Lean Service Blog

Total Place - integrated public services or more cost cutting?

2009-11-04T10:34:00.003Z

Total Place is a scheme to join-up public services in an area or a city. Trials have been run in Kent and Birmingham.

It may be useful to read the report of the Total Place Roundtable in The Guardian since I will reference some comments from it there.

The sub-title of the article is:

Total Place is a new initiative to examine how cutting out duplication in public service delivery can improve quality and reduce costs. But is this really a 'magic bullet' solution?

Well nothing is ever a silver bullet. As W. Edwards Deming said, "There is no such thing as instant pudding." But the general idea to join up services to remove duplication and concentrate more on prevention than cure, is a a good one that most people would agree with. There are some encouraging comments, such as:

Hospitals have been trialling specific units for patients with alcohol related problems, where they can be given preventive treatment, with co-ordinated interventions from across a range of agencies.

Figures from the police reveal that a single murder costs around £1.1m in services, from investigation to the legal and social services work, so the scale of preventive cost savings – especially in reducing gang violence, for example – is parallel with the moral gains.

"The focus needs to be on changing the culture and behaviour within public services, rather than fixating on financial outcomes."

These are encouraging but one comment from one of the participants worries me.

The table first heard an account of the Birmingham pilot, where £7.5bn of public sector cash had been mapped out. "The idea was to follow the money, and see where it led us," a participant explained. "Families are facing a range of issues, some not interconnected, but the challenge was to dismiss short-term thinking to analyse the £7.5bn coming into Birmingham every year."

If you follow the money, then you will come to the wrong answer. Budgets and costs are an output. First you should seek to understand the demand on the system and if you do that with the whole system in mind, for example how mental health services, social services and hospitals can work together on chronic alcohol problems, then that is all the better. But we shouldn't be starting with the money. That is using the tail to wag the dog.

Efficiencies in the these type of systems can be made, but we must ask,

What is our purpose?
What is of value to the public?
How can understand demand for that?
How can we design service to meet the demand, designed for the value and removing the waste?

If you do this properly you design public services that the public like and as an output you save money. You also get improvements in results that far outstrip anything that anyone would have dared to set as a target.

One more little niggle from the article:

Kent, a two-tier authority with a £10bn budget, now has a single phone number and single web portal for all local government services.

It goes on to say that "getting even this far was an uphill struggle". Well instituting a call centre isn't providing value but it is certainly following the money. Trouble is the failure demand that will ensue will cause costs to rise, not to fall. Having one place to call does not mean that the services delivered will be joined-up, in fact quite the reverse. Whereas, previously you might have had the call answered by someone who did the work in the department you called, now you get a call centre agent who is, by construction, removed from the work and only connected to it by workflow systems.

I wish the Total Place idea well. I just hope the practice would match the intent.

Best,

Rob

Book review: 'Instruction to Deliver' by Michael Barber

2009-10-27T13:51:00.002Z

I came across this book while browsing the politics section of Waterstones on Goodge Street. It immediately struck me as something interesting to read, a description of the delivery methods of the Blair government from 2001-2005 by the man who set-up and ran the Prime Minster's Delivery Unit. Now note that I fundamentally disagree with centralised targets and top-down imposed processes that this framework employed, but I was still curious to see how the other side tried to do it.

Firstly, overall it was quite a good read. Easy to get along with, clear and nicely paced. It got into detail often enough to make it revealing but it never got bogged down. The style was chatty but serious about the subject and the people involved.

Basically, the Delivery Unit was a programme office for the targets that government focused on. They were in Transport, Health, the Home Office and Education. The Unit reported directly to Tony Blair. They were there to provide method for collecting and reporting data, monitoring progress towards the targets and building capacity in the departments.

The fact that the use of central targets is wrong for me didn't take away from the basic project management messages that anyone trying to get things done need to reiterate on a regular basis.

Focus
Plan
Have method
Monitor
Communicate

The whole myth of "deliverology" that the Delivery Unit spawned, seems to me reading this book, simply effective project management.

Additionally, the parts that deal with the relationships with and between ministers, the prime minister, civil servants and the Unit staff itself are very interesting. There is a description of promises made to the Permanent Secretaries of each department. It was along the lines that we are here to help, we want to pass along the capacity to achieve and in so doing put ourselves out of work and that we are in it together.

I would recommend this book to anyone trying to enact big projects anywhere as a learning tool. I would, of course, warn readers away from the centralised targets and inspection regime they employed, but there is definitely something to learn here. It is just a shame that with the strong project skills described but with better method (e.g. understanding of systems, psychology and motivation) so much more could have been achieved in public services in the UK by now.

Best,

Rob

Worse and worse

2009-10-15T10:53:00.002+01:00

An article on the 'This is Cheshire' web site entitled "VOTE: Is hospital admitting A&E patients so it doesn't breach targets?" is a perfect example of the wider problems that come from targets and incentives based on activity.

Now I don't know the truth of the accusations made by NHS Warrington but I do know that targets do cause people to cheat. NHS Warrington say,

“There has been an increase in admissions and the number of attendances at A&E is staying the same. [...] There has been a 24 per cent increase in admissions this month, of whom the majority then spent less than 24 hours in hospital. [...] It seems driven by the fact we have to deliver four hour targets.”

That wouldn't surprise me in the slightest. There are often reports of people gaming their systems to hit targets to the detriment of the service as a whole.

But also,

The hospital was also accused of getting ‘more effective at coding’ so it can receive more money per procedure.

“In a matter of four months there has been almost a 10 per cent increase in the amount that NHS Warrington paid for hospital treatment,” said NHS Warrington chief executive Andrew Burgess.

Why would they want to get more effective at coding? Surely more effective coding is a good thing. We all want better coding. Don't we?

What we really want is a system designed to meet its purpose. In this case 'to provide the best care to every patient' might be a reasonable purpose.

But the problems with targets and payments by activity (which is what the coding argument is all about) are just the start. With this article we have a dysfunctional relationship between the PCT and a hospital trust. Are they very likely to work together to provide excellent services to their public? Are they likely to work together to study demand? Are they likely to make any improvements at all while they argue in public like this?

Worse, the public bickering is just eroding what confidence the local people have in the service.

So the problems of targets and wrong incentives don't just stop at their immediate effects, they have a profound knock on effect of organisational harmony and the ability to simply get on well enough to work together. This is a vicious circle.

But the other way can be virtuous. Use measures related to purpose, drop all the targets and forget about costs. Then get together with your partners and see how to improve things. Service will improve, costs will fall and managers and staff will enjoy doing a better job, morale will go up and everyone wins.

In short, the environment (the system) is the major cause of behaviour. Change the system and behaviour improves.

Best,

Rob

Now on Twitter

2009-09-29T12:16:00.004+01:00

For those of my readers who like that sort of thing, Worth Solutions has a Twitter account.

You follow us at http://twitter.com/worthsolutions

We will use Twitter to tell you what we are up to, give pointers to interesting news stories, little Lean Service tips and reminders and links back to this blog.

See you there.

Best,

Rob

I hope they don't fail

2009-09-03T10:03:00.004+01:00

thisisleicestershire.co.uk reports that the City Council got a bad report from the Audit Commission and if you believe the article fully it does sound like their is room for improvement.

But to tease out some of the targets for the next 18 months in the article:

Cut phone waiting times from 9 minutes to 1 minute
Average time to complete a claim to fall from 22.5 to 16 days
Stop over paying people to the tune of £6m over four years

For the sake of the people of Leicester I wish them the best of luck, because they are going to need it. I am pessimistic because of the quote right at the end of the article from council leader Ross Wilmot, "This set of targets will put us on the path to excellent performance." But also because "The money will be used to bring in more staff and to open phone lines and buildings for longer, to cut waiting times and speed up claims."

Having targets and getting more staff isn't going to help. I would bet a lot of money that the service has massive failure demand. They will have people calling to chase and complain about claims all day. That is why the phone lines are so jammed. If they would study their demand and have a purpose to pay people the right money as quickly as possible, they could then design their service against that demand and I bet they could get rid of most of the calls, visits and letters that they are currently getting, drop the processing times way below the targeted 16 days, to more like 2 or 3 days, and reduce the mistakes in payment to almost zero. And they could do it in a lot less than 18 months.

Thing is they seem to be stuck in the old way of thinking. "We have too much work so we need to spend more money to get more people and we will set targets and that will get the people to do what we want them to do."

As Deming said, "There is a better way."

Best,

Rob

Poor me

2009-08-20T11:55:00.002+01:00

I had a minor accident the other day. I was washing up a glass and I was forcing my hand down into the bottom to get it properly clean, the glass broke and I cut my little finger. It cut, what seemed to me, a big flap on my finger. There was a bit of blood and I stuck a dressing from my first aid kit on it. I resolved to go to Accident and Emergency to get them to check that there was no glass in the cut.

I arrived at the local A&E and had to queue for reception where I had to give my name and then fill in a basic form with name, address, my GP etc. That took five minutes. I then sat for about twenty minutes until called by a triage nurse who asked me what happened, clarified some things on my details. That took about three minutes. He then asked me to go back and wait. Which I did. For about fifty minutes. Then I was called through and was seen by a nurse practitioner who dressed the cut and gave me a tetanus shot. This took about five minutes. All done. No glass in the cut. Off you go.

Not too bad I thought. I then thought back on the steps and wondered if for my personal journey it might be better to have the nurse practitioner and the triage nurse doing the same job. So that instead of the triage nurse assessing and sending people to sit down again they could dress my wound straight away. And if you took the two people who were doing their respective triage and practitioner jobs and had them do both, lots of people with minor (and it was very minor!) injuries could be out much quicker.

Now we have to be careful here. I am a sample of one and before you redesign a flow you need to take into account the total demand on a system. The story above is one incident in an Accident and Emergency department, the system as a whole would need to be examined.

Interesting though...

The other interesting problem is the queuing to see the receptionist. Would we want our new triage/practitioner nurse to do that job as well? I don't know. But the clever part is that if we understood the process better and worked to understand the type and frequency of demand, the people who worked there including the receptionist and the nurses would be able to tell me better than I can tell you whether that was a good idea or not. The best thing a consultant or manager can do is give people the skills to investigate and understand for themselves how their work works so they can make improvements on their own system. So I am not worried that I don't know, because we would together.

Also while we are adding complexity. Should we just look at A&E in isolation? What about admission to wards? What about ambulance services? How about NHS Direct who tell people to go to A&E? And not forgetting GP services. They all fit together into a wider system of which an A&E department is but a small part.

The finger is healing nicely by the way. I wouldn't want you all to worry.

Best,

Rob

How would you like that?

2009-07-02T15:09:00.001+01:00

Whenever you are assessing a service or task you need to bear in mind the concept of an operational definition. It is the operational definition that spells out what someone means when they ask for something or for something to be done. By way of example imagine I am standing by a table and I ask you to clean it. Before you grab a cloth you need to know the operational definition of what I am asking. Do I mean clean enough to eat dinner at? Clean enough to write a letter on? Clean enough to prepare food on? Clean enough to perform open-heart surgery on? Or even, clean enough to manufacture silicon chips on? Without an operational definition we can't plan how to do something neither can we judge how well we have done it.

We can apply this to our organisations by asking what is the operational definition of the service we provide. Do we even have one? How do we know how to go about planning to provide the service and how to we judge how well it was provided? Note that it is important to write the operational definition from the point of view of the customer or user. Internally generated operational definitions only lead to confusion, bad service and frustration. Customer oriented operational definitions help toward clarity of purpose, good service and satisfaction for customers and staff alike.

Best,

Rob

Start With a Fanfare?

2009-05-14T11:52:00.002+01:00

A fairly accepted way to start a change programme is to announce it, or further to parade it with a big fanfare. "We are starting a new programme!!" Townhalls are held, emails sent and managers and staff briefed. Sometimes mugs and T-shirts are printed too. But I am on the cusp of wondering if that is all a good idea. I read Philip Crosby's book, "Quality is Free" a few years ago. I can remember two things from it. First, that doing things well is cheaper than doing things badly, and I agree with this. The second is that you must have a big unveiling of your new way. But the thing that struck me as odd was that he said - and I hope I remember it right - was that if it doesn't quite go as expected, the thing to do was to have another fanfare and gee everyone up again and keep doing that until it works. But if something is not working why would you keep trying it over and over?

The thing is anything that you can "start" you can "stop". So if you announce a new programme people can further down the line, decide that they don't want to do that any more and revert. So I am wondering if it might not be better not to announce a new programme. Might it be better to just start doing something different without a big to-do? How might that look?

It would have to start with the top. It would come from a Cheif Executive or equivalent. They would start to ask their staff to look at some different things, get some different data, think about things in a different way. They wouldn't be saying that Cheify has a new fad, instead they would simply be asked to go and try a couple of things. These things would be a priority, certainly and there would be no secret about what was happening, no subterfuge. Put simply the top officers would be given 'things to do' to help them see that there might be a better way. Thus, because there is no fanfare, there is nothing for staff to push back on. At first they might not see that the new things they are looking at are ground breaking, but the subtlty of the design of the tasks set are where this approach would live or die.

To clarify, I have not tried this approach yet, but I would look to do so. Instinctually I feel that if you are trying to change the way people think and thus work and do that in a way that sticks, you need to introduce it in a natural way, as part of the work. Not artificially in a big kick-off announcement.

Good luck with your programmes and I will try and report back if I can persuade someone to try this with me.

Best,

Rob

Types of help

2009-03-18T18:15:00.002Z

I sometimes try to think of the levels of help I give to a client - this equally applies to management assisting their staff. For the sake of a simple example, let us think of helping a child to tie their shoelace.

Level 1 - Do it for them.

Simply tie the child's shoelace. They learn that it can be done, but not how to do it.

Level 2 - Show them how to do it.

Tie the shoelace but go slow and describe how to do it. They learn how to do it but by demonstration only.

Level 3 - Teach them how to do it.

Show them, describe it, let them try, correct them when they err until they can do it for themselves. They learn how to do it by demonstration, trial and error and being corrected.

Level 4 - Teach them how to solve similar problems.

Don't teach them to tie the lace but give them skills to approach those type of problems. This could involve analysis (a tied lace has two loops, how might they get there?) and reasoning. They gain skill to enable them to solve similar problems in the future (how to tie a bow tie - which I still can't do right!).

Level 5 - Show them how to apply the above to others.

This is showing them how to be like you. The most powerful level since you have moved on extra level away in that they are passing on the skills that you practised on them.

The point is not that you should always strive to be at Level 5, more that you should know when to use the level that is most appropriate to the situation. Usually you will start at the lower levels and work your way up but it is not a linear progression.

From management point of view (or mine when I work with a client) if we don't get to level 5 at all, then the staff haven't been taught how to pass knowledge on and so any intervention will necessarily wither and die eventually.

Best,

Rob

Unsold cars

2009-01-22T13:46:00.002Z

If anyone thinks that the world's car manufacturers have been adopting lean in the last few years they can think again. The Guardian has some photos of car storage sites. Number six is the best.

The aim of the Toyota Production System is to 'produce cars at the rate of demand'. This means 'get an order, build a car, deliver it, get your money'.

A lean system should pull from the order. Dealers should have one or two examples of each model which are used for test drives and showing off features. When the order is made that should be the trigger to build the car, which should be delivered within a week.

There should be no question of manufacturers having fields full of cars or ever deciding to reduce or increase production. If there are fewer orders then there will be fewer cars made. The system flexes automatically.

In the seven wastes that lean people talk about - they are not applicable to service(!) - there is the waste of over-production. Taiichi Ohno thought that this was the worst waste of them all because it was the cause of many of the other wastes. What he would think of these pictures... (Interesting that there are some Toyota pictures in there. It doesn't say if they are already sold or not.)

Service is usually a bit different - you can't have fields full of mortgage applications pre-assessed before the customers come along - but you can still get bottle necks. You can still design a system that does not serve at the rate of demand. The "inventory" will more typically occur just after the order. There will have mortgage applications submitted by customers that are waiting to be looked at instead.

So, 'serve at the rate of demand' is still the game. Thus you must still have a fast, flexible system, that absorbs variety. More important you must understand your demand, for it is against that information that you design your system.

Best,

Rob

Who are the NHS really cheating?

2009-01-16T14:42:00.002Z

There was a article this week that made me laugh out loud. You can read it in full here. But I will quote from two paragraphs near the end.

The survey found more people than in previous years believed they were listened to by doctors and nurses. But waiting times were longer. The proportion saying they stayed in the emergency department for no more than four hours fell from 77% in 2004 to 73% in 2008.
This might appear to show widespread flouting of the government's target for the waiting time in A&E to be no more than four hours for 98% of patients. But the [Healthcare Commission] said trusts often moved patients from A&E into a nearby "admissions unit". Patients might not be able to tell the difference in location, but time spent in an admissions unit did not count towards the four-hour target.

There is so much wrong with this situation. Error upon, incorrect assumption, upon invalid method.

Let's start at the beginning. Firstly, the practice of using surveys to find out of your service is performing well is deeply suspect. I read a report to say that customers who report that they are satisfied on surveys are just as, if not more likely to defect to another company than those who said they were not satisfied. Why? Well because more people want the survey to be over as quickly as possible and if they had bad service and were thinking of leaving why would they want to give the company more time than they needed to. Obviously with A&E you don't get too much choice about using someone else. But the principle of using surveys is still flawed.

Secondly, the article quotes a statistic that waits more than fours hours fell from 77% in 2004 to 73% in 2008. Where is the understanding of variation? Maybe both those figures are within the predictable range and nothing has changed. The four per cent difference might simply be from common cause variation. We can't know from the figures as presented.

Thirdly, the fact that they have a target of no wait being longer than four hours will be causing problems and in fact longer waits. We know that it is causing them to cheat since the commission itself explained that hospitals more people from A&E to "admission units" to avoid going over the four hours. And the "patients might not be able to tell the difference". Of course they can't. Waiting in one room is the same as waiting in another room and even more annoying if you have to get moved half way through. So even though they should not have the target in the first place, the Healthcare Commission is condoning the cheating that the target causes in order to meet the target. And the big laugh is they are still not meeting the target. We could speculate that the resources need to have an "admissions unit" and move people to it, might be better used in the A and E department.

And if you read the rest of the article you will see that 9% of people who asked for pain relief never got it.

Ouch!

Best,

Rob

Improvement is a Puzzle

2009-01-14T16:49:00.002Z

I was listening to a podcast of a talk given by Russell Ackoff today and he talked about the difference between a problem and a puzzle. It is not about difficulty or anything obvious like that. The difference, Ackoff said, was that unlike a problem, there is something in a puzzle that means you have to change an assumption you have about it before you can solve it. (If you take this literally then they should be called "jigsaw problems" instead!) We've all done those puzzles where in order to solve them you have to change your thinking.

Which made me think that redesigning a system is a puzzle, not a problem because you have to change more than one assumption about how your organisation works.

The other interesting thing he talked about was the difference between analysis and synthesis. Analysis is where you take something that needs improving, fixing or understanding and you take it apart, examine (and perhaps improve) the parts then put it back together. With synthesis you start by understanding the bigger system that the system you are studying sits in.

He said that there are always important things about a system that you can only understand by synthesis and will never understand by analysis. For example, why do cars drive on the left in the UK? You may get an answer by looking at the history of transportation and the transportation system in general, but you will never get an answer by taking a car to pieces.

Similarly, you can juggle the internal processes of an organisation as much as you like, but if the barrier to improvement is in customer demand or in externally imposed targets or regulation, you need to look at the wider system and not just inside the organisation to understand these things.

Best,

Rob

What's In a Name?

2009-01-08T09:00:00.001Z

That which we call a rose
By any other name would smell as sweet;

Shakespeare, Romeo and Juliet

And indeed changing the name of the rose would not change the affect it would have on our olfactory sense, but it may affect our attitudes towards it. Would it be as romantic to buy a dozen red Snozwangers for a loved one on Valentine's Day this year, even if the aroma was as pleasant as it ever was?

I just wonder because I heard recently that one of the big telecommunications companies in the UK has been renaming its entity model. That it is what the things are called in its enterprise wide IT systems. The thing that used to be called a "customer" is now called a "contract partner". Now I will admit that I do have a contract with my phone company, but I wold not call myself a partner. For starters I don't get a share of the profits. But the more worrying thing is how this change might shifts attitudes to customers.

You might argue that this is a very slight argument and you may be right. But just stop to think how we might treat these things. A customer: is served, valued and is "always right". A "contract partner" is something: to negotiate with, to sue for breach of agreement, to work with according to SLAs and service standards.

How would you rather be thought of by this company? And more importantly, when that company comes to discuss issues of purpose and value as defined by their customers, will the fact that they think of them as "contract partners" distort the outcome?

So thank you good ~~reader~~ textual informational absorber, see you next time.

Best,

Rob

Lean London NHS Seminar - 26th Mar 2009

2009-01-07T14:32:00.003Z

There is a new Lean London event happening on the 26th March 2009. It is aimed at those in the NHS who are implementing or thinking of implementing Lean there. There will be case studies, some theory and a chance to meet others who are also interested.

Find out more and register to attend at http://www.leanlondon.org.uk/

Please tell anyone you know who might be interested.

See you there.

Rob

Process Blindness

2008-11-06T10:17:00.002Z

I went to see a client a little while ago and followed some work while I was there. The work was basically to receive a paper form from a client and enter the data into a database that made it available on the web site. The wrinkle was that the main office received the forms and logged the receipt and then batched and packaged them to go off site for the the data capture.

I would just like to bring to your attention one little part of the process.

When they had accumulated a pile of like forms together, they would take that pile from a big table and bring them over to their desk where they would take twenty forms at a time and read the bar codes from the forms into a spreadsheet. They would press a button on the spreadsheet and it would print two top sheets. They would write a batch number on both the top sheets. One sheet would be put on top of the twenty forms, secured by an elastic band, ready to go into a crate and thence off site. The second sheet would be scanned and then filed. The scan of the second sheet was kept in their electronic file system and could be searched if they needed to find out which batch a particular form was in.

Phew. Was that paragraph as boring for you to read as it was for me to write? Imagine if that was your work every day? Now imagine if you were a customer who came to the office to watch how the data you neatly inscribed on the form got onto the web site and instead you saw that?

The value for the customer was to see the data on the form, up on the web site. If you can manage it, re-read that paragraph and see if you can find any step in there that contributes to that value.

No? That's because there is no value to find.

They didn't see the problem and the difficulty they had was not a lack of intelligence but process blindness. They had been doing it that way so long, they could no longer see another way to do it. This was where having defined value to the customer was so valuable. When customer value is your only criteria for judging a process then the scales fairly spring from your eyes and you see your process afresh.

They don't get it

2008-09-22T21:11:00.002+01:00

There is an article in the Guardian newspaper which discusses Lean and once again they don't get it. I quote:

Radnor recalls a housing director who was approached by two employees who claimed they needed another team member because they were unable to manage their current workload of dealing with complaints about unfinished repairs.
After examining their current processes, a barrier to flow was identified. It was found complaints couldn’t be logged properly because not all the required data was in place and that the team spent the majority of its time going back to retrieve missing information. It was suggested the form used to log complaints was redesigned.

Wrong. If they were unable to manage the workflow of dealing with complaints, then management need to change the system that produces the complaints to produce fewer complaints, with the goal (not the target, the goal) of producing none. That is Lean.

We must not be deluded and mistake making current processes more efficient with changing the system as a whole to more efficiently serve the customer. The difference in wording is slight, but the outlook is very different and the results wildly so.

It does say a little later in the article:

While the customer is very much the focus of Lean [...]

So maybe they do get it, I don't know, but they must have loads of examples to choose from and they picked one that shows that they probably don't.

It's the System, Stupid

2008-06-17T10:46:00.003+01:00

On the front of today's Guardian newspaper is an article about the Bank of England, inflation and interest rates. To partially quote it:

The government is on inflation alert amid fears that dearer petrol and food will herald the start of a year of bad news on the cost of living and limit the Bank of England's ability to cut interest rates.
...
An explanatory letter from the governor to the chancellor is required once a quarter for as long as inflation is more than a percentage point higher or lower than its target. Speculation has mounted in recent days that today's figure will edge up from 3%.

This to me is a classic example of not thinking about a system as a whole.

One of the first things that the new Labour government did after being elected in 1997 was to make the Bank of England independent and give it a target to keep inflation below 2 per cent. The mechanism to do that was to change the Bank of England base rate of interest.

This is not an article about economics, I am not an economist, but even then that struck me as simplistic. The Bank must keep inflation at 2 pc and the only lever they can pull is interest rates. What about balance of trade, house prices, world commodities, credit and financial markets. They can't change the tax system, print money or borrow.

The UK economy is buffeted externally by world events, international speculators, trade relations and a myriad other things. Domestically 60 million people make economic decisions every day. Not to mention government policy about tax and borrowing.

So does anyone really think that the Bank of England can control inflation by changing interest rates? I don't.

I think the government should take back the setting of interest rates. The argument that you bring back political influence is a slim one when they still have control of tax, money supply and how the budget is spent. They should look at the system as a whole and do their best with it. Actually, an almost impossible job, I think.

But thinking that the "interest rate" lever is directly connected to the "inflation" read-out is plain silly.

The lesson for other organisations (which have to deal with much simpler systems than the UK in a world economy) is not to make the same mistake of attaching one single input to a single output. Even simple systems do not usually work like that. You must conduct controlled experiments and measure the outputs and look out for unintended consequences. And remember always measure against the purpose of the system (to serve the customer, in the case of a company).

Also, what is this stupidity of sending of a letter to explain what has happened? That will fix it!

Good one

2008-06-03T12:17:00.002+01:00

I normally will be on here pontificating about how to do it better. But I must give praise to the DVLA (Driver and Vehicle Licensing Agency in the UK).

I filled in the online form to change my address on my driving licence, sent the old one back on Thursday 29th May and received the replacement on Monday 2nd June.

I have to say I was very impressed. I had expected that it would be three weeks at least. And you know how they are... Well in fact they were not like that at all, they vastly exceeded my expectations.

Well done the DVLA!

I wonder how they did it...

Best Service Is No Service - book review

2008-05-19T10:00:00.001+01:00

I have recently finished a very interesting book called "The Best Service Is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs" by Bill Price and David Jaffe.

The premise is in the title. Basically they are saying that the way to please customers is to give them what they want right first time so they never have to call the call centre and access the Service Department. They are also very keen on Self-Service. They want companies to provide as much of their offering via the web or IVR (Interactive Voice Response) systems. The book has lots of examples of good and bad cases.

The case that made me laugh was the bank who thought that higher value customers should be given a more personal service. They provided an automated telephone system for lower rated customers to find out their balance but the high value customers were recognised and routed to a call centre agent every time. Obviously people with a lot of money don't want to do thinks quickly and easily they would rather have to talk to someone every time!

The parts about having a system that doesn't generate failure demand I agreed with wholeheartedly, but the over emphasis on self service was a bit strong. They tried to balance it out to say that call centre agents should be able to teach callers how to use the web or phone systems and that you shouldn't have channel wars where the web team and the call centre team try to out do each other. They also said you should make your company easier to contact at the same time as putting more functions onto self service.

Personally I like self service and as long as it is backed up by reliable internal processes such that things go right and I don't have to call a company to get things fixed all the time, then it is a good thing. I just wouldn't want anyone to read this book and then throw everything up on their web site without fixing the broken processes first.

Two more things, they love Amazon. And there is also a weird bit where they draw a Pareto chart for the amount of failure demand for each type (they call failure demand "dumb contacts") then they suggest attaching the cost of resolution. So it ends up that the call type that is 18th in the list for number of calls is the one to tackle first because the cost x quantity calculation is greater for that type of call. I would always start with the problem that is causing the most problem for the customers. And to be fair in the rest of the book they are very customer focused, just in this little section do the authors have their head turned by internal cost saving.

All in all, worth a read for some good ideas, but keep you wits about you and analyse for yourself what it being said.

Best,

Rob

The Customer Sets the Ideal Value

2008-05-12T11:45:00.003+01:00

When we consider customer value, we should be aware that this can be quite a subtle concept and that it can vary for the same customer at different times.

The customer sets the ideal value.

We should be familiar with this. If the customer wants it fast, then get it to him as fast as possible. If the customer wants it cheap then do it. The internal workings of a company mean nothing to the customer. They really don't care about targets for Average Handle Time for calls in a call centre or utilisation of servers or the cost of desk space. They just want the service or product they asked for at the right time and price.

But we should wait a moment before throwing our processes and our system on their heads to give the customer what they want. Ideal value is a changeable thing even for the same customer.

When doing a bit of DIY, trying to level a floor in my flat, I sawed through a central heating pipe. What was my ideal value for the service from the plumber? GET HERE NOW! I have my finger on the pipe and the water is going through the ceiling below.

Last month I phoned the same plumber to get my boiler serviced. Ideal value? Convenience of the appointment. I am home Tuesday, but not Wednesday and could do Thursday morning.

Most of the times I buy a book from Amazon I like the free delivery option. I don't care that it takes a few more days to get here. It is a book. What is the rush? Ideal value? Low cost of shipping.

But the other day I had to buy a birthday present at very short notice. (I didn't forget, I just couldn't think of anything until the last minute!) So I ordered from Amazon and was happy to pay the extra for the next day guaranteed delivery. Ideal value? Don't look like a chump with no birthday present to give.

So we need to revise our statement above and say:

The customer sets the ideal value at the time of request.

This is a reminder that your system needs to be able to absorb variety and standardised work will interfere with that.

Best,

Rob

Right is Cheaper

2007-05-17T17:43:00.000+01:00

Getting it right is cheaper than getting it wrong.

On the first pass they both cost the same. Send out a product to the correct address costs the same as sending it to the wrong address.

It is the rework that adds the cost. The customer calls asking after their product (cost to take that call), you have to verify the address (cost of investigation) you then have to order another product (cost of replacement) and send it (repeat of postage costs). Plus the customer thinks you are rubbish (reputational cost).

So if anyone tells you that higher quality is more expensive ask them to correct themselves and count the calories they burn as they do so.

Best,

Rob

Small start

2006-10-18T14:18:00.000+01:00

In conversations with clients, potential and actual, other consultants and various people who are interested, they always want to know how to get started. Some advocate a top down approach and some start small and spread, some like to hit everywhere at once with a organisational training programme and some talk a lot and never really get going. These are all valid (except the last perhaps!!). And different approaches suit different organisations in different situations.

One way to get going is to pick a small area and do a little project.

Some start with 5S (where you sort, straighten, shine, standardise and sustain) basically throw out the rubbish and clutter, tidy up, clean everything, reorganise what is left to suit the task, make sure everyone knows how the work station works and ensure that it stays tidy. 5S is good, but you can do better. It provides a visual indication that something has been done and in hospitals, factories it can be quite dramatic. But in service work places it can be difficult to know exactly what to do.

Some make a cell. Not to keep the boss in, but a "mortgage application cell" or "trade input cell". They bring together all the people that need to do a particular, currently disparate task and put them all together in the same place. This can be effective. But sometimes you are simple compressing a bad process.

I would start with demand. How does work arrive? How often? How much? How much does it vary? Is it value demand or failure demand? This analysis can be a smallish project (compared to the work that it reveals) but it is cruicial to find out how work comes to you before you try to redesign how it is done. For example what if you found out that 60% of your work was dealing with complaints. And that 90% of those complaints could be removed easily? That would be a very good start. Now imagine if you had not done that and instead tried to improve the complaints handling process. Waste of time.

So start small if you can't start big (I will write about that soon), but start at the beginning. Understand the work coming in. Understand demand.

Who Do You Think You Are?

2006-10-05T15:37:00.000+01:00

So you have read the blogs, scoured the web sites, devoured the books and listened to peers at conferences and you want to have a go at Lean. Why not? Everyone is at it. Even the NHS is giving it a go.

But how exactly do you start? Your conviction and enthusiasm is about to come steaming out your ears - or maybe you kinda like the sound of it and want to test it a little before you roll it out to the whole enterprise.

Okay, one way to start would be to get on the phone to someone like me, a Lean consultant, and they will use their years of experience to tell you what is right for you. But I am going to assume that my phone will not start ringing off the hook right after I upload this, because you, rightly, want to test the water before diving in.

First you need to know who you are. Not in a navel gazing, fluffy, zen kind of way, but in a practical sense. Who are you in your organisation? Are you the CEO? A board member? A director of a division? A middle or line manager? A technical expert (this could be a doctor or any specialised worker, not necessarily a techie type)? Or are you on the shop floor doing the real work of the business?

Also who are you in terms of influence? Have you started off similar programmes before? Were they successful? If you are not the CEO, can you get support from people above you? Are you the influencing, persuasive type? Do you have a network to draw support from?

I ask these questions because these are the questions that I ask my "initiators", the individuals that I go to see. And sometimes it comes about that the people who bring me in have just enough influence to get me in to see someone else but not enough to carry through the programme. But they are happy to get the ball rolling.

So, how far can you push a change to Lean? Do you need to gather some support before you try anything?

Ponder this, and next time I will give a few ways, from small to large, that Lean can get started in an organisation.

Whoever and wherever you are you can get going, but some ways of starting are more appropriate depending on your current situation.

The Lake and the Rocks

2006-06-28T11:00:00.000+01:00

One of the metaphors that they use in Toyota is called the "Lake and the Rocks". Is goes like this.

The lake is the work in progress (WIP). That could be inventory in manufacturing, it could be partially processed mortgages or patients waiting on trolleys in corridors waiting to be treated or admitted. Anything that represents a partially completed job.

The rocks are the problems that slow the work down or cause errors leading to unsatisfactory work.

The main idea of Lean is to make value flow to the customer as fast as possible. One thing you have to do to make value flow faster, is to remove WIP from the work stream. If you want cars to go faster on a motorway it helps to have fewer cars.

So the lake is the WIP and the rocks are the problems. The metaphor says that as you reduce the the water the rocks will be exposed. So as you make work flow by getting the excess WIP out of the system you will come across problems that will hamper further improvements.

So work on the problems and you can continue the improvement.

The trouble is there are always more rocks. That is why Lean is something that an organisation "is". Not something it does and then stops.

Eliminate Waste? Prevent Waste?

2006-06-22T13:21:00.000+01:00

In a conversation with a colleague an intriguing thought came up. Is Lean about eliminating waste or about creating a system that prevents waste in the first place? I think that is the difference between continuous improvement (kaizen) and step-change improvement (kaikaku). Kaizen tries to reduce the waste in the current system. Kaikaku creates a new system with no waste built in.

In the end you need both. Too many trundle on with kaizen and never make the step-changes they need to. Similarly, many make big changes and then sit on their laurels for years wondering why the world is passing them by.