Incredible CRM

I got a phone call from someone telling me there was a big stink around his local authority’s use of a CRM (customer relationship management) system. He told me that any caller who wants a service has to go through the pain of a long survey because the CRM system requires data input. So, for example, you ring up to ask for a special uplift (collection of junk) and the service agent wants to know your date of birth, who lives in your house, their ages and so on.

It will not surprise you to learn that the local authority service agents hate it, the customers hate it and the situation is so bad that some elected members have formed a rebellious group, refusing to give information when asked.

Why is this nonsense going on? Because people in government and their agencies (for example IDeA, which I often refer to as ‘no idea’) think CRM is a good thing. They are just plain wrong about that. It is a huge waste of public money and makes service worse and more costly.

I received a request to tender from a County Council in the Midlands. The tender document said they wanted help to introduce a CRM system. I called the senior manager responsible, my first question was: What do you know about Vanguard? The answer was, effectively, nothing, but someone had said we would be good to add to the tender list. [In truth if they knew about what we do there would not be a tender list, for no one else does what we do; and my usual response to tender documents is to write back and tell them they are asking for the wrong thing] I asked: why do you want a CRM system? The answers were: we need to comply with minister’s requirements, the IDeA advises us to do so and it would be better if our IT systems talked to each other.

So I gave her a quick run down on the typical volumes of failure demand hitting county councils (she had no data for hers of course), the wasteful consequences of turning this in to ‘work objects’ as her tender sought to do and the better way to improve service, reduce cost and minimise the use of information technology to that which is useful; a reduction of waste, better service, lower cost alternative to what she wanted to do. I also pointed out these was no evidence that CRM systems are working in local government, there is massive cost in setting them up, populating databases, costs and problems with keeping databases up to date, and no evidence that there is any value in having a complete view of the customer as customers do not expect the various council services to be ‘joined up’.

I think you can guess what she is doing. It is not about improving services and reducing costs, it is about doing as you are told.

I read of cost estimates as £3 – 7m per installation, and those will be only the knowable costs. Incredible. Ministers should get out of management.

Get a tick? It makes you sick

It won’t surprise you to now many of Vanguard’s local authority clients challenge their inspectors. It occurs for the simple reason that Vanguard clients have genuine knowledge of operations (gained through check and re-design) and have an informed view of the value of their inspector’s demands. Inspectors, on the other hand, have little or no knowledge (plenty of opinion) and have to do as they are told; look for the things someone wants to see, regardless of their value to the operations.

Here is an e-mail from a client who took on her inspectors:

“We met with the Department of Work and Pensions Housing Benefit Security Division. To cut a long story short we have bowed to them so they can get a tick in their box and have agreed to do the Verification Framework (VF) for Review claims only. The bizarre thing is that the VF Security Manual, which is the ‘bible’ for VF, states that the minimum requirement to review a claim is to obtain details of only those circumstances that the claimant has told us have changed……….so if the claimant says their earnings remain as they were before, VF guidance says we don’t have to ask for proof of this. Unbelievable, and I told the DWP guy so when we met. We also asked him how, by doing VF, this improves our efficiency. Needless to say he couldn’t comment.

We are one of now only 23 Local Authorities who aren’t compliant in any of the 3 modules. I have done another study based on the current requirements for Reviews & have concluded that as we are doing MORE than VF requires, and will continue to do so by confirming all the facts of a claim rather than those the claimant elects to tell us have changed, it won’t be onerous for us to give them their tick in the box for this module.

However, I have made it explicitly clear to the DWP that we are not going to bow to their pressure for the other 2 modules, which will require extra staff & give us absolutely no improvements in our systems at all.

I have asked them on several occasions for proof & statistics of how VF reduces fraud and error. Not surprisingly, they simply cannot answer this because there IS no proof.

So, we have ‘rolled over’ in my view, but have only done so to stop them harassing us. It’s ridiculous that money is being thrown at us to take on a system that has never been proved successful in reducing fraud and error, and that elongates the claim process with its red tape. And all because some civil servant had an ‘idea’ 8 years ago that this was the solution to reduce fraud. I hope some other civil servant has the bravery to admit they got it wrong, one day.”

And she goes on to say:

“If you want to name me in your next newsletter re the article on VF, you are more than welcome to. It may prompt other Local Authorities to contact us if they feel the same about what a waste of space it is.”

So here she is: Karen Taylor, Benefits Manager, Tamworth Borough Council Tel 01827 709529

I think we should ask for the evidence – proof that it works – for all government specifications. In every public sector service we have helped to improve we have found the specifications to be part of the problem and not part of the solution. We should hold the ministers responsible.

Consultation is not knowledge

Because of the sort of problems Karen describes above I have written to ministers and heads of quangos to suggest that my clients meet their policy makers, for the clients can give clear examples of where policy is flawed and how, in ignoring guidance, they have improved performance. This, after all, is what government wants. I tell them we have examples of applications in many public sector services, all of which show outstanding improvement, and I suggest that policy ought to change to accommodate rather than obviate such improvements.

The answer I always get is ‘we have our consultation processes’ [That’ll be a ‘no’ then].

So you take a look at their consultation processes. You find middle managers from public services being involved in reviewing questions like: ‘are these the right performance indicators?’ – which can only lead to doing the wrong thing righter. They are not asked to consider whether the indicators have any value, whether they are the right thing to do. You find the holders of ‘management factory’ jobs in organisations and associations of many types lobbying their views, but such views are only likely to be based on the status quo. You find powerful lobbying and participation from commercial interests, those who want to sell IT, take out-sourced work and so on. Their claims that what is good for the private sector will revolutionise the public sector will appeal to ministers. But will they bake bread?

The consultation process needs to change to addressing ‘what works?’

Evaluating Vanguard in Housing

As regular readers will know we agreed to run three ‘pilots’ in Housing Associations which have been evaluated by a panel consisting of people from the Office of the Deputy Prime Minister, the Audit Commission, Housing Associations and a leading systems academic. The Northern Housing Consortium, who put it all together, is running two events to announce the evaluation panel’s findings. The events are on April 12 in London and April 14th in York. Places are free but limited. To apply for a place contact Nigel Johnston:

The tool heads are out there

Lots of people have been downloading the ‘tool heads’ paper. If you haven’t read it you can find it on the web site: Some readers have taken the arguments to their local tool heads.

One wrote that the paper was: “music to my ears. I was just involved in a discussion about lean in the office at the headquarters here in XXX. I got the distinct impression that they [tool heads] were trying to make the system fit the tools. No one seemed to be asking any questions beyond ‘how many different places can we use these lean tools?’ Too many ‘answers’ and not enough creative and thoughtful questions. ‘Toolheads’ – I like that description.”

So do I. Another wrote to tell me that their ‘Kaizen’ experts were concerned that Vanguard teaches not to standardise work, and that was exactly what they have been doing with their ‘Kaizen blitzes’. So it would not help to introduce a different view. Unless, of course, you wanted to improve something. And notwithstanding the fact that standardisation just drives up cost and worsens customer service. But hey, it said ‘Kaizen’ on the box, so it must be OK.

Going native

In any Vanguard intervention you will find managers who ‘go native’. It happens particularly at the early stages of re-design, when the re-design is running in only a small part of the organisation. When managers see a number that alerts them, they will revert to ‘old behaviours’ almost instinctively. Part of the problem is that it occurs at the stage when the ‘old measures’ are still visible. So, for example, managers have always responded to ‘backlogs’ as a big backlog is a bad thing. One of the things you have to do is help them see whether any change in the ‘backlog’ is real, is the rise and fall of the backlog normal variation or a real event, an assignable cause? Most often managers learn that they responded inappropriately to normal variation and you can even show them how this, in fact, de-stabilises the system. So they would be better off doing nothing.

Another thing you can do is remind them how that very behaviour was part of the problem in the ‘old system’. When paid attention to for numbers (‘reduce backlog!’) people ‘cheat’. Anything to make the numbers, and it always means more waste and thus more work. They need to be reminded that pursuing arbitrary measures was one of the ills of the old system. If they are disposed to theory you can show them how this behaviour causes tampering –making the system worse, not what managers ought to be doing.

You also have to point to the way the new design is running, how the focus is on increasing capacity, tackling the causes of backlogs and thus how focusing their energy in the new design will ‘dissolve’ the backlog problem.

You can also warn them that reverting to the ‘old behaviours’ will completely demoralise the people who are now working in the new design. They will know how the behaviour produces nothing of value and they will see it as a return to the bad old days (‘I told you we should never trust management’).

Even after all of that there are some managers who cannot stop themselves doing what they now know to be the wrong thing. And they will be open about it. And their reason for knowingly doing the wrong thing always centres on how they fear they will be perceived by their colleagues. In times of change you need people with the confidence to stand out; fear cultures – and there are more of them than you might imagine – don’t help.

Dr Deming said: Doesn’t anybody care about profit? The trouble is other things drive their behaviour.

A new event

I have decided to put on an event that explores management thinking, featuring people who have ‘got it’, working systems thinkers using the Vanguard method. I want to use the event to explore thinking issues; for example the different ways of thinking about measurement, how people now tackle and describe problems differently and so on. I am asking some of our current and past clients to contribute, but it occurs to me there may be practitioners out there who I have missed. If this is you and you would like to participate, please get in touch.