I hear a recurring mantra from conventional operations management within relational service organisations. I’ve been hearing it for years.
That mantra is the (apparent) necessity for ‘consistency across the front line’.
It often starts with decrying that “we’ve got 1,0001 [front line workers] and 1,000 ways of doing things. We can’t have that, we need consistency!”
So, to examine this presupposition, I’ve imagined a conversation between a senior operations person…and a coach:
…nor in your (leading1) measures of success.
Short post time…
Context: I regularly participate in reflective conversations with people. I often ask them to ponder the question “what is the purpose of your organisation (or part thereof)?” and I’m struck by how often the response includes something about “our reputation”2 (as in gaining, bolstering, or protecting it).
And so, to repeat the title of this post, your reputation has absolutely NO place in a purpose statement3, nor any system of measurement against this.
Here’s my reasoning…
A short ‘Friday post’:
A lot is talked, and written, about ‘Purpose’1.
If a group of humans decide to organise and spend time and resources to achieve [something], then – if they genuinely want this – they ought to define the ‘what’ and ‘why’ so that the network of actions and interactions have a chance of producing the desired emergent properties. A clear purpose (ref. intent).
“Without an aim, there is no system…the aim must be clear to everyone in the system.” [Deming]
However, just because some powerful stakeholder(s) have set out and communicated a purpose statement, this doesn’t make it so (despite the posters on the wall).
I regularly hear these title words around me – or words to that effect – and, depending on my mood, this makes me smile…or groan.
They are the recurring ‘message’ sung out from many senior figures in organisations and then ‘cascaded down’ …and then informally kicked ‘around and around’.
And my main reflection on hearing it?
“As if we don’t want to!!!!”
A little parable springs to mind1 which I’ll set out as follows: Continue reading
I’ve noticed that there’s a lot of people around me talking about ‘playbooks’…and this makes me uncomfortable.
This post is me thinking about why this might be.
What is a playbook?
Looking up the definition (Dictionary.com) we get three uses:
The original use (way back in the Elizabethan 1500s) is “the script of a play, used by the actors as an acting text”.
Then we get the sporting usage (ref. American football from 1940s): “a notebook containing descriptions of all the plays and strategies used by a team, often accompanied by diagrams, issued to players for them to study and memorise…”
And finally, we get the more general sense of it being a stock of usual tactics or methods – to solve a particular problem in a particular way.
What we can see from each of these three uses is the fundamental meaning that it is about something being defined up-front (usually by some director or coach), rote-learned1 (by the actors or players), and then ‘delivered’ (regurgitated?) on instruction.
I can almost picture the Director on set shouting “aaand…action!!” Continue reading
I’ve been writing stuff about performance measurement on and off for a while now.
I’ve often been struck by the lack of clarity and consistency regarding the terms used in conversations and I’ve wanted to ‘do something about that’.
So…I started to write something down – for myself, and for those that I’ve been working with.
And this blog is a useful spot to ‘place’ the result so that those people (and any others that are interested) can easily find and make use of it.
So, please find attached:
Measurement of Performance – Education Document Version 1.1
That’s a shit name…but I haven’t thought of anything better…yet.
Footnote:
1. I’m already working on a Version 2.0 because there’s a specific section that I want to add…but it will require a good bit of thought to write.
2. You are very welcome to contact me with any observations you have on the document but, as per everything ‘blogging’ (i.e. the sharing of partially formed thought) please be constructive, as opposed to troll-like 🙂
3. This guide sits alongside (i.e. compliments) my earlier one: ‘Control charts: A ‘how to’ guide
4. I have added this guide to a ‘How to guides’ tab at the top of the blog so as to make it (and other guides) easier to find.
I often enjoy reading the regular emails that emanate from ‘The Daily Stoic’.
Here’s an extract from one that struck me:
“You clean and then it gets dirty. You do the dishes and then five minutes later, the sink is full again. You made it through your inbox in the morning and by the time late afternoon strikes, you’re already digging yourself out again. Literally before you’ve even finished putting the dog’s toys away, they’re splayed out across the floor. Just as you put the finishing touches on that big project, another is dropped on your plate. You finally organize your kids’ clothes and now they’ve grown out of them.
This can drive you nuts. Or you can learn to love it. Continue reading
I regularly notice many service organisations1 communicate to the public with a list of facts that apparently demonstrate that their services are a good thing. This usually occurs at their reporting year-end and is titled something like “Our work this year”2.
I call this the ‘didn’t we do well!’ comms.
Don’t get me wrong, I’m a big supporter of the concept of services that help people….and, yes, I’d like to know what these services are doing and how well this is going. Continue reading
Governments all over the world want to get the most out of the money they spend on public services – for the benefit of the citizens requiring the services, and the taxpayers footing the bill.
Government officials regularly devise initiatives, and even new departments, aimed at getting their myriad of agencies to work better together.
However, looking at this from the outside, the media regularly uncover seemingly daft (and sometimes tragic) instances where government agencies have failed to effectively act, connect and co-operate with each other. In such instances, each agency appears to ‘the person on the street’ to have been wearing blinkers with their ‘common sense’ radars turned to ‘exceedingly low’.
But is it right to lay blame on the agencies or, worse, the people acting within them? In the majority of cases, I’d suggest that the answer would clearly be ‘no’. We should be looking at the bigger ‘whole of public service’ system that they are designed to operate within.
A new phrase was termed some years back called ‘Joined up government’. The Oxford dictionary defines it as:
“A method of government characterized by effective communication between different departments and co-ordination of policies.”
When a dictionary defines a word, it usually provides the reader with an example sentence showing its proper usage. In this instance, the first example sentence given is a negative one, as in:
“There is an obvious lack of joined-up government here” (Oxford Dictionary)
i.e. Governments openly recognise that there is a big problem (a lack of togetherness)…and that they would love to ‘solve’ it…but it’s regularly in the ‘too hard basket’!
The purpose of this post is to share (what is to me) an important (and very well presented) 30 min. video by Jeremy Cox1: Budget Management and People Centred Services that nicely explains, by way of reference to a real case study, the ‘multi agency’ problem and how to go about changing it.
If you are interested (particularly if you work within the public sector) then I’d expect that watching it should be a worthwhile (and thought provoking) use of your time.
Right…if you’ve got to here then I’ll assume that you’ve watched the video…the rest of this post pulls out (what I believe to be) key things said by Jeremy Cox in his presentation (blue italics below) and my ‘wrap-around’ narrative.
Note: What follows is incomplete and not a substitute for watching the video. It’s just an aide-memoire so that I (and you) don’t have to watch the video every time to pull out the key points or discuss it with our colleagues.
Jeremy Cox starts at a summary level by walking us through “four critical steps”:
1. The first thing to do is to study your system…and, just to be crystal clear, YOU (those responsible for the system) have to study it, and do so WITH those who operate it. A consultant cannot do this for (i.e. to) you2.
“You have to go and study because if you see it with your own eyes, you can’t deny it. If someone ‘tells you’, then you can ‘rationalise’ it away quite easily.”
2. From studying your system, you can then see and understand the effects of (supposed) ‘controls’ on its performance.
3. Only when we understand (at a root cause) WHY the system operates as it does, should we redesign…because then, and only then, is such a redesign based on meaningful evidence…as opposed to the usual ‘conventional wisdom’ or ‘current in-vogue ideology’;
and finally:
4. Devise new measures, and move to a new model of leadership.
Cox then goes into each step in some detail.
Going back to Step 1: Cox talks about studying demand.
He takes us through a case study of a real person in need, and their interactions with multiple organisations (many ‘front doors’) and how the traditional way of thinking seriously fails them and, as an aside, costs the full system a fortune.
“Understand demand in context….don’t understand people from the point of view of your organisation, understand the person and what matters to them about living a better life.”
The case study is sad…and yet not really a surprise – we all kind of know that it’s true. It shows the huge power of following some cases around the full system.
In explaining Step 2, Cox opens up the madness within silo’d (i.e. single department) thinking, which is driven by their ‘budgetary controls’.
He identifies three survival principles in play, and the resulting anti-systemic controls that result:
a) “We must prioritise [our] services for the most in need” which leads to attempts to stop entry into the service, and then the requirement to break through escalating thresholds of eligibility.
Such ‘screening out’ logic creates the following madness: “Your case isn’t serious enough yet…go away until things get worse!”
b) “We must stick to what we do” which leads to “I can see that you need A and B for you to get better…but, here, we only do A.”
Cox gives a real example of an alcoholic with depression being turned away by mental health practitioners because “we don’t work on alcoholism – you need to solve that first and then come back with your depression”. We can predict that such unhelpfulness will lead the needy citizen towards a rather large drink!
c) “We must limit service delivery” which leads to attempts at closing cases, doing things on the cheap, and setting time limits…all of which are about pushing things through at the expense of the needy citizen…which will lead to failure demand (probably popping up unexpectedly in another department…and therefore not seen as linked).
The redesign at Step 3 requires different principles.
Cox makes the obvious point that the actual redesign can’t be explained up-front because, well…how can it be -you haven’t studied your system yet!
…but, generally, it is likely that “genuinely integrated, local-by-default problem solving teams will emerge from [following the steps]”.
A clarification: ‘Genuinely integrated’ doesn’t mean a multi-disciplined shared building where people regularly come together for, say, case review meetings…and then go back to their ‘corners’ and work to their existing (i.e. competing) policies and procedures.
A nice test from Cox:
“How do you know a team is genuinely integrated rather than co-located?…All you have to do is look in the fridge – nobody’s written their department’s name on the milk!”
And so to Step 4: New measures and new leadership
[Once you’ve successfully redesigned the system] “The primary focus is on having really good citizen-focused measure: ’are you improving’, ‘are you getting better’, ‘is the demand that you’re placing reducing over time’.”
Notice that these measures are about the purpose of the system (i.e. for the citizen), and NOT about the activities performed within the system. It’s not about the volumes of calls taken or visits performed or payments made or cases closed or…[carry on naming activities].
“You have to shift leaders from managing the budget top-down to adding value to the process of studying, and improving outcomes for individuals.”
The point here is that you are never done. The outcomes from a redesign can radically shift performance, but you’ll quickly be ‘back at square one’ if you haven’t grasped the WHY and don’t ‘kick on’ to yet more learning, and yet more improvement – becoming better every day – for the good of citizens, and (importantly) for the pride of your employees.
To close
What’s most interesting to me from the video is the graphic explanation of one unit of demand, a needy citizen in a really shitty situation, being bounced around – presenting at public service ‘front doors’ in multiple and seemingly unrelated ‘cases’, with each agency doing what they can but not what is required….and the needy slip ever further into their personal quagmire.
“We limit what we do to ‘what we do’, not to what the person needs.”
Cox makes the hugely important point that, once you open your mind, then the study and redesign of the work is relatively easy. The hard bit is re-conceiving the ‘system of management’. This takes real leadership and (perhaps most importantly) self-development.
Cox closes with the following comment:
“Some of the most rewarding work that I have ever done is just working with these integrated teams who are out…on the ground, with good leadership, learning how to solve problems for citizens. You actually see people’s lives turned around and people who otherwise would have been dead who are now still alive.”
This is powerful stuff! There can’t be much more meaning to anyone’s working life than that.
Footnotes:
1. The video covers one session within a ‘Beyond Budgeting’ event run by Vanguard Consulting over in the UK. The first 3 mins. is an introduction from John Seddon, and then Jeremy Cox (a Vanguard consultant) presents the rest.
Note: Cox refers to names of UK government departments (e.g. The DWP). If you live elsewhere in the world then you are likely to have similar agencies, just with different names.
2. A consultant cannot do it for you: I should clarify that an experienced ‘systems thinking’ coach CAN facilitate you through studying your system and its redesign….BUT they aren’t ‘doing it’ – you are!
I have a post with the ink half dry that explains and expands this point called ‘Smoke and Mirrors’. I guess I should get on and finish it now.
3. The NZ government is setting up a Social Investment Agency. Its “focus is fundamentally about changing the lives of the most vulnerable New Zealanders by focusing on individuals and families, understanding their needs better, and doing more of what is most likely to give the best results”. I like the intent. I hope that those involved watch (or have already watched) the Jeremy Cox video, and consider the messages within.
I’ve written enough posts now to ‘write a book’ 🙂 …so it’s about time I dealt with a seemingly sacred cow – the ‘Balanced Scorecard’.
Context
First, I’ll delve into a bit of history…
Robert Kaplan and David Norton performed a research project back in 1990 in respect of measuring organisational performance.
It was based on the premise that:
The outcome of their research project was the concept of a Balanced Scorecard of measurements (and, of course, the accompanying Harvard Business School (HBS) management book).
This retained the organisation’s financial measures (as historic results) but added three additional perspectives:
The last two were said to represent the lead indicators of future financial performance.
The Balanced Scorecard quickly gained traction in many corporations. This was helped by many a ‘big consultancy’ cashing in3 on the lucrative ‘implementation’ revenue stream.
Version 2.0
Over a decade later (2004) Kaplan and Norton then took things further by linking strategy formulation and execution to their measurement ideas and came up with the Strategy Map concept (and, you’ve guessed it…an accompanying HBS management book). I imagine that this was for two reasons:
1. They saw some improvements to/ holes in the original idea;
…and with my cynical hat sat jauntily on my head…
2. They now had an adoring following that would buy the sequel which, as ever, sets out:
– the big idea in detail;
– a set of carefully curated case studies; and
– instructions on how to implement ‘the big idea’ in (on?) your organisation
The ‘Strategy Map’ turned the four quadrants of the balanced scorecard into a linear cause-effect view (see picture)
The idea went that the desired financial outcomes would be stated at the top, which would then be achieved by reverse engineering down the strategy map to the bottom.
Thus, through setting objectives from top down to bottom and using measures, targets and action plans (involving initiatives with business cases and budgets), the desired outcome could be achieved.
Wow, that all looks really cool – neat looking and oh-so-complete! Doesn’t it?
So why the ‘Sacred Cow’ reference?
Well, many (most?) organisations feverishly adopted the Balanced Scorecard/ Strategy Map tools and technique as if it were common sense. Indeed, some 20 years later, it has become ‘part of the management furniture’. Unquestioned…even unquestionable.
However, I believe that there are a number of serious problems within…so let’s consider whether that proverbial sacred cow deserves to be slaughtered…
There are two angles that I could come at it from:
It would be too easy to shoot at how organisations typically implement them (i.e. how they might have bastardised it4)…and you could easily accuse me of ‘cheap shots’, saying that these aren’t Kaplan and Norton’s fault. So, instead, I’ll critique the foundational logic using four headings.
Here goes…
1. Measurement:
The foundation of Kaplan and Norton’s logic is that we must have measures if we are to manage something…and this is regarded as conventional wisdom…but here’s a counter-quote from W. Edwards Deming to ponder:
“Of course visible figures are important but he that would run his company on visible figures alone will in time have neither company nor figures. The most important figures are unknown and unknowable but successful management must nevertheless take account of them.”
His point is that we seem to be obsessed with trying to measure the effect of a given change (usually to ‘claim it’ for some recognition or even reward), but that we cannot accurately do so…and it is a mistake to think that we can. Sure, we can likely determine whether a change is having a positive or negative effect on the system (and thereby try to amplify or dampen it) but we cannot isolate the change from everything else going on (internally or externally; occurring right now, previously or in the future)
Deming went on to provide some examples of ‘important but unknowable’:
Deming famously wrote that “it is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth.”
Example: Can I manage how employees feel? Yes, by how I behave.
Should I become obsessed with measuring employee feeling through those dreaded culture surveys? No!!!!
…just continue to manage how people feel – by constantly and consistently applying simple philosophies such as the most excellent “Humanity above Bureaucracy” (Buurtzorg).
Leave the constant crappy ‘surveying of the obvious’ to those organisations that (still) don’t get it.
The balanced scorecard was derived because of the major limitations of purely financial measures. However, we should not assume that such a tool is a definitive answer for what we need to manage.
Indeed, it causes damaging behaviours – with management wearing blinkers when focusing on the scorecard “because we’ve tied all our management instruments into it and therefore that’s all that counts round here.”
The highly limited and ‘helicopter view’ scorecard becomes a major part of the ‘wrong management system’ problem.
2. Balance:
This word is used as if we need to balance our focus on the four different quadrants, playing one off against the others as if they are counterbalances to keep in check.
But this isn’t the case. If we did a little bit of, say, learning and growth (e.g. developing our people) and/or customer focus but then said “whoa…steady on, not too much…we need to balance the financials” then we aren’t understanding the nature of the system….and we certainly don’t ‘get’ cause and effect.
A metaphor for business to help explain the point:
Let’s suppose that you keep breaking out in a nasty skin rash.
You could pour ice cold water on it, apply a lotion or scratch it…until it bleeds (ouch).
These actions might appear to alleviate the effects…but they are also likely to make things worse…and none of them have considered (let alone dealt with) the cause!
If you continue to ignore the cause and just treat the (currently visible) effects, things could escalate…with new effects presenting…complicating any necessary treatments…causing long lasting or permanent damage…and even death.
If you want to get rid of the rash…and keep it that way (and perhaps even improve your skin complexion and wider health)…then you need to focus your attention on its cause:
And once you’ve worked out the likely cause(s) then you need to do something about it.
You work on the cause (such as stop using that brand of sun cream or stop eating shell fish or…stop injecting heroin!!) whilst checking whether it is working by observing the effect (what the likes of Seddon and Johnson would refer to as ‘keeping the score’).
You don’t think “mmm, I’ll balance the cause and the effect”…because you understand the glaringly obvious definitions behind the words ‘cause’ and ‘effect’
“Cause: A person or thing that gives rise to an action, phenomenon, or condition
Effect: A change which is a result or consequence of an action or other cause.” (Oxford Dictionary)
Okay, back to that Balanced Scorecard/Strategy map thingy and a cause – effect journey:
Senior Management’s beliefs and behaviours determine (i.e. cause) the management system that they choose to put into effect and (often stubbornly) retain;The bl00dy obvious point is that THE FINANCIALS ARE THE EFFECT! So why are we so focused on them, other than to keep the score5.
…or, in a short, snappy sentence: This isn’t something to be BALANCED!!!!!!!!
The ‘balanced’ word keeps people tied to a ‘manage by results’ mentality, rather than managing the causes of the results such that the results then look after themselves.
What winds me up even more than the balanced bit is….wait for it…applying % weightings on the four quadrants5….usually with the financials (yes, the effect) getting the lions share!
That’s like saying “We’ll focus 75% on scratching the rash but only 25% on taking fewer heroin injections”. Aaaargh!!!
Now, you might respond to me by saying you believe that Kaplan and Norton understood the problem with the ‘balanced’ word…which is why they, ahem, ‘refreshed’ their logic with their ‘Strategy Maps’ book.
The problem with this is that they didn’t attack the results thinking, they merely added to it and, as such, many (most?) organisations continue with balancing and weighting…and spectacularly missing the point.
3. Key Performance Indicators vs. Capability:
Okay – let’s suppose that senior management accept that measures aren’t everything and that we shouldn’t be balancing (let alone weighting) things – I hope that we can all agree that some “right measures, measured right” (Inspector Guilfoyle) are going to be very useful…
…and so to the next whopper problem – the “measured right” bit.
Nothing (that I have seen) within the Balanced Scorecard/ Strategy Map logic reflects on, let alone deals with, the hugely important subject of variation and the need to always visualise measures over time.
Management simply use a set of KPIs on a ‘scorecard’ and look at their red down/ green up arrows against last period and/or their traffic lights against budget.
This is to completely ignore the dynamics of a system, and whether such movements are predictable or not….and therefore whether any special attention should be paid to them.
The Balanced Scorecard/Strategy Map approach can therefore create a set of Executives exhibiting the ‘God complex’ (as in “I have the answer!”) whilst being “fooled by randomness” (Taleb) – blissfully ignorant of the capability of their value streams (or processes within) and doing much damage by tampering.
and last, but by no means least…
4. Strategy vs. Purpose:
The underlying assumptions within the Balanced Scorecard/Strategy Map thinking would appear to be the conventional ‘shareholder value’ view of the world.
(I’ve previously written a 5-part serialised post on what I think about this….so I won’t repeat this here)
We get fed a feast of:
In short: The core problem (for me) with Kaplan and Norton’s two books is that, not only do they retain the problematic traditional command and control management system, focused on delivering shareholder value – they use it as their foundation to build upon.
It’s therefore no wonder that organisations carry on as before (doing the same crappy stuff), whilst waving their supposedly game-changing ‘Strategy Map’ around a lot.
Have you got hold of that cow? Good…now where’s my ceremonial knife?
To end: ‘having a go’ at me because I’m being so negative
You might shout back “okay you cynic…what would you do instead?!”
Well, I’m not going to be able to answer that in a paragraph – even Kaplan and Norton took two (rather verbose) books…and more than a decade in-between…to present their logic – but I’d suggest that, if you are curious, the 130+ posts on this site would go some way to expressing what I (and I believe my giants) think.
…and if you want to start at measurement then you might want to look here first.
Footnotes:
1. Knowledge based assets: Kaplan and Norton list the following as examples of assets that aren’t measured and managed by financial measures: employee capabilities, databases, information systems, customer relationships, quality, responsive processes, innovative products and services.
2. Measurement system remaining financially based: H. Thomas Johnson’s book ‘Relevance Regained’ makes clear that it wasn’t always so. Financial measures used as operational measures (a bad idea) only came into being from the 1950s onwards. Johnson refers to the period 1950s – 1980s as the ‘Dark Age of Relevance Lost’ and ‘Management by Remote Control’. I would argue that many an organisation hasn’t exited this period.
3. Big consultancies ‘cashing in’: I can (sadly) write this because I have first hand evidence – I was there! 😦
4. Bastardising the Strategy Map includes organisations changing the order of the four elements!!!
5. Financials: There’s a HUGE difference between a) using financial measures to keep the score (which would be good governance) and b) attempting to use them to make operational decisions! Using financials to make operational decisions is to attempt to ‘make the tail wag the dog’.
Yes, accountants should keep the score, for cash flow monitoring and assisting with longer term investment decisions…but accountants should not be attempting ‘remote control management’ of operations.
6. Weighting the elements of the scorecard: See, for example, fig. 9.8 in ‘The Balanced Scorecard’ (1996) and the related commentary.
7. Diversity: I understand that the cow is a holy animal to some. Please don’t be offended by my use of an English phrase in expressing my thinking – no real cows were harmed in the writing of this post…and no harm is intended to those living now, or in the future 🙂
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