15 – Interested in local government management? Four books you should read and why. Part 1

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I like to read. I know that not everyone else does and when you know someone who reads and likes to talk about it that it can be a bit painful. Nonetheless, I am going to do it again. This post is about the books that I discovered and found interesting in 2014 – books that should influence management in local government. I think they contain relevant and useful ideas to improve what we do. Ideas from all of them feature in posts.

1. Recognising Public Value by Mark H. Moore. Published in 2013, this book expands on the thinking in his earlier book Creating Public Value (published in 1995) in which he described the aim of managerial work in the public sector as ‘creating public value for the community’. This is the equivalent of managers in the private sector creating private value for shareholders.   He says “… it is not enough to say that public managers create results that are valued; they must be able to show that results obtained are worth the cost of private consumption and unrestrained liberty forgone in producing the desirable results. Only then can we be sure that some public value has been created.”

In his latest book, he takes this idea further to show how public value can be recognised and measured. The central idea is that the public sector can create an equivalent to the ‘bottom line’ available to the private sector. To achieve this, Moore has developed the ‘public value scorecard’, based on the idea of the balanced scorecard, containing a ‘public value account’ (a clear, explicit and measurable statement of the public value they have created and the costs involved in creating that value); measures of the organisations standing with the stakeholders providing social legitimacy and authority; and measures of the organisation’s ability to deliver the outputs required to achieve the desired public value.

In developing his case for the public value scorecard, Moore covers a wide range of issues, including discussion about private and public value; arbiters of value; costs of using public authority; sources of accountability for the public sector (very interesting reading); the public value chain; and the importance of performance measurement. Both of Moore’s books use case studies to illustrate his ideas, which makes the practical application of his thinking easier to understand. This book should really be compulsory reading for anyone in a leadership role in the public sector because it provides a practical, high-level framework for thinking about why a public organisation exists, what it intends to achieve, and how that can be measured.

2.  The Whithall Effect by John Seddon. Published in 2014, this book consolidates much of John Seddon’s writing about the public sector. If you have read his earlier book Systems Thinking in the Public Sector (published in 2008) you will be familiar with many of the ideas. There are five sections in the book. The first covers the ‘industrialisation’ of services and the many misconceptions that Seddon believes are evident in current service design and improvement, especially those borrowed from manufacturing. The second covers his approach, including his ‘Vanguard Method’ used to understand the current situation before improvements are made. The third section is a critique of government ‘reforms’ of public services that have not produced the results expected. The fourth section addresses current ‘ideology, fashions and fads’ in public services. The last section has his recommendations for change in Whitehall to improve public services in the UK. Overall, the book covers a lot of material, much of it supported by case studies.

Seddon is highly opinionated and critical of failings in government policy and action. This doesn’t detract from the fundamental messages in this book; services need to be understood as a system and there are (more) effective ways of doing this; interventions in service systems should be planned and use knowledge of customers, demands and work flow to inform them; measures must be relevant to the customer and used by the people delivering the service.

In a very practical way, Seddon provides tools for taking Moore’s ideas about public value into action. Seddon is much more focussed on private (customer) value, or the customer-defined purpose, and would no doubt argue that fulfilling purpose is a form of public value. In a way, I think ‘public value’ is just ‘purpose’ writ large. This book should also be compulsory reading for all leaders in the public sector. The ones who read, anyway. Firstly as a tale of what happens when changes to services are predicated on political, and not customer or public needs; secondly to provide a way to understand services as a system; and lastly to reinforce the importance of effective measurement of performance.

More books in Part 2.

Lancing Farrell

14 – What can a culture survey, an organisational self assessment, and your Executive’s risk appetite tell you?

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In local government, we like to survey our culture and develop plans to move from the current culture to the preferred culture. It is a very idealistic exercise. In Human Synergistics’ terms, the target culture is often highly constructive and devoid of the competitive and avoidance behaviours currently evident. Typically, the culture of a council in Australia will operate on the basis of ‘keep your head down and fly under the radar, if things go wrong blame someone else, and if there is no one to blame say you were just following instructions’. In a more competitive culture it starts with blame.

An organisational self assessment (the starting point for using the Australian Business Excellence Framework) will probably reveal an organisation where the drivers for the activities of the organisation that fare the best during the assessment will be those that have a legislative compulsion behind them or that have been developed in response to a problem that has a significant consequence for failure.   The focus will be on compliance, not organisational strategy, innovation and customer or community value. This is understandable because councils do have lots of legislated responsibilities and accountabilities that have consequences for non compliance.

Now to the last and, I think, the most interesting piece of evidence – the risk appetite of top management (the Executive). This is interesting because it often isn’t documented and when it is, the context is usually the preparation of a risk management plan and the knowledge isn’t used to reflect on the decision making of the Executive, the organisation they have created, or its culture.   Leaders shape the organisation through what they say and do. If they have a low appetite for risk, especially in a sector that is inherently risk averse, this will be reflected in their decision making. What can you expect to see as a result?

  • A conventional organisational structure that emphasises functional accountability and avoids the risks associated with a focus on cross-functional processes.
  • Organisational systems that are controlling to reduce risk and increase compliance because there is no reward, and potential sanctions, for doing otherwise.  The Executive makes the decisions and policies in accordance with their risk appetite.
  • A culture where people avoid risk and don’t make decisions or just follow the rules rather than take risks to ensure that value is created.

So, if you are wondering why you work in an organisation where there are dozens of forms that need countersigning by each level of authority, where decisions are increasingly being made by the Executive, and your culture surveys keep telling you that you are big on avoidance, maybe you should enquire about your Executive’s risk appetite.

Posted by Whistler

13 – Salvation, obfuscation or simply tokenistic? What roles do policies and strategies play in your organisation?

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I was talking to a colleague whose Manager has recently joined Victorian local government for the first time, to understand her initial impressions. He said that she had commented on the large number of policies and strategies, and whether they could possibly be effective given the difficulties coordinating them and avoiding conflicts. It started me thinking.

When I first started working in local government we had policies and strategies. They were important documents that guided action. We didn’t have many and they weren’t changed without very good reason. Making a new one or changing an existing one, wasn’t a regular way forward on issues. That has certainly changed. Today, policy fills a number of roles, one of which is still to guide action. The other roles are worth some brief reflection.

Policy and strategies have increasingly become a source of salvation for CEO’s and senior managers faced with elected representatives wanting to pursue political goals that are unpopular, unaffordable, unachievable or unnecessary. It can be a way of saving politicians from themselves. Rather than committing to action on the initiative, a process to develop a policy or plan is commenced to ‘map the way ahead’. The fact that it often doesn’t lead to movement anywhere seems to go unnoticed. The last time I completed a stock take of strategies it revealed that the majority of actions hadn’t been acted on (in some cases after 20 years, although the strategy was still live) and the actions were not implemented for very good reasons. They just weren’t a good idea.

In fact doing the stock take revealed that the review schedule for policies and strategies was logistically unachievable without significant extra resources. If you look at the number of policies you have, the scheduled review interval (typically 3 to 5 years for policies and 5 to 10 years for strategies), and do the maths, you will realise that the organisation can’t actually do it without stopping delivering services to re-allocate the required resources to policy and strategy review.

Policy and strategies have also become a way to obfuscate. Instead of acting on an issue that has an obvious but difficult or expensive solution, a policy or strategy is created that hides the real significance of the issue and provides and easy, cheap and ineffective ‘way forward’. I have heard officers talking about policies or strategies that have been implemented and had no effect. The outcomes are still the same. Surprise, surprise. Sometimes the creation of policy or strategy that has this effect is not intentional– it has become almost innate and part of the modus operandi of some senior people.

One of my ‘favourite’ examples of strategies is one that deliberately failed to specifically address a critical and contentious issue. When I questioned the officer responsible for developing the strategy, he said that it was a deliberate decision on his part. Because he believed consensus was not possible and this would have delayed agreement to the strategy, he left it ambiguous so that it could be ‘sorted out later’. The ‘later’ happened to be when I became involved and there was a budget for works and no clarity about what to do. Thanks. He was a senior policy officer and it was his standard approach.

Policies and strategies have become increasingly tokenistic. In a recent post on the Pannell Discussions, the topic of ‘tokenistic policies’ was discussed. The focus was on government actions that are tokenistic, and as a consequence, unlikely to make a real difference. David Pannell asked, ‘why do governments do this, and how do they get away with it without provoking public anger?’ These are good questions and they apply to local government as much as any other level of government in Australia. I have seen policies that everyone knows are infeasible but it solves an immediate political issue in a way that minimises any future organisational commitment.

Pannell suggests two reasons for tokenistic policy. The first is to be seen to be doing something, even though they know that is unlikely to be successful. This is better to be seen to be doing nothing. His second reason is ignorance. People think it is a good idea and they don’t have the technical knowledge to know that is poor policy and will achieve little. His most interesting commentary is in relation to how governments get away with it. He cites four reasons:

  • Complexity – even experts would have trouble working out an effective policy response and most people can’t judge whether or not it is good policy and they end up trusting that the government is doing what it says it is.
  • Time lags – the effects of the policy won’t be known for some years, and by then it is hard to connect the results to the policy.
  • Intractability – some problems can only be solved at exorbitant expense or not at all. Implementing a low cost policy limits the waste of resources.
  • Communication challenges – it is just too hard to discuss the issues in terms that most people will comprehend.

I am not suggesting that all local governments are creating policies and strategies that are simply convenient but ineffective solutions to difficult problems; devices to avoid doing something that everyone knows should be done; or simply a way to be seen to be doing something with no intention of it being effective. However, there are occasions when they obviously do.

I suppose, we all need to ask ourselves the question.

Colin Weatherby

Pannell Discussions, http://www.pannelldiscussions.net/2014/10/274-tokenistic-policies

12 – ‘It’s planning time again … I can see that far away look in your eyes’ – Part 2

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The legislated requirement for planning doesn’t help.   In Victoria, the Council Plan must be developed and approved by a new council within months of election. It is their plan for the 4 years of their term of office. As such, it typically reflects their political ambitions and their understanding of what the organisation needs to do to meet community needs. A councillor elected for the first time may have limited knowledge about how the council operates. In developing the Council Plan, the councillors receive guidance from the organisation but it is their plan to approve.   Once it has been created, the Council Plan is the dominant plan guiding priorities for the allocation of resources. Each year it is reviewed and ‘refreshed’ with new actions.

The department plans provide the basis for organisational guidance to the councillors in the creation of the Council Plan and its review. The ‘bottom up’ process of creating and then aggregating these plans results in lots of actions. Many councils don’t have an effective process to evaluate these actions, select the highest priority actions (and reject the lesser priority actions), and then develop feasible ways to coordinate effort and allocate resources to implement them. Instead, we accept all of the actions and the result is goal diffusion and uncoordinated effort across the organisation. Does this sound familiar?

The additional risk in this process is failure to incorporate new and emerging strategic issues because planning occurs annually at a set time. Once created and approved by the Council, the Council Plan becomes a public commitment to be met by the organisation. Actions are cascaded down through Department Plans to individual Performance Development Plans. The planning process also occurs in a relatively short period of time and the sequencing of business planning, Council Plan review and budget approval is often not ideal. The Council Plan must be approved before the budget and department plans can’t be finalised until the budget is approved. So, I hear you ask what can be done instead?

This is a difficult question to answer, which reveals part of the explanation for what is currently happening. A primary constraint is the specific legislative requirements that must be met for the development and approval of the Council Plan and the budget. However, the department by department planning approach is a choice. This is probably the place to start if you want to improve. Rather than relying on joining up 20 or more plans to guide the Council Plan, a ‘top down’ organisational planning approach could be taken. A high level Organisational Plan could be created to guide the development of each department’s plan.

This Organisational Plan could incorporate all of the existing financial settings from the Long Term Financial Plan (most councils have one of these to underpin the rating strategy and help forecast recurrent and capital requirements) and set objectives relevant to finances, workforce planning and asset management. In concert with the Council Plan, this would establish a framework for the creation of each department plan. This reflects the approach that has been undertaken by councils in NSW. In an ideal planning framework, the Community Plan would provide a 20 year planning reference for the needs of the community, the Council Plan would pick up on actions from that plan that the council wants to implement over the next 4 year period, and the Organisational Plan would cover the same time period and include activities and resources the organisation needs to deliver those actions. The annual Department Plans would be guided by the Organisation Plan and feed potential actions into the periodic reviews of the Organisation Plan and City Plan.

This approach is possible within the legislated planning requirements in Victoria. The main challenge seems to be the organisation having the confidence to develop an Organisational Plan. The leadership group must feel that it has the ‘understanding of the business’ necessary to do it.

In a future post I will discuss how planning can be better integrated and talk about what is happening in NSW in more detail.

Lancing Farrell

11 – ‘It’s planning time again … I can see that far away look in your eyes’ (with apologies to Ray Charles) – Part 1

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Yes folks, it’s that time of the year again in local government when we get staff in each department together to talk about what needs to be done in the coming year. Copies of the Council Plan (the statutory 4 year plan) will be dusted off to see what high level strategies or goals have been set by the Council and, depending on how many departments you have, twenty or more Department Plans with action lists will be created. Lots of actions will be identified, described, put into SMART objectives, followed by the budget bids needed to get the funding to implement them. Maybe these Department Plans will be aggregated into a lesser number of plans covering each directorate or branch of the organisation. A familiar story?

But, is this the best way to develop an organisational plan that is realistic, achievable and focused on delivering the value sought by the community?

It is not unusual for a Council Plan to have more than 100 actions, mainly driving asset creation projects and policy reviews. ‘The delivery of basic ‘business as usual’ services (e.g. maintaining parks and roads, delivering home support services, collecting waste, building and planning approvals, local law enforcement) are often unmentioned. Each Department Plan could then have a further 5 or 10 actions, most of which will be to solve problems or implement improvements. This is potentially 200 to 300 actions to be implemented over the course of the year while ‘business as usual’ continues in delivering services.

If you look hard, you will probably find that amongst the 200 to 300 actions that there are 20 or more organisation-wide improvement actions. This could include IT projects, major system overhauls (e.g. occupational health and safety, risk management, customer service), or some major community planning (e.g. revising the community plan, master planning for new services or major facilities). Implementing these actions will require time and effort from staff across the organisation and may impact on the implementation of other planned actions and in delivering business as usual’ services.   Is it feasible for an organisation to commit to this many actions and deliver them?

I think the proof is in the eating. How many councils deliver all of their planned capital works or Council Plan actions each year? Not many. Even less will deliver on all of the actions in their directorate or department business plans. We tend to bite off more than we can chew. So, why does this happen?

Lancing Farrell

10 – What has changed in local government in Victoria since the 1990’s?

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Much has changed in Victorian local government since the reforms of the Kennett Liberal/National Party coalition government in the mid 1990s. It is worth reviewing some of those reforms for the benefit of those people who have entered the sector more recently. It may explain why some things are the way that they are.

The context for these reforms is relevant. There had been limited change in local government structure or function for decades. Voluntary amalgamations were resisted. Some regional resource sharing initiatives had been put in place, mainly in rural areas. The organisational structure had changed in the 1980’s from the traditional ‘two headed’ Town Clerk and City Engineer model, to a corporate structure headed by a CEO. A number of new functions had appeared, for example information technology, human resources and occupational health and safety. The focus on ‘roads, rates and rubbish’ had begun to change, but only just and only slowly.

The Kennett reforms accelerated the rate of change. Indeed, many onlookers would say that they ‘threw out the baby with the bath water’ in their haste. The reforms were driven by the public choice ideology evident in other conservative governments, most notably that of Margaret Thatcher in the UK.   This involved use of private sector management approaches in the public sector, creation of pseudo-markets for public services, and privatisation. There was a very strong view that local government needed to change quickly to become more efficient and accountable, and that councils were unwilling to change unless compelled.

The objectives of the reforms are much easier to see with hindsight – decrease costs, improve efficiency, reduce the size and scope of the public sector, and, importantly for the Kennett government, reduce the influence of trade unions. There was a focus on councils becoming ‘enablers’ rather than service providers, creating competition for delivery of public services, and separation of policy making from service provision in accordance with the now infamous ‘steering, not rowing’ concept from Reinventing Government by Osborne and Gaebler, which had been published in 1992.

The legislative changes introduced included electoral reform, senior management contracts, municipal amalgamations, rating controls, compulsory competitive tendering, and a 20% rate reduction. As you can imagine, this raft of changes created turmoil. Overall, the combined effect was to diminish local government and limit its role. In subsequent reforms, little has been done to re-establish local government as an effective level of government. Indeed, the rate capping currently proposed by the Daniel’s Labor government further diminishes it.

There have been some benefits. The forced amalgamations resulted in larger and more powerful local governments capable of more efficient service delivery. Amalgamation has provided economies of scale, especially for some of the very small urban or rural municipalities who were joined to their larger neighbours. In addition, there is now more responsiveness to customers and the community. This is the result of a number of the reforms, most notably the need to reduce rates by 20% and competitively tender services. Councils needed to start talking to their communities about services that would be withdrawn, reduced or otherwise changed. The formation of new council organisations during amalgamations facilitated the implementation of major IT systems and significantly improved the capabilities of councils.

Some of the disbenefits of the reforms are also evident. The electoral reforms moved councils away from annual and partial council elections to periodic and whole of council elections. This has increased the potential for episodic and transformational changes when large numbers of councillors change at an election. The linked reform of planning processes has locked councils into planning cycles integrated with the election cycle. It is now difficult to effectively think or plan further ahead than the next election. For some councils the forced rate reduction was unsustainable. Residents have suffered from reduced services since and, in real terms it has taken these councils 20 years to recover their revenues. Cost cutting and competitive tendering ended many careers prematurely and resulted in a ‘brain drain’ from local government. Council organisations also became much flatter (to copy the private sector and be more competitive), which has reduced career development opportunities.

The fixed tenure of senior officers, especially the CEO, has had a significant impact. Survival and success for the CEO is now dependent on their relationship with the council. Many CEO’s have not had their contract renewed and some have been terminated because their relationship with their councillors deteriorated. For most CEO’s this is now their highest priority. In response to this new pressure, they have tended to appoint senior officers who will support them, and the needs of the organisation or the community have become secondary.

In summary, the reforms of the 1990s decreased the resources available to local government and service levels in many areas, particularly those that are resource intensive, have declined. This has had impacts on the sustainability of infrastructure for with reduced capital funding available for asset renewal. Competition has increased in service delivery. And there is now much more competition in thinking about policy and strategy. It is no longer the sole domain of the administration and this has led to some new thinking and innovation. The focus on customer service has made the ‘voice’ of the individual louder than ever, which has improved customer service, but has also created some conflicts with preferences expressed by the broader community. Most influentially, organisational leadership now depends much more on the goodwill in their relationship with the councillors for success.

Parkinson

9 – Obligatory empiricism, oblivious narcissism and consensual lying. Have they become three hallmarks of local government?

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Now, you might think I am drawing a long bow here, especially if you don’t work in the sector or if you haven’t worked there long enough to identify underlying patterns. I will elaborate.

Empiricism is the theory that knowledge comes only from primary experience. It emphasises the use of evidence from direct experience in the formation of ideas, rather than using other knowledge not gained from experience or ideas passed down over time. By obligatory empiricism I am referring to situations where people must experience something themselves before they can use that knowledge to develop their ideas.

A recent article by Kat McGowan suggests that human progress has occurred using cumulative knowledge gained by copying each other, rather than episodic, transformational acts of creative genius by individuals. Imitation, not genius, has driven innovation. The challenge is maintaining what we already know, not creating something new. By the way, this ability to copy each other is not shared with animals. According to McGowan, they are obligatory empiricists and must learn everything through trial and error. When they die, the knowledge dies with them and successive generations are doomed to reinvent the wheel.

How many of us have experienced new ideas being introduced without a serious effort to look at how well they have worked for others and whether there is anything to learn from their experience?   How many times have you suggested an idea from a previous organisation, only to be told ‘that won’t work here, we are different’, without any real explanation of what is different? Why is it that every council has different ways of doing the same thing? These are potential indicators of obligatory empiricism. As a sector, we seem to focus on being ‘special and different’, rather than accepting that we have more in common and sharing systems and ideas.

Narcissism is a concept that most people are familiar with and there is increasing evidence of it in individuals and society today. Anne Manne has recently written about narcissism and the many forms it takes in our society. One form that attracted my attention is ‘oblivious narcissism’, in which the people are completely unaware of their narcissistic behaviours. It attracted my interest because narcissism is often associated with leaders. In healthy measure it is an important ingredient. In unhealthy measure, it can manifest itself in undesirable behaviours. Oblivious narcissism is evident in ways often associated with positive behaviours in local government.

Have you experienced leaders in your organisation who are extremely nice and accommodating, apparently sincere in their interest in the needs of others, and politely uncompromising in their pursuit of their personal goals? More and more, people who are exceedingly nice seem to be finding their way into local government leadership roles. As a result, you could be dealing with an oblivious narcissist in your organisation. Their lack of self-awareness makes them particularly difficult to deal with in local government setting, where niceness is often put ahead of performance. If you are a leader you are unlikely to be sacked for incompetence or lack of performance but you will be dealt with immediately if you are rude and upset people.   While narcissism is a general concern in society, it has significant consequences when it is present in organisational leaders and they are not aware of it. At least you know what you are dealing with a leader who is obviously narcissistic.

Consensual lying is a concept that I recently discovered at the thinkpurpose.com blog site. The writer describes consensual lying as flourishing in systems where management makes ineffective decisions but they will be told otherwise. Surprisingly, a search for consensual lying in organisations on Google found nothing on the topic. The blog author describes the best type of lying as ‘the type that doesn’t know it is a lie after a short while’. The lies are based on assumptions of what management would like to hear, and they are accepted because it is convenient for everyone involved. Then the lying goes further up the organisation.

Have you ever heard people give reasons for lack of performance or achievement that sound lame and flaky to you but are accepted by senior management? ‘I couldn’t complete the work because I didn’t have the resources’. This is a good one because allows everyone involved to shift the problem upstairs (somewhere) to the people who control resources. What about, ‘I couldn’t complete the project on time because the stakeholders wouldn’t cooperate. Another good one. There are always lots of stakeholders in public projects and it can be hard to pinpoint any one that has been a problem. Consensual lying is convenient and allows everyone to feel good about their role in a dysfunctional system.

I don’t want to sound too critical or bleak about local government. There are lots of fine organisations where good people are working hard and delivering great services. But there are many more that share some or all of these hallmarks. If you are in an organisation that is locked into learning everything from new, or led by people focussed more on their own needs than those of the organisation, or where consensual lying is widespread, you will face significant challenges in achieving high performance.

Colin Weatherby

Manne, Ann 2014. The life of I.

McGowan, Kat 2014. Brilliant impersonators, in Aeon magazine.

thinkpurpose.com. http://thinkpurpose.com/2014/08/22/do-you-have-a-joke-job

8 – ‘Local government nightmare’. Or, what might Gordon Ramsay say?

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After watching an episode of ‘Ramsay’s Kitchen Nightmare’ I was tempted to write a brief script for an episode based on local government being a restaurant. I think it would go something like this (language moderated) …

GR:                         So, tell me, what is the name of your restaurant?

Response:           Local government.

GR:                         Is that it? Isn’t it a bit generic? How will patrons know what to expect?

Response:           We will give them what they always get.

GR:                       So, they get whatever they got the last time they visited local government? No point of difference from other local government? Are you sure?

Response:           Yes.

GR:                        OK then. So, tell me, what cuisine do you offer?

Response:           All of them.

GR:                        What?

Response:           We offer all cuisines. We will serve any type of food that patrons want. They name it, we make it.

GR:                         If that is the case, how do you create atmosphere, give your patrons a great experience and ensure that you have the quality right, if you will try your hand at anything?

Response:           We do our best. Our staff are well trained and they work very hard.

GR:                         I see. At least you will get points for effort! Can I see the menu?

Response:           We don’t have one.

GR:                         What!

Response:           We did have one but there are too many items to list. It was like a book. It had chapters in it!

GR:                         So, tell me then, how do people order? And how do they know what it will cost?

Response:           Well, everyone pays an annual fee. Then they turn up and just tell us what they would like, how they want it prepared, and we do our best to deliver it.

GR:                         There must be a lot of dissatisfied customers. How do you know whether or not you have met their expectations and provided them with what they wanted? How do you manage your kitchen to have the required ingredients? How do you have chefs able to cook each of the cuisines well?

Response:           There are problems with customers. Some of them are just impossible to satisfy! When they tell us they are not happy, we just try again. We do have to stock lots of ingredients and we do need a lot of chefs so that we can cater for the range of orders received. I can’t really see any other way of offering a service that meets the needs of everyone.

GR:                         This is amazing. I haven’t seen a restaurant like it before. To be honest, I can’t see how you run this place at a profit. You must waste a lot of time and ingredients.

Response:           We do.

GR:                         Then how do you keep operating and why do people keep coming back?

Response:           Well, we are the only restaurant in town.

GR:                         …

posted by Whistler

7 – ‘Why this obsession with cutting public service jobs?’ The Age, 2 January 2015

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I have often wondered this myself. It seems to be part of our culture to get stuck into public servants every now and then. The author says that cutting public service budgets it is politically attractive because ‘everyone hates public service workers and cutting their budgets seems to help balance the budget by removing public sector waste’.

However, in doing so, they are achieving a false economy according to the report cited from the Centre for Policy Development (CPD), False Economies: Unpacking public sector efficiency.

‘Every Australian needs to understand what politicians are talking about when they speak of the ‘efficiency’ of government. Why should we care? Because this is our money, being spent on us and the things that matter to us.’

This report completes a body of work on productivity and efficiency completed by the CPD Public Service Research Director, Chris Stone. Some of his key messages are;

  • A sound understanding of efficiency is needed in public debates on what services to fund, and whether their delivery should be outsourced or not, in order to ensure we are getting public value for public money.
  • There are significant difficulties involved in comparing the Australian public sector performance with the private sector, but the evidence available indicates that the two sectors have a similar level of efficiency.
  • Although Australia’s public sector is comparatively efficient, there is scope for improvement.
  • The government is identifying the public services that will be affected by cuts, but does not appear to be guided by any underlying rationale of what services government should be providing.
  • The heavy focus on cuts without sufficient consideration of the value of services means that other strategies for increasing efficiency are neglected, in particular innovation and professional accountability.
  • 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 current method for managing performance does not provide clear guidance to public servants on how they can work toward their organisation’s goals.

It is a report of more than 70 pages and should be read by every public service manager. The discussion in Chapter 1 about different types of efficiency is enlightening.

The connection between value, public value in particular, and reducing resources to achieve greater ‘efficiency’ is important. When there is a lack of clarity about what is meant to be achieved it is difficult to measure performance and easy to cut resources with a clear conscience. The consequences are only immediately evident to an informed few and may become evident to everyone in the long term. Defining the public value to be created is an essential activity. Then the arguments about efficiency can be held in the knowledge of what impact on value will result from changes to resources.

Colin Weatherby

Stone, Christopher 2014. False Economies: Unpacking public sector efficiency (http://cpd.org.au/wp-content/uploads/2014/06/CPD-OP37_False-economies_-compiled_EMBARGO26June.pdf)

6 – Customer, client, citizen, resident or ratepayer. Who are we dealing with?

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In previous posts I have talked frequently about the customer. It is fundamental to the way I think about my work. At this point, it is probably important to explain what I mean when I use the term ‘customer’. In simple terms, a customer is someone requesting and receiving a service. Typically, this occurs in a ‘transactional’ setting where the customer pays for the service when they receive it. This happens in local government for some services, for example entry to an aquatic facility. When the payment has been made at an earlier time through taxes, and the service is free at the point of consumption, the relationship changes. In these circumstances, it is not uncommon for people receiving services to be called clients. Sometimes they are referred to as end-users or service consumers.

In local government, these people can also be citizens of the municipality. They may be franchised to vote (if they are over 18 years of age) and then they are constituents of the councillors who represent them. They may be resident in the municipality and receive property services paid for by the ratepayer. They may also be the ratepayer. As you are probably starting to see, an individual can be a fee paying customer, and a client, and a resident, and a constituent, and a ratepayer, and a citizen. Or they could be only one of them. This might be starting to seem like an esoteric discussion. After all, why does it matter who we are dealing with?

I think it is essential to understand the capacity in which you are dealing with a person. Depending on what the person wants, they may have different rights and responsibilities. They may be after different forms of value. If you believe that the purpose of local government is to create and provide value, then understanding the type of value being sought is integral to success. Mark Moore describes ‘degrees of publicness’ regarding value, which change from essentially private value sought by individuals, perhaps as a customer or client, through to public value sought collectively by ratepayers or citizens. I have reproduced a version of his diagram below.

Moore degrees of publicness

A key point is who the arbiter of value is. This is also picked up by John Seddon in his writing. He doesn’t refer to value directly and uses ‘purpose’ instead. It is the same concept. People have an expectation of what will happen when they receive a service. There is a need to be met. In Seddon’s view, it is essential that the service deliverer is not the arbiter of value. Everything must be described and managed from the customer’s point of view. Councils deciding that they know what is best and what constitutes value for their community or customer unfortunately happens too often.

When dealing with someone on an issue, I always try to work out what capacity they think they are dealing with me and the value they expect. Then I work on helping them to understand some of the other points of view about the service they are after. Mostly, people get it. They understand that what they want is sometimes in conflict with broader community needs or expectations. Often, they are prepared to modify their request accordingly.

Lancing Farrell

Moore, Mark 2013. Recognising Public Value.