235 – My experience of management thinking in local government – Part 3: The frustrating years.

1000 words (9 minutes reading time)                                                        by Lancing Farrell

management experience pt 3

This is the last post on my experience of management thinking in local government. Writing about it makes it seem like a long haul. With hindsight, there have been lots of interesting ideas, many with potential value to improve services, but few with any practical method to make them useful. And less with a way to implement them across a diverse organisation like a council.

Sometime around 2017 I went back to seriously read more of John Seddon’s writing about the Vanguard Method. At this time, Vanguard had a launch for their Australian office in Melbourne, and I went along. Several Australian organisations, public and private, talked about their experience using the Vanguard Method. I wanted to know more. In 2018 I had the opportunity to fly to London and attend a masterclass on digital transformation being held by Vanguard. I met John Seddon and other senior staff from Vanguard. I also spoke with people from local government in the UK who had experience with the Vanguard Method.

This was fortuitous in the development of my thinking. After three decades I had arrived at an understanding of local government and the way it works that made me think systems thinking was the best way to improve the performance of services. The Vanguard Method provides a way to implement systems thinking that has been tested and proven in local government. It provides the method lacking in Public Value. It works with the culture prevalent at many councils.

Amongst the various counter-intuitive truths that John Seddon describes, the idea that you don’t change culture by setting out to change it, or reduce costs be setting out to cut them, had started to really resonate with me. It is an ‘obliquity’ problem. Like happiness, the harder you try to achieve it, the less likely you are. It comes from doing something else.

This doesn’t mean that I don’t respect the thinking of reductionist management writers I have studied. For example, I am sure that Henry Mintzberg, Peter Drucker and Gary Hamel understand the problems they write about. However, their advice doesn’t help you to act on the system. Likewise, Nigel Slack and his colleagues have lots of useful ways of understanding operational problems and helpful tools to work on solving them, but not an approach to improving the whole system.

Systems thinking makes a lot of sense in a local government environment. Our customers, the citizens in the community see what we do as interconnected. They see the system, or at least the need for one. They interact with every part of what we do. And they force us to integrate what we are doing, even when we don’t want to. They don’t want to hear us say ‘I’m sorry, but that is another department’ or ‘its not us, its the contractor’.

Alistair Mant makes the contrast between systems thinking and reductionist management crystal clear in his comparison of bicycle and frog systems – reductionists see systems (to the extent that they see a system) as being like a bicycle that can be taken apart and each component improved separately, and the bicycle reassembled to work better than ever. Thinkers like John Seddon and Russel Ackoff see systems as being like Mant’s ‘frog’ systems – the components are not so easily disassembled and improved without affecting the whole, and the reassembled frog probably won’t perform as well as it did before disassembly!

I mentioned earlier that I would come back to Peter Drucker. In 1973 he wrote an article entitled Managing the Public Service Institution. It is worth reading.

Drucker looks at why public service organisations are less efficient than business enterprises. He reaffirms public services as the ‘load-bearing members of the main structure’ of modern society, providing services that are essential to society. Despite this importance, he says the performance of public service organisations is unimpressive.

They have large budgets and require ‘ever-growing subsidies’ but are providing poorer service. Citizens are complaining about ‘bureaucracy and mismanagement’ in the institutions that are supposed to serve them.

Drucker saw public service organisations as reacting to criticism by becoming more management conscious and adopting the concepts of business management. He saw it as a sign that they realised they were not being managed, but it did not mean that they understood the problems in managing themselves.

This remains an important point. Councils tend to adopt management ideas from elsewhere (as discussed in these posts). No proven and accepted local government management model has emerged.

Drucker went on to identify examples of public service organisations that were performing well and he looked at what made them different. In doing so, he compared the public service to a business enterprise and noted that the challenges are similar in making work productive, the managers have similar work, and top management is structured similarly. What he saw as different was the purpose. The public sector has a different purpose to a business enterprise.

“The service organisation has performance trouble precisely because it is not a business. What being ‘businesslike’ usually means in a service institution is little more than control of cost. What characterises a business, however, is focus on results – return on capital, share of market, and so on.”

Drucker finishes the paper by listing what he saw as the requirements for public service success:

  • Ask ‘what is our business and what should it be?’
  • Set clear objectives and goals derived from their definition of function and mission.
  • Get managers who do their job systematically and who focus purposefully on performance and emphasis the right results.
  • Think through priorities and to select targets, set standards of accomplishment, set deadlines, and make people accountable for results.
  • Define measurements of performance and use them to provide feedback on efforts.
  • Audit objectives and results to identify those objectives that are obsolete or have proven unattainable, performance that is unsatisfactory, and activities that are unproductive.

I have spent a bit of time talking about this Drucker article to show that not a lot has changed.

The criticisms of local government are the same today. Stephen Goldsmith in his books (The Responsive City comes to mind) dissects in detail the lack of trust in government, growing bureaucratisation of services, and the need to be more responsive to citizens (he describes the ‘Amazoning’ of services and ‘retail government’). And local government is responding to those criticisms in the same way – searching for yet another business management idea to implement that might do the trick.

Now we have lots of new ideas – smart cities, big data, customer apps, nudging, etc. Few of the management ideas that are taken up are ever really evaluated (another point well made by Goldsmith). CEOs introduce them and then move on. Most do not work easily in local government, as I have tried to show in describing my experience at several councils across 30 years.

The challenge today, as I see it, is to work out a way to address the list of requirements put forward by Drucker, and for that way to be focused on citizens. That way is more likely to be effective because it responds uniquely to the management challenges of the council, it works with organisational and community culture, it is quick to implement, and it is proven to be effective across the range of services offered by the council.

My challenge to anyone wanting to knock systems thinking or the use of a method like the Vanguard Method is to ask – if not this, then what?

88 – Classic paper – ‘Managing the public service institution’. Peter F. Drucker.

Posted by Colin Weatherby                                                                         Long read 1900 words

Editors Note: This is the first of a new type of post – the long read. Rather than split long pieces or edit out important ideas they will be a run as a long read. It is only recommended for those scoring more than 7/10 in the local government reading test!

In this insightful paper published in 1973, Peter F Drucker looks at why public service organisations are less efficient than business enterprises. In it he reaffirms public services as being ‘load-bearing members of the main structure’ of modern society – a provider of services that are essential to society. Despite this importance, he says the performance of public service organisations is unimpressive. They have large budgets and require ‘ever-growing subsidies’ but are providing poorer service. Citizens are complaining about ‘bureaucracy and mismanagement’ in the institutions that are supposed to serve them.

Why was that the case in 1973 and is it still the case in local government today?