230 – A way to show performance is determined by the system.

600 words (3 minutes reading time)                                                         Colin Weatherby

95 - 5 Vanguard

Source: Vanguard video ‘Tactics for helping people learn about the 95:5 principle, Part 1′

There have been several posts about performance appraisal and the ineffectiveness of systems designed to improve the performance of individuals. This posts picks up on the key theme of those posts – i.e. a person is not totally responsible for their performance in a system of work and managers need skills in understanding and improving the system.

This has been a compelling idea in my thinking and my work. Despite the many criticisms and problems encountered with people and their work in local government, I have met very few people who come to work to do a bad job. Many years of watching people work and talking to them about their work had led me to conclude that it was the way they were asked to do the work and the tools they were given that created most of the problems. I just didn’t know how to describe it.

Then I read Peter Scholtes’ book ‘The Leaders Handbook: making things happen, getting things done’, and his quote from Edwards W. Deming struck a chord with me:

“The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance.”

This book reinforced that I was on the right track. It wasn’t until I recently subscribed to Vanguard and accessed some of the materials available for 10 weeks to new subscribers that I found a simple way to illustrate that performance is mostly determined by the system of work. As I am writing this, it still seems odd to me that there is a need to prove something that is so self-evident.

In two short videos the Vanguard team describe a simple and effective way to show people how a system affects performance. They use the example of a washing machine repairer (an engineer) being called to fix a washing machine at a home.

They start by asking what the purpose is in the home owner calling the repairer. In this case, ‘fix the washing machine’.

Then they describe the system – ‘home owner calls repair company, talks to call centre staff and describes the problem, the call centre then makes an appointment for the repairer to visit, they order replacement parts based on the problem described to them, the parts are sent to the repairer, the repairer comes to the home’. It could be different process but this covers a simple system.

However, the repairer isn’t able to make the repair as scheduled. You are asked to write down the reasons that might happen. I have taken the liberty of taking a screen shot from the video (the image above) where some of those reasons are listed. In this image, they have gone a step further and coded each reason with the cause – the circled ‘s’ is a system reason. There will be a circled ‘e’ for engineer reasons, and there will be some reasons that are shared between the system and the engineer.

The numbers of reasons attributable fully or partially to the system prove Deming’s point. Most reasons will be to do with the system. I am keen to try it for other situations relevant to my work.

The most interesting part of the video comes at the end when the narrator says that if you are the manager responsible for the repairer, and you think you need to act on the people, you will sit down at this point with the repairer and talk to them about their performance. Perhaps a new objective about trying harder will end up in their performance plan. I can imagine that discussion – I have been part of them.

Alternatively, if the manager thinks they need to act on the system they will start to spend time in the work to look for the barriers to the repairer achieving the purpose. And they will help them to overcome those barriers.

224 – Risk taking in local government

By Colin Weatherby                                                                                               900 words

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Lancing Farrell raised several important issues in providing advice to a colleague regarding risk management. How does a council balance the pressure not to take risks and fail, with the competing pressure (often from the same sources) to take risks and meet demands to create new value?  

Risk is an interesting concept and there are various definitions. I like to think of it simply as the uncertainties related to achieving your goals. It is about the hazards along the pathway as you make your way towards your destination.

Businesses that don’t take risks will fail. They become uncompetitive or customer satisfaction drops. Either way, they lose business to competitors taking risks to create value that customers want and will pay for. We can all think of the companies that have taken big risks in redefining a service or product to create a new market.

You are probably wondering what this might have to do with local government. Aren’t we just doing what we have always done?

Many councils are. Whether they should be, or whether they will be able to continue to do so, should be questioned. We now live in the ‘age of the customer’ – residents want personalisation, mobility, self-service, rapid response, and efficiency (efficiency for them, not the council). The variability introduced by customers must be quickly and effectively absorbed by the organisation. Complexity, by its very nature, creates risks.

In conjunction with mandated limits on prices (the rate cap) and growing numbers of customers (as Lancing points out, Melbourne is growing rapidly), the rising expectations of residents means that councils must do things differently. Different usually involves risk taking.

I recently attended a training session on developing an organisational risk appetite. It showed me how councils could identify hazards and manage risks differently, yet still satisfy the pressure to stop things going wrong while meeting the demand to create new value. It needs a re-think and a more sophisticated approach to risk and compliance. Continue reading

223 – Risk management in local government

By Lancing Farrell                                                                                                  730 words

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Is there a delegation for taking risks at your council? Does your council have a risk appetite? Are the strategic risks that have been identified appropriate? Are the operational risks relevant? Does the audit program decrease or increase risk?

These are questions that a colleague raised with me recently when trying to understand the way risks were managed at their council. I suggested they look at their risk management framework – how is risk assessed in terms of likelihood and consequence. This should explain the inherent risk, current risk rating, the target risk and rate the effectiveness of controls. It can make interesting reading.

Next, I suggested they look for their organisations lists of key risks – strategic and operational. These are usually in the risk register. This isn’t always easy to find. Someone in the risk department will have it. Most councils will have up to 8-12 strategic risks. There will be many more operational risks.

Councils are very risk aware. Some people describe it as risk aversion. I think this is driven by the multiple accountabilities that councils live with – the Minister for Local Government, the Ombudsman, the courts, the media and the community. Sometimes it is hard to know who is going to take issue with what you have done. Continue reading

222 – Execution – the discipline of getting things done. Read it.

By Colin Weatherby                                                                               1200 words

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Occasionally someone tells you about a management book that provides insight and leads to a new understanding of what you do every day. Or what you don’t do. This is one of those books and every leader in local government should read it.

Larry Bossidy and Ram Charan have combined their knowledge of practice and theory to provide advice on linking the three core processes that they believe are at the heart of every organisation – people, strategy and operations – to get things done.

Failure to execute is a common criticism of local government. People often say that councils are overly bureaucratic, full of red tape, unable to make decisions or constantly changing them under pressure. I read the book not knowing what to expect. It is a book that really shouldn’t be necessary. After all, organisations only exist to do something and doesn’t doing something require execution?

It doesn’t take long before you realise the book is not just about doing something, it is about doing what is needed to meet your commitments and achieve the results you have promised. It is about helping leaders make commitments outside their organisation that can be delivered and ensuring that commitment obtained inside their organisation is followed through to execution. Continue reading

204 – Rate capping: an update.

Posted by Whistler                                                                         900 words

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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

173 – A series: Managers as designers in local government. Part 4.

Posted by Lancing Farrell                                                                                              1000 words

Kano model Wikipedia

Kano’s model

This is the last post in this series. It looks at how design can be used for new services and their implementation in local government.

Roger Martin and Tim Brown provide a related but different view of design in organisations. They see it as helping stakeholders and organisations work better together as a system. This is a systems-thinking approach as much as it involves design-thinking.

They describe the evolution of use of design in organisations as the ‘classic path of intellectual process’ as each design process is more sophisticated than the one before it because it was enabled by learning from that preceding stage. As designers have become more skilled in applying design to shape user experiences of products, they have turned to ‘user interfaces’ and other experiences. Continue reading

65 – Service suppliers to local government. What do they do differently and why?

Posted by Parkinson                                                                                       350 words

integrated systems

It has always intrigued me that the major suppliers of services to local government operate quite differently. What are some of the differences and why?

The first difference that is obvious is the investment in enterprise management systems. Some are better developed and more integrated than others but all have a third party accredited quality (ISO 9001), safety (AS4801), and environment (ISO 1400) systems. They will also have a corporate operations manual and a management manual setting out company policy and requirements. Continue reading