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A campaign is born

Last week I spoke at a conference alongside a representative from the DWP, who was there to outline how housing benefits is going to be rolled in to the new Single Universal Credit and how this is going to be delivered on-line and through call centres. As you may imagine, I made the case that this was going to fail; you can’t deliver high-variety services through ‘cheaper’ transaction channels, instead this will drive the costs up.

The audience – housing benefits managers from across the country – decided something had to be done. I agreed to write an open letter to Iain Duncan Smith and Lord Freud, the ministers responsible, as the start of a campaign to call a halt to the current plans and, instead, to embark on a better (systems) approach.

You can read the open letter here: https://www.vanguard-method.com/v1_lib.php?current=920

I would encourage anyone who cares about ministers wasting millions on such ‘economy of scale’ follies, and especially those who know there is a better way (as I describe in the letter), to add their voice to the campaign.

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HMRC does it again

HMRC is in the news yet again, this time admitting that a further 450,000 people will be told that they paid too little tax, and owe an average of £400 each. In the last newsletter I mentioned that I’d been asked to provide evidence to the Treasury Sub-Committee looking into HMRC’s failures. It has been published; you can access it here (look for number 27):

http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtreasy/memo/hmrc/contents.htm

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NHS hooked on the same drug

NHS leaders are also hooked on ‘scale’ ideas. One, John Neilson, is arguing for GP surgeries to out-source appointment-making to India. Completely bonkers, but as boss of NHS ‘Shared Business Services’ that’s his job. You can get the story and a feel for the opposition it has engendered here:

http://www.pulsetoday.co.uk/story.asp?sectioncode=23&storycode=4128134&c=2

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Minsters think shared services is a no brainer

Sadly, ministers at the Department for Local Government still bang on about sharing services being a way to achieve efficiencies. My favourite shared services folly, familiar to regular readers, is the Department for Transport’s. The latest news is that it is costing £170m; it was originally planned to save £57m! So you have to ask: why do ministers think others won’t go the same way and waste millions?

Lest people think (as some apparently do) that I am against shared services, I am against using scale ideas for sharing services, economy is achieved through flow, not scale. To avoid repeating the practical issues in this distinction, I explained how to go about sharing services to achieve massive improvement in last October’s newsletter (see the item: the fallacy of scale): http://vanguard-method.net/october-2010/#4

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DWP call centres ‘living hell’

The DWP, architects of the Single Universal Credit to be delivered on-line and in their call centres, have built classic sweat-shop call centres. Life for workers is so bad – described as ‘living hell’ – they are taking industrial action. My advice to the unions is: it is easy to prove that 95% of variation in workers’ performance is due to the system and thus these sweat shops fall foul of human rights legislation. One day someone will take up this cause; it will be a landmark.

You can read one insider’s account of working for the DWP here:

http://www.guardian.co.uk/commentisfree/2011/jan/21/call-centres-department-work-pensions-strike

Last week I visited one of our private-sector clients. I met a front-line manager who was extraordinarily articulate in her account of the 95/5 phenomenon: how she didn’t believe it when she was first told, how she leaned the truth by studying her system and how she now working on the 95%. I was so struck by her clarity that I’m going back there with a camera; I want to post a video on the web for the education of others (especially managers in the DWP and HMRC).

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Lean on the wane

The DWP has been led down the garden path by ‘lean’ consultants who buy into the idea that all work is activity to be managed and thus have no idea that measuring and managing call centre worker activity is, quite simply, the wrong thing to do (it is working on the 5%). When this and other fundamental mistakes become more broadly understood the lean tools fad will end.

Lean tool-heads working in health have published a lament on their failure to achieve sustainable change and their view is that lean doesn’t have to change but management does! When you read what they say about the management problem it is clear the tool-heads are unable to re-think management; they see management as making policy and setting targets, actually saying that the latter are ‘motivational’.

In the private sector there are many organisations that have disbanded their lean initiatives, I wrote about this in ‘Lean is a wicked disease’ (last May, available from https://www.vanguard-method.com/v1_lib.php?current=446). It is of little surprise that the waning is happening first in the private sector – they are driven by profit.

I have never known a management fad attract as much opposition. But hold on, the chief tool-head in the US now claims that ‘lean is systems thinking’. Oh, that’s all right then!

We have been filming people who were trained in tools and believed the hype, until that is, they discovered systems thinking. The working title is ‘I used to be a tool-head but I’m alright now’. Watch this space.

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The penny dropped

The following was received at our public-sector web site:

‘I’m a reader of the systems thinking review, and a trade union rep in the public sector with responsibility for a helpline. I find myself arguing with managers who are keen manage performance using metrics for advisor availability, utilisation, call length, and adherence to roster. I recently had one of those moments where the penny drops; it was in relation to the management of efficiency.

I was staying in a Hotel, a 20 storey building with two lifts. The restaurant was on the 1st floor, and each morning I would travel down from my room on the 14th floor to the restaurant for breakfast, afterwards I would return to my room to brush my teeth and pick up my papers, and then travel down to ground level and go to my training course. For most of the week one of the lifts was out of order, and the service from the single lift was pretty rotten, you had to wait and wait, usually with other hotel guests stood around tut-tutting and sighing.

Towards the end of the week the second lift came back into service and I noticed something surprising (to me at least.) With two lifts I’d expect the service to be twice as good, waiting times to be halved. But the improvement seemed much better than that. Basically you pushed a button and the lift came. The improvement was huge – though I can’t say I stood around with a stopwatch gathering detailed stats on how two lifts performed compared to one.

As I thought about this, something else occurred to me. The single lift system was much more efficient than the two lift system, from the point of view of the lift and the use of ‘lift resources’. With one lift out of order the remaining lift was in nearly constant motion. It started at the bottom picking up passengers waiting in the underground car park, then at street/reception level and then at the restaurant on level 1. It then travelled upwards, dropping the passengers off at their floors. Once it reached the top it changed direction straight away to start picking up the passengers who were by now already waiting to go down, stopping several times to pick up a number of passengers, and of course dropping them off at various lower levels. The lift was highly ‘available’ it was working all the time, and it was highly ‘utilized’ maximizing the number of passengers riding on each journey. But as I said before the service was pretty rotten for the passenger.

Improving the efficiency of the lift would not improve the service to the passenger at all – in fact it could only make it worse.

For me it was one of those – ‘Oh now I get it’ moments.’ One lift represents economies of scale, two lifts economies of flow. Concentration on individual unit efficiency can lead to a worse service, and if you try to improve things by going further down the route of more and more efficient use of resources, service will get worse and worse.’

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Are academics about to revolt?

UK academia has been subjected to ‘modernisation’, which of course means top-down targets and compliance with dumb prescriptions which only serve to undermine the purpose. A reader alerted me to a thorough critique of the same, will academics get organised to fight it? I hope so. See the article here: Grim threat to UK universities

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Systems thinking in care services

As regular readers will know, we are submitting evidence to the Munro review of children’s services and we have substantial evidence of the value of taking a systems approach to adult social care. We are putting on an event to share all of this knowledge and practice, in conjunction with Birmingham University. The day will include how to study care services as systems, what is learned, how to design for much better service and how these designs also deliver large efficiency gains. The date is Tuesday May 10th. To register your interest: pr@vanguardconsult.co.uk

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The better way to develop IT

Over the last year I have been invited to talk to quite a few IT audiences. IT developers are an interesting bunch. They get frustrated that much of what they do doesn’t work and are cognisant of the fact that one primary cause is management thinking, which of course becomes embedded in IT ‘solutions’. One conference filmed my presentation, you can watch it here:

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Derby action-learning programme

The highly successful Derby action-learning programme (successful in that participants are able to do very useful things back at work) has places available on the next one. See:
http://www.derby.ac.uk/dbs/systemsthinking?csId=&courseQuery=systems+thinking

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A new book

Another book of case studies has been published, this time with a more academic treatment. You can find out more here:
http://www.amazon.co.uk/Systems-Thinking-Practice-Private-Studies/dp/0230285554

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Video on targets

While ministers have dropped targets, do they know why targets were a bad thing? This question led us to make a short animation. You can view it here: http://www.youtube.com/watch?v=pfcVwIcRxxM