‘policy-based evidence, not evidence-based policy’ : John Kay speaks

by Julia Evans on October 16, 2012

Full quote: ‘These commercial decisions often reflect policy-based evidence, not evidence-based policy. Doing the deal is what matters: …. ‘

Quoted from: The brashness and bravado in big deals by John Kay: Financial Times: October 16th 2012 : Available here

This will also be posted to John Kay’s web-site, soon: http://www.johnkay.com/articles

Comment: Now transfer the above quote to the Government’s risk-free, totally protected, Mental Health clinic which is guaranteed to produce wellbeing, health and probably happiness.  Look at posts since July 2012. The CHRE/PSA are there to guarantee the ‘standard’ of treatment given in the Government’s contracted-out, for financial gain, clinic for those with ‘mental health issues’.  This is designed by the Government’s health guru, Lord Layard, a retired professor of economics at the LSE and enshrined in legislation since 2001 to July 2011.   [For Lord Layard’s latest. policy-based evidence, pronouncements – see ‘We need a new mindset on mental health’ by Richard Layard, Financial Times, September 11th 2012: available here .]

The deal will be done at the end of November, (see my posts in previous years about the Savoy conference), based on policy-based evidence.  It is a commercial decision as the Government thinks it can transfer most of the financial burden of its mental health clinic into the private sector by its contracting out process.  I recommend you read John Kay’s complete article and here is a selection:


I once thought that however thin the public arguments for large corporate transactions, there was probably some serious analysis going on behind the scenes. Just as I once thought that whatever nonsense politicians might talk on public platforms, more substantive discussion took place when they retired to their offices.

But closer acquaintance with business and politics dispelled both illusions. What you see and hear is more or less what there is. When I was sometimes employed to explain the economic rationale for a corporate transaction, I discovered that it was rarely useful to ask the principals why they were doing it. Usually you just heard those familiar clichés. Sometimes you got closer to the truth, sniffed the testosterone, glimpsed the inflated egos.

And, of course, observed the fees earned by the cheerleaders. Dick Rumelt provides a hilarious account in ‘Good Strategy/Bad Strategy’ of an investment banker explaining the shaky logic of a planned merger …  The tone of the banker’s account – at once patronising and ignorant of fundamentals of business economics – rings all too true.

These commercial decisions often reflect policy-based evidence, not evidence-based policy. Doing the deal is what matters: business autobiographies frequently congratulate their authors on the speed and decisiveness with which their big deals were consummated. Justification comes afterwards; the PR advisers prepare their fluff and analysis is undertaken by planners and consultants who understand the answers expected by the people who pay their salaries and their fees.


The other threat to the deal came from the English market town of Henley, where BAE’s largest shareholder, Neil Woodford of Invesco Perpetual, is based. [JE very much identifies with Mr Woodford – see any of my contributions, from January 2007, to Government CON-sultations]

Mr Woodford epitomises the style of fund management favoured in the review of equity markets and long-term decision making I (John Kay) completed this summer – … Mr Woodford criticised the deal, having presumably failed to obtain in private the explanation of its underlying rationale that he then sought in public. There needs to be more such interrogation, to help distinguish sound bites from sound strategy. [JE:  Hear! Hear!]

Comment: So how are you going to bring the Government’s underlying rationale for its risk-free, protected provision of treatments to provide well-being, health and happiness?  Why not start by committing to the following?

Invitation: The Future of Counselling and Psychotherapy: Sunday 2nd December  or here

Programme details: http://www.allianceforcandp.org

Please let the Alliance know if you plan to be there: info@allianceforcandp.org