Starting change by studying isn’t sexy but it’s right! Part 1/2

It’s not very sexy to say we’ll start by studying. Managers like to do things, they want to start and do their program of change. Saying ‘Let’s study’ is also rude because it implies they don’t know what’s going on.

Last Thursday, I attended the Systems Thinking – Leaders Summit and John Seddon opened the conference with these confronting but honest words.  Many eyebrows in the room were raised. Expectations were set.

The conference featured case studies from business and public sector leaders who had used The Vanguard Method to achieve outstanding transformations in their organizations. In this post and the next post, I’ll  discuss two different cases and show you how these leaders discovered that Systems Thinking delivers high quality at lower costs.

You will quickly discover too that culture change comes free!  A more in-depth explanation on The Vanguard Method will follow later.

Case 1: Owen Buckwell

Head of Public Housing at the Portsmouth City Council

Owen delivered the highest quality housing service that anyone could wish for. Reports showed 98% of repairs were completed on time and customer satisfaction was very high. And yet, at the same time Owen was receiving complaints from residents about incomplete repairs, missed appointments and poor quality service. Owen realized the truth was hiding behind the reports and targets of his organization.

So Owen went on a mission…

He started to look at the repair service using an outside-in perspective and stepped out of his comfort zone to do the work himself (normative experience). What Owen uncovered transformed his leadership approach completely. When he listened to the calls coming in, he found that of all customer contact with the repair service,  a high 80% was  related to failure demand (calls that were related to a failure to either provide a service or to do it right). Another shock: Owen discovered  true satisfaction rates were only around 50%.

The normative experience can be very confronting for most managers because they suddenly see the problems caused by the system they helped creating. They then need to learn to see and understand the work and un-learn the ways of doing things they had before. If they do, they will find people who want to do a great job but are held back by the system. This results in lower moral and lower quality and cheating the system to achieve unreasonable targets.

Once they started to understand the customer better, Owen and his team identified that the purpose of their housing repair service should be to fix a housing problem the first time, in one visit and at an exact time specified by the tenant. This was the exact opposite of what they had been doing so far.

Now, after a lot of hard work to change things, an operative gets to a house and phones in to inform the company how long it will take to fix this problem. If he can, he will immediately fix the problem. If he needs additional material, the stock gets delivered at the site straight away, reducing the end-to-end repair cost.

Another discovery in Owen’s normative adventure was the way the company calculated the cost of toilets by calculating unit cost. They focused on getting the cheapest toilet replacement not realizing that the operative sometimes passed 2 or 3 stores to go to a store where it was £5 cheaper. They didn’t take the cost associated of driving past those other stores into calculation  and it easily transcended that discount by 400%.

If you manage costs, your costs will go up

The repair service that once dealt with repairs in a predictable 60 days, is now fixing all repairs within 7 days. 96% of these are repairs that were fixed immediately. Housing repair complaints have gone down by 80%.

The company stopped managing employee sickness but looked at its root cause. 65% of all sickness numbers came from 20% of the ground maintenance employees with back pain. The company started to train their employees on how to lift heavy objects.  Sickness went down dramatically and morale went up. The lesson here? Stop managing the outcomes and start studying the system.

Another problem Owen and his team began to investigate was the waiting list for being housed. It was up to 11,000 people at that time. As they began calling these people, they found out the majority would never meet the criteria to be housed.  When the situation and the real criteria required to be housed were explained to those on the list, the majority of people was happy to be taken off the list. In fact, grateful to be informed of the facts, they often self-selected themselves out. Today, the list only has 3,500 of waiting people, a significant 68% reduction.

Owen and his team went looking for the root cause of the problem, instead of finding a way to manage the outcome.

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  1. Starting change by studying isn’t sexy but it’s right! Part 2/2 « AGILEMinds - December 3, 2010

    […] Vanguard Method to achieve outstanding transformations in their organizations. In this post and the previous one, I’ll  discuss two different cases and show you how these leaders discovered that Systems […]

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