Hats off to anyone with a confident grip on UK economic policy right now. And respect to those who can name the people in charge of it, given the revolving door at the Treasury. With the PM clinging on it’s easy to get wrapped up in the Westminster soap opera. But the real drama is playing out in the businesses and households grappling with policy U-turns, rising mortgages and energy bills.
There are plenty of people writing insightfully about the politics of all this. Trying to set that aside, I’ve been picking through the chaos for any broader lessons on handling change. You may know the long-standing work by William and Susan Bridges on managing transitions. I don’t think it’s too much of a stretch to draw some parallels with Westminster over the last month or so.
In short, the Bridges model suggests people go through three stages in a transition process. An ‘endings’ phase when they must let go of what went before. A ‘neutral zone’ of confusion and uncertainty, in which people grapple with what’s to come next. And then a ‘new beginnings’ phase, when people (hopefully) feel energised about the future. The model suggests everyone goes through these stages, but often at different speeds and in slightly different ways.
By dumping one Prime Minister and appointing someone new, the Conservative party served us up a turbulent transition in the full glare of the media spotlight.
Borrowing from the Bridges model, we saw how the ‘endings’ phase played out. A Prime Minister with a thumping majority was ousted by his own Cabinet and MPs. The big challenge in managing endings is to explain why the status quo can’t continue, and that was made abundantly clear in the way Boris Johnson’s support evaporated. In a change communications sense, so far so good.
But I think we can point to some problems in the neutral zone. This second phase should be a time of feedback and consultation; of creativity and new ideas. These are all requirements that were tackled to some degree in the leadership contest, as candidates set out a vision for the country. But critically, while Liz Truss’s agenda won a clear victory among the party membership, Rishi Sunak’s economic ideas put him consistently ahead in the MP’s ballots.
Consequently, when Kwasi Kwarteng set out the mini budget in September, the Conservative party membership may have been on board and ready for new beginnings, but many MPs were still in the neutral zone. The mini budget contained sweeping changes that went beyond what MPs and the markets expected. By trying to act quickly and decisively, the PM presented a vision of the future that people weren’t ready for and perhaps never would be. There hadn’t been enough time in the neutral zone to get proper buy in or to fine-tune (or abandon) ideas.
There were also problems in laying the groundwork for new beginnings. The Bridges model suggests successful new beginnings depend on people having a purpose, a picture of the future, a plan and a part to play. Regardless of the policy content, the mini budget didn’t measure-up well against this framework. While growth was presented as the purpose of the package, the picture of the future was fuzzy at best given the lack of any analysis by the Office of Budget Responsibility. On top of this, there was no clear plan – tax cuts were announced without any indication of how they would be paid for. And crucially, some of the most influential political figures of recent years had no part to play. They were consigned to the back benches during the PM’s new dawn. Far from heading in a brave new direction in lockstep with the PM, markets and MPs alike went into meltdown and confidence collapsed.
Yes – it’s a lot more complicated than that. And I doubt people in Number 10 are ruefully thumbing through the Bridges model of change. But recent weeks provide a hard-hitting reminder that change and transition are tough. And if they go wrong, they can go wrong in a big way.