Wednesday, February 02, 2011

We need a management revolution

In my column to be published in today's Armidale Express, I said in part:

One of the difficulties faced by those of us trying to improve management is that it’s almost impossible to break through. The mental and organisational lock-in is just too great.

Imagine, for a moment, just what response you might get if you tell a client or the organisation you work for that it must abolish or drastically restructure its existing performance management and reporting systems; do away with terms like key performance indicators, inputs, outputs or outcomes; and give its people greater real freedom to make decisions, to experiment, to take risks, to make errors.

To argue that we should abolish all the controls, targets and reporting systems so beloved by modern organisations may sound a bit extreme. Sometimes, cleaning the slate and then rebuilding is the only way to go.

In a post, Do family benefits provide a welfare pedestal?, Winton Bates mused about the concept of a welfare pedestal has been popularised by Noel Pearson.

A little while ago I did some work on different aspects of social housing rental policy. As part of this, I spent a lot of time looking at benefits schedules.  Consequently poor Winton attracted a far more detailed response than he might have expected for what was a muse.

Summarising the points I made to Winton:

  1. Commonwealth benefits are very complex and also interact with other things such as the provision of social housing and social housing rental policy.
  2. Australia is a very diverse country. Consequently, the on-ground impacts of uniform national or state policies are quite differential.
  3. The combination means that the likely impact of particular welfare changes can only be understood by combining a detailed analysis of interacting benefits structures on one side, the likely differential on-ground effects on the other. As I so often say, there needs to be a point and counterpoint between the general and the particular if the proposed changes are to work.

As I write, Julia Gillard has just, and I quote from the Australian,  flagged new incentives to encourage two million Australians, including disability pensioners and part-time employees, to work more hours, as part of a dramatic bid to ease workforce shortages and secure the nation's economic future. Here she said in part:

We look with particular care and concern on the large number of working-age Australians, plausibly as many as two million, who stand outside the full-time labour force above and beyond those registered as unemployed

The PM is correct that Australia has a large number of underemployed workers over and beyond the formally unemployed. I think that she is correct in wishing to address this issue. Will it work? I don't think so. She has stitched together a series of different issues (carbon price, mining tax, underemployment, aging population) expressed in generalities, national universals.

It may that her hard working officials can give all this solid substance, but then those same officials are both siloed and  used to dealing in very specific but narrowly defined and universalised performance measures. Further, there are no quick fixes. 

In what will seem an apparently disconnected segue, I am presently working with my old friend and colleague Noric Dilanchian defining a new on-line services business. My assignment is to give the concept sufficiently defined form so that its viability can be tested and then, if it passes that test, carried through to a business entity.

The concept itself rests on two assumptions (conclusions?) directly relevant to our discussion.

The first is that the thinning out of management, the introduction of new forms of working arrangements, has now destroyed previous in-house knowledge to the point that managers can no longer do or advise on things that they once could. Further, organisations no longer have the discretionary resources they once had to do real development work, to address new or even recurring issues.

There is an important sub-text here in the way that modern information systems operate. In some ways, they have actually reduced organisations' capacity to access lessons or at least experience from the past. I just mention this one now.

The second assumption and/or conclusion lies in the impact of computing and communications technology on the pattern of work and on work flows. I suspect that most professional services advisers will smile in sympathy on this one.

We live in a just in time, 24/7 world. Time to think is limited. Issues that don't have to be dealt with now are pushed aside. However, when they are dealt with, they have to be dealt with quickly. The client sends a brief, partially thought out email, do this now.

The professional follows up, seeking the information required to provide proper advice. Clients quickly become impatient, especially when (as is often the case) they haven't actually done the preparation required. They just see a problem and want it fixed - now and at a low price.

A lot of professional services firms simply roll with this. They do just what, and only what, the client wants even though the professionals involved know that it's not going to work or could work better. Take the fees and run. This maximises fees.

The issue in our mind lies in the possibility of doing new things, of combining changes to organisational structure with changed working styles. Have we now reached the point where clients will actually pay for certain higher value added services because they really have no choice?

We are not talking here of things like document automation, things that automate and industrialise certain processes. Rather, the management of certain more complex matters and processes that are not, on the surface, easily amenable to on-line delivery because they still require customisation and individual attention.

Will this work? The short answer is that I don't know because it still requires people to commit a degree of time. Nevertheless, the issues involved are quite fascinating.

The concerns that I have about management, about public policy, about the conflict between the short and long term, are not academic nor are they based on economic generalities. They come from the fact that I have worked at high policy level, at high management level, but also at the coal face. then and now. They also come from my experience in working across sectors and functions.

As a framework person, I cannot help generalising and testing. I then really get very frustrated when I cannot get my conclusions across. There is little point and no pleasure in saying I told you so when some pretty obvious failures emerge.

We need a management revolution, something that will clean out the barnacles of the past without destroying the ship itself.

Postscript:

Lynne came up with a very quick comment that exactly captured the problems associated with universal rules. I quote:

Jim, I have been looking for some studies on the impact of the compulsory " volunteering " for over 55 year olds who are in receipt of Centrelink benefits. The client is required to 'volunteer' for 15 hours unpaid work a week. The Voluntary Organisations are restricted to Centrelink approved and do not include family activities such as care of grandchildren. Health doesn't seem to be taken into much consideration and nor does the expense of participating. The previous qualifications and achievements of the Client also seem to count for very little.

I am also interested in the flow on effects to the organisations which are often flooded with unwilling or untrained " volunteers' and on positions which would once have provided paid employment.

I have seen the polished versions of why this is a good scheme and of how well it is working but have not really seen that in the reality of the unemployed over 55 year old. Yrs Lynne.

Once again , just another musing.

Do you think that the things that Lynne talks about are a sensible result?

8 comments:

nellibell49 said...

Jim, I have been looking for some studies on the impact of the compulsory " volunteering " for over 55 year olds who are in receipt of Centrelink benefits. The client is required to 'volunteer' for 15 hours unpaid work a week. The Voluntary Organisations are restricted to Centrelink approved and do not include family activities such as care of grandchildren. Health doesn't seem to be taken into much consideration and nor does the expense of participating. The previous qualifications and achievements of the Client also seem to count for very little.

I am also interested in the flow on effects to the organisations which are often flooded with unwilling or untrained " volunteers' and on positions which would once have provided paid employment.
I have seen the polished versions of why this is a good scheme and of how well it is working but have not really seen that in the reality of the unemployed over 55 year old. Yrs Lynne.
Once again , just another musing.

Jim Belshaw said...

Bless you, Lynne. You have perfectly captured one element of the stuff I am talking about. It's just dumb!

Winton Bates said...

Hi Jim
The implication of what you are saying about management seems to me to be that it is sometimes better for a failing firm to go out of business than to attempt a turn-around.
Then, following your references to our discussion of the welfare pedestal, I come to your rather pessimistic comments about the prospects of the PM's latest proposals being implemented. It seems to me to be a symptom of a failing firm when the CE makes pronouncements about future plans which actually lead nowhere. So, are you implying that the federal government should clean the slate and rebuild?
Don't worry, I'm just trying to be provocative.
(By the way, I actually have some respect for Julia Gillard's capacity to make things happen - and in this policy area I think she might actually have her heart more or less in the right place.)

Jim Belshaw said...

Not quite sure about the logic chain there, Winton! But then, maybe mine is off too. Certainly, I put different things together in my own muse.

I have no doubt that Julia's heart is in the right place on this issue. I just doubt the outcomes.

There are two quite separate if interconnected problems.

The first is the way policy is formed. The second is the way organisations are managed.

The two are connected because the idea sets, the way of looking at the world, that guide each, come from a common pool and are interconnected.

Julia Gillard's attempts to solve underemployment sit in the area where the two overlap in terms of advice and administration.

I accept that her heart is in the right place. It may be that she can drive something positive. I would love to think that she might. I just think that the dice are weighted against her.

In an event, we will know quite quickly. In public policy, it's pretty easy to forecast what won't work and why. You just have to look at the likely dynamics.

Winton Bates said...

Hi Jim
I was just wondering how revolutionary you might be these days.
The only public policy revolution that I can think of that might have been worth supporting at the time was the American Revolution. But my knowledge of history is limited.
In terms of public policy I expect both of us would tend to favour incremental changes that individually do not seem particularly revolutionary, but add up to something substantial over time.

Jim Belshaw said...

Yes, Winton, I do generally favour incremental approaches. Of itself, that's kind of revolutionary today!

Focusing just on management and on the public sector, we need to make things simpler, more flexible, reducing administrative load. To this end I would abolish corporate plans for most Departments of state; abolish or greatly modify perfomance setting arrangments to reduce the current cascade lock-in; greatly restructure or even abolish the use of so-called key performance indicators; modify the way standards based approaches are used to bring them back to the original concept and in some cases abolish them entirely; increase delegation including delegation to the states; change people management approaches to reduce the time spent on administration. And that's just a start!

Winton Bates said...

I agree that all this managerialism is dreadful. But I would like to see what you are proposing to replace it with.

Perhaps we should bring back the Mandarin system and let the 'permanent heads' run things their way. The virtue of that system, as I remember it, was that for the most part people just got on with their work and often took professional pride in doing a good job.
Perhaps bring back 'permanent heads' would also help solve the problem of politicization of the public service.

Making management of the public sector more simple and flexible and reducing administrative load seems to me to be a good objectives.

Jim Belshaw said...

You may well be right, Winton, about the mandarins.

I remember how critical I was of Commonwealth Public Service "management" when I first joined. It actually ignited my interest in management as a discipline and sent me off on a reform path. Now, all these years later, I seek to unwind those things that I played a small role in bringing in!

With management, there are no right and wrongs, simply things that work best at a point in time.