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Business
www.ukbusiness-today.co.uk Issue 5 2012 Price 3.50
B OA R D R O O M M AT T E R S
WORKFORCE DEVELOPMENT SPECIAL
Sponsored by
LEADERSHIP APPRENTICESHIPS HEALTH AND WELL-BEING EMPLOYEE PSYCHOLOGY
HEALTH
Dame Carol Black on good health in the workplace
THE ECONOMY
Ex-BCC president Bill Midgley on the Autumn Statement
THE BT Q&A
...with Charlie Mullins, founder of Pimilico Plumbers
5-7
NEWS COMMENTARY
CONTENTS
Focus on prospects in the service sector, an auto-enrolment survey and manufacturing output.
9-11
POLICY VIEW
Spotlight on a financial boost for manufacturing supply chains and innovative life science businesses.
12-13
28
European Leaders' Ashley Ward is in the hot seat for this issue's email debate
DATA MANAGEMENT
Sean Farrington, UK MD at QlikTech, debunks the myths of data overload.
15-17 THE AUTUMN STATEMENT

Business Today canvasses the views of the leading business business bodies on the Chancellor's Autumn Statement.
18-19 ENTREPRENEURS
We reveal the secrets of five entrepreneurs who were assisted by the British Library's Business and IP Centre.
20-21 THE OLYMPICS

How small and medium enterprises can maximise on the short and longterm benefits of the London Olympics.
32
Author Colin Turner looks at the lessons for the UK following recent tours of South America and Iran
22-30 WORKFORCE DEVELOPMENT

Our wide-ranging cover feature includes a look at apprenticeships, leadership and behaviour engineering thinking.
31
39
Hotfrog Indicator's Caroline D'ay on a revolutionary method of tackling the workplace stress issue
INTELLECTUAL PROPERTY
Jackie Maguire of Coller IP with advice on avoiding intellectual property crime.
35-51 HEALTH AND WELL-BEING

Our comprehensive look at the key issues regarding health and well-being in the workplace.
52-57 PENSIONS
Gary Cullen of Maclay Murray and Spens LLP on removing pension scheme uncertainty.
ALSO INSIDE: OPINION THE BT EMAIL DEBATE WORLD BUSINESS 14 28-29 32-33 62
46
Executive coach Kate Lanz on key approaches to motivating battle-weary executives
THE BT Q&A
BUSINESSTODAY
FOREWORD
PUBLISHER Ian Parker ian.parker@tenalpspublishing.com HEAD OF PROJECTS Gareth Timmis gareth.timmis@tenalpspublishing.com ADVERTISING Media Manager: Sarah McGuire 01625 667748 sarah.mcguire@ukbusiness-today.co.uk Adam Ratcliffe adam.ratcliffe@ukbusiness-today.co.uk EDITORIAL Editor: Mark Lane mark.lane@ukbusiness-today.co.uk Features Editor: Brett Mathews brett.mathews@ukbusiness-today.co.uk Design: Graeme Corrighan BUSINESS TODAY ONLINE www.ukbusiness-today.co.uk BUSINESS TODAY EBOOK www.ukbusiness-today.co.uk/ebook TWITTER @BusinessTodayuk READER RESPONSE SERVICE To provide readers with further information on advertisers products and services please send your enquiry to circulation@ukbusiness-today.co.uk. This information will be submitted to the relevant advertiser. SUBSCRIPTIONS To ensure you receive future newsletters and a copy of the magazine please email circulation@ukbusiness-today.co.uk Business Today Trelawney House Chestergate Macclesfield Cheshire SK11 6DW 01625 613000
The views expressed in Business Today are not necessarily those of the publisher nor of the editor, except where expressly stated. Whilst every care has been taken in compiling this publication and the statements it contains, neither the Promoter nor the Publisher can accept any responsibility for any inaccuracies, or for the products or services advertised.
WELCOME
A good friend of mine works for a large, international blue chip company. The economic uncertainty of the past few months has begun to take its toll on the business.
Profits are down and there is concern about possible job cuts. My friend describes the atmosphere at the company as toxic. Senior management are, in his words, nit-picking about the tiniest things and constantly trying to catch us out. Morale among my friend and his colleagues all of whom work in front line roles is low. Many are looking for alternative jobs. They enjoy their work and the roles they do. They just dont like the way they are being treated right now. I rather suspect that this rather textbook case of poor management is being replicated across the UK right now. For the sad fact is that, in many instances, when the going gets tough, senior management start looking for scapegoats. Sadly, many readers will be familiar with what I am talking about. But there is another way. This issues email debate is with Ashley Ward, a director with European Leaders. In an illuminating exchange on management and leadership development, Ashley talks about the, old style micro-managing, bullying, macho tough guy whose only real motivator is fear. These people have thugged their way into the top. He adds: When they are under siege, poor leaders tend to operate a blame culture and dump on their team, when in actual fact what is needed is maximum transparency and maximum team involvement. Very much tying in with the general theme of how businesses treat their people is an extended feature on the subject of well-being at work. Dame Carol Black, a key government advisor in this area answers some critical questions relating to well-being at work. The overall message of our contributors here is pretty simple: happier, cared for employees are more productive and better for business. Rocket science it isnt and yet, as my friends case above highlights, even the biggest businesses are still getting it badly wrong. The theme of training and development is prevalent in this issue. Weve got other articles in this area looking at the growing popularity of apprenticeships, the role of psychology in identifying talent and the importance of personal development and appraisal in improving staff engagement. Finally, we have a look at the response to the Chancellor George Osbornes recent Autumn Statement which, as it turned out, was gloomier than even the most pessimistic forecasters had predicted. Osborne had a thankless task and one wouldnt have blamed him if, like some of his more illustrious predecessors, hed had a drop or two of whisky while making his speech. The overriding message of the speech: were all going to have to tighten our belt in the next few years. But we already knew that anyway, didnt we?
Mark Lane Editor Business Today
CONTACT US
Wed be delighted to hear readers views on the content of this issue and our opinions on business generally, please feel free to email the editor at ml.editorial@tenalpspublishing.com And dont forget to follow us on twitter, at @BusinessTodayuk
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THE OLYMPICS
N E W S C O M M E N TA RY
OPTIMISM LOW IN CAPITAL WITH OLYMPICS LOOMING

Only 13 per cent of London businesses feel more optimistic about prospects for the economy over the next six months, compared with 43 per cent in June, and optimism about their own business prospects has fallen from 51 per cent to 31 per cent over the same period, according the latest CBI/KPMG London Business Survey. In the latest bi-annual survey of 262 London business leaders, just over half (55 per cent) say their top concern over the next year is the threat of a double-dip recession. But companies are now less concerned than six months ago about reduced public sector spending which has dropped from second to seventh place - although half (51 per cent) of firms still think that public sector spending cuts will have a moderate impact on their business (down from 71 per cent a year ago).
The number of companies only hiring when essential has increased from 59 per cent in June to 64% in this survey, with 23 per cent of businesses implementing recruitment freezes. With just over seven months to go until the Olympics, an overwhelming 92 per cent of London businesses think the Games will benefit London internationally, and threequarters (78 per cent) say they are 'looking forward' to the event. Sara Parker, CBI London region director, said: It's clear that London business confidence has
been knocked by the ongoing uncertainty in the eurozone and weak demand and growth at home. We now need the Government to power ahead with its autumn statement plans to help businesses grow and create jobs. "Companies are confident that the Olympics will benefit London internationally. The Games will showcase London as a world-leading business location, and highlight the success of UK firms in delivering a complex construction and infrastructure project - expertise that can be easily exported around the world.
SERVICE SECTOR ACTIVITY ON THE RISE

By Angus Kerr, divisional director, Brewin Dolphin, Glasgow
Despite the very gloomy outlook confirmed by the Chancellor, George Osborne, during his Autumn Statement there was some welcome relief provided by the latest PMI Survey. The Markit/CIPS Services Purchase Managers Index (PMI) rose in November suggesting that UK service sector activity picked up. Figures for the Eurozone predictably showed some contraction but investors can take solace from a modest expansion in the UK service sector. The consensus had suspected that the index would show a decline in the face of consumer retrenchment and a struggling manufacturing industry. These better than expected results come as welcome relief during a period of rising pessimism about the health of the UK economy. Although conditions are likely to remain tough for the service sector in the months ahead, any good news is worthy of comment. upside and diversity of earnings should the sector contract domestically. G4S could be described as a special situation given its recent abandonment of a large Dutch acquisition and the recent decline in the share price as a result of this abandoned strategy could provide an opportunity to analyse the companys attractive underlying operations. An important sub-set of the services sector in the UK is the support services sector and if this important area continues to be resilient then rewards may be on offer for investors. Brewin Dolphin covers various companies within the sector, these include: Carillion; G4S; Wolseley and Serco. Each of these companies, with the exception of G4S, has debt levels far less than the sector average. Strong balance sheets are particularly attractive at present and despite a strong presence in the UK, each company also has significant overseas exposure. This exposure could provide defensive characteristics, additional It remains Brewin Dolphins view that although the UK will be hard pressed to avoid recession in the near term, the equity market is desperate for good news and remains under-valued on many valuation metrics. Therefore, if one was taking a longer term view, then picking up companies within diversified portfolios which look resilient should reap rewards accordingly.
The opinions expressed in this document are not the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd. accepts liability for any direct or consequential loss arising from the use of this document or its contents. The value of your investment may fall and you may get back less than you invested. The information in this article has been taken from public sources and is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.
SHARE WATCH
BUSINESSTODAY
AUTO-ENROLMENT
N E W S C O M M E N TA RY
FIRMS NOT PROACTIVE ON AUTO-ENROLMENT

Businesses are failing to take a proactive stance on auto-enrolment. While the majority (75 per cent) of employers are fully aware of imminent changes to workplace pension schemes, preparedness for auto-enrolment is not ubiquitous - less than one third (32 per cent) of employers know the date on which the new rules will apply to them. Thats the finding of the Chartered Institute of Personnel and Development (CIPD)s Labour Market Outlook: Focus on 2012 Pension Changes, a survey of more than 600 HR professionals conducted by YouGov to investigate the progress that private and voluntary sector employers are making in preparation for the new arrangements. 47 per cent of respondents said their organisation had either not identified their
not the organisation had already modeled the financial consequence of auto-enrolment, or was planning to do so within the next 24 months. Charles Cotton, CIPD reward adviser, says: My suspicion is that in these instances HR has assumed that another team or department within the organisation is dealing with the response to the 2012 pension changes. The concern is that these other departments may be assuming that HR is taking the lead in this area and so no actual progress is being made. Even if another department or team is responsible for this issue, it is important that HR is involved in the organisations plan for the introduction, implementation and communication duties arising from autoenrolment. By taking a proactive, rather than reactive, approach to preparing for autoenrolment, organisations will be better placed to phase in any potential cost impact and to position themselves as employers of choice by communicating the benefits of saving for retirement.
staging date (28 per cent) or were unsure (19 per cent). 31 per cent of respondents working for large organisations, whose staging dates are actually the most imminent, were unsure if their date had been identified or not. Similarly, 38 per cent of respondents working for large organisations were unable to say whether or
MANUFACTURING
UK MANUFACTURING OUTPUT DECLINES IN NOVEMBER

The UK manufacturing sector contracted for the second successive month in November, as companies cut back production in response to lower demand from both domestic and export clients. Weaker operating conditions were reflected in the labour market, with payroll numbers reduced at the fastest pace for over two years. The seasonally adjusted Markit/CIPS UK Manufacturing Purchasing Managers Index (PMI) fell to 47.6 in November, its lowest level since June 2009. This was from an upwardly revised figure of 47.8 in October (previously reported as 47.4). Manufacturing output fell for the third time in the past four months in November, and at the sharpest pace for over two-and-a-half years. Consumer goods producers reported a marked rate of contraction that was the fastest since February 2009. Output also fell slightly in both the intermediate and investment goods sectors. Lower production was linked to reduced new order inflows, weaker global and domestic market conditions and clients becoming increasingly reluctant to spend. November saw incoming new orders fall for the fifth month running, although the rate of contraction eased from October when orders fell at the fastest pace for over two-and-a-half years. marked reduction in input buying volumes was reported for the second month running, and holdings of both pre- and post-production stocks were depleted. Rob Dobson, senior economist at Markit and author of the Markit/CIPS Manufacturing PMI: The manufacturing engine has run out of steam. Output is falling at the fastest rate since early 2009 as order inflows from domestic and overseas markets continue to deteriorate. Jobs are consequently being lost at the fastest rate for over two years as producers seek to scale back operating capacity in line with a darkening economic outlook. The lack of new work is forcing manufacturers to rely on previously-placed orders to avoid sharper cutbacks in output and employment. This cannot go on indefinitely, and job losses will inevitably mount if order books continue to weaken. Manufacturers are also running down their warehouse stock levels to cut costs. Two of the props underpinning the rebound in economic growth in the third quarter, inventories and industry, are therefore more likely to act as a drag on the economy in the final quarter than give support. However, falling input costs and muted selling price inflation may provide some scope for further stimulus from the Bank of England.
Meanwhile, new export orders declined on the back of reduced order inflows from mainland Europe, the US and Asia. The ongoing contraction in incoming new work led to a further marked reduction of backlogs of work in November. Outstanding business fell to the greatest extent for 27 months, signalling that the current rate of replenishment of order books is insufficient to match the pace at which contracts are being completed. Manufacturers cut levels of staffing, purchasing and stock holdings in November. Employment fell at the fastest rate since October 2009, a
BUSINESSTODAY
All we do is print: one of Europes leading Online-Print companies

Printcarrier.com delivers top quality products fast and at favourable prices. To just print was yesterday, today Printcarrier.com All we do is print the printing People will print whatever you desire from business cards to magazines, quickly and to the highest standard. For a printing company which is represented throughout Europe it is essential to be professional, to have an optimal organisation structure, and to have perfect planned logistics. These are the most important requirements in order to keep the prices competitive. The main goal of the company is clear: to become the European Leader in the print-on-demand industry. Chief executive and owner Gnter Makowski expanded his company across Europe directly after founding the company Printcarrier.com in October of 2004. He opened a branch office in Chiusa, Italy. The start-up entrepreneur continued his expansion path in the following years as he opened branch offices in Belgium and the Netherlands in 2005. This was then followed by Switzerland, the UK and Denmark in 2006. In the year 2007 he added Austria and Sweden, in 2008 Poland, Slovenia, Spain and Ireland, and last but not least in the year 2009 branch offices in Luxembourg and the Czech Republic were opened. A lucrative business model This increasing globalisation is what puts company founder, Gnter Makowski, in front of the challenge to create new win-win situations, in order to keep the costs low despite the growing price inflations. The solution: a web-based shop system in which orders, confirmations and payments are transacted. Also things like the status of the order and the tracking of the parcel can all be followed online. The constant process optimisation and the ISO-certified Quality system which the company gained in 2009, make todays business model perfect and guarantee the highest service and product features. Trusting relationship with customers from all over Europe Even with a high standardisation, not all of PrintCarrier.com's processes are automated. Each of the individual offices have service teams formed of Native speakers, which deal directly with any queries and have the expertise to build trusting relationships with the print clients. The consistent low price is also another reason to use the pan-European online printing service. The concept behind it is simple and concise: every customer is part of a network and is combined in with orders from all over Europe, which would be difficult to implement individually. Since the fixed cost per print will be distributed to multiple parties, this reduces the final price. "Abroad, we have no real competition. In most countries where we are now present, we are either the price leader or among the top three among the printers which are in demand" said chief executive Makowski.
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MANUFACTURING
POLICY VIEW
NEW 125M FUND TO BOOST UK MANUFACTURING SUPPLY CHAINS

A new initiative of up to 125m is being set up to improve the global competitiveness of UK advanced manufacturing supply chains, Business Secretary Vince Cable has announced. placed to take a global lead, such as energy renewables and other low carbon sectors. The competitive fund will invite applications early in the new year and will be flexible in the type of support offered to The Advanced Manufacturing successful proposals, Supply Chain Initiative aims to help recognising that to fulfill their existing UK supply chains grow and potential and address market achieve world class standards while failures suppliers and supply encouraging major new suppliers to chains may require a come and manufacture here. combination of investment The new fund will support innovative le Vince Cab in capital equipment, associated projects in established UK advanced research and development and improved skills manufacturing sectors such as aerospace, and training support. automotive and chemicals. It will also target newer growth areas where the UK is well Business Secretary Vince Cable said: Recent economic and natural shocks such as the ash clouds, tsunami and Japanese earthquake have shown the fragility of long distance and single source supply chains. I want to seize on the increased preference that big global companies are showing for colocating key elements of their supply chains with their UK manufacturing operations. British suppliers have a lot to offer and we need to help them realise and develop their strengths and sell them on the international market. While still encouraging free trade I also want to gain maximum value for the UK by ensuring our suppliers are in the best position possible to compete for the very significant new private and public investments being made in the UK over the next few years.
BUSINESS SUPPORT
180M PROGRAMME FOR INNOVATIVE LIFE SCIENCE BUSINESSES

A three-year 180m programme, to be managed jointly by the Technology Strategy Board and the Medical Research Council, will support some of the UKs leading life science companies and academia, enabling them to move more quickly from discovery to commercialisation. The new programme, announced by the Prime Minister as part of a package of measures to drive growth in the UKs life sciences sector, will see the Technology Strategy Board receive additional funding of 90m, which will be aligned with existing Medical Research Council academic translational funding, providing a programme valued at 180m. The aim of the Biomedical Catalyst fund will be to deliver growth to the UK life sciences sector through supporting and driving the development of innovative life sciences products and services. Support will be available to both academically- and commercially-led research and development. The fund will provide seamless support, from initial research in universities through to commercial development in small- and medium-sized companies, from incubating innovations in academia to supporting and accelerating companies innovative product and process developments.
Iain Gray, chief executive of the Technology Strategy Board, said: This joint programme will leverage the strength of the science base for business by encouraging greater collaboration. We will work in partnership with the Medical Research Council, focusing on areas such as regenerative medicine, stratified healthcare and emerging medical technologies. Sir John Savill, chief executive of the Medical Research Council (MRC) said: The MRC welcomes this additional support and we look forward to working with the Technology Strategy Board to promote productive partnerships between MRC-funded scientists and high technology companies, especially small and medium enterprises (SMEs). In particular, the MRC are keen to help SMEs to engage more with clinical proof of concept studies, where partnerships with academic research groups and patient participation are vital. The number of organisations involved in the life sciences sector in the UK is increasing and the emerging open innovation model of research and development results in companies engaging with the wider research environment. While this encourages creativity and innovation, it also means it is now more important than ever to ensure that public investment is maximised and supports the most promising developments, for both patient benefit and commercial success.
BUSINESSTODAY
10 BUSINESSTODAY
ENERGY
PENSIONS
POLICY VIEW
CARBON PLAN FOCUSES ATTENTION ON ENERGY EFFICIENCY

The governments newly published Carbon Plan has outlined outline a path for the reduction of emissions by 80 per cent by 2050 and the saving of billions through energy efficiency. The plan states governments plans for reducing emissions in line with its four carbon budgets covering the period between now and 2050. And it details, department by department, the governments action plan over the next five years on climate change at home and overseas. According to the Plan, the UK has already cut its emissions by over 25 per cent on 1990 levels and should exceed the 34 per cent target set by the Climate Change Act. The government also says there will be no additional cost implications for meeting the fourth carbon budget of a 50 per cent cut in emissions by the mid-2020s. Over the next ten years, the UK must complete the cost-effective measures started in the previous decade, particularly focusing on improving energy efficiency. Following that, the UK will need to focus on a mass rollout of technologies which are not yet set in stone. The government says it will support the development of a portfolio of technologies for each sector rather than picking winners at this stage. In his statement on the Plan, Energy Secretary Chris Huhne said that the Plan should send a clear signal to negotiators at the United Nations climate summit in Durban that the UK is walking the walk to live up to its promise to show climate leadership. Every bit of progress we make is one more step away from import dependency, away from price volatility and from the emissions that threaten our way of life, said Huhne.
PENSIONS REGULATORS SIX PRINCIPLES

The Investment Governance Group (IGG) has set out a practical framework of principles and best practice guidance to help those running work-based DC schemes improve their investment decision-making and scheme governance. This is the first time the critical issues of investment governance have been addressed specifically for DC schemes which will have the majority of auto-enrolled employees after the 2012 changes. The framework is a result of a public consultation with key stakeholders, including employers, trustees, providers, advisers and member representatives earlier this year. A number of changes have been made in response to points raised in the consultation to improve clarity, allow more flexibility and encourage engagement with good investment governance. The six revised DC principles are: Clear roles and responsibilities aiming to help ensure that firm foundations are in place for the process of investment governance. Effective decision-making decisions relating to investment governance must be taken on a fully informed basis and that the processes must be sound. Appropriate investment options to make certain that investment options take account of the range of risks and needs within the scheme membership. Appropriate default strategy determining that an appropriately designed investment strategy is offered for members who prefer not to make a choice. Effective performance assessment the performance of the chosen investment options must be monitored. Clear and relevant communication to ensure that members are provided with clear, relevant and timely information so they can make an informed choice about where to invest. Commenting on the groups work in the DC area, IGG chair Bill Galvin said: Pension schemes are long-term undertakings and require robust and resilient governance structures. Clarity of roles in decision-making is central to delivering good outcomes for pension scheme members and this will be even more important with auto-enrolment. Members of DC pension schemes need access to a range of fund choices as well as a default strategy. These principles have been developed by all the main stakeholders to encourage better investment governance amongst all types of DC schemes. We hope that this will raise investment governance up the agenda of the pensions industry and employers to deliver the best outcome possible for members.
BUSINESSTODAY 11
DEBUNKING THE MYTHS OF DATA OVERLOAD

By SEAN FARRINGTON, Managing Director UK, and Regional Vice-President Northern Europe, QlikTech
D ATA M A N A G E M E N T
hen it comes to trying to find out anything about their business, office workers face having to trawl through complex spreadsheets, dashboards and reports. When you add this to the sheer volume of email, conference calls and meetings most office workers have to fit into a working week, its a wonder they find any time to do any proper work. But the data problem is particularly pressing: more and more information is at companies fingertips, but employees genuinely find it wearisome, if not impossible, to gain any value from it. The volumes of business data are growing so fast now that the industry has long-since had a term for the phenomenon: big data. Its widely acknowledged that, amid a generally gloomy economic climate, one area which will show real growth next year is the amount of data businesses will hold. This notion has been supported by IT analysts Gartner, who just last month declared that more than 85 per cent of Fortune 500 organisations will be failing to effectively exploit big data all the way into 2015. Bringing the issue closer to home, a survey we commissioned this autumn, of 1,000 white collar workers up and down the UK, found more than 90 per cent of office workers are tasked with sifting through more data now than they had to a year ago and yet, less than a quarter actually find out anything new about their business as a result. But is data overload really the problem? Surely the more data businesses can get their hands on, the better decisions they will be able to make. Unless the actual problem is clarified, then big data is in danger of becoming overhyped, with businesses fearing they wont be able to tackle the issue at all. However, the real issue is both identifying the relevancy of the data being analysed and, indeed, addressing exactly how this analysis is actually done.
available for everyone, with business discovery encouraged by employers and systems to be accessed as frequently as possible, whether its sales data, staffing information or even marketing insight. Big data has actually been a part of businesses for a long time, but the challenging economic climate has made better use of data far more pressing. This raises the question of how all this information should be used. Reactive technologies such as traditional reporting just will not cut it in times like these. Producing more and more reports in the hope they will somehow magically turn into insight is bordering on delusions akin to giving enough monkeys a typewriter and believing one of them will eventually produce the complete works of Shakespeare. Instead, insight is found when people can interact both with hard data and their colleagues.
reports: 75 per cent of white-collar employees look at data in some shape or form at least once a week or more. However, only a quarter have ever been able to use this to discover anything new about their business. For all their efforts, people have remarkably little to show for them. What is more, there are people with an eager appetite to discover more about their business. In fact, our research showed that one in three people want to learn more about their organisation. After all, knowing exactly what is going on across a business is key to personal growth as well as the only way one can be sure they are truly making the most effective decisions. However, over half of all the workers we surveyed (53 per cent) said they still rely on their gut instinct for how things are going at work, rather using hard numbers to back up their decisions. This is fine for the risk-taker, but for the majority of managers looking to minimise risk as far as possible, this cannot be a healthy state of affairs. With this in mind, the best lesson for a business leader moving forward is that as much data as possible should be made
A problem shared
When it comes to crunching the numbers, or even figuring out what they mean, we should take a few lessons from Facebook and its kind. Where Facebook has become many peoples chosen means of discussing the weekends socialising, so Social Business Discovery tools are helping people work together on uncovering these new insights. By distributing feedback on their own experiences users can remix and reassemble data, reflecting on what theyve uncovered and assembling ways of looking at issues for new and sometimes deeper understanding. The more people using and discussing the data, the more chance there is for new opportunities to be discovered.
iGeneration of employees
Another antidote to data overload comes in where people and how people can access the numbers, no matter where they are. Thanks to smartphones and tablets and their ilk, technologies conceived purely for consumers are gaining ground in the workplace. Ultimately, the technology we now have at home is generally more impressive, and is
Why data overload is a fiction

Our research showed that the UK workplace has become full of thousands of people toiling through numerous spreadsheets and
12 BUSINESSTODAY
plainly more fun than what people are given at work. The key to encouraging their wish to discover more about their business is to reflect the app-oriented model of the smartphone or tablet, to provide a familiar, intuitive way to drill down into the data. A great example of mobile business discovery in action is high street food chain EAT. It was looking to find ways to better understand which products sold best, where and when, so it could reduce wastage and run more efficiently. We provided a business discovery solution running on tablet devices which made minute by minute basket analysis suddenly visible, enabling managers to see which product offers were proving most successful in which stores at which time. Data was even available to pin-point which members of staff were the best sellers too, which proved invaluable for human resources and training purposes. With over 100 stores spread across London, EAT is now able to instantly spot opportunities for growth and most importantly, act on them straight away. A big part of its success was recognising that giving its branch managers access to immediate, relevant data that was consistent across the business was crucial to its growth as a company. The tablets gave them the confidence to point out where something could be improved, but they needed access to the companys businesses information in order to do this. EATs employees have been amazed at what they have already learnt in the few months since the initiative went live. Of course, when it comes to handling business data on an employee-owned machine, many managers will be cautious (and rightly so) of that information leaking out of the business. This neednt be an issue: there are tools available that can help mobile business discovery, but dont store any data locally onto the users device instead, they offer a magic mirror into whats safely stored on the companys IT systems. If the connection gets cut, nothing is left on the remote device. We too often hear the terms big data or data overload, but giving employees the ability to drive down into the masses of information
that is available shouldnt daunt them. Rather, it should be a way to help them work together to discover things about their organisation that they would never have thought possible before, and for the business to reduce risks, wastage, and (you never know) uncover a new business opportunity or market niche. To do this, business leaders need to keep the taps of information wide open, but also to think more about how employees are using it and what insights they expect to uncover. Our research has proven that employees want to learn more and, those business leaders who encourage them to collaborate with one another over business data to find the answers to important business questions will ultimately be the ones who can improve their business. With a troublesome economic climate forecast for next year, the winners over the coming months will be those that can put their data to the best possible use. Giving employees the tools and devices to harness this data will ultimately encourage all staff to work together and help their business emerge more efficient, better informed, and operated on a far more secure footing.
D ATA M A N A G E M E N T
Sean Farrington
THE MORE PEOPLE USING AND DISCUSSING THE DATA, THE MORE CHANCE THERE IS FOR NEW OPPORTUNITIES TO BE DISCOVERED.
BUSINESSTODAY 13
OPINION
HOPE SPRINGS
PHILIP SMITH finds chinks of light for SMEs, despite the odds being stacked against them
t was Dante who wrote: Abandon hope all ye who enter here. He wasnt referring to global markets, but he may as well have been.
But dont abandon hope just yet, there is some good news out there. It does depend on who you talk to, of course, but between the doom and gloom there are champions of hope. Some are business owners, others are investment advisers and even bankers. Here is the short version: The economy always recovers a bit later than the markets. The markets are showing signs of improving. Its cyclical and what we are experiencing is not unexpected or unusual. A lot of small and medium sized businesses are starting to see new opportunities. There are still some big hurdles to overcome. Not least sourcing funds. James Codrington, director at investment house Rathbones explained that SMEs - the major employer in the UK economy - do not have access to the fund raising opportunities of the corporates, via bonds, and so have to rely on banks, who arent lending. Thats the sticking point and thats whats being magnified into poor consumer confidence, job losses and pitiful growth. This sub par-growth that we are seeing across most economies is normal for postfinancial crises, Codrington told me.
Paul Cattermull, divisional director at Brewin Dolphin agreed: Dont panic, he said. It looks like a bad cycle this time, but we had a dreadful cycle in 2000. We can chronicle recessions. It went pear-shaped in 2008, 2000, in 1992, 1981 and 1974. We have pretty much 10-year cycles. Its very difficult to model for them, they are all different. So it will improve, he said. Ruth Murphy, also from Brewin Dolphin added: You need to sort out the Armageddon feeling everyone seems to have from market opportunity. Theres a distinct difference between market recovery and the usually far lagging behind - economic recovery. So its not all bad Add to that some comments from recent high fliers in the National Business Awards and you see how this picture of hope emerges. One, a management consultancy, is expanding into new sectors simply by recruiting key skilled staff with high levels of relevant expertise making the most of a skills surplus. Another, an internet service provider, is looking to add 100 new jobs over the next 18 months almost doubling the workforce. And a recruitment agency is looking to add 60. If that sector can see hope, then recovery must be on the horizon!
One of the awards finalists, a price comparison website, has seen a 127 per cent sales increase in the last 18 months. A data centre has seen sales up by 185 per cent in the past four years. A pharmaceutical company has seen international sales rise by 220 per cent in three years. A shipping line last year saw growth of 108 per cent. And its not all from the China route! It specialises in the Caribbean and Latin America. These are the headline successes but it shows that there are avenues to prosperity. But they need help. Going back to James Codringtons comment - that SMEs provide the bulk of the jobs but are unable to access funds this is not a new problem. In many ways that makes it even worse. There has been plenty of time to address this funding blockage. For until money flows again in the economy growth will remain sluggish (one investment manager at JP Morgan said he expects GPD in the UK to grow just 1 per cent in 2012). Weighed down by the euro crisis, UK companies may just have to sit in frustration and watch their counterparts in the US and Far East grow while they flounder through lack of funds. But dont abandon hope
Philip Smith currently writes on small and medium-sized businesses for The Daily Telegraph
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STATEMENT LEAVES FAR TOO MUCH UNSAID

Kicking off our assessment of the Chancellors Autumn statement, BILL MIDGLEY expresses his concerns on the lack of a coherent policy for growth
T H E A U T U M N S TAT E M E N T
o, now we know, or do we? The Chancellor's Autumn Statement has at last spelled out the true depth of the recession and how long it will take to see a return to sustained growth and a balanced budget. A continuing need to borrow to sustain an even a lower rate of public spending and an indication that the objectives that we were encouraged to vote for some twenty months ago are simply not attainable. A dose of realism amongst the obfuscation of the past year and a warning to business, as well as the community at large, of even harder times ahead. That may be acceptable if we have been told all of the story or is this merely another milestone along the revelation as to just how bad the situation is? Low real growth rates in the economy, or even a negative position, no real relief in taxation, other than on the margins, and little real help to business, particularly to those smaller companies so much ignored by Government but so vital to a real and lasting economic recovery. Perhaps we should listen rather more to the Governor of the Bank of England who, when speaking the following day to the Chancellor, started to set out a much gloomier scenario. A longer time to see recovery, banks that would need to strengthen their balance sheets and a European situation far worse than previously acknowledged. A Europe, and to some extent ourselves, operating the 'Micawber' system of Government. In other words waiting for something to turn up, for someone else to provide the solution. Even the Chancellors somewhat feeble attempts to kick start the housing market are flawed and, I suspect, will do little to stimulate demand in the private sector. So far as social housing is concerned the give away of fifty per cent discounts to sitting purchasers is an unfathomable policy at a time when national assets need to be retained not sold off at cheap rates. The Right to Buy scheme has seen a decimation in Council Housing stocks since it was introduced in the 1980s resulting in the present housing crisis which can only deteriorate further over the next decade. Fine to say that the proceeds of such sales will be available for new properties, that is fifty percent only of the market value available, but at a time when local authority borrowing is capped, the ability to replace stock is simply not there. What the Chancellor has shown, however, is his intention to take on the unions on public sector pensions, hopefully enforcing a sense of realism. Whether the long-term determination remains will be proven by events but at a relatively early stage in the life of this Government perhaps he sees it as his 'Thatcher moment'. So where does all of this leave business? The growth of the private sector remains as vital as ever to real economic growth and yet the assistance, or perhaps the understanding of such assistance is needed remains obscure. Much has been said about the attitude of the banks but we only now realising the real
extent of the potential crisis within the banking system. Rumours of the impending collapse of a French Bank do little to inspire confidence in our own banks doing anything other than sitting tight yet an economy that needs to grow requires capital. This applies to all sizes of businesses but the real potential has to be in the establishment of new companies and the growth of the SME sector. A spread of risk across many markets. So where is the initiative in Government? The Chancellor's Statement leaves far too much unsaid. It does not set a coherent policy for growth. Perhaps that is expecting too much given not only Europe's problems but even the possibility of economic turmoil in what have been to date rapidly growing economies in other parts of the world. Businesses, however, do have to plan and planning in a vacuum is not a worthwhile effort. Business has to accept that little help or understanding is at hand and it must look to its own efforts to grow and prosper. Perhaps more novel ways of raising capital will have to be explored or even an extension of what has only been open to larger businesses, such as the Bond market, will take up the void left by the banks. But a policy that recognises that today is as good it gets may be no bad base for corporate planning. Those who adopt a realistic approach are most likely to be in the forefront of any upturn as they will be the survivors. As for the Chancellor, he still needs to get a grip on what business needs. As and when the business community produce the recovery that he hopes for he, and his Parliamentary colleagues, are likely to be the beneficiaries.
Bill Midgley is a past president of the British Chambers Chambers of Commerce
BUSINESSTODAY 15
SUPPORT FOR BUSINESS WELCOME

BUT GREAT UNCERTAINTY REMAINS
BUSINESS TODAY canvassed the opinions of the main business bodies to get their take on the Chancellors Autumn Statement
he Chancellors recent Autumn Statement received a mixed response from key business organisations. While most agreed that George Osbornes hands were effectively tied due to the die straits of the public finances right now, some felt he could have done more to stimulate and support business growth. Talking to Business Today, John Cridland, CBI director-general, said: This autumn statement works with the realities of today and provides an imaginative framework for UK businesses as it strives to secure growth and jobs. This is "Plan A plus" in all but name. "The downgraded forecasts and outlook were no surprise, but the eurozone crisis is still hanging over us. The Government's dogged commitment to budget deficit reduction remains the only way to maintain the UK's triple A credit rating and low interest rates on international money markets. Referring more particularly to support for business, Cridland added: "The National Loan Guarantee scheme is a necessary pre-emptive strike to safeguard bank lending to SMEs. With the pressure on bank balance sheets, this is practical and immediately available help. "We are [also] delighted that our campaign to gain support for medium-sized businesses has been heeded and we warmly welcome the Business Finance Partnership and measures to support exports." The British Chambers of Commerce message was similar in tone: more support for businesses was welcomed, but uncertainty remains. John Longworth, director general of the BCC, said: George Osborne needed to deliver an Autumn Statement that provided a credible plan for business growth while maintaining the UKs fiscal credibility. Under tough circumstances, he has managed to propose a number of measures that will be welcomed by business. In particular, companies will welcome the Chancellors renewed commitments to reform employment law and simplify the planning system. Businesses will support the
WE HOPE THAT THE BANKS IN THE NORTH EAST WILL PASS ON THE LOWER INTEREST
RATES TO SMALL BUSINESSES AND THAT MORE FINANCE WILL BE AVAILABLE
16 BUSINESSTODAY
aim of credit easing, but will be watching carefully to ensure that viable small-and medium-sized companies can access the finance they need to grow. Ahead of the Autumn Statement, we urged the Chancellor to invest further in infrastructure, give more support for exporters, and introduce measures to help businesses invest with confidence. He has responded in part to each of these major concerns. The headline figures in the Autumn Statement were, undoubtedly, the dramatically downgraded predictions for economic growth by the Office for Budget Responsibility (OBR). Commenting on the OBR forecast, David Kern, chief economist at the BCC, told Business Today: As expected, the OBR forecasts for both growth and borrowing are much worse than in the March Budget, but we believe they were too optimistic from the start. The situation has deteriorated in recent months due to events in the eurozone, the squeeze on incomes, and the impact of the austerity plan. The OBRs new growth forecasts are disappointing, but they confirm our judgement that the UK will avoid recession at a time when the eurozone, our largest trading partner, is likely to move into negative territory. With the OBR predicting an unemployment rate of 8.7 percent next year, and given the high number of job losses expected in the public sector, it is crucial that the government does everything possible to help the private sector create jobs. Although we believe the new borrowing forecasts are slightly pessimistic, we understand the OBRs caution. The positive steps announced in the Autumn Statement should be implemented as quickly as possible; it is now time to translate words into action. The role of the banks, clearly, will be crucial in the coming months and years. Asked about
how much the Autumn Statement has done in terms of freeing up lending and creating greater liquidity, British Bankers Association (BBA) chief executive Angela Knight told us: This Autumn Statement makes a serious addition to the large sums already being lent to the business community by the banks. With the eurozone crisis putting lack of confidence at the top of the list of concerns in every comprehensive survey of business, this Statement makes it clear that money is available for viable businesses. On credit easing, Knight said: This initiative gives business what they seek by making more finance available and providing a wider choice of options. They use the Government's positive credit rating to make the finance cheaper. The banks will play their part in making this happen - over and above the increased lending that is taking place and the other commitments the industry has made both to business and Government. Businesses are currently borrowing around 664bn from the UK's high street banks. Independent research has found that the main disincentive to borrowing is continuing concern about the economy. The times are uncertain and the more confidence that can be given about the supply of credit the better." Knight added: One of the consequences of the ongoing criticism of the banks has been that small businesses have been discouraged from applying to them for credit. Restoring confidence in the lending process has therefore become increasingly important. In the past few months alone, the banks have created and financed a UK-wide network of 11,000 business mentors, an independentlymonitored appeals process, a 2.5bn Business Growth Fund for equity investment in growing businesses and conducted 17 roadshows where representatives of more than 2,000 businesses have gathered to meet
with bank executives. Together with [the] announcements from the Government to support businesses, these initiatives should provide companies of all sizes with the assurance and confidence to borrow for growth. In terms of smaller businesses, The Federation of Small Businesses (FSB) in the North East welcomed the Chancellors Autumn Statement saying that it is a step in the right direction to help small firms that are central to economic growth and job creation in the UK. The FSB said it was pleased that the Government has enhanced the seed enterprise investment scheme which will offer greater reliefs on capital gains and income tax for people investing in small businesses. This will give start-ups and fledgling businesses the chance to by-pass the high street banks and find alternative sources of finance. It also suggested that extra funds for small businesses through the credit easing scheme is also to be welcomed, suggesting that this should help to decrease the cost of finance for small firms and hopefully increase the amount of lending to small businesses especially with recent figures from the Bank of England showing that lending fell in recent months. However, the FSB did express concerns that guaranteeing the loan books of existing high street banks may serve to reinforce their market position and argued that the Government must therefore go further to promote the emergence of alternative forms of finance and greater competition in the banking sector. Ted Salmon, FSB North East regional chairman, told Business Today: Taken as a package, the announcements in the Autumn Statement address many of the concerns raised by small businesses and are therefore to be welcomed. The key now is for the Government to be consistent, and set to the task of translating these policy intentions into tangible actions on the ground. Targeting the rising cost of overheads is imperative to help firms in the North East weather the economic storm that could be heading our way, so measures to limit the rise in fuel prices and business rates are very welcome. Small businesses are struggling to access finance and so the enterprise investment scheme will open up new sources of finance for new and growing businesses. We hope that the banks in the North East will pass on the lower interest rates to small businesses and that more finance will be available. Finally, we got the thoughts of Phil Orford, chief executive of the not-for-profit small business body the Forum of Private Business. He said: We welcome the announcement of 50 per cent income tax relief and a one-year
capital gains holiday for those investing in start ups under the Seed Enterprise Investment Scheme (SEIS), but the Government should have acted to encourage private lenders too. Small firms need a range of funding options, and equity finance is certainly one of these, but lending at interest remains their preferred route by far. Combined with these tax breaks, the Governments new credit easing scheme and an extended Enterprise Finance Guarantee (EFG), providing incentives for new lenders to compete with the high-street banks would be more likely to boost competition in small business borrowing markets, driving up
rates, but we need to go much further and introduce real tax reforms in order to help them to grow and create jobs. The Government is extending the rate relief holiday by six months and allowing businesses to defer 60 per cent of the RPIlinked business rate increase in 2012-13. This will help but it is not the freeze we asked for. Further, scrapping Januarys 3p fuel duty rise completely and reducing the increase scheduled for August is good news but we wanted all fuel duty increases scheduled for 2012 to be postponed.
levels of service and bringing down costs. It is a shame this has not happened. In its submission to the Chancellor ahead of the Autumn Statement, the Forum called for tax incentives for private lenders similar to the 30 per cent tax relief available for equity investors under the Enterprise Investment Scheme (EIS). The Government also announced several measures on tax specifically fuel duty and business rates. Mr Orford added: I think we have seen some tentative steps towards easing fuel duty and business
BUSINESSTODAY 17
THE FAST TRACK TO SUCCESS

The British Library's Business and IP Centre has helped many fledging businesses off the ground, providing a range of free resources, networking and advice. BRETT MATHEWS met with five recent success stories
Jessica Ratcliffe
ENTREPRENEURS
Anthony Lau, managing director of Cyclehoop Ltd

Tell us about your business?
I designed the Cyclehoop in 2006 after experiencing the theft of my bicycle. I had securely locked it to a sign post and the thief had taken off the sign and lifted it over the top. This inspired me to design the Cyclehoop as a simple solution for converting existing street furniture into secure bicycle parking. It is now used by over 50 councils in the UK and in Europe.
Jessica Ratcliffe, founder GaBoom

GaBoom (gaboomswap.com) is a peer-to-peer video game swapping website. Were a place where gamers can get the video games they want, using the video games they own by swapping them with their fellow gamers.
What has been your biggest break in business?

Introducing a new product to the market is never easy especially with local authorities who are my main client base. Getting our first trial with a London council was a big break for my business.
Did you always want to be your own boss?

Yes, Ive wanted to run my own business ever since I can remember. I first had the idea for GaBoom when I was 15 years old!
How hard has it been trading in a recession?

With the effect of recession on the economy, local council budgets and funding are being cut and this will affect how much they invest in transport infrastructure which would affect the sales of street furniture. However cycling is a growing activity and will continue to have support from local authorities as an ecofriendly form of transport.

I spent four years working at Tasou Associates, an architects practice in London. I learnt a lot working under my old boss Tom Tasou and it has taught me many things which helps me to this day. I knew I was going to be my own boss one day.
How difficult is it to get a fledging business off the ground in the UK?
I strongly believe that you can start an online business and get your idea out there for very little nowadays. There are so many tools that can be leveraged to help raise awareness of your business, such as social media.
How difficult is it to get a fledging business off the ground in the UK?
Starting a business was very easy in the UK. There is plenty of excellent support which is freely available to help entrepreneurs. The British Library Business and IP Centre provided excellent support in setting up a company, finance, market research and free intellectual property advice.
What advice would you offer to other, budding entrepreneurs?

My single piece of advice would be to trust your gut instinct at all times. Always listen to your gut instinct when making decisions and if it is telling you not to do something, dont do it! Ive gone against my gut instinct a few times since starting GaBoom and Ive regretted it.

If you are employed and want to start a business, try and initially run it in your spare time. This might be harder work but it is a safer option and allows you to finance the business through your day job.

To date, my biggest break would have to be appearing on BBC Dragons Den. We had so many people go to the website after my pitch aired that the website crashed. It was a great opportunity to raise awareness of GaBoom to millions of people.

If anything, it has helped because people are looking to find alternative ways of getting the video games that they want. With video games costing on average 40.00 a go, it is an expensive passion and we hope to be the solution that people come to, to save themselves a lot of money by swapping their games instead.
Anthony Lau
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Emma-Jayne Parkes, and Vivian Jaeger, founders SquidLondon

SquidLondon produces colour changing umbrellas, shower curtains and rainwear. The beauty of the products comes alive when rain falls on them. Currently, Squidarellas are available in 12 major cities worldwide including London, New York, Paris and Tokyo.
What advice would you offer other, budding entrepreneurs?

Its crucial to speak to people and to listen to their opinions. Dont, however let anyone hinder or cloud your judgement. No matter how daunting peoples comments or advice might be, dont let it scare you.
Piers Curran, the founder of Amplify Trading

Amplify Trading is a proprietary trading company specialising in the development of new trading talent Piers Curran offering direct experience in financial markets. It provides intense training programmes and has built a team of well respected traders and financial market analysts who continue to profit from market volatility.
ENTREPRENEURS

Emma-Jayne Parkes, and Vivian Jaeger
We have always been very independent people. Being designers at the London College of Fashion, we both learnt that it was a crucial asset to have. You have to independent, otherwise getting the work done is almost impossible.
Being stocked in the Tate Museum has definitely been our biggest break so far. It was our first huge client and made us realise that this was the market that really suited our products.

Yes - I grew up in a very entrepreneurial family. My father has run his own businesses since before I was born. My brother runs his own business.

It has been tough. You can definitely feel it more when dealing with certain countries, especially when clients start placing minimum orders. We understand the importance of compromising to meet clients needs because the way we look at it, if we make them happy, hopefully this will lead to repeat custom.
How difficult is it to get a fledgling business off the ground in the UK?
It is a huge challenge. Getting from start up point to the next step is by far the toughest part of the journey. After the initial stage of sending out a few products to potential clients, the challenge is to take the next step up the ladder and start securing business.
It is not difficult at all as long as you have a good business idea, the motivation and drive to deliver it and enough funding to make it a reality. People too often complain about red tape etc being a barrier to starting a business - this is just an excuse, if you really want it you make it happen no matter what.
Cate Trotter of Insider Trends

Insider Trends delivers trend tours and 'fat free' trend talks. A trend tour takes the client's team into the stores, restaurants and other spaces that show how the future of a particular topic is coming to life.

Make sure you know why you're setting up a business is it to focus on the thing you love, or is it to make more money in less time? If you want to focus on the thing you love, great, but I see a lot of people who end up working very hard for an average amount of money.

My biggest piece of advice is make sure you are prepared to work hard. A lot of people think that becoming you're own boss means that you will have more flexibility with how you manage your work commitments. I have never worked harder in my entire career than I have done since setting up Amplify.

Winning the contract to train HSBC's graduates. This was huge for us as it shows that we have arrived on the big stage. If one of the worlds biggest companies recognises the value and expertise of our training then this is a huge boost to our credibility within the professional education industry.
Cate Trotter
No. But when I decided to become a trend spotter and found that no one else was specialising in trend tours in London or even anywhere else in Europe, I saw a big opportunity.

Simply setting up and search optimising our website. A website that appears in search engines, and describes your offer, its USPs and benefits clearly when visitors arrive can absolutely transform your business.
If you've got a killer idea that's well researched, you clearly understand what makes you different and better from your competitors, you're happy to learn new skills and ultimately put the hours in, you'll be fine.

It has been tough there is no doubt about that. However, it is survival of the fittest. There is nothing like a good recession to streamline the players within each sector. It is during tough economic conditions that you really find out how good your business model is.

It has been tricky, but by being smart about how we use our time and money, and having a unique service with clear benefits, we've managed to substantially grow the business.
BUSINESSTODAY 19
PEOPLE MANAGEMENT IN A DIFFICULT ECONOMIC CLIMATE

Its fair to say that business is tough at the moment unless youre one of those businesses that are thriving, having seen the current economic climate as an opportunity for growth. If this is the case, then well done and keep on with what you are doing. However for many businesses, the converse is true and making profit is a bit of a struggle. How then can you cut your overheads, increase your profit margins but keep going long enough to get through the other side? One way is to cut your staffing levels as an easy way to take costs off the bottom line. If this is what you are considering, be aware that making staff redundant will actually cost money in statutory redundancy and notice pay. It may be more prudent to consider some of the alternatives;
BUSINESS ADVICE
Neil Crockett
Increase employee engagement

It may sound simple, but employees who are more engaged and motivated will be more productive, take less time off and put in more discretional effort, in turn becoming more profitable for you.
Employee development
Providing training and development to your staff shows a longer-term commitment to them, indicating that you see them being a part of the future. NVQs and degree qualifications will bring fresh knowledge into the business, promote confidence, help with your succession planning, whilst reducing your staffing turnover rates.
LONDON 2012: HELPING TO BUILD A BRILLIANT FUTURE FOR UK SMES

NEIL CROCKETT, MD Cisco London 2012, looks at how small and medium enterprises can maximise on both the short and long term benefits of the London 2012 Olympic and Paralympic Games
Innovate
Albert Einstein said the definition of insanity is doing the same thing over and over and expecting different results. If what you are doing isnt working, think about doing things differently. This may be an enhancement of your product or service offerings, or a complete refocus. Involving your employees in the innovation process will also make them feel they have some involvement in the business and their own future.
ith the London 2012 Olympic Games drawing nearer, excitement is increasing in the build up to this momentous event from both a personal and a business perspective. Independent research conducted by Cisco last year found that 41% of UK SMEs were awake to the opportunities that London 2012 will present for them, and 39% recognise the role it will play in kick-starting the UK economy. But whilst opportunities to grasp contracts and tenders may now be drawing to a close, there are still ways for SMEs to benefit from London 2012. Whether businesses are seeking employee satisfaction or long term growth from the Olympic Games, it is not too late for UK SMEs to capitalise on this once in a lifetime event.
Embracing Opportunities
Its long been an assumption that only large London-based enterprises with big budgets and never ending resourcecan achieve any real business benefit from the Games. However, SMEs outside London and the South East have been awarded prestigious Olympic Games contracts and theres still the opportunity for SMEs to be involved. The Games is already playing a vital role in our economy. According to figures published in 2011 by the Olympic Delivery Authority (ODA), 1,200 previously unemployed local people gained work on the Olympic Park. Additionally, more than 3,000 training places have been generated and 408 apprentices have been offered the opportunity to work on the Games.
Communicate
Whatever you do; communicate clearly and openly with your staff or risk de-motivating them. At the very least tell them what you are trying to achieve for the business overall as it will be appreciated by them and help reduce their worries. They are also more likely to get behind you if you provide clarity; as after all unfounded rumours never helped anyone. If you need to discuss any of the above in greater depth, then contact Alasdair on aross@wedohr.co.uk or 07866 250690
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LOCOG itself will award over 700m worth of contracts before the Games commence in July 2012.
Employee Engagement
What is crucial now is for SMEs to maximise on the diverse business opportunities this amazing event does, and will, offer. Now is the time to start looking at what you are doing internally and share the magic of the games with your team. However, vast waves of SMEs have not even started thinking about this part of the London 2012 opportunity. For example across the country many businesses have yet to plan how they and their employees will watch the exciting Olympic Games coverage. In a recent survey, we found that only 10 per cent of workers are currently aware of plans to watch the Games in their place of work. Whilst many companies may not be participating in hospitality at the Games, arranging to simply watch the Games together at work is a great and affordable way to enhance teambuilding and employee satisfaction. After all, this is a once in a lifetime event for the UK and if embraced, the Games could really help unite your workforce. A get together in the office to watch the final of a major sporting event can only build morale, inspire workers and improve camaraderie.
Im not saying that during Games time the office should come to a standstill whilst everyone enjoys the action but if managed correctly, London 2012 has the potential to be uniting rather than disruptive. Of course employers need their businesses to continue trading as normal so its important to start putting plans in place now on the best way to engage with your workforce during this time. Remote working is on the increase within businesses in general. Yet only 2% of workers surveyed were aware of plans by their employers to introduce flexible working facilities during the Games. With the influx of additional visitors to London and surrounding Olympic Games venues, a flexible working scheme where employees are provided with technology such as Cisco WebEx so they can stay connected to colleagues and customers wherever they are is surely worth considering. As the big event approaches -and with the appropriate plan of action in place businesses can maximise the potential of the Games to generate revenue and customers.
At Cisco, we are committed to our role as the Official network infrastructure provider for London 2012 but we see our Olympic Games investment as long-term. The Games can act as a catalyst and platform for SME growth and we plan to help such businesses in the coming years. The British Innovation Gateway (BIG) campaign, announced by David Cameron and Cisco CEO, John Chambers in January 2011 set out plans to help build a brilliant future for technological innovation in the UK. BIG is a five year programme to discover and develop a new generation of innovative hi-tech companies to help create new economic growth. I am confident that London 2012 will offer SMEs the opportunity to grow their businesses by connecting them to other organisations across the country, making the UK an environment in which start-up digital businesses and their ideas can flourish. The Olympic Games can act as a platform for SME growth which spans far beyond Summer 2012. As long as businesses plan, prepare and capitalise on these opportunities, the Olympic Games is sure to play an integral role in the UKs sustainable prosperity and long-term SME growth.
Cisco is the official network provider for London 2012
T H E O LY M P I C S
Building a brilliant future for SMEs

Whilst there are many opportunities before and during the Games, SMEs can also look forward to the legacy that London 2012 is leaving behind. Many long-term benefits for SMEs will emerge at the closing ceremony not end there.
Business Today
Business Today is a UK national business title and is produced in print and digital formats, which includes e-books and web portal sites. Our online knowledge sharing format enables users to search easily for information relevant to their day-to-day activities and to find out how others employ good practice in those areas. In addition, it allows for feedback and updates, all aimed at helping to build the quality of information available. The site contains current news, interviews, video presentations, web casting, live feed to current business news and opinion opportunities. Todays business leaders are facing increasing challenges in the dynamic and changing world of business. Responsible for making difficult and crucial decisions to ensure the growth and prosperity of their companies, it is important that they have first class information on which to base their management decisions. The key issues facing top business leaders today requires them to have knowledge on a wide range of subjects, from pensions, finance and property to information technology, management training and outsourcing. In addition, todays business leaders need to be constantly kept abreast of world business developments to ensure they make sound strategic decisions in securing the future growth of their companies. Business Today covers a broad range of important topics ranging from trade and global economic issues to financial, legal and environmental matters. Through its in-depth analysis and insightful editorial, it brings to senior executives subjects of vital importance for sound company management. Articles written by key executives who are shaping the future of UK business explore the latest thinking in steering successful companies through challenging times.
www.uk-businesstoday.co.uk
BUSINESSTODAY 21
ARE APPRENTICESHIPS GAINING POPULARITY?

As youth unemployment levels hit record highs and the Government announces new schemes to help businesses boost their productivity and train their workforce, TERRY WATTS discusses the growing popularity of apprenticeships and their business benefits
WORKFORCE DEVELOPMENT
he word apprenticeship means many things to many people. For some it conjures up images of seven years indentured trade training, for others it means a highly visible TV show starring Sir Alan Sugar. To the canny employer however, it can and often does mean a number of additional benefits. With an increasing ageing workforce across the process and manufacturing industry, there is a real danger that invaluable skills will be lost if there is not a process for experienced staff to pass on their years of knowledge. Apprenticeships, designed by employers to meet the needs of the industry, ensure business continuity. They provide opportunity for the transfer of skills, expertise and knowledge and ensure that current and future workforces learn the skills that work best for the business. Apprenticeships are an excellent way for people to gain nationally recognised qualifications and workplace experience while getting paid at the same time. Apprenticeships are work-based training programmes that allow people to earn and learn at the same time. They combine on and off the job training to ensure that learners are trained in the skills that are relevant to their work, delivering real returns to the bottom line, helping to improve competitiveness and productivity. There is a common misconception that apprenticeships are for the younger generation but that is just not the case; they are a great way to retrain or up skill existing employees and, as youth unemployment soars and people are looking to learn new skills, apprenticeships are making a comeback. A training scheme earlier this year launched by the government saw a near 900 per cent increase in the number of apprenticeships begun by those aged 60 and, an increase of 18 per cent for apprenticeships begun by 18-yearolds. The scheme was originally intended to ameliorate youth unemployment but when businesses are still recovering from the
recession and there are still headlines of job losses and pay freezes, a scheme which allows businesses to train and up skill their existing staff is only common sense. However, the Government has now announced its plans for growth and Ministers are taking action to make it easier for companies to take on apprentices by providing a financial incentive to help the smallest firms recruit apprentices and ensuring that the quality of apprenticeships is continually improved. To some businesses this may not be appealing. To take on an inexperienced employee when times are tough, surely isnt sensible and not worth the time when all your resources should be in business development. But the truth is apprenticeships offer fantastic opportunities for every party and are available to every industry and occupation. On the other hand, there are some businesses who want to do their own training in a way
that is unique to their business and even a tailor-made apprenticeship sometimes doesnt fully fit the criterion. In many cases, this leads to employees receiving training that isnt recognised outside of that company and means businesses are potentially missing out on public support and funding. How can employers get the best of both worlds? By expressing their opinions and coming together as one coherent voice. This is often the only way to what employers really need from Government. Despite the financial uncertainty, there is support available for companies who want to invest in their business and in the skills of their employees to drive growth. We need companies to step forward and play an active role in shaping their future workforces. Take charge of your business, your industry, your training and come together now. As your Sector Skills Council we are here to support you.
Terry Watts is CEO of Proskills
BUSINESSTODAY 23
ACHIEVING FIRST CLASS SKILLS

BUSINESS TODAY turns the spotlight on NCG, and finds how it has become a leading operator in workforce development
PROFILE
eople development can be a key differentiator between organisations in challenging economic times. For clear proof of this, take a look at the FTSE100 companies and, chances are, you will find comprehensive, robust and systematic people development programmes in most if not all. One organisation which can certainly vouch for the fact that a well trained member of staff equals a more motivated team member who is better equipped to carry out their role is NCG. NCG brings together over 40,000 learners, over 3,300 staff, across three divisions at over 100 sites, to form one of the largest education, training, and employability organisations in the UK. As an organisation, it promotes the idea that one of the best ways to achieve first class skills, employability and training solutions is through the formation of strategic partnerships with forward thinking organisations who share its vision and passion for outstanding education and training. NCG has three divisions, Newcastle College one of the UKs top performing Further and Higher Education colleges, West Lancashire College and The Intraining Group Ltd based in Sheffield, all of which have been rated "outstanding" by Ofsted. Joanne Charlesworth head of workforce development for Intraining, says: Integral to our approach is that our national spread enables us to provide localised support for employers through our large team of experienced consultants. We understand local training requirements and issues and can tailor our training packages accordingly. We work closely with regional and national employers across all sectors delivering accredited training that focuses on practical, real world competence. Our Government funded work-based learning and vocational training programmes are making a worthwhile contribution towards plugging the national skills gap, helping UK businesses to become more viable and sustainable for the future. Joanne says: An apprenticeship is a work based training programme that consists of NVQs, technical certificates and functional skills, including numeracy, literacy and IT skills. For employers, this can be both a cost effective recruitment solution as well as a way to improve the skills of existing staff. At NCG, we work closely with employers and apprentices to ensure both parties are fully engaged and get the maximum benefit from the programme. Learning must be tailored to the unique requirements of the organisation and can be delivered flexibly in line with the needs of the business. Contrary to popular belief, apprentices can be any age. Often, says Charlesworth, they represent fantastic value for money as they enable an organisation to develop a person from scratch within the culture and methods of their particular business. Joanne points out that the UK apprenticeship environment is changing fast with, increasingly, apprentices being supported by government to progress into Higher Education. In essence, this means that competition for apprenticeship places is becoming decidedly strong as taking this route can provide young people with an opportunity to earn while they learn as an alternative to building up huge debts while at university. The net result of this is that employers choosing an apprentice get to pick from a strong group of bright, highly motivated people who can bring great added value to their business from a relatively early stage. Intraining utilises the National Apprenticeship Vacancy Matching Service (NAVMS) website, a government funded
online service developed by the National Apprenticeship Service (NAS). By working with employers Intraining can advertise apprenticeship vacancies through the website to enable businesses to find the perfect candidate. Says Joanne: When the right candidate has been selected, Intraining can then work with your company to provide apprenticeship training, tailored to your specific needs. All Intraining programmes are delivered on site with the minimum of disruption to the working day. Every employee receives 'hands on' coaching from their personal trainer, often with the back-up of innovative e-learning programmes, designed and facilitated by Intraining.
NCG FACTFILE:
As a national organisation NCG is able to respond to new developments quickly and efficiently. Developing and sharing the key services needed by all divisions allows it to do this in a highly costeffective way, enabling NCG to maximise its use of the resources available, minimise duplication and capitalise on the size and reach of the Group. Objectives Put the needs of the learner and customer first Innovate and support excellence in learning and employability Promote diversity and social mobility Value, involve and invest in our staff Foster strong relationships with employers, partners and communities Secure our future through strategic investment and profitability
Apprenticeships
Apprenticeships are an area where NCG has helped thousands of young people and employers over the past few years. For many organisations, there is uncertainty about what an apprenticeship actually entails and how it can benefit their business.
CONTACT
For further information see www.ncgrp.co.uk
BUSINESSTODAY 25
A risk worth taking?

BUSINESS TODAY talks to Geoff Trickey, whose company the Psychological Consultancy has done some pioneering work in the area of attitude to risk and the implications for training
Why is it important to understand a managers risk profile?
Firstly, and most obviously, it is useful to be able to place managers (and other employees) on the spectrum between over cautious and gung-ho adventurous so that you can evaluate their actions and their likely responses in that light. In other words, it allows their own managers to manage them appropriately. The interpretation of instructions and policies will reflect their appetite for risk. Could you tell us about how your own risk profiling works? Which types of staff do you work with and how do you look towards developing a profile of somebody? Risk taking is embedded in personality so we deconstructed personality assessment to identify all the elements that might have implications for risk appetite and reaction to things going wrong. The result of our research identified four clear factors and these became the four poles of the Risk-Type Compass. The final version of Risk-Type Compass identifies people in one of eight Risk Types four pure types (the original poles) and four complex types (people falling at the quarter points) who have a blend of the characteristics of both the poles on either side. The Risk-Type Compass is used by financial advisers to assess their clients propensity for risk (an FSA requirement), for personal development, for coaching of senior staff, for team building or for part of a selection process. We have researched the Risk-Type Compass with IT professionals, recruiters, police officers and fire-fighters.
Based on these profiles is it fair to say that some people simply arent fit for senior roles in organisations?
No. The critical issue concerns self awareness. Organisations require risk takers as much as they require cautious and wary types. The problems arise when you dont know yourself well enough. We have been dealing with this question in relation to auditors; can you justify declining applications from Spontaneous, Carefree or Adventurous Types? Again, the issue is whether they are sufficiently self-aware. Within an organisation Risk Type may well influence which desk, which team or which specialism you would be best suited for.
What are the implications of not understanding a managers risk profile?

Ones Risk Type is not visible and, in the company of their superiors, people will restrain their behaviour (we all do it) so, typically, we only learn about an employees propensity for risk if and when their reputation catches up with them. An instruction or encouragement that doesnt take Risk Type into account may tip the response too far, or not far enough.
What are the implications of the recession in terms of managers reverting to type where risk is concerned?
The dangers are probably greatest when people act on their instincts rather than using their heads. Recession and the associated uncertainty has a general and pervasive inhibitory influence that will effect all Risk Types. The tendency is for people across the board to take less risk this is what slows commerce down and dries up the money supply and the wholesale money markets. People tend to act like sheep in this situation. The records in borrowing that characterised the boom years reversed almost overnight to break records in the repayment of personal and corporate debt after 2008. Recovery relies on people being prepared to take risks again. The risk takers will be the first to sense an opportunity and we are all reliant on them to get things restarted. I expect the shoots of recovery to come from the countless small businesses where the entrepreneurial spirit is strong typically run by the Adventurous and Intentional Types. They will spot the opportunities at the micro level of the economy and make the most of them. My advice to government would be to scrap red tape, ease employment restrictions, incentivise small businesses through employment schemes and tax breaks in order to share the burden of risk that we need them to take.
Do you think the ideas and theory around risk profiling have implications for the boardrooms in UK plc generally?
The general rule is that, the higher you get in the structure of the organisation, the less likely you are to feel the need to hold back or to restrain your true nature. This applies to risk taking as well as to other features of personality. The opportunities for risk taking are also greater so, yes, the implications for the board room are considerable. The greatest threat to personal restrain comes in times of stress, or intoxicating success. In the first instance, stress leads you to regress to your more primitive self. In terms of Risk Type, this may mean that you withdraw and become paralysed by inaction, or conversely, that you become increasingly reckless, doubling up on your bets until youre broke. In the second instance, success leads to feelings of invulnerability and you have total belief in your own abilities. We certainly saw some of this in 2008/9 as major banks imploded with their top brass in total denial.
26 BUSINESSTODAY
MAXIMISING EMPLOYEE POTENTIAL

Providing a clear career path can be a much more effective way of holding onto your best people than a pay rise, argues MIKE COTTON
isibility on high performers has multiple benefits across SMEs, therefore it is crucial that organisations engage in Performance Appraisal Processes (PAPs). PAPs, particularly online systems, can increase accountability across the company, providing a standardisation which gives employees ownership over individual career goals and gives management insight into performance. Amongst the most important benefits, however, is the alignment of the individuals goals to the company goals. Goals are cascaded down from the CEO to managers and all other employees, which enables everyone to align their goals to those of the overall organisation. Engagement in shared responsibility is a key factor in organisations that prove successful, even in difficult economic times; research shows if every employee in an organisation is aware of the companys goals and their role in achieving these, organisations ultimately gain a crucial competitive edge. Research also shows that good people management reduces absenteeism, increases productivity and assists with retention of key personnel. Research by the Chartered Institute of Personnel Development (CIPD), PwC and the US-based Bersin and Associates demonstrates that these are unarguable business benefits that either save or make money for a company. One recent survey showed that the majority of employees leave their jobs because of a lack of progression opportunities, rather than leaving because of a low salary or a bad manager. With this in mind, it is vital that key performers are nurtured to ensure that they remain with an organisation, working towards the companys objectives.
The PAP helps with the visibility of high performers, ensuring that they are recognised and developed within the organisation. While the system identifies those who are underachieving, it also provides the tools necessary to ensure that they too learn and develop, and ultimately become better performers and employees. A Personal Development Plan (PDP) that offers information and results in real time is also vital for business success. A PDP provides a framework that allows individuals within an organisation to identify the areas of their strengths and weaknesses, and capitalize on their existing capabilities and skills. Implementing an effective PDP alleviates the need for managers to spend vast amounts of time monitoring employee development. An effective solution should allow employees to create a PAP for themselves based on their role and any future roles they have agreed with their manager or organisation as a whole; once this is created a PDP can be developed, ready to action over a specific period. By aligning PDPs with smart goals and cascading these down from the CEO to corporate, the objectives of the overall organisation are clearly visible and individuals can see exactly what impact they are having within these objectives. They can see where they sit within the company and identify not only the areas in which they need to improve, but also the means by which they can do this. When the organisation is aligned as much as it can be through a system, employees can see how their components feed into the overall organisation strategy and realise the implications for the organisation when they miss their individual goals or targets.
The PDP focuses on what the employee wants and needs to improve themselves, while cementing the idea that there is value to every single person within an organisation. It presents an opportunity for each employee to move forward along their career path, outlining what achievements are necessary in order to reach the next level within their role. A PDP can also be put in place for a future role that individuals can then work towards. The fact that this plan is clearly visible within the organisation gives employees further support and encouragement. When an employee can clearly see that they have a plan in place to become, for example, an area manager within three years, the likelihood of the company retaining them is increased. As the employee drives towards this future plan, their capabilities and delivery are increased, thus yielding a positive effect on the organisations overall ROI. Maximising the potential of employees is fundamental for the success of any business. Deploying the right people to the right tasks, developing the skills of your employees in the competencies needed to complete their goals and effective succession management are all tasks that are fundamental to maximising the full potential of human capital. Solutions which provide a streamlined and effective method of managing these tasks will ultimately ensure a company is well-placed to compete in todays challenging marketplace.
Mike Cotton is a talent development specialist for MindLeaders ThirdForce
BUSINESSTODAY 27
The key factors in quality leadership

MARK LANE talks to Ashley Ward, managing director of European Leaders, about the issue of management and leadership development in the UK
Hello Ashley We hear a lot about how poor leadership is a major factor in terms of holding organisations back. Just how big an issue do you believe poor leadership to be in the UK? Regards Mark Hello Mark Who would dare disagree with the notion that the single biggest arbiter of company performance is the performance of the people in the company. Take a look at the annual Times survey on the best companies to work for and you will also be looking at a list of the corporate leaders in all of the sectors. Put simply, high performing teams mean high performing companies. Why then, whist we often spend 15 per cent of budget on research and development to produce better products, do we spend just 1 per cent on learning and development for the team and almost nothing on developing leadership. How many business leaders get it? Command and control style leadership doesnt work. Unless a leader can create a culture where talent is allowed to flourish that leader will have to settle for the majority of the team holding back. Research shows that 65 per cent of employees do hold back capability and effort because they dont feel part of the company and dont believe the company deserves more. Quality leaders get at least 30 per cent more from people than the old style micro managing, bullying, macho tough guy whos only real motivator is fear. These people have thugged their way into the top slots and remain unenlightened to the potential under their leadership. So quite often the biggest gating factor on company performance is the boss. I think you make a great point about fear being the only motivator of some leaders. Talking to a few friends about the issue of work generally and the recessionary climate we are in it is interesting that many of them are de-motivated at work right now, primarily because management are starting to get tough, almost as a means of bullying staff into working harder as they see figures falling in the business. Which, based on what you are saying, will have precisely the opposite impact to the one intended? The old adage, a problem shared is a problem halved also works in the corporate sense. If all staff are engaged and leaders are transparent about the businesses performance and risks, it is far more likely that employees will care enough to give their all, both in terms of discretionary effort and in thought processes that might contribute to the prosperity of the business. Those bosses that bully their staff are likely to see zero additional output. A business leader might say, its tough out there, the market is down, its not my fault and that means if you dont work harder for less youll be out of a job. On the other hand, an enlightened leader might say, The market is challenging and we need every bit of our combined brain power to counter what is out of our control. We can take market share, look for new ways to add value to our customers and we can be uncluttered by the unnecessary. When they are under siege, poor leaders tend to operate a blame culture and dump on their team, when in actual fact what is needed is maximum transparency and maximum team involvement. What startles business leaders when they see this is just how much they can get from an engaged team if they are liberated to give their all. An open workplace culture allows people to use their talent to the companys benefit. How much of an issue do you think over-promotion is? Im thinking here about people who might have been trained in a technical role such as an engineer, for instance but who climb the corporate ladder and end up in a management role. Is there often an assumption in organisations that just because somebody knows their job and is good at their job then they will be able to manage and lead a team doing that job? Is being able to manage people a skill that organisations often take for granted when, in fact, it generally requires good training to be an effective leader? Does a world class footballer make a great team manager? Sometimes yes, sometimes no. What cannot be denied is their sector expertise. Formula 1 drivers work with an inner team of psychologists and physiotherapists who are also their closest confidantes. None of those individuals have the talent to drive competitively but they know how the human psyche works and can get the best out of those drivers they work with. As individuals are promoted to the managerial roles, the question that must get asked is, can this person inspire others to release their inner genius? Sadly, the lazy approach to building management hierarchies across industry has fuelled the natural tendency to put inappropriate people in management roles.
T H E B T E M A I L D E B AT E
28 BUSINESSTODAY
Many take the cheap route in looking for a supervisor or a manager by simply elevating the top performer or the longest-serving staff member into the role. This is a cop out and usually fails. I was recently talking to a single mother who loves her sales job in a luxury goods retail environment. Team leaders and supervisors in the company are selected on a longest time served basis which has now resulted in what could be considered institutionalised bullying in the name of management. If the top leadership of that company knew what they were sanctioning, their head would hang in shame. The most likely story is that the chief executive just doesnt get the difference between an average and high performing team. Management and leadership skills come naturally to some but are always enhanced through training. So what is the solution? I guess Im coming towards the age-old question about whether great leaders are born or can be made ie through good training. Whats your take on this? How much difference can training make to the effectiveness of a manager or leader? Id also be interested in your thoughts on how the skills required by a leader change the higher they rise up the corporate ladder and the implications of this for training. Leaders are both born and made. Undoubtedly, there are individuals who are already talented communicators with natural charisma which makes leadership easier but this does not automatically make them great managers. Good leaders can be trained to be great leaders and good managers can be trained in leadership behaviours. Leadership training is a complex science and an art too; there are few places outside our academy that take a truly pragmatic approach without attempting to intellectualise the subject. Our focus is very much around developing behaviours that foster respect and following. We encourage leaders to find their employees genius and build upon that.
T H E B T E M A I L D E B AT E
As business leaders rise up the food chain in a company the element of gravitas comes in. Experience is a key factor in building this but again it is more of a combination of natural charisma, experience and the confidence to be cool and to refrain from engaging in the useless posturing that is so prevalent in those leaders who secretly think they might just be a fraud in the role. The talentless bullies which are so common in our management society need to learn about selfawareness and understand what they look like to others before advancing. Management abuse of power is one of the biggest causes of workplace stress and loss of productivity. Causing stress is one of the great unpunished crimes of business and society at large. Your company has worked with many UK business leaders and managers over the years. How would you rate the quality of UK leadership and management skills generally? Is there any sense that the requirement for a more enlightened type of manager has started to hit home in the past few years? Moreover, do you believe the level and quality of support that our leaders and managers require is actually out there? Running a leadership academy gives us
a favourable view of the countrys leadership. Those that choose to attend are by default the enlightened, since they have chosen the self improvement route. However, they are massively in the minority the tragic truth is that leadership and management talent is woefully lacking. Most managers undertake some sort of management training but this has barely changed since the 1980s. The formal training pays lip service to leadership but rarely catalyses permanent change in behaviours. There really is no qualification that certifies one to lead another. In order to achieve permanent change, participants must recognise that quality leadership is straightforward and mostly involves obliterating certain behaviours. It also requires a respectful attitude and openness and when they get this right, leaders can get 50 per cent more out of people. The old style commander and controller feels very macho and pleased with his or her personal power but usually doesnt realise that they are the cause of their business only running at half throttle. When values and purpose are aligned amongst management, a new world of high performance becomes available.
About Ashley Ward

Ashley Ward is a director at European Leaders, a training forum helping CEOs of venture capital and private equity-backed businesses sharpen their skills to meet shareholder expectations. He is a seven times CEO over 26 years with four public offerings behind him, and has seen extreme learning. As MD of Cray Communications/Anite Networks, he led the turnaround and executed its sale in two parts to Cable & Wireless and Intel. He currently heads up European Leaders performance services and leadership academies. Further information: see www.europeanleaders.com
Simon Griffiths
BUSINESSTODAY 29
Applying behaviour engineering thinking

CLINTON WINGROVE looks at how a more engineeringbased approach to workforce development is leading to better results
Despite the recession and high unemployment, the demand for skilled candidates continues to grow yet the supply in western cultures seems to diminish. At the same time, western organisations in particular are feeling the competition from developing nations which have the benefits of financial growth, lower labour costs, high work ethic and also a ready supply of excellent talent. So, for us, workforce development is now a survival issue. Governments are questioning their education and training policies to see how they can be enhanced; and regions are examining the use of local development funding to enhance the recruitability of the local unemployed. Until recently, much organisational workforce development was focused on jobspecific training (on-boarding), annual appraisal, development for HiPo employees, or general apply for and get training. In many cases, mere planning of development was considered more than sufficient. No longer! Most organisations are now examining the effectiveness (or lack of) of their training and development processes asking, did it happen? and did it work? They need every individual to reach their true potential and are looking to more effective processes they need to engineer behaviour not merely hope for it to happen. Social media, mobile technology, the explosion of information available via the Internet and the willingness of younger generations to work with complexity have all created a new development reality and opportunities. In order to be able to design processes and tools that will ensure that effective development happens, we need to understand how behaviour works; what motivates people to do some things yet inhibits them from doing others. We can use behaviour engineering models such as the one below. It can be applied to explain why and how our values and experiences impact our responses to various impulses such as feedback, development opportunities, development inputs, etc.
that repeated neutral responses to a behaviour/action lead to a cessation, or the initiation of alternate behaviour. This is often what happens with development it is given little, if any, attention and so development efforts decline or stop. So, organisations are now paying attention to workforce development behaviour engineering and: (a) putting in place integrated processes and systems that specifically trigger desired development behaviour. As examples, automated reminders; competency-assessmentbased recommendations; buddying social networks; real-time rater-feedback; websupported mentoring;.... (b) using technology to maximise the probability of positive emotional responses to triggers. Technology increasingly allows users to control their user-interface and choose how and when triggers are delivered. (c) creating development cultures wherein development behaviour is actively reinforced e.g., web-based knowledge-sharing; social media such as buddying tools; and interactive elearning tools to support coaching and mentoring programs.
1. Many behaviours are triggered externally e.g., the phone rings, someone speaks to us, an email appears or a text message arrives. Each trigger sets off an emotional response, largely determined by past experiences and their outcomes. 2. Other behaviours are triggered internally e.g., we suddenly recall the need to speak with someone or a pang of conscience triggers us to call home. 3. Our values are the foundation on which our personal attitudes and beliefs about the world, how it operates and how it should operate are built. These lead to assumptions which then drive our personal needs and wants and thus our emotional responses. 4. Abraham Maslow and Fredrick Herzberg have offered theories of motivation (hierarchy of needs and hygiene factors and motivators respectively) that explain how our value systems combine with our experiences to affect future behaviour. 5. We combine reasoned thought with our emotional responses to the original trigger(s), and determine a course of action. 6. Our action (or inaction) triggers an external response which we process. We often refer to these responses as reinforcement (they initiate or sustain a positive feeling) or inhibitors (they initiate a negative or sustain a neutral feeling). Our value system is either reinforced or modified, thus adjusting our future responses to similar triggers. 7. The response to our action may also act as a trigger for another cycle. A point demanding special note in this model is
(d) monitoring actions and responding with appropriate further triggers (including process non-compliance escalations) to ensure that development actually happens. Another behaviour engineering model that is useful for planning both performance and development is the following:
If we are to engineer development behaviour, we need to ensure that individuals targeted: Know what is expected of them can access role demands; receive timely and specific feedback; can experience assessment; ... Have the opportunity to develop have access; tools; equipment; ... Are capable of seizing those opportunities have the pre-requisite skill and knowledge; have time; ... Are inclined to do so are either selfmotivated or there are sufficient motivators available to ensure that they will engage and sustain development behaviour. The more we understand behaviour engineering, the greater the chance that we can optimise development and thus organisational capability.
Clinton Wingrove is EVP and principal consultant at Pilat HR Solutions
30 BUSINESSTODAY
DONT BE A VICTIM OF IP CRIME

By JACKIE MAGUIRE, CEO, Coller IP
he scale of so-called IP crime which includes misuse or theft of brands, technologies, designs and content is vast. A 2009 report from The Business Action to Stop Counterfeiting & Piracy estimated that annual loss to the G20 economies from counterfeiting is around 100 billion Euros. And while most businesses know that intellectual property (IP) is important, many do not realise that having a comprehensive IP strategy can positively affect just about every aspect of a companys day-to-day business. When it comes to tackling IP there are , three key issues to consider. Firstly, understanding what you have and the value of it. Secondly, protecting it. And finally, looking at how best to enhance and monetise it. If IP is not protected or not protected thoroughly enough, for example in each significant country where it may be at risk there is a real possibility that an organisation could have not just its trading and product names stolen but also its ideas and inventions. The first step is to undertake a thorough audit of all the intangible assets in the organisation. Most people think of IP as filing patents, and perhaps registering trade marks and designs. But a companys real value is far more than that and is contained in its wider intangible assets. This includes socalled know-how as well as branding, skills, policies, creative works and processes. Identification of all the valuable intangible assets in a company can be done internally or by calling in outside specialists to undertake an audit and landscaping exercise. Next, a company needs to ensure that protection is as watertight as possible. Having the right patents and trademarks in place is, of course, important. But other areas also need to be considered. For example, does any company you are thinking of investing in have employment contracts that prevent their employees taking ideas to a competitor? Obtaining patents for innovative developments and your inventions gives you rights to stop others from making, selling, licensing, distributing or otherwise profiting from your invention for a limited period of time in exchange for a public disclosure of that invention. If an organisation is trading, or planning to trade, internationally, the issue of protecting intellectual assets across the globe can be quite intricate, particularly in this digital age. Wherever possible a company should register its IP rights in its key geographical markets. There are some simple steps that can be taken alongside professional pragmatic advice. If an organisation has decided to trade in a particular country, it needs to try to extend protection, particularly for its goods, as soon as possible in that country. Consideration should be given to a number of routes, for example, via patents, trademarks and designs trademarks and designs being a particularly important part of any marketing strategy. In Europe, there is the European Patenting system which can be used to provide protection across the EU States. When launching products, however, it is also important to consider distribution strategies. This is because in the EU different trade restraints apply and it is especially important
INTELLECTUAL PROPERTY
to consider Competition Law which covers the free movement of goods around the EU and the avoidance of the abuse of a dominant position in the market. Recommendations for the exact route to choose will depend on the countries to be covered, the stage of development of the technology and the nature of revenue streams and cash flow. So, finally, to commercialisation and exploitation. Coller IP has developed a commercialisation and management process that allows clients to understand the value of their intangible assets and to assess and track the commercial potential of their products and services at different stages of development. In addition, the process prompts decisions on how and whether to protect the underlying assets. A good IP advisor will not just help a business with the legal protection aspect, they will actively help in the commercialisation process of the ideas behind the goods or services that the company is selling by helping the organisation realise the tangible value of different aspects of the IP For anyone . looking to attract funding, getting the IP in order is a must. Many venture capitalists/angel investors will be considering a range of IP factors when making their decision whether or not to invest. Knowing the value of your IP or which parts of your IP are more valuable than others is essential in making decisions about what parts of the business to develop, and when considering applying for funding or contemplating a sale. It is also possible to sell or license parts of your intellectual property portfolio to gain additional revenue. Putting the right IP protection in place is a vital part of the commercial strategy for a start-up or growing business and its investors.
Jackie Maguire
BUSINESSTODAY 31
BUSINESS IN THE DANGER ZONE

Following his recent tours of South America and Iran, COLIN TURNER looks at the lessons for UK business owners
WORLD BUSINESS
earing gunfire during the night alerted me to the fact that Honduras is the most murderous country in the world. With 27 per cent unemployment, 50 per cent of the population below the poverty line and rife with corruption, I questioned myself again why I had elected to come here. I had agreed to meet those business leaders responsible for generating seven per cent annual growth which seemed far removed from the reality before me. How were they able to do so? Being driven from my hotel in Tegucigalpa (Teyusi yalpa) that had witnessed a late night shootout resulting in two bodies lying in the road, I noticed that armed guards stood nonchalantly outside the larger places of business. Normal way of life, my host assured me as he manoeuvred his truck through the chaotic traffic. Protection from protection. That is from the gangs, and other forms of impositions. Indeed recent statistics confirm that there are two murders each and every day in a city employing around 330,000 people. To place in comparative context, Londons Square Mile also employs 330,000. Imagine almost 792 murders a year there what impact would that have on our business thinking? It transpired that apparently my visit had been so successful in generating such a good response that it had attracted the attention of the authorities that had taken the opportunity to impose an additional tax. This unexpected imposition never before placed on education presented yet another challenge for my host. Spending time with 450 business leaders from Honduras re-confirmed to me the positive attitude that exists among entrepreneurs and business owners in what the west terms third-world countries. I asked them if they were at all concerned about the euro-crisis that US papers that day had stated was threatening global economic stability. The response was that whatever happened was beyond their control so they would not waste a moment of thought on it.
I asked them if they believed that the next 12-month period would prove to more economically beneficial for them than the previous 12 months. The response was yes of course it is what keeps us going. I asked them if they blamed the government. The response was that they strived to do the best they could, because there was no other alternative. They focused on what they could do, whatever it involved overcoming, because their business was the only thing that promised to make a difference to their lives, families, employees, people and country. They only focused on what could be done, never what could not be done, and they always aimed to excel at it. One shared how his friend had built up a restaurant group of 35 outlets selling fried chicken. Indeed I had noticed the Pollo signs throughout the city. With 350 people employed he had plans to diversify and employ more. Then the government suddenly raised the electricity bills to an all time high. Knowing that lobbying and fighting was a waste of time, his friend adopted what many have done in Latin America with positive results. He went on hunger strike. He had been on it for three days by the time of my arrival, committed to saving the jobs of his people, his company and the business community. The fact is that these business communities have significantly more challenges to overcome than others. Yet they have no choice other than to get on and do the best they can without complaint. To do whatever it takes to overcome corruption and beat the odds of being murdered. Before my arrival at Honduras I had left the even poorer country of Gautemala, where similarly business expectations were bright despite the huge poverty and corruption. The presidential cavalcade arrived as I was leaving my hotel and I had to walk the gauntlet of heavily armed guards. Such circumstance put business problems in perspective. Because that is what business is about: solving problems.
32 BUSINESSTODAY
Currently the papers report that Iran is one of the most dangerous places to visit. The reality was different during my recent tour. 73 million people of a generally helpful and friendly culture are being pigeon-holed into something to be avoided. The 12 million commuters in Tehran are as frustrated with their government as commuters are in London. Industrial cities in the south were as worried as UK Manufacturers having to contend with lack of support and heavy bureaucracy. Young people (and half the population is under 25) in Religious cities in North East Iran at the border to
two jobs and worked a minimum of 12 hours a day in order to get by. Money was tight and luxury non-existent for most. Without doubt the reasons for complaining are at a far higher level than the western world. We need to get a perspective about our economic woes. Yes they exist. But they are of our own making. And therefore will be of our own resolution. We are lucky to have the opportunity to overcome challenges that will develop our potential. If you dont agree then spend a week in a third world country and be embarrassed about the positive enthusiasm they have for the future. They are poor but they have goals, dreams and focus on what they can do. Despite the obstacles, they have an unshakeable belief in the concept that whatever you creatively conceive, boldly believe and passionately pursue, you will achieve. Does your business? Business is a great arena to test our mettle and build courage, resilience and determination. What is important is that you are master of where your business will take you, and not its slave that carries you along to nowhere. Over 100 businesses, for example, are forced to cease trading every single working day in the UK. Nobody starts with that plan in mind, yet seldom does a monitored plan actually exist. And perhaps that is the main point, because to revisit that proven worthy adage: When you fail to actually develop a watertight plan, you must be, by definition, actually be planning to fail. But a secondary point of value is that business is about learning from mistakes we become the person we are through learning curves. They are the furnaces in which our mettle is tempered into cutting edge steel. Without them we remain dull iron. The secret is to embrace and learn from them, and above all harness those curves towards greater heights.
It was not the reasons sparking the financial contagion. It was the unprecedented and unanimous support by the whole of the Thai people. The Thai Baht had ignited the crisis and with the country collapsing the whole population gave freely of their gold and possessions to save their country. Their actions worked. Imagine that happening in the west, where pushing apart rather than pulling together is the considered option. One that apportions blame over seeking solution. The fact is that blame looks backward, whereas responsibility looks forward. Business in the danger zone is the harsh arena that accepts such responsibility. The responsibility to do whatever it takes, such as the owner of the Pollo Group in Honduras, whose actions reduced the electricity rates and saved 350 jobs after 10 days of hunger strike. I am not proposing for one moment we take such action. The point is to get things into perspective and take the step towards our challenges, whatever they are. Running a business has its ups and downs, and sometimes an unexpected event will come your way beyond your control and influence, causing you to feel like you are stuck in a downward spiral. You know you will survive, that you will win through because that is who you are. True success lies in accepting, and then taking command of the ups and downs that come your way. To not do so is to place our business in jeopardy a danger zone of our own making.
WORLD BUSINESS
Afghanistan hold earnest ambitions about their future. Business owners in Isfahan dream of successful business, not nuclear holocaust. Business owners there live with the challenge of not even the slightest hope of government support. Most people I met had
Business is the great arena that provides us the opportunity to focus on what we can do. It is not for causing us to apportion blame for why we cannot do what we are capable of achieving, despite the hurdles that lie ahead. For me there is an over-riding memory from The Asian Crisis of 1997 that resulted in almost worldwide economic meltdown.
Colin Turner
Business guru and mentor, Professor Colin Turner, is the author of 18 business books published in 45 languages and holds Trusted Advisor Status with his CEO clients
BUSINESSTODAY 33
Employers urged to sign up to the public health responsibility deal

MARK LANE talks to Dame Carol Black, expert advisor at the DoH, about her mission to encourage employers to improve health at work
environment, and influencing decision-making and behaviour are key to helping people lead healthier lives. The Responsibility Deal is about collaboration. We are clear that working voluntarily in partnership with all organisations can enable us to achieve far more and more quickly than would be possible with a narrow regulatory approach. Organisations sign up to a commitment to take action to improve public health. This action is expressed as a pledge that covers one of the following areas - alcohol, food, health at work or physical activity. To become a Responsibility Deal partner an organisation has to sign up to the principles of the Deal along with at least one of the pledges, but ideally as many as they feel able to commit to. Around 340 organisations have already become Deal partners and new organisations are signing up every week. There are some of the UKs largest companies among them Asda, the Co-op, BP British Airways, EDF Energy, , GlaxoSmithKline, Kraft Foods, McDonalds, Mars, Unilever, Heineken UK, Marks and Spencer and the Royal Bank of Scotland. They are joined by a diverse range of organisations including Universities, NHS Foundation Trusts, charities and many smaller companies. It is open and appropriate for all employers who wish to demonstrate their commitment to helping improve the health of their employees. We put it to Dame Carol that public health is also the responsibility of individuals, or local authorities and health bodies. She says: Of course, its up to individuals to look after their health. It is now well known that too many of us are eating too much, drinking too much and not doing enough physical activity. But I am clear that it is not for individuals alone and would argue that we all have responsibilities in this endeavour. Simply from a business perspective, there is much sense in investing in your employees health and well being. A fitter, healthier workforce performs more efficiently and more productively. In 2009/10, 23.4 million days were lost by British industry due to work-related ill health. And the annual economic cost of sickness absence and worklessness associated with working age ill health is estimated to be over 100bn. Clearly this is wasteful, for individual companies and other organisations, and for the wider economy. There are many good examples from the UK where investment in staff health and wellbeing has led to improved productivity.
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H E A LT H A N D W E L L - B E I N G
ame Carol Black, expert adviser to the Department of Health and long time advocate for improving health and well being at work, argues that public health is everyones responsibility - employers included. She challenges companies and all organisations to consider the very real long term gains that good employee health brings for all, business included, and not to see it as a burden. Dame Carol is chair of the Governments Public Health Responsibility Deal Health at Work network, one of five networks working collaboratively with business and other organisations to voluntarily improve public health. Business Today asked Dame Carol a
number of questions about this innovative work and her mission to encourage employers, big or small, to sign up to the Responsibility Deal. First things first: what does the Public Health Responsibility Deal have to do with business? Dame Carol says: Its about Government harnessing the largely untapped potential of industry, business and other organisations to improve public health through their influence over alcohol, food, health at work, and physical activity. It means accepting that public health is everyones responsibility and that Government alone cannot solve the major public health challenges we face. Of course, individuals must take primary responsibility for their health, but the way we work together in shaping the
BUSINESSTODAY 35
A HEALTHY FUTURE FOR THE FOOD AND DRINK INDUSTRY

BUSINESS TODAY turns the spotlight on the Food and Drink Federations work to improve the health and wellbeing of employees in this growing industry
PROFILE
ealth and wellbeing in the workplace has moved up the boardroom agenda quite notably in the past few years. Yet some sectors have been quicker than others to appreciate the huge importance of this issue. The UK food and drink manufacturing industry, as represented by the Food and Drink Federation (FDF), is one industry which has spearheaded a number of high profile and successful initiatives in the public health space during the past decade. As the recognised voice of the UK food and drink industry, the largest manufacturing sector, FDF is the trade body of an industry that directly employs up to 400,000 people, and as many as 1.2 million in ancillary services. Food manufacture accounts for 15 per cent of the UK's total manufacturing sector by value and it is an invaluable partner to British agriculture, buying two thirds of what farmers produce. FDFs membership comprises manufacturers of all sizes as well as trade associations dealing with specific sectors of the industry. In addition to playing an active role in improving consumer health, food and drink manufacturers have long recognised the importance of ensuring the wellbeing of their workforce. This is why many of FDFs members have pledged to develop workplace schemes that promote healthy diet and lifestyles. FDFs work in terms of promoting workplace health and wellbeing goes back to 2004. In that year, its members pledged to establish workplace wellbeing schemes in a commitment made in FDFs Food and Health Manifesto.
The commitments made in the 2004 manifesto continue to be the focus of FDFs Health and Wellbeing Steering Group formed in 2007 and made up of senior executives from across its membership which encourages all companies to implement and develop employee wellbeing schemes for the benefit of their people as well as their bottom line. In pressing the case for workplace wellbeing schemes, Terry Jones, FDFs director of communications, says: The business climate is undeniably tough. With this in mind, now is the time to start looking after your most valuable asset your people.
the considerable challenges faced by companies in reformulating their brands without making any compromises on taste, quality or price. To try and better understand the impact of members ongoing work around reformulation, renovation and product innovation, FDF asked Kantar Worldwide to look at nutrition information for approximately 28,000 branded products made by FDF members. The data shows that on salt, for instance, members have collectively reduced the amount in their foods by 9 per cent across the board to an average of 0.31g per 100g of product between 2006 and 2011. The amount of saturated fat in products has similarly declined by 9 per cent over that period. These achievements of course stand on top of the progress made by industry before 2006. FDFs members are keen to do their part from reformulating recipes to reduce salt and saturated fat levels in some of the nations favourite products, to helping employees to lead healthier, more active lives, and sharing this expertise with a range of other businesses.
In the food and drink industry we have been Jones, director working hard looking at how ry Jones Terry Ter tions at FDF the industry as a whole can More recently, as part of the of communica deliver sustainable growth. What has Governments Public Health become clear to us is that, while there are the Responsibility Deal, FDF and many of its usual business issues around the need to members have committed to improving the export, have good control over cost and so on, health of their workforce, via a number of the key to long term growth is access to skilled different methods including through the and talented people. Estimates suggest we will promotion of food labeling and dietary advice, need to find another 137,000 new recruits in gym subsidies, health screenings and the food and drink by 2017. Crucial to attracting promoting of physical exercise, for example. those recruits and retaining existing talent FDF members have shown their commitment is to look after our people. Integral to that is to act as an examplar to other industries by their health and wellbeing to ensure they have creating and sharing resources which long, healthy and rewarding careers in the demonstrate their own initiatives and learnings. industry. Additionally, as part of the Responsibility Deal, several of FDFs members committed to work in partnership with SME organisations to help them to promote health and wellbeing amongst their staff. On this front, FDF members are leading the way. Indeed, last year FDF published Stepping up to the plate showcasing the work of FDF members to reformulate their products, and
CONTACT
For more information see www.fdf.org.uk
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Dame Carol adds: But it isnt just about productivity. Companies that are committed to improving staff health can benefit in other ways. Their commitment sends a positive message about their work culture, enhancing their reputation and helping to attract good candidates, as well as helping to retain valued employees. It also sends positive messages to customers, clients and the wider community. Further, whatever the economic climate, it is both morally right and economically prudent to do all we can to improve employee health and wellbeing. Dr Steve Boormans review of the health of the NHS workforce, the largest employer in Europe, reported that a 30 per cent reduction in NHS sickness absence rates would lead to an estimated annual direct cost saving of 555m. So how can the workplace/business influence public health? Dame Carol says: Of course, individuals must take primary responsibility for their health, but the way we work together in shaping the environment, and influencing decision-making and behaviour are key to helping people lead healthier lives. The Responsibility Deal aims to tap into the potential for business and other organisations to help create the right environment to encourage and support people make balanced and better choices to lead healthier lives. And the workplace is a critical environment that has a huge role to play - it can and does have a real impact on our health and wellbeing. How employers can encourage and support their staff will of course vary according to the type of workplace, size of the organisation, whether it has a canteen and so on. But I believe we have developed a number of flexible and pragmatic health at work pledges that employers can sign up to. It is unlikely that all the pledges will be suitable for every organisation, but each should be able to commit to at least one of them. So what are the key things that managers and HR staff should consider to help improve the health of their staff? Dame Carol answers: One of the pledges recognises the importance for each organisation to measure and publish sickness absence rates. But the pledge also encourages the inclusion in annual reports and/or on websites of a dedicated section on the health and wellbeing of employees. But let us not forget that presenteeism - being at work but not being able to function to maximum capacity, whether due for example, to the work environment, poor managerial relations or unsupported health issue - is often a greater problem than sickness absence. Occupational health shouldnt only be about supporting staff who have declared health problems, it should also be about safeguarding and promoting the health and well-being of all staff.
to work. Although chronic medical conditions last many years, in most instances work can actually help to reduce their long-term impact. The specific pledge is about embedding the principles of these guides within HR procedures, to ensure that those with chronic conditions at work are managed in the best way possible with reasonable flexibilities and workplace adjustments. The principles in these guides can supplement existing HR practices and provide employees and their line managers with practical solutions that can benefit them both. All the Responsibility Deal pledges are related to keeping people healthy, fitter, in work, productive and engaged. Any employer or HR person would find that particularly attractive. Therefore I urge all employers to consider seriously just what occupational health means today, what impact having a healthier workforce can have, as well as what it means to have an employer that looks after its staffs wellbeing - what that means for productivity, business and prosperity. More than ever in this current economic climate prioritising employee health makes sound business sense but also reminds us of the moral obligation of all employers.
If an occupational health service is provided in-house, employers can ensure that they formally apply for accreditation under the SEQOHS Occupational Health Service Standards for Accreditation. Traditionally, occupational health has largely been restricted to helping those who become ill whilst in employment, rather than preventing them from becoming ill in the first place. In the 21st century, we must reach further and strengthen the preventive function of occupational health. Another issue is ensuring that line managers are well supported, so that they know how to help and support any staff with health issues, including mental health. Mental well-being is a leading cause of sickness absence. Its therefore vital that managers are aware of mental health issues - especially the risk of stigma when these are declared. The network is currently developing a pledge looking at support and adjustments for staff returning to the workplace, with a particular focus on those with a mental health condition. Finally, we asked Dame Carol about what she sees as the challenges facing employers, occupational health and HR personnel in relation to staff health. She says: Well, we have seen and will continue to see a steady rise in the number of employees with long-term health conditions, such as obesity, diabetes, cancers which have been treated, and heart disease. This presents a major challenge for the health support of the future workforce and means that employers will need to gain experience in the workplace management of employees with such conditions. The very first pledge addressed this very issue, and we have developed two guides that provide advice to employers and employees in managing long-term medical conditions at work. They recommend a common sense approach that reflects the least to be expected in a trusting and respectful line manager/employee relationship. The guides are designed to help keep people in work and those on long-term sickness absence to return
ABOUT DAME CAROL BLACK

Professor Dame Carol Black is currently expert adviser on health at work at the Department of Health; she also co-chairs the health at work network - part of the Governments Public Health Responsibility Deal. She is also Chairman of the Nuffield Trust, Chairman of the Governance Board of the new Centre for Workforce Intelligence, President of the British Lung Foundation, and ProChancellor of the University of Bristol. She recently co-chaired an independent review of sickness absence on behalf of the Government.
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38 BUSINESSTODAY
A revolution in identifying workplace stress

MARK LANE talks to Caroline Day, the expert behind the Hot Frog Indicator, and discovers a revolutionary method of tackling the workplace stress issue
ts tough out there and the sobering truth is, in 2012 its likely to get even tougher. Not surprisingly, job uncertainty and general economic gloom is having an impact on employee welfare. Take, for instance, the following: findings published by the Chartered Institute of Personnel Development (CIPD) and private health company Simplyhealth last year showed that, of almost 600 employers surveyed, nearly two-fifths had experienced an increase in stress-related absence among their workers in the past year. It would be easy to blame poor management for such findings after all, why didnt they spot that their staff were struggling? The explanation, as Caroline D'ay managing director, Hot Frog Indicator points out, is that you can only notice what is noticeable. D'ay has spent more than two decades working in the public and private sectors and is a trainer and Master Practitioner of NLP . Asked about the inspiration behind Hot Frog Indicator, which took almost ten years to research, she says: For many years, I found myself being called into organisations when something had gone wrong and the business was heading for a tribunal court. Interestingly, it was often the person with the grievance who had kept proper documentation and was prepared, while the manager or organisation had nothing. My aim was to redress the balance and give organisations the opportunity to show that they had been taking proper action. I put together the Hot Frog Indicator questionnaire, which measures engagement and resilience, as a way to give organisations a fast, clean, simple way to monitor the wellbeing of their employees. If something did come up on the results, this was a chance for
the organisation to nip things in the bud. This isnt, it should be noted, just any old questionnaire. Day, and her colleagues drew on all the available research into stress and related conditions. The eleven questions themselves in the indicator cover well known areas Caroline Day and, in isolation, may appear fairly innocuous, she says. But we have narrowed things down to focus on eleven issues which, looked at together, really hit the spot. We are picking up on behavioural changes known to be affected by stress and giving the organisation every opportunity to act on them. The answers to these questions provide a score. The manager or organisation can then decide whether that score sounds about right, whether it is too high or too low. The key, for Day, is that if a score throws up any concerns, it leads to a dialogue. She adds: It gives managers a chance to have a conversation with somebody and iron things out before they get going. Day is passionate about Hot Frog Indicator and she is equally passionate about well-being at work generally. Her prevailing theme when discussing these issues is the need for common sense from organisations. Crucially, she recognises that many organisations simply dont have the time to spend an age looking at stress issues among employees. I went into the occupational health department of a public sector organisation recently, she says. Their head told me they had a whole cupboard full of surveys relating to employee well-being and theyd done nothing with them. I really think it is time to
use the technology which, in our instance, has taken a well practiced methodology and wrapped it up very succinctly. As part of the service, Day will compile survey results into electronic reports which are delivered to clients with observations and feedback. Also available if results indicate it is required is in-house training for managers and a range of support interventions, including 1-on1s and other support. CIPD qualified legal support can also be arranged. So who should be taking the Hot Frog Indicator? Day suggests it is applicable to all grades of employee but feels strongly that an excellent starting point is the management team itself. Analyse the team and make sure they are right, she says. More often than not, if the manager is stressed they wont be looking after the team properly. Concluding, Day says: The problem all organisations face, whether they are large or small, is that there is a very blurred line between where their responsibility towards employees starts and ends. With Hot Frog Indicator, it doesnt matter where the stress is coming from, it is simply flagging up that there is an issue. We are empowering the organisation.
CONTACT
For more details see www.hotfrogindicator.com
BUSINESSTODAY 39
LANCING THE COSTLY BOIL OF ABSENTEEISM

BUSINESS TODAY profiles the excellent services of The Injury Care Clinics, a vital partner in heading off costly absenteeism
Nick Delaney
PROFILE
ow much is absenteeism costing your business each year? For many, the answer to this question is likely to be too much especially when set against the backdrop of the current economic climate. Nick Delaney is CEO of The Injury Care Clinics (TICCS), the leading independent occupational healthcare specialist. He says: Figures from the CBI Absence & Workplace Survey 2011 showed that the direct cost of absence across the economy in 2010 was 17.6bn. Based on the same CBI survey, the median cost to every private sector employee was 710. Surely, in these challenging economic times, this is more than any employer can afford to waste. Hes right, of course. And this is why more and more organisations are now looking to lance the costly boil that is absenteeism by implementing long term measures that proactively get to grips with the health issues facing their employees. Delaneys business is working with many company owners to enable them to do just that. Discussing the occupational health market generally in the UK, he says: As an industry, what we need to be doing is creating a holistic approach to tackling the issue of absenteeism. We have to convince business owners that the return on investment of acting before absenteeism becomes a deep seated issue is far better than sitting back and doing nothing. He adds: We also believe there needs to be a far greater awareness of how certain conditions can be addressed. We believe corporate occupational health care products should be condition rather than therapy focused tackling issues in a holistic way. That is the way we are building our services. Established in 1996, The Injury Care Clinics (TICCS) is now amongst the largest independent providers of rehabilitation, triage and treatment services in the UK. Each year more than 70,000 new patients benefit from the services of its nationwide panel of physiotherapists, osteopaths, chiropractors and psychologists. TICCS also has in-house team of experienced nurses and occupational therapists who coordinate a range of diagnostic and surgical procedures as well as providing a full biopsychosocial case management service to more seriously injured patient. The company is committed to the proactive management of interventions and its bespoke case management software ensures that only
clinically-based and appropriate treatment is provided. The focus at TICCS is on evidencebased treatments and outcome-orientated service delivery ensures the fullest possible patient recovery with the minimum social and financial cost.
Services
TICCS offers a full range of assessment, diagnostic and treatment services from simple telephone triage to full scale catastrophic case management. All services are led by carefully selected and appropriately qualified healthcare professionals whether through the firms nationwide panel of clinicians or its in-house team of Registered Nurses, occupational therapists and physiotherapists.
The breadth of its network enables the firm to offer treatment, on average, within three miles of a patient's address. The company will proactively manage treatment levels against expected norms and flag outcome risk criteria in order to ensure that patients receive only that treatment necessitated by the injury under claim. TICCS also offers an expanding range of physio-supported self-help solutions to minimise the cost of treating very minor injuries. TICCS can provide easy-to-understand initial assessment and end of treatment reports together with bespoke referrer management information when required
CONTACT
See www.ticcs.co.uk for more information.
Sickness and accident management

40 per cent of total time lost to sickness arises from long-term absence, the main causes of which are mild depression, back pain and other musculoskeletal disorders. The remaining 60 per cent of time lost is through short-term absence and here, again musculoskeletal disorder is the second most significant factor, after the classic 'sickness and diarrhoea'. Says Delaney: Our unparalleled access to a wide range of treatment providers across the UK enables us to offer to employers an ideal rehabilitation package aimed at reducing absenteeism arising from these major causes. We are able to offer treatment more quickly and conveniently than the NHS, facilitating an earlier return to work and reducing the cost of absenteeism. Typically, TICCS is retained by an employer who will call upon its dedicated case management resource when an absence is expected to exceed the CBI and AIRMIC two-week intervention guideline. TICCS will then contact the employee and initiate an assessment and recovery programme, liaising as necessary with the employer and with other social and healthcare professionals.
Dedicated treatment
In partnership with its panel clinicians, TICCS is able to offer a full range of physiotherapy, osteopathy, chiropractic and psychological rehabilitation treatments.
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OCCUPATIONAL HEALTH FOR A PRODUCTIVE WORKFORCE

DR CHARLIE EASMON looks at how smart occupational health policies help businesses to increase workforce wellbeing and productivity
urveys show that under 25% of UK companies have an Occupational Health Service and, sadly, many of those with one are unhappy with it. Many companies I speak to lament poor quality reports from some OH doctors and a frustration that no real attempt is made to understand their business. Good OH treats your company like a ship and gets on board. It has to understand your business needs and culture, and where and how employee X or Y fits in. Considered OH helps productivity by dealing early with physical and mental health problems and steering you and the employee to optimal care rather than the lingering problem of inadequate treatment. The recent report Health at Work An independent review of sickness absence by Dame Carol Black and David Frost CBE will change the landscape for managing sickness absence in business, and smart employers need to get ahead of the game. For companies of any size, be they start-ups or multi-nationals, these guidelines will ensure that your workforce is happier and healthier. Their output will be more focussed, with a direct impact on profits.
Always consider other advice; maybe it would be better for that person to be in work and not bored at home? How can you facilitate that? Arrange a taxi, or allow more flexible working hours to avoid the rush hour.
Mental welfare
This is a crucial aspect which can be affected by the culture of the organisation, the control people feel over their work, and the job design. It is very important, obviously, to ensure that there is not a bullying and harassment culture in the first place. I recommend The No Asshole Rule by Robert Sutton, who wrote articles for the Harvard Business Review on the issues caused by a workplaces negative atmosphere. If someone is clearly having mental problems, the next step is facilitating access to proper resources. Nationally there is a real problem people arent getting the right help early enough. Mental distress is like a fire when youve called the fire brigade you need immediate attention; not a long wait before the issue is dealt with. The Centre for Mental Health runs courses for line managers on how to deal with these issues. As a preventative measure, job design is incredibly important. Much research suggests that when a job design is modified according to an individuals quirks and personality, engagement and productivity increase. So: agree tasks that need doing, choose an individual to do them, then all sit down with HR to work out how they will achieve that target. It might not be a rigid format that says, Turn up at 9, leave at 5; rather aim for a productivity target. Its about understanding your employees personal circumstances and them as individuals. As long as they get the job done, and reach the target, how its done doesnt need to be within a rigid structure.
Dr Charlie Easmon is medical director of Your Excellent Health Service, 1 Harley Street
Pre-existing health conditions

No matter what your business is, these will exist. Obvious examples are diabetes, epilepsy, and asthma. I recommend asking new employees to fill in a medical screening questionnaire after you have offered them the role. Send it to an independent medical professional who will assess the issues on your behalf. Sometimes your employee may discover that their treatment - whether its private or NHS - is sub-optimal. I advised an engineering company about an employee with Crohns Disease, a chronic inflammatory disease of the bowel. Intervention and enquiry into his treatment led to better management and care, which in turn increased his utility. In that case the company invested in a better level of care more companies should look into that. If someone who is already in your employment develops a condition and tells you about it, always remember The Disability Discrimination Act. Then ask: Is this individual being properly cared for? This goes for any condition - even with a football injury A&E can advise six weeks of bed rest.
Employees lifestyles
The first stage for any company is getting a feel for employees lifestyles. Recent research tells us that lifestyle can contribute 42% to the risk of cancer. Excessive smoking and drinking, along with obesity, have a massive impact. I advise heightening general awareness and if you observe problems, offer people routes subtle or otherwise to deal with them. The NHS has very good smoking cessation services and literature to distribute. Though drink can be a great part of social interaction, it can be very hard to counteract a drinking culture, especially if theres a convenient bar nearby. If your employees have to entertain often, offer even the simplest advice, like alternating rounds with soft drinks. As an employer, be aware that those present but unwell presenteeism - may be costing you 5 times more than absenteeism.
NATIONALLY THERE IS A REAL
PROBLEM - PEOPLE ARENT GETTING THE RIGHT HELP EARLY ENOUGH
BUSINESSTODAY 41
RANDOX A PIONEER IN PREVENTATIVE HEALTHCARE FOR BUSINESS
PROFILE
ow many of your employees will fall ill during the next few years? How many will become debilitated by a long term illness? The truth is, you probably dont know. Illness can strike at any time and without warning. For the individual involved it can be a stressful and frightening. For the organisation it can and often is a serious absenteeism cost. Yet it neednt be this way. Preventative health screening is increasingly recognised as the long term way forward in the health field and corporate organisations are fast appreciating its benefits. Right at the very forefront of the preventative healthcare field is Randox Health Checks. Randox Health Checks is a pioneering new movement in preventative healthcare which, for the first time, thanks to its fair and reasonable prices, places the latest in cutting-edge diagnostic technology within reach of everyone. Obviously, weve all heard of health screening and an obvious question readers may have is, what makes Randox Health Checks different to existing screening tests available on the market? The difference is that a Randox Health Check is the most comprehensive health screen available on the market, with over 250 checks and measures; existing health screen providers typically only offer between 10 and 40 checks.
developed and patented a specific clinical stress test. When a patient is clinically stressed, chemical biomarkers, known as cytokines, are present in the blood stream. Randox Health Checks will test for these, along with other stress-relevant indicators including cortisol and abnormal thyroid levels. Adds Phillips: Our stress test also takes into account personal health measurements (an indepth patient consultation, medical and lifestyle history, height, weight, BMI, oxygen saturation levels), blood pressure measurements and a full cardiovascular profile, including lipid analysis. We provide evidence-based substance to the issue of workplace mental health and absence through stress. Importantly for busy executives, all of our procedures are quick, minimally invasive and can take place at the workplace. It is highly accessible which means that take-up is far more likely to be high. Randox Health Checks provides extensive result analysis and interpretation and a follow up consultation with professional staff, once results have been delivered, to explain to patients what their personal profile means and what follow on steps, if any, are required. Clearly, all workforces are different in terms of demographics and male/female make-up. Randox Health Checks can tailor particular tests to suit the profile of a workforce, whether that be to take into account a largely older workforce or a predominantly male or female workforce. Crucially, looking forward in an industry that is fast evolving, Randox Health Checks test menu is backed by one of the most prolific research programmes in the world today and is constantly expanding. Moreover, Randox Health Checks brings 30 years of experience through its parent company, Randox Laboratories, developers of innovative, sophisticated solutions designed to make diagnostic testing more efficient with highly accurate and reliable results.
Proactive approach to prevention

In addition to standard health checks and measures, such as BMI, blood pressure measurements, personal history etc, Randox Health Checks offers extensive diagnostic testing. Using its revolutionary Biochip Array Technology, it carries out diagnostic tests on a blood sample. The test itself only takes 30 minutes and the client will receive their results within 48 hours making it suitable for even the busiest of schedules. Reports containing client results, with in-depth analysis and interpretation, are easy to understand and provide all the information needed. Furthermore, trained clinical scientists will explain everything to each client and answer any questions they may have. A follow-up consultation is offered to all clients, either in person or over the phone. Randox Health Checks focuses on precise details of a patients current health status and any early markers of diseases or conditions, which can then be avoided through diet and lifestyle changes. It has prevention at its core,
while other health checks, measure symptoms and identify diseases once they have occurred. As an example, an ECG will measure an abnormal heart beat, only once it is abnormal. A Randox Health Check looks at cardiac enzymes, and any changes therein, and can identify any precursors to cardiac disease occurring. The end user is empowered through timely, accurate, detailed, personalised health data.
Corporate solutions
So what about corporates and how can they benefit from Randox Health Checks? Valerie Phillips is business development manager with the business. She says: There are numerous benefits for businesses in working with us. Everything we do is around prevention identifying a potential abnormality or illness and looking at measures that can be taken to prevent it from snowballing into something more serious. Thats good news for the employer as it means reduced absenteeism and a healthier workforce. And, of course, it is empowering for the workforce. What we offer is an attractive Employee Benefit.
CONTACT
For further information about Randox Health Checks please contact Valerie Philips, Head of Business Development, on +44 (0)7788 426 135, email info@randoxhealthchecks.com or visit www.randoxhealthchecks.com.
Stress testing
Workplace stress is one of the major factors in absenteeism now. Randox Health Checks can address this issue directly. The company has
42 BUSINESSTODAY
WELL-BEING: WINNING OVER HEARTS AND MINDS

BEN MOSS considers the relationship between national and organisational well-being in the context of a challenging economy
he changing working landscape and the national well-being agenda were central themes of this years Business WellBeing Network annual conference which took place on 8th December 2011. In this article Ben Moss will be drawing on the presentations of the events keynote speakers to demonstrate how these changes might impact on senior management opinion of well-being. In a year where we have seen severe shocks to our existing political and economic systems worldwide, it comes as no surprise that many individuals and organisations are reevaluating their priorities as they try to negotiate through significant change towards a more positive, sustainable future. Interest in the science of happiness has increased, as we question why life satisfaction scores have remained constant despite greater affluence. And the decision to measure the well-being or happiness of the nation signalled a shift in thinking within central government too. Since it was announced in April this year, the introduction of well-being questions to the Integrated Household Survey has garnered support from senior politicians and civil servants, including the Prime Minister and Cabinet Secretary, Sir Gus ODonnell. Despite some sceptical reactions, many are determined to keep this subject on the agenda. One of these advocates is MP Jo Swinson, founder of the All Party
So will these central activities conspire to affect the way well-being is perceived in the boardroom? To some extent the national well-being agenda will create more discussions in and of itself plus, if the government is measuring it boards may be more ready to do so themselves. If current momentum can be maintained then the activity of these groups will alter the societal framework that we operate within, and in turn mould employee (and employer) expectations. But this will not be enough on its own. The importance of realising the benefits of well-being is already increasingly recognised within organisations. There are also several national initiatives in place which acknowledge and support this. A particularly relevant example is the Employee Engagement Taskforce, supported by David Cameron and chaired by another of our keynote speakers, David Macleod. Of course, there are some companies who are already taking a comprehensive, strategic approach to mainstreaming well-being into business functions. But while these organisations are setting good examples for others, its not enough to present them to a Board and expect full endorsement of a new wellbeing programme. If senior leaders are to be truly convinced the approach needs to be three-fold. Firstly, the business case for well-being is obviously important for securing buy in we can be confident the facts and figures are well established and able
to stand up to budget scrutiny. Using specific company figures to demonstrate the potential return will always get the best result its not enough to produce a pile of published literature on the subject. But what we really need to do is win over the hearts and minds of senior decision makers and this is step two. As Macleod highlighted when quoting a response hed received from a senior leader I can accept your conclusions, David, but will only act on mine. Making the proposed approach relevant to the particular organisation in question is a central component for getting well-being right and achieving buy-in at the top. Improving levels of well-being can have a number of positive impacts, which will capture the imagination of the decision makers greater discretionary effort, better teamwork, higher levels of productivity, innovation, creativity, customer satisfaction or resilience? Or are there more specific problems with sickness absence or stress? Either way, the outcomes associated with well-being and engagement are big enough to appeal to senior leaders. Finally, the subject needs to be brought to life with real stories and the chance to feel the tangible difference between somewhere that is getting well-being right and somewhere that isnt. Emotional buy-in has four times more impact than logical buy-in, and that is what will really seal the deal. The various debates and conversations I was part of at the conference tell me that we do seem to be heading towards a tipping point, where well-being makes a permanent shift from nice to have to essential. Where other disciplines, such as marketing, have grown up and investment has become intuitive, well-being is yet to reach full maturity. This is something that a national focus will facilitate, but individuals and organisations will need to continue to champion in order to see it through. In the UK we have a built a great platform for well-being, but now is the time to make it count.
Parliamentary Group for Well-Being Economics. Her keynote speech explained that the group was created to ensure that wellbeing remains a priority regardless of which party holds power and that measurement is an important precursor to change, as what gets measured gets done.
Ben Moss is the managing director of employee well-being specialist, Robertson Cooper
BUSINESSTODAY 43
EXCELLENCE IN TACKLING WORKPLACE STRESS

BUSINESS TODAY turns the spotlight on Work Solutions from Jobs in Mind, a renowned training service aimed at tackling workplace stress
PROFILE
re any members of your team stressed at work? Are any of them on the verge of a breakdown which will take them out of the workplace for weeks or months? Are any of them crying out for some help and support but you just cant see it? In many instances, the answer to these questions is in the affirmative. Sadly, most managers and line managers lack the specialist understanding to pick up on the often subtle signs and cues that a member of staff isnt coping. The consequences of this are severe: unproductive staff, high levels of absenteeism and reduced bottom line. And thats before we even begin to think about the human costs unresolved workplace stress can lead not only to depression and anxiety but also physical health problems such as high blood pressure, lower immune system and many other significant illnesses. Subsequent loss of employment can also lead to the breakdown of marriages, debt and in some extreme cases, as we read in the press, suicide. One organisation with an unrivalled knowledge in these issues is Work Solutions at Jobs in Mind. It has established an excellent track record in job retention, helping over 200 employees to keep their jobs. Crucial to this success has been the help and advice given to employers with regard to organisational change and staff training which has enabled them to better support their staff. Drawing on expertise developed over the last ten years Work Solutions has developed a range of training programmes which address the roots of workplace stress and improve the emotional resilience of line managers and their teams. It also provides consultancy to employers with regard to the negative aspects of workplace cultures ensuring policies can maximise the support given to employees. Dan Estrada executive consultant and trainer with Work Solutions says: We are uniquely placed to make a significant contribution to alleviating these problems which are such a drain on the nations economy. Not only can we help employers reduce sickness absence, but we can help address the problems of presenteeism which can cost a company far more than sickness absence, through poor productivity, greivances and conflict as well as poor staff morale.
Training for line managers

In the current economic climate, with downsizing, the fear of redundancy and falling orders, stress is comfortably the largest cause of sickness absence in the workplace. Work Solutions at Jobs in Mind will design its training courses to specifically meet the needs of individual organisations and in the case of small businesses can provide one-one coaching for staff who are either struggling with emotional problems themselves or with members of their team. Work Solutions can also use Job Retention Case Management as a diagnostic tool for an organisation; not only helping the employee to return successfully to work as soon as possible but also showing ways in which the employer can become healthier. In order that Work Solutions can gear its training programmes to the needs of the organisation, it conducts pre-training staff surveys which will give a comprehensive picture of training needs. These are repeated during the duration of the training usually two days, with a months gap in between, followed by two support sessions in order to measure the progress made by participants. Line managers are seen as key staff with regard to this training as they are the people the organisation looks to implement its policies. Dan Estrada says the training aims to be as practical as possible using case studies presented by the participants. Crucially, Work Solutions insists on the wholehearted support and participation of senior management in order to maximize commitment and impact. Quality assurance is integral to the solutions offered by Jobs in Mind. We collect very specific information from every client regarding sickness and absenteeism, says Estrada. We look to set in place a benchmark tool to highlight the impact that are early interventions can have, not just on sickness and absenteeism but also on productivity and the bottom line. There are other benefits to working with Work Solutions at Jobs in Mind. An organisation which neglects the mental health of its staff can be at risk of litigation which can be damaging both financially and reputation-wise. Important messages from the Equality Act and Health & Safety legislation are incorporated in the training.
WHY TACKLING STRESS IN YOUR BUSINESS IS IMPORTANT

A recent survey conducted by The Mental Health Foundation discovered the following: When provided with a definition of stress and a list of its symptoms: 50 per cent feel stressed at least once a week 27 per cent cite work issues too much work, fear of redundancy 10 per cent cite family and children How do we manage stress? 63 per cent said do nothing, just live with it! Stress can cause many workplace problems, including: High turn over of staff Higher recruitment and training costs Lower productivity Unhealthy working relationships Poor decision making Low morale amongst staff More grievances/disputes and disciplinary procedures More mistakes and accidents Increased sickness absence
CONTACT
Daniel Estrada our Consultant at Work Solutions for more information: 0207-428-8678, or email: d.estrada@jobsinmind.org.uk Web: www.jim-ws.org.uk
Work Solutions is part of the charity Jobs in Mind, which runs a Social Enterprise. We offer competitive prices in Graphic Design, Web Design, Picture Framing and Catering. Please contact com2.co.uk for our services.
44 BUSINESSTODAY
Revealing the signs of psychosocial risk

KEITH SMITH, UK director of CrossKnowledge looks at how to spot the signs of psychosocial risk and how best to tackle the topic
to develop an overall prevention strategy focusing on the promotion of psychosocial wellbeing in a company via improvements in working conditions, communication systems and interpersonal relations. Many organisations have realised that traditional classroom training is not the right way to approach this topic. People dont want to open up and admit weaknesses in front of their peers, especially in a climate where competition is fierce between colleagues. However, employers are still required to make sure that employees have all they need to cope with an increasingly demanding and stressful work environment. Many of CrossKnowledges clients have found that nobody dares to sign up to traditional training sessions on dealing with stress, however if the training is offered via e-learning the uptake is excellent. Employees are given a password via email and are free to connect at a quiet moment in the office or even from home if they prefer. Mentored learning is an excellent solution for sensitive issues providing the anonymity preferred for dealing with this type of issue. Initial training is offered via e-learning and complemented by the personalised confidential advice of a coach or mentor. If you need to help people cope with stress, one of the most effective methods is to offer individual, personalised programmes which are specifically adapted to the learners context. Alongside distance learning, a coach can listen to them in confidence and help them to face their problems. A leading French cosmetics company identified the main sources of stress in their organisation as: Public speaking Not feeling recognised by superiors Lack of self-confidence Managing emotions Enrolment in classroom training on managing stress was non-existent in a high pressure work environment, nobody wanted to discuss this with their colleagues. The company rolled out the same training content via distance learning and the connection rates were staggering. Bringing modern solutions to the market, which use innovative technologies to create new online learning formats, is essential to addressing current learning trends. Such methods can be particularly helpful when addressing sensitive issues, as learning can take place in a confidential environment. This not only makes learning about stress management more accessible but also ensures that the tools used are perfectly adapted to todays 2.0 workforce.
*http://occmed.oxfordjournals.org/ content/50/5/310.full.pdf **http://www.ccohs.ca/oshanswers/ psychosocial/mentalhealth_risk.html
sychosocial risk refers to the type of factors that affect the mental and physical wellbeing of staff. It may affect psychological responses to working conditions and to work itself and also has an impact on relationships with colleagues and managers. Some examples would typically be high workloads or lack of control over work. According to a report by occupational psychologists J. Rick and R. B. Briner* the consequences of psychosocial risks can vary from those that have an impact on the physical health of the employee, to those that affect the health of the organisation: At one extreme, these might be psychiatric illnesses but at the other, a wide range of moods (anxiety, depression, irritability), or affective states (poor job satisfaction, low organisational commitment) are attributed to stress as well as a wide range of psychosomatic symptoms (headaches, increased drinking, sleeplessness).
Researchers at Simon Fraser University in Canada have identified twelve psychosocial risk (PSR) factors which range from engagement and workload management to involvement and influence and psychological support.** According to a report by occupational psychologists J. Rick and R. B. Briner* the consequences of psychosocial risks can vary from those that have an impact on the physical health of the employee, to those that affect the health of the organisation: At one extreme, these might be psychiatric illnesses but at the other, a wide range of moods (anxiety, depression, irritability), or affective states (poor job satisfaction, low organisational commitment) are attributed to stress as well as a wide range of psychosomatic symptoms (headaches, increased drinking, sleeplessness). The causes of psychosocial risk are most often to be found in the structure of a work organisation, work conditions, and the dynamics of interpersonal relations. Researchers at Simon Fraser University in Canada have identified twelve psychosocial risk (PSR) factors which range from engagement and workload management to involvement and influence and psychological support.**
What are the causes?

The causes of psychosocial risk are most often to be found in the structure of a work organisation, work conditions, and the dynamics of interpersonal relations.
Managing psychosocial risk

According to EU Health and Safety legislation (European Council Directive 89/391/EEC), it is the responsibility of the employer to assess and manage all types of risks to workers health, both physical and psychological. Such risks are not difficult to identify in todays climate, but require a sensitive and adapted approach to managing them. Once identified, psychosocial factors need to be carefully controlled. Organisations should be looking
BUSINESSTODAY 45
Motivating battleweary executives

Executive coach KATE LANZ from executive coaching practice Sandler Lanz, identifies some key approaches to help leaders uplift and refocus battle-weary teams during times of ongoing challenge
In todays continuing economic uncertainty many leaders are heading teams where people are having to do more with less, often still fearful for their jobs and are battle-weary. Doing more with less frequently includes the leader where they find themselves pulled in many different directions and are increasingly time poor. These leaders can often inadvertently leave a leadership vacuum around themselves. Unfortunately, employees are far more likely to attribute negative emotions to absent leaders or project their own insecurities into the absence - especially when theyre already battle weary. One of the first things a leader needs to do is to be sufficiently present, available and connected with team members. In my experience as an executive coach, many leaders underestimate the importance of this. People do their best thinking and work when they feel emotionally and psychologically safe. At the current time this subtle feeling of safety is often lacking at an organisational level as markets remain very uncertain. Leaders play a far bigger role in supporting team members to generate this sense of psychological safety than they might think. So how can a leader create this sense of safety? We each carry our own internal work life in our minds. This describes the close relationship between ones own thoughts and feelings and their connection with the nitty gritty reality of what happens during the working day. We are consistently driven to make sense and interpret events as they occur. In their research Amabile & Kramer (2007) demonstrated the powerful effect that ones internal work life has on motivation and resulting performance. Many people still carry a negative internal work life within. If this negative internal dialogue remains unchecked the sense of battle weariness increases. The leader plays a critical role in setting the tone and language of the internal working life of the team. By staying highly tuned in to others inner dialogue the leader can help individuals to reframe their work world view through contact and conversation. Leaders can help to create the habit of positive sense making for their teams. Taking this aspect of their role seriously and giving it due time can pay real dividends in terms of employee motivation and productivity. This takes skill and careful listening. One thing leaders need to learn to do thoughtfully and carefully is not to take what team members say at face value but to look beyond the words for what might be going on beneath the surface often hidden from conscious awareness of the person themselves. Human beings are very adept at pushing negative and uncomfortable emotions into the unconscious part of the mind. This is where and how negative emotion will seep into defining the internal work life unless subtly surfaced and dealt with. Importantly, the leader has to start with themselves and be highly attuned to their own internal work panorama and its positive or negative emotional charge. The leaders real mood transmits very quickly and very widely. Daniel Goleman discovered this in his 2002 research. The brain is an open system. Scientists call this open-loop system interpersonal limbic regulation. The person at the top of the hierarchy in a team has the biggest influence on the overall mood.
An important technique in surfacing and normalising negative emotions is using the Honesty Empathy axis. This is about speaking the truth as openly as possible about the reality of the situation and at the same time acknowledging the difficult emotions that might be evoked. Speaking to the emotional agenda with care and skill is a powerful way of surfacing, normalising and allowing people to process their anxiety at a situation. We find that most leaders tend to be more effective and comfortable on one side of this axis or the other. Not many are genuinely effective in both places. In their research (2007) Amabile and Kramer also demonstrate the huge motivational significance of undertaking meaningful work. This sounds obvious but one of the dynamics that we have noticed recently is an increased lack of clarity with teams not sure about the importance of the tasks they are performing within the overall. Leaders need to continuously punch out the context, purpose and contribution of what the team is doing (especially where the goalposts are moving) People doing meaningful work feel more motivated. Leaders must assume nothing in this regard. If leaders can inject meaning into work, support their team members so that they feel psychologically safe, and be present and connected, their people will have the energy and motivation to carry them through the new year and beyond.
Kate Lanz is executive director at Sandler Lanz
46 BUSINESSTODAY
TACKLING WORKPLACE MENTAL HEALTH ISSUES

BUSINESS TODAY talks to experts from Atos Healthcare about how to recognise, and deal with, business mental health issues
ake a look around your office. Are your employees happy? Do they feel engaged, respected, appreciated and rewarded? Or are they stressed and unhappy struggling, perhaps, to contend with the uncertain times we are living in. Such questions might have been deemed irrelevant in a workplace twenty years ago. For todays enlightened employers, however, they are becoming just as relevant as the latest profit and loss figures. People who value their work and feel valued at work are more productive - its all about engaging your employees, says Professor Michael ODonnell, chief medical officer with Atos Healthcare, citing a whole host of research findings on this increasingly pertinent issue. In the main, work is good for you. While this may well be the case, recent turbulence in the economy is having a significant impact on workplaces everywhere. I recently sat down with ODonnell and his colleague Andrew Kinder to discuss how business turbulence can impact on employee stress levels and look at some practical ways in which employers can respond. ODonnell makes the interesting point that constant talk of stress in the office environment tends to lead employers and employees to become risk averse. Hence there is a need for a more positive message, he says. He adds: In an uncertain economic climate, organisations need resilience, which can come from long term contracts and financial stability. But their employees need resilience too: this is about mental toughness, good coping skills and a supportive work environment. Many businesses are having to downsize at the moment. Handled carefully, such a move can safeguard the long-term future of the business. But people issues need to be right at the fore during any downsizing process, says ODonnell. It is easy to overlook the difficulties faced by people who remain after redundancy exercises, he says. They can feel unsettled, experience a heavier workload, suffer from survivor guilt and wonder if they are going to be next. All this can lead to
distraction and loss of focus. So what can employers do? The good news is that employers are far from passive bystanders here and there are plenty of positive actions they can take to turn around a negative working environment. Andrew Kinder is chief psychologist with Atos Healthcare. He says: The first step is to improve the working environment. We are not just talking about the physical side but the emotional side as well. Employers need to put themselves in the shoes of their employees, to get a picture of the look and feel of work. This can be done by walkthroughs and employee surveys. Doing this will have an immediate effect by demonstrating concern. Having senior managers come to look and talk is very powerful. Acting on any issues identified is also, of course, critical. For instance, if people find too many emails difficult, employers should think about new ways of communication such as social media, says Kinder. Or they could think about improving the look of the workplace to create a happier more productive environment. Kinder adds: Identify people who are struggling: early signs may be becoming easily upset or irritable, loss of sense of humour, a tail off in performance, an increase in short term absences, low energy, increasingly withdrawn or poor concentration. Identifying and acting on such tell-tale signs can save huge problems further down the line. Other measures suggested for supporting employees include: providing support for people who are in difficulty with, for instance, debt management; workplace medication; conflict management training for managers; counselling and psychological support. Middle managers can often be the most putupon. Adds Kinder: Dont forget supporting managers have to act as role models, and deal with the concerns of their staff while at the same time implementing demands of more senior managers. This can place them under enormous stress.
Michael ODonnell
Andrew Kinder
ABOUT ATOS HEALTHCARE

Atos Healthcare has the expertise, commitment and national capability to deliver wellbeing programmes structured to an employers exact needs. As well as individual services, it can provide strategic and human resources advice and guidance to support healthcare initiatives. The Atos Healthcare wellbeing products and services deliver high quality and cost-effective health benefits firmly based on business requirements. This combination has earned it a reputation for providing relevant solutions that help clients to: Be proactive in detecting potential health risks for employees Mitigate health risks in the workplace Reduce sickness absence Comply with legislation Facilitate rehabilitation back to work Improve organisational morale Increase workforce productivity. Other services include: Fit for life health screenings which are available as general, or gender specific screenings Know your numbers health screenings aimed at informing individuals of their blood pressure, cholesterol and blood glucose numbers. Employee Assistance Programmes (EAPs) designed to be modern and innovative which provide practical as well as psychological support to your employees in a confidential setting See www.atoshealthcare.com
BUSINESSTODAY 47
YOUR IDEAL PARTNER FOR MEDICAL INSURANCE

BUSINESS TODAY profiles the crucial services of specialist insurance broker April Medibroker
PROFILE
pril Medibroker is a multi-award winning independent specialist broker advising clients on an extensive range of international and domestic medical insurance policies. The company offers free, independent, impartial and tailored advice. April Medibroker was founded in 1998 and in June 2008 was acquired by APRIL Group based in Lyon, France. APRIL Group was created 20 years ago. April Medibrokers services are available to people of any nationality, living or working in another country, as well as people living and working in the United Kingdom. William Abrie, Team Leader with the business, says: As a long established broker with expert knowledge of both the international private medical insurance (IPMI) and UK domestic private medical insurance (PMI markets), our staff are committed to providing the global expatriate and UK domestic community with a first class customer-focused experience. The team at April Medibroker have vast experience in the international and domestic medical insurance market place and well established contacts at every level with all of the insurers and plan providers that the company recommends. The UK currently forms 23 per cent of April Medibrokers business, a figure it is looking to push up towards 30 per cent. Groups consisting of Small to Medium Enterprises and larger corporate businesses form 35 per cent of the UK business; the aim is to increase this to 60 per cent. April Medibroker offers products from 37 international providers and the business is well spread over those: the largest portion is with Interglobal and AXA PPP both with 16 per , cent of the total, and William Russell is third with 11 per cent. The largest provider on the UK side is Bupa with 25 per cent of the business followed by AXA PPP at 23 per cent and Pruhealth third with 16 per cent. Steve McCrady is a Customer Advisor with April Medibroker. He says: We have a constant dialogue with the main insurers in the UK and are always one step ahead of what is happening in the market in terms of new regulations, the make-up of the industry and so on. We are the eyes and ears of our clients and can offer them genuinely impartial advice in order to help them make informed decisions.
April Medibroker regularly encourages feedback on its services in order to maintain high standards. This is conducted across all aspects of the clients journey with the company from web visit to general questions requests for quotes/information product advice Application submission Commencement of Cover Provider feedback (claims/products) and Renewals. April Medibroker has firmly established itself as a genuine thought leader in the medical insurance industry. It encourages clients to join into its community groups on social networks as well as providing monthly newsletters with insights and overviews of the ever changing (products/Services/regulations) around their needs.
April Medibroker's after sales service includes a dedicated team of administrators who will be there to assist clients throughout the life of their policy. "Our clients can expect to deal with, at most, three people," says Abrie. "Our staff turnover is very low and we have a loyal and dedicated team. We are our client's friend in the insurance marketplace and we'll be there for them through the life of their policy. Indeed, service is absolutely critical in this industry as far as Abrie and his colleagues are concerned. From the very first interaction with April Medibroker each client is assured a personal approach. All enquiries are dealt with in person and not via an automated response system. Gerry Mould, Customer Advisor with the company, says: The act of purchasing medical insurance is a consultation process between ourselves and the client to really understand what they want from their product. The more we know about them and their circumstances be they a business or individual the better placed we are to provide a truly bespoke solution.
APRIL MEDIBROKER AWARDS

Health Insurance Awards Highly Commended 2011 Health Insurance Awards Winner 2004, 2002, 2001 Cover Excellence Awards Winner 2010 Cover Excellence Awards Highly Commended 2009 IMG Producer of the Year - 2010 Sage Business Awards 2003 Focus Technology Award - 2003
CONTACT
For more information, please visit www.medibroker.com
48 BUSINESSTODAY
Excessive stress in the workplace

By KEVIN YOUNG, MD for SkillSoft EMEA
Kevin Young
heres no escaping pressure in todays society. For the majority of our waking day we are under pressure to be with the right partner, eat the right food, look the right way and please the right people. This pressure is typified nowhere better than the workplace indeed, in many companies pressure is almost an ethos. Pressure to meet targets, make money and push for promotions is simply part of day-to-day life for hundreds of thousands of employees up and down the country. So it comes as little surprise that new figures from the CIPD has revealed that 42 per cent of UK staff are under excessive pressure either every day or once or twice a week. Some would argue that a certain amount of pressure can be good for the productivity of a work force but when that pressure becomes excessive, everyone should sit up and take notice. Continued excessive pressure can lead to a catalogue of health problems including irritable bowel syndrome, ulcers, high blood pressure, insomnia, obesity and even heart attacks. Even if stress does not lead to physical illnesses, it can almost certainly lead to a serious dip in productivity. This direct correlation between too much pressure and
poor health is hardly surprising. What is surprising, however, is how easily this situation can be remedied, or better still, prevented. What organisations need to understand is that it is their responsibility to look after the mental and physical health of their employees. As an employer, it is important to ask yourself whether their staff are stressed, and, more importantly, why. A workforce bogged down by stress and pressure is inexcusable when almost every stress and excessive pressure related problem can be alleviated by either a change in the work environment or through staff training. The problem is, somewhere along the line, the word stress became synonymous with the word work. In homes up and down the country, disgruntled employees return home, kick off their shoes, slump down onto the sofa and sigh: I am so stressed. The word is now such an intrinsic part of daily life that employers are often guilty of sweeping it under the carpet until the situation has spiralled out of control. Looking after your staff not only makes for a good boss; it saves you money. At a time when
purse strings are being tightened, productivity levels and quality of work need to be kept as high as possible. No employer wants to be in a position wants to pick up the tab for temporary cover for employees on long-term sick leave because their policy was too lax to pick up on the warning signs. Last year, SkillSoft explored this very same issue, and found that 44 per cent of workers were losing sleep through stress, almost a third (32 per cent) were becoming over-emotional for the same reason and 15 per cent were drinking to help them cope. Within the workplace, 34 per cent of respondents cited an increased workload as their biggest fear. The top three stress sectors were construction (where 25 per cent felt stress all of the time), education, (24 per cent) and medicine and caring (23 per cent). HR stood out, not because it reflected the highest levels, but because of a constant sometimes level of 83 per cent, perhaps due to having to administer employee redundancies and manage employee stress. Overall, almost a quarter of employees felt they had a lack of control over their day, a third were frustrated with their working environment. A further 15 per cent felt they did not have enough training to allow them to do their jobs as well as they would like. If organisations want their employees to flourish, work effectively and keep their stress under control, they have to consider personal development plans and correct training for individuals. By giving employees the essential skills to carry out their job roles effectively, pressure in not only relieved from the individual, but from the company as a whole. Essentially, the perfect working environment is all about balance. The most successful people in life are often not so much brilliant, but balanced. Having enough time to take a lunch break, tuck your children into bed or simply enjoy a nice glass of wine are vital in terms of productivity. But, as with most things in life, the perfect balancing act takes work too. Again, this can be perfected with appropriate training which helps to provide all the tools to help define boundaries and to establish balance in work and home life.
BUSINESSTODAY 49
50 BUSINESSTODAY
A GREAT RESOURCE FOR EMPLOYEES AND EMPLOYERS ALIKE

BUSINESS TODAY profiles the wide-ranging work of the Royal British Legion Industries (RBLI), an expert organisation in the issues surrounding the health and well-being of employees
PROFILE
ealth and well-being in the workplace is a critical issue for businesses in the 21st century, and the implications of neglecting the health and well-being of employees can be severe and costly. One organisation which has been at the forefront of such issues for many decades is Royal British Legion Industries (RBLI). RBLI has a history stretching back to 1919 when it was set up to provide treatment, training and support to service personnel returning from the Great War. While still providing this diverse range of services to the armed forces community, this charitable organisation has further developed a range of programmes and services designed to support the wider community, irrespective of their service backgrounds. Moreover, it has drawn lessons and invaluable experience from its work with those who have disabilities and health conditions to develop a suite of solutions and services for business. Steve Sherry is Chief Executive with RBLI. He says: We are quite a diverse organisation. Our origins are as a specialist charity looking after ex-service personnel as well as people in the wider community with disabilities and other health conditions. We still do a lot of work with the armed forces based around vocational assessment for veterans who have been wounded or who are sick; we help them to understand and overcome the impact of life changes, whatever form these may take and devise a holistic plan to get them back into sustainable work. We have also worked extensively in the arena of health and well-being, delivering a range of government contracts in terms of improving and facilitating access to work. Sherry continues: We have used our longstanding expertise and experience to devise training and interventions for commercial organisations which will help them reduce the costs associated with managing absence. We run a vast range of programmes for managers from managing disability, managing stress, managing change and the motivational issues around these areas to workplace assessments and reasonable adjustment. In addition we deliver a range of services for employees, which provide practical support and solutions to absence in the workplace.
Steve Sherry
In-work support and job retention

Sometimes an employees health condition or disability can mean there may be times when they need extra support at work, for example to adapt to a new routine. These may mean oneto-one coaching to help with training, or adapting to change of a more general nature, a frequent occurrence in todays business environments. Drawing on its extensive background, RBLI has developed an in-work support and absence solution service called Balance. This service helps to address issues which can lead to absence and, ultimately, loss of employment. Sherry says: We provide confidential help and support, including offering advice on managing a health condition at work to advice and support with personal issues which may impact on work. We work with employers and employees to agree an action plan which works for everyone, enabling employees to remain in work or return to work more quickly and employers to better manage absence costs (up to 836 per person, per annum*), temporary resources requirements etc. Sherry concludes: While our services are broad, our overall philosophy remains the same. Our core objectives of caring for individuals through a person-centred approach enable us to flex our services for the benefits of both employee and employer. Ultimately, the organisation as a whole benefits in terms of productivity, reduced absenteeism and staff turnover. If employees feel they are properly understood and cared for they remain motivated and committed to the organisation. We can help achieve this providing value for money for the organisation and genuine bottom line benefits. * The Chartered Institute of Personnel & Development
Free recruitment
RBLI can provide professionally delivered backto-work programmes and in-work support, placing individuals into businesses, particularly those that have a positive commitment to workplace diversity. Working in partnership with businesses at a local level throughout Kent, Surrey and Sussex, RBLIs employer relationship managers and employment advisers work to provide a professional and reliable recruitment service that is free to employers, as well as a specialist and expert retention service to support employers and their staff.
Disability consultancy
As specialists in disability, RBLI can help organisations retain existing employees whose job might otherwise be at risk due to their health condition including a range of in-work solutions and one-to-one tailor-made support for employees and their employer. RBLI advisers can provide expert advice on a range of disability-related issues such as workplace accessibility, reasonable workplace adjustments and disability awareness, including training where appropriate.
CONTACT
For more information, please visit www.rbli.co.uk
BUSINESSTODAY 51
REMOVING PENSION SCHEME UNCERTAINTY

GARY CULLEN explores the longer-term options available to employers looking to reduce the legacy of final salary pension schemes
Gary Cullen
unlawful. While we do not know whether this will happen, employers considering the options available should consider carrying out this exercise sooner rather than later. It is important for members to make a fully informed choice, backed by independent financial advice. However, it can be very difficult for a financial adviser to advise on all aspects of the proposal. It is of course a crystal ball question whether the employer will always be around to fully fund the scheme and provide the full benefit entitlement in the future. As a result, there is no guarantee that a deferred member who remains in the scheme and later retires will receive a full benefit entitlement if the employer becomes insolvent. In such cases, the scheme may enter the Pension Protection Fund, which provides compensation up to certain limits with reduction for benefits such as spouses pensions and pension increases. The starting point for trustees is that such an exercise is not necessarily in the member's best interest and the transfer exercise must, therefore, be handled carefully. To retain impartiality trustees should take a neutral line, as the offer is really a matter between the employer and the deferred members concerned. However, trustees should ensure members are not misled and actively encouraged to take independent financial advice. Employers offers to the deferred members should be clear, fair and not misleading, open and transparent. To safeguard this process, trustees should be consulted from the outset, which will avoid the situation of trustees telling the employer after making an announcement that they disagree with the content or that information provided is inaccurate, with the result that trustees send conflicting communications to members.
Gary Cullen is a partner and head of the national pensions unit at Maclay Murray & Spens LLP
PENSIONS
he days of employers offering lucrative final salary pension schemes for most staff have long gone and recent research has found that Britains largest companies are now, for the first time, spending more on funding pension deficits than pensions for current staff. With such defined benefits schemes too expensive to maintain, companies are increasingly looking to incentivise workers to transfer out of salary-related pension schemes. Enhanced transfer values (ETVs), which either involve a one off opportunity to an increased transfer value or instead provide a cash lump sum to workers prepared to leave a scheme, have become popular with employers. However, while the objective may be to remove the long term uncertainty and risk of keeping deferred pensioners in a final salary occupational pension scheme, there are a number of issues to consider. To enable a scheme to offer such enhancements, the employer would be required to pay additional money into a final salary pension scheme. The additional funds would allow the schemes trustees to offer a one-off higher transfer value, so that deferred pensioners can transfer out their defined benefits into another pension plan. This would usually be a defined contribution scheme or personal pension plan. As an alternative, the employer can offer a cash incentive to the deferred member, in return for an agreement to take a basic transfer value that is affordable to the trustees. In most cases, this is likely to be less than the cash equivalent. As a result of a successful enhanced transfer value process, the balance sheet liabilities of the scheme can be materially reduced, while removing the requirement for annuity buy-out funding. It also means there is no need to provide future funding for the past service deficit for members who have transferred out of the scheme, as that deficit will have been eliminated.
However, there is no guarantee there will be a take-up of any offer made to the deferred members. It is more likely there will be some take-up where the employer has worked with the nominated independent financial adviser to reach a situation where the offer is recommend by the adviser. But an ETV is no longer a tax-free lump sum. While some tax offices in the past would allow the cash payment to be free of income tax, HM Revenue & Customs now treat these as being taxable. As a result, the employer would commonly have to pay the tax on behalf of the deferred member, to make the offer more attractive. The increasing popularity of incentives to transfer out has recently come under scrutiny, with the Pensions Regulator issuing guidance on enhanced transfer values. Employers are now expected to pay for the provision of independent financial advice from a nominated adviser, chosen by the employer, so that deferred members may evaluate whether or not to accept the transfer value. The Regulator has also expressed a number of reservations about these exercises, in particular that some of the offers that have been made may not be in the best interest of the beneficiaries who accept them. The Government has also indicated that it may legislate to make these types of exercises
52 BUSINESSTODAY
PENSIONS DONT FORGET THE BROADER ISSUES

BUSINESS TODAY talks to Scottish Widows pensions expert Peter Glancy, and discovers that whilst the questions around charges are important, there a number of wider issues to consider
previous earning, a high replacement ratio. Higher earners will find it harder to replicate their pre-retirement income by doing only the mandatory minimums and, as such, will need to work with their financial advisor to understand their options. Retirement age, generally, is clearly a huge issue. We are all living longer and, as we know, retirement income is based on life expectancy. For Glancy, deferring retirement is, in many cases, a sensible option which can make a significant difference in retirement income. More and more people are thinking about retirement as a journey rather than a fixed point, he says. Postponing your pension for a few years can give you a much more affluent retirement. A good pension scheme allows that flexible approach to retirement while a cheaper scheme might simply offer you a fixed point in time and, often, you are forced to trade in your pension savings for an annual income (an annuity) which is below the amount needed to get by. Finally, to investment fund growth. When looking at this area, Glancy again comes back to employee engagement and communication. He makes the key point that, while some funds might appear to perform better, some of these funds might also have higher charges. People need to look at net performance growth minus charges, he says. They also need to understand issues around risk rated funds. When people are younger, conventional wisdom suggests a more adventurous fund is a good option. When they close in on retirement, they are usually advised to steer clear of anything which might fluctuate greatly. The point is that a good pension scheme will encompass advise on such issues, work with people to develop an understanding of their own attitude to risk - and direct employees to the investment approach which is best for them at that point in time.
PENSIONS
hat does a good quality pension scheme look like? At a time of major reform within the pension landscape, its a particularly pertinent question. Recent mainstream media has focused on scheme charges and, while this is clearly a factor to consider, focusing purely on charges while ignoring other broader issues around pensions is a mistake.
Peter Glancy
Thats the view of Peter Glancy, Head of Corporate Propositions with Scottish Widows, one of the foremost players in the UK pensions and investment industry. Glancy is keen to dispel the notion that, by driving scheme charges down, everybody will enjoy a prosperous retirement. He says: While there are schemes where charges are excessive upwards of 1.5 per cent is too high such schemes are in the minority and by focusing only on them we are deflecting attention from even bigger issues. So what are these issues? Glancy has focused on a number of areas which he feels are critical to good outcomes for employees at retirement. Beginning in order of magnitude his first area of focus is employee engagement. Any good quality pension scheme will have an effective employee engagement and communications regime, he says. There are huge benefits to joining a pension scheme and employees need to be aware of these. As well as the obvious upside of employer contributions, investment growth and tax relief advantages, there are other factors to consider. These factors relate, again, to effective engagement. Glancy makes the point that the more sophisticated pension schemes are
now working with financial advisors to help people understand their aspirations around retirement and then advising them on how best to meet those aspirations . There is a danger of employees doing only the bare minimum, he says. Yet, if your employer is matching or more your contributions, then you are at least doubling your money before even allowing for investment growth. Youd be hard pressed to get such returns on any other investment. Glancy also points out that, with the Coalition Government moving towards flat-rate pensions there are other issues employees need to consider. If you are only earning 10,000 a year, for instance, and you are doing the bare minimum, you might retire on a flat rate pension of 7,000 from the Government, plus say 1,500 from your employers scheme, meaning that you retire on almost 90% of your
BUSINESSTODAY 53
UNDERSTANDING THE NATURE OF RISK

NOW: Pensions, the independent Danish pensions specialist, has recently entered the UK market and become formally established as a UK Trust. BUSINESS TODAY talks to the firms CEO Morten Nilsson
Morton Nilsson
PENSIONS
he issue of pensions has been firmly on the agenda in the UK in recent months as auto-enrolment becomes an increasingly pressing matter for business owners. With this in mind, the entry of a major new player into the UK pensions market represents a positive step for the industry and, based on NOW: Pensions outstanding track record, is great news for employers. NOW: Pensions became operational in the UK on 1 January. CEO Morten Nilsson says: Formally establishing the UK Trust means the members of the Advisory Board now become official Trustee Directors for the NOW: Pensions offering, whose role will continue to be safeguarding the interests of members (the trustee directors are Nigel Waterson former Shadow Pensions minister, Chris Daykin former government actuary, Imelda Walsh former group HR director of Sainsburys, Lord Monks former secretary general of the ETUC and the TUC and Lars Rohde Group CEO of ATP). NOW: Pensions is a new, independent multiemployer trust which is supported by ATP , Denmark's leading pensions provider. NOW: Pensions charges 0.3 per cent annual product investment charge and 1.50 per month administration charge crucially, with no hidden charges. The firm also makes it straightforward for employers to implement auto enrolment through easy technical integration with payrolls and HR systems and has an auto enrolment compliance solution which makes it simple for employers to meet their obligations under the auto enrolment regulations. ATP has helped all Danish companies and their employees since being founded in 1964. Along the way, it has won numerous pension industry awards, including Investment & Pensions Europe (IPE)'s gold awards for Best European Pension Fund (2011; 2009; and 2005) and Best Long Term Investment Strategy (2011). ATP is keen to share its long-standing experience of delivering low-cost pensions with its proven investment track record the firm has been providing Denmarks working population (4.7 million members) with stable, consistent returns over the past 45 years. ATP returned on average +7.4 per cent p.a. for the past ten years, which was three per cent above the UK average year on year. Nilsson points out that the reason for this is that the firm has diversified its investments aggressively, including achieving excellent
returns by spreading risk across five risk classes- rates, credit, equity, inflation and commodity. This, combined with world class in-house management capabilities and uncomplicated, efficient administrative structure, enable NOW: Pensions to maximise returns for our members.
Diversified growth funds

Integral to the success NOW: Pensions has achieved in terms of its returns for members has been its diversified investment model. We are getting lots of interest from different stakeholders in our model, says Nilsson. The interesting thing is that most investment firms in the UK are now moving towards more diversified growth funds and yet this is a model we have followed for many years. While many funds may now be moving towards this more diversified style of investment model, Nilsson points out that it can be an expensive strategy to adopt and requires a long term commitment. To be able to implement such an approach while still charging just 0.3 per cent in rates marks NOW: Pensions out as a provider which competitors will be challenged to match. But what about the current turmoil in the eurozone and the impact it is having on investment opportunities? Is it still possible to achieve good returns in such challenging times? Nilsson says: For us, the current uncertainty we are seeing in the eurozone drives home the importance of being very cautious with our members money they cant afford to lose that money. We must strive to preserve the capital members put in and we do this by always having a prudent risk level and spreading our risk across different types of assets. Core to our strategy is that you only take risks if you are being well rewarded for them and you need to have a thorough understanding of the nature of the risk you are taking. Wise words indeed which suggest that the pensions plans of employers and their employees will be in safe hands if they should look to work with this innovative, enlightened pensions specialist from Denmark.
Transparent pricing structure

One of the most striking aspects of the NOW: Pensions offering is its unique pricing structure. Our charges are clear and easy to understand, says Nilsson. People can easily see exactly what they are paying in and what they are receiving in return and they can do that on a monthly basis. Our costs are clear and transparent and there are no hidden charges. As we all know, the whole issue of financial miss-selling, where oblique, confusing pricing has led to many purchasing products they didnt really want or need, has come to the fore in the UK in recent years. Not surprisingly, NOW: Pensions transparent and clear communication of its prices has attracted positive interest from the political field. There has been a push in the UK for encouraging more clarity and transparency and rebuilding trust in the industry, Nilsson says.
CONTACT
For more information, please visit www.nowpensions.com
BUSINESSTODAY 55
PASSING YOUR PENSIONS PILOT LICENCE

By JAMES PATTEN, Corporate Pensions Adviser, Aon Hewitt
PENSIONS
n an extremely uncertain economic climate, understanding and controlling pensions risk has now become a key business agenda item for many employers. Tackling these pension risks requires a range of actions. Aon Hewitt recently conducted a survey of 304 organisations, predominantly in the private sector, showing that just over 40% had closed their defined benefit (DB) schemes to future accrual, predominantly to control risk exposure and cost. Many others with similar aims had made significant reductions to benefits in different ways such as capping the growth in pensionable pay, Such benefit changes are, however, only a first step towards controlling the build-up of risk. Our survey showed that of those that had closed to future accrual nearly half were implementing or considering taking some form of further action to manage risk they had already built up.
conditions will often deteriorate in times of economic uncertainty when free cashflow may be limited. The problem is that these two objectives are usually opposed when it comes to setting the scheme's investment strategy. Employers have traditionally invested their assets predominantly in shares in the belief that these will generate additional returns over the long-term to help finance benefit promises that are due to be paid many years into the future. Generating these additional returns would ultimately help with objective 1 above. However, pension promises are similar to long-dated bonds in nature and their "value" will often move in a similar way to long-dated bond prices. As a result, movements in share prices relative to longdated bond prices lead to significant volatility in pension deficits for employers, affecting their contributions. This risk can clearly be reduced by moving assets into bonds, which would help with objective 2. But then the employer misses out on the extra returns from shares, affecting the progress against objective 1. So is there any panacea for dealing with both of these opposing objectives? Not exactly. However, employers are now working together with their trustee boards to set so called "flight plan" strategies to guide them towards their destination. This concept starts with agreeing on a destination, and in what timescales and with what likelihood you would like to get there. This might, for example, be that the employer and the trustees would ideally like to be able to buy-out the DB scheme in the
next 10 years. However, recognising this may require a fair tail wind, there would be the agreement that if the DB scheme doesn not get there, you might settle for being in a position where you can invest almost all of your assets in defensive funds with limited chance of further cash calls from the sponsor. The concept also involves mapping out potential strategies for the best way to reach this destination while managing pensions risk exposure. This often involves setting strategies to move away from growth assets into defensive assets after improvements in funding levels lead the scheme to be ahead of plan (in other words helping to lock in gains as they arise in case market conditions turn against you in the future). However, it may involve alternative approaches. Importantly, these strategies require modelling in advance to understand whether the amount of risk being removed at certain points still allows you to reach the destination. Once we have strategies for derisking at certain times (eg: when we reached a certain funding level), it is also important that these trigger points are implemented so that risk can be taken off quickly when they are met. Aon Hewitt research indicates that around 10% of schemes already have such triggers in place. It will be interesting to see how many more now follow suit. Certainly there will be many employers and trustee boards that now wish they had put in place a strategy that would have locked-in some of the gains in funding positions up to June 2011 - before share prices and bond markets both moved in the wrong direction, now leading once again to large funding deficits and significant contribution requirements.
In our experience many private sector employers are now interested in:
1. Ultimately transferring their pension schemes to an insurance company (a buyout). Given the amount of assets an insurer will demand for taking on DB risk and the reality that many schemes are running large deficits, this will be a longterm ambition for many rather than a short-term goal. 2. Reducing their pension risk exposure in the meantime, so that the potential for additional cash calls from the employer when market conditions deteriorate are limited. This is important because market
BUSINESSTODAY 57
BUSINESSTODAY 59
PROFILE
NATWEST SUPPORTING BUSINESS

N
o one would argue with the view that access to funding is paramount to reinvigorating the UK economy. However, NatWest believes that access alone is not sufficient to stimulate business investment. Businesses also need to feel confident of a solution that best meets their business needs. Against an uncertain economic backdrop where businesses are adverse to risk, NatWest believes that its important to listen to the challenges and concerns facing our customers and to gain a clear understanding of how we can best support them As a result, NatWest has launched a new fixed rate business loan that will provide customers with another lending option. SMEs need extra stimulus to restore confidence and thats exactly what the new fixed rate loan aims to provide. Weve set ourselves an ambitious target to boost lending to small businesses by 15 per cent by February 2012. We believe this provides a very clear message to businesses that NatWest is fully committed to supporting the regions economic recovery. The new fixed rate business loan is available for a period of three months and provides for lending between 25,001 and 250,000. Benefits of the new product include: No arrangement fee. A fixed rate eliminates the uncertainty of interest rate movements over the period of the loan. No early termination fees. The new product, which is available to both new and existing customers, is complemented by NatWests range of support services for small businesses. These include a free SME business information hotline and tailored funding to support business growth including a Franchise Fund, Manufacturing Fund and a Capital Expenditure Fund, among other initiatives.
For further information on how NatWest can help your business contact 0800 073 0192, typetalk 18001 0800 073 0192 , visit www.natwest.com/business or speak to your Relationship Manager. Calls may be recorded.
Important information: The product is only available for fully secured loans. Fee-free borrowing and discounted rates apply to new borrowing only. The offer excludes property lending other than for owner occupation. The offer is currently available until 5 February 2012. Security may be required for which a fee may be payable. Over 18s only. ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT. National Westminster Bank Plc. Registered in England and Wales (Registered Number 929027), Registered Office: 135 Bishopsgate, London EC2M 3UR. Authorised and regulated by the Financial Services Authority
BUSINESSTODAY 61
Q: What do you believe to be the best way forward for the eurozone? A: As plumber not an economist, I always try
and look at things in the most practical way. Most importantly, every country has to be drinking out of the same teapot if there is to be any sort of resolution. This is always a problem because everyone comes to the table consumed by self-interest! Id trim the eurozone to dump the worst performing countries. This will stop countries like Germany continuing to prop up the strugglers and, if they want back in, then they have to prove themselves.
Q&A
CHARLIE MULLINS of Pimlico Plumbers on the eurozone, public sector pensions, the Autumn Statement and skills
should be marched down to the Job Centre to pluck one out of the dole queue. Larger firms should take on an additional 1624 year old for every 20 employees on their books. SMEs will argue they cannot afford to do this, so whats needed from government is a get one free policy where small operations have their first under 25s wages and training costs paid for by government for two years. Businesses that can afford to, but refuse are not only selfish, but incredibly short-sighted. By not employing and training young people they are cutting their own business throats longterm! It would be better if all companies would realise this, but if they won't, they must be forced to. The only way to enforce this is to introduce tax penalties for companies that refuse to play ball. of our children are leaving school without the basics they need for the world around them. Not only did the Chancellor address the immediate challenges facing the country, he laid the foundations for the future, which at this tricky time in the economy, when not many people are looking ahead more than two or three years, its a bold and brave move.
THE BT Q&A
Q: Are public sector workers right to be striking about pensions? A: There is only one word to describe the
public sector workers that are rejecting goldplated pension deals, that will amount to far more than that of the average private sector worker, and thats greedy! They are opposing changes to public sector pensions that mean they have to work and pay more in order to receive their overly-generous pension pots. I was under the impression that we were beginning to realise we all have to make sacrifices in order to get Britain out of the mess caused by Gordon Brown and the crooks in suits from the City. Well, obviously not this lot. They're sacrificing nothing for the future of this country. Their strikes cost business owners millions of pounds at a time when we are supposed to be trying to boost the economy. The days of trade unions and strikes are long gone; they're outdated and never achieve anything worthwhile.
Q: What are your thoughts on the recent Chancellor's Autumn Statement? A:The Chancellor delivered a statement
containing jigsaw pieces, which fit together perfectly to help boost the economy. He has taken all the tools available, and used them in such a way that we might just have given us more than half a chance of coming out of the tunnel in 2015 or 2016 in better shape than we entered it. In the next five years there will be money spent on infrastructure for trains, planes and automobiles, builders will get loans to build homes with families getting help to buy the homes they produce. Real world announcements like these will start to get the UK back to work rather than remaining a rich nation overly reliant on financial services. I am convinced that we come out of this stronger and more resilient in the future. While addressing the massive financial mountain we have to climb, The Chancellor still had the foresight to bring things back to talking about how we must address our current lack of skills when he said: too many
Q: This month's cover story focuses on skills and training. Should more be done to support or subsidise firms taking on an apprentice? A: I am a huge advocate of apprentices; in fact
I believe that every business should have them. I started my working life as an apprentice and have never been without a days work since. To help fund apprenticeships, government should transform the Job Seekers Allowance into a Job Achievers Incentive and give the funding to employers. If young people want the money they can sign up to an apprenticeship and employers will receive the benefit money to part-fund the apprentices training and employment. However, with youth unemployment figures over the million-mark, I think we have to take some radical steps to address the problem. I would make the recruitment of the under 25s mandatory. Any small business that doesnt have an employee under the age of 25 on their payroll
Q: Could you share with us your ambitions for your business/organisation in 2012? A: I am still as enthusiastic and passionate
about Pimlico Plumbers as I was when I started the company back in 1979. I have big ambitions and aspirations for Pimlico in 2012 and my team and I are working hard to achieve them. I am aiming to expand Pimlico Plumbers geographically in order to increase our overall market share in the plumbing and service industry and reach more customers. We are aiming to recruit a further 30-40 tradespeople and support staff to add to our already 200-strong workforce to aid our growth. There is also hope of maximising our 16m annual turnover by increasing sales by 10-15% by continuing to provide the top quality service and emergency response time we are renowned for.
Charlie Mullins is the founder of Pimlico Plumbers. Britains best-known plumber, Charlie started his business with a bag of tools and an old van and has transformed it into a 16m enterprise
62 BUSINESSTODAY

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Business

www.ukbusiness-today.co.uk Issue 5 2012 Price 3.50

WORKFORCE DEVELOPMENT SPECIAL

LEADERSHIP APPRENTICESHIPS HEALTH AND WELL-BEING EMPLOYEE PSYCHOLOGY

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Cate Trotter of Insider Trends

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