Rethinking the Learning Organization

One of the perhaps unkind delights of living in Macau is schadenfreude; good fodder for hacks. There is a rich seam of opportunities for bathing in this ignoble pleasure, stemming from government practices. I conjecture that in Macau’s government, the more that costs escalate and the more an Office is criticized, the weaker is the action taken to operate real accountability and improvement. Here, as an example, I focus on one Office only: Macau’s Transportation Infrastructure Office (GIT) and the development of Macau’s Light Rail Transit (LRT) system.

According to the government’s own figures, in 2007 it was estimated that phase one of the LRT would cost MOP4.2 billion. This increased to 7.5 billion in 2011 and to MOP14.3 billion in 2017. In September 2018 the Commission of Audit (CA) reported that the estimated cost would likely exceed MOP50 billion, excluding the costs of three other planned LRT sections, i.e. in around one year the calculated costs had tripled. Further, the CA’s 2018 report noted that the construction rate was below 50 per cent of the projected rate.

Just when you might think that the penalties for such gross miscalculation and under-performance should be monstrous, look at what happens: local media report that the CA calls on the GIT to take action to prevent this situation from recurring. In other words, a tap on the knuckles, a few excuses made and then we can all forget about it and carry on as normal.

In its own words, the CA 2018 report’s comments are not new; it’s happened before. In 2011 the CA reported that it expected ‘GIT to timely introduce measures improving its performance and increasing the efficiency of its works . . . namely in planning the application of public resources according to the principles of effectiveness and economy’. The same CA report noted that the ‘GIT has no reference for controlling the costs of the works and to keep them within an overall budget. . . . GIT doesn’t give much attention to keeping budgetary information crucial to financial management’.

Then in 2015 the CA reported that ‘GIT has been conducting an ineffective supervision of the technical team staffing’, that up to the end of 2013 the ‘progress fell far behind the schedule’ and that the ‘penalties stipulated in the contracts are not effective. . . . In the two previous audits, CA found that GIT didn’t make the estimates completely’ and that GIT’s practice ‘clearly is an inversion between what is important and what is secondary’. Indeed, by 2017, only 8 of the 11 proposed routes had anything as basic as cost estimates.

So, over time, GIT seemed incapable of acting on advice, castigation and recommendation, or unwilling to act, and got away with it, with only a scolding and a smack on the hand. The proposed solution to this mess? In 2016, the government indicated that GIT ‘would be extinguished’ and that the work would be placed in the hands of a private company. What an admission: despite warnings and reports, a government department is so bad that it is to be ‘extinguished’. But it gets worse: by the middle of July of 2018 (some two years later) this had not happened; GIT is alive and kicking. Well, alive. But if dead, where are the guarantees that placing the GIT’s work in the hands of a private company would do anything other than give rich pickings to members of the private company?

All this simply rehearses a problem which has an unfortunate history in Macau: cost over-runs, delays, little real accountability and insufficient remedial action. A government with plentiful money in its coffers seems prepared to be profligate in spending public money to shore up its own faults. Surely the government, like a learning organization, could have learned from the delays, cost over-runs and few, if any, apparent penalties, in building the new ferry terminal, prison and hospital. It seems not.

Nearly three decades ago, writing about the learning organization, Peter Senge identified five familiar disciplines of the learning organization: building a shared vision; systems thinking; mental models; team learning; and personal mastery. ‘All very well’, you might think. But what if the ‘system’ is weak, satisfied with being prodigal, is incapable of taking real action, and colludes in enabling bad practice to continue more or less unabated? A shared vision of poor practice, coupled with a system that promulgates it, with teams of like-minded people together in the swamp, is not much help.