Hello Mr. Clare-
I come from the land of budgets (USA) and yes I served in the public sector with declining budgets. I was awakened some 5 years ago from my slumber about how to reduce costs by John Seddon. I have learned that to focus on costs always increases them and instead we better serve the public by finding the causes of costs. A management paradox? . . . yes. Reactionary? Hardly, in fact blindly moving to shared services based on costs IS reactionary.
Your biggest lever for improvement is the design and management of the work. You may want to start the process by performing “check” now (understanding the “what and why” of current performance). I believe you will find plenty of opportunities to improve service and therefore reduce costs. You may even improve the culture so all these people I am copying will want to help you.
The truth is you know of no better way to manage than the coercive and rational style you have outlined. You offer no proof and I must say would be hard-pressed to find actual savings from shared services when looking at total end-to-end costs. Too bad the damage of this thinking may full well be done before the election.
Kindest Regards,
Tripp Babbitt
President, Bryce Harrison Inc.
And Clare to Babbit:
You have over-simplified for effect. The concept of shared services, if attempted solely to reduce costs, would be a futile if not facile exercise. Alongside other measures, including new governance options, service sharing is aimed at improving outcomes for the public - through breaking down entrenched, dated and/or duplicative professional and organisational silos, for example - and delivering the same for less. This is a course that is not merely wise, but essential, arguably overdue and certainly very, very urgent. Efficiencies and real savings can and must be found through a variety of measures if Councils are to avoid wholesale closures of services in the predicted extended period of recovery from recession.
Entries (RSS)
December 3rd, 2009 at 9:05 pm
This is a very interesting dialogue between Mr Clare and Mr Babbitt and addresses an issue which preoccupies many. I do hope that they will continue their discussion and that we shall be permitted to know the content if we wish. It would help us understand the issue better, after all’s said and done.
December 3rd, 2009 at 9:19 pm
Roy:
I have to admit that my post to your blog post was inadvertent and am not equipped proximity-wise to have the discussion that needs to be had.
That said, I am copying John Seddon (MD of Vanguard) and Jeremy Cox (head of the UK government sector for Vanguard) who are very familiar with the cost problems associated with councils. I will leave this discussion in their capable hands as I believe they can show you many ways they have worked with councils to improve service and reduce costs. They are very familiar with the types of problems you face and may even have some better ideas.
Kindest Regards,
Tripp Babbitt
December 4th, 2009 at 2:34 pm
If I might join this conversation I would ask Roy to explain more what he means by some of his expressions. What. for example, in the context of a public library service is meant by ‘new governance options’ and what specifically are the ‘professional and organisational silos’ to which he refers? Jargon is not helpful at a sensitive moment in this debate.
My (reasonably extensive) experience of the public library service is that it is quite possible to meet quite substantial requests to reduce budgets. by, as Tripp Babbit suggests, reviewing the process of giving the service the public wants in the most straightforward way. I would never start a review from the point of view that there are likely to be too many buildings. When they are not well used that is normally because they are not open at the right times, in poor condition, or badly stocked. The answer is not to close or relocate them, but to improve them.
A council should be properly advised that they do need to indulge in ‘wholesale closures of service’- anywhere including Northumbria-. and the MLA should not be endorsing such actions. After years of ignoring the needs to find efficiency, it is not appropriate to punish the public for a failure of leadership and management by closing down their libraries.
The review of processes in public libraries, as Tipp says, reveals a whole host of activities which are not on the main path from author to reader, and can be done without. That is why I continue to call for hefty review of practice, both at local and national level. But I think the assertion that Roy has frequently made, that there are ‘too many library buildings’ is in direct opposition to the desires of people in local communities. While they have little trust in those responsible for operating their libraries, they can see clearly that once a library has been shut, it will difficult to reopen it. There is no evidence that people in this country want wholesale library closures, as any reader of this blog could hardly fail to spot.
The MLA and Roy have been criticised for not being transparently accountable to anyone. In those circumstances, to be humble in the face of public opinion, and not contradictory to it, would help inspire more confidence.
December 5th, 2009 at 10:29 am
Tim is right to be cautious about accepting assertions that ‘governance’ will see things alright. SW1 - a call centre set up by IBM, Somerset and Taunton Councils was deemed by the Audit Commission to have satisfactory ‘governance’ yet it is bound to fail. The sweat-shop conditions (managing agents’ activity) have led to high turnover of staff and those who know local authority services know that some of the services they are attempting to provide through the call centre cannot be effectively provided that way.
SW1 is considered by the Treasury to be exemplary. Like all shared service projects it is an attempt to reduce transaction costs. While transaction costs may fall (because you pay low wages) the total costs of service will rise because cost is associated with flow (the number of trasactions it takes to get a service) not activity. Call centres and back offices are leading to industrialised and remote public services. As Tripp claims, the scope for improvement remains. And can only be achieved through re-designing the services. To illustrate: Stockport Council has re-designed two services that were thought right for sharing; HR and IT help-desk. The result in HR is a doubling of productivity. The IT help desk now helps (when they studied it it resolved very few problems at the first point of transaction, it now solves more than 85%) and operates at 17% less cost. If these services had been shared the costs would have remained locked in. The Treasury has it wrong. Economy comes from flow, not scale. If we continue to persue their ideological agenda we will create more remote high-cost ineffective services.
December 13th, 2009 at 1:32 am
Re: Tripp Babbitt
Actually, Roy Clare was pretty well correct in describing Mr Babbitt’s comments as reactionary. And Babbitt is exceedingly disingenous in how he presented yourself.
The primary reason for public service budget cuts in the US over the last number of years has quite simply been because of the political complexion of the administration that the US electorate removed from office last year.
And Tripp Babbitt is heavily part of the ‘ smaller government ‘ groupings whose general view of life is that no matter what a government, any government, cuts…., it’s just never big enough.
What Seddon has really done is distort a particular kind of management philosophy, hijacked its language, and created a little ideological crusade to disguise his actions. The original philosophies were very long-term, required huge committment, and monies, and just about ‘Rule No 1′ was that cost-cutting was not the objective.
Behind John Seddon’s smoke and mirrors, there is standard management consultancy, and self-promotion. And the short-term illusion of monies somehow permanently saved.