Rethinking failure demand in UK Public Services

Public services in the UK are facing higher-than-ever levels of demand due to an ageing population with more complex health needs while facing a legacy of underinvestment in infrastructure over the past decade. Part of public service's problem is failing to deal with "failure demand" or, simply, failing to deal adequately with customers' requests the first time.  

Failure demand not only frustrates the user by requiring them to follow up to achieve the desired outcome but also places strain on public services, which are required to rework requests and add to long backlogs. Many of us have experienced this across when engaging with public services by having to resubmit incorrect forms, which might have used data validation or call up to speak to a customer services operator where issues cannot be resolved easily online, e.g. calling up to change a tax code when changing jobs.  

This is not a new problem within government; in 2009, the Cabinet Office launched a campaign to reduce "avoidable contact" and began publishing data on the number of avoidable contacts Councils make of low or no value. Commentators concluded that 80-90% of contacts with local authorities were avoidable at the time. These problems of failing to deal with customers' needs first time prevail today, with the staff delivering public service often unempowered to resolve issues or not providing adequate training and resources to improve customer journeys.  

In part, the problem of failure demand has been dealt with through the rise of digital services with increased self-service and user research and testing. These digital services can use data to understand the drivers of failure demand and track customers' journeys through the web pages. This should allow proactive outreach, early identification of vulnerabilities, and tailored preventive measures that can reduce reliance on reactive services.  

One of the key insights from systems thinking is that improving performance is not only about increasing efficiency or reducing waste but also about managing demand. If public services can prevent or reduce the need for citizens to access them in the first place, they can deliver better outcomes at lower costs. For example, by investing in preventive health measures, such as smoking cessation or obesity reduction, the NHS can avoid unnecessary hospital admissions and improve the quality of life of patients. Reducing demand, whether it is value demand or failure demand, is a much more effective way of improving performance than focusing on throughput or pace. This requires public services to understand their purpose from the perspective of the citizen and to design services that meet their needs in the most efficient and effective way. 

However, many public services, such as the NHS, suffer from fragmented systems where siloed delivery bodies fail to resolve failure demand as a system. Patients who are passed between primary and secondary often fail to get the follow-up care they need. A GP commented in the BMA that in 9/10 cases, they would not know when the follow-up secondary appointments would be after referral causing further patient frustration. Reducing the friction between these services to get patient needs right the first time would cut down on the required volume of calls made by admin staff and improve patient experience.  

Focusing on failure demand is a normal aspect of continuous improvement in the private sector. At Baringa, we have supported a number of clients through big and small service redesigns to improve the volume of cases that are adequately dealt with the first time and avoid creating downstream issues. For example, Baringa supported a large multinational bank to vastly reduce error rates of incoming work by introducing guidance to upstream stakeholders across 100 FTEs, saving 140 hours/month in rework (‘failure demand’) for multiple processing teams, and up to 8 days in average end-to-end lead time.  

If the public sector could also focus on these measures that drive operational inefficiencies, there is the possibility of a double positive impact: reducing operating costs from reworking or requiring additional contact with customers and increasing public satisfaction with the quality of services. To do this, operational teams need to be aware of the impact up and downstream of their engagement with the public, and the system should ensure failure demand is monitored and mitigated systematically.  

We believe there are three things departments must get right: 

When it comes to measuring performance, Baringa believe it is important to focus on purpose and customer led KPIs that align with your department's mission and government's goals. Here are three take away action for public sector teams:  

1. Focus on understanding your customer's needs and purpose to provide them with better service. 
2. Choose performance measures that help you understand how well you are delivering against those needs and purpose, focusing on quality as well as quantity to avoid driving adverse behaviours. 
3. Promote end-to-end system success and collaborate across the system to share information and mitigate problems that create failure demand. 

To find out how Baringa could help your organisation unlock productivity improvements through a more outcome-focused approach, please contact our experts Matt Jones, Rhiannon Evans, or Theo Whitaker.