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Forget your people – real leaders act on the system

John Seddon - Reluctant Management Guru at www.thesystemsthinkingreview.co.uk

July 7, 2010 - 7:51am

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Contribution Summary

Title

Forget your people – real leaders act on the system

Summary

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 inspectors. What happened? Costs fell, morale soared and best practice got better.

Moonshot(s)

Redefine the work of leadership

Context

How would you feel being responsible for 17,000 blocked toilets and 100,000 dripping taps? Owen Buckwell, a public sector manager 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 11^th 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. The majority of council housing was built in the mid 20^th century making it over 50 years old.

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 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?

Triggers

Owen wanted to find out what was really going on. To do this, he used the Vanguard Method, a method that changes organizations from command and control to a systems approach to the design and management of work. He chose this method because one of his team told him he should read an article I had written. Owen liked what he read and decided to recruit my management consultancy, Vanguard, to help him.

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).

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 astonishing 60% of all contact made by customers was preventable. Wow. Preventable? This was the trigger. Owen was hooked.

Key Innovations & Timeline

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.

Owen and his staff learnt that the main cause of Failure Demand was the so-called ‘Best Practice’ from Government that they were diligently following. Meeting Government standards and targets 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.

Many of the innovations were counter-intuitive. Who would have thought that if workmen carry out a repair at a time when it suits the tenant it’s cheaper? And who would have thought that by removing all numerical targets repair time would drop to an average of 7 days from 60? More surprising still is that workmen fix 96% of repairs on the first visit because they have the right equipment on the van. If they haven’t, the parts are delivered promptly by the supplier to finish the job.

The new purpose of the system is no longer to meet targets and 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 Government inspectors. Measures are now linked directly to this purpose instead of to budgets, activity- for- the- sake- of -activity or to performance against arbitrary targets specified by the inspectors. Crucially, the numbers are now plotted in time series and used by the people doing the work on the job instead of reporting them up the hierarchy months later.

Owen followed the following sequence, known as the Vanguard Method, to redesign his system.

Check

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?

Plan

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.

Challenges & Solutions

The biggest challenge is changing 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 at the interface between staff and customer. It is also normal (and understandable when your job depends on it) for managers and staff to do what it takes to please the inspectors.

Other major challenges were regular inspections carried out by the local government watchdog, the Audit Commission and ‘Best Practice’ promulgated by the department for Communities and Local Government.

The first and biggest challenge remains. Owen and his staff have changed their own thinking because they have experienced the dramatic improvements brought about by systems thinking for themselves. Other senior managers in the organisation and beyond remain skeptical. They have not been through the same learning experience so although unable to deny the results, they are not prepared to change the way they think about the job of leadership.

Owen Buckwell has not entirely overcome the hurdles of inspection. He now only does the minimum required to satisfy the inspectors. This is a far cry from the weeks of preparation put in by his peers in other local authorities. But he is not able to ignore the inspectors completely. If he did, he would be fired and Portsmouth would lose a good leader.

Benefits & Metrics

January 2007:

60 days to complete a repair
60% of all contact from customers was ‘failure demand’
The real tenant satisfaction rate was 50% (although was reported as 98%)
There was a culture of learned helplessness and compliance among staff and widespread cheating to meet targets
A score of 3 out of 4 from the Audit Commission (the local government watchdog)

March 2010:

6.9 days to complete a repair
13% failure demand
Real tenant satisfaction rate of 9.93 out of 10
Motivation is intrinsic - for the work itself
If something goes wrong, staff work together to solve it
Audit Commission inspectors are unable to recognize the improvement because it isn’t on their checklist

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.

Lessons

Lessons

We can reinvent management from command and control to a systems approach but people have to learn the lessons themselves because they are counter-intuitive. It is of no use trying to persuade people rationally. They will argue with you and think you are mad. All you can do is try to generate curiosity.
One organization’s ‘Best Practice’ is another’s ‘Worst Practice’. Everything you need to know to improve your performance can be found in your own system. If you study demand at the point of interaction with the customer, you will discover a powerful lever for improvement; beyond anything you would put in a plan.
Forget your people. If you act on the system and redesign it to meet demand, the culture change comes free.

Credits

Owen Buckwell and his team and Portsmouth City Council
John Little, Lead Housing Practitioner at Vanguard Consulting
Mireille Jansma for introducing John Seddon to the MIX

Input

Builds

Raj Kumar

August 23, 2010 - 8:52pm

A delightful story. And that is because the leader had the courage to progress it to a happy ending. Most leaders, even after getting the right idea, would have submitted to the measurement and reward system, as indeed Mr. Buckwell's colleagues did. Shows that knowing the way is not enough. The energy to follow it is essential.

In the three step 'Check - Plan - Do' method recommended may I suggest a fourth step called 'Feedback'. Not only is Feedback the heart of a control system for getting what one wants but the word itself focuses activity on the results desired instead of some 'intelligent' thinking. I acknowledge elements of ‘Feedback’ have already been incorporated in the Plan step with thoughts like ‘measures’, ‘improve performance’ and ‘consequences’ but they cannot precede the third step ‘Do’ unless “Feedback’ is incorporated. The conceptual element of Feedback would theoretically raise it over the Define-Measure-Analyze-Design-Verify methodology of Six Sigma.

Conceptually, there is a similarity between Nayantara’s Barrier 'The Need to Progress From People To Their Knowledge' (http://www.managementexchange.com/barrier/need-progress-people-their-kno...) and this story. Both are on the theme that people muddle reality and a System, powered by reliable energy, is needed to emerge the reality consistently. However, while John’s System – Vanguard method - deals with transactions her concept refers to interactions. As the creator of the System emphasized by Nayantara, I would like to add that there is a bridge between John’s transaction System and her interaction System: the exceptions of John’s System would be dealt with by her System concept.

John Hanley

July 30, 2010 - 7:23pm

Very cool approach but it all starts with listening to your customers. To make his point the author downplays the importance of people but nothing good or bad will happen without them!

Ellen Weber

July 24, 2010 - 8:46am

What I especially like about this keen story is the way leaders held on and broke through the barriers to innovation. Thanks for sharing its delightful success for innovators globally! Interestingly, research now suggests that human brains come equipped with mirror neurons - so that folks emulate what they see around them. While that's sad for the tired traditions that hold innovation back - it's terrific for breakthroughs like you describe here.

Have you considered how your work might help to move resources from places that hold onto broken systems, in ways that promote and foster innovative new approaches such as those listed here?

Mario Veraldo

July 9, 2010 - 8:01pm

Outlining how people get the desire to change is probably the key element in transformation efforts. If we are able to determine how that is transition happens in people's mind - from linear to systemic approach - then the impact will be much bigger.

Mireille Jansma

July 9, 2010 - 4:24pm

Hi Marga,

Did you watch this video? You may like it, although the porte is a bit different from your idea of training minds to mindfulness. http://vimeo.com/10278907

Best, Mireille

Marga Odahowski

July 9, 2010 - 10:52am

I have read a few books on systems thinking and it relates to the work of training the mind for mindfulness- greater awareness, nonjudgemental view and compassion.
Mindfulness skill training allows for the shift of an open awareness and interconnectedness that systems thinkers have.

Howard Clark

July 7, 2010 - 2:21pm

I used to work in the Uk public sector and after I came across John Seddon's work it transformed how I viewed management and work.

Ever since them I have been learning about a radically exciting and proven approach and method that helps organisations study their organisation as a system instead of focusing change upon people (targets, one-to-ones etc). The method that Seddon has pioneered helps organisations to transform the experience of customers and services users sustainably.

He has liberated many organisations from the tyranny of command and control and helped make work a fulfilling experience again.

Howard Clark

July 7, 2010 - 2:15pm

Comments and Questions

David Mason

July 28, 2010 - 1:25pm

Its so easy for me to tell that the approach in this story is a successful one as while reading it I found myself jealous of the good people of Portsmouth. I now want to forward this on to quite a few companies and services of which I am a customer. Thanks for sharing this.

Tim Brooks

July 8, 2010 - 3:59pm

"Hardly profound stuff" says the brave 'John Doe'. Firstly - why? Where's your argument?
Secondly - actually it has a profound effect on the people receiving housing services as well as those delivering them. Service users get a service that works, and makes some sense. This is so good a service many had suggested just it just wasn't possible for a public sector organisation. Those delivering a service are finally doing work that makes sense, makes a difference, makes customers happy, and provides job satisfaction because the ludicrous and insane target based, hierarchical command and control structures are dismantled. And it all costs less to the tax payer!

It is also represents a new philosophical paradigm, which apparently is not visible from where our John Doe stands - which is almost certainly deep in the bowels of the old paradigm with its tacit acceptance of crusty old management ideology, and its blind faith in hierarchical control and command.
Here's a chance for you John Doe, coming blinking into the light - it'll hurt your eyes at first but you'll soon realise you had never really seen the world before. In your cave everything you knew to be real was in fact an illusion, a trick of the light.

So apart from helping those that need most help, liberating those that want to help (to remove the shackles that prevented them being able to help), entirely changing the way we think about management and organisations and reflecting a wider understanding that our organsiations, society, politics, ecology and universe are interconnected systems and systems of systems - this is hardly profound stuff.....if you happen to be profoundly stupid!

James Hill

July 8, 2010 - 1:08pm

I am lucky enough to work with Owen and been on the journey with him. It is true to say that our services and thinking have been transformed in the last four years. As the housing manager for the service there have been many counter intuitive moments and there are elements of our service which continue to challenge colleagues and inspectors alike (imagine for a second having no pre-void inspection and seeing an empty property for the first time with the prospective tenant, imagine a cleaning service with no specification or an out of hours service where you get the same service you would get during office hours). I always thought I was customer focussed but have had the opportunity to use the method and review our rental income system and now truly understand what customer focus really means. This method provides the opportunity to understand the real performance of a system from a customers perspectivce and provides the foundation to transform services by designing them to meet the demands your customers place on your service. The change in thinking is the most challenging but the distinction between this method and other methods is that they change the system but dont grip the thinking or culture of an organisation. With Owens leadership and the application of the method we have achieved more in the last four years than ever before. I couldnt return to my old management practices and fortunately sense a momentum building in government that supports this method in the public sector .... I just hope more leaders and managers use it to unlock the true efficiencies within thier organisations.

Sophia Stravoravdis

July 8, 2010 - 10:21am

"Hardly profound stuff"? I beg to differ. I have
worked in public sector housing for almost 10 years
and was lucky enough to participate in a Vanguard lead
project to improve services for residents. As soon
as we reached "Do" I saw an immediate impact on
residents' lives for the better, less confusion and
more valuable work. The effect on staff was a little stressful at first
because immediate supervisors were not on board
and had not gone on the journey from "Check".
But as a customer services officer on the front line
I felt empowered and able to get things done for sometimes
very vulnerable people in dire need, which the system would
not previously have helped quickly or easily.
Might not seem profound to you, might not look profound on paper,
but the difference in people's lives was huge and the cost in both
time and money fell dramatically
for the organisation.

More to the point the mindset changed. You can't put a price on that.

Frank Wilde

July 8, 2010 - 9:48am

Wish I had known about John Seddon when I was running a Local Authority revenues division then I could have persuaded my managers that what I was thinking was right and I wouldn.t have been called a maverick, out of step with the inefficient way local government was being run.

Keep going John. We are getting there.

Frank Wilde

Paul Buxton

July 8, 2010 - 8:58am

We also have a housing department that has used Vanguard to transform its services. We started after Portsmouth so are a little behind them, but we too have vastly improved services; for example our average time to complete a repair was 40 days and now is 11. We have also saved money at the same time and have staff that are enthusiastic and engaged with the job of making their work better. So yes John, people do pay for this and it is worth it.
Paul Buxton

Sue Glenton

July 8, 2010 - 6:04am

I worked in LA Housing with a deeply incurious maintenance dept, delicate attempts were made to tweak, and were thwarted by those resistant to change, improvement, delivering a better service and having happy customers and staff. Portsmouth City Council deserve acknowledgment for being 'curious' enough to find a better way.

Sam Ritchie

July 8, 2010 - 5:22am

It is often said that the quality of new thinking can be judged by the amount of opposition it receives. So good news for John Seddon that within hours of this entry, a John Doe pops up!