North South divide……..

In the 1980’s Britain was a divided nation in more ways than one.The industrial strife of the miners strike and the subsequent pit closures took a terrible toll on the Economy of the North with high unemployment and social deprivation rife in cities like Newcastle, Liverpool, Manchester & Sheffield. No one captured this division better than the comedian Harry Enfield with his cockney character “Loadsamoney” and his Newcastle counterpart “buggerallmoney”.

Whilst these caricatures caused hilarity both North and South they represented real, deep cultural divisions.

Of course the South has always had it’s own problems of density of population, high housing costs, congested roads, increased pollution and pockets of real deprivation alongside unbridled wealth.

In the 1990’s onward there has been tremendous progress in the North. Cities like Newcastle, Manchester & Leeds are unrecognisable compared to 20 years ago. Rather than squander money City councils like Salford have done a tremendous job in bringing new investment to previously deprived areas and building new, modern infrastructure which is the envy of the world.

The massive cuts announced by the coalition Government risk undoing all of that and there is a real danger that their impact will be felt far more sharply in the North where there is a much greater dependency on Government and Civil Service jobs.

This must not be allowed to happen. There must be Government incentives for New Businesses to set up in the North. In these days of electronic communications there is absolutely NO good reason for New Start ups to be located in the South East. Newcastle, Leeds, Manchester & Liverpool all have excellent airports and rail and road infrastructure. There are skilled and educated workers available at a fraction of the cost of workers in the South East.

This is not a plea for sympathy, it is a demand for equality of opportunity.

If we want to avoid another North South divide, with all that entails, we must encourage Business Investment in the North.

chris@projectsguru.co.uk

www.projectsguru.co.uk
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A true story……

Customer Focus

Customer Focus

Back in 2006 Reflex Semiconductor was a medium sized electronics business with Sales Revenue around $200 million and a respectable Net Profit of around $5 million.

The company had several hundred customers and  a diverse and mixed product range.

Unsatisfied with performace the Board decided to appoint a new President of Marketing.

This guy was called Max Cutter (I kid you not) and he summed up his philosophy in his joining speech.

” Guys, I want to re-focus on our core business. 80% of our profits come from 20% of our customers but 80% of our efforts are in supplying the lowest contributing 20%”  (He was obviously familiar with the Pareto rule)

“I want to re-focus our business (hang on Max, how long have you been here) by eliminating the lowest earning 20% and refocussing our efforts on the highest grossing 20% and watch this business GROW!!!”

When the clapping and cheering had subsided Max set about his business. Gathering together a multifunctional team of career oriented individuals from all levels of the organization (well, engineer level up anyway)

Pursuing a mantra of ‘All Change is Good’ they set about trimming the companies customer database, removing anyone who contributed less than 0.5% of Total Sales.

This carried on  for several months.

The Quaterly results were due to be published when Max announced he was leaving the Company for a better position. Despite much persuassion and the offer of a 30% increase in salary Max left anyway. He did get a nice leaving present of  a Rolex watch presented by the CEO.

The Quaterly results indicated that Sales were down to $140 million (-30%) and Profit was now a loss of $1.2 million.

Naturally, a Consultant was brought in to assess the situation and, after one weeks analysis, She reported that NO ONE CUSTOMER REPRESENTED MORE THAN 0.7% OF SALES.

The companies customer base was so diverse and its product range so varied the Good Old Pareto Rule didn’t apply in this case and Max and the team had successfully exterminated 30% of a perfectly good business.

Unfortunately Reflex Semiconductor never recovered and went bust a year later.

Max went on to get a job in investment banking and invented something called the “Credit Default Swap”….

chris@projectsguru.co.uk

www.projectsguru.co.uk

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