2
BUSINESS
Suddenly, uncertainty is
back as the emergence of
a new Covid variant
threatens fresh lockdowns
and economic disruption.
Jill Treanor reports
There is
plenty
to
worrry
about
W
hen Paul Leech turns
on his trading screens
on Monday morning,
he will be scrutinising
early price movements
with more intensity
than usual. The
co-head of global equi-
ties at Barclays had
spent Friday fielding
calls from clients worrying about the
implications of the new Covid variant,
omicron, with the screens around him
flashing red as share prices plunged.
On Friday, the FTSE 100 endured its
biggest fall in 18 months — 266 points, or
3.6 per cent, to 7,044. Global stock mar-
kets tumbled, and oil prices dropped by
10 per cent. In an illustration of the anxi-
ety gripping the market, the Vix, the
so-called fear index that measures volatil-
ity, surged by the most in ten months.
While there had been no panic on Fri-
day, when the markets open on Monday,
Leech is braced for more volatility.
“What we’re hearing from investors
and clients is that people don’t feel they
have enough information at the moment,
and would rather wait to get more infor-
mation before making bigger investment
decisions — particularly those who are
looking for a pullback in equity markets
to invest again,” said Leech.
“The opening of markets on Monday
will be watched closely. People will be
looking for information about how it [the
new variant] has spread. Our expecta-
tion is that markets will be volatile for the
next week or so until we have more clar-
ity,” Leech added.
Until Friday, markets had been ebul-
lient, even if there had been some con-
cern about impending interest rate rises
to curb inflation, as well as new lock-
downs being imposed in parts of Europe
— even before the new variant had been
detected.
The emergence of omicron — desig-
nated a “variant of concern” by the
World Health Organisation on Friday —
brought the vaccine-inspired market
rally to a dramatic halt.
But whether that turns out to be just a
pause, or the start of another protracted
downturn, will be determined in the
coming days as virologists give their ver-
dict on the spread of the variant and the
effectiveness of the vaccine in curbing its
toll on human health.
Omicron has transformed traders’
sentiment. Its effects were magnified as
the all-important American markets
were closed on Thursday for the Thanks-
giving holiday and were open for only
half a day on Friday. Trading was thin and
the most senior traders were away fromof gratitude and ensure that every
opportunity to say “well done” is
spotted and that colleagues know the
company is grateful for their
contribution. It’s the easiest way to make
money and have happy customers.
While we miss some opportunities to
do this in our business, we have a range
of ways to say “thank you”. The key
incentive for our leaders is to get a good‘T
hank you” is a phrase
rarely used in business.
But being grateful should
be the norm, not the
exception. Giving praise
and telling colleagues how
much we appreciate their
contributions should be on
our to-do lists every day.
It also makes commercial sense:
happy and engaged employees perform
better and tend to be more loyal. The
best antidote to dissatisfaction is
thanking those around you.
Gratitude, not pay, is the strongest
predictor of how happy people feel at
work, how quickly they make friends
and how easily they deal with hardship.
Feeling grateful is wired into our biology.
— it builds a bond with those around us.
The increasing popularity of gratitude
journals — where you regularly write
down experiences of the feeling — shows
how relevant it has become.
Primates sharing food for their mutual
benefit has evolved into humans being
grateful for acts of kindness, and in turn
feeling motivated to reciprocate with
more kindness. As human brains
developed, selfish people were
identified and shunned, and it became
an evolutionary advantage to show
gratitude and build long-term
relationships with others. You can see
where the phrase “you scratch my back
and I’ll scratch yours” comes from.
Scientists have proved that people
shown gratitude are happier, more
satisfied with life, sleep better, have
stronger relationships and suffer less
from depression, addiction and
burnout. This extends to their jobs. If
you work long and hard and get no
thanks, it can create negative thoughts
and poor performance. But within
corporate cultures, we quickly recognise
where we’ve been wronged, yet are
often reluctant to celebrate success.How do employers fix this? It’s not as
simple as setting up a gratitude
department to make sure that anything
amazing is identified and rewarded. It’s
about leadership style and how much it
is engrained within a company’s culture.
Most businesses pay bonuses after a
good year, and everyone, to varying
degrees, gets a lick of the spoon. This
assumes that everyone is motivated by
money and is happy, once a year, to
receive a cheque from the boss. But what
happens on the other 364 days, or when
the results aren’t quite as good?
I like the story about a chief executive
who walked around his office and
factory every day. Before setting off, he
would put five small pebbles in his right
pocket. Whenever he praised a member
of his team, he transferred one of the
pebbles into his left pocket, making sure
every pebble had been transferred
before he returned to his desk.
It’s the leader’s job to be the directorscore on their happy index — the annual
feedback from their team on how they
feel about their leadership. Those who
score badly rarely stay in the role long.
They know the best way to have
happy teams is to show gratitude for
great turnover, amazing customer
service and supporting the business
when things don’t go to plan. To do this,
they need an armoury of tools.
The most effective way to dish out
praise is with a piece of paper and a pen.
A handwritten letter, posted to a
colleague’s home, is a personal way of
setting out how much their actions have
been appreciated. When I receive a
letter or an email from a customer
detailing how great a colleague has been,
I, too, send a handwritten letter — not
just to the customer but also to the
colleague, with a copy of the message in
a nice frame. My average is 30 a week.
Symbolic ways of saying thank you
extend to a range of badges we hand out,mostly worn on aprons and lanyards. I
got the idea after a day in the Arkansas
home of Walmart. I took a tour of its
museum in the middle of the town
where founder Sam Walton opened his
first shop in 1950. There was a whole
wall full of different examples of badges
that “associates” had been given over
the years for doing something
exceptional. While some may see it as
trivial, I’ve learnt never to
underestimate how much people
appreciate hard work being recognised.
Our colleagues’ favourite reward is a
simple scratch card. We have created
our own cards, with small financial
prizes — as well as “a meal out on James”
(which has to be at least £50), a bottle of
their choice and my favourite, “the next
sale is yours”. Everyone likes to be
appreciated, whatever they win.James Timpson is chief executive of
Timpson GroupWhy I send 30 handwritten letters every week
In corporate
cultures, we are
often reluctant to
celebrate success
TECH TEARAWAYS
6 Michael Dell and the late Steve Jobs
had their differences, but they had in
common colossal comebacks to the
tech giants they founded.
Jobs had a vicious power struggle
at Apple — it is easy to forget that
the founder was fired from what
was, until recently, the world’s
most valuable company. Forced
out in 1985 after his plans to oust
then-chief executive John Sculley
were exposed, Jobs pushed his
way back in when Apple bought his
new computer
company, NeXT, in- He went on to
deliver revolutionary
new products from the iMac to the iPod
and, finally, in 2007, the iPhone — which
has helped make Apple one of the most
powerful companies in history.
Michael Dell never entirely left the
firm he started in a University of Texas
dorm, but took three years out as chief
exec from 2004. As Dell lost market
share to HP and Wall Street demanded
successor Kevin Rollins’s head, he
took back the role, began a string of
leveraged buyouts
and mergers that
turned it private
and then public again
— and made him a
$55 billion fortune.BOUNCING
BACK
A few plucky founders and bosses have
fought to regain their empires — and won.
Katie Tarrant reports on the comeback kids
PRESS BARON PRESSES ON
6 Paul Dacre is back. After less than
three weeks away from the Daily Mail
publisher, he has been reappointed
editor-in-chief of DMG Media.
The move awards Dacre, 73, advisory
oversight of the Mail, Metro and i titles
three years after he ended his 26-year
tenure as Daily Mail editor.
It follows the ousting of Dacre’s
predecessor Geordie Greig, who was
replaced by close ally Ted Verity days
before Dacre returned to his kingdom.
The decision to return to his former
employer of 42 years is perhaps no
surprise after an “infelicitous dalliance
with the Blob”, as Dacre described his
bid for the chair of regulator Ofcom.James Timpson
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took btheir desks for a long weekend, exacer-
bating the volatility.
In the space of the 24 hours after the
variant’s discovery in southern Africa
was announced, markets became less
convinced that the Bank of England
would start to increase rates from their
historic 0.1 per cent low next month amid
caution about the prospects for global
growth if new lockdowns are imposed.
Neil Birrell, chief investment officer of
Premier Miton Investors, said the same
had happened to expectations about the
Federal Reserve’s intentions in America.
Only on Thursday, the markets had been
pricing in an interest rate rise next June,
and he and his colleagues had wondered
whether it might come earlier. “Now it’s
priced in to September,” he said.
He thought Friday’s market moves
were not a “one-day concern”. “There is
plenty to worry about,” said Birrell, who
manages £350 million invested in his
diversified growth fund.
“One thing is perfectly clear: if we go
into some sort of lockdown, or lockdown
measures, that reduces economic activ-
ity and it reduces it immediately. We’ve
seen that before. That is a genuine con-
cern,” said Birrell.
When Britain went into the first coro-
navirus lockdown in March 2020, the
impact was immediate and painful. Brit-ain’s gross domestic product collapsed
by the most in 300 years as production
came to a standstill.
But by the time Boris Johnson told the
public to stay at home on March 23, 2020,
the stock market had endured the worst
of its ride. From mid February, as the cor-
onavirus started to spread from China,
the FTSE 100 had crashed from 7,400 to
below 5,000 on March 23, when it started
to rally again. Russ Mould, investment
director at investment platform AJ Bell,
said that the Covid-19 bear market —
when shares fall more than 20 per cent
from their peak — was one of the shortest
on record, lasting 66 days.
The discovery of the vaccine in late
2020 put a rocket under global markets;
earlier this month, Wall Street was post-
ing record highs. But the FTSE 100 has
yet to regain its high, recorded in January
2020, of 7,675 — despite numerous
attempts. Friday’s market moves pushed
it to its lowest level in seven weeks.F
riday’s rout followed a pattern seen
during the first lockdown. The
shares that plunged were casualties
last year. They included cruise ship
operator Carnival, down 16 per cent;
airport and railway station snack-seller
SSP, also down 16 per cent; airlines Wizz,
easyJet and IAG (owner of British Air-
ways), which was down 15 per cent; as
well as holiday firm Tui, hotelier Whit-
bread and BP. The obvious winner was
home-delivery company Ocado, which
rose 5 per cent.
“It does feel like an action replay of
February and March last year — only
investors will be hoping the damage is
not as severe — from a public health per-
spective as well as from the narrow view-
point of share prices,” said Mould.
“The few share price gainers on Friday
were firms whose business models
proved well suited to helping people
through the first waves of virus lock-
downs: home delivery firms, companies
that offer online entertainment and con-
tact with like-minded communities; val-
ue-conscious retailers; [pet] specialists;
and support services experts.”
Simon French, economist at invest-
ment bank Panmure Gordon, spotted the
same Covid pattern as he turned on his
screens on Friday morning: “It’s very
much how markets reacted [last time].”
He too is cautious about how the mar-
kets will behave on Monday. They like
information and certainty, French said.
“We’re not going to have the information
you’re going to need to say, ‘Friday’s
move was massively overdone.’ ”
At consultancy Capital Economics, the
experts covering the continental Euro-
pean markets had already been rethink-
ing their economic growth forecastsbecause of the restrictions
being imposed in Austria,
Belgium and the Nether-
lands. But Ruth Gregory,
senior UK economist at the
firm, had not been running
the red pen through her fore-
casts for the UK because it has so
far avoided new restrictions thanks
to its high vaccinate take-up.
The new variant could change
that. “The news means that the
downside risks to the UK economy have
suddenly become real,” she said. “The
chances of a higher number of Covid-19
cases leading to more consumer caution
and/or more Covid restrictions have now
increased.” Members of the Bank of
England’s rate-setting monetary policy
committee — including governor Andrew
Bailey and independent members Cath-
erine Mann and Michael Saunders —
speak this week and their views will be
much sought after.
They too will be watching the flow of
information about the new variant and
the ability of pharmaceutical companies
and scientists to get ahead of its impact
on human health.L
ate on Friday, Moderna announced
it was testing three vaccine boosters
against the variant. “The mutations
in the omicron variant are concern-
ing, and for several days we have
been moving as fast as possible to execute
our strategy to address this variant,” said
Stéphane Bancel, Moderna’s chief execu-
tive. CNBC reported that South Africa’s
health minister had said vaccines were
still effective in preventing severe Covid
from the variant. Calum Semple, who sits
on the Scientific Advisory Group for
Emergencies, told the BBC: “This is not a
disaster, and the headlines from some of
my colleagues saying ‘this is horrendous’
I think are hugely overstating the situa-
tion.”
Yesterday, the first cases of omicron
emerged in Britain. For market watchers,
this week will be about the thirst for new
information. Leech at Barclays said:
“There might be good news that the vac-
cine works well — and markets can rally.
So you can have volatility in both direc-
tions.”The Omicron
TUMBLE
It feels
like an
action
replay
of last
March