When I joined the Home Civil Service in October 1986, I went to London to work in the Small Firms and Tourism Division of the Employment Department at Steel House on Tothill Street. I had a fascinating introduction there to Government, Whitehall and the institution that spawned Sir Humphrey Appleby.
I make no apologies for having been proud to be a civil servant. I believe in the public service ethos. An ethos that has changed over time, but which may be traced back to before Samuel Pepys was clerking for Charles II’s Navy Board. I, however, had the dubious pleasure, during the course of my time in SFTD to observe at close hand one of those Masters of the World that have inhabited the City of London for a millennia.
The section within which I worked was interested in a range of issues affecting Small and Medium Sized Enterprises, but particularly access to finance. I am not sure how the meeting with the gentleman from the City came about, but I was asked to take the minutes when my Grade 7 section leader met with him.
I was not overly impressed by the appearance of this overweight chap, dressed in a pin stripe suit which he seemed to have slept in. To cap it all, the space between his suit stripes was at least an inch! A sure sign of a bounder, in my opinion. And there was no sign that he was a vigorous, innovative entrepreneur. Quite the opposite in fact, as we soon discovered.
My boss cut to the chase. Why were SMEs, particularly new business starts ups in manufacturing, technology and the like finding it hard to obtain finance in the City? The answer was straightforward, but surprising. They were not asking for enough money. What?
Put simply, the cost of appraising a request for funding in a manufacturing project was so expensive that City firms were looking to make investments of around £1 million so as to recover their appraisal costs. In other words, the analysts, for example engineering graduates, were making more money in the City than in industry and the cost of employing them was making it harder for industry to raise money.
The City in 1987 was looking to make investments of around £1 million when few business start ups wanted more than about £300,000 from the City. Hardly surprising then that the City switched to speculating with paper when it had effectively priced itself out of the market for investment in the real as opposed to virtual economy.
I formed the distinct impression, after the meeting was over that my boss was wondering why he had bothered to arrange it in the first place. All we had done was prove, beyond reasonable doubt that the City was closed for business as far as most SMEs were concerned. Kind of sounds familiar, does it not?
The ramblings of a former DWP Civil Servant ... 
With the UK been one of the most centralised countries on the world, having high inflation, slow (if any) growth (despite with people in the press say) and other barriers to creating a viable business, I am amazed at the lack of entrepreneurs that have been publicly up in arms over how the economy is affecting them personally and professionally.
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Entrepreneurs are a curious bunch, they are rarely like you and me. They quite often seemed to be a little out of touch with reality, going by the many hundreds of letters that crossed my desk in London. There was an inverse proportion rule that we applied to the letterheads of our correspondents. On balance, the more elaborate (and expensive) the letterhead the less business sense the writers seemed to have.
Combine an almost babes in the wood mind set with I want to be just like Richard (rags to riches) Branson, then rebelling against the status quo is well beyond one’s ken. The Branson reference being a sure sign of a superficial approach to and understanding of business as most must expect to experience it.
Ultimately, too many budding entrepreneurs have overly elaborate letterheads blinding them to the realities of the world as it is. So much easier to believe the simple nostrums that only if Government got out of the way or the unions were humbled that one’s business would thrive. I also think it is hard for some starting out in business to believe that the club they are seeking to join will not welcome them with open arms, but then, why should it? Competition not co-operation is the hallmark of Anglo-Saxon capitalism, followed closely by cognitive dissonance.
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There is certainly a cognitive dissonance that permeates in business, especially if some of the practices go against one’s beliefs. I have a lot of friends who are spiritual and are trained in holistic and spiritual treatments and practices. On the one hand, they state that this practices so many thousands of years ago were delivered freely. Yet on the other they have to do realistic and make a living somehow.
I’m not condone them for selling their services for money, but it is fascinating on a psychological and sociological level the practical choices they have to make in order to keep afloat as it were.
As for London been the centre of all in this country, why do you think that is?
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I think it is interesting that the one thing that most people, whether pro or anti capitalism agree upon to some extent is that being in business requires compromising ethical values and the like. A combination of capitalism rots our moral values and you have to be hard headed to get on in business? I think you may get on in business with your core values intact, if you accept that the popular Anglo-Saxon model of doing business is flawed. Dr Deming has a prescription I am happy to recommend!
I do recommend you read the Wikipedia entry carefully, some of it may surprise you and some of it, like the primary purpose of a business is to stay in business is very, very counter intuitive. They follow this management philosophy at Jaguar, but it may be applied in any sort of organisation. It is not instant pudding and management cannot cherry pick the elements that appeal to them to make it work. It is continuous (r)evolution which people do over time get comfortable with, because they drive the change themselves. Dr Deming was the guy who coined the phrase there are known, knowns and known, unknowns!
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I think you may find this take on The Apprentice amusing, if you have not already seen it?
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Admittedly I have just skimmed through the link you gave me. Yet one thing stood out. Firstly Deming’s philosophy is summed up as thus
(a) When people and organizations focus primarily on quality, defined by the following ratio,
{Quality} = {Results of work efforts}/{Total costs}}
quality tends to increase and costs fall over time.
(b) However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.
This can be related to a lot of these private companies taking over the running of what is essentially public sector work (Atos, G4S, Capita to name a few). These organisations have been terrible for the most part, yet are still operating on behalf of the government based on a erroneous ideology. It’s just sad.
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A very neat summing up. I will shamelessly plagiarise you elsewhere!
You will note that the type of business or organisation is irrelevant when it comes to adopting TQM. Andy Burnham was speaking on these lines back in January about the NHS. So who knows what might happen in the future.
When costs fall, savings are made that may be re-invested. When costs are cut, there is rarely anything to re-invest.
As you say, it is sad that this approach has not been widely adopted, perhaps because Deloitte Touche Tohmatsu, PricewaterhouseCoopers, Ernst & Young, and KPMG are dead set against it. TQM reduces their profits by encouraging organisations to use their staff as consultants rather than bringing in outsiders.
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