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2010年1月23日 星期六

“The Beatrix Potter Guide to Business”

Schumpeter

The tale of Mr Jackson

The public sector has had its fill of management consultants


Jan 21st 2010
From The Economist print edition

Illustration by Brett Ryder

MARGARET THATCHER regarded Beatrix Potter’s “Ginger and Pickles” as the only business book worth reading. The BBC recently elaborated on this insight in a series on “The Beatrix Potter Guide to Business”. “Jemima Puddleduck” is a treatise on enterprise. “Samuel Whiskers” is a parable about the importance of rolling audits. And “Mrs Tittlemouse”? It is a warning about the dangers of employing management consultants.

Mrs Tittlemouse is “a most terribly tidy particular little mouse”, forever cleaning her house and shooing away intruders. But one day Mr Jackson, a “fat-voiced” toad, arrives and makes himself at home, lounging in the rocking chair and putting his feet on the fender. He not only refuses to leave, he scours the house for tasty morsels, spreading chaos as he goes. It takes Mrs Tittlemouse a day to clear up after him when he finally leaves.

Management consultants have been hopping all over the public sector for years. The growing pressure to get “more for less” persuaded governments to turn to the private sector for inspiration. And the challenges of adopting information technology prompted them to turn to IT consulting giants such as IBM and Accenture. Britain’s New Labour government led the world in its infatuation with consultants. Tony Blair and Gordon Brown talked excitedly about “transforming” Whitehall and its fuddy-duddy ways. Consultants crawled over everything from the Cabinet Office to the health service. New Labour apparatchiks were much more likely to wax lyrical about Tom Peters and Michael Porter than Keir Hardie and Nye Bevan.

The result was a bonanza for the management-consulting industry. Money poured into the consultants’ pockets, especially during 2004-06. Over that period, spending on consultancy increased by a third. And a New Labour-consultancy complex formed at the heart of government. The Downing Street Policy Unit was full of former McKinsey consultants. Lord Birt, a former BBC boss, was much criticised for working simultaneously for Downing Street and McKinsey. Patricia Hewitt, a former head of research at Accenture (then called Andersen Consulting) was health secretary in 2005-07; David Blunkett got a consultancy job when he resigned as work and pensions secretary in disgrace.

Consultants are nothing if not ingenious in getting their feet on the fender. The Obama administration looked like a perfect mark when it came to Washington, DC, on a wave of hope and hype (Mr Obama even created the new job of “chief performance officer”). Monitor Group, based in Boston, has signed up Libya’s Colonel Qaddafi as a client. McKinsey actually scented an opportunity in the credit crunch: an article in the consultancy’s house magazine urged that governments needed to go in for “whole-government transformation” if they were to cope with the mess. But even the most ingenious consultants will be challenged in the coming years.

Yawning deficits will force governments worldwide to cut back on necessary expenditure, let alone unnecessary splurging. And there are many who argue that consultants represent unnecessary splurging. In Britain, consultancy fatigue is even more pronounced than New Labour fatigue. Successive parliamentary inquiries have revealed appalling examples of waste. From the NHS to the BBC, consultants are regarded as fork-tailed devils.

This counterblast against consultants is largely to the good. They have frequently left devastation in their wake and have treated the public sector as dumping grounds for airy-fairy ideas such as “transformation” that have been rejected by the private sector. They have built overly elaborate management structures that make it harder for people to do their jobs. And they have demotivated people who like to feel that they are working for the public good. The government has wasted huge amounts of money on botched IT projects designed by consultants. The worst example, a £12.7 billion project to improve the health service’s systems, has now been partially abandoned; but the Ministry of Defence is still struggling with a project that is currently £180m over budget.

Blame the paymaster, mostly

That said, it is worth adding two qualifications to the general chorus of condemnation. The first is that just because some consultants have given bad advice does not prove that they are incapable of giving good advice. Civil services are congenitally inward-looking organisations, led by people who are plucked from elite universities and shielded from the rest of the world in government palaces; it helps to expose them to innovations from the private sector. The private sector routinely introduces reductions in costs and improvements in performance that are almost unknown in the public sector. The IT debacles may be dispiriting. But few government departments possess the internal expertise to master new technology on their own.

The second is that the people who are ultimately responsible for the debacles are not the hired hands but their political masters. Gordon Brown and Tony Blair were suckers for flashy but insubstantial ideas about transformation. Lower-level politicians were lazy managers. In 2006 the National Audit Office provided a devastating list of ways in which the government had failed to make the best use of consultants—ranging from failing to appreciate what could be achieved with their own staff to refusing to learn from what the consultants were telling them.

But the biggest reason for the failure is that politicians have repeatedly used consultants to avoid dealing with the difficult questions by dressing up antiquated institutions in fashionable business garb. Back in 1995 Peter Drucker argued that if politicians were serious about “really reinventing government” they would go back to first principles and ask if large parts of government needed to be there in the first place. Tell Mr Jackson to follow Drucker’s advice and he might yet produce value for money.

*****


Beatrix Potter, 1913
(click to enlarge)
Beatrix Potter, 1913 (credit: Pictorial Parade/London Daily Express, reproduced by permission of Frederick Warne & Co.)
(born July 28, 1866, South Kensington, Middlesex, Eng. — died Dec. 22, 1943, Sawrey, Lancashire) English author and illustrator of children's books. In her childhood Potter spent holidays in Scotland and the English Lake District, which inspired her love of animals and stimulated her imaginative and technically superb watercolour drawings. The illustrated animal stories she sent to a sick child when she was 27 were published as The Tale of Peter Rabbit (1902), which became one of the best-selling children's books of all time. More than 20 sequels followed, featuring such original characters as Jeremy Fisher, Squirrel Nutkin, Jemima Puddle-Duck, and Mrs. Tiggy-Winkle.

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