The problem with politics

The problem with politics

We are facing two elections here in NSW, one for the state government, and then federal almost immediately following.

What a mess we are in, disengagement, distrust, cynicism on the part of the electorate, and flatulent promises and claims by the body politic.

The problem is trust.

There is none.

When I apply what I have learnt in 45 years of commercial life to this problem of trust in politics, I come up with a few simple observations.

Lack of strategic clarity.

There is no consistency between the claims and stated objectives of each of the parties and the experience of those who will be voting. The same party cannot even get their messages consistent between the state and federal levels of the parties, so why on earth do they think we, the electorate will believe their conflicting, fatuous and hyperbolic messages.

No accountability.

As a director of several companies, there are rules that apply that demand truth be told to shareholders. Clearly these rules do not apply to politicians as they talk to their stakeholders, we, the electorate. I would be dragged into court if I told the sort of porkies, used facts selectively and out of context, and generally failed to answer any question in a substantive manner,  the way politicians do as routine. They take credit for good things over which they had no influence, and blame the others  for any outcome that can be painted as poor. They are simply unaccountable for their promises, there is no sanctions on them beyond the cliché about the ballot box being the ultimate sanction.

We feel scammed every day as a result.

Governance, where is it?

The governance of government, and political processes generally, leaves a lot to be desired. It is appropriate that there are rules about the manner in which public money is spent. However, when the rules get in the way of common sense and equity, while leaving gaping holes through which the scammers can swim, it can be seen as a system that favours those in the know, at the expense of the rest of us. It is also the case that when  you regulate something, by definition, behaviour not captured by the regulations is OK, irrespective of the morality of the behaviour.  This can be clearly seen in the case of the financial services cesspool uncovered by Royal Commissioner Hayne. 

To be fair, public governance is a massive task of strategic and moral leadership,  and there are bound to be missteps, but we need to be better than we are, by a mile.

As a final observation, these people cannot govern themselves, why is it then so strange that we do  not trust them with the wider task of governing the rest of us?

Absence of cross functional collaboration.

When it is clear that the right hand does not know  what the left is doing, and seemingly does not care, why would we trust either? This not only applies to the functions of any individual government, but to each of the three levels we are burdened with, overlaid by the federated structure of states we are left with from colonial times.

We could not design a model better able to stuff up just about everything they touch if we tried!

The only antidote to all of the above is leadership. The sort of leadership  that takes responsibility, offers a compelling vision of the future and articulates a credible path towards it, is prepared to take difficult decisions and argue the logic publicly, then lives to be accountable for it all.

Pity there is so little of that going around.

 

Cartoon header credit: Again, Hugh McLeod at gaping void nails it!

 

What will happen after the Hayne report goes off the front pages?

What will happen after the Hayne report goes off the front pages?

 

Following the rather cynical post last Wednesday asking where the blame would be placed when the Royal Commission dust has settled, it seems only fair that I be prepared to stick my neck out to make some observations and suggestions, rather than just chucking stones.

•   The root cause of the malfeasance is the huge pot of money accumulated via Australia’s superannuation and various tax policies. Such juicy pots are always going to attract the sharks, therefore the oversight has to be that much more rigorous and transparent. APRA and ASIC have clearly failed in this arena, perhaps predictably as their resources have been progressively ‘trimmed’ by both sides of politics and the capability and motivation gap between them, and those setting out to get their noses in the trough, is significant.
However, we should not throw them too the wolves, rather we should give them the tools and leadership to do the job they were set up to do, and by world standards, have done pretty well to date. I am not so sure of the commissioners recommendation to establish an oversight body, as it seems that another bureaucratic level will just add to weight of bureaucracy for little value.

•   The complexity of the system has led to confusion and opacity of an advanced order. It is within the power of governments to set about reversing the trend. It will take a long time, and needs some level of bi partisan support (there I go again, dreaming) as any change will necessarily create losers. Those who have made decisions based on current rules must not be disadvantaged. The current proposal of the Opposition to change the dividend imputation rules is both stupid and immoral, and they should be whacked for it. However, if they must, make the changes but grandfather the current arrangements, as they are proposing to do with negative gearing.

•   We can spend all the money we like on so called ‘Education’ without much return. Increasing the average level of financial literacy during school years is sensible, but not an antidote to the cause of the problem, system complexity. Public broadcasting perhaps has a role in producing ‘infotainment’ similar perhaps to the ‘Checkout’ program on the ABC, but unfortunately, those in the most need of the information delivered are too busy watching some cooking or renovation show, and increasingly avoiding the ads by paying for bingeable streaming services.

•   The rorts have largely originated with the obsession with revenue, rather than the longer term outcomes. This is a function of our fixation with short term returns as measured by stock prices. While the pressure for short term performance will not go away, it is the responsibility of boards to ensure the longevity of the assets they are managing on behalf of shareholders, so it is therefore also their responsibility to manage them despite the inevitable short term fluctuations. The AICD should be taking a lead role in this, by both being very noisy which will be uncomfortable for them, and by providing quality longitudinal research that demonstrates the value of a longer term perspective upon which boards can build strategy with the strength to withstand the prevailing ‘short-termism’.

Last week the Wentworth Group of concerned scientists released their damming (forgive the pun) report on the progress of the Murray-Darling Basin plan. Like most such fact based research this will be lost in the welter of press releases, appearances by ‘deeply concerned’ politicians, and hubris, while nothing changes. Similarly, The Henry Review, the major report into Australia’s future tax system chaired by the then head of Treasury, Dr. Ken Henry, released in 2010, has been largely ignored or grossly mishandled. No wonder Dr Henry took the money and ran to the NAB, from which he will now exit in the near future. The list of examples goes on.
My point being that the bleating, hand-wringing and pontificating following the Royal Commission about doing better will make little progress in the face of political partisanship. The only exception I can recall that breaks this mould is the investigation into Institutional Child abuse, a damming report on the collective morality of our institutions, which has been met with bi-partisan support.

As a community we must not let the Hayne report be shelved, or used as a political football. Intelligent, fact based consideration needs to be given not just to the contents of the report but to the wider questions of the causes of the problems, and development of strategies that will deliver continuing prosperity to our children.

 

Header cartoon courtesy David Rowe and the Financial review.

Who gets the blame when the Financial Services Royal Commission is distorted and ignored?

Who gets the blame when the Financial Services Royal Commission is distorted and ignored?

The release of Royal Commissioner Haynes final report into the Financial Services industry has been instructive in many ways.

One that will not get much media coverage is the manner in which the various political and interest bodies respond and reflect on their own part in the mess. By contrast, every person watching the various commentary will immediately come to a conclusion about the trustworthiness of those in whose hands is the commentary on the report, and the formulation and implementation of the means by  which the eggs will be unscrambled.

The refusal of Royal Commissioner Hayne to be a part of the governments spin job by refusing the treasurer a handshake for the cameras is instructive. It could be passed off as a bit rude, the reflection of a personal relationship  that needs some repair, or simply a reflection of Justice Haynes absolute lack of  faith in the goodwill of the Treasurer and the Government.

It would be surprising if it was not the last one.

On being interviewed on the ABC later that night, the Treasurer refused to answer the simple question ‘Was the Government wrong in voting against the establishment of the Royal Commission 26 times?  Followed with the equally simple ‘was it the threat of a backbench revolt that finally led the Government to agree to conduct the Royal Commission?’ 

We live in a complex world, ruled by a voracious appetite for the product of an ‘always on’ media, which has responded not by reporting facts, but  by supplying more shallow, opinionated, uninformed and juicy grist for  the mill.

Added to which politicians of all shades pick and choose selectively the numbers and quotes that reflect their established positions, ignoring anything else that might get in the way of a press release.

It is not the media’s fault, it is ours.

We no longer value truth, facts, and a contrary fact based opinion, although we crave them all.

The outcome is that we assume when a public figures lips are moving, they are either lying or blaming someone else.

The only solution is the implementation of what Ray Dalio would call ‘radical transparency’. 

Photo credit: ABC news

 

The cost of a fact free media

The cost of a fact free media

EEEERRRRHHHHH

Excuse me, I just threw up on myself after being assaulted by another ad by a fat billionaire exhorting me to ‘Make Australia Great Again’ by voting for him and his dodgy party.

That nasty experience got me wondering about the nature of advertising in the digital world.

While we have people in Canberra who still think that regulating for diversity in media ownership is a thing on which they should  be spending time, Google, Facebook , and Alibaba (the latter almost exclusively in China) have sucked up 62% of the worlds digital ad spend of US 327 billion, last year.  Bringing up the rear is a rapidly improving Amazon, aggressively chasing a bigger share of this largess. These huge numbers leave what is left of the rest of the media, particularly the ‘old media’,  scrabbling to pay the rent.

The owners of the ‘Old’ media which interrupted me with the ad that started this thought are no doubt pleased to have the fat billionaire as a paying customer. Their priority is to  get the dollars in any way they can, to pay the rent, not make judgements on the veracity of the claims made by their advertisers. Facebook also faces this problem of fact neutrality, magnified geometrically by the reach and ‘stickiness’ of the platform, combined with its capacity to target and deliver messages to a very specific audience . 

However, our society has been built, at least to some extent, on the foundation of a free and diverse press that has the funds and bottle to be the ‘policemen’ of the standards and performance of those in power, political and corporate.

These media businesses have largely disappeared in the last decade, overwhelmed by the shift of advertising dollars, the foundations of their business, to digital outlets.

This has left the place without any police.

Look no further than the 2 recent Royal Commissions for any evidence you may need. If it was not for Kate McClymont, and a very few other investigative journalists with a passion for the truth, and the now defunct Sydney Morning Herald, these two rocks would not have been kicked over. The roaches hiding underneath would still be free to engage in their brand of hyper-hypocrisy, with most of us unaware of their corrosive and immoral activities.

Advertising funded investigative journalism via a neutral and responsible press is almost dead in this country. Without it we are deprived of the major driver of publicly minded behaviour.  We want, and need corporations to be publicly minded, to act in the best interests of  the community they serve. However nice those words may be, the officers of corporations are charged with the responsibility to deliver shareholder returns, and generally they do so without reference to the long term public good. The corollary is that personal agendas, and greed,  also get a very solid run.

We have conferences and forums where these corporate officers and politicians tell us what they are doing for us. However, the reality is they are mostly reading from a PR script, while attending a firefighting conference that only invites arsonists.

Advertising is increasingly becoming a tax on the poor, those who cannot afford to pay to be ad free. All this does is add weight to the confirmation bias we all have by removing any contrary voice that we may have seen and heard in the past.

That emasculation of media, the demise of a broad based, investigative and community minded press has consequences for the amount, type and quality of public debate, none of which I like.

Cartoon credit: Hugh McLeod at gapingvoid.com

How can a bureaucracy be intelligent?

How can a bureaucracy be intelligent?

 

Bureaucracies evolved as a means to assemble and deploy the resources necessary to do a job.

As organizations grew, so did the bureaucracies that supported them grow in sympathy. Somewhere along the way, size gets in the way of efficiency.

An organisation of 20 people requires an organising template, a bureaucracy of a sort. However, the people all know each other, so the ‘rules’ do not inhibit communication, everyone knows what they need to know and do via the personal networks.

Go to an organisation of 100 people, particularly when they are not co-located, and the social system starts breaking  down, being substituted by communication within the walls of every persons place in the functional hierarchy. We tend to see up and down the silo, rather than between people who need a piece of information.

Once you get to a large organisation, the bureaucratic silos have become impenetrable barriers.

Technology has given us the answer, as used well, it empowers the  personal networks in a highly leveraged manner. However, to be cross functionally successful, the culture within the organisation has to change, as the personal networks cannot break down the silos by themselves. To do that, leadership is required, making it explicit that functional responsibility is no longer the only relevant factor, in fact it is the lesser of  two responsibilities.

The first is to the success of the organisation, measured by the delivery of outcomes, followed  by the functional responsibility.

It is every persons individual responsibility to ensure that those who need the information others  have are in a positon to get it and use it without the bureaucratic silos getting in the way.

Achieve this, and you will have combined the scale that is enabled by functional silos, with the agility of small groups.

An Intelligent bureaucracy!

Wouldn’t that be nice to see?

Do not make resolutions, set goals.

Do not make resolutions, set goals.

It is the morning of the last day of 2018.

Tonight most of us will gather with friends and family, watch the fireworks, have a few sherbets, and consider what 2019 might bring.

Some of us will make New Year’s resolutions.

Things we decide to do to change our lives, some will be tiny, others huge, most will be things we have had in our minds for some time, and new year’s eve is the traditional time to trot them out (again) for a moment of feel-good.

Most will be discarded a few days into January.

If we know anything about resolutions, it is that they fail unless there is a clear path towards the achievement, and usually we call them goals, or objectives.  

‘Resolutions’ are even easier to discard than goals.

To achieve a goal, there are a few simple steps:

  • It needs to be worthwhile.
  • There needs to be a clear path towards the achievement made up of incremental steps that are individually achievable.
  • We need to be committed to the goal. Hope is not a strategy, we need to be serious and commit.
  • There needs to be performance measures along the way so we can see progress, measure what works and what does not, and adjust as necessary.
  • Be public. Public goals are way better than private ones, let others know, and you will be more committed.

Take those steps, and your chances increase.

Some ‘resolutions’ do not fit the typical path above, such as giving up smoking.

Every smoker and former smoker I know failed many times to give up, and giving up smoking incrementally does not work. When I gave up, 35 years ago, I used a simpler method. I did not give up smoking, again, as doing so had failed comprehensively many times, and is a deprivation, something none of us like. I took up ‘non-smoking,’ a practice that had seen me happy and healthy in the past. It worked; it was a positive goal, not a negative one.

Try seeing your New Year’s goals as positives, things to which you aspire, things that make you feel good, rather than focusing on the negatives.

Don’t set out to deprive yourself.

Have a great 2019, see you there.