Wednesday, 30 July 2014

British business can be so contemptuous of customers


I had a brief lesson yesterday evening about what is wrong with administration, public and private, in the UK after unfortunately entangling myself with the Direct Line call centre.

This is no bureaucracy, after all.  It isn't the public sector.  But unfortunately, in a weak moment some years ago, I seemed to have taken out car insurance with them.

My call was to facilitate what should have been a simple business of extending my car insurance to cover a brief drive in France later this month.  It was the culmination of a private sector bureaucracy encounters while undergoing the trauma of trying to buy and sell a house recently, and it really isn't at all impressive.

What strikes me most of all is how unresponsive and inflexible they are.  But let's stay with Direct Line.

It took me just over 40 minutes and four different phone calls to talk to anyone human at all - and I don't think, judging by their website, that this transaction can be carried out online.

Still, I happened to have the phone to my ear when the human being answered and the transaction was pretty quick.  It was then that I noticed that my card details they keep for me are out of date.  Could I change those at the same time?  I had after all just paid using the new card for this French trip.

No, because that was a different department.  I could be transferred but would have to go to the back of the queue.

I said the life was too short and gave them my phone number, and asked them to call me.  No, they couldn't guarantee it.

I tell you what, said the man.  I've just checked and the accounts department has no calls waiting.  Shall I put you through now?

Clever move this one.  Of course I said yes, and went through the usual hideous recorded messages, only to discover - as he must have known - that there was a very good reason why the accounts department had no calls waiting.  It was closed.

Now, let's unpack this a little. There is no good reason these days why any consolidated insurance company should not be able to deal with all my transactions in one call.  The US insurance giant MetLife has a new app that allows them to see into all their 70 different and incompatible databases and see what each customer needs. Guess how long it took to build? Ninety days.

Once again, UK business clings to outdated technology - big IT systems - which make them inflexible and lock in all the inefficiencies.

But there was one other infuriating element of the experience.  Like most call centres, we started the ordeal with the obligatory recorded message explaining that they are dealing with unprecedented demand and there is therefore a wait (they were right about the wait, and I paid for it via an 0845 number).

I am an admirer of the system thinker John Seddon, and find myself approaching these issues as I believe he would.  Are these periods of high demand not predictable?  Why don't they organise their rosters around the patterns of demand, rather than squeeze their customers to fit in with their inflexible rosters? 

As it was, the man I spoke to met his target for the time taken to get me off the line, and they were happy.  More about these issues in my book The Human Element.

All of which makes me think three things:

1.  Once again, why is UK business so timid, so inward looking and so contemptuous of their customers - presumably because they are so often consolidated beyond usefulness?

2.  This isn't an issue of public versus private, but even so...

3.  How do we prevent Whitehall from believing that this is an efficient model for public services?

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Tuesday, 29 July 2014

Let's celebrate Englishness in school

My cousin Sally is over from New Zealand, which involves a great deal of robust exchanges, mainly about child-rearing.  Sally is scary but absolutely right.

One of the things she asked me is whether the children have to sing patriotic, morale-boosting songs in school, like they do over there.  In other words: is there an English equivalent of 'It's Cool to be a Kiwi'?

I asked my ten-year-old and he couldn't think of an equivalent, and I must say I can't either.  After all, we English do have an aversion to That Kind of Thing, and I'm not altogether sure we are right to have.

Certainly, the American hand on heart at school assembly, while they are saluting the flag, rather sticks in the throat - and is wholly unEnglish.  But still.

I wondered about this when I was an an overwhelmingly Canadian wedding at a pub in Peckham.  At a late stage in the proceedings, everyone started singing 'O Canada!'

I wondered afterwards whether, if I had been at an English wedding in Toronto - or New Zealand for that matter - whether we would have sung 'God Save the Queen'.  I came to the conclusion that we might have, but with more irony.

I am a Liberal, after all.  I am wedged into a political tradition that scorns patriotic fervour, in a nation that finds this kind of thing embarrassing.  I had an article in the Guardian yesterday about Richard III and got what I deserved among the comments below the line for writing with any pride at all about even this rather distant member of the royal family.

But I have a feeling that, taken to its current extreme, this is not really liberalism - it is just world-weary cynicism.  It is post-modernism.  It believes in nothing and ends in a kind of nihilistic surrender to the forces of intolerant people who do believe something.

Let's imagine for a moment that the Scots vote after all for independence, and somehow navigate the nightmares and frightening side-effects of breaking up a union that used to be an empire.  Perhaps then the English will start celebrating what is great about themselves.

Because as long as we have things to be proud about - and we don't have to revel in those aspects of our history that nobody could be proud about - then it seems to me to give us confidence to celebrate it, and to give our children confidence by doing so.

But, and here's the rub, we have to stand for something as a nation - and it has to be more than getting richer or excluding foreigners.

Monday, 28 July 2014

On the psychology of public service incompetence

A fascinating editorial in the Guardian last week suggested a parallel between styles of military command and the sclerosis of public service management under Blair and Brown – improved under the coalition but not nearly enough.

I have been wondering about this and have been reading a psychological classic to find out more.

Norman Dixon was in the Royal Engineers before he was a psychology professor, and so he was well qualified to write On the Psychology of Military Incompetence. I have been scouring the book for evidence of what I have suspected for some time – that there is a parallel between military incompetence and public service incompetence.

One sends soldiers over the top to disaster, or leads them to freeze to death as in the Crimea. The other allows elderly patients to die of thirst.

Dixon’s thesis was that the old idea that military incompetence as something to do with stupidity had to be set aside. Not only were the features of incompetence extraordinarily common from military disaster to military disaster, but the military itself tended to choose people with these same repeated psychological flaws.

Dixon was a little too Freudian for modern taste – the book was first published in 1976 (the long hot summer when I did my A Levels and England changed forever). But I believe the basic thesis goes way beyond the military.

So here we are; here are his common features of military incompetence:

1. Arrogant underestimation of the enemy: for public services, this is about an arrogant underestimation of the problem.

2. An equating of war with sport. Not sure about that one, except for the strange way that the chairmen of NHS trusts tend to be part-timers, and therefore amateurs.

3. Inability to learn from past experience. The problem with public service incompetence is that it usually involves an inability to learn at all.

4. Resistance to using new technologies or new tactics. Public service incompetence often seems to be stuck in the technological era before last – massive IT systems in an age of apps, management systems which make it next to impossible to try anything new anyway.

5. Aversion to reconnaissance and intelligence: this is common also in public service incompetence – a refusal to listen to information from the frontline.

6. Great physical bravery but little moral courage. The lack of moral courage is almost a definition of public service incompetence, and often involves hiding from the truth about what is happening.

7. Imperviousness to loss of life or human suffering. Is there any other explanation for Mid Staffs and the other scandals in social care?

8. Passivity and indecisiveness.

9. A tendency to lay the blame on others.

10. Love of the frontal assault, which I take to mean – at least in public services – that no cleverness, no human solutions, no unconventional approaches are allowed to interfere with the business of generating outcome figures for the commissioners.  No solution which fails to achieve this is acceptable.

11. Love of smartness, precision and the military pecking order, which in public services means that at all costs the outward signs must be preserved – meet the targets, polish the corporate logo, and so on, rather than seeing the reality for what it is.

12. High regard for tradition – not so sure about that one.

13. Lack of creativity, ingenuity, open-mindedness. Precisely the problem in public services too.

14. Tendency to eschew moderate risks for tasks so difficult that failure might seem excusable. Public service managers also deluded by their own gung-ho facade, taking on tasks which they know to be impossible, perhaps knowing that heroic failure will raise their status.

15. Procrastination. Enough said.

Does this matter? Well, I think it does. Dixon felt that the military had traditionally been recruiting authoritarians with a fatal leaning towards these pitfalls.

He showed how what he called the 'authoritarian' mindset found it difficult to focus on the right information when it was coming from multiple places.  This is the heart of the problem: managers who are unable to grasp the truth - they think they are keeping an eye on the data, but they are actually relying on a few, flawed pieces of information and assumptions.

There is no parallel about perfect parade ground drill and military readiness. But our public services recruited managers in the not too distant past – and particularly I believe during the New Labour years – who were fatally wedded to unthinking target and outcome figures in the same way.

Neither could tell the difference. Most of us can see that parade ground perfection does not make for fighting ability (and sometimes means the reverse). Most of us can see that target output perfection does not make for a good service (and sometimes means the reverse).

But in both cases, the incompetents can’t see it. They are not stupid, but they really can’t see the gap – in our case between data and reality.


Thursday, 24 July 2014

The real reason we are all so heavily in debt

I see the coalition is once again struggling to keep down the size of the deficit and is missing their targets for this year.  It is down, of course, from the worrying levels of 2010.

But my colleague James Meadway has written a very interesting blog for the New Economics Foundation which suggests that, although the government borrowing total is down, the rest of the economy is still absolutely constipated with debt.

The latest debt statistics show that the average household debt including mortgages is £54,700.  Outstanding consumer credit debt is up another £5 billion on last year.

James Meadway says that the total liabilities of the UK financial sector is now over 1,300 per cent of GDP.

Why have we created the kind of economy that seems to require money to be lent as much as it requires oil to be extracted form the ground?

Debt is a problem in the private sector because of the activities of the corporate raiders - if your balance sheet is free of debt, then you are a takeover target.  The struggling consumer sector, especially when it comes to electronic equipment - rather like the airline industry - can't survive without pumping vast amounts of debt, either into the consumers or into the airlines.

Was there a moment when everything went wrong?  A moment when we plucked the apple marked debt from the tree of economic knowledge?

Well, not really.  But I've always wondered at the possibly mythical moment when a young Nigel Lawson persuaded the debt-phobic Margaret Thatcher that a society of homeowners could only be created by encouraging people into debt.

It was true - for a time.  But that fatal conversation, which seems to have happened at the Conservative Party conference in October 1979, led to everything else.  See the full story in my book Broke.

But there is another reason.  Creating debt is the way that banks create most of our money in circulation.  It is controversial, archaic and definitely not fit for purpose.  In fact, 60 per cent of the money in circulation started life as mortgages.

It is a sobering thought that, without the house price boom, we would have so little money that life would grind slowly to a halt.

It is, in short, a ridiculous way for a modern economy to organise itself.  High time somebody put forward proposals for reform.  The next question is why we don't get any of these proposals...


Wednesday, 23 July 2014

The secret of conjuring local enterprise

I must admit that McKinsey is my least favourite management consultancy. I’ve got nothing against their very clever staff and consultants, but they seem to me to be let down by the culture and tradition of the place, which gets in the way of seeing the world as it really is.

On one hand they are always chasing after the latest fads and buzzwords (a failing of all management consultants). On the other hand they remain locked into an archaic framework for understanding the way organisations work, including the so-called McKinsey Fallacy (Everything can be measured and what can be measured can be managed: false, see my book The Human Element).

But I read their latest offering with great interest – because it is relevant to the question at the heart of the project I am now running through the New Weather Institute. It is about how cities can create an entrepreneurial culture of start-ups and small business.

There is a basic contradiction in their coverage. They say that Berlin is an example of a city which is doing it right without government intervention, but then devote the next article to an interview with the mayor to hear how he did it.

They then articulate a very interesting idea – the start-up delivery unit – run from a mayor's office and designed to work closely with entrepreneurs and to bust barriers for them. It is flexible, imaginative and fast-moving, everything that an organisation re-designed using the McKinsey Fallacy tends not to be. And it is one of the ideas behind Berlin's entrepreneurial success.

These units are usually linked to venture capital. We suggested something along similar lines in the last Lib Dem policy on sustainable jobs – a new kind of institution, linking local finance with local entrepreneurial support, mentoring and coaching. 

But that obscures the perennial problem with the McKinsey approach. It doesn't see any further than the trendy world of tech start-ups, important as they are.

In fact, this is an approach that needs to be tested out much more widely, certainly in regional cities rather than just capital cities – wherever there is entrepreneurial potential (everywhere) and wherever there are problems to be solved (everywhere).

The late, great Anita Roddick used to define entrepreneurs as people who could see the world differently. She was overwhelmingly right.  The difficulty is that these kind of people are not always very adept at starting businesses or social enterprises - and they need more personal support than the ubiquitous tick-box approach of Business Link favoured by the last Labour government.

As the McKinsey article suggests, these units need to be extremely small and very flexible.  Like the BizFizz enterprise coaching scheme, they need to be active in the poor areas as well as the tech hubs. 

Like Community Catalysts achieved in Nottinghamshire, it needs to be the right person in the right place to encourage new micro-enterprises to carry out social care contracts in a more humane way.

This is the new localism question: what kind of institutions do we need locally to encourage entrepreneurs at local level?

It isn't about the latest silicon roundabout, for goodness sake.  It is about how to inject new life into moribund economies and moribund outsourcing.

Tuesday, 22 July 2014

The lost art of making things happen

Leoopld Kohr was an economist who was an immigrant to this country (he died in Gloucester). He once shared offices with Ernest Hemingway, Andre Malreux and George Orwell. But it is for his influence on Fritz Schumacher that he is best known today, and for his little book The Breakdown of Nations.

He believed nations should be smaller and I agree with him. I have no doubt that, as Freddie Heineken used to say, Europe would be more civilised, more effective, more imaginative and more humane, if it was made up of 50 separate states than with its present handful of shoulder-pad jostling mega-nations.

That doesn’t make me a Scottish nationalist, or a nationalist of any kind – quite the reverse, in fact. It makes me a Liberal who is at least interested in the contradictory idea of Scottish independence, as if ‘independence’ was at all possible in this day and age.

It also meant that I read the proposal by the billionaire Tim Draper that California should be broken down into six different states with a great deal of sympathy..

I am one of those who cheered when the Liberals took control of Tower Hamlets in 1986, and after a wild meeting of the full council that lasted into the early hours of the morning – probably a mistake when it came to building alliances for the future – the council was split into seven self-governing neighbourhoods,

As a principle of administration, it makes sense. Smaller units are more able to tackle the issues that face them – you have to be General Montgomery to co-ordinate government the size it is these days, and most people are not (therefore nothing happens).. Smaller units are more humane, more difficult to defraud, easier to make a difference, more flexible for frontline staff, and less expensive to administer.

For all these reasons, smaller administrative units are more effective.  There may be exceptions - social services was the legal exception in Tower Hamlets - but small is generally speaking beautiful.

But none of this is really about national boundaries. If there are supranational bodies like the European Union, which allow borders to be porous - as they will always be for Liberals - then these painful divisions are easier to negotiate.

I'm not clear what difference Scottish independence would make now - it isn't as if the Scots play any role in managing the currency even now.  Either way, the objective has to be porous borders, communication, two-way travel and good business - and the fact that it is one nation, or one state, or one local authority, rather than another, is neither hear nor there.

There are issues of co-ordination when you devolve power, but they are easier to manage than the issues of fractured demarcation lines when you don't.

These issues are critical to the future, and they at the heart of the very modern debate about the most effective size institutions ought to be. The UK establishment, public and private, is still wedded to the idea of economies of scale.  For all sorts of reasons, mostly self-interested, they believe everything should be big – schools, hospitals, banks.

Most academic opinion suggests these days that this is wrong-headed.  It isn't that there are no economies of scale, but that they are very rapidly overtaken by the diseconomies of scale in most areas.

This is the stuff of the future. The development of IT changes these calculations enormously, but it hasn't yet filtered into mainstream political debate - so we still debate inspection rather than human-scale, or privatisation rather than human-scale, or competition rather than human-scale.  But we never talk about the real issue.

That's why, if I was governor of California - which, heaven forfend - then I'd be n Tim Draper's side.  To make things happen, we need smaller units - and these days, we badly need to rediscover the lost art of making things happen.

Monday, 21 July 2014

Big data and the emperor's new clothes

“London is too full of fogs and … serious people …Whether the fogs produce the serious people, or whether the serious people produce the fogs, I don’t know.”

That was one of Oscar Wilde's bon mots in Lady Windermere's Fan.  It could have been used, and perhaps should have been, in the Observer yesterday in a tremendously important article about big data and its threat to democracy.

Because the real question, as it was for Wilde, is what causes what?

The article was by Evgeny Morozov and I hope everyone reads it.  It isn't so much about the threat from surveillance, important as that is (we should all own our own data, it seems to me), but about the great utilitarian dream that goes along with big data - that somehow all the issues of government can simply be measured, without debate or awkward democracy.  This is what Morozov calls 'alogarithmic regulation'.

The trouble is that he doesn't really go far enough.  He assumes this is somehow a new phenomenon, whereas it actually dates a long way back.

As I wrote in my book The Tyranny of Numbers in 2001, and as Morozov says, all these screeds of data never take you back to causes.  They will never actually allow you to debate them, or to tackle them, just an obsession with symptoms.

It is a New Labour fantasy of handing government over to machines that measure data - but with no understanding of how inaccurate data will always be if it is chained to definitions, or if it leads to controls.

Why does data have such an appeal to modern governments? Partly because of the technocratic thrill of measuring the ebb and flow of symptoms as if government was a gigantic, though not particularly well-oiled machine. Yet cause and effect is the one thing it is quite impossible to measure - interpreting the burgeoning wealth of data to work out what causes what is always a matter of judgement, common sense and intuition.

That's the problem with data.  It won't interpret. It won't inspire and it won't tell you what causes what. Statistics have nothing to do with causation, the pioneering number-cruncher William Farr told Florence Nightingale in 1861: "You complain that your report would be dry. The dryer the better. Statistics should be the dryest of all reading." 

 But over-reliance on numbers sweeps away your intuition along with ideology. It leaves policy-makers staring at screeds of figures, completely flummoxed by them, unable to use their common sense to interpret the babble of competing causes and effects – unable to tell one from the other.

If men with long ring fingers are subject to depression - as they are for some reason - that might alert you to looking for a causal link. The same is true of other peculiar numerical links: high stress makes you much more likely to catch colds, accident rates among children double when their mothers are miserable. 

 These odd connections might surprise and inspire you to think about problems in new ways, but it won't tell you what causes what. You will have to use your intuition to work out where to look in a massively complex world of complex systems. "Scientists try to avoid emotions and intuition," says the biologist Stephan Harding, "but it is exactly those that give them ideas."

Too many numbers also drives out history – it gives us no sense of the different ways in which people measured in the past. It drives out creativity, locking away Keynes’ dark woolly monster of ideas. And it drives out morality too – leaving our poor beleaguered ethics committees desperately trying to measure themselves a coherent attitude to the frightening future of genetically-modified human beings, or whatever takes their place.  Where's your data, we will demand of them?  Where's your evidence?

And to get through the next few perilous decades, to look after each other, and solve the looming problems ahead, we're going to need all the judgement, intuition, history, creativity and morality we can possibly muster. So we have to make absolutely sure our tidal wave of data doesn't drive those things out.

My antidote to the tyranny of data is to ask the question the little boy asks in the Emperor's New Clothes.

Simple questions because they can devastate most political statistics. Yes, the carbon monoxide rate has reduced, but is the air cleaner? Yes, our local university professors have produced a record number of learned published papers, but is their teaching any good? Yes, the exam passes top the league tables, but what about the education? Are the children happy? Can they deal with life?

Data based on definitions is as vulnerable as the Emperor's New Clothes to the incisive, intuitive human question.  So is the utilitarian philosophy behind it.  Go ask...

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