BUILDING A MODERNISED FINANCE FUNCTION



We all want to build one but how?

Some very interesting perspectives on the modern finance function which are applicable over a wide range of sectors. It is critical that budgets are known to key decision makers and service delivery personnel well in advance and that the budgets fit into a realistic medium term financial planning envelope. Budgets must also be wisely spent in those areas of policy that will make a real difference to people’s lives and that is where the marriage between good financial management and the delivery of effective policy outcomes needs to be at its strongest.

 

We all need to be excellent financial managers and we also need to ensure that we do add value to the operation and delivery of key services to the population. That will involve us providing excellent advice and support to our colleagues, empathising with their challenges and providing them with innovative solutions to the really difficult choices they currently face.

We must however be honest with ourselves as well. Have traditional finance functions always delivered advice,support and understanding in the best way possible to key support delivery units? Often resourcing reports for monthly monitoring are presented in ways which are more convenient to the finance person rather than the person responsible for the delivery of a key service. We must move away from that particular mindset and embrace the business partnering\innovation role with gusto. This is not easy for everyone to master.

 

In my role working with finance practitioners for many years, they frequently are more at home with the technical aspects of finance and much less so with the business partnering\innovation dimension. This must change. If we were to ask financial managers which element posed the greatest financial management challenge we all will face in the coming months and years it certainly will not be IFRS, collection fund accounting or even zero based budgeting.

 

The high leverage of UK businesses, the state and individuals is a huge problem but perhaps what tops all of these are the financial and policy issues we will face as a society resulting from an ageing population. In 2011 in the UK there were 9.75m people aged 65 and over and 3m people aged over 80. In 2031 this is predicted to rise to 15.25m people over 65 and 5m people over 80. The modern finance function will need to be geared to addressing the financial and policy fall out from issues like social care yet perhaps within our existing mindsets, financial management is frequently more strongly linked with the ideas of stewardship and safeguarding rather than business partnering and innovation.

 

 Trying to convince some finance practitioners that issues like social care and its future consequences are more financially real to society than the technical accounting aspects so many of us know and love so well, is often a struggle in itself. The future of the public and not for profit sector will look very different in the medium term with the proliferation of smaller units like CCG’s, academies and trusts. As expert financial managers we will need to demonstrate to these units that we can make a real difference to their performance and their impact on society. If we cannot do this then why will these newly structured units engage with us? Financial managers will need to respond in new ways and add value to society.

 

We must ask ourselves honestly as individuals how will we ensure that we will be in a position to transform ourselves to demonstrate our value not only to ourselves but to society as a whole. -

PAYDAY LENDERS - A JUSTIFIABLE BUSINESS PRACTICE?

No-one should suffer the consequnces of abusive and excessive interest rates

Under Islam a charge for lending money to a third party is deemed to be usury. Usury being defined as an excessive and abusive charge for lending money onwards. Under the Quaran it is immoral to charge interest to people who you are helping from a charitable motive or who are in trouble and need assistance. Indeed it is often the case that this money will not be re-paid and the lender should not expect to get it back. This position was very similar under Christianity until Henry the 8th in 1545 ensured that an act of parliament was passed which allowed interest to be charged on sums lent. This revolutionised the use of rates of interest in the English speaking world.

 

In the early Christian Church, St.Thomas Aquinas argued that charging interest was like double charging a borrower. He is repaying you the sum he borrowed from you and you are charging the borrower a fee for using the money as well. If you buy a bottle of wine for a price you do not pay the supermarket an extra fee when you drink the wine. However, life is not as simple as that. There are crucial differences here between dealing with money and dealing with physical products namely, time and opportunity. 

 

By lending my money to you I am not going to have that money to use for my own purposes and I need to be compensated for that. I could have used that money on a project of my own or indeed I could have invested it in a bank to earn interest - so I want something for it. That is all well and good up to a point -- but you as a lender must make a decision as well. Are you lending to someone who is in a position to pay you back or are they not in a position to do so? If it is the latter then you are making a very poor business decision as well as a questionable moral decision. People who go for these loans are often but not always very desperate. Sometimes people need to get some temporary cash and can afford to be stung for a while and they get out of their crisis. For others, the payday loan is the start of a nightmare experience of stress, financial crisis and loan shark fuelled bullying. Interest rates shoot up and compound upwards many hundreds if not thousands of percent with little prospect of ever being repaid. Even if lenders do need to be compensated for lending to third parties there seems to be little justification for interest rates of this magnitude. The lenders come back with the argument that interest rates are so high because the transactions are so risky (Excuse me, doesn't that make my point?). We have legislation to curb monopolies and their excessive dominance of a market -- this needs to be extended to protect the vulnerable suffering from lender activities which do not bear any resemblance to the market structure of interest rates. Public authorities have challenged contractors when they have been overcharged and the same should apply here. The problem is multiplied because the people at the sharp end just do not properly understand the consequences of taking out these loans for themselves.

 

What can be done? The churches and mosques need to become more involved -- we need to extend credit unions and offer far more financial support and financial education to the vulnerable. The CAB has a crucial role to play here as has the Government's money advice service. These loans cannot take the place of properly constituted lending and other form of legal financial support to those in need.

 

The Muslim footballers at Newcastle took a brave stance in condemning their club for being sponsored by one of these lenders and Justin Welby the Archbishop of Canterbury is leading the way in this area. There is also a role for local and regional government to influence and drive this agenda in a positive way.

 

We need to convince people that the practise of charging these huge interest rates is not only morally wrong but is also bad from a business sense, especially if these loans are not or can never speedily be repaid. The consequences for society have not yet been assessed but there are better ways of addressing these issues.

 

SYRIA -- A MORAL AND ETHICAL DILEMMA

Not a terribly nice man - But would his successor be any better?

The decision to go to attack Syria is essentially a moral and ethical one. What evil has been done and who has done it and what punishment do they deserve and who should punish the perpetrators of this evil?

First of all -- is there overwhelming evidence as to the guilty party in this? Probably there is but what should be done?

The take on this can be traced back to the principles of a just war which were stated by a Doctor of the Church - St Thomas Aquinas.

1. War must be waged by a properly instituted authority such as a state ( Or even the United Nations?)

2. War must be waged for a good and just purpose -- not to serve the interests of a state or group of states or for self gain or for self interest.

3. A just cause means that a wrong that has been done must be righted (territory returned) or if that cannot be done then the perpetrators of that wrong need to be punished. But punished proportionately

4. A peaceful solution must be the ultimate intention.

An authority must fight for the just reasons it has expressly claimed for declaring war in the first place. There are rights to act in self defence and to punish a guilty enemy. War can be pre-emptive if a tyrant is going to attack you and you have incontrovertible proof of that. The use of more force than is absolutely necessary would constitute an unjust war. Civilians and prisoners of war need to be treated properly and that means without cruelty and with measured compassion. Interestingly the people have the right to oppose a state that wages an unjust war.
These principles are summed up in a modern way by the Catechism of the Catholic Church.

- the damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;
- all other means of putting an end to it must have been shown to be impractical or ineffective;
- there must be serious prospects of success;
- the use of arms must not produce evils and disorders graver than the evil to be eliminated

Probably on the basis of the latter 2 points -- The British Parliament has voted no to action in Syria. Will the US Congress follow suit?

Terrible things have happened in Syria -- but ultimately do we know whether any of our military actions will lead to something better?

 

Unless we are certain that military action will improve the lot of the oppressed we should think very carefully before we act.

OUTSOURCING UK PUBLIC SERVICES - HOW IS IT WORKING?

Outsouring in the UK - Are we storing up future problems?

 

I have just come across a very interesting report by Social Enterprise UK about this challenging issue. It is not a new report but one that I have missed and perhaps others have missed too, so I wish to draw out some of the key issues which we all need to think about.

 

In July 2012, the Financial Times said: ‘The collective growth of the outsourcing sector – dominated by FTSE 100 giants G4S, Capita and Serco – means Britain is in the grip of the biggest wave of outsourcing since the 1980s.’

 

Few can argue that in times of economic crisis, the value of every pound of public spending needs to be maximised however this report states this is not necessarily happening. The Government appears to be buying services from a narrow range of large companies and the complexity of its relations with these companies means that it has little room for manoeuvre or leverage over them. The research found that in critically important markets, private sector oligopolies are emerging, where a small number of companies have a large share of the market. Firms with large stakes in multiple public service markets are too big or too complex to fail.Does this sound a bit familiar to you? For example if a company provides different services to the government and one of these is not being delivered properly - the government cannot risk playing hard ball with that company for risk of affecting the other services the company provides to the government. Where is the potential control over the outsourcing service delivery outputs and outcomes?

 

  

Many of the smaller providers, often the social enterprises and charities that successive governments have marked out as ideal providers, are being forced out of the process. A narrower range of choice of providers is very likely to lead to higher costs for the delivery of outsourced services, if not in this contract round then maybe the next?

 

Complex business arrangements and a lack of information as a result of commercial confidentiality make it practically impossible to hold many service providers properly to account. When providers do fail to deliver, they often go on to win more business. This is a symptom of market failure as logically this should not happen. If public money is drawn out of the local economy to fund multiple subcontractors (who are not locally based) and other non local investors then what are the effects on our local area? How will that local area business rate base be affected?

 

 

for health services, and policing. The majority of people polled for the report had never heard of Atos or Serco,yet these firms and others like them, are receiving and are responsible for many billions of pounds of taxpayers’ money. The public are more likely to have heard of G4S, possibly due to media coverage of its failures in the run-up to the Olympics but that is just the tip of the iceberg. The private firm Atos is in receipt of around £3bn of public money but who has ever heard of them?

If these contracts are let to companies who drastically reduce pay and conditions then there will be associated welfare,economic and public health issues which would never have been factored into the contract bidding evaluation process. Debate about a level of a living wage becomes more relevant here.There is much evidence to show that private firms are placing vulnerable children and adults in parts of the country often many miles from home, but where care is cheapest for the firms to deliver it. This creates a strain on public services in already poorer boroughs and has a great human cost as well. So what at first appears on paper to be a cost saving becomes a driver for future increased costs in terms of improving care for these vulnerable people.

When problems do arise in cases such as the closure of Southern Cross as a result of complex financial deals designed to maximise financial gain, taxpayers are forced to pick up the pieces. The problem of privatised gains and socialised losses that we became familiar with during the banking crisis has many parallels in this process. In future, local authorities will have to bear the service reponsibility if these service providers fail.

A crucial element here is that public understanding of the effects and practices of outsourcing was found to be very low. In public polling carried out for the report, only one in five people knew that the majority of children’s homes are now owned by private companies. Respondents were much more likely to think that the state is still the main provider.

Public support for shareholder profit being made from public services is low.In polling for the report, two-thirds (66%) of adults said it is unacceptable

There should be much more debate on the outsourcing issue - and one of the report's recommendations is an oversight body for public sector outsourcing. Perhaps the PAC can have play a bigger role in this area?

 

Please read the full report at:

 

http://www.socialenterprise.org.uk/advice-support/resources/the-shadow-state-report-about-outsourcing-public-services

OUR BUSINESS LEADERS -- HOW WELL LOVED AND EFFECTIVE ARE THEY?

 

 

Is this Leader as popular and effective as he thinks he is? - Image from the Economist

 

Research by Sebastien Brion a professor at IESE has demonstrated that leaders greatly overestimate the support they receive from their subordinates. In group experiments carried out, those people primed with high power were convinced that those primed with lower power were on their side and supported them enthusiastically. In another group he found that lowly primed participants made alliances against the powerful even if it may not have been in their financial interests to do so.The powerful were blissfully unaware of this. They thought they were universally loved. This is a mistake that historical figures from Julius Caesar to Adolf Hitler have often made. Are we surprised? In an interesting aside when a boss tells a joke to a subordinate the boss loses the ability to discern whether the subordinate really finds it to be funny or not. This is a crucial element. Bosses do need to be aware of this bias and they do need to give employees the chance to say what they think -- but this is seldom the case unfortunately.

 

Some underlings see it is in their interest to support powerful leaders who are in situ because they see this as simultaneously advancing their own position in the organisation.Leaders then misinterpret this behaviour as support for their own actions and vision when in reality it is just self seeking on the part of the subordinates.We get to a position where the underlings will not publicly criticise their leaders out of fear for their own position and the leaders misconstrue the silence of their subordinates as acquiescence and support for their own actions, even when these actions put the organisation at risk.

 

It takes a brave underling to argue against the position of such a leader -- but that is precisely what must be done in many cases for the wider good of the organisation as a whole. The actions of some leaders need to be thwarted for the wider good but unfortunately few people have the courage to do this and later on down the line the whole situation of the organisation often ends in tears which very often could have been avoided.

 

Similar things can be said about the effectiveness of leaders. How many times are we told to focus on our strengths but according to " Kaplan and Kaiser" that can also lead to problems.

 

How often times have we seen being forceful turn into bullying or being decisive turn into being pig headed? A leader who is nice and all things to all men can develop into an indecisive person who is really no good for the organisation. People are often very comfortable in practising the skills which got them where they are  now -- but they do not acquire the new skills to move them forward.

 

If someone gets your former position when you move up can you resist the temptation to micro manage them even though you should be concentrating on your new job?

 

Part of the problem with the 2008 crash was that many of the banking leaders had been traders who were more used to taking risks -- rather than planning for the long term. This produced the obvious consequences. Leaders need to receive feedback on their performance in an open and honest way and be prepared to act on it.

 

Leaders like Richard Branson and even Margaret Thatched played only to their strengths but this does work in certain circumstances of crisis and when immediate action is required - though possibly less so in the long term when these preures have abated.

 

Leaders need to be able to build bridges as well as break down walls. It does take a very rare skill of effective judgement to realise when you need to pull out all the stops and when you need to moderate some of your approaches.

 

Being smart is always a virtue but according to Kaipa and Raida some of the most recent business scandals have involved very smart people who thought they were bullet proof and outside the normal rules covering decency and integrity, this is never the case.

 

Leaders need to be effective and they need to possess good judgement -- which unfortunately is not always readily available in large quantities.

 

Please read the attached articles from the Economist to learn more.

 

 

http://www.economist.com/news/business/21578990-leaders-need-learn-beware-their-strengths-too-much-good-thing

 

http://www.economist.com/news/business/21579031-powerful-overestimate-support-underlings-whos-behind-me

 

 

Look Again - A Blog by Grovehall: ORGANISATIONAL CULTURE - FIND OUT WHY IT IS CRITICAL FOR YOU

Look Again - A Blog by Grovehall: ORGANISATIONAL CULTURE - FIND OUT WHY IT IS CRITICAL FOR YOU

ORGANISATIONAL CULTURE - FIND OUT WHY IT IS CRITICAL FOR YOU

What is the culture of your organisation and why it matters.

I used to think that all this organisational culture stuff was tosh and the stuff of dreams and illusions but I have been proved wrong - not for the first time. Work by the Pacific Institute shows that organisational culture can be measured and that it does matter for organisational performance. Organisations grow, decay or are in a state of inertia. States of inertia can quickly lead to decay whereby an organisation starts to lose market share profitability and product quality -- We need to ensure that organisational culture does not contribute\drive such decay or else we are all in trouble.

 

Research undertaken by the Pacific Institute demonstrates that some 70% percent of organisations are defensive and only 30% are constructive . Whilst only around 30% of the workforce are fully engaged in their organisations 70% are not. Just imagine what we would get with full engagement?

 

Defensive cultures can be passive or aggressive. The main characteristics of a passive defensive culture are:

 

An approval culture -- Which means that conflicts are avoided and interpersonal relationships appear superficially calm but there is no constructive differing or expression of ideas. There is always a need to seek everyone's approval.

A conventional culture -- Organisations are traditional and everyone is expected to conform and follow the rules

 

A dependent culture -- Organisations which are hierarchically controlled and non-participative.

 

An avoidance culture -- Organisations which fail to reward success but do punish failure. This negative rewards system forces people to push responsibility to others and therefore to avoid blame for failure. New initiatives are avoided

 

Does this sound familiar?

 

An aggressive defensive culture is characterised as follows;

 

An oppositional culture - Members gain status by being critical oppose the ideas of others and make safe but ineffectual decisions. If its not their idea then it will go nowhere fast.

 

A power culture -- A non-participative approach where power control is rewarded and workers hold back from making any other future contributions because they are disenfranchised. Self promotion is the best approach

A competitive culture - You must win and therefore someone else must lose and this torpedoes effective joint working. Internal competition is more important than what your external competitors are doing

 

A perfectionist approach -- Everything must be perfect even if it does not need to be or resources should be focused on other priorities which really require this more. nothing is ever good enough

 

Does this also sound familiar?

 

Defensive organisations are over managed and under lead. They eat up overhead costs and reduce final profits considerably. Interestingly -- the passive defensive approach is probably more dangerous to an organisation in the long term because people do not realise what is happening to them.

 

We should be heading for a constructive organisational culture whose features include;

 

An achievement culture -- Always recognising success and achievement.

 

A self actualisation culture -- Always value creativity and quality over quantity. This leads to high level innovation and product quality.

 

A humanistic culture. Organisations which are managed in a person centred and participative way. Organisations are supportive and constructive.

An affiliative culture - Colleagues are friendly and open leading to constructive working relationships and a pride in working for that organisation

 

Those organisations which move more to a constructive organisational culture -- can increase their bottom lines by 5 or 6 times those which do not.

 

The trick is to try and move your organisation or at least the part of it that you are responsible for,into a more constructive type culture. The challenge is that maybe all of your organisation will not come with you. However you can show by example, that your bit of the organisation is performing well in a constructive organisational sense. Hopefully other parts of your organisation will see the light?

 

THE FUTURE STRUCTURE OF PUBLIC SERVICE DELIVERY

Dear Colleagues

CIPFA Procurement Network is promoting this course

Great if you could attend.



http://www.cipfa.org/Events/D/delivering-future-public-services-20130625

ONLY 3 STEPS TO BUSINESS SUCCESS?

 

 

Can we effectively distil the approaches to business success?

 

What if all the business and management wisdom could be distilled down to just a few steps to make your organisation a success? - Would we be interested in the result ? Of course we would.

 

Recent Research by two Harvard Academics has tried to do just that. Raynor and Ahmed undertook a statistical survey of 25,000 US companies that  had traded on US stock exchanges between 1966 and 2010.They measured performance as a return on assets (ROA), a metric they argued reliably measured management efforts rather than changes in business expectations, the latter being deemed a primary source of shareholder returns. They identified  344 exceptional companies - 174 whose ROA fell in the top 10% of all companies studied and 170 long runners whose ROA fell in the top 20%-40% of those companies studied.

 

After repeatedly trying to isolate measurable behaviours that were associated with success the  authors moved away from what companies did to how they made their policy choices -- how they thought about their challenges.

 

They soon identified that these successful companies operated in adherence to the following rules;

 

1. Better Before Cheaper -- In other words they always competed on differentiators other than price.

 

2. Revenue Before Costs -- Always prioritise increasing revenues over reducing costs

 

3. There are no other rules -- So change what you do to ensure you follow rules 1 and 2.

 

So that is it? The answer to all of our business problems? -- Well it is easy to identify the seeds of some very interesting approaches to making your organisation truly great.

 

We do need to become concerned with the quality of what  we do -- perhaps sometimes we too easily cut our expenditure without trying to identify new markets and revenue streams at the same time

 

Perhaps there are some lessons for us all here?

GREAT LEADERSHIP -- MAY I HAVE SOME PLEASE?

Do We See Enough Good Leadership?

Everyone is talking about leadership and how important it is. Organisations suffer from "poor leadership" when their performance dips. Everyone expects people (you and me) to offer excellent leadership to them so they can improve. We are often asked ourselves in our personal and work lives to "show more leadership" to get things moving. Leadership is a buzz word right  now -- not to be confused with management -- management is getting people in your organisation for whom you are responsible to ensure they fulfil their objectives. Leadership is something more but what exactly is it? How do we try and get some of it? I am convinced we do not see enough good leadership around,however it is sorely needed.

 

Do we need to be charismatic to be good leaders? Well it does help - but we need to remember that some of the worst leaders in the 20th century ( Hitler, Mao and Stalin for example) were charismatic with a magnetic and forceful personality - they lead their people in a certain (bad way) -  but were they good leaders? They were good in leading people but in the wrong direction and to disaster -- so  their skills were used in a wholly malevolent manner. So perhaps one of the key elements of good leadership -- apart from charisma and the ability to talk and make good speeches and communicate well - is integrity - to do the correct thing. Unfortunately integrity isn't like charisma or eloquence, it isn't very sexy but it is crucial to good leadership no matter what other people say.

Peter Drucker, the great management thinker opined on integrity as it relates to leadership in the following way.  "Subordinates know in a very short time if a person aspiring to leadership has integrity. They can forgive someone a mistake or even incompetence but not a lack of integrity."

 

A fish rots from its head and any leader must have integrity, His\Her character will be taken as a model  by subordinates in the organisation -- it must be a good model. Would you like your son\daughter to work for this person and learn from them? That is regarded as the ultimate test by Drucker.

 

Leadership means having the ability to lift the performance of your employees beyond what they themselves would expect to achieve. You need to have a vision to move your organisation forwards and a strategy to achieve that. However you must also have the ability to take your people with you and they must believe in your vision and also believe in you. They do not have to like you but they do have to respect you. Getting ordinary people to do extraordinary things is a true sign of excellent leadership. It is very difficult to define but easier to see in practice.

 

Winston Churchill in WW2 gave excellent leadership to the free world. He was thrown up by a crisis,interestingly before WW2 he was seen as a maverick and someone whose time had gone - yet in a crisis situation he did express fantastic leadership coupled with great communication skills. Lech Walesa - an electrician became leader of Solidarity and helped democratise a communist state and indeed the whole former Eastern block. Both these are examples of leadership which made huge differences to people's lives.

So what characteristics do we need to possess to aspire to excellent leadership? Well amongst the main ones not, in any particular order are the following:

Managers - manage processes whilst leaders lead people - So leadership is people focused.

Leaders have a positive outlook and a future vision they aspire to.

Leaders make a commitment to communicate with their employees and keep them in the picture.

Leaders inspire employees to share their vision and deliver outstanding performance.

Leaders give a commitment to support and facilitate their employees.

Leaders are optimistic and confident in their own abilities and the abilities of their people and organisation.

Leaders are decisive and make decisions as soon as they can.

Leaders promote and deliver imaginative solutions to organisational problems. They do not shy away from those challenges

 

Last but not least -- Leaders must have integrity and be honest and fair in their dealings with everyone.

 

What about the future? As organisations grow in complexity we may need to move to a model of collaborative leadership where leadership is vested in different people\groups at different times within an organisation and in different circumstances. The organisation will need different levels of leadership and will no longer be able to afford vesting leadership in just a few hands. New models like the mutual approach will help in this process.

 

Have managers got all or even some of the above characteristics? - Well we may have some but certainly not all and certainly we need to work on all of the above, to transform ourselves from managers to leaders. It is a constant journey but we all need to work on it and the journey to effective leadership never stops.

 

The world unfortunately does not benefit from an abundance of great leadeship. We need to keep striving to improve that for everyone's sake.

CONVERSATIONS YOU MIGHT DREAD HAVING?

How can we resolve challenging conversations?

There are often those conversations that you know you must have both in business and in life that you know are going to be difficult, that you know you need to have but keep putting off. There is always a good reason to delay, at least it seems to you that there is a good reason but in reality, just like going to the dentist it needs to be  tackled. So what might you be able to do to enthuse yourself,calm your nerves and move forward with the conversation you know you need to have.

 

There is some really excellent advice on this from the new Andy Bounds book on communications entitled "The Snowball Effect". The first thing to try and address is to look at the future in these conversations and not go back to a past version of the blame game. This is not a very easy way forward but nevertheless is critical. We also need to find out what makes the other person tick and what their priorities are - -usually try to identify more than one priority the other person might have. We then need to mention and acknowledge past blockers but to move on from them straight away. We do not need to get distracted by them -- resist the temptation to do so and move forward. We need to rapidly move into the Next steps phase where we need to identify the benefits to the other person of progressing the situation and then offering them two or three tangible options to resolve the issue. Giving them options will probably reduce their ability to say no to a single solution and increases their likelihood of agreeing to one of the options.

 

In essence you will need to envision the outcome of any difficult conversation before you start it. Try and identify a range of options that will get you what you want to achieve.

 

It is then a must, to try and script the "challenging conversation" you are going to have in the following stages:

 

1. Your focus on the future introduction -The future will be better let's take things forward.

2. The questions you will use to find out their key priorities - I want to focus on your priorities and how things can improve.
3. Acknowledge the past blockers but move on - (Perhaps we can avoid or minimise this bit?)
4. Next steps - -- explain the benefits of an agreed way forward for both parties and then offer two or three options for your colleague to hopefully agree on one of those options.Offering more than one option will make it more difficult for your colleague to reject any solutions as this would be seen as a bit of a negative approach on their part.

In the most challenging of conversations it is always helpful to confirm by e-mail what has been agreed and by whom.

Then that is it? -- Well not always as life is never as easy as that - but at least the next time you have to tackle a challenging conversation,hopefully you will be better prepared for success?

Let's hope so -- I'm already preparing my script.

ENCOURAGING MUTUALITY AND PLURALISM IN ORGANISATIONS - OUR BEST HOPE FOR THE FUTURE?

 

Mutuality- Our best hope for the future?

 

A healthy civic society and a degree of healthy responsible pluralism within organisations needs to be the way forward for society. This is the only way that new ideas emerge to drive us forward into the future. The alternative to this pluralism is a very centralised stalinistic approach where the centre holds on to old ideas and does not let go or even listen to what change is needed. One absolute and unchallenged set of ideas and processes can never be an effective substitute for a society or organisation that generates new ideas in a pluralistic way,which will need to move us forward in this new millennium. Yet some organisations are very guilty of succumbing to this very centralist ideology and it does not become them or indeed any of us as well.

There is now increasing discussion around moving economic and social policy forward more hand in hand with the wider interests of society. According to the latest Respublica publication on mutuals in society- " Diverse and devolved ownership, power and capital, alongside user, consumer and employee participation in governance and decision-making, are principles that we can all agree with. Unlike any other policy agenda, mutual, employee-owned and co-operative models, and their underpinning ideals, have attracted cross-party support and have been promoted as foundational players to our public institutions, private services and businesses, not just in this Government’s lifetime, but the ones that have preceded."

The position that many organisations find themselves in, especially in the not for profit sector - is that they are facing a position of cuts in public spending and lower economic activity. The workforce in those organisations is in danger of being dis-incentivised as it does not have much of a stake in the organisations that it works in. Traditional salary and reward mechanisms mean that the workforce can expect minimal rewards for the the future, unless the workforce is given a greater stake in the organisations in which it works. Those businesses i.e. like John Lewis which do have more of a mutual approach have held their own in this economic climate.

 

Is greater mutuality the answer, please read the latest Respublica publication on this at:

 

http://www.respublica.org.uk/item/Making-it-Mutual

 

This will give you all some new insights into the way that our organisations can develop and grow in th elight of the huge economic challeges we face.

 

 

WHEN THINGS FAIL IN AN ORGANISATION - HOW DO WE PUT THEM RIGHT?

How can we spot it early and fix it early?

Many organisations have problems and challenges that need to be resolved but they are often faced with inertia and a lack of will power to tackle things and do what is right to get the organisation back on track never mind about moving and growing it in the right direction. Just getting things back on an even keel would be a start.

 

Things can go wrong in a dramatic sense with a dip in demand due to recessionary pressures which cause profit and cash flow issues, redundancies and closures. Organisations can face huge cost hikes in raw materials and energy resources which do not help the situation. The direction and management of the organisation can be faulty and not tuned into what needs to be done to change direction. These are the dramatic issues which we can all recognise fairly easily -- which need to be addressed in a very focused and direct way within a very short time-frame or else things go under pretty quickly.

 

There are are however other problems within organisations which manifest themselves gradually  over a long period of time. These are not so easy for people within the organisation to recognise because perhaps the pace of change within that organisation is glacially slow. Levels of profit; revenue, employee morale and innovation have remained fairly constantly low over a long time and although the organisation is still commercially successful, it has been overtaken by a large number of its peers. Most people in the organisation do not perceive there are any real issues at all because the organisation has done what it has always done and done it to the standards it has set itself in the past. Any persons within the organisation who try to identify any potential issues with the direction of the organisation are shouted down or more probably ignored -- seen as weirdos or mavericks who are just causing trouble and why isn't everyone happy. It is this gradual manifestation of certain problems and issues over time which I believe is the most dangerous for an organisation. Why? Because it is so difficult to recognise by those within that organisation - they do not see it coming and the accumulation of these unresolved issues leads to a worsening of organisational performance and perhaps ultimate failure. Visible crises are also challenging but at least most people can recognise them as such and there is at least some unity of purpose in trying to resolve them.

 

Theodore Roosevelt was reported to have said, " Do what you can,with what you have,where you are."  Problems arise when people do less than what they are capable of doing or are not capable of doing what they were initially thought capable of doing or they misjudge the timing of doing the correct thing or they take inappropriate action at the wrong time. People who have been promoted to a higher level within the organisation have achieved this usually on the basis of their potential not always on their past achievement,indeed their past achievement may not indicate that they are capable of doing the new job they are thrust into. From the military sphere, there are certain characteristics which are listed by the author Norman Dixon which should be recognised within organisations facing serious problems and challenges:

 

Serious waste of human resources

Fundamental conservatism in clinging to out of date ideas and past glories

Tendency to reject information which they find unpalatable or conflicts with their pre-conceptions of reality

Indecisiveness in making decisions

A tendency to underestimate the enemy and any challenges faced.

Undue readiness to find scapegoats

Failure to exploit a favourable situation

Full frontal assaults at the enemy's strongest point

Lack of reconnaissance

Suppression or distortion of news from the front - to maintain morale and security

 

Do you recognise any of these factors that might compound problems and challenges?

 

What can we do about the above? We need to learn from our mistakes and minimise incompetence by having rigorous training and selection processes. We also need to minimise carelessness and over confidence as well. A large degree of realism is necessary in that the reality of slow decline and lack of problem resolution must also be recognised as well as the headline grabbing crises. In the end an organisation can die a slow death without the key challenges being addressed.

 

The Tom Peters analogy of the frog being put into a bucket of boiling water is particularly pertinent here. The frog being a cold blooded animal doesn't realise it is being boiled to death until its too late. Let's ensure our own organisations do not meet a similar gruesome fate!!!

INNOVATION - CAN WE DELIVER IT?

 

How can we become more innovative?

 

 

Top directors in organisations always look for innovations and innovators. They want something that will make a huge difference to the organisation's performance.How can the game of the organisation be successfully changed to move it forward apace? How might they help us to do this? Some ideas are indeed innovative in terms of the organisation itself -- but to be commercially successful they must appeal to the wider market in the sense that people wish to purchase or at the very least partake in that innovation. Therefore the innovation should not just seem like a good idea to us but a good idea to the market place as well. Too often we look at innovations just through our own eyes and not the eyes of others who they will ultimately affect and who may ultimately purchase them.

To bring a new innovatory idea to the fore, takes a lot of guts and perseverance - One has to be ready for ridicule and criticism -- but one has also to be thick skinned and determined -- The flow of innovatory ideas can never stop because the life blood of an organisation will be cut off if this happens. Innovation starts with an idea which needs to be nurtured,cared for and developed We need to always look at how and if the idea might work; not criticise the idea and\or the person who comes up with that idea. The latter is sadly frequently the case in organisations and the organisation cannot afford to de-rail people from their innovation track as this could prove to be catastrophic.Intelligent directors will know that the majority of ideas will not come to fruition but a few of them could be winners and that is all we need, just a few winners!

 

Companies like Google and Microsoft encourage their workers to think the unthinkable and that is partially why they have been so successful. In the modern organisation there is often not enough reflection and thinking time. A lot of effort is focused on getting the present reporting as correct as possible. Indeed people spend so much time focusing on the current reporting approaches that they devote little time to thinking about the future and the innovations that will need to inhabit that future. Not an easy task but it needs to be done.

 

Successful innovation in an organisation requires a person to possess,a mixture of creativity, common sense and the ability to get things done. Without the latter, nothing will ever happen no matter how wonderful and brilliant your ideas might be. Individually you have to have a clear sight on what you wish to achieve,get support,deflect\nullify criticism and keep the momentum going. That is how an individual might do it but what about the organisation itself. Is it geared up to innovate regardless of what your Director says?

 

Does your organisation have any or all of the following characteristics?

 

1. A well organised and freely flowing information stream between all parts of your organisation.

 

2. Close and frequent joint working between different parts of your organisation usually of a lateral and not vertical nature.

 

3. Top Directors who approve of and do not fear innovation.

 

4. Managers with the creativity and time to develop and drive innovation.

 

5. A culture of positively encouraging innovation.

 

6. A tradition of working in teams and sharing the credit for successful ideas.

 

Sharing credit is important as there is nothing that would stifle future innovation as much as an individual or group claiming exclusive ownership of an innovation if that claim did not reflect the truth. The real innovators would hide their future ideas for fear of them being stolen by internal colleagues and might even hawk them to more sympathetic competitors. Please give praise for innovations where it is due - that is the best recipe for success.

 

Does being innovative put your organisation at greater risk of failure? Well innovation does involve some measured and calculated risk taking -- but it does not equate to risk taking per se and this is very important to underline. Innovators are excellent at spotting opportunities that no-one else has exploited and this culture of horizon scanning and opportunity identification is key here. Such a process should be hard wired into your organisation's business planning approaches. It is much more difficult to do this if the aforementioned characteristics do not exist within your organisation.

 

This process can be risky however failure to innovate is even more risky - especially in these turbulent times.

 

We must all become more opportunity focused and it must be in our organisation's interests to help us in our endeavours to do this.

 

Wil our organisation help us?

 

 

THE 5 MAIN PUBLIC SERVICES CHALLENGES WHICH WILL STILL BE RELEVANT IN 2020?

How many of these will still be around in 2020?

This short video from Sir Bob Kerslake the head of the civil service describes the main challenges UK Public services will still be facing in 2020.

Do we agree these challenges are correct?The 5 main challenges still facing public services by 2020.

 

CONFLICT IN AN ORGANISATION IS IT ALL BAD?

 

 

We must get productive results from stand offs like this?

 

They used to say that a wedding in Liverpool was never the quite same without  a good punch up and so it is with conflict which expresses itself in many ways. Though I wouldn't recommend that your next works team meeting finishes in a mass brawl - though that could make it a bit more interesting than normal -- perhaps the plenary session of your brainstorm does need a bit of livening up. 

 

Conflict (fight,struggle,disagreement) is not necessarily all bad - one needs clashes about ideas,beliefs and ways forward to ensure that all possibilities are aired and discussed. Conflicts should be out in the open if they are to be addressed and ultimately resolved. There is nothing worse than bland agreements which are designed to keep the peace at all costs. That just leads to more frustration and problems in the long run as nothing is really resolved and situations fester. Some organisations shy away from any form of conflict at all costs - challenges against people and groups are deflected and it becomes the challenge itself that is the problem and not the problem that the challenge was trying to address in the first place.

Conflict can be productive and helpful but it needs to be managed to provide results that will challenge the way an organisation acts and thinks. Conflict can be between individuals and between groups. In an organisational sense - group conflict can be about:

1. Differing views of what the objectives of the organisation should be.

2.Differing views about how the objectives of an organisation should be achieved.

3.Differing interpretations about what is and is not appropriate behaviour within an organisation.

4. Differing interpretations about how a group's opinions are expressed, formulated and indeed what the particular group does or does not stand for in an organisational context.

The focus in this blog is about inter group conflict - usually easier to resolve than individual conflicts where individual personalities and how they interact with each other are usually the key factors.

How can we try and resolve group conflict within an organisation?

 

The first way is for groups to co-exist in a calm way with each other - groups learn to live with each other and to communicate much better with each other than before. Toleration of each others views is encouraged. The second way is to compromise in some way which will give everyone the impression that there is no right or wrong answer and that everyone is right to a degree - no-one is at fault at all and no-one is to blame. These first two approaches can work but rarely if ever do they address the long term problems of an organisation if there are radical issues which do need to be addressed and resolved. Indeed these approaches can give a sense of false security that everything is fine and that nothing really needs doing because on the surface at least - there is an appearance of respect and mutual understanding. Perhaps these approaches are just short term expedients designed to keep the peace for a while and in that sense they are often successful within this context.

 

If there are radical changes which objectively have to be delivered within the organisation - then these first two approaches can cause dangerous inertia in the light of significant external and internal change pressures. If an objective resolution to the conflict is required, then the application of problem identification and solving techniques is necessary to ensure that the respective groups identify and discuss a whole raft of issues which will address their inter group conflicts - not only must this discussion take place but an agreed alternative conflict resolution path must be taken for the good of the organisation as a whole. This is not an easy approach and requires professional facilitation and management to ensure that conflicts can be resolved and an organisation moves forward -

 

No-one said it would be easy - but avoiding the problem solving route, although at first appearing as an attractive option ( because no-one loses any face?) can in the long run mean a much more grave position for your organisation. The temptation to refrain from solving inter group conflicts should be resisted if you wish your organisation to have a longer term future.

 

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POINTERS TO MANAGING OUR STRESS

 

Stress - How we might be able to cope?

 

Stress is the bete noire of many of our lives, it can cause us to lose our health and our sanity if we let it do so. So what is stress? In our world of cuts and pressures we are all exposed  to such a variety of work demands- some short and some long - our e-mail in boxes overflow with information and demands and we must try and cope. Some form of pressure is desirable for everyone -- we do need to be challenged with new and interesting work -- doing the same groundhog day job all the time also becomes stressful as people become bored and lose hope in their futures - stress is a reaction to the pressures and challenges we face. When there is a gap between our ability to handle a situation and the tools we possess to handle it, then that results in physical and mental stress. Our perceptions of people and events are also very crucial to the stress process and need to be managed.

 

The categories of our stressful existence can be characterised as follows;

 

1. Time stress -- Getting yourself worked up about time deadlines for specific job

 

2.Anticipation stress -- Worrying about the outcome of an event which has not yet happened

 

3. Situational\Encounter stress - Being in a situation where you feel pressurised by the situation itself or by an individual or group of people's behaviour towards you.

 

The causes of stress include the following but I don't want to go into them too much as guess what -- it will become too stressful:

 

• Working conditions and workload
• Role conflict and ambiguity
• Coping with change
• Relationships with subordinates and colleagues
• Work and family life balance
• Job accountability,status and security
• The culture of the organisation in which you work.

What can we try and do to cope

 

1.Build good relations with your boss and your work colleagues as much as you are able

2. Read e-mails three times a day; morning, lunch and evening time-- E mail is not an instant messaging system -- people will ring you if they need you.

3. Use the phone more.

4. Clarify your job role and objectives with your boss -- iron out ambiguities.

5. Make time for yourself and your partner and family.

6. Exercise more and find a hobby you enjoy doing.

7. Do not agree to loads of new tasks and extra work - focus on priorities and offer to help later when your time is freer. "I'm really glad you asked me but at the moment I have a designated project I must finish, perhaps we can discuss this later."

8. Plan your working day using time management

9.Be realistic about your job goals and abilities - work on your weaknesses

10. Prioritise your work and delegate tasks to others (but not your strategic decision making role)

11. Accept that you will be unable to change everything -- just change the things you can change -- often very difficult to accept.

12 Build alliances and friendships that will help you through any issues.

13. Try to be optimistic and take time out to relax and reflect

 

This may need you,me and everyone to adapt their behaviour to achieve this  and we do need to plan that adaptive change.

Something that is stuck on my wall from Paul McGee the Sumo Guy - is always important to me, regarding any stress issue\challenge you might face and the points are as follows;

1. How important is this issue on a scale of 1 to 10?
2. How important will it be in 6 months time?
3. Is my current response appropriate and effective?
4. How can I influence or improve the situation?
5. What can I learn from the situation?
6. What positives can I draw form the situation?
7. What will I do differently next time?

One other thing, please ensure that the way you try to cope with stress does not become as stressful as the initial stress itself. That would only be self defeating and of course very stressful.