If public leaders are to be less shackled by bureaucracy and free to operate within broad priorities, what guarantees their integrity? Many managers interpret the imperative to ‘do it cheaper’ as accepting the lowest quote. How many public servants are geared up for the challenge of squeezing the public pound without undermining quality, compromising dignity, marginalizing communities or reducing employment to unsafe levels?

In the delivery of public services, 2011-style localism presents innate conflicts between efficiency and local benefit. GP commissioning groups will be expected to possess commercial skills when negotiating contracts with multi-nationals whilst also delivering on the government’s intention to deliver more services through social enterprise and mutuals in localities.

The dilemma for public leaders and managers is new. On the one had they are charged with exercising sophisticated judgement on commercial issues to an extent even the most hard-headed commissioners have not done before. It’s likely that all organisations with a public function will have an element of trading and services will have to go beyond the current value for money consideration to demonstrate how actual money will change hands and how surpluses will be generated.

On the other hand, the leaning towards social enterprise requires managers to maximise local benefit, where gross value added is only one marker of success, and profits (both monetary and intangible profits such as community pride and well-being) are enjoyed – literally – by local people. This could well contradict the Tesco-style public services utilizing sophisticated decision making and strategic focus provided by G4S, Serco, Capita and the other big boys. Social enterprises contribute £24 billion to the economy and employ 800,000 people but the sector’s capacity is tiny in relation to the £80 billion annual public procurement bill, and a degree of handholding by commissioners is inevitable if services are to be outsourced in this direction.

Either way, delegating the public service function through commissioning demands a depth of judgement which local government officers and civil servants have not previously had to display. Their knowledge of governance structures and ability to scrutinize effectively will be put to the test in the context of workforce reductions leaving a moth-eaten fabric of corporate competence in town halls which can only be repaired in the fullness of time – time which we haven’t got as the recession descends into its second dip.

As a hospital trust board member, I heard much reference to the ‘democratic deficit’ of boards whose members were appointees rather than elected by public mandate. The gap widened with the establishment of NHS Foundation Trusts and scrutiny mechanisms became weaker, despite ‘involvement’ becoming a buzz word in government circles.

Outsourcing public services begs questions about control, propriety and profit. G4S is a FTSE-100 company, the world’s second-largest private sector employer with 625,000 staff, whose over-arching duty is to make profit for its shareholders. It is charged with tackling worklessness in three English regions, delivered through a complex web of brokers and ‘knowledge bank’ agencies. In Greater Manchester, there are nine job brokers and 88 knowledge providers, each with their own leadership, decision making and governance structures.

Services are vulnerable to disruption due to lack of skilled procurement officers. Due diligence for TUPE had not begun weeks before handover of a NHS contract for an addiction service. In Liverpool a halt to child cycle training hit the headlines while two companies “argued” over contract handover. Patients and children had no recourse; they just didn’t get their service.

It’s people, skilled and supported people, diverse people, people who understand ordinary lives who will exercise better judgement and commercially-aware management. People, not systems or machines. But people also need regular servicing, planned overhauls and daily maintenance checks. Just as it’s dangerous to drive with bald tyres, it’s madness to vest major decisions in leaders and senior managers who have no access to coaching and peer appraisal towards the new skillset.

Public leaders at all levels now need a battlefield and balcony mentality – focusing on the important stuff with an overview of the implications. This is more than issuing staff with the corporate values. It’s leading from the top by visibly acting out the priorities and relationships which will lead to constructive places.

• The Chartered Management Institute surveyed 34,000 managers and found that it will take 98 years to close the gender pay gap. The study revealed that men are paid £10,546 more than women on average for the same roles – a gap that has increased in the last year. (Male average: £42,441, female average £31,895)

• The latest Sex and Power report from the Equality and Human Rights Commission calculates that there are 5,400 ‘missing women’ from Britain’s 26,000 top positions of influence. If gender parity existed, half of those posts would be occupied by women (currently 7,400).

• In the political sphere, take your pick: 70 years to achieve an equal number of MPs, 150 years at local government level, at the current rate of progress, according to Counting Women In.

• The Institute of Leadership and Management’s study on Ambition and Gender at Work states ‘progress has been glacial’ in breaking the glass ceiling.

• Lord Davies’ 6-month progress report towards his target of 25% female composition of FTSE 100 boards by 2015 shows that 78% of all board appointments in the period were male.

What is to be done?
A concerted approach from business and government provides the key. The 30% Club comprising company Chairmen advocating and leading by example, David Cameron’s target for 50% female public appointments during this parliament, and pressure group Opportunity Now demonstrate that focusing on the issue should produce results. Member organisations of Opportunity Now have 22% women on their boards, some of which must be attributed to the power of informal benchmarking with peer organisations.
Mentoring guru David Clutterbuck recommends to Boards and headhunters that they reverse the expectation that that candidates already have extensive executive director experience, and argues strongly ‘using non-executive roles as opportunities for senior women managers to acquire the Boardroom experience that will make them suitable for executive director positions.’
Perhaps the UK government could follow Australia’s persuasive compliance methods, whereby companies with over 100 employees will be required in the Workplace Gender Equality Act to provide details of the gender composition of their workforce and board by 2013. Non-compliant businesses will be ineligible to receive government contracts or grants.

References
The Case for Strong and Diverse Leadership Teams www.infrastruct.co.uk/resources
Mind the Pay Gap, Chartered Management Institute, August 2011 www.managers.org.uk/news/female-junior-execs-break-down-gender-pay-barrier
Sex and Power, Equality and Human Rights Commission, August 2011 www.equalityhumanrights.com/key-projects/sexandpower
Counting Women In campaign www.electoral-reform.org.uk/counting-women-in
Ambition and gender at work, Institute of Leadership and Management, February 2011 http://tiny.cc/gender_at_work
Women on Boards 6 month monitoring report, Government Equalities Office, October 2011
www.bis.gov.uk/assets/biscore/business-law/docs/w/11-p124-women-on-boards-6-month-monitoring-october-2011.pdf
Opportunity Now www.opportunitynow.org.uk
Mentoring and the gender agenda, Clutterbuck Associates 2011 www.generalphysics.co.uk/downloads/Mentoring-and-the-gender-agenda-v1.0-Oct-2011[216].pdf
Gender Diversity on Australian Boards survey, 2011 www.womenonboards.org.au/news/media110912.htm

Here’s some of Jo Somerset’s latest tweets…

If you are inspired then follow us and tweet back your views
Just search for ‘Jo_Infrastruct’ on the twitter website or follow the link on our home page.

“Happy cows don’t make better butter” says John Childress in this month’s Director Magazine. “Positive culture is deeper.”

“Women lack confidence, capital & funding at business start-up AND growth, yet women’s businesses don’t fail more often.” Lisa Ford, NatWest

“How do women in business both fit in to the world of business AND stand out as an entrepreneur?” Diane Wright MMU at IoD conference

A shocking seventy one percent of public sector organisations identified a skills gap in leading and managing change, according to a survey by the Chartered Institute of Personnel and Development* , casting doubt on the ability of the sector to adapt successfully to current upheavals. A government manager recently commented that his department is ‘hurtling more slowly’ towards transforming itself. In the private sector, performance management is still the most pressing need (59%) followed closely by change and people management. Whilst budgets are squeezed, investment in the range of practices that amount to an organisation’s learning and development capital is still recognised, topped by in-house development programmes and coaching by line managers. At a time of change, it is people infrastructure and leadership capacity that sets them apart from others in their field.

*Learning and Talent Development, CIPD 2011

These days, it seems everybody from the post room to the boardroom aspires to be a ‘leader’. Who wants to go through all the tedious process-heavy grind and intractable problem-solving challenges that the traditional decade spent learning the ropes at the coalface that management brings with it? This is the age of instant gratification. Professor Cary Cooper of Lancaster University commented on this recent article in Management Today (May 2011) agreeing with the view that the construct of leadership has undermined management’s good name. Cooper suggests that both management and leadership are still needed, we need the visionaries and the enablers in different but closely integrated teams of executives.’

The full article ‘Rebuilding management’s good name’ by Andrew Saunders can be read in Management Today (page 44 of May, 2011 edition).

Since the publication of the North West Women and Work Task Force report in September 2010 followed by the national review by Lord Davies in February 2011 the issue of female representation on the boards of UK companies has continued to be the subject of much debate. 

Balanced boardrooms

There is no doubt that having more women on boards is a positive thing for example ‘there is increasing evidence that having more women on boards can improve operational and share price performance’ (Anna Skipper, corporate governance director, Aviva Investors).

According to Jane Simms (Director.co.uk) research shows that companies with more board level women enjoy a 42 per cent higher return on sales, a 66 per cent higher return on invested capital and a 53 per cent higher return on equity than their rivals.

Most seem to agree that a balance of male and female board members is most successful. For example, as Helena Morrissey (Chief Executive of money management group, Newton) points out in a recent interview with the Guardian (January 2011) ‘men and women can bring different qualities to the table…women are typically more conscientious…men tend to be more focused and goal-orientated’.    

This point of balance is echoed by Steve Green (Head of corporate business, broker division, Zurich) ‘ If we’re going to see large corporate clients in a boardroom, we like to see women. We like to see a balance. That is definitely what we look for when we go to see a customer – to see whether or not we think that they have a balanced, consistent team. We don’t like mavericks, particularly; we like predictability.’

A letter in Management Today by Jo Somerset (Director of Infrastruct) furthers this point (link). Jo talks about the perception of women being ‘risk averse’ as if it were a bad quality and that in fact this may help in 21^st Century UK to restrain men who are ‘ risk reckless’.

Debate on Quotas

However, still ‘at the current rate of change it will take 73 years for women to achieve equal representation ‘ says Stephen Alamenbritis, Equality and Human Rights commission.

As a recent article by whom the Institute of Directors states (Feb, 2011), ‘there is almost universal agreement that the number of women on boards is too low, but there has been argument over the best way to increase the number’.  Vanda Murray OBE (deputy chair of the North West Development Agency and chair of the North West Women and Work Task Force) also points out ‘the current debate about women (or lack of them) on UK boards has been primarily focused on quotas and whether or not they should be introduced? (Insidermedia.com)

The Davies report reveals that out of the FTSE 100 companies, only 13 per cent of directors are female and nearly half of all FTSE 250 companies do not have a woman in the boardroom. The review suggests that FTSE 100 firms should set targets to increase the number of female board members with a view to double the current level. However, the report does stop short of proposing mandatory quotas and instead suggests companies set their own targets for women on their boards for 2015 and that the focus should be on developing talented women as potential board candidates and getting more directors involved in mentoring. Davies concludes that this will not bring the immediate effect of quotas but ‘must be better both for corporate governance and for aspiring women in the long run.’

The main argument against quotas tends to be that they could lead to tokenism.  For example, as Miles Templeman (IoD) points out ‘Quotas would have been incompatible with meritocracy. It was unhelpful that Lord Davies did not rule them out once and for all.’ Other views warn of dismissing quota’s. Jane Simms (Director.co.uk) points out that ‘most of the 89 per cent of respondents to the Davies review opposed to the quotas were women –afraid it seems that appointments under the quota subsystem would devalue women’s contribution. But isn’t this slight possibility infinitely preferable to the current system, which prevents them making much of a contribution at all?’ She argues if we look to other countries such as Norway where ‘4 out of 10 directors are now female since the introduction of quotas in 2008, there hasn’t been a major corporate collapse there.’

Removing barriers

There is an increasing argument however, that whilst quotas may help the numbers of women getting onto boards, they do nothing to help the wider barriers that are preventing women taking up, staying and succeeding at this level.

Helen Alexander (president of CBI) argues, ‘quotas do not address the real issue of how we bring about cultural change.’  It has also been pointed out ‘mentoring and training for chairmen would help to address the psychological barriers that prevent women from gaining board positions’ (Denise Kingsmill CBE, Management Today, February 2011). Vanda Murray (Chair of the North West WWTF) also states ‘lack of confidence and male dominated workplace cultures can be a barrier to women’s progression and access to influential mentors and positive role models can make a big difference.’ Peninah Thomson is the co – founder of the FTSE 100 ‘Cross-Company Mentoring Programme’ and has described the need for such support for women. She states that ‘ it is essential to target senior women in an organisation and find out what it is about the culture that is getting in the way of them wanting to stay. Then set in place whatever change measures are necessary to make it easier for them to stay. If senior women keep leaving organisations, nothing will change. You need people at the top who know what it is like to come through the hierarchy.’

Lack of flexibility has also been identified as a key barrier to women’s ability to progress their careers at the same rate as men. As Melanie Stern who writes for the Financial Director points out ‘flexible working has become more common among business but it has hit the glass ceiling at the partner and board level’. Similarly Vanda Murray argues that ‘ levels of skill, ambition and potential start out at the same level as men, but women’s careers often do not follow a linear pattern and if they slip off the career ladder, they find it difficult to step back on.’

Summary

There is a broad consensus that women’s contribution at board level is good for business, but little agreement about what will be the tipping point for change in achieving this. Against the backdrop of recession and austerity, culture change can be seen as either a luxury or a necessity.

Whilst it’s positive that the debate is still in the public eye, we still await the series of events that will shift the gender balance of power.

References

 ‘ Keeping the Boardroom Door Shut’, Jane Simms, Director.co.uk, edition: April 2011.

 ‘Women in WorkPlace’, Vanda Murray OBE, InsiderMedia.com, retrieved 24 February 2011. 

‘ Editor’s blog: Why the Davies Report won’t make much difference to gender equality at work.’ A blog from Financial Director, Melanie Stern, 29 March 2011.

‘Partnerships: Peninah Thompson and Sir Philip Hampton’, Director.co.uk, ed. April 2011.

‘Women must get aboard’, Denise Kingsmill, Management Today, ed. February 2011.

‘Women must make up 25% of boards by 2015, firms warned’, Zoe Wood, The Guardian, ed. 25 February 2011.

‘Superwoman’s unequal battle: interview with Helena Morrissey’, Tom Bawden, The Guardian, ed. 21 January 2011.

‘The quota controversy’, Edwin Morgan, IoD news, ed. February 2011.

‘Risk taking: damned if we do, damned if we don’t’, ManagementToday, ed. January 2011. 

Just Plain Sense: Why Bother?

FRIDAY, FEBRUARY 18, 2011

Over the last few weeks I’ve been writing about the ‘eco-system’ strategy which our team at NHS North West has employed to systematically drive up equality outcomes in the region’s NHS system.
With the NHS starting to undergo the biggest structural change in its’ 63 year history I plan to write next about how we preserve the advances we’ve achieved and the best practice that we’ve created.

Before that I need first to address the sceptics’ challenge. Why on earth should health professionals and managers care?

Click on the link below to read more;

http://blog.plain-sense.co.uk/2011/02/why-bother.html?goback=%2Egde_2846234_member_44175964

Jo, I’ve just noticed your article ‘Risk-Reckless’ in the latest edition of Management Today and it’s the first article shown. Brilliant and informative!

‘DON’T reject big roles in the public and private sectors.  DON’T…..assume top jobs will destroy your personal life. And DON’T stop having children.‘ Sounds good to me.

Management Today has kept the dialogue going in its January issue.  In a round table discussion on risk, Zurich’s head of corporate business in their broker division, Steve Green, said “I have to say that if we’re going to see large corporate clients in a boardroom, we like to see women.  We like to see a balance.  That is definitely what we look for when we go to see a customer – to see whether or not we think that they have a balanced, consistent team.  We don’t like mavericks, particularly; we like predictability.”

The consensus on risk is turning a corner, and in some quarters at least women are now seen as a help rather than a hindrance.  Some people assert this positive trait in negative terms, referring to women being ‘risk-averse’.  Perhaps we could change the language and talk about restraining men who are ‘risk-reckless’.

Images: Carol Ann Whitehead, The Zebra Partnership

To view more pictures of this event see; http://www.infrastruct.co.uk/gallery/

The article by Andrew Saunders weighs up the complexity of government against the relative simplicity of business, and concludes:

‘Business tactics can help improve service delivery and reduce costs in specific areas.  But, strategically, the operations of state and commerce will remain poles apart.  By its very nature, Government will always be more complex, less controllable and vastly more subject to the law of unexpected consequences than business.‘

Whilst business is driven by the bottom line, providing services for the whole population generates such a multiplicity of bottom lines that it renders the exercise worthless.  To bolster his argument that ‘government isn’t business and it never will be’ he quotes Archie Norman, the only serving FTSE 100 chairman to have been elected an MP: “You can’t just swan in from outside with an opinion and blow the cobwebs away.”

Yet business tools such as adopting targets have usefully been imported from the private sector into public services.  Noting that targets can ‘distort behaviour and their overuse can lead to the creation of half a dozen new problems’, he blames public sector managers for getting it wrong.  ‘Targets are also why, when you call an ambulance these days, the first people to arrive are a couple of paramedics in a Vauxhall Zafira.  They can’t carry the patient to hospital, but they do make sure the Ambulance Service hits its numbers.’

However, at this juncture, it’s Andrew who is missing the point.  It’s precisely because the service has re-engineered its processes and re-defined the core business that we now see paramedics in cars.  The ambulance ‘business’ is to attend to a person’s urgent medical needs rather than automatically take them to hospital.  Many people in fact do not need to go to hospital, but can be responded to in their home and follow up later with their GP.  Rather than tie up expensive resources (a fully-equipped ambulance), and deliver to a costly hospital A&E department, using just-in-time techniques deals with many issues at the site of their occurrence – more efficient, better for the customer, better value for money.

This is one example of private sector tools rather than a private sector mindset bringing benefits to citizens and the taxpayer.