CHARITY TAX U-TURN A LESSON IN POOR CONSULTATION

Photo: The Telegraph

There are few advantages to having an incompetent government however one is the learning they frequently provide not just in politics but in business and in life in general (as often highlighted in this blog).

The latest lesson provided by the UK’s government follows today’s announcement of a U-turn on the so-called ‘Charity Tax’ which had been announced in the last budget. This lesson is one which will reduce resource wastage while providing significantly improved decision-making and strategy through simply being better informed.

‘Consultation’ – it is a well-used word. It describes an action which, when undertaken well, informs us and allows us to make sound decisions based on quality data. It can be as simple as asking your friends what they would like to drink before going to the bar. It can be as complex as understanding the rule book, the competition and the science before designing next season’s Formula One car. In both instances the outcomes will undoubtedly be of far higher quality if the information required is gathered before embarking on the task rather than after. In both instances foresight informs sound decisions where hindsight tells you where you went wrong.

No organisation or group whether business, government or friends at the local will devise high quality strategy without being sufficiently well-informed on relevant topics whether they be markets, competitors, public opinion or whether your friend wants whisky or vodka.

In its last budget, the UK Government announced a cap on the tax-relief for philanthropic donations. The government saw this as closing a tax loop-hole but, unfortunately for them, neither the British public nor the affected charities saw it this way. It did not take very long before the (populist) intention of collecting more tax revenue from millionaires was rebranded by public, charities and media alike as a tax on charity and the term ‘Charity Tax’ was born.

It was never going to be a popular measure and, bowing to public pressure, the government agreed to consult. The result of that consultation is today’s U-turn announcement with Chancellor of the Exchequer George Osborne saying; “it is clear from our conversations with charities that any kind of cap could damage donations, so we’ve listened.”

But here’s a thought George, next time why not consult with those likely to be affected before making the announcement, prior to drafting policy, doing the sums and telling the nation in your budget speech?

This is today’s lesson for business (and others) courtesy of HM Government: The best time to consult on direction, new policy, product launches, customer wants and needs and…….pretty much everything else except reaction, is before committing.

In business terms we need to know whether a new product is wanted or needed, how much people will pay, what, where and who the competition are, etc, etc, etc. Get it wrong and it can be a very expensive process, if not financially almost certainly in wasted time (which will have a value whether costed or not).

In the Third Sector, without consulting fully and properly with (for example) volunteers before taking decisions can have disastrous effects as a workforce paid in-kind by their passion, turn their backs and walk away. All for the sake acting proactively and asking in advance in place of reacting and asking different questions after making an uninformed or ill-informed decision. It is the difference between; “what do you enjoy about volunteering and helping us out?” and “why did you stop coming along to help?” It is basic; it is Consultation 101.

If you are developing a new strategy (or revising an existing one), devising a new policy or making any choices, the time to consult is before you make the important decisions at a time when gathering intelligence and collecting data will help to inform your decision-making process; the better the consultation, the less the likelihood of getting decisions wrong.

Cut corners when consulting or avoid it altogether and the end result is the same whether government, business or trip to the bar; decisions based on narrow opinion, guess-work and little else.

There is a well-worn phrase which describes this perfectly – “look before you leap!”

Or, as I frequently remind clients; there is no such thing as a stupid question. The stupid thing is not asking the questions to which you need answers at the time you need them in order to inform your decisions.

Who’s going to tell George?

© Jim Cowan, Cowan Global Limited, May 2012

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MARKING FIFTY YEARS BY VALUING FIFTY PENCE (OR CENTS)

Over the past couple of months, as my fiftieth birthday has been approaching, I have given some thought to how I would like to mark reaching my half century. At the same time, I have been asked more than a few times what I would like to receive as a birthday present.

I’m hoping I have come up with an answer to both questions which will also be something many others will want to be a part of…..

I’m immensely proud (even though it is one of the seven deadly sins) of the fact that I have been able to devise, launch and manage a number of events over the years that have raised in excess of £1/2 Billion for good causes. But that figure also comes as a result of being someone who is fortunate to have the occasional good idea along with the ability to turn the idea into reality.

Many others work just as hard, if not harder to do their bit for charity, raising a few pounds, dollars or euros to hundreds to thousands and more. Not a single penny of it is more or less important than another penny. Every effort in support of a good cause is as valuable as any other.

As I hit 50 today (22^nd May) it strikes me that 50 is quite a good number to use as a theme for support for charity, for good causes and for those less well off than us. It is a theme which needs no organiser just a collective desire to do good. If already a fundraiser or donator, a little more good; if not, an easy place to start.

Let me explain.

Fifty pence (or fifty cents); what is it worth, what does it buy? Not a lot on its own but put enough 50 pences together and very soon it becomes a sum of money which makes a difference.

If everybody in the UK donated an extra 50 pence a week to a good cause, approx. £30 million more would be raised every week – that’s £1.560 Billion a year!

If everybody in the USA donated an extra 50 cents a week to a good cause, approx. $155 million more would be raised every week – that’s $8.060 Billion a year!

The value of fifty pence and/or fifty cents starts to look very different.

But value in anything isn’t just about money. Let’s look at it another way. If we take the UK National Minimum Wage of £6.19 (from October 2012) then 50 pence represents a near as doesn’t matter 5 minutes. Can you spare 5 minutes a week to help a good cause? How about giving that disabled neighbour a lift to the shops or spending five minutes just dropping in to check the elderly couple up the road are okay.

It’s not much is it? It doesn’t even cost you money. And yet if we all gave 50 pence of our money or 5 minutes of our time to make the world a better place each week, the value would be £/$ Billions every year.

It’s a very small, very easy way to be part of something huge. It’s a very small, very easy way to be part of something that can make a difference.

What do I want as a present to mark my fifty years on the planet?

Not much. Fifty pence or cents or your money. 5 minutes of your time. Each week.

Let’s spread the word. What do you say?

 

© Jim Cowan, Cowan Global Limited, May 2012

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THE EUROZONE CRISIS – A LESSON IN BAD STRATEGY AND INCOMPETENT LEADERSHIP

As the Eurozone stumbles from crisis to crisis and the continent’s leadership stumble from emergency summit to emergency summit it is worth reminding ourselves that the issues they face were predictable and, with earlier action, avoidable.

As they continue to falter, as they struggle for solutions, Europe’s politicians provide invaluable learning for all in business.

A journey through the evolution of the Eurozone Crisis shows a number of stages where bad strategy and incompetent leadership have meant that, far from resolving the crisis (as numerous pronouncements have declared), its continuation and downward spiral have been guaranteed to continue.

However, that bad strategy and incompetent leadership provides plenty of lessons for those in business hoping to avoid their own crises or, if facing difficulty, in how to handle it. Here are four of them:

STRUCTURE SERVES STRATEGY

It is human nature to want to define structure early in a project, even one as large as the Euro. It is also a mistake. From its outset the Euro project has suffered from a rush to establish the structure prior to clearly defining why it was even a good idea and how it would work.

In this rush to structure, unsound decisions were made based on wishes rather than facts. Primary among these was the failure to recognise the limitations of some southern European economies. Too late Jacques Delors, the man generally heralded as the architect of the single currency, recognised this when he said in December last year; “in the 1990s leaders chose to turn a blind eye to the economic weaknesses of some member states,” before going on to say (of the rush to launch without proper strategy in place), “the finance ministers did not want to see anything disagreeable which they would be forced to deal with.”

Good strategy faces up to and addresses the issues. Good structure services good strategy in the most effective, efficient and economical way feasible. Neither has been the case from the outset for the Euro project.

HAVING A STRATEGY IS NOT THE SAME AS HAVING A GOOD STRATEGY

The rush to structure when launching the Euro created the need to force-fit strategy to pre-defined structure. This limited the quality of any strategy then or since. This lack of quality strategy has continued throughout the current crisis. Delors somewhat understated the case when he said, “the response now the issues had surfaced had generally been inadequate.”

The fact of the matter is that throughout the current crisis Europe’s politicians have failed to respond adequately with strategy to target the real issues. The growing likelihood that Greece will have to leave the Euro and the worrying downgrading of many Spanish banks, come fully five months after those same politicians ignored the need for strategy to address the current crisis, instead opting for structure to service the (hoped for) future. It comes ten months after the first Greek bail-out was announced as a great triumph. Finger crossing has no place in good strategy.

NOT ALL STRATEGY IS VISION-BASED

In December last year, following a week of frantic discussions, Europe’s ‘political management’ declared they had come up with a solution which safeguarded the future of the Euro. They had a vision of where the Euro should be and put in place a new structure to service that future. What they overlooked was (is) that the Eurozone Crisis is of the present, the here and now. What they failed to address was the current issue(s) facing the Euro, instead designing the future. Where Issue-Based Strategy was desperately required, they opted for a kind of Vision-Based Strategy (albeit more structure than strategy).

That we arrived where we are today; deeper into crisis with the threat of at least one, if not more, nations potentially having to leave the Euro should surprise no one. It certainly will not surprise any semi-competent strategist who has been looking on.

MANAGEMENT AND LEADERSHIP ARE NOT THE SAME THING

Crisis summit after crisis summit has seen Europe’s politicians enter into discussions on a continent-wide issue with the mind-set that they are there to manage their own national interests. And why shouldn’t they, that is what they were elected to do. Unfortunately this left the door closed to genuine leadership; leadership designed to offer a strategy for a solution which would work and which would take the rest with them.

And that is a fundamental problem for the Euro, that the flawed structure relies on politicians elected to manage the interests of individual countries and economies within the Euro, not the Euro itself. Where managers look after and make best use of the resources at their disposal (i.e. service structure), leaders recognise issues, find solutions and take people with them in addressing issues and delivering solutions (i.e. service strategy).

WHERE TO NOW?

Until Europe’s politicians realise the need to include genuine leadership and good strategy alongside the managers and the economists the crisis is likely to continue its downward spiral. Indeed, through their bad strategy and incompetent leadership those politicians might already have signed the Euro’s death warrant, at least in its current format.

For business the lessons are clear:

• ·         Have a clear, well researched, non-delusional strategy in place prior to designing the structure best suited to its delivery.
• ·         Understand that simply having (or claiming to have) a strategy is not sufficient for the pursuit of anything bar mediocrity or failure. Good strategy goes far further.
• ·         If faced with a crisis face it head-on and honestly. There is no point in ignoring it to design a future which might not exist. There is no gain to be made by denying errors made in the past. Vision-Based Strategy is great for getting to the future but if you are facing serious difficulties in the present only an Issue-Based Strategy will do.
• ·         Make sure your board (or decision-making group) is functional; include management and leadership, economist and strategist. Leave one or more out at your peril.

 

Also on the Eurozone Crisis from Cowan Global:

The Eurozone Crisis – The Management Of The Continuation Of Mediocrity By The Unaware (3^rd December 2011).

The Eurozone Crisis – Still No Strategy And Still No Real Fix (10^th December 2011).

Eurozone Credit Downgrades Should Surprise No One (14^th January 2012).

© Jim Cowan, Cowan Global Limited, May 2012

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VISIONLESS STRATEGY – DESTINATION UNKNOWN

Not too long ago the importance of establishing your Vision prior to developing your strategy was accepted practice. Increasingly however a school of thought is emerging which suggests that strategy does not require vision.

Far from being good advice, visionless strategy is a shortcut to…..destination unknown.

The purpose of Vision is to provide your strategy with direction. In the same way that you can better plan a car journey if you know the destination, so you can better plan your business strategy (or any other strategy) if you know where it is you intend to get to.

Good Vision is a bit more than that; good vision answers the question; ‘what does success look like?’ To continue the car journey analogy, vision might give you a destination of ‘London’ – okay for planning in general terms but a bit vague. Good vision would be more specific; ‘the Lyric Theatre in Hammersmith W6 in time for a theatre show at 8.00pm.’

The problem with most businesses is that they simply do not understand strategy (as reported by a McKinsey survey in February 2011). This extends to the Vision which drives strategy too.

Last summer I spoke at an event at which I was sharing the platform with Microsoft. The theme of my talk was creating good Vision. In preparing my talk I researched those I was sharing the platform with in the hope I could use them as good examples. Unfortunately, while researching Microsoft’s Vision I came across a great example of how not to do it!

I can hear you now; “hang on Jim, Microsoft. Are you sure? They are a pretty successful company!” Let me explain.

The Vision was; ‘A PC on every desk.’

Having found this poor example of Vision, rather than avoid it I phoned up my contact at Microsoft and explained what I had found and asked if they minded if I used it as an example of how not to do it. His reaction surprised me; he laughed. After he stopped laughing he invited me to go ahead before letting me know how relieved Microsoft were to have caught how bad that Vision was in time.

He explained, had Microsoft continued to blindly follow this Vision for much longer the smart phone revolution might have passed them by completely. Now, although they are playing catch up, at least they are in the game.*

‘A PC on every desk’ was a Vision in the ‘destination London’ bracket. It gave a vague direction but failed to describe what success looked like and, worse, offered no deadline. To those peddling the idea of visionless strategy Microsoft’s poor ‘PC on every desk’ would be cited as evidence that Vision doesn’t work whereas the truth is that the Vision itself was poor.

Another reason for poor Vision, one I come across on an almost daily basis, is that of confusing Vision with Mission. Put very simply and in short, your Vision is where you are going, your Mission is why you exist. The two are often linked but not the same. The Girl Scouts cite their Vision as ‘help a girl reach her highest potential.’ This is a great example of an organisation mistaking what they do with where they are going; their Mission and their Vision. If applied properly as Vision, to drive strategy it is unlikely to prove successful. The visionless strategy peddlers will use this as an example of why vision doesn’t work, why it is unnecessary. The truth is that it is just poor vision.

The third group of visionless strategists have existed for far longer; they are that group who rather than figure direction prefer the idea of “just getting on with it.” They are easy to spot, they are often the people who seem permanently busy but generate little forward momentum other than by chance.

Their hero might even be Lao Tzu; he who is mistakenly quoted as stating “a journey of a thousand miles begins with a single step,” (The more literal translation is, “a journey of a thousand miles begins beneath one’s feet”).**

The ‘just get on with it’ brigade would start walking, literally taking the first step. However, the more sensible first step might lie in first determining your destination. To return to the car journey analogy the person (business) who paused to first define what success looks like will arrive at the Lyric Theatre (and on time), those who just got on with it could well be……..….well……..…anywhere!

To put it in real terms, let’s say our Mission was to conquer space. What are our options?

1. “We don’t need a vision to give us direction, let’s just get on with it.”
2. “We are going to outer space.”
3. “This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth.” (John F Kennedy, 25^th May 1961).

Whose Vision (or lack of) will give their strategy the sharper focus, the higher chance of success?

Who is your money on?

*Not only have Microsoft improved their Vision and given it a deadline, they have also moved on a step and present it in visual (video) format. To view Microsoft’s ‘Productivity Future Vision 2019′ (made in 2011), click here.

**To put Lao Tzu’s oft quoted words in perspective it should be noted he also said, “a good traveller has no fixed plans, and is not intent on arriving.”

© Jim Cowan, Cowan Global Limited, May 2012

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BLAME THE DATA AND REMOVE THE GOALPOSTS

HOW TO MASK NATIONAL OLYMPIC POLICY FAILINGS!

Guest Blog by Prof. Mike Weed.

I was contemplating a blog revisiting the scandalous lack of proper strategy from government aimed at delivering the physical activity legacy promised to the IOC in Singapore in 2005 when Mike Weed published an excellent new blog on that very topic. Therefore, instead of a new blog from me, with his consent, here is Mike’s blog on the subject; ‘Blame The Data and Move the Goalposts – How to Mask National Olympic Policy Failings!’ (Jim Cowan).

In Singapore in 2005, Lord Coe, the Chair of the London Organising Committee for the Olympic and Paralympic Games, secured the 2012 Games for London with a bid presentation including a promise to inspire a new generation to choose sport.  Yet, as the popular press is fond of reminding us, no previous Games has raised national participation in sport and physical activity. Furthermore, a systematic review in the BMJ in 2010 concluded that “the available evidence is not sufficient to confirm or refute expectations about the health or socio-economic benefits for the host population of previous major multi-sport events”.

No Evidence for INHERENT legacies

However, this is not the full picture.  Whilst it is true that no previous Games has resulted in sustained increases in sport and physical activity participation in national populations, it is also true that no previous Games has attempted to raise population levels of sport and physical activity participation.  Participation data has merely been examined ex-poste to explore whether Olympic and Paralympic Games have affected participation levels.  Consequently, the BMJ review should be interpreted to mean that there is no evidence for an inherent sport and physical activity participation legacy effect, in which benefits occur automatically.

Reasonable Legacy Ambitions?

So what does this mean for London 2012?  Was it reasonable to suggest back in 2005 that a national sport and physical activity participation legacy could be delivered?  In short, yes!  The lack of evidence for national participation legacies following previous Games that had not attempted to deliver such legacies is not an indication that a national sport and physical activity participation legacy could not be leveraged from London 2012.  In fact, a worldwide systematic review of evidence, conducted by the Centre for Sport, Physical Education & Activity Research (SPEAR) at Canterbury Christ Church University for the Department of Health, provides evidence that mechanisms associated with Olympic and Paralympic Games have had a positive effect on sport participation where specific initiatives have been put in place to leverage such participation.  However, such initiatives have not been on a large enough scale to affect national levels of sport and physical activity participation, hence the lack of evidence for an inherent effect in the BMJ review.

National Policy Failures

So, armed with this evidence about how sport and physical legacies might be developed, surely good progress must be being made towards delivering a national sport and physical activity legacy from the London 2012 Games?  Well, unfortunately not!  Evidence from Sport England’s Active People Survey shows sport participation in England has increased by an average of only 38,000 a year over the last three years.  The problem is that although evidence suggests London 2012 could have boosted the nation’s sport and physical activity participation given the right strategic approach, national legacy policies have not incorporated this evidence into a coherent national legacy strategy.  Instead, the legacy aspirations of the Department for Culture, Media and Sport, like those of Lord Coe, have been pinned on the hope that there will be an inherent inspiration effect from the Games, with England’s Mass Participation Legacy Plan, Places People Play, focusing almost solely on supply: of facilities, of fields, of leaders, and of opportunities.  However, this is not Field of Dreams – there is no evidence to suggest that if you build a sport supply infrastructure, people will come! People will not come because there is no strategy in place to simulate demand.  Consequently, the lack of progress towards a national sport and physical activity participation legacy from London 2012 is a policy failing, in which national legacy strategy has not been informed by the available evidence.

Blaming the Data

Unsurprisingly, a policy failing is not one of the explanations respectively offered by Lord Coe and Jeremy Hunt, the Culture Secretary.  Lord Coe blames the data, believing that the Active People Survey fails to capture sport participation legacy outcomes, and suggesting that it should not be trusted because Sport England, which commissions the survey, has “singularly failed”.  As alternative evidence, Lord Coe suggests “if you speak to [the British Cycling performance director] Dave Brailsford he will tell you he’s got half a million more cyclists than pre-Beijing”.  However, Active People provides official National Statistics, and since 2005 has been conducted by two highly respected market research companies, IpsosMORI and TNS-BMRB. Each year its sample size exceeds 175,000, which provides accuracy to within 0.2%.  The same cannot be said of the anecdotal view of a national performance director, however genuinely-held it may be.

Removing the Goalposts

In contrast to Lord Coe, Jeremy Hunt does not suggest National Statistics are flawed.  Rather he claims an inappropriate legacy target was set by the previous government, which promised to get one million more adults participating in sport by 2012/13.  The Department for Culture, Media and Sport has now dropped this target, because Mr Hunt believes a “more meaningful national measure” is required.  However, with less than 2012 hours to go to the Games, a more meaningful national measure has yet to be announced.  Consequently, and somewhat conveniently, by effectively removing the goalposts the DCMS has now ensured that there is no nationally endorsed target against which government policy can be judged to have failed to deliver a national sport and physical activity participation legacy.

© Prof. Mike Weed, May 2012.

Professor Mike Weed, a highly regarded academic, is a Professor of Sport in Society.  He is Director of the Centre for Sport, Physical Education & Activity Research (SPEAR) at Canterbury Christ Church University and is Editor of the Journal of Sport & Tourism. Mike’s personal blog can be read at http://profmikeweed.wordpress.com

Except where otherwise stated © Jim Cowan, Cowan Global Limited, 2010-2012

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