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.

Trepidation and quiet confidence

Medium-sized businesses’ ability to deploy game-changing IT will help them withstand the recession, as delegates at Information Age’s IT for the M Business conference discovered. M Institute co-hosted the conference and listened in on the discussion.

Information Age's Pete Swabey reports that the current economic crisis will hit medium businesses the hardest. He came to this view listening to the proceedings at the recent IT for the M Business conference. Swabey says, "They have neither the agility of small businesses, which can change tack at the drop of a hat, nor the economies of scale of corporations, many of whom have the cash to sit tight and weather the storm."

As M Institute has often noted, medium businesses (unlike their smaller brethren) are prepared to invest in sophisticated IT, and have a real appreciation of what IT can do to enable the business to scale efficiently. But unlike large organisations, Swabey notes that "mid-sized business don’t have the luxury of getting it wrong or experimenting: IT projects need to be 100% tied to the achievement of business goals, with an intense focus on payback and benefits."

Do we need the RDAs?

The Taxpayers' Alliance would like the regional development agencies abolished. M Institute co-founder Jyoti Banerjee studies their report - he likes their data but disagrees with their recommendation.

This month a report from the TaxPayers’ Alliance claims that the £15 billion spent on the Regional Development Agencies since their creation in 1999 has been a total waste as the RDAs have contributed absolutely nothing to the economic performance of the regions in the UK. The TPA report has three main planks of evidence: 1) The RDAs were created to improve the performance of the regions, particularly those outside London and the south-east. In 1992, London and the south-east contributed 36% of the UK economy, a figure that has grown (in the wrong direction) to 48% in 2006. 2) Employment across the country grew by 9.5% between 1995 and 2000, while it only grew by 3% between 2000 and 2005. 3) Regional inequality worsened: apart from London and the south-east, England’s regions grew faster before the RDAs were around, compared to the seven years after. To add to this lack of performance is a long account of RDA waste. For example, 39 RDA bureaucrats earn over £100,000 a year, one part-time RDA chairman had a travel expense bill of over £50,000 in a single year, and one RDA managed to spend £20,000 sending some of their team to a film festival in Dubai.

Modernising business processes

Formalising what may previously have been ad-hoc business processes is a key issue when differentiating medium-sized organisations from small ones. Yet figuring out which processes need to be formalised or modernised, and in what priority, is a difficult task for leaders of medium organisations. M Institute co-founder Jyoti Banerjee checks out the options.

Processes new and old
Companies that want to exercise a competitive edge in the market, whether by launching an e-commerce channel or being first to market with a new product, have found that they are dependent on the state of their business processes if they want to succeed. Typically, their business processes are a mix of new and old, with only brand-new well-financed companies having the luxury of fully modern processes. Good processes do not guarantee success, though bad processes will certainly guarantee failure.

Modernising business processes research paper

Formalising what may previously have been ad-hoc business processes is a key issue when differentiating medium-sized organisations from small ones. Yet figuring out which processes need to be formalised or modernised, and in what priority, is a difficult task for leaders of medium organisations.

Modernising business processes is a new white paper from M Institute that seeks to provide some fresh thinking on the business process challenges that medium organisations face so that they are better equipped to make the judgements on how to develop and grow in a way that takes advantage of their growing maturity in the exploitation of technology, innovation and new opportunities in the business landscape.

To grow or not to grow - that's an IT question

Durham Business School and Microsoft (both partners of M Institute) have collaborated on a piece of research that has an important finding: growing companies make greater use of IT to meet their key business challenges compared to companies that are declining. M Institute co-founder Jyoti Banerjee investigates.

The research, carried out among 401 businesses with up to 100 employees, does not attempt to distinguish cause from effect. But it does claim that growing companies are more likely to invest in IT in order to better manage customer data, better manage business processes, comply with regulation, and access business information when out of the office.

Although much of the report is focused on analysing the different size cohorts, its writers, Bill Snaith and Ian Stone of Durham, have done an interesting thing in maintaining a constant thread in the report which analyses the research findings by growth performance. Compared to declining companies, growing companies are more likely to:
* Use more diversified sources for IT advice
* Have more software and arguably more sophisticated systems 
* Have more appreciation that IT can (and has) delivered benefits to their business and how it might help them overcome challenges
* Talk about IT in terms of what it can do for employees, and so have a people-centric attitude to IT
* Display greater willingness to spend more on IT in future to generate competitive advantage and growth

Banks have better things to do with their money...

... than to invest in the growth plans of medium organisations. M Institute co-founder Jyoti Banerjee asks if the investment preferences shown by banks are really the results of market imperfections that need to be dealt with by policy-makers.

A few months ago, I took part in a meeting at HM Treasury organised by M Institute where a few leaders of medium organisations were invited to present their stories: how their companies became medium-sized, and the challenges they had to overcome and still have to deal with. A recurring theme for these business leaders was the way in which problems relating to access to capital impair their growth performance.

Should government be doing something about it? Clearly, the Treasury officials we spoke to did not think so as there is no evidence in their eyes of market failure. Without evidence-based market failure, how can the government generate its favoured route of evidence-based policies? (One wag recently commented that it is not evidence-based policy-making at work here – simply, policy-based evidence-making).

There is urgent need for a formal research study that can show if the evidence exists that access to finance is slowing down the growth of medium companies. This is particularly apposite in the context of a Brown government that has shifted attention from start-up enterprises to existing companies that demonstrate growth – an arena of business where medium companies are very successful. M Institute may not claim credit for engendering this shift in policy, but it certainly fits our policy recommendations. In this context, please see an earlier blog item commenting on Margaret Hodge’s enterprise policy.

Flat world vibrations: A study of Audio Partnership

When asked to identify good quality hi-fi brands, most Britishers are likely to pick mass-market Japanese brands such as Sony or Panasonic. It would be news to them that British hi-fi brands are at the top of the tree when it comes to audiophile cognoscenti around the world. One company that has taken advantage of the high standing of British brands in international markets is Audio Partnership, a medium-sized British electronics firm that is attempting to exploit globalisation’s opportunities in its march for growth. M Institute co-founder Jyoti Banerjee investigates.

It was in the 1990s that Audio Partnership realised that although British hi-fi companies were being beaten by the Far East when it came to low-cost manufacture, their reputation was built largely on good design and excellent sound quality. The company took over struggling British brands such as Cambridge Audio and Mordaunt-Short, strengthened their design prowess but outsourced all manufacturing to China – possibly the first Western audio company to do so. Plus, they built strong marketing campaigns that enabled them to sell these British-designed products across the world.

Today the company reports annual revenues in the region of £25 million with 60 employees in the UK and a number of strong relationships with Chinese electronics manufacturers. Although the audio market world-wide is in steady-state mode – it is flat screen TVs and iPods that are the growth engines in consumer electronics – Audio Partnership is still able to grow at a consistent rate because of market concentration in traditional audio markets where its combination of British design and Chinese manufacture is proving to be a winner, and because of entry into new international markets, where traditional British audio companies never trod.

UK slips against global competition

The Institute of Chartered Accountants finds that 77% of all British businesses are engaged in international activities. M Institute co-founder Jyoti Banerjee explores this finding in the light of UK plc's competitiveness in the global marketplace.

The tenth annual Enterprise study from the Institute of Chartered Accountants in England and Wales (ICAEW) has found that 77% of all UK businesses are currently engaged in globalisation to some extent. Filtering this finding to companies with less than 1,000 employees, the research indicates that as many as 44% are engaged internationally, either through having customers overseas, outsourcing, or running operations abroad. |Its higher than I would expect

Of the 1100 companies taking part in the study, 42% view globalisation positively, and 18% are concerned about it. Possibly unsurprising is the fact that it is the financial services sector that is most positive about globalisation, and manufacturing the fastest to recognise the risks, reflecting the relative strengths of these industries in the global marketplace. London continues to be a powerful global finance centre, while Britain's manufacturing is sliding away, except in certain specialist sectors such as racing cars, boats, and defence.

Empowering medium enterprise - a guide for policy-makers

A new research study, from M Institute, sets out challenges facing medium organisations and asks policy-makers to respond.

The UK government wants to see Britain as the best place in the world to start and grow a business. Yet most of its attention is on policies and measures aimed at starting businesses. A new research study from M Institute, Empowering Medium Enterprise: A guide for policy-makers, seeks to focus government attention on the challenges facing medium businesses, and the actions government can take to support their continued economic growth performance.

The research, released October 2006, was carried out by M Institute, and received support from Microsoft and the Institute of Chartered Accountants in England & Wales (ICAEW).

Key themes emerging from the research study:
• Medium business is very different from large or small business
• Medium enterprise growth is held back by certain economic factors

 

Outsourcing business processes for M enterprises

Nobody can be a specialist in everything: hence the growth in outsourcing of standard business processes. So far business process outsourcing (BPO) has been dominated by large enterprises. Now M enterprises are moving to exploit its benefits.

Growing maturity of the BPO market is enabling medium enterprises to take advantage of new opportunities. I asked Phil Fersht, a former colleague of mine, to define BPO and explain its workings for M organizations. Phil is vice president of the BPO Group at Everest Research Institute, and is well-regarded around the world for his expertise in the matter. Over to you, Phil.

Growth in the regions

Three-fourths of British medium-sized organisations are not aware of their regional development agency, or RDA. Who cares, asks M Institute co-founder Jyoti Banerjee? Well, the RDAs should, and the government should, and - surprisingly - so should mid-sized companies.

We think of the Chinese as growing unbelievably fast. India is no slouch either. Nor is Ireland. But looking at growth stats for a country as a whole is misleading. It's not countries that grow fast - it is individual regions that grow.

All over the world, we see certain regions performing so spectacularly that the entire country seems to be glowing green with growth. But other regions in the same country lag behind. China is a case in point. In China's coastal regions, such as Dalian, Beijing, Shanghai and Zhejiang, per capita income is around $5000 per year, a figure already surpassed by Guangzhou. But in the hinterland, incomes fall away to between $2000 and $1000, and lower. If we treat regions as countries, then nine of the top fifteen Asian countries are actually Chinese regions.

Growth and finance: an imperfect relationship

Growth needs money, and money looks for growth. But the two often don't find each other in the M segment of the market. Jyoti Banerjee gives credit where credit's due...

There seems to be this special bond between growth and mid-sized organisations, or M organisations as I like to call them. Talk to most leaders of M businesses and they will tell you that they expect to grow at around 20% per annum for the next three years or so. What’s so remarkable about that anyway? After all, most small and start-up businesses probably expect to grow at around 200% per annum. Why should we care about the twenty percenters?

We should, for a number of reasons.