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

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221 -The Vanguard method in Australia.

By Tim Whistler                                                                                                         1000 words

Progressive leaders

The summit offered an opportunity for those who are unfamiliar with the Vanguard method to hear about work that has been done in Australia by IOOF (a superannuation fund manager) and the County Courts Registry using the Vanguard method. Vanguard team members presented public service case studies from the UK.

It was an interesting event and it highlighted the potential for leaders to think differently and better understand how work is being performed in their organisation, what is happening in delivering value to customers, and how improvements can be made.

There were several issues relevant to local government in Victoria. Continue reading

218 – Requisite leadership, stratified systems theory and local government management.

By Colin Weatherby                                                                                              680 words

Jacques levels of work authority

Lancing Farrell posted an interesting piece using Elliott Jaques’ requisite organisation theory to explain the best use of Executive time. It prompted some related thinking on my part. Jaques has provided a significant body of knowledge that can be very useful for managers in bureaucracies and hierarchical organisations.

The idea that people naturally organise themselves into hierarchical, or stratified, managerial systems in organisations reflects the reality of local government.  This is reinforced by legislation that focuses accountability on top management.  They are held responsible for the work outputs of people in the organisation and this responsibility cascades downwards through the management hierarchy. Continue reading

211 – Unpredictability, interdependence, complexity and chaos – why councils need to adopt the Third Principle: optimisation.

Posted by Lancing Farrell                                                                                              1200 words

the third principle

I recently rediscovered a book that I bought 17 years ago when it was first published. It is one of those useful management books that is an absorbing read when you buy it, and then it quietly sits on your shelf waiting for the day you really need it. It is now a book for the times with rate capping coming into Victorian local government.

Neville Lake’s central idea is that management practice has three fundamental organising principles – effectiveness, efficiency and optimisation. He believes that an organisation can be both effective and efficient but be sub-optimised. This leads to only 80% of its potential being realised.

The other 20% is trapped in processes that don’t work, management models that don’t deliver, and interactions with customers that fail to deliver expected value.

Having worked in local government for 30 years, I have to agree that we are sub-optimised organisations. Continue reading

196 – Making local government organisations simpler to manage – why is it necessary?

Posted by Colin Weatherby                                                                         1700 word

complexity knotted rope

I was at a meeting recently where the team charged with conducting an organisational self assessment (OSA) and preparing an organisational improvement plan (OIP) using the Australian Business Excellence Framework were evaluating progress. It was an interesting meeting of a diverse group of people. By the end of the meeting we had reached a common conclusion – a council organisation is complex and systems need to be disentangled and simplified so that it can be managed effectively.

The OIP actions were developed independently from the outcomes of the OSA. It was only after 12 months of effort to implement the actions that the high level of congruence between them became apparent. Very few actions relating to core organisational systems could be implemented without impacting on each other – they overlapped. Attempting to deal with them one by one wasn’t going to work but joining them all together would create a large and very complicated action.

There is an earlier post on complexity which describes some of the sources of complexity in local government. It helps to know what you are dealing with but that doesn’t make it any easier. This was reinforced by reading former Victorian Premier John Brumby’s excellent memoir ‘The Long Haul – Lessons from Public Life’. In reflecting on the last four years in which he has viewed politics as an outsider, Brumby comments on the lack of trust that ‘permeates almost everything we see and hear about politics today’.

He believes that part of restoring trust and credibility in politics is to give the public a better understanding of the complexity of the issues.

“When I first sat in the federal parliament, an older and wiser member told me: ‘For every complex problem there is a simple solution … and it’s always wrong’. We live in a world where the questions are becoming more complex, while the public appetite is for ever simpler answers: the kind that can be summed up in 140 characters or less”

My question is, do you think that people want to be bothered by the complexity involved in getting what they want through political processes? Continue reading

191 – Essay No. 3 – Local government and systems thinking.

Posted by Lancing Farrell                                                                              1250 words

 

systems thinking checkland

Systems Model, Peter Checkland, 1981.

Systems thinking has featured in a number of posts (see  Some types of thinking observed in local government,  Classic paper: ‘Forget your people – real leaders act on the system’. John SeddonApplying the public value concept using systems thinking in local government). As someone with an interest in systems thinking I felt it deserved some discussion in the context of local government using ideas gathered from Peter Checkland, Alistair Mant and John Seddon.

The cover of Peter Checkland’s book ‘Systems Thinking, Systems Practice’ says that it is about the ‘interaction between theory and practice of problem solving methodology’, as derived from a decade of action research. It is a seminal text on the ‘meta-discipline’ of systems thinking.

Checkland has set out to ‘develop an explicit account of the systems outlook’ and, based on that view, to ‘develop ways of using systems ideas in practical problem situations’. The book is about the ‘use of a particular set of ideas, systems ideas, in trying to understand the world’s complexity’.

“The central concept ‘system’ embodies the idea of a set of elements connected together which form a whole, this showing properties which are properties of the whole, rather than properties of its component parts.”

Systems thinking is centred on the concept of ‘wholeness’. In some ways it is a reaction to the classical scientific method, which emphasises ‘reducing the situation observed in order to increase the chance that experimentally reproducible observations will be obtained’.   Eliminating variables in order to study something to determine cause and effect is useful but ultimately limiting in complex systems where the interactions of all variables matters.

Systems thinkers have called it ‘organised complexity’ to describe the space between ‘organised simplicity’ and ‘chaotic complexity’. In some ways it is seeking to understand the simplicity that exists on the far side of complexity. In a nutshell, systems thinking is concerned with organisation and the principles underlying the existence of any whole entity.

Australian management author, Alistair Mant, describes two types of systems in his book ‘Intelligent Leadership’. He calls them the ‘frog’ and the ‘bicycle’ systems and he believes that leaders need to be able to distinguish between the two systems when applying systems thinking and directing a change and shift in systems. He sees ‘pointing systems in intelligent directions’ as one of the critical leadership responsibilities.

Frogs and bicycles are metaphors for different kinds of systems. The essential difference lies in the relationship of the parts to the whole. A bicycle can be completely disassembled and then reassembled with confidence that it will work as well as before.  This is not possible with a frog. Once you remove a single part the whole system is affected instantaneously and unpredictably. Furthermore, as you continue to remove parts the frog will make a ‘series of subtle, but still unpredictable, adjustments in order to survive’.

“This sort of system, at a level beneath consciousness, wants to survive and will continue for an astonishing length of time to achieve a rough equilibrium as bits are excised – until it can do so no longer. At that point, again quite unpredictably, the whole system will tip over into collapse. The frog is dead and it won’t help to sew the parts back on.”

This is a salient warning for those planning to intervene in a system without due care. Mant believes that most big organisational systems contain bits of frog and bicycle systems.   He says that the bicycle parts can be hived off and reattached in a new way without harming the overall system, but that the frog parts are really the core process.   In a way, he is describing systems at two different levels – the component-level (bicycle) and the system-level (frog).

Checkland says that ‘any system which serves another cannot be modelled until a definition and model of the system served is available’. This approach should prevent action on component ‘bicycle’ systems occurring before the potential implications for the whole ‘frog’ system is understood.

In common with Checkland, Mant holds the view that systems are complex and need to be considered as a whole. The systems model developed by Checkland (shown above) illustrates the process of systems thinking. He says that it starts with a ‘focus of interest’ or set of concerns that exist in the real world. This could be a problem or something about which we have aspirations. This leads to an idea. From that idea two kinds of theory can be formulated:

  1. Substantive – theories about the subject matter.
  2. Methodological – theories about how to go about investigating the subject matter.

Once theories exist, it is possible to state problems not only as they exist in the real world, but also as ‘problems within a discipline’. For example, engineering, chemistry or town planning. All of the resources of the discipline (i.e. previous problems, its paradigms, models and techniques) can then be used in an appropriate methodology to test the theory.

The results of this test, which involves action in the real world (i.e. interventions, influencing and observation), then provides case records of ‘happenings under certain conditions’.   These are the crucial source of criticisms that enable better theories, models, techniques and methodologies to be developed. It is the improvement loop.

For those proponents of the Vanguard Method this might be starting to sound familiar. John Seddon has developed an application of systems thinking in organisations that has demonstrated its value in improving organisational systems. The Vanguard Method has the following steps:

  1. Check
  • What is the purpose of this system?
  • What are the types and frequencies of customer demand?
  • How well does the system respond to demand?
  • What is the ‘flow’ of work?
  • What are the conditions that make the system behave this way?
  1. Plan
  • What needs changing to improve performance?
  • What action could be taken and what would we predict the consequences to be?
  • Against what measures should action be taken?
  1. Do
  • Take the planned action and monitor the consequence in relation to the purpose.

It features systems thinking in the need to understand a concern in the real world (what are the demands?), develop a theory or approach to improvement (what needs to change?), and then seeks to implement that action and monitor consequences (how can the approach be improved?).

“The outcome of studying the work in this way is a system picture that puts together everything that has been learned and which illustrates the dynamics of the particular service.” John Seddon.

Mant says that most complex systems containing and serving people have ‘natural properties’. Effective management aligns itself with the natural flows and processes to help them along – like a leaf floating on water running in a stream that naturally takes it to its destination. Bad or dogmatic management fails to recognise these natural properties and attempts to ‘shoehorn the system into shape’ to meet externally determined priorities. This has been identified as a problem for public sector management in a previous long read post.

Local government has spent too long looking out of the window hoping to see a ’business-like’ way of managing that will solve all of its problems, rather than having the confidence to work out what is needed from first principles. It is vulnerable to the next externally imposed management fad.

Seddon is particularly harsh in his judgement of public service reform for the past 35 years in Britain. He describes the contribution of each Prime Minister in some detail. Overall, he paints a picture of political interference and the projection of a narrative that has primarily focussed on reducing costs, yet costs have increased. This is principally because they have failed to understand the system. The complexity of systems containing and serving people has been overlooked.

Checkland, Peter, 1981. ‘Systems Thinking, Systems Practice’.

Mant, Alistair, 1997. ‘Intelligent Leadership’.

Seddon, John, 2014. ‘The Whitehall Effect’.

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

I was talking to a colleague whose Manager has recently joined Victorian local government for the first time, to find out what were 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 synchronising 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 choice of policy or strategy in these situations is not deliberate – 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