Monday, February 18, 2008

A Time To Act

After several months in which alternative solutions to the Northern Rock crisis were explored, the UK government has finally decided to take the Northern Rock "bank" into temporary public ownership. [BBC News, February 17th, 2008]

The delay provides easy ammunition for political opponents.
  • "After months of dither and delay we have ended up with this catastrophic decision," said George Osborne ( Conservative shadow chancellor).
  • Liberal Democrat treasury spokesman Vince Cable said that the right decision had been taken, though "belatedly", and that the government should have walked away from the prospect of a private takeover some time ago.
For their part, government ministers argue that it was necessary to explore other options, and provide the private sector a reasonable chance to offer an acceptable solution, before taking this step. Among other things, the thoroughness of this exploration would provide some defence against any likely legal challenge by Northern Rock shareholders.

As I have previously pointed out on this blog (decision-making, time), timing is an important aspect of decision-making. In this case, it is possible to debate not only whether the decision was the correct one, but also whether the decision could or should have been made earlier - or even later.

According to our model of decision-making (based loosely on Lacan), there are three phases in a decision.

  1. The instant of seeing - the moment it was recognized that Northern Rock was in trouble
  2. The time for understanding - a period of reflection, negotiation, allowing time for collaborative solutions to emerge
  3. The moment of concluding - the point at which all the available options are understood, and a choice must be made.
All of these are uncertain. When exactly was the instant of seeing - when the first rumours of trouble reached the Bank of England, or when the customers started queuing outside the branches to withdraw their savings? How long is it reasonable to wait for a solution to appear? At what point must analysis and negotiation be cut short? Might we have found a better solution if we had spent longer searching?

It is easy to rival politicians to claim that the Government (or any other decision-maker) got the timing wrong, and to make wild and imprecise claims about their own super-human decision-making prowess: "Oh, we'd have acted straightaway" (whatever that means). We live in a culture that values speed and instant response, and is impatient of slow deliberation.

I don't actually know whether this particular decision was taken at the best possible time, and I guess you probably don't know that either. Just look out for statements about how quickly or slowly a given decision ought to be made, and see how these statements are underpinned not by reasoning but by instinct. Which means that if other people act faster or slower than you think they should, this doesn't necessarily mean they are stupid, it may simply mean they have different instincts.

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