‘Old’ factory thinking

In an article for Quality World I described the problems with the public sector as being rooted in ‘factory thinking’. A reader wrote to the letters page to correct me; this is ‘old’ factory thinking. He is right. But sadly this thinking is still the most common. In the private sector every organisation we work with is built on ‘old’ ideas. Happily they want to change – after all, they care about profit. In the public sector organisations have been coerced to adopt these ideas as ‘modern’; but they are a modern disease.

The starting-place is to conceptualise work as merely a collection of tasks. Tasks can be routed by phone (to call centres) or electronic means (to back-offices) and thus you can control the work of your workers. You measure transaction costs, for it is assumed that all activity is cost. Regular readers will know the flaws in those ideas, flaws that drive in massive costs and terrible service to customers.

When you get down into the nitty-gritty of such organisations you discover that customer demands are often broken down into work tasks which are, of course, interdependent from the customers’ point of view. But now the tasks travel alone, in the hope that if they get done within the work standards things will all arrive completed together. Guess how often that happens? Guess how often workers open work only to find it cannot be completed because a related part has been sent elsewhere and is not yet completed? Guess how often workers send letters out to customers with only part of the customer’s demand sorted?

And all of this is invisible to managers who have designed the system. They imagine as they drive down transaction costs that they are driving down their true costs. If only they knew.

And dreadful for customers

This is what happens to customers of these factories:

A reader writes:

‘Some months ago I was contacted by the Department of Work and Pensions to tell me I was eligible for the Winter fuel payment. I thought it was a letter telling me I would getting the payment and I should just wait for it to arrive.

A month or so later I got another letter asking me to respond by filling in a form and sending off my birth certificate. I duly did so. About two weeks later the birth certificate arrived back so I assumed all was well. A few weeks later I received a letter to say my application had been disallowed – with noexplanation of the reason. I phoned the number on the letter for an explanation and had a bizarre conversation with someone who agreed my birth certificate was in order but could offer no explanation of why the payment had been disallowed. I was told I could appeal against the decision so I sent off a letter asking for an explanation.

I heard nothing so after a few weeks I phoned again. This time after an initial conversation I was put in touch with another office. Here was someone I could havea rational discussion with. The problem was quickly diagnosed; the department had got my birth date wrong: 13th instead of 30th. I had corrected this in my first
communication but this had obviously thrown the system into reject mode. When I asked why the rejection letter had offered no explanation. I was told it was too difficult to tailor each letter!

Maybe there is method in their madness – perhaps the system is designed to make sure there is not a 100% take up. I was told I would now receive the payment but I would have to send in a copy of my birth certificate!!’

And would you guess this to be normal or rare?

More on HMRC’s mean lean

HMRC’s ‘lean’ programme got yet more bad publicity this month. See:http://www.guardian.co.uk/commentisfree/2008/jun/09/tradeunions.workandcareers

I have tried hard to tell HMRC’s leaders they have been led down the garden path; how the tools developed to solve problems in manufacturing have no relevance to the problems they need to learn to solve in their service organisation, and might even be making things worse. But I guess they are only concerned with doing what the regime wants. And as the failure of HMRC’s ‘transformation’ rumbles on, sources tell me the DWP is about to take the same medicine.

Spoke in the wheel of Southwest One

Southwest One is a classic example of what the regime wants – centralised call-handling for citizens of the South West. The good news is the local MP has
put a large spoke in its wheel. See: http://www.publications.parliament.uk/pa/cm200708/cmhansrd/cm080617/debtext/80617-0021.htm#08061817000002

As the MP says in his speech, there are already expensive disasters that ought to cause local politicians to hold back from this madness. But then the regime is telling them factories are good for you.

‘Shared Services’ consultant confesses

Following my pieces about shared services in the last newsletter, a reader writes:

‘Last year I wrote the business case for the Shared Services programme in a large UK Government department. The programme was ‘justified’ on grounds of economies of scale. More prosaically, it was cost-justified on the basis of notional head count savings. Notional, in that the aim is to move people from one part of the organisation to another rather than have people leave (as redundancy costs would be prohibitive).

Charged with getting a Business Case approved by a specific deadline for a programme already well underway, I started researching the claims for ‘improved effectiveness’, ‘faster processes’ and all the other benefits the programme was promising to deliver.

I infuriated the ‘solution design’ folk by asking them in what way the HR, Procurement and Finance business functions would work better with the new IT system and business processes? By how much would they be ‘improved’, ‘more effective’ and so on, in terms of numbers? How would it be measured? And why did they think there would be any improvement (particularly as they seemed totally disinterested in how the current ways of working functioned in reality… so it was challenging to understand how they reasoned their proposals would improve things – or not worsen things… except by fortuitous accident).

I was put in my place. Their answer was… the systems and processes they were designing were ‘Best Practice’. So they were bound to be better than the current. Silly old me!

With my Business Case submission deadline rapidly approaching, I had to abandon efforts to clarify or define business improvements, and resort instead to that old refuge of headcount savings… it got the continued funding approval. Mea culpa!

As you know, delivering ‘stuff’ and realising improved business results are not necessarily connected.’

Indeed. The regime is concerned with compliance with ideology, not improvement.

If you want more evidence on the failure of shared services see: http://www.theregister.co.uk/2008/05/09/cabinet_office_service_sums/

Audit Commission chief promotes ideology over evidence

The Audit Commission and Healthcare Commission have published a report saying the billion spent on choice and competition in health has not delivered any significant benefits for patients. One of the obvious flaws in the report is its reliance on data about the number of people being offered a ‘choice’ as a measure of ‘improvement’. Leaving that aside, the most astonishing feature of the report is the chairman of the Audit Commission saying: ‘Conceptually the measures should work. In the next couple of years we will know if the measures are correct.’

He is saying no more than he believes that the right things have been done. It illustrates the Audit Commission’s inappropriate role as arbiter of what good looks like. In the book I show how this behaviour has driven local authorities to do bad things.

He is also saying he believes in the ideology of the regime. It is an ideology without empirical foundation. Rather, the evidence points in the other direction.

Did your nurse smile?

The Department of Health has announced that nurses are to be scored on how compassionate they are towards patients. The health secretary, Alan Johnson, obviously believes service is a ‘smile’ thing and thus a ‘people’ thing. How wrong he is.

In any system you learn that the ‘smile-ability’ of the front-line staff is governed by their system. Just this week a systems thinker told me of an example: A study of demand in a service centre showed workers were dealing with lots of failure demand (so lots of customers already unhappy) and lots of value demand that, by design, the workers were ‘not allowed’ to service – managers had put in procedures which meant the work must be passed off rather than resolved. These two types of demands amounted to more than 80% of their work. Like Johnson’s nurses, these workers were subjected to a survey, measuring how well they ‘smiled’. To complete the wrong-doing, the survey scores lead to bonuses; so these poor workers could never earn a bonus. And the responsibility is with the managers, whose bonuses are not affected.

When you discover such absurdities in the private sector, you change things quickly. Johnson is so far away in the management factory that he will never learn the simple truth that peoples’ behaviour is a product of their system and his nurses’ inability to smile is more to do with him than them.

A ‘bed manager’ laments

A reader sent me something he saw on a message board:

‘I am a bed manager [in the NHS] and I despair at times. We are constantly under pressure to meet government 4 hour targets, yet patients are still being admitted that could have been treated by their GP or seen as an outpatient. No wonder there are not enough beds, and no wonder patients are still waiting unacceptable periods of time on an uncomfortable trolly in A/E!!!’

And Johnson wants to know if the people smiled.

Why do we have ‘bed managers’? One sure way to sub-optimise a system is to try tomaximise utilisation of equipment.

A patient laments

A reader writes:

‘In May I had my annual eye test. Everything went well and the optician recommended that I have a check up at [the hospital] to be on the safe side. The optician would write to my GP asking him to refer me and he in turn would write to the hospital. The optician also asked me to contact my GP after one week to make sure the letter had arrived and had been processed by my GP, which it had. So far, so good.

Then on 20 June I received a letter from the hospital. The hospital had practiced ‘lean’ by sending two appointment letters in the one envelope and each asked me to telephone the Eye Clinic office if I could not keep the appointments.

So on 22 June I called the office and said I was confirming the 1st appointment on the 16th July but unfortunately I could not attend the 2nd appointment on the 22 July as I would be on business in the US for 2 weeks. Therefore could I possibly have an earlier or later date? I had my diary open and was ready to proceed. The very kind receptionist said there were no earlier appointments available as that particular clinic was always very busy. No matter I said, I can come on another day after my business trip. Then she told me that was not possible because they would not meet the targets which had been set and I would have to contact my GP to start the referral process all over again. When I gently pushed her on the matter she said she could not help and they had to meet their targets.

On speaking to my GPs receptionist (4 telephone calls, numerous voice messages andbuttons pushed later) was told ‘oh, that is the NHS targets again, the system does not work.’

And Johnson wants to know if the people smiled.

A mother laments

A reader writes:

‘My child was referred to an orthodontist. After waiting two and a half years, an x-ray revealed un-erupted teeth that need hospital extraction. A week after the referral letter was sent, I was required to ring the call centre to get an appointment. They told me they did not actually make the bookings, but the dental bookings staff would ring me back. Later that week, a letter arrived with an appointment date which my child could not attend due to a school trip. I rang the number on the letter, got a new appointment and enquired about the telephone call I had been expecting. I was told that ‘we have to ring three times and if no-one answers we just send a date’. They had rung three times one afternoon when I happened to be out. What’s worse is that this appointment is for yet another assessment by yet another dentist and we will no doubt be back on the merry-go-round just to get a treatment date.’

She went on:

‘My child has a long term requirement for podiatry services. His review dates are dependent on how fast he grows; we ring the call centre for an appointment. On one occasion I was told ‘the system’ had discharged him and we needed to go back to the GP to get re-referred. (I refused, we did get an appointment after I was warned not to leave it ‘too long’ again). On another occasion the call centre booked him into a different clinic. I queried this and was told ‘It has changed. We have to book according to where you live’. We attended this clinic and after being reviewed the podiatrist told us she was ‘not allowed’ to prescribe this type of device as they were ‘too expensive’. So instead we had to go to a different clinic, see another podiatrist and get the expensive devices replaced using an even more expensive process.’

And Johnson wants to know if the people smiled.

A spouse laments

A reader writes:

‘Some 3 years ago the NHS had an initiative called agenda for change, which resulted in most people being down graded and getting a pay cut. Naturally they all appealed – this took 18 months of NHS time and cost a fortune – and most got pay increases on appeal. Now the bad news – the NHS did not pay the increases, and in some cases still haven’t.

So in my wife’s case, many e-mails to the trust’s CEO resulted, after about 6 months, in the back-pay being approved. Incredibly, in spite of the CEO instructing a senior manager to get it sorted, it still took months. Estimates of the back pay due were wrong, and so the mill kept grinding.

Worse to come! People who retired 18 to 30 months ago were paid a pension based on the incorrect lower salary. Getting the pension sorted out is proving impossible because payrolls were outsourced. The NHS blames the payroll Company, they don’t answer their phones, and an e- mail sent 3 weeks ago is unanswered.’

And Johnson wants to know if his wife smiled.

‘Lean’ advice on meeting targets

Working with a housing organisation we learned they had previously employed the services of a ‘lean’ consultancy. To improve attainment of targets the consultancy advised staff to trawl through repairs which had been allocated to ‘urgent’ (to be done in 7 days) and re-classify them as normal (to be done in28 days). Hard to believe they could be so stupid? But you can see how it would appeal to a command-and-control thinker.

And just for the record, systems thinkers get ALL repairs done in a matter of a few days. Watch out for the lean tools fools.

What is the purpose?

A systems thinker working in a local authority writes:

‘In the last couple of weeks I’ve had some really interesting comments back from service areas which I’m working with that shows the futility of the old ways but also backs up the observation in your book that nobody has the power to act:

‘Jim, the problem between us is that you think we are here to provide good customer service. We’re not. We are here to meet targets.’

‘I can quite see that a third of the data we collect we collect from clients is never used, but if it isn’t recorded we get a bad inspection, with hell to pay’.