Terry Moran listened

Terry Moran listened

To update readers: I went to meet Terry Moran, the man in charge of the universal credit, and he listened. I gave him a series of examples where we had helped clients rip out computer systems because they failed to absorb variety (systems-speak for gave a lousy service at high costs). He is going to visit some of those examples and he has promised that we will meet again afterwards.

A little bit of positive news before this month’s tirade against the centre.

DIY dismays

News that tenants in social housing will be able to carry out their own repairs was greeted with dismay by those who have re-designed repairs following the Vanguard Method. It is an ill-thought-through plan. The minister said he wants tenants to carry out ‘routine’ repairs like changing locks or fixing leaky taps, and this can only mean both a centrally-promulgated list of what’s OK for DIY and a schedule of rates – prices for specific jobs. To exacerbate the consequences, the minister proposes that tenants might be able to profit from DIY, sharing in any gains made, by getting the work done more cheaply.

See the news report here:

As with other such initiatives promulgated over the last ten years or so, we are promised ‘pilots’, but as we all know, such pilots are ‘destined to succeed’, and the minister has already announced ‘plans to change the regulations to spread the scheme across England later this year’.

The dismay is, in part, because people feel ignored. Those who have studied their repairs service and re-designed it now deliver repairs on the day and time tenants want and they have halved the cost of repairs. Shouldn’t that get the attention of ministers? If every repair service achieved the same result the national savings would be eye-watering.

But they are also dismayed because they know that anything resembling the schedule of rates will simply serve to drive costs up – one of the counterintuitive truths you discover when you study repairs: managing costs causes costs. The scheme will also mean more inspection (something designed out of high-performing services), for landlords won’t want to risk deterioration of their assets. Beyond the host of service design issues there will be the inevitable problems of definition – what’s in and what’s out – and some tenants cheating – which DIY jobs will generate the greatest profit for me and how can I minimise the costs?

This June, the man who was the first to develop an on-time-as-required repairs service operating at half the costs is being recognised by Gary Hamel. If Hamel can notice innovation, why can’t Whitehall? Because Whitehall’s job is to develop ideas for ministers that will ‘sell’ politically.

Perhaps we should fly the policy-wonks to New York where Gary Hamel is recognising innovation that has occurred in spite of them? See more here: http://blogs.wsj.com/management/2011/04/06/improving-our-capacity-to-manage/

Maybe it should be a one-way ticket 😉

Stop press: As this newsletter was about to ship I was told that Owen Buckwell will be on Panorama (BBC1) tomorrow (Wednesday) night at 9pm.

Policy-based evidence

In a revealing article, Alex Stevens, an academic, described his experience of working for six months in the Whitehall policy machine. He describes the heart of the policy problem as the need to gain consensus amongst the many interest groups and fit any ideas with the political narrative. It is no surprise that he concludes we have anything but evidence-based policy. His article is here:

I wrote about this problem in my public-sector book. The Whitehall machine of the last regime was systemically incapable. It crowed about policy-based evidence – how many organisations are doing as directed – and remained unaccountable for the damage caused.

The coalition government’s announcement that local services would no longer be subjected to central control was inspirational for those of us who have learned how badly the centre’s specifications affected service quality and cost. Innovation requires freedom; we will never innovate if we are bound-in by consensus, especially when that consensus is largely made up of people with no knowledge. Freedom requires confidence that the regime will stick to its word. But every big idea promulgated from the centre will be a nail in the coffin of innovation.

Fear is alive and well

Despite the national directive to not work to targets for initial assessments in children services, local authority managers are still managing to the targets ‘just in case Ofsted comes looking’. Despite the minister for police telling chief constables they can dump the targets, HMIC (the inspectorate) argues they should stay. People are not brave enough to dismantle their ‘performance management’ (misnomer) bureaucracies, they wait instead to see what the centre is going to do and they see plenty of evidence that the centre remains alive, well and in business. The centre is in the wrong business.

More costly thinking in housing

Despite the costs associated with Choice-Based-Lettings systems (a whole chapter on that in the book), landlords keep the system because they are encouraged to keep the databases – ‘waiting’ lists. Whitehall wants them (they are a count of ‘need’), regional collaboratives want to keep them (removing the database would mean undoing the recent years of joint effort), housing services organisations, consultants and trade associations, cream money from coordinating deals and buying computer systems, and managers of housing organisations who have not studied what is going on with waiting lists believe they are part of the way their service should operate.

The waste-ridden databases are now central to another new scheme dreamed up by the people in Whitehall: ‘housing mobility’: If you live in Liverpool, but you fancy a house in Portsmouth, a new national web-based service will help you choose one.

Those who have studied housing allocations will tell you that the demand for this service is zero. The policy wonks have, according to my sources, employed ‘customer insight’ techniques which amounted to putting Liverpudlians in a focus group and asking them what they thought of the idea. A lesson in being fooled by a label: just because we call it customer insight doesn’t mean we garner anything insightful.

Of course there may be demand out there, one regional study showed a small amount of demand for moving to where someone had found a job (a good thing to help someone with). But my bet is any demand would be small and unpredictable; and if there is one mistake you should never make it is to design a service for a ‘special cause’, it is a fast way to drive costs up.

How much will we spend on ‘housing mobility’ before we count the cost of failure? Why don’t the policy-wonks focus their attention on the amazing work going on in house-lettings which has been achieved by dumping choice-based-lettings, dumping the databases and seeing everyone who applies for a house? These services solve more problems than housing in their communities and operate at lower costs, their ‘customers’ heap praise on them. Isn’t that what we want from innovation?

‘Professional’ procurement?

The policy wonks should turn their attention to another matter in housing. The new rules for tendering for repairs allow for legal challenges of award of contract – who the landlord chose to buy from. Many of the big suppliers, of course, bid low, hoping to make up the need for more from the contract by judicious use of the schedule of rates. And if you have put in a low bid it provides a strong reason to seek a legal review.

Fearful of the costs associated with legal processes, social landlords now contract out the purchasing to ‘professional’ procurement firms. And these people think that ‘best practice’ means working to targets, using the schedule of rates and all the other paraphernalia imposed in recent years by Whitehall. So that guarantees that the suppliers who know how to deliver a service on the day and at the time the tenant wants it, and do so at half the repair cost, don’t get a look in. Completely bonkers.

John Little, one of Vanguard’s housing experts posted a blog on this and the folly of the tenant DIY scheme: http://www.guardian.co.uk/housing-network/2011/may/03/brainless-procurement-housing-repairs

Caulkin explains

Another thing the people in Whitehall should do is subscribe to Simon Caulkin’s web site. Last month, in the most inspirational, accurate and brief account, Simon explained the paradox of Whitehall’s focus on costs driving costs up. To quote him:

‘Because cost, like profit, is a consequence – an effect, not a cause. Costs are low if you do something well, high if badly. Those who didn’t know already should have learned from the crisis that treating profit as an end in itself and managing it accordingly is not a trivial error. Managing by cost is as destructive as managing by profit, and for much the same reasons: it distorts priorities and destabilises the system, making it harder and more expensive to manage.’

If you don’t subscribe to Simon’s web site you’ll be able to read the whole article when it gets put in the public domain in a few weeks. A compelling read that should be shared widely. It’s the kind of stuff that provokes curiosity, thinking that keeps us sane.


A useful thing for Whitehall to do

If innovation is in the hands of those who deliver the services, as it must be, the centre could provide a useful service: publicising genuine innovation. And I don’t mean improvements of 5 to 10%, I mean radical improvements. What is published should be limited to three things: the extent of the improvement achieved (hard evidence), the problem the managers thought they had and the problem they discovered they really had. Because the first thing you have to address with management is ‘do I have a problem and do I know what it is?’

The last thing the centre should do is promulgate ‘solutions’.

One sane cop

Last month I was sent two blogs from a serving police officer who, in spite of the system, is doing the right things. You would be astonished at what actually goes on in the front line and you wouldn’t be surprised that these things mean police are less able to do what they are good at.

The blogs are here (read the second one first, it is shorter):
Why We Must Learn To Say ‘No’.

We need more like him. It should be normal for our police to innovate. The only way to achieve that is to change the system.

I am delighted to tell you that the minister for policing visited a police force using the Vanguard Method. He was impressed, as you would be, and he has agreed to open a conference on the work in September. More information later.

I’m coming to Australia

My antipodean readers might like to know that I am planning to be in Australia at the end of August. I have been asked to speak to a public-sector audience about call centres, I shall be explaining why it has been wrong to follow the junk disseminated by our government (the Australians have shared services and call centre debacles as bad as ours) and, of course, I shall be showing them how the better way works.

I am coming to Australia principally to open for business there, all the signs are that people are looking for a better way and have had it with things that don’t work; the Australians have a better attitude to things that don’t work, many leaders here could learn from their openness.
If leaders of Australian service organisations want to meet me while I’m there it would be a pity not to use the opportunity. Let me know.

Hayley is a star

One of the videos I’m sure I’ll show in Australia is a corker starring Hayley. Hayley is a leader of a private-sector sales organisation that has been transformed. What makes Hayley compelling is her openness in describing how she reacted to the idea that 95% of the variation in performance was nothing to do with the people. It so offended her world view – as she describes, she had done the sales job, had been a trainer, a coach, a team leader and was now a manager, and she ‘knew’ that it’s the people that made the difference – that she set out to prove Vanguard wrong! When she studied the work, she found out the truth. It is a riveting tale that illustrates how normal people react to counterintuitive ideas and how they learn them to be true.

Hayley now runs a sales organisation where sales are up, customer satisfaction is up, morale is up and efficiency is up. And the culture change was free.

Targets make performance worse

One of the things that shocked Hayley was the impact of targets on performance. It would now be no surprise to her that job centre staff, being managed by targets, are using their ingenuity to ‘trick’ people out of receiving benefits. Shocking, immoral and, of course, DWP managers simply denied it.

Watch the video here:


Meanwhile DWP call centre staff are striking, see the BBC story here:


And the union’s view here:


I am amazed that the union has not sought to take action under the human rights legislation. Use of inappropriate measures putting stress on people is easy to prove. It is the same as Hayley learned: 95% of performance is down to the system, management’s responsibility. Monitoring the workers is at best working on the 5%. It ought to be outlawed.

Come to the Deming Forum

26th May, the second (main) day of the Deming Forum, will feature two profound examples of the Vanguard Method in action: the amazing story of materials supply in housing repairs and giving up targets and all that junk in financial services. I’ll be there, will you?

Systems Fundamentals – open programmes

As regular readers will know our open programmes run in Hull and Derby Universities and in the Waterton Centre in Bridgend. The Systems Fundamentals programme is something we developed to run in-house; it gets leaders started and causes them to ‘pull’ the Method (important because you have to want to change your thinking). It serves as an introduction to the power of the Vanguard Method and it is, essentially an action-learning programme, it is the work participants are given to do back-home that gets them learning.

The open programmes run according to demand, if you have an interest you can register as follows:

Hull: http://www2.hull.ac.uk/hubs/short-courses/courses/systems-thinking.aspx

Derby: http://www.derby.ac.uk/dbs/systemsthinking?csId=&courseQuery=systems+thinking

Waterton Centre (Bridgend): pr@vanguardconsult.co.uk