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.
The long standing snobbery in the civil service is that policy is for the smartest talent and delivery and operations for the drones. There is are few incentives or a culture of curiosity in policy to ensure your bright idea actually works. At the individual level there's some great policy people who do work across boundaries, mind.
Policy in my experience very often meant re-heating an idea over and over, hoping someone bites. Most departments need fewer ideas and better execution, to achieve this you need smaller policy departments. But turkeys don't vote for Christmas.
In the private sector there is also another element: while “great ideas” are easy to copy, and soon everybody has embed them in proceses, small process improvements integrated to each other are almost impossible to replicate and the competitive advantage become permanent.
Great essay! I used to work manufacturing, and can readily attest that Elon Musk is right- it is far more difficult to make something, than it is to have a great idea.
My aunt was recently rushed into hospital. The next day, the doctors agreed to discharge her, provided she wait for her precautionary prescription. At 5pm and somewhat apoplectic, she threatened to discharge herself, when she found out her antibiotics hadn't even been ordered. It turns out the hospital pharmacy had a regular problem with their 'new and improved' automated picking line (I know of similar problems with suppliers myself). The pharmacy's novel solution to habitually failing their targets was to introduce an additional process of not inputting order unless they knew they could service them in a timely fashion...
My aunt held firm. The senior nurse negotiated. It was mutually agreed my aunt would discharge herself, but then pick up her pills at 8.00pm, but only on the condition that she was allowed to take her dog Alfie onto the ward to puck them up. My aunt Janine is a formidable woman- a combination of a posh accent and a few years spent as a teacher adding a deep tone of severity to her voice paid dividends in the end.
In the private sector I've seen companies try to impose efficiency systems from the top down without ever involving the workforce that are at the sharp at all. Things get rolled out that don't work and make the job of the people who do the work more complex and less efficient. An annual chat to the workers is never going to be sufficient to really understand how they work and what they can tell a company about being efficient. Western companies often try to impose Japanese styles of continuous improvement, but entirely miss out the step of fully incorporating into it the people on the ground. The lack of respect and dismissal of the people in the workforce as not worth bothering with costs industry and I'm assuming the public sector to.
I do think you perhaps malign Cummings. He is extremely behind progressive improvement and high performance. He does also support Manhattan Project like ultra high performance projects aimed at specific problems but he recognises those are the exception not the norm.
"The dull reality is that nearly all in-company effective R&D expenditure is directed to marginal improvements in processes."
I worked for 33 years as an industrial scientist (chem E) in pharma, for various companies over three mergers (though which my job and office never changed). That is a big part of what I did believe process improvements and dealing with plant problems.
But process improvement means you lower the cost of the stuff you focus on. We make the chemicals that are the active ingredients in our drug products (APIs). The builds directly to the north of us took our active ingredients and formulated them into the actual products you but in the drug store. The value of what we did was about 1.5% of the sales price. When the formulators did was about twice that. So the cost of our products was like 5% of sales.
Another 10-15% was new drug R&D. So maybe 18% or so for the total cost of coming up with new drugs, getting them approved and making them. The rest was sales, administration, financial charges and profit.
It has gotten to where whatever caused the Medicare Part D law to prevent Medicare bargaining for lower drug costs produced far more bottom-line results for the company that anything the thousands of us working in API could contribute. This is why companies choose to offshore production. Production is no longer a competitive advantage but is a capital-intensive pain in the ass. So let someone else do it.
You mention Amazon. What they did was find a more efficient means to do what others were doing and pocket part of the benefits. It is certainly a business success. But did it grow the economy? Or did it simply find a more efficient way to extract profit from an existing market? If the latter, why should the government subsidize it by making online purchases exempt from sales tax?
This is why you need new stuff that did not previously exist.
As for the improvement of service processes, I point to the example of the drug companies. The vast majority of the sales dollar goes to stuff unrelated to the discovery, development, manufacture and distribution of the drug products.
If you go by the adage "wherever three or more gather for a common purpose, there be politics" (whether office, church, internet, or other), then politics is critical to the improvement of services. And there be dragons in that direction.
The long standing snobbery in the civil service is that policy is for the smartest talent and delivery and operations for the drones. There is are few incentives or a culture of curiosity in policy to ensure your bright idea actually works. At the individual level there's some great policy people who do work across boundaries, mind.
Policy in my experience very often meant re-heating an idea over and over, hoping someone bites. Most departments need fewer ideas and better execution, to achieve this you need smaller policy departments. But turkeys don't vote for Christmas.
In the private sector there is also another element: while “great ideas” are easy to copy, and soon everybody has embed them in proceses, small process improvements integrated to each other are almost impossible to replicate and the competitive advantage become permanent.
Great essay! I used to work manufacturing, and can readily attest that Elon Musk is right- it is far more difficult to make something, than it is to have a great idea.
My aunt was recently rushed into hospital. The next day, the doctors agreed to discharge her, provided she wait for her precautionary prescription. At 5pm and somewhat apoplectic, she threatened to discharge herself, when she found out her antibiotics hadn't even been ordered. It turns out the hospital pharmacy had a regular problem with their 'new and improved' automated picking line (I know of similar problems with suppliers myself). The pharmacy's novel solution to habitually failing their targets was to introduce an additional process of not inputting order unless they knew they could service them in a timely fashion...
My aunt held firm. The senior nurse negotiated. It was mutually agreed my aunt would discharge herself, but then pick up her pills at 8.00pm, but only on the condition that she was allowed to take her dog Alfie onto the ward to puck them up. My aunt Janine is a formidable woman- a combination of a posh accent and a few years spent as a teacher adding a deep tone of severity to her voice paid dividends in the end.
In the private sector I've seen companies try to impose efficiency systems from the top down without ever involving the workforce that are at the sharp at all. Things get rolled out that don't work and make the job of the people who do the work more complex and less efficient. An annual chat to the workers is never going to be sufficient to really understand how they work and what they can tell a company about being efficient. Western companies often try to impose Japanese styles of continuous improvement, but entirely miss out the step of fully incorporating into it the people on the ground. The lack of respect and dismissal of the people in the workforce as not worth bothering with costs industry and I'm assuming the public sector to.
I agree strongly.
I do think you perhaps malign Cummings. He is extremely behind progressive improvement and high performance. He does also support Manhattan Project like ultra high performance projects aimed at specific problems but he recognises those are the exception not the norm.
"The dull reality is that nearly all in-company effective R&D expenditure is directed to marginal improvements in processes."
I worked for 33 years as an industrial scientist (chem E) in pharma, for various companies over three mergers (though which my job and office never changed). That is a big part of what I did believe process improvements and dealing with plant problems.
But process improvement means you lower the cost of the stuff you focus on. We make the chemicals that are the active ingredients in our drug products (APIs). The builds directly to the north of us took our active ingredients and formulated them into the actual products you but in the drug store. The value of what we did was about 1.5% of the sales price. When the formulators did was about twice that. So the cost of our products was like 5% of sales.
Another 10-15% was new drug R&D. So maybe 18% or so for the total cost of coming up with new drugs, getting them approved and making them. The rest was sales, administration, financial charges and profit.
It has gotten to where whatever caused the Medicare Part D law to prevent Medicare bargaining for lower drug costs produced far more bottom-line results for the company that anything the thousands of us working in API could contribute. This is why companies choose to offshore production. Production is no longer a competitive advantage but is a capital-intensive pain in the ass. So let someone else do it.
You mention Amazon. What they did was find a more efficient means to do what others were doing and pocket part of the benefits. It is certainly a business success. But did it grow the economy? Or did it simply find a more efficient way to extract profit from an existing market? If the latter, why should the government subsidize it by making online purchases exempt from sales tax?
This is why you need new stuff that did not previously exist.
https://mikealexander.substack.com/p/why-progress-seems-stalled
As for the improvement of service processes, I point to the example of the drug companies. The vast majority of the sales dollar goes to stuff unrelated to the discovery, development, manufacture and distribution of the drug products.
If you go by the adage "wherever three or more gather for a common purpose, there be politics" (whether office, church, internet, or other), then politics is critical to the improvement of services. And there be dragons in that direction.