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Infrastructure, ethics and people strategies

The UK is currently undergoing a crisis of identity, which is partly rooted in the question of the nation and what it means to British.  However, it is also about the infrastructure of the country and how it should be delivered. Underlying questions of service, performance, ownership, subsidies and so forth for the health service, railways, social services, education, and much else that make up the fabric of the country, are to what purpose we measure the success of these systems.  Are they purely utilitarian; to be measured by cost-benefit analysis, or are they some sort of metaphysical representation of the nation, the values it aspires to and central to the reproduction of civil society?

These questions matter because, as the pioneer of privatisation and deregulated markets, the UK continues to blaze a trail that others, encouraged by institutions like the IMF, are following.  Furthermore the answers to these questions will, in the context of Brexit, have a dramatic impact upon the future of other European nations.

Current Anglo-American orthodoxy preaches that wherever the state occupies a commanding position of ownership customer service suffers, organisational and employee performance decline and costs spiral upward.  The root cause of these problems are held to be the disconnection  between personal and organisational interests.  Put simply State controlled organisations do not offer financial reward for superior performance and thus mediocrity prevails and function prevails over form.

Despite the above zeitgeist a 20 year experiment in privatised rail is deeply discredited and widely perceived to have failed.  Certainly the costs to the taxpayer have risen dramatically, without discernable improvements in basic performance indicators, such as timeliness or train age and quality.   In fact most of the increased subsidy seems to have gone to shareholders, which have tended to be foreign state owned enterprises, to compensate for the "risks" of running a service monopoly!!!  Whilst the introduction of fees to University education and the internal market places of the NHS have not delivered significant gains in the eyes of students or patients and only served to increase the number of managers and volumes of paperwork in  the eyes of most healthcare employees.

The bulk of public debate about these issues is centred upon costs and outcomes, but ignores the possibility that public services could actually motivate people through a sense of public service! Shocking, I know, but it is possible.  For that sense of service to be nurtured though, it would require something in return.  The usual drivers of such service (think the military, for example) might be expected to be a sense of mission/purpose, social status and the development of internal self worth that is linked to providing some measure of quality rooted in care for others.

Anybody with experience of 1970s Britain, or the former Soviet countries, knows that the State has a far from perfect track record of delivering upon the needs of customers, patients, or employees.  Nonetheless, it is not self evident that trading public service for private interest has delivered universally better outcomes.  There is no real doubt that private interest has delivered superior customer outcomes in areas like telecoms and wherever aesthetics are a key component of quality.  However, the price has been the squeezing of employee salaries, benefits and opportunities.  Whilst the delivery of hard outcomes has not always grown as might have been expected.  In fact the railways are, in many ways, more badly managed than they were before privatisation, whilst market principles have not reduced health costs, but rather created a series of overlapping, semi-monopolistic economic spaces that embed entrenched economic interests over patient interests.

So if Taylorism and neoliberal economics is not the way ahead, what is?  The answer is to be found in the liberal debate, so well described by Mill, about balancing self regarding and other regarding actions.  That is to say that we need to find a way that combines self interest to public service.  In other words the problem of infrastructure is a moral and ethical challenge of how we manage and lead people far more than it is simply an economic one.

The most sensible way forward would be to ask what is the advantage we seek from these services?  Is it low cost, best practice or some other? In most public services cases safety and/or fairness is key, so by definition best practice and strong processes will be important, equally governments, like companies, do not have unlimited funds and costs do matter.  Furthermore innovation is often important and this requires creative space to challenge status quo's.

By far the best models for delivering public services will therefore be a best practice led model, that uses double loop learning as its cultural foundation to maintain momentum and innovative drive towards the mission.  The foundation of any such model is leadership that embodies the sense of transformational purpose, that reaches beyond managerialism alone. Yet any model must take account of the importance of human connections in decision-making, customer relations and employee motivation.  In short what is needed is a structure with strong core processes that emphasise and reward quality of service, but encourage employees to tailor and amend operational actions according to emerging realities.  So that excellence is organised, internalised personally as a badge of pride, with the security of a solid framwork that provides sufficient space for individuals to shine and take measured risks.  The combination of both providing managers the tools to emphasise the collective power of the team built upon individual efforts.

Fortunately such models do exist and are beginning to be recognised as the way forward.  Whilst there is no one universal model, variations upon employee owned models (such as John Lewis), which have demonstrated their sustainability as vehicles for customer service, quality of delivery and employee growth. Customer, employee and supplier cooperatives may also have a valuable part to play.

Imagining an employee owned rail company is not that hard for most of us to imagine. The benefits of aligning employee to customer interests would likely have dramatic impacts upon service objectives.  Whilst a more equal sharing of financial rewards would be highly motivational and simultaneously lead to the sort of development programmes that we see in firms like John Lewis.  Programmes which breathe life into the idea of work as the reproduction of civic values and leaders over a purely economic transaction.  How could this be a bad thing?  Similarly, one could imagine such structures being effective in the Post Office, and even unexpected areas where the digital economy is transforming service delivery.  Although getting academics to agree upon anything is very difficult, the above models combination of collective mission, with individual and team space for difference could produce a culture of critical thinking that academics fear that they are losing as they are pressured to become "more student led". Equally a supplier led (academic staff) cooperative University is not beyond the realms of possibility.

The problem in healthcare is not so much getting the model right, as it is the problem of scale, which is now so large that the sense of mission, and personal attachment to it, is buried under a mountain of bureaucracy and process compliance.  The solution, perhaps, is a federal  structure, that provides identifiable boundaries of attachment, within a group structure.  The current internal market has some of these features, but its reliance upon process and transactional nature of its employment methods mitigate against any form of personal motivational connection or motivation.

Potentially even more exciting than employee owned models, which even government advisers think are a useful way forward, is the scope for consumer led models. These are likely to be of two types.  First, could be an expansion of already established community owned energy companies.  These are usually based upon a community, such as a village, that controls an energy source, such a s wind turbines, or a micro-hydro plant.  These work as common property regimes, because there is a defined group of owners, who have both an individual and collective stake in the project, that is held within a known small and identifiable group. Thus enforcement, knowledge and attachment are relatively straightforward and real.

More challenging would be a larger consumer led (probably) cooperative around energy, where consumption and production were more distantly connected and participants were larger in number, more spread out and unknown.  The difficulty for larger consumer coop's is, given their lack of a detailed understanding of a complex business, how to effectively supervise managers to act in the consumer interest, rather than their own.  Nonetheless the benefits of lower costs and incentives to deliver efficiency gains to consumers, rather than profit maximise for owners could be quite powerful.  This is especially the case when partnered with technology that both manages consumption away from peaks and controls usage more effectively.  The model provided by building societies reveals that such business can operate on behalf of customers and be both sustainable and competitive.  Certainly direct link between the energy bills paid and ones stake is likely to produce more interest in the business than the current fatalistic acceptance of the status quo.

Building upon models of employee and customer/end user participation would also provide a legitimacy for such models outside of the infrastructure sectors.  Given the resistance Britain has shown to German style models of workforce participation within traditional business structures, a nod to the known may be the template required to build a more inclusive economy.  Certainly, if such models prove successful, they will put pressure on the growing pay inequalities that occur within the private sector.  Furthermore they will offer a challenge to the short termism of the current focus upon immediate winner takes all performance, which many business leaders recognise is a problem.

Brexit is a crossroads in Britain and Europe's future.  To avoid ta divisive future, defined in purely in purely exploitative capitalist terms, we must learn from the nineteenth century and avoid the errors of the 1930's.  A sort of twenty first century new deal, if you will.  One which recognises the power of private interest and markets to deliver innovative change, but also uses our past experience of working together to ensure that change is something that we can all participate in and benefit from.  We have the templates, the need for new thinking is self-evident and the moment is ripe.  Will we get the leadership required?


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