Last Wednesday evening was a bad time for two different groups of Londoners. At five o’clock the doors of several walk-in centres run by a high profile children’s charity called Kid’s Company closed for the last time, and thousands of children who depended on the charity for both physical and educational support were stranded. There had been suspicions about the financial affairs of this charity for some time – allegations that it was not well managed and that it was not in control of its finances. Central government was a major contributor and when the media picked up stories of financial irregularities they and other generous donors began to think twice about their funding. The final nail in the coffin came when allegations of sexual abuse of children on Kids Company premises were made; the privately donated money dried up completely, and because the charity had virtually no reserves it had to close. It is unlikely to re-open, at least in its present form.
Just one hour later the iconic concertina gates at the entrance of many London tube stations were pulled closed because of a 24 hour strike called by the unions which serve the employees who work on the London Underground. Millions of commuters and tourists were inconvenienced. Buses were overcrowded, traffic on the roads was gridlocked, Uber implemented a ‘dynamic pricing’ plan which meant that taxi fares went sky high, and many office workers were stranded and had to walk miles to get home from work. The dispute between Transport for London (TfL) and the unions is about change. At present all tube services stop shortly after midnight each night, and recommence at about 05.00. TfL intend to change to an all-night service on several tube lines each weekend from the middle of September. This plan is supported by the public, who will get a better transport service, and by many businesses in London which will benefit as a result. But the unions claim that the new work rosters will be ‘hellish’. TfL deny this. More strikes are planned at the end of August.
What links these two disasters? One word – strategy. Or perhaps better, three words – absence of strategy.
Kid’s Company could never accumulate an effective financial reserve because they tried to satisfy everyone who walked in for help. As a result they always operated from hand to mouth; as soon as money came in they spent it. Their colourful and charismatic leader Camila Batmanghelidjh blamed government and local authorities for failing to provide for many of the children who turned to her charity for help and overwhelmed the charity with their needs. But in many respects a charity is no different from a commercial business – the level of activity has to be limited to that which can be sustained by available working capital, or the organisation will collapse. We may have sympathy for their well-meaning attitude, but because the charity leaders and trustees had no strategic plan and their behaviour was dictated by a tactical reaction to the needs of their clients, ultimately the charity was doomed to fail and disappoint all of its clients.
The tube strikers similarly seem to be thinking like headless chickens. Mick Cash, leader of the RMT which is one of the three unions involved, said last week “The offer tabled by London Underground …… does nothing to tackle the fundamental issue of our members being called into work at the beck and call of management, to plug staffing gaps in the mayor’s botched night tube plans. This dispute is not about money, it’s about being able to plan for, and enjoy, some downtime with friends and family away from work.” The union ‘strategy’ is to see every modernisation attempt as an opportunity to negotiate concessions. But that isn’t a strategy, it is recurring short term opportunism. His words reminded me of similar statements made by union conveners calling a strike at the Goodyear tyre manufacturing plant in Garscadden in Scotland in 1979, when the management proposed adding a night shift to the work roster. The union got its way – no night shift was introduced. Instead, because it was unviable without 24 hour working, the factory permanently closed later that year. So the union achieved their short term objective but they failed to see the longer picture. Of course it is not the London tube will not permanently close its gates, but in my opinion the unions’ failure to deal strategically with change will sound their death knell.
About the author:
My background is sales and marketing. I read Law at University and worked for 2 major packaging companies for 13 years in sales and sales management. I joined John McMillan and Scotwork in 1984. For the next 25 years together with our colleagues we delivered training and consulting, built the global business and developed the Scotwork product portfolio.