A Tale of Discrepancy and Discretionary Tarting
‘Ehghaahg uhmajeddth ohtkchgh mghigh emmmhgh’.
Nope, I wouldn’t get that either! But my dentist’s brain seems to have adapted to most of his customers, at some point, sounding as though they’re in a cardboard box full of cotton wool. Open-wide mouths, some filled with metal probes, he knows the risk when he places his customers in `The Chair’ - there’s little chance of gratifying conversation – instead he explains what’s happening as he goes along.
At the same time as guiding a new assistant for quality control whilst translating the procedure, he’d however underestimated the risk of his dental dictionary being stretched too far. Re-framing the language for me, there was no risk to it not making sense, however, what hadn’t been thought through was the potential for his patient to choke…. with laughing: ‘I’ll tart it up using a Tarting Tool’.
In business, as in most situations: risk in proportion is reasoned by discretion.
Business and work environments are full of problems, many attributed to the grating that happens between rules and practice. For some, whose situations involve being their own managers, there are additional challenges to working autonomously without specific or clear rules available; conditions are defined using personal, sometimes unreliable or inflexible, values, which in turn makes the creation of a structure, to measure competency, ever more challenging. And, when a situation arises, when there isn’t a specific rule or working practice that offers conclusive direction, discretion, as part of a business practice, or system becomes stressed.
Holes, like rules, have a life cycle. For discrepancy the tarting tool needs discretionary usage.
Following the financial crisis explosion, the FSA (now FCA) announced, that it would undertake a review, MMR (mortgage market review): to deliver ‘a sustainable market for all participants’ and to be ‘flexible for consumers’. Its recent implementation has created headlines in respect of the assessment of borrowers’ income. In essence there were ‘holes’ which needed addressing and to prevent consumers being trapped, now places responsibility with the lender.
Figuratively, in the shoes of someone who fell through such a hole is Alice. Contemplating her situation (‘…she was considering…. making a daisy-chain would be worth the trouble of getting up and picking the daisies), she weighs the benefits to her fiscal position (this might be for a property or her business) against the effort that’s required. A White Rabbit (financial product headline rate) intentionally runs close by. Alice’s time is consumed and because she hasn’t a discretionary ‘system’ available, the labyrinth of challenges for discrepancy she’s facing isn’t considered as she follows the white rabbit…. down the hole.
There are some super-massive black holes in finance provision; similarly there are massive holes in business and for business, with property purchase and property sale, and, when they come about from discrepancies merging together, it isn’t all black …. its liquorice.
Tarting a cavity with a tarting tool has no effect when the discrepancy has come about because risk wasn’t measured with discretion.
Image Credits: Official US Navy Page, Mark Engelbrecht, Andrew Yee. Article credit: Copyright SUF © 2014
BOOM! The Only Acid Test
“As I hurtled through space, one thought kept crossing my mind – Every part of this rocket was supplied by the lowest bidder” ~ John Glenn.
There are some small numbers that can make a big difference to a business and there are some metrics that are readily available and ripe for easy improvement: the efficiency in using breeze blocks proportionate to bricks for a refurbishment, the types of stock allowed on the shelves longer than other types, the specific machine able to put out a new product, or even how the length of time taken to make a repair for a part that a customer doesn’t even realises exists.
And, glancing backwards over experience garnered in the daily running of a business, it’s probably the small tweaks and adaptations (how the day is organised, the sales cycle, staff issues… etc.) as being the most noticeable in having made or are still making a bigger difference for that business.
Putting aside the actual business type and market sector to isolate the financial aspect, too often financial decisions are also taken after, when the biggest numbers’ (gross profit, cost of goods, inventory and so on) history on the logs and spreadsheets have been looked over… and an accountant will likely guide through further changes to net better results (tax, VAT, company formation, bookkeeping….).
The small numbers that can make a difference get the attention they need. The mechanics are regularly overseen. The metrics are monitored. The financial statements have a regular MOT (Monitor or Terminate).
But what about, as we call it, the mysterious metric?
This is the measurement I use as a starting point for calculating lender’s interest for mortgages, loans and business finance. It isn’t a secret, obscure or hidden metric. It’s a usually overlooked business buffering opportunity made up of those small numbers – the little ones that make the difference amongst the numbers, spreadsheets and statements.
The financial statements might (maybe a year down the line) show where there is a problem (which six months ago was the future but is now the past). BOOM! While these numbers have been building up (or down), lenders have been building their key metrics using their own ratios and, a year ago, when there might have been wriggle-room in a business, so might a lender have had some wiggle room.
A business’s metrics (from its ratios) change, lenders’ metrics (from their ratios) change. The correct business metric directed at the correct lender metric, at the correct time is the acid test of fiscal health. BOOM!
Images and Article credit: Copyright SUF © 2014
Pollex’s Up! Time Thief
Where is the human Pollex situated?
First day away from the office and, blessed crackers, I was exposed as a lazy thinker… I’d have to Google that one… I had no idea
Thinking takes practice - When it comes to cramming certain facts, I’ve never managed to hold the map of routes that circumnavigate burning midnight oil. Although even if I’d realised that higher intelligence (and by that I’m not referring to myself) isn’t insurance against the necessity of putting in practice, I’d still have skipped school in favour of seeing Bowie live. By the time I was a parent I hadn’t even given a thought to parenting needing practice so, as a naive parent, ‘kinaesthetic learner’ was welcomed as enthusiastically as child given a puppy for Christmas and now, thanks to the Great God that is Google we’re all one click away from information overload …. and exposure to more lazy thinking.
Why bother problem solving by exploring ideas when there’s so much ‘knowledge’ readily available? - In business I’m sometimes as guilty as the next in giving out (accompanied by involuntarily inside mouth biting) ‘well… it depends’. The reason is (usually) simple: something is beyond my control; I have to surrender to an, in effect, legion of androgynous troopers, who waiting on the doorstep – ‘outside forces’. For as frustrating as it can be (for all parties), I can’t always give a definitive black and white determination. But, just as I’ve experienced sufficient to realise that time is of the essence in business, I’ve also come to recognise, you’re going to have a hard time if a job isn’t done properly. Hence, I have a more frustrating time when a person emits (often with side of the mouth chew to infer they’re giving thought), ‘well… it depends’ as their camouflage for sitting on the fence – time wasting.
Ground control to Major Tom… Can you hear me Major Tom?
Sometimes it does depend.
Without balanced thinking, pros and cons are useless - Take marketing for example. As each trend, strategy, plan, and measurement, expands, increases, decreases, the general shift becomes, as with each element of a business’s evolution, more complex; especially when (like you and me) the customer factored in to the ROI is increasingly savvier in using online search for information, solutions and comparison. Then take what is now an elemental marketing platform, the website. Every business owner will have their own opinion about the notion that a business without a website is said to be non-existent. A website for some is easy entry into marketing, for others it can be too difficult to even consider, different perspectives, both derived from a ‘thinking’ process relevant to itself. However, the value judgement of ‘thinking’ resides in the overview, which is measured by considering the positive points of having a website and the negative points, or lesser positive. When something hasn’t been tried before, or experience tells of mistakes, messy experience, or similar, the ‘thinking’ balanced viewpoint might go along the lines of ‘it might be worthy of more information for further consideration’.
When thinking isn’t practiced surely it goes the way of any unpractised skill, meaning it can’t be put into operation from experience. Using the analogy of the well-practiced acrobat with an ability to rotate many hula hoops, all at once, quickly enough to make the hoops look as one – that’s what a Venn diagram of the scope of my service business’s crossovers would look like (elements overlapping one another, plus elements overlapping with other service businesses) - just as other business owners’ Venns will have overlaps for how and what they operate. I don’t know about you, but for me it’s difficult to want to only direct my attention to the interesting bits of my business. The way I try to manage this tendency (and maintain direction) is to think about the decisions I have to make …. and make those decisions. And, as I don’t like to limit my thinking, the information I need mustn’t be limited or biased….
The point is, it’s not only the information that’s important. We all want a derivative black and white determination AND at the same time choice, alternatives to consider. The route of least resistance means that we don’t get distracted, decisions can be made quickly, time won’t run away further than it already has. Searching amongst constraints to find hidden, unobvious, possibility and informed decision making takes thinking about (time) which (as the inside of my cheek will attest), on the occasions of forces being beyond my control, can be frustrating - But as, in my experience, confident responses aren’t guarantee of certainty. Saying ‘well…. it depends’ can, depending on where you sit, be fence-sitting or thinking beyond the most likely.
“You ask yourself not if this or that is expedient, but if it is right” – Alan Paton
Image credits: Celestine Chua, Kevin K, Marc Dalmulder, Jin.
Article credit: Copyright SUF 2014©
23 12 2013
The Banking Reform Act, ring fencing retail and investment banking, and implementing recommendations of the Parliamentary Commission on Banking standard (including criminal offences for senior bankers misconduct), has become law.
As is said, this is just the beginning.
Although, ring-fenced banks will not be able to hold or own the capital of other non ring-fenced banks etc., it won’t be fully in force for another four years during which a new authorisation process for staff will be introduced and effectiveness reviewed.
And, a banking union plan has been agreed for managing Eurozone banks (UK plus 10 other countries are not part of the plan). The ECB (European Central Bank) has been put in charge of European Union regulation rules for banks in the Eurozone
Image credit: WetWebWork Article credit: Copyright SUF © 2013
23 04 2013
Standing small things side by side, a singular value often has the ability to magnify itself; the singular value is increased as a collective.
Individually three words can each hold their own important relevancy; stand those words next to one another, as World Book Night does (the smallest word propped-up by the two longest at either side) and their combined strength works together.
Words come together to create a sort of letter-land community, in this case the common cause is promoting the world of books (and literacy in general). The three little words standing in a row could have placed the littlest first ‘We’ll go in letter order, B-Book, then N-Night, W-World’ : Book Night World. ‘Nah! We’ll have little Book first, then you go World and I’ll follow’ : Book World Night. ‘No, you go first World because we’re all encompassing, then I’ll stand in the middle (the main act) followed by you Night’.
World Book Night. Enjoy Yours.
Image credit: mrsdkrebs Article credit: Copyright SUF 2013
21 09 2012
To avoid future bailouts at taxpayers’ expense, the splitting-up of major European banks debate continues considering the separation of high-risk investment banking and other bank operations: similar to the Vickers Commission (London) aim, in separating capital market transactions from banking activity (lending and deposits).
Since 2008, the familiar phrase ‘too big to fail’ banks, has ensured that four years down the line countries are running out of resources and the public are enlightened enough to want to know where their public contributions are being placed. Creating splits between the banking types seems to have two arguements; should there be any future problems being split, they’re easier to be dealt with, whilst the counter argument is, it was the specialised banks which instigated the problems in 2008 and the universal banks were stable.
Complex problems require comprehensive explanation.
Image and Article credit: Copyright SUF 2012
13 09 2012
In the hope of making something tasty for the economy to feast upon, one can only imagine the conversations that occurred during the process of creating something that has a bit of everything thrown in.
If ever there was evidence needed of Thick of It goings on in Mr Osborne’s department, the announcement of plans for a Government-backed ‘business bank’, to increase lending to UK companies, might be it.
“Vee’re-a gueeng tu meke-a bunk?”, Mr O might have said, in a `Muppet-style Swedish Chef ‘ dialect to spice-up incomprehensible ideas because they’re rarely understood. “Well we have tried, and we come up with jolly good names, remember Project Merlin?”, the advisers would encourage. “Tag of ‘bank’ can’t do any harm. Tho, make it different from the credit schemes before; this time instead of giving tax-payers’ money directly to the banks for them to lend it back out, we could pass the loan applicants to the banks”. “T- meke-a decishun. Eff’en it’s a ‘no’, business bank will make a decishun….. Eff’en its a ‘no’, it will be passed out-a agin” he might have continued. “Boot its nut reelly a bunk”, he’d confirm.
“Jolly good name tho’ : Business Bank, it could be run with a purpose, just like a business”. After some thought he might have responded, “Yuoo meun Bunkroopt?”. The advisers overlooked what he’d said. “Indeed, in a speech delivered at Imperial College, London, Vince Cable called for the Government to be ‘more like a business’ by making strategic plans and sticking to them”. “I hefe-a a plun…. und I’m steecking tu it!” “Exactly! Perfect strategy sir, keep things moving. Err, would now be a good time to pencil in a discussion about direction?”
Image and Article credit: Copyright SUF 2012
10 09 2012
Being recognised as a caring, sharing company sounds better for business – It conjures up images of a big family ready to embrace you in their circle of products and services as they go about their daily activity of focusing on profit. Interesting then to read an email sent to me with editorial-type articles – Including one from the MD of a major high street bank: quoting Churchill, pessimism and optimism, glasses half-full and half-empty…. and then a nifty self-promo of their product, along with the usual numbers-without-facts; Or rigorous statistical analysis or data. Which can, to some, be impressive stuff, things `getting better’, `enhanced services and offerings’ – These guys know where they’re coming from.
But it’s a bit disingenuous for a bank, at the centre of some major questioning about its own activities and context to be quoting Churchill out of context. For me, that leaves more Unsaid than said – and what was said wouldn’t make a jot of difference to many people applying to them for funding – zilch, nothing – the cupboard can still be empty. Many would say it’s impressive that such a high street bank is encouraging the small business to approach them, they like the sound of things going back to ‘normal’ because ‘normal’ meant before things changed.
Before the financial crisis there were small enterprises going about their business, holding tightly to the notion of value and doing the right thing. Before the financial crisis there were banks doing what banks did then, and still do now; Delivering for themselves.
Image and Article credit: Copyright SUF 2012.