196 – Making local government organisations simpler to manage – why is it necessary?

Posted by Colin Weatherby                                                                         1700 word

complexity knotted rope

I was at a meeting recently where the team charged with conducting an organisational self assessment (OSA) and preparing an organisational improvement plan (OIP) using the Australian Business Excellence Framework were evaluating progress. It was an interesting meeting of a diverse group of people. By the end of the meeting we had reached a common conclusion – a council organisation is complex and systems need to be disentangled and simplified so that it can be managed effectively.

The OIP actions were developed independently from the outcomes of the OSA. It was only after 12 months of effort to implement the actions that the high level of congruence between them became apparent. Very few actions relating to core organisational systems could be implemented without impacting on each other – they overlapped. Attempting to deal with them one by one wasn’t going to work but joining them all together would create a large and very complicated action.

There is an earlier post on complexity which describes some of the sources of complexity in local government. It helps to know what you are dealing with but that doesn’t make it any easier. This was reinforced by reading former Victorian Premier John Brumby’s excellent memoir ‘The Long Haul – Lessons from Public Life’. In reflecting on the last four years in which he has viewed politics as an outsider, Brumby comments on the lack of trust that ‘permeates almost everything we see and hear about politics today’.

He believes that part of restoring trust and credibility in politics is to give the public a better understanding of the complexity of the issues.

“When I first sat in the federal parliament, an older and wiser member told me: ‘For every complex problem there is a simple solution … and it’s always wrong’. We live in a world where the questions are becoming more complex, while the public appetite is for ever simpler answers: the kind that can be summed up in 140 characters or less”

My question is, do you think that people want to be bothered by the complexity involved in getting what they want through political processes? They don’t for most other things in life. Brumby’s colleague was right; the public appetite is for simpler answers. Having said that, I think something does need to be done to help people at least see that it is complex, even if they don’t want to understand the complexity.

I often use a simple story to convey this complexity. Many years ago the council I worked for received a petition from around half the people who lived in a street asking for all of the street trees to be removed. Their reasoning was simple – they didn’t like the trees, they paid their rates, and it was what they wanted. At the next council meeting a second petition was received from the other half of the residents in the street asking for all of the street trees to be retained. Their reasoning was also simple – they liked the trees, they paid their rates, and it was what they wanted. Could a decision be more straightforward?

Brumby says that politics has always been complex because it involves ‘managing the competing interests of a wide range of stakeholders’ and no genuine political question has one right answer. He is right and the difficulties dealing with ‘genuine political questions’ quickly becomes apparent when watching councils in action. Finding the best answers when lots of questions are being asked requires an organisation that is capable of making decisions quickly, transparently and with clarity of purpose.

This challenge reminded me of an excellent management book that I had read some time ago – Management in 10 Words’ by Terry Leahy, the former CEO of Tesco. In the chapter entitled ‘Simple’ he describes how he led the simplification of Tesco’s business. It is a well told story of business transformation driven by the need to make organisational systems and processes simpler.

Interestingly, Leahy begins the chapter with a discussion of public service complexity arising from excessive bureaucracy and outsourcing. He says bureaucracy dissipates know-how and outsourcing now prevents government departments in the UK from making spending cuts because of gaps in their understanding of costs and risks. He cites complexity in the large number of regulations on the statute books in Britain and the length of documents guiding compliance. The UK tax code has 11,520 pages.

Leahy mentions all this to highlight the impact of complexity on business. Imagine for a minute how those of us responsible for creating and administering all of this complexity manage! His main point is that

“Individuals want to lead easier, simpler lives as the demands on their time increase”.

He believes that governments and companies that can deliver this will succeed. ‘Red-tape and long-winded decision-making processes’ cost politicians votes and companies profits.

“The imperative is to be able to change, and change fast, to meet new demands, challenges and the impact of new technology. Change in any fast-moving, fast-growing organisation is not easy to achieve. My solution is quite simple: to make things simple.”

When Leahy became CEO at Tesco he found that the company was having trouble dealing with managing thousands of product lines, dealing with customers with so many different tastes and budgets, differentiating themselves from competitors to maintain market share, and responding to change in fashions and needs to increase customers.

Local government faces a similar challenge. Even though they are not in a fast changing environment, there is change occurring. For example, analysis of council services will reveal about 25 sets of services. Each service set has, on average, around 5 services. The 125 services produce between 1000 and 2000 specific service outputs or ‘products’ – i.e. empty waste bins, repair potholes, plant street trees, transport residents, provide home delivered meals.

Obviously, there products are produced many times over each day or week or year. For example, as part of the waste management service set, the residential waste collection service will require most councils to empty residential waste bins between 3 and 6 million times each year.

Few companies today produce thousands of products. Most highly diversified companies have been broken up into multiple enterprises, each focussing on producing fewer products. This has been in response to competitive market forces that, unlike local government, are not constrained by any legislated requirements to deliver a comprehensive range of services to a market. Managing a highly diversified organisation that operates in a political environment is challenging. Managing it so that it is reliable and consistent in meeting its commitments is extremely difficult.

In making things simple at Tesco, Leahy set out to provide a simple aim to bring focus to what people do. He believes that a simple proposition is easy for people to understand and act on. Simple acts also take less time to do and cost less. Simple systems take less time to establish and are easier to change.

Leahy says that a trap in the effort to make things simpler is mistaking simple for easy. He says that simple is not always easy. Often it is the opposite. Another problem in making things simple is that it can threaten people. When unnecessary processes are stopped and remaining processes become more transparent and accountable, there is nowhere for ‘inefficiency, idleness’ and ‘underperformance’ to hide.

“Complex processes can leave a muddled chain of command: no one is quite sure who is responsible for what.”

His experience has been that when there is a change and people try to do something new they tend to add new processes instead of asking what can be stopped or simplified. As a result, a very simple idea becomes confused and the original, simple idea is lost from view.

The difficulty experienced in turning ideas into action at Tesco prompted Leahy to create a new culture of simplicity. Systems had become too complicated. Too many projects were being run at the same time. He set out to ‘stop people doing what was unnecessary and bring more focus and simplicity to everything’ they did.

Local government similarly tends to over commit. Often this is in response to community demands. Whether it is too many actions in the Council Plan (some have hundreds) or too many projects in the capital works program (some councils struggle to deliver more than 80%) the problem is the same – public pronouncements are made of intentions to act and then the organisation fails to deliver. Then trust and credibility are eroded, as highlighted by John Brumby.

Leahy’s leadership team at Tesco developed a guiding principle of ‘Better, Simpler, Cheaper’ for all company processes. Every change had to pass this test – better for customers, simpler for staff and cheaper for Tesco. Unsurprisingly, the greatest benefits came from simplifying processes for staff. A simple test was developed to confirm that what people were being asked to do was simple – Simple is Achievable and brings Benefit and is Clear.   It was called the ‘ABC” test.

At Tesco, a process was achievable when people could do it the right way the first time because they had the skills and resources required. Benefit came from achieving goals and solving problems. Clarity was evident when the process was easy to remember and communicate.

Ideas for simplifying processes were sought from the front line staff performing tasks each day, rather than strategists ‘sitting in their offices, far from the scene of the action’. Leahy discusses several important processes that were simplified to improve supply chains, product handling, reduce waste, and support innovation. It is worth reading.

Whilst a strong advocate for simplicity, Leahy does recognise that simplification can be taken too far and at some point in simplifying a process it can stop adding value. However, he says that this can be corrected and fear of oversimplification shouldn’t prevent processes being made simpler.

I don’t think that there is any doubt that councils need to be made simpler to manage if they are to better deliver on community expectations.

Local government needs organisational systems and processes that are integrated, coherent and capable of being managed by the people attracted to work in the sector. As Terry Leahy has pointed out, it is not only public services that are complex. The transformation of Tesco’s business serves as an example of what can be done.

Brumby, John 2015. ‘The Long Haul – Lessons from Public Life’.

Leahy, Terry 2012. ‘Management in 10 Words’.

 

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