How to Leverage UK Economic Growth: Positive Industry Policies and Deployment of Professional Interims? – Best Blogs Series

This blog was originally published in June 2011. However, it occurred to me that the UK still does not have a industry strategy and is still heavily at risk in the financial services sector. Ahead of the UK general election, perhaps it’s appropriate to revisit some of the UK’s strategic weaknesses?

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Regular readers of this blog might be getting a bit tired of me regularly banging on the drum about Professional Interims but please stay with me for the moment!

To remind you, recent posts have included:

This week the Chinese Premier visited the UK, starting at the Chinese owned MG plant in Oxford – the next day he and David Cameron announced a large trade deal but it seems that a few days later, Germany got a much bigger prize. This prompted me to think about constraints on UK exporting. Meanwhile, President Obama announced that the US must invest in manufacturing, especially cars, planes and wind turbines – this caused me to challenge a journalist on Twitter “whether the UK had an industry policy?” On a personal basis, I have continued with my “Catch 22 campaign” to try to get more professional interims into the Public Sector to help with transformation (delivery of reforms) – this has included numerous discussions with interim providers, other professional interims and the Cabinet Office. Meanwhile, I have followed other news about Government U-turns, lost stamina for reform etc. I also called Andrew Turner, a fellow professional interim to alert him that our joint blog “What’s the Difference between an Executive Interim & Management Consultant?” was still getting a large number of hits on a weekly basis. Andrew is a seasoned Interim Chief Executive, specializing in change management, business strategy and performance improvement.

Let me now try to weave a coherent thread here. Andrew spent much of his career overseas, especially in the Americas and we started taking about deploying interims to help businesses grow overseas markets, either with exports, acquisitions or joint ventures. A few days later, our thoughts had moved to scarcity of specialized resources to grow businesses. Andrew articulated the argument in a LinkedIn professional debate as follows:

Technology is driving the workplace towards ever more specialised segments. Whereas 20 years ago a specialism would encompass a fairly wide band of knowledge, today that band is being broken down into ever smaller subsets, creating specialists in each one of them. As a result, there is an accelerating trend towards organisations and people transferring tasks which are not part of their core competence to external skilled experts.

To clarify, this is not the same as outsourcing, where whole chunks of work are delegated to third parties to carry out more efficiently than would be the case if kept in-house. Rather, it is the transferring of peripheral activities to specialists (micro-specialists if you prefer) who can carry them out far more skilfully than we can. For example, who has ever spent time creating a mediocre PowerPoint presentation and wishing it could be done by a skilled show designer?

Perhaps this is what David Cameron had in mind when creating his vision of the “Big Society”? After all, government is just as affected as everyone else by this move towards specialisation; they cannot expect to be all things to all men, so perhaps professional interims can become the micro-specialists that support and give substance to the PM’s vision?

My “Catch 22 campaign” has convinced me that the Government, politicians and other stakeholders did not fully grasp the potential of professional interims – there is still too much dependency on consultants, in my view. I started thinking about how to try to convince the Government to adopt a positive industry policy towards professional interims?

At some stage in the week, the penny dropped and I realized that in comparison to China, France, Germany, USA, Russia etc. the UK Government did not have a positive industry policy. I have recently started reading Peter Mandelson’s book “The Third Man” and I suppose that I was sensitized to industrial policy (Peter Mandelson really has an expert grasp of this subject). Anyway, the hares really started running in my mind. I appreciate that George Osborne as a strong believer in neoliberal, monetarist economics probably does not have too much time for Keynesian interventions but surely industrial policy must be on Vince Cable’s radar, as well?

Given the editorial freedom of my own blog, this prompted me to hypothesize that:

In order to grow the UK economy more quickly, the Government needs to:

  1.  Articulate positively policies for all major industries
  2. Identify major resourcing constraints by major industry
  3. Identify support groups, like Professional Interims, that can help the Government identify, risk assess and implement the required changes and delivery programmes (highlighted as constraints under (2) above)
  4. Explore greater and more effective deployment of Professional Interims and Independent Consultants to design and deliver transformational change programmes cost effectively at the local and regional levels (Big Society), dovetailing with major consultancies operating at the national level 

Cabinet Office & Treasury Score Own Goal with “Catch 22″: More Myths, Realities & Escalating Risks? – Best Blogs Series

English: East entrance of HM Treasury Français...

English: East entrance of HM Treasury Français : Entrée Est de HM Treasury (Photo credit: Wikipedia)

This blog was originally published in September 2013. But ahead of the UK’s general election next month, many of the issues raised still seem relevant.

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Regular readers of this blog will know that I have repeatedly highlighted the increasing likelihood of failure from Local Authorities relying on Shared Services programmes to achieve draconian cuts in budgets (mandated by the Coalition Government). Last week, I  cautioned against spending another £5 Billion on capital investment, citing the Government’s capacity to avoid the next omnishambles. Most of this year, I have also been leading a campaign to get the Cabinet Office to reverse its Catch 22 policy  which, in my view and that of many colleagues, is not in the national best interest. The Rt. Hon. Francis Maude MP, Minister for the Cabinet Office and Paymaster General has claimed that the Government’s Catch 22 controls over independent executives, consultants and contractors has saved circa £1 billion. Unfortunately, the reality, highlighted this week, is that the Catch 22 policy is a fatal own goal, with circa £3 billion plus of cost savings at increasing risk of delay, overspend and failing to meeting their policy objectives. The Government’s flagship welfare reform programme is just the latest casualty. Before examining welfare reform, let me highlight the likely consequences of Catch 22:

  1. Cost reduction targets by the Public Sector for innovation and processes improvement are likely to be missed, so that the swathing budget cuts will increasingly fall on front line services
  2. Opportunities to cut waste in benefits and other public services will be missed or delayed years, putting more pressure on tax payers
  3. Public Sector workers are increasingly likely to take industrial action, with its associated impact on service and quality
  4. The UK’s once proud and World beating independent executive and contingency labour sector is likely to be permanently weakened, with many top quality independent executives exiting the industry, retiring or going overseas. The same entrepreneurial independent executives could have helped the Government achieve both Public Sector Cost Reduction and Private Sector growth but sadly the opportunity is likely to be permanently lost.

Now let’s take a closer look at this week’s news about the Government flag-ship welfare reform programme:

If the Department of Works & Pensions (“DwP”) (which represents twenty-three percent of total public spending) is seriously at risk of not achieving targeted cost reductions what chance is there for the rest of the Public Sector? DwP is often heralded as one of the best-managed departments. Unfortunately, this time DwP is also critically dependent upon HMRC to deliver a new real-time system to an extremely tight time schedule. Why didn’t implementing an enormous, cross-departmental IT programme, at the same time as savage head-count reductions, plus Catch 22 sound alarm bells? Also why were simplistic assumptions about the number of claimants with access to the internet not independently validated?

At the moment, Chancellor Osborne’s A Plan is looking increasingly at risk. It seems that the Government’s reform agenda was never properly challenged by top class professionals, like independent executives. Without independent validation of bottom-up costings and risk assessment, such an ambitious reform agenda is like a run-away train – a crash waiting to happen. Of course, the Government still has many consultants in play (despite Catch 22) but their independence, objectivity and track record gives some room for concern. Let’s take a helicopter view of the emerging scenario:

  1. Public Sector cost reduction is increasingly likely to give way to cuts in front-line services, as reality replaces myths and risks crystalize
  2. Government policies to stimulate private sector growth have been far too weak and ineffectual. The Government has consistently failed to stimulate short-term demand, especially investment, as increasingly strongly advocated by the IMF and OECD.
  3. Increasing downside risk on global growth and from the Euro crisis has meant that Plan A’s assumptions are now increasingly buried in sand.

What will Chancellor George Osborne do next? Because of his relative inexperience prior to becoming Chancellor is he perhaps unduly sensitive to changing direction?

I suppose what worries me most is the absence of joined up thinking and holistic planning across the Coalition Government – surely this is both dysfunctional and wasteful (see the Cabinet Office’s update of pan-government plans)? For clarity, let me quickly recap on what I regard as the Public Sector reform life cycle (this is quite different to Best Practice in the Private Sector, as I have previously described):

  • Outline reform agenda (manifesto, Coalition agreement)
  • Outline policies (Green & White Papers)
  • Define policies and provide way forward (Bills and Acts of Parliament)
  • Define strategy
  • Delivery
  • Post implementation review

I struggle to understand the Government’s detailed strategy, especially on introducing innovation in the Public Sector. One of the Government’s senior strategy consultants is McKinsey. By chance I noticed that McKinsey were citing Kenya and Georgia as Best Practice exemplars for innovation in government, arguing that a willingness to take bold risks can make government services better and cheaper.

The Coalition Government are, of course, taking enormous risks but I am concerned with the effectiveness or robustness of risk mitigation – this is different to the pan-government risk register sponsored by the Cabinet Office and the Treasury.

My advise to the Government is simple. For cost-effective risk mitigation on Public Sector transformation programs, deploy independent executives client-side on both strategy formulation and delivery phases.

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