Friday, 21 December 2007

A Perfect (Sand) Storm of inflation

On the recent course I was discussing inflation with my Saudi delegates. Saudi inflation is estimated at 10% per year, but feels higher – as it often does to people who are reporting their personal experience rather than the average basket supplied by surveys. We talked about the reasons for this, which add up to a difficult time for Saudi buyers;
- wage inflation – Gulf states awarded a 70% pay rise to public sector staff, to compensate for price inflation, which had an immediate effect in increased prices
- overall inflation – general as well as industrial
- Currency link to the dollar – which has fallen 40% against Euro in the past few years, and with much of the Saudi economy strongly linked to the dollar through oil and petrochemicals then European imports have become more expensive
- High oil price – dominates the Saudi economy, but increases raw material costs for petrochemicals, transport etc. (even if fuel is cheap by UK standards)
- Strong demand – Dubai is often said to have 25% of world cranes reflecting the recent burst of investment in the region. This is being matched by other countries including Saudi Arabia where the planned new King Abdullah university and city will be major projects on a scale difficult to imagine in England. Maybe comparible to the reconstruction of East London which is being undertaken for the 2012 Olympic Games.
- Strong investment – SA and all gulf countries are investing dramatically
- Over heating stock market – high values in the market have produced paper profits, and in order to keep this high value companies have to maintain growth – which means investing
- Dash to invest while oil prices high – the lessons of the 1970s are recognised by the Gulf governments, who intend to utilise this windfall for lasting benefit to the region
- Perception as a rich region – compared to India and China, where there is equally strong growth, the gulf is a region with deep pockets and a willingness to pay
- Lastly, a perception that they will pay. Saudi companies are used to inflation and to prices going up not down. I did a course a few years ago for a chemical company who’s young sales team had never put up prices, and where uncertain how to do so. I bet they have experience now in putting up prices. In SA, there is no experience or culture of driving prices down, and so inflation grows unchecked.

None of this is a problem for Saudi Arabia at the moment, but hopefully the time will come when the value of improved purchasing and price control will be recognised. At the moment the concerns of my delegates remain mainly sourcing sufficient materials, rather than cost control.

Monday, 10 December 2007

Beyond Contractual Compliance

I have recently had an issue with a client that helped remind me of a few things that should have been nearer the front of my mind. Without getting into detail (and hopefully without complaining too much), the situation was that a long established client decided to re-organise their roster of consultants and trainers, and put them on standard contracts. This is emminently sensible, but unfortunately the terms offered were below my standard rates, and I declined (without signing the contract). Recently they rang with an urgent request - a tutor had let them down at short notice, and would I be willing to present the course he would have run. Tomorrow. For a very small fee.

Well, they were an old client, and I was not doing anything the next day, and I was told the course material was all there, so I said yes. Of course, it turns out the course material was not written, as I found out at 3:30pm, and so I had to work until the small hours to develop the material. The course the next day went well, and so far so good. However, I then found out that the trainer who let them down was being paid 25% more than my fee, and to write the material. I felt rather aggrieved, and requested that they reconsider their offer to me - at least for the future courses that they wanted me to run.

They held firm to the fact that their standard contract did not include payment for writing material, and had a maximum day rate. The fact that they were already paying someone else under different terms was irrelevant, and they insisted on sticking to the terms of the contract that I had not signed.

At which point we fell out, and bridges were burnt.
There are a few points to come out of this.

One is that suppliers often feel a need for fairness, which is quite over and above any contractual obligation. If a supplier feels hard done by, no matter what is in the Ts & Cs, they will be unhappy. Which could be a problem if you ever want to use them again. My client now has 2 suppliers who will not work with them - the orginal tutor and me. My feeling that they took advantage of my willingness to help them out of a problem. If they had offered me the same fee as the original tutor, I would have seen that as reasonable.

So, forcing your suppliers to comply with the letter of the contract is successful in the short term, but you may need something more in the future - and they will have a long memory. Sometimes both sides want something more than the strict letter of the agreement.

Another point is the battle of the forms. By undertaking the work, I agreed to the conditions applied in the contract. However the client had misrepresented the situation to me, and I would not have agreed if they had explained the true situation. Something that we will never resolve in court because it is no worth it.

So 2 points - one don't take advantage of your suppliers if you might need them again, and secondly - which ever side of the fence you are on, agreeing a full contract is your best protection - though sometimes both sides want good will as well.

Monday, 3 December 2007

Effective Purchasing Manager

I shall be presenting a course entitled The Effective Purchasing Manger in Kuala Lumpur from 10th to 15th December. Course fee is $3999 exclusive of flights or accomodation.

The purpose of the course is to combine a review of general management skills with a particular focus on the skills needed for managing in Procurement.

The course is presented in English, and we recognise that this is often not the first language for our delegates. All course materials are provided for the delegate at the beginning of the course.

Website restored

A comment on an earlier post reminded me that I should have posted that the problems with the website appear to have been resolved. If there are any further problems I would be grateful for early notification.



Monday, 19 November 2007

Making Tendering Easier

This could easily be seen as a consultant having a whinge, so please consider yourself warned, but I think that there is a real issue underneath.

We have been asked to reregister as suppliers to a major public agency (a regional development agency). They have changed their processes for publishing tenders, and so have requested all existing suppliers to re-register. This we have done, even though there is no open tender suitable for us at the moment.

The reregistering of information was particularly onerous, including not only evidence of policies, accounts and insurances (all of which are available to us, if not exactly at hand) but also 5 referees. All 5 referees were then contacted to check on our credentials.

This is not unusal, though5 referees is more than the usual 3.

My question is whether this is appropriate or helpful. Certainly it showed that we had 2 more customers willing to vouch for us than usual, but does that really prove anything? If we had a poor project we would not have used them as reference, so I don't think you get more confirmation of the quality of the supplier.

Also, as we have worked for this client many times in the past 5 years there is an evidence base within the organisation which is surely more accurate than the views of clients that I get to select as referees. Wouldn't it be better to look up performance on past contracts instead?

The 5 referees is of course an example of incidental bias against new start companies - somthing that goes against the small business concordiat.

My main point though is that this is all evidence that we have presented many times to the public sector - and will no doubt be required to present again next time we tender. This is not a value adding activity for any of the suppliers - or the client.

The One Form project in St. Helens is a pilot trying to address this by getting all the local suppliers to register just once at a central point, and for all of the public sector agencies to then use that information for tendering processes. This seems to me to be a sensible way forward, and I would like to think that this could be achieved for the whole of the UK public sector.

This does require a rather high level of co-operation between a wide range of agencies, but we can hope - can't we?

As further point, One Form is free - another advantage that goes against the recent practice of some local authorities, who again unintentionall discriminate against micro and sme suppliers who cannot afford to register with multiple LAs.

Monday, 12 November 2007

A view from Dubai

I have been visiting Dubai for 9 years, during which time it has changed rapidly and consistently. The view from my regular hotel used to be of the golf course, and is now mainly of homes on the site of the golf course. The signature building used to be the Burj al Arab, and I think will soon become the Burj Tower which is rapidly ascending to the skies. We are used to describing a certain sort of attitude as "Can do". One of my fellow tutors accurately described Dubai as purely a "Do" environment - never mind "try" even "can do" does not accurately reflect the attitude there. An example is the speed with which new Creek crossings are springing up to deal with the ever increasing traffic.

However still one of the best bargins anywhere is an Arba crossing on a wooden diesel boat from one side of the creek to the other - still a bargain at 1 Dirham (about 13p sterling), though up from 50 fils. 5 minutes that remind you that you are not in Western Europe.

Also along the banks of the Creek, right downtown in Dubai away from the beachfront tourist hotels, is the Dhow Wharfage where trading vessels are loaded and unloaded with just about everything you can imagine. I saw Kellog's Cornflakes, air conditioning refeigerenta 134a, tires and whole cars being moved around. The goods may have changed but surely this sort of activity would be recognisable to any Dubaii trader from the past millenium. Good to remember that the basics of business still apply, even in these days of Lasers in the jungle.

Friday, 2 November 2007

Certified Purchasing Professional: Purchasing Purchasing Skills

Paul will be presenting the above course in Dubai starting 4th November 2007 for 5 days.
The course costs $2950 exclusive of accomodation and travel, and is certified by ILM. Click on the link above for more details.

The outline is;
Purchasing is a vital area for modern business, and increasingly the difference between successful and failed organisations. Purchasing and Buying teams used to be seen as about processing paperwork, but it is now understood that they are key to ensuring that the whole organisation has the right equipment and services, has costs under control, and can deliver the right Quality and Added Value. This requires teams with a complete set of Professional Purchasing Skills, who know where and how they can add value to their organisations. This workshop explores all the skills need by Professional Purchasers, and helps delegates to practice and refine their skills in a no risk environment. Delegates will learn how to:

  • Match their activities to the needs of the organisations
  • Select the right purchasing approach for each purchase
  • Write appropriate invitations to Tender
  • Select suppliers for short and long term success
  • Manage suppliers
  • Implement measurement of suppliers
  • Negotiate contracts

Monday, 29 October 2007

Women in SET strategy for London 2012

PAWA consulting has been appointed to help the UK Resource Centre for Women in Science, Engineering and Technology to develop a strategy for the London 2012 Olympic Games. The first phase of this project will run until March 2008, and involve a combination of strategy development and networking with key stakeholders.

As the first step of this project, Paul will be attending the JIVE Conference at the National Motorcycle conference in Birmingham on 30th October 2007.

Tuesday, 23 October 2007


I am afraid that our main website has been highjacked. If you try to enter you are taken to a site that has nothing to do with PAWA consulting.
We can only apologise if this then leads to problems. We are looking into the matter urgently.

Best wishes
Paul Wright

Tuesday, 16 October 2007

Training courses for Social Enterprises

Paul will be running training for Social Enterprises in Hull on Friday 12th and 19th October at the Octagon Centre. The sessions will focus on Tendering processes, and on Sales & Marketing and Management. For more information, please contact us on

These courses are part of a planned programme of 4 sessions that will be rolled out to Social Enterprises in other regions.

Friday, 5 October 2007

Game Theory for a better planet

The Economist newspaper is a useful source of information for any consultant, trainer or business person. In our courses on negotiation we include some examples of Game theory - the idea that human interactions can be usefully considered as games, and that people's likely behaviours and strategies can then be anticipated without too much personal bias clouding our judgement. One of the most famous of these games is the Prisoner's dilemma, which is often attributed to John Nash, but actually originated with Merrill Flood and Melvin Dresher at RAND.

The Economist article (linked above) reports a recent paper that suggests this can be used to break through the political Impasse associated with the Kyoto protocol. Basically it builds on the finding that people's behaviour changes depending on whether you are dealing with them on a one off basis, or repeatedly. The details are worth reading, but the proposal is fundamentally that instead of a long term agreement such as Kyoto we should have annual agreements, with sanctions for rich countries and incentives for poor countries - that makes it easier for rich governments to show progress without making a long term commitment, and allows countries to easily sign up later rather than opting out altogether.

Of course in an ideal world everyone would agree everything all at once - but this is not an ideal world. In business too we have to be careful of "all or nothing" deals when people may be more attracted to a "one step at a time" approach.

Wednesday, 3 October 2007

Improved Buying Negotiations Course

Paul will be running a one day training course for the Engineering Employers Federation Sheffield Association on 18th October 2007, at Broomgrove House in Sheffield. The course is open to both members and non-members of the association for only £240 + VAT. For further details please contact EEF Sheffield on 0114 2680671, or click the link in the title above.

Monday, 1 October 2007

Variable pricing

Apparently Radiohead has a new album coming out on 10th October 2007 called In Rainbows. It will be available as both a set of physical artefacts (CD, album, liner notes etc) and as a digital download. The facinating thing about it is that the price of the download is up to the buyer to determine. How much do you, the consumer, want to pay for this album of music (that you have not yet heard)?

An amazing approach (if true, and I have my suspicions like many people). Certainly a great example of marginal pricing - Radiohead has paid for the recording, and have a lot of money in the bank, and the actual cost of distribution is low so even £1 per download will probably make money. The traditional model says that you charge the same for the download and the CD, and try to make all your money on the initial release.

There has long been a theory that for established artists, cheap or even free downloads would make them more money. That few people would pay £10 for a Led Zeppelin CD, but millions would pay £1 for their entire catalogue - so what is the right price point?

This comes on the same day that The Charlatans has announced that they will give away their new single and album in order to create interest for their tours, which is where they really make money. And to be honest, I can't image being remotely interested in buying their new album but I might download it for free, then decide that they are worth seeing live. So as a promotional tool it works well.

The day before Travis had a CD attached to the Mail on Sunday, but even at £1.90 I thought that was more than I wanted to pay for a Travis CD - though I was happy to pay that for the Prince CD Planet Earth.

The music industry is going through convulsions trying to work out how their business model has to change. The one thing that is clear is that recorded music is vulnerable, but going to a gig is an experience that people will pay for. Increasingly this seems to mean that recorded music is just an advert for the live experience. Which is a bit hard on poor live performers, but may be a return to how music has traditionally made money.

The success or failure of this experiment will have big implications for the music industry. And possibly for other industries that can also utilize digital distribution - software and games. For years there have been shareware software programmes, where people sent a donation of whatever they felt a programme was worth. Or frequently didn't. Can you imagine if Microsoft and SAP tried the same?

Or if the business services industries moved to clients paying what they felt a piece of work was worth, rather than a day rate or fixed project fee? New business models would be needed for both buying and selling.

How much did I pay Radiohead? What do you think?

Friday, 28 September 2007

World's Largest Coffee Morning - MacMillan Cancer Support

Paul will be attending the event at Bradford Hilton today 28th September 2007 from 13:30 to 16:30.

See for more details - at least before the event.

This is not the usual sort of networking event we attend, but it is for a good cause. Quite why a coffee morning event is being held in the afternoon is the sort of thing you should ask the organisers.