Andrew Kakabadse and Nada Kakabadse’s Blog

The article in the Financial Times titled ‘ Innovation is all about the customer ‘ is certainly true, but what must not be forgotten is that innovation is also all about governance.
We must remember that innovation has nothing to do with invention – most innovations are transactional, and a series of progressive steps to ensure better governance and working practices.
A fundamental block on British innovation is a governance issue: boards are delegating too much of the ‘follow-through’ or application of governance to management and in an age of austerity where cost control is king, innovation and Corporate Social Responsibility (CSR) get sidelined.
Good governance requires scrutinizing possible blockages to governance and execution all the way down the company structure, and from my experience, there seem to be three sticking points where governance, and therefore innovation and CSR, get blocked.
These sticking points [...]

The debate about the Eurozone crisis has moved onto issues of political accountability and responsibility.
We have the governments of two historically important countries – Greece and Italy – in the hands of technocrats rather elected politicians, and many, including Aditya Chakrabortty in the Guardian , are asking: is this right?
In many senses, it isn’t. No public mandate exists for technocrats to lead a democratic, nation state.
But at this moment of crisis, the operating principle is ‘needs must’, and the real question is whether or not sufficient expertise can be brought together to allow the European project to do its job in investing in, and providing for, its citizens.
Technocratic skills are vital if Europe is to be able to effectively target and move money to address [...]

Currently, there is a real shortage of public capital, but at the same time there is a lot of private capital currently sitting on the sidelines waiting for the right moment to recreate the 2002-08 economic situation before the crisis.
What the country really needs is to unlock this capital against long-term strategic investments. In order to make this happen, there is a need for an independent report on what the infrastructure concerns within the UK are, which would have to be a broad, systematic review of where we have deficiencies in our society. This would have to call upon the Office of National Statistics (ONS) to bring to the surface the levels of poverty, vulnerability and deprivation that we have in our society – particularly for the elderly and children.
The efforts of chancellor Osborne to persuade the private sector to invest is ‘too little, [...]

The recent announcement that the Bank of England considered £75bn of quantitative easing (Telegraph, 19 th October) raises the question of ‘what impact is £75bn going to have (a second round of quantitative easing) when so much has already been put into the nation?’. As I previously discussed, we face the problem of this money sitting static with the funds and banks rather than being invested on infrastructure projects which the nation so badly needs.
Is there now going to be Government pressure that will force the banks to distribute funds, particularly to small business, to revitalise the economy and increase employment? I suspect not! Will the government split retail banks from investment banks, so that the investment banks can take risk but without affecting everyone else and the retail banks provide the slow and steady platform that is needed? I don’t think this [...]

This article by Luke Johnson on the Financial Times website on why big businesses are bad for business, with the point made that the senior executives of these large organisations are very similar to public servants of large government departments, strikes a chord with me.
We are in a situation of assets being slowly controlled by fewer and fewer hands. More and more companies are interlinked through shared ownership structures, and are plagued with the bureaucracy of governance which is emerging more as protecting directors from prosecutions than actually following through on whether governance is really adding value.
Issues such as risk, vulnerability, bribery and corruption that occur outside the usual Anglo-American governance regimes is a major problem. All our studies indicate that 80 percent of business transactions outside European or American boundaries involve more than one bribe, or a substantial amount of bribery, [...]

The article on BBC News ‘Occupy London – Protest continues for a second day’ on the anti-capitalist protest in London’s financial district is interesting.
The first point which springs to mind reading this is the ‘anti-capitalist’ nature of the protest. Is it really anti-capitalist, or is it the restricted and centralised control of resources, that is the problem? If we really had capitalism in the sense of free and open markets, I doubt we would have such drastic downtimes, deep unemployment and a demotivated community as more capital would flow freely in the market.
It is unfortunate that the previous estimate I made regarding how much money is available in the city in close-to-liquid form of £450bn seems to be inaccurate, as the estimate currently is about £500bn and in Wall Street it is around $3.7trn of capital that is essentially not circulating. However, [...]

The way I first came across the Public Administration Select Committee (PASC) and its Chairman, Bernard Jenkins , was by accident. I was called to give evidence to the PASC on how to structure organisations and the relevance of leadership to government.  The evidence I gave ended up playing a far more prominent part than I expected. The PASC became highly aware that the design of policy is one thing but its implementation is where policy succeeds or fails. We began to examine what it means to structure government to deal with some of the concerns that we are currently facing in society.
It became clear to me whilst working with the PASC that up to the present Conservative Government, civil servants have had to display three core competencies. Two of these had been around for a long time. The first of these skills [...]

A recent article in Forbes asked if innovation was purely the domain of the young, saying
“youth seems to have advantages in innovation: everything is possible, knowledge is fresh, obligations are few and reputation is not at risk.”
Innovation can occur in products – we see this clearly in the field of mobile technology, for example – as well as in processes and services. Depending on the impact of innovation on environmental conditions, it can be classified as breakthrough innovation or  incremental innovation .
Any environment, business, culture or otherwise will be shaped by innovation that evolves through periods of incremental change, and will be punctuated by innovative breakthroughs that either enhance or destroy the existing competence of firms and the individuals that make them up.
Incremental innovation creates changes through cumulative processes until a major advance that creates discontinuity ruptures the beginning point altogether.
Through incremental [...]

An interesting article by Martin Wolf draws attention to that fact that Britain must escape its longest depression – a depression which has continued as long as, if not longer, than the depression of the 1920’s. The question is, how? There is without doubt a parallel with the 1920’s; when the banks stopped lending money to each other, we saw the collapse of the financial structure, which is fundamentally the issue now.
If we as a country are going to continue to invest in the short-term transaction instruments, then I think we will see another financial collapse within four to five years. However, if we changed our philosophy and started investing in long term infrastructure projects, socialising the capital that we have, then we would have a situation of full employment, far less poverty and an overall wealthy society. But is there any sign of [...]

Two interesting articles in the Guardian and the Independent address the issue of why people rioted in the month of August 2011. The Guardian article raises the concerns that David Cameron is trying to restrict access to Twitter and Facebook for individuals who have taken part in the August riots. The Independent article says that an explanation for the riots is that communities do not trust politicians.
Reading these articles, for me the greatest concern is that of restricting information, and entering into a world where for political reasons information is prevented from going to individuals who are seen to take politically unacceptable action. Under the Labour administration, which was a period of high employment and income in the city, a lot of money was put into health and education, but it seems that things have not really improved.
I have seen [...]