112 – Are we really that ‘special and different?’ An answer: ‘Yes, but’.

Posted by Lancing Farrell                                                                              400 words

peas in pod

This question was posted a week or so ago and readers and writers were asked to respond.  One reader responded (see comments below original post).  Here is my go at a response.

I am not a big fan of ‘yes, but’. In this case it is a useful way to respond to this question.

‘Yes’, of course every community is different – different people, different landscape, different housing. I could go on. These differences are important in determining the exact nature of the role each local government should play and the services they should provide. I wrote about this some time ago. Understanding these differences is critical to getting the public value proposition right and creating the value expected by the community.

I suppose the ‘but’ bit is about how the organisation responds to these differences. Because each community is different, does each organisation serving them need to be different? There are lots of examples of large organizations, especially those operating in different markets, where the organisational systems and processes are similar but the goods or services they produce are different. They accept customer-introduced variability but have designed their systems for consistency and efficiency.

This doesn’t necessarily mean separating front and back office operations, but it could provided that the connection between the two remains and customers can ‘pull’ value. Most councils have an efficiency-based business model (they may pretend that it is value-based from time to time) and they use resources to produce commodity services. These services must be produced efficiently by fully utilising asset capacity. Maximising asset utilisation requires sufficient demands and smoothing of the demands entering the work system. It is not rocket science and every council faces the same challenge to deliver essentially the same suite of services.

This is where councils should be looking for similarities, rather than differences. Sure there are some services that you could argue are unique to a particular community, or the community is prepared to pay more for a significantly different level of service. A value-based business model may even be used and the focus will be on understanding exactly the value required and how to deliver it to each individual customer. However, these services are rare in reality (they may not be rare in the minds of managers).

I think we could choose to see ourselves as similar and share systems capabilies across the sector.  I think we don’t because when councils see themselves as special and different it enables them to escape accountability. You can’t be measured easily against the performance of others or sector benchmarks. We always have a reason why that isn’t possible or sensible.

Chatterjee, Sayan, 2013. ‘Simple Rules for Designing Business Models’, California Management Review, Winter.