A message from South Africa

A South African systems thinker wrote to me about Jim Womack’s latest ‘e letter’:

‘The e letter from Jim Womack proves that your Vanguard Model is streets ahead in operationalising the concept of lean management, leadership and organization. Whilst these guys are still contemplating how to create lean management, leadership and organization you are already creating such organizations.’

He continued:

‘I like Jim’s honest assessment about his and other tool heads achievement. I quote: ‘We have taken a number of steps which were absolutely necessary by introducing many lean tools, starting with value stream mapping, organizing conferences — along with web-based forums and webinars — that have brought together good people struggling alone and created a community of lean practice with enhanced energy, performing useful experiments on lean transformations. But these steps were not sufficient. In fact, the amount of change in management practice and organizational performance over the past ten years has been modest.’

When I read your book about changing management thinking first, then changing the system and its measures, in order to change performance, I concluded that you guys are true management innovators.’

My thanks to him for saying so.

Jim Womack’s ‘necessary’ steps were not, in fact, necessary. Rather, they obscure the issue and encourage people to think they are ‘doing it’ when they are doing anything but. He, like the quality gurus before him, makes the mistake of thinking change is a rational business (which can be explained and trained). It is not. This kind of change is an ‘unlearn then learn’ thing. It is a thinking thing.

It was counter-intuitive for Ohno (unlearn to learn); it is counter-intuitive for all. The rational educational, training and communication things that Womack and others have done will actually make the change harder to achieve. The ‘modest’ achievement of the tool-head movement is actually preventing managers from seeing what they need to see.

‘Check’ in a week

One of the ‘pretenders’ (people who pretend to be capable with Vanguard’s ideas) is offering local authorities ‘check’ in a week. I am sure they make the offer because they think it is possible and they think it makes a more attractive market proposition (it’s cheap). Given they are also command-and-control thinkers they like ideas like ‘quick wins’ ‘low-hanging fruit’ and want to show how they do systems thinking smarter than Vanguard.

It is easy to see why they think it is possible, for in any local authority service the results of check are about the same. These organisations have been subjected to the same (wrong) specifications, targets etc, so they show the same problems and thus the same kinds of waste. So you might think it would be clever to get out there and prove this in as short a time as possible. In fact, while the dynamics are always the same the types of problems thrown up differ in their particulars. So doing ‘check’ in insufficient time could lead to changes not based on knowledge and thus mistakes. Given the work is the re-design of operations it is hardly wise to make that kind of mistake. But that wasn’t their worry, their worry was how to make this clever stuff look attractive, how to make money.

They also make a greater mistake. The work in check must involve those who do the work – workers and managers for the greatest learning that comes from ‘check’ is the challenge to thinking. It is only by doing that you unlearn and learn. In one week you wouldn’t create much learning. But they, like Womack, will believe ‘we just have to work it out and tell ’em’; they think change means telling and training. If you do it that way it will take time and may never happen.

Watch out for the pretenders. This one is a command-and-control merchant in disguise.

Understanding was Ohno’s favorite word

Ohno described ‘understanding’ as his favorite word. To him it meant approaching an objective positively and comprehending its nature. In comprehending, Ohno stressed the importance of being in the work and studying how the parts worked together, seeing each area’s role and function in the overall picture.

That is the purpose of ‘check’ and, to quote Deming, this is something that cannot be delegated – Deming would say ‘if you can’t come don’t send anybody’. The reason is simple, it’s a thinking thing and if you delegate that in the mistaken belief you’ll get it when someone else explains it to you, you won’t actually get it.

Takt time used to delude

The HMRC saga continues. Recently one of the Vanguard experts had a crowd from HMRC in an audience. They were claiming that ‘takt time’ was of value in improving HMRC’s performance. In fact it will only be deluding the tool heads leading this debacle of a change and HMRC managers.

Takt time is a heart-beat measure. It is the means by which Ohno controlled the flow of work, bringing things together in harmonious flow. It was a vital measure and control because Ohno put all products down the same manufacturing line; without controlling the flow you’d get into big trouble.

HMRC doesn’t have the problems Ohno had. Their management’s task is not to control the flow of physical production, to match the rate of production with customer demand. The nature of their ‘production’ is quite different. Their management’s task is to learn how to design a system that absorbs the variety of customer demand.

Ignorant of this fundamental concept, HMRC managers have created different work ‘types’, each has a standard time and they call this takt time. It deludes them. It is not a manufacturing cell that is interdependent with other cells; it is a service unit that does one type of work. All the causes of variation in performance will be in the work, and one big one will be creating different work types, a ‘sort’ step, and associated ‘takt’ times, which will drive in waste. This is not takt time, this is standard times, a command-and-control disease.

If only they knew.

Private sector learns faster

If HMRC were a private sector organisation I suspect things would be very different. Any investment of the size wasted on this change programme would be subject to intense scrutiny and would, if shown the kinds of numbers reported by HMRC themselves, be stopped.

Over the last two years we have been asked to help private-sector organisations that have had a thorough whack of tool-head interventions that have left people puzzled as to the true benefits but at least curious to find out more about why some things worked and others didn’t. Some of the interventions bludgeoned in, in the name of a Japanese technique, have been palpably daft; you wonder how the intelligent suits themselves can carry it off without declaring the obvious absurdity. We now see the same in the public sector.

The beguiling feature of the tool-head approach is it works, a bit. It isn’t hard to get a bit of process improvement in an organisation that is badly fragmented. Where it is disastrous, as with ‘takt’ time (standard times) above, the measures-in-use (activity / cost measures) keep managers blind to what is going on. When these managers get the right measures working and the right learning going on, they act. It is in the interests of their shareholders.

But if and when leaders of agencies like HMRC get to see and learn; would they act in the interest of their many stakeholders? I wonder, because the regime likes compliance and hates bad news. And HMRC was the child of Varney, the man who wants more public services to be delivered through factories. Next up for this tragic nonsense is the Department for Work and Pensions. Varney’s is a gloomy vision. He is a special advisor to the Prime Minister. I decided he needs his own chapter in my next book.

Failure to learn is systemic in public sector

A reader writes:

‘I lecture and teach on preventing housing and council tax benefit fraud. I have recently being doing some training and was going through the flow of a benefit claim. Most of the problems occurred at the front end i.e. the start of the process, when fraud and error crept into the system. I asked around the class and one person present (a manager) admitted that in his authority about 80% of the claims had to be reworked.

The cause – Government performance standards which meant that dirty work was being pushed through the system to achieve targets but was then having to be sent back to the front end for completion. What a crazy, waste-of-money world we live in.’

We have been publishing and presenting on the problems of the regime-promulgated design for benefits processing for some time. Many of those who have powerful jobs in the regime know what we have been reporting. But the regime is incapable of acting. Earlier this year the verification framework – a one-size-fits-all inspection solution, driven down with force and bucket-loads of money – was junked. We know it drove up costs and did nothing to reduce fraud; indeed the regime-promulgated design, as the reader points out, increased the scope for fraud.

The regime cannot change their specifications without onerous consultation – asking those who created the problems to improve on them. If and when systems thinking ideas get into the pot – as they have with failure demand (next item), the regime’s specification is wrong.

A dumb new target

The much-publicised reduction in targets includes a target for reducing unnecessary calls (failure demand). It requires the measurement of the number of calls it takes to get a service. It will lead to bureaucracies of measurement (and deciding how to measure it reliably won’t be easy), inappropriate jumping to the new CRM systems to provide data which will be meaningless, and, most importantly, it will take the managers’ focus away from where it needs to be.

The regime does this because they don’t understand and they think they do. They don’t understand because they haven’t been there and done it. They think organisations can be understood from where they are.

The regime has to go.