Right now, talent shortages probably aren’t high on your agenda, but they will be sooner or later.  That demographic bubble of retiring executives and directors isn’t going away.  You’ll need all the talent you can muster in the post-credit crunch world.  So why are half the population substantially less represented in the upper echelons of management and in our boardrooms?  UK economics columnist Tim Harford writes:

Flick through any copy of the Financial Times and you’ll see a lot of chaps in suits. There’s a reason for this: there are many more men than women in the boardrooms of the world’s great companies. Explanations range from the politically correct (women are held back by the oppressive patriarchy) to the sexist (women aren’t up to the job).

While I accept that some gender-bias still exists, I’ve actually seen very little of it in the businesses I’ve known. I have heard all kinds of suggestions for the lack of women in corporate board rooms, such as women aren’t as competitively-minded as men, women prefer working in smaller businesses, women aren’t ruthless enough to be effective senior executives, and other hogwash.  My own experience, now backed up by Tim Harford, tells me that there’s a much simple explanation:

[Economists Lawrence Katz and Claudia Goldin], with Marianne Bertrand of Chicago’s Booth School of Business, have now produced a new study, examining the experience of Booth’s MBA alumni – a high-flying group from whose ranks one would expect future CEOs to emerge. The outstanding feature of this research is the very detailed data available on this group: their pre-MBA experience, the courses they took and the grades they earned, their career progression afterwards, and the timing of their families. Women did achieve worse grades, and avoided hardcore classes in finance: but the differences were tiny. Far more important was what happened when children came along. If you look only at promotions and earnings, childless women are all but indistinguishable from men. The moment children arrive on the scene, a big gap opens up.

“The penalty for career interruptions is huge,” Bertrand told me in a recent interview. New mothers are derailed from the fast track in investment banking or consulting, and their potential earnings fall by about 40 per cent.

It’s really simple; the fundamental reasons that there are significantly fewer women than men in boardrooms are because fewer women have both the desire and the experience to be there.  Babies interrupt high-flying women’s careers, often just at the time when they otherwise would be at their peak of executive development, gaining vital management and leadership experience with rapidly increasing responsibility.  To exacerbate the issue, a significant number of mothers do not return to the workforce, or return with changed priorities such as not over-committing to work, which unfortunately is usually a prerequisite if you want to reach the top.  Hence we have a significantly reduced cadre of women still on the career track to the top.

So what  can be done?  I doubt we’ll overcome the changed priorities of many ex-fast-track mothers (nor would I want to), but we can support those who do want to rejoin the fast-track. Firstly, let’s accept that women have as much potential to be in the boardroom as men. We can, within the limits of practicality, provide family-supportive workplaces, part-time work, etc, so women with children can keep on track.  But the most important action we can do with returned mothers (and the few fathers who take that route)  is the same we do with the men and women who don’t take time out for families - give them bigger responsibilities, and stretch them.  If they’re up to it, if they deliver results (and like men, not every woman has got what it takes) then you’ve got another potential executive or director in your talent pool.

I’ve done several company makeovers, always with a weeding-out of existing management whom I’ve replaced with a combination of new hires and bright talent from further down the organisation.   Working mothers have often been part of that new leadership team, and I’ve rarely been disappointed by their performance and subsequent career track.

Update: Supporting statistics from the UK.

The finalists for the 2009 NZ HiTech Awards have been announced:

PwC Supreme Award NZ Hi-Tech Company of the Year

• Compac Sorting Equipment www.compacsort.com
• Fisher & Paykel Healthcare www.fphcare.com
• Orion Health www.orionhealth.com

IRL Emerging Company Award

• BookIt www.bookit.co.nz
• Sentient Software www.sentientsoftware.co.nz
• Sonar6 ww.sonar6.com

Enatel Innovative Hardware Product

• INRO Technologies www.inro.co.nz
• NextWindow www.nextwindow.com
• Times-7 www.times-7.com
• Vesper Marine www.vespermarine.com

Recruit IT Innovative Software Product Award

• Biomatters www.biomatters.com
• Massive Software www.massivesoftware.com
• Mobile Commerce www.mcom.co.nz
• Orion Health www.orionhealth.com
• Sonar6 www.sonar6.com
• Straker www.shadocms.com

HiFX Innovative Service Product Award

• Sonar6 ww.sonar6.com
• Truescape Visual Reality www.truescapevisualreality.co.nz
• Xero www.xero.com

Endace Young Achiever Award

• Andrew Graham
• Alain Richardt
• John-Daniel Trask

SwayTech Hi-Tech Journalist Award

• Anthony Doesburg
• Keith Newman
• Divina Paredes
• Tom Pullar-Strecker

Outstanding Individual Contribution Award

• Milton Bloomfield
• Scott Gilmour
• Dr Claire McGowan

Outstanding Industry Initiative Award

• Digital NZ www.digitalnz.org
• eDay www.eday.org.nz
• The Distiller www.thedistiller.org

We judges now have to select our category winners, who will be announced at the Awards Dinner in Christchurch on 1st May, 2009.

A final reminder to submit your entries for my “weird and wonderful REAL business phrases” competition, which I’ll close a week today. Last week’s entries:

• To fire: an archaic verb meaning to lay off, make redundant, make someone leave to pursue other opportunities, restructure, realign, let go, downsize, consolidate and so forth; strange old word - not often used but very effective.
• Burn rate: the amount of negative cash flow a company (usually a start-up) generates each month.
• Seagull manager: a manager who flies in, makes a lot of noise, craps over everything, and then leaves.
• Chainsaw consultant: an outside expert brought in to reduce the employee head count, leaving the brass with clean hands.
• Herd the cats: has several meanings 1) trying to achieve the impossible, 2) trying to achieve consensus 3) trying to stop silos working in isolation; ED: attempting to get unity of purpose from people who wilfully or otherwise do not want to cooperate.
• Blamestorming: a meeting where you all get together to figure out who is going to get the blame.
• Staff engagement: a term used to describe a meaningless survey by senior management of how much staff buy into their BS or not.
• Social marketing: Lance Wiggs has no idea what it means, and suspects that most social marketing experts have no coherent idea either.
• Executive sheep dip: an expensive 6 week course at an upmarket university business school, intended to prepare promising middle managers for promotion to senior executive roles.

A counterpoint to yesterday’s post, courtesy of Cloud Ave:

IT people are enthusiasts, generally speaking.  They grab hold of a new interest or idea or technology, try it out, and if it  works for them, they become passionate advocates for it. Yet, despite their enthusiasm, many IT people remain balanced and open to the pros and cons of their preferred solution and others.  I have investments or relationships in most of the areas I’m going to mention today; for example, I’m an investor in Microsoft and Apple because I like their products and businesses, even though I use Opensource and Cloud applications on a Linux-operated netbook.  Unfortunately, some IT operatives and commentators become increasingly one-eyed in favour of their chosen way and blind to the merits of others, further inflamed if the object of their disdain does anything untoward.  I’m reminded of the unthinking political zealotry and bigotry shown by the more rabid members of the left and right.

This isn’t a new phenomenon:

• IBM v. the seven dwarfs IBM (Burroughs, Univac, NCR, Control Data,  Honeywell, GE and, depending on where you were, RCA or ICL)
• Mini-computers v. mainframes
• PCs v. everything
• Opensource software v. licensed software, especially Microsoft
• Apple v. Microsoft
• and now, Cloud computing v. on-premise computing.

Fortunately, more balanced viewpoints exist. In recent days, I’ve seen several commentators telling Cloud computing enthusiasts to come back down to earth.

Alan Moore at Definition:

... most customers would never sign up to these solutions if they really understood how shonky most start-up solutions are. The risk of committing to a service that has been designed badly is even greater with a cloud application, and the problems will always occur after you’ve entered all your lovely data.

Even when the solution has proven its worth customers have no protection against the commercial activities of their service provider. What happens if they are sold, merge or acquire other companies, what happens if the business model doesn’t stack up?

I know most of these issues will be sorted out and for them to succeed I’m sure the good companies will rise to the top but there is another risk to those customers… Trust me it’s hard enough to successfully move data around your own computer room never mind from a data centre in Minnesota to one in Kazakhstan through two companies who see themselves as competitors. While still trying to carry on your normal business activities of course.

In “Cloud computing evangelists are high on the fumes of their own vitriol“, Paul Quickenden from Unreasonable Men argues that many organisations will keep using managed or in-house private data centres:

In my opinion most [folks] will be in private and hybrid cloud space due to the enhanced security, [service agreements] and control it offers. There are also strong economic benefits. Some things will never shift out of the firewall [in-house IT network security barrier] .

I too have my prejudices.  I’m a proponent of Cloud computing, not because of any technological bias, but because I have a bias toward “Lean Business”.  Unless I’m in those businesses, I don’t need to own a phone company, I don’t need to own a trucking and logistics operation, I don’t need to own offices, I don’t need to operate a factory, and I don’t need to build and own IT.  None of which says I can’t have unique business concepts and processes for competitive and economic advantage.  I just need to buy the services which deliver the business outcomes I want.  So Cloud computing fits neatly into my worldview.

But I’m realistic. Large institutions eg. banks and government agencies, are unlikely to shift wholly to the Cloud for decades, although I disagree with “Some things will never shift out of the firewall“.  Never is an awfully long time!  If Cloud computing fulfils its promise - and accommodates such things as location-based imperatives for data storage and processing, easy transfer/backup, organisation-specific front ends and multi-provider application integration - if it can do all those things and be economically viable and trustworthy, then most organisations may not need anything more, except for embedded intelligence (eg in machinery and network equipment).

I’ll leave the last word to Dennis Byron at eBizQ:

The cloud is the intersection of a lot of very well researched and applied information technologies, some of which are up to 50 years old … Cloud computing is not “the next big thing.” It is “the first big thing” finally done right in the sense that all the stars are now aligned to deliver on the promises of the 1960s.

We often make decisions based on the evidence in front of us.  That may or may not be a good thing.  What about the evidence that we don’t see? Freek Vermeulen, writing on the Harvard Publishing website, gives an example of drawing the wrong conclusion from the evidence in front of you.

During the Second World War, engineers looked at the damage caused by enemy fire on returned aircraft and increased protection in those areas of the plane most hit.  That was completely the wrong thing to do. Damaged aircraft were able to return to base if they were hit in non-critical areas.  Aircraft hit in critical areas didn’t return, and it was those unknown critical areas that needed reinforcing.  The evidence in front of the engineers not only was insufficient for a right decision but also led them to make a wasteful decision.

What’s the vital evidence that you don’t have?

A few weeks ago there was outrage in New Zealand over the loss of a small government clothing contract to China.  Do you think those same people will now insist that ANZ Bank should not transfer 100 call centre jobs from Australia to New Zealand?  Silly question - we all know the answer.

One of the perpetual challenges faced by anyone trying to do business across borders is the volatility of currency exchange rates.  Manufacturing exporters in particular become extremely agitated when their country’s central bank hikes interest rates to cool down inflation at home.  Higher rates usually increase the value of the home currency, which reduces the profit on exports and even kills off businesses.  Life is a lot simpler if you sell Italian washing machines in France and Germany with a common currency.  It’s no surprise that exporters are fans of common currencies like the Euro.

Take that to its logical conclusion and there is a case for a world currency, although macro-economists generally pooh-pooh the idea - fluctuating currencies are an important tool in their armoury - and national politicians have other agendas including national pride and international one-upmanship.

For many decades, the US dollar has been the world’s reserve currency, the one by which all others are measured, and the one most used for international trade.  It was with some surprise that I read this morning that China’s central bank has proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund. Zhou Xiaochuan, the governor of the People’s Bank of China, proposes a reserve currency “disconnected from individual nations and … able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

It’s a nice idea, but I can’t see either the USA agreeing to it - they get too much business from being the de facto reserve currency - or the Europeans - they have similar ambitions for the Euro.  Still, one can always hope; the newly dominant Chinese might just be able to pull it off in the reforming aftermath of the credit crunch.  And while it wouldn’t immediately solve the problem of fluctuating home currencies, over time a global reserve currency would quickly become the standard medium for international trade and then the pressure will mount for countries to adopt it as their real-world currency.

However, observing the reluctance by some countries to adopt the Euro, a global currency has many obstacles to overcome, so I’m not holding my breath in anticipation.

Imagine meeting some friends and casually dropping into the conversation that you’ve started a power company. That was the scenario at this month’s Vista Group lunch, and it neatly illustrates how the Internet can enable very lean businesses to be built.

The cost of power delivered to your home or business is made up of various components:

• A wholesale energy spot price per kilowatt-hour - what the electricity costs to generate at any time; highly variable (it changes every half hour in NZ) and driven by demand, supply, the weather and the cost of generation, fuel, and alternatives such as wind and water availability.
• A hedging component -  basically averaging the cost of wholesale electricity to the retailer and you; those nasty derivatives being badmouthed in the media are actually useful financial instruments in real commerce.
• A variable transmission line cost for moving the electricity from the power generating station to your area.
• A variable distribution cost for local distribution from the  transmission substation to you.
• A fixed distribution cost - to cover the cost of simply being connected to the network and having capacity to supply a basic level of supply to you.
• And finally a retail margin for servicing you, the customer, and taking care of all of the above.

When I ran a power company, that retail margin was less than 10% of the price of electricity, from which you had to cover your wholesale market operations, hedging costs, customer service costs, metering costs and make a profit. With industry reform, the transmission and distribution businesses were separated from the generating and retail businesses. The inevitable outcome was that the only players in electricity retailing were power station owners - the generators.  Everyone else exited the retail business because the margin was just too thin to cover all the costs of running a pure retail business and make a profit.

Until now, that is.  If your customers can service themselves via the Internet, all you need is a website and an ability to buy “delivered electricity” inclusive of all the other costs of supply - a facility now offered by some generators.  The collaborative stance of generator-owned PowerShop was a key factor.  Vista Group member Natalie Ferguson is part of a small team who cut a deal with a generator and built a web-based electricity retail business in just 3 months! Even though the retail margin today is even less than when I was in the industry, it is now possible to make a buck, because the business costs little to build and little to run. (As an aside, PowerShop has surprised many web-savvy business people with its heavy TV advertising.  Good PR would have probably been more effective and a lot cheaper; deep pockets are not always good.)

Web-based electricity retailers like Flower Power and stable mate Green Power are almost the ultimate in lean businesses, since they will compete on branding, product design, price, user experience. etc. without actually generating or delivering electricity, and with minimal live human staffing. It’s too early to say which, if any, business models and strategies will work, but what is clear is that businesses like them probably wouldn’t be built without the Internet.

Just a quick reminder to submit your entries for my “weird and wonderful REAL business phrases” competition. Entries so far:

• Bucket shop: from the seaside bucket and spade shop, became a term for back street resellers of cheap holidays and air travel, often of dubious quality and notorious for travellers encountering difficulties; now means any dodgy sales operation.
• Boiler room: a high pressure telephone sales operation which flogs shonky shares to investors; often associated with organised crime.
• Dead cat bounce: after a heavy fall in share prices, a short-lived lift in prices, which then fall back to the lower level again; from the phrase “even a dead cat bounces.”
• Safe harbour has several meanings, eg: a warning that projections are subject to risk, standard practice in US listed company announcements; a statement regarding data confidentiality as per EU/USA joint code of practice.
• Come to Jesus meeting: a meeting where your boss gives you the blunt message to “shape up or ship out.”

Some days ago, I shocked you with the news that half of you are below average; yet I was prepared to make a small wager that, in just about any organisation, the average staff appraisal assessment is some synonym for “above average.“  In the same vein, I’d be prepared to make a small wager that, across all mid- and large-scale companies who undertake some form of payroll planning (and they all do), the average target salary range is “above average” too.

At pay review time or when you’re hiring someone, you need some idea of what the market rate is for your people.  Most mid-scale and large organisations subscribe to  one or more pay surveys relevant to their industry, location and job types. While you’ll have some stretch for lesser or superior skills and performance, your organisation almost certainly has set its job pay bands with midpoints linked to some benchmark percentile of market pay rates.

• “We pay upper quartile salaries to attract and retain the best talent in our industry;” translation: midpoint set at 75th %ile.
• “We pay competitive market rates;” translation:  midpoint set at 50th %ile.
• “We want above-average people who can deliver above-average performance;” translation: midpoint set at 65th %ile.

Outside of startups (which use equity deals to attract people), I can honestly say that in all the years I’ve been a manager, executive, director and advisor, I have only ever seen or heard of one established mid-size or large company that deliberately set out to pay below average market rates. They offered something else attractive - basically sun, fun and sex!

While it’s possible that bigger firms pay better than smaller ones on average, it also tends to be bigger firms that participate in salary surveys, nullifying that bias.  Add all participating organisations together and I’ll bet that their combined target pay rates are above the market average.

Tracking the market has a ratchet effect, with employers chasing each other up in payroll costs. At first glance that looks great for employees, but it isn’t great for shareholders, customers and taxpayers, unless those increased costs are met by increased real value-add (productivity).  Instead you get inflation and increased business failure. When the government issues an edict to its departments to lift pay rates to attract more IT staff as employees, it gets a temporary lift in recruitment, but the long term effect is simply to drive up the average cost of IT people across all sectors. As Stephen Franks points out, the ratchet effect is a major factor in top executive salaries too.

Right now it may not be a problem for you, but times will get better, and then watch out! Unfortunately, I have no easy solution.  Just be aware of the danger in blithely tying your pay rates to some market benchmark.

Night cricket, rugby and soccer have all transformed sport.  How about night sheepdog trials?  Courtesy of Mike Riversdale, here’s an ad from Samsung which might transform the evening vista in the hill country of Britain, Australia and NZ.

Capital Chronicle alerted me to a very informative interactive synopsis of the state of the EU economies from the English language version of NRC Handelsblad. Click on the graphic to go there.

Busy day today. As well as chairing a board meeting, I’m judging one of the categories in the 2009 Hi Tech Awards, and there are rather a lot of entries. Finalists in each category will be announced on 26 March, and the winners will be recognized at a gala dinner in Christchurch on 1st May. Until then, my lips are sealed.

You have booked your tickets, haven’t you?

Nigel Lawson, the former UK Chancellor of the Exchequer, writes in the Financial Times:

That capitalism has been shown, in practice, to be endemically flawed should come as no surprise. That is the nature of mankind. What is more important is that history, notably the history of the world after the second world war, has demonstrated beyond dispute that every other system of economic organisation is far worse. So capitalism both deserves to survive, and will survive, just as it did after the even greater economic disaster of the 1930s.

It wasn’t capitalism per se that caused the credit crunch, but rather a more specific failure in the banking system.

… In a nutshell, we need to return, in all major financial centres, to the separation of commercial banking from investment banking that was enforced in the US under the 1933 Glass-Steagall Act, until it was repealed by President Bill Clinton in the 1990s.
… It is folly to allow core banks to be in a position where they can be brought down by exciting but highly risky investment banking activities.

Lawson cautions against too-specific regulation of investment banking.

… the idea that this can be prevented by judicious regulation of investment banking activities is a chimaera. In the real world, that is not possible: either the investment bankers will outsmart the regulators, or the regulators will respond with damaging overkill. Thus investment banks should be left to their own creative devices, and subject essentially only to the discipline of the marketplace. 

On other words, let investment banking continue to be the innovative, high risk business that it is (perhaps with a simple barrier to investing based on net worth as with venture capital), but keep the mainstream banking system insulated from IB failure. Regulating mainstream banking then becomes very much simpler.

This leaves a much more limited, and practicable, but still absolutely essential, role for bank supervision and regulation: namely, to ensure that the core commercial banking system is thoroughly sound and adequately capitalised at all times.

Lawson makes a very constructive contribution to the debate on what to do with the banking system.  He also address one problem with high street banking, namely bank lending fuelling excessive consumption and house price inflation.  Interest rate hikes failed to dampen house prices, and those rate hikes also caused perturbations in the wider economy. Remember all those cries from the provinces and manufacturers about being punished for the excesses of the main cities’ home buyers. Lawson suggests that rationing loan money is the better way to go.

… it is the capital adequacy regime, and not primarily interest rate policy, which needs to be responsive to asset-price bubbles.

Bank lending is funded by the combination of deposits and equity (bank shareholders’ money).  If the capital adequacy level is raised, banks must either get more shareholder money or reduce lending. Fewer interest rate movements, more stable currencies, and greater certainty for depositors, home-owners and businesses; why hasn’t this been done before? Political and regulatory inertia, perhaps? Or is it too specific an intervention for politicians and central bankers? That would be bizarre amidst all the talk of increased regulation!

Unfortunately, I suspect that, rather than go for simple straightforward solutions such as Lawson suggests, legislators will attempt to micro-manage the banking system - a doomed endeavour.

I’ve decided it’s time En Avant had another competition  The focus this time is weird and wonderful real business phrases. The language of business, like any human activity, contains some amazing slang and euphemisms; for example:

• Haircut: the difference between the value of an asset and a loan secured by that asset (eg. a house is worth $1m, the loan is $800k, so the haircut is $200k)
• Taking a haircut: accepting a loss in capital value, especially on sale of an asset, but still remaining viable
• Taking a bath: Suffering a substantial loss of value
• Washing your face: Breaking even (revenue covers expenses)
• Usine à gaz: French for ‘gas factory‘, an unnecessarily complicated, large and expensive activity
• Krisha: Russian for ‘roof‘, a sponsoring organisation or patron for your business.

Competition rules:

• Must be real business phrases or euphemisms, ie. actually in use
• Must be able to cite a credible web-accessible reference source for obscure or foreign language entries
• No offensive or slanderous entries
• No personal attacks (so no made-up entries attacking the politicians you love to hate)
• Competition ends when you run out of ideas or I get bored
• Prize for the best entry is the acclaim of the readers of this blog, and maybe a drink if we can meet
• I’ll make up and change the rules as I go along
• I’m the sole judge and arbiter of the rules

Our lines are open awaiting your entries!

“How does a Kiwi businessman get a million dollars? Give him a billion and wait.”

After the 1987 share market crash and its aftermath brought down several high-flying New Zealand entrepreneurs, my Australian acquaintances took great delight in telling me endless variations of that old joke. Today, the latest Forbes’ Rich List of the world’s billionaires is being greeted with snide satisfaction in the boardrooms of New Zealand.  At #110, the richest man is Australasia is Kiwi citizen and resident Graeme Hart, respected for his astute acquisitions and large-scale turnarounds. Oz-born, but officially now a US citizen and New York resident, Rupert Murdoch is #132.  The highest ranked Ozzie citizen, Frank Lowy is way back at #234.  Schadenfreude isn’t the right word, but it’s the nearest I can think of.

PS. The Ozzies will claim bragging rights over a US citizen living in Australia who tied with Hart at #110, but of course that doesn’t count!

For a forward-looking contemporary perspective on the current economic and business situation, take 10 minutes to read what valuer investor James Berman has to say in “Report of the Death of Equities: Greatly Exaggerated“.

For those without the time, let me remind you of some much earlier but still relevant advice:

If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;

If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:

If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;

If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build ‘em up with worn-out tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;

If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’

If you can talk with crowds and keep your virtue,
Or walk with kings - nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;

If you can fill the unforgiving minute
With sixty seconds’ worth of distance run -
Yours is the Earth and everything that’s in it,
And - which is more - you’ll be a Man my son!

- Rudyard Kipling

Yesterday, I looked at assessing people for past performance and future potential:

How well did you perform?

1. Significantly and consistently below expected level
2. Below expectation in some aspects
3. At expected level for someone with your experience, training, remuneration, grade, peer group and time in the role
4. Above expectation in many aspects
5. Outstanding; consistently and significantly above expected level

What is your future potential?

1. None; future outside the organisation
2. Less demanding role
3. Current or similar role
4. Next level of responsibility and continuing progression to higher roles
5. Next level of responsibility with rapid progression to significantly higher roles

Using these two ratings, I map my team on a grid like this:

The different box sizes are deliberate.  Hopefully you only have a few people whose performance is sub-expectation or whose potential is a lesser role or outside the organisation!

The point of doing this is to focus on the people needing your attention.  Your aim is to build a team coloured Green and Blue. Sadly, the Reds and the Oranges tend to get most managers’ attention (especially the high maintenance category of high performance/outside potential: superstars constantly threatening to leave) while the Greens and Blues are neglected.  It should be the other way round!

• Reds: Get them out now!
• Oranges: Transform them to red or green, quickly. Don’t muck about - fix fast or fire!
• Blues: Do what you said you’d do and these people will drive themselves. You’ll see them a lot anyway because they are your stars.
• Greens: This is where your attention should be.  They’ll respond to your increased time and focus on their ongoing development, they’ll be quietly glad you sorted out the people who held the team back, and some of them will turn into Blues.

PS. There’s a useful online talent management tool called Sonar6, which does a nice job of capturing all this and more, eg. reviews and action plans, remuneration mapping, succession planning, etc.

People are fond of castigating public servants in Parliament, the media, and in the pub.  Today my eye was caught by this cri de coeur from an anonymous public servant:

…. Years of habit and cover-your-arse have developed a generation of public servants who live by meetings, committees and reports. And a bunch of auditors who NEVER say “it was pleasing to see that processes were not followed unnecessarily, thereby saving the taxpayer X million dollars”.

So here’s the thing my fellow citizens. In a democracy you get the government you deserve.

There are lots of us that want to get on and make things better. But we’re never going to do it while these beat-ups carry on. When people like the over-worked probation officer …. stuff up, bear in mind that that event is going to result in a plague of new paperwork that probably won’t make any practical difference….

…. Because only when the normal, sane, silent majority …. make themselves heard will we start to unravel all the crap law and policy that has built up like fat in a middle aged artery over the last twenty years. We need to be able to sprint at the moment, and it just ain’t happening.

Now I just need to wait while they hunt me down…

I suggest you read the full text; you’ll pity and admire the poor soul who’s written it. It’s from NZ, but it easily be from Britain, Australia, North America, indeed anywhere; and I’ll bet it’s already pouring into public service email inboxes across the world.

I’m no fan of bureaucracy, but neither do I blame public servants.  Most want to do a good job, but are stifled by rules, political correctness and the realities of operating in a environment of blame. I’ve written before about the need to reinvigorate the public service ethos and its sense of purpose and utility.  An organisation’s true attitude to its purpose, obligations, processes (and its use of money) is driven not by compliance, but by the culture and learned behaviours of the people who work there. They learn those from the demonstrated behaviours of their leaders (managerial and/or political) and the feedback they receive from the public (and the media).

We want an efficient and effective public service; given the chance, many public servants want that too.  It’s time for a new way; maybe the current parlous state of the world can be a catalyst for positive change.

Disclosure: I am on the board of the NZ Tertiary Education Commission, which coincidentally is currently considering the elimination of a large number of jobs, but the views I express are my personal ones, and not necessarily those of the TEC.