The cost of neglecting the dynamics

Whatever further emerges about the chain of events that led to the loss of the financial records of 25 million citizens, one thing is clear. An important feature of the context in which this monumental failure occurred is the recent merger of the Inland Revenue and Customs and Excise to form HM Revenue and Customs.

Red top tabloid sensationalism and Daily Mail hectoring aside, it is evident that there is still unfinished business relating to the merger of these two land-standing and in their own ways august institutions. Unresolved inter-organisational dynamics will have played their part in creating the conditions in which the actions which led to loss of such sensitive material could have occured.

Organisational dynamics have also been identified as a critical factor behind the failure of Metronet, the organisation responsible for the maintenance and renewal of a large part of the London Underground.

Metronet is in effect a consortium. Its shareholders consist of Atkins, Balfour Beatty, Bombardier, EDF Energy, and Thames Water. One senior player involved in this saga attributes the company’s collapse to the fact that it was never clear who was in charge – the consortium was a leaderless group.

Relations between organisations lie at the heart of the other continuing financial drama – Northern Rock. The clunkiness of the response to the bank’s financial meltdown highlighted serious weaknesses in the relationships between the Treasury, the Bank of England and the Financial Services Authority.

A consortium is almost certainly necessary to tackle a job as big as the renewal of the tube. The decision to merge the revenue and customs may well have been a sound one. And the creation of the FSA may well prove to have been a good thing. But in all three cases insufficient attention has been paid to intra and inter-organisational dynamics.

The impetus to drive change rapidly is a powerful one. But the millions of people whose bank details have been lost, who fear for their savings or who rely on the tube to get to work may wish that more time had been taken to deal with underlying cultural and organisational issues.