118 – Improving service operations. Why it doesn’t happen in local government.

Posted by Whistler                                                                                          500 words

 walking the plank

I have read Lancing Farrell and Colin Weatherby’s posts on characteristics of demands, redesigning operations and improving service operations through action plans and service redesign, with some interest. It is all good stuff and not too difficult to understand or do. The question I ask myself is why I don’t see it happening everywhere across the sector. The ‘special and different’ posts partially explain it but I think there is more to it.

To begin with, the motivation to make improvements doesn’t really exist. People say they want to improve the quality of services to their community, and in response to threats like rate capping they say they want to be more efficient. But they don’t really want to do either.

Most councils have the potential to improve productivity by 10-15% (more in some councils). This has a potential value of $10 to 15 million at a small metropolitan council, which could enable the same services and service levels to be delivered at lower cost; or delivery of more or better services at the same cost; or absorption of future cost increases to reduce rate increases into the future.

Councils don’t pursue these savings because it is risky. Private enterprise makes a profit by taking risks to deliver value to customers. In local government an equivalent of a ‘profit’ is savings in costs from taking risks. The risks would mean removing the buffers that exist throughout the operations –stopping the lazy use of vehicles and equipment, or overstaffing to cover absences and under-performers, or using expensive contractors that do the difficult or dirty work, or trading time and quality to come within budget, or avoiding performance management responsibility.

In comparison to the private sector, work in local government is frequently disorganised and supervisors and staff have regularly taken the easy, and often more expensive, course when challenged.

It would also mean risk adverse senior managers having to take some risks. They would need to commit to improvement processes that take several years to show results. They would need to prioritise time to work with their teams on the daily, detailed, time consuming work that supports change and improvement. An intensive effort is required that could conflict with career plans.

It is true that most councils are under-managed. They employ too few managers who focus on operations – many spend most of their time and energy managing councilor and community activities that produce a ‘lot of light but not much heat’. Out of the 20 to 30 senior managers (Managers and Group Managers) at most councils there would be 10 – 15 who spend 80% of the budget delivering the services relied upon by the community.

The rest are mainly caught up in the urgent and reactive daily work created through interactions between councilors and the community. Sure, you can argue that this is a necessary part of the job and vital to the effective functioning of a participative democracy, etc. … but is it what ratepayers really think they are paying for, and is it the activity that really creates public value?

Lastly, making big improvements that are effective and enduring would mean that someone has to clearly state the expectations about performance. Someone who knows the ‘business’ well enough to see what needs to be stopped and improved. Someone who doesn’t need a culture survey, or a consultant’s review, or a calamity to drive them to action. I am being quite specific about that someone.