233 – My experience of management thinking in local government – Part 1: The formative years.

1000 words  (9 minutes reading time)                                      by Lancing Farrell

management experience pt 1

I was talking to a colleague recently, and I was asked about the management thinkers that have influenced me. It started me thinking back to my early days as a manager in my mid-20s and later when I completed a MBA in my mid-30s. And the lessons I had from starting and then managing my own business for a decade. Many management thinkers influenced me, and, equally, so did my opportunities to practice different ways of managing. This is quite a long essay, so I have split it into three parts.

I recall that before I was a manager, I had an interest in management. I wasn’t too sure what it was but I had read The Peter Principle as a student, and I knew that management was important in organisations if they were to be effective. For some reason I also remember that someone at the council where I started working was talking about Value Management. Now I know that they had obviously been to a course. Then I got a job as a manager.

I remember soon afterwards being told about Management by Objectives (MBO). A colleague had completed an assignment as part of his degree, which looked at the application of MBO in local government. He obviously thought I should be applying theory in my work, and I was attracted to the idea of putting more structure around my management. Thanks to Wikipedia, I have refreshed my memory about MBO, an idea developed by the management thinker Peter Drucker:

Management by objectives is the process of defining specific objectives within an organisation that management can convey to organisation members, then deciding how to achieve each objective in sequence.

At the time I even bought a copy of The Practice of Management (written in 1954) and read it from cover to cover. My exposure to MBO reinforced my view that management needs structure and focus, but not much changed in what I could do. At that time (early 1990s) the idea that the council would say what it was intending to do and then systematically plan to do it, was novel. Mostly, we just did the same thing this week that we did last week, and this year what we did last year. Nobody questioned it.

Some of us thought we could do better. I was one of the first university-educated managers and I had been exposed to international lecturers with new ideas to Australia. I wanted to do things differently and better. My next foray into management ideas was Total Quality Management (TQM), which has been attributed to the management thinker W. Edwards Deming. I led a pilot program at the council where I was working. Thanks again to Wikipedia:

Total quality management consists of organisation-wide efforts to “install and make permanent a climate where employees continuously improve their ability to provide on demand products and services that customers will find of particular value”.

Again, I bought a book, this time on TQM (long ago given away). Practicing applying TQM as a pilot showed me the difficulty of leading change in local government, especially from an operational area. The resistance was instant from internal support services (their nose was out of joint because they weren’t deciding how the council would improve) and it died a natural death. Along the way though, our Quality Circles using ‘PDCA’ (plan, do, check, act) had identified lots of opportunities for improvement. We made some good changes.

Then, someone lent me a copy of Henry Mintzberg’s book Rise and Fall of Strategic Planning, which, as it turns out, influenced me strongly. It helped me to see that the way we understand and deal with work today is the basis for improving it in the future, and that writing detailed plans, even if they are based on knowledge of the work, doesn’t work because strategy emerges while you are doing the work. It was a bit like John Lennon and his saying that ‘life is what happens while you are making plans’.

The next management idea to come along in local government was Business Process Reengineering (BPR). Championed by Michael Hammer, it suggested that understanding the work as a process and redesigning work flows would make services better. I bought this book as well. Wikipedia has helped me out with the essence of what he was saying:

Business process re-engineering is a business management strategy focusing on the analysis and design of workflows and business processes within an organisation to help organisations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors.

Around this time reforms of local government had started in the UK and there was talk of them happening where I was working in Victoria. Sure enough, the reforms arrived in Victoria with the election of a conservative State government. We got municipal amalgamations, forced rate reductions (20%!), and Compulsory Competitive Tendering. Whilst most people working in the sector would have agreed change was needed, with the benefit of hindsight, the baby clearly went out with the bathwater. It was a time of huge redundancies, cutbacks and chaos.

I left local government and started my own business (and a Master of Business Administration (MBA)). I had decided that after getting a job as a manager, and clearly having some aptitude, that I would be even better with some education. I have found this not to be a common view in local government in Victoria.

Nonetheless, the MBA introduced me to a (what seemed to me) revolutionary field of management research, thinking and writing – operations management. I had discovered the thinking that tied together MBO, TQM and BPR. For a while it changed the way I thought about everything I did. Ideas like the operational typology and performance objectives became fundamental to my thinking. I designed services around these ideas in my business.

For the benefit of completeness, yes, I did buy the book. Operations Management 2nd Ed by Nigel Slack and his colleagues became my new bible. Again, Wikipedia has helped me with a definition:

Operations management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods or services.

I loved the idea that operations were designed and that they could be controlled to produce more reliable products and services. I discovered that everything else I had experienced or studied, was really just a subset of operations management, even the emerging field (at least in local government) of Project Management.

A pattern was emerging – I found value in ways of understanding services as processes and engaging workers in improving them. Interestingly, around this time I found an article Peter Drucker had written in the 1970s about public sector management. It challenged my thinking about what I was seeing and learning. I will come back to it in Part 3.

132 – ‘A new theory of value creation for local government’. Do we need one? Part 3 – operations strategy.

Posted by Lancing Farrell

Slack operations strategy

Image from Operations Management, 6th Edition, Slack, Chambers and Johnston.

In this third post in this series, I look at the concept of the operations strategy. Every organisation has one. Your organisation does, but do you know why or what it is? And how does it relate to the business model?

This series of posts is intended to make the case that local government needs a theory of value creation – a clear explanation of what local government does to create public value. That theory will require a reappraisal of the operations strategy and the role that operational capability can play in supporting the business model and strategy execution.

Hayes and Wheelwright describe operations strategy as guiding decisions about vertical integration (i.e. the extent to which the council owns the value chain), capacity planning (i.e. how variation in demands will be met), facilities planning (i.e. the facilities needed to deliver services), services technologies (e.g. information systems) and process technologies (e.g. batch or make-to-order).

The academics Nigel Slack, Stuart Chambers and Robert Johnston in their text Operations Management talk about strategy and the connection to operations Continue reading

107 – Separate, relate and integrate. Redesign operations to meet services demands.

Posted by Lancing Farrell                                                                              570 words

good cheap fast

Some basic tools are needed to redesign operations to improve performance. Many people charged with responsibility for managing services have limited skills in how to redesign and improve them. Here is a simple and effective approach – just separate, relate and integrate.

The separate bit is about understanding the different demands being placed on the system. Usually, a performance problem is masked by a mess of different demands that have been mixed in one or two delivery processes. The important characteristics of services demand are the expectations of people creating the demand and how the demand is presented. It is essential to separate each type of demand according to its performance objectives and characteristics. Continue reading

105 – Some characteristics of services demands that are important.

Posted by Lancing Farrell                                                              1100 words

operations typology 2

Image from Operations Management, 1998.

Some time ago I posted on high performance job design using four characteristics or spans; control, accountability, influence and support. At the time I linked the concept to the operations typology describing four characteristics of design of operations for high performance. This post picks up that discussion to look at the characteristics of demands that it is essential to understand if you want to design and manage your operations for high performance or excellence in local government.

A number of recent books on public sector management have discussed demands and how it is essential to understand them in public services because payment is not made at the time of service consumption and, therefore, price does not directly influence the amount and nature of demands placed on the system.

In his Vanguard Method John Seddon describes the importance of fulfilling purpose if failure demand is to be avoided. He also talks about understanding flow in relation to how work enters a system. Both of these ideas relate to demands. If purpose (i.e. the value sought by someone or their demand on the system) is not correctly understood the work system will not meet their need. They will come back.

Mark H. Moore includes operational capacity in his ‘strategic triangle’ concept linking decisions from the authorising environment to the public value provided. An organisation must have the operating capacity (or capability as Moore describes it in his earlier book Creating Public Value) to deliver on the political commitment to create particular public value. Continue reading