Do all the roads lead to Rome?

SAM_0070Every year, I travel to Oregon to visit my business partner to discuss cross border challenges US to Europe and the effects on business and personnel who hold office. This year’s trip coincided with Independence Day. I did not have the most of desirable starts when Springfield-OR experienced its first earthquake in 15 years, but it certainly set the day with a bump and even before we had a fireworks fest for the evenings celebrations.

Mark and I had an aperitif of fine Pinot Noir from the region. One of the amazing things I always learn from Mark is the fullness and wonders of Pinot Noir from Oregon. We started to discuss a recent project that Mark had undergone with one of his clients on employee engagement, the employee survey was particularly significant to the subject matter of employer trust, values and vision and covered many issues connected to employee satisfaction.

I questioned with Mark; is it not a company or manager’s dilemma that the organisation is not being made accountable or responsible, surely this is the route to the problem… all roads lead to Rome right?

Mark explained executive commitment aside, we frequently get asked this by managers: “How can I keep my team it engaged in the face of policies that put the company’s interests ahead of those of the employees?”

This is a very common exasperation among managers who are told to hold tight and ‘engage the troops’ in the face of blatant adversity imposed by senior management. Executives expect the managers to somehow bring team members along and even protect the integrity of the employer’s reputation while asking more from every employee on their team.

Mark and GeoffA manager cannot alter reality. If the company’s leadership team decides to push through a policy that will significantly impact the satisfaction of a large number of employees, managers cannot prevent the damage. This is especially true when the managers themselves are part of the affected group. But like all factors that are out of a manager’s immediate control, there are ways to soften the blow.

Often an organisation will work hard to attract a specific workforce only to impose policies and procedures that indicate they do not understand – or value – what really motivates that particular population. Examples might include hiring technical professionals who value autonomy and imposing onerous project-tracking processes. It would benefit the company to go back and ask, “If we are going to mandate part-time flexible shifts, what employee population would be a good fit?”

Ensuring the right job fit and aligned interests from the beginning is half the battle won.

On-boarding is a necessary first step in introducing new employees to the organisation and familiarising them with the company’s culture, practices, and values. However, for many, on-boarding remains a very paper-based procedure. Indeed the general consensus from our recent HR Transformation Forum was that organisations are striving to achieve innovative, exciting, and engaging on-boarding practices. However, with this comes the challenge of ensuring that on-boarding remains effective and valuable for all involved, from employees and managers, to the organisation itself.

Even if employees have no say in the unpopular policy decision that gets rolled out, managers can – and should – have them involved in identifying possible solutions at a local level that might alleviate the impact. If a manager has developed a strong working relationship with direct reports they will have the option of working together, to discuss the impact of the changes and how the team might adapt to these new parameters.

So what is the answer…

There is no doubt that organisations that repeatedly impose unpopular changes on their workforce will be driving down engagement over time, and there is only so much a manager can do to help individual team members remain engaged in the face of adversity. At the end of the day organisations need to carefully weigh the long-term effect a new policy will have on engagement against the short-term impact it will have on the bottom line. The trend of over-reliance on part-time staff in retail, for example, may backfire if companies don’t rethink their hiring practices and attract employees for whom part-time is not just the norm but the expectation.

According to Brian Groom, Business and Employment Editor at the Financial Times, companies need to take an approach that is “less paternalistic than it has been in the past. […] It is going to take give-and-take and both sides need this. The employees need this as well. […] On the optimistic side I think there are moves on both sides to try and make this work.” [See video here]

This may be true with regards to higher-educated staff working in ‘knowledge worker’ and expert roles. The leadership challenge of bringing along hourly workers – who often bear the brunt of organizational policies and have fewer options than highly skilled employees – remains great, especially if senior leadership is not prioritizing engagement.

The need for pragmatism: leadership ideas vs execution

the need fo rpragmatismI was recently a participant and attendee at the TechUK Annual Dinner in London when we heard a very interesting keynote from Jacquelline de Rojas on the future trends in technology, which all that was said, I was inspired by the last section of her presentation on the need for pragmatism in technology businesses.

How many times have you been in a meeting and someone says to you, “That’s a great idea, you should take the initiative and make it a reality.” What typically happens? Most of the time – not too much.  Most great ideas remain dormant because people don’t have the confidence, resources, time and/or investment to take action. And for those who take action, most are unprepared and thus find themselves spending their valuable time and money on a dream that simply goes astray.

Converting an idea into a reality (regardless of the required investment of time and money) is never an easy task. In fact, it is extremely difficult. Whether you are an entrepreneur or corporate executive, “giving ideas life” is much like giving birth to a child. You must own the responsibility regardless of the circumstances. No one will ever understand your idea or the dynamics associated with it better than you. In this regard, you are on your own and the journey will require you to learn about yourself – more than anything else will in your career.

In some regard there are too many ideas in the technology work and not enough leaders, executing real innovation, that can truly make a difference to society, community and our everyday lives.

One of most frustrating challenges facing business leaders today is closing what is commonly known as the execution gap (or sometimes the strategy gap). The execution gap is a perceived gap between a company’s strategies and expectations and its ability to meet those goals and put ideas into action.

Due to the complexity of people, businesses, and the societal constructs in which we operate, it is more difficult than it might seem at first glance to close this gap. A survey in 2014 found that 49% of business leaders perceived a gap between strategy and execution; 64% lacked confidence in their company’s ability to narrow it.

pragmaticBusiness leaders can be split into two distinct groups in terms of their strategic thinking patterns: pragmatics or idealists.

While it’s safe to assume that most people carry some pragmatic and some idealistic traits in terms of their leadership styles and strategic thinking, it’s equally safe to assume that business leaders typically lean in one direction or the other.

Pragmatic leaders focus on the practical, “how do we get this done,” side of any task, initiative or goal.  They can erroneously be viewed as negative in their approach when in fact they simply view the entire picture (roadblocks included) to get to the end result.  It’s a linear, practical way of thinking and “doing.”

Idealist leaders focus on the visionary, big ideas.  It could be argued that they focus more on the end result than the path to get there, and they can erroneously be viewed as looking through rose-colored glasses when, in fact, they simply “see” the end goal and truly believe there is a way to get there.

Which are you — a pragmatic leader or an idealist?  Or do you think you’re one of the rare few who can maintain an internal balance between the two ways of thinking and executing?

Is tech-innovation the future for luxury fashion brands?

top-10 fashion brandsIt has been a busy two decades for the UK’s fashion industry. Over the past 20 years, it has become one of the world’s most internationalised and fiercely competitive retail sectors, while structural changes have changed the way fashion retailers do business.

The number of luxury consumers worldwide has more than tripled over the past 20 years, from roughly 90 million consumers in 1995 to 330 million at the end of 2013, according to an extensive study of 10,000 luxury consumers, conducted by Bain & Company in collaboration with Redburn Partners, Europe’s largest independent equities broker, and Millward Brown, a leading consumer research agency. Their report, “Lens on the Worldwide Luxury Consumer,” was released at a press conference in Milan.

According to the report, a net total of 10 million additional consumers yearly enter the luxury market to reach an estimated 400 million luxury consumers worldwide by 2020, and an estimated 500 million luxury consumers by 2030. In its analysis of approximately 10,000 luxury consumers, the report finds significant differences within the global luxury market and its consumer base, which is shifting from its historically homogenous base of affluent consumers worldwide to a broader and highly heterogeneous class of luxury shoppers. “The race is on to capture an explosion in worldwide luxury consumer growth,” said Claudia D’Arpizio, Bain partner in Milan and lead author of the report. “But the luxury consumer of the future will become increasingly heterogeneous and luxury brands and operators need an immediate upgrade to their consumer strategies to recognize and react to this growing diversity, else risk falling behind.”

Within luxury’s current 330 million consumer base, 55% (180 million) shift between luxury and merely “premium” purchases, including products such as designer second lines, beauty products and small accessories. This group comprises approximately 10% of global spending, purchasing an average of €150 per capita annually. The remaining 45% (150 million) represent “true luxury consumers” who consistently dedicate part of their discretionary spending to personal luxury products of various natures, usage occasions and price points, and make up roughly 90% of global spending, purchasing an average of €1,250 per capita annually. Additionally, the top 10% of spenders (15 million) within this group capture over half of its spending.

The luxury market is currently in slowdown and big brands such as Prada, Chanel, Louis Vuitton, Hermes, Mulberry and Burberry are feeling the pinch. Slow economic growth and political instability in China, Russia and the Middle East has led to a clampdown in spending which in turn has had a catastrophic effect on luxury goods firms. Consultants Bain and Company were recently quoted as saying that this slowdown will put the brakes on the global luxury goods sector for some time, with many brands reigning in any rapid expansion plans.

Retail is getting complicated. It is no longer a case of simply stocking shelves with desirable goods and waiting for shoppers to flock through the doors. Rapid developments in technology are changing the game.

Modern-day retailers have to make their goods available via websites and mobile apps, run efficient e-commerce operations alongside – or instead of – bricks and mortar stores, deliver goods to the consumer’s front door and be prepared to manage a backlash on social media if things go wrong.

Consumers are becoming more demanding and less willing to tolerate failure. They want a seamless shopping experience however they interact with a retailer. They may check out a store’s products on their mobile on the bus back from work, then wish to continue on the same page on their tablet or PC at home. That requires considerable technical prowess in managing the customer journey on different devices

BurberryPersonalisation just got a whole lot smarter thanks to a new initiative from Burberry, which launching an innovation within technology as part of its London Fashion Week 2012. The British heritage brand has embedding digital chips that will unlock bespoke content in its new season’s coats and bags in a bid to entice consumers to pre-order them immediately after they hit the catwalk. RFID tags in clothing activate changing room mirrors when customers try a garment. The mirrors show a video about the making of the piece and its time on the catwalk.

As you can see from the video above, it’s designed to work with store tech only. To get the same experience on a customer’s phone requires NFC and a card that comes with the product when purchased.

I interviewed the CEO of Acumentive Limited a RFID specialist company, on the subject matter, Martin Kruse, gave his opinion; ‘RFID technologies have been around and capable for gathering ID/location much longer than people realise. For logistics/supply chain and store inventory, as it’s a technology to automate tasks and improve accuracy and productivity, its been quite readily understood and adopted as it’s a data feed into existing systems. For retailing, the limited use is more around creative new applications and ideas to use RFID – with mobile device capabilities really necessary to deliver a shopping enhancement.  It’s been possible to automatically identify a specific garment in a booth using an RFID tag for a decade, but identifying a specific mobile phone/customer and their preferences and linking in real-time store stock to recommend alternatives and additions that are actually available there and then is a more recent systems capability. And as for through-life benefits to the customer, such as building in an serialised identify for life and providing value add through the life of the product is something still to come. RFID actually is part of a suite of Auto-ID technologies – including Bluetooth tags, NFC and Locationing which together can enable a massive improvement to the shopping experience and the retailers ability to influence customer choice and satisfaction. I think the big trend is going to be doing what Acumentive has been doing for a decade now – focusing on how you get an improved, creative solution using multiple technologies working seemless together, using Bluetooth, NFC and RFID and mobile technologies together, and as this volume of data increases making sure we can see the wood for the trees and pick out the points that add value’

So with all this smart personalisation in luxury retail, technology again demonstrates how luxury consumers connect with the brand, the full range of products, with the broader fan base using social media and increase revenues by multiple sales to each consumer. The brand narrative is that consumers want to be part of and believe it’s worth paying a premium for goods. Forward thinking, luxury brands still need to establish themselves as a premium and valued brand within the luxury industry.

Can Europe learn from the US in raising the minimum wage for employees?

can europe learn from usaIn my recent trip to the US to visit my business partner, we discussed many topics around employment in the US and in particular one very interesting subject was across President Obama’s call to raise the minimum wage to $15 an hour. Was this a good idea, what are the repercussions for small businesses, and importantly was there a better way to help low-income workers?

I imagined what would happen in the UK if the UK government decided to raise the hourly rate for unskilled labour, potentially this would be a time-bomb waiting to explode for SME’s.

Certainly an increase in the minimum wage raises the income of those who are employed, but it also raises the cost of hiring unskilled labour and can potentially reduce the number of people hired by businesses today. So there are winners and losers from this policy. Those who remain employed and receive higher incomes are better off, and those who would be employed if not for the increase in the minimum wage are worse off.

Here are five facts about the minimum wage and the people who earn it:

1: “Adjusted for inflation, the US federal minimum wage peaked in 1968 at $8.54 (in 2014 dollars). Since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 8.1% of its purchasing power to inflation. The Economist recently estimated that, given how rich the U.S. is and the pattern among other advanced economies in the Organization for Economic Cooperation and Development, “one would expect America…to pay a minimum wage around $12 an hour.”

2: “Nearly half (48.2%) of the 3 million hourly workers who were at or below the federal minimum in 2014 were ages 16 to 24. An additional 22.4% are ages 25 to 34, according to the Bureau of Labour Statistics; both shares have stayed more or less constant over the past decade. That 3 million represents about 2.3% of all wage and salary workers. (See more about the demographics of minimum-wage workers.) States with minimum wage higher than federal minimum wage.”

3: “Twenty-nine states, plus the District of Columbia and nearly two dozen cities and counties, have set their own, higher minimums. State hourly minimums range from $7.50 in Arkansas, Maine and New Mexico to $9.47 in Washington state, according to the National Conference of State Legislatures. Together, these states include 61% of the nation’s working-age (16 and over) population, according to our analysis of U.S. Census Bureau data. Among the cities that have enacted even higher local minimums are San Francisco ($15 by 2018), Seattle ($15 by 2021), Chicago ($13 by 2019) and Washington, D.C. ($11.50 by 2016), according to the National Employment Law Project.”

4: “About 20.6 million people (or 30% of all hourly, non-self-employed workers 18 and older) are “near-minimum-wage” workers. We analyzed public-use microdata from the Current Population Survey (the same monthly survey that underpins the BLS’s wage and employment reports), and came up with that estimate of the total number of “near-minimum” U.S. workers – those who make more than the minimum wage in their state but less than $10.10 an hour, and therefore also would benefit if the federal minimum is raised to that amount. The near-minimum-wage workers are young (just under half are 30 or younger), mostly white (76%), and more likely to be female (54%) than male (46%). A majority (56%) have no more than a high-school education.”

5: “The restaurant/food service industry is the single biggest employer of near-minimum-wage workers. Our analysis also found that 3.75 million people making near-minimum wages (about 18% of the total) worked in that industry. Among near-minimum workers aged 30 and younger, about 2.5 million (or nearly a quarter of all near-minimum workers in that age bracket) work in restaurants or other food-service industries. But because many of those workers presumably are tipped, their actual gross pay may be above $10.10 an hour. (Federal law, as well as wage laws in many states, allow tipped employees to be paid less as long as “tip credits” bring their pay up to at least the applicable minimum.)”

Alternative history can make for great suspense fiction. Imagine, for instance, what would have happened had the Nazis successfully invaded England in 1940? But if contemplating “what might have been” in fiction is fascinating, analysing “what might come to pass” in real life can be paralyzing – and dangerous. Just ask any of the cities that have passed their own version of minimum wage hikes.

As other cities and companies consider similar moves the big question is whether these new rules hurt or help the local economy – and the very people the legislators set out to assist. So far the answer depends on who you ask.

Some businesses argue that it will necessarily cost jobs: that small businesses, in particular, will be unable to afford to pay employees more and either will be forced to lay off staff or will have to close their doors entirely, and that consumers will suffer, as prices rise. There is plenty of anecdotal evidence that this occurs, as small business owners tell their stories.

Not all businesses will find this transition easy or painless. But if a small business’s profit margin is so razor-thin that it can’t pay its employees enough to allow them to live above the poverty line if they are trying to support even a single child, then perhaps that company might want to reconsider its business model?

Do start-up businesses spend enough time in creativity and innovation?

startup bizzEvery now and then, I attend a management conference. Usually what I hear is the following: the current environment is characterized by rapid technological change, shortening product life cycles and globalising. All organisations need to adapt to this dynamic environment and be more creative and innovative to survive, compete, grow and lead. To beat the new entrants, aka the startups, innovation is the key! Then startups enter stage. Wow, is the general word I hear from the audience, when the startup guy, usually in jeans and beard, explains his success story.

So can we innovate more, is there the capacity in start-up businesses?

Certainly the engagement and involvement of employees can lead to more commitment from them because their thoughts, ideas and projects can have an impact on the organisation. We can speak of newly developed organisational culture; vision, mission, values and a behavior tone of voice can shift the organisation in new directions.

What are the problems associated to innovation and creativity?

The first major issue is an increased level of regulation and policy to trade.

Economists believe that regulation hurts small business in four ways. First, as Nicole and Mark Crain of Lafayette University explain, regulatory compliance exerts a disproportionately large burden on small companies because the fixed costs of adhering to rules can be spread out over more revenue in large firms than in small ones. In the US, Crain and Crain estimated the per employee cost of complying with Federal regulations at $10,585 for businesses with fewer than 20 employees but only $7,755 for businesses with more than 499 workers.

Small business owners are increasingly frustrated by government regulation, which they say has become a major problem in recent years. Twenty-two percent of small business owners surveyed to the National Federation of Independent Business’s November member survey say that governmental regulation and red tape is the most important issue that they face today, just one percentage point fewer than the fraction that identified taxes the number one problem.

Now researchers at a variety of think tanks are beginning to believe that government regulation is doing more than causing entrepreneurs to gripe. They are concerned that rising regulation could be keeping would-be entrepreneurs from starting companies. Anthony Kim of the Heritage Foundation explains, the rising cost of complying with regulations makes marginal entrepreneurial endeavors uneconomical, which also causes the start-up rate to decline.

How can a start-up free itself of time to innovate and what does this mean for collaborative innovation?

When you want to enhance the innovation level in the organisation and create exceptional results, you need to invite your employees and your team to create white boarding to effect a kaisen, a Japanese term for continuous improvement, this will start tapping into the brainwork of product development sales and marketing, there is no point designing an innovative product if you have no demand generation.

Here are 3 tips for innovating in the team:

  1. Innovation is not the same as invention.

Many people conflate innovating with inventing. While there are similarities, we think of innovation as a way to find more appealing ways to do or make things that already exist, and invention as the creation of something that never existed before.

  1. Always have a head of innovation.

Nearly all companies these days have a head of innovation, although this can be a co-founder or CEO. A business that values innovation needs to have a chief innovation officer (or at least a leading person of influence tasked with that responsibility) who not only drives the innovation initiatives of the company but also works to embed the paradigm of innovation into the company’s vision and culture.

  1. Customers must drive innovation.

Innovation should drive company strategy, customers should drive innovation and provoke thinking. Companies must innovate in ways that make sense to their corporate missions and values; if they break their brand promise to consumers, they can easily lose credibility and trust.

Always remember innovation evokes constant change and driving solutions. The more complex the world becomes, the more problems there is to solve.

The negatives are that start-ups have a tendency to run out of cash. For every founder that manages to bootstrap a startup, there are dozens, maybe hundreds that do run out of cash for any number of reasons: they do not want to give up equity, they do not budget properly, they do not plan for how long it takes to raise rounds of funding, their burn rate is too high, or some combination of the aforementioned.

If gaps in the strategy fail, then the team does not have what it takes. Some founders just can not get along. Others fall apart when the initial strategy fails, as it often does. Still others are out to make a quick buck and are not committed to working day and night over the long haul. Any VC or investment house will tell you, a big part of what they invest in is the management team and not just a great idea.

Perhaps the most important tip I can give you is this: If your startup fails, it is worth spending time to understand what went wrong. That’s the only way you’re going to improve the odds of making it next time. And, I am sure there will be a next time for you. Hopefully when you start planning and exercise the business strategy you will see the paradigm between a good idea and commercial reality and importantly what’s needed to be implemented to drive business growth and success.