Bad Management is Bad for Business in Britain

BUSINESSES that invest in developing their management teams could emerge from the current economic downturn leaner and stronger according to Warrington based business and management consultancy, Diligencia.

Bruce Scott, CEO of Diligencia, has helped businesses to navigate their way to success through four previous recessions and is outspoken in his opinions about why many UK businesses fail. He said:- “Poor management is the reason that most businesses fail and in Britain we are traditionally very poor at management!’  Some of the main failings come from a tendency to promote on the basis of performance rather than ability, not providing training for directors and a complete lack of planning! We are well known for our ‘it will be alright on the night’ philosophy and in many cases that does come true, but it is no coincidence that foreign companies manage more and more of our large businesses. Britain is admired for its ability to dig itself out of the holes it puts itself in due to its lack of planning!

However, I’m very happy to say this way of working is starting to change, due to pressure brought about by the current economic climate, coupled with a realisation that improvements need to be made if we want to survive and then succeed and compete.

At Diligencia we are seeing a significant increase, from both new and existing clients, in businesses looking for ways to evaluate and develop their management teams with a view to riding out the storm and delivering even better results in the future.

Although, of necessity, spending is being cut across all areas of business, many companies are now realising that measures involving assessment and development of their management teams lead to a more committed workforce, which in turn creates a business capable of surviving in a market downturn.

Personally, I know that most Chairmen and Managing Directors, if they have the choice, would rather apply financial resource in this area than see redundancies and cuts. For senior management teams we need to bring about fundamental change in their mindset and attitude if more businesses are to survive the storm that has just started’’

Diligencia counts among its clients some of this country’s leading banking and financial institutions and nowhere is the desire to improve more evident.

Bruce continued:- “In the good times banks have sometimes been guilty of making, what could be considered, ill judged decisions about lending often based on gut feel and some positive figures without consideration of how well the company’s management team is equipped to deliver results and pay back the loan.

A big part of our work in this area is what we term pre-investment, for example, working on behalf of a bank to evaluate a management team before it makes the decision about lending and there has been a definite increase in the commissioning of this kind of management due diligence. This is a very positive sign as a greater focus on risk assessment means a more responsible approach to lending and therefore a more stable economy.

This recession has hit harder and faster than anybody expected and will probably last for longer. The businesses that survive will be the ones that have learned to become leaner, meaner and more flexible and as a result, stronger than ever.”

There are a number of key areas where Diligencia’s support can play a vital role:-

► Prior to investment providing an independent assessment of management teams before making decisions about offering financial support.

► In the case of mergers and acquisitions helping to ensure that the resultant organisation has a well developed plan and robust strategies to deliver it.

► Training funders to enable them to better assess the management teams of businesses looking for financial support and input.

► Mentoring senior management and CEOs in particular to deal with managing an organisation in a market downturn

All members of the Diligencia team have experience in company management during recession and economic difficulty. They are specialists in their field with over 150 years of combined business experience.

For more information on the range of services provided by Diligencia, call:- 01925 406707 or visit:- www.diligencia.co.uk.  

Employers continue to celebrate Christmas, despite credit crunch

FAR from being the victim of cutbacks, Christmas parties remain on the agenda for many organisations across the North West. However, a survey reveals that employers in the region now prefer to spend their money on social causes and more personal ‘thank yous’ to staff.

The Chartered Management Institute’s annual ‘Christmas Outlook’ survey reveals that 66 per cent of employers in the North West will host parties in 2008 – a figure that remains broadly consistent with last year (66 per cent). Yet in a sign that ‘budget bashes’ are dominating the festive season, just 9 per cent in the region strongly agree with the idea that employees’ partners should be included. Perhaps surprisingly, given the current need to focus on customer retention, only 1 per cent plan to invite clients.

Asked to explain why they intended to party in the face of current financial difficulties, 67% in the North West pointed to the need to boost staff morale. However, the data does show that many employers believe extravagant parties are unnecessary. 42%, for example, suggest that ‘hosting expensive parties can have negative impact on reputation’.  The survey of managers and business leaders also reveals that 1 in 4 employers in the region will make no financial contribution to ‘office parties’, this year. Some (31%) have agreed to pay up to £40 per person.

According to the findings, employers across the North West are also adopting a more socially aware attitude in the run-up to Christmas. 22% now demonstrate their concern for the environment by sending e-Cards. Amongst those still reliant on traditional Greetings Cards, 36% only buy cards supporting a specific charity. 48% also argue that ‘Christmas is an appropriate time to engage in CSR activity’.

It is clear from the Institute’s survey that employers in the region are refusing to allow the tighter economic circumstances stop them from showing appreciation to their colleagues. Asked how they say ‘thank you’, 54% of line managers admit to buying gifts for each member of their team, 37% actively encourage their teams to take time off (even though 43% intend to work themselves) and 5% give time off, without taking it out of their staff’s holiday entitlement.

Jo Causon, director, marketing and corporate affairs at the Chartered Management Institute, says:- “It should come as no surprise that employers are controlling Christmas budgets with tighter purse-strings this year. However, it is encouraging to see that responsible budget management is going hand-in-hand with an effort to thank staff for their efforts during the year and a determination to recognise hard work.”

Away from work, the survey also asked respondents to name the ‘must hear’ festive music. Among the favourites, this year, were Silent Night, Fairy Tale of New York (The Pogues) and Bing Crosby’s White Christmas.

Tough Toy Safety Standards on the Way

ARLENE McCarthy MEP, Labour Chair of the European Parliament's Internal Market and Consumer Protection Committee, will this week lead the final vote in the European Parliament on the tough new Europe-wide toy safety law.

The law, which Arlene led negotiations on with the Governments of Europe's Member States, will set tough new rules and standards to protect children from toxic and dangerous toys.  Following the conclusion of negotiations and sign-off by Member States last week and in advance of this week’s debate and vote in the European Parliament Arlene said:- “Our current toy safety law is 20 years old and does not deal with the new risks and threats. In particular it does not tackle the risks with imported toys given that 95% of UK toys and 80% of toys EU-wide are imported from China.

After last year's toy safety scares and recalls I demanded a review of the law to target toxic toy imports. We have achieved a radical review of toy safety law. 

We have banned chemicals in toys which could cause cancer, mutate cells or be toxic to reproduction; we have banned all use of toxic elements such as lead, mercury and chromium in toy production; and we have banned the use of most allergenic fragrances in toys.

Importers will now have the responsibility to ensure toys they bring into the EU are safe and they cannot simply leave this to overseas manufacturers.   We have also raised the safety standards in the legislation and we have introduced clearer, more effective warning labels for toys.  We want to give parents confidence in the toys on sale in the EU. Recalls like we saw last year get dangerous products off the shelf fast when dangers emerge but recalls must only ever be a last resort. 

Our new law is designed to ensure dangerous toys never make it on to the shop shelves."