Templeton Applied

New Labour was soon to arrive in Government and my head was still full of Templeton’s Strategic Leadership course from 1995. It seemed to me axiomatic that the principles for running corporates and public service bodies applied also to running the country. Countries are bigger and more complex, but the challenges for successful leadership are very much the same: locating and using the points of influence which will work with that particular organization at that particular time. What worked yesterday will not necessarily work tomorrow. What works for an established business model, like BP or Marks & Spencer, then, is not universally applicable. Cultures are strange and resilient. It is relatively easy to change things and difficult to change them for the better.

A couple of years before, Norman Strauss had at once taught, dazzled, and confused me with his theories of marketing and organizational development. The Kit-Kat case study (a sweet marketed as a reward for hard work) and BA changing the face of airline travel (from club class onwards) stuck in my mind. Then came the overlapping circles:

While I still cannot convincingly articulate how all the circles interact, the big messages seemed intuitively right on ethos and on the constitution. Thus, ethos management seeks to align every process, system, and behaviour in the company with its espoused ethos and embed this in its products and services. It is a unified field theory for organization in searching for the fundamental particle. Change the particle and the organization changes fundamentally. Use the same particle throughout and marvel at the power.

Rather than government being a series of largely random acts, driven by events, the media, and the new minister’s good and bad ideas, all altered through an inexpert and static civil service, government could be coherent, strategic, and effective. With this end in mind, it seemed to me the place to start was with ethos.

I gathered together people of differing experience, all of whom I rated as thinkers free of the conventions of the day, and who saw the world in fresh light. Among others the group consisted of Will Hutton, then economics editor of the Guardian and former investment banker; Adam Lury, with his own advertising agency and creator of the AA as the fourth emergency service and of Mr Chumley-Warner for the launch of Orange; and, Geoff Mulgan, with one foot in Demos and a role as an adviser to Tony Blair.

We got to work, with me giving the potted version of ethos management theory (learning by teaching – very powerful) and hoping for few questions.

The group was rapidly into defining an ethos for government which could shape and define most of its actions. What we came up with is shown in Figure 2:

We then applied it to a policy – Savings and Investment – to set the principles for change, to provide the public rationale and story, to test the policy for its relevance to people’s needs, and to strip the policy down to its core and bin the verbiage. The ethos was applied to both the party’s policy-making process and the styles and method of government. On reflection, fascinating stuff.

At this point Geoff Mulgan disappeared with our thinking to show Tony Blair. The rest of us lost touch. But it seems that the ‘ethos’ concept and some of our thinking took hold.  Certainly, fairness has been a consistent guiding light.

Meantime, Relate, the relationships service, was proving a challenge for me as its chair in terms of connecting its services with people’s needs. Typically, people came to Relate at times of crisis, which made resolution more difficult. Could more people be persuaded to come earlier? To use a car analogy, would people bring in their relationship for an MoT and service? What shift in social attitudes would this take? What could Relate do to achieve this?

Steve Hilton of Good Business took up the challenge, showing how, for example, alternative (now complementary) medicines had moved from the exceptional to the mainstream. Although from a different background, his approach had much in common with Templeton’s in seeking to achieve change through ethos. Steve’s project with Relate moved us on, but we had neither the resources nor the time to stimulate a national campaign, although Relate has made huge strides since.

Steve is now chief public mind reader for the Conservative Party, where he has been highly influential in reconnecting the party to a twenty-first-century electorate, and in branding David Cameron. Tony Blair became a brand; David Cameron is the first party leader to be explicitly
branded from the start. Steve has overtaken Philip Gould, chief pollster for New Labour from its inception, as the country’s leading political reader of the public mind. New Conservatives are on the electoral ladder for the first time in a decade.

My Strategic Leadership course started with Douglas Hague and variety management. I used this and some other Templeton tools at Coopers & Lybrand (now Pricewaterhouse Cooper). As a supporter of Manchester United, Douglas’s story of a cup final stuck in my mind. With the score at 0–0 well into the game, Douglas observed that United were producing more variety in their attacks than the opposition, and should win. Which they did.
Consultants are continually bidding for work competitively. Success can breed repetitious, formulaic proposals. We started systematically to build variety thinking into our proposals – sufficient insights, fresh knowledge, and new thinking to keep scoring.

Rather than increasing variety, management is more often concerned with simplifying complex market environments, reducing them to manageable proportions to enable managers to make decisions both about the markets and about their organizations. At its best, variety management is a sophisticated process. It is not to be confused with dumb management, when someone adopts a simplistic formula to rally or impress the board, active shareholders, or the troops. Most often dumb management will be Theory X, an authoritarian, centralizing, top-down model driven by the high control needs of the leader and playing to those among the governance. Dumb management invariably comes to a sticky end, but it can often take a long time: organizations can succeed despite their management, a phenomenon still remarkably prevalent and remarkably tolerated.

Templeton (and others) is at the forefront of developing and applying organizational understanding. Despite all of this knowledge, too many organizations, large and small and in all sectors, are still run badly. And now the research shows that this causes stress and illness in employees. Poor process, procedure, rules, and systems cause stress. I am hopeful that employment law will soon catch up with dumb management. Ordinarily the legal process is over-applied, but here it represents the best opportunity for bottom-quartile management practice to be eliminated. We now know enough for this not to be tolerated. Rudimentary organization, like rudimentary medicine before the invention of anaesthetics, should be well in the past. Perhaps the most important part of a politician’s job is variety management. After all the available facts and figures have been analysed and the finest policy papers written, you will often hear the words ‘That’s a political decision.’ This usually means that the analysis has only got so far, and now the minister has to weigh up some complex trade-offs and make a call. How much
to spend on health versus education? How much on policing versus childcare? How much on flood defences versus changing farm practices? These are the multi-dimensional questions which can be informed and simplified by analysis, but where the politician is paid to manage the variety to a decision.

The Murray model of 1933 seeks to identify the psychological motivations in us all. It paints a more complex picture than Maslow (whose much better known hierarchy of needs owes much to Murray). At Coopers & Lybrand we employed an independent researcher to interview and tape clients and non-clients about their experiences with consultants. In listening to the tapes, we were seeking to identify the clients’ underlying motivation in using us, the competition, or no one. Our interest was not in the internal business case or reason given in the board paper or to internal audit, but in the psychological motivations of the decision-makers. We found these to be quite distinct – from blame avoidance to affiliation.

The final strand in my working life is as a think-tank author. In 2003 I started work on The Dead Generalist – Reforming the Civil and Public Services for Demos. The focus of the report was on the civil service, which undoubtedly needed wholesale reform. But, in framing the recommendations, it was evident that the whole centre of government needed reorganizing if a reformed civil service was to be effective – Stafford Beer’s Systems View of an Organization informed my thinking considerably. He describes the operational systems 1, 2, and 3, and makes the point that organizations often miss system 4 – inventing the future: monitoring the outside; developing strategies for research, products, markets, and organization – and system 5 – where the buck stops: the board, the chief executive, whoever monitors and balances systems 3 and 4 and the resources going into them.

This is exactly the issue at the centre of government – inadequate systems 4 and 5 – and interestingly one where Gordon Brown is partly proposing to make constitutional change. My systemic proposals are shown in Figures 3, 4, and 5. While the detail of these proposals has evolved, the need for these (Stafford Beer) systems grows more urgent if government is to serve us all much better.

No commentary on the impact of the Templeton course would be complete without loud mention of Norman Dixon and his On The Psychology of Military Incompetence. This is quite simply the best book on organization ever written. It has inspired me at every turn, particularly in understanding my own organization, Pricewaterhouse Cooper, at times of decline and proposing how to revitalize it.