233 – My experience of management thinking in local government – Part 1: The formative years.

1000 words  (9 minutes reading time)                                      by Lancing Farrell

management experience pt 1

I was talking to a colleague recently, and I was asked about the management thinkers that have influenced me. It started me thinking back to my early days as a manager in my mid-20s and later when I completed a MBA in my mid-30s. And the lessons I had from starting and then managing my own business for a decade. Many management thinkers influenced me, and, equally, so did my opportunities to practice different ways of managing. This is quite a long essay, so I have split it into three parts.

I recall that before I was a manager, I had an interest in management. I wasn’t too sure what it was but I had read The Peter Principle as a student, and I knew that management was important in organisations if they were to be effective. For some reason I also remember that someone at the council where I started working was talking about Value Management. Now I know that they had obviously been to a course. Then I got a job as a manager.

I remember soon afterwards being told about Management by Objectives (MBO). A colleague had completed an assignment as part of his degree, which looked at the application of MBO in local government. He obviously thought I should be applying theory in my work, and I was attracted to the idea of putting more structure around my management. Thanks to Wikipedia, I have refreshed my memory about MBO, an idea developed by the management thinker Peter Drucker:

Management by objectives is the process of defining specific objectives within an organisation that management can convey to organisation members, then deciding how to achieve each objective in sequence.

At the time I even bought a copy of The Practice of Management (written in 1954) and read it from cover to cover. My exposure to MBO reinforced my view that management needs structure and focus, but not much changed in what I could do. At that time (early 1990s) the idea that the council would say what it was intending to do and then systematically plan to do it, was novel. Mostly, we just did the same thing this week that we did last week, and this year what we did last year. Nobody questioned it.

Some of us thought we could do better. I was one of the first university-educated managers and I had been exposed to international lecturers with new ideas to Australia. I wanted to do things differently and better. My next foray into management ideas was Total Quality Management (TQM), which has been attributed to the management thinker W. Edwards Deming. I led a pilot program at the council where I was working. Thanks again to Wikipedia:

Total quality management consists of organisation-wide efforts to “install and make permanent a climate where employees continuously improve their ability to provide on demand products and services that customers will find of particular value”.

Again, I bought a book, this time on TQM (long ago given away). Practicing applying TQM as a pilot showed me the difficulty of leading change in local government, especially from an operational area. The resistance was instant from internal support services (their nose was out of joint because they weren’t deciding how the council would improve) and it died a natural death. Along the way though, our Quality Circles using ‘PDCA’ (plan, do, check, act) had identified lots of opportunities for improvement. We made some good changes.

Then, someone lent me a copy of Henry Mintzberg’s book Rise and Fall of Strategic Planning, which, as it turns out, influenced me strongly. It helped me to see that the way we understand and deal with work today is the basis for improving it in the future, and that writing detailed plans, even if they are based on knowledge of the work, doesn’t work because strategy emerges while you are doing the work. It was a bit like John Lennon and his saying that ‘life is what happens while you are making plans’.

The next management idea to come along in local government was Business Process Reengineering (BPR). Championed by Michael Hammer, it suggested that understanding the work as a process and redesigning work flows would make services better. I bought this book as well. Wikipedia has helped me out with the essence of what he was saying:

Business process re-engineering is a business management strategy focusing on the analysis and design of workflows and business processes within an organisation to help organisations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors.

Around this time reforms of local government had started in the UK and there was talk of them happening where I was working in Victoria. Sure enough, the reforms arrived in Victoria with the election of a conservative State government. We got municipal amalgamations, forced rate reductions (20%!), and Compulsory Competitive Tendering. Whilst most people working in the sector would have agreed change was needed, with the benefit of hindsight, the baby clearly went out with the bathwater. It was a time of huge redundancies, cutbacks and chaos.

I left local government and started my own business (and a Master of Business Administration (MBA)). I had decided that after getting a job as a manager, and clearly having some aptitude, that I would be even better with some education. I have found this not to be a common view in local government in Victoria.

Nonetheless, the MBA introduced me to a (what seemed to me) revolutionary field of management research, thinking and writing – operations management. I had discovered the thinking that tied together MBO, TQM and BPR. For a while it changed the way I thought about everything I did. Ideas like the operational typology and performance objectives became fundamental to my thinking. I designed services around these ideas in my business.

For the benefit of completeness, yes, I did buy the book. Operations Management 2nd Ed by Nigel Slack and his colleagues became my new bible. Again, Wikipedia has helped me with a definition:

Operations management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods or services.

I loved the idea that operations were designed and that they could be controlled to produce more reliable products and services. I discovered that everything else I had experienced or studied, was really just a subset of operations management, even the emerging field (at least in local government) of Project Management.

A pattern was emerging – I found value in ways of understanding services as processes and engaging workers in improving them. Interestingly, around this time I found an article Peter Drucker had written in the 1970s about public sector management. It challenged my thinking about what I was seeing and learning. I will come back to it in Part 3.

232 – Coronavirus and local government – Financial Impact

1400 words  (reading time 11 minutes)                                                          by Lancing Farrell

Coronavirus financial impact

The focus of local governments has been on employee protection, service continuity, managing disruptions to cash flow and supply chains, and trying to understand the new risks emerging with Coronavirus. It is a whole new operating environment. This post explores some of the financial and operational impacts of the Coronavirus.

Physical distancing has reduced the capacity of facilities by half or more, making appointments and providing concierges has increased staffing requirements at facilities, and there is demand to retain new services like ‘click and collect’ and tele-services introduced in response to the Coronavirus, at the same time as regular services resume.

This is all happening as revenue is impacted by loss of fees and charges, additional expenses in relief packages offered to businesses, and citizens seeking deferral of rates because of financial hardship. Some councils are planning not to index their rates, which is a revenue reduction next financial year and every year thereafter.

At the same time, councils in Victoria are expected to maintain the employment of all staff without financial support from the Federal or State government. Councils adding to unemployment will not help and they need to work out how to live within their means.

What have councils been doing and what do they need to consider doing? Continue reading

231 – A New City O/S – Stephen Goldsmith and Neil Kleiman.

875 words (4 minutes reading time)                                                               by Lancing Farrell

distributed network

I have also been reading Goldsmith and Klein’s bookA New City O/S. It is a very interesting treatise on a potential future model for local government, particularly the argument for distributed governance. As Colin Weatherby has described, it is a researched and expert work.

I found the concept of distributed governance quite interesting. In some ways, all councils already operate using a version of this model for some services. Typically, this would be in community services where the council, State and not-for-profit organisations often combine to provide a facility, grant funding, and the actual delivery of the service. I think it would be a big challenge for many councils to adopt distributed governance across all services because of the loss of control. Continue reading

230 – A way to show performance is determined by the system.

600 words (3 minutes reading time)                                                         Colin Weatherby

95 - 5 Vanguard

Source: Vanguard video ‘Tactics for helping people learn about the 95:5 principle, Part 1′

There have been several posts about performance appraisal and the ineffectiveness of systems designed to improve the performance of individuals. This posts picks up on the key theme of those posts – i.e. a person is not totally responsible for their performance in a system of work and managers need skills in understanding and improving the system.

This has been a compelling idea in my thinking and my work. Despite the many criticisms and problems encountered with people and their work in local government, I have met very few people who come to work to do a bad job. Many years of watching people work and talking to them about their work had led me to conclude that it was the way they were asked to do the work and the tools they were given that created most of the problems. I just didn’t know how to describe it.

Then I read Peter Scholtes’ book ‘The Leaders Handbook: making things happen, getting things done’, and his quote from Edwards W. Deming struck a chord with me:

“The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance.”

Continue reading

229 – Coronavirus and local government – time for a new O/S?

800 words (4 minutes reading time)                                                           by Colin Weatherby

A new city operating system cover Goldsmith

This is the first in a series of posts requested to discuss the Coronavirus and local government services.

I recently read ‘A New City O/S – The Power of Open, Collaborative and Distributed Governance‘ by Stephen Goldsmith and Neil Kleiman. Some time ago I read ‘A Responsive City‘ by Stephen Goldsmith and this latest book takes Goldsmith’s thinking about cities and their governance to a new level. As a former Mayor (Indianapolis), deputy Mayor (New York) and the current Daniel Paul Professor of the Practice of Government at Harvard’s Kennedy School, Stephen Goldsmith is well credentialled to discuss local government.

It is timely to read Goldsmith and Kleiman’s book as local government services adapt to the Coronavirus, react to ensure the safety of staff and the community, seek to understand emerging service demands, and start to look ahead at recovery and the best way to deliver services post-Coronavirus. Continue reading

228 – Frog or bike. Does it matter?

1720 words (6 minutes reading time)                                                                Lancing Farrell

thinking frog

Colin Weatherby and Tim Whistler have made some interesting points in their contributions to the discussion about the Vanguard Method. Clearly, Colin’s colleague has had some success in using it and has been able to identify unique features of the Vanguard Method. In contrast, Tim has raised some legitimate concerns, especially from a local government perspective. I have spent some time thinking about both points of view and reading some of the material mentioned. Here are my thoughts for what they are worth.

Services are complicated and the interactions between the parts, especially when people are involved, is important. Experience says that changing one part of a system does often have unintended consequences elsewhere. Continue reading

227 – Frogs or bikes – I’d love to see that.

600 words (3 minutes reading time)                                                                   Tim Whistler

frog on road

I read Colin Weatherby’s post on the Vanguard Method and systems thinking with some interest. There have been a number of posts on systems thinking on this blog. It is not a new idea. I am intrigued by what makes the Vanguard Method any different to other applications of systems thinking. I am also interested in how it relates to concepts like public value. How does the Vanguard Method achieve better or different results?

As previously posted, I have some interest in the Vanguard Method. I suppose, I am sceptical about the likelihood of any method being taken up in local government if it relies on ‘counter-intuitive’ truths and if there is no detailed plan to say what will be achieved and when. It is always hard to justify expenditure of public funds without a written plan with measurable outcomes – even if everyone suspects the plan is ill-founded or optimistic. If you aim for the stars, if you fail you will at least land on the moon. A plan gives you something to measure the effort against and hold people accountable. After all, isn’t public accountability the aim?

Continue reading

226 – Frog or bicycle? The Vanguard Method at work.

2250 words (8 minutes reading time)                                                   Colin Weatherby

frog on bike

Some time ago Tim Whistler wrote a brief post on the Vanguard Method in Australia. Since then I have been talking to a colleague who has been using the Vanguard Method. Their experience has highlighted aspects of the Vanguard Method that are different to other system thinking approaches. The originator of the Vanguard Method, John Seddon, has also written a new book (‘Beyond Command and Control’) that discusses some of the differences between the Vanguard Method and other popular approaches to organisational change. This is rather a long post but worth the effort to read it if you are interested in systems thinking and the Vanguard Method.

Continue reading

225 – Why do we struggle to achieve capital expenditure targets?

By Lancing Farrell                                                                                                      1250 words

the planning fallacy.png

I was reaching into the archives to re-run a popular post on how councils fail to complete their targeted amount of capital works each year when a colleague pointed me in the direction of a recent podcast on Freakonomics Radio. The podcast, Here’s Why All Your Projects Are Always Late — and What to Do About It,  provides insights into the nature of the problem facing councils and provides some practical solutions.

You might want to start by reading that post from the archives.

In the podcast several key reasons for projects not being completed on time and within budget are discussed. Those most relevant to local government include the planning fallacy, optimism bias, overconfidence, and strategic misrepresentation.

Let’s start with the planning fallacy.

There are a lot of reasons why that project you planned can take way longer than you anticipated, and cost way more. Outright fraud, for instance — the lying, cheating, and stealing familiar to just about anyone who’s ever had, say, a home renovation … There’s also downright incompetence; that’s hard to plan for. But today we’re talking about the planning fallacy, which was formally described a few decades ago by the psychologists Daniel Kahneman and Amos Tversky.

This quote sets the scene nicely. Lots of things can contribute to a project not being completed on time but our inability to accurately estimate the time required to complete a project sets it up for failure. Continue reading

224 – Risk taking in local government

By Colin Weatherby                                                                                               900 words

opportunity.png

Image

Lancing Farrell raised several important issues in providing advice to a colleague regarding risk management. How does a council balance the pressure not to take risks and fail, with the competing pressure (often from the same sources) to take risks and meet demands to create new value?  

Risk is an interesting concept and there are various definitions. I like to think of it simply as the uncertainties related to achieving your goals. It is about the hazards along the pathway as you make your way towards your destination.

Businesses that don’t take risks will fail. They become uncompetitive or customer satisfaction drops. Either way, they lose business to competitors taking risks to create value that customers want and will pay for. We can all think of the companies that have taken big risks in redefining a service or product to create a new market.

You are probably wondering what this might have to do with local government. Aren’t we just doing what we have always done?

Many councils are. Whether they should be, or whether they will be able to continue to do so, should be questioned. We now live in the ‘age of the customer’ – residents want personalisation, mobility, self-service, rapid response, and efficiency (efficiency for them, not the council). The variability introduced by customers must be quickly and effectively absorbed by the organisation. Complexity, by its very nature, creates risks.

In conjunction with mandated limits on prices (the rate cap) and growing numbers of customers (as Lancing points out, Melbourne is growing rapidly), the rising expectations of residents means that councils must do things differently. Different usually involves risk taking.

I recently attended a training session on developing an organisational risk appetite. It showed me how councils could identify hazards and manage risks differently, yet still satisfy the pressure to stop things going wrong while meeting the demand to create new value. It needs a re-think and a more sophisticated approach to risk and compliance. Continue reading