Hunkering Down...Then a Fright!

I always enjoy the end of the year. I make it a rule to stop working by 23rd at the latest and not to start again till at least the 3rd Jan. There's something about the ritual I like, the mid-winter break to refresh, refuel and go back to base.

This year's Christmas has been enhanced by the final purchase of a car, something about which, with my mild OCD tendencies, I was taking too much time and energy in the research. I located target vehicle up in Leeds so popped in after a very pleasant lunch with superblogger/Tweeter Rob Greenland. After a protracted but friendly negotiation I emerged ten grand poorer but with a three year old Ford people-carrier that down south would have cost a grand more.

With its blacked-out rear windows and 'panther black' metallic paint, it looks kind of like a bullet-proof taxi, designed perhaps for a developing world politician. But I love it - and love the fact that I didn't pay over the odds for it. Three years business and family motoring for me then I will palm it off to my missus as a the local runaround till 2020.

That out of the way, I am settling down to the peace of pastoral Suffolk. I live in a quiet village just south of Bury St Edmunds but it feels well out of the way. I can go running for ten miles round here without seeing anything except hedgerows and fields.

My peace today was disrupted a bit when my boy, Wilf, woke up with breathing difficulties. He's had a bad cough for days but this was something else. The GP's first words were "He may have pneumonia and I might need to admit him to hospital'. My face dropped. Within an hour we were on the Xray machine at the West Suffolk and wondering which of us would be doing the bedside duty on Christmas Eve. It turned out that the lad has a very nasty chest infection which could turn to pneumonia very easily but he's been given super-strength antibiotics - and sent home with us - with strict instructions to take him straight to hospital if he takes a turn for the worse. Poor little lad doesn't know what's going on - but he's comfortable and, I think, improving a little.

Couldn't fault the NHS today. We got an appointment super-quick on the electronic system run by the Swan Surgery - one of these large GP practices you get these days - and from there we got booked straight into Xray and I got a call from my GP early afternoon telling me what was happening. My wife used to babysit for our doctor when his kids were small. Bury St Edmunds is like that. People tend to stick around. This is one reason, I venture, why the place feels like it works. Had we been living in parts of London or inner city Birmingham, I doubt we'd have had such an easy time of it.

My son is feeling well enough now to be demanding my attention so its goodbye from me till...probably 2011. Thanks for reading this year. Hope it's been worth your time.

Is Nick Boles MP right to call for 'chaos' in public services?

You may or may not have caught the Cameroon outrider Nick Boles MP opining in recent days about the creative beauty of chaos within public services. What he was saying was that you need to remove most of the institutional processes involved in the planning of public services to make the vital Great Leap Forward we are all seeking.

I have some sympathy with this view, particularly since I have become a Councillor. The modus operandi of local government, and indeed the whole public sector, often resembles what I imagine Czechoslovakia was like circa 1982. Just replac iron-ore or butter with adult social care and you've pretty much got the same meeting. Lots of preoccupation with 'co-ordination', joining up' etc, not much on delivering the right service at the right time in the right way. That somehow gets lost in the mix.

So I have some time for Boles and his world-view. We do need to throw out a lot of the outdated nonsense which passes for good planning and governance. However, we also have to be bright about this. Planning is necessary. So too is Governance. We need enough grit and wagons to salt the road. If Nick Boles slips on the ice and bangs his head, we need to ensure that somebody gets to him quickly enough and takes him through the right procedures - ones he knows he will receive whether he falls over in Westminster or Walsall.

There is, whatever anybody says, a role for planning, even in the internet age. I am currently reading an amazing book about the development of management thinking in America called 'The Puritan Gift' by William and Jim Hopper. The book charts the way Puritan values of thrift, hard work, honest and, yes, good planning, gave America the management model through which it established its 20th century dominance.

By way of example, the book details the meticulous planning that went into the Puritan migrations to New England, the most successful in history up to that time and, following that, the Mormon migration to Utah. Huge efforts were taken to learn from previous failed migrations. Enormous time was taken to ensure that risks could be mitigated. Planning is not all bunkum.

What would the Puritans of the 17th century make of the situation in today's public services? Well, my guess is that they would do three things. Firstly, they would be unimpressed by the way we have separated out the delivery of things from the managing of them. In their day, the planners also had to implement and the processes were iterative. Today's leaders would be forced to actually put into practice what they espoused as operating principles.

Second, they would, I believe, like Boles, be deeply bemused by the level of activity taking place in the name of planning, co-ordination etc which actually did not serve much real purpose. Like him, they would seek to tear apart much of what passes for
necessary administration and planning.

Thirdly, however, unlike Boles, they wouldn't, I venture, be seeking to leave a vacuum into which an informal market kind of sorts things out. They wouldn't be happy with that because it forgets the important roles of both planning and leadership. You do not regenerate communities by merely stepping back. Neither do you achieve it by saying 'You do this, not us'.

My guess is that the Puritans would take a highly pragmatic view: getting rid of many of the current structures which clog up the way we are governed but, at the same time, being zealously organised in their long-term planning for the creation of a strong economy, a capable citizenry and the levels of social capital needed to sustain all of this. Not for them 'creative chaos' - just creative planning.

Is Lansley wrong to abolish PCTs?

The Observer today is full of angst about Andrew Lansley's health reforms. In short, everyone inside the NHS - managers, GPs, hospitals - seems to think that abolishing PCT's - the 'bulk-buyers' of health care for local people - and giving the task - and funds - to GPs is a risk too far. GPs, they say, want to just do their core job - not that of commissioning and procurement of services. And what will happen in areas where GPs don't take this on? At the moment, I'm working quite a bit NHS people and I hear similar things from people to whom I speak. To far, too fast, is the over-riding message.

That the NHS needs further reform isn't, in my mind seriously in doubt. To see the way things are done is to see a tangle of groups, sub-groups, mazy reporting lines all of which suck power and energy away from otherwise talented people. Throw in a tetchy operating culture, the clinician/management tension, the primary/acute divide, the special pleading from all professional quarters and the presiding overlord of the Strategic Health Authority and you've got a viscous treacle through which even a boiling hot spoon will struggle to pass.

And all of this costs a fortune to run - so I can see why the Secretary of State, like his zealous Cabinet colleagues want to just get rid of it all - PCTs, SHAs, the lot. As Andrew Rawnsley said today, they have all read their Tony Blair and want to use this term to get radical. But the question to be asked here is whether, in trying to avoid Blair's cautious approach, they risk going in the other direction - and wreaking havoc?

In the case of health, my own view is that the Coalition would have been foolish to leave the NHS to itself entirely. The problems listed above are real and hinder productivity, innovation and change. The NHS was given extra funding without being properly reformed. Yes, we saw some good come of that era - Foundation Hospitals, unprecedented capital spend and an end to some of the worst aspects of the pre-1997 system. But we were slow to diversify supply of healthcare, too worried about the reaction of the NHS establishment to devolve funding to the lowest possible point.

However, while I would be happy to abolish the Strategic Health Authorities tomorrow, I am less convinced that PCTs should go. They play an important function in many healthcare economies. When they go, their function will need to be picked up elsewhere, probably by consortia of GPs which themselves will require an organisational infrastructure. An alternative to abolition would be to reshape the Governance of PCTs to make them more GP-driven organisations.

This wouldn't be a gigantic shift. The PCTs no longer provide many services themselves. This, quite rightly, has been taken off them and given either to social enterprises, an NHS Foundation Trust or the open-market. What remains is relatively small, quite focused on locality with a history and skill-set which is useful in getting the mix of healthcare right in any given area. And unlike GPs Consortia on their own, they include the voice of patients, other professions and sectors. It is easy to forget, especially when we think about our own GP, that this group inevitably have interests which they will, almost certainly use any spending power they have to defend.

The other reason I would defend PCTs at the current time is that they do mitigate the risks incumbent in any system going through change. Payment by outcomes, Any Willing Provider and a much tighter cash environment are all big waves crashing, simultaniously, on the healthcare sector between now and 2013. Individually, each of these will have positive effects. That I do not dispute. But there will also be unintended outcomes, which will need to be managed. The PCTs - were they left in place be in a good position to help to manage the new ecology of healthcare at local level. Now that they too are in the mixer, it feels like there are no fixed institutional points around which to implement change - or manage risk.

Right across Government, similarly bold experiments are taking place in welfare, education and criminal justice. Local government is also having to reinvent itself in the face of unprecedented cuts. In all of these areas, there are huge potential gains to be made - and I applaud the Coalition for being courageous in what they are prepared to do. However, the change, in each case will need parts of the system to remain in place - rather than caught themselves in the vortex - to ensure sound implementation and to deal properly with any intended outcomes.

Are Mutuals Fit for Purpose?

Mutuals and co-ops once passed me by as an idea. The only co-ops I really knew about for a long time were vegetarian wholefood joints staffed by pony-tailed graduates and Christians. These places seemed desperately worthwhile - and very low on consumer-values such as atmosphere, service and range.

So I put co-ops into the 'nice but ineffective box' in my mind. The recent push for more mutuals has prompted me to look again at this format. To this end, I have read two superb books in the last month. One is 'Spedan's Partnenership' by Peter Cox, all about the rise of John Lewis. The other is David Erdal's book about Loch Fyne Oysters, which was taken into employee ownership following the death of one of its founders.

Both books helped to smash some of my misconceptions about employee-ownership. Firstly, these firms do not have group decision-making on all issues. Votes are not taken on which cleaning firm to use or even on many key management decisions. Expertise is respected in all areas - including management.

What's different though are three things. The first is accountability -and therefore culture. In an employee owned firm, the senior team reports back to the shareholders - who are also employees. This creates a very different dynamic inside a firm to one in which managers report to external owners. Managers are there by consent of the managed.

Secondly, employees are more involved in decision-making than in a typical firm. The culture of the all-powerful CEO is not typical to employee-owned firms - and the default position is that everyone's ideas have value.

The third is motivation. In an employee owned firm, everyone has 'skin in the game'. This creates a healthy peer-pressure to perform and deliver. There is now mounting evidence that employee-owned firms are more productive and resilient than their privately owned counterparts.

There's all sorts of info in both books about how employee ownership structures can be created, even when the firm starts out private. The most popular is for shares to be taken into a trust for employees rather than given out individually. But Loch Fyne does both, as they believe it makes ownership more tangible. Erdal's book is a touching, convincing account of how this works in practice.

What does all this mean for public services? Perhaps the strongest message I got is that for the magic of employee ownership to work, it is vital that employee ownership is as near-total as possible. Many of the mutuals setting up are only part-employee owned, the rest spread among users, other stakeholders etc. In the view of these writers, and mounting evidence from people like the Office of Public Management (itself a mutual) is that any dilution of ownership also dilutes the benefits too.

This week I attended a gathering of the 'Pathfinder' Mutuals at the Cabinet Office. All are finding their way in a public services environment in which they are, in different ways, an anomoly, often struggling to fit. These are the Early Adapters which others will watch and follow. What stands out is their determination to succeed in a tough environment. Ownership is undoubtedly part of the magic-mix which keeps these excellent people in the game, despite the odds.

All power to them.

A Day at the Auction

Continuing the frugal theme one more time, I am, for the first time in years, in the market for a car. Not any car, however, a 7seater job to fit my young family and serve as a credible business car too. Giving professional colleagues lifts in my own has become a bit tricky due to the smell of damp in my Focus. Seeing an elegantly dressed consultant wince a few weeks ago on sitting down next to me, I decided that enough was enough.

The next task was to research the market. I found that by far the cheapest place to buy was the auction. You can find out what the trade pays for cars this way and, by posing as an Arthur Daley, you can pick up a nice set of wheels for a song. Armed with this knowledge - and the excellent website WeBuyAnyCar.com, I took off to Colchester last Tuesday in search of a bargain.

The auction itself was a cheerful places full of rough-hewn blokes, mostly dealers, armed with their catalogues (none of this internet bullshit) nodding up the prices of Astras and Beemers. The cars - thousands of them - sit gleaming, all buffed up like prize dogs about to go through crufts. The auction room has three 'lanes' and the cars parade through, each taking about 45 seconds to sell, an unending monologue from the auctioneer 434344444444445doIhave46464646?46?46?46?lastime?gone(hammer).

The whole operation runs with military precision, like a civilian Dunkirk, the cars driven in slowly, hazard lights on by an army of grizzled, quite elderly men. A huddle forms around each car before the bidding then, as quickly as it arrived its gone. Now my target car comes. I had set myself a budget of ten grand. They start on ten. Damn. It's proving a popular car. It goes eleven, twelve, twelve seven. A popular vehicle. I drop out before 11 grand and go home empty handed.

That's the thing with auctions, you might not win. I get back, go online and before I know it I find a dealer that has the car I want. It's up in Leeds but I'm going there next week. I figure the grand I pay extra might be worth it if I avoid another day's faffing around. Next to the Arthur Daleys I don't really feel quite up to the task anyway. No social entrepreneurs here!

Is Frugal is the new Black?

You will recall that frugality is one of my lead-values. In many ways, this is a good, virtuous thing. However it does occasionally get me into trouble. Last week I managed to disgrace myself at my London club (£170 pa - bargain), leading to a potential exclusion from said establishment.

It all started very innocently. I had been running back to back all day and on my way back from the bathroom at about 2.30pm I realised I was starving. In the corner of my eye, I saw the lunch from a conference being closed up and beginning to be cleared. My eyes fixed on a glistening piece of salmon, only moments away from an encounter with a black plastic bag. So over I went, grabbed a plate and piled the stuff on.

'Excuse me?', a young, female voice sounded, in my ear. 'Are you with the Cement Mixers Convention? (not the real name). 'Errr, no' I replied, through my salmon. Stood in front of me now was this pretty 20-something, berating me about not nicking food. 'But the event's finished', I pleaded - this was going in the bin'. ' Not the point - you could have at least asked'. In this last point, she was right. So I shuffled off, humbled.

This, however, wasn't the end of it. Fifteen minutes later I was approached by the Maitre D' of the Club who reminded me of the difficult position I, as a Member had put the Club in the eyes of his client. Not content with bollocking me, the prissy 20-something had dobbed me in to the management. I offered to pay - which they accepted - and noises were made about me being asked to apologise to the committee - utterly mortifying.

However, I was out last night with some of my old mates from voluntary work. We all met 15 years ago, in our mid-20s and it was the first time we'd all been in the same room for a couple of years. All of them, I was delighted to find, were becoming more frugal than me. Martin (a mathematician) only reads books from libraries while I am never off Amazon. Anna (a mental health nurse) only buys second hand or half-price clothes while I will always go for Paul Smith (if its in a sale). Fiona (a conservationist) lives on nine grand a year and I need at least four times that.

All of these people - mid 30s to early 40s - share on thing as well as their frugality: they are happy people doing what they enjoy and not worrying too much about acquiring stuff. Only one has a car or owns a house. After a delightful dinner (cost £25 for five!) we walked, or trained home. Except me, of course, who drove.

So is frugality the way to go? I think it could be - as long as you don't forget your manners!

Aren't many private business also social businesses?

We in the ‘for good’ world often get in a twist about defintions and distinctions. To accommodate this we have developed a typology of organisational types - charities at one end and co-ops at the other with CICs, social firms and 57 other varieties inbetween.

Business doesn’t bother with this nearly as much. But there are as many different types of business, in my experience, as there are types of ‘for-good’ bodies. For a start, there are small, medium and large ones. There are private and public ones. Manufacturing and services. And there are some which are, essentially, values-driven and some which are excessively profit driven.

It is this ‘grey zone’ between exclusively profit focused business and the harder-nosed end of social business that is, I believe, little understood by our sector. It is most often found in the privately owned medium sized business sector, where owners are long-term engaged and also rooted in their own communities. In such companies, there is less short-termism, no remote shareholders and a relationship with staff that means that jobs are preserved where possible. We tend to lump these businesses in with the red-claw private sector, but, in reality, trust is high, employees involved and the business views itself in the round as an employer and a contributor to the local community.

This is a type of capitalism that was once prevalent in the UK but which has been slowly eroded by harder-edged shareholder- capitalism and its endless take-overs. Small and medium-sized firms do, of course, still exist in vast numbers, particularly in our smaller cities and towns, but they are not the force they are in, say Germany, where the 'Mittelstrand', of middle-level of family-owned business with up to 250 employees is still prevalent.

For me, this socially responsible form of capitalism - local, connected, balanced is actually not a million miles from social business. While ownership is still concentrated in a few hands, the modus operandi and social benefit of these ventures - employment, training, economic stimulation - often compares favourably to the charities and social businesses operating in the same space.

Here's a question for social enterprise to think about: Is it is better to run a 20 person business, private profit-making in Merthyr Tydfil...or set up a social enterprise? You would get grants for both, true, but which would need less long-term subsidy? Which would generate and sustain most jobs? Bring most money into the local economy? Train most people? Pay most tax? I think I know the likely answer.

This isn’t to say we shouldn’t set up social businesses in places like this. We should - business might fail to tackle specific problems that a social venture wouldn’t shy from - e.g. employing disabled people - but I think the social enterprise sector should get its head around the fact that not all businesses are the same and in terms of everything except ownership, some businesses probably deliver stronger social returns to capital than certain social enterprises.

Where would you put your money?

Wonking Versus Doing

If you haven't read Tony Blair's book, then consider giving it a try. Even if you think you can't stand him, it is compelling reading. For me the most interesting bits are the passages on public services. Quite early on he felt uneasy that his Government didn't have what it took to reform public services. Labour was, in its DNA, always going to find it hard to challenge what had become a massive vested interest.

Now Blair sensed this and looked around for answers. He went to the Thinktanks, academia and experts. He found plenty of political stuff but very little, in his own words, of practical value. I was stunned by this. London is stuffed with the cleverest, most competitive and politically savvy people around. I have always assumed that, although a lot of what is produced by them is useless shit, there was always enough red meat for policy-makers to feast on.

Not so, it seems. I found Blair's comments strangely comforting. Didn't he have Matthew Taylor sitting downstairs? Geoff Mulgan down the corridor? Tony Giddens up the M11 in Cambridge? Although I have now overcome my complexes about Very Clever Metropolitan People, I kind of believed that these guys and women tended to deliver. Turns out they didn't and the poor PM of the time was left riffing through the Number 10 library for ideas. Quite a thought.

Perhaps one reason I took a small satisfaction in Blair's confession was that my own approach has always been a funny mix of dong stuff, writing about it, networking it and improving it. Speaking Up was a bit like that - try things, fail a bit, adapt and so on - or 'iterate' to use the vogue term. I was never one for sitting in a quiet room trying to come up with the answers. My hunch was that this wasn't the way social progress happened. Progress isn't mathematics, it is a much messier business.

Stepping Out is kind of the same. While there are plenty of people bashing out clever-sounding ideas about public sector reform, conjuring frameworks and pathways, you can be sure that most of them haven't set foot in a surgery or ward for a long time - except, possibly, for botox. This isn't the stuff out of which change is made. You end up, as Blair said, with a lot of fairly superficial, political short-term stuff that never really gets to the heart of things. Just expensively conceived crowd-pleasers such as all the crap 'tools' being brought out around the Big Society - itself a biddable idea, stuck in with many of the wrong kind of people working on it.

But this blog is not a simple 'Out there in the Real World' piece. Far from it. What I am trying to say is that we gain most useful knowledge about making change, and even grand-theories, from the mucky business of doing it, then theorizing it, then doing it again. However, somewhere on the road in our intellectual tradition we seem to have lost that fascination with getting stuck in. The thing we remember people like Michael Young for. These days, that is for the Boring Folk (possibly like me!) to do once the Clever Ones have done their work. Bland implementation versus Grand Policy.

"Oh but what about NESTA, Carnegie, RSA, Young, other 'Do-Tanks'?" I hear some of you shout. Well, yes, these lot are more engaged and doing some fascinating work that we can learn from. This is 2010 not 1998, when Blair was feeling adrift. Thank Goodness for them indeed.

But I am pretty confident that in 50 years time, the stuff that is seen as the key to change won't be the outputs of 'Do-Tanks' but other stuff, quite outside this world. Things that have grown, in the first instance, out of experience of people close to the issues and for whom getting the policy right is far from the first concern, when pushed. Change starts with action not policy. In the 2010s, new policy ideas, like new pop tunes are rare. There will never be another Beveridge just like there will never be another Beatles. The big set-pieces have been done. These days, policy can only underpin what's good out there - and give it a wider framework. This is what we seem, along the way, to have forgotten.

My Fantasy Stash of Sardines

There can't have been many people in England tonight out running in subzero listening to the Style Council. Not even two maybe! This cold weather has a funny effect on me. It sets off that wiring in me that makes blokes my age turn off lights, eat leftovers and make weird fantasy-plans for an underground pantry stashed full of tins of sardines, beans and water - just in case the worst happens - and we run out of food.

Yes, middle age sort of creeps up on you. Things which were mild tendencies are now becoming more extreme. My frugality now causes me slight embarrassment, as I take the leftover fruit from the awayday or shake every last drop from the nozzle. My desire for my own time and space now manifests itself in fairly adept attempts to avoid anything other than the most desired social gathering. I often monetize the value of what I would exchange to avoid things I cannot stand. Most weddings. Concerts. Clubs. Most lectures. Anything after 10pm.

It also makes me much more choosy about who I spend time with. There was a time when I would tolerate most people socially. Try to get on with them. Now, outside the professional setting, I only bother with people I actually like. Even at work, I strongly err to work with people who share my outlook and are interesting to be around. Never again will I sit in toxic relationships for years, as I did a couple of times while a CEO.

It's the old truism I guess that as time goes on, you realise its finity - and take the appropriate steps. Wisdom perhaps. But the grouchiness, the frugality, the hoarding, the 15 year old banger you won't replace, even if it makes you look poor? The
se are the less attractive and fathomable elements of the early-middle years. My wife find it all slightly ridiculous. But she's 35.
Too young to understand!

To Grow or Not?

Bit of a week. The new business is taking off - relief. Worries of feeding my children on spam fritters after Christmas now abating. I'm in that funny stage now in the early life of a business where you're deeply involved in fulfilment - but just getting to the stage where it's getting a bit too much to do this well while also doing biz-dev work and the full range of necessaries - such as invoicing customers!

It's at this point I can see why people stay one-man-bands: you can earn well, control the work, really live your values. The step to involve others, be these associates or employees - is a major one. The only way to make it work, I am finding, is to identify people with very similar values to my own. So far, this has been ok. My network is a deep well and every time the bucket has been plunged, someone wonderful has been in it as it comes up, normally a freelancer (I have no staff as yet). But my well is finite and, at some stage, there's a scary decision to make - do I bore a new hole in unknown territory - with all the risks of a dry hole - or dodgy water - or stay at a size of business that is me plus my extended family of fellow-feelers?

I met Todd Hannula recently of Camberwell, a great business up in Leeds. They redevelop old or disused space into community use. I spent 15 minutes talking to Todd but, in just 900 seconds, he kind of convinced me seriously consider building a business which isn't necessarily the biggest, most investable or scaleable but which is, in its own way, a Small Giant. This term comes from a book of that name and refers to businesses which measure their success on the quality of relationships with customers, the extent to which the business corresponds to the owners' values and the quality and innovation of products and services. Not with growth metrics or market share.

Todd's story was one from which he had gone from an ambition to grow a big business - and got very quickly to a million turnover - but found fairly quickly that this was causing limitations and forcing him and his co-owners to feel less happy than they did about the work of the company. So he changed focus - and Camberwell is now aspiring to be a Small Giant: respected, loved, influential, a happy place, socially responsible, balanced.

After speaking with Todd, I reflected on my own approach - and how I am possibly representative of a slightly earlier stage of thinking about business. With Speaking Up (now VoiceAbility) I was all about impact through scale. My logic was that I would increase our impact by the vector of our growth. One one level I was right. But on another, it wasn't so straightforward. Impact didn't grow in proportion with spend. We struggled, after a while, to innovate as easily. More and more had to be spent on creating conditions in which employees thrived. It happened less and less naturally as the organisation grew bigger. More variation appeared in our services. Things still felt good - but not quite the same.

Don't get me wrong - I regret nothing and am proud of what I did at Speaking Up. But I think what was achieved reflected a mindset that is now being challenged - by people like Todd and the Small Giants of the book of that name. Ideas of value are being expressed which suggest that long-term success comes through slower growth and less of a focus on profit, more on people, culture and values. The near-collapse of certain titans of growth and profit centred capitalism certainly makes one question these models.

Like all people, I am a product of my environment and my mentors. I was given immense support by people who taught me how to successfully grow my organisation. I have drunk their milk and thrived on it. Looking at other ways to succeed has, though, been exciting - and challenging as I consider what to do with new company, Stepping Out.

The choice as I see it is whether to grow it substantially, take on people and finance, ride the tiger of public sector outsourcing and possibly sell the business in a few years - something I know I could do - or to try a different model. Probably smaller, probably employing a tiny number of people and largely working through a growing network of excellent people. Building a reputation for strong values and keeping the focus on delighting customers rather than growing revenues.

Put like this, it seems a no-brainer. However, there is still that visceral part of me that is attracted to the growth model. Which wins will remain to be seen.

Bionic Powers

One of the most startling things about setting up a new business is the new awareness you develop around both costs and risks. It’s as though a bionic implant has been put in to alert you to where you might be paying too much – or where the risks of doing something are too high. An sensor goes off when something isn’t right.

Of course, there’s no implant, it’s the entrepreneur’s survival instinct kicking in. This is perhaps one of the biggest differences between entrepreneurial and established businesses. In the former, the person making the decisions has ‘skin in the game’. Financially. Emotionally. Reputationally.

In an established business, and I include mature social businesses here, the decision maker is normally one step removed from the consequences. She might hear the sensor going off, but instead ignores it. Or, more likely, leave it for someone else to worry about.

I have not attempted to hide the fact that my new business is 100% mine. There are a number of reasons for this. I do not want to be someone else’s plaything. I don’t want to deal with all the bullshit that comes with getting grants. But most of all, I didn’t want to insulate myself from that bionic sensor that you acquire when you have skin in the game. So when I needed money, I borrowed it.

Of course, not all entrepreneurs have skin in the game. Some, including some social entrepreneurs, will seek OPM (Other People’s Money) in the early stages. Often this is because they have nothing or can’t borrow.

However, my guess is that more of the OPM people fail, give up, get ripped off or don’t recognize risk as accurately as those who, from the start, use their own resources. Their bionic sensor is that bit duller than those with something of their own on the line.

This isn’t me having a go at anybody in particular. Success comes in many packages. Stelios, for example, used his Dad’s money at first. And social entrepreneurs are heroes of our society, whoever’s money they use. They are taking risks - period.

No, my point in writing this is to say that you are a better business person if you have skin in the game. A big financial commitment, in particular, switches on the bionic instinct that the salariat don’t use. My worry, if I have one, is that social entrepreneurs, because they are often using OPM, can lack this vital wiring for survival.

Wanna be a successful social entrepreneur? Go to the bank and take out a loan.

An Open Letter to the Brothers

Dear Brothers (and Sisters, of course),

Social Enterprise. You clearly don't like it. You have tried very hard, up and down the land, to turn your members against it on the grounds that it is the same as privatisaiton. This isn't the case. Indeed given the chance to be part of an emerging social business or join, say, Serco, I suspect the differences would be very clear to see.

What puzzles me is why you're so against a way of doing things which is so close to the dreams of many of your founders back in the 19th century. The aspiration back them was for workers to have some control and ownership of the means of production, to have a voice and a say in the running of businesses. Compared to privatisation, social enterprise offers this in far greater amounts than either nationalisation or privatisation. There's little not to like from the trade-union worldview.

However I have overlooked something rather big haven't I? Yes, I have forgotten what you have, over time, morphed into from your better beginnings - as defenders of preferential terms and conditions for your members, regardless of how unsustainable these are and how much they cost the ordinary taxpayer. In fact, it's got to the point where you would rather have fewer jobs - an more unemployment - than jobs for all but lower wages and possibly shorter time for those in work (which is how the private sector got through its recession from 2008-10).

I used to be in a union. I was a shop-steward, believe it or not, as a 25 year old. I quit one day when I realised that the union didn't care about the service, just about the producer of the service. That didn't sit well with me because it was clear that the business had to change - and the workforce with it.

This isn't an argument against trade unionism (though I know it sounds like this). Unions are the hallmark of all successful societies. It is an argument against a particular type of trade unionism that is confrontational and ends up placing more power in the hands of managers than should be the place. Look at Germany where the unions sit on boards. That's what we need. Sharing, diversity and responsibility. A place at the table. A shared interest in the running of businesses. For me this is what social enterprise is about.

But instead all we hear is how it should all stay in the state. Poor.

From my piece in yesterday's Guardian

Last week, Cabinet Office minister Francis Maude said the government would encourage different forms of organisations for public sector staff taking over services, and more details are expected soon on the government's plans for new mutuals. By Christmas, we are likely to have seen the announcement of about 30 social enterprises from the public sector "pathfinder" programme, on top of the 30 or so organisations formed by NHS staff.

So this is a timely moment to examine the mutuals and social enterprises stepping out from the public sector.

Successful spinouts from the public sector tend to be led by outstanding individuals. It takes people who are willing to do two jobs at once (business as usual; plus, leading the divestment) and can see future benefits in terms of better, more flexible services, an engaged workforce and user community. They can recognise the hidden social and commercial value of a great business locked inside a large, cumbersome public body.

Mostly, spinouts involve quite big chunks of public business, many with a potential turnover of £20m or more. With some courageous exceptions, this is not a world of small teams of social workers making a go of it on their own. Within the current health and social care economy, the costs and risks stack up more comfortably if ventures are of a reasonable scale.

In addition, the spinouts are all relatively specialised. In areas such as mental health services, domiciliary services and community health services, specialism gives these new ventures a clarity of focus that, in time, will allow them to compete and expand into new places.

But how will these new social businesses fare in the world outside the public sector? That will depend particularly on how quickly they adjust to proper competition. While protected initially, these ventures will, within three years, be playing on a level field with other sectors.

My worry is that the public sector "deal" they step out with, including Tupe regulations on transferring staff and higher pensions costs, will remain unchallenged and these businesses, freighted with public sector culture and costs, will crash faced with cheaper competition in three years' time.

Another factor will be access to commercial capital and knowhow. This is lacking in most of the senior teams coming out of the public sector. They are, on the whole, passionate about clients, brilliant on operations, superb on practice/clinical governance issues, but lacking in capacity to understand the emerging shape of the market and to build investment cases around these. Filling this gap will be a major requirement.

Then there is the extent to which these new businesses can properly exploit the freedoms offered by no longer being part of a "big machine". There is hidden value to be extracted by being a smaller, leaner organisation. It means fewer meetings, leaner operations, improved absence and performance management, less bureaucracy, effective financial control and a healthier culture. The list could go on. But all these benefits depend on how quickly the managements of these ventures make the vital mental shift required from the skills required to succeed in the public sector to those necessary to win in business.

In developing these organisations, we must be grown up about reward. The people leading these businesses need to know that the personal and professional risk they are taking will be rewarded in time. So let's have open discussion on this.

There should be earlier help to establish the viability of particular social enterprise ideas. Rather than starting with a "right to request" we need to begin with the more hard-nosed question of what does and doesn't make commercial and operational sense.

For those seeking to step out of the public sector there has probably been no better time – but we must learn from those already out here and make it clear that survival will not be easy.

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Guardian Social Enterprise Conference 2010

I hadn't had a whole day at a conference for ages so I decided to treat myself to the day ahead of chairing the final plenary.

Overall, good day. There were two big questions today. One was about how the social enterprise sector can work with the private sector. How can this work in practice? How can we overcome suspicion and work with each others' agendas to grow the pie? The other was about social enterprises emerging from the public sector. How will they get along? What will help them survive and thrive?

The big focus for the public sector part of the conversation was the 60 odd Right to Requests from the NHS. While only three are out, about 60 will become live in the coming two years. After that, Right to Request in its current form will be no more. No protected three year contract. Not necessarily transferable T & Cs - though we await more info on this. I asked Health Minister Andrew Lansley about the willingness of people to step out without a guaranteed contract to give them time to become competitive.

In my view this could put already hesitant people off. While I am all for any-willing-provider, the pragmatist in me realises that nascent public enterprises would get whacked in open competition on day one. They need a couple of years to get their act together. Without it I am worried the supply of the willing - already only trickle of 10% of the whole - will get cut off.

That said, life inside the public sector is no longer as comfortable as it was. The public sector pension is vulnerable and it is no longer a safe place. Escape has probably never looked more attractive. CEO of City Healthcare, Andrew Burnell, described his journey as one of liberation. Time spent spinning around paperwork and managing upward is now spent running his business.

As MD of Stepping Out, today felt heartening. There is realism and appetite. But a lot of questions. All of these new ventures will need rapid reform and investment if they are to compete. It has never been a more interesting time to be in social enterprise

Why People Don't Vote in Council Elections

This is my last blast on the recent local by-election. I wrote the other day about the stupidity of all of the parties fighting for second place and, in doing so, letting the Tory in with 28% of the vote. But the real scandal was how few people got this gentleman elected. Turnout was down to Burmese levels - about 8% of eligible voters chose this guy to be their Councillor.

This is perhaps the real talking point. Why is the figure so low? I venture three reasons. One is that the political parties are a closed-shop. They keep local politics mostly to themselves, ensuring normal folk don't get a look in. Come along as an Independent and they will shut you out, however good you are.

Secondly, people know in their hearts that local government in the UK has been secondary to what goes on in London. Thirdly, local government is just, well, dead boring really. We don't reach out or connect. We never do referenda. The public can come in and ask questions but have to endure long, read-out answers. Meetings occasionally rise to the challenge of an issue but often become like a amateur dramatics version of Westminster with mock braying and cheering, regardless of the complexity of the issues at hand.

Thirdly The Council is also stultifyingly homogenious. The elderly are seriously over-represented. Only a handful have proper jobs. There is not ONE black Councillor. Hardly anyone is under 40. There are quite a few women, granted, but hardly young ones. This has got worse, I am told, in recent elections.

The lesson of failing places is that challenge, diversity and plurality are the hallmarks of better society. You get better politics and better outcomes. While I love Suffolk, there is much to be concerned about. Our school attainment is mediocre, our economy not as strong as it could be, our future direction in the knowledge-based economy, I feel, unclear. Our Council, at senior and officer level isn't making a bad fist of addressing some of this - but it needs stronger institutions and better, more pluralistic representation, debate and challenge to make this place the best it can be.

Remembering

Just arrived back from our Remembrance Day event on Angel Hill in Bury St Edmunds. Hemmed in on four sides, this oblong 'grand-place' makes for an atmosphere. It felt like thousands were there, even though I dare say the numbers were in the high three figures. Bury is one of those places in England that does tradition very well. People here respect our armed forces and turn out to remember them - and applaud them as they paraded past us.

I was supposed to be there as part of the civic group, but I somehow struggled to put myself out there, marching along with the young people who have been taking bullets in Helmand, or indeed the ageing WW2 veterans in their blazers, medals and berets. I somehow felt better in the crowd.

I took my boy who loved the spectacle. Having your male child with you when you reflect on the experience of people only 15 years older than him who are walking in front of your eyes I found quite affecting. Yes, I thought, I could be here watching my own son marching by. I actually know someone locally on my patch who has two sons who have just completed a tour in Helmand. How quite she manages, having both out there I don't really know. The East Anglians have suffered as much as any regiment in Afghanistan and she probably has a sense of dread whenever the phone or doorbell rings.

I'll make no secret of it, I love the Army and the military. I respect their values and their approach to things. I admire their solidarity, their professionalism and their quality. In terms of pay, conditions and privations they put up with more than the rest of the public sector put together. But do they moan? Or go on strike? No, they get on with the job, as a matter of pride.

Although I am made of far too gooey stuff ever to have made it in the Forces, I see their values as part of how I seek to live.
I suspect this makes me look slightly absurd in the eyes of my mostly Guardianista readership but I know, in a crisis, who I would rather be stuck in a tricky spot alongside.

It wouldn't be a group of politicians for sure.

A Step Backwards in Suffolk

Local party politics can be pretty dire. Here in Bury St Edmunds we've had a by-election for the County Council due to a Conservative standing down early. In his stead, they put up the former Tory Councillor who I, as a rookie newcomer, beat into third place in the neighbouring seat in 2009, a retired gentleman of unquestioned good character but, I think he would admit, not quite his younger self. In a sane political world, this chap should have lost. But he won, adding yet another Conservative male of advancing years to the Council's already limited gene-pool.

Now, the reason he won isn't because he got lots of votes. In fact he got just 28% of the poll. He narrowly beat a popular and capable local independent who got 27% - a man with a strong local track record who personally delivered 10,000 leaflets. Making up the rear were Labour, the Greens and us all with between 300 and 550 votes - or under 15% each.

Before the election, some of us were making the case for standing a couple of candidates down so to give the Independent - who was a clear front-man - a chance to beat the Tory. This made sense. In a Conservative-dominated county, the electoral arithmetic, under the FPTP system, guarantees big Tory majorities on all of our councils. Winning this one by tactical withdrawal might, we thought, set a healthy precedent. If we can collaborate in power at national level, surely we can do so at local level?

Well no, apparently not. All of the parties put people up in the mis-guided belief that not doing so makes them look weak or somehow, lowers their profile for the future. Noises are made about giving people a proper choice but it's really about not losing face and, in some cases, reflects low-feeder personal rivalries.

I sound hacked-off I know. If this stuff really, deeply mattered, I perhaps would be. Were the stakes that high, it would be worth a few hours of grumpiness. But it is, at the end the day, a by-election that alters very little here in Suffolk. My principal disappointment comes from the realisation it gives me that the Tories will probably run this place on their own forever and a day while the rest of us scrap for second place.

This wouldn't be so bad if our councils were vibrant, diverse, politically balanced places. But they're not. They are homogenous, incurious dead-zones, unrepresentative and non-plural. It's bad for politics and, ultimately bad for the people. Pluralism, diversity and challenge means better politics and sounder decision-making. This week's result felt like the opposite of this. A step backwards.

To Match my Dad I will need to become a millionaire!

My Dad was a well-paid senior manager in a private company of about 50 people turning over £20m pa. He got made a Director just before the end, turned 65 this year and promptly retired. He's setting up in business again now but he doesn't need to. His company and state pensions will keep him comfortable for life, he has no mortgage on the Exec home he bought for 40 grand in the 80s and his three kids went through college for free. He has a second property (rented to my brother!) and loads of shares from the privatisations of the past. In other words, he's sorted.

For me to achieve the same level of care-freedom by 65 I have, I have calculated, to become a millionaire. For a start, my pension is worth about 25 grand - four more than the 21k I have paid in since I was 24 year old. My mortgage is just over a quarter of a million- nothing unusual there I find when speaking to friends. And my two (maybe three) kids will need 30k min each off me to help them through college.

So let's assume I need a pension-pot of say half a million (on a 5% yield this gives me 25k pa), I pay about 400k in mortgage payments over the next 25 years - including the interest and I spend 100k on my kids education - and I need a million quid.

For my Dad's generation, it was possible to have a decent career to know you could do all of the above pretty comfortably. For ours, to get to 65 and have all of those boxes ticked means one has to be earning extremely well - or succeed in business.
Or, of course, in the case of pensions, be in the public sector.

While we are getting wealthier as a society, the truth is that the wealth is unevenly distributed across generations. My Dad's generation bought then sold the cheap houses, enjoyed the stock market boom and free education. My own didn't. The next generation - my son and daughter's - have it even harder, I believe, judging by the position most 20 year olds even today are in.

My main irritation with the CSR - in addition to the Housing Benefit mess - is its failure to tax the affluent over 65s. Their Winter Fuel Allowances, free travel cards and state pensions are not needed by many. They can't quite believe their luck, the few I have talked to. But they are numerous - and they vote.

Failing While Succeeding

This week the pace finally caught up with me. I woke up on Saturday morning feeling like the world was falling in around me. My heart pounded. My head teemed with frightened thoughts. I got up, took some breaths and took my usual therapy - a ten mile run. I was staying at my parents s it was fell-running on the West Pennine Moors, a National Trust site of bleak, rain-drenched beauty. Today it was drenched in sun, blue, bright, vivid. An hour and a half later I would like to say I arrived back glad again with my head straight- but I still felt pretty grim.

I had, of course, overdone it. A fourth 70 hour week on the trot had sent me into a pretty dark place from which I knew I would emerge but in the meantime would have to sit out. This failure to remember my own frailties, even in a period when business is, so to speak, booming, is a recurrent theme for me. Even in my 40's I seem as likely to run myself into the buffers as I did as a hungry 25 year old.

The day was softened by a trip to the Reebok Stadium to see my beloved Bolton thrash Spurs 4-2. My companion was the lovely Hannah Eyres of Keyfund who has close connection with the club and gets me into the posh seats. Hannah was, as always, as sunny as the day and I came away feeling a lot better than when I arrived.

Today has also been decompression-time. Out in the park there is a large pond. Just looking at it calms me down. It is full of massive carp that prowl just under the water like hostile U boats. We took our net and failed to capture anything, despite repeated baitings of bread.

At lunchtime today, for the first time in days, calm descended, I hope for a while. There is an art to life which I am slow to learn. It's about pacing, creating manageable demands and actually enjoying the ride. For 80% of the time, I feel in a good place. The other twenty can be pretty dire. At times, utterly so.

When deciding to set up a new business I knew the biggest risk I was taking was with my mental health, as much as my money. While I will always back myself in business-terms, I am not always sure my mental and emotional self will last the course. The scale of success to which I aspire is not matched by my constitution, which seems to throw me into the abyss if I am working more than 60 hours a week for any length of time.

I am discussing this because I don't think the demands and stresses of work are really discussed on blogs. We tend to focus on issues, our views and those we have met. The inner world we inhabit as entrerpreneurs, CEOs or whatever is never discussed. My own belief is that a lot of people skate on extremely thin ice. And that despite how 'sound' we all are now about mental health at work, those of us in leading roles tend to keep quiet about it, perchance we are seen by others as 'flaky' or weak.

Month 3 - What will be in store for Stepping Out?

Month one was ok but disjointed. Month two started badly but ended well. What will Month Three hold for my new business?

Well, my mood has definitely improved. On Friday we secured another significant contract, jointly with one of the big firms. That's two now. I now know we can eat well into next year. Two swallows do not however make a summer and I am chasing other leads very hard.

Of course now we are into fulfilment. This has got me thinking a lot about my vision for this company. My last one had 250 staff and operations of £7 million when I stood down. It had also moved towards the mean in terms of delivery as it grew. Or, rather, it was both pockets of excellence and averageness.

This time, I am only interested in excellence. It's all I care about now. Every job being done to an eye-wateringly good standard. Because that's what buzzes me more than winning the business. It's the call to say how well we have done for people. Sure I will grow, sure I will take on people and take the turnover to six, maybe seven figures. But it will go at a pace that takes no risks with quality. Customer ache for quality and are gratified, surprised even when they get it. So few deliver it. I want us to be known for care and quality above all else.

What will this mean in practice? Well, it means hiring well. I will only now take on people who have done something for us before either as an Associate or on a temporary contract. I want people not only with talent with the integrity to give more than they get. They are scarce in our entitlement culture. I also want to create an informal culture in which people have a stake in the company beyond their pay packet. I see so many people disappointed by the poverty of their working lives. This company I want to be a special place. Finally it means focusing on what we do best and becoming the very pinnacle of achievement in that area. Better this than the confused generalist.

As well as leading the company, November sees me speaking a bit, writing a bit, non-Execcing a lot and probably neglecting my family. A weekend in their exclusive company has been great. My friend Robert Ashton in his wonderful book 'The Entrerpreneurs Book of Checklists' says on his dedication page that however hard you want to work at your new business always to make time for your family.

He is, of course, right. Indeed I would recommend you check out Robert's site and best-selling books at www.robertashton.co.uk

The Truth is Out on Personal Budgets

If I went on Mastermind, my first appearance would see me answering questions about the Bolton Wanderers wilderness years in the early to mid 1980s. My second would be on the the Smiths B-sides 1982-87. My third would be on personal budgets. Not exactly my specialist subject but up-there.

I spent my last three years as CEO of Speaking Up (now VoiceAbility) thinking through how civil society organisations would respond to this. Personal budgets felt like a long overdue reform of a local authority funding system which had ossified in its own defence. I came to the conclusion that this was not going to be an overnight change and that, during that period, serious investment in new services was too risky. The Local Authority turkeys were not going to vote for an early Xmas. And even those that wanted to change would find it hard in practice to do so.

Today's report (http://bit.ly/d9YPTy) from the Audit Commission vindicates this: progress has been pretty slow in many places. Yes there have been 'trailblazers' but they are the exception not the rule. Councils systems are not yet geared up. People with mental health problems are missing out. We need more independent brokerage services.

Beyond imploring councils to get a shift-on, the Commission's report doesn't hold out much that is new. All of its recommendations can be found in guidance from years back. The only difference now, of course, is that councils are broke. In-house services are no longer economically viable. Divestment is back on the agenda and with it the most pure form of divestment - personal budgets.

Now, cards on table time. I am a fan of personal budgets. While the evidence base is quite favourable but not glowing, I glow like a Christmas tree when I think about them. I have seen too many successes and too few failures to not be a fan. Yes there are all sorts of challenges and problems, not least the Norwich man who used his personal budget to be pleasured in an Amsterdam brothel. While part of me wishes him the very best, I realise this isn't a good use of public money.

However, the risks - and they are legion - do not make this a bad idea. State control of funding does not make anything accountable in the way that unions and left-wing politicians want us to believe. All state control does is ensure that it costs us five pounds to spend ten. Councillors, in practice, do not hold state services any more accountable than they hold a private provider or individual budget holder. In fact, I would say the reverse is true because Councillors, as employers of state employees, are conflicted between loyalty to the public and duty to be nice to our employees.

Anyway, back to personal budgets. I predict that as councils are forced to reform themselves in response to the CSR, a by-product will be lots of people moving to personal budgets. In public bodies c

hange only comes out of necessity. Events - like the CSR - play the forcing role that in other sectors is played by the market. In that sense, one can be grateful for the end of the Good Times in the public sector.

Co-ops, Mutuals and all that

Spoke yesterday at a Westminster Briefing policy event about this agenda which, while featuring prominently in the Coalition Agreement, is still percolating at local level. Yes, there's some intention, enthusiasm even. But minds are so distracted with the wider changes heralded by the CSR that one senses that only a few people have put the agendas together.

Good event. Nick Seddon of Reform was his usual lucid, on-the-money self, quoting Charlie Mayfield of John Lewis in saying that we really need to solve pensions and procurement if this agenda is to fly. Cllr Steven Reed, Leader of Lambeth was another breath of fresh air. Indeed if the whole Labour Party was like him I might never have left. Heading up the Co-operative Council in Lambeth, Reed's plan follows the lines set out the Public Services Trust's report of a diversity of community based providers backed up by a council which would still provide but whose primary role is facilitation.

Ed Miliband really should go to see this man.

Also strong was Dr Guy Turnbull of the Social Work Co-operative but also CASA, the employee owned care enterprise. Guy helped us see how it isn't Terms and Conditions which make employee-owned busineses work but the feeling people get that they are part of the story.

My bit was to report on what I am seeing as a I go round working with PCTs and Councils which are stepping out services from the public sector. Three things to say. Firstly, leadership is totally important. Secondly, these ventures are generally short on commercial know how and need a blood-infusion of this kind of capability if they are to be viable long-term. Thirdly, there is definitely locked in value in these organisations which, upon stepping out, will, with the right management, be liberated. This will raise productivity and hopefully enable these new ventures to square the circle of raised demand and lowered funding.

Like with all these events there was a lot of taxonomical discussion about co-ops, mutuals and social enterprises which is geek only territory and should normally be avoided in the presence of ordinary people. That aside, strong event.

Are Entrepreneurs like Professional Footballers?

To Wembley Stadium Royal Box last night to attend a fundraiser for Street League, which changes lives through football. SL are an Impetus Trust investee and I was there are as Trustee. And what a good night. The power of football to do good is often forgotten amid all the money and madness.

My luck was in when I found myself sat next to ex Everton, Newcastle, Sunderland and England midfielder Paul Bracewell. If you know your 80s and 90s football, `Brace' will be a familar name, winning four league titles, a Cup Winners Cup and appearing in four cup finals.

When I had overcome my inital awe, we had a good chat about the game, how it was, how its changed and so on. He was an interesting man. Like all players of his time, the earnings were much lower and now he works in coaching. He doesn't begrudge current players their money, even when, as a teenage apprentice he spent most of his days cleaning boots and sweeping terraces.

What I noticed, talking to him, was that, he had, early on decided on the life he wanted and been willing to pay the price. For him this was particularly heavy, in a career blighted by injury and 18 operations, his wobbly knees earning him the nickname `Iceman' in his latter years.

But he played to 37, knowing this might affect his body in later life. And so it has. While fit and trim, he avoids impact exercise and is limited to stuff like golf and cycling. My bet is though that he wouldn't have traded any of those late seasons for anything.

Paying the price is something you know about if you're an entrepreneur too. You put your feet to the flame. You risk getting hurt and, on one level, it isn't rational. But you're driven and you do it. There's almost no choice. You resolve to make the sacrifice and you hunker down and do it. Professional sport is similar I sense. Except, like Paul, all that many walk away with is their memories.

More or Less What We Expected

So, its here. Much of it, however, doesn't feel like news because we've been so well primed.

My biggest disappointment is that we will have to see half a million lost jobs rather than a significantly smaller number coupled with pay reductions and reform of terms and conditions. It is clear from the budget that the civil service would rather see a cull than a drop in its pay and privileges. To me this is crazy. During the private section recession of 2007-09, jobs were saved by short-time working and pay cuts. The trauma of unemployment was spared for millions this way. What's wrong about doing this now?

Otherwise I am pleased to see the end of ring-fencing in local government so that we can become proper grown-ups rather than looking up to the centre all the time for a script - and blaming them when it all goes wrong. Local Government has suddenly got interesting.

As for the VCS and social enterprise sectors, I hear there's some funding for Big Society projects and so on. Let's see what this looks like. The message around Big Society is floundering badly and they need to put someone up to sell this properly to the people - Nick Hurd would be ideal were he more senior, Letwin would be good.
As it is, it is no-one's day job - except the new and relatively unknown Nat Wei - to get this important idea over to people on the GMTV sofa.

Overall though, this is what we all expected, I think.

Measuring the Value of Time

One of my favourite activities is networking. Or it used to be. Now that I am on my own I notice that every minute has to count. Every meeting has to be shone through prism of business-necessity. There's no room in my diary anymore to chew fat or meet for the hell of it.

While my friendships are not suffering, I am taking less of those requests to meet up to discuss a new idea or with people who want to pick my brains. Not because I don't want to - I enjoy spouting and find most people interesting - but because I could, if I chose, spend a day a week doing this. As one of my more direct friends put it to me as I was agonising, `Are you a business or a helpline?'.

I had a very enjoyable phone call last week with Liam Black who set up wavelength a couple of years ago. He went through all the shit I am having now and knows the score when it comes to dealing with requests he has no time for. People like Liam are, for me, a bit of a life-line just now, along with several others you won't know like Mark Griffiths and Rob Harris - all entrepreneurs with their nuts on the block every day - so to speak.

Of course, aren't Liam, Mark et al doing for me what I am now not so willing to do for others? Yes and no. Yes, I get a lot from each of them. No in that I hope I reciprocate and make it feel worthwhile for them, on some level.

The truth, despite my bravado, is that I am a sucker for calls for help, especially if that person is nice or attractive or both. People's ideas tend to engage me and I know that in a half-hour I can often make a big difference (or so a couple have told me). So I won't be ignoring emails or sending back demands for payment - but I will be a bit more discriminating about who I help and for how long.

For as Liam Black correctly said, "Time is my only resource".

Paying the Price

Until today I had never got up at 4.30am before for work. But I had a meeting with a Director in the biggest local authority in England and he could only do 9am. So I took no chances and caught the 5.30am from Ely which landed me safely in Birmingham for 8am and a welcome bowl of porridge.

At the moment, I am, it feels paying the price of entrepreneurship. Doug Richard once defined the main condition of entrepreneurs as one of` anxiet’y. To that I would add frustration, loneliness and, occasionally, tears. While there are pretty reasonable days, many evaporate in IT problems, invoicing and queues at the Post Office. I have found reserves of anger that I never knew I had.

Of course none of this goes down that well at home. I have swopped the life of a busy hunter-gatherer CEO, bringing home a reliable 80-odd grand for a future of loans, no income, profound uncertainty and, for now, even longer hours than ever. Keeping it all up as a father, husband and citizen isn’t proving easy. I can’t even say anymore that I am at least keeping us all from the wolf at the door.

So why do this? I ask myself, some days, believe me. There is another living for me – bit more speaking, writing and bit of consulting. A decent wad. But isn’t this a bit of a cop-out at 41 I ask myself? I have always felt its important to do what I preach. If I want to change the public sector, then I bloody well need to do something about it myself. Yes, I will chatter with the chattering class, but I will also get stuck in too. This has always been my way.

The challenge is not to break myself proving it.

Let's grab more vote for the Social Enterprise Party

Hard days these. On one side the long-distance running of setting up a new venture. Lonely, pressurised, anxious. On the other, the raft of things that suck up my time but also keep me sane - Councillor, School Governor, Trustee.

Like a lot of people, I am actually well-suited to portfolio-living. But try as I might it doesn't pay the bills. And new busineses require, really 90% plus of your time. This one is getting about 75% - and I am now bursting at the seams.

However, I am ignoring the textbook and carrying on plural. Part of my reason for setting up in business is becoming free. Chucking in my community commitments is kind of defeating the objective. This is why although Stepping Out is not a social business in the technical sense, it feels like it is because I am clearly foregoing work and profit to do other stuff that is essentially, given-time.

Stepping Out's area of work - helping social enterprises emerge from the public sector - is at last being talked about. My good friend Peter Holbrook of SEC isn't convinced that these emergent enterprises should all qualify as social enterprises. I see his point - they are often legally still quite tied into the state, particularly Foundation Trusts. But my argument has always been that there's a big, ambiguous space emerging between straight profit-driven FTSE100, City capitalism and simple charities. This large praire contains thousands of organisations rom socially minded businesses through to public sector spin-outs. A new and growing `centre-ground' between pure white of charity and red claw of turbo-capitalism.

Being a politician I see this new space as up-for-grabs by the Social Enterprise Party. Much rather us go in and co-opt these people than leave untended a huge flock of similar-minded organisations which could widen our movement. This debate will rumble on in its friendly fashion. Although I disagree with Peter on some things, he is one of the best things that has happened in the social enterprise sector for many years. I just hope he is able to expand SEC to absorb this burgeoning and unchallenged middle-ground.

Hutton Delivers

For policy-geeks like me, these are great times. Things which I have been obsessed with for years - like public sector pensions, are finally being dealt with. Shame it has taken the near-bankrupcy of the country to get us there, but here we are.

Yesterday, former Labour Minister John Hutton nailed this issue for what it is - one of fairness, not only between public sector staff and the rest of us - but also, less conspicuously, across generations. The Baby Boomer generation is about to retire - en masse. Many of them will live into their 90s and beyond, ensuring their retired-life is nearly equal in years to their time in paid work. Paying for this will be those left working - a much smaller cohort of people which has had to pay for its own education and paid over the odds for property owned, on the whole, by this older generation.

Yesteday's report, then, was calling time on this generation of privilege. No final salary deal - just a lifetime average. No retirement at 60 - go to 65 like the rest of us. And pay more in if you want if you want more out. Just to give you an example, my own pension to which I have paid 5% of my salary for 15 year is worth considerably less than my brother's, who also pay in 5% - who has been working for a local authority for less than three years. His pension is, in effect, worth an extra 30% on his salary, were he to enjoy comparable benefits through a scheme like mine.

Isn't this all about levelling down? Should we not be talking about levelling up? Well we should. But the only way to do this to encourage the majority of private sector staff without pensions to take one up so that 85% of people across ALL sectors - not just one - provide for retirement. And the only way to do this is to
untie the Government's hands from its massive obligations to former state employees. At the moment, the unfunded pensions `black hole' is 790 billion. It doesn't leave much spare for encouraging everyone else through tax-breaks etc to kick off a private pension, does it?

So I was delighted with Hutton yesterday. Seeing Dave Prentis and Co trying to defend the indefensible make me queasier that usual, particularly as all that lot are, themselves, on up to 200k (Derek Simpson being the best paid), living for free in union property etc. Not exactly in tune with the lives of ordinary people, I would suggest.

On Losing Our Child Benefit

So busy today I only caught the planned cut in CB on the BBC News at 9pm. Every family with a higher rate taxpayer to lose it. That included us and many of the people we know. We'll lose about a grand and a half - over two grand if a third kid ever arrives. Feels quite tough on people just into higher tax, not so bad for proper high earners.

My wife's reaction was that fair's fair, we all have to take the hit and at least this isn't regressive. I tend to agree. Middle class welfare - or univeralism as it is euphamistically called - is supposed to be what keeps us all signed up to the welfare state. Personally I think this is out-dated and today is a step in the right direction.

The other stuff from Osborne today. A 500 pound cap on benefits is ok until you look at Housing Benefit in the capital and high-rent cities like Brighton. People will be forced to move on - or become homeless. While it will eliminate the lunacy of people being given property that is clearly far, far nicer than their working equivalents, at the other end it will hurt a lot of people, which does concern me.

Overall, I am with Frank Field, IDS and others in taking a long, hard look at the welfare system. The postwar settlement has long left too many people to languish and we have, in effect, made work the exception rather than the rule for too many people in too many parts of the UK. This furthers inequalities because people who don't work lose their health, self-respect and future earning capacity faster than anyone else.

Indeed I don't think that my last organisation, Speaking Up, would have had nearly as many people on its books not for the mass welfare that many of our clients had an entitlement to, which meant, for nearly everyone, getting work meant a world of pain and complexity with your benefits.

Welfare is just one staging post in reform of the Beveridge settlement of the late 1940s which is long overdue. The best thing I have read setting out a positive future for the public realm - neither statism or economic consumerism - is the vision of the `social citizen' set out in the 2020 Public Services Trust's final report. Well worth a read.

Why this, wny now?

People often ask me if I am planning a political career, especially since I got elected as a Councillor. A good few people seem to think I might be good at it, whatever that means. As well as being in the wrong party in the wrong area of the country, I think the answer is no, certainly for my 40s. I am wedded to Suffolk, to fatherhood and to trying to stay married. None of these things seem very easy if you're in full-time politics.

But it's not just that. Most of you reading this will, at some level, be following a cause or calling. I have done that for most of my adult life, at first with Speaking Up and now with my new business, Stepping Out.

For although Stepping Out is my venture, and I hope it makes me money (it is losing me enough at the moment!) it is also an expression of my political purpose. Not for a `smaller state' but of public services provided by vibrant, business-like social enterprises which are are part of our civil society and meshed into our social fabric rather than run by the City, Whitehall or the local state.

Although the left think they have the field to themselves, idealists come in all shapes and I have always been one of them. And Stepping Out is as much about my mission and values as Speaking Up ever was.

Now if, like us, you have a drive to change something there are three possible options. The first is that you join an organisation already on the case. The second is that you enter politics and take it up that way. The third is that you take action and move a very small part of the mountain, hoping it will encourage others to join in.

The truth about politics and politicians is that most of them fail. They achieve very little, nearly always. Even Blair, when you remember he had 13 years. By going into politics, assuming I could ever get elected, I would, in effect be trading a strong for a weak chance of making an impact.

And joining an organisation? I don't see many orgs currently competing this space, not at a serious level yet - though I can see troops massing in the distance. I am, by temperament, a starter not a joiner and, if I am honest, not the even the best CEO in my village, never mind the sector as a whole. While I have my talents, being a big-time CEO isn't one of them.

Is this it then - council forever? No and who knows what will happen later, but I think I know now why I am setting up this new venture rather than throwing in my lot with politics - or joining an organisation.

The Glories of Sabbing

Believe it or not, I used to be Hunt Saboteur. Well, not a proper one, a fellow-traveller in the back of a diesel-stinking Land Rover to be precise. It was winter 1988, I was in my first year of Uni and still wondering who I really was. I had hooked up with a vegan bloke called Marcus (still a great friend, still a vegan) who was a proper Sab - out every weekend, the odd face-off, fearless and, of course, very posh (they all were). I had a sort of late-adolescent crush on Marcus, mainly because he was so much more confident, articulate and taller than I was. Not Maurice, exactly, but certainly he was certainly the bloke I most admired, by a long shot, those many years ago.

What got me onto this was a bike ride I had this morning with my dog - when out shot a fox across the road and into a bush. For one of the things I never saw when sabbing was a fox. My abiding memory is of being as cold as I have ever been, sat on a hard bench next to a bunch of teeth-chattering students.

My position on fox hunting has changed and it hasn't. I was never passionate, if I am honest, about the issue. I wouldn't do it myself but, particularly now I live in the country I can see it is part of the warp and weft of life in rural areas. I can understand now why the ban caused such a rucus.

So we change and we don't change. Thankfully, I am no longer the lonely, confused 19 year old searching for a cause. And, unless Nick Clegg is subliminally my new Marcus, my attraction to confident, passionate public schoolboys is also, like fox-hunting itself, now part of the past.

More Joys of Entrepreneurship

Well, I got through yesterday. Gareth at HSBC got me sorted in an impressive 40 minutes. My list was two-thirds ticked by the end of the day - and I now have an impressive accounts-lady who I am to meet on Friday to hand over my pile of receipts.

The only frustration yesterday, and I nearly wept, such is my ineptitude, was getting my new printer to speak to my new MacBook Pro (of which more later). Having assiduously followed the steps, and even put my `No Interuptions' sign on my door - usually only put up during client-calls - could I make the damn thing work? `Print driver cannot be read - do you want to report anonymously to Apple?' it kept saying. No, I responded, my eyes pricking.

One of the things about new businesses is deciding where to locate yourself. At the moment I am in the spare room. I am consequently regularly regaled by rioting small children banging on my (locked) door, the music from Peppa Pig and Cbeebies for hours at a time and, on the bad days, visits from all of their friends from `Tadpoles'. Pretty intolerable.

My Big Idea is for a garden shed. Not one for the mower but a fancy one that I can have as a proper office. My father in law has made one of those Shepherd Huts you seen in upmarket mags. The Barbour jacket crowd love them apparently. Mine for three grand. While they retail at over ten, I am not sure I quite stretch to that. But Peppa Pig might change my mind.

Finally Apple Macs. These are without doubt genius machines, a pinnacle of achievement etc. But for a 41 year old who has been using Windows for 20 years, they are a bloody mystery. I just can't get on with mine. I can't find things, store things, even, to be honest, get the damn thing to do anything I want. Fortunately I can fit Windows to it, which I will, but that's not the point. I am wishing I had got a Dell Vostro for half the price.

Anyway, better get back to the joys of entrepreneuship.

Welcome to the Brave New World of the Naked Entrepreneur

Today looks like it will rain again. Sat at home, trying to get this business going, entrepreneurship doesn't look like the brochure. Trying to get a new printer to work. Two hours going through receipts. A fruitless trip to the bank where Gareth can't open an account today but he'd love me to meet their New Business Manager next week. Hardly Dragon's Den, more Soggy Hole. I will drop the kids, walk the dog then settle in for another day of this.

Today I have to contact an elusive book-keeper and track down a contract to use with Associates. Then call my web-guy, my IT guy and the woman who is doing my stationary. It feels like three jobs in one, half of which I am so poor at I should qualify for some kind of assistance (piles of receipts just baffle me, like dyslexia).

This would all be fine - leisurely even - without the knawing anxiety that Every Day Counts (I have about a year's finance). Every hour spent trying to decide which web-hoster to use is an hour of no pay and no sales. The pressure can feel, in a slightly comical way, quite intense, in these four spare-room walls. The noble cause for which I am fighting is, of course, that of freedom, of manning my own ship and possibly, just possibly, getting it all right by helping lots of new social businesses emerge blinking into the light after years entombed in the public sector.

To this end, I will today borrow enough money to buy me a new top of the range Audi A3 - except this money will go mainly on ensuring we stay afloat during year one while I am trying to make a profit. The Ford Focus has a long way to go yet.

Risks like this - on top of a similar amount of my own cash spent so far - are the essence of entrepreneurship. Risk is to entrepreneurship what passing and heading are to football. Not the whole story - there is tackling too - but absolutely central.

I am sometimes irritated by the over-liberal use of the term `entrepreneurial'. It has come to mean just about any work activity that is outside the box. `X is highly entrepreneurial' you will hear of some someone who hasn't put his financial life on the line but come up with an idea for a new product or service. It gets conflated with creativity. But it's really about blood-and-guts risk-taking.

My loan gets me to September next year, with a fair wind. I hope to be able to live off the proceeds of the business after that. In two years I will hopefully make a bit more than I did as a Cex. After that I hope to be in a much better place altogether financially.

Of course it could go the other way. I might end up eating humble and getting any job I can. Which is why the reward has to be worth it. This isn't a rehash of last week's piece, just an underlining of why it is perfectly OK for entrepreneurs to make money.

However, that all feels like a long way from today. I am looking forward to another long day on my own. The highlight will be Gareth from HSBC calling me back - if he does (that's another thing, being seen by people like Gareth as somehow a bit unfortunate - I think he has me down as a Redundancy). I will squeeze in a run later, between the showers, and possibly, come back feeling better than when I set out.

Welcome to the Brave New World of the Naked Entrepreneur!

Who will vote Lib Dem in 2015?

What an interesting 24 hours in national politics! I had the good fortune to be sat next to (Baroness) Ros Scott, President of the Liberal Democrats at our local fundraising back last night. We agreed that Ed was best for us as he inevitably will be constrained from moving to the centre, leaving more space for the Lib Dems. While I have a residual worry that Ed might lose so badly as to let the Tories back on their own, I am inclined to agree.

Ros was great company. While operating at the top of the tree, so to speak, she did her time as a councillor and activist. Indeed her credibility with members helped to sell the Coalition agreement to a dazed and confused membership whose support was critical in those vital four days following the General Election.

But where will our votes come from in 2015, I asked her? I am probably not the only Lib Dem who fear being taken on the left by Labour and on the right by a liberal Tory Party in a two-horse race. Ros was more sanguine. Yes, she says, we will lose voters and seats, particularly in northern cities. But we will gain votes too, she argues, in middle-England from Soft-Cons who now see as as a more serious party. In other words, we abandon the left and share the centre and centre-right with the Tories.

Is she right? Well, in numbers terms the centre and centre-right is the biggest space in UK politics. If Ed doesn't capture it, we should pick up votes there. But I am still struggling in my mind to work out who our own voter-coalition is made up of. In the past, it was ex-Labour people, the more affluent, liberal middle classes who didn't feel like Conservatives and the Celtic Fringe plus University towns and a few selected urban populations: Burnley, for example. This means Lib Dem seats in South-West London, Northern Scotland, Cornwall, the odd northern city.

I guess the future is about whether we can take some seats from the Tories in Southern England, given that it is highly unlikely we will hold on in the North. Predicting Election 2015 is almost impossible at this stage. But the following are I think givens: Labour will improve on its 257 seats and score at least 275 and possibly up to 300. For the other parties, it is much harder to predict due to the success or otherwise of the economy.

Whatever happens, the Lib Dems will fight as an independent party and will again seek to sell a distinctive set of policies which it will seek to embed into any future Coalition. The pitch will as a moderating force on the two extremes, using the 2010-15 Coaliton as proof of our ability and achievement as a party. Although it isn't often noticed, a big part of our argument is that multi-party politics are better than the tribal politics which have held this country back since 1945: North vs South. Rich vs poor. Capital versus labour. Big state versus small state, high tax versus low tax.

The reason I joined the Lib Dems was that the party seeks to go beyond these lose-lose conversations. Not a big or small state - but a reformed state. Not high or low tax but fair and effective taxes. Not unions or management but an economy in which we all hold a stake. Only once we move beyond class-war does this country stand a chance of moving forward.

It's Red Ed!

Ed Miliband wasn't the only winner today. I won 100 quid on my 4:1 bet after the election. And the Coalition won today. Because David Miliband was the only opponent we are really worried about. Members apparently went 54:46 for David, unions 60:40 for Ed. So he's already in their debt.

This is a seriously bad result for Labour. Ed didn't get the MPs or the Members. He's also too left-wing, not very good on telly and too geeky for the British electorate. I can't quite believe this has happened.

What will we see next? The battle-lines are now drawns. Ed and the Unions versus the rest of us. Ed is now the candidate of Unite, Unison and the RMT. He doesn't look ready. He is a lovely bloke, he has a real integity but I don't see him as a Prime Ministerial figure. Of course he will grow and he will move to the middle-ground - but he lacked the weight and political imagination of his older brother.

I really feared David Miliband. I could see him finding the pressure-points on the Coalition - and the chunks of its electorate that will waver. Ed won't be able to connect. Like all Labour leader of the past (before Blair) he thinks young voters and non-voters will come out for him. They won't. He has to win seats in the South and the South won't vote for Ed.

Overall, the Labour movement had a choice: a challenging new leader who would take them back to the middle-ground of UK politics. Or to do some comfort-eating and elect the candidate who makes them feel warm inside. To their credit, the Tories chose Cameron, we chose Clegg, both candidates who are not really `of' their parties - but who connect to voters. Ed is the opposite.

Interesting times ahead.

My Piece from today's Guardian on public sector pensions

Pensions are on many public managers' minds, particularly those involved with potential social enterprises that are about to "step out" of the public sector.

For some of these, pensions are a big headache.

There are several public sector schemes, each a little different, but all have three things in common. One is that they are a "defined benefit" – you get a proportion of your final salary linked to inflation. The second is that the employer (the state) contributes up to 20% of the employees' salary – much more than is now usual in other sectors (0%-6% is fairly common). The third is that most schemes are in deficit – meaning that the payouts are not covered by those paying in. The bill for this is picked up by HM Treasury, and the most recent official estimate of the total cost of these unfunded liabilities is £770bn.

All this is highly relevant for the divestment of public services to social enterprises and the third sector. If the government insists that former public sector workers are offered a "broadly comparable" pension once they move into these new bodies, then we have a potential show-stopper on our hands. Taking on these pension commitments creates a huge obligation for the third sector.

I spoke recently to a chief executive in the third sector who had received a bill for £360,000 from the local authority pension scheme for four members of staff the charity had taken on from the public sector a few years earlier. The bill reflected a deficit in those employees' pensions that had built up over the whole of their employment with the local authority, not just the three or so years with their new employer. The deficit had, in effect, been dumped on the charity. Just imagine the damage this causes to a medium-sized charity. And this is aside from the resentment felt by other employees in the same organisation, who do not have these kinds of deals.

Any charity today looking at taking on state services may therefore face a local authority insisting it took on responsibility for funding staff pensions.

This is why the third sector and new social enterprises have to read the small print on pension deals. The handling of long-term pension liabilities is absolutely critical.

Lord Hutton's forthcoming review of pensions is a one-off opportunity to deal with this imbalance between public section pensions and those in other sectors. Most observers are confident that Hutton will raise the employee contribution. But it is unclear whether he will recommend the abolition of the Treasury's Fair Deal guidelines. If he did, it would enable social enterprises and third sector organisations to move new staff out of public sector schemes and into money-purchase schemes, and to pay pensions at existing charity levels, usually about 6%, without generating future liabilities.

It would also mean that all employees in an organisation would be on a similar deal, which is better for workforce morale. Former public sector employees would still be on a slightly better deal than existing staff, however, because the transfer regulations, Tupe, would give them more favourable sick pay and other benefits. But the really big differences created by the pensions gap would be eliminated.

Some charities have reached an understanding with public sector bodies so that staff moving out of the public sector will stay in their existing pension scheme under "approved provider" arrangements. This will often be underpinned by a short to medium-term commitment from commissioners to meet the costs of the pension scheme, now and in the future. But this is only useful for as long as commissioners can afford to pay. Once this ceases to become the case, it automatically becomes the charity's problem too.

Better to avoid that by seeking to get people coming out of the public sector on to money-purchase schemes as soon as they leave state employment. Let's hope Hutton's review allows this to happen.

From Liverpool

At Lib Dem conference where I am courtesy of Charities Aid Foundation and the Charities Commission, whose respective Question Time events I took part in yesterday and today.

The big talking point is the Big Society. What is it? How is it going to take shape? What are the implications for charities large and small. The sector seems to split into three camps. One is deeply cynical, adopting a Unite-like attitude. `What if no-one shows up to the Big Society?' scoffed a TUC delegate, unaware, it seems, of his own movement's drive for a more associcative and communitarian society
For this lot, it's all about mocking the idea that everything can be done with volunteers. Then they switch off.

The middle group, me included, feel energised and optimistic but a bit disenchanted with the rather simplistic and un-inclusive approach of the administration to date. This seems to paint the charity establishment as a fat, left-leaning, self-regarding force of conservatism which mustn't be allowed into the tent. Naive stuff, if you want this agenda to fly.

The third group - and there aren't many of them - are the direct beneficiaries - the chosen few of the Big Society who are being directly sponsored to make it all happen. These are often new arrivals, refreshing new faces which, quite appropriately, have taken new angles on old problems, giving the existing charity sector major food for thought.

Four months into the administration, the Big Society has, perhaps to everyone's surprise, become a defining theme. Cameron himself has nailed his own reputation to its success. The difference between this and a Labour Mega-theme is that there is no master-plan. Indeed, they appear to have gone the other way and we have No Plan.

The truth is that they could have done with saying more. Not much more, but at least a laying out of idea - an opener for discussion. We are at a perfect moment for a national conversation on the issue - but every conversation needs an opener, every party needs an animating spirit.

So too do we need a clear, visible champion for this who can communicate comfortably and who is willing to `put out' in ways which centre the conversation, give it traction and reality. As it is, we're all floundering. Which is a shame because people are willing, at this early stage in the Coalition, to engage and help. Even the traditional charities.

So let's make the Big Society a Big Tent and we will soon be able to give this young idea its underpinning.