Does Benchmarking Really Save Companies From Failure?

Even in the very best organisations, bad practice is waiting just around the corner.

In 2014 General Motors began the recall of the Chevrolet Cobalt which would ultimately affect nearly 30 million cars worldwide.

The problem was with the ignition switch which could shut off the car while it was being driven, disabling power steering, power brakes – and, crucially, the airbag.

The issue had been known to GM employees for a decade. A sixteen-year-old girl had died in a frontal crash in 2005, the first death attributed to the defective switches.

A redesign of the ignition switch went into vehicles a year later, but a simple mistake – the engineers failed to alter the serial number – made the change difficult to track later.

Ultimately the flaw would kill 124 people, and seriously injure 275 others.  Not recalling the vehicles sooner was deemed affordable in the pursuit of profit.

During this time, General Motors was leading its sector in customer satisfaction. At the same time as their cars were devastating families, they were picking up heaps of industry awards.

It’s common after the emergence of any scandal, be it VW, Oxfam, Mid Staffordshire, for us to call for tighter regulation, greater consumer controls, and transparency of performance.

But does any of this help prevent complex system failure?

The latest call is from the Social Housing Green Paper which has been published in response to the Grenfell tragedy and has been billed as a “fundamental rethink” of the system.

The government has suggested the introduction of new league tables, which would effectively name and shame landlords to highlight bad practice. The ‘power’ would shift more towards tenants and enable them to see how their landlord ranked compared with the average.

There’s also been talk of an industry wide Charter and an increasing focus on benchmarking.

Can You Benchmark Your Way Out Of A Crisis? 

Best practice and benchmarking are often just a race to be first at being average. The chances of someone else’s best practice working in a different environment is unlikely.

Not only is it unlikely but the very act of best practice and benchmarking can drive standards down. It encourages all organisations to think alike. At sector level it creates groupthink, and we all know groupthink is the avowed enemy of innovation.

Within organisations, a culture of following best practice can quickly become a culture that is frightened of doing new things. In times when we need radical solutions to big problems – trying to be more like each other is a criminal waste of time.

When Good Companies Go Bad

It’s tempting to think that tighter regulation and scrutiny prevents system failure but there’s little actual evidence it does.

There’s a problem with managing risk retrospectively: you’re always looking behind you, and often looking in the wrong places.

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This graphic from a HBR study shows auditors are rarely looking at things that could bring companies down.  Policies don’t destroy companies, toxic cultures do. But cultures are rarely audited as it’s pretty much impossible to do – it’s easier to tick boxes.

When things go wrong in organisations it’s often the result of a complex web of perverse incentives, simple mistakes and a culture of people looking the other way.

It’s almost never because there’s a singular Bond villain type saying “I’m going to do this on the cheap even though it’s bad for customers and will probably kill folk”.

Redefining Trust In A Digital Age

There’s rarely a simple solution to complex problems but I see a huge opportunity for companies to rebuild relationships around principles of trust and transparency – and this won’t be achieved by charters and following a herd like regression to the mean.

The network effect of technology has created a way for people to share experiences more quickly, and to more people with more detailed information than ever before.

Today, any customer can go behind an organisation’s flattering customer satisfaction scores with a simple Google search.

To rebuild trust organisations must adopt new behaviours to reduce the gap between organisational rhetoric and the reality.

At Bromford that means pushing ourselves ever more local and away from the corporate centre – building relationships based on openness, respect, and accountability.

  • It means abandoning paternalism and the ‘we know best’ culture that has dogged the social sector for generations.
  • It means creating a culture where people do the right thing for the customer and call out inconsistent behaviours regardless of hierarchy.
  • It means establishing trust building as the number one goal, rather than the relentless pursuit of efficiency and profit.

I’m pretty sure General Motors, VW, and Oxfam would have been near the top of any industry league table.

You can’t regulate relationships and you don’t build trust with a Charter.

The market is , as Seth Godin said , begging us to be remarkable.

Who wants to win the race to mediocrity anyway?

Do We Need A Manifesto for Social Change?

A really odd thing happened to me recently.
I agreed with something George Osborne was saying.

OK. I was on holiday and had experienced a bit too much sun. Probably a bit too much alcohol as well.

But something he said resonated with me.

Osborne had stated Europe was falling behind the continents in the south and east – including in innovation. The European share of world patent applications has nearly halved in the last decade.

Back in Vietnam – everything I saw around me confirmed this. The drive. The energy. The agility.

I’m lucky enough to have visited South East Asia three times in the past couple of years. The dynamic mix of optimism, work ethic and community spirit is intoxicating.

It’s connected too. WiFi is genuinely regarded as a utility. Pretty much every residence , every bar , every business is online. Kids with no access at home sit outside stores in pop-up community hubs.  The web coupled with a boom in cheap smartphones and tablets is fuelling a vibrant connected culture.

Certainly there’s a lot of tech innovation in Asia – each country wants its own version of Silicon Valley. But the future is about more than just Flappy Bird 

What’s compelling about Asia is the community driven innovation. There’s a level of grass roots problem solving that I just can’t see in the UK.

And let’s face it. We have a few problems that need solving.

1.8 million on the waiting list for a home in an unloved sector not known for its innovation and creativity

A funding gap of 30 billion for the NHS – the fifth biggest employer in the world

An adult social care system faced with an ageing population that could lead to a shortfall of a quarter of a million carers.

Nearly 1 million unemployed young people – and teenage educational performance lagging behind that of many Asian countries

It’s going to take more than an app to solve this one.

In fact we need social innovation on a scale that we’ve never seen before.

And I mean BIG innovation that can challenge established delivery. After all – it’s no use complaining about the likes of A4e or Atos when we’ve failed to come up with a viable alternative.

One of the problems – of course – is our legacy systems. In Asia they can easily make a 21st Job Centre because they never had the 20th Century model.

In the time we have upgraded they will be onto Job Centre Version 10.2. Probably with robots in it.

By comparison most of our organisations are still running on Internet Explorer 6.

Is there any chance for us?

Yes. But it needs disruptive innovation that transforms sectors , not incremental change that will take 10-15 years. We simply don’t have the time.

What can we do?

  • Walls need to come down between sectors. It would be a failure if we are still debating the same issues at our sector specific conferences in two years time.
  • We need to accelerate the formation of ideas into delivery and fail fast. If our organisations think like they have for the past ten years we will be out of business in five.
  • We need to remove those with vested interests who create barriers and ask for another report before committing to action.
  • We need every organisation to publish a statement of how they are promoting disruptive innovation.

We need a new operating system.

We need a Manifesto for Disruptive Social Change.

Do you agree or disagree?

Note: The Manifesto for Social Change was created at Housing Goes Digital during a crowdsourcing session with delegates. Thanks to Thom Bartley for the great slide deck.

3 Things We Should Learn From Benefits Street

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Apart from the unfortunate title, Benefits Street is pretty good.

Having seen the first two episodes I genuinely can’t understand what the fuss is about.

It’s a great piece of commercial television (think – My Big Fat Gypsy Wedding) that’s designed to shock.

And , boy , have we fallen for it.

Primetime TV + Benefits  =  Bang: The Twitter Liberal Left erupt in a perfectly predictable frenzy.

But by dismissing the show out of hand  (I reckon less than 10% of people tweeting about it have actually watched it) we miss vital opportunities.

  • We don’t learn from people who are superb storytellers and know how to construct a genuinely populist narrative. (Something the social housing sector has failed to do time after time)
  • We don’t learn lessons about the way our organisations have failed to connect with some communities, and have contributed to their social exclusion.
  • We get distracted and start indulging in petty campaigns (petitions to get it taken off air – for heaven’s sake!) rather than thinking big and innovating.

If we did more listening and a little less talking we would pick up three important lessons:

1 – You change hearts and minds with stories not statistics

The past couple of weeks have seen a number of infographics and articles that aim to challenge the actual size of the welfare problem or show that tax avoiders are the bigger issue.

All of which are very interesting and probably correct but serve no purpose whatsoever in moving the debate forward.

Does anybody think that someone with an entrenched belief that welfare is a lifestyle choice gets one of these things in their inbox and says  “Oh. I see. I was wrong all along. Apologies”.

Of course not. The producers of Benefits Street know that storytelling trumps statistics every time. As Thom Bartley points out in his latest post:

“The public doesn’t respond to blah blah million lost off a balance sheet, they respond to the story about a mother losing benefit because her disabled kid uses an extra room”

2 – Real people tell a better story than professionals

This is the master stroke of Benefits Street. They’ve allowed people to speak for themselves. The professionals who help and , sometimes,  hinder their lives are mercifully absent.

Here’s how we are referred to:

Letter from Work Programme provider: “What f*****g work programme? I’ve never worked in my life”

DWP changing payments: “There’s going to be riots soon unless people start getting paid”

Housing:  “These landlords think they are clever (chasing rent). They’ll have to pay to go court and it’ll take you about a year and a half”

So – not a great level of advocacy for the agencies who are paid millions to support them.

The residents come across as likeable , aware of their own shortcomings and display a deep sense of community.

It’s refreshing to hear the impact of reforms – positive and negative-  untainted by professional bias. We need more of this.

3 – The best ideas come from communities

The greatest thing about the programme are the many innovations that residents employ to get through their day to day lives.

These are not people without talent.

They are people who have existed in a system that has concentrated on what they can’t do rather than what they can.

I see more innovation on display on James Turner Street than I see across many organisations. Some examples:

  • Neighbourhood mouthpiece “White Dee” using a community favours scheme to get a guy to save money for clothes and not blow it on drink and drugs.
  • The “50p Man” who sells household essentials like washing powder in smaller affordable portions. He came up with the idea in prison and dreams of turning it into a national franchise.
  • The Romanians turning trash into cash – literally going through bins.

One of the problems across the social sector is there’s too much top down innovation and an over reliance on tech based solutions.

We need to listen to communities , seed fund some grass roots projects and get out of the way. 

The only real problem with Benefits Street , as Charlie Brooker has pointed out , is that title.

It’s designed to get your back up.

So let’s stop falling for it.

Now is the time for big transformational innovation.

Now is the time for our very best social innovators to work with the residents of James Turner Street and others like them.

  • We could fund the likes of White Dee to become a Community Connector.
  • We could try a localised approach to job creation and a resident led Work Programme.
  • We could create a new deal for tenants rather than just moving them in and leaving them to it.
  • We could have a social accelerator programme to scale up business ideas – like the 50p man.
  • We could attempt to pilot a whole new system of benefits and help the Government out rather than sitting around willing Universal Credit to fail (Matt Leach outlines just such an approach in his excellent post here)

Or we could just get angry on Twitter, do battle with Daily Mail readers and become ever more polarised in our views.

I know how I want to spend my time.

How about you?

Why Living In Paradise Is Bad For Business

When you live in paradise - it's easy to get lazy.
When you live in paradise – it’s easy to get lazy.

Here is a story about what can happen when you don’t anticipate change. When you get used to things being easy for everyone. It’s a story you will have heard before but, like all the best tales , is as relevant today as when it was first told:

There was once a lucky little bird who lived on an island. It was one of the most beautiful places on earth. Not only was it beautiful – it was safe. Nobody wanted to eat the bird. Nobody tried to muscle in on the birds turf.

The fruit that the bird collected from the trees was abundant and delicious. After a while the bird stopped collecting the fruit , as left to ripen it fell off the tree on its own. Far more convenient! Why would you go chasing food if you can have it delivered direct to your table?

The bird became bigger. Eventually it couldn’t even be bothered to fly. Why would you? The island is gorgeous, the food goes down a treat, and there is zero competition for nest space. You’d have to be an idiot to screw this life up!

But one day a ship appeared on the horizon. On the ship were men and women from a country far far away. And they brought dogs with them. And cats.

Not a problem , thought the bird, I’ll just fly away – there are plenty of decent islands around here with fruit just as good.

But its wings , left idle for so long , didn’t work anymore. Damn it.

As the bird went along to introduce itself to the dogs and cats – it wished that it had never become reliant on that delicious fruit falling from the trees. Never mind, it thought – guess I’ll have to learn to fly again.

The island was Mauritius. The bird , of course , the Dodo.

Last week an article made me think of this story. It contained a quote that said an entire sector , Social Housing , could become extinct because of alterations that are being made to how it gets paid.

Many of you reading this don’t work in housing so will not understand the changes. So – let me explain in simple terms how this works :

  • Quite a few people who live in social housing get benefits for their rent. To make it easy for everyone the benefits are paid – electronically – to the landlord. It’s convenient , frictionless, and the actual customer doesn’t have to worry about any of it. (OK , that sounds like business model paradise to you guys who don’t work in housing. But stick with me….)
  • The Government is trying to get the benefit paid direct to the customer. The idea seems to be that people should take responsibility for budgeting and stuff. But some customers aren’t really skilled enough to sort things out for themselves. A load of them don’t even have banks. Plus – customers don’t want the hassle of having to pay rent. So , it would be easier all round to stick with the old system. (OK , stop laughing – I know business doesn’t work like that in YOUR world.)

Why did the article make me think of the Dodo?

Because things were always going to change. History teaches us that. Why are we surprised?

We know that any modern business has to habitually innovate and re-invent itself. If it doesn’t and it gets too comfortable – it will become extinct. And it will deserve to.

Whichever sector you work in you are at risk of:

  • Stronger competitors
  • Disruptive technology
  • Demographic changes in your market
  • Changes in the economy
  • Changes that alter the way customers access your business
  • Or changes in politics and regulations

Your business is under threat. All the time. Get used to it.

There are lots of ships on the horizon. And they all contain disruptions to the way we do things.

We better get those wings working.

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