Delivering More for Less Through Systems ThinkingLeeds Breakfast Seminar: 22nd October 2010James Llewellyn, Atkins Limited
22/10/2010 Delivering More for LessWords 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)
22/10/2010 Delivering More for LessContext (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
22/10/2010 Delivering More for Less System versus Analytical System Analytical
22/10/2010 Delivering More For LessSystem• 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
22/10/2010 Delivering More for LessFlow• 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?
22/10/2010 Delivering More for LessFlow (of a transport scheme) Idea Feasibility Consultation Business Outline Case Design Detailed Surveys Consultation Legal Powers Design Procurement Construction Opening Final Account
22/10/2010 Delivering More for LessPull• 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?
22/10/2010 Delivering More for LessWaste• 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)
22/10/2010 Delivering More for LessCustomer 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
22/10/2010 Delivering More for LessCapability• 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?
22/10/2010 Delivering More for LessCapability Charts
22/10/2010 Delivering More for LessTwo Broad Approaches Command and Control Systems Thinking (Traditional) (Alternative) Top down Perspective Outside-in Functional specialisation Design Demand, value, flow Separated from work Decision making Integrated with work Budget, targets, standards, activity, Measurement Designed against purpose, demonstrate productivity variation Extrinsic Motivation Intrinsic Manage budgets and people Management ethic Act on the system Contractual Attitude to What matters? customers Contractual Attitude to Partnering and co-operation suppliers By project / initiative Approach to Adaptive, integral, observation change
22/10/2010 Delivering More for LessCase 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)
22/10/2010 Delivering More for LessCase 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
22/10/2010 Delivering More for LessCase Study (City of Edinburgh) Capability Measure Before After (2 months later) Maximum time to fix a pot hole 333 39 (days) Number of jobs (per day) 60 150• Budget – stayed the same• A simple database record actual costs• Accidents and claims payouts have fallen
22/10/2010 Delivering More for LessGetting Started…
22/10/2010 Delivering More for LessGetting Started…
22/10/2010 Dellvering More for LessFurther ReadingWeb Siteswww.systemsthinking.co.ukwww.thesystemsthinkingreview.co.ukwww.deming.org.ukBooks• 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
22/10/2010 Delivering More for LessContactJames LlewellynLocal Authority AdvisorAtkins Transport Planning and ManagementRock HouseLlanddewiLlandrindod WellsPowysLD1 6SDTel: 01597 850069 or 07713 644798E-mail: email@example.com