Tuesday, 3 March 2009

February's Business Bloop Award

There were a number of candidates for February’s award. First we thought it might go to Total Oil. This company “lost sight” of the contracts it awarded for work on its facility in Lincolnshire and ended up with a boatload of Italian workers unable to start work whilst a series of wildcat strikes and blockades were mounted by disgruntled British workers. Total’s oversight managed to offend its local community, spark off wildcat strikes at other companies’ facilities and drop the Prime Minister in the hole he had dug for himself with his “British jobs for British workers” grandstanding. However when you are in a business with the difficult public image and relationship problems of the oil business, all three of these are constituencies you want on your side, rather than hating your guts!

However along came British Gas, who could probably qualify for the award every month. On this occasion they lost an appeal to strike out a claim from a lady wrongly threatened over gas bills. Lisa Ferguson changed her supplier from British Gas in May 2006, but still received bills followed by letters threatening to cut off her supply, start legal proceedings and report her to credit agencies. Ms Ferguson is now suing British Gas for unlawful harassment, claiming damages for distress, anxiety and financial loss. British Gas unsuccessfully attempted to strike out the claim before it reached trial. Their argument was, wait for it, that the letters were computer generated and Ms Ferguson should not have treated the letters as seriously as if they had come from a person. Those of you who buy your energy from British Gas might wonder if, since your bills are computer generated, you no longer need to treat them seriously?

However both these howlers were eclipsed by the England and Wales Cricket Board. As we all know they had signed a £70m sponsorship with “Sir” Allen Stanford who is now being investigated for alleged fraud and other possible criminal charges. This has not just been a blow to the finances, but it is seriously detrimental to the image and reputation of English Cricket. Not many sponsors are now likely to be queuing up to replace Stanford.

Much has been written about what the ECB should have done and should do, especially its Chairman Giles Clarke. However there is one lesson for us all in this which has not been picked up so far. It is often said, but much less often practised, that what really matters in business are people and relationships. Get this right and the money will generally work just fine as well. In the case of Stanford he had already been rejected by the Indian and South African boards and now it turns out, also by the ICC, as “not someone we can do business with”.

The lesson to learn from focusing first on the people and relationships is especially relevant when the money issues are “urgent/desperate” as they were in this case. Had the ECB, and in particular Giles Clarke and the Chief Exec David Collier, done their due diligence first and thoroughly on the man, and only then on his money, it is likely that they, like the other cricket boards, would have rejected any deal with Stanford.

But they didn’t. Therefore February’s Business Bloop Award goes to Giles Clarke and the England & Wales Cricket Board, with our gratitude for the lesson we can all learn from this, even if the ECB does not look like it has learnt anything. “If you always do what you always did, you will only get what you always got.” They just did, again by re-electing the failed – “Too much change all at once, not a good thing, don’t you know”!

Business Bloop of the Month Award is brought to you by Steve Goodman & Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. Each blog has a new article each month using a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques. You can read the other three blogs at Exceeding Expectations, You're having a laugh ... Seriously? and Capitalism or ... Common Sense .

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