The Kick-Ass Curve
October 27, 2005
Sometimes I come across great graphics that make the point far better than I ever could. I blagged this one from Creating Passionate Users. It describes the curve people go through with new products and services starting from the point where ‘it sucks’ to the point where people become passionate.
It follows that a good service, product, tool or whatever beats out a bad one because the time to creativity - the point where people do something useful they find meaningful - is shortened. I agree.
The unsaid good news. The resistance curve is almost always shallower for those that become passionate more quickly. Art imitating life perhaps? Either way, it’s a great way to explain the power of new media and the value it can bring to your professional client relationships. If you agree, feel free to snag the image in your presentations, but please credit to Creating Passionate Users. They’ll appreciate it.
Now there’s a thought (CP v Barclays)
October 24, 2005
Cooper Parry’s ongoing punch up with Barclays over the use of the phrase: "Now there’s a thought" in Barclays TV advertising has left CP bruised but not bowed. Barclays was looking for an undertaking to meet the cost of any lost business if the injunction had been granted and Barclays subsequently won their case.
In its press release, CP said:
"The injunction was
turned down not on the merits of the case but because the Court
required us to give a cross under-taking which we could not responsibly
give without putting all our livelihoods on the line."
‘Scuse me? Isn’t that the idea of being in partnership? You take personal risk? But hang on, CP has been an LLP since 2002. So I was a bit surprised to find that according to Business Legal Limited:
"Limited Liability Partnerships are an alternative corporate business vehicle that gives the benefits of limited liability but allows its members the flexibility of organising their internal structure as a traditional partnership."
I’m no lawyer but where’s the liability problem if there’s an LLP in place + presumably a pretty hefty amount of PI insurance for a UK Top 30 crew with annual fees of £13 million? It got me thinking. Now tell me I’m wrong, but maybe CP thinks it’s on a sticky wicket. Or someone’s not written enough PII legal cover. According to Barclays:
"The judge in his summing up described the application for an injunction
as ’speculative’ and ‘extremely difficult to achieve’. The judge
awarded costs to Barclays."
But then I had to giggle. The Barclays press statement was kinda short on a lot of detail, but told me loads about how Barclays is a financial giant. Yeah - we already know, you knuckleheads. I also know your business processes suck for me as a customer but that’s another story.
On the other hand I thought the advert was pretty catchy, even if it does look suspiciously like a variation on the latest Guinness advert. But then in the competitive world of crap high street, divvy numbnuts driven call centre banking, I’m sure the ad boys on Madison Avenue/Wardour Street have had a right laugh.
They (allegedly) got the (alleged) £1 million ad money it allegedly cost. Which is less than the £1.5 million, CP says it invested in its 2001 brand camping but a flea bite on what Barclays can expect to spend on the whole campaign. And if CP wins (which I sincerely hope they do - and then take lessons on trademarking…) Madison Avenue/Wardour Street gets paid again - to do another set. So I’m guessing they’re secretly rooting for the little guy. Come on, tell me it’s not true.
In the meantime, I was particularly taken with this comment about the case:
"Cooper Parry said it spent more than £1.5m in direct advertising costs alone, in addition to significant sums for merchandising materials.
It said it would be forced to drop the slogan because its business would inevitably be linked in the public mind with Barclays."
Clearly, CP thinks Barclays can’t hold a candle to its idea of service. Now there’s a thought…
E&Y next in line for a good spanking?
October 13, 2005
Assuming Accountancy Age is correct, then Ernst & Young looks set to get a financial thrashing by the JDS. I say assuming because the story is short on facts and long on speculation. Nevertheless, it seems to me the Big Boys need to know they can’t ride a coach and horses through ethics, simply because they won a settlement over Equitable Life.
It may not be pleasant, but if the public is to have trust in Chartered Accountants, then those at the top of the pile need to be seen to behave in a professional manner. Those that don’t should be punished accordingly - regardless of position.
The Age says:
"The largest fine in the tribunal’s history so far
is Coopers & Lybrand’s, which had to pay £1.2m in fines and more than £2m in
costs for its role in the Maxwell affair."
The JDS has a real opportunity to show the world it means business. I suggested a £20 million penalty. That’s a flea bite on their recently reported fees which totaled £945 million, with average profit per partner of £561K. On a rough partner count, and taking into consideration the new intake number, I reckon that’s about £260 million (give or take)
In its announcement, E&Y says:
‘Nick Land, Chairman of Ernst & Young in the UK comments
“We anticipate that the growth we’ve experienced as a result of our
clients’ IFRS and SOX challenges will level off in the current year,
although our clients will no doubt face other regulatory issues. Going
forward, we are expecting our TAS and Tax practices to benefit from
greater transaction activity and our new Advisory Services practice to
establish itself as a leader in its own market place.‒
No change there in the spin treatment.
When (and if) the proverbial hits the fan, it might be wise to consider how the issue of trust is communicated to clients. I’d be addressing that now. It will be a differentiator.
KPMG makes elementary errors
October 6, 2005
The US version of AccountingWEB details the PCAOBs finding on KPMGs performance. The detail revealed should give heart to any audit partner losing sleep over audit standards:
"In their exhaustive examination of 76 audits, the PCAOB found many significant errors in 19 audits, one error leading an unnamed client’s board to restate their initially reported earnings according to the report. The report also stated that KPMG auditors set their threshold for corporate accounting mistakes too high on at least two audits. The number of mistakes should have initiated a more detailed examination but did not.
Deficiencies included failure to address companies’ sometimes significant departures from GAAP compliance and perform certain audit procedures properly according to the report. A major criticism in the PCAOB report was KPMG’s failure to obtain and preserve documentation to support the conclusions of the audit.
In some cases, KPMG did respond after being informed of these deficiencies. There were additional efforts by KPMG and their clients that “led to a change in the issuer’s accounting or disclosure practices or led to representations related to the prospective changes,” the PCAOB report said.
KPMG Chairman Timothy Flynn responded in his prepared statement, “KPMG has reviewed the finding identified during the inspection … and has concluded that, with one exception, no new facts came to our attention that caused us to believe that our clients’ previously issued financial statements should be restated or our auditors’ reports withdrawn.”
I don’t know about you but this is a savage indictment of a global firm. What’s worse, KPMG brushes aside its culpability. I wonder what would have happened if such a scandal had emerged in the UK. How many partners would have been hauled up before the headmaster and given a good spanking?
Given there is an atmosphere of distrust at this time, it is crucial you distance your firm from this kind of thing. That means ensuring internal communications are sufficiently friction free so where weaknesses are spotted, everyone gets to know - toutes suite. This technology can facilitate that.
In the meantime, let’s hope audit partners at KPMG are losing sleep - just for a change.
