The Eyjafjallajökull volcano first began to erupt in March of this year but it was not until its second, more dramatic eruption in April that we saw the unprecedented move to shut large swathes of European airspace due to the dangerous volcanic ash that it was spewing high into the atmosphere.

Globalisation reliant on air travel

This loss of air travel has certainly highlighted how reliant we are on modern air transport and the degree to which it facilitates the level of globalisation we have come to expect. We have effectively been transported back in time to an age when flying was unknown and the main forms of transport were sea and road.

The halt of UK and European air travel has left thousands of people stuck in limbo, unable to come or go, stranded where the pause button deemed fit. Many businesses and business people have also been affected, unable to get back from holidays or business trips, struggling to import or export much needed goods, and unable to attend important meetings abroad.

Global Implications

The extent of the disruption has not only been felt in the UK and Europe but also worldwide.

Yesterday, Nissan suspended production at two of its factories in Japan due to the fact that it could not get hold of crucial air pressure sensors.

Kenya’s economy faces devastating losses as it “haemorrhag[es] $1.3m a day in lost [flower] shipments to Europe” and “there is no diversionary market [as] flowers and courgettes are not something the average Kenyan buys.”

Fujitsu has temporarily suspended exports of notebook computers to Europe and has been unable to say how long its European stocks will last or how much it stands to lose if the disruption continues.

The UK premiere of Iron Man 2 has been moved to Los Angeles, and many sporting, music, movie and other entertainment events face schedule changes and disruption.

Not to mention of course, the financial impact upon European airlines and tour operaters, with the International Air Transport Association stating that losses in the European airline industry had reached £165m a day.

Business continuity

The complete lack of European flights has certainly reinforced the need for business continuity planning.

Stephen Cross, CEO of Aon Global Risk Consulting, observed that “as economies contract or competition increases, lean manufacturing becomes the name of the game… Such an approach might be highly efficient when things are running smoothly, but in the event of a major disruption event such as this, it can lead to significant delays in key materials and inputs being delivered, or in a worst case scenario to a systemic failure in your supply chain” (Continuity Central).

As the volcanic disruption has highlighted though, it is not only suppy chains and operations that can be affected.  With many business owners, directors, managers and staff stranded, a business also needs to be able to continue in the absence of its people.

Not only that, but as the plight of the airlines emphasizes, a business also needs to have contingency plans in place for times when the very service it provides cannot be delivered.  As Jan Husdal rightly pointed out, “a flight is not something you can produce and stock somewhere. It is produced and instantly consumed at the same time… Without passengers and without flights, no airline can survive.”

Yet, in A Decade of Living Dangerously – The Business Continuity Managment Report (produced only a year ago, in March 2009) The Chartered Management Institute reported that (of the businesses they surveyed and received responses from) only 52% had specific business continuity plans covering their operations and that generally managers within organisations remained complacent about continuity.

Obviously there are some eventualities that are almost impossible to predict and therefore to plan for – the black swans of this world – but that is not to say that we should not be building robustness into our businesses and systems now.

Have you been able to run your business without access to flights?

What would happen if other transport systems were unavailable to you?  Does your business have alternative transport plans in place?

Were you or any of your staff stranded by the flight disruptions?

If you have not experienced any disruption, have you designed your business in such a way that it could continue in your absence, should you ever be stranded in the future?

Can you and your staff access emails, documents and telephone services remotely if you are unable to get to the office?

Although the impact of the volcanic ash disruptions is expected to be relatively low in Europe, (RBS has predicted an impact on GDP in Europe of 0.1%), history warns that we are not necessarily out of the woods yet.  According to the Telegraph, the last time Eyjafjallajökull erupted (in the early 1820s) it blew intermittently for 14 months and on each occassion of its previous eruptions it has been followed within months or a year or so by a major eruption at Katla (a nearby volcano that is known to be more violent).  Presently there are no ground rumblings at Katla and the conditions that have led to the unprecendented closures of air space are rare, but this event has very much highlighted the vital and urgent need for business continuity planning. Without it you risk the future well being of your business.

LSN Global featured the new Trexa ‘car development platform’ – a fully electric vehicle-development platform that provides designers and manufacturers with the capability to design and develop unique designs without incurring the expense of developing new platforms. The resulting ‘app’ designs dock onto the platform and are fully interchangeable (i.e car to van to flatbed).

Key Challenge

Whilst this looks like a great idea, I think that the key challenge with this technology will be pricing. It is likely that vehicle ‘apps’ will be produced in fairly low volumes and as a result it may be difficult to achieve the economies of scale needed to bring the price down. This could well mean that the resulting vehicles on sale are actually quite expensive compared to traditional vehicles from the volume vehicle manufacturers, rendering the ‘app’ proposition uncompetitive.

It has often been the case in the past that for ‘interchangeable’ products the resulting ‘options’ are actually just as expensive as buying another, brand new, fully functional product, thus rendering interchangablity as pointless.

So the key to this product’s success?

For those manufacturers already competing effectively in the niche electric vehicle market, this platform could be very good news indeed, resulting in significant R&D savings, access to the latest upgradable technology and a faster, more flexible, product development cycle.

In terms of the ‘interchangeable’ aspect of the vehicles, the keys to success are likely to be innovative, high-quality products, produced using low volume, low cost manufacturing, thereby ensuring that the designers of vehicle ‘apps’ really do have a significant price advantage against main stream solutions.

Would I buy one?

Well, if I could design my own vehicle online that I could fully specify from modular components and that was delivered direct to my door, that would be very cool indeed. However, for me, an Audi R8 or Tessla might be slightly higher up my wishlist!

However, it is important to recognise the scalability issues of paper as a technology: paper can only be in one place at one time so it doesn’t work well across multiple sites; revision control is tricky; and it can be hard to back up – do you have duplicate copies of everything if worst came to the worst?

Even if we cannot remove paper entirely, there are things we can do to consign it to a supporting role rather than the main deal within a business.

Steps to creating a paperless office

1. Analysing your processes

The first idea to grasp is the fact that paper usually relates to a process or processes within your organisation. Understanding this will provide a solid foundation for beginning to deal with the paper as the processes themselves provide the structural foundation for creating a paperless office. By analysing the papers for clues about the activities the paper itself represents and following this paper through the system, you can outline your processes, giving you an accurate view of ‘now’.

2. Revising your processes

The next step is to revise your processes in order to maximise efficiency. This includes:

• Eliminating bottle necks and their resulting backlogs
• Removing unecessary steps within the process(es)
• Assessing crossover and interdependency of processes within the wider organisation to ensure integration
• And, overall, designing as lean a process as possible.

Value stream mapping may be a good tool to use at this stage. The people involved in each process within your organisation will also be a vital source of information and feedback as they are the people on the ground who are involved in the processes day-in, day-out.

3. Integrating paper and technology

Having created a coherent set of lean processes, the next challenge is to reduce the use of paper where possible. This can be done by assessing the processes to find out which parts of them can be automated and then developing an IT and technology solution that has your best practice processes inherently embedded into its system. In other words, the IT and technology solution reflects and is built around your processes, rather than the processes being built around the technology.

4. Sustainable continuous improvement

Once you have found a solution that works for your organisation as a whole and that maximises your efficiency and effectiveness, it is important to maintain the momentum of improvement. Ongoing assessment and revision will ensure that as your organisation grows and develops your processes continue to support the delivery of your organisation’s objectives. New technology is also continually emerging that may provide a solution to paper based systems where a solution did not previously exist. Staying abreast of these developments allows you to continually improve organisational performance and efficiency.

5. Reducing risk

Although it is not always possible to eliminate the use of paper completely, you should not be relying on paper for mission critical functions. However, neither should you be relying on technology without a business continuity plan in place. Whatever system and solution you are using, you should always make sure that fail-safes and redundancies are built into the process(es).

If you would like any advice or support in creating a paperless office for your organisation, please contact me or call me on 02476 100 193 – I would love to help!

Too flashy a car and clients might feel they are paying you too much. But, if you drive an old banger, you could well be perceived as unsuccessful and therefore hardly a safe bet to work with.

And what about your coffee? In a world where establishments serving real coffee lie on every street corner, might your coffee be undermining your brand? Increasingly, I find that people expect the same quality coffee in business meetings as they can get on the high street.

I’m not saying these criteria are fair judgments but they do seem to happen. Might be something to think about.

There are only 5 ways you can increase your profits…and not all of them are created equal!

Here are the only 5 ways you can increase your profits:

1. Raise your prices
2. Lower your direct costs
3. Fix the underperformers
4. Increase volume
5. Lower your overheads

And the winner is…

We looked at each of the five methods of increasing profit, and looked at how effective they each were. In reality, increasing your prices is by far the most effective way of increasing your profits.

Let me give you an example:

If you sell a widget at £100, with a cost of sale of £70, this creates £30 gross profit
However, if you reduce the price by just 10%, and sell it at £90, with the same cost of sale of £70, this only creates £20 gross profit.

Therefore, you would have to sell 50% MORE widgets just to make the same amount of profit you had been previously.

So, raising prices has the opposite effect. Sell at £110, less cost of sale £70 = £40 gross profit. A 33% increase in gross profit.

The counter argument is that, based on the supply and demand curve, you would expect to sell fewer widgets if you are charging a higher price, therefore making less money. The bit about selling fewer is true; the bit about less money depends on the demand curve. There is more profitable flex in this than you might imagine.

Say you sold 100 widgets at £100 making a total gross profit of £3000 (£30 profit on each widget x 100), then increased your prices to £110. You would now only need to sell 75 widgets to make the same profit (£40 profit on each widget x 75 =£3000), resulting in less work (and therefore overheads) for the same amount of money.

In addition, it is likely that your ‘worst’ customers are also the most price sensitive and will take up the majority of your time.

So, let me put it this way…

If you would like to work less, earn the same, and get rid of your least favourite customers… consider putting your prices up!

You can then spend the time you have saved looking for new, higher paying customers. When you have found these new customers and returned to selling 100 widgets, you will now be making £4000 profit instead (an extra £1000).

The only proviso is to be aware of demand sensitivity: if your business’ particular demand curve is very price sensitive (for example, if you were raise to prices by 10%, you would lose over 25% of your customers) you will then end up making less money, not more. That said, this sensitivity may be counteracted by upgrading your branding, customer service, or product/service differentiators to justify the price increase and thereby retain more existing customers. Raising your prices might mean raising your game, but then when has that ever been a bad thing?!

And finally, what about the other 4…?

The other 4 listed above are also very valid. Robert Craven suggests you work down in order, from 1 to 5. Implement each element and then move onto the next. By working in order, you ensure that you start with those that will have the most impact on your business’ profitability.

So, why not consider giving it a go!

I was reading an article today by Chris Dannen of Fast Company about a sophisticated broadband diagnosis website launched by Google and two non-profit organisations. The new website is called Measurement Lab. Apparently it still needs some work but check it out anyway – it may give you a slightly stronger hand when dealing with difficult ISPs.

However, it is also a very special day for another reason: the Apple iSlate (or iPad, Magic Slate, iTablet, or whatever it will be called) is due to be announced!

Trawling the web for the Apple iSlate reveals much rumour and speculation as to the expected design form, price, positioning, connectivity and interface. The key area of agreement seems to settle around the idea of a 10-inch touchscreen based device with 3G connectivity. iSlate.org has catalogued many of the rumours and expectations from the marketplace, as have many other technology sites such as engadget.com, pocket-lint.com, gizmodo.com and macrumors.com.

From a product design and development perspective, the speculative design mock-ups and graphics are hugely interesting. People seem to have taken three different starting points from Apple’s existing product portfolio – the Macbook Pro, the iPhone and the iMac.

• The Macbook Pro angle suggests a dual screen design with touchscreen keyboard running OS X (very unlikely).
• The iPhone angle suggests what amounts to an iPhone on steroids, with enough room to display many more app icons on screen and potentially resolution independent apps (likely).
• The iMac angle suggests a miniaturised iMac design also running a touchscreen version of OS X with either a slide out keyboard, touchscreen keyboard or an additional plugin keyboard and stand (touchscreen keyboard – very likely, additional keyboard – likely, slide out keyboard – very, very unlikely).

Whilst the speculative designs are good, the actual Apple product is likely to innovate across the whole gamut of product purpose, design, interface, application delivery and implementation.

Whatever the iSlate/iPad/Magic Slate/iTablet turns out to be, I expect it to be a product that takes elements of the above and mixes these with entirely new concepts to create a new genre/niche in the same way that the iPhone has. I for one am waiting with baited breath to find out!

Awards

A variety of awards were given out, ranging from the specialist awards to the main Midlands Excellence Award (which was won by the Hanley Economic Building Society). Congratulations to the Hanley Economic Building Society and to the other companies that were highly commended, re-accredited and also to those organisations that were recognised as Ambassadors of Excellence. The awards represent a huge amount of hard work and resulting improvement by both the companies that won and by all the other companies that entered.

Keynote Speech

James Cracknell was an interesting and amusing keynote speaker as he gave an account of his Olympic experience and his subsequent adventures with Ben Fogle (which you may have seen on television).

The thing that struck me most in James’ speech was his honesty about both his strengths and his weaknesses. He was modest of his own achievements and very self-aware with respect to both himself and his own performance.

One of the observations he made that particularly stayed with me was his admission that his main failure during the Amundsen Omega3 South Pole Race was his inability to admit to the team that he was struggling as they were nearing the end of the race. Within a short race, such as James’ Olympic successes, he observed that it was possible just to push through the pain, whereas in a race the length of the South Pole Race, this just wasn’t physically possible.

Together, the team had agreed to help each other out if they were struggling; whilst this increased the load on the other teammates, it was actually the team that won or lost, not the individual. They were only as strong as their weakest member. James explained that by trying to be strong he had actually weakened the team (and potentially lost the team first place).

I respected his honesty, and also wondered what model of ‘performance’ we use within organisations. Is organisational performance about a sprint to the finish or does organisational performance actually have more in common with competitive team endurance races? I wonder if we have much to learn from these experiences.

Overall, a great night and one that I hope to be able to attend again next year.

Whilst this email is in fact advertising speed camera alerts, if you compare the image of the skier with the image from The Telegraph showing the BMW of a driver who was facing a dangerous driving charge having blindly followed his sat nav to the edge of a cliff in West Yorkshire until it was teetering on the edge, I’m sure you will be able to spot the unfortunate similarities.

The joys of image selection! Always something to bear in mind.

The main disadvantage is that it only works for Vodafone; however, it looks likely that other operators will join in by providing their own ‘Femtocells‘ in due course.

In the meantime, alternative solutions are available if you are really ’signal-less’. Mobile signal boosters, otherwise known as cell repeaters, use an ariel (possibly external to your office/house), boost the signal and create an upgraded signal within a certain radius of the transmitter. Signal boosters are also available for vehicles, so if you travel a lot and/or regularly travel to remote locations with poor signals, it could provide you with the extra range you need.