Does Varney have any evidence?

David Varney has been announced as the prime minister’s special adviser on public sector improvement. He is promoting the idea of services as factories, ‘economies of scale’. I wondered in the last newsletter what evidence there is for these – do they work or do they institutionalise waste? A reader wrote to tell me he and a few others had a meeting with Varney and asked for the evidence. There is none. But you don’t want the lack of evidence to stop what command-and-control thinkers think of as a ‘no-brainer’.

Varney’s ‘lean’ machine

Varney used to run Her Majesty’s Revenue and Customs (newsletters passim). As I have noted previously HMRC is doing ‘command-and-control lean’. On July 6th the Guardian reported that more than 1 million people paid the wrong amount of tax last year because HMRC either got their tax code wrong or made mistakes when they calculated their tax.A report by the National Audit Office says some £157m has been overpaid by 540,000 taxpayers – averaging £290 a time – with pensioners being particularly vulnerable to mistakes. And about £125m has been underpaid by taxpayers – averaging £250 a time – with many facing surprise extra bills when HMRC realise their mistake. The report revealed that the introduction of what is described as a car assembly line approach to taxation resulted in big increases in errors in the first six months of the operation. £9.7m has been spent on introducing the ‘lean’ system. And tellingly, the report revealed that six people now handle different parts of an individual’s tax return against two previously. So it should be no surprise that the system is producing errors. Ohno must be turning in his grave.

‘Lean’ doesn’t work either

A reader writes:

‘As a Six Sigma trained person with 10 years experience, your reporting of Six Sigma’s demise rings both true and false. You’re not wrong, just not wholly right. True in the sense that I have worked in companies where Six Sigma’s deployment was monumentally expensive and bureaucratic, and the benefits extremely spurious. False in the sense that the method now codified as ‘lean’ in most companies will also fail.

An example of Six Sigma bureaucracy is the ‘storyboard’, supposed evidence of continuous improvement – these would usually run into 100 PowerPoint slides, and method-junkie Black Belts would spend their working day reporting the delights of Measurement System Analysis (useful in high volume manufacturing, redundant in service) rather than working at the place where value was created or destroyed. They also missed the irony of expensively trained, non-value-adding-aware Black Belts spending their time writing reports rather than improving the work with the people who actually do the work.

Your account is false only in the sense that I do not believe Six Sigma alone will suffer a demise; ‘lean’ will also suffer the same fate. In a similar fashion to Six Sigma, most ‘lean’ deployments I have seen do not follow the principles of Deming or Ohno. ‘Lean’ is viewed as the ‘clenched fist in the velvet glove’ method of process improvement. In most people’s eyes, ‘lean’ = waste reduction = redundancies, this is not the intended experience of continuous improvement, but is the real outcome of cynical ‘lean’ deployments whose operating model is ‘lean’ it, centralise it, then offshore it.’

Of course he is right. This is ‘tool head’ lean, the kind of thing that HMRC have been duped into believing is ‘lean’.

The Toyota System is a system thing; it is a thinking thing, not a tools thing.

He went on to describe a number of ‘lean’ initiatives that were designed to reduce costs, a sure sign that the managers have no idea what lean is about; they are solving the problems they think they have not the problems they do have.

In Vanguard we have been discussing whether we should drop the term ‘lean’; after all, our work is to help people change the system (as Ohno did) and we wouldn’t want to be associated with the junk that is going on in the name of ‘lean’.

Hospital cheats appointments

A reader writes:

‘I had an appointment booked with a specialist at Manchester Withington hospital for 16th July and it had been booked for months. Last week I get a letter with a new appointment for 24th Sept. Puzzled I phone to find out what is going on and check the 16th appointment is still OK. It transpires that my 16th July appointment had been brought forward to 2nd July by a manager as I had breached the eleven week rule. What rule I ask – the one that says you have to be seen within 11 weeks of referral is the reply.

Great logic except no one told me of the new appointment so of course I did not turn up – hence the new appointment for Sept (11 weeks after I am logged as a no show I presume). The specialist’s secretary agreed that it was flawed logic, especially as she said ‘that all our clinics are over subscribed’.

NHS is going down the tools route

Apparently many NHS organisations are attracted to the lean tools nonsense; people tell me there are many requests for tenders for lean tools training. Tragic. We should not expect much improvement, and we should expect lots more public money being wasted.

Clients talk about success

Following the item about whether I should report successes with the Vanguard Method in last month’s newsletter, a client offers the following in the spirit of sharing success:

‘Wiltshire County Council has just completed their first systems intervention in their blue badge service for people requiring help when parking. The old system awarded blue badges between 1 and 55 days with a mean performance of 20 days. The new system, using the Vanguard Method, delivers an improved service the same day or next day (mean 0.2, UCL 1.2 days). If you’re curious and want more details, contact Dr Carlton Brand:’

I feel sorry for Carlton already. He is likely to be subjected to industrial tourism. If you feel inclined to go visit, let me remind you of something Ohno taught me: everything you need to know to improve performance is in your own system if you know how to look. Looking at W.C.C. is looking in the wrong place.

Why talking can be the wrong thing to do

Another reader writes:

‘Doing ‘check’ [the first step in the Vanguard Method] gives you a true understanding of customer demand and I’ve always referred to this as ‘customer focus’. I have come across a number of references to ‘customer driven’ on the web site and I have purposely steered clear of this phrase as people think it means that we actively consult with the customer.’

His point is calling something ‘customer driven’ is heard by other managers as meaning engaging customers in the decision making process. As he says, doing this ‘took us away from nominal value by a country mile’. He gave me a good example: involving tenants groups in deciding what should be done to a property before it is let resulted in more costs and a failure to do what the incoming tenants wanted. Tick in the box for consultation, but more cost and worse service.

He is describing a phenomenon I have lived with for many years. In using language to describe a thinking thing people hear what is said from their current point of view. If you want to change their point of view you have to give them things to do. Systems thinking is counter-intuitive, it takes doing things to discover your thinking is flawed.

Lexus has much to learn

As a Lexus driver (and big fan of the cars) I often lament the failure of their sales and service organisations to have any reflection of Ohno’s ideas. The latest nonsense is a letter I received. It told me that their ‘brand director’ had asked that I call the writer regarding my Lexus RX300 which ‘has been specifically targeted to receive a special nomination’.

Of course I smelled a rat. What car deserves a special nomination? In any event I sold this car two years ago. I called the number. When I cut through the waffle this was an attempt to sell me a new car. I was supposed to be flattered that I was one of sixty customers chosen from a database of five thousand. Of course I was not; instead I was dismayed at their inability to manage a database, disgusted at their ‘push’ approach to selling, and offended by the intrusion and lack of customer sensitivity displayed.

Lexus (and Toyota for that matter) got to number one through the quality of the vehicles, not, sad to say, through the quality of the sales or service experience.

So does Amazon

A reader sent me a marketing e-mail he received from Amazon:

‘Greetings from We’ve noticed that customers who have expressed interest in ‘Freedom from Command and Control: A Better Way to Make the Work Work’ by John Seddon have also ordered ‘Six Sigma Way Team Fieldbook: An Implementation Guide for Process Improvement Teams’ by Peter S. Pande. For this reason, you might like to know that this book is now available. You can order yours…’

Ho ho ho.