Monthly Archives: August 2020

Why Stakeholder Engagement Matters

(Source: getstencil)

When embarking on an initiative or project of any kind, it’s a given that you’ll need the following to succeed:

Clear goals, boundaries which define the scope, a budget, timescales, a plan to get all the relevant tasks completed by those timescales, and when it’s over, the overall satisfaction of your customer or end user.

However one crucial element is often missed: Stakeholder Engagement and Management.

Who Is a Stakeholder?

The Oxford English Dictionary defines a stakeholder as: “A person with an interest or concern in something.”

I’d go further to say that, in addition to having an interest or concern in the outcome, a stakeholder is someone who needs to be involved in the initiative or project, as they will be materially affected when it is completed and the results become apparent.

It follows that if someone – or a group of people – will be affected by the outcome of an initiative, they should be engaged with, consulted and kept informed throughout.

I understand that doing this takes time and can be a test of patience. But engaging with stakeholders is a crucial part of good implementation, and failing to do so just because it can be a painful part of the process can lead to end results which are sub-optimal and unsatisfactory.

Here are two real-life examples demonstrating the point.

The A-Level Grade Debacle of 2020

(Source: schoolsweek.co.uk)

Due to the pandemic and school closures, A-level students were unable to sit their exams in May. Not having actual results, about 1 million of them had grades estimated by their teachers.

However, the final grades were “moderated” by the watchdog Ofqual’s standardisation algorithm. This, the government says, was necessary to guard against teachers who may have been too generous in their assessments of how their students would have performed.

But in reality? About 40% of students who were expecting A-level results were awarded lower grades than predicted. Not just that, the majority of those downgrades were in schools and areas the algorithm deemed incapable of performing above a certain level. So children from poorer backgrounds, areas and schools have been disproportionately affected.*

Universities make offers based on predicted grades, and with the widespread downgrades many of those offers have been withdrawn.

Which is tragic, considering university admission is one of the main routes out of poverty for young people from disadvantaged backgrounds.

It is clear that the Department of Education and the watchdog did not engage with their stakeholders. I see these being teachers and universities in the first instance, followed by parents and students.

Might doing so ahead of time have avoided this debacle and its effects on a generation of young people?

I think so.

*Following significant opposition from students, parents, headteachers, universities and Members of Parliament, the Education Secretary has now scrapped the standardisation model and reverted to teacher-assessed grades.

This U-turn occurred four days after the results were released.

Increase In Fines For Mask Dodgers

(Source: wimbledonsw19.com)

Here’s a second example of a scenario where stakeholder engagement would have made a big difference to the outcome.

Late last week, the Prime Minister announced an increase in the fine amount for people who fail to wear masks in shops and on public transport.

Wearing masks has been made compulsory in these locations to help reduce the spread of coronavirus, and the fine raised from £100 to a whopping £3,200 to improve compliance and deter so-called mask dodgers.

The problem? The police weren’t informed of the change beforehand.

If the police, who are critical to enforcing the fine were kept in the dark, how does the government hope to enforce this?

Both examples demonstrate that engaging and communicating with stakeholders is a core requirement of delivering change well and in my view:

  • Stakeholder engagement must start as early as possible in the change process.
  • Stakeholders should be consulted and informed.
  • Input should be sought from stakeholders and that input incorporated into the process, as necessary.
  • Communication should be often and regular.

4 Reasons Why Stakeholder Engagement Matters

The Association for Project Management defines stakeholder engagement as:

“The practice of interacting with, and influencing project stakeholders to the overall benefit of the project and its advocates.”

This highlights 3 essential elements for me:

  • Stakeholders must be interacted with.
  • Following on from those interactions, you will need to influence them to get their buy-in.
  • Their input and participation must benefit the project and its advocates.

Bearing these 3 elements in mind, here are 4 reasons why stakeholder engagement matters:

1. Stakeholders Have Expert Knowledge:

If you’ve identified the right group stakeholders, it will include people who are Subject Matter Experts (SMEs) in their respective areas.

They will have knowledge and expertise crucial to the development and implementation of your project, neither of which you can afford to ignore.

Their knowledge which will be of immense value and benefit as you and your Project Team work through your tasks and milestones for a successful delivery.

2. Stakeholders Represent the End User:

Stakeholders have a better and clearer perspective of what the end user wants and needs.

Engaging with them early on and throughout the process will ensure that essentials such as the user experience and requirements, and the customer journey are given the attention needed to deliver the right outcomes.

3. They Bring Diverse Perspectives & Opinions:

I know what you’re thinking: “Is this a good thing?”

I can assure you it is.

While it can be time-consuming to seek out, review and assess perspectives and opinions from several different sources, the alternative is costlier in the long run.

And not to mention, missing out on the information and perspectives stakeholders provide will be detrimental to a successful implementation.

4. Your Project’s Success Depends On Their Satisfaction:

I’ve seen expensive IT implementations become white elephants because stakeholders weren’t satisfied, and they ended up with something they neither wanted nor needed.

Here’s what tends to happen in the run-up to those situations: Boss A will have heard of a particular system. It will be one of two things: either a competing business uses it, or s/he knows someone who works in the company that develops the system.

It could even be both.

Said boss decides s/he wants the system implemented – before a business case is made for it and stakeholders consulted. The boss is invested in terms of his / her ego and emotions and orders their team to implement it as soon as possible.

Even if the project is delivered to a high standard such a system might only be used a handful of times, if at all. The system would be functional but without the buy-in and approval of stakeholders, becomes redundant almost as soon as it goes into production.

Sadly, this scenario is more common than you might think. But entirely avoidable.

Stakeholder engagement can be tricky. It takes time, and requires skill to manage different perspectives and agendas. But trying to deliver meaningful change without it will cost you more in the long run.

And if your projects and implementations have been missing this crucial element and you’d like someone who is skilled at managing stakeholders at all levels while delivering the outcomes you’ve specified?

Get in touch; I’d love to help.

  • August 17, 2020

Why The Proposed Online Sales Tax Is a Bad Idea

(Source: getstencil)

In many ways, it was inevitable.

Since the start of the pandemic, the government has announced financial support in excess of £300 billion to shore up individuals and business of all sizes.

The state had to intervene in unprecedented ways, from paying 80% of workers’ salaries through the furlough scheme to giving lifelines and loans to entire sectors.

But those significant levels of intervention have come at a cost.

The £300 billion wasn’t exactly sitting in a savings account; the Chancellor had to fund his announcements through borrowing. Fortunately interest rates on borrowing are at a historic low of 0.1%, but it means there is still a £300 billion-shaped hole in the public purse which must be repaid.

There have been hints and rumours about how the colossal expenditure of 2020 will be paid for. Will the Chancellor raise income tax? Is a return to austerity on the cards? Or, will corporation tax be increased?

Call me cynical, but my view is that many of these rumours emanate from the very heart of government itself, so they can get a read of how popular a policy might be if or when it’s announced.

But I digress. So far it’s clear that after a decade of George Osborne’s austerity, the electorate will not tolerate further cuts in public spending. Nor will income tax rises win this Conservative government votes at the next election. It might be four whole years away, but it’s always on the radar for politicians!

An increase in business rates might be the nail in the coffin for many businesses. Especially for a retail sector already on its knees before the pandemic which is now haemorrhaging money and employees with each passing day. So there is very little leeway to raise funds there.

What Has The Government Decided To Do?

(Source: abstractrecruitment.co.uk)

The government is proposing an online sales tax.

For more background information on what it is check out my last blog post; essentially it will be a levy of 2% on all purchases made online, and also a tax on deliveries of items bought online.

What Was The Rationale Behind It?

(Source: Business Live)

The government clearly needs to find alternative sources of revenue. Fast!

Since retail is in dire straits and will take a long time to recover – if at all – there are high hopes that this new tax will raise something in the region of £2 billion each year. According to the government, this could potentially fund a cut in business rates to give the sector a much-needed reprieve.

However, I doubt such a cut will actually be implemented. And that lack of transparency is my first issue with this tax…

…why position it as support for retail, when there is a black hole in public finances to fill?

That aside, it seems like a good idea at first glance: online sales were booming even before the pandemic and have gone stratospheric since March. It makes sense to raise funds from one of the few areas of the economy that is performing well and forecast to grow even more for the foreseeable future.

Or, does it?

Why I’m Against the Online Sales Tax

I’ll lay my cards on the table: I’m not in favour of the proposed online sales tax.

I think it’s a bad idea, and here’s why:

1. Impact on SMEs:

According to the government’s own figures, small and medium-sized enterprises (SMEs) account for three-fifths of the employment and around half of the turnover in the private sector. So, total employment in SMEs was 16.6 million (or 60% of the total) and turnover was £2.2 trillion (or 52% of the total).

However, these figures are due to be updated and do not take into account the effect of the pandemic. When that update is published, I suspect both figures will see a significant reduction.

These businesses have already borne (and in many cases, are still suffering from) the effects of the coronavirus pandemic and subsequent lockdown, and introducing a new tax as they seek to emerge from the doldrums could have a damaging and lasting effect, which is the opposite of what’s needed.

2. Who Really Picks Up The Bill?:

You’ve guessed it: these taxes will be passed on to consumers.

So, you and me.

That’s already happened with the digital services tax which came into effect in April: there are reports that companies such as Amazon have passed that tax onto its sellers, most of whom are small business owners who cannot afford to absorb it. Which raises the chances that the new digital services tax will be passed on to customers.

What’s to stop companies – especially multinationals who the government seems unable to hold accountable – from passing this new tax on to customers too?

Customers have already been battered and bruised by the pandemic. Official figures are yet to catch up and reflect current events, but estimates are that more than 600,000 people have lost their jobs. The last thing they need is a heavier tax burden!

And those who are lucky enough to still have an income and can afford to spend should be incentivised to do so, not penalised.

3. Timing:

To all intents and purposes, we are still in the middle of a pandemic.

Not many individuals and businesses have escaped unscathed. Its effects are still unravelling, and my sense is that this is not a good time to announce new taxes or tax rises. Especially as so many businesses are falling into administration, and job losses mounting by the day.

I accept that the government needs to plan ahead. But I would suggest that a new tax on the few successful areas now will inhibit and penalise, rather than encourage, economic recovery.

What Alternatives Would I Suggest?

I’m neither naïve nor an anarchist; and we do need to raise money for crucial public services to ensure education, universal healthcare and social welfare are always available for people as and when required.

But there are better, more efficient ways to fund them. I’m not an economist, and none of my suggestions have been costed. But here are some of the initiatives and actions I would suggest instead of a new online sales tax:

1. Focus On The Online Digital Services Tax:

This was introduced in April 2020. It applies to search engines, social media platforms and online marketplaces with global revenue of more than £500 million and UK revenue of more than £25 million.

It is specifically targeted at companies like Amazon, Facebook and Google which have historically paid very little tax due to accounting practices which mean sales are processed through countries with low corporation tax policies such as Ireland and Luxembourg.

The aim was to achieve global consensus on a digital tax but with little progress made, former Chancellor Philip Hammond announced the UK’s plan for a digital services tax in his October 2018 budget.

The amount it is forecast to raise each year varies depending on which publication you read; it could be anything between £275 million and £500 million.

And while there are obvious teething problems with it – see the paragraph above about who actually foots the bill for this – I would suggest that it makes sense to ask businesses with millions of users in the UK who generate huge profits for them to do more by paying this tax.

The government could focus on refining it to curb practices such Amazon’s, and create more of a level playing field.

2. Revise The Debt Repayment Schedule:

I don’t know what the Chancellor’s plan is for plugging the hole in our public finances, or how soon he hopes to get it done.

But if it’s in the next year or two? I would suggest extending that out, with a repayment plan that is less aggressive.

We all know we need the medicine, and that all the support provided was not free.

Nothing ever is!

But the medicine risks killing the patient, if prescribed in large doses.

Plugging the hole quickly may look good on paper. But is it the right move, considering the severe blows dealt by the pandemic and lockdown?

And will it do more harm than good?

3. Wholesale Review of Retail Sector and Business Rates System:

The government claims this new tax will potentially mean business rates can be cut.

As I’ve said, I’m doubtful that will happen.

But putting my cynicism aside, the truth is that retail has been on its knees for a long time.

A comprehensive review of the sector is urgently needed, and there have long been calls for an overhaul of the business rates system. A temporary rate reduction will not address the underlying issues and general view that it is no longer fit for purpose.

The system needs to be revisited and replaced with something that works for businesses and communities in the twenty-first century.

4. Fix The Leaks!:

It may surprise you to hear this, but many large companies get away with paying a fraction of the tax they should.

I’ve explained how internet giants have eluded paying the correct amount of corporation tax for so long, which brought about the digital services tax.

They are not the only ones; stories like this give the impression that once a company can afford expensive tax lawyers to handle their negotiations with HMRC, they can pay what they like instead of what they are actually liable for.

Unfortunately it sometimes appears to be one rule for one group, and another for the rest. As a small business owner, I certainly wouldn’t get away with trying to knock down how much corporation tax I pay…

…and I’m sure this is not an isolated example. It would be interesting to know how much has been “saved” by large companies in this way, and how that compares to the £2 billion the Chancellor hopes to raise with this new tax.

My suggestion? The government should ensure the rules are applied equally across the board. I know the government makes concessions and offers incentives to encourage businesses to invest, but after the initial one-offs there shouldn’t be further room to manoeuvre.

5. Stop The Waste:

Stories of wasted public funds abound, and I wonder if such practices would fly in a private organisation…

…there are too many to count, but I’ll give you a recent example. £15 billion was spent just in the last few months on the beleaguered test and trace system and personal protective equipment (PPE).

That sum alone covers this proposed tax for seven and a half years, and there are calls for a public inquiry to investigate how this was allowed to happen.

But that’s not all.

As I write, the test and trace system is still not fully operational. Experts say it is crucial when planning for the start of the academic year in September, and is also required if the rest of us are to return to some semblance of normality.

Yet, all that money has been spent and the world’s fifth largest economy does not have an effective tracking system to help combat the virus.

And the PPE? The whole batch was faulty and has now been condemned, as it did not meet basic standards set out by Public Health England.

It’s hard not to think that taxpayers are seen as an endless source of funds which can be frittered away at will.

The country is straining under the weight of the pandemic and besides, the business case has not been made for a new tax.

The Chancellor should put the brakes on.

How The Proposed Online Sales Tax Could Affect You

(Source: getstencil)

Following the series of financial packages announced by the UK government to support individuals and businesses through the coronavirus pandemic, one question has been on everyone’s mind:

How are we going to pay for it?

There had been hints and leaks that tax rises and austerity measures would be used to plug the £300 billion hole in public finances, which were subsequently denied. But the first official step has been taken by the government, with the Treasury consulting with industry on the best way to “provide a sustainable and meaningful revenue source for the government.”

Here is a summary of the proposed online sales tax, and how it could affect you if it is implemented.

What Is the Proposed Online Sales Tax?

There are actually two taxes being considered in relation to online sales.

The first is a two per cent tax on anything sold online. Early forecasts from the Treasury estimate that this will bring in an estimated amount of £2 billion each year.

However, note that this online sales tax is not the same as the digital services tax designed specifically for the likes of Facebook, Google and other international internet-based businesses which operate and have users in the UK.

Deliveries have increased significantly since the start of the pandemic, and the second proposal is to implement a tax on deliveries.

Why Were These Taxes Proposed?

(Source: getstencil)

The government believes that online retailers benefit disproportionately from the current tax system, while businesses with a physical High Street presence bear several financial burdens such as rents and business rates.

As the High Street has been in dire straits for a long time and is under even more pressure as a result of the pandemic, the thinking is that the £2 billion raised each year can be used to fund reductions in business rates for retail properties.

On the other hand, the delivery tax has been positioned as targeting traffic and congestion on the roads, with a view to achieving a reduction in toxic emissions and pollution.

When Will a Decision Be Made?

The government will make a decision on these proposals in the Spring of 2021.

And if you really want to know what I think about this proposed online sales tax? Have a look at my next post here.