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The future is digital, so why is Britain’s national strategy waterfall?

UK government policy is dominated by old, traditional attitudes – rather like the waterfall approach to IT projects. Unless policymaking adopts digital-style approaches, the UK is doomed to long-term decline

The prime minister recently described Britain as “addicted to low wages”. He believes that low pay is taking the economy backwards – so much so that it is rolling back technological progress. For instance, Britain is the only European nation to have stripped out its automated car washes and replaced them with hand car washes.

It’s not hard to see the same process at work in the broader technology industry. The easy availability of cheap offshore resources can produce a similar pattern of low investment, falling wages, and poor quality service. But here, far from rolling it back, government policy is about to put this process into overdrive.

What comes first, theory or practice? Do we start an initiative by drawing up a design and then building it? Or should we begin by creating something and improve it through open-ended experimentation?

Problem solving

Two fundamentally different approaches to problem-solving have been brawling over this question for decades.

In the red corner, there is agile, lean, product development, service design, and the startup culture. They tell us to start with practice.

In the blue corner, there is the waterfall or “mass production” methods of the traditional organisation. They tell us to start with theory.

Maybe the final bell has not rung, but the eventual winner is clear.

The traditionalists have been on the ropes for decades. In sector after sector of the economy, organisations that start with practice have been displacing those that begin by drawing up a design. That’s why we call the current period the “digital era”.

Many traditional organisations are trying to move to a practice-first model in response, a process that starts by kicking off a lean or agile programme. But most find their greatest challenge doesn’t come from the programme itself but from the culture outside.

The culture of our organisations, and British society in general, puts theory first. Worse, whichever party has been in power, the drift of public policy over the past three decades has been to strengthen that mentality. In other words, as a nation, we are betting our stake on a fighter who is already face-up on the canvas, getting counted out.

How did we get into this mess?

Traditional methods

There was a time when those traditional methods drove revolutionary change. Developed by Henry Ford in the early 20th century, mass production methods drove such a great leap in productivity that they rapidly killed off the craft industries that preceded them.

These early triumphs pushed the culture of mass production into every economic sector, government included. That culture embraced elaborate hierarchies. It split workers into two groups of thinkers and do-ers. Work on the front line was made as simple as possible, and power was handed to managers and administrators.

Mass production methods drove such a great leap in productivity that they rapidly killed off the craft industries that preceded them

But towards the end of the 20th century, problems with this model became evident. Traditional organisations developed poor-quality products and found it impossible to respond to customer feedback.

Japanese manufacturers, US software developers, and Scandinavian design thinkers developed an alternative model in response. This fused thinking and doing, putting practice first. It promoted a new culture that did away with the old hierarchies and turned an organisation’s attention to the customer.

That model has since created many of the world’s most successful companies, but this has been an almost entirely US phenomenon – in the UK, the digital phenomenon is still being held back by mass-production culture.

Cultural resistance

Initiatives that put practice first tend to meet cultural resistance from the start. This begins with getting approval or financing, which requires a business plan that specifies the end product and the date of its completion. That open-ended experimentation is over before it has begun.

Staffing the initiative brings more problems. There may be pressure to use a fixed price tender. Again, the results of future research need to be written into the specification before the experimentation begins.

The culture of HR and procurement is another blocker. They are often so slow, initiatives are forced to commit to a beta stage of a project before the alpha begins – even though the point of an alpha is to leave open the possibility that the initiative will be rethought or even cancelled.

Worse, many organisations see a change of direction as an admission of failure, making it impossible to challenge the original assumptions whatever the results of the experiments. Projects are often driven onwards under their own momentum, becoming traditional programmes in lean-agile fancy dress.

But if our organisations have a theory-first mentality, this only reflects the strength of that outlook in the culture outside. Those attitudes are written deep into British society.

Take our educational system – it prepares the ablest young people for work by sending them away to study theory for three years. When they arrive at university, they find that the courses with the greatest theoretical content have the highest status, and the practical subjects the lowest.

Pure mathematics has a higher status than applied maths. Science has a higher status than engineering. And all of these subjects have a higher rank than vocational qualifications such as business studies.

In other words, we prepare young people for 40 years of practical activity in the workplace by teaching them that practical activity has little value. It’s not surprising that many want to work as far away from the front line as possible.

The nitty-gritty

We should have learned our lesson here long ago – this culture has already wrecked our economy once in living memory. Historians of industry attribute the collapse of British industry in the 1980s to these attitudes in university graduates.

An influential 1990 MIT study of global manufacturing explained the downfall of British industry like this:

“None of the English managers shared a conception of management that was compatible with [successful production]. Hands-on management was unattractive to the middle-class Englishmen who emerged from an educational system that steered them towards the civil service, the law, and other types of high-level administration. They didn’t want to get involved with the nitty-gritty of running anything…The performance of [English] plants went backwards to a point where an enormous gulf developed with practice [elsewhere].”

We should have learned our lesson here long ago – this culture has already wrecked our economy once in living memory

Despite this history, to alien observers, it must look as though the chief goal of UK government policy over the past 30 years has been to spread this toxic culture to as many people as possible. The massive expansion of university education from 3% participation in 1950 to 50% in 2018 has exposed far more workers to this outlook.

It has also created a huge oversupply of theory-oriented graduates and undersupply of practice-oriented front-line workers. Architects are now paid less than scaffolders, for example, although they must study for seven years. According to the Federation of Master Builders, plasterers, bricklayers, plumbers, and electricians now make more money than teachers, vets, nurses, and accountants.

Our naïve approach to globalisation also favours the traditional model. Moving front-line work to low-wage economies is easy for organisations that put theory first. They have already split thinking from doing. Outsourcing simply increases the physical distance between them. But it is far harder for organisations that put practice first to send their front line overseas. They need theory and practice to develop together iteratively on the front line.

Moving much of the UK’s practical labour overseas has the side effect of protecting traditional organisational models from competition – just as cheap labour protected the traditional hand carwash from the threat of automation.

Net-zero commitments

But it is the form the government’s net-zero commitments are taking that will have the greatest long-term impact here. These commit the UK to not so much a theory-first future as a theory-only one.

The net-zero targets do not include emissions from work sent abroad. So there is an easy way to meet them – simply send all the CO2 intensive practical work overseas and leave its administration here.

No matter how strong your commitment to ecology, this strategy is the worst of all worlds. It sends the front line overseas along with its associated jobs while delivering few environmental benefits.

According to the World Wildlife Fund, the UK appeared to have reduced its emissions by 41% between 1990 and 2016 by this measure. But once offshore emissions are included, this reduction falls to around 10-15%.

A national strategy of sending front-line work abroad, whether coding or manufacturing, will profoundly alter the balance of power in our society. There is little chance of persuading a British organisation to adopt a practice-first approach when every worker with practical experience lives in Chennai, Shenzhen, or Bucharest. And good luck getting voters to support policies that redress this imbalance once the majority work in jobs with six degrees of separation from the front line.

We have already had a preview of this future. Recent government policies follow a similar pattern. The detail of furlough, IR35 reforms, and lockdown policies all worked in the interests of the “laptop classes” and against those of front-line workers. They normalise white-collar management or administrative work while treating the people paid for using their skills on the front line as aberrant.

The primary lesson of the modern era is that successful societies put practice first, but the principal lesson UK governments seem to have learned is that theory comes first, and practice goes overseas.

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