Halloween thoughts

October 31, 2012

A retrovirus (pictured) replicates itself as a part of the host cell's DNA; endogenous retroviruses inherit across generations as part of their hosts genome.  It seemed an appropriate way of thinking about the role of the larger management consultancies in Government.   I was reading Dr Éoin Clarke's excellent (if depressing) blog on McKinsey & Co and the NHS.  In summary it as McKinsey who recommended the current changes, which have been more or less unanimously condemned by every professional medical body.  They helped draft the legislation, are overseeing the establishment of the Clinical Commissioning Groups and will doubtless advise the flocks of private companies who will be lining up to cherry pick the profitable parts of health provision; leaving the rest to the public sector.  For the record they clients include 15 of the 22 largest healthcare and drug companies. The revelation that a senior partner in McKinsey is also making private donations to members of the Conservative party comes as no surprise, which is itself depressing.

Of course there is a track record here, McKinsey also advised the Government of the day on the disastrous privatisation of Railtrack.  Even the right wing Daily Mail is concerned about the links and involvement.  All of that is bad news for both the British Public, workers in the Health System and also the national purse.   The US Government spends more per head on healthcare than any European Nation and still can't provide free at the point of entry health care.  You would think the lesson is won that could be learnt by any intelligent observer, but ideology, especially ideology amplified by greed is an enemy of intelligence.

The real irony is the displacement of cost to give the impression of saving.  The Government has driven costs down in the Civil Service, simply to transfer the money (and if we take opportunity cost into account, and more) to consultancy firms.  The fact that this model has perpetuated itself across governments over the last few decades justifies the endoenous tag.  We had the same with the now notorious PFI initiative appeared to reduce public borrowing while in practice building up a burden of long term debt that would in turn cripple services.  

If you employ consultants of the like of McKinsey (or most of the others for that matter) they are very unlikely to recommend that you keep things the way they are.  Consultants survive and partners get promoted by embedding themselves into the DNA of an organisation.   Once there, it is in their clear interests to create work and dependency and no one can deny they are very good at it.

In contrast the civil service, who used to do this sort of thing, have (or maybe I should say had) a long term non-commercial interest.  They provided a check and balance to Government.  They can't write a report, supervise a change and then leave others the pieces.   If the Sandy events in the US have taught us nothing is that there are a swathe of things where only Government can do the job.  

It used to be that no one got fired for buying IBM a saying that produce more inhibitions on innovation and backwards thinking technology than anything else back in the 70s and 80s.  IBM's main strength then was their account management teams who were impressive in their ability to access and influence senior decision makers.  I remember three occasions back then, when having won the technical evaluation hands down with out MURCO product (stock forecasting and inventory management), we were displaced at the last minute by an inferior IBM partner product solely through the high level relationship.   For the last few decades the mantra has been No one gets fired for commissioning McKinsey to tell them what to do.  As before its a way to abrogate your responsibility and avoid the hard decisions that should come with leadership.

Of course some of this is the curse of managerialism.  Providing support for clinical managers, who know reality is very different from the compartmentalisation of management from medical practice which was so much a characteristic of the Blair years.  If senior managers do not understand the system in their bones then they will manage by numbers.  A problem that is not confined to the public sector.

Now to be clear I don't blame McKinsey for this.  They run a partnership model, they are very good at making it work.  Other competitors (although they don't have many) do the same.  The problem here is the dependency culture, the avoidance of responsibility and desire not to hear the truth in behave of procurement that is the issue.  The retrovirus is now a plague, it's attacking the immune system of social services that are key to civil society.  


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