New Labour 'Target Culture'

Ness Rowlah

Norwegian Wood
Target culture - everything is measured by targets. so you get school league tables, targets on hospital queues, on crime, on the "value" of public services, how profitable each post office or other semi-public instance is, on expelling a percentage of asylum seekers etc.

The idea is to create competetion and get "choice". Instead we get adjustments of work practices so these artificial targets can be met - ie moving patients out of the queues without telling anyone (ie "90% of all knee patients operated within 6 months"), the home office not following up on foreign criminals (since it will increase the number of asylum seekers) and so on. You get a massive amount spent on external consultants (I think Labour spends 3 or 4 times as much as the Tories did) - to set and measure these targets.
You get unrest and frustration among the people who are there to do the job - ie nurses and teachers.

It all boils down to one word. Trust. Blair doesn't trust anyone and New Labour seem to have this belief that everything can be condensed into on meaningful "number" on which your success is measured.
 

corneilius

Well-known member
Targets - exams.

Yes. I see that life is an extension of.... like.... School! From cradle-to-grave. Always tests. Exams. Always following authorities that are external.

In school, at home, at work .... praise for doing a meaning-less exercise, for doing it the 'right' way, chastisement for 'failure' or 'lack of cooperation' ...... from a very young age, 4/5 yrs old, and it sets the child up for life to respond .... in pre-determined ways ... to tests and exams without questioning ..... the context or value of those tests in any meaningful way. There's success, failure and rejection. There's peer pressure. There's an implicit acceptance of the external authorities' power over one.

Amazing how it has been applied, under the guise of 'delivering services', treating people as 'customers', or 'consumers' whilst removing more and more power from people by encouraging dependency - home ownership through life-long mortgage cycles, and by encouraging greed - providing home improvement loans, rising house prices and housing becomes 'investment' rather than resource. And you can do-it-yourself!

'Investment' in the Euro-Industrial past has often meant exploiting a resource, to make and place a product for sale, untill it (the resource) is exhausted, at minimum cost, whilst generating immense profits through mass sales. The power that evolved and grew with that wealthy network of merchants, bankers and generals remains in the same hands. The basic philosophy of greed has not changed ...... the method of enforcing it is what we laughingly call 'democracy'.... and

... by tricking the people into borrowing (voting/test) and into taking on vast sums of debt, (qualification - ongoing assessment/mandate) by using potent PR (political parties/ media) to craft a vision of a country of individual landlords, each with their own lawn to mow, patio to sit in, barbecues to enjoy and at the same time, as the value of the house increases, the lawn and the patio increase in value too! Add the incentive that anyone can make a profit out of their home. (reward) A potent mix.

So that people could 'gain' satisfaction by flaunting their new status as business moguls, ( sencond homes, holidays) there was plenty of media to encourage the whole process.

So that many people would feel 'left out' if they did not engage in the process, the advertising and propaganda was aimed at creating a fantasy (carot) and hiding the long-term reality (nasty little stick).

"Everyone's a house owner, these days!", "Loans are so easy to arrange!" "Low Interest!", or even "New Low, Low Interest Loans with Money Back And Free Holiday! Apply now!"

Or a 'home-owner' might lose the lot! "The value of your investmentmight go up or down......" Homeless! (big stick) ... well, especially since most new or maintained council housing has been pretty much at non-starter status since those Halycon days....

So while it is the house buyer who takes the risks, who pays/borrows evermore for the housing, in a time of comparatively static build-costs, (which is most of the time) who is getting the benefit of the ever increasing difference between house price and build-cost price? The banks for the services of the debts, and the largest landowners. Whose land value sky-rockets?.... who will profit out of the build-up to the Olympics 2012 in London?

All because so many of us have become greedy eejits........ while we were focussed on making money, spending it and being good consumers, we missed the bigger picture.

The current justification for tests attempts to hide from view the negative intent to remove power from people who are to be tested. The ID card is a state test. Almost a continuum of state testing. "Can I see your ID, sir?"

So carrot and stick. Donkey moves. We pay. Elites collect. Conventional wisom. Status Quo. Race to the Finish Line. Doh!
 
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Ness Rowlah

Norwegian Wood
as on cue, Simon Caulkin in The Observer today

Einstein said that doing the same thing over and over and expecting a different result was a definition of insanity. That's what the obsession with targets is. Whether in business or public service, misuse of targets is the single most important reason for public cynicism, rock-bottom employee morale and failed improvement efforts. Targets wreck systems, driving up costs and making things worse. Can we dispose of them once and for all? Let's try.

What's wrong with targets? Yes, everyone has them - but whether in the public or the private sector, they have the same perverse results. The attraction of targets is their simplicity. But it's a fatal one. As part of the misguided managerial obsession with quantification, they misapply partial, linear measures to a complex, shifting world. As Blair's undertaking to magic away asylum seekers shows, they are basically a wish. Bearing no relation to the ability of the system to deliver it, they are arbitrary - they might as well be plucked from the air.
 
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tatarsky

Well-known member
Hang on...

So what are we all suggesting should replace a system of targets? If there is no clear objective behind any organisation, it is bound to end up being a sprawling mass of ineffectual individuals pulling in different directions. Almost by definition, if you don't have clear objectives, you will fail as an effective organisation, because there's no definition of success or failure.

The first question any organisation should be clear about is: "What does success look like?". And in my experience (both private and public sector), I've come across many an institution that is unclear about its strategic direction, and yes, its targets.

To my mind, it is absolutely ESSENTIAL that targets be set. The problem that has occured under New Labour, is not the setting and communication of targets, but rather, that these targets have been implemented under a system of PAYMENT BY RESULTS (PBR).

It is PBR that produces the perverse effects that we're all so aware off, not the setting of the targets, because PBR gives incentives to those actually doing the work to try and beat the system, i.e. to make it seem as if you're getting results when in truth you're no where near. The targets are taken far to literally, rather than understood in the spirit in which they were meant, and so the workers on ground look for loopholes, or do everything they can to hit a particular target to the detriment of everything else. There's also the massive problem of fiddling the figures. This is particularly true in the public sector, because the metrics are less obvious. The private sector will typically have very measurable, easily understandable, specific targets about shareholder value, share price, market share, profit margins, etc.. The public sector doesn't have that luxury - for example, there are numerous things you could measure a performance of a hospital on, all of which you'd have a job to collect data on, which allows loads of room for fiddling the figures, and ignoring other areas not explicitly related to pay.

I suspect that New Labour got the notions of targets from business, as it is does work in this area. But they probably didn't realise just how dangerous it is to do within the public sector, because of the lack of clearly defined metrics, which results in weird incentives.
 

gek-opel

entered apprentice
You are correct there Tatarsky--- The whole problem originates with attempting to import a business model into sectors which, in their current form, aren't really amenable to them. The cost of establishing and measuring these things must be extortionate- where are the comparisons and cost benefit analyses here? (ie- of marketisation vs non-marketised public services)

Also- you seem to be arguing for a system of targets which are not used as the basis of funding-- perhaps this would iron out some of the difficulties (the "teach for the exam only" syndrome, if you like) but would undermine the ability to create a market-like position (which is the whole point). Surely without winners and losers, (and ultimately closures in some cases) the system (as argued for by New Labour) is not going to be operating in anything resembling a free market way.
 

Ness Rowlah

Norwegian Wood
From what I've seen the private sector in the UK is full (but not as full as the New Labour's regime) of the same silly target culture. I agree that you should have targets and a proper definition of success (in business), but too often they are boiled down to an exact number of some sort - ie a budget number or a stupid "personal target".

And if these numbers are not met then it's a failure. So the organisation adjusts to meeting these targets - ie that call centre up north who hung up on clients before the cases were properly closed, just so they could meet a target like "80% of calls should be finished within 3 minutes". From a management perspective the monthly report might look great ("we met our 80% target - well done lads&girls"), but on the floor everyone knows it's just bull. Things might look good for a few months, even years - and then you start wondering where your business went.

The problem with metric targets is their rigidity - so you get into this situation where the "budget have to be met" (so ie sack staff or "we have to buy 150 grands worth of new kit in the next two months or we will not get the budget next year"), where normal staff cannot even make simple decisions on ie discounts for bad stock, where staff are rotated on a "sack 10% annually basis" (it's a target).

It's the British trust (and inflexibility?) problem - at least compared with Scandinavia - http://www.fsd.uta.fi/tietoarkistolehti/english/15/kouvoESS.html .

What I am trying to say is that "target culture" as in meeting an artificial metric target and building a large infrastructure to measure these targets (aka "management consultants") is a massive waste - both in private and public sectors. It might make sense for train tables, but measuring patient happiness in numbers of chocolates received is plain stupid.
The patient and the medical staff knows when their "target" has been met, there is no need to measure children's academic progress from kindergarten and so on - but it seems to be a strong belief that all this IS needed in the UK. New Labour certainly subscribes to this, as does parts of the private sector and I suspect the Lib Dems and the Tories to some degree.

I find what they do in one of the largest Swedish banks (Handelsbanken) quite refreshing - goals exist, but no budgets -
http://www.juergendaum.com/news/02_24_2003.htm

In ourbank managing without any budget worked from the beginning. We didn’t miss it even the first year, because the new way of measuring true performance and to benchmark was so much better compared to how we did it before. So I think in general, the process of abandoning the budget is a very simple and an easy one. You just have to dare to take the decision. But I think there is one major challenge. And that is that you have to rely on people to be able to run a devolved organization. So the difficult thing is probably really to devolve an organization and to say to yourself – being top management – that if we have good people out there and they know what the company’s corporate goal is and they have the tools to be able to do good business and they know we will measure their performance in a realistic way comparing them to peers, then they will do a good job. And having that decentralized, devolved profit center organization you certainly don’t need a budget. So the major challenge in the processis to enable the organization to work on a trust basis. And people have to know what the corporate goals are and they have to know what they have to do.

This is from Handelsbanken's website http://tinyurl.com/g8dbm

  • Handelsbanken's financial goal is to have higher profitability than the average for its competitors
  • The financial goal should be achieved by the Bank having more satisfied customers and lower costs than its competitors
and
  • A strongly decentralised organisation - the branch is the Bank
  • The customer in focus - not individual products
  • Profitability is always given higher priority than volumes
  • A long-term perspective
  • Oktogonen - the Bank's profit-sharing system

Two simple goals and a five point corporate philosophy. I like that.

I suspect that we are actually quite on the same place on "counter culture" gek and tat.
 
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Slothrop

Tight but Polite
tatarsky said:
I suspect that New Labour got the notions of targets from business, as it is does work in this area. But they probably didn't realise just how dangerous it is to do within the public sector, because of the lack of clearly defined metrics, which results in weird incentives.
I think (as is so often the case) that some of the blame can be levelled at Thatcher. Part of the reason that there's this 'need' for targets is the legacy of tories' extreme capitalist realism - the view that 'professionalism' and 'pride in your work' are hippy bullshit, and the only way to make people work effectively is to apply a carrot / stick results based approach, and to micromanage them to within an inch of their lives.
 

IdleRich

IdleRich
You're dead right about business consultants applying their methodology to the public sector resulting in target-setting. McKinsey Consultancy has a motto something like "everything can be measured, and what is measured can be managed". Lord Birt, government "blue-skies thinker" used to work for McKinsey (and I think he may still do so).
What do consultants (or blue sky thinkers) actually do?
 

gek-opel

entered apprentice
And how many millions of £s a year are we the taxpayer blowing on these cuntsultants? I heard it was roughly half of the total current NHS defecit...
 

tatarsky

Well-known member
gek-opel said:
Also- you seem to be arguing for a system of targets which are not used as the basis of funding-- perhaps this would iron out some of the difficulties (the "teach for the exam only" syndrome, if you like) but would undermine the ability to create a market-like position (which is the whole point). Surely without winners and losers, (and ultimately closures in some cases) the system (as argued for by New Labour) is not going to be operating in anything resembling a free market way.

Well...

It may be a reasonable ambition to try and gain efficiencies in the public sector by seeking analogies with the mechanisms of the private sector. But frankly, if you analyse the analogy correctly, the manner in which they've done this is pathetically inconsistent.

There are 3 different levels at which you could apply PBR: Frontline workers (eg Doctor), Management (eg Doctor's operational management), and Institution (eg Hospital).

Workers

Relatively few businesses have PBR schemes set up for their workers. It's becoming more prevalent, but it is still rare. The government seems to be attempting to set up these schemes at every level though, to lengths that the private sector would reject. For example, you could imagine that a fairly reasonable PBR scheme could be applied to check-out workers at Tesco. The more people go through your till, the more you get paid. Simple. What could go wrong? Well, even here, it's easy to see how someone pressurised into getting as many people through the tills as possible would be rude, which would turn away customers. Plus, no more bagging up (which people like). Plus, they'd probably start making mistakes like giving people the wrong change.

There is absolutely no need for PBR at the level of the front-line worker - regular salary reviews with line managers should serve this function perfectly, providing sufficient motivation to perform well, for the company as a whole, according to it's stated objectives. Everything can be taken into account at a salary review. The line manager will no doubt look at relevant data, but weight everything up rather than going purely by one number.

Further, there is absolutely no difference between the private and public sector here. The notion that the public sector is in some way marketised is totally spurious. McDonalds does not relate pay to the number of burgers their spotty oiks flip.

Management

The analogy here is equally inconsistent. It's perhaps more common to have PBR for management (i.e. massive bonuses). These bonuses will almost always been based upon profit (or at least should be - we'll ignore any cronyism). The trouble is, there is no direct analogy to profit. The beauty of profit is that it is the combination of a huge range of factors, all boiled down into one meaningful number. There will be no such number in most public sector enterprises, mostly because there is no effective price mechanism.

And even so, not all business have this system. I'd say most probably pay according to the market wage. The argument is equally as weak as it was for the Workers, and for the same reasons.

Once again, it is useful to have metrics to judge management's performance, but these are primarily used in regular salary reviews, not in some direct link to pay. The only difference is in who is deciding on the increase in pay (or whether a manager should be sacked). Who it is depends on the corporate structure. But that decision is only relatively rarely based on a single number (profit). Most of the time it will be someone weighing up lots of things: profits, market share, what the future looks like, whether they're well liked even - it's not a simple linear mechanism by any means, and typically has a human element.

Institutional

There are two main mechanism which determine whether a business succeeds or fails: 1) The Customer and 2) The Stock Market

Attempts are being made to make the public sector more amenable to 'customer' choice by allowing people to make a decision as to which hospital to go to (say). This mechanism might be employed successfully in an area like health (although i have my doubts here anyway...), but it's hard to see how it could be applied in most other areas of the public sector. Anyhow, this is not explicitly related to the subject of targets, so it's another argument really.

The Stock Market represents the main mechanism that PBR attempts to replicate. But again, the analogy is inconsistent.

The stock market will punish or reward a company by giving or taking away funds. It makes this decision based on profit (and future profits). Profit is determined by a few things: Sales volume, price, and costs. Price is an absolutely crucial component in there. A company could sell loads more stuff if it dropped it's price, but it's margins would disappear and it wouldn't make any profit. Encaptured in the price is a measure of QUALITY, which is determined by the consumer. The trouble with the public sector is that there is no such measure of quality most of the time.

In fact, in most cases, the very reason why it is public sector in the first place is because there is no effective price mechanism. If there was, it would be private sector.

I suppose the attempts being made through targets do occaisionally try to go beyond mere volume to have some kind of quality component. But this component will only ever be a mere proxy. It will not do the job of price, and will always miss some aspects. You could for example base it on survey's of what people thought of the service. But that's crazy - it's be rather like the entire funding of a company boiling down to a focus group.

---------------

Going beyond the public sector, there are studies which have shown that PBR is generally a bad idea in any case. I've read of one study which divided people in to two groups. Both groups were given puzzles to play with. The first group was allowed to play freely. The second group was paid for each correct solution to the puzzle. Then after time was up, both groups were allowed to go on playing if they wished. The unpaid group did much more extra work. So, PBR reduces the enjoyment that work can offer.
 
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tatarsky

Well-known member
Ness Rowlah said:
Two simple goals and a five point corporate philosophy. I like that.

Yeah, those crazy Scandinavians. Why do they get to have all the fun? Still, I sure wouldn't want to work in the finance dept. of that bank. Their finance director must have chrome balls.
 

Ness Rowlah

Norwegian Wood
gek-opel said:
And how many millions of £s a year are we the taxpayer blowing on these cuntsultants? I heard it was roughly half of the total current NHS defecit...

NHS's new IT system: total bill might be up to £30 billion (does not give great
confidence in the Gov's numbers on the next IT disaster in the waiting:
the ID card system).

Labour's spend on management consultants: £3 billion

Not clear if the last number is on NHS consultants only
or Labour's total spend on management consultants (in which
case the number probably includes Alastair Campbell).

Nick Cohen in this Sunday's Observer

The failure of choose and book is just the start. Ministers admitted on Wednesday that the overall cost of the NHS's new IT system has tripled from £6.5bn to £20bn. Computer specialists said that the politicians still aren't facing the unpleasant truth and the real cost of the computing disaster will probably be £30bn. An awful lot of that wasted money has been squandered on management consultants who are meant to have the expertise which guarantees that organisations such as the NHS have computer systems that arrive on time and on budget and work when the public servants turns them on.

The Times reported last week that the state subsidies to vastly overpaid consultants increased by 23 per cent last year, to £3bn. They must now rank as New Labour's most favoured client group: a dependancy culture of the upper middle class. So willing are ministers to provide them with corporate welfare that 26-year-olds from the top consultants can charge an NHS trust £3,000 a day for their services, secure in the knowledge that even if their advice leads to disaster, ministers won't punish or blacklist their employers.

Read: EDS, IBM Global Services, CSC, Accenture etc.
 
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gek-opel

entered apprentice
Hmm- so why is it that these Govt computer systems ALWAYS go vastly over-budget? I remember reading an IT trade mag in the mid-90s and there were complaints back then about exactly this kind of thing, its been going on for years. You would think that by now they would at least BUDGET for the expected level of overspend...?
 

tatarsky

Well-known member
Yeah, the sums of money involved in this NHS IT fiasco are quite staggering. I mean - £20bn! To put that it context, that's just over 1.5% of GDP (if my sums are right).

Was talking to a mate about this today and he reckoned that the reason why it's gone so horribly worng (and why it usually has in other instances too) is that the government basically storms ahead with an idea without actually planning it properly - they get excited about some big new investment and want to PR the fuck out of it as quickly as they possibly can. The end result is that the whole thing is a disaster - queue the consultants to sort out the mess!

I believe what has happened in the specific case of the NHS IT project is that they've ended up rebuilding the damn thing about 5 times, because they build it, realise something is missing or wrong in some way, and then have to start from the beginning again.
 
gek-opel said:
Hmm- so why is it that these Govt computer systems ALWAYS go vastly over-budget? I remember reading an IT trade mag in the mid-90s and there were complaints back then about exactly this kind of thing, its been going on for years. You would think that by now they would at least BUDGET for the expected level of overspend...?

The private and semi-state sectors frequently have even bigger cost over-runs (eg Boeing, NASA, with computer system failures and development delays running into the billions). But consider:

Two surveys illustrate the scale of the problem. In 1995, The Standish Group reported that the average US software project overran its budgeted time by 190%, its budgeted costs by 222%, and delivered only 60% of the planned functionality. Only 16% of projects were delivered at the estimated time and cost, and 31% of projects were cancelled before delivery. Later Standish Group surveys show an improving trend, but success rates are still low. The Standish Group's "Chaos Chronicles" report for 2003 analysed over 13,000 IT projects, and estimated that nearly 70% either failed completely or were "challenged" (ie although completed and operational, exceeded their budget and time estimates, and had less functionality than originally specified). This led to their estimate that in 2002 the US "wasted $55 billion in cancelled and over-run IT projects, compared with a total IT spend of $255 billion."

The picture is fortunately not one of unrelieved gloom. Across Europe, there are a few companies who deliver software projects significantly more quickly and more cheaply by using "formal methods"—software engineering methods that are soundly based in computer science—and mature engineering processes. These companies are increasingly willing to offer warranties, because they know that they can deliver software with 0.1 to 1 fault per thousand lines, instead of the 10-20 faults per thousand lines that are more typical. Such companies are able to analyse the requirements that they have been given by their customers, to reveal the inconsistencies and to draw out the deeper requirements that would otherwise result in late changes to the project requirements.​

Extract from Select Committee on Constitutional Affairs Written Evidence, Memorandum by the UK Computing Research Committee

Or take the FBI in the US, still developing its new computer systems, the Trilogy Project, with massive cost overruns:

In November 2000, Congress wrote a check for $100.7 million to pay for the first year of the $379.8 million Trilogy project. in January 2002, responding to the Sept. 11 attacks, Congress handed over the remainder and an extra $78 million to speed things up ...

Trilogy's deadlines kept slipping, the General Accounting Office (GAO) noted, and the FBI did not meet its July 2002 deadline. The GAO gave the FBI a 1-out-of-5 rating, with 5 being highest. The FBI, the auditors concluded, had failed to appoint a chief information architect, create a master IT plan and establish an "architecture-steering committee"--all of which are required to achieve even a modest rating of 2 out of 5.

That has, once again, sparked criticism and increased scrutiny from Congress. Sen. Charles Schumer, D-N.Y., wrote a letter last month to Ashcroft and Mueller, complaining about "continued delays, despite the nearly $600 million in funding" and cost overruns.​

But back to the NHS, and its "supercomputer", The Connecting for Health scheme, which is intended to create centralised medical record systems for 50m patients and link more than 30,000 GPs in England to 300 hospitals by 2012. Many doctors and IT experts are concerned that a centralised system will make the NHS even more vulnerable to damage from computer failures.

Lord Warner, the health minister, confirmed last week that the system was already delayed and would cost up to £20 billion. The figure originally given by the government for the project was £6.2 billion.

The NHS Blog Doctor writes:

The NHS IT bill is already a matter of national scandal. The only thing in doubt is how many billions have been wasted. Dr Crippen has conservatively talked of £20 billion. Wat Tyler, who is more versed in the arcane pathways of public finance, is floating a figure of £60 billion.

When the NHS bought all this useless IT, part of the conditions imposed upon it by the suppliers was that a large number of NHS staff would be seconded to the IT companies – presumable to advise on what exactly was required. Unfortunately, the doctors and nurses and, yes, even the much maligned administrators were a bit tied up with other matters, and could not be released to play computer games. So now the NHS is going to have to pay a penalty:

“But in the South of England, the NHS has been unable to meet a contractual obligation to place the equivalent of about 50 employees with Japanese-owned Fujitsu, and it is to pay £19m to the supplier to be released from the requirement.
This means Fujitsu will receive compensation to the equivalent of about £380,000 per NHS employee – but the supplier could have potentially fined the NHS up to £1.4m per employee over the 10-year life of the contract if it failed to meet the contractual obligation.

The £19m to be paid to Fujitsu will come from hard-pressed NHS budgets.

In the North West and West Midlands cluster, the NHS has a contractual obligation to place about 50 full-time equivalent staff with US company CSC, and papers to the boards of trusts show that managers are struggling to make up the numbers. They face penalties from CSC of up to £6.9m a year, a total fine over the 10-year life of the contract of about £70m. The potential penalty is reduced for each NHS employee placed with the supplier." (Computer Weekly – full article here)​
Dr Crippen does not have enough fingers and toes to get a feeling for all these billions. In context, a “mere” £20 million is but a drop in the ocean and so I suppose there is little point in getting angry.​

And then remember the £1.9b cost overrun for the now-abandoned 16-year-long computer Operational Strategy at the Department for Work and Pensions. Culprit: Accenture, active on the NHS computer chaos. And guess what: Accenture has been awarded another chance to screw up all over again - another new computer system for the Department for Work and Pensions, called CIS, claiming it will cost just £72m. This is to Laugh.
 
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