Cargo-cult management
Published on 24 October 2024
When I began my career in government I expected that a lot of the pathological behaviour observable from the outside would be explicable from the inside. That is to say, I believed that when something stupid was done it would usually come down to someone facing a perverse incentive where their own interest was not aligned with that of the broader organisation or taxpayer. The solution would simply be to design an organisation where workers don’t face those perverse incentives any more. The remainder of the issues would simply be due to incompetence, only fixable through hiring and firing.
Now misaligned incentives do happen, but I’ve been surprised at how little it occurs. If anything, the public service doesn’t suffer from misaligned incentives so much as non-existent incentives. Job performance isn’t used for promotions, pay, firing, social approval etc. but it’s not really replaced by any other criteria. Ambitious people might invest a lot of time into networking for instance and it virtually never pays off either.
I really think this is the key insight into why bureaucracies tend to degenerate into Kafkaesque absurdism, so I’ll repeat it: modern bureaucracies are characterised by the absence of incentives.
Before I articulate what the lack of incentives does to an organisation, I’ll briefly explain why government ends up like this. In say a public company the CEO wants to generate shareholder value, and he then creates incentives so his reports work towards that goal, and so on down the line. The objective, increasing shareholder value, might not propagate down the org-chart very well, perhaps by middle-management you’ll find people deliberately reducing shareholder value, but at least it exists somewhat.
In a department like mine, the secretary wants to impress the minister, who only cares about tomorrow’s headlines. But the overwhelming majority of the work carried out by the department has no relevance to this. The secretary, the head honcho, doesn’t care about virtually all the work that happens underneath them and thus their underlings aren’t rewarded or punished based off performance either. So priorities don’t even begin to flow down from up on high.
Secondly, managers in the public service are very weak. They lack the power of the purse, they don’t have discretionary budgets, funding is allocated towards projects with treasury oversight. They also have very little discretion in personnel matters; HR wields some degree of power independently, the strong public sector union makes it difficult to make changes, and various rules (explicit or otherwise) are such that you can only delete positions and not create them even with the savings made from cuts. But whenever you delete a position you reduce the headcount of a whole chain of managers who will hold it against you. So changes are just never made outside of redundancies due to efficiency drives and hiring sprees when new projects are created (e.g. as an election commitment). Promotions as a rule don’t exist, you move up only by applying for new openings when someone else has moved or retired, and typically your current boss or their bosses have very little if any influence in whether you’re successful in this regard.
In an ordinary organisation, the typical incentive structure is something like: you want to make your boss happy, by making them look good to their bosses. But as I’ve outlined, the boss’s bosses don’t care about the department’s work and no-one really cares what their own boss thinks regardless because they have no effective power. This is what I mean by a lack of incentives, there’s simply no strong reason for anyone to do anything.
The most common response to this state of affairs comes from sane, unambitious people who proceed to do as little work as possible, keep their head down, and focus on things other than their career. For understandable reasons, the public sector has a lot of workers like this. These people are not the main cause of problems, they’re just relatively unproductive.
The next category of people are the sane ambitious people who leave for other sectors. Why compete in a game that doesn’t make any sense, when you can go somewhere else and can compete in a game where talent and hard work are rewarded?
This leaves the third category of people: the insane ambitious people who are intent on climbing a hierarchy with no clear path upwards. Not only do these people end up constituting approximately 100% of managers from middle-management upwards, but the dysfunction of the organisation is a mirror of their own disorganised minds.
Now while these people were always stupid and suffering from various personality disorders, the sheer number of them suggests something else. That bureaucracy seems, in a mild way, to be psychopathogenic. If you put people in a pyramidal org-chart where most people want to rise up, but then provide no mechanisms which allow people to work towards that goal, then people are driven mad and start to imagine all sorts of things. Like a man in the sensory deprivation tank who starts to hallucinate, so too do many workers deprived of incentives start adopting all sorts of odd behaviours in the mistaken belief it will lead to a career success.
So to get back to the original question, most problems when I trace them back to a root cause are due to someone thinking that doing x will help their career, even though it wouldn’t and there was no good reason for the mistaken belief. For example, there might be a critical report produced every week that’s cheap, widely used, and considered important by senior management. A middle manager might scrap that report in a misguided attempt to look managerial even though it only angers everyone. This won’t hurt their career for reasons I’ve already stated. The report probably won’t ever be reinstated – senior management have no carrot or stick, and they might perceive that pretending to support the change is some clever 4d chess move in the game of office politics (it isn’t). Or they’ll instruct someone to have it reinstated, and that person will do something completely different for some reason that makes no sense either.
To be clear not every specific decision is entirely irrational, often you’ll see something like: x is a rational attempt to accomplish y, which is necessary to accomplish z, but z itself is completely insane and dreamt up by a lunatic who thought it would help their career. So if you’re not paying attention (like most public sector workers, who recall are paying as little attention as possible), you might think the organisation is behaving in a broadly rational way as you’d expect from a Weberian bureaucracy. It’s only when you try to trace decisions back to their ‘first cause’ that you realise that they never make any sense, by which I mean they didn’t serve the organisation’s purpose nor did they help anyone in their careers.
Now I expect any reader at this point, who hasn’t worked in government and paid careful attention to its happenings, is extremely skeptical of my account. But I’ll furnish an example that most people are familiar with: linkedin. linkedin is full of insane posts, someone will write something completely unhinged like ‘my twin-sister was hit by a truck when I was a kid but ultimately it was a good thing because it made me appreciate B2B SAAS’. These posts are clearly written in the hope it will help the author’s careers, and it surely doesn’t. No-one’s reading that and thinking ‘I like the cut of his jib, let’s make him CMO of my SAAS start-up’. My point is that the public service is dominated by the sort of people who write those posts on linked-in. I don’t think I’ve met a director sufficiently sane that they wouldn’t write something like that on linkedin. And if that’s what they do on a social media site, imagine the sorts of bizarre behaviour they exhibit in their day-to-day jobs as managers.
Now while there’s plenty of insane ambitious people in the organisation who’ve never even made it into lower-management, it’s undeniably true that they’re increasingly over-represented as you rise through the managerial ranks. This makes it look like they’re doing something right. But remember, unambitious people don’t apply for managerial jobs, and the sane ambitious people leave the sector. The thing they’re ‘doing right’ is probably just applying for managerial jobs when they’re made vacant. Nonetheless, the fact that being insane is strongly correlated with how high you are in the hierarchy provides the illusion that being insane is a good career strategy. As a result, the insane ambitious people tend to emulate the behaviour of those above them in the hopes it will produce the same results for their careers too.
This likely explains the proliferation of business-jargon, which seems to jump from senior management to their underlings, or fads like blockchain or AI. Management is one cargo-cult after the other. No-one knows what leads to career success; they’re just creating superstitious rituals and copying the rituals of their fellow-managers in hope.
I don’t want to claim that all managerial behaviour is shared in this fashion. After all, managers are competing with other managers, they want to stand-out, so each will typically adopt their own idiosyncratic strategies to signal their managerial competence. One might try to give Churchillian speeches at every opportunity, another might aggressively micro-manager his reports, a third might constantly yell at people and make them cry. None of these strategies ever makes any sense.
Needless to say, the fact that managers end up being surrounded by other crazy people for 40 hours a week undoubtedly contributes to their own increasingly erratic and confused behaviour. This is mass-psychosis. I’m not at all convinced someone could spend their lifetime trying to navigate a bureaucracy like this while maintaining their mental soundness.
Sometimes people ask me, how would you fix the public service? As you can probably tell, I’m not convinced it can be done. Any sort of reform must be, in part, implemented by those currently employed in the organisation. If the managers are all mentally unwell and LARPing as managers, I don’t see how any reform can be successful. Priorities don’t flow through the organisation, information doesn’t flow through it, it’s like a brain where every single neuron is defective.
By far the most likely outcome if you parachute someone sane into the top post is that they go native like Colonel Kurtz. Only starting again and building from scratch offers any chance of success.