Time to change the system that failed us


OPINION:THE PREVAILING mood in Ireland is anger. It is literally hanging in the air; palpable everywhere in public discourse and daily interactions. Opinion appears divided as to whether we should move on and focus on the future or use this anger as a catalyst for change. “Moving on” should not be an option. It would inhibit our collective capacity to understand and tackle the root causes of this national crisis, writes DONAL CASEY

Dan O’Brien is absolutely right to highlight the outlier nature of our third economic collapse in 60 years (How inertia became the iron law of Irish politics, Opinion and Analysis, November 7th). Once is unfortunate, twice begins to look careless but three times should be a call to action. The diagnosis of these problems is a complex task. The Fifth Discipline, by Peter Senge would be a useful stimulus for sifting through the embers of the Celtic Tiger. The central idea in the book is systems thinking, the capacity to see organisations or societies as a complex web of inter-connectedness.

In any complex system, the linkages between cause and effect are extremely difficult to discern. Apparently discrete interventions can lead to unintended consequences in faraway parts of the system. Senge encourages leaders to exhibit curiosity and openness in their analysis of root causes.

The Toyota Way (the 14 management principles of the car manufacturer) offers similar advice with the Five Whys model (which aims to assist in getting speedily to the roots of problems), emphasising that the obvious answers are rarely deep enough. Few systems are more complex than a liberal, market-oriented democracy.

The starting point is to critically assess our current reality. Our public finances are borderline insolvent, driven by one of the largest economic contractions in OECD history. Our banking system has ceased to function having bet the ranch on a single asset class. Corporate governance is an idea that exists only in the bulky guidance codes but is largely invisible in practice.

The ideal of public service is on life support, eroded by shocking examples of waste and abuse of public monies. Our pension system has performed worse than any other in the OECD and we have seen wealth destruction in the wider financial services arena on a scale far beyond other developed countries.

The list goes on. The only appropriate diagnosis for our current situation is one of total system failure. The shortcomings are too widespread to be classified as anything else. We need a national forensics process of CSI-type analysis to understand what has gone wrong. As if total system failure wasn’t bad enough, there is one further painful truth for us to face. We have literally defied demographic gravity to get here. Ireland is right in the middle of what is known as the “goldilocks” phase of national demographics.

This is the one-time-only opportunity for every developing country, represented by the transition from large families to small families. Put simply, we are overweight in educated, productive workers and underweight in dependants, young and old.

The 1990s component of our economic prosperity was driven by this phenomenon but it should still be a strongly positive influence.

Achieving an economic depression against this backdrop is quite literally, unforgivable. Mind you, forgiveness is justifiably in short supply, in the apology vacuum that is 21st century Ireland.

The analysis requires an energised national debate. Pride of place on my list of root causes is the bankrupt process of social partnership. The consensus model bore fruit in the late 1980s but has mutated into an unelected insider game of vested interests advocacy.

There is no one in the room representing our young talented graduates who, yet again, are faced with the sole career option of forced emigration. I don’t believe they will be as anxious to return home as previous generations.

As an aside, I would place the Brothers Lehman at approximately number 17 on my list of causes.

Something incredible has happened to our national value system in the course of a single generation. Family, education, work and self-sacrifice defined our parents.

The defining value of Ireland 2009 is self-interest. This is an almost impossible shift in such a short time. The only plausible explanation I can offer is that the omnipresent and suffocating nature of the social partnership process has coded us to think only of ourselves.

There is another critical insight in Senge’s book. Systems almost always overpower individuals. The depressing reality is that bad systems triumph over good people. How else can you explain our current woes, which have emerged despite the country being awash with young talent and energy. Indeed, although it has to be whispered, many of the people who have led us here are also good people. Bad systems are formidable opponents.

This idea resonates in the public sector where tens of thousands of service-oriented leaders are slowly but relentlessly drained of initiative and ambition by the stifling nature of the system.

Readers may be too depressed to carry on at this stage but I remain full of optimism about our future. The 20th anniversary of the collapse of the Berlin Wall is a reminder that system change can happen virtually overnight if there is a sufficient groundswell in its favour. The air may be heavy with anger but there has never been a greater collective appetite for change.

The three words that I would like to define my generation are courage, merit and values.

Courage is the X-factor in leadership. The likeability era has proven to be utterly flawed. System change is never popular, particularly during periods of sustained prosperity. The minority who highlighted our emerging collapse deserve credit but this is not about credit.

The new cadre of leaders in Ireland must be bright and talented in their fields but most of all, they must have the moral strength to make difficult decisions.

Merit is a simple but strangely elusive idea in Ireland. We appear to prefer the quick and dirty process of cronyism. The long-term future of any organisation is best served when recruitment, promotional and purchasing decisions are based on merit. There are two sides to this coin.

The obvious side is that the best people are likely to produce the best organisational outcomes. The more important side is that visibly fair process is essential to the social capital within an organisation. Above anything else, human societies endure on a solid foundation of fairness.

It is in the domain of values that we must all take some responsibility for the total failure of our governance systems. This may elicit righteous indignation from some quarters, but, we get the government we deserve.

Our high tolerance levels for all manner of low-level corruption has mutated into a disastrous national outcome. A widespread shift in our attitudes to everything from “nixers” to corporate entertainment is required if we want to break this recurring pattern.

Systems thinking demands more effort and discipline from us all. Consider the case of Bertie Ahern, our most popular and longest-serving taoiseach. I voted for him in 2007. Reflecting on this now, it was a decision based on likeability rather than character. Many of us will claim it was based on the lack of a viable alternative.

Whatever it was, it was a decision that denied character as the critical attribute required when faced with the excruciating dilemmas posed by national leadership. Ahern was rarely able for these hard choices and chose the easier route that was the politics of appeasement. The final lens through which any set of choices should be viewed is crystal clear and piercingly simple.

Right and wrong.

Donal Casey is an actuary and is managing director of Aon Consulting (Ireland). He is a former senior executive with Irish Life and Permanent. The views expressed here are personal