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INSIDE ASTON

ASTON BUSINESS SCHOOL 2016

FEATURES Why diversity

pays dividends There’s a clear ethical case for promoting positive engagement with diversity, but did you know there’s now also a business case?

Common myths about financial management Dispelling these myths is an important part of developing financial literacy.

Make profits by helping society Businesses can become more successful by tapping into some of the key social changes taking place in society today.

04. Our strengths

06. How businesses can flouirsh after Brexit – Professor David Bailey

08. Truly diverse businesses can be more successful – Professor Richard J Crisp

10. Intellectual property: Are you a business or a charity? – Claire Howell

12. Inspiration can create more sales than satisfaction – Professor Heiner Evanschitzky

14. Transforming small companies with servitization – Iain McKechnie

16. Make profits by helping society – Professor Ute Stephan

18. Businesses need a ‘green cross code’ for using social media – Peter Coe

20. Dispelling four common myths about financial management – Matt Davies

22. Ten tips for successful networking – Helga Henry

24. Fail, learn, win: The Dean talks business – Professor George Feiger

W W W . A S T O N . A C . U K / A B S

CONTENTS

A S T O N B U S I N E S S S C H O O L | 0 3

of Aston graduates find a graduate level job or further study within six months of graduation which ranks us 18th in the UK Times/Sunday Times Good University Guide 2017

82.3%

Tempus-Fugit’ ‘Tempus-Fugit’ (Time Flies) and represents the theory that inside every ageing man’s mind there lives a nine-year-old boy. If you walk up to the sculpture and peer inside the head you can see a small metal figure of a child. This unique piece was created by emerging sculptor Ray Lonsdale, a self-employed steel fabricator, who produces commissions in his spare time.

OUR STRENGTHS

We firmly believe that our focus on applying knowledge for wider economic and social benefits makes Aston stand out as a great choice for students, researchers and those looking for executive education facilities and business growth support.

The fast-changing needs of a modern world mean our original purpose is more important than ever: delivering social mobility by helping students acquire the skills, confidence and knowledge they need to make or improve successful careers in business, industry and the professions.

The way we go about this is to translate world-class research into benefits for the economy and society, and for the local and global communities to which we all belong. We feel this can then be used to develop the people and ideas that will shape the businesses and communities of tomorrow.

The articles in this publication are great examples of what we’re doing. Professor Ute Stephan, who describes how companies can drive higher profits by helping society, explains how working for the greater good is never far away from Aston’s mind.

Our academics also regularly focus on the detail of the business world around us, applying detailed factual learnings to drive and measure growth. For instance, Iain McKechnie reveals how a unique mixture of academic research and industrial practice is proving that ‘servitization’ can lead to higher revenues, expansion and new jobs. And Professor Richard Crisp shows how businesses that actively promote diversity can develop competitive advantages in the marketplace.

Aston also aims to guide businesses to protect their knowledge, and Claire Howell uses her legal expertise to warn companies

that don’t protect intellectual property that they are essentially becoming ‘charities’. Another modern day theme is IT, and Dr Peter Coe explains why he’s created a ‘Green Cross Code’ for using social media, helping businesses to help their staff to avoid the legal pitfalls of going a ‘click too far’.

Marketing techniques are another speciality at Aston, and Professor Heiner Evanschitzky’s research on how customer ‘inspiration’ can create more sales than mere customer ‘satisfaction’ is a great example of how we can help businesses make more money. Aston also prides itself on being up to date with the latest events as shown by Professor David Bailey, who discusses how businesses can still flourish after Brexit. He explores the emerging road map that both government and industry need to follow for UK businesses to succeed outside of the European Union.

This is just a snapshot of what Aston can provide, but hopefully it gives you a clear idea of what drives us and our faculty, and of the extensive fields our courses and research cover.

We hope you enjoy reading about our study and research opportunities.

To find out more visit our website at: www.aston.ac.uk

If you have any questions, you can email or call us at: [email protected] +44 (0)121 204 5146.

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Welcome to Aston University. We hope this publication gives you a detailed insight into the wide range of study and research opportunities that we can offer.

The fast-changing needs of a modern world mean our original purpose is more important than ever.”

W W W . A S T O N . A C . U K / A B SI N S I D E A S T O N

The biggest challenge facing the next government is to quickly create a strong vision for how British businesses can trade with Europe once Brexit has happened.

Everyone seems to be agreed on the fact that there’s going to be an economic shock. What no-one yet knows is how big this will be, because it all depends on how closely Britain can match current European Union trading agreements.

Maintaining access to as much of the single market as possible is critical for British industry. For example, well over 50% of UK car manufacturing is exported to Europe, and so any increase in trading tariffs will inevitably hit sales. But the government must understand there’s a price to pay if it wants full access, and that means agreeing parts of what the ‘Out’ campaign was against, such as:

not having complete control over EU immigration

not having freedom from all EU regulations

still having to pay substantial amounts into the EU budget.

The challenge for the government is negotiating how far it can go on each point to minimise the economic damage to Britain. There has to be a trade-off, or else the economic shock will be bigger.

The British electorate was unaware of lots of detail when it voted in the referendum. Take Norway and Switzerland - neither countries are EU members. However to access the single market they have to accept free movement of labour, and pay about a third of the UK’s per capita financial contribution.

And there was confusion about what ‘free trade’ means. For example, people claim Turkey has ‘free trade’, but that’s not the same as a ‘single market’. It’s a loose trading relationship covering some tariff reductions, but it’s not complete. There are still non-tariff barriers, there are no anti-dumping trade measures, and no financial services like the City of London provides to Europe.

The practical effects of leaving the EU were also not explained. This will mean companies considering inward investment will be doing a lot more due diligence on what it might cost them. For example, the new VAT liabilities in Europe, and their ability to hire skilled workers from abroad.

The UK’s growth forecasts assumed a continuing level of net migration for skilled workers, and so changing this will damage the economy. This means the government has to do more than just strike a new agreement with Europe. Britain will need to create its own skills, which means planning better education, better skills training, and better re-training programmes.

“ What the ‘Out’ campaign was selling is not fully achievable. There’s no way Britain can have free trade of goods and services, and free movement of capital, while also freeing ourselves from EU regulations, not paying into the EU budget, and controlling EU immigration.”And the UK’s broader economic policies must change. Sterling fell by 10% or more after the EU referendum, and that volatility will remain as the country deals with Brexit. That means the cost of imports will rise, and so inflation could rise. But the UK should not respond by raising interest rates too quickly. It should allow the pound to depreciate.

It was stupid of the government to say a Brexit vote would mean an emergency budget. That made no sense whatsoever. Instead, the government must rethink its macro-economic policies and reinvigorate its industrial policies. It’s already looking to slow its austerity plans, relaxing restraints and finding ways to support business – like investing more in the UK’s infrastructure. Only a better funded industrial policy can make the country more competitive.

Finally, although the government needs to reach new agreements quickly, it should

HOW BUSINESSES CAN FLOURISH AFTER BREXIT In the wake of Britain’s vote to leave the European Union, Professor David Bailey, considers how the government should act to help businesses succeed.

All economic models suggest negative economic impact, but the scale depends on the nature of trading arrangements we put in place with Europe. The closer the new arrangements are to the ones we currently have, the less the economic damage.”

P R O F E S S O R D A V I D B A I L E Y

David Bailey is professor of industrial strategy at Aston Business School. His expertise includes economic restructuring and industrial policy, with a focus on UK car manufacturing.

T H R E E T H I N G S B R I T I S H B U S I N E S S E S S H O U L D F O C U S O N :

Don’t get too distracted by Brexit: remain focused on the core of where your business is going. Nothing has changed in the short term, so keep calm and carry on.

Look out for new opportunities: the initial fall in sterling’s value makes exports from the UK cheaper and more attractive to overseas customers. Therefore, exports are a new, bigger opportunity for manufactured goods and business services.

Continue to invest: The UK will be competing with the best in Europe, so it needs to become even better at what it does. That means investing in research and development for the best products, the latest skills for motivated staff, great brands and exemplary services.



not rush into invoking Article 50. It needs breathing room for negotiations, because if they fail Britain would have to fall back on World Trade Organisation rules which could mean trade tariffs of up to 10%.

Meanwhile, trading relationships won’t change in the short term, and a fall in sterling means cheaper exports. And so in the period before Brexit, British businesses should look at overseas markets and export more, especially in Europe. Make hay while the sun shines.”

Mike Hawes, chief executive of the SMMT, the UK’s car industry body, said: “As a result [of the Brexit vote], the industry faces new challenges. Uncertainty, economic instability and an undoubted impact in terms of cost, influence and ease of business. We need full and unrestricted access to the single market. 80% of what we produce is exported and the only way to succeed is through unrestricted and reciprocal access to the EU and global markets.” BBC, 29 June 2016.

I N S I D E A S T O N

Diversity can drive business creativity, problem-solving and growth, but it needs to be real diversity and not just ‘paying lip service’.

Behavioural science has shown that real diversity encourages original thinking which can help staff to develop new products, better services and improved operations.

But it’s not enough for businesses to simply have ethical policies on paper in their HR departments. For real diversity, they need to manage, champion and cultivate the right thinking and behaviour. If they don’t do this, mere principles of diversity may be ignored and possibly make things worse, as staff can easily revert to in-built prejudices.

Various studies say that diversity can produce successful outcomes, including one that revealed how living abroad ‘fosters creativity’. In that study (Maddux & Galinsky, 2009), teams containing different people were asked to negotiate a difficult business challenge.

Teams containing two people who had lived abroad were found to be more likely to reach a deal than those with one person who had lived abroad, while teams with no-one who’d lived abroad failed.

This shows how diversity can surprise people and then help them to approach things in a different, more positive frame of mind.

A more basic example is how our social mind has developed lazy categories of people: if we say ‘midwife’, most people think of a female midwife; and if we say ‘mechanic’, most people think of a male mechanic.

But what about a female mechanic? A study (Hutter & Crisp, 2005) asking people what they thought of mechanics of different sexes revealed that a female mechanic attracted the new attributes of ‘motivated’ and ‘unconventional’, which showed how thinking had become more creative.

Other diversity surprises might include people like a black chief executive, an inefficient German, a female firefighter, a male midwife, an elderly athlete, a disabled celebrity or a teetotal rock star.

Positive experiences of such diverse people can challenge minds to think differently to how they would normally consider these roles.

But businesses need to tell staff about this type of research. They need to show that there’s not just an ideological dimension to diversity, but that the benefits are scientifically established – otherwise the ‘social mind’ can lazily reject it for easier, more typical thinking.

It’s a bit like exercise: people often hate thinking about it, but doctors extol the benefits – and so many people do it. And those who have a positive experience of that exercise do it more often.

In the same way, if no one tells people about the benefits of diversity, how can they foster the same desire for self-improvement?

TRULY DIVERSE BUSINESSES CAN BE MORE SUCCESSFULBusinesses that actively promote diversity to staff can develop competitive advantages in the marketplace, according to Professor Richard Crisp.

P R O F E S S O R R I C H A R D J C R I S P

Professor Richard Crisp is Associate Dean for Research and Enterprise at Aston Business School. He specialises in the psychology of social influence and behaviour change, and his current projects include developing science-based solutions to business problems. He won the British Psychological Society Presidents’ Award for Distinguished Contributions to Psychological Knowledge in 2014.

Diversity should cross boundaries and challenge stereotypes, not reinforce social ‘fault lines’. Social and working spaces need to be designed to promote meaningful integration beyond working roles and status.”

Ticking the ‘diversity box’ simply increases the complexity of interactions, and this makes things harder for the lazy social brain that likes things to be simple, clear and structured.”



T H E ‘ T E X O I L’ N E G O T I AT I O N TA S K ( M A D D U X & G A L I N S K Y, 2 0 0 9 )

30 teams contained two people who had lived abroad – 21 of them (70%) reached a deal

20 teams containing one person who had lived abroad – 10 of them (50%) reached a deal

Four teams contained no-one who had lived abroad – none of them (0%) reached a deal.

O T H E R S C I E N T I F I C S T U D I E S S H O W I N G T H E B E N E F I T S O F D I V E R S I T Y

Scientific Nemeth (1986): Exposure to minority viewpoints produces more divergent thinking

McLeod et al (1996): Diverse groups produce higher quality ideas

Goclowska & Crisp (2012): Exposure to gender diversity promotes cognitive flexibility.


Ideas, designs and products are highly-valuable intellectual property (IP), and businesses that don’t protect these assets are effectively acting as charities.

Every business has IP assets, ranging from copyright to designs, and from trademarks to patents. Registered designs – to take just one example – contributed £3.1 billion to the UK economy last year.

“ You can have all the great inventions and innovations in the world, but without protection it’s not a business – it’s philanthropy.”All companies should have an IP audit to answer the following questions the following questions:

What IP do we own?

What IP do we need?

What IP do our competitors have?

Does our IP provide a competitive advantage?

Are we maximising value under current IP laws?

How should we react to changes in the law?

After an audit, companies need to create IP policies, regularly reviewing them to make sure they’re aligned with their business strategies, and communicating them to all staff.

This communication starts with those responsible for IP registration, litigation and licensing, and larger companies often have a chief IP officer. These staff either need to be on the executive board, or should at least have a direct line to those responsible for business strategy.

The most basic IP policies might be agreeing how to handle confidential information, with the potential for ‘need to know’ protocols, confidentiality clauses and exit interviews, and policies on how to deal with third party information.

More complex analysis may be needed to decide on an IP strategy – looking at which designs, trademarks and patents to register, and which valuable ideas, inventions and brands to protect.

“ An IP strategy must be aligned with business strategy. What are the company’s long-term goals? How can the IP strategy help? Once you have a course of action, you must allocate proper resources.”IP strategies might depend on factors like what the competition’s doing, whether you’re in an expanding or shrinking industry, and whether it’s a high value or mass market. You might just want to avoid getting into trouble with other companies’ IP.

A good IP strategy is not just about stopping others, or entering into expensive litigation for potential infringements. You might use IP as a bargaining tool, or to block competitors making similar items, or to create customer loyalty.

Some IP decisions might involve wider business strategy, such as where to manufacture, import and export levels, and distribution. You might want to enhance collaboration, encourage open innovation or joint ventures.

Or you could form strategic alliances, increasing your market share and revenues through licensing. Licensing can be a way to generate income from new market penetration, while keeping some control at the same time.

INTELLECTUAL PROPERTY: ARE YOU A BUSINESS OR A CHARITY?Businesses that don’t protect intellectual property are ‘charities’, according to Claire Howell.

C L A I R E H O W E L L

Claire Howell is a lecturer in company and IP law at Aston Business School. She’s also the founder and coordinator of the European Intellectual Property Teachers’ Network, and the convenor of the IP section of the Society of Legal Scholars.

For IP policies to work, a company must be committed at the highest level, flowing agreed policies down to all staff through a skilled team with a proper budget. This means that everyone knows what’s happening with IP at all times.”



I P F A C T F I L E

50% of European industries are ‘IP rights’ intensive

The sector is worth €4.7 trillion – almost 39% of European GDP

It employs one in three of all workers, with a wage premium of more than 40%

The sector accounts for 90% of EU’s global trade

Apple is the world’s most valuable brands, at $185 billion

Google is worth $113 billion, and IBM $112 billion

Patents on the UK’s technology licensing market are worth about £6.9 billion.


Businesses could achieve higher sales and become more profitable if they take the trouble to inspire consumers rather than merely satisfying them.

This theory is based on a live experiment in a supermarket that found customers were likely to make more purchases if products were presented with inspiration.

It followed an analysis which argued that customer satisfaction, while important, was arguably more of a hygiene factor and was not by itself sufficient for business success.

Studies have shown that customer satisfaction has little relation to increasing sales or profits, in that companies with higher satisfaction levels are not much more successful than those with lower satisfaction.

So what is ‘inspiration’? Inspiration is a mental process that involves evocation, transcendence and motivation. Put more simply, inspiration means someone is stimulated by another person, their environment, an object or an event in a way that makes them feel better, causing them to act in a positive way.

For consumers, this has two dimensions: the first is that they are ‘inspired by’ something which makes them feel good, and the second is that they are ‘inspired to’ – or motivated to act – as a result, for example by buying extra products.

Inspiration has been seen to be an important concept for many companies in recent times, with the likes of Emirates airlines, Waitrose and fashion retailer H&M all using the word in their marketing.

Various surveys and laboratory experiments have been carried out to see if this can be proved, and these have consistently found that inspiration can be driven by how products are presented. The results indicated that better content displays made people feel better, and that they were more likely to buy those products.

This led to a real world experiment with a supermarket, involving 17 organic products and 121 real shoppers who were presented with the following options:

1. Low inspirational content: organic products and promotional material with the logo of the organic product line.

2. High inspirational content: the same products with the same prices, but presented as ingredients for meals, with promotional material highlighting the recipes.

The results showed that the products with ‘high inspirational content’ were 20% more likely to be bought than those with ‘low inspirational content’.

“ Displaying products ‘in use’ or in unexpected contexts prompts the feeling of being inspirational, and this can result in customers buying more… There is strong evidence that this may work.”

There is an important caveat, in that it’s possible that too much inspiration might trigger impulse purchases, and this could result in long-term negative responses if shoppers later realised they’d bought something they didn’t need.

But the experiment has proved that there is at least an opportunity for businesses to consider that inspiration can create more sales, and therefore more profitability.

And this thesis could give businesses a new tool to measure and improve the effectiveness of inspirational marketing, and at the same time could improve customers’ experience.

INSPIRATION CAN CREATE MORE SALES THAN SATISFACTIONCustomer inspiration could help businesses make more money, while customer satisfaction is unlikely to have the same result, according to Professor Heiner Evanschitzky.

P R O F E S S O R H E I N E R E V A N S C H I T Z K Y

Professor Heiner Evanschitzky is Chair of Marketing at Aston Business School. He’s had more than 100 articles published in specialist journals, including the Journal of Marketing, Journal of Retailing, Journal of the Academy of Marketing Science, Journal of Product Innovation Management, and Journal of Service Research.

Satisfied customers don’t buy more. Their satisfaction is unrelated to sales.”

Shopping is generally satisfactory, but is hardly ever truly inspirational. You have to satisfy customers – it’s a hygiene factor. But that’s not going to differentiate you from the competition.”



The concept of servitization is becoming more established in the industrial world, basically encouraging manufacturers to add services to products, resulting in more revenue and new jobs.

And now a programme led by the Advanced Services Group (ASG) at Aston Business School has received £1.2m to recruit and work with scores of West Midlands companies to show how a strategic approach to servitization can help accelerate their growth.

The small businesses partnership is recruiting 80 technically innovative manufacturing firms with the potential for fast growth via a tailored servitization strategy. From the 80 selected firms, the ASG project expects to end up working closely with around 50 to help them transform their businesses to help reach the eventual success target of 70 jobs and £19.2m in GVA (gross value added revenues).

The project will provide a competitive strategic analysis for each company, showing where the advantages of servitization could work, and producing a road map of business changes that will be necessary to succeed.

Companies already recruited include NICKLIN Transit Packaging (cardboard boxes and crates) and MNB Precision (gas and oil engineers). NICKLIN, of Birmingham, is already using finite element analysis (FEA) to study the performances of its wooden crates and cardboard boxes, with the aim of better understanding the stresses and strains they have to endure.

The FEA will help scrutinise the transport of windscreen glass transport, not only making sure that the product gets to the customer in one piece, but also learning how this can happen using the minimum amount of raw materials.

The results should see a reduction in windscreen damage during delivery, and a reduction in the amount and cost of packaging needed. This could mean more contracts as NICKLIN improves the compatibility and price of its products, resulting in higher revenues, expansion and more jobs.

Meanwhile, MNB Precision, of Coventry, has already passed on cost savings of 10% to all its customers and reduced lead times by 78% following previous servitization work with Aston.

The Advanced Services Group primarily works with established industrial partners with established industrial partners to understand where servitization has already been adopted, how it has worked, what barriers have been experienced, and how these have been overcome.

The partners in the wider ASG research programme include tyre-maker Goodyear, diesel engine specialists Yanmar, and food processing experts Ishida. The tools and techniques they have used will be captured and adapted to help guide the transformation of small companies. The three-year project will also draw on the expertise of a separate gamification process which uses games to help senior executives understand the positive economic and strategic effects that servitization can have on their businesses.

The project will also aim to produce research papers to support those changes, gathering business intelligence from what’s happening in the small firms selected. This will benchmark best practice for future programmes, and identify any weaknesses that can improve strategic planning.

The small businesses partnership project will show how the generic concept of servitization can be used in specific cases to move business leaders’ thinking away from product mentality to product capability and compatibility. This requires a mindset change for senior management, which is what the small businesses partnership project aims to achieve.

The programme has been jointly funded by a European Regional Development Fund grant, accessed via the Greater Birmingham and Solihull LEP, together with Aston Business School partners Lloyds Bank plc and Trowers & Hamlins LLP.

TRANSFORMING SMALL COMPANIES WITH SERVITIZATIONIain McKechnie, explains how a unique mixture of academic research and industrial practice will see servitization create 70 jobs and turn £1.2m into £19.2m.

I A I N M C K E C H N I E

Iain McKechnie is the director of strategic programmes at The Advanced Services Group, at Aston Business School. Before joining Aston, he was a senior consultant carrying out technical and financial due diligence on large-scale research and development projects for Scottish Enterprise.

Servitization should take away the customer pain and help the supplier to grow. It’s about getting closer to customers, increasing the understanding of their needs and then begin to ‘co-create’ value. This leads to the return of higher revenues to the supplier’s bottom line and, potentially, job creation.”

Gamification is all about using serious games to model differing scenarios to help senior executives to understand the benefits and challenges of transforming their business model to become more services-led to get closer to the customer.”



C L A S S I C E X A M P L E O F S E R V I T I Z AT I O N

The manufacturer: Alstom, making trains

The customer: Virgin Trains, running West Coast mainline train services

How servitization works:

Virgin promotes the rail travel, collects passenger fares, puts drivers in train cabs and staff onboard to operate each journey.

Alstom not only makes and delivers the train, but also maintains the rolling stock, carries out all necessary servicing, and makes sure the right number of trains are available at the right time to meet Virgin’s timetables.

The deal: On top of the trains, Alstom provides availability and reliability on a capability basis.


Businesses can become more successful by tapping into some of the key social changes that are taking place in society today.

For example, everyone’s getting old and living longer, and so they want to be healthier and more independent. This has driven new products such as remote monitoring devices from Philips and new companies such as Oomph!, which runs activity training for care homes.

Meanwhile, people are more environmentally conscious, which has increased the interest in everything from recycling, such as Elvis & Kresse fashionable handbags made with old fire hoses, to Toyota’s hybrid cars, creating

‘harmony between man, nature and machine’.

Values are also changing and people are happier to share and cooperate. Examples including pay-as-you-go car and cycle share schemes, the Wikipedia free encyclopedia and the ‘Generation Y’, who care less about salaries and more about better work-life balances.

There is growing poverty and social exclusion, but collectively the poor have large purchasing power and pay significantly more than average households for basic products and services, such as clean water and healthcare.

And increasing globalisation means people have a need for ‘community’, resulting in a surge in social media and interest in ‘buy local’ campaigns, local time banks and community ownership projects.

These are the major trends in society that are seen as opportunities for entrepreneurs to tap into, and which have changed what was once a ‘black and white’ approach to ‘helping’ the wider world.

In the old days, businesses would concentrate operations on maximising profits by increasing traditional revenues, and any charity would be through separate fundraising, donations or grants.

But the modern approach has seen the launch of many small but high-growth ‘social enterprises’ that concentrate on being sustainable businesses. Examples include:

Triodos Bank, an ethical bank that says it “values people and planet, alongside profit”

Ethical Property, a social business managing commercial property to support charities and not-for-profit organisations

Divine chocolate, which uses Fairtrade products and is 44% owned by cocoa farmers.

Other sustainable businesses were so successful that corporate giants bought them, such as The Body Shop (now owned by L’Oréal), Ben & Jerry’s (Unilever) and Innocent drinks (90% Coca-Cola).

Meanwhile, mainstream companies have launched revenue-generating social businesses or sustainable business strategies. An example is M&S’s ‘Plan A’, which the retailer says will “help protect the planet by sourcing responsibly, reducing waste and helping communities”.

This changing approach has been described in many ways, including: ‘strategic CSR’, ‘triple bottom line’ and ‘inclusive growth’. Michael Porter, a leading authority on competitive strategy at Harvard Business School, calls it ‘shared value’.

But whatever it’s called, there is growing opinion that sustainable business pays, by:

encouraging new skills, inventions and business solutions

engaging staff and attracting new talent

enhancing reputations to customers, investors and suppliers.

There are also other benefits, such as sustainable banks seen as having more resilience, with their more stable performance over time meaning they were not hit so hard by the recent financial crisis.

MAKE PROFITS BY HELPING SOCIETYMaking positive social impacts has become a major strategy for business growth, according to Professor Ute Stephan.

P R O F E S S O R U T E S T E P H A N

Professor Ute Stephan is professor of Entrepreneurship and director of the Aston Centre for Research into International Entrepreneurship and Business. Her research focuses on the relationships between culture, institutions and entrepreneurship.


Sustainable business appeals to the fundamental human desire to help others. Therefore, playing a big role in helping to ‘make a difference’ engages people.”


F I V E C H A N G E S I N S O C I E T Y T H AT C O M P A N I E S C A N TA P I N T O :

Health and aging

‘Green’ concerns

Value changes

Poverty, inequality and social exclusion, and

Globalisation – and the need for community.

A U N I T E D N AT I O N S S U R V E Y I N 2 0 1 3 F O U N D :

63% of chief executives expect sustainability to transform their industry within five years.

76% believe sustainability within core businesses drives revenue and new opportunities.


There are a growing number of alarming cases where workers have been disciplined and even sacked for their careless emails, tweets, posts and comments.

Businesses should adopt a new ‘Green Cross Code’ for social media as a practical way to educate staff and to avoid awkward, costly court cases. This code uses the easy-to-remember acronym

‘PAUSE’, the letters standing for:

Permanent: Remember that everything you put online can be seen by anybody and everybody, and that it can stay there forever.

Audience: Before posting, tweeting, sharing, texting or uploading, think about who’s going to read it and how it could affect them and their opinion of you and others – both now and in the future.

Unsure: If you’re not sure about putting something on social media, ask for a second opinion from somebody you trust. And if you receive a text, tweet, message or picture that you’re unsure about, tell somebody you trust.

Stop (and think): What impact might your online activity may have on your privacy or reputation, or the privacy or reputation others?

End: If you’re uncomfortable with anything that’s been tweeted, posted, shared or uploaded, stop your involvement immediately and tell somebody you trust.

Such precautionary action is needed because the availability of social media and its constant connection via mobiles, tablets and laptops means it’s become an extension of us.

A high-profile example of how silly social media can backfire in the future was when Paris Brown, Britain’s first youth crime commissioner in Kent, was forced to resign a week after starting her job in 2013 after complaints about her ‘offensive’ tweets.

Brown had posted the allegedly violent, racist and anti-gay comments on Twitter when she was aged between 14 and 16 – months before her crime role.

Years later, a simple Google search of ‘Paris Brown’ still produces the Daily Mail headline ‘Foul-mouthed teenage youth crime commissioner who quit over offensive tweets is questioned by Special Branch’. This online stigma is likely to follow her for the rest of her life.

People are increasingly judged on what they might have posted online during their youth, often in completely out-of-work contexts. Another danger of this is that two-fifths of large employers admitted looking at job candidates’ online or social media profiles when recruiting.

And a recent report from the Advisory, Conciliation and Arbitration Service (Acas) found that dismissals caused by the misuse of social media were rising.

In some cases, there’s an increasing debate about issues such as privacy and the ‘right to a freedom of expression’, but case law has yet to provide clarity on how these should be treated online.

Therefore, companies need to use the new social media ‘Green Cross Code’, and there should be open lines of communications between employees and a company’s human resources department.

BUSINESSES NEED A ‘GREEN CROSS CODE’ FOR USING SOCIAL MEDIABusinesses should be helping their staff to avoid the legal pitfalls of social media, according to Peter Coe.

P E T E R C O E

Peter Coe is a course director and lecturer in law at Aston Business School. He’s also a barrister and is in residence with East Anglian Chambers. His research interests lie in media law.



R E C E N T S O C I A L M E D I A C A S E S

Crisp v Apple Retail: Apple sacked a worker for posting, from home, Facebook updates critical of the company. His unfair dismissal claim failed because of Apple guidance that said employees should not do anything which might damage the company’s image.

Teggart v Teletech UK: A call centre worker was sacked after posting, from home, derogatory Facebook comments about a female colleague. She was not his Facebook ‘friend’, but other ‘friends’ included work colleagues who posted responses that spread the message. He claimed unfair dismissal, arguing his comments were ‘private’ and that the company was infringing his human rights. His case was rejected.

Gosden v Lifeline Project Ltd: A worker sent an offensive email from his home computer to a colleague’s home computer in his own time. But he was sacked when his colleague forwarded the email to other colleagues. His unfair dismissal case failed because it was “in the range of reasonable responses” to consider this as an act of misconduct.

Everyday thoughts that might arise from frustrations, over-exuberance or a lack of experience can be seen by the world at the flick of the finger.”

All businesses should have social media policies, should make them an integral part of employment contracts, and should make it clear what online behaviour is expected both at work and privately, including what’s considered ‘gross misconduct’.”


Myth 1.‘The balance sheet provides a reliable measure of the value of a business.’ False. The balance sheet (or statement of financial position as it is now referred to) provides information about your financial state of the business, not its value.

Many valuable assets, such as people and internally generated brands, are not recorded on the balance sheet. Those that are recorded are not recorded on the balance sheet, and those that are recorded are generally shown at their original cost (and for longer-term assets, depreciation is then deducted).

Value is determined by the future performance potential of the business, whereas the balance sheet is only based on past transactions and events. Generally, a balance sheet can significantly understate the true worth of your business.

Myth 2. ‘Profit is a reliable measure of financial performance.’ False. It’s important to recognise that profit is merely an ‘opinion’ on the business’ financial performance and should never be regarded as an entirely reliable measure.

There are several choices and judgements involved in the measurement of accounting numbers. Examples include depreciation, accruals and provisions, none of which can be measured with 100% accuracy.

Myth 3.‘Profit is the same as cash flow.’ False. It’s perfectly possible to have positive profits and negative cash flows. The reasons why there is a difference between profit and cash flow include:

Sales made on credit are recorded in the income statement when the sale is made, not when the cash is received.

Expenses are recorded as they are ‘consumed’, not when they are paid for.

The cost of inventory is only recorded as an expense when inventory is sold, not when it is bought or manufactured.

Cash spent on capital expenditure is not recorded in the income statement, whereas depreciation (a non-cash expense) is.

Myth 4. ‘It’s possible to measure the true cost of a product or service.’ False. Many of you may be placing far too much faith in your accountant’s measure of ‘cost’.

Whilst some costs (direct costs such as materials and labour) can be accurately related to a product, there are many costs (overheads) which are far more difficult to deal with.

Many business use very arbitrary systems for sharing the overheads across the product range. These systems might appear to be reasonable but they don’t necessarily provide a guide to a product’s true cost.

You therefore need to take care when making pricing and product mix decisions using cost information which is not always very reliable.

DISPELLING FOUR COMMON MYTHS ABOUT FINANCIAL MANAGEMENT

M A T T D A V I E S

Matt re-joined Aston as a lecturer in Finance and Accounting in January 2006. Matt is a member of the Institute of Chartered Accountants in England and Wales, having qualified with Price Waterhouse in 1992. In 1993, Matt joined Aston for the first time, before taking up a position as Director of ATC’s Continuing Professional Development Division in 1999. Following ATC’s acquisition by FTC in 2003, Matt became a Senior Training Consultant in FTC’s Corporate Training Division.


After 25 years as an accountant, trainer, university lecturer and consultant working with a wide variety of organisations, I’ve realised there are some common myths on the subject of financial management. Dispelling these myths is an important part of developing financial literacy.

My recommendation is that business owners and managers invest the time and effort to ‘unlearn’ these misconceptions, in order to develop key financial skills and knowledge. Anyone involved in business can benefit from being able to communicate financial concepts more confidently and, ultimately, manage more effectively. So here’s the truth about four of the most widely held misconceptions:


The best news is that it is not a natural aptitude or knack, but a set of skills that can be learned and adapted to all personality types and dispositions.

Helga Henry, Director of Organisational Development at Birmingham Hippodrome and co-author of ‘NetworkAbility: Building Your Business One Relationship At A Time’ has some practical, easy-to-follow tips for effective networking and building better business relationships.

Ten tips for successful networking

01. Map your network. A strong network should contain peers, clients, mentors, champions and multipliers. Who do you know in each category?

02. There is no ice to break. The other person wants the conversation to go well too.

03. Smalltalk is important. It fulfils a very important social function and a plays a large part in the way we build relationships.

04. Ask questions with a direction in mind. Leave people in a better state than you found them.

05. Listen out for ‘hot words’. What are the key things that people say that give away what they value?

06. Follow up. If you have received a business card that represents permission to contact. So do!

07. Be a broker. A great way to endear yourself to people is to introduce them to someone who they have something in common with.

08. Give value to get value. Value can be something small. ‘I saw this and thought of you’ is a great way to show you have listened.

09. Evaluate how it went. What went well? What went better this time than last time? What do you want to work on next?

10. Celebrate success. Whatever success looks like for you. Just not feeling awkward at an event? Finally speaking to someone you have wanted to for a long time? Celebrate your achievement.

Helga has increased the networking confidence of our MBA students by sharing her knowledge and techniques as part of the MBA programme, so students can actively grow their own networks.

If you are interested in learning more about networking we have created a compact publication called ‘Using the power of your networks’ detailing all the techniques utilised whilst networking.

Please contact us for your copy at [email protected] or pick up your copy at one of our events.

TEN TIPS FOR SUCCESSFUL NETWORKING

H E L G A H E N R Y

Networking is often misunderstood because it is conflated with sales or an ‘old boy’ cabal which is neither transparent nor meritocratic.

In fact, networking is about building valuable business relationships and giving value to get value.

Building lasting relationships can add value to your work, business and personal life. The best news is that it is a learnable skill and not dependent on your personality.”

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Join Aston Business Network, our free professional networking event.

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*Based on ei Networking Survey conducted in March 2015 by Editorial Intelligence Ltd, the knowledge networking business

Networking is essential for building and managing a career” 94%* agree


Q: Many people have a fear of failure. Why do you believe in a ‘fail, learn win’ philosophy?

There are two compelling reasons:

Most businesses fail – get over it and try again

We have to be real: most new business ideas, ventures or processes fail. This is most visibly true for start-ups.

In a previous occupation, I frequently addressed angel investors and thanked them for their charitable contributions, because their money was almost always lost in its entirety. For venture capital firms in the US, the operating rule of thumb was that for every 20 investments, 15 or 16 would fail totally, perhaps three might become something small and only one would make the return for the entire portfolio.

But it is true for most internal innovations in established companies too. Process improvements move forward by trial and error, with lots of errors.

This is true in real estate too, as I learned from people who lend to hotel owners. A rule of thumb is that the happiest owner of a new hotel is the second owner - the bank having repossessed the hotel from the founder.

Failure is educational – highly so

Failure is much more educational than success. After a failure, one is forced to analyse the causes and experiment with new approaches. People in a team that has failed will have learned a lot, not only about the activity that they were undertaking, but also about each other’s strengths and weaknesses. The next time around they will know much better how to play to their strengths.

Q: What’s wrong with success? Isn’t it a good thing – indeed, a better thing than failure?

Yes of course. Success is wonderful but dangerous. Indeed, the greater the initial success, the greater the later danger. No-one wants to break a successful model, so there is great reluctance to experiment and deviate from current procedures.

Those fatal phrases “this is how we do it here” and “not invented here” are a direct consequence of success blinding players to changes in the competitive environment.

I was once a management consultant. Companies most often called us in because – as we identified – success had prevented them from beneficial change.

Q: So how should you approach failure – or fear of failure?

You need a thick skin and a strong stomach. Perhaps one might say you need both the hide of a rhinoceros and a giant ego, but this would be unkind to many successful business leaders.

Some of our own graduates have gone on to become distinguished enterprise leaders after initial difficulties. They have shared their learning from mistakes they’ve made earlier in their careers in a series of short videos.

For example, Sue Noffke, now one of the UK’s most successful fund managers, talks candidly about not being sufficiently prepared for a client meeting. And former BP chief executive Tony Hayward says you learn more about your own judgement through failure than success.

I recommend that you watch the videos and figure out what might be helpful to you.

Professor George Feiger, Executive Dean of Aston Business School, explains why failure is an important step on the road to success.

FAIL, LEARN, WIN: THE DEAN TALKS BUSINESS

P R O F E S S O R G E O R G E F E I G E R

Before becoming Executive Dean, George was Chief Executive of a multi-billion dollar wealth management company in the United States. Other major roles include Head of Strategic Planning at the Bank of America’s world banking division, Senior Partner at McKinsey and Co, Global Head of Investment Banking for SBC Warburg, and Global Head of Onshore Private Banking at UBS.

Watch our fail, learn, win video series. Visit this link:

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