Sunday, December 13, 2009

Things Fall Apart

England’s anti-drug department has spent the past two years denying a freedom of information request in regard to its domestic strategy to battle drugs. The Economist reported last week that this sort of behavior is symptomatic of England’s freedom of information act, passed in 2000, which contains 23 “get outs” in order to prevent bureaus from having to hand over classified information. Too often these requests get caught up in a legal quagmire and take up to a few years to grant. What separates this case, however, is the creative justification by the Home Office for not releasing the records:
The reason is that next March the National Audit Office (NAO), a public-spending watchdog, is due to publish a report of its own on local efforts to combat drugs. The Home Office says that to have two reports about drugs out at the same time might confuse the public, and for this reason it is going to keep its report under wraps.

The Economist calls this “the most inventive interpretation to date” with regard to the FOI act:
This is believed to be the first time that a public body has openly refused to release information in order to manage the news better. The department argues that releasing its internal analysis now “risks misinterpretation of the findings of the [National Audit Office] report”, because its own analysis is from 2007 and predates the NAO’s findings. The argument uses section 36 of the FOI act, which provides a broad exemption for information that could “prejudice the effective conduct of public affairs”.

It’s a bit ironic that a law passed to increase transparency is being enacted in a manner that’s anything but. Were this a bank hiding info from their shareholders, the public might be angrier.

But what’s more revealing about this case is the way in which laws breakdown overtime.

One of the most admirable accomplishments of the founders was to create a foundation that would stand the test of time. The constitution is in a sense radical, but it is also practical and realistic in its approach. A lack of long-term foresight is one of the largest underestimated factors playing into new legislation. Too often the debate surrounds the magnitude of the problem rather than on the solution.

The idea that we can fix deep problems like healthcare or the economy in one bill is not only unrealistic, but it underestimates the dynamic nature of the problem. A close analogy is found in large struggling firms which seek to rectify their problems with a silver bullet: They’ll hire an outsider CEO, pursue large mergers and acquisitions, or try extreme new strategies.

In a report this week on Toyota, The Economist discusses how often the best solutions are the least flashy and exciting. The subject of the report is Toyota, whose CEO worries they are on the path to failure and is working carefully to rectify the situation. He is reportedly working with tips from Jim Collins’ book, How the Mighty Fall. In the book, Collins
advocates old-fashioned management virtues such as determination, discipline, calmness under pressure and strategic decision-making based on careful sifting of the evidence. Often, the leader best able to halt a downward spiral will be an insider who knows how to build on proven strengths while simultaneously identifying and eradicating weaknesses.

In line with this, continues The Economist:
Mr Toyoda’s approach is not visionary. It is simple, incremental and requires painstaking attention to what the customers want. That is its virtue.

Occasionally I’ll be watching late night (or early morning) business TV, and news anchors will often ask CEOs “How did you do it? What’s your secret?” And by now it’s a cliché for the CEO to answer that there are no secrets and the only recipe to success is doing a good job, taking care of fundamentals, and perhaps an ounce of fortune here or there.

In a sense, the sentiment that there must be some secret to success is even more fascinating than the fact that there is isn’t. The sentiment is somewhat understandable, especially given how many perceived geniuses see the world in a radically unique manner.

But there is something different from such academic or theoretical smarts and business smarts. What distinguishes the latter is not clarity of mind and vision, but an ability to be completely in tune with the details of their products and with what people want. From this perspective, it’s obvious why radical shifts make the least amount of sense, particularly when it looks like they’re being done for the sake of change, rather than to alter the underlying content. Rather it’s a question of inspecting resources, using them to their full potential, seeing how they’ve worked in the past, and making the sort of detailed tweaks here and there that, say, an inquisitive public looking for an overarching secret to success wouldn’t be interested in.

It’s also, once again, an issue of focusing on the solution not the problem. A radical problem – even a crisis – need not always require a radical solution. An appliance that won’t turn might just have a minor wiring problem. Debilitating diseases are often rectified by targeting just one type of molecule.

Too often these sorts of small but effective solutions are confused with finding a silver bullet to solve a whole problem. The smarter solutions are distinguished however in their scope, their maximized use of available resources, and their ability to work within the system rather than to replace it. For instance, we do have an advanced healthcare system, and it can align patients’ needs with doctors. But we do not have enough doctors. An analogy is to a new computer which won’t turn on because it’s unplugged.

It is this sort of nuanced thinking which needs to be applied to legislation: An eye for the long-term effects – when deciding on item prices, Costco CEO Jim Senigal thinks about the effect they will have 20 years down the road – maximizing current resources, and a careful expert look at the details involved and how they work. Where these approaches can't be used due to the nature of politics - say, a lack of expertise in government, or an inability to be flexible - then the solution needs to be reformulated or dropped. A half-assed solution is the worst kind.



Media (in order of appearance)

Photo: (1)Toyota Camry, 02/26/2009, ogieabatillas; (2)Akio Toyoda, 10/24/2009, Shimoken; (3)Weird Al in Line at Costco, 12/26/2006, Vaguely Artistic.

Video: (1)Video, MrAlstec channel, of the song "Things Fall Apart" by Built to Spill from their 2009 album There is No Enemy.
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  1. one problem in getting an outside whiz kid is that they will be under pressure to get near instant results

    and these can often be achieved by creative accounting, selling productive assets, and other longer term disasters


  2. Exactly, it's the same sort of thinking that would bring in an outside 'whiz kid' which would also expect immediate results.


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