Chris Johns
Anyone who has ever tried to introduce change to their business, their family, or just to their own daily routines, knows that one of the truly great lies that we tell ourselves is that ‘I embrace change, bring it on’. I’ve repeated that line to many C-suite executives and, without exception, they disagree. Often loudly and angrily. Subsequent discussion reveals an awareness of how other people are resistant to change, ‘but not me nor the team I have built around me’.
I’ve addressed workplace meetings where folks gather to hear the bad news about a failing business. When told of the extinction level threat to the company, they collectively nod in agreement with bromides about the imperative of change. Subsequent one-to-one meetings elicits further agreement about the need for organisational change (or die). When I explain the ways they, as individuals, are expected to change they often mount a strong defence, arguing, very persuasively, why that is wholly unnecessary. Alternatively, more experienced troops know that the quiet life is guaranteed when you agree with everything the boss is saying but quietly resolve to go on as before and to let others do the changing. Some will be filled with good intentions, will sincerely acknowledge the need for new ways of doing things, but will succumb to centuries of genetic programming and do nothing differently once back in the safe confines of their cubicle.
The Dominic Raab approach to this problem is to become very shouty. As others have pointed out, Raab’s ministerial track record is extremely thin. He achieved little, changed nothing. People can, sometimes, be bullied into change but will revert to type at the earliest opportunity. More often, the shouty boss will meet immediate resistance, even if her ideas are good ones, because we all hate shouty people.
Alex Ferguson, the former, brilliantly successful, manager of Manchester United knew all this. Still, he occasionally deployed the ‘hair dryer’ approach to management. Quiet persuasion does work better than bullying, but not everyone responds in exactly the same way. In sport, you can terrify someone at half-time into behaving differently for the next 45 minutes, but it’s not a sustainable people management tactic. Ferguson knew, as so many managers of failing businesses don’t, that once shouting and persuasion fails to work, the only effective way of changing an organisation is to change the people. That’s hard. Ferguson did it a lot. But running successful football clubs, businesses and countries was never meant to be easy.
We are hard-wired to resist change. One reason for that is we fear the unknown. Sometimes for good reason: we might not have the knowledge, skill or capacity to behave differently, to perform unfamiliar tasks. Sometimes, we are just scared of the dark.
Asking - or demanding - change can be taken as a criticism of the old ways of doing things. That’s bound to bring resistance. While old habits may well have been a cause of organisational failure, you will never get the required behavioural changes you need by focussing exclusively on past errors. Be positive not negative. Of course, stuff also just happens. The old ways may well have been perfectly suitable until the world changed. If takes unusual perception and a rare mental agility to spot that shit has just happened.
It is really, really hard. You need superb people, plenty of money and bucket loads of luck. Mistakes will always be made. Ferguson was also given that precious commodity: time. He was given the space, resources and time to introduce change, to do the diamond-hard tasks of sports management skilfully and successfully. Lots of people try and fail.
Lots of people try their hand at the business of government. That’s complexity, many orders of magnitude greater than building a successful soccer club. Political pundits never acknowledge the constant decision making under uncertainty, the policy trade-offs that occur multiple times every day, the infinite demands made of finite resources - just how hard managing a government actually is. Look at the condition of the U.K. which recently elected a Prime Minister who was intelligent enough to appreciate just how difficult running a state really is, and concluded it wasn’t worth making his effort.
Which brings me to the point of this post. Fintan O’Toole has once again written his ‘I hate everything about Ireland’ article for the Irish Times. Una Mullaly tries to do the same thing but without the literary pretension. These articles take varying forms but essentially mine a rich seam of failures of ‘the state’ to do certain things that the authors think it should do better.
These articles must take about two minutes to write. List all the things that we will all nod in agreement with: housing and health are in crisis, the climate is dying, Arsenal have choked. Then demand the state fixes the problem but only after listing the ways in which the state is utterly useless and a hint or two muttered that dark forces - either malicious or just incompetent - have engineered whatever happens to be the crisis du jour.
Never, ever acknowledge that a problem (better described as a crisis for dramatic effect) could be the result of an emergent process. Say, for example, that the accumulated effects of economic policies across many decades suddenly and unexpectedly result in several years of economic success. More people than anyone ever imagined in work, more people with more money than any economist forecast. More people coming to your country to work than ever before. Your country switching overnight from an exporter of people to an importer.
Never ask whether super low interest rates for many years combined with increased incomes, wealth and immigration to cause an explosion in housing demand that even O’Toole didn’t forecast.
Work really hard not to notice that San Francisco, Vancouver, Toronto, Sydney and London all have exactly the same housing crisis as you do. Don’t refer to the articles in Spanish and Portuguese newspapers detailing their respective housing crises.
Always sneak in - elide - the obvious truths that the state can do everything, can turn on a dime when the world changes, can manage complexity seamlessly and effectively. Always point out that the state can repurpose - instantly - the civil service to handle every new, unexpected development. Turn purple with rage when someone suggests that ‘state capacity’ is a limited resource. Howl at the moon when a taxpayer mutters that her resources are finite and deserve to be deployed efficiently. Just please don’t ever mention value for money: all we have to is deploy more cash to solve every crisis.
Manchester City, Arsenal and Newcastle United know that you need both money and world class management to succeed. Chelsea and Tottenham also know this but they also know how hard to find are good managers, how fiendishly difficult it is to change things - people - for the better. Liverpool know that stuff happens: money and superb management are necessary for success but don’t guarantee it.
Always from O’Toole: it’s the governments fault, they don’t care and are malevolent. It would be so easy to make everything right, to end all the crises. After all, it’s a trivial problem. ‘Wave a magic wand, do it my way and all will be well.’ The Monday morning quarterback speaks again. Notice that we never find out, with precision, what ‘my way’ amounts to, what easy-peasy changes will be introduced overnight to deliver the sunny uplands in the morning.
We have to acknowledge complexity if we are to make progress. Yes, we have to make changes. We all are acutely aware of the problems and the need to do better. But not Brexity-type changes: the quintessential example of the populist promise that all will be well if we only change one little thing.
Pretending that things are really simple and the government is entirely to blame for (a) not feeling your pain, (b) deliberately not doing anything about it and (c) just feathering the nest of its friends just fuels the populist plague.
Excellent piece, Chris/Jim. Your style of writing never fails to impress.
While it's hard to disagree with a lot of your points, I've carried out some research on my own recently on the effects of GFCF on labour productivity in Ireland. I've ran various VAR models and produced IRF graphs for the period 2000-2022, which includes modified domestic demand, consumption, labour productivity and both private and public sector GFCF expenditure as variables. Sadly, I wasn't at all surprised to find that there was little or no effect on productivity, consumption, or MDD from GFCF.
Moreover, GFCF has followed a procyclical trend meaning that the Irish government invested during the good times but slammed the breaks during bad times. This is in sharp contrast to the other wealthier nations in the EU and OECD who maintain steady investment throughout the business cycle. Germany, France Denmark and Finland, for instance, fare far better than the Irish in this regard.
I thus draw two conclusions. First, when Irish governments spend it is either misallocated in the wrong areas or badly managed, or both. Otherwise, why has productivity in the domestic economy been so unremarkable? The Irish economy is hardly immune from cost overruns. Examples of disatrous financial management are plentiful in this country. The children's hospital, the port tunnel, the Luas, the national broadband plan, not to mention poor railroad networks, inefficient public transport, incomptency at the DAA, and of course the on-going debacle in housing and healthcare. These are not new problems.
Second point. If GFCF follows boom and bust cycles what does that actually tell us about government policy? It clearly suggests that our governments are reactionary. Spend when everything is fine but panic when the going gets tough. My model shows that GFCF reacts unilaterally to changes in consumption, productivity and economic growth, but not the other way around. Consumption, productivity and economic growth couldn't give a fiddlers about GFCF. Money well spent?
For decades the Irish public have rightly bemoaned the lack of future planning from successive Irish governments. Any fool can spend money, as you suggest yourself, but It's knowing what to do with the money and when to spend it that separates genuine leaders from just run of the mill career politicians. The lack of political talent in this country is striking, and has been for god knows how many years. As someone from the UK, Chris, I'm sure you would take your hand off for a stable political system like ours. But Irish people are growing very weary of steady hand politics, particulary when its combined with ineptitude. We need radical thinking and courage in our convictions.
Fixing housing is a lot less complicated than we think. Why not attract immigrant builders in their droves to Ireland, offer them low income taxes and subsidies in exchange for temporary prefab accommodation if we have nowhere to house them? The Irish built London and New York. Indians and Pakistani's built Dubai. We now need similar bold policies ourselves to prevent the economy from grinding to a halt and properly overheating. We can't fudge around the edges and spend a billion here and another billion there hoping half measures will work. We need to allocate huge resources, which we have, over the next few years to hard-nosed decisions that push us forwards as a country. We are currently in a state of paralysis. If we don't bottle it, within 3 - 5 years we could be building as many houses as the pre financial crisis era. We have lost 30% of our construction workers since 2008 while our population in recent years has grown quite rapidly. Is it any wonder why costs have risen so high?
Final point. If we want to prevent land hoarding we should be incentivizing landowners with tax credits, not threatening them with punitive taxes! It's arse about face, especially in an emergency. Human nature says "attack and I will defend." We need to play it another way. Carrot over stick. It's guaranteed to produce much quicker and better outcomes. If only our government could see it that way.
Excellent. Throw in Louise O'Neill, PBP, Joe Brolly, Sinn Fein and a dozen more