Turnover in the senior civil service has been high in recent years: when CSW examined 16 departments late last year, it found that 12 of them had seen more than 80% of director-general posts change hands since the election, whilst only one retained its original permanent secretary. Five were on their third departmental chief since the coalition came to power.
Some observers blame this high rate of churn on unsympathetic ministers; the demeaning of the public service ethos; or strong downward pressure on pay and pensions. Others point to redundancy programmes and organisational changes, which have encouraged or forced many to leave. No doubt all these factors have played a part. But there is often a deeper problem: poor board performance.
Having produced a study of organisational crises in the private sector, we concluded that nearly all of those we examined could be traced back to weaknesses in boards. The study identified five behavioural and organisational risk factors, none captured by standard risk methodology, which lie at the root of most major crises.
These risks are: gaps in board skills and the failure of non-executive directors to influence executives; ‘risk blindness’, where boards remain unaware of important threats; defective information flows to and from the board; inadequate leadership on ethos and culture; and organisational complexity.
The civil service is not identical to commerce, but the two worlds share many challenges. The government’s Protocol for Enhanced Departmental Boards makes this clear, and argues that departmental boards “need to be business-like”. It is illuminating, therefore, to see that risk factors like those identified in the research are also regularly found within the civil service.
Departmental leaders seem slow to identify and remedy weaknesses. Richard Bacon, deputy chair of the Public Accounts Committee, illustrated this when introducing a PAC report on the dismantling of the NHS National Programme for IT: a computerisation project of huge scale and complexity. “This saga is one of the worst and most expensive fiascos in the history of the public sector,” he said. “Yet, as the much more recent Universal Credit project shows, there is still a long way to go before government departments can honestly say that they have learned and properly applied the lessons from previous contracting failures such as the National Programme. ”
There are various reasons behind departmental boards’ weaknesses. Former cabinet secretary Lord Butler, questioned recently about the West Coast Mainline franchise debacle, told the BBC: “In a situation where [civil servants] feel they will be dumped upon when things go wrong, they aren’t encouraged to speak truth to power” – and so boards remain unaware of dangers in the system.
Some experts have questioned the way in which non-executives have been chosen. Andrew Kakabadse, the Professor of International Management Development at Cranfield School of Management, told the Public Administration Select Committee (PASC) that he observed “people’s mates being appointed in these roles.”
Other factors can also create the defective information flows that undermine boards’ effectiveness. Prof Kakabadse again: “Most people in a failing organisation know it is failing, but they do not know how to talk about it with colleagues…. many people attend meetings and agree to things… but then leave the meeting and express something different.”
As to inadequate leadership on ethos and culture, the government’s lead non-executive director Lord Browne told PASC: “The biggest single obstacle to progress in government could be a cultural issue: a failure to learn from failure, and a tendency to turn everything into some sort of achievement. ”
Given that both businesses and civil service bodies run on ‘people power’, it should come as no surprise that they share many of the same risks rooted in human behaviour. The business world increasingly recognises the importance of tackling these risks, and we believe it is time to take a systematic look at behavioural and organisational risks within the civil service.
The first challenge is for leaders to gain the knowledge to understand and deal with these previously unrecognised risks. Permanent secretaries should commission tailored training for themselves and their board members, covering behavioural and organisational risks and how to find them.
Thus educated, departmental boards should empower risk and internal audit teams systematically to find and manage these risks – however elevated their source.
If this work is done well, fewer nascent problems will pass unnoticed. Success would leave more of the civil service top talent pool happy to remain in post to provide the kind of leadership that ministers desire. Some costly mistakes would be avoided – and the NAO would have fewer debacles to investigate.
Rob Haslam is a partner in Reputability LLP, a behavioural and organisational risk consultancy. ‘Deconstructing Failure: Insights for Boards’ is available at www.reputability.co.uk/#publications