September 8, 2016
It has been a great summer. A lot of time spent with my family. Relaxing holidays, time to read books, time to think business and time to consider how to put the world to rights. We are living through a truly exciting time. Since June 23 (Referendum Day) we have seen History unfold almost on a daily basis which is incredible to behold. Brexit, up and down party politics across the UK, a failed military coup, a new PM and a ‘real-life’ comedy sitcom in the US to name…. need I carry on? But I thought that I would share, in my first post-summer blog, a few meandering thoughts that have been whirring round my mind (and not all Brexit related you will be pleased to hear):
Women in charge
We have a new Prime Minister who faces a baptism of fire as she faces the inevitable task of negotiating with the EU over Brexit. Early signs are that Teresa May will work to deliver the will of British voters; a second referendum appears a ‘non-starter’ and other back doors to wriggle out of what the British public has democratically voted for are shut pretty tight. This approach is honourable and, again, should give us pride in our democracy. Without being sexist, I believe that having a lady in charge, with the absolute sensitivities required at this critical time is key. The fact that much – at least until the German elections (to be held sometime between August and October 2017) – will revolve around the May Merkel axis is an encouraging thing. Male egos are not needed now, but calm, strong negotiation with more than a dollop of emotional intelligence. I have confidence that Teresa May will deliver this.
Post-Brexit sentiment
It has been incredible to see how sentiment, both in the press and with my friends, colleagues and family has swung since the Referendum. The panic of that Friday morning across the media, the workplace and amongst friends seems to have subsided – enormously. Yes it is true that the actual implications of Brexit will not be seen for some years, but the consensus view from where I currently stand is that not much will change. In spite of the legal form that the new arrangements take, the commercial substance is that the status quo will not change dramatically. With the one risk that the Europeans ‘cut nose to spite face’, it is likely that we will land with a Norway style deal and favourable trading arrangements with significant Global Partners. Concern moving mildly to excitement.
Article.50 – Negotiations
The rest of Europe, and for that matter the rest of the World, seems to be waiting with baited breath for the UK to invoke Article 50 of the Lisbon Treaty which formally begins the legal process for our withdrawal from the EU. The timing of invoking this, to me, is a critical tactic in negotiation. It is akin to the signing of the ‘Heads of Agreement’ when one is selling a company. Once invoked, the UK will find itself in a far weaker position and, accordingly, all of the key commercial, political and legal points need (and must) be ironed out in advance of this invocation. We must negotiate, and negotiate hard, over the coming 3-4 months to establish the defining post-Brexit principles. We must ensure that when Article 50 is invoked we have a very clear idea of what will be happening and what the timetable over the ensuing period is going to look like. Negotiate now. Invoke Article 50. Conclude the legalities. Great time for European law professionals one suspects.
Weak pound supports M&A
There were some concerns that Brexit was likely to impact the appetite of overseas investors to invest in UK-centric businesses. Yes, it is too early to see the true impact of Brexit, but early signs from the ‘real world’ work that we are now doing show, unequivocally, that the weakness of Sterling is actually outweighing any nervousness in this regard. Coupled with the thoughts set out above that the immediate ‘knee jerk’ panic has somewhat subsided, the overseas buyer market appears, I am delighted to say, robust. In the last year some 70% of Bluebox’s deals were concluded with overseas buyers driven significantly by our membership of M&A Worldwide, one of the world’s leading mid-market M&A Networks. Some landmark investment cases (notwithstanding the UK’s snubbing of China in their efforts to build a Nuclear power station on these shores) are providing early yet strong signs that the impact on inward investment may not be adversely impacted by BREXIT at all. Let us wait and see.
iPhone penetration
It is incredible to see how many people are living their lives with an iPhone in their hands. It is the real-time result of a scalable business model with an almost limitless addressable market that you are seeing before your very eyes. Scalability and the size of one’s addressable market are two of the main drivers of shareholder value. It is why Apple is the eighth most valuable business in the world. It was apparent to see how well Apple were doing adjacent to the cathedral in Palma, Mallorca. From the kids of 5 years old in restaurants to the lovers kissing on a fountain taking selfies to the pensioners making calls. I reckon 80% plus of the people there had one. Incredible distribution and such a successful business. iPhone 7 here we come.
Holidays
A former client of mine that shall remain nameless, but is worth several hundred million pounds lost his wife at just over 50. A few years back I was having dinner with him and my wife. He commented that his kids had not remembered one thing of their 10-bedroom ’10 million pound’ house whilst they were growing up, but remembered everything about all of the holidays they had taken – however up market or otherwise. It was so profound and such an important thing to hear. Thinking back, I still remember camping with my dad in Wales for 2 nights when I was 10 years old with a smile on my face. Family time / holiday time creates memories. Memories are what we keep and what, if they are nice ones, keep us happy. Money can only get you so far and even if it is only camping for a few nights (which I did at the beginning of the summer), the kids will take memories that will last a lifetime. Enjoy holidays. They are what we work for in many cases and what we will remember in our latter years.
Olympics bounce
How can we not remain excited about the truly extraordinary performance of team GB at the Olympics. One has to give credit, whatever you think of him, to our former PM John Major for initiating the National Lottery which, from where I am sitting, is the key initiative that is behind so much of the success our teams have enjoyed at the Olympics (and hopefully the Paralympics which started last night) this year. Money is one thing that has driven success, but the money has facilitated the training that has, ultimately, delivered results. Three key things for success: Money, Training and Commitment. Is it not the same in business and at work?
Will Hilary be Trumped?
For those away with any access whatsoever to digital content, it would have been impossible to avoid the US Presidential debates. Coverage has been extensive and I would have been smiling at the video clips that I had been watching if I hadn’t realised that this is not a ‘reality’ show, but the election of the most powerful person in the world. Not quite sure where to start, but it does make for an intriguing few months until November 8th (US election day). The staunch Republicans that I bumped into across the summer were pretty unanimous in their view that they would not be voting for Trump. The reality is that their votes are probably irrelevant because, out of 350 million voters, what happens ‘in between’ the East and West coast will decide the result. Trump’s odds have shortened in the last few days, but surely he is unelectable? Time will tell, but it is one to watch this Autumn.
Gun violence in the US
Wow. How on earth can the US, arguably the most advanced nation in the world, have gun laws that allow pretty much anyone to hold guns as they walk down the street. I was shocked over the summer to watch two documentaries that exposed the true nature of this. The BBC documentary the other night (The Lost Streets of Chicago) cited over 500 deaths from gun crime since January. It is a staggering statistic and quite breath-taking that in spite of the desire of a President Obama to take guns off the streets as a key manifesto pledge, the legislature has not allowed this to happen. If only the US could see how this looks Internationally. In these times of increased lone-wolf terrorism, surely these controls, or lack of them, are critical to mitigating some of the ongoing risks faced globally.
Big Data
I have enjoyed many poolside conversations over the summer. It may drive my wife mad, but talking business with feet in a beautiful swimming pool and relaxing in the sun is almost a favourite pastime of mine. And, of all the great people that I spoke with (and thanks so much to them), a common theme emerged. Big Data. Big Data, defined in the dictionary as ‘extremely large data sets that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interactions’ is going to be enormous. It is one of the key investment themes that both Goldman Sachs and Citibank cited as something to watch over the next decade. This is going to be an interesting place to be for many in that space and it will, inevitably, have profound changes for those working in the marketing world.
So, another summer over (well almost) and another set of ramblings on some various things that have been playing on my mind. We are back at work now, in new offices and excited about the time ahead. There are a number of great deals we are making excellent progress with and for us it is about attracting the right clients with objectives against which we are confident of delivering. Please do not hesitate to pick up the phone if you are contemplating a sale of your business at any time in the next 2 years. Our Blue Diamond planning programme has won yet more awards over the summer and we have advised on the sales of numerous businesses with very happy reference clients to boot.