Wednesday 11 February 2015

Will a focus on costs damage services and increase overall expense?



There is an interesting article on www.bailiwickexpress.com: The Health department has missed a deadline set by the States to publish long-awaited plans for reform of the health service and a new way of funding it by the end of 2014. (See Link 1 below)

This is something broader than the States’ Lean Programme, but what is interesting is that the Lean Programme appears to have seen silo improvements without significant overall improvement in services and reduction in costs.

There is evidence that the focus on process and costs distracts from the provision of “right-first-time” service and ironically drives up costs as organisations “improve” what they deliver without checking that’s what the customer actually needs.

Whilst I could cite many examples , I think it is more instructive for people to read, study and understand for themselves. I have amassed a good library of texts on Lean and Systems Thinking which I am willing to share freely with anyone who contacts me. One of the more interesting documents is the transcript of a Scrutiny Panel at which Professor John Seddon spoke of Lean versus Systems Thinking and made a number of predictions about the former and some insightful case studies of the latter. (See Link 2 below)

I do believe that the credibility of Lean is at risk if it is only parochial and about process and not joined-up and about service. This is where the real need and opportunities exist.

With the current focus on government budgets the emphasis should not be “reducing costs” but delivering really efficient service.  What’s the core purpose of H&SS?  If it becomes to reduce costs then this drives one set of behaviours   if it’s “to deliver a really efficient service” then the behaviours align

Arguably if we deliver exactly and only what the customer actually needs, costs will go down, service will improve. If we don’t do this we will simply clog up the system with “failure demand” i.e. work and cost which is associated with service being late, wrong, insufficient, needing re-work, needing repeat, unproductive calls, more visits etc. This is a waste of time, money and talent.

We all (as customers) have plenty of experience of this, and it is expensive and frustrating!

This also applies to start-ups: many do lots of work, and incur lots of cost that don’t actually add value to the bottom line. Sadly this means that good ventures run out of cash not because the idea wasn’t great, but because the start-up funds were frittered on stuff that doesn’t matter until much later. (eg added features, marketing and promotion etc., ie things not central to the core product)

ciChange is keen to support and promote discussion and thinking as well as suggested tools, techniques and guidance that can help businesses and government. I should like to acknowledge with great thanks the contributions of Will Carnegie ( Lighthouse Consulting Group ), Jeremy Cross (Bailiwick Consulting), Kenan Osborne (Marbral Advisory), Dale Ibbotson (3D Performance), Kevin Keen, Lynne Capie and others. If you would like to contribute, potentially to a workshop/seminar event about Lean, Systems Thinking and/or Public Sector Reform please get in contact.

LINKS

http://www.bailiwickexpress.com/jsy/news/health-miss-key-reform-deadline/?utm_medium=email&utm_campaign=Bailiwick+Express+News+-+Tuesday+10+February&utm_content=Bailiwick+Express+News+-+Tuesday+10+February+CID_2751f2d977d248216248bc1be83b70c7&utm_source=Email%20marketing%20software&utm_term=Read%20More#.VNstvr4hzdk

http://www.statesassembly.gov.je/ScrutinyReviewTranscripts/2011/Transcript%20-%20CSR%202012-2013%20and%20Delivery%20-%20Mr%20John%20Seddon%20-%2011%20April%202011.pdf




MORE INFORMATION
I have tried to keep this blog to one-side A4, but brevity is not my strong point. I have a lot more information, including supporting documents and other references. If you’d like to see the long version of this or if you are interested in further material please do not hesitate to contact me.

ABOUT CICHANGE

ciChange is a not-for-profit forum for ideas and discussion, about all aspects of Change Management, including people, processes, teams and leadership. It is a place to share and exchange models, papers, ideas and information about change. We’ve run a number of FREE, well attended Breakfast Briefings.
ciChange is sponsored by Total Solutions Group http://www.tsgi.co/

Tim HJ Rogers
Mob 07797762051
Skype timhjrogers


Web: http://www.cichange.org/
Linked-In http://www.linkedin.com/groups/CI-Change-4301853
Twitter: www.twitter.com/cichange @cichange

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