Service

‘Bob the Builder’: Push vs. Pull analogy

giantknave Brain Farts , , , , ,

Let’s suppose that I have the first world problem of having my home bathroom renovated. Lucky me.

I (the client) want others to do this work for me. I’m not competent/capable of doing it myself, so I contact a qualified builder.

Now, given this ‘scene setting’, I want to compare and contrast two vastly different ‘system designs’ in dealing with my need – I’ll label them as ‘Push’ and ‘Pull’…and I’ll then use my builder analogy against many a conventional service system.

Note: The Push and Pull concept can be used in several ways. In this scenario I am using:

  • ‘Push’ as the client being pushed around an inside-out focused design (as if they were merely a ‘widget’); and
  • ‘Pull’ as ‘value’ being pulled towards the client by their helper (builder), making for an outside-in flow.

Push

So I’ve contacted ‘Mike the Builder’ and he comes round to take a look. We have a dynamic discussion about what needs doing, my design preferences, and any constraints I have (e.g. timescales, site access…dealing with the dog!).

The conversation comes to a close…

Builder Mike: “Great, thanks Steve, I’ve captured what I think you need. I’ll write that up and pass it on to Builder Trevor”.

Me: “Eh? I thought you’d be doing the work! I’ve just spent an hour with you, and you now understand my situation and requirements. Why are you now passing [pushing] me onto another builder?”

Builder Mike: “Oh, sorry, no, I just do the set-up part. This then gets streamed to another builder according to some criteria. It’s now with Builder Trevor. He’ll contact you about starting the work”.

Me: “I’m less than happy about this. I’ve spent time establishing a rapport with you. You now understand me and my situation. Surely, I now need to wait for Trevor to become available and then repeat this detailed conversation all over again with him?!”

Builder Mike: “Oh no, you don’t need to do that, I’ll write it all up carefully1 and make sure Builder Trevor gets this. He’ll contact you as soon as he can”.

So, a bit of time goes by and then Builder Trevor calls me. We arrange a start date, and he arrives on site to get stuck in.  I’m a bit nervous as to whether he understands what is needed but he assures me that Builder Mike passed on his notes.

After a few days’ worth of work (lots of banging and ripping going on), Builder Trevor contacts me one evening:

Builder Trevor: “Hi Steve, just to let you know that I’m passing [pushing] you on to Builder Sam. It turns out that, once we’ve stripped everything out, your build is far more complicated than Builder Mike had realised. You’ve got a really old house and I’ve uncovered some ‘gremlins’ behind the walls/ under the floors. It needs some specialist work to sort out.”

Me: “Er, okay…it is what it is…but why can’t you sort these complications out? Why do you need to pass me on to someone else? How does Sam get up to speed as to what needs doing?…aaargh!!!!”

Builder Trevor: “Well, Builder Mike streamed the work to me because I do the non-complicated jobs. Builder Sam does the complicated jobs. I’ve now found out that you were streamed incorrectly2 so I’m sorting that out by passing [pushing] you over to Builder Sam.”

Me: “Well, that may be how you’ve chosen to organise…but that isn’t what I want/need. I want to work with one builder!”

Builder Trevor: “Oh, it won’t be a problem. Builder Sam is very good – he’ll sort out all the complicated stuff that needs doing. You just need to wait for him to contact you.”

And so, after Builder Sam contacts me, and a bit of a delay, he comes onto site to start the work.

Builder Sam: “Blimey, I wouldn’t have done it like that!”

Me: “no, no – that’s what I wanted doing! I explained it all to Mike…and again to Trevor…I need to explain it all to you now.”

A long, detailed, careful [and exasperated] explanation is then given by me to Builder Sam.

Builder Sam: “Okay, now it makes sense. I’ve got it. I’ll crack into it.”

Builder Sam gets ‘on the tools’ and work resumes. A week later, Builder Sam calls me:

Builder Sam: “Hi Steve. Good news – we’ve sorted out the complicated stuff…so your job is now back to being a simple one. I’ve passed you on to Builder Jim.”

Me: “oh for f@#k sake! Why are you passing [pushing] the job on again??? Why can’t you finish it? And who on earth is Jim?!”

Builder Sam: “Well, I’m only streamed to do the complicated stuff…and yours isn’t complicated anymore so I’ve got to put you back into the ‘non-complicated jobs’ queue”

Me: “So, presumably you mean to pass me back to Trevor then? …and not some Builder called Jim!”

Builder Sam “Oh no, Builder Trevor is busy on another job now. You’ve been allocated to Builder Jim.”

Me: “You are joking aren’t you?! Trevor knows what to do. This ‘Jim’ doesn’t know anything about what’s needed, what’s been done so far, why the complicated work was required, how you’ve sorted it…and what is left to do.”

I’ve not had a usable bathroom for a few months now, and I desperately need to get it back functioning. I don’t really have a choice – I’m a hostage to the Builders. I ask for Builder Jim to get onsite asap and finish the job.

And so, after a bit of a delay3, another round of introductions, and an attempt by me to bring Builder Jim up-to-speed on everything, work resumes.

A week later:

Builder Jim: “Right, I’ve finished everything and I’m all packed up and ready to leave. Just ‘sign off’ on this completion form – put your signature here”.

Me: “Before I do that I want to check the work.”

Builder Jim: “Oh, er, okay – but I’ve done everything that’s on my job sheet.”

I take a really good look around…

Me: “That’s not the toilet that I asked for…that’s not where I asked for the attic hatch to be positioned…why have you put in a fancy heated mirror that I didn’t ask for and then charged me for it…grrr – I explained this ALL to Mike at the very start!!!!”

Builder Jim: “Well, that’s not down on Mike’s notes. If you’ve got a problem with the work done, then you’ll need to contact our complaints department. They will then assign you a ‘Complaint resolution’ Builder to look into it.”

Me: “I don’t want to be assigned another f@#!ing Builder!!!!!!!!!”

Builder Jim: “Steady on mate. It’s not my fault. I’ve done the best I can with what I knew.”

The above (I hope) reads as being rather ludicrous, and so to…

Pull

I contact ‘Bob the builder’ and he comes round to take a look. We have a dynamic discussion about what needs doing, my design preferences, and any constraints I have (including that dog).

Builder Bob: “Right, that’s all understood. I’ll be back next week to make a start.”

Me: “Great stuff, I’m looking forward to working with you to get this sorted.”

Builder Bob: “Now, just to be clear, I’ve got a fair bit of experience but there are often unexpected things that I uncover. These might be new things that I haven’t seen before. If that happens, then I’ll bring in [Pull] appropriate expertise to help me get it sorted…but don’t worry, I’ll be taking responsibility for what’s needed and making sure that it gets done.”

Me: “Sure, makes sense. Sounds good to me.”

Builder Bob gets to the stage where he’s stripped everything out and, sure enough, there’s some gremlins hidden behind those walls. I get a call one evening:

Builder Bob: “Hi Steve. Just to let you know that I’ve uncovered some tricky stuff behind the walls. I’m pulling Wendy onto site to get it sorted – she’s seen this a number of times before and knows just what to do. Actually, I’m really looking forward to it as I’m going to learn some cool new stuff from her.

I’m always learning on this job, that’s what I love about it 🙂 ”

Me: “Fair enough, an old house was always sure to present some roadblocks, but great that you can bring in Wendy to sort it.”

…and, behind my smile I’m thinking I’m really happy that I selected Bob as my builder – it’s great that he’s owning the job. I will use Bob for all the other (big list of) stuff that needs doing to my old house!

So, it comes to the end of the job and Bob asks me to sign off on his work.

And, because I started the process with Bob, and have been keeping up with him along the way, there’s very few issues. However, the world’s not perfect and I notice something which isn’t what I had asked for…so I let Bob know.

Builder Bob: “Oh bugger, yep, I remember now – you did ask for that didn’t you. No worries, I’ll get that rectified asap.”

 

Now, you might have a pessimistic view of builders (perhaps through experience or folklore) and think that this ‘end of job’ scenario is a bit fanciful…

…but I expect you’d agree with me that I’ve got a massively better chance of communicating with Bob about a missed requirement and getting it sorted as compared to attempting communication with the Mike/Trevor/Sam/Jim/A N Other ‘tag team’ of builders.

Applying the analogy to many a conventional service system

There are numerous examples of service organisations that are built and operated along the ‘push the client around’ design (ref. ‘tiered models of service’)…with all those daft situations that I have attempted to show above…and much more besides.

And, rather than the 1st world (and relatively short lived) problem of a new bathroom suite, these systems are trying to help people with fundamental aspects of their lives, often over substantial periods of time (e.g. physical and mental health, social and economic wellness, …)

Such a client needs someone to take responsibility for helping them, and to pull this help towards them. This can only happen if this is ‘designed in’. It won’t (and can’t) happen simply by imploring workers to be ‘client centric’.

To clarify: This isn’t a case of bad workers, it’s a case of workers with great potential to ‘do good’ but who are hampered, prevented, and blinded by an inappropriate system design.

Footnotes

1. On ‘writing it all up carefully’: The spaghetti notes phenomenon

2. On being ‘streamed incorrectly’: One of the major ‘wrinkles’ within streaming logic is the belief that people can be ‘correctly’ streamed before they and their situation is actually understood. A second ‘wrinkle’ is that the world is dynamic (things always change)…so even if something was streamed ‘correctly’ at a point in time, it will often not remain that way.

3. On waiting: You’ll note that, within the ‘push’ scenario, there is a fair bit of waiting time, whilst I (the client) am ‘parked’, waiting for the next builder to become available, to pick my ‘job’ out of their bucket of work, and to contact me to get it (re)started.

4. The names of builders:

  • the pushing scenario: I was looking for inspiration as to names to use, so I’ve used the names of local builders that I know. Please note that I am not casting aspersions on them! I’m just using ‘poetic licence’. In fact, the reality is quite the opposite – I’ve heard great things about all of them 😊.
  • the pulling scenario: I’ve gone with the much-loved UK Children’s cartoon characters ‘Bob the Builder’ and ‘Wendy’. I left out Scoop, Muck and Dizzy…

The ‘Supermarket shelf’ analogy

giantknave Brain Farts , , , , , ,

I’ve had many constructive conversations with people about a ‘way of thinking’ regarding the relationship between those helping people (value creating) and those enabling this to happen (value enabling).

I wrote this up in a two-part post, which is linked here:

In addition to these two posts, I often use an analogy1 of a supermarket shelf to assist me in explaining the desirable inter-connectedness between those helping clients, and those (tasked with) enabling this.

Now, whilst every analogy is limited2, humanity has derived great value in using them. So this post is my attempt at writing down my ‘supermarket shelf’ analogy for others to ponder and play with.

Here goes…

So, how does a physical supermarket shelf work?

A simple diagram to assist:

In pulling according to their needs, the customer determines:

  • whether what’s available is suitable for their needs (ref. autonomy);
  • whether to try a product;
  • what they think about the product once they’ve used it; and
  • what’s missing from the selection (ref. not engaging/ going elsewhere)

In observing the customer, the supplier uses this as feedback to determine:

  • which products are being selected, and therefore need restocking (ref. capacity);
  • what new products to develop and test (ref. experimentation); and
  • which products to improve or discontinue (ref. learning)

Note that the customer decides what combination of products goes in their basket (i.e. what selections work for their needs) …no matter how unexpected these may appear to the supplier.

The supplier’s role is to (safely) enable the selection, whilst providing knowledge to the customer as to what they are selecting and how to get the best out of it.

…and what doesn’t happen?!

The supplier DOES NOT decide what products to put into the customer’s basket.

The supplier DOES NOT decide whether the product worked out for the customer.

In short, the supplier DOES NOT control the customer. Rather, they aim to understand and enable them.

 The analogy with People-centred services

If a social system wants to truly help people (its clients) then it will achieve this through autonomy support (rather than attempts at control).

The following diagram applies the supermarket analogy to a social system by using the roles defined within Part 1: Autonomy – Autonomy Support – Autonomy Enabling:

THE big point within this analogy is that ‘the centre’ (i.e. those removed from the client relationship) DOES NOT determine what services a given ‘client – helper working alliance’ is provided with/ can access.

Rather, their role is one of enablement: to ‘stock the shelves’ with a full range of useful tools that will assist, to ensure that it is clear and easy as to how to get the best out of these tools, and to constantly monitor and improve what’s available.

The ‘client – helper working alliance’ decides what combinations to pull and when to pull them as they progress on their relational journey to a better client life.

As set out within an earlier post on Vector Measurement, each client is unique, and their situation complex…so the journey will be about iteratively working alongside them according to what emerges.

This would be the opposite of putting people into a tiered model of services…and moving them up these tiers as things deteriorate (see below on this).

Clarification as to why the shelf is required

You might think “Yes! I agree…we need to get the (attempted) centralised control out of the equation!!” As such, you might be wondering why the helper (the ‘front line’ worker) even needs the centre.

Well, they do…but in a different way than has become the norm.

The helper needs to focus on the client – who they are, what’s going on for them, why this is so, what they need to move forwards.

The helper doesn’t have the time, capability, and resources to develop the host of necessary tools to help. Instead, they need to rely on others to enable them. NOT to dictate to them or refer onwards to…but to focus expertise where it is required.

Example: a client might want/need help in getting an appropriate job. Their helper would really like to be able to pull useful tools like:

      • careers advice with respect to a client’s strengths and experiences
      • knowledge as to what’s available to help develop a client in desirable directions (e.g. education courses, work experience opportunities…)
      • knowledge of the local recruitment agencies, their specialisations, and who/ how to contact
      • guidance on how to write a good CV, and some templates to get the client going
      • interview coaching/advice
      • financial assistance with logistics (e.g. transport, clothing…)
      • …

All of these things would be very useful for the client & helper to have available to them, to pick and choose. It would be mad for each helper to have to design their own.

Conversely, none of this is the ‘centre’ dictating specific responses when a client’s attributes fit certain criteria, such as ‘you need to attend this work seminar, take part in this course/ programme, apply for these available roles, reapply for this benefit, …move from service tier x to service tier y’.

We could find lots of other examples (e.g. in health, education, corrections…), and the point would be the same. The client and their helper are on a journey. The service design needs to enable them, not attempt to categorise and control them.

What has become the conventional norm?

i.e. why is it necessary for me to have to write this post?

The current norm in many large service organisations is to adopt a centrally designed tiered model of services. Such a design involves multiple tiers of escalating service support.

A customer typically starts at ‘tier 0’, where the aim (from the organisation’s point of view) is for the customer to self-solve their needs (#digital).

‘Tier 1’ usually involves the need to ‘talk to a person’ but these ‘generalist’ processors are only allowed and/or equipped to answer the very basic needs.

‘Tier 2’ involves escalation to ‘specialists’ (people who may be able to help absorb some aspects of a client’s instance of variety)

…and we may go up to ‘tier n’ according to how specialised we choose to design.

The thinking is that such a model is cost-efficient (ref. front office – back office).

What’s not seen, let alone appreciated, is that such a design causes huge waste (and therefore cost) and significant client distress:

  • of people steadily progressing up the tiers because the one before couldn’t meet their needs:
    • particularly between tiers 0 and 1 (“I tried online but…)
    • and again, between tiers 1 and 2 (“sorry, I can’t help with that. I’ll refer you onwards to…)
  • of the wasted time and effort involved in managing this transferring of people between tiers (including the recording, and then deciphering of the notes in the system)
  • of people not being able to access obvious and immediate help that could avert things getting worse (“sorry, your situation isn’t bad enough yet to access ‘tier 2’. Go away until you can show that ‘the wheels have really fallen off’ ”)
  • of people getting ‘stuck in the system’ (“I can’t help with your actual underlying needs…but I can put this ‘sticky plaster’ over it”)
  • of things getting worse for people as these transfers occur (“My initial problem was x…but now it’s morphed into 3x, y and z!”)
  • of the confusion between those working within the various tiers (e.g. tier 2 getting frustrated with tier 1: “why did you do that for/to them? They’re my client!”)
  • of the disengaged workforce who, confined to their allocated service tier, aren’t allowed to develop and use their capability to actually help the clients before them. They aren’t ‘helpers’ (as per the supermarket analogy). They are merely ‘processors’ (according to a centralised design).

If you operate such a system design, you could go and look (#studyyoursystem) …and see all of this. You probably won’t believe it until you do.

In summary

There’s a paradigm shift between attempting to efficiently handle volumes of events (transactional mindset), and effectively helping people move forwards (relational mindset).

The ‘tiered services’ model is focused on events and efficiency…causing yet more events to occur.

The ‘autonomy – autonomy support – autonomy enabling’ model is focused on journeys and effectiveness… leading to stability and independence.

The source of the analogy

I like to make clear how I got to my (current) thinking. Three stimuli for this post:

  • In the 1950s Taiichi Ohno (Toyota production system) saw photos of American self-service supermarkets showing products arranged on shelves, available to be selected by customers as and when they required them.

He marvelled at how customers chose exactly what they wanted and how much of it, and then at how the products were replenished (Japan didn’t have self-service supermarkets at that time).

This led to Ohno and his colleagues devising the pull system of production (the opposite of the conventional push), and tools such as Kanban cards to convey the necessary information.

  •  In the 1970s Jan Wallander (Handelsbanken) set out a system whereby the bank’s central services worked to define useful banking products (to put on the shelf), and local branches decided (with their customers) which of these products to use (pull from the shelf), and in what combinations.

Wallander removed the ability of the centre to dictate the usage of their products. He turned them into suppliers to the branch. The branch ‘owned’ the customer relationship and determined if/how the available products helped.

Note that Buurtzorg, and its ‘onion model’ of care, is a modern example.

  • Over the last few decades John Seddon and his colleagues have repeatedly demonstrated the effectiveness of pulling interventions according to customer need in people-centred services (rather than pushing according to centralised, standardised, specialised design). He’s written several books that clearly set this work out.

A valid criticism of this post

I expect that John Seddon would quite rightly ask of me “why are you writing this down for others to rationally read and then merely apply to their current thinking?”…and thus achieve very little change.

I would like to prompt a level of curiosity: to open ‘managements’ eyes4 to the simple fact that the conventional ‘tiered model of services’ isn’t the only way (or even a good way!) …

…and I would then want them to (meaningfully) go to the Gemba, to see the evidence of the dysfunctional performance caused by the current system design, looking at this from the customer/ client’s point of view. #Normative

“The starting point for designing a better system is understanding what’s wrong with the current system.” (Seddon)

The most important part of doing such a thing would be to critically reflect on why things are as they are (which, if we ‘dig deep’ we will find to be ‘thinking things’).

If we don’t uncover this then we will likely just ‘rearrange the deckchairs on the Titanic.’ i.e. the same, but different.

Footnotes

1. “Analogy: a comparison between one thing and another, typically for the purpose of explanation and clarification” (Oxford Dictionary)

2. Limitations of the analogy: All analogies are limited and, if you have the desire to do so, you could choose to kick giant-sized holes in this one. A few example holes that I see:

a) Psychology: those of you aware of the world of consumer products marketing may push back at me with something like “but the supplier IS controlling the customer with the psychology around placement of products on the shelves, packaging, advertising….”

The usage of this analogy is about the customer choosing whether to select, what to select and whether it works for them (ref. autonomy). I ‘get’ that the supplier will use whatever it can to influence the client.

This also applies in people-centred services. A supplier of help (enabler) may want people to, say, stop smoking. As such, it is reasonable for them to understand what interventions work and to use psychology to ‘nudge’ the customer in desirable directions. However, attempts at control will likely backfire (ref. disengagement, defiance)

b) The language of ‘products and services’: A big part of the problem within many service organisations is a ‘product/service’ focus rather than a ‘client need’ focus.

I’d note that service organisations will likely need to create services to help clients, but the analogy is suggesting that these services should be the slave to the client’s needs, not the master. Further, it is making clear that any services need to be able to flex to absorb the variety of the clients before them.

c) Instantly: In a physical supermarket we usually get our need met ‘there and then’. In a people-centred world, it can take time and perseverance for help to ‘take effect’. I’m not wishing to trivialise this.

If I butcher George Box’s ‘model’ quote then “All analogies are wrong, but some analogies are useful”. The question I would wish the reader to ask: ‘is this analogy of some use [to them and others around them]?’

4. Autonomy support: This analogy requires the ‘client – helper working alliance’ to be seen as the customer ‘at the shelf’. It’s not saying that a client can do whatever they want. The autonomy support aspect (the helper role) is critical.

5. On opening eyes: Some will be curious. Some need to be re-awakened from their ‘conventional’ slumber. Others require (what I refer to as) ‘professional provocation’.

Part 2: The problem of changing from ‘this’ (Control) to ‘that’ (Autonomy)

giantknave Brain Farts , , , , ,

This post discusses a ‘how’ and follows on from a discussion of the ‘what and why’ in Part 1: Autonomy – Autonomy Support – Autonomy Enabling (a Dec ’21 post – it only took me 7 months!)

I’ll assume you know that the ‘how’ I am writing about is with respect to an approach to moving a large people-centred system:

  • from (attempted) control
  • to autonomy (and its enablement).

Please (re)read ‘part 1’ if you need to (including what is meant by people-centred)

 Oh for the luxury of a ‘Green field’!

You could be fortunate to start in a relatively ‘green field’ situation (i.e. with very little already in place).

This is what Jos de Blok did in 2006 when he founded the community healthcare provider Buurtzorg in the Netherlands. He started with a few like-minded colleagues to form a self-managed team (i.e. an autonomous unit), and when it reached a defined size (which, in their model, is a team of 12), it ‘calved off’ another autonomous unit.

Buurtzorg carried on doing this until, 10 years later, there were 850 highly effective self-managing teams (autonomous units) in towns and villages all over the country.

In doing this, the autonomous units evolved the desire to have some (very limited) support functions, that would enable (and most definitely not attempt to control) them.

Sounds wonderful.

But many (most) of us don’t have this green field scenario.

We are starting with huge organisations, with thousands of workers within an existing set of highly defined (and usually inflexible) structures. The local, regional and (usually large and deeply functionalised) central model exist in the ‘here and now’.

So, the Buurtzoorg example (whilst recognised as a brilliant social system) is limited.

Rather, we would do well to look to an organisation that successfully changed itself after it had become a big control system. And Handelsbanken is, for me, a highly valuable organisation to study in this regard.

 

Some context on Handelsbanken

I recall writing about Handelsbanken and their forward-thinking CEO Jan Wallander some time back…and, after searching around, found a couple of articles that I wrote five years ago (how time flies!). A reminder if you are interested:

I’ve added some historical context1 in a footnote at the bottom of this post, but the upshot is that the results have been hugely impressive, such that they have been written into management case studies and books. Wallander successfully transformed the organisation, for the long term. It is now an International bank (across 6 countries) and turned 150 years old in 2021. It continually wins awards for customer satisfaction, financial safety, and sustainability.

I should deal with a likely critique before I go any further:

“But it’s a bank Steve!!!” Over the last few years, my area of interest has become the social sector (rather than ‘for profit’ organisations)…and, if you’ve noticed this, you may be questioning my use of a bank for this ‘Part 2’ post.

I’d respond that much of Jan Wallander’s thinking fits incredibly well for organisational design within the social sector. He saw that the answer was ‘about the long-term client journey’ (people-centred), within a community and NOT about pushing ‘products and services’.

 

An introduction to the ‘how’

I’ll break up my explanation into:

  • Some key ‘up-front’ points;
  • How Wallander achieved the transformation; and
  • The core of Wallander’s organisational design

 

Some key ‘up front’ points

“As a rule, it is large and complex systems and structures that have to be changed if a real change is to take place.” [Wallander]

  • There is no magic ‘let’s do another change programme’ silver bullet. It is a change in organisational paradigm
  • It will take time and, above all, leadership (in the true meaning of the word)
  • Most important for the ‘leadership’ bit is that those leading ‘get the why’. Constancy of purpose can only come from this

 

How Wallander achieved the transformation

Saying and doing are quite different things. I expect that I could have lots of agreeable conversations with people throughout an organisation (and particularly with those at its ‘centre’) about ‘autonomy at the front line, with enablement from the centre’…and yet nothing would change.

The following quote interests me greatly:

“The reason why [such an ‘autonomy and enabling’ system] is so rare and so difficult to achieve is quite simply that people who have power…are unwilling to hand part of it over to anyone else – a very human reaction. So, if one is to succeed, one needs a firm and clear goal and one has to begin at the top…with oneself.” [Wallander]

Which leads on to…

Wallander’s head office problem

“The staff working at the head office saw themselves as smarter, better educated and ‘more up-to-date’ than the great mass of practical men and women out in the field. They also felt superior because they were in close contact with the highest authority [i.e. the members of the senior management team].

A steady stream of instructions…poured out from the head office departments…amounting to several hundred a month. Even if a branch manager was critical of these instructions and recommendations, he did not feel he had any possibility of questioning them.” [Wallander]

Wallander saw things very differently to this:

“The new policy…aimed at turning the pyramid upside down and making the branch office2 the primary units.

In the old organisation there was a clear hierarchy: at the bottom of the scale were the branch offices, and on the next step up the [regional] centres. [‘Success’ was] a move up to a post at the head office.

In the new organisation, it was service at the branch offices that would be the primary merit…[because] it was the branch offices that gave the bank its income [i.e. delivered value to clients, towards their purpose]

In the new organisation:

    • the branch offices were the buyers of [enabling services]; and
    • the [central] departments the sellers who needed to cover their costs.”

It’s one thing saying this. It’s quite another achieving it. So how did Wallander do it?

Put simply, he stopped ‘push to’ the front line and enabled ‘pull by’ the front line.

Initially, he wanted to ‘stop the train’:

“[Head office] Departments were forbidden to send out any more memos to the branch offices apart from those that were necessary for daily work and reports to the authorities [e.g. regulators].

[All the head office] committees and working groups engaged in various development projects…were told to stop their work at once and the secretaries were asked to submit a report on not more than one A4 page describing what the work had resulting in so far.”

Then he wanted to change the direction:

“An important tool in the change process was the creation of a central planning committee that had a majority of members representing the branch offices.

This committee summoned the managers of the various head office departments, who had to report on what they were planning to do… and how much it would cost the branch offices [i.e. what value would be derived].

The committee could then decide [what was of use to their clients] and [where they considered it was not] the departmental managers were sent back to do their homework again.

In short, those delivering to clients (the branch offices) were given ‘right of veto’ over those from elsewhere proposing changes to this.

This had a dramatic effect. If you are a central department and you don’t want to be wasting your time on unwanted stuff (and who does?), then you’d better (regularly) get out to the front line, observe what’s happening, understand what’s required and/or getting in the way, and then collaborate on helping to resolve.

Further, if (after doing this) a central department develops something that the branches don’t want to use, then the next step turns into dialogue (leading to deeper understanding and valuable pivots in direction), not enforcement.

…which would create adult – adult interactions (rather than parent – child).

 

The core of the organisational design

I’m going to set out a bunch of inter-related points that need to be taken together for their effect to take hold. Here goes:

1. The local team ‘owns’ the client (relationship):

A client isn’t split up into lots of ‘bits’ and referred ‘all over the place’. Rather, the local team owns the client, as a whole person, throughout their journey. This provides: the client with direct access to the people responsible for helping them; and the local team with meaningful work.

“If you want people motivated to do a good job, give them a good job to do.” (Hertzberg)

2. The local team functions as a semi-autonomous self-managing unit, and is the primary unit of importance:

They are fully responsible for their local cohort of clients and, where they need to, pulling expertise to them (rather than pushing them off to other places).

3. The local team manager is a hugely important role:

This is because they are the linchpin (the vital link). They are responsible for:

  • the meaningful and sustained help provided to their local cohort of clients;
  • the development and wellbeing of the local team helping clients; AND
  • ensuring that the necessary support is being pulled from (and being provided by) the enabling centre.

They are NOT the enforcers of the centre’s rules. Rather they are the stewards of their local community (clients and employees).  This is a big responsibility…which means turning the ‘local team manager’ into a highly desirable role and promoting highly capable people into it.

In a reversal of thinking:

  • the old way was that you ran a local site in the hope of one day moving ‘up’ to head office
  • the new way is that a job at the centre might be a stepping-stone to being appointed as one of the highly respected local team managers

4. The capability of the local team employees is paramount:

If the local team are to truly help clients, then focused, ongoing time and effort needs to go into developing their capability to do this.

They are no longer merely ‘front line order takers’…so they need help to develop and grow (‘on the job’, ‘in the moment’).

5. Local team employees must receive a reasonable salary:

If we want people to develop and grow such that they deliver outstanding help to their clients, then we need to pay them accordingly. This is not ‘unskilled’ work (whatever that means nowadays).

 

Putting points 1 through to 5 together creates a virtuous circle: meaningful work, self-direction, relatedness, growth, wellbeing…and back around to meaningful work.

 

We now turn to some enabling principles:

6. The centre’s job is to enable (and NOT control) the local team:

Basically, re-read (if you need to) what I’ve written above about Wallander’s head office problem and how to transform this.

THE core principle here is that the local teams (via representation) have right of veto over central ideas for change.  After all, YOU (the centre) are impacting upon THEIR clients.

For those of you ‘in the centre’ who are thinking “but this is Bullsh!t, the problem is that the local team just don’t get why [my brilliant change] is necessary!” then

  • either they know something you don’t…and so you’d better get learning
  • and/or you know something they don’t…and so you’d better get into a productive dialogue with them

…and whichever it is, a dose of experiential learning (at the Gemba) is likely to be the route out of any impasse.

In short: If the local team don’t ‘get it’ or don’t ‘want it’ then the centre has more work to do!

7. All employees (local team and centre) need clarity of purpose and a set of guiding principles:

Whilst we want each and every local team ‘thinking for itself’, we need them all to be going in the same direction. For this to occur, they need a simple, clear (client centred) purpose and principles, to use as their anchor for everything they do…and with this they can amaze us!

Which leads to one of my all-time favourite quotes:

“Simple, clear purpose and principles give rise to complex and intelligent behaviour.

Complex rules and regulations give rise to simple and stupid behaviour.” (Dee Hock)

We also need the ‘centre’ (and most definitely senior management) to live and breathe the purpose and principles*. Without this it’s just ‘happy talk’.

* Note: This list of nine points (and the context around them) is a good start on a core set of principles.

8. There needs to be transparency across local teams as to the outcomes being achieved (towards purpose):

A key role for the centre is simply to make transparent that which is being achieved, so that this is clear to all…and then resist dictating ‘answers’.

This means that each local team can see their outcomes and those of all the other local teams…and can therefore gain feedback, which creates curiosity, stimulates collaboration, generates innovation, and produces learning towards purpose…

…we are then on the way to a purpose-seeking organisation.

Once outcomes are transparent, then if the centre is demonstrably able to help, it is highly likely that local teams will pull for it.

 Clarification: Transparency of systemic outcomes towards purpose, NOT activities and outputs (i.e. how many ‘widgets’ were shoved from ‘a’ to ‘b’ and how quickly!)

 

and last, but by no means least…

9. The budget process needs to be replaced with something better:

I’m not going to write anything detailed on this, as I’ve written about this before. You are welcome to explore this point if you wish: ‘The Great Budget God in the Sky’.

In short, the conventional budget process is also a HUGE problem for a system in meeting its client defined purpose.

 Right, I’m one point short of ‘The Ten Commandments’…so I’ll stop there. This isn’t a religion 🙂

 

To close

The above might seem unpalatable, even frightening, to the current ‘Head Office machine’ but there’s still seriously important work for ‘the centre’ to do…but just different to how you do it now.

In fact, if those in the centre really thought about it (and looked at the copious evidence), how much of what the head office machine currently does provides truly meaningful and inspiring work for you? Perhaps not so much.

Sure, we tell ourselves that we’ve ‘delivered’ what we said we would, according to a budget and timescale…but how are those clients going? Are things (really) getting better for them, or are they stuck and perhaps even going backwards?

How would you know? I expect the local team could tell you!

 

Footnotes:

1. Historical context: Handelsbanken was, back at the end of the 1960s, a large historic Swedish bank that had got itself into an existential crisis

It was run in the typical functionalised, centralised command-and-control manner, according to the dominant management ideas emanating from American management schools (and which still leave a heavy mark on so many organisations today)

The Handelsbanken Board decided to headhunt a new CEO in an attempt to turn things around (i.e. ‘transform’ in the proper use of the word)

Dr. Jan Wallander was an academic who, through years of research and experience, had arrived at a systemic human-centred management philosophy. To test his thinking, he had taken up the role of CEO at a small Swedish bank (which was becoming an increasingly successful competitor of Handelsbanken)

The Handelsbanken Board were struck with the highly successful outcomes that Wallander had achieved, and they wanted him to rescue them from their crisis.

In 1970 he said yes to their request…but with strings attached: They had to allow him the time and space to put his ideas into practice.

2. ‘Local team’, ‘Branch’, ….: Organisations choose various words to refer to their local presence, be it office, site, shop, outlet, etc. What matters most is the decentralised thinking, not the word chosen or even how the ‘localness’ manifests itself.

I’ve used the generic phrase ‘local team’ in this blog because it implies (to me) a distinct group of people looking after their clients. You’ll note that Jan Wallander refers to the ‘Branch’ in this respect (which fits with his banking world). You can substitute any word you wish so long as it retains the point.

3. The detail for this post comes mainly from Jan Wallander’s book ‘Decentralisation – Why and How to make it work: The Handelsbanken Way’. It is an interesting (and relatively short) read.

I found this book a bit hard to get hold of. I got mine shipped from Sweden…though I had a little mishap of accidently procuring the Swedish language version – sadly, not much use to me and my limited linguistic skills. I happily amended my order to the English version.

4. ‘Within a community’: The conventional public sector model is to have a huge number of branches within a given community – one for each central government department, one for each separate NGO, etc. etc. They are (virtually always) at cross purposes with each other, causing vulnerable clients to have to adopt the inappropriate (and unacceptable) position of trying to ‘project manage’ themselves through the malaise.

The need is to replace this controlling central-ness (lots of central Octopuses with overlapping local tentacles) with meaningful local teams. This is a huge subject in itself, and worthy of another post (or a series of).

Part 1: Autonomy – Autonomy Support – Autonomy Enabling

giantknave Brain Farts , , , , , , , , ,

I wrote the 1st of a 2-part post some time ago, but never published it because I didn’t get around to completing part 2. I’m finally publishing part 1 now…because it might ‘make me’ finish the 2nd part.

I’ve been on a book-reading1 and work-experiential journey over many years and have reached a place that I’d like to ‘set out clearly in writing’ (for myself, and others) …and yet I’ve struggled to do this so far (a.k.a writer’s block).

I’ve been talking ‘about’ (but not been writing) this post for months!

So here goes…

Some context:

I (and hordes of other people) work in, around, and across large, complex people-centred systems. Think government departments, NGO’s and so on who are trying to help thousands of clients2 better live their lives.

Such systems are usually highly bureaucratic, operating in an (attempted) ‘control system’ way.

They can be helped to see the problematic performance that this system design provides to their clients, but they (we) can then struggle with moving to a different way of thinking and being.

The aim of this post (‘Part 1’) is to set out the ‘what and why’ of moving to a different paradigm, where ‘control’ is replaced by ‘autonomy’. ‘Part 2’ will aim at discussing the rather important topic of a ‘how’ to get there.

As the title and opening image suggest, there’s an ‘autonomy’ chain (from the client, all the way through the system)

What follows is broken up into:

  • Link 1 (of the chain): Autonomy;
  • Link 2: Autonomy support; and
  • Link 3: Autonomy enabling.

Link 1: Autonomy – People-centred…what does that mean?

I used the term ‘people-centred systems’3 above and I should set out what is being meant, and its relevance.

(As usual) I am writing in respect of service systems (as distinct from manufacturing).

Service systems themselves have been broken into different archetypes. I’ve read various ways of setting these out4, but here’s a simplified version (of 3 archetypes) from me:

  • Archetype 1: Transactional where, given the nature of a customer’s demand (a.k.a. need), it should be able to be resolved in a single interaction.

Example: If I contact my home entertainment provider because I want to change aspects of my plan (e.g. gain access to a movie channel), then I should be able to achieve this by the end of that one interaction.

Note: this may or may not happen in the one interaction, depending on how they have designed their system to respond! It might turn into a right dog’s dinner!

  • Archetype 2: Process where, due to the nature of what the customer/ client needs, it could not be delivered in a single interaction. Instead it needs to enter a process.

Obvious example: If I contact a builder because I want an extension to my house, this can’t be delivered within an initial interaction. Instead, a bunch of (often well understood) stuff now needs to happen (and hopefully flow).

I should reach a point at which the process is completed: I’ve got what I wanted (hopefully efficiently and to a high quality) and I can go on my way.

  • Archetype 3: People-centred (or Relational) where the nature of the need is about the person (client) themselves. This is far more complex than a transaction or a process. All our social systems fit here.

Each person (client) is unique and recognising this is of fundamental importance if we are to help – we can’t just treat it like ‘a transaction’ or ‘put them through a ‘process’.

To help the person, we will need to achieve engagement with them (reaching and sustaining a trusting relationship), and then understand and support them through a (dynamic and evolving) journey in which they have the most important role to play.

The other word used here is relational, because THE important variable for successful change is the relationship between the person and their helper(s).

“At the heart of this new way of working is human connection. When people feel supported by strong human relationships, change happens. And when we design new systems that make this sort of collaboration and connection feel simple and easy, people want to join in. This is not surprising.” (Hillary Cottam, ‘Radical Help’)

The big mistake that many social systems make is that they are designed along transactional and process lines by a (centralised) control system. A relational response can’t be achieved transaction-ally. Sure, such a system might be able to ‘smash out’ transactions…but it will most likely keep its clients dependent upon it, with repeat visits and, sadly, relapses and deterioration.

So, I’ve tried to explain ‘people-centred’ and you might now think ‘er, okay, so what?’

Well, if we are talking about people, and them achieving meaningful and sustained change, then we need to understand the fundamental importance of self-determination (a.k.a autonomy).

People achieve true change when they choose to do so for themselves.

We end up with the (hopefully) rather obvious point that the best way to help another person is via autonomy support (with this concept set out in detail in a previous post), which can only happen via strong human relationships.

Link 2: Autonomy Support – Variety…and how best to handle it

So, we’ve got:

  • the uniqueness of every client and their contextual and dynamic situation;
  • each client (a human being) needing to ‘go there for themselves’; and
  • helpers (also human beings!) that need to travel alongside them, without judgement or attempts at control.

Looking at this, we can see that we have enormous variety in a people-centred system (in clients, in helpers, in ‘client–helper’ relationships). So, what’s the best way to handle this?

Turning to W. Ross Ashby’s Law of requisite variety to assist…this is explored by Gerrit Broekstra in his book ‘Building high-performance, high-trust organisations’:

“Variety is a measure of complexity and refers to the number of possible states of a system.

[There is a] colossal proliferation of variety in dynamic systems.

Applied to organisations in their complex environments, only matching the variety of the organisation can soak up the complexity of the situation with which it is confronted. No hordes of consultants, planning committees, surveys or management training courses can do the trick.

[The most effective way to deal with such variety is to] be organised on the basis of the principle of self-organisation….as exemplified in autonomous groups.”

Or, to put it into a simple statement:

          “Only variety absorbs variety.” [Stafford Beer]

I recognise that the above reads as rather theoretical. Here’s a practical example:

Take any large social system. It is usually trying to serve a large geographic area (perhaps even a small country).

A central control system attempts to:

  • monitor what’s going on across the whole (ref. KPI’s);
  • judge from afar (ref. targets, comparisons);
  • design ‘solutions’ (ref. departments/ functions/ specialist roles, products & services, detailed policies and procedures…)

…and then push these out to all (to be ‘standardised’) and then…‘rinse and repeat’.

Not only does this fail to absorb client variety, it often (usually) frustrates it!

The opposite would be where each ‘locality’ functions, by design, as an autonomous unit – a group of peers who (are enabled to) take responsibility for the wellbeing of their local cohort of clients and helping them with their unique needs.

“Self-managed teams are far more productive than any other form of organising. There is a clear correlation between participation and productivity.” (Margaret Wheatley)

This creates that glorious (yet rare) combination of:

  • each client feeling that someone actually cares about them;
  • each front-line worker feeling like they have a meaningful job; and
  • each unique client situation (variety) being understood, with bespoke support provided (variety absorbing variety)

“Idleness, indifference and irresponsibility are healthy responses to absurd work…if you want someone to do a good job, give them a good job to do” (Frederick Herzberg)

We’ve now added the concept of autonomous units to deciding how best to help and support a cohort of autonomous clients.

So, if autonomous units are what’s required, where does that leave the concept of ‘organisation’?

Link 3: Autonomy enabling – Organisation…what should it be for?

This post is not suggesting that such autonomous units can, or even should, work on their own. It is saying that they pull for help from central support functions when they need to.

The (paradigm-shifting-ly) huge difference is that the front-line autonomous unit is the one leading what they need help with, rather than being dictated to.

They also decide whether any central support provided is actually helpful, and adopt or disregard it accordingly.

The onus is on the enabling centre to provide valuable support (as judged by those helping clients).

“The logical consequences of this way of viewing organisations, with its abundance of freedom of choice for its purposeful parts, unequivocally leads:

    • on the one hand, to the autonomy of the operating units and the people contained in it as purposeful entities; and
    • on the other hand, the remaining ‘upper part’ of the high-variety organisation as an enabling entity, actively involved in furthering the development of the autonomous unit and their people.” (Gerrit Broekstra)

A sense-check on the purpose of ‘organisation’:

“Hierarchical systems evolve from the bottom up. The purpose of the upper layers of the hierarchy is to serve the purposes of the lower layers…

The original purpose of a hierarchy is always to help its originating systems do their jobs better…

This is something …that…a greatly articulated hierarchy can easily forget.

Many systems are not meeting their goals because of malfunctioning hierarchies.” (Donnella Meadows)

Right, so we’ve worked our way through the concepts of self-determining clients (tick), autonomous units (tick) and an enabling (as opposed to controlling) centre (tick), but if this is sooo good, why doesn’t this eventuate?

That’s the subject of Part 2: the problem of changing from ‘this’ to ‘that’ [Link to Part 2]

Addendum: Towards a picture…

If we’d like to ‘draw a picture’ of what the fundamentals of an effective people-centred system might look like, whilst remembering that “all models are wrong, some are useful” (George Box),

Then here’s an attempt from me…

I’ll build it up in three stages:

Picture 1 – The core:

1. The client (in green) is at the centre, along with the principle of self-determination (a.k.a. autonomy). It is about helping them on their journey, not (attempts at) pushing them through ours.

2. Their family/ Whānau and friends (in yellow) surround them, in recognition that:

  • no one is an island. The client exists within a social structure (for good, and sometimes, not so good)
  • to effectively support a client, we need to understand, contextualise and appropriately leverage their social network. This includes helping the client do the same. This might be the most powerful thing we can do.

3. The helper(s) (in blue) directly working with the client (‘value creating’). Their aim should be to create, and retain, a ‘working alliance’, in which there is mutual trust and respect. This will be about:

  • active/ reflective listening (truly seeing the world from the client’s point of view); and then
  • supporting the client through their journey, including resolving their transactional and process needs along the way

In doing this, we shouldn’t expect that helper(s) need to know everything. We would hope that they can easily ‘pull’ knowledge (from a useful source) as and when they need it. Note the deliberate choice of the word knowledge, rather than ‘policies and procedures’.

Picture 2 – adding support ‘in the work’:

We’ve now added a support ring around the core.

4. Local support (also in blue) that support the value creating workers in helping clients. Their aim is to be ‘in the work’, to observe the work as it happens, to be pulled ‘live’ as and when the value creating worker hits an obstacle.

 Such a pull may result in:

    • developing the capability of the helper (‘in the moment’ experiential learning); and/or
    • capturing evidence of obstacles outside of their control

5. Accessible help (in red) which represent those things that naturally sit outside the capability and/or capacity of local support.

It (deliberately) isn’t worded ‘available products and services’ because this isn’t the nub of what’s required. Sure, there might be a set of services available to be utilised, but it is up to the local team (with the client) to determine what to pull for, and when.

Further, the client isn’t being ‘referred over to’ the help. The help is being pulled into the client and their value creating worker…. who will also consider whether it is working for them or not.

Picture 3 – adding the enablement of those in the work:

6. Central roles (in purple) whose whole purpose is to enable those working with clients. They don’t attempt to control. Rather, they enable when they are pulled for help in removing obstacles in the way. This is a drastic change to the conventional central function.

The locus of control is with those directly helping the client.

An enabling response might include a focus on developing any of:

    • the knowledge available;
    • the tools (such as financial and technology support);
    • the accessible help (such as adding/ linking to new services, making them more flexible,…);
    • the capability of those helping clients (and those supporting this).

A note re. ‘Delivery engine’: Many central functions of large organisations are working hard to become ‘Agile’. I’d concur that it is important to work on ‘how’ to deliver (efficiency). However, of more importance is ‘what’ to deliver (effectiveness).

So, whilst we would want an ‘Agile’ delivery engine, we want it to be delivering to enable (from pulls), not to control (via pushes).

Being ‘Agile’ might be necessary….but it’s by no means sufficient.

And this completes an ‘autonomy – autonomy support – autonomy enabling’ model.

Or (if you are a Kiwi who watches the NZ comedy quiz programme ‘7 Days’) …”and this is my picture”

[Link to Part 2]

Footnotes

1. A book reading journey for this post – for those that are interested:

  • I first came across the idea of different system types and the transformational importance of matching the appropriate organisational model from reading a brilliant Russell Ackoff essay in his book ‘Ackoff’s Best: His Classic Writings on Management’. If you’d like to understand (or remind yourself of) this, then I wrote a post some years back: “Oh, so that’s why command and control doesn’t work very well!” Today’s post picks up where the ‘what might that [social] model look like?’ question posed at the end left off.
  • Some years back I read Hope and Fraser’s 2003 book ‘Beyond Budgeting’, which gave me an initial introduction to Jan Wallander and his wonderful thinking in respect of how best to run a large service system for the good of clients, and employees. If you’d like a bit of an introduction to Wallander and his different thinking then I wrote about him here: Back to that ‘Profit Sharing’ Nirvana
  • This book led me to Gerrit Broekstra’s 2014 book titled ‘Building high-performance, high-trust organisations: Decentralisation 2.0’. This gets into some meaty understanding of the ‘what and why’ of a different model. Broekstra refers to the model as an ‘autonomy and enabling’ paradigm.
  • I was on a parallel path when I read Edward Deci’s ‘Why we do what we do’, which introduced me to self-determination theory and the hugely important concept of autonomy support.
  • I had original come across Deci from reading Alfie Kohn’s ‘Punished by Rewards’.
  • I then managed to get hold of Jan Wallander’s 2003 book ‘Decentralisation – why and how to make it work’, which nicely got me into the nuts and bolts of how he successfully led the change of a service system from centrally controlled to autonomous units. [This is the subject of my ‘Part 2’ post]
  • I also read Hilary Cottam’s 2018 book ‘Radical’ which cemented my thinking in respect of the need to create relational (rather than transactional) systems when we are trying to help people help themselves.
  • I then read Miller and Rollnick’s book on Motivational Interviewing (3rd Edition) which also connects extremely well.
  • And Motivational interviewing fits well with Gerard Egan’s book ‘The Skilled Helper’.

And this all comes together into an ‘Autonomy – Autonomy support – Autonomy enabling’ logic. Now you know why I was struggling to put something into a single post.

2. Clients, not customers: See footnote on my previous post for a comment on the difference

3. Person-centred system: I believe that the root of this phrase is Carl Roger’s person-centred approach.

4. Service system archetypes: Stuart Corrigan’s 2012 little book ‘The need for change’ was the first time I read about service archetypes. This thinking has been refined/ matured by others since then. Also reference Hillary Cottam and her setting out relational systems.

5. Re. people-centred/ relational: Amusingly (to me), many ‘for profit’ consumer businesses are desperate to be relational with us…even though they are, by their nature, transactional or process system archetypes. They want to forge a relationship with us (their customers) and yet we don’t want it! Think about that communications/ entertainment provider – they’ve often invested millions in expensive ‘Customer Relationship Management’ (CRM) technology that remembers your birthday!

6. Systems within systems: A tricky thing about people-centred systems is that they are likely to involve transactional and process sub-sets within. The important bit (I think) is to realise that the people-centred (relational) system is the master, and transactions and processes are its servant…. they aren’t separate.

A social system example: Let’s imagine that I am working relationally with a client on their journey.

  • Whilst doing so, they might move address – it should (probably) be a single and simple transaction to handle this change in circumstances.
  • Further, my relational work might lead to the client wanting help to, say, gain a qualification – this should be a smooth process to set up and then help them to achieve.

Both the transaction and the process sit within the relational journey of helping them better lead their lives (whatever that means for them). Here’s a diagram that hopefully visualises these words:

 

The source of an idea: Front Office – Back Office

giantknave Brain Farts , , , , ,

An officeI’ve read a number of John Seddon’s books over the years and they are ‘sprinkled’ with critiques of a range of conventional management ‘fads and fashions’. One of his key critiques is of a particular 1978 HBR article written by a Richard B. Chase, titled ‘Where does the customer fit in a service operation?’

The article title sounds relatively innocuous, but Seddon puts it forward as having been a catalyst for the splitting up of service systems into ‘front office – back office’ functions…because it will (according to Chase) make them much more efficient.

Now, whilst (I believe that) I’ve understood Seddon’s critique of the splitting up of service systems into a myriad of (supposedly) specialised components…and the hugely damaging sub-optimisation that this has caused1, I was never quite sure as to the level of ‘blame’2 that could be levelled at Chase’s article – mainly because I hadn’t read it.

…so, as chance would have it, I’ve just managed to get hold of it. And, wow, yep, it was quite illuminating. I thought that I’d write this post to ‘get behind’ the HBR article title and pull out the bones of what Chase was saying. Here goes:

In the first paragraph…

So I read the following in the very first paragraph of the article:

“…the less direct contact the customer has with the service system, the greater the potential of the system to operate at peak efficiency…”

On its own this quote reads very badly. My hackles are raised instantly, but I hold my nerve and carry on – perhaps I need to read it in context…so I take a deep breath and carry on…

Chase goes on to offer a ‘classification of service systems’ according to the extent of required ‘customer contact’ in ‘creation of the service’.

Chase defines:

  • ‘customer contact’ as the “physical presence of the customer in the system”; and
  • ‘creation of the service’ as “the work process that is entailed in providing the service itself”

He puts forward a table showing high contact services at the top (health care, public transportation, restaurants, schools….), low contact at the bottom (manufacturing) and mixed services in-between (banks, post offices,…). So far, so what.

service contact spectrum

He states that service systems with high customer contact are more difficult to control. Why? Because the customer can affect the demand – e.g. the time it takes, the exact nature of what’s being required, and their particular view on what defines quality.

I think that Seddon would wholeheartedly agree with these points regarding variety within customer demand (Seddon would say that “the customer comes in customer shaped”3). The difference between Chase and Seddon is in their polar opposite thinking of what this lack of control should lead on to.

Where did Chase’s article take it?

Chase went on to state what he considered were the ‘implications for management’:

“…a distinction should be made between high-contact and low-contact elements of a service system. This can be done by a separation of functions: all high-contact activities should be performed by one group of people, all low-contact activities by another. Such an adjustment minimises the influence of the customer on the production process and provides opportunities to achieve efficiency…”

In short, Chase is about breaking up the system (de-coupling the supposed ‘front’ and ‘back’) to make its components more efficient!

Mmmm, any systems thinking giant (or apprentice), even without knowing the details, might conclude that this isn’t going to end well.

Developing the idea…

developing an ideaChase then develops his proposed treatment by asking a set of questions and providing answers.

Chase asks about ‘gearing your operating procedures to your system’:

“Obviously, paying service workers according to the number of customers served tends to speed up service in the high-contact system. However…if the customer feels rushed…he is likely to be dissatisfied with the organisation.

Further, it makes little sense for a seller of any service that can be at all customised to measure system effectiveness in terms of total number of customer served when in fact one should be giving more leisurely attention to a small number of ‘big spenders’.”

Wow, there’s a lot to unpack within this lot!

  • The idea of ‘speeding up’ service by the use of incentives completely ignores the dysfunctional behaviour that this may cause, the failure demand likely to arise and the re-work to be performed. It is clear component-level logic at the expense of the system;
  • I have always hated the idea that a service organisation should smooch with the ‘big spenders’ (and thereby demote the rest as 2nd…and even 3rd class customers) so as to milk them of their cash!

The mind-set of the above is completely ‘inside-out’: the customer is merely a host to bleed money from. The attitude being portrayed is ‘what can we (the organisation) do to you?’ rather than ‘what do you need?’

Chase asks ‘can you realign your operations to reduce unnecessary direct customer service?’

“Managers have long recognised the desirability of having ‘attractive’ personnel greet the public…while being more concerned with technical skills on the part of those individuals removed from customer contact…”

I’ve got visions of the ‘ugly people’ being hidden in the back office!

I guess that we should make allowances for the fact that he wrote this back in 1978 (a different world?) but, again, he’s trying to optimise components rather than improve (and remove) inter-dependencies between them.

Chase asks ‘can you take advantage of the efficiencies offered by low-contact operations?’

“Can you apply the production management concepts of batch scheduling, forecasting, inventory control, work measurement and simplification to back-office operations?…”

His suggestions seem laughable now.

Essentially, he is proposing the techniques that manufacturing used ‘back then’ to be applied to service ‘back offices’….and yet just about all of these manufacturing methods would now be seen as poor practise!

Just go into a well-run factory today4 and see the pulling (not pushed by forecasting) of units of work (not batches) through flow (not requiring inventory) on a production line able to handle variety (not simple), using measures against purpose (not narrow activity measurement)

…and you’ll also see those same manufacturing workers trying to get as close as possible to their customers so as to understand them and what they need.

Chase asks ‘can you enhance the customer contact you do provide?’

“If the low-contact portion of a worker’s job can be shifted to a different work force [i.e. a back office], then the opportunity exists to focus that worker’s efforts on critical interpersonal relations aspects.”

Boom! This gets to the nub of the problem – Chase misses the monumentally important point that interpersonal relationships are (worse than) useless if the ‘front of house’ worker can’t actually help the customer with their need.

In short: ‘I can smile sweetly, look good and even say nice things to you…but, sorry, I can’t help you with your need…I’ll just have to pass that on to someone else and hope for the best…but I’ll do so with a really great smile 🙂 ’

Not much customer satisfaction in that!

Chase asks ‘can you relocate parts of your service operations to lower your facility costs?’

“Can you shift back-room operations to lower rent districts…or get out of the contact facilities business entirely?”

And so we get to the eventual end game of this logic – outsourcing of the back office…because it’s (ahem) got no connection whatsoever with the customer anymore. Wonderful!

Not content with creating the unnecessary ‘front-office back-office’ interdependencies, the final nail in the coffin is to make these relationships even harder to handle by splitting up the location and ownership structure.

As Donella Meadows wrote: “Changing interconnections in a system can change it dramatically.”

To conclude:

variety of shoesYep, I see why Seddon has such a downer on this 1978 HBR article…and, sadly, I can also see that many (most?) service organisations bought it ‘hook, line and sinker’.

Rather than leaving it on this depressing note, I should take us back to a Seddon quote:

“Service differs from Manufacturing. There is, inherently, more variety in customer demand…

…in service organisations, the problem is how to design the system to absorb variety [rather than frustrate it]” (Seddon)

If you want to understand what is meant by absorbing variety…then here’s a post I wrote earlier: “You keep saying that…but what does it mean?!”

…and I’ll write another post (to follow this one) that delves further into ‘Front Office/ Back Office’ and what a healthy alternative could look like.

Footnotes:

1. Seddon is standing on Deming’s shoulders in this respect.

“If the various components of an organisation are all optimised, the organisation will not be…” (Deming)

2. Regarding ‘Blame’: I’m referring to the article, not Richard B. Chase. I don’t know the man. 1978 was a long time ago – I suppose that he may think quite differently now.

3. Customer shaped: Seddon credits Taguchi with observing that we must first understand exactly what a customer wants (their nominal value) and only then can we aim at perfection.

 4. A well run factory: You know what I’m going to write next don’t you….yep, the ‘T’ word: You could understand what Toyota does 🙂

“You keep saying that…but what does it mean?!”

giantknave Brain Farts , , ,

what-does-it-meanSo I recently had a most excellent conversation with a comrade.

I’d written some guff in the usual way and he wanted to push back on it…great! I need to be challenged on my thinking, particularly the more I verbalise (and therefore risk believing) it.

His push back:

I’d used the ‘absorb variety’ [in customer demand] phrase yet again…and he (quite rightly) said “but what does it mean?”

He went on to say that, whilst he understands and agrees with a great deal of what I write about, he doesn’t fully agree with this bit. He has reservations.

So we got into a discussion about his critique, which goes something like this:

“I agree that we should be customer focused, but…‘absorb their variety’???

You can’t do anything for everybody….they’d start asking for the world…you’d go out of business! There have to be rules as to what we will or won’t do.”

He gave an example:

“If a customer asked you to fax them their documents [e.g. invoice, contract, policy…], surely you’d say no because this is such old technology and it doesn’t make sense for people to use it anymore.”

Yep, a very fair view point to hold…and an example to play with.

So, in discussing his critique, I expanded on what I mean when using the ‘absorb variety’ phrase. Here’s the gist of that conversation:

First, be clear as to what business you are in

Taking the “you can’t do anything for everybody” concern: I agree…which is why any business (and value stream within) should be clear up-front on its (true) purpose.

However, such a purpose should be written in terms of the customer and their need. This is important – it liberates the system from the ‘how’, rather than dictating method. It allows flexibility and experimentation.

Clarification: ‘liberating’ doesn’t mean allowing anything – it means a clear and unconstrained focus on the purpose (the ‘why’ for the system in question). If you don’t have a clear aim then you don’t have a system!

Understanding the customer: who they are, what they need.

fredOkay, so the purpose is set, but each customer that comes before us is different (whether we like this or not). The generic purpose may be the same, but what works best for each unique customer and their specific situation will have nuances.

On ‘unique’: A service organisation (or value stream within) may serve many customers, but a customer only buys one service – their need. We need to see the world through their eyes.

“The customer comes in customer-shaped” (John Seddon)

Let’s take the scenario of an insurer handling a house burglary, with some contents stolen and property damage from the break-in.

The customer purpose of ‘help me recover from my loss’ is generic yet focused…it clearly narrows down what the value stream is about.

But, at the risk of stereotyping, here’s some potential customer nuances:

  • Fred1 is an old person that lives at home alone. He’s very upset and concerned about his security going forward;
  • Hilary is a really busy person and just wants the repair work done to a high quality, with little involvement required from her;
  • Manuel2 doesn’t speak English very well;
  • Theresa is currently away from the country (a neighbour notified the police);
  • ….and the variety goes on and on and on3

Each of these customers needs to recover from their loss…but the specifics of what matters differ and these can be VERY important to them.

If we (are ‘allowed’ by our management system4 to) make the effort up-front to (genuinely) understand the customer and their specific unit of demand, and then work out how best to meet their needs then they are going to be very happy…and so are we…AND we will handle their need efficiently.

If we don’t understand them and, instead, try to force them into a transaction orientated strait-jacket, we can expect:

…adding significant and un-necessary costs and damaging our reputation.  Not a great place to work either!

Do what is ‘reasonable’ for them

Right, so you may agree that we should understand a customer and their reality…but I still hear the critique that we can’t do anything and everything for them, even if it could be argued as fitting within the purpose of the value stream in question.

So let’s consider the ‘what’s reasonable?’ question. ‘Reasonable’ is judged by society, NOT by your current constraints. Just because your current system conditions5 mean that you can’t do it doesn’t make it unreasonable!

computer-says-noA test: if you (were allowed to actually) listen to the customer, understand the sense in their situation and the reasonableness of their need…but respond with “computer says no” (or such like) then your value stream isn’t designed to absorb variety.

And so we get to what it means to design a system that can absorb variety.

It doesn’t mean that we design a hugely complicated system that tries to predict every eventuality and respond to it. This would be impossible and a huge waste.

It means to design a system that is flexible and focuses on flow, not scale. This will be achieved by putting the power in the hands of the front-line worker, whilst providing them with, and allowing them to pull, what they need to satisfy each customer and their nominal value. This is the opposite of front-line ‘order takers’ coupled to back-office specialised transaction-oriented sweat shops.

How does that ‘fax request’ example sit with the above? Well, on its own, I don’t know…and that’s the point! I’d like to know why the customer wants it by fax.

  • perhaps they aren’t in their normal environment (e.g. they are on holiday in the middle of nowhere) and the only thing available to them is some old fax machine;
  • perhaps they didn’t know that we can now email them something;
  • perhaps they don’t (currently) trust other forms of communication…and we’d do well to understand why this is so;
  • perhaps, perhaps perhaps…

Each scenario is worthy of us understanding them, and trying to be reasonably flexible.

Forget all that!

take-a-lookOf course the above means virtually nothing.

You’d need to see the variety in your system for yourself to believe, and understand, it…and the way to do that would be to listen and see how your current system DOESN’T absorb variety.

How would you do that? Well, from listening to the customer:

  • in every unit of failure demand;
  • within each formal complaint made to you;
  • …and from every informal criticism made ‘about you’ (such as on social media)

I’ve got absolutely no idea what you would find! But do you?

 The funny thing is…

…if we allow front-line/ value-creating workers to truly care about, and serve each customer – as individuals – in the absence of ‘management controls’ that constrain this intent (e.g. activity targets) then:

  • the ‘work’ becomes truly inspiring for the workers, ‘we’ (the workers) gain a clear purpose with which we can personally agree with and passionately get behind;
  • we become engaged in wanting to work together to improve how we satisfy demand, for the good of current and future customers; and
  • the ‘management controls’ aren’t needed!

If I asked you, as a human being:

  • do you primarily care about, say, a ‘7 day turn-around target’? (other than to please management/ get a bonus)

vs.

  • do you really want to help Fred (or Hilary, Manuel, Theresa…) resolve their specific needs and get back on with their lives?

…how would you answer?

We need to move away from what makes sense to the attempted industrial production of service delivery to what makes sense in the real worlds of the likes of Fred.

Footnotes

1. Fred: The picture of Fred comes from a most excellent blog post written by Think Purpose some time ago. This post really nicely explains about the importance of understanding customer variety in a health care setting.

2. Manuel: A tribute to the late Andrew Sach (a.k.a Manuel from Fawlty Towers) who died recently. He wasn’t very good at English…

que

3. Variety in service demand: I’ve previously written about Professor Frances Frei’s classification of five types of variety in service demand and, taken together, they highlight the lottery within the units of demand that a service agent is asked to handle.

4. Allowed to: This is not a criticism of front-line workers. Most (if not all) start by wanting to truly help their customers. It is the design of the system that they work within that frustrates (and even prevents) them from doing so.

You show me a bunch of employees and I’ll show you the same bunch that could do awesome things. Whether they do so depends!

5. System Conditions may include structures, policies, procedures, measures, technology, competencies…

6. Bespoke vs. Commoditisation: It has been put to me that there are two types of service offerings. Implied within this is that there are two distinct customer segments: One that wants little or no involvement for a low cost and another that wants, and is willing and able to pay for, a bespoke service.

This is, for me, far too simplistic and misunderstands customer variety. Staying with the world of insurance…

A single customer might want low involvement when managing their risk (taking out a policy and paying for it, say, ‘online’) but to deal with a human if they need help recovering from a loss (i.e. at claim time).

That same customer may switch between wanting low involvement and the human touch even within a value stream – e.g. happy with low involvement car insurance but wants a human when it comes to their house insurance.

…and even within a given unit of demand, a customer may be happy with low involvement (say registering a claim)…but want the option of a human conversation if certain (unpredictable) scenarios develop.

The point is that we shouldn’t attempt to pigeon-hole customers. We should aim to provide what they need, when they need it…and they will love us for it!

7. Automation: On reading the above, some of you may retort with “Nice ideas…but you’re behind the times ‘Granddad’ – the world has moved to Artificial Intelligence and Robotics”. I wrote about that a bit back: Dilbert says… lets automate everything!

Chapter 1: A long time ago in a land far, far away…

giantknave Brain Farts , , ,

henry-ford…well, about 100 years ago in America…there was a visionary man who led society through a monumental technological disruption – his name was Henry Ford – and he and his organisation changed the world through his desire to ‘democratise the automobile’.

His success in putting the internal combustion engine on wheels devastated the ‘technology’ it replaced – the horse – and its many related industries (stables, horse feed and bedding, saddleries and tack shops, blacksmiths and farriers,….) although, on the plus side, it dissolved the huge problem of ever increasing amounts of horse manure pilling up on city streets!

We talk about modern technological disruptions, like the mobile phone or internet, happening quickly (in years) but we should reflect that profound technological shifts can occur pretty swiftly, whatever the age.

I imagine that once one ape invented the spear, then the rest changed ‘technology’ quicker than you can say “I wonder what those long pointy things are that I can see hurtling through the air towards us?”

The change from the horse to the car was pretty dramatic too:

horses-and-cars

Okay, so Henry Ford was on the right side of a technological disruption…but, whilst this was necessary, it was much more than luck that made the Ford Motor Co. such a success2.

So what were Henry’s core philosophies, and what ‘gems’ might we learn from him in this modern time of technological disruptions? These were his foundations:

  • ‘Service power’;
  • The ‘Wage motive’; and
  • ‘Money power’.

Service Power:

gandhi-quoteHenry was fanatically clear that a business is only there because of the people that buy its products and services. Without them it wouldn’t exist and, as such, the customer (the public, society) is the point. Full Stop!

“Since the public makes a business, the primary obligation of business is to the public.”

(He nicely clarified that “Those who work for and with the business are part of this public.”)

This is so much more than the trendy “customer centric” mantra, in which we are usually shown a lovely circle with the customer conveniently arranged in the middle BUT, and this is the problem, all the other ‘conventional thinking’ management orthodoxy is retained around the outside3.

And to make it absolutely concrete in your mind as to what Ford really meant, he explained as follows:

“The true course of business is to follow the fortunes and pursue the service of those who had faith in it from the beginning – the public.

  • If there is any saving in manufacturing cost, let it go to the public;
  • If there is any increase in profits, let it be shared with the public in lowered prices;
  • If there is any improvement [in the quality of the service] let it be made without question, for whatever the capital cost, it was first the public that supplied the capital.

That is the true course for good business to steer, and it is good business, for there is no better partnership a business can enter than a partnership of service with the people.

It is far safer, far more durable and more profitable than partnership with a money power.”

Everything Ford did was with the customer at heart i.e could he provide the public with a cheaper car and yet also make it better than the ones he made yesterday? If he could do this, he knew that customer demand would continue to rise and profitability would be the least of his worries. ‘Customer, customer, customer’ provides growth and profitability – THAT WAY AROUND.

To make it cheaper and better for the customer, Henry was obsessed with constantly studying, experimenting and improving the process – through fanatical cleanliness and maintenance, ever deeper removal of waste (transportation, movement, scrap…), re-use of anything and everything, in-sourcing wherever possible, constant technological breakthroughs, decentralisation to where the work should be…and so on4.

And Henry didn’t just think about his automobile customers, he thought about the whole system (society) because he realised that it was all really one and the same thing. This led him into all sorts of interesting ventures that supported, and enabled, the core purpose.

In short: THE foundational ‘thing’ that made the Ford Motor Co. such a huge success was that Henry truly believed that his master was the public.

The Wage Motive:

your-greed-is-hurting-the-economyAnd so we move from customers to employees (the worker).

The ‘wage motive’ was Henry’s phrase for his philosophy that “one’s own employees ought to be one’s own best customers.” If the workers truly prosper then they will love, buy and advocate for the products (e.g. cars) they make…which will create an ever-improving product, a superb reputation and expanding customer demand…which enables the workers to prosper – and off we go round the circle.

He goes on to write that “If an employer does not share prosperity with those who make him prosperous, then pretty soon there will be no prosperity to share.”

Now, Henry was no Saint – he was a man of his times – but he wanted to do the right thing. Significantly, he learned from his early worker experiences and saw that the best, and only logical approach, was for his system to work with, and for, the worker, not against them.

He paid them high wages (far higher than they could receive elsewhere), provided regular employment (replacing the uncertainty of casual labour with steady work), reduced the standard working week to 8 hours for 5 days, insisted that Sunday was a day off for all, and provided them with excellent working and living conditions. Any worker that wanted more than manual repetitive work was given the chance to better themselves through training and increased responsibilities.

And finally, given that Turkeys don’t vote for Christmas, he was very clear that improvement was about bettering people and not about getting rid of people:

“Nobody with us ever thinks about improvement lessening the number of jobs, for we all know that exactly the contrary happens. We know that these improvements will lessen costs and therefore widen markets and make more jobs at higher wages.”

In fact, Henry got rid of (incentive driven) piece-work and created a profit sharing arrangement in the form of share ownership (more on this in Chapter 4)

Money Power:

And last, but nodead-moneyt least, to money. Over to Henry:

“There’s nothing to be said against the financier – the man who really understands the management of money and its place in life….but it is very different with the professional financier, who finances for the sake of financing and what he can get out of it in money, without a thought of the welfare of the people…

[Moneys] proper place [is] as one of the cogs in the wheel, not the wheel itself…

This is not to say that money and profits are not necessary in business. Business must be run at a profit, else it will die. But when anyone attempts to run a business solely for profit…then also the business must die, for it no longer has a reason for existence….

A business cannot serve both the public and the money power.

Money put into business as a lien on its assets is Dead money, its main purpose becomes the production of payments for the owners of that money. The service of the public [will] be secondary. If quality of goods jeopardizes these payments, then the quality is cut down. If full service cuts into the payments, then service is cut down. This kind of money does not serve business. It seeks to make business serve it.

Live money goes into the business to work and to share with the business. It is there to be used. It shares whatever losses there may be. It is asset to the last penny and never a liability.

Live money in a business is usually accompanied by the active labour of the man or men who put it there. Dead money is a sucker-plant….

Business that exists to feed profits to people who are not engaged, and never will be engaged in it, stands on a false basis.…Profits of business are due:

  • first, to the business itself as a serviceable instrument of humanity [i.e. to constantly improve the service to its customers], and then
  • to the people whose labour and contributions of energy make the business a going concern [i.e. its employees]…

The true course of business is to follow the fortunes and pursue the service of those who had faith in it from the beginning – the public…

The best defence any people can have against their control by mere money is a business system that is strong and healthy through rendering wholesome service to the community.

…and so I (and Henry) have set the scene as to what this ‘story’ is all about – customers, employees and money…and in particular, how do large floating (i.e. short-term thinking) shareholder owned organisations ‘fit’…and most importantly, (how) can their structure be altered to provide a foundation for a long term win/win/win for all?.

Update: Link backwards to Introduction and forwards to Chapter 2

Footnotes:

1. All of Henry Ford’s quotes above come from his 1926 book ‘Today and Tomorrow’.

2. Ford Success: Just in case you doubt this success (and accepting that money is a poor measure) Forbes estimates that, in today’s money, Henry Ford was worth around US$200 Billion….more than double anyone alive today.

3. Note to self: I’ve still got to write the post that slaughters the ‘Balanced Scorecard’ sacred cow! It’s been on my ‘to do’ list for far too long because other stuff keeps on popping up every day.

4. Toyota: If you’re a follower of Taiichi Ohno and, upon reading the above, think “Hang on, didn’t Toyota invent all that stuff?!”, here’s a rather nice quote to reflect upon:

“I met Taiichi Ohno on a Japanese study mission. When bombarded with questions from our group on what inspired his thinking, he just laughed and said he learned it all from Henry Ford’s book.” (Norman Bodek)

The River Rouge – a divergent legacy

giantknave Brain Farts , , , , ,

ford-model-t-1925-6I expect that you’ve heard of the industrialist Henry Ford (1863 – 1947), but what about his massive ‘River Rouge’ car plant?

If you had gone for a ‘factory visit’ in the late 1920s, what would you have noticed?

The Model T Production line1

Ford wanted to provide a car that the masses could afford to buy – to ‘democratise the automobile’. Enter the Ford Model T – a car designed to be easy to drive and easy to repair, with standard interchangeable parts.

…but it wasn’t just about the car’s design. It was about the design of how the car was made.

In 1906, Ford’s engineers did something different – they experimented with the physical layout of their manufacturing system. They arranged their manufacturing tools in the sequence of processing steps rather than the normal practise of by machine type. This seems ridiculously obvious now (hindsight is a wonderful thing!), and the result was considerably higher productivity. This innovation created a flow in the order of the work but, at this stage of the Ford story, each work step was still done on stationary tables and stands.

In 1913, they took the next breakthrough step: they experimented with the moving assembly line for a small section of the process and, after some fine-tuning, this increased productivity fourfold…..and so the engineers got to work spreading this method throughout the manufacturing value stream.

Ford was constantly reducing his costs, not by ‘cost-cutting’ but through a fanatical focus on creating flow. This was achieved by a combination of continuous (incremental) and breakthrough (step change) improvements…which enabled Ford to pass on these savings by consistently lowering the price of the Model T…which increased demand…which outstripped supply…which meant that ever further production innovations were required to keep up!

Highland ParkA great deal of the experimentation explained above was carried out at the purpose built Highland Park factory. It was six-stories high, with a railroad track running down a central atrium (pictured) and cranes lifting materials from the rail carriages up to balconies that opened to the appropriate floors on either side.

The basic pieces of the Model T started at the top floor and, through the use of chutes, conveyors and tubes between floors and the force of gravity, they made their way down through the various sub-assembly processes until they reached the ground floor final assembly conveyor….and then the completed car could ‘drive off the line’.

River RougeWhilst Highland Park was an amazing feat of engineering, it had its limitations – such as the central crane-way that was probably a huge bottleneck! Henry Ford went for one more innovative jump – he created an enormous horizontal factory complex called the River Rouge2. The site started with raw iron ore and materials and finished with completed automobiles. It had its own ship docks, power generation plant, blast furnaces and rolling mills – all arranged to achieve flow (I’ve added the basic flow over an aerial picture).

“The River Rouge Plant in 1925 produced about one vehicle per minute in a total lead time of about three days and nine hours from steel making to finished vehicle.” (Source: Henry Ford’s book ‘Today and Tomorrow’)

“…as long as it’s black”

You are probably familiar with the famous Henry Ford quote that ‘you can have any colour you like, as long as it’s black’. Today this sounds quaint, even humorous but there’s a seriously important point within: the manufacturing process was not designed to handle variety.

This hadn’t been a problem – people just wanted to be able to afford a car! – but rising standards of living and the birth of modern marketing gave rise to the ‘sophisticated consumer’. The new problem became offering ever wider variety (e.g. different colours, engine choices, trim levels, add-ons….) whilst retaining low-prices (and therefore mass-production costs).

And so to the crux of this post: Lots of organisations from all around America and the world went to the River Rouge to learn…but what did they see…and, therefore, what did they go away to do?

American Manufacturers post World War II.

So American organisations saw scale at the River Rouge.

Unfortunately, achieving the product variety now demanded by customers meant regularly stopping the production line to change tooling to be able to produce the different variants. Delivering variety was seriously hindering speed.

What to do? Here’s what they came up with:

  • Let’s interrupt the flow and decouple the stages within the production line, allowing the different processes to operate independently, and create buffer stocks between each process;
  • Let’s build each process to the largest scale feasible, and then run large batches per product variant through at the fastest rate possible and thus keep the number of changeovers required down to a minimum.
  • Let’s build warehouses to store all the resultant inventory (Work-in-process and finished goods)

This fundamentally changed production from workers producing for the next process step to workers merely producing for inventory. It became a case of ‘make lots and inspect later’. It was virtually a crime to stop the line3 – a disaster for quality!

Of course, once the main process steps were decoupled, their co-location didn’t matter so much. So rather than having a number of end-to-end manufacturing sites across America, the ‘logic’ could extend to…

  • Let’s centralise process steps into ‘centres of excellence’ so that we can increase scale even further! We might end up with, say, a massive steel works in one city, huge sub-assemblies in another city and a mega final assembly yet somewhere else.

…and the above ‘solution’ to variety introduced massive wastes in the forms of transportation across sites; inventory and its motion as it is constantly transferred in and out of the warehouse; over-production and obsolescence; defects through poor quality and rework…and on and on and on.

You could conclude that they ‘unlearned’ (even destroyed) what Henry Ford had achieved before variety had been introduced.

The above led American manufacturers to the hell of:

  • centralised planning, culminating in mega algorithms calculated by Manufacturing Resource Planning (MRP ii) computer applications, producing theoretical answers far from reality; and
  • ‘management by results’ using managerial accounting data (unit costs, rates of return, targets, budgets,…) to command and control the work.

This approach, even though it was hugely wasteful, proved profitable until the 1970s…until domestic demand became satiated and globalisation opened up the market to other manufacturers. Things suddenly became rather competitive….

Over in Japan

The Japanese, and Toyota in particular, saw flow at the River Rouge.

Taiichi Ohno (Toyota) realised that flow was the important bit: “ [they] observed that Ford’s plant conserved resources, by having processes linked in a continuous chain and by running slowly enough so that people could stop and fix errors when they occurred.”  (Johnson4)

Japan, unlike America, did not have the luxury of abundant resources after World War II. They couldn’t afford to create huge factories or tie up money in inventory…so they had to find a different way – to do a lot with a little.

Taiichi Ohno came to the conclusion that variety and flow had to go together i.e. “a system where material and work flowed continuously, one order at a time” (Johnson).

This created some clear challenges to work on:

  • rather than simply accepting that machine changeovers took time, Ohno set his workers the challenge of continuously reducing set up and change-over times; and
  • rather than running high-volume batches per variant, Ohno empowered each worker to design and control the steps they performed so that they could perform different steps on each unit that passed through them

In short, he set his people a huge visionary challenge, of working together as a system to think about the incremental, and sometimes giant, steps they could take to handle variety ‘in the line’.

Rather than centralised planning with standardised work dictated to them, the workers were empowered, and encouraged, to think for themselves, to deal with what was in front of them, to experiment and to innovate….and to share what they had learned.

And, wow, they came up with some fabulous techniques such as ‘Single-Minute Exchange of Dies’ (SMED), ‘pull’ using kanban, product supermarkets, ‘stop the line’ using andon cords, visual management, machine ‘right sizing’…and on and on.

I could write about each of these…but I’m not going to (at least not now). The point is not the brilliant innovations themselves. It is the clear and permanent challenges that were set and the constant progress towards them.

You may copy ALL of Toyota’s techniques but they (and other like-minded organisations) will still leave you far behind. Why? Because, whilst you are attempting to copy them they are racing yet further ahead. Indeed, what you copy (even if you ‘get’ the why) may be an out-dated technique before you go live! (This is to compare a static vs. dynamic environment)

What about service?

The Western (?) ‘solution’ for service organisations has, sadly, been virtually the same – scale: to standardise, specialise, centralise and ‘crank up the volume’.

Yet the challenge of handling customer variety is so much bigger: variety for service organisations is virtually infinite – it’s different per customer and, even for a given customer, it differs as their circumstances change.

So should we just pick up the ‘Toyota tool kit’ and get implementing? No. The techniques to meet the challenge will differ. Service is NOT manufacturing.

But can we learn from Toyota? Most certainly – but this must be at the deepest ‘beliefs and behaviours’ level.

The core message from the above is that service organisations should design their system such that the front line are allowed, and enabled, to absorb variety in customer demand.

If you run a service organisation and you have set up:

  • a front office ‘order taking’ function to categorise demand (which can only be based on the limited information available to them), and break it down into standard ‘work objects’ from an allowable catalogue of variants;
  • a ‘workforce management’ function to: prioritise and allocate (i.e. push) these work objects into ‘work queues’, usually by temporal batches (e.g. by day/ shift or weekly);
  • multiple specialised back office silos to churn through their allocated work, ‘motivated’ by activity targets (and incentives) regarding volumes of work performed; and, as a result
  • a complete confusion as to who is taking responsibility for resolving the customer need

…then you have seen scale, through commanding and controlling the work, as the ‘solution’.

If, however, you are on a journey towards:

  • equipping the people at the point of contact with the necessary expertise and freedom to respond to what most customers will predictably want (i.e. the bulk of demand); and
  • where more unusual demand hits the system, allowing and enabling these same ‘front of service’ people to ‘pull’ expertise to assist, yet retaining ownership of the service provision (thereby speeding up their rate of learning and widening their skills and knowledge)

…then you are on a similar track to Ohno: Pursuing flow for each unique customer demand, through revealing and harvesting the passion and pride within your workers.

Update: Here’s the link to an addendum to this post, which came about from a comment below.

Footnotes:

1. Sources: Much of the above comes from early chapters within three books:

  • ‘Relevance Regained’ by H. Thomas Johnson
  • ‘Profit Beyond Measure’ by H. Thomas Johnson
  • ‘Toyota Kata’ by Mike Rother

Other details (including pictures) come from searching around the ‘interweb’ thing.

…and of course the service ending is inspired by the work of John Seddon.

2. Historical point of detail: “The River Rouge was built to produce Model T Fords for decades to come, [but] by the time it was capable of full production later in the [1920s], a factory a tenth its size could have handled the demand for Model Ts.” (Wiley)

i.e. Henry Ford had built this huge production machine but his product had gone out of fashion because its competitor, General Motors, was providing the variety that customers now wanted, albeit using scale to do so. Ford was now in a dash to recover.

3. ‘Stop the line’ crime: Workers knew that managers wanted them to make as many as possible, with no ‘down time’. I understand that this is where the phrase to ‘throw a spanner in the works’ comes from…which refers to a disgruntled worker ‘accidentally’ dropping a tool into the assembly line mechanism so that the line stopped and they all got a break whilst the cause was found and rectified.

4. A fresh giant: Johnson is a giant for me, and I’ve been meaning to add his ‘giant bio’ to this blog for ages now…I have finally done so 🙂

Oversimplification

giantknave Brain Farts , , , , , , , , ,

!cid_image001_png@01D18034So it seems that many an organisation repeats a mantra that we must “simplify, simplify, simplify”…they accompany this thrice repeated word with rhetoric that implies that this is so blindingly obvious that only a fool would query this!

As such, anyone questioning this logic is likely to hold their tongue…but I’ll be that fool and question it, and here’s why:

It’s too simple!

Here’s where I mention the ‘Law of requisite variety’ which was formulated by the cyberneticist1 W. Ross Ashby in the context of studying biological systems. Stafford Beer extended Ashby’s thinking by applying it to organisations.

Now, rather than stating Ashby’s technical definition, I’ll put forward an informal definition that I think is of use:

“In order to deal properly with the diversity of problems the world throws at you, you need to have a repertoire of responses which is (at least) as nuanced as the problems you face.” (What is requisite variety?)

!cid_image002_png@01D18034

Using the diagram above, let’s say that the problem types on the left (shown by different coloured arrows) represent the different types of value demands from our customers.

Let’s say that the responses on the right are what our system* is designed to cope with (* where system means the whole thing – people, process, technology – it doesn’t refer merely to ‘the computer’).

We can see that our system above is not designed to cope with the red arrows and incorrectly copes with some of the yellow arrows (with an orange response)….the customers with these value demands will be somewhat disappointed! Further, we would waste a great deal of time, effort and money trying to cope with this situation.

What on earth are you on about?!

“Management always hopes to devise systems that are simple…but often ends up spending vast sums of money to inject requisite variety – which should have been designed into the system in the first place.” (Stafford Beer)

Many large organisations engage in ill thought out and/or overly zealous ‘complexity reduction’ initiatives (incidentally, system replacement projects* are corkers for this!) that strip out more than they should and the outcome is unusable and/or hugely harmful towards satisfying customer value demands…which ends up creating un-necessary complexity as the necessary variety is ‘put back in’ via workarounds and ugly add-ons and patch-ups.

(* Large public sector departments have been excellent at this….often scrapping multi-million $ projects before a single live transaction gets into a database.)

Note: for readers aware of the ‘Lean Start-up’ thinking, you might cry out that this appears to go against the Minimum Viable Product (MVP)/ experimentation point…but it doesn’t…in fact it supports thinking in terms of target conditions rather than merely stating ‘make it simple’ objectives and setting related arbitrary targets.

Standardisation?

You might think that, because service demand is infinitely variable 2, then I am suggesting that we need to build infinitely complex systems that can cope with every eventuality with standardised responses. Well, no, that would be mad…and impossible.

In service, we can’t hope to know every ‘coloured arrow’ that might come at us! Instead, we need to ensure that our service system can absorb variety! This means providing a flexible environment (e.g. guidelines, not ‘straight jacket’ rules), and empowering front line staff to ‘do the right thing’ for the specific variety of the customer’s demand before them, and pulling appropriate expertise when required.

Standardisation in service is not the answer.

Cause and Effect

Don’t confuse cause and effect. Simplification should not be the goal…but it can be a very agreeable side effect.

“To remove waste [e.g. complexity], you need to understand its causes….if the system conditions that caused the waste are not removed, any improvements will be marginal and unsustainable.” (John Seddon)

If you think “We’ve got too many products and IT applications…we need to run projects to get rid of the majority of them!” then ask yourself this: “Did anyone set out specifically to have loads of products and IT applications?” I very much doubt it…

You can say that you want fewer products, less technology applications, less complex processes…less xyz. But first, you need to be absolutely clear on what caused you to be (and remain) this way. Then you would be in a position to improve, which will likely result in the effect of appropriate simplification (towards customer purpose).

If you don’t understand the ‘why’ then:

  • how can you be sure that removing all those products and systems and processes will be a success? and
  • what’s to stop  them from multiplying again?

The goal should be what you want, not what you don’t want

“If you get rid of something that you don’t want, you don’t necessarily get something that you do want…improvement should be directed at what you want, not at what you don’t want.” (Russell Ackoff)

The starting point should be:

  • studying your (value stream) systems and getting knowledge; and then
  • experimenting towards purpose (from the customers point of view) , whilst monitoring your capability measures

The starting point is NOT simplification.

A classic example of the simplification mantra usurping the customer purpose is where organisations force their customers down a ‘digital’ path rather than providing them with the choice.

  • To force them will create dissatisfaction, failure demand and the complexity of dealing with it;
  • To provide them with choice will create the simplicity of delivering what they want, how they want it…with the side effect of educating them as to what is possible and likely moving them into forging new habits (accepting that this takes time).

In conclusion

So I’d like to end on the quote that I have worn out most over my working life to date:

“Make everything as simple as possible, but no simpler.” (attributed to Einstein)

The great thing about this quote is that it contrasts ‘relative’ with ‘absolute’. “As simple as possible” is relative 3 – it necessitates a comparison against purpose. “Simple” is absolute and, as such, our pursuit of simplification for its own sake will destroy value.

Thus, the quote requires us to start with, and constantly test against, customer purpose…and the appropriate simplicity will find itself.

Notes:

  1. Cybernetics: the science of control and communication in animals, men and machines. Cyberneticians try to understand how systems describe themselves, control themselves, and organize themselves.
  2. Infinite variability: We are all unique and, whilst we will likely identify a range of common cause variation within service demand (i.e. predictable), we need to see each customer as an individual and aim to satisfy their specific need.
  3. There’s probably an Einstein ‘relativity’ joke in there somewhere. 

I’m just a spanner!

giantknave Brain Farts , ,

spannerSo there’s a TV programme that I love called ‘How it’s made’. It takes the viewer through the manufacturing journey of a unit of production. An episode might focus on something small, like making a can of fizzy drink. Another episode might focus on something HUGE, like building a cruise ship…but there is a similarity within.

The other day I watched an episode that showed how a spanner was made (a ‘combination wrench’ if we are being techy). Watch it here (it’s only 5 mins).

Once you’ve watched it, I’d ask you to put yourself in the place of one of those wonderful spanners (call yourself Sammy if you like and have a think about yourself)….I did, and here’s what I thought:

“I’m just a spanner….

  • I don’t have a brain
  • I’m not purposeful – I just ‘am’
  • I don’t have a genetic make-up passed on to me – I don’t have a mum and dad!
  • I have no memory of my past experiences from which to form opinions
  • I’m not capable of emotion
  • I can’t respond to things that happen to me or make choices for myself

In short: I cannot think or communicate, which is ironic given that I appear to be writing this post 🙂

Further, all of this is relatively static – it doesn’t change over time…other than perhaps the ever-so-slow process of entropy as I likely corrode.

…and so, given this I really don’t mind that:

  • my destiny (to be ‘that spanner’) is predetermined for me, and completely specified ‘up front’ by my makers…without any input from me;
  • there is nothing unique/ special about me: I am treated exactly the same as every other ‘standardised’ spanner;
  • I am bundled together with other spanners in convenient batches as and when my makers see fit;
  • I am passed from process to process as my makers determine, for their benefit;
  • I sit around (in piles) waiting for when the next process is ready for me
    • which may be days or even weeks…in fact whenever my makers wish
    • …and nothing really happens to me whilst I am waiting
  • …and so on

Each process knows exactly what it is getting from the last one and knows exactly what to do (e.g. I will arrive at process ‘x’ as a blank and I will then have a hole stamped through me, ready for process ‘y’)

It doesn’t really matter what mood each worker on my production line is in, how they are presented…even what language they speak or views they hold. They will ‘process me’ and move on with their lives!

This arrangement may very well work out just fine for our Sammy the spanner…but now let’s turn our attention to service organisations (and service value streams):

If you go back to the monologue above and substituted a customer into the role of our hero, the spanner, you would find that all is most definitely NOT okay! Go on, take a short minute to do it – it’s a good exercise in realising how and why service and manufacturing are VERY different.

Treating customers as brain-less, purpose-less, emotion-less and lacking in memory is not recommended. “Fine”  I hear you say ”….we’d never do that!”

But, now consider whether many (most?) service organisations:

  • attempt to standardise customers into a service ‘straight jacket’;
  • pass customers through rigid pre-defined processes (e.g. from front office to back office; through vertical silos of order taking – assessment – solution – payment and closure…and then ‘after care’)
  • juggle customers between multiple members of staff (with no-one really taking responsibility);
  • put customers into queues to process at the service’s convenience (perhaps using computers to elicit ‘data attributes to classify, sort, prioritise and schedule’*)
  • treat the customer’s time and effort as free; and
  • decide when the customer’s need has been fulfilled (rather than allow the customer to determine this for themselves)

* If that sounds awfully boring and techy, it’s meant to because that’s what computers are good at – algorithms, not people.

Now, you might yawn and say “Steve, you are on your ‘service is different’ band wagon again” and you’d be right! You might even point me at some posts that I have already written in a similar vein.

But the fact is that every single day we, as customers, experience service organisations treating us more like a spanner than a person. This likely causes huge frustration, failure demand and negativity towards the service being experienced.

I want a service organisation to understand:

Many a service has gone down the wrong path. It is time for them to wake up…

“No matter how long you have been on the wrong road, turn back.”

Do you sometimes feel like you are being treated like a spanner instead of a customer?

Conversely, if you work in a service organisation (or service value stream), what do you think your customers feel like?

A final reflection:

It’s worth considering the following quote: “In service, the best hand-off is no hand-off.”

I’m not saying that this is necessarily achievable…it’s more of a challenge towards which we should be pointing. At its most basic it is a sobering antidote to all those out there running in the other direction whilst chanting the ‘standardise and specialise’ mantra.