The Sultan of Bling - why Dubai matters to you

With Governments committing billions and trillions (whatever they are) to bailing out toxic banks, many people were of a notion that the worst was over.


In the language of the economists the world is now emerging from a U-shaped recession. Green shoots, world stock markets roaring ahead, everybody feeling better. Spend our way out of recession.


Well, hold up. Over the weekend proof has emerged that all is not rosy in Dubai, the small city-state which is the greatest exemplar of "mine is bigger than yours".


Biggest building in the world, biggest indoor ski-slope, biggest swimming pool, biggest hotel (7 star no less), shopping mall, theme park, airport, and biggest sweet shop for goodness sake.
Now it appears to be on the edge of producing, relatively speaking, the biggest financial crash in the world because of its fragile sovereign debt position.

The ripple effect of Dubai on confidence will affect international lending decisions and interest rates out of all proportion to the actual amounts of money involved.


Hey, Dubai is a long way away with its possible debt default being fairly inconsequential in the context of trillions of worldwide debt. A little sandy dot with a pile of essentially useless real estate bling. Does its hubristic economic collapse matter to me and my business in Ireland?


I think it does and I would advise you to take note and take early action. Now that everybody is getting a bit complacent, Dubai reminds us that recovery is still shaky.


When the downturn started to bite and borrowing was tight, remember how you made cuts in overhead, reduced staff, slashed expenses and focussed on cash flow?
Well, go into your business this week, take another hard look and follow it up with some hard action as before.


Oh, and at a personal level, delay your car change, take a much less expensive holiday, cut all unnecessary expense. Christmas is coming and here is Mr Scrooge already.


Do this and do it now! I have a feeling that in 6 months time you will be thanking me.

Ration and cap high salaries? - Why stop there?

The Copenhagen summit on climate change next month will see world leaders pay lip service to the crisis but agree on precious little that will make any difference to the global uses of energy.

They are unlikely to address what, in my opinion, is the neglected key issue. Waste! Waste of energy - for which every one of us is responsible.
And the same goes for that other global scarce resource, food, though our individual culpability here is even more glaring and inherently unfair. Waste of food!


We are all in such a swiz about capping the obscenely high salaries of those who "got us into this financial mess", (we all did our own bit to create the mess ourselves by the way) that we ignore our disgustingly wasteful system, still continuing, where we dump 1.6 million tonnes of perfectly good food into landfill every year.

And this takes no account of the much greater annual waste - equally disgusting - where we stuff millions of tonnes of food into "peoplefill" through gross unnecessary overeating. The results are plain to see waddling up and down every street in the country.


Appeals for voluntary restraint just have not worked nor will they work. The only long-term answer, which has a proven effectiveness in crisis situations, is food and fuel rationing.


I remember when I was a wee boy seeing my mother get the ration books off the mantlepiece and set off to buy the groceries.
There was no waste in our house in those days and yet we survived by eating just enough, throwing nothing away and growing our own food where possible. There was no alternative.


In that post-war time of severe shortages, this ration system was the only way the country could live within its limited resources and ensure that the distribution of food and fuel to individuals was reasonably fair.


We are arguably in as great a crisis today, so it should not be beyond the capability of our über-bureaucratic nanny-state to implement appropriate effective rationing.
Such radical action would save the vast amount of value in food and energy that is currently being dumped through profligate unrestrained waste and in the process is despoiling our planet and destroying our health.


I haven't been invited to Copenhagen, so if you agree that rationing would reduce waste please pass this blog on and maybe someone influential (like you) will read it.
If you don't agree, then post a comment. What is your solution to waste?

The Marketing Myth

As most of my business life has been spent in direct selling functions I have studied sales and marketing deeply.


This downturn has prompted me to look again at some of my long-held assumptions and I have come to the conclusion that a fundamental concept drilled into me years ago by academics when I did my MBA is a complete misrepresentation of reality.


Jerome McCarthy and Philip Kotler's assertion that "Selling is part of the Marketing mix" - the 4 P's and all that junk - is, as we would say in the wilds of County Tyrone, totally arse-about-face.


This false notion, spawned for intellectual neatness, has misled corporate executives for years and resulted in a diminution in status of selling, diluted sales efforts, weakening of direct sales support investment and an associated inflation of costs in indirect marketing activity.


Now, don't get me wrong. I am not dismissing marketing as an essential element in sales success. All I am saying - and this is vital - is that marketing is part of the selling mix; not the other way round.


As John King, one of Ireland's greatest businessmen, puts it "at the end of the day, the only thing that really matters in business is sales"
Successful selling has four key components, in each of which to a greater or lesser degree, marketing plays an important though subservient role.


1. Preparation - Leading to a comprehensive targeted plan.
2. Investigation - Looking for opportunity and diagnosing customer "pain"
3. Presentation - Communicating the solution
4. Negotiation - Closing the sale


Downturns are opportunities for a rethink on how we go about things. So, here are a few suggestions to help you "put marketing in its place"


1. Scrap your marketing function and make all marketing decisions within the sales function.
2. Abolish all stand-alone marketing titles
3. Elevate "sales and selling" in corporate importance and priority.
4. Make your sales function "own" all marketing activity
5. Treat your sales people as heroes.
6. Engage everyone in the company in support of selling.


Oh, and don't believe everything the academics tell you!

Cheats win at business - or do they?

Like most sports fans, I was appalled at Thierry Henry's deliberate cheating to put Ireland out of the World Cup. So today's subject is soccer - with a business angle.

In this blog I am borrowing heavily from some great thoughts given to me by Colin Reid of Consilium Technologies on the analagous comparison of players on a football team to the people in a business.

The strikers, Kevin Doyle and Robbie Keane (smashin' goal Robbie!), are your sales people, scoring goals / getting orders.

The defence, Kevin Kilbane, John O'Shea, Sean St Ledger, Richard Dunne (titanic performance!) and the great Shay Given, are your customer services/support team, not conceding goals / not letting the customers down.

The midfield, Glenn Whelan, Keith Andrews, Liam Lawrence and Damien Duff (brilliant game!) are your production/product people, winning the ball to feed your strikers / giving them good products to win orders, protecting the defence / delivering quality product that doesn't cause customer service problems.

Then there is Trappatoni's superb individual coaching (that is the job for the MD) and each player/person having to be the best they can be individually; as good a striker as possible but being a committed team player as well, i.e. when your team don't have the ball the strikers are aggressively tackling back.

Everybody comes back to help defend corners and defenders come up when you have a corner. So the sales people help out with difficult customer issues and your customer services people help out with sales.

The development of a football team is a good guide as to how a business develops. Starting out in the lower leagues is like starting a business in Ireland; then you get promoted to the premiership which in business terms is making it in the UK market; then competing in the Champions League is like being successful internationally.

The analogy plays out further in that the players who got the team its early success are not necessarily the people who will get them to the Premiership and the people who achieved promotion to the Premiership won't necessarily keep the team there, never mind win the trophy.

That rule applies to the Manager as well as the players, but football is demonstrably more efficient than business at making the necessary personnel changes in line with growth.

What about the cheating? Thierry Henry will be considerably richer and French football will make millions from his blatant openly-admitted action.

But despite my indignation, I do feel rather sorry for the sublimely talented Thierry in the "long game" of life and how he will be remembered.

Turning the analogy round, what first comes to mind when you think of the following business people who were superstar successes in their time?

Bernie Madoff, Robert Maxwell, John DeLorean.

Wake-up call for Northern Ireland - Ireland's December budget

While the South of Ireland wakens to a nightmare moment of truth, the North is sleeping like a baby - a very fat baby.


This week's media portrays the Republic of Ireland as an economic basket-case, with an upcoming budget in December which will attempt cuts of €4 billion, not as a stimulus for recovery or to reduce state borrowing but only to stabilise the current account.



Frankly, the Government has no room for manouvre, yet special interest groups from the unions and the public sector are marching in vitriolic opposition to cuts, creating the real spectre of civil unrest to add to the economic woes of our nearest neighbour.


In real terms, the North is in exactly the same boat as the South right now but the politicians at Stormont just tinker at the edges of solving the potential economic disaster.


However bad the short-term prospects in the Republic, at least the debate is making headlines and external pressures are forcing Government actions. These may hopefully result in their regaining international competitiveness through the longer-term expansion of a resurgent private sector.



Despite significantly weaker underlying economic strength, together with endemic market failure, the North sleeps on under the soporific influence of Westminster's £7 billion drug infusion. Parish-pump politicians in Stormont blissfully ignore the potential danger of this supply lifeline being significantly reduced in the future.



The economic structural and systemic failure of NI should be the number one issue for businesses, unions, politicians and society right now - for the paradoxical reason that technically, with sterling's recent effective devaluation, the North's private sector is currently in a strong position to increase overall exports.


But these conditions will not produce any material gain in total for NI, despite many economists' predictions that on the back of exchange rate competitiveness, Britain's exports will grow strongly in 2010 and 2011.



Yes, individual companies will prosper over time, but the overall economy will not benefit significantly in a macro sense, simply because the private sector (muscle) is far too small and weak within the overweight uncompetitive NI body.


To put it bluntly, the North's economy is morbidly obese, fat, unfit and carrying too much weight in the wrong places.


Reducing the relative size of the public sector (fat) in NI has been talked about for years but with little effective action. The discussion always ends up in agreement that the way to do this is to increase the size of the private sector. Yes and NO, NO, NO!



Let's get real and pursue the analogy of the economy and the body. If my body mass index is sky-high and I am morbidly fat my doctor will not tell me to first increase my muscle and everything will be OK. My doctor will tell me to lose fat first - a lot of fat - and then increase my muscle ratio by disciplined food intake and regular exercise.


NI needs to radically and ruthlessly reduce its public sector (fat), thus creating thousands of necessity entrepreneurs to start private businesses and work in existing businesses. This will be extremely painful for a time for the economy and individuals, just like crash dieting, but it will ultimately build muscle in a growing, private sector-led society.


At the moment, thousands of clever highly talented people who could be strengthening the private sector muscle are trapped in, or sheltering in, or hiding in, the fat public sector. Tip them out.


For years they have been hoovered away from productive exporting value-adding contribution by inducements of salaries, pensions, conditions and job security that private sector businesses competing in the real world cannot match.


Come on NornIron! Politicians, people, all of us. Stop kidding ourselves. Our economy doesn't have "heavy bones", it is not the fault of our glands, it is not genetic. We are too fat!


The South is wakening up and beginning to face its problems. The sooner the North wakes up too, the better. It is all about the survival of the fittest - not the fattest!

We all lost the run of ourselves! So, what now?

Elizabeth Kubler-Ross’s classic grief cycle model of response stages to bereavement was created to help people cope with the most terminal of traumatic events.


Elizabeth’s 5 non-linear stages are; Denial, Anger, Bargaining, Depression and Acceptance. In essence, the sooner one can come to the point of Acceptance, the better.


By extended application, this simple yet powerful model may also enable many of us to understand and move on from lesser though extremely serious events or conditions in our business and personal lives. How about the fall-out from the international financial turmoil and closer to home, the demise of the Celtic tiger?


Almost without exception in Ireland, North and South, we suffered from and were severely damaged by a syndrome that I call “WALTROO” (We all lost the run of ourselves).


WALTROO-induced traumatic events are being experienced by people all over Ireland. Traumatic events such as losing jobs, houses, status, peace of mind, or stacks of money are tough to face, but it is essential to accept and then work with the new realities.


Elizabeth’s model can help in coping and moving on.


Denial – Get out of it!
• We are not among the richest nations of the world any more.
• In reality, we never were. (but we had a smashin’ time while it lasted!)
• If you can see green shoots anyway soon, you are colourblind or deluded.
• Lower your short/medium term expectations with regard to personal wealth and expenditure.
• Take personal responsibility for the money you spent (sometimes well, in fairness), borrowed (OK far too much), wasted (don't go there), misspent (apartments in Bulgaria? Crikey!)


Anger – Get over it!
• Bankers, politicians, Government, builders, developers; Grrrr! Rant! Grrrr!
• Blaming others won’t help you. You were delighted the banks lent you the money! You loved the ride, big-shot!
• You bought the houses, second homes, new kitchens, Armani suits, Jimmy Choos, long-haul holidays, tasty meals and you ran up the debts; so if you have a strong uncontrollable urge to blame somebody, blame yourself.
• Take personal responsibility.


Bargaining – Forget it!
• You can't stay in the old paradigm - the Tiger economy is gone.
• You can't be a big-shot any more - or even a middle-shot.
• Accept the truth that you are currently a wee-shot, and build from there.
• Attempting to bargain will only delay your emergence from the deep darkness of depression.
• Take personal responsibility


Depression - Won't fix anything!
• This is a natural, and probably inevitable, stage
• The toughest one to deal with
• Essential to get out of it, quick
• Be courageous, take personal responsibility


Acceptance - This is the only positive stage!
• Acceptance of personal responsibility is intensely liberating and uplifting
• Get here as quickly as you can
• Now, and only now, can you make real progress
• This is when you make the emotional adjustment to the new realities
• There is life after the Tiger!


The platitudes that go with times of trauma such as "time brings healing" or "look for a silver lining", while well-meaning are often hard to take, but they contain more than a grain of truth.


Elizabeth's model can help. How do I know? - I got smacked in the meltdown too!


By the way, if you see a grumpy (but otherwise generally happy) geezer with WALTROO tattooed on his forehead - that'll be me!

Export or die – a message for Irish businesses

The 3 amigos and predictors of catastrophe! - Nostradamus and Old Moore’s Almanac meet Grumpy Old Will (GOW)


I have checked, and neither Nostradamus nor Old Moore has predicted the full impact of the current economic mayhem. Nor have they identified the actions that a business should take in response. GOW didn’t predict it either so the 3 amigos are in full agreement there, but here is a view on what most Irish SME companies should do now.

It has always been important for business leaders to look carefully at the opportunities to sell outside their home markets and because the readers of this blog are sophisticated business people, I am not going to waste time justifying the compelling reasons in support of this view.

However, up to now in broad terms, the strategic imperative for exporting was founded on the requirement for growth. The world has changed and within the 3 year planning horizons of most Irish companies, North and South, today’s strategic imperative is survival. All of a sudden, rather than being a “nice to have” dimension, exporting is the key to survival.

The chronic state of finances in Ireland, where there is a significant possibility of civil unrest on top of all the other difficulties, means that any company with more that 50% of current sales in the home market will have to seriously revise its strategy.

This is an all-island comment because the descriptor of sales from the North to the Republic as “exports” is a complete cod. Plus, the North is going to be walloped by a huge reduction in the £7 billion subsidy as Britain deals with its own borrowing problems.

So the strategic solution lies in overseas markets that have a genuine chance of emerging from recession in the near term; meaning the US, Europe and Asia. Most SMEs in Ireland, particularly in the North, have only a superficial knowledge of trading in these markets, but they must learn quickly or GOW predicts doom!

What to do?

1. Set up a day for your top team to start to seriously plan strategy in light of the above
2. Pick a strong facilitator who will vigorously challenge your assumptions
3. Ignore all the economists’ talk about “green shoots” – they don’t apply to you!
4. Act on this with extreme urgency

But I am an optimist and hate joining Nosty and Oul’ Moore in predicting doom – so sort out your strategy and prove the 3 amigos wrong!

Tired of whizzo business coaches - is it only me?

Can your “business coach ” or “life coach” ride a bike?

All of a sudden, life and business coaching has become the latest fad. Good counsel is invaluable, but it appears to me that much of the current coach offering is shallow in the extreme. This shallowness is often due to the absence of the most important criterion for the selection of an advisor – experience.

If there is one attribute that demonstrates the value of experience in the ‘University of Life’ over the acknowledged value of a high- class, formal business education, it is the ability to make good decisions in the context of ambiguity. And ambiguity is everywhere for those of us who run businesses.

Henry Mintzberg’s assertion that “university MBA classrooms produce hubris rather than leadership excellence” goes somewhat further than I would want, but there is more than a grain of truth in what he says.

Sure, in a classroom, students can dissect all the theory of management or leadership and write theses on communication, motivation and negotiation, which gain top marks and, in due course perhaps, a job in McKinsey, Bain or PwC.

Then, from their lofty position of knowledge and black or white solutions, these geniuses can counsel us in how to run a business – but they have never run or led anything themselves.

The wise leader certainly will take advantage of the intellectual horsepower that these clever people can deliver, but will also be very selective in the advice she/he takes.

If you are learning to ride a bicycle, you will only really trust a teacher who has actually ridden one and can demonstrate proficiency in the art. In contrast, a physics PhD can explain to you on paper the theory of balance and velocity; but will fail to teach you to deal with the counter-intuitive ambiguities that cause the inevitable crash.

Get a coach who can ride a bike!

There. I feel better already!

How to change someone's life

READ THIS SLOWLY

Kindness in life – Kindness in business

I love this true story broadcast by BBC Northern Ireland, where Sheila Quigley, a 70-year old lady from rural Ireland was reminiscing on a moment in time and an act of kindness that inspired her as a nine-year-old child:

“We always were sent to Confession on Saturday. I was on my own that day and I went into Confession and when I came out again the sky was very overcast and I just got down past the beautiful thatched house called Farthings, when the skies opened and the rain came dashin’ down. And you couldn’t shelter, so I began to run down the road.

And I was coming past Greenfields Estate and the door of the gate lodge was opened and a lady was standing at the door. And she said to me, “Come on in, wee McCallion”, she said, “you will be drooped to the skin, you can wait here until the rain goes over”. And she brought me in and she said to me, “Sit down there by the fire until you get yourself dried”.

She took my shoes and socks off and she dried my feet and she hung my socks up over the rack of the stove, and she took the bow off my hair and she dried my hair with a towel and then she combed it, and by the time she did that the ribbon was dry. She put it back in my hair and she tied it. Oh … she was just … the loveliest woman you could ever imagine!

She said to me, “Would you like a wee drop of milk?”, and I said, “Yes, please”. And then she gave me, not one, but two jam tarts. Now this was the war and one jam tart was a luxury but two jam tarts were riches beyond treasure.

But I sat, and I ... I was in heaven. And they were the most delicious jam tarts. A real treat to me. Whenever the rain went over, she put four jam tarts in a blue sugar bag and she gave them to me to take home to the rest.

And I went down the road and I thought I was in heaven. And I said to myself, “When I grow up, I am going to be kind and good and lovely like Mrs. King”.

SEQUEL

I used this story verbatim in a speech I made last year to Londonderry Chamber of Commerce. After the event, a young woman came up to me and said “ Mr McKee, Sheila Quigley is my aunt and I can tell you that she is the kindest, best and lovliest person anyone could ever meet”

What a tribute to Mrs King! What a lesson for how we can help the people we work with in our businesses and live with in our families.

Encourage that MD!!

Directing in a Downturn

Now that we are struggling through recession, boards throughout Ireland are wrestling with fall-out issues from the tightening credit environment.

Last week, after a particularly fraught meeting at a major company where I am a non-executive director, I was having a private lunch with the Chairman in McDonalds – things are that bad! – and he made a comment which made me chew profoundly on my Big Mac. “You know Will, in the go-go Tiger days our fiduciary duties to the company meant we had to put a high priority on challenging the management, setting boundaries, and ensuring good corporate governance. Now that the party is over, in the company interest, we must focus on helping the CEO to cope with loneliness and fear.”

I think he has a point. Being part of a growth economy is exciting, rewarding and often good plain fun; we know all about that in Ireland and it is the same at the micro level for the executive team in a growing company, but none of these positive motivational descriptors apply in a downturn such as that into which we have all been so suddenly plunged. Not only does the CEO have to cope with the breath-constricting shock of icy immersion. There is also the need to get back to the surface and then keep the team and the company afloat in the stormy waters of the future. This certainly takes a steely determination and frankly, the CEO needs all the help and support he can get.

In October I attended the centennial conference of the Harvard Business School where we heard Jeff Immelt, CEO of the mighty GE, relate some of the immense challenges faced by this colossal bellwether organisation. However for me, his most telling comment was – “Some nights after difficult long days, I go to bed feeling a total washed out failure because of our problems. Then in the morning I look in the mirror, say ‘Hello Handsome!’ and get right back to work.”

Your CEO doesn’t have as big a support team as Jeff has, but next time you are going into a difficult board meeting why not smile at him and say “Hello Handsome”?

No, on second thought, don’t do that – but you get my drift