Monthly Archives: September 2008

Lehman Bros & Co: a black monday

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It was a tough morning for many going to work in The City today; it’s Monday and it’s a black day for the Market. The fourth-largest U.S. investment bank has gone bust and all the front pages are dedicated to what could be the largest scale bankruptcy in history. Bloomberg.com explains in detail what is happening: “Lehman Brothers Holdings Inc. succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history. The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, has filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, surpasses WorldCom Inc.’s insolvency in 2002 and Drexel Burnham Lambert’s failure in 1990.”

Unfortunately the crisis is not limited to the Lehman collapse: the Bank of America has brought Merrill Lynch, and Wall Street is in crisis. Thetimesonline.co.uk says: “London woke up to discover that, overnight, two of the biggest pillars of Wall Street had either collapsed or passed into new ownership, the world’s largest insurer was forced into an emergency restructuring, and 10 banks put together an emergency fund to lend to any other ailing banks”. This bad news will probably not come as a surprise to many. But the problem is serious and involves all the Markets and a huge numbers of bankers, who can’t predict anything about their future. “One New York observer (thetimesonline.co.uk goes on to say) estimated that 40 per cent of Merrill’s workforce, or 24,000 people, could be out of a job. The situation at Lehman will inevitably be much worse”.

But, as Douglas Adams would say, Don’t Panic! “This is undoubtedly the worst banking crisis since the 1930s, but traders shouldn’t panic and start to sell shares of other leading banks. It doesn’t make sense. American, British and other global banks  are cooperating to make the transition as smooth as possible”, said Allister Heath, City A.M. editor.

Travel by flight or by train… shall we stay in London this weekend?

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Good afternoon! Here we are on Friday, hurtling towards the weekend, with a quick update from London. Some bitesized pieces of the latest news specially selected to provide you with some good topics of conversation and some useful advice. To start off, here is some travel news! Maybe the summer is over, but there are still a lot of us that are waiting for our holidays and maybe are planning some travel right now. Maybe you need to organize some business travel… What is the best thing to do? Organise by oneself, booking and checking every detail or rely on a travel agency?

Airtravel with low cost airlines has had several problems in the last few weeks: shortly after the Spanish crash of last August, a Ryanair flight from Bristol to Barcelona-Girona had to make an emergency landing after loss of cabin pressure. And on the 11th of September another Ryanair flight (from Dublin to London) had to make an emergency landing shortly after take off at Dublin airport and oxygen masks were dropped into the cabin, leaving all the passengers afraid or their lives, but safe.

But today something different has happened: thousands of British travelers were stranded, because one of the largest tour operators collapsed under pressure from high fuel prices and a sagging economy, reports Ap, and the Timesonline.co.uk explains: ‘thousands of travellers were left stranded overseas today after XL Leisure, Britain’s third largest tour operator, collapsed and BA’s chief executive predicted that another 30 airlines would go out of business before Christmas’. At the moment at least 67,000 passengers across the globe are left waiting to be brought home…

Travel by train could be a good solution: the British train services are good and on time (well…mostly. ed.). But from yesterday we were cut off from the continent. Bbc.co.uk says: ‘thousands of passengers hoping to travel through the Channel Tunnel face further disruption after a fire on a freight train. The tunnel is closed after the fire broke out about seven miles from Calais on Thursday afternoon. Firefighters say the 16-hour blaze has now been put out. And unfortunately the opinions about the re-opening of the tunnel are divided: will the tunnel open tomorrow or in two weeks?

We shall see. Maybe this weekend it’s better to stay in London: the weather won’t be so bad and the city offers a lot of ways to escape from the boredom! A suggestion! Don’t miss the Thames Festival!

Work from your home or from your office? – part 2!

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Welcome back! As the counter-argument to yesterdays post, today we have ready for you several good reasons to brave the daily commute and work in an office:

1. You are not alone: you can have a chat with a colleague working at the computer; you can stop and start your conversation throughout the day; the time runs faster chatting!

2. You are part of a team: working with other people helps you all to have new ideas and finish faster. You can have meetings and quick chats, instead of emailing or calling. This means that for a response you have
just to walk to another desk, instead of wait an email all day.

3. You can interact socially (a pleasant change from the monkish, lonely existence working from home can be!) and go to lunch with co-workers, chatting about work and life. You can push and be pushed!

4. You can leave your job in the office and go home at 5:30. Ok, so maybe sometimes it’s 5 and sometimes it’s 7: but once you’ve left the office you can draw a line under your working day and forget about it until 9:00 tomorrow.

5. You can take a drink and a walk after work, and decide then what you want to eat for dinner that night.

6. You have access to everything need in a office: fax machine, copier and scanner, and moreover you have the IT Support!

7. You have unlimited access to that most essential piece of office equipment, the coffee machine (that you don’t have to start and you won’t have to wash up after!).

8. You can get out of your pyjamas and fluffy bunny slippers and dress well. Dressing in the right way is a good way to express yourself, make yourself feel professional and motivated, as well as making you feel good.

9. You can focus on your job and not on the laundry, the food shopping, the children and the cleaning!

10. You don’t have to cook yourself lunch every single day!

Are you a freelance or do you have your personal company? Take your time to think hard about which is the best solution for you. Business Made Simple provides a practical online resource for starting a every kind of
new companies… it’s up to you.

Office work and home work: what is the best solution for you? – part 1

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The question of today is: if your career allows it, should you work in an office or from home? To help you to decide we have prepared a list of reasons to work from home:

1. Zero commute time: you can wake up at 7:55 and be ready at the computer at 8:00 a.m.

2. No time wasted: you can manage both your home life and your work life at the same time; Whilst your waiting for your project plan to be printed, why not do your laundry.

3. You can have a better lunch: you don’t have to worry about packing your lunch or spending money on that same sandwich from that same sandwich shop everyday.

4. Enjoy the peace and quite of working in your own surroundings, perhaps even listening to your own music and working however you wish.

5. Better and flexible schedule organisation: you can go grocery shopping, dentist visits or whatever you need to do.

6. No travel cost: This cost really adds up especially if you work in London (of course it’s also a bonus not to find yourself stuck beneath someone’s armpit on the tube twice a day.)

7. No time or money spent on babysitting, afterschool and camps for the children: they could stay home under the best babysitting control (yours).

8. You can work in pajamas and bunny slippers: no more homogeneous suites and ties or uncomfortable shoes!

9. No office politics or rules.

10. No boss looking over your shoulder!

What do you think? Are you convinced to move your office home yet? Well don’t make up your mind just yet – read tomorrow’s entry which explores the flip-side to this coin, so come back tomorrow.

Time management – Randy Pausch: life and death

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Managing time effectively is a key skill for improving productivity in a business environment, and for achieving success in personal life. But it is an area often overlooked where small changes to established practices may produce dramatic and far-reaching results. There are many books available which claim to teach one how to manage their time effectively, but these are often poorly written, condescending, and talk a great deal of theory, without ever going into any depth as to how you can apply the theory to real life situations.

This leads us on to the point of this blog entry. Professor Randy Pausch was a leading researcher in the field of human-computer interaction, and wrote several groundbreaking programs designed to inspire an interest in computer programming in young people, especially girls.

In September 2006 he was diagnosed with pancreatic cancer. He underwent many procedures to attempt to fight the disease, which were unsuccessful. In August 2007 he was informed that he had three to six months of “good health left.” His old University, Carnegie Mellon, had a long standing tradition of inviting an academic to give a lecture at the beginning of the semester as if it were their ‘Last Lecture’. Randy was in the unique position of being able to give the lecture for real; he was facing death as he gave it. He chose to speak about time management. The lecture is a striking example of the strength of human spirit. Randy is upbeat, positive, and humorous throughout. He also offers some sage, practical advice which is easy to apply to everyday life about how to manage your time more effectively. Randy died on July 25, 2008; a full six months later than doctors predicted. Two months earlier, speaking at the Carnegie Mellon graduation ceremony, after delivering a short speech, he carried his wife off stage to wild applause.

Randy was a unique individual, and his courage, wisdom and teaching serve as an example to us all.

Randy Pausch Lecture: Time Management

Blackout at the London Stock Exchange

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In a time when communication via the World Wide Web is paramount, we are all aware of the frustration when our internet connections fail. Often the result is having to wait to be able to check our email. Today we saw what happens in the instance of mass connection failure on a far larger scale: ‘Trading on the London Stock Exchange was halted this morning for the longest period in over eight years because of a connectivity issue’, says the Timesonline.co.uk.

Before 9am, Europe’s oldest independent exchange suspended all the connections, leaving the traders without prices and completely unable to buy or sell shares. Technicians failed to re-connect for seven hours, and they still don’t know the real cause of the problem. This was the worst incident of this kind for UK trading in more than eight years.

Last year, in November, the London Stock Exchange had to close its bidding for a similar problem, which left traders without live information for more than 40 minutes. But the largest failure is still that which shut down the entire exchange for eight hours in the April 2000. Today the problem coincided with a rally in European stocks and a surge in the trading volume following the U.S. Government’s decision to take control of Fannie Mae and Freddie Mac, underlines Bloomberg.com. About 352 million shares were traded before 9am in London today, more than double the length from the same period last week.

In a moment thousands of screens froze; all the computers connected to the British system were affected by the blackout, leaving City traders desperate and angry. The London Stock Exchange attempted to calm its customers by giving accurate details of the situation, emphasis on ‘attempted’. Traders were left infuriated without given a valid cause or timescale for the problem.

The total opportunity cost of today’s disaster has yet to be calculated. The incident has highlighted that connectivity is still a serious issue to combat in today’s online world otherwise we risk compromised freedom at home and the suspension of the FTSE 100 for most of the working day!

Google Ads and Pay Per Click: What are they and why you should use them?

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Let’s get straight to business today with GOOGLE ADS!

Have you ever noticed that some Google results on the very top of the search results page have a subtle yellow background? That’s because they are payment positions called ‘Sponsored Links’. They are one of the several online ways to promote your business, and arguably one of the best because provided your keywords have been selected carefully, you can be at the top of the list. Think about this: if you want to find something, the first thing that you do is type a couple of words into the Google search bar. Google occupies more two-thirds of the search engine market so being on the first page of a Google search makes all the difference to your success, because you can reach people when they are actively looking for your product or service.

The AdWords cost-per-click pricing is cheap and easy to control, because you only pay when people click on your ad. Unlike more traditional adverts; you can measure its results highly accurately, easily amend it and only pay when a prospect clicks on your advert, rather than being charged on page impressions. There are two main categories of Pay per click (PPC) campaigns: keyword and content match. The first category involves the display of advertisements on search engine results pages, the second one, instead, involves the display of advertisements on publisher websites, newsletters and e-mails.

Why you should open a Google AdWords account?

– You can promote your business specifically to your prospective customers.
– You can save money (it’s very cheap), in comparison to traditional advertising.
– You can manage it easily.
– As a customer of the Made Simple Group you are entitled to a FREE £30 Google advertising AdWords voucher.

Number of women in top jobs falls in UK.

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Let’s talk about America for a second… Sarah Palin, Republican Vice-Presidential candidate fired-up her audience last night when she spoke of her intention “to serve the people” and how Barak Obama lacks the necessary maturity to lead the country. And John McCain believes in her. Coupled with the high profile of a certain Mrs. Clinton, women in the States are progressing into powerful roles within society.

In the mean time we discover the opposite for this country; the number of women in top jobs is decreasing. Today the Equality and Human Rights Commission underlines that professional women who want to reach the top are encountering much difficulty. Why? Not because of a lack of talent or ambition, since many believe the presence of women at the top is the solution! Katherine Rake, Director of the Fawcett Society that campaigns for women’s rights, tries to explain: “Rather, women in every sector of the workforce face unjust hurdles throughout their careers, and those hurdles are even higher for ethnic minority women. This is a fundamental matter of fairness and justice for women. And it has consequences for the whole of society. With so few women in power, the UK is wasting a colossal amount of talent and all sectors are impoverished as a result.”

In 2008, do women have to fight for their rights as hard as they had to in the past? Can we follow the example of America? Comment below and let us know what do you think.

Our Top 10 Business Films

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10. Nine to Five (1980)

Perhaps more famous for its soundtrack than the actual film, Nine to Five should be known as “how not to treat your staff.” Jane Fonda, Dolly Parton and Lily Tomlin demonstrate what happens to the boss when the workforce loses faith. So to kick off our very own top ten list today, treat yourself to a bit of Dolly Parton…

9. The Hudsucker Proxy (1994)

The Coen brothers direct this tale of a naïve mail worker who works his way up to upper echelons of Hudsucker Industries and he soon finds out how hard it is to sell a brand new product. Although fairytale-like the film still manages to show the importance of innovation in the corporate world.

8. Ghostbusters (1984)

Cast aside thoughts of Marshmallow Men, Slimer and New York City. At its core the hugely popular 1984 comedy is about three men starting up a brand new business. From the initial business idea to advertising to finding a suitable office location, the Ghostbusters cover the lot.

7. Office Space (1999)

A cult classic and yet another glimpse at what happens when workers don’t feel the love. In a world where staff just want to hold onto their beloved stapler and remain at the same desk for a few months at a time surely keeping them happy is easy? Unfortunately not for the arrogant Mr Lumbergh.

6. Boiler Room (2000)

A college dropout (Giovanni Ribisi) becomes a broker to get on the fast track to success and starts at the bottom rung of the ladder in a suburban investment firm. However, he soon learns of illegitimate dealings by his bosses and discovers that his only way out is to sink the firm himself from within.

5. American Psycho (2000)

The excessive and superficial lifestyle of Patrick Bateman, a New York investment banking executive, takes it’s toll on his warped personality as he begins to indulge in twisted fantasies. On the face of it this movie is about that which the title suggests, but a closer look will reveal all the satirical poking at 80’s Wall Street bankers. Watch this classic scene for proof:

4. Trading Places (1983)

Oh the fickle world of business. One minute Dan Aykroyd is on top of the world living the dream as a wealthy broker and the next he’s lost it all and been replaced by a common crook. It’s tough at the top but tougher at the bottom.

3. Glengarry Glen Ross (1992)

An all-star cast delve into the murky waters of estate agents. Not the most interesting of topics you may think but the office has never seemed so chilling. Pressure reigns supreme.

2. The Godfather (1972)

Ok, the Corleone family may not be anything approaching squeaky clean but at the heart of Frances Ford Coppola’s epic is a family run business. The trilogy is rife with business deals (mostly shady) and power struggles. You certainly can’t doubt the Corleone clan’s dedication to their job.

1. Wall Street (1987)

It had to be! Gordon Gekko coined the phrase that epitomised the 80’s, “greed is good”. In an age when lunch was for wimps, Wall Street was the ultimate statement about the world’s obsession with money and business. So to finish our top ten treat yourself to one of the great movie speeches…

UK’s greatest business disasters

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At London Presence we want to lead you on your business journey by giving you the best possible insight and tips for your business ventures. That said here’s our top five monumental business cock-ups, in a rare post about what not to do:

5. Dasani – Coca Cola branded tap water

After going down a storm in the states with Americans drinking 1.3bn litres of Dasani a year, its reception in the UK sent Coca Cola’s ‘purified’ water back down the storm drains from whence it sprung; it emerged that a factory in Kent used ordinary tap water as the source. To make matters worse for the corporate giants, Thames Water admitted that the 95p bottles contained only 0.03p worth of water.

Within weeks of the $13m UK launch, Dasani was pulled from the shelves and it’s European venture cancelled. But come on Coca Cola, just because the Americans fell for it, did you really think we were going to stand around and let you sell our tap water back to us in a bottle?!

4. Boo.com – boo-hoo for the boo boom

Miraculously raising £100m from such notable investors as Goldman Sachs and JP Morgan, boo.com was once valued at £250m in the 1990s. However the lavish lifestyle that afforded the founders soon caught up with them.

Their excessive jet-setting and expensive way of life began to take it’s toll on the profit margins. The staff of 400 strong was equally spoiled with luxury offices and over-inflated salaries, typifying gross mismanagement and poor financial strategy.

After squandering £125 million, the company was sold for less than £2 million in assets.

3. Ratner’s jewellery – and thus the phrase ‘doing a Ratner’ was born

Everything was going fine: Gerald Ratner had been part of the family business for 25 years selling mid-level jewellery – he then built up a chain of stores during the 80s to the point where the company was thriving with pre-tax profits measuring £110 million. That is until 1991 when he said this:

“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, ‘How can you sell this for such a low price?’ I say, because it’s total crap.”

This was followed up by his description of a pair of earrings as, “cheaper than an M&S prawn sandwich but probably wouldn’t last as long.”

Within weeks he had devalued the company by £500 million. He was paid off with £375,000 and the firm was renamed Signets to expunge all connection with Gerald Ratner altogether.

2. Equitable Life – “a decade of regulatory failure”

After almost collapsing in 2000, it emerged in Lord Pemrose’s critical report of 2004, that Equitable Life had been promising their policy holders more money than it actually had for over ten years. The report named the company as “the author of its own misfortunes.” This report was called by the Treasury department of the UK Government following the public outcry after pensions and retirement savings were cut dramatically. The controversy continued when the report’s findings spawned a £4 billion legal action in the High Court, when Equitable Life sued 15 ex-directors £2 billion for negligence. In 2005 the case was abandoned by Equitable Life.

In July this year and after a 4 year investigation, the Parliamentary and Health Service Ombudsman issued her report “Equitable Life: a decade of regulatory failure”. In it she recommended that the government should issue a formal apology and set up a compensation scheme.

The saga continues…

1. Barings Bank – broken by the definitive rogue trader

At the heart of this story of Barings Bank and its cataclysmic £827 million plunge into bankruptcy is the tragic protagonist who had it all and blew a whole lot more. The derivatives trader Nick Leeson began out of Singapore by making successful speculative trades for the bank earning them £10 million in 1992. By the end of that year the pendulum had swung into the red by £2 million – owed by the bank unbeknownst to them. By 1994 the debt was £208 million.

In early 1995 the losses were so great he fled with his then wife before he was apprehended and extradited back to Singapore where he was charged for fraud and deception and sentenced to six and a half years in Changi Prison in Singapore.

The bank collapsed before a Dutch bank bought them and assumed all Barings’ liabilities for the nominal sum of £1.