The Olympic Torch Relay – a beacon of hope for the UK economy

In the midst of European financial meltdown and petty national party politics the chattering classes in the UK are focussed on the parlous state of the economy and the usual Westminster intrigue. In doing so, they are missing something incredibly significant that is going on every day in this country at the moment. I am not talking about Euro 2012 or the Leveson Enquiry; I am talking about the Olympic Torch Relay that is currently making its way around the UK ahead of the 2012 Olympics in July. 

Billed as 70 Days, 8,000 runners, 8,000 miles this meticulously organised journey around the whole country is far more than a means of conveying a flame to the Olympic Stadium in London for the opening ceremony. It is about what makes this country great and what gives me hope for the future, despite all the economic and political doom and gloom.

For anyone watching the live stream of the relay, and it does become addictive viewing so be warned, it not only provides an amazing social history of the UK in 2012 (I hope someone is using it to record this country at this point in its history for posterity), but it shows the wonderful community spirit that still exists in these islands. 

No matter what the weather, and this summer has been one of the wettest on record so far, thousands upon thousands of people have lined the streets to watch the torch pass through their communities. Flags have been waved, children have cheered, and people have smiled and felt a part of this event in a way that the doubters would never have believed. They may not all be supporters of the Olympics but they are supporters of their local towns and villages and have taken this opportunity to show that to the world.

There is a sense of pride in the air that I haven’t felt for some time. It has been helped by the Queen’s Diamond Jubilee of course, but the main driver is the Torch Relay which began on May 19^th and which has so far snaked its way around South West England, Wales, parts of North West England, Northern Ireland and Scotland, and is currently heading for my home town of Newcastle upon Tyne on its journey South. For some reason, this relay has struck a chord with the public who are quietly supporting it in huge numbers.

Credit must go to the organisers who have battled floods and mechanical breakdown to ensure that the timetable has largely been adhered to, to the police who have joined in the spirit of the occasion with such a light touch, and to the torch bearers who have evidently enjoyed their moment of recognition for good deeds well done. But the real stars of the show are the general public whose orderliness and enthusiasm has shone out brilliantly. It is these people who will ensure the future of this country, they just need a cause that means something to them. 

For us to emerge from our current economic problems it will take leadership that is relevant to the people who live in the villages and towns and cities of this country, not just to the self serving needs of politicians. It would be very sad in future years to look back on 2012 and see footage of this amazing torch relay and remember it only as a forerunner to the Olympic Games and not as the beacon that relit our ailing economy. I believe the opportunity to spark that recovery is there now and the people will flock to support it too.

Does anyone in a position of power and authority have the nous to recognise this opportunity, the intuition to know how to capitalise on it and the guts to actually make it happen? Only time will tell but I am not so sure.

The ‘internet economy’ + London 2012 Olympics = a unique opportunity for UK business recovery

Under the weather

Do you remember the old adage, “When America sneezes, Britain catches a cold”? In the time when the US was the only economic superpower in the world and drove the global economy forward single handed, then actions taken in America would indeed be transmitted across the Atlantic and Britain would inevitably feel the effects. In these post sub-prime-fallout days with the European Union as Britain’s premier trading partner and China sharing global dominance with the US, it rather seems that we in the UK are susceptible to catching every bug on the go. 

Such is the state of the global economy in the 21^st Century. Governments now have less and less freedom to make fiscal decisions for ideological reasons as they are swept along (indeed, some may say, swept away) by economic forces beyond their current control.

In such turbulent times, where government debt levels grab the headlines and citizens across Europe are voting against unpopular austerity measures like turkeys voting against Christmas, can businesses keep their heads below the macroeconomic parapet and use recession to their advantage? And what can the UK government actually do to make a real impact?

Defensive big businesses

In spite of (or perhaps because of) the devastation in the banking sector over the past 5 years, our largest businesses have been building strength in their balance sheets as a buffer against the storm.  They have cash reserves today that are typically much higher than they were in the recession of the early 1990’s but so far these British businesses have been reluctant to use it to stimulate economic growth.

It is the usual vicious cycle of consumers lacking the confidence to spend because of the uncertainty of their personal situations which causes business to lack the confidence to invest in products and services for their consumers. They don’t know whether to cut costs and ride out the storm, to invest now to gain competitor advantage when growth does return or to do both at the same time.  

Historically, big businesses were more typically national than international in their make-up and could take decisions based on serving local markets and satisfying local shareholders. They could take more measured risks and a longer view of future success. 

Today, there are just too many global factors to take into account to allow a typical board the freedom to jump too soon. For large businesses, and indeed for our hamstrung national governments, both so often the drivers of economic growth, there is a new conservatism, a new global reality, a new reluctance to grow.

The depths of recession

Medium sized enterprises, especially those in the traditional ‘high street’ retail sector have been suffering and failing at an alarming rate. Pressured by their high premises costs, mounting debts and falling sales they have been forced to discount heavily, close shops, shed staff and watch their share prices tumble. Some are now paying the ultimate price and entering administration. Although many could see the change in consumer spending patterns happening, not all were able to change their outmoded business models in time to take any advantage. 

Smaller entrepreneurial businesses on the other hand work differently. Many carry fewer costs, have more dynamic trading models and were faster to respond to recession in the first place. Some have quickly re-cut their cloth and are now best placed to spot and exploit the first green shoots of recovery. But with growing numbers of unemployed, continuing uncertainty in the markets and a shrinking public sector any recovery is likely to be slow. But when it does happen it is likely to happen among small, grass-roots businesses first.

Not all Doom and Gloom

Not everything stagnates in a recession. UK consumer behaviour has been changing fundamentally. Back in 2010, the Boston Consulting Group said that the ‘internet economy’ in the UK was worth £121bn and formed a bigger contribution to GDP than that of any other G20 nation. 
 
Even today it is predicted to grow at a rate of 11% per year until 2016. British consumers have embraced the web and are starting to embrace mobile technology with equal passion. This is reflected in the performance of businesses like Apple and Samsung who are selling mobile internet technology devices into the UK like hot cakes.

Government as enabler

To lift Britain out of our recession what is needed is encouragement and confidence. Encouragement must come from the government, which at a time of enormous national debt should get out of the ‘doom and gloom’ game and get into the ‘positive enablement’ game. There is much talk about reducing red tape for smaller businesses to encourage them to employ more people more flexibly but this is just tinkering about at the edges. 

One significant way to encourage optimism, and consumer demand, would be to recognise the shift in consumer behaviour and widen the conduit to the internet economy for British consumers. At the moment, limited internet access and slow data transmission rates are stifling the growth of mobile commerce and delaying the speed to market for many new technology businesses in the UK. 

4G will drive growth, why delay?

The government should be actively promoting 4G rather than endlessly talking about it. It needs to cut through the internecine strife among the mobile operators and compel the industry regulator, Ofcom, to speed up the introduction of 4G across the country. 

This will not only increase consumer confidence but it will also give huge encouragement to those key technology businesses in UK locations like Cambridge and the so-called Silicon Roundabout in London that rely on rapid, 'available anywhere' data access and transmission for their products to become successful. 

Will confidence return this year?

Confidence on the other hand is a strange, elusive creature. It is difficult to assess on a national scale but when national confidence is low everyone knows it. It can be sparked by the smallest of events but then needs to be supported and grown by concerted action. 

And in 2012, here in the UK, we have the opportunity to spark new confidence in the future. For once, the eyes of the world will be on this country as we celebrate Queen Elizabeth’s Diamond Jubilee and welcome the athletes of the world to the Olympic Games. 

In the scale of world economics these are both small events but they provide an opportunity to spark enthusiasm, restore a sense of national pride and instil confidence in this country’s future. It is a once in a lifetime chance to start to lift the nation out of recession and lead the world towards recovery. All it needs is the action to ensure that the flame burns for much longer than the Olympic torch.

After all, more confidence leads to more spending leads to more employment leads to more tax income leads to reduced national debt leads to more confidence; the virtuous cycle is born. And what a true Olympic legacy that would be for the people of Britain.

Our future can be bright

So for businesses the current economic climate remains a significant challenge. But it also presents a huge opportunity to establish a business paradigm to respond to, and indeed encourage, the change in behaviour of UK consumers. Time spent getting this right now will be rewarded by huge competitive advantage in the future. And for those entrepreneurs with great ideas for new businesses, it is worth reflecting that the biggest businesses of the next decade may not even be trading yet. 

Above all, there is no reason why those businesses shouldn’t be British. We still have the ambition, drive, skills and tenacity that created our greatest historical institutions. We just need encouragement and confidence in ourselves, and the steady nerve to capitalise on both. 

2012 can be the start of our bright new future. I wonder if we will make the most of this unique opportunity.

Customer Service excellence– right first time, every time

The customer is now emperor

We all have horror stories to tell about hanging on the phone for ages listening to some terrible ‘muzak’ version of Vivaldi’s Four Seasons while waiting for a customer services advisor to sort out a problem. And how often is that wait in vain? How often is the problem resolved there and then? How often do they actively come back to you afterwards to check on your satisfaction or the progress of a fix? In my experience, excellent customer service is still as rare as hen’s teeth!

Maybe it is just me though. I have high expectations. I expect that things will work first time and if they don’t I expect to have them fixed immediately. But when I speak to friends they too are becoming less and less prepared to accept shoddy service from organisations that should know better. 

The rise of the interactive internet through Facebook and Twitter has encouraged consumers to shout about their complaints in a very public way. The more that do so, the more likely a company is to improve its goods and services for everyone. If in the old pre-internet days the ‘customer was king’ now in the days of the interactive web, surely ‘the customer is emperor’.

Improvements are out there

A couple of my recent examples of good and bad customer service spring to mind. I recently wanted to open a saving account and following internet research selected an account that required me to visit a bank’s branch in person. Not ideal but I accepted the reasons given. I didn’t make an appointment in advance but just turned up on the off chance that I could see someone to resolve my need. 

Of course, all the staff were busy with full diaries but one guy checked his calendar and said he would fit me in there and then without impacting his other appointments. Fifteen minutes later and my account was opened and my assets transferred. Now the bank in questions has faced criticism in the past for the quality of its customer service but on this occasion Santander should take a bow. I left a happy customer and am now writing about my positive experience.

Still wrong second time around

On the other hand, my recent experience of Toshiba UK’s customer services is quite the opposite. My laptop is still under warranty and this warranty covers the power adaptor which failed recently. Having spent 30 minutes on the phone trying to get the technical support staff to recognise that I had a valid extended warranty at all, they finally raised an order for a replacement adaptor to be sent to me in 2-5 working days. I changed appointments to ensure I would be around for delivery.

 

At the end of this period I still hadn’t received the adaptor so I called back – another 25 minutes on the phone – to find out that an internal problem with their ordering system had meant that my order hadn’t been placed at all. Naturally, I raised my concerns but there was apparently nothing that could be done. They could re-raise the order but couldn’t expedite the delivery or offer any compensation for their error and my wasted time. So I was left waiting another 2-5 working days for my adaptor. 

To be fair to Toshiba, they did offer to email me an update of my new order with a tracking reference but the part, which did eventually arrive some 10 days after my original call, was delivered to the wrong address! So despite all their extra efforts they couldn’t even get it right second time around; hardly what I would call good customer service. 

This experience certainly leaves a sour taste in my mouth, encourages me to write this negative blog about a business that should know better and will make me think long and hard before ever buying from Toshiba again.

Constrained by systems and procedures

In thinking about these experiences, it strikes me that where many businesses are going wrong is that they see customer service as an add-on, as an additional cost, as a reduction on the profit they made from selling the item in the first place. It is something to be tolerated and monitored and minimised. It is a necessary evil that needs systems and procedures to control it.

In none of my experiences of customer services are the people at the end of the phone at fault. They are trying their best, I am sure, to help me but they are constrained by the lack of understanding of the customer’s perspective in those systems and procedures that they are obliged to work with. They are often not empowered to resolve the problem there and then but rely on other people or processes to swing into action. These, as we have seen, can be unreliable and time consuming and completely customer unfriendly.

Excellence as a differentiator

Customer service should be seen as a positive differentiator, part of the sales and marketing process and a fundamental asset of the business. Assets must be invested in if a positive return is to be achieved and customer service is no different. A good experience of customer service results in a happy customer who will be an advocate for the business. A bad example will not only mean a potentially lost customer but also a motivated antagonist who is likely to tell friends and colleagues of their bad experience. 

The problem is that all businesses know that this is fundamentally true. All talk the talk but few of them really commit to doing something about it. Generally speaking, call centres that measure the throughput of calls and monitor the time taken on calls rather than measure the satisfaction of customers are indicative of this ‘lip service’ approach.

Right first time, every time

Of course, if things were right first time then there wouldn’t be a need for as much support to fix subsequent problems. This would allow the customer service team to focus on fewer calls, too. The best businesses focus on ‘right first time’ and then measure and analyse the nature of the calls into call centres and focus their resources on resolving the majority there and then.  They think like customers and understand the power of the satisfied consumer.

This is something for start-ups and small businesses in particular to think about. Put the right attitude towards your customers at the heart of everything you do from day one. Build your products and services around delighting your customers and they will buy and buy again from you. And keep working at it. Getting it right from day one and keeping it right on day 1001 are very different things. 

If you do it right consistently and systematically you will see huge competitive advantage over those small and not so small businesses that are still getting it so wrong. Time taken getting your product or service ‘right first time’ will pay real dividends in the future and time taken to resolve customer problems quickly and fully will ensure a loyal customer base. 

It is all just a matter of common sense, really. Sadly, from the consumer’s perspective, the opportunity to be better than the rest is still there. I would like to think that this opportunity will be short lived as businesses truly realise the negative cost of poor customer service. But in truth, I am just not so sure.

Intellectual Property – the solid foundation for investable businesses

What is Intellectual Property?

Intellectual Property (IP) is a bit of a mine field. As a term, it encompasses a wide range of rights recognised by various laws in various geographies covering legal copyright, trademarks and patents among others. As a concept, it is hotly disputed as to whether it contributes positively to innovation or restricts it. As a legal framework, it is so varied on an international basis that trade disputes and legal challenges are the bread and butter of an army of lawyers.  As a practical tool for protecting the ideas of inventors, it is complex and can often seem confusing, but it remains the best method we have today for protecting the rights of the inventor or author to their creations.

Patent assertion

The importance of securing the rights of a business to its IP can be seen in the plethora of law suits active around the globe. Whether it is Apple and Motorola in Germany or Oracle and Google in the USA, ‘patent assertion’ is the order of the day. And the value of these patents is on the increase, too. Microsoft is reported to be planning to buy patents from AOL for more than $1 billion. There are even companies in existence today whose sole function is to hoover up the patents of other businesses with a view to selling them on for profit.

The wind-up radio

It is not just technology giants who are concerned about the security of their IP. For a small business looking to create new solutions to old problems, ‘the idea’ itself is often the starting point. 

I recently attended a talk by Trevor Baylis, the inventor of the wind-up radio and a strong advocate for teaching Intellectual Property within the national curriculum in schools. When he heard that the spread of AIDS in Africa could be combated by the improved education of people if only they had access to radios which, because of the lack of electricity and the cost of batteries, were not available, he decided to solve the problem. 

He had the idea of producing a wind-up radio that would be cheap enough for widespread use in Africa. Trevor is an engineer and used his domain knowledge to build prototypes and prove his design. The next thing he did was to patent his idea. In his talk, he said that the greatest day of his life was meeting Nelson Mandela in South Africa, part of the recognition that he got from helping to save countless lives. All possible because he secured the rights to his invention. 

The importance of the investor

However, Trevor also told of the obstacles he faced in getting recognition for his idea and the problems of making it happen. It wasn’t until some eagle-eyed investors recognised the opportunity and established the means to generate a commercial model that the wind-up radio was successful.

It often takes the genius of the original idea together with the money of savvy investors to bring innovations to market. But those investors in the wind-up radio were only interested in committing their money when they knew that the idea was protected. Not only did the patent give protection to Trevor Baylis, it also gave protection to the investors.

A solid foundation for small business success

Small businesses can learn from this example. When the product of a new company is ‘new ideas based’ and has clear market potential, it is essential that the foundations of that business are built upon the rock of Intellectual Property protection. 

Without it, it will be very difficult for that business to gain the support of the investment community. With it, alongside strong management and solid profit forecasts, the investor can take heart that the opportunity has a much higher chance of exploiting competitive advantage. 

And, as we are seeing in the recent spate of patent trading, there may be hidden value in the patent itself.