The release of the Legatum report today which attempts to define the World’s Most and Least, Prosperous countries in economic but also social-economic terms was timely to say the least.
Coming a week after the UK’s government CSR statement the Legatum index shows us that delivery of National benefits in this case, well being are not judged solely in financial terms but in terms of quality.
Writing in today’s Wall Street Journal former UK trade minister and European Commissioner Lord Peter Mandelson reminds us that:
“To use economic measurements alone to gauge the success of a nation would be equivalent to assessing the entire condition of a man simply by looking at his bank balance. True enough we may discover whether the man is rich or poor but we learn nothing about his character, his enjoyment of life, the state of his health, the quality of his education or his attitude toward the people around him.
The limitations of measuring a country's prosperity using economic indicators alone were explained by Senator Robert F. Kennedy in 1968, during a speech at the University of Kansas. He said this:
". . . Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage…It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl . . . Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials . . . it measures everything, in short, except that which makes life worthwhile."
The inadequacy of money as the lone transformative power for lasting national prosperity has been affirmed over the last 30 years by the failure significantly to reduce poverty in the poorest nations of Africa, despite record levels of financial aid. The message is simple: Financial aid on its own is not enough. A country needs more than just wealth to be prosperous. It needs to endow its citizens with basic human freedoms, for example those that come from a safe water supply, a roof over your head and the ability to hold politicians to account for these and other essentials of life. It needs to educate its children and take care of its elderly. It needs to develop a society in which people trust one another. It needs to foster a climate of entrepreneurship and innovation. None of these are achievable without the rule of law and strong, democratic governments”
Peter Mandelson quite rightly, (never thought I would ever write that) highlights the challenges of governments around the Worked how can we deliver financial savings but at the time ensure “well being” and service delivery. This is classic benefits realisation modelling which escapes many governments, public and private sector organisations.
The concept of the conversation in the UK for the last 6 months has been about “cuts” Financial cuts with the consequence of the effects of those often not defined or if anything like most projects often ignored. No one has actually started the conversation with “We are going to deliver services, better and cheaper and as a result meet our financial targets” The reason being that it is easier to deliver the savings as you stop doing things, you stop recruiting staff, you stretch maintenance targets, you delay financial capital expenditure, but what are the long term “social” or unquantifiable benefits in the long term?
Let take an example would be delaying a PFI School rebuild will have knock on effects on social well being, the quality of pupils, teachers and parents life and of course see an increase in “revenue” expenditure as you patch and mend the old fabric of a falling down school.
Leaders within the public sector have to widen their search of brave decision makers who can look beyond just “cuts” but be innovative in ensuring that service provision improves. There are a number of ways this can happen, outsourcing, joint ventures and shared services are just a few examples of areas where big savings can be made and service quality improved at the same time.
I will however heap praise on two announcements in the past 24 hours which as restored my faith in measuring benefits and outcomes from a decision. The first by Vince Cable in outlining the new “UK state pension” proposals which come from a fully costed business plan in which both financial and social benefits have been outlined. The second being the campaign called www.lighterlater.org for later daylight savings where a fully costed business case with financial, soci-economic and environmental benefits have been outlined. Both great examples of change management business cases which would tick the boxes in Lord Mandelson’s criteria and mine for great benefits plans.
The leadership of this innovation and change is crucial. From my own experience in the 1990s of being a senior manager in British Rail (BR) is that those who left BR under early redundancy are those who get jobs elsewhere. The majority who remained were those denying change ever happened. I heard one commentator suggest that those being made redundant could undertake the change management and benefits realisation. This thought took me to Christmas or Thanksgiving and asking the Turkeys to prepare the stuffing!
I remember in 1994 when RailTrack was formed there was a dash to their door by my managerial colleagues who saw them as organisation whose management were broadly similar to BR who was a safe haven and a return to old BR days. And look what happened to RailTrack! The innovators, the people who embraced change went onto lead rail MBOs and lead prIvate sector railway companies.
So when planning the change management process lessons can be learnt from those who have seen the change management fall apart because too much reliance has been placed on internal functions delivering change.
The challenge for organisations undertaking change are:
- Drive out financial savings and enhance service provision
- Identify financial benefits as well as social benefits and plan to know when you get there
- Identify the resource need both internal and external to deliver sustainable savings and service improvement.
Peter Mandelson article can be read in full at :
http://online.wsj.com/article/SB10001424052702304388304575574000872990256.html?mod=WSJ_latestheadlines
Contact the arradvark at www.fifthconsultancy.com
Contact the arradvark at www.fifthconsultancy.com
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