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Reputability LLP are pioneers and leaders globally in the field of reputational risk and its root causes, behavioural risk and organisational risk. We help business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.

Saturday, 7 June 2014

Dysfunction at the heart of government?

Giles Wilkes spent four years as a Special Adviser in Vince Cable's Department for Business, Innovation and Skills.  He has written about his experience rather as the proverbial Martian might report on a visit to Planet Earth 

He makes five dispiriting observations.
  • There is 'no such thing as HM Government'; it is a 'ship without a bridge', let alone a captain.  He sees the Government as consisting of about 20 departments each fighting for its own agenda, each led by politician who was selected for his success in internecine strife.  The result is a silent kind of dysfunctionality characterised not by open argument but by the sullen silence so characteristic of teenage boys.
  • Ministerial Private Secretaries are debonair, politically savvy fixers, the best of whom breezily fudge discord so that it gains the appearance of agreement.
  • Politicians - and perhaps Civil Service leaders, Wilkes is unclear here - usually start ignorant, gaining their knowledge of important subjects from lobbyists.  This is a dangerous way to make policy.  A little learning is a dangerous basis for policymaking especially if its source is a combination of dogma and one or more propagandists, or lobbyists as Wilkes politely calls them.
  • The Treasury has abolished the use of money as a store of value or as a unit of exchange.  Thus unspent money cannot be saved for use next year but disappears at the end of the financial year unless spent.  And money assigned to one department  for one purpose cannot be used for another purpose let alone used by another department who might achieve that purpose better.  This creates bizarre incentives.
  • The heart of government regularly trades policy in a way for which is often despised by others, such as the American Congress, Senate and White House.  Mr Wilkes proudly records having traded a regulatory issue about taxis for an unrelated benefit concerning oil from the tar sands of Alberta.
Through 'Roads to Ruin', the Cass Business School report for Airmic and our extension of that research, 'Deconstructing failure', we have identified a series of behavioural and organisational risks that apply to all organisations run by humans, but our sample consisted in the main of commercial organisations.  How do these apply to Government?

If Mr Wilkes' observation of his time in Government is a fair view, we can see many of these potentially catastrophic risks manifested in his snapshot, for example risks from:-
  •  A lack of effective overall leadership
  • A complex and ungoverned structure with a lack of join-up across the whole
  • Incentives that drive perverse, potentially dangerous or wasteful behaviour
  • A lack of critical skills and knowledge among leaders who need them
  • A culture of internecine strife that stifles internal communication and learning from mistakes
  • A series of dominant leaders whose characters and behaviour discourage co-operation
  • The consequent dysfunctionality
  • Blindness to the risks inherent in such a system, such as the risks from selective briefing by protagonists as opposed to systematic education by disinterested professionals and many more
Unfortunately, risks such as these remain unrecognised, let alone managed, in the Civil Service.  This is made worse because the Civil Service resolutely resists revising its bible on risk management the Orange Book to take account the recently recognised class of 'behavioural' and 'organisational' risks.

And as 'The Blunders of our Governments' by Professors King and Crewe so dismally illustrates, these potentially lethal risks regularly materialise to lose huge amounts of taxpayers' money.

Anthony Fitzsimmons
Reputability LLP
London
www.reputability.co.uk

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