This post follows yesterday’s theme. Ed Balls, Secretary of State for Children, Schools and Families, commanded that Ofsted deliver a clear answer on the matter of accountability in its report. That may perhaps have led Ofsted to finger Haringey’s department head Sharon Shoesmith so prominently and publicly, to the exclusion of other players. Appearing to lend weight to this view, Mr Justice Foskett’s High Court decision against Shoesmith could equally reinforce the view that leadership is entirely a function and property of one individual and the position they hold, rather than (or as well as) a function and property of the organisation and how it works interdependently. In large and complex systems, responsibility is diffused throughout the structure. It is held jointly with others and depends on others’ contribution, so accountability might reasonably be deemed to have a plural quality.
Factors beyond any one jobholder’s remit and skills have a bearing on leadership performance. The system shapes leadership as much as leadership shapes the system. A case in point is the government’s requirement that local authorities adopt its much criticised national computer system for managing social workers’ caseload. Another is the child protection partnership that operates with schools, doctors and the police. In the Baby P case, the police incorrectly claimed that mother and child were living alone. The doctor incorrectly said that there were no suspicious injuries. The lawyer incorrectly said that there was insufficient evidence for a Care Order. Shoesmith wasn’t responsible for all of these, so she could hardly be held accountable for their performance failures. But if she can’t, who can? Judge Foskett could see a problem.
In his ruling, Foskett said “… a substantial factor in the Claimant being replaced by the Secretary of State was because, as head of the department that was assessed to be inadequate, she was held “accountable”. To that extent, the normal conceptions of “fairness” to the individual do not really apply. There needs to be a debate, which one case decided on its own facts cannot possibly resolve, about whether individual responsibility in this way for a collective failure is what is to be expected of someone who achieves the position of DCS [director of children’s services] or its equivalent and, of course, whether it justifies summary dismissal. … It is to be noted that the Dismissal Appeal Panel at Haringey gave as one of its reasons for upholding the decision to dismiss the Claimant “that the Director of Children’s Services was personally accountable for any failings identified in the Service” by the Ofsted report. I have not heard full argument about what “accountable” means in the legal context … and the view I express about it is necessarily tentative. However, whilst there can be no doubt that the word is generally understood simply to mean the same as “answerable” (in other words, a person who is “accountable” is the person who must answer questions about why something did or did not happen), it would be a very significant step to say that “accountability” means liability for summary dismissal without compensation. That seems to me, potentially at any rate, to open up some very large employment law issues aside the obvious comment that few people would want to take on the role of DCS in those circumstances.”
The accountability issues raised reach beyond Foskett’s “employment law issues”. They include the need to embrace a systems perspective. There is work still to be done here; this includes challenging the popular notion that is it always individuals who should be held accountable; what about teams and other agency partners? Should such accountability be seen as something that is invoked only after failure? What about a suitable and ongoing accountability process being openly communicated before major change is required (such as improving child protection in a council)? What should that accountability process look like, whether singular or plural? Which party should initiate discussion about it? Who would be capable of conducting it? (For a fuller discussion, see Chapter 14: ‘Leadership and Accountability’ in The Search for Leadership.)
Tuesday, 4 May 2010
Monday, 3 May 2010
Baby Peter Connelly’s legacy (1): What does strategic leadership look like?
In this case (see the previous post) one of Ofsted’s criticisms was that Sharon Shoesmith had not displayed strategic leadership. It is a charge that can be laid at many a senior manager’s door. Judging by the behaviour of Gordon Brown, notoriously embroiled in detail, it is frequently true of senior politicians seeking short-term ‘hits’. While there is no single and agreed definition of ‘strategic leadership’, three key ingredients come to mind.
First, leaders need a systemic appreciation of their organisation (and what systemic leadership failure looks like, since that is what happened in Haringey), and how their leadership is shaped by that system as well as how their leadership can help shape that system.
Secondly, they need to know how to spread the activity of leadership widely and down the managerial structure in a carefully considered way that takes account of performance management and accountability design issues.
Thirdly, leaders need a mental model of their three roles and have a means of managing the time and commitment given to each. The roles are: 1 delivering today, 2 safeguarding tomorrow (via improvement and change), and 3 providing supervisory oversight to other managers actively engaged with level 2. This third aspect of the role is probably the lest understood and comprises the elements below.
1. provides a context, reason and challenge.
2. gives permission for the process and events to happen.
3. provides funds, time and other resources.
4. defines a standard of what success or ‘good enough’ looks like.
5. ensures readiness for change: a point between excessive stability and anarchy. (In complexity theory this point is known as the edge of chaos. Managers who have grown up believing that their job is always to seek greater order by exercising control may find this expression intimidating.)
6. disturbs or shakes up the status quo for relevant aspects of how the organisation works and moves forward, making clear that the status quo is not an option. In parallel, it maintains stability of appropriate business interests (e.g. safeguarding customers’ confidence during the change).
7. loosens the system, to weaken strictly hierarchical management of change.
8. licenses more widely distributed power for managers to engage in system-wide improvement activity.
9. gives managers a collective and cross-departmental identity.
10. makes people’s fate rely on inter-dependence, which leads to cooperation, warmth in relationships, and people taking a fair share of responsibility.
11. makes clear how the relevant people will be held to account, individually and collectively.
(This is explained more fully on pp 217-219 of The Search for Leadership.)
This is a tough balancing act, one which keeps the leader in touch with key current operational detail and today’s risks without being swamped by it to the exclusion of their strategic leadership role.
First, leaders need a systemic appreciation of their organisation (and what systemic leadership failure looks like, since that is what happened in Haringey), and how their leadership is shaped by that system as well as how their leadership can help shape that system.
Secondly, they need to know how to spread the activity of leadership widely and down the managerial structure in a carefully considered way that takes account of performance management and accountability design issues.
Thirdly, leaders need a mental model of their three roles and have a means of managing the time and commitment given to each. The roles are: 1 delivering today, 2 safeguarding tomorrow (via improvement and change), and 3 providing supervisory oversight to other managers actively engaged with level 2. This third aspect of the role is probably the lest understood and comprises the elements below.
1. provides a context, reason and challenge.
2. gives permission for the process and events to happen.
3. provides funds, time and other resources.
4. defines a standard of what success or ‘good enough’ looks like.
5. ensures readiness for change: a point between excessive stability and anarchy. (In complexity theory this point is known as the edge of chaos. Managers who have grown up believing that their job is always to seek greater order by exercising control may find this expression intimidating.)
6. disturbs or shakes up the status quo for relevant aspects of how the organisation works and moves forward, making clear that the status quo is not an option. In parallel, it maintains stability of appropriate business interests (e.g. safeguarding customers’ confidence during the change).
7. loosens the system, to weaken strictly hierarchical management of change.
8. licenses more widely distributed power for managers to engage in system-wide improvement activity.
9. gives managers a collective and cross-departmental identity.
10. makes people’s fate rely on inter-dependence, which leads to cooperation, warmth in relationships, and people taking a fair share of responsibility.
11. makes clear how the relevant people will be held to account, individually and collectively.
(This is explained more fully on pp 217-219 of The Search for Leadership.)
This is a tough balancing act, one which keeps the leader in touch with key current operational detail and today’s risks without being swamped by it to the exclusion of their strategic leadership role.
Friday, 30 April 2010
Baby Peter Connelly’s legacy
Baby Peter’s tragic death spawned much industry, if not quite an industry. Legal cases are an inevitable element, most recently the verdict of the High Court application for a judicial review by Haringey’s ex-director of children and young persons services, Sharon Shoesmith, into her unceremonious dismissal without compensation.
Mr Justice Foskett’s ruling (against Shoesmith’s appeal) was as disturbing as it was surprising. The judge found much to criticise in the behaviour of Ed Balls, the government’s children’s secretary, who required Haringey Council to dismiss her summarily after withdrawing her powers as a DCS. The judge criticised Christine Gilbert, the head of the inspectorate Ofsted, for mishandling the case by personally and publicly criticising Shoesmith. He criticised Ofsted’s inept handling of its obligation of candour before the court, and he expressed concern over Ofsted’s instruction to delete emails relating to the inspection. He criticised Haringey Council who ultimately isolated Shoesmith to defend its own interests. He even advised Shoesmith that she might have grounds for winning a case against unfair dismissal by Haringey Council at an employment tribunal. Yet, yet, Judge Foskett still found against Shoesmith, on the narrow remit of whether the Ofsted report was erroneous in its findings as a result of political interference by Balls and the Department of Children, Schools and Families, their being unduly pressurised by tabloid media hostility towards Shoesmith.
Ofsted’s investigation had been conducted too hurriedly, the judge claimed. Its report had allegedly been rewritten 17 times to beef it up [though this could indicate thoroughness rather than external political pressure]. Criticism in early versions of others’ responsibility in the case – especially by the police, doctors and lawyers – was said to have been removed from later versions, leaving the council and Shoesmith more exposed. Foskett highlighted evidence showing that the final report was changed “in a way that shifted the responsibility … from a combined failure on the part of members of the council and officers to an entirely managerial failure”. Yet, yet, Foskett concluded that, on balance, and given the evidence he saw, the report’s conclusion was fair. It was not within his remit, he said, to comment on whether a beefed-up report had unfairly strengthened the report’s conclusions. Why not, one might ask? Barry Sheerman MP, who chaired a Commons Select Committee investigation into the affair, was amazed at the judge’s decision. As were many others.
As one troubled commentator expressed it: Shoesmith was ‘guilty of leading Ofsted to give a ‘good’ rating when (previously) inspecting her department by concentrating on the surface appearance, the presentation and the paperwork. That, above all, is her crime in the eyes of politicians and bureaucrats … revealing that a department can get a ‘good’ rating despite the staff shortages and ludicrous case loads. Revealing that all the expensive inspection is no more than a tissue of fabrication and abstraction’. But some might argue that Shoesmith was simply beating Ofsted at its own game, as hundreds of managers have done to gain Investor In People status. We should blame the game and the incentives before the players who get wise to it. No wonder Ofsted would welcome a chance to get its own back. Foskett commented, too lightly, on the public denouncement of Shoesmith by Gilbert, when Ofsted rules require the focus be on the department and not on named individuals. Being married to a government minister may not have helped some people’s perceptions of Gilbert’s leadership of an Ofsted required to be ‘independent’ of government.
Where does that leave matters? Shoesmith will reflect on her loss and consider an appeal or a claim to an employment tribunal (already lodged but stayed pending the outcome of the appeal for a judicial review)? Recall the irony that in 1995 the ‘disgraced’ social worker Lisa Arthurworrey who was involved in Victoria Climbie’s death won a legal case to reclaim her professional standing following her earlier dismissal by Haringey Council. That court decided that the Council’s system had failed her and not the other way round. Shoesmith isn’t finished yet.
The outcome from the application for a judicial review is a loss, not just to Shoesmith, but to all those who hold a systemic perspective of how organisations work. Judge Foskett may have been aware of that himself when he wondered aloud why anyone would now want to become a children’s services director: “The prospect of summary dismissal, with no compensation and a good deal of public opprobrium, is hardly likely to be an inducement for someone thinking of taking the job.” His own decision hasn’t helped matters. Beyond that issue lie some others that need deeper exploration. Key systemic leadership questions that arise from this case are:
1. What does improved strategic leadership look like in senior posts like Shoesmith’s?
2. How can a fair system of accountability operate when the organisation comprises a complex system?
3. How can a fairer system of justice operate for cases of this nature?
4. What could Balls have done other than removing Shoesmith from her position?
Over the next few days we will answer those questions.
Mr Justice Foskett’s ruling (against Shoesmith’s appeal) was as disturbing as it was surprising. The judge found much to criticise in the behaviour of Ed Balls, the government’s children’s secretary, who required Haringey Council to dismiss her summarily after withdrawing her powers as a DCS. The judge criticised Christine Gilbert, the head of the inspectorate Ofsted, for mishandling the case by personally and publicly criticising Shoesmith. He criticised Ofsted’s inept handling of its obligation of candour before the court, and he expressed concern over Ofsted’s instruction to delete emails relating to the inspection. He criticised Haringey Council who ultimately isolated Shoesmith to defend its own interests. He even advised Shoesmith that she might have grounds for winning a case against unfair dismissal by Haringey Council at an employment tribunal. Yet, yet, Judge Foskett still found against Shoesmith, on the narrow remit of whether the Ofsted report was erroneous in its findings as a result of political interference by Balls and the Department of Children, Schools and Families, their being unduly pressurised by tabloid media hostility towards Shoesmith.
Ofsted’s investigation had been conducted too hurriedly, the judge claimed. Its report had allegedly been rewritten 17 times to beef it up [though this could indicate thoroughness rather than external political pressure]. Criticism in early versions of others’ responsibility in the case – especially by the police, doctors and lawyers – was said to have been removed from later versions, leaving the council and Shoesmith more exposed. Foskett highlighted evidence showing that the final report was changed “in a way that shifted the responsibility … from a combined failure on the part of members of the council and officers to an entirely managerial failure”. Yet, yet, Foskett concluded that, on balance, and given the evidence he saw, the report’s conclusion was fair. It was not within his remit, he said, to comment on whether a beefed-up report had unfairly strengthened the report’s conclusions. Why not, one might ask? Barry Sheerman MP, who chaired a Commons Select Committee investigation into the affair, was amazed at the judge’s decision. As were many others.
As one troubled commentator expressed it: Shoesmith was ‘guilty of leading Ofsted to give a ‘good’ rating when (previously) inspecting her department by concentrating on the surface appearance, the presentation and the paperwork. That, above all, is her crime in the eyes of politicians and bureaucrats … revealing that a department can get a ‘good’ rating despite the staff shortages and ludicrous case loads. Revealing that all the expensive inspection is no more than a tissue of fabrication and abstraction’. But some might argue that Shoesmith was simply beating Ofsted at its own game, as hundreds of managers have done to gain Investor In People status. We should blame the game and the incentives before the players who get wise to it. No wonder Ofsted would welcome a chance to get its own back. Foskett commented, too lightly, on the public denouncement of Shoesmith by Gilbert, when Ofsted rules require the focus be on the department and not on named individuals. Being married to a government minister may not have helped some people’s perceptions of Gilbert’s leadership of an Ofsted required to be ‘independent’ of government.
Where does that leave matters? Shoesmith will reflect on her loss and consider an appeal or a claim to an employment tribunal (already lodged but stayed pending the outcome of the appeal for a judicial review)? Recall the irony that in 1995 the ‘disgraced’ social worker Lisa Arthurworrey who was involved in Victoria Climbie’s death won a legal case to reclaim her professional standing following her earlier dismissal by Haringey Council. That court decided that the Council’s system had failed her and not the other way round. Shoesmith isn’t finished yet.
The outcome from the application for a judicial review is a loss, not just to Shoesmith, but to all those who hold a systemic perspective of how organisations work. Judge Foskett may have been aware of that himself when he wondered aloud why anyone would now want to become a children’s services director: “The prospect of summary dismissal, with no compensation and a good deal of public opprobrium, is hardly likely to be an inducement for someone thinking of taking the job.” His own decision hasn’t helped matters. Beyond that issue lie some others that need deeper exploration. Key systemic leadership questions that arise from this case are:
1. What does improved strategic leadership look like in senior posts like Shoesmith’s?
2. How can a fair system of accountability operate when the organisation comprises a complex system?
3. How can a fairer system of justice operate for cases of this nature?
4. What could Balls have done other than removing Shoesmith from her position?
Over the next few days we will answer those questions.
Friday, 23 April 2010
Can we see a clear need for skills?
‘One of the fallacies earnestly and unquestioningly maintained by New Labour is that we live in a primarily individual economy. We don't. To adapt Adam Smith, it's not through the efforts of the individual baker, farmer and consumer that toast, eggs and tea materialise on our tables in the morning - it's through the very visible hand of Tesco, Associated Foods, Nestlé and the utility companies. No organisations, no breakfast. The consequence of living in an organisational economy is that management - the orchestration of collective activity - matters greatly: at least as much as individual ability and skills.’ (Simon Caulkin, The Observer, 10 August 2008) Time and again comes evidence that this lesson has still not been learned, the latest from the National Skills Audit for England 2010. There are two major flaws.
The first is the conflation of too many diverse interests into its aim “to raise UK prosperity and opportunity by improving employment and skills … to benefit individuals, employers, government and society … help the UK become a world class leader in productivity, in employment and in having a fair and inclusive society”. Good stuff, but – leaving aside fairness and inclusivity for the moment – what needs to happen to make people employable is very different from what any particular employer needs to do with people when they are employees. Individuals’ generic skills are more relevant to the former; managing the whole by bridging relationships in the spaces is more relevant to the latter.
Just take a look at the business of the many sector skills councils to see how this confusion traps them into offering employers training services for their (post-engagement) individual employees. There is a risk of seducing employers into thinking that their responsibility to provide training (let alone promote learning in and for the organisation) has been met and that the organisation can be expected to improve as a result. In practice, such skills training will make little difference organisationally because it fails to acknowledge the specific organisational context, and it fails to develop that context and thereby expand the organisation’s capability. It is not just Caulkin’s ‘economy’ that is organisational rather than individual, it is the improvement levers too.
The second problem is one of accurate prediction and its usefulness. However thorough the research, there is limited value in attempting to predict future needs ten years ahead (see report ‘Horizon Scanning and Scenario Building: Scenarios for Skills 2020’). No-one predicted the eruption on Iceland’s Eyjafjallajokull volcano. No one knows how long it will last, whether it will strengthen or weaken, the height of the ash cloud, how badly aircraft engines or holidaying families will be affected, or what this volcano’s stronger twin may do. We literally don’t know which way the wind blows. As our understanding of complexity science improves, we are slowly coming to terms with our humbling inability to make meaningful long-term plans and predictions, and to be able to link cause, effect and action.
The late Russell Ackoff, a systems thinker, identified scenario planning as a management confidence trick. At the same time, he points out that ‘few organisations are ready, willing and able to change in response to unanticipated internal or external change; they lack the responsiveness of a good driver of an automobile who gets to where he wants to go without forecasts of what he will encounter but the ability to cope with whatever occurs’. The paradox is that while it’s difficult to plan with confidence, you need to work out in advance what might prove useful if you encounter the unexpected.
The first is the conflation of too many diverse interests into its aim “to raise UK prosperity and opportunity by improving employment and skills … to benefit individuals, employers, government and society … help the UK become a world class leader in productivity, in employment and in having a fair and inclusive society”. Good stuff, but – leaving aside fairness and inclusivity for the moment – what needs to happen to make people employable is very different from what any particular employer needs to do with people when they are employees. Individuals’ generic skills are more relevant to the former; managing the whole by bridging relationships in the spaces is more relevant to the latter.
Just take a look at the business of the many sector skills councils to see how this confusion traps them into offering employers training services for their (post-engagement) individual employees. There is a risk of seducing employers into thinking that their responsibility to provide training (let alone promote learning in and for the organisation) has been met and that the organisation can be expected to improve as a result. In practice, such skills training will make little difference organisationally because it fails to acknowledge the specific organisational context, and it fails to develop that context and thereby expand the organisation’s capability. It is not just Caulkin’s ‘economy’ that is organisational rather than individual, it is the improvement levers too.
The second problem is one of accurate prediction and its usefulness. However thorough the research, there is limited value in attempting to predict future needs ten years ahead (see report ‘Horizon Scanning and Scenario Building: Scenarios for Skills 2020’). No-one predicted the eruption on Iceland’s Eyjafjallajokull volcano. No one knows how long it will last, whether it will strengthen or weaken, the height of the ash cloud, how badly aircraft engines or holidaying families will be affected, or what this volcano’s stronger twin may do. We literally don’t know which way the wind blows. As our understanding of complexity science improves, we are slowly coming to terms with our humbling inability to make meaningful long-term plans and predictions, and to be able to link cause, effect and action.
The late Russell Ackoff, a systems thinker, identified scenario planning as a management confidence trick. At the same time, he points out that ‘few organisations are ready, willing and able to change in response to unanticipated internal or external change; they lack the responsiveness of a good driver of an automobile who gets to where he wants to go without forecasts of what he will encounter but the ability to cope with whatever occurs’. The paradox is that while it’s difficult to plan with confidence, you need to work out in advance what might prove useful if you encounter the unexpected.
Monday, 19 April 2010
Northern rocks
Two former senior executives at Northern Rock have been fined by the Financial Services Authority (FSA) for misreporting the bank’s arrears figures affecting near 2000 bad loans, masking its true health. One of them was the former deputy chief executive, David Baker, fined over £1/2m. ‘Alarm bells about Rock’s dangerous reliance on the wholesale credit markets might have sounded sooner if the true picture of rising arrears had been revealed in January 2007 when Baker made misleading statements to the City’ (Nils Pratley, ‘Financial Viewpoint’, the Guardian, 14 April 2010). When Baker discovered malpractice by the bank’s debt management unit, he failed to report the situation to the risk management committee or to the chief executive.
Pratley goes on to mention the “peer and market pressure on junior employees to hit targets on arrears. That’s a cultural failure …”, he claims. To be more precise, the failure of the culture lies in the bank’s values and the absence of a message to all employees that bad numbers cannot be hidden. By contrast, the targets are an aspect of how the system was designed to support those values. There are two points worth making here: the first on targets and the second on the nature of pressure to hit them.
Targets work in the sense that they do get results. People who are in receipt of targets take them seriously. Hitting the targets helps people’s job reputation and often their pocket too. But remember that these targets are mere proxies; they are arbitrary, imperfect but measurable inventions that try to capture something that is important but not directly measurable that lies behind the target (like improving the bank’s state of health). This nature of a target carries the risk that the target may be hit while missing what really matters. In this case, employees had to hit targets on arrears. Employees know that the target matters to them but may lose sight of what lies behind it (they may not even be told what really matters); and that can lead to short cuts and malpractice, especially if employees are given discretion about how to achieve their target, as in this instance.
While this was going on in the debt management unit, elsewhere in the system employees were being encouraged to make reckless loans; Northern Rock allowed customers to borrow more than the value of their homes as it sought market share. This too conveyed general messages to employees about the bank’s values and the risks it was prepared to take.
Besides ‘inviting’ employees to cheat (and then managers turning a blind eye), in systems terms there is always a price to be paid for hitting a target. This price needs to be understood, though it may be deemed a price worth paying. The problem is that a target applies to one component in a system that has been singled out for special attention. To achieve the target requires that it be given priority over other non-targeted functions. If people give more attention, time, energy, funds and resources to one area, they can do so only by privileging this area at the expense of others. There may be unintended consequences, some of them perverse or contradictory. One way or another, the performance of the whole will suffer. To believe otherwise is like saying at a child’s birthday party that the child whose birthday it is can have an extra large piece of cake, but that the other guests shouldn’t have a smaller piece as a consequence.
The second point is that pressure to hit targets can be insidious, implied and assumed. Employees don’t need to have a manager standing over them with a whip. Managers can make their wishes known more subtly. In the collapse of the Royal Bank of Scotland, staff around the CEO Fred Goodwin would get together to discuss what they thought Goodwin would want. Perhaps Baker worked out what his boss Applegarth would and would not want to be told. There was pressure on Baker as well as on the bean counters.
Pratley goes on to mention the “peer and market pressure on junior employees to hit targets on arrears. That’s a cultural failure …”, he claims. To be more precise, the failure of the culture lies in the bank’s values and the absence of a message to all employees that bad numbers cannot be hidden. By contrast, the targets are an aspect of how the system was designed to support those values. There are two points worth making here: the first on targets and the second on the nature of pressure to hit them.
Targets work in the sense that they do get results. People who are in receipt of targets take them seriously. Hitting the targets helps people’s job reputation and often their pocket too. But remember that these targets are mere proxies; they are arbitrary, imperfect but measurable inventions that try to capture something that is important but not directly measurable that lies behind the target (like improving the bank’s state of health). This nature of a target carries the risk that the target may be hit while missing what really matters. In this case, employees had to hit targets on arrears. Employees know that the target matters to them but may lose sight of what lies behind it (they may not even be told what really matters); and that can lead to short cuts and malpractice, especially if employees are given discretion about how to achieve their target, as in this instance.
While this was going on in the debt management unit, elsewhere in the system employees were being encouraged to make reckless loans; Northern Rock allowed customers to borrow more than the value of their homes as it sought market share. This too conveyed general messages to employees about the bank’s values and the risks it was prepared to take.
Besides ‘inviting’ employees to cheat (and then managers turning a blind eye), in systems terms there is always a price to be paid for hitting a target. This price needs to be understood, though it may be deemed a price worth paying. The problem is that a target applies to one component in a system that has been singled out for special attention. To achieve the target requires that it be given priority over other non-targeted functions. If people give more attention, time, energy, funds and resources to one area, they can do so only by privileging this area at the expense of others. There may be unintended consequences, some of them perverse or contradictory. One way or another, the performance of the whole will suffer. To believe otherwise is like saying at a child’s birthday party that the child whose birthday it is can have an extra large piece of cake, but that the other guests shouldn’t have a smaller piece as a consequence.
The second point is that pressure to hit targets can be insidious, implied and assumed. Employees don’t need to have a manager standing over them with a whip. Managers can make their wishes known more subtly. In the collapse of the Royal Bank of Scotland, staff around the CEO Fred Goodwin would get together to discuss what they thought Goodwin would want. Perhaps Baker worked out what his boss Applegarth would and would not want to be told. There was pressure on Baker as well as on the bean counters.
Friday, 16 April 2010
Iceland economy goes into deep freeze
Just as there are ‘wheels within wheels’ (according to the book of Ezekiel in the Old Testament) there are systems within systems. Little systems nest and overlap within larger systems. The banking collapse revealed a system operating (or failing catastrophically) at a very high level. The sudden and unexpected collapse of the Icelandic economy was one of the most dramatic consequences. The report into how three Icelandic banks failed and brought ruin to their country reveals systemic leadership failure on an astonishing level. Repeated below is a key section of Eirikur Bergmann’s chilling account (‘How Iceland lost its soul’, the Guardian, 13 April, 2010).
‘Newly privatised, each of the three main banks came into ownership of three nouveau-rich families in Iceland. The report graphically explains how the three business blocks then, in a kind of a testosterone-driven pissing contest, used the savings of generations of hard-working Icelanders to storm the global financial market, including the City of London.
'The report also shows that the crash was mainly caused by a systemic error within Iceland. By vigorously enforcing its deregulation policy the lassez-faire government created a monster it couldn't control: the Icelandic Viking-capitalist was born. Any voice of caution and classical wisdom was dismissed as old-fashioned. In an opinion-oppressed political environment the regulation industry was made laughable by the politicians and business elite alike.
'Then the Icelandic business Vikings headed for the high streets around Europe with their pockets full of borrowed money. Fresh out of business school Icelandic CEOs took over established companies in fields they couldn't even pronounce. The fast decision-making and risk-seeking behaviour of this new breed was hailed in the business media around the world, boosting the already overblown egos of these young alpha-males.
'Within one short decade we turned a traditional Nordic welfare state economy into one of deregulated bonanza capitalism. We somehow lost sight of our roots and values, as is evident in the part of the report that deals with ethics. The president of Iceland, Ólafur Ragnar Grímsson – who recently vetoed the Icesave agreement – is portrayed as the main cheerleader of the new business elite.
'When the clouds started to gather on the horizon in early 2006, all criticism against what we had grown accustomed to calling the Icelandic economic miracle, was dismissed as ill-intentioned whining by envious foreigners. Throwing nationalism into the mix of inexperience, the Icelandic government responded by launching a defensive PR campaign in London, New York and Copenhagen.'
One can speculate how this disaster might have been avoided. Most leaders lack a suitable mental framework to help them to see and understand the dynamics of what is happening around, between and even within themselves. Such a framework might have enabled Iceland’s leaders to fit the emerging pieces into a systemic picture as the awful risk unfurled. Without this facility to capture, process and make sense of the unfolding of events, valuable data appears like so much random and unwelcome noise.
‘Newly privatised, each of the three main banks came into ownership of three nouveau-rich families in Iceland. The report graphically explains how the three business blocks then, in a kind of a testosterone-driven pissing contest, used the savings of generations of hard-working Icelanders to storm the global financial market, including the City of London.
'The report also shows that the crash was mainly caused by a systemic error within Iceland. By vigorously enforcing its deregulation policy the lassez-faire government created a monster it couldn't control: the Icelandic Viking-capitalist was born. Any voice of caution and classical wisdom was dismissed as old-fashioned. In an opinion-oppressed political environment the regulation industry was made laughable by the politicians and business elite alike.
'Then the Icelandic business Vikings headed for the high streets around Europe with their pockets full of borrowed money. Fresh out of business school Icelandic CEOs took over established companies in fields they couldn't even pronounce. The fast decision-making and risk-seeking behaviour of this new breed was hailed in the business media around the world, boosting the already overblown egos of these young alpha-males.
'Within one short decade we turned a traditional Nordic welfare state economy into one of deregulated bonanza capitalism. We somehow lost sight of our roots and values, as is evident in the part of the report that deals with ethics. The president of Iceland, Ólafur Ragnar Grímsson – who recently vetoed the Icesave agreement – is portrayed as the main cheerleader of the new business elite.
'When the clouds started to gather on the horizon in early 2006, all criticism against what we had grown accustomed to calling the Icelandic economic miracle, was dismissed as ill-intentioned whining by envious foreigners. Throwing nationalism into the mix of inexperience, the Icelandic government responded by launching a defensive PR campaign in London, New York and Copenhagen.'
One can speculate how this disaster might have been avoided. Most leaders lack a suitable mental framework to help them to see and understand the dynamics of what is happening around, between and even within themselves. Such a framework might have enabled Iceland’s leaders to fit the emerging pieces into a systemic picture as the awful risk unfurled. Without this facility to capture, process and make sense of the unfolding of events, valuable data appears like so much random and unwelcome noise.
Thursday, 15 April 2010
Lessons must be learned
The NSPCC (National Society for the Prevention of Cruelty to Children) plays a key role in child protection in the UK. The Society is rightly exasperated with the seeming inability of the many parties involved to learn from past mistakes (‘NSPCC calls for reform of child abuse inquiries’ – BBC News, 8 April 2010) . ‘Lessons are not being learned’, claims the NSPCC. Too many recommendations from reports into past failures are not acted upon, it says. The same mistakes are repeated time and again. But is the problem with the way inquires are conducted and reported, or with how they are followed up?
The failings in child protection – including their repetitive nature – are, of course, systemic in nature. Children are protected by organisations working effectively (or ineffectively) as systems. Individuals play their part, of course, but within a wider and constraining system. If organisations fail to deliver, this whole system has failed. Attempts to blame individuals as though they are free and powerful agents are both misplaced and unfair.
The NSPCC expresses two interests: The first is to improve serious case reviews. These reviews follow individual child deaths, such as those of Baby Peter and Victoria Climbie, and recommend improvements. On this aspect my colleague Professor Eileen Munro of the LSE has undertaken pioneering research into alternative systemic methods of inquiry. Intriguingly, the NSPCC’s other interest is focused on post-inquiry implementation of recommendations for improvement. I discuss that next.
It may not be sufficiently recognised, by the NSPCC and other parties, that implementation of recommendations is also a systemic matter. If you examine the current post-inquiry implementation process that is undertaken following these reports, you can’t help but notice the absence of a systemic approach. But ‘lessons will be learned’ only if a systemic perspective is adopted after failure as well as before it. Improvement will not happen if implementation is simply left to players to pick things up according to how they see their particular roles and responsibilities in a typically run, hierarchical, silo-driven functional structure. Otherwise, the warts-and-all system will continue to thwart their aspirations to learn lessons just as it thwarts their good intention to provide faultless child protection in the first place.
The failings in child protection – including their repetitive nature – are, of course, systemic in nature. Children are protected by organisations working effectively (or ineffectively) as systems. Individuals play their part, of course, but within a wider and constraining system. If organisations fail to deliver, this whole system has failed. Attempts to blame individuals as though they are free and powerful agents are both misplaced and unfair.
The NSPCC expresses two interests: The first is to improve serious case reviews. These reviews follow individual child deaths, such as those of Baby Peter and Victoria Climbie, and recommend improvements. On this aspect my colleague Professor Eileen Munro of the LSE has undertaken pioneering research into alternative systemic methods of inquiry. Intriguingly, the NSPCC’s other interest is focused on post-inquiry implementation of recommendations for improvement. I discuss that next.
It may not be sufficiently recognised, by the NSPCC and other parties, that implementation of recommendations is also a systemic matter. If you examine the current post-inquiry implementation process that is undertaken following these reports, you can’t help but notice the absence of a systemic approach. But ‘lessons will be learned’ only if a systemic perspective is adopted after failure as well as before it. Improvement will not happen if implementation is simply left to players to pick things up according to how they see their particular roles and responsibilities in a typically run, hierarchical, silo-driven functional structure. Otherwise, the warts-and-all system will continue to thwart their aspirations to learn lessons just as it thwarts their good intention to provide faultless child protection in the first place.
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