On Purpose

Most of what is written about business purpose is preachy waffle. Blame in part Jim Collins and Jerry Porras, who in their 1994 Built to Last discovered that a group of ‘visionary’ companies – as they dubbed those with a purpose beyond maximising profits – made more money for shareholders in the long term than those that had shareholder value as their central aim. To systems-minded managers it would be no surprise. But conventional thinkers have almost comically misinterpreted the findings, sending managers off to look for a pot of gold at exactly the wrong end of the rainbow.

Purpose is important: not as a summons from on high – ‘an aspirational reason for being which inspires and provides a call to action for an organisation and its partners and stakeholders and provides benefit to local and global society’, as a recent consultants’ report reverently had it – but on the contrary, as a practical guide for what to do on Monday morning.

Purpose is not an aspiration to inspire workers to greater discretionary effort. It is why someone does something. It is at work at every level of every organisation. It’s also the reason an organisation exists and what holds it together. ‘A system must have an aim. Without an aim, there is no system,’ said W. Edwards Deming. Yet it’s too often invisible, un-thought about, or taken for granted.

When Vanguard was first exploring how systems ideas worked in services in the 1990s, its consultants were faced with a puzzle. Most of the organisations they worked with were both inefficient and ineffective. But although they were stuffed full of failure demand, they couldn’t see it. Often their measures were telling them they were doing a good job, at the same time as angry customers were saying the opposite. Why?

Unravelling the mystery, Vanguard concluded that the reason the measures – KPIs, targets, service levels, activity measures (time to do something, number of rings to pick up the phone), traffic lights – were misrepresenting reality was that they were no longer acting as measures. Instead they had become the de facto purpose of the activity. Watching people at work, it was clear that their effort and ingenuity were devoted not to satisfying the customer, but to satisfying the manager by hitting their numbers – often at the expense of the customer, as when a service agent reclassified a difficult case, accomplishing nothing for the customer but enabling the clock to be restarted. The frenzy of sorting, classifying, reclassifying and moving of hospital A&E patients as they approach the four-hour waiting time limit is a case in point. Rather than breach the wait target, managers will often admit non-urgent patients to hospital even for the briefest stay, a massive waste of hospital resource.

Focused on a pre-determined outcome, measures like this are the control mechanism of C&C management. They are used to secure accountability, not learning. But that’s not all. Having become the purpose, the measures could also be seen to be dictating working methods that were designed not around customer needs but to meet management’s reporting requirements.

The implication of all this? The relationship between purpose, measures and method is systemic.  It’s always there, and it profoundly affects how organisations act, even if they aren’t aware of it. In a nutshell, using metrics for control, C&C managers deploy arbitrary measures (targets and standards) which become their own purpose and restrict methods to those that suit that purpose. If on the other hand measures are derived from purpose (from the customer’s point of view) – typically urgency or accuracy of delivering something or both – and used by those doing the work, then their ingenuity is brought to bear on doing the job better. In other words, measures related to purpose liberate method.

The tight purpose-measures-method relationship is an important insight. It explains why a five-star service in managers’ eyes is a no-star service for customers and why top-down interventions aimed at improvement do the opposite. To adapt Russell Ackoff, it’s the difference between doing management right (in which case each incremental improvement makes it righter) and doing management wrong (in which case each incremental effort to make it better actually makes it wronger).

To see why, take an example which graphically illustrates the extraordinary effect of liberating measure and methods from the grip of the corrupted purpose imposed by C&C management : in Vanguard’s terminology, people-centred services.

People-centred services are what people call on when in trouble or their life goes awry: police, fire and rescue, health, mental health and a huge number of care and voluntary services (domiciliary care, day services, respite care, residential, nursing, children’s mental health, learning disability, adult mental health, sheltered housing, physical disability, carer services, drug therapies, obesity services, smoking cessation, and sexual health…). Each has its own organisation and budget. Their measures invariably relate to budget control and activity management (assessment and referral), and their purpose has duly become complying with budget and making assessments and referrals. In turn, their methods are about accounting for money spent (numbers of referrals and assessments, irrespective of outcome) and rationing service provision, whether by lowering quality, creating thresholds or otherwise ‘managing demand’.

Such measures effectively turn ‘helping’ services into their opposite, a service designed to help as minimally as the rules allow. But they don’t stop needy people wanting help, so they also turn it into a factory for failure demand. Those in need simply re-present at a different door until they find someone who will listen. Looked at from this perspective, the 5,000 ambulance call-outs reportedly made by a single individual in two years must be the most expensive unanswered cry for help in history.

Many local authorities have reached a similar conclusion. Tired of beating their heads against the futility of current methods, they have reframed the purpose of their people-centred services in the most inclusive way possible – to help people get their lives back on track. Ambitious? Yes, for C&C managers. But it makes intuitive sense. So do the measures and methods that follow on behind it.

The purpose is the measure. And since understanding demand is the single most important factor in designing an effective response, to meet the purpose the priority is to listen – to understand the context and establish what matters to the person involved.

Establishing what would be a good outcome and what would it take for people to take control of their life again takes time – but not more than repeated referrals and assessments in the conventional setting. At that stage helper and individual can determine what extra assistance they need to get there. The answer may be family or community. It may or may not include specialist expertise, which is only used when called on and proportionate. It may be a simple physical aid: installing a shower, improving lighting in a dark area, or making it easier for a less mobile mother to get upstairs to keep turbulent children in line.

For helped, helpers and the organisation, the change is seismic. The helped are no longer passive recipients of predetermined service packages that may or may not fit their problem; instead they are given back agency and a measure of control over their own lives. Helpers can see if they are helping or not. As for organisations, they discover that most resource is consumed by a small number of repeat users (something that only come to light when failure demand is made visible). As those cases are understood and dealt with in context demand on the service falls – for one local authority from 8000 cases a year to 3000. As a result it has underspent its adult care budget for two years – unheard of in today’s era of cuts, rationing and austerity.

This can only properly be described as revolutionary: management beyond and far better than command and control.

It’s hard to overestimate the importance of the relationship between purpose, measures and method. Purpose on its own, without its hidden sidekicks measures and methods, is just spinning words. Measures and methods on their own are corrupt and misleading. Understanding the relationship and using it to positive advantage is the step first step to anchoring beyond command-and-control management.

Simon Caulkin, award-winning management journalist