I must say I am getting numb to this whole drip, drip series of revelations. Perhaps the Telegraph should bite the bullet and produce a Government-style 'League Table' of MP Expenses rating the most criminal at the top, down to the likes of Hilary Benn at the bottom who only claimed £140 in an entire year. At least they are all then put out of their misery.
It is the calls for reform which now intrigue me. Only when the rotten business is exposed did the very people who have been systematically abusing it suddenly take a 'righteous pill' and start harping on about how it should be changed and that it was not right. Hazel Blears takes the biscuit saying that she knew we all hated it. It makes you wonder what kind of morals they had to have knowingly abused a system they knew was wrong. Aren't MPs supposed to make moral stands on issues?
Ah, I see. That was the old days - now it's all nod at the leaders' orders however daft or deadly they may be and keep filling your pockets.
Politics A Metaphor For Business?
It does remind me about how businesses go from one reporting cycle to another, systematically going up the wrong alley, losing money or market share and then suddenly having to do a public report. At this point they realise that the outside world will know how badly the business was doing and so they 'on the back of a fag packet' make a load of cuts or 'strategic changes' in order to make it look as though they are now doing something about it.
As if this announcement of recognition of their bad performance and the changes they recommend are in fact indications of sound management.
Rather like it taking a public airing to galvanise MPS into realising that they have been stealing money off us, companies seem to manage by reporting cycles. Only when they have to publicly show their figures do they actually do anything about it. Again, like MPs, the feeling internally is that by showing it they realise the last however many months or years have been wrong, and that they are actually both paragons of virtue and super businessmen for doing so.
Managing By Planning
One of the reasons that many companies have 'Hit The Wall' in this recession is that they manage by reporting cycles. It's as if the process of airing their performance that they have an epiphany about how bad it is. Inevitably, it means they resort to the only tools available to fix problems and start to make cuts. Few companies seem to be able to manage their business by constantly going through the normal planning process, doing reviews of performance and prospects rigorously and regularly and making the important changes as they move along.
Much of it is wishful thinking, much of it is habit. Most of it is just bad management. In many cases, even they know something is wrong, just like MPs, they carry on doing it because the clock has not yet struck reporting time. The imperative to action has not arrived.
Planning is a useful process whether you are doing well or badly. In fact, people love to plan when the figures look good. They don't concentrate on the bad things just keep the good things going. A bit like the whole banking collapse - everyone seems to have known there were systemic problems yet they carried on milking the system until it profoundly broke. Then we get some fantastic analysis of why it all happened by the guy who was meant to have stopped it - Lord Adair Turner. It is seen as good management that he can have 'virtually have predicted' the problems in hindsight (you have think that phrase through) yet did not see it or chose not to as the whole system blundered into a blind alley, with its vision covered in greed.
But many other businesses have also done the same. Not reading the warning signs about slowdowns and recessions and then taking a look at their own business and its dependencies, has meant that so many 'good businesses' have been decimated or gone bust. It has exposed slim business models, over-dependence on gearing, lack of diversification in customer bases, over-reliance on specific customers - the whole gamut.
Just this week we hear that Corus is shutting down its steel making plants on Teesside as a single contract, which accounted for 80% of its production, has been rescinded. And that management, and Unions, bleat that it was the consortium's fault as they were contractually bound to take the steel.
Hello! There is a recession on. If the consortium can't use it then they cannot buy it.
It's this kind of lack of planning that has allowed Corus to cruise into a dead end and do the only thing it thinks it should which is mothball the plants and lay off the workers. Everyone knows the cost of re-opening a plant like that, so any upswing in demand would have to be huge to get Teesside making steel again.
We could go on endlessly but Corus is good example of a business that just got reliant on the status quo and there was not a single manager in there who maybe a year or two years ago thought, 'We are horribly over-dependent on one contract - what happens if that contract goes wrong and they require less steel or none at all? Perhaps we had better find some other customers, just in case.'
Planning For Failure
If you actually plan regularly, you can slot in 'what ifs' like customer or market failures and see how that might affect your business. Many managers have moaned over the years that understanding their business is dependent on these sophisticated data management tools and dashboards - yet those businesses who have spent a fortune on such systems still fail. Mainly because business is about the obvious and the pragmatic things. Like looking at each sales forecast and questioning every deal - like looking at how many customers constitute 80% of your business or more. Reading the warning signs are easy if that's what you are looking for.
Most managers seem blunder through data - presenting it and re-presenting it in many different ways to prove points they want to make. But few seem to grasp the real meaning of what they are looking at and what they should do about it. Only at reporting time, when the only figures that really matter are presented, does reality hit like a wet kipper in the face.
I have blogged many times on planning and re-budgeting as a daily management process. Companies who have been hit badly should take heed. The MPs who abused their own system should do too.
Waiting for public airings is not the way to manage a business or govern a country.
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