I know there will be many of our friends and family who are wondering about my thoughts on the proposed Super City and how it would affect me.

The first thing I need to make clear is that everything expressed in this post are my personal opinions and in no way represent a comment from the Auckland City Council, management or even me in my professional context.  Also, the report has not been accepted by central government, so until then, all we are doing is speculating.

Firstly, a link to the executive summary of the report.  It’s pretty lengthy, but contains quite a bit of useful information.

I’ve been surprised how few of the details people seem to be aware of.  For instance I rang my parents the other night and was talking about the report.  They live in Orewa, so I figured they would have heard about the fact that they would be joining the ex-North Shore City Council in the new Waitemata local council.  Nope.

So, super city…I think it’s a pretty good idea.  From a shared services point of view I think it’s nothing short of logical.  In the IT area there have been a number of opportunities to work across council boundaries and while some have been remarkable successes, others have not got past the starting line.

I also agree that Auckland needs a single point of decision making and planning.  There have been many examples where good ideas have fallen through the cracks or been delayed due to a lack of agreement and direction between the councils.

In regards to cost savings, this article expresses my thoughts reasonably accurately.  Basically I’m saying, don’t count your chickens.  The costs to set up the new council are probably reasonably realistic ($120-$240 million) but the question of cost savings will be very hard to realise.  The report recommends retaining all staff initially, so given the complexity of the new environment, the actual running cost of the new council for at least the first few years will actually be higher.  I think it is possible to achieve cost savings in the medium term, but don’t count on your rates bill dropping straight away.

Finally, my personal situation.  This is where I feel like I’m treading dodgy ground, speculating on what might happen to me when the report hasn’t been accepted and none of the decisions which would impact me have even begun to be discussed, let alone decided.

Let’s just say that my position is not secure in the medium term.  The councils will all be disbanded and the new council formed with all the employees.  From an IT perspective, systems will need to be decided upon, and a support structure designed.

If SAP was retained as a system to be used in Auckland Council (and I believe it has a strong case) then my team and likely myself would find a home (we would probably need every SAP resource we could get from other councils plus more).  However if SAP is not chosen then while I would like to remain in the council, this becomes a more challenging scenario.  This is the question that many staff members across the councils will be facing.

But all in all, I’m excited about the opportunities the report brings, for Auckland, my team and myself personally.  There are few opportunities in life to be involved in a change project of this scale and it certainly helps to come into it believing that whatever we are delivering towards, it will make Auckland a better place to work, live and bring up our children.

Posted in Current Events, Life's happenings | | 1 Comment »

In a discussion about the AIG bonus issues with friends last night, I made a rather heated comment about my own bonus from my current employer.  I said that while some in the organisation were discussing refusing their bonuses, “there is no way in the world I would be refusing my bonus”.

After the heat cooled I thought some more about that comment and about the situation in AIG.

Firstly, my own situation.  Bonus payments are a common part of remuneration in the IT industry.  They’re both a performance bonus (an incentive to achieve organisational goals beyond your job description) and a retention payment (used to make sure that scarce resources remain in an organisation).

My bonus is a contractual requirement, although the organisation can vary the percentage which gets paid (and presumably this year the % will be low).

Thinking back on my statement above, I think there are some scenarios where I would give up my bonus but certainly not because of guilt or pressure from anyone else.

The point isn’t about greed or charity or anything like that.  It’s about getting what I have earned and what I do with the money being my choice.  Pretty similar to this guy.

As a manager (admitedly, a very junior one), this letter makes me cringe.  It’s from one of the very senior managers at AIG resigning over the bonus debacle.

From the sounds of it, this is a very effective, astute manager who is leaving AIG because of a bonus amounting to ~$700k.

What it’s hard to realise for people who don’t work in business is the scale of financial responsibilities many managers deal with.

Let’s look at the AIG example.  It’s been reported that AIG lost $62 billion through it’s poor management of swap deals.  That’s $62,000,000,000 an astounding figure. 

If the letter above is to be believed, only a handful of the 400 employees had any responsibility for this.  Let’s assume 20% to be conservative.  So 80 people had responsibility for these losses.  That’s $775 million per person.

So by my calculations, the bonus Jake was being paid was 0.09% of the losses each of the involved employees were responsible for.

Am I making myself clear?  Maybe not. 

If financial institutions are going to be successful they need to have great people.  These people are responsible for huge amounts of money.  The difference between having a good person in these positions and a bad one means the differerence between making and loosing hundreds of millions of dollars.

Jake admits he may be overpaid.  I can admit that the bonus payments seem like obsurd figures to those who are struggling to live on $30k a year.  But if AIG is going to survive (and the US government has made a huge investment to make this happen) it desperately needs good people at the top.

What good leader is going to leave another role to take Jake’s job now?  And more importantly, what does the unavoidable continuation of the loss in leadership at AIG mean for the organisation?  Obama, other politicians and the American public need to remember that there’s more than one way for an organisation to fail.

Posted in Current Events | | No Comments »