225 – Why do we struggle to achieve capital expenditure targets?

By Lancing Farrell                                                                                                      1250 words

the planning fallacy.png

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

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207 – Mills, mines, refineries and networks – what do they have to do with local government asset management?

Posted by Lancing Farrell                                                                          1000 words

disruption

I was talking to a colleague who recently attended a well organised and highly informative national conference on asset management. It was a pity that only three people of the three hundred attending came from local government. The rest were from sugar refineries, steel mills, manufacturing, energy supply, defence, food production, mining, ports, railways, airlines, telephony and numerous other organisations from across Australia. Apparently there was a lot to be learned. So why was local government absent?

Part of the explanation lies in the competing asset management conference run annually by the sector in Victoria. It is well attended by staff from many councils as part of their professional development and to support a sector initiative. I suppose councils don’t see any value in sending staff to a conference that doesn’t focus specifically on local government assets or the way councils have chosen to manage their assets.

A conference theme was disruption. Often it is outsiders who create disruption because they see things differently.  Sometimes it happens when insiders are frustrated by the status quo and they venture outside the organisation’s comfort zone.  Unfortunately, many organisations and industries are incapable of disrupting themselves.  Attending conferences run by your industry is much more comfortable.

It was interesting to hear from my colleague about how other industries view their assets and what they expect from them in the way they are managed. One key difference is that private sector has productive assets that are owned and managed to create shareholder value (i.e. make profits). The value created by those assets is captured by the organisation that owns them. It is different for most public sector assets. Continue reading

176 – In-vehicle GPS – Part 2: How every council can have it.

Posted by Lancing Farrell                                                                              550 words

hurdles

In part one I discussed the features and benefits of in-vehicle GPS. Because councils deliver services at locations dispersed across a large geographic area and vehicle ownership is expensive and utilization is often low, in-vehicle GPS has the potential to provide significant benefits. It links the planning undertaken in asset maintenance systems to in-field work planning and delivery to ensure that resources are used efficiently to complete the planned work. The key barrier has been how to get in-vehicle GPS installed in all vehicles.

I think the trick to implementing in-vehicle GPS is the strategy and policy sitting behind it. Here are some tips. Continue reading

175 – In-vehicle GPS – Part 1: Why every council should have it.

Posted by Lancing Farrell                                                                                              1100 words

in vehicle gps

I remember looking at in-vehicle monitoring devices in the 1990’s. The technology was basic and there was no 4G network. Since then councils have flirted with in-vehicle GPS. As far as I know, no council in Victoria has installed it throughout their vehicle fleet. This is partially explained by the industrial relations implications (see the next post) but I think it is really explained by the lack of focus on customer service and productivity that pervades the sector. Rate capping will change that.  Most councils wouldn’t even be aware of the potential benefits from the technology. Hence this post.

So, what are the features and benefits of in-vehicle GPS that councils should be thinking about? Continue reading

113 – Improving service operations. Finish with service redesign.

Posted by Colin Weatherby                                                                         1300 words

service redesign board

The first post on improving service operations covered service action planning. Both posts have followed a discussion about service improvement with a colleague in which he described a process he has been using with operational staff to work out how their work can be improved. This post discusses redesigning services when that has been an action identified in the service action plan.

If the need to redesign services has been identified in the service action plan there is a good chance that all team members are on board and prepared to discuss some big changes. This is really a prerequisite for significant change in local government, otherwise there is a risk that you are just ‘revolutionising’ people and will have no long term effect.

Stage 2 – Service redesign.

The first step is to separate the services with different demands, operations typology and performance objectives (this has been the subject of an earlier post). Then related services are grouped together. The last step is to redesign services to integrate similar services and plan implementation of the new service. This includes risk analysis of key aspects of the service and planning the new supervisory role required to make the service design work. Continue reading

110 – Improving service operations. Start with a service action plan.

Posted by Colin Weatherby                                                                         1250 words

service brainstorming

I was recently discussing service improvement with a colleague. He described to me a two-stage process he has been using with operational staff in his team to determine how their work can be improved generally, and then how to re-design services if required.

It is an intensely practical two-stage approach to working with teams collaboratively to understand work and improve operations to get better customer outcomes.

The first stage involves bounded brainstorming by the whole work group, their Team Leader and the Manager to respond to the question – how can we do our work better? It is not intended to question whether or not services should be delivered, just how they can be improved. The process is intended to be inclusive and to quickly lead to action. The output is a service action plan.

The second stage involves redesigning services if this has been identified the way to make improvement. The redesign process is led by the Team Leaders and Manager using some simple reengineering and operations management tools. The output is a new service design.

Stage 1 – The service action plan Continue reading

77 – Operational excellence in local government. Does it matter?

Posted by Lancing Farrell                                                                        600 words

operational capability

In a recent discussion with a colleague she mentioned that in her previous employment outside local government they had set organisational performance goals for leadership, finances, relationships, safety and operational excellence.   Each area of performance was rated equally. It started me thinking about how little you hear about operational excellence in local government. Is that because it doesn’t matter?

I am sure that operational performance matters. Whether councils want to be excellent or not, I am less sure. I think that the reason it is seldom discussed is that few people have a real understanding of operations management or what excellence would look like or how to achieve it. Continue reading