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I hope all those in our interim community enjoyed their holidays over the festive period. Commiserations to those that either had to work or burnt the turkey.
I am really keen to hear your thoughts on how this year is going to pan out – from a UK economy point of view as well as from your own personal views on the interim market.
I am certainly no Mystic Meg and thankfully no Russell Grant (I imagine myself to be a better dancer) but have a couple of predictions of my own. On the UK economy: it’s going to get a bit worse but not by much more (famous last words). My sense is that there is definitely a chance of a double dip earlier in the year but businesses and individuals are better placed to deal with it. All sense of denial has gone and many are already in the brace position. Yes there is going to be more carnage on the high street and economic news will continue to be bleak but I don’t think we are in for a big surprise. It’s not going to feel like the beginning of 2009 when there was a sense of free fall – no understanding of where the bottom was.
So more of the same again? Well not quite – I think UK businesses are a little more resilient than we think. Post Olympics we are going to be in a much better place. The feel good factor of the games and the potential economic benefit of the parties and barbecues will hopefully have a big boost to consumer and business confidence. By the end of the year I really hope the sense is that the economy has turned and we can look forward to small, steady growth? Sorry – not even a mention of the Eurozone! Are my ideas too optimistic or simplistic?
And the market for interims? It will remain very competitive – but there is still a good market for excellent candidates with a clear proposition. My belief is that generalists will continue to find life hard. Clients don’t seem to want or have the luxury for a jack of all trades who can turn their skills to a number of issues. They continue to search for specialists – those who have unique and insightful experience into their particular problem. They prefer them to have that experience, or full understanding, of their sector. They understand that they have a good chance of finding specialist skills and they lack the desire to compromise.
We as a business do far more in the private than public sector and our outlook for the year is quietly confident – we even plan to do better in the public sector. Are you – in the wider interim community – also sensing slightly sunnier times?
I would like to take this opportunity to wish our clients and interims a happy and prosperous new year.
Doug Baird is the Managing Director of Interim Partners.
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January 7th, 2012 at 9:02 am
Doug and Team, Happy New Year
You are right to say there is no crystal ball, or even some theoretic statistical based trends which may give the optimist something to cling to.
Instead, here are some observations:
UK economy grew in the 20 years pre 2007 from cheap money being pumped into the system (including substantial equity draw downs from homeowners who were led to believe that their home value was on an never ending up curve)
Consumers have stopped borrowing on grand scale with at least 2 key influencers:
1. Fear of unemployment
2. Lenders have no money to lend to any level of significance
Consequence: growth and new enterprise opportunities leveraged from spending artificial capital have almost vanished
Looking forward, we in the UK have yet to see the consequences of the potential demise of the euro and contraction in China
I admire your optimism, however I see no signs that the economy will reach an new equilibrium in the next few years
January 13th, 2012 at 9:25 am
Doug
2010 was predicted to be the end of the recession but was 5% better than 2011, 2012 is predicted to be steady. 2013 is predicted to be the year of insolvencies. Large corporate seem to be sitting on cash, leaving the rest having to survive on what they have got. In this sector a small shift in working capital or dip in sales can lead to a real issue with solvency turning a short term cash requirement when there is no source of funding into a crisis. These companies need much better companies as they often don’t see it coming or have the sophistication to respond. Generalisations are meaningless as many sectors Aerospace and Auto are growing very nicely. Whilst the economy is only c10% manufacturing they are leading 25% of the economic recovery. Complacency and the effects of the Asian tigers leaves the UK looking very complacent and inward looking. I noticed a Chinese owned retailer with a shop of entirely sourced branded electronics products. Excellence will be driven by the toughest markets and the EU has much to wake up. On the Euro the good news is the Italian Mafia with 65bn are now the most solvent Italian bank – sop maybe there is hope for the Euro zone after all! In terms of interim positioning I agree there is a case for specialism, but with the caveat it is supported by a broad inventory of interests and skills
Happy New Year Tom
January 13th, 2012 at 10:01 am
Happy New Year 2012…..
I am with Doug on this one – in fact I am perhaps more optimistic! Why?
1) Like all natural cycles, the tide has to turn somewhere – the trick is spotting “low water”. I think we actually hit that in 2011. The rip tide was indeed in 2008/9 when you wondered how far it really was going to go out.
2) 2012 in the UK is going to be like all the planets lining up – with the “Sun” being the Olympics. The vast majority of people have no idea how this is going to effect the country. The sad article in yesterday’s Daily Telegraph demonstrates this:
Poll: will the London 2012 Olympics leave a worthwhile legacy?
Yes: They’ve produced unprecedented opportunities for regeneration and investment and will provide lasting benefit – 22%
No: The benefits are inadequate considering the incredible expense and disruptions the Games have cause – 78%.
The 78% (probably mostly “little englanders”) have missed the point completely – the pig is in the python – today IS 2012 and the world is on its way here, so stop moaning about it.
We witnessed first hand last year on a smaller scale how a major global sporting and cultural event can influence opinion and sentiment locally (Rugby World Cup 2011 in NZ). Now multiply that by 100 – and you get the picture.
Now add in the “relative” strength and confidence in the UK compared to the Eurozone (and GBP v Euro which has come back 20% since Christmas 2010).
Then garnish with some other goodies e.g. major celebrations for the Queen’s Diamond Jubilee in June and we are beginning to see the receipe for a vibrant cocktail (excuse my mixed metaphores).
3) The UK is better “connected”, more tech savvy, better at marketing and more relisient (Blitz spirit) than most of our neighbours. I know, I live most of time in France (and don’t write them off by the way).
Final thought – as professional Interim Managers/Troubleshooters/Fixers/Problem Solvers, it is our JOB to be “realistically optimistic” and fix stuff that is broken. If we can’t do that – then who the hell is going to make the difference? (and enjoy doing it – profitably).
Bring it on!
Best wishes to one and all.
Peter
January 16th, 2012 at 10:27 am
Donald/ Tom/ Peter – thanks for your views. I am still glass half full but I did write my blog before Standard and Poor downgraded a good chunk of Europe. I agree Donald – difficult to see a new equilibrium in the next few years in light of the profound impact of Government cuts. That said, markets and business rely so much on confidence. That’s why I believe that the Olympics and Diamond Jubilee could prove really important on the path to economic recovery. We will be grateful for these events when we look over the channel later this year. For sure – with Europe heading from one crisis to another – (who has money on the Greeks defaulting in March) we are still in the middle of challenging times but – has anyone been looking at the economic news from the States? Unemployment falling – 200,000 new jobs, 6 months of improving employment figures, retail sales up in Dec and service sector growth quickening. It seems that they are fighting towards recovery. Will it be a case of where America goes the rest of the world follows?
January 17th, 2012 at 11:43 am
Doug, my money is on Greece defaulting, I was speaking with one of their economists some months back and he indicated that things were very bad. The Euro its self is at risk of cracking too.
As to America, many towns are apparentky ghost towns and even some states are defaulting – they are not out of trouble yet….
And YES, Olympics and Diamond Jubilee will allow London and UK to showcase what a great place we have, with great infrastructure and a diverse working population, whilst may businesses will cease (usually due to over leaverage) new businesses will be bourne and new clusters will evolve from these seeds, so my glass is half full too
April 3rd, 2012 at 1:17 pm
I do not think Greece will fall. Although they are a country with plobleme, tourism will save them. There are so many EU countries have more serious problems than Greece. About the problems in America: From there things got worse from there will improve.