Saturday, March 13, 2010

Gaming the system

A report on the British post Office in today's Telegraph is a remarkable example of gaming the system. The Post Office has been set a target meant to ensure that almost all First-Class letters arrive the day after posting. A system has been set up to monitor this. 22,000 anonymous volunteers send a letter by First Class Post and the time of arrival is noted. However, these envelopes contain a microchip that can be felt. Managers at sorting offices then compiled computer spreadsheets of the addresses on the envelopes so that “key customers” could be given priority treatment, ensuring their mail arrived on time. These letters were prioritized them at the expense of letters that you or I send.

Investigators found evidence of this technique being used nationwide from as long ago as 2002. The report said attempts to manipulate the performance figures had become “entrenched” in some areas, and “culturally ingrained” in others. Staff from different parts of the country were found to have swapped notes on how to beat the system or discussed ways of manipulating the market research in Internet chat rooms.

Customers were likely to question whether the figures had been massaged or manipulated to ensure that the maximum bonuses were paid to the hierarchy of Royal Mail.

This story is reminiscent of similar stories about the NHS where targets were met, yet the service deteriorated and it reveals an inherent problem in any target oriented business. The targets often represent a surrogate end-point which in normal circumstances represents what is actually desired. For example: the government required that patients in accident and emergency rooms were dealt with and admitted to a ward within 4 hours of attending a hospital ER. With the resources available this was an impossible outcome, so managers redesignated corridors as 'wards' and trolleys as 'beds'. Thus the target was met without any improvement for the patient. Hence a target-culture is much decried. What is needed are smart-targets that cannot be gamed.

During the second word war in the UK there were two factories competing with each other. One made tank armor and the other anti-tank weapons. Each type of stronger armor was sent down the road to the weapons factory and each new shell was sent up the road to the armor factory. I fear things are a bit like that in government owned industries. Regulators invent rules and businesses invent ways to get round them. The same things happen in finance. It is said that the only people who pay tax are those with sub-standard accountants. It would be better if somebody tried to run a business for the benefit of the customer.


Burke said...


Is the post office in Great Britain not publicly operated? If it is, why would one regard it as a business?

Terry Hamblin said...

It is a business owned by the government. It has a CEO and a Board, but the Government owns all the shares. The last Conservative government was set to privatize it and even the Labor government have tried, but the Unions are resisting.