Dear Prime Minister

The two most striking non-Brexit-related announcements of your premiership so far have been the promise of an industrial strategy and action on runaway executive pay. Let pass here the eye-popping ability of governments in general, not just yours, to switch something as important as industrial strategy on and off overnight – no one would quarrel with your criticisms of ‘anything goes’ capitalism or your desire for a ‘Britain that works not for the privileged few but for all of us’. You are of course right that something is wrong. But, pardon me for saying that I don’t think you gauge the extent of the wrongness, or the nature of the reforms needed to get it right.

For a start, excessive pay and an unbalanced economy aren’t separate problems: they are the symptom of a deeply dysfunctional ‘business as usual’. You don’t actually need an industrial strategy in the way it’s usually understood, and action geared solely to cutting outrageous pay will miss the point by a motorway-wide margin. What you do need is for companies, and your government, to do the jobs they are supposed to do. It’s not just corporate derelictions that are responsible for the misfiring economy – just as implicated is the compliant, toadyingly ‘business-friendly’ behaviour of of your government departments.

You will be well aware of the exemplary cases of Sports Direct and BHS, which just happen to be a perfect embodiment of much of what’s wrong with both business and its rotten relationship to government today. The collapse of BHS and the plight of the workforce at Sports Direct have absolutely nothing to do with globalisation, job-eating robots, immigration or any other of the impersonal forces usually trundled out to carry the can for bad news on the wages and working conditions front. They are entirely the result of discretionary decisions made by Sir Philip Green and Mike Ashley, with the connivance of governments like yours that have done nothing to block the path that leads to their exploitative business strategies.

Green is now blasted from all sides, including yours, as the unacceptable face of capitalism. But don’t forget that while he was knighted by a Labour government (for God’s sake) under Tony Blair, it was your predecessor, David Cameron, who, no doubt impressed by his tax-efficient methods and financial-engineering skills, invited him to advise his administration on cutting government spending. As for another adviser, it’s unclear what the government’s ‘business tsar’ is actually for, but his or her identity is a dead giveaway of what ministers think business is, or should be about. In this context, Cameron’s recent reconfirmation of Sir Alan Sugar as ‘enterprise tsar’, a crusty old dinosaur whose chief claims to fame are a floppy-disk-era also-ran personal computer and being the UK face of Donald Trump in the appalling TV show ‘The Apprentice’, needs no further comment. Similarly, your choice of new business spokesman will tell us a lot about both your attitudes to business and your intentions.

When you come to draw up your industerial strategy, you may want to cast your eye, among other things, over an important recent post by Stanford’s Professor Jeff Pfeffer. He notes that the main reasons for disappearing full-time jobs, stagnating pay and economic security – in other words the things that indirectly led to your sudden elevation to this office – are actions by governments and companies. Companies have a choice between ‘high road’ (high trust, high commitment, low turnover) and ‘low-road’ (low trust, low commitment, high turnover) employment policies. High-road policies are hard work and more expensive to set up, but pay off in the long term. The low road, being transactional, is easier and cheaper (in the short term); and it’s the one that the US and UK economies have been travelling for decades – not least because they have been tacitly encouraged by governments that have weakened organised labour and employment rights, and, especially in the UK, subsidised sub-living-wage pay (as at Sports Direct) with in-work benefits.

If you really intend to curb such practices, you will have to stop listening to the self-serving business advisers you have used in the past and radically alter the incentives that govern the employment behaviour of those who run all of our big companies, not just BHS and Sports Direct. It’s not an issue of giving more power to shareholders, as you seem to suggest – we’ve been trying that for the last 40 years and it doesn’t work: as Michigan’s Professor Gerald Davis notes, shareholder capitalism is now largely incompatible with full-time employment.

Peter Drucker always argued that public corporations were too important for the health of the societies that licensed them to be controlled by any one constituency. How right he was. Shorn of responsibility to anyone except shareholders, public companies no longer have either the energy or the will to provide the economy’s motive power. They have abandoned their historic function of investing in new markets (too risky), new capacity (too time and capital consuming), or good jobs (too expensive) – this despite a plethora of long-term opportunities in energy, transport, housing, and healthcare, all of which would yield a positive return and benefit future generations into the bargain. To add insult to injury, they do their best to avoid paying the taxes that fund the informational and physical infrastructure that they depend on to operate. None of this, note, is an aberration: it is sanctioned in the company law and governance codes that successive governments have appproved.

A functioning industrial policy, a balanced high-road economy and a more equal society have nothing to do with ‘picking winners’ or a ‘pay policy’. Instead, the ingredients are, in Mariana Mazzucato’s phrase, an ‘entrepreneurial state’ that invests in the fundamental research whose outcomes, though huge, can’t be directly predicted; a private sector strong on ‘animal spirits’ that actively accepts its role as a creator of new resources for society as a whole, including full-time jobs; and confident government departments that play their own creative part in nurturing the infrastructure and holding the balance between the sectors in a plural economy.

If your government can bring those elements together, it will be an achievement whose importance dwarfs even that of engineering a soft Brexit (in fact it would make the latter much less urgent). It’s a big ‘if’; but there is not much wiggle room, and if the bold and painstaking work of institutional renewal is not done now, then the best we (you) can realistically hope for is a continuing slow descent along a low road which leads nowhere. The worst – well, I leave that to your imagination.

Yours

It’s nearly as impossible to write about Brexit as it is not to write about it. It does indeed change everything – but unfortunately that includes the things you were going to say when you sat down to write but which the latest improbable twist, betrayal, reversal or reaction has magicked into its opposite before your eyes. We may even have to wipe the grim grin off our faces as the one apparently unalloyed gleeful moment in the whole dismal farrago – the political assassination of Boris Johnson – melts into a Pyrrhic victory (but more of that, briefly, in a minute).

There are however a couple of things that can be said without fear of contradiction. There is more pious twaddle spouted about leadership (‘lay preaching’, as Jeff Pfeffer calls it) than any other subject, and I have no wish to add to to the compost heap. But whatever leadership is, as Andrew Hill noted in the FT as he helpfully enumerated five kinds of failure on show in the episode, this isn’t it. Indeed, accidentally severing our ties with the the rest of our continent and then leaving the country effectively leaderless, planless, and witless must be the most inept leadership miscalculation since King John ordered his baggage train bearing the Crown Jewels to take a short cut across the Wash in 1216.

To be bounced into holding the referendum on someone else’s terms in the first place; to set no prior conditions (allowing a decision of this importance to be made by 36 per cent of the electorate?); to spend years blaming Brussels for all our home-grown ills and then insult voters by expecting them to swallow Project Fear; to have no contingency in case the electorate called their bluff – all of those were needless eggs that duly hatched into the chickens now flapping cackling home to roost. And this is just on the Remain side. And people call the EU dysfunctional!

It somehow seemed unsurprising that English footballers subsequently proved unable to pass the ball to each other, let alone push forward to an agreed gameplan, under pressure in the match against Iceland. The analogies between sport and politics don’t go very deep, but then they don’t need to. The squabbling among members of the management team and the inability to get individuals to work as a team were strikingly similar.

Anent the football failure, a kind reader sent me back to a piece I wrote in 2007 pointing out that the real British disease was a total inablility to think in terms of systems. I’m all for pragmatism, but if you want synergies (in other words, overperformance, as in Iceland and Wales in France), you have to have a minimum of ability to join things up. The unfortunate product of British management is all too often the opposite: reverse synergies that make two and two equal not five but three.

Perhaps we should ask for a couple of seminars from Eddie Jones, the blunt Australian head coach of the England rugby team, who has overseen the conversion of almost exactly the same group of players who had been sad World Cup losers in 2015 into clean-sweep victors of a series down under for the first time since 1971. (This occasioned one of two great Brexit newspaper front pages: ‘WELL DONE ENGLAND. NOW ANOTHER CONTINENT HATES YOU’, crowed an Australian tabloid, while French daily Libération carried an image of Johnson dangling from a zipwire above the headline ‘GOOD LUCK’.)

The second thing that is beginning to sink in is the realisation that the political crisis is the septic symptom of a deeper economic one. The popular two fingers, or punch in the face, to the political class signals that something is deeply broken, and that something, as I have been arguing for ages, is our current debased and dysfunctional version of capitalism. People have a right to be angry, even if the EU, the spectacular casualty of the referendum, in the event was collateral damage in a mostly shameful leave campaign whose rallying cry of ‘sovereignty’ and ‘control’ was really code for ‘kick out the immigrants’. Capitalism as currently practised in the US and UK is a zero-sum game in which the dice are heavily loaded against those who don’t already have wealth. As John Gray noted recently, ‘The stabilisation that seemed to have been achieved following the financial crisis was a sham. The lopsided type of capitalism that exists today is inherently unstable and cannot be democratically legitimated. The error of progressive thinkers in all the main parties was to imagine that the discontent of large sections of the population could be appeased by offering them what was at bottom a continuation of the status quo’.

Quite. What the status quo has delivered – increasingly large and frequent crises, declining real wages, growing insecurity, fewer good jobs, and inequality – is not anything anyone signed up to. They didn’t sign up to it because there wasn’t a deal. Or rather, the deal was no deal – trust us, everything will be fine as long as we intervene as little as possible and leave it to the markets. That’s why blaming impersonal forces such as globalisation or technological change, still less immigration, for our current ills is disingenuous. We’ve had these things for centuries, and they work when there’s a deal, a negotiated balance in which state, public and private sectors all play an active and complementary role. At the moment governments have opted out in favour of a rent-seeking private sector which accepts no responsibility to the wider community, while a scorned and demoralised public sector is is reduced to eating itself by austerity. With nobody driving the bus or doing their job, it’s not surprising large swathes of the population are marginalised.

The question now is, who is going to construct a deal to put Humpty Dumpty together again? Normally this would be natural Labour territory, but let’s not go there. So, the dour safe-pair-of-hands May? The dreadful City ‘banker’ and mother Leasdom? No, me neither. Which is where we circle back to Boris Johnson. The breathtaking opportunism of the blond bid for the Tory leadership and his fundamentally dishonest campaign made Johnson’s comeuppance deeply relishable. But as well as an opportunist, Johnson is also by instinct the most liberal of the Tory postulants and also, unlike them, a chancer who is quite up for a risk or two. Indeed it is just this racy combination that may have persuaded the fanatical Gove to unsheath his stiletto. The final irony, it now turns out, is that with Johnson may have gone the last best hope for something different from bankrupt, brain-dead business as usual.

Read my article in Professional Manager, June 2016, here

There’s a more than respectable progressive case for voting to leave the European Union in the forthcoming UK referendum. It’s set out here by the Guardian’s economics editor Larry Elliott, someone I like and respect. The lack of democratic accountability, the austerity that has driven Greece to its knees when it voted for the opposite, the failure of the euro, the inability to come together over Putin and migration, the environmental and other failings detailed by another Guardian writer, George Monbiot – all these are dagger blows at the heart of the limping half-century-old European project, and they can’t be wished away.

Yet I passionately believe that we should remain, and shall have no hesitation in voting so on 23 June.

My reasons are personal, historical and political.

First, having married into a French family, half my close relatives are French. I care about what happens to France and know at first hand that for all the cross-Channel barbs and incomprehension, the French on the whole, like other Europeans, care about us too. Read this letter of affection in the TLS signed by, among others, footballers, football managers and rugby players, authors, architects, restaurateurs, actors and film directors, and musicians from Greece to Sweden, Italy to Poland. Or these. Despite our best current efforts to make ourselves as dislikeable as possible, Europeans believe that traditional British tolerance and fortitude are an important counterweight to different continental qualities – and any honest inhabitant of these islands would have acknowledge that the trade is equally advantageous in the other direction.

There is another personal reason. My father’s physical and intellectual journey from committed pacifist to lieutenant in a reconnaissance regiment fighting its way through Belgium, the Netherlands and Germany in 1944 and 1945 is vividly preserved in the letters that he wrote home at the time. Reading them now, there is not the shadow of a doubt that he and his colleagues knew perfectly well that they weren’t only fighting for their and their own families’ futures; for them, the terrible bloodshed and mayhem that they witnessed (and suffered – my father was killed a week before the armistice) was only redeemable by a settlement that cemented all the nations affected, including the defeated, in a binding democratic embrace. (So well did these soldiers do their peacetime work that, as I only realised much later, German teenagers in the British occupied zone grew up as familiar with the Beatles, the Rolling Stones and other icons of British popular culture as I did; while the German postwar economic miracle owed much to the company governance regime of two-tier boards and co-determination instituted under strong influence from our own TUC.)

I’m dismayed that the remain camp has ignored these broader issues to focus on the economy and Project Fear. I don’t doubt that there would be short-term shocks to the economy from a Brexit, but that’s not why I’m voting to remain. I don’t trust any of the numbers. But more than that, to collapse the European idea to name-calling over numbers, as both sides have done, is both embarrassingly reductive and beside the point. Given the government’s well proven ability, not least over the last eight years, to make a pig’s ear of the economy without any outside assistance, using economic freedom from Brussels as a rallying cry for leave is almost comically brazen. There is a real economic argument to be had, about the nature and purpose of business, but like all the other important issues we face, it can only be addressed at supra-national level. Only at EU level is it conceivable that a counterweight could be developed to the dangerous arrogance of Silicon Valley and the excesses of US finance and shareholder-dominated capitalism.

As for immigration, the shrill, angry discourse about migrants reminds me of efforts 20 years ago to block the building of the Channel Tunnel for fear it would bring in an epidemic of rabies. Scapegoating is as old as history. But so, as a dispassionate New Scientist analysis reminded us recently, are waves of human migration, the inseparable companion of wars, famine, natural disaster and, although this is usually left out, gross global inequality. Of course, it would be mad to deny that an influx of incomers seeking a new life creates uncomfortable issues. But they can be managed, as they have been before, by tackling them head on with thought, effort, sympathy and state help, usually temporary, with cost. For those responsible for austerity to whip up anti-migrant feeling by blaming the latter for stretched public services and lack of affordable housing is breathtaking in its dishonesty, while to believe that any country can pull up the drawbridge and shut out these global tides is wishful thinking of the most vapid kind.

Also disappointing is the narrow vision of other European leaders who don’t seem to see the UK referendum for what it is, an existential challenge that can only be met by imaginative and sweeping restatement of what Europe is for. ‘What has happened to you, the Europe of humanism, the champion of human rights, democracy and freedom? What has happened to you, Europe, the home of poets, philosophers, artists, musicians, and men and women of letters? What has happened to you, Europe, the mother of peoples and nations, the mother of great men and women who upheld, and even sacrificed their lives for, the dignity of their brothers and sisters?’ I’m not aware of having quoted the Pope before, but the reproach implicit in the questions he raised in his Charlemagne award speech can’t be easily swept aside.

‘Europe,’ as Churchill once put it, ‘is where the weather comes from’. The migration surge welling up from the Mediterranean, the Eurozone crisis and the outbreaks of right-wing populism all underline that that’s as true today as it ever was; and now as then it’s no more possible for Britain to negotiate an opt-out than from European isobars or the Gulf Stream. We’re in, and we have to deal with it. Do we face up to the challenge, or run away in a way that we never have before? What’s at risk in this misconceived referendum, it’s now apparent, is not our economic future but our soul, our identity and an idea of Europe that our parents and grandparents helped to shape 70 years ago.

‘Why the annual company budget doesn’t add up’: read my piece in FT Business Education, 23 May 2016, here

Comparisons with May 1968 have been hard to resist in Paris this month as noisy students take to the streets to protest against capitalism and an unpopular government. Also unavoidable is the irony that while 48 years ago the protesters were in revolt against stifling corporatism and chanting ‘power to the imagination’, this generation would like nothing better than to inherit the safe jobs and secure pension rights at the same companies that their long-haired grandparents so despised.

That of course is one measure of the extent to which the world of work has changed in the interim. The focus of today’s protests is government labour legislation that, modestly by Anglo-Saxon standards, aims to make it easier for employers to dismiss people in times of economic stress and to inject more flexibility into the notorious 35-hour week. The protesters see both as further blows for insecurity against hard-won employment rights.

There is an important point here. A running debate at each annual meeting of the Global Peter Drucker Forum pitches faith in gung-ho Californian techno-optimism as potential purveyor of a new surge of prosperity and employment against European-style social measures to protect or at least prolong existing jobs.

Yet much as I sympathise with the European view in general, and with French youth’s identification of itself as ‘la génération précaire’ in particular, the debate is already out of date. President François Hollande’s political ambition to boost employment totals is equally understandable, and equally doomed. It’s a fight neither side can win, and those seriously concerned about jobs should save their energy for bigger and even tougher ones to come.

As ever, it’s important to be careful what you wish for. To begin with, the cost of French employment protection is appallingly high. This is only partly a matter of employment itself. While French youth joblessness at 24 per cent is obviously unacceptable, it’s not clear that alternative employment policies are much better. The ‘successful’ UK, for example, suffers from a toxic tradeoff of its own: while its nominal unemployment rate is half the French 10 per cent, UK pay rates are so low, and contracts so precarious, that employment à l’anglaise, and draconian welfare measures that drive it, are not so much a route out of poverty as a high road into it. So much for ‘flexibility’.

A less obvious part of the price for making it so hard to move people on is poisonous French workplace relations. Most new jobs in France aren’t permanent but short-term renewable contracts. But even the lot of those in permanent employment is less enviable than you might think. French employees are among the most stressed in the world, according to a recent report. One powerful reason is a feeling of being trapped, unable to leave permanent jobs people don’t like or have grown out of for fear of never getting another. Another is that French workplace relations increasingly resemble a zero-sum game which both sides treat as warfare. One tactic used by some employers, even large state-owned ones, is to make life so unpleasant for unwanted individuals that they eventually leave of their own accord. HR departments have become departments of dirty tricks. Favoured methods of dismissal by 1000 cuts include bundling off managers to work in a different department or unit, call centres being a destination of choice, transferring workers to a distant part of the country or simply cutting off communications. There’s even a name for this limbo – ‘le placard’, the closet. A spate of workplace suicides made headlines made headlines a year or two ago.

There is of course no defence for such behaviour. But even if it could be stopped at source (it is already illegal); and even if company law were reformed (as it should be) to weaken shareholder value as the corporation’s motive force in favour of greater duty of care for other stakeholders, there are good reasons to believe that the era of large companies as mass employers is over. In his fascinating book The Vanishing Corporation (of which more on another occasion), Jerry Davis notes that the industrial-age connection between corporate growth and employment has broken down. Thanks to technology, a company can now be simultaneously ‘radically tiny’ in employment and globally dominant in its sector. Unlike industrial plants, websites and platforms such as Uber and Arbnb don’t need human bodies to scale. One bold London start-up believes it would need no more than 30 employees to turn itself into a global brand used by billions.

And even that isn’t all. A final disrupter of the old employment patterns is the steady upward march of life expectancy. As Lynda Gratton and Andrew Scott eloquently outline in their self-explanatorily entitled The 100-Year Life: Living and Working in an Age of Longevity, even if all the other factors undermining today’s employment practice could be nullified, life itself will have the last word. When half of those born today will live a century or more, each part of today’s linear three-stage life – education, work, retirement – will have to be rethought. Each becomes more personal, more fragmented, more a matter of personal choice. Individuals will have to take more responsibility for their working life, and organisations, for which anyway talent and career planning will become fiendishly complicated, correspondingly less. The inevitable temptation will be for more companies to opt for the ‘plug-and-play’ model of HR pioneered in the so-called sharing or gig economy.

As Davis points out, the shifts now afoot could lead to a ‘new dark age’ for labour – or the opposite, the liberation from corporate paternalism that the May 1968 protesters demanded. In the same way, a 100-year life could be a burden or a gift. At this stage the options are open – each requires choices. But to reach the sunlit uplands we need to start thinking through the implications now. This is what Paris students should be debating at their nightly ‘Nuit debout’ (‘Up all night’) meetings at the Place de la République, not a Pyrrhic last-ditch defence of a system whose day has gone. In another 50 years, their own grandchildren would have cause to say ‘merci’.

My write-up of the most recent Foundation forum is here.

I’m conscious of a long delay since my last piece, the result of damage to my hand and doctor’s orders to rest it. My apologies for this – normal service to be resumed as soon as I can.

So much of what these days is done in the name of management is idiotic (almost anything foisted on the public sector), unpleasant (‘this is strictly a business decision’) or just plain gross (Bob Dudley and his bonus – partly for meeting safety standards, for God’s sake) that sometimes it’s really hard work being a business optimist. So when a good news story turns up, it’s a cautious pleasure. Two, and it’s cause for celebration.

So here are two companies – ‘positive deviants’, we might call them – that have succeeded by doing the exact opposite of most of their mainstream rivals: really putting their customers first, and trusting their staff to do the right thing. Each flourishes in a sector famous for high cost and deep unpopularity, thus proving that despite the excuses of apologists there is nothing inevitable about these two things: it’s just that those suffering from them are probably (as above) dumb, self-serving or maybe just horrible.

The organisation you may not have heard of is Buurtzorg (which, explaining itself, is Dutch for ‘neighbourhood care’). Buurtzorg is the brainchild of Jos de Blok, a community nurse and subsequently health administrator who in 2006 was so disillusioned with what healthcare ‘reform’ in the Netherlands was doing to the quality, not to mention cost, of patient care (sounds familiar?), that he and a three others decided to set up a social enterprise to do the job properly. Ten years on, so successful is the vision that Buurtzorg now serves half the country’s home-care patients. Nurses have flocked to an organisation that reconnects them with their vocation. The original four have become 10,000, working in 850 teams that are entirely self-managing. From 2008, Buurtzorg was setting up 10 or more teams a month, a rate made possible, according to Blok, by the fact that the teams ran themselves without need for outside help, and were bureaucracy free.

Nothing has changed since, apart from size. Buurtzorg doesn’t do budgets and has no HR function. There are just 40 people, three or four dealing with finance, at head office, whose function is not to direct but act as service centre to the teams. Blok, CEO, is the only person with a management title. There is a corps of 20 peripatetic coaches available to dispense advice, primarily about teamwork, but they have no management authority or responsibility for results. In fact there is almost no ‘management’ separate from the front line: since teams run themselves, there is nothing much for central management to do.

On whatever level, the results of this lo-management model are startling. Buurtzorg has the highest patient satisfaction ratings and the lowest costs in the Netherlands, and has been the country’s ‘best employer’ for five years on the trot. Those three things are linked. Buurtzorg employs highly trained nurses and requires them to do what they are good at, which is helping people to live the lives that they want. In consequence (duh), its patients get better faster, consuming 40 per cent fewer care hours and much less medication, than others. In other words, Buurtzorg – and the country as a whole – are reaping the enormous ignored benefits of cutting off demand before it happens. The paradoxical and unanticipated outcome is that Buurtzorg has become a remarkably profitable non-profit. With better trained and paid nurses the unit cost of care is high – but because of the prophylactic effect on demand, the overall cost is far lower. Ernst & Young estimates that extending the Buurtzorg model to the the country as a whole could save €2bn a year, not counting the incalculable benefits to patients and nurses in terms of quality of life and work (motivation is all intrinsic; the company doesn’t offer incentives). Not surprisingly, political parties are eager for this to happen. Hello, anyone paying attention in the UK?

The second cause for cheer is harder to ignore, not least because it is a bank that has opened 180 branches in the UK over the last 10 years – more than one a month in a period that no one in the financial sector would call exuberant. Like Buurtzorg, the Swedish banking group Svenska Handelsbanken expands not by head-office say so but from the bottom up, when there is customer demand on the ground and bankers in existing branches who are eager personally to meet it. Handelsbanken aims to be more profitable relatively than the average of its peers, through serving its customers better at lower overall cost. Largely self-sufficient branches measure themselves on their cost/income ratio (a metric that High Street banks appear to have forgotten about, to their enduring competitive disadvantage), and customer satisfaction. When the group reaches its financial aim, a profit share comes into play, with the proceeds spread, equally, among all staff. The profit share has been paid every year since 1972. Like Buurtzorg, Handelsbanken is a budget-free and largely forecast-free zone. Apart from financial robustness, Handelsbanken also shares with Buurtzorg exceptionally high customer-satisfaction ratings (top in Sweden since 1989, top in the UK for the last seven years), decentralisation (‘the branch is the bank’), and an emphasis on individual decision-making and initiative in building long-term relationships with customers.

It’s a simple and potent combination. Note that the fact that both companies have radically simplified – or rather abolished – financial and planning controls (a bank that doesn’t do budgets!) is not a coincidence. Both are star exhibits in the database of the pioneering Beyond Budgeting Institute, which supports a network of advanced organisations developing more responsive and economical management models. Beyond Budgeting’s key insight is that ‘the budget’ is not only the major generator of corporate bureaucracy, it is also the scaffolding that holds the edifice (or straitjacket) of command-and-control management in place. So while getting rid of the budget removes a swathe of management overhead at a stroke, even more importantly it allows a completely different, low-maintenance management model to emerge. Centred on the business’s real needs rather than those of the accounting cycle.or the bloodsucking capital markets, this promises to be more resistant to disruption, uberisation or just decrepit old age than the rotten and conflicted present version, and thus gives the traditional corporation, composed of people and relationships rather than algorithms and one-night stands, a sporting chance of lasting until the second half of the 21st century. For that, let’s give them a loud cheer.

In the Looking Glass world of management and economics, words come come adrift from their normal meanings. Sometimes they end up as their opposite, as the impoverished new meaning corrupts or subsumes the old one: consultation, flexibility, accountability, transparency, enhancement come to mind. Or ‘choice’. Competition authorities and economists rule that we have choice in financial services and groceries because there are four or five supermarket or banking chains. Never mind that all our High Streets look identical, supply chains are corrupted (horsemeat), small suppliers and retailers put out of business and every store or agency sells exactly the same things – there’s competition, so we have choice. Yes, I know the only colour is black – but, look, you can buy it from half a dozen suppliers, what more do you want?

The same specialised logic is applied to public services, where it is even less appropriate, and the consequences correspondingly more damaging. Public services are a necessity. Their job is to solve problems, not provide lifestyle choice. If there’s a fire, you want the fire service to put it out, if you’re ill you want to be cured, if there’s a hole in the road you want it filled. If they’re not, you’re pissed off. As Vanguard’s Richard Davis puts it, ‘In Frederick Herzberg’s terms, they are hygiene factors – things that are necessary rather than desirable… What matters to me is that the service works when I need it, no more, no less. I want a good school nearby, a good hospital nearby, an effective police force ready to help me in my neighbourhood’.

When David Boyle wrote a ‘Barriers to Choice Review’ for the government in 2013, he found that there wasn’t even a glancing relationship between what people thought choice meant and what it meant in practice. Providers and recuoebts just talk past each other, leading to indifference and cynicism at best, despair at worst. ‘The difficulty is that the kind of flexibility in the services that people want, and are increasingly demanding, is also a prerequisite for many people to exercise any choice at all,’ noted Boyle.

What people mean by choice is having a service that starts from where they are rather than where ‘theorists think they should be’. Real choice is to have a carer’s visit when you want it, velcro to fasten your clothes rather than buttons or help to meet your mates for lunch every week, not a choice of medicalised universalist packages which keep you in dependency and none of which fit what you really need. In other words, the choice that people want is exactly what the current systems can’t give them: a public service that works for them, not some commissioner or government minister.

In manufacturing Fordism – scale, standardisation, deskilled labour at the service mass production and consumption – died decades ago, killed off by Toyota when it discovered how to overcome the trade-offs between volume and variety, quality and cost. ‘There is no longer any reason to rule out localisation of economic activity on the grounds of scale economies,’ wrote accountancy professor Tom Johnson. ‘Scale economy, beyond very small volumes, is a concept that should be discarded.’

But, zombie-like, Fordism and its attendant scale still rule in public services, where their deathly grips squeezes the life out of service quality, and with it engagement, community and local agency, all in the name of competition and choice. Scale is a double dead end in services, where by defeating quality it remorselessly raises, not lowers, overall costs. The greater the attempt to lower unit costs, the worse the outcome. This is why what we end up with is the shame of 15-minute care packages delivered by people with time only to fill in the paperwork before rushing on to the next job – an insult to both giver and recipient – and the desperate budget cost-cutting that makes public services another example of reversification: an exercise in rationing that leaves no stone unturned in raising thresholds, minimising service and making the rules so forbidding and baffling that they are almost impossible to comply with.

With this reductio ad absurdum we have reached the very final version of the old Fordist service operating system which, with a non-unionised workforce paid the minimum wage and on zero-hours contracts, simply has nowhere left to go. There are no more negatives or minima to retreat into. Behind it is a profoundly pessimistic, deficit-based view of public services that stigmatises those who receive them as too old, feeble in body or mind or devious to bother with: the choice of which unsatisfactory service to receive is all they deserve.

What we need, of course, is a leap to a new positive post-Fordist operating system for public services based on the idea of choice that people actually do recognise: the choice of help to put a chaotic or temporarily disturbed life together again and take the individual or family out ot the ambit of public services altogether, where the cost to the public purse is zero. This is a strength-based approach focused on self-help and control of one’s own life that aims to reduce demand by building agency, resilience and engagement.

Building this kind of self-rsustaining momentum is what David Cameron and George Osborne should be concentrating on rather than the use of crude extrinsic sticks and carrots – not so much nudge as a blow to the head with a blunt instrument. Not least, it would deliver the language of choice from the grip of Humpty Dumpty: ‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean–neither more nor less.’ ‘The question is,” said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master–that’s all.’

Read my write-up of the latest Foundation Forum, Going local: can corpororate giants ever make a positive local impact, here