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!