From: Vanguard
[info@vanguardconsult.co.uk]
Sent: 05 March 2012 12:50
To: Summers, Paul
Subject: Vanguard News - March 2012
Vanguard
News – March 2012
In
this issue:
Desperate
for evidence
Le
Grand Drivel
Motivated
to meet targets
A
cop knows the answer
Solid
evidence
Commissioning
drives up costs
The
eminence grise
More
bad news from SW 1
Out-sourcing:
a disaster in the making
How
do we change thinking?
The
DWP don’t get it
Down
at the coal face
Shared
services
Academics
notice
Citizens
notice
Mums
notice
Smaller
is cheaper
An
inspector writes
***
Desperate
for evidence
When
Dave (our prime mister) ran his recent health ‘summit’ – without inviting those
who disagree with the Health and Social Care Bill – he announced that research
showed competition is best for health. The research he was referring to is a
paper that has, in fact, been ‘announced’ many times since it was first
published. It was authored by Zack Cooper of the LSE, and reports that
competition leads to "moderate but statistically significant"
reductions in patients' length of stay.
What
we know from studying health and care systems is that the focus on costs leads
to shorter episodes of care – hence shorter lengths of stay – but also more of
them – people are ‘churned’ – and every time people are readmitted they are
usually treated as though they are ‘new’ events; creating more revenue for the
provider – through commissioning arrangements – but also ensuring there is no
continuity of relationship. Furthermore, the consequences, for many cases, are
greater costs and greater dependency when people return home or, in the case of
many adults, are shunted off to care homes.
Aside
from the evidence of what is actually happening on the ground, two academics
have published criticisms of Cooper’s research methods. Allyson Pollock wrote
about its flaws last June and Ian Greener criticised it last month. See these
here:
http://www.guardian.co.uk/commentisfree/2011/jun/16/nhs-fear-tory-reforms-competition
http://t1ber1us.wordpress.com/2012/02/12/competition-and-saving-lives-a-reprise/
And
for his frequent use of the word ‘evidence’, as though to convince, the
Secretary of State for health was taken to task by Ben Goldacre, ‘Bad Science’
writer for the Guardian:
http://www.guardian.co.uk/commentisfree/2011/feb/05/lansley-use-word-evidence
***
Le
Grand Drivel
From
the same stable (the LSE), economist and ministerial favourite, Julian Le
Grand, bangs on about his pet theory that people delivering public services may
be either ‘knaves’ of ‘knights’, each with their own forms of motivation. And
thus, by somehow assessing which each is, “the trick is to... to construct... a
'robust' incentive structure” to fit each, according to Le Grand.
We
should remember that the ‘science’ of economics is not a science at all, merely
an attempt to explain. Perhaps this is why politicians listen to people like Le
Grand; they provide explanations that fit the political narrative. Le Grand
ought to read the robust research literature on incentives, which shows that
all contingent incentives (do this to get that) lead to less of what you want,
not more.
You
can read his drivel here:
***
Motivated
to meet targets
Meanwhile,
back to the NHS: Polly Toynbee, writing in the Guardian, described an example
of motivation at work; a waiting-list clerk in the NHS was ordered to cancel
operations for anyone who was already waiting over 18 weeks; and instead, to
fill that theatre time with people closest to breaching the 18-week limit.
"I was told to call people who had already gone over the 18 weeks and
pretend there was no longer theatre time for their operation, and not give them
a new date." She was told not to book anyone already in breach until
April, the start of the next financial year. Instead she was told to fill
theatre slots with as many short, minor operations as possible.
Read
it here: http://www.guardian.co.uk/commentisfree/2012/feb/20/cameron-nhs-cheats-waiting-lists
Would
Le Grand count her as a knave? Clearly she was doing as she was told, so were
her bosses knaves? No, it’s far simpler than that, they are merely products of
the system.
Vanguard’s
team working in health blogged on this issue last November. In essence our
argument is that better measures, specifically measures of demand and
capability (achievement of purpose in customer terms), would lead to better
understanding and therefore better performance:
http://vanguardinhealth.blogspot.com/2011/11/killer-targets-ii.html.
***
A
cop knows the answer
A
police officer working in mental health learned the same thing. In his blog he
explains that if we were to actually help people who present with mental health
problems, the costs would fall. Why don’t we? Because we are focused on the
wrong things. See the blog here:
http://mentalhealthcop.wordpress.com/2012/02/04/its-cheaper-to-do-it-properly/.
***
Solid
evidence
I
was asked to speak on the You and Yours programme on Radio 4 a couple of weeks
ago, to give some background to a package they had made of our work with health
and social care providers in the South West. The package illustrated how
spending time understanding peoples’ real needs, the costs of service provision
fall.
I
mentioned a similar study we have been helping with in the North West. What we
know from that work is that between two thirds and three quarters of NHS demand
is what we are calling ‘help me’ demand (largely health and social care
issues), as opposed to ‘fix me’ demand (i.e. something gone wrong). What’s
more, we now know that if we can configure the services to meet the real ‘help
me’ needs, costs fall by about 25%. As I said to an audience in Whitehall
recently, ten years ago naively I would have expected a call from the Secretary
of State for Health to ask how this has been achieved. But today I know that
Whitehall doesn’t do evidence. You can listen to the Radio 4 piece here:
http://www.youtube.com/watch?feature=player_detailpage&v=T6oSf9xJaDw
And
if you think I am being cynical about Whitehall, please remember that I first
gave evidence to a care minister about the problems and opportunities for
improvement in 2005 and nothing has changed.
***
Commissioning
drives up costs
At
the heart of Dave and Co’s competition strategy is commissioning. It is central
to what economists call the ‘efficient market hypothesis’; something for which
there is no proof. The economists believe that if you price standardised
services, then ‘any willing provider’ might come along and offer to provide
them at lower costs than their competitors.
What
the Somerset, and our other work in health, has taught us is that commissioning
drives costs up. The reason is simple: when you commission services they are
specified and the specifications don’t meet peoples’ actual needs. It is a
classic failure-to-absorb-variety problem. If you listened to the ‘You and
Yours’ piece, you’ll have heard examples of the phenomenon.
***
The
eminence grise
So
who are the thinkers behind Dave and Co’s plans for the NHS? This time it’s the
Mail on Sunday that has the story. McKinsey, the pre-eminent scale consultancy
is the thought-leader for health service reform:
***
More
bad news from SW 1
The
failure of scale designs to absorb variety is at the heart of the failure of
SW1 (the joint venture between IBM and two South West councils). Just like the
NHS, SW1 has pursued a strategy of industrialising services (call centres,
back-offices, standardised work etc). Sadly, the council’s leader responsible
for getting out of the mess thinks out-sourcing services will be the better
answer. See the latest report and his views of the next steps here:
***
Out-sourcing:
a disaster in the making
The councillor struggling with SW 1should take a
drive north where one of our largest metropolitan councils has been on the
out-sourcing path for some years. An enlightened mole has been corresponding
with me about what’s going on there and I summarise our conversation:
The
idea of out-sourcing arose in 2006 when the costs of the call centre were
growing. All regular readers will know the reason call centre costs were
growing was because it was full of failure demand, caused by moving all
telephone work out of services and into the call centre to comply with the 2005
target. I asked if they knew about the extent of failure demand. He went off to
ask and he was told that the change-programme people estimated that 35% of all
unanswered calls (‘abandoned’ in call centre parlance) were return calls. Yes,
you may want to read that again. No knowledge of the nature or extent of
failure demand and a reliance on the abandon rate as an indication of what
might be preventable. It’s because the numpties worry about service levels –
picking up the phone – and that’s all the data they have. Of no use whatsoever.
He
tells me the change planning people are spending their time
manipulating spreadsheets to come up with a ‘palatable’ benefits case. To
get to break-even over the coming years the change planners have assumed they
will get rid of failure demand (yes, something they have no knowledge of). My
intrepid reporter pushed on the matter of what volume of demand is failure
demand and, eventually, he was told it would be the 35%; when he pushed again,
to ask about how they knew this was the right number, as by their own admission
they knew nothing about true volumes, he was told ‘that it felt about right’.
He went on to ask how the failure demand was going to be removed and the answer
was: that will be the responsibility of the managers running the services.
I
know – you couldn’t make it up. But it gets worse...
Not
giving up, my mole got a manager from a care service involved in the
conversation. He knew that 63% of all calls to the service went unanswered (the
reported abandon rate). The plan is to move all these calls to the call centre,
as this will ensure they will be picked up (as the argument goes). The manager
asked my mole to critique her slides which had been put together for
the change-programme board. He explained the basics of failure demand and
pointed out that at no point did her plan describe what the problem(s) are and
picking up the failure demand is not the same as getting rid of it.
The
mole continues: “Recognising I was right she dragged over a manager from the
change programme [and he said] that it doesn't matter, the money has already
been budgeted for and the slides are only really to confirm the business
case. When I pushed him on the lack of a defined set of problems and
asked how they intended to spend the money if they don't actually know
what needs fixing, he said that the general view at the leadership
level was that the causes of the poor performance were due to capacity issues
in the workforce. Demand is not a concept even discussed.”
The
mole gave up. As you would. It illustrates the nonsense of following an
ideological wrong-headed view, something Dave and Co ought to worry
about. The management factory is all about delivering the plan, there is
little appetite for understanding what works.
The
facts of the matter are these: it is common to find failure demand running as
high as 80% of all demand into care services. Instead of sending all these
calls to a call centre, understanding demand leads to a service design that
works and demand volumes drop (failure demand drops to almost zero). If only
they knew.
***
How
do we change thinking?
The
change-programme people and the managers of this metropolitan council believe a
number of things that are, simply, false. These beliefs are all derived from
what I call the core paradigm which, in the case of call centres, is: how many
calls come in, how many people do I have and how long do they take to handle
the calls?
While
the most obvious counterintuitive truth is that if large volumes of demand are
failure demand you’ve missed the point, a less obvious one is that 95% of the
peoples’ performance is governed by the system. True for care services and all
other services.
I
mentioned meeting Hayley Johnson in a previous newsletter, she who runs a sales
organisation where such an idea is so counter to convention it is considered
completely bonkers, after all sales is all about people right?
Many
people asked me to post the ‘Hayley video’ on line, so I did, you can watch it
here:
If
the managers dumped their change-programme staff and got out into the work
they’d learn some things that would help them make a big difference.
***
The
DWP don’t get it
Regular
readers will know of my doubts that the Universal Credit will be deliverable
on-line, my argument being that an on-line service won’t deal with variety and
thus will fail to help those in need and if those people have the energy it
will create high volumes of failure demand.
The
change-programme managers for the Universal Credit are now back-tracking on
their ‘digital by default’ mantra. In the Guardian (again!) we find a man
called Steve Dover, director of major programmes at the DWP saying there would
be a "back office to deal with the more vulnerable in society",
though it is expected to be "thinner and there will be a massive
web-enabled internet channel for the vast majority of the transactions that will
be done for universal credit".
But
Steve doesn’t know how big this ‘back-office’ (in fact a call centre) will be,
because he has no understanding of the problem. Speaking at the Government ICT
Summit in London he added that other methods of delivery would have delayed the
project until February or March 2015, budgets would have doubled and
"there would have been huge arguments along the way with our partners, our
service providers, and within the departments between all the different silos,
so policy, business design, IT, implementation, release and operations".
Complete
nonsense. We have offered to design a service that works, with people at the
front end (as only they can absorb variety) and it would have meant none of the
hundreds of millions being spent on computer systems (an eye-watering £500m
announced last month). But the DWP plan is to dispense with people providing
benefits locally. Steve’s admission that there will be some means to help those
who need it is merely a back-up for his cunning but wrong-headed, cost-obsessed
plan.
You
can read Steve Dover’s views here:
http://www.publicservice.co.uk/news_story.asp?id=18763
***
Down
at the coal face
A
reader writes:
“Here
in social housing, we are clenching our cheeks (both sets!) for the arrival of
the real time computer system for Universal Credit. At a meeting in
Manchester in November 2011, the DWP told us that they were using the ‘Agile
System’ to manage the implementation of the IT. I was present with a full
room of housing professionals from CEO s downwards and once the DWP reps
left, the level of dissent was like nothing I’ve ever seen in 15 years in
the sector. The focal point was that payments were to be made to families
4 weeks in arrears - akin to how one is paid for work - when in fact, by
law, social housing tenants have to pay their rent on the Monday beginning
of each week as stated in many tenancy agreements. The thing is John,
4 weeks arrears is when most landlords have actually got into serious action
mode (including evictions) for those who don’t pay their rent. And,
according to those present who work with the current system, it is more like 8
weeks before many tenants get their housing benefit paid.
No
doubt you’ve heard a lot of this stuff already but it’s as if by ideologically
classing those on benefits as ‘work-shy’ and needing to know what being in work
feels like, they’ve overlooked how the system of paying for your rent actually
works.
ALL
the landlords present at that meeting in Manchester said that they would not
change their rent arrears procedures to accommodate the DWP ‘s Universal Credit
payments to claimants 4 weeks in arrears. Nor will my own organisation for that
matter.”
There
you go Steve, sort that one out.
***
Shared
services
Meanwhile,
more evidence of the other ‘economy of scale’ disaster, shared services, only
mounts. While Dave and Co think sharing services is the saviour of our
fortunes, people notice that it doesn’t work. Herewith two examples from over
the pond and I can confidently predict some real shockers in the UK will come
to light soon.
***
Academics
notice
“[Shared
Services] was supposed to be streamlining and simplifying our lives, and what
it’s done is made it much more complicated, said Benjamin Foster, a professor
in the Near Eastern Languages and Civilizations Department. Everything takes
about two times as long. We resent the down-skilling of departmental
administrative personnel. We don’t see how that can be more efficient or
cheaper.” Read more here:”
http://www.yaledailynews.com/news/2012/feb/08/shared-services-under-fire-from-faculty/
***
Citizens
notice
People
sceptical about what was delivered in New Jersey:
http://www.theridgewoodblog.net/2011/12/readers-skeptical-of-shared-services.html
***
Mums
notice
Although
not an example of shared services I couldn’t leave this out. Mumsnet, a
favourite of Dave and Co, noticed the nonsense of risk assessment strangling
common sense:
http://netmumsblog.com/2012/02/08/blog-of-the-week-the-risk-assessment/
***
Smaller
is cheaper
I
mentioned this last year, but it is appropriate to mention it again. Research
shows smaller councils are cheaper, economy of scale is a myth:
http://www.bettergov.org/assets/1/Page/TOI-ReporttothePeople-20110110.pdf
***
An
inspector writes
Regular
readers will know I am a fan of Inspector Guilfolye, a practicing police
officer who manages policing as a system. Hats off to him for writing a
thorough academic critique of targets and performance management. I recommend
it:
***
Systems Fundamentals – open programmes
As regular readers will know our open programmes run
in Hull and Derby Universities and in the Waterton Centre in Bridgend. The
Systems Fundamentals programme is something we developed to run in-house; it
gets leaders started and causes them to ‘pull’ the Method (important because
you have to want to change your thinking). It serves as an introduction to the
power of the Vanguard Method and it is, essentially an action-learning
programme, it is the work participants are given to do back-home that gets them
learning.
The open programmes run according to demand, if you
have an interest you can register as follows:
Hull: http://www2.hull.ac.uk/hubs/short-courses/courses/systems-thinking.aspx
Derby: http://www.derby.ac.uk/dbs/systemsthinking?csId=&courseQuery=systems+thinking
***
Other Forthcoming Vanguard Events:
Process Mapping and Analysis for Performance
Improvement
Thursday 22nd March 2012 – Buckingham
Thursday 26th April 2012 – Buckingham
For information and
bookings: office@vanguardconsult.co.uk
***
Food Safety: using systems thinking to help
businesses produce safe food
Thursday 22nd March 2012 – Birmingham
For information and booking form: pr@vanguardconsult.co.uk
***
Profound Results event
Thursday 29th March – Birmingham
Thursday 26th April – Manchester
Thursday 24th May – Newcastle
To express an interest for more information as soon
as available, please email pr@vanguardconsult.co.uk
***
An Introduction to The Vanguard Method – Wales
Thursday 29th March 2012 – Bridgend
For information
and booking form: pr@vanguardconsult.co.uk
***
Are
you prepared to change the way you think?
The
Vanguard Method: Delivering efficiency beyond imagination in your organisation.
A
four-day action-learning programme.
Manchester:
Day 1 –
Tuesday 17th April 2012
Day 2 –
Tuesday 24th April 2012
Day 3 –
Tuesday 1st May 2012
Day 4 –
Tuesday 15th May 2012
Birmingham:
Day 1 –
Thursday 19th April 2012
Day 2 –
Thursday 26th April 2012
Day 3 –
Thursday 3rd May 2012
Day 4 –
Thursday 17th May 2012
Bridgend,
Wales:
Day 1 –
Thursday 14th June 2012
Day 2 –
Thursday 21st June 2012
Day 3 –
Thursday 28th June 2012
Day 4 –
Thursday 5th July 2012
For
information and booking form: pr@vanguardconsult.co.uk
***
Thanks
for reading!
John
Seddon
Author:
"Systems Thinking in the Public Sector”, available from Triarchy Press: www.triarchypress.com
and “Freedom from command and control: a better way to make the work work"
available from Vanguard (www.systemsthinking.co.uk).. “Freedom
from command and control” is also available in the US from: http://www.productivitypress.com/productdetails.cfm?SKU=3276
For
independent evidence of the benefits of systems thinking in the public sector
see the case studies: http://www.triarchypress.com/pages/Systems_Thinking_Case_Studies.htm
Vanguard
Consulting: Developers of the Vanguard Method, helping organisations change
from a command and control to a systems design. Beware of imitators, as
Vanguard has developed solutions for sectors others claim to be able to provide
the same service. If providers are not accredited to the Vanguard Method you
should not expect a Vanguard service.
www.thesystemsthinkingreview.co.uk
A web-site devoted to Systems Thinking in the public sector.
Systems
Thinking People – a service helping systems thinkers find suitable work and
helping organisations fund suitable systems thinkers. www.systemsthinkingpeople.com
Vanguard
Capchart – simple-to-use tool for creating capability measures. http://www.vanguardcapchart.com/
Other
Vanguard sites around the world:
Ireland:
www.vanguard-ireland.com
Scotland:
www.vanguardscotland.co.uk
Netherlands:
www.vanguardnederland.nl
Denmark:
www.vanguard-consult.dk
Sweden:
www.vanguard-consult.se
USA:
www.newsystemsthinking.com
Croatia:
www.vanguard-savjetovanje.hr
Belgium:
http://www.vanguardbelgium.com/
***
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