Tuesday, 8 February 2011

This Blog Has Moved!

This will be the last entry at this URL, as my blog has moved to the new Happy web site. Check out the new design and I hope you will continue to follow me there.

Click through here for Henry's blog

Monday, 31 January 2011

Happy Computers is 20!

The origins of Happy date back to 1987, when I first registered the company and started provided training to friends and contacts. However 4th February 1991, twenty years ago this week, was the date on which Happy Computers established its first training centre in Wicklow Street, near Kings Cross. It had just one training room and the only staff were me and Tina, a part-time administrator. From there we grew steadily to our current training centre, with 14 training rooms and 20,000 people trained last year.

At the time WordPerfect 5.1 was the latest word processing software, taking over from Wordstar and Multimate. Windows 3 had only just being released and Word for Windows had barely been heard of. Supercalc and Lotus were the spread-sheets of choice, and were a bit basic. I remember how, to print in landscape, you ahd to teach people how to enter a 12 digit code. The idea of the world wide web was still being worked on by Tim Berners Lee at CERN. And I remember investing £1,300 per machine to get 16 MB of hard disk space and a whopping 4MB of RAM in the PCs.

A lot has changed since then. The technology is miles ahead, the software is much easier to use and the web has changed just about everything. We now train online, and deliver webinars as well as our core class room training. But the core principles on which Happy Computers was founded, of involvement and making learning about computers fun – and having a positive effect on society, remain in place. And we are very proud of our record of 20 years as an independent training company.

Any other memories of the early days of IT training welcome. Do post a comment.

Friday, 7 January 2011

It Is Good to Pay Tax

There have a been series of demonstrations, organised by UK Uncut and others, against companies who have been avoiding paying their tax. I say good luck to those protestors. How about forming a group of companies committed to paying their tax, to put extra pressure on those multi-nationals seeking to avoid it?

But I'm having difficulty finding companies to join! I asked our accountants if any of their clients were happy to pay their tax in full. He thought for a moment, casting his mind over hundreds of companies, and said "maybe one". I wrote before of finding, when looking for a new auditor, that the focus of nearly every auditor we met was how to help me avoid paying tax.

Where is our sense of social responsibility? We expect to get the benefits of public spending. We expect our workforce to be educated, we expect health care for when we or they are ill, we expect to be protected against crime, we expect good transport and infrastructure.

I don't want to seem holier than thou. To be honest, we haven't made a lot of profit in the two years of recession. But when we did well in the previous years, it seemed only appropriate to pay our fair share.

So next time you hear a representative of a company, whether large or small, talking about corporate social responsibility and their contribution to society, ask them a simple question: Is their company committed to paying their full UK tax bill?

Friday, 26 November 2010

Why Economies of Scale Lead to Poor Service

As the government embarks on programmes of shared services, let me give an example of why this approach can be disastrous. At the local school where I am Chair of Governors we have just gone through BSF (Building Schools for the Future). We were promised the economies of scale would result in better service and lower prices. In fact they have led to the reverse.

Lessons of BSF
Let's take the example of IT support. Before BSF we had a team of four staff, who had taken the school to a leading position in the use of IT in education. They were directly managed by the school and any problems could be dealt with directly.

Now we have an external firm managing it. But we don't have a direct contract with them. They have a contract with the lead contractor. The lead contractor has a contract with the Local Education Partnership (LEP). The LEP has a contract with the local council. And the local council has a contract with the school.

In the first year the service was terrible, so bad that penalty payments sometimes exceeded 50% of contract value. Previously we could have dealt with this through performance management. If we had simply employed an IT support firm, with a sensible contract, we could have simply terminated and found another provider. But a distance of four complex contracts and a first contract break point of five years, there was very little we could do. Economies of scale had resulted not in better service but in a complex, costly service over which we had little power as customer.

Now BSF is well known for its costly, centralised legalistic approach. Anybody involved will tell you how it wasted billions of public money. But the shared services approach is set to follow a similar route.

Shared Services in Training
Take my business of training. In most of our contracts we have a direct relationship with clients. If they are not happy they can simply choose somebody else (though this rarely, if ever, happens). Under shared services, the client will have a contract with the service purchaser, who will have a contract with the main contractor, who will have a contract with the training provider. And it will be a long-term contract, to justify the complexity of the procurement.

Rather than getting economies of scale, we can expect to get complex contract relationships (which raise costs) and only indirect control over quality. Once again the lawyers will do very well, but the government clients probably won't.

Wednesday, 24 November 2010

Why Economies of Scale Can Lead to Higher Prices

Once again we have a government talking about saving money through shared services and combined procurement. It seems to make sense. If you buy 100, say, televisions you would expect to be able to negotiate a better price than if you only bought one. The same must be true for when the government buys services, mustn't it?

Actually the answer is often no. Let's look at my industry, training delivery. Parts of central government are now talking about combining all their training spend - for IT, management, health and safety and much more - across many departments. To bid you will have to be a truly massive company, the likes of Capita or Serco - and they certainly won't be as cheap as buying direct from a training provider. And control of quality will be fair more indirect.

For a government agency in, say Exeter, the best value training would probably be sourced from the local college or a small local provider. But neither of these will bid for a national contract. By making the contract so large, the competition is cut down to a small number of big companies who are rarely either best for value or best for quality.

Small Companies Can Provide Better Value and More Flexibility
One agency I know, after a full procurement some years ago, hired a one person company to provide their IT training. They provided the best value, most flexible, most responsive service I have come across anywhere outside of my company. (I know about it because Happy Computers was the back-up provider, for any courses he couldn't train.) But he certainly couldn't bid for any national contract and the large providers would have little reason to include him.

At the same time as going for larger procurement contracts, the government talks of including more small businesses - apparently unaware of the obvious contradiction. I've heard government representatives talk of how small businesses can be included as sub-contractors to the big bidders.

But this is a profoundly stupid approach. The benefit of contracting with small firms is better value and greater flexibility. You lose both by only contracting these companies as part of large contracts.

If the government goes ahead with its determination to centralise procurement you can expect some very complex legal contracts (yes, the one set of people who will definitely benefit are the lawyers), less direct contact with the providers and a far more bureaucratic approach. What you almost certainly won't get is lower cost.

Friday, 5 November 2010

The Happy Manifesto: 9 Steps to a Great Workplace

The latest draft (beta 1.6) of the Happy Manifesto can be downloaded from here. Here is the manifesto, the key 9 points:

1. Trust Your People
Step out of approval. Instead pre-approve and focus on supporting your people.

2. Make Your People Feel Good
Make this the focus of management

3. Give Freedom within Clear Guidelines
People want to know what is expected of them. But they want freedom to find the best way to achieve their goals..

4. Be Open and Transparent
More information means more people can take responsibility

5. Recruit for Attitude, Train for Skill

6. Celebrate Mistakes
Create a truly no-blame culture

7. Community: Create Mutual Benefit
Have a positive impact on the world and build your organisation too

8. Love Work, Get a Life
The world, and your job, needs you well rested, well nourished and well supported.

9. Select Managers Who are Good at Managing
Make sure your people are supported by somebody who is good at doing that, and find other routes for those whose strengths are elsewhere. Even better, allow people to choose their managers.

Thoughts, comments, feedback, additional suggestions welcome.

Wednesday, 3 November 2010

Is the Government Serious About Supporting Small Business?

I'm not a great fan of the coalition government but it was great to hear David Cameron talking about the role of small business. Personally I have always thought the complaints about red tape were so much hot air but he is spot on when he talks about "the shocking way in which small and medium sized firms are locked out of procurement opportunities by central and local government".

This makes sense. Small businesses can often provider more flexibility, better value and a more local approach.

But does Cameron mean it? Since June the only trend I have seen is to larger contracts aimed at the largest suppliers. I have just written to Cameron to ask if he will reverse the move of the Skills Funding Agency to minimum contract values for apprenticeships. From 2012 they say they will only sign annual contracts of £1 million or more. Clearly they have no wish to work with small business.

Here's my letter. I will post any reply I receive:

David Cameron
Prime Minister
10 Downing Street
3rd November 2010

Dear Mr Cameron

As a small business owner can I say how delighted I was to see your statements this week on supporting small business, especially in giving us a fair chance in government procurement. As a training business that provides extensive services to government, I hugely welcome your proposals.

Let me make you aware of one place where the government has, since June, introduced changes that appear to be designed to prevent a government agency contracting directly with small businesses. I write in the hope that you will be able to stop it

The Skills Funding Agency is introducing new minimum annual contract values for delivery of apprenticeships. Last year Happy Computers, as a small business, had a contract for £170,000 which enables us to deliver excellent training and certification to around 75 apprenticeships. This year a minimum contract value of £250,000 has been introduced. Next year this is to be raised to £500,000 and, we are told, the year after it will become £1 million.

At the moment a small local business may be the best provider to meet the needs of the local community and may only have demand for around 20 apprenticeships. In the future small businesses like this, and like ourselves, will not be allowed to contract directly with the Skills Funding Agency.

Instead small businesses will have to sub-contract through larger training providers. This will introduce an extra layer, mean more non-delivery work and will mean a % top sliced away.

This would only make sense if the government believed the way to improve services was to use only large organisations. It makes no sense for a government committed to small businesses, entrepreneurship and innovation.


Henry Stewart
Chief Executive
Happy Ltd