Archive | November 2010

Steve Allder: Systems Thinking in Health Services

Seddon introduces Steve by saying he’s done Systems Thinking without Vanguard. The only difference between having Vanguard consultants, versus doing itself, is that it may take longer and you may make more mistakes, but Vanguard’s purpose is to change management thinking, so they are happy for others to use their method.

Steve Allder is a consultant neurologist at Pymouth NHS hospital Trusts.  They had the worst stroke mortality in their region.  Strokes showed very consistent demand, but the length of stay in the stroke unit was incredibly variable. They were spending £6k on each patient, but being funded only £4k.  There was lots of debates about how to solve the problem. The government implemented targets, but no-one in the discussions at the local trust had any data, it was only folklore and opinion.  The two CEOs knew they didn’t have anything to spend on this, so Steve promised to get something without needing to spend.

If you come in with a stroke, you now go (within 2 hours on average) to the Stroke unit straight away. 100% of stroke patients go to the unit (previously 60%). The length of stay has dropped from 16 to 6 days. They are the only unit in the country to get near the government target of 90% (currently up to 80%).  They now ‘save’ £1K a stroke patient, with improved care. 

What has this got to do with Systems Thinking?

Steve was going to get a t-shirt saying “Peter Senge Change My Life” due to the pain of trying to create change. He liked Senge’s limiting conditions work.  You need to balance working on improvements with working on the limiting conditions, which was helpful for Steve.  He then read Seddon’s “Freedom from Command and Control” and got ideas like “true knowledge can easily be missed by the prevailing group, but the prevailing book has the power”.

For Steve, the words were “Purpose, Value, Demand, End to End and Capability”. It’s best to go in with an open mind and go back to first principles.  The value of Systems Thinking is that once you’ve learnt something it’s not possible to ‘unlearn’ – e.g. a point like ‘get knowledge’

The key to Steve’s intervention was an understanding of the six different groups within stroke patients (took 4 years of iterating to find this). Most patients were frail before they had a stroke, and had a huge stroke, which averaged a 50 day stay. The patients and the relatives just wanted to keep them comfortable, but we kept putting feeders into them.  Now we’ve recognised the patient group and talk about what might happen and they say “just keep them comfortable [rather than doing everything medically possible]”.  That group has radically improved.

If you were well before a big stroke, then you have to go to rehab, but the rehab unit would say “they are not well enough”, but for frail elderly patients they may not be up to rehab, they may just need time with nursing care.  Now they use that end-to-end lens, it’s liberated how they manage patients.  This has lead to all of the benefits they’ve got.

It wont work without a cast iron mandate

It is difficult to explain Systems Thinking to others. Steve has had this with most of the NHS. Steve talks about Flatland from “The Happiness Hypothesis” about a sphere visiting ‘flatland’ and everyone sees the sphere as a circle, getting bigger and smaller, but the two-dimensional square can’t understand the third dimension (“thickness as well as height, you say?”). The sphere yanks the square out of flatland into the third dimension and feels sickened and unnerved. When the square returns to flatland he can’t ‘preach the gospel’ to the other two-dimensional shapes.

Everyone in health agrees high quality and low cost, but don’t know how to get there. Steve says you need to work on the thinking.

What could this mean for the NHS?

As well as meeting the financial challenge it will help give patients what they need and allow employees to connect to their internal motivation and serve the wider society. You don’t know when you’ll need the NHS, but when you do, you’ll need it fast.

Questions and Answers

Why did it take so long to find out the different types of customers?

Because I wasn’t expecting it, it took me a while to understand what the data was telling me because I wasn’t expecting to see it.  The first thing I did was to do the capability chart without trying to guess what the answer would be.  Now, in health, frailty and multiple issues are current topics, so this might make it easier next time.

Seddon: The purpose of time-series data is to ask better question.  You might have to look at the data for a while, then get an inspiration and run more data.

The NHS has an issues of the revolving door with substance abuse. We’d like to engage with people earlier and get at the social issues at the cause of substance abuse. Do you have an idea about how to get through the medical arguments that doctors don’t want 3rd parties on the wards. Any advice?

We need a psycho-social model of health combined with a Systems Thinking approach.  Try and find the right advocate – a doctor outside the Trust with links inside and empower them to find someone credible in the NHS who has influence. It’s difficult to get traction.

Is there a way of extending what you’ve done to the rest of the hospital without getting managers to agree to it?

65% of beds are used by people who are stuck. The clinicians are unable to fix that. The managers, who work in the PCT / Local Authority, need to understand this, and they behave very badly.

Seddon: There’s a designed-in problem between clinicians and managers [not sure I got this right].  A bed manager is an absurd idea for a Systems Thinker.

Can you use Systems Thinking to help the community earlier in the health pathway?

GPs are paid to get blood pressure. Where we are, we have great GPs and blood pressure treatment is great.  Treatment of blood thining was not so good, but the demand data said there are only 4 patients per practice. Instead of an ‘education program’ they now ring the patients.  Now I look for the data, quantify the demand, and there’s somebody in the system that should already be doing it, and just need a little nudge.

Seddon: Isn’t it amazing we have a health service that doesn’t understand demand.

Steve: my aha moment was when the waiting time to see me or have a test was two years.  I was thinking ‘what value can I be adding?’. At that time, I thought ‘there’s not enough money and demand is increasing’ but that wasn’t correct. Demand is predictable and stable, the problem is the way we’ve designed the work.

How do I persuade my clinical colleagues that Systems Thinking will help them?

I am in management, but use the same approach to management that I used as a clinician. I have a framework, I gather data.  The problem is not the clinicians, the problem is getting their management to free up some time and support so that they might change things. Clinicians say they want to change, they just want someone to facilitate it. Find like-minded colleagues and look for easy starting points.

Seddon: Vanguard have found clinicians lap it up because they like to ‘get knowledge’.  The problem is that managers and the Dept of Health and they have been created in the last 20 years, and they believe they are doing “God’s Work”.  You need to get them out to study the system, and their thinking changes.

Why do clinicians change when they become managers?

I don’t think they do. McKinsey have found a correlation between improved productivity and percentage of clinicians in management roles.  If you show them the data they will respond to you. My experience hasn’t been that clinical managers change when they become managers.  There is a problem when managers don’t have a framework.

People who understand Systems Thinking feel liberated, so they often sound like they are talking about the spiritual and the divine.

Seddon: A clinician CEO ‘got it’, but the appointed non-clinical staff

Systems Thinking in Local Authorities

[Post-lunch dip was strong, so this session’s notes are not as comprehensive]

Phil Badley, Stockport

Interesting to hear Phil talk about his own realisation that his area, HR, was full of the same errors that he’d seen in other areas of the business.  I’d like to find out more about what it was that helped him go through this experience.  Phil Badly spoke about leadership buy-in.  Seddon says if you want to make organisational change, you need CEO or Local Authority buy-in, otherwise your chances are limited.

Denise Lyon, East Devon Council

The experience of going through Check was like an “honesty mirror” because the news we discovered was horrible.  They spent five out of six weeks of Check was spent arguing who the customer was, not what service they were getting.  They were horrified by how bad the service really was (141 days for some activities). It was so shocking because we had no measures in place that would have helped us see/understand this.  Our national indicators showed they were not meeting some measures, but none of them showed the scale of the problem.  Understanding value or failure (called “preventable demand” because staff didn’t like it) and one-stop capability and end to end times allowed them to see and understand their service levels. Their previous measures were always applied after the event.

The question they keep coming back to is, “who is accountable for this service? Which manager in this hierarchy of managers is responsible? Who’s feet do you hold to the fire?” Most managers thought “It’s not me; I’m strategic!” whilst the next level said “It’s not me, I’m strategic too! I’m too busy to deal with this!” while the manager at the bottom was looking at the top saying “You higher managers are paid a lot more than me, so it must be you!”

They don’t call them “interventions” (too much like Audit commission) so they call them reviews, but it’s stopped at management.  It’s only two years later that they are starting to do “something radical”(?) with the “management piece”.

The Vanguard consultant is described as a “class 1 drug” and a “mind bending hallucinogen” and a “guru” who was central to making fundamental changes to our thinking.

John van de Laarschot, Stoke City Council

John spoke about the idea of ‘red’ hats and ‘green’ hats (which I think refers to the idea, if there was a fire and everyone left the building, who would you let back in first, because they were central to doing business, and who would come in last) and discovered that 50% of their staff don’t contact the customers!

Interesting capability chart that showed after the initial intervention, performance trended worse for a period, showing that thinking hadn’t fully changed (people reverted to older behaviour).  John spoke about the need to “not walk away” from the intervention.

Example of Surface Water Management. A preventative maintenance program was set up to send a truck around on a calendar schedule, but the city is a flood risk so when it rains there are huge problems. But this shouldn’t happen because there’s a preventative program.  However, the frequency of maintenance didn’t match the fact that the drains at the bottom of the hill needed more cleaning than those at the top!  They overlaid the geography of the city onto the drains and re-drew the maintenance program.  They even used Google Earth to help with the mapping, with a “young person” (I love this phrase!).

Challenges are the scale and scope of the potential changes.  It’s hard to create the space to explore new ways of doing things. You can’t do this on a shoe-string (if you don’t have the capacity it will probably go slower).  There are also big political implications (often opposition groups want to ‘put it in a coffin’).  Systems Thinking creates a ‘different type of critter (employee)’ so there are issues of demarcation so having the Union on board at the start is important. 

Question and Answer Session

Q: Could John say more about ‘top level reporting’ with ‘systems thinking slipped in underneath’

John: Local Authorities are familiar with classical accounting and McKinsey / PwC. The type of methodology we want, to get change going, requires clear buy-in. The first attempts I had at selling the organisation on Systems Thinking was “we think it’s you and your mates”, so we needed to be ‘creative’. We’ve had Vanguard and PwC in the same room; and it’s like oil and water.  Out of the work that we’ve done, we’ve managed to keep them away from our customer-oriented interventions.  We were able to show it in ways that Command and Control types can understand. [So they showed reports and model to Command and Control types while running a separate set of ‘books’ showing their Systems Thinking view of the world]

Seddon: When you get to the evidence, it speaks for itself, but then you have a problem that people want it for the wrong reason.  I want it because it works, not because it’s about thinking. Buy-in is the wrong word, ‘understanding’ is the thing.  The Vanguard Network is for middle-managers to do the Vanguard Method but not telling the boss, which we encourage them to do.

Denise: Support was essential for the funding, support, opportunity to view other places.  If you can do it yourself, in your part of the organisation, then this might be a good start – better than no start, I think.

Q: If you hadn’t done Systems Thinking, where would you be now?

Denise: We were in the bottom quartile in national rankings. As time has moved on, and the financial crisis has hit, we have been in a good position to understand how we can sensibly take out from management and services. I dread to think about Local Authorities that are doing 10 – 20% cuts across all services, which I think is a poor way to manage. We feel in a strong position in the troubled times we’re in.

Q: Where was your ‘moment of truth?’ where you said ‘I will never do it the other way?’

Phil: Reading Seddon’s “Systems Thinking in the Public Sector”. I read it on holiday and realised that I’d been accountable for change in the past, and now understood ‘why’ it didn’t stick.

Seddon: The number of people who tell me “I wished I’d never met you …” (joke)

Rob Brown: Systems Thinking in a Complex Organisation

Rob Brown from Aviva is up next.  They started in 2008 with Barry Wrighton from Vanguard (also involved with BNP Paribas Fortis).  He’s currently the Lead for Systems Thinking but looks forward to the day when his role is obsolete.

Some of Rob’s learning are that Senior Management engagement is crucial. They have gone at the pace of the leader’s understanding.  In the Policyholder contact area they have no targets but have gone from 50 – 92% customer satisfaction in 6 months with a ‘clean audit’ with no issues.  The pace has been driven by the correct leadership engagements at all levels.  It took them several years for general insurance to start with their journey, but it is down to people decided when they want to start.  They decided to ‘see what would happen if they tried’.

Phrases from Senior Leaders to watch out for when introducing Systems Thinking

If he had his time again, the killer phrases he would look out for are:

  • When a leader says “I’ll delegate that to …” because they will be a blocker to redesign.  Where it has happened it didn’t work.
  • “What targets do we use?”. Senior managers, not in the work, want to set a ‘stretch target’ to get ‘better Systems Thinking’
  • “I get it!” when a leader says this, it usually is followed up with a question that shows they don’t. You have to get past the ego to get onto the work.  We have worked without/despite leaders but it has been hard.  They need to hold a mirror up to say “we need to do this in your area” in order to have dramatic further progress.
  • “Why can’t you go faster?”. Even though other projects have produced no benefits but were delivered to date/time targets, people still find Systems Thinking hard to understand.

Budgets, Plans, Risks & Regulation, Audit

It was important for them to work with the audit team so that they understood the new process.  Legal, Compliance and Risk said they felt they were labelled “Level 3″ waste (incorrectly). It’s been much better to work together with them so that they develop an understanding.

Observations from Check

There were 500+ numbers customers could use to ring in, with 48 Integrated Voice Response systems (IVR) with call centres for different product silos.  16% of all calls were transferred (which would happen given the IVRs). Customers were on hold for a quarter of the call (a single loop fix was to ‘choose better music for customers on hold’!). 15% were passed-back, 42% passed on.  Then there was the split as the call went into a back office system. Typically customers called in 3 or 4 times for a single piece of work! Yet, all of this was happening while we were ‘green’ on budgets and targets. But 50% of the time we were not giving customers what they want. By looking at the work differently, after re-design, they were able to turn off off-shoring and achieve 92% value demand.


There has been a move from intervention support to a focus on leadership and embedding behaviours.  To fully embed Systems Thinking they need much more work at all levels.

Question and Answers (with Benny Devos)

Benny on Emotional Intelligence and Systems Thinking:

People have to be open. The management used to ask people to take their brains out of their heads as they arrived at work, only to put them in when they left the building. The manager needs to understand what the customer wants as well as his team. Therefore, you need empathy. Also, the manager has to change personally.  The leader needs to help the team become leaders themselves. You need EI to detect how other people are thinking.

People change is often thought of as being a HR function. How has HR been?

Rob: We’ve learnt some lesson. When changing roles and remuneration, HR didn’t get it. What we should have done was take them through the work much more before that point. We are part of a global company and I can’t switch off the remuneration.  What we have done is given Systems Thinkers to remunerate as they see fit.  We have a new HR Director and understands that HR needs to understand how they can help if Systems Thinking is going to be extended. HR knows they don’t need to ‘do culture’.  We had employee forums who felt threatened, so we took them in and allowed them to see and understand themselves.

Benny: HR people were in the intervention from the beginning.  What we saw was that if you needed a decision you had to re-explain what it is all about. If you put enough energy in then they accept it and it changes. But this is counter-productive and wasteful because the solution takes a long time. In terms of the workers council, in Belgium, you had to go to a council every time. They were skeptical, given the McKinsey experience, so we explained and invited them to the work floor. We invited them and involved them and they understood.

Seddon: A lot of HR is dealing with symptoms of traditional Command and Control design. When you change the system, many HR symptoms go away.

Would Systems Thinking have prevented Sub-prime in the Banking arena?

Rob: If you understand the controls, and they are part of the work, and specialties help design it, it is much better control than the ‘remote sign-offs’ that most businesses used.  Sign-offs are fine until something happens, but with Systems Thinking the right people are involved at the right time, so it’s a stronger sense of control.

Benny: Don’t repair – put right the first time.  Top managers don’t have any understanding of what they are signing off – it doesn’t make sense.

Seddon: The regulators played a part. Regulation is a catch-up. They assume it applies to all products. They should make it a preventative thing. You shouldn’t be able to launch a financial product without showing what it would do. Politicians also thought that finance would drive growth. Some economists think that financial servers should help the economy, not be an economy in its own right.

“We’ve also done it this way, it’s how it works … it’s how it’s regulated”. Is there any one thing you’ve done that helps managers avoid this? where do you start in terms of getting people to think in a different way:

Rob: Get the right people to look at what’s happening in the work differently. You can’t have a debate about ‘what’s the better method’ – focus on getting people to see what’s going wrong and allow that to drive what should be done differently. Leaders should look at their world differently. Don’t do it at tables in offices.

Seddon: It’s an intervention problem. Man is not rational. It is not I explain, you understand. It just creates conflict with two mindsets using different language. If you put them in a normative experience then together they develop, building a common understanding, and that helps the change.

Benny: It’s a common understanding, and it’s not the managers that are doing the redesign, it is the workers. They do trial and error and demonstrated that it’s not normative. The managers were focussed on the measures, not how the work is done. We focussed on ‘positive’ people and worked with them. We gave managers an ‘Informed Choice’ some managers wanted to join early.  They were only rolled in if they wanted to.  Those who decided not to, went to different areas.

Seddon: Roll-in is a deliberate phrase we use instead of ‘roll-out’. Now that we have understanding, how do we ‘roll people in’. We need people to see the relationship between assumptions and policies, which requires normative experience.  You might think this will take longer – but try doing the wrong thing, it will never happen!

Another question on Emotional Intelligence. In the examples there were less workers, was this a threat to the rest of the workforce?

Rob: We had a cost-reduction promise hanging over us, which is tricky. We faced up to this fact and had discussion about the fact it would happen, but we would do it from a ‘where’s the value’. It was tough. We told the frontline that they were sacrosanct because they understood the demand.  People work out that you may not need as many people, but there are lots of other places they could go in the organisation to add value.

Benny: The biggest problem was getting people to believe that we weren’t threatening jobs (there was no budget or cuts over our heads). People didn’t believe me; it took time, energy, talk and waste from my point of view to convince them. It’s a normative experience; they find out themselves.

Seddon: Systems Thinking in the private sector is about driving growth.  We provide a framework, so if you have to take people out, it helps make sensible decisions about where to take people out.  We tend to always find too many people in the “management factory” (which Seddon admitted was pejorative)?

Benny Devos: Systems Thinking in Financial Services

Benny works in ‘industrialised credit operations’ in BNP Paribas Fortis in Belgium (mortgage and consumer loans and insurance, across the value chain including rate revisions, partial re-imbursement, credit recovery).  The biggest challenge is management, the workforce like Systems Thinking.

Benny Devos talks about how they started with McKinsey working on ‘process improvement’. They used a stop watch to see how long it took someone to agree to a loan (it’s incredible to hear that this still happens). They averaged the time across easy and complex decisions – without any knowledge or understanding other than a stop watch! After 6 months the motivation was low, the workers’ council were complaining.  They went for McKinsey Plus and added an ‘emotional aspect’ by involving people on the floor. Instead of a stop watch they asked “how long do you think this task will take?” – they averaged the guesses and started all over again (single loop!).

Benny says once you get caught by Systems Thinking it never leaves you.  He worked with Barry Wrighton.

Purpose – what matters to the customers

They invited 350 people to call customers who had loans, or refused loans, to hear what they expected of us.  The easiest way to find out what matters to the customer is to ask them.  Logic such as “I know customers because I am one myself” is myopic.  The results was they were not working in ways that customers valued.  The branches were effectively ‘crying for help’.  Instead, after the McKinsey approach, if you had a file and couldn’t make a decision (missing data) you had to send the file back, you could not phone them (because you would miss the target). When it came back to the branch, they couldn’t do anything more with the file – if they could have they would already have done it.  The branch weren’t allowed to call the person who did the work, they had to call a call centre, who could only answer 50%. They had to escalate back to the group who identified the problem, who got back to the branch, who fixed the file, to send it back to the processing group.  85% of files were being sent back!   This was very confronting – easier for Benny because he was new, but for the existing managers it was like looking at yourself in the mirror and not liking what you see.

Demand – type and frequency

They worked with 1300 file s a day with up to 95% failure demand (the files were repeat files, after being fixed through help desk and second line support).  The only measures they had were SLA’s of 3 days.  But the SLAs were for a complete file which lead to ‘cheating’.

They used a new kind of project language using ‘bringing in, live with, get rid of … (process problem)’


There was an assumption that customers wanted a mortgage loan response instantly.  Knowing that there was a 3 day SLA didn’t help the fact that sometimes it was taking 25 days.  The customer wants confidence they can get an answer within a promised time, with one visit to the branch.  85% of times the customer did have to come back to the branch.  The measures we had were budgets, productivities and SLAs (internally foused at the department level). The new measures where varation, predictability of it, end to end custoemr times, iterations (numbers and kind of …), help desk calls (number and kind of …) and capability charts.

Capability charts focussed on the extremes; ‘why is that taking so long? as well as ‘why was that so fast?’


They used Process Mapping

System Conditions

There were two groups for loans; consumer and mortgage were separate.  There was an assumption that people dealing with mortgages weren’t able to deal with consumer loans. There were duplicate departments, managers, IT workflow tools (there was even a competition between departments).  They found that the demand was cut into pieces to fit into the silo-ed parts of the organisation.  HR rules meant that it was difficult to ask people to do different jobs.

Management Thinking Assumptions

Standard Vanguard issues were identified.

After Check, Comes Redesign (Plan)

The question was ‘given what the customer expects of us, how should we organise ourselves?.  The custom gives us a demand, we need to analyse, data entry and treat it.  In the old system a demand was split into 5 or 6 different requests.  It wasn’t possible for people to handle every type of demand (they have 160 different types of actions that are needed).  The goal was to have a maximum of one hand-off.  Other goals were end-to-end, first time right, one stop and minimise hand-overs, only do the ‘added’ value work and a client oriented approach.  They decided to be client oriented, rather than product-oriented by combing mortgage and consumer loans handled by the same people. The staff decided on the measures and the decision-making was integrated with the work.

Roll-in of progressive change

They started off with small teams (4 people in the beginning) so not a big bang approach.  They trialled the principles of the re-design. They had the right to experiment and make errors, and little by little it stabilised until the team said they could do more work and we increased the team to seven people.

They found that for some operations it took 32 days end to end involving 52 people.  After redesign, it was simplified into “decisions + contracting” –> “branch” –> “customer”. There were assumptions that it would take 2 years to train people in contracting, but experience showed 95% of demand could be trained in just two weeks!  The new redesign involved telling the decision makers to call the branch (previously prohibited).  The result was 10 days for end to end with 42 people.  The workload increased by 30% over that same period as well.

An example of mixed demand, where one customer had a mortgage and a consumer loan.  They used to have to split it, but after the redesign where the team could deal with both requests as a single piece of work, the end to end times dropped from 15 days to 5 days. 

Main Results

The ‘bring-in’ phase resulted in e2e times for 28 days to 12 days, handling this with 20% fewer people involve.  The workload was up 20% (+29% in amount of loans, +8% market share). In ‘live with’ e2e when from 10 days to 5 days, but they were able to offer more flexible mortgages with new features. ‘Get rid of’ if the customer needs help, they now start straight away, rather than waiting until they started the financial recovery process.

The Global People Survey across the bank showed that the groups involved had the highest motivation, but they were more critical of how well they were satisfying customers than other areas of the bank (possibly because they are more connected to the customers). Absenteeism reduced from 8.5% to 3.5% in 1.5 years. There were also no appeals in the appraisal exercise (previously there were 20 appeals out of 280, but last year there were no appeals).  People are more motivated by the work than by the money associated with the financial bonuses.  Last year they didn’t use their discretionary bonus funds for ‘paying off’ (my words) dissatisfied staff.

What is management’s role?

The hardest part is working with managers and helping them see their new role.  Their role becomes understanding demand, thinking outside in, engage staff, walk the process, allow staff to experiment with design and evaluate etc.  Previously managers used to be specialists at solving tricky decisions, but now they have to become a specialist in training (moving from ‘disablers’ to ‘enablers).  They now need to create conditions that enable workers to reach their goals.  They need to support and encourage the initiative of the workers.  They need to ensure that the process / initiative is end to end.  Also, building agreement with others outside the process.

Lessons Learned

In Benny’s experience, the managers who went through the intervention decided that they no longer wanted to do the new management role. They decided to step back and do other functions. They had 32 managers at the beginning and ended up with 19. You need leaders, not managers.  It’s not about big bang, but progressive change.  Everyone agrees with the logic of Systems Thinking but stopping “Command and Control” is not easy and requires vigilance, especially if the rest of your organisation is still using a traditional approach (it’s a lot easier to stand still and follow the heard).  Also, managers are often hired for analytical ability, but Systems Thinking needs more Emotional Intelligence than IQ/analytical ability.  The manager needs to have an enabling role, not a disabling role.

The roll-in started very small, with a small team, it made a lot of waves in the beginning, but the larger the team grew, the fewer waves that were produced.

Owen Buckwell: Systems Thinking in Housing Services

Owen Buckwell is describing the award-winning work as Head of Housing at Portsmouth Council.  Here are a selection of key points

Things they used to pay attention to now take care of themselves.  For example there is no more training events for morale. We don’t manage sickness, but sickness leave has gone down. 65% of all sickness is with 20% of the people (grounds maintenance) and the cause of their issues was back pain. So we’ve given them training on how to lift and sicknesses have gone down! Cleaners were eating without washing their hands and getting stomach issues, so now we’ve given them hand gels.  Awesome example of studying the system and going to find root causes, rather than working on the symptoms!

They no longer spend with Vanguard, they lead the change themselves now.

A control chart(!) shows that formal complaints about housing repairs have fallen (80% reduction).

Ian Gilson, from Comserve, a contractor to Porstmouth Council is on the stage.  He speaks about the Vanguard intervention in October 2008.  Multi-trade Supplies was invented after this intervention.  Owen used “brute force” on Comserve to force the contractors to look at their service from outside-in.  The measures that they used showed they were doing well.  Owen took them to the tenants and walk through the jobs to identify the issues, which ‘opened their eyes’ and ‘made them curious’ about what they saw. Ian mentions that they realised they had ‘management filters’ which prevented them from seeing the problems of the work.

In ‘Check’ they realised they had no effective measures of the work, or to understand the purpose (above ‘make money and provide a decent service’). They found a lot of waste – replacing a wooden front door took four visits! They used to go at times that were not convenient to the tenants and surprise, the tenants weren’t there.  The people wanted to do a good job but the system wasn’t letting them.  Check is very difficult for a leader of a business to go through, since the leaders have created the systems that cause the problem (not enough stock in the van because they weren’t trusted to have the stock).  They had to go through an un-learning about the fact that what you were doing that you thought was effective is not.

In ‘Redesign’ they talked about the ‘art of the possible’ and started with a ‘blank slate’. They worked with John Little from Vanguard.  They started to run experiments and identified the purpose (‘Do the right work at the right time’). The tenants want a first-time fix, in one visit.  The right time for a tenant meant the specific (not time boxed or choosing a slot) time.  It is there job to resource against demand.

They developed an IT package (sadly, it didn’t take much programming – will Systems Thinking mean less work for software developers? I say, ‘probably’).  There are two columns, essentially Demand and Capacity.

Creating a trade supplies company (in the middle of a financial crisis!)

[Comserve set up MTS – multi-trade supply in 2008 in the middle of the financial crisis after the issues around trade supply they found when they studied the work during ‘Check’]

They found major problems with operatives having the right stock at the right time to finish the job.  Often the stock wasn’t in the van. Many times the tradesmen had to go to a trade supply.  Intriguingly there is often a burger van outside the trade supply store – showing how much time tradesman were waiting there! (1.8 hours a day per operative going to the trade counter – £560,000 a year!)

End to end cost – how much does it cost to supply a replacement bath? The focus was on getting on the cheapest bath, but often this meant the operative going past 2 or 3 stores, to go to a place to get a bath £5 cheaper! (a unit cost focus), not factoring in the £20 an hour the operative wasted driving past the stores to save the £5

Comserve tried to get another supplier to deliver stock to the operatives on site.  They had to set up their own database about what was used, by who and when. They then went back to the vans to review the stock that they had in.  Previously they’d had meetings about ‘what stock do we need in a van’ (without checking).  After 13 weeks of data, they realised that 75% of the stock in the vans wasn’t used. Of the top 20 items, they didn’t have 10 of them in the van! By studying and collecting data they were able to improve it to 85% of the van contents being used.

It wasn’t practical to have every piece of stock in the van. They realised that big items, such as baths, had a lead time (about 30 minutes), so they could get someone to deliver it, leaving the operative on site to keep doing useful work.  The operative rings ahead of time and says “I need a batch in 20 minutes” and the trade supply group deliver it.

They have capability measures.  An example of how often MTS were on time – how long do operatives have to wait? Sometimes a door can be taken off quicker than it can be delivered.  They know that people are waiting 256 minutes a day waiting for supplies.  They believe that they are now saving £245,000 a year even factoring in the costs of the delivery group.

Customer satisfaction wasn’t in a control chart because ‘it was a flat line’ at 9.93 / 10.  If it wasn’t rated a 10 we ask “why wasn’t it a 10?” this lets us look for trends that allow us to improve the service.

For the leaders, they have happy customers and an engaged workforce.  Management decisions are based on fact.  Without taking on more staff they have increased turnover 66% in 18 months.  They have new clients.

Seddon’s Summary

If you told repair organisations they shouldn’t work to standard times, people would say ‘that would be tricky!’ but Portsmouth shows it can be done.  When an operative gets to a house they phone in ‘how long it will take’. Most managers don’t trust operatives to make this decision – “they’d just bugger off if we let them do that”!”. Portsmouth have ‘designed for perfect’ around ‘optimising the system to fix the problem first time when we visit a house’.  The audit commission have downrated it because there are no benchmarking and schedule of rates – but would they have done this if they’d visit other people? Deming said ‘don’t copy without knowledge’.  Benchmarking is the fastest way to mediocrity and being like everyone else.

Question Session

Owen answered a question about how to introduce this with managers:

Managers thought that it was mad, because it didn’t fit with their MBA, so we had to help them with a ‘normative experience’. They did start by looking at Toyota, Virgin and Tesco who described themselves as ‘Systems Thinking’.  We put people through a 3 day crash course on ‘Lean fundamentals’ from Vanguard to build knowledge and learning. But it became clear that training wasn’t going to be as effective as doing; we needed to improve something.  So we started with something that involved customer focus, so that we could start measure or learn.  It wasn’t easy – you are trying to make this normal. It can’t collapse if a leader leaves the organisation. It took me a long time to work out that I needed to work out how to work on people’s thinking, not on what they do. It took 2 interventions to do this.  Even today, at Portsmouth, there are people who don’t think this is the right thing to do. Sometimes you just have to be tough and say ‘this isn’t an option, this isn’t a democracy, this is what we’re going to do!’

More from Owen:

The management are very focussed on reducing unit costs of phone calls, but they aren’t looking at why people are having those calls!

People in the organisation now want to know about Systems Thinking because they need to start saving, but they are 5 years too late to start achieving in-year savings.

In focussing on traffic wardens the focus was on reducing the number of people walking the street, because they ‘seemed to be doing the same thing’. But now, for example, if someone sees fly tipping they have to ring a call centre, that then have to send it out to another person on the street – all of this is activity that doesn’t related to helping the public, but what managers are focussing on is on reducing the cost of the call!

We aren’t trying to make services more efficient – we are trying to redesign them”!

Ian on how they collect data for their database:

Our data comes from the on-site operatives.  We’ve done away with PDA’s because we found they didn’t work. When they go to site, the time they are sent is logged.  They assess the repair on site and ring back to the call handlers to say they are on site and how long it will take (we’ve captured travel time automatically). When they are finished they say ‘this is what I did and what parts I used from the van stock’ (giving times for completion, parts used, number of operatives, number of visits to complete the repair).  All of the data goes straight into the database without using any paper forms.  We use these data (real data as Seddon says, not arbitrary things like targets).  The database is custom developed.  It took 3 weeks to write and cost £3,500! and this was with a 1,500 bonus to do it in 3 weeks rather than 4!

Owen on regulations in housing:

We asked users what they wanted, and they said they didn’t want the measure that the Minister wanted.  It was the same with choice-based lettings.  Choice ended up discounting those most in need because they weren’t savvy enough to handle the bidding process, so we told the minister we weren’t going to do it.  It got to a sessions where we said “Are you going to make it the law? If not, we’re not we’re going to do”. Sometime you need to have the fortitude to stand up to the minister to say “no, our residents don’t want this, were not going to do this”. Sometimes you just have to do what is right.

Did the efficiency savings reduce the oeprative’s pay. Ian answered:

All of our operatives are on salary so it’s had no impact.

Question: “If I said we’d do repairs when the customers want them, the manager would say we need a buffer of repairs to deal with peaks and the troughs”. Ian answered:

When we started doing repairs when customers wanted, there were peaks at 10am and 2pm with troughs in-between. This was a challenge for the first month or two, and we missed many promised times.  We found that we had two teams – repairs and voids (where one tenant leaves and it has to be fixed for the next tenant).  The void work now gives us this buffer. We have strict void times, and we make sure we get them done, but by blending them together. All operatives do repairs in the morning and then switch to voids in the afternoon, allowing us to meet customer demand on voids and repairs.  Also, block repairs help with buffering.  As an example, we used to take doors to site ‘unprimed’, but now in the downtime we have for painters and decorators we prime the wood up so that they go to site already (which takes out the peaks and trough for painters and decorators).  It takes 3 – 4 months to get a good enough picture of demand to be able to resource against it.

What happened to the managers? Owen answers:

None of the managers have left. The ones who had the locks on their doors changed are still there. One said “if you think that I’ll give up this office that took me 30 years to get, you’re dreaming” (Owen got the carpenter in). Now that manager says they now love being out in the work.  We’ve placed our managers to go through a normative experience to do interventions with Ian’s team (their outsourced supplier!).  Lots of people say ‘how can you resource this?’ but when you look at what their current job is they waste their time on meetings and e-mail.

Question about self-contained teams or clusters who are resistant? Owen answers:

We believe most people want to do a good job. You didn’t advertise for ‘negative, recalcitrant people’ – they turned up as good positive people.  What’s happened in the mean time? We have, giving them a system that didn’t allow them to do their job. We’ve found working on the system works.  When you start, you think it’s “people problems”, but after you realised

John Seddon: Starting ‘change’ by ‘studying’ isn’t sexy but it’s right!

John Seddon starts the Vanguard “Systems Thinking: The Leaders’ Summit”:

“It’s not very sexy to say we’ll start change by studying.  Managers like to do something, let’s start and do our ‘programs of change’.  ‘Let’s study’ is also rude because it implies we don’t know what’s going on. Deming used to say managers knew everything except how to improve.  He said you need help from outside, but really you need to have a different way of seeing and studying.”

There were some interesting discussions in the taxi about people being worried about this being an ‘evangelical event’ and that many of the videos of ‘success stories’ on Systems Thinking Review had people speaking about ‘how I was blind, but now I can see’.  It’s an interesting dilemma; if the results are counter-intuitive and people do go through a learning loop that feels like they can now ‘see’ how can you describe this to others without being evangelical? Also, how would you present this in a way that was vigilant against it becoming religious/evangelical?

How could we mistake-proof our thinking?

How could ideas from psychology, lean, systems thinking and behavioural economics help us design systems which are better able to detect and correct error, so that we could ‘mistake-proof’ our own (and others’) thinking?

We know that it is common for humans to feel that they are right.  As Kathryn Schulz (@wrongologist!) says in her book “Being Wrong: Adventures in the margin of error”, “what does being wrong feel like?  It feels *exactly* the same as being right until the point we realise that we’ve done something wrong”.  She illustrates this through the “Wile E. Coyote Moment” where the cartoon character, runs off a cliff (he is ‘wrong’ at this point, but still feeling ‘right’), looks down and realises (detects the error) that he’s standing in thin air and plunges (now he no longer feels ‘right’)

One of the problems we have with detecting error is that we often trust our direct sensory experience as a way of testing if we are wrong or not.  We know, from optical illusions and auditory illusions, that our eyes and ears can play tricks on us.  However, we rarely acknowledge or act with an awareness that we can have similar problems with our thinking.  There are many sources of evidence that we experience ‘cognitive illusions’, such as the work of Behavioural Economist Dan Ariely.  For the Lean readers, Taiichi Ohno discusses the problem of “illusions involving mental processes” in “Workplace Management”.

Chris Argyris’ research (see my Argyris links) has found that we are often ‘blind’ to the fact that we could be wrong.  Further, in situations where the consequences of being wrong are potentially embarrassing or threatening then we are even less likely to be vigilant about the detection of error, and if it is discovered that we were wrong we’re likely to bury, bypass or cover-up the error (and deny that we’re bypassing the bypass!).

So, if we know that humans act like this (e.g. this is the ‘system’ we have to work with), how would we mistake-proof our thinking? (the concept, not tool)

I’d say that we should ask questions like the following:

  • How could we reduce the potential embarrassment and threat around being wrong?
  • How could we be more open to the fact that we rely too much on our own tests of our assumptions (where we often ask ourselves “Do I believe what I believe? Why, yes, I do!”)?
  • How could we be more aware of the fact that we often cover-up the fact that we test our assumptions privately? (e.g. we generally don’t say “I was unsure if I was wrong, but I’ve just tested it with myself and have decided I’m right!”)
  • How could we work with others to overcome these problems and remain vigilant about detecting and correcting errors?

What are your thoughts?


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