Lessons learned in downturns

Recent blogs on these pages will immediately offer one clue as to a mistake to avoid in these tough times. Richard Hoblyn has identified the attitude of Irish business to overseas creditors. It has, in my experience, always been true, don’t offer credit to an Irish company. In that country they are so friendly and so attentive; until they owe you money.

Dirk wants war stories from me. Way back in the depths of the 1970s I flew to Eire with a wonderful invention that was perfect for the busy licensed trade in Ireland, a cheap and simple filter to remove tobacco smoke from the air.

I was still naïve and signed a distributorship deal with a company of charming, hospitable and genial Irishmen. People who were so sincere you would trust them with your wife.
Luckily because of a hitch at the manufacturers, I was only able to dispatch half of their initial order. The letter of credit for the full order never arrived and I never heard from those lovely people again.

Is there an equivalent to the County Court in Ireland? There wasn’t then. Were the Garda interested in conspiracies to defraud? Not if the victim was English.

Making sound judgement on the people we agree to work with also extends to employees.
I have been involved in a discussion, in the past few days, (summary here) on how people are affected by the job they choose to do. This caused me to remember two of the most profound pieces of advice I ever had when considering employing people.

The first is from an ancient Chinese source; ‘If you suspect someone, don’t employ them. If you employ someone, don’t suspect them.’

The second from a head-hunter; ‘Most people will employ a person they think they will get on with or be able to control. Not always the best candidate for the work.’

I suggest we ask ourselves how many times we have done the latter and lived to regret it. I wrote recently about the UK being the most expensive and risky place to employ, some work I did recently indicated it is now four times as expensive, to provide employment, than in 1994. Do we expect an employee to earn four times as much for the business than they would in 1994? Probably not; so the risk of providing employment has increased considerably since 1994.

About twelve years ago I came up with a concept of collaborative working, as a system. At the time I called it the Cellular Corporation, a way for small businesses to gain the benefits of a large corporation without a loss of independence as a sole trader or micro-business.

Great in theory but I have never been able to persuade enough owner managers to commit. What this did create was another way to employ people or, rather, benefit from their skill, pay them a fair to good rate but not employ them in the PAYE sense. The theory has never been more valid but there is one Law that prevents it being widely implemented.

Cyril Northcote Parkinson, in his famous essays, now known as Parkinson’s Laws, assured us that a manager will count his own success and importance in terms of the number of people he commands.

If, as an SME owner, you need methods to survive and prosper in this downturn, this could be valuable to you. If you insist on employing or trading in Eire, think twice before making a decision.

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