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A Northern Housing Consortium player is rubbing his hands with glee. Then a frown crosses his face: "As long as he doesn't bloody swear." The subject of his concern, John Seddon, is pacing the banqueting hall of York racecourse with a smooth and vaguely menacing stride, long arms locked behind his back and a swimming pool-blue shirt unbuttoned at the neck. The 51-year-old consultant has already made a name for himself in the private sector as a maverick troubleshooter for suffering services; he may be a relative unknown in the world of housing now, but all that is about to change.

The moment Seddon, founder and managing director of Vanguard Consulting, is introduced to the crowd in York he leaps off the stage to stride among the 200 or so housing professionals who have gathered for a conference on performance management. Well over six feet tall, he cuts a dramatic figure, sweeping through the crowd and throwing his arms in the air to emphasise his points. He is talking, as he often does, about the link between performance and customer service: according to Seddon, housing – and the public sector in general – just don't get it.

"The government insists on targets, but they are arbitrary, measuring the wrong things and set by people who have little clue what they mean or how they will help people to deliver better public services," he says to an audible gasp from the audience.

"James Strachan [chairman of the Audit Commission] recently wrote back to me after months of my trying. He agreed there is too much inspection and too many targets, but said the way to fix it was to inspect less. I'm going to write back and tell him this is wrong, you have to do the whole thing differently. Targets don't remotely help you understand the work and how to make it better."

Seddon is quite the performer, coming across like a motivational speaker or stage magician. But his message is deadly serious: that services should be led not by managers or regulators who set targets but by the people who do the job on the ground – and by their customers.

"I get hugely irritated by stupid statements around targets and their usefulness," says Seddon, relaxing after his York performance. "I do what I do because it is our money that is being wasted on inspection and it drives me crazy.

"I have evidence that my approach works – practical examples of improving performance way beyond anyone's expectations. In Edinburgh we redesigned the housing benefit system so response times fell from about the national average of 60 days to between seven and eight days. If this was set as a target, people would say there was no way on God's earth that it could be done – and under the existing system, they'd be right. It can only be done if you redesign the system to focus on what the customer wants."

Seddon, who began his working life as an occupational psychologist at Feltham Young Offender Institution, founded Vanguard in 1985 and now employs 20 consultants. They have worked with companies including BT and insurers Aon and Standard Life. He says he has always hated what he calls "the command and control" approach: other targets of his ire include universal quality standard ISO9000 and the present government's burgeoning bureaucracy – he let rip a stinging tirade against the latter at a recent Commons select committee hearing.

The south-east Londoner's comments may sound far removed from the realities of service improvement. Don't targets have their uses when they are intended to resurrect flagging performers? Seddon admits as much, but surely a man who has helped IBM cut the time it takes to repair large mainframe computers from six to two days; and caused the time taken by Digital's computer repairs services to drop from eight days to just eight-and-a-half hours; must have something worth knowing about?

Seddon turned his attention to housing 15 months ago when he was hired by Peter Stott, managing director of Home Housing Association, to overhaul the repairs and maintenance service of the 23,500-home, Newcastle-based landlord. Stott says: "We were providing what we thought was a reasonable service, but tenants were saying things took too long, the quality was often poor and things got lost in our system." There will be a familiar ring to these words for many housing providers, and half a dozen councils and registered social landlords are reportedly also in advanced talks with Seddon.

Home saw dramatic results, says tott: "Vanguard's consultants initially spent a lot of time studying our processes in detail, and found to our horror that end-to-end repairs took 38 days from our North Tyneside depot. Within three weeks of the redesigned process being implemented, this came down to eight days and stayed there."

Stott is now a fully paid-up Seddon disciple. "Target-driven performance systems are not effective," he says. "What matters is customer service and how to deliver this. We have carried out a fundamental shift in how to approach the delivery of customer service.

"This is extremely challenging for managers. Their job has been to decide how to do a job, tell the staff and make sure they do it, but Seddon turns this approach on its head and says the service should be led by those people who do the job on the ground."

Back in the real world …
Seddon has written several books on how organisations can do things better, none of which involve adhering to what central government says will work. But it's one thing for a consultant to talk about cultural change, quite another for those on the ground to make it work. As one bemused housing officer from Manchester says after Seddon's York presentation: "It all sounds very interesting, but I'm not entirely sure how it would work. I mean, you're never going to get the Audit Commission inspectors to fully accept what he is on about."

And there's the rub. For Seddon, the present inspection regime is anathema to everything for which his approach stands, but for the thousands of middle managers scattered across UK associations and councils, the inspectors are omnipresent: whatever they decide has a direct impact on the resources managers get to do their jobs. Housing officers and their bosses love the results of Seddon's work, but are deeply suspicious of how Audit Commission staff would interpret his methods.

Peter Stott is no less subject to these pressures. A draft inspection report from the commission landed on his desk only that morning, and when we talk he has not yet found the time to read it. In the mean time, all he will say about the inspectors is: "We have had a constructive dialogue, but I'll say more once we've got through the process."

Despite Seddon's onslaught on central government, it seems Whitehall is ready to listen: he has been invited to give a closed-door talk to civil servants at the ODPM. If his barbed rhetoric doesn't win them round, then perhaps this will: "Most people like change but don't like being changed. My systems are designed around demand, they reflect what customers want and so this method makes people happy. They love giving good service – what I do is to give them that ability."