Brian Easton says generic management undermines the professional culture within an agency

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

As Lady Bracknell almost said, ‘to lose one may be regarded as a misfortune; to lose two looks like carelessness.’ And so a second Government Statistician has made a hasty exit, The official reason in each case was the management of the population census but the cult of generic management is the underlying failure.

Generic management is the notion that managers need know little about what they are managing so they can run any organisation without appreciating the particularities of the agency.

That was true for the last two early-retiring Government Statisticians, but the notion is pervasive. I first came across it in the health sector over thirty years ago during the neoliberal health-sector redisorganisation, when chief executives who knew ‘bugger all’ about healthcare were imposed upon District Health Boards.

Typically, generic managers are appointed from outside the sector with little knowledge of it. They begin by redisorganising the previous generic manager’s management structure, including replacing the senior management team. Which amounts to having no confidence in their predecessor, with the likelihood that their successor will have no confidence in them either. (While some generic managers are competent, many are not. On more than one occasion I have known about a manager who had a dreadful reputation but went on to greater disasters; it was as if the Peter Principle of being promoted only to one’s level of incompetence does not apply in New Zealand.)

Public relations is something else they are into, although they will avoid the cross-examining from a select committee and the like – they don’t have the command of the issues. Another fetish is changing the agency accommodation – an upheaval which damages the culture of the institution (which they know little about).

Critically, they will commonly put a management tier in between the top and the professionals in the agency. In a number of cases the chief executive has seemed uneasy in the presence of the professionals they are meant to be managing.

This downgrading of professional skills means that the agency practises outsourcing. It is a gift to a consultant to have a contract manager who does not understand the issue. I occasionally read reports which have harvested that gift by providing expensive useless twaddle.

Another outsourcing mode is to contract tasks traditionally done in the agency because it is ‘cheaper’ (and appears to require less management). But the cost is a loss of control. The census incidents which caused the early retirement of two Government Statisticians involved poorly managed outsourcing.

Generic management, including the outsourcing, undermines the professional culture within the agency. Because it involves one of my professions, I found what has happened in Statistics New Zealand especially unsettling.

At the core of SNZ’s culture is the integrity of the statistical system it manages. This involves producing high quality statistics – I have never found any major fault with their data when I have worked with it and SNZ data has a good reputation internationally (especially for its size). International connections are a vital element for the functioning of some agencies, such as SNZ. A chief executive is judged overseas by their professionalism – generic managers rarely measure up. Our best professional managers get international work after their retirement.

But the integrity also involves the public trusting that any data which SNZ collects will be used only for the purpose for which it is collected. While we do not know exactly what went on at the Manurewa Marae, the public can reasonably conclude that SNZ did not ensure that the management of the census data fulfilled that promise. That failure was why the Government Statistician is exiting early. He was not directly responsible but the trust dimension of collecting data seems to have escaped some of the junior staff, suggesting that the internal culture of SNZ is weakening.

The outgoing Government Statistician is unlikely to be replaced by someone from within SNZ. Generic managers have little interest in internal career development. After all, they are only running the agency temporarily, know little about it, and hope to soon move on to a better-paid agency. The practice of appointing for a five-year term is absurd given that the census cycle is five years so that there is only one census per Government Statistician; he or she can never learn from past experience if they come from outside the department. (Probably most agencies have similar longer term rhythms. The Auditor General is saying that central government agencies should have ten-year plans.)

The contrast is with the traditional SNZ, where there was career development under an experienced leadership team. When one of our Government Statisticians, Len Cook, was made UK National Statistician for five years; his terms of reference included that he should prepare the way for his successor –from the agency’s internal staff.

Yet we persist with the cult of the generic manager. It is attractive to those in power who have no profession, it is encouraged by the demand for diversity, equity and inclusion, which often involves appointing those who have as much background as a generic manager. (Without internal career development, a DEI strategy based on professionalism is unlikely to happen.)

Apparently there is another attempt to reduce the number of government agencies, a persistent ambition of State Services Commissioners who has to manage all the chief executives. (Not all Commissioners have been top quality.) Once the management style was more collective, with four commissioners to share the load; agency management structures were also collective, which reduced the damage of incompetent chief executives.

I would have thought that the repeated failures of mega-departments of miscellaneous activities, such as the sprawling Department of Internal Affairs and the Ministry of Business, Innovation and Employment, would caution against further consolidation. They require generic management because nobody can be expert on all their activities; the management span is too wide and diverse. The likelihood is that these mega-departments will not be well managed even in generic management terms, especially given the SSC record of failure among its appointments.

Instead, we need single-focused smaller organisations such as a Ministry of Labour, Archives New Zealand and the National Library. (The latter two are in the DIA, which does not even understand the difference between a file and a book.) Their leadership teams need to be dominated by those who know something about the agencies’ activities and who have a commitment to their professional culture and career development. Organisations larger than, say, 480 people – the size of a cohort in a Roman legion – need to be carefully justified and designed. (The number is about what a well-embedded senior manager can know.)

And we need to move away from the view that agencies must be frequently redisorganised. Consolidation may be its latest fashion. Centralising the healthcare system is not going to resolve its challenges. One is baffled how moving decisions to Wellington was going to solve the post-code lottery in Dargaville – it didn’t. Sure, there is a financial problem, but efficiency improvements are not going to come from a three day-a-week Health Commissioner. They will come from the continuous improvement that professionals practise and which is beyond the scope of generic management.

Generic management is more widespread than the examples in this column. It is not confined to the public sector. When Fletcher Building faced failures in its project management which almost brought the company down, its board had no one with construction expertise.

*Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.