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The Adaptive State
Strategies for personalising
the public realm
Edited by
Tom Bentley
James Wilsdon
PostScript Picture
(Demos logo.lge.eps)
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Contents
Acknowledgements 7
Transforming public services 8
Foreword 11
1. Introduction: the adaptive state
Tom Bentley and James Wilsdon 13
2. Open innovation in public services
Charles Leadbeater 37
3. Thinking out of the machine 50
Jake Chapman
4. Leadership,reform and learning in public services 59
Bob Fryer
5. Adaptive work 68
Ronald A. Heifetz
6. Creating an education epidemic in schools 79
David Hargreaves
7. Developing policy as a shared narrative 90
Kate Oakley
8. Local government: the adaptive tier of governance 99
Barry Quirk
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The adaptive state
9. Towards the learning society? 112
Riel Miller
10. Public value:the missing ingredient in reform? 124
Jake Chapman
11. Technology enabling transformation 132
Robert Watt
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9. Towards the learning
society?
Riel Miller1
112 Demos
The next phase of ‘public sector reform’ is not about managerial
innovations. It is about the creation of new communities, new net-
works and new markets. It is about redefining what the public sector
does rather than how it does it. This does not mean that the manage-
ment of the services currently provided by public employees should
not be reformed. As with all management, public or private, it is
crucial to upgrade and improve organisational effectiveness continu-
ously. But the more profound question, one that concerns what
politics is about, is what kind of society people want and how to get
there.
Regardless of political stripe, the long-standing challenge facing
governments in OECD countries has been how to turn the potential
for much greater freedom into a reality.2Of course the context within
which people exercise their freedoms differs according to distinct
national histories, predilections and values. Some, for example, accept
greater income inequality and environmental pollution, others do
not. But in all cases the aspiration is to go beyond the condition of
freedom as liberation from oppression or want to freedom as the
capacity to define, express and fulfil one’s self. Not the imaginary ‘self’
as monad. This is a political fiction that is now as credible as the
twentieth-century fantasies of a perfect command economy or
perfect market. For humans the ‘self’ is inherently social, defined
through and with reference to the ‘others’ that surround us. Our
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degrees of freedom tend to coincide with the sophistication of our
interdependence.
This is why taking freedom, and the responsibilities that always go
with it, to the next stage is the fundamental and most difficult
political task. It has never been easy to improve our capacity,
individual and collective, to establish and sustain ever more freedom-
enhancing social orders. Breakthroughs have never been quick or
painless. Old habits and entrenched power structures die hard.
Whole societies do not jump from one way of being to another.
Real revolutions, as demonstrated by the failed experiments of the
twentieth century, are only the outcome of gradual, incrementally
radical reforms that build up the new around the old. As Washington
Irving observed long ago in his fable about Rip Van Winkle, the
radical nature of the American revolution’s historical break was made
evident because Rip went to sleep a subject of his Majesty, George III,
and woke up 20 years later ‘a free citizen of the United States of
America’.
Change may be a constant, but not all change is of the same order
or import. There are long periods of consolidation or incremental
and continuous improvement. During the latter half of the twentieth
century, refinement of accepted methods and conventions was the
primary attribute of change, sustained by the success of the mass-
consumption, mass-production mixed economy and the stark fears
induced by the Cold War’s balance of terror.
As we move into the twenty-first century, many of these bets are
off. In part this explains the high profile and sense of urgency sur-
rounding current efforts at reform. The possibility of radical change
to the context in which people live demands that the next stage of
public sector reform must address the opportunity that may currently
exist to reframe the basic conventions which structure daily life.3
What if politics is successful?4
What if politics is successful in moving OECD societies to the next
stage of freedom? The overriding characteristics of such a society are
diversity and creativity. Why? Because this time around the goal is
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the capacity to use freedom to express one’s self rather than ensuring
liberation from the constraints imposed by the struggle for
subsistence. This shift helps to explain why demand for the goods
provided by public services is never static, and why what people want
increasingly revolves around the ideas of flexibility and
personalisation. One way of helping to imagine such a shift is to use a
‘possibility space diagram’.5Figure 3 illustrates three important
dimensions of change in people’s freedom: the amount of time–space
flexibility they have, the diffusion and acquisition of knowledge and
the diffusion of economic and political power.6
Time–space flexibility
The first dimension of change is the degree of time–space flexibility
available to people in their everyday activities. Surviving off the land,
punching the clock at the factory gate or signing in at the office tower
leaves little room for flexibility in when and where one works and
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Figure 3 Time–space flexibility, diffusion of authority
and knowledge
Unlimited
Unlimited
Limited
Nomadic
tribe
Diffusion of
economic
and political
power
Diffusion and acquisition
of knowledge
Flexibility
of human
activity
Command planning
Agricultural society
Industrial society
Freedom
frontier
Unlimited
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lives. Industrial societies make up for this time–space rigidity with
relatively open labour markets, which introduce flexibility through
job turnover. We adjust our lives to fit the when and where of work.
One future possibility is much greater and more efficient
interdependence, making it possible for people to choose when and
where they work and live. Around the clock and around the world,
the availability of collaborators and trusted communities could create
an unprecedented degree of time–space flexibility in people’s daily
lives. This is a big step.
The diffusion and acquisition of knowledge
The second variable is the diffusion and acquisition of knowledge.
Out at the frontier of the possibilities evoked by Figure 3 it is
imaginable that knowledge transparency improves to the point that it
underpins much greater space–time flexibility; networking moves to
another level of complexity and spontaneity; and interconnection
and interdependence evolve to become even more complex and
differentiated. There are many intractable obstacles to such universal
transparency: inadequate communication skills, crude intellectual
property rights, the lack of indexing standards for the internet,
labyrinthian payment systems and the difficulty of validating people’s
claims to a particular competency.
Nonetheless, it is possible to imagine politics succeeding in
overcoming the entrenched interests of the industrial era, which are
busy defending most of these barriers. Pushing all the way out to the
frontier, where the costs and benefits of knowledge diffusion and
acquisition are fully transformed, even opens up the possibility of
moving beyond industrial-era technocracy towards new ‘open-source’
forms of specialisation. Breaking the centuries-old hold of guilds
(professions) and certifiers (universities) on specialised knowledge
would be radical change indeed.
The diffusion of economic and political power
The third dimension of change is the diffusion of economic and
political power. A basic historical undercurrent continues to erode
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hierarchical, autocratic power. During the industrial era the struggle
for representative democratic institutions and human rights have
already produced dramatic advances. For large parts of humanity the
arbitrary and absolute rule of father, husband, cleric, boss, lord or
politician has been significantly reduced. The challenge now is to try
to imagine the attributes of taking this diffusion of power to the next
stage. The temptation is to think of revising constitutions, reforming
the functioning of legislatures, or rewriting the rules for corporate
governance. These are certainly worthwhile tasks. But they fall into
the same category as improved management.
In contrast, at the edges of the possibility space power flows easily
where and when it is needed to accomplish tasks. Grasping what this
might mean is easier when we think of time–space flexibility and
knowledge diffusion, since discretion over when and where we do
things and ready access to knowledge are familiar concepts. Though
still far off in many respects, we can begin to imagine conditions
where the decision-making power needed to determine the shape of
social and public goods would become a function of people’s unique
needs and circumstances. This, albeit from a long distance, is what the
emerging ideal of personalisation may look like.
Understanding the obstacles
From today’s perspective it is not surprising that it is difficult to
imagine how economic and political power might flow freely, in ways
that allow for real-time reallocation depending on the task at hand.
Indeed most of the attributes of the freedom frontier illustrated in
Figure 3 seem well beyond current decision-making practices and
capacities. How would such fluid power, living and knowledge
systems work? Are we really willing to give up our tried and true
methods for such uncertainty?
No doubt the same kinds of questions have plagued parents and
political leaders when confronted with children and followers who
want to break with the past. It is hard to let go, and few institutions or
generations do so voluntarily. Perhaps the most critical obstacles to
overcome are those that limit learning. Learning is the key source of
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the capacities needed to grasp and exercise greater freedom. The
conditions determining the capacity to learn will be central regulators
of the pace and direction of long-term change.
Looking at OECD countries today, individuals and institutions
seem ill equipped to carry the burden of creativity and self-direction
that would characterise everyday life at the frontiers of Figure 3.
Achieving this level of differentiated interdependence certainly
requires much more than simply re-engineering or transforming the
supply side of service-providing institutions.
Personalisation, by definition, means direct involvement in the
production process by what we still call the consumer. Such co-
creation poses a significant challenge to many of the fundamental
distinctions of the industrial era, especially that between supply and
demand.
Treating supply and demand as separate phenomena has shaped
the way organisations are conceived, designed and managed. It
structures and limits our thinking about markets into fields of action
and reaction. It parallels the heretofore powerfully productive
division of labour between conception and execution. It is engrained
in notions of worker obedience and shopper passivity. In effect, the
stunning success of mass-era approaches to loosening the constraints
of subsistence have become among the greatest obstacles to fostering
diversity, creativity and flexibility. Mass production depends on
uniformity and reducing complexity. Mass consumption depends on
acceptance and reaction. Public service institutions like schools,
despite much rhetoric to the contrary, continue to cement key
expectations and behaviour patterns that have more to do with being
punctual and listening to the teacher than discovering self-
governance and creativity.
The challenge then is to move beyond the prefabricated and
homogeneous solutions of the mass era. Lest this seem too daunting,
it is worth recalling that we have been here before, on the cusp of a
period of transition. There are precedents for phases of change
marked by ‘radical incrementalism’ such as the decades of transition
from rural–agricultural to urban–industrial societies. Humans have
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the capacity to shift the focus of their innovative nature from the
refinement of what works in a relatively stable system to searching for
new solutions in an emergent system.7This is what our rather short
span of evolutionary success rests on.
What can governments do?
What can governments do to facilitate twenty-first century
transitions towards freer, more creative societies? The overriding
theme is improving people’s capacity to learn in order to reach better
decisions. How?
One approach is to take advantage of the composite nature of
transformation. This means searching for the experiments, successes
and failures, at the margins, outside the mainstream as a way of
discovering what works. But if the aim is to harness complexity
and diversity to meet human needs then the image of what works
will be more like the swirling of a kaleidoscope than the hard edges
of a blueprint. Succeeding amid this kind of indeterminacy calls
for a disturbingly big change to the ways in which we currently try
to reduce risk and its perception, away from simplification and
total control towards cultivating the full use of all available infor-
mation.
Fortunately, this may be easier to achieve than our industrial era
reflexes lead us to believe. The internet is only the most recent and
obvious example of how a few simple rules that allow a network to
function can underpin an explosion of activities as heterogeneous as
they are impossible to predict. Networking is what it is all about.
Generating a virtuous circle of incremental radicalism capable of
producing positive change across whole societies requires the
simultaneous development of many new networks.
Two examples illustrate ways in which governments could forge
ahead with the next wave of reform by facilitating the emergence of
new networks of networks. These new systems could become as
central as the feudal marketplace once was and the school and firm
still are.
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Cyberc itizens hip
Past advances in freedom and responsibility were closely connected
with bloody struggles for citizenship rights. Not long ago the worst
punishment available to the sovereign was banishment – which for all
practical purposes meant denying a person an identity – revoking
their point of social belonging, their vouch for. The development of
the modern nation staked out a territorial boundary for the right to
citizenship and the obligation, usually tacit, to accept and abide by a
set of minimum and uniform values and behaviours. Tomorrow’s
freedom goes beyond these boundaries. Getting there will require
new ways of asserting one’s identity and living with the consequences.
At the moment the need for new approaches to identity is mostly
illustrated by negative efforts to cope with the failure of existing
methods. For instance, according to the American Federal Trade
Commission, 27.3 million Americans have been victims of identity
theft over the last five years and the costs in 2002 were over $50
billion.8
Considerable concern is also being expressed about the problem of
controlling identity in airports and at border crossings (not to
mention more clandestine migration). At the same time, invasion of
personal privacy is a growing concern. Then there is the tidal wave of
viruses, Trojan horses, worms and spam that undermine the
effectiveness and transparency of the internet.
Many efforts are under way to fix these problems, so far without
too much success. The bigger worry is the lack of a positive, coherent
approach to the vacuum of trust which currently limits the potential
of communication and exchange based on electronic networks. The
biggest cost is not the direct cost of identity theft, but the opportunity
cost in creativity and wealth foregone. Without a common basis for
trusting a vendor on the net or a person at an airport neither
networks nor nations can function effectively.
Setting up trust infrastructures that can efficiently and legitimately
provide cybercitizenship will involve overcoming a range of hurdles
from technical ones related to biometrics and cryptography to
political ones like oversight and accountability. But by establishing
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the right to a trusted identity, safeguarded by law and under the
control of the individual, more widespread freedom and creativity
could become genuinely viable.
Validating what people know
We know that firms are engaged in massive efforts to manage
knowledge, which largely means people, and governments are striving
very hard to encourage people to learn continuously. But so far not
much progress has been made in clarifying the value of human
capital either for organisations or for individuals, both of which need
to decide where and how to invest in knowledge and learning. A large
part of this failure stems from the inadequacies of the near-universal
credential systems we currently use to ascertain whether or not
people are competent to do a job.
It was recently reported in one OECD country that one in three
curriculum vitae contains false credentials. If most of what counts as
successful performance can be learned on the job, this is not a major
problem, as long as the individual is capable of learning. But in a
system where work collaboration is far more spontaneous, diverse
and fluid, across a vast network of interdependencies, it is far more
serious.
The award of knowledge credentials through qualifications suffers
from rigidity, uniformity and conflicts of interest, whereby awarding
institutions have a strong interest in excluding sources of learning
other than their own, while individuals have an equally strong interest
in overstating their achievements and capabilities.
Overcoming this conflict calls for a new independent institution
able to provide a politically legitimate and trusted keyword search
index to all available human know-how; in the process it would allow
people to find and trust suppliers, collaborators or ‘experts’ for any
task they might be preparing to undertake. In contrast with today’s
approaches such a system will not depend on a static or uniform
definition of skills, since in different places and at different times the
attributes of a particular competency change.
Establishing a universal system for validating what people know
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should not be any harder than, for instance, the difficult and
protracted setting up of an efficient and sustainable financial sector.
Methods of accounting, safeguarding, evaluating and exchanging,
physical and monetary assets did not appear overnight. Nor will
human capital banking.
Back to managerial reform? Towards experimentalism!
There are many other examples where the time has come to nurture
the periphery and experiment with new formulas and institutions.
Intellectual property rights in music and pharmaceuticals are two.
Payment systems and rules for safeguarding the transparency and
seamlessness of our information networks are two more.9
Such problems create concrete opportunities to nurture
incrementally radical changes that could move us towards long-term
transformation. Small-scale experiments that are the seeds of
tomorrow’s dominant conventions are all around us. The greatest
difficulty, particularly for political and policy leadership, is finding
the threads of coherence amid this flux, and learning to recognise the
patterns of an emergent system. Today the imperative is to avoid
failure at all cost. This is understandable given the way risk was
managed in the industrial era – through engineered, predesigned and
tested certainty. If something failed then you were a failure. But in a
learning society the idea of picking only the winning initiatives is a
contradiction in terms.
Governments cannot force coherence on social and organisational
systems characterised by complexity and diversity. What collective
activities such as governments, firms and families can do in order to
encourage transformational change is to follow a few key principles
that improve the ability to find security in complexity rather than
uniformity:
!Seek out and encourage experiments – learning by doing.
This is about being able to value and learn from failure
and success.
!Understand that in most cases the means are the ends.
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Only the values associated with specific outcomes can be
anticipated in advance. In general, the values embodied by
outcomes cannot be produced by means that are
antithetical to those values.
!Search for new metrics and new standards that can enable
the transparency (a common base for diversity) and trust
(accountability) that makes networks flourish. Here the
challenge is to tease out the collaborative and competitive
dimensions. Networks depend on solidarity when it
comes to key rules while at the same time giving rise to
the differentiation that spurs conflict. Much
experimentation and learning is still needed before we
ascertain the best ways to sustain the balance.
This is not an exhaustive list; discoveries about how to do things
differently are being made all the time. Governments, through their
reform agendas, should aim to encourage such discovery, enhance the
capacity of public servants and systems to learn from them, and look
for the patterns and conflicts that point towards coherence in the
future shape and character of existing and new public institutions.
Done well, such strategies could make the difference between whether
society achieves radical transition or not, and whether it takes us
towards greater freedom without provoking too violent a backlash.
Riel Miller is a specialist in long-term strategic thinking and principal
administrator at the Centre for Educational Research and Innovation,
OECD, Paris.
Notes
1Thanks to Tom Bentley for invaluable encouragement and insight. The views
expressed in this chapter are the personal opinions of the author (email:
rielm@yahoo.com).
2See A Sen, Development as Freedom (Oxford: Oxford University Press,1999) and
T Bentley and D Stedman-Jones, The Moral Universe (London: Demos, 2001).
3For a detailed exploration of the possibility, not probability, of radical change
over the first few decades of the twenty-first century see the OECD
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International Futures Programme’s 21st Century Transition series, available at
www.oecd.org/dataoecd/12/42/1903212.pdf.Also see M Storper,‘Conventions
and institutions: rethinking problems of state reform, governance and policy’in
L Burlanaqui, AC Castro and H-J Chang (eds) Institutions and the Role of the
State (Cheltenham: Edward Elgar, 2000) for a discussion of changes in the
conventions that order everyday life.
4Note that this scenario of what life might be like ‘if politics is successful’ is
based on the learning society scenario developed using a ‘possibility space’
methodology. See R Miller and T Bentley, Unique Creation – Possible Futures:
four scenarios for schooling in 2030 (Nottingham: National College for School
Leadership, 2003), available at www.ncsl.org.uk/mediastore/image2/possible-
futures-flyer.pdf; and OECD International Futures Programme’s 21st Century
Transition series, available at www.oecd.org/dataoecd/12/42/1903212.pdf.
5Ibid.
6Also see R Miller,‘Why measure human capital?’, in Panorama, AGORA V,
Identification, Evaluation and Recognition of Non-formal Learning, CEDEFOP,
Thessaloniki, March 1999, available at
www2.trainingvillage.gr/etv/publication/download/panorama/5132_EN.pdf.
7B Goodwin, How the Leopard Changed Its Spots: the evolution of complexity,
(Princeton: Princeton University Press, 2001).
8See www.ftc.gov/opa/2003/09/idtheft.htm.
9R Miller et al, ‘The Future of Money’, in The Future of Money (Paris: OECD,
2002).
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