Double Dip - Double Quick ?

Following on from my previous posts (1,2 for instance), take a look at these recent reality checks from other groups today ... about what we may see in the future too.

Recovery - House prices rising ...? irrelevant ...? a false dawn ? ... and the TUC rejecting claims of recovery too, suggesting we could see a "double dip, double quick" ... with unemployment escalating to 4,000,000 (not 3,000,000) ...

... and there is nothing to say this won't happen, or in fact for it to get much worse than this, unless the Government starts to invest effectively in innovation, creativity and enterprise that can add real-value in far more effective/sustainable ways (e.g. not gambling, investment banking, and property speculation), which can also support public services, as many of my additional posts (e.g.1,2) have also pointed out (including the one below) ...

"... 21st century management practices double the value-adding capability and halve costs both at the same time - but because it's 'lean' in terms of management (and 180 degrees different to traditional management!), most 'leaders'/'managers' either fail to understand it or choose to ignore it, and prefer to stick to what they know* ... most 'leaders' and 'managers' don't mind change, so long as it doesn't change how they lead and manage ... but unfortunately that's what's now needed ... don't expect to see it in a hurry ... but you'll see successful nations/enterprises doing it ... Sir Gus O'Donnell (head of the Civil Service) has known this for years, but has failed to do anything about it ..."

Posted on Stephanomics blog (post 31).

Poweromics at "work" in "Business"

Poweromics and out of date management practices continue to ruin another British company ...  I know because I used to work there ... and friends say it's got much worse ... with around 15,000 jobs losses each year ... could this be different ... absolutely ...

'Lean' is about 'people', engaged and supporting the 'natural creativity' & 'development' of people' (Leanomics), not 'sacking them' ... but the 'new management' team (made up of mostly finance 'experts' I'm afraid) just want to focus on head-count reductions and to sack people to meet their targets and get their individual bonuses (Poweromics) ... rather than foster a more innovate environment, create more value for customers and increase the market value of the group ... sound familiar?  

Few companies increase their market value by simply cutting costs (e.g. see chapter 1 of my book!) ... they have to innovate ...  perhaps they'll decide to pay staff to innovate and improve things next ... good idea ? ... you might like to read this first ...

Take a look at Robert Peston's blog "BT - Self Inflicted Wounds" and my comment on it below ... why not take a look at other comments made about BT at the bottom of the news article too ...

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Comment 42 (leanomist)

Poweromics* and out of date management practices are systematically destroying BT ... I know because I used to work there ... and many friends/colleagues say it's got much worse since ... 

Few companies increase their market value by simply cutting costs (e.g. as the first chapter of my book pointed out) ... 

and all the ex finance directors now running BT are out of date in the type of practices they need to use - it's not about cost accounting or simple head-count reduction ... its about innovation and continuous improvement, as well as applying 'lean accounting', 'value management' and 21st Century management practices.

Are they applying these - unfortunately not - and until they do self-inflicted wounds will only continue...

David Clift, a Future 500 Leader


* Poweromics = People use position and power for their own personal gain, based on poor moral values, self interest and greed.

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Comment 98 (M_James_Eden)

There are quite a few problems with BT's leadership, in recent years the leadership has seen the way forward as imported generic managerialists who "see the big picture", do management by numbers and provide generic "value add", but unfortunatley these people seldom have a tacit understanding of the technical and operational needs of a telecoms company. Add in a number of identikit axe wielding accountants in senior positions and you have a leadership that isn't terribly engaged with day to day concerns. The worst aspect of all this is possibly that those moving up the chain internally see managerialism as the way forward rather than robust skill and expertise.

The City has a role to play in this too, it fell in love with "empty suit" managerialistm, probably in no little part because it has the same rotten leadership culture. BT has too many layers of bureaucracy, too many senior managerialists who are "just too busy" to understand the bread and butter of the business. The structure could (and in any sensible world would) be flattened, but starting at the top, beacuase from a cost cutting perspective it's the senior layers of managerialists who actually represent the most expensive flab. Canning a chunk of the senior mangerialists won't impact the customer, it would mean relatively few job losses and it would save a lot of money. They add little beyond politicking and blue sky day dreaming, but managerialists will never lead a cull of their own kind.

I'd also take the claims about protecting BT staff over agency and contract workers with a big pinch of salt, there's still plenty of offshoring being done, with internal BT employees being replaced by Indian contractors who appear superficially cheaper. However, there is a bit of a false economy, because by getting rid of those who have technical or operational knowledge onshore it takes longer to get things developed. It's just a general symptom of the managerialist rot, it looks like progress is being made in the short-term, but the disruption to those who actually know what is going on and who actually deliver the work sets the overall group back.

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