texas_chainsawCHANGE DRIVEN BY DOGMA AND INEXPERIENCE USUALLY LEADS TO DISASTER
Change obsessed zealots are a menace to society
Rational approaches to managing change
The world we live in is complex and ever-changing. Economies are driven by a myriad of impulses, most of which are the result of human sentiments and actions. This makes them difficult to predict and manage. The same applies to industries and large organisations.
The best ways of proceeding when seeking to influence the direction and future success of large and complex human systems is to move forward in an exploratory way; avoiding sudden and jerky change; keeping in place that which works well and only seeking to change that which is manifestly dysfunctional.
Successful innovation is also an incremental process, building on known success and adding increments of invention and improvement. That is the way in which successful car-maker BMW has built successive generations of beautifully designed road vehicles, each new model preserving the virtues of its predecessors and adding new features as evolving technologies allow.
It is very, very seldom that large and complex organisations benefit from top-down driven "revolutions". When they are imposed by egocentric top managers, distant bureaucrats or political zealots, the results are often disastrous. There is a litany of failures ranging from the disastrous 1950's British Groundnut Scheme, which wasted hundreds of millions and produced few nuts; through to Enron, Marconi and AOL/Time Warner, which at the time were heralded as the next big thing by those who make a living out of pushing the new. Authors such as Tom Peters and business professors such as Gary Hamel have made a living from preaching revolution in business. Hamel wrote passionately about the "grey-haired revolutionary" that was going to change for ever the way we do business. His chosen exemplar.... Enron.
Business guru Henry Mintzberg, who has taken the time and trouble to closely observe organisations and their leaders, concluded that the frantic pursuit of transformation and the new leads mainly to anarchy and chaos. Instead, he observed that the most effective form of strategic leadership was what he termed "Managing Quietly":
"Quiet managing is about infusion, change that seeps in slowly, profoundly. Rather than having change thrust upon them in dramatic, superficial episodes, everyone takes responsibility for making sure that serious changes take hold. This does not mean changing everything all the time - which is another way of saying anarchy. It means always changing some things while holding most others steady. Call this natural continuous improvement, if you like. The trick, of course, is to know what to change when. And to achieve that there is no substitute for a leadership with an intimate understanding of the organisation working with a workforce that is respected and trusted. That way, when people leave, including the leaders, progress continues."
The key point made by Mintzberg is that those who aspire to bring change and improvement to large organisations of any kind would do well to understand the organisation, what it does well, what its values are, what people will tolerate or reject and what needs to be changed or preserved before they set about ripping into its fabric.
Mayhem on a grand scale – the "marketisation" of Russia
Examples of failure as a result of violently imposed change are manifold. The imposition of free-market capitalism on Russia after the collapse of the Soviet Union was brutal and sudden. The old system, although grossly inefficient, creaking and archaic, at least provided public services of a sort to the Russian public. After the IMF imposed market fundamentalist changes, it collapsed dramatically, leaving the ordinary person exposed to huge hardship combined with poverty. The Russian economy was ripped apart by "oligarchs", who converted the state into a shambolic kleptocracy. The opportunity for Russia to evolve into a democratic social market state was missed and the increasingly autocratic government of Vladimir Putin is a direct result of the failure to manage progressive change. Such was the chaos created by zealous free- marketeers that the bulk of the Russian public was relieved to accept the certainty of autocracy.
And violent top-down change threatens the UK National Health Service...
On a smaller scale, but very threatening, is the revolution in the UK healthcare system being driven by health minister Andrew Lansley, who is hell-bent on tearing the current organisation apart and imposing a radically decentralised and fragmented system which places the onus for most health spending on consortia of general practitioners. A side issue, but also very threatening, is Lansley's apparent intent to allow the private healthcare industry into public health on an unprecedented scale
Lansley's reasons for taking radical action appear to be driven by dogma rather than necessity. The National Health Service in its current form satisfies over 90% of its patients, and delivers good public health outcomes at a cost that matches the best – and about half that of the US system, which delivers far worse public health outcomes as measured by life expectancy, infant mortality and other crucial measures; whilst denying some 50 million Americans the security of universal healthcare.
The NHS is not in crisis. After being left in a dreadful state by the Thatcher administration, its performance has steadily improved, supported by increases in spending to the European average. But it is under pressure to reduce costs.
There is no doubt that many improvements can be made in service quality and efficiency, but they can best be achieved by progressive and incremental programmes conducted by people who understand how the healthcare system works. The essence of the system is its ability to deliver reliable and high quality healthcare on a massive scale, day in, day out – and to respond progressively to changes in healthcare solutions and population demography. Tearing the current organisation up by the roots is exactly the opposite of a sensible strategy for change and improvement.
Lansley has had a close relationship with the private healthcare system. But he has no track record at all in leading change, having been a relatively junior civil servant, a political researcher and a politician. He brushes aside the concerns of the many who do understand healthcare, having a predilection to talk over questioners and raise his voice if challenged.
Readers are invited to keep an eye on the outcomes of this apparently wild experiment. Will Lansley drive through the changes, or will he be reined in by public backlash and saner counsel? Will he survive? What will be the outcomes of his changes if he persists?
