Commissioning by value presentation by Simon Johnson of Advice UK.

1. Commissioning for Value
A Systems Thinking Approach to
Designing and Commissioning Advice Services
London Advice Conference Simon Johnson
3 July 2012 AdviceUK

2. Thinking governs performance
Thinking ... if we asked different questions
we could do better things
System … we work on doing things better ...
Performance When we want to improve performance...

3. Systems Thinking
Systems Thinking
• Where and how do • What are our underlying
people come to our assumptions about how
service? work should be
• Why do people come to organised?
us and what matters to • What do we think our
them? purpose is?
• Do we do what matters? • Who decides and how?
• How do we know? • What do managers pay
• How does work flow attention to?
through the organisation? • How do they spend their
• Why is it how it is? time?

4. Unlearning how we think
Traditional Thinking Systems Thinking
We have a contractual relationship with people. We We work alongside people to understand their
provide a service and they choose to use it problem and what matters to them
We treat all demand as though it is useful work and Understand what demand is preventable
manage it through rationing (failure) and design it out
Standardisation improves performance Design against demand
Use scripts, procedures etc. Design the system to absorb variety
Control work using targets and activity measures Understand and improve based on measures
derived from purpose and what matters
We have a contractual relationship with We have a partnership that uses measures data
commissioners. They procure and monitor: to continuously improve the service and outcomes
we deliver and report
Understand that cost is in how work flows.
Pay attention to costs and costs will fall Identify the causes of waste and design only to
do value work
Managers make decisions, workers implement Decision-making is integrated with the work
them
95% of the causes of ineffectiveness are in
We have a people problem – find ways of managing the system. Paying attention to individual
their performance performance is focusing on the 5%

5. It’s the System Stupid!
●30 – 40% of the demand for advice
shouldn’t be there. It’s caused by the
failure of public services to get it right
for their customers
●The way advice services are
commissioned typically drives the
wrong behaviour
●Pressure to hit targets causes cherry-
picking of easier cases and a revolving
door – if clients don’t get their
problems fixed, they keep coming back

6. Look at work a bit differently...
“The performance of anyone is
largely governed by the
system he works in.”
If we set targets and make
people’s jobs depend on
meeting them...
“...they will likely meet the
targets – even if they have to
destroy the enterprise to do
it.”
Dr W Edwards Deming
1900 – 1993

7. What we learned about
demand in Portsmouth
Not all demand is the same:
• 56% ‘value work’ – what we’re here to do
• 41% preventable, generated by other agencies
% of Demand on
Agency % Preventable
Advice Services
Job Centre Plus 25% 8%
Pension Service 10% 3%
Disability & Carers Service 5% 1.5%
Social Fund 10% 3%
HMRC 10% 3%
Other 25% 8%

8. Purpose
“Help citizens to pay their rent and
council tax by making a decision
and paying benefit quickly”

10. Portsmouth Approach:
Background
• Portsmouth CLAC opened on 1 April 2008
• PCC felt that LSC contract inflexibility meant
service not meeting residents’ needs
• CLAC partnership dissolved and interim 1-year
contract let while commissioners learned about
the service

11. “What gets us into trouble is
not what we don’t know…
It’s what we know for sure ...
that just ain’t so.”
Mark Twain
1835 - 1910

12. Get Knowledge and
Understanding (Check)
• Purpose
What are we here for? • What matters?
• Demand
How well do we do it?
? • Measures
• Capability
How do we know?
Why is our performance like this?
• What gets in the way?
• Thinking
• How the work works

13. Understanding demand:
‘getting in the work’
Understanding purpose as commissioners:
• Listening to customers at front desk
• Sitting in on interviews
• Finding out what matters – really matters – to
customers
• Understanding the system
• Realisation that the system was driving the work,
not vice versa

14. What we learned
Called to Take a
Client Take ticket reception & Hand in
enters from Take a seat form to
handed and fill
centre machine seat green form reception
in form
56% Value
44% Failure Av
er Take a
ag Avg 33% of seat
e clients leave
205 - 345 69 before adviser is
m
per week in free
ut
es Form details entered on IT,
:c
ou ticket number on form, board
Purpose: Give me the right ld in back office updated and
ta
ke form placed in tray
advice and appropriate level of 2
hr
support to help me resolve my s
39
problem m
in
s Advisor picks up
On 56% of days we are oldest form from
open for less than 50% tray and calls client
of advertised hours number
Advisor and
Advice client go to
Client leaves given interview
room

15. Waste Steps
Capacity = Value Work + Waste
Waste = Spending time doing things again which have
not been done right the first time
Waste = Duplication of effort
Waste = Doing things which add no value to the client

16. Levels of Need
Type of help requested
I need some
guidance /
information then I
can sort it out
myself
18%
I need something
done on my behalf
31%
I need advice
about something
51%

17. Defining purpose
 Better understood our customers’ needs
 Defined purpose in customers’ terms
 Purpose supported by underlying principles
 Learning then drove the commissioning
process:

18. Invitation to Tender
Purpose:
To provide an advice service that supports the people of
Portsmouth to solve their problems.
Principles:
•Responsive
•Enabling
•High quality
•Professional
•Flexible
•Collaborative

19. Working with The Wider System If we did something
Preventable Demand (Failure) different in Advice
Portsmouth we could
prevent this demand
People coming in
If other agencies did
something different
we could prevent this
demand coming in If the wider world did
something different we could
prevent this demand coming in
Advice
Portsmouth
Other ‘The
Agencies Wider
eg World’
DWP
PCC
If PCC did something
different we could
prevent this demand
coming in

20. Commissioning:
• Learning drove the commissioning and tender
specification
• Purpose, principles and measures are specified –
method is free
• Applicants required to demonstrate, against each
principle:
– understanding of the continuous improvement approach
– evidence of where they have designed and delivered
services in a similar customer-focused manner
– how they would apply the learning to the Portsmouth
model

21. Commissioning:
How did the process feel?
•Looked very different to previous tender specifications
•Needed to get procurement ‘on board’
•Element of risk
– would organisations ‘get it’?
– would commissioners be able to assess objectively?
•Changes the relationship from commissioner /
provider to a partnership approach, with learning and
improvement at the heart

22. Commissioning:
Did it work? Yes!
The framework demonstrated clearly how far:
•bidding organisations understood the
approach;
•they could relate it to ways they had worked
previously; and – most importantly...
•they could think about the work in a new way,
building the service around what matters to
clients

23. Measuring success
• Number of people trying to access the service by type and
frequency of demand
• Number of people successfully accessing the service by type
and frequency of demand
• Number of people who abandon trying to access the service
by type and frequency of demand
• Number of repeat visits
• ‘End to end’ measures i.e. length of time taken for customer
to receive service, total time taken for customer to resolve
their problem
• % value and failure demand
• % of people referred to other agencies

24. Redesign Principles
• We are open when we say we are open and we never
turn anyone away
• We stop doing things that create queues
• We have expertise on the front line
• The people who use our service define what matters
• We have conversations with people that help us to
understand their problem and what matters
• We only do things that create value for the people who
use the service
• Minimise hand-offs – pull expertise when required
• We design the service based on knowledge. If we don’t
have data we go and find out
• Everyone has two jobs: do the work and improve the
work

28. Just the beginning
• New transformed service launched beginning April
• Steering Group using measures data to have meaningful
conversations about continuous improvement
• But still lots of work to do:
• Deeper understanding of root causes to inform response
• Exploring common areas of failure demand across the
wider advice services in order to switch it off
• Building on the measures
• Building on the partnership – shared Risk Register,
monitoring meetings ‘in the work’, understanding
external failure demand
• Working with partners to switch off external failure demand