20 January 2004

After retiring from the Chair of Diageo, which was created in 1997 by the merger of Guinness and Grand Metropolitan, I took over the Chair of the University for Industry from Ron Dearing in June 2000. I was subsequently asked also to take on the chair of QCA in October 2002.

I would like to start with a health warning. Since becoming involved in the education field, I have been hugely impressed by the dedication and commitment of the very many people I have met: their commitment to the development of the education process in this country and to their own part in it. I have also sensed in many cases the frustration that changes which seem obvious to them, and which could make their life both easier and more productive, are not being pursued. So my health warning is this: although I intend tonight to be controversial and occasionally critical, in the words of the Godfather it's not personal - it's business, and none of this is aimed at individuals who devote their lives to the education process. My comments are systemic and organisational, and I would ask you to understand my remarks in that context.

I decided to entitle my talk Isn't it time we put the consumer first? - but on reflection maybe I should have called it Experiences of a businessman in a foreign land. Because that title would have immediately begged the question whether business is in fact so different from education - and whether it needs to be. For I am going to argue tonight that the guiding principles for a successful business are not really different from those that should be used also to make a success in education.

In business, a company must start with a deep understanding of the needs of the consumer or the customer, and how this is changing over time; we must understand the market and the environment in which the business is operating. We need to develop a strategy rooted in the needs of the consumer; followed by an operating plan to deliver the strategy with measurable outputs; and install an organisation structure designed to ensure delivery; and, most important, total clarity of who has the authority and responsibility for delivering each part of the plan. It seems to me that these principles for success should apply just as much to the delivery of our educational programmes.

One of the questions I like to ask as I go around is 'who is your customer?' In the educational field, I get many different answers: sometimes the Department for Education, Government, Ministers, the LSC who provides the money, even schools or colleges and various NDPBs. Well less than half the people I ask identify the learner as the customer. But the proposition I put to you tonight is that, in the educational field, there is only one customer; and that is the learner. And if you believe that, as I do passionately, then the acid test for all of us is - whether everything we do and, all the money we spend, is dedicated solely to improving the learning experience of the learner? I doubt that we could honestly answer 'yes' to that question. And, incidentally, when we are talking about the learner in today's world, I believe that we must be not just talking about 3 to19 or even 3 to 22. Today, the necessity, the essential, is for lifelong learning; not just from 3 to 19, but rather, in fact, from 3 to 90.

We all know the famous dictum of Henry Ford: 'you can have any colour of car you want provided it is black.' In today's business world, that philosophy would be the ultimate arrogance of a production operation focussed on maximising its short term financial gains; but at the same time, actually dooming itself to long term demise at the hands of those competitors who do understand the fundamental consumer desire for choice to suit their individual needs. That was Mr Ford many years ago; but we should stop and ask ourselves how different his thought process was from some educational establishments today: those who tell the learner that they can have any course they like, provided it is one they offer, provided the learner is prepared to attend their location, and conform to their timetables. And how similar are those educational organisations whose preoccupation is not with offering choice driven by consumer need, but focus instead on how to maximise their income from the various sources of funding. I am sure it is no coincidence that the Ufi/Learndirect who offer online learning, any time, any place, attract 60% of its enrolments from people who have not been in learning in the last three years and in many cases since they left school. The flexibility of the Learndirect offering is enabling many people (over one million of them to date) who find conventional offerings simply do not meet their needs. And for me, the exciting thing about Learndirect is the way it is expanding the market for learning, by tailoring their offer to attract new and different, and particularly hard to reach, learners, including those who work in SMEs.

So my first point is that at least parts of our educational systems seem to be provider led rather than consumer or learner led - and in the business world that would be a recipe for commercial extinction - while I suggest that in the educational world the result is a waste of public money, and a recipe, ultimately, for a less skilled and less well-educated society.

My second requirement for a successful business is a cohesive strategy and business plan, rooted in the needs of the consumer - with measurable outcomes and complete clarity of responsibility and accountability for delivering that plan. At first glance, there would appear to be no lack of strategy in the DfES. We have the 21st Century Skills Strategy, 14-19 Reform, Success for All, Excellence and Enjoyment, Delivering Skills for Life, the Higher Education White Paper, and so on. The list seems endless. Each of these documents cover a particular sector of the educational landscape - but that is the problem. Because they are developed in separate silos, the logical connections between them are not made. They are like different pieces of a jigsaw puzzle that do not fit together. And the part that is missing is the part that really matters: the thing that’s missing is the overview that covers the whole education landscape - and pulls together the whole strategy from 3 to 90. Surely such a strategic overview would connect all educational needs, describing pathways for developing the diverse talents of everyone in the community, catering for the educational needs of individual learners, and resulting in a multi-skilled workforce; from scientist to plumber, from business executive to farm worker, from lawyer to computer technician, and more widely still. It would ensure that the strategies currently built on artificial organisational silos link together into one cohesive framework, reflecting the continuum of the developing needs of individual learners both at school and during life.

And what's more, these documents are seldom strategies in any form I would recognise. They are more a series of wish lists, or statements of intent, with few hard road maps and worked through programmes to produce the desired and defined result. They lack clear definition of who has the responsibility and accountability for delivery; and what delivery will look like in hard measurable outputs; and have they been agreed with rather than imposed on the people responsible for delivering them? I rather doubt it. Why? Because, reading any of these documents, accountability is rarely mentioned directly - they appear to try to cover every conceivable base, perhaps I might suggest to avoid the danger of excluding anyone who could remotely consider themselves to have an involvement. For example, the Skills Strategy which, unlike many other documents, does make a valiant attempt to bring together ownership of all the different elements still lists 14 different organisations which are all expected to deliver this year. I ask you, who is responsible? Who holds the budget? And whose job is on the line? - and please don’t answer "Ministers". In my experience, if there is no singular responsibility clearly identified and accepted, there is zero likelihood of significant achievement.

The result of this lack of clarity is, I believe, a substantial waste of public money. I am, frankly, shocked at the number of overlapping organisations fishing in the same pond, funded in part or wholly by public money. The excellent report by the Better Regulation Task Force in July 2002 entitled Local Delivery of Central Policy highlights the number of disparate bodies involved in the delivery of the skills and economic development agenda. They identified six government departments, eight national bodies, eleven regional bodies, seven sub-regional bodies and thirteen local bodies for a total of 45 - and they were pretty sure they had not identified all the players. They said, and I quote:

"When we started this review we expected to find a logical flow to the end user, in this case, a student, a worker or a business. We looked for clear lines of accountabilities and responsibilities, who does what, why and where. We hoped to find, at each stage, that value was added. The Task Force identified a lot of initiatives, agencies and bodies, but no-one could tell us how these bodies fitted together, how their objectives and aims complemented each other, or how they each added value. This complexity and muddle is wasteful. Having so many layers, this system is time consuming and bureaucratic. The lack of clarity adds to the risk of fraud and diversion to 'off target' activities".

They hit the nail right on the head.

And, equally, I am horrified at the deluge that crosses my desk - of invitations to conferences; and glossy, lengthy, and no doubt learned reports. We tried to find out how many educational conferences and large meetings there are each year in the UK. The answer is clearly many thousands. The QCA alone hosts a chunk of them. No-one we asked at the DfES could tell us how many they organise across the Department! Who goes to these conferences? - unfortunately thousands - and who reads these treaties?, and much more importantly, does anyone ever act on them? I wonder who has ever stopped to consider the cost of these activities, the time and energy involved - presumably all funded directly or indirectly by public money. I am sure it is time to grasp the nettle and start to eliminate the overlap - demand that value is added on every occasion and apply the acid test of whether the activity brings benefit directly to the learner. Less debate and more action.

Now, let me talk about the qualifications framework; which in an ideal world should be a series of stepladders, up which individuals can climb to develop their talents and meet their personal aspirations. It is very doubtful that the existing systems meet this criteria. We have some 3000 qualifications for skills with very little to link them together to represent such a step ladder. No wonder David Sherlock, Chief Executive of the Adult Learning Inspectorate, recently called this 'incoherent and chaotic'. He was not wrong. Our so-called national qualifications framework is not a 'framework' in the sense of providing architecture - at present it is merely a list of qualifications.

The good news is that the SSDA is now working towards reducing the number of occupation groups to 23, each covered by a Sector Skills Council, and that the QCA is pushing for a simple structure of qualifications which define key occupational areas (eg. plumbing, hairdressing) based on high quality national occupational standards.

The formation of a credit framework has the possibility of going a long way to creating coherence and ease of understanding. But unitising today's chaos, and then giving it credit, would compound the current problems and make matters worse. We have to pursue the credit agenda in parallel with intelligent and radical reform of the qualifications framework itself - more on this later.

And so, in summary, my concerns surround the apparent absence in the education arena of most of the factors that any business would consider essential for success and survival - coherent strategy, rooted in the needs of the customer (in our case, the learner), with measurable outputs, and clear responsibility and accountability for delivery. Rather, I detect provider focus, confusion from many organisations fishing variously in the same ponds, strategy driven in largely unconnected silos, with an absence of specific and singular responsibility and accountability for delivery - in other words, we are wasting public money, and failing our customers, the learners.

The observations I have made so far are essentially structural - basic organisational requirements for a successful system. But, of course, we do have to recognise the real world in which we live, accepting that education is highly politicised where perception of progress or lack of progress can have significant electoral consequences. And let me hasten to add that I am not making a party political point here; but this seems to me to present a fundamental dilemma where success in political terms is inevitably measured in three to four year time frames, and is indeed influenced daily by media headlines - while educational policy needs to be a long term issue, and progress towards defined goals should be thought of as perhaps a 10 or even 20 year process, which requires consistency and fine tuning. It certainly does not react well to sudden, untested, radical change, or by being dug up periodically to inspect the health of its roots. The last thing it needs is yet another initiative. I can only characterise this mismatch as part of the environment within which the educational system has to manage, in the same way that a business must adjust to changing exchange rate movements or other external factors outside its control.

As I have said, my basic message is a managerial and organisational message and, in that light, I would venture some suggestions.

I would start by seeking to fill in that over-riding element of the strategy that I suggested was missing - a coherence and a continuum which is built up from the needs of the consumer. That coherence requires:

• First, a single qualifications framework which includes all general qualifications, vocational qualifications, university degrees and higher degrees. This single framework should be:
  • regardless of the different funding mechanisms for parts of it (by the LSC or by the Higher Education Funding Council for England);
  • regardless of which agency accredits, regulates or quality assures it (by the QCA or by the Quality Assurance Agency);
  • regardless of whether the content of the qualification has its basis in industrial practice or in university research;
  • regardless of the type of institution or workplace in which the teaching and learning takes place (school, college, university, office, laboratory, workshop, factory floor or on-line).
  
  This is a radical proposal, as it joins up the National Qualifications Framework (general and vocational qualifications) and the Framework for Higher Education Qualifications (university degrees and higher degrees). But it is absolutely necessary if we are to sweep aside the provider focus which has kept separate and paramount the interests of the different policy-making, funding, accrediting and delivery agencies. Instead, this proposal puts the consumer, the learner at the core. Nothing short of this will provide genuine pathways for lifelong learning.
  
  
• Second, the framework must be market-led, reflecting what learners and their employers want, rather than what agencies and institutions are prepared to fund or provide. The essential characteristics of the framework must be:
  • that each qualification is constructed from a series of units or modules, of different sizes and levels of demand, arranged to be taken sequentially, and each carrying a specified level of credit points;
  • that each qualification has recognised currency or value; that is, the level of challenge and content of each unit. Each whole qualification must be specified, plain, and widely understood;
  • that the number of qualifications is reduced to a single pathway at each level in each occupation, made up of a core and optional units. Like the modern motor car industry, and unlike Henry Ford, there will be occupational models designed for each level with optional extras to meet the needs and interests of individual learners and employers.
  
  The other essentials are:
  • that assessment is fit for purpose, both for individual units and across the qualification as a whole;
  • that vendor and company-based training which has been quality-assured by an awarding body, is also included.
  
  
• Third, we must streamline the processes for developing and accrediting vocational qualifications, so that they can be more responsive to emerging and anticipated needs. The keys to this are:
  • very close links between Sector Skills Councils and business and industry, leading to agility in the shaping of national occupational standards for areas of emerging need;
  • similarly close links between Sector Skills Councils and awarding bodies, so that qualifications are developed promptly to meet those standards;
  • a new approach to the quality assurance of vocational qualifications by the QCA through a process of monitoring and audit of awarding bodies, rather than prior approval of detailed submissions. This will bring the awarding of qualifications much closer to the workplace.
  
  
• And fourth point, a rich and interactive on-line source of information, accessible to all learners, which will enable them to:
  • enter their personal profile of skills and aspirations, and find the options available to them;
  • find the level at which best to enter the framework;
  • access their personal record of completed credits.
  
  This would require bringing together and reshaping the databases of the LSC, QCA, the SSDA, Ufi, the awarding bodies and other agencies, to create a national data bank for the storage and secure retrieval of personal information by each learner.

Next we must identify who has the managerial responsibility for delivering the results. This needs to be rooted in a new way of working between the DfES and its partner organisations (who I would prefer to call the Delivery organisations). Charles Clarke and David Normington are to be warmly congratulated on their recent initiative in this respect. They seek better strategic alignment between the DfES and the Delivery organisations, with much greater clarity about roles and responsibilities, clear performance indicators, and monitoring only by exception. This would be a major step in the right direction. While I respectfully question whether they fully appreciate the enormity of the cultural change required for both the Department and the Delivery organisations, or the angst and heart searching, or time and effort it will take, a successful implementation over time will transform the way our education system is managed. They deserve our whole-hearted and selfless support to make it happen.

Two things will be needed - total clarity of the respective roles of the Department and the Delivery units. The Department can no longer be a command and control organisation. It must not duplicate or shadow the work of the Delivery organisations. Its role must be to agree strategy and deliverables with the Delivery organisations, set up an early warning system when problems are foreseen, allocate the budgets according to policy and priorities, and play a facilitating and co-ordinating role across the whole educational field. They must also have a total commitment to getting rid of silo mentalities, accelerating knowledge transfer, and eliminating duplication and overlap. As an early sign of this change we should welcome recent newspaper reports of plans for a reduction of 1000 heads in the DfES.

To match this change in the Department’s role, Delivery organisations will have to step up to the plate, and many will have to substantially upgrade their levels of performance. This needs a fundamental review of the capabilities of their organisations - how many today really do have the managerial and organisational capabilities, including strong Boards, to give confidence in their ability to deliver their targets with creativity and within their allocated budgets? In this scenario, strategy would be developed in a co-operative dialogue between the Department and the Delivery organisation and be amended over time in the light of actual measured success or failure of the different programmes. An essential mantra between all the parties must be to build on successful programmes, and do more of them; and ruthlessly evaluate programmes that do not work, learn the lessons and move on. I ask you, how many non-functioning projects are around today that should have been killed a long time ago? In his annual report in November 2003 David Sherlock said:

"The early success of Ufi/Learndirect points the way forward. The inadequacy rate among Learndirect hubs stands at under 5% because Ufi cuts the contracts of weak organisations without hesitation."

This is what I mean when I say we need less debate, and more action.

Continuing this philosophy of accountability, a useful thought might be to characterise the many organisations currently in the field into Delivery organisations and Support organisations. The Delivery organisations such as LSC, Ufi, SSDA, QCA and others, could be differentiated from Support organisations such as our hosts tonight the LSDA, and many others. Delivery organisations would have measurable outputs against agreed objectives; Support organisations would provide services to Delivery organisations under contracts paid by the Delivery organisations, rather than direct from the DfES. Support organisations would survive and continue to be used dependent on the quality and relevance of their advice and support to Delivery organisations - or go out of business.

We live in a time of very tight availability of resources. It is frankly irresponsible of us not to seek ways to free up additional funds to directly benefit the learner. Some of this must come from the overdue slaughter of some of the sacred cows that I have identified tonight; through the elimination of duplication and overlap, and applying the acid test of direct benefit to the learner. This will take a new and very purposeful leadership from the DfES and Ministers in the face of the equally purposeful rear-guard actions that can confidently and regrettably be expected.

Finally, ladies and gentlemen, for those of you who think these are the rambling thoughts of a businessman hopelessly lost in a foreign land, let me point out what is happening in two organisations close to home. At the QCA, Ken Boston has, in a 12-month period, transformed a disillusioned, beleaguered and rudderless body into an organisation that is on its way to providing a pivotal role in the education landscape. And Mark Haysom at the LSC has succeeded in even less time in providing direction and a coherent organisation structure that will be fit for purpose to achieve its crucial delivery role. My point is simple - good management is good management, wherever it is applied. My proposition to you tonight, therefore, is that the lessons proven over time in creating and sustaining successful business are equally applicable in the education field. I believe that if we apply these principles to the education process it can lead us more cost effectively and more rapidly to the goal we all seek - a society in which every individual’s talents are properly developed and properly recognised.

Sir Anthony Greener