“KISS” – Well done Sir Phillip
Having met Sir Phillip Green three years ago as part of the process of winning the Bank of Scotland Entrepreneur Challenge it was easy to see why he is so successful. His ability to cut through the detail and identify the real issues and opportunities was inspiring. I have met numerous leaders of large organisations but Sir Phillip clearly came across as being in a league of his own in this regard.
It was therefore interesting to read his report in public sector spending published last week http://download.cabinetoffice.gov.uk/efficiency/sirphilipgreenreview.pdf
With the impending publication of the Comprehensive Spending Review this report clearly highlights that enormous savings can be made without impacting on front line services and without impacting on public sector jobs.
The thing that jumps out at me is the fact that Sir Phillip has stuck to the Keep it Simple Stupid (“KISS”) mantra….there is no technical jargon in the report and any manager worth his salt would be delighted to have access to this report that clearly identifies where to take action to address inefficiencies. There will be undoubted cultural challenges in implementing all of the recommendations and so it is to be hoped that these can be overcome for the benefit of us all.
Other things that struck me were:
- The reference to poor and often inaccurate data. I would guess that there is no shortage of accountants in the public sector so this is clearly not acceptable, although probably not surprising. At MaxAim we come across many businesses that need support in this area and often all they need is a glimpse of a world with improved information to start wondering how they survived “in the dark” previously. To be competitive in these challenging economic times you need to be one step ahead of your competition so having access to reliable, timely management information is vital.
- A lack of ownership of cash. This doesn’t surprise me based on my interaction with the public sector where the mind-set appears to be one of cost budgets being “targets” that need to be achieved rather than being one of many tools to help maximise performance. This issue is also prevalent in many larger corporates with budgets being set based on prior year performance rather than the bottom up approach advocated by Sir Phillip (which is surely the optimal approach). The challenge facing organisations is how to engender a culture that makes people think of the organisation’s cash in the same way they think of their own. In our experience there are three types of mind-set when it comes to looking after an organisation’s cash: (i) those that naturally treat the organisation’s cash in the same way as their own. These people are a god-send and need to be nurtured and developed within your organisation (ii) those that need financial incentive to be effective with the organisation’s cash so having the right bonus structure is critical for these individuals (iii) those that just don’t get it and won’t ever get it!
- £73 for a box of paper!!!??
Inevitably the critics are already out there but we say well done to Sir Phillip. Identifying the issues is only first base but clearly this is a great start.
Hopefully the report will also be a catalyst for private sector organisations to start looking at their own management information and expenditure to ensure that they are well placed to weather the uncertain waters ahead. At MaxAim we are certainly seeing an increase in the number of new clients who prospered in the good times despite weak management information and cost control but are now under pressure from stakeholders to improve in these key areas.