19 – Integrated planning in local government. Some questions and answers. Part 2.

As discussed in the previous post, integrated planning involves each level of planning occurring in the correct sequence with goals cascading between plans to create alignment.  Here are some further thoughts.

An integrated planning process starts by effectively linking organisational strategy with planning.  Stace and Dunphy say that a ‘well argued, well documented strategic plan’ is not a strategy.  Instead, they say strategy is an ‘active process of thinking and communicating, generated at the corporate and strategic business unit levels, by which leaders gain the intellectual, emotional and behavioural commitment of their people in stretching the limits of the corporation’s ability to achieve success’.  It is the set of understandings that guide the direction and behaviour of the organisation.  Mankins and Steele believe that often strategic direction is established in spite of the strategic planning process, not because of it – “… with the big decisions being made outside the planning process, strategic planning becomes merely a codification of judgements top management has already made, rather than a vehicle for identifying and debating the critical decisions the organisation needs to make to produce superior performance”.  In local government, strategy arises from long term community plans and the day to day activities of the Council and the Executive.

So, integrated planning enables the continuous review and creation of strategy to influence plans.

An integrated planning process has one agreed set of organisational priorities. Resources are allocated to those priorities and the collective effort aims to implement those priorities and measure success in doing so.  Building an organisational plan by adding together the strategies and actions from multiple, independently created plans is unlikely to achieve this outcome. A top down approach is initially required to set high level parameters (i.e. the strategy) that planning then takes into action.  Each part of the organisation can use those parameters to create plans that cover their contribution towards achieving organisational priorities.

So, integrated planning occurs when each planning unit is working within shared parameters to achieve common strategic priorities.

An integrated planning process will link actions across functional areas.  The ‘silo’ effect commonly described in local government, needs to be overcome to achieve high performance.  If each department plans separately without clear strategic priorities and shared high level parameters, there will be a functional bias as each department optimises their activities.  There will be competition for the resources available within the common resource pool.  A focus on cross-functional processes when planning will help to integrate the work to be done in implementing strategy.  This will require processes to be identified, understood and owned, so that they can be properly considered in plans.

So, integrated planning recognises and reinforces cross-functional processes.

Planning isn’t integrated simply because we all do it at the same time, and integration isn’t achieved simply by joining together multiple independent plans.  A planning process is required that is top down and bottom up, and driven by functions (or departments) and processes.  The planning framework prescribed in NSW local government is a really good starting point.

Lancing Farrell

Mankins, Michael and Steele, Richard 2006. Stop making plans, start making strategy in Harvard Business Review, January.

Stace, Doug and Dunphy, Dexter 2007. Beyond the Boundaries – leading and re-creating the successful enterprise.

17 – Interested in local government management? Four books you should read and why. Part 2

This post continues my discussion about the books that I discovered in 2014 that I think should influence management in local government.

3. Improving Performance – How to Manage the White Space on the Organisation Chart by Geary A. Rummler and Alan P. Brache. Published in 1995, this book is quite different to the other two books recommended. It is not about the public sector and it is a hard core management book. The authors have developed a way of thinking about organisations and their performance that is very relevant to local government. Topics covered include managing processes and organisations as systems, linking performance to strategy, redesigning processes, and designing a performance measurement system.

Rummler and Brache apply their systems view by discussing the interdependence of nine performance variables shown in the diagram below.

the 9 performance variables

The levels of performance and the performance needs are described:

  • Organisation level – the organisational strategy, goals, and organisational structure.
  • Process level – how work flows across functions in the organisational structure.
  • Job/performer level – the people doing the work in processes.
  • Goals – the customer’s expectations of service quality, quantity, timeliness or cost, etc.
  • Design – of the organisation, processes and jobs to achieve the goals.
  • Management – the practices in place to ensure goals are current and being achieved.

It is a simple and powerful way to think about organisations vertically and horizontally. In a diverse organisation like local government, understanding the performance variables is critical to improving cross-functional services and reducing the ‘silo effect’ in which functional goals are put ahead of the goals of processes that deliver services to customers.  Read it if you are interested in cross functional processes and improving service delivery.

4. The Leaders Handbook by Peter R. Scholtes. Published in 1998, this book is also a serious management text. Written in an engaging way with lots of diagrams and case studies to illustrate points, it is accessible and easily read. So, don’t be put off. For someone who believes in systems thinking, it contains gems, such as this one below written in the context of performance appraisal and why Scholtes believes it isn’t effective;

“Successful work requires having a consistent and reliable set of systems, processes, and methods by which you and your people design, develop, and deliver what the customers need when and how the customers need it. Systems are created, sustained, and improved by insightful and interactive work on the system, not by using carrots and sticks. Measurable goals do not improve systems. Improving systems improves systems (p.303).”

Chapters cover a wide range of topics including, systems thinking; giving meaning, purpose, direction and focus to work; leading by asking good questions; and performance without appraisal. It is clear that Scholtes (a colleague of W. Edwards Deming) values systems and statistical thinking, relations with people, and learning to master improvement. He sees organisations as ‘complex systems of social networks and technical processes in which simplistic approaches will not help resolve complex problems’. He identifies 6 leadership competencies:

  1. Systems thinking – understanding the difference between systems and structure or policy; and seeking systemic causes, not culprits.
  2. Variability at work – knowing the difference between common cause and special causes of variation.
  3. Learning – understanding when a statement is theory or opinion versus fact, and acting accordingly; and knowing the difference between change and improvement.
  4. Psychology and human behaviour – understanding and applying the concepts of internal versus external motivation and demotivation.
  5. Interactions – seeing the interdependencies between systems thinking, variation, learning and human behaviour.
  6. Vision, meaning, direction and focus – providing clarity of purpose and developing and continuously communicating a clear sense of direction and focus.

Scholtes sets out a new paradigm for leadership for complex socio-technical systems.  Local government, with its political and organisational challenges, is nothing if not complex (as discussed in post 3).

I challenge you to read these books and then decide whether you think about your organisation as a system and if it is really focussed on creating public value by fulfilling customer-defined purpose through effective and efficient processes where variation is understood and performance is measured.

Lancing Farrell

5 – Local government services. How to define them?

In the last of this series of posts on services (see posts 2 and 3), I discuss ways to define services. The complexity described in the previous post will be evident here too. Unfortunately, nothing in local government is as simple as it could or should be.

You often hear councils described as ‘service organisations’ or being in the ‘service business’. As previously discussed, one of the main reasons local government exists is to ensure that a wide range of services are available to a community. This often means that the council delivers those services. What you don’t often hear about is a concise description of those services, a ‘service catalogue’ if you like. A list of services that helps everyone to understand what services the organisation will provide (and by implication, what services it will not provide). Knowing this should be a key element of organisational strategy (along with who are or are not customers, and how services will be provided efficiently).

Defining services should be straightforward. After all, we are delivering them every day and, in most cases, have been doing so for many years. In Victoria, councils are being asked to define services as part of a sector-wide asset management improvement program. A simple survey of councils revealed very different ideas about what constitutes a service. One council said that it had about 20 services, each defined by a department of the council. Another said that it had about 40 services, each defined by a unit within the council organisational structure (typically several units will form a department). A third council said that it had over 300 services, each defined by a cost centre in the council budget. The assumption seems to be that the organisational structure or budget defines services. This is expedient, but have they really defined services?

The Australian Centre for Excellence in Local Government conducted a review of service delivery reviews in 2012. They found that the ‘interpretation of the term ‘service’ for the purpose of reviews varied considerably between councils. Some councils defined services at a broad level and selected about 40 service groups or packages. Others broke them down into as many as 200 to audit and analyse their services at a detailed level’. Most councils differentiated between services to internal and external customers, and between those required to be provided due to a statutory obligation from those where there was discretion over provision. No criteria for defining services were identified in the report.

Geary Rummler and Alan Brache say that the work flow across functional boundaries is ‘how work gets done’. They contend that organisations produce their outputs through numerous cross functional work processes. If that is the case, then services are cross functional processes. Defining them according to functions is unlikely to be accurate.

I think that a useful definition of a service in local government is ‘an ‘end to end’ process that delivers an output to an identified customer’. The service could be part of a set of services that combine to deliver an output or outcome, which is probably better described as a value chain.

There are challenges in defining services as value chains or cross functional processes. To begin with, it challenges conventional thinking about how local government organisations work. Traditional power bases can be threatened if one disciplinary group no longer has control over a service. There will be a need for customer-focussed and process driven performance measures that are aligned with measures of the contributions of functions to the service. Rummler and Brache suggest appointing process owners, who they describe as the conscience, evaluator and champion of a process.

Thinking of services as processes will require fundamental changes in the way the organisation operates but it is more likely to result in high performance in service delivery.

Lancing Farrell

Australian Centre for Local Government Excellence 2012. Service delivery reviews in Australian local government.

Rummler, Geary A., and Brache, Alan P. 1995. Improving Performance – How to Manage the White Space on the Organisation Chart.