The workshop won’t allow it!

How often to we hear that one part of an organisation will not allow another part to deliver a service because the policies and procedures get in the way of common sense?

He is a local example of what happens in practice.

I have been talking to a motorcycle dealer recently about the option to change my bike.

Now the sale team have been really good at giving me access to ride the bikes that I wanted at a time that suited me. They have fed me coffee, and spent time trying to understand my needs.

Despite their best endeavours the dreaded computer systems managed to get in their way at regular intervals.  I have been asked for me address, and email address on a number of occasions, by the same two people for different computer systems!

In conversation the other day I found out that because this particular branch of the dealership is too successful they register some sales via their other dealerships. You will never guess why – because the supplier sets the dealers targets on an annual basis to sell units.

If they appear too successful then the supplier increases the targets to the point that the dealership begins to lose revenue! so, the dodge is to register units at different dealerships to disguise the success on one branch. making efficiencies

This makes good business sense for the dealer who is bound by the stupid rules of the supplier, who doubtless thinks that it is being clever.

The rub for the dealer in question is that this means that they have to travel backwards and forwards up and down the motorway to register vehicles at different locations to bend the rules set by the supplier.

Step back and hopefully you can see the madness in this target. The waste and additional cost that is incurred by the dealer to bend the rules to maximise the income from the supplier and manage the outcome performance at the year-end.  Not to mention the impact upon the customer!

This is sadly not unusual in businesses, who for reasons best known to themselves put in place silly rules and procedures in an effort to control the market place.

In reality of course the same number of units is sold in the market place what ever the supplier decides, but because the rules the dealer has to manipulate the data to make the system work.

So that’s seems pretty normal, but then the stupidity really starts. I have received a great service from the guys at the front line trying to sell me a bike, they have done what they can to help me make an informed choice about a replacement bike.

All is going well, until I receive a call from my nice sales guy to tell me that I must pay a bit more cash over as a deposit because ‘ the workshop aren’t very busy today and want to work on preparing my new bike’ sounds good I thought, but then the bombshell.

The workshop won’t start the work until I have topped up my deposit to cover their costs!!

Guess what the sales team don’t run the business the workshop does! Now in truth it’s not the fault of the workshop manager. It’s his boss.

You see even though this is a small dealership they have very clear lines of demarcation. Functional specialisation on steroids.

They clearly have separate profit centres. If the workshop do work for sales and it does not follow through to a sale then the workshop loses out financially.

So the system quickly begins to breakdown from a customer perspective. What starts life as great customer service ends up as a trade-off between sales and the workshop and guess what –  the customer loses out big time.

Now it does not have to be this way. It’s a relatively small business, it has two locations. The systems in place plausibly look like they are adding value to the business, but in truth they all run around with bits of paper and talk to one another all the time, so what’s the need for a CRM style system.

Functionalisation is driving cost in to the organisation. I know from the relationship that I have built up that the margin on the sale is not huge, so why burn profit undertaking bureaucratic nonsense that makes life worse for the customer.

And as for the supplier of the product –  well it is a great product, but its relationship with its dealerships is based purely on number of units,  and yet its philosophy seems intended to be more customer centric.  The lesson here is about the unintended consequences of targets against longer term vision.

In the end I take delivery of a vehicle that does not have all of its accessories fitted. Some did not turn up in time, other bits are still awaiting for collection at the other franchise.

I need to spent time at some point going back for rework. In effect lost time and effort for the workshop who did not get it right first time, because the parts did not arrive at the right time.

Great product, with enthusiastic people trying to do the right thing within a system that makes it difficult to get it right first time: can the leaders spot the room for improvement I wonder?

Do you see parallels in your own organisation?

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A conversation this weekend stopped me in my tracks.

A conversation this weekend stopped me in my tracks. A friend of mine told me a story about something that happened to him at work this week.  He overheard a call to one of his team from their internal sales call centre. It transpired that a customer had requested a delivery, nothing special you might think? However, the sale had come from a business a couple of hundred yards from where he was currently located. The irony was that the sales assistant in the call centre two hundred miles away was explaining that the order could not be placed with the local depot. Instead she advised that it had to come from a depot 50 miles away!

The logic – the sales targets indicated that the product needed to be delivered from that depot 50 miles away, other wise they would not hit their sales target for the month. Fortunately, my friend who was the manager over both sites stepped in to over rule the decision. He said to me ‘I thought this is madness,  I was prepared to take the consequences, and so I overruled the decision. The decision was ridiculous. Sales were not happy’. This got us on to a conversation about the stupidity of targets and the effect that they have within businesses. For the sake of a sales target the business was prepared to spend more cash delivering tonnes of product by taking a 100 mile round trip. How can this be good for business?

Fortunately my friend has a systemic view of the world, and was able to allow common sense to prevail and take executive action. He could see how barmy this decision really was.

The worrying thing is that If he had not been in the right place at the right time the business would have lost money, but it would have hit it’s sale targets for the month. How barmy is that!

He was the first to recognise that the sales team will be making arbitrary decisions like this every day. The sad thing is that he feels powerless to impact the command and control style of management that operates within the business.

Data data all around, but not a bit that’s useful

It’s that busy time of the year for people in finance in local government –  ‘close down’.

A magical time when every last ounce of energy goes into the exercise.

There is a target date to meet and everything must add up, balance and be filed for inspection by the dreaded external auditor.making efficiencies

Life and death for accountants: like watching paint dry for everyone else.

During ‘close down’ it’s very difficult to get any useful information out of accountancy, as they are ‘too busy’.

So whilst the business goes on spending millions of pound a week managers run blind on what’s actually happening with cost, until they get an update at the end of the quarter. That’s when the fun starts again.

One persons view of a budget and spend profile is different to another. As the manager of the budget you often have limited say in what get reported to the many meetings that purport to scrutinize the detail only to nod it through.

It’s claimed that only the accountants really understand what the figures mean. In practice I wonder if even that it true.

The slight of hand that goes on to churn money in the system means that it’s difficult for anyone to know what the true picture is. By the time it gets reported, and audited the game has moved on.

Every year as a manager you do you best to manage and profile your spend to get value for money.

Now let’s not get started on VFM that will come up in a later blog.

A while ago in quarter two I was told that I was going to over spend by the end of the year by £2M (I was naturally quite worried) at the end of the following quarter I was going to underspend by £550K (now I was even more worried, did anyone know what was really going on?)

You could not make it up. What are you supposed to do!

Experience says keep your own information, so most of us keep our own spreadsheets just in case. They obviously sit outside of the main financial system, possibly even on memory sticks, but don’t tell IT as its against the policy to stick anything dodgy into your USB port.

At least having your own records gives you something to argue with when the accountant tries to manage your codes and your budget for you, and gets you in to hot water.

Ironically the latest accountancy system was introduced to remove the need for all those spreadsheets, but I am really glad that I secretly kept mine. It’s duplication of effort, but you cannot be too careful.

Another thing that bugs me is that fact that you are accountable for the budget and its spend, but the accountants mysteriously have secret powers to enter the system and move numbers around, seemingly at will, to balance things out for that all important financial report.

Overspends of course remain the managers problem.

This can be hugely frustrating when the overspend is cause by a cock up in accountancy when a Zero or the comma in the wrong place. Opps sorry these things happen!

Can you give me an explanation of the reasons for the overspend, and what you intend to do about it for the Management Team report. Oh and by the way the Director of Finance needs it by tonight.

The irony is that the budget is pored over and used as some amazing tool that informs our decision making.

In truth it’s a lagging measure, historical information regurgitated at various meetings to show everyone that we are in balance for the year against the agreed allocation of spend.

This whole exercise is an arbitrary judgement made largely on the basis of rolling forward previous years spent plus or minus a percentage.

It has little relationship to community or customer need, and gives us little if any information about true end to end operational cost of the services being delivered.

Why?  Because budgets are apportioned to hierarchical structures and further subdivided into functions and cost centres causing the system to sub optimise.

In practice this means that individuals manage the money that they have been allocated and spend it on the part of the organisation for which they have responsibility.

Simple really.

The issue is that each of us looks after our bit and has little, if any, focus upon the impact this has upon the customers that we are all here to serve. This in fact drives massive inefficiency and therefore cost into delivering essential services.

The result is that the organisation runs very inefficiently, but few people realise that this is the case because they are focused on their bit. The drive for efficiency only compounds the problem faced by many organisations.

Salami slicing or prioritisation of spend via a lottery causes individuals to act in a territorial way to protect spend in their area. It’s human nature.

The true cost of the system is in the flow – how things actually move around the organisation, not in unit cost.

Only by studying the organisation as a system can you begin to understand where and how to act to improve service and reduce operating cost.

Nodding dog Syndrome

I was sat in a coffee shop the other day enjoying a refreshing cuppa,  well on my way to earning my free cup, and reflecting upon what I call nodding dog syndrome.

I just have one more stamp to go and then i get a free drink.

The power to comply with the rules and win the bonus is really strong isn’t it. I know that a free cuppa is not going to change the world, but the principle is sound. Follow these rules and you can get a prize or a bonus.

I am more likely to go back to get the prize than pass over it. After all I have earned it. My behaviour has in a small way been affected by the hook of a free drink. The parallels with the working environment are strong.

Let’s take the all important performance data reporting as an example.

So the pressure is back on to make the numbers fit the plan. We are all well in to the  quarter and probably already starting to panic about what stories we can make up to cover the slippage or the short fall.

Everyone in the chain is keen to make the numbers look good, and come up with a form of words that will fit the highlight report to show that everything is on track. Doubtless some of us will also have to remember to log on and fill in the blanks in the computerised software that pulls our performance into the all important dashboard.

Now where did I put my password again?

I have to confess that  I only log in to the system once a month because I find it tedious, long winded and unhelpful.

The information does not help me or my team to learn and improve in the work, but because everyone is obliged to fill in the blanks, ( it’s in my objectives) audit, and/ or nod through the numbers it has become an inevitable routine to endure once a month.

I can see everyone pawing over the keypad dreaming up fine words, or thinking of who or what they can blame for the problem.

I have asked around and I don’t seem to be in the minority, and yet this is the core system that the organisation uses to monitor performance. I’ve been told  that it provides a good audit trail and a narrative that can be pulled out and fed in to the series of important meetings that are held each month to determine that performance is on track. Critical to business performance or so they think!

The trouble is that few people seem to acknowledge that the data keyed in to the system is manipulated to fit the target. The aim here is to make it look ok for the boss.

Bosses like green flags!

If you make it amber or red you need to write an essay on what has gone wrong and how you will put it right, and the boss will have to fill in lots of boxes and answer lots of difficult questions too. No one wants that do they?

The quarterly one to one review will be a nightmare if anything is not green. So, it’s just easier to make it look ok and nod it through. As long as the boxes are populated on time and are green then everyone is happy.

How can this be the way to do business?

The trouble is that targets  do not help us to understand how effectively we are delivering our service against customer expectation. By this I don’t mean the data from the annual customer poll or the generic customer panel that was run a few months ago.

I am thinking real-time feedback.

The other problem is that by the time the ‘big wigs’ get to view the scorecard the information, even if it was useful, is long out of date –  lagging behind what is really happening at the sharp end.

Making the whole process a massive waste of time. Time that could be spent in the work with front line colleagues understanding how to improve the system to enable a great service to be delivered every time.

I can remember a time when i had to go and explain why I was behind on a key performance indicator. The meeting took place two months after the data had been prepared rendering the cross-examination pointless.

Nevertheless the top brass took turns to ask me very detailed questions about the slippage. There was no interest in learning or improvement, just a determination to find someone to blame.

I tried to show them a control chart which ably demonstrated that the variance was normal, and therefore  to be expected, but  the meeting turned a little sour.

My hard evidence was unwelcome as it blurred the issue. Never let the facts get in the way of a good row over data! We cannot learn anything useful from such an exercise, other than to keep your head down and make the stats go green.

Make it up, do what it takes; find a way to fiddle the numbers.

We are feeding a machine with data like a hungry beast to keep it quiet, not using live data based upon what are customers are asking for in the moment to help us learn and improve at every opportunity.

So, if you want the bonus that you have ‘earned’ be a nodding dog –  better to keep your head down and make the numbers fits the plan at all costs.

Alternatively, you might be curious about using real data to help deliver excellent services, at lower cost, and to improve the mood and engagement within your team.

As a leader the choice is yours.

Confessions of a public sector director

I have missed my deadlines!

I should have completed all my end of year reviews by the end of last month.

I am late putting the final touches to my business plan, and the performance team wants to know the reasons why my numbers were down for quarter 4.

It seems to be getting harder each time. The last management review removed three of my colleagues and I inherited two extra reports to go with the six that I already have.

The performance objectives that had been set for the new guys have been passed on to me together with the outstanding objectives from two of the managers that did not survive the last jobs cull.

Everyone seems to me to be trying really hard, but according to the latest guidance from HR I need to score three of my team as under performing. This means that they will miss out on a bonus, and I will have to fill in a detailed improvement plan with each of them, which I have to monitor on a monthly basis.

If I fail to do this then my boss will put me on to an improvement plan! I am drowning in paperwork; well I tell a lie some of it is paperless.

We have a new on line web based portal to update our performance metrics on each week.

Honestly I spend more time staring at my computer screen up dating forms and scorecards than I do actually trying to do my job. Is this what I joined this business to do? I talked down the pub with a few of my mates and they mainly seem to be caught in the same trap.

The end of year reviews are all based on the revised competency framework, revised again this year by HR, and also have to link into the business plan targets for the team.

Mine are linked to the team and to my boss, and so on.  It’s a maze. I am not sure that anyone really understands what it all means.

The online guidance and video blogs don’t help much with explaining what we need to know, I just need someone to talk to in person, but the HR team now operate out of a contact centre 400 miles away.

The game at the end of the year is to come up with smart words to show how what we ended up doing looks like it fits with the original plan. I have become pretty skilled at making things look ok.

In truth what we actually do and what we put into the plans are very different, but as long as the right boxes are filled in and we can come up with a sensible reason why we missed target we can usually get away with it.

What a way to run a business!

I sometimes wonder whether everyone is up the same trick? Is the MD also spinning the numbers with the board? He must be! As long as the board is happy then we live to breath another day.

As for this years business plan, well everyone else seems to be rolling forward last years ideas and adding a bit at the margin on performance targets.

You have to do it to survive, but it feels like cloud cuckoo land to me. It feels more and more like a losing streak when betting on the horses. A few of my colleagues have let all this get to them and it has starting to impact upon their home lives.

One of my colleagues had her longstanding partner walk out on her the other week, because she was hardly ever at home. The culture of presenteeism means that we have to be seen to be at work crunching the numbers.

Two of my colleagues are off with stress, and I am not sure that one of them will ever come back. Maybe it’s for the best, at least he will end up with some sort of deal to keep him quite and the company out of the courts!

I have to sit down later this week with one of my reports,  to talk to him about his performance this month.

It’s going to be a difficult conversation you see because he is very good at his job and brings in great results; in fact he is ahead of target. The problem is he is ahead on the wrong target.

Let me explain a bit further – the powers that be have decided that we need to review ten clients a day, and this is the target that we get measured on.  Well Alan has only been hitting around five a day for the last three months, so things are not looking too good for him.

The problem is that he has actually converted more of his reviews in to new business than any other member of the team, but the other team members regular hit their target for reviews.

How can I explain that one to him? The business needs new business to survive, but the target is for numbers of completed reviews. The big bosses don’t seem to realize the implications for the business.

I wonder if it has anything to do with the bonuses they are due at the end of the financial year?

However, I am not sure that it has to be this way. I was reading an interesting article the other day by a chap called John Seddon. In it he talked about that fact that targets always drive the wrong type of behaviour in organisations.

When I reflected upon my own experience I could see what he meant. He also argued that business planning, and annual performance reviews were a waste of time and energy. Well I agree with him there! He argues that such processes are entirely arbitrary and add no value to the business what so ever.

So, why I am finding myself having to doing more and more of this stuff?

The article says that as a manager I need to connect with the work and my team and to understand what my team is about through the eyes of the customer and then to work with them to design and manage the work on the basis of what matters to the customers.

It sounds simple enough; I would love to find the time to have a go.

Thanks for taking the time to read my blog.