Owning our mistakes–not an earnest business blog

We all make mistakes. We try not to, but admitting to failure is a way of helping us to do better. Fortunately for most of us, the errors we make will be relatively minor in our work activities, but a big blooper can be a source of considerable worry. I remember getting something badly wrong when a junior manager back in the eighties. I was terribly upset, and it took me months to put it right, though I did without any damage in the end. It was coming up with the solution that took a lot of thinking. I learned from it, firstly to be more careful, and secondly to give myself more time with testing issues. With hindsight, I had too much work put on me because of the resignation of a colleague at the time and the long term sickness of another. There was a lesson there too in that one needs to know the pressures on staff, which my senior manager and bosses were unconcerned about. Those mitigating circumstances were not enough to let me off the hook in my view. The actual mistake was mine.

I can also think of mistakes I have made either in making career moves or not making them at one time or another. It is however no good thinking “if only I had done this” because if I had done something else at any point I would not be where I am, which is quite happy even if not a billionaire (yet). In business for myself, I have made mistakes, mainly in persisting with the wrong sort of advertising way after it should have been clear it wasn’t working.

Someone whom I knew and alas is no longer with us was a man full of bright ideas; indeed he was a very clever man. He was good at inventing new processes and was an excellent engineer. Something he was not very good at was business, exploiting his ideas or indeed being able to understand whether there was a market long term for the concepts he came up with. He would have been better working with and trusting someone who had a better business brain than he but because of his considerable ego he always knew best; he thought anyone who doubted his abilities to turn his ideas into money-makers was obviously wrong, and consequently his companies would go bust. Ultimately he was risking not only his reputation and means to carry on future projects, but also the security of his loyal family who ultimately had to pay a considerable price because he thought he was always right.

This brings me to the British Government. We have a major economic “downturn” as they call it, but it is clear that we have a serious recession perhaps even comparable with the crash of the early thirties. The Prime Minister blames events in America, and of course they have had a huge impact on all of us, and I am not going to bore you by going through that which you already know. Nevertheless, we (in UK) are much less able to ride the storm than our compatriots in other Northern European countries, largely due to the level of borrowing the Government already has, and the even higher level it is facing in an attempt to buy its way out of the slump with building projects etc. to create jobs. These splurges of our money are described as investments, but we all know that investments have to be in viable long term projects that will return a decent amount in the future. There really is no way of calming a storm once you are in it. You have to ride it out. The expenditure announced by the Government is enormous compared to the likely return even if these expensive jobs which are being purchased are viable long term. Of course the savings to income ratio in Britain is amongst the lowest in Europe, and of course not encouraged by Gordon Brown’s pensions grab, his first act when becoming Chancellor of the Exchequer in 1997. The same move also hit small income investors in British business, who were denied the privilege of reclaiming the tax credits on dividends as had the pension funds. Therefore people have not rushed out to take advantage of the ill-judged and expensive cut in VAT. Few have any cash to spare until the storm blows out.

Coupled with all these mistakes is the failure of the regulatory bodies to do their job, partly because of the splitting of responsibilities. We had the Equitable Life failure over seven years ago, which should have woken up the FSA (whose faceless members later failed to spot the dangers of the US sub-prime market and the practices of the lenders). The FSA, the Bank of England and the Treasury needed to take swift action over the Northern Rock affair which was the first serious breakage, but dithered. The “independent” Bank of England’ was obsessed with the housing market (not translated into wondering where the mortgage money was coming from) at the expense of business, and it was apparent in early to mid-2007 that interest rates were actually far too high. I discussed this with colleagues at the time and found the other day an email on the subject.

The Government is complaining that somehow it is not its fault that the economy’s wheels came off along with those of some other nations, but they did not spot the wheels were loose and tell other nations about their loose wheels. Now we have crashed and we are more badly hurt than many. The consequences for the UK and (which I will talk about soon) the knock on effects for Third World nations who depend on us to a greater or lesser degree are frightening. Somehow the Government and its ministers are not taking responsibility for their blunders, and surely they cannot do so unless they acknowledge them like the rest of us. Their egos are their weakness, but that is why they are politicians. They are no different from my engineer with the bright ideas and no inkling as to how to harness them. They may understand that they are wrong but won’t own up.

Sky News has been trailing their new programmes fronted by Jeff Randall, former BBC business Editor latterly with the Telegraph. Jeff says in the clip “If I were Prime Minister I would resign”. So would I, but that would amount to taking responsibility, wouldn’t it?

© Jon Stow 2009

Referral networking and serendipity

Once upon a time, well in 1985, Dr. Ivan Misner, my fellow Ecademy BlackStar more or less invented referral networking, at least in the formalised way we see it today. Following my accreditation course to a well-known network of business advisers, or management consultants as they were more likely known twenty or thirty years ago, I was assigned a coach. I had weekly telephone meetings with him to assess my progress in getting work and to help me with my marketing. Remember, this was still in the Dark Ages of 2003.

One day, Coach said to me “You should think about joining BNI or BRE”.
“What are they? I asked.
“I don’t know” said Coach “but they are on the list of marketing tips I am supposed to mention”.

Well, even though it was the Dark Ages they had invented search engines and I would have used Yahoo in those days. I tracked down the local BNI franchise and after a false start try-out with a bunch (or a Chapter) which had totally lost direction I joined a pre-launch core group which was to become a full blown BNI chapter with whom I had breakfast every week (and attendance is essential unless you can send someone to stand in for you).

The big advantages of referral networking are that you learn to get on your feet and sell your business in (usually) one minute and, because it is expected of you, you learn to sell not just your own business but that of the other members all the time you are out seeing your clients. It is a huge confidence booster especially when you are feeling your way in business, and it is great to feel you have the support of other members.

I have to say, though, that BNI was not a great success for me in terms of promoting the business adviser – management consultancy type business, which is ironic given that Ivan was a management consultant when he came up with the idea of BNI. The members of our Chapter were all rather small businesses themselves and not my ideal customer. That was in itself fine, because the aim in BNI and clones of it is that the other members sell your services by passing your business card to their clients or customers, recommending you and promising that you will call. No, the problem for me was that the other members of the Chapter were B2C businesses whereas for me it would have been much better if they had been B2B offering office cleaning, industrial electrical contracting, office furniture fitters or something akin to that, meeting owners of larger businesses with a number of employees. I had similar issues with another referral networking group I joined subsequently.

Still, I was nearly three years in BNI, and stayed mainly because I enjoyed the atmosphere and liked most of the members. I was Membership Coordinator (VP) twice and in my second time ran the meeting for four months after the Chapter Director (President) upped sticks and left. I enjoyed that immensely, which is amazing for someone who was nervous of doing his sixty seconds, let alone a 10 minute presentation when he first started out. Towards the end of my tenure the Chapter’s printer cane up to me at the end of the formal part of the meeting and told me it had been the best run in his three years in BNI. I must have been doing something right! It still did not help me get any business and eventually I decided to leave because of the huge time and investment which was no longer paying off.

Why “no longer paying off”? Didn’t I say that I got very little business advisory work? Well, that’s true. However, this was where the serendipity factor came in. When I joined the core group there was already an accountant filling the relevant category which included the area of my particular expertise, which is direct taxation. He and I became good mates and as tax was not his forte I provided a sounding board for him. My friend was in the process of taking a step up from his small local firm (just him) to joining a firm of accountants in London. They had inherited a major tax investigation into the affairs of one of their clients and when my friend joined they had no one of sufficient experience to deal with HM Revenue & Customs (as they now are) in such matters. I was called it to work solely on this one client, for whom I obtained a very good settlement.

Anyway, I earned for myself over a period of nearly four years some tens of thousands of pounds from this work, which was not related directly to what I was marketing in BNI. The point is to get out there because you just never know.

While I was not a great success in marketing the business helping-hand work I had diversified into, I learned a great deal from BNI though the philosophy of “Givers Gain” which is basically the art of giving in order to get. It is a hard thing to get used to for some, but in fact one can get great pleasure from helping others; I always have, but in case you think I am building myself up here, I have to say that giving is fun. My Grandfather used to say that giving was selfish because one really did it to please oneself. Combine that with giving in order to receive and that is doubly selfish, but it is a great way to go about business. Knowing that one has referred many thousands of pounds of business is in itself very satisfying too.

Give BNI, BRX as BRE has become, or a similar organization a go, especially if you are B2C and dealing directly with the public. Remember you have to be at the meetings, not just because the rules say so, but because you need to gain trust and be seen as reliable and reachable in case there is any slight problem with a referred customer of client. Know that your BNI or other colleagues will work hard and do their best for the referred client or friend because otherwise they will let you down too. Give out as much business as you can and if you receive a fraction of that you will be happy and prosper. And there’s always serendipity. You just never know.

© Jon Stow 2009

Surviving the recession blues

These are strange times. There is constant news of job losses in the UK and of course in the US, and no doubt in may countries around the world. We hear of “rescue” packages launched by Governments, the most recent being that announced in Germany this morning. I wonder about all these stimulus measures taken by central government. One cannot create large numbers of jobs in sectors where products or services are not in demand, and throwing taxpayers’ money at something is in the end not in the interests of the greater population who have to pay for it.

Let us not get too depressed though, because the real answers will be found by business itself, and by those who may be condemned as short-term opportunists, but whose business acumen in spotting those opportunities will be what pulls our economy and the world’s economy round, Only this morning, Tesco has said it will create a further ten thousand jobs. That’s quite a lot even for a supermarket chain that is by a street the largest in the UK, and was at the last count I saw the second largest in Europe behind Carrefour.

There will be other large companies who will move quickly. Fast feet are useful to have in a changing and difficult market and where there is a possibility of filling in gaps left by failed businesses who were less adaptable. That is where the new jobs will come from, and where the root of the recovery will be.

In the meantime there are a lot of people who find themselves without a job, and many of those are finance professionals who worked for banks, in insurance, and in accountancy etc. I myself worked for various firms of accountants, small and large over the years. There is an irony that many firms of accountants, especially larger ones, call themselves “business advisers” and yet many of those who have been laid off from that sector will not have a clue what to do. It is a big leap from being employed with a monthly salary you count upon having to having no job and not knowing how to start making money again in a weak job market.

I have written elsewhere that when I found myself in the position the newly redundant in our sector are now in; seven years ago I did not want to be without a job and indeed thought I was a pretty good performer. It was all a complete surprise. It took me the best part of a year to reconcile myself to running my own business. Now of course I would not want to do anything else, but it required a complete change of mindset in order to start a business in the area which I knew most about. I had no choice in many ways as it was a question of survival at a time when prospective employers could enjoy window shopping for employees and wasting everyone’s time, whilst discounting those more mature candidates who might know more than them and show them up. You would think they could look beyond that to the valuable experience they could draw into the business, but that is human nature.

My concern for many financial professionals is that their particular skill will not adapt well to a small business environment. One cannot easily set up a bank on one’s own, and corporate finance or even corporate tax on their own are not areas for very small business. This type of work has to be part of a package with other services. I was lucky in that I could adapt much of what I already knew, though it has been a long march. Adaptability is key though, and the sooner our newly redundant can change their mindset the better. After all, being redundant is not to be taken personally. It is nearly always an accident as mine was, and it is important after initially licking one’s wounds to reestablish one’s self esteem. We always have skills someone else will need.

Ralph Waldo Emerson (I can always rely on him) said “We do not live an equal life, but one of contrasts and patchwork; now a little joy, then a sorrow, now a sin, then a generous or brave action.”

The brave action is what is needed and in future pieces I shall discuss the generous element required when talking about my networking experiences, starting with referral networking six years ago.

Jon Stow