Redefining failure

Last Tuesday (14 June) NESTA hosted a lunchtime discussion with the ‘Undercover Economist’ Tim Harford* to celebrate the UK launch of his latest book: Adapt. The discussion was entitled: ‘Problem solving in a complex world’, and was a chance for Tim to discuss some of the ideas he raises in his new book. Tim believes that today’s world is too complex for ready-made solutions, and that the public, as well as businesses and leaders, need to adapt and change in order to tackle issues such as climate change, poverty and the financial crisis.

One of the most interesting ideas that Tim raised in his talk was about the place of failure in society, particularly within business and politics. Tim argues that our current systems reduce innovation and experimentation because we are too afraid to fail, and this is harming society. One example of this is the difference between the contribution of East Coast banks in America, which are now deemed too-big-to-fail, and West Coast companies such as Google, where executives say that 80% of their products don’t succeed.

At the drinks following Tim’s presentation I met two Masters students from Imperial and we had a lively discussion on the role of failure within business, commenting that most company reward schemes are focused entirely on success. We agreed that if we want to increase innovation we must create an environment in which people are willing to take risks and try new things. Therefore, we must reward those who experiment, for example through a monetary bonus or with verbal feedback in a review.

Tempering this, there is of course a need to protect against incompetence and ensure that the risks taken are calculated and proportionate to the reward on offer. Tim offered three rules for ‘successful failure’: a willingness to try a variety of things; making sure the failures you do have are survivable; and learning to quickly recognise the difference between success and failure. The companies and organisations that succeed in the coming years will be those that establish boundaries but accept that not all new ideas will succeed and yet encourage their employees (and clients and partners) to try new things anyway.

However, I believe that we must also change the language that we use. The word ‘failure’ has almost entirely negative connotations – it is the opposite of ‘success’. Yet every great innovator will tell you that their ‘failures’ taught them crucial lessons without which they would never have achieved their successes. We are taught from an early age that we should “learn from our mistakes”, with the assumption that we will make some, but for many people this instruction changes when they enter the world of work to “don’t get this wrong”. The implication is that failure is unacceptable, and therefore almost no risk is worth taking. This dampens creativity and reduces innovation, without which society will never improve.

* For those who don’t know him, Tim Harford writes a regular column for the Financial Times, as well as being a television and radio presenter and author. He is a gifted public speaker and writer, with an ability to explain complex economic theories in language that ordinary people can understand. His blog, at www.timharford.com, is definitely worth a read.

Jo Nussbaum, Linstock Consultant (jo@linstockcommunications.com)

Minority report

Below is an extract from a recent byline by Linstock Consultant Tony Cox in Money Marketing’s Retirement Strategy. To read the article in full click here. 

Minority report

Going gaga, losing your marbles, not being able to look after yourself into old age. Things most of us would rather forget when considering our social and financial future. And as research last year by AIFA and Prudential showed, financial advisers and their clients seem reluctant to discuss these issues.

But the current and predicted demographic changes to the UK population mean we must tackle the issue of how we look after ourselves in later life.

The number of people in the UK aged 65 and over will grow to 23 per cent by 2034. The impact of these demographic changes on the long term care sector, including product providers, advisers and care home owners, will be profound.

The Dilnot Commission is expected to report in July and is likely to make wide ranging recommendations for changes to how we fund long term care.

The danger is that one significant demographic issue – ethnicity – could get lost in the desire to address the needs of all.

The UK's Black and Minority Ethnic (BME) population is growing even faster than the wider population.  BME groups totalled 8.7% of the UK’s population in 2001 and the latest census, which Linstock has helped promote, is expected to show a big rise.

Unless policy makers consider issues specific to the BME population as they explore the future of long term care, the very real danger is that the UK’s rapidly growing minority ethnic groups will be left facing a social care system that does not understand them and is ill-prepared to provide for them. Commercial opportunities will be lost and social justice will suffer. 

To explore these issues, Linstock carried out research into the views of ethnic minorities on long term care.

Our research reveals that BME groups’ attitudes to caring for family, and perceptions of social care, differ considerably from the mainstream views held by the white British population.

The research reveals that the stigma attached to placing relatives in social care amongst these BME communities is unlikely to erode at the same rate as the traditional family model. This will create a gap in the ability of BME communities across Britain to provide or access appropriate care.  This presents a challenge for social policy, a market for care home providers and an extra consideration for advisers who are working with clients from ethnic minorities.

Language is also considered a big problem, as many elderly BME citizens may have only a small grasp of English, or, quite simply, may just prefer to communicate in their mother tongue. There is both a commercial and moral imperative for the industry to engage with these communities, perhaps through their own networks, newspapers, TV and internet forums, in order to address these issues.

Three things need to happen. First, policy makers need to seek advice from BME groups and those who work with them to understand their particular needs. Second, the long term care sector needs to understand the way in which they are perceived by ethnic minority groups in order that they can improve the sensitivity of their services and product offerings. Finally the industry needs to consider how it can better communicate with BME communities in order to break down the stigma that exists about the services that it provides.

So what is the message for financial advisers and the wider finance industry? First, you should look to develop and expand your offering to ethnic minority backgrounds to take advantage of this rapidly growing sector. Second, as the AIFA/Prudential report recommended future requirements such as long term care, should be signposted as part of defining and implementing a specific at retirement proposition.

It’s an opportunity that the industry would be gaga to ignore.

Tony Cox
Consultant at Linstock Communications

Why the census is the best measurement of the UK’s ethnic diversity

It is widely acknowledged that the UK is becoming more ethnically diverse, and the 2011 Census is expected to verify this by showing an increase in the ethnic minority population from 7.9% to 15%. As we await the results of the census, which will be released from September 2012, it is useful to assess the merits of other data sources that highlight changes to the UK’s ethnic and cultural landscape.


Most recently, Experian, the credit agency, carried out an analysis of Britain's ethnic minorities for the Observer Newspaper. The analysis used Experian’s Mosaic database, which matches more than 50 million surnames to postcodes, to paint a picture of Britain’s second and third generation migrant communities. By tracking surnames Experian deduced that migrant communities, driven by economic empowerment, are moving away from inner London and relocating to the suburbs.


Experian’s analysis is food for thought and supports the findings of research that has already been conducted in this area by Leeds University and Tim Butler, professor of Geography at Kings College London. However, Professor Richard Webber, who developed the Mosaic database, concedes in this article that surnames are merely “useful indicators of people's origins”. This calls into question the validity of the research methodology employed by Experian, as well subsequent assertions made in relation to Britain’s ethnic landscape.


Unlike Experian’s methodology, the 2011 Census asks individuals to define their own ethnic group either by using one of the prescribed categories, or by filling in the write-in box, immediately boosting the accuracy of the data by replacing “useful indicators” with hard facts.


With its focus on data supplied by the individual and the inclusion of a number statuses including ethnicity, the census is unlike any other data source that currently exists. Not only does the census provide an in-depth analysis of the state of the nation required by central and local government, businesses, charities and research organisations; it remains the true yardstick for assessing the scale and scope of Britain’s ethnic diversity.


Bieneosa Ebite, Linstock Associate
Follow Bieneosa on Twitter

Silent Knight?

After a year long build up the Independent Banking Commission has finally published its interim report.  The headline recommendation was that UK banks' retail operations should be ring-fenced from their investment banking arms, although it did not go as far as some expected and suggest the two should operate as separate entities.

But what will be the real impact of the reforms? Opinion is widespread although the general consensus, and the reaction of the markets, is that the Banks are breathing a sigh of relief . And that the reforms will be broadly welcomed across the political spectrum, which is key if the proposals are to be implemented quickly by the Chancellor once the final report is delivered to him in September.  

There was an unusually timid response from the British Bankers' Association that said it would "take time to carefully consider the costs involved and the economic impact on the wider economy" of the report. The quote was not even issued in the name of the outspoken Chief Executive Angela Knight.  Ms Knight is rarely one to hold back in defending the banking industry. The BBA may well be holding their fire and reserving their arguments for behind closed doors. Or it could be that they are extremely pleased the Commission has not gone further in calling for the break up of the sector.  

The loudest cries of foul came from Lloyds Banking Group who seemed to have been singled out in the report for the biggest criticisms.  The Chairman and new Chief Executive both expressed their ‘surprise’ at some of the recommendations aimed at the Group. No doubt stronger words were used in the Boardroom as the report was digested!

It is always better to influence policy at an early stage of development. So Lloyds might well be questioning if they built a strong enough case in their favour and did they present this evidence to the Commission (and outside it) in the best way. Perhaps, alternatively, the Commission simply needed to provide some meat for their political masters to feast upon. The Group will no doubt be considering these issues ahead of the Commission’s final report in September.

Tony Cox, Linstock Consultant

The £9 billion question: How to care for the UK’s minority ethnic elderly?

The UK is getting older. More of us are living into our seventies and eighties and this trend is projected to continue throughout the twenty-first century.  One consequence will be a substantial increase in the market for long term care.  But are care homes ready for the opportunities of the future?  In one important respect a wake up call is needed.  The UK’s population is not just getting older; it’s also becoming increasingly ethnically diverse. But the reputation of care homes among ethnic minorities is so poor that a market worth £9 billion by 2051 could go begging. 

A study by Linstock Communications and research partner Stimulating World reveals that UK care homes need to improve their understanding of, and reputation amongst, Britain’s minority ethnic communities. We staged focus groups with people of Bangladeshi, Pakistani, Indian (Hindu) and Black Caribbean ethnicity, who were all considering long term care options for elderly relatives.

We found that in many respects a community’s attitudes to care in old age can be determined by the length of time they have spent in the UK. So people in the Caribbean community, for example, are more open to the idea of paid for care and want to take control of personalised care budgets, whereas more recent arrivals, such as some from the Bangladeshi community, are more reticent and have less desire to control their own finances for care. We also uncovered a stigma amongst communities of South Asian ethnicity (Indian, Pakistani and Bangladeshi), where putting older members of the family into care is seen as a dereliction of duty.

Furthermore, across the board the minority ethnic communities we spoke to believe that care homes won’t cater to their specific cultural, dietary or religious needs. Some fear that regular prayer won’t be possible or that care staff won’t speak the same language as the people in their care.

The truth is that there is good practice out there. Some care homes are specifically targeting this market and others have good practices in place to support people from minority communities, but their measures are not well understood. The UK care industry clearly needs to understand and tackle some widely held opinions if it wants to serve an increasingly diverse community. Care homes need to stop being a last resort and start presenting themselves as a positive choice.

To see the full research summary by Linstock and Stimulating World please click here.

Tom Yazdi, Linstock Consultant (tom@linstockcommunications.com)

http://www.linstockcommunications.com

What now for Special Educational Needs?

This month should see the publication of the Government’s green paper on Special Educational Needs (SEN). The development of the long awaited paper has been anything but straightforward. Announced by the Government as far back as last July, it has subsequently been frequently delayed. Yesterday’s publication of the Wolf Report, and Michael Gove’s subsequent glowing praise for its findings, suggests this is a Government keen to exercise greater control over the educational and career paths of lower achieving students. But how does this apply to those with SEN, given the Report only mentions these people in passing. More specifically, what are the Government’s plans for the education and employment of SEN students with complex disabilities?

The green paper will need to cover these questions and others, but the concern for Government is that whatever is proposed, significant communications challenges will present themselves. Special educational needs is an emotive topic. This is amplified when narrowed down to discussions on those with multiple and complex disabilities. For a Government struggling to address criticism over its programme of spending cuts, SEN is a real minefield. Cuts to the Education Maintenance Allowance and the possible reform of the Disability Living Allowance, have led to accusations that the Government is unwilling to protect society’s most vulnerable while belts are being tightened. Another delay to the green paper may be seen as a snub too far and risks sending a message to parents that their children are an afterthought on the political agenda. Given Cameron’s very public statements of commitment on SEN, including pledging to remove the perceived ‘inclusion bias’ within the system, this could be especially damaging. Equally, if proposals are perceived as too hard on those with the most complex learning difficulties, there is a danger the Government will be portrayed as callous. Given the lengths the Conservatives in particular have gone to ‘detoxify’ their image, the green paper therefore presents a substantial challenge.

This is clearly a Government with a number of pressing issues, but there are increasing murmurs that it has bitten off more than it can chew with its legislative programme. Last week’s announcement that the Higher Education White Paper would be delayed demonstrates the difficulty the Government is having juggling a collection of contentious issues. Time isn’t the only factor here of course. Delays also point to the inherent difficulties associated with developing legislation as part of a Coalition, even when all parties appear to be singing from the same sheet.

For those working within the realm of SEN, the green paper cannot come soon enough. Department for Education statistics show last year nearly 1.5 million students with SEN were yet to receive statements outlining the support they would receive. This of course doesn’t include the numerous tribunal cases involving parents unhappy with their child’s statement. The system, if not at breaking point, is being severely bent. Details of exactly what will be in the green paper remain, unhelpfully, shady. Proposals such as the introduction of personal budgets have proved hard to reach a consensus on, not least among parent representative groups. Whether or not the green paper includes more ambitious arrangements regarding SEN employability remains unclear. What is certain is that SEN services need clarity of purpose and direction. The Government will need to ensure its messaging offers similar clarity when the paper is finally revealed.

John Hood, Linstock Consultant (john@linstockcommunications.com)

http://www.linstockcommunications.com/

Davos – more than just an economics conference?

Earlier this year 2,000 of the world’s richest and most powerful people descended on Davos for the 41st annual meeting of the World Economic Forum. More than twelve hundred senior executives from 69 countries rubbed shoulders with leading politicians including David Cameron, Angela Merkel and Nicolas Sarkozy, as well as Bill and Melinda Gates, Google co-founder Larry Page, steel magnate Lakshmi Mittal and even the odd celebrity. But despite the high profile attendees, you could be forgiven for asking just what the point of Davos is.

The media coverage of Davos starts weeks before the conference begins, as companies and spokespeople talk about what they expect to see on the Davos agenda and potential outcomes of the event. The conference is probably the biggest platform in the world for commentary on global trends and development of new ideas, and the discussions start early. Indeed, this advance coverage is arguably more insightful and effective than anything that comes out of the conference itself: for all the hype, Davos produces very little in concrete terms. Despite the most powerful politicians and business leaders in the world gathering together, there are almost never any major policy decisions or product launches made at the conference itself.

However, that is not to say that the conference is not a worthwhile endeavour or an important meeting on the global calendar. One of the most important aspects of Davos is the networking opportunities it affords, and one can only guess at the number of business deals governments and companies agree in the mountain air. But the event also provides a unique opportunity for smaller organisations to draw attention to important issues. By lobbying key figures who will be attending and offering journalists insightful and timely commentary on global topics, firms can ensure that the world’s leaders are aware of and discussing the subjects that are important to them.

Davos also provides an opportunity for organisations to be creative in approaching key influencers in their fields. Hosting parties, running workshops or organising unusual events can provide otherwise almost impossible access to the world’s most powerful people. For instance, for the past few years Crossroads Global Village, which works to support welfare organisations around the world, has partnered with UNHCR, the United Nations’ refugee agency, and Global Risk Forum to host Refugee Run. Through this simulation event, world leaders such as Virgin boss Sir Richard Branson, Wikipedia founder Jimmy Wales and UN Secretary General Ban Ki Moon have experienced life as a refugee.

Likewise, Davos can provide a unique platform for leaders to change the world for the better. For instance, former Turkish Prime Minister Turgut Ozal claims that his country did not go to war with Greece when tensions between the two countries escalated in 1987 because he had met his Greek counterpart Andreas Papandreou at Davos the year before and knew he could trust him. More recently, rock star Bono and billionaire couple Bill and Melinda Gates used this year’s meeting to secure millions of pounds of investment for polio vaccinations.

Critics still argue that despite all the publicity and media coverage, Davos achieves very little in terms of solving the world’s problems. But as BBC Business Editor Tim Weber points out “that’s not what it’s been designed for. The event is a talking shop, a networking event – but one that can set the agenda, generate new ideas, build bridges.” By having the kinds of discussions that are possible at Davos, global leaders can be inspired to act differently and maybe, just maybe, transform the world in the process.

Jo Nussbaum, Linstock Consultant (jo@linstockcommunications.com)

http://www.linstockcommunications.com/