It’s thought that the Chinese phrase ‘may you live in interesting times’ is a translation of a curse, rather than what most think it is, a good wish for happy times.
I’m sure there are a good many people thinking this way right at this moment.
Not even the so-called experts seem to really know where this will all end up, when we reach the bottom, what it’ll look like, or how it will effect us all.
Or at least if they do, they’re not letting on.
So many of us, as confirmed by the ICAEW’s latest research into businesses’ response to the Eurozone crisis – click here – are sitting on our hands, stuck like rabbits in the car headlights, paralysed…
Where have we seen this before?
Private investors in the stock and BTL markets have been badly hurt by adopting a policy of buy, hold and pray; clinging on to unrealistic confidence they’ve gained from ‘perceived wisdom’ that diversifying and following the herd is somehow safer; hoping that they can react quickly as and when they notice ‘permanent trends’ or hoping that things will bounce back quickly.
It’s human nature to hope for the best, we’re encouraged by experts of various hues to ‘be more resilient’ – it’s why there are so many experts out there offering to help us be so?
The point is it’s what people want to hear.
But truly professional investors don’t act like individual ‘hobby’ or semi-serious investors. They remain ever vigilant; prepare for all eventualities; anticipate and make bold moves early; recognise the fundamentals; take control; accept the pain early and move on. They don’t kid themselves by tinkering at the edges, they don’t hold and pray – it’s no accident that in the long term they always come out on top. Sure, maybe not the optimum result but something they’ll accept. For them change and uncertainty is not a ‘negative’ thing, it’s a catalyst for doing something new or differently – they grab hold of profitable opportunities others just don’t notice. Partly it’s their attitude, partly their skill levels, partly their team mentality. You see lone wolfs cannot compete in this unforgiving, fast-moving, world, unless they collaborate. Collaboration, and not competition, is the new name of the game. Business, as with investing, is a now whole team game, where cheerleaders not only don’t provide any entertainment, they often do a great deal of harm.
What really worries me from what I’m seeing, and which has been confirmed by the ICAEW research, is that hope appears to be the main driver behind most business owners’ self protection strategies. That old, no longer relevant, perceived wisdom is still dictating the key decisions. That many business owners remain firmly in their comfort zone – even though things are not that comfortable there – thinking that it’s OK to follow the herd, even though it’s stopped in its tracks.
There are now some thought provoking books on how we’ve got to where we are generally in the economy, and what we could be doing to make the best of things – you’ll find some on my Linkedin reading page. Unfortunately there’s no fail-safe route.
It’s clear that us human beings need two things to enable us to make big, bold decisions – Education and Confidence.
But after we’ve left our formal education, we neglect non-technical continuing professional development and focus instead on the technical stuff – just look at the lawyers who only have to do a handful of hours of ‘soft skills’ training a year, or my profession of insolvency, where practitioners don’t seem to do any! It’s no wonder these professions are struggling! The same’s happening in business – business owners tend to look at improving their staff’s skill levels before they’ll work on their own! Improving our technical knowledge without the softer skills being honed to perfection is like slapping lipstick on a pig.
So who’s educating your clients, if not you?
Who’s giving them the skills, confidence and support they so badly need to make those big, bold decisions? To adapt? To rebuild after a major setback? Even to throw in the towel on something that isn’t working?
You see, none of our formal education prepared us for where we are today. It’s not entirely the education sector’s fault – they only teach the technical aspects or theory of ‘the job’ or being in business, some things just have to be learned in the real world. It’s like driving a car, you can’t learn it by reading a book, but once learnt driving becomes second nature and the skills are transferable, you can drive anywhere.
As an insolvency practitioner I have to reconcile myself to the fact that I don’t have the time to help everyone – yes, some older generation firms of accountants, lawyers and other professionals, and some clients, are past help. They’re dying a death of a thousand cuts, people going down together on the Titanic just didn’t see the angle of decline until it was too late. This may sound incredibly harsh, but it’s true. And everyone has a client or two who are a danger to themselves and others around them!
I choose who to devote my time to supporting, and how – I’ve reached that point in my life.
Do you do the same?
If not, why not?
Who are your category ‘A’ and ‘B’ clients, who are more deserving of your time? – click here for a potted summary of Paddi Lund’s story – an Australian dentist who sorted out his practice and his life – there are lessons we all could learn here.
And who are your ‘C’ clients, who frankly you should dump so that you can better support your more deserving clients? Many people who support small businesses say they have time problems – what would eliminating them do for you, your business and your better clients?
You see, I write this having recently returned from visiting a company that hasn’t made a profit for four years. My message was ‘it’s time to stop digging’. Over time, false hope gained by poor financial education and a fudging of the figures, and an unwillingness to face reality dug the client into such a hole that there’s now no chance of rebuilding. The client’s been let down by his advisers – was it their pursuit of recurring fees or ignorance? – who knows?
So let’s explore this even further, what’s this picture about?
It’s from an article I wrote for the local press – it’s an accountant, who is kidding himself he’s providing good quality support to his client. The client is the rally car driver. The accountant is the co-driver, sitting on the spoiler, looking at where they’ve been rather than where they’re going.
It looks ridiculous, doesn’t it? Especially when the car’s moving so quickly. There’s a mismatch between what the accountant is providing and what the client really needs. Sure, sometimes clients don’t always know what they need. Some won’t even pay for what they need. It goes back to the question of identifying who to help and who not. Could it be part of the reason your clients don’t want to pay your fees?
These principles apply equally to lawyers. Consultants. Even to your clients, and their clients/customers. Whether you or they provide B-t0-B or B-to-C. In fact forget the old 80-20 rule, it’s now 90-10.
Here are a final few thoughts for you on where I think there are debates to be had, within ourselves and over the way we support our clients and customers. If you’d like to share any of your thoughts with me on these or anything else, I’d really appreciate it as I think the profession, mine included, and others who support British businesses are at a crossroads.
- The game of hide and seek is over, there’s nowhere else to hide. Deferring major decisions amplifies the pain felt later on. Sure, a decision made, action taken may be proven to be ‘wrong’ by later events and may end in pain, even disaster, but that’s life. Attitudes are key – a willingness to make mistakes, the determination to learn from one’s mistakes and adapt and rebuild afresh are far more relevant to today’s world than mere ‘resilience’. After all, isn’t resilience against Darwin’s law of it’s only the most adaptable rather than the strongest who survive?
- Any business is only as strong as the weakest part. More often than not it’s the owner. Occasionally it’s the adviser, the accountant, the lawyer, the consultant.
- Jumping from burning bridges is far safer than trying to cross flimsy ropewalks.
- There are some businesses that simply shouldn’t exist, that only do so because the banks were foolish enough, in a boom that won’t return, to provide money to naive employees turned business owners. For them the ‘silly money’ gravy train has pulled into the sidings, the dream has become a nightmare. Much of the pain that such owners are now suffering could have been avoided had the professionals stepped up to the mark early. Some are still nowhere near the mark. This represents both an opportunity and a threat. Only those advisers who challenge, inspire, communicate well, create open minds, and encourage will prosper – others, who provide mere process or kind words will die. And because like often attracts like, their deteriorating client base and their business (often their only pension fund) will be worthless.
- Who are accountants kidding when they talk of being ‘business advisers’ – themselves or their clients? The same for insolvency practitioners who call them ‘business turnaround experts’? Is the best both can hope for being ‘facilitators’ or a ‘guiding hand’?
Business has moved on from the old mentality of ‘stand on your own two feet and fight or be killed’. Globalisation, relentless technological progress, the speeding up of everything, and the collapse of the West’s industrial power heralded the end of the industrial age and the start of a new ‘information age’. As a country, as individuals, we’ve not coped particularly well with this. Attitudes and processes haven’t, for many people, changed – stuck in a bygone era, they’re trying to survive by working ever harder at the same old things, longing that somehow things will return to ‘normal’. And all walks of life are afflicted – the professions, small businesses, government. And it’s not going to happen.
Our real problem in the Black Country is that it’s far more of a problem here than in many other parts of the country. Sure, there’s still hope, but it has to be turned into reality by concrete action.
The time’s coming when there will be no alternative but for major, concrete, action.