Cross-posted from The Mandarin
In this second instalment of his three-part series, economist and forward thinker Nicholas Gruen explains more of why it is so important to understand the ‘how’ of getting things done.
From the commanding heights to everyday routines
The big public sector careers are built in the land of ‘what’ – that is in designing and administering policy in our social services systems in our capital cities. Meanwhile the land of ‘how’ is the land of ‘street-level bureaucrats’. It’s out in the sticks. And that’s inauspicious territory from which to build a public sector career. It’s a mark of how disconnected from the how those in the centre are that, as I’ve previously documented, they imagine that something like a market in ‘what works’ either already exists or will somehow construct itself around opportunities as they present themselves. And so, somehow, our complete failure to build even the rudiments of a system that might detect and then seek to expand what works wherever we find it goes unremarked. This is true of casual discussion, of senior bureaucratic and political leaders’ prepared speeches, in academic work and in the stream of independent reports every year or so including the recent comprehensive Thodey Review of the public service.
Of course, people understand the difference in principle between ‘knowing what’ and ‘knowing how’ when their attention is drawn to the distinction. But they’re generally unaware of the way ‘knowing what’ has come to substitute for knowing how throughout their world. Because organisations and systems can’t easily scrutinise their agents’ know-how, it is made legible to them via the proxy of knowing what. Employees’ credentials come to stand for their know-how. As entrepreneur and essayist Paul Graham has written, this process begins at school and most of the confusion between the two occurs insensibly:
For me, as for most students, the measurement of what I was learning completely dominated actual learning in college. … Getting a good grade in a class on x is so different from learning a lot about x that you have to choose one or the other, and you can’t blame students if they choose grades. Everyone judges them by their grades — graduate programs, employers, scholarships, even their own parents.
It took Graham the best part of his professional life to understand what was really going on, and how hard it was to get the high achievers he mentored in start-ups to focus on the real ‘how’ of their job – how to make great products – rather than looking round for tests to ‘hack’. (In that context this involved looking for tips and tricks to attract the money of investors and customers).
Where know-how pervades an organisation, the damage done by these expedients will often be contained. They may be a dominant consideration in recruitment, but then the actual contribution of those recruited can loom larger in the system’s apprehension of their abilities and its provision of training and further career progression. This will often be the case where a failure of know-how is made conspicuous by failure – as in the case of engineering – and/or where professional knowledge is given independent status within organisations – as with medicine. Elsewhere, the professions are both less well trained and enjoy less independent status. This is true in teaching, social work and public administration.
Here the various makeshifts by which organisations govern know-how – such as KPIs – can take on a life of their own just as tests come to dominate what is learned in school. This process is also a major factor in consulting. The biggest firms – now known as ‘brands’ – deliver professional services from people with some of the best resumes available in law, engineering, policy development, management, communications and PR. And whether they really have the appropriate know-how for the task at hand, or however well their incentives align with the longer-term tasks to which they contribute, no-one ever got sacked for hiring them.
The point made in the previous instalment of this essay regarding the disconnect between knowing that and knowing how in the professions might seem somewhat rarified. After all, economists and engineers tend not to deliver services on the ground. Yet the imaginative landscape implied by their discipline and other high-status professions aspiring to scientific status casts a long shadow. The tendency for ‘knowing what’ – or various imitations of it – to take precedence over ‘knowing how’ characterises the way social policy is designed and delivered.
Thus, for instance, the New Zealand Treasury is proud of its wellbeing framework on which it’s worked for around a decade – and far more than Australia’s desultory exercise. On the arrival of a Prime Minister Ardern who was keen to bring wellbeing into the central objectives of government policy, it enabled the rapid production of a wellbeing ‘dashboard’ for policymakers. In principle, it can answer questions like “what is the level of wellbeing amongst Māori in Christchurch?”
This information may prove to be valuable or otherwise. But it’s from the land of ‘what’ and tells us surprisingly little if we want to visit the land of ‘how’. It offers no direct insights into how one might improve the wellbeing of Māori in the Christchurch area. Yet this was surely the point of the exercise. As I’ve documented elsewhere, this is par for the course in most jurisdictions. We might equally invest in a dashboard showing us the prevalence of headaches without noting that people have used the salicylic acid occurring naturally in willow bark to alleviate headaches for three and a half millennia. It is now marketed as aspirin.
When embarking on some difficult new venture, or the refurbishment of an old one, the habit is not to start from a stocktake of what know-how and capability is and is not available to the system in the field. Nor is it to identify where performance has been best to ensure that those people and their insights help steer the process of lifting the system’s capability more broadly. This would be analogous to the way evolution and markets build from outbreaks of what works best wherever they occur in the field rather than designing and imposing a plan from the top-down.
Rather than a stocktake of capabilities of the existing know-how of the organisation, the construction of frameworks becomes alluring. Frameworks are from the land of ‘what’. It might be the case that some frameworks embody very deep and rigorous thought. But no-one scrutinising them from the outside could ever tell. For, just as certain approaches to economics are proud of their ability to ignore whether their subject is silicon chips or potato chips, so, frameworks are written in a language which is largely independent of the work being done. They tie together inputs, outputs, outcomes and an overarching ‘vision’ all strung together with pleasing abstract nouns or adjectives. Words like ‘equitable’, ‘effective’, ‘efficient’, ‘accountable’ and ‘sustainable’ often figure as if asserting them vouchsafed their presence in the program.
All this makes the construction of frameworks an ideal displacement activity for the generalists running the show. It shows them to be busy leading and organising the troops while keeping them entirely insulated from having any skin in the game. If a bridge falls down or billions go missing, that word ‘accountable’ is in the framework for a reason. The malefactors can be rounded up from the land of ‘how’. As if betraying unquiet consciences at this vacuity, such framework documents frequently arrange their pleasing words into strategic diagrams which suggest specific relationships between them. Yet it’s surprising – or perhaps unsurprising – how gratuitous these diagrams are. Or on occasion worse. For on taking them seriously, it’s remarkable how often the relationships they imply actually make no sense or worse, betray the ultimate confusion and magical thinking at the heart of the project they illustrate.
At this point, it may have occurred to you that know-how is much harder to govern, and so a much harder thing to deliver than knowing what. It’s also often much less ‘scalable’. So not only have I no magic wand to wave that will fix it all, but if I did, I would probably be perpetuating the very thing that I’m critiquing – which is fads peddled by ‘thought leaders’ in TED talks and endless elite international events repackaging third-way nostrums from the land of ‘what’ when we desperately want admission to the land of ‘how’. But in Part Three, I’ll take a look at three new kinds of institutions designed to win new know-how and scale it in government service delivery: Government innovation ‘labs’, behavioural insights units and What Works Centres. The key to their success so far has been the way they bolt on to business-as-usual and, in so doing, improve it. But as I’ll explain, if these acorns are to grow into the oak trees that might herald a mature system in which know-how is won and ‘scaled’, they’ll have to move beyond their own tendencies to substitute know-ledge for the more difficult and distant destination of know-how.
 He continues:
Why did founders tie themselves in knots doing the wrong things when the answer was right in front of them? Because that was what they’d been trained to do. Their education had taught them that the way to win was to hack the test. And without even telling them they were being trained to do this. The younger ones, the recent graduates, had never faced a non-artificial test. They thought this was just how the world worked: that the first thing you did, when facing any kind of challenge, was to figure out what the trick was for hacking the test. …There are certainly big chunks of the world where the way to win is to hack the test.
 In economics, I’ve documented how this occurs with the crude distinction between ‘positive’ and ‘normative’ economics. The considerations issues raised by Simon above would be news to almost all economists – including professors of their field. Given this, economists imagine that normative conclusions about economic policy must follow relatively straightforwardly from positive models of the economy. (Yet the distinction between positive and normative should be the same distinction Simon references above between ‘applied’ analysis and ‘design’ or the knowhow to effect “courses of action aimed at changing existing situations into preferred ones”.)