Tag Archives: Banks

The price of leadership: sharing a couch with Robert de Niro

Getting comfy in Noah's Ark

Getting comfy in Noah’s Ark

The other morning, I watched The Record , a programme on BBC Parliament which gives a daily run-through of key events in Westminster.  Obviously, the interview with Bob Diamond by the Treasury Select Committee featured, and if we were to tag the keywords, leadership was certainly the big hitter.

Questioner after questioner asked Mr Diamond about how he viewed his responsibility for running a company that had behaved so dishonestly.  He was asked if he was complicit or incompetent when he said he knew nothing about such mendacious practice. He was challenged about how bad it had to get before it floated to the top of his inbox and he saw the incriminating emails.  ‘Did your staff not feel able to tell you about this?’ was the question from one incredulous MP.

He argued that once he knew of the mal-practice he dealt swiftly, i.e. he sacked the traders. He was asked what he could do now to reassure the public about the value of the Barclays brand.  He was challenged quite a lot about his stand on culture and how he had not spotted that his culture was going bad. His rebuttals about it only being a small amount of staff etc. were rebuffed and so the questions went on for three hours.

He might have garnered some sympathy had he not continued to refer to the MPs by their first names. In a formal situation, with them calling him Mr Diamond, his persistent use of John, George, Andrea rankled and did him no favours. It certainly didn’t help his apparent credibility. Did he learn nothing from the Fred the Shred debacle?  Leaders must be credible. Weasel words and beating of breasts will not cut the mustard. Mr Diamond failed to acknowledge his duty;  a favourite word of mine and one that needs to come back into fashion.  Indeed, I was so pleased to hear it used on the Radio 4 programme The Moral Maze that I stopped ironing and sent a tweet. (What a choice, ironing or tweeting!)

Personally, I am very proud to be leading a growing organisation, albeit the size of a pin head compared to Barclays. I worry a lot about checks and balances, and how you know that what you say on the tin is still happening when you get further away from the front line.  It must be much harder for a larger company, and I often wonder how places like Sainsbury’s manage. On paper, it’s about things such as leadership, systems, operating manuals, key people practices (hiring, induction, performance management and training), communication and engagement with all customers and staff. In reality, it’s about all of that – but mostly it’s about trust and culture. On that matter Mr Diamond is right.

So, what to do?? Give up and run for the hills?  Mr Diamond can do this with the £95m he has paid himself, but it’s not such an option for the rest of us mortals. You could question and worry to such a degree that you might end up on the psychiatrist’s couch. It might be worth it, if only to join the Billy Crystal school of analysis and end up sharing the couch with Robert de Niro.

Diamond in the rough: a tale of banks, culture and high performance

Well the bankers are in trouble again. Is it a case of money corrupts? Poor Bob Diamond (former CEO of Barclays Bank). Last year he proudly announced that culture is the most important thing in an organisation because it is what people do when no one is looking.  He said that bankers must always operate in a way that brings the best service to customers. He looked like he was leading a ‘good bank’.  Aside from the political impact (now evident), it must have galled him to know that some of his staff lost sight of this culture and values when they behaved so dishonestly.

According to Patrick Lencioni in his book The Four Obsessions of an Extraordinary Executive, culture is set by the leader; it has to come from the top. In another book, How Finding Your Passion Changes EverythingKen Robinson describes culture as a means of creating contagious behaviour by embedding the attitudes and behaviour that are acceptable and unacceptable across the organisation.

Funnily enough, I spent last week reflecting on our own culture at LEYF with my fellow directors. We have always known that culture is critical, especially when growing an organisation: staff need to ‘get the vibe’ and, without even thinking about it, know what behaviour and attitudes are the LEYF way. We summarised our three cultural behaviours  as  Nurture, Excellence and Innovation.  This culture then has to align with the core values of the organisation.

These words sum up a whole set of behaviours that are designed to ensure that we are a high performing organisation.  And culture is the behaviour that underpins high performance. Many of us have previously worked in organisations with a culture of underperformance, accepting shoddy work, high absenteeism and lack of care and concern for the customers.  It’s a most de-motivating and depressing place to be for children, parents, staff, students and visitors.

So ‘Nurture, Excellence and Innovation’ sounds good to me, not least as a set of demanding cultural norms:

Nurture is about training, development and encouragement. It’s about supporting positive connections, bonding and bridging.  It is also about being able and willing to deal with poor behaviour. Children who are nurtured and encouraged learn about what is right and wrong, what they can and cannot do.  The same goes for adults.

Excellence is about how we operate our core business. We need to be smart and develop intelligent strategies, marketing plans and financial models which sustain our service and give us a competitive edge. But we also need to be healthy and have the right leadership, support services, communication and engagement that allows us to be top of the class. Children deserve the best so we must give it to them.

Innovation is how we use our action research to reflect on, consider and review what we do and how we do it.  It’s about examining new ways of making things better.  It’s about intelligence, about thinking creatively and courageously about what works and whether it is right.  Certainly a brave culture, but one that keeps us all on our toes.

The challenge for LEYF and indeed any organisation is how to make sure this culture permeates every nook and cranny. It’s feeling assured that everyone gets it and those who want to break the code are held back by the power of the cultural norms. For us, the best way to do this is to…

  • Build and maintain a cohesive leadership team
  • Create organisation clarity
  • Over-communicate organisational clarity
  • Reinforce organisational clarity through people systems

If we get this right we are less likely to end up vilified like the banks, as Allister Heath journalist at City AM says:

Barclays inability to ensure that some of its staff behaved appropriately was a major failing of its corporate controls. People knowingly broke the rules.  Shame on them… Too many people turned a blind eye to the wrongdoings of others. The City’s reputation as a trustworthy marketplace will take years to recover.

No one can afford to get into this mess. So let’s ensure we have the right culture from the start, and at every level.

Read your two year-old a bedtime story, and start to slowly peel off the label of disadvantage before it sticks

This week has just disappeared, and that is partly because I had meetings every evening.  I was flagging by Thursday and was keen to just go home, put my slippers on and watch The Only Way is Marbs.  Instead I went to the launch dinner of Social Business International, and talked about social finance, loans, debt and banks using their balance to leverage more money. It’s a very pertinent issue for anyone wanting to grow their business. Getting capital is not easy.

On the train home, I spotted an article by BookTrust which again points to the important cognitive benefits children gain if their parents read them a bedtime story. Supporting learning in the home is something I am very keen to help make happen.  At LEYF we are examining every step to this at the moment, so we can have a set of measurable inputs that will give us a set of equally measurable outcomes, and so show that by doing certain activities we will support the home learning bridge, to and from nursery.

Doing this is particularly important if we are to get value for money from the two year old programme. It is our tax after all, so we want it to be well used: every child who has the cosy experience of having a bedtime story, snuggled up with their Mum or Dad, instead of having a DVD stuck on the TV is a success. (When I babysit my nephew, we have to negotiate anything between 5 and 25 books; there is only so much Thomas the Tank Engine and the Fat Controller a girl can take!)

Finally, I was reminded how easily labels are applied, and so much harder to remove. (Just think about the dreadful term NEET.) So the Daily Mail surpassed itself this week when it asked you to check Is your child a psychopath?  The journalist had clearly been freaked out by Tilda Swinton in the film We Need To Talk About Kevin. So take heed and watch how we throw around the terms ‘2 year-olds from disadvantaged families'; we are already sticking a label on children who are little more than babies. No amount of soaking in hot water will remove that label if its stuck on at two.

Life can be perfect, so raise a glass of Bollinger to a world of Social Enterprises.

It wasn’t Big Society or social value that got Mr. Cameron out of Downing St to celebrate social businesses, it was money; or at least the draw of it. Big Society Capital, long planned and much mooted by Mr Hurd MP, finally launched; but had it not been for the Prime Minister helping out on the PR front, it’s unlikely many social enterprises would have even noticed.

Of course, there is no doubt we need risk and working capital in the same way that any business does. But how will this shiny new opportunity work? Essentially, Big Society Capital (BSC) is a wholesaler which will lend to social investment finance intermediaries (SIFIs), who will in turn lend to social businesses at a slightly lower interest rate than your average High St Bank. I can only hope that spending on both BSC and all the SIFIs will be kept to a minimum, or the £600m available will soon be frittered away; I also hope that the lending process will be attractive and accessible, and sensibly match the interests of socially motivated investors with the need for capital in the social sector.

At LEYF we have been investigating how to get investment to repeat our model across London for some time now.  We certainly found a lot of rhetoric that did not translate into any meaningful investment; partly because many investors just don’t get social value as a part of an investment return, else the offer to businesses was considered so risk averse that it simply was not viable.  Our real breakthrough was winning a contract to work with the Social Business Trust (SBT) which has brought together six large businesses which cover all elements of investment, finance, business management, communication and compliance.  For us, this has led to us being treated like a proper client, and with the offer of serious money to inject into a thoroughly considered and fully costed growth strategy.  As the team making it happen, SBT get the three elements right: social, business and trust.  This last element, trust, being the actual glue that enables us to form the kind of relationship that will allow real growth, expansion and business sustainability.

I hope the launch of BSC will allow for more SBTs, and the more we use this means of investing for growth, the more confident we will become in the market place. There is of course a risk that smaller and lower economic value businesses will not attract funds through BSC. Nonetheless, it still represents a genuine opportunity for some larger mainstream public sector services to enter the market. The key fact to remember here is that social businesses are set up to respond to a market need, but in a way that adds explicit social value. And if we want to increase this value, we have to saturate the market with social enterprises; and investment can help with this. As Bollinger, sponsors of tomorrow’s Oxford and Cambridge Boat Race,  proudly declare “Life can be perfect”; and so it can, as long as we have the chance to raise more glasses and celebrate a social enterprise takeover in today’s capitalist society.

Getting down to business: survival tactics for any good social enterprise

It’s always interesting to meet television journalists up close and personal – and that’s exactly what I did on Wednesday, when LEYF Chair of Trustees, Tim Willis and I went to an Acevo Leaders to Leaders lunch.  Robert Peston, Business Editor at BBC was the speaking guest, and I had booked the lunch some time ago, as I had got used to using the Peston daily bulletin to keep me appraised of the unfolding economic drama back in 2008, and I was keen to hear his latest economic analysis, along with his take on the way out of the mess.

Once there, it very quickly became clear how Peston lives and breathes business economics. It was like being locked in a room with an Early Years obsessive!  He pontificated on the 20 years of unprecedented recorded growth, the lending and borrowing boom and its abrupt end in 2007/08, the shrinking bank balance then replaced by a huge growth in the public sector balance sheet.  He described this as the biggest event in his career, one that catapulted him into the limelight; a place he seems eminently comfortable in.

I was very keen to hear his economic predictions.  He started by telling us a lot of what we all know too well: Economics is not a good science and we have to look to history for some guidance; and globalisation creates global problems, but we have national governments, so it is hard to find a balanced way to either respond or influence. In effect there is no quick way out of this.

He continued to predict a less optimistic growth rate than Mr Osborne‘s anticipated 2-3%, suggesting reality is more likely to be nearer 1%.  He reminded us that debt is still 180% ratio to disposable income, whilst the big cost of the bank bailout debt equated to £5000 for every person on the planet.  The most horrible fact was that despite all the cuts, repayment is making little more than a tiny chink in the debt. The reality of economics is that we won’t know if Osborne is doing the right thing until it’s too late.

So his survival tactics were:

  • Read his blog (but only after you read mine first!)
  • Know your own market
  • Know your industry in astonishing detail
  • Find ways to mitigate inflation, the increase in food and utility costs and unemployment
  • Teach people about managing their money as surprisingly few people understand how money works (a fact borne out by a conversation with the Finance Team at LEYF who noticed the same)

The lunch concluded with Preston advising us to re-think our approach; getting smarter and more efficient, whilst supporting the private sector to develop more jobs.
So that means we continue pushing staff to grow occupancy and collect fees on time, we increase the introduction to finance that our CRLD team has introduced for our apprentices, and we take more apprentices to help them into work.  We will also push for a project with A4E to support parents in managing their money and limit the risk of debt.

It was a useful lunch and one which reaffirmed the need to develop, implement and insist on business practices designed to reduce reckless financial behaviour at every level; if left unchecked, this simply puts everything and everyone at risk of disaster.

At LEYF, our core business is delivering daycare for 1500 children each year in our 21 community nurseries; but our core business approach must be working to secure these; and financial rigour is right at the very heart of it.

Social franchising and the LEYF Experience

For those wonderfully supportive people who follow this blog, you may have noticed a gap in production; this is because I have been staying in the Shropshire Hills for a week.  It’s a place where I have no phone or internet network and, like many young people, I have a real sense of disconnect as I come to terms with being unable to commune with anyone except my husband and the Shropshire Hills.

The challenge of any blogger is choosing what to blog about; there is just so much irritating rubbish and nonsense that it’s hard to know what to opt for. And those who know me well will soon enough attest as to how I can rant about almost anything – lousy childcare, poor use of tax payers’ money, overblown tributes to poor services, Children’s Centres with nothing except some anecdotal stories as evidence, litter and the sense that no one cares if we ruin our own environment, apprentices and the failure to give them an education of real value, organisations that think they can be a social enterprise just by saying they offer a social value… But enough already, before this list itself turns into a rant!

The trouble with being away with only your thoughts and a mountain of books to read is that you have time to think – and in my case the woes of the world soon begin to weave a misty dissatisfaction into the crevices of my mind.  However, on a more positive note, as I am so often starved of quality thinking time in my daily job as Chief Exec of LEYF, being able to wallow in ideas and thinking like this is a great opportunity.

So, with all this glorious time on my hands, what are the questions I ponder most?  First of all, it’s if we at LEYF can really build a better future for London’s children: to what extent and how exactly does what we do everyday in our soon-to-be 22 community, workplace and Children’s Centre nurseries truly make a difference?  Can we then bottle this into a social franchise model that will genuinely work for others, offering a real alternative that is not just the ‘next big thing’ for social enterprise to do – and can we avoid the cynicism that followed the previous trend that saw so many organisations convert to CICs as a good way to brand as a social enterprise, a pattern now being pursued by some public sector organisations?

Having spent over a year examining social franchising as a means of growing our organization – with the simple aim of giving as many children as possible the ‘LEYF experience’ – we realised that replication through franchising is a very challenging and demanding strategy for growth. This is confirmed in the books about commercial franchises, such as McDonalds and Starbucks (two quite different approaches, each equally successful); such is the varied nature of my reading list!

However, LEYF has never been an organisation to let a bit of doom and gloom stand in the way  of progress, let alone social good; and personally I have always been a glass half full girl, taking an optimistic and positive attitude to most things.

So, rather than give up at the first or second hurdle, we started to look into new ways of understanding the full range of options in front of us.  Surprisingly, a bank then came to the rescue, in the form of six staff from RBS who are now helping us draft a robust business plan.  This has also strengthened our relationship with the bank; a position which may prove beneficial later on as we unpack the much-loved government ideas of payments by results, along with social impact bonds. At the same time, our relationship with our prime supporter, Middlesex University, remains strong and interest from policy makers heartening.

As we start to now roll out the franchise plan itself, we remain pragmatic (this has not become one of my rants quite yet); there is history in the sector which suggests franchising has a habit of collapse, whilst sustainability and quality issues naturally abound.  As with all new ideas (or new configurations on existing ideas), there are resistors, antagonists and a level of contention and competition; and where would we be without the harbingers of doom?

In fact, aside from confronting all the gloomy predictions, ensuring we cross every ‘t’ and dot every ‘i’ will be the only way forward if we are to have a strictly controlled franchise, both in line with our own industry legislation and covering every possible issue surrounding intellectual property.  On an even more practical level, and so perhaps most critically, we have to make sure the manual is absolutely perfect and the fee correct: we have noticed many failed franchises never set a correct fee and so have quickly become a drain rather than an asset.

So, we are interested in your thoughts about social franchising as a means of social replication.  Is it of interest to you?  Does it hit your rant list?  Would you do it?  Would you recommend it?  Would you want to be a LEYF franchisee? Would you come to a franchise tea party – does it have a Mad Hatter appeal?

As always, I love to hear your thoughts… so feel free to rant, blog, comment or simply share.

Children’s Centres: A Way Forward

This has been an interesting week or so for the sector…

Firstly, Graham Allen MP (who spoke with such conviction about Early Intervention at our annual Margaret Horn Lecture in November) finally launched his much anticipated report at the Gherkin.

It was a room full of bankers and Early Year’s people – and I was most amused to realise that I knew quite a few of the bankers. We have been working with bankers for some time, in the hope of developing a social investment plan to extend our training programmes for young apprentices. However, the event did remind me of a wedding – the groom’s family in one corner and the bride’s in the other, with no one sure how to bridge the gap and mumblings as to whether this partnership would last (a comment also made by Graham Allen himself who recognised the challenge of developing social impact bonds).

The deputy Prime Minister, looking quite boyish, confirmed the commitment of the coalition Government to Early Years and social mobility, whilst assuring us of the need for investment in a fairer society. My only real concern here is the use of the phrase ‘school readiness’. While I know that every child has to be ready and able to succeed at school, I do hope that we also want to give children a happy childhood, because that is what so many of them are really missing.

Elsewhere this week, ACEVO invited Sarah Teather, Minister for Children and Families, to breakfast.  Here she presided over the launch of a very special taskforce – including yours truly, amongst several other experts from across the sector.  Our task it transpired is to support the Minister in converting the government’s objectives into a coherent vision for Early Years.  Sarah Tether appears keen on the principle of co-production, a concept very familiar to us in social enterprise.  However, like most modern jargon, it’s a clumsy expression that obscures good intentions, namely to work alongside people and get their views as part of a process of contribution and mutuality.  It’s a great approach for people like me who enjoy talking and networking with colleagues.

On my return to my own lovely team, I was able to reassure them that charities such as the Children’s Society, Action for Children and Spurgeons all struggle as we do – with complex contracts and barriers to commissioning.  In the spirit of the Big Society, it seems that sharing, connecting and linking together is the future, one of which I particularly approve.

On this very subject, last week we put our own head above the parapet and urged everyone else to do the same – with the hope of ensuring that if Children’s Centres were to close, the right ones would be chosen for the right reasons, and those that were needed would remain. The response has been heartening, particularly from parents and those professionals who really believe in finding the means of supporting children from poor and vulnerable families. Sadly, there are still too many people working in the world of children and families who have remained ominously silent.

Nonetheless, it would appear that our long-held belief that Children’s Centres should be intergenerational is finally gaining support. We are now working with Gulbekian and the lovely Beth Johnson Foundation to start testing our model.  We hope that once we begin to articulate a specific and successful approach, more people will believe as we do, that this is the way forward for us all.  This certainly fits with the notion of Big Society, and so has the backing of many senior Government ministers and Lords of the Realm.

We must remember that an intergenerational approach is more about attitude than the simple idea of having a building where older and younger people have services; to be truly intergenerational means to engage and form relationships across the generations, which in itself is not just about the very old and the very young but every generation in-between.

With this in mind, I invite you all to devour, discuss and share our ‘Ten Steps to a Sustainable, Intergenerational Children Centre’, part of our broader review of recent research relating to the current situation, ‘Children’s Centres: A Way Forward’.  As always, I welcome comments, challenges – and more ideas!

Instead of shimmering with the particular energy of disaffection (Alexander Pope), let’s take last week’s call to arms and convert this critical debate into positive action.

[gigya src=”http://static.issuu.com/webembed/viewers/style1/v2/IssuuReader.swf” type=”application/x-shockwave-flash” allowfullscreen=”true” menu=”false” wmode=”transparent” quality=”high” scale=”noscale” salign=”l” flashvars=”mode=mini&titleBarEnabled=true&shareMenuEnabled=false&documentId=110127185815-b72c4d68288446aba4ca97cd29f634b6″ style=”width:420px;height:272px” name=”flashticker” align=”middle”>]

Comprehending spending reviews

So it finally happened.  And as predicted, the Comprehensive Spending Review proved little more than a combination of handy, bite-sized headlines with little meaning for us until next year’s allocated spend. The only winner in the end was the press, thanks to a ready set of horror stories, shock polls and human tragedy it will no doubt devour and reuse for the foreseeable future. Someone please save us all from the poorly analyzed reports which frustrate rather than inform, only serving to create more anxiety among the unfortunate, susceptible souls that we are.

In reality, we will not actually understand the true meaning of these cuts until early next year, when local authorities and other government and corporate contractors begin to prepare their own plans for 2011. So whilst we may be able to frame our own budget preparations within a 10 to 15% scale, we still have no real information about how the powerful budget holders will shape their real world requirements.

Until then, while all this ringing of hands is going on and people are pressed to respond and give their views, the banks are quietly preparing their bonuses and payouts and no one says a word. Have I missed something?