becoming deaf, dumb, and blind, during the lock-down

Nearly all of us are currently subject to a national 'lock-down' during an unprecedented pandemic.

And all of us are responding in different ways to the challenges that this 'new world' we now find ourselves living and working in present.

After the initial panic, patterns seem to be starting to stabilise: we're getting used to having to que for an hour (or longer) to get into the supermarket, and then once we're inside for it to take 2-3 times as long to get around as we used to be able to do our shop in, in order to practice social distancing and limiting contact with fellow shoppers and store staff.

But for many, the revelation that they can now work from home using video conferencing and remote access, and which people seem to already be developing habits around, seems to suggest that many will struggle to want to go back to the drudgery of commuting once we're out of the other side of this (whenever that may be).

But there's something about working from home, and also the wider implications of how as enterprises and business we fumble our way forwards through this, that no-one really wants to seem to talk about:

1) what it your internet connection goes down? I've heard of several people and small businesses who have been essentially excluded from the world completely after routine line installs and upgrades fell foul of 'human error', leaving them deaf, dumb, and blind to the world...

2) and what it your tech dies? My laptop's hard drive failed at the start of this week - and it's unlikely that I'll be able to get it anywhere for repair for months, so in the face of having already had nearly all my earning work cancelled by clients already, and an uncertain wait to find out if I'll be able to access the self-employed income support scheme, I've had to pay out several hundreds of pounds unexpectedly to order to buy a new one, and hope that it can be delivered sometime in the next 2 weeks... (in the meantime, my girlfriend has very kindly offered me the use of hers, from which I'm typing this).

3) Gurus and experts all seem to be extolling the virtues of 'pivoting' our business models - but encouraging us to do so in ways that assume that it's only our current market place or customers that are being disrupted - this is nothing like any of us have lived through before, and nothing that was ever conceived of by the academics and speakers who developed these models and frameworks. So for us businesses and enterprises already facing an immediate uncertain future because of cash shortfalls, our longer term planning is also compromised by the models we're being presented with to reinvent ourselves through having been developed for different times...

4) And finally, what happens after the summer for education bodies?

Universities and Colleges quickly moved to continue to offer teaching and classes using on-line platforms, and replace exams with assignments. But within a few months, these will become the norm for many students, who must surely then begin to wonder why they need to raise the money to live on or near a campus to be able to engage with their further and higher education in the future, when they can access it equally from wherever they find themselves living now?

Like many, I can't see that we're ever going to fully return to living and working as we were at the start of 2020, but I wonder how many waves of shock, panic, and fear this pandemic will successively unleash on us before we can all feel its over - and what these will do in turn to our work, learning, and relationships as societies, communities, and economies.

Hopefully the time that the lockdown offers us to start to carefully think about these things will mean that we don't emerge from the pandemic only to fall into the next global panic... 

having your accounts audited doesn't prove they're correct - so why do we keep thinking it does?

Lets get one thing clear from the start here - there are a lot of accountants who will be upset with me for writing this.

But at the same time, there are hopefully a lot of groups and businesses who'll now start to save a lot of money and stress after reading it...

There's a commonly held belief that I want to correct with this post - namely that an awful lot of people (including commissioners, grant making bodies, government officials, and the like) all think that if you have your accounts audited it proves that they're accurate.

It doesn't.

The process of auditing is simply someone giving an opinion that the way you've approached adding up your receipts and invoices (based on what you choose to reveal to them) is sound. 

An audit does not guarantee that the accounts are fully correct, or that you're a sound business proposition - and if you don't believe me, just go back and read what it says on the certificate that you pay an auditor to give you (the below extracts are from the auditors certification to the 2019 accounts for Arrandco Business Services):

• "Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement...  Reasonable assurance...is not a guarantee that an audit...will always detect a material misstatement when it exists."

• "We do not accept or assume responsibility to any party... to any body, for our work, for this report, or the opinions we have formed"

So if the audit process doesn't guarantee it will spot mistakes in your accounts, and if there is subsequently found to be an issue that the auditor missed, then the auditor isn't responsible for that - so what do we pay for..?

And to add to this question on the validity of the audit process, let's also remind ourselves of a few recent 'audit failures' - 

Patissie Valleirie - when asked why the auditors to this high street retail chain didn't spot the £40m fraud that spanned several years, their auditors said they don't look for fraud as part of their audit process... 

Carillion - not just one, but two firms of auditors missed the signs of a greater than £1bn hole in the accounts of this national construction firm that was a one-time darling of government commissioners, as well as ongoing signs of insolvent trading...

Kids Company - the flagship charity that suddenly seemed to run out of cash in 2015, was having serious concerns raised about apparent financial reporting and management irregularities to its Trustees as far back as 2002, yet still had accounts signed off every year...

RSM Tenon - one of the leading accountancy and audit firms found that it wasn't even getting its own accounts right after they were signed off...

the Charity Commission - last year openly said that about half of the accounts filed with it aren't being properly examined or checked by the auditors who are being paid to do so, which calls into question how far we can trust the accounts of any charity in general...

So - back to my opening question: if the process of auditing accounts doesn't guarantee that they're correct, and the auditor has no responsibility if its subsequently found that they didn't do their job properly:

(1) why do we pay for our accounts to be audited?

(2) and in light of the above quick example from across different sectors, why do we still keep asking for accounts to be audited as proof of assurance that the organisation is trading legally and is not insolvent?

is the honeymoon for CICs over?

I’ll begin by outing myself (again) on the subject of Community Interest Companies (CICs) – I’ve personally never been a big fan of them for all sorts of reasons that include:

• their not offering any features that are truly unique,
• are generally not advantageous in securing income,
• usually allow very weak governance to emerge,
• offer little security for their Members and Directors in light of their regulators’ powers to overrule them...

(all of which are detailed in previous blog posts), BUT I have supported some clients to gain this ‘hallowed status’ and am always pleased (really!) when an enterprise proves me wrong on why it’s the best form for them to adopt.

However, I’m wondering of the wider world may be catching up with me now in light of trending data published by the CIC Regulator themselves that suggests CICs may be increasingly seen as a ‘bad apple’ by those who set them up, and those they engage with...

You see, I’m a geek in oh, so many things, but particularly in the governance of organisations of all types, and as a result, find the annual reports from regulatory bodies fascinating reading. And despite my personal misgivings about the CIC form, I’ve always said that the CIC Regulator published perhaps the best designed and most accessible annual report of all the regulators. And this year I decided to dig into some of the stats they publish in a little more detail –

I looked at the period 2011/12 to 2013/14 (3 years) to see what trends there might be amongst CICs that are emerging and it’s not an encouraging picture:

• as context, over the last 3 years, the total numbers of CICs have increased by 44%;
• but last year, over 10% of all CICs on the register were wound up – a figure that’s also growing year on year (and has floated around the 9% mark in previous years);
• and the biggest reason (70%) for CICs being wound up is that they’ve been struck off the public register by Companies House for failing to meet their associated statutory legal duties! - which amongst other things means that the Directors of them may subsequently face difficulties with being able to act as Directors or Trustees of other organisations as well as against their own personal credit ratings;
• and the number of formal complaints being made about CICs to the CIC regulator has also been doubling year on year as a proportion of all CICs on the register

So – is all well in the land of CICs? More are currently registered every year than are being wound up, but the trends in each suggest that most CICs currently don’t make it past 5 years. And with a growing trend of CICs failing to fulfil their basic statutory legal responsibilities, it’s perhaps illustrative that many are adopting this legal form on the basis of poorly informed advice and guidance. It also perhaps suggests that CICs are approaching a plateau in terms of their prevalence, and are not in fact the ‘magic bullet’ to solving the sectors’ woes and concerns that many have presented them as being? (but as with all things, I’m open to being proved wrong of this...) 

UPDATE - 6th Nov
after sharing a link to this post with the CIC Association, there's been a clear response offered against my closing invitation to 'be proved wrong about this': http://cicassoc.ning.com/profiles/status/show?id=2691611%3AStatus%3A72861

why social accounting encourages us to delude ourselves...

I've been thinking a lot about approaches and issues relating to social accounting/impact reporting lately – perhaps because it’s about that time of year when I publish my own latest annual report! (and to my knowledge, am still the only freelance consultant on the planet to do so...)

A regional enterprise support agency asked me in conversation recently about one of the measures I report on in my framework: the percentage of my turnover that I directly reinvest in my own CPD – they wondered why I'd measure that, rather than simply keep a log of all my CPD activity (which I also do!). And I think my answer surprised them: it’s so I know how well I'm actually doing in respect of CPD - keeping a log of activity only helps me understand what works for me, it doesn’t allow me to compare how I'm structuring what I do in relation to my counterparts – and in regard to CPD, there are benchmarks from bodies such as the CIPD who I can look at to consider if I’m investing more/less than the market norm.

Without being able to compare the findings of our social impact reports, how confident can we be in what we think they tell us about ourselves? I can create measures and standards that will generate what seem to be impressive figures and statistics, but they're only really impressive if I can compare them against other peoples'...

And that’s where most of the approaches to reporting social value/impact/accounting come unstuck – while there may be standardisations of overarching methodologies, the way they're enacted can vary incredibly between organisations who adopt them: I know of one instance where 2 homeless charities compared their impact by both using Social Return on Investment (SROI) – one seemed to be clearly outpacing the other in terms of the final calculated financial ratio, but in comparing their ‘workings out’ it became clear that this was because they'd not been consistent, with one counting far more stakeholders and outcomes than the other had...

Unless we use measures in our social impact reporting that have a consistent applied methodology and can generate data which we can directly compare against others' in the confidence that they've measured it in exactly the same way – any social impact report we create falls short of its true potential in helping us to decide how well we really are doing in the world beyond the inside of our own heads, and as such lacks credibility with others (such as commissioners, investors, etc...)

Why we’re to blame when our leaders fail us

A lot of media coverage has been given in recent weeks to an ex-chair of a national ethical bank, and it strikes me as interesting for a couple of reasons that you might not expect –

1) what finally ‘tipped the balance’: this is someone who’s expenses claims on the boards of several charities where they served as a trustee were seriously questioned over the years, and who’s Council computer they used in their duties as an elected councillor were apparently found to contain images that would breach most company’s IT usage policies... but it was only after they were ‘caught’ buying (not taking!) drugs that they were ousted: both as Chair of the Bank and as a Minister of the Church.

Does this mean that as a society we have a scale of (un)ethical behaviours that we’re prepared to accept? (probably - I've written about how pornography is more ethically acceptable than tobacco before...)

2) And given the above, how were they allowed to keep holding (and gaining) the positions of power and authority that they did?

And these questions get me thinking about how they were able to fall so far – why did no-one intervene sooner or spot warning signs?

I think it may be something to do with the way we treat and support those in authority: the higher up an organisation you rise, the less support you have available and offered to you.

For example: think about volunteering for a charity, or being the shop-front worker in a small business – there’s clear induction to make sure you know what you’re doing, regular check-ins to see if everything’s going well, and lots of legislation to make sure that employers are properly looking after you. But become a Director or a Trustee and all that seems to vanish... there are few formal inductions or reviews at the Board level in private, social and charitable enterprises I've walked alongside over the years – and this is echoed by the Charity Commission who've found that the majority of complaints they investigate are due to governance failings, and the need in the private sector over the years to introduce Codes of Conduct for Directors.

So – as the troubles of an ailing bank are heaped upon one person who succumbed to human weaknesses, do we really only have ourselves to blame when we've set them up with no means of helping to support them do the jobs we're asking and expecting of them?

Is there an ideal size for a co-op business?

The co-operative brand and model of doing business has taken a bashing in the public and media realms recently – the co-op bank being bought out by private investors; its board being found to lack the skills and awareness needed to manage such an enterprise; the co-op groups' collaboration with Thomas Cook over the future of its travel business turning sour, and plenty more besides… all things which anyone who's a member of any co-operative enterprise will feel shamed, embarrassed, upset, and angry about because they show that our ideals and hopes for this alternative model of doing business have been 'betrayed' by one of our largest number...

Many are commenting and writing elsewhere on the implications and reasons for these fall-outs, but I find myself wondering about the question it raises about the dangers of a co-op enterprise of any type becoming 'too big' and in doing so, too distant and removed from its members who are the reason for its existence, and if by extension that means that there might therefore be an ideal size for any co-operative enterprise?

Anyone who's been involved with any co-op will know that people become members of it for all sorts of different reasons: ideology, need, economic gain, community, employment, … and with those different motivations come different expectations as to how they want to be involved in, and influence, that co-op's trading and development.

Sometimes co-ops can focus on their members' interests over maintaining a profitable enterprise which leads to trouble, but conversely those co-ops who neglect their members' interests in pursuit of a profitable business also find themselves in danger...

But does this mean that as well as an ideal size, there should also be an 'ideal type' of co-op member? After all, doesn't it get too messy otherwise to be able to manage? But pursuing this line of thought likely leads to madness: we live in a wonderfully diverse world, and its because not everyone thinks the same that new expressions and ideas and opportunities can emerge.

So – back to the original question: should we limit the size of a co-op? I know of several worker and housing co-ops who've wrestled with this question in the past, and decided that 'yes', there are natural limits to how large a co-op should be allowed to become before it has to enact formal democratic structures that would dilute and stifle their members' voices and influence  to levels that they deem to be too low to be acceptable.

But conversely, scale brings advantages despite its governance and regulatory challenges, the Co-operative Group has been able to support thousands of local community projects with grants, campaign globally on numerous issues, and help hundreds of existing and new startup co-ops across the UK through its Enterprise Hub initiative solely because its large enough to be able to generate the levels of trading surpluses it needs to commit itself to these national programmes as part of its manifestation of the defining co-op values.

Co-ops exist for the benefit of their members. 

Co-ops need to be answerable to their members. 

Co-ops should be informed by their members. 

Co-ops should therefore regularly review how well and appropriately they are ensuring this in light of changes to their business models, marketplaces and wider societal expectations and pressures. If not, then co-ops fail to properly evolve, and just like dinosaurs will quickly become extinct after an all-too-brief parade and flurry of excitement.

what’s worse than not getting a grant? – having to pay it back...

I've always held that grants are probably the riskiest type of money you can try and get – not just because of the time you need to spend researching and writing applications, then waiting for trustees to read your submissions, then responding to requests for more information, and eventually being awarded it (only to find that you can only spend it in certain ways), but for the reason that no-one ever tells you about: CLAW-BACK...

Within any grant awarded, you, the recipient, will sign an agreement and somewhere in the small print of it will be a clause that says if you fail to keep all the paperwork you’re supposed to, or don’t spend it on the things you said, or fail to engage with as many people as you thought you would, then you have to pay it back (after you've already spent it...)

And in my experience, advisors, grants officers and others will never stress upon you how real this risk is. And that’s a real concern as I know of several charities and groups over the years who've gone to the wall because they've been found wanting by the funder when it came time to file their reports and paperwork, and they've had to wind up in order to clear the arising debt.

From time to time, I'm invited to support various grant making programmes and initiatives – and I currently find myself having to serve notice on some local, fantastic groups who didn't keep their admin up to date and so now have to find a way to repay thousands of pounds. At its heartbreaking. So please, if you’re applying for grants – make sure you have proper admin systems in place to keep all the paperwork up to date that you’ll need as evidence for the funder. It may be glamorous or sexy or exciting, but it’ll mean you can keep meeting the needs in your community and stay credible in the eyes of everyone.

the delusions of senior management (...and why it harms all of us)

At a recent seminar I attended, I noticed that the more senior a persons’ role is, the more likely they are not to have brought a notepad/pen, etc. with them - yet they know they're coming to an event where they’ll be exposed to learning, and so be wanting to keep notes for their reference later. 

Perhaps this is because that due to the seniority of their role, they assume that others will have taken care of such ’basic’ administrative needs for them (a self-delusion of how important they think they are)?

And this concerns me - this obvious erosion of a person not taking responsibility for themselves is surely at odds with their responsibility for the performance and well-being of others under them? If they can’t be trusted to make sure they’ve a notepad and pen when going to an event where they know they’ll need them, then how can we have faith in their competency to manage significant budgets or large numbers of other people?

There are, thankfully, exceptions I’ve seen to this - people who’ve been on leadership programmes with the likes of Common Purpose, people in co-operatives (where one of the defining values is ‘self-responsibility’), and people in faith-based organisations, where there is a commonality of theological teaching around proving you can be trusted in the small things before being allowed to take on the larger responsibilities…

So perhaps we need to challenge people in authority more; not over the public failings that cost people’s livelihoods, but before they can get to that stage - check that your boss carries a notepad and pen with them when out and about…

How many people does it take to adjust a PC monitor?

OK, so this post is based on the running gag of changing light bulbs, but a Health and Safety (H&S) notice I recently read at a government building really does stagger belief and illustrates not only how bonkers H&S can get, but also how government really is wasting money.

So - the answer? By my reckoning, at least 8 people are needed in this government establishment to adjust a PC monitor.

And the reason for this is the following policy procedure that staff should follow if they feel that their workstation screen needs adjustment:

1) request an assessment from the Health & Safety office (1 admin person to take the call, 1 assessor to come out)

2) If there is found to be a need, this is reviewed by Occupational Health (1 admin person to take the call, 1 assessor to come out)

3) A request for the adjustment is then submitted by your line manager (1 person) to the IT department (1 admin person to take the call, 1 technician to come out)

4) The diversity officer should also be informed (1 officer to file a report)

Is it any wonder then why governments take so long to do anything and it costs us so much for them to do it when they do?

three part management course: lesson 3 - getting dumped on

A little bird was flying south for the winter. It was so cold the bird froze and fell to the ground in a large field.
While it was lying there, a cow came by and dropped some dung on it.
As the frozen bird lay there in the pile of cow dung, it began to realise how warm it was. The dung was actually thawing him out!!

He lay there, all warm and happy, and soon began to sing for joy.

A passing cat heard the bird singing and came to investigate. Following the sound, the cat discovered the bird under the pile of cow dung and promptly dug him out and ate him.

Management Lesson 3:
a) not everyone who sh*ts on you in your enemy,
b) not everyone who gets you out of sh*t is your friend,
c) and when you're in deep sh*t, its best to keep your mouth shut!

three part management course: lesson 2 - getting to the top

A turkey was chatting with a bull: "I would love to be able to get to the top of that tree," sighed the turkey, "but I haven't got the energy." "Well, why don't you nibble on some of my droppings?" the bull replied. "They're packed with nutrients." the turkey pecked at a lump of dung and found it actually gave him enough strength to reach the lowest branch of the tree. The next day, after eating some more dung, he reached the second branch.

Finally, after a fourth night, there he was, proudly perched at the top of the tree.

Soon he was spotted by a farmer, who shot the turkey out of the tree.

Management Lesson 2: bullsh*t might get you to the top, but it won't keep you there

three-part management course: lesson 1 - sitting

A crow was sitting on a tree, doing nothing all day. A small rabbit saw the crow, and asked him, "Can I also sit like you and do nothing all day long?" The crow answered: "Sure, why not?".

So the rabbit sat on the ground below the crow, and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.

Management Lesson 1: to be sitting doing nothing, you must be sitting very, very high up.