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Make your cuts, but check who’s bleeding

Sunday, September 5th, 2010

In the widespread worry about the gap between the rich and poor in Britian, it seems almost impossible to get a real handle on what the coalition government’s cuts are doing and what their impact will be.  

Let’s take three contrasting views: The Economist, The Institute of Fiscal Studies (IFS) and The Treasury.

The Economist sees a positive future. By mending public finances, it says, the coalition government will not pass the buck to future taxpayers now in primary schools. Rather than hitting the poorest, the Economist suggest that the £10 billion savings from the welfare budget could be achieved  by means-testing child benefit (which goes to all families) or by scrapping pensioners’ ‘freebies’ such as winter fuel payments.

James Browne, Senior Research Economist from the IFS thinks otherwise (Today Programme, Radio 4, 25th August). The IFS has conducted a second review of the coalition plans, which takes into account the cuts planned beyond 2012 - or in other words the bits that were left out. It believes this budget will hit poorer housesholds harder than those with higher incomes. The elephant in the room, says James Browne, is the fact that tax rises only account for 20% of fiscal tightening – the other 80% will come from spending cuts that affect the poor more than the rich.

So what is the Government’s response? The official line from the Treasury is that the IFS review has ignored the positive impact of the budget on the economy and employment and that its findings are selective. Mark Hoban, Financial Secretary to The Treasury, speaking on the Today programme to Justin Webb (more here http://news.bbc.co.uk/today/hi/today/newsid_8942000/8942261.stm), confirmed that the government had conducted its own distributional impact assessment on the budget. However, he was unable to confirm that the compulsory assessment required by law under the Equalities Act of 2010 to measure the impact on ethnic minorities, disabled and other vulnerable groups, had been completed. Incredible.

Perhaps the real measure of this new government will be its legacy and whether the cost of not passing the buck to future taxpayers will be met by further disadvanting the poorer taxpayers of today.

The secret that drives our behaviour

Sunday, September 5th, 2010

According to Bristol University, the average road user spends six months of his or her life in traffic jams.

We all know the feeling. There we are sitting in a traffic jam waiting for the congestion to clear and when it finally does, there is no apparent cause for the delay.

This new study shows that a single driver braking very slightly will prompt drivers behind to err on the side of caution. The knock-on effect grows and grows until a few miles back, baffled drivers find themselves at a halt.

I drive around the UK a lot and I often find myself mystified by the driving of motorists in the overtaking lane. When the roads are busy, significant numbers of drivers cram themselves into the outside lane, drive very close to the car in front and spend most of their journey tapping on the brakes. I don’t know if I missed something in my driving lessons, but isn’t it common sense to adjust our speed by switching from lane to lane to keep the whole traffic system moving?

So what is the cause? From my observation of any of the major motorways in Britain it is drivers choosing to travel at around 60 miles per hour positioning themselves in the middle lane when they could very comfortably travel in the inside lane, leaving the middle and the overtaking lane for drivers wanting to travel at speeds in excess of this switching as their required speed dicatates.

According to Dr Eddie Wilson from University of Bristol http://www.bris.ac.uk/news/2010/6948.html these stop-and-go waves caused by illogical driving behaviour are generated by very small events at the level of individual vehicles. In certain situations a tipping point is reached that magnifies small effects to create large changes that can involve hundreds of vehicles and which may be a couple of miles long.

I have seen this phantom behaviour in organisations and it is incredibly influential in our perception of ‘the way things work around here’ and organisational culture.

Let me give an example. Earlier this year, I was working with a team of around 30 people to find out what got in the way of good performance. Four people said that they were unhappy that others frowned on them if they left work early and they felt it was ‘not the way things worked around here’ to leave early – for any reason. After the fourth comment, a colleague bravely asked the group  if they believed it was true that, as a collective, it was generally felt to damage performance if one of more of the team left the office ‘early’.

A silence fell and before a response was forthcoming, people carefully considered each other. The response came back ‘of course we don’t’. The four people who had raised the concern paused – they realised they had inferred the culture existed when it didn’t. What was more, their interpretation was affecting wider group behaviour – they stayed when they needed to go because they felt it was unacceptable to do otherwise.

For this team, this was a critical turning point in realising that individual team members determined the working climate.

But what does this tell us about human behaviour? On the roads, we can hardly blame people driving in the outside lane for causing what Bristol University calls ‘phantom traffic jams’. As the entire road system ‘moves to the right’, the left lanes become virtually unoccupied causing inevitable jams. The actions of each individual driver directly impacts how the system as a whole behaves.

As a life-long Labour voter, the irony of this in relation to our current political system did not go unnoticed. And as an eminent scientist once said, ‘It’s quantum physics – the action of the individual determines the direction of the whole system.’

How to tell when the boss is lying…

Saturday, September 4th, 2010

Have you ever suspected your boss of telling a porkie but never quite been sure?

Reported in the Economist  (‘How to tell when your boss is lying’, 21st August ) is a study by the Stanford Graduate School of Business into this very subject. They have analysed  the transcripts of nearly 30,000 conference calls by American chief executives and chief financial officers between 2003 and 2007 and have revealed the key clues to understanding  when they are not telling the truth.

This fascinating study gives any corporate dweller an understanding of the psychological traits of liars. According to the study, deceptive bosses make more references to general knowledge (‘as you know’) and tend to use fewer ‘more-extreme positive emotion words’; so instead of describing something as ‘good’ they call it ‘fantastic’. They also avoid using the word ‘I’ and opt for the third person and use fewer hesitation words (such as ‘um’ and ‘er’) suggesting (according to the Economist) that they have been coached in their deception.

Jeff Skilling, boss of Enron, was once called into question by an investor who challenged his portayal of the company’s financial health. His response was ‘Asshole!’ So expect swear words to figure high in a deceptive boss.

This formula, of course, cannot last for long and it remains for PR and marketing departments to encourage bosses to hesitate more, swear less and avoid expressions of positive emotion…

Kenyan stories

Sunday, August 8th, 2010

When I returned from Kenya earlier this year, I wrote about my experience mentoring Kenyan entrepreneurs – see the blog A Little Local Difficulty.

The experience of working with small businesses to get the best from their people taught me a great deal because it put me outside my comfort zone.  I was also able to experience first hand what it was like to live and work in Kenya, at least  for a short time, and to meet some very wonderful Kenyan people.

I confess I’ve been a little surprised by the level of interest in the article and I haven’t had the opportunity until now to thank everyone for posting their comments.

It’s great to hear your views and if you ever feel like sharing your experience of what it is like to live and work in Kenya and haven’t posted yet, it would be great to hear from you. After all, my perspective is only my perspective and it’s always good to have feedback on other people’s experiences…

Why trashing BP misses the bigger picture

Sunday, August 8th, 2010

I always pay attention to myself when I get angry.  Anger tells me, without any doubt, what is really important to me.

The source of my anger is the recent campaign against BP by Greenpeace. I was already tired of the rhetoric when Greenpeace called for people to disable BP petrol pumps. Then the witch hunt extended to its creation of a new BP logo.

The logo features a bird dripping with oil in front of BP’s petal logo. ‘The bird’s agony is a strong reflection of what is happening to our world with these tragic events,’ says the logo’s designer Laurent Hunziker. ‘Placed in front of the logo, it looks like a fatal sunset for all of us.’

Apparently 25,000 people voted for it.

So what of this fatal sunset? Regular visitors to my blog will know that I am not one to champion BP or the oil industry. 

But let’s follow this to a logical conclusion. What if regular protests like this dissuade customers from visiting BP petrol stations? Firstly, they would need to drive further to get their petrol, using up more of this rare commodity. Secondly, if a lack of consumer demand shut BP down for good, its business would just pass to the highest bidder.

The real flaw in Greenpeace’s argument, though, is the focus on BP. As anti-corporate, fashionable and socially acceptable as it is to trash BP, the company is by no means the worst offender. As we continue to argue and point the finger, the biggest misdemeanours of the oil industry pass relatively unnoticed. 

According to Amnesty International, Shell is currently toasting $9.8 billion profits while being responsible for polluting the Niger Delta region of Nigeria. Not only are Nigerians having to drink polluted water, they are also having to grow crops in polluted soil and catch fish in polluted rivers.

On the day of the annual shareholders’ meeting in London on 18th May, Amnesty International and 2,000 of its supporters paid for an advertisement to appear in the Metro and the Evening Standard telling the story of Shell’s human rights abuses.

A few days later, the company announced it was committing $2 billion to reducing gas flaring in the Niger Delta. Cheers Amnesty. That’s what I call a campaign. I did write to Greenpeace in protest at their actions. They chose not to respond.

Oh and just in case you were wondering what had happened to the story- according to Reuters – BP Plc said last Thursday no oil was leaking into the Gulf of Mexico for the first time since its huge spill began in April as it conducted pressure tests on its blown-out deep-sea well.

Let’s hope in our zeal to protect our freedoms, we don’t lose the plot.

Dave and Nick’s big adventure

Monday, July 12th, 2010

If you believe everything you read (City AM, Tuesday, 6th July)  trade union leaders are clubbing together to fight the toughest public spending cuts in a generation. Reports  today indicate that three unions, representing train and bus drivers, prison officers and civil servants, would support a general strike if the government sacks public sector staff or alters the terms and conditions of their employment.

There is talk of co-ordinating  industrial action for maximum effect. For a Thatcher-era 1980s child like myself, it all sounds horribly familiar. It brings to mind the plight of the miners, secondary picketing, changing legislation about the right to strike and something that we now like to call ’downsizing’. It also reminds me of people most in need of state support having to do without it.

What lies ahead will be a fascinating journey for a shiny new, wobbly-legged coalition government full to its well-fed cheeks with deficit-slashing zeal, a weary, worldly-wise and bloodied public sector and anyone at all interested in employee relations…

End of the road for British Petroleum?

Monday, July 12th, 2010

I for one hope not. Regular visitors to this blog will already know about my fascination with BP and the oil spill in the US. My reactions change with each grisly news snippet and I have to confess to being fascinated by the circus around the whole affair. Picture the scene: first we have Barrack Obama trying to find an “ass to kick”. Then we see the front man, Tony Hayward, hauled before a Committee to explain what BP did or didn’t do. Whilst the gentlemen entertain themselves in the boxing ring trying to find out who is to blame, the oil simply keeps spilling.

Recent news has taken a different turn. There is talk of removing the entire board once the spill is cleaned up. BP’s share price has fallen. Behind the scenes, the oil companies are trying to work together to find a solution. And along the way, while everyone is blaming everyone else, we are missing a trick.

Surely the reason BP (and other oil companies) are drilling so deep and so dangerously is to meet demand? At what point does ethics override profit? Is it at the point where the risk is so great that a responsible business would stop drilling? Or is it simply a case that risk wasn’t properly managed? I am interested to find this out in the fullness of time. In the meantime though, isn’t it just a little ignorant and arrogant of us all to sit on the sidelines and judge what we perceive as inappropriate behaviour? Aren’t we still craving fuel to drive our cars, heat our homes and generally find our way in life? At what point do we, as individuals, start to recognise that it is our ceaseless demand for these rich natural resources that is driving this industry and, until that changes, it’s pretty difficult to blame everyone else. Let the buyer beware.

Check your wellbeing online

Saturday, June 12th, 2010

If you’ve not yet discovered the BBC Headroom website  take a look now. This great little resource is wonderfully easy to navigate allowing you to check out a whole array of health issues and look at how your lifestyle could be affecting your wellbeing. You can even register for a free online coach. Also available are a series of short wellbeing videos covering stress, dealing with loss, anxiety and depression, as well as tips on personal happiness. Or, if that’s not your thing, express yourself  with an easy-to-make animationed screen saver using MoodScape. Ahhhhh…

Sign up for a business ethics masterclass

Saturday, June 12th, 2010

Operating ethically is probably one of the biggest challenges facing businesses today. The Institute of Business Ethics is running a number of day-long masterclasses around understanding business ethics and how to make it work in your organisation. Its annual debate, “Why Does a Low Opinion of Business Matter?”, takes place on Thursday 8th July in London. There is no charge for attending the debate. Masterclasses cost non-subscribers £175 a day, subscribers £150.

BP: if you don’t know how to put it right you’re doing it wrong

Wednesday, June 9th, 2010

Actions speak louder than PR

News headlines have reported that this leak could be worse than the Exxon Valdez spill of 1989. In the context of responsible business, two thoughts occur to me. The first is why the collection vessel BP plans to place over the leak to funnel oil to the surface has only ever been tested in shallow water. If  BP is drilling so deep, why isn’t it competent enough to tackle leaks? If it isn’t competent, isn’t it basic risk management, not to mention best ethical practice, not to drill?

Secondly, bear a thought for the Niger Delta where, according to Amnesty International, this amount of oil is spilled every year - one of the ten most important wetland and coastal marine ecosystems in the world.  What’s worse is that it is happening by people’s homes and water and food sources, without anywhere near adequate clean up. And how often have you read about this in your broadsheet? It is a double standard of staggering proportions. The main company responsible – Royal Dutch Shell – never tires of trumpeting its strong ethical business principles. Is it no surprise then that people are cynical about organisations claiming they operate ethically? 

If we’re lucky, out of such disasters will spring better practice not only by the oil companies, who we hope will eventually be forced to find more sustainable ways of sourcing energy, but by governments, whose cosy, unhealthy relationships with the oil industry (like the bankers before them), are now truly under the public gaze. I’m ever the optimist…