No vision, so how can you lead?

It is a myth that a good manager can do his job with no vision.  I have recently seen two examples of under performing businesses where there is no vision for the senior managers to work towards and as a result the businesses are in danger of descending into chaos.

In the first which is owner managed the Managing Director cannot see further than the next year.  There are no plans in place for succession nor for the challenges that face their industry in the coming years.  Funding is taken out for the short term needs without considering what their longer term requirements are.

The second business is run by two executive directors who are both looking to retire within the next 4 years, the MD within 2! The shareholders (who are represented on the Board by 4 non-executive directors) have differing views on where the business should go and therefore have still to prepare their succession plan.

In the first business the MD doesn't acknowledge that there is a problem. He has an out dated approach to management and although he is fast approaching retirement age he doesn't see the need to plan to retire!  When he does realise that, it may be too late and the value of his business will have plummeted. 

In the second business both the executive directors and the non-executive directors see the potential problem and although it may be late they are doing something about it.  A visioning workshop is the start point. This will hopefully result in goal congruence and what was once a highly profitable business returning to that position.

In both cases though currently there is chaos within the business and it is causing uncertainty and under performance within their people.  By having clarity of vision and communicating it with their teams businesses begin to perform and to grow.  Indeed the succession that you have been looking for may be within those teams.

Do you Lead or Does no one Follow?

What are the attributes that make a leader stand out from the crowd of managers?  Many  managers think that they are leaders but in reality they aren't. 

John Kotter described a leader as being "associated with taking an organisation into the future".  This has nothing to do with management.  Another definition of Leadership is "Taking people to places that they haven't been before, for the right reasons".

However it is not about attributes.  You will find similar attributes from strong managers as you will find in great leaders.  It is about behaviour, about vision and about passion.  Great leaders have a vision and demonstrate a strong passion about the organisation.  You don't always find that with managers.   Even though they are passionate about their work managers will often fall in line with the vision rather than developing their own.

Leaders also understand the 5 forces that affect business as set out by Michael Porter:

• The Threat of New Entrants
• The Extent of the Bargaining Power of Suppliers
• The Extent of the Bargaining Power of Buyers
• The Threat of Substitutes
• The Rivalry with Competitors

and use this understanding to create an uncontested market space where the whole system of activities can be alligned in pursuit of differentiation and low cost.

Finally leaders leave you feeling energised, in awe of their passion and approach to their work.  Its uplifting to be in their company and they are the people that you look forward to spending time with.

So if you are a good manager do you have what it takes to become a leader?  Or will you be content to work for that positively infectious individual.

The Customer is no longer Right!

Is it just about getting the sale now?  Are we forgetting the customer and their experience? On Friday I had 2 bad experiences which suggest that businesses large and small may just be doing that.

During the early part of the morning I received a call from my firm's mobile phone supplier. It was in response to a reminder I had sent to them on Wednesday on the fact that since I hadn't heard from them since I had received an email a month ago to say that they couldn't fix the problem with emails not being redirected to my BlackBerry.

During the phone call the Director of the Company that had phoned was consistently denying that it was their responsibility, blaming other people for giving him incorrect information and consistently trying to wriggle out of trying to sort the problem out.

Later in the day I was on the 16:49 train from Birmingham New Street to Hereford.  I tweeted that people were standing (in some cases all of the way to Worcester Shrub Hill) and that the operator, London Midland should add more coaches as it was in my opinion unacceptable.  London Midland responded by saying that they had increased that particular service to 4 coaches and sorry if I found that uncomfortable.   No response to a suggestion that they should increase to 5 coaches.

As the customer I find both the attitude of the mobile phone salesman and the train operator poor and wrong. In the case of the former I will be looking for a new supplier and will contact the service provider to complain.  

For the train operators the position is that although I find the train a useful method of transport into major cities the reputation of this particular operator is already very low following a string of cancellations a few months ago. Attitude like theirs will not recover this but do they care.  They have the licence to operate the trains for a number of years and are more interested in profit than giving a good customer experience.

For me?  I will ensure that I am never on the 16:49 train in the future!

Taking the Plunge

To be successful you sometimes need to make some outrageous and brave decisions and I was reminded of one such decision recently.

On Friday evening two friends of mine, Steve and Andrea Borwell-Fox hosted a dinner a party to celebrate the 10th anniversary of them launching their business Borwell, a software engineering business. At the party were around 150 of the people that had helped them through the first 10 years of business, including their first customers, representatives from the Local Enterprise Partnership and the Chamber of Commerce, as well as their 12 employees and their partners.

The party also celebrated an award that they had recently received from the Ministry of Defence for a successful software project.  But the main purpose of the party was to say thank you to those who had helped them along the way.

I have known Steve and Andrea for about 5 years yet the invitation made me feel a little humble because Andrea had been a guest at a Leaders Group meeting I had hosted last November. The subject was Going for Growth in 2013 and in that meeting she had told me something that I hadn't been aware of previously.

We were discussing the key lessons for leadership for growth and had identified that they were:

1.Constant Innovation

2.Great customer relationships

3.Great culture and core values

4.Tenacity was critical

5.Data and Instinct equally valued

6.Growth enabled them to deliver a better product / service not just be bigger

Each of these points are applicable to both the Company and to Steve and Andrea personally; but when we came to tenacity, culture and values Andrea bought into the discussion the need to make those brave decisions.

Steve had been talking about forming his own business to develop software for the Defence Industry and for businesses generally and was ready to set up his own business. Nothing unusual there I hear you say.

No there isn't but it was what Andrea told me then that has cemented them into my mind as exceptional leaders capable of making those brave and difficult decisions.

They both wrote their resignation letters on the same day. Andrea resigning her post as a music teacher at a local secondary school having just completed her maternity leave following the birth of their first child to help support her husband and his dream. How difficult a decision was that? Leaving a career with the security associated with the teaching profession to support your husband as he is starting his first business.

Their values have allowed it to work but they have needed to be tenacious along the route as there are always some bumpy patches as you go and you must not allow those difficulties defer you from the path that you think is right.

I am honoured to count Steve and Andrea amongst my friends as not only do they show great work-life balance and the highest technical skill in their work, they truly are exceptional people.

 

Well, the draft clauses for the 2013 Finance Bill were published on Tuesday and they included the provisions on the General Anti Abuse (no longer called Avoidance) Rule.

The provisions are like the proverbial curate’s egg – good in parts. The confirmation that the rule is only there to counter abuse is, to a certain extent, reassuring and the fact that the rule will only apply from the date of the Royal Assent of the 2013 Finance Act (probably July) and not 1 April 2013, as originally proposed puts off the ‘evil day’. I use the word evil, not because I think it is wrong to counter abuse of the tax system but because I still see a lot of problems.

HM Revenue & Customs are doing all they can to convince people that they are going to be reasonable. I do not mean to be cynical – OK I do – but everyone on ‘the ground’ knows that HMRC cannot be accused of being reasonable, so why should this be any different. In order to attempt to allay fears, that they will act heavy handed, they have introduced the concept of an advisory panel that will comment on the HMRC stance. However, the panel is just that, advisory and it remains to be seen what notice is taken of the panel’s views.

The idea of the panel and the general tenure of the legislation provides greater clarity on how things should work and certainly sets out a system of working that is closer to the original report by Graham Aaronson QC than the HMRC interpretation in June. Now all we need is for HMRC to fall into line. To get technical for a minute it requires them to accept that something is established practice and to apply, what has become known, as the double reasonableness test, as its intended to be.

I wait with bated breath (yes I am sick) as to what will happen. I am not confident when the use of trading losses of an earlier year, to reduce a current year’s profit is reported in the press (presumably with HMRC encouragement) as tax avoidance.

Would you employ a grumpy cobbler?

I found this phrase on a post it note with the words "2 Rules - Look the part and put the money in the till" written on it.

It was from a presentation that I had heard earlier this year when I had only got some post it notes to write on and this one was loose in my bag.  But how right these rules are when you consider customer service and customer care.

The speaker was John Timpson, Chariman of Timpsons the shoe repair people, and these were the 2 key rules that he had for his workforce.  He went on to say that he employed people with personality and wouldn't employ a grumpy cobbler.  "Customers return to the cobblers with personality" he said.

In recent months I have had some interesting experiences from both ends of the spectrum but how do we do at Crowther Beard? Customer care has been high on my agenda for over 15 years now and one of the criteria I judge team performance on is how we look after our clients and care for our colleagues.   Let us look at the 2 rules and the statement at the top.

Look the part.  What do people expect from accountants?  The current trend of professionals towards open necked shirts does not mean that people don't look the part but I had to draw the line a couple of years ago when a newly appointed manager said that he couldn't afford a suit and didn't possess a jacket.  I still think that most clients expect their solicitor and accountant to wear a suit, collar and tie. 

Put the money in the till.  Too many accountants and lawyers are hopeless at telling clients in advance what their bill will be and getting agreement to it.  The pressure on them is to bill their time and not worry about the consequences.  The problem with this approach is that collecting a fee that is contested costs in administration time and in terms of goodwill.  Wouldn't it be much better to be up front about the cost of your service and agree a fee in advance?

Employ people with personality. There are two parts to this.  A grumpy team member will bring his or her colleagues down with them, you will never manage to lift them out of being grumpy.  However the effect on the client or customer is more telling.  There is "no can do" with these people, I always liked the TV commercial which went "the answer is Yes, now what is the question".  If I don't know, or the matter is beyond my experience, then in most situations I will know someone who does know, so all of my clients can get what they want indirectly from me if not directly. 

Any customer facing industry or profession needs the can do approach and the more personality you have in your team the better it is for the interaction with your clients and customers.  At Crowther Beard we set out to look the part, agree fees in advance and enjoy working with our clients and colleagues.  After all this will make us all very happy.

Oh, and the manager who couldn't do?  He is no longer is a member of our team.

Yes even more on tax planning

Those of you that know me, realise that I'm sad enough to think that tax planning is very important. I have blogged on this subject before but, at the risk of boring people, the recent media coverage of the use of tax schemes by 'selebs' to avoid tax has prompted me to spout forth again.

The first point I want to make is that all the schemes, such as those supposed to have been used by Jimmy Carr and Gary Barlow, are extremely complicated. The only people that suggest that they are straight forward are either journalists, looking for a headline, or people promoting the scheme. If they were as easy, as is suggested, they would be more wide spread. In the main, they rely on an interpretation of the tax legislation and a 'paper trail' that needs to be followed religiously, if they are to work.

The second point is the idea put forward, mainly by the media that they are only for the fabulously wealthy. This is probably closer to the truth, as many of the schemes have an up-front fee, for implementing the planning involved. However, there are equally many schemes where any fee cannot be described as only for the rich and are open to anybody, who has a need.

The third point is the suggestion that HM Revenue Customs are doing nothing about combating schemes that the Government have branded as ‘morally repugnant’. Just because there is not a swathe of new legislation aimed at the schemes does not mean that they are not doing anything. As stated above, schemes rely on interpretation of the tax legislation and HMRC may well consider that existing legislation is sufficient, given their interpretation of it. Take as an example a tax scheme that was implemented in the 2010/11 tax year. HMRC would not necessarily know of it until as late as 31 January 2012 and then might simply raise an enquiry to keep the matter open until the Courts decide, which interpretation is correct – probably many years later.

When you sit down with a client, to explain that they are not simple or necessarily cheap and they will not know whether they have been successful for a number of years, many loose interest. Add to this the possibility of bad publicity and there will be less interest but some will want to proceed. I do not see it as a moral problem for me to make clients aware of these schemes as long as this stops short of promoting the scheme involved. Surely it is only best practice to make clients aware of what is possible and to explain the pros and cons of each option. The client is then able to make an informed decision.