DRINKING AND DRIVING SHOULD NOT BE SEPARATED

28 11 2012

Photo: RoSPA

There is drinking and then there is driving and for many right-minded people, ne’er the twain shall meet. But is there a place where putting them together makes sense? A place where combining one with the other would add up?

I have been watching the unfolding debate about a statutory minimum price per unit of alcohol with some interest. Not for the same reasons as many others but more from the perspective of, yet again, watching a government in action which quite plainly does not understand the difference between strategy and good strategy nor (worse) the difference between tactics and strategy.

What has this got to do with mixing drinking and driving? Let me explain.

The Government’s logic is to introduce a minimum price of 45 pence per unit of alcohol as a way of reducing the binge drinking culture evident across England and Wales (there is separate legislation for Scotland from the Scottish Parliament of 50 pence per unit).

On the face of it, what the Government calls a ‘strategy’ is actually a tactic to address the issue. If booze costs more, people will drink less. It is somewhat simplistic but few alternatives have been put forward and there is the unfair burden on the non-binge drinking tax-payer of policing and health costs caused by the issue which might be met out of the extra income raised by the State.

But pause a moment. That is not what is actually happening. Yes, there is a 45 pence per unit increase on the way but, strangely, on Sky News’ Sunrise programme this morning, Secretary of State for Health Jeremy Hunt stated that this is not a revenue raising measure.

Not a revenue raising measure? What did he mean? Within 20 minutes Sky’s team of reporters had dug and found the answer; the extra money is retained by the seller of the alcohol, the State is not raising a single extra penny through this ‘booze-tax’.

It’s a good job the country is flush and doesn’t need to raise any extra income through genuine taxation at the moment.

Only it does. That is why the Government is umming and ahhing over whether to keep or cancel the proposed 3 pence per litre increase in fuel levy due in January.

This is where my drinking and driving analogy comes in. The media and others call it ‘joined-up thinking’ which is what we strategists call integrated planning (or more precisely, in this example, vertically integrated planning).

We have a struggling economy; we need to get business moving. Take me, picking a random couple of days from my recent diary as an example.

On 8th November I drove from Nottingham to Potters Bar for a client meeting in the morning. In the afternoon I went on to Woking to meet another client before heading for Goodwood and a business dinner that evening. The following morning I headed from Goodwood to Royal Wootton Bassett for two days work with another client before heading back to Nottingham on the evening of 10th November.

The relevance? Like many other businesses I can only carry out these essential journeys by car, which means putting fuel in that car, which means paying extortionate taxes on that fuel. The train would prove both inefficient and expensive, even without the above inflation fare rises announced today. If the Government’s plan is to get cars off the roads and their drivers onto trains then that part of their strategy is badly lacking in ‘joined-up thinking’ or integration (in this case horizontal).

Who bears the cost of these types of expensive journeys? Initially me, but in the end, you.

Yes; you. Whether it is me allowing for my costs in what I charge my clients and they then pass on to their customers or any other form of petrol or diesel driven transport used for business, ultimately the cost comes back to you. Everything, right down to the food you buy in the supermarket gets there because it is transported by vehicles reliant on heavily taxed fuel. Even if you don’t own a car, you are indirectly paying the fuel levy in almost every purchase you make.

Now, let’s try some of that joined-up thinking. Imagine two commodities; one is essential the other is not. Let’s name these two commodities; we’ll call the essential one ‘fuel’ and the non-essential one ‘alcohol’. Let’s then assume we need to raise income for the exchequer in a fair and equitable way. Assuming VAT on both, on which one would you add further taxation; the essential or the non-essential? Would you consider it even moderately sensible to tax (heavily) the essential while increasing the price of the non-essential without exchequer benefit? Especially at a time when even further taxation on the essential is being considered?

On the face of it putting up the price of alcohol and taxation on petrol are unrelated. But start thinking strategy not tactics, start thinking in an integrated way not in silos and the absence of common sense becomes more apparent.

This thinking should spread through the many arms of government as it should through all businesses; I have used drinking and driving only as examples as they are both currently in the news. But taking that example; how would your business fare if the quality of strategy, the difference between the strategic and the tactical and the depth and breadth of integration were examined?

© Jim Cowan, Cowan Global Limited, November 2012

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GOVERNMENT INCOMPETENCE ON STRATEGY HITS THE NEWS

24 04 2012

The Public Administration Select Committee has today published a report which is deeply critical of the Government’s ability when it comes to strategy.

While this is old news as far as Cowan Global are concerned, we’ve been stating as much for months, the Government’s response suggests that still no one is listening.

The Parliamentary Public Administration Select Committee (PASC) has today published a report; ‘Strategic Thinking in Government: without National Strategy, can viable Government strategy emerge?’

The report tells us that a lack of strategic thinking is leading to a “patch and mend” approach to policy making and that an absence of national strategy was leading to mistakes such as those following the recent budget.

In an appraisal which presents nothing new to regular readers of this blog, the report also states that the aims set out in the Coalition agreement were too meaningless to serve any meaningful purpose.

You might be mistaken in thinking the PASC is an opposition led group. In fact it is a cross party committee chaired by Conservative MP Bernard Jenkin who states; “this is a long-term problem.”

In a scathing analysis of the Government’s strategic ineptitude the PASC report expresses concern at the Government’s “inability to express coherent and relevant strategic aims.” The report goes on; “This factor also militates against clear thinking about presentation, which was evident in the aftermath of the Budget and in response to the possibility of industrial action by tanker drivers.”

As an analysis of the Government’s knowledge of and ability to devise and deliver strategy, the report does not stop there stating; “There remains a critical unfulfilled role at the centre of government in coordinating and reconciling priorities, to ensure that long-term and short-term goals are coherent across departments.”

PASC Chairman Jenkin called on the Government to publish a statement of National Strategy in late spring or early summer each year saying it could introduce the next Budget process and make clear how specific policy measures announced in the following months tied in with long-term objectives.

“This is not about abdicating policy-making to opinion polls, but national strategy must appreciate what sort of country the public aspires for the UK to be,” he said. “Failing to do so in the long-term undermines national self-confidence, and in the short-term could have catastrophic consequences.”

It makes damning reading and reinforces the numerous examples of poor strategic thinking from government all too frequently reported on this blog. However, what the report does not ask (and therefore answer) are two key questions:

Does the Government understand what good strategy is and, if not, where are they taking their advice on strategy from?

The clear evidence of recent months and years is that the majority of politicians (not just the Government) have a poor understanding of good strategy. The danger is that they do not realise this and therefore are not taking action to remedy the problem. They think they are expert where, in reality, they are far from being so.

This is demonstrated by the choices made when seeking advice. Until recently the Prime Minister’s strategy advisor was Steve Hilton, a leading ‘Blue-Sky thinker’ but far from strategy expert. At least Hilton’s appointment suggested recognition of the need for sound advice however since his departure the PM has chosen not to replace him.

In response to the PASC report, this low on understanding and sound advice government has said it has “a very clear objective to bring down the deficit and restore economic growth.”

They could not have given a more clear demonstration of their lack of understanding, yet again, quite clearly confusing goals with strategy.

Footnote 1:

While this author welcomes the report I am disappointed that the PACS report does not recognise the inherent flaws in the policy of ‘Initiativeitis’ employed by both the previous and current governments and now widespread in its application. It is a policy which demonstrates better than any other the poor understanding of strategy evident at Westminster.

Footnote 2:

In 1999 Justin Kruger and David Dunning (Cornell University) published ‘Unskilled and Unaware of It: How Difficulties in Recognising One’s Own Incompetence Lead to Inflated Self-Assessments.” (Journal of Personality and Social Psychology 1999, Vol 77, No 6, 1121-1134) In their concluding remarks they state; “We propose that those with a limited knowledge in a domain suffer a dual burden: Not only do they reach mistaken conclusions and make regrettable errors, but their incompetence robs them of the ability to realise it.” In short without a critical friend, without skilled, knowledgeable advisors, the Government are operating in exactly the space defined by Kruger and Dunning; that of the unskilled and unaware.

Read the full PACS Report here.

© Jim Cowan, Cowan Global Limited, April 2012

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THE BANK OF MUM & DAD AND THE FUNDING OF SPORT

8 04 2012

Regular readers of this blog will know that I frequently return to the topic of strategy for the development of sport and the ineptitude of consecutive governments on the subject.

However, as with all aspects of life there are also a number of apparently non-sporting government decisions which will have a significant effect on grass-roots sport and its ability to grow – or even stand still. As any half-way competent strategist will tell you ‘cause and effect’ should always be considered as ‘big picture’ considerations where, unfortunately, government tends to only consider decisions in one area in isolation. In government initiative seemingly always trumps strategy.

In the rush to recognise the value that Lottery funding has brought to sport in this country we sometimes forget that, at the grass-roots, it is not even in the top three of biggest funders. By far the largest financial contributors to sport are the many unpaid volunteers who keep it running. Their contribution is not limited to the obvious travel and time but is often invisible such as the North London coach I spoke to who pays entry fees for the young athletes he looks after because without they would not be able to afford to compete.

Following the volunteers in terms of contribution is the ‘bank of mum and dad’ – a bank that pays those entry fees when it can afford them as well as being kit purchaser/washer, taxi service, funder, sponsor and more.

With VAT seemingly set to remain at 20% for the foreseeable future this is the first area of negative impact on sport. Equipment costs more, facility hire costs more, travel costs more; in fact everything costs more. At the grass-roots end of sport, not an essential item of spending for the vast majority of the population, as the financial pressure builds sport becomes an area where cut backs can be made.

Fuel is an essential commodity but has been far from exempt from not just a single tax but double taxation as the seemingly ever-rising fuel levy adds to the burden of VAT. This stealth tax on small business (which many small sports clubs are) is also taxation on both participation in and the watching of sport. As with VAT, as family budgets are stretched difficult choices have to be made and little Johnny’s badminton lesson will more often than not be seen as less essential than getting to work , paying the bills or putting food on the table. It should be remembered that tax on fuel is a tax on everything reliant on fuel for its production or delivery – pretty much everything else!

Public transport might be an option but buses and trains do not always run according to where sport needs them to run at the times it needs them to and besides, with many families ‘time-poor’ the added time public transport travel can take makes it less likely to be utilised, especially outside of cities like London where it is less plentiful. And for longer trips for sports fans and away team travel the train, already expensive is now having £3.6bn a year of subsidies removed by the government.

The third largest funder of sport in this country is local authorities who, as we all know, are facing significant cuts. Like it or not, those cuts will most likely fall in areas in which those authorities are not bound by statutory protection; other than playing fields that is all facilities, sports development, community clubs, sports inclusion projects…..need I list them all?

I am on record as supporting sports facilities, sports development and community sport as candidates for statutory protection (as they are for many of our European neighbours) and would suggest that any government serious about a lasting sports participation legacy would make this a key component of any integrated strategy for the development of sport in the UK – a strategy that no government has yet seen fit to produce.

Indeed, it is the lack of investment in good strategy which most undermines grass-roots sport in this country. In June last year a Sky Sports News special report on legacy highlighted the problem of local authorities being unable to fund sports facilities when using Finsbury Park athletics track as a back drop.

One of the programme’s expert panel, former NBA star John Amaechi made the point; “…what’s going to happen here at the Olympics could be worse even than just people not participating afterwards, it could be that you excite young people to play, they go out into their communities to look for where to play and they come here and they realise it’s grassed over, it is no longer a facility where they can get the right kind of coaching and the right kind of development. That would be a true tragedy.

The local facility might be closed, mum and dad can’t afford to get them to the nearest one still open and if they can, the volunteers can’t afford to offer the level of support they once did and there is no proper strategy aimed at addressing these issues or the overall development of sport properly.

Some legacy.

(Blog first published at www.sportsthinktank.com on 2nd April 2012)

© Jim Cowan, Cowan Global Limited, April 2012

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LONDON’S FAILING HIV PREVENTION PROGRAMME SYMPTOMATIC OF WIDER NHS STRATEGY ISSUES

29 01 2012

A recent report has criticised the way HIV services in London are commissioned highlighting ‘significant management failings’ and a ‘lack of strategy’ as the root causes.

But as the debate surrounding the government’s health service reforms rumbles on, aren’t these among the same issues which neither side seems willing to grasp?

The recent Pan London HIV Prevention Programme (PLHPP) Needs Assessment report highlighted failings in both management and strategy for the London HIV commissioning group. The organisation spends £2.3m a year with HIV treatment in London costing £500m pa on the 30,000 people accessing care (rising by 5% annually).

The report identified ‘significant failings with the management of the programme’ and stated ‘providers have fallen far short of their activity targets.’ Of those failings the report cites ‘a lack of clarity over leadership’ and ‘inconsistent direction from commissioners’ before going on to say that the programme ‘appears to have evolved over time without any explicit strategic direction.’

It makes shocking reading and yet those responsible appear to be assuming a position similar to that of a threatened ostrich. As an example, Mark Creelman, Director of Strategy (sic) for Inner North West London Primary Care Trusts (INWL PCTs), which lead the PLHPP has stated; “we are working to ensure the programme has the right leadership and the right governance in place to be as effective as possible.”

Mr Creelman goes on to state; “across commissioning and providers, we have a joint responsibility to ensure we’re spending taxpayers money effectively.”

Few of us would argue with that sentiment yet another report into the PLHPP, published last February, showed that of 17 projects commissioned only two merited further commissioning. Nearly a year later the “taxpayers money” continues to fund all 17 projects bringing into question exactly what Mr Creelman means by “effectively?”

At the root of the problem are a number of issues which are also affecting the NHS nationally, issues which do not appear fully understood by the various entrenched positions as the ‘debate’ continues.

  1. Structure is not strategy. Time and time again at macro, meso and micro levels, the NHS (as with many other organisations) addresses weaknesses and issues via restructuring. The purpose of structure is to best facilitate the effective, efficient and economical delivery of strategy. Therefore constant restructure without strategy review and without clearly defined strategic purpose is akin to shuffling the deckchairs on the Titanic.
  2. Goals are mistaken for strategy. This results in a dog’s dinner of mini-strategies at national, regional and local level, all quasi-independent of each other. Few of these strategies are even horizontally integrated let alone vertically integrated thus a structure and psychology of a large organisation split into smaller silos has been allowed to develop and prosper.
  3. Management and leadership have been confused. In short-hand, the role of management is to ensure best use of resource while that of leadership is to take people forward in a shared direction (which includes making tough decisions). The NHS is ‘management-heavy’ and ‘leadership-light’ creating a classic example of an over-bureaucratic entity.

That change is needed in the NHS is not disputed by either side of the debate however both sides are seeking structural change ahead of strategy defining the purpose of that structure. Both sides want to continue committing taxpayers money to structure where goals are funded in silos, genuine strategy is absent and the word “effective” is used in place of ‘effective, efficient and economic.’ Both parties seek to continue a structure over-reliant on management where quality leadership is being cried out for.

That both parties share the view that the NHS requires reform should be a great, shared starting place for the development of quality strategy leading to genuine reform. However the government has chosen to continue the use of the policy of ‘Modernisation’ first introduced by Tony Blair*, consultation has been a sham and the only leadership in evidence has been of the flawed variety taking us to the entrenched positions of today.

A strong, well run, accessible NHS is important to us all. Whether fighting HIV in London or providing health services for a nation let’s bring strategy and leadership back to a table dominated by management and structure before we end up with nothing more than a different version of the dog’s dinner we all currently tolerate rather than enjoy.

*For more on ‘Modernisation’ see ‘Cameron’s NHS? Beware The Moderniser!’ from February 2011.

© Jim Cowan, Cowan Global Limited, January 2012

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AT LAST, A STRATEGY FOR SPORT – BUT IS IT ANY GOOD?

22 01 2012

Regular readers of this blog will know that in the past I have been particularly critical of the lack of good strategy coming from politicians in general and the lack of strategy for sport coming from the Department for Culture, Media and Sport (DCMS) in particular. 

Last week, DCMS announced ‘Creating a sporting habit for life – a new youth sport strategy’ – a positive step which I applaud. But, as strategies go, is it any good?

The new strategy is not the much-needed, long-awaited national strategy for the development of sport nor does it pretend to be. The purpose of this strategy is to target young people, in its own words, ‘creating a sporting habit for life.’ Whether it will succeed or fail will be difficult to judge because from the outset, a vital component of strategy has not been defined.

While flawed and poorly researched, the previous government were clear and concise about what success looked like; one million more people taking part in sport. The success of any strategies (or the initiatives employed in strategy’s place) could be judged. When the current government removed this target without installing a new one, they deleted that clear picture of success. And while the talk is still of more people taking part in sport, judging success is impossible. Ten more people playing sport is ‘more people’ but is it success? Of course not, but what is the measure? 1000? 10,000? 100,000? We don’t know. Thus from the outset any new ‘strategy’ faces an uphill struggle in that what it sets out to achieve has not been clearly defined. It is a basic Strategy 101 lesson, the more specifically you can describe success, the more specifically you can plan for its achievement.

‘Creating a sporting habit for life’ is in reality a crafty rebadging of the previous methodology employed by this and the previous government, a policy of initiativeitis. What this document does is pull a few initiatives together in a document with the word strategy on its cover.

Is it really strategy? Yes, it is. In its purest definition strategy means ‘a plan or design for achieving one’s aims.’ The government has set out its aim, woolly though it is, and this document forms a part of their design for achieving it. However, the difference between strategy and good strategy is important and this document falls short on a number of counts.

Strategists will know the term ‘Insanity Planning.’ It refers to the practice of doing the same thing today and tomorrow that you did yesterday and expecting different results. Insanity planning plays a role in the new DCMS strategy.

Not only is the policy of initiativeitis continued (albeit thinly disguised), the strategy relies on the same experts who have informed previous government initiatives and, according to the DCMS own statistics, failed to deliver. The strategy talks of working with a range of groups, “the people who know sport and young people best”, the very same groups and people within those groups who have been employed/funded by government to deliver the development of sport previously.

While within those groups there are many who do know sport and young people well, the assumption that all do is naïve. Indeed, there should be no place for assumption in good strategy. A further assumption being that knowledge of sport and young people brings with it knowledge of sports development and of strategy.

Insanity planning; using the same processes, the same people and initiatives designed by the same people who designed what went before (some of which look remarkably similar despite the new names).

Developing sport properly requires an understanding of the sports development continuum, a continuum which takes the participant on a journey from foundation to participation and, assuming talent, interest and support onto performance and excellence. Laying the right foundations is of vital importance to what will come later and this area has largely been ignored by the new ‘strategy’ – it jumps straight in at participation without considering some basics:

  1. People are more likely to pursue a lifetime of involvement in sport if they enjoy it.
  2. They are more likely to enjoy it if they have been given the basic skills that facilitate enjoyment.

Thus largely overlooking primary schools (although they are mentioned in afterthought in a couple of places) is to undermine that pathway at the outset. Consider a child entering secondary school who has not learned to catch – what is the likelihood of that child enjoying any sport in which catching is a requirement? It matters not how many opportunities the child has to try those sports, the foundations were never laid to facilitate the enjoyment.

Yet, if the teaching of Physical Literacy was made a compulsory part of the primary school curriculum in the same way PE is (and will remain) in secondary schools, no child should move on to secondary school unable to catch (Physical Literacy is best taught between the ages of 8 and 11). Physical Literacy covers a range of movement skills (of which catching is just one) vital to the future enjoyment of and success in sport and yet our past, present and now future systems continue to overlook them. (For more on Physical Literacy see: How Government Policy Past and Present Undermines Ours Children’s Future).

Would it be a difficult new policy to introduce? No, it could be easily added to the woefully small amount of time primary teaching degrees give to PE with workshops for those already in teaching. Would this be expensive? No, certainly nowhere near as expensive as spending £millions on initiatives which assume skills not taught, which assume the laying of a foundation not planned for anywhere else. Given the focus of the new ‘strategy’ is on providing young people with a habit for life, it is surprising this effective and economical way of laying a sound foundation has been overlooked.

And yet, this ‘strategy’ is a step in the right direction. It acknowledges the need for strategy even if only by putting the word strategy on its cover. It tries hard to pull together various initiatives to create a strategy of sorts. But it is not, nor is it a part of, a functional, well designed national strategy for the development of sport and it is this that is required, it is this that would offer the best chance of our delivering on promises of increased participation made in Singapore seven years ago (and of sustaining that increase).

What we have instead is a continuation of the silo mentality I had hoped the proposed merger between UK Sport, Sport England and the Youth Sport Trust would consign to history. There is certainly little sign of the vertical integration so key to properly effective, efficient, economical strategy.

The new ‘strategy’ is divided into five sections, the aspiration of each section is laudable but I am looking at this from a quality analysis perspective, not one of how warm the documents’ wish-list makes me feel.

The first aspiration is to build a lasting legacy of competitive sport in schools, something I am a supporter of. The focus, indeed the only offering is of the School Games. The document suggests that all children will be offered competitive opportunities through the School Games but I wonder, what of those with poorly developed physical literacy and how many life-long (or at least long-term) participants such an initiative will bring?

Aspiration number two is on improving links between schools and community sports clubs something that sounds like a rehash of New Labour’s ‘School-Club Links’ initiative only with fewer resources (same experts, same solutions – insanity planning). Credit where it is due though, at least this section lays out some clear targets by which to measure success. For example Football has pledged that 2000 of their clubs will be linked to schools by 2017. Whether that includes those already linked is not made clear however while 2000 sounds a large number if you break it down it is 8 clubs linking to schools per county per year. The ‘all-sport’ target is 6000, the equivalent of 24 clubs from all sports linking to schools per county per year. This is not what I call ambitious, representing only around half a club linking per county per year from each of the 46 sports Sport England currently fund.

Working with those sports governing bodies is aspiration number three. What is described in this section is not even an initiative; it is an outline structure which will require strategy from the individual sports to enable delivery of government policy via Whole Sport Plans. Whole Sport Plans is a grand sounding name for something started under the last government and which, far from being ‘whole sport’ are judged solely on government policy and funding targets. There is no additional requirement for each sport to provide evidence – or even have – any plans for the sport which provide development outside that decreed by government policy. In other words sport’s governing bodies are now positioned so as to be solely answerable to government rather than the sports in their care. Under New Labour many even restructured to ensure this. Government trusts governing bodies to deliver calling them “the experts”. These are the same experts deemed incapable of delivering previous policy, when they were also referred to as “the experts”. I repeat what I said above; being an expert in sport is not the same thing as being an expert in sports development which is not the same thing as being an expert in strategy.

The fourth aspiration is on investing in facilities an aspiration which must be welcomed by all involved in sport. That said, the ‘strategy’ announces nothing new, instead repeating the funding promises made in the ‘Places, People, Play’ initiative announcement. It is worth remembering Seb Coe’s warnings in Singapore in 2005 that no building has ever inspired anyone to take up sport; buildings must be a delivery tool for properly planned development.

Fifth and the final aspiration reported in the ‘strategy’ is that of opening up provision and investing in communities. Again, this is something all involved in sport will welcome however the document gives no clues as to the level of investment or how it will be targeted. The case study provided in this section offers no clarification, describing a badminton club which has “no joining fee, no membership fee and no need for a partner – creating a club that could sustain itself for the long-term.” How is not made clear and, as with all things strategy, ‘how’ is a vital question overlooked at the author’s peril.

So, we have a strategy of sorts which, despite my comments above, is a positive but small step in the right direction. Many of the aspirations are laudable but the absence of any meaningful description of what success looks like, sound sports development philosophy, vertically integrated thinking or, indeed, expertise suggests that while at last the government are trying they must raise their game if they are to improve further.

© Jim Cowan, Cowan Global Limited, January 2012

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HS2: WHY WE DON’T KNOW WHO IS RIGHT AND WHO IS WRONG

11 01 2012

As predicted in my last blog, the government has come out in favour of the proposals for the new high-speed rail line from London to Birmingham commonly referred to as HS2. The decision has given rise to strong feelings among those both for and against however, from a sound strategy point of view, we simply do not know which view is right, there are still too many ‘unknown unknowns.’

Earlier this week I lambasted the current vogue for Initiativeitis over the use of sound strategy and HS2, the proposed high-speed rail line between Birmingham and London, shows all the hallmarks of the kind of expensive initiative to which I referred.

That is not to say that there are not reasons for supporting HS2. Primary among these reasons is one that applies to nearly all (if not all) of Britain’s rail system – it has been allowed to become old and outdated and desperately needs updating. Train journeys, particularly during rush hour have more in kind with sardine cans than (expensive) travel system and, much though the increased speed of HS2 would be welcomed it is capacity which poses the bigger problem. New is required, a patched up railway won’t do.

According to government and Network Rail figures there is economic benefit too. Although the project will cost c. £33 billion to build, the estimates put forward suggest economic benefit of c. £44 billion.

A much-needed update of a decrepit railway which brings with it economic benefit; what’s not to support about HS2?

There are those who object because the building and subsequent running of HS2 will negatively impact on areas of countryside but, short of the patched up old system option referred to above, it is difficult to see how any upgrade of our railways will be achieved without some disruption to the countryside somewhere. While I have sympathy, as part of a cold and clinical assessment of need the pros outweigh the cons.

There are however imponderables which might raise questions, not least if it fails to come in on budget, as to how much of the predicted economic benefit will be realised against inflated costs – it is, after all still in recent memory that when budgeting the building of the Olympic Park the government forgot to cost in VAT before also having to increase the original budget (£2.4bn) by 400%.

And there is also the information that either has not been gathered or which does not yet exist; knowledge gaps which suggest HS2 is yet more Initiativeitis without thorough strategic rationale.

Looked at in isolation the benefits above sound strong but, as ever, our politicians are failing to think ‘big picture.’ While focusing on train travel between the UK’s two biggest cities it would appear no one has asked, “what will travel look like in 20 or 30 years?” Or even, “where and how will people be travelling in 40 years’ time?” The need defined above is need in terms of today’s traveller when the project will not be completed until this writer is well past the age of retirement and possibly long gone!

Put another way; where is the government’s integrated national travel strategy? Forty years ago Heathrow Airport had scope for expansion, scope it needed. Forty years before that London’s main airport was not in west London it was south of London. No, not Gatwick but at Croydon. Forty years from now where will London’s (and the UK’s) main airport be? Heathrow is likely limited to its three runways and is therefore close to its capacity. Could it be that Boris Johnson’s proposed new airport in the Thames estuary will be the ‘new Heathrow’ of 2042? If London and/or Britain is to remain a vital hub of world travel, decisions must be made. I’m sure Amsterdam is looking on in interest.

Will Birmingham still be the UK’s second city? Will Leeds with its growing importance to both financial and legal sectors have overtaken Birmingham in importance in economic and in travel infrastructure requirements? Will any other city have reinvented itself in the way Manchester, Liverpool, Newcastle or Glasgow have in the last 30 years? Will the East Midlands be the central hub of UK travel with its three main cities, improving airport and central location?

What will our motorway network need to look like? Will our waterways be renewed as ‘greener’ arteries for moving freight around the country?

We simply don’t know. There is no integrated national travel strategy and no research which has considered need based on a likely future rather than the current, already dated, position. Developments will continue to happen piecemeal and in the random way that is Initiativeitis. It looks like action with purpose where, without having clearly defined what the purpose needs to be it is in fact just action for the sake of action.

Taken on its own as a small part of ‘future UK’ HS2 looks to have validity but when considered as part of a bigger picture, when considered as part of what traveling around Britain 50 years from now will look like we have no way of knowing whether the decision to proceed is a good one or not.

HS2 is based on guesswork and assumption. Good strategy must be informed by sound research, by informed predictions of future demand and by considering the big picture. Otherwise Gottlieb Daimler and Karl Benz might have built horse-drawn carriages and we would be flying off on our holidays from Croydon!

© Jim Cowan, Cowan Global Limited, January 2012

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DO POLITICIANS ‘GET’ STRATEGY?

7 01 2012

It has been an interesting week for observing politicians in the UK and looking for some understanding of strategy. Party leaders, new initiatives and the use of social media have all been in the spotlight but what do the events of the week tell us about how much those running the country understand strategy?

Let’s start with Labour peer Maurice Glasman who said Ed Miliband’s leadership of his party lacks strategy leading to plenty of denials from the leader of the opposition and his team but to very little in the way of evidence to support those denials. The content of the denials did however expose the important reason behind the lack of strategy; in general British politicians simply do not get it, they appear to define having an idea and a set of goals as the same thing as strategy. It is not. (I will tackle confusing goals with strategy in a future blog).

Many of our current crop of politicians come from a generation where strategy has been neglected, the New Labour project showed the way forward and that way forward was through the use of ‘Initiativeitis’ – a term coined by current Minister for Sport Hugh Robertson shortly after the last election.

Times were good, funding was plentiful. This allowed the gaps in understanding of strategy to be overlooked while goals and problems alike were dealt with by launching a seemingly never ending stream of initiatives and, with time, politicians started confusing goals with strategy. Initiativeitis was king; strategy had been deposed.

But having been deposed did not mean the worth of strategy was diminished. Where good strategy brings increased effectiveness, efficiency and economy; with funding and finance plentiful no one was really concerned whether initiativeitis offered the same value for money.

Then came the banking crisis, followed by the election and then a new government. The early signs brought hope that we had politicians who understood strategy. Robertson coined the term initiativeitis before proceeding to launch a series of ….. initiatives. When challenged he promised he had a strategy; when challenged to produce said strategy he went silent. Eighteen months on, we still wait, the hope given by those early signs long since passed.

It would be wrong to single Robertson out; his poor understanding of strategy is no different to that of his colleagues. The need to save money to reduce the national debt is not being addressed by vertically integrated strategy; it is being addressed by the biggest ‘initiative’ yet, one of slash and burn. Cuts, cuts and more cuts.  Seeking to continue to deliver services but in a more effective, efficient and economical way was ignored and substituted by a policy of cut and save.

Other symptoms which demonstrate a lack of understanding of good strategy have emerged. Ignoring the big picture by implementing piecemeal small picture initiatives and failing to consider cause and effect have become regular themes.

The Bombardier issue was a great example of seeking to award a contract on ‘best value’ where value was defined far too narrowly. This was the cause of an effect which ultimately will offer significantly less value to the national purse when the economic impact of 1400 redundancies at Bombardier and at least the same number in the local economy are taken into account. Increased benefit payments and lower high street spending sees money leaving the exchequer through one hand and not coming back through the other. Value?

This week has seen government backing for the Network Rail review suggesting they will go ahead with the HS2 high speed rail link between London and Birmingham. Yet again, there is no ‘big picture’ thinking; there is no integrated transport strategy considering rail, road, air and water only another big initiative for one rail line which might have potential to link with Leeds and Manchester sometime in the future.

In among the bleak picture I paint there has been a small light; the Prime Minister’s handling of the Euro Zone crisis (whether you agreed with his actions or not) demonstrated good understanding of the need for issue based strategy (that which confronts immediate need) over the rest of Europe’s insistence on maintaining the vision without addressing that immediate need. Unfortunately, that brief flicker of light appears to have been a fluke rather than strategy as the government continues to talk about tackling the ‘now’ without considering the demands of planning for a healthy future, for example by diversifying away from the economy’s over-reliance on banking.

Where does the PM take his advice on strategy from? One of the world’s leading Blue Sky thinkers, Steve Hilton is David Cameron’s ‘Director of Strategy’. Unfortunately, blue sky thinking is not strategy and, valuable function though it can provide, smacks (again) of confusing goals with strategy, of designing initiatives not seeking vertically integrated effective, efficient, economical solutions.

Meanwhile, back in the ranks of the opposition, Ed Miliband has defended himself from Lord Glasman’s remarks by informing us that he does have a plan for Labour but that it would be wrong to be laying down detailed policy so far ahead of the next election. It is a fair point but, given his party’s own record on initiativeitis (i.e. inventing it), are we talking strategy or are we talking goals and yet more initiatives?

Despite a growing mountain of evidence that the current government do not understand strategy, the opposition have not once taken them to task on the subject. This suggests that Glasman’s remarks are not wide of the mark but overlook the reason; that his party’s leader does not have a strategy because, like much of Westminster, he does not understand strategy.

Even the use of social media is providing evidence of the political blind-spot. For most who use it, social media is a great tool for doing nothing more than keeping in touch and letting your friends know what you are up to. For politicians as for business it needs to be more than that. The use of social media requires its own strategy, each strand linked to the others to tell the story the politician and his party are aiming to tell.

Ed Miliband used Twitter to mourn the passing of ‘Blackbusters’ (sic) presenter Bob Holness, on a personal level quite touching but in terms of planned thinking? Diane Abbott this week used Twitter to cause disquiet through racially discriminatory comments. True, she (eventually) apologised but what place did those tweets have in her or her party’s social media ‘strategy’? Regular users of Twitter will have seen politicians of all hues talk of ‘great meetings’ and ‘shaking hands with the public’. Sky News (Saturday 7th January) even reported one (unnamed) Conservative MP who tweeted that after a whole day’s canvassing everyone he met was a Tory! Maybe the strategy is to prove himself delusional or that he thinks the electorate that gullible?

Is it important? Consider it this way, if they can’t grasp strategy on the micro-level of social media what chance the macro-level of running a country?

Last year a McKinsey survey placed European (including the UK) business bottom of the worldwide table for understanding of strategy. One wonders where a similar survey would place our politicians.

© Jim Cowan, Cowan Global Limited, January 2012

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REPORTS MAKE STRONG CASE FOR VERTICALLY INTEGRATING STRATEGY

18 12 2011

The last couple of weeks have seen two important reports published, neither of which has been linked to the other by media or politicians but which together add weight to my oft-repeated suggestion that far better vertical integration of strategy is demanded of our politicians and their quangos.

First came Cancer Research UK’s report telling us that 40% of all cancers are due to the lifestyle choices we all make. This was reported (correctly) as a ticking time bomb for the NHS and while it hasn’t really added anything to the body of knowledge on the subject, it did come as a timely reminder that lack of exercise and poor dietary choices have more downsides than just the thickening waistlines visible on every high street.

The second report was Sport England’s Active People survey which, although suggesting physical activity is slightly up did not provide evidence that the government and its agencies are in any danger of delivering the participation legacy promised to the world in 2005. (Add to that, that other than the figures for athletics, none of Active People’s reported figures have undergone independent scrutiny and those for athletics have been shown to be wildly over-exaggerated the picture is likely far worse).

In July last year Minister for Sport Hugh Robertson insisted a national strategy for the development of sport was in place. Following the announcement of the latest Active People figures he told Sky News that a strategy would be in place early next year. The apparent contradiction needs explanation and, further demonstrating poor understanding of strategy, neither has anyone in government yet explained how scrapping New Labour’s targets for participation but not replacing them gives any strategy (current, future or imagined) meaningful measures?

If DCMS is failing in its duty to honour the sporting participation legacy (and in providing any strategy at all for the development of sport) it should realise that has impact far beyond the world of sport and what Cancer Research UK’s report reminds them is that a healthier nation will require far less intervention from an NHS facing obesity and cancer (and other) time bombs in the future.

I pick on the DCMS but in general, strategy emanating from all government departments, where it exists, continues to be poor. And where it shows any degree of integrated thinking is limited to the horizontally integrated only. There is no evidence whatsoever of any of the vertically integrated strategy demanded to link (for example) the needs identified by Cancer Research UK’s research and the promises made for physical participation when securing the 2012 Olympic Games.

In tough economic times it should also not be overlooked that ensuring strategy is well-integrated vertically doesn’t only help to recognise broader (but related) issues and increase the likelihood of strategy being successful; vertically integrating strategy always offers far greater value and economy.

© Jim Cowan, Cowan Global Limited, December 2011

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WHEN WANT AND NEED OVERLOOK CAUSE AND EFFECT

16 11 2011

Or; a lesson in poor strategic thinking and poor vertical integration.

FUEL TAX DEBATE HIGHLIGHTS POOR STRATEGIC THINKING BY GOVERNMENT

I have visited the Government’s war on the motorist on this blog before when I highlighted how fuel is the only essential commodity subject to a double tax (the fuel levy and VAT). At current prices this combined tax sees the motorist paying a rate of around 160% tax on the fuel he or she buys at the pump.

Taxation at that level on any other essential commodity would likely see rioting in the streets however, for this article, I intend to ignore the debate of fair versus unfair and instead focus on how flawed strategic thinking is now undermining the Chancellor’s predictions of income from fuel taxation while, at the same time, contributing to the general public’s reticence to return to the high street.

I will apologise in advance for addressing the matter in simplistic terms and would like to point out that the main purpose of the article is to demonstrate to those who develop strategy the importance of vertically integrating thinking and of taking into consideration cause and effect. The Government’s poor understanding of strategy is merely the vehicle for the lesson.

Starting at the beginning, I will address two of the Government’s stated strategic aims:

  1. To raise income via taxation on fuel in order to address the national debt.
  2. To encourage the public to return to the high street where an increase in consumer spending will boost a near flat-lining economy.

When looked at in isolation, Aim 1 seems reasonable; the scale of the dual taxes on petrol should create income for the Exchequer, an income enhanced by the increase in VAT to 20%. And although the rate of the fuel levy has recently levelled further increases of 3p per litre are due in both January and August of next year.

However, the income generated from this taxation has actually fallen. The AA reports that in the first twelve weeks of 2011 the Government lost almost £650m in tax revenue due to a drop in the amount of petrol and diesel being sold at the pumps. In short, the consumer can only afford so much before he/she simply has to buy less, exposing the myth that higher taxation will mean higher income for the Exchequer.

As a direct result of this high taxation, Aim 2 is also undermined. Consider how many daily household items, essential or otherwise, are not affected by petrol (and diesel) prices; without fuel the goods are not delivered to the shops from warehouses or to warehouses from manufacturers or farms. The manufacturers have sales forces travelling by car; the farmers have tractors working the farm. All use petrol or diesel and therefore all have to allow for the higher cost of fuel by increasing their prices. Ultimately this means higher prices for the consumer who, already struggling to fill the car has to cut how much he/she spends on other commodities as prices rise.

That is the knock on effect a single, poorly thought through strategy, one that considers want and need without considering cause and effect. When we introduce how well vertically integrated this strategy is with other strategies the picture only worsens.

The Government is not expecting taxation on fuel to encourage the consumer back to the high street. The principle mechanism for that has been Quantitative Easing or QE. Under this mechanism more money is produced and released into circulation under the assumption that more money in the economy will lead to more spending. QE has a chequered history being blamed for driving inflation into four figures in pre-war Germany as well as having some modest successes in other countries.

Successful or not, one effect of QE, wherever it has been employed in the past, has been weaker currency, in our case Sterling. In theory, a weaker Sterling is not a huge price to pay for ‘rebooting’ the economy. It can assist with exports for British industry however drives the cost of imports up. It can make Britain more attractive to tourists however makes overseas holidays for Britons more expensive.

And where a commodity is traded in another currency (e.g. Dollars) it will inevitably mean it becomes more expensive for the British consumer; meaning that oil, traded on the markets in Dollars, goes up in price as a direct result of a policy (QE) designed to put more money into the economy and to encourage consumer confidence and spending.

And more expensive petrol means, less money spent at the pumps resulting in less income from fuel for the exchequer and resulting in more expensive goods in the shops as both import and delivery costs inevitably rise.

End result? Both of the stated Government aims are falling short.

The more strands you add to the necessary vertical integration of strategy, the more we see strategy failing. Gas is also traded in Dollars meaning a higher percentage of household income will be needed for winter heating bills meaning less to spend on the high street, and so on.

Single issue, unintegrated strategy is risky at the best of times. Failing to properly consider cause and effect is to undermine strategy even given the best intentions.

The Government have consistently told us there is only Plan A, there can be no Plan B and that is not necessarily an issue provided Plan A has inbuilt flexibility, that it is subject to proper, regular review and that where it ‘underperforms’ adjustment and adaptation are carried out.

Without, it is difficult to see where either the extra income to the Exchequer or the return of confidence in the high street will come from.

(Author’s note: It is the nature of blogs that they continue to be read long after they were written. To put the above into context, at 11.38 this morning, 16th November 2011, the Dollar stood at $1.5758 representing a drop of 5% since the policy of QE began in the UK. Many analysts believe that the fall could have been far worse but for the US maintaining interest rates lower than those in the UK making it less attractive to investors. It should also be noted that the US Federal Reserve has also used QE in an attempt to breathe life into the US economy which, although still risky, is seen as less risky by investors due to the Dollar’s status as a ‘safe haven’ currency. Should the US not apply further QE and/or raise interest rates, even to parity with those in the UK, forecasters predict that Sterling will appear far less appealing).


© Jim Cowan, Cowan Global Limited, November 2011

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BOMBARDIER, STRATEGY & THE MISSING BIG PICTURE

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

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