Ten years after the financial crisis..

Good series of articles in the Weekend FT magazine marking 10 years since the start of the financial crisis.

The commencement is recorded as the day the chairman of Northern Rock, Lord Ridley, went to the Bank of England to beg for money from the Governor, Mervyn King. Ridley (5th Viscount Ridley & Baron Wensleydale) resigned later that year but was rewarded with a life peerage in 2013. He is a keen Brexit supporter and climate change sceptic…

Adam Applegarth was chief executive of Northern Rock also quit in 2007. He received a £785,000 “golden handshake” and a pension of £2.6m…

Northern Rock had distributed £235.8 million to charitable causes in the North East through its foundation – mostly funded from its profits. The new owners Virgin Money stopped making donations so the foundation closed…

Sub-prime mortgages which contributed to the crash worldwide are alive and well and are now called “nonprime”.  There is pressure from investors who want yield, skewed incentives on Wall Street and the Trump government who want to relax the restraints introduced by President Obama.

No one has been held accountable for the crash.

My favourite story is from Alistair Darling who was Chancellor of the Exchequer. A CEO of a UK bank tied to reassure him and said, “From now on we’ll only take risks we understand.” So what was he doing before that?

A reminder – the most dangerous words anybody in finance can say are, “this time it’s different”.

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Peter Ward exposes the NHS(E)’s “Cunning Plan”

Nice editorial in the BDJ from BDA Chief Exec Peter Ward. HERE

Edited highlights only

Death by commissioning

….That master plan looks like a determined effort to wrest away NHS dental care from small autonomous units. That model that has been supplied by a legion of conscientious practitioners ever since the beginning of the NHS. This applies both in salaried dental service and in general practice.…….

….’Savings’ is the name of the game. That coupled with ongoing ‘efficiency’ signals a race to the bottom, as each year becomes more and more squeezed than the last. It can’t be long before the social enterprises seek freedom from the obligations of NHS terms and conditions – think about the savings to be had there!…..

…..So, it is clear that the NHS in England stands to gain by ‘going large’ in all its areas of practice. But its gain is at the expense of the dentists who serve it. In essence, the wholesale dismantling of access to NHS terms and conditions provides the opportunity for savings. Proposing such a move overtly would be met with horror and outrage. Doing it stealthily and by downstream consequence may be less dramatic but the result is the same. It is not a good result for either dentists practising in England, or for patients expecting enduring, high quality care…

If only it was as easy to dismiss as Baldrick…

 

The Monday Morning Quote #416

The four most expensive words in the English language:

“This Time It’s Different”.

Sir John Templeton

 

The Monday Morning Quote #408

“Productivity isn’t  everything but in the long run it is almost everything”.

Paul Krugman (Nobel prize winning economist)

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The Weekend Read – What they don’t teach you at Harvard Business School by Mark H McCormack

9781781253397First published in 1984, I see that it is still one of the top sellers in the Business sections of airport book shops. Its very longevity proves that it either must have something going for it or because it has always been popular it must be good. Well you pays your money and you takes your choice. I find it a well written, easily digestible book with plenty to offer anyone in any business.

I read it when it was first released by Collins in 1984 (so yet another thank you to my Dad)  thinking that the lessons of “big business” which at the time were a million miles away from my life as a peripatetic associate in dental practices would not apply to my life. In this as in many other things I was wrong – the fundamentals of business large or small are the same. I have re-read it a couple of times since and although the landscape may have changed the fundamentals have not – nor will they.

The book is split into three sections People, Sales & Negotiations, and Running a Business. The opening four chapters should be compulsory reading for all new dental graduates including as they do with getting on with people, making an impression and getting ahead. The Sales and Negotiations isn’t as high blown as you may think and has plenty of nitty gritty advice.

The last four chapters on running a business are invaluable to anyone thinking about getting into business on their own or wanting to be a first class employee. There is a lot of B***S*** spoken these days about being an entrepreneur; those people who say they want to be an entrepreneur, especially in dentistry, would do well to read the last chapter of the book where he states that 99% of people should work for somebody. Start by examining your motives and if they are dreams, if you are running away from things or you ‘want to make a lot of money’ then McCormack writes, “forget it”.

In case you don’t know who Mark McCormack was (he died in 2003) here’s the blurb, “dubbed ‘the most powerful man in sport’, founded IMG (International Management Group) on a handshake. It was the first and is the most successful sports management company in the world, becoming a multi-million dollar, worldwide corporation whose activities in the business and marketing spheres are so diverse as to defy classification. Here, Mark McCormack reveals the secret of his success to key business issues such as analysing yourself and others, sales, negotiation, time management, decision-making and communication. What They Don’t Teach You at Harvard Business School fills the gaps between a business school education and the street knowledge that comes from the day-to-day experience of running a business and managing people. It shares the business skills, techniques and wisdom gleaned from twenty-five years of experience.”

Available from The Book Depository.

Pharmacists – another endangered species?

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The Minister for Community and Social Care (Alistair Burt) spoke in Parliament on 24 May 2016 a few days before he silver tongued the BDA conference with similar words after which I wrote, “Much of his speech we have heard before and it did little to convince me that (NHS) dentistry is anything other than an irregular irritation in the big picture of health. There will be no more funding in the foreseeable future, no matter what sort of contract is produced, be prepared to deliver it with a tighter belt.”

Hansard has the full transcript of May 24th here but I have selected the phrases (reminiscent of Bullshit Bingo) that chimed with me, thinking back to his speech in Manchester.

We want to empower primary care health professionals to take up opportunities to embrace new ways of working with other health professionals to transform the quality of care that they provide to patients and the public. In particular, we want to free up pharmacists to spend more time delivering clinical and public health services to patients and the public in a range of settings.

I have seen at first hand the fantastic work that pharmacists are doing from within community pharmacies, such as in healthy living pharmacies and other settings, and colleagues have also paid tribute to that work. Pharmacy-led services, such as the recently recommissioned community pharmacy seasonal influenza vaccination programme, can help to relieve pressure on GPs and A&E departments……

The fund is set to rise by an additional £20 million a year. By 2020-21, we will have invested £300 million in addition to the £31 million that NHS England is investing in funding, recruiting and employing clinical pharmacists to work alongside GPs to ease current pressures in general practice and improve patient safety.

The chief pharmaceutical officer, has commissioned an independent review of community pharmacy clinical services to make recommendations on future models for commissioning pharmacy-led clinical services. Clinical pharmacists will offer complementary skills to GPs, giving patients access to a multi-disciplinary skill set, and helping GPs manage the demands on their time and provide a better experience for patients. This is a great opportunity for pharmacists wanting to make better use of their clinical skills and develop them further.

Sweet words indeed, after Alister Burt, who seemed to me to be a pragmatic and likeable (unlike his boss Mr Hunt) moved to the back benches post Brexit vote, the words are transformed into reality.

Pharmacy plan ‘could lead to High Street closures’ BBC website (October 20th 2016)

The Department of Health said it wanted to reduce the £2.8bn a year pharmacy bill by more than £200m over the next two years.
…It has been suggested cuts on this scale could lead to up to 3,000 of the 11,700 pharmacies being closed.
Currently, the average pharmacy receives £220,000 a year from the NHS.
This accounts for between 80% and 90% of their income and includes a flat rate of £25,000, which nearly all pharmacies receive.
The changes being announced scrap that and put much more emphasis on performance-related funding, with ministers understood to see the current system as outdated and inefficient…

I repeat….There will be no more funding …. no matter what sort of contract is produced, be prepare to deliver it with a tighter belt.

Sidney Toledano on numbers.

I have recently worked with a couple of clients who have been obsessing about and dominated by numbers – it turns out that a previous adviser had insisted that they use systems where everything is counted, measured and future performance is predicted. The problem is that many of the predictions were unrealistically optimistic and the subsequent counting and comparing has produced a sense of failure in the management team. Add in a feeling of overwhelm where the counting takes over from the doing and there is a feeling of inertia. I love numbers as much as, if not more than, the next man or woman but by no means are they the be-all and end-all of a business. So the Key Performance Indicators (KPIs) should be decided and monitored but they need to be realistic, easy to see and part of a system where changes can be made in response to stimulus.

I read the interview from which this is an excerpt whilst on a flight over the Irish Sea, and I was thinking that at the front of the ‘plane there were a couple of pilots with a bank of instruments in front of them which they were monitoring but not obsessing about. In the same way that when you drive a car you are subconsciously scanning speedometer, fuel gauge, temperature, sat-nav, rev-counter, rear mirrors and it’s only when one of these shows something for concern that you take action.

It’s the doing that is most important, not the counting – that’s just a tool.

Sidney Toledano has been the President & Chief Executive of Dior Couture since 1998. During his time in charge the group have opened another 200 stores and both turnover has risen from €134 million to €5 billion. In his interview in the FT recently I was struck by the former mathematician’s attitude to numbers and business.

Sidney+Toledano+Arrivals+Guggenheim+International+wCmpa01HuxGl“We already had the culture at Dior, but we had to be more agile and reactive. That is why I always say, ‘If business is not good, don’t stay in the office’. Some people try to find out what’s wrong through the numbers. But if you stay in the office nothing will change.”

“My Father taught me it’s better to have no explanation for success than to have a lot of explanations for a failure. Success is intuition, action, decision and take some risks. Frankly, numbers; I see them every day when I get the worldwide update. I can see every single figure for every single piece. But I don’t spend more than 10-15 minutes on it because I follow them every day.”

“It’s like a good doctor. They see the numbers very quickly – temperature, whatever – but they talk to the patient. I’ve never seen a doctor fixing a problem with a thermometer. And you never fix a problem with the numbers. Don’t look and you miss everything.”

 

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