Risk Is Our Business
Recently, I came across a letter from the Duke of Wellington to Whitehall during the Napoleonic Wars. He wrote the letter from Portugal several years before defeating Napoleon at the Battle of Waterloo.
“Gentlemen:
“Whilst marching to Portugal to a position which commands the approach to Madrid and the French forces, my officers have been diligently complying with your requests which have been sent by H.M. ship from London to Lisbon and then by dispatch rider to our headquarters.
“We have enumerated our saddles, bridles, tents and tent poles, and all manner of sundry items for which His Majesty’s Government holds me accountable. I have dispatched reports on the character, wit and spleen of every officer. Each item and every farthing has been accounted for, with two regrettable exceptions for which I beg your indulgence.
“Unfortunately the sum of one shilling and ninepence remains unaccounted for in one infantry battalion’s petty cash and there has been a hideous confusion as to the number of jars of raspberry jam issued to one cavalry regiment during a sandstorm in western Spain. This reprehensible carelessness may be related to the pressure of circumstance since we are at war with France, a fact which may come as a bit of a surprise to you gentlemen in Whitehall.
“This brings me to my present purpose, which is to request elucidation of my instructions from His Majesty’s Government, so that I may better understand why I am dragging an army over these barren plains. I construe that perforce it must be one of two alternative duties, as given below. I shall pursue either one with the best of my ability but I cannot do both.
“1. To train an army of uniformed British clerks in Spain for the benefit of the accountant and copy boys in London, or, perchance,
“2. To see to it that the forces of Napoleon are driven out of Spain.”
He used four paragraphs as a setup to tell the bureaucrats to go to hell.
The boys in the British Foreign Office at Whitehall wanted certainty. Sitting in London, it must have been unbearable to not know what was happening in real time. Everyone in Europe wanted the French defeated, something that wouldn’t happen for another three years. This was to be no mean feat. It was not automatic that the allies would succeed in vanquishing the dictator. The only thing Whitehall could control was what could be measured.
Alas, in war, not everything that counts can be reported to the farthing. Things like esprit de corps and luck and training and culture and leadership and strategy are only proven in the event. Wellington focused on the fight.
The bureaucrats at home wanted nothing left to chance, as if that were possible. Wellington was the ultimate manager of violence. He was immersed in uncertainty.
This is a frustrating aspect of bureaucracy. The people in the agencies that govern our behavior, whether it be government departments or those working in staff functions within private entities, have a mechanical disposition in a stochastic world.
Here’s the FT talking about efforts to reform bureaucracy in Europe.
“Fear of failure remains an obstacle in much of the public sector, particularly in Germany, where, Theurer says, ‘if you fail as a civil servant, you get your head chopped off.’
“Politicians’ low tolerance for risk further ‘limits the ability of bureaucrats to learn from and adopt successful private sector practices,’ explains Tom Burke, co-founder of environmental consultancy E3G.”
In the movies when we hear a leading character say, “Failure is not an option,” we recognize the inspirational call to pull out all the stops to ensure success lest the mission fail. In our daily lives, we understand that bureaucrats interpret the comment as a credo of self-preservation, indicative of the ultimate requirement to safeguard their personal careers, even if it means failing to squeeze all the juice from the organizational lemon.
There is, inevitably, a separating equilibrium. Those who love risk stay out of the bureaucracy. They avoid it. They hold it in contempt, considering it at best a fact of life to tolerate under protest. And then there are those who prefer the comfort and security a career in the bureaucracy offers.
This becomes a reinforcing, vicious cycle. As fewer risk-takers join the agencies, staffers model risk aversion as the way to succeed, creating a culture that is even more off-putting to the kinds of entrepreneur one might hope to see pushing for change.
There is a notion called “intrapreneurship.” It means to be an entrepreneur within a large, established organization, solving problems and driving progress. The word “culture”, as defined by Seth Godin, means “people like us do things like [this].” The culture of the bureaucracy makes it such that intrapreneurship is virtually impossible for, at least, two reasons.
One, the intrapreneur requires sponsorship from those above him in the organization. Should he fail, it will reflect on many people, not just him. They need to buy into the process. Depending on the entity, this is unlikely.
Two, given that one dimension of the culture in a bureaucracy is “people like us punish our colleagues who fail,” the intrapreneur must succeed on his first (or, if he’s lucky, his second) attempt. Two strikes and he’s out. The machine won’t let him continue after that, even if he manages to retain his job.
The stink of failure will be too much to bear.
You might think that it is possible to outsource risk-taking to outside contractors. But this still falls prey to the sponsorship issue.
And yet. There are reports of brave souls who are willing to stick their necks out despite all the reasons to hide in the safety of the crowd.
“For a growing number of leaders and practitioners, however, cumbersome systems in public, and sometimes private, sectors are fertile ground to grow something better. They are experimenting with new kinds of bureaucracy, from crack creative teams to job swaps and tech tools.”
Why do you rob banks? Because that’s where the money is.
It is a testimony to the selfless dedication of these people that they are willing to jeopardize their careers to advance the interests of the organization. In some cases, these heroes sponsor change. In other cases, they drive the change themselves. One benefit for them is that if they succeed, then they can live off the reputational proceeds for the rest of their careers. They are revered as people who make things happen, even if some of their less capable peers resent their bravery. Even if they fail, they can transition to the private sector to be embraced by their risk-taking brethren with scars and war-stories. Their courage makes them credible.
It’s important.
“At stake is not just taxpayers getting value for money but the survival of democracy, says Mexican-born Tatiana Munoz, a board member of PD, a consultancy set up by the German government to train the country’s notorious bureaucracy.
“…
“She heard from constituents disillusioned with mainstream politics after encountering obstructive bureaucracy such as delays to documents that prevented families from traveling.
“’People started to complain about politics, telling me they would vote for the far-right Alternative for Germany party or not at all,’ she says. ‘It turned out they’d had a bad experience with a public service … these seemingly little things have a real impact on people’s lives. The only defence tactic they have is their vote.’”
The irony is that bureaucracy can be strengthened by the kind of entrepreneurial risk-taking that its culture punishes. Bureaucrats are human beings who respond to incentives just like everyone else. There needs to be a cultural shift matched by real incentives that penalize risk aversion and reward experimentation. Bureaucrats need to embrace the possibility of failure and shun timidity.
Is this kind of change possible?