Since we started talking at the RSA about the Power to Create, I have been asked to apply the idea to a variety of subjects. The most recent is the energy sector….
Generally I enjoy giving talks to outside audiences (although to protect the interests of the RSA I, as do other colleagues, have to charge for my time). Preparing gives me an opportunity for a quick dive into a sector or organisation, I often meet people on my outings who subsequently become partners or Fellows of the RSA and, like any performer, I enjoy feeling I have engaged an audience. But some gigs are tougher than others.
Yesterday I was in Amsterdam speaking at European Utility Week’s massive annual conference. I was billed as offering an outsider’s view of the sector. The organisers were kind to me and the conference programme was broad and interesting but, judging by the silence on the conference Twitter thread after I had spoken, I fear the largely besuited corporate folk in the audience found me about as relevant as the small brass band that played delegates into the main hall.
Still, waste not, want not, I thought my readers might find my analysis of greater interest.
In a transparent attempt to curry favour I started by saying that energy is arguably the single most important sector of the economy; important to national and regional security, to global sustainability, to economic growth, to quality of life and household finances. It is often said that energy policy faces a trilemma, or even ‘quadlemma’ in which it can meet some of its objectives (say affordability and medium term security of supply) but only at the cost of the others (say sustainability and long term national interest). So, I suggested, instead of choosing one objective over the others, could a focus on being a creative sector help to improve the trade-off points between them?
There are five ways in which the energy sector could become a creative force.
It could build on innovations like NEST and British Gas’ Hive to enable energy users to be much more active in managing their energy use. Notwithstanding the failure of the Green Deal, these forms of customer empowerment should extend to ways of making investing energy efficiency pay off quickly.
Also, the sector should be a champion, facilitator and financial backer of community based schemes to generate and save energy. Despite the great enthusiasm of the community energy sector and a genuinely supportive (albeit modestly-funded) Government strategy, we still lag way behind Germany and Scandinavia in the overall contribution that community based schemes make to energy supply.
Moving from customers to organisations, energy companies, especially the big utilities, should seek to exemplify the best practice of creative organisations including being mission driven, devolved in structure and encouraging innovation at all levels. It is noteworthy that one the firms featured in Frederick Laloux’s Reinventing Organisations was a major American energy company AES (although, sadly, the company eventually retreated from the radically devolved form it had adopted).
Combining these points, energy firms need to be open to the possibility of transforming their whole business model if it is the only way of aligning organisational and public interest. Even if Jeremy Rifkin is only half right there will come a time when the marginal cost of energy will have dropped dramatically. At that point it will be the firms that have moved from being commodity providers to platforms for a plethora of other providers (families, communities, co-operatives, municipal companies) that will survive and prosper. The experience of who has won and who has lost from free on-line content is instructive here.
Finally, the sector needs to make a creative contribution to public debate. In any energy gathering there is much justified complaint about the vagaries of public policy particularly in relation to the business case for investment in renewables (to know more read Alan Whitehead’s excellent blog) but to my inexpert eye the key dilemma is whether industry or government (which means you and me) carry risk. In a highly regulated sector, industry needs price predictability to make long term investment decisions but, if the government does provide price guarantees, it can end up shelling out billions in rent seeking profits when market conditions change. The best solution to this is greater transparency, consistency and trust among and between the key players.
As many commentators have argued, while trust doesn’t remove trade-offs or conflicts of interests it can make them much less expensive and dangerous. But if the industry is to contribute to a higher trust (thus more creative) environment for debate and policy making it has to behave in an open, authentic and responsible way. If anyone thinks those words apply already to the sector’s big players they should read the relevant sections of James Meek’s book ‘Private island’.
Sensing that I was failing fully to convince my audience I ended with a final suggestion.
While the Amsterdam delegates were clearly expert in their fields I wondered whether there was enough passion in the gathering. I have on various occasions spoken to energy innovators, whether entrepreneurs trying to develop new energy saving devices or community activists trying to get a local energy scheme off the ground. Many of them are RSA Fellows (we have even given some small financial backing to some of their ideas) and they tend to be hugely enthusiastic. Perhaps at next year’s conference the organisers should give out some free tickets to these pioneers; they certainly wouldn’t have any doubt that energy can and must be a creative sector.
Better integrating services around citizens needs is a no brainer. So why is it so difficult?
The five year NHS plan, unveiled last week by my former Downing Street colleague Simon Stevens, has been widely and justly praised. The plan is based on robust arguments and contains many good ideas but, for me, its greatest strength lies in method: Rather than proposing a new national structure, or getting too involved in the detail of policy, it advocates a number of ways to achieve better integration of primary, acute and community care. Local health commissioners and providers are encouraged to consider which model best suits their circumstances while NHS England will focus on providing advice, insight and support for local reform. This enabling, decentralising framework is very welcome and one can only hope that other parts of Whitehall will emulate it.
But I have a major reservation. A key theme of the report is care integration; vertical, horizontal or both. This echoes a recurrent theme in debate not just in health reform but across the public sector. In 1997, for example, Labour said its top priority for Whitehall reform was to produce joined up government. Geoff Mulgan who was given the task of promoting more integrated working has described the rapid and profound disillusionment among civil servants as they saw the behaviour of Labour cabinet members continuously undermine the principles of joining up.
When something has been advocated so often and for so long, yet seems so hard to achieve in practice, we need to ask why.
The case for integration sometimes starts on shaky conceptual grounds. A truly comprehensive Whitehall approach to a major policy goal – like child poverty for example – would involve most major domestic policy departments. But while for some, such as DWP or Education, it would be a key priority, for others, such as the Ministry of Justice or DCLG, it would inevitably be more peripheral. In a complex system full integration of all factors affecting an outcome is virtually impossible. The NHS plan makes the case for health and social care services working better together but says relatively little about areas like housing and employment which are arguably just as important to public health and community resilience.
Just as full integration is impossible at a system level, it is also unlikely at an organisational level. Advocates of integrated solutions are often guilty of the merger illusion, namely that putting functions together in the same organisation is sufficient to make sectionalism subside. But as anyone who works in a large organisation will attest, the fact that managers share the same employer and use the same front door is pretty much irrelevant to whether they put corporate, customer-focussed interests above departmental, producerist ones. Team size is more important than organisational label, which is why some organisational theorists argue that the most productive and creative model of organisations is always to devolve to cross cutting units of around ten to twenty people. Strong integrated, outcome-focussed teams are needed to overcome the natural pull of professional loyalty and hierarchical incentives.
Indeed the three powers framework I advocated in my annual lecture two years ago (itself derived from cultural theory) provides a good basic checklist: Individual incentives, team loyalty and values, and hierarchical authority must all reinforce a shift to integrated working. Often the call from integration comes from the top while individual incentives and day to day loyalties continue to be oriented around functional specialisms.
A shared mission, robust systems and aligned incentives are all vital to the success of integrated models but there is also an important psychological and interpersonal dimension.
I have been working recently with a London local authority trying to join up employment services. Facilitating the meetings, I have been struck by the importance to the process of openness and generosity. In the last event I used the simple device of asking people in the room directly to request help from someone else. Eventually a manager from an agency focussed on employment told a local authority officer that the council’s welfare rights team often helped people increase their benefit entitlement while reducing incentives to work; ‘I know this is their job’ she said; ‘but given how bad long term unemployment is for people, shouldn’t they be focussing more on showing clients how they could be better off in work?’. The local authority officer was impressed and promised there and then that the welfare team would be given a much stronger employability mandate. From this point of discussion, it became easier for people to open up, talk about how they needed help and to start to offer help to others. Yet still I had to confront one senior manager who seemed to find it impossible – despite the evidence – to admit her service was anything but perfect.
Ironically, a problem with the call for integration may be precisely that it sounds so much like common sense. This leads decision makers and managers to underestimate the major and inherent barriers. A failure to perceive and act holistically is a very human flaw as is the tendency to act tribally and respond to immediate incentives.
Organisational reform may be a necessary condition for integration but, without attending to the psychological and cultural dimensions of what is an inherently challenging human process, such reform will not succeed in putting the joined up needs of citizens first.
Today sees the second report of the Social Integration Commission, which I chair. It has been published on the same day as the 2014 State of the Nation report of the Social Mobility Commission and there are important overlaps between the reports: Inequality and segregation go together and fuel each other…….
The Social Integration Commission’s first report – which received extensive coverage earlier this year – revealed the degree of poor integration which persists alongside the growing diversity of the British population. We highlighted that a lack of integration is an issue for all groups. White Britons are as likely to have unrepresentative social networks as people from other ethnic backgrounds, and Londoners’ networks are amongst the furthest away from reflecting the make-up of the communities in which they live.
We also found that one of the most significant areas of poor integration is between people from different social classes. This lack of integration has important and worrying implications for cohesion and economic inclusion.
It is poignant that the Commission’s second report is published on the same day as Alan Milburn’s damning assessment of the UK’s faltering anti-poverty strategy. Our willingness to tolerate poverty and the diminished life chances of poorer citizens is surely not unrelated to the lack of interaction and friendship between our social elite and the disadvantaged. Indeed there is international evidence that inequality levels and mean policies towards the poor go hand in hand with levels of prejudice. The more we think of the disadvantaged as different people to ourselves the less sympathy we have for them and the less support we are liable to give to measures to tackle exclusion.
Milburn’s report makes a number of powerful recommendations, but as I pointed out in my 2011 annual lecture the philosophical and political arguments for greater social justice need to be underpinned by a culture of empathy for those different to ourselves.
Today’s Social Integration Commission’s report provides evidence of the consequences and costs of poor integration for individuals and society. The figures we give in relation to employment, recruitment and career progression, and community health and well-being are estimates; however, using the most robust methodology available and erring on the side of caution, the evidence suggests an overall financial cost to the UK of approximately 0.5 per cent of GDP.
Equally importantly, the report contains important new research showing that people gain from better integration and that the small steps taken to help people mix lead to significant benefits in the future.
UK society is a tolerant society that has coped pretty well with some of the potential tensions of increasing diversity; despite some of headlines we have garnered this morning, it is not the Commission’s intention to spread doom and gloom or to be alarmist. I would summarise our argument as follows: tolerance is not enough, but it need not be hard to do more. Exactly what that ‘do more’ might involve will be the focus of our final report.
Our final recommendations will focus not only, or even mainly, on the role of government but on the things that other sectors, agencies, communities and individuals can do to make sure that the UK’s trajectory towards better integration more closely matches its trajectory towards greater diversity.
In all these debates we should ask what we can do ourselves. Of course, a great deal of the RSA’s research and development seeks to address aspects on social justice, but as CEO of an organisation with a funding model which relies on Fellows who can afford to make an annual donation I am acutely aware that the Society is just the kind of place to which recommendations from the Social Integration Commission’s final report will be addressed. Fortunately we have at least one bit of good practice to celebrate.
I was in Wales on Saturday for the RSA. It was positive event with a very impressive range of Fellows in attendance. Part of what made it good was the role played by two young people recruited as part of the RSA’s Centenary Young Fellows appeal. I hope we can build on the success of CYF to open up a continuous route for younger people to the Fellowship and that we can also explore how we might use other mechanisms to increase the Fellowship’s diversity.
It is also vital to recognise that even if our annual donation and joining criteria are somewhat restrictive that doesn’t mean we can’t engage a more diverse group of non-Fellows as partners in our work, as many of our best regions and networks already do.
Two articles in today’s newspapers are a reminder of the unreconstructed state of our political parties….
In 2003 I spent my downtime over Christmas writing an article for the journal Renewal. I was asked to look back over the ten years of the journal’s history and assess different arguments that had been made for the reform of the Labour Party.
I drew various conclusions but one stood out: not once in any of those articles – many of which were by bright people whom I like and respect – had any author considered the issue of Party reform from the perspective of the public interest. It was simply assumed that the only criterion by which to judge Labour reform was what was in the interests of the Party. This revealed a deeper assumption: what is in the interests of the Party must be inherently in the interests of the public.
The RSA has a growing portfolio of completed or current projects exploring institutional reform. A recurrent issue in our work is how organisations – especially those which claim to be acting for social good – align their organisational interests with the public interest. Alignment isn’t an easy thing to do but it is a challenge organisations should continuously and openly confront. Our political parties generally don’t understand the question, let alone seriously try to answer it.
In his article for The Times, Damian McBride adds to the gathering storm clouds hovering over Ed Miliband. McBride, Gordon Brown’s former attack dog and author of one of the very best insider accounts of being a political aide in Government, upbraids the Miliband operation for failing to promote proper dialogue within the shadow cabinet and for refusing to draw on the expertise of anyone associated in their mind with the Blair-Brown years.
In The Guardian Jeremy Cliffe, politics correspondent of The Economist, writes about Labour’s knee jerk response to UKIP. Rather than imagining that the working class is an homogenous whole obsessed by immigration alone, Cliffe urges Labour to see the deeper problem as the negligent and cavalier way the Party has often treated its core supporters. He cites one example of how to do things differently:
If Labour takes UKIP-friendly seats like Great Yarmouth next year it will be because candidates like Lara Norris, its fizzy candidate there, have spent the past years campaigning on local issues and sorting out local problems – not because her party has made a last-minute lurch to the right on immigration
I don’t know Ms Norris and I’m sure there are other good candidates in her seat. I suspect I have little sympathy with the Brownite model of Party management. Nevertheless Cliffe and McBride are both touching on a huge and largely ignored problem: in essence the established political parties are failing organisations. Their governance, style of management and ethos are miles behind what would pass as bog standard practice in a half decent large charity or a socially responsible private company.
For instance….Parties are very hierarchical with power wielded indiscriminately and often arbitrarily. The relationship between the formal model of Party governance and internal democracy and the reality of decision making is tangential at best and often non-existent. People at all levels can be treated appallingly, with advancement and demotion based on prejudice, nepotism and panic rather than any proper consistent assessment of performance or individual qualities. Rank and file members are viewed with a mixture of fear and contempt and largely used as fodder for fund raising or rather mundane forms of campaigning. And, to repeat, the question of whether Parties are aligning their own interests as organisations with some articulation of public duty simply doesn’t compute.
There have been sporadic attempts to change things. Before he was dumped by team Brown, pioneering Labour General Secretary Peter Watt tried to turn the membership into an on-line community free to discuss and develop their own ideas. The Conservatives insisted that their candidates at the last election create social programmes but some were later found to be using these as routes to direct people and money back into electioneering. Labour flirted with trying to turn its field workers into community organisers and then started to pull back when officers realised this might involve some letting go from the centre. The flaw in these schemes is the one I painfully discovered in my early years trying to reform the RSA Fellowship; you can’t change a long established organisational culture with one off initiatives (but with time commitment and imagination you can as evidenced by the incredibly constructive meeting of the RSA Fellowship Council taking place as I write).
Please understand, this is not just another rant against politicians. Many MPs – mainly women in my experience – do fantastic work to improve the quality of life in their constituencies; not because they think it will directly help them win elections but because they find it intensely satisfying and see it as their public duty. I knew my time as days as a Labour party official were numbered back in 1997. Along with colleagues (by the way, many mid ranking officials in Parties also wish they worked for less messed up organisations), I prepared a paper for a meeting of the two hundred of so newly elected Labour MPs. In it I encouraged them to use their role to act as social innovators and entrepreneurs. ‘Great MP’s can be a powerful catalyst for local change’ I wrote. My paper was replaced by one promoting ingenious ways for MPs to channel their office allowances into traditional Party campaigning.
Party leaders say they value constiutuency work but MPs know it is given much, much (let’s add a third ‘much’) less importance than loyalty and an ability to parrot the Party line while looking like you mean it.
Which leaves us with a conundrum: What is more alarming? That the people who run these dysfunctional, distressed and declining organisations are genuinely confused as to why the public isn’t too keen on them, or that it is from between them that we will have to choose our next Government.
Whatever my own increasingly non-aligned sympathies, I can’t helping wanting political strategy to make a difference….
Adapting a gag of Stephen Fry’s, I sometimes tell audiences that the world is precisely and equally split into people who assert false dichotomies and those who don’t. When it comes to election predictions and explanations it also possible – albeit inexactly – to identify two camps.
In one camp there are the determinists, those who argue that election results are the result of big underlying factors and issues that don’t quickly change. Different determinists will focus on different things; demography, electoral geography, the paramount importance of leadership perception or economic trust. They tend to share a scepticism about established leaders being able to do much in the short term to overcome these factors.
When it comes to next year’s election the determinists are in quandary, for, while one set of factors – electoral geography and living standards – are good for Labour, another set – leadership standing and perceived economic competence strongly favour the Conservatives.
As a one time political strategist I am in the other camp. We are less interested in a static picture of current factors and more in momentum and possibility. We believe that strategies, and the narratives, stunts and policy ideas they involve, can make a difference. We live on tales of sudden shifts in voting intentions resulting from brilliant or disastrous strategy, conveniently ignoring how rare these unexpected turnarounds are. We never completely lose hope. I remember a Labour activist telling me with complete sincerity on polling day in 1992 that Labour was running the Conservatives close in Stratford upon Avon. Danny Finklestein has written wryly about how necessary self-delusion was for him to motivate his efforts for William Hague’s 2001 campaign.
Rather than any particularly strong political conviction, wanting to believe my life as a political strategist had some value makes me think it would be interesting if Nick Clegg were to get some kind of conference bounce (although this week’s by-election results are hardly encouraging). Also, aggregating various criteria including platform performance, clarity of strategy, courage and candour – the LibDem leader’s speech was just about the best creation, and we at the RSA like to believe that human creativity can move mountains.
As I am a soggy centrist and an admirer of leaders who resist the temptation to pander to their Party’s prejudices, it was not going to be hard for anyone to beat my assessment of Miliband or Cameron. Even before his speech many commentators spotted that the two main parties by reverting to ideological type had left a nice big space for the LibDems to try to occupy. Taking advantage of that opportunity Clegg duly and reasonably skilfully pitched his tent.
But to the determinists my or anyone else’s appraisal of Clegg’s performance is of limited salience: Indeed Conservative pollster Andrew Cooper was among those who tweeted to that effect. Their view is that voters made up their minds about the LibDem leader a long time ago. Short of Miliband, Cameron and Farage being found in bed together in a luxury hotel paid for on MPs expenses little will change Clegg’s gloomy destiny.
Beyond my insatiable need for self justification there may be one reason – a determinist reason indeed – for Clegg to have hope.
Even though vote loyalty is much less of factor nowadays the major parties can still rely on about 25% of voters to stick with them almost come what may. But as the polls have told us over the last three years, the LibDem hard core is tiny. Most LibDem voters are either Lab/Lib waverers or Tory/Lib waverers.
From the LibDem perspective the pessimistic view is that the former have gone determinedly red in disgust at the Coalition while the latter will be easily swayed by the inevitable Conservative election slogan ‘vote Clegg, get Miliband’.
All of which is true. But there is another scenario. Unless things change (and judged by the main Parties’ strategies I think this unlikely), voters in the next election will be more powerfully motivated by the result they want to stop than the result they want to see. The respective ‘anyone but Miliband’ and ‘anyone but Cameron’ camps are certainly bigger than either Parties’ stock of faithful followers. If this is the case Clegg may not need the LibDems to be popular, much less loved. That they are at least partially detoxified may be enough to convince enough people in the seats the LibDems hold and target to vote unenthusiastically for the third party to stop the first or second.
Time will tell whether Nick Clegg started the process of detoxification this week. In politics I believe anything is possible. Which to the determinists is exactly my problem.