31 08 2011

The recent furore surrounding the awarding of the Thameslink contract to Siemens ahead of Bombardier and its resultant negative impact on the East Midlands’ economy (in particular that of Derby) has raised many questions of Government’s handling of the issue.

Most of these questions have centred on single issues ranging from the limitations of EU law on the procurement process to the loss of jobs at Bombardier and even the value (or otherwise) of government not losing face.

But what no one has asked (or not that we have seen) is what might have been the effect of a good strategist taking a look at the issue before it became an issue…..

It’s a complex issue, one I admit to having simplified for the purpose of demonstration and of keeping this blog relatively brief. Complex or not, it is an issue that should never have arisen.

I can imagine the non-strategists way of approaching the design of the tender brief for the Thameslink contract; “what we need is the company that offers best value against the published  criteria.”

It sounds sensible. I mean, why on earth would you say; “let’s award the contract to a bid which will cost us more”?

Yet, by failing to consider the bigger picture in the way a good strategist would, that is exactly what the government has done. The word ‘value’ has been applied very narrowly and so when the Department for Transport stated; “The evaluation concluded that the Siemens bid offered best value for the taxpayer and for passengers,” what they really meant was that in terms of the cost of the project it offered the best value.

But what should ‘value’ mean to the taxpayer? What are the possible negative effects of awarding the contract to Siemens?

The one that has made the biggest headlines is the shedding of jobs by Bombardier in Derby. Overlooked though has been Siemens statement that winning the contract will mean they will be creating new jobs. Will one cancel the other out?

Not even closely. Siemens own estimate is that winning the contract will lead to the creation of 300 new jobs in the UK. Meanwhile, as a result of losing the tender, Bombardier has already issued 1400 staff with redundancy notices.

That hardly balances the books and, big picture; it’s a lot worse than that. Estimates suggest that suppliers and related companies will shed, conservatively, at least the same number of jobs as a result of lost business. That is 2800 jobs lost to 300 gained. Value?

But that isn’t the big picture. We still need to factor in the loss to the local economy of 2800 people (and their families) tightening their belts and spending less (at a time the government wants us to spend more to boost the weak economy). We also need to factor in the increase in benefit payments that will be made from the public purse to those affected.

And we still haven’t arrived at the big picture a good strategist would have looked at from the outset. Depressed areas often struggle with social issues, children from depressed areas have been shown to struggle more educationally, health and well-being are generally poorer in depressed areas and without outside stimulus such areas often struggle to regenerate. All of these have cost implications for the taxpayer.

Not taking the big picture into account from the outset will leave families struggling, local economies nose diving and the taxpayer forking out far more than will be saved by the awarding of the contract to Siemens. Value?

Even ignoring the high cost of those social aspects, it is likely the axed jobs at Bombardier alone will result in at least £20 million in lost tax revenue and added benefits (Manchester University).

The more you consider the ‘issue’ of awarding a contract for the Thameslink programme, the more you realise it is far more than that single issue. As with almost everything consideration must be (or should have been) given to cause and effect, to the big picture. It is simply not possible to divorce single issues and hope they can be dealt with in isolation. Good strategists know this.

Of course, it is easy for me to be critical; I have the benefit of hindsight. But honestly, look at everything covered above and ask yourself; “were these issues really that difficult to predict?”

Now we are where we are. A mistake has been made. What does the good strategist do when recognising a mistake was made in the planning process (because mistakes do get made)? The strategist looks again at the issue and asks, “how do we put this right, how do we address the big picture so that we have our project back on track?”

You might think (as would I) the sensible thing to do would be to take a step back and put the awarding of the contract for Thameslink on hold. You might think (as would I) that now the bigger picture is clear for all to see a reappraisal would be very high on the government’s list of priorities.

Sadly not; strategic thinking remains conspicuous by its absence. Transport Secretary Philip Hammond claims that the process cannot now be reversed. Yet top legal minds such as European business law expert Chris Bovis (Hull University) say this is not so. Bovis says; “‘in theory, and in practice, the ­Government can abort the contract at any stage. The consequences could be serious or less serious depending how much contractually it is committed. The Government would be liable to compensate the firm for abortive costs, such as money incurred during bidding.

Cable; saving face

Perhaps the real reason for not reconsidering was that stated by Business Secretary Vince Cable when he said such a move would “cause significant damage to the Government’s reputation.

However, there is the hint of a small light at the end of this (railway) tunnel with the government’s announcement that it is to delay the awarding of contracts on the Crossrail programme by six months, a move that will allow a review of its public procurement process to be taken into account.

But what of the strategy? What of planning to cover the big picture? There was and is little sign of (good) strategic leadership in addressing the Thameslink fiasco and although we can hope for better on the Crossrail project, with the same people considering the matter, with the same single issue mentality unlikely to be replaced by strategic, big picture thinking, we should not hold our breath while waiting.

And what of you and your business; what is the lesson you can take from this?

It is simply this, in business as in politics there is rarely, if ever, a challenge which is wholly single issue. Remember that once you apply some common sense, big picture strategic thinking the implications of your actions (cause and effect) can usually be predicted and should therefore be planned for properly from the outset.

Plan properly now or take the pain later.

© Jim Cowan, Cowan Global Limited, August 2011

Twitter @cowanglobal


18 08 2011

It is a disease which has gripped the United States for a couple of decades; a disease which is starting to creep its way across Britain and  Europe. This disease disguises itself as your friend before leaving you high  and dry and wondering where it all went wrong.

What is this disease and why haven’t you heard about it before?

You have, but because it disguises itself as your friend you failed to  recognise it for what it is.

I’m talking about the current endemic  for motivation as some kind of magic elixir.

You can spend thousands on it,  believing that with the right motivation you are but a step away from success.  There are motivational speakers, motivational books, motivational screen  savers, motivational….everything. It seems you can’t turn around without someone offering to motivate you, usually for a fee (the industry is worth  £Billions) but not always. For crying out loud I even have friends on Facebook  who seem to do little more than trot out motivational quotes (often out of  context) all day long!

Thank God there are some who see this  craze for motivation as the nonsense it is.

Devey; a voice of sanity

In the most recent episode of BBC2’s  Dragon’s Den a clearly highly motivated entrepreneur was obviously missing one  or two basic business essentials (such as understanding what ‘gross profit  margin’ means) but felt that frequently repeating how motivated she was would plug the obvious (to the audience) gaps. Sanity was needed and new Dragon Hilary Devey provided it in five simple but sensible words of advice; “passion does not generate profit.”

Of course, to succeed in business, as  in anything in life, you need to be sufficiently motivated, passionate about your dream. But, what none of the hundreds of motivational speakers out there  will tell you as they take your hard-earned cash is that on its own that is not  enough.

We’ve been here before with far more  serious consequences, for what we are now witnessing in business we saw nearly  a hundred years ago on the battlefields of Europe.

Back then, in the Great War, hundreds  of thousands of young men lost their lives because they were sufficiently  motivated to go ‘over the top’ for one more push. They were passionate in their  belief that the desire for success, if strong enough, would be all they needed as they charged at another machine gun nest.

In 1917 the Battle of Passchendaele  lasted for three months, cost 70,000 lives, a further 250,000 wounded and gained the allies a paltry five miles of ground.

Lest we forget

There was no lack of motivation at Passchendaele, no lack of passion. What was lacking was strategic leadership. Our current day motivational messengers often include Winston Churchill’s words  among the quotes they push as the route to success. Perhaps they should bear in mind Churchill’s words after Passchendaele; “a forlorn expenditure of valour and life without equal in futility.”

In 1917 the generals finally woke up  and realised that without the right planning, without the strategy providing informed, intelligent direction for the motivation and the passion for their brave troops, the horrendous loss of highly motivated life would continue. That motivation and passion was crying out for strategic leadership to give it direction. It took Verdun, Somme, Passchendaele and many, many other inglorious  battles for the penny to drop but, in the end, it did.

Fast forward to 2011; what is your  informed, intelligent, planned strategic direction? What is the vision that provides your destination? What is the route map to take you to your destination?

If you don’t know, no amount of motivational speaking, books, screen savers or Facebook friends will help, all they will do is motivate you all the way to disaster.

On the other hand, if you do know where your business is going and how it is going to get there that alone should be sufficient motivation. If it’s not, you’re in the wrong business.

So, before you spend any more cash on that motivational guru, it might be wise to instead invest some of your money with a strategy expert. You know where we are!

© Jim Cowan, Cowan Global Limited, August 2011

Twitter @cowanglobal


12 08 2011

Photo: The Guardian

Regular readers of this blog will know that I often question the poor quality strategy which emanates from our elected  representatives both nationally and at a local level.

The recent riots and their aftermath and the ongoing debate ‘to cut or not to cut’ police budgets highlight the issue like no other and on a number of levels.

Let’s start on a positive note; the police response to the criminal behaviour on our streets has been fantastic and I am not alone in being extremely grateful to the brave men and women who have restored order.

How that order was restored was a triumph of good strategy. That might sound strange because in normal circumstances responding as our police did, within a very short time frame, might usually be seen as tactical rather than strategic. Let me explain why it was not.

Under normal circumstances it is usual to define a vision and develop a strategy to go after and achieve that vision. Short term actions, although an integral part of that strategy, tend to be termed ‘tactics.’ Although we think of this as ‘strategy’, it is, in fact, only one type of strategy albeit by far the most common. It is referred to as ‘Vision Based Strategy.’

In troubled times whether corporate issues, injuries in sport or rioting on our streets, the vision based strategy becomes redundant, if only for a while, as the immediate need trumps the long-term aim. When this happens a different type of strategy is demanded; the ‘Issue Based Strategy.’

I will go into more depth on the application of these two variations on strategy in a future blog but for now think of them like this:

  • In vision based strategy you decide on a destination and plan backwards to where you are currently to design your route to it. Vision based strategy tends to be for the medium to long-term.
  • In issue based strategy you identify an immediate or imminent threat or problem and plan forward to defeat it. Issue based strategy will always be short-term.

Hence, flooding the streets with officers, utilising reserves from other forces and changing to two shifts per 24 hours have proven to be a successful issue based strategy. However, this type of strategy tends to be resource heavy and therefore is unsustainable in the medium to long-term.

Which brings us nicely back to the apparent absence of any real strategy prior to the riots; a status history tells us we will soon return to.

Let’s take a look at some of the problems, both recent and historic, which impede the development of good strategy for our police:

1. Politics is managed by economists.

The debate over the cuts to the police budgets is a case in point. The economists on one side of the political table say it is essential to cut to balance the books, those on the other side say it isn’t. The ‘managers’ (read politicians) back their ‘own guy.’

I am not suggesting that the manager and the economist are not vital players in the process however I am suggesting that there are two empty seats at the table; that of the strategist and the leader.

For where management is fundamentally about making best use of your resources, leadership is about taking people with you in an agreed direction. And where the economists will advise the managers where to budget to balance the books, the strategist will look at the effective, efficient and economical application of resource.

So, while those in Westminster are arguing whether to cut or not the strategist is saying; “hold on, let’s look at the bigger picture here. We can probably maintain, or even improve, that service by deciding what its purpose is and the best way (effective, efficient, economical) to get it there.”

The leader is then far better placed to take the people with him because the case becomes one built on purpose not one of saving or spending. (Example; five councils in West Yorkshire have just saved £1.6m p.a. for their council tax payers by integrating their legal services. The service/purpose is maintained, the books are more likely to balance).

2. Structure is limiting strategy.

In any walk of life it is a mistake to define your structure before deciding what purpose that structure has to serve. Yet this is exactly what nearly fifty years of politicians have done with our police.

The world has changed since the 1960s (photo: BBC)

The world has changed since the 1960s (photo: BBC)

The last time the structure of our police was reviewed fully and independently with any view as to its strategic purpose was 1962 (prior to the Police Act of 1964). There have been a number of structural amendments since then but none linked to specific purpose laid down by strategy.

We now live in a very different world from that of the early 1960s and structural reform is long overdue. This was acknowledged yesterday in the Commons by the Prime Minister although it remains to be seen what new structure will be proposed and whether it is designed to service any properly thought out, vision based national policing strategy.

3. The ‘destination’ is lacking.

Of course, to say there is no strategy to British policing would be incorrect. However, what strategy there is is restricted by not only being shoe-horned to fit structure but by lacking any properly defined destination.

The Metropolitan Police will have their strategy and other forces further, distinct plans of their own. The issue based strategy employed by the Met relied strongly on other forces having spare capacity; that is something that cannot be planned for on a force by force basis, it is something that occurred as much by luck as judgement. Having that spare capacity can only happen if either each individual force plans it unilaterally or an overarching national strategy recognises the need.

Not only are local forces hampered in their planning by poor structural thinking and by a degree of reliance on luck, many are also limited by lacking any clear vision.  And medium to long-term strategy without vision is immediately limited by lacking any clear destination.

I will single Suffolk Constabulary out, not because they are any worse than their fellow forces but because their very poor Vision was recently brought to my attention; “We take pride in keeping Suffolk safe, while ensuring all our communities value and trust what we do.

It’s typical of modern ‘new managerialism’ and ‘new public management’ ‘visioning’ in that it confuses vision with mission and sets no clear destination towards which the organisation can plan its path. Worse, it is a statement based in ‘now’ not in their destination.

This is not to say that Suffolk Police do not also have a Mission but, unfortunately, that is as flawed as their Vision and reads more like a weak list of strategic outcomes; that is definitions of goals to be achieved if the destination is to be reached.

Suffolk are not alone among UK police forces in getting these important points wrong and thereby limiting their strategy’s potential to deliver the level of success the dedication of their officers, not to mention their community, deserve.

Closing the loop; if the structure is limiting and the quality of what strategy that structure permits is poor then where the economist sees the need to save money, the strategist sees ways to provide policing far more effectively, efficiently and more economically.

The bottom line is that in tough economic times the service can be maintained because it is so streamlined, so well-honed while in the good times the funding now being debated can be put to far better use either within the police service or in the prevention of crime served by elements of the wider economy such as education, health, sport and community provision.

Whatever does happen, we should remember that front-line police are not to blame for the shortcomings of their senior officers and, more specifically, politicians. Whatever we think of the overall picture, the men and women on that front-line deserve our dedicated, unerring thanks and support.

© Jim Cowan, Cowan Global Limited, August 2011

Twitter @cowanglobal