An officer has forwarded this interesting assessment by a resident with years of experience leading international companies and managing complex industrial integrations. It has gone to all cllrs and certain officers
It is an eye opener-except to the oblivious and risk taking council.....
The Dame comments, " H&F & WCC have new, inexperienced leaders.
RBK&C has one well past his well past his sell by date; with no business experience and his time spent with the Local Government Association...dangers ahead.....
Dear Councillor
Cllr Buckmaster's Scrutiny Report about the Tri Borough will be discussed at the main Council Meeting next week and I am writing to urge caution. Having been involved for many years in mergers, acquisitions and integrations in the private sector, the alarm bells are ringing when I consider what is going on. The first challenge is always that Chairmen like to run their own company and are reluctant to give up power. But any organisation can only serve one "brain" otherwise it becomes dysfunctional. We are proceeding with three Leaders and three Cabinets. The Tri Borough FAILS THIS TEST.
It is also clear from the result of the last local elections that Hammersmith will revert to Labour the next time around. This is currently the 'elephant in the room' that nobody seems prepared to discuss.
Cllr Freeman recently wrote in my Resident Association Newsletter (The Campden Hill Residents Association) that the Tri Borough foreshadows the merger of the three Boroughs into a single Borough i.e. One Leader, One Cabinet, One Electoral Services department and One Accounts (collection of taxes) Department. This is the necessary first step before any integration arrangements can be successfully attempted. In the meantime good preparation can be put in place in two important dimensions:
(i) benchmarking of service outcomes and efficiencies between the three Boroughs. This is a powerful source of learning and improvement
(ii) planning (and perhaps implementing) a common IT system across all three Boroughs in anticipation of a merger into one Borough
No modern organisation can be aligned or function without a common IT system. And it is pointless to attempt organisation change before this is put in place.
The Buckmaster Report
The Terms of Reference are flawed because they failed to seek the views of persons, organisations and consultants with experience and track records of mergers and integration. At a single stroke, the enquiry decided that it would not mine the rich seam of experience that is available to be tapped.
The report also notes that it chose not to address the implications of any change of political control that may come about
Cllr Buckmaster's Scrutiny Report about the Tri Borough will be discussed at the main Council Meeting next week and I am writing to urge caution. Having been involved for many years in mergers, acquisitions and integrations in the private sector, the alarm bells are ringing when I consider what is going on. The first challenge is always that Chairmen like to run their own company and are reluctant to give up power. But any organisation can only serve one "brain" otherwise it becomes dysfunctional. We are proceeding with three Leaders and three Cabinets. The Tri Borough FAILS THIS TEST.
It is also clear from the result of the last local elections that Hammersmith will revert to Labour the next time around. This is currently the 'elephant in the room' that nobody seems prepared to discuss.
Cllr Freeman recently wrote in my Resident Association Newsletter (The Campden Hill Residents Association) that the Tri Borough foreshadows the merger of the three Boroughs into a single Borough i.e. One Leader, One Cabinet, One Electoral Services department and One Accounts (collection of taxes) Department. This is the necessary first step before any integration arrangements can be successfully attempted. In the meantime good preparation can be put in place in two important dimensions:
(i) benchmarking of service outcomes and efficiencies between the three Boroughs. This is a powerful source of learning and improvement
(ii) planning (and perhaps implementing) a common IT system across all three Boroughs in anticipation of a merger into one Borough
No modern organisation can be aligned or function without a common IT system. And it is pointless to attempt organisation change before this is put in place.
The Buckmaster Report
The Terms of Reference are flawed because they failed to seek the views of persons, organisations and consultants with experience and track records of mergers and integration. At a single stroke, the enquiry decided that it would not mine the rich seam of experience that is available to be tapped.
The report also notes that it chose not to address the implications of any change of political control that may come about
Learnings
My experience at Board level of integration work taught me and my colleagues a number of lessons
(i) The Chief Executive selected to run a merged operation has to be recruited from outside the shareholders. If he comes from one of the hosts there will always be suspicion from the others and authority will be undermined and then it breaks down. The Tri Borough FAILS THIS TEST.
(ii) Profit maximisation or cost minimisation cannot be the objective of an organisation. Both are by products of actions and strategies. If costs are too high then the objective should be, for example, to save money by taking out activities (eg Holland Park Opera subsidy) or work in a way that benchmarks against best in class (eg number of staff per £ of service delivered). The Tri Borough FAILS THIS TEST
(iii) If costs have to be reduced by re engineering an organisation, then lines of control have to be shortened and power concentrated. But we are building a shared power organisation and distributed organisation. The Tri Borough FAILS THIS TEST
(iv) If a new way of delivering a critical function (such as an accounting system) is to be introduced, then the old system needs to run in parallel with the new system until the new system demonstrates that it works. It never does first time. Tri Borough implementation arrangements (Hosting) FAILS THIS TEST
(v) Merger and integration is high risk. There is no point contemplating it unless savings of ca 30% can be demonstrated on paper (and empirically only about 10% will be obtained). The three Boroughs spend about £2 billion. 30% is £800 million. But Tri Borough savings were projected to be ca £20m to £30m at the outset and now £40 million is being trumpeted. Paltry in the scheme of things and they will be swept away by risk. The Tri Borough FAILS THIS TEST.
(vi) The personality of the Chief Executive needs to be understood and a performance/reward framework put in place to match his behaviour to the desired outcome. The dual appraisal arrangement by K&C and Hammersmith is a classic "divide and rule" trap. The Tri Borough FAILS THIS TEST
(vii) The Chief Executive needs to report to a single master. Mr Myers will report to two masters. The Tri Borough FAILS THIS TEST
(viii) Shareholder/owner sanctions over the Chief Executive need to be symmetric. Hammersmith has rights to give Mr Myers three months notice. K&C is open ended. The Tri Borough FAILS THIS TEST.
(ix) Shareholder/owner drivers need to be aligned. Westminster and K&C have guaranteed Conservative majorities. The Leaders are on a long leash. Hammersmith is a marginal council (Conservatives in survival mode). The Tri Borough FAILS THIS TEST
(x) Shareholder/owner constituencies need to be aligned. The demographics of Hammersmith are fundamentally different from K&C/Westminster. The Tri Borough FAILS THIS TEST
(xi) The Chief Executive and those appointed so far to senior positions have no joint venture experience. They will have to learn on the job while the expectation will be immediate delivery of cost savings and the maintenance of service levels. The Tri Borough FAILS THIS TEST
In my experience any integration programme will fail if any one of the rules above are broken.
In the private sector the sanction is bankruptcy if the choices/decisions are wrong. The players lose their jobs and their investment. In the public sector there is no such sanction, just the bottomless pit of tax payers money to fund whatever happens to be in fashion. The only safeguard is wise and inspired Leadership.
A Resident