Corporate Governance & Decision Making | Top-Level Mentoring | Insightful Decision-Making | Getting Business Problems Solved
Author: David J. James
55 year old UK origin Chartered Accountant and business consultant who loves languages, literature, history, religion, politics, internet, vlogging and blogging and lively written discussion. Conservative Christian, married to an angel with advanced Multiple Sclerosis. We have three kids, two of them autistic, and we live in Warsaw, Poland.
You may have noticed the change in background colour on this site from a Cambridge style light blue to a darker blue verging on regal purple – this is the colour with the hex code #260564 – my birthday in fact – and is now the property of quoracy, it is officially called “Quoracy Blue” and can be checked out by following this link to the Unicef/Dulux appeal “Own a Colour”, which is fighting malaria and other diseases affecting children in the poorer parts of the world.
We hope that other websites and wordpress places, youtube channels, etc, will buy their own colours and place them on their backgrounds, and support this cause. Get your favorite colour before someone else does!
Governance and strategy are what this blog is all about, but governance and strategy themselves are actually all about making sure that business delivers its intended objectives. Objectives, in their turn, derive or ought to derive, from the mission statement of the organisation. The mission statement is supposed to say what the stakeholders want out of the business. Therefore even though this may seem to be a post on a lighter note than some of the posts in this blog, nevertheless I believe that this question really gets into the heart of what strategy and governance are actually all about. Strategy and governance are all about making sure that we want out of the business, we get.
Therefore the starting point needs to be to ask ourselves the question, what is it that we actually want from business? This is a question which I’d like to ask today to anybody who is a stakeholder, please note I didn’t say “shareholder” but “stakeholder” in any business. Please consider the businesses in which you are a stakeholder, please identify the one which has the greatest importance to you of those businesses, and with regard to that particular business, please put into the poll below all of the answers which you see as being things that you want out of that business. Things that you are looking for from your stake as a stakeholder in that business.
Hopefully this will show a nice cross-section of the different things which stakeholders are actually looking for from businesses, but if you can see in the list something which you are particularly looking for from your business please feel free to add it in the comments afterwards.
I was recently reminded of something my old gardener told me about ivy. I had been surprised at how slow some lovely variegated ivy that had been planted by my fence was coming on, and his words were as follows:
With ivy, the first year it is put in, it does nothing, it just sulks at having been put in a new place. The second year is starts to spread out horizontally along the ground by the bottom of the fence, and in the third year it starts to grow upward, like a curtain.
Wise words, from someone who knew his onions. And his ivy. It seems to me that this is a great analogy for many new businesses. Entrepreneurs obviously look for a rapid return on capital employed. They want their profits and the cash back to invest in the next thing. But nature takes its course with some businesses just like it does with the ivy, and you cannot rush it.
The first year, you have set up costs, people are getting used to each other in a new team with a new product, new identity. This is like the ivy “sulking” – just establishing a new root system and adapting to the chemistry of the soil and the direction of the light.
The second year you start to see sales pick up but the prices are not that good yet and also the volumes don’t allow the contribution to cover fixed costs. You get growth but you don’t get the profit. It is like the ivy growing along the ground by the bottom of the fence. It is obviously going somewhere, but you aren’t getting the effect of it yet.
The third year you reach a certain critical mass, you break even you start to nudge into profit, your cash flows turn the corner and you start paying back your seed finance. This is like the ivy making its curtain up the fence.
If the ivy survives at all, it will certainly produce the coverage in time. The same with these new businesses. They simply need to be nurtured and for nature to be allowed to take its course. If the soil is right, the light is there, and the water, the plant healthy, then it will do what it is programmed to do in its own time. Micro-managing it will not help. Restructuring the team which is only starting to gel will not help. it will be like transplanting the ivy at the end of the second year for failing to raise – it will only go through its sulking and creeping years all over again in the new position.
In Monopoly, whichever player is banker is supposed to keep the bank money separate to the money he’s also doing business with in the market. He’s also supposed to run the bank according to certain rules and if he was cheating it’d be game over. They should bring out a new version of Monopoly in which the Banker is allowed to cheat all he likes and always automatically wins, and another player is called The Government and that player chooses from the Chance and Community Chest cards for the other players instead of just getting them to take the next one in a shuffled pack. The Government cannot only do it to the banker – they automatically give the Banker the best card. Banker and Government get to throw three dice instead of two, and they are also allowed to compulsorily purchase other player’s properties, and also send them to Jail for two turns if they complain about the unfairness of the rules.
That modern update to the famous board game would be most enlightening. Nobody would play it given the choice, but in reality of course we don’t really have a choice. After all, there’s a monopoly of government in any country and there’s an oligopoly of banks.
The so called large household appliances made this year in Poland will be worth the record amount of PLN 3 billion, the newspaper underlines. A lot of it is owing to Samsung Electronics who purchased a washing machine and refrigerators manufacturing plant in Wronki from Amica and announced that it would invest nearly USD 170 million in the development of this plant. Samsung Electronics is also to transfer its production from other European plants to Wronki. The investments are underway.
“Dziennik Gazeta Prawna” found out that Samsung Electronics says it is possible that production in Poland will be expanded with manufacturing heating equipment like ovens, stoves and plates. There is a large demand for this kind of appliances in the EU. According to analysts, demand for heating equipment will remain at around 30% of total annual production, “Dziennik Gazeta Prawna” notes. (Source: gazeta.pl)
16 June 2011, 8.00am – 11.00am
This event is aimed at introducing Cyprus companies as vehicles for international transactions and investments covering the key requirements applied by the authorities and the banking system in Cyprus and Poland.
Experienced professionals and speakers of Baker Tilly Poland and Baker Tilly Klitou of Cyprus will be presenting a range of topics, suggesting practical solutions and sharing their experience. A Q&A session before the close of the event will give participants the opportunity to talk directly with our speakers in order to raise their queries or obtain additional information.