Episode 7 - Turning the purpose of management upside-down

The ideas of complexity helped us explain why outcome-based performance management is failing
Toby Lowe

This episode is a conversation with Toby Lowe of Newcastle Business School about his work applying complexity ideas to the mangement of social interventions.

 

Selected quotes

"The idea of complexity helped us explain why outcome based performance management [is failing]" - 3:09

"Outcome based performance management ... and New Public Management ... is conceptually flawed" - 6:21

"We needed a new paradigm" - 6:41

"You've got a crackpot idea about doing something fundamentally different. How do you persuade people to pay you to do it?" - 7:15

"Is it ok to talk about complexity?" - 10:02

"When we first started out on this path, people explicitly told us not to use the language of complexity because it was off-putting" - 10:48

"...dismantle ... the idea of randomised controlled trials" - 13:40

"Delving into the conceptual ideas which underpin this help to really get to grips with some of the failures of the existing forms of public management" - 13:59

"The concept[s] that underpin complexity provide that fundamental challenge which was lacking before" - 15:05

"I'll see your health economist and I'll raise you a physicist!" - 15:40

"In a complex system we must be humble about any knowledge claims we make" [Quoting David Byrne] - 18:54

"To operate successfully in a complex environment ... you needed to trust the people who were doing the work because you needed to create the space for them to respond appropriately to the ever-changing detail of the context in which they were operating" - 21:03

"It turns the purpose of management upside down" - 22:24

"It's really hard to make the time to build relationships and do the really human scale things that enable this stuff to flourish if you're trying to operate within a management system that is fundamentally based on the ideas of New Public Management" - 23:27

"There's an increasing comfort with some of the language and ideas of complexity" - 24:54

"Even just two years ago, people were saying to us, 'Don't speak that language. You'll frighten people.' Now, we have the language of complexity spoken back to us." - 25:21

References

Toby Lowe - Bio

Toby is a lecturer at Newcastle Business School and his bag is the funding, commissioning and performance management of social interventions. His stick of Whitley Bay rock has got complexity written the whole way through it. Over the past couple of years he’s been involved in a hugely interesting research project applying complexity ideas to social interventions.

 

Transcript

0 minutes

Mark: Hello, I'm Mark Foden, and welcome once more to the Clock and the Cat, a podcast of conversations about complexity. The Clock and the Cat explores the emerging science of complexity ultimately to help you generate better ideas and make better decisions whatever you're involved with.

This is Episode Seven, and today, I'm going to be chatting with Dr Toby Lowe. Clock Cat regulars will be bored with this intro bit, but I have to say that if this is your first experience of this podcast, and you don't know what it's about, please do go back and listen to Episode One for a seven-minute roaringly riveting rattle on its origins by me.

Welcome back if you went away. I'm with Toby Lowe. Toby and I bumped into each other on Twitter earlier in the year, and we've met in person a few times since. Toby is a lecturer at Newcastle Business School, and his bag is the funding, commissioning and performance management of social interventions. His stick of Whitley Bay rock has got complexity written the whole way through it.

Over the past couple of years, he's been involved in a hugely interesting research project applying complexity ideas to social interventions. The project has produced two reports: A Whole New World, and more recently, Exploring the New World, which have been hugely well-received. They're linked in the show notes, so don't miss them. Toby, it's absolutely fabulous to have you on the show. Welcome.

Toby: Thanks for having me.

Mark: It's an absolute pleasure. Toby, tell us. How did you end up getting on the complexity bus?

Toby: What a great question. I ended up on the complexity bus because complexity helped to explain a problem that otherwise we couldn't get our heads wrapped around in public management.

Mark: What was that then, Toby? What could you not get your head around?

Toby: The problem I was concerned with at the time was why does outcome-based performance management fail? What sounds like a really good idea, that we should assess the contribution and manage the performance of social interventions, whether those are in the public sector or the volunteer sector, by the results that they make in the world, by the outcomes that they produce, that sounds like a really good idea, right? Who wouldn't want to...

Mark: It's completely natural. If you can't measure it, you can't manage it.

Toby: Exactly. And the evolution of that idea was that we start off by measuring inputs. That's not very good. Oh, we should measure outputs, so how many of the things we do. That's not so good. Oh, we should measure the outcomes and results of this stuff in the world. That's a perfectly sensible set of... the evolution of that thinking.

But the trouble is whenever that was studied in the world, whenever the implementation of that approach was evaluated, it basically said it fails, and it fails in exactly the same way each time. It creates gaming, people deliberately manipulating the production of data, rather than people actually improving the services themselves. We're trying to understand why this fails in the way that it does seemingly so universally. And the idea of complexity was what helped us explain why outcome-based performance-

Mark: Where did this first enter your enter your head? What was it that sparked it?

Toby: I think I read an article by Chris Mowles on complexity and evaluation saying we should stop trying to attribute the results that different interventions produce to those interventions themselves because in a complex environment, that's impossible. I was like, "Oh, I'm really intrigued by that idea," because it seems to get to the heart of the problem that we receiving in the outcome-based performance management world. And so it was Chris Mowles's work that first gave me the introduction to this.

Mark: Oh, that's really interesting because I did a conference, in fact, it was this May with Chris Mowles at the University of Hertfordshire. Are you aware of that? Have you been to that conference?

Toby: I wanted to go this time for this year's conference, but I found out about it too late. I'm hoping to go to next year's conference because the lineups and what they talk about look amazing. Just seeing if we were going to be able to afford it.

Mark: I found it absolutely fascinating, and it's quite radical, the sort of idea of Complex Responsive Processes. I don't know if you've read up about any of that stuff, but I found it absolutely riveting, so definitely worth doing. I did talk about it in a previous episode with Daniel Thornton, who's been to the conference. It's absolutely not to be missed.

5 minutes

Toby: That feedback sounds good. I shall try and bump it up my priority list.

Mark: You read something that Chris Mowles wrote, and it sparked the idea that it might help you with this sort of public management challenge that you've got. And so, how long ago did that happen?

Toby: That was about five years ago, I think.

Mark: Oh, gosh.

Toby: And so at that point, we'd got to the business and been able to say that the outcome-based performance management ... The previous position that people had got to was when they'd studied the implementation of outcome-based performance management was that it failed for technical reasons about measurement. Outcome-based performance management created gaming and perverse incentives because we weren't measuring the right things, or we weren't measuring the right things in the right way.

Complexity helped me to be able to demonstrate was the outcome-performance management isn't flawed in a way which can be fixed by a technical change to measurement. It's conceptually flawed and so, whenever it is implemented, it necessarily produces the drivers for gaming and for perverse incentives. And so you can't fix outcome-based performance management and by extension the whole of the New Public Management realm. It's conceptually flawed.

Mark: Is this what led to the New Worlds or the New World series of reports...

Toby: Exactly. What we realised was that if the current paradigm is conceptually flawed, it can't be fixed, so we needed a new paradigm to help us with the task of public management. How should we fund, commission, and manage public services and voluntary sector work, which broadly come under the heading of social interventions. And so it was complexity as an idea that gave us the launching point for the question, what can we do next? What should we do next in terms of public management?

Mark: That's interesting. You had this idea for this research. How did it get funded? I mean, did the Newcastle Business School pay for it? Because you've got a crackpot idea about doing something fundamentally different. How do you persuade people to pay you to do it?

Toby: What was interesting was that a number of people became interested in the idea. It will have been about four or five years ago now, I convened a set of meetings that involved some senior people at the Big Lottery Fund as it was then plus a range of other charitable foundations like the Tudor Trust and some other thinkers and doers in this space.

And so just tested these ideas out, basically. We think there is something fundamentally wrong with the way we're doing this stuff at the moment. We think complexity is part of the answer of finding out what we can do next, who will back us to experiment with this stuff. And fortunately, we got a small development grant from the Big Lottery Fund, and what that enabled us to do was to turn to a bunch of the charitable foundations and public sector commissioners who we'd been told were doing things differently, and we just asked them the question, how do you experience and respond to complexity?

Mark: So what was the kind of response that you had from them? Do they look at you blankly, or had they heard of these kinds of ideas before or what?

Toby: It was important that we set out what we meant by complexity because when we first started that process, there weren't very many people who were familiar with that language. We said to people, "And what we mean by complexity is complexity in the need that you experience," so when the people who are at the sharp end of the work that you support, whether those people have a variety of need, and so whether the outcomes that you're trying to create look different from different people's perspective. First, we said, "We think complexity means a variety of need."

Mark: You're talking in the sense of the sort of common or garden understanding of complexity and not particularly about the sort of complex adaptive system thinking?

Toby: No, no, indeed. We introduced them to the language of complexity in the research questions that we did, but we helped frame that for them by saying, "And this is what we think we mean by complexity," because otherwise, we would have just faced a lot of bemused... "What? Complexity? What are you talking about?"

10 minutes

Mark: One of the things that we talked about before is it OK to talk about complexity? Because my experience is, and particularly when I'm doing my consulting work, I generally try to avoid talking about it because, well, people think you're a bit crazy. Well, maybe that's just me because if you say you mean something specific by complexity, and they say, "Oh, what do you mean?" and then you're into this huge discussion about emergence and all that stuff. How do you handle that?

Toby: Well, one of the interesting things is that our experience of this has changed significantly over four or five years we've been explicitly using the language of complexity. When we first started out on this path, people explicitly told us not to use the language of complexity because it was off-putting.

But we thought actually there was something important about introducing this idea to people because without it, you can't explain why the linear processes of outcome-based performance management and other aspects of new public management fail. It is the nature of emergence, it is the dynamic nature of complex systems that are the crucial ideas which explain why the previous paradigm fails. You have to get to grips with and help other people get to grips with those ideas in order to help them to move the debate along some.

Mark: I think that's where I got to, and the reason I've got this podcast going is because I think it's important for people to understand. One of the reasons I wanted to start the podcast was I think it's really important for people to understand what complexity is from a technical point of view. And let's bring some of that into the language in exactly the same way that you might help managers to understand what statistics are and what standard deviations are.

Things like that are absolutely fundamental when making decisions on data, so why isn't this any different? The fact is that it's a comparatively, comparatively new set of ideas, and it's going to take a decade or two, probably, to bring that language into common usage. Well, it sounds very encouraging what you're saying, that maybe that's actually starting.

Toby: I think it's so interesting, Mark, and I want to pick up two things in response to that. Firstly, the ideas behind complexity are fundamental, are so important for this because one of the things that was said about the whole business of outcome-based performance management and the idea of measuring performance and holding people accountable for it is the people who were supporters of that use the language of robustness.

And they say that this is "robust work", and what complexity does is that that blows that completely out of the water. It demonstrates that that approach is fundamentally not robust. It is correct to use those kinds of approaches in complex environments. And we can show to the highest level of proof in the natural sciences that that approach is simply wrong in a complex environment.

The underlying ideas are so important for being able to dismantle this idea, the idea of randomised controlled trials as key evaluation tools in complex environments, people describe that as robust. It's not robust. It's epistemologically wrong in a complex environment, and we can demonstrate that.

Toby: I think that delving into the conceptual ideas which underpin this help to really get to grips with some of the failures of the existing forms of public management. That's why it's important that we talk the language of complexity.

Mark: This is really interesting because you're talking about randomized controlled trials, and when folks say that, you think it sounds good, doesn't it? But as you say, when complexity applies, then it just doesn't work. And it's that sort of goes-without-saying thing that gets in the way because people assume, "Oh, that's obvious that that's what we need. It's obvious we need to measure something." And there are so many things that have to be unpicked when we're dealing with genuinely complex situations.

15 minutes

Toby: And this is in the ideas and the maths which underpin complexity, and I would have to say that I understand complexity better from of conceptual and philosophical perspective than from a mathematical perspective. But one of the things I like about it is that there are different routes into this.

But the conceptual points that underpin complexity provide that fundamental challenge, which was lacking before, because otherwise, people who wanted to do the positivist quantifiable approach, they could always fall back on the argument that said, "This is the most robust. This is the most scientifically accurate. This is the most epistemologically founded approach that we can do. Therefore, everyone has to go along with it if you want to do this stuff well."

Well now, we can say, "Actually, no. That's fundamentally not true," and we can demonstrate it. And if you try and argue with us about the science underpinning this, I'll take your health economist, and I will raise you a physicist.

Mark: This is really interesting because one of the greatest physicists, Murray Gell-Mann, was one of the founders of the Santa Fe Institute, the chap that discovered the quark. And so there is a lot of quite hard science connected with complexity. It's just that in the sort of social and management spheres, we just haven't come across it that much. But as you're saying, maybe that's changing. Maybe you are changing it, Toby. In fact, you are changing it.

Toby: One of the questions that I have about the use that I put complexity to is that whilst I understand the hard science take on complexity from a philosophy of science perspective, and so I understand the epistemological foundations of this stuff, I don't speak the mathematical languages of the people who use it. And I sometimes wonder whether my lack of understanding of that means that I'm not applying those ideas correctly.

Actually, I was out at Stanford University last year speaking to their complexity group, which is coordinated by a fantastic scientist who studies ant colonies for his research area. And so one of the things I was really excited to do was to test my understanding of complexity in the management space against his more hard science understandings and have them pulled apart. And one of the nice things about that was that the stuff that we were saying seemed to survive that interrogation, which was great.

Mark: And so that's really encouraging, that the things you're thinking are being reflected by the sort of, let's say, more scientific end of things. But it does bother me slightly that quite a lot of hard science type folks are piling into this area and applying numerical techniques to, let's say, turn complex things into complicated things so that they can then be managed; ie build a set of analytical techniques that will deal with complexity. And of course, that's hugely attractive to people who are managing things because it takes away the complexity, but actually, genuine complexity isn't going to yield to that approach, or it seems to me anyway.

Toby: Indeed, and I really like the distinction that David Byrne draws between generalized complexity and restricted complexity. And it seems that the elements of the social intervention world have been a bit attracted to the restricted complexity side, for example, the use of agent-based modeling techniques in various planning processes and planning and design processes.

And I would never really try and pass comment on the detail on any of those because it's not my area. But the true potential of complexity, I think, lies in what David Byrne calls the generalised complexity and the fundamental challenge that that creates to the whole business of public management. And David Byrne has that beautiful phrase that says, "In a complex system, we must be humble about any knowledge claims that we make."

Toby: And I think that's the fundamental insight that complexity gives us into management because you can translate that really, really easily, say, "That means that any measurement we take in that system, such as, 'Is this outcome being achieved or not? How is this organisation performing? How is this team performing?' we need to be humble about any claim to knowledge we make from measurement."

20 minutes

Mark: That's really interesting, isn't it? Because exactly what you don't get in most highly charged situations, today being the day that the EU has given the Brexit extension to the 31st of January, just all that stuff echoing around. If there's a complex situation, then there's that one, but what you're saying and what David Byrne was saying is that humbleness is crucial to this, and actually, trust is as well?

Toby: Well, this is where we got to with the conversation that we had with the people that we interviewed when we asked them the question, "How do you experience complexity, and how do you respond to that complexity?"

When we asked them that question, they started to talk about relationships and trust, and we thought ... because I'd previously had an inkling that there was a connection between appropriate management response to complexity and trust, but I haven't been able to fully articulate it, so we followed up that question with those people who started talking about relationships and trust. "How do you use relationships and trust to manage in complexity?"

The practices we were able to uncover through asking those questions were fascinating in that they essentially revealed that to operate successfully in a complex environment as a public service or as a voluntary sector intervention, you needed to trust the people who were doing the work because you needed to create the space for them to respond appropriately to the ever-changing detail of the context in which they were operating. And so it made that fundamental link between the dynamic nature of complex systems and the level of detail that is required to make a good judgment within those systems and a completely different way of thinking about how management works.

Mark: If you're dealing with a complex situation, then the relationships and the trust has to come first. It's not the plan, and then we've got the plan, now let's build some trust around it.

It's the other way around, and that means that managers need a completely different sort of bias in their skills, I guess. They need to be much more in the territory of being able to build relationships and-

Toby: Exactly, because it turns the purpose of management upside down. It says it is your job as a manager to build the effective ecosystem in which the people who work for you operate. They can only know enough about the system to work well if they are able to build effective relationships across that system and particularly with the people that they're supposed to help.

How, as a manager, are you enabling them to build those effective relationships? How are you challenging any of the system conditions that would prevent those effective relationships? And how are you creating the conditions for trust in that system?

Mark: How do we make the time to build those relationships? I appreciate it's sort of fundamentally important, but if you've got business cases to write and management boards to satisfy, how do you make the time to do that?

Toby: This is why the change in practices that we're talking about for managers aren't just changing practices or changing ideas. They're a fundamental paradigmatic shift about how public management is done, so this is the argument that we make because it's really hard to make the time to build relationships and do the really human scale things that enable this stuff to flourish if you're trying to operate within a management system that is fundamentally based on the ideas of New Public Management - that we cannot trust the people doing the work and that you need to put in place effective metrics to monitor those people so that they keep doing the things that their people who know better at the top tell them that they're supposed to be doing. You can't just tinker with that stuff as a manager. You need to expand the whole sphere of influence so that as many people as you can are operating in that way.

Mark: I mean, Hillary Cottam's book this year I thought was fabulous because she talked a lot about that kind of thing I guess. I guess you know Hillary, do you?

Toby: Yes, I'm very familiar with those as a set of ideas, and I think the work she does is tremendous.

Mark: We've talked about, is it okay to talk about complexity? We've talked about the problems of measurement targets, and we've talked about complexity and trust. Is there anything else that you particularly think would be good to talk about?

25 minutes

Toby: I think there's been an increasing comfort with some of the language and ideas of complexity. When we released our first report called A Whole New World, the subtitle was Funding and Commissioning in Complexity. That was in May 2017, and in the build up to that when we were having it proof-read and checked and edited by different people, a couple of people said to us, "Don't use the language of complexity. You'll just put people off."

But for the reasons that we've gone through, I thought, actually, it's an important idea to get out there. Even just two years ago, people were saying to us, "Don't speak that language. You'll frighten people." Now, we have the language of complexity spoken back to us by a range of other people, so there's more than a handful of reports this year talking about the challenges of complexity.

I find this incredibly encouraging because even if they don't have a grip on the the full conceptual underpinnings of this, it means that we can say to people, "Fantastic that you recognise that this stuff is complex, but that doesn't just mean this is quite hard and complicated. It means as soon as you recognise a problem as complex, a whole different set of rules and practices are necessary, so the strategies that you have used to manage in a complicated or a simple environment are not the right strategies to manage in a complex environment."

And so even that partial understanding that people have gives us the space to create whole different challenges to existing practice. There was a report produced... a set of people in Scotland evaluating an intervention for older people, I think it was, and they said, "What should we do in a complex environment?"

And so they were recognising the problem in front of them that's complex, but then they came up with a very traditional set of recommendations around measuring outcomes better and basically all the things that new public management would have told them to do, just turned up to 11. But because they use the language of complexity back to us, we were able to say, "Oh, no. As soon as you recognise that this is a complex problem, those things that you think you just need to do more of or do them better, they're entirely inappropriate, and you need a different strategic response once you have identified that the problem is complex."

Mark: There we go. Toby Lowe turning the purpose of management upside-down. What a great place to finish. Thank you so much. That was really cool, really interesting. I'm sure folks are going to find it absolutely fascinating. Thank you very much indeed.

Toby: You're very welcome. Pleasure to speak with you, Mark.

 
clockcat title.jpg