142 – A question. If I was the CEO what would I do? Answer: Focus the change effort.

Posted by Colin Weatherby                                                                                            740 words

boat builder CEO

I am sure being a CEO isn’t easy. The political environment in Australia is difficult and even more so in local government where the politicians are unpaid and not supported by political parties. There are many other pressures from the external environment – i.e. changing State government legislated responsibilities and increasing oversight of council operations; contentious urban growth and renewal planning decisions; inadequate State services for transport, education and health; and changing community expectations of service. So, if it was me, what would I do?

To begin I would not let the limitations and problems of the political and external environments dominate my management of the organisation. They are both urgent and sometimes important. However, they are not easily influenced and can take all of top management’s time and energy for little return. By all means be engaged and influence where you can but my approach would be to put my effort where no one else can and where I will get the best return.

By doing this, I think there would also be an improvement in the political environment and a stronger position to tackle the external pressures.

What do I mean? I would get my house in order. I would ensure that the resources at my disposal are used to create the maximum value for the community that has provided them. My goal would be for every ratepayer and resident to love living in my municipality. They would love it so much that they would tell all of their friends about it. They would offer to pay more for the services that they or their neighbours need. Every day social media would have stories of the great experiences people have had dealing with the council and the surprisingly good value they received.

Expectations would be met for basic service and exceeded where the value is visible and appreciated. This is the value capture that Sayan Chatterjee  talks about – councils don’t want people to value the services they provide and to offer to pay more so that the council can make a profit. Councils are not in that business. Instead, councils want them to be loyal customers who enjoy the value they get from paying their taxes. That enjoyment and loyalty is the value capture.

I wouldn’t ignore the outside world but I would want to be leading an organisation that redefines community expectations and delivers outstanding value. Here is how I would do that in order.

  1. Provide a more inclusive and less autocratic management style that suits local government culture and organisations expected to work that way with their customers.
  2. Set clear strategy – who are/are not customers; what service will/will not be provided to them; and how will it be done efficiently using available resources.
  3. Improve the customer focus by putting customers first (I mean really putting them first, not just saying it) through understanding the value they expect and designing services to provide it within available resources, now and in the long-term.
  4. Create better processes to make decisions and delegate more decision making and empower staff throughout the organisation so that more decisions are made and faster.
  5. Establish greater accountability by setting expectations and measuring performance so that feedback is provided to support achievement and create a performance-orientated culture.
  6. Focus innovation on areas of the organisation where significant change is required and set up systems to so that everyone continuously improves.
  7. Simplify the complexity inherent in local government by identifying and eliminating process constraints that have developed over time.
  8. Focus on productivity by ‘unlocking’ the capacity of people and resources to ensure that the required services are being provided as efficiently as possible.

I have been told (by a CEO) that a world where ratepayers and residents enjoy the value they get for the taxes is unrealistic and unachievable.  If that is what our leaders think, what hope is there?

I have used an image of a boat builder for a reason. I have a relative who owns and builds wooden sailing boats. After talking to him, I think that leading an organisation is a lot like building a boat. You need to design the boat to optimise the performance required – does it have to be safe in all conditions, will it have to make fast passages, or will it carry burdensome loads? One boat can’t do them all.

Then materials must be selected and the builder needs to understand the properties of those materials – how they are worked to make the boat, how they will perform under load, how they will fail, and how they can be repaired.

A boat must be made with care. There is a right and a wrong way to do it, and doing it the wrong way could lead to failure and loss of life. Finally, the boat needs to be beautiful.

This is an important point for local government.  In the same way that there is no joy in building or owning an ugly boat, success in local government must also include a sense of pride and achievement in having contributed to something worthwhile.

Chatterjee, Sayan 2013. Simple Rules for Designing Business Models, California Management Review, Winter.

Advertisements

116 – Are we really that ‘special and different?’ Another answer: ‘Yes, of course’.

Posted by Parkinson                                                                                       450 words

fingerprint

It has been a while since I posted but I couldn’t resist this topic. I appreciate the views put forward by Lancing Farrell and they have merit. But, from my point of view it is obvious why councils are different and should remain different.

Councils need different capabilities to serve their communities. These capabilities have often been developed over time in response to drivers evident to community leaders. For example, provide excellent customer service in delivering basic services to an affluent and demanding community; be able to build new infrastructure quickly and well to meet the needs of a rapidly growing peri-urban council – with limited resources; make sure that ageing facilities are cared for to protect their cultural values in a heritage place.

The leadership of every community will be different. Continue reading

108 – Melbourne City Council: Organisational Capability Review, May 2015.

Posted by Colin Weatherby                                                                         1300 words

Melbourne capability review model

The public release of this critical report has been something of a surprise. Commissioned in March 2015 and released in May, the report prepared by Jude Munro, Dr Bronte Adams and Steve Parker has looked at three key capabilities; leadership, strategy and delivery. Each has been rated on a four point scale for several elements. Out of the ten attributes rated, six were seen as a ’development area’ and one as a ‘serious concern’. The remaining three were seen as ‘well placed’ and none were seen as ‘strong’ (p.14). So what does this mean?

melbourne assessment criteria ratingsThe report states that this is the first time that this review model has been applied to local government in Australia. Its intention is to provide a forward looking, whole of organisation review that assesses an organisation’s ability to meet future objectives and challenges.

 

“This review provides the opportunity and impetus to take a very good organisation and make it even better.” Ben Rimmer, CEO

Continue reading

34 – Middle managers in local government: the ‘scrapers of burnt toast’?

Posted by Colin Weatherby                                                        620 words

burnt toast

This is the phrase used by Peter R. Scholtes in The Leaders Handbook to describe the work of many middle managers as ‘expediters or troubleshooters’ in organisations that have yet to eliminate waste and create ‘efficient, smooth, uncluttered flows of work’.   He says that in a ‘flat’ organisation the layers of middle management have been removed as part of the focus on eliminating waste. In an efficient system, they are unnecessary and non-value adding roles. I am sure he doesn’t think that middle managers aren’t required.  You just need less.  It is an interesting idea.

Scholtes says that removing layers as part of improving organisational performance reduces opportunities for promotion. As a result, people leave to find less efficient organisations where their skills in ‘expediting and troubleshooting’ are required to deal with inefficiencies and waste to make the system work. I started thinking about my role and the role of colleagues in middle management, and what we spend each day doing. What do we talk about when we meet in the corridors? Are we mostly adding value or just spending our time making dysfunctional systems work? Continue reading

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

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

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