By Lancing Farrell 1250 words
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 Danny 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
By Tim Whistler 1000 words
The summit offered an opportunity for those who are unfamiliar with the Vanguard method to hear about work that has been done in Australia by IOOF (a superannuation fund manager) and the County Courts Registry using the Vanguard method. Vanguard team members presented public service case studies from the UK.
It was an interesting event and it highlighted the potential for leaders to think differently and better understand how work is being performed in their organisation, what is happening in delivering value to customers, and how improvements can be made.
There were several issues relevant to local government in Victoria. Continue reading
Posted by Whistler 570 words
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
Posted by Lancing Farrell 1200 words
I recently rediscovered a book that I bought 17 years ago when it was first published. It is one of those useful management books that is an absorbing read when you buy it, and then it quietly sits on your shelf waiting for the day you really need it. It is now a book for the times with rate capping coming into Victorian local government.
Neville Lake’s central idea is that management practice has three fundamental organising principles – effectiveness, efficiency and optimisation. He believes that an organisation can be both effective and efficient but be sub-optimised. This leads to only 80% of its potential being realised.
The other 20% is trapped in processes that don’t work, management models that don’t deliver, and interactions with customers that fail to deliver expected value.
Having worked in local government for 30 years, I have to agree that we are sub-optimised organisations. Continue reading
Posted by Whistler 900 words
It has been some time since discussions commenced regarding the imposition of a rate cap on local government in Victoria. There have been a few earlier posts on the topic (see here, here, here, here and here). The rate cap has now been set and the process for any council seeking an exemption from the rate cap has been communicated. The Essential Services Commission has been effectively positioned as a regulator for local government. So what have councils been doing?
I would say not much. The requirement that the community support must be demonstrated if seeking an exemption, coupled with 2016 being an election year, has stifled activity across the sector. According to The Age newspaper 21 councils have indicated they may apply for an exemption. Some councils, including Melbourne City Council, have attempted to demonstrate community support for their rating strategy, which could support an application for an exemption from the cap.
The results from the few people’s panels held have been interesting but not unexpected. The community expects the council to use current resources well before asking for more. They want to see value for money before they will support asking people to pay more tax. Fair enough. Continue reading
Posted by Colin Weatherby 500 words
This is the title of a chapter in Fernández-Aroáz’s book ‘It’s not the How or the What but the Who’. It is also the title of a blog he posted for HBR.org . In it he discusses the unconventional candidate with exceptional potential. I was surprised at his honesty in discussing his personal ‘epiphany’ when he realized that, as a recruiter, he had been advocating a recruitment strategy that his own company did not follow.
Fernández-Aráoz starts the chapter by discussing his HBR.org blog post and the response it prompted. Many of the respondents described their frustration at recruiters who didn’t appreciate, understand, or even consider their track record. For many people who have pursued executive roles in local government this is not news.
Many councils or almost all recruiters play it safe. Continue reading
Posted by Whistler 400 words
The flip side of this statement is that if it is difficult or there is no budget, councils probably aren’t doing it. This is one of my most common bits of advice to residents. The reality is that councils can really struggle to do difficult things. It isn’t that they don’t want to. It is just that the system militates against it. It is worth thinking about the hallmarks of something that is difficult for local government.
It is often something that is new – something that the council hasn’t done before that has to be learnt. This takes time and effort, and can be risky. Someone could be upset by it. You might make a public mistake. I once worked for a council that wanted to be recognised as a leader, but only by doing things that other councils had already proven would work. Continue reading