Lessons from Ken Henry on Political Risk in the Public Sector

February 27, 2007

Ken Henry, Secretary to the Treasury, gave an interesting speech earlier this month on Political Awareness.  He points out four lessons for public sector project managers from a particular episode on currency swapping.  These are:

  1. Perceptions play stronger than facts as the Opposition will attempt to exploit any source of embarassment for the Government and public servants are often the meat in the sandwich (or in other words, don’t let facts get in the way of a good story)
  2. Losses are valued much more heavily than gains; they are not scored symmetrically (that’s a bit like marriage isn’t it!). Saving lots of taxpayers money may not win much praise, but there will be heavy criticism on things that cost a lot of money with little value. This can lead to serious cases of risk aversion, especially for the pollies.
  3. If you are managing  a risky project, then public education investments should be undertaken up-front to condition expectations if things go pear-shaped. 
  4. Few people care about records of outstanding achievement if things go wrong.  Time is often the enemy as events in the short-term are generally overvalued relative to events at a distance.  This makes dealing with more complex issues and the longer-term future much harder.

These are all important points from an experienced and well-respected senior public servant.  I distinctly remember when the cross-currency swaps project was not going well and the heat that was being applied by media commentators.  In the end, the project proved has had a positive outcome but of course, that is not the memory that I had of the endeavour.  It’s often that we remember the stories of failures more than those of successes. 


Cool video on Global Warming action

February 21, 2007

Here’s a link to a great video recently released on the cooltheglobe website (developed by Adam Boland, produced of Seven’s Sunrise program) and also available on the Ministry of Sound website.  It’s a remix of the classic Pink Floyd “Another Brick in the Wall” single with the video outlining a great message on global warming showing how individuals can play a major role in reducing emissions. 

It’s also a great way of engaging the younger audiences about this topic as well as showing the utility of new media for storytelling and communicating ideas (video, stunts, music, humour all combined in the message).  I also like the civil disobedience undertones in it!

World Risk Society (Beck) and Climate Change

February 16, 2007

In a recent court case, the Queensland Land and Resources Tribunal has announced a decision in favour of Xstrata expanding its Newlands coal mine.  The Tribunal concluded that the Queensland Conservation Council had not shown there was a causal link between the mine’s emissions and the harm caused by global warming and climate change.  For some commentary on this decision, see an ABC report or Andrew Bartlett’s piece.

This reminded me of some of my favorite quotes of the German sociologist Ulrich Beck.  He states that we are entering a world risk society where “dangers are being produced by industry, externalised by economics, individualised by the legal system, legitimised by natural sciences, and made to appear harmless by politics.” Further, the “transition from the industrial to the risk epoch of modernity occurs unintentionally, unseen, compulsively in the course of a dynamic of modernisation which has made itself autonomous on the pattern of unintended consequences.”

He goes on … “The difference between industrial and risk society is first of all a difference of knowledge – of self-reflection on the dangers of developed industrial modernity. The risk epoch imposes on each of us the burden of making critical decisions which may effect our very survival without any proper foundation in knowledge.”

I have found these quotes to be really profound and I re-read them every few months and see different nuances in them each time.  We need to make our own decisions without good evidence as the complexity and ambiguity in society has clouded the links between cause and effect.  Will the expansion of this mine contribute to global warming?  Maybe not much but at what stage do you say enough? 

So how self-reflective are institutions being in relation to the dangers of global warming?  Not very considering by the sound of it.  If “the hazards to which we are exposed date from a different century than the promises of security which attempt to subdue them,” new forms of decision-making are required.  This could either be at the community level, national or international.  But for world risks like global warming, the intervention needs to be relative to the system so it needs to be big!  Including developing countries, local communities, the US, etc.  All of us need to be involved if we are to turn the Good Ship Earth around – or at least halt its progress down the current slippery slope.

Strategic Networking

February 16, 2007

A recent HBR article (January 2007, p 40-48) focuses on the difference between managers and leaders from a networking point of view. The article talks about the different forms of networking; operational, personal and strategic.

Operational networks are about building strong working relationships with people within the organisation to get the job done. This is core stuff – it should be bread and butter – but it’s only one aspect of networking and too much focus on this form of networking can result in a weakness in dealing with unforeseen challenges (future shocks).  Or for devotees of Stafford Beer’s Viable System Model, too much focus on Level 1 and 2 and not considering Level 3 or 4.

Personal networking helps to build personal and professional development and is about broadening external contacts for future referrals, useful for assist people to advance in their careers. These networks are a safe way to expose problems and gain insights into new solutions.

Finally, strategic networking is about figuring out future priorities and challenges and getting stakeholder support for them. It’s about influencing and leveraging people inside and outside the organisation. It requires really good role models, through communities or shared interest areas. It requires giving to the network, allocating time to it and sticking at it in the face of day-to-day operational demands.

From a foresight point of view, strategic networking is critical to understand what is happening in the wider world and being able to influence your world through the actions of others.  It’s about giving energy to others so that in return, you can gain insights and leverage on your goals.

Note to self – must get out more …

Climate Change – Whodunnit?

February 15, 2007

Whenever consensus starts to appear, I often get worried that we are missing something.  And so the debate on global warming appears to be settling on the side of the man-induced factors with increased emissions of carbon dioxide fuelling the greenhouse effect – something I first heard about in the early 80’s at uni and more recently canvassed well by Tim Flannery in the Weather Makers.  But are the IPCC and Stern reports right?  Are there other factors at play? 

Climate change has occurred in the recent past due to non-man induced factors.  Times like the Little Ice Age of 300 years ago, the medieval warming of 1000 years ago, the extended drought that many people suspect caused major human societies to fail (Maya in 800AD, Mesopotamia about 1400BC, etc).

We know that changes in solar activity affect global climate – the Maunder Minimum, a period of low solar activity, equates to the Little Ice Age.  But other causes such as stated in this article could include impacts of cosmic rays from exploding stars and how they induce increased cloudiness and a cooler world.  The recent high amount of solar activity is postulated to have created a magnetic field that reduces the amout of cosmic radiation and results in reduced cloud formation and warmer temperatures. 

This is not to deny that greenhouse gases do not play a role.  We should invoke the precautionary principle and learn from the climate-induced collapse of previous societies.  We are pushing the carrying capacity of the Earth as our population and lifestyle increases and the consequent increased resource demands.  Any alteration to our climate patterns, even to the extent of another Little Ice Age would drastically alter human society.  We are ill-prepared for any eventuality in future climate shock, be it anthropogenic or not. 

And what to do?  Systems thinking and involving ordinary people in a dialogue is not a bad start as outlined in a recent article in New Matilda.

Forecasting and Judgement – The Differences between Foxes and Hedgehogs

February 13, 2007

As a futurist, I’m always interested in forecasts and how many people, especially time-poor senior managers, rely on the opinions of experts, who are often not accurate in their outlooks.  So I was very interested when I read about the work of Philip Tetlock on the Long Now site and an excellent article by Paul Monk on it.

Tetlock is a psychologist who has made assessments of the predictions of experts.  Basically, he has demonstrated that increased expertise does not correlate with improved forecasting accuracy.  Who experts were and what they thought did not matter.  What matters is how they think – their style of reasoning – their judgement. 

This is equated with the analogy of the fox (who are sceptical and circumspect) and hedgehogs (who have one grand theory and courage that it will be pertinent in many domains).  Foxes avoid many of the big mistakes of hedgehogs and are somewhat more accurate in shorter term forecasts.  Hedgehogs are prone to hubris and closed-mindedness, of dismissing dissonant possibilities too quickly.  But foxes don’t get off scot-free; they fall into the danger of the cognitive chaos of excessive open-mindedness. 

I liked his view of scenario planning, the next depth stage beyond forecasting for futurists.  He notes that scenario exercises often fail to open the minds of the hedgehogs but succeed in confusing the already open-minded foxes!  It may be that we are better off to acknowledge the uncertainty and hedge against it rather than map it into detailed scenarios. 

A key aspect then to overcome fox and hedgehog limiations is good judgement.  This requires high cognitive skills and the cultivation of the art of overhearing – eavesdropping on the mental conversations we have with ourselves. This is incredibly difficult and it needs a commitment to thinking about how we think – of examining our worldview and rethinking our assumptions. 

Finally, both the Monk and Brand articles stress the importance of keeping score, of using the scientific method to test the results and see what went wrong and learning from it.  It is simply practising double loop learning.  But it rarely gets done. 

The work of Tetlock also reminds me of the work of Scott Armstrong who I heard present in Scotland in 2004.  He noted that forecasts are more accurate if the people making them used simulated interactions (works better with experts) or structured analogies (works better without experts).  His conclusion was that structured methods like these work far better than focus groups or simply gaining expert opinions.

The critical thing from this for me is to give permission to listen to that inner questioning voice and to seek out others to question my assumptions.  One of my major learnings was from a class that gave permission for us to learn from each other, to highlight shortcomings and freely question assumptions.  The trusted conversation was rich and very empowering. 

New Trend – Trysumers

February 10, 2007

I love pop futures sometimes.  When depth gets a bit too heavy, it’s nice to do a bit of smallow skimming of trends.  And here’s one – the hot 2007 marketing word is trysumers.

Trysumers are experienced consumers who love to try out new things because it’s cheap, fun, and different.  Trysumers use technology to gain reviews on things that they might be interested in, while suppliers are looking at new business models to entice trysumers with try before you buy schemes or even renting something for that special occasion for that special someone. 

We often used to wonder what came after the information economy and part of the answer was always the experience economy where consumers seek the experience, not just the service.  Perhaps trysumers are one demonstration of this emerging.  Or it could just be a fun word that marketers have dreamed up to generate a bit more interest in a trendwatching report!