Author: wilks

I called myself wilks when I first started blogging. The idea was that it would afford a measure of anonymity. For much the same reason, there was no photo. Times change, hence the photo, but I decided that even when I changed the blog’s title at the start of 2009, I should remain wilks.

Asleep at the wheel

A damning article by Luke Johnson in this morning’s FT, Bank leaders are a disgrace to capitalism. Johnson reserves his special contempt for RBS,

“Bank directors are not under-rewarded. The six executive directors at Royal Bank of Scotland, for example, took home £16m in cash last year – on top of their accumulated pension entitlements of £26m. These are not entrepreneurs who risk their own capital in life – they are just bank employees. That sort of cash should buy geniuses who never fail. It should pay for leaders who understand the larger role RBS plays in the system, and the vital contribution it makes in financing the private sector, since it claims it has the number one brand in corporate banking.

Yet in undertaking the “largest banking acquisition ever” by buying ABN Amro after the market had begun to turn, RBS has destroyed value and its management credibility on a breathtaking scale. How can they dare to withdraw facilities and berate borrowers when no one has been sacked for such gargantuan incompetence? How do the bosses retain the confidence of their staff, clients and stockholders? RBS was forced into a rescue £12bn rights issue in spite of saying it did not need one. The arrogance of certain of our top bankers is a disgrace to capitalism, while many of the board members of the Big Five appear to have been asleep at the wheel in the past couple of years.”

Yet only a few weeks ago, one of the senior local managers of the bank was telling everyone that the “success” of the rights issue meant that they now had plenty of money to lend. Quite unbelievable.

Going up

From the June edition of Wired,

“What high-speed means of transportation emits less atmospheric carbon than trains, lanes, and automobiles?

The humble counterweight elevator put into service in 1857, which has made vertical density possible from Dubai to Taipei.”

Mind the gap

An interesting article by the FT’s Economics Editor, Chris Giles, this morning in which he suggests that ‘the gap between action and sentiment puts the economy at a tipping point’.

Take surveys of households and companies at face value and the economy appears to be in free fall. Most measures of business confidence are sharply down on a year ago and the Gfk/NOP poll of consumers’ confidence about future economic prospects has declined to its lowest level since 1982.

But what households and companies are saying and what they are doing has rarely been so different. For all the misery poured out to pollsters, hard figures so far show people behaving as if they really believe Britain’s economy problems will be short and shallow.

Companies are not yet taking really tough decisions to cut costs. Instead they are keeping their workforce intact, presumably in the belief that it is better to hang on to employees in bad times because the good times will be with us again soon.

Spending time wisely

An interesting report by Economics Editor Chris Giles in this morning’s FT, that ‘data show that confidence is down but consumer and business behavious tells another story’. He suggests that ‘the gap between action and sentiment puts the economy at a tipping point’.

We are certainly seeing this day to day: work continues, but ask anyone about what happens next and the outlook is decidedly gloomy. At a lavish corporate event last week, to which I took one of my daughters, she was most surprised not by the artwork on display but by, to her, the incongruity of unlimited champagne and the chorus of doom-sayers quaffing it.

There are various steps that we can take in our practices to see us through the slowdown, whether it be long or short. In an email circular last month, Nick Jarrett-Kerr of Kerma Partners, identified “where partners should be spending their time during a market turndown” as

  • skills building
  • steam-lining and re-engineering work
  • getting even closer to clients
  • getting involved in internal projects
  • motivating and developing their precious assets [their teams]

Most partners see fee-earning as their key task, and in most practices this is the case, but, as Jarrett-Kerr notes, ‘the silver lining in the recessional cloud may be that at last the excuses have been removed for partners avoiding to engage in valuable non chargeable work’.