Five steps for big improvements

ORGANISATION LEVEL:

Managers, whatever their level, need to take just five basic steps to make big productivity improvements – click on the link below for outline details

http://www.productivityknowhow.com/?page_id=378

BUT:

1. Corporate plans – If they exist, they’re not seen or understood by most managers

2. Performance measures – Most lack 80% of the measures they need

3. Analysis of potential – Most managers don’t know how to assess their % scope on offer to improve

4. Special improvement projects – Most have not been taught how to manage special improvement projects

5. Continuous improvement – Most in the West ignore the huge benefits possible from taking such action on a daily basis

No wonder national productivity improvement is slow at best, whatever the organisation

 

NATIONAL LEVEL:

The same five steps also apply to the action required of government ministers for they have a significant role to play in productivity improvement

Click on the following link

http://www.productivityknowhow.com/?page_id=1331

The same problems as above arise with each step

Hence, despite well-intended speeches and media headlines about the need to improve productivity and ‘close gaps’, little effective change happens

Apr 12

Beware taking the IT plunge

Professor John Seddon, CEO of Vanguard Consultants (with whom I have no connection, only admiration) has just issued the following wake-up call for business leaders investing in the digital bandwagon

The Big Consultancies (mea culpa – I was once a member of one of them – Ed.) too often peddle unnecessarily complex solutions to business problems, often not fully understanding the problem causes in the first place

For example, Western quality problems in the 80s/ 90s were addressed with TQM (Total Quality Management) which focused on culture change (and produced negligible if not negative results) when its very founders (Crosby, Deming and Juran) had shown  the solution was a process driven by simple statistical controls which never even got a mention

And now it’s complex IT solutions which are being peddled as the panacea, albeit written by back-room techies and purporting to save money and improve overall performances but which end up increasing costs and worsening customer service 

You might ask why intelligent people, both customers and suppliers, should allow such products to persist – perhaps another example of few people liking to admit they got it wrong?

Read on, about what Seddon says is happening on the front-line nowadays

 

I was astonished to receive a report from The Institute for Government telling us how Digital Public Services will save £46bn! Leave aside my frequent criticisms of Universal Credit (‘digital by default’) where I have explained why the service will never work in a digital mode (newsletters passim ad infinitum), except to say: why didn’t the authors have anything to say about why this digital ‘flagship’ is failing? Do they really think, as they imply, that public services are akin to Amazon, Uber and Google?

Unfortunately the public sector has no rudder of profit. So they should listen carefully to what private-sector organisations have discovered by jumping on the bandwagon; how it has driven costs up and had a deleterious impact on customers. As a result these companies have completely changed the way they tackle the design of digital services.

First off: why are we doing this? Again, leave aside the marketing blurb from the Big Consultancies that says ‘everyone is doing it, you’d better catch up’, ‘you don’t want to be a Blockbuster’ and ‘people expect to be able to do everything on their smartphone’. The true answer: because digital channels are cheaper. Well they are if they work. But all too frequently they haven’t worked. The first sign, as ever when any service is ineffective, is an incredible rise in the volume of failure demand – as customers are pushed down the digital channels, more and more call the service centres because the digital service isn’t helping them get what they want. This startling realisation – shockingly big numbers – opens private-sector leader’s minds to the problem.

Unfortunately recognising the problem isn’t the same as understanding how to solve it. Typically people jump to these assumptions: Failure demand is a cost (correct), the types of failure demand should be counted and investigated, in order to assign causes, and, as well, customers’ behaviour needs to be changed. Plausible but wrong. Failure demand is a signal of ineffectiveness; you won’t get far by blaming people or processes. The current rush to digital is not, as is often argued, like getting customers to change their behaviour to using ATMs instead of going into branches. In any event, ATMs worked for customers. Why?

The signal is telling us that the services, whether digital or not, aren’t working, are ineffective. The solution is to redesign the services. When you do that failure demand drops like a stone and you get a massive increase in capacity. Happy days.

As we got to work with leading financial services organisations on this problem we found the first step had to be repairing many newly-created digital services. Why spend millions building a ‘mortgage tracker’ digital app when the focus ought to be designing a mortgage service where the customer would never have cause to get in touch? Only by understanding customer demand can you begin to understand where digital services can work for customers (as ATMs did) and where you’ve created digital services that are institutionalising failure demand or created services that simply will never work with customer demands.

The latter takes me back to Universal Credit. Digital media are useless at dealing with high-variety demands. Yes, this means some of the newly-created digital services have to be abandoned. But easy to do when it comes down to a simple choice: stick with a costly endeavour that isn’t working for your customers and is driving your operating costs up or solve the problem by making the service effective in a non-digital way.

When you get over the repair work you can move on to the question of method: how are these new digital services being designed? Typically teams of designers, software engineers and Big Consultancy suits, costing eye-watering amounts, have been dreaming the services up, taking things the organisation does or could do and developing digital ‘solutions’. Something few people know is that as much as 80% of the coding that gets done never gets used (but you pay for it).

But the bigger problem is that the method is ‘IT first’. We help them adopt a method that puts IT last. Only when you understand demand in customer terms with knowledge about its context, its variety and its predictability can you then set about designing a service that works and then, lastly, you can consider what of this can be digitised. It’s not about changing customers behaviour to make them comply with our ambition to cut costs, it’s about changing the way we serve customers.

Effective services = Happier customers and lower costs.

And that’s the thing – focus on cost and your costs go up, focus on value and you drive costs out.

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