Spot the Customer

The financial climate for public services has not been as good over recent years as many pundits suggest, but there is no doubt it is set to worsen dramatically over the next few and quite probably beyond. As this happens, the attraction of “more for less” theories and the temptation to embrace easy answers will grow across local government. Of course it is always important to look for ways to deliver the best possible balance between good services and low costs. It is also important not to waste scarce resources.

One way local government is sometimes very good at wasting scarce resources is in the ineffective or inefficient employment of consultants. Let me be clear, I am not opposed on principle to the employment of consultants, though if spending on them were to exceed about 1% of total turnover, alarm bells would ring, and I would ideally hope it would be a great deal lower. Consultants can be useful in delivering specific projects on which they have expertise when it would not make financial sense to employ someone in-house for a short time period, or to develop those skills internally. They also, rightly or wrongly, can be a better way of delivering hard messages to the Council – to staff or Councillors, which they would find easier to resist or ignore if they were raised internally in a similar way.

However, consultants have a number of drawbacks. Firstly, they are often very expensive in terms of cost of time, compared to internal staff. Secondly, they often turn out not to have the expertise claimed for them, and finally – worst of all in my view – they are sometimes misdirected by a Council which is unclear about what they have been employed to deliver in the first place. One example of when this can happen, perhaps ironically, is when consultants are employed in order to identify ways of saving money.

A fashionable cost-cutting theory at the moment is one arising from manufacturing, suggesting that organisations should become “lean“, following a theory which “considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination”. So far, so difficult to argue with (unless you work in the advertising or sales department, I guess). Now Lean is making the leap into the public sector, and certainly advice on saving money is welcome. However, there is a big problem. Wikipedia again;

“Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer would be willing to pay for.”

Now tell me who my customer is. For now, let’s imagine that I am working in a department providing services to children with serious disabilities. There are a string of people who might be my customer – sufficient that this is not a theoretical debate, but one any Council using this sort of method needs to be absolutely clear about before proceeding. I am not arguing against setting about the process of saving money, this is increasingly urgent, but to do so in a counter-productive way which either doesn’t save money, or later needs to be undone, may be worse than failing to do it at all.

1. The Child: I am employed to improve the quality of life of a disabled child. My success should, in principle, stand or fail on how well I achieve that, within the resources available. Of course depending on the extent of the disability and the age of the child it might be difficult for them to tell me how effective I have been. So, customer number two:

2. The Parents: They will have the strongest interest going in the wellbeing of the child, as well as hopes and fears of their own, and a potential need for ‘respite care’ if the disability is such that they are acting as full-time carers. Arguably my services are being provided as much to them as they are to the child, and therefore they should be included as ‘customers’ just as much, in any Lean analysis. However, parents will always want the best for their child, and it may not be possible to provide “the best” in every case, because the best is expensive, and there’s customer number three to consider.

3. The Taxpayer: In theory the taxpayer will have no problem with us going ‘Lean’, since while they are a customer in the sense of being the one who pays for the service delivered, there is no direct link at an individual level between the tax they pay and the service received. The parents of the disabled child might be happy to see taxes rise in order to fund better services for disabled children, but many people don’t have children, and most children are, happily, not disabled. Do I spend money on a newsletter about Council services, so that they can see what great work is being done with their money, or do I save that money so that they can pay slightly less tax, but have no idea what is being done with it? Hopefully there’s a way to cut that Gordian knot, but it lies in understanding different aspects of the customer relationship from those which will be explained by Lean. One person who might help me is customer number four.

4. The Councillor: Cabinet member, Scrutiny Chair, Ward Councillor, it doesn’t matter. These are the people who vote through my wages and the plans that set out what my service should be delivering. I am accountable to them, and clearly they will place a high priority on the outcomes for the specific customer of each service, but they need to know what those are – which means a string of activities which are unlikely to be Lean – collecting data when I could be working with children, attending scrutiny meetings when I could be attending parental meetings, and so on. Of course Councillors are not masters of their own house either, because of customer number five. 

5. The Government: Local government is, famously, a creature of statute. The services it provides are, to a very great extent, those dictated to it by central government. Furthermore, the success or failure of those services is often also judged by central measures, rather than local feedback.

While there has been some welcome progress by Government over recent years in moving to indicators of success, rather than indicators of process, there are still major problems. Collecting reams of data is not Lean. Employing people specifically to liaise with inspectors is not Lean. Directing activity to meet arbitrary targets which do not really benefit the service user is not Lean. Yet I can give examples of Councils who have commissioned consultants to save money who have wholly disregarded this, and found themselves slammed in their Comprehensive Area / Perfomance Assessment, despite their services not having worsened in any appreciable way. Unfortunately, this has a significant impact on customer number six, to whom both customers four and five should in theory be accountable:

6. The Voter: The average voter will, of course, be both a service user and a taxpayer. It is statistically likely, however, that they will pay for more services than they receive – simply because a large proportion of spending is concentrated on a small number of people – disabled young people, the very elderly, troubled families, and so on. Should we treat the voter as a customer, directing resources to engaging them more in planning services, delivering local forums, and informing them of the work of the Council, or should we treat that as non-Lean activity, and focus on pure service efficiency?

As usual I’m not trying to suggest answers to these questions – I’ll make it very clear when I think I have answers! – but I think it is important for the Council to be clear about the relative needs of these possible “customers” – as well as others with whom it engages – local businesses, other partners in the public sector, local Members of Parliament, newspapers and, heaven forbid, bloggers – in order to get value for money out of an analysis of spending and potential efficiency savings – whether delivered through Lean or any other way. 

Oh well, at least it’s not six-sigma!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s