Friday, 12 June 2015

Running in New York for the Alzheimer’s Society

I have been lucky in obtaining an entry to the New York Marathon on the 1st November in the public lottery. For the first time in years I am going to use this event to raise money for charity and I have chosen the Alzheimer’s Society. Alzheimer's Society is the leading UK care and research charity for people with Alzheimer's disease and other dementias, their families and carers.

Dementia is a collection of brain diseases, over 200 separate diseases in fact, that affect over 850,000 people in the UK today. To me that feels like Cancer did 40 years ago and I hope that if we raise money for research and support we can tackle this problem and stop it becoming such a burden, especially to the elderly and their carers.

I have set myself a target of raising £4,000. I know from the Society that just £50 can provide the chemicals and consumables to allow a PhD researcher to research the causes of dementia for a day.  £350 can pay for someone with dementia to attend a Dementia CafĂ© for an entire year, where they can meet others with dementia and gain knowledge that can help them cope better in their daily life. And £650 can pay for a brain scan in studies looking to improve diagnosis.

If you would like to learn more about dementia, there are one-hour dementia friend courses run all round the country. I went to a course in Leicester. It's fun and you'll learn a little more about how to live and care for those affected. Just put "dementia friends" into Google to find the right page about it. Or Click here.

If you do go to a course you will learn that dementia is not just a part of growing old and that it’s not just about losing your memory. You’ll also learn a little about how you can help people to have an active and happy life with the disease.

If you would like to donate having read this blog I would be delighted. It is easy to donate online through my justgiving page here.

Thank you for reading, please share if you know others might be interested.

Wednesday, 3 June 2015

Three (and a half) rules: Book review

First published in 2013 and out now in Paperback, "The three rules- how exceptional companies think" by Michael Raynor and Mumtaz Ahmed from Deloitte is well worth a read.

To contrast with quite heavy statistical analysis are several graphs that support some surprisingly simple conclusions. The authors set out to find the few rules that identify exceptional companies in the US. Rather than use the case study route or select well known exemplars, they have crunched years and years of financial data and subjected it to analysis, looking for significant, statistically significant, differences.

And the results? Well exceptional companies should follow these rules when having to make decisions on resourcing, strategy, structure:

1 Better before cheaper. So don't compete on price, compete on value.
2 Revenue before cost. Drive profitability with higher revenue, not lower cost.

Their analysis supports these rules, and in searching for further rules, they could not find any others that withstood a rigorous analysis, and hence the last rule is:

3 There are no other rules. Change anything and everything to stay aligned with the first two rules.

Now although there are only three rules, looking simple, following them isn't. In particular that phrase "change anything and everything to stay aligned", means just that. Everything is up for grabs, nothing is sacrosanct. Divisions can be bought or sold, markets conquered or exited.

Intuitively the rules mean that exceptional companies must deliver products or product/services of high value, bought for their high value, and at a higher price point. And when you have done that, driving for more revenue through price or volume should come before cost cutting to improve returns.

The final twist that the authors have identified in the last few years and is explained fully in the Deloitte Review Issue 16 asks the question of how companies reach the level of exceptional in the first place. Reviewing the data and tabulating the results they conclude that when a company is performing poorly and certainly sits in the lower half of the competitive landscape, they should cut "other costs", costs that don't impact on gross margin.

As they rise towards excellence and strive for a return on assets ratio that makes economists salivate they should turn their attention to gross margin, by creating high value propositions. So I would propose the rules can be modified to read:

If performing in the lower half of your peer group sector, cut non-direct costs. Overheads, SG&A need to be brought into line with sector norms.
Better before cheaper. So don't compete on price, compete on value.
Revenue before cost. Drive profitability with higher revenue, not lower cost.
There are no other rules. Change anything and everything to stay aligned with the first two rules.

Read and enjoy.