Business in Progress

Recently a leading think-tank, the Ernst & Young Item Club, said that the economic outlook for Britain is like a "horror movie".

In my opinion that is a contrived exaggeration designed to catch the attention of the media.

One wonders what metaphor they would possibly have substituted if they had been commenting in 1926. However, there are so many doom merchants plying their trade at the moment that trying to go one better might be expected.

So, just how bad is the economic outlook as seen by the Item Club? What constitutes a “horror movie” these days?

Growth in UK GDP during 2007 was 3.1%. The Item Club expects growth of 1.5% in 2008 and growth of 1.0% in 2009 before it returns to 2.5% in 2010.

Growth????

Oh, yes! Ernst & Young are not forecasting a recession … far from it. They are expecting that the UK economy will continue to grow.

This is about as close to a horror movie as Willy Wonka and the Chocolate Factory.

Even if things turn out worse than Ernst & Young’s choice of prose, professional firms need to get a sense of proportion. In the US Great Depression 1930-33 the reduction in the level of GDP from peak to trough was a fall of some 30 per cent.

That means that some 70% of output was maintained, although the exact figures will have varied from sector to sector and firm to firm. Nevertheless the point is well made that business continued to happen. Some people even did remarkably well out of it.

Therefore, what you can be sure of is that, no matter how poor the economy gets, substantial amounts of business will still get done.

The only question you need to answer is whether you will be among those doing that business.

There is a recognised 3-step process that will help you towards a positive answer:

1. Raise your standards. Increase the levels of service that you provide and the attention that clients receive. Satisfactory is not good enough, either to win new business, or retain existing accounts.

2. Change your beliefs. Who your prospects are, where they can be found, what they want and your capacity to meet those expectations all need rewriting. The world has moved on; you need to keep pace or you will be left behind.

3. Revise your strategies. Whatever game plan you have been following is now familiar to all your staff and most of your competitors. It’s predictable. “A skilled commander seeks victory from the situation and does not demand it of his subordinates” ~ Sun Tzu.

For the outlook to be perceived as bad is nothing new.

Recently, Sam meets his friend Joe in the Arndale Centre and greeted him warmly.

"Hi Joe, I haven’t seen you for some months. So how is the company doing that you set up with Maurice last year?"

"Well,” said Joe, “As I told you then, I put in all the money and Maurice put in all his business experience. But things have changed a bit since then."

"What do you mean?" Sam asks.

"Now Maurice has all the money and I have all the business experience."

The wisdom of making mistakes

We all make mistakes. And fear of making mistakes too often keeps us frozen in indecision and inaction. However, it is rarely the mistake itself that is the real problem. More often it is the consequence we expect, the outcome from the mistake that blocks our moving forward.

That fear is misplaced for four main reasons:

Our fears may be groundless or, at least, exaggerated. Fear is only felt in relation to potential future events. Nobody fears the past since it is already known and experienced. However, potential events are not real events. They may never happen as we anticipate and we cannot know how they will happen until we take action. How often has some dreaded eventuality turned out to be not so bad after all?

Mistakes may be more apparent than real. What we judge to be a mistake in the short term can eventually emerge as a breakthrough. History is replete with such events. Artificial sweeteners, X-rays, microwave ovens and vulcanized rubber are just a few of the inventions that owe their existence to chance.

We learn from our mistakes. It has been said that success teaches us very little, whereas failure carries valuable lessons. Our failures cause us to pause, take stock, work out what went awry and then modify our approach. Success is often taken for granted. We pat ourselves on the back, congratulate ourselves for being so smart and move on. We rarely stop to work out what elements came together to deliver such a great result.

Indecision and inaction is itself a decision – hence the expression ‘damned if you do, and damned if you don’t’. With a decision made and action take you have intention and a degree of control. With indecision and inaction one is subject to the variable winds of fate and fortune, and the decisions and actions of others, never know where one is likely to end up.

Then there are those mistakes that only appear to be foolish, but conceal a deeper wisdom:

One day a beggar appeared in the marketplace. Whenever people showed him both a large note and a smaller note he always chose the small one.

Eventually, a generous man who was tired of seeing everyone laugh at the beggar quietly went over to him and explained that when people offered him two notes, he should choose the larger one. Then he would have more money, and people would not think him a fool.

"You are surely right", replied the beggar. "But if I always choose the larger note, people would stop offering me money, in order to prove that I am a greater fool than they are. And then I would no longer receive enough for my food. There is nothing wrong with appearing to be a fool, if what you are doing is in fact intelligent."

Take a Reality Check

I don’t know exactly how your business is going, but there is one thing of which I can be certain: it could do be doing a whole lot better. And, when you finally pause for a moment of quiet reflection, you will realise the same thing. It should come as no surprise. It applies to all of us.

What stops us improving our performance? Quite simply, we know too much.

We are the experts in our business. We spend most of our waking hours either working in it, working on it, or thinking about it.

We may even spend our sleeping hours dreaming about it.

The consequence is that when we need to get unstuck; when we need more options to choose from; when we need to stay on track, knowing so much means we either recite all the reasons why not, or we end up being overly complex and abstract.

When we want to clarify our thinking, identify the real issues and reach a better solution an external reality check is always useful. Working on the immediate issues with someone who is not so closely involve, who can take a more utilitarian approach, can do wonders.

They can usefully cut through all the moonshine and ask the sort of intensely rational, down-to-earth questions that clears the fog of self-obsession, like: “Yes, but what are you actually going to do and when?

A young engineering graduate fresh out of Cambridge was being interviewed recently. As the end of the job interview approached, the HR Director asked, "And what starting salary were you looking for?"

The engineer said, "In the neighbourhood of £140,000 a year - but depending on the benefits package."

The HR Director said, "Well, what would you say to a package of 6 weeks paid holidays, full medical and dental cover, a two-thirds final salary pension scheme and a FX company car renewed every 2 years starting with…say…a red sports Mercedes?"

The Engineer sat up straight and said, "Wow! Are you kidding?"

And the Director replied, "Yeah, but you started it."

Make Room for Change

Change is both needed and constant. Our bodies undergo change as cells are renewed. The composition of society changes as births and deaths occur. The weather changes and so do the seasons. People, businesses and economies change.

Change permeates the entire universe in one form or another.

If you are going to change something, do something new, it will have to displace something old. Any new initiative, habit or practice, any new article, structure or possession will displace some custom or thing that went before.

It is impossible for it to be “as well as”. Nature abhors vacuum.

If you are about to adopt a new behaviour it may replace a rest period, or mere idleness rather than a present activity or routine.

If you are about to acquire either an object or a building it may occupy a previously uncluttered space or an unused field rather than be a substitute for a current possession or an existing edifice.

Either way, something has to go. You have no empty corners, although there may be some non-productive ones.

This means you have to make room for change. That’s true whether the change is one you make on your own initiative, or one that stems from actions by some third party.

However, even when the trigger event is not of your making, the decision to make the resulting change is still yours. None of us can escape that responsibility, even though we may wish so at times.

Whatever the circumstances and whatever our wishes other people may not welcome the change. As Joni Mitchell wrote in her song Both Sides Now: “now old friends are acting strange, they shake their heads, they say I’ve changed”.

Also, it may not be possible, or advisable, to put boundaries around change. Change in area 1 may knock on to area 2. Sometimes this gets labelled as ‘unintended consequences’ or, more prosaically, as ‘collateral damage.’

Just as the responsibility for making the change is ours, so how others view the change is theirs. We cannot make that choice for them, nor accept either praise or blame for their feelings. For some people change is always a pig with a straw in his mouth.

It is a fact that we cannot ‘make’ people happy or sad, angry or unruffled. Each of us is accountable for how we decide to represent particular events to ourselves. “It is neither good nor bad, but thinking makes it so.” ~ Shakespeare.

And as Joni Mitchell also recognises in her song it’s not necessarily all bad: “something’s lost, but something’s gained in living every day”.

On occasion resistance to change may be the right thing to do. Only you can judge, but if you call it wrong it may mean you get run over in the headlong flight to the future.

If you see the change in question as beneficial, or inevitable, then welcome it rather than joining the carpers and cavillers. Don’t live a midget existence. Helping to steer an otherwise wayward vessel may mean the eventual landfall will be a harbour more to your liking.