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Winning the right to be a cash cow

27th Oct 2011
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October 27 – The battle against the clock continues.

I’ve met the shareholders – well, actually the ex-CEO, the one of his offspring who will be in the same room and the legal representative of the other two.

East and AM joined me as we explained where we thought we really are right now. I felt it important that they see this is a team that works together although I have to say both AM and East were slightly nervous in a way I had not anticipated given their skill in handling difficult situations. That will be an issue I will need to discuss with them.

That said, we batted well, making clear what the strengths are right now we can play on and how these equip us for the problems we face, which we did not overstate but nor did we avoid. Like all business we face really tough markets, price pressure, risk of customer failure, debt risk and cost pressure from issues such as fuel pricing that is hard to add to margins, meaning we also have staff who’d like pay rises they’re not going to get.

All this was patiently played out and we also surveyed in some depth why we’re playing a cautiously optimistic line of looking for work wherever we can but without overall prejudicing margins in case we keep work for the long term – as we have a habit of doing.

My aim was to stress that managing in this situation is tough – tougher than it was four years back when candidly we looked on year on year growth as automatic and ours as of right. Well, it isn’t now. And it’s harder juggling all the bits as a result.

Did it work? I think so. I think we convinced them first we’ve got a strategy of cautious growth whilst carefully maintaining core cash flow, both supported by almost constant risk appraisal to make sure we cover as many angles as possible.

What did it all come down to? The dividend, of course: candidly the offspring simply see us as a cash cow (which I find a bit depressing) although that does give their father a chance to play the righteous party, which he lays on with a trowel.

But I think they know getting a lot for doing nothing right now is a good deal. I think we won the continuing right to be left in peace. That was my aim. I’ll take tomorrow off to celebrate. 

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FT
By FirstTab
27th Oct 2011 21:11

Own business

Reading your blog, takes me back to my employment role (not CEO). I am so glad I am not working for anyone but myself.

I think to myself why I left it so long to get out of being an employee. Regardless of the level an employee is an employee. My next step would have been a CEO. upon reflecting  I just got out.

This is not to say what you are doing is anything less. Far from it. It was  just not for me.

 

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