Brexit and Labour’s 2017 manifesto

Some Lexiters claim that the EU treaties will inhibit a Labour Government if it tried to implement its 2017 manifesto. It is argued that the single market would inhibit industrial policy and the stability and growth pact would inhibit macro-economic policy. I don’t think this is so and have written up my notes on my wiki.

The single market does not inhibit an industrial policy, and the stability and growth pact has no enforcement mechanism for the UK. (Another opt-out which we will lose if we leave and seek to rejoin). 🤔 …

Abolish Performance Reviews

I recieved in my inbox an article on Adobe’s experience on abolishing their annual appraisal process. One reason was cost, they calculated it took the equivalent of 40 FTEs to run the process which illustrates the distraction of management time. The article quotes quality guru W. Edwards Deming who says,

It nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics.”

They replaced their previous stack ranking system with a more flexible and empowered system, divorcing formal performance from salary/bonus decisions.

It proved to be more popular with managers and staff, with one employee reporting

… that a feeling of relief has spread throughout the company because the old annual review system was “a soul-less and soul crushing exercise.”

One side effect was that involuntary terminations increased but voluntary terminations reduced, It ought to be a happier place to work. …

Sunset, finally?

Sunset, finally?

Simon Phipps comments on Oracle’s decision to close down the SPARC and Solaris business units. He  was close to the politics of Sun’s “Dash to Open” in the mid noughties. My feeling is that Sun had failed before Schwartz was appointed; there was no longer room for differentiated hardware company; Oracle’s failure to monetise the SPARC product line may have been caused by management hubris, but the long term economics  …

Tax Fairness

Tax Fairness

Over the weekend, John McDonnell promised that Income Tax would not rise for most of the country but that a higher rate would be levied on those earning more than £80,000. Tax reform can be pretty technical; and so one needs to look at one or two things without losing sight of the idea that the richer should pay their share. Each tax payer has a personal allowance of £11,500 i.e. the first £11,500 of earnings is not taxed; this is clawed back if one’s income is £100,00 or more by levying a 60% marginal rate on those earning between £100,000 and £121,200. There is probably enough room for a new additional rate between the 40% levied at £42,000 and 60% levied at £100,000 and £80,000 p.a. is a lot of money; only 3% of income earners get that much. It will remain necessary to increase the amount paid by those earning more than £145,000 and redress the regressive nature of National Insurance, which negates much of the 20% band, converting it into a 32% tax burden. Labour’s promise is also that there will be no increase in employee NICs nor in VAT, although again that’s not enough … VAT has to come down from 20%. …

Greiner?

I re-read Greiner’s Evolution and Revolutions as Organisations grow. He argues that the growth of companies meet crises, the resolution of which change and shape the next stage of development and that companies go through creativity, direction, delegation, co-ordination and collaboration stages. As ever, I fail to see the compulsion and inexorability of each succeeding stage but the causes of potential stagnation and the need to respond by changing the management style and tools are insightful.

I wonder where today’s exemplar corporates are on this curve, or is software different? …

Alchemy

The New Statesman interviews Mervyn King, the most recent ex-Governor of the Bank of England. He’s just published a book, “The end of alchemy” and King is now exploring if Central Banks have run out of policy tools. They examine the problem of banks, “too big to fail”, King proposes a transition from the role of the Central Bank as a lender of last resort to that of a pawn broker or insurer, requiring the banks to pay for the underwriting of their customer deposits. Also they look at King’s assertion that people at work don’t have enough time to think and read, he observes that he only got this back when he got the top job at the Bank. It’s true of all of us though and it reminded me of Mike Threlfall who publicly stated that the desirable utilisation for his consultancy team was 50% since otherwise they ceased to be consultants. The article looks at the heavy reliance on Maths that King’s generation of economists depended upon, and the probability that they thus underestimated the reaction of people. Economic rationalism has been challenged by modern behavioural economists, and in the interview King argues that people (& firms) are pursuing “coping” strategies, rather than utility maximisation strategies and that the traditional macro economic tools no longer work. He’s quoted as saying, “People’s beliefs and expectations cannot be captured by an economist’s view of how the world works”. He’s obviously learned from the 2008 crash, but whether his lessons are enough is another matter. Traditional economists are turning away from austerity, and innovations in both macro-economics and monetary policy are being developed. I should read the economic press’ book reviews of his book. …

RemaIN

RemaIN

On June 23rd, there will be the most important democratic decision taken in the UK, ever. The British People and those of Northern Ireland will be asked if they wish to remain in or leave the European Union. I am firmly of the view that both collectively and individually we will be better off, have more freedoms and a richer political, and non-political culture if we remain in. Like others, I have a list of issues that I believe need to be considered, mine are, Jobs & Prosperity, Citizenship Rights, Sovereignty and Peace & Hope. …