Tough times shape business

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Directors prove that determination will outlast blind optimism, writes the IoD’s director general

Chairing Director magazine roundtables is the single most stimulating aspect of my job. It means hearing the views of up to a dozen business leaders from different sectors and regions.

What’s striking is how many successful businesses were somebody’s personal dream, from burritos on British high streets to designer denim to taking solar start-up kits to Africa. Many were started in the teeth of a recession and working through the toughest times gave them direction and purpose.

Jim Collins’s story of the Stockdale Paradox bears repeating. Vice admiral James Stockdale was brutally abused in a Vietnamese prisoner of war camp. He noted it was the optimists who didn’t survive – the ones who said “we’ll be out by Christmas”, then Easter… then Thanksgiving… then Christmas again. Eventually they died of a broken heart.

Stockdale’s analysis was that you must never confuse faith that you will ultimately prevail – which is essential – with “the discipline to confront the most brutal facts of your current reality, whatever they may be”.

Tough times hone and shape businesses: if they can make it then, they can make it anytime. Britain’s SMEs are very much fit for the future.

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James Stockdale, who was abused as a prisoner of war in Vietnam

Have a go spirit
I took part recently in a Speakers for Schools event, Robert Peston’s scheme to take to the state sector the kind of speakers often seen on the private school circuit.

In Hammersmith, London, where I spoke, there was plenty of enthusiasm for my theme: how starting a business is the most exciting thing you can do.

What struck me was the students’ resilience. They were more school-of-hard-knocks than A* Russell Group candidates and the way they spoke showed it.

What they had in spades, though, was determination and the drive to have a go, despite the inevitable knock-backs. I suspect that there’s more doggedness in inner-city schools and colleges than at Oxbridge.

Budget bluster
Any budget brings pleading to oppose new taxes, but at least today’s politicians are relatively polite. By contrast, Anthony Henry MP replied to his constituents’ requests to vote against a tax in the 1714 budget as follows: “I have received your letter about the excise, and I am surprised at your insolence at writing to me. You know, and I know, that I bought this constituency. You know and I know, that I am now determined to sell it… may God’s curse light upon you all.”

No going back to the future
The world now has 2,000 billionaires. Does equality matter? Of course displays of wealth can be vulgar, distasteful and alienating. But it’s worth remembering that Britain’s most egalitarian era – when inequality was at its lowest – was the mid to late 1970s, a time of high unemployment and economic gloom.

No one can rejoice in the structural gaps that define our social landscape: between big cities and secondary towns; between the wealthy pensioners who “had it so good” and now live in houses their grandchildren will never afford; or between those with skills in high demand because of globalisation, and the old middle economy of bank tellers, shop assistants and taxi drivers whose jobs are being displaced.

But change needs to be embraced and society adapted. The impressive Dutch Labour politician and European Commission vice-president Frans Timmermans says deregulation, employment flexibility and completing the single market should drive growth. Anti-European parties on left and right, he argues, dream of returning to 1970s-style welfare states within national boundaries.

Such a fantasy would be swept away in a globalised world leaving such nations little more than theme parks picking up the crumbs from prosperous Asian and American tourists.

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About author

Simon Walker

Simon Walker

Simon Walker served as director general of the IoD from September 2011 until January 2017, having enjoyed a career spanning business, politics and public service. From 2007 to 2011 he was chief executive of the BVCA, the organisation that represents British private equity and venture capital. Walker has previously held senior roles at 10 Downing Street, Buckingham Palace, British Airways and Reuters.

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