Asking questions ... Doing things differently

In a recent Stephanomics blog, entitled 'Why them and not us?', a fellow blogger referred to Singapore, and Lee Kuan Yew, when he was Prime Minister of Singapore, describing 'their education institutions as producing highly "talented" but unquestioning "sheep", even amongst their PhDs !!

Since he, himself, and his wife are both empire Scholarship students to Cambridge, they were trained to question rather than meekly accept "perceived" wisdom. It was his questioning of the then status quo that led him to take Singapore from one of the most corrupt, totally resourceless (except for its people) little island nation into one of the "Tiger" economies of Asia and a prominent player on the world stage.

On the way, he challenged to twin "holiest of beliefs" that "bureaucracy had to be corrupt and bloated" in order to work !! Singapore now has a lean and mean bureaucracy that is uncorrupted (or else :-)) and that is also one of the most efficient in the world !!

The greatest tool of any "thinking" person is to test the truth of anything and not accept on blind faith !! All else is merely liturgy and regurgitation of teachings !! ...'

IMHO this comment provided a unique ray of sunshine (amongst the dark & heavy clouds of confusion), so I decided to respond to it by adding ... 'a great post, highlighting the success created by those nations who question and challenge the status quo, as well as the actions of bloated, centralised and corrupt 'command and control' government.

Your post points out how Lean government is the future and it also shows how successful nations are already going down this path. I spoke to the Singapore Minister for Information a few years ago about this, and he re-enforced their strategy to embrace modern technology in order to connect with their people and to help them go down this path.

The only thing I would challenge in your article is your statement 'lean and mean' ... as whilst they are arguably starting to apply 'lean', 'lean' is not 'mean' (except to those leaders/managers who want to stay well away from the front line and prefer to tell people what to do, instead of going to the front line, asking questions and helping them to improve the way things work). 'Lean and mean' may be a catchy catch phrase used by the media, but a true 'lean philsophy' is actually quite the reverse (hence the reason for the first chapter of my book 'what is lean?') ... as it's all about people, value and values, and bringing about a continuous improvement process that involves everyone, where leaders and managers support people and help people in the process of continuously improving how value is provided (cf not trusting them and telling them what to do), founded on fundamental values such as trust, honor, responsibility and respect.

Singapore is starting to do this, and at the prestigious ITU Telecom World conference in Hong Kong back in 2006, the head of strategy of the ITU agreed it was a great idea but pointed out that he couldn't see it happening in the UK. With the mindset, corruption, and misuse of power shown by the UK government he was definitely right, and until this changes in the UK we are heading for the scrap heap*, and will look in awe and wonder at the success other nations will achieve. Traditional economics is dead and traditional politics is about to die (i.e. Poweromics). In successful nations of the future a new form of politics (Lean government) and economics (Leanomics) is already starting to emerge, based on a robust set of values, including trust, honor, responsibility and respect (http://poweromics.blogspot.com/2009/06/leanomics-v-poweromics-ignoromics_01.html) ... just as Dr W. Edwards Deming predicted over 20 years ago.

Whilst some nations prefer to ignore it, others are starting to talk about it, and some are already doing it ... and guess which one of these applies to the UK?

David Clift

Author of 'Lean World' and a Future 500 Leader

* none of the current parties/leaders are likely to do this either - take a look at http://renegadeeconomist.com/blog/big-questions-hot-handle.html and my subsequent post to see why.'

'Recession' and 'Depression'

Official figures confirmed last week that the UK economy 'contracted' once again - pointing to the fact that the country is still in recession - and it's the first time that UK Gross Domestic Product (the total amount of goods and services produced by a country) has contracted for six consecutive quarters (ever since quarterly figures began to be recorded in 1955). The pound fell further after the figures were released, reflecting the fact that many investors had expected the UK economy to 'grow' slightly in the last quarter, which would have technically taken the UK 'out of recession'.

Despite 'printing money' and generating a 'great deal of spin', the UK is one of the few G20 countries still to technically come 'out of recession' (e.g. France and Germany came out of recession six months ago). Potential investors have seen the effective devaluation of the UK's currency (through the £150bn Quantitative Easing programme), but they are also now able to see through the 'spin', and to see the fundamental weaknesses within the UK economy.

The 'stock market recovery' and 'housing recovery' are all part of the 'spin'/'scam' to artificially raise confidence, as 'assets' such as these 'appear to rise' because the 'value of every pound has been reduced'! As highlighted previously, as the pound slides against foreign currencies (nb the UK pound has already lost nearly 30% of its value against currencies such as the euro), the price of imported goods entering the UK will rise (e.g. including oil & gas), pushing up prices and affecting people's purchasing power further. High unemployment may hold back 'wage inflation', but it will not stop 'import price inflation' or people becoming 'progressively worse off'.

As import prices rise, unemployment grows, taxes increase and massive cutbacks are introduced (to pay back spiraling Government debt), the UK will start to feel the real impact of this Government's failure, their lack of prudence, their self-interest (e.g. MP's expenses) and their support of greed (e.g. diverting tax payers money to bail out banks and effectively paying for their excessive bonuses, rather than fixing the problem and helping hard-working people/businesses) - all of which will negatively impact the overall well-being of our nation for generations to come.

Gordon Brown is telling us we will come out of recession by the next quarter, but as many analysts have pointed out, this will mainly be because of a rush of purchases taking place before the Government puts VAT back up to 17.5% at the end of the year! The timing of this change, alongside the delay in addressing spiraling Government debt, are clearly linked to Gordon's own personal agenda/self-interest and demonstrates a cynical 'misuse of power' ... as he wants to say 'he was the one who brought the UK out of recession' (just before the election), as well as to 'blame others' for it all going wrong afterwards! (e.g. see my previous post on the double-dip recession) ... which shows the sheer hypocrisy of a man who is happy to preach to us about 'values' and 'prudence', despite demonstrating neither of these qualities himself.

In the 21st century, GDP is not a true indicator of a nation's 'economic success' either. The use of the word 'recovery' whilst everyone is effectively becoming worse off, and more and more people are losing their jobs, is arguably perverse too. Such outcomes not only result in 'recession', they also create 'depression'. More holistic measures are needed to assess the overall well-being of a nation (e.g. take a look at the 'BUTS' test for instance) and as the overall situation continues to gets worse, ignorance will reduce, depression will grow and anger will increase (e.g. towards the bankers who are once again 'pocketing' billions in bonuses, whilst everyone else pays for it through increased taxes, and and through more and more people losing their jobs).

Traditional economics is dead, and a new economics & politics is about to emerge (powered by the internet) ... focused on community contentment, the well-being of people, and the ability to create real value for others (founded upon fundamental values such as trust, honor, responsibility, respect) ... instead of focusing on wealth manipulation, based on poor moral values, self-interest and greed (e.g. fueled by envy, celebrity and the media).

The battle of the future is one that transcends nations, and is a battle of values:

Leanomics vs Poweromics & Ignoromics

... where values (and value creation) once again return to challenge poor moral values, self-interest & greed (and wealth manipulation)

Nations that fail to change will fail to survive ... and with the advent of modern communication people now have far more 'information', 'choice', and 'power' ... they just haven't realised, or exercised, it yet ... but they will ... and as Ignoromics reduces Poweromics will be challenged, in many different ways ...

Education - flawed 'policies' failing our nation

The authors of an influential review (the 'Cambridge Primary Review') have today called for SATS tests to be abandoned ... saying their high-stakes nature, linked to league tables, encourages a too-narrow focus on literacy and numeracy.

Professor Robin Alexander said 'We don't think Sats are fit for purpose' ... instead, children should be assessed on a broad range of subjects throughout primary school and at its end, but these assessments should be used to monitor children's progress rather than hold teachers accountable.

This fundamentally challenges Government policy over the last 10 years, and follows on from a damning statement yesterday from Sir Terry Leahy, chief executive of Tesco (at the Institute of Grocery Distribution's annual conference). Tesco has grown from humble beginnings into a global success, by focusing on what customers want and providing them value & choice ... it also just happens to be the largest private employer in the UK.

Sir Terry Leahy said 'we depend on high standards in our schools ... but sadly, despite all the money that has been spent, standards are still woefully low in too many schools'. He went on to say ... 'from my perspective there are too many agencies and bodies, often issuing reams of instructions to teachers, who then get distracted from the task at hand: teaching children'.

Sir Terry Leahy knows all about providing value and 21st century management practice (see P180-188 of my book for instance), and the UK needs to take note of his observations. Sir Terry knows only too well that to succeed in the modern world 21st century leaders and managers need to understand and get close to the work ... focusing on helping & supporting front line line staff to continuously improve the service provided (and to find innovate new ways of providing new services/better outcomes too). They do not sit in plush offices, remote from the real work, issuing an ever increasing number of dsyfunctional policies/instructions and dreaming up additional performance targets for front line staff to meet, or creating more new initiatives in response to latest news headlines (or to create news)!

One creates value, prosperity and growth ... the other generates waste, frustration and failure ... 'waste of time jobs' systematically generating 'poorer outcomes' and 'excessive amounts of waste, inefficiency and frustration everywhere else' ... and when it comes to education, there is arguably few things more important to the long term well-being of our community and the overall success of our nation ... hence the importance of the statements made above, as well as those within my own blog too (e.g. 1,2,3) ... and if you want to understand the challenges ahead and to see how far off current education policies are in preparing children for the future take a look at this too.

Referred to on Mark Easton's blog (post 43).

House prices - An obsession with failure

Stephanie Flanders recently commented on the Nationwide saying house prices are the same as they were a year ago (i.e. no longer dropping), but asked if this is 'too good to be true' ... take a look at a few of the key issues raised below for instance:

"... house prices are rising in a market where very few properties are changing hands. As the Nationwide points out in today's report, the housing turnover rate - the percentage of the private sector housing stock changing hands on an annualised basis - is still only 4%. That's not much higher than it was at the end of last year, when literally no-one in the market wanted to do anything. Before the crash, turnover was 7-8% ...

... you might expect prices to carry on falling in a market with such little activity - because usually low turnover reflects the fact that everyone expects prices to fall. But the relationship breaks down if there's only a tiny number of houses up for sale. That seems to have been true for most of this year and it's still true ...

... if prices stagnate, or fall further, there'll be plenty who worry about the knock-on effects for confidence and the economic recovery. But it would be good news for young people who are otherwise bearing the brunt of this economic bust ...

... from an economic standpoint, the rise in house prices since the early 1990s has been a massive transfer of wealth from young wannabe home-owners to the older generations who bought when the going was good. It's worked like a tax on young people -and a windfall to large numbers of the middle-aged and old ...

... One way or another - whether through higher lifetime taxes or unemployment at a crucial time in the career - young people are going to be paying for this crisis for a long time to come. It would be no bad thing if they could at least come out of it able to afford a home".

To which I added the comments below:

A good article ... I've haven't read this blog for a while (partly due to poor journalism and partly due to blog spamming from a small minority) ... but having done so today it's good to see the quality of journalism appears to be improving slightly ... IMHO for economic recovery to resume in a sustainable way we need the folly/obsession with house prices to stop, we need to introduce a 'land value tax' into the economic system and challenge planning regulations / restrictions imposed to serve the interests of just a few (i.e. the landowners - e.g. Duke of Westminster et al).

More houses will then be built and young people will then be able to afford a roof over their head, without having to give most of their hard-earned money away each month to bankers in the way of interest. Some of revenues raised from a land value tax could also be re-invested into real value adding activities that create jobs and wealth (instead of manipulating wealth) which would create a more sustainable economy and reduce our debts, balance of payments and trade deficits.

A few areas your report does not refer to however are when interest rates start to rise again from their historic low (e.g. due to inflation from import costs rising with the increasing demise of the pound), continued job losses (and the impact/cost of this to the taxpayer and public debt), as well as lack of opportunities available to young people and the debt we are asking them to take on to go to University.

They will not forgive us, or the leaders who forced this upon them. We must also remember that hard-working people can choose where to live (ie. work and pay their taxes) and can move freely in the EU now too, and as more of them leave the tax burden placed on those remaining will start to spiral upward until they also decide to leave too ... the outcomes are entirely predictable, but an effective intervention strategy from this Government to deal with the problems we face is not.

A bankrupt system and a vacuum of ideology

Robert Peston seems to be doing a much better job than Stephanie Flanders (BBC economics editor) and Nick Robinson (BBC political editor) these days, as he explained in his recent blog ... where we are, the people responsible, the dilemmas they now have and the vacuum of ideology that exists ... e.g. take a look a few key points below for instance:

"... it is by no means a trivial political event that Gordon Brown should make an explicit attack on what he called a 'bankrupt ideology' that 'markets always self-correct but never self-destruct' ... a somewhat delayed reaction to that recent spot of bother for banks ...

... but this wasn't just any old failure of markets. It was a system breakdown that has prompted a theological crisis for most mainstream economists and an existential crisis for those whom we trusted to deliver financial and economic stabiltity, viz regulators, central bankers and finance ministers ...

... and for politicians ... such as Gordon Brown ... there's something of an ideological crisis .... It's all very well to say, as he did, that 'what failed was the right wing fundamentalism that says you just leave everything to the market and says that free markets should not just be free but values-free' ...

... but for years his government was seduced by this so-called fundamentalism ... and if Brown no longer trusts markets for the efficient allocation of precious resources and the optimal pricing of goods and services, what does he trust? ...

... if markets are no longer the best guarantor that resources won't be wasted in commerce or public service, what is the new insurance policy of optimal resource distribution? ...

... it's all very well to ditch a faith, if it can't be sustained by the facts. But I suspect that voters will want to know what will fill the vacuum ... and although bashing bankers' bonuses may resonate with many, it's not really a comprehensive industrial or economic policy."

To which I added the following comments below:

... "Wise words Mr Peston - perhaps you should be political editor and economics editor too.

* Traditional economics is dead.

* Traditional politics is dead.

* Traditional enterprises are dead.

* Traditional nations will also die, unless they change the above very quickly.

Can Brown fix it .... No - he exacerbated the problem in his 10 years as Chancellor*

Can the Tories fix it .... No - they haven't got a clue, and if they did they wouldn't do it anyway.

Vacuum - there is ... at present ... but as ignorance reduces and things get much worse (which they will again soon - as nothing has been done to address the above issues) the 'battle' of the future will begin - a 'battle of values' that transcends nations (take a here for instance) ... and successful nations will emerge out of the crisis powered by a new form of leadership, economics and politics (which was predicted over 20 years ago but is just starting to come to the fore now) ...

History tells us change things will, and with modern 21st century technology, change will happen in many different ways ... but history also tells us the UK is unlikely to one of the successful nations ... unless it responds right now and it does not falter in this goal.

David Clift, A Future 500 Leader

* Brown was responsible for introducing the 'targets culture' and for driving in highly wasteful 19th century management practices, as well as focusing on a flawed economic strategy which was over reliant on the city, fueling it by overseeing the removal of the constraints that kept commercial & investment banking separate (brought in after the last great depression!), then bailing out the banks with our money without fixing the fundamental problem (and a problem he himself had previously helped to create) ...