Could Benefits Cap Be Bad For Business?

I was having a discussion with some friends over the last few days on the future of business.
As the discussion moved from disrutive technology to the economy and the event I’m hosting in September “Predicting the future we don’t yet know about”  we began to discuss the effect on business of the welfare cap championed by Iain Duncan Smith
“How can that be bad for business?” someone asked…but I think it could so let me explain.

Iain Duncan Smith
Iain Duncan Smith

Firstly let me say that I’m not against people being encouraged to find work, nor in saving money from people not willing to work. However, I think that Ministers have fostered the impression that all working families will get a fair deal compared with those that don’t. However, DWP’s impact assessment has been reported to have quietly revealed that any couple working up to 23 hours a week and receiving housing benefit, income support and job seekers allowance could still be affected!

If this is so then I wonder what the future holds:

a) The amount of benefit is capped so that it forces people to move to another part of the country then parts of the UK may become a “out of work / benefits Ghetto”. Could increase crime and social unrest in deprived area? Could it also reduce the labour pool which business needs to draw upon or make what labour there is expensive…a charge that will have to be passed onto customers?

b) There are also questions as to whether the cap will, in fact, deliver a fiscal saving. Eric Pickles, Sec of State for Communities and Local Government, wrote to the Prime Minister saying “We think that it is likely to generate a net cost” as a consequence of homelessness and migration. I question the sense of having an area like London that has a labour shrortage

c) Vince Cable has said that benefit cuts will have a devastating impact on poor families because the Government is doing little to create affordable housing. House prices are likely to rise in some areas whilst fall in others!

d) The BBC and other parts of the media are already beginning to record details of hardship and I wonder in the future might see it lead to social unrest.

Stories of big business avoiding tax does nothing to foster the feeling that business is supporting the country and even if employment is rising, people are feeling bettter about the future, summer has arrived…spending cuts have only just begun and soon there will be rises in interest rates…

What’s the solution?…I’m not sure and that’s why I’m not an MP but I guess it won’t be as clear cut nor as rosy as some ministers would have us believe

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The future can’t be predicted simply prepared for…

Recently a load of people have been talking to me about restructuring their teams for the future.
I’ve noticed that to do this they collect vast amounts of data in an effort to predict the future trends, business conditions, customer needs and so on.

The problem with the future
The problem is that the future is unpredictable. and the only people to generate a “five year plan was thr old Soviet Union…and look where they are today!

Take technology for instance…by the time it’s clear what will be affected in the future it’s too late! It move so fast that catching up is difficult far less being able to stay ahead. THerefore traditional planning where the object is to predict the future, develop detailed plans and restructure teams to take account of those predictions no longer make sense.

It must be assumed that the future can’t be predicted…but it can be prepared for. The answer is to shift how business prepares for the future.The task for business is to structure the organisation to be immediately flexible. That’s not new idea…but it’s rarely implemented successfully.

I’m excited about the future
Over the past months I’ve talked to so many business leaders about this topic. I’m excited that the result will be that I’m organising a series of events for selected business leaders to talk to them on how they can plan for the future they don’t yet know about.

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We’re Doomed…Doomed I tell you!

I had a long breakfast with a friend and Company Director this morning. Over the bacon and eggs we talked about some senior and unexpected departures from one of his competitors. He was identifying the opportunities these senior departures presented for his own company.

In short he categorised these as:

  • Available talent might be available and useful to his own comany (possibly on a consultancy basis)
  • The competitor’s clients might speculate that they might need to shop around for alternative suppliers (Just in case!)
  • Loss in staff morale and as a result loss of productivity
  • Gap in leadership until new leader can be appointed and begin to succeed
  • Possible further departures which could increase problems
  • Cost to competitor of rehiring and lead-in time for newe job holder

Too often, when senior management departs staff look to the future wondering if the business is doomed. (Even if the leader had been unpopular) and wonder if they should consider finding another job before it’s too late. My friend and I speculated that the benefits for my friend’s company could last between six and nine months and be worth many clients and an increase in sales income.

Bernard Matthews as an example
One only has to look at Bernard Matthews, the turkey company, to see how the loss of top people can benefit competitors. Last week the Chairman, Davis McCall, stepped down. Then the Chief Executive, Noel Bartram left and follows Rob Mears the Managing Director’s ealier departure.
The company employs 2200 people with a further 1000 staff in Germany and Hungary. In recent years Trading conditions have been poor for the company with bird flu and increase in costs. In addition staff morale has been hit and sales have slumped. Profits on a turnover of £341m amounted to just £2m.
With the departure of senior people it could be expected that morale and productivity will further be affected unless the latest appointment of David Joll (former CE) can secure a rumoured investment of between £20 and £30million. In which case he could end up as a hero.

A Strategy

My friend and I worked on plans until lunchtime on ways to manage possible, though unlikely, senior departures in his own company.

Stephen Harvard Davis

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A fascinating meal of Burger and Chips

It’s refreshing when I encounter a leader that delivers change by making sense of the change process
Last night I spend a facinating few hours with Phil Jones, MD of Brother UK Ltd.
Over a burger and chips Phil and I discussed how he had restructured his team.

Phil Jones MD Brother Ltd

It would be impossible to record everything we talked about. So much of what he had to say around team management and generating increased productivity interested me, particularly as we obviously share the same outlook.

What impressed me was his emphasis on the importance he attached to his leadership style of emotional intelligence. It allowed him to deliver the far reaching change he needed to implement and with his colleagues support (even those that were disadvantaged). There were three things that struck me. The first was that he

referred to all those in his team as “Colleagues”, employees was a title he rejected as not desirable or helpful in team relations.

The second thing was his sense of fun. For instance He permanaently gave up his reserved car space. The first day he announced the decision he offered free coffee all day to the first person who first occupied it the following day. He was even able to show me a picture of the car that had arrived very early to park in the space once reserved for the boss. I wonder how many CEO’s would consider doing the same?

The third thing that struck me was his emphasis on agile work groups to avoid boredom. A work practice that could reduce turnover of good talent if adopted by other businesses.

I shall be watching Brother Ltd with renewed interest and suggest that others do to

Stephen Harvard Davis

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Diet Fads Are Bad For Management

I was talking to a group of managers earlier this week about increasing team productivity when one asked “What’s the latest thinking on this?” It didn’t surprise me as I’ve become used to team leaders and even CEO’s wanting to have the “Latest fix or fad” believing that it’s bound to be better than the previous ones.

Management can’t be like a diet fad
It’s like watching compulsive dieters trying the latest diet craze for a while before moving onto the next. Examples would be Total Quality Management in the 1980’s, more info

followed by process reenigineering and culture change. The difficulty for managers is implementing change so that it’s always beneficial to the organisation.

The expectation that the latest fad will increase profitability through competitive advantage can’t be true when every other company is adopting the same fad. I recently was interviewed by William Buist on this exact topic and a short clip from the YouTube video can be seen here

Resisting fads until they are proven to be useful might be a good strategy…but needs nerves of steel


Stephen Harvard Davis

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Why don’t people remember…?

Last week a Company Director phoned Assimilating-Talent and was talking to me about his frustration with communicating change to his employees. He told me that “People don’t read stuff”.
Actually his frustration was that his employees seemed not to remember information.

I pointed out that this shouldn’t be a surprise when you look at how information is available and the way people retrieve it. Wikipedia doubling each year, over 200 million searches on “Tax advice” from Google, staff handbooks that run to 100 pages or more, 200 emails a day into their inbox and so on. People don’t need to remember information any more, they just need to know how to retrieve it.

Another result of all this information is that people are reading information differently. They scan for keywords as they hunt for specific topics, they read horizontally dipping in and out of text and store information, without reading it, for later reading.

This has huge implications for how organisations communicate with their people. The frequency of that communication and what people are being asked to look at. Possibly, instead of large memos, a shorter one line asking people to read: ‘“Section 2.4” of the change programme as this has changed‘.

Someone who I follow and talks huge sense on the topic of communication with people and businesses is Chris Street, The Bristol Editor and I would recommend a discussion with him if you want to improve your internal communication

Stephen Harvard Davis

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Language Predicts Poor Service

It’s always obvious when management are to blame for a team’s poor productivity. I often find that poor service is predictable from the language used by people in contact with customers.

This was demonstrated to me a couple of days ago I found myself in Putney (London) and visited Wallace & Co, the restaurant part owned by Gregg Wallace and the man who co-presents BBC’s Masterchef for lunch. Since the restaurant aims to bring the best seasonal fruit and vegetables to the customers plate it sounded great for a light lunch with a colleague between business meetings.

Sings of poor management

The first clue that things might not be as good as expected came when I asked the waiter “What’s the soup of the day?” He went off to the kitchen to find out. For me, “I’ll ask the chef” is always a sign that the management are doing a poor job and have a disregard for the customer and it’s a problem easily fixed by communication. It turned out to be Leek and Potato. “What’s the Quiche of the day”, Spinach I was told. My colleague chose the soup and a beef baguette and I opted for the Quiche salad.

Gregg Wallace

Five minutes later the waiter returned saying that the Quiche wasn’t as billed but something else much less appetising! I changed my order to the soup. When the two bowls arrived the soup was tasteless, just warm, unsalted, glutenous and devoid of any garnish. It was probably the worst soup I’ve ever had in a restaurant! (Gregg would have had lots to say in criticism on “Masterchef” if a contestant had presented such slop to him)

Such a shame when the vegetables, said to be specially selected from the best produce the owners could find, should have been ruined by the inability of the kitchen. Both bowls were sent back to the kitchen and I opted for a beef baguette that was  then served in a soup bowl!

I find it extraordinary that a restaurant could be so bad but even more that a personality allows his brand to be spoilt by such poor food and service. Gregg Wallace and his partners, Vernon Mascarenhas, Justin Carter and General Manager Dan Cooper surely can’t be oblivious to the changes that they could make which would improve productivity and customer. In looking through reviews being given by customers it seems that I’m not the only person to be disappointed because my comments are consistent with others.

However, rescue is at hand.
Here’s an offer for you Gregg.
Should you wish to contact me I would always be happy to help with your cafe’s problems.
As a start, I have promised to email the chef with my recipe for “Leek and potato soup”!

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What’s the Difference?

I often find myself talking to team managers about the differences between “Change” and “Transition”.
The reason for the discussion is that so many people assume that they are the same.

In my experience nothing could be further from the truth and very simply:
Change: Is a physical move to a new place. (This includes move of office, new way of working, dieting, learning and so on).
Transition: Are the mental stages that people move through to arrive at the new place

The definition illustrates why some team leaders find it difficult to implement change when they have other people to lead along a pathway to change. One of the major problems that contributes to change failure is that the leader works through the transition before those being led are given time to do so.

More information on transition management HERE

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Prison Reform Transition

I read with great interest in The Mail on Sunday (Feb 3rd) that Justice Secretary Chris Grayling wants to change prisoners don’t deserve lifestyle “frills” such as Sky TV, Televisions in individual cells, the ability to buy goods in a prison shop or for gay couples to be held in same cells.  Whilst this new policy will doubtless gain support from many voters is a return to Spartan jails is also a reversal that could cost him dear.

As with all business transitions there needs to be a risk assessment of the changes to determine that they will improve productivity or reduce costs. I don’t think that the risks have been properly assessed in this instance. Let me pose some problems as I see them:

  • TV reduces tension and removing it will increase boredom. This could increase incidents of riots and agression from prisoners
  • Wearing prison uniforms instead of own clothes. This will depersonalise prisoners and reduce morale and well-being and the question I have is what’s the purpose?
  • Less pocket money to buy own toiletries and sweets in prison. How will this aid rehabilitation?
  • Not allowing gay couples to share a cell. This is daft. Increases potential for abuse from other prisoners and is trying to make prison a sexless institution. As Such it’s either naive, perverse or possibly both! (I’ll resist the temptation of mentioning boarding schools attended by many in the cabinet to know what I mean!)

Losing one’s liberty is bad enough but surely the objective of prison is keeping prisoners engaged, increasing skills to enhance post prison employability, increasing education so as to reduce re-offending. Increasing boredom and punishment is likely to end up in violence, tension and possibly the odd riot or two! (A costly result). It also needs to be remembered that the “Short sharp shock treament” introduced by the Tories in the past was also a complete failure! The riskss are likely to make this a transition that won’t work.

Further information on successful transition management can be gained from Assimilating-Talent

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Thinking in the future can get the world talking

I’m often asked by team managers how to motivate a team to “achieve more”.
Too often the management have unrealistic expectations on how long change takes to be implemented

Time frame is a problem
The thing not often understood by managers is that having done all the planning, and being excited by the anticipated results their thinking is in the FUTURE, whilst their team is securely in the PRESENT and working in the way they have been instructed (up to now). Change brings insecurity and sometimes even panic.

It’s Chaos
I know two people who were in the opening ceremony for the Olympic Games 2012 (Jamie Smart and Sammy Bikoulis). During early practice both wondered if order could ever result from the chaos of learning their parts in small groups of five people. How it was going to translate into an event involving thousands was probably impossible to envision.Then things started to come together and finally despite the “Terror” felt on the night it was brilliant.

The lesson for all managers is to allow the team time and the ability to think into the future. Some teams will be faster at this than others and during this perios people may even express doubts that they can achieve what is needed.


Being negative
However managers will often acuse their teams of “Being negative” when people express doubt over the success of a project. In my experience they are NOT saying “It won’t work” but in reality “I can’t do it”. The reason being is that they are in a present time frame. Take time to explain the future and who knows what might happen.

A lot of people thought the opening ceremony would be a disaster in comparison to Beijing in 2008.
Doubtless, early on, the organisers of the event had their own sleepless nights wondering the same.
But when everyone thinks into the future one can get the world talking about it.


Photo taken by me during the rehearsal (note the blue sky)

Twitter: Talentmentor

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