Stumbling and Mumbling

On cargo cult management

chris dillow
Publish date: Wed, 02 Apr 2014, 02:43 PM
chris dillow
0 2,773
An extremist, not a fanatic

Alastair Cook and those calling for Ed Miliband to be bold and transformational have something in common. Both are practicing what I've called cargo cult management.

What I mean by this is a focus upon ritualistic aspects of "leadership" whilst neglecting the question of how exactly the rituals are related to outcomes.

For example, Cook says it took a lot of guts to sack Kevin Pietersen. But who cares? What matters is whether the decision was right. And given England's shambolic showing the World Twenty20, this is questionable.

Demands for Miliband to show "boldness" display a similar fetish of courageous leadership to the neglect of outcomes. What matters isn't whether policies are bold or not, but whether they are right. By all means argue for (say) a looser fiscal policy or higher minimum wage, but demanding boldness as a good in itself is just silly: in this sense, I'm with Hopi. Boldness, bravery and guts can easily become recklessness, and cowardice can be prudence. I'd rather decisions were cowardly but right than bold but wrong.

But it's not just Cook and the Labour left that seem to be guilty of cargo cult management. John Kay today reminds us of how New Labour was too, in believing that ritualistically declaiming worthy objectives was somehow sufficient:

The 2008 Climate Change Act supposedly sets a "legally binding" obligation to reduce greenhouse gas emissions by 80 per cent by 2050. The 2010 Child Poverty Act requires that child poverty be eliminated by 2020. Neither piece of legislation makes provision for how these outcomes will be achieved.

The Tories have been guilty of the same thing. For all Osborne's talk about tough policies to reduce government borrowing, this is much higher than either he or Alistair Darling envisaged back in 2010. Any schoolboy Keynesian could tell you why; policies that depress GDP also depress tax revenues.

And whilst the bedroom tax was supposed to be "tough", it has not had the desired effect of forcing people into smaller accommodation but has instead merely forced them into rent arrears. The bedroom tax should be renamed the Wonga subsidy.

In this fetishization of toughness and boldness, politicians are borrowing their ideas from the worst of corporate management. Back in the 1990s, "Chainsaw" Al Dunlap earned a reputation for a tough-minded focus on shareholder value by sacking thousands of workers. But when he joined Sunbeam, this strategy failed, and it transpired that he was merely cooking the books. Sunbeam went bust, and Dunlap has been disqualified from being a company director.

This sort of silly thinking has also infected ordinary people (very ordinary ones). On Sunday, S***s fans got the hump at Tim Sherwood sitting the stands rather than standing on the touchline - without asking how being a few yards nearer the pitch would enable him to achieve the impossible feat of polishing a turd.

In all these cases, there's a common theme. It's a version of the representativeness heuristic - an unthinking belief that causes will resemble outcomes. The Labour left think bold talk will lead easily to better conditions for workers, just as Osborne thought "tough decisions" would reduce the deficit and Dunlap thought cutting costs would raise profits. In a complex world with massive uncertainty and multiple feedback mechanisms, however, the link between macho leadership and actual outcomes is not so simple. As John Kay has so wisely said, sometimes our aims are better achieved obliquely.

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