Why process matters more than strategy (and we should invest in it)

The best thing we could do to make our bureaucracies better would be to invest in process management and process improvement. To see R&D as betterment rather than blue sky thinking.

My former colleague, John Hinchcliffe, now CEO of mail order business Grattan, was a great one for bad jokes and snappy aphorisms. Here are three of them:

“Strategy is a word used by consultants so they can charge more”

“Marketing is 1% strategy and 99% boring routine”

“This is a mail order company, that is the strategy. Everything else is tactics.”

It’s OK, I’m not about to come over all LinkedIn and start writing about how I can help you with your marketing by using this one simple trick. What bothers me here is what we assume ‘big brain’ people should be doing. The world, regardless of context or sector, assumes that the cleverest people aren’t allowing their great minds to be corrupted by boring routine and that if we permit them to do any of that routine we are using them wrongly. Indeed many of the people who consider themselves ‘big brains’ tell us that they must be free from such routines as managing their diary, writing letters, making phone calls and organising lunch - even buying clothes. Employing someone to do this for these ‘big brains’ allows them to float above the mundane, their great minds considering altogether grander and more important things.

Amazon is a mail order company, that's the strategy. What Jeff Bezos realised was that you could reform the processes, replacing the catalogue with a website so instead of expensively mailing a catalogue to target customers, all you had to do was direct them to the web address. The rest of Bezos’ success lies in getting the processes of mail order (marketing, fulfilment, stock management) more efficient by using technology. There was nothing new about selling books, not even selling books by mail order, but Amazon did it very well because the company concentrated on making the 99% boring routine better.

If you listen to Dominic Cummings or read Brad deLong, you will get the idea that research and development is these ‘big brain’ people, all blue sky thinking and breakthrough innovation (in deLong’s world this only happens in research labs). The dull reality is that nearly all in-company effective R&D expenditure is directed to marginal improvements in processes. How do I get my coffee factory to produce more coffee for the same money? Or the same amount of coffee for less money? How do we cut down waste, reduce leaks, and eliminate downtime? Some of this sort of work is done in labs or pilot plants but most of it happens on the ground working with the people responsible for managing the boring routine. Manufacturers know this and are good at it (although the tax treatment and definition of R&D in some places makes it hard). I’ve a feeling that service operations, especially in the public sector, are not good at improving the boring routine because their ‘big brain’ people are busy doing strategy rather than managing and improving the dull everyday processes.

This morning my wife rang the NHS 111 phone line for some advice. Getting to speak with a person took over a minute. Not because there wasn’t a person on the end of a phone but because the NHS wanted to say - repeatedly - there was a website, a text service and a chat system while using a voice activated system that can’t deal with regional accents (Bradford was interpreted as East Retford). It is clear that the NHS has given considerable thought to the strategy behind this telephone service operates and believes that what needs to happen is for users to be migrated to an online service rather than have people answering the phone. Yet this is not what the ‘front door’ says. That ‘front door’ says ‘ring 111 instead of ringing the doctor’. The intention is to free up space in overloaded places like general practice and A&E but this service improvement is compromised by a different strategy from a different place, one telling those running the 111 service to reduce costs too.

These conflicting objectives are not only found in the NHS, they are commonplace across service systems (private and public sector) because the ‘big brains’ have thought ‘online’, told people to get on with it, and invested nothing in the boring job of making that process work well or even in being clear about the purpose of that process. Is having a non-emergency telephone line about making the 999 service more focused, reducing non-urgent use of A&E, or freeing up time for over-capacity general practice? If it is these things (and I suspect that this is the case) then it is the means by which you make savings not a place where saving can be made. Yet when the demand for efficiency savings comes from on high every manager gets told to make savings - money drives the choice rather than seeing, in this example, the 111 service as a productivity improvement.

Anyone who has been near the decision-makers, inside the body of the bureaucratic beast, will recognise this process. It isn’t just a consequence of David Cameron's observation that in the private sector reducing costs gets people promoted whereas the public sector simply calls it cuts. There’s a broader malaise that sees processes as costs. Having a telephone line for service users (say businesses paying their rates) is intended to reduce the need for more expensive face-to-face facilities but, because the service has been told to make savings, it reduces the hours for the telephone line - in Bradford’s case to three hours a day. The opportunity to make the process more productive is lost because everywhere must make cuts to costs.

Public services are not a set of costs but a series of processes determined by the public’s need for those services. Yet the idea of process management and process improvement do not feature much in the operation of these services. Indeed, in many contexts, process management is conducted by committee. When you visit an NHS ward (as patient or visitor) there is no obvious management in place except for that operated by senior clinicians. The process (to simplify: patient in, treatment, patient out) is broken down into discrete chunks under the command of different functions. And there is no NHS R&D function charged with improving that process. So I don’t seem to be picking on the NHS, the same applies in education, the welfare system, local government and our justice system. I’m sure it applies, but I know too little about these sectors, in defence, foreign affairs and international aid.

Another popular aphorism, usually attributed to Eleanor Roosevelt, tells us that “...great minds discuss ideas; average minds discuss events; small minds discuss people.” It is this idea (Roosevelt presumably thought of herself as a great mind) that encourages very clever people to adopt careers that are of little practical value and contribute almost nothing to the betterment of human lives. PJ O’Rourke, in the opening chapter of ‘Parliament of Whores’, apologises to Daniel Patrick Moynihan, the former New York senator, for mentioning him somewhat negatively. O’Rourke qualifies his apology by pointing out that Moynihan was one of those very clever people who went into politics rather than doing something useful with their talents.

These great minds dismiss the engineer, the practical man, preferring abstract thinking to boring routine. The reality is, of course, that Billy Ingram and Walter Anderson did more for human betterment than most, if not all, politicians and you’ve never heard of them (although you have heard of Ray Kroc who used their process combined with franchising to create the world’s most successful fast food chain). US fast food is, I suspect, the single most important cuisine in the world because of what Ingram and Anderson did to the process of producing a meal. When we think of ‘great brains’, we don’t think of these men (or even Bill Gates, Jeff Bezos and Sergiy Brin) but of pure scientists like Albert Einstein or philosophers like Bertrand Russell. Yet simple, scalable improvements to processes matter just as much as, in the here and now more than, stretching our theoretical understanding of the universe’s boundaries or pondering the ethics of war.

The idea that great brains should devote their time to ideas, strategies and policies uses those brains badly. Paying someone more because they use the word strategy for what they do results in people who not only don’t understand the meaning of strategy but believe that the task of getting their great ideas to work should fall to smaller brains. And the result of this culture is that bureaucracies recruit very clever people to do grand thinking about policy and strategy while treating process management as an afterthought filled with (as that great brain, Dominic Cummings calls them) NPCs, with unimportant people. Yet the best thing we could do to make our bureaucracies better would be to invest in process management and process improvement. To see research and development as betterment rather than blue sky thinking.