Another business advisor has contacted me over the ERP and changes to the economy. He has sent the following email to Ieuan Wyn Jones and he has kindly allowed me to reproduce it here.

“Dear Minister

I have been involved in corporate finance in Wales for 13 years; the last two in my own limited company consultancy business. My experience has shown that targeted grant support (both ‘free’ and repayable) for the right businesses has been invaluable in allowing them to start/expand/locate to Wales and to create real, sustainable, well paid and highly skilled jobs. Both my clients (previous and current) and I have been shocked by the approach taken by the Welsh Assembly Government. My clients’ view is that Wales is now ‘closed for business’ – surely not the intention you hoped to portray, but genuine feedback nonetheless.

I have been lucky to work with some excellent businesses in my working career. Even in the last two years, projects for which I have helped to secure grant support will create and safeguard well in excess of 500 jobs in the next three years alone. I can tell you that the average basic salary across all of these jobs is just shy of £30k and will ultimately ‘cost’ the Welsh Assembly £5.5m (although almost £1.5m of this is subject to repayment). Importantly, this support has leveraged over £8.5m of commercial funding – most of which has been dependent upon grant support. Those jobs are also highly skilled (IT, manufacturing, environmental) with my clients committing considerable sums to further training and development. Several of the these clients have also created strong links with Academia with some even influencing the curriculum to tailor graduates’ skills. I can confirm that none of this would have been achieved without grant support.

I would be the first to agree that there were fundamental issues with the grant regime prior to the Single Investment Fund. However, the change of emphasis towards quality jobs, training, skills etc. within SIF was a great step forward. For financial constraint cases, none of my clients had issues with elements of the grant being repayable (why should they?) and this could have continued. The fundamental issue has actually been the WAG support infrastructure rather than grants themselves. Critical decisions should have been taken when the WDA was subsumed into WAG and, again, with the launch of SIF. However, for whatever reason this did not happen. It now appears that all businesses are to suffer for the failing of WAG to make difficult decisions at the time.

I was currently engaged by a number of companies with mobile projects and they were of a high quality with the proposed jobs having excellent skill levels and high salaries. These companies were only considering Wales as an option because of the potential grant support available. Given the absolute lack of information and guidance emanating from WAG since the announcement was made, all have chosen to pursue alternate options. This is a very poor state of affairs and reflects badly on Wales as a whole – reinforcing the stereotype of Wales being an inward looking and backward country. This hurts me considerably as I take great pride in this country and the potential that it has.

Unfortunately, it is highly unlikely that anything I say will have any influence but it is important to me that I try. I would urge you to reconsider the swinging cuts you propose and to urgently make a decision on the treatment of mobile projects.”

I am most disturbed by the statement about the lack of information and guidance from WAG which is clearly causing confusion amongst businesses and their advisers. It is not an isolated incident as I have heard similar complaints from others within Wales who work with businesses both large and small.

More concerning is the growing perception that Wales is ‘closed for business’.

To a large extent, the blame for this must be laid firmly at the door of WAG as it has focused its communications strategy for ERP on the message ”an end to the grants culture” rather than anything positive for business.

If you were a company, would such a headline make you think about relocating here to Wales? I very much doubt it.

This comment was left yesterday by Bob Shepherd on one of the blog entries from last week.

I reproduce it here for those who may have missed it as it demonstrates the strong feelings out there in the business support community over these changes to economic development in Wales.

Unlike some of the commentators who have posted on this blog lately, individuals such as Bob are those who are working every day to try and bring business into Wales.

Yes, these changes directly affects businesses such as Bob’s but it is clear that, at least in the short term, the ERP will also affect the potential of the rest of the Welsh economy to grow itself out of recession.

“I am a consultant who has dealt with grants, finance and mentoring, both for and despite the WAG activities. I have friends and colleagues who move in my world, some of whom are (still) working for WAG in some context or other. I am not a big fan of the WAG business support efforts in recent years but what has happened lately is beyond belief. My own blog has followed a similar line.

One could argue some of the points made in the ERP would be a good idea if we were starting off right now. But to guillotine grants and much of what was in train without something in place to follow on is laughably inept, unprofessional, needlessly destructive and frankly typical of the WAG dabbling in an area they really don’t know too much about.

I understand the staff don’t know what is going on. The clients don’t know if their grant application made the cut, so to speak. There are good propositions out there which were being prepared at no small cost which are now scrapped or on hold at best. There are consultants who relied on the complexities of the grant system for a business themselves who are wondering what to do. There are businesses shying away from coming to Wales, not only because they can’t get a grant but because of the chaotic business environment now apparent. I could go on but you all know what I am talking about.

The last I heard is that WAG are expecting some decisions to be made by the New Year!

I am joining a small campaign that is growing which is to personally email ieuan.wynjones@wales.gov.uk and ask him why this situation has been allowed to develop, to let him know about clients I have that will probably go elsewhere to a more professional environment” .

One of the great management thinkers of our time is Tom Peters, who broke into the consciousness of the business world through his writings with Robert Waterman in the groundbreaking book “In Search of Excellence”.

His subsequent writings have been very much on the same theme of trying to see the different side of management practices and his 2003 book “Re-imagine” still has the power to make one think differently about the business world. If you want a peek inside the book, you can access Chapter 2 here.

One of Tom’s real strengths is to be able to make the complex sound simple and his blog is a joy in deconstructing the most complex issues.

I particularly enjoyed this week’s entry and I thought that it had real echoes for not only individuals but for organisations and even government (including our own here in Wales!).

As Tom says:

“I started blogging in June of 2004, and the best part of it, frankly, is the wonderful comments that come from India at 1 a.m. or come from anywhere. And one morning when I logged on, I had gotten a lovely comment from a guy by the name of Dave Wheeler. And it went like this: “What are the four most important words in an organization?”
And the four words were: What. Do. You. Think.
And I thought about it and I thought, “My God. This is just bloody amazing.” What does What Do You Think mean? What Do You Think, when you say it to me, means: You are a person of value who has an opinion that I want to hear. And so, I’ve started taking it to its ultimate extreme and saying, “Okay, I want you to keep a little scorecard. Keep it in your pocket, wherever else. How many times” —and I do, everybody’s watching this— “how many times in the course of a day do you say—not five words, not three words, not 10 words—What Do You Think?”
You know, we hear this about empowerment and that about empowerment and this program and that program and this training course and that training course. I would argue, in the world of engaging people, nothing is better than the four words: What Do You Think? Try it. Count it. Measure yourself. See what happens.”

So, what do you think?