Just as we have developed methods, styles and habits of thinking so also have we developed habits of organising. On the whole these are pretty good. You can pick up the telephone in London and within ten seconds be speaking to a particular person in Australia. A multi-national company like IBM operates with a high degree of efficiency. Food distribution in the developed countries is reasonably effective. Looking out over a large city like London or New York it is possible to marvel that every habitation is supplied with water that is drinkable and with a sewage system. Much that we take for granted shows evidence of powerful organising habits. Yet we can still look at some of these habits and wonder whether they do not contain structural inefficiencies.
It may be that our basic concepts of employment, work and jobs need changing. That aspect will be discussed later. For the moment we can consider how we attempt to put the right person into the right job. We have exams at school, on leaving school and again at university level. But we are not quite decided whether their purpose is to encourage the pupil to work, to test the amount of knowledge imbibed or, repeatedly, to test innate intelligence. It usually turns out that the subject-matter taught has very little to do with the requirements of any job – outside specialised vocational training as in medicine. The idea is that the trained mind with a broad background and a habit of study has a general potential that can be applied to any situation. Unfortunately the selection process, whether by aptitude tests or by multiple choice exam or by traditional essay type exam, depends very heavily on academic ability. Yet for many jobs personality, drive and the ability to get on with people are much more important. We sometimes seek to assess these at a brief interview or with a battery of psychological tests. We make virtually no effort to develop these aspects or to monitor their development at an early age. We operate education as a rather elaborate and drawn out selection process that uses a practical – but largely irrelevant – basis for the selection. If we look at job skills, life skills and culture skills we find that the emphasis is on the latter.
It is already possible to design people-proof jobs that will not depend on the ability of whomsoever may fill them. But it must always be better to design jobs around clusters of abilities and motivations and then to find people who would enjoy such jobs. There is a world of difference between a manager who enjoys managing and one who is only there for the money and the status.
In order to get more money and more status a person often has to be promoted away from the job he enjoys doing and is good at: the scientist away from the laboratory; the teacher away from the classroom; the nurse away from the ward; the sales manager away from his sales team. The natural progression is expected. We could devise alternative systems without too much difficulty.
It may be that it is too much to expect one person to have all the necessary skills for a job. It may be that we shall have to fill some jobs with a team of two: one of them might have the required people-skills and the other the administrative skills. Perhaps the team could work permanently together as a double act. Many successful enterprises have, behind the scenes, just such a team of entrepreneur and accountant.
We can state Catch-24: the qualities required to reach a position are not the ones required in that position. Or conversely: in order to reach a position a person has to be devoid of the qualities required in that position. In the first instance we can see that a politician may have a great skill for getting elected and fighting elections but no skill for government. In the second instance a chief executive might have to be something of an entrepreneur and risk-taker but such qualities in a middle manager might block promotion. A series of selection gates, each of which is quite appropriate to its own level, may weed out talents which are required at a higher level. In most countries today the most able people probably do not go into politics because although they may possess the required governing skills they do not possess the robustness necessary for political survival.
The pressures of competition mean that most people are considerably over-qualified, from an academic point of view, for the posts they take up. In the US over the period 1976 to 1985 it is estimated that 10.4 million graduates will compete for the 7.7 million jobs for which a degree is normally required. This availability will simply mean that jobs which hitherto did not need a degree qualification will suddenly be found to require one. And so the escalation will continue with a larger and larger fraction of life being taken up with the preliminaries to a selection test.
Knowledge is increasing at an explosive rate and in order to keep up with knowledge in a particular field a specialist is having to specialise in a smaller and smaller area. And yet society needs generalists who can take a broad integrated view. We still have not solved the dilemma of specialists and generalists. What we tend to do is to employ worn out specialists, who can no longer keep up with their field, as generalists. But the general view is itself a speciality that should be treated as such with a background and training in this area.
The problem is that the world does need generalists but at any particular moment it makes more sense to appoint a specialist. This is a particular expression of Catch-23 which will be met again later. Once you have defined the problem or focused on the university department then you are better off with a specialist. A generalist is only a transition state: a house is some time a-building but it is the final house we live in not the state of being built. I see no reason why we should not create a definite profession of generalists rather than regard them as failed specialists.
Nor have we solved the pigeonhole problem. Something that is everyone’s business ends up by being no one’s business. Departments, faculties, classifications are key elements in our organising method. When I first asked the Schools Council for some funds for field officers to respond to the demand from schools who were taking up the teaching of thinking as a curriculum subject, I was told that it would be difficult for the matter to be considered because whilst there were subject committees for Mathematics, Geography and all the traditional subjects there was no such committee for ‘thinking’.
In administration the person who does not fall neatly into one category or who falls into more than one category causes endless complications. When someone wanted to leap a bus across the river Avon in the summer of 1978 the authorities had to grant the bus a temporary licence as a ‘pleasure craft’ in order to keep their categories clear.
In medicine we have doctors who are fully trained to know everything there is to know about all diseases. Yet the bulk of a doctor’s work could be done by a new type of doctor who was trained to deal competently with the five most common calls on a doctor’s time (probably cardiovascular troubles including hypertension; depression; peptic ulceration; minor injuries; and chest complaints). The training need last no more than two years at most and could probably be done in one. But the idea would be resisted by the established categories.
Does a government department or university faculty ever vote itself out of existence in recognition of its obsolescence?
An executive is surrounded by matters that require urgent attention. There are problems to be solved and decisions to be made. He never runs out of urgent things to do because he can always think of other urgent matters that require his attention. If he does not have sufficient urgent matters he can always go into each matter in greater detail, expanding his work to fill the time allotted to it in classic Parkinson’s Law fashion. When he is finished with the urgent matters then he can turn his attention to the important ones but – as we have seen – he is never finished with the urgent matters. If your tyre has a puncture you have to deal with it because it is urgent. The matter of deciding where you want to go or the route to take is more important but urgent matters have to take precedence.
An executive is too busy keeping things going and solving urgent problems to have time to look for opportunities. He knows that it is essential to look for opportunities if his business is to survive but it never makes sense to do so at any particular moment. So we come to Catch-23: it is essential that something gets done but it never makes sense to do it at any particular moment. This is in the same general area as ‘who will bell the cat?’
There are no vacuums in an executive’s time or in his budget. Everything is allocated. In order to try something new he has to displace something else: he has to make time and find the funds. This general problem of innovation applies to most areas. The school curriculum has no gaps. In order to try something new the school has to displace effort and time from something else. But why divert effort that is usefully employed to something that is at best speculative? This is a basic weakness in our organising for innovation and it cannot be overcome by exhortation. We need a structure change that allows a discretionary budget of time and money that is earmarked for innovatory spending.
We know from experience that change will happen anyway. The eccentric inventor will fight his way through. If the mousetrap is worthwhile, the world will beat a path to the door of the inventor. We spend quite a lot of money on research and most organisations have R & D departments. But research is not the same as change or innovation. We never set up, within organisations, formal departments of change. We dare not do so because that would imply that we were not satisfied with the perfection of the status quo.
In fact in most organisations innovation is discouraged by the structure. A failed innovation constitutes a bad mistake that blights the subsequent career of whoever was foolish enough to attempt it. Even if the innovation succeeds the innovator runs the risk of being labelled an ‘ideas man’ and hence not sound enough to run a department.
We believe that evolution should be gradual, unconscious and forced upon us. Anything else is too risky and liable to lead to mistakes and confusion. Yet the proper management of change does not mean jumping at every new fad or overloading an organisation with change. Change can be managed sensibly like anything else. But we must regard it as an integral part of an organisation’s function, not as something that is forced upon it.
A major defect is a lack of suitable test-beds. There are a few innovations that can be tested in a laboratory or a computer simulation. A very few (in the field of finance or cost saving) can even be proved with a pencil and paper. But most innovations – and especially those involving people and methods – need to be tried out. Unfortunately even the special circumstance and excitement of trying them out can give false results (the well-known Hawthorne effect) and traditional test-bed areas (like the Tyne-Tees television area for new product testing) soon become atypical. The problem is a major one because it is unrealistic to expect an organisation to embark on a costly change which might turn out to be a disaster. We need to spend a lot more thinking on the development of test-bed structures. For example how could a government try out the suitability of a new type of taxation? Perhaps a few people would have to be given the option of paying taxes in a novel way. No doubt this would cause political trouble. For example a corporation might be asked to pay taxes in proportion to its total wages bill without person-by-person allocation.
Rather than wait for change to happen spontaneously and sporadically perhaps we ought to make more effort to focus attention on areas that need improvement. We could prepare and fund innovation briefs and tenders could be invited for the assignment. The direction of change – for example towards simplicity or greater human value – can be clearly defined.
We need to pay a great deal more attention to the handling of new ideas. There are problems. For example we could look at the ‘take-off’ effect and the ‘wonder-woman’ effect.
A plane taxies along the runway picking up enough speed to take off. Until take-off actually occurs the plane is a danger to itself and to its surroundings. Many schemes may be fine once they have reached a critical size or acquired momentum or been in operation long enough. But before that ‘take-off’ point is reached they may be highly dangerous. For example a more lenient attitude towards criminals might be effective in the long run but in the meantime it could cause trouble. A changeover from direct taxation to indirect taxation might be beneficial in the long run but the immediate rise in prices might be inflationary.
In planning any change we need to look not only at the final result but at the transition stage. Indeed the transition stage is even more important than the final result for unless the transition stage is possible the final result is merely hypothetical. We so often plan for utopias but forget to specify the bus that is going to get us there. This important matter of the transition stage will be discussed at greater length later in the book.
The wonder-woman effect refers to idealised schemes that are attractive in themselves but will only work if the people involved in them are skilled, perceptive, dedicated, compassionate and exceptional. It seems, for example, that progressive teaching methods work better than the traditional ones – provided they are used by good teachers. Bad, or uninterested, teachers achieve better results with traditional methods. The dilemma is a real one: is innovation withheld because some people are incapable of carrying it through or is it put through in the knowledge that some will be better off and some worse off? In theory the answer is to design as much for use as for effect.
Another difficulty is that of intended effect. For example in classic Keynesian theory if there is a recession then the government ‘primes’ the pump by increasing public work expenditure and reducing tax in an effort to encourage consumption by putting more money into the consumer pocket. This part works well enough but, unfortunately, the consumer still has the final say. He may choose to save the money and we know that in the recent bout of inflation and increasing unemployment saving rates in countries like Australia increased considerably. Or he may choose to spend it not on locally manufactured goods but on imports and so the rise in consuming power simply sucks in more imports and does not reflate the economy.
There are also schemes which work well provided everyone else plays the game and does the same thing. Disarmament is an obvious example. Similarly, if one union restricts its wage claim and others do not then it is likely to be left behind in a position from which it can never catch up.
A major problem is that of foreseeing the effect of action which is temporarily beneficial but the long term effects of which are not clear. The Laffer curve in taxation is one example. Squeezing the productive sector of the economy may work very well right up to the point where it fails and failure may take a very long time to be reversed. If investment has been discouraged then low productivity produces low profits and high prices and the money and will to invest are not there. It may be that a particular course of action is not in itself harmful but brings about a state of vulnerability. For example a single source supplier for an industry is not in itself harmful – in fact it is probably more efficient – but it increases vulnerability.
In general we need much more thorough systems thinking rather than ad hoc solutions and ad hoc rescue attempts when they go wrong. The shift is needed from the concept that we are fundamentally in a stable world in which things need adjustment now and then, to the concept that we are in a changing world and that the design of ideas and action should be appropriate to that.
We can look at several different sorts of continuity. At any moment in history we strive to make the best of what is available at the time. So we may set up structures which are useful at the time but outrun their usefulness and become obsolete and restrictive later. We rarely build-in evolutionary processes and we have no method of making thriving institutions obsolete. For that matter we have no method of removing obsolete laws unless a time limit has been put on them in the first place. In many cases the cost of change is enormous since it consists in unlocking the interlocking of the various ingredients.
Then there is the continuity of momentum like a billiard ball rolling in a certain direction. There is no structural bar to change – as there was in the interlocking situation – only the momentum of habit. There is need to apply some pressure and make a change effort but the change itself is surprisingly easy. I suspect changes in our work habits would be like this.
There is another type of continuity like a rat running down a drain-pipe. The rat is constantly looking for an avenue of escape. In this sort of continuity there is pressure for change but it awaits the development of an avenue or concept that allows a new direction. There is no resistance to change but change will not take place until the path is offered. To some extent changes in education might be of this sort although there is a considerable degree of interlocking continuity in this area. The Open University in the UK is a good example of this sort of avenue opening. Change through ‘by-pass’ falls into the same general area: instead of unlocking and altering the main structure, set up a new by-pass channel.
In many situations the problem of the ‘apostolic succession’ is important. The first pope and the first bishops in the Catholic Church were the apostles and since they then appointed the next lot, who in turn appointed the next lot, the succession was maintained. In many organisations the new candidates are selected and appointed by the existing hierarchy. This is of excellent value where the idiom is dynamic and effective but it is, equally, harmful where the idiom is obsolete. Where an organisation is crying out for a new type of man the apostolic succession ensures that he will not be appointed.
The ‘ratchet-effect’ refers especially to social expectations. A new service is very quickly taken for granted and becomes the baseline from which further progress is expected. A wheel with a ratchet attached can only move forward not backward. No matter how small the forward movement may be at any moment it is preserved by the ratchet. Once satisfied, desires and expectations are no longer desirable but routine and necessary. In other words they have lost their value in the eyes of those who wanted them but their cost remains exactly the same as before to those providing them. The ratchet effect is the opposite of zero-base budgeting in which each item has to be justified anew or dropped. Measures, like the Employment Acts in the UK, that protect each stage of development inevitably give rise to the ratchet effect since flexibility is lost. We need to devise structures that allow flexibility in both directions. It is not easy because many structures in society act as ‘rectifiers’ in the electronic sense: they change any fluctuation into an upward one. A rise in wages leads to an increase in commitments and hire-purchase undertakings all of which cannot be abandoned. It is in the area of complexity that the ratchet effect is most dangerous. Things become more and more complex with each little addition (as with the tax laws) and there is little attempt to make them more simple. The reason is that simplification means alteration and even the smallest alteration puts at a disadvantage someone who is playing the system exactly as it is. We need, however, to make simplification a direct responsibility of the change department that was mentioned earlier. It is incredible that no one actually has any responsibility for making things simpler.
We badly need new thinking here. Whether it is jobs and houses or food stores and starving people, we face two fundamental problems: there is not enough to go round so who gets it; what is needed and who needs it are in different places. The market economy method uses demand and supply linked by freely fluctuating price as the distribution mechanism: it will be considered later. Then there is central planning and direction and finally there is an assisted market economy which uses regulation and subsidies to supplement price-induced flows.
Where there is not enough to go round we have several options of distribution. The price method has been mentioned. There is a privilege method whereby some people – as with party officials in the USSR – get access to goods before others. The privilege may be historic or it may be conferred; or it may be earned: for example when war veterans have privileged access to education. There is straightforward rationing or rationing by time and convenience. In the Soviet Union some consumer goods are in such short supply that there seems to be deliberate rationing by time: you queue up to look at the goods; then queue up again to pay for them; then queue up for a third time to exchange your cash receipt for the items. We do not make too much use of the lottery system although it would appear to offer some social advantages in terms of political acceptability – but not in terms of efficiency. Rationing by need or distributing where it will do most good are areas that need a great deal more attention.
One of the great structural problems is dealing with those who require special treatment. For some reason, be it illness or inadequacy, they are unable to keep up. Should there just be a safety net, should society be held back to decrease the pressure, or should they be treated in a distinct way? In short do such people need crutches in order to operate in the ordinary world or do they need a world in which there are no stairs? In business there is the classic 80/20 situation in which what takes up 80 per cent of the time actually produces only 20 per cent of the profits and the other way round. In society a small number of members may take up a large amount of effort and cost. But the purpose of society is not profit. Nevertheless the problem of distribution of cost and effort remains.
With increasing pressure on taxes, in addition to their reaching saturation point it will no longer be open to government to encompass all demands by raising more money. Cost cutting and increased efficiency should make a big difference initially but this will reach a floor. This brings up the problem of priorities and the choice between priorities. Do we have the right structures to choose between priorities? Can we solve the problem just by cutting back all round? Is it good enough for each interest group and government department to jockey for its own priorities? Should £5 million be spent on: a new acute hospital; an old persons’ home; a fighter plane; a local government administration hall; a new roadway segment; a sports centre; cancer research; job protection in an ailing industry; airport enlargement? Who is to decide, on what basis and through what structures? Are lobbying and mobilised protest better than central planning? Should there be fixed ratios of expenditure with each department required to work within its own envelope? This is not easy because in an area like education about 80 per cent of its costs are people costs and if wages rise then its allocation may need to rise if the non-people expenditure is not to be squeezed out. Departments that can shed people in favour of hardware would benefit.
The sheer effectiveness of our communications systems creates problems. Within moments all banks can think the same way and transfer money, so creating wild swings in the foreign exchange market. Any indication of mood change somewhere is so widely reported that it can become an investment stampede or panic. Everyone knows that things will move quickly so action has to be taken as quickly as possible. The general problem of the self-fulfilling prophecy arises: if enough people think that something is going to happen – for example collapse of the dollar – then that thinking can actually cause it to happen.
Mass communication through television means that every happening and every remark of a politician are instantly communicated. This means that there is a lot of politics of gesture and the right noise. It also means that there is a great deal of what was referred to as CYA: that is to say the avoidance of decisions which can lead to criticism. The existence of television means that politicians have to appear on television and elections are won and lost on profiles and TV personalities.
Issues are simplified and explained in mass-think terms (usually under-rating the intelligence of the viewer) and so the immediate, the concrete and the popular take precedence over the more farsighted and temporarily unpopular policies. Ideas are discussed in the necessarily superficial idiom of television and mass circulation press media. The paradox may be that democracy cannot work now that technology has provided the perfect technical means for it to work as it has always been supposed to work. Perhaps government by the people can only work as an ideal but not as a fact.
Other problems are created by the technology of communication. The telephone and the car break up communities by making it possible for people to have dispersed communities of friends they choose and like. The concept of a local community where you had to accept everyone who was around is lost.
Our insurance mechanisms are remarkably effective at dealing with a particular type of risk: the occasional disaster the cost of which is spread amongst all those vulnerable to this type of disaster. We justify profits on the basis of the capital risk involved in ventures. Large organisations and governments can simply absorb the cost of failure through reserves or by distributing it amongst all their other activities.
Perhaps we need to pay rather more attention to the structures available for handling risk. In particular we need to consider the sort of risks that are quite likely to happen rather than the exceptional ones that can be handled by ordinary insurance. Life insurance is insurance against an exceptionally early death and otherwise an organised savings plan for death at a more usual age. Losing a job, getting a divorce, having to move house are all relatively common. From the community’s point of view further education is a risk in as much as the money invested on behalf of a person may be wasted. The fluid ratios between investment, benefits, risk and reward need to be considered carefully. We cannot cut down on the reward and yet expect to enjoy the benefits, such as increased employment, of risk taking. Perhaps we could set up concepts and structures where risks as such could be bought either directly or through government guaranteed risk bonds.
We have to consider what happens in a failed venture. Is it like a stillborn child where all is lost, or is it like an unsuccessful fishing trip where the potential remains intact for use on another day? We are probably too inclined to treat venture risks in the former manner. Perhaps we also need a nursery attitude towards ventures with a coddling attitude of tax advantages and management service support.
We can minimise risks by pre-testing and by planning but we should not imagine that we can avoid all risks by never undertaking ventures. In a changing world to do nothing may be the biggest risk of all.
People may be more willing to re-train or change jobs if the risk element is reduced. Moving house to a new district is less of a risk if there is the possibility of returning to the original house if it does not work out. As in trial marriages the argument is that no serious effort will be made if the fall-back position is guaranteed but, conversely, no change at all may be attempted unless the risk is reduced. Guaranteed termination-of-employment payments (not redundancy payments) would ease moving from one job to another – perhaps a forced saving on the part of the worker could be matched by the employer.
We need to pay more attention to the structure of protest whether it is protest by strike or protest by pressure groups. The effect of the whole structure of the political system will be considered in a later chapter but protest also exists in its own right. Creations such as the Ombudsman are a recognition that systems are not perfect. Can protest be institutionalised without losing its vitality? Perhaps there are people who need a mission and a dedication. Perhaps there are people who need an ego platform in a sort of spiritual entrepreneurship. After all many excellent volunteer organisations work on this basis. The motivation behind a protest has nothing to do with its social validity.
We may have to devise structures which will allow protest its useful function and yet avoid escalating disruption – which will inevitably happen if protest finds it harder and harder to gain attention through the media. Tied in with this general problem is that of the attention paid to minority interests. Can we operate a market economy in attention, or do we run risks with an inflationary price structure? The terrorist hijacking of aircraft is to gain attention, so was the self-immolation of the Czech student who poured petrol over himself. There is a distinction between a consumer movement with a natural constituency (like the campaign for real ale in the UK and the coffee boycott in the USA) and a protest that has first to gain attention in order to gain followers (like the protest at seal hunting). Should we have daily ten-minute protest slots on television just after the news?
We know very well that the behaviour of a committee is very different from that of a single decision-maker. It tends to be more balanced and it tends to be more negative. It tends to construct a compromise rather than a bold integral design. It tends to be conservative and repetitive or self-consciously innovative. All these aspects arise from the nature of the structure. We use committees as a protection against dictatorship and decisive mistakes, as a CYA posture. We are not convinced that battles in wartime could be won by committees of generals. We often use committees to make the strategic decisions and then delegate an individual to carry it through and choose the tactics. Perhaps we could reverse that and have individual decisions modified by advisory committees. There is room for new thinking here. Perhaps committees should be hired for the occasion and not be an integral part of the organisation – so separating the judgement element from the vested interest element.
With bureaucracies we need to look at their growth, their purpose, the lines of communication and the responsibility at each level. We badly need to develop a measure of effectiveness corresponding to productivity in an industrial organisation. We need to introduce flexibility and the ability to deal with exceptions. We need to build in motivation and efforts towards change and simplification. Instead of assuming that the purpose of an organisation is to preserve its status quo we should assume that the purpose is to alter its status quo. Suppose we decreed that any civil servant who could eliminate his own job, to the satisfaction of a panel and with the test of time, would be entitled to full pay – as a pension – thereafter. We have the morality of hard work but not the morality of effectiveness. You please God by working hard but not, apparently, by organising your work so that you produce the same effect (or better) by working less hard.
We may need to change our concepts of hierarchy and promotion. There is no reason why authority hierarchy and decision hierarchy should go together. In Japanese industry it is said that decisions are made on the shop-floor and then passed up to the authority hierarchy for proclamation. Is it the person or the position that matters most? Should we create jobs for leaders or expect the job to make leaders out of people who are not?
We need to do a lot of thinking about the overlapping of different hierarchies, for example unions, management, and investors. Should they be integrated or should they operate in a state of dynamic interaction – and if so is the dialectic conflict the only possible state of interaction?
I have touched in this chapter on a few of the basic structural problems that face society. Later I will deal with more specific areas like politics, education, the market economy and so on. There are many more areas I could have touched on and much more detail I could have gone into. I have not offered easy solutions or suggested changes. In most cases I have simply indicated that there is much thinking to be done or a dilemma to be handled. This is not very helpful or constructive but I do not feel it to be my purpose to offer instant solutions to everything. By thinking around each problem I could certainly come up with suggestions – but so could many other people. Some time that work will have to be done, perhaps by focused groups that are set up specifically to consider these areas that demand thinking. My purpose in the chapter was to show how our future is shaped and sometimes constrained by certain organising habits that we have acquired. Many of these are excellent. Many we consider excellent only because our imagination has not yet thought of something better. Many are imperfect, restrictive or even dangerous. The basic message is that we do need to think about these things and in a positive way. We should not throw up our collective hands and say that they are too complicated to think about or that any designed solutions must inevitably be worse. Above all we should look at the purpose of an organisation not as conservative stability but as dynamic change. Change does not mean the revolutionary swapping of one system for a supposedly better one but building on strengths, changing concepts where necessary, and introducing new concepts in parallel. The combination of constructive thinking habits and something to think about should allow our intelligence to do well for us.