I was deeply troubled to hear from Wayne Swan on the TV news Friday night that when questioned as to why he’d left out the lower paid people of Australia from the federal stimulus package he answered, somewhat acerbically, ‘we did it for administrative simplicity’! And there you have it. The entire problem for Australians in a nutshell. Leave out those most in need because it’s too difficult administratively.
SHOULD OUR representatives focus on meeting taxpayers needs and therefore direct government operations to meet those needs, or should they focus on public service constraints and difficulties, and explain to taxpayers why things cannot be done?
To determine a path for useful improvement, we need to identify any gap(s) between what is and what should be. Such gap(s) help us work out what to do to improve our situation.
A recent revolution
Over several decades, apparently missed by Australia, large and successful multinational corporations discovered the obvious – that without customers their businesses were meaningless – unwanted and unnecessary.
No customers – no business. Simple.
Some industries decided to reconceive their operations from the customer up through the entire supply chain that was required to meet the customer’s requirements. Identifying the whole supply chain, and the use of proven techniques to massively increase service and product quality were both called ‘revolutions’.
As a result of these activities, industries saved massive amounts of otherwise wasted money and achieved superior business results because customers became more satisfied with their offering.
The case of Motorola and their personal pagers was a much quoted one.
Because each personal pager was unique, Motorola took around 52 days to produce one. Trouble was their pagers were suffering too many errors while replacing a faulty pager for a customer took another 52 days – plenty of time for more errors to occur, more costs to be incurred and more customers to be unhappy.
Upon analysing their pager business, they soon learned that too much can go wrong in 52 days, too much handling, too much moving around, too many opportunities for dust to settle in the works. They needed to cut down the production time which had built up by various groups operating to their own convenience to carry out their part of the process.
After several cycles of re analysing and modifying the entire business, Motorola cut the time of their pager production from 52 days to 1 hour! You can imagine the cost savings that went along with those time savings. And if there was a fault, another personal pager could be produced while the customer was getting a cup of coffee!
This was a typical result of focussing on the customer and on getting it right first time – every time, which cut costs because errors and rework were virtually eliminated.
Customer aware CEOs led their businesses into success upon success, posting profits through massive cost reductions and increased customer demand. They did this by recognising the supremacy of the customer. One new CEO of an ailing airline, when shown lines of Boeing jets described as ‘company assets’, famously remarked that they weren’t assets, they were liabilities until and unless customers could be found to pay to fly in them. He understood that it took customers to convert those liabilities into assets.
It is the leader’s understanding of the importance of satisfying the needs of the organisation’s customers that drives the process of change because it focusses the staff’s mind on what’s important – customers and meeting their requirements efficiently and effectively.
Governing for the community
Government is only slightly different to business in the primacy of customers. Taxpayers are forced to pay tax, they don’t have a choice as business customers normally do. But there are many points of similarity.
Without taxpayers government is meaningless and unnecessary. Taxpayers are needed to fund every activity of government – without their payments governments will grind to a halt. The best way to get more revenues is to help taxpayers to earn more money – create better infrastructures, remove legislative impediments, cut taxes and imposts on business, and make Australia an attractive business proposition for all scales of business. That’s how Singapore shifted from cows in the streets, to a major economy in its own right.
By concentrating on helping businesses, communities and taxpayers to succeed – governments can create the conditions for a more successful Australia.
Just increasing taxes, rates, charges etc., simply impoverishes the population and makes it progressively harder for businesses to operate or invest. It takes from the successful value creators without reference to the overall effects on communities and Australia as a whole.
The difference between the two approaches is huge – one empowers the people to succeed, the other is parasitic on those who produce value.
A transition from one to the other is usually a matter of leadership. Note how the US slid backwards after the transition from Clinton to Bush. Bush was a ‘leader’ who approved torture, assaults on poor countries, tax breaks for the wealthy, and open slather for investment bankers – the result is the US we see today.
How are we doing?
Sometimes the statements of the ‘leaders’ imply that they care about customers but their actions are different.
Here’s Queensland Rail GM of passenger services, self-description in conference promotional materials…’Paul Scurrah intends to take QR Passenger from near enough to good enough with a ‘practice makes perfect’ customer service focused philosophy’.
In the real world here’s something else he said (1) ‘It is not the best way to run a public transport operation where your sole focus is on-time running’. What about the costs to business and commuters waiting for late or non-existent trains?
But wait…there’s more…’Fare refunds if train services were more than 15 minutes late, (something being pushed by the Rail Back on Track lobby group), would cause ‘more effort than deliver benefits”, he said.
A leader that is not committed to customer service soon gives away their real priorities.
In John Halligan’s ominously titled report (2) ‘The Centrelink experiment: Innovation in service delivery’, we read that there’s ‘a tension between efficiency and customer needs’. He describes the need to be both efficient and effective as a constraint – as if one tends to obviate the other.
These kinds of linguistic problems appear in many writings.
There is no conflict between efficiency and service delivery – witness Motorola’s approach above. The idea is to deliver required services efficiently because that saves money, increases profits and increases customer satisfaction.
He also suggests that governments are asking too much by wanting both efficiency and effectiveness, yet Motorola (and many other companies) achieve both because both are required.
Imagine a watch that was efficient but not effective, never needs winding but always wrong time.
Or a watch that was effective but not efficient e.g. needs winding every 10 minutes.
Both are nonsense ideas, particularly when we can buy watches that are both for $25.
The failures of leadership lead to reports like Halligan’s, they focus on supplier problems and preferences, fail to explore the world of the customer and sympathise with internal management difficulties. They seem to be written to assure the authors more work because they fail to make propose ideas and directions that would achieve breakthrough performance.
I suggested the title was ominous because so many people have reported that Centrelink is anything but innovative. It is mainly reported as inefficient, bureaucratic and controlling (3).
Links to the top
I was deeply troubled to hear from Wayne Swan on the TV news Friday night that, when questioned as to why he’d left out the lower paid people of Australia from the federal stimulus package he answered, somewhat acerbically, ‘we did it for administrative simplicity’! And there you have it. The entire problem for Australians in a nutshell. Leave out those most in need because it’s too difficult administratively.
Our public servants aren’t ready to serve that need therefore it’s too hard.
Many taxpayers would imagine that we’re paying public servants to be inconvenienced by serving the needs of the public – that highly paid administrators would organise their affairs so as to make serving the public easy and straightforward – that they’d create systems that served the public needs.
Instead we seem to be trapped in a pre-1980’s world where service convenience rules supreme, where the ‘tension between efficiency and customer needs’ is resolved by choosing to ignore any of those needs that are deemed difficult or not worthy.
Real leaders (as opposed to those in name only) have followers, and the leaders attend to the needs of their followers recognising that without them, they’ll be on their own. Political leaders would be well advised to attend to the needs of their constituents – they are more likely to fail when they ignore their followers in favour of the problems of public servants. Instead of relying on focus groups, they should rely on personal contact and experience with the issues facing their electors.
Leaders understand that to inspire change, they need to demonstrate that there will be real benefits from the change, that the work is difficult but worthwhile. Obama is still looking promising as a leader. Refreshingly, he admitted errors and commits to work on them (4). How rare it is for an Australian politician to do that.
Another key for leaders is to set customer expectations to achievable levels, and to then inspire their organisations to produce that level of service. Of course, this takes skill and commitment, something that I think it’s fair to expect from Ministers being paid high salaries and multiple benefits.
Wayne Swan neither sounded, nor looked, like a man who could inspire Treasury to change its performance, he sounded like an apologist for the status quo.
Can someone like that really cause the system to improve? Can they really represent the needs of taxpayers at the highest level?
The effective leader assures that the needs of customers are met by the organisation that they are leading. They take the voice of the customer to the highest organisational level. Look at how Richard Branson operates – he doesn’t keep explaining that his airline can’t cope with customers – he gets the problems sorted out and keeps on flying.
Let’s face it, the various bureaucrats and department heads don’t need our politicians to represent them – they have the position and access to represent themselves.
The public doesn’t need to pay politicians to reiterate what bureaucrats have told them – the bureaucrats can tell us themselves.
What the public needs is for politicians to listen to them, understand their needs then go forth and assure that as many of those needs are met as possible – then to shift the barriers to improve on what was possible. That doesn’t mean ‘focus groups’ – it means personal contact with ordinary citizens, and not at special dinners costing thousands per head but in the world of the citizen but on the factory floor, in the workplace, on the farms, in the fields.
The opportunity is massive, indeed GetUp reports that 86% of Australians do not believe that their politicians represent them.
It would be refreshing if Rudd’s team would genuinely take up the cudgels on behalf of citizens and start their own ‘taxpayer revolution’ by assuring that public services worked for the wider public good, not just a few selected industries.
We’re seeing what is – the state of the current system. We have learned what can be from practical lessons in important industries all over the world.
Can Rudd make the transition from bureaucrat to ‘voice of the taxpayer’? Can he deliver?
Watch this space.
Mike Bolan Mike is a complex systems consultant, change facilitator and executive and management coach.
5. For a start on the quality revolution see http://en.wikipedia.org/wiki/Edwards_Deming