Special Edition: Eradicating Failure Demand

I’m sure I’ve told readers this before: Of all the concepts we have developed failure demand has the fastest legs. These days the idea pops up everywhere. I meet people who tell me about it, not knowing I’m the person who first noticed the phenomenon and coined the term! I’m also sure I’ve told you this: It is an easy concept to understand and even easier to misunderstand.

Command-and-control thinkers (i.e. all conventional leaders) get it and they are correct in seeing that it represents an enormous cost. They then, typically, imagine the causes of failure demand are people not doing as they should and/or processes not working as they should. This is the misunderstanding. To put it bluntly: Wrong!

The causes are systemic. Eh? It’s your system stupid! Failure demand is a defining feature of a command-and-control system. You can’t get rid of failure demand if you don’t change the system. ‘What’, I hear the command-and-control thinker ask, ‘does that mean?’

It means many practical things. If you run a service organisation where the controls are, for example, standardised work, specialised work, managing activity, adherence to specifications, protocols, service levels and many other things besides – and at the broadest level your controls are based on managing costs then your system will be creating failure demand. That’s the short version.

Now you could put your head in the sand as one leader did – when told that 50% of demand coming into his organisation was failure demand he replied ‘that’s probably normal in our sector’. With leaders like that… obviously he’d been on a benchmarking course – a fast way to mediocrity.

I write about this now as we have seen a series of requests for proposals (RFPs) seeking help in eradicating failure demand. The people who write them clearly know they have a problem but they know not what they need. Reading the RFP it is clear they imagine that a magician can come in and sort out the people and the processes; and true to form for the command-and-control thinker they want potential suppliers to declare how much money they’re going to save before they start – yes, without even knowing the size of the problem.

If the organisation is wedded to modern procurement rules it means you can’t talk to the leaders with the worries or ambitions, you can’t open a dialogue with someone who needs help with the way they’re thinking about the problem – in particular their means of control; instead you are obliged to speak only to a procurement ‘professional’ who knows nothing, and you have to rely on him or her to have a conversation on your behalf. There is a slim chance he or she will be able to express what you say and no chance whatsoever that he or she will be able to respond to questions the leaders will have.

Meanwhile the hacks and chancers step in with their nonsense ideas, favourite of which is ‘managing demand’; one of the dumbest ideas currently promoted. You can’t ‘manage’ demand (an especially favoured idea in public services) what you do need to do is understand it.

Top of the list for seeking help with eradicating failure demand is the financial services industry. (Wish that I could say it was the health and care sector where failure demand is massive and costing the public purse dearly, not to mention the impact on people’s lives.) In the rush to digitise services – following the herd and led by the consulting firm you’d never get fired for using – financial services organisations have increased the level of failure demand by designing digital services based on things they imagine about customers. You couldn’t make it up.

But help is at hand 

In May we are running an event on designing effective digital services. You’ll hear leaders describe how they made the mistakes many are making and how they quickly changed tack; designing digital services that work for their customers.

In November we are running a special event on eradicating failure demand – a chance to illustrate how the principles have been applied in different sectors. If you want to be put on a list to receive notice of that event contact Maria: office@vanguardconsult.co.uk

Yes, the concept has fast legs and yes, it is very important; if all service organisations were to go beyond command and control and eradicate failure demand the economic impact would be stupendous.

If you want to read more on failure demand see this recent article by Simon Caulkin.

And, finally, another example just popped into my mailbox. A few years ago we advised a police force not to go ahead with their plan to centralise call handling. They ignored the advice; it was a bandwagon promoted by the Home Office and others concerned with ‘best practice’. An internal team employing the Vanguard Method has discovered that it is now stuffed with failure demand and recommended they return to divisional call-handling, important – providing you design it well – as the context matters when making decisions about what to do. The leaders won’t budge. They believe centralising call handling will achieve economies of scale and thus it will all work out, eventually, if it is done right. They are wrong but would never know why without getting out and studying the work in order to see how the assumptions in their heads are wrong. You can only change the system when the leaders lead that change as the key to effective service design is to change the means of control. Otherwise, as in this case, there will be a train crash – how long will the enthusiasts who know better than their leaders hang around?

If you want to know more about studying and redesigning services and how these activities illuminate the problems with current controls and establish better controls, join our Beyond Command and Control Network – it is free to join.

John Seddon