The Fifth Risk

As I write this it’s unclear whether the current British Government will survive. Amidst the chaos, spare a thought for the civil servants who have to keep the show on the road. They’re incredibly important.

For a description of why their expertise matters, read Michael Lewis’s new book The Fifth Risk. It’s terrifying. There’s no other word for it. It examines what’s been happening in the transition from the Obama to Trump administrations.

Lewis interviews people who worked in three of the most ‘boring’ and misunderstood government departments — Energy, Agriculture and Commerce. Actually those departments are responsible for nuclear safety, the US food supply and predicting the weather — including tornados. Without their expertise and knowledge, the US would be an extremely dangerous place.

You could sum up his conclusion on the machinery of government as ‘I think you’ll find it’s more complicated than that’. It takes dedicated, intelligent, experienced people to make things work. The implications of the complete failure of Trump’s people to understand this are scary but perhaps the worst is the nuclear threat. That’s where the title of the book comes from. The first four risks rattled off by the person who used to run nuclear safety are fairly obvious — a dirty bomb, a broken arrow and so on. But the fifth risk is ‘project management’. There is no evidence that the Trump team understands that and good people further down the organisation are leaving in their droves.

Fortunately, we have far fewer political appointments in the UK so the majority of the machinery of Government remains when you have a change of political leadership. I know ‘experts’ are out of favour at the moment, but I for one am very glad they exist.

What to think about Bitcoin?

The strongest evangelisers of Bitcoins have always been libertarians. But an increasing majority of the people interested in Bitcoin are only “libertarianish”, despairing of government rather than opposed to it.

I’m not quite sure what to think about Bitcoin but the feature in this weekend’s FT has a healthy level of scepticism which probably mirrors my emotion towards the idea. When a financial asset is ‘interesting’ and fluctuates wildly up and down, I tend to stay away. I’m not anti-government but I also doubt that governments will retain a monopoly on currency forever. To be honest I’m more interested in innovation in banking than in currencies. A user-friendly system for making transactions and financial planning — now that would be truly radical idea.
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The power of inquiries

It strikes me that 2012 was a good year for inquiries. Lord Leveson’s into the phone hacking scandal and media standards was perhaps the most high profile but there were many more such as the Vickers Inquiry into banking and the Tyrie Inquiry into the Libor rate fixing scandal. Each had different processes and powers and will probably have varying effects on the things they were set up to investigate.

I started wondering whether how you do inquiries as a nation might be important. We run public inquiries very rarely because they’re generally thought to be expensive and intrusive but maybe we should have more. What if we systematised the process and had a National Inquiry Service that could handle much greater throughput than just having one Levenson scale inquiry every few years for example?  I don’t know whether there’s a country that does it particularly well but in terms of learning the lessons from failure, it might be something we should do a lot more of.

If we got it right, the culture of investigating, analysing and recommending could be something that begins to permeate other areas of life. In my experience, organisations vary wildly in their ability to learn from events. I remember reading about Alcoa’s approach to accidents in the 1980s where within a week of any accident, the division head had to write to the CEO of the company (Paul O’Neill at the time) saying what had happened, what had caused it and what was going to be done to stop it from ever happening again. Over time it had a huge effect.

It’s also something I wish we taught much more. The skills involved in learning how to improve systems seem to be much neglected but could have a really positive impact in lots of settings. Anyway, just a thought.