A lot of organisations talk outside in but their systems are not designed outside in – Interview with John Seddon of The Vanguard Method

Today’s interview is with John Seddon, an occupational psychologist, author and Managing Director of Vanguard, a consultancy company he formed in 1985 and the inventor of ‘The Vanguard Method’. John joins me today to talk about his new book: Beyond Command and Control, the problem with current management practices and how we need to unlearn the way that we operate service based organisations if we want to improve the service and experience that we deliver.

This interview follows on from my recent interview – The Non-Obvious Megatrends that will affect our ability to deliver a stand out customer experience in the coming years – Interview with Rohit Bhargava – and is number 330 in the series of interviews with authors and business leaders that are doing great things, providing valuable insights, helping businesses innovate and delivering great service and experience to both their customers and their employees.

Here’s the highlights of my chat with John:

• John was a previous guest on the podcast back in January 2013.
• If you talk to people about what’s wrong with a command and control style of management, most of them would focus on the command part.
• However, the problem is actually with control.
• The controls that we use are largely derived from budgeting, which is the primary control, and these tend to send our systems out of control.
• The first step in addressing this is to help leaders understand that by studying their organisation from a different point of view they can understand that what they thought was control is, in fact, no control at all.
• Peoples’ behaviour is governed by the system. When you change the controls in the system and put control where the work is done and turn the managerial role into one that’s supporting the place where the work is done then behaviour changes.
• It’s more than getting out of peoples way and letting them do good work. Managers have a responsibility to create and run a system that enables them to do good work.
• A lot of organisations talk outside in, they talk customer. But, the reality is that their systems are not designed outside in because the primary controls are concerned with serving the hierarchy and meeting the budget.
• When you control your system with the following measures: understanding of demand in customer terms and focusing on only doing the value work and the measuring of achievement of purpose in customer terms then what you see is that your service improves as your costs fall. These are leading measures. This is totally counter-intuitive to most managers. That means cost is now a lagging measure and no longer a primary measure.
• Watch the cost dropout as you focus on doing the right things for customers.
• The first step to doing that is to study your system.
• That does not mean data, analytics, asking your people or watching your system in action.
• It means taking a customer demand and following it through your system. Look at what is the nominal value of the customer that constitutes the value work, identify where and how you do that and then address the question of why do you do all this other stuff? Answer: It’s because of the way you designed the system.
• If you stand up in a room and say to a bunch of managers that there’s a problem with targets, they map it onto their current mental model and they go, yeah, it’s about, setting the right target and having the right people set the target.
• The problem is that targets make performance worse.
• You have to think about this as system re-engineering rather than process re-engineering.
• There are lots of detailed examples in the book about organisations that have redesigned themselves along these lines and the results they have achieved.
• Don’t make the mistake of using computers for things that people are good at.
• John’s advice: if there are listeners out there who work in transactional services and you want to improve your service performance then start with customer demand. Take a day off and get yourself down the front end and study demand. But, you’ve got to work on understanding it from the customer’s perspective. You need to create a customer typology of demand, not an organisational typology of what you do with customer demand.
• If you do that you may realise that you’ve got 60% failure demand at the front end in this system. So, the question would be: Can you envisage designing a system where you have eliminated failure demand and, if so, what would you do with the resulting increasing capacity?
• John’s Punk CX word: dare to be different.
• John’s organisations that epitomise a Punk CX ethos:

About John

John Seddon is an occupational psychologist and inventor of the Vanguard Method – the means by which leaders of service organisations are going beyond command and control. He was awarded the first Harvard Business Review/McKinsey Management Innovation Prize for Reinventing Leadership in 2010 and has received numerous academic awards for his contribution to management science. He is currently a Visiting Professor at Buckingham University Business School. The Vanguard organisations operate in eleven countries.

You can grab a copy of John’s new book at the Vanguard site. It is also available on Amazon here.

Check out Vanguard’s work here and say Hi to them on Twitter @VanguardMethod.

Thanks to Kenny Louie and Wikimedia for the image.