How Leaders Can Build Trust l Car Industry Races Towards Digital Disaster l No Replacement Scheme for the Scrapped Green Deal
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Succeeding as a Business in a Global Economy
What Do You Do When Your Organisation Is Hacked? Stuart Poole-Robb, Chief Executive of security, business intelligence and cyber security adviser at the KCS Group Europe tells you how to formulate an effective action plan should your business fall victim to cyber crime.
September 2015
Editor’s Note Welcome to the September issue of Corporate Vision. This month we ask: How can business leaders build trust? We also investigate how directors and officers are subject to the same regulations enforced on bigger and more established companies, and in our LSBF Great Minds feature, we examine how working with the right people often results in success. Focusing on broadband and businesses we explore how a poor internet connection can seriously harm day to day operations of a business, and with the thought of operating globally widely acknowledged as one of the most daunting prospects for any business, Mark Venables, Managing Director at Alloy Wire International shares his experience of overseeing his firm’s expansion. Elsewhere, as the auto industry accelerates into the digital arena, we explore the issues surrounding cyber security, and as the popularity of gaming continues to grow, we look at what the world of online trading can learn from this burgeoning sector, speaking to Roy Shaham, CEO of GetStocks, who gives us his thoughts. We hope you enjoy this issue.
Contents 4 News
7 Industry Insight Four Communications Group Acquires PR Agency Rowsley Limited to Join Class of 92 in Old Trafford Hotel
13 Strategy EY Classification The Sunday Times 100 Best Companies Succeeding as a Business in a Global Economy How Leaders Can Build Trust Key to a Successful Business Career Is Working with the Right People, Says Marriott Hotels Europe CEO Car Industry Races Towards Digital Disaster LIBOR Manipulation; the Potential Impact on Businesses What the World of Trading Can Learn from Online Gaming Slow Broadband Effecting Business Operations LARK Risk Management The Importance of Social Media in the #duediligence Process The Challenges of Audit Management for the Quality Professional What Do You Do When Your Organisation Is Hacked? IDBS
43 SME The Power to Pivot
47 Money No Replacement Scheme for the Scrapped Green Deal
51 60-Second Interview
News
Oman Wants to Increase Success Rate of SMEs Over 50% Fail Within Five Years, Which is a Drag on Efforts by the Gulf Nation to Diversify its Oil & Gas-based Economy The two-day Oman SME Summit in Muscat got off to a rousing start with a Welcome Speech and Special Address by His Highness Al Sayyid Dr. Adham Turki Al Said, who, in keeping with the theme of the event, spoke about the need for reinvigorating the SME market in Oman. The summit was held at the Al Bustan Palace Hotel, Ritz Carlton on September 13-14. The venue was packed with close to 180 delegates, which served to emphasize the need for such an event in a nation that is pulling out all the stops to spur its SME sector to reach greater heights. The 36 speakers - comprising officials, entrepreneurs and businesspersons - touched upon topics such as training for entrepreneurs, raising and utilization of capital, skill development and regulatory issues. In a very engaging presentation, Raphael V. Parambi, CEO, SME Development Fund presented the ‘case of the missing middle’. It struck a chord with the delegates. The presentation elicited several questions from entrepreneurs and regulators alike.
Other speakers touched upon the reasons that are holding back the growth of SMEs and also offered possible solutions. Among other things, the gathering was told that more than half of SMEs fail within the first five years. It was clear that there is a great need to train entrepreneurs to deal with the various needs of a business - skills, raising capital, maintaining accounts, cash flow management. The list of dignitaries was led by His Highness Al Sayyid Dr. Adham Turki Al Said. Among others present were His Excellency Dr. Ali Saud Al-Bemani, Honorable Engineer Naashiah bint Saud Al Kharusi and Ali Daud, chairman of Ali Daud Group and founder of Startup Oman. Among the highlights were a special address by British Ambassador Jonathan Wilks and Indian Ambassador Indra Mani Pandey. Jonathan Wilks started his speech in Arabic before translating the same in English for non-Arabic delegates. It may be noted that Jonathan Wilks has been serving British interests in the Gulf for close to 25 years and is well-versed with the needs of the region. He stressed on utilizing funds, like the Prince’s Trust, to promote SME growth.
4 Corporate Vision September 2015
Indra Mani Pandey focused on how Indian companies can work with Omani companies to build and strengthen the SME sector in Oman. Prominent Omani businessman and entrepreneur Ali Daud and Canadian entrepreneur Sherry Colbourne took the opportunity to launch their company Startup Oman, which is a one-stop shop for SMEs. They came up with an innovative way to launch their company. They distributed pamphlets about Startup Oman among the delegates. They then asked the delegates to turn the pamphlets into paper planes and launch them in the air. Not only did the launch become a talking point, but the duo also lifted the spirits of the assembled delegates. The highlight of Day 2 was a panel discussion on ‘Beyond The Border’ moderated by Dr. Jalal Saleh Al Hadhrami, founder of Celebrity Global Holdings in Dubai, UAE. The panelists Nasima Yahya Zirook Al-Balushi, Pankaj Khimji, Nicholas Pattison and Sherry Colbourne discussed the prospects of Omani SMEs in international markets. Basking in the success of the summit, Basant Das, Head of Events at IFM, said, “We look forward to organising some more thought-provoking conferences in Oman in 2016.”
News
4 Ways to Incorporate Mobile Marketing into a Social Media Strategy With approximately 7 billion mobile users at the end of 2014 mobile marketing presents a unique opportunity for small businesses to deliver unique brand experiences tailored to consumers on-the-go. As mobile usage continues to rise, companies need to recognize the importance of delivering social media messaging that caters to and targets mobile device users.
In her debut article posted to PR Newswire’s Small Business PR Toolkit, Kristen Gramigna, chief marketing officer for BluePay, provides three ways you can incorporate mobile marketing tactics into your current social media strategy. To reach new customers or to deepen the engagement with current customers: • Customize. Gramigna suggests that it’s critical to review how your social profiles look on all platforms (e.g., desktop, iPhone and Android devices). This research will allow you to customize your social profiles to ensure the best user experience possible.
• Optimize. With mobile users checking social media to find suggestions for nearby businesses, it is key that your prospects and returning customers can quickly find you on social media. Optimize your social profiles so users can find you and confirm that all profiles include your correct business location, hours of service, price range and contact information. • Tailor. Gramigna recommends you tailor your social media posts to a mobile user’s day. With the majority of mobile search activity taking place from 3 p.m. until midnight, tailor your social activity to involve mobile users during these hours based on their search activity and location.
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Boost Your Brand’s Strategy with Cause Marketing Latest small business PR Toolkit article offers tips to get the highest impact from cause marketing. With more than 9 in 10 consumers likely to switch brands to one associated with a good cause, Cause Marketing provides a unique opportunity for small businesses to build positive brand awareness, strengthen customer loyalty and employee pride, and make a difference within the community. There’s long been a strong connection between entrepreneurship and giving, and to build an effective and mutually beneficial partnership with a charity takes some planning. To get the highest impact from your cause marketing efforts: • Choose a worthy cause. Ask questions and do research to ensure you are partnering with a cause that aligns with values and is significant to your target audience. • Clearly communicate the message. Brands can do harm if the messages surrounding their social responsibility efforts are ambiguous and potentially misleading. • Raise awareness and encourage participation. Depending on how you decide to promote the cause of your choosing, make certain that you are helping to raise awareness and are requesting your audience to participate in the online conversation.
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Industry Insight 8. Four Communications Group Acquires PR Agency 10. Rowsley Limited to Join Class of 92 in Old Trafford Hotel
Industry Insight
8 Corporate Vision September 2015
Industry Insight
Four Communications Group Acquires PR Agency Broadgate Mainland Independent integrated agency Four Communications Group (Four) has announced that it has acquired leading financial and professional services public relations agency Broadgate Mainland. With fees in excess of £2.2 million in 2014, Broadgate Mainland represents national and international brands including GAM, Baillie Gifford, Durham University Business School, St James’s Place Wealth Management and Woodford Investment Management. Combined fee income is expected to be more than £20 million in 2015.
As part of Four, Broadgate Mainland will be rebranded as Four Broadgate and will focus on the delivery of communications programmes within the specialist areas of financial services, professional services and education. This acquisition is the first announced by Four since it successfully secured a £10m investment of equity finance from BGF (Business Growth Fund), the UK’s most active provider of growth capital to small and mid-sized businesses, earlier this month. As part of the investment, Four also secured an additional debt facility from HSBC. Four has experienced rapid growth over the past four years, doubling turnover from £15m in 2010 to over £32m in 2014, a record-breaking year for the agency, and is expected to increase this again by over 20 per cent organically in its current financial year ending December 2015. Nan Williams, Four Communications Group chief executive said: “Broadgate Mainland’s expertise will really bolster our existing offer within the financial & professional services and education sectors. This is just one of a series of acquisitions we will be announcing over the coming year as we surge ahead with our growth ambitions and expansion plans for the UK, Middle East and South East Asia.”
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Roland Cross, director at Broadgate Mainland says: “PR is increasingly aligned with broader communications strategies and the integrated approach at Four makes them an ideal partner. As part of Four we can offer existing and prospective clients an enhanced service and have a strong platform to continue the growth of the business in the future.” As well as its London headquarters, Four also has offices in Edinburgh, Abu Dhabi and Dubai. It employs over 220 staff and has over 600 clients including Etihad Airways, The Man Booker Prizes, Sotheby’s International Realty, InterContinental Hotels Group and American Express. Its key services include public relations, public affairs, marketing, sponsorship, digital & content and media planning & buying with a particular focus on the property, travel, culture, healthcare, financial services and public sectors. Over the past four years, Four has built a strong track record of acquiring and integrating communications agencies which offer complementary services to the group including bgb in 2011, Colman Getty in 2012, Kinross & Render in 2013 and more recently Consolidated PR in 2014 and MSA Media in May 2015. The business is now ranked as the UK’s sixth largest independent communications agency according to PR Week and ranked 21st in PR Week’s Top 150 PR Consultancies report in May 2015.
Industry Insight
10 Corporate Vision September 2015
Industry Insight
Rowsley Limited to Join Class of 92 in Old Trafford Hotel Rowsley Ltd, a publicly-listed investment company in Singapore, has acquired part ownership in Hotel Football.
The Project is owned jointly by Peter Lim, Gary Neville, Phil Neville, Ryan Giggs, Paul Scholes and Nicky Butt. The new ownership will see a restructuring in the current status in order to promote and facilitate growth within the leisure and hospitality industry. Rowsley Ltd, in which Peter Lim is an investor, will join Gary, Phil, Ryan, Paul and Nicky in ownership. Rowsley Chief Executive Officer, Lock Wai Han said: “Manchester is a very exciting city and the development that is taking place is inspiring. Hotel Football has impressed us from day one, the concept, the location, the management and above all Gary, Phil, Ryan, Paul and Nicky’s passion in fulfilling what was a dream into a reality”. “We share those dreams and aspirations for Hotel Football and the Old Trafford Supporters Club. Football unites people all over the world and we will use our knowledge in the real estate sector to grow this business. We understand the objectives of Hotel Football and OTSC and will continue to ensure that the interests of the fans are well taken care of.” Hotel Football opened its doors in March 2015 and is located 100 yards from Manchester United’s Theatre Of Dreams. With 133 bedrooms and providing hospitality, conferencing and banqueting facilities for up to 750. On the 12th floor is Heaven, a rooftop football pitch that boasts a retractable roof with spectacular breath-taking views of Old Trafford and the city of Manchester. Located on the ground floor is Cafe Football, a 185seat restaurant where the menu is overseen by two Michelin star chef Michael Wignall. The Hotel is also home to the Old Trafford Supporters Club, a place dedicated to United fans and a fantastic social space for fans of all ages, accommodating over a 1,000 supporters on match days.
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Gary Neville said: “When we dreamt of building Hotel Football we knew exactly what we wanted it to be, a unique place where fans could gather and OTSC was part of that dream. However we also knew that we would need a restructure within the company in order to facilitate the growth in our hospitality and leisure interests. Partnering with Rowsley with their vast wealth of knowledge and expertise in this area, fulfils just that”. He further added: “The original promise to donate my Testimonial proceeds into this project was fulfilled. Out of this transaction I will now be donating my entire testimonial funds to supporter’s projects. I have been in regular dialogue with Andy Mitten, journalist and author, United fan and long-time editor of United We Stand, about an editorial project which I think will go down well with the fans” Ryan Giggs said: “Our dream since OTSC conception was a place where fans could extend their match experience. Our vision will not change, the supporters are paramount and it is important to stress that OTSC will continue to operate and run as it has, where fans from all over can continue to congregate before and after the match and enjoy their love of the game”. After opening in March Hotel Football has achieved great success and within the first 3 months was voted Manchester’s number one hotel for supporter and customer satisfaction within the travel industry.
Strategy 14. EY Classification 16. The Sunday Times 100 Best Companies 18. Succeeding as a Business in a Global Economy 20. How Leaders Can Build Trust 22. Key to a Successful Business Career Is Working with the Right People, Says Marriott Hotels Europe CEO 24. Car Industry Races Towards Digital Disaster 26. LIBOR Manipulation; the Potential Impact on Businesses 28. What the World of Trading Can Learn from Online Gaming 30. Slow Broadband Effecting Business Operations 32. LARK Risk Management 34. The Importance of Social Media in the #duediligence Process 36. The Challenges of Audit Management for the Quality Professional 38. What Do You Do When Your Organisation Is Hacked? 40. IDBS
Strategy
By Stuart Hall of executive search experts, Tyzack www.tyzackpartners.com
14 Corporate Vision September 2015
Strategy
EY Classification The dotcom boom brought with it a number of transformational shifts, many of which flipped old business models on their head. And some which didn’t.
It was during this period, when tech companies were draining talent away from the more traditional sectors, that organisations started re-addressing their core recruitment strategies. One of the major changes which was explored was a need to find fresh new minds from non-traditional backgrounds. This was in effect the start of major corporations aiming to widen the gene pool and shift towards diversity of thought over conventional education. At the time a number of major organisations developed innovative projects in a bid to find this fresh new talent. Indeed many new bright minds did come forward and, for a period, there was a real sense that the business world had turned a new leaf. The end results however were disappointing. The dotcom crash certainly didn’t help progress the issue and, following a number of diverse recruitment processes, the vast majority of people who were recruited by traditional organisations had been recruited because they had red brick/Oxbridge university backgrounds.
for diverse thinking from the boardroom down. Much has been talked about gender diversity, yet in reality it needs to go much deeper than that to be effective. Diversity now needs to become part of an organisation’s DNA. Having said that, diversity also needs to be addressed with sound commercial goals in mind. This is where diversity of thought can be particularly powerful. A board which has a balanced male to female composition does not automatically mean that it demonstrates diversity of thought, in fact it could suffer from groupthink. Diversity will only ever benefit an organisation if it has been developed to enhance diverse mind-sets that complement the overall organisation. We are still some way yet from this thinking being embedded into the organisational culture. To a certain degree we are still at the initiatives stage, however the corporate scene now appears to be better suited to embrace the required changes. Only time will tell, yet if we deign to look at some of the non-traditional start-up businesses cropping up
The brave new recruitment era petered out before it even got going, due, in the main, to corporations only paying lip service to finding truly diverse minds. Perhaps the real value of doing so was not as compelling as it first seemed. When it came to the final crunch most played it safe and hired people who were just like them. Diversity of thought never got off the starting blocks. Sixteen years on, and EY have chosen to remove degree classification from their entry criteria for their hiring programmes. According to them, there is no evidence to support the claim that success at university is correlated with achievement in professional qualifications. This sounds very much like what was being said almost two decades ago, there is a difference however, back in the dotcom boom there was a talent shortage issue that drove this need. Actually there is one today too. So what has changed? Certainly the corporate landscape has drastically shifted. The environment businesses operate in these days is more informal, more flexible and faster moving. As a consequence, there is an even greater need
September 2015 Corporate Vision 15
and impacting global economies, we will clearly see the value of attracting those people who have not been raised from similar education establishments and who are not blinkered by like-minded values. In the long run this will be one of the most impactful ways of creating transformational change which will elevate most intangible assets within a company, from brand and culture to competitive advantage. We need more organisations to follow EY’s example to achieve a permanent shift. We can only hope that what occurred in the late nineties will serve as a lesson in missed opportunity. Let’s not default back to our original mindsets. Biography Stuart joined Tyzack in 2013, after working for Garner International and Norman Broadbent for nine years, and focuses on Financial Services and Real Estate, as well as branching out to work with the Academic and Not for Profit sectors. He has been responsible for hiring senior executive and non-executive management teams for both Real Estate businesses and universal banks across Europe and Asia.
Strategy
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Strategy
The Sunday Times 100 Best Companies Helping make the world a better workplace is what Best Companies are driven by. As the leader of the company Jonathon Austin is focused on setting a clear purpose and direction for the business.
Every year Britain’s best and most recognised workforces are rewarded through the Sunday Times 100 Best Companies List. With over 1,050 businesses registering to take part in the survey what is taken into consideration before a final list is formed? Without their employees companies wouldn’t be getting the recognition they warrant. It’s the opinions of their staff which go a long way to deciding their fate. Jonathon Austin at Best Companies said: “Organisations win a place on the Best Companies to work for List based purely on how their employees feel about working there, so we don’t actually look for anything, in the sense that it’s all down to the people. That way the list is a true and fair reflection of the most highly engaged organisations in the country, rather than a reflection of any individual’s subjective opinion”. Securing a place on the list is great but what can an inclusion on the list do for a company? Jonathon Austin said: “Many organisation enter the List so they can build their employer brand, in order to attract and retain the best talent. This is becoming more challenging for companies, since there’s no such thing as a job for life these days and the labour market is increasingly tight and competitive. The Best Companies shine as great employers, attracting the best people. Winning a place on the list makes existing employees really proud of their workplace; and gives cause for celebration”. However as Jonathon Austin explains it’s not all about employees being recognised as a “Best Company” will impress customers too. “It’s not just about employees, it’s about customers, suppliers and partners too. Being a Best Company instils a great sense of trust – a sense that you’ll be good people to work with – which means a lot to existing customers, prospective customers and any other organisations you partner with”. In previous years a wide range of sectors have made it onto the list however what can we expect this time around?
September 2015 Corporate Vision 17
“We always see a wide range of sectors make it onto the List; and although some organisations tend to feature consistently, there are always new entrants and big improvers. I expect organisations run by great leaders, who focus on developing great managers, to come out on top”. Concluding the importance of managers was something Jonathon Austin was keen to stress particularly in relation to the communication of the organisation’s purpose. He said: “I think it’s worth stressing just how important managers are. It’s an old adage that people don’t leave companies, they leave managers; and never before has great management and leadership had a bigger impact on success”. He further added: “Ultimately, managers are responsible for communicating the organisation’s purpose, ambition, principles and plan to their teams; then motivating, conversing with, caring for and considering each and every individual, to help them give their best every day”.
Strategy
18 Corporate Vision September 2015
Strategy
Succeeding as a Business in a Global Economy Operating in a global economy can be a rather challenging and daunting prospect for any company. Expanding your business worldwide can offer significant growth opportunities but at the same time present a number of challenges. Mark Venables, Managing Director at Alloy Wire International has been largely responsible for Finance, Sales, Quantity and Strategy during his six year stay with the company. Unlike some of their rivals Alloy Wire International are employee owned with every member of their staff committed to delivering a bespoke service to the customer. Possessing sales representation in over 39 countries in the world makes them the obvious choice for the manufacture of precision drawn round wire, flat wire and shaped wire. He believes operating globally is key to the future success of the company. He said “No longer can we rely on a domestic market. Having exported for many years, Alloy Wire is constantly looking to add to its network of sales agents in countries across the world. With very short lead times and premium quality UK manufactured products, Alloy Wire offers a quick and easy “enquiry to delivery to door solution”. Ensuring sales representation is in place in each of the countries the business operate in is hugely significant in relation to overcoming any challenges the business may encounter. “We try to overcome the challenges of operating worldwide by having sales representation in the countries we export in. This allows us to fully understand the culture and overcome the language barriers and bureaucracy in each country. We sell our wire in a number of different currencies to make it easier for our customers to purchase the product”. If a company is going to invest in an overseas business expansion there has to be a goal behind it. So how have Alloy Wire International benefitted from a change in their target audience.
Securing talent overseas can be a difficult task however building a relationship with the agent and forming an understanding of the product range is vital for the long term growth of the business as Mark Venables explains. “It can be difficult to secure the services of the right overseas sales agent. It takes time to build up that relationship and understanding and knowledge of the complex product range we have at Alloy Wire. We tend to develop long term relationships with our agents and they work very closely with us to evolve and grow the business”. Understanding the cultural implications associated with an overseas expansion process is key to selling in other countries. In addition the years of experience from operating in specific countries can result in loyalty with businesses using the same transport companies for exporting. “Understanding the cultural implications and local knowledge is key to selling in other countries. Our sales agents have that knowledge and with our support in getting a quote very quickly the sales agent is equipped to have the best chance of winning the order. With years of experience exporting and using very experienced transport companies, our sale agents can support us to overcome the most difficult countries to export to by using local knowledge to make sure all the paperwork and documentation is right first time”.
“Alloy Wire has over the years invested heavily in attending and exhibiting at trade exhibitions all over the world further supporting its ambition to increase exports. With the support of the sales agents we try to visit our customers as often as possible and meet potential new customers. Being a small quantity specialist with no minimum order quantity, we quite often liaise with engineering designers and help them with New Product Development often manufacturing very niche difficult products”.
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Like any industry Alloy Wire International always find themselves competing with rivals but how do they respond to local competition? “We plan to respond to local competition by ensuring we continually supply a quality product on time, every time. In fact our strapline is “Manufacturing quality, delivering reliability” which is a short accurate way of describing Alloy Wire. We will continue to invest in our plant, machinery and our people, so that we can offer the most difficult and challenging products”. Social media has become a hugely important factor in the business world with companies constantly looking to improve their pages. How beneficial would it be for Alloy Wire International to expand their online presence? As Mark Venables explains you have always got to be looking to evolve as a company and take advantage of any business opportunities. “Our current website is very successful, but we do recognise the need to continually evolve and we will be releasing an updated modern responsive website in the next few weeks. The website will be translated into a number of languages to make it easier for our customers to understand what we have to offer. The launch of the new website together with a growing social media presence through “Twitter and LinkedIn” should ensure our message is being transmitted across the world. We are continually monitoring SEO optimisation to ensure our products are at the top of the rankings”.
Strategy
20 Corporate Vision September 2015
Strategy
How Leaders Can Build Trust It may sound like a cliché, but without trust you have nothing. If your employees don’t trust you, you will never know what’s really going on and if your employees don’t trust each other, you’ll be left with ”lone wolves” who don’t share or collaborate more than they have to. This will of course ultimately have a negative knock-on effect on the teams, stakeholders, customers, other teams and business partners. Besides, more and more organisations as well as their stakeholders want and expect increased transparency and openness in their relationships. When trust is low, there’ll be very little openness. That ripple effect starts with you and your team.
In a recent situation that we observed, a team member expressed frustration as she felt her team members were dismissive about the importance of her work. This disinterest was a result of the team members not knowing each other, rather than them being intentionally dismissive. Not realizing this, she felt angry, defensive and helpless, which made things even worse. Subsequently she didn’t want to work with them and started to avoid them, further impacting communication and team spirit. Ultimately this affected one of their clients, who didn’t get a promised report on time, because communication had broken down between the colleagues. The client complained about the breech of contract this entailed and a penalty clause kicked in which meant the client didn’t have to pay. So yes, lack of trust can impact the bottom line too. A big part of your job as a leader is, as we’re sure you would agree, to build trust, earn trust and show trust. The best place to start is with yourself – you are a role model, people will do what you do, not what you say. Let’s look at some practical ways of creating trust. Some of these solutions may seem pretty simple, but don’t be fooled, their simplicity means they are often overlooked. We somehow seem to think that we need to make things complicated for them to be effective – and this is just not true.
Get team members talking Get your team members talking, so they can get to know each other. Until they know something about each other, there will be no real understanding or connection and hence very little trust. People rarely trust strangers – and you definitely don’t want your team to be strangers. Make it easy for people to talk to each other: have short, regular huddles, calls or maybe even lunch together where you just enjoy each other’s company, rather than ”talking shop”. Invest in relationships Invest in relationships within the team, take time to get to know each other. This is critical, not a ”nice to have ”, it is a crucial business strategy. Unless you are already doing it, go ahead and start believing that relationship building with your own team is PART of the job, something that will help your team do better. Then you are less at risk of seeing it as a time consuming ”must”. It is simply a part of the job, and rewarding when done. After all, you probably spend a lot of time investing in relationships with customers, clients or other stakeholders, so why wouldn’t you use that mindset with your own team. Show how important it is with relationships in business. Every team and every individual need to build relationships with other people: internally and externally. When you encourage relationship building within the team first, you show how important relationships are for a successful business.
This is how you can do it: Take the first step Talk to your team members. Share something about yourself, let them see more of you than just the ”work person”. Be genuine; talk about what makes you tick, share something personal.
Be explicit Explain why it is important to know each other, explain why you need to carve out time for it. You need to be explicit about what you are doing and why so the team knows why it is important. This may seem obvious to some but it won’t be to all.
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Keep promises This might seem pretty obvious - only commit to doing something when you know you will do it – and when you make a commitment or promise, keep it. BEHAVIOURS MATTER With all of this, it’s not just about WHAT you do, but HOW you do it – behaviours matter. We’ve found that well-intentioned actions backed up by constructive and genuine behaviours can work wonders when it comes to trust and teamwork. Here are some examples (behaviours in capital letters): •
•
•
To talk about yourself, you need to SHOW COURAGE by doing it properly, letting your guard down a bit. This shows others that it’s OK to share. If you want others to talk, you need to really LISTEN and SHOW INTEREST. This makes others feel important. If trust is low in the organisation as a whole and people are not used to being open and trusting, USE your SOCIAL AWARENESS to see where you can start; to figure out what would be an acceptable start when it comes to talking about yourself or encouraging others to. This creates a safe environment in that particular situation, which can be gradually built on.
Being open and sharing helps in getting to know each other better. With increased openness come greater trust. Disclosure breeds disclosure – and it can start with you. How much Trust are you creating today? Mandy Flint and Elisabet Vinberg Hearn are the authors of new book ”Leading Teams – 10 Challenges; 10 Solutions” published by the FT Books. Building trust is one of the 10 Challenges they explore in more detail in the book – for more details go to www.leadingteamsbook.com
Strategy
22 Corporate Vision September 2015
Strategy
Key to a Successful Business Career Is Working with the Right People, Says Marriott Hotels Europe CEO Great business leaders know how to surround themselves with good people – that is the secret to a successful career in business according to Amy McPherson, the CEO of Marriott Hotels Europe. Having been recently interviewed for LSBF’s Great Minds Series, Ms McPherson spoke about the importance of soft skills to shape the careers of better, more effective leaders:
“I think most people would say I’m a change agent. I love a challenge”, she told Nadim Choudhury, Head of Careers and Employability at LSBF. In terms of potential leaders, Ms McPherson said she looks for “really smart people that aren’t like me, that bring something different to the table,” adding: “Any success I’ve had is because I’ve surrounded myself with the best people.” Ms McPherson then went on to identify these skills and qualities as effective verbal and written communication and the ability to influence collaborations. She stressed the importance of having high emotional intelligence when working with people from many different cultures, adding: “I think higher education can focus on those things that make you so much more effective, a person that someone gravitates to and wants to work with.” Having joined Marriott in 1986, she has held her current position since 2010. Her role brings with it the responsibility for the performance and growth of the Marriott brand across Europe. In November 2005 she was named one of the top “Women Who Mean Business” by the Washington Business Journal. Ms McPherson told LSBF of the Marriott brand starting the first in-flight catering business, eventually expanding to hotels in 1957. Marriott now consists of over 4,000 hotels in 78 different countries, as well as 18 core, luxury and lifestyle brands. Innovation plays a vital role in the success of the Marriott brand, with a strong focus on technology and development which is difficult to replicate. Ms McPherson placed emphasis on innovation that will gain Marriott a competitive advantage: “We’ve spent a lot of time on innovation related to our business model, coming up with a global portfolio of brands, multiple price points and impacting different consumer segments that are attracted to different things in a hotel, product and service.”
Ms McPherson also took time to discuss the key challenges facing the global hospitality sector. Speaking of the digital revolution, she said: “We have to do things like mobile check-in and change the way we engage with [consumers]. We have to do things like changing the way we get feedback and having more interactive dialogue with our consumers.” Another challenge affecting the hospitality sector, according to Ms McPherson, is the geopolitical environment. She spoke of how conflict can have a negative effect on the industry. “We’re constantly monitoring the economic and the political environment to make sure that we’re responding appropriately to threats,” she explained. Finally, Ms McPherson offered some advice to those wanting to go into the hospitality industry. She said: “Liking people is pretty fundamental and [you should] also understand technology very well because it’s shaping how this business evolves and how we engage our customers. People never really understand what the hospitality business is until they get into it and then they never leave because it is probably the most interesting and complex industry you’ll ever be in. It exposes you to the world. If you want to be in hospitality you have to love travel and want to experience the world in completely different ways.” LSBF Great Minds Series As well as offering programmes dedicated to fostering leadership skills, LSBF also endeavours to provide students with insight and inspiration through a number of innovative resources. One of these initiatives is the LSBF Great Minds Series: a collection of video interviews with leading business and political leaders promoting debate on education, employability, entrepreneurship and the economy. The video series started in 2011 with a conversation with former British Prime Minister Tony Blair,
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followed by an interview with former Education Secretary Lord Kenneth Baker. In 2012, entrepreneur Sir Richard Branson, founder and chairman of the Virgin Group said that universities worldwide should become hubs to boost entrepreneurship and inspire self-starters to develop their own businesses. In 2014, LSBF spoke to Will Butler-Adams from Brompton Bicycle, Guy Hayward-Cole from Nomura Bank International, with former British Prime Minister Sir John Major, entrepreneur and investor Deborah Meaden, Google UK sales director Kevin Mathers and BBC Worldwide CEO Tim Davie. Kicking off 2015, LSBF hosted interviews with Andrew Miller, CEO of Guardian Media Group; Jill McDonald, CEO of McDonald’s UK; Kevin Costello, CEO of Haymarket Group; Amy McPherson, CEO of Marriott Hotels Europe; veteran BAFTA-winning broadcaster Jon Snow; live chats with Kevin Ellis, Managing Partner of PricewaterhouseCoopers, Claudine Collins, Managing Director of MediaCom UK, and Robert West, Partner at Baker & McKenzie; Mark Wood, CEO of JLT Employee Benefits; Tom Cijffers, MD of Zenith UK; and, most recently, Guy Hands, founder of Terra Firma. About London School of Business and Finance (LSBF) London School of Business and Finance (LSBF) is a global provider of professional, executive, vocational and higher education. With campuses across three continents and 40,000 students from over 150 countries, LSBF offers industry-relevant programmes that are tailored to the career goals of today’s students and professionals. Under the royal patronage of Prince Michel of Kent, LSBF has a powerful e-learning platform and over 130 programmes, covering industries from fashion to finance. LSBF is a Queen’s Awards for Enterprise winner and an ACCA Approved Learning Provider Gold, in the London, Birmingham and Manchester campuses.
Strategy
By Stuart Poole-Robb
24 Corporate Vision September 2015
Strategy
Car Industry Races Towards Digital Disaster The auto industry is accelerating into the digital era with scant regard for cyber security.
The car manufacturers’ IT revolution began over a decade ago with the introduction of infotainment systems into high-end models. Since then, functions such as braking have also been digitalised and in the US, Google has already launched a new generation of fully-computerised self-drive vehicles. Google’s self-driving cars are reported to have covered almost a million miles of American road already. So far, Google is attributing any collisions that may have occurred to human error on the part of people driving other vehicles; they may well be right. But the high level of digital sophistication in cars like these opens a whole new Pandora’s Box of cyber threats for road users. Like any remotely-connected device, the new generation of computerised motor vehicles can be hacked in order to break into the driver’s organisation’s IT system. As a growing number of vehicles have unsecured infotainment systems that enable car owners to access their corporate emails via a ‘smart’ dashboard, they are now starting to provide determined hackers with a way of accessing corporate IT systems. The problem facing the industry is that the more wireless connections cars have then the greater the number of onboard IT systems and the easier the vehicles are to hack. There is now growing evidence that in-car software vulnerabilities now beginning to pose a safety as well as a security risk. Fiat Chrysler has owned up to a major digital security flaw in its vehicles. It is now recalling 1.4 million vehicles in the wake of a report in the US’s Wired magazine detailing how software programmers were able to take over a Jeep Cherokee being driven on a Missouri highway. This is the latest in a string of in-car software vulnerabilities which have been identified by various carmakers. Last year, for example, BMW had to issue a patch for 2.2 million cars that link to its ConnectDrive platform. The Fiat Chrysler recall is seen as a landmark event for the auto industry. Previous industry concerns over digitalisation have largely focused on security flaws that allowed hackers to open door locks or gain access to corporate networks via in-car infotainment systems. But the Jeep Cherokee cyber breach enabled the hackers to take control of the vehicle’s brakes and accelerator. Crucially, the hackers were
able to accomplish this via a zero-day exploit, enabling hackers to take remote control of Jeep Cherokees via the internet by sending commands through the Jeep’s entertainment systems to dashboard functions such as steering, brakes and transmission. Terrorists could take control of a vehicle This effectively means that digitalised vehicles whose IT systems have not been adequately secured face the real possibility of being controlled remotely by malicious hackers. Terrorists, or even a hostile foreign power posing as terrorist hackers, could take control of a vehicle carrying, for example, a senior politician or general to orchestrate a fatal accident. The ability to hijack a vehicle remotely and anonymously also enables terrorists to create havoc by commandeering vehicles and aiming them at public buildings. For example, container trucks carrying petroleum could be hijacked and sent hurtling towards the Houses of Parliament. In another grim scenario, terrorists could cause massive motorway pile-ups with the resultant horrific loss of life. On the plus side, the computerisation of cars can potentially transform personal transport and even save lives. According to Google, the launch of driverless cars is proving the new computerised vehicles to be safer than those driven by humans. They have sensors designed to detect objects as far as two football fields away in all directions, including pedestrians, cyclists and vehicles—or even fluttering plastic shopping bags and rogue birds. The software processes all the information to help the car safely navigate the road without getting tired or distracted. Digital reaction times are, of course, also naturally much faster than those of human drivers. Google claims that the only accidents that have occurred involving its automated driverless cars were caused by human drivers rear ending them. There is, however, a very real danger that today’s Internet-connected vehicles may soon be superseded by cars that communicate with one another and respond to wireless communication from traffic lights. Some will have safety systems that will automatically apply the brakes to avoid a collision. The danger is that wireless connections can easily be hacked, potentially enabling OCGs or terrorist groups to gain control of the connected vehicles.
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In cyber security tests, wireless hackers have usually driven alongside or at a safe distance from the target vehicle. But now even this degree of human involvement may not be necessary. US-based company Aerial Assault unveiled a drone at the Def Con hacking conference in Las Vegas on 9 August that is any CIO’s worst nightmare. The drone, which costs only $2,500, includes software capable of looking for weaknesses in any unsecured wireless networks in range. It records information about vulnerabilities while capturing the precise GPS coordinates of the target. And while there are, as yet, no confirmed reports of drones hacking into cars on the road, there are reports of them be used in ways that suggest they are already being used in ways not intended by their manufacturers. At the end of July, the US Department of Homeland Security announced that there had been at least 500 separate incidents since 2012 of drones hovering over sensitive sites and critical installations including military bases and nuclear plants. In January of this year, a drone even crashed in the grounds of the White House. There is now a very real danger that the auto industry may be heading for a digital disaster unless it pauses to take stock of the full security implications of in-car digital electronics, particularly in the case of cars connected to wireless networks. In this era of quality and safety control, it is essential that the car industry uses third-party ethical hackers to test their in-car systems before releasing newly-computerised vehicles onto the roads. Stuart Poole-Robb is the chief executive of the security, business intelligence and cyber security adviser, the KCS Group Europe. For further information please contact: Tony Glover Director of Communications Knightsbridge Company Services Ltd | Office: +44 (0) 207 245 1191 | Fax: +44 (0) 207 245 6399 | Out of hours: 07557193410
Strategy
26 Corporate Vision September 2015
Strategy
LIBOR Manipulation; the Potential Impact on Businesses Jonathan Dinsdale, of law firm Colemans-ctts, looks at how businesses can identify whether they have been affected by LIBOR rate manipulation, and what to do about it.
The manipulation of LIBOR has remained in the headlines since speculation about its existence first appeared prior to 2012. It has helped to drive an increasingly intense focus on the activities of UK banks and, alongside a rise in scrutiny of regulatory obligations and a general post-recession malaise, has been responsible for greater nervousness about loss among those who feel that they might have been affected. The London Inter Bank Offered Rate (LIBOR) LIBOR is an interest rate that is set jointly using estimates provided by leading London banks. It is essentially the average of those estimates (calculated once a day) and is the rate at which leading London banks will lend to one another, as well as guiding interest rates other banks apply to a broad selection of financial products, from mortgages to derivatives. The LIBOR manipulation scandal is actually very straightforward. What is thought to have happened is that the estimates that were provided by some banks were not their actual, accurate estimates but bogus figures – agreed between conspiring banks - that were submitted so as to be able to influence what the final rate would be. A number of banks are said to have been involved and in 2012 the Financial Services Authority (now the Financial Conduct Authority) started fining banks eight and nine figure sums for ‘failings’ relating to LIBOR.
Homes is the most recent and high profile example of a claimant taking action against a bank (Barclays) as a result of the LIBOR manipulation revelations. However, this case was settled a few weeks before the trial began, shutting down the opportunity for other Barclays customers to cancel contracts where they could prove the interest on those contracts was calculated on the basis of the manipulated LIBOR rate. It was hoped that guidance would be offered in this case on whether others could take action but the matter never made it to court. Guardian Care Homes has a second piece of litigation ongoing against Lloyds bank this time – for over £8 million in relation to Lloyd’s involvement in the LIBOR manipulation. It is hoped that this case will result in some judicial guidance on the matter, although many believe the bank will settle to avoid the damaging revelations of a trial. Other business claims SMEs, partnerships and sole traders could potentially make a claim where the terms and conditions of a financial product that has been purchased indicate that LIBOR was used as the benchmark from which to calculate interest payments on that product. If LIBOR is not involved then no claim can be made.
Which banks were involved? Citigroup, The Royal Bank of Scotland, Barclays, Lloyds and JPMorgan have all been implicated, many of them fined. Most recently, Deutsche Bank was fined £227 million by the FCA for LIBOR and EURIBOR failings, and for misleading the regulator. Is there a cause to take action? Yes. For businesses that may have used financial products that were benchmarked to the fake LIBOR rates there might be a cause of action. Guardian Care
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The test to establish whether there might be a cause of action once a LIBOR connection has been established is as follows: 1. Defining the level of loss that a business has suffered. 2. Proving, on the balance of probabilities, that this loss was caused by the bank’s manipulation of LIBOR. This is not a particularly straightforward task, although is likely to be easier for any customers who defaulted on covenants in the products they purchased as a result of the LIBOR rate at the time that they defaulted. Examining those covenants, and whether LIBOR played a part in their breach, will be a key part of working out whether a claim can be made. Note: all claims are subject to time limits of six years. The limit on a contractual claim will run from the date of the agreement and a claim in tort (for example, from negligent misstatement) from the date of the breach. A claim can be issued protectively so as to stop the limitation period running.
Strategy
28 Corporate Vision September 2015
Strategy
What the World of Trading Can Learn from Online Gaming The extensive choice and affordability of online gaming are just two of the reasons behind its growing popularity.
In the online gaming industry a smooth design ensures the user can not only engage with the game but easily access the features too. In comparison portfolio managed platforms in the personal finance industry can often seem cluttered and intuitive. Despite this there are a number of similarities between the two industries. Roy Shaham, CEO of GetStocks said: “One similarity is that many online trading platforms that aren’t official brokerages use the same methods as gambling sites, they lure customers and place bets against them – it’s essentially the same as spread betting”. “GetStocks also brings the online trading industry closer to the gaming industry in a positive way – through an intuitive UI and beautiful design, something that, to date, has been missing from the industry”. In what ways can the trading industry benefit from a new, transparent and beginner friendly platform? He added: “The trading industry stands to benefit greatly from GetStocks emergence into the world of online trading and the creation of a transparent investment platform that combines real social trading with the security of a licensed brokerage”. “GetStocks is an online brokerage designed to make stock trading accessible to all, including beginner traders looking to responsibly grow into experienced investors. Uniquely transparent and user-friendly, GetStocks is a modern-day brokerage platform that allows investors to trade in real equity, follow the portfolios of other investors, and even copy them trade for trade”. With competition in web and mobile platforms increasing how do GetStocks differ from some of their rivals? Being built on the idea of the customer making money is how GetStocks like to differentiate themselves.
“A number of competitor’s platforms offer traders stocks at market prices, with a generous (for them) spread, combined with high leverage, making them no different to spread betting companies. Many customers find themselves playing against the house by way of large spreads and the odds are always tilted against them. GetStocks on the other hand, is a service whose success is built on the all too novel idea of the customer making money”. However with GetStocks becoming the first stock brokerage to create an open market for money managers, they can quite rightly be seen as pioneers. “Another exciting and unique difference is that GetStocks marks the first time that a real stock brokerage has created an open market for money managers. You don’t need to entrust your money to just anyone, now you can evaluate the records of successful traders who are earning money, follow them and even copy them trade for trade”. Not surprisingly GetStocks have managed to reach out to a new audience through their platform which makes them confident of securing future investors. “This, along with the lack of a transparent, beginner friendly alternative gives us a high degree of confidence that our approach will attract new investors. It’s about creating a new level of confidence and combining it with the high level of design that customers are used to from online services in other industries”. Clearly these are exciting times for GetStocks but how does Roy see things developing over the next few years? Is there a lot to look forward to? “We know our company will be built on trust and reputation, not the lure of free trades and other gimmicks. We want to build real relationships with our customers and help them navigate the financial world so they can take charge of their financial
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futures. Right now, we’re focusing on building a base of users in the UK and growing throughout Europe. We’re also preparing for a launch later this year in the U.S., which will expose us to an exponentially larger group of traders and investors”. “What will sell us in the end isn’t going to be glamour or some get-rich-quick scheme, it will be our reputation. We’re looking for our customers to make money over time, grow as investors and recommend us to friends and family. We’re not going after a user base that will quickly become disillusioned and inactive, we’re focusing on steady growth and repeat customers, and we’re in this for the long haul”.
Strategy
30 Corporate Vision September 2015
Strategy
Slow Broadband Effecting Business Operations The government have recently announced the rollout of their funded broadband has now reached more than three million homes and businesses in the UK.
More than 25,000 small and medium sized businesses across the UK have also benefitted from the government’s voucher scheme which helps businesses get super-fast broadband for a more affordable price. The government have made available £40m for 2015/16 however with the scheme based on a first come first serve basis not every business can be guaranteed super-fast broadband. Having the fastest broadband of any European country by 2015 was the government’s aim in 2012. However some businesses located in the middle of some of the UK’s major towns are receiving a poor service at tediously slow speeds from their broadband provider. Rob Hilborn, Head of Strategy for Broadband Genie a broadband information website argues businesses can benefit from the opportunities the internet offer but a slow broadband connectivity can significantly hinder their day-to-day business operations. He said: “The internet offers amazing opportunities for businesses to explore new markets and easily connect with clients and suppliers. But a firm stuck with slow broadband could find that simple day to day tasks take longer than they should. Transferring files or sending large emails can become a laborious process, while even simple web browsing can be noticeably impacted if just a few employees are sharing a slow connection”. As previously mentioned some businesses located in rural towns or in the middle of some of the UK’s major towns are still receiving a poor service from their broadband provider but how can they improve their current situation? Rob Hilborn added: “Businesses which are currently suffering poor broadband service do have some options to improve their situation right now. Business broadband providers can usually offer at least a small upgrade, perhaps by combining several lines. There is the option of leased lines for firms that have specialist requirements or are willing to pay for the very best”. Investment in the HS2 project was one of the government’s major solutions to rebalancing the economy however Patrick Tame CEO of digital marketing and ecommerce recruiter Beringer Tame argues investment in physical infrastructure has neglected the improvements needed in broadband.
He said: “To suggest a linear railway track from London to Manchester will solve the nation’s disconnect of wealth is an absurdly archaic approach to national business strategy. Improved transport links are likely to encourage places such as Manchester to operate as insularly as satellite cities to the capital rather than regional hubs whose wealth is seen across the local area. Improved broadband is essential to delivering effective business to outlying regions. It is superfast broadband rather than the development of HS2, which will drive profitability and achieve an integrated economy for the UK”.
“We’ve been incredibly impressed with the service Relish has provided us. The connection is reliable, even at peak times, and we haven’t experienced any issues at all. Compared to what BT could offer us, we’re really happy with the results, and at a fraction of the price we were quoted to install a fiber optic line”.
He further added: “Until superfast broadband is fitted to the whole of the UK, businesses will continue to struggle in silence with debilitating connection speeds. The government should act and quickly”.
London is home to some of the fastest growing businesses in the UK so it’s vitally important these companies have sufficient internet speed to match their ambition.
A slow broadband can affect all types of businesses but it’s the recruitment industry which suffers the most as Patrick Tame explains.
Chief Marketing Officer Will Harnden at Relish said “London is home to some of the world’s most talented entrepreneurs and fastest growing businesses, yet shockingly, some of the key business areas in the capital suffer some of the worst internet speeds in Europe”.
“In recruitment, rapid broadband speeds are essential. Even if waiting for an email or invite to load seems like one of life’s minor inconveniences, leaving the problem to linger means you end up forgetting the issue until it breaks the camel’s back. If there’s a hire at your fingertips and you’re unable to get in touch due to stalling broadband, it could be a deal-breaker”. Underinvestment in IT systems is one just one of the reasons behind businesses requiring greater bandwidth to remain competitive. Charles Bligh, Managing Director at TalkTalk Business added. “More than a third of large firms admit they underinvest in IT systems, according to recent research from TalkTalk Business in conjunction with Ovum. This, coupled with the rise of business grade applications, means companies need greater bandwidth and capacity to remain competitive and drive revenue and efficiencies”. Wick & Tallow and Arancini Brothers suffered with poor broadband when their businesses first started up before finding an alternative. Before Wick & Tallow had Relish business broadband installed their connection was unreliable meaning simple things like sending large images or keeping the website updated became a chore. Since finding an alternative their broadband has significantly improved.
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“As a young business, Relish means that our broadband connection is one less thing we need to worry about and spend time trying to sort out. We would absolutely recommend it to anyone facing the same issues.”
So what kind of action did Relish take to change the fortunes of these businesses? “At Relish, we conducted our own research to uncover the sheer extent of the problem. It highlighted that only six per cent of businesses in City of London have access to superfast broadband, with average broadband speeds in the area of just 11.9 Mbps way below the capital-wide average of 20.5 Mbps. We also discovered that the 420,630 SMEs across London collectively use 50,400 days a year arranging for new broadband installations to take place, equating to £7.8 million in lost productivity”. Relish are very much seen as your alternative internet provider and with a no hassle approach many local businesses have turned to them for a solution. Not needing to wait for somebody to install your broadband is how they like to differentiate themselves from their competitors. “At Relish we’re committed to providing London businesses with an alternative solution, helping them get online quickly and easily without any hassle. Our exclusive wireless networks mean businesses can get online, fast, without needing to wait for a broadband installation guy, long contracts or unwanted landlines”.
Strategy
32 Corporate Vision September 2015
Strategy
When running a business, Directors and Officers of SMEs should be aware that just like bigger and established companies they are subject to the same kind of regulations. Recently the number of Directors and Officers claims are increasing, however only a very small percentage of companies are insured against a Director and Officer claim. In the case for SMEs where they do not have an HR or Legal team to help resolve claims, neither do they have the insurance policies geared to mitigating claims and handling the aftermath. Directors of SMEs need to be aware that insurance policies like legal expenses and professional indemnity do not help protect their personal assets and can not always cover the costs of a claim or incident.
Health and Safety - clearly this will vary greatly depending on what sector you’re involved in and what your business activity is, but be aware of your obligations and your responsibilities.
Stephen Lark, the Managing Director of Lark (Group) Limited a UK based insurance broker, discusses the different types of cover SMEs may need in regards to the range of risks an SME may be faced with, whether they have just launched or are established in their chosen industry.
Once an SME has launched and is developing, the risks surrounding it change and some increase. Additionally as a business becomes more successful, there will be more to protect.
Of recent, many start-ups have turned to crowdfunding to launch their business. Crowdfunding allows many investors to support and fund a project or start up. This form of investment also presents increased risk. Funding a start-up this way means more external shareholders or lenders are involved which increases the risk of a claim in the event that the business fails to perform. There is now a much greater chance of a shareholder or lender looking to apportion blame for their loss, and hence the increased importance of Directors and Officers insurance. Aside from the obvious exposures - any business property or stock should be insured - for smaller companies who are operating from home they should not rely on home insurance unless they’ve checked that business items are covered. As the business grows this becomes more important, for example when you get your own business premises. Is the company responsible for any goods whilst in transit? Or do you have company vehicles or people using their own vehicles on company business? Accordingly, it is necessary to look beyond insuring the physical property, and look to those areas that could cause financial loss to the business and potentially affect its long-term viability; Business Interruption - think about what impact a serious claim could have on your business, whatever the size, and what financial assistance would be needed to carry on in the event that the business suffers an unexpected event (e.g. damage, breakdown, denial of access etc.). It is necessary to have appropriate cover in place. Is your business reliant on one supplier, manufacturer or client? If so, make sure that your business has protection in place should they have a claim that prevents them supplying or buying from you. Liability exposures - when the Company has employees, you’ll need Employer’s Liability cover as a legal requirement, and also Public Liability cover to give the Company protection against any claims from third parties. If you’re selling a product, you’ll need Products Liability cover; and the cost of this will vary according to what your supplying, to whom and where they’re based so do investigate this before accepting a new contract if it means trading in a different business sector or country. Professional Indemnity - if the company is providing advice or expertise then you should be buying this protection in case a client or third party suffers financial loss as the result of your advice. In some business sectors you’ll be forced to buy the cover through regulation, and in others it is often seen as a requirement in contracts with clients. The policy should also provide protection against the costs involved in defending a claim. Directors and Officers - both Directors and Officers of companies can be held personally liable for actions that they take whilst carrying out their role. Claims could come from an employee, regulators, customers, shareholders or lenders. It’s fast becoming protection that all companies buy; and will also include the legal costs of defending a claim made.
Key Person cover – This gives the company protection against financial loss (or increased cost such as recruitment etc.) through accident or illness of key people. Cyber Liability - this could be as relevant to a start-up, but cyber attacks are becoming more frequent and high profile. For companies holding sensitive client data or with on-line sales this is becoming a policy which should be bought. Raising funds - new shareholders or lenders will be relying on previous accounts, business plans and statements made by the Directors about the business and its plans. These will be scrutinised closely if things don’t work out as planned so make sure that you have protection in place via your Directors and Officers policy. Where is your company operating - think about travel insurance needs and if you are operating in higher risk territories, you should also think about kidnap and ransom insurance. You’ll need to ensure that you are buying the right protection for your business as it grows and the role of Disaster Recovery planning increases. You’ll need a robust plan to get your business up and running again as quickly as possible, and to minimise your loss and the impact on your customers who, for example, may find it very easy to switch to an alternative supplier in the event that your company suffers a serious fire or flood. Take advice on your plan, keep it up to date and test it regularly to make sure that it’s still appropriate. Think too about PR, and plan how to notify and inform employees, suppliers and customers in the event of a serious incident. Since being in the risk industry it has become clear that generally people, and perhaps especially in smaller businesses, don’t consider the insurance implications at an early enough stage in the process. Make sure that your insurance protection is right for your business - that you understand the risks involved in what you do and then that you are properly insuring those risks that are too great for your business to carry. Take professional advice, and tell your broker how your business is changing - new products, new contracts, operating in new countries, new sites, and new sales methods. It is important for the Management team including Directors and Officers to really think about the benefits of insuring themselves as well as the company against the risks they face. The more thought and notice that you can give to this the better. Look to have one person in the business that is ultimately responsible for risk and insurance this should help to give focus to these areas and to keep things under review as the business changes and grows.
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Strategy
The Importance of Social Media in the #duediligence Process 34 Corporate Vision September 2015
Strategy
Kate Schmit, Partner and Siobhán Langwade, Associate at Stevens & Bolton LLP When acquiring a target company or business, the due diligence (“DD”) exercise is a core part of the acquisition process. This gives the buyer the opportunity to delve into the business from a legal, financial and commercial perspective while providing insights into how the deal should be structured and priced. The aim of DD is to really get to know the business, unearthing issues giving rise to potential liabilities or otherwise undermining the value of the target.
• All social media accounts • Who is responsible for managing the social media output and who else has access • The procedures and policies around what is posted • Whether employees are obliged to manage their personal social media accounts in a way which does not bring their employer into disrepute • All postings in the last 6 months including deleted postings
The three traditional limbs of DD are commercial, financial and legal with clients, lawyers and accountants all understanding their part in the process. The responsibility for these elements tends to break down along traditional lines; • the client undertakes commercial DD to get to know the business, • the accountants look at the financial and tax aspects of DD; and • the lawyers deal with reviewing contracts, employment issues and real estate etc.
Although the procedure of raising DD enquiries of the sellers is the tried and tested method when starting a DD exercise, Brandle’s Roberson queries if the traditional DD format can be so easily applied to assessing the social presence of a target company or group. He comments that “it will be a natural evolution to see social media presence forming part of the DD exercise in an M&A transaction however the issue is that target companies themselves are ill-equipped to know the extent of their own social presence and often are only aware of 50-60% of where the company is being represented in the social eco-system”.
In our experience, amongst all of this activity, the social media presence and activity of the target often fails to come under the same scrutiny and social media is still not included as a standard part of the DD process. Chip Roberson, founder and CEO of Brandle Inc., a California-based software company specialising in the inventory of a company’s social presence comments that “at Brandle, companies approach us postM&A transaction to carry out a tidy-up exercise of the target’s social media. The acquiring company would benefit far more from requiring the sellers to carry out this exercise pre-closing. Not only does this save on costs but will also give the acquiring company insight into how disciplined the target is and the strength of its governance procedures”. Social media is a key form of business communication, influencing the way businesses market, advertise and communicate with the world. In some markets Facebook is now the single largest media platform (outperforming print and TV). Its power is the ability to directly reach customers and business peers, any time, no matter where they are. Through a brand’s social media presence customers, competitors and other online users see the opinions of the organisation, who it follows, what it stands for and how it responds to its customers. In addition to looking at the internal social media procedures and policies of a target, a buyer may also want to audit its wider social media presence and the ‘voice of the customer’ reflected in the interactions that the target and others have through social media channels.
In the UK there is currently little to no formal guidance on how companies should and shouldn’t be using and policing their social media accounts. This makes it difficult to know what constitutes standard market practices on social media. In the US this is beginning to change, particularly in the financial industry. The Federal Financial Institutions Examination Council (FFIEC) issued guidance in 2013 to educate US financial institutions (particularly the mortgage industry), on their use of social media and compliance obligations. The guidance sets the finance industry standard on how a company’s social media platforms should be utilised and promotes: • identifying all applicable laws that govern a company’s online activity and putting this into a social median policy so that all members of staff will be sensitive to reputation risk; • using social media monitoring tools that can identify anything that may cause a negative reaction and respond to complaints; and • training employees to use social media professionally.
In considering a social media due diligence exercise a good starting point may be to look to some of the very public cautionary tales where social media has bitten back. Salutary lessons can be learned from Googling “social media fail”, returning a catalogue of slips and trips. The majority of these are drawn from companies’ corporate social media accounts rather than the personal accounts of employees. Certain factors are common - poor judgement or taste, staff inexperience or lack of proper internal procedures. We see a myriad of examples of brands ill-advisedly linking posts to anniversaries (e.g. sales promotions linked to 9/11), natural disasters or other trending hashtags without fully understanding or thinking through the context. Some other notable examples include: • American Apparel marking 4th July with a picture of fireworks posted on Tumblr. The image chosen was not of fireworks at all, but the 1986 Challenger Shuttle disaster - cue it being rapidly taken down and an apology forthcoming. • During the HMV administration job losses were being announced. Staff members used the official HMV Twitter account to provide a running commentary on proceedings. One even provided the sage advice “Never fire the social media people until you’ve changed the passwords: @ hmvtweets has gone rogue” Undoubtedly these are extreme examples, but given the potential reach and impact of a company’s social media footprint, why does this not form a standard part of DD? Business use of social media continues to grow apace and the incidence of spectacular social media fails demonstrates that a number are still learning and adapting to the new normal. In undertaking transactions the market is only just beginning to see DD processes and procedures adapt to address the impact of social media. No market standard has developed in the UK yet as to what is an appropriate regulatory system for a company to apply to its social media eco-system, nor who is responsible for assessing this as part of the DD review. What is clear is that, on a deal, thought should be given to how any social media DD is to be undertaken and by whom.
The social media footprint of an organisation is potentially huge. Clearly the target’s official social media accounts should be included in a tailored DD exercise, but what about the personal LinkedIn or Facebook activity of employees that identifies a link to the target? Some careful thought should therefore be given to the scope of any social media DD exercise. So where do you start? It is perhaps the corporate social media profile which is easiest to subject to DD. Initial enquiries could include requesting details of:
Kate Schmit
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Siobhán Langwade
Strategy
36 Corporate Vision September 2015
Strategy
The Challenges of Audit Management for the Quality Professional Quality professionals understand the many connotations that can spring to mind from the word ‘audit’. There are many descriptions that go along with this word, too many to list here. For quality professionals, audit management is one of the most critical and central parts to their role which, of course, can then mean that it is one of the most challenging and time-consuming. When analysing resources and tasks that quality professionals need to conduct for audits, a number of challenges quickly emerge from conventional audit management approaches. Traditionally, audit management systems are comprised of a combination of spreadsheets and other manual processes. The manual steps required for these systems add to an already limited audit time period open to quality management professionals.
Connections between multiple systems can help quality managers maintain an effective audit management system. As audit findings will likely lead to corrective and preventive actions and a number of follow-up tasks, it would be extremely valuable to the quality professional to view and analyse non-conformances and findings at the touch of a button. Without an automated system, it can be difficult to generate the subsequent audit report and review trends because these silos of information are almost impenetrable without an excessive amount of time and effort.
In the planning stage, manual steps can mean a number of time-consuming tasks including planning the audit calendar, pulling together the appropriate scope item documentation, notifying (and re-notifying!) people of their individual actions, as well as finding and printing any checklists which are to be used. This may work when a business is small but this system becomes almost impossible to scale as the business grows. Critically, it also lacks the closed-loop environment necessary for effective quality management and auditing. Planning and scheduling audits can also be deceptively complex – in fact, feedback from quality management professionals’ class it as one of the biggest audit management headaches. Another challenge is that the annual audit calendar can have small but intrinsic variations year on year. Annual audits are scheduled but there may be audits that arise on an ad-hoc basis. Managing the resources to make sure everything gets done can be a major stumbling block for quality managers, particularly when it requires input and commitment from other people (often out with direct line management): co-ordinating others’ time management and ensuring they are properly trained to complete an audit is difficult. This becomes even more complex with information held across disparate systems.
September 2015 Corporate Vision 37
Without this, the business is unable to see the big picture of their audit management program and is missing the opportunity for continual improvement. In addition, it adds complexity and unnecessary challenges to the role of the quality management professional.
Strategy
By Stuart Poole-Robb
38 Corporate Vision September 2015
Strategy
What Do You Do When Your Organisation Is Hacked? Somewhere this summer, the chief executive officer (CEO) of a major organisation has just got off a plane and is looking forward to a well-earned weekend away with two untouched days stretching ahead. But, as soon he is in the cab heading for the hotel, he checks his smartphone with a sinking heart...
There is a string of missed calls and a series of emails from his chief information officer (CIO). He scrolls through increasingly urgent and panicked emails as the full implication of what has happened begins to sink in. He makes a garbled apology to his family and immediately books himself on the next flight home to try and deal with what feels like a waking nightmare. On the plane back, the CEO fully recognises, possibly for the first time in his career, the true value of his company’s database. Sensitive customer data, confidential client records, financial information, product designs and business strategies may have all been copied and stolen or, what can be worse, encrypted and ransomed. The company bank accounts may have been haemorrhaging money over-night. Reformed fraudster and FBI consultant Frank Abagnale (whose earlier life provided the inspira-tion for the film ’Catch me if you Can’), reports that a single Russian organised criminal gang (OCG) makes US$20 billion a year from cybercrime - more than most US corporations. As his heartbeat begins to return to normal, the CEO must formulate a plan of action in several key steps: • The first step should be to identify the source of the breach: It is essential that an external con-sultant be hired to help fix the problem immediately. Whatever gaps there were in IT security have already been overlooked by in-house IT and existing consultants. • Secondly, secure the system: As 80 per cent of all cyber security breaches can be traced to in-ternal staff whether by accident or design, it could be that someone is trying to cover their tracks, often because of shame at a genuine error than direct dishonesty, which is sly also sometimes the case. Again, for this reason, external consultants are essential. • Thirdly, assess the full extent of the damage: More data may have been compromised than ini-tially realised. A full search on the Dark Web using embedded sources often reveals not only how much of the company’s sensitive data is already for sale to the highest bidder but also data that was leaked or stolen in previous unrecognised breaches. A full forensic search is now re-quired internally on the compromised systems, ideally with the aid of
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products that can inspect logs and trace the start of the breach. External assistance is also needed here too. Fourthly, get your story right: Once the company is certain of how much cash it has lost and how much sensitive data has been compromised, it should contact clients and tell the truth, offering to help as much as is feasible. Legal advice regarding corporate liability should be taken at this point and any existing insurers should also be informed. Fifth, prepare for a full scale public assault: Write a press release. Although the first instinct might be to try and cover up a data breach, a major attack will leave casualties in the form of dis-gruntled customers and clients and the truth of a major attack will usually out at some stage. Sixth, inform the authorities: Unfortunately, cyber law enforcement is in its infancy and the au-thorities are currently overwhelmed by the sheer volume of cyber crime. The US Federal Bureau of Investigation (FBI), for example, is reported to regard any cyber crime under $100 million as too small to bother about. It may, however, soon become law to report all significant breaches as gov-ernments are increasingly concerned at by the growing link between cyber crime and terrorism. Seventh, strengthen the organisation’s IT defences: Again, it is essential that an outside con-sultant be brought in to identify weaknesses in the company’s IT security. This also dovetails, of course, with physical security and due diligence. Lastly. The organisation should safeguard against future attacks: The company should de-velop a fresh set of security protocols to ensure against similar breaches in the future.
It is vital that every organisation creates a detailed action plan in the event of a cyber breach even if it mistakenly believes it has little data worth stealing. Ideally, this should include hiring an external con-sultancy carrying out independent penetration tests to test the robustness of the system in the increas-ingly likely event of an attack. This plan should be regularly updated. Should a breach occur, the com-pany should be prepared immediately to send customers an official statement and organise telephone help
September 2015 Corporate Vision 39
desks to cope with a high volume of customer calls. For example, when Carphone Warehouse was hacked earlier this month (August 2015), the personal details of 2.4 million customers were com-promised. It is also crucial that, in addition to having systems in place to deal with the breach itself, that the company has a prepared public relations strategy in place for dealing with reputational damage arising from an attack that can be put into operation as soon as the breach is detected. Organisations should also consider taking out cyber insurance. This, however, is still a partial solution for most organ-isations as the insurance industry is still trying to assess cyber risk and does not yet provide coverage on the scale needed to insure against the full fallout from a significant cyber attack. Once an action plan is already in place, the CEO receiving news that his organisation has been hacked can continue to enjoy some of his weekend away, keeping in contact with key staff and a third party consultant via Skype and email to ensure that the plan is being implemented as previously agreed. On the other hand, failure to have such an action plan in place could ruin not only the CEO’s weekend but also the rest of his career as disgruntled clients and furious shareholders call for blood in the wake of a significant cyber attack. Stuart Poole-Robb is the chief executive of the security, business intelligence and cyber security adviser, the KCS Group Europe. For further information please contact: Tony Glover Director of Communications Knightsbridge Company Services Ltd | Office: +44 (0) 207 245 1191 Fax: +44 (0) 207 245 6399 | Out of hours: 07557193410
Strategy
40 Corporate Vision September 2015
Strategy
Laurence Painell, VP Product Management & Marketing, IDBS
Tell us a bit about the company and your products. IDBS is a British software company founded in 1989. We’ve since gone on to become a leading provider of software for research and development (R&D) organisations – helping them securely capture, manage, share and exploit structured and unstructured data. The company is still privately held, with offices across Europe, Asia and the US, employing over 250 staff and serving over 50,000 researchers in 25 countries – including over 75% of the top 20 pharmaceutical companies. The company was founded by Neil Kipling, who remains our CEO today. We have two product families: ActivityBase, used for screening and ‘high throughput’ testing, and E-WorkBook – our main product platform which we’ve focused a lot of effort on. The foundation of E-WorkBook is the electronic laboratory notebook (ELN), which scientists use to document research and procedures undertaken in the lab – something that has historically been paper-based, inconsistent and unreliable as an audit trail. We’ve also added more complex functionality to E-WorkBook over time, such as data analysis, and the ability to capture all of the context around experiment data. There are a whole range of other things happening within E-WorkBook, through integrating E-WorkBook with other third-party lab technologies via our various APIs. What do you believe are the main strategies which have helped you transform from a small start up to an international company? We are still driven by the same goal as when the company was founded in 1989: to provide software that really matters, and to help organisations discover and deliver products that transform the lives of people worldwide. We’ve been ahead of the curve, in many respects. From the start we’ve been building software that links data to data, data to people, and people to people. This has become steadily more important in the research and development (R&D) space, so timing has been on our side. Partnerships have also been important, and have helped foster our growth. This is based on accepting that we simply cannot do everything or build everything – there are broad commonalities in R&D across sectors, but we need external help to be the very best in different scientific domains. We’ve ramped this up recently, announcing two significant new partnerships this year with ChemAxon and ACD/ Labs. We also understand that our customers need to integrate this software with other technology in their labs – so again, forming win-win partnerships has been key. How does your product compare to others in the R&D software market? E-WorkBook has been the market leader in terms of management of a company’s intellectual property and critical information – and we’re now focusing
on expanding this beyond the traditional corporate boundaries, by enabling the same capabilities across the firewall and into other organisations. This will allow customers to tap into the even greater opportunities afforded through working with other organisations.
work and sharing ideas. In some cases we have scientists already demanding informatics and data systems to be accessible on a range of touch-screen and mobile devices, from tablets and phablets through to projection in fume hoods and even on safety glasses.
Our ultimate aim is to create a true, integrated backbone for R&D – our products are designed to complement each stage of the R&D lifecycle by allowing organisations to capture, manage and search critical data. Both of our platforms (E-WorkBook and ActivityBase) have had a long history of being tightly integrated with other tools and systems to ensure the robust and seamless flow of data, which means important decisions are based on the right information.
How are you adapting your products to keep up with technological advances? This is a particularly important point for us at the moment. We’ve recently brought a new CTO – Peter Murray – on board, to help us bring a modern approach to the way we deliver R&D software. We are blending our deep domain expertise with an agile, start-up mentality, bringing our products to market faster and embedding a real culture of empowerment in the company.
How are market forces reshaping the way R&D-driven organisations operate? On a fundamental level, R&D is changing. We’ve seen a number of trends and developments come to fruition in the past few years, taking the laboratory from a paper-based working environment to an increasingly automated, technology-supported, cost-conscious operation. Across the board, R&D organisations are under significant pressure to cut costs, bring products to market more quickly and ramp up innovation. Straddling these developments, we’re seeing a fundamental change of approach: R&D is becoming a collaborative endeavour. In pharmaceuticals, for instance, the larger incumbents are becoming more like intellectual property hubs – managing IP and outsourcing much of the lab work to smaller, nimble research organisations. Announcements of new partnerships between like-minded industry players are coming thick and fast – and we’re also seeing industry team up with academia. Even internal research projects are becoming more collaborative. The days of a dozen medicinal chemists sitting in one room, making project decisions, are gone – these projects now involve cross-discipline teams with scientists from different functions all taking part. Of course, this new R&D environment is having a knock-on effect in the way our software is used and the approaches we take with product development to help facilitate this new way of working. How are technological developments impacting on the way scientists use IDBS’s products? While the lab environment is changing, the world around it is changing even faster. In fact, it’s likely that the ‘lab of the future’ will be rooted in the consumer technology of today – this is having a huge impact on the way scientists use technology, including our own, in the lab. A new generation of scientists are entering R&D, and they will increasingly want to connect with projects in more ways than just a laptop or desktop computer. As I mentioned earlier, R&D is also becoming a far more collaborative process – and technology providers will have to respond. We can expect to see more ‘social’ features, for example – like commenting on others’
September 2015 Corporate Vision 41
We’re also now placing User Experience (UX) at the heart of our product development, matching up those demanding and shifting expectations our users have, with the way we develop our software. Our last product launch (bringing out a revamped version of E-WorkBook), was an important milestone in that sense. UX was key in its development, factoring in this evolution in the way customers want to use the product – but, equally, recognising the tipping point where adding more features begins to detract from the tool’s ease of use. Do you have anything else to add? For a company that works in the R&D space, it’s an exciting time. As R&D is supported more and more by technology, the volume of research data being produced now is huge – and growing exponentially. Securely storing, managing and leveraging all this data as a source of knowledge will be crucial. We’re also expanding our presence in the US and Europe, building strong local relationships with customers and supporting even more researchers as they strive towards their next Eureka moment – be it curing a major disease, or perhaps a new approach that innovates food manufacturing and changes the way we live. It’s an exciting time for us as we continue to expand into our main focus areas of food, energy and health – the future’s bright for R&D.
SME 44. The Power to Pivot
SME
44 Corporate Vision September 2015
SME
The Power to Pivot By Roy Horgan, CEO of Market Hub Market Hub supports high street retailers adapt to the digital age. The company provides a digital toolkit for retailers including Electronic Shelf Labels (ESL) and proprietary analytics so retailers can meet changing customer needs and compete with large multinational and online chains.
There is a significant amount of literature discussing the weaknesses of large companies when it comes to innovation. Some of the reasons that many observers see smaller companies as more innovative include: 1. Small companies are more nimble, with less bureaucracy and fewer organisational approvals to obtain before an innovation is developed and commercialised. 2. They are less burdened by status quo thinking than larger companies. Decision-makers at larger companies often have a “don’t rock the boat” mentality, because of the fear of making a mistake that could cost the company a lot of money, and as a consequence cause them to lose status within the company or even their position. In addition, it is often extremely costly for large companies to commit resources for innovative projects because of significant overheads that they must allocate to these projects. One such industry that has struggled over the years to innovate and adapted sufficiently has been the traditional bricks and mortar retail industry and as a result the high street is in trouble. Britain’s high streets are in the grip of their worst summer for six years as shoppers hold back on spending amid uncertainty over interest rate rises. The BDO High Street Sales Tracker recorded a 1.1pc drop in year-on-year sales for July, which means sales have fallen every month since May for the first time since 2009. We can all feel frustrated with big business, and even mystified at times to see how big companies who have thrived over the past 40 years are now struggling to cope with the challenges that they face today. The problem is partly recession, partly inertia and partly consumer trend related. While it’s easy to empathise and understand the dilemma facing the high street retailer today, it is clear that the trends of falling sales is a result of their failure innovate and differentiate and emergence of mega retailers like Amazon, Amazon Fresh, EBay, ASOS, Gilt, Ocado, Lidl or Aldi. These companies very much see themselves as tech companies or logistics organisations and this evolution has blind-
sided many traditional retailers and stemmed their ability to innovative as they are locked in a fight of competing head-on. Copying the competition is not a strategy, and excessive price matching, discounting and bombarding one’s customers with offers that they don’t need or want is a race to the bottom. A different approach is required in order to adapt effectively to current market demands, one that marries up with the increasingly technology dependent consumer. Traditional bricks and mortar retailers can learn from SMEs and highly innovative retailers like the White Company, Media Markt in Germany or Inter Marche in France who have decided to embrace innovation and technology rather than shy from it. They have achieved success by seeking out innovators to help them understand how they can stop the constant erosion of their bottom line and invest in things other than just price. Be warned, the partnership road between SMEs and big business in not easy and it has to be a two way street. SMEs need to understand how to work with big business in order to cross the chasm in and service their new customers, and big business needs to realise that innovation may not come from within. The adoption of retail technology and new thinking has to occur - the prize is large and failure to change is not an option.
So how do you turn a juggernaut such as a Tesco, Morrisions or Walmart. Innovation and differentiation is key, and there are hugely exciting developments in retail technology that could offer many of these retailers a real competitive advantage against pure play retailers or the discounters. A huge number of retailers are unaware of the huge untapped resource that they have at their disposal - data! However, even if they were aware of the benefits that effectively leveraging data could bring to business operations, the majority of retailers struggle to even access this information, let alone take action based on it. In order to address this issue, retailers must seek organisations who are much more adept at specialising in the extraction and action of data, thereby providing them with the tools to respond to customer needs and market developments, putting them ahead of the competition.
September 2015 Corporate Vision 45
However many SMEs seeking to adopt this role fail to understand the nature of the retail organisations that they are selling into, their ultimate objectives and business constraints. For example, changing even one practice on the shop floor of a major retailer could take hundreds if not thousands of hours of retraining, planning and processing to introduce the new task. Often retailers don’t have the time or the capacity to do what would seem right for their business in order to improve the customer experience or differentiate their offering from that of the competition. The supportive SME must be truly understand the business they are looking to support and all the related limitations. Innovation cannot come at the cost of practicality. We are only at the very early stages of a data gold rush. The key to succeeding in striking gold is for small, agile businesses to work alongside large retail organisations in order to unlock the wealth of data that they have at their disposal. The aim is not only to figure out how to take an obstacle away from the customer but how to deliver the solution in such a way that enables successful adoption and implementation. When it comes to big data in large companies, the information needs to be delivered in such a way that the customer can act - information is at its most powerful when it can be collected, analysed and subsequent action can be taken seamlessly.
Money 48. No Replacement Scheme for the Scrapped Green Deal
Money
48 Corporate Vision September 2015
Money
No Replacement Scheme for the Scrapped Green Deal The Green Deal scheme designed by the government to encourage landlords and homeowners to implement energy efficiency measures has recently been terminated but what kind of impact is that going to have?
With no replacement scheme lined up, people from all corners have been critical of the government. It was initially believed the Green deal would save both landlords and homeowners £310 a year. However concerns were immediately raised over the high interest rates after borrowing money. Despite this Ashley Payne, Lettings Manager at Wembley Park Residential believes people will now just be mindful of the energy efficiency of a home before they purchase property. He said: “Ensuring homes are energy efficient will keep tenants utility bills low leading to longer stays. Tenants are very keen in getting the best rates/tariffs possible to keep outgoings at a minimum. If they feel they are losing and wasting money complaints will become more frequent”. He further added: “I don’t think many will be put off by this recent announcement as most particularly those buying at auction, will be very careful in ensuring the home they buy has many of the necessary energy requirements”. Stephen Munday, Managing Director at Clean Energy Installations argued before the Green Deal there was no incentive for landlords and homeowners to invest. However the launch of the scheme changed all that. He said: “Why should they expend capital on investments that would simply reduce the running costs (fuel bills) for their tenants? After all, the tenants had to pay their own bills and landlords had little interest. But then came the Green Deal to which the more financially astute landlords quickly cottoned-on”. “So, the only group of people that gained significantly from the advent of the Green Deal were private landlords and so it must be conversely argued that the only losers with its demise are the landlords that didn’t wake up in time”.
The ceasing of the Green Deal should bring a renewed focus on smarter regulation for the heating industry, that’s the view of Neil Schofield Head of Governmental and External Affairs at Worcester, Bosch Group. “It is no real surprise to see the Green Deal effectively scrapped before it ever really took off, while the intention behind the Green Deal may have been positive, the complexity it added to the supply chain, its unappealing interest rate, and the way in which it marginalised our network of heating engineers made success very unlikely. At a time when the Conservatives are still finding their feet on energy policy and are under pressure to reduce spending, it was always going to be difficult to justify a future for a scheme so many had already written off as a failure”. Interestingly Neil Schofield believes energy efficiency can still prosper with the right kind of support from the government. “What will replace the Green Deal remains to be seen, however our wider industry is faced with a huge opportunity to optimise use of the existing gas network by continuing to improve boilers, and steadily introducing smart controls and other low-carbon technologies. What we need the Government to remember amidst so many cuts is that not all regulation is bad. “With the right support from Government, there is no reason why building-related industries can’t work together to keep energy efficiency high on the agenda”. Phil Foster CEO at Love Energy Savings (www.loveenergysavings.com) has been quite critical of the Green Deal arguing better marketing would have attracted more homeowners and landlords to the scheme. “Although it was well intentioned, the government’s Green Deal initiative proved to be a mess. One of the biggest problems, in my opinion, was the lack of marketing around the scheme; many people simply didn’t
September 2015 Corporate Vision 49
have a clue what it was all about and how it would benefit them, so how were they expected to sign up?” He further added adopting greener lifestyles is essential if the UK are to meet its climate change targets. “For me, if the UK is to meet its ambitious climate change targets by 2050, more needs to be done to raise awareness of the damage that we’re collectively causing by failing to adopt greener lifestyles. It’s a sad truth, but a lot of people simply won’t adopt green proofing measures unless the benefits are more clearly presented to them”. Clive Rolison, Founder of Complete Renewables believes there are lessons to be learnt if we want homeowners and landlords to invest in energy efficiency measures in the future. “. Local councils should work together with housing associations and homeowners to offer insulation at discount prices”. As to why no replacement scheme has been lined up by the government Clive argues there could be a number of reasons but in an attempt to offer his point of view he added: “As to why the government hasn’t come up with a new scheme, the tin-foil hat wearing among us suggest that the government’s close links with the oil and gas industries mean that they aren’t particularly keen for homeowners to be spending less on their heating bill thanks to insulation. A more plausible explanation perhaps is that, despite all the good it would do, energy efficiency isn’t such a hot topic that the government feels under pressure to move quickly, so they have simply quietly let it slide down their priority list”.
OC&C STRATEGY CONSULTANTS WINS DOUBLE AT AI M&A AWARDS 2015 OC&C are delighted to have been recognised for our work in Acquisition International’s (AI) 4th annual M&A awards where we were awarded the titles of Best for Traditional Media Acquisitions and Best for Business Unit Strategy for our work in the Technology, Digital and Media spaces. Last year our UK team advised buyers and sellers on over 30 transactions in the corporate and PE sectors, delivering “stellar results and second to none client service”. Who are OC&C? Founded in 1987, OC&C Strategy Consultants operate around the world to bring clear thinking to the most complex issues facing ambitious management. Our TMT team covers all areas of TMT strategy globally with 27 strategy Partners across our international firm. Our M&A Practice covers all our sectors where we guide clients throughout the transaction process, from target search and screen through commercial strategic due diligence to business planning, post merger integration and profit / performance improvement. For more information please email contact@occstrategy.com
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60 Seconds 52. Simplisys Ltd 53. Storcheck
60 Second Interview
Simplisys Ltd What does your business do? Service Management is our business… we enable our customers to deliver first class service to their employees and or customers. In the modern world customer service is king, managing customer experience when contacting the business is key to customer satisfaction. Many companies have no process in place to ensure positive engagement which is an issue for many businesses large and small. We have developed a class leading, easy to use service desk software application that is “Simply Smart” by design and delivers knowledge to the front line operative based on the information provided by the caller which drives up the number of calls closed at first contact. Who are your clients? We deal with many companies large and small however our bread and butter is SMEs’ (Small to Medium Sized Enterprises). Mid-sized organisations like NHS Trusts, Local Authorities, Government Departments, Housing Associations, larger Charities and large Manufacturing companies are typical customers. Examples are Dairygold, Sue Ryder Care, Alliance Homes.
What makes you unique? Our software is “Simply Smart”, intelligent by design, Configuration not Customisation is our USP. We have successfully combined flexible Workflows, Business automation and Management Information Reports as standard, which is simple to set up and configure using drag and drop, point and click and Boolean logic negating long training courses at considerable expense that our larger competitors like to promote. Moreover we practise what we preach and provide class leading customer support. In short if you want “Best Value” give us a ring.
What’s your company’s biggest challenge? Our biggest challenge is keeping tabs on emerging technologies especially potential disruptive technologies. Small companies thrive because big companies struggle to deliver good customer service.
What’s your biggest challenge facing you at present? My biggest challenge is to recruit resellers (agents) in other countries… any help you can give will be much appreciated.
Name: Peter Lench Company: Simplisys Ltd Email: peter.lench@simplisys.co.uk Web Address: www.simplisys.co.uk Address: 15 Middle Bridge Business Park, Bristol Road, Portishead, Bristol, BS20 6PN Telephone: +44 (0)1275 240500
What’s the aim for your business? To become a big business and retain our Customer CARE principles.
What business/business person do you most admire and why? I think Google is a great business, it has proven to be sustainable and scalable however I think my favourite business person is Richard Branson or should I say Richard Virgin after all he is the brand.
Portishead, Bristol
52 Corporate Vision September 2015
60 Second Interview
Storcheck What does your business do? We deliver profitable brand growth from measured ROI by helping companies to invest behind retail and shoppers together. Who are your clients? We appeal to challenger brands, those that are growing faster than the average, and want to ramp this up, and those that are challenged on where best to invest even if their best hope is to decline slower than their competitors. Examples would be Seabrook Crisps, Canderel, Organix, Food Doctor and Coldpress. What makes you unique? We are the only company in the UK building a brand strategy based on store insight alongside, and in synergy with their shoppers. This means we measure everything and see store motivation as important as shopper in a brands core area. We have just launched a site wholly dedicated to store/shopper insight www. retailvitalstatistics.com.
We use one consumer action, such as targeted couponing or sampling, to build traffic, facings and display together. That way we guarantee both fantastic short term sales, but also long terms growth. So over 12 months 30/1 ROI is not exceptional. What’s your biggest challenge facing you at present? Getting Sales and Marketing to buy into growth together. Often their actions counteract each other. An advertising campaign that coincides with a deep cut promotion removes all the stock from core stores, and leaves potential and actual loyalist deeply disappointed. Enough of this and they switch brands or retailers. The issue is easy to fix by working directly with core stores (the 15% that do 50% of the business), but only, of course, if both understand where these are and how to build shopper and store loyalty from their respective budgets working together. What’s the aim for your business? To become acknowledged experts on directing company budgets for profitable growth, and to become attractive as a result to outside investment.
September 2015 Corporate Vision 53
What’s your company’s biggest challenge? Incorporating more targeted techniques, we can measure, alongside those we already know to be profitable. What business/business person do you most admire and why? Sam Wanamaker, who admitted that half of his advertising budget was wasted. Despite this he was a fierce advocate. Knowing where every pound goes makes buying shopper marketing like investing in a new machine. He would have loved it. Name: Colin Harper Company: Storecheck Email: colin@storecheck.co.uk Web Address: www.retailvitalstatistics.com Address: 4, Ashley House, Farnham Common, Slough SL2 3PQ Telephone: 01753 648800
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