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Busines s voice | the CBI magazine

Power up Accenture’s Olly Benzecry on why finding 2,000 new recruits shouldn’t be hard in the digital age

June/July 2014


B u s i n e s s vo i c e | t h e C B I m ag a z i n e

June/July 2014

14.interview:

Olly Benzecry Employability is a big issue on the agenda for Accenture’s UK boss as he faces the challenge of staffing up to meet client demand.

8.infographic:

health & wellbeing report There is a clear financial case for businesses to improve their response to sickness. But it takes a targeted strategy to deliver a happier, healthier and more committed workforce.


Regulars 04 Cridland’s Notebook: As we reach the midpoint of 2014, it’s a good time to take stock. But as political concerns replace economic ones, it’s critical that the business voice 20.feature:

changing workforce

25.member lounge:

your space

The shift in the way people are working

The CBI has settled in to its new

will have profound consequences for

home in the City of London – and

businesses and their employees.

the Cannon Place office has a lounge exclusively for members’ use.

continues to be heard loud and clear.

26 International: The BJP swept to victory in India’s recent elections. Voters are expecting change, while businesses will be looking for reform.

32 Member News: Charting business growth across the UK. In this issue: Aardman Animations; Amada; Capita; FMG and Versarien.

34 Member Clinic: Information security breaches continue 10.EVENT FOCUS:

28.Member profile:

one year to go

murad

With the UK general election now less

Murad is one of the first brands that

than a year away, business concerns

really embraced online beauty – and

have moved a step on from economic

it’s batting above its weight in a

priorities; political posturing and

fiercely competitive environment.

to rise, at high cost to businesses. But BV asks Perspective Risk why a corresponding increase in investment in software isn’t paying off?

37 CBI Diary:

uncertainty now threaten a sustainable

Events and photo gallery. In this issue:

recovery.

coverage from the CBI Annual Dinner and Katja Hall becomes deputy director-general. 6.guest columnist:

xavier rolet With a flurry of flotations dominating the headlines, don’t forget the UK’s SMEs which still need our support.


“It’s critical that the business voice continues to be heard loud and clear”


Cridland’s notebook

Pause for thought As we reach the midpoint of 2014, it’s a good time to take stock and look ahead. With the economic situation improving – underlined by the CBI’s most recent economic forecast projecting growth of three per cent this year – it’s clear to me that business concern is shifting to the political uncertainty that’s climbing up risk registers.

CBI Annual Dinner

trading, free-market economy and a

tackling the UK’s long-term economic

This message came through strongly

welcome home for business.

challenges means the tough calls

The dinner was another

that still need to be made cannot

when the CBI welcomed more than 1,000 guests to our Annual Dinner

opportunity for us to highlight

be ducked, including on aviation

at the Grosvenor House Hotel in

Speakers for Schools, a charity

capacity, deficit reduction and

London in May. I always enjoy the

providing free talks in state schools

public service reform. And finally,

opportunity to catch up with friends

by distinguished figures, including

politics can’t be put before securing

and colleagues and to find out

leaders in business, the arts,

investment and opportunity. You can

how they’re seeing the economic

sciences, sport, politics and media. I

read more about our proposals later

and political lie of the land. It was

can vouch for the excellent scheme,

in this edition of Business Voice.

a fantastic evening and, with the

having participated myself, and I

recovery cementing, the mood was

encourage you to get involved.

Katja Hall becomes deputy director-general

The forthcoming election

As many of you will no doubt have

highlight the political uncertainties

There is no doubt that the

heard already, it gives me great

that they now face, with the Scottish

challenges we will face during the

pleasure to announce that Katja Hall

referendum and general election

next parliament require business

has been appointed as the CBI’s new

rapidly approaching, and speculation

support – we must be at the heart

deputy director-general, moving

about the possibility of a future

of delivering prosperity for all.

from her position as chief policy

referendum on EU membership

With less than a year to go until the

director. In her new role, Katja will

down the line. On all these issues,

general election, the CBI has set out

continue to lead the CBI’s policy

it’s critical that the business voice

its initial priorities for the parties for

development as well as managing

continues to be heard loud and clear.

their manifestos.

our international activity. I know

upbeat. Sir Mike Rake used his speech to

First and foremost, we want them

those of you who have worked with

chancellor, George Osborne,

to stick with what’s working from this

Katja will agree that this promotion

who pointed to the government’s

parliament. Where the right steps

is thoroughly deserved and will join

economic record and his desire for

have been taken they should be

me in wishing her every success.

the UK to remain an open, free-

built upon, not reversed. Secondly,

Our keynote speaker was the

Busines s voice | june/july 2014

5


In support of great British dynamos A flurry of flotations is dominating the headlines – an encouraging sign for the economy. But SMEs still need backing from the business community.

Words: Xavier Rolet, chief executive, London Stock Exchange Group

We are seeing the UK economy

Through our ongoing work with the

technology, healthcare, retail and

go from strength to strength and

UK’s entrepreneurial community,

media. All of these businesses need

investors are making a strong return

we know that start-up founders

to be nurtured.

to the equity markets. To date this

often find that their passion and

year, 49 IPOs (flotations) have raised

ideas are enough to launch a

inspiring firms as the first cohort for

£7.28bn across our markets, almost

business. However, growing in a

our new business support initiative,

three times as much as the same

structured, stable way for the long

Elite. The two-year programme

period last year.

term, and accessing the right type of

is designed for the UK’s most

professional advice and funding, can

ambitious high-growth firms, to

be challenging for them.

help them gain the information

Our small and medium-sized enterprises (SMEs) are playing an

In April, we unveiled 19 of these

increasingly vital role in driving

To remain competitive, and

and contacts that can help them to

this revival. At the start of 2013,

to drive economic growth, the

secure funding and to further grow

there were an estimated 4.9 million

UK must create an environment

their business.

private sector SMEs in the UK – an

where the blue-chip companies of

increase of 102,000 compared with

tomorrow can thrive today. We are

partnership with London’s Imperial

the start of 2012, according to the

seeing too many of our innovative

College Business School, with input

Department for Business, Innovation

British businesses being taken over

from members of the UK advisory

& Skills. These businesses account

because they struggle to raise the

and investment community. It

for more than half of employment

additional finance needed for further

was launched by minister of state

and almost half of turnover in the

expansion.

for skills and enterprise Matthew

UK private sector. These figures show why we need to support SMEs, and to promote their importance to the future of the UK. London Stock Exchange encourages growth businesses to access the public markets, but we also recognise that there is more to helping SMEs succeed than just the growth of public equity finance. 6

Busines s voice | june/july 2014

Full support We work together with policy influencers, market participants and government to make the UK an international hub for high-growth companies. Our focus is not limited to tech companies. The UK is home to a host of dynamic enterprises from across a variety of sectors, including manufacturing,

The scheme is being run in

Hancock, who spoke about the need to build an enterprising and ambitious nation. But what is also encouraging is the level of support and interest that the programme has generated among the financial and business community. Elite is being backed by the UK’s main trade and investment bodies – including the CBI, leading accountancy and legal


guest column: Xavier Rolet

“The UK must create an environment where the blue-chip companies of tomorrow can thrive today”

firms, business angels, venture

We believe that this measure will

capital firms, private equity houses,

help to attract more investment and

institutional investors, PR firms,

liquidity into some of the UK’s most

banks and brokers.

ambitious, dynamic and innovative

Encouraging momentum There is a real momentum building in this space. Another important initiative, which adds to the host of SME support schemes gathering pace across the UK, is the CBI’s recent campaign to promote the importance of medium-sized businesses. The launch of Elite coincided with another significant achievement for UK growth companies: the abolition of stamp duty on AIMquoted companies’ shares.

companies. It is a cause for which we have campaigned heavily – again alongside the CBI. The entire business and financial community is working to nurture and celebrate these firms. But we must continue to challenge the status quo and not become complacent. We need to carry on fostering, through policy and practice, a richer, more diverse entrepreneurial ecosystem, so that the UK’s high-growth firms can take root and flourish. www.elite.londonstockexchange.com Busines s voice | june/july 2014

7


Ill health hurts Anything other than a healthy workforce costs business. The CBI/Medicash Health and Wellbeing Report highlights why firms should act to improve their response to sickness.

the reasons to act

£ 15.1bn

The cost of presenteeism to the UK economy based on psychological health problems alone.

www.cbi.org.uk/ investing-in-health-of-staff

(Source: Centre for Mental Health)

And businesses need to take health trends seriously...

50%

44%

of the population are expected to

The proportion of the

be obese by 2050 – and coronary

British population currently

heart disease already costs

suffering from stress.

businesses £4bn a year.

(Source: BUPA, 2013)

(Source: National Obesity Forum)

The benefits of being proactive

£ 340,000

23,000

81%

The number of days’ productivity

The proportion of BT

The savings achieved by London

saved in 8 months at John Lewis

employees who felt the

Overground in 2012/13 after

after fast-tracking the treatment of

opportunities to participate in

introducing new health and

partners suffering musculo-skeletal

health promotion campaigns

wellbeing initiatives and improving

injuries. Two thirds of cases were

made them feel like BT cared

the way it used Occupational Health.

dealt with remotely, with a targeted

about their health. 64% said

exercise programme with clinical

that it made them proud to

telephone support.

work for BT.

8

Busines s voice | june/july 2014


infographic: Health & Wellbeing

£ 975

5.3 days

The average total cost for each absent employee, leading to an

The average rate of

estimated £14bn in direct costs for

absence per employee.

the UK economy. (Source: Fit for Purpose, CBI/Pfizer, 2013)

x7

Presenteeism costs up to seven times more than absenteeism. (Source: Presenteeism in the workplace, Johns, 2010)

7.5m

x2

The number of days a year lost to

The number of people over the age

musculo-skeletal disorders, which

of 65 in the UK is expected to double

increasingly affect all age groups

from 10m over the next 30 years. More

because of the use of technology.

of them will be in work than before.

(Source: Health & Safety Executive)

(Source: The Ageing Population, Cracknell, 2010)

Actions for business The CBI recommends that firms take the following steps:

1 2

Develop joined-up health and wellbeing programmes that also react to emerging trends; Take a proactive and preventative approach to health and wellbeing to influence employee behaviour and engage the workforce;

3 4

Equip employees and managers with the knowledge and support to handle health conditions as swiftly as possible; Ensure robust systems are in place to effectively manage absence and return to work.

“”

As businesses seek to improve performance, increasing numbers realise that strong strategies to support employees can reduce absence and improve productivity. Developing a considered and targeted healthcare strategy can help to build rewarding relationships with staff that result in a healthier, happier and more committed workforce.

Sue Weir, chief executive of health cash plan provider Medicash

Busines s voice | june/july 2014

9


Risky business The economy is improving but with a year to go until the UK general election, political risk is increasing. However, despite the uncertainty, the environment presents opportunities for business to be a constructive voice in the public debate.

Harold Wilson’s famous phrase that

uncertainty this creates could pose

a week is a long time in politics

a risk to the economic recovery.

may have become something of

All elections bring with them a

It is the private sector which is driving the economic recovery. And only business can do so for the

a cliché but it remains true – ever

degree of uncertainty but there

long term; creating the jobs and

more so in the era of 24 hours news

are some unique factors at play in

opportunities that will help deliver

and social media. But what does

the current political environment.

higher living standards for all.

that mean for a year in politics?

Over the next 12 months business

Passing the milestone of one

must navigate the unwinding of the

it needs to step up and take a

year to go until the 2015 general

Coalition government, fallout from

lead. In order to do this, we need

election, the focus of concern for

the European and local elections,

politicians of all parties to create

business has shifted from economic

and the referendum on Scottish

the framework and set a tone which

to political uncertainty.

independence. All of this will be

enables business to innovate,

playing out against the backdrop

create jobs and help deliver

signs that the economic recovery

of opinion polls which suggest

prosperity for all.

is strengthening and growth is

the stage is set for a tightly fought

becoming more broad-based.

contest in the lead up to 7 May 2015.

2014 has seen encouraging

The CBI’s latest economic forecast

While political risk has moved up

upgrades its projections to three

the business agenda, and become

per cent growth for 2014 and 2.7

a factor in some investment

per cent in 2015.

decisions, this stage in the political

However, while economic

cycle also presents opportunities

news has become more positive,

for business to play a part in policy

political risk has increased, and the

debate.

10

Busines s voice | june/july 2014

Business recognises where

Business before politics As political parties develop their policy platforms for the next election, the CBI has drawn together a set of initial, overarching messages under which sit preelection priorities from the business community with one year to go into the general election.


event focus: One year to go

“As a manufacturing company in the energy and rail sectors we need policy stability in order to make longterm investments, as do our customers and the supply chain. “Stop-Go” politics can be particularly damaging for infrastructure projects, which require large sums of private capital over many years and enormous discipline from politicians to avoid tinkering. Persistent uncertainty over large infrastructure projects and setting targets has real consequences. It can chill investment and lead to delays in creating jobs or developing supply chains. And let’s not forget the great opportunity here: hundreds of thousands of jobs all over the country in new growth areas where the UK can take a significant market share.” Craig Jones, director of government affairs, Alstom

Busines s voice | june/july 2014

11


Firstly, politicians need to

opportunity. Business is pragmatic

stick with what’s working from

about the realities of election time

this parliament and not create

and is not partisan. So policies will

unnecessary uncertainty. Over the

be judged according to what will

past four years there have been

make a real, positive difference

positive steps taken to improve the

to opportunity and help secure a

business environment and the UK’s

sustained return to growth.

global competitiveness. Business

Therefore political positioning

wants this progress built upon not

should not stifle investment,

unpicked, whoever is in power

whether it’s an unrealistic

in the next parliament, whether

immigration target, unjustified

on industrial strategy, the tax

interventions into specific markets,

environment or business support

flirting with leaving the European

frameworks.

Union, delaying vital long-term

Secondly, politicians must tackle the UK’s long-term economic challenges and not duck the

infrastructure projects or restricting labour market flexibility. The CBI will be building on

tough decisions. Although the UK

these proposals in the run-up to

economy and business environment

the general election, to ensure

have seen recent improvements,

that business plays its full part in

the next government takes on

addressing the major economic

responsibility for taking hugely

challenges facing the country, in

significant economic decisions or

helping to deliver the investment

delivering those already taken.

and opportunity that will secure

It needs to swiftly seize the

prosperity for all. As well as being

opportunity to do so. On aviation

a constructive voice in the policy

capacity, deficit reduction and

debate with the ideas and policies to

the next stage of public service

help deliver the country.

reform, decisions need to be grounded in economic reality,

Pippa Morgan is the CBI’s senior

taken and delivered swiftly.

political and campaigns adviser.

Finally, politicians must ensure

pippa.morgan@cbi.org.uk

their policies make the right

12

Busines s voice | june/july 2014

kind of difference and not put

www.cbi.org.uk/business-faces-

politics before investment and

political-risk


event focus: Brazil Trade Mission

“Infrastructure is a long-term commitment, both in terms of providing an essential platform for social and economic prosperity for the millions of people who use it, and in some cases its actual delivery. At five-year intervals, the UK parliamentary cycle is the opposite. Under the current government longer term infrastructure programmes have been a key focus, although some issues such as airport capacity are yet to be resolved. It is vital that the best interests of the country sit above the political cycle in order to create stability and clarity for investors and a certainty that the infrastructure – the wiring of our society – is delivered within acceptable costs and timescales. It is also increasingly difficult to find people with the required design and engineering skills, and this is likely to get worse before it improves. Getting more young people into the sector will not happen overnight so businesses need to work with the government to ensure this gap can be addressed in the short term. Current immigration policies can make it unviable to recruit people with the vital skills needed to deliver our infrastructure from overseas. Immigration will be a hot topic for the next government, but sensible policies are needed which don’t cut off a vital supply of skilled workers who will enable the UK, its businesses and society to flourish.” David Tonkin, Atkins’ chief executive officer for UK and Europe

3%

The CBI has predicted growth of 3% for 2014, up from 2.6%.

19%

The level of investment from companies is still 19 percent below its pre-crisis peak despite four consecutive quarters of growth in 2013.

61%

Voters in a Populus/FT poll said they wanted the party that wins the general election to be tougher on big business.


14

Busines s voice | june/july 2014


BIG interview: Olly Benzecry

Rewiring the business “Digital gives companies the opportunity but, to some extent, no choice”

The rise of digital has transformed the environment in which companies operate. Accenture’s Olly Benzecry is helping them adapt to this changing world. Words: Pip Brooking | Photography: Peter Searle

Busines s voice | june/july 2014

15


A

ccenture’s

says Benzecry. “They want to grow,

Fenchurch Street

they want to cut their costs and they

offices are

want to serve customers better. But

everything you’d

the means by which they do that has

expect from a

changed dramatically with this thing

firm in the City – from the outside.

called ‘digital’.”

Inside, though, it’s all very different.

The challenge for Accenture is to

On the seventh floor, I’m met by UK

prove it has kept up with technology

managing director Olly Benzecry

and the implications of digital,

and we walk to a screen where

while being “just as good at the

Benzecry’s face is scanned.

industry knowledge and business

A door opens, revealing a dark room

change stuff as it’s always been”, he

buzzing with technology.

says. The Innovation Centre is one

To an outsider, it looks like an

way of doing that – but Benzecry

operations room with a touch of

emphasises that the room is as

the film Minority Report. To the

much about the “breakthrough

management consultancy, it’s the

conversation” it prompts as about

Innovations Centre – designed to

the technology itself.

showcase what is now possible with technology and to get clients in the mood to brainstorm. There’s a long table with interactive maps showing worldwide Twitter activity; a cinemasized touchscreen wall; smaller screens showing other applications for facial recognition; and a 3D printer off to one side. Then there’s an area with animal-print seats that might seem too trendy for such a firm – and a more traditional roundtable area, jazzed up by the potential to write on both the table and the surrounding walls. “Businesses have a lot of the same challenges they’ve had historically,”

16

Busines s voice | june/july 2014

“”

The company is working with the Metropolitan Police on a gang analytics program – using an algorithm to anticipate future offences says the MD. “There is no theme of the day.” He adds that the best way he can explain current business sentiment is “confidence meets leadership meets necessity” – where necessity can be about responding to anything from regulation to customer needs. More often than

Changing times

not though, it comes back to the

With clients in various sectors

digital agenda. “Digital gives them

requesting services that fall under

the opportunity but, to some extent,

Accenture’s Strategy, Digital,

no choice.”

Technology and Operating banners,

Benzecry points to retail, which

Benzecry is well placed to see how

is affected by the relentless move

business demands have evolved

to multi-channel sales. In terms of

with market fortunes. But he argues

customer experience, companies

that it’s too simplistic to say that

can’t simply benchmark their

when the credit crunch hit they

performance against those in the

were first focused on cost, then on

same sector any more, he adds. One

regulation and risk, and now on

utility company says it now competes

growth again – all three were,

with John Lewis on customer service,

and remain, common priorities.

for example. “You wouldn’t have

The need to handle competing pressures is one of the reasons that Accenture’s business is so buoyant,

heard that five years ago.” All these changes mean that some of Accenture’s “most exciting


BIG interview: Olly Benzecry

stuff” is in the customer and digital

By that, I’m not just talking about

people,” he says. “They need to feel

space. Examples include BT Sport

how we reward people – I’m talking

that they are part of a genuinely

and free-to-air digital television

about the types of work they get to

leading organisation, so it must feel

service YouView – for which the

do and the environment in which

agile and collaborative, and as if it

firm provided the technology

they do the work.”

uses technology in the right ways.”

platforms to support content

Part of this environment is the

The fact that many people

delivery. For consumer goods

Innovation Centre, which

giant Unilever, Accenture built a

he says is intended

digital social platform in 12 weeks

as much to impress

to connect global marketing teams

staff as clients. And

staff suggests

in 190 countries. And, returning to

Benzecry’s focus

that he’s getting

Minority Report, the firm is working

on the working

something right

with the Metropolitan Police on a

environment

– as do accolades

gang analytics program – using

doesn’t stop there.

an algorithm to anticipate future

Over the past three

The Sunday Times,

offences.

years as MD, he has

naming it as one of the

Talent hunt It’s all a far cry from when Benzecry started at Accenture in 1992, when he didn’t even own a mobile phone, and people laughed at the company’s digital predictions for retail. But the pace of change, and the corresponding demand for its services, have put the firm under pressure to hire 2,000 staff this year – including more than 750 in Accenture Technology, 100 in Accenture Digital, and 700 at an entry level. However, Benzecry seems unfazed by the challenge of this mass recruitment exercise. “We have it easier than some,” he says. “Our brand works well and the proposition to our staff works well.

joining Accenture arrive via references from the company’s own

from The Times and

been steadily redecorating,

top 50 employers for women

selling off the artwork that had

and one of the top 25 big companies

nothing to do with the company and

to work for. The company is also

replacing it with works by members

ranked fourth in Stonewall’s

of staff, posters of employees

workplace equality index.

and their projects – including augmented reality links so people can find out more – and quotes to make them think. The latest floor to get the Benzecry treatment has a contemporary vintage flavour, including traditional London street signs, library wallpaper and comfy leather seats. It’s as if it has taken its influence from up the road in Shoreditch – but it seems that is Benzecry’s point, as he aims to attract the right talent. “I’m keen that we impress our

The employability agenda Benzecry is also quick to add that Accenture’s business “works on talent” – it’s set up to attract, retain and develop talent, and has a £50m budget to do so. “In impersonal jargon, it’s our supply chain,” he says. The company is also a source of talent for the rest of the country, he adds. “The business is a great talent generator for the UK.” He celebrates the fact that alongside Accenture’s 9,000 UK employees, probably an equal number whom it Busines s voice | june/july 2014

17


The Benzecry CV April 2011: Named managing director of Accenture’s UK & Ireland business.

1992: Joined Accenture’s Strategy practice.

Previous roles: Worked for Conoco, and as an aeronautical engineer with British Aerospace.

Other roles: Member of CBI President’s Committee; board member for Business Disability Forum and e-skills UK.

Education: Engineering degree, University of Cambridge.

18

Busines s voice | june/july 2014


BIG interview: Olly Benzecry

has trained have gone on to set up

However, Benzecry wanted to

recruits in Java. And to Benzecry,

their own businesses or work for its

take the scheme further. Helping

this approach also makes great

clients. He is, of course, less keen on

people to get jobs with other people

commercial sense – training younger

those who have gone on to join the

“felt good, but not good enough,”

people up is cheaper than fighting

competition.

he says. “We wanted to start using

over a limited pool of older talent.

The company’s traditional

Skills to Succeed as a way of giving

recruiting ground remains the

people access to our organisation.”

universities, but Accenture now has one of the largest level four technology apprenticeship schemes in the country. This apprenticeship scheme stems from the firm’s Skills to Succeed initiative, whereby it uses expertise in talent development to provide people who are disadvantaged in some way with the skills to either get a job or start a business. Skills to Succeed focuses on talent demand as well as supply, says Benzecry. “It was important we did both, because we didn’t want to just impact the supply of talent; we wanted to also impact the demand.” So far, the initiative has helped more than 500,000 people – and its target is to reach 700,000 by 2015. On this initiative, the UK acts as a hub for activity across Accenture’s international offices. For example, it is putting into practice what it preaches by using digital technology to amplify the scheme’s effects with the Skills to Succeed Academy. This allows the scheme to reach more people than it could through mentoring, he says.

New ground So the firm decided to set up the apprenticeship scheme, based in Accenture’s Newcastle office. The process took more effort than expected. “While apprenticeships are talked about a lot, when it came to level four apprenticeships with technology, there’s almost no one doing them,” says Benzecry. But the firm now has the relevant partnerships with the universities in place, 40 people were taken on in the first year, and he says the scheme is incredibly effective. “I met the apprentices when they joined and they were a little timid, but now they feel part of Accenture and they do good things,” he says. During this process, Benzecry had to challenge his own approach to hiring. “Normally, with Accenture, the academic bar to jump is high. In this case, the bar was aptitude and attitude [for digital and technology]. I was told it would be fine – and it has been.” In fact, one person who joined as an apprentice, who had “little to no qualifications”, now trains other

Yet he is not one to stop there. He has also got Accenture involved in Movement to Work – an initiative started by Marks & Spencer’s Marc Bolland – which aims to provide training and work experience to 100,000 of those not in education, employment or training. Accenture again focused on all things digital with the first Movement to Work group it took on, and helped them to secure experience at SMEs in its supply chain, so they could practice what they had learnt. The second group will have more of a link with the apprenticeship scheme, he says. “The next version, which is starting now, is still about providing digital and technology experience, but more aligned with what we need for our apprenticeship programme – it effectively becomes the preapprenticeship piece.” If it’s not clear already, Benzecry believes that businesses have a role to play in tackling youth unemployment. “If businesses don’t step up to help, they will be the losers, because they are the ones with the vacancies.”

Busines s voice | june/july 2014

19


the changing workforce Whether the UK’s flexible workforce protected the economy from the worst of the downturn or just masked its ill effects, the shift that occurred in the way people work will have profound consequences for businesses and their employees.

20

Busines s voice | june/july 2014


feature: Employment trends

Only half the UK’s working population

workers can expect to see in the next

Association and a director at HR firm

now works in a “traditional” manner,

two decades. UKCES predicted that

Penna, says: “If you’re embarking

with full-time hours and on an

more large firms would open up

on a period of change, it’s difficult to

employer’s payroll. And according to

their business models – “focusing

employ somebody who fits within

the Office for National Statistics, the

more on the skills and knowledge

your salary band and your particular

number of people working on a self-

they can connect to than the skills

sector to come and oversee a change

employed basis – including

and knowledge they own” –

programme, whereas you can hire

freelancers, contractors,

and run open research

somebody who has done it many

temporary workers and

and development

times before and who can quickly

interim managers –

programmes, giving

grasp the context of change in your

topped 4.5 million for

individuals and small

organisation. Around 80 per cent of

the first time in the

businesses greater

the interim management market is just

first quarter of 2014.

opportunities to get

about transition and change projects.”

Of course, some 450,000 have entered self-employment involuntarily

involved. Add technology to the mix, and this flexibility allows

Kevin Cox, for example, is chief executive of Imanova, an alliance between the UK’s Medical Research

as a result of the economic downturn,

organisations to trial new products

Council and the three London

says the Resolution Foundation. But

or businesses, as well as respond

universities of Imperial College, Kings

the total figure has increased by more

faster to customer demands or new

College and University College. He

than a million since 2006, suggesting

opportunities, says Tony Peyton-

was initially brought in on an interim

that there’s much more to this shift.

Jones, the director of HR for Siemens

basis, through RSA Interim, to oversee

in the UK and north-west Europe, who

the purchase of an existing imaging

oversaw the report.

centre from GlaxoSmithKline and

“Apart from a blip in 2008, the move towards self-employment has been consistent and continuous. That leads

“At Siemens, we used to try and

its establishment as an independent

one to suspect we are looking at a

solve an engineering problem in-

structural change to the economy,”

house. But now we can put it out

says Simon McVicker, director

on the internet with some money

that haven’t existed before, so I’ve

of policy and public affairs at the

attached to it, and within hours

been setting up new businesses or

Professional Contractors Group (PCG).

have solutions from people around

helping to transition a business out of

“The challenge is for policymakers,

the world working in that area.

one organisation to another,” he says,

business organisations and trade

That drives much faster innovation.

adding that this route is no longer

unions to understand this, and not try

Organisational structures need to be

an unusual one to take. Now the

to fight 20th century battles in the 21st

much more agile,” he says.

business’s full-time chief executive,

century.” There are several benefits to this new way of working, for both workers and employers. The UK Commission for Employment and Skills (UKCES) recently launched a report highlighting the “dramatic changes” that UK

Right talent at the right time It’s a similar story behind the growth in interim managers, who can be particularly useful in helping

business. “I’ve typically been involved in jobs

he uses freelancers and contractors himself, particularly when looking to introduce a new piece of technology or an IT project.

organisations through periods

Flexibility or insecurity?

of transformation. Simon Drake,

Such arrangements can be hugely

chairman of the Interim Management

beneficial to individuals, too. Busines s voice | june/july 2014

21


“Individual choice is becoming

divide between the haves and the

a key factor in this now; people

have-nots.”

are making lifestyle decisions around how they want to run their careers,” says Drake. “Working as an independent self-employed contractor, offering services to a broad range of customers, can give individuals more control, rather than just being subject to whatever career path might be open to them.” Yet the recent furore over zerohours contracts suggests not everyone is happy with such flexibility, and some unions have been particularly hostile. The Chartered Institute for Personnel and Development (CIPD) estimates around 3.1 per cent – just over one million people – of the UK workforce are employed on such a basis, and 38 per cent of these would like to work more hours. The UKCES report predicted at least half the workforce could be employed on such a model by 2030. Peyton-Jones acknowledges that flexibility is a potential problem for certain people. “For some, agility will be a nice word – it means they can fit in with their childcare arrangements, and their life and work can be seamlessly integrated. For others, it will translate into job insecurity,” he says. Peyton-Jones also highlights another danger, as those with higher skills become more in demand and others struggle. “There will be people with specialised skills in areas where they can demand what they want, and others at the other end of the spectrum, with job insecurity. There will be a bigger 22

Busines s voice | june/july 2014

Changing policies Closely linked to the changing nature of the workforce are more flexible work patterns for those working within organisations. From the end of June, the right to request flexible working will be extended to all employees who have 26 weeks’ service under their belts. But businesses aren’t just responding to the rule changes – Clare Kelliher, professor of work and organisation at Cranfield School of Management, says that although some still “see it as a hindrance”, many organisations are starting to see the business benefits in more flexible working hours and remote working. The payback for employers comes in greater engagement, higher productivity and reduced stress, she

“”

Individual choice is becoming a key factor in this now

to connect to work later. It aims to adapt to the lifestyle of our different employees.” Minneci hopes that the programme will also help L’Oréal attract people from outside the London area. But such an approach will also be essential in helping organisations get to grips with an ageing workforce, where four generations could potentially be working alongside each other. A recent survey by the CIPD found flexible working options was the most common strategy for helping to support people working for longer, deployed by 42 per cent of organisations.

adds, as well as helping businesses

Managing performance

keep hold of mothers, in particular.

Yet there are challenges with such

Retaining mothers has been a

arrangements, particularly when it

particular focus for L’Oréal, which

comes to remote working. Although

is set to roll out its WorkSmart

Minneci says technological

programme this summer in a bid

challenges are relatively easy to

to become more attractive as an

resolve, she adds that it’s harder

employer for both existing staff and

to reinforce a strong performance

new recruits.

management culture and replicate

“The concept is that, providing

the more social aspects of work,

you perform in your job, you can do

which can help to build strong

it from wherever you want,” says

teams.

Isabelle Minneci, HR director for the

“We’re an informal organisation

UK and Ireland. “Effectively, it’s

from a cultural perspective, so lots

designed to address the new

of things happen when you meet

generation of workers coming in

in the cafeteria or round a coffee

and those who are parents. But it

machine,” she says. “If people are

could be for anyone who has a

working remotely they may miss an

passion and who needs to train for

element of that, so the question is

that during the day but then wants

how they can still work effectively when they’re remote.”


feature: Employment trends

Policymakers, as well as

workers who are not employed in

businesses, also need to respond

the traditional manner, says PCG’s

to the changing nature of the

McVicker.

workforce. Although the new

“We want recognition for this

regulation promotes flexible

21st-century way of working,” he

working, more needs to be done to

says, arguing that even the tax

recognise the growing number of

system doesn’t reflect the unique

contribution of such workers. “Policymakers are still very much in the mindset of employee and employer, and legislation tends to be drafted in that way.”

It’s work, but not as we know it The workplace of the future may not

Group and professor of autonomous

PricewaterhouseCoopers, gives the

just be about flexible contracting

systems engineering at Heriot-Watt

example of IBM’s Watson medical

models and working practices – or

University.

diagnosis programme.

even about humans at all.

“I do a lot of work with robotics in

“Much of that is asking routine

the ocean for oil and gas inspection

questions and then following up based

impact in some specific working

and maintenance. While you can put

on the responses you get,” he says.

environments, such as manufacturing

people down there, it’s dangerous and

“Clearly, at some point there is a piece

plants and inhospitable climates.

expensive, so robots are far and away

of inspiration or insight that human

the best solution,” he says.

beings can bring – but at what point?”

Already, robots are having an

“People use robots for the jobs that are dull, dirty and dangerous,

Artificial intelligence is also affecting

Such work could lead to a “dark age”

and where in some cases we don’t

tasks traditionally undertaken

where jobs are lost to machines, he

have a human option,” says Professor

by humans. Michael Rendell,

says, but it could also free up humans

David Lane, chair of the Robotics and

global HR consulting leader and

to concentrate on areas where they can

Autonomous Systems Special Interest

digital transformation leader at

add value and creativity.

Busines s voice | june/july 2014

23


feature: Employment trends

Women on the agenda It has been three years since Lord

report author and professor of women

development of women through

Davies’ report challenged the top UK

in leadership at Cranfield School of

the pipeline, and that’s the more

companies to achieve a ratio of 25 per

Management, is confident this will

fundamental problem.”

cent women on their boards by 2015.

be achieved.

The 2014 Female FTSE Board Report

She admits, though, that this is only

With more people working later in life, one option is to make it easier for

found 98 per cent of boards now include

half the battle. “The bad news is that

people to take longer to reach the top

at least one woman – one in five were

we’re doing this almost exclusively

positions, she says.

all-male as recently as 2011 – while the

through the appointment of women

percentage of women on boards has

to non-executive directorships,” she

so many big organisations work on the

increased from an average of 12.5 per

says. “The percentage of executive

premise that you have to get to the top

cent to 20.7 per cent in the same period.

directors on the top 100 boards who are

as fast as possible, working full-time,”

women is 6.6 per cent. What companies

she says. “It’s not a model that fits

aren’t achieving is the nurturing and

our times.”

There is clearly a way to go to hit the target but Susan Vinnicombe, 24

Busines s voice | june/july 2014

“It seems completely ridiculous that


cbi member lounge

your space The CBI’s new offices at Cannon Place in the City of London boasts a lounge exclusively for member use.

8 July Official opening party.

9am-5pm

90

Open all day, Monday to Friday, with

The number of policy professionals at the CBI working on the many

access to refreshments, free secure wifi

issues that impact on your business – available for briefings by

and printing facilities.

appointment. There will also be a range of drop-in surgeries and other networking events.

72 hours

Aardman Animations

To reserve the six-person meeting

The maker of the award-winning Wallace and Gromit series, was the

room or a quiet booth please give

first exhibitor in the space designed to showcase member products and

72 hours notice. Please arrange your

services – and the best of British business from around the globe.

visit in advance so that a pass is ready for you.

To arrange a visit or book a room Call: 020 7395 8010 or email: memberlounge@cbi.org.uk


A vote for change and growth Narendra Modi and the BJP landed a decisive victory in the Indian general elections. The clear mandate could lead to significant economic reforms. By Shehla Raza Hasan The electorate’s response to the

The Bharatiya Janata Party (BJP)

Modi’s victory brings to an end

led by prime ministerial candidate

almost 30 years of coalition politics,

PR campaign which created Brand

Narendra Modi won the 2014 Indian

dogged by uncertainty. It signals a

Modi demonstrates a real break from

General Elections with a landslide

new era in the country’s economy

the traditional factors driving India’s

victory. The BJP swept the polls

where he should be able to push

politics. It captured the imagination

in Delhi, Bihar, Uttar Pradesh,

through and implement economic

of the country, above all its social

Karnataka and Assam, in addition

reforms decisively without the

media-driven urban voter, and it

to their traditional bastion states

need to compromise. The stock

could well be the beginning of a new

of Rajasthan, Madhya Pradesh,

markets greeted the vote for a stable

presidential style of elections in India.

Chhattisgarh and Gujarat. And of the

government with such a mandate by

The promise of growth and its right

543 seats in the Lok Sabha (the lower

soaring to dizzying heights, breaking

wing Hindu subtext has yielded a rich

house of the Indian Parliament), the

the psychological 25.000 point barrier.

dividend for the BJP, which had sat

BJP comfortably crossed the 272mark giving it an absolute majority – winning 282 in its own right and 336 as part of the National Democratic Alliance (NDA) it leads. With the latter, the BJP will completely dominate the forthcoming Parliament, delivering a crushing blow to the Congress Party and its allies which have ruled the country for the past 10 years. They leave behind a poor legacy – a growth rate half of that achieved around six years ago, policy paralysis, draconian tax laws and rampant corruption. 26

Busines s voice | june/july 2014

Brand Modi BJP’s unprecedented victory was the result not only of India’s disenchantment with the previous government but also a brilliantly executed and massively funded campaign by the party or, more precisely, Team Modi. The effort put

in opposition for the past 10 years. This, many political analysts believe, indicates the coming of age of the non-ideological voter who has made its decision based on issues such as jobs, corruption and inflation, rather than the usual blend of identity and communal issues.

He now leads the world’s most

What does it mean for foreign investors?

populous democracy after covering

Some believe that the election

25 states, addressing 437 rallies,

result will prompt a rush of foreign

attending 5,827 events and travelling

investment. Television channels

300,000 kilometres at an average of

suggest that around 200 foreign

2,500km a day, between September

companies have been waiting in

2013 and May 2014.

the wings to pump money into the

in by Modi himself was impressive.


International: Indian elections 2014 economy which had seen dwindling

with a severely reduced opposition –

the future development of India may

growth over the past couple of years.

the future of the Congress Party itself

not be inclusive of minorities.

Foreign companies already in India are looking forward to a possible repeal of the draconian retrospective

will be a matter of debate in view of its

With absolute power comes great responsibility and even greater

crushing defeat. As chief minister for Gujarat over

challenges. The battle is won, but the

tax regime, an early introduction of

the last 15 years, Modi has a good

war to overcome those challenges

the Goods and Services Tax, better

story of growth and development to

will be long and tough. Modi will

land acquisition laws and early

show in the state. But he still has to

need to manage expectations

resumption of the EU-India free trade

gain the confidence of the Muslim

and move quickly to prove his

agreement. But the new PM’s first

community, which constitutes

credentials.

priority will be to get Indian business

around 14 per cent of the total Indian

investing again.

population, amid allegations of his

Shehla Raza Hasan is the CBI’s policy

But on the political front, this

tacit support of communal riots in

director in India.

result raises real concerns about the

the state in 2002 which left around

shehla.hasan@cbi.org.uk

preservation of democratic institutions

1,000 members dead. Critics fear that

The world's largest, longest and youngest election

814 million The number of people eligible to vote.

23%

47%

of voters were between

were below 35.

18 & 19 years old.

100 million The increase in size of the electorate since 2009.

Busines s voice | june/july 2014

27


member profile: Murad

More than skin deep 28

Busines s voice | june/july 2014


The UK skincare market is worth more than £2.1bn. With all the lotions and potions on the shelves boasting competing claims about their benefits, it’s a hard sector for new brands to crack. But Murad – currently about a tenth of the size of Dermalogica in the UK – is expanding its spa-based business to do just that. Murad UK was set up as a joint

the infrastructure or wherewithal

selling the range into them that little

venture in 2006 between British

to develop a direct marketing

bit easier.

entrepreneur Elliot Walker (pictured)

business, whereas the US spent

and the brand established in Los

millions of dollars each month

one customer to the next, and it’s

Angeles, US, by Dr Howard Murad.

on infomercials. So he has had to

expensive to service,” says Walker.

Founded in 1989, the products are

do things differently. Although he

He’s also had to tackle perceptions,

positioned as the first doctor-branded

speaks of “the pros and cons” of

to get spas to think that treatments

skincare range – and Dr Murad

adhering to brand guidelines, he

can be about more than relaxation –

is claimed to be the first to use

credits the US operation with giving

the preserve dominated by what he

ingredients such as pomegranate,

Murad UK the autonomy it needed.

calls the “fluff and buff” brands.

Goji berries, glycolic acid and antioxidants in his creams. In the US, Murad has a big directto-consumer business and sells through beauty retail chains Sephora and Ulta, as well as through salons. Walker, who was head of Europe for another skincare brand, saw the opportunity to replicate Murad’s success in the UK – despite two other distributors having tried, and failed, to do so before. Walker faced two big barriers. One was that the UK has no big beauty retailers. In addition, he lacked

Massaging the benefits The only part of the strategy that is similar to that of the US has been to develop a presence in spas – helpful for getting customers in front of Muradtrained experts who can advise which products they should use for the best results. But this is a slow way to build a business. As recently as 20 years ago, there were only 15 spas in the UK. Although there are now closer to 700, there are no successful chains that would make the task of

“It’s very much about going from

“Over the past seven years, we’ve gone from people saying ‘I don’t think you can use those products in a spa’ and us trying to explain why they could, to all the five-star spas taking in Murad,” he says. In this respect, the arrival of the credit crunch, only a year after the business was launched, was something of a blessing. Consumer habits have changed as a result of the financial crisis, says Walker, as fewer people feel they can justify the expense of “a relaxing rubdown”. Instead, they want to see results, whether that’s “rejuvenation” – a reduction in lines and wrinkles – or an improvement in skin conditions such as acne. Here, Walker believes the science sets Murad apart and gives it a Busines s voice | june/july 2014

29


to sell their products online – and

Murad UK factfile Founded:

2006 Staff:

50 Retail partners:

Harrods, Marks & Spencer, John Lewis, Debenhams and House of Fraser competitive edge. For example, he says the acne product is formulated with ingredients that specifically get rid of spots and blemishes. “With the best will in the world, some algae from the bottom of the sea is not going to get rid of it,” he adds.

New channels Even though the number of spas is growing in the UK, they reach only a small proportion of the consumer market. So from day one, Walker was keen to build an online presence. He had identified a weakness in his competitors’ business models which made it hard for their retail partners 30

Busines s voice | june/july 2014

Part of that expansion will involve

which has encouraged a new market

supporting the brand’s expansion into

of specialist beauty e-commerce sites,

bricks-and-mortar retail.

such as FeelUnique.com. “Murad is one of the first brands

Until recently, Murad UK’s only crossover into the bricks-and-mortar

that really embraced online beauty

space has been at Harrods, where

– and it’s batting above its weight in

the products are stocked at its Urban

an online environment because we

Retreat spa. But last year, it reacted

were an early adopter and saw the

to an opportunity and launched as

potential,” says Walker. The brand

a partner to Marks & Spencer’s new

is now in the top 20 brands on

beauty offering. And over the past

Feelunique.com and other sites like it,

18 months, it has been rolling into

he adds.

John Lewis, House of Fraser and

The strategy has paid off. Although the company’s figures are not made public, Walker says that turnover has

Debenhams with its “full-service” counter concept, the MuradSpace. Importantly, this set-up still gives

doubled over the past two years. Staff

brand advisers the space to talk to

numbers are also expected to grow

potential customers, use a diagnostic

from 50 to 80 by the end of the year.

camera to inform their product


member profile: Murad

purchases, and track their progress on

Murad UK is nodding to the success

return visits.

Walker is also proud that he’s grown

the US has had with infomercials – in

the business without outside help

The exact number of department

a way that it can afford. At the end of

or bank overdrafts, and indicates he

stores that will host a MuradSpace

2013, it launched on home shopping

wants to keep it that way. “You can

is still under negotiation, but Walker

channel QVC. “It was a big thing for

build a business quickly, but that

is keen to open only in locations

us, because we could have somebody

costs a lot of money. Or you can do

that don’t cannibalise sales in

telling the Murad story,” says Walker,

what we’ve done, which is build it

the company’s salon business.

adding that the brand has already

organically and put all the money back

Nevertheless, by the end of next year,

attracted a large following among the

into the company. That’s what we’ve

he wants consumers all over the

over-65s.

done here in the UK.”

country to be within easy reach of a Murad salon, spa or department store.

The fact that Murad UK doesn’t

However, with new channels to

have millions to spend on advertising

market and 30 new staff coming

“It’s been such a success that it’s

has forced Walker to build the brand

onboard this year, you get the sense

one of those things you wished had

slowly and steadily. “Lots of skincare

that the brakes are coming off.

happened seven years ago, because

businesses appear and disappear

Walker’s confidence in the product is

you’d be so much further ahead,” he

overnight. I think what I’ve built is a

being driven by the results.

says. “But then we wouldn’t have

solid business that will grow, because

had so much awareness, or laid the

we’re not dependent on one customer.”

groundwork for that success.”

Market leader Interestingly, the MuradSpace was developed in conjunction with the brand headquarters in the US. And although it was first launched at John Lewis in Oxford Street, the concept is likely to become the retail strategy for the rest of the world. In fact, after only seven years in business, the UK is the biggest of Murad’s 40 overseas markets, despite other distributors in other countries having been up and running for much longer. Now it has grown to a certain size,

Busines s voice | june/july 2014

31


Charting business growth & investment around the UK Amada has opened its new UK Technical Centre at its head office in Kidderminster. The new facility will serve as a hub for the machine tool manufacturer. At the launch in May, attended by 800 visitors, it showcased seven new machines – shown for the first time in the UK. Alongside the showroom, the centre houses customer meeting rooms, a school for technical training, a seminar theatre and an automated spare parts warehouse. Amada wants the investment to drive sales in

Aardman Animations is continuing its partnership with the National Film and Television School (NFTS) to run a second Certificate in Character Animation course. Aardman hired three graduates from the inaugural course in 2013. The intensive 12-week course, taught at Aardman’s Bristol studios by industry professionals, was launched to meet the growing demand for animation talent in the UK. David Sproxton, Aardman co-founder and producer, said: “The first course proved beyond doubt the effectiveness of linking a strong training institution with a first class industry player when it comes to high-level skills training. From the selection of the students to the finer points of the curriculum this was a very strong partnership. Having the students training alongside working professionals at our studio in Bristol was a great experience for everyone.”

32

Busines s voice | june/july 2014

Northern Europe, as part of a global management plan to double market share. The centre will be the main base from which Amada services the UK, Spain and Scandinavia.


cbi members: News in brief

Versarien

Capita Managed IT Solutions

the advanced engineering materials

has announced that it is investing nearly £30m over three years to create 400

group, has acquired 85 per cent of

jobs. It will nearly double the company’s employees in Northern Ireland to 945

graphene start-up 2-DTech from

as it aims to grow its customer base, expand its service range and significantly

The University of Manchester for

increase its service delivery capabilities. Invest Northern Ireland has offered

£440,000. Versarien will also set up

£4m of support for the new jobs, while the Department for Employment and

an intellectual property and research

Learning (DEL) in Northern Ireland has offered £1.2m of training support under

collaboration with the university,

its Assured Skills programme. Enterprise, Trade and Investment minister

initially investing some £300,000 in

Arlene Foster said: “Capita’s investment here will undoubtedly strengthen

two projects. Versarien’s CEO Neill

our ability to attract further inward investment in the IT and business services

Ricketts said: “Versarien is already

sector, which are recognised as key markets in promoting economic growth.”

manufacturing over 37 tonnes per year of complex powder at its Total Carbide plant and combining this know-how with 2-DTech’s expertise,

FMG

research facilities, and rights to

has recruited fleet industry expert Andrew Cope as executive chairman to help

intellectual property makes the early

drive its growth. Cope joins the Huddersfield-based firm, which specialises in

commercialisation of graphene

incident prevention and fleet management services, from Zenith, where he

related products far more likely in

was chairman and managing director and grew the business over 25 years.

the near term on an industrial scale.”

He has also acquired a significant stake in FMG. Cope said: “I have been

The university, where 150 academic

brought into the business to help with the future growth, which will potentially

scientists and engineers are working

include acquisitions and/or further MBO activity.” FMG holds major contracts

on graphene, remains a shareholder

with the Highways Agency, Asda, and a number of police forces as well as

and will benefit from royalty sales.

major insurers.

Let us know your news at edit@businessvoice.co.uk

Busines s voice | june/july 2014

33


Under attack Over the past 12 months, 81 per cent of large organisations and 60 per cent of small businesses have suffered a security breach, according to the government’s latest Information Security Breaches Survey.

With each security breach costing up to £1.15m, it’s not surprising that the majority of businesses have increased their investment in IT security. But the problem is not going away. Dr Andrew Armstrong, senior security consultant at Perspective Risk, highlights the ways in which companies can best protect themselves – and their data.

Q. How would you define the risks to information security for the UK’s firms?

A. As companies demand more capability from their IT

systems, so the need to secure those resources increases exponentially. Trends such as BYOD (bring your own device) and cloud computing raise as many questions as answers. Our increasing reliance on the internet and technology is proved by the growth in data gathering, predictive analytics and IT automation. Security threats in this “internet of things” are broad and potentially devastating. Cyberspace is an increasingly attractive hunting ground for criminals, activists and terrorists motivated to make money, cause disruption or even bring down corporations and governments through online attacks.

34

Busines s voice | june/july 2014

Companies must be prepared for the unpredictable, but they also have increasing amounts of regulation to contend with. For example, most governments have already created, or are in the process of creating, regulations that impose conditions on the safeguarding and use of personally identifiable information (PII), with penalties for companies that fail to sufficiently protect it. Firms need to treat privacy as both a compliance and a business risk issue, in order to reduce regulatory sanctions and the commercial impact of any breach.

Q. Much more attention is being given to cyber security risk than ever before, so why isn’t the problem going away?

A. The major problem is that we play catch-up, and there

is a degree of inevitability. We have seen a 92 per cent


Member clinic: Cyber security

increase in the use of bugs, such as the conficker worm,

they are fake. The goal of a phishing scammer is to gain

ransomware, script kiddies and spear phishing emails over

access to any information you type in, such as login details

the past 12 months. Keeping up with threats, techniques

or credit card information, which can be collected via

and trends is a full-time job.

fraudulent websites.

Trying to hide behind a couple of firewalls has proven

Spear phishing emails – where an attacker has used

to be ineffective in the early detection of these types

information gleaned from calling the switchboard or

of attacks. Fraudsters are using sophisticated phishing

looking at social networking profiles and interactions – can

schemes to steal personal and business information, and

also be sophisticated. People might not think they are a

then using this information in social engineering schemes

worthwhile target, but they can provide a foot-in-the-door

to get others to assist in the fraud process. Staff awareness

to their organisation or someone in their network.

and training are essential components in combating cybercrime. But where people are involved, a focus on

Q. How can firms adequately protect the reams of

putting the customer first will always provide opportunities

sensitive data they hold?

for compromise.

Q. So how should companies react? A. The corporate mindset needs to move from a focus on building ever higher walls, to a realisation that breaches have occurred and will continue to occur. Companies

A. The number of data breaches is going up – and

the amount of data stored is growing at around 50 per cent a year. Trying to protect it all is both inefficient and expensive. So we are seeing a move to information-centric security. This involves taking a more risk-based approach to

need a second line of defence, manned by an information

protecting confidential information, from source code to

security team, and a more holistic approach to threat

customer records to employee data. There are technologies

detection and remediation.

that aim to evaluate the sensitivity of individual pieces of

If we had a crystal ball, we would probably see a radically different IT security management

information and then apply security controls directly to movable chunks of it.

function in the future – one where the

Credit card data, for instance, can be

manager isn’t just managing the security

automatically encrypted if stored on the

of the company’s resources, but is

system, or, if that same information is

also actively involved in managing

shared within a company, rules can

governance, risk and compliance.

be established preventing users from

Q. Most people would assume

copying or pasting or removing the information.

phishing attacks are obvious – but

We need to make the security go

what can the most sophisticated ones look like?

A. Phishing is basically someone trying to

get you to do something, or tell them something through email, that enables them to compromise you in some way. But it’s not just about the famous Nigerian 419 scams – which lured people into giving their bank information with the promise of huge riches – or about rogue links or attachments that are easy to spot. One of the toughest phishing scams to detect and deter are “man in the middle” attacks. These involve malicious websites that look legitimate; they may even appear to be

where the data goes, rather than keeping data tied to secure locations. Who in their right mind would put a security guard at every door in the company? It should be the same for data handling, with bodyguards assigned only to sensitive or confidential pieces of information. However, the first step entails sifting through the files to determine what is sensitive and confidential. Experience has taught me that before an audit, a company will tell you they have four credit card files. However, when we go in, we find 40 files.

the real website of the company you’re looking for, though Busines s voice | june/july 2014

35


Q. How can companies promote employee compliance with their workplace security policies?

A. Most company policies are the result of compromise. The quickest route is to take a top-down approach, which

puts technology at the heart. But this method often fails because people don’t like to be put in boxes, so they will do what they can to circumvent the controls. The more intensive option is a bottom-up approach, starting with the people and how technology can serve the needs of the company. However, what tends to happen is that the security manager will write a technical policy to make his life easier, which is distributed to the senior management team who rewrite it to make their life easier. The result will not be perfect, but it trundles along and is updated as required. A good way of looking at the compliance conundrum is to consider what happens when you need a new pair of shoes for a work function. You have two choices. You can decide to match the shoes with the rest of your outfit, and shop around until you find a suitable product that feels comfortable. Or you can leave shopping until the last minute, rush into the shop and buy whatever it has in stock. The shoes might be too small or too large, might pinch or cause blisters, but you try to wear them in the hope that they will be comfortable, given time. From a compliance perspective, both shoes are a good fit – they contain the foot. It doesn’t matter if they are the wrong colour, the wrong size or cause blisters – as long as they contain the foot. Eventually, you will discard them and find something better that meets your needs. And that’s what happens with compliance. Technology requirements should be designed around human requirements. Otherwise, we are doomed to a life of audit non-conformity reports and corrective action plans.

Q. Should the approach differ for small and large companies?

A. Risk is risk. All companies, whether they are an SME

or a large enterprise, encounter similar risks. It is more a matter of the scale of risk exposure, and how you manage it.

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Busines s voice | june/july 2014


cbi diary: June/July 2014

Protecting the recovery

Businesses’ role in the continued economic recovery took centre stage at the CBI’s Annual Dinner. As political posturing is increasingly dominated by anti-business rhetoric, executives must “stand up and make their voices heard” on the importance of the free market, said Chancellor George Osborne. He was speaking at the CBI’s Annual Dinner, supported by ManpowerGroup and IBM and held at the Grosvenor House Hotel, London on 21 May. “Political parties on the Left and the populist Right want to pull up the drawbridge and shut Britain off from the world,” he said. “They want to constrain foreign investment in our economy, and deprive us of the British jobs that it has created in industries from car manufacturing to energy. They want to set prices, regulate incomes, impose rent controls, wage war on big business, demonise wealth creation, renationalise industries — and pretend that they can re-

establish control over all aspects of the economy.” He said that despite the British economy being “on the rise again”, it would be a “grave mistake” to think the job of sustaining the recovery is done.

Speaking up for business CBI president Sir Mike Rake shared this concern as he warned of the risks of political uncertainty caused by the European elections, the Scottish referendum, the general election and the possible EU referendum in 2017. “The focus of business concern has shifted towards these issues. And the uncertainty they engender is climbing up businesses’ risk registers, becoming a factor in investment decisions,” he said. He urged the next government to

stick with what’s working from this parliament, tackle the UK’s longterm economic challenges and not put politics before investment and opportunity. “There is no doubt that the challenges we will face during the next parliament require business support. We recognise our responsibilities, and that we have sometimes fallen short of them,” he said. “If politicians create the right environment, we will deliver the sustainable prosperity the country needs and deserves.” CBI director-general John Cridland also spoke to the attendees about his experience of the Speakers for Schools initiative, set up by BBC journalist Robert Peston. He delivered a talk to students at Greig City Academy, a mixed non-selective comprehensive school in Haringey, North London, in February. Busines s voice | june/july 2014

37


Hall becomes new deputy DG CBI’s chief policy director Katja Hall has been named

It will be a real privilege to work closely with CBI member

the organisation’s new deputy director-general. She

companies to achieve this.”

takes over from Dr Neil Bentley and will

Prior to her position as chief policy director,

lead the CBI’s policy development and

Hall was director of employment at the CBI.

lobbying work, as well as managing its

She has led CBI campaigns on Britain’s

international activity.

role in the EU, medium-sized businesses,

“The recovery is on track but there

infrastructure, skills and education,

are a number of political risks on the

improving gender diversity on UK

horizon, including the future of the EU,

corporate boards, modernising strike laws

the Scottish referendum and the general

and reforming public sector pensions. She

election next year,” said Hall. “My job will

sits on the government’s Better Regulation

be to help businesses to navigate these, and other, challenges – driving and developing policies that enable firms to create growth that benefits everyone.

steering group and the Creative Industries Council. Before joining the CBI, she worked at the BBC on employee relations and change management.

upcoming events

The UK’s energy future

Pioneering Women

Energy continues to top the political agenda and will be

National Grid’s power system manager Rachel Morfill,

at the front of voters’ minds ahead of the 2015 election.

RSM International chief executive Jean Stephens, Cisco’s

The challenge is to create a policy framework that allows

director of sales acceleration Tania Wright, Thomas Cook

business to deliver value to consumers, keeps the lights

CEO Harriet Green and EY’s director of global immigration

on and drives the low-carbon transition. On Thursday

Sue Kukadia are among the 49 women aiming for top

17 July, Professor Nick Butler will chair the half-day CBI

honours at this year’s First Women Awards. The awards,

Energy Conference in London. Keynote speakers include

founded by Real Business and the CBI, recognise

Ed Davey and Caroline Flint, the minister and shadow

pioneering UK women who have opened up opportunities

ministers of state for energy and climate change and

for others. The winners will be revealed at London Marriott

Dr Fatih Birol, chief economist and director of global

Hotel, Grosvenor Square on 12 June.

energy economics at the International Energy Agency.

Calling future leaders The CBI’s Leadership Programme is now open for applications from senior executives at CBI member organisations. The programme offers unrivalled access to policymakers and business leaders to those who want to develop their external influencing skills and ability to better consider the policy, political and economic landscape in London, Brussels and internationally. Now in its third year, the programme commences in October 2014.

Save the date 38

Busines s voice | june/july 2014

CBI annual conference

Date: 10 November 2014 Venue: Grosvenor House, London Contact: annual.conference@cbi.org.uk


cbi diary: June/July 2014 regional events

scotland Annual lunch - Celebrating all Things Scottish Date: Friday 26 June Venue: Crowne Plaza Edinburgh The Roxburghe, Edinburgh Annual dinner Date: Thursday 28 August Venue: Hilton Glasgow Westminster Parliamentary Reception Date: Tuesday 28 October Venue: Scotland Office, Dover House, Whitehall Contact: colette.cunningham@cbi.org.uk

wales Annual lunch Date: Friday 6 June Venue: St David’s Hotel and Spa Contact: colette.cunningham@cbi.org.uk

Northern ireland Annual economic briefing & lunch with Dr. Martin Weale, Bank of England Monetary Policy Committee and Alan Bridle, Economist, Bank of Ireland Date: Wednesday 18 June Venue: Hilton Hotel Belfast Members networking lunch with CBI chief policy director Katja Hall Date: Friday 20 July Venue: RSM McClure Watters Global role breakfast briefing with Northern Ireland’s new MEPs Date: Thursday 31 July Venue: Belfast Hotel (7.30am – 9.30am) Members’ regional lunch (Armagh/Tyrone area) Date: Thursday 14 August Location: Dungannon Senior executives’ networking dinner Date: Monday 15 September Venue: Ulster Bank HQ, Belfast Annual lunch with Margaret Byrne, CEO, Sunderland Football Club Date: Thursday 25 September Venue: Titanic Belfast Contact: anthea.savage@cbi.org.uk

london MSB export finance round table Date: Friday 13 June Venue: CBI, Cannon Place, London Meet the mayor’s advisor round table with Kit Malthouse Date: Tuesday 17 June Venue: Hays, 107 Cheapside, London, EC2V 6DN Contact: rebecca.clarke@cbi.org.uk

north west MP & MEP meeting & lunch Date: Friday 11 July Venue: Chester Zoo Contact: angela.gault@cbi.org.uk

north east Annual dinner - investing in the North East Date: Wednesday 1 October Venue: Hilton Gateshead Contact: ciara.stenning@cbi.org.uk

west midlands

Annual dinner with broadcaster Justin Webb Date: Thursday 5 June Venue: Edgbaston, Birmingham Contact: julia.fox@cbi.org.uk

east midlands International trade lunch with Kevin Oakes, CEO, Steelite International and Simon Moore, CBI international director Date: Thursday 5 December Venue: Royal Crown Derby, Derby Contact: sarah.wood@cbi.org.uk

east of england Annual dinner with CBI director-general John Cridland Date: Wednesday 1 October Venue: Duxford AirSpace, Cambridge Contact: anne.cullom@cbi.org.uk Busines s voice | june/july 2014

39


Bv Published by Caspian Media for the CBI www.caspianmedia.com

Editorial and production 020 7045 7585 edit@businessvoice.co.uk

Editor Pip Brooking

Digital design Silvia Lopes

Creative director Nick Dixon

Publishing director Ian Gerrard

Contact the CBI 020 7379 7400 www.cbi.org.uk

Tell us what you think businessvoice@cbi.org.uk Opinions expressed do not necessarily reflect the policies of the CBI. Caspian Media Ltd and the CBI accept no responsibility for the views expressed by contributors.

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Busines s voice | june/july 2014

Business Voice - June 2014  

The magazine of the CBI, the UK's premier business lobbying organisation.

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