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Issue 23 November 2008 |
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 Welcome
We want to deliver value through Perform. Your opinion matters to us.
We want to make things better. |
In this month's issue:
Introduction
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Introduction
Welcome back to Perform, your source of performance improvement management tips.
This issue covers a contemporary Great Leader, a thought about what will happen after the "credit crunch" and some thoughts on the fate of training budgets at the moment.
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Late last year, when visiting Lancashire, I met several police officers.
These were all uniformed officers, both constables and sergeants, male and female. Over a period of four days, meeting twice a day, we began to talk: just friendly chitchat, passing the time of day and being silly.
All the while though, their eyes and senses were alert to anything suspicious.
These people shared one overall boss, their chief constable, Steve Finnigan.
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Human beings are comparative animals. We cannot tell precisely how hot or cold, how slow or fast or how far away our senses are reporting something to be. We can tell with enormous precision if something is hotter or colder, slower or faster and nearer or further away. It is a survival instinct.
Mervyn King, the Governor of the Bank of England, in his speech at the Royal Armouries, Leeds on the 21st October 2008 ( © The Governor and Company of the Bank of England) said this:-
“As concerns about the viability of our banks recede, banks should regain the confidence of the market as recipients of funding. There are already some signs of greater activity. But the age of innocence – when banks lent to each other unsecured for three months or longer at only a small premium to expected policy rates – will not quickly, if ever, return. In itself that does not affect the ability of banks to fund lending, but confidence has been badly shaken after the traumatic events of the past few weeks.”
Yes our confidence has been shaken. Made worse some say by the accounting rule that force financial institutions to revalue their assets, the “mark to market” rule. As the value of stocks and shares, mortgages and loans decline, the underlying asset base of the banks is eroded. Meanwhile, the Accounting Standards boards are saying that the rules are merely highlighting the weak asset base that is already there.
Certainly people are sensitive to changes. The figure shows the change in UK GDP from year to year.
Source: National Statistics website: www.statistics.gov.ukCrown copyright material is reproduced with the permission of the Controller Office of Public Sector Information (OPSI).
The change in economic activity from year to year is massive. No doubt the change in 2007 to 9 will show similar and perhaps wider swings.
But when people see good news will the activity bounce back as fast as it dropped? The “mark to market rule” will revalue banking assets, people’s confidence will grow as the good news floods in and people begin to invest again.
Will 2009 see a financial miracle? I hope so but my hope is a weak argument!
How about Warren Buffett – the famous value investor, the Sage of Omaha – what does he think?
He never says much beyond his annual letter, he can move markets too easily. What has he done though?
In September 2008 he invested US$5Bn in Goldman Sachs and in October US$3Bn (with an option for a further US$3Bn) in General Electric. He thinks they are good value.
Will the crowd follow him soon? |
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These are uncertain times! An understatement I know. Certainly there is a general slowdown in spending.
I was shocked though to hear an HR manager to say that all training had been cancelled OF COURSE.
Training may be of use to maintain capabilities in the face of staff turnover. It would be reasonable to think that staff turnover will be less in the immediate future than it might otherwise have been.
But is it sensible to cancel all training? Surely investment in performance is always a good idea, unless you think your organization won't be around in six months time.
Or is the view from HR that training in general is a nice-to-have and doesn't produce any performance enhancement? In which case I wonder why any training is done at any time!
Please let me know your thoughts.
If we guaranteed, guaranteed absolutely, that the cost of training was recoverable in six months through performance improvements would that change your mind? |
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Our next Perform
Look out for the next edition of Perform in mid December.
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© Motivation Matters 2008
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Motivation Matters is a limited company registered in England and Wales, number 5295383.
Registered Office: c/o Paul Donno & Co. Ltd., Clockhouse Farm Estate, Cavendish Lane, Glemsford, Sudbury, Suffolk, CO10 7PZ. |
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