Next month I will be giving an international seminar in Blumenau, in Santa Catarina to business students of Sustentare Business School. I am really looking forward to this two day seminar, as I will be teaching to a mixture of MBA students, design students, innovation students and those who are a part of the leadership academy. This is how fundamental Business design is to an organisation, it is a holistic approach which impacts on each and every aspect of an organisation’s operations, and so I thought I would write a few notes on my thinking in this article.
In the last few weeks I have joined a local gym. I was using the small gym room in our condominium, but although adequate, it is extremely limited hence me joining a fairly new chain of gyms called Mockba. The philosophy of the gym takes its inspiration from physical training techniques developed in Russia, hence the Russian inspired name and branding. In this video, Bruno Tripoli introduces the gym, and how it focuses not just on offering the traditional weight training equipment, but also offers more hardcore training programmes such as throwing around extremely large tractor tyres etc. I am already feeling the benefits after just a few weeks, and it is a very uplifting and motivating place to workout.
Mockba have really thought about the entire customer experience. All the staff both Maria and I have felt with have been welcoming, friendly and attentive. There are always two or three trainers on hand at any time, and they put together programmes and show you the exercises. I know that pretty much all other gyms offer this, but the staff are extremely attentive, and will also keep an eye out for you if they see you doing something slightly wrong, coming up and making the necessary corrections. I know this in theory sounds like the way every gym should operate, but I would say that this level of attention is hard to achieve, and not many companies whatever their product or service manage this level of service.
The gym opened a couple of years ago and continues to grow. Every bit of my experience there has been brilliant, every time, from the arrival to the friendly farewell. If only all businesses and organisations were run this way, but unfortunately they are not, so let’s take a look at why.
In the UK this month saw Labour MP Margaret Hodge, chair of the Commons public accounts committee, commenting that the BBC’s handling of its Digital Media Initiative (DMI) which was abandoned at a cost of £98.4m last year, was “almost beyond parody” and noting that there was a “jungle of bureaucracy” at the corporation (source: The Guardian - BBC ‘half-truths’ over digital debacle condemned as Thompson faces MPs). What a tragic waste of tax payers’ money. If we look back across the past decade, we find many other Government high profile complex IT projects have also failed:
- Rural payments agency (subsidies to farmers) spent £32 million on a failed system. They then rehired the same IT company to do more work.
- HMRC (UK tax office) spent £9 billion on an IT led change. 2m pay have paid too little tax, 4m people have paid too much.
- 160 out of 9,000 health organisations are using a new patient record system costing the NHS £12.7 billion.
- A project that was meant to save the Department for Transport (DfT) about £57m eventually cost £81m
And also this month the National Audit Office has criticised the Universal Credit project lead by Iain Duncan Smith, declaring that it has suffered from “weak management, ineffective control and poor governance” and that it could now miss its 2017 deadline for implementation (Source: The Telegraph – Iain Duncan Smith denies Universal Credit is an ‘IT disaster’.
If we try and simply the situation to make sense of it, we can see just how many layers of ‘management’ are involved in these huge projects. In a recent article I explored the notion of the management factory (see Complexity, Flow, Mindfulness and Holonomic Thinking) but in Government projects there are many more stakeholders, leading of course to ‘byzantine’ levels of complexity. The situation is of course made worse by the approaches taken by the large IT companies who then sell their solutions through this system
In 2010, David Cameron and Nick Clegg (the deputy Prime Minister) declared that they would transform this mess. They put out a joint statement in which they said that:
What we’re asking departments to do – not to control things from the centre but to put in place structures that will allow people and communities to take power and control for themselves. In place of the old tools of bureaucratic accountability – top-down regulation and targets – are the new tools of democratic, bottom-up accountability – individual choice, competition, direct elections and transparency.
Source: The Telegraph – David Cameron and Nick Clegg : We’ll transform Britain by giving power away
It is interesting to use case studies from the public sector, since there is often far more information available to analyse. Note the ideology in what Cameron and Clegg are saying. They are saying that free market principles are what is needed for public sector services. They are saying that people want to choose their hospitals and schools as opposed to just wanting one hospital or one school which is excellent. They are claiming that they are moving away from older tools but I would humbly suggest that in fact this is far from the case. The ideology is imposed from the top with little freedom to do what needs to be done for the people actually doing the work.
In 2011 one of the UK’s most respected systems thinkers, John Seddon, wrote an open letter to Duncan Smith predicting the failure of the Universal Credit scheme. You can read a copy of his letter here. The letter is an excellent summary of his book Freedom from Command and Control, as is his submission to the Public Administration Select Committee on public service reform from November of last year, in which he wrote that
I warned Duncan Smith he was bound to fail at the project’s inception I also explained that you need people to provide high-variety services and doing so drives costs away, to astonishing levels. I explained how local authority benefits offices provided useful evidence: benefits being processed in days, not weeks or months, and people being treated as people, not mere claimants I offered his DWP project leaders an insurance policy; I would help a local authority benefits office develop a human-interface service to deliver Universal Credit without an IT system. I predicted it would be running in months (not seven years as planned) and would be a far superior service with lower costs.
But these proposals don’t match the government narrative. Duncan Smith has to deliver digital by default, irrespective of the consequences.
When an organisation, or a complex ecosystem of stakeholders manages to achieve a unified vision based on delivering extremely high levels of service, be they clients, customers or members of the public, the results can be remarkable. For example, in 2004 in Scotland, the West Lothian Criminal Justice Project was commissioned by the Lothian and Borders Criminal Justice Board in June 2004 to try to improve the summary justice system through a systems thinking methodology. The full report of how the project team solves these challenges can be read in the report here - West Lothian Criminal Justice Project – Final Report.
In taking a systemic approach, the project achieved dramatic results. For example end to end times from caution and charge to disposal reduced from an average of 21 weeks to 8 weeks. The table above shows many other processes which were redesigned, and the processes are all measured in days. As you can see, the impact on the efficiency, costs and use of resources was massive. Not only were the quantitative results remarkable but staff throughout the system were both positive and confident about the changes and did not want to return to the previous arrangements.
If you read the report you will see that there were three key deliverables based around the Vanguard Consulting process of Check – Plan – Do. This is very closely related to what I teach which is the Holonomic Processes of See – Plan – Do. So often we jump into planning without considering the process and the dynamic way of seeing. It is not without reason that one half of our book Holonomics: Business Where People and Planet Matter is dedicated to the act of seeing. Without mindful awareness of how our seeing is intricately linked to the way in which we conceive the world, we will never break our of the mental straight jackets imposed on our thinking.
It takes time and effort to do so, and this is why companies such as Google are investing in mindfulness training. The business case is compelling. It is not just about financial performance, it is about reducing waste, making organisations more resilient and sustainable and happy and rewarding places to work. So if we come back to where we started, we saw that Mackba has excellent in developing the customer experience around the business of achieving physical excellence. They have a holistic vision, and their focus on the customer experience is something we can learn from in thinking about the entire experience of every point of contact between our customers, clients and stakeholders and our own businesses and organisations.
Business Design really involves a deep dive into every aspect of our business, its products and services, but we have to take heed of Henri Bergson’s observation that the ‘The eye only sees what the mind is willing to comprehend’. If leaders are to truly enact deep and profound transformations, they first need to be mindful of their own thought processes, and only then can they move into a transformation of the external world.