Hello bloggers

The showing of the Channel 4 series ‘Undercover Boss’ on Thursday 22 July 2010 was impeccably timed by their TV scheduling team, as it followed neatly after recent Government announcements on public spending cuts and featured the London Borough of Tower Hamlets in East London.

The one-hour programme followed Tower Hamlets Chief Executive, Kevan Collins, as he got back to the floor and had to identify ways to reduce expenditure.

At this early point of viewing I braced myself for another media bashing of the so-called ‘useless’ Public Sector…however I was pleasantly surprised by the unbiased reporting from Channel 4 producers with Kevan Collins, Tower Hamlets and Local Government all coming across very positively. 

Kevan Collins, in my view, presents as a great leader, prepared to listen, and very much in touch with his employees (who are all hard working and dedicated) - even more importantly he genuinely cares about the people of his borough.

The challenges facing Kevan Collins and his staff at Tower Hamlets were vividly portrayed through cameos of work to support older people, homelessness, pest control and market trading - not to mention the daunting strategic fiscal and service delivery issues.

It was not a surprise, but a shame, that I read in the Daily Mirror the following day their reporters pouring cynicism on the production - suggesting the staff were not randomly selected but were all part of a stitch up to make Tower Hamlets ‘look good’.

Mind you, such was the accuracy of the Mirror’s reporting I noticed they had mis-spelt Kevan Collins’ name - I strongly suspect that wasn’t the only thing they were wrong about.

Dean

Hello Bloggers

Did you know the North-South divide phenomenon originates as early as the mid 1800’s…no…1 didn’t either?

It comes from gathering statistical evidence about socio-economic trends in the UK including, at it’s inception, variable rates in marriage (1841-1870) and the concentration of domestic servants in Victorian England.

Broadly the ‘Divide’ is an invisible diagonal line traversing the UK that typifies differences in the UK population including: the generally affluent South compared with the relatively deprived North, higher cost of living in the South compared with the North, and greater unemployment in the North compared with the South; amongst other things.

These observations can often be generalised and do not necessarily foster a spirit of national unity or inclusivity. Recent fiscal predictions concerning public sector retrenchment may widen the chasm, painting a deeper diagonal stripe across our green and pleasant land…a slash across the face of our nation.

Ironically named accountants UHY Hacker Young, project the reduction of public sector finance will be disproportionally loaded against our Northern cities and communities. For example, the predictions include Middlesbrough seeing reductions in public spend of 43%, Liverpool stands at 39% and Newcastle 38%. Compare this with London at 22%, Swindon 20% and Milton Keynes 19%.

Our Northern Communities also have a far higher proportion of the working populous employed in public service - often as much as 70%. Latest gross domestic product (GDP) outcomes offer encouragement with a healthy 1.1% increase in the last quarter, however we have yet to feel the full force of the cut backs in public spending, as well as the increase in the rate of VAT to 20%. Without sufficient and sustained economic growth (see previous blogs - The Beveridge Curve, It’s all about Equilibrium and NIESR headwinds), I have serious concern about the societal impact in our Northern Communities.

In these challenging times I believe we should all be pulling together and breaking down a latter-day Hadrian’s Wall…don’t you?

Dean

Hello bloggers

Professionalese, legalese, journalese, officialese - we all slip into using some form of official language at work but does it really ‘ease’ the situation? I admit I’m probably worst than most as I love the English language and, as several colleagues tell me, I should be re-named ‘Wordsmith’ from Shoesmith.

New research from the United States by author Jason Fried (Co-writer of ‘Rework - change the way you work forever’) provides revealing evidence about the impact of language on customers and of more concern, the implications this has for the reputation of the organisation - in case of the private sector even affecting bottom line profitability. Of course it’s a bit of a ‘no-brainer’ (sorry slipped into colloquialism there) that communication is key to customer satisfaction.

Fried has found the more ‘inhuman’ the language used, the worse the customer experience. How often have we heard a train company gleefully announce “We apologise for any inconvenience this might have caused” when on a bleak  January morn, three successive trains have been cancelled because of the wrong type of weather…? Fried expostulates (I’m so sorry…argues) that in such a situation it would be better received if the announcement was “We’re so very sorry, we really are truly sorry”.

Fried says that language such as “Any inconvenience” is emotionally anaemic and can be perceived as dismissive. Direct, sincere language “I’m really sorry” works better - he contrasts the two different approaches as ‘renting’ and ‘owning’ language - with the latter being better regarded as genuine.

Next time you write an official HR-type letter to an unsuccessful job applicant (see previous blog post ‘I regret to inform you’) perhaps you should take a look at Fried’s research before putting pen to paper?

Dean 

OK Bloggers calm down! Before you think you have another extra-statutory day, or something of that ilk, I’m sorry but I’m going to have to let you down gently…this isn’t going to herald a legitimate ‘duvet-day’, or is it?

The new Coalition Government is rumoured to be contemplating introducing more home working - encouraging employers to allow their employees to work from home one day a fortnight.

Apparently even incentives (yet to be specified) could be introduced to encourage changed work schedules and an increase in flexible hours working. Co-synchronously, plans are been devised for train companies to be asked to review how season tickets operate so the labour force that only work a proportion of the week is not penalised.

Driving (sic) this forward is transport minister Norman Baker. He claims he wants to become the first virtual minister – being apolitical I couldn’t possibly comment. The aim is to ease pressure on the UK’s transport network whilst reducing our overall carbon footprint and Mr Baker hopes to eradicate the spectre of the rush hour through radical measures.

The CBI and Campaign for Better Transport are both in favour. The Association of Train Operating Companies would appear to be less receptive to the idea – no doubt concerned about the impact on revenue that a stay at home workforce might create.

So, do you think the idea will get off the ground, or will it hit the buffers?

Dean

Hello Bloggers

The iconic 1967 film, The Graduate, left an indelible impression on me with Dustin Hoffman’s poor little rich boy, Benjamin Braddock (the naive graduate), mercilessly manipulated by scheming seductress Mrs Robinson, played by Anne Bancroft. Benjamin is a recent university graduate with no well-defined aim in life who gets into a bit of a mess trying to forge his way in the world.

Whilst I can’t attach quite the same degree of dramatic pathos to events 43 years on, the plight of the current UK graduate is , nonetheless, a real cause for concern.

A survey released by the Association of Graduate Recruiters (AGR) on 6th July 2010 reveals nearly 70 graduates are fighting for every job - in contrast with 2006 when it was just 28 competing for a job. Carl Gilleard, AGR, chief executive, comments on the trend of more graduates competing for fewer jobs saying, “A degree doesn’t give anyone a Divine right to a well-paid job and a fancy company car.”

AGR forecast job vacancies are expected to decrease by nearly 7% this year (note my previous ‘blog-worry’ about UK jobs and the stimulation of UK economic growth - ‘It’s all about equilibrium’, and ‘The Beveridge Curve’). The AGR survey also reveals 75% of employers now specify a 2:1 degree as a minimum - because they are flooded by graduate  job seekers.

Duncan Bannatyne, famous entrepreneur and chairman of Bannatyne Fitness, states in the Daily Telegraph Business Section (8 July 2010) ‘Graduates should become a lot more flexible if they want to fit into today’s business environment’.

It strikes me that as public sector services embark upon significant retrenchment and transformation, employers should also become much more flexible in today’s business environment by radical organisational re-design to create entry-level opportunities and career paths for young, Benjamin Braddock-type talent. Are you seduced by this argument?

Dean

Hello blog viewers,

I return this week to the stuttering state of the UK economic recovery, and although GDP for the last quarter showed a better than expected 1.1% increase in UK productivity, I remain worried about the possible dent to consumer confidence with the VAT increase to 20% due next year.

I’ve banged on before in these blogs about the need to kick-start growth in the UK economy as there is much focus on cutting the public sector. Clearly cuts in public spending are already occurring and more are inevitable, but such cuts could place growth in jeopardy – especially as long-unemployment is rising and - in my view - will accelerate with approximate public sector job loss to be at least 600,000 by 2015 according to Office for Budget Responsibility figures.

Recent estimates from the National Institute of Economic and Social Research (NIESR) indicate that chill winds are still cooling our recovery. To illustrate this point a NIESR economic forecaster warns of, “…headwinds, as fiscal consolidation both in the UK and the eurozone restrict growth. There is clearly a risk that this rate of growth will not be maintained through the rest of the year.”

NIESR also caution “Growth prospects in advanced economies could suffer if overly severe or poorly planned fiscal consolidation stifles weak domestic demand,”

In my view much could be done at a federal and local level to stimulate UK economic growth by ensuring new jobs are generated and workforce skills are improved (see Beveridge Curve blog and my comments in Louisa Peacock’s article in the Daily Telegraph Business Section, page 10, Thursday 22 July 2010). A local investment cycle (stimulating growth, leading to gainful employment, reducing benefit burden and re-investing taxable contributions back into the economy) would see those nasty headwinds dying down.

Are you blown away by this argument, or am I just talking hot air?

Dean

Hello Blog-viewers

I was recently on a long haul flight and to pass away the tedium I flicked idly through the film channels and came across ‘The Damned United’. The film was also shown on BBC 2 last night (18th July 2010). The plot concerns Brian Clough’s disastrous 44-days leading Leeds United and his (losing) battle with the team who had developed a strong union under former manager Don Revie. Brian Clough’s abrasive approach and his clear dislike of the players’ style of play made it certain there was going to be friction. The more consensual Peter Taylor, his right hand man, loyally stayed with Brighton and Hove Albion (my team!) and Clough missed him enormously.

The film (for me) was reminiscent of what goes wrong with an off beam management approach. In this case Clough was the personification of macho management and the Leeds United team the obdurate trades union. Something was bound to go amiss.

HR Academics Boxall and Purcell in their seminal 2003 work ‘Strategy and Human Resource Management’ note the anachronistic conflict-driven style of management and trades union relationships in the UK public sector. Granted the book was written seven years ago but I would suggest not much has changed culturally since then. Followers of the press this year will have observed recent 1970’s-type references to a ’summer of discontent’ reflecting growing strain in the public sector employer and trades union relationship - in my view only to be fuelled by the drastic cuts in expenditure, threat to public sector pensions (see last week’s post) and a two-year pay freeze to boot.

Now, even more so than ever, is the time for discourse not disagreement. Public sector HR professionals have a tough task ahead of them with changes and challenges to the employment landscape not witnessed since World War Two - so please…don’t score any own goals.

 Dean

Hello Bloggers…

This week I return to the vexed issue of public sector pensions (see previous Blog post – Looking at a Black Hole).

Radical new proposals from the European Union are being drafted in a 17-page pensions’ Green Paper that appears not to help the UK problem. John Cridland, deputy director-general of the CBI has been quoted as saying the EU paper is “misguided”. All in all if the proposals from the EU are implemented projections estimate this would cost Britain an eye-watering £500bn; with mounting concern about the adverse impact on economic growth. The CBI argue the EU ’one size fits all’ approach does not account for differences in the pension rules across Member States.

Add into the mix the deficit in public sector pensions funding and the problem appears to be gargantuan. A report published by the Public Sector Pensions Commission (7 July 2010) has warned that public sector workers may have to double their pensions contributions. Pensions consultancy Towers Watson estimate a pensions deficit of £1.2 trillion - nearly two thirds higher than official figures released about the shortfall.

The week has seen intense media speculation that the new pensions’ commission led by John Hutton (former Labour defence secretary) will require public sector workers to increase contributions to pensions’ schemes from as early as spring 2011. Civil servants could come under pressure first to increase their contribution rate from 1.5% - as it currently stands. Other options being bandied about include forcing higher paid public servants to make a higher contribution, and closing final salary schemes to future accrual.

Whatever option is chosen by Mr Hutton and the pensions commission tough choices and tougher decisions look inevitable.

Dean

Apologies bloggers…

I couldn’t resist the play on words. As something of a skirmish has been raging in the media this week concerning the 22 June 2010 emergency budget and the condition of the UK economy…the dark clouds of a double-dip recession appear to be billowing our way from across the Atlantic Ocean. Co-synchronously, the state of public sector leadership capability has also entered the fray - see an article by Claire Churchard, of People Management magazine, ‘Leadership Challenge as budget cuts bite’ (page 6 July 2010).

Picking up the nautical captaincy theme, a related question emerges for me about public sector leadership…are we more like Captain Bligh (infamous for his team mutiny) or Captain Cook, intrepid explorer who led his crew to wonderful new discoveries - notching up the first European contact with the eastern coastline of Australia and the Hawaiian Islands?

The Captain leads the team into uncharted territory, taking calculated risk, seeking out new environments and new ideas for the philanthropic good of society - isn’t that analogous to the current public sector leadership challenge?

New research from Ashridge Management Centre (Ashridge Magazine, issue 4, pp 23-25, summer 2010) reflects the current leadership state, albeit the Ashridge Management Index (AMI) covers all UK sectors, comprising of 1,200 senior and middle managers a survey respondents. The survey is longitudinal - having gathered data since 1994.

The results are revealing. Over 50% of respondents expressed concern that top leaders do not spend sufficient time communicating with employees. Those working in smaller organisations showed more positivity that we will achieve business benefits from transformation. Perhaps most telling of all, the AMI shows that those respondents who feel motivated, answered more favourably on any other survey areas including the ability of top leadership.

So do you think we are about to set sail, or are we stranded in dry dock?

Dean

I’ve recently taken up scuba diving (pursuing the PADI qualification) in my spare time (not that there’s much of it!). One of the key skills for a novice scuba diver (like me) is to achieve equilibrium, often referred to as neutral buoyancy. This is an underwater state of suspended animation – neither floating nor sinking and the ideal position for the scuba diver. As I occupied a state of watery suspended animation five metres below it made me reflect on other events this week…as I sought to master the ‘fin-pivot’ manoeuvre and the ‘hover’.

“So what the heck has scuba diving got to do with anything else?” I can hear you say.

Well…as I bobbed along in the deep I thought about this week’s Emergency Budget – 22 June. It seems to me that there has been considerable emphasis placed on cutting the deficit by cutting public service expenditure. Not that I have any issue with this and it creates necessary conditions for re-thinking our whole approach to the provision of public services (see ‘Necessity the Mother of Invention’ blog post). However, I’m not convinced the equilibrium is yet right.

All the balance seems to be tilted towards cutting cost as we sink ever downwards. However, what about growth? Another way to reduce the fiscal deficit is to energise growth. I just hope the VAT increase to 20% doesn’t dent consumer confidence and inhibit much-needed spending so that the economy is kick-started with robust economic growth following.

The idea of using expansionary fiscal policy to combat recessions was introduced by John Maynard Keynes in the 1930s, partly as a response to the Great Depression. Keynes understood the perfect equilibrium between economic cuts and growth.

I’m now off to practice the CESA – Controlled Emergency Safety Ascent. Let’s just hope we come out of the Challenging Economy Safely Affluent (CESA).

Dean