A real story of a curious public sector leader, a pugilist and a contrarian, who chose to do the right thing and design his system entirely around the needs of the customer - against the advice of Government inspectors. What happened? Costs fell, morale soared and best practice got better.
How would you feel being responsible for 17,000 blocked toilets and 100,000 dripping taps? Owen Buckwell, a public sector leader from England has both on his to-do list. Over 40,000 people in the city of Portsmouth rely on Owen Buckwell for warm, safe and comfortable homes.
Owen is the head of housing at Portsmouth City Council. Portsmouth is the 11th largest urban area in England, more densely populated than London and once home to both Charles Dickens and Arnold Schwarzenegger. Neither of these men would have lived in what we call a council house. Council houses were built and run by Local Government to supply uncrowded, cheap- to- rent, well built homes to working class people. It is also known as 'social housing'. The majority of council housing was built in the mid 20th century making it over 50 years old. This means repairs always need doing, particularly of bathrooms, kitchens, windows and doors.
Owen has been managing the upkeep of 17,000 council houses for Portsmouth City Council for 6 years. He’s a curious man who likes to get to the bottom of things. In 2006, everything appeared to be going great for Owen; his management reports were stuffed full of encouraging numbers, he got good ratings from the Central Government inspectors and his customer survey results were among the best in the country. So what made him scratch his head? It was this: if the service he provided was so damn good, how come tenants were always complaining?
The Trigger was Curiosity.
Owen wanted to find out what was really going on. He chose the Vanguard Method to help him dig deeper. He chose this Method because a member of his team suggested he read an article I had written about the problems with inspection. Owen liked what he read. My work made sense to him intellectually.
The Vanguard Method
The Vanguard Method changes organizations from command and control to a systems approach to the design and management of work. Command and control management is characterised by a top down hierarchy, functional specialisms, the use of targets and a focus on managing people and budgets. Command and control in this context does not mean bossy managers. I am referring to the management logic. Command and control is the management logic at work in most (but not all) organisations across the world.
The first stage of the Vanguard Method, known as ‘Check’ involves managers listening to phone calls from customers over a period of several weeks. This isn’t a ‘back to the shop floor’ stunt. And it isn’t about managers listening to bright ideas from staff. Nor does it mean managers asking customers questions. The managers are silent. They simply listen, logging the reasons that customers call (in the customer’s own language).
Listening to Demand
In Autumn 2006, Owen and his team spent many hours listening to people complain over the phone and at reception desks. What was wrong with these people? Didn’t they know a good service when they saw one? Owen went home at weekends a broken man. Would he be sacked if the truth got out?
To Owens’s relief, he learnt that what he uncovered was typical. He learnt that his service, like many others, was stuffed to the gills with preventable or ‘Failure Demand' – calls that keep coming back because the service hasn’t done something, or has done it wrong. An example of Failure Demand would be a customer ringing to say, "A Plumber came last week but my tap is still dripping" or, "You've sent me the wrong form". An astonishing 60% of all contact made by customers was preventable. Wow. Preventable? This was the trigger. Owen was hooked.
A New System Design
Owen was to become the architect of a new system in 2007 - one that was designed entirely around the good kind of demand that we call ‘Value Demand’. Value Demand is a name for the calls and visits from customers that are necessary – this is the demand that service organizations want and exist to meet. For example, Value Demand placed on a hairdresser would be a person asking for a haircut, not someone complaining about yesterday's haircut.
The Cause of Poor Service
Owen and his staff learnt that the main cause of Failure Demand was the so-called ‘Best Practice’ from Government that staff were diligently following. Meeting Government standards guaranteed poor quality workmanship, missed appointments for repairs and half finished jobs. This led to repeat calls and visits by tenants to the council offices. Owen decided to do the right thing. He would stop trying to please the Government and would instead turn his attention to what mattered to his tenants.
The new purpose of the system is no longer to get glowing reports from Government. It is now “to carry out the right repair at the right time” for the tenant. This change of purpose shouldn’t be underestimated. It re-orientates the entire operation towards the tenant instead of towards Central Government. Measures are now linked directly to this purpose instead of to performance against arbitrary targets. Crucially, the data are now plotted in time series and used by the people doing the work on the job. In the old system, the data were reported up the management hierarchy months later when it was too late to do anything.
The Most Exciting Innovation
The most exciting innovation is that Owen's service does repairs on the day and the time when the customers want them! Jaw-dropping, amazing service. Just stop and consider that: wouldn't it be amazing if BT* could learn to do that? My bet is most managers would think it can't be done. And all this at half the cost.
The system is a massive advance in understanding how to use demand data to drive service design. First of all, understanding the predictability of demand volumes and major types of repairs has enabled them to plan resources effectively. Very clever. The system works as single-piece flow; the tradesman gets one job at a time, they have a visual system showing the jobs with when the customers wants them done; and another visual system showing when the tradesmen will come free from their current job.
How the innovation works (the techies will like this bit)
If you just sit and watch you see tradesmen coming free and getting the next job in the queue. It works because of the next startlingly obvious (when you see it) innovation: When the tradesman arrives at the job, he tells the office when he expects to be finished. Brilliant, because it designs out the perpetual problem with 'work management' systems; they work to 'standard times', and as any systems thinker would tell you, that is a big mistake. As soon as you hit variation, as you always will, these 'work management' systems don't work; they send the system out of control.
Every tradesman has his own van stock, worked out by taking data on actual materials usage over time, the cost of van stocks is now less than 25% of the original cost and failures in van stocks are minimised. Again, simply brilliant.
And now for the most amazing innovation. When a tradesman needs material he calls the logistics arm (Multi Trade Supplies - MTS) and the people there ask him when he'd like it delivered! They know that if you are taking out a bath, you want the new bath to arrive just as you take out the old one. And they measure against that nominal value. By studying both 'early' and 'late' variations they are able to further improve the system. For example, you soon learn that it takes only a few minutes to take off a door and more time than that to supply one, so it makes better sense for those tradesmen who will predictably need doors to carry them. As time goes by the van stock changes, things go in and out. It is a system designed for perfect. Of course it isn't perfect, but they are miles ahead of the competition and they have designed a system to manage or perfect.
Comserv/MTS has set an economic benchmark. With the City Council, they deliver this amazing service at half the original cost. It is extraordinary.
Owen followed the sequence below, known as the Vanguard Method, redesign the system. The Vanguard Method reliably achieves the change to Systems Thinking and fast. Owen and his team used the method over a period of 6 weeks from August 2006. After this time, the team experimented with the re-design of their service achieving previously unimaginable leaps in performance for several months. Now, in October 2010 they achieve incremental improvements on their long journey to perfect.
- What is the purpose of this system?
- What are its core processes?
- Capability - what are the system and its processes predictably achieving?
- System conditions - why does the process or system behave in this way?
- What needs changing to improve performance?
- What action could be taken with what predictable consequences?
- Against what measures should action be taken (to ensure the organisation learns)?
- Take the planned action and monitor the consequences versus prediction and purpose.
The Biggest Challenge
The biggest challenge is to change management thinking from command and control to systems thinking - even with the consistent, proven and reliable results achievable with the latter. It is normal for managers to design services with no knowledge of what is really going on for customers. The pull of doing what is normal is strong.
The Biggest Solution
The solution to this is to get managers to listen to demand as Owen did. It is a powerful lever. To begin with, Systems Thinking offended Owen. It went against everything he thought he knew about leadership. Owen is known as a practical, common sense, no nonsense man - not easily persuaded. He is proud to say he has never fallen foul of 'new fangled ideas' or the latest management fad. Owen knew that to get a radical change in service he had to do more than just tinker. He knew his staff didn't need coaching. There was nothing wrong with them. This was much harder than that. He had to change what was going on in his own head. The starting point for Owen, as it is for many systems thinkers, was curiosity.
It's a Fundamental Challenge
Systems Thinking is a fundamental change and a fundamental challenge to the current management orthodoxy. It is diametrically opposed to command and control thinking. Gone are the functional specialisation and procedures. You no longer hear “that’s not in my job description” or “the left hand doesn’t know what the right hand is doing”. In the place of procedures, Owen has learned to study demand, value and flow. Owen’s relationship with his customers is no longer contractual, it is about what matters to them. Decision making no longer takes place in ‘strategic’ management meetings separated from the real work. Decision making is integrated with the work. The old targets, activity measures, and standards have gone.
The new measures relate to the purpose from the customer’s point of view. Staff now understand variation including how to differentiate between ‘noise’ and ‘signals’ in the data. Owen’s relationship with his suppliers is no longer contractual. It is a cooperative relationship which means good service for Owen’s customers. It also means good business for his suppliers.
The new leadership ethos is no longer about controlling budgets and managing people. The new leadership ethos is about learning through taking action on the system. It is not about the people anymore. Owen always had a sneaking suspicion that people go to work to do a good job and it turns out he was right.
This table summarises the change in Owen's thinking from command and control to Systems Thinking:
Command and control Thinking
Functional specialisation and procedures
Design of work
Attitude to customers
Separated from work
Integrated with work
Output, targets, activity, standards:
Attitude to suppliers
Control budgets, manage people
Learn through action on the system
Assumptions about motivation
Back in Portsmouth
The first and biggest challenge remains at Portsmouth City Council. Owen and his staff have changed their thinking because they have listened to demand. They understand what performance really used to be like. Owen is a pugalist and a contrarian. He likes a challenge. Other senior managers in the organisation still think command and control. They have not been through the same normative learning experience so although unable to deny the results, they are not yet prepared to change the way they think about the job of leadership.
A Global Challenge
Fortunately Owen Buckwell is not alone. There are now many thousands, perhaps tens of thousands, of Systems Thinking leaders across the world all achieving outstanding results, all challenging conventional management thinking.
My mission is to help these people. And make many more curious.
- 60 days to complete a repair
- 60% of all contact from customers was ‘failure demand’ (i.e. people ringing back again and again)
- Tenant satisfaction rate of 50%
- Cost per repair from start to finish £258
- Tenants queued up at their local councillor's surgery to complain about the repairs service
- This service got a glowing score of 3 out of 4 from the Audit Commission (the Local Government watchdog)
- There was a culture of learned helplessness and compliance among staff and widespread cheating to meet targets
- Problems got 'fixed' in the management factory
- Services were designed remotely against theory
- People in the organisation left their brains at the door
- People were afraid to be wrong or highlight issues
- Motivation was extrinsic
- 7 days to complete a repair
- 13% failure demand
- Tenant satisfaction rate of 9.93 out of 10 (measured differently because the old measurement was flawed)
- Cost per repair from start to finish £114
- Tenants now get the right repair done at the right time
- Tenants bring flowers and chocolates in for staff
- Dramatic decrease in the number of complaints to councillor's surgeries
- Staff motivation is intrinsic - for the work itself
- Service is designed against customer purpose and demand
- Staff are encouraged to be imaginative, to alert mangers to issues and work together to solve them
- Audit Commission inspectors are unable to recognize the improvement because it isn’t on their checklist (only a benefit if you like irony!)
All this means that tenants can get a repairs appointment exactly when they want one. Not half-day slots. Not two-hour slots. Not even fifteen-minute slots. Instead the customer calls, getting quickly through to a real person, someone who actively listens and dispatches the right workman who turns up at exactly the time the customer has requested. When they turn up, they do the job there and then and ask if anything else needs doing while they are there. Can you imagine?
A Beautiful Housing Service
Owen Buckwell says "When I went to a resident conference recently and spoke, I got cheers and rounds of applause. Afterwards, a tenant came up to me and said, "I just want to tell you that you run a beautiful housing management service". The previous conference I went to, all I got was people putting their hands up wanting to shout at me and complain"
The Social Benefit
The redesigned service means an improvement to the lives of around 51,000 people - the number of housing tenants in Portsmouth.
There has also been a rise in the numbers of tenants willing to get involved in the management of their local area. This was an unintended consequence of the improved service. Now residents know that things will get fixed, they are willing to report things when they go wrong. The trust between housing tenants and the council is slowly being restored.
- Mankind invented management. Current management works but not very well; it needs re-inventing urgently
- We can reinvent management from command and control to a systems approach. Owen Buckwell in Portsmouth and thousands of others are doing it
- Forget your people. Real leaders act on the system. Real leaders redesign the system to meet demand. When leaders act on the system, customers cheer, costs fall and the culture change comes free.
- Owen Buckwell and his team and Portsmouth City Council
- Everyone at the repairs contractor Comserv and the logistics arm MTS
- John Little, Lead Housing Practitioner at Vanguard Consulting
- Mireille Jansma for introducing John Seddon to the MIX
- Howard Clark from Vanguard for shooting the video
- Charlotte Pell, Campaigner for Systems Thinking in the public sector, for helping to write the story
- Everyone who asked questions, left comments and help build this story on the MIX
Guardian Newspaper article, Nov 2009 on Owen Buckwell’s approach to leadership
Systems Thinking in the Public Sector, A Manifesto for a Better Way John Seddon's manifesto for real public sector reform and Freedom from Command & Control: A better way to make the work work
Welsh Audit Office report on Vanguard’s systems thinking including the Portsmouth story