We created a monster

We created a monster.

We grew it from seed, we gave it confidence and status.

It grew, in size and strength, and for a while it seemed to love us and nurture us.

And then one day, at a time uncertain, it was bigger than us. It was a collective of monsters that was smarter than us, and so it robbed us, enslaved us, mis-educated us, mistreated us, and then told us it was our own doing, and denied it was a part of us.

It’s still there. Alert the police and the government, but they won’t answer, for they have been enslaved too.

 

There you go, a dramatic kick off that’ll hopefully keep you reading the rest of this, or at least a bit further.

The monster I’m referring to is THE CORPORATION.

And I think I understand corporations a little bit – I work for one (as do many), and I’ve plenty of years experience of working in one as an accountant / manager / senior manager. And I read a bit, and think a bit, and try to notice stuff. But as usual on this blog I want to knit a few observations together, and try to make a point.

 

The corporation is an entirely legal construct relating to how folk deal with each other. So everything it is, everything it can be allowed to be, ought to be defined by us.

AND THIS MAY BE MY MOST IMPORTANT POINT, and if I follow my plan, I’ll get back to this at the end – THE CORPORATION IS JUST FOLK.

So a corporation is a legal construct of folk doing stuff, for other folk, with a set of assets. Once, long ago, in the baby years of corporations or firms, the assets were the property of an individual, or a small group of individuals who knew each other. They would be actively involved in the management of their assets, it was their capital, and they’d use their own knowledge, and the services of other folk, to achieve their goals – make something, grow something, create something, and then find customers for that thing.

Over time, this evolved. The corporations grew bigger, the owners more remote, the managers more professional. However this is where things started to go wrong.

As firms get larger (and more mature), the ability of single individuals to influence the outcome reduces, bureaucracy increases, the hierarchy creates incentives for individuals that diverge from those of the whole organisation (and the society at large), and the influence of the asset owners decreases dramatically. In fact, since the managers of the firm tend to know more of what’s going on than the owners do, there’s a built-in opportunity to pursue their own self-interest. This is reflected in the economic theory with contributions by the likes of Baumol, Williamson, Milgrom & Roberts.

So economists know that the activity of a corporation tends toward the negative as the corporation becomes more mature, and grows in size.

Does this happen in reality?

You betcha. Look at the wonderful culture of executive compensation. How to pay senior staff? Once the owner would have dictated how much management would receive, but since the owners now have very little to do with the management, then the management establish an arm’s-length approach, by having a committee and some consultants who are their friends & acquaintances, and probably all experienced senior executives themselves, and they tell the executives how much to pay themselves. Maybe they base it on some KPIs, indexes, etc, which gives the appearance of achievement propagating reward, but they make sure the achievement is achievable, and game-able.

There’s little doubt that the amount of cash paid out to senior executives has substantially increased, and yet the world doesn’t seem any better, and your goods and services aren’t that much more satisfying, and your brand loyalty isn’t any greater. And each corporation can’t have exactly the BEST people, because the corporation next door also has 50 of the best people etc. So ok, execs have manipulated the lack of governance from the owners to feather their nest. Funnily, I don’t think that’s the biggest problem.

Thinking of how the Corporation creates dysfunctional behaviour, consider how it creates tribalism, and competition; that can be a good thing, teams that bond work well together, shared goals etc. But it can also blind us to consideration of the world outside our tribe, which is dangerous. People in corporations are encouraged to group-think; there’s a company way of doing things, a way of considering the competition, a view on HOW to go about business, and naturally, those in power tend to be really good at following the culture, and those that rebel tend not to become powerful. The culture becomes more entrenched, more extreme.

We understand then that there’s a real shared mind-set among the executives of a corporation, and this can tend to create a very strong us vs the world point of view. In relation to the competition, this can be a useful thing, for the corporation itself, but also for the potential consumer; each firm is trying hard to differentiate itself, make stuff better, cooler, quicker etc.

But…

Business is hard to do really well

I mean, there’s a lot of competitors, or folk who can potentially compete.

It’s hard to have something different enough in good ways that folk want to buy it. It takes a hell of a lot of time, luck, ideas, failures and mistakes to get to the point where you can be a decent player in a market.

Assuming you’ve managed to get to a certain size, you can probably as a business keep things ticking over. Odds are, your competitors are pretty large and mature corporations like yours, and you regularly exchange staff. So as a senior executive, it’s relatively straight-forward. Follow the trends, copy the competition. Re-brand.

But if you’ve got a power position as a senior exec, you start thinking of your own status. You could have a nicer car, a bigger house, more wealth, increased social status. You want a photo article in a trade magazine, you want a f*cking knighthood, you desire acceptance from the other societies – media, royalty, the best restaurants. It’s not enough to know Molly at the corner cafe, you want to get the best table at Gordon Ramsey’s place. It’s not even enough to be entertained at York races, it needs to be Royal Ascot. The incentives are there to be bigger, better, faster.

This is hard to achieve. Real, genuine, status improving change and improvement are really difficult – you can go a whole career without launching a product that creates that. So you look elsewhere – where can the growth of the corporation (and implicitly your status) be accelerated?

The execs look around, and realise that the problem isn’t the team, it’s the playing field. It’s restricted in size by rules and regulations, by borders.

Regulations are what other folk have put in place to ensure that everyone behaves themselves. I like this definition by Michael Hudson.

Regulation: From semantic roots meaning to rule. A ruler or government sets rules for the economy, creating a regulatory system that, in principle, is supposed to maximize welfare and prosperity. Every economy and society is regulated in one form or another. In practice, deregulation by government relinquishes the regulatory power to the financial and property sector – primarily finance in today’s world. Although this mode of regulation tends to be more centralized than public regulation, it has much narrower goals (rewarding rentiers, with the effect of polarizing society). Advocates of regulation of the economy by the FIRE sector call it deregulation.

You have to pay folk at least this much, and provide a pension, and pay tax (your staff and customers need hospitals, police, sewers, ports, roads, education for which the corporation is supposed to contribute). The regulations are there so you don’t upset other folk doing their business, and don’t hurt people, and don’t leave a stinking mess behind..

This is a bit of a pain for the corporate execs. All this stuff restricts your ability to make a name for yourself and improve your status. However, if they could only get the regulations changed or removed, then whole new ways of “demonstrating improved performance”, and hence, improving your status and rewards are available.

You can drive down wages, cut pensions, make your human capital work longer, harder, for less. It probably won’t help to innovate, but it’ll make what you already do look cheaper, which might improve turnover and profits in the short-term. that’s a serious win.

Or, maybe you could alter the regulations that state what quality and type of goods or services you could sell? – Bingo – new markets.

Or maybe you could then sell these into another country? Especially one that doesn’t have as much competition, especially if it doesn’t have as much regulation.

Or maybe, you could persuade a country to reduce the “tax burden” on the business, or failing that, shift the tax burden to another nation entirely.

In order to do any of this, you’d need to persuade the government of the absolute need to do this. You’d also need to get support from your industry regulator, your corporate financiers. This is hard work – but if you do it right it’s more likely to yield returns that blindly trying to develop stuff that people want.

And importantly, the long-view doesn’t matter. Achieve 4,5 quarters of record turnover, record profits, and then maybe capitalise on your credentials and get another role elsewhere. Boom – another step-change in wealth, income, status.

I reckon it’s worth a note here about the middlemen. These are the other corporates, desperately looking for new markets, new revenue streams. Chief among these would be your friendly auditors and bankers, happy enough to take a few quid for the advertised service, but realising that they’re in a privileged position, and with their own army of senior execs trying to improve their own status. And they’re just that little bit closer to the regulators, so there’s a real chance they can help swing it for you – for a fee. They become advisors, middlemen. They encourage the execs to bid for other corporations, which means you can double your status in one go, and boost your (and their) wealth in the process. And they pay the think-tanks and provide “studies” that demonstrate that this is what’s needed, and the press helpfully print it all, so the politicians have an easy ride.

For every goal, there’s an academic theory that fits – here various economists have obliged with important seeming analyses and interpretations that can be used to provide the infrastructure to legitimise the process. Free markets are better, barriers to entry are bad, the market can provide everything, efficiently, which is better for everyone. Conveniently here, they assume away the bits of economics mentioned above about how corporations tend not to work too well (for society) without regulation.

And as business becomes more complicated, then the regulators need to understand it better. So the corporate execs get jobs as regulators. But crucially, they’re still tainted by the culture that nurtured them as successful executives. They’re more sympathetic to the markets they’re supposed to regulate, they’re not considering the social impacts, the societal effects, the long-view.

And this is where we ended up. The regulations were re-written. The social contracts torn-up. Governments of professional politicians have fallen over themselves to flatter the “business leaders”, and draft the laws, and create the trade agreements, in order to give the corporate executives what they needed.

The regulatory bodies living at arm’s length from government, the watchdogs, the standard setters, the consumer protectors, have all been populated with the spawn of corporate hierarchies, and still have the same goals, the same shared learning and culture. They have ceased to question.

And so, the educators, the protectors, the governors, all fall in line with the corporate execs, there’s no thought for the society at large, there’s no consideration of the future. We need growth, profits, GDP, not at some distant time, but now. It doesn’t matter if nothing is achieved, if the “Product” of GDP is just a pot of debt accumulated by the folk of the land, if the tax-attracting wealth is off-shored, screw it.

That ugly beast we created, the corporation, has self-replicated, and thrown off the responsibilities of being a member of society, it has become a sprawling, confused monster, where the head doesn’t recognise the tail, where it cares not for the filth and destitution that it sees around it.

 

We created the monster – and we must understand that it’s not its own fault – it’s not necessarily the fault of “capitalism”. It’s a basic well understood and totally manageable flaw in the nature of (some) folk, and how the firm evolves. And the regulations were there as a muzzle on the bite of the monster. There’s no perfect system of managing and controlling our dealings with each other, this one’s as good as any, but only when the rules are in place. We haven’t changed the rules to allow folk to hurt and intimidate each other, but somehow we allowed the rules to be changed so that corporations can hurt us.

But corporations are just folk, mostly decent ones, trying to do stuff for other folk. Unfortunately corporations also serve as a vehicle for social status, and in that, they bring out the worst in some folk.

And I write this in the hope that some of you who read it might for once ignore the red team/ blue team split, and think twice about what we are as a species, and ask the politicians why we let the monster off the leash, why behaviour that would be unacceptable in the street is ok in the world of trade and business.

(ps – it seems to me that the more the folk in the savage head of the monster, the senior execs, ignore the mess around them, which is the lot of normal, well-balanced folk in the rump, then the monster will have to consume itself, or maybe that’s taking an analogy too far, which I’m very prone to do).

 

Further reading / viewing

http://www.theguardian.com/commentisfree/2014/apr/06/money-bought-elections-us-donation-rules

The Corporation – a video https://www.youtube.com/watch?v=Y888wVY5hzw

 

 

 

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Observations on the labour market

Given the preponderance of chatter about zero-hours contracts and other labour market issues in the media, I thought I’d catch up with some statistics free, anecdote and bias heavy commentary.

Recently in my ahem “professional capacity”, I’ve been doing a lot of recruiting.

I’ve read hundreds of cvs, covering all levels from school leavers to established directors. I’ve then met and interviewed around 40 different candidates. I realise that doesn’t make me an expert on anything, but there are definite patterns of corporate and individual behaviour that stand out, and I just want to take a few minutes to document them. Like I say, it’s a selectively biased sample (people out of work or looking for something better), but if exit-interviews are worthwhile, then this fulfils the same purpose.

First up – the jargon.

The labour market is just a collection of folk. The candidates were folk. The interviewers were folk. The ultimate reason that this blog is called “Folk Sermons” is absolutely because I figure half the problems we have stem from forgetting that we’re all just folk. 96% chimp, a relatively young species just working out how to get along. Economic and political and governmental systems are just frameworks, shaped by folk, and inhabited at every level by folk.

So let me tell you some observations about the folk I read about and met.

What have they been doing?

NHS – I reckon I came across 15-20 CVs from professional types (HR, Finance) who we’ve been working within what used to be the NHS. All of them were drifting from one 12/18 mth contract after another, between one CCG/PCT to another. Now, firstly, based on their CVs, not one of them would have got an interview to work with me. Lots of people can get the qualifications and letters after their name, but only a few are genuinely really good at their jobs. The HR ones were the best – how many re-organisations they’d achieved, how many contracts they’d re-negotiated etc. (Not one of them mentioned how they’d developed and trained people, or improved services or anything worthwhile).

Now, this ain’t the way to run anything successfully. A good organisation needs specialists like accountants and HR managers; a great organisation takes the best, develops them, and uses their skills to drive the organisation forward. This takes time. Short term contracts will only secure the functional aspects of these roles, hiring and firing, cost reporting etc; but the truly strategic improvements take much longer. In short, it depressed me how poor these organisations must be if they’re taking all these folk on to just get through the next year, and then doing the same again, or swapping them with the neighbouring PCT. I have some sympathies with the people in charge here – govt and top-down restructuring have created this short-termist, functional behaviour. Short term contracts mean fewer payoffs when the next re-organisation comes along. But I just wanted to point out how dumb it all is.

Care homes – I was genuinely surprised by the number of people who had been working in care homes that were desperate to get ANY other job. Feedback was, the hours were erratic, poorly paid, with no prospect of improving, and the job was rewarding but becoming more difficult / stressful. These people aren’t there to put bottles in boxes, or enter data onto systems, they are there to look after folk – the most vulnerable, confused, bored, folk in our communities, and the people who’re being paid to do it can’t survive themselves on the pay. Just totally dumb. And have you seen the fees these places charge!!?!?

Other industrial sectors.

The formerly successful local manufacturer (supplier to major UK retailer), who now just import stuff China, Vietnam etc and half the staff are looking for a way out.

Bookmakers – at least 8 applicants working at local bookmakers, all of whom hate their clientele.

Publicans – a lot of applications from ex-publicans. Makes sense I guess – running a successful pub seems like very hard work, with fewer punters and brewery control making it hard to make an enjoyable lifestyle out of it.

Ex-pats – a surprising no. of people who followed the rush to run their own small business in Spain or wherever, and end up returning and trying to get some income coming in from anywhere.

Other retail – loads of talented, capable, massively qualified people who can’t get the hours they need to establish a family, pay the bills etc, on minimum wage, zero-hour contracts. And yet about half end up being interim managers, regional trouble-shooters etc.

Debt management firms – which seem to follow a cycle of rapid growth, lost contracts, rapid shrinkage, and start again.

I’m avoiding touching on the sheer desperation of those who will work for free, apply for roles even though they live hundreds of miles away etc – I’m assuming they have to prove they are applying for things. It’s just a stupendous waste of my time, their time, and their job centre advisors time.

Comments

There’s a lot of work around that needs doing. There’s a lot of capable, dedicated folk happy to do that work. But many of those folk are being let down. Public and private sector organisations alike are generally really poor at providing work that sustains, supports and enables people to have a happy life. You can send me all the GDP graphs you like, and talk about output gaps, labour market flexibility etc, but those are just huge collections of numbers. I know that for every job we advertise, we’ll get 200 applicants – either unhappy, underpaid, or underworked. I know that short-termist corporate stupidity means that hugely capable, smart folk that understand what the organisation should do are left forgotten, underpaid and unvalued, in deference to a powerpoint slide demonstrating something to a venture capitalist, a minister, a banker.

If you ever watch “Undercover Boss”, you’ll know that they (short-termist corporate managers) know it too. How they’re touched by the human stories of their staff, which were unknown to them before. And they go back to the boardroom and the nodding heads, and thoughtful squints, and tell everyone they need to make it better. But giving Bert an extra week off, or giving Margaret and her disabled daughter skydiving lessons ain’t the answer.

The answer is folk need to stand up to their responsibilities individually and collectively. It would help if there were some visionary, long-term thinking in politics, business, the civil service etc. But that might take a while / never happen. But those folk are just folk like you and me, and if enough folk start to acknowledge the deficiencies of all organisations, and do what they can, when they can, to correct the problems and demand answers we might have a start.

How the Neo-liberal crisis hasn’t yet begun

The neo-liberal response to the post war settlement took it’s time to take shape amongst the masses. Thatcherism  brought the power of individualism, privatisation, and the knee-capping of the unions. Following on the pressure has been for governments to do away with regulation, and let markets “decide freely”; firstly in terms of corporations against each other, and then in terms of corporations vs the employee and the consumer. As a result, the nature of employment has shifted considerably,  with the jobs for life of 30 years ago replaced with short term contracts,  zero-hours deals, temping, uncertainty, assisted by the increase in under-employment.

Most of the coverage of this relates, rightly, to the impact on our living standards, in the here and now, and the impact on corporate efficiency. But it’s only part of the big lifetime picture.
Almost unremarked in this context at the same time there has been a shift in the nature of savings for the post-working age period of life. From the old staple – an employer provided defined benefit pension scheme,  where the employer took on all the risks,  to the modern approach of defined contribution schemes and stakeholder pensions.

Oh, and in the same period, the level of corporation tax has fallen from 52% to 23%.

So, in the 70’s your employer would (in many cases) provide a permanent, life long job, with a very good pension, and at the same time was paying a decent whack to the state to cover your other costs, and those for your family, and the infrastructure of society. When you retire, you’d also get your state pension, which should mean you could actually still function in society. Effectively the employer was saying – we buy your contribution for 45 years, and spread the pay over your whole life.

And now – if you’re under 50 the picture is somewhat different – well your job isn’t quite so permanent, your wages have dropped 15% in real terms in 5 years, and your defined contribution pension will be lucky to payout £4-£8k a year. At the same time, the state “hasn’t got the money” to pay you and everyone else a decent pension.

Meanwhile, small employers have (relatively) disappeared, increasingly replaced by large mega-corporations, who have dramatically increased the rewards to (very) senior managers; and at the same time taken umbrage at the corporation tax rules and channelled all their profits through complex relationships with Luxembourg and Ireland and Malta, leaving the amount even liable to the paltry 23% corporation tax to be much lower. So there’s less going into your own pension pot, and the promise isn’t there to pay any extra once you’ve done your last shift; and at the same time they’re saying, you know, we don’t owe you & the nation at large anything to cover the rest of your life.

Wow – stand back and consider that shift in thinking for a bit. That’s a huge change. What’s the impact? What’s the government planning? Because the effects will only be starting to trickle in now.

So far we’ve already seen that inequality is increasing. We’ve seen that infrastructure hasn’t been improved significantly – we’re still reliant on coal burning power stations, Victorian sewers, roads are full of pot-holes. There’s a dearth of affordable housing, causing increased poverty and uncertainty for the youngest and most vulnerable members of our society. In short, we’ve relied upon the forward planning of our predecessors, and done very little of our own. In terms of the new challenges we’ve faced – increasing populations, ageing populations, CLIMATE CHANGE, we’ve not really done anything big, societal, and forward thinking.

And let’s fast forward 10-15 years, when the generation who missed out on decent employer pensions (in the private sector) get too old to work, and then 10 years more to when the public sector staff who’ll miss out on decent employer pensions get too old to work – what’s it going to look like? They won’t actually be able to afford to fully retire. They’ll have to keep taking contracts, and trying to squirrel as much away as possible. Will the government tell them it’s their fault, and that they’re scroungers? I don’t know to what degree we’ll be hardened as a society by then to even look at the problem as a societal one. But the life choices for those individuals (Me! Me!) will be greatly reduced – they won’t have what their parents had in terms of regular income, unless things change fast.

I genuinely don’t think there’s nearly enough worrying about this going on. It’s going to hit, and hit large.

Now, I’m not necessarily saying that everything should be as it was – lots of people don’t mind not having a job for life, and defined benefit pension schemes only work if the organisation paying them never shrinks over time – many companies have hit the wall just from trying to keep paying  the people who retired 25 years ago – so it’s not right for everyone. But we do need solutions. And our governments don’t seem to know what a real long-term solution looks like.

That’s perhaps because the analysis of everything in economics and politics is so stupidly short-sighted. A successful economic system should be able to prove itself from birth to death and over again, many times. But the “winning post” for neo-liberal capitalism was set at the equivalent of about 5 years, measured enthusiastically every quarter. That’s not how to measure something as bloody important as the system that defines our opportunities, our lifestyles, and shapes what we do between the really important stuff. That’s madness.

Things we need to change

Ok – just a quick post I hope, which is boiled down from a series of half-written drafts and uncoordinated thinking, so please bear with me.

Any sane person ought to be aware by now that the model of capitalism / governance in the Western world is a bit broken. (You can read elsewhere for examples – I’m trying to be quick, but essentially we’re talking about tax avoidance, money-laundering, bribery, policy buying, …).

So what needs fixing? (This is UK based, but probably applies everywhere).

1) The beneficial structure of the Company is a privilege that is being abused. So many shell companies that have no employees and no trade exist, and have become the conduit for tax avoidance, money-laundering and other activities that serve no honest purpose. So let’s change that – a Company must have a defined purpose, real actual activity, and real people, residing in the UK as it’s Directors, who are legally responsible for their organisation.

2) The accountancy profession has sat on it’s hands since the onset of the financial crisis, and through sensible, prudent, lazy, incompetence, they have left us with a muddier picture of rules. We need to separate the predatory “advice” side from the regulatory audit side. This mostly refers to the Big 4 as they are known. Auditors can then be free to provide the service to the public that they were set up for. The accounting bodies then need to review and make fit for purpose the various standard setting bodies, who need to actually set some standards. (Follow @secret_ledger on twitter for some of the fun of that fair). Oh, and the auditors need to be properly policed and reviewed – all of the banking scandals of recent times should have been spotted by an auditor – so why weren’t they?

3) Banks / Money – essentially we need banks that serve the people, not serve themselves. My personal preference is to go down the route of removing from banks the ability to create money.

(see http://www.positivemoney.org/

Their proposed reforms in 6 steps:

1. Remove the banks’ power to create money
2. Return that power to a transparent and democratically accountable process
3. Create money free of debt
4. Create money in line with a democratically mandated target (such as a flexible inflation target, as is the case today)
5. Make sure that new money enters first into the real economy instead of through financial markets
6. Give individuals control and transparency over how their money is invested )

What’s left of the banking system after that should be lots of useful, regional service providers, just doing transactional stuff. They might then be able to get their IT up-to-date, instead of spending their brass on their croupiers.

4) Property – let’s restrict the “ownership” of property to UK resident individuals.

5) Politics – with a heavy heart I have to say that we must end the funding of political parties via donations from individuals and companies. Essentially, this system will always favour the wealthy. So the state will have to contribute. This contribution will be based on a £ per member basis; with a weighting – ie £10,000 max for start-ups. I don’t really like party politics, so I see this fix as purely temporary.

6) Governance – we need strictly enforced conflict-of-interest rules. It’s wrong that private sector organisations can write policies which will benefit themselves – but this is a bloody tricky one to enforce. Let’s start with “think-tanks” which must display their funding sources on all documents, and before all media appearances (in a racing-driver style). The rules regarding public and private interests for public officials are inadequate, so let’s put a bar on people voting on policies for which they have a vested financial interest.

Oh, and let’s scrap the House of Lords, and have an upper house based in part on the jury system (terms up to 13 weeks); with a small and restricted number of appointees by each political party (of any size), who will serve 2 year terms; and the remainder being regional representatives selected on a vote. Can’t be any worse than what we have already.

Ok there’s your starter – yes I realise it’s an imperfect list, but I can’t do it all on my own. Not in one go anyway. Please let me know what you think. What I’ve tried to do is go back to base principles, and say, hey, what we need is more folk taking responsibility for stuff. The rest of it – neo-liberalism vs socialism ; red vs blue; left vs right – it’s just window dressing – if we don’t fix the basic structures, we’re doomed to carry on this nonsense.

Fear Factor – Obstacles to full employment

Rick over at Flip Chart Fairy Tales did a piece this week, and it chimed in with a bit of thinking that I’d been doing and a few articles I’d read, and in a wakeful hour at 5am I came up with some ideas.

Economists like to think of employment in charts and statistics, which can tell you so much. Since I studied Economics at Uni (a few years back now), I’ve been busy working in a variety of businesses and seen a lot of cycles, trends etc.

How anyone can judge whether we’re are at full employment I don’t know. Jobs are created not by organisations but by people. Managers have to assess their staff, their workload, their budgets, and then make calls on recruitment.

But most managers are pretty rubbish at it. They are usually technical specialists with some people and management skills, promoted to management and doing their best. But the pressure is on. Organisations of all types must work to their budget. (That’s not always true, but that’s the line they’re fed). The budget is based on history and what they’ve been paying before. Very few managers understand how it fits into the organisation’s goals, how it is calculated, or even who did the workings. The manager’s boss is being judged on performance vs budget, and is sufficiently removed from the day-to-day that they don’t care about the details. If the manager is to ensure his medium-term survival in the organisation, they have to work to the budget, they have to save more than their predecessor, they have to demonstrate that they’re more aware of the financials than the manager of Dept B. They get swept up in meetings, presentations, and still have to do bits of the technical work in which they excelled. So they work extra hours – it’s expected, it’s the norm. And subordinates C,D,E follow suit. Everyone pulls together to get things done, everyone wants to look like they’re trying just as hard as everyone else. Everyone in the whole team is now working from a perspective of FEAR – and this travels vertically up and down the organisation.

What I’m saying is, most organisations get by with their current headcount because they’re cutting corners for financial ends, and deriving lots of free work from their staff. And this works because it’s the same in almost every work environment, and the fear of losing work is much greater than the perceived loss of an hour with the kids, or a walk round the park with the dog, cooking a nice meal, or taking Spanish lessons.

But every hour spent working is an hour lost to the rest of society. Someone, somewhere is having to cope with that loss – a partner getting stressed at the kids, the kids who don’t get a story and a cuddle, or a local school short of governors, an evening course teacher with no work as there are no pupils, a local butcher with unsold stock because you’re getting ready meals from the co-op on the way home.

Putting it another way, a heck of a lot of people are working extra hours for free, and this is keeping other people out of work. And this is a significant obstacle to full employment.

You might argue that this is key to keeping costs down, thus keeping prices down, it’s somehow efficient. It’s a global race, and we must remain competitive.

But competitiveness comes not from cheap labour alone. At the margins, perhaps, but all competitors are all doing the same things. There’s a dead simple Game theory modelling of this you could do, but the current situation is sub-optimal for all. Every organisation employing people would surely prefer to have more employees (more brains), working fewer hours – it’s surely more likely to deliver long-term success.

True organisational success comes from delivering really bloody well, or developing great products, it’s not achieved through fear and overwork.

Which comes back to one of the recurring themes of this blog – most of the faults with our economy and our society is this obsession with short-termism. Banks covering short-term losses with risky derivatives, business leaders pillaging massive bonuses on dangerous bets still on the table, politicians trying to save ten-bob now at the cost of developing smart, happy, well-adjusted kids, regulators capsizing themselves for a swizzy city-job, voters with nothing more in mind than todays papers. When short-termist thinking persists over long periods the result is a rudderless society, with idiots at the helm, and a small few selfish individuals who are happy at capturing god-like treasure booty, oblivious to the puddles forming around their feet.

Link to Rick’s piece https://flipchartfairytales.wordpress.com/2013/03/20/life-after-peak-employment/

Jumping Through Hoops – Corporate Efficiency

Remember this and every other government talking about cutting red-tape to business? We need to get business moving, remove the petty barriers. Agreed.

That’s my day job – doing stuff, getting things moving. I’m pretty lucky to finally be working for a company that tries to be good at that.

But the red-tape and barriers to doing business don’t just come from meddling councillors and stupid govt initiatives (plenty do), but more and more they come from momumentally stoopid large corporates, who while saying they want to be business partners, act like the worst kind of narky-parky from comics of yore.

Examples – we need a telephone line setting up for new premises, the order is done, the engineer goes to site, but the paperwork shows a wrong postcode. He can still do the job, he’s taken an hour to drive there, but checks with head office, who say he can’t do the job, he just needs to sit on his hands for a couple of hours. We get a call to tell us it has to be re-scheduled, but will take 4 weeks. Grraaahhh!!! The premises needs to be operational before that, but what can they do?!?!

Or the Utilities company who insist on copies of their own f**king bills to accept your application to go somewhere else for the electricity.

Or the IT company who provide a terrible service which is failing the terms of their contract, but choose to not improve on the basis that the legal costs of demonstrating it, and the time consumed, will put you off going legal.

Or the Water company who want to charge you £3000 a year for providing water to 2 flushing loos and a couple of sinks, 9-5.

And these are the big corporates stoking up the fees to retail customers, with the massive pay awards to Chief Execs, funding our politicians to support their every idea and pet project.

Don’t believe everything you hear from “business leaders”, cos’ half of those businesses are just as useless and intransigent as any local council officer.

 

Ahem. Thanks. [goes back to sorting things out].

A Childlike Awe

We know there’s something odd about the people who want to be politicians. Many of our political elite are professional politicians, it’s been the path they chose from school onwards. That’s sort of fine, except without extensive experience of other jobs, other folk, real life, many of their “beliefs” may be only based on what they’re told.

Our politicians are in awe of the people who appear to be successful, self-made individuals.

Lord Sugar, Stephen Green, John Nash are all individuals brought from other areas of success to help confused government ministers after a few meetings in exclusive bars assist and advise. Michael Gove’s mission to privatise schools seems to stem from Rupert Murdoch’s desire to have some.

Why are these individuals so revered?

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