Archive | October, 2011

Socialising Business – increase number of women on boards?

29 Oct

Cameron’s latest plea to companies is to get more women into the boardroom. The Coalition government is obviously desparate to find ways of stopping company executives paying themselves excessive bonuses ( 49%in some cases) when the economy is stagnant, unemployment is growing and growth is not. This seems a bit of a cop-out when what is needed are legislative, regulatory and structural reform not just of finanical transactions but perhaps also of company law. Socialising business cannot just be left to individuals and more principled practice – if government has no role in governance frameworks we are lost.

It is also ironic that Cameron’s solution is dependent, not on his government, but on women who have been excluded from the boardroom for years on the grounds that they are not pushy or hungry enough to survive.  Yet more research by Harvard Business School, yet again calls for women to get tougher, be more assertive and single minded then they will get a seat on the board- in fact women would be more more attracted to financial services and the boardroom if the men made some effort to change. 

The issue is not whether women are hard enough to enter the boardroom but whether politicians and business leaders start to recognise the dangerous consequences of ‘male’ only cultures, where impression management and cultural conformity to the  bottom-line totally obscures the need for an intelligent analysis of short-termism and the impact of forms of financial innovation that have given innovation a bad name. 

Women in business earn on average 20% less than men and in my experience are not so masochistic that they are desparate to work in the city. It is true that when women sit as boards members they do tend to question the impact of practices, judgements and systems (read Enron account)more than many of their male colleagues, who appear more concerned with following conventions. Male cultures often are compliant cultures – which is one of the reasons why perfectly civil guys when in the company of their mates become macho (read Tony Blair’s diaries/watch Paxman etc). However, critical scrutiny is usually not welcomed within the boardroom, unless it is chaired by a woman, those who voice concerns over practices or who want to unravel risks are  usually viewed as irritants, mavericks or outsiders. In such an environment, those who alert their colleagues to risk and dangers are not listened to.

Charles Handy  told an audience in London Business School some years ago that if you really want to change the attitudes of dominant men, speak to their working daughters. Daughters he said have the power to ‘speak truth to power’ and could tell their dads that governance in the boardroom is just as important as it is in government  – and that society depends business finding a way of acknowledging  ‘social value’ and local connectedness within corporate strategy would make a difference to the company’s reputation and with more robust national governance, their survival.

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Innovation in public sector drives private sector growth

22 Oct

On the 21st October in MBS the Manchester Institute of Innovation Research presented findings from a recent survey on ‘Public Procurement and Innovation’ part of a wider study sponsored by the ESRC, BIS, NESTA & the TSB . Professor Jakob Edler and Dr Elvira Uyarra said the team were surprised themselves by some of the findings; particularly that innovation in the public sector was when adopted by businessn was improving their export sales.

Key findings can be found on http://research.mbs.ac.uk/innovation and were presented to a small group of  public procurers in local government, health and the Cabinet Office alongside those from supplier companies such as SERCO and smaller companies such as Renfrew.

Out of a sample of 800, 50% of which were SMEs, 60% of reported that government, in particular, was stimulating innovation in business largely  in larger companies. In other words the procurement process was having more impact than had been expected – particularly where contract specifications made direct reference to requiring innovation. Innovation was more likely suppliers said, if procurers had early interactions with them and was ‘outcome’ focused.

However, the survey also reinforced well-known anedotal barriers to innovation mentioned by the majority of respondents such as,  price, too little early conversation between supplier and public buyer,  risk-averse procurers,  little acceptance of variation and over-prescriptive specifications.  SMES , Social enterprise and third sector organisations were particuarly excluded by the above. None of which was surprising.

David Shields, Head of Government Procurement Services said a lot of the difficulties concerned siloed budgets in government and public services and wider structural barriers  that determine the timescale, criteria and performance measures in contracts. he also said he thought these could be overcome with better procurement practices. “The main issue is how to take to scale?”

Mike Phillips from Renfrew a  design company brokering engineering solutions reported that in his experience public procurers remained risk averse to new solutions. He thought the problems were felt in smaller companies down the supply chain. Innovators who provide solutions, discover that once their innovations are accepted and are adopted by the NHS or DH they are caste back down the supply chain even though they drove the innovation in the first place.

Colin Cram from MERK1 said ” SMES cannot respond to specifications, yet they are the key to recovery and growth, the public sector tends to buy what its always bought and goes along with grand schemes rather than smaller innovators.”  

I agreed that given that SMES are key to local recovery, public procurers had to  find ways of involving SMES and that this was an issue about size as much as ownership; public institutions talk to corporates and do not have the mechanisms for networking with smaller agencies or the contacts for spotting innovation. Whereas they do have the internal human capacity for public procurement. At the local level there is more effort to communicate with  SMES and social enterprises, their being at the heart of more innovative services in health, care and personalised services.

There are two strands to governmental innovation practice, one which is about efficiencies and taking innovation scale and the other about exploring alternatives and supporting pilots. Departments such as the DH and MOJ in particular invest smaller entrepreneurial SEs for their innovative personalised services for offenders, NEETS or those with mental health problems etc and then cannot find a way of commissioning these from the mainstream. The issue of how to take to service innovation scale is a critical problem for public service reform. At the moment too many smaller third sector organisations and social enterprise are losing their contracts rather than gaining them because they are not large enough to compete and do not fulfil criteria of having a turnover over £2million or the financial capacity to carry costs incurred in development that large, public service contracts involve.

Where it is a matter of innovative products central government can commission once  departments barriers are overcome. For instance, at the roundtable Alec from Coston recounted the how they had created a ‘closed loop service’ for waste paper recycling for various goverment depts and were looking to extend their services across the whole of government in order to achieve a level of tonnage that would justify no longer sending waste-paper to Germany for recycling.

Innovative services are delivered through a complex set of relationships that demand continuity – the value of smaller social enterprise is that they have the capacity to respond to changing personal and local conditions; these smaller agencies  are not large to win large contracts from DWP, DH etc,  most had contracts with the Local Authorities. Given public expenditure cuts, local authorities have 25% less to purchase with. 

DWP appear aware of the conundrum of both the need to rationalise the benefits system to reduce costs and of delivering more effective personalised local services, in an attempt to deliver on both counts they are putting pressure on prime contractors to work in partnership with local sub-contracting agencies ( often in the third sector or a social enterprise). 

However, this is not just a managerial solution but also a political one of priorities. It is interesting that a Tory MP, Chris White  is introducing a Bill to support the work of innovative social enterprise by including ‘social value’ as an outcome to be delivered by suppliers within contract specifications, alongside ‘price’ and other outcomes . He said he recognised this is a ‘Dry Bill’ not one that needs supporting non-the less. 

Social Enterprise 2011 on 8the November in London, we need more of these events in Manchester see Guardian.co.uk/socialenterprise.

Politicians play – while we burn

15 Oct

The last two weeks have seen Cabinet Ministers demonstrate a total lack of  know-how or seriousness about government – their complacency while ‘Rome Burns’ is amazing,  but perhaps not surprising given that many ministers appear not to care about governance and believe that not caring about how government works  is positively cool.

I cannot believe that Oliver Letwin is so blase about government that he strolls through St James and dumps letters from constituents into a park bin, while Andrew Lansley appears to have not noticed that years of dieting have not reduced obesity,- or that Liam Fox did not think that perhaps having his best friend, with interests in the arms trade, at almost all official meetings with no civil servant present was not good governance. It is not only Boris that is bonkers.

All a time when we have experiencing the worst economic crisis since the 1930s and people ( especially women)  are losing their jobs, pensions and the possibility of work because the country’s debt has soared  largely because of a lack of governance over the finance and banking sector. The attitude to being in government by many ministers seems childish and a bit like they are still playing in the playground.

The country might have rejected Brown for a failure ‘to appeal ‘and to stop micro-management, but there are few people in the regions who gave the Coalition  a mandate for  complacent government and most are desparate for good governance. Unfortunately, in spite of Austerity there is little political leadership, rather the old see-saw politics, that lurchs the country from mild statism to ‘no- government all ‘. Being in Coalition is not initself a new way of governing.

Cameron is totally right not to listen to his own Party – but he seems to be overseeing a group of ministers who perpetuate a rich, public school boy culture who appear to think that ‘being attractive to the public is about being nonchalent,  uninterested in ideas and casual about how to run the country.  It is clear there is an interest in learning from Tony Blair’s diaries about how to remain in office. so lets have an equivalent interest in how to support innovative government.

Innovative government seems to only concern the size of government,   policy-makers have entrenched and are not asking the difficult questions, removing ‘red tape’ is not a bad thing,  but hardly a policy if new forms of more open and inclusive governance are not being developed.  While they continue to be bypassed as dinasaurs some locality leaders ( across Party lines) are exploring how they can better work with business etc – but not at any price, new governance requires mutual adjustement on all sides. I am working with a number of places where creative leaders are attempting to break out of both tribal politics and sector silos, particularly with those in Yorkshire with Local Government Yorkshire and Humber where there is a tradition of leadership innnovation. Their public innovation awards will be announced on the 17th November – and they get better every year.

Innovation is about connections between people, collaborative and exchange in any sector – good governance is about creating the mechanisms whereby creative new firms and public services have access the markets. Government can do something about this – but no-one is talking about it.

On Friday 21st October we are having a Roundtable on Innovation and Public Procurement and will post interesting feedback from the MBS research, public procurers, businesses large and small and the Cabinet-Office.

Ed, moralism never changed behaviour, creating healthier environments a better bet

1 Oct

Great to hear Ed Miliband talk about socialising business, but his populist appeal to reward those who do good as moral citizens but not ‘feckless families’, is worrying and smacks of pre-war nostalgia.

I haven’t blogged for over a month because of a carpal tunnel operation and am still finding typing and writing difficult. However, frustrated by the serious lack of social psychology in public reform debate and the continuing reference to individual choice as the basis for behaviour change, irritates me no end. Its easy been ‘rational’ and ‘moral’ when your ‘well off’ and/or content; it is a lot harder to make good decisions when you feel you have no future and are surrounded by  ‘consumerism, wealth and justifications of why society owes you. It is amazing the number of the chief executives who feel like victims and earn over £100K.

The reason why some of us are more interested in locality eco-systems and new forms of governance than behaviour change , is because without an alignment between people’s lives and  ‘systems and governance’, serious behaviour changes amongst bankers or offenders is unlikely to take place.

People’s behaviour is influenced by cultures,  rules and government frameworks which have become unbalanced by expectations of immediate return, financially and personally. Individual rights have become confused with immediate gratification.

Of course everyone is responsible for how they behave in society, but I have learned from a long involvement in public service innovation, if you really want to embed  more respectful, egalitarian attitudes then these need to be reinforced by the wider system, in training, recruitment, promotion and that people need the space and time to develop. Changing significant behaviour is not the same as ‘nudging’ someone to drive slower, but of persuading them they have a future and that it will be better for them when they get a little organised,  because they do not any longer have to grab what they can when they  can.

The governance role is not the same as the individual’s role. From Margaret Thatcher,  onwards political leaders in government have been acting as if government is just like running a business or a family, it isn’t.  Humanising politicians may be a good thing – but the point of social governance is go beyond the individual and set governance frameworks for all of us, that are inclusive and fair. 

There is  a category confusion amongst politicians about personal roles and  their role in government. Being faithful to your wife may be a sign of a ‘good man’ but those in government surely must demonstrate  more than being faithful. Personally I would feel a lot happier if politicians spent more time thinking about how to create the conditions for a healthier society rather than acting as referee on what social activities the rest of us should get involved in.

Unfortunately, the press smell out stories of individual failure, hacking phones is not the only symtom of  a purient press, and now is the time to challenege the media as well as the ‘red-tops’. Why is the BBC showing pictures of an MP’s wife crawling in the garden of the husband’s mistress’s house for a kitten?  This is is the News not Candid Camera. Everyone knows that when your relationship breaks down you become a little ‘potty’. This was demeaning for the BBC as well as for the woman, someone not in the public eye and already humiliated.

In the US the dreaded word is the ‘r’ word ( regulation) and I am not a fan of unnecessary regulation , but big issues like carbon capture, public health and inequalities need regulation. The Smoking Ban by New Labour probably did more for public health than any other intervention by New Labour.

What we need is some serious analysis of how existing regulations and law affects short termism in investment and business ? There is growing interest in how to  support (locality) eco-systems for those in business, universities and public agencies wanting to incentivise social goals in the longer term  and new forms of ‘social’ business.

This is about of creating environments where social relationships are valued as the foundation for sustainable growth and reducing inequalities, to only talk of behaviour change is to perpetuate the notion that government doesn’t matter.