Autumn 2009 Update

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Economic transition and business reorientation

Cautious because we see contradictory trends in the housing market such as rising house prices and low transaction volumes (90% loan-to-value mortgages have virtually disappeared causing an absence of first time buyers). Consumer discretionary spending remains subdued, the price of necessities such as fuel and energy continue to rise and the stock market is increasing at a much faster rate than the real economy.

Libor graph

Optimism because the expectation is that we will move to positive GDP growth during this month, September new vehicle sales are up 11% on the same period last year, there is little medium-term threat of inflation, interest rates are expected to remain unchanged for the foreseeable future and the 3 month BBA LIBOR is approaching the current Base Rate of 0.5% suggesting further easing of the financial markets.

The CBI’s current GDP growth forecast for 2009 is -4.3% and for 2010, 0.9%. Unemployment stands at 2.47 million and is expected to peak at 3.0 million during the first half of 2010. Public Sector Net Debt now stands close to 60% of GDP (excluding bail-outs). Whichever political party wins next year’s election faces a significant and long-term budgetary challenge. Measures announced at the recent political party conferences: a freeze on public sector wages; increasing the retirement age by one year; removal of certain tax breaks; further wealth related taxes; and, cuts in the defence budget will, in the medium-term, do little more than dent the huge budget deficit.

The opportunity over the coming months is to rejuvenate our businesses through strong and collaborative relationships, real attention to customer service and continued emphasis on operational excellence; ensuring that individuals and teams understand customer’s evolving priorities, are clear on medium term objectives and constraints and are motivated to take early initiative as we enter a new phase of economic growth.

A lot has changed since January. What hasn’t changed is PI Consulting’s unwavering commitment to delivering exceptional client service and the importance we place on our relationships with the people we meet and work with as we nurture and develop our business.

Please note that we relocated our Cambridge office from Melbourn Science Park to a newly refurbished part of St John’s Innovation Centre in Cambridge on 1 September 2009. St John’s Innovation Centre is located close to the centre of Cambridge and the A14 and provides ample parking facilities for staff and visitors. Address details and a map to the new office can be found on the PI Consulting web site. Do not forget to update our Cambridge office contact details: PI Consulting, St John's Innovation Centre, Cowley Road, Cambridge, CB4 0WS.

Luton Gateway Development Corporation is the Local Delivery Vehicle for the Luton and Central Bedfordshire area. Luton Gateway’s purpose is to work in partnership with key public and private sector organisations to accelerate growth and regeneration as detailed within the core strategy for the area. During 2009 Luton Gateway formed a new Board and executive team comprised of senior movers and shakers from a range of public, private and academic organisations. PI Consulting worked with the Board to conduct a Board effectiveness review, develop their strategic aims and accelerate the formation of a cohesive and effective leadership team. PI Consulting was subsequently engaged to facilitate a Property Developers Forum attended by senior representatives from the property development industry, local councillors and senior representatives from the Local Authorities. The forum achieved frank and open discussion and requirements for successful delivery of the core strategy for the Luton Gateway area.

During the past 18 months Royal Bank of Scotland has taken active steps to demonstrate its commitment to supporting its customers through the difficult economic period. Since our January news letter PI Consulting is delighted to have entered into a framework agreement with the Royal Bank of Scotland’s Specialised Relationship Management team to provide business performance reviews and recommendations to further support and improve the performance of their automotive sector clients.

Ridgeons Group, East Anglia’s leading builders merchant, was founded in 1911 and now operates from 21 prime locations across the region. PI Consulting was commissioned by Group Managing Director, Angela Rushforth, to conduct a business, process and material flow analysis of their Suffolk based Ridgeons Forest Products (RFP) manufacturing operation. RFP recently invested in state of the art timber manufacturing equipment and facilities and, consistent with their continuous improvement ethos, were keen to ensure that their investment led to significant customer service and profitability improvements. Subsequently PI Consulting was commissioned to develop a detailed activity based costing model of the RFP business to identify further opportunities for process improvement within their RFP operations.

Nimbus – Inspiring Performance

Nimbus Partners, a leading global provider of business process management software, hosted its annual customer conference in London on 23-24 September. Ian Gotts, CEO and Chairman of Nimbus asserted: “that if you are documenting your business processes and nobody reads them, why are you bothering?” Presentations included:

Human Synergistics - The role of leadership and corporate culture in the failure of the global financial system

During May of this year Dr. Robert Cooke, founder and chief executive of Human Synergistics International (HSI), gave a key note speech at the HSI European Professional Development Event held at the British Museum. His presentation examined the role of leadership and corporate culture in the failure of the global financial system and, referring to research, he explored the links between the HSI Leadership Impact and Culture inventories and organisational outcomes such as risk profile and sustainable performance.

During his talk, Robert referred to competitive irrationality and the misattribution of success. Competitive irrationality occurs when corporate decisions are driven by, for example, ego rather than by a coherent assessment of the benefits and implications to stakeholders and the long term value of the business. Misattribution of success relates to the tendency to wholly attribute successful performance to one or more individuals rather than to all the contributing factors such as growth of the sector as a whole. If individuals start to believe in their own infallibility they are likely to create a corporate culture with insufficient consultation or challenge to avoid increasing the risk profile of the business. Both these topics are highly pertinent in relation to corporate governance, performance bonuses and business sustainability.

TimeCorder celebrates 20th anniversary

In September 2009 Pace Productivity Inc. celebrated the 20th anniversary of the launch of TimeCorder. Over the intervening two decades not only has the product developed as technology has advanced but Pace has also gathered a wealth of data which allows thorough benchmarking of an organisation's time usage and productivity performance against job role and industry norms. Overall results from client projects show that knowledge workers spend more time than they would like on lower priority, non-value added tasks, and less time than they would like on high priority tasks such as planning, managing, customer service, and selling. The opportunity is for organisations to shift time allocations from low to high priorities in order to increase profitability and performance.

In shape for the upturn

PI Consulting is running a series of seminars in conjunction with Clydesdale Bank and Birketts LLP on 4^th, 11^th and 18^th November in Norwich, Bury St Edmunds and Cambridge. The seminars start with registration at 16:00 and will finish at 18:30 followed by networking and refreshments.

We have called these seminars ‘In Shape for the Upturn’ and will focus on three areas with a common theme of profitable growth:

Fit for Investment
Values, Leadership, Culture and Results
Legal Issues

To register or request further information please click here.

PI people

Professor Colin Coulson-Thomas calls for a widening of the 'director gene pool'

The 10th International Conference on Corporate Governance was held in London on 9th and 10th October with the theme "Re-energising corporate governance by realigning the moral compass of the boardroom". Speaking at the event, PI Consulting associate Prof. Colin Coulson-Thomas and author of Developing Directors, suggested company nomination committees should consider experienced candidates from the voluntary, public and professional sectors for board appointments: "We need to look beyond the ‘normal suspects’ for people of integrity who are willing to ask difficult questions and who would welcome an opportunity to make a contribution."

Ian Gill obtains RYA Day Skipper qualification

Ian Gill completed the Royal Yachting Association Day Skipper theory course in May and also obtained the Maritime Radio Operator Certificate of Competence. The Day Skipper course covers maritime rules and safety, navigation and passage planning and meteorology. Ian put theory into practice in the Solent earlier this month, chartering 2 Beneteau 37s with fellow members of the Trent Offshore Group.

Seamus Allison completes a stage of the Tour of Britain

In September our keen cyclist Seamus Allison rode a stage of the Tour of Britain that was opened up to the public - completing the 90 mile course in just 7 hours to raise money for the Prostate Cancer Charity. Seamus is competing in a number of other challenge events during the autumn to raise further funds for the Prostate Cancer Charity and for the British Heart Foundation.