Philip Hammond contrasts G4S and Military Resilience

There was an interesting interview in the Independent yesterday with Philip Hammond, the UK’s Minister in charge of Defence and the Armed Forces.  He makes some of the most thoughtful comments I’ve heard about the differences between public and private sector – indeed, some of his analysis might resonate with anyone who has thought about major outsourcing issues in any context.

It’s not surprising perhaps that Hammond is the Minister who is showing his understanding of these issues. Unlike many politicians, he had a successful career in business before he came into Parliament, and the one occasion on which I had a chance to talk to him, he came across as open, intelligent and pragmatic. So he’s now analysing the failure of G4S to provide enough security staff for the Olympics in terms of resilience and lean management thinking. Here’s Hammond speaking in the Independent;

"But the story of G4S and the military rescue is quite informative. The G4S model says 'Here is a cost envelope within which I have to deliver an outcome and I have to do it incredibly leanly with very little resilience'. G4S were literally hiring people and expecting to deploy them three days later. They were trying to build up a management structure overnight and they placed a lot of dependence on the work force – for example getting them to schedule their own shifts by accessing an internet site.

He contrasts this with the Military approach which is to build in a whole different level of resilience.

"We don't ask the military to prepare to maybe be able to do something or to have an 80 per cent chance of delivering. We ask the military to be in a position that, if we ask them to do a task, they are absolutely able to do it for us."

Certainly the G4S “lean” approach was found wanting this time – and we still intend to come back and look at the whole G4S events in more detail at some stage. I suspect lack of resilience wasn’t the only cause of the problems but it certainly played a major part.

Now, whether this will have any bearing on the potential outsourcing  / GoCo (Government owned, contractor operated) options for Defence Equipment and Support is not clear. Hammond seems to be speaking mainly about military front line activities rather than support, including procurement and commercial areas.

But it’s clear that his perhaps slightly rose-tinted view of private sector efficiency has been clouded by the G4S happenings. So we might expect him to be somewhat more cautious, at the very least, about moving potentially tens of thousands of MOD staff into a private sector organisation as per the GoCo plans for DE&S.

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