Simon Duffy

Thoughts, Bemusements & Arguments

Tag: innovation

Confusopoly: Lessons for Social Change

I came across, thanks to Samantha Connor, a beautiful new word the other day – confusopoly.

After some searching around the internet I think I found the source of the word to be Scott Adams, the comic genius behind Dilbert. He defines confusopoly as “a group of companies with similar products who intentionally confuse customers instead of competing on price.”

Well we can all recognise the truth of that. Who has not been confused by the complex and mobile pricing structures used to disguise a crude choice between a handful suppliers of utilities, phone lines or TV services? We all know we are being bamboozled; we often accept it as a feature of modern life.

I may not have given this enough thought, but it seems to me that confusopolies must thrive when:

  • We have little choice but to accept one of the available options – e.g. we need to heat the house
  • There is little, other than price, to distinguish the actual choice in front of us – e.g. iOS or Android
  • There are few real competitors – e.g. BT, SKY or Virgin Media

Oligopolists would not risk a strategy of confusopoly if they though most people would just walk away, choose on the basis of some different criteria to price, or choose someone offering a simpler and clearer alternative price plan.

I’ve always found the behaviour of firms in competitive situations interesting to watch. Do you remember when cash machines were new? (I’m showing my age now). Originally you could only use your cash card at your own bank. Then banks started to club together to create greater advantage for their customers. Eventually the system became a kind of duopoly, where about half of all banks would take your card. At this point the Government intervened (from memory) and insisted banks agreed to accept all cards – without charging us for the privilege.

This was a case study in how diversity becomes duopoly – but how duopolies must be forced over the line into more useful forms of monopoly. There was no commercial advantage to the banks in organising a monopoly – it was just better for us, the customers.

The reality seems to me that free commercial enterprise is basically helpful, innovative and creative – but always in danger of becoming damaging, exploitative or absurd. I find it strange when some people think commerce is bad. I find it equally strange that some people think democracy shouldn’t try to discipline commerce into being better than it naturally would be.

I love a beautiful garden. I don’t make the plants grow. But it wouldn’t be much of a garden without weeding, pruning and some overall design.

The tension between commerce and democratic control is inevitable and we should not be persuaded by liberals or by Stalinists from wanting both free commercial activity and strong democratic discipline.

However, when Sam Jenkinson used the term, she was referring to Australia’s disability support system and I found the term also being cited by Australia’s Productivity Commission in its design of the National Disability Insurance Scheme to replace the previous complex system. So perhaps it is not just commerce that creates confusopoly.

Reflecting on my own field of endeavour I can see that systems can become unnecessarily complex for a number of reasons:

  1. We may create an innovation from within a largely static system. For example, Direct Payments were a good innovation, but they created greater complexity because they left the old social care system untouched. One system became two systems.
  2. Alternatively we may create an innovation which can only be fully integrated into the system over time. For example, Personal Budgets were progressively rolled out, but many systems protected older forms of practice either by excluding Personal Budgets from their domain or by corrupting the definition of Personal Budgets to include inflexible options.
  3. Or we can force an innovation to adapt to an unreasonable obstacle. For example, integrated Individual Budgets died when parts of the bureaucracy, like the civil servants running the ‘Supporting People’ programme successfully defended their own funding stream from integration into one coherent model.
In fact we can see that here bureaucracy mirrors commerce. Bureaucrats do not always prefer what is rational, clear or to the advantage of the citizen. Their first concern (as with business) is to safeguard their own roles, their own funding streams and their own patterns of thought and behaviour.
Bureaucracy is not bad, bureaucracy is necessary; but it is perhaps no more likely to choose to do the right thing than is commerce. This is what I take from my own experience. Just as you cannot give a good idea to commerce and expect all to be well, so with bureaucracy. Discipline and integrity are required and some of this will need to come through democratic processes that can exert pressure on both bureaucracy and commerce.
The lesson for advocates of social justice and true welfare reform is that to have a good idea is not enough. Giving good ideas away is not enough. We must also attend to the process of change itself and in particular to the public and political processes that create some of the necessary discipline for coherent change.

The Absurdity of Injustice

Everywhere the man who alters things begins by liking things. And the real explanation of this success of the optimistic reformer, of this failure of the pessimistic reformer, is, after all, an explanation of sufficient simplicity. It is because the optimist can look at wrong not only with indignation, but with a startled indignation. When the pessimist looks at any infamy, it is to him, after all, only a repetition of the infamy of existence. The Court of Chancery is indefensible – like mankind. The Inquisition is abominable – like the universe. But the optimist sees injustice as something discordant and unexpected, and it stings him into action. The pessimist can be enraged at wrong; but only the optimist can be surprised at it.

G K Chesterton from All Things Considered

I love this thought from the ever insightful Chesterton and it rings a real bell.

I often meet people who agree that the current system is unfair: it’s unfair that disabled people don’t have effective rights to self-directed support; it’s unfair that only the rich can influence their child’s education; it’s unfair that the poorest pay the highest taxes; it’s unfair that too many people are placed in institutional and damaging settings if they are too old, unwell, angry or confused.

We spend nearly half of our GDP on welfare – handing this money over to Whitehall – and in return we get a system which satisfies almost nobody and which is designed in flagrant contradiction to the Declaration of Human Rights. We expect it to deliver safety and support for those with the greatest need, but instead we see it harming those in greatest need.

Yet very few people seem to feel that anything can be done about this injustice – it feels inevitable – part of the inherent wrongness of reality – as Chesterton puts it “the infamy of existence”.

But what strikes me at least is how absurd the current system is. Its not just wrong, it’s crazy:

  • We tax most those who can afford it least, increasing inequality and inefficiency
  • We fund expensive professional support, but won’t ensure people can meet their basic needs 
  • We subsidise incarceration and institutionalisation, but undermine communities and families
  • We target cuts on those who can least bear them

We need to wake up to the absurdity of the current welfare system.

This does not mean we don’t need a welfare system (even a bad system is better than no system). But we should start to confidently define the features of decent and fair system. And, as Chesterton also observes, this will be one that values all those things that are good: citizenship, family, community, expertise and justice. The challenge is to build a system that respects and supports all those good things – rather than undermining them.

Three (or Four) Kinds of People

Three officials were assigned to guard the king’s treasures. They proved to be corrupt, and dividing the valuables, ran away. One thought better of it, and returned of his own accord. The second was persuaded by a friend to return. The third witnessed the execution of an embezzler and returned out of fear. The first was restored to the king’s confidence; the second received a less responsible post, the third was appointed executioner of the embezzlers: 

“There are three kinds of people in the world who act like these three officials with respect to the fulfillment of God’s injunctions” explained the Pulnoer.

An Hasidic Tale

This story reveals a theme which runs through moral philosophy. Are we motivated to act rightly because of duty itself or because of external influence or fear?

In my own work I find the similar fourfold distinction useful – not for analysing moral behaviour – but in terms of attitude to change:

  1. Motivation by belief – to have a vision of the possible and faith in the unseen – these are the natural innovators
  2. Motivation by status – to seek evidence  and stay close to authority – these are the followers of fashion, the makers of movements
  3. Motivation by price – to look for the consequent value of the innovation: it makes life easier, cheaper, more fun – these are the utilitarians who wait for trends to be set and for prices to drop
  4. Motivation by fear – to know the negative value of the innovation: to fear the loss, the change and the unknown – these are the sceptics

Notice that each of us takes a different attitude to change in different aspects of our life. Nobody is an innovator in every walk of life. Notice also that each attitude has a positive purpose and that the tensions between these perspectives are legitimate.

So if you value an innovation remember that the other person, who does not seem to understand the value of the innovation, is not being purposefully stupid or wicked. Instead they are either:

  • Worrying that there is not enough evidence – What would it look like if they backed something that proved false?
  • Worrying that there is not enough value yet – Is it the right time to invest in this? What will my return be?
  • Worrying that they will lose something else they value –  Doesn’t this threaten me?

For social innovators it is important to respect these fears – knowing that you cannot resolve them at once. You also need to develop strategies that:

  • Increase data and improve understanding of the value of the innovation
  • Reduce the price, increase simplicity and ease of application of the innovation
  • Design the innovation so that it is sustainable and respectful of other values and approaches
Perhaps most importantly, if you have a vision of how things could be better, you will need to find ways of sharing your vision. Most powerfully this is achieved by making your vision real – even if its just in some small way.

Four Kinds of Designer

There are four kinds of designer or innovator, each with their own style. No style is right; each has its merits and its limitations:

Radical design – this is direct and active – it tries to identify a core functional structure – for example, making a garden from scratch. The radical designer is still constrained, but tends to treat all existing constraints as ultimately negotiable (although is clearly an impossible extreme – many constraints will continue to frame the design, even if they are in the unconscious of the designer).

Compensatory design – this is indirect and passive – it accepts the limitations of all the prevailing structures and identifies a different functionality – for example, putting a building into an existing garden. The compensatory designer is respectful of all constraints; how this is also an impossibly conservative extreme – anything new must in some way change what was already in place.

Adaptive design is direct and passive – it accepts the constraints of the prevailing structures, but tries to find new ways of building in functionality – for example, managing a garden over time. The adaptive designer is mindful of the finite nature of resources, and seeks to massage the given into something more useful.

Constructive design is indirect and active – it treats the foundations of the structure as fixed, but tries to add new or positive features – adding plants, sculpture to an existing garden. The constructive designer is highly tolerant of additions, of bells and whistles, of new features and new ideas.

For those of us involved in trying to reform the welfare system we must be mindful of these different styles of design. Often we may find that we agree about the need for redesign but that we do not share a notion of what kind of design is best. Simplifying we might say:

  • Theorists tend to be radical designers – “What we really need is…” or “The system is wrong!”
  • Bureaucrats are compensatory designers – “We can’t possibly change anything that already exists!”
  • Managers are adaptive designers – “How can we reshape what we already have?”
  • Advocates are often constructive designers – “We need something different and new” or “That change is wrong!

Each designer has their own burden to carry and we are wise to recognise that each has their proper place. Those of us who think that the welfare system is badly designed at a very deep level will need to show some patience with those who have a different temperament and we will need to explore to what extent merely adding, adapting or developing new features can still help move us towards a more just settlement. We may even need to accept that our own radical ideas will need to be reinterpreted as additions, adaptions or developments by others. For there will be some truth in such an interpretation.

The Kutuzov Strategy

In War and Peace Tolstoy describes the subtle strategy of General Kutuzov who saves Russia from Napoleon’s attack. The central image of Kutuzov is of an old man surrounded by yapping and competing generals. While they come up with one scheme after another Kutuzov concentrates on saving the lives of the common man, retreating before Napoleon and cutting off Napoleon’s resources.
Napoleon is defeated by winter, his troops reduced morale and the sustained commitment of the Russian forces. What is essential about Kutuzov’s strategy is that he puts all his energy into supporting natural forces – he does not put energy into defending or attacking tactical plans, nor into continual fights with Napoleon. He stands back, sees the big picture and uses the dynamics of the system at work.

For social innovators it is essential to exploit Kutuzov’s strategy. The social innovator has nothing going for them – they have no money, no power and rarely any status. So you must tap into the grain of things – the forces that lie latent with the current social situation. It is our faith in positive possibility, combined with these latent forces, that bring about positive change.

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