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Archive for the 'Business and Marketing' Category

Teenagers Today Have a Thirst for Business Skills

The spirit of enterprise is alive and well in today’s teenagers and tomorrow’s entrepreneurs. This I can report after recently marking pile upon pile of A level business studies scripts from around the country. There is a thirst for business know-how and opportunity among young people which oversubscribes business courses from O level to degree and beyond. The image of business has changed. Gone are the days when bank managers were kept in wardrobes and accountants were lampooned by Monty Python.

Enterprises and trade are now associated with energy and change. Profit is not the expletive of a generation ago but a green light to new horizons.

This is all very encouraging, particularly when the wealth-creating burden of a relatively shrinking working population is becoming heavier. But we must do more than simply cheer as this cavalry of young businessmen and businesswomen arrives. The enthusiasm and idea-creating abilities of young people are fragile qualities and must be carefully nurtured by educators and industrialists alike.

There is no formula for business success. The answers to today’s problems are unlikely to work in tomorrow’s changed world. Our focus must therefore be on teaching and encouraging an approach to decision-making that will serve us all well in a dynamic business world.

Of course, we must guide young people through the technicalities of marketing, production, finance and the other pillars of business education but we must always encourage initiative and new bright ideas. Otherwise, we produce clones of ourselves today to wrestle with the problems of tomorrow.

Teenagers have always been interested in winners but until recently the business world was completely absent in such thoughts. Now Richard Branson ranks alongside the stars of Miami Vice and the City is a venue as exciting as Wembley.

Teenagers offer their enthusiasm and we have a duty to give it opportunity and direction. We must try to give every young entrepreneur a chance to win, at some level somewhere. This starts in the seedbed of school-industry liason with problem-solving projects and may progress to the boardrooms of the future. Experience is vital but this must be gained rather than handed on from one generation to the next.

Education in business, as elsewhere, is essentially about discovery and it is the role of educators and industrialists to provide opportunities for people to find their own answers. Of course, we must provide advice and guidance but if learning is to be lasting it comes alongside a sense of winning rather than simply following others. There is a little of the pioneer in all of us and this is gradually finding an outlet in the new GCSE coursework, A level business studies projects and the many Young Enterprise companies blossoming in schools around the country.

My own pupil’s real and specific investigators range from the marketing of a new ‘organic’ cheese, through to the ergonomics of a modern office and the siting of a new superstore. They identify the problem, provide the analysis and make the recommendations. Here pupils experience first-hand the constraints of reality and learn to take responsibility for their own decisions.

The glazed look of second best is increasingly absent in the eyes of sixth-formers discussing business as a career. Nowadays business is often the choice of able people who previously would not have looked beyond the professions.

At a time when we are facing increasing business competition from abroad we are fortunate to have a rising generation of businessmen and businesswomen with talent, imagination and enthusiasm. We must give them every opportunity to help themselves and, in turn, us all.

There is a tremendous amount of goodwill on both sizes of the school-industry equation but there is in part a danger that, as Mark Twain remarked about the weather ‘everybody talks about it, but nobody does anything about it’. Participation is the key ingredient in successful learning and this must be the way forward in business education.

Guest lectures on aspects of business ranging, in my experience, from the raising of venture capital to the marketing of British date palms in the Middle East are well received and now relatively common in schools.

But it is clear that the lasting effect of such talks is not so much their technical content but the awe and excitement generated in pupils contemplating the galaxy of business opportunities awaiting them in the future.

A growing number of local and national firms generously help to harness this energy by investing some of their hard-pressed time and resources in advising young people about business. This may take the form of technical advice to a school’s Young Enterprise company. Pupils set up the company, raise their own share capital and back their own judgement on market research, the organization of people and production, a judgment tested in that most hostile of examinations – the market-place.

Other firms and business organizations devise sophisticated computer-based simulations of markets and businesses against which sixth-formers are invited to pit their decision-making wits, maximizing both profits and learning alike. These vital developments take business education its most important lesson to young people, a profound understanding of business risk.

For too long, too many people have left school believing that businesses, particularly those that are large and established, occupy their market positions in safety, as a matter of right, immune from changing tastes and free of risk. They are not.

Of course, it is difficult to appreciate the risk factor when just starting out in a provincial office of the UK division of a multinational corporation, but risk is there and everyone’s performance matters. There is no hiding from it.

Young businessmen and businesswomen now learn this at school as they pull together and sharpen their teeth on real business problems, accessed courtesy of the increasingly productive partnership cemented between schools and industry. Business education now transcends the classroom and business risk is more than a though that evaporates on the bell at the end of the lesson.

This is still a young area of school education and some teachers and industrialists find themselves looking at each other for guidance, largely ignorant of each other’s world but knowing that they should be doing something. It is probably time for a dose of our own medicine.

We are both in the people business and we must learn from each other both home and away. The school-university-teaching path is too well trodden and delays the day when young people see a move from school of gear rather than direction.

However, attitude are changing and our work is beginning to pay off. Today’s sixth-formers want a career with an open-ended challenge. They will respond to our advice but use their own ideas.

‘And what do you want to do when you leave school, John?’

‘I’m going to be a sort of rodeo rider, sir. It’s difficult to stay on, there are lots of ups and downs and the change of pace makes your head spin. But if you stick with it and keep one jump ahead you can travel a long way and please a lot of people.’

‘Exactly what sort of rodeo do you have in mind, John?’

‘Business, sir.’

Can the BBC Go Bankrupt?

Can the BBC go bankrupt? This is one of the first questions that Marmaduke Hussey should put to his senior managers after he takes over as chairman next week.

For the past month he has been making an intensive study of the institution he will lead and knows that it is in a state of crisis. The bungled defense of the Maggie’s Militant Tendency libel case has shaken confidence in the BBC’s editorial and legal competence. Sustained Conservative assault on alleged bias has brought its cherished political independence into question. And the government’s review of broadcasting policy after the Peacock report has renewed debate about the future of the license fee and the prospect that the BBC will lose its dominant position in British broadcasting.

With all this to digest, Hussey may not yet be aware of another time bomb ticking away at Broadcasting House: a claim for pounds 57 million damages by British Aerospace for the BBC’s alleged breach of a contract for the supply of a broadcasting satellite. If the BBC loses, the financial consequences could be catastrophic.

In 1985 the BBC’s total income was pounds 732 million and costs were pounds 775 million. The resulting pounds 43 million excess of expenditure over income brought its accumulated reserves down by almost two thirds, from pounds 66 million to just over pounds 23 million.

A judgment against the BBC for the amount which British Aerospace is seeking would more than consume every penny it has in the bank, and much more besides. Given that the BBC has no power to borrow, it could finance its payment of such a sum only by imposing a drastic reduction of spending or pleading with the government to bail it out (a plea likely to fall on deaf ears).

While he is assessing how to cope with this threat to the BBC’s solvency, Hussey would do well to question how it came about. The answers will tell him plenty about the quality of the BBC’s management and its fitness to steer the corporation through an era of political, economic and technological change.

In 1983, infatuated by the new broadcasting technology, the BBC rushed to sign an interim ‘heads of agreement’ with British Aerospace for the supply of a three-channel satellite able to transmit television programs directly to dish-shaped aerials on viewers’ roofs. Although the BBC had virtually no direct expertise in satellite broadcasting, and only the vaguest notion of how it would finance and program its three new channels, British Aerospace claims that the BBC encouraged it to move ahead rapidly with the project, with the fine details of the contract to be worked out later. The idea was to launch the satellite in 1986.

Only after signing the preliminary agreement did it begin to dawn on the BBC that it had not done its sums. Frantic negotiations with the government followed. These resulted in the BBC agreeing to share the satellite project with the Independent Broadcasting Authority.

The hard-headed accountants of the ITV companies began to look at the economics of the project and decided, after much wrangling, not to participate. Among their concerns was the fact that the satellite would cost 70 per cent more than a similar one bought from the Americans.

Eventually, the BBC told British Aerospace to stop work, but not before parts of the satellite had been made and extensive development work done. British Aerospace sent the BBC a bill followed, after refusal to pay, by a writ.

The satellite case has been the least publicized of the BBC’s many woes, but is potentially the most damaging. It confronts Hussey with two challenges. The first is to use his prestige as the new chairman to seek to settle the case, with minimal financial damage to the BBC. The second is to see that nothing like this is ever allowed to happen again. To ensure this, he must see to it that the day-to-day affairs of the BBC are put in the charge of someone who brings a relevant set of skills to the task.

Alasdair Milne, the director-general, has spent his entire professional life at the BBC, rising through the ranks of journalism and production to take charge of an organization with 30,000 employees and an annual budget approaching pounds 1 billion.

It will not surprise anybody if Milne leaves within a few months to, as it will most likely be put, explore new business opportunities. Neither will it be surprising if the BBC’s programming establishment seeks to replace him with one of their own.

Hussey’s greatest contribution to the BBC will be to resist this demand and to install an outsider with a proven track record as a manager of large and complex organizations. For the BBC, which has been run by programmers and producers since the days of Sir John Reith, this will be a revolution long overdue.