Category Archives: services

35 – Accountability in local government. Who are we really accountable to and why does it matter?

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Posted by Lancing Farrell                                                                                              650 words

The demands for accountability in local government are continuous. The challenge is that they come from many different places and focus on different aspects of performance.   Sometimes they create conflicts. For example, strict adherence to procurement policies can remove the flexibility required to respond quickly and meet complex community needs. But it keeps the Audit Committee happy. A community interest group gains political support for a project that hasn’t been included in the budget. But the councillor and their constituents are happy. I am sure you can think of other examples. Continue reading →

34 – Middle managers in local government: the ‘scrapers of burnt toast’?

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Posted by Colin Weatherby                                                        620 words

burnt toast

This is the phrase used by Peter R. Scholtes in The Leaders Handbook to describe the work of many middle managers as ‘expediters or troubleshooters’ in organisations that have yet to eliminate waste and create ‘efficient, smooth, uncluttered flows of work’.   He says that in a ‘flat’ organisation the layers of middle management have been removed as part of the focus on eliminating waste. In an efficient system, they are unnecessary and non-value adding roles. I am sure he doesn’t think that middle managers aren’t required.  You just need less.  It is an interesting idea.

Scholtes says that removing layers as part of improving organisational performance reduces opportunities for promotion. As a result, people leave to find less efficient organisations where their skills in ‘expediting and troubleshooting’ are required to deal with inefficiencies and waste to make the system work. I started thinking about my role and the role of colleagues in middle management, and what we spend each day doing. What do we talk about when we meet in the corridors? Are we mostly adding value or just spending our time making dysfunctional systems work? Continue reading →

33 – Developing an organisational performance measurement system. Some ideas.

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Posted by Lancing Farrell                                                                                     820 words

I have been thumbing through ‘Improving Performance – How to Manage the White Space on the Organisation Chart’ by Geary A. Rummler and Alan P. Brache, in particular the chapter about performance measurement. In it they describe measurement is the single greatest determinant of an organisation’s effectiveness as a system, and as the primary tool for ‘communicating direction, establishing accountability, defining roles, allocating resources, monitoring/evaluating performance, and taking improvement action’.

I haven’t seen a local government that has actively used performance measurement this way. Instead, it tends to be driven by external accountability requirements. We use the performance measurement that we do to convince others that we are doing what we should. Continue reading →

29 – Local government shared services. Is it the silver bullet for rate capping? – Part 2

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Posted by Colin Weatherby                                                                         950 words

In the previous post, I discussed economies of scale and the cost savings possible through shared services. This post continues the discussion, starting with the implications of front and back office separation.

The history of ‘back office’ and ‘front office’ separation is worth some discussion. According to Seddon, it began with an article by Richard Chase in the Harvard Business Review in 1978. In the article, Chase recommends separating the ‘high customer contact’ and ‘low customer contact’ elements of the service system because of the different operations involved. Low customer contact operations are more efficient and, as a result, have lower costs and it makes sense to isolate them from the disruptive effects of customer interactions if it can be done without sacrificing service effectiveness. However, service effectiveness is exactly what Seddon believes has been lost in many of the cases he cites. Continue reading →

28 – Local government shared services. Is it the silver bullet for rate capping? – Part 1

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Posted by Colin Weatherby                                                                                         620 words

The Victorian state government plan to cap municipal rates has revived discussion about shared services. Some leaders see shared services as a silver bullet to reduce costs. What potential do shared services have to help councils respond to rate capping?

The article Government shared service back in vogue notes that shared services are usually justified by business cases promising operational efficiencies and cost savings. However, the article cites numerous examples of shared services that have failed to deliver.

In 2011, the West Australian government disbanded its Office of Shared Services centre after an Economic Regulation Authority review found the project was over budget and unlikely to deliver promised savings of $57 million a year. Instead the project had cost $401 million and achieved minimal savings.

The Queensland Health payroll upgrade was developed under the auspices of a shared services group. Originally with a budget of $98 million, and due for completion in July 2008, the project was the subject of a royal commission last year and is expected to cost taxpayers $1.2 billion by 2020.

In The Whitehall Effect John Seddon documents examples of similar failures in the United Kingdom. The track record of failure suggests that there are significant risks associated with shared services. So why are they regularly on the public sector reform agenda? Continue reading →

26 – The first 25 posts. What have you missed?

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Posted by Lancing Farrell                                                                                              1100 words

Writers have posted 25 times since the start of the year. A number of themes and ideas have been discussed. This post provides a brief overview.

The goals are set out in post 1 – track current issues and discuss the issues that are ‘everlasting, widespread and insoluble’ (using the least amount of words). A range of issues have since been covered from the daily media, day to day work life, and the things people often talk about but seldom resolve.

Post 2 and 5 discuss local government services – what we do and how we can define it. The conclusion is that local government needs to provide services that fit within legislated requirements, are responsive to broader community needs and expectations, and meet the individual purpose for each person receiving a service. Each service can be defined as a cross-functional process or value chain.

In post 3 the complexity evident in local government is discussed, including the involvement of customers in service delivery, the variability they introduce, the difficulty measuring service quality or setting service goals and measures, and the impossibility of separating service delivery from politics.

The impact of training on performance is discussed in post 4 in response to media criticism of the Australian government public service for its spending on training. The post suggests that understanding, documenting and improving processes would yield more benefit than providing more training for most councils.

In post 6 the differences between customers, clients, citizens, residents and ratepayers are discussed. Understanding which role someone has chosen to take in an interaction is important in determining the value they expect. This can be useful in differentiating between public and private value expectations.

Post 7 looks at public service job cutting and the link to productivity. Some key messages from the Centre for Policy Development report False Economies: Unpacking public sector efficiencies are discussed. The post identifies the importance of defining public value so that any changes to resource levels can be made in the knowledge of the impact they will have on the value produced.

Post 8 presents an imaginary script for an episode of Gordon Ramsay’s ‘Kitchen Nightmare’ in which he assesses the performance of local government as if it were a restaurant.   Hopefully it is both entertaining and thought provoking. What would Gordon Ramsay say?

In post 9 some emerging characteristics of people and councils are discussed. Obligatory empiricism, oblivious narcissism, and consensual lying are put forward as reasons why councils always seem to learn everything from scratch, leaders set out to meet their own needs first, and why people tell others what they want to hear for the sake of convenience.

Post 10 draws a ‘line in the sand’ with a discussion of the changes that have impacted in Victorian local government since the 1990’s. Part history lesson and part explanation of the present, the post concludes that the most influential change has been to the tenure of the CEO and their increased dependence on the goodwill of their council for survival .

Planning in local government gets a thorough airing in posts 11, 12, 18, 19, and 20. In posts 11 and 12 the current organisational planning processes is critiqued. Posts 18 and 19 suggest ways to better integrate planning. Post 20 discusses the role of the Council Plan.  All posts provide commentary on how to develop plans that are realistic, achievable and focused on delivering the value expected by the community. Constraints identified include the need to work within legislated requirements and the need for leadership to really understand ‘the business’ to be able to implement a ‘top down’ and ‘bottom up’ planning process.

In post 13 the role of policies and strategies is discussed. Are they becoming convenient but ineffective solutions to difficult problems, devices to avoid doing something that needs to be done, or just a way to be seen to be doing something?

Post 14 is an attempt to explain why councils stick with conventional organisational structures and avoid dealing with cross-functional processes; why systems seek to control risk and increase compliance without regard for producing public value; and why council culture encourages people to avoid making decisions. The discussion centres on what an organisational culture survey, an ABEF organisational self-assessment, and the Executive’s risk appetite can reveal.

Four books that should be read by every leader in local government are discussed in posts 15 and 17. The books are Recognising Public Value by Mark H. Moore, The Whitehall Effect by John Seddon, Improving Performance – How to Manage the White Space on the Organisation Chart by Geary A. Rummler and Alan P. Brache, and The Leaders Handbook by Peter R. Scholtes. Each book has a different focus and there is a mixture of public sector and business reading.

Post 16 discusses the rate capping proposed for local government in Victoria. The history of rate capping in Victoria and the long-term effects of it that are apparent in NSW provide a backdrop to a discussion about what councils can do in response. This post covers the potential for shared services and the potential impact on capital and operating budget cuts.

In post 21 the way councillors feel about their role is discussed. Do they feel inundated and manipulated or respected and influential? The difficulties they face as volunteers and in becoming skilled in their role, working together in an adversarial system, and coping with very demanding workloads, are covered. The message is stop complaining and support them more effectively.

What does a high performance local government organisation (HPLOGO) look like? In post 22 a methodology is proposed to define and create a HPLOGO. Based on the work of Andre de Waal, a set of characteristics of a HPLOGO are described (as actions) and prioritised.

Post 23 is a bit tongue in cheek. It is an attempt to pick up on the ‘chip on the shoulder’ prevalent in some parts of local government. Is local government a plaintive country tune or a majestic aria?

In post 24 an article by Frank Ostroff from Harvard Business Review (Change Management in Government) is discussed in relation to making high performance happen. He describes four unique barriers to change in the public service related to leader skills, leader tenure, rules that create inflexibility, and stakeholder resistance to reform.

Finally, post 25 looks at local government budgeting and how it is focussed on the past and has difficulty coping with improvement and innovation.   The need to balance investment in compliance with improving customer service and developing new services is discussed with reference to Christopher Stone’s work on public sector efficiency.

25 – Budgeting in local government. Is it capex, opex or a new initiative?

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It is budget time again. In conjunction with ‘planning time’ (see posts 11 and 12) councils are starting to compile their proposed budgets for 2015/16. Capital bids are being evaluated to determine ‘logistically’ whether they can be completed within the financial year and ‘strategically’ whether or not they should proceed. Recurrent budgets are being submitted by managers, either built from a zero base or simply last year’s budget with the Consumer Price Index (CPI) increase. Councils will be comparing the amounts requested with the estimates in the long term financial plan to see whether they match. So where is the problem?

What if you have had growth in demands for services? Service levels may have to be increased in response to community needs. More services may be needed to cater for population growth. What if you have had significant increase in the number of assets to be maintained and renewed? More parks, more roads, more buildings. Somewhere in between the funding available for capital and recurrent budgets sits the ‘new initiative’ (NI) funding that is set aside for budget or staff increases in the recurrent budget. Councils know that costs can increase by more than CPI. They just don’t cope with it very well.

For starters, the amount available for NI’s is usually inadequate and is over bid by the organisation.  It is not unusual for $1 million to be available and for bids to add up to $3 million or more. When this happens there are often no predetermined criteria for prioritising amongst the bids. The orderliness of the budget process then comes under pressure. When criteria are developed, they struggle to effectively assign priorities. How do you decide whether expenditure to mitigate risks or increase compliance is more important than making efficiency or performance improvements to existing services? What about investment in developing new and better services now and for the future?

As you can imagine, local government will tend to eliminate risk. So the first category of NI’s are usually funded. Councils also like to satisfy the community, so improvements to services the community says are important but performing below expectations, will also be funded if at all possible. The last priority to be funded, unless there is a political imperative, is new and better services. This correlates with one of Christopher Stone’s findings in his report False Economies – unpacking public sector efficiency, that ‘two significant barriers to public sector innovation are an overly risk averse orientation within organisations, and a lack of resources invested in developing and implementing innovative ideas’. The whole process is hardly a sure-fire way to ensure that the available financial resources are allocated in the way that best meets community needs now or in the future.

Part of the solution lies in a better planning process that actively considers the relative benefits from investment in risk reduction, service improvement or new services. In a business balancing these considerations is essential. Owners and managers must ensure that there is sufficient investment in compliance, and satisfying customer needs, and developing new services for the future. Why not local government?

Posted by Whistler

Stone, Christopher, 2014. ‘False Economies – unpacking public sector efficiency’.

24 – High performance in local government. Part 2 – How can you make it happen?

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In Part 1 I talked about what a high performing local government organisation could look like. In this post I look at how you can improve performance to become high performing. Change management is a buzz phrase in local government at the moment. Everyone in leadership seems to accept that there is a need for change but they can’t agree on how to do it.

Frank Ostroff has some good advice for change agents in the public sector. He says that sustained performance improvement isn’t hampered by failure to identify solutions; indeed, he suggests they are often straightforward. In Part 1 made a list of 24 actions that you could start with to create a high performance local government organisation. Why not just implement them? Part of the answer lies in what Ostroff describes as the four unique obstacles to change in public services.

  1. Leaders are not appointed on the basis of their commitment or experience in reform. Instead, they are appointed for their ‘command of policy, technical expertise or political connections’.
  2. Leaders are appointed for relatively short periods and have limited time to see reforms through to conclusion. Therefore, they tend to focus on quick policy reforms.
  3. Rules covering activities such as procurement, personnel, and budgeting put in place to prevent wrong-doing have made government inflexible. The penalties for failure are also greater than the rewards for exceptional performance.
  4. Everyone has a rightful stake in government activities. Almost any reform is likely to meet with resistance.

I know he is talking about government in the US, and there are some significant differences in Victorian local government. But there are also strong similarities. His four obstacles are just as prevalent, even if it is for some different reasons.

Ostroff provides some insights into the characteristics of successful public service reforms. He describes five principles and illustrates them in some detail with cases. His first principle is to ‘improve performance against mission’. This resonates with the work of Mark Moore about the creation of public value. As with Moore, he says that the mission should be the focus. Improvement in performance achieving the mission (i.e. creating the required public value) needs to be the fundamental objective of the reform program. This makes a lot of sense in local government, where the ‘why’ often becomes unclear or generic.

His second principle is to ‘win over stakeholders’. This is important within and outside your organisation to create a broad support base for reform. His third principle is to ‘create a roadmap for reform’. He suggests three phases; identify performance objectives; set priorities; and roll out the program. It is essential to formulate a vision and set a clear path for reform.

The fourth principle is to take a comprehensive approach. He relates reform to organisational redesign involving integration and alignment of leadership, structure, processes, infrastructure, people and performance management. This concurs with Rummler and Brache and their thinking about the ‘infrastructure’ required for sustained performance improvement, as opposed to episodic campaigns. This involves seeing the organisation vertically and horizontally. They talk about the various levels of an organisation (vertical) and the performance needs (horizontal). I have reproduced their ‘nine performance variables’ diagram below.

the 9 performance variables

The performance needs must be met by the organisational leadership to ensure that work flows smoothly across boundaries. I think that taking a comprehensive approach is particularly good advice for local government, which seems to naturally form silos based on disciplines or functions. Failure to integrate or align is often the reason that reform is necessary.

The last principle is about the importance of being a leader, not a bureaucrat. Ostroff believes that public service managers are inherently respectful of barriers and may hesitate to remove them. There needs to be a readiness to demolish barriers to reform. He says that they are also likely to have to establish trust and demonstrate their sincerity. The failure of successive reforms often leads to cynicism, which needs to be overcome.

Ostroff cautions of the need to be aware of present realities, respect the complexity of what you are trying to do, and to hold people accountable for both results and their commitment to the reform effort. These are key points for local government reform. Present realities include organisational culture and its resistance to change. The complexity inherent in local government activities presents special challenges during a period of reform. Finally, the lack of effort to measure performance and use results to improve seems to be a hallmark of local government. In a reform process there must be accountability if it is to endure once the reform has been implemented.

In a nutshell, formulate your vision, take your present situation into account, seek the support of your stakeholders, set a clear path, be mindful of the complexity in what you are doing, and hold people accountable. Good luck.

Lancing Farrell

Ostroff, Frank   2006. Change Management in Government, in Harvard Business Review, May.

Rummler, Geary A., and Brache, Alan P. 1995. Improving Performance – How to Manage the White Space on the Organisation Chart.

22 – High performance in local government. Part 1 – What could it look like?

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I think this is a good question. In fact, a very good question. People often talk about ‘best practice’ and ‘performance improvement’ without ever describing how it relates to high performance and what it would look like if it was achieved. Interestingly, the Australian Government Public Service Commission recently published on high performance organisations. This indicates that high performance is becoming a topical issue for the public sector.

As a methodology for describing a high performance local government organisation (HPLOGO) I have used Andre de Waal’s paper ‘The Characteristics of a high performance organisation’ and selected my ‘top 3’ characteristics for each of the 8 elements he describes in the HPO framework. These are the main characteristics that I believe would be present in a HPLOGO. More importantly, this is where I think you should start if you want to create one.   I have limited myself to 24 actions because it is probably already too many. To help act on this idea I have written each characteristic as an action.

To begin, it is important to understand the framework developed by de Waal. I have reproduced it below.

HPO framework

The idea is that the elements influence the degree to which members of the organisation will exhibit performance driven behaviour, which in turn determines whether it is a HPO. Here goes.

Organisational design

  1. Simplify and flatten the organisation by reducing boundaries and barriers between and around units.
  2. Stimulate cross-functional and cross-organisational collaboration by making team work and collaboration the top priority for management.
  3. Immediately realign the organisation with changing internal and external circumstances by setting up an adaptable business model.

What characteristics didn’t get a mention? Foster organisation-wide sharing of information, knowledge and best practices. Not because I don’t think it is important, but it would come next.

Strategy

  1. Align strategy, goals and objectives with the demands of the external environment.
  2. Provide clarity and a common understanding of the organisation’s direction and strategy.
  3. Create a strong vision that excites and challenges based on a ‘big idea’.

What characteristics didn’t get a mention? Lots. Again, this was not because I don’t think it is important. They would come next:

  • Set clear, ambitious, measurable and achievable goals.
  • Balance the long-term and short-term focus.
  • Adopt a strategy that sets the organisation apart (I think this is less relevant in local government).

Process management

  1. Continuously optimise processes by connecting the entire value chain.
  2. Continuously simplify and improve all organisational processes to improve responsiveness and eliminate unnecessary work.
  3. Deploy resources effectively to activities that create value.

What characteristics didn’t get a mention? Lots again:

  • Measure what matters.
  • Create highly interactive internal communication.
  • Report the financial and non-financial information needed to drive improvement to everyone.
  • Strive to be a best practice organisation.
  • Continuously innovate processes and services.

Technology

  1. Apply user-friendly ICT tools to increase usage.
  2. Implement flexible ICT systems.

What characteristics didn’t get a mention? None.

Leadership*

  1. Commit to the organisation for the long haul and balance common purpose with self-interest.
  2. Live with integrity and lead by example.
  3. Hold people responsible for results and be decisive about non-performers.
  4. Apply decisive, action-focused decision-making.

*  I couldn’t pick just 3!

What characteristics didn’t get a mention?

  • Set high standards and stretch goals.
  • Maintain trust relationships with people at all levels in the organisation.
  • Allow experiments and mistakes.
  • Develop an effective, focused and strong management style.
  • Assemble a diverse and complementary management team and workforce.
  • Grow leaders from within.

Individuals and roles

  1. Align employee behaviour and values with organisational values and direction.
  2. Engage and involve the workforce.
  3. Create a learning organisation by continuously investing in training.

What characteristics didn’t get a mention?

  • Create a safe and secure workplace (I have assumed that this is a given)
  • Develop people to be resilient and flexible.
  • Attract exceptional people with a can-do attitude who fit the culture.
  • Master core competencies and stick to them.

Culture

  1. Establish clear, strong and meaningful core values and make sure they are widely shared.
  2. Develop and maintain a performance driven culture by fighting inertia and complacency.
  3. Create a culture of transparency, openness and trust through shared understanding, by sharing information, and fostering informality.

What characteristics didn’t get a mention?

  • Empower people by giving them freedom to decide and act.
  • Create a shared identify and sense of community.

External orientation

  1. Continuously strive to enhance customer value creation.
  2. Grow through partnerships and being part of a value-creating network.
  3. Maintain good and long-term relationships with all stakeholders.

What characteristics didn’t get a mention?

  • Monitor the environment and respond to shifts and opportunities.
  • Only enter new activities that complement the organisation’s strengths.

You can probably see a pattern emerging. My focus in creating a HPLOGO would be on value creation, systems and processes, integration and alignment, measurement and accountability, the short and the long term, and engagement and trust.

Lancing Farrell

Australian Government Public Service Commission (AGPSC) 2014. (http://www.apsc.gov.au/publications-and-media/current-publications/human-capital-matters/2014/high-performance-organisations/2014/high-performance-organisations).

de Waal, Andre 2007. ‘The Characteristics of a high performance organisation’ (http://www.andredewaal.eu/pdf2007/HPO-BSS2007.pdf)

19 – Integrated planning in local government. Some questions and answers. Part 2.

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As discussed in the previous post, integrated planning involves each level of planning occurring in the correct sequence with goals cascading between plans to create alignment.  Here are some further thoughts.

An integrated planning process starts by effectively linking organisational strategy with planning.  Stace and Dunphy say that a ‘well argued, well documented strategic plan’ is not a strategy.  Instead, they say strategy is an ‘active process of thinking and communicating, generated at the corporate and strategic business unit levels, by which leaders gain the intellectual, emotional and behavioural commitment of their people in stretching the limits of the corporation’s ability to achieve success’.  It is the set of understandings that guide the direction and behaviour of the organisation.  Mankins and Steele believe that often strategic direction is established in spite of the strategic planning process, not because of it – “… with the big decisions being made outside the planning process, strategic planning becomes merely a codification of judgements top management has already made, rather than a vehicle for identifying and debating the critical decisions the organisation needs to make to produce superior performance”.  In local government, strategy arises from long term community plans and the day to day activities of the Council and the Executive.

So, integrated planning enables the continuous review and creation of strategy to influence plans.

An integrated planning process has one agreed set of organisational priorities. Resources are allocated to those priorities and the collective effort aims to implement those priorities and measure success in doing so.  Building an organisational plan by adding together the strategies and actions from multiple, independently created plans is unlikely to achieve this outcome. A top down approach is initially required to set high level parameters (i.e. the strategy) that planning then takes into action.  Each part of the organisation can use those parameters to create plans that cover their contribution towards achieving organisational priorities.

So, integrated planning occurs when each planning unit is working within shared parameters to achieve common strategic priorities.

An integrated planning process will link actions across functional areas.  The ‘silo’ effect commonly described in local government, needs to be overcome to achieve high performance.  If each department plans separately without clear strategic priorities and shared high level parameters, there will be a functional bias as each department optimises their activities.  There will be competition for the resources available within the common resource pool.  A focus on cross-functional processes when planning will help to integrate the work to be done in implementing strategy.  This will require processes to be identified, understood and owned, so that they can be properly considered in plans.

So, integrated planning recognises and reinforces cross-functional processes.

Planning isn’t integrated simply because we all do it at the same time, and integration isn’t achieved simply by joining together multiple independent plans.  A planning process is required that is top down and bottom up, and driven by functions (or departments) and processes.  The planning framework prescribed in NSW local government is a really good starting point.

Lancing Farrell

Mankins, Michael and Steele, Richard 2006. Stop making plans, start making strategy in Harvard Business Review, January.

Stace, Doug and Dunphy, Dexter 2007. Beyond the Boundaries – leading and re-creating the successful enterprise.