Category Archives: Political

Business Personal Political

On the idolatry of investors

December 23, 2012 – 5:09 pm

It’s seems you can’t tune into any sort of political debate on the economy these days without a glut of commentators and politicians lining up to tell us how all our problems can, nay must, be solved by ‘attracting investors’. We must do everything we can, we’re told,  to catch the eye of these incredibly elusive and rare beasts, who are constantly on the move and always on the lookout for the juiciest pickings. They’re a different breed from us if you’re to believe the breathless accounts of expert observers; by all reports globally mobile, notoriously fickle and with the patience of a three year old after three tubes of blue Smarties. Miss your chance by making things hard for them – common faux pas by the poorly prepared include having labour laws and asking them to pay some tax – and they’ll breeze past your metaphorical begging bowl and on to more attractive opportunities. The only answer is to prostrate yourself at the feet of the investment cadre, regardless of whether you have to slash other things like health and education to do so, because if you don’t your destiny is destitution anyway. Or so the narrative goes, admittedly dressed in slightly more palatable phrasing. You’re not supposed to question this, it’s part of the doctrine of the Priesthood of Economics.

Now, having investors ready to fund business ventures is unquestionably a good thing. But if you think that this particular breed of gadfly investor – the straw man most often constructed by financial middle men and right-wing politicians in order to sell a particular philosophy – is the root of the majority of new businesses, then you’re very much mistaken.

Let’s talk fundamentals for a second. In order to launch a business, which I think is universally accepted as the engine of economic prosperity, you basically need 3 kinds of participant:

These 3 roles are pretty much fundamental, and investors are clearly present: but are just one third of the recipe. The inference by some of the narrative I often hear is that while investors are rare, precious and indispensable,  the people in the other two roles are not – if the money’s there, then we can surely rustle up people to do the other jobs, they’re almost two a penny. This is, of course, nonsense. People with good ideas, and people who can execute well on ideas to create a great functioning business, are at least as rare as the investors who would fund it, and in my opinion even more so.

My second point is that if you can do without any of the 3 roles, it’s actually the investor. It’s impossible to launch a new business without ideas, and without execution – nothing happens without these two things. But particularly in the technology space, it’s getting easier and cheaper to launch your own business thanks to cloud services, easy access to global distribution platforms, and the pace of change regularly giving great opportunities to newcomers, and often external investment just isn’t necessary in the early stages. Maybe you’ll scale using external money later, maybe you won’t – with a lot of successfully bootstrapped businesses, it often seems like they’re letting the investors on the bandwagon later not because they actually need the money, but because it’s literally being thrown at them and saying no gets boring after a while ;)

And those businesses who do launch with initial seed investment, do they get it from these nomadic global investors who only glanced their way because the economic environment was designed specifically to attract them? No. Almost exclusively they get this seed money from family, friends or business angels, people who invest because they see the potential of the idea or the people, and who are usually located in the same rough area already.

So what’s my point here? It’s that the political and economic narrative is regularly at odds with the reality that at least – at least – two thirds of the engine of economic prosperity in a community comes from its own internal resources. The kids who might grow up to have great ideas, or become really great at executing on those ideas. The kids that can build new businesses and create an engine of their own prosperity. Too many times we get caught up in a fashionable chase after the globally nomadic investor class, at times sacrificing the things that benefit the local populace in an attempt to pimp ourselves out in return for what often turns out to be frankly modest and, more damagingly, short-term returns whose conditions tend to worsen over time.  The actual effect on lasting prosperity within a community of courting fickle global investment is highly debatable – not only is the majority of seed funding for new business generated from local rather than global sources, but this funding also tends to be much ‘stickier’ – it doesn’t tend to evapourate at the first sign of difficulty, or in the face of slightly better terms available somewhere else.

Let’s think less about global fly-by-night investors, and more about the people with ideas, the people with creativity and powers of execution, and the at most the local angel investors who are here already and don’t need to be attracted with coy waves of a Geisha’s fan. The long-term returns are better anyway.

(With apologies to XKCD for my blatant imitation)

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Political

Once upon a time

October 21, 2012 – 4:46 pm

One upon a time, Lord Poncenby of Moneyshire rode into the small town of Greensville, atop a magnificent white steed and accompanied by an extensive retinue in finest livery. He declared that he loved the town so much, he had come to offer his grace and favour to the simple folk. If they would only swear fealty to his Lordship, and agree to a few modest conditions and changes in the town, he promised they would enjoy a bounty such that the town had never seen. When they agreed, Lord Poncenby appointed a few local barons and minor nobles who had appeared very keen to act as champions, and left a couple of his own castellans in strategic positions to make sure, before galloping back to Moneyshire, presumably for a banquet or something. True to his word, the investment flooded in, and the townspeople enjoyed a golden age of growth and prosperity.

But, as time went on, the lord started to make extra demands – special treatment here, extra tithes there. We can’t refuse those demands, said the local barons, otherwise the lord would withdraw his gentle favours from Greensville and bestow them on the next town over instead, who had already agreed to the new terms. Poncenby himself had made it very clear that he would withdraw his favour if he was not promptly appeased – it seemed his love for Greensville wasn’t quite as wide or deep as the townsfolk had thought. It’s in our own interests, the nobles said, to keep him happy, even if it was a bit painful to do so – after all, where would they find another lord to favour them?

“Why do we need a lord anyway?”, shouted one villager from a small group of malcontents shuffling suspiciously at the edge of the crowd, “If we encouraged a range of businesses owned by people in the village, then we wouldn’t have to beg Lord Poncenby’s favour all the time, with his ever increasing demands!”

“Madness!” shouts a baron, “We will never, ever find a better way to support Greensville than Lord Poncenby. It’s Lord Poncenby or destitution, and you risk bringing his wrath down upon us for suggesting otherwise!”. Fearful of this, the crowd booed and heckled the dissidents until they were quiet.

So Greensville did what Poncenby asked, conceding to more and more demanding terms, and each time the apocalypse scenario of a future without Lord Poncenby’s favour was used to justify it. Soon, Greensville was so specialised to serving House Poncenby that few born in the town had the opportunity to experience anything else, and those who might have had other ideas either put them aside as pipe dreams, or left Greensville forever, to be replaced by other loyal staff from the Poncenby estate. “See?”, said the baron several years on, “I told you it was madness to think the people of Greensville could do anything else, look around!”.

Although Lord Poncenby had appointed barons from the local populace on his initial visit, over time as the old barons retired they were increasingly replaced from outside, heads full of strategies approved directly by the Poncenby estate, the local townspeople increasingly filling mostly the rank and file.

In the end, the people of Greensville counted themselves lucky that House Poncenby continued to grant them its favour, even though each generation found itself working harder and for longer for a poorer lifestyle than their parents had, forced into deeper and deeper debt just to live a normal life. But they did this gratefully, because as everyone knew, it was better than nothing at all, for indeed nothing is all there was except for House Poncenby – some people had suggested otherwise once, a long time ago, but everyone knew that had been nonsense.

House Poncenby itself got richer and richer, but never again visited Greenville, being as it was just one chattel in their portfolio. Other noble houses similarly did very well, convincing vast shires to cede long-term power to them for the price of external investment. Life, as a member of the nobility, was good.

[For a more sensible discussion of the general case, see Capitalism and the contraction of the middle-class]

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Personal Political

Square pegs

October 7, 2012 – 5:43 pm

It seems de rigueur right now for governments and businesses to come together to collectively form skills strategies, in order to co-ordinate the employment needs of business with the output of the education system. On the face of it, this sounds completely logical – kids will eventually grow up and need jobs, and businesses will need new employees to replace those moving on.

But somehow, the concept of aligning education with the needs of existing businesses makes me rather uncomfortable. The core reason is this: is the purpose of education to prepare the next wave of human cogs to slide with minimum effort into the existing industry machine? Or is it to maximise the return on the latent potential present in each student, whichever direction that may lie in? Since I’ve emotively loaded my statement of those options, you can probably tell which view I subscribe to.

Yes, making sure people can get jobs is important – people need money, businesses need people. But in my view, designing a funnel for students into existing industries, rather than extrapolating from their own abilities (wherever that leads), is in danger of becoming a kind of social conditioning, one which could lead to stagnation long term. Are new ideas or talents going to be sidelined in favour of becoming a good employee? Are we in danger of extending the urge to ‘settle’ when it comes to a career at an earlier age, and for less practical dreams to be discarded?

Now, I may well be overstating this, and I’m not basing it on any concrete proposals – it’s just a feeling. My own concern is heightened by the fact that I live on a small island on which by far the most dominant industry is one which never motivated me in the slightest: financial services. The industry dominates so much, those outside of it might as well be shouting into a tornado when it comes to policy – I exist on a fringe and have been lucky enough to establish an independent business model, but many others had no other option but to leave. In my view there’s a particular kind of groupthink going on which is both dangerous and self-sustaining – finance is biggest so we must support it, with that help it grows and becomes more essential, loading risk upon risk. If we effectively design our education to feed this industry, we’re extending the monoculture even further and decreasing the chance that one of those students grow up to do something surprising and successful, like one the few other well-known local names Specsavers.

I’m a believer in allowing young people to keep their options open, of following their passions for as long as possible and not ‘settling’ for the less desirable but practical option any earlier than they have to (and hopefully, not at all). I believe that’s not only personally rewarding, but leads to a more innovative and less stagnant community / economy. If you can’t explore a blank canvas during your formative education, when can you?

Let’s not shave the corners off the square pegs as early as we can, just because all the holes we can see right now are round.

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Political

PSA: Don’t be a dick

August 14, 2011 – 11:17 am

I was In Sydney when the UK riots broke out, and I didn’t hear about it until it had become an international story which showed Britain in the worst possible light. Much hay will be made about this over the coming months, but I thought I’d add my tuppence worth.

Firstly, there can be no justification whatsoever for this behaviour, regardless of your background or surroundings. But it is a good idea to try to understand it, because locking people up after the fact only goes so far. None of what I raise here excuses what we saw on Britain’s city streets, but it does provide a context.

Society is based on the concept that most people will be law-abiding, because it is in their collective interest to be so. It’s one of the defining characteristics of being human that we have the self-control to defer our own short-term gratification in order to achieve longer term objectives, particularly shared objectives. What is happening with increasing frequency is that some people are no longer willing or able to do that – and they’re not all wearing hoodies.

Now, it’s quite easy to point at an obvious example of self-absorbed gratification from the last week, such as someone looting expensive electronic goods from their neighbourhood store. But on a more subtle level, this lack of willingness to defer gratification is something that increasingly pervades our modern society, just at a less visceral level. Our consumer society has for years encouraged people to buy things they can’t afford through the high availability of credit – don’t save up, have it now! Even worse, at every level of society now there is a general attitude that what matters isn’t “what’s right”, it’s “what you can get away with”.

There are myriad examples of this. Politicians scamming their expenses system because it wasn’t strictly disallowed, even though anyone with an ounce of sense should have known it was immoral. Bankers risking all to get rich in the good times, knowing that in the bad times someone else will pick up the tab. Patent trolls gaming a broken legal system to make money from doing nothing at all, by taking it from those that do. Basically, the message at all levels is: if you think you can get away with it, go for it. Even if common sense would tell you that you’re being a dick, it doesn’t matter – law of the jungle and all that.

What we’re really seeing on Britain’s streets is the very ugliest incarnation of this, but it’s rooted in exactly the same attitude, and we can’t pretend they’re separate things. The political or white-collar side of amoral behaviour doesn’t result in houses burning down and people dying, so we don’t notice as much until it goes really badly wrong (like in the credit crunch), but it’s ultimately the same thought process – I know this is wrong, but I’m going to do it anyway, because either I think I won’t get caught, or there’s some clever legal wrangling that lets me off the hook even if I do.

Some might cite the demise of religion as a cause of the lack of moral fiber, but that’s not it at all (the Catholic church is one of the worst perpetrators after all). No, it’s really very simple – more people need to stand up for a singular and easily communicated principle: “don’t be a dick”. And stop pretending that you don’t know when you’re being a dick, or that you have some kind of justification for it. We need to stop looking for technicalities to excuse behaviour we know is wrong, and for ways to avoid getting caught. Laws are there as a distillation of this concept (sometimes they get it wrong too), but the original form is much simpler to understand – you really don’t need a lawyer to tell you when you’re being a dick. All the people involved in the subprime mortgage crash knew they were doing something dodgy, but they carried on anyway. Take this same attitude and put it in the mind of an ill-educated thug with a brick in his hand, and what do you think is going to happen?

If you want to live in a pleasant society, live by example, whether you wear a hoodie or an Armani suit. You really don’t want to live in a society where everyone just does what they think they can get away with. Maybe it took thugs in the street burning and looting to demonstrate the eventual trajectory of this to you, but that’s just the tip of a particularly dirty iceberg that every one of us has a part to play in cleaning up.

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Political

Grow your own economy

January 30, 2011 – 5:21 pm

We hear a lot about globalisation these days; how money, people and business move freely around the world (although that has had a few teeny problems of late) and how countries must therefore compete in that market for investment, and ultimately jobs and economic success in general. Much of this is true and common sense, however, I do object to the tone and emphasis that is used whenever this argument is made. There seems to be a preference of late for attracting external players to flirt with local economies for as long as possible before they get bored and move somewhere cheaper, rather than focussing on organic growth of businesses from within the existing local entrepreneurial base. You can do both of course, but in recent years I’ve observed that here and in some other places in the world, the balance is strongly in favour of the short-term plan of courting of large, external players, versus the long-term prospects of ‘growing your own’.

Of course, inward investment is a good thing, but too often this investment isn’t in new local businesses, it’s simply about grafting a globally mobile business to the local economy for a while, usually as a result of some kind of sweetener (a tax break, a public private investment, etc).  It’s a ‘quick fix’, injecting money into the economy quickly (perhaps most importantly, within the time frame of a politician’s tenure), but when viewed at a macro scale it’s also very much a temporary one which can be pulled out at almost any time.

Global companies don’t even hide their temporary commitment; in fact, quite the opposite – they are always exploiting this to lobby governments into making changes which favour them, the line is usually “You’re dependent on us now, so you’d better keep things attractive for us (subtext: at the expense of others if necessary), or we walk.”. You see this all the time – the shrinking of the UK games industry because the UK doesn’t  have tax breaks like Canada, and here in my local jurisdiction the introduction of a tax regime which shifts the tax burden to ordinary people and away from companies in order to appease the financial services industry. In the end, being so dependent on such fickle and demanding ‘friends’ is not the greatest of strategies. At times, it can almost be a protection racket – “Nice economy you’ve got here, it would be a shame if something happened to it” (see this Monty Python sketch).

Every economy needs a bedrock of locally-driven, independent entrepreneurship, made up of of people who do business in that economy because they want to, or because it’s their home, not because someone bribed them to bring their money here and are constantly looking for the next sweetener. There are countless success stories of businesses that went global from a local, organic base, such as Ben and Jerry’s and Specsavers, and these companies have kept their attachment to their origins. Such businesses are ‘stickier’ and less fickle, and I’m willing to bet they require only a tiny fraction of the overall cost (once you count tax breaks, subsidies, and other policy changes / deals) to attract and retain than an equivalently sized global player. It takes more time to get there, but when it does, it’s far less likely to be going anywhere.

I’m not suggesting that we somehow cling on to protectionism, nor do I deny the benefits of globalisation. What I am saying is that in my experience, the balance of policy making is way off in favour of the global players at the expense of others. Maybe if politicians weren’t so easily impressed by financiers in expensive suits with their short-term promises of wealth injection, and learned instead to see the long-term sustainable potential in that garage-dwelling startup, they’d be better at not skewing the economic landscape towards the ‘floaters’ rather than the ‘stayers’.

It’s actually why I shake my head when I see people claiming that the UK needs tax breaks for games companies, to compete with Canada and other places. Personally, I think that even if you gave a tax break to the companies that are relocating away from the UK because of this, they’d just be asking for something else next year. Where does the bribery end? I think that games companies that only go where the tax breaks are, are probably not worth trying to hold on to. I sincerely hope that the talented people who are sadly left out of a job because of this are able to start up or join independent game businesses of their own, and dare I say are likely to be a damn sight more creative in that environment too. The UK games industry has lost much of its individuality in recent years, and who knows, this process might well regain some of that.

So I guess my main point is that bribing and paying protection money is not a sustainable way to run an economy. Sounds obvious really?

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Political

Organised bigotry

February 2, 2010 – 2:22 pm

Well, you’ve got to accept that Pope Benedict XVI isn’t afraid to tell people what he thinks.

The recent furore about his comments that the church should be exempt from UK equality laws, because it would “impose unjust limitations on the freedom of religious communities to act in accordance with their beliefs” is pretty chilling. Cue a shot of loads of people on the street with banners saying that Catholics should have the ‘freedom’ to discriminate against gay and transgender individuals because of their beliefs. The message: that strongly-held beliefs should exempt you from having to adhere to the same rules of equality as everyone else, and to discriminate against anyone you like so long as you believe it’s right, or that a book (or rather,  your interpretation of it) tells you that it’s ok.

I’m amazed that some people can’t see the blatantly obvious flaw in this argument. If strongly held beliefs were a viable excuse for treating other people badly, then most of the atrocities in the last century could be excused too, if the people committing them truly believed their doctrine of choice advocated it. Where’s the line? I suspect the answer is ‘wherever the Pope wants it to be’.

A bigot in a fancy robe and quoting doctrine is still a bigot. There is never any excuse for treating your fellow human beings as anything other than equals, and if your religion tells you otherwise, you might want to update your thinking by, I don’t know, maybe a couple of thousand years or so. The rest of society’s moved on a tad in that time, such us not hacking each other apart with swords, or burning people at the stake for curing the local donkey. Being a decent human being to other people regardless of their race/sexual orientation etc kinda came out of that whole transition – you might want to give it a shot sometime.

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legal Personal Political

Those who can, do. Those who can’t, patent business methods.

November 4, 2009 – 3:45 pm

There was a time when patents represented innovation. Thanks to the relaxing of patent rules as championed by the US patent office in a blatant attempt to curry favour with dubious business interests, and make a bit of money at the same time, those days are gone.

These days, patents are a tool for those who have no business model other than litigation, either because their primary business model failed, or by design because filing patents and hoping a lawsuit or three will stick (or rather, be settled out of court) is easier than actually building something good.

Inventors are supposed to be builders of things, things that astound and amaze us, and that further the interests of humankind as a whole. Patents should protect their genuine innovations. But now, for every genuine invention that’s patented, there are a thousands of restatements of ideas that have been sloshing around the IT world for the last 30 years. It seems that now, to be an inventor and make money from patents, you just need a lawyer, a web browser, a bit of seed funding and the ability to fill in a few forms. The pool of human knowledge does not expand, and the resulting patent lawsuits positively put a drain on the people who are actually going out there and trying to make ideas work in practice. You know, the doing part. The making it work part. Not just sitting on your arse filing paperwork.

Whenever I see yet another failed company trying to pretend it has value from its highly vague and often derivative patent portfolio and attacking companies that are actually out there creating stuff people like, I want to stab all the world’s patent lawyers in the face with a biro. The world is terribly, terribly screwed up when we reward people for savvy administrative & legal navigation over, I don’t know, doing something that matters.

There are too many vested interests in the industry for people to actually own up and admit that a huge proportion of the patents being registered are piles of steaming horse manure, especially since they’re paying their lawyers handsomely to produce it – even those who produce them ‘defensively’ are just as bad. The more they produce of it, the more it stinks up the place for everyone. In London repeated cholera epidemics finally made authorities deal with the Big Stink, we could do with the equivalent in IT instead of the big players merely brushing the problem under the carpet (mostly because they don’t want to lose their own expensive portfolios from their balance sheet), metaphorically walking past with scented hankerchiefs under their noses.

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Health Political

Lies, damn lies, and lobbyists

August 14, 2009 – 10:52 am

I’ve watched with some entertainment the latest round of scraps across the pond about health care, which has now turned into a Brit-bashing exercise. Apparantly the NHS is ‘Orwellian’ and ‘Evil’ (allegedly that particular accusation was from the eminent scholar and international expert Sarah Palin) according to the American right-wing – which, when perceived from this side of the Atlantic constitutes most of the political spectrum compared to what is considered centrist here – all of which is news to most people in Britain, barring the usual suspects on the fringes of the Conservative party that their own leader would like to disown, but who always turn up on American TV because no-one listens to them over here.

I live in a Crown Dependency which unfortunately doesn’t benefit from the NHS, and frankly I’d love to have it over here, instead of paid-for primary care and state-run specialist care as we have (I’ve spent an awful lot of money on physios and doctors over the years). My parents moved back to the mainland a few years back and have had nothing but positive experiences with the NHS since; when we were visiting, my Mum was taken ill late at night and an NHS doctor was on the scene at her home within 45 minutes, all for no charge – something you would pay through the nose for here. It’s not perfect, but frankly IMO anyone who considers it optimal to have profit interests involved in the process of saving lives is either smoking something, or has a vested interest.

But, regardless of your point of view, it’s the blatant lies which are most amusing. My favourite is this quote from the editorial in Investor’s Business Daily, a national American financial newspaper:

“People such as scientist Stephen Hawking wouldn’t have a chance in the UK, where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless,”

For goodness sakes, who writes this nonsense? Prof. Hawking has lived in the UK all his life, and has hit back himself at this article explaining that he’s around today precisely because of the NHS, not despite it. Clearly facts are irrelevant when it comes to reinforcing your personal point of view. They’ve tried to take it back, but it just makes them look a little more stupid, especially casually tossing the word ‘Colony’ in there to somehow bolster the emotive side of the argument (taking speech tips from Mugabe now? not smart). Stephen Hawking was ‘a bad example’? In other words, they’re just making it up.

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Local Political

Living longer means working longer, obviously

July 14, 2009 – 12:13 pm

So, in our local juristiction we’re finally having the discussion about retirement age, ie raising it to 67 by 2031, and probably higher than that later (not mentioned yet, but it’s bound to happen). Somehow, this is a shock to some people.

The fact is that the welfare system, retirement packages, and  even the economy in general were just not constructed on the understanding that an increasing number of people would be retired for up to one third of their life. The retirement age of 65 was set on the understanding that not everyone would make it, and those that did would maybe have 5-10 years, it just can’t cope with people being retired for 20-25 years on average, as it will almost certainly be in 20 years time.

I actually think 67 is being conservative – I’m personally expecting to have to work until I’m 70, and provided I still have my marbles, I’d actually welcome that in many ways; I do think that being active keeps you sharp, and work-related things for me are the best way to stay on the ball. I also think that we need to think differently about retirement; in the days of people living longer I don’t think a simplistic 2-speed arrangement – ‘work’ and ‘retirement’ – really fits with how people live anymore. In practice, a lot of people switch careers one or more times, quit and start businesses, take a gear shift when their kids grow up or their mortgage is paid off, all before ‘proper’ retirement, so how about supporting that kind of multi-stage transition in the ‘retirement’ structure? People in the armed forces or police have that sort of arrangement already; they generally retire from the service with a pension in their late forties or early fifties, and then carry on doing something else between then and state retirement, allowing them some level of security while still being economically active. That sort of ‘staged’ approach seems more suitable to me in a situation where people are living longer lives.

What’s clear though is that things can’t stay the way they are; people who thought the current retirement age could continue as it is were frankly being incredibly naive. In the end, would you rather:

  • Work longer
  • Pay higher taxes
  • Be forced to smoke 40-a-day, or partake in high-risk recreational activites to thin the ranks?

Them’s your choices ;)

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Business Personal Political Tech

Process: no replacement for people and principles

February 27, 2009 – 4:22 pm

Over my years in working in the IT business, one thing that’s a constant is that we’re never short of talk about the latest “Process” that we should be following. There have been a shedload of them over the years I’ve been doing this, and I’ve tried a load of them out and encountered them via third parties, and while some are interesting and useful when taken as a basis for adaption to individual circumstances, one thing I absolutely cannot stand is the kind of people that focus on this as a proof or guarantee that their projects are being run well.

Anyone who has dealt with a large consultancy firm will have encountered the scenario – that they of course tick all the boxes and fulfil all the paper requirements of procedure and ‘best practice’, but when push comes to shove all that really matters is what individual you get doing the job in the end. All the procedures and accreditation in the world will not change the fact that if you get some of the pieces of dead wood in the company, you’re screwed – it’s just that the process of becoming screwed will be handled with the appropriate paper trail and procedural tick-boxes. Conversely from the same company you can get some absolute stars who totally carry the project and make it much better than it would be otherwise. What difference did the process make to this outcome? At best, if it was a good process it might have oiled the wheels – often the opposite is true of course, especially with large bureaucracies. Good people will function well with no process, and may function better with an efficient, lightweight process, whilst bad people will do just as badly with any process and may well enjoy hiding behind the more complicated ones when things don’t work.

This isn’t an argument for not adopting reasonable processes – like I say they can oil the wheels when they’re appropriately deployed. Rather, this is about recognising that they are entirely secondary to the qualities of the people involved. I really wish more people would recognise this truth instead of pretending they can rubber-stamp an organisation with universal seal of quality through processes alone. People matter. What those people believe in and are motivated by matters. Process – it’s really just icing. It makes management types feel better, and allows them to believe they’re doing due diligence when vetting companies, but in the real world, it’s nothing but a helping hand.

What made me think of this today? Banking, oddly – specifically the FSA talking about how much of a pigs-ear they’d made of banking sector regulation. They were ticking all the boxes, making sure bosses didn’t have criminal records, tidying up the minutiae – but not once did they ask whether the principles of what was going on at the banks were at all questionable. They just assumed that bankers would act rationally, and all they had to do was check the processes were in place, whether reporting was in place, the right number of risk managers were on board etc. And here too, it’s proven that process doesn’t matter in the grand scheme of things – what matters is the people you have doing the job, and what their principles and motivations are. No process is going to save you if the people don’t have the right stuff – and the FSA have rather belated realised that as they watch the ashes of the economy smoulder because they let a group of unprincipled, reckless, money-grabbing banking executives continue to run the show, just because they had the right paper trail.

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