Crisis? What crisis?

Published on August 25, 2015

I realise that August is the silly season but this year the silliness seems sillier than usual, and more affecting of others.

Firstly there is the small matter of Australian batting: It seems that they are not well versed in Einstein’s definition of insanity (to repeat the same action expecting a different result) and their batting was simply silly, and of great impact upon the sporting morale of England, as well as spawning some new jokes (what do you call an Australian who’s good with a bat? A vet.)

Secondly we have had the return of tube strikes. They seem silly to me because nothing is actually achieved by stopping work, apart from a day’s unpaid leave (giving the strikers a chance to take the children to visit the Tower of London, if only they knew how to get there); and very few people are seriously inconvenienced: I went to Sadlers Wells that night and the house was full.

Finally, there is the demise of the Kid’s Company. I haven’t investigated their finances (nor, it seems did the management or trustees) but I heard Camilla Batmanghelidjh being interviewed. I wonder if you heard her, and if so whether your assessment is similar to mine?

It’s all very well to have a vison and be passionate about the work you’re doing. In fact it’s pretty much a pre-requisite for any leader, and isn’t the exclusive domain of a few charity leaders. But in order to turn that vision into reality requires leadership, and its corollary followership, in which everyone listens carefully, maybe sometimes empathically, to others in the team. So to flatly deny there was a problem with the financial management of the organisation flies in the face of the fact that there was NO MONEY and reminds me of the one about the person who doesn’t have a drink problem – “I drink, I get drunk, I fall over. No problem”.

I think that financial management, in fact all management, relies not just on understanding what HAS happened, but also what IS LIKELY to happen, based on the facts, the views of people qualified to give those views, and some intuition. And those people who don’t do this are…silly.

But I don’t want to be seen as someone who criticises without having a solution to the problem. So if you know of someone who hasn’t got any forecasts of their financial position going forward perhaps you’d like to share our tool with them? The Corporate Cashflow Calculator can produce forecasts of profit and cash, by month, based on 20 assumptions for each year, of volumes, prices costs and timings. So anyone can see if they may have a crisis and so be in a position to avoid it. Unless they’re being silly.