The Role of a Manager in Service Organizations and Government

As I was working with a client last week, I reflected on the role of a manager in a systems thinking environment.  If we are to improve the design and management of work . . . the way we manage must change.  This should be seen as an opportunity to a more efficient and compassionate leadership strategy.
Management
Taking an outside-in approach we squarely place ourselves in alignment with the customer.  There is no need to manage the financials as this will take care of itself when the customer is the center of our thoughts.  Taking our minds away from cost control to focus on the causes of costs.

Organizational change management with all the restructuring that leads to new programs and no improvement, gives way to focus management attention on the work.  A far cry from the report-driven and anecdotal method embraced by today’s command and control style of management.  Silos become non-existent as doing what is right for the customer delivers value rather than turf battles.

Measurement derived from customer purpose replaces the functional targets set from the quarterly dividend, financial forecast or budget.  Managers are instead looking at how capable they are at meeting customer demand and the measures that matter to customers. 

Meetings related to making sure the customer or supplier are adhering to contracts written, instead look at a systemic review of “what matters” to customers and create a cooperative environment.  Working together with suppliers and other managers to act on the system to improve flow rather than manage people and budgets.

Managers and workers learning together how to (first) understand current performance and learn what matters to customers.  We move from a reactive environment to an adaptive one.  Change is emergent as workers and managers try new methods to improve the work and innovation through better design.  Rewarded with the desire to learn more and continue the cycle.

Our need to redesign the way manager’s manage should be at the top of our 2010 to-do list.  Is your service organization or government ready for real change?

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Where Does Your Front-Line Focus?

The point of transaction is that spot where your customers derive value from service organizations and government.  Simple enough, but that person that they come in contact with is typically not the owner, CEO or executive.  In fact it isn’t usually the manager or supervisor . . . it is the front-line worker.
Focus
All those in supporting or management roles are typically the ones making life “easier” for the front-line through technology, scripts, rules, procedures, targets, best practices, coaching and other nonsensical “help.”  After all, the work has to be managed as do the people along with it.  The management paradox is that all these things lead to an entrapping and dismal work environment.  Worse, this makes costs increase and service poor.

While targets become the defacto purpose (over serving the customer).  Best practices, rules, scripts and procedures only allow the front-line to check their brains at the door.  Coaching and technology is thrust upon them by people that know little about the work that is being executed . . . after all these are the smarter people. 

A front-line worker has a choice either serve the master that pays them or serve the customer that pays the master.  Choose one. 

So where does your front-line focus?  A better leadership strategy should begin with finding out.

 Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Why Contracts Suck

 
I had a hard time coming up with a title for this post, but I settled on “Why Contracts Suck” because it just . . . fit.  We run into them all the time no matter what they do, they follow us like bad body odor.  A stench that is handcuffed to our business or government.

So what is wrong with contracts?  Let’s name a few things:

  • They entrap the customer or sometimes the vendor.  Don’t we hate it when we sign a contract and the product or service just wasn’t as good as advertised?  I do and cell phone contracts are one of my least favorite.  It should be a crime to give that level of service and lock me in for two years.  But let’s not end there, we also have the government/private sector contracts that are even worse.  The longer the term of the contract, the more entrapping as circumstances are likely to change.
  • They contain SLAs.  Writing an SLA (service level agreement) is like chasing jello across the table.  It looks like you got one nailed and it slips through your fingers.  Usually SLAs are very inflexible and both sides are looking for an advantage instead of what works for the customer.  This is usually not the government in public sector contracts especially as they try to modernize entering the unknown and instead get a lesson that taxpayers pay for.
  • The time wasted in developing, negotiating and monitoring.  In private industry contract negotiations may take days, weeks or months depending on the size.  Government entities are notorious for lengthy times to put in force a contract.  Bids, BAFOs, negotiating games, etc. sometimes cost more than the contract itself.  These negotiations rarely involve people that are familiar with the work that will be effected assuring that waste will be locked in.  Further, contracts have to be monitored for compliance to the contract that adds additional costs.

A Better Way

I cannot dispute the need for contracts.  However, doing what is right in the eyes of the customer always costs less.  Our attitude should be one of doing what is right for the customer not a contractual one.  Those that pursue an advantage (vendor or customer) rather than pursuing a win-win contract stand to lose eventually (if not now).

The need for an understanding of what good service looks like and/or that the design and management of the work is our biggest opportunity for improvement should be foremost in the development and enforcement of any contract.  It is a better systems thinking way.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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The Ignorance of Bold Reform in State Government

I just finished commenting at Governing.com about Indiana’s Welfare Eligibility Reform program.  The article titled, The Hazards of Bold Reform by Stephen Goldsmith is a political spin on a failed program.  He attempts to outline the reasons for modernization of welfare eligibility.

Mr. Goldsmith cites the following:

  1. High error rates
  2. Low job placement rates
  3. Two dozen employees convicted of fraud
  4. Federal Sanctions

All true as I witnessed them during my tenure as CIO at FSSA.  The problem is the context and many may be duped by these anecdotal comments.  The FSSA Secretary (Anne Murphy) reported $1 million losses due to fraud from 2005-2008.  Indiana will be spending (most likely) anywhere from 2 – 25 times that per year to prevent it.

As with most with political agendas the Indiana Welfare Eligibility Reform was doomed from the beginning.  FSSA entered to change the system without knowledge of the “what and why” of current performance.  They had a reform agenda and disrespected the state workers, recipients (now called clients), and the taxpayer.

Mr. Goldsmith outlines the usual poster child for reform . . . antiquated technology and a paper-based system.  Neither of these assumptions should lead us to  believe that more technology or less paper will actually improve things.  In fact, in a government management paradox more technology led to increased costs and the locking-in of a poor design of the work.

Further, Mr. Goldsmith talks about the risks associated with innovation as if this should be something to embrace.  When spending $1.3 billion of taxpayer money to take a risk on innovation, it should be done on a small scale to see if the concept works.  To do otherwise, is to be arrogant . . . not bold.

He makes a mistake in stating as fact that outsourcing employees made things better.  No data to support this statement, which seems to play to those gullible enough to believe such statements.

The usual blame about unforeseen circumstances and federal regulations attempts to pacify the reader that things just couldn’t be done any better in this attempt and avoid actually holding anyone accountable or responsible for this bold attempt.  To this I say “hogwash” (it is Indiana after all).

Indiana FSSA could have (and should have) understood that the biggest opportunity for change is the design and management of the work.  With knowledge gained through understanding they would have been able to design a system and trial it on a small scale, but the rush to “be bold” was their downfall.

 

Please join us for a better way to manage in government at www.thesystemsthinkingreview.com.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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New Thinking for Auto Dealerships

 

Ortynsky CarI was in Canada last week working with two auto dealerships, one in Yorkton, SK and the other in Winnipeg.  These are not just any auto dealerships.  They are run by an innovative and forward-thinking owner named Terry Ortynsky.

Mr. Ortynsky has been working on systems thinking for a little over a year.  His tinkering with the concept during that time has led him to fully commit.  He sees systems thinking as a way to build a better auto dealership.

The Ortynsky dealerships had long fashioned their work to be customer-friendly like so many other dealers.  The difference being the action he has taken to live this principle.  Mr. Ortynsky doesn’t pay his salespeople by commission, they are paid by salary so that when sales are made they are in the best interest of the customer.

His commitment and belief that doing things in the best interest of the customer in sales and service led him to systems thinking.  He understands that by focusing the design and management of work to serve the customer will decrease costs, improve service and achieve a culture that people want to work in. 

Despite pressure from the manufacturers to submit to targets and other dysfunctional behavior, the Ortynsky automotive groups are focused on creating a better customer experience.  They are in the process of improving the customer experience by understanding the “what and why” of current performance and “what matters” to their customers.  This will lead to a system of continual redesign as employees are engaged at all levels to find new ways to serve customers.

A better leadership strategy (especially innovation leadership) can now be found in a car dealership.  Mr. Ortynsky and his folks are on a mission to serve the people of Canada though better service and thinking . . . for sure.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Shared Services in Government: 4 Reasons Not to Share

If I were to tell you not to share would I be asking you to break the Golden Rule we learnedChildren Sharing as kids?  Hardly, but I am badly outnumbered by the likes of such “thought leaders” of major consulting firms that promote a shared services strategy.  I have to be wrong when the numbers are so great against me . . . really?

As positive a phrase as “shared services” sounds, it belies the negative side that no one wants you to know about.  The government management paradox that shared services wind up costing you more for less government services.  What?  They didn’t tell you?

Let’s take a look at what is missed:

  1. Did you have an optimal design in the first place? Rarely, are government entities provisioning services in an optimal manner.  The rush to cut costs bypasses a bigger opportunity for improvement . . . the design and management of work.  Something the US government management doesn’t do well (but neither does the private sector – even though they claim to provide better service).   Most of the time all we do in sharing services is perpetuate a bad design and locking in waste.
  2. Did we really need that front and back office in the first place? This goes hand-in-hand with #1.  When we combined back offices, did we need that back office in the first place?  Most of these I have found can be designed out and services provisioned less expensively.  Our thinking is the problem as we functionally separate the work and try to optimize each piece creating sub-optimization.
  3. Did you understand demand? A bad assumption is that all demand is demand we want from our constituents.  This is never the case.  Failure demand (demand caused by a failure to do something or do something right for a customer) can range from 25
    to 75% or more in government entities.  Sharing services without knowing this number is to lock-in and even increase costs.
  4. Did you know that costs are not in the scale, but in economies of flow? A government management paradox is that costs are not reduced my scale, but by improving the flow.  A service provisioned well costs less tan one that isn’t.  To achieve this we must improve flow end-to-end from a customer perspective.  Understanding this can even have us achieve public sector innovation.

It is ridiculous to assume that combining things will lower costs in government, but a snappy tie or shoes and a well-known consulting firm, internet magazine or technology company can be mesmerizing.  Just remember that what you are seeing is slight of hand and will result in taxpayer and voter dissatisfaction.

Leave me a comment. . . share your opinion!  Click on comments below.www.thesystemsthinkingreview.com and make the taxpayer happy.

Learn more about improvement in government . . . the better way!  Got to

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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What is Wrong with Systems Thinking?

 
What is Wrong with Systems Thinking?  This was actually a hit from Google I had on my website.  I am not sure how I got that search hit.

Regardless, there is much to dislike about systems thinking sitting from the existing paradigm.  I don’t pretend that systems thinking is the end of improvement as there is always a better way.  There will be something better or that can advance the thinking or at least I hope.

Sitting from the existing command and control paradigm there is a lot wrong with systems thinking.  Here are some items to chew on:

  • The CEO or leader must get their hands dirty, meaning that they have to understand the work.  The place where business is transacted between the customer and their company.  No more can they rely on vendors, reports or anecdotal evidence of what is happening in the business.
  • The must quit managing by the financials to improve service.  To focus on costs is to increase costs.  The management paradox is as strange and uncomfortable as it sounds.  Yet, to improve service business we must understand the causes of costs.
  • And the causes of costs are not in the scale as we have all been taught in our college economics classes, they are in the flow (economies of flow), end-to-end from a customer perspective.
  • That technology, shared services, outsourcing, standardization, best practices, scripts, and benchmarking have helped to lock in costs rather than reduce them.  These are all things that we have been held to be self-evident as in truth.
  • Some say it sounds like there will be less control using a systems thinking approach, when in fact there is greater control.
  • Giving up command and control measures like those of cost and productivity is very uncomfortable.  Until managers understand they are replaced with better customer measures and done in an emergent way based on informed choices (meaning with good knowledge at your speed).

So yes, there is much to be afraid of in moving to a systems thinking approach.  We can only promise that the first step is the hardest . . . but the results are phenomenal.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Banking – 5 Ways to Make Your Operations Profitable

 

The banking industry has been through nothing short of hard times lately.  Many banks are in varying degrees of distress or will be.  So, what can banks do to help their cause.

Having worked with banks for almost 10 years performing bank management consulting, I see many opportunities to improve service and reduce costs.  Here are some ideas that may help.

(1) 

Functional Design. 

Every bank I have ever been has designed the work Frederick Taylor style (scientific management theory) separating the duties into specialties.  This has created the well-known front office and back office environment.  Many times this design has been locked in by technology that inhibits the flow of service and creates waste. 

(2)  Separating the Decision Making from the Work.

Banks are built on command and control thinking with the workers working and the managers managing this presents a missed opportunity.  Most bankers in management have “done the work of a teller” at one point in their career.  But things change and with out a thorough understanding of the work as it is done today, wrong or poor decisions are made.  Banking management needs to be on a constant vigil to understand the work and not abdicate decision-making to reports, vendors or anecdotal evidence.

(3)  Understanding Customer Purpose and Demand.

When I visited a bank, most executives and managers thought it was bizarre that I would want to start at the front-line.  The points of transaction for customers is where improving banking systems begins.  Understanding the what and why of current performance naturally leads us to where the customer touches the bank.  Contact centers, tellers, and loan officers offer a good opportunity to easily understand how well a bank is performing in the eyes of the customers.  Understanding “what matters” to customers and the types of demands presented can be a profound education.

(4)  Technology and Automation. 

When you combine making decisions about the work without knowledge, poor work design and technology you get huge amounts of waste in banking.  The use of technology and automation is over-prescribed in banks at great cost.  Technology folks and IT vendors running around looking for ways to use technology without questioning the design or understanding the demand.

(5)  Best practices, Copying, and Standardization.

All of these lead to increase costs and worse service.  The inability for standardization to absorb variety leads to failure demand demand caused by a failure to do something or do something right for a customer).   When workers find the need to standardize they can pull it in, forced standardization is never a good idea.  Copying and best practices (a form of copying) lead to much waste as all banks are different by culture, management, work design, structure, customers, etc. to copy is to miss opportunity for innovation and new methods.

Any bank looking to improve service and reduce costs should find plenty of ideas with each and all of these.

Some sample results are:

Measure

Before

After

Bank servicing

Failure Demand – 60%

First Call Resolution – 30%

Failure Demand – 10%

FCR – 92%

CD

Retention – 20%

Retention – 42%

Mortgages

Conversion – 21%

Conversion – 95% (and the 5% were ones the bank didn’t want)

Card Servicing

Failure Demand – 54%

FCR – 24%

Failure Demand – 18%

FCR – 86%

These results are from a bank management consulting engagement that resulted in a 20% reduction in expenses in one year.  You may be getting these results, if not, you may want to learn more about the 95 Method.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Recommendations for New Jersey and Virginia State Governments

 


Two new political parties are now taking over the states of New Jersey and Virginia.  One of the most daunting tasks in government faces them . . . the task of transferring power from one party to another in about 3 months or so.  It is a monumental task.

Here are some recommendations for incoming Governor’s Bob McDonnell (Virginia) and Chris Christie (New Jersey).  These won’t be the normal things they will hear, so hopefully they and/or their staff will give them some thought.

  • Get Knowledge.  You will face resigning leaders and others that will leave with the political overhaul.  Most of what they learned will be lost.  Before any political agendas come roaring in, the new administration must get knowledge of the systems they wish to change.  This needs to be done by the leaders and not abdicated to a vendor, underling or anyone else (as most of these folks have their own agendas).  So, before the first plan, milestone, schedule, etc please begin by understanding the “what and why” of current performance (please see: performing “check“).
  • Understand that to Manage Costs is to Increase Them.  New Jersey is in a poor fiscal state and Virginia is better than most other states, but let’s face it this is hard times for state government.  The immediate reaction is to focus on cutting costs.  The government management paradox is that this always increases costs.  Governments work on what seems obvious missing the causes of costs. (Please see: Managing Costs Increases Them)
  • Don’t Start with the Bad Assumptions.  There are several I see in government here are three:
  1. Bad Assumption #1:  Technology is the Answer.  After a decade of working with large technology vendors, I can tell you this is not true.  In most cases, technology locks in the waste and sub-optimization of a poorly designed system.  The will tell you about other government successes, best practices, benchmarks, government analytics and more, but fail to deliver the value governments so desperately need to reduce costs and improve service.  Their aim is to improve their own bottom-line . . . not yours.  (Please see: Throwing Technology at the Problem)
  2. Bad Assumption #2:  Shared Services Strategy.  Sharing services is NOT a no-brainer.  Government management must understand that sharing services without knowledge leads to higher costs and worse service.  (Please see: Dos and Don’ts of a Shared Service Strategy and The Case Against Shared Services)
  3.   Bad Assumption #3:  Outsourcing/Privatization.  I’ve been a CIO in state government, it is unrealistic that we wouldn’t have outsourcing and/or privatization.  The problem is that in many cases we are outsourcing our failure demand from constituents (demand caused by a failure to do something or do something right for a customer).  This locks in waste, we need to improve the system by redesigning the management and work.  I have found this reduces technology spend, improves service and costs less on a large scale.  (Please see: Outsourcing: Why it’s a Bad Idea and Better Tips for Government IT Outsourcing and Shared Services)
  • Understand that Your Greatest Lever for Improvement is the Design and Management of Work.  Understanding that a different line of thinking about how to manage and improvement through better work design is a huge leap in reducing costs as it addresses the fundamental thinking problem around the causes of costs.  Government management should take time to browse “Systems Thinking in the Public Sector” and the website for government systems thinking at www.thesystemsthinkingreview.com

My hope for both of these new governments is that through better thinking you can serve constituents better and be good stewards of their money.  Government management requires a different look at some age old problems . . . doing more with less.

Leave me a comment. . . share your opinion!  Click on comments below.

Need help with transitioning government, reducing costs or improving service.  Call us at (317)849-8670.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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How to Get Systems Thinking Started in Service Organizations and Governments

A question often asked to me is how we can get started being a systems thinking service organization (or government entity).  No easy answer here, but I do have lots of suggestions.

  • You have to be curious (required).  If you are doing well (either real or perceived) you won’t be interested in getting better.  Unless of course you understand that things can change at any moment because of an economic downturn, new competitor or just a never satisfied feeling.  The first step is always the hardest, but for a change in thinking about the design and management of work the rewards are huge.
  • Read the Books (suggested). Freedom from Command and Control or Systems Thinking in the Public Sector.  Both are excellent reads full of paradigm busting, counter-intuitive truths and management paradoxes.  They will challenge your thinking.
  • Read the Fit for the Future series six parts in all.  This would be the abbreviated version of the thinking for someone trying to get a feel for systems thinking.
  • Read the Blog (suggested).  The Bryce Harrison blog can be found here.  It is full of short reads on a better way and challenges assumptions ranging from shared services to standardization.
  • Free Download – Understanding Your Organization as a System (suggested).  Almost 200 pages of background information on systems thinking.  The document is a workbook to help with the thinking.  Your email address is required and you have an option to sign-up for the newsletter (or not).  We do send updates to those that download on systems thinking articles and significant events.
  • Sign-Up for Our Newsletter (suggested).  This monthly publication can be signed up for at www.newsystemsthinking.com and let’s you know what is happening in the systems thinking world.
  • Check Out the Systems Thinking Review (suggested).  This is primarily for the public sector, but you can learn alot here.
  • Find us at Twitter, LinkedIn or Facebook (optional).
  • Email us at [email protected] (optional).

I hope this gets anyone started in learning more or at least being curious.

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