Moment of truth (part 3)

By Tim Bishop | Published: March 24, 2011

Regular readers of this blog may recall two earlier posts about “Moments of Truth”, the book by Jan Carlzon, one-time president of Scandinavian Airlines. One of my favourite paragraphs in the book is worth repeating. This refers to a decision he took when he was president of Sweden’s domestic airline, Linjeflyg. The airline was struggling and losing money. His strategy, to cut the cost of many airline fares, including all domestic fares by 50%, at a time when the company was haemorrhaging money, was highly controversial, especially in conservative Sweden.

He wrote, “How much of a financial risk where we taking? I tried to calculate the potential loss on a single route, but the numbers were so enormous that I knew if I completed the estimate I wouldn’t have the guts to try it. So I stopped calculating and let my intuition outweigh the mathematical compensations.”

Fabulous stuff – cast-iron proof that we entrepreneurs are truly mad!

PS His strategy was highly successful – despite reducing fares by an average of 11% overall, he attracted 44% more customers (using previously unfilled seats) and as a result increased revenues from $84 million to  $105 million

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The manager’s best friend?

By Tim Bishop | Published: March 9, 2011

It’s well known that dogs can help their owners to create close, long-term relationships with others. However a study by researchers at Central Michelin University have found that dogs can help with relationships at work as well. According to the research, having a dog in the office increased interpersonal bonds – in particular in one experiment, they discover that those members of the test group who had a dog with them, rated their colleagues more highly in terms of closeness, trust and team cohesion.

The conclusion – don’t worry about those expensive team building sessions – take your dog to the office instead. You would be barking mad not to.

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Lawyers and guns

By Tim Bishop | Published: March 7, 2011

Once again the truth proves to be stranger than fiction. You may think of the average lawyers as dull men or women in a grey suits. Our American cousins are, however, our little feistier. I have just had some breaking news that Richard Ferris, a lawyer in Virginia, was involved in a gun battle with police – he was eventually shot and killed by the police last Friday –after a marathon 8 hour standoff at home – from where he and his wife ran their law firm. If that wasn’t strange enough, it turns out that Mr. Ferris also ran a gun store from his law office – i.e. his home !

As some of you who follow the legal profession may be aware, the autumn will see significant deregulation of the legal market – in a series of changes known as the Clementi reforms. Amongst the expected changes will be the ability for lawyers to start offering other non-legal services. As you know, as a committed entrepreneur I’m always looking for a new opportunity – what you reckon? Should I turn the conference room in our Salisbury office into a gun shop? If I do, I guess I could do a lot worse than name it after a business I noticed on my honeymoon in California many years ago – putting together the obviously complementary businesses of fine wines and shotguns in the snappily titled “Guns, Wine and Ammo”.

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The lap dancer’s unfair dismissal claim

By Tim Bishop | Published: March 2, 2011

Clearly I’m in the wrong business – lap dancer Nadine Quashie recently issued a  claim for unfair dismissal compensation for a staggering £200,000! That figure included an allowance for her nightly earnings of a cool £1000. The success, or otherwise, of her unfair dismissal claim, depending on whether or not she was actually an employee. The contract she signed with Stringfellows included provisions banning her from working elsewhere as a lapdancer, instructing her on what to wear (or presumably what not to wear) and compelled her to give free naked lap dances to anyone the owners chose. Fortunately for Stringfellows, the employment tribunal concluded she was self-employed and, as a result, the claim that she had been unfairly dismissed failed.

This is not merely a gratuitous efforts to spice up my blog by talking about lap dancing – there is actually a lesson to be learned for employers – if you do want to hire someone on a self employed basis, do consider every aspect of your arrangement with them, especially any restrictions you would like to impose.

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Fair Isle – trademarks and niches

By Tim Bishop | Published: February 26, 2011

Those of you who know me or who have been along to any of the Vector Partners or Bowshot entrepreneurs groups, will know my enthusiasm for developing niches as a highly effective method of business growth. Well here’s proof that the idea of niches is nothing new.

The very fashionable amongst my readers will know that apparently Fair Isle knitwear is seriously hip at the moment. The theory is apparently that the recession has created a passion for clothes looking home made, solid and built to last (£50 for my elderly wellies anybody?). Apparently just 70 people actually live on Fair Isle itself and better still just 4 of them are knitters. The distinctive style is thought to have been created by survivors of a  Spanish Armada shipwreck in 1588. Being handmade takes its toll on productivity – each jumper takes about 100 hours to knit and the Island’s total annual production is just 30 scarves, 30 jumpers and about 200 woolly hats. Better still all the knitters are apparently now in their 70s and 80s. There is apparently fierce argument over what can be described as a Fair Isle sweater. But unlike champagne, for example, no one has yet successfully established the right of those living on Fair Isle itself to trademark their distinctive knitwear. As result, not only do many of many of those knitting by hand in the Shetland and Orkney Islands claim to produce Fair Isle jumpers, but so do other less scrupulous worldwide mass production manufacturers of knitwear.

So there you have it – two business great niche business opportunities. Number one – move to Fair Isle and start learning to knit. Number two, trademark the Fair Isle name.

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Stop buying carrots

By Tim Bishop | Published: February 25, 2011

Throw away your carrots and buy a big stick. That seems to be what is suggested by the latest research from the Nottingham School of Economics. An experiment conducted by them suggests that paying bonuses to employees doesn’t encourage greater effort after all – and surprisingly leads to increased shirking! What’s more, they found that when penalties were brought in for lazy workers, employee efficiency improved noticeably.

What could be more welcome to employers in these tough economic times – cutting your costs by scrapping bonuses and shouting more! It’s certainly a thought, but being a big softy, I think I’ll hang on to a few carrots after all.

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A great way to inspire your staff

By Tim Bishop | Published: February 21, 2011

Federal Express have come up with a great way to motivate their own staff. Whenever they purchase a new aeroplane, they hold a free staff lottery and the winner then has their child’s name painted in  large letters on the nose of the plane. They also fly, at company expense, both the child and their family, to their manufacturing plant for the plane’s “christening”.

What a great idea – you may be clever enough to apply it  to your business, but I’m not sure any of my staff would be overly impressed to have their child’s name embossed in gold letters on the front of the next dusty but overpriced law book we purchase!

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Hand sanitising gels get the thumbs up

By Tim Bishop | Published: January 29, 2011

Prepare yourself for a shock – I was wrong. Yes, you read it here first, a solicitor admitting he was wrong. I have always been very dubious about these hand sanitising gels. I’ve always been swayed by the arguments that many homes are simply too germ free – the theory being that excessive use of cleaning agents at home denies children, in particular, the chance to build up natural immunities from exposure to household germs etc. Therefore I applied this logic to work as well. However a recent study in Germany by BMC Infectious Diseases found that incidences of sickness absence due to colds, coughs, diarrhoea etc  were much lower when an alcohol-based hand disinfectant was used. Based on the use of the hand sanitising gels five times a day, there were reductions in sickness absence across the board but in particular, there were falls between 5% and 7% of absence caused by colds and flu. As a direct result we will be using hand sanitising gels around the office (the kitchen and toilet particular) and educating staff about their use. Given how cheap these gels are, even a tiny improvement in absence due to ill health would be hugely cost-effective. We also considering instructing our cleaners to use alcohol-based cleaning wipes on computer keyboards, phones, door handles etc

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Sunshine – an alternative way of motivating your staff?

By Tim Bishop | Published: January 28, 2011

According to some recent research from everyone’s favourite cornflake manufacturers, Kellogg’s, 40% of workers actually see less than 30 minutes daylight on every working day – and around 10% don’t see the sun at all ! Okay, so those of us who are employers can’t extend the time the sun actually shines during the winter (even Solicitors have their limits!), but working in the gloom does apparently affect productivity – some research suggests by up to 30%!

The answer, according to Kellogg’s, is permitting staff either to arrive at work an hour later, or leave an hour earlier in the winter to make the most of any available sunshine. They reckon this increases motivation – it’s certainly an unusual way of reducing absence from sickness and boosting morale! I guess it’s cheaper than relocating your business to California.

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Employment tribunal claims – always worth fighting?

By Tim Bishop | Published: January 23, 2011

Unsurprisingly, the increase over the last few years in employees rights, have resulted in a responding increase in employment tribunal claims. Although the maximum awards for unfair dismissal compensation and the like are steadily rising, you do need to be aware that there is a significant investment required in actually defending such a claim – not only in the costs of your employment solicitor, but also in the time and stress imposed on your own business.

Before deciding whether to defend, have a good look at how strong the claim actually is. It is also worth bearing in mind that although the maximum payout for  unfair dismissal claims increased in 2011 to a maximum of £80,040, the average unfair dismissal claim payout in 2009/10 was only £6275. What’s more, recent research has suggested that the cost to your own business, in staff time lost, averages £9,000 – and that’s before you even start to pay legal costs!

My advice – it’s always worth taking brief legal advice from specialist employment lawyers – that initial advice shouldn’t cost much and you may be surprised that a good commercially minded solicitor may well suggest that you give some serious thought to settling as the cheaper option.

Posted in Cutting Costs, Employment Law, Managing Staff | Tagged , , , , , , , | 1 Comment