Reluctance to adopt ideas from outsiders is hindering reform in Whitehall, says Robert Heller Heller suggests.
Every manager knows the feeling. You reorganise an operation along all the approved lines, make all the right noises, and apparently do all the right things. Yet performance doesn't improve, and may even deteriorate. Indeed, the Harvard Business Review found three-quarters of a 100-company survey 'unhappy with the results' of 21-plus programmes intended to improve performance.
Would a survey of Britain's governmental managers show any happier verdicts? The reforms follow lines advocated in Management Today long, long ago: hiving off executive agencies that have no place in a political environment; requiring responsible chief executives to justify their performance by economic criteria; and expecting public services to achieve the same standards, not least in satisfying customers, as the best exemplars in private business.
Yet the results, from health services and the Child Support Agency to the school system and the Inland Revenue (with its bizarre inability to compute codings accurately), have ranged from disappointing to near-disastrous. A report on the 80 new executive agencies, commissioned by the Government itself, has found both their chiefs and the senior civil servants to be unhappy, though on different grounds: the former complain that the latter interfere; the latter bewail the deterioration in values and culture in the agencies.
William Waldegrave, who asked for the report, called it 'useful and challenging'. As the Financial Times aptly reports, that's Whitehallspeak for 'embarrassing and very inconvenient'. But the challenger, a seconded French civil servant named Sylvie Trosa, has placed her finger on the exact reason why improvement programmes fail. She found 'confusion in the relationship between agencies and their parent departments'. 'There is a whole bureaucracy set up to monitor us,' one agency chief told Ms Trosa.
At February's launch of the Competitiveness Forum by the CBI, Frank Burns, managing director of Premier Exhaust Systems, told how productivity actually fell when half-a-dozen production workers returned from abroad with new ideas to improve their section's performance. Investigation showed that managers and production experts were interfering to their hearts' content. They were barred - and productivity soared right back up.
The principles of decentralisation and devolution work fine, in other words, provided they are allowed to work. But that enablement includes the set-up: the objectives selected, the resources provided, the feedback installed. Get those three wrong, in business or government, and little can go right. The Child Support Agency, with its schizoid pursuit of both marital justice and saving public money, appears to have been set up for failure on all three counts.
Equally, whoever invented the fundholding system for GPs must have been capable of answering the following conundrum. If a patient from Dr A brings money into a fund-strapped hospital, while Dr B's patient takes money out, which patient will the hospital favour? The answer is so obvious that the question was probably never asked. But that's the case with the public service reforms as a whole. Never mind market testing (see cover story, p38) - the reform proposals were never tested by expert scrutiny from all involved parties.
That comes back to the issue of failed improvement programmes in private companies. Very often, these have emanated from top executives, who haven't even sought the agreement and advice of senior managers, let alone the body of employees. The top echelon itself, of course, doesn't submit its own performance to the new disciplines. That helps to damage morale, which is further weakened by the expectation (usually confirmed all too soon) that the programme will lose favour, only to be replaced by another false start - and so on, ad infinitum (or ad calamity).
The Westminster-Whitehall nexus takes this system to the point of parody. Ministers and civil servants discuss 'policies' in private, with as much or little outside consultation as they wish. In coming to their decisions, they often ignore outside opinion entirely. Those who have to execute the policies are saddled with their defects. The only effective feedback is public or political outrage, which results in measures that even their perpetrators consider half-baked.
Still worse, the policy-makers, emulating weak top managers, can't leave their initiatives alone. Just as Ms Trosa was told, they run shadow administrations (like the departmental sections that second-guessed the old nationalised industries) to check on their creations - not year to year, or even quarter to quarter, but day by day. Any unsatisfactory results, naturally, will be blamed on the managers concerned, not on the interference of their sponsors.
Whitehall may have found the Trosa report 'embarrassing and very inconvenient'. Outside appraisals - like those of customers in private industry - very often are. That makes them more valuable, not less. By inviting an expert outsider, and a foreigner at that, Waldegrave took a step that, if followed, would surely have profound implications. The weaknesses of Britain's governmental reforms have included a deeply imbued reluctance to adopt ideas from either foreign countries or outsiders.
'Not Invented Here' prevails: 'Invented Here' has resulted in persistent failure, above all, to achieve sufficient economic growth to finance increasing demands on public funds. There are lessons here from Total Quality Management (high among those initiatives doomed to failure by top-down imposition). TQM involves the famous Deming cycle, PDCA: plan (goals and methods of reaching same), do (implement, after training and education), check (the results), act (to correct for error). The Government plans inadequately, does ineptly, doesn't check - and doesn't correct. Any bets on what will happen to Ms Trosa's report?