A presentation on the basics of systems thinking and how it can be applied to local government services and projects.

1. Delivering More for Less Through Systems Thinking
Leeds Breakfast Seminar: 22nd October 2010
James Llewellyn, Atkins Limited

2. 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)

3. 22/10/2010 Delivering More for Less
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

4. 22/10/2010 Delivering More for Less
System versus Analytical
System Analytical

5. 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

6. 22/10/2010 Delivering More for Less
Purpose

7. 22/10/2010 Delivering More for Less
Flow

8. 22/10/2010 Delivering More for Less
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?

9. 22/10/2010 Delivering More for Less
Flow (of a transport scheme)
Idea Feasibility Consultation Business Outline
Case Design
Detailed Surveys Consultation
Legal Powers Design
Procurement Construction Opening Final Account

10. 22/10/2010 Delivering More for Less
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?

11. 22/10/2010 Delivering More for Less
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)

12. 22/10/2010 Delivering More for Less
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

13. 22/10/2010 Delivering More for Less
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?

14. 22/10/2010 Delivering More for Less
Capability Charts

15. 22/10/2010 Delivering More for Less
Two 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

16. 22/10/2010 Delivering More for Less
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)

17. 22/10/2010 Delivering More for Less
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

18. 22/10/2010 Delivering More for Less
Case 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

19. 22/10/2010 Delivering More for Less
Getting Started…

20. 22/10/2010 Delivering More for Less
Getting Started…

21. 22/10/2010 Dellvering More for Less
Further Reading
Web Sites
www.systemsthinking.co.uk
www.thesystemsthinkingreview.co.uk
www.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

22. 22/10/2010 Delivering More for Less
Contact
James Llewellyn
Local Authority Advisor
Atkins Transport Planning and Management
Rock House
Llanddewi
Llandrindod Wells
Powys
LD1 6SD
Tel: 01597 850069 or 07713 644798
E-mail: james.llewellyn@atkinsglobal.com