Two months into the year, and our economy continues to be in a very interesting yet slightly perplexing place. Traditional indicators of the health of our market-place do not provide a consistent picture.
Of course prospects for the public sector and the overall size of the national debt cast an ongoing shadow over the UK market at the beginning of the year. We all recognise that something needs to be done, and yet we have a curious interlude until the General Election until anything major actually happens. Britain’s biggest businesses claim that 56.6% of gross profits went back to the Government in the form of different types of taxation last year. That is an extraordinarily high figure. We tend to think of the government as having an equity stake in our banking sector alone, but the practical reality is that their ‘dividend’ flow comes from each part of the 'private' sector.
The challenge of public debt aside, there is a brighter news. Recruitment in the UK is on the rise. I met a provider of assessment software the other day who described a very promising uptake in demand from January. The prevailing mood at the Best Companies Awards Ceremony (where we were delighted to come 5th) was one of cautious optimism. This definitely stronger than last year, although less because of any broader confidence in the economy than a feeling that we are collectively wiser about how to tackle this uncertainty than eighteen months ago.
This sense of 'confidence from experience' we felt in the SME market last week is also mirrored in our corporate clients. They are increasingly leaning to practical action not just despite, but also because of economic circumstance. Certainly the strategy houses are very busy indeed with a blend of growth strategy and due diligence work. The strongest businesses are plotting for significant market share growth in the next eighteen months. We notice them being far clearer around their strategy whether we experience double dip or slow growth scenario. They have built plans which will operable under either set of economic conditions.
This environment creates a really interesting shift in our client conversations. Three years ago we might have been asked about (for example) a pre-diagnosed leadership development programme for a 150-strong Directorate. Often it needed a lot of probing to identify how this related to the future strategic intent for the business. Today our conversations start earlier and far broader in scope. Questions like ‘’if this is our strategic straw man for the next 5 years, how will this impact our people strategy? How do we cascade the imperative for change and the behaviours we require? How will that impact on our employees, our customer service levels and the way our customers talk about us? How will we know if it is working?’ This is where we love to start a conversation.
Economic uncertainty remains in the UK, but it seems to be driving far less strategic uncertainty than twelve months ago. Our clients are clearer about a future vision and purpose. Or challenge is to respond to that.
It is Awards ceremony season, and tonight is the real big one – the announcement of the Top 100 in the Sunday Times Best Companies to Work For list. Lane4 is in the 'small and medium size businesses' category. This Sunday the results are announced to the general public as a supplement in the Sunday Times.
Lane4 has been invited along tonight, which means that once again we have made the Top 100. We are delighted. An increasing number of organisations enter each year hoping to make the grade. Of course this year we have the extra spice of having experienced one of the toughest years on record for British industry generally, and certainly the toughest on record for our industry. Best Companies provide a feel for individual organisations’ scores in advance of the evening awards, and it was very gratifying for us to see that (as per our own internal data) our data is as strong as in previous years when we have made the top 10.
The first year we entered Best Companies I remember being surprised by the robustness of the diagnostic which underpins the assessment process. On a professional level I am particularly interested by some of the extra questions which Best Companies have begun to ask participants – in particular around how they feel about their organisation’s brand as well as its values, leadership and culture.
I would like to think that this evening in itself is a barometer of some of the things that put Lane4 on the list. Of course we have a table at the Awards Dinner tonight. Places were ‘’won’’ via the Lane4 internal lottery. Many others who did not win the Lottery are going to be gathering just down the road at the ‘’Unofficial Lane4 Awards Ceremony’’. Arguments persist every year over which group had the better evening. A brave few manage to meet up at the end of the evening – although Fatherhood has put paid for that level of stamina for me!
It is interesting to see how many of our clients proudly tell us now that they have made the ‘’Best Companies’’ list. We are increasingly party to many discussions around this at FTSE Board tables. Ten years ago references to the ‘’Best Companies list’’ would have been citing the list of ‘’Top Stock Market Performers’’ in the Financial Times. No longer. In fact bestcompanies themselves (the organisation behind the diagnostic) have data which correlates ‘’Top 100’’ status with sustained outperformance of the Stock Market.
Tonight I am heading along to the Unofficial Lane4 party. We will be celebrating being together today, and also reflecting informally on how we aim to evolve over the next few years. More on the latter point in the next few months.
I read with interest journalist and author Philip Whiteley's last post on regulation in British business at http://felipewh.wordpress.com/.
''The arguments over more-versus-less regulation are often not the most important ones to have, because the things that really matter are to do with leadership, workplace competence, engagement and trust''
I found myself nodding along as I read. Regulation is not the sexiest of subjects, but like it or not it increasngly effects my role every day at work. We recently moved around the structure of our office and some of us were in at the weekend moving desks around. Theoretical Health and Safety risk. We have some fabulous working Mums (and some soon to be Mums) in our office. Maternity leave requires a PhD to understand. Let alone the procurement systems that some FTSE businesses would judge a suitable first interface to put together a partnership-orientated approach to scale change!
It is not just my core Lane4 role that I feel this pressure. Wearing my European Sponsorship Association hat, European regulation of alcohol, betting and tobacco sponsorship among other areas is also a hot topic. On one level this is understandable, and yet on another my frustration is that the lobbying becomes an industry in its own right. Six years ago I spoke at a European Union conference on the subject in Brussels. It was run by a private company in a swanky hotel with chiefly European Union Member speakers and evening ''lobbying'' aplenty. There was a distinct sense that nothing at all of any importance would be discussed or debated (let alone decided), apart from which champagne was the best on the menu.
Despite all of this I support sensible regulation in business leadership. I support it in the world of sponsorship. I particularly support it in an industry such as learning and development where no qualifications are required to call oneself a coach. However I also support common sense. Any business leader who needs to get out the small print to wrangle through a conversation about accrued holiday with a a new Mum returning to work has more fundamental issues in their organisation than the odd day of holiday. Any sporting organisation who genuinely wishes to accept a sponsorship which is ethically dubious will only erode their value in the long term. Equally any HR Director who is prepared to bring in unproven and unsupervised coaches will soon realise that the risks outweigh any potential benefits.
I believe in regulation to help us look after the vulnerable in society and business, but I also believe that ultimately the ethical, sensible and emotionally intelligent prevail way before it is needed. Regulation in business is similar in many ways to the best negotiated commercial contracts between two organisations. It is important to have in the desk drawer as a guide, but if it ever leaves the desk drawer, it is probably too late!
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