Management, private health care and a piss up

A new book has just been published which should be required reading for everybody:
The Management Myth: Why the Experts Keep Getting it Wrong – Matthew Stewart
The chief theme is the strange phenomenon of the management consultant. A strange and relatively newly minted creature who is by turns indispensable, omniscient, expensive and frequently wrong. Is anyone recognising the description yet?
Industry and government have already succumbed to an almost terminal infestation. The costs to employees, shareholders and the taxpayer are horrendous.
To those who have come across consultants before they will recognise it as a tacit admission that the current system is poorly run, bloated, bogged down in bureaucracy and could easily lose half its staff with no tangible effect to the service provided.
Stewart succinctly sums up the mystery of the discipline when recalling a conversation with Bruce Henderson, founder of the Boston Consulting Group, one of the best-regarded firms in the world:
“Henderson later described consulting as ‘the most improbable business on earth’: ‘Can you think of anything less improbable [sic] than taking the world’s most successful firms, leaders in their businesses, and hiring people just fresh out of school and telling them how to run their businesses and they are willing to pay millions of dollars for this advice?’ Even more improbable, one would have thought, is that a dozen men with no obvious claim to fame should, one fine Saturday morning, declare themselves experts in a subject whose contents they themselves would get to define, and then turn around and expect the whole world to pay for such expertise. And yet, against all odds, the world proved eager to buy.”
One of Stewart’s former professors from his life before consulting asks a question which needs to be asked by everyone: “How can so many who know so little make so much by telling other people how to do the jobs they are paid to know how to do?”
In this climate of austerity and the need for public sector cuts, when so many are worried about the possibility that nurses, teachers and other such essential workers will be forced out of work as government tightens its belt, it is worth noting that £2.8 billion of taxpayers’ money was spent on consultancy fees in 2005-06 alone.
If you want a definition of a bloated government pouring public money away, read The Management Myth and form your own opinion as to whether it’s money well spent.
An interesting snippet from Canada where the prison medical service has been contracted out to a private provider: Since the contracting out the number of people employed has risen by 13% and the mortality rate amongst prisoners has increased by 1.3%. That’s private health care for you.
A prominent Conservative council leader has cast doubt over the quality of the shadow Cabinet, suggesting they are not experienced enough to run a country.
Stephen Greenhalgh, leader of the London Borough of Hammersmith and Fulham and head of the Conservative councils’ innovation unit, made the remarks at a round table debate on November 26, run by Public Finance in association with Zurich Municipal.
Greenhalgh, who this autumn announced the borough’s fourth council tax cut in as many years, has been held up as an exemplar of good practice by shadow chancellor George Osborne. During a discussion on increasing efficiency through reforming local government, he said that increasing the power of councils would improve the quality of politicians.
‘My mates are all in the shadow Cabinet, waiting to get those [ministerial] boxes, being terribly excited. I went to university with them, they haven’t run a piss-up in a brewery,’ he said.
‘They’re going to get a department of state, in one case running the finances of the nation.’
Greenhalgh pointed to other countries, such as France and the US, where members of the government had typically served at a regional level earlier in their careers. ‘If you’re going to fail, fail running Alabama, fail running Texas, fail running the city of Paris – don’t just take over the country.’
Colin Talbot, public policy professor at Manchester Business School, agreed. ‘It’s not just the politicians – it’s the civil service,’ he added.
‘Despite 30 years of civil service reform, the vast majority of senior civil servants still have no experience of running anything outside public services.’

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