219 – Do we value competent management in local government?

By Lancing Farrell                                                                                                        1200 words

Image result for Why do we undervalue competent management hARVARD BUSINESS REVIEW

Raffaella Sadun, Nicholas Bloom and John Van Reenen have written an interesting article (Why Do We Undervalue Competent Management?) that explores a deep and persistent problem in organisations across the world.  This problem also manifests itself in local government.

The article is based on research over the past 16 years in 34 countries involving 12,000 organisations and 20,000 interviews (see more at http://worldmanagementsurvey.org). A strong evidence base is used in providing some clear insights into a problem that is disturbingly common.

The fundamental premise is that competent management practices make a difference to the productivity, profitability, growth and longevity of organisations.

This seems like such an obvious thing to say or write. Of course, the quality of management is critical to the performance of an organisation. After all, aren’t we are all managers and doing something that makes a positive contribution? This is where the story starts to get interesting.

The authors say that competent core management practices can’t be taken for granted and that there are big differences between and within organisations they have researched. Our experience in local government validates this finding. Every time you move to a new organisation you notice differences in how it is managed (either better or worse than your previous council). You also notice differences when you move from managing one functional area to another within the same council. It is one of the benefits of moving to broaden your experience.

Big differences in management practices within organisations, and organisations not being good at identifying and spreading their own best practices, is relevant to local government. Councils often have ‘pockets of excellence’ within them. These are often the services that also rate highly on community satisfaction surveys, for example, libraries and waste management. We tend not to study those services and learn from them. In fact, the opposite often happens, and organisational drag is ratcheted up to contain them because they are seen as higher risk. What makes them better makes them a problem.

The authors see operational excellence as a critical complement to strategy – it provides the capability to act on strategic intent. Core management competence is the platform for more sophisticated capabilities, such as data analytics, evidence-based decisions making and cross-functional communication. In my experience, this is relevant to local government because we frequently over-reach and try to implement complicated management ideas on a poor foundation.

The authors list the characteristics of the organisations with higher scores in their research:

  • Rigorous performance monitoring.
  • Systems geared to optimise the flow of information across and within functions.
  • Continuous improvement programs that support short and long-term targets.
  • Performance systems that reward and advance great employees and help underperformers turn around or move on.

Think about your own organisation. Do you see these things happening? There are reasons that they probably aren’t.

One reason highlighted by the authors is that the costs of improving management practices can be as high as the capital investments organisations make. Imagine a council spending tens of millions of dollars improving management practices – how would the councillors and the community view it? The results are not guaranteed, they are intangible, and the returns on investment are difficult to articulate. Making a building is a lot easier and less risky.

As with many HBR articles, making links between compelling private sector ideas and public sector management takes a bit of imagination. The statement by the authors that operational excellence results in higher profitability, which in turn means firms will grow faster and be less likely to die, started me thinking about a local government equivalent. What can you say about the benefits of operational excellence for a council?

Well, I had a go.

 “Councils that create greater public value through operational excellence will have more satisfied residents with a greater willingness to contribute in providing community services and infrastructure”.

I am assuming that the value that matters is public rather than customer or stakeholder or private value. I am also using satisfaction in terms of expectation and experience. The idea that people who feel they are getting value for their money or effort will contribute more, and the contribution will be for services and infrastructure that benefits everyone not just themselves, is also important. Have a go at a statement yourself.

The last section of the article deals with why every organisation isn’t focussing on their management competence or capabilities and in achieving organisational excellence.

In local government, I think part of the answer to this question lies in believing there is a problem. In my experience, councils tend not to see their problems. In many years spent working as a consultant to local government, I noticed this frequently. In situations where you could see an obvious problem or opportunity for improvement (and, of course, an opportunity to sell a service), councils would not see it.

Sometimes they did, and then the issue could be that they would think it was a problem without a solution, or at least a solution they would be able to implement. As a consultant, I spent a lot of time convincing councils that they could solve these problems (and that I was the person to help them.

The authors list six external and internal reasons for the variations in management competence they have identified:

External

  1. Intensity of competition – a competitive environment it creates a strong incentive to reduce inefficiencies and badly managed firms will die. In local government, the same incentives don’t apply but a general level of dissatisfaction with, and distrust of, government is creating pressure for change.
  2. Labour relations – it can be difficult to give opportunities to more talented staff on merit. This is also true in local government, which has the added problem of difficulty dealing with poor performers.

Internal

  1. False perceptions – managers are unable to observe how badly or well their organisation is being run. They might also over-estimate the cost of introducing new practices or under-estimate how much difference they could make. I am sure local government suffers from both problems.
  2. Governance structures – managers who know what needs to be done and choose not to act for fear that the change will adversely affect them. I have known many leaders who have put their personal ambition and career ahead of the best interests of their organisation.
  3. Skill deficits – this includes basic capabilities in numeracy and analysis. In local government, it also includes more sophisticated capabilities, such as operations management.
  4. Organisational politics and culture – this is evident in resistance to change.

The last dot point is addressed by the authors in some detail. They say that resistance to change is most successfully overcome in the organisations they have researched through top management involvement, constant communication, message reinforcement and visibility. Take another moment to think about your organisation.

I will finish with a quote that captures a key challenge for local government:

 ” … management quality was significantly higher in organisations in which CEOs dedicated a larger portion of their time to employees that to outside stakeholders.”

Sadun, Raffaella , Bloom, Nicholas and Van Reenen, John 2017 Why Do We Undervalue Competent Management? , Harvard Business Review, September –October. https://hbr.org/2017/09/why-do-we-undervalue-competent-management

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218 – Requisite leadership, stratified systems theory and local government management.

By Colin Weatherby                                                                                              680 words

Jacques levels of work authority

Lancing Farrell posted an interesting piece using Elliott Jaques’ requisite organisation theory to explain the best use of Executive time. It prompted some related thinking on my part. Jaques has provided a significant body of knowledge that can be very useful for managers in bureaucracies and hierarchical organisations.

The idea that people naturally organise themselves into hierarchical, or stratified, managerial systems in organisations reflects the reality of local government.  This is reinforced by legislation that focuses accountability on top management.  They are held responsible for the work outputs of people in the organisation and this responsibility cascades downwards through the management hierarchy.

Opponents of hierarchical ‘command and control’ organisations, particularly John Seddon, have reasons for their position, which are frequently validated by the behaviour of public organisations.  It doesn’t change the fact that senior management needs a way to ensure work outputs meet the expectations of the various sources of accountability.

Each of us has different capabilities and limitations. Jaques says these individual differences need to be taken into account in organising work – everyone needs to work at a level that corresponds to their capacity.  They also need to have their role and status clearly defined in a way that is acceptable to them.  Therefore, workplace boundaries and authority need to respond to these human and social needs in order to maximise the effectiveness of the organisation.  This resulted in the division of work in stratified systems theory.

I doubt any of this is news to you.  The challenge is how leaders act on this understanding to create an effective, harmonious and productive workplace.

This is where Jaques (writing in collaboration with Stephen Clement) challenges the current thinking about leadership.  They argue that charismatic leadership is not the key to organisational success and that leadership needs to be ‘requisite’ for a particular time and place (i.e. requisite leadership).  They say managerial leaders require the following qualities to be effective in managerial work:

  1. The level of cognitive processing power necessary to carry out the level of work complexity of their role.
  2. A strong sense of value for their work and the leadership of others.
  3. The appropriate skills and knowledge in their work, plus experienced practice.
  4. The necessary wisdom about people and things.
  5. The absence of abnormal emotional characteristics that disrupt their ability to work with others.

I find this list interesting as a checklist for myself and other leaders. Points 2 to 4 are typical of what anyone would expect from a senior manager and leader.  It is points 1 and 5 that raise interesting questions.

  • How do you determine the cognitive complexity of work and the cognitive capability of a person to carry it out?
  • What are abnormal emotional characteristics?

On the first question, Jaques believes that highest level of task complexity in each stratum (level) needs to be within the cognitive capabilities of the individual given the work.  The cognitive complexity of work is determined by the number, ambiguity, rate of change, and interweaving of variables involved.  Cognitive capability relates to the ability of an individual to organise information to make it available for doing work.  The reality is that some individuals are able to deal with more variables and process more information in any given period of time.

In relation to emotional characteristics, Jaques and Clement believe that a manager’s emotional make-up has little effect on their ‘in-role leadership’ performance, unless they exhibit an emotional extreme.  They say there are an infinite range of possible and acceptable behaviours and go on to  describe emotional extremes using examples, such as reflection becoming inability to decide, or tenacity becoming stubbornness, or critical evaluation becoming paranoid suspicion.

This is necessarily a brief overview of some of Jaques’ work.  It provides a way of thinking about managerial leadership (I quite like that term) in our organisations that reflects the legislated responsibilities of local government, the way people are at work, and how it is possible for us to be more accountable and effective.

Jaques, E. and Clement. S., D. (1991) Executive Leadership – A practical guide to managing complexity. Blackwell Business, Cambridge.

Jaques, E (1976) A General Theory of Bureaucracy. Heinemann, London.

217 – What should our Executives spend their time doing, and why don’t they?

By Lancing Farrell                                                                            1800 words

time

Image: http://content.wisestep.com/why-your-resume-should-be-one-page-good-reasons

This is the question that crossed my mind recently when discussing time management with a colleague who is part of an Executive team that is reviewing use of their time. They have engaged a consultant to work with them individually to understand how to best use their time. Like every Executive team, they always have more work to do than the time available to do it.

After keeping a time diary in 15 minute intervals for two days and coding up each activity according to musts, wants, work that should be delegated, and work that shouldn’t be getting done at all, it became apparent to my colleague that more efficient use could be made of available time but this wouldn’t solve the problem. Optimising use of time wouldn’t provide enough to do all the work. The nature of the workload needed to be examined.

In part this examination was prompted by the time management consultant suggesting that the time spent by my Executive colleague in meetings with direct reports could be reduced or the meetings held less often. In considering this idea, she realised that this was some of the most valuable time they spent each week. She also realised that (at the moment) she didn’t have a better use for that time. What could she do with the time that would be more valuable than influencing and helping her direct reports? This realisation started her thinking more broadly about the work she was doing.

This led her to re-examine Elliott Jaques’ work on requisite leadership. In particular, Jaques’ concept of time defining the degree of complexity in managerial leadership roles. The idea that every task has a target completion time and that the longer the time-span of discretion for tasks, the more complex the role, struck her as relevant in working out where she needed to spend her time and effort.

Jaques’ describes seven levels of organisational hierarchy, each with a different time-span of discretion ranging from 3 months to 50 years. He calls them requisite levels. Based on this, my colleague sketched out the relationship between Jaques’ theory and her work and time allocation challenge in the following table. Continue reading

215 – From the Archive: Creative ways to make your capital expenditure target. Some ideas.

Posted by Whistler                                                                          570 words

capital expenditure graph

Originally posted 20 April 2015

Yes, it is that time of the year when our engineers and accountants become highly creative.   By June 30 they will need to explain whether or not the targeted amount of capital works has been completed. Often the target is expressed as simply as ‘90% capital program completed’. Usually it is a KPI for the CEO and senior managers. That makes it an important target.

So, why the need for such high levels of creativity?

Delivering 90% of the planned capital works is harder than it sounds. Many councils would have averaged around 60% to 70% over the last ten years. This is partially explained by growth in capital expenditure that has exceeded the organisational capacity to deliver. Another part of the explanation is that capital works programs have become more diverse with more people participating in the planning and delivery across the council. As a result, projects have become more complex and people with inadequate project management skills are often involved.   Finally, councillors have become much more involved and the capital works program will now have projects that councillors, sometimes in response to community submissions to the budget process, have included – often at the last minute.

As the capital works program has grown, become more complex, involved more people with less skills, and started to include projects without adequate pre-planning or feasibility analysis, especially if they require community engagement, it has become much more difficult to deliver the whole program. But the target remains.

This is where the creativity occurs. Continue reading

213 – What insight does the capability review of one council and the sacking of another give you into local government culture in Victoria?

Posted by Colin Weatherby                                                                         1500 words

insight light

Two interesting reports have been published in Victoria in the last 12 months – the Organisational Capability Review of Melbourne City Council in May 2015 and the more recent Commission of Inquiry Report into Greater Geelong City Council, released in March 2016. Each report provides an insight into local government culture.

As someone who has worked at three Victorian councils in the last 10 years, and who corresponds regularly with people working at another half a dozen councils, the insight is not surprising.  It reveals a deep malaise in the sector that has root causes in the political system, the ways our leaders are appointed, and general organisational leadership capability.

To begin, what are the discoveries in these two reviews of major Victorian councils? Continue reading

212 – How do you know if you work for (or if you are) a pretend manager?

Posted by Whistler                                                                                                          1200 words

pretend manager

Have you ever wondered if your manager is for real? Have you ever wondered what they do all day? Has their contribution to work been difficult to see? Maybe you have a pretend manager.

No, this is not a manager bashing exercise. As a long-term local government manager, I respect the effort put in by many of my colleagues. But there are some managers who are just not up to it. And they are not always managers.

Lancing Farrell discussed an interesting book in the last post. I also took a trip down memory lane and re-read parts of The Third Principle. Neville Lake is a practical, perceptive and prescient person. I just love alliteration. His chapter on optimising managers, highlighted by Lancing Farrell, reads as though he looked into the future to see the local government of today. In particular, the sections on eliminating pretend managers and pretend managing resonated with me.

To optimise managers, Lake says you need to eliminate pretend managing and pretend managers.

To start with, Lake says to look for the managers who think their job is to go through the motions of managing and just tick off boxes. Continue reading

210 – Is innovation over-rated in local government?

Posted by Colin Weatherby                                                         1100 words

patched road

I was recently reading an article in Aeon magazine entitled ‘Hail the maintainers’. The central idea is that ‘capitalism excels at innovation but is failing at maintenance, and for most lives it is maintenance that matters more’. I think you could replace ‘capitalism’ with ‘local government’, although I am not sure that we are excelling. We are certainly preoccupied with trying to be innovative (or at least being seen to be innovative).

The authors, Lee Vinsell and Andrew Russell, believe that innovation is the dominant ideology of our era. Pursuing innovation has inspired both technologists and capitalists. It has also attracted critics.

“What happens after innovation, they argue, is more important. Maintenance and repair, the building of infrastructures, the mundane labour that goes into sustaining functioning and efficient infrastructures, simply has more impact on people’s daily lives that the vast majority of technological innovations. “

The idea that local government must be more innovative reflects the willing (and often mindless) adoption of populist ideas from the private sector by local government.   After all, being innovative is sexier than doing what we have always done but making sure we do it well. Continue reading