One of the things that people in social enterprise go on about most is about reinvesting the profit in the mission- and this being the differentiator between social and ordinary business.
What they seldom tell you is that there aren't that many social enterprises out there that actually make any profit. Some, of course, blunt their profitability by 'doing business differently' - which, of course, is fine, if it the social benefits can be demonstrated. But many more simply are not profitable full-stop, and don't have a particularly strong story on outcomes either.
When I set up my first organisation, I didn't really think about the reinvestment argument. Nor did I think particularly about how we were set up. Having a social mission was sufficient, I thought, to ensure we would go some way to achieving something more than keeping ourselves in jobs.
About a decade in, I wasn't so sure. In practice, all sorts of things ended up coming between the aims of the organisation and its mission. The biggest was the needs, and interests, of the organisation itself. Feeding, tending and nurturing the machine somehow put the mission into the background. Sure, a healthy organisation meant a bigger likelihood of being on-mission, but, somehow, the organisation felt, to many of us leading it, and end in itself.
Is this unique? I don't think so. When I founded my latest venture, Stepping Out, I decided to approach the question of mission differently - through a profit-making company. We do have a mission - rather grandiosely - to change the way public services are delivered in the UK. We are here, primarily for that reason, more than to provide ourselves with a fine living.
But we also seek, quite unashamedly, to make a profit and we focus hard on this too. Partly because this allowa us to be successful, live reasonably well and grow our founding mission. And partly because this does create a meaningful surplus which we can share with others through the Stepping Out Foundation.
I suppose what I am getting to here is that our being a for-profit organisation doesn't in any way detract from our primary mission - to change public services. Nor does it pull us away from or our secondary mission - to use a decent slice of our profit to support early-stage social entrepreneurs.
In fact, I would go as far as saying we are probably a bit more effective on both counts than had we not set out with profit at least partly on our minds.
Which brings me to my main point here: contrary to the sensibilities of most UK people who operate in the 'for good' sectors, I do not believe there is a simple and linear relationship between profit-seeking and doing good, with the one only rising when the other falls.
It just isn't that simple. You can be non-profit seeking and do very little good. Equally, you can be profit maximising and still, even accidentally, do a lot more good than your typical 'for good' venture. Does being consciously socially-minded matter? Yes I think it normally does - but it doesn't guarantee any social good ever will come of the business. .
The bottom-line here is that a social mission doesn't necessarily produce social outcomes any more than a pure-profit mission always produces profit. You can miss. You can get sucked into your own myth that your very existence constitutes a social benefit (seldom true). A social mission can actually give you an excuse not to do the really demanding things necessary to make a profit.
None of the above is to say that there are not many for-profit organisations that maximise their profits at the expense of social good. One doesn't need to look far for examples.
But there are many organisations in the public, voluntary and SE sector that also subtract from their potential social impact in order to serve other goals, often for the sake of an easier life.
These, in my view, deserve just as much shit from the media as the for-profit ones that don't deliver socially. They are ripping people off just as badly as any poor-performing Work Programme prime. In essence, you can be not-for-profit and, in reality, be not particularly 'for good' either.
Saturday, March 31, 2012
Saturday, March 24, 2012
We spend all our money on people - so let's engage them
When I meet with chief executives or finance directors to discuss spin-outs in the NHS or local authorities, their first question tends to be: "Why do this?". Indeed, why not just privatise – or leave things as they are? If the "fat" has already been squeezed (a claim we hear constantly), where's the gain in spinning something out?
My answer in one word, is this: engagement. The people factor. According to a recent study by Prof Raj Sisodia (and corroborated by a Global Workforce survey of 90,000 workers in 18 countries by Towers Perrin), companies that score highly on employee engagement also perform better financially. Higher margins and more rapid growth are both proven dividends of an engaged workforce.
But aren't public sector workforces already highly motivated? Well, often they are not. Many love their jobs and are deeply committed to their clients. Yet, in the management culture prevalent in many large public sector organisations – top-down, remote and controlling – they give far less of themselves than, ideally, they should.
Even the language captures this. In the NHS, the terms "staff side" and "management side" are used to describe different elements in the organisation – like two armies lined up for battle. This isn't so bad in councils, but the "done unto" mentality tends to pervade. Relatively few people appear to feel permitted to make things happen; at least not without cover from above. The net effect of this is that you have organisations which, on quite a deep level, underperform. People simply zone-out, keep their heads down and survive.
According to the management writer Gary Hamel, disengagement is allowed to happen for one of three reasons. The first is ignorance. Management just doesn't get the fact that people often withhold the best of themselves at work – and do only what is required. Their innate enthusiasm, initiative, creativity and passion is seriously stifled, with a deleterious effect on the good the organisation is able to deliver.
I find this to be extremely common in the public sector. Only last week, I was was debating with an NHS organisation that wanted, very late in the day, to cancel a good-to-go staff-led spin-out because it was, in the funny-money world of the NHS, now "unaffordable". This was despite the catastrophic effect it would have on the engagement of the staff who, for 18 months, had been taking this forward as a practitioner-based venture. I saw not a flicker of awareness of this in the calculus of management's proposal to not go ahead.
The second reason we see mass-disengagement is indifference on the part of the leadership. Managers know, in their hearts, that people are flatlining but just don't care enough to do anything, perhaps because a callous corporate culture has robbed them of empathy. Again, I see this a lot, not least in the example just referred to.
The third factor at play is impotence. Managers often care a lot – but don't feel they can do much about what they see around them. Understandably, they see a system they can't change. They do what they can, but, perhaps sensibly, they don't burn themselves trying to buck the system and its norms. One otherwise extremely helpful and supportive manager in the example above fitted clearly into this category, in my view.
What organisations fail to grasp, says Hamel, is that we need forms of human organisation which maximise this potential for engagement. Only this, he argues, will bring productivity, innovation and quality to the levels we all want.
So are spin-outs the answer in the public sector? My belief is that they point in the right direction. They are normally smaller than the vast public sector empires from whence they came. They have freedom of movement and a clearer rationale and identity. Constitutionally, they are often staff-owned, even if this ownership stake translates only into a say in how the company is run, rather than cashable shares. Most importantly, they capture people's imagination. They re-animate the people setting them up. I have seen it time and again. People tend to buy in – and stay bought in.
Of course, they are not a magic bullet. I have seen several spin-outs that look, feel and operate like the organisations from whence they came. Nothing – not even the logos or company colours – change. People often don't even appreciate that they have moved from the public sector into a social business. Things don't move on. But, more frequently, I have seen big changes that manifest themselves in large steps forward in the way a company operates, its efficiency, effectiveness and competitiveness – and, interestingly, its level of measured staff happiness and absence.
You would think that armed with some good data, this would impress anyone I meet in the public sector. That this alone would be grounds for, just maybe, giving serious thought to spin-outs as a way forward. On occasion, it does. Really good people get it.
But, quite often, I see people glazing over. They either just don't believe it or can't quite see what greater engagement, delivered through a spin-out, could mean in terms of the vaunted goal of delivering more for less. Too many people think that better productivity is primarily about simply sacking people – and ordering the remaining people to work harder. The gains of a more engaged, productive workforce are not viewed as sufficiently cashable to be of any meaning.
Yet this is, perhaps, the biggest possible win of any of the spin-outs that I have seen.
My answer in one word, is this: engagement. The people factor. According to a recent study by Prof Raj Sisodia (and corroborated by a Global Workforce survey of 90,000 workers in 18 countries by Towers Perrin), companies that score highly on employee engagement also perform better financially. Higher margins and more rapid growth are both proven dividends of an engaged workforce.
But aren't public sector workforces already highly motivated? Well, often they are not. Many love their jobs and are deeply committed to their clients. Yet, in the management culture prevalent in many large public sector organisations – top-down, remote and controlling – they give far less of themselves than, ideally, they should.
Even the language captures this. In the NHS, the terms "staff side" and "management side" are used to describe different elements in the organisation – like two armies lined up for battle. This isn't so bad in councils, but the "done unto" mentality tends to pervade. Relatively few people appear to feel permitted to make things happen; at least not without cover from above. The net effect of this is that you have organisations which, on quite a deep level, underperform. People simply zone-out, keep their heads down and survive.
According to the management writer Gary Hamel, disengagement is allowed to happen for one of three reasons. The first is ignorance. Management just doesn't get the fact that people often withhold the best of themselves at work – and do only what is required. Their innate enthusiasm, initiative, creativity and passion is seriously stifled, with a deleterious effect on the good the organisation is able to deliver.
I find this to be extremely common in the public sector. Only last week, I was was debating with an NHS organisation that wanted, very late in the day, to cancel a good-to-go staff-led spin-out because it was, in the funny-money world of the NHS, now "unaffordable". This was despite the catastrophic effect it would have on the engagement of the staff who, for 18 months, had been taking this forward as a practitioner-based venture. I saw not a flicker of awareness of this in the calculus of management's proposal to not go ahead.
The second reason we see mass-disengagement is indifference on the part of the leadership. Managers know, in their hearts, that people are flatlining but just don't care enough to do anything, perhaps because a callous corporate culture has robbed them of empathy. Again, I see this a lot, not least in the example just referred to.
The third factor at play is impotence. Managers often care a lot – but don't feel they can do much about what they see around them. Understandably, they see a system they can't change. They do what they can, but, perhaps sensibly, they don't burn themselves trying to buck the system and its norms. One otherwise extremely helpful and supportive manager in the example above fitted clearly into this category, in my view.
What organisations fail to grasp, says Hamel, is that we need forms of human organisation which maximise this potential for engagement. Only this, he argues, will bring productivity, innovation and quality to the levels we all want.
So are spin-outs the answer in the public sector? My belief is that they point in the right direction. They are normally smaller than the vast public sector empires from whence they came. They have freedom of movement and a clearer rationale and identity. Constitutionally, they are often staff-owned, even if this ownership stake translates only into a say in how the company is run, rather than cashable shares. Most importantly, they capture people's imagination. They re-animate the people setting them up. I have seen it time and again. People tend to buy in – and stay bought in.
Of course, they are not a magic bullet. I have seen several spin-outs that look, feel and operate like the organisations from whence they came. Nothing – not even the logos or company colours – change. People often don't even appreciate that they have moved from the public sector into a social business. Things don't move on. But, more frequently, I have seen big changes that manifest themselves in large steps forward in the way a company operates, its efficiency, effectiveness and competitiveness – and, interestingly, its level of measured staff happiness and absence.
You would think that armed with some good data, this would impress anyone I meet in the public sector. That this alone would be grounds for, just maybe, giving serious thought to spin-outs as a way forward. On occasion, it does. Really good people get it.
But, quite often, I see people glazing over. They either just don't believe it or can't quite see what greater engagement, delivered through a spin-out, could mean in terms of the vaunted goal of delivering more for less. Too many people think that better productivity is primarily about simply sacking people – and ordering the remaining people to work harder. The gains of a more engaged, productive workforce are not viewed as sufficiently cashable to be of any meaning.
Yet this is, perhaps, the biggest possible win of any of the spin-outs that I have seen.
Why Employment Law is an Ass
A few months ago a little-known venture capitalist called Adrian Beecroft wrote a report for the Prime Minister, setting out a new proposal that would allow any employer to fire anyone, with compensation, if in their view things weren't working out. No hearing, no capability assessment - just a P45.
This didn't go down too well. Many, rightly, saw it as tipping the scales too far in favour of management, creating a nervy workforce terrified of getting the wrong side of their boss.
But ask any charity chief executive over a glass of wine what they think about employment law as it stands and you'll get the same answer: the system is a joke. Employment law costs charities millions, causes massive stress and, saddest of all, rights few wrongs.
After a few glasses more, you'll also get plenty of sarcasm about the system. It has become a lawyer-fest - 218,000 claims in 2010/11 in total, which is 44 per cent up on two years before.
As an employer, I have been on the wrong side of several employment tribunals. Being cross-examined at one makes you feel as if you are some kind of criminal. It seems surreal and not a little twisted. You have a trio of judges (yes, three for each tribunal) who are paid God-knows-what by the taxpayer for dissecting what is often low-grade, he-said, she-said 'evidence'. It feels like a farce. That's because it is.
So what needs to be done? Three things. First, there needs to be a place for 'safe conversations', which would allow employers to say "this isn't working out" without it leading straight to a solicitor's letter claiming bullying or constructive dismissal.
Second, every tribunal application should be put through the conciliation service Acas before it is allowed near a tribunal. This allows a mediated settlement rather than the well-paid confrontations so beloved of the legal profession and the judges.
Finally, everyone who wants to initiate a tribunal should put up a returnable deposit that is lost if they lose, say, £500. This will get rid of the most vexatious claims in one go.
Sounds familiar? By and large, this seems to be what's coming out of the coalition after the shock and awe caused by Beecroft earlier in the year.
It's easy to forget, but small employers, including charities, are terrified of existing employment law. One nasty incident can ruin a charity, and the third sector tops the league table for employment tribunals. Some cases merit the time and money that goes on them: rank injustice deserves its day in court. But most of what gets into the system shouldn't really be there at all.
This should soon change. Up and down the land, people will cheer discreetly - chief executives, colleagues of underperforming staff and HR managers. Everyone, in fact, but the opportunists and obsessives who, in my view, bring a large proportion of claims. And, of course, their lawyers.
This didn't go down too well. Many, rightly, saw it as tipping the scales too far in favour of management, creating a nervy workforce terrified of getting the wrong side of their boss.
But ask any charity chief executive over a glass of wine what they think about employment law as it stands and you'll get the same answer: the system is a joke. Employment law costs charities millions, causes massive stress and, saddest of all, rights few wrongs.
After a few glasses more, you'll also get plenty of sarcasm about the system. It has become a lawyer-fest - 218,000 claims in 2010/11 in total, which is 44 per cent up on two years before.
As an employer, I have been on the wrong side of several employment tribunals. Being cross-examined at one makes you feel as if you are some kind of criminal. It seems surreal and not a little twisted. You have a trio of judges (yes, three for each tribunal) who are paid God-knows-what by the taxpayer for dissecting what is often low-grade, he-said, she-said 'evidence'. It feels like a farce. That's because it is.
So what needs to be done? Three things. First, there needs to be a place for 'safe conversations', which would allow employers to say "this isn't working out" without it leading straight to a solicitor's letter claiming bullying or constructive dismissal.
Second, every tribunal application should be put through the conciliation service Acas before it is allowed near a tribunal. This allows a mediated settlement rather than the well-paid confrontations so beloved of the legal profession and the judges.
Finally, everyone who wants to initiate a tribunal should put up a returnable deposit that is lost if they lose, say, £500. This will get rid of the most vexatious claims in one go.
Sounds familiar? By and large, this seems to be what's coming out of the coalition after the shock and awe caused by Beecroft earlier in the year.
It's easy to forget, but small employers, including charities, are terrified of existing employment law. One nasty incident can ruin a charity, and the third sector tops the league table for employment tribunals. Some cases merit the time and money that goes on them: rank injustice deserves its day in court. But most of what gets into the system shouldn't really be there at all.
This should soon change. Up and down the land, people will cheer discreetly - chief executives, colleagues of underperforming staff and HR managers. Everyone, in fact, but the opportunists and obsessives who, in my view, bring a large proportion of claims. And, of course, their lawyers.
Saturday, February 25, 2012
Vain is Not the Same as Bad: Why we should think again about Emma Harrison
I could not help but notice the almost universal schaudenfraude that greeted the demise this week of Emma Harrison. On one level I enjoyed it too. Her particular brand of icky self-promotion isn't pleasant. She is clearly self-obsessed. As one of her colleagues commented, she sought publicity 'like a burning aircraft seeks the ground'.
But I regret her demise. Why? Three reasons. Firstly, while I don't care much for her style, she spent 20 years of her life building a successful company from nothing. Anyone who's set up a company knows how bloody difficult it is to get things right. And growing companies is, well, massively complex. Show me someone who has done it without some massive f--k-ups on the way and I'll give you a free holiday. Yes, she's made money, but she's taken some risks, employed a lot of people and found a lot of people jobs. All on a scale few of us will ever achieve. If you'd done all of that, you'd feel like you deserved a lot of money.
Secondly, I don't think, in light of what actually appears to have happened, she needed to go. Harrison's company, which employs thousands, had, it is being alleged, a few people on the thieve. They no longer work there. The police are looking into it. It looks fairly clear, unless I am missing something, that this was limited to a few hands. Similar things to those being investigated at A4E actually happened a few years ago in a charity I worked for. A couple of people took the charity for tens of thousands. They were arrested, banged-up, end-of. Checks were lax, management took a bollocking, life went on. It happens every day. Quite why Harrison felt the need to resign I don't know, unless there's something deeper we're all about to find out about. My sense is that she panicked. Now it looks a lot worse than it probably is: A4E is now ' troubled' and EH has left because of 'fraud'. Whoever is advising her is not doing very well.
Thirdly, and finally, there seems to be a whiff of misogyny in all of this. I saw it in the case of Andrea Hill, the former CEO of Suffolk County Council. She seemed fair-game, partly because she was a woman. It is hard to imagine there being such a furore over A4E if some greying old bloke had set it up. Indeed, plenty of such people have set up public service firms, such Rod Aldridge of Capita, and are now lionised by the establishment, rightly in some cases. We seem to have it in for women of a certain type, particular ones who get above themselves a bit, like Harrison, and Hill did, at times. We're very unforgiving.
Of course, were A4E beyond reproach as a company, I am sure things would have been easier this week. Were it not the case that one hears quite a few not-so-nice things about the way they do things, there may well have been more people rushing to her defence. But what bothers me more is that, without a lot of reflection, a lot of intelligent people have defaulted into a blind condemnation of Harrison, her company and the role of other sectors in public service provision.
This is wrong. Being vain and irritating is not the same thing as being bad. Harrison should have stayed put at A4E and Cameron should have encouraged her to keep her post in Government. Her going does not make Britain a better place.
But I regret her demise. Why? Three reasons. Firstly, while I don't care much for her style, she spent 20 years of her life building a successful company from nothing. Anyone who's set up a company knows how bloody difficult it is to get things right. And growing companies is, well, massively complex. Show me someone who has done it without some massive f--k-ups on the way and I'll give you a free holiday. Yes, she's made money, but she's taken some risks, employed a lot of people and found a lot of people jobs. All on a scale few of us will ever achieve. If you'd done all of that, you'd feel like you deserved a lot of money.
Secondly, I don't think, in light of what actually appears to have happened, she needed to go. Harrison's company, which employs thousands, had, it is being alleged, a few people on the thieve. They no longer work there. The police are looking into it. It looks fairly clear, unless I am missing something, that this was limited to a few hands. Similar things to those being investigated at A4E actually happened a few years ago in a charity I worked for. A couple of people took the charity for tens of thousands. They were arrested, banged-up, end-of. Checks were lax, management took a bollocking, life went on. It happens every day. Quite why Harrison felt the need to resign I don't know, unless there's something deeper we're all about to find out about. My sense is that she panicked. Now it looks a lot worse than it probably is: A4E is now ' troubled' and EH has left because of 'fraud'. Whoever is advising her is not doing very well.
Thirdly, and finally, there seems to be a whiff of misogyny in all of this. I saw it in the case of Andrea Hill, the former CEO of Suffolk County Council. She seemed fair-game, partly because she was a woman. It is hard to imagine there being such a furore over A4E if some greying old bloke had set it up. Indeed, plenty of such people have set up public service firms, such Rod Aldridge of Capita, and are now lionised by the establishment, rightly in some cases. We seem to have it in for women of a certain type, particular ones who get above themselves a bit, like Harrison, and Hill did, at times. We're very unforgiving.
Of course, were A4E beyond reproach as a company, I am sure things would have been easier this week. Were it not the case that one hears quite a few not-so-nice things about the way they do things, there may well have been more people rushing to her defence. But what bothers me more is that, without a lot of reflection, a lot of intelligent people have defaulted into a blind condemnation of Harrison, her company and the role of other sectors in public service provision.
This is wrong. Being vain and irritating is not the same thing as being bad. Harrison should have stayed put at A4E and Cameron should have encouraged her to keep her post in Government. Her going does not make Britain a better place.
Wednesday, February 22, 2012
Caught in the Middle
Last week, the courts prevented a long-planned social enterprise from being created in Gloucestershire. The protaganist here wasn't Unison or the BMA but a 68 year old bloke who believed that such services ought to be kept in the NHS - and open to NHS providers to compete for.
Ahead of a verdict, the social enterprise has been pulled. Game over.
The net result of this will, of course, be a procurement exercise, the outcome of which might be well be not an NHS provider but a private sector one. This gentleman may rue the day he successfully stopped a social enterprise in its tracks.
So what does this mean for social enterprise and mutuals in public services?
It definitely brings EU competition law clearly into the frame when NHS bodies and Councils are looking at spin-outs. Competition law states fairly clearly that where there is a market for services - even when these are social or healthcare services - there should be open competition. Exception can be granted - but only where there is a clearly evidenced, higher reason for this.
However, there are ways to address this which also give nascent social enterprises a chance before facing the competitive market. Firstly, they can operate as independent business units in 'shadow' ahead of formal procurement - so that a trading record can be established.
Secondly, there is often not a straightforward procurement solution to the complex problems that a potential social enterprise is being set up to address. Councils in particular do often want to see a key local player in place which addresses a host of challenges, some of which do not easily lend themselves to procurement..
Thirdly, an NHS body or Council can set up a joint venture with the competition law satisfied by the process involved in selecting a JV partner. We haven't seen much of this so far, but I suspect it will become more common as procurement becomes more of a roadblock.
Ahead of a verdict, the social enterprise has been pulled. Game over.
The net result of this will, of course, be a procurement exercise, the outcome of which might be well be not an NHS provider but a private sector one. This gentleman may rue the day he successfully stopped a social enterprise in its tracks.
So what does this mean for social enterprise and mutuals in public services?
It definitely brings EU competition law clearly into the frame when NHS bodies and Councils are looking at spin-outs. Competition law states fairly clearly that where there is a market for services - even when these are social or healthcare services - there should be open competition. Exception can be granted - but only where there is a clearly evidenced, higher reason for this.
However, there are ways to address this which also give nascent social enterprises a chance before facing the competitive market. Firstly, they can operate as independent business units in 'shadow' ahead of formal procurement - so that a trading record can be established.
Secondly, there is often not a straightforward procurement solution to the complex problems that a potential social enterprise is being set up to address. Councils in particular do often want to see a key local player in place which addresses a host of challenges, some of which do not easily lend themselves to procurement..
Thirdly, an NHS body or Council can set up a joint venture with the competition law satisfied by the process involved in selecting a JV partner. We haven't seen much of this so far, but I suspect it will become more common as procurement becomes more of a roadblock.
Saturday, February 18, 2012
Why the Tories are half-right about making it easier to sack mediocre people
A few months ago a little known venture-capitalist called Adrian Beecroft wrote a report for the Prime Minister, setting out a new proposal which would make it far, far easier for firms to fire people. It would allow any firm to release any person it chose, with compensation if, in the firm's view, things weren't working out. No hearing, disciplinaries, five-point plans - just a end to employment.
Of course, this didn't go down well with anyone, including the Lib Dems who, rightly, saw it as tipping the scales too far the othr way, creating a nervy workforce terrified of getting the wrong side of the person above them at work. Put into practice, Beecroft would, almost certainly, have led to abuses that would exceed those currently imposed by the army of people who use the current law to persecute their employer.
What we need, therefore, is something that runs down the middle. Here is where personal experience comes in. As an employer, I have been on the wrong side of more than one Employment Tribunal. Several in fact. Most are 'settled' meaning, that you do what is necessary to make the drain on your time presented by such matters disappear.
I have always been amazed at how many people can sign away the right to have their grievance properly looked at in a quasi-judicial setting when a fairly small cheque is waved under their nose. Friends I know who have not done this and gone all the way nearly always win - but feel like they have lost, such is the cost in time and lawyer bills.
In short, the system is indeed broken and needs to be reformed, urgently. Ask any charity CEO (not normally the most right-wing of people) what they think over a glass of wine and, to a person you'll get the same answer: the system is a joke, it deters employment, it causes massive stress and cost and it rights few wrongs.
After another few glasses, you'll also get plenty of sarcasm about the self-infated judges (there are three for each of these hearings) who are paid God-knows-what by the taxpayer for poring over what are mostly 'he said, she said' issues, that, by a freak of legal nature, have ended up in a courtroom.
So what needs to be done? Three things. Firstly, there needs to be a place for 'safe conversations' which allow the employers to say 'This ain't working and we would like to discuss a possible exit for you' without this leading straight to a solicitor's letter.
At the moment, it is very hard to have a normal conversation without your words being thrown back at you as evidence of 'constructive dismissal'.
Secondly, every application for a Tribunal should first be put through ACAS before it is allowed to go to a Tribunal. This allows a mediated settlement rather than the well-remunerated confrontations so beloved of the legal profession. Finally, every person who wants to initiate a Tribunal should personally put up a returnable deposit which is lost if they lose. This will, I can guarantee, get rid of most vexacatous claims in one go, including many of those I have had the displeasure of dealing with.
Sound familiar? Well, that, by and large, seems to be the shape of what's coming out of the Coalition following the shock and awe caused by Beecroft earlier in the year. I can't say enough about what a good idea this is. It will be good for jobs. Small employer are terrified of Employment Law as it stands. One nasty incident can ruin a business. You really think carefully about taking people on as a small firm. This can't be right.
Plus the spike in claims in recent years is fuelled by a 'No Win No Fee' industry which is based on exploitation of bad law by bad law firms. As anyone who knows me well is aware, I am not the biggest fan of the legal establishment. With notable exceptions (and there are MANY, including good friends of mine), they are, I find, non-value-adding and venal.
Because they are a 'profession', many lawyers seem to believe they have a right to charge five to ten times what everyone else does for what is, a lot of the time, an administrative job. The reputation of law has, like that of politics, taken a dive precisely because of how they have responded to opportunities like Employment Law.
This will soon change. Up and down the land people will cheer. Charity CEOs, small business people, colleagues of underperforming staff, HR managers, operations manager. Everyone, in fact, except the drongos who bring the majority of claims and their lawyers.
Of course, this didn't go down well with anyone, including the Lib Dems who, rightly, saw it as tipping the scales too far the othr way, creating a nervy workforce terrified of getting the wrong side of the person above them at work. Put into practice, Beecroft would, almost certainly, have led to abuses that would exceed those currently imposed by the army of people who use the current law to persecute their employer.
What we need, therefore, is something that runs down the middle. Here is where personal experience comes in. As an employer, I have been on the wrong side of more than one Employment Tribunal. Several in fact. Most are 'settled' meaning, that you do what is necessary to make the drain on your time presented by such matters disappear.
I have always been amazed at how many people can sign away the right to have their grievance properly looked at in a quasi-judicial setting when a fairly small cheque is waved under their nose. Friends I know who have not done this and gone all the way nearly always win - but feel like they have lost, such is the cost in time and lawyer bills.
In short, the system is indeed broken and needs to be reformed, urgently. Ask any charity CEO (not normally the most right-wing of people) what they think over a glass of wine and, to a person you'll get the same answer: the system is a joke, it deters employment, it causes massive stress and cost and it rights few wrongs.
After another few glasses, you'll also get plenty of sarcasm about the self-infated judges (there are three for each of these hearings) who are paid God-knows-what by the taxpayer for poring over what are mostly 'he said, she said' issues, that, by a freak of legal nature, have ended up in a courtroom.
So what needs to be done? Three things. Firstly, there needs to be a place for 'safe conversations' which allow the employers to say 'This ain't working and we would like to discuss a possible exit for you' without this leading straight to a solicitor's letter.
At the moment, it is very hard to have a normal conversation without your words being thrown back at you as evidence of 'constructive dismissal'.
Secondly, every application for a Tribunal should first be put through ACAS before it is allowed to go to a Tribunal. This allows a mediated settlement rather than the well-remunerated confrontations so beloved of the legal profession. Finally, every person who wants to initiate a Tribunal should personally put up a returnable deposit which is lost if they lose. This will, I can guarantee, get rid of most vexacatous claims in one go, including many of those I have had the displeasure of dealing with.
Sound familiar? Well, that, by and large, seems to be the shape of what's coming out of the Coalition following the shock and awe caused by Beecroft earlier in the year. I can't say enough about what a good idea this is. It will be good for jobs. Small employer are terrified of Employment Law as it stands. One nasty incident can ruin a business. You really think carefully about taking people on as a small firm. This can't be right.
Plus the spike in claims in recent years is fuelled by a 'No Win No Fee' industry which is based on exploitation of bad law by bad law firms. As anyone who knows me well is aware, I am not the biggest fan of the legal establishment. With notable exceptions (and there are MANY, including good friends of mine), they are, I find, non-value-adding and venal.
Because they are a 'profession', many lawyers seem to believe they have a right to charge five to ten times what everyone else does for what is, a lot of the time, an administrative job. The reputation of law has, like that of politics, taken a dive precisely because of how they have responded to opportunities like Employment Law.
This will soon change. Up and down the land people will cheer. Charity CEOs, small business people, colleagues of underperforming staff, HR managers, operations manager. Everyone, in fact, except the drongos who bring the majority of claims and their lawyers.
Saturday, February 11, 2012
How localism can solve the health and social care crisis in the UK
If you're reading the newspapers, you'll be hearing both about the planned Lansley reforms and a parallel discussion about the need to integrate health and social care funding in response to what Government Minister Paul Burstow admits is a 'timebomb'.
But the two are seldom discussed together, for some reason, probably because most journalists struggle to get a full handle. Health and social care are currently separately provided for in law. You get health care for free while you normally pay for social care. Councils determine who gets what in social care and carries statutory responsibility.
In some areas, for example, Bath, NE Lincs, Torbay, Swindon and a few others, health and social care commissioning has, for some time, been placed under one body, normally the Council with a Joint Director of Social Care / CEO of the PCT. Where Council and PCT areas are contiguous this makes a lot of sense because it means that those spending the health and social care pound can see the whole picture and are not slavishly wedded to one or other worldview, health or social care.
Integration at this level also means that local democracy gets a look in. For however flawed and unrepresentative most councils are (hardly anyone young or black, essentially) they are voted in, unlike most health bodies which, while governed by a board, a not particularly accountable to the community, in reality
So why not make this the national policy? Rather than trying to delegate budgets to GP groups, which are, by now evolving into mini PCTs, and also having rump-PCT clusters running alongside (and I won't get into Commissioning Support Groups) - why don't we take localism to its logical conclusion and do the following:
1. Give Councils statutory responsibility for health and social care in their jurisdiction.
2. Make the Health and Well-Being Board being set up anyway by Councils the delegated bodies which oversee the commissioning and procurement of local health and social care. Pool the budget so that there is no distinction between health and social care spend.
3. Set up all staturory health and social care providers as either independent local healthcare trusts or social enterprises which have contractual relationships with the council.
4. Let each local council and its Health and Well-Being board shape local priorities and allow the council to be accountable for health and social care outcomes in its area.
5. Allow the centre to retain powers of intervention if a council is failing it its statutory duties.
The net effect of all of this will be to force local Councils to grab the nettle of the democraphic pressure and problems caused by the imbalance of acute and primary investment in their areas. Decisions will need to be made around what the local health service will and won't fund and where self-payment has to play a role.
At the moment, we're in the ridiculous situation whereby a person with quite profound social care needs who has some means to pay has to practically bankrupt themselves to get the support they need while another person who wants a sex change can get one done on the NHS. Merging of budgets allows some balance to be put into the question of where funding of different needs is placed.
Of course this wouldn't be a perfect system. The funding would still need to come mainly from central government and even in the event of a more localised system of taxation there would be a need for transfers from Surrey to Sunderland. That's what central government, really, should be mainly about doing. Plus the same political nonsense would happen at local level as you see nationally.
But this system, where health and social care is integrated at commissioning level and placed under LA control is, compared to what we have now, quite a sensible approach and places central government in the role of overseer, rather than controller. Would this still be a national health service. Yes, but also a local health and social care service too, with stronger local accountability and scope for appropriate local variation.
But the two are seldom discussed together, for some reason, probably because most journalists struggle to get a full handle. Health and social care are currently separately provided for in law. You get health care for free while you normally pay for social care. Councils determine who gets what in social care and carries statutory responsibility.
In some areas, for example, Bath, NE Lincs, Torbay, Swindon and a few others, health and social care commissioning has, for some time, been placed under one body, normally the Council with a Joint Director of Social Care / CEO of the PCT. Where Council and PCT areas are contiguous this makes a lot of sense because it means that those spending the health and social care pound can see the whole picture and are not slavishly wedded to one or other worldview, health or social care.
Integration at this level also means that local democracy gets a look in. For however flawed and unrepresentative most councils are (hardly anyone young or black, essentially) they are voted in, unlike most health bodies which, while governed by a board, a not particularly accountable to the community, in reality
So why not make this the national policy? Rather than trying to delegate budgets to GP groups, which are, by now evolving into mini PCTs, and also having rump-PCT clusters running alongside (and I won't get into Commissioning Support Groups) - why don't we take localism to its logical conclusion and do the following:
1. Give Councils statutory responsibility for health and social care in their jurisdiction.
2. Make the Health and Well-Being Board being set up anyway by Councils the delegated bodies which oversee the commissioning and procurement of local health and social care. Pool the budget so that there is no distinction between health and social care spend.
3. Set up all staturory health and social care providers as either independent local healthcare trusts or social enterprises which have contractual relationships with the council.
4. Let each local council and its Health and Well-Being board shape local priorities and allow the council to be accountable for health and social care outcomes in its area.
5. Allow the centre to retain powers of intervention if a council is failing it its statutory duties.
The net effect of all of this will be to force local Councils to grab the nettle of the democraphic pressure and problems caused by the imbalance of acute and primary investment in their areas. Decisions will need to be made around what the local health service will and won't fund and where self-payment has to play a role.
At the moment, we're in the ridiculous situation whereby a person with quite profound social care needs who has some means to pay has to practically bankrupt themselves to get the support they need while another person who wants a sex change can get one done on the NHS. Merging of budgets allows some balance to be put into the question of where funding of different needs is placed.
Of course this wouldn't be a perfect system. The funding would still need to come mainly from central government and even in the event of a more localised system of taxation there would be a need for transfers from Surrey to Sunderland. That's what central government, really, should be mainly about doing. Plus the same political nonsense would happen at local level as you see nationally.
But this system, where health and social care is integrated at commissioning level and placed under LA control is, compared to what we have now, quite a sensible approach and places central government in the role of overseer, rather than controller. Would this still be a national health service. Yes, but also a local health and social care service too, with stronger local accountability and scope for appropriate local variation.
Thursday, February 9, 2012
How To Murder a Mutual
A real, living example of staff seeking to form up into a mutual met an early death this week as a group of librarians in a London borough failed to get through a PQQ stage on a tender process. This was not, they were told, because they were crap or didn’t know anything about running libraries, nor that they didn’t have any business sense. No, it was because they didn’t have a balance sheet – or cash-in-bank or bricks-and-mortar – to use everyday language.
They are appealing – and good luck to them. I have also directed to them to Cabinet Office who are investigating what the barriers are to staff groups seeking to ‘step out’ into a mutual or social enterprise.
The problems faced by these librarians isn’t particular to that borough which, I am sure, is an otherwise shining example of good practice and innovative partnership working. It’s everywhere. If it hadn’t been the PQQ that trip-wired them it would have been the local unions or politicians or finance people who tend to prefer things to be either in-house or contracted out – nothing more complicated please.
Well, not everywhere – or we wouldn’t have a business! I am on the train home from one council which will, we expect, shortly see two new staff led businesses in the conservation and work-prep sectors. Yesterday I was with a council where £4m of social care services are soon to ‘step out’ into a new CIC.
Everywhere I go, there are people wanting to do this. People who recognize that the old public sector model is bust and something else that isn’t public or private sector but social-sector is the right way to go. Saving money, improving services, raising motivation and productivity.
That’s why we are doing this. It’s early in the day, but the public sector up and down the land – faced with 30% cuts over 2-3 years has to find new delivery models. They exist – and the independent social business spin out is one of them.
If only the library-commissioners in that particular borough knew it!
They are appealing – and good luck to them. I have also directed to them to Cabinet Office who are investigating what the barriers are to staff groups seeking to ‘step out’ into a mutual or social enterprise.
The problems faced by these librarians isn’t particular to that borough which, I am sure, is an otherwise shining example of good practice and innovative partnership working. It’s everywhere. If it hadn’t been the PQQ that trip-wired them it would have been the local unions or politicians or finance people who tend to prefer things to be either in-house or contracted out – nothing more complicated please.
Well, not everywhere – or we wouldn’t have a business! I am on the train home from one council which will, we expect, shortly see two new staff led businesses in the conservation and work-prep sectors. Yesterday I was with a council where £4m of social care services are soon to ‘step out’ into a new CIC.
Everywhere I go, there are people wanting to do this. People who recognize that the old public sector model is bust and something else that isn’t public or private sector but social-sector is the right way to go. Saving money, improving services, raising motivation and productivity.
That’s why we are doing this. It’s early in the day, but the public sector up and down the land – faced with 30% cuts over 2-3 years has to find new delivery models. They exist – and the independent social business spin out is one of them.
If only the library-commissioners in that particular borough knew it!
Sunday, February 5, 2012
What can we learn from the spin-out leaders?
One of the privileges of my work with Stepping Out is the exposure it gives me to a wide variety of leaders. This has been instructive. Spin-outs almost always rely on charismatic leaders to get them off the ground. These people are invariably viewed as 'mavericks' and are seldom popular figures in their organisations. And few of them, at least early on, have the technical skills to organise a spin-out nor the political skills to play the committee game in their organisation.
But what they lack in business or political finesse, they tend to make up for in drive, tenacity and inspiration to others. Which is fortunate because this is probably what matters a lot more, certainly early on. Where we often come in is adding the skill-sets and finding the operators who can champion the mavericks' cause with politicians and committees.
What can be learned about these types of leader? I think they underline to me the vital need for all leaders to be durable, passionate and communicative. The very best ones can also do the technical and political stuff too, but I would say that these skills become more important at later stage in the life of an organisation.
The others - the softer skills - have, I think, taken on a bigger order of importance in the 20 years I have been in the workforce, as society has become more communication-focussed. The 'feminisation' of management culture also has had a welcome role to play. A top leader used to be what Michael Lewis in 'The Big Short' memorably called a 'Big Swinging Dick' - an alpha male who could bully and beat his way to success.
Now such people are viewed as throwbacks and any aspiring leader is evaluated far more in terms of how they involve and include others, how well they create a productive and positive culture and how they conduct themselves in the day to day relationships.
It is a trend I think I welcome.
But what they lack in business or political finesse, they tend to make up for in drive, tenacity and inspiration to others. Which is fortunate because this is probably what matters a lot more, certainly early on. Where we often come in is adding the skill-sets and finding the operators who can champion the mavericks' cause with politicians and committees.
What can be learned about these types of leader? I think they underline to me the vital need for all leaders to be durable, passionate and communicative. The very best ones can also do the technical and political stuff too, but I would say that these skills become more important at later stage in the life of an organisation.
The others - the softer skills - have, I think, taken on a bigger order of importance in the 20 years I have been in the workforce, as society has become more communication-focussed. The 'feminisation' of management culture also has had a welcome role to play. A top leader used to be what Michael Lewis in 'The Big Short' memorably called a 'Big Swinging Dick' - an alpha male who could bully and beat his way to success.
Now such people are viewed as throwbacks and any aspiring leader is evaluated far more in terms of how they involve and include others, how well they create a productive and positive culture and how they conduct themselves in the day to day relationships.
It is a trend I think I welcome.
Should the Health and Social Care Bill be Scrapped?
The papers are full of speculation about the future of Lansley's bill. Many Tory MPs are now privately concerned, Lib Dem peers and now working with Labour Lords to amend the bill to destruction and Lansley himself is looking increasingly isolated as the professions rally against him.
In more normal political times this would all be insignificant. But we're not. No single party has a majority and Parliament, since 2010, has enjoyed something of a revival as the 'cockpit of the nation'. You just can't ram things through anymore. Listen - or face rebellion is is the message from a Commons packed with the assertive new 2010 intake..
In some ways, the Bill is alreadyhalfway to oblivion. So far 136 amendments have been accepted from hundreds table. The net effect of this has been to reshape the Bill substantially from Lansley's original intentions. Many more amendments and the whole thing will be sunk by its own complexity and contradictions.
Although there is a lot of angles to this debate, it seems to boil down, in our current discourse, to one big issue - do private operators have a major role to play in the future NHS - or does this remain a principally state-funded, state-directed service? Where you stand on this question is a pretty good predictor of whether you basically support or oppose this Bill.
And that is where Lansley finds himself at the wrong end of the political argument. Most Britons instinctively oppose the idea of profit-making companies running the NHS. They fear its implications for access to free healthcare. For most people, it just seems instinctively 'wrong' that private companies take over the NHS.
Where Lansley has failed, I think, is to side-step the professions by successfully casting his reforms in terms of the real challenges facing healthcare in this country. In short, we need more primary and community healthcare - and fewer, better major hospitals. Anything worth of the name NHS needs to see this movement over time.
We also need to have an honest conversation about what the NHS is for, today and tomorrow, and what we should ask people to fund themselves. There is mounting evidence that the NHS will have to narrow its offer to a deliverable 'core' with more being paid for by ourselves with a logical consequence that more non-core treatments will have to be provided by other means, including the private market.
There is an urgent need for a long-term cross-party consensus about the future of both health and social care in this country if we are to avoid a major crisis within 20 years. The debate at the moment is infantile. 'Three months to save the NHS' is another facile piece of nonsense from Miliband, E.. The NHS today is a cruise-liner headed for the rocks within 5 years. The question really is how to change it over the next decade, reduce its costs and improve its offer. The left (including many Lib Dems) think this is all about planning and co-ordination. The right think it is all about ultra-devolution and introducing markets and private providers with the state well out of the way.
The sensible centre (and most of the non-political community) recognise that you need bits of both. High level planning is needed over the long term around the broad allocation of the health pound in our taxes. As a country, we need to agree what our response to our well-understood demographic and health challenges should be. This is the 'national conversation' we should be having, led by our political class. Then it is Government's job to set the framework. This is not the same thing as the 'co-ordination' offered during the Labour years - which led to the NHS being micro-managed like a nationalised industry.
Likewise we need to sensibly open up the non-core sectors of our healthcare needs to other sector. This has, of course, already happened in social care, where a diversity of providers has moved quality up and price down over the years - with notable exceptions of course. But this has to be done with care. The 'cherry picking' argument is a real one and cannot be ignored. We need to use the private sector where it can drive up standards - but keep an overview and retain powers at local level to hold the private sector in check where this isn't working for the common good..
Where do social enterprise providers fit into all of this? My fear is that they get lumped into the 'private sector' bucket and, if the Lansley Bill dies - which I see a 25% chance of happening - they get frozen out of the new NHS. There is, of course, a chance that they will be viewed as an alternative to privatisation, but the health social enterprises do not yet have the political clout to get this point heard in the current decibels.
If the Lansley Bill goes through, in a heavily amended form, it's also hard to see how things will work from here. The emerging picture is of a more complex commissioning environment than now and a very messy period of overall transition. A lot of the new structure has kicked off already. Clinical Commissioning Groups are already operating and the PCTs and SHA's all but gone - or altered to account for the bill. Very tough now to turn back the clock.
My feeling is that if politicians were up to a decent quality of debate on healthcare, I would want to see the Lansley Bill scrapped and we go back to the drawing board. But so poor and ill-informed is most of it that I fear this would throw us backwards into Frank Dobson/Andy Burnham era nationalisation with consequences I dare not contemplate. So overall, I would rather us make do with an amended bill.
However, Cameron should sack Lansley in the reshuffle and bring in a pragmatist with the operational head to see this through. So no, keep the bill - but sack this dreadful Minister.
In more normal political times this would all be insignificant. But we're not. No single party has a majority and Parliament, since 2010, has enjoyed something of a revival as the 'cockpit of the nation'. You just can't ram things through anymore. Listen - or face rebellion is is the message from a Commons packed with the assertive new 2010 intake..
In some ways, the Bill is alreadyhalfway to oblivion. So far 136 amendments have been accepted from hundreds table. The net effect of this has been to reshape the Bill substantially from Lansley's original intentions. Many more amendments and the whole thing will be sunk by its own complexity and contradictions.
Although there is a lot of angles to this debate, it seems to boil down, in our current discourse, to one big issue - do private operators have a major role to play in the future NHS - or does this remain a principally state-funded, state-directed service? Where you stand on this question is a pretty good predictor of whether you basically support or oppose this Bill.
And that is where Lansley finds himself at the wrong end of the political argument. Most Britons instinctively oppose the idea of profit-making companies running the NHS. They fear its implications for access to free healthcare. For most people, it just seems instinctively 'wrong' that private companies take over the NHS.
Where Lansley has failed, I think, is to side-step the professions by successfully casting his reforms in terms of the real challenges facing healthcare in this country. In short, we need more primary and community healthcare - and fewer, better major hospitals. Anything worth of the name NHS needs to see this movement over time.
We also need to have an honest conversation about what the NHS is for, today and tomorrow, and what we should ask people to fund themselves. There is mounting evidence that the NHS will have to narrow its offer to a deliverable 'core' with more being paid for by ourselves with a logical consequence that more non-core treatments will have to be provided by other means, including the private market.
There is an urgent need for a long-term cross-party consensus about the future of both health and social care in this country if we are to avoid a major crisis within 20 years. The debate at the moment is infantile. 'Three months to save the NHS' is another facile piece of nonsense from Miliband, E.. The NHS today is a cruise-liner headed for the rocks within 5 years. The question really is how to change it over the next decade, reduce its costs and improve its offer. The left (including many Lib Dems) think this is all about planning and co-ordination. The right think it is all about ultra-devolution and introducing markets and private providers with the state well out of the way.
The sensible centre (and most of the non-political community) recognise that you need bits of both. High level planning is needed over the long term around the broad allocation of the health pound in our taxes. As a country, we need to agree what our response to our well-understood demographic and health challenges should be. This is the 'national conversation' we should be having, led by our political class. Then it is Government's job to set the framework. This is not the same thing as the 'co-ordination' offered during the Labour years - which led to the NHS being micro-managed like a nationalised industry.
Likewise we need to sensibly open up the non-core sectors of our healthcare needs to other sector. This has, of course, already happened in social care, where a diversity of providers has moved quality up and price down over the years - with notable exceptions of course. But this has to be done with care. The 'cherry picking' argument is a real one and cannot be ignored. We need to use the private sector where it can drive up standards - but keep an overview and retain powers at local level to hold the private sector in check where this isn't working for the common good..
Where do social enterprise providers fit into all of this? My fear is that they get lumped into the 'private sector' bucket and, if the Lansley Bill dies - which I see a 25% chance of happening - they get frozen out of the new NHS. There is, of course, a chance that they will be viewed as an alternative to privatisation, but the health social enterprises do not yet have the political clout to get this point heard in the current decibels.
If the Lansley Bill goes through, in a heavily amended form, it's also hard to see how things will work from here. The emerging picture is of a more complex commissioning environment than now and a very messy period of overall transition. A lot of the new structure has kicked off already. Clinical Commissioning Groups are already operating and the PCTs and SHA's all but gone - or altered to account for the bill. Very tough now to turn back the clock.
My feeling is that if politicians were up to a decent quality of debate on healthcare, I would want to see the Lansley Bill scrapped and we go back to the drawing board. But so poor and ill-informed is most of it that I fear this would throw us backwards into Frank Dobson/Andy Burnham era nationalisation with consequences I dare not contemplate. So overall, I would rather us make do with an amended bill.
However, Cameron should sack Lansley in the reshuffle and bring in a pragmatist with the operational head to see this through. So no, keep the bill - but sack this dreadful Minister.
Friday, February 3, 2012
Talk I gave at yesterday's Guardian Public Services Summit
"I think my value here today is that I have a few different lines of sight on the issues in hand. I am probably best known as a social entrepreneur and my work in the public sector developing spin-out ventures. I am also a chair of a large national charity and, on top of this a county councilor in Suffolk. This all gives me a distinct vantage point on our sector.
Today I am going to talk about what’s good, what’s bad and what’s ahead.
THE BAD
Let’s get the bad out of the way first. This is a very tough year for the charity and SE sector. If the public sector thinks its had a hard time, come to see us. Third Sector magazine told last week of 70,000 job losses in 2011 on a workforce of less than a million. Both grants and contracts are under pressure. Grants from Councils are being hit hard – 40% in Liverpool last year and 35% in Notts this year, pending a review by CLG.
This means that the sector is caught in the headlights, preoccupied with short-term survival and incapable often to get together the responses needed for longer term success. Whatever the public sector might be looking for from these sectors just now, it has found a sector that has been at its most introspective and least innovative for some time. And this is at a time when the business models of many charities most need to change to adapt to the new need-contours in our society.
I see this myself both as a Councillor. From the Council we see a preoccupied third sector that now, less than ever, can get itself organized well enough to become a strategic partner.
As a Chair, of VA I see our particular survival battles getting in the way of renewing a business model well behind the curve in terms of what commissioners will now pay for. We’re still living in 2006 while they are thinking about 2018, and the financial constraints then.
Other bad news. It is clear that Big Society is no longer on everyone’s lips and that the attention of this Government has shifted to the delivery of economic recovery. Public sector reform for the sector has been a distinctly mixed bag. The Open Public Services White Paper – which spoke of diversity of supply – was a damp squib.
And the biggest story of the year has been the abject failure of SEs and charities to make the Work Programme successful as sub-contractors to private ‘prime’ contractors. According to TS magazine this week, many are experiencing cash flow problems and considering withdrawal.
So what’s good. Well, plenty, fortunately. The recession is having the effect of winnowing out some of the less effective and forcing sensible merger and consolidation in places. This is long overdue. We’re also seeing some innovative responses to the new world we are in. Look for example at what Scope are doing – raising a bond for several million pounds and using this to develop their retail operation. Turning the recession to their distinct advantage.
We’re also seeing charities making their presence felt in the campaigning field, a sure sign that the sector as a voice for the vulnerable is alive and well in 2012.
Further to this, we are seeing the inexorable rise of the social enterprise agenda. This is expressed in increasing number of public sector spin-outs – which marry the public service ethos with a commercial mindset. We also have the Right to Challenge and the Social Value Bill, both of which create significant opportunities for social enterprises to play a greater role in the provision of public services. Last but not least, we are seeing more funding mechanisms like Big Society Capital being created which are designed to provide access to funds for scaling successful social solutions.
So, finally, what of the future? Short-term, I think it’s going to continue to be very slow-going for these sectors. So many organizations are in turnaround that it’s going to take a long time for many of them to re-find their originality and innovation. However, after this I am more optimistic. Why? Because there is I believe a decent strategic space opening up for SEs and charities in between traditional public sector provision and a private sector which is no longer held in unquestioning regard. With better capitalization and better commissioning there is an opening field.
Which brings me to my final point – about commissioning. One goes to events where all people talk about is how poor commissioning is and how it needs to change so that SEs and charities can change. They are right, but only to a point. These organizations are not always easy to commission and can be very wooly about deliverables.
Both sides need to change. At the moment, I think that commissioning and procurement are too much like supermarket shopping – everything has to be neat, tidy and super-planned by volume providers. What we need, I think, is something a bit more like a souk, or bazaar, where there’s a wider variety of characters, some weird and wonderful products and some very interesting conversations on price and quality, a more open place, a more fluid one.
But a richness and diversity you will seldom find down at Tesco. I think that is one direction for commissioning and procurement in the future we’d be advised to create.
I think that’s my time up – thank you for listening"
Today I am going to talk about what’s good, what’s bad and what’s ahead.
THE BAD
Let’s get the bad out of the way first. This is a very tough year for the charity and SE sector. If the public sector thinks its had a hard time, come to see us. Third Sector magazine told last week of 70,000 job losses in 2011 on a workforce of less than a million. Both grants and contracts are under pressure. Grants from Councils are being hit hard – 40% in Liverpool last year and 35% in Notts this year, pending a review by CLG.
This means that the sector is caught in the headlights, preoccupied with short-term survival and incapable often to get together the responses needed for longer term success. Whatever the public sector might be looking for from these sectors just now, it has found a sector that has been at its most introspective and least innovative for some time. And this is at a time when the business models of many charities most need to change to adapt to the new need-contours in our society.
I see this myself both as a Councillor. From the Council we see a preoccupied third sector that now, less than ever, can get itself organized well enough to become a strategic partner.
As a Chair, of VA I see our particular survival battles getting in the way of renewing a business model well behind the curve in terms of what commissioners will now pay for. We’re still living in 2006 while they are thinking about 2018, and the financial constraints then.
Other bad news. It is clear that Big Society is no longer on everyone’s lips and that the attention of this Government has shifted to the delivery of economic recovery. Public sector reform for the sector has been a distinctly mixed bag. The Open Public Services White Paper – which spoke of diversity of supply – was a damp squib.
And the biggest story of the year has been the abject failure of SEs and charities to make the Work Programme successful as sub-contractors to private ‘prime’ contractors. According to TS magazine this week, many are experiencing cash flow problems and considering withdrawal.
So what’s good. Well, plenty, fortunately. The recession is having the effect of winnowing out some of the less effective and forcing sensible merger and consolidation in places. This is long overdue. We’re also seeing some innovative responses to the new world we are in. Look for example at what Scope are doing – raising a bond for several million pounds and using this to develop their retail operation. Turning the recession to their distinct advantage.
We’re also seeing charities making their presence felt in the campaigning field, a sure sign that the sector as a voice for the vulnerable is alive and well in 2012.
Further to this, we are seeing the inexorable rise of the social enterprise agenda. This is expressed in increasing number of public sector spin-outs – which marry the public service ethos with a commercial mindset. We also have the Right to Challenge and the Social Value Bill, both of which create significant opportunities for social enterprises to play a greater role in the provision of public services. Last but not least, we are seeing more funding mechanisms like Big Society Capital being created which are designed to provide access to funds for scaling successful social solutions.
So, finally, what of the future? Short-term, I think it’s going to continue to be very slow-going for these sectors. So many organizations are in turnaround that it’s going to take a long time for many of them to re-find their originality and innovation. However, after this I am more optimistic. Why? Because there is I believe a decent strategic space opening up for SEs and charities in between traditional public sector provision and a private sector which is no longer held in unquestioning regard. With better capitalization and better commissioning there is an opening field.
Which brings me to my final point – about commissioning. One goes to events where all people talk about is how poor commissioning is and how it needs to change so that SEs and charities can change. They are right, but only to a point. These organizations are not always easy to commission and can be very wooly about deliverables.
Both sides need to change. At the moment, I think that commissioning and procurement are too much like supermarket shopping – everything has to be neat, tidy and super-planned by volume providers. What we need, I think, is something a bit more like a souk, or bazaar, where there’s a wider variety of characters, some weird and wonderful products and some very interesting conversations on price and quality, a more open place, a more fluid one.
But a richness and diversity you will seldom find down at Tesco. I think that is one direction for commissioning and procurement in the future we’d be advised to create.
I think that’s my time up – thank you for listening"
Thursday, February 2, 2012
The Politics of Spinning Out - my piece from the Guardian this week
Much of the talk about public service mutuals tends to imply it is all about happy groups of professionals unhooking themselves from the chains of NHS or council bureaucracy and running happily into the cornfields.
Of course, it's not like that. Stepping out of the public sector is political with a capital P. So far, I have never seen a spinout that hasn't required heavyweight backing either from the top pinnacle of the local bureaucracy or senior elected members.
Put simply, if you, as a public manager, want to "step out", you've not only got to do the numbers, you've also got to do the politics.
So where do you start? In short, politicians, or very senior executives, need three things. Firstly, they need to know if this fits in with the general tenor of where they see things going more widely in the organisation. "Does this fit with our larger strategy?" will be question number one. Politically, it may, in which case, you could be fast-tracked. Or, it may not – and you'll be received more coolly.
Councils, whether Tory, Labour or Lib Dem, are increasingly viewing social enterprise as a positive alternative to out and out privatisation, particularly in services where profit-maximising operators might not go down well with voters. This works particularly well where a social enterprise will clearly reduce the need for immediate cuts in front-line services or an increase in rates. This is where politicians' antennae are most clearly tuned. Give them a way out of either and you're half way there.
Secondly, they want to know if the numbers add up. Every politician's nightmare is something blowing up on their watch – or going bust. They want to be sure that if a spin-out goes ahead, it will be successful. In addition, politicians want to be sure that in letting your ship go free, they are not left with a gaping hole in their own. You therefore need to think about how what you're doing might affect the council's wider position.
No area is more important here than the back-office functions – HR, IT, finance, payroll. A spin-out will ideally want to get these things from providers outside the council because there are great deals to be had in the market. But the council doesn't want to be left with a big overhead that it now needs either to shrink down or spread over a diminishing base. The logical thing – and what we see happening a lot – is that the spin-out takes the back-office services from the council on a tapering basis as part of the deal. It's not ideal – but it gets over a lot of the immediate financial problems that a spin-out, especially a large one, might pose to the council.
Thirdly, politicians and senior managers need to know that they can influence the new body. For councillors and top executives, who are used to directly managing services, a spin-out can present a big operational and financial threat. They can no longer just recover a deficit elsewhere by plundering your budget. Nor, if they are no longer in charge, can they, in the event of a bad headline, tell voters they are putting a rocket under you! Again, the answer here lies in giving them a place at the table and moving the relationship from one governed by command and control to one where influence is exercised through a contract.
My main advice to public managers is to start talking to both politicians and senior managers early in the game. It can save you a lot of time and generate important early support. Keeping them close and with you makes them feel involved and gives them "buy-in". As well as being a spin-out leader, you have also to act as a change manager in your organisation, keeping a coalition of people with you from the top right through to the front-line.
Of course, it's not like that. Stepping out of the public sector is political with a capital P. So far, I have never seen a spinout that hasn't required heavyweight backing either from the top pinnacle of the local bureaucracy or senior elected members.
Put simply, if you, as a public manager, want to "step out", you've not only got to do the numbers, you've also got to do the politics.
So where do you start? In short, politicians, or very senior executives, need three things. Firstly, they need to know if this fits in with the general tenor of where they see things going more widely in the organisation. "Does this fit with our larger strategy?" will be question number one. Politically, it may, in which case, you could be fast-tracked. Or, it may not – and you'll be received more coolly.
Councils, whether Tory, Labour or Lib Dem, are increasingly viewing social enterprise as a positive alternative to out and out privatisation, particularly in services where profit-maximising operators might not go down well with voters. This works particularly well where a social enterprise will clearly reduce the need for immediate cuts in front-line services or an increase in rates. This is where politicians' antennae are most clearly tuned. Give them a way out of either and you're half way there.
Secondly, they want to know if the numbers add up. Every politician's nightmare is something blowing up on their watch – or going bust. They want to be sure that if a spin-out goes ahead, it will be successful. In addition, politicians want to be sure that in letting your ship go free, they are not left with a gaping hole in their own. You therefore need to think about how what you're doing might affect the council's wider position.
No area is more important here than the back-office functions – HR, IT, finance, payroll. A spin-out will ideally want to get these things from providers outside the council because there are great deals to be had in the market. But the council doesn't want to be left with a big overhead that it now needs either to shrink down or spread over a diminishing base. The logical thing – and what we see happening a lot – is that the spin-out takes the back-office services from the council on a tapering basis as part of the deal. It's not ideal – but it gets over a lot of the immediate financial problems that a spin-out, especially a large one, might pose to the council.
Thirdly, politicians and senior managers need to know that they can influence the new body. For councillors and top executives, who are used to directly managing services, a spin-out can present a big operational and financial threat. They can no longer just recover a deficit elsewhere by plundering your budget. Nor, if they are no longer in charge, can they, in the event of a bad headline, tell voters they are putting a rocket under you! Again, the answer here lies in giving them a place at the table and moving the relationship from one governed by command and control to one where influence is exercised through a contract.
My main advice to public managers is to start talking to both politicians and senior managers early in the game. It can save you a lot of time and generate important early support. Keeping them close and with you makes them feel involved and gives them "buy-in". As well as being a spin-out leader, you have also to act as a change manager in your organisation, keeping a coalition of people with you from the top right through to the front-line.
Monday, January 23, 2012
How do we attack the benefit culture without attacking poor children?
I heard my old mucker Enver Solomon, now a spokesman for the Children's Society, on Five Live this morning, a voice of calm authority amid the oddballs and eccentrics who form most of Nicky Campbell's callers these days.
It was all about this proposed cap of £26k on benefits for families, regardless of where they live. This leaves many people uneffected but has a big hit on families in London where rents and living costs are high.
The debate seems to be settling into a left-right seesaw, with one side feeling it will just increase inequality and punish children and the other saying it is the only way to financially motivate certain parents to get a job.
Both sides have a point. To increase child poverty and inequality more than is going to happen anyway in the short term seems plain wrong. And since when did people who can't get it together to work respond to such incentives, even if the jobs were there for them? Equally, we have let a benefits lifestyle develop which is unhealthy for all involved and which, over time, needs to be dismantled. All advanced countries are having this debates, especially the Nordic countries where benefits are extremely generous.
Let's be realistic here though. There is no perfect solution. Any civilised society will always have a certain number of 'free-riders' - people who take out without putting back. There will always be a level of disgruntlement with such people, rightly so.
By the same measure, we have a larger responsibility to make sure our society justifies its name and that we are guided by a long-term view of what it means to share a country in terms of rights and responsibilities. I don't think the abuses of the few mean we should take a US approach to welfare and nothing should be done overnight which affects the life-chances of our most vulnerable children. I can't help but believe we need to adjust for rent in London and the South-East and raise the cap there, as a minimum measure.
But we must also retilt the scales over time so that those 'putting in' feel more comfortable about this, buy into the system and can believe that the free riders are, over time, getting a progressively worse deal than those who are net contributors. This can be done by cutting tax for the very low paid. We can get some of the money back, I believe, by re-introducting rent controls, which are successfully in much of continental Europe.
Long term of course we need new housing and vacant stock to be replenished but it is vital short-term that current measures both shore up confidence in the system without massively harming the life-chances of poor children.
It was all about this proposed cap of £26k on benefits for families, regardless of where they live. This leaves many people uneffected but has a big hit on families in London where rents and living costs are high.
The debate seems to be settling into a left-right seesaw, with one side feeling it will just increase inequality and punish children and the other saying it is the only way to financially motivate certain parents to get a job.
Both sides have a point. To increase child poverty and inequality more than is going to happen anyway in the short term seems plain wrong. And since when did people who can't get it together to work respond to such incentives, even if the jobs were there for them? Equally, we have let a benefits lifestyle develop which is unhealthy for all involved and which, over time, needs to be dismantled. All advanced countries are having this debates, especially the Nordic countries where benefits are extremely generous.
Let's be realistic here though. There is no perfect solution. Any civilised society will always have a certain number of 'free-riders' - people who take out without putting back. There will always be a level of disgruntlement with such people, rightly so.
By the same measure, we have a larger responsibility to make sure our society justifies its name and that we are guided by a long-term view of what it means to share a country in terms of rights and responsibilities. I don't think the abuses of the few mean we should take a US approach to welfare and nothing should be done overnight which affects the life-chances of our most vulnerable children. I can't help but believe we need to adjust for rent in London and the South-East and raise the cap there, as a minimum measure.
But we must also retilt the scales over time so that those 'putting in' feel more comfortable about this, buy into the system and can believe that the free riders are, over time, getting a progressively worse deal than those who are net contributors. This can be done by cutting tax for the very low paid. We can get some of the money back, I believe, by re-introducting rent controls, which are successfully in much of continental Europe.
Long term of course we need new housing and vacant stock to be replenished but it is vital short-term that current measures both shore up confidence in the system without massively harming the life-chances of poor children.
Saturday, January 21, 2012
I said 'Yeh yeh"'
Do you remember a group called Matt Bianco back in the 80s? They had this song called, I recall 'Yeh Yeh'. I had kind of forgotten about it until this last year or so when quite a few of the people with whom I deal with (particularly those based in a certain south-east metropole) suddenly started jabbing 'Yeh, yeh' back at me before I had finished a sentence.
Am I alone here? Can it be I am the only person who feels on the other end of a conversational equivalent of a machine-gun. It feels, when you hear it like 'Yes, I've grasped your point, you can be quiet now, please don't go on any more, I can't really bear this'. To me, it feels impatient, rude even. I am sure this isn't the purpose of whoever is 'Yeh Yeh-ing' me five seconds into every sentence. Indeed empathy may be meant. Perhaps it is actually saying - 'I understand you, care for what you have to say Craig and yeh (yeh) I hear you.
Or am I perhaps being paranoid? 'YY' as I will now call it reached new heights last week. It appears to have spread to the provinces. In the course of an afternoon,I was YY'd in conversations with a Councillor, a conference organiser and fellow consultant. I know I gab on a bit but YY cuts me stone dead. Perhaps this is not the intended effect?
Hopefully YY will be one of these linguistic trends that is gone as quickly as it arrived. I hope so. Because I have even found myself using it too. And, yes, in just the situations when I am hoping, secretly, I wasn't. Yeh yeh.
Am I alone here? Can it be I am the only person who feels on the other end of a conversational equivalent of a machine-gun. It feels, when you hear it like 'Yes, I've grasped your point, you can be quiet now, please don't go on any more, I can't really bear this'. To me, it feels impatient, rude even. I am sure this isn't the purpose of whoever is 'Yeh Yeh-ing' me five seconds into every sentence. Indeed empathy may be meant. Perhaps it is actually saying - 'I understand you, care for what you have to say Craig and yeh (yeh) I hear you.
Or am I perhaps being paranoid? 'YY' as I will now call it reached new heights last week. It appears to have spread to the provinces. In the course of an afternoon,I was YY'd in conversations with a Councillor, a conference organiser and fellow consultant. I know I gab on a bit but YY cuts me stone dead. Perhaps this is not the intended effect?
Hopefully YY will be one of these linguistic trends that is gone as quickly as it arrived. I hope so. Because I have even found myself using it too. And, yes, in just the situations when I am hoping, secretly, I wasn't. Yeh yeh.
A Life of Two Halves
Before you click off yet another middle-aged rant, this isn't about me. It's actually about a chap you may or may not have heard of by the name of Paul Lake.
Lake is my age - 42. Twenty years ago, he was the captain of one of England's top Premier League team and about to join the full England team, as one of the most gifted players of his generation. But before he became a household name - a Linker or a Shearer - disaster struck. He ruptured his anterior cruciate ligament.
Even back then, this wasn't necessarily the end for a footballer. Technology was there to put these injuries right. But Lake received the wrong treatment and by the time he got the top surgeon, after three failed reconstructions, it was game-over. He finally retired at the age of 27. Indeed had he not stopped then he would probably have been disabled, so damaged was his joint.
I've just been reading Lake's autobiography which is called 'I'm Not Really Here - A Life of Two Halves'. Unlike a lot of soccer players, he wrote it himself, with some help from his wife. It is one of the best things I have read in a while not only because I love the game but because Lake is unsparing in his account of how long-term injury affected him. A couple of years after sustaining the injury, after many operations and curtailed comebacks, Lake succumbed, privately, to a long bout of full-blown clinical depression for which he, thankfully, in the end, received professional help.
Lake's way out of the darkness starts shortly after his career is finally declared to be over. Following a blood-curdling final operation to save the basic structure of his leg, Lake , he talks to his physios, two young women, and both suggest to him that he consider a career in phsiotherapy. Lake is naturally very bright and understands about injury. He decides to give it a go and the rest of the book focuses on his newly rebuilt life as a physio. After several years working with a range of clubs he now has his own practice in Manchester. On top of this he is an Ambassador for Man City because, as a fan and a player, the club has been the focus his life since, at the age of 7, he started going to see them with the local milkman!
The book, overall, is a story of recovery. About what happens when your life doesn't work out like you think it will. It is important to remember that Lake was soft-wired to play football, like an actor has it in their DNA to perform. He had a brief taste of what he could have been - and he was one of the best of his generation, ask anyone who knows football. And then he lost it all, possibly avoidably. His book shows us how we can adjust to a new reality and make our lives work, even when we've been driven to despair.
This sounds like a heavy book. It isn't. For someone of a similar age,like me, also from the the north-west, it is also an amusing journey through shared time. For any reader, it is a really funny - Lake has an eye for anecdote - and there's much here to warm the heart. For all of the difficult feelings Lake was, one way or another, subject to, during his period of injury and illness, the kindness of many people towards him is quite touching. Five years after getting injured, an eternity in football, 25,000 people attended his testimonial - City vs United.
In all, 'I'm Not Really Here' is a book about not about just football but all of life - so take a look if you can. It won't disappoint.
Lake is my age - 42. Twenty years ago, he was the captain of one of England's top Premier League team and about to join the full England team, as one of the most gifted players of his generation. But before he became a household name - a Linker or a Shearer - disaster struck. He ruptured his anterior cruciate ligament.
Even back then, this wasn't necessarily the end for a footballer. Technology was there to put these injuries right. But Lake received the wrong treatment and by the time he got the top surgeon, after three failed reconstructions, it was game-over. He finally retired at the age of 27. Indeed had he not stopped then he would probably have been disabled, so damaged was his joint.
I've just been reading Lake's autobiography which is called 'I'm Not Really Here - A Life of Two Halves'. Unlike a lot of soccer players, he wrote it himself, with some help from his wife. It is one of the best things I have read in a while not only because I love the game but because Lake is unsparing in his account of how long-term injury affected him. A couple of years after sustaining the injury, after many operations and curtailed comebacks, Lake succumbed, privately, to a long bout of full-blown clinical depression for which he, thankfully, in the end, received professional help.
Lake's way out of the darkness starts shortly after his career is finally declared to be over. Following a blood-curdling final operation to save the basic structure of his leg, Lake , he talks to his physios, two young women, and both suggest to him that he consider a career in phsiotherapy. Lake is naturally very bright and understands about injury. He decides to give it a go and the rest of the book focuses on his newly rebuilt life as a physio. After several years working with a range of clubs he now has his own practice in Manchester. On top of this he is an Ambassador for Man City because, as a fan and a player, the club has been the focus his life since, at the age of 7, he started going to see them with the local milkman!
The book, overall, is a story of recovery. About what happens when your life doesn't work out like you think it will. It is important to remember that Lake was soft-wired to play football, like an actor has it in their DNA to perform. He had a brief taste of what he could have been - and he was one of the best of his generation, ask anyone who knows football. And then he lost it all, possibly avoidably. His book shows us how we can adjust to a new reality and make our lives work, even when we've been driven to despair.
This sounds like a heavy book. It isn't. For someone of a similar age,like me, also from the the north-west, it is also an amusing journey through shared time. For any reader, it is a really funny - Lake has an eye for anecdote - and there's much here to warm the heart. For all of the difficult feelings Lake was, one way or another, subject to, during his period of injury and illness, the kindness of many people towards him is quite touching. Five years after getting injured, an eternity in football, 25,000 people attended his testimonial - City vs United.
In all, 'I'm Not Really Here' is a book about not about just football but all of life - so take a look if you can. It won't disappoint.
How to Win Work in 2012
There was a time when I was writing two or three blogs a week. But this last month has been very dry. I put it down partly to being ill (my usual Xmas Man-Flu) and a certain listlessness I often feel at this time of year. Plus I have been very busy with Stepping Out - which has had a very strong start to 2012.
This doesn't mean, however, that things aren't hard. Everything at the moment has to fought hard for. Anyone selling into the public or voluntary sector faces a tightening market and burgeoning competition. Get this. One tender we won recently, firm in the belief that we were in pole position, saw 18 bids in a week-long tender window just after the new years. We won anyway, firmly on merit, but you can see, there are lots of appropriately qualified consultants waiting for the phone to ring. A lot of these are people fresh on the market from the midldle to senior tiers of public sector which are now shedding like a tree in Autumn.
Three other things tell me it's tight. Firstly, every week I am contacted by consultants and firms reminding me they are available. This rarely used to happen. Secondly, people are always asking me 'How business is going?'. Some of this is just banter, but I sense that a lot of people are trying to get the measure of how firms like mine are actually surviving at the moment. Thirdly, day-rates are tumbling and fixed fees are becoming increasingly common. I am paying myself - and anyone who delivers for us - less per day than a year ago. Such is supply and demand.
So how does a services-based business survive and grow in this climate. Again I would point to three things.
1. Differentiation / Specialisation. Know what you're good at - and focus on that alone. I think Stepping Out is working because we're not all things to all people. We know who we're seeking to work with and what we offer. A lot of people think they can just be John Smith General Consultant (Ltd). Sorry, but you can't anymore - unless you're famous, which you're probably not.
2. Show leadership in your space. Make speeches. Write articles, Write books if you can. This will help separate you from the mass of people all trying to work the space - and show your individual commitment to it. Having something to your name helps clients see you are one-on from the pack and 'safe' to work with in the area.
3. Pick up the phone. There's no point sending letters or emails to people any more telling them you're there. It just becomes part of the wall of electronic noise that fills most of our lives. One very successful entrepreneur, also in the business of selling stuff in the social enterprise sector, generally calls you if he wants your help or your business. It sounds like a step backwards - it's what I saw my Dad doing in his bedroom office on 1970s finger-dial on his rare days working from home - but it does work.
A fourth, though this is obvious, is to work your arse off. Showing persistence and commitment gives off a sign that you'll do this for your clients too. They are buying you, your attitude, your loyalty and your willingness to run through walls - as well, of course, as your wonderful brain! So swanning around like the consulting equivalent of a Premier League superstar will not help your cause. Be humble - as well, of course, as brilliant.
This doesn't mean, however, that things aren't hard. Everything at the moment has to fought hard for. Anyone selling into the public or voluntary sector faces a tightening market and burgeoning competition. Get this. One tender we won recently, firm in the belief that we were in pole position, saw 18 bids in a week-long tender window just after the new years. We won anyway, firmly on merit, but you can see, there are lots of appropriately qualified consultants waiting for the phone to ring. A lot of these are people fresh on the market from the midldle to senior tiers of public sector which are now shedding like a tree in Autumn.
Three other things tell me it's tight. Firstly, every week I am contacted by consultants and firms reminding me they are available. This rarely used to happen. Secondly, people are always asking me 'How business is going?'. Some of this is just banter, but I sense that a lot of people are trying to get the measure of how firms like mine are actually surviving at the moment. Thirdly, day-rates are tumbling and fixed fees are becoming increasingly common. I am paying myself - and anyone who delivers for us - less per day than a year ago. Such is supply and demand.
So how does a services-based business survive and grow in this climate. Again I would point to three things.
1. Differentiation / Specialisation. Know what you're good at - and focus on that alone. I think Stepping Out is working because we're not all things to all people. We know who we're seeking to work with and what we offer. A lot of people think they can just be John Smith General Consultant (Ltd). Sorry, but you can't anymore - unless you're famous, which you're probably not.
2. Show leadership in your space. Make speeches. Write articles, Write books if you can. This will help separate you from the mass of people all trying to work the space - and show your individual commitment to it. Having something to your name helps clients see you are one-on from the pack and 'safe' to work with in the area.
3. Pick up the phone. There's no point sending letters or emails to people any more telling them you're there. It just becomes part of the wall of electronic noise that fills most of our lives. One very successful entrepreneur, also in the business of selling stuff in the social enterprise sector, generally calls you if he wants your help or your business. It sounds like a step backwards - it's what I saw my Dad doing in his bedroom office on 1970s finger-dial on his rare days working from home - but it does work.
A fourth, though this is obvious, is to work your arse off. Showing persistence and commitment gives off a sign that you'll do this for your clients too. They are buying you, your attitude, your loyalty and your willingness to run through walls - as well, of course, as your wonderful brain! So swanning around like the consulting equivalent of a Premier League superstar will not help your cause. Be humble - as well, of course, as brilliant.
Time for the Old Guard To Go - My piece from Third Sector this week
If you think 2011 was a bad year, brace yourself for worse. 2012 will probably go down as the first year the UK felt the full force of long-term austerity. No longer can charities expect this downturn to be like a dose of the flu - nasty for a bit, but fine again soon. No, this is more like a bout of pneumonia - long, agonising and potentially fatal. In the next decade, the UK will become a poorer, less equal and potentially less harmonious place. And we just don't know how our society or our political system will cope with it.
Away from the public eye, all the political parties are struggling to answer the scary question of how we maintain social welfare and community cohesion in a low-to-no growth world. We in the third sector therefore need to think about this too. We have this rather smug tendency to think we have the answers, many of which involve large dollops of 'investment'. But we are often fighting the last war. Indeed, most charities' staff, services and programmes still reflect the relatively benign conditions of the past decade - not the long, hard road ahead. Our present task is therefore, somehow, to reboot in the face of a very different set of conditions.
So what are our options? The first thing is that we must be utterly realistic. Things are not going to right themselves in only a few years. We won't just muddle through, as Debra Allcock Tyler implied in this column recently. We have to think very clearly about where we focus our resources, given that social problems are likely to snowball. This means putting resources into the people and places where need is most profound.
In practice, it means we get used to downsizing, merging and providing a lot more online. Smaller organisations are the new reality. We also need far fewer chief executives and senior people - and more responsibility at the front line, where we need fewer, better people who can operate independently. In short, we need a shake-out.
We're already seeing a lot of sensible activity. The best sector leaders are refocusing their organisations, letting a lot of people go and collaborating on a much deeper level than was possible in the past. Consolidation, refocusing or merger seems to be a live conversation in many charities these days. For those that can't bear to merge, there are alternatives. Like councils, charities can share a chief executive, a management team or a back office. That way they keep the brand, lose the bother of creating a single new identity and save hundreds of thousands of pounds into the bargain.
All of this will be very painful. So who is going to make it happen? Probably not those who came of age in a more benign era. We need a changing of the guard - new mindsets and real energy for what needs to be done next. This is not the stuff of swansongs. Instead it's high time for a lot of people to take a look in the mirror and consider their positions.
Away from the public eye, all the political parties are struggling to answer the scary question of how we maintain social welfare and community cohesion in a low-to-no growth world. We in the third sector therefore need to think about this too. We have this rather smug tendency to think we have the answers, many of which involve large dollops of 'investment'. But we are often fighting the last war. Indeed, most charities' staff, services and programmes still reflect the relatively benign conditions of the past decade - not the long, hard road ahead. Our present task is therefore, somehow, to reboot in the face of a very different set of conditions.
So what are our options? The first thing is that we must be utterly realistic. Things are not going to right themselves in only a few years. We won't just muddle through, as Debra Allcock Tyler implied in this column recently. We have to think very clearly about where we focus our resources, given that social problems are likely to snowball. This means putting resources into the people and places where need is most profound.
In practice, it means we get used to downsizing, merging and providing a lot more online. Smaller organisations are the new reality. We also need far fewer chief executives and senior people - and more responsibility at the front line, where we need fewer, better people who can operate independently. In short, we need a shake-out.
We're already seeing a lot of sensible activity. The best sector leaders are refocusing their organisations, letting a lot of people go and collaborating on a much deeper level than was possible in the past. Consolidation, refocusing or merger seems to be a live conversation in many charities these days. For those that can't bear to merge, there are alternatives. Like councils, charities can share a chief executive, a management team or a back office. That way they keep the brand, lose the bother of creating a single new identity and save hundreds of thousands of pounds into the bargain.
All of this will be very painful. So who is going to make it happen? Probably not those who came of age in a more benign era. We need a changing of the guard - new mindsets and real energy for what needs to be done next. This is not the stuff of swansongs. Instead it's high time for a lot of people to take a look in the mirror and consider their positions.
Wednesday, December 14, 2011
My piece for the Guardian this week
We've all heard a lot about public sector mutuals: the government's vision of millions of public sector workers setting up shop as employee mutuals and selling their services back to the state.
In truth, progress has been slow. The Mutual Support Fund, launched at the beginning of December, has been a long time coming. Councils in particular have had other things on their mind over the past year. Overall, it is probably fair to say that public service mutuals have not, as yet, set the world on fire.
Is this about to change? Possibly. At a structural level, it is clear to that the public sector's days as a provider of services are numbered. Selby council, in north Yorkshire, now employs just 14 people. The rest are with external providers. This is the direction of travel and the new localism bill will make challenge to direct public provision a lot easier.
The question now, therefore, is who is going to take on services, update them and bring down their costs most effectively.
Let's be realistic here, the private sector is very good at organising councils' back-office services, mending the roads and collecting the bins. But there are areas where private companies are not so good – like providing social, community and healthcare services that bring together public resources with the energies of communities and individuals. This is, or should be, the "sweet spot", which mutuals and social enterprises can address.
One example of such a service is NAViGO, the ex-NHS service which was overall winner of the Guardian Public Service Award 2011.
But there are big hurdles to overcome for the future NAViGOs. The biggest by far is procurement. At the moment, the norm in public services is to run a tender process for virtually any service, even when one isn't strictly necessary. For the nascent mutual this can feel like climbing Everest. With no trading history or commercial skills, being pitted against experienced competition is a deterrent. Why go to all the trouble of forming a mutual only to get knocked out in round one?
There is, however, a way through the procurement conundrum, one supported by Cabinet Office minister Francis Maude – though, strangely, not one you hear so much about. Joint-venture mutuals – new ventures which bring together public sector staff with a seasoned external partner to set up a new company on a 50/50 basis – can run a procurement, not for the contract to provide but for a suitable external partner for the staff-led mutual, which will itself become the provider.
This transforms the staff's position in the procurement from one of nail-biting underdog to one of a judge in a beauty contest between different organisations hoping to partner the new mutual. Potential joint-venture partners can be selected, or dismissed, on the basis of their experience, skills and cultural match to the staff in the mutual.
This is arguably a far more attractive proposition not only for the staff, who also get help in setting up the mutual, but also for the public bodies, which will be able to transfer a lot of the start-up costs on to the new joint-venture partner.
Can this idea fly? Yes, if it is given the same amount of attention and support as the idea of stand-alone spinouts, with all of their attendant risks and complications.
In truth, progress has been slow. The Mutual Support Fund, launched at the beginning of December, has been a long time coming. Councils in particular have had other things on their mind over the past year. Overall, it is probably fair to say that public service mutuals have not, as yet, set the world on fire.
Is this about to change? Possibly. At a structural level, it is clear to that the public sector's days as a provider of services are numbered. Selby council, in north Yorkshire, now employs just 14 people. The rest are with external providers. This is the direction of travel and the new localism bill will make challenge to direct public provision a lot easier.
The question now, therefore, is who is going to take on services, update them and bring down their costs most effectively.
Let's be realistic here, the private sector is very good at organising councils' back-office services, mending the roads and collecting the bins. But there are areas where private companies are not so good – like providing social, community and healthcare services that bring together public resources with the energies of communities and individuals. This is, or should be, the "sweet spot", which mutuals and social enterprises can address.
One example of such a service is NAViGO, the ex-NHS service which was overall winner of the Guardian Public Service Award 2011.
But there are big hurdles to overcome for the future NAViGOs. The biggest by far is procurement. At the moment, the norm in public services is to run a tender process for virtually any service, even when one isn't strictly necessary. For the nascent mutual this can feel like climbing Everest. With no trading history or commercial skills, being pitted against experienced competition is a deterrent. Why go to all the trouble of forming a mutual only to get knocked out in round one?
There is, however, a way through the procurement conundrum, one supported by Cabinet Office minister Francis Maude – though, strangely, not one you hear so much about. Joint-venture mutuals – new ventures which bring together public sector staff with a seasoned external partner to set up a new company on a 50/50 basis – can run a procurement, not for the contract to provide but for a suitable external partner for the staff-led mutual, which will itself become the provider.
This transforms the staff's position in the procurement from one of nail-biting underdog to one of a judge in a beauty contest between different organisations hoping to partner the new mutual. Potential joint-venture partners can be selected, or dismissed, on the basis of their experience, skills and cultural match to the staff in the mutual.
This is arguably a far more attractive proposition not only for the staff, who also get help in setting up the mutual, but also for the public bodies, which will be able to transfer a lot of the start-up costs on to the new joint-venture partner.
Can this idea fly? Yes, if it is given the same amount of attention and support as the idea of stand-alone spinouts, with all of their attendant risks and complications.
Tuesday, December 6, 2011
To JV or not to JV...that is the question
How are we to get more people ‘stepping out’ from public services into Mutuals or social enterprises? One of the major stumbling blocks – of the many – concerns how groups of workers obtain an initial contract.
While there is nothing in the rules preventing the formation of a mutual or social enterprise by a Council, it is made abundantly clear in a paper on Procurement (just released by the Cabinet Office on its new Mutuals Information site) that the usual rules on procurement will apply to any aspiring spin-out.
This means, in effect, that if you’re a forming up a new venture to, say, run a social care service within your Council, you need to prepare for the possibility that you’re going to have to compete from the beginning with one or more existing providers – with all the tendering experience, financial muscle and reportable track-record they can bring.
There are however, five ways out of this for any group looking to spin out:
1. ‘Shadow’ company. Here you establish the venture, at first, as a kind of virtual-company, working within the Council ahead of a tender two or three years down the track. Staff are seconded in and there is an ‘arms length’ arrangement that mimics what it would be like to be legally separate. The idea here buy some time for the new venture to be gotten into shape for a competitive tender. You're not, of course, your own company, but you at least can operate more freely in preparation for competition.
2. Teckal company. Another approach is to set up a TECKAL company, one that just trades with the local authority and is still under its control . A TECKAL company has to do 90% of its business with the local authority and have an intention to remain primarily for that purpose only. The trouble with these is that they have to remain 'one client' companies in perpetuity - which is a bit of a limiter.
3. Joint Venture. An option increasingly under discussion is turn the procurement from a race you're in to be the provider into a contest for the joint-venture partner to help your staff group into a new mutual that delivers the service. You definitely continue to provide under the banner of a new JV mutual or SE - just not on your own. This will bring third party expertise and energy – but will mean you’re sharing control with a new JV partner.
4. Local Authority Trading Company. There exists 1990s legislation which allows LAs to trade so long as this is within their statutory purposes. This means an independent company can be set up with your staff in it – but that your company is wholly owned by the local authority whence you came. So not really an option for staff set on becoming employee-owned – but fine if the priority is simply to ‘spin out’.
5. Prove there is no market for what you do. For many services this are may well be possible, particularly those which are community-based, innovative or in some way unusual. You need to be confident though, so that the local authority feels safe from any external challenge. Some local authorities have also set up social enterprises in order to develop the local marketplace where they don’t feel comfortable with the range of alternatives to state provision, for whatever reason.
All of these provide a clear ‘way out’ for aspiring staff group of immediate open procurement of the service they run. However, all involve big compromises from all involved. It isn't just a ticket to freedom. The original idea of front-line being free, by right, to lead a spin-out – as happened in the NHS on Right to Request (2008-11) isn’t being envisaged this time around. Right to Provide (as it is being termed) is quite different to what happened with NHS spin-outs. It isn’t so much a right to provide as a right to tender.
What of joint-ventures? Much is being made of this as the real opportunity here. Instead of competing to run a service, what you get instead is a contest to partner with staff to set up a mutual. My hunch is that this is the option that most attracts the Coalition. Why? Because this involves other parties, including the private sector who can bring both cash and business expertise.
At the moment, there are relatively few live examples of such ventures actually happening. One reason for this, I am guessing, is that it isn’t really being presented yet by Government as the choice option for spinning out. The language is all about front-line workers emerging into newly minted ventures that they themselves have created. If the line was taken that joint-ventures were a preferred model, I am sure this would change.
And are they the best way forward? Well, joint ventures certainly solve some problems. The costs of setting up a spin out can be estimates at somewhere between 3% and 10% of first year turnover – and typically come in at somewhere between £250,000 and £500,000, all said. Plus JV is in many respects a more straightforward proposition. A JV, by its nature, can side-step a lot of the origination, developmental and commercial experience issues that dog new spin-outs. A well-positioned JV partner can turn an assault course into a relative walk in the park.
So, what’s not to like? Two things come to mind as possible obstacles. One is that a joint-venture is not the same as setting up your own business. You are not in control in the same way. It’s more akin to running a franchise than setting up on your own. Another is that you need JV partners which make sense for you, that share your values, which bring something to the party beyond what you bring yourself. Yes, a tender process should flush this out, but to even get to that stage, you've had to go through a lot on your own and it can be hard then to share the venture with new third parties that have come through a procurement process, people with whom you have no history.
Where do we stand? I am personally supportive of there being more JV spin-outs. I cannot see where the origination costs can come from otherwise. And, to be honest, I see a certain level of waste when it comes to the origination of spin-out businesses which could easily be absorbed by new JV entities eager to get into the game.
But it is the fact that JVs get around a lot of the difficulties around procurement that make it particularly attractive as a model. Otherwise, one is into all sorts of difficulties: When or whether to tender? How to set this up to give a mutual a chance of winning without breaking EU rules? How to create a clear pathway for staff which is not off-putting?
Therefore a JV will always get my vote ahead of the other main get-out option – the local authority trading or TECKAL company, which tends to more closely resemble its former self than feels comfortable. These entities are perfectly legal and achieveable and there are some great ones around but they do not give employees any more stake than was possible under state control. Which, if we're talking about employee ownership and its concurrent benefits, somewhat misses the point
While there is nothing in the rules preventing the formation of a mutual or social enterprise by a Council, it is made abundantly clear in a paper on Procurement (just released by the Cabinet Office on its new Mutuals Information site) that the usual rules on procurement will apply to any aspiring spin-out.
This means, in effect, that if you’re a forming up a new venture to, say, run a social care service within your Council, you need to prepare for the possibility that you’re going to have to compete from the beginning with one or more existing providers – with all the tendering experience, financial muscle and reportable track-record they can bring.
There are however, five ways out of this for any group looking to spin out:
1. ‘Shadow’ company. Here you establish the venture, at first, as a kind of virtual-company, working within the Council ahead of a tender two or three years down the track. Staff are seconded in and there is an ‘arms length’ arrangement that mimics what it would be like to be legally separate. The idea here buy some time for the new venture to be gotten into shape for a competitive tender. You're not, of course, your own company, but you at least can operate more freely in preparation for competition.
2. Teckal company. Another approach is to set up a TECKAL company, one that just trades with the local authority and is still under its control . A TECKAL company has to do 90% of its business with the local authority and have an intention to remain primarily for that purpose only. The trouble with these is that they have to remain 'one client' companies in perpetuity - which is a bit of a limiter.
3. Joint Venture. An option increasingly under discussion is turn the procurement from a race you're in to be the provider into a contest for the joint-venture partner to help your staff group into a new mutual that delivers the service. You definitely continue to provide under the banner of a new JV mutual or SE - just not on your own. This will bring third party expertise and energy – but will mean you’re sharing control with a new JV partner.
4. Local Authority Trading Company. There exists 1990s legislation which allows LAs to trade so long as this is within their statutory purposes. This means an independent company can be set up with your staff in it – but that your company is wholly owned by the local authority whence you came. So not really an option for staff set on becoming employee-owned – but fine if the priority is simply to ‘spin out’.
5. Prove there is no market for what you do. For many services this are may well be possible, particularly those which are community-based, innovative or in some way unusual. You need to be confident though, so that the local authority feels safe from any external challenge. Some local authorities have also set up social enterprises in order to develop the local marketplace where they don’t feel comfortable with the range of alternatives to state provision, for whatever reason.
All of these provide a clear ‘way out’ for aspiring staff group of immediate open procurement of the service they run. However, all involve big compromises from all involved. It isn't just a ticket to freedom. The original idea of front-line being free, by right, to lead a spin-out – as happened in the NHS on Right to Request (2008-11) isn’t being envisaged this time around. Right to Provide (as it is being termed) is quite different to what happened with NHS spin-outs. It isn’t so much a right to provide as a right to tender.
What of joint-ventures? Much is being made of this as the real opportunity here. Instead of competing to run a service, what you get instead is a contest to partner with staff to set up a mutual. My hunch is that this is the option that most attracts the Coalition. Why? Because this involves other parties, including the private sector who can bring both cash and business expertise.
At the moment, there are relatively few live examples of such ventures actually happening. One reason for this, I am guessing, is that it isn’t really being presented yet by Government as the choice option for spinning out. The language is all about front-line workers emerging into newly minted ventures that they themselves have created. If the line was taken that joint-ventures were a preferred model, I am sure this would change.
And are they the best way forward? Well, joint ventures certainly solve some problems. The costs of setting up a spin out can be estimates at somewhere between 3% and 10% of first year turnover – and typically come in at somewhere between £250,000 and £500,000, all said. Plus JV is in many respects a more straightforward proposition. A JV, by its nature, can side-step a lot of the origination, developmental and commercial experience issues that dog new spin-outs. A well-positioned JV partner can turn an assault course into a relative walk in the park.
So, what’s not to like? Two things come to mind as possible obstacles. One is that a joint-venture is not the same as setting up your own business. You are not in control in the same way. It’s more akin to running a franchise than setting up on your own. Another is that you need JV partners which make sense for you, that share your values, which bring something to the party beyond what you bring yourself. Yes, a tender process should flush this out, but to even get to that stage, you've had to go through a lot on your own and it can be hard then to share the venture with new third parties that have come through a procurement process, people with whom you have no history.
Where do we stand? I am personally supportive of there being more JV spin-outs. I cannot see where the origination costs can come from otherwise. And, to be honest, I see a certain level of waste when it comes to the origination of spin-out businesses which could easily be absorbed by new JV entities eager to get into the game.
But it is the fact that JVs get around a lot of the difficulties around procurement that make it particularly attractive as a model. Otherwise, one is into all sorts of difficulties: When or whether to tender? How to set this up to give a mutual a chance of winning without breaking EU rules? How to create a clear pathway for staff which is not off-putting?
Therefore a JV will always get my vote ahead of the other main get-out option – the local authority trading or TECKAL company, which tends to more closely resemble its former self than feels comfortable. These entities are perfectly legal and achieveable and there are some great ones around but they do not give employees any more stake than was possible under state control. Which, if we're talking about employee ownership and its concurrent benefits, somewhat misses the point
Monday, December 5, 2011
Cry Freedom - why the stepped out leaders never want to go back - My recent piece for 'Third Sector' magazine
During 2011 we at Stepping Out have helped 25 leaders to cross the aisle from the public to the third sector, and their stories have inspired me to write a new book, published this week. How to Step Out’ is a guidebook for people in the public sector who want to take their service out as a mutual organisation or social enterprise.
What can be learned from these freshly-minted converts? Three things stand out. The first is that they have come into the third sector, with all its uncertainties, because of the unique freedom it offers: freedom from the senseless bureaucracy and brutal top-down management of the public sector: and freedom from its alternative - the hollow profit-grind of the private sector. For all of them, joining the third sector is like breathing mountain air after years of choking industrial smog. In the words of one of the newly liberated: “We are free – you cannot believe the energy and value this unleashes”.
The second bit of learning from this cohort of new third sector leaders is that good, old-fashioned leadership is absolutely key to seeing through major change. Convincing public sector workers to give up their ancient comforts for a life of competition in the free market is not an easy pitch. In their move from public sector caterpillar to third sector butterfly these leaders provide a masterclass in how to take people with you. You put yourself out there. You communicate until you drop. You listen. You engage people in the change. You put your money where your mouth is. Again, in the words of one recently stepped-out leader, ‘you have to make your case hundreds of times – then all over again’.
Another thing that can be learned from this group is that third sector providers should be involved in new-style public service provision in a big way. My book abounds with stories of how these organizations have achieved amazing things with former public sector services and saved public money at the same time. These leaders show us that the civil society sector is a viable alternative to the public and private sectors - not just a cherry on the cake.
This is perhaps the most important point to make. The cold logic of long-term austerity – possibly running into the 2020s - means that old-style public services are, sooner or later, going to run out of road. They will either have to stop or be replaced with stuff that is cheaper and better. We have to be part of the answer, in my view. If we refuse to be properly involved, and remain in our historic comfort zone, we will end up as bystanders to probably the biggest privatization of public services in the developed world.
One final thing that really hit me hard when we researched this book was the total unanimity on one question: ‘Would you ever go back to the public sector?’ Nobody, not even the ones who have struggled since stepping out, would ever entertain the idea. This says volumes for what is good about the third sector. You might not see it that way, but this sector, despite all its irritations, is probably still one of the best places in the world in which to work.
What can be learned from these freshly-minted converts? Three things stand out. The first is that they have come into the third sector, with all its uncertainties, because of the unique freedom it offers: freedom from the senseless bureaucracy and brutal top-down management of the public sector: and freedom from its alternative - the hollow profit-grind of the private sector. For all of them, joining the third sector is like breathing mountain air after years of choking industrial smog. In the words of one of the newly liberated: “We are free – you cannot believe the energy and value this unleashes”.
The second bit of learning from this cohort of new third sector leaders is that good, old-fashioned leadership is absolutely key to seeing through major change. Convincing public sector workers to give up their ancient comforts for a life of competition in the free market is not an easy pitch. In their move from public sector caterpillar to third sector butterfly these leaders provide a masterclass in how to take people with you. You put yourself out there. You communicate until you drop. You listen. You engage people in the change. You put your money where your mouth is. Again, in the words of one recently stepped-out leader, ‘you have to make your case hundreds of times – then all over again’.
Another thing that can be learned from this group is that third sector providers should be involved in new-style public service provision in a big way. My book abounds with stories of how these organizations have achieved amazing things with former public sector services and saved public money at the same time. These leaders show us that the civil society sector is a viable alternative to the public and private sectors - not just a cherry on the cake.
This is perhaps the most important point to make. The cold logic of long-term austerity – possibly running into the 2020s - means that old-style public services are, sooner or later, going to run out of road. They will either have to stop or be replaced with stuff that is cheaper and better. We have to be part of the answer, in my view. If we refuse to be properly involved, and remain in our historic comfort zone, we will end up as bystanders to probably the biggest privatization of public services in the developed world.
One final thing that really hit me hard when we researched this book was the total unanimity on one question: ‘Would you ever go back to the public sector?’ Nobody, not even the ones who have struggled since stepping out, would ever entertain the idea. This says volumes for what is good about the third sector. You might not see it that way, but this sector, despite all its irritations, is probably still one of the best places in the world in which to work.
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