Author Archives: Julian Rawel

About Julian Rawel

Julian Rawel is Director of Executive Education at the School of Management. He has previously held positions of Groups Sales and Marketing Director, Eurocamp plc and Marketing Director, Royal Armouries Museum. Julian has been a non executive director of travel industry bodies ABTA and AITO. He has a BA in Geography from Leicester University and an MSc in Tourism Management from Manchester Metropolitan University. Julian is a Fellow of the Chartered Institute of Marketing and a Chartered Marketer.

Specialties:  Consumer and business marketing, Branding, General management, Management development

Can managers teach management skills?

Julian RawelThis post also appears as a guest article on the Chartered Management Institute’s blog.

New research by the Forum of Private Business has found that most of their members are not investing in management skills, preferring to “teach themselves” or take informal advice or training. This is largely down to cutting costs in difficult times but could end up costing businesses more in the long run.

1. “Doing it yourself” in business is tempting in tough times

In difficult times, there is a danger that management training and education becomes a box ticking exercise rather than a real investment that will benefit the business. It is certainly tempting in difficult times to try and “do it yourself” but small businesses in particular should be equipping themselves now with the skills to be more productive and profitable when they come out of dark times.

2. Being a good manager doesn’t make you a good teacher

The fact is that just because you are a good manager and have a lot of knowledge of management techniques, doesn’t mean that you can impart that knowledge to colleagues – or that they will listen and learn. Academics at our Management School wouldn’t start doing our own catering because it is not what we are set up to do and would take us away from our core business of teaching and research – likewise, managers shouldn’t think that they are the best people to teach their staff.

3. Management training should be taken as seriously as any other qualification

Just as you wouldn’t hire a “self taught” senior accountant without credible qualifications, you shouldn’t promote staff into managerial positions without credible management training. If businesses are serious about developing their people, they need to be serious about how they do this and who delivers it – “doing it yourself” or signing up for an informal training session doesn’t send the right message to staff and won’t equip them with the necessary skills to increase productivity and grow the business in the long term. Cheap training is wasted money and “doing it yourself” is wasted time.

As director of executive education at a Management School you may be thinking “you would say that”. We don’t 100% guarantee increased profitability because as with all education students get out what they put in – but staff are more likely to put their all into it if you are investing in their future.

Will the Wild West return to the Middle East? The ups and downs - and up again? - of the Dubai economy

dubai-skylineI am sitting in a restaurant working my way through a hearty bowl of spaghetti Bolognaise.  Through the window I can see the temperature gauge recording a frosty minus 4.  Kids are playing in the snow and adults are going up high on the chairlifts. Brrrr… it makes me cold just to watch them.

But I’ll have to take my jacket off when I go outside.  Why?  Because I’m in Dubai, in Emirates (shopping) Mall, looking at one of the world’s largest indoor ski slopes.

When I go out it will be at least forty degrees.  Is this reality?  Do we really need such a huge indoor ski slope in the desert?  No, but this was developed when Dubai was very much part of the Wild West in the Middle East!

ski-slope

Dubai’s rapid growth

The commercial history of Dubai is well known.  From stretch of desert with fairly old fashioned trading port it transformed itself into a haven of commerciality based on the development of wealth rather than exploitation of oil, which is not plentiful.  Dubai represented the lightning speed growth of the last two decades. It was all about the pushing up of property prices which in turn fuelled the boom in property, commercial, retail and leisure development which in turn fuelled paper wealth.

For many years this was very much an unstoppable train or perhaps the period’s answer to the gold rush.  There wasn’t gold in “them” hills (or dunes) but there certainly was property (and property values).

Property prices in Dubai were unsustainable

Fast forward to 2008 and we all know what happened.  Property prices were unsustainable.  Building stopped immediately.  Ex patriots left in their droves and Dubai’s Emirate neighbour Abu Dhabi saw the possibilities of real regional control.  Dubai is very much a business case which shows that, excuse this metaphor, you can’t build cities on foundations of sand.  Upward speculation only works whilst the market is going up.

Is confidence returning to Dubai?

Moving on to 2010 and Dubai seems to be recovering a little confidence.  Cranes are moving again albeit in tens rather than hundreds.  The new metro system is up and running.  Emirates the national airline is producing good numbers and there is generally a feeling that whilst life is not fantastic it is becoming more bearable.

The Dubai Real Estate Blog said at the end of October this year: “Even though the real estate sector of Dubai faced tough time and many people had to bear great losses, still it is viewed as a long term investment option.”

Interestingly from a commercial perspective, many of Dubai’s business leaders are saying that the shakeup, albeit highly dramatic, will probably prove to have been a good thing going forward.  There is realism that the future of Dubai can still be a buoyant one and one that is based on it being a financial services, leisure and property hub.  The difference is the route to success.

CSR: how do we keep a focus on the customer through public sector cuts?

CoinsWell we knew it was going to be tough but the Comprehensive Spending Review has probably presented those of us working in the public sector with challenges even greater than expected.

1. Public sector cuts are long term – and permanent

Cuts in public expenditure are not just here for the next few years whilst the government claws back the mounting public debt.  Taps rarely get turned back on big time, even as election mechanisms.  So many of the cuts and changes taking place now are likely to become enshrined in our working practices – the age of austerity will not emerge as the age of plenty.

So do we cut wherever possible, moan about it for as long as possible, claim that we were always pretty good anyway and just try and get through this crisis?  Well, no because this crisis will result in permanent change, not temporary interruption.

2. Rationalising back office systems and new working

As Dean Shoesmith writes in the Public Sector People Managers’ Association blog ….

“Many of us have been gearing up for this for some considerable time – and in my two boroughs (Sutton and Merton) respective transformation programmes are well on their way, recognising that we need to get on and make difficult decisions quickly – not only to meet new budget constraints but also to assist with effective employee engagement (dithering will not pass muster in my view).”

Bradford is one of the pilots for the Total Place initiative – focusing on how public sector organisations can work together to facilitate real efficiencies.  The principles behind this tend to be driven by the rationalisation of back office systems such as procurement, IT, HR and physical locations. These are fine in as far as they go and are by no means easy to develop/implement.  Bringing together education, health, council and emergency services systems is challenging! But if developed in an incremental, inclusive and sensitive manner, there are opportunities for some serious economies.

But should this be the limit of our ambitions?  Like it or not the coalition government and its Big Society say we need to go further.  It’s about redefining front office as well as back office, promoting real change. We need to approach this in a spirit of openness and creativity.  Some of us might not like the fact that Primary Care Trusts are being replaced by GP commissioning bodies. We might not like Michael Goves’s new focus on moving educational control away from councils to individual schools.  But once the juggernaut starts rolling it is difficult to hold it back.

3. Opportunity to customise our public services?

So we might as well use the “opportunity” to reflect on how we run our public services. Is there a case for real change?

Take the health service for example.  At Bradford University School of Management I develop a number of programmes for health service managers. What we are starting to focus on is the patient (or customer) journey. There has historically been a tendency to work vertically rather than horizontally – recommendation from GP, communication with consultant, communication from outpatient clinic to patient via GP, a consultation with consultant – providing the operating schedule does not get in the way – and then the journey through different hospital interventions, quite possibly ending with council social services.

As both the health service and councils get squeezed, post operative responsibility could become a natural battle ground. Ward or convalescent home – which side will pay? The patient thinks about one process – getting well – not two (or more) systems.

What about education?  I am a governor of a large comprehensive and academy status is a serious agenda item. Here we are being encouraged to think “them” and “us”.  Autonomy could mean more money and more freedom.  But will semi independent status for the best schools contribute towards a two tier system? Good schools will often cite wasteful council activity. But will two systems necessarily work and what replaces academies if they don’t deliver?

Fiona Millar of the Local Schools Network argues that partnerships between schools would be a good thing – but we can do that without academy status.

4. Public sector

What we need is for forward thinking public sector organisations to think customer/patient/student/tax payer and how, together, they can contribute to an improved front as well as back office. Weaknesses in the current system will be better tackled in partnership.

In parts of Bradford (for example diabetes care) we are starting to see consultants venture  out into the community, recognising the customer journey, creating a closeness of consultants to their communities, focusing on prevention as well as cure – joined up thinking.

Real change in the public sector needs a joined up thinking approach, a willingness to question current vertical processes and the strength of purpose to move the existing boundaries to a better, more sustainable position.  Are we prepared to go that way?  Do we have the courage?  Can we afford not to?

How will the Comprehensive Spending Review affect the Private Sector?

spending-reviewThis blog first appeared as a guest blog for the Forum of Private Business

How will the Comprehensive Spending Review affect the Private Sector?

Soon after the election, the government announced the bonfire of quangos – and scrapping 192 public bodies.  This week we wait to hear the full impact of cuts across the rest of the public sector and tax changes for individuals and business.  And alongside this, Sir Philip Green is calling for centralised procurement.

1. Where will the cuts affect the private sector?

The way business is done with the government

Every government department will have to completely revise the way they do business.  The message last week is that it will be the larger businesses who will win the new government contracts – but expected to deliver major cost savings for winning them.

Middle income spending will be squeezed

It is sounding like those earning more than £35k are going to be hit the hardest.  £40k may sound a lot but people earning at these levels tend to have every sort of expenditure, heavy mortgages – and high aspirations.  Discretionary spending will be hit.  And every business in the country who makes things for this market or is retailing to them needs to anticipate the effects.  Even if individuals are not as badly hit as they fear, perceptually the mood will be this is the time to hold back on spending.

2. What are the new opportunities for businesses post CSR?

Every downturn has its opportunities.  The art is to be open-minded about these and be prepared to be very flexible to exploit them.

Yet more efficiencies

The government and businesses will all be looking for yet more cost-savings.  Businesses need to look for ways to

  • Add on additional services and products to provide greater buying efficiency – this could be done by partnerships with other businesses or expanding the product range that you offer
  • Look for the ‘big beasts’ in business today, still stuck with large overheads – even if they have made cutbacks themselves.  Recessions provide opportunities to start new businesses with low overheads – property, rent and employment are all low cost at the moment – and undercut the larger players.  But remember, whatever they say, government departments will still feel more comfortable commissioning from the ‘big beasts’ as they have always done.  The new kids have really got to show value

What are people still buying?

Just because we are in recession does not mean the supermarket shelves are bare.  All four of the top 4 supermarkets have traded very effectively through the recession – spotting that if people cannot afford to eat out, they will treat themselves to a ‘dine-in’ experience, which supermarkets have packaged and delivered at phenomenal value.  Where and how can you tap into this market and add value?  How can you get people to buy your products in new ways, packaged differently?

A new economy

The days of the economy growing year on year are gone for the foreseeable future.  But the former heady days were largely founded on speculation – there was no substance behind the growth.  Now it is time to go back to making and designing ‘things’.  You need to produce products with real value, so people can see where their money is going.

Don’t expect help from parliament!  But do train your local MP!

The new intake of MPs is largely made up of lawyers and PRs.  We could debate how business-focused these careers are, but I will say most of them don’t have a clue about how to create wealth.  They are divorced from what is going to happen to business.

It’s up to all of us to help our MPs to understand business better.  Have you got any suggestions as to how we do this? Would welcome your thoughts.

Public sector cuts – 5 ways to downsize without losing skills and knowledge

public-spending-cutsThe country is bracing itself for the Comprehensive Spending Review on 20 October.  And local government and NHS trust bosses are looking at how they shed large numbers of highly experienced employees without threatening the long term health of these very organisations.

Publictechnology.net highlights the point that a large proportion of the redundancies will result in a vast knowledge base going out of the door.

Organisations need to take steps to capture that knowledge quickly and deliberately and transfer it to those that will be responsible for running these organisations in the coming years.

In my own work with the NHS I come across many managers who started their careers as clinicians.  In the reorganisation it is likely that a proportion of these managers will be re-employed in their original discipline.  This is a group that, going forward, will still have a strong relationship with the organisation and their previous managerial experience could therefore still be useful.

The people that are moved on and downsized out of the organisation are the group that should be recognised as having a significant contribution to make – before they go.

Cutting costs and maintaining good working relationships in the current economic environment does present some challenges but it is possible.

1. Work with people who are leaving

Embarrassment and emotion directed to those who are going is unproductive – ‘positive sensitivity’ is a better approach.  In organisations that are stressed, it may feel uncomfortable to engage with the people who are losing their jobs but this is something that every public sector organisation in the country needs to face up to in the coming months.

2. Value those who are leaving

Employers should demonstrate they still value these employees for the skills they have to pass on to others

3. Set up systems to capture knowledge

People are not leaving overnight.  They will be still be around for a while so tap into their views and experience formally and informally while you have the opportunity

4. Talk

Don’t be too scared to talk – instead learn what you can, while you can

5. Positive morale for those staying

Turning a negative into a positive improves morale for remaining employees and makes those who are going valued for their contribution.

Consider this scenario: an NHS Trust that is required to be more efficient and effective previously employed two clinical directors. Going forward only one will be recruited – what could be more wasteful than to watch the knowledge and experience of the other vanish from the organisation?

Bradford University School of Management is compiling and sharing best practice to help this country minimise the damage of the public sector cuts.  Please share your thoughts and tips with us.

Premier League Football’s business delivery – the beautiful game’s own goal?

Football2Looking at Premier League football in England from a business perspective is quite difficult. The beautiful game is no doubt about big business – but is big business  increasingly just a rich man’s toy?

The World Cup as business

Let’s think about the basics of running a good business.  A good product sold at a competitive price and  delivered to the satisfaction of its customers.  And, of course, makes a profit.

Do you remember this year’s World Cup? It was an event which coincided with our summer (you know, when days were sunny).  Our team (England, that is) of world beaters were due to conquer most of what came before it and return home, if not with the cup, at least in a blaze of glory… nicely in time for the new football season.  Well, we know it didn’t quite happen according to the script.  In business terms, the price was pretty high – especially for those people travelling to South Africa. The product was pretty average.  Expectations weren’t met and… I’m not sure whether it actually matters anymore.  The football season has started, the World Cup seems to have been forgotten (where were the boos at Wembley?) and life seems to be tootling on as before.

From a business perspective this just seems all wrong.  Don’t deliver the right product, continue to push prices up and expect the tribal loyalty of your fans to underwrite all your deficiencies. Not only is this ethically suspect, the clubs can’t seem to make any money either.

Germany’s Bundesliga v the Premier League

One of the interesting aspects about the crushing defeat at the hands of Germany was the apparent strength of that country’s Bundesliga.  Fairly strict regulations mean that its expenditure against income is closely monitored and over-inflated wages are not paid to players. The clubs need to be sustainable.  Obvious business principles.  Now no one is saying that the Bundesliga is anyway near as important or big time as the Premier League but as a business concern (and we’re a business school) it seems to make sense and its shop window (the national football team) seems to have performed pretty effectively.

Multimillionaires ‘ shopping spree

Here we have to really ask, is Premier League football a business at all?  The back pages are full of which international multimillionaire is going to buy which club – a pathway we’ve been well down:

  • Manchester City were acquired by an Abu Dhabi organisation in 2008 and are currently spending around £1m a day (that’s right, a day) on new players.
  • Liverpool were bought by a couple of American sports magnates but it doesn’t seem to have worked out. Last season was their worst for decades. Yet there’s a queue of other investors ready and willing to take on the mantle.

Well, Liverpool are a big time club and Manchester City at least come from a big time city.  But there are lots of other interested parties hovering around the Premier League.

  • Indian billionaire Ahsan Ali Syed is rumoured to be on the brink of buying Blackburn Rovers.  He admitted he’s never been to Blackburn and I imagine he wouldn’t know how to get there anyway.  But he seems to be prepared to throw huge money at the club.

And so it goes on.  And it could be that this is the future of football.  Because the statistics are staggering.  A recent review of football by Deloitte found that Premier League clubs are spending an average 67% of their revenue on wages. And this on a trajectory that seemed to be continually rising in spite of the recession.  Liverpool itself have been trying to build a new stadium but are rapidly running out of money.  And so it goes on.

Whose business? Whose success?

Back in 2005, I wrote a case study for a text book written by Professor David Jobber of The School of Management.  The case study was all about Premier League football and predicted a downturn in its success because the game had become divorced from the fans.  Well, it seemed to do  better than my predictions.  It became (largely through TV rights) the wealthiest league in the world and attendances remained strong.   All very rosy then!

Well, no not really. My assessment of the gap between supporter and club has actually been proved right.  Tribal nature appears to be more fiction that fact.  Supporters need very deep pockets to support their teams – taking a family to a Saturday game will put you back hundreds of pounds.  Watching Match of the Day this weekend I was struck by the rows of empty seats.

For the owners, money is in an altogether different league, so to speak. The jury’s out on whether Manchester City can buy success in the way that Chelsea did a few years ago.  Manchester United, once the wealthy club in British football is now complaining that it finds it impossible to compete in the transfer market with its local competitor.  Every potential new owner of a club says almost matter of factly that money will be no problem as it looks to buy success.

Who’s the success for?  There is no business logic to any of this.  None of the owners of Premier League football clubs can, hand on heart, say that the money they’ve put into their clubs has either generated a realistic return or massively improved the profile and success of their other portfolio businesses.  A lesson in commercial success is better delivered by airline Emirates. Sponsorship has massively benefited their brand. Are they interested in buying a team? I don’t think so.

Perhaps it’s time to stop thinking of football as a business at all.  Think about it instead as the plaything of the rich, their very expensive poodle, subsidised and supported by a loyal fan base who will take almost anything they get to watch, and pay almost anything they’re charged just to say they were there. Right product at the right price exceeding customer expectations? You tell me.

Let’s not blame it all on Hayward… where was the PR?

Hayward at the World Economic Forum in 2008 Image: World Economic Forum.

Hayward at the World Economic Forum in 2008 Image: World Economic Forum

Well, it was bound to happen, he’s gone, Tony Hayward has left BP as Chief Executive and everyone can now breathe easy.

If only PR was so simple.

Scandalous payoff?

Firstly those who pushed for his removal from office are now equally troubled by the size of his payoff. Payoffs are big news! He’s taking away around a £1m salary cheque and over £10m pension pot. Scandalous? Well the reality is that the salary is part of his contract and his pension has been accrued over his quarter of a century with the company. Now I’m no Hayward apologist or fan but if you read some of the press it would appear that suddenly out of nowhere Hayward has managed to negotiate himself a brand new £11m.

Reward for failure?

It is said that Hayward has been rewarded for failure. Just like the bankers. I don’t buy this. Yes, there has been a major catastrophe on Hayward’s watch. But I think it’s difficult to argue that this was perhaps as malicious a piece of chief executive activity as we have seen in the financial sector. Hayward does not appear to have wagered future profits on an even worse oil spill!

So what is the point of this discussion? Am I just supporting his payoff?

Executive level PR

Well no, but it’s not the payoff that matters – it’s about executive level crisis handling and PR. Certainly Hayward has said some pretty daft and insensitive things. Describing the amount of oil flowing into the Gulf of Mexico as a relatively tiny part of the world’s water space was not exactly sensitive to the needs of local residents. Asking to get his life back could hardly endear him to the relatives of those bereaved in the original explosion. And did he really have to go sailing? In many cases he seemed aloof, obstructive and without much empathy to what was going on around him. So was it all his fault?

At his salary/pension he has to accept responsibility. But the reality is that Hayward was not the only person in charge of BP. Yes, there is/was someone else. It could be the most difficult question in future editions of Trivial Pursuit! Have you heard of Carl-Henric Svanverg? Well I hadn’t before the disaster and I must admit that I’ve just had to look up his name! He is the chairman of BP, the man who is in overall charge of the company. I’ve just asked many people if they can remember his name. But nobody could.

What do chairmen do?

What’s the purpose of a plc chairman? To drive strategy, to manage the chief executive and, importantly, to be an important public face of the organisation. With oil gushing, workers having lost their lives and a veritable media frenzy, Carl was needed on stage. The problem was he didn’t appear, we didn’t know who he was, and he did nothing to support Hayward.

They say when the going gets tough the tough get going. Well this chairman certainly got going – right out of the picture. No doubt he was actively involved behind the scenes but that wasn’t enough. With a disaster of such monumental proportions and such a poor public display by the chief executive, Svanverg should have taken control of the public side of the disaster and told Hayward to get on with sorting out the oil spill. Hayward should not have had to spend so much time in the public eye when, as an engineer, he would have been much better off sorting out the problem. Svanverg should have sorted out publicity and the public face of the organisation. But he didn’t. He did fly over to the US on the orders of President Obama but even then we hardly saw him. Now he’s back in his office. Somewhere.

Apportioning blame

So the answer is to put all the blame on the chairman and not the chief executive is it? Maybe that’s just too simplistic. Where were the PR advisors to the company? I have been involved for many years in PR for both consumer and business facing organisations. I simply can’t fathom how organisations get things so wrong. There must be a huge corporate PR department in BP manned by suitably remunerated executives and directors. How could they advise Hayward to say the things he did? How could they have been so weak, not demanding the chairman to take the public face? How could they let BP lurch from one PR disaster to another? How could they stand by as BP was renamed British Petroleum in the US? They did, they allowed the PR disaster to happen and in truth the company has not and may never recover.

We will not know for some time the true cause of the oil spill. But as the clean up continues, surface oil disappears and America goes back to deep sea drilling (which it will), there are likely to be two lasting legacies. Years of environmental damage and a great British company tarnished forever, perhaps irreparably.

Effective PR requires skill/thought. Ineffective PR is catastrophic. Blame Hayward…but not Hayward alone.

It’s the economy, stupid. Or is it?

cutsWell, the government has spoken.  Austerity is upon us!  The public sector must cut and save – there’s little disagreement. My problem is the balance between the economics and ideology of policy making. Let’s look at some examples.

1. Brand Yorkshire disappearing

Firstly, the RDAs.  Controversial since their foundation, they were perceived as bloated quangos – perhaps an easy target for government cuts.  Yet the reality here in Yorkshire was somewhat different.  Yorkshire Forward was generally seen as a force for good. 1:30 jobs have been created by its initiatives which include The Rotherham Science Park, a development with an admirable, a development with an admirable ROI and the Welcome to Yorkshire tourism brand could never have been developed without the coordination and drive of the RDA.

And importantly, here was an organization that flew the flag for Brand Yorkshire.  I recently visited a number of business schools in the US – Yorkshire might as well have been the moon for all most of my contacts were aware of it but at least I was able to talk about initiatives being developed by the RDA and about an organization called Yorkshire Forward.

2. Can LEPS really achieve economic growth?

Are LEPs (Local Enterprise Partnerships) really going to replace the RDAs? Politically it makes a very good sound bite to wind down an RDA and return decision making to the localities.  But we know that the money available is (obviously) going to be reduced.  And then how is it going to be divvied up?  Local funding means local politics.  Decision makers won’t just be business – where’s the time or infrastructure? Enter councils and councillors.  So will cash be bid for solely on the basis of economic growth or will the next election horizon have a bearing? And will brand Yorkshire be subsumed by brand Yorkshire parochialism?

3. GPs highly competitive

And then there’s the NHS.  No great earth-shattering decisions were going to be made and a more conservative approach adopted rather than top-down massive change programme.  And yet, that is exactly what we have got.  Out with the Strategic Health Authorities and PCTs and in with? Well I am not really sure, but I think it’s GPs.  Again it makes political sense.  Return decision making to the local providers and cut out the quangos and the middle men.  But what’s really going to happen?  GPs have done very well over the last ten years but are they really going to want to turn themselves into highly competitive businesses run by clinical business managers?  Because it’s not simply going to be about being a GP and commissioning services, it’s going to be about being a GP and commissioning services better than other GPs.

4. Should schools go for academy status?

School education is also being hit. I am a governor of a very large comprehensive school.  At our last meeting we saw the information circulated to schools about potential movement to academy status.  And here we go again! Move funding from central councils to local schools and, by the way, can you do it in 12 weeks? I read this three times during the meeting before timidly asking the question ‘is this what I think it is, do they really want us to start and change into an academy school in the next 12 weeks or so?’ – yes.  Fortunately my own school has decided to take a considered approach and weigh up all the options, but I fear that other schools won’t take such a sensible approach.

5. Implementing difficult government decisions requires new skills

The government has to make difficult decisions.  But what about their implementation? Here at the School of Management we teach our students/delegates that a common cause of strategic failure is poor implementation.  Whether it is replacing the RDAs, the PCT or current school models, there needs to be some reflection, some reasonable timescale and a real chance of success.

Economy or ideology?  What do you think?

Is this the death of capitalism?

flamesIs the economic turmoil going on around us the death of capitalism as we know it, or simply time for everyone to become accountable?

Some commentators have already expressed the first option. I think this is more in hope than reality – the last time I heard it was from Fidel Castro, commenting on the failed launch of new Coke!  But today there are mutterings – are things simply getting out of hand? Trade Unions see an opportunity to flex their muscles. Social commentators ask whether we really need our pressurised lifestyle.  But has any other system ever really been seen to work effectively?  Not really.  Wherever we look in the world the command economy has invariably resulted in wastage, lack of choice, lack of quality and quality and wealth in the hands of the few.  No, we won’t be saying goodbye to capitalism just yet. But that doesn’t mean its perfect and shouldn’t change.

In my view it all starts with accountability of producers, consumers, government, even business schools!

Let’s start with producers.  The credit crunch has been largely caused by the pursuit of short term profits, in rapidly growing markets with a relaxed focus on risk.  Construction and financial services have led the way with, for example, aggressive apartment building and self certificated mortgage applications. Properties have been bought off-plan, in many cases as investments rather than dwellings, whilst in the US, everyone was seen as a potential property owner. Yet, well over a year ago, you only needed to take an evening stroll around the new apartments of central Leeds to see the reality – far more lights out than on – empty flats bought as investments at a time when there was a dearth of family accommodation.  This apartment bubble was going to burst. But was accountability all about the next profits report rather than medium term sustainability? The constant push for great results in good times has a habit of ending in tears.

Its easy to put all the blame on the producers – but what about the customers? For every seller there is a buyer. In the US, property ownership with “guaranteed” returns suddenly became a reality for the sub prime market. I recently read an article about someone who was about to have her house repossessed. The house had a value at mortgage time of £300,000 and yet this individual had only ever done menial work, if any work at all. The capitalism doom mongers tell us that these people were poorly educated “victims” of smooth talking mortgage salesmen.  I just don’t buy this.  We’ve all got a level of common sense and “buying” a house when long term unemployed or in poorly paid employment showed greed as well as naivety.  Consumers need to take some responsibility as well.

What about we business academics?   I am a passionate believer that good management education can help managers see the route ahead, to spot the threats as well as the opportunities, to manage for a sustainable future.  Many managers remain sceptical, perhaps nervous about academic interventions and there has been a history of rather introverted academic management research.  We academics also need to be accountable, to the management community. At Bradford this is happening and we are seeing real differences being made. With today’s turmoil, we need to help managers take the objective view, challenge their strategies and see the sustainable medium as well as the shareholder driven short term.

Its not time to re-engineer society as we know it. But I do think that it is time for us to become more realistic, more pragmatic and more supportive of each other.  Government needs to take the lead. Firstly, we can’t allow unrealistic sales of major assets. Secondly, we must educate the more vulnerable, or even the more greedy, consumer of the perils of chasing unrealistic wealth.

If anything good comes out of the current turmoil, it will surely be that we won’t rush headlong into another crisis. Unless we lose our memory, chase the next short term boom and forget about accountability!