Tuesday, October 26, 2010

CSR - what does it mean for Norfolk?

For those of you expecting the CSR to bring some clarity to the future of business support, I am sorry, but hardly surprised, that you've been disappointed. In the same way that cabinet ministers have been scrambling over the last month or two to defend their departmental budgets, we shall now have a scramble within the departments as junior ministers and civil servants join the internal fray. Expect it to be Christmas before there is any break in the fog.



We do know some things however: EEDA are under sentence of death by March 2012 and are winding down their activities rapidly and will take the Business Link contract with them. We can expect a revised and more user friendly Business Link website and smart money is on the creation of a supporting call centre. There is talk of a network of growth hubs to provide more specialist support to growing businesses and exploit university research but the detail is glaring in its omission. The more traditional support so valued by start up and early stage businesses in the form of individual advice and business planning training looks in severe danger despite David Cameron calling for an age of entrepreneurship. I do not favour government support for established businesses as they should be in a position to pay for help but for those people that the country needs to set up their own business there looks as though there will be a vacuum which it is unlikely to be filled to any great degree. This is short sighted as encouraging enterprise is vital to our future – especially in areas such as Norfolk where we cannot rely on inward investment to any great degree and have a real need to “grow our own” entrepreneurs.



There has been some talk of mentoring and this is something that we value highly but it is not a panacea and it is not cost free. Volunteers need to be trained and managed, mentees need to be screened and matched. And that's a professional job. Which leads us on to the Enterprise Allowance – something for which I have been lobbying for the last four years, details are slow to emerge but it would be a disaster if this was merely an add-on to some multimillion welfare to work contract given to a multinational outsourcing organisation. If you want to make a difference, you have to get local organisations to engage with local people.



And talking of local, the LEP story is yet to unfold. We await the White Paper which will tell us more, I hope, about their role and responsibilities and whether the Regional Growth Fund can support enterprise activities. Not least if the East of England can expect to receive anything other than a token amount with the majority of funding going to the North East and North West. With funding for local authorities due to decrease substantially, the end of government funded streams such as LEGI which has had a major positive effect in Norwich and Great Yarmouth and the EEDA funded “Encouraging Economic Participation” finishing in March the immediate outlook is not good. With no county strategy for encouraging enterprise and start up businesses Norfolk needs to implement radical and far reaching policies in the short term if it is not to fall further behind its competitors.



The White Paper on Sub National Growth is due for publication on 28 October. It is required bedtime reading for local policy makers who need to elevate ambition and build on the latent potential evident in our Fine County

Tuesday, October 12, 2010

Work experience - to be endured or enjoyed?

It is interesting to note a subtle debate which is bubbling under the radar relating to the subject of do people learn through experience or via specific interventions such as training courses etc. As with most debates of this nature I suggest that the answer lies somewhere in between the two extremes but I would like to focus on one element which is close to my heart - work experience.

I do tend to believe more in that behaviour is dictated by experience and thus work experience in my view is vital for young people. Unfortunately in too many cases work experience is treated in a "block" fashion with it being seen as a logistics exercise by schools, businesses and local authorities rather than a vital step in encouraging young people and explaining the world of work in a manner designed to inspire.

Of course there are numerous examples of good practice and work experience placements which have led to permanent jobs but for many young people work experience is an event to be endured rather than savoured.

If we think back in our own lives there will be some episodes which stand out as life changing in their impact and often these are based around an inspiring individual be it teacher, mentor or boss. If you ask successful leaders how they have learnt through their career they will often mention their first work experience. It could have been a school placement or indeed their own after school or holiday job but in most cases the experience sticks and acts as a powerful motivator either to be replicated or avoided!

I want to see every work placement tailored to a students needs and devised to inspire. At the time of work experience our young people are at an impressionable age and memories - good or bad - will stick for life. The influence of people at work will be remembered and it is important that businesses understand this and place young people with their most inspiring staff members - at whatever level in the company.

Work can come as a shock; the punctuality, dress, pressure and schedules will be totally different from what they are used to at school and so each young person should be adequately briefed by their teachers prior to starting and all experiences logged to help improve future placements. As I have mentioned this is not the norm due a wide variety of factors but we must never lose sight of why young people attend school - to prepare them for work.

We need to build a much stronger partnership between the world of work and academia, if we do that then our future will be in good hands.

Monday, October 11, 2010

Does the public sector really get Economic Development?

With the spending review close upon us and an overwhelming need for fresh thinking in the public sector plain to anyone not within it the unanswered question is do the various bodies know what it is that they are trying to achieve?

Having been in enterprise support for almost 14 years I think that I have seen most of the various strategies designed to help boost enterprise. Unfortunately I am not impressed with much that I see. Economic Development is approached in an academic way more akin to a Planning Department than one designed to stimulate enterprising activity in an area. Most published aims and objectives in the local authority arena are identikit and fail the "Tippex test" - white out the county/district name and put in any other.

If there is no differentiation in tactics then the results will be broadly similar and yet it is almost impossible to get the relevant people to understand this. There are some notable exceptions however who have attempted a different approach and been regarded with a better than average result but these forward thinking authorities are all too uncommon - Suffolk County Council take a bow.

To me an Economic Development department should be tasked to understand what it is that motivates enterprise in their patch, find out where there is a real strength, seek to isolate local weaknesses and produce, tender and contract for an appropriate solution to their bespoke needs. Not radical perhaps but rarely seen. What is second nature in the private sector is anathema to the public sector. The fear of being different and the knowledge that there is no sanction for failure leads to a spiral of waste both in monetary terms and of opportunity.

So what should happen? We hear much about the Big Society which in turn must lead to Smaller Government. This is to be applauded but for this to happen we need Council officers and members with vision and backbone to make real changes. I want to see local authorities move away from the "transactional" approach currently seen to a "relationship" approach whereby trusted partners in the private sector are fully engaged to make a long term aim become reality. This a a real "win, win" situation but not widespread practice.

What we currently see in this sector are unrelated tender opportunities not forming any part of a long term strategy but instead driven by budget availability which are often won my what I would term as the "mercenary" tendency who write good bids, move in on an area but deliver appalling results before hoodwinking the next gullible authority elsewhere in the country. The time is ripe for long term relationships to be made by local authorities with organisations who have a great track record and will be around for the duration of the journey. I know of so many examples of tenders being won by companies who have failed in previous contracts but "due diligence" is not a phrase that I see when councils award contracts!

Where we see good practice the results follow and these are the areas performing better than everywhere else. The converse is also true; perhaps the only way to change the results is to change the people and methods - same activity = same results.

At NWES our mantra is that we always deliver and that is exactly what we do 100% of the time and yet past delivery is rarely a high scoring aspect in any tender. Make economic officers responsible for economic growth and if they do not deliver change them - this is what happens in the private sector and until it happens in the public sector my hopes are not high for the very areas that need innovative intervention.

Friday, September 24, 2010

Head up not Head down

I recently attended the NFEA and PROWESS conferences which were held back to back in Nottingham. This is possibly the major event for our industry and sees an interesting programme of speakers with the chance to talk to other leading lights from the industry.

What continually amazes me is the fact that many agencies fail to attend. According to sources at the NFEA the excuses are varied and innovative! However a common theme of "I have not got the time" or "we cannot afford it" crop up all the time. I cannot understand this mindset. I am afraid that these are the very people who need to attend such events as they are clearly struggling in their individual businesses.

Whilst I am sure that it will not add to my popularity rating I feel that I must berate these people who are doing untold harm to the movement. The conferences are heavily subsidised and the costs of attending are minimal so the cost argument falls down straight away. The dates are well publicised in advance and so diary commitments should be minimal and thus the question of time management can only come down to disorganised CEOs.

It is no coincidence that the most successful agencies are perennial attendees at the conference. They have the wisdom & foresight to understand that expanding your network of contacts, learning new things, discussing plans with people in similar situations and gaining a greater understanding of the events dictating future government strategy far outweigh a £200 cost or day out of the office.

So what can be done to help these "Ostriches" take their heads out from the sand? Perhaps it needs a larger agency to "adopt" a smaller one and provide a bursary to enable the CEO to attend. A more proactive stance amongst regional members to exert some moral persuasion would help as would a personal contact from the NFEA CEO to every agency who has not attended. If we wish to be seen to be helping all then we need to be proactive and not just rely upon the dwindling number of forward thinking agencies.

I am a passionate advocate of learning, swapping good practice and networking to improve NWES and our growth and reach is testament to that success. Perhaps now is the time to hold to account those Chairmen of agencies which are under performing - shape up or ship out? Radical perhaps but difficult times call for radical solutions. We need to be relevant for 2010 and beyond and not living back in the 1980s.

So strike out a couple of days in the diary for September 2011 and take some time out to work on the business instead of working in the business - that's what a good CEO does.

Wednesday, September 1, 2010

What makes a good Chief Executive?

A few random thoughts on what I think it takes to be a good leader. Not an exhaustive list and one to which I will continue to add and adapt. A good leader..

1. Is punctual
2. Knows the difference between important and urgent
3. Never complains that they do not have enough time
4. Does what is necessary even if it courts unpopularity
5. Accepts responsibility
6. Is always courteous
7. Says "Hello" to all staff every day
8. Thanks people as a matter of course
9. Talks to people "face to face"
10. Never checks their phone in the middle of a conversation
11. Is determined to be the best in their industry
12. Respects different opinions
13. Does not accept excuses
14. Understands that every system can be improved
15. Leads through attitude, skill and competence not by job title
16. Helps others in their careers
17. Sticks to their values come what may
18. Always has a "Plan B"
19. Knows that you are only as good as your last decision
20.Realises that paper qualifications mean nothing unless they can be converted into appropriate action
21. Learns from others both older and younger
22. Respects wisdom
23. Harnesses technology as a tool not a master
24. Knows the difference between "dress down" and "scruffy"
25. ...."one of the gang" and "embarrassing"
26. ...."in confidence" and "gossip"
27. knows that it is harder to build than destroy
28. Knows when to say "sorry"
29. Can laugh
30. Believes in themselves
31. Makes mistakes but learns from them
32. Takes inspiration from a wide variety of sources
33. Isn't afraid to copy as well as innovate
34. understands that there is no destination - business is a constant journey
35. Puts things in perspective
36. Knows that outputs, figures etc are a means to an end not the end itself
37. Understands that businesses is a cycle - there will be bad times as well as good
38. Can celebrate success
39. Is not afraid of odd numbered lists!

Tuesday, August 24, 2010

Becoming a Mentor

Perhaps the most undervalued and under utilised asset in business today is experience. Experience helps you to make good decisions and is usually gained by making bad ones.

Too often in business the benefit of this experience is lost and not shared either within or outside of the company. This is an expensive mistake. There are many ways in which this knowledge can be harvested to help others and one such method is via mentoring.

Academics have spent many years and millions of words attempting to define mentoring and the difference between that and coaching and counselling. To the business this is of little relevance – it is the harnessing of experience which can give a business an edge over the competition that matters.

The word mentor comes from a character in Homer’s Odyssey taken over by the goddess Athena to guide a young Telemachus in his time of difficulty. In many ways this sums up the essence of a mentoring relationship. It is a helpful partnership based upon mutual trust and respect.

A mentor is a guide who can help a mentee to find correct solutions to both business problems and career issues. To work, the mentor will have both an empathy with the mentee and their business and will have encountered similar business issues in their professional life.

It is not the role of a mentor to run the mentees business, make decisions for them or line manage them. Rather that they help the mentee believe in themselves, question and challenge whilst providing guidance and encouragement. It is an excellent medium for exploring new ideas in confidence.

So, what should you look for in a good mentoring relationship?

Experience: usually the mentor is older but not always. I know of one person in his 20’s that mentors older people on the ways of the online world.

Availability: it may be great having a famous or successful person to mentor you but if they are not available to you when needed it defeats the purpose.

Focus: you need a mentor who is able to not only focus on you and what you would like to achieve, but also help you focus.

Belief: someone who believes in your potential; if they are not sold on you then they will not put in all of their effort.

Open minded: a mentor who will allow you to progress in a way that you need to progress, not necessarily in the way that they would prefer.

Positive: someone who is positive and helps keep you positive, to help you up when you fall and who cares about your success as much as you do.

Many successful business people have several mentors throughout their career helping them at different stages along the way. Sadly not all of them then act as mentors themselves. Being a mentor is a rewarding experience and should be a freely given service during a working life – not just when you are retired. If you are interested in becoming a mentor or having a mentor work with you then contact organisations such as NWES or Princes Trust who can act as impartial matching brokers.

Friday, August 13, 2010

The secret of success!

"Sir, what is the secret of your success" a young man asked a renowned entrepreneur

"Two words" he replied

"Sir, what are those words"

"Right decisions"

"And how do you make right decisions?"

"One word"

"And what is that"

"Experience"

"And how do you get experience?"

"Two words"

"What are they"

"Wrong decisions"

Thursday, August 5, 2010

Local Enterprise Partnerships - friend or foe?

From an external perspective it would seem that the local authority network is focused solely on the forthcoming local enterprise partnership discussions (LEPs) and how it may impact on their control of services.

Since the notice from the government that Regional Development Agencies - and also regional government offices - are to be abolished there has been little talk of anything other than LEPs. Reaction varies from authorities caught like rabbits in headlights awaiting "further guidance" to those who see it as a way to wrest power and control. The government has been specific in that they are seeking views from local areas and will not be issuing more guidance and yet some authorities cling on to the hope of details emerging telling them what they have to do just like a toddler with a comfort blanket. It is very disappointing that officers have become so used to "obeying orders" that many seem to have lost the ability to think for themselves.

At the other end of the spectrum the opportunistic see this as a chance to grab the initiative (and power) and are seeking to overturn the "old order". I have had so many conversations with officers and members that I am dizzy with the myriad of solutions being touted around.

I am realistic enough to understand that the decisions on what the boundaries may be will be decided by politicians. Businesses have neither the time nor inclination to spend hour after hour arguing over lines on a map.

So what seems to be emerging? At this stage it is clear that upper level authorities see boundaries concurrent with theirs and that it is a chance to wrest more control for themselves. On the whole districts are disgruntled and are seeking different pairings which appear to have greater resonance with the governments vision of local economic areas with a degree of common issues. Worryingly there is little in the way of original thinking and exciting and different ideas being discussed.

In the East of England we suffer from a lack of a regional identity with places like Herrtfordshire having little in common with Norfolk for example. This should be the catalyst for original thinking and LEPs emerging which do not follow simple county lines. For example Great Yarmouth and Lowestoft are reliant on each other (even if both authorities refuse to acknowledge that) and have more in common than they do with say Ipswich and Kings Lynn and yet county lines preclude real engagement. Similarly the coastal strip from Kings Lynn to Harwich shares ports to tourism, energy to erosion and would make a very interesting LEP which could be unique - thus increasing the chance of accessing funding. In the other direction a LEP based on Peterborough and including the fens, south lincs, west norfolk and rural cambridgeshire has much to commend it.

So where does business fit in? Somewhere down the line in all honesty. There has been minimal discussion with real businesses with local authorities believing that if they consult with Chambers of Commerce, the IOD and FSB that they have ticked that box. We support - and are members of - each of these organisations but they are not business. We need CEOs and Chairmen of businesses to sit on LEPs if they are to be anything other than talking shops. I even got hold of one internal council document which suggested that despite government instruction that a LEP must have local authority majority or they would be "undemocratic" and power may be ceded to "unaccountable" individuals! I know who I would rather have running my budgets!

This is a great opportunity to shape local plans over the next few years and yet I wonder if I am being too cynical in believing that little will change. I want a strong local economy based on enterprise and cutting through the ridiculous bureaucracy which stops most business people from becoming councillors. I hope that LEPs become local powerhouses for change but based on what I have seen and heard so far my hopes are not that high.

Thursday, June 24, 2010

Removing the FT from the FTSE100

Well we now have our very own Social Enterprise 100 list. The RBS SE100 index is an interesting albeit controversial (in parts) ranking. I am very much a supporter of anything which raises the profile of social enterprise and this report is a major piece of work. Ranking anything is always going to cause debate and argument but the authors have done a good job in addressing as many variables as possible.

I look forward to seeing future SE100 lists and the rate of change within the organisations being ranked. I have a feeling that many of the stars of 2010 will disappear rapidly with the cuts in government spending. As an example the withdrawal of the Future Jobs Fund will adversely affect many of the high fliers in this years index.

What this report shows is how important social enterprise is to the country with the 350 businesses listed having a turnover of £812m. I am hoping that there are even more entrants next year and that this list becomes as important in our industry as the FTSE100.

Size is not everything as we know but with "impact rankings" alongside growth and size we can see a real pattern emerging of what the sector has to offer. For NWES it is interesting to note that we are ranked at 24 in the "BIG50".

What the sector needs to do now is to use this information in putting across our message. We still struggle to define ourselves and I for one hate "third sector" but perhaps this will begin to change perceptions.

So well done to RBS and if you want to read the report then access it via: www.socialenterpriselive.com/se100

Thursday, June 17, 2010

So what next for Business Link?

A really interesting article appeared in the Sunday Times on 6 June 2010. This was an interview with Mark Prisk the small firms minister who began to expand on thoughts first raised in opposition. With the cost of BL estimated at £190m pa can there be significant savings? Well for me the answer is a resounding YES! We have a great opportunity to radically reform business support in this country and my ideas would save c75% of the current BL budget.

The changes which have been mooted to the BL structure are to be welcomed. We do have a good relationship with BL as their main deliverers but we are keen to provide start up support directly once more and return to the enterprising economy last seen some 25 years ago. We are clear in our vision which has been consistent for many years:

- Information can be provided via an improved (over the already good) BL national website. This should be the first point of call for information on a number of business related topics and can perform a similar role to that of the universally acclaimed BBC site. This can be administered nationally under contract to an experienced website company. The budget for this can be agreed but should not be more than say 3% of the current national BL funding of £190m
- Those businesses which have reached a certain stage in their development, say 3 years, should be in a position to source and pay for any business support required. There may be exceptions at key stages such as first export, where generic support can be provided via the BL website and dedicated country export counsellors available via telephone, but in general the rule should be to let the market determine the support required. The budget for this is unlikely to exceed say 5% of the current BL funding.
- Start up support is absolutely vital in an era where the job market is likely to remain depressed for some time. Whilst support for unemployed people will be dealt with under the DWP programmes there is still a need for help for those who wish to leave the world of paid employment and seek self employment. These people are important as they leave vacancies to be filled and will in turn create employment via their own businesses. This is one element often overlooked in “self employment programmes” that on average every business created with help from an enterprise agency such as NWES will in turn create 2 new jobs. Currently BL pays lip service to start up support with a very low percentage of their funding going to support start up business. We would strongly support a separate start up programme to be delivered directly by the enterprise agency network for any individual who is not covered by the DWP programme. This could be delivered for approximately 10% of the current BL budget.
- There is a place for a national “enterprise in education” programme which will stimulate young people to harness their latent enterprising talent. This would require much discussion to agree on an acceptable way forward but should be a consideration for implementation during the lifetime of a parliament. Using our own experience this can be delivered in all secondary schools across the country for 5% of the BL budget.
- Beyond this we would suggest that there is little that should remain from the current BL offer. Therefore there are potential savings of 75% of the £190m currently spent - £140m. In turn we believe that the offer will be more transparent, that there will be little mourning in the business community beyond those with a vested interest, the savings in administration cots and bureaucracy in organisations such as RDA’s, and BIS could in turn be added to the cost savings.

Radical perhaps but now is the time to be bold - its over to you minister!

Thursday, June 10, 2010

Learning lessons from failures

The differing problems facing BP and BA set me thinking about how some household names were destroyed by a combination of lack of planning, staff unrest, poor strategy or marketing that went wrong. It is surprising how many examples there are when you start thinking about it. My list would include:

Ratners This must be the classic example of the wrong thing said at the wrong time to the wrong audience. Who could have guessed that a poor joke contained in a speech to the Institute of Directors in 1991 would bring down a high street giant? Cracks about a decanter being "total crap" and earrings lasting less time than an M&S prawn sandwich wiped £500m from the worth of Ratners. Where Ratners had previously cornered an important segment of the market at a stroke no-one wanted to be seen wearing their products and the company never recovered. Gerald Ratner has the dubious honour of being remembered as a man who destroyed a company rather than a great entrepreneur who built one. A lesson for everyone running a business not to dismiss your own product.

Enron A major player originally in the energy sector brought down by perhaps the worst case of corporate mismanagement ever seen. Diversification is generally a good thing but Enron moved into a huge range of sectors which it knew little about and then rather than managing it even with a modicum of ability it hid problems with a labyrinth of insider deals, associated companies etc and went from a $60billion company to bankruptcy in a heartbeat. This is a classic case of fraud, bad practice and incompetency which will hopefully never be repeated on this scale again.

DeLorean A favourite of mine because it exposed the soft underbelly of government support for big industry. Four years only 6000 cars sold and it went bust in spectacular fashion having consumed vast amounts of taxpayers money. Fraud was of course a major part of this but it should be a case study for any government looking to "bribe" companies to set up in a particular location.

Most dotcoms Our very own South Sea Bubble when the combined intelligence of the market was lost in a rush to enter a new unknown market. The number of massive failures is long but includes notable scalps such as Boo and Flooz. Technology advance is wonderful but normal investment rules should apply!

Hoover flights What idiot thought up the idea to give away a free gift worth more than the product being purchased - and worse what idiots agreed to run with it?! Spend a £100 on a Hoover and get a free flight anywhere in the world - it is thought to have cost the company £50m, its royal warrant and its independence. A juicy case of marketing gone mad.

Betamax I cannot decide if this is a technology or marketing failure. This was a product which was superior to its VHS competitor but lost out big time. Some say because VHS could record up to 4 hours on a tape whilst Betamax could only record 1 hour (a major flaw) whilst others accuse Sony of losing out to a worldwide marketing campaign. Either way Betamax is a footnote in technology advance but a good lesson that engineering on its own does not a good product make.

Swissair Perhaps the best case study there is about pursuing an overambitious expansion programme without due diligence. For 60 years one of the worlds best run airlines producing annual profits it embarked on an expansion programme (allegedly after advice from consultants) without targetting its takeovers and putting market share over profitability. It got the share but was saddled with huge losses and a lack of cash flow and within 10 years it folded.


There are many more examples but these should act as valuable lessons for businesses. I would like to think that we would see less failures as we go forward but I can spy the warning signs in several household names and expect to see a few more "staples" such as Woolworths disappearing from view over the coming years. Strategy and effective delivery is key and some companies suffer from a lack of both and will be found out.

Wednesday, June 9, 2010

Getting paid during the tough times

As I have mentioned before cash flow is the most vital component of any successful business. The day that the cash dries up is the day your business folds. With many companies pushing credit as far as they can what can you do to minimise the effect on your business? Here are a few of my tips to consider:

1. Raise payment terms at the point of sale not at the bottom of the first invoice. It is a common misconception that this may mean you lose the sale. I would argue that only poor payers will be frightened off and you can do without those types of customer. So play to their integrity and explain that you operate on fair trading terms - you will be surprised at how many people will agree with you.

2. Where possible get payment in advance. I would suggest wording such as " We never ask our good customers to subsidise the few customers who abuse credit terms by not paying on time. As a result we ask that payment is made when the work is started/goods are delivered etc

3. Offer huge settlement discounts! Take a tip from some of the major retailers. If your target price is £250 then price it at £350 and offer £100 off for payment within 7 days - it works.

4. People pay people they like. Just as the adage that people do business with people they like the same goes for payment. So be approachable, pleasant, deal face to face or phone not by letter, appeal to their fairness, thank people for payment and dont threaten unless you intend to follow it up!

5.Give prompt payers an "added extra". Low cost giveaways such as an upgrade, next day delivery, extended warranty, discount on next order, priority etc

6.Payment is not just the job of the finance team. Use your whole team and exploit their contact with customers. Reward your team and make it into a fun team event.

7. Hold a prize draw. as an example put all prompt payers into a monthly draw with say a meal, champagne or vouchers for the winners. At £100 a month it costs £1200pa - good value for increased cash flow.

8. Ensure your systems are in place. So that you invoice promptly, chase when due and follow up promptly - you will be paid promptly!

9. Offer finance for your customers. Work with your bank and you may even make money out of it. Just think car dealers, golf clubs, electronic stores etc.

10. Be bold. Generally if you do not ask you do not get - so be bold and ask/insist on your terms. A sale is only a sale when you are paid - never forget that.

Monday, June 7, 2010

The new New Deal?

I attended a “meet the ministers” event in London for New Deal suppliers on 2 June 2010. The event was hosted by DWP with Chris Grayling and Lord Freud. In general the message was that there will be rapid changes and they want to build on the best but free providers to get on with the job. In the new scheme the government is looking to transform welfare to work and any new system will be providers paid on results – not for “inputs”. It is likely that there will be a single scheme instead of the myriad of special programmes currently seen and the volumes going through are likely to be much higher as claimants are moved from IB onto JSA.

The message was clear that this is not a rebranding but a radical transformation. The government is clear that intensive provision is not a role for government and should be provided by the private/third sector. It is likely that clients will come with different amounts attached to their heads with the “hardest to help” coming with the most money. Providers will then be free to deliver whatever is required to get these people into work. This could include confidence building etc along with direct work related activities. The government is clear that the idea is to get people into work and not a job i.e. as long as they are off the register that is fine and for instance they could become a temp moving from role to role rather than staying in one job. Providers will be paid on sustainable work so the claimant would have to be off the register for an agreed period e.g. 2/3 years.

This system means that providers need a strong capital base as payments could be 12 months+ down the line. By strong capital base the indication was “needing city help” i.e. £100m+. Companies will need scale and “rich” coalitions are encouraged with multiple disciplines aligned with good management, innovation and creativity. Changes will be made in days and weeks not months and we can expect to receive individual communication soon regarding what is happening to current provision and expect more details in 4-6 weeks on the new programme.

In answer to some questions:

- Is FND2 dropped? No decision today but preparation work will not be wasted

- What will be the geographical contracting areas? Not yet decided but hints as to FND1&2 areas. Not looking to shake up unnecessarily

- What is the role of the 3rd sector? Want to see 3rd sector involved at highest levels but capital may be a problem

- Will the risk be put down to the smaller players? It is the job of the prime contractor to fund the contract!!!

- What happens re the benefit trap? Claimants will be better off working with hints that 55% taper rate on benefits e.g. claimants will keep 55p of every £ earned.

- Is the government still committed to Work for Yourself? Yes!

All "good stuff" so far then and little to argue with. However as with any government programme the devil is in the detail and I do have some queries, concerns and questions which need to be answered. In particular:

- Safeguards that the small and medium sized members of the coalition will not be squeezed by the prime contractor - the "Tesco effect" - risk needs to be equally shared and not passed down to the end deliverer

- A maximum amount that prime contractors can "cream" from the contract

- Where contractors do not deliver then they cannot simply bid and win another contract without previous performance taken into account

- Weighting given to consortia including the third sector

- Work for Yourself kept as a separate contract as it is not about employment and needs a specialist approach

- Clarity over contract areas - not too big or local provision disappears and a lowest common denominator approach prevails

So we can all look forward to more detail coming soon and I am sure that we can expect some radical changes - I certainly hope so!

Thursday, May 6, 2010

A heartfelt plea not to reinvent the wheel

I was at a meeting last week with some senior BIS personnel talking about various post election scenarios for the business support programme. The consensus was that where possible we MUST try to avoid politicians wishing to overload us with initiatives, constantly change programmes after a short period and discarding good programmes for the sake of change.

When looking at what has worked well and what has not there are obviously areas where people will disagree but the general consensus was:

- A scheme which incorporates the best of the Enterprise Allowance Scheme and start up training is effective and can be a no cost option with benefit savings

- The brokerage element of Business Link is variable and not proven to be effective and could be dropped

- The Business Link website is a good resource and should be maintained but it is not for all and a 1-1 advice service is required

- The New Deal for the Self Employed was good and should be brought back - not incorporated into a single New Deal pot. It was shown that it has a 400% pay back in benefits saved.

So any incoming minister has the chance to put his or her stamp on the enterprise agenda but would be wise to look at the past for guidance for the future. He/she would be a hero to the industry if they also pledged that any changes were for the term of a parliament and would be given the chance to succeed!

Wishful thinking perhaps?

Wednesday, May 5, 2010

So where next for the NFEA?

On the eve of polling day the enterprise agency movement has a great deal of thinking to do about its own future with a new political landscape. The movement has been adept at surviving all manner of changes both political and social over the years, but, with spending cuts of a magnitude never before seen looming over us like a sword of Damocles we need to start considering our own future.

I would guess that we have c130 agencies left around the country and there is a definite split growing between the "Premier League" and the rest. This is not meant in a derogatory way but is an observation based on size and sustainability. The NFEA has been like our industry FA safeguarding the movement but has the time come for major changes?

I wish to see the movement flourish but believe that this will be in a different way to that seen before. There will be more consolidation, mergers, joint working and, unfortunately, some failures in the months and years to come. If we are to remain as an industry then it is important that the NFEA responds to these changes and reflects the new network.

My personal vision is for a lean executive charged with lobbying and influencing in the corridors of power. This should be backed up with a small but effective Board who use their skills to support the executive and drive forward an unashamedly start up orientated business support structure. We need to be seen, heard and respected and with a new government we have a brief opportunity to shape the industry future.

I have no complaints with the current Board and executive but would like to see a clear strategy communicated to the membership of exactly what we are doing to safeguard the start up agenda in the corridors of power.

I also believe that it is important that the larger agencies should help fund this activity in return for a greater say in direction. The regional structure is now outdated and with some notable exceptions does not work effectively. We need the best, motivated and enthusiastic people to relentlessly push forward change and guide new ministers in their early days.

Perhaps once again I am at the sharp edge of reform and my ideas will not necessarily be met with agreement by all but inaction or wrong action now will condemn the NFEA to the dustbin of history as its relevance declines. Conversely there is a gap for a true leader in the enterprise field and the NFEA has the potential to claim this crown. Which direction will the NFEA take?

Monday, March 8, 2010

The NFEA manifesto - a blueprint for the future?

I have attached below a "manifesto" devised by the NFEA outlining their view of how we should be supporting new business. It has some interesting points and I will return to this subject and debate the individual merits at a later date. For now read on and let the NFEA know what you think.

As Britain slowly emerges from the deepest recession for almost a century, there is a focus on enterprise as never before. Enterprise has a great part to play in helping ameliorate the consequences the recession has had for individuals, families and communities, and to reduce worklessness. But there are deeper forces at work, independent of the current economic situation.

Ours is a society which is becoming more enterprising. In a fast-changing world, people are adapting to changing circumstances quicker and more effectively than ever, they are learning new skills, they are more confident to apply their natural abilities to innovate, they are more comfortable in taking risks and they are eager to take responsibility from an early age.
And ours is a society which is becoming more entrepreneurial. In Britain today, 72% of our businesses have no employees. This accounts for 12.2% of the workforce. 95% of our businesses have less than 10 employees, accounting for 25.5% of our workforce.


2.5 million businesses are based in the owner’s home, a figure that grew by 16% in 2008 alone.
As the attractions of enterprise and entrepreneurship increase, the attractions of employment in large organisations reduce. No longer do large corporations or public sector employers offer jobs for life, steady progression and a guaranteed pension. Indeed, the domination of employment by large organisations which has been a feature of society post-Industrial Revolution may come to be seen as an aberration, and most of the remaining large employers may be seen as an anachronism.


Throughout most of recorded history, we have been farmers, hunters, craftsmen, traders or merchants - living on our wits and our skills, and taking responsibility for ourselves and our dependants. Exactly the attributes the twenty-first century needs.

Small businesses -
• Are an engine of innovation
• Are the biggest creator of new jobs
• Are better at moving people into employment from worklessness
• Employ more disabled people, females and older people
• Offer more flexible employment
• Treat employees more fairly


A successful enterprise economy means both:

A faster growing economy
&
A fairer, more diverse, more cohesive society.

In all we do, our focus is on our clients, those brave people who seek to support themselves, their families and their communities through the skills of enterprise. They may be individuals establishing their own business, or groups coming together to form social enterprises. We are confident in our belief that providing the support they need is in the national interest. We leave others to debate systems, structures, processes and personalities: we will work positively and collaboratively with any individual or institution which shares our ethos.


Enterprise for all

In an ideal world, everyone who was interested in exploring the opportunities for starting their own business, or who wished to improve their business skills would be entitled to personalised, free and accessible support from a relevant professional.

We recognise that an element of prioritising is inevitable. However much of the prioritising is driven by myths.

Myth No. 1 - It is possible to pick winners at start-up stage
Long experience should have taught us by now that picking winners, especially in the early stages of a new business, is well-nigh impossible. Predictions rarely come to pass. Circumstances change. More importantly, too many real growth and innovation businesses are not identified and do not receive the support they deserve. And many businesses have their ambitions and aspirations transformed by exposure to professional business support at crucial points in their development.
Myth No. 2 - Lifestyle businesses are of little value and deserve no support
This is an extremely patronising approach to the vast majority of almost half a million people a year who start a business. They are becoming economically self- sufficient, they are plotting a route from benefit dependency, they are achieving a long-held ambition, or they are perhaps supplementing retirement earnings. They are all role models for friends and neighbours. And some of them will become businesses of substantial scale.
Myth No. 3 - Too many new businesses fail
It is often said that 1 in 3 new businesses fail within 3 years of start-up. This is a misreading of the figures.
Over 2 in 3 businesses survive for more than 3 years but not all closures represent failure: less than half the businesses which close are in financial distress.iv They may have succeeded and been sold to new owners. They may have closed as other better opportunities present themselves to their owners. They may have used the businesses as a bridge into employment, or to higher education. Whatever the outcome, they will have learned valuable skills and enjoyed valuable experiences.


We believe that the enterprise net should be cast as widely as possible. The more people who are engaged in new business starts, the more growing and innovative businesses we have. The more engagement with business support that they have, the easier it will be to identify the businesses which will benefit from specialist support.

Delivering enterprise support

Our experience, supported by a body of research, is that businesses and individuals want to see a tailored approach, rather than be "shoe-horned" into generic "one size fits all" schemes. They wish to be treated as individuals and they trust local deliverers, rather than increasingly remote government services or indeed what they see as civil servants. They value easy access, simple and effective delivery, local visibility and an understanding of the economy in which they live. They prefer a "one stop" approach rather than being "handed off" (a telling phrase) to others, particularly at the start-up stage, and where it is necessary to refer them to more specialised forms of support, they expect this to be done smoothly. And they expect the support they receive to
We recognise the need for innovation in business support. For example we have played our part in developing and promoting the new discipline of Enterprise Coach. We acknowledge the impact of the internet and regard www.businesslink.gov.uk as a superb source of generic advice (though it’s identification with government, and its combination of transactional and information material are obstacles in the eyes of some potential users). Social networking is increasingly important in signposting to sources of support or facilitating peer-to-peer networking. And the growth of the Internet is opening up new business opportunities for small businesses, which now, for example, have the ability to trade internationally far more easily than before.


But for a significant number of people, further support is required. It is important to remember that digital exclusion applies to those most in need of support. The demand for face-to-face advice is actually growing, possibly because many people need help in understanding the material they are provided with over the Internet.

To be truly effective, business support needs to be available across a range of media with the client provided with the option of following whichever route he or she feels most appropriate.

A comprehensive package

NFEA member’s experience, dating back to previous recessions and based on experience of involvement in over 10% of the national start-up figures, leads us to propose a model we have titled the Enterprise Escalator. It brings together tried and trusted approaches, is consistent with the Government’s Solutions for Business and is modular in nature, allowing for variations in local and regional priorities and budgets.

But the Enterprise Escalator provides a comprehensive customer journey, comprising:
• Outreach and awareness raising. We need to continue to raise the awareness of the opportunities entrepreneurship offers and to make specific efforts to engage with groups under-represented in entrepreneurship, both at a national and local level.
• Pre-start advice. It is important to evaluate individual’s skills and motivations to ensure they are consistent with a successful start. We should recognize that starting a business is not the right course for everyone and we should not set people up to fail. Thus there need to be links back to alternative solutions for those who decide against start-up, such as adult training and employment opportunities.
• Start-up training. Everyone should be entitled to introductory and basic training, in parallel with standard web, telephone and printed advice. In particular, feedback from our network, based on discussions with clients and the financial community, is that there is an enhanced need for financial management training, to facilitate renewed lending into the small business sector.
• One to one support. Our experience is that spending time with a business adviser is the most effective single form of support.
• Access to finance. There are obvious challenges in resourcing start-up grants and deploying them effectively. Small grants can be effective as a marketing tool, and we know that, utilised carefully, small grants can be vital in getting some small enterprises off the ground and unlocking finance from other sources. CDFI’s, particularly business orientated ones, need further support, and again can unlock much greater packages of finance from commercial sources.
• Mentoring. Provision of mentoring in the early stages of trading is limited at present. It should be available to a much wider audience than those receiving the intensive start up support.
• Networking. This can be a superb resource in terms of business development, confidence building and facilitating peer-to-peer networking which gets such high marks in most surveys of effective business support.


We recommend that the Enterprise Escalator be established as an outward facing title for this range of support mechanisms, the proportions of which, and the overall availability of which can be flexed as circumstances dictate. Additionally, new and small businesses need easy access to business premises, of which NFEA manage some, but not enough, and a supportive infrastructure. The regulatory burden needs to be cut, particularly in relation to the planning and legislative barriers to home based businesses and the roll out of fast broadband needs to be accelerated.

In summary

A successful enterprise economy means both economic growth and greater social inclusion.
Supporting people into self-employment is a cost-effective option for Government, even discounting the wider social and economic impacts. The way to have more high growth, high innovation and high employment start-ups is to have more start-ups of all types.
The demand is for accessible, credible and independent advice.
We need a logical Enterprise Escalator of support, which people can step on or step off from at different points and a government which provides a supportive business environment.


NFEA is the national enterprise network.

Our members are drawn from local enterprise agencies and a wider range of enterprise support organisations and provide an array of services to new and emerging businesses, including independent and impartial advice, training and mentoring to all who seek them. With roots dating back to the 70’s, NFEA members are social enterprises, with boards drawn from the local community, and have extensive experience of providing support to new and emerging businesses, and with representation in over 250 locations, they offer an unrivalled route to this market.

In 2008 alone, the NFEA network of enterprise support organisations supported over 100,000 pre starts, nearly 25,000 start ups and 130,000 established businesses - totalling over 250,000 clients across the country. Many NFEA members have expanded in scope and now provide advice and guidance to a wide range of clients ranging from young people in schools, colleges and universities, through the pre-start and early stages sector to established businesses. Many are able to supplement their core services with the provision of incubation and managed workspace where they support over 2000 businesses, and with tens of millions of loan and investment capacity.

Full NFEA members are required to meet exacting quality standards covering both their individual advisers and the organisation. NFEA owns, with a partner, Customer First UK Ltd, the national standard for Customer Service, and manages the Approved Local Enterprise Agency register on behalf of the Secretary of State

Thursday, February 18, 2010

Halting the meddling?

The Sunday Times brought us an article by Mark Prisk (Shadow small business minister) about business support under a Conservative government. Whilst I can hear the gnashing of teeth in some quarters I can only applaud what could be good news for Enterprise agencies and business start ups.

I have previously argued for a light touch from government, which should seek to create the conditions to start and grow a business and then let the market dictate degrees of success. Enterprise Agencies are ideally placed to meet this need as mentioned by Mark Prisk and indeed have been doing so successfully for 30 years. Our error was in not getting together as a strong national group for too long, not sharing good ideas and allowing the concept of Business Link to be nurtured rather than strengthening what was already there.

The fact that we have survived for 30 years is testament to our sustainability and so the proposal to go back to our roots and have government funds match our income for a three year period is spot on. The detail needs to be agreed but if we could match our income it gives us a chance to build on our solid foundations, invest in income generating assets and break free of government support which in future can be targeted where it is needed - if at all.

We are impartial social enterprises rooted in local communities and as such sit ready to grasp this opportunity. Combine this with a new Enterprise Allowance type scheme and a new spurt in business starts could be seen along the lines of the 1980's. Some will fail but that is free market enterprise, many will thrive and provide the country with a more diverse business base less reliant upon "big business" and less exposed to the risks which that entails.

Too many government departments seek to meddle and launch new initiatives. It is the small things which can make a big difference and if there truly is simplified legislation and repeal of the plethora of unnecessary employment law then business will get behind it. History can and should influence the future so when you have something good - nurture it!

Thursday, February 4, 2010

Doug Richard - Visionary or Misguided?

I encourage you to read "The Entrepreneurs Manifesto" from the pen of Doug Richard. This is a concise, passionate and thought provoking pamphlet which is worthy of wide debate. I have criticised his previous offering the "Richard Report" which whilst it contained some excellent points they were lost in easily dismissed and - dare I say - inaccurate assumptions. However Mr Richard has moved on and is obviously warming to his theme.

Who could really disagree with his points on a burgeoning state with the answer to many of our problems being the enterprise and ingenuity of the new breed of entrepreneurs? The answer is probably plenty of people in the public sector but does this mean that Doug Richard is wrong? For what my opinion is worth - No.

In this document he is espousing a vision and so it is light on the "how and when" but it is for others to refine the detail. I believe that we stand faced with a wonderful opportunity which only comes along once every generation - the chance to effect major change for the general good. The financial crisis should allow us to question everything and wipe away the status quo - whether it does or not is in our hands. Will we elect a government with the strength to do what is right instead of what is popular? Does any party offer us this choice?

As a social enterprise ourselves we stand firm behind the rationale that we have the potential to offer more than purely profit driven organisations. We take a long term view which does not have to take into account shareholder return - this means that we have grown quicker than the average company, produce greater surpluses and help more people. In other words good business needs a vision and this is what government in general tends to lack.

So what should we disagree with in the "manifesto"? Well I would counter the sweeping argument about business support and instead put forward that it is new enterprise that keeps the market fresh. As such put time and money into incentivising new business starts from a wide sector of society, nurture them for 12 months, equip them with the skills to survive and thrive and then it is time to allow them to make their own way without government help. So 7/10 for this one Doug - it just needs some refinement! Otherwise this is A* and one can only hope that whoever gets elected works out the detail as a matter of urgency and implement the actions without delay. Or is this just wishful thinking.........


www.schoolforstartups.co.uk

Tuesday, February 2, 2010

Lowestoft - UK capital of enterprise

A few years ago Lowestoft faced one of the worst periods in its long and distinguished history: low levels of entrepreneurship and enterprise; a failing business community in declining industries and a lack of aspiration amongst its population. Having drifted into the 15% most deprived places in the country, action needed to be taken if the town was not to descend into complete deprivation.

As major employers such as Shell and Birds Eye either relocated or reduced their presence in the town, they left behind a declining business stock and a fragmented supply chain.

Aspiration amongst young people was low with the main priority being to “escape” the area. Levels of educational attainment lagged behind the regional and national average and with traditional low skills jobs fast disappearing levels of unemployment started to soar.

Enterprise and entrepreneurship was in sparse supply with the area having the lowest number of business start ups in the East of England. It seemed to be a forgotten area when it came to provision and take up of business support initiatives and few role models for people to aspire to. For those who did go on to start up in business the stock of office and workshop space was of a very low quality, old and decaying. The town was not attractive to speculative developers who could gain greater returns on their investment elsewhere.

Despite these problems it was possible to find enterprise in some unexpected areas – visionary teachers in local schools, community leaders, local councils and of course NWES. Whilst there was no grand conference held or glossy strategy written there was an informal network established between these individuals, each of whom undertook to make a difference in their specialist area.

As the local enterprise agency NWES acted as the catalyst to ensure that change occurred. Over the last few years we have helped to transform the town to the extent that unemployment levels are lower than the regional and national average, there is a greater and more diverse mix of businesses operating and we are looking to the future by establishing Lowestoft as the UK centre for renewable energy.

We have taken a business like approach to everything with sustainability being the key. By investing £3m+ of our own money we have also levered in capital funds from the local authorities and the RDA to provide a ring of managed workspace catering from light industrial requirements through to a state of the art Innovation Centre for the Renewable sector.

On their own buildings offer little, it is the activity within which determines the success or failure in reaching your objectives. By linking in with High Schools, we have started the process of enthusing young people with the desire to be enterprising, opened their eyes to the exciting opportunities in new sectors such as Renewable Energy and established a sense of pride in their town.
Within our centres we provide intensive training and 1-1 support for any aspiring entrepreneur; free of charge. Our role is clear – to be a trusted friend to anyone considering starting or growing a business. We are known as “the place to go to” and act as the enterprise hub referring clients on to the “spokes” such as Business Link, Princes Trust, Universities and colleges as appropriate.

We believe that most things can be replicated if required and this is the case with what we have achieved in Lowestoft. There are a number of base “rules” which need to be considered and met if intervention is likely to succeed:

- Managed workspace can be made to work in any size of town
- In deprived areas it will require public sector capital intervention to succeed
- Centres must be operationally in profit after 3 years
- Break even rates should be set at 70% occupancy
- “easy in, easy out” terms are what tenants want
- The building alone is not enough. It is what happens inside that encourages enterprise
- A well publicised start up training programme along with one to one support is crucial to deliver sustainable business starts
- Large public sector led “partnerships” will not achieve much. What is required is a small cadre of determined people from all sectors who will actually achieve the desired outcomes
- Do not concentrate on quantity but on quality. Penetration targets and similar are meaningless - there is no “one size fits all” provision and effort should be made to encourage sustainable start ups not some arbitrary target.
- Do not compete on price (we are the most expensive in the town but the service is the best).
- Invest in the most deprived areas as this has the maximum effect as a catalyst for further investment

The desire to regenerate through enterprise is a core element in the strategy of most areas and regions; however the rhetoric is not often transformed into reality. What has been demonstrated in Lowestoft with the aid of NWES is that vision, strategy, persistence combined with an element of stubbornness and a refusal to take “No” for an answer can make a real difference.

Lowestoft is “on the edge” both in terms of geography and in enterprise activity. We have shown how deprivation, seasonal unemployment, low investment levels and a cycle of despair can be halted and reversed. The town has not had the benefit of copious levels of government spending seen elsewhere and yet it stands as a case study of how to generate enterprise through a combination of selected capital investment combined with innovative services to stimulate entrepreneurship from disaffected pupils in schools through to growth businesses in new technology areas.