207 – Mills, mines, refineries and networks – what do they have to do with local government asset management?

Posted by Lancing Farrell                                                                          1000 words

disruption

I was talking to a colleague who recently attended a well organised and highly informative national conference on asset management. It was a pity that only three people of the three hundred attending came from local government. The rest were from sugar refineries, steel mills, manufacturing, energy supply, defence, food production, mining, ports, railways, airlines, telephony and numerous other organisations from across Australia. Apparently there was a lot to be learned. So why was local government absent?

Part of the explanation lies in the competing asset management conference run annually by the sector in Victoria. It is well attended by staff from many councils as part of their professional development and to support a sector initiative. I suppose councils don’t see any value in sending staff to a conference that doesn’t focus specifically on local government assets or the way councils have chosen to manage their assets.

A conference theme was disruption. Often it is outsiders who create disruption because they see things differently.  Sometimes it happens when insiders are frustrated by the status quo and they venture outside the organisation’s comfort zone.  Unfortunately, many organisations and industries are incapable of disrupting themselves.  Attending conferences run by your industry is much more comfortable.

It was interesting to hear from my colleague about how other industries view their assets and what they expect from them in the way they are managed. One key difference is that private sector has productive assets that are owned and managed to create shareholder value (i.e. make profits). The value created by those assets is captured by the organisation that owns them. It is different for most public sector assets. Continue reading

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206 – ‘The Outstanding Organisation’ by Karen Martin.

Posted by Colin Weatherby                                                         870 words

the outstanding organisation

This is a forthright and practical book full of inconvenient truths for local government. I suppose its relevance to local government depends on whether or not you believe that becoming an outstanding organisation is either possible or desirable. Karen Martin says that people know excellence when they see it and they know when they are not excellent. But do our leaders in local government?

This is another book (and I am repeating myself here) that everyone reading it who works in local government will wish they had read years ago. The key idea is that it is chaos that prevents organisations from becoming excellent. Martin says that managers and workers often don’t see the chaos or its causes. In many cases the behaviour causing the chaos is habitual and invisible. Typically, she says organisations respond to chaos by:

  • Becoming accustomed to it so that they think it is normal.
  • Recognising it but thinking that there is nothing that can be done about it.
  • Embracing it as a good thing and developing skills in coping with it.

Councils do all three to a greater or lesser extent. Continue reading

202 – Essay No. 6 – Local government and public value.

Posted by Lancing Farrell                                                                                              6500 words

bureacracy

Value is often mentioned in local government when talking about services, particularly ‘best value’. However, there is often inadequate understanding about the different types of value, the difference between private and public value, and how value is actually created and managed by an organisation. Sometimes there is the assumption that because we have been busy, that we must have created something worthwhile.

This essay brings together ideas from several earlier posts and is constructed around four hypotheses:

  1. That there are different types of value created by organisations and for local government public value is the most important.
  2. Public value is the primary value that must be understood and delivered if councils are to deliver what is expected by the community.
  3. Value-led management is a way of managing that could transform local government and make it more responsive and effective in serving the community.
  4. There are simple and effective tools that can be used to improve value creation in local government.

Hypothesis 1: There are different types of value and public value is the most important for local government.

Private value

In a metaphorical sense the value that you add is what you ‘bring to the party’. This is determined by what other people think you have contributed and by thinking about what the party would have been like if you hadn’t arrived.

There are different types of value and it is worth briefly considering the difference between private value and public value. Public value is the collective view of the public or community about what they regard as valuable, especially with regard to the use of public money and authority. Moore describes this as occurring along a spectrum from value that is obtained from public services that is essentially private value, similar to the concept of customer value, to public value that reflects the aggregate value expectations of citizens.

Moore degrees of publicness

At the private value end of the spectrum, the focus is on the individual service recipient and delivering value that satisfies their expectations.   At the public value end of the continuum, the focus is on achieving the social outcomes sought by the community or public. Continue reading

198 – Essay No. 5 – Local government and leadership.

Posted by Colin Weatherby                                                                         1300 words

Mark H Moore strategic triangle

Mark H. Moore’s ‘strategic triangle’ – the basis for value-led public sector management

I have been thinking about leadership a lot recently. It has been a recurring theme in posts on this site. Reading Jeffrey Pfeffer’s book has challenged my thinking about how leaders work and what motivates them. It has reinforced some of my scepticism about leaders and why they do what they do. I tend to agree with Peter Drucker’s questioning of the distinction between leadership and management. Ultimately, organisations, particularly in the public sector, have to be managed. The idea that somehow managers aren’t leaders or that leaders aren’t managing doesn’t make sense.

Having said that, I can think of organisational leaders I have known who couldn’t manage. At some point they just ticked the leadership box and assumed the position! Pfeffer explains how and why everyone then goes along with it. Once you are a leader it seems you can get to stay there without any real scrutiny and accountability for your performance. That has definitely been my experience in local government.

I keep imagining myself working in an organisation with an effective leader who manages the organisation for high performance (not career advancement). One that provides clear strategy, direction and goals.  One who coordinates effort to  across the organisation to achieve those goals. In particular, I have been thinking about how they could do that in local government. Continue reading

194 – Essay No. 4 – Local government and customer service.

Posted by Lancing Farrell                                                                              4500 words

basil fawlty

Customer service is, and should be, a major concern for local government. After all, councils are service organisations. Sometimes there is confusion about exactly what customer service means, how it relates to public service delivery, and what aspects of service are most important to get right in local government.

This essay focuses on three hypotheses:

  1. That ‘customers’ in local government are different to the customers described in most customer service literature and encountered by most service organisations.
  2. There are six main opportunities for local government to improve service to customers.
  3. There are simple tools available that can assist councils in getting service delivery and customer service right.

Continue reading

189 – Essay No. 2 – Local government, effectiveness and efficiency.

Posted by Lancing Farrell                                                                              3300 words

false economy cartoon

Image

People in local government regularly discuss effectiveness and efficiency. Often this happens in relation to pressure on revenues, such as rate capping. Most of the discussion centres on efficiency rather than effectiveness, and opportunities to stop delivering those services that are seen as ‘cost shifting’ from other government. The efficiency discussion is often not well informed. Frequently it focuses on inputs while ignoring outcomes and public value. Any savings are usually equated with cost cutting, not creating the same value at lower cost.

Australian researcher and writer Christopher Stone has published several papers on ‘false economies’. Each addresses a different aspect of productivity and efficiency in the public sector.

“Everyone has the right to know that money is not being wasted; that it is being spent as efficiently as is possible.” Christopher Stone, Decoding Efficiency, April 2013.

So, what is efficiency and how does it differ from effectiveness? Continue reading

188 – The council value proposition – what could it be?

Posted by Colin Weatherby                                                                                         1100 words

Kano model and brand

There have been a number of posts on value. In the context of imminent rate capping in Victoria it is timely to revisit some concepts of value relevant to local government. It is easy to overlook the fact that public service expenditure is about creating public value.  Especially when revenues are being constrained and thinking is turning towards making savings and cutting costs.

In the diagram above I have used the Kano model from Wikipedia and positioned three key council services that many regard as ‘core’ services – the provision of public parks, waste collection from residential properties, and provision of roads. Each has been placed in a different place on the diagram and I will explain why. Continue reading