Would You Buy This Company? – an understanding of company finance

The North East Academy for Chief Executives, Future Leaders Forum speaker in May was Peter Sutcliffe, an accountant who facilitated a workshop including practical examples and case studies from his own ‘coal face’ experiences within finance, IBM, GEC and in recent years as a company doctor. The Academy members were taken on an experiential learning journey from the principles of accountancy/setting up a company through to the selling of a business and how it would be valued. The workshop used action and experiential learning techniques culminating in delegates valuing a company based on what they had learnt.

The key experiential learning points included the:-

• importance of business planning, forecasting & budgeting,
• principles of finance and its role in a successful business process cycle,
• clarification of accountancy jargon,
• ability to identifying trends,
• key ratios and performance indicators to monitor,
• understanding of statutory accounts -Profit & Loss and Balance Sheet,
• key elements that can positively affect the bottom line,
• benefits of knowing breakeven at all levels of the business,
• best way to analyse strengths/ weaknesses in financial performance,
• benefits of team motivation by displaying meaningful performance data,
• techniques for adding value to our services to charge customers more/ increase sales revenue,
• various fundamentals that affect the value of a company when buying or selling.

Peter Sutcliffe,
Joint Chairman with Karen Humble,
North East,
Academy Group 23 and Leaders Forum 11

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, to find out more about the North East Group, or to find a local group near you, visit www.chiefexecutive.com.

 

Experiential Business Learning – An Independent Evaluation

During 2008/9 Birmingham City Council awarded the contract for their Enterprise City High Growth Programme to Deloitte who in turn engaged The Academy for Chief Executives for the delivery of the experiential learning activities.

As part of the programme, BCC contracted Birmingham University Business School to complete a qualitative and quantitative evaluation.

Birmingham University Business School commissioned a webcast, including interviews with participants, which can be viewed here http://www.business.bham.ac.uk/webcasts/#webcast.

The ECHG programme enabled the leaders of 63 small businesses to benefit from the combination of expert speakers, peer group and 1:1 mentoring. The programme completed at the final event on 23rd March 2009.

Additionally, BCC who own the full report, have kindly given permission to The Academy for Chief Executives to publish the full report, on our website.

Although this particular programme has now completed, The Academy for Chief Executives has launched a new half-a-day-per-month development programme, ‘The Entrepreneurs Board’. To find out more visit: www.chiefexecutive.com/entrepreneurs_board.asp

 

Salesmen and Saleswomen: We Salute You

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. Part of membership involves members taking their issues to the table and discussing them with their peers. This month, one of my members raised the issue of how to get people into a selling mode with regard to their mindset.

It was concluded by the group that selling as a profession was less accepted in the UK, than say the USA. Companies would go out of their way to use language other than sales or selling, such as marketing, merchandising, distribution, product movement, or any other number of cryptic descriptions. It was concluded that in order to change the mindset, people involved in the selling process must be proud of their profession and to make this point, I am including a poem which I have long believed to be instrumental in helping people to have a greater understanding and respect for sales.

THE SALESMAN

When labour toils and factories hum,
And out plant doors the products come,
The payment for it comes from.
The Salesman.

In any business office where
White-collar workers earn their share,
They all should thank in grateful prayer,
The Salesman

When banks and institutions lend
The funds on which the firms depend
For finance, they, too, have a friend.
The Salesman

And miles of gleaming railroad track
And roads and highways there and back
Could not exist without his knack.
The Salesman

So ‘cross the land, behind each door,
Are worlds of wealth and goods galore.
They’d ne’er be there – were it not for.
The Salesman

Yes, others may salute their trade,
The contributions they have made;
But it’s for him that I’ll parade.
The Salesman

For it is sales that keeps us free,
That fuel our great democracy,
And that is why I’m proud to be.
A Salesman

This was one of the best issue sessions of the year!

Joe Adams,
Chairman, Academy Group 11

For confidentiality reasons we cannot divulge all of the advice provided by our members – however, we do hold open meetings where guests are able to attend and experience for themselves the real power of ‘The Board You Could Never Afford’®. To find out how you can take advantage of advice like this every month, visit www.chiefexecutive.com.

 

A lesson in risk-taking in business

Academy Groups 5 and 32 enjoyed the benefit of a really powerful and surprisingly relevant session with Caspar Berry (pictured) on “Poker as a Metaphor for Risk-Taking in Business” on 23rd April. I say surprisingly because Caspar is an ex-professional Poker player and Media “personality”; so everyone present expected an entertaining and intriguing session – but we got even more than just that: we got real insight into the psychology and traits behind our own (and other’s) behaviours when placed in situations where real choices have to be made – real risks to be taken.

I picked up 4 key points from the session:

1. It is normal to fear short-term failure (ie, if taking a bet at poker or making a decision at work where there is the real possibility of loss – be it money, time “face” or reputation – we all experience some fear/discomfort at the thought of losing that “gamble”.) However, really successful people focus upon Long-Term gain. If we make lots of calculated gambles when the odds are in our favour we will OFTEN lose individual bets: but in the long-term we will make a return. We must face our fears of short-term loss in order to achieve Long-term gain.
2. Accepting that to be true, we can see that losing a calculated risk/gamble is NOT FAILURE – it is an essential step in the path to Long-Term success.
3. Long-Term failure is often the result of not taking enough well thought-through short term risks, or of taking too many badly thought-through short term risks. Both of these traits can and should be managed, and it is essential that business leaders are clear about their strategy and culture in relation to these two possible sources of Long-Term failure.
4. It is LONG-TERM FAILURE that organisations and individuals should most fear: the risk of short-term “failure” on carefully calculated gambles or projects should be embraced. For that to be possible the individuals within an organisation need to really understand the relationship between Short-Term risk-taking and Long-Term Failure, and must really understand their organisation’s rules and objectives in this area. Many organisations claim to “embrace risk” or to not have a “blame culture” – but do key staff really know what that means in the real world: especially in these most risk-averse of times?

Fear of short-term (project-by-project, decision-by decision) failure is normal, but clarity of thought and a culture that is consistent about the need to avoid Long-Term failure can be a big motivator to help us and our organisations overcome short-term risk aversion and resistance to change.

Peter Pritchett,
Chairman, Academy Groups 5 and 32

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, or to find a local group near you, visit www.chiefexecutive.com.

 

Understanding the Balance Sheet

Members from experiential business learning group Leaders Forum 42 enjoyed a session full of great content and insight from Simon Kelly, (pictured, right). Simon waved his financial magic wand over a Balance Sheet – like magic, the scales fell away from our eyes as he blew away the myths and the mystic terminology that had previously fogged our vision.

At this critical time in the world’s economy, everyone is telling us “Cash is King” – Simon explained exactly why.

• He helped us to get behind the numbers and find out what our Balance Sheets are really telling us.
• He explained 8 key ratios behind the balance sheet which we should be aware of that will help us understand the true strength, or otherwise, of any business.
• He showed us how to improve our cash flow, which in turn will help us work with our bank as we will know more about their questions and what is behind them.
• Above all he helped us to improve the management and utilisation of our business assets.

Joanna Jesson,
Chairman Leaders Forum 42

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, or to find a local group near you, visit www.chiefexecutive.com.

 

Learning from Leaders in London

Members of my experiential business learning group heard from Roger Evans this week. Roger was elected to the London Assembly in May 2000 and has enjoyed a ringside seat – observing controversial mayors Ken Livingstone and Boris Johnson. He treated CEO members of this London-based group to some fascinating insights to the leadership styles within the city. He also explained how the massive budgets for the Metropolitan Police and Transport for London were monitored and used.

The main takeaway value was the opportunity for the group of 14 leaders present to find their way through the plethora of bureaucracy – enabling them to access opportunities in London particularly building up to the 2012 Olympics. (75,000 contracts and £150 million are being managed by the London Assembly.)

Brian Chernett, Chairman Academy Group 2

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, to find out more about the London/Herts Group, or to find a local group near you, visit www.chiefexecutive.com.

 

Building Staff Morale Post Redundancies

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. Part of membership involves members taking their issues to the table and discussing them with their peers.

At a recent meeting, one of the CEO members raised an issue regarding building motivation of remaining staff post redundancies.

Advice came from those who had made people redundant or had been made redundant in the past:

1. Announce and complete as quickly as possible
2. Cut deep rather than repeatedly
3. Seek legal advice to minimise risk of reprisal
4. Communicate openly and honestly the reasons and basis for redundancy to everyone
5. Confidently and positively share a compelling picture of the future and strategy / tactics to rebuild

For confidentiality reasons we cannot divulge all of the advice provided by our members – however, we do hold open meetings where guests are able to attend and experience for themselves the real power of ‘The Board You Could Never Afford®’. To find out how you can take advantage of advice like this every month, visit www.chiefexecutive.com.

 

A positive approach to Employment Law

Leaders Forum 2, chief executive mentoring and experiential learning group (with members from Central England) had a very lively and interactive workshop with Ken Allison (pictured right) on his “You’re Fired – Lessons in Employment Law” session.

This was a very informative and useful with many good tips and insights for application to the staffing side of your business’ HR.

3 things stood out for us:

1. A reminder that you must now give at least 6 months notice before a “senior” member of staff is due to retire. Failure to give such notice means that the staff member would be able to continue in service beyond 65 until notice had been served.
2. During the consultation period as part of a redundancy process it is quite acceptable and lawful to advise people that are not in the ‘pool’ or department affected, that their job is not at risk at this time (or alternatively that their job is one of the ones being considered for redundancy). Many members present had been under the impression that they had to treat everyone as being at risk until the consultation period had ended (which is obviously very unsettling).
3. It would be sensible to re-position the “Disciplinary Process” (warnings etc for poor performance) as a “Performance Improvement/Capability Process”. This might seem trivial, but Members agreed that they would be more likely to use a less intimidating-sounding process at an early stage to improve an employees performance, rather than holding back until they had more or less decided that the staff member had to go. This is certainly a more positive approach for both employer and employee.

Peter Pritchett, Chairman Leaders Forum 2

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, to find out more about the Central England Leaders Forum, or to find a local group near you, visit www.chiefexecutive.com.

 

Caspar Berry – Risk and Reward

Suddenly, as the world’s finances look increasingly precarious, “Risk” has become a subject very close to all our hearts. As a former professional poker player, living and working in Las Vegas, it was very close to Caspar Berry’s for about three years.

Caspar Berry (pictured right) is a corporate speaker who held CEO members of two different experiential business learning groups enthralled as he talked to them about the the nature of risk and reward in business. Members of The Academy for Chief Executives heard Caspar tell how he’d thought that he was leaving the world of risk-taking behind when he left the world of poker to set up his own video production company which he later sold to Bob Geldof’s media empire, Ten Alps. But he hadn’t.

He spoke to chief executive mentoring and experiential learning group members about the business connection between an expert poker player and business decisions.

Members of Joe Adams’ Leaders Forum Group 6 (London) group listed their key learning points as :

1. “You can’t control the cards” in the same way that you can’t always control the events that happen in business, but you can control the way you react to those events.
2. Long term failure is not an option and “success is never final and failure is never fatal”.
3. Taking calculated risks in business is very different to gambling, since in gambling you will always lose, but with calculated risk taking, you have an excellent chance of winning.
4. Emotion should play no part in calculated risk taking; it should be based on careful assessment of the facts, backed up with analytical execution.
5. Fear of failure in anything is negative, while the desire to succeed is always positive and may even influence the outcome.

“Caspar Berry is truly a unique speaker and his, workshop ‘The Metaphor of Poker’ is entertaining as well as instructional. Caspar is a highly skilled speaker/facilitator and the many parallels between poker, risk taking and business are enormously valuable to anyone who is able to take this small quantum leap. Caspar is very careful to distance himself from gambling and points out that calculated risk taking is on the agenda of every business leader all the time.”

Joe Adams,
Chairman, Leaders Forum Group 6

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, or to find a local group near you, visit www.chiefexecutive.com.

 

The bottom has dropped out of my business

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. Part of membership involves members taking their issues to the table and discussing them with their peers.

At a recent meeting CEO members discussed the following issue :

“The bottom has dropped out of my business”

The business concerned operates in 3 market sectors, all of which have been hugely effected by the downturn (property, haulage and construction). A number of employees had already been made redundant and the business is now operating on a very low core staff.

Fellow CEO members first gave a metaphorical hug to the individual with this issue. There seemed little to say at first, but the mood switched to one of positivity… and ideas began to flow:

• Cash is king – what can you liquidate?
• If land is owned which is currently vacant and not being developed… could it be rented out? (for example, what about storing unsold cars / or refuse awaiting shipment to land fill?)
• Talk to the council about a Business Rates reduction/holiday
• Be open with your staff and request their ideas/suggestions
• Can any of your equipment or skills be used in a different way (for example, what about selling some of your equipment direct to the public?)
• Can you move out of your office and rent it to someone else?
• If you have massive amounts of equipment, what can be safely moth balled, and what could be sold to raise cash

For confidentiality reasons we cannot divulge all of the advice provided by our members – however, we do hold open meetings where guests are able to attend and experience for themselves the real power of shared experience and experiential learning alongside fellow leaders, CEOs, MDs and entrepreneurs. To find out how you can take advantage of advice like this every month, visit www.chiefexecutive.com.