Monday, June 29, 2009

White Heat Holidays


Everything is perfectly under control

Humongous deficits, sterling crises, emergency budgets, tax rises, strikes, and a weak divided government headed by a delusional Prime Minister with neither plan nor credibility.

It could well describe the coming winter. But it was actually the sick man of Europe swingin’ his way through sixties.

Poolside, Tyler has been reading Dominic Sandbrook’s White Heat, a lengthy but highly readable account of Britain under the hopeless Harold Wilson. And the parallels with Brown’s Britain leap off every page.

Particularly striking are the identical failures of leadership. Faced with huge economic challenges, Wilson shirked all the tough decisions until they were forced on him by events. Short-termist in the extreme, he never admitted his failures even when they were staring him – and everyone else – in the face.

Most notoriously, when - despite constant assurances to the contrary - he was finally forced to devalue the Pound in 1967, he went on TV and ludicrously asserted that the “Pound in your pocket” had somehow not been devalued.

It’s exactly how Brown would have played it – with the exception that Wilson was a rather more convincing liar. Plus, of course, Wilson had won two elections, and could therefore claim a legitimacy Brown has never had.

Elections or not, by 1968/69 Wilson was held in utter contempt. Not only the press and the electorate despised him, but his immediate colleagues thought him a waste of space. They spent years plotting behind his back, and after his abject failure to push though trade union reform (In Place of Strife), they very nearly summoned up the courage to knife him. Except of course they didn’t – just like today’s gutless cabinet, Jenkins et al never located the requisite balls.

But the real lesson from the 1964-70 Wilson government is not for Brown and Labour. It is for Dave and George when they take the helm next May.

Because Wilson’s biggest and most disastrous failure was not to grip the economic problems on Day One.

He’d inherited from the Tories an economy that was living well beyond its means, with a wholly unsustainable current account deficit. Yet instead of implementing the necessary deflation and fiscal discipline straight away, he tinkered around the edges, hoping the problem would somehow go away. Instead, the problems simply got worse, and the financial markets (or the Gnomes of Zurich, as Wilson unwisely dismissed them) took fright.

That loss of confidence compounded our problems hugely. It meant Wilson had to go cap in hand to the Americans for successive bailouts, and was ultimately forced to impose much bigger tax increases and spending cuts than would have been necessary had he acted straight off the bat.

Dave and George must not repeat that mistake. Everyone knows Britain is again living beyond its means. Everybody knows it cannot go on. And everybody is expecting decisive action after the election.

The financial markets will not be forgiving if there’s a Wilson-style wobble. And the price we will then have to pay for Brown’s economic fiasco will be even higher.

PS Well, it’s the end of June, and Mr and Mrs T are staying in a rather nice hotel looking out over the Med. Somebody’s got to do it, and normally at this time, such a hotel would be packed with affluent Germans. Not this year. Indeed, we reckon the hotel is only a quarter full. True, Peter Stringfellow is knocking around with a young lady who is presumably his grand-daughter, but there’s no disguising the general emptiness. The staff are putting a brave face on it, but we’re concerned: for them, the Spanish economy, and everyone else who has been living too high on the hog.

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Make Marketing Interesting.

The resurgence of sales that follows an artist's death is just one example of the social aspect of consumption. Output that has been ignored in recent years suddenly become hugely popular and Amazon sales rise 700-fold.

It's all a timely confirmation of a recent New Scientist article that discusses the longevity of performers' careers extending beyond their peak. The reason? People are social animals who like/need to share common ground.

The human desire to find common ground in conversation pushes us to discuss already popular people.

The long tail of marketing is not one of low sales across a wide range of products, it's a long tail of continued sales across a wide range of time. Making your marketing interesting now will ensure that it remains interesting long into the future.

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Thursday, June 25, 2009

Are you Ready for Marketing's 2010 Annual Planning Process?

Have you started planning for your 2010 fiscal year yet? Our best practices study in planning – people, process and technology indicates that the average marketing planning cycle begins about 6 months before the fiscal year end. (for CMO Advisory Service clients, refer to "Marketing’s Planning – People, Process and Technology, IDC Doc. #216134) If you're one of the more mature organizations, planning will be part of the fabric of your weekly, monthly and quarterly team meetings.

Regardless, a significant part of this annual process is assessment of your current "operational" metrics and development of next year's projected investment strategy. I define "operational" metrics as those metrics that track your marketing investment strategy, including:

1. Key Performance Indicators (KPIs) – such as Marketing Budget Ratio (marketing spend as a % of revenue), Program to People KPI, Revenue per Staff, Staff Throughput (program spend per marketing staff), Centralization KPI (% of marketing investment that is centralized vs. decentralized), Awareness-Demand KPI, etc.
2. Staff Mix (fixed spend) – such as advertising, product marketing, marketing operations, etc.
3. Program Mix (discretionary spend) – such as advertising (print, broadcast, corporate sponsorship), digital marketing, event marketing, etc.

IDC has published a complete taxonomy of these KPIs and staff and program mix areas to help marketing operations and marketing finance executives best manage their investment. (for CMO Advisory Service clients, refer to IDC’s Worldwide Sales and Marketing Taxonomy, 2008: A Blueprint for Cost Control, IDC Doc. #211900)

Tracking and evaluating these KPIs, program and staff mix levels across the organization, over time and versus other companies will best prepare you for your upcoming planning sessions; for management of your resources as well as for increasing marketing's credibility with other parts of the organization.
IDC's CMO Advisory Practice is in its 7th year of its Tech Marketing Benchmarks study. If you would like to participate in this research, including receiving a copy of the above Taxonomy, an overview of the results of the study and an invite to our annual marketing benchmarks telebriefing in August, please contact Seth Fishbein at sfishbein@idc.com. You will be joining the 100+ global companies that work with us year after year as part of this industry study.

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Wednesday, June 24, 2009

The Feel Of A Name

A woman was explaining to me tonight how the url of her new venture was pleasing to type in the sense of the relative movements of either hand.

This had occurred by luck rather than design, but it makes one think. I'm personally a little sceptical about the positive impact of a product or service name - unless it is a spectacularly good one. But making it easy/fun to type might be a clever reinforcer and a way to utilise the impact of the sense of touch in a previously unconsidered way.

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Monday, June 22, 2009

Holiday Ideas



Having only just been castigated by one BOM reader for "laziness born of financial comfort" (see this post), I hesitate to mention the following: Mrs T and I are off on holiday for a week.

But while we're away, here are a couple of things that you might want to try.

First, do - please do - take a look at an excellent new website, Debt Bombshell. Not only does it tell you everything you never wanted to know about our ballooning National Debt, but it also features a scary graphic of the actual ticking debt bomb itself.

The site recommends we all write to our MPs to underline the seriousness of the situation, and demand they start pressing for action. We'll be doing exactly that on our return, and may we urge you to do likewise.

Second, please take a look at the Ministry of Truth campaign for a Prohibition of Deception Act. The idea is that any MP who makes a statement that he knows to be "misleading, false or deceptive in a material manner" gets sent down.

Now I know what you're thinking - how can we possibly have a law like that when the prisons are already full?

Not a problem - we'd simply establish a Sheriff Joe-style tent prison.

Or maybe you were wondering how we'd ever prove a politico knowingly made false statements?

Agreed, that is a little trickier: after all, even on those obviously non-existent Iraqi WMD, Bliar had probably convinced himself they did exist (because that's what salesmen do).

Which is why Tyler asked the organisers over at Minitruth how this law could ever work? They said there would be an "independent regulatory body" which would sit in judgement. Tyler immediately nominated himself and the Major as OffTruth's first permanent members.

Third, tomorrow night at 8pm you might want to tune in your cat's whisker to BBC R4. File on 4 is taking a close look at PFI, and whether by any stretch of the imagination it can possibly be giving taxpayers value for money. It should include testimony from The Bloke... assuming he hasn't been dumped on the cutting room floor of course.

PS Holiday, eh? In his defence, Tyler wishes to state that this is his first holiday in 2009, and it's only for one week, and he's only going to Bognor. Or somewhere like that, anyway. Plus, he'll carry on posting poolside. Plus he'll mortify his flesh in some way. He'll maintain his integrity somehow. Promise.

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Sunday, June 21, 2009

And Another Thing...


No - you listen to me for a change

As we said right at the outset, Tyler started BOM because Mrs T got fed up with him shouting at the telly. Her view was - and is - that all blokes of a certain age get grey hair and glasses (plus maybe trousers that are an inch or two short), and then start pontificating loudly and uncontrollably to the extreme annoyance of those around them.

The traditional remedy was to shoot them. But post the Human Rights Act, you can't do that (well, not without written authorisation from the Secretary of State, anyway). Instead, you have to send them down the pub. Or a day centre. Or latterly, you can start them blogging. Anything to tidy them up out the way.

The above pic illustrates her point precisely. It shows three old gents arguing on a pavement in central London. They're obviously having a whale of a time, but it's quite clear that not one of them is listening to a word the others are saying.

The pic was taken in the mid-80s*, and the pavement in question is outside a day centre called the Insitute of Economic Affairs. The three gents were (L to R) Ralph "Lord Harris of High Cross" Harris, Arthur Seldon, and Prof Friedrich "Road to Serfdom" Hayek.

And those three were among the most influential free market/anti Big Government figures of the last half century.

Which just goes to show that batty old blokes with grey hair and glasses still have their uses.

But here's another thing...

In the final ghastly days of Labour, they keep telling us that at least they've (more or less) ended poverty. In his Gruaniad interview (blogged here), Gordo himself boasted:

"Poverty has fallen, and you'll see it continue to fall over the next year or so... Removing people from poverty must be our priority."

That is complete bunkum.

On any meaningful definition, Labour has not reduced poverty. Even if you accept their ridiculous definition of poverty as being measured relative to median income, real poverty has not fallen under Labour.

True, Brown has managed to reduce the proportion of those on less than 60% of median income (which is his entirely arbitrary definition of poverty), but the proportion in real poverty has not fallen one jot.

As we can see from the following IFS table (and see this blog), the proportion on less than 40% of median income has actually increased, and more than one-tenth of households are still on less than 50% of the median:

So when you're next watching Newsnight and some government minister goes on about Labour ending poverty, please feel free to shout at the telly.

Loudly.

*Footnote - that outstandingly posed pic is taken from a new biography of Arthur Seldon, one of the founders of the IEA. I haven't yet read it, but as a "member in good standing" (nice to know), I've just been sent a free copy by the good folk at the Institute. And no, I don't really think the IEA is a day centre - it continues to produce some excellent papers, several of which we've blogged in the past.

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Walking Away




Many apologies for two days without posts. You're not interested in excuses - Tyler simply walked away from his duty. Or as this email puts it:

"Dear sir,

If you do not post at least once a day, please do try to convince me that your heart and soul are in this blog. You miss many opportunities to score points against our enemies and seem to display a laziness born of financial comfort which most of your followers cannot afford. Do your duty or else please stop imploring others to do theirs."

Thank you NS - I needed that. Admonishment duly received and understood.

As it happens, we know someone else who frets about his duty. A couple of weeks back, after a particularly gruelling run-in with the real world, he told us he would not walk away:
"I will get on with the job. I have faith in doing my duty ... I believe in never walking away in difficult times."
Admirable. The authentic fighting spirit of Gordon of Khartoum. He certainly didn't walk away: it's what made the Empire great.

Except that by yesterday, our modern day Gordon was reconsidering - maybe walking away wasn't such a bad option after all:

"To be honest, you could walk away from all of this tomorrow... I wouldn't worry if I never returned to all those places - Downing Street, Chequers ... And it would probably be good for my children."

To walk, or not to walk, that is the question. A classic struggle between duty and personal survival.

Ah, but what is this duty he's fretting about?

Clearly, it can't be duty to country. We never voted for him, he's taking us into a fiscal and economic abyss, and he's got the lowest poll ratings since the Sheriff of Nottingham. Virtually everyone agrees he should go now, and we'd all thank him for it.

So that can't be the duty he's worried about.

And it can't be his duty to the Labour Party, either. On BOM, we have no interest in Labour's survival, but it's pretty obvious Gordo's driving them to destruction. As the excellent Daniel Hannan puts it this morning:
"You don't have to be a spin doctor to see what Gordon Brown is doing to his party's popularity. He has taken Labour to a share of the popular vote it has not registered since before universal male suffrage, when it was a tiny band of trade-union-sponsored candidates. Anyone – anyone – would make a more electable leader, even Michael Foot, if the old boy could be persuaded to come out of retirement.

By hanging on, the party is repeating the mistake of John Major's Tories in the mid-1990s, trying the patience of an angry electorate, purchasing each day now at the cost of a week in eventual Opposition.


So why would Gordo want to destroy the Labour Party? Hannan reckons it's all a plot by Mandy and others to keep Gordo there just long enough for the Irish to ratify the EU constitution.

But there's a much simpler explanation - like so many driven control freaks, Gordo simply cannot accept that he has failed.

The duty he frets about is the duty to his own self-image as someone who never fails.

Of course, given the manifest failure all round, he can only sustain that self-image by persuading himself that things are somehow going to get better. Which is why he's spun that little world for himself that bears no relation to the one the rest of us inhabit.

Take this statement of his in yesterday's Grauniad interview:
"The Tories have made, for them, a cardinal mistake in that they admitted the truth - that if you take 10% off the health service or schools or policing, you've cut into the jobs, the services, the expectations. The Conservatives' mask has slipped. They cannot be a centre ground party any more, they can't talk about being mainstream. The choice has become a lot clearer."

Which must be a great comfort to him. Except of course, the Tories have specifically promised not to cut health spending (a serious error on our view - see previous posts). Gordo has chosen not to notice.

Neither has he chosen to notice that his own government is also planning to slash public spending after the election. According to him, they won't need to cut:
"No. It's a myth. Public spending will continue to rise. It's in our figures. We've costed it, and you're paying more in top rate tax to pay for it."

A myth? The guy's either the biggest liar since Doc Goebbels, or he's lost the plot.

As everyone else knows by now (and as we blogged here), under his published plans, public spending is set to fall after the election (ie after stripping out inflation). And spending on public services (health, schools, policing etc) is set to fall especially sharply (by 2.3% pa in real terms, according to the IFS). His tax increase for the undeserving rich comes nowhere near enough to fund continued spending growth.

From Hitler to the boss of Northern Rock, the heads of big organisations often get into situations like Gordo. They have failed, but they cannot bring themselves to recognise and accept that failure. So they cling on, despite the fact that virtually everybody wants them to go, and the stress is taking a terrible toll on their own health.

A few weeks ago there was a rather upsetting interview with Sir Stuart Rose, the beleaguered head of Marks and Sparks. He's always been a much more convincing presenter than Gordo, he has achieved much more than Gordo, and unlike Gordo, he was actually elected to his current post (by shareholders). But despite that, since the recession took hold, he's gone from hero to zero, and he's facing exactly the same kinds of pressure:

"It was a terrible year, you've no idea... it was the worst year of my life... but I believe I've come out and I'm stronger for it... Recently I've been looking at my garden, watching it grow. I've been standing there for two or three weekends in a row, looking at the buds... I now just live on my own and I don't have a relationship with anybody... you do feel a little bit of a vacuum in your life...

I said to myself this Christmas, I want to start doing more things for myself... M& S has completely eaten up my life... There have been times when it has been more than I wanted, but what can you do? When you're in, you're in."


It's that duty thing again, and you can feel the pressure crushing down on him.

But at least Rose knows his time's up, and he's got to go.

The really alarming thing about Gordo is that he simply doesn't understand that. And instead of accepting reality, he's now attempting to govern Britain on the basis of the fantasy that exists only inside his own head.

Scary.

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Thursday, June 18, 2009

Holding Out For A Hero's Story.


Intel's latest campaign takes the idea of creating a story to heart by looking at the concept of hero/rock-star in a different way and thereby differentiating their tone of voice.

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OMG


Soaring into the stratosphere


OMG 1

Today's public borrowing stats are way beyond dire: they are OMG terminal.

In the first two months of this financial year the government borrowed £30.5bn, comfortably over twice what they borrowed in the same two months last year.

At this rate we will certainly blow Darling's budget forecast of £175bn borrowing over the entire year. Even a straight pro rating suggests we'll hit £190bn, but with unemployment surging, that's an underestimate. Get ready for £200bn+.

In other words, Brown/Darling will smash the pre-NuLab record for a single year's government borrowing by a factor of 4 (previous record was £51bn in 1993-94). That is incompetence of an exceptionally high order.

Yes, yes, of course - you and I know we should adjust that for inflation. But not only does our beloved leader himself ignore inflation adjustments when it suits him, even if we did adjust the figures, this would still be well over twice the previous record.

And as we've said many times, either through taxes or inflation, you and I are the ones who will have to pay it off. For years and years... long after Catastrophe Brown has faded into just an unpleasant memory.


OMG 2

According to the Met Office, Hull is the new City by the Bay.

For an undisclosed fee - paid by those generous folk at "the Department for Environment, Food and Rural Affairs, Department of Energy and Climate Change with the Scottish Government, Welsh Assembly Government and Northern Ireland Department of the Environment" - the Met Office has calculated Hull's climate in 2050.

We now know for A FACT that by 2050, Hull will be sizzling in Med-style temperatures, and its depressing North Sea drizzle will be a thing of the past.

As regular readers may recall, we've blogged the unappreciated potential of Hull before. This is the final proof. Thanks to the twin blessings of global warming and the property crash, you now have the chance to make your fortune!

Right now, you can pick up brand new top spec riverside apartments for a tad over £100 grand apiece. And just think what they'll be worth once the city looks like this:



You know it makes sense - I'll bet those boys from the Met Office have dived in already.

PS The Met Office describes its new toy thus: "UK Climate Projections 2009 (UKCP09) is a climate analysis tool, funded by Defra, which features the most comprehensive climate projections ever produced. Projections are broken down to a regional level across the UK and are shown in probabilistic form — illustrating the potential range of changes and the level of confidence in each prediction." But when you look at the projections, all you find are numbers for temperature and rainfall. There's no mention at all of those extra hours of sunshine we'll enjoy in 2050. The sunshine numbers have been redacted - possibly literally, since there's an odd gap in the summary where they look like they might have slotted in. Why, you'd almost think the Met Office don't want us to know the good news about Hull. And indeed the rest of Britain.

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Government By Porkie Pie


Brown's performance at yesterday's Prime Ministers Questions was breath-taking. Does he really think we'll believe his lies about future public spending growth (see previous posts eg here)? Does he really think we're that dumb?

The Major and I have been trying to remember if Gordo has ever told us the truth about anything. Consider his record:
  • 10p tax rate fiasco - lied
  • Abolished boom and bust - lied
  • Government debt - lied
  • EU constitution referendum - lied
  • Immigration - lied
  • Climate change - lied
  • Choice of Chancellor - lied
  • Abandoned election - lied

Frankly we're struggling, although the Major suspects this may be true:

The Prime Minister (Mr. Gordon Brown): "This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today."

So why does he lie so much?

Yes, we understand he's a liar, and that's what liars do. But surely he must have some inkling of how his lies land with the rest of us. Surely he couldn't have climbed to the top of the greasy pole without having at least some inkling. Could he?

And he's got so bad at it. In his early days as Chancellor he used to lie all the time, but he was better at it. His double-counting and dense statistical mendacity had a certain class - it was the work of a craftsman.

But now he's just pants. His lies about public spending growth are so thin and easy to disprove. Frankly, it's pathetic to behold.

The real question of course is whether he himself understands the difference between truth and lies. As we've said before, the scariest possibility is that he actually believes his own version of reality.

The rest of us may hear the Governor of the Bank of England, the Institute of Fiscal Studies, the credit rating agencies, and at least 364 economists, saying spending cuts are essential to save Britain from the knacker's yard. But Brown may simply believe they are all wrong.

Like many a scary control freak before him, he may think he's the only man who understands the real truth.

PS Yes, there was that other PM who ignored 364 economists, and was subsequently proved right. But Tyler remembers that other PM, and despite his photo-op on the No 10 doorstep, Mr B is no Mrs T.

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Wednesday, June 17, 2009

Sales Enablement and The Year of the Sales Rep

I've spoken about sales enablement quite a bit in this blog, and I'll continue to do so as marketers improve their ability to better enable the sales process from an internal as well as an external perspective. With this in mind, Clare Gillan, IDC's SVP of Executive and Go To Market Programs, will share some of her insights in the sales enablement area. . .

Thanks Michael. At IDC's recent annual Directions event, I gave a presentation titled "The Year of the Sales Rep." In response to The Year of the Sales Rep notion, an SVP of sales asked me, "Why does this year have to be my year?" "Precisely," I responded. Let me explain. . . . never have we more needed our sales reps to be successful and never have they needed us more — those of us in sales, marketing, and executive management.

The crisis in sales is driven not by the economy alone but by an evolution in how buyers buy. Sales organizations, in general, have not kept up. The economy heightens a need for change in how the IT industry "sells" — better mapping to how buyers buy.

For nearly 10 years, sales organizations have emphasized the desire to become "trusted partners" with their B2B customers. Nearly every sales organization has been through "solution selling" programs of one form or another. However, only one in five buyers will tell you that he/she is generally approached by sales reps prepared to discuss solutions. Too often, the sales engagement continues to be product led. Further, buyers will tell you that the pre-purchase experience is becoming a more important indicator of post purchase value. Buyers increasingly consider "relationship ROI" as well as product ROI. And, buyers will tell you that, in this economy, they no longer have tolerance for uninformed vendor representatives who come through their doors. The sales rep must come to a meeting prepared to discuss the buyer's specific business — yet 31% of sales reps are not prepared with even a basic level of Web available information before taking a buyer's valuable time. Only 16% are extremely prepared — these are the reps positioned to take share for the companies they represent.

The technology purchase decision is rapidly moving from a product decision to a relationship decision. Buyers can generally find a number of products that can do the job and within the same price range. They will select the vendor that will make them successful over time even if the vendor does not offer the very best up-front price. The shift from product-led selling to relationship-led selling calls for a significant transformation of sales — enabled by a transformation of marketing.


This transformation requires marketing to gather intelligence and create assets that better map to what buyers value and then make the intelligence and assets "accessible" at key points along the go-to-market chain for use by sales and partners. This requires researching buyers (and I stress--from the buyer's point of view), auditing program investments against what buyers value and other related investments your company is making, creating strong content assets (and then making these consumable in a variety of formats), and, finally contributing to a sales enablement process developed in partnership with your sales "partner".


Thanks Clare! Contact me at mgerard@idc.com for a free copy of a recently published report by Clare entitled "Sales Enablement 3.0: A Transformation of Sales Enabled by a Transformation of Marketing".


More to come from IDC's CMO Advisory Practice on the emerging practices in this area of Sales Enablement.

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Fantasy Grown-Ups


There must be something else we can listen to

On Monday, Mrs T and I were driving along a real road in a real car in the real world listening to a play about a parallel universe. Well, to be honest, it wasn't clear if it was really a parallel universe, or whether the central character was just fantasising it was real. Or maybe he knew it wasn't real, but thought he could make it real by telling enough lies about it.

It was called the World At One, and the central character was a blustering unpleasant sounding man with the splendid Dickensian name of Mr Balls. Just like Mr Micawber, Mr Balls had mortgaged and remortgaged his house, maxxed out his credit cards, long ago lost any visible means of support, and was facing ejection by the bailiffs.

He wasn't nearly as appealing as Micawber, but his fantasy of something turning up was asserted much more stridently. Shouting out through the letterbox, he tried to blag the bailiffs with his alternative worldview:

"Of course there's going to be tough choices, of course we're going to have to be more efficient," he screamed. "I think with tough choices we can see real rises in the schools budget and the NHS budget in future years.

"If we get the economy right, as I believe we are doing, I think we can see the spending on schools and hospitals rising in real terms after 2011."

Sadly, the bailiffs were unimpressed. After a few minutes of Ballsian drivel, they smashed down the door and carted him off to the Marshalsea.

****
So does Labour expect anyone to believe their fantasy "tough choices" somehow avoid the need for real painful spending cuts? Or could it be that they actually believe it themselves?

Of all the people in the cabinet, the one who is supposed to be most grounded when it comes to the purse-strings is the Chief Secretary to the Treasury. He/she is the one who's supposed to rein in spending colleagues, and constantly talk down the prospects for extra cash.

But the new incumbent - the splutteringly slippery Liam Byrne - is just as bad as Balls. He says:

"You've got to separate two kinds of spending here. You've got to separate current spending, that is the day-to-day cash in hand. In real terms that grows by 0.7%...

It is a bit of a red herring, I think, to try and mix up capital spending and current spending. You know, if you put the two things together you get the numbers that you talk about. Because of course once you've got a school, you've got a school. Once you've got a hospital, you've got a hospital. The thing that really matters is what happens in the day-to-day current spending. The overall envelope rises by 0.7%."


So cuts in capital spending - which are eye-wateringly savage under Darling's most recent plans - somehow don't count as "cuts".

And what's with this "spending envelope"? The term implies that we know nothing of the envelope's contents - only that the overall total for current spending rises by 0.7% pa in real terms. The composition is unknown and we can choose how to divvy it up.

But of course, we do know something of the envelope's contents already. We know that they include rapidly rising debt interest payments - over which the government has no control - and also rising expenditure on welfare benefits, again very tricky to control.

And as the IFS spelled out, once you net off realistic estimates for debt interest and welfare payments, the residual "envelope" shows a real terms decline of 2.3% pa post 2010-11 (eg see this post... and it would still be a decline even if you looked at current spending only).

The government has not given us a proper spending breakdown past 2010-11. But for that year, we know that total spending is projected to be just over £700bn (Total Managed Expenditure - TME). Of that, just under £300bn comprises spending that the government does not directly control - largely welfare benefits and debt interest. Which leaves around £400bn that it does in theory control, and can cut.

We know they're already planning swingeing cuts in capital spending, so let's focus on the non-capital element of this £400bn, which amounts to c£350bn.

Of that non-capital element, some £100bn comprises Health spending, which has been ring-fenced by the Tories, forcing Labour to match them (although on BBC R4 Today this morning Darling was back-peddling furiously from Health Secretary Burnham's recent pledge).

Which leaves less than £250bn to take all the cuts.

The trouble is, with total cuts required in the range £50-100bn, that means areas from Schools to Defence to Criminal Justice all having to take cuts in current spending of 20-40%.

Or to put it another way, that simply ain't gonna happen: the pain will have to be spread much more widely. It will have to encompass not only scared cows such as the NHS and overseas aid, but also something that hasn't had much attention so far - the level of welfare benefits.

Outside the government, everyone - including George - is saying that the issue about cuts is no longer whether they will be needed: they definitely will.

The issue now is what cuts are we going to impose?

And the sooner we have that real grown-up discussion the better.

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Tuesday, June 16, 2009

Storyspace Is the New Airtime.

Marketers have traditionally spent a lot of their budget on obtaining airtime or its equivalent in various media. Exposure was deemed to be the direct route to attention and maybe interest.

Purefold suggests the provocative alternative of focussing one's budget on acquiring as big a share of the "storyspace" as possible.

Their stories are creative-commons-protected, crowd-sourced ideas centred upon subjects suggested and sponsored by businesses. Yours don't need to be. But you do need to have stories around which a crowd will congregate.

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Monday, June 15, 2009

News From BOM Correspondents - 20


This week's news and links:

Sinking Gordo

Excellent cartoon above is by Dutch illustrator Siegfried Woldhek. So much for G's supposedly massive international standing.

Well worth taking a look through Siegfried's gallery (copied with permission).

(HTP Michael P)


Honours for failure

"Dr Barbara Hakin, East Midlands health authority chief executive and key player in GP negotiation over pay and contracts, has become a dame." (BBC News)

So would that be those GP contracts that turned out to be one of the most costly failures in the entire history of the NHS? The contract that gave GPs an immediate 30% pay increase while simultaneously allowing them to opt out of providing Saturday morning surgeries, and out of hours cover? (See many previous posts - eg here)

Failure is a concept entirely unrecognised by Big Government.

Failure is success.

Black is white.

(HTP HJ)


Severe shortage of Public Sector Bosses

Yesterday's Sunday Times jobs section (Appointments) was a classic. Of the 14 top flight jobs advertised on pages 1 and 2, no fewer than ten were for tax-funded operations (and two of the others are virtually tax-funded). They included:
  • Chair of the East of England Regional Development Agency - yes one of those entirely useless RDAs that are high on George's Cuts List - £82 grand for a three day week
  • Director of Communications for Imperial NHS Trust - they've obviously got more than enough doctors and nurses, so they're using up their surplus cash on a "competitive package" for a Propaganda chief who will "deliver a cohesive communications strategy across a multi-stakeholder community"
  • Director of Marketing at Buying Solutions - a "six figure package plus benefits" for someone to market the services of the tax-funded Office for Government Commerce to the rest of the tax-funded public sector; Buying Solutions is of course a key player in the £175bn pa Simple Shopping government procurement shambles we've blogged so often.

No, I can't go on But at these times of high economic uncertainty in the real world, it's good to see such a a staggering array of well-paid cushty jobs still available in the public sector.

(HTP Mr V Angry)

£50m for translations nobody reads

According to the Telegraph:

"Town halls and Whitehall spend £50 million a year on translation and interpretation for the benefit of people who cannot speak English. Yet now an investigation has found that many of the expensively-produced foreign-language leaflets have never been read.

Documents which have failed to attract a single reader include a pamphlet for gipsies translated into Polish, and a lesbian, gay, bisexual and transgender directory translated into French. No-one read the Haringey Women's Directory when it was translated into Albanian, Bengali, Kurdish, Somali or Urdu.

The public bodies which spent the most on translations last year were the Metropolitan Police (£10.6 million), the Department for Work and Pensions (£4 million), West Midlands Police (£2.3 million), the Welsh Assembly (£2 million) and the Crown Prosecution Service (£1.5 million)."

We've met this translation moneypit before, and the government had promised to get a grip on it. Who would have guessed they'd fail.

(HTP Steve B)

Tax-funded Kinnocks

The S Times raised a lot of blood to boiling point:

"GLENYS KINNOCK, the new minister for Europe, has amassed six publicly funded pensions worth £185,000 per year with her husband Neil, the former leader of the Labour party. They have already received up to £8m of taxpayers’ money in pay and allowances, he as a European commissioner and she as a member of the European parliament.

The pair are already drawing payments from three of their taxpayer-funded pensions. Glenys Kinnock, 64, soon to be elevated to the House of Lords alongside her husband, is collecting a teacher’s pension and from next month is entitled to another from Brussels with an estimated annual value of £48,000.

Lord Kinnock, 67, is receiving one pension as a former MP and a second for his service in Brussels, together worth more than £112,000."

To which the only response is come the revolution, comrade...

(HTP - many BOM correspondents)


And finally...

In the light of Tyler's brief account of his omnibus excursion to Shepherds Bush last week, the Major draws attention to Rod Liddle's S Times column:

"The overwhelming bulk of violent street crime in London is committed by young black men, and in numerous cases against white people, although one would not impute a racial motive; the statistics suggest that young black male criminals are quite happy to stab or shoot anybody who hoves into view with either a bulging wallet, a mobile phone or an assumed reflection of disrespec’ in their eyes.

Apologies if this offends – but that’s how it is. At most, the African Caribbean population of London is about 12% of the whole. But black males are responsible for nearly 60% of arrests for robbery – and the overwhelming majority of gun crime, most of it black-on-black violence.

We skirt this issue, mostly for decent, if deluding reasons – that a proportion of young black males is more likely to commit violent crime than other sectors of the population. It is a form of racism, though, to assume that the problem is simply a given, and unalterable – but we have been hamstrung in our attempts to deal with it for reasons of political correctness."

The Major doesn't generally approve of lefty Liddle, but reckons he's spot on here.

"So why do we have to tolerate this?" he roars. "Why can't we lock these people up? We could double the number of prison places for £3bn pa, and we could get £1bn of that from canning the useless Probation Service! Or why not make them join the army? Prison or the army - that's your choice son... Sgt Major Hogsflesh would soon sort them out".

(See here for a collection of the Major's bracing views on cost effective criminal justice, along with some facts and figures culled by Tyler).

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Friday, June 12, 2009

Public Service Productivity - Still Appalling

Fancy stats, but the picture remains the same

For many years now, the Office for National Statistics has been beavering away trying to develop measures of output and productivity in our public services. It hasn't been at all straightforward, as we can see by glancing at the dense array of statistical formulae they have been forced to deploy.

So why is it important?

Because we've shovelled vast amounts of dosh into these services over the last decade, they now consume well over 20% of our national income, and we need to understand just what we're getting in return. We need to know if we're getting value for money.

And why's that so hard to do?

Because the output of public services is not subject to valuation in the marketplace. We know precisely what cars and window cleaning services are worth, because the marketplace tells us. But with public services provided free at the point of use, we have literally no idea what they're worth.

All we know is that they cost hundreds of billions every year, and since 1997 the bill has more than doubled.

So the ONS has being trying to work out how much of our extra spending has actually fed through into extra output. And this week, they published their latest attempt, which for the first time gave a picture for the whole of our public services (although still excluding welfare payments, and other cash transfers). Here's their widely quoted big picture:



As we can see, they reckon that from 1997 to 2007, the combined output of our public services went up by 33.6%. Unfortunately, the inputs - after stripping out inflation - increased by 38%. So according to the ONS, productivity fell by just over 3%.

Now let's just be quite sure we all understand what that means. It means that compared to 1997, our public services are now delivering worse value for money - we get less for every pound we put in.

Ah well, you say, a fall of 3%... that's not too bad... at least the bulk of the extra money has fed though into more output... at least we are getting 33.6% more healthcare, education, law enforcement etc etc. Could be a lot worse, so quit whining.

Hmm.

Just compare this public service productivity performance with that delivered by the market sector of the economy. According to the ONS, over that same period, 1997-2007, productivity in the market sector increased by 2.2% pa. Which meant that by the end of the period we were getting nearly a quarter more output from the same input.

So why can't our public services manage that? Surely they should be able to achieve at least some productivity gains. Surely they shouldn't be giving us worse value for money as each year passes. How hard can it be?

And in truth, the picture is almost certainly even worse than the ONS figures suggest.

That's because the ONS has incorporated into its output measures a series of highly contentious "quality" adjustments which they claim have the effect of increasing measured output year-on-year.

For example, its measure of education output basically comprises the number of pupils passing through our state schools and colleges. But the ONS now adjusts that straightforward measure for supposed improvements in quality, and they do that by factoring in the year-on-year rise GCSE grades.

What?

GCSE grades as in prizes-for-all-dumbed-down-through-the-floor-abandoned-by-the-leading-private-schools GCSE grades? Why would anyone believe education quality had improved just because our kids have even more of them?

Similarly, the ouput of healthcare services has been adjusted for supposed improved quality using - among other indicators - the reduction in recorded waiting times. Even though we know that waiting times are routinely massaged and gamed by NHS managers (see previous posts).

So the ONS results almost certainly overstate the output growth of our public services and understate the extent to which productivity has fallen.

Indeed, the ONS themselves publish this alternative version of productivity, without the quality adjustment (blue line):

As we can see, on this measure, productivity is down by 9% over the period, a fall of around 1%pa.

Or to put it the other way round, even after allowing for inflation, every pound we put into public services today buys 9% less than it did a decade ago.

Ten years of massive spending has left us with the fiscal headache to end all fiscal headaches. And despite interminable wittering about public service reform, value for money has gone out the window. How long are we supposed to put up with this?

Never mind about "ring-fencing" this or that hot potato public service. Now the money has run out, drastic reform is the only solution:
  • choice and competition
  • school vouchers
  • social health insurance
  • elected sheriffs
  • localised welfare
  • fiscal decentralisation

We all know the score by now.

But sadly, we're still searching for those balls of steel.

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What Do You Want Your Customers To Say?


You're in a restaurant. You've been served and are eating your meal. Your table is then approached by a waiter/waitress and you can be asked one of two questions.

1) Is everything OK?

2) Is there anything else I can help you with?

Unless you're particularly belligerent or annoyed, your response to the first will probably be a polite "yes, thank you" regardless of the situation. You'll feel faintly patronised and the establishment will learn nothing about how to improve their service nor understand why you don't return.

Always ask questions that give you meaningful answers. You may not always like them, but it's far preferable to sticking your head on the sand.

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Thursday, June 11, 2009

Green Shoots


Green shoots, eh? Seen any round your way?

Yesterday's report from the National Institute (NIESR) said:

"Our monthly estimates of GDP... point to March as having been the trough of the depression, with output rising in April and May."
According to them, GDP rose by 0.3% between March and May.

Which has been seized on by some Labour commentators as confirming the economic genius of Gordo. His boldness in reflating, bailing out the banks, and slashing interest rates, has made this one of the least painful depressions ever. Much less painful than the Great Depressions visited on us by the Evil Tories.

So where's this growth actually coming from?

NIESR says both industry and private services have expanded by about one-half percent - so surprisingly, it isn't coming from booming public services (although they have grown by 2% over the last 12 months).

Which is fine.

But the real question is where do we go from here?

Because it's hardly surprising that fiscal splurges and unbridled use of the printing press can shore up demand in the economy in the short-term. But after the initial boost, what happens next?

Deficit financing on the current scale is unsustainable: the financial markets will simply not tolerate it. And roaring printing presses always have the same ultimate pay-off: an inflationary blow-out.

Green shoots they may be.

But green shoots ahead of a hard frost are not necessarily such a great idea.

PS No time for a proper blog today, because for various reasons, I had to visit Shepherds Bush. The first challenge was public transport. Fortunately, it turned out that the 94 bus makes an excellent alternative to Bob Crow's Central Line... except that it takes about four times as long. But then there was my travelling companion. I found himself wedged in on a crowded top deck by a hefty black teenager whose main aim seemed to be the intimidation of fellow passengers. He was wearing a baseball cap pulled right down, dark glasses, and a bandit-style face mask. His mp3 player was particularly loud. Now sure, he was probably a victim himself - I couldn't help noticing the scars on his wrist. But who's to intimidate on the 94 bus in broad daylight?

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Wednesday, June 10, 2009

Give And Take Marketing.


I was told yesterday that Yahoo had recently upgraded their messenger service for mac users. Was that person happy? No, because after waiting a long time for this improved version to be offered, he discovered that he would have to upgrade his otherwise perfectly adequate computer in order to use it.

I imagine that would be frustrating enough if he had to continue to use the previous software, but I was then told that while launching the new version, Yahoo had decided to make the original obsolete.

Now my friend is I'm sure in the minority of messenger users, but who knows how sizeable a minority? Compelling a frustrated user to become a non-user unless he is prepared to spend a significant amount of money on a hardware upgrade seems to me to be a very perverse act for a non-hardware company to make. I don't see the upside for them. And I know their former user is intent on ensuring they don't have one.

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Electors Have A Clear Choice - Truth Or Lies



One immortal soul heading downstairs


"This is the day when the Conservatives have revealed their true manifesto for this country. There can be no doubt that the choice, whenever it comes, is between a Government prepared to invest in the future and a Conservative Party that is going to cut."

So said our OMG-is-he-still-there "leader" at PMQs today.

What on earth is he talking about? In the most recent Budget, his own Chancellor - second-choice Chancellor though he may be - gave us the biggest public spending cuts since Labour's last biggest public spending cuts in 1976.

One explanation is that poor Mr Brown genuinely believes his Government is not planning to cut. After all, down there in the bunker he's had a lot of harrassment lately, and the good Doc reckons he really could be cracking up. It's quite possible he simply doesn't understand how bad things are, and thinks those twenty fresh divisions he's going to hurl against the Russkies actually exist.

So in a spirit of helpfulness may we remind him what Darling told us in April (also see this post, and note that some of the following figures are lifted from the excellent IFS analysis).

Darling said that spending will increase from £671bn this year to £752bn in 2013-14, which were the numbers Gordo repeated today. But of course, those are cash figures - not discounted for future inflation - and they include the temporary pre-election spending boost.

If instead we concentrate on the period post-2010-11, and adjust the cash numbers for Darling's own forecast of inflation, we find a rather different picture. Overall spending falls by 0.1% pa. But within that, debt interest and welfare benefits will unavoidably grow strongly. Which implies that Darling is planning Big Cuts in other areas.

Here's the IFS's summary of Darling's spending plans post-2011:


So as we can see, spending on debt interest explodes by 8.4% pa in real terms (actually, we reckon it will grow even faster than that - see this post). Welfare benefits and similar spending grow by almost 2% pa. Which means that Darling is planning cuts in all other spending - including the NHS and schools - of about 2.3% pa in real terms.

Furthermore, as the unfortunate Andrew Lansley blurted out this morning, if you ringfence the NHS and overseas aid - which Cam himself has inadvisedly promised - then the cuts elsewhere will be even bigger... around 10% over three years. And that is precisely what Darling is planning (well, either that, or his numbers are even more nonsensical than usual).

So does Gordo not know any of this? Is he really that far gone?

No of course not.

He is simply telling the British electorate another of his Gigantic Lies. Just like all those lies he told when he was Chancellor himself.

You do kinda wonder what went on in that famous manse of his.

I'm sure Jesus never said lying was OK.

And personally, I wouldn't want to be explaining this at the Pearly Gates.

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Tuesday, June 9, 2009

The Message From Bruvver Crow

Two previous messages...








And now we have his new message: a full-blown 48 hour strike on the London Underground, starting now.

So what's it over, exactly?

To start with, it seems Bob and the bruvvers don't like the pay deal they've been offered. They reckon that a five year deal giving them inflation plus 1% for the first year, and inflation plus 0.5% pa thereafter, is just plain mean.

What! you exclaim.

What the FFFF!!????

Isn't it a fact that tube workers are pretty well wedged already? Don't tube drivers get paid £40 grand as a starting salary, and station supervisors £35-39K? And come to that, isn't it a fact that earnings in the private sector are actually falling?

Yes, well, OK... park the pay issue. The RMT have other grievances.

First, they want a cast iron job guarantee. With such lucrative positions, members are naturally keen not to lose them. Especially given the chill blasts blowing above ground, where everyone else is facing the chop every single day.

And second, it turns out they're also striking for the reinstatement of two suspended comrades facing disciplinaries. One comrade is being victimised by means of a criminal trial for theft, and the other is being picked on over a trivial matter of opening the doors on the wrong side of his train, nearly losing his passengers overboard, and then lying about it afterwards.

So Bob's message today is that ordinaryhardworkinghardpressedwageslave Londoners must suffer so that his members can grab an even bigger slice of the pie, enjoy even more job security, and be even less subject to management discipline.

But Bob's real message is of course much bigger.

His real message is that now is the best chance in years for public sector unions to go for gold.

Think about it. As we blogged here, the public sector is four times more heavily unionised than the private sector, with a 60% membership rate. Which means the unions have far more power in the public sector.

And public sector workers are far more likely to strike (see this post): even in the relative industrial calm of the last five years, they have been 30 times more likely to go out.

The result is that the public sector loses many more days to industrial action than the private sector, even though it employs only a quarter as many people:


So against that background, public sector union bosses are looking at a once in a career opportunity.

Here we have a reeling dispirited government who no longer care if they give away the shop. They're way beyond that. Their main aim now is to minimise the scale of their defeat, which definitely DEFINITELY means no Winter of Discontent style public sector strikes.

Sure, if they give in to big union demands they'll be increasing the problems facing the next government. But why should they worry? They don't care if they make life more difficult for Dave and George in 12 months time - in fact, that would be a positive bonus.

And the union bosses ain't quite so dumb as they look (they can hardly be that dumb). They know that life will be much tougher with Dave and George across the table, if only because D&G will be aiming to stick around for a decade.

So if you're a public sector union boss, there's only one conclusion: now is the time to strike.

Literally.

Update 10-6 - interesting cross reference on transport pay in today's Times: "Data from the Civil Aviation Authority (CAA) shows for the first time how much higher BA’s wage costs are than its rivals. The average salary for BA’s 14,000 cabin crew, including bonuses and allowances, is £29,900, compared with £14,400 at Virgin Atlantic and £20,200 at easyJet. BA’s pilots earn an average of £107,600, compared with £89,500 at Virgin and £71,400 at easyJet." Interesting.

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Monday, June 8, 2009

Marketing Mugs.


During eleven years of treatment for mental illness, performance artist Bobby Baker created a painting each day. Until August, a selection of them can be seen at The Wellcome Collection in London. They include a brilliant evocation of uncontrollable weeping and are all accompanied by captions such as

Terribly Tiny Dr T wearing her psychiatrist's shoe arriving in her shiny black Saab convertible to save our sanity.

and this one that particularly took my eye.

I drew quite a lot of mugs. I drank a lot of tea.

A nice summary of marketing's true aim. It's not about making your customers drink a lot of tea, it's about making your customers think about mugs which in turn will cause them to drink a lot of tea.

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PFI Millstone - How Heavy Is It Now?


It's definitely heavier

Regular readers may recall an extraordinary exchange at a Public Accounts meeting in November 2007. The PAC were grilling Treasury mandarins on the PFI millstone, and they wanted to know how big the debt had become.

Now, you might have thought that would be simple to answer. After all, PFI involves some pretty chunky liabilities, so the mandarins would surely have the figures at their fingertips.

Er, no. The mandarins floundered around all over the place. Finally, one PAC member - the redoubtable Richard Bacon - got so frustrated, he whipped out his own pocket calculator and literally added up the numbers for himself.

You see, the projected annual contractual payments under outstanding PFI deals are published on the HM Treasury website (see here - the "Signed Projects List"). What HMT doesn't publish is their total compounded value, and that's the figure we really need to know. Otherwise, we cannot understand how big the PFI liability has become in the context of the government's overall debt.

So let's re-run Bacon's calculation and see how big that future liability now is.

First, here's the latest HMT projection (April 2009) of annual payments under existing PFI contracts:


As we can see, annual payments are projected to peak at £8-9bn pa in the middle of the next decade (ie the decade when we won't have any money). And they then remain above £7bn pa all the way until 2028.

The first calculation we can do is to add up all the annual payments to give the grand total over the whole of the projection period. That comes to £206.6bn.

Which in itself is quite worrying, since when Mr Bacon did his calculation, the total was "only" £157.9bn. So in just 18 months, the total has increased by £50bn, or around one-third.

But of course, simply adding the numbers doesn't give us a figure we can properly compare to the rest of the government's debt mountain. For that we need to discount the future PFI payments by an appropriate interest rate. And in this case, the appropriate rate is the yield on government debt (ie gilts) which currently stands at about 4.5% pa.

And when we do that, we get a figure of £124bn.

So we estimate that our PFI debt currently stands at £124bn, up from £100bn the last time we crunched the numbers.

There - that wasn't so hard, was it.

In which case, how come there's so much confusion about the right figure? As Mr B put it:

"I have been trying for several years to get to the bottom of how big is PFI, and it seems to be quite difficult to get an accurate answer. I have been told by various people, including by the National Audit Office, answers such as, “Well, really they do not know.”

The truth is that the mandarins don't like debt calculations like ours. They prefer to quote a much smaller number that comprises the so-called "capital value" of the PFI projects. And that currently stands at £63.8bn, only about half our number.

Why the difference?

In essence, it's because the mandarins' number only measures the capital cost of building the PFI school or hospital (although, to be frank, it isn't entirely clear that it even measures that). Our number, on the other hand, includes not just the capital cost, but also the future cost of various services that come as part of the PFI contract - everything from maintaining a hospital to running a prison. Our number also includes the funding costs of the PFI contractor.

So our number measures the whole shebang, whereas the mandarins prefer to focus on just one element of the total PFI cost. Which - surprise surpise - is much smaller.

In fairness, they do wheel out an argument to support this apparent trickery. They say that the element of future PFI payments that represent service charges (such as cleaning and maintenance), is nothing to do with borrowing to fund a capital asset. And just as we don't count the future salaries of government employees in our measure of government debt, we shouldn't include the future payments for these PFI services.

Hmm.

You see, the big difference is that future payments for PFI services are a clear contractual liability, whereas future salary payments to government employees are not.

Government employees can always be made redundant (watch this space), but PFI contracts cannot be broken unless the government can prove (probably in court) that the contractor has failed to provide the agreed service. Which means we are skewered firmly on the hook.

And fundamentally, that's also why the Office for National Statistics' tortuous distinction between different types of PFI contracts is also bogus.

(As you may recall, the ONS distinguishes between so-called operating leases - which don't count towards government debt - and financing leases - which do count. And guess what... according to them, the vast majority of PFI deals are operating leases, so don't count. How very convenient. See this post).

The bottom line is that PFI represents a substantial contractual liability for taxpayers. One that has now soared well over £100bn.

PS Someone said to me recently that PFI debt is now pretty small potatoes compared to the gzillions of debt being run up everywhere else. But of course, as always, a hundred billion here, a hundred billion there, and pretty soon you're talking real sponduliks. Either that, or national bankruptcy.

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BtoB Marketing's Response to Social Media: Have we Lost all Control and Impact?

For decades marketing has been desperately trying to connect with their customers in a controlled, one-way fashion. We had control of the brand, all marketing content as well as the traditional channels that were used to communicate with the market. And even on occasion, we cautiously exposed our executives and engineers to our customers while all the time holding our breath that they didn't say the "wrong thing" that would hurt our image, costing us millions of dollars in marketing investment and countless hours including nights and weekends executing our marketing strategy.

It reminds me of a time when I was a product marketer in the semiconductor industry. I would visit customers quite frequently with our lead engineer. In one meeting this engineer exposed our greatest product flaw to one of our key customers. As I cringed in my seat, I expected the ROI from millions of dollars of investment into the brand value of this product to be instantly destroyed not to mention the lifetime value of this customer as they quickly switched to our competitors' products. To my surprise, the candor expressed by this sincere engineer did not doom our company's success at all. In fact, it was a key factor in gaining credibility with our customer, including serving as the basis for a joint discussion and future research to solve these problems in a collaborative fashion. This new problem-solving process served as a key differentiator for our products in a very commoditized market.

What's the connection? Imagine 100s or even 1,000s of your engineers, developers and/or product managers interacting directly with your customers through their own blogs, contribution to other blogs, interaction through Twitter or countless other social media applications. Sound familiar to anyone?. . . How do we stop this PR nightmare?. . . How do we control them?. . . How do we ensure that they stay on-message with our brand?. . . How can we review every bit of content that they put on the Internet? The simple answer is that we "don't" try to control them.

Not to say that we should hang up our marketing hat and make wine in Napa Valley. In this new social media model we need to devise new ways of helping our organization to best represent the company while keeping the needs of the customer at the forefront of our communications; and even better leveraging this new found connection to the customer. Some ideas include:

  • Increase your resources dedicated to internal communication. We've always said that everyone needs to be a salesperson. With the new social media model, we all have to be marketers as well, more than ever before. [CMO Advisory Service clients should refer to a recent publication entitled Intel Launches a Comprehensive Digital Marketing Training Program for its Global Marketing and Sales Staff, IDC doc. #218416]
  • Ensure that specific marketing staff are accountable for your company's social media strategy.
  • Don’t “control” the social media strategy, “guide” it (e.g., evangelize, train, share best practices)
  • Provide the infrastructure for your social media "ambassadors" to communicate and interact with your markets (e.g., social media applications/platforms, basic guidelines for communications)
  • Integrate social media across the organization’s existing efforts
    - Develop private communities for customers to provide a self-serving environment for peer-to-peer interaction, as well as providing a great source of voice of the customer for product improvement and new product development
    - Establish public communities on your web site to share insight into new solutions for customers' challenges; and contribute to other communities (no one will go to your party if you don't go to theirs)
    - Integrate on-line and in-person social networking strategies (e.g., facilitate collaboration for an in-person event amongst prospects and clients before (on-line), during (in-person) and after (on-line) the event
    - Include social media as part of the overall marketing mix [CMO Advisory Service clients should refer to a recent marketing mix study entitled 2009 CMO Tech Marketing Barometer, IDC Doc. #217640]
  • Ensure that your social media strategy aligns with your customers' needs. For example, relevant content from independent sources continues to be the greatest magnet for attracting our customers' attention. Ensure that your communities remain on target to your customers' needs.
  • Don't forget performance measurement. Sample metrics for measuring the impact of social media include: customer satisfaction and retention, marketing reach and engagement (e.g., click-thrus, time spent on-site, more qualitative insight such as types of conversations)

Taking a more strategic perspective to leverage the power of new social media channels without stifling their potential will enable marketing to significantly increase its impact on the organization.

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Sunday, June 7, 2009

News From BOM Correspondents - 19



Ford Zephyrs not good enough for them these days

It's been too long since we did a round-up, for which we apologise. Frankly, events at The Golden Trough in Westminster have been so extraordinary and so distracting that everything else has sort of paled in comparison. But that's no excuse - we have to stay on the waste case, because it sure ain't gone away.

1. NHS "Productivity" Unit

DM Andy has the story of this... er... "efficiency" unit. It costs us £350 grand pa, for which we get one highly paid quangocrat director and one part-time secretary.

That's it.

Lifelong socialist Andy works down at the sharp-end of the NHS, and he's tearing his hair out. He asks: "Why are we wasting money like this and giving the Tories and the likes of Burning Our Money such an easy target?"

An excellent question, Andy.


2. Public Sector Pensions

The S Times has been back probing this old favourite:

"ALMOST 34,000 public sector workers have retired with £1m pension pots, twice as many as previously thought...

...Almost 400 retired staff from Glasgow city council and 223 from Kent county council have pension pots worth £1m or more...

... Mervyn King, governor of the Bank of England, has a pension now worth £5.4m, the largest in the public sector. He is among more than 20 civil servants and quango bosses who have accumulated pensions worth £2m or more.

Three BBC board directors also feature in the top five. John Smith, who heads BBC Worldwide, the corporation’s commercial arm, has accumulated a £3.1m pension pot after 18 years’ service."

So let me see... 34,000 times at least £1m equals at least £34bn.

(HTP Steve B)


3. Troughing Quangocrats

Also in the S Times:

"The head of a government regeneration agency ate 112 meals at taxpayers’ expense as he visited some of the country’s finest restaurants over 20 months... John Walker, the former head of English Partnerships, sent in a bill of £1,152 for service in a Belgravia pub and restaurant, charged £843 for service at Shepherds, the Westminster restaurant, and £569 at Pomegranates in Pimlico.

He spent nearly £3,500 in one eaterie alone as he racked up costs of more than £18,000 on restaurant and food bills.

Those on Walker’s guest list from April 2007 to November 2008 included the former cabinet ministers John Prescott and Hazel Blears, civil servants from the communities and local government department, a civil servant from the Department for Culture, Media and Sport, three executives from the Olympic Delivery Authority, the chief executive of the Housing Corporation and the director of policy at English Heritage...

The expenses of the most senior officials at more than 120 nondepartmental public bodies reveal how some, such as Walker, spend big sums on dining out with employees from other taxpayer-funded organisations."

Remember that as you tuck into your Great Depression beanz on toast.

(HTP mister hungry)


4. Troughing MPs

It's way beyond parody, but Michael Chapman-Pincher has produced his own singalong tribute on YouTube. Here's Part 1 of 3:




5. Cops in Jags

From a breathless MSN Cars:

"Watch out, watch out, there's a big cat about...

Jaguar is now offering police forces across the UK the chance to go hunting criminal in style.

Police-spec 3.0-litre Diesel S XFs are out being evaluated by the UK's blue light brigade right at this very moment.


We reckon the slinky 275hp Jaguar will become one of the most powerful diesel police cars to ever roam the British mean streets - unless there are any bobbies out there rocking BMW's 286hp 535d. Either way, the XF's parallel sequential turbocharging should provide all the necessary in-gear, as well as emergency, response."

Yeah.

Enraged BOM correspondent Scott W says:

"My local force seems to have a love affair with high end BMW's so I bet they will be on this gravy train. Totally unjustified when the majority of their policing is done in an urban area.

How can we allow this waste to continue? How many bobbies could we get on the beat if we prised the police out of their premium motors? Do you see the police in other countries driving around in such things? No."

And now that Morse is sadly departed, our cops have no need for Jags either.

Fun at night

Tyler needs to leave it there in order to watch the Euro results.

Just how badly will Labour do?

Will their hopeless wibbling "plotters" summon up the balls to do something? Anything.

Will the quite superb Mandy crush some more BBC pundits like he crushed his old Labour mate Andy Marr this morning?

How perfectly delicious.

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