It doesn’t take a clairvoyant to predict the two items that will dominate the management agenda in 2015. The first, local and particular to the UK, is public services and more specifically the NHS. The second, more general and more pregnant with unknown unknowns, is the future of work in the app, on-demand or algorithm economy. Bluntly, is the day of the full-time job over?
Each topic is hugely important; each is at a fork in the road. Tiresomely, each is likely to follow the road more travelled, leaving the positive potential unfulfilled. Thus the Conservative recipe for the NHS and the public sector, competition and the import of private-sector firms and practices, is as numbingly irrelevant to the main issue, which is one of management and work design, as Labour’s medicine of higher spending. Meanwhile, NHS boss Simon Stevens thinks that technology is the answer. In a recent interview, he declared that ‘health service new towns’ such as Ebbsfleet in Kent would start from ‘the default assumption that digital interaction will be the main way that people will interact with the health service’... Rather than registering with a family doctor, he predicted, residents would sign up to ‘a virtual primary care service, and then . . . rather than booking an appointment, [they’d] just be able to call up a doctor or a nurse on [their] iPhone, and have the face-to-face interaction there’.
Well, perhaps. More likely, like almost everyone else, he has been ‘fooled by penicillin’, as the US surgeon Atul Gawande described the syndrome in his riveting 2014 BBC Reith lectures. Pace Fleming and Curie, argued Gawande, the key to excellent health outcomes isn’t brilliant individual discoveries that enable disease to be cured like magic with a couple of injections. It’s the painstaking, error-free application of well-known basic principles. Take the dreadful ebola outbreak in west Africa. Asked about the secret of bringing it under control, a professor of nursing told me, ‘It’s a system, isn’t it? If any part of the system drops, there’s leakage – that’s how the virus spreads’.
Gawande is the originator and author of ‘The Checklist Manifesto’. His case is that in a complex, interconnected world even routine procedures have too many steps and dependencies for any one brain to be able to keep in mind reliably. He found that even in good hospitals a simple checklist carried out before surgery regularly reduces post-op complications by 35 per cent. In Scotland, systematic application of the checklist has so far saved an estimated 9,000 lives. Gawande called his second lecture ‘The Century of the System’: ‘We spent the 20th century reducing problems to atomic particles,’ he explained. But to deliver against those great discoveries, ‘it’s now how things connect up that matters.’
Mutatis mutandis, similar systems considerations apply to the issue of jobs and automation, and management generally. Hyping the app economy, Silicon Valley takes a strongly technology-centric approach: geeks know best, is the attitude, and if they can do it it should be done. In the same way economists look at technology and innovation exclusively from a productivity angle. Economists have traditionally taken an optimistic line: if a technology increases the overall productivity of the economy, then increased overall well being outweighs the temporary discomfort experienced by those whose livelihoods are displaced by the new methods. But there are conspicuously more doubters this time round. Nouriel Roubini, the New York academic who predicted the US housing crash in 2007, wonders ‘Where Will All The Workers Go?’. In a new book, author Nicholas Carr warns that ‘to ensure society’s well being in the future, we may need to place limits on automation’. Noting (‘There’s an app for that’) that the app economy’s ability ‘to deliver labour and services in a variety of new ways will challenge many of the fundamental assumptions of 20th-century capitalism, from the nature of the firm to the structure of careers’, even The Economist concludes that the overall picture is more complex and worrying than many politicians and economists have been prepared to admit.
Why? What’s missing from the economic account is awareness of the shaping managerial forces. As the Peter Drucker Society's Richard Straub points out, the mismatch that automation is showing up is not primarily with skills but with opportunities to deploy and actualise human potential. In his book, Carr makes a distinction between liberating ‘humanist’ technology and its opposite, an ‘anti-humanist’ variety that simply displaces, deskills and sidelines people. That’s the effect of much current automation. Work by Clayton Christensen, confirmed by others such as William Lazonick, has shown that under pressure from the capital markets, managers have largely given up investing in market-creating innovation. They prefer cost-saving measures that substitute capital for labour, benefiting shareholders and triggering their own bonuses. Hence the decline of the middle-ranking job and the stagnation of wages. Drucker once wrote that the social responsibility of companies was to turn social problems into opportunity, jobs and wealth. But the chances of that happening when Silicon Valley entrepreneurs and corporate managers alike believe that their sole purpose is to enrich the shareholders constituency is precisely nil.
As with any other method, automation or algorithms are subservient to purpose. The kind of systems thinking that Gawande talks about is helpful here. Could automation and IT help in bringing ebola under control? Unlikely. Could it help in overcoming more banal but also debilitating and poorly treated conditions highlighted by Gawande such as coronary heart disease, asthma, high blood pressure and mental disability? Probably, in due course, through more systematic data collection and prompting to take medication (there are already apps for it). But it’s that way round. The order is: establish purpose, design against demand – and then see how computers can help humans to do it better. Human, not computers, by default.
Happy New Year.