The way the government deals with the deficit in the UK public finances will have a direct impact on everyone and will determine the economic landscape that surviving businesses must deal with.
Looked at in this way, revitalising the UK becomes the biggest and most important turnaround that there has been for 60 years and, just like corporate managers, politicians and their advisors have little or no experience of dealing with this kind of situation. A crisis is a bad time to be at the bottom of the learning curve and it’s no surprise that some managers, when confronted by a potentially critical situation, cannot settle on a decision on how to act. Often they prevaricate and do too little too late. Politicians have the same psychology but their action or inaction affects all of us. For that reason, indecision or delay is unacceptable. Turning around the public finances is the biggest game in town and the success of everything that corporate Britain does in the next 12 months depends on how this game unfolds. The challenge is large but it is complicated by the forthcoming general election. Uncertainty about the result means that, effectively, we are leaderless at a crucial moment when we need leadership.
Right now, there is nothing to be gained from a protracted general election campaign and much to lose from a period of uncertainty. The rational approach would be to hold an election immediately or wait until May 2011. But that isn’t going to happen. Are our politicians allowing their own desire to gain or retain power to impede the prosecution of economic policy” I think they are. Would shareholders tolerate this in the management of their company” I think not. No politician or party seeking office is going threaten the electorate with a cocktail of increased personal taxation, VAT and reduced public services. But anything less will not constitute a turnaround plan that recognises the action necessary to resolve the deficit problem. The characteristics they need to exhibit are precisely those we hope to see and hear in the context of a corporate turnaround – a conspicuous, guiding mind who offers a new body of ideas and a clear set of objectives, which offer understandable benefits to all those involved. What is counter productive in every turnaround is a squabble in which criticism of the “previous management’s” conduct is offered as the principal validation of the opposition’s claim to govern. Analysing past failures is no basis for future plans.
Anthony Holmes is an international corporate turnaround specialist and transitional leadership expert and author of Managing Through Turbulent Times.