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A friendly picnic

I went to the Department for Communities and Local Government for a ‘picnic policy lunch’. It attracted, the organisers told me, a larger than usual audience and to my surprise it was like being amongst interested intelligent friends. Despite the fact that I was telling them they should cease creating policies which dictated service design and they should be wary of ideological notions for which there is no evidence, they listened with interest to examples of their efforts making public services worse. No one set out to defend the status quo, even though my thesis was that they are systemically incapable of developing evidence-based policy. They even listened with interest to my views on how they – the centre – should change to foster innovation.

It was a powerful illustration that it’s the system, not the people. They invited me back; I’ll be pleased to go.

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One angry man

Immediately after the picnic a blogger blogged some nasty comments about me. It transpired he is from a think-tank, the New Local Government Network (NLGN). How he got in to the picnic I don’t know, but clearly he was not happy. Maybe it was due to what I had said about the millions being wasted through IT-led industrialised shared services, which the NLGN is promoting with gusto.

The NLGN has published a ‘report’ and ‘tool-kit’ for sharing services, which they sell for £12. My head of research bought it; his advice is: it is worthless. The ‘tool-kit’, he says is not really a tool kit but a collection of vacuous management-speak. I asked my head of research to check out whether the NLGN had any evidence of savings from sharing services. None; like DCLG, they don’t let lack of evidence get in the way of ideology. All the savings claimed are projected in plans. Ha.

To repeat, in case readers think I am anti sharing services: The right way to share is study, then improve each service in situ, then see whether further improvements can be gained through sharing. You get massive efficiencies in step two from economies of flow and minor savings from less of a common resource in step three. By contrast, the NLGN adopts the common approach which leads to massive inefficiencies through industrialisation (‘scale’ – reported wrongly as efficiency through lower transaction costs) and minor savings from less of a common resource.

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Innovator slammed by numpty inspectors

Next week Owen Buckwell is to be feted by Gary Hamel for being the first to develop an on-time-as-required repairs service for his tenants in Portsmouth. It is an economic benchmark illustrating profound counterintuitive truths.

Of course if you want to find the antithesis of profound thinking and extraordinary improvement, look no further than the Audit Commission (not dead yet). The tick-sheet numpties reported on Portsmouth last month, giving Owen a big thumbs-down. If you read the report (I recommend you don’t waste your time), you will see incompetent recommendations like bring back choice-based-lettings and join regional lettings schemes, which all systems thinkers know will drive up costs and damage service and recommendations to improve tenant mobility, for which there is no demand (except for that in the minister’s dreams).

Not dead yet and still spreading disease. The sooner we shoot the Audit Commission the better.

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CPA: the truth is out

The Audit Commission put out a report which crowed about the efficacy of Comprehensive Performance Assessment (CPA), claiming it led to improvement. Well they would, it was their bread-and-butter and, of course, they did the ratings, so easy to fix ‘improvement’. But research just published by Warwick University paints a different picture, concluding that CPA failed to improve efficiency, its key aim.

In poor areas, with higher proportions of people receiving jobseeker’s allowance and incapacity benefits, the impact of CPA was worse than average, with efficiency actually declining over the programme’s life.

You can read the research report here;
http://www2.warwick.ac.uk/fac/soc/economics/research/centres/eri/bulletin/summerterm2011/

As regular readers know, I have published copious examples of adherence to Audit-Commission tick-box requirements driving up costs and worsening service and, what’s more, sent them to the Audit Commission’s chief. And what did this public servant do about it?

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Health in trouble in Alberta

I was sent a report on Alberta’s health care system; it could easily have been written for the UK. Top-down ideological nonsense leading to massive sub-optimisation and when in trouble what do the ministers do? More of the same. Read the paper here:

http://www.converge-group.net/620/

We are studying health. The scope for improvement is significant. As we travel on we intend to blog about what we are learning. If you want to receive these blogs please register your interest with Andy Brogan: Andy.Brogan@vanguardconsult.co.uk

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HMRC in the news again

Never an organisation to fail to be in the news for making mistakes of enormous proportions, HMRC does it again. This time massive complaints about the failure to have people in call centres who know about tax, increasing the transactions it takes to get a service and increasing errors. In short, all bad news. It is a blog of the most recent Treasury Select Committee meeting. You can read it here:

http://wimpress.wordpress.com/2011/02/08/the-hmrc-and-the-recovery/

Regular readers will know that HMRC’s shockingly incompetent lean programme is central to their troubles, yet it is endorsed by an academic (who prevented me from speaking on a major platform in Scotland); important because HMRC senior managers point to the endorsement as confirmation they are on the right path. They are on the wrong path.

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Private-sector did it first

In case HMRC managers feel alone in being so incompetent, the industrial design they are pursuing has been common and always fails in the private sector. Of course many private-sector service organisations have yet to wake up. Here is a note from a worker in one such to illustrate the point:

‘I work for a major utilities company in the contact centre and trying to convince management their methods and measures are all wrong is becoming increasingly frustrating. A newly released statement of ‘strategic objectives’ includes one to reduce call volumes (fine, in principle) and reduce AHT [average handling time], even giving a target to reduce it to (based on what?). A major challenge, given the agents are currently measured on ‘talk time’ which encourages them to make calls last longer to meet the target, or put customers on hold to other departments.

Coaching is the answer, say management, so let’s make some of the team managers coaches so the agents can work on empathy skills! No one thinks to question the types of calls, or other factors which might be significant. So let’s work on the agents… Team managers are obsessed with checking work standards, how long someone has taken to go to the toilet, ticking compliance boxes and filling in forms.

Because of the above and other productivity targets, agents hand off complex work to ‘experts’ where it sits in queues for who knows how long. Meanwhile customers call back and ask ‘what happened to my query?’…there’s no visibility of end to end times, as the two departments are separated, and in different parts of the building. I undertook some demand analysis, and failure is at 73%.

But if we reduce AHT and do some coaching, everything’s going to be ok.’

Quite so, and the worker is aware of the problems: controlling AHT, managing people and failure demand, all mistakes made by HMRC’s managers. If HMRC managers just studied demand they’d get a shock. But they’d be making a start.

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Out-sourcing drives costs up

Conventional managers think activity equals cost. The same logic leads to out-sourcing work to ‘lower-cost’ providers. These out-sourced contracts are based on transaction volumes, so it works in the suppliers’ favour for failure demand to rise (after all, their clients clearly don’t have a clue about it). But worse, a recent report says out-source providers make up work to increase their billing:

http://www.channelinsider.com/c/a/Managed-Services/IT-Pros-IT-Outsourcing-More-Costly-Than-Expected-362736/

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Someone should have told Birmingham

Birmingham council has out-sourced it IT support to India, oh dear…
See the news here:
http://www.dailymail.co.uk/news/article-1393414/Job-loss-fears-council-outsources-100-posts-India.html?ito=feeds-newsxml

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SW1 lurches even further into trouble

Southwest One, the joint venture between IBM, Somerset County Council, Taunton Deane Borough Council and Avon & Somerset Constabulary, launched in 2007, is in the news again. When it was launched the plan was to save £192m by sharing back-office functions. This, like most, is a contract set up on transaction volumes/costs.

So far SW1 has recorded a pre-tax loss over its three financial years, with the last loss being £16.5m, but managers claim to have made £3.3m in cashable savings. Clearly I need to learn accounting, how can you make ‘savings’ at the same time as making thumping losses? Beyond that, it is reported that a problem with its accounting system has led to duplicate payments (worth £772,000) and £12.9m in outstanding debts. The calamitous failure is only matched by HMRC for speed.

Meanwhile SW1 leaders maintain that it can still achieve the promised savings.

I wouldn’t buy any shares.

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Aussies make the same mistakes

A shared services project originally designed to save taxpayers’ money has cost a staggering 489 million Australian dollars for little or no benefit. It’s as bad as one of ours. You can read the report here:

http://au.news.yahoo.com/thewest/a/-/breaking/9337775/state-agency-wastes-millions/

You may be aware that I am going to Australia in late August, in part to speak at a public-sector conference on why these failures occur and how to design services to drive down costs while services improve. The conference information is here:
http://www.iqpc.com/Event.aspx?id=522868

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It’s not the people, stupid

Returning to the problem that managers think they should manage people, a reader sent me this. A bank is training staff in ‘The One Best Customer Experience’. The big idea is that the best customer experience engages the 5 senses. To engage the customer’s 5 senses staff are told to: Shake the customer’s hand when they come in for an appointment and shake it as they leave (touch); play the bank’s own radio station in the branch (sound); make sure that all branches look exactly the same so the customer knows what to expect (sight); make sure the aroma plug- in is topped up and working (smell) and ask whether the customer drinks tea or coffee and have a cup ready for them when they arrive for an appointment (taste).

You couldn’t make it up. If only the leaders knew the futility of this; in Deming’s terms it’s working on the 5%. I wonder how much money they are wasting doing so.

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Eat out in Great Yarmouth

And so to some good news. The people who look after environmental services (making sure restaurants don’t poison you) in Great Yarmouth studied their system and re-designed it. Well, nothing new there for many have done that with all local authority services. But this one is worth a mention because the regulator was invited to take an interest as the re-design meant moving outside of the current regulatory rules. And the regulator said yes. A regulator that is persuaded by knowledge (unlike the AC). Eat out in Great Yarmouth, its safer!
You can view the story here:

https://www.vanguard-method.com/v1_lib.php?current=719

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Care services

We ran a day in Buckingham on what our clients are learning about care services when they are studied as systems and the principles and practice of re-design. Where re-designs have been established the results are profound. The only fly in the ointment? Regulation. But we’re on the case. The summary of the day is here:
https://www.vanguard-method.com/v1_lib.php?current=526