Stop the Clock - I Want to Go Back
Efficiency: The Alternative View
This was written by JACK CHEAM, in response to THE EFFICIENCY MYTH.
I read your piece several times to work out exactly what it is about or trying say. In the end I decided it was directed at no one in particular and that it was more a soliloquy reflecting your feeling of distain for modern management trends and nostalgia for an imagined time past. I also detected a public sector perspective which is unsurprising given most of your high level employment has been in the public sector.
The content is an amalgam of humour, social comment, nostalgia, economics and organisational development. How should I reply? I have decided to take each theme in no particular order and to comment on the subject contained therein.
Monty Python was satirising the silliness of the day but interestingly not much has changed. Gone is the Ministry of Funny Walks to be replaced by the equally annoying and ubiquitous blight of gobbledygook job titles and management speak.
You are rather pejorative of accountants but they have been around for a long time be they the shepherd counting sheep for his master using a stick and a knife or the modern financial specialist managing global transactions that impact on all our lives. It would be true to say that some accountants seem not to have developed much beyond a knife and stick system (and I have met a few) but by and large they serve a useful purpose keeping financial records and managing the flow of funds to organisations, individuals and the exchequer. Accountants don't grow or make beans. Very few occupations make anything these days but that doesn't mean they don't add value to the society. For example, what does an Assistant Director for Partnerships and Early Intervention (an actual job vacancy) or other strangely titled jobs do more than an accountant in the scheme of things? By the way, accountants are rarely the driver of organisational restructuring; they don't have the imagination for it.
JOBS AND EFFICIENCY
You appear to be saying that employment is a zero sum game; in other words for every job lost the sum total is reduced by one. This may to be true to some extent at an individual or local level but at a macroeconomic level it is a false assumption for the world is evolving and whilst jobs of one type are disappearing new jobs are emerging.
The problem in the UK is not so much the sum of available jobs but the increasing number of UK people incapable or unwilling to do those jobs. In the common vernacular we have skill shortages, not job shortages. The sustainable way to solve this problem is not to hold on to low level jobs or outdated occupations but to train and educate future generations to meet the challenges of a changing world. Were we able to fill our own high skill and even low skill vacancies then maybe the immigration pull would reduce. Let me go on to your postman argument which applies equally to the meter reader or milkman.
In the days of our youth the postman would bring letters, bills and orders to domestic and commercial premises. These days he mostly brings junk mail which by and large is not time sensitive. Much of our communication both domestic and commercial is conducted on line. If I use my own company as an example, almost nothing is conducted via the postal system except mailshots and the odd official letter where hard copy is required. Given the content of the average delivery it matters not one jot whether the mail arrives in the morning or late afternoon. If a pre-9.00am delivery is imperative, and very little is, it is available albeit at an extra cost. Given the reality of mail content these days and if costs can be reduced by moving my delivery of junk mail to later in the day: go ahead.
THE METER READER
The meter reader is an interesting example of technology and displacement. Again in the days of our youth a man in an official looking cap would knock at our door to come in and read the meter. These days' people are often out or at work so we have moved to self-reading our meters with the occasional official check to see if we have been telling the truth. Of course, this is now becoming an anachronism for it is only a matter of time before the meter is connected to the internet so no one need read it. We will then simply receive an electronic bill which will automatically be paid by our bank. That is progress and the meter reader like the TV repairman and other door to door jobs will be consigned to the history books. Are we better or worse off? The answer depends on your point of view but for sure it is more convenient.
EFFICIENCY PER SE
It is efficiency that changed society from a mostly peasant agrarian economy to the modern life we currently enjoy and moan about in equal measure. It was more efficient methods in cultivation that enabled a peasant population to move away from agricultural drudgery to more interesting occupations or in many cases industrial drudgery. It is also true to say over the years it is efficiency in manufacturing and innovation that has released many from the shackles of industrial drudgery for more satisfying work in less physical and more cerebral occupations.
Of course the fruits of the efficiency revolution are not equally distributed for some enjoy interesting and well paid work whist others are confined to dull low paying jobs or no job at all. However, these dull, low paying jobs from a developed World perspective are immeasurably better than those available to earlier generations.
The cost of inefficiency is plain to see in many third world countries where inefficient farming methods can barely feed the indigenous population. It is only necessary to look at the Robert Mugabe economic transition from the food basket of Africa to a nation on the verge of starvation. How did he manage this miracle? Simple: he broke up the huge but efficient white run farms and turned them into inefficient smallholdings managed by untrained occupants. The result was a catastrophic step back in time.
When I started work the usual working week varied from 42 to 45+ hours, my working week was 45 hours. These days the average working week in PAYE employment is around 35 hours and that is a 20% reduction in the working week, ignoring overtime. This working week mostly applies to those in unskilled or non-managerial employment where overtime is paid or where there is little incentive in the form of career or financial advancement to do work beyond the contracted hours. Many, though not all, low level employees, understandably have little interest in their job or opportunities within that job beyond earning a living. Most in such jobs put in their allotted time and go home, finished or not. It has been that way as far back as I can remember.
Aside from the employee on fixed hours there is a large number of up and coming professionals who are keen to advance within their chosen profession and who by choice put in many extra hours to achieve career and financial goals. I am one such individual. Who is to say this is wrong, generally the aphorism that you get out what you put in has some truth. Of course, when working late into the night one's effectiveness will diminish. So what? If a task is completed to a deadline, albeit at diminishing rate of efficiency, the objective has been achieved. This is not new; high achievers have been doing it for centuries.
CONSOLIDATION AND SOCIAL RESPONSIBILITY
I have no public sector experience so I will restrict my comments to the private sector. In the commercial world, activities grow and shrink and management has a responsibility to adapt accordingly. When markets mature they generally decline and thus the organisational structure put in place during the growth cycle is no longer viable in a period of contraction so the organisation must adapt or go bust. Typically it will look to consolidate its activities in fewer sites with fewer people. This is a sensible strategic option but not always an easy or painless one. Different organisations undertake such consolidation with varying degrees of success; I have been involved in quite a few.
You might argue this is socially undesirable which of course it is for it can devastate employment in a dependent area. However, if the organisation fails to adapt to market conditions, it will fail as a whole with far greater social consequences.
Changes in commercial fortunes are fact of life and have always been so. It is impossible to protect everyone from the vagaries of markets, politics and acts of God. We should not forget individuals have a responsibility to adapt to change and that heimat is not an excuse for the abdication of personal responsibility. Of course there are exceptions where an individual is old or infirm but individuals in the prime of life should endeavour to adapt to a changing world.
This has been going on for a long as I can remember. After the war the common moan was about the textile industry migrating to Asia and how those greedy machine manufacturers had ruined the industry. This was true but was it such a bad thing? Textile mills in those days were very unpleasant places. I know; I have worked in them and their departure to foreign shores was no bad thing for all concerned. The recipients got economic opportunity and the departure of the dark satanic mills made way for new and more socially desirable industries, but I accept that the transition was difficult at a local level. Lancashire is a better though less interesting place for the loss.
The national strategic concern today regarding offshoring is the erosion of the manufacturing base and the dependence on unstable countries for essential manufactured goods. This concern applies to all western economies. Perhaps our politicians should be giving this some thought rather than petty concerns over the constitution or membership of the EU.
I am no fan of consultants and I have involuntarily had to deal with quite a few of the years. I think there are two type of consultant:
i. The good consultant is the task specific expert you bring in to help you manage a specific task outside your organisation's experience, for example setting up health and safety systems or helping in specialist areas of employment. They do a job and then clear off until you need help again.
ii. The bad consultant is the charlatan who is employed by an organisation on nebulous matters such as motivation, team building and all sorts of other fashionable hocus-pocus. By and large these people are a waste of time and money and if you need such charlatans perhaps you should consider getting a different job.
From what I understand the preponderance of consultants earn their living in the public sector.
Speculators are the common bogyman to the ill-informed. They come in many forms, for example there are the speculators who deal in futures. Such speculators may agree with a farmer to buy the crop at a certain date and at an agreed price. This gives the farmer financial certainty subject to yield enabling him to make business decision he might otherwise need to postpone. It also reduces the farmer's financial risk as a glut year may easily crash the price leaving the farmer in financial difficulty. The risk of loss or the opportunity for gain is taken up by the speculator and where the speculator pays forward the farmer has access to working capital to run his business. Now in my book that is adding considerable value to the farmer.
Currency speculation is another misunderstood economic activity. A simple example of the role of the financial speculator is as follows:
A manufacturing company takes a very large order from, say the USA, and this contract priced in US$ is scheduled for delivery and payment 12 months from order. Now the manufacture has no idea what the exchange rate might be in a year's time. It could easily move in either direction by 25%. Manufacturing companies are not gamblers, nor can they afford to take the risk of a large fall in the relative value of the dollar. Therefore what they do is sell their projected dollar income forward to a speculator (usually the bank) who accepts for a fee the risk of loss or gain. The speculator to reduce his risk will try and cross match his dollar transaction with a corresponding sterling/dollar transaction. Without such a service, manufacturers would be unable to export so in my book that is adding value.
It is also true to point out that in addition to the above services banks and hedge funds simply gamble on exchange rates and commodities to make a profit. In such cases it is harder to see the contribution to society except that the speculators do occasionally contribute to the exchequer and they do provide the liquidity to the trading businesses.
Another common belief is that forex speculators are always financial giants in the world's financial centres such as the city of London however that is only partly true. Many are individuals pitting their wits against the system for much smaller returns. Modern technology has opened up this market to all, although I suspect technology will again move on and make it more difficult for the smaller player.
An amusing and folksy tongue in cheek article but not one for the serious student, although perhaps right for its intended readership I have perhaps gone over the top (I usually do) in my response to what you set out but the exercise was good for my brain and I quite enjoyed writing it. I hope I haven't sent everyone to sleep but rather energised them to respond in kind.