Posted by Lancing Farrell 670 words
Image adapted from Slack, Chambers, Harland, Harrison, and Johnston 1998, Operations Management, 2nd Edition.
There have been a number of posts on aspects of customer service – who are our customers, customer-introduced variability, how do you listen to the ‘voice of the customer, internal customers , what Gordon Ramsay might think about council customer service, and captive customers. If there has been a thread through these posts, it has been the need to look at services from the customers’ viewpoint and to understand constitutes value for them.
The posts on value have discussed how to understand both private and public value – why do we provide the services that we do, the private-public value continuum, applying the public value scorecar , public value gap analysis, local government and commodity services, value-led management, and a series on a new theory of value creation in local government. The idea that people seek private value and councils set out to create public value is at the heart of a lot of customer service problems.
One aspect of customer service that hasn’t been discussed is the role of perception. Continue reading
Posted by Colin Weatherby 800 words
The pressure is on. The Essential Services Commission has released its draft report on the proposed rate capping for councils in Victoria. It has a number of interesting elements and some significant implications for local government. The report sets out which revenues are proposed to be capped, how the rate cap could be calculated, the current forecast for rate increases to 2018/19 under the proposed system (see below), and the impact of the application of an ‘efficiency factor’ to provide an incentive to pursue efficiencies.
The article in The Age describes the major impacts.
“Victoria’s 79 councils had an average rate increase of 3.8 per cent this year. Several councils increased their rates by more than 6 per cent.
The draft report includes indicative forecasts for an annual rate cap of 3.05 per cent in 2016-17, dropping to 2.85 per cent in 2017-18 and 2.8 per cent in 2018-19.
In addition to the cap, the review calls for a new “efficiency” deduction to be introduced from 2017-18 where councils would need to reduce their rates bill by 0.05 per cent because of efficiencies (increasing by 0.05 percentage points each year). Jason Dowling, The Age, 31 July 2015.
So, what are the likely implications for councils?
There have been some previous posts on this topic (see ‘Council rates capped from mid-2016’, The Age, 21 January 2015 and ‘Labor’s rate cap to hurt services and infrastructure, ratings agency warns’, The Age, 27 February 2015.). That thinking still stands. Councils will have to say ‘no’ louder and more often. Difficult choices will need to be made about what services to offer or not offer, and what the levels of service will be. Some people will no longer be eligible for services as councils start to distinguish more strongly between those who are or are not customers. Expect much more customer segmentation for services delivery. All of this will be difficult for our politicians who succeed by pleasing their constituents.
In many ways this is the easy bit Continue reading
Posted by Whistler 600 words
This is the fourth post in a series of five. The first review was for the Hyundai Excel Sprint council, the second was the Leyland P76, the third was the Volvo 240 series.
The fourth possibility is the Alfa Romeo 1750 GT. Stylish and fancy (and often seen with the bonnet up). Plenty of glamour here for the ‘Alfisti’. The choice of Romeos worldwide, it was a real eye catcher that brought lots of attention. They came in bright and classical Italian automotive colours and have a great exhaust note. You wouldn’t own one to cart around your family or as your main transport to work (you needed a Hyundai or Volvo for that) but there were many weekend warriors with a 1750 in the garage. Continue reading
Posted by Lancing Farrell 1600 words
This last post in this series (see here, here and here for previous posts) is an attempt to synthesise a new theory of value creation for local government using the ideas discussed in the previous posts.
First, a quick recap on strategy, business models and operations stratgey.
- The strategy is the position that an organisation takes in relation its market, the value it decides to create, and how it decides to create that value and operate at a surplus.
- Every organisation explicitly or implicitly employs a business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it will use.
- The operating strategy then guides decisions about vertical integration, capacity planning, facilities planning, services technologies, and process technologies.
A new theory of value creation for local government will need to integrate these concepts into a cohesive and repeatable approach. Continue reading
Posted by Lancing Farrell 750 words
Image: ‘The greatest theory ever told’ – Walt Disney’s 1957 value creation map.
This is the second post in the series intended to make the case for a new theory of value creation for local government. The first post discussed business strategy. This post looks at the link between strategy and the business model.
Once the strategy has been determined, it leads directly to the selection of a business model that can deliver that strategy. I have chosen the following description of a business model from organisational theorist and academic David Teece to set the scene.
“Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs.
The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit.
It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit.”
As with strategy decisions, the difficulties for local government are again apparent. Continue reading
Posted by Whistler 340 words
Really, what is all this nonsense? (more nonsense here and here) Ratepayers pay their money for efficient and effective services. They don’t care about all the other stuff and they don’t want a relationship with the Council, council officers or their councillors. They just wish that it all worked really well. For me, this Thinkpurpose.com post says it all.
While councils mess around wasting time exploring their differences and putting effort into looking different to their neighbours – nothing like a new livery and big signs at all city entrances to add value for the ratepayers – and not agreeing with neighbours about regional initiatives just for the sake of it (‘we can’t share their facilities, they’re from the other side of the river!’), they will never get it right.
People just want consistent services, wherever they live. When you move homes to another suburb, why should you have to learn a whole lot of new systems to get your rubbish collected, or pay your rates, or register your pet? Surely once your pet has been registered, you should be able to live anywhere with it? Why do there need to be different systems for taking rubbish away? The bins all look the same (actually, they are often different colours to show they are from somewhere special!).
Even within councils, more emphasis on being similar and the same instead of special and different would help. How many people at the council do you have to contact to register your name for paying rates, joining a club, registering your dog, paying a fine? Every department seems to have its own register of people it deals with. How many times has someone from the council come to your home for one purpose and when asked about something else they say ‘I am sorry, I can’t help you with that. That’s another department’.
Come on. People at the council are just more faceless people in the life of most residents. They don’t want a relationship. They don’t want to spend money on frills. They just want services to be delivered efficiently and effectively. The two eff words we don’t like to use.
Posted by Colin Weatherby 830 words
I recently found a new and interesting blog called ‘Squire to the Giants’. Much like thinkpurpose.com this blog site is aimed at people who have an interest in improving their organisation through systems thinking. A recent post talks about the ‘giants’ that have influenced the Squire’s thinking. I am familiar with some of the ‘giants’ and have others of my own.
The Squire lists the following giants:
Regular readers of this blog will be familiar with the work of Peter Scholtes and John Seddon. Both have influenced the thinking of writers. The biographical pieces written by the Squire are worth a look.
I have decided to produce a blog on one of my giants.
Professor Mark H. Moore
First some background. Mark H. Moore is the Hauser Professor of Nonprofit Organisations and director of the Hauser Centre for Nonprofit Organisations, at the John F. Kennedy School of Government at Harvard University.
His research interests include public management and leadership, civil society and community mobilization, and criminal justice policy and management. Continue reading
Posted by Whistler 500 words
I have read Lancing Farrell and Colin Weatherby’s posts on characteristics of demands, redesigning operations and improving service operations through action plans and service redesign, with some interest. It is all good stuff and not too difficult to understand or do. The question I ask myself is why I don’t see it happening everywhere across the sector. The ‘special and different’ posts partially explain it but I think there is more to it.
To begin with, the motivation to make improvements doesn’t really exist. People say they want to improve the quality of services to their community, and in response to threats like rate capping they say they want to be more efficient. But they don’t really want to do either.
Most councils have the potential to improve productivity by 10-15% (more in some councils). Continue reading
Posted by Parkinson 450 words
It has been a while since I posted but I couldn’t resist this topic. I appreciate the views put forward by Lancing Farrell and they have merit. But, from my point of view it is obvious why councils are different and should remain different.
Councils need different capabilities to serve their communities. These capabilities have often been developed over time in response to drivers evident to community leaders. For example, provide excellent customer service in delivering basic services to an affluent and demanding community; be able to build new infrastructure quickly and well to meet the needs of a rapidly growing peri-urban council – with limited resources; make sure that ageing facilities are cared for to protect their cultural values in a heritage place.
The leadership of every community will be different. Continue reading
Posted by Colin Weatherby 2200 words
John Seddon won the first Harvard Business Review/ McKinsey Management Innovation Prize for ‘Reinventing Leadership’ in 2010 for this paper. The prize was awarded for:
“ … the best story (a real-world case study of management innovation) or hack (a bold idea for tackling a critical management challenge) around … redefining the work of leadership, increasing trust (reducing fear), and taking the work out of work.”
As the title suggests it is a provocative paper. In his usual way, Seddon provides challenging ideas supported by practical evidence.
The context for the story is Owen Buckwell, the head of housing at Portsmouth City Council in England. Over 40,000 people rely on him for warm, safe and comfortable homes. Each year he is responsible for dealing with 17,000 blocked toilets and 100,000 dripping taps in the 17,000 council houses.
Owen has been managing housing for 6 years. Seddon describes him as a curious man who likes to get to the bottom of things.
What does Owen do?