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Building Faster Horses: How to Go Broke in the NDIS

It seems like many disability providers are looking for faster horses with their NDIS preparations focused on organisational survival and unit costing. While it's vital to understand the financial underpinnings of services, Roland Naufal explores how a focus on unit costing may ultimately kill your organisation.

By Roland Naufal

Updated 15 Apr 202419 Jun 2016

If I’d asked my customers what they wanted, they would have said ‘a faster horse’. – Henry Ford


It seems like many disability providers are looking for faster horses with their NDIS preparations focused on organisational survival and unit costing. While it is vital to understand the financial underpinnings of services, in our experience unit costing often has the wrong people asking the wrong questions using the wrong processes.

The fundamental frame of reference organisations need to transition to the NDIS is:

What do participants want and how can we give it to them?

it is not:

How do we ensure our organisation’s survival?

The first approach is the foundation of NDIS success; an organisational obsession with the second could prove fatal. The NDIS is a game changer; a focus on survival through unit costing is playing by the rules of the old game. Unit costing is an approach that analyses the financial detail of existing services and the irony is, it’s the method that could ultimately kill the organisation.

We urgently need to move away from the focus on what we do now and focus instead on these two questions:

  • Are we providing the services that participants will want in the NDIS? (and the NDIA will pay for)
  • Can we provide these services at a financially viable rate? (only after we answer the one above)


Cost Comes Before Benefit

That’s an old Dutch saying and a warning: Too big a focus on cost means we will not see the real opportunities to succeed in the NDIS.

Some organisations we have seen are destroying their (sometimes century old) organisational culture through poorly executed NDIS driven cost cutting. Everyone now knows that the NDIS is going to require fabulous service from front line staff, yet heavy handed approaches to cost reductions very quickly alienate staff. Do you know how much it upsets struggling front line staff to have resources or supports taken away from them? I recently heard a tirade from a staff member about how the (seemingly simple) transfer from Telstra to Optus (to save costs) meant the only way a staff member could answer after hours calls was to go outside to the highest spot in her backyard. Ouch. And where was the feedback loop for the organisation to catch these unintended consequences?

It is organisational culture that determines front line productivity. Culture is the juice for the creativity that leads to innovation and new service models. It is culture that creates happy staff and happy return customers. And that’s why we love the saying: culture eats process for breakfast.

To get the detail done and at the same time enhance culture, organisations need to be able to examine multiple areas at multiple levels using multiple processes. Think of it as the ‘eagle eye’, the ability to see the detail and the whole landscape at the same time. We use the idea of ‘creating room to zoom’ to simplify this complexity.


Creating Room to Zoom

Zoom in: Target Organisational Processes

When you focus in on the detail of your organisational processes use the right analytical methods and technical expertise. Adapt business tools such as Business Process Reengineering, Supply Chain Management & Value Chain Analysis to your organisation to facilitate in-depth analysis. Some examples of measures that can produce great outcomes in the NDIS environment:

  • Savings through client self-management and partnerships
  • Engagement techniques that maximise front line productivity
  • Building greater autonomy into teams
  • Rethinking infrastructure and software.


Zoom outFocus on the Big Picture

Get in the helicopter and look at the whole organisation in the context of the highly complex NDIS environment and then:

  • Collaborate to innovate using Design Thinking and Lean Start-up methodologies
  • Engage the right people using distributed leadership approaches
  • Build a culture of service innovation
  • Adopt leadership approaches appropriate to the complex environment including Cynefin and our own ‘Learn Engage Adapt’.


Roland Naufal

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