Friday 15 February

The last few weeks have all been about finalising the budget for ’13-’14. You will have read the highlights and key messages elsewhere, our Leadership column, The Wire – even the Cabinet papers. In local government, we get a little obsessed with budget setting – I sometimes think that it becomes our sole purpose as an organisation, at least for long periods. Now that it’s out of the way we can think about our next business plan – the one for the period 2013-17. As I keep saying to those attending staff induction sessions, the biggest challenge we face as an organisation over the next four years is not financial, but behavioural (although I am hearing that government will cut our funding again by a further 30-40% over the same period). We need to think and behave very differently to meet this challenge. If we can, then the money will take care of itself.


To illustrate this I wanted to share with you a great article by one of my heroes, Tripp Babbett. Tripp is a systems thinker and perfectly, I think describes the problem we face and the thinking we need to adopt to address it. It would be great to hear your views about this. Please email me...

“The rhyme we all learned as children rings in my ears: Humpty Dumpty sat on a wall / Humpty Dumpty had a great fall / All the king’s horses and all the king’s men couldn’t put Humpty together again. I like to use Humpty Dumpty to describe companies that have functionally separated their work. These companies group similar tasks together, which shatters any cohesive workflow. For service industries especially, this can be extremely counterproductive

My British colleagues describe this as “functional specialisms.” I call it the Humpty Dumpty Syndrome. Regardless, the functional separation of work has long penetrated the design of most organizations. Functional separation is in our DNA. Frederick Winslow Taylor and proponents of scientific management introduced this design of breaking work into functions and optimizing the pieces. Scientific management theory was a breakthrough—100 years ago. A century later our work structures are still designed in the same way except that modern organizations grapple with information technology (IT) more often than physical layout.

As organizations attempt to manage the increasing dysfunction of these archaic designs, more analysts are brought in. They know how to break things down into pieces, but like the king’s men, they can’t put things back together again (i.e., synthesize). Ultimately, the pieces don’t work well together, and sometimes they don’t work at all. W. Edwards Deming used the word “suboptimization” to describe the phenomenon.

Organizations increase their costs by clinging to outdated thinking and design. A company’s bottom line takes a direct hit when customers must struggle to navigate through various departments to find answers to their issues. Getting lost in a quagmire of electronic voice routing and speaking to multiple specialists to resolve a single problem makes no sense.

Like an archaeological find waiting to be uncovered, many organizations have buried incidents of some poor sap who called in to get his problem solved. One service organization I know of had a customer who made more than 25 contacts over nine months to get an issue resolved. When customers have to work so hard for service, they begin to look for other hassle-free alternatives.

Some will say this is an accountability issue, that the person who answered the first call should have solved it. However, management is responsible for the work design that prevents a customer from getting her problem solved on the first attempt. Ownership must be built into the design of work itself. Outsourced back offices and other organizational “parts” have become commonplace. Misguided management believes it is saving money with this approach. However, managers fail to realize the effect multiple calls have on customers or the loss in revenue from customers who walk away—and there are many.

Contact centre agents must be able to work problems through to completion, and they need access to resources to do so. Too many agents simply add information to a database and pass the caller on to someone else in the organization.

Although it has been labeled as the glue that holds the pieces together, IT has exacerbated the problem by locking in the waste of a separated work design. My experience has been that IT makes things worse by being poorly designed from the beginning, and the problem is aggravated every time a new functional patch is added.

Looking at software development, we can see the Humpty Dumpty Syndrome at work there, too. The process has been fragmented. Business analysts write requirements, developers do the coding, testers make sure it works (whatever “it” is), and then we need project managers to put a plan together so that deadlines are met. The result is cost overruns and software that doesn’t enable the work. The work design is ignored in favour of schedules and managing scope and costs.

Functional separation is one reason why process improvement is so futile. The problems that need to be tackled by organizations are systemic and not process-related. Today’s organizational problems are larger—and strangely, much simpler—than we make them out to be. Trying to solve them by separation of work is like bringing a knife to a gunfight.”

For daily updates, discussion, personal opinion, comment or just to connect or keep in touch you can follow me on Twitter at http://twitter.com/#!/drcarltonbrand.

Thanks for reading and we’ll talk again in a week or so.

Carlton