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Blair McPherson: How to handle a leader with a business background

Blair McPherson
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Recently it has become increasingly common for council leaders to have a business background.

Many believe, in a period of austerity, that councils need people who know how to maximise efficiency. But running a council like a business can bring a leader into conflict with their chief executive.

The first thing someone with business experience comments on when entering local government is the number of managers. Then there is the horror at the levels of absenteeism typically found in local government. Finally there is the suspicion that committees are talking shops to which officers provide ideologically driven reports, when what is required by the board/cabinet is a ‘business case’.

New leaders might see cutting management posts as a win-win. It improves efficiency without cutting services but the chief executive will have reservations. Councils have lots of managers because they have a very diverse range of services. Cutting posts means remaining managers will have broader responsibilities over services of which they have no expert knowledge. Attempting to cut management posts by offering early retirement to staff may mean the wrong people leave, creating a knowledge gap.

Absenteeism rates are way too high but areas like social services and housing, where there is a lot of contact with people in crisis, have a greater toll on staff than the average office job.

The idea that officers should present the cabinet with a business case for action rather than proposals based on political ideology is music to the average chief executive’s ears. What makes sound financial sense, however, may be highly emotive, so compromises must be made.

For example, a strong business case could be made for closing all a council’s care homes and using the savings to buy cheaper care in the private sector, but the council might only agree to close half the homes, which would not generate a saving because the savings would need to be spent on bringing the remaining homes up to standard. The chief executive might make a business case for investing in preventative services, funded by a 2% social care cut. The cabinet would take the additional cuts but they might use it to postpone unpopular cuts elsewhere.

In business, if a board agrees a strategy it will be implemented, but in local government, elected members might agree a strategy but campaign publically against it on the grounds that they are representing the views of their constituents. This happens with library closures.

A new leader with a business background can understandably become frustrated. A chief executive has to adopt a business-like approach, whilst not leaving themselves and their senior managers exposed. Regardless of how the leader and chief executive feel about each other, as far as staff and the outside world are concerned, they must always appear in total agreement.

Blair McPherson, former local authority director and author 

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