Is Your Business In Danger of 'Hitting The Wall'?

So everything is going well - even perhaps better than ever. What's all this Credit Crunch and Recession worry about? It can't affect me, my business is growing at 25-50% and even a slowdown means at worst I will just have low growth.

Economists reckon we have seen the worst of this economic crisis - so we can only see upturn. My business is perfectly poised to take advantage. Or is it?

Hitting The Wall

The recent Sequoia presentation at its All Hands CEO Meeting in California clearly illustrated the concern by VC companies and warned 'Spend every dollar as it was your last' while mandating all its portfolio to reforecast - and fast. There was no doubt in the VC community that everything had changed.

There is no hiding from a recession. It will affect every business in some way or another - some profoundly, some only slightly, some positive and mostly negative. The one constant is that everyone will see some effect even it means an increase in business.

I cannot urge enough - rethink your business forecasts and plan for change whether it's good or bad. If you don't, you are in grave danger of what I term 'Hitting The Wall'.

If you are an emerging business, evangelising your product or service, you are particularly vulnerable to the downturn as larger businesses will be more reticent to risk new things or change from trusted methods. There will be less money to make less risk.

'Hitting The Wall' is the term stolen from the experience marathon runners have at some point when the they hit a pain barrier that can prevent them from going further and completing the challenge. Some simply grind to a halt and don't make it - others conserve their resources and tactically survive to get through the pain and emerge renewed, better placed to complete their challenge. It's very similar for any business, particularly emerging ones and more so in times of recession.

The effect of this recession has come about at the confluence of a dramatic and unexpected economic crisis that came from left field. It means we have constrained credit, far greater conservatism to risk and an economic slowdown. It's a mixture as toxic as a sub-prime mortgage.

For a business, if you don't have a plan to survive or thrive in a recession, you will surely be a victim by some degree and possibly even 'Hit The Wall' where survival means a drastic retrenchment in the face of the recession which will mean failure for many businesses.

The Speed of Recession

The last thing you need is a business model dependent on fine margins with high lending - a minor slowdown can hammer your business and no bank will lend just for working capital now. There is no alternative but drastic and rapid cuts. Yahoo! is a typical example of this. A swift and comparatively minor downturn in revenue hit their bottom line by 64% and caused an immediate lay off 1,500 jobs. If they do not dramatically change their model, I suggest they will have a similar problem in 3 months. They literally 'Hit the Wall'.

In the UK Estate Agents like Savills suffered an 82% downturn as they are locked into high home sales - they are going to have a long hard battle to survive ahead. Even more widely placed Estate Agents are selling homes at an average of one per week and even less in London and the South East. They are in huge trouble.

Car makers are getting hammered as sales of new cars dropped 21% putting those dealers reliant on hitting quotas of sales for margins in big trouble as well as significant job losses.

Builders and associated suppliers are also 'Hitting The Wall'. The speed of it has been dramatic and less than a few months ago none of them had foreseen it or planned for it. Lehman Bros is great example of a company who paid huge bonuses last year, got a triple A credit rating as recent as August and were even approving pay offs to fired executives to the tune of several million a few days before their demise.

An example of little drop off to date is IT and related sales. Most software and hardware firms in the supply chain are predicting growth rather than slowdown. Dream on - as the recession bites all costs will get cut, it simply hasn't filtered through yet and when it does it come it will be hard and swift.

Plan Now

I have blogged on this before and there is a a presentation on my LinkedIn Profile and my website to download free of charge. My strongest advice is to take a look and see if it helps your thinking.

In short:

• Think how the recession is going to affect your business and how you are placed
• Focus hard on the value you provide to customers, enhance it and work on how you position it. Rethink your Value Proposition.
• Reforecast - don't think this will not affect you, it will somehow whether good or bad
• Don't be needing cash for survival, banks will have little sympathy
• Make tough decisions on cost now - don't spend on what does not return immediate profit
• Sell harder - profile what customers bring most profit, then call more of them
• Decrease your dependence on individual large customers, any slowdown can hurt harder
• Throw a blanket of value and service around your best customers, make sure they feel loved
• Outsource as much of your headcount as you can. Be flexible, put skills where you need them when you need them, pay for results and mitigate onerous employment costs

In a recession, customers focus on bottom line impact and real value to the business. Nice-to-haves and non-essential products or services will get cut. Fluid budgets like travel, accommodation, entertaining, marketing and training are always the first to go - make sure you are not only dependent on revenue from such products.

Get Advice

The last thing you need to do is put your head in the sand or carry on as normal. As the Credit Crunch took banks by surprise executives were still going on corporate jollies to expensive Spas as if the world would never change.

If you do not know how the recession will affect you and your business, seek good advice. Most SME businesses around today will be run by people who have never experienced a recession, there are few left who bear the scars. Managing a business in a downturn comes only from hard experience as anyone can run a business in the good times.

New Employee Background Checks - Good Practice or Breach of Privacy?

'Criminal records on sale for just £37', was the headline on Page 7 of this week's Sunday Times.

The article referred to the growing practice by employers and corporate investigators (numbering 50 between them so far)buying access to files at the Criminal Records Bureau (CRB) to do background checks on new employees. The CRB was set up 6 years ago to carry out checks on prospective employees whose work would bring them into contact with children and vulnerable adults - i.e. to find out if the prospective employee was unsuitable for that kind of work.

However, certain recruiters and employers are now getting access to CRB files to check the background of employees who are applying for jobs which do not involve access to children or vulnerable adults.

These agencies are now offering these unlawful checks to cover potential business partners and staff ranging from clerical staff to web designers.

Is Enhanced Disclosure Good Practice or Unlawful Prying?

One firm mentioned in the article offered to carry out 'Enhanced Background Checks' of administrative staff for companies claiming they were justified, caveatting this with the employee's consent should be sought although the firm's director admitted that they had not 'thoroughly checked' whether such permissions were given.

Another firm specialising in the same practice operated out of Essex but was headquartered in New Zealand claiming its Essex office was 'registered' with the CRB to have access to such records, although it confirmed it was not 'accredited' by the CRB.

The question may be arising - is this such a bad thing? After all, it is very important to follow up references given by employees rigorously and I would always recommend employers do this diligently and, if possible, cross reference the information. In this I mean, if possible, test whether a claim in a candidate's CV is spurious or not such as attending Chairman's Club or winning a specific deal etc when asking the referee. Of course, the referee may exercise the right of no reply which should not be taken as a denial but most referees will usually corroborate true facts.

So would getting access to the CRB files be further good practice or diligence? To give an example of the downside, the article claims that one such background check found that a complaint made to the information commissioner revealed a CRB check on an individual had shown the person had stolen a packet of meat worth 99p in 1984 when the person was just 16.

Where Does The Law Stand?

The article cites the landmark case of a gardener who was fired from their job after an 'Enhanced Background Check' had revealed two spent offences. He claims the checks were unlawful and unwarranted. The information commissioner has supported his claim which goes to court seeking compensation.

The CRB helpline was found to aggravate the situation as when one complainant called the person was told it would be prudent to comply to have the check done or face not being employed.

The fact is that the law is cloudy rather than clear. Such checks are specifically designed to stop sex offenders having jobs which involve children or vulnerable adults. If there is no suggestion of either being involved, then such checks are not justified.

What Ifs?

So if an employer suggested that a gardener may come into contact with children whilst carrying out their duties, would that be justified even they 'stretched the truth'? And what if a sales manager were to be in contact with unmarried young ladies, would that be justified on the grounds that the employer might want to know if the prospective manager had a history of sex offences, and in doing such checks just happened to find out the person's misdemeanour 20 years ago involving persistent apple scrumping?

What the report did reveal is that detailed financial checks can be made for as little as £20, police files for about £40, driving for £20 and identity at around £20.

Where Do You Stand On This?

As a person making decisions on behalf of a company that will cost significant money in terms of recruiting fees, compensation but also opportunity cost for making a wrong decision would it not be good, if not, even best practice to do as thorough as possible background check to minimise risk?

I remember a famous incident of a quasi-government Agency (Note how vague I am being) who employed a Finance Director with apparent impeccable credentials and background. He subsequently allegedly hired a hotel room to 'interview candidates in bikinis' for the post of Assistant. The person subsequently flew to Chicago via Concorde to New York, checked into an expensive hotel and found that his meeting had not been confirmed and so flew back again. It was later revealed the person was bogus.

Closer to home, when I worked at a computer reseller, we employed a Scottish salesman who shared a name with a rather famous Spaceship Captain. He was larger than life in many respects including the fact it was not his real name and he had no fixed abode - we only found out when police popped by asking questions about him for various other reasons. There was also the recent case of the chap who passed himself off as a Forensic Scientist for many years and participated in many trials as an expert witness only to find he was just the local lad from a pub.

The fact of the matter is that employers should be able to mitigate risk as much as possible and protect themselves from potential 'rotten employees'. However, you have to also to temper this with the fact that a minor misdemeanour involving alcohol and some clumsily broken glasses in an Indian restaurant 23 years ago really was just a one off piece of high jinks that should have been settled with a cheque for a few quid, a dustpan and brush.

Information in the 'Information Era'

We do live in an era of unprecedented amounts of stored data. Much of this can be more easily accessible than we think even if we use the most sophisticated firewalls as more and more data is actively lawfully and not sold by agencies holding the data or even lost by daft employees getting their laptops or memory sticks stolen or even archive agencies flogging their old PCs on eBay. Our information is freely surrendered to all and sundry and can be accessed far too easily. And the embarrassing misdemeanours of the past can be more easily brought to light.

But is it fair for your employer to know you might have had a telly repossessed 15 years ago when times were hard or that you served a driving ban 10 years ago even though you don't have a company car in the job? Or is it sound information to have at hand when deciding on candidates to know one was arrested outside the House of Commons in a gay Rights march and the other was not?

I would be really be interested to hear your views.

Top Tips For Job Seekers

Following on from the last blog article, it is worth highlighting the tips I gave. Please also note Calx Europe has eBooks and courses designed to help you create your own strategy for your career move, how to 'Ace The Interview', 'Sex up your CV' (no not by Alistair Campbell) and create your 'Personal Value Proposition' and 'Personal Elevator Pitch' to differentiate yourself above all other candidates.

Please call +44 (0)207 193 2356 or email info@calxeurope.com for more details.

20 Top Tips

1)Make your CV look professional - well laid out, everything spelt correctly, chronologically correct and your best achievements highlighted

2) Make sure you can corroborate all you put in your CV - do not 'ham it up' but 'sex it up'

3) Have references ready and briefed

4) Be punctual for interviews

5) Dress 'business ready' as if you want the job - first impressions and appearance count

6) Do your research - make sure you know about the employer's business and read news about them

7) Have your personal 'Value Proposition' rehearsed - make sure you are clear about what you can do for the Company

8) Make impact - have your personal 'Value Statement or Elevator Pitch' ready and stated early

9) Be confident and clear - don't mince your words, say them with confidence

10) Attitude - walk into each interview as if a) you want the job and b) you can get it

11) Reference your past - draw upon your knowledge and skills you have learnt at other jobs, courses or qualifications that directly augment your suitability for the job and help illustrate your answers to questions

12) Don't waffle or tell stories - make any anecdotes short and keep to answering the question

13) Ask questions - when you are invited to ask questions, have some well-thought ones prepared and even if they have been partly answered already, ask them again and for clarification

14) If asked questions about your age, sex, sexuality, marital status, childcare arrangements, race, religion, political views politely decline to answer the question - if pushed simply state under law you do not have to answer such questions

15) If you are at all worried that discrimination in the selection process has occurred ask for written clarification as to why you were not selected and you may also ask to have access to any and all interview notes taken. If you suspect discrimination has occurred from the answers and notes, seek professional guidance

16) If you have independent assessments such as psychometric test results or a Professional Profile, make sure you take copies to leave with the interviewer

17) Always ask 'How have I done?' and 'What are the next steps?' at the end of the interview

18) If at the end of the interview you still want the job, tell them you do and why. Say how you 'feel' about the company and the job and re-state your 'Personal Value Proposition'

19) Tell the interviewer what you thought of them - compliment them if you can

20) Follow up the interview quickly with either a call or better still an email summarising your feelings, re-stating your enthusiasm and 'Personal Value Proposition' and again ask for next steps.

The list is not exhaustive - call or write for more information.

Discrimination - Political Correctness Gone Daft or Right?

The UK Government's Laws to prevent discrimination in the workplace and specifically at interview for jobs are causing a stir but according to Which? research bosses are still asking taboo questions. According to Which? research the most popular questions are 'Do you plan to start a family?', or 'What are your childcare arrangements?', and 'Are you married?'.

The fact is the law is there to ensure that employers do not use a person's race, sex, sexuality, religious or political views or if a candidate is a parent of a young family as part of their selection criteria. What employers are typically not aware of despite the abundance of literature and web information is that firms found guilty of discrimination in any of the categories face unlimited fines and compensation.

The Which? research found employers still commonly asking several discriminatory questions at interview, some phrased more innocuously as to disguise their intent. Professional bodies advise that candidates should politely refuse to answer any such questions.

When Did All This Happen?

The sweeping changes in Employment Law occurred in October 2006 and it made it illegal to discriminate against employees and potential employees on the grounds described above. Employers found the implementation of the laws both confusing and the subject of debate within the legal community itself. There seemed also a very marked shift toward en employee having the right to 'protect' himself or herself from poor performance by invoking the law in their favour under fairly tenuous circumstances.

I personally attended a lengthy tribunal in which discrimination was alleged and I can say from personal experience that the subject is exceptionally complex.

I can also say from personal experience that the UK has very often been the first port of call for North American firms setting up base in Europe - some believed that continental Labour Laws were too onerous. The shift now puts the UK into a similar league as the rest of Europe and there is no doubt that many North American firms have been more reticent to start up in Europe and the UK specifically since October 2006. European Labour Laws are very different to US ones in particular where 'Fire at Will' still pervades in employment.

Is This All a Bad Thing?

Let's be absolutely clear, discrimination is a bad thing and should be driven out of employers' thinking. Let's also be clear, discrimination is still alive and kicking in all walks of life and particularly in business. Age plays a huge part in the selection process - too many times I have heard the phrase 'He/she is too experienced for this role' or 'He/she lacks experience'. Many of my blog articles subtlety ask questions and the responses are indicative of a still biased view on what experience, qualifications and job requirements are and how they relate to ability.

At interview stage I have seen too many instances of interviewers making judgements based on CVs or shaping questions designed to find out information which negates the candidate's knowledge and skills which may be appropriate for the job. The issue also lies in recruiter screening. Many hide behind the 'Client's Tick Box' which may be biased and so they screen people out via CV or interview for the wrong reasons. Recruiters gain little credibility sending candidates they know do not conform and only cause delays in getting fees.

Talent vs Tick Box

'Tick Box' recruitment is a numbers game - fast candidate turnaround based on poorly drawn up selection criteria and high fees at stake. The faster the turnaround the better. Recruiters and HR play a strong part in this and the further the recruitment is done from the hiring executive or employer the easier for this to happen - so outsourcing generally is a poor option and outsourcing abroad is just plain negligent because the filtering process becomes driven by process only.

And, above all, recruiters are less likely to be considered viable long term if they send certain types of candidate forward. It becomes the ultimate screening point because the employer could naturally point a finger at the recruiter and legitimately say 'I never laid that down as criteria', while the recruiter could say, 'The employer said minimum 5 years experience required' or 'needs to be flexible on location or hours'.

Most Common Discrimination

Without doubt age, sex and race still lead the league table in my eyes. As a for instance, in times when there is heightened tension between Christians and Muslims (let's not forget we are directly at war with two Muslim countries and you cannot avoid the issue in the media) it is impossible to gauge the effect this has on employers, hiring managers and recruiters but I would suggest that it has a profound one. There is also no doubt that employers, when selecting new employees, are trying to find out the child care arrangements of parents and how that will affect their ability to do the job properly in their eyes. Finally, there is absolutely no doubt that employers are screening potential new candidates on age, whether too young or more likely too old. And there is no doubt that ageism is rife in the workplace, we can all cite experience of this.

What About Employers? Don't They Have Rights?

Has this all gone too far? What about an employee who exhibits unacceptable behaviour or poor performance and when questioned about it 'plays the race card'? Suddenly the person becomes 'protected species' within the workplace and the law overly protects people on some of the flimsiest of premises, making it incredibly difficult and expensive for employers to manage their business effectively.

What happens when a business hits bad times and cuts have to be made fast in order to survive? Unwieldy, protracted and almost self-defeating processes have to be invoked and suddenly survival for the rest of the employees because the cuts don;'t have the desired effect fast enough becomes a real threat.

The Quest for Talent

Personally, I see such poor techniques for recruitment in both hiring executives and recruiters that I have grave concerns that prejudices do play a huge part in the process. I think that employers do not spend enough time defining the talent they require for roles that will fundamentally affect their future profitability because they have preconceived ideas on what sort of people they want to employ in the main. They have a closed mind approach which defaults to 'Tick Box'. That suits the recruitment industry as it makes it simple to phrase adverts, search on keywords and it makes filtering at interview easy. It ensures numbers are kept high.

Meanwhile 40% of all executive recruits will fail within the first 18 months. Nobody knows fully what the figures below that point are but in the sales environment I see many firms use their 'quartile measurements' to continually isolate low performers and that usually is 20-40% of the sales staff underperforming at any time.

When you start thinking about how much those mistaken hires are costing the business in terms of lost opportunity cost and wasted money, it really does pay to emphasise skill, knowledge, leadership, innovation, creativity, and talent above things like knowing their sexual preferences, marital status, religious beliefs, political stance or date of birth. Talent rises above all those factors and is worth looking for.

Finally, Some Tips For Job Seekers

- Make your CV look professional - well laid out, everything spelt correctly, chronologically correct and your best achievements highlighted
- Make sure you can corroborate all you put in your CV - do not 'ham it up'
- Have references ready and briefed
- Be punctual for interviews
- Dress 'business ready' as if you want the job - first impressions and appearance count
- Do your research - make sure you know about the employer's business and read news about them
- Have your personal 'Value Proposition' rehearsed - make sure you are clear about what you can do for the Company
- Make impact - have your personal 'Value Statement or Elevator Pitch' ready and stated early
- Be confident and clear - don't mince your words, say them with confidence
- Attitude - walk into each interview as if a) you want the job and b) you can get it
- Reference your past - draw upon your knowledge and skills you have learnt at other jobs, courses or qualifications that directly augment your suitability for the job and help illustrate your answers to questions
- Don't waffle or tell stories - make any anecdotes short and keep to answering the question
- Ask questions - when you are invited to ask questions, have some well-thought ones prepared and even if they have been partly answered already, ask them again and for clarification
- If asked questions about your age, sex, sexuality, marital status, childcare arrangements, race, religion, political views politely decline to answer the question - if pushed simply state under law you do not have to answer such questions
- If you are at all worried that discrimination in the selection process has occurred ask for written clarification as to why you were not selected and you may also ask to have access to any and all interview notes taken. If you suspect discrimination has occurred from the answers and notes, seek professional guidance
- If you have independent assessments such as psychometric test results or a Professional Profile, make sure you take copies to leave with the interviewer
- Always ask 'How have I done?' and 'What are the next steps?' at the end of the interview
- If at the end of the interview you still want the job, tell them you do and why. Say how you 'feel' about the company and the job and re-state your 'Personal Value Proposition'
- Tell the interviewer what you thought of them - compliment them if you can
- Follow up the interview quickly with either a call or better still an email summarising your feelings, re-stating your enthusiasm and 'Personal Value Proposition' and again ask for next steps.


In the mass of candidates out there, it really is important to make sure you stand out. Calx Europe has eBooks and runs professional courses to help candidates get the jobs they want.

For more information please call 0207 193 2356 or write to info@calxeurope.com - today.