Between Disruption and Incrementalism

I’d like to stress that I want to consider this quote as a reflection on institutions, which I think can stand quite separately from the context of the column in which it was written.

This hits on a truth about many institutions: the changes that make the most difference are unlikely, precisely because they’re changes. And institutions are structured as they are because of the way things have been.

Coyne applied this to politics. It can apply equally to corporations, trade organizations, policy and legal environments, governance bodies, or bureaucracies. And it does not assume a priori that change is necessarily good. It’s simply a feature for organizations, of any kind, for would-be changers to consider.

So I’d like to explore a thought experiment for those who are interested in change, but have watched others before them try and fail.

One common example of behavioural economics applies to retirement savings. When people are asked if they’d like to increase their savings rate today – through increased deductions to their paycheque – they pass. They’ll increase it later, after they pay X off, when things are less tight, etc. However, when asked if they’d like to commit to increasing their savings rate in the future – same deduction to take-home pay, but synced up with their next pay raise – they sign up.

The principle is simple. We can be rational about our long-term good, but immediate, emotional, and visceral needs often supersede our rationality. So what’s the institutional version of that approach to retirement savings, scaled up?

It’s not committing to political reform for the next time an election is called, and it’s not committing to governance changes for the next time a CEO retires. Such systems are vastly more complex than even retirement savings.

The deck is stacked against anyone simply volunteering to dramatically alter the institutions they control. At the very least, it’s uncertain, it’s change. But it seems that many players would agree to future commitments: an algorithm, a series of if, then statements that would improve institutions, level the playing field, and leave a legacy. Especially when it’s hard to predict which side of the playing field one will be on in the future.

Take an idea like proportional representation for voting, where (in one form or another) parties gain numbers of seats based on popular vote. It’s complex, a major change from the status quo, incredibly contentious, and almost certainly fits Coyne’s assessment of “no chance of being enacted.” That is, if a motion was to introduce legislation establishing proportional representation. What if, instead, a motion was made to introduce legislation that required parliament to do the following? (Excuse the sheer volume of variables, denoted by capital letters.)

“If voting rates were below a certain threshold in year A, form a committee of B nature to provide C number of options on electoral reform including some form of D, E, and F, and if G level of public consultation led to H result, a public referendum would be held and if I percentage of the Canadian population agreed, parliament would hold a binding vote of J nature.”

Convoluted, yes, but I’m trying to draw as extreme a thought experiment as possible. Regardless, it strikes me as more likely of enactment than a straight call for a vote. And if the principle is sound, then it’s really a question of degree. What’s the balance of reliability, effectiveness, and distance into the future that people will actually agree to? That’s the key. Great ideas with a snowball’s chance in hell of success are not great ideas.

There are examples of governance through this mechanism. Consider radio spectrum auctions. These are characterized by well-entrenched interests, massive stakes in potential profits, and complex institutions. Yet, all the players agree to a complex set of conditions for future decision making and (generally) abide by them, which can maximize both fairness and public good. This isn’t out of reach. It’s the social contract, the legitimacy of democracy, scaled down.

Typically we consider our options for change as disruption or incrementalism. A third option has always existed, which is stealth: a disruptive plan masquerading as incremental. System consensus – in which actors agree to the conditions and systems of future decision-making, without necessarily agreeing to the decisions made – strikes me as a fourth option ripe for additional exploration.

Within the Public Service

I used a massively thorny, nation-wide concept for the thought experiment. I’d also see it as the most likely solution to persistent trust gaps (see: Risk, Failure, and Honesty and On the Trust Gap). However, I think this could apply throughout any organization.

The most likely arena for this approach to change would be where bureaucrats and elected officials intersect, in the advice and options put forth to Cabinet on big-P Policy. But here’s a smaller example: the fall 2013 Policy Ignite session, in which public servants pitched innovative policy ideas to a Dragon’s Den of senior executives. The executives then further explored the top pitches – which suddenly makes them responsible for the ideas.

Consider, instead, if the rule had steadfastly been that the top ideas would get piloted as presented. In this scenario, those executives are responsible for the decision to hold the competition but less so for the outcome of the pilot. Obviously there’d have to be other parameters built in, but this approach could in many ways provide the more stable platform for experimentation and testing unconventional ideas.

The question is still defining the problem, then considering all of the tools at one’s disposal. But this could be one to consider adding. Maybe disruption will work, maybe the slow and steady approach, or maybe, asking for a commitment to a long-term future.