Presentation by David Cole to SWWE branch on 19 October 2017 in Newport

1. What Systems Thinking Can
Offer Portfolio, Programme &
Project Managers
SWWE Branch, USW Newport,
19 October 2017
David Cole, ST SIG

2. Agenda
 Why Do We Need Systems Thinking?
 What Is Systems Thinking?
 How Can Systems Thinking Help Portfolio,
Programme & Project Management?
 Case Study.
 Conclusion.
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3. Why do we need systems thinking?
 The reductionist approach … good for ‘simple’ projects.
 Most modern projects are more ‘complicated’.
 Many projects are harder still or ‘complex’.
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 Systems Thinking:
 Helps identify where interventions will have the greatest impact; not
just straight away, but over time.
 Keeps the bigger picture in mind, and considers all stakeholders.
 Complements top-down thinking.
 Useful for almost all projects … essential for complex projects.

4. Benefits from systems thinking
 Better problem definition:
 Understand ‘system’, its environment and behaviour.
 Anticipate dynamic complexity and emergent behaviour.
 More effective solutions:
 By making assumptions explicit, risks can be better identified,
assessed and managed.
 Unintended consequences addressed before implementation.
 Facilitates contribution and buy-in from stakeholders:
 Develop a shared understanding of the problem.
 Effectively communicates problems and proposed solutions.
4

5. Examples of success
 In the Private Sector, application of Systems Thinking:
 Significantly reduced supply chain costs.
 Enabled a software company to change its culture for launching new
products.
 In the Public Sector, application of Systems Thinking:
 A hospital significantly reduced delayed discharges of elderly
patients.
 Three local councils improved services and reduced costs.
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6. Agenda
 Why Do We Need Systems Thinking?
 What Is Systems Thinking?
 How Can Systems Thinking Help Portfolio,
Programme & Project Management?
 Case Study
 Conclusion
6

7. Defining systems thinking
 A 'system' is 'a combination of interacting elements organised to
achieve one or more stated purposes.‘ (INCOSE SE Handbook)
 Systems Thinking purpose definition (Peter Senge, the Fifth Discipline):
 'Systems Thinking is a discipline for seeing wholes rather than parts, for
seeing patterns of change rather than static snapshots, and for understanding
the subtle inter-connectedness that gives (living) systems their unique
character.‘
 Systems Thinking operational definition:
 Systems thinking uses a set of approaches and tools to help explore and map
dynamic complexity.
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8. The systems thinking ‘Iceberg’
Events
(What is Happening?)
PatternsOf Behaviour
(What are the trends over time?)
SystemStructure
(How are the parts related?
What influences the patterns?)
Mental Models
(What values, assumptions, beliefs shape the system?
‘Waterline’
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9. Systems thinking approaches (1)
 Focus on effectiveness not efficiency. Resist
the urge to come to quick conclusions.
 Understand the Bigger Picture.
 Recognise that a system's structure
generates its behaviour.
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10. Systems approaches (2)
 Make assumptions explicit and test
them.
 Change perspective to increase
understanding.
 Appreciate that mental models define
current reality and expected futures.
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11. Systems thinking tools (1)
 Fishbone diagrams  Rich pictures
Diagrams
Method
Events
(What is Happening?)
Patterns Of Behaviour
(What are the trends over time?)
System Structure
(How are the parts related?
What influences the patterns?)
Mental Models
(What values, assumptions, beliefs shape the system?
Waterline
Define
Design&Develop
Test
Deploy
Operate
Feasibility Requirements
Level1 Design Level2 Design Level3 Design (CDR)
Test Readiness
Operational Readiness
Planning Sprint
Sprint Planning
Operate
Sprint
Operate
Sprint
Operate
Sprint Review
Sprint Planning Sprint Review
Sprint Planning Sprint Review
Sprint
Operate
Sprint Planning Sprint Review
Close
Feasibility
11

12. Systems thinking tools (2)
 Actor maps
12
 Concept maps

13. Systems thinking tools (3)
 Trend maps
13
 Causal loop diagrams
Source: Cooper, K. G. (1993). The rework cycle: benchmarks for the project manager.
Project Management Journal, 24(1), 17–21

14. Systems thinking method
1. Reflect on situation
2. Design intervention3. Implement change
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15. Agenda
 Why Do We Need Systems Thinking?
 What Is Systems Thinking?
 How Can Systems Thinking Help Portfolio,
Programme & Project Management?
 Case Study
 Conclusion
15

16. Systems Thinking Supports Portfolio, Programme &
Project Management to:
 Identify and define the right portfolio/ programme/ project:
 Understanding the problem and its context enables the full scope to be
defined/ documented.
 Greater stakeholder engagement gives better shared understanding of the
problem and solution requirements and increases commitment.
 Implement the portfolio/ programme/ project right:
 Planning anticipates problems and copes with complexity, leading to more
accurate status statements.
 Risk planning and mitigation is more comprehensive, increasing confidence in
the forecast final schedule/ cost.
 Stakeholders and their viewpoints are identified to improve Governance.
Their roles and responsibilities can be identified in context.
 Maximise Outcomes/ Outputs and minimise unintended consequences.
 Unintended consequences are identified and can be avoided/ mitigated.
 Transition, acceptance and handover are improved by ensuring requirements/
features are not missed.

17. How Can Systems Thinking Help Portfolios?
‘Portfolio management is the selection, prioritisation and control of an
organisation’s projects and programmes in line with its strategic
objectives and capacity to deliver.’
 Systems Thinking can help portfolio management with:
 Alignment with organisational (strategic) objectives.
 Portfolio relationships and dependencies with external elements.
 Defining portfolio governance.
 Assessing changes/ additions to/ deletions from the portfolio.
 Identification and prioritisation of further objectives.
 Assessment of what went well and what needs improving (and why)
to increase organisational capability/ productivity.

18. How Can Systems Thinking Help Programmes?
‘Programme management is the coordinated management of projects
and change management activities to achieve beneficial change'
 Systems Thinking can help programme management with:
 Definition of programme scope and objectives.
 Dependencies between programme and external elements.
 Identifying impacts on Stakeholders.
 Transition planning.
 Impact of internal/ external changes on the programme.
 Assessment of what went well and what needs improving (and why)
to increase organisational capability and productivity.

19. How Can Systems Thinking Help Projects?
‘Project management is the application of processes, methods,
knowledge, skills and experience to achieve the project objectives.'
 Systems Thinking can help project management with:
 Definition of project scope and objectives.
 Dependencies between project internal and external elements.
 Identifying impacts on Stakeholders.
 Transition planning.
 Assessment of what went well and what needs improving (and why)
to increase organisational capability and productivity.
 Assessment and diagnosis of failing projects.

20. Agenda
 Why Do We Need Systems Thinking?
 What Is Systems Thinking?
 How Can Systems Thinking Help Portfolio,
Programme & Project Management?
 Case Study
 Conclusion
20

21. Portsmouth Council Case Study: Background
Taken from: Wales Audit Office, Systems Thinking Case Studies Report, Systems Thinking In
The Public Sector, January 2010. Lean Enterprise Research Centre.
http://www.leanenterprise.org.uk/lean-research/systems-thinking-cases.html.
 Unlike many local authorities, Portsmouth City Council housing management service retains
direct ownership and management of its housing stock:
 Over 17,000 tenanted and leasehold dwellings, representing 18% of tenures in the city.
 The department has an operational budget of £80 million and a staff of ~600 people.
 In July 2006, the Audit Commission rated the council as doing very well:
 The Housing Service rated as three out of four on the council’s Comprehensive Performance
Assessment scorecard and achieved Beacon status.
 The repairs and maintenance service was rated as a ‘good 2 star service, with promising
prospects for improvement’.
 The Head of Housing Management was regularly accosted by local councillors telling him their
surgeries were full of residents complaining about waiting for repairs to their council houses:
 Contrary to the council’s survey indicating 98% of residents were happy with the service.
 The council’s KPIs showed repairs were being carried out within budget and within the time
targets as specified centrally and measured by the Audit Commission.
 The Head of Housing Management decided to investigate further:
 Discussions with colleagues led to attendance at a Systems Thinking course and the decision
to apply Systems Thinking to the council’s housing repairs service.

22. Portsmouth Council Case Study: Benefits Realised
Aspect Old System Redesigned System
Purpose •Manage all activity in order to meet
the targets and keep down costs.
•Do the right repair at the right time.
Measures •Average 24 days for repairs. •Average of 6.9 days to fix the originally reported repair.
•11.2 days to fix all repairs identified at the property.
Failure demand •60% •(In 2010) currently running at ~14% for repairs.
Customer
satisfaction
•Old MORI measures ran at 98%.
•True satisfaction 60% (as measured by
redesign).
•Repairs service has been recorded at an average of 9.9
out of 10 for past 6 months (2010).
Costs •Costs per job fell by 7% through the redesign.
•Savings from the planned maintenance budget more than funded increase in reactive repair cost.
•Repair costs have also fallen year‐by‐year.
Supply Chain •Dramatic results were achieved in supply chain organisations who adopted systems thinking.
•One contractor discovered they had no measures to help them learn and improve their business.
Organisational
Performance
•Increased capacity using the same staff: moving from a mean of 85 to 225 jobs per day.
•Additional work taken on from other council contractors.
Additional
Benefit
•Impact on the ‘Green and Clean’ service (which has a focus of removing bulk refuse quickly):
Hampshire Fire and Rescue wrote to the Council saying it had noticed a dramatic reduction in
fires on estates. They didn’t know what the council had done, but it was working!
Taken from: Wales Audit Office, Systems Thinking Case Studies Report, Systems Thinking In The Public Sector, January 2010.
Lean Enterprise Research Centre, http://www.leanenterprise.org.uk/lean-research/systems-thinking-cases.html.

23. Portsmouth Council Case Study: Project Approach
 ‘Check’ (Define the As-Is to understand the problem and its causes):
 System Purpose: The team gained insight into customer requirements by listening in on
phone demands in the call centre and talking with residents at reception counters.
 Demand: The team gained understanding of demand by listening to calls and observing at
reception counters.
 Capability: Statistical process charts demonstrated the capacity of the system. Predictably
and reliably, it took 98 days to complete a repair, with a mean of 24 days.
 Flow: The flow of work was mapped from the initial request to completion of the task.
 ‘Plan’ (Define & understand the To-Be solution):
 The team agreed the ‘value’ steps in the process were (from the customer’s perspective):
i) ensuring access to the property; ii) diagnosis of the problem; iii) repair completion.
 By experimenting with new ways of delivering repairs, further ways to improve were
discovered (e.g. responsive working enables the council to not only satisfy its customers but
also proactively look after its housing stock to prevent future maintenance issues).
 ‘Do’ (Implement the solution):
 The council’s intervention led contractors that provide housing operatives to also
acknowledge some of the problems within their own organisations.
 The council subsequently required all its housing contractors to become systems thinking
organisations. One did not and as a consequence did not have its contract renewed.
Taken from: Wales Audit Office, Systems Thinking Case Studies Report, Systems Thinking In The Public Sector, January 2010.
Lean Enterprise Research Centre, http://www.leanenterprise.org.uk/lean-research/systems-thinking-cases.html.

24. Portsmouth Council Case Study: ST Application
 Events:
 ‘Value’ (Event) demands were “I need something fixed.” ‘Failure’ (Event) demands were
“You’ve been to repair, but it’s not finished.” Failure demand was 60% of all demands.
 The council’s survey (Event) results said 98% of residents were happy with the service they
received (based on whether workmen were friendly, and cleaned up after them).
 Patterns of Behaviour:
 Rather than being unpredictable (as initially assumed) analysis of Events showed that
demand was very predictable by time of year, month and day.
 Trades-peoples’ behaviour was driven by each ‘patch’ having a set monthly spend, so repairs
were only undertaken on the problem reported, not any others found.
 System Structure:
 Analysis of the system’s capability to deliver showed that none of the measures related to its
purpose, but to activity, budgets or performance against centrally specified KPIs.
 Repairs were only undertaken on the problem reported. Analysis showed this was a false
economy. Some repairs were undertaken multiple times.
 Mental Models:
 The system purpose was redefined from “Manage all activity in order to meet the targets
and keep down costs” to “Do the right repair at the right time”.
 Rather than regarding skilled staff as a scarce resource to be guarded, early intervention by
skilled staff reduced costs and reduced further calls on the service, thus reducing waste.
 The team realised it is better to fix everything which may need fixing at the same time. To do
this they must trust their trades-people, which the old system did not.
Taken from: Wales Audit Office, Systems Thinking Case Studies Report, Systems Thinking In The Public Sector, January 2010.
Lean Enterprise Research Centre, http://www.leanenterprise.org.uk/lean-research/systems-thinking-cases.html.

25. Agenda
 Why Do We Need Systems Thinking?
 What Is Systems Thinking?
 How Can Systems Thinking Help Portfolio,
Programme & Project Management?
 Case Study
 Conclusion
25

26. Summary
 System Thinking provides a discipline to address problems that cannot be
easily tackled using a traditional Top-Down decomposition. These
problems are often complex, uncertain and/or interconnected.
 Systems Thinking provides a framework for seeing wholes, comprising:
 Approaches to understand and frame dynamically complex problems.
 Diagram tools to explore and map dynamic complexity.
 Method(s) to coherently apply the approaches and tools.
 Systems Thinking can be applied at portfolio, programme and/or project
levels, and across the life-cycle to:
 Identify and define the right portfolio/ programme/ project:
 Implement the portfolio/ programme/ project right:
 Maximise Outcomes/ Outputs and minimise unintended
consequences.

27. Conclusions
 Systems Thinking does not replace Top Down Decomposition
 Systems Thinking enables consideration of system elements, structures,
interactions and mental models. Leverage increases the further though
this list
 Understanding complex systems requires multiple perspectives/ contexts.
 Systems Thinking is not a short-cut. Benefit is realised when the Systems
Thinking principles and tools are thoughtfully and fully applied.

28. References & Further Reading
References
 Thinking In Systems A Primer, Donella Meadows, Chelsea Green Publishing, 2008.
 The Fifth Discipline: The art and practice of the learning organizations, Senge, P. (1990). Doubleday.
 Systems thinking, systems practice. Checkland, P. (1981), Chichester, NY: Wiley.
 Wales Audit Office, Systems Thinking Case Studies Report, Systems Thinking In The Public Sector, Lean
Enterprise Research Centre, http://www.leanenterprise.org.uk/lean-research/systems-thinking-cases.html.
 INCOSE, 'Systems Engineering Handbook, A guide for system life cycle processes and activities', v3.2.2, 2011.
 Reducing Supply Chain Costs, David Peter Stroh, Applied Systems Thinking 2007.
 Improving New Products Launch, Michael Goodman, Applied Systems Thinking 2007,
http://appliedsystemsthinking.com/supporting_documents/CaseExample_MG.pdf
Systems Thinking Websites
 The Systems Thinker, https://thesystemsthinker.com
 https://systemspractitioner.com/
APM/ INCOSE ST SIG Website
 https://www.apm.org.uk/community/systems-thinking-sig/

29. APM/ INCOSEUK Systems Thinking SIG
Email: From the APM Systems Thinking SIG Webpage
https://www.apm.org.uk/community/systems-thinking-sig/
Twitter: @APMSTSIG
LinkedIn: https://www.linkedin.com/company/association-for-project-
management?trk=cws-cpw-coname-0-0

30. Questions