Tag Archives: Bureaucracy

Is Government Funding the Kiss of Death?

Over the past few years/months talking to various people in the charitable and non-profit sector a recurring theme has emerged: More and more of them are either eschewing government funding or trying to find ways to do so.

Given that governments are the largest source of funding… why would they do this?

The reason is simple. The overhead of administering, overseeing and reporting back on (particularly federal and provincial) government grants or awards has become so onerous that the costs of oversight are increasingly greater than the value of the grant itself. This is particularly true of smaller grants (in the 5 digit range) but still true of even 6 figure awards. In addition to oversight, many people in the sector inform me that governments are not only looking more closely at how recipients spend the money they receive but are increasingly assertive in specifying how they should spend it.

So, in sum, it’s not hard to see why organizations want to walk away. The costs of the money is increasingly too great. On the one hand, compliance means more and more money is diverted to administration – rather than the core mission of the group – and increasing oversight means a loss of autonomy. Consequently, less money can go towards innovative, but riskier, new approaches that might yield better outcomes, or greater efficiencies.

The outcome, I fear, is a non-profit and charitable sector that starts to cleave in two.

On the one side will be non-profits (like those of some colleagues I know) that see eschewing government money as the only way to stay nimble, innovative and independent. These groups will either find progressive granting organizations, wealthy individuals or alternative ways create revenues. Freed to spend their funds as they see best, the most effective will achieve escape velocity and be able to operate for long periods of time without needing to consider government funding.

On the other side, there risks being those locked into government dependency. Unable to fund new projects and innovative approaches that might attract new external funding, they will be trapped in a government deathgrip, forced to adopt traditional approaches and take on excessive overhead, all in order to meet their funding obligations. In short, they will need to mirror the very bureaucracy that not being independent from was what was supposed to give them a competitive advantage.

On the one hand, this is the kind of situation that makes me jealous of the United States with its large pool of private foundations and granting organizations that ensure innovation thrives in the non-profit/charitable sector. But that is a structural difference smaller countries like Canada will not be able to overcome. We need our government’s to be smarter since we can’t replicate the American model.

This is made all the more difficult since those who’ve achieved escape velocity want little to do with government, while those dependent on government funding are probably the least likely (or empowered) to speak up. Sadly, no one wants to upset the government… (why bite the hand that feeds, even if the fruit is poisoned?) so we live in a world of silence on this issue.

I’ll confess, I’m somewhat stumped by the issue but I am worried about it. This country depends on non-profits more than people realize… anything that hampers their effectiveness is a collective drain on productivity, efficiency and competitiveness, to say nothing of social justice.

Has Canada entered a Bush-Like Vortex?

No new piece on eaves.ca today as I wrote a special for the Globe and Mail.

The piece is entitled Has Canada entered a ‘Bush-like vortex’? and explores how the Colvin testimony suggests the public service has become compromised in a critical way. Specifically, it suggests that increasingly, public servants are being forced to shape facts and the truth to fit a narrative already constructed by our government. It’s a dangerous path down which president Bush took the American public administration with disastrous results. Here, with out traditions of a greater separation between the political and the bureaucratic, the outcome could be even worse.

Anyway, you read it here on the Globe site. I’ll cross post it tomorrow.

Bureaucracies and New Media: How the Airforce deals with blogs

A friend forwarded me this interesting diagram that is allegedly used by the United States Air Force public affairs agency to assess how and if to respond to external blogs and comments that appear upon them.

Airforce Blog Reaction

It’s a fascinating document on many levels – mostly I find it interesting to watch how a command and control driven bureaucracy deals with a networked type environment like the blogosphere.

In the good old days you could funnel all your communications through the public affairs department – mostly because there were so few channels to manage – TV, radio and print media – and really not that many relevant actors in each one. The challenge with new media is that there are both so many new channels emerging (YouTube, twitter, blogs, etc…) that public affairs departments can’t keep up. More importantly, they can’t react in a timely fashion because they often don’t have the relevant knowledge or expertise.

Increasingly, everyone in your organization is going to have to be a public affairs person. Close off your organizations from the world, and you risk becoming irrelevant. Perhaps not a huge problem for the Air Force, but a giant problem for other government ministries (not to mention companies, or the news media – notice how journalists rarely ever respond to comments on their articles…?).

This effort by a bureaucracy to develop a methodology for responding to this new and diverse media environment is an interesting starting point. The effort to separate out legitimate complaints from trolls is probably wise – especially given the sensitive nature of many discussions the Air Force could get drawn into. Of course, it also insulates them from people who are voicing legitimate concerns but will simply be labeled as “a troll.”

Ultimately however, no amount of methodology is going to save an organization from its own people if the underlying values of the organization are problematic. Does your organization encourage people to treat one another with respect, does it empower its employees, does it value and even encourage the raising of differing perspectives, is it at all introspective? Social media is going to expose organizations underlying values to the public, the good, the bad and the ugly. In many instances the picture will not be pretty. Indeed, social media is exposing all of us – as individuals – and revealing just exactly how tolerant and engaging we each are individually. With TV a good methodology could cover that up – with social media, it is less clear that it can. This is one reason why I believe the soft skills are mediation, negotiation and conflict management are so important, and why I feel so lucky to be in that field. Its relevance and important is only just ascending.

Methodologies like that shown above represent interesting first starts. I encourage governments to take a look at it because it is at least saying: pay attention to this stuff, it matters! But figuring out how to engage with the world, and with people, is going to take more than just a decision tree. We are all about to see one another for what we really are – a little introspection, and value check, might be in order…

CEO compensation – a symptom of institutional decay

So reading Emergence sprouted another thought regarding the increasingly bankrupt (literally and figuratively) model of the classic bureaucratic organizations. Again I point to Umair Haque’s post on the recent financial crisis:

The first step in building next-generation businesses is to recognize the real problem boardrooms face – that we’ve moved beyond strategy decay. Building next-gen businesses depends on recognizing that they are not about new business models or even new strategies.

The stunningly total meltdown we just witnessed in the investment banking sector – the end of Wall St as we know it – was something far darker and more remarkable. It wasn’t simple business model obsolescence – an old business model being superseded by a more efficient or productive one. The problem the investment banks had wasn’t at the level of business models – it had little to do with revenue streams, customer segmentation, or value propositions.

And neither was it what Gary Hamel has termed “strategy decay” – imitation and commoditization eroding the returns to a once-defensible strategic position, scarce resource, or painstakingly built core competence.

It was something bigger and more vital: institutional decay. Investment banks failed not just as businesses, but as financial institutions that were supposedly built to last. It was ultimately how they were organized and managed as economic institutions – poor incentives, near-total opacity, zero responsibility, absolute myopia – that was the problem. The rot was in their DNA, in their institutional makeup, not in their strategies or business models.

I think Umair is on to something and that CEO salaries may make for a great case in point.

For many years the left has decried growing CEO salaries as a sign of the market’s excesses – or worse, of a broader culture of greed. But excessive senior management salaries are, from an investors perspective, are a symptom of a staggeringly flawed institutional model. If your business depends that much on the one person at the top – if the current and future value of the entire organization rests in the hands of one person… then yikes! Shareholders beware.

The idea that a CEO is worth 1000, or even 100 times more than the “average” workers in an organization isn’t just a problem from a morale or ethical perspective (it may or may not be). If your average worker isn’t contributing that much value in relation to their ultimate superior than you have a massively top heavy – and hierarchical – organization. One where, I suspect, Umair would find there are poor incentives, near-total opacity, zero responsibility, absolute myopia. To be sure, ideas are probably not being floated about, and they are almost certainly not successfully emerging from the bottom up.

In short, it isn’t a happy place to be. And it turns out the markets may not think it is so good either.

Comfort with ambiguity

Finally polished off “Emergence” by Stephen Johnson (another post on it here) – the last 30 pages have been lingering for about 2 weeks.

Johnson’s ideas continue to touch on themes I’ve been explaining to others for two years now. More recently, on why boomers continue to misunderstand their Gen Y cousins. Take for example, Johnson’s conclusions about what video games are doing to all of us (but Yers in particular):

The conventional wisdom about these kids (gen Yers) is that they’re more nimble at puzzle solving and more manually dexterous than the TV generation, and while there’s certainly some truth to that, I think we lose something important in stressing how talented this generation is with their joysticks. I think they have developed another skill, one that almost looks like patience: they are more tolerant of being out of control, more tolerant of that exploratory phase where rules don’t all make sense, and where few goals have been clearly defined. In other words, they are uniquely equipped the more oblique control system of emergence software (and, I might add, emergent systems more generally).

While the boomer vs. gen Y comparison is generally apt, l think even more than being generational this is class based. Emerging creative classers are not only comfortable with this exploratory phase, they actively need it. This is why the large bureaucracies (but not necessarily large organizations) struggle to attract and retain both the demographic and the class. They often force upon their workers too much structure, to much rigidity on the front end, evaporating the creative opportunities where we might imagine something better, bigger or more effective.

A note of caution too for those who think the financial collapse augers a new era of safety in large bureaucracies. Don’t fool yourself. It was the large bureaucracies of the banks and government regulators, working in tandem, that got us into this mess. While some creative classers may attempt to retreat to the safety of a large government or private sector institutions I suspect that many will do just the opposite. As bureaucracies become still more risk averse and controling their capacity to foster to new ideas and approaches will be that much more constrained. The “outside thinkers” will be in still greater demand.

The Straw Man: Angela Majic on Public Service Sector Renewal

In the most recent version of Optimum Online Angela Majic writes a response to my piece entitled “Generation Y Challenges the Public Service” (which is itself a transcript of a speech I gave to the Association of Professional Executives in May of 2007)

Unfortunately, Ms Majic’s comments say very little about my article. At best her critiques are either aimed at arguments I don’t make, or inadvertently confirm the arguments I do make. At its worst her piece is a case study in why public service renewal may indeed be far off.

Take, for example, one of her opening sentences:

“One gets the impression from his comments that Gen Yers may be frustrated by the dominance of Baby Boomers.”

This however, is not the case. There was very little in my talk about intergenerational conflict or frustration with boomers. What my talk did focus on was challenging the assumptions that many of us hold about the Public Service and to outline the growing gap between the culture of the public service and that of younger (and all) Canadians.

There is frustration – but it isn’t directed at boomers. It is directed at organizational structures and modes of thinking that increasingly hamper public servants. My arguments aren’t generational. Indeed the problems outlined affect Gen Yers (who are simply unsure about the Public Service), as much as they do Boomers (many of whom tell me they are howling in their cubicles). Indeed, what makes Gen Y important is that they are growing up in a world of labour scarcity and may not tolerate howling in a cubicle. They’ll simply turn their back on the public service and seek opportunities elsewhere.

After misleading readers about both the purpose and substance of my article, Ms. Majic then launches into a spirited defense of “experience” and the need for “intergenerational dialogue.”

“Going to school longer is not necessarily the same thing as being better educated. While one cannot deny the benefits of formal learning, and the fact that educational qualifications are crucial to being able to function effectively in a knowledge-based economy, experience can be a great teacher. At the risk of restating the obvious, people who are older have more experience…

…Only through a genuine dialogue that respects the abilities, knowledge and talents of all parties can we hope to bridge the often mentioned, yet seldom understood, “generation gap” in the workplace.”

Sadly there is nothing in my talk that suggests I’m opposed to either experience or dialogue, nor did I suggest at any point that education was alone sufficient to fulfill every role in the public service. Indeed, my invitation to APEX was extended in order to prompt that dialogue – by sharing with executives (mostly boomers, with some Xers) the perspective of Yers and younger Xers.

So I’m neither opposed to dialogue or experience. However, I am opposed to unstated and strongly held assumptions that cause us to misunderstand a situation or engage in faulty analysis. In addressing this part of my talk, Ms. Majic fails to tackle my argument. Responding to my comment that that the insular nature of the Public Service should be measured against that of other sectors (such as the non-profit and private sector)  as opposed to the Public Sector of the past she states:

As for the supposed insularity of the public service, there may be some truth to a particular ethos pervading throughout any organization over time, but that may be over-stated. The federal public service today generally is more representative of linguistic duality, has more women employees, and has more visible minorities.

There are two things worth noting here. First, Ms Majic’s basis for comparison is the Public Service of yesterday. however, when I’m choosing a place of employment and wish to gauge how open it is to new ideas I don’t compare it to how it was 20 years ago, I compare it to the other organizations I could work for today. In my talk I joke that only an insular culture would make itself, 20 years ago, the benchmark for insularity. Sadly, Ms. Majic does just that.

Second, Ms. Majic’s argument presumes that increasing racial and linguistic diversity limits insularity. There is no doubt that it can help. However, she misses the thrust of my argument: namely that the strength and influence of a corporate culture should not be underestimated. The Public Services’ lifelong system of employment means its employees grow up within the system and adopt its norms, values and assumptions – regardless of their background, race, language or other trait. I quote Jim Collins for a reason. His research shows that corporate cultures are incredibly powerful in their capacity to both reject and eject those who think differently. Insularity is not a function your background, it is a function of culture.

This is not just a issue for the public service – every organization must grapple with this problem. The difference is that virtually every other organization (private and non-profit) experiences a higher rate of turnover, often across all levels. This means new ideas and perspectives that can test organizational assumptions flow into the system on a regular basis. Within the public service this occurs less frequently. Fewer outsiders come in, especially at the EX level. Consequently, the system simply has more careerist who have often only known a life in the public service – especially in its mid-level and senior ranks. This is unprecedented among organizations in Canada today.

So the public service may be less insular than 20 years ago… but does it matter to Gen Y? No. The real issue is how insular the public service is in relations to other organizations today. Here the situation is less rosy.

I’d also like to step back and share an observation. I’ve now given this and similar speeches at several government retreats and conferences and have noticed an emerging trend. Frequently after I give a talk the Boomers and Gen Yers in the audience approach me to thank me for articulating what they’ve been thinking and to share stories and engage me further. The Boomers often talk of how they know the system needs (dramatic) reform and how they hope that they can change it before they leave (or that their mass departure will help prompt its reform). Gen Yers also react positively – “you know me better than I know myself” – one recently commented. But they also confide in me that they are only starting out on their career and that most believe they will not stay in the public service for too much longer anyway, so these challenges don’t feel overwhelming.

Those most predisposed to be frustrated are the Gen Xers. It’s not hard to see why. This is the cohort that has only recently begun moving into the EX category. As such it is the group with the most invested in the current system and with the most to lose if the rules of the game are changed. It is Xers – like Ms. Majic (not the Boomers as everyone suspects) who are often the strongest defenders of the status quo. Take for example the three arguments in Ms. Majic’s article: experience trumps everything; government is not insular; and hierarchical and top-down systems are “time-tested” and good – each is a defense of the status quo.

This bodes ill for those who expect radical reform to occur when the Boomers retire. But it also points to an important short coming of current reform efforts. Gen Xers are an important – nay critical – group within the public service. They are the emerging leaders and so occupy a vital role role within the bureaucracy. Without their support, reform will be at best difficult, at worst, impossible. Consequently, any program of reform is going to have to meet and address their legitimate fears and concerns. If not, then the public service really could end up with intergenerational conflict in its midst.

Government Networks – Easy or Hard?

At the IPAC conference last week I did a panel on creating government networks. Prior to my contribution fellow panelist Dana Richardson, an ADM with the Government of Ontario, presented on her experience with creating inter-government networks. Her examples were interesting and insightful. More interesting still was her conclusion: creating networks is difficult.

Networked Snail - a metaphor for government

What makes this answer interesting is not it is correct (I’m not sure it is) but how it is a window into the problematic manner by which governments engage in network based activities.

While I have not studied Richardson’s examples I nonetheless have a hypothesis: these networks were difficult to create because they were between institutions. Consequently those being networked together weren’t be connected because they saw value in the network but because someone in their organization (likely their boss) felt it was important for them to be connected. In short, network participation was contrived and mandated.

This runs counter to what usually makes for an effective networks. Facebook, MySpace, the internet, fax machines, etc… these networks became successful not because someone ordered people to participate in them but because various individuals saw value in joining them and gauged their level of participation and activity accordingly. As more people joined, the more people found there was someone within the network with whom they wanted to connect – so they joined too.

This is because, often, a critical ingredient to successful networks is freedom of association. Motivated individuals are the best judges of what is interesting, useful and important to them. Consequently, when freedom of association exists, people will gravitate towards, and even form, epistemic communities with others that share or can give them, the knowledge and experience they value

I concede that you could be ordered to join a network, discover its utility, and then use it ever more. But in this day and age, when creating networks is getting easier and easier, people who want to self organize increasingly can and do. This means the obvious networks are already emerging/have already emerged. This brings us back to the problem. The reason mandated networks don’t work is because their participants either don’t know how to work together or don’t see the value in doing so. For governments (and really, any large organization), I suspect both are at play. Indeed, there is probably a significant gap between the number of people who are genuinely interested in their field of work (and so who join and participate in communities related to their work), and the number of people on payroll working for the organization in that field.

This isn’t to say mandated networks can’t be created or aren’t important. However, described this way Richardson’s statement becomes correct: they are hard to create. Consequently, you’d better be sure it is important enough to justify creating.

More interestingly however, you might find that you can essential create these networks without mandating them… just give your people the tools to find each other rather than forcing them together. You won’t get anywhere close to 100% participation, but those who see value in talking and working together will connect.

And if nobody does… maybe it is because they don’t see the value in it. If that is the case – all the networking in the world isn’t going to help. In all likelihood, you are probably asking the wrong question. Instead of: “how do we create a network for these people” try asking “why don’t they see the value in networking with one another.” Answer that, and I suspect you’ll change the equation.