Targets are inevitably counterproductive

Thanks to Public Strategy, I came across an interesting article by John Seddon on Avoiding Avoidable Contact. The article is a vigorous attack on the UK Cabinet Office for putting out new guidance on how government bodies should set targets for reducing avoidable contact (contact with the public that does not generate real value, e.g. enquiries about what an official letter meant or when a query is going to be dealt with etc). One key element of the attack is a general rejection of the UK government's focus on targets. In fact, Seddon suggests that all targets are counterproductive or as he puts it "the use of targets always results in less work of the type you want being done".

If I understand him rightly, the reason for this is that targets encourage people to focus on achieving the target rather than doing what creates value. So if you want to incentivise customer service in a contact centre, then giving a large bonus to any agent who secures a positive outcome from their interaction with a major customer is likely to have a detrimental effect. First, the agents will want to get rid of any calls from non-major customers as quickly as possible. And second even with major customers they will want to get to the positive outcome as quickly as possible and then end the call as soon as the target-meeting criterion has been met. So you get worse customer service and lots of attempts by misincentivised agents to game the system! All this is tremendously relevant in the UK where the government has pumped in massives of money and looked to targets as some guarantee that this would lead to better performance.

As far as avoidable contact is concerned, Seddon prefers to call this failure demand. Part of his point is to encourage people to see the hidden value of this kind of contact - it helps you understand what the customer really wants, so the aim is not just to deal with it but to deal with it in a way that leaves the customer satisfied (i.e. moves their interaction with the organisation from failure to success). On a personal note that does strike a chord at least with my interaction with the UK tax authorities, since their response to "avoidable contact" seems to be to make it as hard as possible to contact them. So there is lots of failure demand out there, but they just try to make it very difficult for that failure demand to get through to them!

What Seddon wants public sector organisations to do is to take a systems approach and focus on the causes that led to predictable failures from the customers perspective. He is also rejects too much emphasis on fragmentation and economies of scale, arguing that this decreases value generation across the full system. Here is his summary:

"Failure demand is a systems concept. Taking a systems approach to the design and management of service organisations reveals a number of counterintuitive truths. Those that have been explored in this article include:
• Demand is the greatest lever for improvement (as opposed to assuming that all demand is ‘work to be done’)
• Cost is in flow (as opposed to activity)
• Failure demand is a consequence of work design (and thus cannot be removed by targets)
• Standardisation and fragmentation create waste (higher cost, not lower cost)."

For me that still leaves the incentives issue and here Seddon seems to believe in giving individuals and teams responsibility for all aspects of a particular activity rather than just some small, targeted fragement of it. So you try to eliminate gaming by using a broad range of measures or perhaps by linking directly to the overall outcomes you are interested in. I think it is a great challenge to the UK government approach, but I not sure it is a full answer to ministers who are desparate for some kind of guarantee that the resources they allocate will have some impact. I suppose the problem here is: how can you give ministers some levers that help them feel that they are having an impact and let them show the public that they mean business?