DID PUBLIC SERVICES BORROW THE WRONG IDEAS?
In the 1980s, Britain's public services began borrowing management ideas from business. The promise was simple: better services at lower cost. But what if they borrowed the wrong ideas?
A few years ago, I shared a stage with Sir John Timpson, one of Britain's most successful businessmen. Timpson has spent decades doing something rather unusual. He visits his shops, talks to the people working in them and asks a simple question.
“How can I help you perform better?”
Not: Have you hit your targets? Why is productivity down? What does the dashboard say?
He wants to know what's getting in the way of people doing a good job. And what he can do about it. Timpson calls his approach Upside Down Management. Rather than expecting employees to serve the management hierarchy, he expects management to support the people serving customers.
It's an interesting philosophy. Particularly when you consider what happened to Britain's public services.
Forty years ago, governments began importing management ideas from the private sector. Targets, performance indicators, competition and managerial accountability promised better services at lower cost. The approach acquired a name: New Public Management. But there's a rather delicious irony here.
While public services were learning to manage like businesses, one of Britain's most successful businessmen was turning conventional management thinking on its head.
Which raises an uncomfortable question.
Did public services borrow the wrong ideas?
THE MANAGEMENT REVOLUTION THAT PROMISED EVERYTHING
The proposition behind New Public Management was attractive. Private businesses, it was argued, had become more efficient through competition, performance targets, financial incentives and professional management. Public services should adopt the same disciplines.
Managers would manage. Workers would deliver. Performance would be measured. Targets would focus attention. Accountability would improve results. Government would work better and cost less. Who could object to that?
The difficulty wasn’t necessarily the ambition. It was the assumptions about how organisations actually work.
In a recent article in The Guardian, Phillip Inman questioned whether more regulation and tighter controls were really the answer to Britain’s struggling public services. Drawing on the work of economist Sir John Kay and systems thinker John Seddon, he challenged the tendency to confuse compliance with performance.
It’s a distinction that deserves far more attention. Because we have become extraordinarily good at measuring what people do. We are considerably less successful at understanding whether all that activity achieves what the organisation exists to accomplish.
FORTY YEARS LATER, WHERE ARE THE RESULTS?
In 2015, Oxford academics Christopher Hood and Ruth Dixon published a book with a wonderfully provocative title: A Government That Worked Better and Cost Less? They examined three decades of administrative reform in UK central government. Their findings challenged the central promise of New Public Management.
The reforms had largely failed to reduce costs. Increased expenditure had not reliably produced improvements in the fairness and consistency of government administration. This wasn’t a study of one failing council or hospital. It was a long-term examination of the management revolution itself.
And the wider performance picture raises equally uncomfortable questions. In 2010, England’s NHS elective waiting list stood at approximately 2.3 million incomplete treatment pathways. By 2019, before Covid, it had doubled to 4.6 million. By September 2023, it had reached 7.8 million.
In housing, the number of households living in temporary accommodation in England has risen sharply from its 2011 low. And across public services, leaders continue to grapple with backlogs, rising costs, dissatisfied customers and overstretched employees.
Of course, we cannot attribute all this to New Public Management. Austerity, growing demand, demographic changes, political decisions and the pandemic have all played their part. Some services and measures have improved.
But that doesn’t remove the question. Why have decades of performance management failed to produce the sustained improvements we were promised?
Perhaps part of the answer lies in the management thinking itself.
GOOD LEADERS. BAD THINKING.
I have spent 27 years studying why service organisations struggle to deliver what they exist to do. And one thing has become increasingly clear. Most leaders aren’t the problem. Many are intelligent, conscientious people who genuinely want to improve the organisations they lead.
But they have inherited a particular set of beliefs about what good management looks like. Set targets. Create specialist departments. Reduce unit costs. Measure individual productivity. Hold people accountable. Reward success and challenge failure.
Each practice appears sensible in isolation. But look at what happens when they interact.
A customer’s problem is divided into tasks. Different departments become responsible for different pieces. Each team manages its own queue. Managers concentrate on meeting their individual targets. Work moves between functions, accumulating delays, handovers and checks.
Customers chase progress. Employees spend time transferring, correcting and repeating work. Everyone becomes busier. But less of that activity contributes directly to solving the customer’s problem.
And when performance deteriorates, what do we do? We introduce more targets, more reporting, more monitoring and more accountability. We assume people need to be managed more closely.
What if the people aren’t the problem? What if the way we’ve organised their work is?
THE PSYCHOLOGY OF THE TARGET
There is a reason this happens. People adapt their behaviour to the conditions in which they work. Give a manager a target, make their reputation depend on achieving it, and that target becomes extraordinarily important.
Not because the manager is dishonest. Not because they don’t care about patients, tenants or customers. Because they are human. Attention is limited. Incentives influence behaviour. Threats change priorities.
The manager starts asking a different question. Not simply, “How do we solve this person’s problem?” But, “How do we make sure this case doesn’t breach?”
A case approaching its deadline becomes urgent. Other cases wait. Those cases age until they, too, approach their deadlines. More work is expedited. More queues are rearranged. More management attention is consumed deciding which problem deserves attention next.
Everyone is working harder. But less work gets finished.
Research on NHS waiting-time targets has identified precisely this danger: performance measures can influence which patients are prioritised, rather than simply improving the underlying capacity to treat them.
The measure changes behaviour. But changing behaviour is not necessarily the same as improving performance. And that’s the fundamental problem with a management philosophy that treats people as the principal variable to control.
SCOTLAND OFFERS AN INTERESTING CONTRAST
There is another story worth telling. The Scottish Housing Regulator reports relatively high levels of tenant satisfaction with social housing services. In its latest figures, 88% of tenants were satisfied with their landlord’s repairs service, while overall satisfaction was also 88%. Non-emergency repair completion times had improved to an average of 8.4 working days.
Scotland isn’t perfect, and comparisons with England require care because the regulatory measures and reporting arrangements differ. But I think there’s something interesting in the management philosophy that has influenced parts of Scottish housing.
One of the most influential figures was Martin Armstrong, the former chief executive of Wheatley Group, one of Europe’s largest social housing organisations. Armstrong brought a different way of thinking about the purpose of housing services. One of the ideas associated with his leadership was a simple question: How can we say yes?
Think about the difference. The conventional management question is often whether a request fits the organisation’s rules, policies and processes. Armstrong’s approach started somewhere else. What matters to the tenant? What are they trying to achieve? What is preventing us from helping them? And how can we organise our work to make that happen more easily?
That changes everything. Instead of asking whether each department has achieved its target, we ask whether the tenant has received what they need. Instead of making employees navigate increasingly complicated procedures, we ask what prevents them from resolving the problem. Instead of managing a collection of separate tasks, we examine the work from beginning to end.
I would argue that Armstrong helped influence a generation of housing leaders to think differently about their purpose. I wouldn’t claim that one man explains the performance of an entire country’s housing sector. But his approach offers a compelling alternative to conventional management thinking.
And the parallel with John Timpson is striking. Two leaders. Different sectors. A remarkably similar philosophy.
Management exists to help people do good work, not simply measure whether they’ve done it.
WHAT HAPPENS WHEN YOU CHANGE THE WORK?
This isn’t just a philosophical argument. It has practical consequences.
In a housing repairs service we worked with, we found a familiar collection of problems. Jobs passed between functions. Operatives couldn’t always obtain the right parts. Appointments, scheduling and stock management were treated as separate management problems. Performance was measured through activities and targets rather than whether repairs were genuinely completed.
Everyone was working hard. But the system made it unnecessarily difficult to finish the work.
So we changed how the work worked. We studied the demand coming into the service. We examined what prevented repairs being completed. We changed how parts were supplied, how work was organised and how decisions were made. And we concentrated on genuine first-visit fixes rather than simply reporting that jobs had been completed within a target.
The results were remarkable. Repair capacity doubled with the same workforce. Genuine first-visit fixes improved substantially.
We hadn’t doubled the number of tradespeople. We hadn’t discovered a new motivational technique. We hadn’t introduced more demanding targets. We had changed the system in which people worked.
The improvement came from removing the obstacles that prevented employees from completing repairs. And that is what conventional performance management so often misses.
People cannot consistently perform better than the system allows them to.
THE QUESTION EVERY LEADER SHOULD ASK
Timpson’s approach offers a powerful starting point. Go and see the work. Talk to the people doing it. Find out what gets in their way.
But I’d go one step further. Don’t simply ask employees what makes their jobs difficult. Follow the work itself. Take a real customer request and trace everything that happens until the problem is resolved.
Count the handovers. Measure the waiting. Identify the repeat contacts. Find the decisions that could have been made earlier. Find the work that exists only because something went wrong the first time.
Then ask what needs to change. Not to make everyone busier. To help the organisation achieve more.
This is a different conception of management. The manager isn’t primarily a controller of individual performance. The manager is responsible for creating the conditions in which good performance becomes possible. And that responsibility reaches right to the top of the organisation.
PERHAPS WE’VE BEEN ASKING THE WRONG QUESTION FOR FORTY YEARS
New Public Management promised to make public services work better by making managers more accountable for performance. But what if we’ve misunderstood where performance comes from?
What if the most important job of leadership isn’t to control people, but to improve the systems in which they work? What if the answer to rising costs isn’t another round of unit-cost reductions, but removing the unnecessary work that makes services expensive? And what if the answer to poor service isn’t another target, but making it easier for employees to solve people’s problems?
John Timpson understands something that too many management systems overlook. So did Martin Armstrong. The people doing the work are not simply resources to be controlled. They are the people management exists to help.
Perhaps that’s the revolution public services really need.
We’ve spent forty years trying to make people work better. It’s time we started making the work work better.
NEW BOOK: COMING NEXT WEEK
My new book with leading housing repairs specialist Neil Alexander is out next week. It explains how to adopt this philosophy in social housing.
Join the advance list to hear when it launches.
