One of my best reads this summertime had the somewhat dry title “The British Industrial Revolution in Global Perspective.“ Don’t be put off. Written by Robert Allen, Professor of Economic History at Oxford University, it’s a very readable* and convincing account of why the Industrial Revolution happened in 18th-century Britain, rather than anywhere else. Allen discounts any notions that Britons were superior entrepreneurs or innovators; indeed, other countries enjoyed similar advances in science, education, institutions and commerce. Instead, after setting the scene with societal and economic developments in the 16th and 17th centuries, Allen points to some primary factors which came together only in Britain and nowhere else:
The highest wages in the world (thanks to the Black Death and its effects on British society).
An abundance of cheap energy from coal (albeit not very useful initially, but developed to supply growing city populations).
Ample supplies of iron ore close to that coal.
Those factor conditions did not come together anywhere else, and so there were not the incentives and rewards for creating the wave of technological and business innovation that transformed Britain (and later the world). Allen also shows that the state played very little distinctive role in the British transformation. It was the cumulative efforts of individual entrepreneurs, engineers and other innovators addressing real business problems and opportunities which, because they were common in Britain, also generated classic cluster effects.
While interesting in its own right, Allen’s book reinforced for me much of what is wrong with current economic development thinking. All we seem to hear is more education, more science, more infrastructure, less regulation, less tax, and so on. All well and good (at least up to a point) but these are me-too strategies. Everyone else is following them, more or less. Me-too economies can’t make the step-change that Britain achieved in the 18th century (and sustained for 200 years).
The questions I think business innovators should examine are not only “What do we do to sustain and grow the industries we already have?” but also “What unique un-addressed problems and opportunities do we have which, if resolved, will enable us to build new unique and sustainable global competitive advantage?” And for policy-makers, “Will you adjust your economic development mechanisms to support those new initiatives?”
I can think of at least a couple of significant problem/opportunity combinations where New Zealand could build global leadership. Know anyone with some serious spare investment dollars?
*For those wanting data and/or academic references, Allen provides plenty, but they don’t get in the way.
17 years after the release of the Cadbury Report, the accepted wisdom in most English-speaking countries is that, except in unusual circumstances, the same person should not hold the roles of CEO and chairman* of the board at the same time. European countries have increasingly adopted the same practice. The USA stands notably apart, having a very high prevalence of combined CEO/chairman appointments. However, do the results justify the change? 5 years ago, professors from the Wharton Business School said that, as shown by analysis of the financial performance of US corporations, there was no evidence to support separation. Now Harvard professor Bob Pozen reports similar findings from British and European studies. Given this lack of evidence, Pozen comes out against any mandatory requirement for a separation of duties in publicly listed companies.
However, Pozen notes:
… most US firms already have an independent person performing the key functions that you would want from an independent chair. That person is the lead director, an independent board member who helps set board agendas and conveys the concerns of independent directors to the CEO. The lead director is also needed to preside over periodic executive sessions — attended only by independent directors — which are now mandated by listing standards at US stock exchanges. Choosing a lead director is a less dramatic way of fulfilling this listing standard than appointing an independent board chair.
In other words, there is a degree of separation and oversight in many USA listed companies, albeit the CEO is still the dominant player. However, notwithstanding the lack of empirical evidence one way or the other, I suspect most boards who have separated the roles of chairman and CEO, especially outside the USA, will be extremely reluctant to go back to the old model. Boards want CEOs to perform, to get things done, to drive the business forward, but they like the positional advantage a chairman has over a CEO on the odd occasion they need to rein the CEO in. It’s easier for a board to steer via the chair, than from the side.
Finally, Pozen adds:
… there is only one arrangement with generally negative results for a company: having a former CEO becoming the board chair of the same company. This can undermine the power of the new CEO. Unfortunately, as mentioned above, over 15 percent of US companies have this arrangement. Clearly that practice needs to change.
PS:
I am a member of the Wellington branch committee of the Institute of Directors in New Zealand, whose recommended best practice is generally separation of duties.
I use the chairman* title in a non-gender specific way, taking my cue from some notable female company chairmen who vehemently eschewed the “chair” title prevalent in more PC circles.
Economies change. The pattern and places of jobs shift. Voters demand politicians do something about it. Regional development programmes are often part of the political response, and many start to offer tax breaks, employment subsidies, building subsidies and so on. It sounds good, it looks like action, and (I’m being unfairly cynical here) no politician hangs around long enough to be accountable for the almost inevitable lack of success.
It gets worse when you have regions in the same economy competing with similar programmes. It just escalates into an arms-race of who offers the biggest subsidies. Britain has a particularly bad case of regional subsidies. In a country full of property investors and businesses, it’s amazing that its seven regional economic development agencies build business parks, often in areas away from where business is or wants to be. Bangor, a small university town in remote north-west Wales, has got one. It’s been empty for years. To throw good taxpayer money after bad, they’ve built another one 20 miles down the road at Holyhead!
Here’s a simple test. If it was your money, would you invest in a speculative large-scale commercial property investment in a remote small town. Of course you wouldn’t. So why should the taxpayer? Here’s another simple test. Would this business operate in this town/region/country without this subsidy? Why will it stay long term? No-one in their right mind would have built a major computer factory in Ireland (2 sea journeys away from mainland Europe) if it hadn’t been for the then-cheap labour, EU subsidies and Irish tax breaks. So it should have been no surprise when Dell announced it will close its subsidised Irish factories and move to Poland. The Poles simply offered Dell a better proposition than the Irish.
Is there any developed country with regional economy development subsidies which has achieved sustained economic well-being that wouldn’t have happened anyway? Ah, I hear, what about Singapore? Singapore is the exception that proves the rule, and that’s the point; it is an exception, a small city-state sitting at the hub of a key trade route, with no hinterland to worry about, and a collective will which allows it to act more like an industrial conglomerate than a country. For the rest of us, all the evidence shows that the market will determine what long-term industries you have, and where they will locate. All governments can usefully do is facilitate underlying factor conditions such as infrastructure, education, regulation and taxation frameworks, etc.. After that, like it or lump it, it’s all up to individual businesses.
None of which will stop voters demanding that “the gumment must do something” and politicians saying “we will“.
Disclosure: I was a non-executive board member of 2 regional economic development agencies in NZ. We didn’t do subsidies; we did try (not always successfully) to address factor conditions.
“There is a tendency to write-off the UK software industry because most of the familiar software companies are in the US. That would be a big mistake… organic and inorganic growth has resulted in the top 50 UK headquartered software companies growing c20% in the last year. Perhaps even more surprising, to an ever sceptical British audience, is the c70% of revenues that the UK software industry earns abroad. Indeed, the UK is not that far off earning as much from overseas markets as we buy in. Currently £4.6b plays £5.6b with the gap narrowing each year.”
“The problem for the UK software industry has never been the quality of its people or its innovation,” TechMarketView chairman Richard Holway said, instead blaming other factors holding the UK industry back:
Lack of available financial backing: In comparison to the US, it is much more difficult for UK software developers to gain access to venture capital funding.
Lack of marketing expertise: Many of the UK’s best developers simply fail in explaining how great their product is to investors and to the market.
Local not Global: Many of the UK’s software companies focus mainly (if not solely) on products geared to the UK market.
Lack of ambition: Many UK software companies are run as ‘lifestyle’ businesses. Very few UK software entrepreneurs seem prepared to risk the Merc for the seemingly scant possibility to become a global player.
Lack of management skills: Growing from a small enterprise to medium-sized is hard enough - but not a fraction as hard as that required to grow to be large. Few founders are up to running large, global organisations; even fewer are prepared to step aside!
Easily pleased: UK software companies have a long history of being other nations’ ‘acquisition fodder’. Founders seem to want to ‘take the money and run’ rather than take the risk of growing to something larger.
New Zealand (and Australian) industry observers will find the list very familiar, except perhaps for one thing. When you’ve only got 4 million people in your home market, international ambitions are needed pretty much from the beginning, adding the complexities, risks and costs of heading overseas while still very small, unsophisticated, and fragile. Given that struggle, it’s no wonder that many are satisfied once they’ve got “the boat, the bach, and the beamer.”
Is nothing sacred? Shocking news from the UK that Heineken is shifting production of Newcastle Brown Ale to Tadcaster in Yorkshire. How can Newcastle (pronounced NewCAHsel, not NEWcarsel) Brown Ale not come from Newcastle? (Actually, Gateshead on the opposite bank of the River Tyne). Before the Real Ale movement took off, Newky Brown was the aspirational beer for students, and unusual in those days for being in clear glass bottles. I remember the university rugby club being asked to provide bouncers for the university all-nighter concert at The Hammersmith Palais; our reward was free access to 12 hours of non-stop top rock bands and several crates of Newcastle Brown.
On a more serious note, though, when a brand is so intimately associated with a city, especially a city with such strong personality (accent, soccer team, and setting for many popular TV programs), it does seem like a major risk to move all production away from its original home. Heineken justifies the move on the grounds that Tadcaster already produces NBA for export, and with falling national beer sales, rationalisation is necessary. Understandable, and maybe a brand like NBA can survive such a move, but surely a token mini-brewery could have made a buck while keeping the brand roots valid. I’ll not be surprised if something along those lines happens. Other regional beer brands like Monteith (from New Zealand’s rugged West Coast region) have had to resurrect their traditional homes because their drinkers’ identification of the brand with the place invoked passionate protest.
When I lived and worked full-time in Britain in the 70s, “Victorian” was an epithet for hidebound, prudish and old-fashioned thinking. That’s all changed in the last year or two; the Victorians are sexy!
Britons have eagerly accepted recent academic reappraisals of the Victorian era. Self-reliance and enterprise were very strong features of Victorian Britain. Engineering, science, law, commerce, education, health care; you name it, the Victorians radically transformed it.
It might be nostalgia for a time when Britain was great. Or, if overheard conversations on the train are any guide, there’s a reawakening of entrepreneurial and creative spirit among the middle class, for many decades chained to the organisational employee treadmill. I’ve heard several people, and not just on the trains, say that they’re fed up with not having control of their work life, their savings and their opportunities. The chat about becoming self-employed or starting a business is higher than I’ve ever heard before. That’s strange in a recession, but maybe the disenchantment over recent events could have triggered a sea-change in British culture.
The day I arrived in Britain, The Times included two articles on the British economy. Great way to catch up on the current state of play, I thought. First the OECD, in its latest vew on the G7’s prospects, predicts that the UK’s economy will continue to shrink, by 4.7% in 2009, lagging the rest of the G7. Not good, I thought, until I read the response from The Times‘ business editor.
The OECD uses historical data. However, within hours of the OECD’s report came another one using forward expectations - the Purchasing Managers Index for the services sector, representing over 40% of the UK economy. This survey gathers the views of individual firms, and is a reliable forward indicator, just as in New Zealand the National Bank’s Business Outlook survey places great reliance on firm’s’ views of their own prospects as a strong leading indicator. The latest NBBO survey shows individual firms have reached a 5 year high in positive expectations.
The PMI services results have shown two months of improving expectations, implying that the UK is starting to recover, albeit weakly. The Times includes several notes of caution, but I sense, from much media study as I get over the jet-lag, that the mood of the country and the news media has lightened from the Stygian gloom of my last visit in December. The UK feels a bit like NZ 6 months ago. People have become fed up with recession, and decided that up is the only way to go. Cue D:ream.
KPMG has published a comparison of effective tax rates for people on US$100k a year in 86 countries (click here for the pdf file). US$100k is the entry-point for internationally-mobile managers and mid-level professionals. (KPMG also compares tax at US$300k for those further up the income ladder). The comparison excludes local government taxes and consumption taxes, and ignores what government provides in return (eg. healthcare). However, the figures are for a childless married income earner, not usually a big user of government services at this income level.
Once again, The Economist publishes an edited highlights graph. For my English-speaking readers elsewhere:
New Zealand income tax 32%, social security 1%, total 33%
Australia income tax 29%, social security 1.5%, total 30.5%
Ireland income tax 21%, social security 7.3%, total 28.3%
Singapore income tax 9.3%, social security 10%, total 19.3%
Hong Kong income tax 10.5%, social security 0%, total 10.5% (but just to make you really turn green, tax waivers can return some of that to you!)
I’m off to Europe on 2 September for 5 weeks. It’s a busy schedule, a mixture of business and leisure (London, Provence, Tuscany, Bristol, Giggleswick, London), but if anyone wants to catch up in London, let me know. At 41p to the NZ$, I might let the moths out of my wallet.
I know that my male readers look to me for sartorial advice (well, maybe not). Those preferring a conservative look will feel vindicated that the white shirt is back. The BBC reports that City of London shirtmaker Charles Tyrwhitt has sold 50% more white shirts this year. Tyrwhitt founder Nick Wheeler has an explanation. “A white shirt looks great but it is safe,” he says. “Bolder shirts don’t always fit in with the mood of the moment.”
Charles Tyrwhitt offers ten things you really should know about white shirts:
A sobering but thought-provoking fact
Proving its resilience and classic trustworthiness, the white shirt is once again at the front of city boys’ wardrobes in these credit crunching times. Gordon Gekko-style ostentatiousness, loud colours and eye-catching ties are out and a new sober seriousness in - and nothing says ‘lets get down to business’ like the rolled-up sleeves of a white shirt. “No one wants to look like a wide boy,” an Ernst & Young consultant was recently quoted saying.
A kinda spooky but true fact
The oldest white shirt in history - dating back to 3000BC - was discovered in a First Dynasty Egyptian tomb at Tarken by archaeologist and general brainy bod Flinders Petrie. Apparently it was quite a fancy linen number with pleated sleeves and a fringed neck. God knows what state it was in. Hope they kept the receipt.
A gory but kinda cool fact
There are more blood-stained white shirts soaking up screen time in the 1992 Tarantino classic Reservoir Dogs than any other Hollywood movie. Sit down in front of the DVD with a stopwatch if you don’t believe us. What would Quentin, Scorsese, Lumet et al have done without a nice clean white shirt to suddenly, shockingly turn crimson, eh?
A slightly naggy but need-to-know fact
You must take care of your shirt like it were a newborn babe. White shirts should always be just that. White. Pristine white. Ideally white shirts should be dry cleaned for you to pick up freshly laundered, pressed and ready to go. But if you must wash in the machine never mix with grey socks and always use whitener, naturally. And collars should never be dog-eared or wilting. If a white shirt looks tired and washed out it’s ready for the local Oxfam.
An obvious but needs-to-be-repeated fact
We’ve said it before, but it must be said again, there’s no more iconic white shirt-wearer in the world today than US president Barack Obama. He rocks a pristine crisp white shirt like nobody else on the planet right now.
A socially relevant but nonetheless interesting fact
The whole social concept of ‘white collar’ - as in ‘white collar jobs’ and ‘white collar crime’ - was coined by Pulitzer Prize winner and lifelong socialist Upton Sinclair in America in the 1930s. It comes from the days when all management and administrative staff would wear white shirts while manual workers would wear blue and foremen brown. It kind of stuck.
A perennially fashionable but practical fact
You just can’t go wrong with investing in some decent, high quality white shirts. For any occasion, it’s the perfect neutral base garment that can be dressed up or down and worked to maximum effect in stark contrast to dark ties and jackets. (Only the most fashion forward and daring should consider wearing it with a white tie.) And it always looks cool on its own too.
A punky but always classy fact
Despite its associations with the corporate world, the white shirt is so versatile that it’s just at home hanging down the trendiest east London rock dive as it is on the top floor of a multinational bank. Punk goddess Patti Smith iconised the white shirt as a statement of androgynous individualism on her classic Horses album sleeve - shot by American photographer Robert Mapplethorpe - in the 70s and to this day, worn with the right amount of youthful insolence, it’s still the epitome of cool.
A seemingly random but historically significant fact
There’s only one White Shirt Day in the world - and that’s in Flint, Michigan USA every 11th February. Why? It commemorates the day in 1937 General Motors manual workers won their sit down strike. Now every year on that day workers all wear white shirts as a reminder of their equal rights with management.
An unlikely but pleasingly jangling guitar fact
The only song to ever pay exact titular homage to the enduring fashion classic is White Shirt on 90s indie darlings The Charlatans’ debut album. “When my white shirt lets me down, like one we race against the wind.” Apparently.
I held off saying anything about the 40th anniversary of the first moon-walk because I had nothing to add beyond the usual awestruck adolescent wonderment of the time (which hasn’t diminished, by the way). Fortunately, UK IT commentator Richard Holway reminded me of something that is very relevant in my own career track:
The computer in Apollo 11 had just 64K of RAM. It seems amazing when we’ve now even stopped talking about megabytes in favour of gigabytes. In 1969 though, much of my programming was still in assembler code and I was expert in reading the holes in punched cards. I worried constantly about saving a bit here and a bit there. This was when dumping the ‘19’ bit from ddmmyy was common - and thus was born the Y2K bug!
My thoughts today are not about ‘Wow, look how far we have progressed in 40 years’ . It is more a wonderment that mankind could achieve a mission to the moon armed with such seemingly archaic tools. Truly incredible.
Indeed!
Just 3 years after the 1st moon landing, I wrote a complete business application - orders, inventory, billing, accounting, etc. - to run on an ICL 1901A with 8kb of RAM and 2×4Mb of exchangeable disk drive storage, written in NICOL (ICL’s version of RPG1, taught to me by David Nicholson, one of my oldest friends, who by happenstance ended up in Wellington NZ a few months before me and is still here). I was a dab hand with the old 3-finger card punch too!
Most currency relative value tools look at some mix of goods in each country (purchase power parity). The Economist cuts through the complexity by looking at just one ubiquitous product sold by a single organisation - the McDonalds Big Mac. Although the Big Mac index is really just a bit of fun, it has proved surprisingly effective over many years alerting people to significant disparities in currency fair values.
As with all international currency matters, the US dollar sets the base point. In effect, this implies that the US dollar price of a good is fair value. Clearly that’s not always so. The Europeans and, more recently, the Chinese have argued for an alternative, but there’s no sign of any real contender to be the new reserve currency. With that caveat, right now a Big Mac costs the Anglos and Japanese about the right price, the West Euros way too much, and most of the rest of the world way too little. Sounds fairly accurate to me!
First it was the XF, and now the new XJ. Jaguar is getting its style smarts back. I hope what’s underneath lives up to the exterior. Vista Group compadre Jack Yan was first with this official picture at his fashion magazine Lucire:
Struggling to get your head around current thinking on what governments are doing or should be doing to deal with the global economic crisis? The New York Review of Books recently hosted a symposium with leading economics pundits Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, and Robin Wells. Reading the summarised text of their discussion will give you a reasonably straightforward understanding of the various camps’ viewpoints. Although the participants do look at the bigger world picture, inevitably their discussion is somewhat US-centric. However, the USA’s situation and policy responses will affect us all, and similar debates are happening in every country and in international forums. The NYRB article is well worth the time to read. Just don’t expect a consensus conclusion: the debate still rages.
HSBC, one of Britain’s leading banks, has published a special report, “The Future of Business” (executive summary .pdf)“. Commissioned from The Future Laboratory, it is based on TFL’s own desk research, a 10-question survey of 500 business leaders, and interviews with 18 experts on business, economics, technology and youth culture.
The executive summary (the only part of the report that I could find online) gives a simple introduction to what’s hot or at least trendy in British business thinking and social evolution. The main themes:
The rising importance of major new industries - robotics, cybernetics, nanotech, computer gaming, biotech, stem cell research, nutriceuticals, renewable energy.
Increasing focus on cities rather than regions, including more intensively clustered industries and the emergence of knowledge-based super-cities.
New business economics linked to philanthropy, high human interaction and greater attention to emotional needs. Increased incidence of micro-multinationals (NZ readers know all about them), “collaborateering” (a new version of “coopertition”?) and crowd-sourcing.
Key social trends: multi-jobbing or portfolio careers and the blurring of private and business networks and channels.
Without the main report, it’s hard to see what serious data and analysis lie behind these soundbites. Some of them are plausible, but I’m sceptical of “pop” surveys. They typically lack scientific rigour, are very prone to “flavour of the month” bias in both design and conclusion, and they frequently assume enthusiasts and elite groups are representative of the whole economy and population (they’re not alone in that). Twee jargon and concepts such as Brighton being a super-city of “the alternative economy” only inflame my prejudices. The report’s worth a read, it gives you a sense of some of what’s changing in Britain, but I won’t be basing any serious business decisions on it.
Yesterday, we had New Zealand’s annual government Budget presented in Parliament. I’m not going to comment much on the Budget - politics is not an area I stray into often. I’ll just say that I have a sense of wasting a good crisis. My politics is classic liberalism - economic and social liberalism based on universal individual rights and responsibilities, not the American or British versions which have morphed into woolly-woofter centrist camps. So I’d have gone a lot harder on cutting the state’s activities while setting things up for the long term economic and social well-being of the country, firms and individuals. But that isn’t my focus today. I want to look at entitlements.
It’s a curious term - entitlements - especially when used by a centre-right government. It was used frequently yesterday, particularly by Prime Minister John Key in phrases like “No beneficiary will have their entitlements cut” or words to that effect. You wouldn’t say that the supermarket is “entitled” to your money every week, nor the petrol station, nor the hotel owner if and when you take that annual holiday in Fiji, nor even the charities to which you donate. You make choices on whether or not to spend your money, on what and with whom. But somehow, when a government spends your money for you, the recipients see it as an entitlement.
Every government spending programme - every single one - was initiated at some point by a government deciding that spending this money on that programme was a better idea than spending it on something else, or putting it in the bank, or reducing taxes. Before that decision to spend, there was no “entitlement”. The new recipients are usually intensely grateful - for about a year. Then they start to see the continued uninterrupted and unquestioned supply of that government money as an entitlement, an inalienable right which must be maintained and grown in line with any expansion of the use for which the money was originally supplied. Once a government starts spending on a programme, it’s extremely hard to stop, especially when citizens and institutions (public or private) receive those funds directly. Even if the original need has gone or morphed into some unintended or even dysfunctional application.
As a new non-executive member of a big-spending government agency’s board, I’d frequently ask “Why is the taxpayer’s money being spent on this?” I learnt quickly that, contrary to popular perception, we actually had very little power over what we spent, why and with whom. That was principally decided by the ruling politicians, whose decisions (either logical or appeasing some political constituency) were effectively concreted in place until overturned, if ever, by another set of ruling politicians who had decided the issue was important enough. We could move money at the margin, but the bulk of spending was effectively predetermined under rules set down by Cabinet, and very much seen as an entitlement by the often large and influential organisations that received it. Getting anything significant changed takes years of argument, followed by more years to implement those changes. [Update: see a more positive perspective from me here.]
Let me be clear. Although I’d probably do things very differently, most institutions and the intent for which the money is spent are worthy and legitimate. I also recognise that changes to funding mechanisms are disruptive. But this notion of entitlement is a real problem for us as citizens and taxpayers. It creates an ever-growing burden over generations, it ossifies society’s institutions and mechanisms, and it is a major barrier to improvement and innovation.
PS Having said all that, the Tertiary Education Commission, of which I’m a board member, contributed a very significant portion of the government’s expenditure savings. Although we also cut our operating costs - largely in line with the plan we put in place 3 years ago - the bulk of savings will come from pruning some of my pet hates, such as hobby courses funded as Adult and Community Education, industry compliance training, and various other silly funds of dubious merit. Result!
Yes, you read that right. According to The Sun, that eminent journal of scientific research, a survey of 2000 British men and women shows that IT people “were found to be the most selfless in the sack, the most adventurous and more likely to use love gadgets“. Of course, we computer scientists always knew this, but we’re modest, too. Unfortunately, the same survey ranks business owners poorly, which everyone who knows us will surely find hard to believe!
The OECD has just issued its annual survey of tax on wages using 2007/8 data. Some readers may be surprised at where their country of domicile ranks. However, these simple averages are misleading:
GST, VAT, sales tax and local government taxes, etc. are not included.
What about the higher earners, say 65 or 75th percentiles? For example, NZ’s higher tax rates rate kick in at very low $ levels, by comparison with other countries.
And let’s not even mention the differences between countries regarding real wages, local purchasing power, and tax or tax breaks on interest, dividends and imputation, mortgage interest, pension contributions, capital gains, inheritance, house purchase stamp duty, fuel tax, road tax, etc, etc, etc.
The Dominion Postreports that the founders of HELL Pizza have bought back their NZ master franchise 29 months after selling it to TPF, the owners of Burger King in New Zealand.
Callum Davies, Stu McMullin and Warren Powell opened the first Hell Pizza in Kelburn, in Wellington in 1996. With a menu and branding themed on the seven deadly sins and a penchant for provocative marketing campaigns, which included giving away condoms to promote its lust pizza, the chain had expanded to 66 stores by the time it was sold for about $15 million in December 2006.
The founders would not say how much they bought it back for but it is understood they paid less than they sold it for.
HELL’s founders sold their NZ operation to generate cash to expand internationally, establishing HELL in Britain, Australia, Ireland and Canada. Under TPF, HELL NZ seemed to lose its way. Those who bemoan the sale of businesses will no doubt use the HELL buyback to push their barrow about the evils of companies being sold to “corporate” or “overseas” owners, who then “destroy” a good business. What’s not mentioned are the far greater numbers of business that prosper under new ownership, or the productive use of the sale money to reinvest in other ventures, new or existing. And founders can destroy businesses just as easily as subsequent buyers.
However, it’s not unusual to see founders buy back businesses that they’ve sold, especially if they’re still involved somehow, and often for a much lower price than they received when they sold it in the first place. I can think of several examples where I know the principals personally. The extra capital they can apply (gained from the original sale and from their other ventures), combined with their renewed passion for the business, often takes the business on to new heights.
HELL built its brand on up-market pizzas and cheeky promotions. Here’s the message to entice you to open an online account:
Your soul doesn’t do much. You can’t feel it. You can’t see it. It sucks at making coffee, and when you’re buggered after a hard day, it’ll never have dinner on the table. So give it to us. Then you can begin your descent into HELL. The deeper you go, the more retribution you’ll receive for your measly soul. The retribution could be anything from free morsels of food to exclusive access to random stuff. That all depends on how good you are at being bad. And if you make it right into the darkest depths of HELL, then you’ll receive free pizza for life. So sell your soul to us.
The good news keeps coming at Kiwi online accounting firm Xero, which has announced a partnership with BT, the leading UK telecommunications company. Xero shares, already lifted by MYOB founder Craig Winkler’s investment and winning global recognition with two Webby awards, rose 20% on the BT news before coming back slightly up on the open. The marketing channel agreement expands Xero’s relationships with leading national telcos targeting small business, including Telecom NZ and Telstra. Telcos can very much more easily reach millions of small business customers in ways and at much lower cost than just about any other channel. BT in particular is seen as the trend-setter in offering a comprehensive suite of products and services for small business, and Xero fits in perfectly. Rod Drury and his team have adopted a smart strategy.
