Benchmarking
optimising the service. And you’d have learned how the schedule of rates drove costs up; what was recorded at the front end was not what was needed in the repair. It led to a cottage industry of paperwork (all changes to the specifi cation had to be signed off). And the most shocking discovery that properties were repaired on the fi rst visit less than half the time. But would you have
refl ected that these are the very things you need to learn about your own system? Or would you have assumed that they were known or not a problem? You’d also have seen the Portsmouth managers learn how to study the things they needed to know to design a better service: the predictability of demand from the properties. This enabled them to know
This is what happens in benchmarking: we fi t what we see into our view of the world
what trades’ expertise they would predictably need; the predictability of materials usage by individual tradesmen. This enabled them to strip the vans back to only what was predictably needed; the cost of materials in the system in total terms, including storage, losses and availability, which taught them that the cost of materials is concerned with time, not cost, and should be managed that way. And so you would have witnessed the development of the better philosophy, developed through getting knowledge. And if you had been able to follow all of this, you would have understood that Portsmouth’s system is designed for perfection. The design absorbs the variety of demand (something the schedule of rates doesn’t do and the reason it drives costs
up) and costs fallout because the system is much better at achieving its purpose, completing repairs on the fi rst visit.
Benchmarking is the fastest way to mediocrity
Deming taught us that benchmarking is copying without knowledge; it is risky and more likely to cause losses rather than gains. Taiichi Ohno taught us that benchmarking is looking in the wrong place. As the managers in Portsmouth learned, everything you need to know is in your own system – you just need to learn how to look.
Going back to Deming, he made much the same point: “Managers know everything there is to know about their business, except how to improve it.” To improve
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it, you need to learn to see things you can’t currently see. While the Audit
Commission gave Portsmouth the thumbs down (and just one reason why we should be glad it is being closed down), Gary Hamel, uber-guru, gave Portsmouth’s leader Owen Buckwell an award for innovation: http://www.
managementexchange.com/ blog/m-prize/announcing- m-prize-winners-audacity- imagination-experimentation.
ABOUT THE AUTHOR John Seddon is a visiting professor at Derby and Hull Universities. John has received many academic honours for his contribution to management science. He is leader of the Vanguard organisations. www.
systemsthinking.co.uk.
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