Keep browsing shows on Inside Finance TV for more expert discussion on business investment and good governance.
Inside Finance is very interested in business strategy models and the future business world. Browse our video player for related content.
Inside Finance will continue to bring you inspirational success stories from those with entrepreneurial spirit.
For more about business communication and related issues, browse all Inside Finance videos.
Interested in informed financial planning? Why not explore more TV shows on Inside Finance?
Keep browsing Inside Finance TV for more expert insight into strategy development processes. Why not watch the full briefing From the top - Being an effective board director
Continue browsing Inside Finance for more great TV shows on merger and acquisition deals.
The attitude to risk form those in high risk environments is to exercise caution as Michael Pagliari explains in this TV show.
I actually have a few clients that have done exactly that and I’ve actually found that there I’m on the more cautious of our clients. So their business risk, if you like, is very high and they’re well aware of it and the last thing they want to do is suffer losses under their financial asset portfolio, so I’ve tended to find those people the most cautious of all the clients that I manage money for. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.Keep visiting Inside Finance for more great videos on attitudes to risk and similar subjects.
Keep watching Inside Finance for more expert insight into good business strategy models and similar subjects.
Business assets that are allocated correctly can potentially contribute 90% return to a portfolio, as Michael Pagliari discusses in this TV show.
One of my pet hates is seeing, you know, proposals sent out to clients that are very deterministic in nature, in other words coming up with a particular solution to a client’s investment problems. I think, you know, it’s much more complex than that and really the whole question about risk and asset allocation is absolutely key, and I think there have been plenty of studies which have been done which show that asset allocation, good asset allocation, contributes about 90% of the total return to a portfolio. So it’s really, really important that a lot of time is spent at the beginning and during the course of a relationship focusing on getting that asset allocation as good as you possibly can.
Keep browsing Inside Finance for more expert insight into investment processes, business risk, and dealing with business assets.
If you are running a business or just want to know more about informed financial planning, keep and eye out for similar shows on Inside Finance.
Inside Finance is following the issues that make a difference to business. We will bring you more TV shows discussing business risk and related subjects.
There are more business growth TV shows on Inside Finance.
The business development role and other key factors of our changing economy will be discussed in further Inside Finance TV shows.
If you enjoyed this video and want to hear more about investing in technology infrastructure, please browse more TV shows on Inside Finance.
Merger business advantage should be the first consideration when joining with another company. Giles Murphy of Smith & Williamson looks at quantifying the business benefits of a potential merger.
I think the question of what are the advantages of a merger is actually the first question we will often raise with clients when we’re talking to them because quite often people will end up in conversations with other firms simply because there is a relationship there and somebody believed it was a good idea.
Bearing in mind the pitfalls and the downsides, and the costs involved in a merger, I think it’s very important that right up front people fully understand what the benefits are and can articulate them, and actually also put a monetary sum against them so they can actually quantify what the opportunity is.
There are more TV shows with Giles Murphy on Inside Finance TV and plenty more discussion about merger business advantage for you to explore.
If you found this video about restructuring in the finance industry interesting, why not follow @InsideFinanceTV on Twitter?
Digital retail is the future, and retailers have to embrace it says Henderson's Alice Breheny in this Inside Finance TV interview.
Oh, I mean the ramifications, it’s terrible really, I mean I think, you know, if you don’t embrace it then you know, you’re on a slippery slope really into decline, whether you’re a retailer or a property owner.
I think you can defend yourself against it and keep your head above water.
But those that are going to thrive are those that really embrace it and seek every opportunity to exploit it.
But you know, we certainly see locations becoming unviable eventually, you know, there’ll be very little reason for people to visit them.
Retailers that, if they don’t up their game, you know, the competition out there is really fierce at the moment and certain asset types that just won’t be relevant in the future.
Inside Finance will continue to look at digital retail and the affects of digital technology on other industries.
UK economic growth is not returning as quickly as growth in emerging markets like Asia, as Roger Bootle discusses in this TV show
Well, the essential problem since the financial crash of 2008, is that the countries of the developed West haven’t really recovered from it.
It’s a different story in the emerging market world, particularly Asia, those countries have just soared ahead, dramatic rises in output since the financial crash of 2008.
In many countries in the west we still haven’t got back to the level we were at in 2008. Now, that’s true of Britain for instance, output here is around about four percent lower than it was at the beginning of 2008.
I think the worrying thing at the moment is the weakness of the financial system and its dependence on growth, without there being much sign of decent growth on the horizon.
As and when growth appears then the very serious financial problems that do exist in the world, we can overcome them. But if we don’t get a return to decent rates of economic growth then we’ll be in serious trouble.
______________________________________________________________________________________Inside Finance TV will continue to look at how changes in UK economic growth will affect business.
Ralph Jenson talks about various economies through which we’ve transitioned, it’s a very general, very broad framework but it’s really good to help us understand our current context, ‘cause leadership is always context-specific. So, very quickly, he talks about the hunter-gatherer era, it was an economy in which there was competitive advantage that was forged through a sense of focus.
The interesting thing in the story is that technology is the disruption, so technology changes the rules of the game. In this particular case the technology that did that, the plough, the ability to harness animals, so we moved into the agrarian society. From there we moved into the industrial era. So each of these are economies in which we look at what created a competitive advantage.
The industrial era is interesting because competitive advantage in this particular set of circumstances was created through business efficiencies, that’s where the science of management was birthed. Frederick Taylor and others – if you can’t measure it, you can’t manage it. If it isn’t broken, don’t fix it. So the legacy of that era remains today.
I still meet companies and leaders who think that their competitive advantage will be forged through greater business efficiency. Business efficiency is a hygiene factor now. So, we moved from then to what was called the information-based economy, where it was how we utilised data and from there we moved into the connection economy.
There are more videos discussing the digital connection economy on Inside Finance.
The first step is to work with an organisation like Smith & Williamson to really understand your needs and requirements around FRS 102.
So this is when we would bring our people to talk to you and your key finance function people just to get a sense of what needs to be done.
From that we would put together a bespoke proposal that addresses the key things that are going to be important to your organisation as you move forward with designing the solution and assessing the options and implementing the changes.
We’ve developed a really client friendly simple way of looking at FRS 102 and how to implement it. It’s a simple four phased approach.
We start off phase one, which is assessing the options. So we look at what the potential impact of FRS 102 is for your organisation, we do a readiness assessment, an impact assessment, look at some of the accounting options and the tax treatment.
And we look at whether your organisation from a resource point of view is ready to implement and execute the changes. So phase one is all about understanding.
Phase two is designing the solution. So this is when we work with our clients to put the programme of activity together, the project management, the governance, the resource requirements, the training, the communication with the variety of stakeholders within your organisation.
So this is all about having the plan and the model and the framework to implement FRS 102, which leads us on to phase three, which is all about implementing the changes. So this is working with you, bringing the resource to make sure that everything that has been designed and that we said we need to do actually happens, working with your organisation, with the people in your organisation to implement every aspect of the FRS 102 requirements.
And then finally phase four is around assuring the outcomes. So this is to give you independent and objective assurance that what is being done is accurate and correct, reporting to the board and reporting to other stakeholders about what has been done, providing that assurance around the outcomes of FRS 102.
Simply, I don’t think they are. I think most organisations are aware of it.
The standard itself is a pretty weighty tome, it’s very complex and is difficult to understand.
And so inevitably I think, most organisations recognise they need to do something but haven’t really explored the full impact and effect it will have on both them as an individual, but the finance team that they’re part of and the organisation that they’re part of.
So people, I don’t think have really yet grasped the potential impact of what this could mean.
I think there are a variety of things, one is my earlier point that not many people in business now have actually been through this process before. I think the second one is that the whole thrust of shareholder value and the, you know, the financial economic engineering that there is mitigates against that kind of risk taking for the long term.
I don’t want to get into a short termism kind of rant.
But there is a definite prejudice against taking those kind of long term risks.
And I think the third thing is as well that the media, the politicians are pretty bad at suggesting we’re ever going to get out of this, you know, they’re almost making a meal of the gloom.
And so even if you are a businessman who has an optimistic streak about your own business, it’s very difficult to be optimistic about the wider economy because every time you turn on the television or pick up a newspaper, you know, you get slapped in the face, I think it’s bad news.
I would say yes it's a tough environment to be in but I think if you, as an entrepreneur, understand your business, focus on what is core.
I would say love your customers, really understand how they tick so you can retain them. You get referrals from them, you have a passion, you hire the best people possible.
Understand your financials, I always say cash is king, we all know that but also communicate. It's not only about sales, it's about profit.
Also this area at this current time also gives opportunities because hiring people, there are some great people maybe at the moment available who you can bring in your business.
But it's not only important to bring them in but also to grow them and to offer them a path within the company. I could give you some more examples, I think what we do at Cranfield in terms of tips and why is it a tough climate, is you need to be decisive.
I always say we all have a lot of pet projects, especially entrepreneurs, so we call this drowning the puppy. So in the current climate you can't afford to have a lot of pet projects so you need to identify those which are core to the business and drown the other puppies so to move forward.
It's quite straightforward, you can't do it without them and I've been lucky from day one. My original first ever member of staff, my assistant, sales assistant, he become assistant manager, the manager of the Wigan store. Then he become the area manager, he's now in control of about 32 people and large turnover.
But if you can imagine from where he was to where he is now he's a completely different individual and one of the cultures that we've got in BetterBathrooms is you've got to innovate, you've got to come up with new ideas.
You've got to test the boundaries. Obviously a lot of these things get signed off and we've got this idea it's... and they bring it to my table and we say okay well what do you think about this, what do you think about that? But if it's bad they're not fearful, ie, I'm saying bad, if it doesn't work, some companies would go, well he's terrible or we have to get rid of him but we're not like that.
We allow people to make mistakes and the thing we don't allow is for when it starts and the project hits and it starts to actually have a negative, we just cut it fast. So as long as you can reverse engineer that whole process what you've just done. So I'd say all the team, the management team, even some of the guys down on the floor level, they come up with ideas and without their ideas and without their input you can't make it work.
And I mean we've done some amazing things recently, we flew the ex vice president of Disney World Florida over, a guy named Lee Cockerell. And the whole success of Disney World from a people side and the culture side has really been down to Lee. So it wasn’t that long ago we flew him over, he spent a couple of days with the staff, I still get regular emails off him every day, he's a little bit of a mentor to me. So we've done that investment there and then we've got a training strategy for the managers where okay we've got a concept, this is how we want to operate.
But they then have individual mentors and one to one trainers and managers and they then guide them individually throughout the process. Because obviously everybody's got their own problems and some people are good at statistics, other people can't create story out of statistics so it's helping them on those things.
Other people really... we've got some managers who have... are not outgoing as a people so they have to work on the people side to make sure that they're motivating. Some people find it hard to say hello when they walk into work, I'm one of those people.
Usually I want to get from my front door to my desk as quick as I can do to work as fast as I can do.So I've had to learn the skill of saying hello and smiling, so we all work on it together, we're all learning every day. But I can't do it without them and to be honest it's a lot more about them than it is about me now because I've moved up to sort of CEO level and I'm mentoring people who are 15 years older than me in management levels as well in some cases. So it's a bit strange at times but it's good.
For me the other one I think is be really aware of your financials. It's not only from... it's a dash point that you know at each point in time what your financials look like but then also making clear that your key staff understand key financials.
And don't be scared of communicating that with your key staff. Another one I think is growth, we see a lot of businesses that immediately are incentivised of diversifying in terms of products and new markets very quickly.
We always say stick with the knitting, sell more to your existing customer base and a term at Cranfield we use, is like squeezing the lemon.
So if you think about a fridge, you want to get as much lemon out and not end up with a half-rotten lemon at the end of the week.
I think that is another important lesson to hand out and I think if I had the last possible one to squeeze in, it would be, I think, think about what you want to be as an entrepreneur.
What role do you want to play, where do you see yourself in a few years time?
And so make sure that you build a succession that will allow you to do the things you're best at and not be the hero or the meddler but be the one who works on the business and rather in the business.
I think there is some intuition there, I think entrepreneurs are very good at spotting an opportunity, identifying it.
But I think what's important... and I think luck comes to the hard working. I think what's really important is to make a plan.
So for entrepreneurs I always say as a recommendation is you need to have a clear vision and a purpose which you communicated to your staff.
Planning helps, we've done some research on that aspect as well showing that those entrepreneurs who plan actually grow in terms of number of staff and turnover.
So I would say if you can do some planning go ahead do so, intuition will take you so far but in order to specially scale the business and have sustainable growth you need to have processed as people and your leadership style into place that will sustain that in the longer term.
So you're not only the one horse pony who has one great veer but can sustain that in the long term.
The challenge of the world is moving very fast. I think academia in some ways needs to keep up with it and I think that's the nice thing about Cranfield because we're so closely linked to the business world.
So research and practice is very entwined. At Cranfield we say knowledge into action is very much the ethos of the university. So yeah, we are on our toes and we try to keep up and hopefully inform the business world of good ways and practices to move forward as well.
But I think it's very much a joint... it's a synergy so we only do research which is very relevant for industry and we work closely with industry to make it relevant for them as well.
Often, as I said earlier, directors leave it too late, come to us when they have to pay the wages at the end of the week and don't have any money to do so and in those circumstances it's often very difficult for us to do anything other than advise them to commence an insolvency process.
If they come to us earlier, there are ways in which their working capital facilities can be restructured or the business can be restructured so that they can avoid an insolvency process. But the key thing is for management to spot the problems early, come and seek advice and we can help them.
Sometimes it can take a while to work out what somebody has but I think one of the first meetings that you have with the client is really important because you understand just them talking through what they think they have.
It gives you an idea of where they want to go and it gives them an opportunity to work out where they want to go, what's important.
The lovely thing about financial planning, you can't walk up to a cash point and press a button and it tells you what you should do, it's all very personal.
We all have different hopes and aspirations and dates that we think we're going to retire or what we want to do with our money.
So it's wonderful, you get to know your client very well.
It varies hugely, some people are fantastic, they come in with spreadsheets, others literally have no idea at all which, for me personally, I would find incredibly frightening not to know how much my pension would be worth when I come to retirement.
So it varies hugely but I think actually a really valuable bi-product of what we do is that we organise the administration of somebody's life. People often collect lots and lots of pension plans throughout their working career.
People collect life policies, in fact I've just come out of a meeting where somebody's said I took this out years ago, I don't know what it is, what is it? So we can put some sort of structure to people's financial plan.And it's when people understand it that it works better for them. We can plug the gaps or even get rid of things that aren’t needed anymore. People take out lots of life cover, for example, when their children are young but do they necessarily need it when the children have grown up and left. So there's a lot of administration in it but it is valuable. The other thing that's really valuable is people book an hour or so to see me and it's an hour out of their busy lives that is devoted to themselves rather than their work. So it's a time that really I just help people through the personal financial planning maze.
A key thing I put forward as an investment, I mean that history shows that the companies that do well in the upturn are those that manage to maintain their investment and their marketing and basically the fabric of the business intact so that when the upturn came they could take advantage of it.
Those that as it were waited until it was obvious missed the boat.
And yet if you look at the levels of investment, the levels of marketing and all these indicators in the UK economy, it’s clear that for the most part people are cutting back.
And so they’re not actually looking through the current difficult times so that when the good times do come an awful lot of them aren’t going to be ready and so they’ll miss the markets.