Four Day Week

I have just read an interesting blog which advocates a four day on, three day off work pattern with the same hours condensed into fewer days. I’m personally all in favour of changing work patterns to what suits the individual best, on the assumption that a happy employee is a more productive employee. I myself would probably go for the continental European style early start, no lunch hour (OK it’s a northern European style) and early finish. It does rather beg the question of how one would establish a working relationship with a CEO whose own preference was for bowling in after lunch and working into the small hours. Then again most bosses have quirks of some sort; for example the chap who never went out for a business lunch without appointing one of his companions as official carrier of the Tabasco bottle, just in case the restaurant didn’t provide that particular sauce.

Mais, mon ami, revenons á nos moutons. The blog posting that I reference above is written from the point of view of IT contractors, but the pros and cons as laid out still apply to interims at the level which I work at. Most importantly there is the question of day rate. As Winston Churchill would have said had he been an interim “Per diem rates are the worst way of structuring remuneration for senior level temporary staff, except for all the others”. Let’s be frank, the complete unsophistication of most clients (now there’s a subject for a future blog) would make it almost impossible to make this one fly. Secondly there is the availability issue. Given that most top team members – permanent or interim – are in effect on call 24/7 anyway then what would be the point of pretending to have a day off. On the other hand I once visited an electronics facility in California which belonged to GEC and operated a seven day fortnight with every other Friday off. I put it to the CFO that this was fine for the guys on the assembly line, but surely didn’t apply to him or to the rest of the management team. If Lord Weinstock wanted something then presumably he came in to work on it. But he assured me that wasn’t the case at all and that the three day weekend was sacrosanct. To this day I don’t know if that’s what really happened.

Reality, I feel, is better summed up by the late and great George Carlin “Just because you got the monkey off your back doesn’t mean the circus has left town.”

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Quis custodiet ipsos custodes?

Or, in its English translation, “why worry about cliche?”. Juvenal’s rhetorical question about watchmen needing to be watched themselves has been all over the reports of the Care Quality Commission’s apparent disregard for either care or quality if maintaining them meant any danger to the commission itself (1). As usual my own reaction has been one of total surprise that anyone should be surprised. Has anyone ever had any dealings with a regulator or inspector for whom they had any regard whatsoever? OK, that’s another rhetorical question. I’m sure that we wouldn’t have to look back as far as the Roman poets to find a recognisable comedic archetype.

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“It is the part of a fool to give advice to others” – Phaedrus

To take an obvious example, I’m sure that anyone who has served as a school governor will concur with me when I observe that the only apparent purpose for OFSTED is to provide hobby jobs for middle class women; plus, it would seem, to propagandise on behalf of whatever ill-thought through scheme the current secretary of state has dreamed up. As the poet (Juvenal again I’m afraid) said “I wish it. I command it. Let my will take the place of reason.”

The inspectors that I personally have had the most dealings with are, of course, accountants performing the annual audit of companies for whom I have worked. I don’t propose to give examples here – why waste good material – but suffice it to say that in my experience one can convince auditors of absolutely anything except when they think that someone is actually looking, when it becomes impossible to convince them of anything no matter how much evidence is produced. In other words their only concern, like all others charged with a monitoring responsibility, is for their own reputation and indirectly therefore their reward.

There are many theoretical and academic explanations as to why this should be so; my own favourite would be Roger Jones’ theory of the Four Orders of Management (2). Monitoring and regulating is as third order an activity as one could ever hope to find (as indeed, I would be the first to admit, is the role of CFO). I would also draw your attention to the well-known observation that the amount of politics within an organisation is inversely proportional to the amount of physical output produced. So, it is inevitable, but does it matter? I believe it does on two counts. Firstly, there is the cost to all of us of this activity which not only adds no value in itself, but also distracts and takes up the time of those who do create the value. And secondly there is the other inevitable consequence of this, the persecution of those who for moral or other reasons cannot go along with the charade and feel impelled to speak out. A lack of justice leads directly to injustice. As a Roman poet (3) put it “Censure acquits the raven, but pursues the dove.”

(1) Some of these reports should be read with care. The normally reliable Financial Times has, on Saturday 22nd June, printed a rather poor editorial based on the premise that the CQC forms part of the NHS. It doesn’t.

(2) The definitive book by Jones is ‘The Carpetmakers’. Good luck with tracking it down though; he’s a sadly underrated figure – also check out his concept of the Jones’ Principle, which is even more true.

(3) There is no prize for guessing which one.

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Nepotism (slight return)

There has been more feedback on this subject than on any of my previous postings; probably because we have all come across it at least once. Firstly, to those who thought they recognised the individuals involved, perhaps unsurprisingly you were all correct in your assumptions. Secondly, thanks to various connections of mine for reminding me of a number of examples from my career that I had forgotten:

  • The business owner who commissioned his newly qualified architect nephew to design a new finished goods warehouse. The building subsided leaving a 10 cm step across the floor and rendering two thirds of the racking inaccessible to forklift trucks. The inconvenience to outbound logistics was only matched by the difficulty of taking legal action.
  • The high technology plc whose CEO was the son and grandson of former directors of the same business. His less well-regarded younger brother was also on the board. The brother’s most well remembered – and possibly most significant – contribution was the time when, having arrived by helicopter at a facility in the west country, he looked around for five minutes, pointed to the loading bay, said “That needs moving to the opposite side of the factory. Make sure it’s done by the next time I’m here.”, climbed back into the helicopter and left.
  • The large US construction company where the EMEA Vice President Finance – and therefore pretty much the most important person in my working world – was the son of a former main board director. The son may have been a big cheese in the office, but as soon as one ventured out into the field the mention of his name was met by “Aww shucks, you work for Larry’s boy, well don’t you worry about what he says. You see I knew his daddy – now he was a fine man…” and so on; instant evaporation of credibility.
  • The time when as a member of an integration team following the acquisition of a small defence electronics business we found that the MD’s student son was running a retail consumer electronics business using the acquired company’s facilities and cash.

And thanks also to the correspondent who reminded me of the incident involving the freemasons and Private Eye in which he and I played a peripheral part many years ago. I think that story deserves its own post in due course.

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Nepotism

A couple of recent newspaper articles have made me think about nepotism and those occasions that I’ve come across it during my career. The first of these was obviously the story about the government’s new anti-nepotism tsar, James Caan, being exposed as a serial employer of his own children. Well, who’d have thought it? Speaking as someone who had never heard of this James Caan until I read the story, it caused no surprise to me at all; neither in the concept that the current government could possibly be bad at making appointments (and not just this bunch either – one day I’m going to give my thoughts on Gordon Brown’s bizarre choice of rabble-rousing buffoon Digby Jones as a trade minister), nor in the fact that a soi-disant entrepreneur (1) would keep it in the family.

Nepotism exists everywhere, always has and probably always will. And in fairness, sometimes it works. I once worked for a large public company whose chair and CEO, both life peers, instructed my division to find a position for a genuine hereditary aristocrat; and naturally it was to be work at a level and of a type that were acceptable to the young man concerned. The divisional board, well qualified meritocrats to a man and woman, unwillingly accepted this as the way of the world, but nevertheless waited expectantly for the inevitable failure. However, the opposite happened; he was at least as competent as someone who had never accompanied Her Majesty in her carriage as part of the Royal Ascot procession. And, apart from a vetoed attempt to name a project in which the blue-blood was involved as Project Robespierre (2), that was the end of it.

More normal would be my experience at a large privately owned group where I had, on many occasions, to listen with a straight face as one of the directors, a very impressive figure largely responsible for building up the company to its present size, expressed his total confidence in his nephew being the right man to lead the next stage of the firm’s development.  Public discussions with the hired help notwithstanding, obviously wiser counsels must have prevailed in private; the group is now being run by the third non-family CEO in succession. At least in that case they would have been entitled to promote a family member had they so wished. It was their company and their money. The most egregious type of nepotism, in my opinion at least, is where the management of public companies treat them as if they were private fiefdoms, with senior roles free to be bestowed on family members. I’m not going to produce a long list of children employed by their fathers whom I regard as over-promoted and not up to the job. In fact I would go so far as to say that anyone in that position is, by definition, unemployable elsewhere. As another old boss of mine (himself the son-in-law of a prominent politician) once put it “If you’re any good, do it somewhere else and prove it.”.

Of course it’s not only businessmen who insist on having family members as their senior lieutenants; criminals do it as well. Robert Maxwell, famously both tycoon and crook, employed two sons in very senior positions, thus rather proving my point. Anyway, the relevance of this is that I initially read the original article about Mr Caan keeping it in the family because I thought it was actually about the actor who played Sonny Corleone. The Mafia, at least as portrayed by Mario Puzo and Francis Ford Coppola, was as nepotistic a business as one could ever expect to find, but – and it’s a big but – under-performing family members were dealt with just as, er, firmly and terminally as was everyone else.

All of which brings me back to the second newspaper article which prompted this blog posting. In it Mad Frankie Fraser, who has apparently been given an ASBO for behaving badly in his retirement home, gives his excuse for the many problems that he has had with the law during his long and appalling career as a gangster. “I had no help from my family; my father was the most honest man I’ve ever come across, so I had to make my own way.”

(1) Apparently this chap is best known for some sort of televisual game show about business. I haven’t watched any TV program that is even loosely about business since John Harvey-Jones showed exactly how it should be done twenty odd years ago.

(2) See my earlier blog post regarding the semiotics of project names

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Fully absorbed election expenses

‘All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power not truth.’ – Nietzsche

It comes as no surprise that the UK’s coalition government should seek to restrict the funding that the opposition Labour Party receives from the Trades Unions that founded it. The distinguishing feature of the right wing in British politics as opposed to the left has always been its understanding that the only point in having power is to use it. What is perhaps unexpected is that part of what they propose involves recourse to a technical accounting concept: the recovery of overheads.

Now, like all accounting concepts, to the expert practitioner this is a matter of judgement, specific to the situation, rather than a question of unambiguous rule-following. For a while it was the fashion to send staff at all levels on courses entitled something like ‘finance for non-financial managers’.  Pretty much the only thing that ever stuck in the minds of attendees would be the issue of the need to recover overheads and, for a period following the course at least, no meeting would be complete without me receiving a lecture on the need for full-absorbtion costing. I would, of course, simply smile sweetly (no, really) and carry on using marginal costing when it suited me. All of which is a long way of saying that there is no point in arguing about whether costs of printing carried out by the unions should be fully or marginally costed. Firstly, it’s a matter of opinion not fact and secondly, accounting accuracy isn’t the aim of this particular exercise.

What I would say is that the coalition parties should, as always, be careful what they wish for; to what extent will their own practices withstand scrutiny. Does the Liberal Democrats own printing, much of which is carried out in an ‘off balance sheet’ manner that would have made Enron blush, pass on the full cost to be included in their election expenses? And what of the support in kind given by the Tories allies in business? Many years ago I worked for United Biscuits and one of my jobs was to keep the accounts for the company’s aircraft (that’s right, ‘planes plural), the main function of which was to ferry Sir Hector, as he then was, between the various factories producing ginger nuts and hob-nobs. When drawing up the accounts for the quarter including the 1979 general election campaign (quarterly accounts – doesn’t that take you back) I couldn’t help noticing a remarkable correlation between the flight destinations and the political speaking engagements of Jim Prior, who was by chance both a director of UB and a front bench Conservative MP. I raised the question of whether this should be declared as a political donation, my immediate boss agree with me, so did his, and the next one up (we didn’t have flat organisations in those days) and the last of these went off to see the CFO, who unceremoniously threw him out of his office in a blast of Scottish invective. No more was said on the matter. I know this example is rather old, but does anyone really believe that this doesn’t happen today, and on a far more substantial scale.

A long time later, I sat next to Lord Prior, by now chair of GEC, at dinner in Abu Dhabi. He was very affable and very drunk. I didn’t mention the 1979 election campaign.

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