First Post: including today’s dumb question

Toronto, Ontario, Canada has a new mayor seeking cost savings. When Toronto was amalgamated, there was a famous “Golden Report” promising savings from that amalgamation. Has anyone looked at that? How well do we predict savings, and are we good at reaping them?

8 thoughts on “First Post: including today’s dumb question

    • The answer is tedious. On a project of significant cost and prospective value, a Project Benefits Officer (PBO) is needed. Call this position whatever you like, but make sure it is someone’s responsibilty. The PBO must have high credibility with the business area, the implementation team, and top management. The individual, perhaps with a team, reviews the project justification paperwork and gets the project implementation team to agree on the benefits. Thereafter every project step is overseen by the PBO: requirements, to make sure the benefits are included; change control, to make sure benefits don’t get lost, and that any lost benefits are communicated to top management and the client business area. This continues through detail design, test plan design, implementation, and conversion. At every major signoff point the PBO states how the benefits are coming. To top management and to the business area.
      When the project is delivered, the PBO publicly “reaps the benefits” as part of the launch publicity. This is followed up a decent interval later by measuring to make sure those benefits really were there.
      None of this is new nor original with me. It could be in Townsend’s Up The Organization.
      What is tedious is trying to explain this to a politician. I tried at least once, with a politician I more or less like who actually gave me some of his time and insights into local matters.
      However, he could not bring himself to discuss or think about the “PBO” concept.
      I was reminded of a large, expensive, horribly overrun project, which I was unlucky enough to be associated with, although I was not directly on the project team and was somewhat “kept in the dark” for the early project meetings (which were in Paris, France, and not attended by me). One of the staff of the company with the winning proposal said shortly after they were informed of their win, when a question about function was asked, and I quote from memory: “You’re confusing sell with install.”
      In other words, what was said during the RFP/Proposal phase was not to be seen as set in stone, once agreements were signed. While this could be reasonable if unforeseen difficulties arise, there was no mechanism to update project expectations to the new reality.
      This was one of those rare moments in my business life when my cynicism level was actually raised. {8;^>}
      The point is, no follow up mechanism means the implementers know they won’t be measured on the benefits delivered. They’ll move on to the next project or task or election or whatever.

  1. Another problem is the relatively short time-line for government. I worked at a major bank where the senior executive was not changed for almost 2 decades. Visions were created and achieved. At a major competitor the executive changed several times in that same time period. Each new CEO “made his mark” by cancelling the vision and projects of his predecessor and starting anew. Sometimes the old vision is wrong. Other times it was just “different”. In the end almost nothing was achieved and much time, money and opportunity was wasted. The “stable bank” is now the largest and the other is the “weak sister” of Canadian banking.

    Rob Ford is a problem in terms of the previous comment but in many other ways as well. The Mayor was elected by a frustrated electorate who believed an over-simplified slogan of “stop the gravy train”. There is doubtless waste in the Toronto government but Mayor Ford has yet to find enough to warrant his campaign promises. Now he is looking to impose cuts to services like libraries and other “way of life” services that Torontonians are sure to miss. In the face of a potential $700+million deficit his first act was to freeze taxes. This was the same action as Mel Lastman a decade ago and similar to George W. Bush. In the face of inflation in labour and other costs the only option is reduced expenditures or increased revenues (or a combination of them). The public transit problems of Toronto are imposing but light rail was affordable (as opposed to an unfunded dream of a subway with private sector funding). What does private sector involvement in a subway mean? Is this going to be like the 407 with separate fares for those who choose to ride the subway? I (like almost anyone) do not like to pay taxes but my main concern is “value for money”. There are many services that are best delivered by the public service. Mike Harris “balanced” his budget by selling the 407. How has that worked out for the public??? You can sell an asset ONCE to pay down a debt. You can’t sell assets to fund an ongoing deficit.

    Ford could be seen as a buffoon and a bully but he was the electorate’s choice and we have another 3 years to endure. Mike Harris, George Bush, Rob Ford, the US Government–can democracy work?

    • I agree with you on several points. Selling a profit-making asset is a dumb way to “balance” a budget. Exception: if you use the cash to buy a more profitable asset. We don’t generally sell for this reason.
      I watched the dismantling of our transit plans in Toronto with dismay.
      In the US, taxes should go up but are unlikely to do so. In Toronto, surveys show we’d rather pay a tax increase than lose certain services. However if you are governed by what appears to be a mayor of narrow and unchangeable vision, you are in for a services crunch, creating more unemployment overloading those reduced services. Even libraries are used by those seeking jobs, eh?
      As for your final question, my considered answer is, at best, not very well.
      I ticked off a meeting of us old guard types when one quoted Churchill, that democracy is the worst form of government, except for all the other ones. I asked this (Libertarian) friend to name a democracy. He said, US, Canada. I said, balderdash. The elections of George W Bush were somewhat suspect: a key decision in Florida was made by judges with the deciding vote one appointed by Jeb Bush, as I recall. The second election was aided by the redrawing of the electoral districts in Texas. Blacks in Florida had their vote cancelled in some areas.
      Then I pointed out that in my riding, the supposedly elected-by-party-members candidate was Jean Augustine, parachuted in by Chretien. Then they parachuted Ignatieff into the same riding.
      Now I am, as you know, a bit of a b….rd and a curmudgeon. Our Libertarian friend asked me to name a democracy, and I suggested Athens under Pericles. Everyone at the table nodded wisely. Athens was in deep doodoo and Pericles was made dictator for three years. Extended for three more. In this period he built ships, planted olive trees, and did everything in between to defuse a social problem internally and a military problem externally. Without this we might be speaking Persian. My point is that the great democracy of Greece was not founded on democracy.
      The problem with democracy is its underlying assumptions can be challenged. The electorate is educated? The campaigns are scrutinized by the press? The funding is open, fair, and legal? Candidates come from the citizenry in general? Special interest groups can’t influence the outcome? Attack ads don’t fool people? enough, already. Hopefully Churchill was right. Certainly some tyrannies were not careful of their citizens.

      • I agree with your assessment about the problems with democracy in most modern states. Ignatieff did not provide a compelling campaign or persona but Harper got a free ride on so many wrongs committed during the previous government. There were many reasons but I think it was largely because the electorate is swayed by attack ads and an annoyed at being asked to vote more often than every 4 years. It amazes me that in the US so many poor vote for Republicans who defend the tax breaks for the rich. The Republicans also wrap themselves in the role of “religious right” but don’t follow through on anything like what people expect (stem cell research bans notwithstanding). The lower classes vote against their own self-interest because Fox News tells them to.

        Your comment about an independent press is really important. Jefferson felt that this was crucial to successful democracy. It is one of the reasons you can’t simply drop democracy into a state without an established independent press. Bush managed to mute the press by the “you’re with us or with the terrorists” line and they were all cowed. These days the popular media are also struggling against a challenging economic model and may not have the resources to conduct investigative journalism. They also lack the reach of earlier generations and it is very easy for a blogger to spout fiction and get it read by the masses. So many challenges and risks. Our best hopes may be for benevolent dictators (hopefully not an oxymoron).

        • One sad, cynical observation about democracy. In California, there is a system whereby major issues can be made into voted-on resolutions. By this means it became law that no tax increase could be passed without a referendum-style vote. Now the state faces bankruptcy. There is a lesson in this.
          Sometimes unpopular decisions have to be made. Present gratification may have to be deferred for longer term benefit. Deciding never to make an unpopular or uncomfortable decision is a bit like paying off a blackmailer. (Don’t raise taxes, or we’ll vote you out.) The problem goes on until it breaks something: your finances, the environment, the state’s ability to function. Hitlers have to be stopped, even if it means loss of life.
          Autocratic rule puts everyone and everything at the whim of the autocrat, perhaps with his/her support system.
          Democratic rule seems to put everone and everything at the whim of: the electorate, vested interests, and our elected leaders.
          Democracy has one clear, civilized advantage: we have nicer ways of replacing our leadership.

          • I’m not usually one to argue on the Internet, but it does make sense to have a finite physical benchmark upon which to tie in a value. Something that has little application as a commodity yet is such a rarity that it makes it desirable, or valuable. Unlike wheat, it can not be grown, and unlike money, it can not be printed or simulated in computer systems. It is a physical cap on spending, when the capitalist system we are a part of was first imposed, there was no hypothetical money. It’s the trade of non-existent numbers that landed the West in the mess it’s in now. If the gold in your pocket isn’t enough to purchase bread, you go hungry. This is simple budgeting, something big corporations and politics have to learn if we want to carry on living as we are.

  2. I am reminded that Sparta used iron money, with the result that a large amount was incovenient to carry. Travellers had to be competent; merely being rich did not help. Some primitive societies also used large objects for money, with similar lack of mobility. Free Trade was an agreement that allowed owners to move the means of production to anywhere they like. This on top of the ease of moving money around the world, has allowed a few to exploit everyone else to an ever-increasing extent. Banks with high or unlimited reserve ratios create money simply by changing your bank account and calling it a loan or mortgage. I think it was Keynes who pointed out that inflation is good for business: their inputs were priced in the past, and their products will be priced in the future, adding to their profits.
    I think the last 30 or 40 years’ economies have all been a large Ponzi scheme, where every business was expected grow, outpacing inflation. When all those strange pieces of paper suddenly were questioned, the banks threatened to fail and we bailed them out. Now they, the captains of finance and industry, want us to face austerity, something they have never and will never experience themselves.

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