The issue of where a company chooses to locate itself came to mind on reading an FT article about the Financial Conduct Authority (FCA). They have moved to Stratford in East London when they were previously at Canary Wharf. It seems that some staff are unhappy. Will the FCA really recruit high quality staff when based in Stratford? I doubt it.
This issue also arose when I spoke to DotDigital CEO Milan Patel after their results webinar last Friday. The discussion made it clear, as I thought, that all had not been well with their US business which is why forecasts had to be downgraded. DotDigital chose to set up their US headquarters in Manhattan, New York City and they are still there. To my mind that is the worst possible US location for a technology company. It would make recruitment difficult and expensive. It now seems they have staff mainly working from home.
I do get the impression that DotDigital have made the same mistakes as many British companies entering the USA, i.e. not understanding the culture, not spending enough on marketing, not talking in American rather than English, etc. But they are learning.
Does it matter where the office is located if everyone is working from home to avoid catching Covid? I think it does. Not meeting colleagues regularly, if not everyday, is very important for motivation and for management to understand their concerns. I speak from experience of both managing remote teams and working in the USA. OK we can hold Zoom meetings but those are not quite the same as they are more formal events. They do not provide the opportunity for casual conversations.
Another webinar I attended today was a results presentation by Bango (BGO). At least I got my question answered this time which was: “The big loss in the associate was of some concern. Please explain the reason for that and its prospects”. The brief answer given was that the joint venture was still in the development phase and revenues were starting to come through. But a lot more explanation would have been preferable.
The stock market seems to have stabilised as the news from the Ukraine does not get much worse and I perceive glimmers of a possible peace settlement on the horizon – along the lines of what I suggested in a previous blog post. But I don’t think the comments of my M.P. Bob Neill about the pursuit of war crimes by Russia were helpful. They might have made for good politics for UK listeners but are not likely to encourage peace to break out.
With oil/gas prices at record levels this week should I have piled into their producers as others have done? I think not as I hate commodity businesses. Earnings are volatile and unpredictable. But there certainly will be a big focus by Governments to ensure countries are less reliant on imports of oil and gas. I have therefore been investing in alternative energy suppliers (wind farms, grid stabilisation, etc).
There are also possibilities in the defence sector where there will be an increase in expenditure no doubt as people come to realise that peace does rely on strong defences.
In the Ukraine they did have a big nuclear weapons arsenal which they inherited from the USSR after its break-up. But they gave them up after assurances by major powers (including Russia) of their security. What a mistake that was!
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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