Four Factors Hindering Transformation

The problem with good service design is that you don’t notice it.

It’s only when you experience truly bad design that you appreciate the good stuff.

That’s why so few organisations are design led. They focus on designing out the bad rather than designing in the good from the beginning.

Earlier this week I ordered a package – to be delivered from the Royal Mail.

It required a signature so I arranged it to arrive on Thursday when I planned to be working from home.

On Tuesday morning the Royal Mail sent me an SMS and email to say they were pleased to announce that the item would arrive earlier than expected.

They might well have been pleased at the early arrival, but I was 60 miles away and stuck in a meeting. There was no option to request a redelivery. No option to even cancel it. Just accept an inevitable failure. 

Any redelivery could only be attempted after they had first failed to deliver it.

Here was a company actually wasting the time of their employees and their customer – and seemingly proud of it.

In defence of Amazon and Uber

It’s easy to criticise the likes of Amazon and Uber for their ethics , but we forget at our peril the benefits these providers have bought us.

But they don’t pay taxes! As if no company ever evaded taxes before Amazon.

But they exploit workers! As if taxi drivers were never exploited before, or resisted the opportunity to exploit us customers.

We shouldn’t let these type of companies off the hook for their transgressions, but neither should we forget what life was like before their breakthroughs in customer experience.

Getting a delivery within 24 hours or not having to queue for a taxi now feels so normal that one starts to wonder why it took so long.

The incumbent companies they disrupted all had the same money, time and technology to change the way they did business, but they resisted the opportunity to shape themselves around what customers actually wanted.

Why digital transformation isn’t enough

Richard Godfrey makes a similar point about the failure of banks to reimagine their services. Setting up a new account in most cases still requires a bank visit, or an e-form or a phone call at the very least.  How can that still exist in a world where you can sign up for a Monzo or Revolut account in minutes by downloading an app and proving your identity and address with image capture software and facial recognition?

As Richard points out, most ‘transformations’ are nothing of the sort, but simply a digital overlay on top of how business has always been done. He wonders why the process of claiming housing benefit can’t be made so easy. Of course it can, people just don’t want to make it easy.

As someone who has worked to redesign services from the ground up, putting the customer in control, I’d say you can’t underestimate how difficult this culture change required is.

Many of our organisations – despite the rhetoric – have policies and procedures that are profoundly anti-customer. We have built checks, balances and verifications into our process because , deep down, we don’t actually trust the motivations of the public.

This is an uncomfortable truth – but goes some way to explain the difference in satisfaction levels between some of the public and private sector.

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A new post from McKinsey finds that whilst many the public sector and governments are moving forward with customer experience initiatives, in general private-sector organisations are a lot better at providing services.

I don’t always agree with the private/public distinction but some of the stumbling blocks they identify are helpful. The common traits that prevent genuine transformation are:

  1. A monopolistic mind-set. When customers don’t have a choice, it dramatically removes a major incentive to innovate and improve service.
  2. The public sector have to be fair to everyone.  They can’t just ignore certain customer segments. This ‘fairness’ often solidifies over time into a principle of providing one-size-fits-all service. Or rather, one-size-fits-no-one.
  3. We often lack the capabilities needed to assess and address gaps in customer experience. Those with deep analytics skills, as well as human-centered design skills, are often in short supply.
  4. Data is typically incomplete or sequestered in silos. Organisations often lack a full, timely picture of the customer’s overall experience.

This ‘fair for everyone’, but exceptional for no-one, agenda presents a genuine design challenge. The capacity for innovation for huge, but the capability for it is virtually zero.

It’s hampered because innovation requires a tolerance for failure , and upsetting people.  It’s too easy to see the short-term political consequences of initiatives gone wrong and debate whether public money is going down the drain.

However we have a responsibility to take risks – we need to cultivate a culture of innovation, and sometimes that means spending money trying new things, and being ‘unfair’ to some people.

What if Uber and Amazon did health, housing and social care?

Three years ago I wrote a post speculating on that very question – it remains the second most popular piece on this blog.

I don’t stand by everything I said back then, but I do agree with the final point.

Any sector that has multiple players performing similar services is ripe for disruption.

There’s no question about whether the Uber , Amazon, Facebook and Alibaba of the public sector will emerge.

It’s simply a matter of when.

What We Can Learn From The Oldest Companies in The World

Shigemitsu Kongo, a Japanese Buddhist temple builder, formed his construction company Kongo Gumi in in 578 AD. His company built relationships with their customers that lasted for 1,400 years, surviving through many wars and natural disasters,  just like their temples.

It wasn’t technology that nearly killed the company, but cashflow. The oldest company in the world became a subsidiary of Takamatsu Construction in 2006.

There’s a very good chance you will outlive the company you work for. Whilst our life expectancy is increasing, the lifespan of organisations appears to be in decline.

The average age of a company listed on the S&P 500 has fallen from almost 60 years in the 1950s to less than 20 years today. Only 30 of the original companies still exist in 2019, the 35th anniversary of the FTSE 100.

Disruptive technology is killing off older established companies at a much faster rate than ever before.

This is why when you go to conferences you’ll see presentations selling the virtues of Uber, Amazon, Netflix and Google.

Be like them the wisdom goes. Be agile. Only by doing as they do may you survive.

This is only half the story though.

Rarely , if ever, do we look at the companies that are bucking this trend. The companies who have been around forever and are still doing business.

A look at the oldest companies operating today is fascinating.

Worldwide there are over 5,500 companies that are over 200 years old. However the distribution of these is heavily weighted to just a few. Japan dominates the list (3,146), followed by Germany (837), then the Netherlands (222), and France (196).

I started this week staying in Düsseldorf, Germany, in a district known as “Little Tokyo on the Rhine” — one of Europe’s largest Japanese communities. I was there to talk to European students about the opportunities of smart cities , but I concentrated more on the possibilities of building upon the wisdom of communities that have existed for generations.

It’s deeply unfashionable to talk about , let alone revere, older things today. It’s almost like innovation started with the iPhone and disruptive companies began with Uber.

My week ended with a visit by the Disruptive Innovators Network to Bromford, who at 56 years old is barely out its pre-school stage in Japanese or German terms. It was interesting to hear in the talks by Helena Moore and John Wade how there was almost an apology for referring to things we had learned more than five years ago, as if we were becoming embarrassed by the weight of our own history.

We shouldn’t be though. The right culture for innovation is one where there is:

  • Just enough friction – with teams having regular, intense debates
  • The practice of high standards, with a steady supply of high performing people who are committed
  • Permission to be different – a culture where it’s allowable, even encouraged, to push back. 
  • The ability to think and act experimentally with a tolerance for failure through practical experiments

However it’s also a culture that creates a feeling of belonging and a feeling of purpose.

Why have so many Japanese and German businesses lasted so long?

A study by the Bank of Korea found that such companies thrived over the years because they created new demand while sticking to a corporate culture that promoted tradition, attention to detail, and frugal innovation.

Instead of going after short-term results, they pursued longstanding trust with customers and partners. They also pursued growth within their means, rarely borrowing to expand.

In his book The Living Company, Arie De Geus attributed the success of older businesses to four factors:

1. Long-lived companies were sensitive to their environment and remained in harmony with the world around them.

2. Long-lived companies were cohesive, with a strong sense of identity. No matter how widely diversified they were, their employees felt they were all part of one entity.

3. Long-lived companies were tolerant and generally avoided exercising any centralised control over attempts to diversify the company.

4. Long-lived companies were conservative in financing. Frugal even.

However his strongest point is contained in one sentence “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans.”

It’s time to stop worshipping the new and the shiny. We need to strike a delicate balance between continuation and innovation, being reliable and disruptive at the same time.

Creating a culture where these two competing sets of values can coexist is difficult – and not always a comfortable place to be.

Clearly though , the innovation potential of us older lumbering giants is vastly under appreciated – and the disruptive power of the younger and hungrier is often overstated.

The Rise Of Business Bullshit – And How We Can Fight It

“One of the most salient features of our culture is that there is so much bullshit. Everyone knows this, but we have no clear understanding of what bullshit is, why there is so much of it, or what functions it serves.” – Harry Frankfurt  On Bullshit

Many people in the social sector will have heard about the 80/20 rule –  that 80% of the demand comes from 20% of users.

It’s one of those things that seems to intuitively make sense. If we can solve the problem of the 20% of people who are sapping all our resources – then the world would be a much better place.

Except of course….it’s bullshit.

Recent work by our own Insight team found the belief that a small group of users were responsible for a disproportionate amount of contact with us simply had no foundation.

So why do these myths – dangerous in that they lend themselves to silver bullet solutions – swirl around the modern workplace?

John V. Petrocelli is the author of a new paper which looks at the Antecedents of Bullshitting and the conditions that need to exist to encourage people to bullshit. 

First of all, bullshitting is not the same as lying, which is a deliberate and premeditated attempt to conceal the facts.

By contrast, bullshitters may or may not know what the truth is. They are simply communicating with little or no regard for evidence, established knowledge, or truth.

Petrocelli ran two experiments that revealed major factors that might cause someone to bullshit:

  • Firstly, people bullshitted most when they felt pressure to provide an opinion and believed their audience didn’t know much about the subject. Even though they may not have the knowledge or experience to have an informed opinion, the social pressure to contribute something kicked in.
  • Secondly, if there is no accountability for bullshit, it’s more likely to happen.  People appear to be more likely to bullshit when it’s perceived as acceptable or relatively easy to do without challenge.

As Petrocelli says – it seems unlikely that people are generally ready to admit to bullshitting, so it’s even more important we understand the psychological processes that both enable people to communicate with little to no concern for evidence as well as the processes that explain why people accept so much bullshit without questioning its validity.

So how can we stem the flow of BS and encourage people to challenge its validity?

Four Tactics That May Reduce Bullshit

Get Better At Problem Definition

Many of our organisations have a bias towards getting quick answers. We favour execution rather than contemplation. Great performance at work is usually defined as creating and implementing solutions, not finding the best problems.

So we need to build a culture around asking:

  • Is that really true?
  • Do we honestly know that?
  • Where’s the evidence on that?

Simply calling each other out on potential BS has to become a leadership behaviour.

Hold Fewer Meetings

Bullshitting is hard work. It requires the capacity to continually come up with new, over-packed, ambiguous concepts -so said Andre Spicer

As Spicer points out managers and employees can spend large chunks of their day attending meetings or implementing programmes actually disconnected with the core processes that actually create value.

Pointless meetings are a breeding ground for bullshit – something that’s been known for a long time. In 1944, the CIA’s precursor, the Office of Strategic Services, created the Simple Sabotage Field Manual that was designed to advise Europeans about effective ways of frustrating and resisting Nazi rule.

It advises people to “talk as frequently as possible and at great length,” “bring up irrelevant issues,” and “hold conferences when there is more urgent work to do.”

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Meetings are often opinion, rather than evidenced based.

Stop Asking Everyone’s Opinion

The modern organisation is obsessive about collaboration and consultation – but encouraging everyone’s opinions on everything invites bullshit.

Social media should have taught us by now that more opinions aren’t necessarily better.  We’re inclined to believe what we see on social media because it comes from people we trust: our friends, our family, and people we have chosen to follow because we like or admire them. However, most of us know deep down that what our families and friends say is hardly ever evidence-based.

The same applies to work. More consultation = more bullshit.

Ban PowerPoint

Presentations at team meetings are the modus operandi of the skilled bullshitter – and used to propagate all sorts of half-baked propositions in a way that few would dare challenge.

Not for nothing does Jeff Bezos ban presentations at Amazon -insisting that Powerpoint-style presentations give permission to gloss over details, flatten out any sense of relative importance, and ignore the interconnectedness of ideas.


There’s one big tactic for battling bullshit that Petrocelli identifies:

Evidence.

Certainly, we’ve become much more focused on being an evidence-based organisation – as Carole Clarke writes – we increasingly need to become more rigorous in how we evaluate the impact of our services so that we can say with a lot more confidence that things work.

We need to bust myths. Slay Zombie Projects.  And wage war on jargon.

An indifference to evidence breeds an indifference to the truth.

Nudging our organisations towards a more evidence-based culture becomes the surest way to stem the flow of bullshit, if not kill it.

Why Small Teams Win

In the early days of Amazon, Jeff Bezos came up with a rule: every team should be small enough that it could be fed with two pizzas.

The ‘Two Pizza Rule’ signalled that Bezos didn’t want more talking, more line reports and more communication. He wanted a decentralised, even disorganised company where creativity and independence prevailed over groupthink and the bureaucracy of management.

A smaller team spends less time managing timetables and keeping people up to date, and more time doing what needs to be done.

These small teams promote autonomy but also a better approach to collaboration. Having lots of small teams means they all need to be able to work together and to be able to access the common resources of the company, in order to achieve their larger goals.

The thinking has precedence in things like Brooks’ Law – which states that “adding manpower to a late project makes it later.” Getting bigger often means your communication overheads grow and doesn’t necessarily yield faster results. As Brooks himself said: “Nine women can’t make a baby in one month.”

Thinking small also avoids ‘social loafing’  – which is where people take less accountability for individual and team performance when doing work as part of a group.

It’s human nature that some of us may take advantage of a situation in which it’s harder to pinpoint responsibility—a situation created by the fact that too many people have a role in the team’s performance.

When nobody’s noticing what you are or aren’t doing, the easier it is to keep doing nothing.

As a leader of a Two Pizza Team, I can firmly say that the high degree of “identifiability” means there is no room for anyone to hide – including me. Underperformance becomes apparent in days or even hours, not over weeks or months.

The Value of Small Teams in Change and Transformation

In many organisations, small teams are undervalued. Like introverts, they can often be overlooked.

Yesterday I facilitated a session for the regulator of social housing in the UK – and its theme was that in an age of big change (and arguably, big failure) – small distributed teams might be an answer to how we balance productivity and innovation.

Buurtzorg, the Dutch model of neighbourhood care started with an initial team of four. The system that evolved deploys teams of up to 12 nurses, who are responsible for about 60 people within a particular area. There are now around 900 teams in the Netherlands. This system balances small team thinking also whilst operating within a much larger framework.  The framework is what provides the scalability, the autonomous team provides the personalisation.

RSH Session (3)

Buurtzorg was very much an inspiration for our model of neighbourhood coaching – which again provides a framework for semi-autonomous small teams to bring solutions together around a community. It puts people at the centre – not housing ‘professionals’.

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The Corporate Rebels have written about the Minimum Viable Team. Start small, get experience, grow bigger only when necessary.  I agree with this but also think there’s crossover with the points Chris Bolton makes in his post on Minimum Viable Transformation.

Most transformation programmes are about BIG ideas (and BIG language), where there is little room for failure.

Most approaches to organisational design are about BIG teams (and BIG resources) – despite no evidence linking these to productivity or innovation.

  • Maybe it’s time to think differently about how we solve complex problems rather than continue the endless annual cycle of calls for more resources and emergency injections of cash.
  • Maybe it’s time for smaller, more organised and better-connected teams to take centre stage.
  • Maybe it’s time to think about what minimum viable teams and minimum viable transformation look like and apply them in practical settings.

At the end of the day, radical innovation only comes from diverse networks, never from big teams.

Avoiding The Yo-Yo Effect of ‘Corporate Change Convulsions’

Speeches you never hear at a corporate conference: “….. Our Transformation Programme is going to be small and imperfect. We are going to do many small things that probably won’t work straight away.’ – Chris Bolton

In the early 1960s, a New York housewife named Jean Nidetch began a weekly meeting with friends at her home to talk about their issues with dieting. She was a ‘cookie addict’ who had struggled for years to lose weight through a succession of fad diets.

Her weekly meetings helped her lose nearly 10kg in a year. So successful was her personal transformation that she turned the gatherings into a programme and ultimately a company – called Weight Watchers.

This began the commercialisation of dieting, creating a worldwide industry expected to be worth 245 billion dollars by 2022

The idea behind most of those diets is straightforward and obvious: eat fewer calories and you will lose weight.

But that’s not what actually happened: instead the diet trend coincided with mass weight gain and the beginnings of the obesity epidemic.

According to research, most dieters will regain almost all of what they lose – which is why the typical dieter tries a new bright and shiny personal transformation plan four times a year.

Change fails, try a new approach, spend more money.

A few weeks ago I wrote The Big Problem With Change Programmes – my most popular post for a year. It drew a lot of responses and messages. Here’s a selection:

“There’s a sense of complete deja vu – we’ve been here before and because the last one didn’t work it’s hard for even the most positive of us to be excited.”

“Change programmes are an industrialized construct and, as such, they are rarely culturally insightful because they often fail to get under the skin of the deep issues around how a group of people adapts and changes.”

” Our organisation are doing ‘change theatre’ – spending a lot of money on consultants helping us address things that will change the organisation as little as possible. The big complex issues are being ignored.”

The common theme – hired help brought in every few years to sort things out – is well illustrated by Ian Watt who describes regular ‘corporate convulsions’ that fail to transform anything – as predictably as a January diet.

Does Big Consultancy Really Work?

One of the reasons it’s hard to evaluate the relative success of change programmes is very few organisations share what actually happened, how much they spent, and almost none share which ones failed.

Similarly, the use of big consultancy is shrouded in mystery.

According to the main industry body in the UK, the Management Consultancies Association (MCA), for every £1 spent on consulting fees, you can expect £6 in return.

However, a new study by Ian KirkpatrickAndrew Sturdy and Gianluca Veronesi challenges that view.

What if consultancy is actually making you more inefficient?

The study – across 120 NHS trusts – showed that management consulting didn’t make the organisations more efficient – it had precisely the opposite effect.

NHS yearly expenditure on management consultants almost doubled from £313 million in 2010 to £640 million in 2014.

The study shows that in some cases spending on management consultants did improve efficiency, but overall consulting use generated inefficiency, thus making the financial situation of clients worse.

Although the inefficiencies were relatively small it doesn’t take into account the amount of money paid to consultants and – perhaps more importantly – the huge amounts of time and resource involved.

It notes that NHS organisations have been either unable or unwilling to engage in the formal evaluation of management consulting, resulting in an absence of ‘rigorous, peer reviewable, transparent data’.

The study also highlights the active role of management consultants in pushing services when there is no need for them. Change for the sake of change.

Perhaps – as Chris Bolton has written – we should instead be seeking minimum viable transformation, and change should be small and imperfect:

“Most Transformation Programmes are about BIG ideas (and BIG language), where there is little room for failure.”

These corporate convulsions are little more than crash diets, where the weight is almost certainly going to pile back on.

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At Bromford as part of our programmeOne approach, we’ve taken time to look at the case for change, redesigning all 31 service areas and mixing larger-scale transformation with small-scale experimentation.

Part of that included a lot of time spent looking at why previous attempts hadn’t worked and getting deeper into problem definition. As David Anderton has said that means convincing your organisation that you’re not that special, and not creating bespoke solutions for problems that don’t exist. We only need change where it makes a tangible difference to customers.

Amazon, so we are told, have never had a change programme.

Just as a permanent lifestyle change is a flexible, ongoing process that involves body, mind and spirit — so changing an organisation is a journey without end and not a fixed point ‘transformation’.

Why Transformation Fails – And How To Avoid It

The concept that 70% of change and transformation programmes fail emerged in the mid 1990’s. There’s actually little evidence that this is true.

The 70% figure seems to have emerged because of a lack of clarity about what success looks like – and that most people have a bad experience of them.

My contention is that programmes fail for three reasons:

Why Transformation Fails And How To Avoid It

When was the last time you heard an organisation openly talking about what didn’t work? The problem we face is that large scale transformations become too big to fail – resulting in a ‘wall of silence’ when objectives don’t get met.

The irony is that this silence is the root cause of failure – as we become eternally doomed to repeat the same mistakes.

Why Transformation Fails And How To Avoid It (2)

Most organisations exist in a fixed state of transformation – time-limited programmes of change (usually 3-5 years) rather than a flow state. 

Amazon, we hear, have never had a transformation programme. That’s because they exist in a flow state – where the culture is accepting that change is perpetual rather than something that – if we just grin and bear it – will be over in a few years.

The danger with a fixed state is that the driver becomes a business plan focused on implementation not experimentation. 

Accordingly we end up with optimisation not transformation.  Or, as Emma McGowan has said, we end up digitising the status quo.

Why Transformation Fails And How To Avoid It (3)

Too often we focus on transforming parts of organisations rather than looking at whole system change. This results in the creation of more efficient silos rather than anything fundamentally different.

There are cultural reasons for this. We have a western bias towards individualism rather than looking at the whole picture. Rice farmers in South-East Asia tend to be more collaborative and cooperative as a successful crop requires a holistic approach to nature and irrigation systems rather than just a focus on the self.

Most change programmes do not look at interconnected systems – they narrowly focus on efficiency.

Accordingly , as Andy Reeve said, transformation gets a bad reputation as it often becomes equated with fewer jobs rather than creating a different world.

The End of Change Management

Perhaps we’d achieve more if we gave up on big change. People lose heart, are daunted by the scale and the programmes lose momentum.

We need to get back to basics;

  • We need a clear vision of why we need to change and what benefit it will bring. If you step behind the rhetoric of transformation you’ll see it is usually about reinforcing existing business models rather than truly challenging them.
  • We need influence devolved to people closest to the change. Change is best served when we devolve power, and institutions and hierarchy get out of the way.
  • We need change through small experimentation. We shouldn’t initiate change without a clear problem statement and some evidence that any proposed solution would result in a net positive outcome.

And we need a new honesty about what’s not worked well. Chris Bolton has suggested a Museum of Failed Products for public services.

Perhaps we need a Museum of Failed Change Programmes too?

Surely the best way we can avoid repeating our mistakes is to put our previous ‘failed attempts’ on show for everyone to see.


This is an edited version of a talk that was originally given at #HQNFlight on 11th October 2017