Inspired Business podcast with Trevor Williams video transcript
Introduction
Just a quick note before we start: this entire first season of Inspired Business was recorded before the coronavirus outbreak in the UK, hence there being no mention of it in the interviews. Thanks, enjoy the podcast.
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Toby Bradford: Hello and welcome to Inspired Business, the business podcast from the University of Derby.
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Toby: During this series we are bringing you inspiring stories from across the business landscape in Derby, Derbyshire and beyond. We discussed the issues affecting your business and provide key insights from our guests for you to take away. I'm Toby Bradford, your host for the series. I'm joined by my co-host, business expert Angela Tooley, who will offer you valuable analysis on the topics we cover.
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Toby: This week on Inspired Business we’re talking to Trevor Williams, who is a former Chief Economist at Lloyds bank, and he is a visiting professor at the University of Derby. Now we caught up with Trevor at a very interesting time, it was just before Christmas and just after the General Election. So there was a lot of interesting things going on. We did talk a bit about Brexit, but we mainly talked about big data. Didn’t we Angela?
Angela: Yes we did. It was an interesting time. I think one of Trevor’s skills – and it comes across very clearly in this interview – is his ability to take really complex global or market issues, and make them relevant to you and me, and to the local businesses who are listening to this podcast. Because some of the things that he’s talking about, you know, it’s quite difficult to understand – well why’s it relevant to me? Or why should I be bothered about it? And Trevor’s very good at doing that.
Toby: It’s a fantastic skill because I really had no idea what big data was or why it should be relevant to business. But he – he’s a lecturer; he delivers speeches and talks to various audiences so he knows how to get his message across. And he certainly helped me understand.
Angela: Absolutely. And I think one of the key takeaways for me is that actually the world is always changing, and we should just accept it rather than fight it. And, you know, in things like Brexit for example, it doesn’t really matter what side of the fence you are on. The reality is these things are happening – you know – these things have happened. Decisions have been made and actually, we just need to get on with it. It’s that British sort of spirit and things like that. But ultimately, particularly SME’s, I think we’re in a pretty good place to deal with whatever is – you know whatever arises. Both from UK policy, European policy, but also changes that are happening at a global scale as well, in terms of sort of – change in political and market and regulatory conditions for example.
Toby: Angela will be back later for our analysis but for now let’s hear what Trevor has to say.
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Interview
Toby: I’d like to welcome Trevor Williams to our Inspired Business Podcast. Trevor, would you like to introduce yourself?
Trevor: Thank you very much indeed Toby, my name is Trevor Williams, I’m a visiting professor at the University of Derby and I am an independent Economist, Author, and Broadcaster, in some respects. But only on the visual, I do lots of TV programmes but solely geared to business. More recently I’ve been doing lots of stuff with Chinese TV.
Toby: Chinese TV? Wow. A lot of business going on in China isn’t there?
Trevor: There is!
Toby: Yeah. So as a consultant, what do you do? What’s your specialty?
Trevor: Consultancy work is mainly around doing presentations for private sector firms. Be that insurance companies, banks, auditors, accountancy firms, legal entities, housing, a whole source of businesses that are interested in what’s going on in economy and what’s going on in the world. That’s mainly what the consultancy is about.
Toby: And analysis? You do consultancy work with an analysing…
Trevor: It’s analysing the data that’s out there. It’s understanding the way that the global economy is going. It isn’t so much necessarily macro-economic forecasts. It’s about understanding the underlying issues that might be driving some of what we see on the surface. So, it can be quite detailed in some parts. It may be about technology, it may be about housing, it might be about – within the housing sector – it might be about real estate. We may focus on residential, so it can be very detailed or it can be very high level, so mega-trends around global changing demographics for example, and spending habits around the world.
Toby: Well it’s always very important to know what those are. One of the big phrases of course is big data, that’s one of the things you work on a lot. And how big data can be used. Could you just explain quickly what big data is?
Trevor: Well, one of the things that I did when I was the Chief Economist at Lloyds was to manage a large team of economists and we looked at a whole range of issues facing the bank within the context of the UK economy. And what we thought was that the bank has access to the data of our 17 million customers. And with that data set we could get a better understanding of the way the economy was forming by analysing the data in an anonymised way. To see, for example, what the spending habits were, how they used their credit cards. And whether in dearest parts of the country they were spending more than in other parts of the country. And whether or not in some parts of the country people were getting more job seekers allowance than in other parts of the country, and that would tell us quite a bit about the way that the UK economy was performing in aggregate but also about - a lot more detail on the way that consumers were behaving and that would help to inform the bank to make better decisions about where it concentrated some of it’s lending and also where some of the risks were. And one needs to better understand ones customers in order to better understand their needs and wants. So that may have also helped the bank to decide on what sorts of loans it should think about doing and so on. So the aim of the exercise was to just become more efficient and to respond more quickly to the changing nature of our customers.
Toby: And, in this technological age, it is changing very quickly. There’s a lot more information coming out, there’s lots more ways of gathering information.
Trevor: Absolutely Toby. And the reason why we wanted to focus on that was because increasingly, the technology that was gathering all of this data, also enabled us to analyse the data, to better slice and dice it. And to delve deeper into where tastes differ across the range of customers that we had. So it was a combination of the data but also of the technology and the computing power, which gave us better analytical tools. And the question then was, how can we use those analytical tools to draw what I would want from it? Which was economic conclusions.
Toby: That must be the – when you’re first looking at that sort of information it’s like: yeah we’ve got a lot of information here, what do we want to get out of it? How do we get it? But that’s what you do now, as a consultant, now you’ve moved on from Lloyds.
Trevor: A combination of both of those things. So, at Lloyds clearly one of the reasons why I was unique and the team was unique was that we understood the power of this data. And we were maybe one of the first of the economists that thought that maybe this would be useful in helping us make better decisions. So yes, absolutely. And I’ve continued to do that in a variety of roles outside the bank. I mean the data, in a sense, doesn’t matter. It’s how you use the data that matters, and what your mind-set is about what you’re trying to achieve. And information is just information. To turn it into knowledge you have to then make it useful.
Toby: So you’ve got to understand it first.
Trevor: Absolutely, yeah. You’ve got to know what you’re looking for, the patterns in the data. You also need to understand what it is telling you and this is where the economic training comes in. Because I’m looking for economic signals but I know what I mean by that.
Toby: So what do you mean by that? Or is that kind of bespoke information that you don’t want to share out?
Trevor: Well, part of it is that the information from different firms is bespoke. It’s generated by their customers, and so unique to them. And so that information may help them understand better responses to their businesses, but then on the other hand, if you’ve got a broader context that they are operating in you also know how they may or may not conform with the average of the norm. And where they differ, and where their advantages or disadvantages may be. So that’s one aspect of it. It is, as you quite rightly pointed out Toby, it is very bespoke. It isn’t a secret for me to say that what I do is based on the knowledge that I have accumulated over the years, and my economic training. So there’s – that’s not something that you can easily transfer to others. And this is why what I do is, in my view, unique because it is based on what I do with it, and the conclusions that I draw. And hopefully the conclusions that I may draw will chime with the user and their view of what it’s telling them. So I need to convince them that we are giving them information that they can use to help do whatever it is that they do: better.
Toby: What sort of companies do you work with? Obviously, you have experience with banking, but what sort of companies do you work with now?
Trevor: As you said, my background is banking, but within banking remember – it was not just financial services firms that would bank with a bank. Lots of companies bank with banks. Manufacturers bank with banks. Within manufacturing you’ve got pharmaceutical companies, you’ve got car companies, a whole range. And then of course there’s the services side of things as well. So maybe insurance companies, it might be legal, it might be accountancy. All of those are firms that would want to know how the economy is changing, and what our view is of the changes that are taking place in economy. They would not necessarily be generating data, their own data that we can analyse. But of course, as I’ve said, what I do is not just about analysing data, it’s also about a broader understanding of some of the trends that are driving changes in the economy on a daily basis. Most large firms these days generate data about their customers. And you see it around you all the time, of course, supermarkets are a prime example; they have loyalty schemes, and they gather the data on what the customers are spending things on. And they use that data they then offer them deals on the things that they’re spending things on, and they offer big discounts because they know that they’ll sell more of those particular products, and therefore they can reduce the average prices of each of those products, and by selling more of those products they won’t diminish the margin of profits that they make on these products. That’s the straightforward economics, but also the straightforward business sense. And the more you sell of a product, the less you may be able to charge on average for each of those products. It’s called economies of scale. They’ll be able to make more of them at cheaper prices and customers benefit from that.
Toby: But in that context, what sort of expertise could you give, say, a supermarket that may take them to the next level, which may make them look in a different way? Is that how you would work in that sort of situation?
Trevor: Well the big data that would be generated – there’s two aspects to that. On the one hand it’s the data that they generate. And let’s be clear here what I mean by big data. I’m specifically referring to the data, which has been generated by the technology that we have around us today, which enables firms and businesses to capture what their customers are doing, and what enables those who may lend to people, gain customers, they can capture that data and analyse it in a variety of ways based on the huge amount of computing power that we now have. And by the different nodes and opportunities that there is to capture the data and analyse it. So they’re big data sets. In that sense, we have to be clear that there’s two aspects to it. One is: how do you - at the aggregate level - look at this data. But then at the level of the firm – how can they use this data? And that’s almost two different things. So, at Lloyds for example, we would have… I don’t know; let’s say for arguments sake, a 15% share of the direct debits that are used with credit cards that pay out of accounts instantly. So it isn’t credit card, it’s a debit card. So on the debit system for example you know this is what people are spending instantaneously, so it’s coming out of their account and they’re not thinking; “oh, I can pay for this later on”. They know it’s been paid for now. And what I would probably want to look at is: if we had a large number of retail outlets, it might be useful to – at the aggregate level – see what proportion of the amount of spending on those debit cards has been done in supermarkets.
Toby: Right.
Trevor: Because that would give us a sense of the amount of spending that might be done in terms of the average food spend out of your typical consumers total spend. We may then relay that back to the weight of food in the RPI, retail price index, because that gives us a sense of how inflation is generated by changes in food prices. But it may well be that, a better way of thinking about the information may be this: which is that we would know which retailer a card was used in. Now, we would never release that information into each of those individual retailers, but we could – at the level of the bank – maybe think about… So, if we break them into two broad categories, which are top end and lower end, we may look – we may think Morison, Lidl and Aldi are different to Waitrose and others. And we may say, so – in an economic sense – are people spending more on high end? Or are they spending more, which may be deemed ‘value for money outlets’. And over time that may tell us about spending habits. And, it’s clear that historically it seems to me that the data that I was looking at the time told me that increasingly UK consumers were looking for more value for money. And they were substituting the spending they were doing at some of the high-end stores for what was deemed the lower-end stores. And that’s because a number of things were going on in the world at the time, which is that, in reality your Aldi’s and your Lidl’s were offering value for money because the calorific content of the things they produced were not actually that different to the Waitrose’s and the Sainsbury’s and the Tesco’s, actually. It was branding that was the difference. And so people will typically spend in these other stores because they’ve always spent in these other stores, so there’s a bit of inertia there, they didn’t switch very easily. But as the economy slowed, people started looking for value for money. And maybe they actually realised that there wasn’t much difference between the food that they were getting in terms of the quality and the content between these outlets. And so the Aldi’s and the Lidl’s increasingly took a market share.
Toby: So circumstances in a sense have made people become more sophisticated in the way they shopped.
Trevor: Yes. And also they wanted more value for the money that they were getting in because growth in pay was slower as the economy slowed, and people just wanted more bang for their buck. And so one of the aspects that the big data was telling us was; there was change in market shares taking place between different supermarkets. But we could look at this in different parts of the country too, and we could see how different areas were performing relative to the average. And what regions and nations of the UK were doing well relative to each other. So that could give us a good sense of the geographic spending pattern too. And that might enable us to make decisions about, you know, where some of the branches might be located, what sort of office you may put in some of those areas, and so on. That’s using big data to make concrete decisions. It could also be informing us about where the risks of our book were with regards to potential corporate failures and so forth. And so it’s all incredibly useful information. But there are other instances too were that sort of data could be gleamed and so in the future you may think about this. Survey’s that are done of businesses are usually after they produce things: what is it that you’ve made? What is it that you’ve sold? But in an era of big data, you may just simply look at: who’s bought what they’ve sold? Rather than what they say they’ve produced, and get a better sense of actually what’s used. And that can give us a better sense of – actually – what’s demanded of various goods and services in the economy? And increase our sophisticated knowledge of what’s going on, and therefore maybe inform better decision-making.
Toby: So Trevor, in terms of big data, when did it change from ‘data’ to ‘big data’?
Trevor: That’s a great question Toby, and I think that data’s always been around, but the huge amount of information that we now have has been generated by the globalisation of the internet, and remember that’s only been around 20 years. With also the acceleration in data generated by our iPhones and by our communications tools, which means that the spread of information and knowledge now is almost instantaneous. It’s also the huge data set, which has been generated by the technology, which enables us to track what we are doing via our spending habits, via the communications tools that we have. But also via the information, which sensors are now transmitting back to businesses who embedded them, or embed them, in machines that give information back about their condition. In the technology, which allows these sensors to be able to feed information back to providers of a whole bunch of services. And I’d just like to give a few examples of what I mean by that; so Rolls Royce for example can put sensors into all of the aircraft engines that is makes, which will tell them about the condition of those engines and feed it back to a central computer. And therefore, they can monitor the plethora of engines that they have made and sold around the world to know how they’re performing, when parts need replacing, inform the customers before they may realise that they know these parts need replacing. And effectively become more of a service provider then simply a manufacturer. But there’s a whole bunch of other industries where this is taking place. So there’s going to be a ubiquitous-ness to the sensors that are being produced in formula 1 cars these days they’re able to gather data on the life of the tyre. Using a whole plethora of metrics about how long it’s been on the car for, the speed that it’s going, weather conditions, the friction, the heat on the track, the type of track it is, the nature of the track, and so forth. And they end up with just one metric which basically says how long is this tyre going to last. Has it used up 50% of its life? 60, 70, 80% of its life? And with that they can strategize, they can make decisions about; so when do we want to bring this driver in to optimize the length of time that we have yet to in this race and whether or not we want to try to go to the end if there’s enough life in it, given where our relative position on the track and so forth. And so that tells us it helps to make better decisions the more information you have, and this is all big data does.
Toby: That’s – it’s understanding which information you can take and putting it all together into single strategy, and it’s finding the right information and being able to understand that information.
Trevor: Precisely, so there’s lots of information being generated, but knowledge is how you use that information intelligently to make better decisions in a variety of ways. In agriculture, for example, you can put sensors in the soil, which measure temperature, the condition of the soil. They can inform the centre of that farm when it may need watering. It will tell them the best time to plant, the best time to pick, it may tell the drones when to go over and water for example. But more than that, in again agriculture as the one example - I’ll come back to other examples in a moment - but in agriculture for instance some firms now increasingly put sensors into some of the animals. Which monitor when it is – so say cows for example, when is it best that they are fed? When is it maybe best that you try to breed them? When are they close to calving? And they just need to walk past the Wi-Fi post, which then beams that information back to a central location. And some firms now increasingly – that’s what they do for a living. They’re coming up with all of the new ways of analysing the best way of increasing yields, milk yield for example, or you know the yield of the crops that may be produced. And so information becomes key to improving efficiency. And so that is across the whole range of industries, from agriculture, to manufacturing, to bio-medics, and also to services industries too. We talked about, you could do it across insurance sectors, you can – the range of information and the way that we’d be able to use it is just increasing at an ever-faster pace – and that won’t change.
Toby: But it’s learning to understand the information that is the difficult thing. The next step is the farmer having to learn how to analyse that data.
Trevor: Yes indeed, it’s becoming a high-tech business. And so, to your point, it increasingly requires high value added, it requires more skilled people, there’ll be more mechanisation, but look, someone has to make the machines. Someone has to understand the information. Better jobs are going to be created. It’s incumbent on us as a society to make sure that people are trained for the better jobs, so that they’re not left behind. And so there are social and political implications from this. Because some jobs may be lost, but new jobs are being created. Who had heard of Data Scientists five or ten years ago? And now it’s a growing number of jobs in that sector. Because analysing the data becomes more important. But they’re well paid jobs. Programmers are much more in demand, people who can fly the drones, that are monitoring the drones. Look, there’s a whole range of new jobs that are going to be created. And I think they’ll be better jobs for society, but what we have to make sure we do, is that no one gets left behind. We could talk about football actually as another good example of the way that big data is used.
Toby: Yeah.
Trevor: So these days, ever football – every large football club gathers data, almost second by second, on every single player on the pitch. What the – the touches that they’ve made, the context of whether it led to a goal, whether it led to increased chances of getting a shot on goal. Because what they’re after is winning. So if that’s the goal, it’s all about analysing data to see: what’s the contribution of every single player towards that. And they’ve been doing that globally over the last few years. So now, lots of these football clubs use that data to decide on: who’s the best defender? What’s the best position? Who do we want? Can we afford them? Given how they can contribute, and given our wage bill, and given our ticket prices, and given where we are in the league. And so some of the most successful clubs are the ones that have used this data quicker than others and more intelligently than others. I cite that example because, this is a good example of Liverpool Football Club apparently, in the way that they have utilised the data to choose their defenders. Let’s think about that for a second, so what it’s telling us is that increasingly football clubs may choose people based on how good they are, not necessarily whether they like them, not necessarily whether they look like them, this is something which is much more objective. This is about performance. So, you could almost argue that that helps to create an environment where people are judged more by what they do, then what others think they are.
Toby: Anyway, that’s enough about football! What I want to talk about now, just very briefly, is how you got to be where you are? What’s your history? People don’t know who Trevor Williams is.
Trevor: Well my background is obviously I am from the UK my parents are from Jamaica. My background is, you know, normal school – comprehensive. Didn’t go to a grammar school. Went to Essex University, did a first degree in Economics. Did a second degree in Economics there. Got a job with the Civil Service while studying for a PHD at Birkbeck and then effectively I was covering the relationship between the Trade Union sector and the Government sector and businesses. And analysing lots of data about how they could cooperate to make better economic outcomes. And I worked for the Government Economic Service, shifting between different departments, at some point as well. And then I had an opportunity to be speaking at an event, and I think the Chief Economist at Lloyds was there at the time, and I know there was a job opportunity that arose out of my realising that that person was in the room. You know, there was a job being advertised there and I had applied for this position and got it. And then spent the next 20 odd years working in the city, and became the – eventually became the Chief Economist. I think initially I joined actually because I was presenting on issues around using statistical analysis to help to understand the way that, for instance, changes in exchange rates could impact different businesses in the UK given the industry they were in.
Toby: That’s the old fashioned equivalent of big data then? Is statistical analysis –?
Trevor: That’s absolutely the old fashioned equivalent, precisely. But that was the route that got me in to Lloyds. And I think it was actually – one of the things I did for example, was to analyse the way that changes in the economy would impact the banks default rate, i.e. the amount of bad debt that would arise when the economy turned down. And the Chief Economist at the time wanted a better sense of that, in order to have discussions with the board, maybe, about what sort of bad debts they would have and therefore the provisions that they’d have to set aside of their book, to ride them through that sort of crisis. And that led to, eventually, heading up the Group Economics Department, and creating a department on the commercial side that focused on markets and clients, much more than in the past. And I set an award-winning team of Economists using the data to better forecast the UK economy.
Toby: Thank you very much for that. But just taking a slight tangent from that: giving something back. I mean, your parents came from Jamaica and you work with a couple of charities who…
Trevor: I do indeed, yeah.
Toby: Who… try and promote people from young, black men, coming into the city, and also, young people from deprived areas.
Trevor: Any disadvantaged backgrounds, absolutely. So there’s three key charities that I’ve worked for. One is ‘Reach Society’, which is specifically aimed at young, black men, from inner cities, to give them mentors and role models, and to help encourage them to understand the link between education, and their career, and their future. And also to allow firms that want to recruit from more diverse backgrounds, to have a pool of talent from which to be able to do so. So we organise careers fairs on an annual basis and have a pool of people that firms can, effectively, recruit from, that have the right levels of qualifications and motivation and so forth. I run another charity called ‘Through the Looking Glass’, with a colleague of mine from Lloyds – Leslie Wang – which is actually across the country. So we’ve done projects in Edinburgh, and Leeds, and Manchester, as well as London. Which is to encourage 16 to 18 year olds that are currently doing A Levels, either in their first or second year, to move out of the relatively deprived environments that they may be in. And we put them into some of the top firms in each of these cities legal firms, accountancy firms, and others – banks, etc. Where they spend a whole week interacting with people from backgrounds, that they may not think is one that is familiar to them, but when they meet people who talk about where they got to and why they succeeded, and what sort of jobs that they did, and do. It gives them a better sense that; well, if these people can do it, they’re just like me, I can do it too. And we’ve had some huge successes from those projects. And as I’ve said, we’ve run them in diverse places, across the country. We’ve not done one in Wales, but we’ve certainly done, as I’ve said, Manchester, Leeds, Edinburgh, we’re going to do Glasgow, and we’ve done London for the last 7 years.
Toby: Brilliant, that must give you some real sense of achievement, that you know, you’re in a position where you can do something and you are doing something.
Trevor: Yeah, so we basically tell them: look, there’s no reason why you can’t do it. You know, we bring them into, I don’t know – Lloyds of London, and then give them a tour. We bring them into Chambers in the city, and they meet people who talk about what the firm does and what businesses they’re involved in, but also: how they got to where they got to. And they begin to realise that actually they’re all just people just like them. And that if they put the effort in, then they can do it too. And that’s a really encouraging thing. It’s very satisfying as well, to see how people go through these courses and they change and become much more confidant. I believe in society, I mean, I genuinely think that the worth of people should be judged on what they do, and what they want to do, and to give them a chance to do it. And I actually believe in young people, and it’s very encouraging to have met so many of them, and to see that actually the future’s bright, you know? And that we shouldn’t right them off, there’s huge opportunities that are available to young adults these days and I think they should take advantage of it.
Toby: Now going back to big data. This economic analysis with big data, is this just for big business? Or is it just as relevant to SME’s, the small and medium sized enterprises, as the large corporates?
Trevor: Yeah, I mean that’s a great question actually Toby. I think it’s just as relevant to small businesses, because they may want to better understand their niche. You know, where is it that they can make a difference? What is it that they are doing, relative to the area that they may be operating in? And the opportunities that what they are doing may offer them and their customers, and to exploit the opportunities that may exist in the area they’re trying to work in, and to just get someone in to think about: well, what are we trying to do here? Where is our market? Who can we sell this product to? Who are our potential customers? How well are we doing? And it’s very easy to be able to track how well they’re doing relative to a subset that they think are their peer group.
Toby: That’s the important thing isn’t it? Being able to take the wider view as well as exactly what that company is doing.
Trevor: Yes it is, I mean, it’s taking it from the micro to the macro. You can go from the macro to the micro, but you can also go the other way, to your point. And I think that many SME’s operate in an environment where they may not be big players yet, but they could potentially become big players, and they need to understand what the potential is.
Toby: Now, I’m going to ask you the difficult question now. We can’t talk to an Economist without talking about Brexit. We’ve already talked about football once!
Trevor: It’s – it’s… yeah.
Toby: Now I’m gonna… You recently used football, like the success of English football teams in Europe, and the allied victory in the Second World War, to explain your views on Brexit globalisation, nationalism, and economic isolationism. It’s a huge topic, I realise, and we’ve only got – well we haven’t got the 3 days or however long it would take to explain it – but could you just give us a taste of your views on that?
Trevor: Well, first of all I think that Brexit is more an expression of identity. Who do we think we are? Who do we think we want to be? It’s an existentialist question, I think. It’s not a pure economic question. Although I think that it may have been – has aspects to it, which may appear to be economics, I don’t think it is. Because 90 – for what it’s worth – 90% of economists would say that bigger markets are better for potential for economic growth. Trade agreements are good things because it allows you to be able to sell your goods into a larger market. And if you’re selling your goods into a larger market, you have better profit potential, and it allows you to be able to grow more quickly, to get better incomes, to have higher standards of living. And that’s – that comes from the origins of economic thought, throughout history. It’s based on economies of scale and producing goods more cheaply, and therefore the bigger the market the better. Because things fall in price, people have more opportunities therefore to buy some things cheaper and they have more money to spend on other goods and services, and so forth. So I think the Trade Deals are good things. I think that isn’t the issue in the UK, because most people agree that the idea of Brexit – even for those who are arguing for leaving the EU – is that they still want to strike trade deals. So I, you know, I want to be very fair and objective about that aspect of it. Which, I don’t think the UK’s approach to Brexit is an isolationist one, to be clear.
Toby: Yeah.
Trevor: Some may vote for that. But that’s not what’s going to happen, because the leaders of all of the parties agree that they want to do deals on trade. Those who want Brexit argue that they want to do it from the position of the UK, rather than doing it from within the EU. And so there’s a question about the veracity of that. You know, will you do better deals in or outside? The current deals, for example, that the UK has access to and they’re going to have to renegotiate all of them. And it’ll take time to renegotiate all of these deals. And how successful you’d be with getting the same deal or as good a deal as you had previously. And those things, people may think, are a matter of opinion. So, you’re absolutely right, my analogy in the pieces I wrote were about the way that we do live in a globalised world, that you do have to compete internationally. And that the most successful ones are the ones that pool in talent from wherever it may be, to fit in to their culture and suit their goals. And it benefits those involved. So, I think coming at it from that angle, it’s not clear to me that the UK will be as successful outside as inside. That it means a loss of influence, and that it’s very unusual to be un-doing a trade deal, as opposed to be doing a trade deal. And if one thinks of it in that way then the question has got to be: why are you un-doing it? And as I said, that then comes down to – who are you, who do you think you are, and so on and so forth. Which is political, but I also have to say that the UK is split 50/50.
Toby: Yeah. But economically, if we can get back into a trade deal with whomever we get back into – that’s the important thing. It’s making sure we do – we don’t just stand-alone but we do start working again with everybody.
Trevor: Yes I think that’s the key thing, and I think that that’s the aim of all of those – even those who want to leave – they are aiming for that in the end. How long it’ll take, whether it’ll work, it’s in the lack of the gods. My opinion is that: it won’t be easy. It’ll take many, many years, and maybe that; there’ll be a lot of disappointments along the way. And maybe there’ll be agitation to re-join from those who don’t think it was a good idea in the first place. So I don’t think this is over by a long way. And – what’s Brexit? The first stage is a withdrawal agreement. The second stage is: the deal, i.e. the relationship that one has with the EU, and that’s not yet been done. And it certainly won’t be easy. One has to listen to the other side, and the other side have said that the withdrawal agreement is the easy bit and that’s taken 3 and a half years. Then the hard work really starts after that. And there is still the possibility of crashing out without a deal if it’s not done within 12 months by the 31st of December 2020, and they’ll have to ask for an extension by July 2020. So there is lots of politics to be played out, I’m afraid, over the coming years. It is not a done deal.
Toby: From an economics point of view - the stronger the deal is, the bigger the market is, the better thing.
Trevor: Yes. The larger the number of trade deals we have, the better it is for us to sell our goods into more markets in the world, but also to get goods more cheaply from other parts of the world. And to remain an open dynamic economy – this is an island, so it lives by trading.
Toby: So, so, it… there’s a possibility that when it’s all over, yes it may all be better, or at least not as bad, but it’s going to take a long time to get there.
Trevor: We don’t know what – better is a relative – better or worse is relative. We may not know what that is because that’s one of those counterfactuals. We can only say it’s better if we know what the alternative would have been. And we don’t know what the alternative would have been because we’re only in the situation that we’re in. We can’t run the experiment, or be in and out at the same time. So, it would be a relative thing and it would be based on perceptions. People are arguing about: well, if we’d been in it would have been like this, or if we’d been out maybe it would have been like this but… So the point is that the majority of economists think that being in is better than being out. But there’s maybe 10% or so, those 10% would argue there’s even more than that but, you know, if one looks at the research that’s been done on this – the overwhelming evidence time and time again from all of the Think Tanks in the UK gives the same message. Which is that the deal the UK has with the EU is the best deal it could have. Because it isn’t just about the trade deal, it’s about single market. And the single market is actually more powerful than the trade deal because it means that you don’t have to worry about the way that goods are being produced across the entirety of the market. Your goods can be shipped in and out freely, which is part of the trade aspect of it, but the price in structure with the standardisation of products and so on and so forth – is what makes the EU work so much as a customs area. But also a single market where the price signals are sent to those who are making goods, from those that are buying these goods. With the freedom to be able to locate across that entire zone wherever may suit you best, given the intricacies and the supply chain that you’re involved in. And that’s more than just a trade deal, and that is hard to disentangle from trade arrangements. So the being in a single market is more than just being in a trade deal.
Toby: So, to replicate a single market within a trade deal would be very difficult.
Trevor: Correct, and we wouldn’t because – that’s where you do have to give up. Or… pool, it’s not giving up sovereignty in my view, you’re pooling sovereignty, you’ve agreed on certain things. But you’ve all agreed on the same things so you’ve not given up something that – to someone else – that they haven’t given back to you. You’ve all agreed on this, you’ve pooled sovereignty. And so it seems to me that that’s going to be… you can’t replicate that, even if you achieve the same trade deals.
Toby: Right. Thank you. I’m glad we got there in the end because it’s a very difficult subject, which very few people understand. Including me!
Trevor: Maybe including some of those that want to do it too! Or don’t want to do it, to be fair.
Toby: Yeah. Now, we’re going to move on from that and put that behind us. And I’m going to ask you another tough question, in the sense that, what do you consider has been your greatest achievement? And what’s given you the most satisfaction in your career?
Trevor: So far, Toby, in my career, I think it is being able to give - what I hope - is value, for a whole range of businesses, but also the people that I’ve worked with across different firms over different time periods. That’s what’s given me the biggest satisfaction, to know that I have helped to make a difference. Hopefully I’ve helped to make a difference. I think that is what gives me most satisfaction.
Toby: Good, thank you. Now then, another tough one – well it’s not really – what’s the single most important piece of advice, business advice, you can give to our podcast listeners?
Trevor: Goodness me, I – I don’t know if I’m in a position to give anybody advice…
Toby: You’re more in a position than I am!
Trevor: I think that, I can only speak from my experience, and I think that flexibility: reacting to change in circumstances, not being too inflexible, I think that’s the key. Freethinking but added to a focus on the key essentials of what one is doing. I think that to me is what I’ve learned the most. You know, firms survive over different economic cycles because they’re flexible, because they are able to sink laterally or dynamically, whichever way one wants to phrase that. But they respond to circumstances and they change their minds when conditions change and the facts change. They remain flexible, open to ideas, that’s what I think is key.
Toby: So, not tunnel vision. It’s keeping an eye on what is going on and… –
Trevor: And reacting to it.
Toby: Yeah yeah yeah.
Trevor: Absolutely, yeah. I think that’s the key to successful firms. You know, because conditions will always change, they’ll never stay the same. We live in a universe, not just a world a universe, which is made up of a bunch of different probabilities. And these probabilities change over time and we have to react to changes in circumstances. Have a goal in mind – but react to changing circumstances, it seems to me.
Toby: Yeah. That is true; it’s not just one road to get where you want to go. So, you may have to take a detour.
Trevor: As a poet says; I came to a fork in the road and I chose the road less travelled.
Toby: People do tend to follow the herd but, you know, sometimes it’s a good thing to go another way. And you’re coming in and teaching at the University of Derby as a visiting professor, you’re coming in teaching today. What are you telling our students today?
Trevor: Well today I’m actually going to be lecturing on the changes that are taking place in the world economy, I’ll be touching on demographics and technical change, but unfortunately I will also be talking about Brexit. Because I think that’s been set by the lecturer as one of their exam questions. Pros and cons I think!
Toby: Well that’s the difficult thing I think, it’s being able to take a view of both sides.
Trevor: Yes, and then they must reach a conclusion of course and – come down on one side or the other and give their reasons why.
Toby: Okay, so you’ll be completely fair? You won’t –
Trevor: Completely objective.
Toby: Completely objective? Okay. Excellent! Well, thank you very much Trevor Williams. It’s been an absolute pleasure to have you here.
Trevor: Absolute pleasure to be here.
[Music]
Analysis
Toby: So Angela, Trevor talked a lot about big data, that’s his area of expertise. What do you know about big data?
Angela: I’m learning rapidly, which seems to be a theme in these podcast actually! Yeah. I think we get a bit hung up on words like ‘artificial intelligence’ and ‘big data’, and all these complex things and what they mean. And they all sound a little bit too technical, and I think many people have this sort of mind set that they are only for big businesses, big tech businesses like Google and Facebook and things like that. And actually, what does it mean to me as a small manufacturing firm, for example? Or a retailer on a local high street? So I think for me, perhaps one of the first important things is to sort of just explain – that actually it’s not a complicated terminology. And in some respects, it’s not really any different from dealing with the spread-sheets that perhaps we use nowadays. The challenge that we do have based on some of the simpler systems that we perhaps already use, in terms of data sets for recording customer data, or for recording perhaps our sales or things like that. Is actually: because of the increase in digital data and the increase in the amount of digital things that we use that generate data, so for example our smart phones every time we go on social media it leaves digital trails and things like that. We have sensors on products, you know, our cars all have sensors on them everywhere. We walk around the high street there’s CCTV cameras everywhere and things like that. And actually there’s just so much data, those traditional spread-sheets that we’re used to using just can’t cope with the amount of data. So, you know, we’re used to dealing with megabytes of data, gigabytes of data, the sorts of sizes of data sets that Trevor’s talking about that we can now look at, and analyse through big data, we’re talking petabytes and exabytes. We’re talking billions and trillions amount of records. And so, I think that’s a concept that people sort of struggle with.
Toby: It is, it’s getting your head around that – the amount of information.
Angela: Exactly.
Toby: And how do you actually get into that? How do you use that information?
Angela: But actually, it’s not any different from how we would do it already. And I think we probably need to turn our heads and say well, where are the opportunities? Because actually, we now have access to data that we never had. So actually we could and should be better informed. It’s just really important for a business because it allows a business to make better informed decisions based on more hardened facts, because they can start seeing trends that they could never see before, because we can bring different types of data together, and make it meaningful. And that is really important in the age that we have, because there’s so much change and things like that. We’re constantly being pressurised to think about how we do things different and things like that. But actually, having that assurance and that validity in terms of, there is some hard fact data behind it, would just help give us that confidence and make ours better informed decisions.
Toby: So what specifically, say if you were a small business and somebody said: you should be using big data to plan your business, how do you go about that?
Angela: So there’s really simple ways that you can just start thinking about how to use it and things like that. Because it is confusing and actually I think a lot of businesses don’t do it because they’re just overwhelmed with what is there and things like that. So just, first of all, just take it back to your own business. So do a data audit. So think about what information you have that you routinely collate within your business, so it could be customer sales data, there could be some market data, you might have kept the data from quality as you’re tracking quality of products through your manufacturing processes. You might be able to access information in terms of how your product performs out in the field, so your car is a great example of that. The first thing you do when you take your car to the garage now is plug it into a machine and produces data, it almost tells the technician what they need to do. So first of all just start listing down what information you have and you can access. Then, start thinking about what your goals are. So, what do you want to achieve? What do you want to find out? What information is critical or important for you to be able to have in order for you to make progress? Whether that be for you to increase your sales, maybe? Or reduce the amount of non-conforming parts that you produce? So just think about what are those goals?
Toby: So in a sense it’s no different to what people have been doing before – what businesses have been doing before. It’s just that the amount of information there is is greater so they can get more insight?
Angela: Yeah, exactly. But I think the important thing is don’t be overwhelmed. Make sure that what you’re looking at is relevant. So, relate it back to what you’re doing and what you want to do in the future. And where you want to develop your business. And start small. So perhaps just start looking at customer data, for example, and just start thinking about: well actually, what data do I – you know – if one of my goals is to grow sales in a certain region then start looking at what information you have that will help you develop a better understanding of consumer buying habits maybe in that region? What your competitors are doing? What customers needs are? What pricing works in that region and things like that? There’s all sorts of things that you can find out. Understand what information you have, understand where the gaps are in that information, and then start to explore where you can access it. And then you can start looking at that, and playing with that, and looking at just some basic things, like trends. And that will then help you inform future decisions and future plans, and where you focus your efforts and things. So just do that and then you can start to develop and grow that. So once you’ve understood that, then you can perhaps – you might want to refine it a little bit more – or you might want to tweak it a little bit because it’s not quite giving you the right information that will allow you to make a decision.
Toby: The way you’re talking… it’s something – going back to something Trevor said about – there are new roles to be created. Because that sounds like, that sounds like a full time job.
Angela: Oh yes, quite… yeah. Quite definitely. And this is where perhaps your local university can help you. At the University of Derby we’ve got a Data Science Research Centre, and it’s full of clever – I think we used to call them Mathematicians – but we now call them Data Scientists. Because they are – it’s that sort of skill who can analyse information, collate information, put it into formats and things like that. There is a lot of help out there actually, it is recognised as one of those new emerging sectors, one of those new emerging roles, where the UK has a real sort of USP and core-competence in terms of data science. And so it – and because it is so new to businesses that the government, through Innovate UK and it’s Knowledge Transfer Partnership Scheme, businesses – it’s one of those areas where we’re getting quite a lot of businesses can access funding to take on a recent graduate to help them develop in this area. And develop their new processes or a greater understanding in terms of how they can use the data and exploit it within their business. Because ultimately, whether the data indicates that they need to be developing new markets, or changing the way that they manage their manufacturing process, or things like that – is innovation and knowledge transfer partnership funding is primarily funding to support innovation within businesses. So, you know, certainly if that is an area that you’re interested in if you’re looking at things like that – either go and look at the Innovate UK website, go and talk to your local university and understand how you can get support.
Toby: Thanks Angela. One thing that we did talk about that we will go mention briefly was Brexit, with Trevor. But we talked about being adaptable and businesses needed to change the way they approach things and that comes into that doesn’t it? It’s the way the world is changing. Big data is a new way of approaching information, Brexit we will have to adapt to change with what happens.
Angela: Yeah… and change is nothing new I don’t think, to anyone now. And you know, I think even our forefathers, the industrial revolution and things like that. I think the important thing is thinking about how we as businesses adapt to that change, and how we build resilience in our business model, and our workforce, in order to respond to that. And actually, with the concepts of things like big data, and just the amount of information that is now at our fingertips, through going onto the Internet and things like that – the world is very much a smaller place and so we can be better informed. And actually as long as we’ve got a good plan, and as long as we’ve got good management information, and there’s no excuse now for people not having information. They need to take their time to access it and research and things like that in their busy lives – actually we can make some good informed decisions. As long as we do that, and we have a mind-set, and we have a workforce with a mind-set, that is agile enough to respond should changes need to occur, then I think business are in a pretty good place.
Toby: But that – that is the whole thing about the new mind-set adapting to change, and a new type of workforce. Which is also important, because we are going to have to be looking at how we change the way we work, how business plan out businesses structure.
Angela: Yeah exactly. And Trevor talks about the importance of diversity inclusion in UK businesses, and in some respects this is really important for our future workforce. And we need to think about how some of the under-represented groups who currently exist – particularly in some of our more traditional sectors, like engineering, and construction, manufacturing, - how we actually support and encourage people into those sectors. Because in many respects they have the skills that they’re looking for, they have the values, and that adaptable mind-set and all those soft skills that we talk about so frequently that are needed. But quite often, what we don’t provide them is: the infrastructure, the support infrastructure, or the business model to allow them to move into that sector, or consider a career in that sector. And in many respects we don’t have the role models and that’s really important as well – is that, people, even more so now, don’t want to be working with people like me because work and leisure time is just so intertwined now. Is that, working for a company that has the same values as I have, working in a company where I feel I fit, where I see myself developing a career in there, and having / forming friendships for example, is really important to people.
Toby: Do you have any examples of what you mean by this flexibility in approach and new business model?
Angela: Okay, so let’s think about one that is becoming increasingly more important. So we are an aging population, there is an increasing proportion of people, particularly women, not but necessarily so, who are un-paid carers for parents, for neighbours, for friends. And actually, they have to fit that around a career, so for example, they may not want to work full-time. They may not want to work fixed hours. Now, does that preclude them from being a leader in a business for example? Or undertaking a professional role within a business? You know, how can we flex what we do and how we support these people, and how can we organise our staff to ensure that we can bring in these skilled people into the organisation?
Toby: Depending on the business obviously, technology is such these days that working from home or working remotely in various different ways…
Angela: Yeah exactly. And yet again this is another one where we need to look outside our own business. So, I was recently having a conversation with someone in the north of the region. And they were expressing frustration that they couldn’t recruit staff into a role. And this was a – this want – this was a fairly low skilled role. So I think there was some surprise that actually they couldn’t find people. And actually, when they looked into it, in detail, there was one factor that precluded most of the people who would’ve liked to have gone into that role from doing so. And that was because, many of them didn’t drive, and the buses didn’t start running until half an hour after they had to be at work. So the employer could then go back, have a look and say: well actually, can we change the shift pattern to better fit in with the transport infrastructure that most of our employees require in order to get to work? And the answer was yes – interestingly they started getting applications. So sometimes you just need to look and you just need to understand where am I going to source my workforce from, and what do I need to do to encourage them?
Toby: “But we’ve always had people starting at this time! This is how we’ve always done it”. We need to change that way of thinking.
Angela: Yes, yeah indeed. And it goes back to other interviews where we’ve talked about creating the environment where we have the right people in the business who have the similar visions and values as us. We talked about staff retention and work life balance and things like that. And all these things come into play when we recruit people, and we really need to start challenging ourselves and thinking about – I don’t think any business is deliberately discriminatory. But actually I just think we quite often just run things as we’ve always run them, without really thinking about: if we did things differently, would we attract a different workforce who could help us take this business in its future direction?
Toby: Well I’d like to thank again, Trevor Williams, for joining us on our Inspired Business Podcast. You can catch up with Trevor on LinkedIn or you could go to his website which is trevorfwilliams.co.uk. And of course I’d like to thank Angela Tooley, our business expert who helped us navigate through another area of business: big data. Thank you very much, Angela.
Angela: A pleasure as always.
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Toby: Next time we’ll be talking to Abbi Burns of Darley Dance Productions. You’ve been listening to Inspired Business, a podcast from the University of Derby telling amazing and inspirational stories from businesses in Derby, Derbyshire, and beyond. Please subscribe to the show wherever you get your podcasts. Leave us a rating or review and tell a friend who might also like to listen. Also, if you’d like to be a guest on a future episode of the show please get in touch. You can find contact details and more information about the series at www.derby.ac.uk/inspiredbusiness. Thanks so much for listening, we’ll catch up with you again very soon.
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