God’s Own County? Or God’s Own Country?


From Catalonia to the Aland Swedes in the north of Europe to Sardinia and Sicily in the south, there seem to be an ever increasing number of demands for independence, greater regional autonomy or simply more local power. Could it be that Yorkshire is now about to join that list? God’s own county may not become God’s own country, but with serious conversations being held about a ‘Yorkshire mayor’ it looks like the region could well be set for much greater control over its own economy, investment and spending.

…And apparently we already have the runners and riders. Mane’s neatly plaited and jig-jogging round the paddock are Ed Balls from the Red Stable and William Hague from the Blue.

At first glance it is – to use the colloquial term – a no-brainer.

Yorkshire’s Gross Domestic Product – roughly £120bn – is equal to that of the Ukraine and bigger than 11 EU countries, including Hungary, Bulgaria and Luxembourg. Leeds is the largest legal and financial centre outside London – its financial and insurance industry is reckoned to be worth £2.1bn a year. Sheffield has an economy equal to that of Ghana. On the sporting field Yorkshire gained more medals at the Rio Olympics than Canada.

Yorkshire has a bigger population than Scotland: its GDP is twice that of the whole of Wales. And yet it has the powers of neither.

Liverpool, Manchester and Teesside have directly elected mayors, exercising executive powers. And directly elected mayors are more responsible to the local electorate: they’re in power for four years – they can take the tough decisions that need to be taken. What’s more a local mayor is more recognisable – more of a figurehead, both engaging more people in politics and attracting inward investment. A ‘heavyweight’ like Ed Balls has to be more attractive to foreign companies than, say, the head of the regeneration department at the local council.

Yep, it’s a no-brainer. Roll on the first elections for Yorkshire mayor in 2018.

Wood, Frank Watson, 1862-1953; Alexander Darling, Mayor of Berwick-upon-Tweed (1925-1927)

Or maybe not…

Because the more I think about it, the more cautious about the idea I become. Hang on, I’m just going to jump in the car…

I drove from Leeds to London to Birmingham to Liverpool to Manchester and back to Leeds. A round trip of not quite 500 miles. But on that journey I drove through four areas with directly elected mayors – five if Yorkshire follows suit. That’s five directly elected mayors with their attendant salaries, staff and bureaucracies. Many would argue that what this country needs is less government, not more government.

It’s like a business adding layer upon layer of ‘spending and oversight’ committees: ultimately, they’re all costs which have to be borne by the people that produce the wealth.

And I’m not sure that a politician is the answer. Andy Burnham and Steve Rotherham – both Labour party stalwarts – have washed up in Manchester and Liverpool respectively. Aye, there’s always Mayor of Yorkshire, love. I may have failed at Westminster but t’party has found me a cushy number in Leeds…

No thanks.

If we are to have a Yorkshire mayor, give me someone with business experience: someone like Gary Verity – or better yet, Barry Dodd, someone with experience of business, spending, the LEPs and dealing with politicians.

Mayor of Yorkshire would be a tough gig. Getting Leeds to agree with York is a challenge, before we try and get Sheffield to agree with anyone in West Yorkshire. And then there’s geography. As my former TAB York members on the coast would tell me, Scarborough to Skipton is a three day camel trek.

Money does need spending in Yorkshire, but I have my doubts as to whether a mayor is automatically the right answer. The problem is that the Government seems addicted to expensive gestures, irrespective of their real benefits.

…Which brings me neatly on to HS2. What’s the latest bill? Somewhere north of £50bn – it’s set to be the most expensive railway in the world. I suspect it will cost Elon Musk less money to colonise Mars. Let’s spend a fraction of that money and improve the rail link between Leeds and Manchester and Liverpool. An hour stuck in a siding outside Huddersfield would concentrate the new Mayor’s thoughts. At least they’ve stopped calling the trains ‘sprinters…’

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You Have Three Months…


Two weeks ago I used a quotation from the late Terry Pratchett as the inspiration for the blog. Struck by the analogy between writing a book and building a business, I wondered if any other writers had some inspiration for us.

Not so much ‘if’ as ‘It…’ That’s the title of Stephen King’s book about a demonic clown which terrorises children in a fictional town in Maine. Whatever you think of the storyline, the film of the same name has just opened – with the third biggest box office opening of the year and largest opening for a horror movie in history. And whatever your view on Stephen King’s writing two facts are indisputable: he’s productive – more than 50 books written – and he’s successful, with around 350m books sold.

So like Terry Pratchett, does King have any insights that we can translate into the business world? ‘Yes’ is the short answer: thirty seconds with Google brings up Stephen King’s ‘Top 20 rules for writers.’

I’m not sure they all translate into business. Number three – ‘don’t use adverbs’ – probably isn’t relevant, I thought confidently. Scanning the list hurriedly I came to number five. ‘Don’t obsess over perfect grammar.’ Right, I’ll try not to do that in this blog what I write every week…

But let me pick out just three points, the first of which is ‘stick to your own style.’ King is counselling against trying to write like John Grisham or Tom Clancy – but the same holds good in business. We all have our heroes of the corporate world: but you cannot run your business like Richard Branson (not, sadly, that he will have much time for business now…) or whichever of the Dragons you want to be this week. You can only run a business in your own style, in your own way and – hopefully with TAB’s help – building on your strengths and compensating for your weaknesses.

‘Write one word at a time.’ That piece of advice almost sounds too obvious to be worth considering: but it has an exact parallel in business. Good years where you demolish your targets don’t just happen: they are made up of good months, good weeks and good days. Success in business is not about consistency of results, it is about consistency of effort. As I have written many times, if you do the right thing every day, the results will come.

But it’s the third point that I think is the most interesting. ‘You have three months,’ says King. ‘The first draft of a book – even a long one – should take no more than three months, the length of a season.’ By a long book King means 180,000 words, which he aims to write at 2,000 words a day over 90 days – consistency of effort.

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Interestingly, the obsession with three months chimes with something I was reading about Tim Ferriss, of 4 Hour Work Week fame. I’ve commented previously on Ferriss not doing what he thinks will make him happy, but what will excite him. He refuses to have long term plans, instead working on what he describes as three to six month ‘experiments.’ Often he has no idea where these experiments will lead: “What’s the worst that can happen?” he says. “You waste a few months and learn a lot while doing it?”

Three months for the first draft of a best seller: three months for an ‘experiment’ that might change your life. And for me, three months is a very effective period for your business. It’s long enough to set targets which have urgency, without being simply today’s to-do list. More importantly, it’s a long enough trial period.

If you still have misgivings about someone after they’ve been doing the job for three months, you’ve probably made the wrong choice. If your latest brainwave isn’t showing clear signs of working after three months, it’s probably best to cut your losses. And if your KPIs are still off-course after the third month, it is most emphatically time to take action – or bring the problem to the next meeting with your TAB colleagues.

Thanks for the reminder, Mr King. ‘You have three months’ is great business advice – and right now those three months will effectively take you to the end of the year. Make the most of them…

Business Advice from Dr. Who


You know how I like to keep up to date with cutting edge modern business management theory, so let’s start this week by hopping in the Tardis and travelling back to the 14th Century. Then we’ll fast forward to the early 20th and consider one of the fundamental building blocks of any business – garden peas.

William of Ockham (or Occam) was a Franciscan friar, philosopher and theologian who died at age of 60 in 1347 – having first come up with a key business principle that still applies 670 years later. Occam’s Razor states that among competing hypotheses, the one with fewest assumptions should be selected. Or more succinctly, the simplest explanation is nearly always right. Or in business terms, KISS.

And now to the University of Lausanne in 1906 where the Italian economist Vilfredo Pareto made the famous observation that 80% of the property in Italy was owned by 20% of the population. As you do, he then went home and confirmed the hypotheses: 20% of the pea pods in his garden held 80% of the peas. Later generalised as the Pareto Principle, the 80/20 rule was born.

We have all known about KISS and the 80/20 rule pretty much from 9:30 on day one of our business careers. We also know that they are as relevant – and as useful – today as they have ever been. So why don’t we give them the respect they deserve? And how can we use them to help build our businesses?

In many ways this is part of the ‘back to basics’ feeling that I’ve returned from Denver with. As technology gets ever more sophisticated, as a new app appears on our phone every week, as there seem to be 101 ways to solve every problem, it’s easy to forget the basics. It’s easy to forget that the simplest solution nearly always is the best solution, and that whatever we do, 20% of our customers give us 80% of our sales and 20% of our time produces 80% of our results.

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So how can we use these old rules to build our businesses?

Let me take the last point first. It’s four or five years now since I first started using Toggl to track how I was using my time – and I still remember the shock when I looked at my first report. How much time had I lost/wasted/frittered away in the week? I’ll keep that one to myself, thanks.

I’ve written many times that you owe it to yourself and your family not to work 60-80 hours a week. 40-45 is fine, providing you are working productively for all those hours. The reason that 20% of our time produces 80% of our results can sometimes be that we’re only working productively for 20% of our time.

Now let’s turn to our customers or clients. For the majority of businesses, 80% of the customers do account for 20% of the sales. So if you want to grow your business, ask yourself two simple questions: where did those customers come from? And what need do we meet for those clients? Answer those questions, and then go out and find some clients that match the same profile.

But this is where Occam’s Razor comes in: this is where we need to resist the urge to over-complicate.

I’ve seen a couple of articles suggesting that the 80/20 rule is scalable. If my top 20% of customers produce 80% of my sales, why don’t I repeat the exercise with just those customers? Wow! My top 4% give me 64% of my sales. (Trust me on the maths!)

No. The simplest solution is the best solution. Once is enough. 4% of your customers is too small a sample: you run the risk of including the one outlier that skews the statistics.

Let me finish with another instance of the 80/20 rule. We’re all familiar with the old saying: ‘I know that half my advertising budget is wasted. I just don’t know which half.’ Today, that no longer applies. Google analytics, ads on Facebook – today you can measure the return on your marketing budget very accurately. And again, you’re going to find that one or two channels account for the vast majority of your leads or sales. Don’t be afraid to concentrate on those channels: you no longer have a moral obligation to keep the local newspaper afloat.

That’s it for this week. After the summer holiday and the trip to Denver I’m looking forward to a weekend at home doing not very much. Then again I have teenage boys: time to reach for my taxi driver’s hat…

The Valley of Clouds


You know how it is on a long flight: you read anything and everything. A history of the sword making industry in Toledo? What could be more fascinating?

So it was that somewhere at 30,000 feet I came across an article that included this quote: it’s from an author – and a bonus prize to anyone who guesses the author before the end of the post…

There’s a phrase I use called ‘The Valley Full of Clouds.’ Writing a novel is as if you are going on a journey across a valley. The valley is full of mist, but you can see the top of a tree here and the top of another tree over there. And with any luck you can see the other side of the valley. But you cannot see down into the mist. Nevertheless, you head for the first tree. At this stage in the book, I know a little about how I want to start, I know some of the things I want to do on the way. I think I know how I want it to end. And this is enough…

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That may well be a description of how the author wrote his books. Isn’t it also an exact analogy for the entrepreneur’s journey – the journey we’re all on?

The long flight took me to Denver, for TAB’s annual conference – as many of you know, one of my favourite weeks of the year. It was great to meet so many old friends and (as always with TAB) make plenty of new ones. The best part of it for me? It was simply going back to basics. After the whirlwind of becoming the MD of TAB UK – after spending so many hours with solicitors, bankers and accountants – it was wonderful to be reminded of the simple truth of why we do what we do.

That’s why the quotation chimed so exactly with me: all of us start our journey with a lot of faith and not much in the way of a ‘map.’ As the quote says, we know where we want to get to, we can see a few staging posts along the way: but the rest we’re going to discover on the journey – and we accept that there’ll be plenty of wrong turns.

So when we start the valley is full of mist – but we can emphatically see the other side. Most importantly, we can see the people we love on the other side of the valley, financially secure and happy. We can see our future selves as well – not just financially secure, but fulfilled because we have achieved what we set out to achieve and realised our full potential.

I know some of the things I want to do on the way. Yes, when we start our entrepreneur’s journey we do know some of the things we want to do: in my experience we want to do things differently, ethically.

And sure, we can see the top of one or two trees – but none of us can see down into the mist. We can’t see the route we’re going to take.

And that might be just as well, because if the mist cleared and we saw all the late nights and missed weekends, the deadlines and the stress, we might decide that the journey across the valley isn’t worth it.

Trust me, it is.

Some members of TAB UK have just reached the first tree. Some of them are a long way across the valley and plenty have reached the other side. Building a business is exactly like walking through the mist – but if you have a guide, someone who can say ‘I was here a year ago. This is the path I took’ then you are going to cross the valley much more quickly, with far fewer wrong turns.

Let me finish with another reflection on Denver. It was absolutely inspiring: TAB is now in 16 countries and is becoming a truly international organisation. The latest country to launch is India – along with China one of the two fastest growing major economies in the world and a country almost synonymous with the entrepreneurial spirit.

As always it will take me about a month to process everything that went on and everything I learned in the week. But I came away with one key reflection: the strength of our team here in the UK. The calibre of the people involved is both humbling and inspiring. Truly, if you are at any stage on the entrepreneur’s journey – just starting or halfway across the author’s Valley Full of Clouds – you could not wish for better guides than the TAB UK team.

The author? The late Terry Pratchett.

Dear Prime Minister…


Last week I looked at the lessons we can learn from the General Election campaign.

This week I wanted to start with, ‘The dust has settled and we can get back to normal…’ But, apparently not: still no deal with the DUP and a Queen’s Speech which roughly translated as, ‘Sort it yourselves, I’m off to Ascot.’

Apparently many Conservative MPs are privately admitting to disappointment at the way the Prime Minister has handled the talks with the DUP. Ah well, it’s not as though she has any major negotiations coming up…

But sooner or later the dust will settle: sooner or later we will have a government that won’t be in permanent crisis. Perhaps then the politicians could turn their attention to business: to the tens of thousands of small business owners up and down the land that are building a future for themselves and their families.

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So here’s my open letter to whoever is PM when the music stops. I’m sure TAB members and franchisees will have their own ‘wish lists.’ Here’s mine…

First and foremost, Prime Minister, perhaps you and our other elected representatives could put your big boy pants on? Raise your eyes from the Westminster village and your plots and counter-plots and realise that there is a country to govern. More importantly a country which faces serious challenges – whether it is the ageing population, the ridiculous amount of money wasted on treating the all-too-preventable obesity crisis or the impact AI and robotics are going to have on our jobs. It is time to stop kicking every potential crisis into the long grass and hoping it doesn’t need addressing again until you are writing your memoirs.

And then there’s Brexit – in particular, defining the shape you want it to take. Call me old fashioned but – like most business owners – I prefer to go into negotiations knowing what I want to achieve. That doesn’t seem to be the case at the moment.

As a business owner and a father, I want to see continued investment in our world class universities. We cannot turn the clock back: we live in a global society and we’re not just competing locally for the best talent, we’re competing internationally. So let’s do everything we can to attract that talent to the UK. And while I’m on education, could we just have a radical overhaul of the school curriculum? As Dan and Rory get older I look at some of the work they bring home and I think, ‘that’s the same essay I did thirty years ago.’ If they ever need to know about an ox-bow lake they’ll ask Wiki: teach them to be creative, to solve problems.

Increasingly work is about successful collaboration: and yet we continue to examine ever more irrelevant subjects on an individual basis. Would it be so hard to examine a project that four students had worked on together?

What’s next? A comprehensive review of the tax system. Seriously, what is National Insurance? Would anyone invent it now? In much the same way as we have 20th century town centres trying to cope with 21st Century shopping habits, so we have a 20th Century tax system trying to cope with 21st Century working patterns. People have more than one job, they’re employed, they’re self-employed, they’re contracting, they’re working overseas. Goods are designed in one country, refined in another, manufactured in a third, shipped across continents and sold across the world. And all the time, the poor old tax system is puffing and panting as it runs after the money.

Simplify the system and embrace the Laffer Curve. Give business an incentive to invest and to make profits and it will generate the revenues the country needs. Treat it as a cash cow to provide for everything and everybody and it will rapidly move to a more hospitable tax regime.

It may also move to somewhere you can get a phone signal. I know this is looking dangerously to the future, but could we please have a full and speedy roll out of 5G? Yes, yes, I know your Chancellor has said that he is committed to it but so far that commitment doesn’t extend to a starting date. Right now the UK is ranked 54th in the world for 4G LTE connections and bluntly, it is not good enough. We are behind Morocco and Greece. Even 4G only works intermittently – unless you’re driving through parts of North Yorkshire, when ‘intermittent’ would be a remarkable improvement.

5G is expected to start rolling out worldwide in 2020: according to this article in Wired, South Korea has been preparing for it since 2008. That’s very nearly ten years. In the Spring Budget we committed the mighty sum of £16m for ‘further research.’ If we are going to leave the EU and become a ‘global hub’ then we are going to have to do a lot better than £16m.

Lastly, could we please make long term investments in a coherent, joined-up, 21st Century transport system? Other countries in Europe have taken the long term view, invested in their rail networks and now have modern, connected, effective services. Meanwhile there is a credible argument that the Conservatives lost their majority thanks to congestion on Southern Rail. £90bn on HS2? I can think of other priorities. HS2 will save minutes: business owners waste hours sitting in contraflows on our ‘smart motorways.’ No matter, I’ll just save up and buy one of these little beauties

That’s it. Except that if you’re still struggling to cobble a government together give me a ring. I know plenty of owners of SME’s who are first-rate negotiators. 10 members of the DUP to sort out? They’d do it before breakfast…

Best regards

Ed

My First 100 Days


It’s not often I compare myself to Donald Trump – well, not this side of the psychiatrist’s couch – but he’s famously completed 100 days in the White House and I’ve now completed 100 days in my new role as the MD of The Alternative Board in the UK.

I haven’t pulled out of any climate change agreements, sacked anyone or threatened wholesale renegotiation of every trade deal that’s ever been made. Instead I’ve worked with some brilliant people and generally had the privilege of running an organisation that changes people’s lives. So thank you once again to everyone who helped to make it happen, and to everyone who keeps making it happen on a daily basis.

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Quite obviously, I’ve had to get used to a few changes. I’m not driving round North Yorkshire anywhere near as much: I see a lot less of Costa Coffee at Clifton Moor…

I’m now in the office at Harrogate for 2½ days a week, working as part of a team of six. I didn’t realise I’d missed the office ‘buzz’ so much. That’s a bonus that I hadn’t anticipated.

…And I’ve discovered another, equally unexpected but far more important bonus. Every month Mags and I are in London, Birmingham, Newcastle and Manchester.

We always go on the train – and it’s a brilliant place to work. (But why, he asked innocently, could I get a mobile signal under Hong Kong harbour ten years ago but still can’t get one on the train between Huddersfield and Stalybridge? I’ll vote for whoever has that in their manifesto…)

As I was saying, a brilliant place to work – and to pick up on a point from last week, it’s a great place to work on the business. By definition you can’t work in the business, so Mags and I have time to discuss strategy, make plans and generally do all the things phones, meetings and the need to pop out for a sandwich stop you doing.

I’ve always liked working on the train. I’ve written before that if you want to think differently you need to be in a different physical location and I get some of my best work done on trains and in cafés, ploughing through as much paperwork between York and King’s Cross as I would in a full day at my desk.

Why is that?

Why do so many of us enjoy working in locations like that, and why are we so productive? And yes, I have been known to play a ‘café soundtrack’ on YouTube when I’m working in the office.

Early studies suggested that it was what’s known as ‘the audience effect:’ that we work better when we have someone to work with and/or compete with – witness the peloton in the Tour de France.

But according to an article in New Scientist, what applies to Team Sky doesn’t – for once – apply to us. The answer, apparently, is that hard work is contagious.

A study was done which involved sitting people doing different tasks next to each other: neither could see what the other was working on. When A’s task was made more difficult B started to work harder as well, as he or she responded to subtle cues like body posture and breathing.

I’ve often talked to TAB members who say their number one criteria for hiring another member of their team is work ethic: now it looks like there’s real evidence to back up that good old gut feeling.

…Except, of course, the evidence also suggests that I shouldn’t be on the train or in the coffee shop. I should be where people are working really hard. So I may hold future meetings in the library at Leeds University – and if it’s still the same as in my undergraduate days, on the same floor as the law students…

365 Wasted Days


Hesitantly, the young graduate trainee approached the seen-it-all sales manager to proffer his excuse…

“I just don’t think it was the right time for them. Maybe next month…”

The sales manager sighed. The lad showed promise, but he needed to learn a basic truth. “You know what, Ed?” he said. “There’s never a right time.”

“How do you mean?”

“Well quite clearly no-one’s ever going to buy anything in January. Just recovering from Christmas and hiding from their credit card bills. February it’s too damn cold. March and April it’s Easter and they’re all doing DIY or out in the garden. May they’re thinking about summer holidays. June there’s always the World Cup or the Olympics. July and August they’ve gone on holiday; September they’re recovering from the holiday. October it gets dark. Everyone’s always depressed in November and December’s written off because of Christmas.”

“So…”

“So there’s never a right time. Go back and see them, Ed. Explain that there is a right time and the right time is now.”

I’ve never forgotten that conversation and over the last 20 years I’ve quoted it word for word to several potential customers. I was reminded of it last week when the news broke that Theresa May would be demanding our attendance at the polling stations on June 8th.

Yes, the election – and Brexit – is going to happen. Clearly Theresa May wants her own mandate and equally clearly she doesn’t want to be bound by David Cameron’s election pledges.

Sir Martin Sorrell was being interviewed on TV and failing to hide his irritation. The election, he said, was “another excuse” for people in business to stop making decisions. The run-up to the election would see an inevitable slowdown in the economy: “another 50 wasted days” as Sorrell termed it.

Well, by the time you read this there’ll only be 41 more days to waste – but he may have underestimated the problem. My old sales manager would have understand it perfectly…

‘You’re right, Ed. First and foremost no-one can possibly take a decision before Macron is confirmed as the youngest leader of France since Napoleon. Then there’s our election. But by then we’re into the summer holidays. And as soon we’re back from summer there’s the German election to worry about: if Angela Merkel is defeated it’ll be chaos. Then there’s Philip Hammond’s first Autumn Budget (assuming he’s still Chancellor). I mean seriously, given the hints there have been about tax rises it’s safer to wait and see. Then it’s Christmas and staggering back to work in January. And by February/March we’ll have had six months of serious Brexit negotiations with the new German government. It makes sense to wait and see how those are playing out. And then it’s Easter again on April 1st 2018. You’ve nailed it: no-one can possibly make any decisions for at least a year…’

50 wasted days? More like 365.

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As we all know, there are always reasons not to take decisions. They might be macro – political, economic – or micro, such as staff problems and cash flow, but they’ll always be there.

But making decisions is our job. It’s what we signed up for when we sat in the motorway services, pushed our breakfast round the plate and decided there had to be a better way. Business is about making decisions – and as that as that well-known pioneer of the waste management industry, Anthony Soprano Snr., put it, “A wrong decision is better than indecision.”

He’s right: you can correct a wrong decision. Indecision eats away at you and your business until it does far more damage than a wrong decision.

But making decisions isn’t easy. It’s not meant to be easy. Tony Soprano again: “Every decision you make affects every facet of every other thing. It’s too much to deal with almost. And in the end you’re completely alone with it all.”

Unless, of course, you’re a member of the Alternative Board, and have seven other people to offer their input and their experience and – nine times out of ten – help you make the right decision.

But having last week recommended that the boss of United Airlines joins TAB, perhaps I’ll just stop short of suggesting a new member for TAB New Jersey…

The Budget: the Shape of Things to Come?


But there’s also a problem: namely, where is the value you’re taxing actually created? If Apple builds an iPhone in Taiwan, using raw materials from Australia and advanced components from Brazil, to a design thought up in California (but partially in Oregon), then markets it in the UK, via a company based in Ireland, where is the value created?

(This is without even getting into the licensing and buying-back of intellectual property rights, or any number of other accounting dodges.)

That very pertinent question is from an article in Cap X that I read last week. More of it later: first, last week’s Budget.

Philip Hammond bounced confidently to his feet and delivered his first (and last – it’s moving to the autumn) Spring Budget speech. There was good news on the economy: growth forecasts were up, borrowing was down and the Government’s “plan was working.” He delivered some far better jokes than George Osborne and sat down to a loud chorus of approval from the Conservative backbenches. He may even have glanced sideways at Theresa May and concluded that in the event of the mythical fall-under-the-bus, Mrs Hammond would be odds-on to be measuring up for new curtains in 10 Downing Street.

He could look forward to a nightcap, a good night’s sleep and plenty of plaudits in the following day’s papers…

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Sadly not. Thursday morning’s newspapers were united in their condemnation.

‘Hammond breaks election pledges,’ said the Telegraph. ‘Hammond raids the self-employed to fund care,’ declared the i newspaper. The tabloids were significantly more direct: ‘Spite van man’ screamed the Sun. ‘Rob the Builder’ was the headline splashed across the Star.

Hammond’s crime? He had allocated money to fund social care – £2bn over the next three years – and one of the ways he planned to fund it was by raising the Class 4 National Insurance contributions paid by the 15% of the UK workforce who are self-employed.

By Friday morning more than 100 Conservative MPs were supposedly voicing their discontent, with Anne-Marie Trevelyan, the MP for Berwick-upon-Tweed, saying “it goes against every principle of Conservative understanding of business.” The Chancellor was roundly criticised for riding roughshod over David Cameron’s ‘5 year tax lock’ and the Conservative manifesto.

There’s no doubt that, politically, Hammond made a mistake. Wittingly or unwittingly he’s given the impression that the Government doesn’t like or trust the self-employed and those running small businesses. As the Spectator said, it seems ‘that he suspects them of being tax-dodgers, of using the NHS without paying for it.’

He may even have given an unintended boost to the black economy. If the legendary ‘white van man’ suspects he’s being taxed unfairly he might decide to do even more work for cash – and the Chancellor might end up with lower tax receipts, and very expensive egg on his face.

But let me say a word in defence of the Chancellor – and here we return to the quote from the Cap X article. In his speech Philip Hammond talked about “the challenges in globalisation, shifts in demographics and the emergence of new technologies.”

He’s right – the economic landscape is changing rapidly. More and more people are becoming self-employed or trading through limited companies: people are changing jobs far more frequently, and all too often they need to have two jobs, often combining employment and self-employment. As Cap X put it, a 20th Century tax system is failing to cope with a 21st Century labour market.

And it’s not just the labour market: look at retailing, where online, out-of-town, low tax distribution centres are wiping out the bricks-and-mortar, high street, highly taxed shops.

Right now the tax system is divorced from the way business operates. There will have to be changes over the coming years and it is simply another illustration of the point I’ve made continuously in this blog: business is changing, and the pace of change is accelerating.

In a future post I’m going to look at the growing trend towards ‘agile’ leadership and management. What the Budget – and its fall out – illustrates is that in the future we will all need to be increasingly agile as we face ever-faster change.

But for next week we might just be due something a little lighter: why Ikea bookcases are a vital economic indicator…

…And there, gentle reader, are the perils of including current events in your blog. I wrote this post on Tuesday evening and, as you’ll all know by now, The Chancellor performed a humiliating U-turn on Wednesday and the NIC increases have now been scrapped. (You can forget measuring up for curtains, Mrs H…) I was initially tempted to re-write this post but, on reflection, I think the U-turn illustrates my point even more forcibly: today’s tax system simply has to change to cope with today’s economy. Maybe Wednesday’s climb-down will bring those changes closer – but let’s hope that whichever Chancellor finally has the courage to undertake a wide-ranging review pays more attention to detail than the Rt. Hon member for Runnymede and Weybridge did last week…

What can we Learn from Loyalty Cards?


Open your wallet.

Go ahead. Open your wallet. Or your purse. I’m conducting an experiment.

I am prepared to wager that in there – along with the photograph of your children and the credit cards – are two or three loyalty cards. I don’t mean your Tesco Clubcard – I mean the ones that are stamped. The loyalty cards from coffee shops, bakeries and your enterprising local burger restaurant.

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…And I’m prepared to make a second wager: that all those loyalty cards – that need eight or ten stamps before you get your free bagel or burger – have just one or two stamps on them. That you thought, ‘hey, that’s a good idea, I’ll do that’ and then quickly lost interest.

You’re not alone: that’s archetypal human behaviour – but according to an article in the Harvard Business Review it’s behaviour that may offer business owners and managers an insight into how to improve results from their teams.

Interestingly, it flies in the face of most current business thinking, especially when it comes to setting and achieving goals.

The modern trend is towards flexible working. As I wrote recently, the evidence suggests that teams allowed to work flexibly are both happier and more productive. And unsurprisingly, the vast majority of people have a preference for flexibility when it comes to goals. As the HBR puts it, ‘Adopting a somewhat elastic approach to setting goals allows us some future wiggle room.’

But it you want to achieve a major goal, then the article suggests you’re much more likely to do so with a rigid and restrictive structure for the necessary steps.

And this is where loyalty cards – and yoghurt – come in.

Professor Szu-chi Huang and her colleagues in the marketing department at Stanford University conducted research on the effectiveness of loyalty cards at a local yoghurt shop. It was the standard offer: a free yoghurt after six purchases.

There were two separate offers – the ‘flexible’ one, where customers were free to buy any yoghurts they liked, and a far more restrictive one, where customers had to purchase specific yoghurts in a specific order.

Unsurprisingly, there was far more take-up of the ‘flexible’ offer. Rather more surprisingly, those customers opting for the restrictive offer were nearly twice as likely to complete six purchases and get the free yoghurt. (And before you think it’s just one yoghurt shop near Stanford University, YesMyWine, the largest imported wine platform in the world, has reported similar results with special offers.)

The academics at Stanford suggested that the result was because customers responded to not having to make a decision: that in our ‘information-overload, decision-fatigued’ society people will appreciate something that gives them the chance to make fewer decisions. They go on from that to draw a conclusion for business: that once a goal has been decided on, managers should be rigid in the steps needed to accomplish it – in effect, take any decisions away from the team.

I’m not so sure. First of all I’d argue that people who sign up for a ‘restrictive’ offer are more committed in the first place and therefore more likely to ‘see it through.’ Secondly, my experience of managing large teams suggests that the real answer is “it depends.”

Specifically, it depends on the experience and capabilities of your senior team. If you’re looking to achieve significant change and/or achieve a major goal then, yes, there needs to be a detailed, step-by-step approach with a list of actions and a series of deadlines.

But if you have a ‘details guy’ in the team, my advice is delegate it to the details guy: it’s almost always better to ‘trust and delegate.’ But if you don’t have a details guy, then the actions and deadlines become your job: what’s absolutely certain is that they cannot be left to chance.

So there I am, disagreeing with learned academics at the world’s third-ranked university. I’d be fascinated to hear your views on this: and yes, let’s discuss it over a coffee. I can’t miss a chance to double my number of stamps…

The Road to 2017


Last week Keaton Jennings made his debut for England, playing against India in Mumbai.

He was dropped off the 21st ball of the day. At the time he’d made 0. Had the catch been taken, he couldn’t have made a worse start to his test career. But it wasn’t – and by the end of the day Jennings was the hero, scoring 112 – only the 19th England player to make a hundred on debut.

Listening to a recap of the first day’s play one of the summarisers made a really important point: even if Jennings had made 0, even if he’d failed in his first few innings, he still looked right. ‘We get too focused on outcomes in very small samples,’ he said.

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That’s something to keep in mind as you head into 2017. You’ve now made – or you’re close to finalising – your plans for the year ahead. You’re convinced they’re the right plans. You’ve run them past your colleagues and in January you’ll do the same with your fellow Board members. Come Tuesday January 3rd they’re the plans that will guide you through the year.

So don’t lose heart if you get a duck in January. If the plans don’t work immediately, don’t rip them up. Refine, tweak, adjust, get outside the line of off stump: but remember that the first month of the year – like the first steps in building a business or the first few innings in a test career – is a ‘very small sample.’

Anyway, the end of 2016 is approaching. You may now be tempted to breathe a sigh of relief. You may carelessly think, ‘Phew, thank the Lord that’s over. Leicester City, Brexit, Trump… Surely we can’t have another year that’s so unpredictable?’

‘Yes we can,’ is the answer to that question: I suspect there may be quite a few twists, turns and bumps along the road in 2017. Domestically Brexit will be triggered: how it will end, no-one (least of all the Government) knows. And I wouldn’t be entirely surprised to see Theresa May call a General Election next year, Fixed Term Parliament Act or not…

But it’s my colleagues in TAB Europe who’ll see their countries become the focus of attention next year. March brings a General Election in Holland with the far-right Freedom Party currently on course to become the largest single party. The French Presidential election is in April/May – the signs are that it will be fought out between Marine le Pen of the Front National and the likely winner, the right’s self-confessed admirer of Margaret Thatcher, Francois Fillon.

And then in September there are elections in Germany: Angela Merkel will seek a fourth term, but she will surely come under plenty of pressure from the right-wing Alternative fur Deutschland (AfD).

May you live in interesting times’ as the supposedly-Chinese curse has it. I suspect we’ll look back on 2017 and decide that ‘interesting’ was an understatement. So next year will not be a year to take your eye off the ball. No, don’t panic if your plans are not on track by January 31st. Even if the world changes so much next year that you need to completely re-write your original plans, remember the words of Dwight D Eisenhower, “In preparing for battle, I have always found that plans are useless, but planning is indispensable.”

What you will need to do next year is keep a close watch on your metrics: the two or three key statistics, ratios or measurements that absolutely determine the health of your business – the ‘pulse’ that I’ve talked about in previous posts.

Through December I’ve had the remarkably enjoyable job of listening to TAB members reflect on the past year: I’m delighted to say that far more has gone right than has gone wrong. Has there been a common thread running through the success stories – apart from measuring those key metrics?

Yes, I think there has. ‘Resilience’ and ‘consistency’ are the two words that come to mind: TAB members have consistently done the right thing and stayed true to their beliefs and their vision. And as a result, they’re reaping the rewards.

So 2017 will be challenging: I suspect the old PEST analysis will be wheeled out several times. But like all years, it will also be full of opportunities: and however challenging, the plans you’ve made, the metrics you measure and the support of your TAB colleagues will ensure that you couldn’t be in better shape to greet the coming year…