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 NEWS-TRENDS-ANALYSIS
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TRENDS & ANALYSIS
Regional Perspective: Northern Ireland 
Michael Maguire, Managing Partner with Quintus Management makes some harsh observations Doubtless you are reading this column for a little light relief. At least I assume so. Well, if you are familiar with Northern Ireland, let me ask you to do something. Grab a pencil and some paper and without thinking too deeply I want you to write down the names of the first 10 retailers with which you are familiar in the province today. Having done that, in a separate column, I want you to list out the names of 10 retailers that you remember say 20 years ago. OK so far? Several things will occur to you as you review your lists. Firstly the chances are that few names will appear in both columns, indicating the extent to which the life cycle of some retail businesses reached maturity and decline and to be replaced by others. Secondly, many of the older names included locally owned department stores like Anderson & McAuley, Robinson & Cleaver and Bank Buildings with a floor area the size of Fermanagh and a topography to match. By contrast, today's retailers are usually smaller, single floor outlets that are international franchises offering the same products in Bangor as Bangkok. The third issue is that fewer locally produced products are stocked in any contemporary listing. 
The retail scene has changed out of all proportion and your own personal survey has served to underline the extent of that change. There was a time when retail outlets mirrored the condition of local economies but today the mirror is less clear as retail delivery is influenced more by international distribution policies than domestic aspiration. Now let's roll back the clock to 2001. Just five years ago many international chains predicted imminent changes in consumer shopping preferences as the dot com culture revolutionised B-2-C trading. Floor space and staffing levels were to shrink as retailers reduced stocks to the top 10 lines. The revolution was to come with the rapid deployment of in-shop Internet kiosks offering access to an infinite selection of goods. Leading retail chains like NEXT and GAP geared up for the change in a big way. US based K-Mart installed over 3,500 Internet kiosks before going on to file for bankruptcy! The problem with the new age approach to retailing is that customers are simply not persuaded by it. They accept on line shopping at home, but in the shopping mall they want to shop! 
As the retailing dynamic is progressively dictated by global commerce, what is its future to be where bigger local players have disappeared and smaller family shops come under the auctioneer's hammer daily as sons and daughters look to other professions for their future? Well domestic retail space has expanded year on year; largely due to the continued expansion of UK and European chain stores. But there is every sign that retailing is reaching saturation. There is only so much product that domestic consumers can absorb. Indeed as retail revenues are also impacted by global operating costs it is probable that here, as elsewhere, there will be rationalisation of outlets and brands in the next five years that will affect High Streets and out of town malls alike. Even the growing number of outlet malls will not be immune. 
In my judgment, while the popularity of virtual shopping will continue to take market share from traditional stores, the consumer ideal of real shopping through touch, feel and experience will not abate. Some would argue that recent retail history has enhanced consumer choice, but not necessarily consumer selection. Thus conditions may yet favour local entrepreneurs with a creative flair and an eye for opportunity as international brands pull back. Maybe regional chains like Menarys can point the way for others to follow. All we need now are more local products. Roll on change!
You may contact Michael Maguire at: (3 August 2006) © Quintus Management (2006)
Regional Perspective: Northern Ireland 
By Michael Maguire, Managing Partner with Quintus Management OVER THE last five years there are few industries that have had to face change quite like the food sector. With its roots in agriculture (pardon the pun), our modern agri food industry is a legacy of historic government policy committed to national self-sufficiency in food, and a product of local enterprise in which farmers and processors each play their part to the betterment of the economy. Or so it should. 
However, as in other parts of the UK and Ireland, the industry has been a victim of periodic health scares, a target of ever changing legislation and more recently, a casualty of changing consumer values and evolving patterns of distribution. These factors have combined to create uncertainty in what is a bedrock of local industry. To put the problem in perspective, the quality of Northern Ireland food products is among the best in the world which is why the region has enjoyed a successful track record in export markets. The processing sector alone employs some 19,000 people and has a combined sales turnover in excess of £2,200 million. A further 30,000 or more are employed in the supply and distribution segments of the industry. Thus on average, every family in the province has a connection to the sector and is, in some way, dependent on it. The shortcomings of the last few years have resulted in falling margins for processors and some segments of the industry struggle to achieve profitability despite high levels of consumer spending and wider shopping access at home. Much of the problem centres on changing consumer purchasing patterns and wider availability of food products from around the world. So what can the industry do to fight back? How can local processors regain market share at home and in external markets? In my judgement there are three imperatives here. Firstly there is a need recognise that the industry problems are not recessionary in nature; thus waiting around until things somehow improve is not a strategy for prosperity, especially if your business is losing money. Cost cutting alone won't win back customers. Secondly, there is an acute need to get closer to consumers in target markets and to design and deliver products that match needs at prices they should reasonably expect to pay. This means being creative and innovative and adding greater value. In this regard, processors must work much more closely with suppliers and retailers to maximise business-to-consumer opportunities. It also means being smarter at reaching out to customers through better investment in branding and through collaborative marketing between companies as partners. The third imperative is to consider how best to strengthen distribution so that consumers, wherever they are, can more readily buy locally made food products. If products are not on a shelf or available across the Internet in the first place, one can't blame the consumer! There may be merit in processors comingtogether topool sales and distribution arrangements in external markets or even at regional or local level as circumstances dictate. There is also value in assessing non-conventional distribution channels such as direct marketing and Internet distribution to augment current arrangements. Having made these suggestions, one does not underestimate the prevailing complexities facing food companies in Northern Ireland or elsewhere in these islands. Indeed one recognises the strident efforts being made by many businesses to develop and prosper but some are less assertive than others. However, the industry is resourceful, committed and tenacious like no other and has the capacity not just to face change, but to address it and to come through it with success, and one hopes it will. In the words of the famous American cosmetics queen Mary Kay Ash, ‘If you think you can, you can. If you think you can’t, you’re right’.
You may contact Michael Maguire at: (20 June 2006) © Quintus Management (2006)
Nielsen Out To Capture Impressions 
By Michael Maguire, Managing Partner with Quintus Management According to Internet Marketing Information provider Vox News, Research Company Nielsen AdRelevance has recently completed an interesting survey of US based consumer goods advertisers using the World Wide Web, the results of which may surprise many professional marketers. 
According to Vox, “the list notes the top ten advertisers by impressions received, rather than by spending, allowing some media companies and direct response firms - typically those that get the best deals on an impression or barter basis - to rise to the top.” Top of the list is the Swiss food giant, Nestlé makers of popular brands such as Kit Kat, Stouffers and Maggi with 312 million impressions. The other nine advertisers in descending order are Adolf Coors (alcoholic beverages), PepsiCo (soft drinks), Dennis Publishing (UK & US based publisher of specialist magazines), IncreaseYourHealth.com (natural medicines), Avon (direct purchase cosmetics), Life Script (nutrition research), The New York Times (news publisher), Dow Jones & Co (business analysts), and Philips (Netherlands based electronics giant). While measuring advertising awareness on the basis of the numbers of hits surfers make to web sites may not, in the judgment of many marketers, provide an accurate reflection of brand dominance on the web, it does demonstrate the power of browser selection systems and the capacity of the user to decide what he/she wishes to read. The difficulty of using impressions to measure advertiser effectiveness is that surfers who use web browsers to ‘blanket’ source sites often have little awareness of the site they have chosen, much less the company name/brand behind it and they will delete pages readily that do not match their surf criteria and without their even being conscious of the brand name behind it.
You may contact Michael Maguire at: (27 April 2005) © Quintus Management (2005)
Poor Awareness Of Market Economics 
By Michael Maguire, Managing Partner with Quintus Management While scanning the newspaper headlines reporting the state of campaigning in the run up to the UK elections on 5 May, I was struck by the paradox of how modest has been the attention paid by the political parties to the dynamics of the UK economy. True there have been heavily reported utterances on socio economic priorities such as the state of education, healthcare, immigration and tax and spending priorities; but on the state, structure and sustainability of the economy there has been nothing. In the current climate more press attention appears to be given over to celebrity watching than to the nation's prosperity and that makes no sense at all. 
I will go further and suggest that in the time that the current government has been in power, public consciousness of the nation’s economic prowess and public understanding of key economic measures seem to have reduced. Traditional economic indicators such as the Balance of Payments, the Balance of Trade, Inflation and Unemployment scarcely merit a mention in the press these days. In the post war years of the 1950s and early 60s the UK witnessed meteoric growth in consumer expenditure on housing and all manner of consumer goods from washing machines and spin dryers to TV sets and cars and the domestic economy that underpinned it all had been pretty sound. We had a significant export oriented manufacturing industry that broadly managed to match the demands of UK citizens as well as those of Johnny Foreigner. British cars, trucks, ships and planes were in heavy demand and all was well with our world, right? Well no, not really. Being the world's 'It' centre of the 60's didn't last 
The problem was that while on the surface of the world’s psyche, the UK was fast becoming the international ‘it’ centre of creative design that dominated the engineering, fashion and music scene in the 1960s, our industrial base was ailing and failing and our thirst for foreign made goods, foreign food and foreign travel was insatiable. Prime Minister Harold MacMillan, who in 1957 uttered the famous statement that ‘most of our people never had it so good’, appeared unable (or even unwilling) to get to grips with faltering growth, a burgeoning balance of payments deficit and growing inflation. So like many of his predecessors and successors, he opted to increase taxes and public borrowing to balance the nation's books, thus constraining economic growth. While there were loud wailings from contemporary economists and commentators that despite apparent prosperity, the country lives beyond its means the government of the day appeared stunningly ignorant of, and impotent to, the need to facilitate economic expansion. Thus by 1964 when the Conservative government lost the election and Harold Wilson rolled into Downing Street with his gannex overcoat and protruding pipe, the need for economic expansion was very evident. Yet despite the Labour premier’s renowned political dexterity, his reform programme centred heavily on government control of business and selective nationalisation rather than the encouragement of commercial competitiveness. Within a few years the country ran into serious debt and high unemployment and faltering investment followed that was only arrested with the arrival of the Thatcher government. The lady’s tough monetarist strategy of the 1980s brought inflation under control and confidence in industry. Recovery and success demanded a new vision While prosperity returned, the measures that were required to ‘turn the ship around’ demanded much original thinking and heavy social reengineering that many have not forgiven to this day. The point about this is that in order to address a huge and looming problem, industry needed to be incentivised, reorganised and modernised with a vengeance to become internationally competitive and the public too had to be educated to the importance of economic targeting and personal wealth generation. The whole privatisation process, union reforms and pursuit of personal capital that followed in the Major years were part of that imperative. Now many years on New Labour promotes a new (or nearly new) centralising agenda that often sounds more like Thatcher's Conservative policies of the 80s than the more liberal Tory agenda of the Major years. However such policies are often cloaked in the cloth cap language of Old Labour and on whom Blair depends. What is new however, is the toll that ever rolling state bureaucracy appears to be having on commercial innovation, investment and risk; this at a time when the world has become a global village in which the prosperity of nations is linked wholly to the commercial performance of businesses. In reality we seem to be in danger of ignoring the warning signs of economic underperformance and loss of international competitiveness with reckless abandon and returning to age old policies of higher taxation to address economic difficulties rather than pushing better economic performance. The economy is now the weakest it has ever been To put the matter in perspective, the UK manufacturing sector is now the weakest it has ever been for over a century and a half and there is heavy reliance on the service sector for the nation’s prosperity and employment. The UK trade deficit on goods in February was in excess of £4.8 billion and while exports have been reasonably stable despite some sectoral difficulties, imports from EU and non EU countries continues to rise. In turn the current trade surplus in services including financial services and tourism has been under assault and is failing to offset the progressive loss in manufacturing output as plants have been closed and relocated to the Far East. Further, there is an increasing reliance on the import of goods and services (including foodstuffs) to satisfy domestic demand and which, in turn, is fuelled by an ever growing private sector (as well as public sector) debt burden. The UK now ranks the fourth worst country in the world for private indebtedness. In the midst of preelection posturing and post election euphoria, I am forced to reflect on the sentiments of leading economists some forty years ago, that despite apparent prosperity, the country lives beyond its means. The American Philosopher George Santayana (1863-1952) put the issue more pointedly when he said, ‘those who cannot remember the past are condemned to repeat it’. Thus I appeal to our political leaders; please let us concentrate on developing the economy and educating our citizens on the importance of export driven growth and highlight this imperative through the media lest this writer finally succumbs to the contemporary preoccupation of celebrity watching, not through any genuine interest on my part, but through boredom and apathy!
You may contact Michael Maguire at: (4 May 2005) © Quintus Management (2005)
How to Deal With Succession Planning 
Chartered Occupational Psychologist, Consultant and a Founding Partner of Quintus Management June McKeown, discusses the big dilemma facing many small and medium size organisations and provides clear pointers for facilitating vital management succession Despite the vital importance of succession planning, few companies appear to treat the need for succession planning as a strategic imperative. A few years ago an American survey highlighted the problem quite graphically. It showed that 22 per cent (of more than 500 participating organisations) responded favourably to the statement that 'my organization has a well developed management succession system.' Organisations Must Adapt and Diversify to Satisfy Expectations In the past, succession plans were perceived simply as 'replacement' plans and organisations could fill outgoing management positions internally. However many now find that they do not have a ready-made talent pool from which to select and are forced to shop outside. So why is this happening? The reasons may be found in what is referred to as the 'Succession Dilemma.' Organisations must adapt and diversify to satisfy not only shareholders' expectations, but respond appropriately to customer demands. It is therefore often difficult to determine what management skills may be required in the future and groom internal talent accordingly. Coupled with this, is the fact that the job for life has gone. Organisations are reluctant to raise expectations of internal 'high flyers' or prepare them to fill senior positions. Closer examination of the problems of succession planning often point to a reluctance on the part of Board's to develop cogent succession policies. This can typically result from either shareholder pressure forcing policy makers to concentrate on finite horizons to the detriment of longer term expediency, or from failure to accept the necessity for change. Smaller organisations such as family businesses frequently suffer the legacy of inadequate succession provision where there may be no natural heir within the family. But do we have a problem without solution?. In my judgement there are three common approaches to succession planning that are popularly applied:
At one extreme the 'relay race' is where the baton changes from person to person in rapid succession. In reality this often reflects poor rather than positive planning and leads to demotivation within organisations. At the other extreme the 'horse race', by far the most common, is where internal and external candidates are set against each other. This can trigger family feuds as such candidates are invariably shareholders as well. The third approach is the old chestnut - the 'unplanned event' where matters are frequently left to 'sort themselves out,' and frequently have disastrous consequences. It Seems Harder to be Recruited as a Trainee than Leader of the Organisation Mike Heffenden, Director of the Career Forum once stated that not all organizations give adequate attention to appointments or the development of systems that ensure a good supply of internal candidates with skills and experience. He is quoted as saying, 'Choosing a new chief executive is probably the most critical decision an organization can make. Yet, it seems harder to be recruited as a graduate trainee than the leader of an organization'. Enlightened organisations are now introducing processes that maximize and develop a pool of adaptable and flexible talent to meet current and future needs. A recent report on succession planning suggested the following do's and don't guidelines which are provided for illustration. Recommended Practices
Not Recommended One could argue that processes that maximize talent pools serves to reinforce the 'psychological contract' between employers and employees, a feature that has been increasing during the last decade. In these circumstances, individuals are assisted by the organization to develop a range of 'tradable skills' that will be of value in seeking alternative employment should circumstances change. Thus employers can optimize talent without having to assume the burden of 'guaranteed' job maintenance.
You may contact June McKeown at: (3 January 2005) © Quintus Management (2005) |
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