M Institute

Does green beer work?

The amber liquid is turning green - just check out Stella and Adnams. But does green beer make sense? M Institute co-founder Jyoti Banerjee investigates the inside story and discovers how one medium enterprise company is reaping business benefits from green beer. 

Less glass. Less CO2 emissions. 

The latest advertisement hoarding from Stella Artois features the beer company’s new lightweight bottle. As the Stella ad claims, “every one of our 250 million lightweight bottles contains less glass to help reduce CO2 emissions.”   

I think it’s great when household names like Stella believe in sustainability to such an extent that they can focus an entire ad campaign on just this one message of lightweight bottles. Customers today like to know that their supplier has done what is possible to reduce the environmental impacts related to their purchases. 

So well done, Stella, for taking the trouble to lower the weight of your highest selling bottle by 7%. Apart from the citizenship aspect, this sort of environmental initiative makes great business sense too. A lighter bottle is cheaper to transport and needs less energy to make. 

When I saw the Stella ad, I was reminded of another beer company that had made some serious inroads into improving its environmental performance: Adnams. Now Adnams is a much smaller business than Stella – in fact, it’s clearly in the medium enterprise camp with revenues around £50m annually. Adnams was the first to bring out carbon-neutral beer, an altogether deeper initiative than making lighter glass bottles. Every aspect of the company’s processes had to be re-assessed to make East Green, the world’s first carbon-neutral beer. 

Here’s what I learned about the business end of sustainable beer production, listening to Andy Wood, managing director of Adnams, talk about East Green: 

A hung Parliament?

Should we care that next week we may have a hung parliament in the UK? M Institute co-founder Jyoti Banerjee investigates the options.

I see that a recent study of growing businesses by the British Chambers of Commerce finds that two-thirds are concerned or very concerned about the impact of not having a majority party, while only one in seven respondents feel that it would be a good thing.

Let’s try and place the hung parliament discussion in context. The one thing that medium enterprises crave from their politicians is a stable economy so that business decisions within the firm are not constantly upset by changes without. But it is not just a stable economy that they need. Medium businesses also need top-flight transport and communications infrastructure, access to finance, and a well-educated workforce.

So ask yourself this question? Will a hung parliament actually deliver any of these hopes? Or will it stand in the way of achieving these objectives?

It is reasonable to expect the main political parties to be different from each other, and given the opportunity to exercise their policies, the UK could look very different in a Labour regime of Big Government, compared to a Tory government of Small Government / Big Society, or even Nick Clegg’s Open Government.

But reality is likely to be very different. While each of them could lead Britain into completely different economic territory, that is going to take rather a long time. I suspect Britain’s appetite for a hung parliament may not last long enough to see change on that scale. In fact, a split leadership may not even last the course of a single parliament.

Should we care that next week we may have a hung parliament in the UK? M Institute co-founder Jyoti Banerjee investigates the options.

I see that a recent study of growing businesses by the British Chambers of Commerce finds that two-thirds are concerned or very concerned about the impact of not having a majority party, while only one in seven respondents feel that it would be a good thing.

Let’s try and place the hung parliament discussion in context. The one thing that medium enterprises crave from their politicians is a stable economy so that business decisions within the firm are not constantly upset by changes without. But it is not just a stable economy that they need. Medium businesses also need top-flight transport and communications infrastructure, access to finance, and a well-educated workforce.

So ask yourself this question? Will a hung parliament actually deliver any of these hopes? Or will it stand in the way of achieving these objectives?

It is reasonable to expect the main political parties to be different from each other, and given the opportunity to exercise their policies, the UK could look very different in a Labour regime of Big Government, compared to a Tory government of Small Government / Big Society, or even Nick Clegg’s Open Government.

But reality is likely to be very different. While each of them could lead Britain into completely different economic territory, that is going to take rather a long time. I suspect Britain’s appetite for a hung parliament may not last long enough to see change on that scale. In fact, a split leadership may not even last the course of a single parliament.

A medium enterprise guide to Windows 7

Does Windows 7 deliver the goods for business? M Institute co-founder Jyoti Banerjee checks out Microsoft's latest operating system.

In our home, October 22 has been the focus of anticipation for some weeks now. Our eldest becomes a teenager that day, and so the days have been filled with a count-down, and many lists of things to do in the build-up and during the day itself, with friends, and with family. Well, the day is finally upon us – may the celebrations begin. But little does my daughter know that this day has been awaited with much anticipation by a slightly larger group of people than her family and friends. In fact, thousands upon thousands have been waiting for this day: a hundred thousand Microsoft employees and the millions more that share the Windows ecosystem, as October 22 ushers in the official launch of Windows 7.

For many in Microsoft, Windows Vista tarnished the brand of the software giant’s most valuable product. Although Vista sought to deliver a new architecture for operating systems that addressed growing security concerns among PC users, the end-result was poor performance on many PCs and numerous security features that annoyed the very users they were supposed to protect. The word on the street was to stick with XP. Although Vista sold in the millions, the vast majority of the Windows installed base, consumer or business, never moved from Windows XP.

Will anything change with Windows 7?

The answer is yes, and here are some reasons why.

Online security for M enterprises

Do medium enterprises need to worry about online security in the same way as large companies do? M Institute invited Martin Mackay, vice president EMEA for Verisign, to lay out the case for security within medium organisations.

Every day, people are finding new reasons to go online to access goods and services, not least because of the convenience and choice transacting online offers. Unfortunately, this growing dependence on online business hasn’t gone unnoticed by opportunists.

Identity theft and online fraud are on the rise. Scams such as account takeover, phishing, spyware and viruses are rife and growing more sophisticated. The most recent figures from the Anti-Phishing Working Group show that the number of unique keyloggers and crime-oriented malicious applications rose to an all-time high in July 2008, reaching 1,519.

In April 2009, Gartner reported a 40% increase on phishing attacks from the previous year, whereby e-criminals use convincing fake emails or web pages to trick consumers into handing over an array of sensitive personal information, including user names, passwords, and credit card numbers. The price can be dear, with Gartner reporting the average loss per attack to be $351. In addition to monetary costs, companies targeted in phishing attacks also suffer immeasurable brand damage.

Given the current threat landscape, an effective online security strategy is essential for any business, no matter what size. That’s not to say that security strategies come with a ‘one-size-fits-all’ tag, and medium-size businesses should look to address security issues in a way that addresses their own specific challenges and requirements.

Medium-size businesses may not have the same budgets as very large enterprises, but they do have a similar need to protect their own Intellectual Property and any personal information customers choose to entrust to them. If you are a medium-sized online retailer, for example, you need to reassure customers that when they hand over their cash online, credit card details and personal information is secured and will remain in safe hands.

Despite the fact that a mid-market company might not be as well known as a larger brand, protecting your reputation is just as critical. Medium-size businesses rely heavily on repeat customers. In order to grow, it’s essential to build up a loyal customer following which will continue to choose your products or services again and again. Mid-market companies need to earn customers' trust and confidence to be successful, particularly during tough economic times when consumers are jittery and the competition just a click away.

Action stations

So what is a medium-size business to do? Several may worry that they don’t have the cash to implement a security program. That doesn’t have to be the case – the current financial crisis has meant that projects are under extra scrutiny, but not necessarily being abandoned. The board will closely examine projects to ensure they demonstrate clear ROI and deliver immediate benefits to the business. Effective security solutions not only protect your customers and safeguard the information that your business holds, but encourage trust and loyalty. If a customer is confident that they are safe when transacting with you, they are much more likely to hand over personal information and cash.

Recent research by YouGov has shown that companies which clearly demonstrate their online security credentials are more likely to be recommended to others by brand ‘promoters’. This means that implementing security solutions can help mid-tier businesses achieve coveted ‘word of mouth’ recommendations, drive increased business and directly impact the bottom line.

The proof is in the pudding. Many mid-size companies have recently managed to reassure customers that their data is in perfectly safe hands when transacting online, and seen sales climb as a result. One way they’ve achieved this, for example, is by implementing Extended Validation (EV) SSL Certificates. These certificates provide an easy and reliable way to verify that a website is genuine and a secure environment for customers making a purchase. Also known as the ‘green address bar’, it visibly shows that the organisation owning the web site has been authenticated as the legal entity it claims to be, using one of the most rigorous industry standards. The green address bar also confirms that any information provided by the customer as part of any transaction will be encrypted on its journey to the company’s website. Direct Line Holidays is one example of a mid-market business which has invested in this kind of technology. For them, implementing EV SSL led to an 8 per cent increase in conversion to sale rates.

Top tips

Here are my five top tips on how medium-size businesses can protect themselves online and increase consumer trust:

1. Put customers and convenience first. Businesses too often enhance their security systems without first taking into account the potential impact those changes will have on the customer experience. That’s a big mistake, as hard-to-use sites or complicated security layers will cut down on the popularity of cost-efficient online services.

2. Invest in a symbol of trust to show users that your website is secure. Consumers react well to visual cues – marks such as a green address bar and padlock icon guarantee that a website is safe. Online shoppers are encouraged never buy anything without first checking that these icons are present.

3. Look beyond the password. Simple login names and passwords are no longer enough to protect businesses and their customers. Enhanced validation (EV SSL) and strong authentication technologies, including tokens which display a one-time password generated for every transaction or which send a password to your mobile phone via SMS, offer businesses a user-friendly way to make it difficult for fraudsters to seize sensitive information.

4. Know when customers are at risk. Companies should develop detailed profiles of each customer’s typical online behaviour, such as transaction amounts, time spent online, and frequency of funds transfers. Using advanced fraud detection technologies and services, they can monitor customers’ activities against those profiles and be alerted immediately when potential fraudulent behaviour occurs.

5. Stay one step ahead. Any business looking to secure its online operations must be prepared to be bold and stay one step ahead of the fraudsters. Adopting EV SSL Certificates or strong authentication help, but these should be part of a multi-layered approach to online security that everyone with a vested interest must be aware of and prepared to act upon.

Confused over the size of an SME?

The International Federation of Accountants has published a financial reporting standard applying to SME organisations. But, argues M Institute co-founder Paul Druckman, the new standard will only give rise to confusion. Paul explains why.

In July 2009 the International Federation of Accountants (IFAC) published an International Financial Reporting Standard (IFRS) designed for use by small and medium-sized entities (SMEs). SMEs are estimated to represent more than 95 per cent of all companies. The standard is a result of a five-year development process with extensive consultation of SMEs worldwide.

This has created a dilemma for countries across the world in reflecting on IFRS implementation in deciding how big is an SME? Leading to a headline in Accountancy Age magazine: Confusion over SME size could complicate international rules.

Clive Lewis, head of SME issues at the Institute of Chartered Accountants in England and Wales (ICAEW), stumbled across the curious accounting issue while in conversation with an African colleague at a function. ‘In a casual discussion we couldn’t find any company that wouldn’t fit the definition of SME in Botswana,’ he said.

Now Clive should know better than that : he should be able to provide a route to the solution, as M Institute has been in dialogue with him and the ICAEW since its formation about this definition dilemma. We at M Institute are very clear on this: it is all about the characteristics of a business, not its size.

When will they learn? When will they listen? Let's have a meaningful conversation around the definition of an SME, and our characteristics model can be a straightforward route to a solution. Come on, people: talk to us!

Copenhagen summit on climate change sees greater US engagement

A first-hand account on last week's Climate Change Summit in Copenhagen, from M Institute co-founder Paul Druckman, who is also chair of the Accounting for Sustainability Group led by the Prince of Wales.

My main recollections from the 2009 World Business Summit on Climate Change coalesce around a few key themes: engagement from the great and good; the Copenhagen Call; an immersion in USA-centric Americans;  a lost opportunity to engage with the delegates; but a great initiative that should be applauded and advocated.

The summit opened with Al Gore delivering a performance that we have come to expect, but he did hit the spot, in my view. His perspective is that business can only operate on the rules constructed by the world’s politicians, who need to reward good corporate behaviour by accounting for externalities.  A great quote from his session: “Mother Nature does not do bail outs.”

Throughout the summit the focus was on China and the USA because they have such dominant markets but also because they are the new dimension to these talks compared to Kyoto, with both governments becoming major forces for change.

The aviation session left me cold, I am afraid, mostly because of their goal to have “carbon neutral growth” – notice the word growth in that statement. They just have not got it.

For me, the key speech in the politicians' session was from the Chinese Minister who gave a stern warning to the developed world to maintain the “principle of common but differentiated responsibilities.” His main position was that current negotiations have still not reached substantial progress, because of some countries trying to change this fundamental principle and others setting new processes in train, which the Chinese are very concerned about. EU President Barosso responded later in the conference by saying that climate negotiations for COP15 are tough, but the USA is a really positive contributor this time around.

The Canadian Environmental Minister did make points not raised elsewhere about green protectionism, especially in the USA, but then blotted his copybook in my view with the unequivocal statement that “the challenge before us is all about technology." Harish Hande, of SELCLO-India, a social entrepreneur, really challenged the mindset later in the conference, with his repeated plea to the world business leaders for business to be more focussed on consumer, rather than wants. He created a dimension in the behavioural change aspects that I did not hear at all from others, much less expect in a dinner conversation around the table.

The Business action session was entertained by the contribution from Shai Agassi, once the darling of German software giant SAP and now at the sharp end of technology change with his fledgling electric car company. A great quote from Shai: "the one thing we can’t say to God is that we got the carbon pricing wrong." Shai, though, did bring some more reality to the proceedings by referring to behavioural change in stating that “this is not Google or the iPod which creates a new market. This is changing the economies and the businesses – get the incentives right.”

David Blood from Al Gore’s Generation investment vehicle couldn't understand why investors in the major capital markets continue to invest in high-carbon companies - instead, he points to low carbon businesses as the future.

I was looking forward to the communications session and was poised with my laptop keyboard to gather some words of wisdom. Let me say I was somewhat underwhelmed, only absorbing that new media is important and that perhaps people do not respond to fear but to disgust.

The closing session brought attention to the need to be quick, and on a global scale. Of the developed world, Australia has seen the effects of climate change at first hand and has it as a current imperative. For other developed countries, it is a message of potential problems rather than having to deal to current disaster - getting the right kind of attention is a challenge, as a result. The Copenhagen Call was the finale, important but unfortunately not done with style or any expertise.

Dealing with carbon regulations

While the Obama administration is moving fast to break with eight years of "climate denial" under George Bush, the UK government seems to have lost its early focus on introducing climate change regulations. Jyoti Banerjee investigates.

For a time, a year or so ago, it looked as if UK companies would be required to meet mandatory regulations on carbon emissions. But the focus seems to have been lost, under pressure from business lobby groups that are concerned about the impact such regulations will have on British companies. Instead, UK companies are urged to report their carbon emissions following recommended guidelines, and the soonest we will have a carbon regulatory framework will now be 2010, when only Britain's largest companies will have to meet the forthcoming Carbon Reduction Commitment (CRC) mandatory framework.

The Americans are still debating the merits of carbon trading schemes versus carbon taxes, with carbon trading, based on existing EU schemes, gaining ground among policy-makers. Right now, no one really knows what the Obama administration will seek to put in place but it is quite certain that whatever happens in the US will be felt over here in the UK.

While the Obama administration is moving fast to break with eight years of "climate denial" under George Bush, the UK government seems to have lost its early focus on introducing climate change regulations. Jyoti Banerjee investigates.

For a time, a year or so ago, it looked as if UK companies would be required to meet mandatory regulations on carbon emissions. But the focus seems to have been lost, under pressure from business lobby groups that are concerned about the impact such regulations will have on British companies. Instead, UK companies are urged to report their carbon emissions following recommended guidelines, and the soonest we will have a carbon regulatory framework will now be 2010, when only Britain's largest companies will have to meet the forthcoming Carbon Reduction Commitment (CRC) mandatory framework.

The Americans are still debating the merits of carbon trading schemes versus carbon taxes, with carbon trading, based on existing EU schemes, gaining ground among policy-makers. Right now, no one really knows what the Obama administration will seek to put in place but it is quite certain that whatever happens in the US will be felt over here in the UK.

IT decisions in crunchy times

Accountancy Age's Rachel Fielding recently interviewed a panel of experts on a webcast, asking what impact tightening financial reins will have on IT spending. Paul Druckman, chairman of M Institute, was part of the panel and here are some of his comments answering the question "What role can FDs take in IT investment decisions?"

The economic turmoil has tilted the balance and the finance director (FD) is becoming much more involved in IT investment than this time last year. Good FDs think strategically about IT rather than just through efficiencies and that has been one of the failings historically.

There is a different style of IT project evolving. People are looking for the cash implications to be less onerous on the business, but that doesn’t mean that they are shelving projects. The projects that are likely to fail are where the organisation doesn’t understand the change that is going to happen. People are starting to understand that projects impinge right across the business and you can’t just bring in external consultants to do that work in the business.

The banks were irresponsible with medium enterprises

M Institute co-founder Paul Druckman was wondering how medium enterprises have been impacted by bank actions over the past few months of the economic crisis. Here's what he found.

An excellent source from within the accountancy profession prompted me to check out which businesses have been put under by the banks in the last three months of 2008. 

A quick perusal of the list shows that a number of medium enterprises are among the casualties. These had been profitable, but which the banks just chopped, in some instances with less than 24 hours' notice to rearrange their facilities.  In the North of England, I am told that Yorkshire Bank and the Co-op have rescued quite a few at next to no notice.  

However things have gone quieter in the last month since the Government leant on the banks to change their behaviour. 

Does anybody have any bank actions to report? Do get in touch.

CSR needs new focus on medium enterprise

M Institute co-founder Paul Druckman is attending the European Multi-stakeholder Forum on CSR (corporate social responsibility) in Brussels from where he sends this note outlining a couple of things that CSR groups could do to help medium enterprises engage with the concept. 

I send this note while attending the European Multi-stakeholder Forum on CSR in Brussels on 10th February 2009. The Forum brings together about 250 people from key stakeholder groups, including employers and business representatives, trade unions, investors, academics, civil society organisations and public authorities. The aims of this meeting are to review progress on CSR in Europe and globally, and to discuss possibilities for future joint initiatives.

From the perspective of the medium enterprise, there was an unexpected focus on medium enterprise during the morning session. Some of the issues raised and proposed included: 

• CSR uses the term “corporate” and this can be a problem in medium enterprise where that term implies large corporates
• The link between CSR and public procurement is essential when thinking about medium enterprises
• SMEs need tools and instruments to implement CSR, this cannot be simply downgraded large corporate tools. 

UEAPME, the European employers' organisation focusing on SMEs, has a CSR focus which seems to be on diversity. Check out  http://www.csr-for-smes.eu. 

The multi--stakeholder forum concept, such as this one, is fascinating as each stakeholder brings such different perspectives, but with the tendency being to focus on society, rather than business issues. This may be unfair, but it is certainly my impression so far today.