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
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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
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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
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