CIPFA SCOTLAND CONFERENCE 2013 · cipfa.org.uk/scotland Followed by Workshops Refreshments and...
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cipfa.org.uk/scotland CIPFA SCOTLAND CONFERENCE 2013
Transcript of CIPFA SCOTLAND CONFERENCE 2013 · cipfa.org.uk/scotland Followed by Workshops Refreshments and...
cipfa.org.uk/scotland
CIPFA SCOTLAND CONFERENCE 2013
cipfa.org.uk/scotland
cipfa.org.uk/scotland
Welcome
Ronnie Erskine
Chair, CIPFA Scotland Branch
cipfa.org.uk/scotland
Is our system broken?
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Do you feel responsible for the
system?
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Opening address
Guy Browning
Chair: Ronnie Erskine
Smokehouse
Thinking Outside Your Head
Field of Dreams
Imaginary Dead Baseball Players Live in Cornfield
George of the Jungle
Big Dumb Monkey Man Keeps Whacking Tree with Genitals
Barb Wire
Delicate Orbs of Womanhood Bigger Than Your Head Can Hurt You
Batman and Robin
Come to my Cave and Wear This Rubber Codpiece, Cute Boy
Smokehouse – A Full Service Agency
• Big Danish pastries
• Speculative Invoicing
• Timesheet Fabrication
• Fridge Defrosting
• Surgical iPad Removal
• HR Suppositories
• Karaoke Coaching
• Coffee Fetching
• Report Fattening
• Ego Stroking
• Customer Sliming
• Palm Readings
• Tricky Staple Removal
• Management Exorcisms
Organisations we have worked with
• British Airways
• Coca Cola
• Mars
• Unilever
• Sky
• Airbus
• Vodafone
• KPMG
• Toyota
• Johnson & Johnson
• IBM
• Shell
• Proctor & Gamble
• CIPFA
Organisations we’ve worked with more
than once
• CIPFA
We Work With You As One Team
Account Team Creative Team
Smokehouse recruitment policy
• Ethics of Mother Theresa
• IT skills of Bill Gates
• Charisma of Britney Spears
• Business brain of Rupert Murdoch
Smokehouse recruitment reality
• Charisma of Bill Gates
• Business brain of Britney Spears
• IT skills of Mother Theresa
• Ethics of Rupert Murdoch
Employee of the Month
November 2011 – Guy Browning
December 2011 – Guy Browning
January 2012 – Guy Browning
February 2012 – Guy Browning
March 2012 – Guy Browning
April 2012 – Guy Browning
May 2012 – Guy Browning
June 2012 – Guy Browning
July 2012 – Guy Browning
August 2012 – Not Awarded
September 2012 – Guy Browning
October 2012 – Guy Browning
November 2012 – Guy Browning
December 2012 – Guy Browning
January 2013 – Guy Browning
February 2013 – Guy Browning
March 2013 – Guy Browning
April 2013 – Guy Browning
May 2013 – Guy Browning
June 2013 – Guy Browning
July 2013 – Guy Browning
August 2013 – Not Awarded
September 2013 – Guy Browning
October 2013 – Guy Browning
November 2013 – Guy Browning
December 2013 – Guy Browning
January 2013 – Guy Browning
February 2013 – Guy Browning
It’s nothing
to do with me
It’s nothing
to do with me
It’s nothing
to do with me
It’s nothing
to do with me
It’s nothing
to do with me
It’s nothing
to do with me
Absolute Commitment to Qualtitty
ISO 991
Smokehouse Mergers & Acquisitions
Smokehouse
Innovation Red Brick Agency
Design
Shaw IT Consultancy
BRICK SHITHOUSE
Flat Management Structure
DIRECTORS
other insignificant people
Our First Office - 1997
Our Current Office - 2013
Smokehouse Group - World Ranking
Rank Marketing Services Group
Smokehouse
WPP 1
Omnicom 2
Publicis 3
Interpublic 4
Dentsu 5
893,671
Places I’ve been recently
Places my luggage has been recently
Top 10 Conference Themes
1. The Challenge of Change
2. Vision 2020
3. New Horizons
4. Simply the Best
5. Moving Forward Together
6. We are the Champions
7. Playing to Win
8. One Vision
9. New Frontiers
10. Inventing the Future
Some of the Others
38. We’re Getting Nowhere!
39. Bankruptcy – It’s not so bad
51. Let’s Talk Bollocks!
258. Raising our Trousers
318. We’re Neck Deep in Bullshit
412. We’ve Tried Everything – It’s Time to Panic
476. Get Undressed and Bend Over 2011
Smokehouse Results 2002-2008
Law Firm
Profit
Profit
Loss
02 03 04 05 06 07 08
Obscene
Profit
Smokehouse Budget 2010-2014
US
Deficit
Loss
Profit
08 09 10 11 12 13 14
Bank
Debt
Advertising 20%
Selling Our
Furniture
64%
Marketing
16%
Revenue Streams
Average margins at Smokehouse
High
Low
Costs
Income
Close up look at margins
Costs
Income
Really, really close up look
Costs
Income
My Salary
Thinking Outside Your Head
“Innovation is what
Senior Management require
Middle Management to get from
Junior Management.”
Patrick Shepherd
Head of Innovation Jessops (ex)
What is Innovation?
Why people don’t innovate
Try something different
Massive disaster
Immediate sacking
Marriage breakdown
Alcoholism
Prostitution
Drug Addiction
Death
Thinking Outside The Boxes
A4 paper
The Box everyone in business sits in
MONEY
TIME
YOU
PEOPLE
“You can’t solve a
problem with the
same thinking that
created it.”
Albert Einstein
(after heavy night)
Question the Question
“How do I play more golf?”
“How do I spend less time with my husband?”
“How do I run off with Mike in accounts and make
a new life for myself in Leighton Buzzard?”
Have A Quick Breakdown
“How do we improve dog food?”
“How do we improve the smell of dog
food for humans?”
Golden Rules of Public Accounting
1
2
3
4
5
6
Reshape Your Thinking
Get to the Future before it gets to you
• Gravity defying materials developed
• Computer processing becomes male and female
• Dyslexia becomes incurable edipemic
• New number found between three and four
• Complete human being printed as QR code
© Smokehouse 2012
“There are no new ideas:
only the import of old ideas into new
places at new times.”
Voltaire (very loosely translated)
What everyone wants in life
Affection
Things People are Sensitive About
Looks
Education
Accent
Presentations
Humour
Politics
Numbers
Bosses
Car
Clothing
Children
Height
Ethnicity
Creativity
Background
Family
Sexuality
Clothing
Feet
Handwriting
Religion
Taste
Hair
Intelligence
Teeth
Large groups
Efficiency
Detail
Other people
Sales
Nose
Meetings
Bottom size
How to keep people motivated
You were rude about my hair
I will sabotage your entire career
You said thank you last time
I’ll work late next time
BHAG – Big Hairy Audacious Goal
Thank You
cipfa.org.uk/scotland
Adaptive systems and
what we have to adapt for
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Complexity theory and complex adaptive systems
Paul Cairney
Chair: Ronnie Erskine
University of Stirling
Complexity Theory and
Complex Adaptive Systems
Conference Theme: ‘adaptive system
thinking … how adaptive public finance and
its finance function and people are’
Paul Cairney
3 Key Elements 1. Economic crisis – cuts, delegation,
new ways of thinking.
2. Targets, rules, accountability and
unintended consequences.
3. Organisational change in Scotland.
These elements combine to highlight:
• The importance of adapting to crises
• A flexible approach to rules to address events and
anticipate problems
• Potential for local action with minimal central
government control
• Potential tension between discretion/ flexibility and
accountability
• Uncertainty about how to use rules flexibly
Lessons from Studies of Policymaking?
•Most conference talks are about
creativity and flexibility
•This talk explores the idea that it may be
appropriate
•The idea that local action may be
preferable to central control
We could deduce from policy studies that:
•No government can control the public
sector.
•Many governments exacerbate this
problem.
•Local actors can adapt better to local
circumstances.
This is a key theme in classic studies:
• Lipsky and ‘street level bureaucrats’ – impossible to
deliver all government policies.
• Hjern and implementation structures – impossible to
control all the actors involved.
• Governance – NPM fails to impose order through
hierarchy and targeting
The theme can be explored in ‘complexity theory’
• Interaction - a complex system is greater than the sum of its parts
• Feedback loops - small actions can have large effects and large
actions can have small effects.
• Sensitivity to initial conditions - produces a long-term momentum
or ‘path dependence’.
• Emergence - behaviour that results from the interaction between
elements at a local level rather than central direction.
• Strange attractors - regular behaviour which may be interrupted
by bursts of change
Complexity theory and policymaking:
• A successful policy in one area may not have the
same effect in another.
• Policymaking systems are difficult to control.
• Policy makers in the UK have been too driven by the
idea of order.
• Policymaking systems and environments change
quickly.
• Therefore, organisations must adapt quickly and not
rely on a single strategy.
Policy scholars often reject ‘top down’ control
• Rely less on central government driven targets
• Give local organisations more freedom to learn and
adapt
• Encourage and learn from trial-and-error projects
• Encourage better ways to deal with alleged failure
• Treat ‘errors’ as lessons (not an excuse to punish
organisations)
• Set more realistic parameters for success/ failure
• Encourage a greater understanding of complexity
Where do we go from there?
• The advice may seem welcome but vague
• It is up to us to fill in the blanks
• Some sessions encourage us to think
creatively
• Others highlight the Scottish-specific
constraints
• Follow-up session tomorrow to tie those issues
together
• Follow-up blog/ comments
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John Finch
Thoughts for you
The future of public sector pensions
Making pension investment manager choices matter
Efficient processes for manager selection
Avoiding obvious mistakes
Relationships that last/funds that work
John Finch
Director, JLT Investment Consulting
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Followed by Workshops
Refreshments and Podcast
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Lunch
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How adaptive is the finance function and it’s people
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Followed by Workshops
Refreshments and Podcast
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How adaptive is the finance
function and its people
Chair: Gillian Houston
Jonathan Flowers
Veredus
cipfa.org.uk/scotland
@jonathanflowers
The shape of this talk
• Exhibit A – Recruitment Experience
• Exhibit B – Survey data
• Describing the desired adaptation...
• ... And describing some responses
• A Case Study: Essex County Council
• Some wider observations
cipfa.org.uk/scotland
@jonathanflowers
Recruitment Experience
• Indicator of Adaptiveness: Taking Finance people into non-Finance jobs – “The best strategic finance director I’ve
ever met, shame the interview was for a Chief Exec”
–Evident discomfort with other professions (esp HR!)
–Very “easy” finance career paths right up to senior levels
cipfa.org.uk/scotland
@jonathanflowers
Survey Data
• Survey designed to explore progression/succession but gives some insights into Adaptivity
• Society of London Treasurers – “next generation”: what are the issues that prevent progression: –Skill
–Will
cipfa.org.uk/scotland
@jonathanflowers
Skill Gaps for FD
• Political management (5) • Broader council-wide perspective (5) • Lead financial adviser (lonely) (3) • Influencing skills/potential conflict (3) • Leadership skills (2) • Delegation (2) • Strategy AND detail (2) • Change skills • High risk specialist areas • Work-life balance • Confidence
cipfa.org.uk/scotland
@jonathanflowers
Skill Gaps for Corporate Resources
• Managing “other” professionals (5) • Technical knowledge in other areas (5) • Conflict finance v other parts (4) • Portfolio management (2) • Broader business perspective (2) • Letting go of the detail • Bigger scale of the role • Winning respect
cipfa.org.uk/scotland
@jonathanflowers
“Will” Gap for FD • Work/life balance (4)
• Don’t want to deal with Members (4)
• Stress (4)
• Job security (4)
• Too much responsibility (4)
• Move away from detail/technical specialism (2)
• Not being on corporate board (if it isn’t)
• Salary step up not big enough
• Specific problem authorities
• Bias against particular recruiters/biased processes
• Lack of confidence
• Unpopularity of the role
cipfa.org.uk/scotland
@jonathanflowers
“Will” Gap for Dir Res • Losing contact with finance (6)
• Lack of understanding/interest of other services (6)
• Stress (3)
• Job insecurity (2)
• Work life balance (2)
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@jonathanflowers
“So What” Questions
• Does this resonate?
• What does it mean for Adaptation?
– Fear of political interface
– Fear of other professions/losing touch with finance
– Fear of acting corporately/approximately
• Whose job is it to fix these things?
– Individuals?
– Employers?
– The Profession?
cipfa.org.uk/scotland
@jonathanflowers
What Adaptation may be Needed?
• Genuinely outcome oriented
• Business aware, commercial
• Strategic and proactive
• Externally engaged: partnership world
• ... And not dropping the ball
cipfa.org.uk/scotland
@jonathanflowers
Some Available Responses • Structural (eg):
– Business Partner roles
– Non-accountant Director of Resources/Transformation
• Cultural
– Difficult: long lead time, hard to do it alone
• Professional
– Redefine the skills/criteria for the profession
cipfa.org.uk/scotland
@jonathanflowers
Essex County Council • One of the largest County Councils in
England
• 1300sq miles, 1.4m people, revenue budget c.£2bn
• Ambitious plans, reputation for innovation
cipfa.org.uk/scotland
@jonathanflowers
Essex Finance Team • A “once in a generation”
opportunity • A smaller better top
team • Key: different
behaviours • Change owned and
driven internally, some small external support
• Assessing internal and external candidates
cipfa.org.uk/scotland
@jonathanflowers
Essex Finance Culture
From • We take a blanket approach to
monitoring and control • Performance differentiation is not
apparent – we neither reward /punish
• Not enough performance focus on value add
• We’re not honest enough about performance
• Regular rewards and vouchers • Not enough collaboration and very
formal mechanisms for cross working e.g. cc’ing managers in on related emails
• Not enough shared success across Finance as a whole
• Members seem to be held in very high regard and the senior level interaction with them influences hierarchical behaviour
To • Our monitoring and control focuses and
key areas and critical success factors • We reward really good behaviour and
deal with poor performance • We have an outcome focussed story with
an emphasis on the value we’ve added • We’re honest about performance • We reward people regularly using
vouchers and other mechanisms • We work collaboratively and cohesively • We recognise a lot of shared success • We have a sensible perspective of our
members and Finance employees have the ability to take projects and other things to the ‘top’
• We don’t over burden our good performers with too much additional work just because we know it will get done
• We ask ourselves how successful our clients have been as a measure and allow success to breed success
cipfa.org.uk/scotland
@jonathanflowers
Essex Finance Performance
High performer • They have a good balance between
technical skills and behaviours • We trust that they will deliver • They show initiative • They understanding the problem • They’re always on your side • They can take Finance into a non-
financial environment • They show humility • They are good listeners • They understand the organisation • The quality of their work is good • They show focus • They take personal responsibility • They are team players • They support, encourage and
develop others
Low perfomer • They have poor customer skills • They deliver a poor quality of
work • They have a lack of focus on
delivery • They aren’t proactive • They lack the willingness to
change • They have a tick-box mentality
cipfa.org.uk/scotland
@jonathanflowers
Structure • Financial Strategy and Operations leg
– Strategy/analysis/MTFS/statutory accounts/compliance
• Financial Management leg – Business Partners
• Senior Finance Business Partner and other business partners
• Positioned as proactive, strategic finance partners
• Two-way link to rest of the business
cipfa.org.uk/scotland
@jonathanflowers
Culture • Simulated work environment
– Not enough time to think about a problem
• 10% financial
• 30% strategic
• 30% political
• 30% commercial
– Meet some awkward stakeholders
• Partner organisations
– Presentation back to senior team
• If not this then what?
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@jonathanflowers
Outcomes • Brave decisions
• Implementation buffeted by change but held to principles
• Very strong finance team – leading significant strategic change
• Next wave of refresh happening now – same methodology
cipfa.org.uk/scotland
@jonathanflowers
The shape of this talk
• Exhibit A – Recruitment Experience
• Exhibit B – Survey data
• Describing the desired adaptation...
• ... And describing some responses
• A Case Study: Essex County Council
• Some wider observations
cipfa.org.uk/scotland
@jonathanflowers
Wider Observations
• Importance of cross-profession networks – Not just public sector
• Importance of earlier political exposure • Supply-side or demand side solutions?
– Design programmes for people (or) – Remove obstacles from their path
• “A profession is defined by the people who stay in it” – What would the people who have left say? – Who are the “heroes” of your profession? Are
they the right role models for the future?
cipfa.org.uk/scotland
CIPFA SCOTLAND CONFERENCE 2013
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cipfa.org.uk/scotland
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• System not in a state of chaos = not positioned to meet new possibilities
• No direct link between funding and the national performance framework
• What YOU can do
• What WE will do? – convene stakeholders in May 2013
• What we can do together is, in summer 2013, work towards a new Scottish approach to planning and funding our budget choices
cipfa.org.uk/scotland
Manging risks and uncertainty
Alan Ross
Chair: Ronnie Erskine
Zurich Municipal
INTERNAL USE ONLY
….and finally ….
To end on a
cheery note..
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“There are known knowns; there are things we know we know.
We also know there are known unknowns: that is to say, we
know there are some things we do not know.
But there are also unknown unknowns – the ones we don’t
know we don’t know.”
Donald Rumsfeld
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The Resilient Organisation
• The ability to prevent significant negative consequences occurring
• The ability to prevent negative consequences worsening over time
• The ability to recover from the negative consequences of an event
• Seeking out the opportunities that arise during a crisis to emerge
stronger than before
• Ability to achieve objectives even in the face of adversity
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Risk Identification
Risk Type Meaning Examples
Global Risks that are beyond the control of
any one organisation
• Changing weather
patterns
• Demographic changes
• Rate of inflation
• Cost of living
Strategic Risks our organisation actively seeks
or becomes exposed to in order to
fulfil its purpose
• Budget allocations
• Priorities
• Choice of suppliers
• Key Projects
• Culture
Operational Risks that are largely within the
control of our organisation
• Failure of key systems
or processes
• Compliance with
policies
• Lone working 108
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Selected Risks
• Chronic fiscal imbalances
• Mismanagement of population ageing
• Severe income disparity
• Extreme volatility in energy and
agriculture prices
• Rising rates of chronic disease
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“ If I had an hour to save the world I would spend 59 minutes
defining the problem and one minute finding solutions”
Albert Einstein
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Risk perception?
Harold Camping
Consulted the bible
End of the world
21 – May 2011
The Mayans
Consulted the sun
End of the world
21 – Dec 2012
Finally …Hanna Rosin
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“ . . . the idea of the future being different from the present is
so repugnant to our conventional modes of thought and
behaviour that we, most of us, offer a great resistance to
acting on it in practice.”
John Maynard Keynes
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1. Does our risk view include short, medium and long term risks?
2. Do we really understand the risks & uncertainties facing our
organisation over the next 5-10 years?
3. To what extent is risk truly integrated with how your organisation
makes decisions?
4. How many people challenge & contribute to our organisation’s risk
view?
5. What is our ability to respond to crises we haven’t anticipated?
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….and finally ….
cipfa.org.uk/scotland
Close and fringe
Ronnie Erksine
Chair, CIPFA Scotland Branch
