Book - The Rise and Fall and Rise Again by Gerald Ratner

I think many of us felt a little sorry when Gerald Ratner made that speech that lead to his eventual exit from his own father’s jewellery company. Especially when, as transpired, he’d said the same ‘crap’ joke at many speeches before. But this time, for whatever reason, the press went crazy and it cost him is very well paid job.

One of the reasons I picked this book up, which was recommended on a business list, was to find out why why losing his job caused him to lose his fortune too.

You’d think he’d know enough about money to ensure invested well for all eventualties. Turns out his London property was owned by his company, his own house was mortgaged to the hilt just as the property crash happened and the shares of his company went down due to his comment leading to dive in sales, but he had to sell to stay afloat.

Running Ratners is all he ever thought he would do.

He does, however, know how to build a business. He wanted to make his beloved father’s company the largest jeweller in the world and he almost did that. Most certainly the way I remember it, the four jewellery brands under Ratner did equate them to be the largest jewellery retailer in the UK and they’d already expanded into the US by buying up chains there.

It was interesting to get an idea of his background to learn what drove Ratner Junior to be in awe of his Dad and wanting to take over the business in the first section, The Rise. There were some lows, notably his sisters suicide. This came after the parents insistence that her boyfriend converted to Judaism before they could get married. He was fine with it, but then the rabbi still refused him and eventually couldn’t take the pressure and broke off the engagement.

But in the main, this book means business. For jewellery, it’s all about the window. Did you know that all diamond rings are 42″ from the ground to be at eye level of average height woman 5’4″. I’ve since checked – it’s true! Also it was important for Ratners to keep the same stock for a long time to aid people saving for engagement rings. They also had the exact same window displays in all shops to force items to become best sellers; people buy what they see often.

The world changed in the 80s though with the rising popularity of credit cards and even more since with the want-it-now generation.

Fun fact: my home town of Bedford had the pleasure of being the 5th Ratners shop.

One of the business lows was losing their buyer Terry, who has been given a lot of credit for Ratner’s success. Alarmingly, he’d managed to set up his own retail business while still at Ratners! Of course he had to leave and eventually his small chain of Terry’s stores was bought by Ratners and he was persuaded to come back as part of the deal. Of course by this time, he’d built his fortune and didn’t necessarily need the salary, although there was a tricky divorce taking place.

At this time, Ratners considered the Terry’s model to be the best and they too became a cheap jeweller rather than the stiff one that Gerald’s father and uncle had originally created. They also bought H Samuels and eventually American chain Sterlings. This is when Ratner discovered that firstly, Americans liked boutique brands so large retailers have stores under different names that locals respond to.

Secondly Americans pay their employees far more – their president got paid more than him! I’ve always felt Americans regard their retail employees much more seriously than the UK do, where working in stores is seen as a low-level stop-gap.

Although that speech proved disastrous, we learn some of other times when Ratner used the press to work in his favour, like when he spread the rumour that Ratners should be the ones to save another family jewellery chain who were in danger of going under.

I don’t recall Next – then still run by George Davis – starting a jewellery arm though. It didn’t work because they tried to make it upmarket and Next customers were expecting costume jewellery, as the author explains.

For all his rise and fall and rise again, Ratner does seem big headed even when talking about restarting his online jewellery business in the Noughties. He talks about the time of not needing offices or staff and so bragging about how many shops/staff you manage being a measure of success, became invalid. Several times he states he was Britain’s biggest online jeweller.

I’m all for ambition & yes it’s true, but give it a rest. It’s in the same category as people who feel the need to put they have an OBE on their social media profiles.

Ratner is still rather unlikeable even with the help of a ghost writer. His business theory seems solid but I can’t really feel sorry for someone who was worth £12m but too arrogant to look after his personal wealth & downgraded spectacularly after the press got wind of his crap jokes.

Just because your name is on the door, does not mean you are sheltered from catastrophe.

To complete the stereotype, after the breakdown of his first marriage, he hired a new PA and then married her.

However, for a business story, this book is thoroughly enthralling.

What Should I Pay?

 

What to pay.jpg

When you are buying services for the first time, it's easy to be dazzled by suppliers. So here is my guide to what you - the customer - is looking at:

Websites

Hosting – No more than £6-12 per month, probably less, especially if you pay annually

Creation – From £250 for a simple 5 page website (i.e. home, about us, services/products, contact, testimonials/case study). Expect to pay more if you need the web creator to come up with some of the wording and images too. Up to £500 for 10-12 page site.          

Domain (including email address) - £2-12. Be sure to purchase both co.uk and .com versions to prevent anyone else from having your name.

Branding

From £100 for logo design which will probably include adaptation for business card or website banner if you brief them correctly. Add a bit more if you want to include some generic flyers too. 

Social media management

Around £75 per month for several messages a day, 7 days a week including several engagements per week. Add more only if more than one platform managed, i.e. Twitter and Facebook

I recommend you to take this over yourself once you have mastered the platform, or at least bring it in-house when you have an employee. This allows you to be more spontaneous and to jump on opportunities and generally be personable with your engagement.

Accountant

The more organised you are less your accountant will cost. It can be less than £250 per year if you're a sole trader or around £600 per year for a limited company. It will be potentially more if VAT registered or payroll involved.

Add VAT to theses prices - accountants tend to be VAT registered!

If you have any trouble finding suppliers who will sell you their services at around these prices, please email me. I'll introduce you to those trusted people who will!

Black Box Thinking

I loved Bounce so have been anticipating this with some excitement. Matthew Syed undertakes all the research so we can just sit back and learn it all by reading his books.

Bounce took the idea that just about anyone can be good at pretty much anything, it just takes practice. My take on Black Box Thinking puts out the idea that if more of us learnt from mistakes, the world would be a safer, better place.

Having been to the authors promotional event at the local Waterstones, I was warned about the heart-breaking opening story about Elaine Bromiley, a healthy lady dying on the operating table during a routine operation.

The author asks who in the audience was interested in sports, education or teaching? Whilst I have an interest in all three, my category – business – wasn’t mentioned. Being a fan-girl, I just turned up and bought the book on the day. There are always a few avid readers who go to these things armed with questions. I’m not one of those.

This is how I learnt what this book was about and it is indeed entirely relevant to my world. 

A good summary of Black Box Thinking is that whereas in the aviation industry, they immediately look for evidence as to why the accident happened and how they can do better next time, saving untold lives, the medical profession, in the main fails to learn from it's mistakes.

In an American study, a million people are said to be injured by hospital errors. 120,000 each year. A later 2013 study puts figure at 400,000. This is the equivalent of a 9/11 catastrophe happening every 2 months.

We wouldn’t tolerate this in any other area of preventable harm.

In the UK, 34,000 are killed due to human error.

In aviation, independent investigators immediately find out what went wrong, how to fix it and then share that openly with the world. Every pilot has access to the data. Syed says soon we won't need black box as all the info will have been already transmitted to a central database while the accident is happening. 

Learn from the mistakes of others. You can't live long enough to make them all yourself.

Sullenberger, who landed the plane in the Hudson River (while I was living in just up the road in New York, incidentally) credited all the lessons learnt from aviation deaths to his safe landing. 

The Toyota Production System (TPS) was put in place so if anyone on the car production line had a problem, they pull a cord which halts production. The error is assessed, lessons learnt and the system adapted. Try putting that into health service where mistakes are frowned upon & people are too scared to report their seniors, which is why the preventable death in the opening paragraph occurred.

30-60000 deaths in USA are due to central line infections (catheter placement) 

A healthcare organisation in America, Virginia Mason tried to put into place Patient Safety Alerts in 2002 but no one would report the errors. After the next death,  their boss issued a public, heartfelt apology. Complaints started coming in and it’s now one of the safest hospitals in the world and they saved 75% in insurance premiums too.

Pronovost (who wrote Safe Patients, Smart Hospitals) instituted 5 point check list and saved 1500 lives. Plus c $100m over 18 months in Michigan.

To really bring it home, I learn it took 264 years to put a preventative measure for scurvy in place.

So that others may learn, and even more may live - Martin Bromiley, husband of Elaine and campaigner.

More BlackBoxThinking business learnings here. In the meantime, if you have any thoughts to share, please contact me via @RickieWrites