Monday 30 June 2014

Is encouraging Local Authorities to share and/or merge the right thing to do?

For years (centuries?) there have been boundary issues, discussions and disputes between parishes, districts, boroughs and counties.  Where are the lines to be drawn, and who takes responsibility?

Each political area then has its own structure of management – and in most cases consists of:
  • unpaid political leaders and members to give the strategic direction as voted for by the population, and
  • a paid CEO, directors and managers to lead the staff.  

With over 350 councils in the UK, that’s a lot of management.  At quite a cost.  Central Government continues to struggle to control budgetary pressures, and continues to restrict the funding to local councils.  So how do you do more for less?

In the past, central government has taken control of some of these boundary issues – with varying degrees of success.  Why not merge councils together by changing boundaries?  It’s unlikely they will want to do that directly now - it’s politically sensitive, to say then least! - and a battle they don’t need to fight.  Will councils do it themselves - and vote themselves out of a job…?

Many turn to shared services.  If two or more councils can share a finance department, or IT department, then it only requires one set of managers.  A simple economy of scale - and there are some advantages to this.

The Government are now encouraging closer working by given additional funding to Councils who merge themselves: £15m is being made available for 2014/15 for district councils working together and/or with a county to share Chief Executive’s and SMTs. It’s the sort of thing that Mid Suffolk and Babergh District councils are working on right now.

But what I see so many times, is the failure to recognise that the existing service is almost always highly inefficient with waste work and failure demand in abundance.  So it should always be economies of flow first.
  • Understand the customer demand
  • Design against purpose
  • Reduce/eliminate waste.
This removes all the unnecessary steps leading to improved customer service and reduced cost.  Ask yourself the question: “Do I really understand what the customer experiences when they contact my service?”

Then, there may be possibilities for merging to improve economies of scale.  Do we really need over 350 Council Tax departments across the country, all managing their own, very similar, systems and support hierarchies?

Thursday 26 June 2014

Keeping things simple?

Do you ever think that some of the management books and technical jargon are far more complicated than they really need to be?  A recent podcast by the Freakonomics team reminded me of some simple service “production line” stuff that seems to get forgotten.

Over the years, I have worked in many claims processing systems, and we undertook the usual “work-flow” analysis of all the steps – the usual post-it notes on the wall etc – we’ve all done it.  

There were 300 steps.

When you look at which ones actually add value, there were only three (I’ve worked with many teams - it always boils down to three steps): 
            1. meet
            2. assess
            3. pay

All the other steps were there to patch-up all the other steps that weren’t working properly.

The team realised that they were actually spending time doing part of the work, finding themselves in the position of not being able to complete it, asking for more information, whilst the customer would phone into a separate help-desk in need of assistance.  This would be repeated on a number of occasions over a lengthy period of time.  Stylistically, spending 4 lots of 15 minutes over the period of about a month:

The team I was working with experimented with a “Right-first-time” approach.  The experts in the process (rather than the administrators) spent a little longer with each customer, working out the best and quickest way to complete each transaction. Where the work could not be completed, they examined why this was, and looked for different ways to improve this too.

Within a few weeks, half of all claims were being completed within 1 hour.  And the average time for all claims reduced from 13 days end-to-end 6.5 days.  It looked more like this:

Why does this matter?

  1. It’s great customer service.
  2. It costs less too.

For half of the customers, we had taken away the need for them to call in chasing their claims – a saving of over £100,000.

A systemic solution, that saved money, and improved customer service – perfect!

Want to know more:
 - about Matt Arnold
 - give me a call on 07775 595 595
 - email on

Wednesday 25 June 2014

What is Apple’s customer service number if your 69p app fails to download?

Or perhaps another questions for anyone that owns an iPod, iPad or iPhone: when was the last time you pressed “Buy” in the app store and it didn’t work?

For me, this is at the heart of Systems Thinking.  What does the customer want? –then design a process that delivers it right-first-time as quickly and as effortlessly as possible.

Apple may not be perfect, but they do work hard at get the customer experience right.  They avoid the need for a “Customer Services” desk – because they put all their effort into making sure it never goes wrong.

Can you imagine the size of the call centre if only a very small proportion of the 50,000,000,000 app downloads had gone wrong…

When was last time you were “on hold” or had to call back on numerous occasions when something went wrong with your bank / insurance / cable / mobile / benefit / claim?  Why couldn’t they design it so that it always worked?  Why are you left to feel like it’s your fault?

What’s happening in your “Customer Services” desk?  How many calls are being received that are chasing previous errors, mistakes or delays?  How much is this costing your business?

Monday 9 June 2014

Cost exist to be reduced.

I was reminded of this great quote from the master of the Toyota Production System today:

    Costs do not exist to be calculated.
    Costs exist to be reduced.
      - Taiichi Ohno

As a Chartered Accountant, I am well trained to understand cost - especially with respect to Activity Based Costing.  Understanding the cost of every element of the process is clearly important.

However, it is all too easy to then assume that these activities are actually necessary.

In my work, I have helped many teams discover that amongst the 300 steps in their back-office processes, as few as just 3 actually add value.

When you examine the end-to-end process from the customers' perspective with a real sense of "What is the purpose of the system?", you soon discover that many of the the activities are there to:

  • prop-up the failure of not doing things right-first-time
  • mask the organisation's failure to organise themselves around the demands of the customer
  • respond to multiple customer "chasing" contacts as they as wait for service.

By redesigning around the customer demand, with a real understanding of where value is added, many of the activities can be reduced or eliminated.  And this saves money.  I regularly see systems and processes where costs can be reduced by around 20%.

It sounds easy - and to some degree, it is.

Why doesn't everyone see it? - because not everyone looks.  It requires someone to see both the big-picture and the detail - at the same time.

Want to know more:
 - about Matt Arnold
 - give me a call on 07775 595 595
 - email on