Systems thinking presentation leeds

Delivering More for Less Through Systems Thinking

Leeds Breakfast Seminar: 22nd October 2010

James Llewellyn, Atkins Limited

22/10/2010 Delivering More for Less

Words of Wisdom “We cannot solve our problems with the same thinking that we

used to create them”

“A person who has never made a mistake has never tried anything new”

(Albert Einstein)


Context (CSR)• Cut of 28% to local government grant over next 4 years

• 15% reduction (in real terms) in DfT budget in the same period

• Emphasis on “efficiency” including:

o Performance monitoring group and re-structuring for the HA

o New contracts and commercial management

o National framework for commodity purchase

o Administration of concessionary travel scheme

• And plenty of cuts:

o Kirklees street lighting PFI

o A1 Leeming to Barton

System versus Analytical

System Analytical


22/10/2010 Delivering More For Less

System • Social, organisational and political environment within which people

work

• Takeaway tip: Think about how many systems you work within. What is

their purpose? Who are the customers? Who are the most important

people who provide the service? Do the parts work together?

• Systems thinking is concerned with seeing the whole from a customer

perspective and recognising the inter-dependence of the parts

• Interesting fact: 95% of variation in performance is down to the way work

is designed and managed

• Ideal vision: people with complementary skills are organised around,

and working towards, a common purpose


Purpose

Flow



Flow• Flow is to understand the precise path that work takes through an

organisation from beginning to end

• Interesting fact: Costs of work are primarily result of lack of flow and not

scale

• Takeaway tip: Think about the most significant costs of work in a service

or project; are they based on individual parts (e.g. procurement)?

• Functionalisation can result in convoluted processes with multiple

handovers (“I was passed from pillar to post…”)

• Takeaway tip: Think of a project or service that you know well. Have a

think about how many stages and people there are from beginning to

end. Is there a smooth flow between stages? Or are there delays and

the need for re-work?


Flow (of a transport scheme)

Idea Feasibility Consultation Business

CaseOutline

Design

ConsultationSurveysDetailed

DesignLegal Powers

Procurement Construction Opening Final Account


Pull• Organisations often push products and services towards customers

(advertising and marketing)

• Customers really want to pull value through demand

• Work should done against customer demand

• Only do something when it is needed

• But when it is needed and have the resource to do it straight away

• Takeaway tip: Think about a time when you really needed a service; were you able to get what you wanted, when you wanted, as opposed to what the service provider wanted to give you?


Waste• Any activity that does not add value to the purpose of work from the

customer perspective

• Examples include: inspection, complaints, re-work, abortive work

• Takeaway tip: Go and ask some front line members of staff where they

believe waste is occurring; you may well be surprised about how much

they know

• Waste should either designed out or separated from the value work (if it

cannot be avoided)


Customer Demand• Value demand – what the customer wants

• Failure demand - caused by failure to do something or do something

right for the customer

• Consequence of failure demand is more work and waste

• Takeaway tip: Go and listen in a call centre for a few hours; note how

many calls are failure demand

• Interesting fact: Failure demand is between 20-80% of total demand

• Reducing failure demand reduces costs and improves service


Capability• Measures service performance from the customer’s point of view

• Examples:

o “End to end” time to fulfil customer request

o On time performance as required by the customer

o Percentage customer demand fulfilled at first point of contact

• Takeaway tip: Look at your current KPIs and ask yourself do they

measure: (1) what matters to customers ? (2) your response to

customer value demand? (3) the capability of your processes? (4) the

performance of the whole system?


Capability Charts


Two Broad Approaches

Command and Control

(Traditional)

Systems Thinking

(Alternative)

Top down Perspective Outside-in

Functional specialisation Design Demand, value, flow

Separated from work Decision making Integrated with work

Budget, targets, standards, activity,

productivity

Measurement Designed against purpose, demonstrate

variation

Extrinsic Motivation Intrinsic

Manage budgets and people Management ethic Act on the system

Contractual Attitude to

customers

What matters?

Contractual Attitude to

suppliers

Partnering and co-operation

By project / initiative Approach to

change

Adaptive, integral, observation


Case Study (City of Edinburgh) • The “what and why” of current performance revealed:

o 3 day target to attend a pot hole once reported was achieved 97% of

the time

o Actual length of time to fix a pot hole was up to 333 days!

o Attendance at the site was reported as achieving the target

o The target had led to an inappropriate quick fix that required

continuing return visits (totalling up to 7 returns in some instances).

Some repairs did not last the day.

o Staff were reacting to problems, and never focusing upon what was

important to residents of Edinburgh

o Gangs were chasing pot holes all over the city and not focussing on

their local area (only available 45% of the time on their own patch)


Case Study (City of Edinburgh) • A service re-design was necessary:

o The purpose from a customer perspective was: “…to permanently

and systematically fix pot holes right first time.”

o A contractor became 100% dedicated to a defined local area

o Gangs deployed based on an empirical study of pot hole demand

o Workmen were empowered to decide on the right repair for the job;

and given the time to do it properly


Case Study (City of Edinburgh)

Capability Measure Before After (2 months later)

Maximum time to fix a pot hole

(days)

333 39

Number of jobs (per day) 60 150

• Budget – stayed the same

• A simple database record actual costs

• Accidents and claims payouts have fallen


Getting Started…


Getting Started…

22/10/2010 Dellvering More for Less

Further Reading Web Sites

www.systemsthinking.co.ukwww.thesystemsthinkingreview.co.ukwww.deming.org.uk

Books

• Middleton (ed), Delivering Public Services That Work, Triarchy Press, Axminster, 2010

• Seddon, John, Freedom from Command and Control: a better way to make the work, Vanguard Education, Buckingham, 2nd edition, 2005

• Ackhoff, Russell, Systems Thinking for Curious Managers, Triarchy Press, 2010

http://www.systemsthinking.co.uk/

http://www.thesystemsthinkingreview.co.uk/

http://www.deming.org.uk/


Contact James LlewellynLocal Authority AdvisorAtkins Transport Planning and ManagementRock HouseLlanddewiLlandrindod WellsPowysLD1 6SD

Tel: 01597 850069 or 07713 644798E-mail: [email protected]

mailto:[email protected]