If Greece goes bust....

Boris Johnson's vote-attracting column in today's Telegraph might get a few knowing nods from the anti-coalition chapter but is this just his love of Rome clouding his vision?

Having read his book comparing the Roman Empire to the EU, I am a bit lost as to where he puts the Greeks in the same scenario being as most modern civilisation, law and sophisticated language in Europe originates from the Greeks. It now seems he has nailed his colours to the mast. Let the devils sink.

The Euro is defunct, the EU fiscal policy is to be shredded and let any country that cannot hold its own whither and die. Heath was a traitor for taking us into the EC, Brown a genius for keeping us out of the Euro. Oh Boris, where do you stand? It's dog eat dog out there, survival of the fittest and one less mouth to feed at the table means more for the rest of us, perhaps?
There is a slight problem with this noble argument. Firstly, should we let Greece fail then they take all that nice money we lent with them down the creek without a paddle. Secondly, where does a bankrupt country go? Do we all pick over the assets and choose which relic we want, how many olives can we carry away, which Greek island becomes ours and do we eat all the moussaka we can? Thirdly, where does it leave the global financial system?

To think that Greece can fall into oblivion peacefully all by itself is naive in the extreme. You play the game of high risk finance in a globalised money market and you pay the price. Now we are into the realm of picking and choosing who we want to cull. We saved our banks who participated in this craziness, now we think we can play God in the world in which we allowed them to participate. Think again.

You see, we could not afford to see Dubai go down - far too many Brits have interests over there. We couldn't let Ireland go down, they represent a large trading partner. We wouldn't let Portugal or Spain go down as we have properties, holidays and wine interests to protect. Italy is far too nice a place as we like their fast cars, low sense of morals, football and fashion. Greece? What have they ever done for us bar a few nice holiday resorts and feta cheese?

So it's a nice vote winner to pick on Greece. Easy target, no one cares if it disappeared off the map.

Or would they? It's a small fact but if Greece went down an estimated 7% of entire EU financial liquidity disappears. Drachmas have no value if they were to start again so who would trade with them? Here's a thought, when you look at the 'Law of Unintended Consequences', when Argentina defaulted on its debt back in 2002, 20% of the Italian pension system went with it meaning hundreds of thousands of Europeans lost their life savings. For the UK, we have around £14bn of lending exposed and £3.4bn of Government debt. Money we can afford to lose?

The resultant aftermath of a major default let alone bankruptcy is the cost of borrowing goes up for others. For the other members of the PIGS (Portugal, Italy, Greece and Spain) this would be disastrous as they would be the next in line to be cut off. But hovering precariously around the edges are countries like the UK. As we battle our own issues, what a lovely idea that we can be cold-hearted to those in a worse position? The way I Iook at it is that that just bumps us one place forward in the queue of countries next to go on the Credit Rating black list. And what joy that would be for us all.

On this subject, France and Greece each have exposure of $79bn to Greece and Germany a further $43bn. For the knock-on PIGS debt, Britain's exposure to PIGS Government debt is actually the largest in Europe. Of all the PIGS countries, the total debt exposure in the banking system is a mere $2.9 trillion, so no worries if there is a domino effect.

So as we sit here pontificating and gloating as the Unions prepare to make our lives hell as we suck in our breath to make our girth fit our financial belt, we are but a few steps away from a similar fate. The Euro was wishful thinking at best but it's way too late to start bleating about it. We live by the sword in financial terms, we die by it. This isn't like a bank failing, there are no insurance schemes, it is the slippery slope into financial gloom.

Beware, Boris, what you wish for.......

Unemployment Of A Different Kind

Last month we were told that unemployment reached 2.4m and many now speculate that it will peak some time in 2010 at around 3m or more. There are some who believe that these figures do not tell the whole story and that the real unemployed figure is as high as 6m.

Certainly, I know of a whole raft of people who do not register and so do not figure in these numbers. Many are former executives in sales, marketing and general management as well as senior sales and marketing people, who have been left by the wayside of mainstream employment. Many, if not most, have created their own limited companies or sole trading units to ply their trade as contractors, ‘guns for hire’ or interims – mostly working on short term engagements and projects with specific end points or goals to be achieved. In reality, this is what I do. You can dress it up in fancy language, have a few ‘smoke and mirrors’ but my ‘new’ career is being hired by companies to do specific jobs on a short term basis which are 100% results orientated.

In these recessionary times, there are good benefits for companies to get access at short notice to a pool of highly experienced general skills which are flexible, adaptable and highly geared to results on a short or long term basis. There are no onerous employment laws to encounter, no long term selection processes, no costly recruitment fees and the remuneration can be easily geared to results – you pay as you go, you can ‘try before you buy’ and you pay for what you get. Equally, you can end the arrangement as and when you please without fear of costly grievance procedures or compromise agreements. On the face of it, this is very flexible for companies to put the power where it is required, when it is required, without incrementing headcount or taking on long term liabilities or paying more in terms of benefits like pension contributions or private health.

For me, it has certainly been an exciting time these last 3-4 years. It took a while to get going and there was a gap in between contracts in the middle but I have managed to make a decent living out of it and I have had the satisfaction of working with a diverse set of companies, focusing on delivering on a variety of goals and have has given me the buzz of really achieving.

Take Theorem Inc (www.theoreminc.net), as an example. They are a dynamic digital marketing outsourcing company with an innovative model that had worked well for clients like Google and Digitus in the US. The CEO, Jay Kulkarni, wanted to launch his business in the UK and Europe and I worked with him to help set up that bridgehead and find highly talented people. They now have a London office serving Europe and are expanding off the back of new contracts wins in the UK and the Continent with some excellent, high profile new clients. Jay is very buoyant about the future and the partnership with me and this week we will be discussing potential ideas to expand the business through channels in Continental Europe. I am currently working with the UK manufacturer of Interactive Whiteboard solutions, Promethean Ltd (www.prometheanworld.com), and have helped them target and acquire new strategic partnerships in Europe which has directly contributed to their Southern European team having the largest quarter in their history and added more than €3m of new business in two partnerships alone in just around 16 weeks. That’s the sort of contract that really gets the adrenalin going. The last 5 weeks has seen a new relationship with anti-virus vendor, AVG (www.avg.com), get off to a great start also with 6 new major partnership potentials across Europe.

But it isn’t all rosy. One of the issues always is finding the next such client and I find that it means you burn the candle at both ends as once you have finished your day’s work with a current client you have to start work on prospecting for a new one. It means that my wife and I have not had a holiday for over two years – that’s par for the course. I find sleeping at night is not as easy as it is a constant worry as to where the next pound of revenue is coming from. My plight is the same for all those others who work the same way as I do. When we finish one contract and have a gap for the next, we do not register as unemployed – if the others are like me, I would be too proud for that and would rather pilfer my dwindling savings than become one of Gordon’s growing army, but in reality there are far more people who need the support of those payments than I do and I would rather people who really need it get access to the support than people in my position.

Would I change it? I am honestly not sure. In a way, the daily challenges are so variable and the things I can apply myself to so wide and interesting that I find the work far more stimulating than plain old employment. But I do miss several things. Camaraderie is one – I work mainly from home, on the road and am a worker of the digital age. There is an awful lot of international travel which can wear thin after a while because I get more crotchety about delays and not being able to be productive as every second counts in this kind of contractual work. If you are not delivering, you are of no use – and the old adage of ‘You are only as good as your last sale’ in this business simply does not translate – it is all about the here and now, and results.

My peace of mind and security says it would be great to be employed and have a straightforward package with all the trimmings and protection of the law. After all, I am now, like many of this growing band of flexible, contractual workers, closing in on 50 too fast for my own comfort. I know, no matter what the law says each day I am not employed as an employee going forward is likely to be another reason never to be employed directly again. As much as I would love that such prejudice does not exist against ‘more experienced’ individuals, it is the way of the world.

Some studies have shown that there are now two categories of ‘employed’ people – 1) those in full time employment as defined by the laws of employment and 2) contractors similar to me. The studies show that as time goes on, there will be greater difficulties and less protection for my types, while those currently full time employed will be effectively ‘there for life’. Also, if you are of a certain age and outside the full time employed zone, it less likely that you will ever get back in. Personally, I do have a sneaking feeling that talent will distill out in the end. If the recession has taught us one thing it is that you cannot rely on donkeys in your business and the focus on quality recruitment will come to the fore after successive years of commoditising one of the most important functions of any business – but is something I have bleated on about to companies for some time, even before the recession.

I have a suspicion also that as the markets bottom out and starts to show signs of recovery, a fast, experienced, adaptable and results-orientated workforce will be in greater demand, as it gives greater chance of ‘hitting the deck running’. I also think that companies will not easily forget the employment mistakes they have made in the past and start to think sensibly about the kinds of people they need and focus more stringently on higher quality recruitment processes rather than just getting volume and the lowest price. As always, the key priority will be skills shortages as the markets recover – we have heard it before so many times – with so many more people on the dole queue but not many possessing the kinds of skills companies require in the right geography.

This is where the growing pool of experienced, former executives can pay rich dividends. Over the past years, if there is one thing that this pool of readily available talent has proven time and again is that it can adapt to many different tasks and deliver by applying proven qualities and managerial experience. Direct technical or product or even market knowledge is of less importance if you have experienced the key problems companies have faced, applied you skills in a variety of situations and delivered for clients.

It’s why that, even though I am a born worrier, I know that I have been through a whole variety of situations including two major recessions, tremendous growth, started up several businesses and turned around an equal number across a wide variety of technologies, markets, geographies and disciplines, having managed teams and companies large and small and just myself. These are qualities, skills, values, disciplines and principles that many companies will be interested in the coming months. I still may not be able to take my holiday or sleep easy at night but at least I am confident that what I have will be in great demand.

I think a great many more in my situation should be equally as confident about the future.