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Sasha Laverick - 24th April 2017

Likely Loans wins Moneyfacts Non mainstream loan provider of the year!

2017 has been an exciting year for Likely Loans. We won our first Moneyfacts award down in London. 10 of us headed down to the Lancaster London hotel to represent Likely Loans at the Consumer Moneyfacts Awards on the 25th January.

How the winners are picked

Firstly a team of industry experts set a criteria that they use to decide which companies offer the best products in each category. It is then over to the consumers who have the chance to vote for their favourite company through the Moneyfacts survey which counts for 50% of the score.

We want to say a big thank you to everyone who voted for us in the Moneyfacts survey. We couldn’t have done it without you, it means a lot to us to know that our hard work and determination to provide the best service and products is being felt by the people we care about most.

Michael Woodburn | Chief Executive - 9th February 2017

Overdraft Charges and Other Nasty Surprises

In the news today, they’re talking about the reality of the cost of overdraft charges and other nasty surprises.

Here is a four point plan to avoid falling in to your overdraft and so falling foul of those charges.

  1. Know what matters – that is the TOTAL COST OF CREDIT. This is the total of all the interest, fees and other charges you will pay over the life time of the loan. Put simply this is the cost of borrowing the money.
  2. Know the charges. Even if you don’t read the Terms and Conditions, read the summary box. That will tell you the interest rate, the fees and what triggers those fees..
  3. Know yourself. With a loan its relatively simple. You make the payments and you are, roughly, fine. Its more complex with things like overdrafts and credit cards. Make a judgement about how much you will pay each month and how often you will miss payments. Then halve the amount you think you will pay and double the number of times you will miss payments. 25 years in this industry has taught me that people are always too optimistic about those things.
  4. Calculate the Total Cost of Credit. On a loan this is easy. For example our product www.likelyloans.com as you move the slider you can see the “Total Amount Repayable” – if you borrow £2000 for 24 months your total repayable (the amount you pay us back) is £2931.36. So the loan will cost you £931.36. For something like a credit card or an overdraft you will have go to on-line calculators and put in your payment amounts (halved) and how often you will be late (doubled).

Should banks do a better job of being clear? Absolutely. Until they do follow my four point plan so you know what you are getting into. Once you know the Total Cost of Credit you make the judgement – is £931.36 worth it, or is it not? Its up to you.

But don’t go in blinded by hope and not knowing the real costs.

Michael Woodburn | Chief Executive - 25th August 2016

How performance related pay crushed my dreams

Spending my teenage years in Macclesfield in the mid-eighties, the height of sophistication was to go to the ‘Chicken Spit’ for a filter coffee. It was positively Bohemian. Or so I thought until I stumbled on the new Costa Coffee at Piccadilly Station in Manchester where I had – wait for it – an expresso. It was amazing. My fifteen year old self felt like Marcello Mastroianni, and the seedy ramp down from the station had become the Spanish steps.

I always retained my loyalty to Costa despite the new burgundy colours, the acquisition by Whitbread and even those god awful machines. Until, a few years ago, I was at one of the four (!) Costa Coffees in Wetherby Services buying my small Cappuccino, when the bored looking lady asked me whether I’d like a pastry with that. As usual, I gave my reflex “no”, when with a burst of candour she said in broad Yorkshire, “oh go on, I’ve got me KPIs to hit”. Part of my teenage self just died. I wasn’t a person, I was just a unit of inventory.

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That, to me, sums up financial incentives. On paper it’s absolutely fertile ground for incentives. She had a simple, measurable task (flog cakes to people who don’t want them) that was largely in her control which is relatively hard to game and she probably didn't much want to do it. Studies show that’s where incentives work best. Costa (or Whitbread) are, of course, getting part of what they want – they are selling more cakes per customer.

But think of the cost: it was 100% clear that the woman didn’t give a toss about me. So I went from thinking of Costa with nostalgia to actively avoiding the place. My loyalty switched to 200 Degrees - Nottingham’s first hipster coffee place where the skinny and/or bearded baristas don’t offer me pastries I don’t want (in fact, I kind of feel like they are doing me a favour by making coffee for me in the first place).

If that happens in something as simple as selling cake, how does the idea of financial incentives (or performance based pay) apply to a company like Oakbrook? None of the preconditions for success really apply – we aren’t doing simple jobs, on our own, with clear results. We are tackling ambiguous inter-related problems which require team work, openness, creativity and where it’s not really clear what success will look like when we’ve got to the answer.”

So how do we implement Performance Based pay in that kind of environment? That’s where its evil-twin Performance Management comes in. What that means is an objective system of assessing individuals’ contributions to outcomes and performance against a competency model ensures that people are banded fairly and rewarded appropriately.

Riiiiiiiiiiight.

We’ve all sat in those rooms, 5 hours in, hearing about how person x’s leadership on project y, was more or less important, than person p’s analytic thinking on project q, wondering if banging our heads repeatedly on the edge of the desk will somehow make the pain less.

And even if all the objective, rational, non-political managers could do this ranking fairly it would still be futile. The process will always leave people dissatisfied and thinking it’s unfair because people have inflated views of their own performance. Of course, you and I don’t, we’re awesome, but those other guys, they aren’t as good as they think they are. In a world where pretty much everyone thinks their performance is somewhere between 75th and top percentile performance, performance management is bound to be demotivating. Either you get what you expected or you get less.

Of course, as with the lady at Wetherby Services, there is massive scope for unintended consequences. If I am being ranked alongside my peers why should I co-operate with them? If I am under pressure to show my performance is that likely to be good for my creativity (do you have your best ideas with your boss looking over your shoulder?).

But what is less clear is whether it has any good effects which might compensate. Most people just don’t have enough personal control over the outcome of a project to make a clear link between their actions and that outcome. The marketing person whose volume goals are missed because the credit analyst restricted policy because the statistical models built by the decision scientists were less powerful than he’d hoped because the data was not in an appropriate state for analysis and anyway which were not implemented in a timely way because the development teams could not deliver them because there was scope creep with the changing covariates because the DBA had not been able to ….. You get the point.

The other stated purpose of allowing good feedback to help the associate develop? Of course, almost the worst time to give someone feedback is in the context of them being judged and in most cases found wanting. In fact, my long suffering ex-boss, Brian Cole, agreed just to give me the rating and the bonus rather than torturing me with the feedback. Now that is leadership.

Thinking about the reasons why you would do performance management how many of the reasons hold:

  • It’s supposed to motivate staff to work harder but really demotivates most people and if it does motivate people, it drives them to showboat and be political.

  • We’d like it to provide platform to push people’s learning and development, but we then couple that with judgement which makes the person least likely to be receptive.

  • We want people to develop as individuals, but in order to assess them, we create a normative competency model which tries to make them all fit a mould.

  • Critically we want to improve our organisational performance and the evidence that it does so is actually very sketchy indeed.
  • In reality, we don’t seem to be meeting our objectives with this costly and painful system

    Oakbrook really tries to learn from mistakes – both our own and more broadly. So we have the answer to this problem? Well, not so much. However, we do have some thinking.

    Firstly, we have tried to decompose the problem.

    1. How do we ensure that our people are developing to their full potential
    2. How do we rapidly identify people who are struggling and either help them succeed (or candidly recognise that they aren’t a good fit for Oakbrook – it’s in no one’s interest to prolong this overlong)?
    3. How do we reward people for their efforts without creating divisions and widespread concerns about unfairness?
    4. We do think it’s a big step forward breaking these apart into separate processes. The big behemoth of Performance Management is trying to serve too many masters – it’s almost bound to fail, so splitting it apart makes it much easier to think about and manage.

    We are developing our answers to all of these, but I’d be very interested in hearing anyone else’s thoughts.

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    Michael Woodburn | Chief Executive - 20th July 2016

    What? A Start-Up without a Vision?

    I run a start-up which, whilst a few pref shares short of a unicorn, is really doing very well. We are growing by about 5% or 6% a month, with revenue (and risk adjusted margin) growing even faster, we are doing some smart analytics, we’ve built some great tech and we have top people with a brilliant culture (you can see our behaviours in the photo!)

    So why aren’t I guest of honour at the Fintech Entrepreneurs Club/Hipster Coffee Joint in Shoreditch? Sadly, I lack two key attributes. I can only grow a wispy beard. And, worse, I don’t have a Vision. Actually, Visions annoy me.

    There are brilliant, powerful motivating Vision Statements out there. Unfortunately there are only about five or six of them globally. The rest of them sound like they are retrofitted to existing company strategy and are written in corporate-ese by a committee of middle-aged guys in chinos. Guess what? That is exactly how they were written. I’ve been in those conversations and they go like this:

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    Head of HR: “We need a vision to inspire our people”

    CEO: “Errrrm, How about ‘We want to make the world a better place’?”

    CFO: “But we aren’t a charity”

    CEO “True, ‘We want to deliver superior returns to shareholders by making the world a better place’”

    Chief Counsel: “We should specify what we do”

    CEO: “Good Point. ‘We want to deliver superior returns to shareholders by making the world a better place with personal loans’”.

    Head of Product Development: “But what about my projects? They are about diversifying away from loans?”

    CEO: “Course, spot on. ‘We want to deliver superior returns to shareholders by making the world a better place with personal loans, credit cards and other consumer lending products.”

    CMO: “That’s not very customer friendly is it?”

    CEO: “Yes, Customers, of course, we love customers. We want to deliver superior returns to shareholders by making the world a better place with customer centric, financial solutions”

    Head of HR: “I thought our people were our greatest asset?”

    CEO: “Course yes, customers and employees. People. Very important. ‘With our exceptional teams, we will deliver superior returns to shareholders by making the world a better place with customer centric financial solutions”.

    CTO: “It’s a bit 20th Century isn’t it?”

    CEO: “True, we are a cutting edge Fintech unicorn, I forgot. How about ‘The cutting edge tech developed by our exceptional teams will deliver superior returns to shareholders by making the world a better place with customer centric financial solutions’”.

    COO: “Most people work in Ops trying to create great service. This won’t speak to them.”

    CEO: “The Frontline? They’re the last people we want to neglect. ‘The cutting edge tech developed by our exceptional teams will deliver superior returns to shareholders by making the world a better place with customer centric financial solutions delivered with a wonderful service’”

    Head of Compliance: “Bit of an over-claim, isn’t it? Also what about our ethics, regulators expect to see that.”

    CEO: “Credibility is key. Thank you. ‘The cutting edge tech developed by our exceptional teams will deliver superior returns to shareholders by making the world a somewhat better place (within the constraints of our market) by creating ethical, customer centric financial solutions which meet genuine needs as defined under outcome 2 of TCF and a service that is adequate and aspires to be better’”

    Head of HR: “Love it, great, lets get the posters printed.”

    My experience – both personal and vicarious – is that start ups don’t actually begin with a vision: they begin with an observation or a question. The question is usually some variant of “”why does this industry work like this?” A great local company HDD started with the question “why can’t you find out if you will get approved for credit without getting a mark on your credit file?” The answers to this question helped them genuinely change the way the market worked.

    Oakbrook started with the question: “Why is risk based pricing so different in Credit Cards and Personal Loans?” I’d argue this is a better starting point than a vision of “Lets re-invent Personal Loans”.

    The power of the question is that it forces you to actually understand what goes on in the market. Actually there are reasons why the markets evolved differently – some good, some bad, some which still apply and some which are legacy. But posing the question forced us to actually understand, to find the answers. Then knowing those answers prompted new questions: “Why do loans even exist, aren’t they just a subset of credit lines?”; “How can you give customers more control of their borrowing?”; “What are smarter ways of funding our business so we are not forced into certain market segments?”, “What data can we leverage and how can we leverage it better to make better lending choices?”. All of these questions have driven a better understanding of our product, market, processes and what drives success.

    We’ve been evolving our overall question, currently it’s a bit broader than where we started “Why aren’t there better borrowing choices for people outside the Banks’ core customer base?” I agree its not as inspiring as some vision statements.

    But I do love the attitude that sits behind it: its humble, honest and ambitious. Three of my favourite qualities. We’re asking the questions because we don’t know the answers. Yet. But its going to be a load of fun trying to find them.

    1st April 2016

    Expanding finance firm is latest to move into Nottingham's 'Silicon Roundabout' tech hub

    An expanding financial firm has become the latest business to move into a multi-million pound technology hub in Nottingham.

    Oakbrook Finance has moved its operation from Lock House, in Castle Meadow Road, to Accelerate Places Nottingham, in Wollaton Street, following a deal overseen by Innes England.

    The hub, which is owned by investment firm Blenheim Chalcot, has 22,000 sq ft of office space spread across four floors and has been billed as Nottingham's equivalent of Silicon Roundabout – a hotbed for tech companies and software developers in London.

    Sarah Marriott of Oakbrook Finance, said: "We are moving to Wollaton Street to optimise our working and taking up great new space as part of an exciting network of like-minded businesses with Accelerate Places Nottingham.

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    "Oakbrook will have the space and the support to continue its ambitious plans for growth.

    Read more: Entrepreneur Mark Onyett accelerates tech hub plans with £3m Nottingham deal

    "Innes England has provided us with the service and support to make the move from Lock House – and onto larger premises."

    The firm, which was set up in 2011 to provide finance to Home Learning College students, moved into Lock House less than two years ago.

    But it has experienced significant expansion during that time and needs additional office space to accommodate its growing team, which currently stands at about 60 staff.

    In a three-way agreement overseen by Craig Straw, director at Innes England, Lock House will now be home to contractor Willmott Dixon, which has taken over the space previously occupied by Oakbrook Finance.

    Mr Straw said: "Oakbrook is a rapidly expanding business and quickly outgrew the space I acquired for them at Lock House – less than two years after taking the space following its initial expansion.

    "This was a hugely popular space and there was very strong competition from potential tenants looking to move in, which is indicative of the lack of good quality space available within the city.

    "We were very pleased to be able to agree terms with contractor Willmott Dixon, which has moved its Nottingham operation from Phoenix Park into the city.

    Read more: Construction firm Willmott Dixon moves Nottingham operation to southern gateway

    "Accelerate Places Nottingham was a perfect fit for Oakbrook and will allow them the opportunity to continue to grow their business in an exciting environment."

    Oakbrook Finance is now one of six firms - also including Bizfitech, Liberis and Cronofy - based at Accelerate Places Nottingham, which has ambitious plans to attract the top talent in the region within its space.

    In addition to accommodating businesses owned by Blenheim Chalcot, it features large break-out areas and collaborative spaces, as well as setting aside work space for external members and companies.

    Mark Sanders CEO of Accelerate Places, added: "We're delighted that Oakbrook Finance are joining us in Nottingham and becoming part of our community of high growth, ambitious, technology-enabled businesses.

    "We look forward to seeing their future success and the contribution they can make to our community."

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    Press Release - 9th February 2016

    Oakbrook Finance shortlisted for National Employee Award

    Oakbrook Finance is thrilled to announce that it is a Finalist in the UK Employee Experience Awards 2016.

    The Awards recognise and celebrate the delivery of exceptional employee experience in businesses across the UK. Oakbrook Finance is a Finalist in the Employee engagement category of the national Awards.

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    Finalists in each of the 20 categories will present their entry to a team of specialist Judges at The Park Plaza Riverbank, in London on 4th May 2016. Winners will be announced during a gala luncheon on the day.

    The UK Employee Experience Awards are owned by Awards International the operators of the very successful UK Customer Experience Awards and are presented in partnership with Customer Experience Magazine, Cranfield School of Management and Awards International.

    Neil Skehel, CEO of Awards International, said the standard of entries for 2016 has exceeded all expectations.

    “We are delighted to announce the Finalists of the UK Employee Experience Awards. The quality of entries has been outstanding and it is fantastic to see how businesses throughout the UK are delivering outstanding employee experiences. We would like to congratulate all of the Finalists and look forward to celebrating and rewarding their success at the Awards ceremony.”

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    10th March 2015

    Nottingham plans £40m rival to London's Silicon Roundabout - creating hundreds of jobs

    Hundreds of jobs could be created by a multi-million pound investment to create a new technology hub in Nottingham. The team behind one of the city's most successful technology firms wants to develop Nottingham's equivalent of London's Silicon Roundabout. They have already put £40 million into setting up three new businesses in an office building on Wilford Street. But they want to buy bigger premises to enable the firms to grow while also attracting other technology companies which require similar skills.

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    News of the investment was due to be announced by Nottingham City Council later today at MIPIM, the international investment exhibition in Cannes. The project is being led by Mark Onyett, a former Capital One executive who went on to launch TDX Group – a Nottingham tech company later sold for £200 million. He said: "We want to create something big here which could have 500 to 1,000 people.

    "History tells us that this is a great place for building businesses – we can find great staff; the presence of the two universities is a big help, there is a core of data analytics companies and our experience has been that if you can find the right people here they will stay loyal and stay longer because of the quality of life."

    Council leader Councillor Jon Collins said: "Nottingham is rapidly gaining a reputation as the city for growing financial technology and data analytics businesses." It was in 2004 that Mark Onyett and a group of colleagues launched a business in Nottingham called TDX Group. A decade later they sold the company for a cool £200 million. Now a partner in Blenheim Chalcot, a firm which invests in other companies, Mr Onyett is building business again. This time it's not one but three businesses he hopes to grow. And, like TDX, he's chosen Nottingham as the place to do it.

    Mr Onyett says he has chosen Nottingham because it's become a national hotspot for a particular kind of technology talent: bright young people who develop software. This talent pool has grown up because of the presence of a group of businesses who need their skills. They include Experian, Capital One, TDX itself, Ikano bank, HD Decisions, Insurance Initiatives and others. These programmers are also used by medical technology companies like Parexel and Exco inTouch. Mr Onyett says there are now so many of them that the time is right to try to build something similar to London's Silicon Roundabout – where a cluster of technology skills has encouraged other firms to move in. He said: "We started three businesses fairly recently, we've got around 50 people already and we are looking to double that.

    "The big thrust for us is to build a hub with a bunch of businesses. We want to create something big here in Nottingham which could really move the needle for both us and the city."

    Mr Onyett says Nottingham is the right place to do it because it has not only the right skills but the right lifestyle.

    He said: "Our experience has been that if you can find the right people here they will stay loyal and stay longer because of the quality of life".

    "London is a place where it's easy come, easy go for people, but when you're looking to build a business you want people to stay together."

    The three companies which Blenheim Chalcott is backing are Oakbrook Finance, which specialises in consumer lending; Sequensis, which develops specialist software for financial services firms; and Bizfitech, which is developing software aimed purely at lending to small businesses. Mr Onyett said: "We are putting £40 million into those three businesses. We have room for around 65 people where we are, so space is already getting tight.

    "We would like to buy a building which could make a kind of home for innovation in Nottingham."

    "Could we have 500-1,000 people in this space? Quite possibly – places like Silicon Roundabout and Shoreditch (in London) become like a virtuous circle."

    "People hang around there because they know that lots of cool stuff goes on."

    "This is definitely happening in Nottingham and if we can get a real buzz around coding, analytics and how you use it – and around a building which is branded for it – then I think people could come and take leases."

    Mr Onyett is looking to base the tech hub in a building which offers 20-30,000 sq ft of space to begin with. His property search is being led by Matt Hannah, a director of Nottingham property firm Innes England. He said: "This is a very positive inward investment requirement for Nottingham offering an opportunity to develop and retain home grown talent." Nottingham City Council will also put the plans in the spotlight at MIPIM, the international property development and investment exhibition taking place this week in Cannes.

    They will be revealed at a dinner tonight where the audience includes representatives from Oklahoma in the USA, a state whose tech cluster includes a Google data centre. Welcoming the venture, council leader Councillor Jon Collins said: "Nottingham is rapidly gaining a reputation as the city for growing financial technology and data analytics businesses.

    "A cluster of big-name companies in the sector can only be enhanced by the establishment of up and coming businesses.

    "The applications of these technologies are huge, and being the location of choice in the sector will be of immense value to Nottingham's economy.

    "We are working closely with Mark and his team to turn this bold vision into a reality ."