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Liberty and personal competence

Liberty and personal competence

How do we recognise options? How do we choose amongst these? How do we do this collectively and as individuals? The answers to these questions define the capacity of individuals, groups, firms and political institutions to respond positively to the challenge of change. What we become is the consequences of what we choose and how we choose.

How do we recognise options?

How do we recognise options?

Psychologists speak of 'competence', implying one who has taken charge of their destiny. A competent individual - or, by extension, a competent organisation or society - possesses a number of qualities. All of these qualities that are involved must be present, or competence will prove elusive

Competence is associated with:

The relationship between these components is non-linear: each is a part of the others. Options will be circumscribed by tools and by permission to act, by goals and by circumstance. Competence arises when all steps in this cycle are adequate. The possession of competence delivers that most fashionable of terms, empowerment

The entire system is knowledge-based, intangible and not easily open to measurement. The individual steps in this cycle are more or less open to systematisation. An agent can, for example, scan the operating environment in ways that lead to recognisable success or failure. Scenario planning is an example of one of the tools that are used. However, other steps are less easy to employ.

The least straightforward steps are concerned with the negotiation of a common set of objectives between disparate groups. This is poignant in partnership, in joint venture and in helping projects across internal cultural boundaries within an organisation. However, such activities are, usually, the marriage of very like minds. Politics, by contrast, consists of the fusion of quite different points of view, values and acceptable forms of debate. One of the greatest challenges involved in inventing civilisation has been to learn to live with diversity, whilst still defining the boundaries of the acceptable. We have had to do this in the face of competing rationales, each of which see their particular option as being based on competence and sound sense. The competent criminal sees options which the rest of us have banned, but the competent company sees options which may be strange to us but which we accept.

The defining characteristics of any one of these factors may be changed when the external world changes, or when internal balances alter. The entire structure has to be negotiated and re-negotiated. This is, of course, exactly what we do when we learn* and adapt as individuals, and we have brain structures which are specifically dedicated to the tasks that are entailed. Indeed, there are lesions which produce in individuals the symptoms so commonly observed in non-competent companies and societies.

Acquiring competence

Acquiring competence

A competent agent models its operating environment, defines its goal structure, examines its potential for action and notes the constraints imposed upon it and, from all of this, creates options for itself. It does this iteratively and in spasms that are prompted by events. This is a challenging task. We have no idea how to emulate this formally, even in machines which explore 'toy' universes. It is, therefore, dangerous to be prescriptive.

This said, most of us are competent. We find our way through our world. We can, therefore, try to carry what we do as individuals into a trans-personal world, where many of us contribute to the emergence of group competence. Although we cannot yet make machines generate artificial intelligence, we have already learned how to make companies behave in this way. We shall, without doubt, get better at this; and this potential may lie at the heart of the excitement around the concept of knowledge management as applied to adaptive innovation and to quick, sure operational responsiveness.

Organisations which re-visit what they are about and try to establish an internal consensus fulfil two important goals. On the one hand, they pursue competence and, arrive at options which have deployed the information that they can access and the creativity that they can deploy. Second, the educate the participants.

Individuals and sub-groups of an organisation operate in a framework that they define, and a framework that is set by their wider environment. Where effort has been made to refine this framework and ensure that 'local' views are connected to it, the such individuals will be able to spot options when they see them. The competence which they have acquired allows them to filter and transform ever-larger quantities of data, and turn these into options. In addition, they know who to persuade and how to persuade; and they know the personal risks and potential benefits from putting the head above the parapet, or from remaining behind it

The consequent decentralisation of insight implies that increasing numbers of people need to be 'realistic' and competent in an organisation. They need to display informed pragmatism. How are they to acquire this realism? How are they to learn? How, indeed, is 'knowledge' to be identified and got to them

These considerations lie at the heart of adaptive competence, and at the heart of the knowledge economy. Over half of all business output consists of patterns of ordered knowledge, according to the OECD. McKinsey estimate that around half of the life cycle costs in manufacturing are associated with bringing order to the complexity of the proposal, rather than doing it. When senior staff do not know what is possible and junior staff, however close they may be to the market and to new technology, do not know what is wanted, then there is a gap in the processes that seek competence. Where organisations are arranged into operational silos and where criteria seek only increasing effectiveness in what used to be done, then there is a further gap. Sustained internal debate seems to characterise the competent, whether they be individuals or nations, companies or social groups. Such debates generate the framework within which the plethora of latent options and quasi-information can be filtered and made useful

There is natural hierarchy which determines this usefulness. An item can be potentially relevant noise. Data and fact heaps lie one step above this, and can aspire to become information, then knowledge and finally inputs into a general competence. What defines the steps along this hierarchy is the context into which the datum fits. Information is data in context: for example, "42"; could be a chest size or a salary, a hotel room number or a bid in an auction: context makes it into information. Knowledge, in this hierarchy, consists of structured relationships between the myriad of contexts that might be applicable, and competence is the creation and exercise of options as a result of this hierarchy 'coming live'

The skills that are involved may, eventually, find their way into the arena of public policy. However, the complexity and the adversarial nature of public debate may well make this an absolute limit as to how fast we can adapt our societies and public institutions in a fast moving, competitive and inter-linked expert world.

We can see something of the clockwork of dispute resolution when look at small groups, rather than huge societies or individuals. Coarse emergencies or simple drives often create individual leaders, who dictate to the group. The may do this in a 'consultative' way, which is to say that they set out the terms of reference and then invite fine tuning. The group, however, cedes direction to them for the course of the emergency, rather as the Romans voted in a 'dictator' to reign until matters were normalised

In more complex situations, however, no one individual or group can easily claim the high ground. Alternative rationales are in play. Settlement relies upon the trading of advantages rather than intellectual agreement. It may also depend on reaching agreement about where boundaries are to be drawn around the validity of a given rationale, way of behaving or group identity. We often negotiate withdrawal and trade across boundaries, rather than unity and homogeneity, but we seldom note the distinction that underpins these kinds of agreement. The former is not robust to change, whilst the latter is able pursues joint competence and can be expected to adapt itself, to change and to last. However, homogeneity of views is hard to achieve, and most societies make a virtue of heterogeneity.

Commerce is unusual in having an ethos which is both unified and increasing international in its uniformity. It may well be, however, that increasingly heterogeneous organisations characterise the knowledge economy. Such organisations may have many different hierarchies in play at any one time, where co-operation occurs across boundaries of ownership, responsibility and culture. The environment that nurtures innovation is not the same as the world of the end game and the efficiency drive. Each cadre judges a proposal in a different light, and for it to succeed, it has to satisfy most of them for most of the time. "Leaderful" organisations - competent, empowered - negotiate rather than analyse, and tend to act on tacit, deeply embedded understanding about internal social realities as well and assorted views of economic and other truths about the external environment.

Resolving competing rationales

Resolving competing rationales

People who work in a firm are subject to multiple demands, to uncertainty, to over-direction and to mis-direction. This said, there is a tide in their lives and the goals of the firms are usually reasonably self-evident: to prosper, to expand, to satisfy some well-defined external interests. How to do this may be open to debate, but that this needs to be done is not.

In their daily life, however, people are by no means so easily aligned to events. There are few unchallenged, unambiguous value systems in play. Almost every important, intangible structure in our societies is subject to ceaseless 'discourse', to a competing interplay in which differing values and rationales are expressed through different media. The outcome is a shifting centre of weight, surrounded by an expanding halo of outlier positions around almost any topic.

Whole societies face options which were once restricted to a tiny elite. New options arrive in bewildering plenty. The average individual in the western world receives around 14,000 advertising messages a week. The pool of knowledge - let alone noise - grows rapidly: the database of science is said to double every two years, that of biology, every nine months. Telecomms traffic - presumably and against experience, conveying information - has multiplied itself by around 75 times in the past five years, thus doubling every five months. At that pace, all of the telecomms traffic in this year, 2000, will occur in a second in 2020.

How are we to cope? Perhaps by turning our head to the wall. Denial is not the route to competence. Filtration is, of course, the key: we need to know which bit of noise matters to us; and we need access to an interpretative network that explains the world to us. Boiling down the complexity into something tractable is a key skill: all that was getting and spending had to await Maynard Keynes to invent the idea of national accounts, Gross National Product and the like. Now we are happy to bet our pensions on what one cognitive artefact (GNP growth) may do to another intangible (consumer confidence.)

People are made yet more complex by the phenomenon of 'unboxing'. The range of attitudes in a population can be characterised in terms of the underlying dimensions that are at play. Mass Research was one of the earliest of the systemic collectors of data in regard to values and attitudes. In 1947, it was possible to capture the bulk of variance within the UK population by reference to four variables: age, gender, social class at birth, educational attainment. By 1975, around a hundred variables were needed for the same task. However, the individual tended to stay in the 'box', however finely divided the population were into such boxes. Such segmentation was highly predictive of individual behaviour and values. One could target a product at a box and tailor communications to that group.

In the early Eighties, however, this segmentation failed. We became 'unboxed'. Unboxing is easily recognisable. You, the reader, may become a concerned environmentalist, a rabid consumer, a tough boss and a tender parent in the space of five minutes, before dropping all of these hats in order to be - perhaps - a 'party animal'. Major features - such as infirmity, wealth, professional experience and ethnicity - all module these tendencies, but it is almost universally true that the citizens of the industrial nations are no longer bound to any one interpretative framework. Naturally, this has practical implications for marketing and politics. It has major implications, however, for the acquisition of competence.

We acquire our values and insight from our peers and those to whom we look up, particularly in childhood. The relativism innate to unceasing erosive discourse and to unboxing has weakened these messages: says who? Who do they think they are?

Further, unboxing allows us to cherry pick the 'nice bits': we can feel environmental indignation, but do nothing about it; enjoy a wild party and then go back to work as an accountant. There is no constraining rationale that unifies the experiences of unboxed life, save for those who have created their own* or who have been raised in ways which deny unboxing.

This is both the essence of one kind of lax freedom and the denial of a more significant liberty, that of self-governing competence. To take charge or ourselves, we must attain insight. As with a company, this is hard work. Group ethos, marketing messages - or which more in a moment - and political interpretation are no longer very helpful to us. We need to grind through the processes of discourse with those with whom we have contact so as to arrive at competence.

The political world faces significant difficulties as a result of this and other forces. As the retiring Speaker to the UK House of Commons remarked, never have democratic institutions been held in so low esteem

Four quite distinct operational issues confront politicians: thinking of policy, getting elected, enacting their policy and overseeing the routine of public works. Few individuals are good at more than one of these. The party system brings a corporate approach to bear, allowing specialisation. As the specialists have become more professional, so emphasis has shifted more and more strongly onto the mechanics of 'how' to achieve a goal, and away from the traditional and legitimising issues of 'what' should be done. The consequence is machine politics and the apparent flight of commitment, the emphasis of message over content and the growth of politics as brand management. This is an unsatisfactory starting point for the pursuit of national competence.

Parties used to represent a dimension across which the electorate naturally polarised itself. 'Haves' faced off 'haves not', old power faced new money, religious faiths found compromise, the city and the country brought themselves into alignment. Everything that was public policy then became a position that fell naturally into these camps of interest.

A number of things have gone wrong with this structure. First, we are now unboxed and do, therefore, not easily fall into one, two or a dozen polarities. An elector can have views on education which are completely without predictive power as to their view on, for example, public health. People do not bundle, and so representative politics which relies upon bundling cannot work. There is no fundamental, unified "Tory", "Christian Democrat"; or "Republican" set of values or policies that can be advanced, such that these will please enough people enough of the time. What has had to replace meaningful bundling is brand management.

Second, the issues of governance are immensely complex. The institutions of the state have expanded hugely. The state spends four times as much of a far larger economy in 2000 than it did in 1900. It has to tackle an immensity of tasks at many levels. The managerial tasks have become very considerable, not least as compare to the formation of policy. The issues associated with routine delivery are, for the majority of the electorate, arcane and dull. The media cry up problems, but never flag successes. We are thus educated to 'leave it to the system' but also expect to be failed by this.

Additionally, the issues have become framed by experts and special interests, such that options are constrained by external views of best practice that come with a big stick, as with capital markets' views on economic management. Good policy conforms with these expectations and with the (real, meaningful) tools which this expertise has created.

Politicians are faced with tightly bounded options, fervent alarms that are triggered when they transgress these boundaries, massive complexity, rapid chains of events, a critical electorate which is concerned chiefly with delivery and not with policy. Democracy in the knowledge age therefore demands competence of a political class which is too small, too homogenous and insufficiently educated to possess it in isolation, and of a society which cannot be bothered to make the effort to acquire it

There are, therefore, some profound institutional problems ahead of us. How we are to make good (informed, accepted, understood) choices is already and issue. It will become more poignant as the competitive forces in the world intensify, as surely they must as we all pursue best practice, tighter connectivity, lower costs.

Complexity, speed and expectations will increase. The need to delegate tasks to experts and to focused governance will increase. Expert scrutiny will grow, media pressures will intensify. Special interest outcry amongst the less expert will gather and grow with the media. The 'professionalism' of the political machine is caught in a Darwinian ratchet. The West also faces demographic pinned pawns: issues of age and unfunded health and pension commitment, of welfare management, of ever-increasing scope for regulation and harmonised partnership, invariably the source of yet more regulatory arcana.

There are few cues as to how all of this may develop. The key players - the political machines - have no interest in change. A complete 're-invention', as promised by the first Clinton administration, seems out of court. Nevertheless, there are discernible trends that point to various forms of fragmentation. These are important elements in the 2000-01 Chatham House Forum scenarios

Important transnational forces are at work. As a consequence, international integration will accelerate, and the consequences of this will impinge strongly in national arenas. The impact of EU legislation on national sovereignty gives a sense of how this may develop. The pursuit of best practice will continue, and with it the growth in evidence-based policy and operational delegation of tasks to expert agencies. These will acquire lobby groups which are interested in their area of specialisation, and all of this will be embedded within systems of scrutiny and feedback that will constrain political options. Local governance will take a stronger hand, whether this be in regions or with regard to activities.

All of this is broadly 'rationalist' and set to pursue universal goals. We can also be certain that more distinctive rationales will take to the stage, both because more groups have become self confident and because more people gain self-significance through unboxed affiliation with interest groups. The media, too, have a role to play. In addition, increased connectivity will bring more groups into international affiliation and give a voice to those hitherto regarded as too small or too inarticulate to matter. These voices may be far from rational, and will certainly not subscribe to a single rationale. Any one that can articulate a good case may well be able to veto aspects of the conventional political process, at least temporarily. The more open, transparent, interconnected and subsidiary the process, the more that this will be true.

We began this paper by asking how we made choices. We can do so in formal, often centralised ways, or we can choose as individuals, thus creating markets, social norms and the like. At first glance, the past two centuries are evidence for a strong trend away from the 'central' and the elite and out to the local and the distributed. There have been some conclusive experiments as to the hopelessness of extreme centralisation. Nevertheless, the public sector is stronger now than ever in history. It has a breadth of responsibility which would appear extraordinary to an Eighteenth century eye. Where there are strongly developed markets and decentralised decision taking, there we tend to find the most intense - or anyway, structured - regulation and legal frameworks. Social ties flourish where property rights are assured and interpersonal oppression curtailed.

It is, therefore, a mistake to imagine that the state will become a lesser thing in the years ahead. The state is now less arbitrary, and it is faced by a myriad of checks and balances. It is more expert and more consultative of experts. What is needed is a powerful re-consideration of what it does at its heart: where major policy is considered, where processes are designed, integrated and overseen; where knowledge is prioritised for capture and consultation set in train.

If one considers how a firm divides its labour and how a democratic structure does so, major gaps appear. A parliament is both the governance and the external critic, the strategist and the division head, the research arm and the compliance group. Political parties both complement and supplant these roles. The executive also engages in all of the above, but in many ways separate from parliament and always beholden to different interests and time frame, including the media. The tasks of senior appointees are superhuman, but delegation is weak and the relationship with the civil service and other support groups very different from that found in a commercial structure. Some of these 'bugs are features', but many are historical remnants of no obvious utility. A division of powers and responsibilities is needed: essentially, the state needs to pursue public competence, with political appointees as one element in such a process

One feature which has passed its sell-by date is the tradition of bi- or tri-polar political parties, not least for the social reasons which we have already discussed. The party lies at the heart of the 'mechanisation' of politics. It suppresses debate, substituting brand. This is usually founded on a reputation for effectiveness, lightly tinged by a stylistic approach to issues and heavily weighted to the personality of the party leader. It is intent on offending nobody, whilst distancing itself from the other brands on offer. It knows nothing of commitment, save to its own capacity to expand and conquer.

Brand is, however, a general feature of a complex age, creating navigation cues and boundaries by which individuals can find their way, to the advantage of the brand owner. The section which follows anatomises brand and takes us into the review of what we are to draw from all of this.

Brand

Brand

Brand is best thought of as combining two distinct kinds of identity. One is product identity: what this thing is and what it does for you. The other is usually called 'source' identity: who these people are, and how much you can trust them. Both are as valid for a political party as a purveyor of soap. The demands of brand impose limitations information interchange, however, and a branded entity is always going to be a warm, fuzzy presence. If that is what we want from soap, then so be it. It sits poorly with the demands of competence and national governance.

Product identity goes through four stages

  1. You can wash yourself with this stuff!
  2. Unlike the other soap on the market, this does not dry your skin.
  3. This gentle soap is for you, young Sir, and the spots will soon go if you wash you face with it every morning.
  4. A soap to change who you are... lazily reach out a languid hand, and foam on a world of glamour.

That is, the product offer changes, shifting from what it does for you to who you become as a result of using it. Wall paper, for example, can be thought about as something to hide the bricks, or as a harmonised personal statement about an attitude to life. The latter is harder to create than the former and, as a consequence, people pay 20-200 times production cost for some low grade cardboard with marks on it if the brand stage has been correctly developed.

A well-structured stage-four brand can offer life guidance, suggesting an identity and then offering myths and life choices set against this. It describes a new box for the unboxed, and offers a route into it. 'Power dressing women' was a splendid Eighties marketing concept, aimed to reduce the uncertainties of those who needed to navigate in then-unknown territory. Exactly similar brand concepts are peddled in consultancy and computer use, financial fashion and political trends.

Source identity is less about the product than the supplier of it. The supplier's brand should confer confidence, as with a political party. This confidence resides in three areas

Formally, these consist of transparent supplier motives, consistency of action against motive, consumer clarity on what constitutes defection from the brand contract and, finally, having sanctions to evoke when they evidently have done so. Why doctors do what they do is understood, that they follow these goals is clear, that a straying hand can be detected is usually clear and the sanctions that can be evoked are well-understood. When any of these fail - as with recent Belgian, US and UK-based scandals - trust is betrayed and public reaction is powerful.

The public demand potent concomitants of trust when the risk that is involved is seen to be great. Where the risks are seen to be high and the controlling structures appear to be are absent - as with GM foods, for example - then the public reaction can be strong. It can also be seen as non-rational, for public rationality is founded in the concomitants of trust: how are sensible-sounding people going to keep these odd individuals in check? Technical statements can sound like a restatement of the problem, not a resolution of it.

Much is made in the literature about the 'unity' of a brand. This has two meanings, one of which has already been explored. The more common use muddles 'brand' with 'competence', suggesting that the brand of a firm is identical with its values and ethics. Supplier brand must be a customer-facing unity, and it must deliver on the promise implicit in that unity. Stage Four brands are not, however, a corporate mission statement

Given the rising importance of the 'potted concept' in advertising and marketing, in self-dramatisation, in politics and in news reporting, it is particularly important to note what brand is not. It is not analytical. It is not holistic or complete: it is a projective fantasy, which works when it does and fails hopelessly when it does not. This can be a peril when significant decision-taking is based on potted concepts.

Plaiting together the threads

Plaiting together the threads

These threads weave together to form a rope, with which we may be rescued or hung. We have noted four things.

First, our capacity to make good choices depends on our joint oversight upon and capacity to act within our operating environment: our competence.

Second, we have noted that group competence is hard to achieve and an effort to maintain. It requires new managerial and personal disciplines. It has much in common with some aspects of what is peddled as 'knowledge management'. The formalisation of these issues has been called 'corporate learning, but naming it does not mean that we know how to do it, or have the will to take on the overheads that are involved. Commerce is ahead of the game on this, but many public institutions and much of private life lag far behind, or are distracted by other imperatives.

Third, society and its institutions are casting themselves adrift from former quays on the shores of competence, and are doing so without a map to a better mooring. This is occurring at a time when the issues are intense and likely to grow more so, and when the structures involved are becoming very much more complex than hitherto.

Fourth, what we call 'brand' is increasingly related to a wide range of issues. At one level, brand confers information about a syndrome of behaviour. Soap operas and other worked examples deliver similar information to mass markets. Brand has come to stand for meaningful representative politics, and will continue to do so as long as the bipolar (or virtually any) party system lasts. In general, the compression and filtration of news through cosy assumptions, politically-correct filters, pre-established narrative 'hooks' such as malfeasance, ad hominem adversariality or focus on personality causes representative institutions to appear fragmented and weak. This may be the new face of populism.

Human society is the most complex object in the known universe. Nations differ greatly in the complexity that they support. Each require a system of added value, machinery of public governance and a self-organising framework for private life.

Economic and social development has consisted of the invention of better ways of operating on each of these axes. Sub-Saharan Africa differed from Asia by only a few hundred dollars per capita in 1950, rather than the gap of thousands of dollars which exists today. Indeed, the inhabitants of most African states are individually poorer today that fifty years ago. World Bank studies were able to attribute the bulk of the African-Asian split to institutional competence and adaptability. Africa is badly managed, and so does not get richer until matters improve. Countries such as the Asian tigers grew their commerce far more quickly than their institutions or societies could adapt, and a sharp correction occurred when institutions failed in 1998

Most of the OECD nations have grown at around 3% since 1870, passing as they did so from dependence on agriculture to post-industrialisation. What innate limits set these rates, that are unchanging from the horse and cart to virtual meetings? This is a far from academic question, for Britain averaged a mere 2% over this period, moving from being a world pre-eminent power to also-ran. In explaining growth distinctions, economists point to investment intensity and efficacy, savings rates and human resource investment. This shifts the problem back one step: why do these rates differ between nations? Seemingly, the key issues is how we take choices. This in turn revolves around our social model (of who we educate and inform and how we do this, of how we see society as best organised and the institutions which we install so as to achieve this.) The pace at which we can renew these models in the face in the face of evidence may also prove a potent variable.

Long term growth

Figure 1: Long run growth in four industrial nations

The figure shows long run economic growth in four industrial nations. Each had a major setback, in the shape of World War II. Each grew rapidly back onto trend, enjoying an 'economic miracle' as former successes were recapitulated. Once on trend, however, they were once again, perhaps, limited by the pace with which the society could handle complexity. They settled back upon the same hundred year growth rate once that they had enjoyed before the onset of crisis.

The four points with which this section opened face us with a major challenge. Renewal will not just happen, and the longer we delay analysis and remedy, the more difficult the leap may be.

Events are projecting us into completely uncharted waters. There will be more graduates in the world by 2020 than there were people in 1900. They will communicate in unprecedented ways. The capacities of science and technology will be the stuff of contemporary science fiction. Companies may well be achieving something like a collective intellect, and independent machines may handle routine cognitive tasks better than humans. Social science will be attaining the status of a predictive discipline. There will be global standards of best practice, and ferocious penalties for not meeting these. Around half of all business output today consists of patterns of knowledge. By 2020, this will have grown, as will the capacity to steal such material, to engage is dangerous technologies and crime in ways that impinge on normally law-abiding parts of the world. Our destinies will be bound by tight springs, and shocks will propagate quickly and widely. Renewal - defence against this, leaping to better ways to operate - will not just happen. We must make it so.

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