US corporate raider Carl Icahn made billions from a simple discovery about many large corporations. All too often they embrace what he called “the anti-Darwinian theory of management” or alternatively, “survival of the unfittest”.
While managers claim that they will always seek to hire people who are smarter than themselves. In fact usually that does not happen, because their careers would be threatened. Instead, in order to survive, they hire people inferior to themselves prevent being threatened from below.
And as the unfittest rise in the ranks, and sometimes became chief executives, the enterprises are ripe for the plucking by raiders and private equity groups. In Australia, Zoom meetings are now exposing the corporate unfittest. The banking royal commission enabled Australians to see how promoting the unfittest works in the private sector.
But, even more graphically, the COVID-19 crisis has exposed for all to see that promoting the unfittest has made various arms of our public service simply unable to handle a crisis. Victoria is the best example, but it’s also been demonstrated in the Commonwealth public service and in Queensland Health.
Victorians are watching on their television screens how one of the worst decisions ever made by a government – not having proper security for overseas COVID-19 quarantine – cannot be pinned down to anyone.
Bloated bureaucracy
What they might not appreciate is that the Victorian public service has ballooned in size, creating a maze of crisscrossing responsibilities so that in any one decision it’s impossible to work out who is actually responsible. The interconnected departments spend vast amounts of time on meetings.
When the crippling quarantine Victorian decisions were being made, a number of foolish public servants made a video praising their own part in the disastrous actions. Apart from the lack of judgment, everyone wondered why on earth would people from “Global Victoria” (a trade department) and agriculture Victoria be concerned with guarding hotels. But it was part of crisscrossing responsibilities maze which also helps explain why the offer of defence personal from Canberra got lost in the system.
In Victoria to enable at least some decision-making accountability ultimate power was established in a so-called kitchen cabinet of about six ministers. It did not work in the crisis.
And in the COVID-19 fight, the weapons being used had to fit into agendas and legislation like human rights, inclusion, privacy, and the fight even got mixed up with the travels of Captain Cook. Some of these objectives are good but when you’re fighting a war with a vicious enemy like COVID-19 they have to be put aside, or you will be defeated. And of course, they were not put aside.
But it’s unfair to simply pick out Victoria. The commonwealth health department was supposed to run aged-care homes and clearly undertook oversight strategies akin the former banking regulators, and did not do the job. Simultaneously, the managers of too many centres are in those positions as the result of promoting the unfittest, and managed appallingly. The situation was also made more complex by the interconnected responsibilities of the federal and state governments.
Meanwhile, in Queensland the health department is a national joke because the managers of some key Brisbane hospitals actually ban the use of masks by nurses not treating COVID-19. They appear believe that the Queensland Premier will keep the virus out of Queensland.
Was there a warning?
Did we have any warning that our public services would be unable to handle a crisis? I think Victorians got a sneak preview of what would happen via its two major infrastructure projects: the city rail tunnel and the Westgate tunnel. Both were victims to this morass of interconnected responsibilities.
I should emphasise that there are many good people in all our public services, as well as in badly run companies. But all too often one of two things happen.
First, people with talent arrive at run-down public service agencies or companies and simply can’t stand the mess, and so go elsewhere.
Alternatively, they can become victims of the “Peter principle”, named after Dr Laurence Peter, who observed that in organisations people tend to get promoted to their level of incompetence.
A manger succeeds in a particular position and is promoted to a higher level. Then further success is rewarded with further promotions until the manager reaches their level of incompetence. Failure at that level is then a disaster for everyone.
For the remainder of the decade, Australia and states like Victoria, will have large debts and revenue streams that will be curtailed because of high unemployment. We simply will not be able to afford public service structures like those in Victoria.
But to change the situation requires massive retrenchment of the “unfittest” and recruitment of talented people. Victoria went through that process via Jeff Kennett and Alan Stockdale and now it has to do it again.
