This document outlines the goals and approach of a consulting firm that helps organizations transform their services, leadership, and customer experiences through service design and systems thinking. The firm aims to transform both the public sector and consulting industry by helping the public sector become a model of excellence and making consulting more authentic and value-adding. It discusses some of the challenges of transformation and common "fallacies" such as overfocusing on technical problems rather than complex, emergent challenges. The document emphasizes the importance of understanding organizations and demand as complex systems with interrelated parts.

1. Service design and
systems thinking 1
Service design and systems thinking…
not a leap in the dark!
©RedQuadrant 2016 Benjamin Taylor 079 3131 7230 benjamin.taylor@redquadrant.com
Benjamin Taylor
#SDinGov 2016

2. Service design and
systems thinking 2

3. Service design and
systems thinking 3
Purpose – goals
To make the world a better place, we help people to transform the way their
services, organisations, and leadership are experienced
We:
• help the public sector transform itself to be a beacon of excellence
• work on ourselves to change consultancy forever
• help people to save money and improve their business
by giving them the skills to work on the business for themselves
Big, hairy, audacious goals:
Consultancy how it should be done
Transform the public sector
• People able to make better choices about the
public services that help them to achieve their
goals in life
• Public service a cross-industry exemplar –
provide the benchmark (our public sector
clients are featured as Harvard Business Review
case studies for all sectors to learn from)
Transform consulting
• No more complicated than it needs to be
• Network consulting
• Authenticity, value-adding, humanistic,
non-manipulative
• Focused on positive experience of
services, organisations, and leadership
To change
consulting
To change
public service
delivery

4. Service design and
systems thinking 4
Purpose – goals
To make the world a better place, we help people to transform the way their
services, organisations, and leadership are experienced
We:
• help the public sector transform itself to be a beacon of excellence
• work on ourselves to change consultancy forever
• help people to save money and improve their business
by giving them the skills to work on the business for themselves
Big, hairy, audacious goals:
Consultancy how it should be done
Transform the public sector
• People able to make better choices about the
public services that help them to achieve their
goals in life
• Public service a cross-industry exemplar –
provide the benchmark (our public sector
clients are featured as Harvard Business Review
case studies for all sectors to learn from)
Transform consulting
• No more complicated than it needs to be
• Network consulting
• Authenticity, value-adding, humanistic,
non-manipulative
• Focused on positive experience of
services, organisations, and leadership

5. Service design and
systems thinking 5
To help public sector organisations to
successfully transform
A partner: navigating change, providing focus and building capability
transformation
interims

6. Service design and
systems thinking 6
A growing local government transformation consultancy
• Hillingdon – four years, £79m savings, entire management trained in service transformation
academy, whole council agile/prototyping, Essex – transformation partner expert resources
• Mergers/shared services: Strategic Alliance, CompassPoint, Southwest London regulatory
• Northamptonshire – future council model transformation advice
• Social care transformation Cheshire East, Northants, Leicester, Hounslow...
• Westminster customer programme, Lambeth lean/agile, Triborough corporate services,
Islington customer led transformation, Merton, Lewisham
• Children’s services DfE intervention partner e.g. Buckinghamshire and Darlington
• Spin-outs / mutuals: Transforming Rehabilitation, libraries, cultural and community services
Many have fallen by the wayside – we have grown 38% year-on-year

7. Service design and
systems thinking 7
About me
www.linkedin.com/in/antlerboy
@antlerboy

8. Service design and
systems thinking 8
SOME TRUTHS

9. Service design and
systems thinking 9
Most things out there are bullshit
• Most systems leadership is bullshit
• Most commissioning is bullshit
• Most transformation is bullshit
Most service design is bullshit
• ‘Clean start’ fallacy – design the future without reference to the past
• ‘Unit cost’ fallacy – unit costs are a good proxy for the whole
• ‘No systems’ fallacy – we can act on one area without being affected by
the rest
• ‘The alpha persona is the new 80% first point of contact resolution’.
Lipstick on a pig indeed!
…if we don’t understand the past, we’re doomed to repeat it.
But not everything…

10. Service design and
systems thinking 10
Sustainability
• long term view
• medium term
aftercare
Customer-led
prototyping
Enterprise
architecture
• experiential change
• patterns not rules
Human centric
• customer and
employee co-design
360 degree view
• win-win-win
• asset based
Deep analysis
• ethnographic
• positive deviance
Ways of seeing
person
family
community
service
Ways of doing
asymmetric design
pivots
multiple diamond
toolkits
Ways of sustaining
agility
coherence
culture
‘design, delivery, and
management’
Think big,
act quickly,
start small
Service design

11. Service design and
systems thinking 11
So – how can
service design
succeed?

12. Service design and
systems thinking 12
IT’S LIKE THIS

13. 13
A keystone arch

14. 14

15. 15

16. Service design and
systems thinking 16
WHAT CAN I OFFER?

17. Service design and
systems thinking 17
In the end, it’s all about
• Organisational thinking (culture)
• Demand thinking (service delivery)
• Change thinking (leadership capability and change capability)
• System view
• Learning
There are ways to think about these things, but there are no solutions
Purpose – need – demand Organisation
Adaption
Leadership
for change

18. Service design and
systems thinking 18
Contents!
• The front end fallacy 19
• The technical problem fallacy 23
• The legible organisation fallacy 30
• The demand management fallacy 43
• Seven ways to save and improve 55
• Our manifesto 58
• Fundamental questions 59

19. Service design and
systems thinking 19
THE FRONT END FALLACY

20. Service design and
systems thinking 20
Sorry – bullshit!

21. Service design and
systems thinking 21
Measure what matters… to the customer
Balance between customer impact and internal signals and targets
Matter to the customer?
FunctionalEndtoend
No Yes
Stephen Parry: http://goo.gl/PcOa7r
Its easy to focus on the
things which matter
less to the customer.
Most organisations will
create performance
indicators which fall
into the bottom left
quadrant (red text)
But we need to develop
indicators which also
fall into the other
quadrants as they
matter more to
customers
Performance exceeds service level
No of calls
Average handling times
% incorrectly assigned
Done in` one Customer
satisfaction
scoreShift to self serve
Volume of
transaction Avoidable
contact
Zone of
power

22. Service design and
systems thinking 22
Useful thinking
• Ackoff’s car – the overall results can only be understood as of the whole
business not the part
 https://www.youtube.com/watch?v=OqEeIG8aPPk
 http://environment-ecology.com/general-systems-theory/380-
systems-thinking-with-dr-russell-ackoff.html
• Alexander’s patterns – you build a house by the whole improving, not (or
as well as) an individual room)
 https://books.google.co.uk/books?id=guKWBQAAQBAJ&pg=PA101&lp
g=PA101&dq=can+only+improve+a+room+if+you+improve+the+whol
e+architect&source=bl&ots=fbiYRKnZ5l&sig=XPDeWmyzYO0yY6hpct0
NPO2b9HA&hl=en&sa=X&ved=0ahUKEwiA-
KKN69vJAhVFvBQKHay2A4QQ6AEIHzAA#v=onepage&q=can%20only%
20improve%20a%20room%20if%20architect%20starts&f=false
 http://library.uniteddiversity.coop/Ecological_Building/A_Pattern_Lan
guage.pdf

23. Service design and
systems thinking 23
LEARNING – THE TECHNICAL
PROBLEM FALLACY

24. Service design and
systems thinking 24
Problems we would like to be able to deal with
• Problems we would like – technical, authority and expertise
• Expert solutions – direct and control – technical learning
BUT there problems we would like to avoid – complex and
emergent
• leaders cannot have all the answers
This leads to frustration at ‘hierarchy’ and leaders

25. Service design and
systems thinking 25
Purely technical leadership = frustration
SO
• first attempt – give away power
• BUT chaos, confusion, frustration can ensue
This leads to frustration at ‘hierarchy’ and leaders

26. Service design and
systems thinking 26
BOTH technical and emergent leadership are needed
Complex and emergent problems always come along with
technical problems – both critical
THEREFORE
• frame the problem
• set boundaries
• create vision
• enable learning – double and triple loop
This leads to valuing the ‘hierarchy’ and leaders

27. Service design and
systems thinking 27
Adaptive challenge
• Goal is not known
• Leader likely to be
contributing
• Adaptive and systemic
approach needed
• Innovation required
• Habits and assumptions
must change
• True leadership needed
• Real progress the only
thing that counts
• Presence required
Technical problem
• Problem understood
• Outcome understood
• Authority and command
work
• World view not
threatened
• Structural authority
more important
• Power games likely
• Charisma very helpful
Adaptive over technical challenges
Other indicators
• People would rather
avoid the issue
• Recurring problem
• It’s uncomfortable
work
• Failure to resolve
competing priorities
• Moving forward feels
risky
• There may be
casualties
• People must work
across boundaries
• Progress cannot be
linear

28. Service design and
systems thinking 28
Transformational learning

29. Service design and
systems thinking 29
Triple loop learning
Examples of successfully changing identity:
• Worlds largest taxi company owns no taxis (Uber)
• Largest accommodation provider owns no real estate (Airbnb)
• Largest phone messaging company owns no phones (WeChat)
• Worlds most valuable retailer has no inventory (Alibaba)
• Most popular media owner creates no content (Facebook)
• Fastest growing banks have no actual money (SocietyOne)
• Worlds largest movie house owns no cinemas (NetFlix)
Sorry for the naff slide ;-)

30. Service design and
systems thinking 30
THE TRANSPARENT ORGANISATION
FALLACY

31. Service design and
systems thinking 31
Blind men describing an elephant
by Hokusai

32. Service design and
systems thinking 32
Four worlds
A traditional view:
• The ‘citizen world’ is separated
from ‘service world’ by an
invisible divide
(we even call it the ‘front line’)
• This is further separated from
‘management world’ by another
invisible divide – called
‘performance management’
• In the citizen world, we do market
research
• In the service world, we do BPR
• In management world, we do
business planning, budgeting –
and cuts
• In politician world…?
If we are to succeed – we have
to link these four worlds!
Citizen world
Service world
Management world
The front line
Performance
information
The point
of power!
Politician world
????

33. Service design and
systems thinking 33
Categorisation of customer insight methods
• Survey – satisfaction, perceptions, preferences – also non-customers
• Segmentation – which customers, which services, which channels
(preferences and likely behaviour)
• Focus groups (A) – messaging and perception – what they think of us
• Exit survey – customer perception, resolution, effort
• Ethnographic studies – ‘their world’ – all interactions – ‘us as part of their
lives’
• Focus groups (B) – needs and usability – how we can work with them better
• Behaviour change (A) – drivers and prompts – long-term drivers of need
• Behaviour change (B) – drivers and prompts – access channels/service use
• Customer safari – face-to-face contact improvement
• Call listening/observation/’back to the floor’ – customer journey in a
segment of the service/demand analysis
• Demand analysis – purpose, failure demand – customer interactions with
our systems
• Journey mapping – extended engagement ‘us as part of their needs’
• Customer dissatisfaction – improvement opportunities to meet needs
• Co-design – how to meet customer needs – what we can do together
• Customer effort – overall measure of accessibility
• CPx – overall measure of effectiveness
(‘Contacts per x – total contacts with council per user/house etc)
More focused on
insight in
‘customer world’
More focused on
insight in
‘management world’

34. Service design and
systems thinking 34
You never understand
an organisation until
you start to try to
change it

35. Service design and
systems thinking 35
One core approach
Start
with the
whole
area of
business
Find
opportun
ity
PredictAct
Learn

36. Service design and
systems thinking 36
What box are you in? What box is the problem in?
1
1
1
1
1
1
The environment of
the organisation(s)
2
3
4
3*
5

37. Service design and
systems thinking 37
What it looks like depends on
your perspective

38. Service design and
systems thinking 38
What box are you in? What box is the problem in?
The environment of
the organisation(s)
2
3
4
3*
5

39. Service design and
systems thinking 39
It is easy to get into contradictions if
you mix different ways of looking
without distinguishing them

40. Service design and
systems thinking 40
Multiple ways of looking at organisations
Purpose Needs Demand Resource Outcomes
Empowerment Prevention Outside-in Resource
based
Outcomes
based
Approaches
Accountants! Outcomes
based
accountability
etc
Object
of focus
Organisations
Satisfaction /
subjective
Evaluation
Research /
academic
• Complex people system
• Organisational purpose approach – focuses on both financial (resourced based) and
outcomes
• Historical / iterative – what happened last year, changed a bit…
• (And, additionally… social, metaphor, risk, sustainability, culture…
Cybernetics
(variety in/out,
variety up/down,
variety now/future) demand capacity
management
capacity
future
.
Early intervention
foundation?
Statutory /
professional
Functional
Functional /
professional
Vanguard

41. Service design and
systems thinking 41
Category
errors

42. Service design and
systems thinking 42
Category
errors are
bad

43. Service design and
systems thinking 43
THE DEMAND MANAGEMENT
FALLACY

44. Service design and
systems thinking 44
What is a service?
• A service co-creates value with and for the customer
• Our mission is to reduce the effort, time, cost, steps, process…
FROM customer need
TO positive outcome

45. Service design and
systems thinking 45
demand
control
needs
purpose

46. Service design and
systems thinking 46
Rethinking services
• Dealing with demand = fighting alligators
• Dealing with needs = draining the swamp
• Dealing with purpose = ???
• The deeper we get, the more opportunities open to us

47. Service design and
systems thinking 47
population
purpose
(need)
presenting demand
provision
socio-demographic attributes behavioural attributes
the
organisation
inputs
Thenaïveviewofdemandmanagement
cost
model here…
…to predict
here…
…to arrange
best provision
here…
…to reduce
costs here.

48. Service design and
systems thinking 48
population
purpose
(need)
presenting demand
provision
socio-demographic attributes behavioural attributes
the
organisation
inputs
Thenaïveviewofdemandmanagement
model here…
…to predict
here…
…to arrange
best provision
here…
cost
…to reduce
costs here.

49. Service design and
systems thinking 49
population
purpose
(need)
presenting demand
provision
socio-demographic attributes behavioural attributes
the
organisation
Anothernaïveapproach
cost
Change the
world…
…reap the
benefits!

50. Service design and
systems thinking 50
NEWSFLASH
(Growing) costs are a consequence of the system, not the population

51. Service design and
systems thinking 51
population
purpose
(need)
presenting demand
provision
socio-demographic attributes behavioural attributes
cost outcomes
community
interventions
demand
interventions
assessment and
management
interventions
the
organisation
measurement
assessment
improvement
effectiveness
and efficiency
inputs
not an input,
an outcome
And multiple
additional
loops and
complexities…

52. Service design and
systems thinking 52
population
purpose
(need)
presenting demand
provision
socio-demographic attributes behavioural attributes
cost outcomes
community
interventions
demand
interventions
assessment and
management
interventions
the
organisation
measurement
assessment
improvement
effectiveness
and efficiency
inputs
not an input,
an outcome
And multiple
additional
loops and
complexities…

53. Service design and
systems thinking 53
The demand management ‘whole system’
Critical to choose the right interventions across the system
Population Interventions Process ProvisionInterventions Interventions
Model and visualise whole system
- Prediction
- Best interventions
- Evaluation
10% of organisational spend
100% of organisational spend
Total system spend and effort
Behavioural
science
Social
marketing
Community
resilience
- Behaviour change
to reduce need
- Meeting needs in
the community
Targeted
early
intervention
Circles of
customer need
Positive
deviance
- ID demand drivers
- Segmentation
- Prediction
- Benchmarking
Big data /
informatics
Universal
offer
Barriers to
access (+/-ve)
Agile change
Integration
Pooled
budgets
Systems
leadership
Resourcing
decisions
Procurement
Joined up
working
Efficiency and
effectiveness
Demand
analysis

54. Service design and
systems thinking 54
SOME ALTERNATIVES!

55. Service design and
systems thinking 55
SEVEN WAYS TO SAVE AND
IMPROVE

56. Service design and
systems thinking 56
Optimise
procurement
3 …which uses
a process or
project to
deliver results.
Demand1
Contact
2
Process
/project
3
Resources
4
5 Organisational design
Source 6
Policy and commissioning7 RedQuadrant
Sustainability and
efficiency
framework™
©RedQuadrant
Effective
organisation
1 All activity is
triggered by
demand or
community
need…
2 …which hits
a contact point
or triggers a
response
4 This requires
the use of
organisational
& community
assets…
5 …which are
structured in
organisations
and
partnerships…
6 …and have
to be procured
or sourced
from
somewhere
Optimise
resources
Reduce wasteCreate flowShape demand
7 …and how we respond to demand or need is
determined by policy. Change policy
Seven ways to save and improve
v5.5 Updated 14 April 2015

57. Service design and
systems thinking 57
57
1. Shape and manage demand: effect behavioural change, reduce failure demand
2. Create economies of flow: match capacity and contact points to demand
3. Reduce waste: re-engineer processes or develop a whole lean system
4. Optimise the use of resources: buildings, IT, vehicles, other assets, people
(scheduling, downtime, contracts and management), income generation
5. Effective organisation: appropriate grouping and sharing of activities and services,
organisational structures, role and task clarity
6. Optimise procurement: procure volume, shape the market, reduce or standardise
specification or achieve multiplying effects
7. Change policy: stop, ration, reduce eligibility, delay, charge, develop to better
meet organisational purpose, demand and underlying need, share services,
outsource, mutualise, use the third sector
RedQuadrant sustainability and efficiency framework™ ©RedQuadrant
Seven ways to save and improve

58. Service design and
systems thinking 58
The manifesto*
Individuals and interactions over processes and tools
Working prototypes over comprehensive business cases
Customer centred design over painstaking analysis
Responding to change over following a plan
* with affectionate respect to www.agilemanifesto.org

59. Service design and
systems thinking 59
Fundamental questions
1. What is the system (part of the system) we are investigating?
 Understand key issues in delivery today (what’s wrong – what might be
causing that)
2. What’s the underlying purpose of the system?
3. What is the actual activity to be delivered to achieve the underlying
purpose?
 What are the options for delivery of that activity?
 What organisation and support services would enable delivery of that
activity?
 How could that activity best be governed and managed?
4. How do we get there?
5. What have we learned?

60. Service design and
systems thinking 60
the joy
the work

61. Service design and
systems thinking 61
Always happy to talk…
Benjamin Taylor
079 3131 7230
benjamin.taylor@redquadrant.com
www.linkedin.com/in/antlerboy
www.twitter.com/antlerboy
www.redquadrant.com
www.redquadrant.com/newsletter for regular updates

62. Service design and
systems thinking 62
PS two diamonds are insufficient…
problem solution delivery procurement implementation

63. Service design and
systems thinking 63
SYSTEMS THINKING PROPAGANDA
– ANOTHER MANIFESTO

64. Service design and
systems thinking 64
Systems thinking
Systems thinking Reductionist thinking
Holistic: synthesise then analyse over Reductionist: analyse then synthesise
Understand the whole system, tailor for
different levels of delivery (personalise)
over
Break into functions, discrete services,
specialist roles and standardise
Valuing outcomes and experience over Costing activity and transactions
Beliefs, principles, environment, culture over Planning and milestones
Creating an adaptive, autonomous,
edge of chaos, learning environment
over
Target setting, bureaucracy, and
perception of order and control
Managing risk and encouraging innovation over Wary of risk and innovation
Partnership delivery models over
Contractual / adversarial relationship
with providers and often partners
Intrinsic motivation through recognition, pride,
sense of control, visible impact on citizens
over Extrinsic motivation through carrot and stick
Belief in staff and citizens with
appreciative models for service design
over
Mistrust of staff and desire to control, mistrust
of citizens and desire to do services to them
Valued personal relationship with citizens over
Transaction / process based
relationships with citizens
User / outcome centric view over Top down view
Absorbing complexity over Reducing complexity
‘We are uncovering better ways of leading by doing it and
helping others do it… that is, while there is value in the items on
the right, we have come to value the items on the left more’

65. Service design and
systems thinking 65
ANNEX – LOCAL AUTHORITY
‘BUSINESS MODEL CANVASS’

66. Service design and
systems thinking 66
1) Core purpose and outcomes
2) Core customers 3) Demand drivers
4) Statutory duties 5) Core activities
7) Key partners and
interdependencies
6) Key measures and assumptions?
12) Cost structure 13) Funding streams
8) Major current initiatives
9) Key risks
10) Transformation / invest to save14) Other notes
Service name
Local authority
‘business model
canvas’

67. Service design and
systems thinking 67
ANNEX – POSSIBILITIES
OF ORGANISATIONS

68. Service design and
systems thinking 68
‘a plan of organization’
Daniel McCallum
general superintendent
New York and Erie Railroad (‘the Erie’)
1855

69. Service design and
systems thinking 69
ANNEX – THE VIABLE SYSTEMS
MODEL

70. Service design and
systems thinking 70
VSM origins – the human body
'We will seek the source of
effective organisation in the
cybernetics of natural
processes – the brain itself '
This approach starts from connection
with, and interaction with, the
environment. Organic, co-evolving,
mutual survival.
Beer studied the way that the central and autonomic
nervous systems 'manage' the operation of the organs
and muscles, and used this understanding as the
inspiration for his organisational model.

71. Service design and
systems thinking 71
The five (or six) systems –
overview and physiological inspiration

72. Service design and
systems thinking 72
• Three System 1s: maximum
autonomy consistent with
coherence
• System 2 to prevent and deal with
conflicts of interest / overlap /
informal and day-to-day resources
• System 3 is for synergy, policy, and
resource negotiation
• Systems 2 and 3 are meta-systems
– they have an over-view of the
entire interacting cluster of
operational units, and their job is
to make sure the whole thing
works as effectively as possible.
• Balanced autonomy and cohesion.
Systems 1,2 and 3: us and now

73. Service design and
systems thinking 73
Systems 3, 4 and 5:
now and/versus future and/versus identity
• Information about the
operations is held and used
by System 3
• Information about the
environment and future
planning held and used by
System 4
• System 5 monitors and
balances systems 3 and 4
to maintain the coherence
and identity of the
organisation
• follows policy guidelines.
• The base brain deals with
muscles and organs
• In the brain, information
through eyes and ears and
registered by the mid brain
• The cortex monitors and
organises the brain’s
information about what is
happening both inside and
outside
Mechanistic?
No:
(1) organic – based on a model of human operating systems
(2) deeply perspectivist – the brain makes sense (only) based on models of
the internal and outside world

74. Service design and
systems thinking 74
A continuous, whole,
continually interacting
system
Recursive at every
level!
(Did you know your spine has brain
cells?)

75. Service design and
systems thinking 75
The viable systems model
1
2
3
4
5
3*

76. Service design and
systems thinking 76
THE VIABLE SYSTEMS MODEL
How can we use it?

77. Service design and
systems thinking 77
1. Map the relevant
recursions
2. Identify the problem
recursion
3. Map the system-in-focus
4. Look for weaknesses (gaps)
in the five systems
5. Examine the information
flows
6. Make a diagnosis
7. Change everything !
8. Monitor, review, re-think,
try again
Using VSM for diagnosis

78. Service design and
systems thinking 78
Requisite variety
• In order to cope with its environment, the Operation needs to match its
variety to that of the Environment
• In order to manage the Operation, Management needs to match its
variety to that of the Operation
Ashby's law – requisite variety
• Control can be obtained only if the variety of the controller is at least as
great as the variety of the situation to be controlled
Is the organisation capable of matching the complexity of the environment?

79. Service design and
systems thinking 79
Beer’s principles of organisation
1) Managerial, operational and environmental varieties, diffusing through
an institutional system, tend to equate; they should be designed to do so
with minimal damage to people and to cost
2) The four directional channels carrying information between the
management unit, the operation, and the environment must each have
a higher capacity to transmit a given amount of information relevant to
variety selection in a given time than the originating subsystem has to
generate it in that time (all channels must have requisite variety)
3) Wherever the information on a channel capable of distinguishing a given
variety crosses a boundary, it undergoes transduction; the variety of the
transducer must be at least equivalent to the variety of the channel
4) The operation of the first three principles must be cyclically maintained
through time without hiatus or lags
In balance? Information flows? Interpretation? Timeliness?

80. Service design and
systems thinking 80
Seven conversational aspects of organisational viability
• S5<>(S4,S3) – identity
• E<>S4 – scanning
• S4<>S3 – adaptation
• S3<>S1 – resource bargain
• S2<>S1 – coordination
• S3*<>S1 – audit
• E<>S1 – stability
Steve Brewis

81. Service design and
systems thinking 81
Four aspects of organisational maturity
• Capacity: are there adequate resources to perform this function?
• Connectivity: does this function have the relationships with other parties
that it needs to perform adequately?
• Balance: can both parties resolve their issues and achieve the outcomes
they need through their relationship? (conversational)
• Consciousness: does management know that all the other three levels are
performing adequately and why this is so?
Steve Brewis