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Running Successful Businesses and The Flaw |
In Start It Up, his new book, entrepreneur Luke Johnson compresses two decades of success to reveal the realities of running your own business and bust some key myths along the way. Learn how to find the right idea or buy someone else’s; source capital from all sorts of places you never expected; get the best from everyone you meet on the way – chiefly yourself; and stay sane while you do it. Following this special session, Luke will introduce the film he has recently produced, The Flaw.
The Flaw
In October 2008 a humbled Alan Greenspan admitted to the US Congress that he had been mistaken to put so much faith in the self-correcting power of free markets and that he had failed to anticipate the self-destructive nature of wanton mortgage lending and the housing and credit bubble it generated. Taking for its title Greenspan’s description that he’d found a flaw in his model of how the world worked, The Flaw attempts to explain the underlying causes of the crisis in more depth than any documentary to date. Made by international award-winning documentary maker David Sington, The Flaw tells the story of the credit bubble that caused the financial crash. Through interviews with some of the world’s leading economists, including housing expert Robert Shiller, Nobel laureate Joseph Stiglitz, and economic historian Louis Hyman, as well as Wall Street insiders and victims of the crash including Ed Andrews - a former economics correspondent for The New York Times who found himself facing foreclosure - and Andrew Luan, once a bond trader at Deutsche Bank now running his own Wall Street tour guide business, the film presents an original and compelling account of the toxic combination of forces that nearly destroyed the world economy. The film shows how excessive income inequality in society leads to economic instability. At a time when economic theory and public policy is being re-examined this film reminds us that without addressing the root causes of the crisis the system may collapse again and next time it may not be possible for governments to rescue it.
Luke Johnson is one of Britain’s most successful entrepreneurs with an estimated personal fortune of £120 million. He is Chairman of Risk Capital Partners and The Royal Society of Arts, and a former Chairman of Channel 4 Television. He writes columns for the Financial Times and Management Today. In the 1990s he was Chairman of PizzaExpress, which he grew from 12 restaurants to over 250; he also founded the Strada pizzeria chain and owns Giraffe and Patisserie Valerie. He lives in London and is married with three children.
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September 2nd, 2011 at 10:00 am
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September 20th, 2011 at 12:11 pm
Although Luke Johnson modestly admits to his failures, it is impossible not to be impressed by his many successes. In his presentation tonight Johnson offered us his recipe for both individual and national salvation, based on ingredients that he has identified during his many years at the bleeding edge of both business and finance.
Pushing a relentlessly positive mindset, Johnson could never be accused of being a shrinking violet. Extolling optimism (“the oxygen of progress”), perseverence, hard work and the elusive but magical quality that is “character”, Johnson grabbed us by the scruff of the neck and marched us briskly towards our first million. On the way, we were instructed how to spot the enemy – the over-analytical, loss-averse procrastinating ditherers, wallowing in their past failures – who are to be avoided at all costs.
Statistics showing that the majority of businesses fail regardless were dismissed as misleading.
On top of his many other acheivements, Johnson makes a fine motivational speaker, and if I were a budding entrepreneur, I suspect that I would lap up Johnson’s gung-ho, the-future-belongs-to-me approach.
But not all of us have the uber-competitive, driven, egotistical bent that is the hallmark of the successful businessman. Furthermore, it can be argued that a certain degree of selfishness is part of the entrepreneurial mix, and perhaps unwittingly a number of Johnson’s comments seemed to illustrate this.
His remarks that most of us are insulated from the hardships of a tough marketplace would surely provoke a hollow laugh from the many currently suffering as a consequence of the dysfunctional nature of the very system said marketplace is an integral part.
The “creative destruction” that Johnson praises is, apparently, being unleashed upon the NHS right now – fine for those with access to the best possible private healthcare, but not for the rest of us I fear.
And Johnson’s dismissal of the 50% tax rate as an “envy tax” does not seem to consider those less well off suffering a proportionally higher loss of income, earnings and pension entitlement who can’t run to Switzerland when the going gets tough.
Johnson also criticised extreme multiples of salary for company directors, but ruled out legislation without offering any credible alternative to the problem.
The role of the state had been conspicuous by its absence, but Johnson had praised the way the Germans and the Japanese had risen phoenix-like from the ashes of WW II. It was put to Johnson that this would have been impossible without a massive influx of US dollars via the Marshall plan and other mechanisms – “state” aid, if you will. Johnson conceded that the state has a role to play, but still managed to grumble that in the UK the state takes 50% of GDP.
Undoubtedly many of the forward-looking qualities Johnson champions are useful additions to any toolbox, and I am not suggesting that we don’t need the risk takers and their “animal spirits”. Johnsons conviction that our deliverance will be forged in the fires of adversity is clearly genuine, and it is entirely to his credit that he seems to passionately believe in treating – and rewarding – his employees well.
But I feel that too much staring fixedly ahead at one’s own destiny can result in
a form of tunnel vision where the less gifted and/or fortunate members of society are rendered invisible. As much as we need the Johnsons of this world, we also need those with a broader vision who can provide a brake on the winners taking it all.
There are those who would eagerly take up Johnson’s cry of “only the fittest will survive”, which he used in the context of business failure, and apply it to society as a whole. Dystopia is within surprisingly easy reach.