The Regulatory Policy Institute Research Group

Routine and its Limitations

The Latin root of routine is via rupta, a road opened by force, for example one cut through a forest. It came to mean a customary trek used by animals, and later one used by humans for military or commercial activities, including smuggling.

In current usage, routine generally refers to a fixed or usual way of doing things. Doctors exhort us to exercise as part of our daily routines.  The morning meeting forms part of standard office routines. In fact, routines of various sorts pervade all aspects of our lives and institutions. Alfred North Whitehead described routine as: the god of every social system; it is the seventh heaven of business, the essential component in the success of every factory, the ideal of every statesman”. In short, routine has plenty going for it. 

Yet there are hidden perils in the unconsidered pursuit of well-beaten paths. With it comes the danger of turning down the brainpower and of various defects of attention, often of the ‘no-eyed’ variety, a failure to attend to the blindingly obvious. They economise on effortful thinking, of a sort described as ‘System 2’ thinking by Daniel Kahneman, for which much less effortful, less ingenious, ‘System 1’ level thinking is substituted.

And there lies the Achilles’ Heel. Contexts change, and the route to follow may need ‘re-visioning’ via application of cognitively more difficult System 2 thinking.

So, what might we do about the apparent paradox that routine seems to be integral to our lives and to institutional stability, while at the same time being built on an intellectual fault line that can lead to its collapse?

In economic policy and regulation, the tension appears to play out via discernible temporal patterns in policy/regulatory cycles. Periods of major innovation are followed by the gradual routinization of both tasks and thinking.  Prima facie, the second stage is no more than a benign development in the division of labour, characterised by learning by doing; but the associated decay in System 2 thinking in an organisation or institution poses major risks for its performance in changing circumstances.   

For example, in the UK the establishment of new regulatory agencies as part of Prime Minister Thatcher’s privatization programme landed those agencies with close-to-blank sheets of instructions on how to go about fulfilling their newly established statutory objectives. To quote an official involved at the time: “we just made it up as we went along”. System 2 thinking was a necessity: the challenges posed called for ingenuity, imagination and, of necessity, innovation. 

Thus it was that Professor Len Waverman, based on his earlier experience of North American utility regulation, said of the British energy regulator Ofgem: “When I joined the Advisory Board I expected to find a familiar regulatory bureaucracy. Instead I found something that more resembled a university, characterised by hard-headed intellectualism” (a pun on the Herfindahl-Hirschman Index (HHI), a measure of market concentration).

Once routines are established, however, the demand for ‘making it up’ (innovating) decreases and, over time and at least in a non-turbulent economic environment, routine can become dominant and System 2 thinking marginalised.  Those whose skill sets lie in ingenuity, imagination and wide-vision perception tend to depart.  Organisational behaviour and culture default to routines, the specialism of bureaucrats.  

Then, when there is a major change in the economic/market environment and the demand for System 2 thinking spikes up, the thinned-out capacity for it is inadequate to the tasks, routines of all types being, by definition, unimaginative and narrow-visioned. They repeat themselves, following well-trodden paths. They fail to provide for speculation, interpreted as ‘looking out for the not yet seen’, a sense of the word that Adam Smith would have understood. In The Wealth of Nations, he speaks of “philosophers, or men or speculation, whose trade it is not to do any thing, but to observe every thing, and who, upon that account, are often capable of combining together the powers of the most distant and dissimilar objects in the progress of society”.

When shocks in the environment do occur, not only are ‘routinized organisations’ deficient in resources to think through their implications, they also tend not to see the pending arrival of disturbances until late in the day.  It is a case of too little (System 2 thinking), too late.

To mitigate the steady gravitational pull of System 1 routinization, what is required is an institutional architecture in which Kahneman’s System 2 thinking (which inter alia includes rigorous review of lower-level routinization) is never ‘switched off’ or marginalised and is always ‘on-call’ for decision makers.

In conclusion, one is tempted to slightly paraphrase Milton and argue that “they also serve who only stand and think”: especially in those circumstances when a piper is leading the herd on a path towards a precipice, whistling a merry tune.

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