Productivity in knowledge work?

Productivity in public sector is, in principle, justified. Everything financed with tax refunds must constantly be under critical viewing: can things be done more effectively, with less resources - perhaps even outsourced?

But. A big BUT. Time to stop to think!

The mechanistic models of measuring financial efficiency were based on scarcity in industrial production processes. The quicker you can get the product out of the line, the better. Do these laws apply in society, to people or knowledge workers?

Helsingin Sanomat (26 Aug 2010, page D1) featured an article about mental hospitals and their hard measures in treatment. However, an Imatra model came up: their statistics always looked better than elsewhere, their patients kept coming in but were also let out easier than elsewhere. Others were stunned: why do you what you do?

The answer is beautiful in its austerity.

Imatra looked at its health care system as a financial entity, like a zero-sum-game. If mental care closed their doors, ie. ceased treating patients with early symptoms, their life gets worse. Later those same patients are bound to need help, this time only more drastic and definitely more expensive measures.

The problem in sectoral management is, that all departments optimize their "sub-costs". Imatra, a blow away from bankruptcy at that time, resorted to the good old common sense. They reviewed total costs. When help is needed later in another section, child welfare, schools or social services, their costs exceed dramatically those of early stage intervention's. True leadership!

Researcher Ilkka Tuomi continues on same lines (HS 26 Sept 2010, page C14). Productivity laws that apply in mass production, can severely twist decision making in information society. Value is born in social networks from innovation and production of new meanings.

How do we speed up these processes? Think faster? I don't think so.

Leadership faces enormous challenges when organization's entities entail both physical products (tax returns), process developing (services, education, communications) and ICT (customer applications and office tools). Money is the scarce resource that they all are competing for. Without true leadership and solid vision sub-optimization is a real threat.

Organizations and decision making must be built on interaction. Sharing knowledge is essential. Collaborative tools and a new mindset enable Enterprise 2.0 and Society 2.0, accordingly.

Becoming a knowledge worker does call for a small revolution.

What then happens is nothing but magic, as Oscar Berg, a net friend of mine, beautifully put it: It's actually pretty simple.

Previously on new ways to work:
Work 2.0 comes with a revolution
Work 2.0 is collaborative
On the way to Information Society

Too big to fail?

Recent Fiscal Times introduced me with Pres. Reagan's former budget director David Stockman. This "enfant terrible" shocked in his time by admitting: “None of us really understands what’s going on with all these numbers’’.

Our public sector is now in the phase of building bigger and bigger entities of services. In doing so, I've come up with a similar thought.

Economy of scales may also carry a side effect. As things grow bigger, the number of those who can really understand what is going on grows smaller. Failures and misbehaviors do slip through, giving room to delusions of being too big to fail, so victorious nothing can harm us anymore.

In service chains covering the whole of society also their financies tend to complicate.

Open economy and eternal growth

In the times of regulation the economical ecosystem was (somewhat more) controllable. Now the whole world is an open economy, and a rapid growth or shift in consumption in one corner is bound to carry an effect somewhere else. Whoever tries to foresee the future developments judging by the numbers in recent history, truely needs to be quite a genious.

Stockman, like our ministry of finance a few years ago, Mr. Niinistö, calls for debt deflation, downsizing and a rise in national savings.

The principle is chrystal clear, let's just recall our studying years! If you gain 200 and have no assets to liquidate, 200 is what you can spend. After that, you are in the loan market. If you can prove a future revenue, you may discount that promise for a loan at the present. - I believe the whole world now knows, there is an end on that road of getting into debt..

Streamlining processes lowers expenditure

The Finnish way of cutting back public expenditure is to streamline processes. Up until now we've done that because of scarce human resources, a problem common to the aging western world, sometimes even for the benefit of our customer.

However, the next step must be unifying the common pools of data, gathering data only once at the source and sharing those data pools between government agencies. Some of that thinking you may read in my recent post.

The principle of open data (F) adds to transparency of government and optimizes the use of common data. Nowadays there are many government agencies whose funding is arranged solely on the revenues from distributing data. On government budgeting this means blurring image of the entity and complicated finances.

In practice, government agency A has budget means to buy data from B, also a government agency. B, however, is granted government funding for only part of its functions, so it needs to budget on revenue basis. This all results in a financial cobweb, sometimes impossible to audit trail.

In order to make things more reasonable and transparent, the core function of supplying the original data will be funded by the government. Distribution of that data between government agencies would become free of charge, or be done at cost pricing at the most.

We Finns do handle many areas already quite effectively. But I wonder how many brilliant solutions there are in many other areas, just waiting for us to find.

Disclaimer
These thoughts are mine and do not represent views of my employer, Finnish Tax Administration or the Finnish public sector, either.

Productivity: quantity or entity?

In some public sector strategies the aim is to improve the productivity but there is also anticipation of a new leadership.

In public sector offices instructions used to be signed by one man and then all the public and personnel obeyed. Budgeting was supposed to take these offices to a more business-like supervision.

Certain problems still prevailed. There seemed to be little or no connection between the annual actions and their budgeting; change management and project-like financing arose a problem time and time again. One thing is common in both private and public sector: sub-optimization.

Productivity is haute couture in the Aging Europe

Anja Alasilta blogged about result-based rewarding in emergency call centers (F). Quantities and rewarding seem to be an equation with few solutions in all public sector.

Productivity states that its measure should be, say, phone calls per call center worker. That rate will thus get improved only if "You just talk faster to the customer"?!

Tax Administration took the customer in the focus by early 2000's. Niche experts needed to broaden their horizons, and all of a sudden there was no point in counting bits and pieces. The real issue was to track the whole customer process. What happens to the quality of a tax return if our guidance is A, B or C?

We began to talk about the impact of our actions. Instead of viewing our own doings alone, we now search impressiveness in customer's process.

We talk about the new leadership as something that is insightful and participative for our personnel. We are looking for ways to support innovations and their dissemination. How do you do that?

What kind of organization would best support innovation?