and typesetting itself was a process of laboriously physically collecting each individual letter to make up words and sentences to produce a page of text - it was called hot metal as that's what the letters were usually made from. The skills required to run any operation in any industry were extremely diverse.

As technological advancement changes so skill requirements to enable businesses to function and survive do. Take as another example weaving and textiles; in the 19th century it was done by people working at home before the industrial revolution brought about mechanised processes. Whole ways of making, producing and functioning periodically change with the result that many manual skills get lost and forgotten. A wholly handmade pair of shoes made by a master cobbler is today regarded as an artisan product and the prices of them reflect the time and craftsmanship as well as the rarity of them in our use for five minutes and throw away modern world. They stand out as being different from what is commonly available precisely because they are not mass produced.

The question that crosses my mind is that by focusing on being able to produce things en mass and do things with ease are we in danger of losing out on many of the pleasurable things in life that enhance the quality of our existence? To just press a button to make things happen is hardly stimulating work and it can lead to all manner of problems if that button doesn't work as the mechanised process grinds to a halt and that then impacts on profits etc. In addition we might well be in danger of failing to develop a myriad of skills by becoming fixated with technology alone.

Today few people have knowledge of what is actually happen when a switch, lever or button is operated; they take it for granted that it will just work and that if it doesn't someone else will fix it. With many modern systems though there are no cogs to align, no wheels to grease, it is mostly down to knowledge of computers, electronics and electrics to kick start things again. 

The inherent problem with such sophisticated systems is that the more complex they are, the more points of failure they will have. It is hardly surprising that those who are particularly adept in computers, programmes and electronics are among the most highly regarded professionals of all due to their sheer usefulness in ensuring things work in our modern world. Certainly if you are involved in technology of any form you are unlikely to find yourself long-term unemployed compared to other aptitudes of skills. What though, does the future hold for those who are not computer orientated and what will the future hold for their skills?

There are of course many other areas which will never become industries of the past; from health care to education, from farming to construction and from plumbers to law enforcement. However the way in which they all work is becoming much more technologically reliant and that could prove to be a problem because if we do not equally value the non-technically orientated we could (and I would argue already are) missing out on the development of many other areas of skill which are not so heavily reliant on technology. 

A person can be taught things without the aid of computers, a better yield from crops can be achieve without them and as yet there is no substitute for the a person knowing by  through experience whether a person is ill or if they are trying to cover up a crime. There is great value from learning how to achieve things via different means, but in our push-button world we will soon not know how to?

Could we function if we had no technology now? Without any clear and viable alternatives to current energy sources which are finite, if the plug were pulled out so we had no electricity supply how would we be able to function at all? Such is the major pitfall of becoming so push-button reliant. That reliance even extends to our spare time and is already throwing up new problems with people simply not knowing how to socialise because they are continually plugged into a computer.

Technology at is best should always aid us, but it should never govern who we are, how we choose to function or what we do next. We should be commanding it and not be dictated by how it operates.

I recently read that children as young as 9 have 'better' (i.e. more advanced) phones than their parents and knew how to use every facility on them. I found that rather sad to reflect on because if the pace at which we work continues to increase, what time will they have to enjoy the planet that sustains their existence and what experiences could they be missing out on? New prejudices are already set to develop against those who are not interested in technology. Are we as a species about to embark on a split between one half of us becoming technophiles while the other half are manual workers. Many would argue we already are and it's certainly been a recurring theme of many a sci-fi story. Historically such differences in aptitudes have fed into the conflicts and been the basis for class systems. So in the future will it matter less how you are educated but matter more what you are educated in for you to make your way in the world?

The fact remains we need both brains and brawn in order to survive and progress, but my concern is that while I see plenty of hype and praise of all things technological, I see little by way of support for other skill bases which are the bare essentials to all of us being able to function at all. There are a lot of non-technical skills which are responsible for maintaining the real infrastructure by which we can have our wonderfully diverse structure. For this reason, while I am a fan of technology myself, I think we would be wise to invest more in ensuring we have future generations to still, farm, build, install electrics, look after our water supply, heal the ill and educate us all. To be blunt in my opinion, we cannot afford not to. 


Thursday, 15 November 2012

Research File: Seeking, searching and sourcing information

It seems a bit strange to me now that I haven't covered this topic already given I try to regularly run a Research File on here! Yes, you've got it the theme this time is research, but research for what - for facts, opinions and information - anything that helps us to make educated decisions. Decision making is always vastly improved by relevant research beforehand and here even opinion and the assumptions of others can prove very useful to know. What follows are hints, tips and suggestions about how to go about your research. 

There are two main categories of information which are useful to anyone, regardless of whether you are running and enterprise, a member of staff or looking for work which are: factual general information and opinions. 

Factual Information

Factual information can include financial details about a company you are thinking of trading with, some of which the company itself is happy to divulge through annual reports, but some records are also held by Company's House for some legal structures which will also conveniently highlight how many directors a organisation has had and how often they have changed. If they change regularly one has to start asking why as it can be an early indicator of possible ongoing problems and instability or it might be part of it's policy to make such changes. 

Golden rule - try in as far as possible to avoid making assumptions when fact finding. 

Other sources of information can come from following the leads from their own websites. Check out their recommendations, check their 'satisfied customer' list and if it's a local company with no website, ask  the local community and ask for them to refer you to 3-5 happy clients of theirs if need be. Then assess those contacts and their connection with the company.

Facts are actually quite slippery things as few things in life are categorically provable with absolutely no shadow of doubt. The more independent the source of information is, the better. Remember just as you will need to be adept in presenting your facts in a favourable light to win over people, so too do others! Facts are always subject to interpretation and a clever accountant can easily disguise the bear bones of what is actually happening so - buyer beware.

General facts are fairly easy to find, especially if you happen to be a person that people like to talk to. All manner of interesting information can be gathered via private conversations and the name of the game is to get people to be straight with you preferably by supplying you with written evidence where possible. Social media can help you to nail down information that you require via news stories and all manner of articles but remember they are all marketing tools in themselves designed to engage with you to follow them. This blog site is just such an example - no point lying about it!

Most important of all is to be clear about what is a fact and what is hearsay and opinion. A bank statement has factual information, a person telling you they've made significant profits this fiscal year is not.


Opinions give you the 'feel' for what will go down well. Aside from just asking individuals direct, you can gather information via surveys either conducted by yourself or by reading those run by others and published. However, be aware of who participants of surveys are and how big they are. Most surveys are limited to a few hundred people taking part in them so they might not be ideal or give a accurate picture of what you wish to know. Anyone who has conducted a survey will tell you that there is seldom a 100% return i.e. not everyone asked will take part. Surveys also vary in structure, some are detailed and ask for opinions while others are just a series of tick boxes so you will never accurately know the figures for people who dither between two options if the choices available are restricted. Remember too that certain personality types love doing surveys while other loathe them so I recommend that you take them largely with a pinch of salt unless they are asking directly for the participants to voice their views in their own words.

The opinions of others matters most when it comes to customers, clients and service users.  The best way to get that information will always be through normal channels of communication in written and verbal form. Don't forget though that colleagues and connections throughout the industry sector you are involved in are also extremely important, particularly when it comes to planning and development and in reaction to outside influences e.g. changes in the law.

Information research options

Most people in business are familiar with using computers these days and with browsing the Internet for things of interest to them, but how do you get the best results?
TOP TIP: Be clear about what you are searching for at the outset for the best results.

Suppose you want to look for a list of dentists. If you hook up to any search engine and type in the word 'dentist' you will find a mishmash of results from definitions of the word to dentist practices and job descriptions. It highlights the need for accuracy. The clearer the parameters for your search the better, the more detail for those parameters the better too. 

So if you want dentist practices in your area tap in 'dentist practices' followed by your county or town. Simple. However in business, you might want a full list with all the contact details of all those practices and that can take up a lot of man hours. This is why there are dedicated businesses who do nothing but research and will charge you a fee for supplying you with that information. It can be worth it too when their database records have contact details numbering thousands.

Hang on though, there is almost bound to be a directory of some things such as dentists in the UK somewhere... guess what you type! 
Alternatively you could also try some business and other advisory services e.g. Business Link as some of their database records might be free because it is public information. Regulatory bodies can also be helpful to approach. Remember though that some information is protected under the Data Protection Act 1998.

When it comes to products and suppliers, the number of price comparison sites springing up can make life easy but not all enterprises subscribe to them for a multitude of reasons, so be aware that you might be missing out on the best deal if you only rely on those sites. For some purchases that might not matter, but for others it could make a huge difference.

Be it suppliers, materials, contacts or customers the information is usually out there for you to find but weigh up how much you really need that information to be able to function with how much time (and money) it will take you to obtain it. When it comes to finding information be smart and think first about where it is most likely to be lurking and why it's in the public domain at all.

Never be fooled by what appears at the top of the list when using search engines. For many searches the first few listings are adverts because those companies are good at things called meta tags and other weird and wonderful back end Internet stuff. The largest organisations will always have the upper hand in investing to ensure they top of any search engine list that is relevant to them. They might be your top choice too, but then again they might not be. Handy to know if you are researching who does invest in such things!

Searching is one thing, finding exactly what you want is quite another. Best to write down your objective before you start if you want to avoid getting sidetracked or seduced into things which are not strictly relevant to your needs and  goals. Research is a process, from which careful decisions should be made, so it's best not to let the research results make the decisions for you. Spend time doing some analysis to use the information found to help guide you, not command you.  

Thursday, 8 November 2012

Operations File: Budgetary basics

Back in the early 1980s I indulged in a course on budget planning for business, and the single most important message I took from that course was never to spend unless you have to. The principle may seem obvious but I've found it's seldom adhered to as much as it used to be. 

What is essential to remember is how to prioritise. Depending on the type of business you are involved in priorities will vary and handling a budget is not the exclusive domain of company directors, CEOs or finance managers as departmental heads and project managers also have such responsibilities.

Thirty years ago the advice was (as an ideal) never to buy new equipment unless and until your current equipment is being used 24/7. The maxim was not so much "if it works, don't fix it", more "if it works, why replace it?" It is not necessary to have the newest gadget in order to deliver a good if not impressive service that will secure business. I personally think it particularly unwise to be swayed into such purchases just because a competitor may have invested in such a way. What competitors have by way of equipment, facilities or staff is no proof at all of a better service. 

However with modern technologies it can be difficult to keep pace with demand if machinery and devices are ten years out of date. Perhaps the most prudent way of approaching purchasing of any kind is to think about how you could continue without that purchase i.e. can you still function/operate? If so the next question to ask is why is this purchase being considered at all? Not that I'm mean, but it is all too tempting to be seduced into thinking you can have everything you want that's on your wish list. A wish list is should always be of lower priority to a needs list. Wish list items should only be considered if you have managed to come in under budget with your needs list. Even then wish list items should be prioritised according to business development needs, not according to what you personally happen to fancy playing with!

Important questions to ask include:

  • Is it really going to be useful?
  • Is it going to increase efficiency?
  • Is it going to help increase profits?
  • Is it going to save time? 
  • If it's a replacement item, what's it's projected useful life span? (e.g. Spreadsheets are often more enduring for their ease of use and common understanding than many a more sophisticated programme which are constantly evolving). 

Operational finances

Licenses, insurances, building costs, utilities, communications and staffing (to name but a few) have to be covered, but so too are the basics of any business e.g. stationery, refuse collection and something in the kitty for marketing one would hope. Start-up companies are keenly aware of these expenses, sadly once a business is established it is not uncommon for some things to get taken for granted and forgotten such as an increase in utility bills, or rent when it comes to projecting financial figures. Do not assume anything will reduce in price, instead always assume it will increase by between 10-20% every year as that way you should be covered for most contingencies. All this is before you begin to look at the figures for staff and training (usually the first casualty of lean times), materials for production and departmental budgets (if applicable).

It can get confusing if you are not careful about who is responsible for which bit of finance and can lead to both things being duplicated and/or vital costs being missed completely. This is why ensuring you have a contingency pot on the side is a wise precaution. Such an allocation of funds should not just be seen as for emergencies and lean times, but also for such errors as like it or not, they happen from time to time.

Finance departments have a responsibility to ensure that all figures are clear and accurate at all times. In their communications it is essential that those they are communicating with comprehensively understand what information is being imparted. I say this because I have come across finance departments that haven't been heeded by managing directors when they have been trying to warn them that finances are extremely precarious. The moral of the tale being that both parties need to agree on how finances are presented so that those who need to know can understand them. Sounds obvious, and that's precisely the point - it needs to be. 

Even when 'sub' budgets to departments heads or project managers are concerned this applys. Budget holders at this level may not be privy to the whole of the company's finances but, they will need to know their limits and ideally not go over them. All too often the assumption is that if they push hard enough, funds will miraculously be found only to find themselves with a rude awakening, if not a dismissal!

The money that's in the kitty should always be changing, hopefully in your favour because of new and profitable business, but awareness of when funds are running low or are likely to (e.g. the pay day), all helps to manage the finances as a whole. 

We assume we all know how to budget effectively and efficiently, until we hit the unforeseen. Perhaps the best people to manage finances (and negotiate with creditors) are those who have been unemployed and on benefits simply because with limited funds they somehow have to be able to juggle everything that many workers take for granted. On average they have £65 per week to pay bills, feed and clothe themselves and that's before you consider communication necessities such as postage, phone and internet connection, if not travel to interviews to secure work. It only takes a repair to their home to throw all their budgets out. Such an example I hope illustrates and drives home the importance of contingency funds where at all possible and those contingencies also apply when it comes to project management.

Another examples is a capital funded project that I was involved in. I was given a set figure to work to, did my research for best value and not only managed to fulfil the remit but saw the whole thing through under that budget and on time. Unfortunately though the contingency fund was required because another department had to also sign off the work and thereby had to charge our department for their involvement in the project. News to my boss at the time! Something obviously went awry in the communication chain for this not have been apparent at the outset. Check and re-check with everyone if you are working in a large organisation!

Project costs

Many people first learn about budgeting in the workplace through managing a project and then move onto managing a department etc. The principles are the same, all that happens is the items on the list that need to be accounted for really. Do it well and you will earn praise, respect and admiration from those around you. Get it wrong and it hurts - or so I've heard! 

I have always started with the brief and constantly remind myself of that brief so that I don't veer off track. The brief should immediately point you in the direction of your top priorities, from there all other elements slot into that. So here's three simple examples exercises of how that works - note pricing comes after research in all cases.

Exercise 1: 

The brief is you have £100 to provide food for 50 VIPs for a launch event. 

You might be lucky and already have bar or coffee facilities already provided at the venue, or you might not, so the first thing is to check. Never assume another essential requirement is already met, so also check back that you are definitely not expected to cover the costs of drinks too.

  • Check who is on the VIP list, they might not be people you've heard of and you need to get a feel for the type of people that are invited.
  • Check they are all attending and adjust accordingly nearer to the time - if only half will be attending it means more food possibilities!
  • Check their dietary requirements, are there any allergies, vegetarians of religious requirements that need to be included or avoided. Remember that under Equality Law 2010 it is illegal to discriminate against anyone on grounds of health, religion etc
  • Compare and research the possibilities of self catering or hiring a catering firm. Remember if you are thinking about catering 'in-house' you have to be already be geared up and have met the Food Safety Act and all associated legislation by law, e.g. Food Hygiene Regulations
  • Consider what these VIPs might have been subjected to before and what time of day the launch is to be held
  • Compare best value for price

Exercise 2:
The brief is to supply some literature for 50 VIPs at a launch event for £100.

Check what else is already being sent out and that will be there at the event. You need more detail if this is all you get as a brief. Literature to accompany a video presentation, to highlight key points from the launch about the product or service... what? Let's assume it is the latter.
  • Get the list of VIPs and get information about how they like to be communicated with
  • Consider options for making the take-away literature memorable and desirable to avoid the high change of it just being thrown away
  • Make sure it does not say anything that isn't true, accurate and that relates to the product or service
  • Ensure it includes the right contact details for orders!
  • Ensure it is thoroughly proof-read before delivery!
  • Research professional services for ideas as well as price
  • Compare options for producing something in-house against getting it done by a professional service, there may be avenues to tag this onto another print job, but as we're talking VIPs scope of personalisation seems to be pretty important here. Check that though.

Exercise 3:
Your organisation wants to economise on postage costs so is looking to invest in in-house postal systems. The brief is to find the best value for your small operation as an alternative to buying stamps in the post office. 

You don't always get a set figure budget to budget to sometimes finances are about exploring possibilities first prior to deciding on the amount of money to be allocated. The savings here are more to do with staff time and when and where mail sent in the post is essential. 

  • Enquire if there is going to be a change in marketing strategy to develop on-line resources as that could easily help reduce postage costs
  • Check how much time staff use for all mail-out related activities including physically going to the post office.
  • Check what is usually spent on postage every week, month and year. Are there times of the year when postage costs go up - if so, why and can they be reduced?
  • Options could include one drop deliveries for promotional literature at suitable sites so long as you are convinced they won't just be dropped in the bin as soon as you leave the premises
  • Check what the priorities for postage are
  • Research on-line what other people do and whether or not it has helped reduce costs by talking to the service users direct NOT the companies offering products. Discussion groups in LinkedIn can help with this sort of thing or just talk to your suppliers and business clients if appropriate
  • Compare options against actual known usage e.g. franking machines v Smart stamp - including printer and a set of extremely accurate scales
These exercises may seem too simple, but more complicated project and financial planning is merely a case of doing many such simple exercises for all the individual elements that are required to make up the whole plan and to keep to budget. Figures should be constantly adjusted in the light of new information throughout.

The most important point of all to remember is to never deviate from the priority aims and objectives originally set for your budgetary requirements. If they change, then abandon what you've done and forget it to start afresh with what should after all be a new brief and set of objectives.