Service design How-to Series #10 service design measures

Systemic measures are an element of any systemic design, especially as we know that measures drive behaviours of the managers and staff. This case study describes a team developing measures for a transactional service.

This article describes the measures of a transactional complicated service.  If you're looking for measuring in a complex service, ​you might wish to go   Measures for Complex Service Design

TRANSACTIONAL SERVICE MEASURES
Measurement and service design go hand in hand. But, for many of us, the word 'measures' harks back to graphs and numbers. It speaks of a pile of charts arriving on a managers desk, for them to review and assign blame. What we are going to describe here is a very different approach.

This approach uses systems thinking. Looking at the service from end to end, and outside-in, the measures that we can create are different to those that there created by a Command & Control organisation design. This is because the command & control paradigm relate measures that focuses on control and data, and internal departmental efficiency. Measures are almost always used to monitor staff and activity.

So, what are alternative measures? They are those that measure of the performance of the WHOLE service and indicate what is going on in the wider system. As a part of the definition of person-centred they begin with the customer. They are a window for us to peek into the system.

Good Measures
Good measures do more, much more. Measures are part of the behavioural control that are used to prioritise and direct decisions. Command & control measures reinforce reductionism thinking. Good measures encourage systemic operational design. This means that they point everyone in the organisation to focus on the customer, that encourages working across departments, and they encourage managers to design cross-functional teams. They encourage a positive culture within the organisation. They align governance and auditing to focus on the right things. They encourage the design of the service to continue to become person-centred; their correct use starts the journey of learning and improvement. For many of us, they are the secret level that opens up a new way of thinking in the organisation.

We are trying to move away from:
 It is old-fashioned performance management that keeps us in a world of humans as resources, as command-and-control takers, with rigid top-down planning, and solid prevention of curious and exploratively-minded cooperation. Corporate-Rebels
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Definition; we are going to define what we mean by measures

Service measures as:  that which helps us to understand what is going on in the service,
and,
how well are we doing with respect to our purpose (our customers)

Where so we start? I like to start from the measurement guru's, Dave Wheeler, wise words; Ask ourselves what is the problem we are trying to solve?

Problem 1 - how well is our service performing?
Problem 2 - we want to know how well the new design compares to the old.
Problem 3 - we wish to alter the behaviours of how measures affect managers and staff.

In the description here, all three appear intermingled.
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Managers
One of the tactics I use to engage and help managers to participate in a relevant way, is to ask them to participate in the defining and gathering of data, and knowledge, to compile the measures. They have to get connected to the work to undertake this. I ask them to work with the team, and to observe how the team use the measures to learn and improve. In the new design, one of the managers tasks is to identify and remove systemic barriers that get in the way of what the team need to do, and measures are used to identify those barriers and to track the changes.

Measures Framework

Systemic person centred thinking can orienting measuring performance into four main areas of a service; 

​​service and purpose, efficiency, revenue, and morale (culture).

We are going to use a step by step framework to define our systemic measures, obtained from basic systemic service design principles

LEADING MEASURES
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PURPOSE & WHAT MATTERS
To begin the measurement framework we start with Purpose, and ask ourselves how do we measure achievement of purpose? Purpose must be defined by the customer or citizen. Purpose can then be split into:

- the what we do, and 
- the how we do it

How we do it, for example of a measure, might be defined as 'end to end time', or 'needs met'.
What Matters is obvious when each customer interacts with us. It is often very individual; "I want it now, or "I need help with..."
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Focusing and measuring Purpose and What Matters defines a person-centred service. This focus leads everyone in the organisation in being mindful of the customer in every activity and interaction. It is the core of the design. This measure rises above all others, it is the primary measure. It is a leading measure; we use it to lead our design, actions and decision-making.

VALUE
In this methodology Value is a term that is defined when we ask ourselves;

  What are the activities that a customer recognises as providing value to them, that helps to achieve purpose?

Anything that directly provides value to the customer is defined as Value activity. So measure Value, and compare that to the amount of non-value work. It can be simply expressed as a percentage.

When we focus on designing a service using only Value work, then we design the most efficient and effective workflow that we can. 
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This is a measure that is second in importance to Purpose

Summarising this fundamental point that brings systems thinking to the heart of our service, a person-centred (outside-in) perspective,

purpose is defined by the customers in general
what matters to individual customers
value are our activities that directly contribute to Purpose
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and dont use averages, as they remove the individual variation between customers that we want to understand.

LAGGING MEASURES
And now we look at the remaining measures, that help us to understand the operations as a business. These business measures are almost always Lagging measures, in that they are Outcomes of working to Purpose and focusing on Value. Lagging measures should not be used to manage operations, as they have occurred in the past. They point us to what has occured, and help us to learn what we need to change in the service

EFFICIENCY
This is a simple measure that, in its most simple form, it is cost per unit. In most services this is a financial calculation that should be kept unique for individual demands, rather than averaged.

REVENUE, OR PROFIT

• The amount of resources that are consumed in the end to end flow of the service delivery. 

Cost is one that so many managers focus on as the primary measure, only to find that they are chasing what has occurred. As a systemic thinker, we are looking to identify and focus on the Causes of Cost.
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MORALE
The culture of an organisation is an outcome of various elements of the way that leadership directs the organisation, and how managers behave. Morale and culture is perhaps inappropriate to quantify in categories and numbers, but can be understood easily by paying attention and asking the right questions. 
Linking up the leading and lagging measures brings us to EFFECTIVENESS. This is a combination of how we would review the measures together, and learn how they work together.

Principles of Good Measures

And, these are some principles which define behaviour (so that we dont revert back to the old ways)

• measures should be in the hands of those who do the work (visible on the wall), so that they use them to understand and improve.
• customer purpose and what matters to customers must be derived from the work (not in a room) and drives our workflow design.
• used to analyse and understand, and by managers to improve the system.
• they measure what is real and happening, and demonstrate true variation over time. (they are not targets, or averages)
• distinguish between focusing on understanding the variation between individual customers (individual comparison - rather ineffective), and understanding the systemic design (trends - what we are interested in)

​And one last thing, measures should focus on creating VALUE. What that does it to direct discussion towards Purpose. That will then develop into a learning cycle, where the value of the service is improved over time.

How we measure

I always have a bit of a fight at the beginning of this. The team automatically begin to think about what digital method we will record data. I insist that we will do this on flip-charts, on the wall. After lots of groaning and jokes about dinosaurs, they reluctantly comply.
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Why do I do this? The real detailed answer is below, but primarily this is about making the data and the measures always visible and owned by the team in real time. Over time many of this can be Digitalised.

When we measure

Understanding the main aspects of a transactional service is a relatively rapid task. Therefore the measures as described here can be defined and collated towards the end of the Understand phase. Obviously, the measures for the new design cannot be collated until that section is complete.

A real example - Housing repairs

(This is a non-digital design, but the approach can be applied to a digital design)

Lets use a empty housing renovation service as an example, a typical transactional service. The current traditional measures are;

• number of repairs per month, average cost of each repair, average time to complete the repair, repair type, repairs that failed the target time.

In our initial analysis of how the current service worked, we realised that the measures were created by managers with a particular paradigm;

- that all repairs should be treated as the same, therefore we can compare each repair to each other. We create average trends.
 - we measure time spent doing any activity, and attempt to reduce it, regardless of its value.
- use set arbitrary targets, and use them to measure performance of the contractor.

The problems this caused were;
- the targets caused the contractor to cheat the measures.
- the relationship between the contractor and the organisation was poor. And the current measures, being historic (measures of past performance), did not help to understand real performance.
- progress meetings were simply one view over another.
- the managers did not have an understanding of the true performance of repairs. 
- causes of problems were not known, or remedied.

Repairs were categorised, by the organisation, as emergency (1 day), urgent (5 days), and standard (28 days). 

This categorisation caused the council to force a level of service on the resident of the house. And the contractor would find ways of cheating the figures.
Complaints into the organsiation were legendary!

In our systemic design, we want to use measures to help senior leaders to develop systemic understanding, and to demonstrate how well the new design prototype was working compared to the current way of working. And we want the focus to be a customer (House-centred) view of the service. The old measures fail to do this, and we have to create a new set. In the experiment, as analyse each repair we undertake, we record as much information as we think we might need, and make it very visible.
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We also wanted measures that would aid in developing a good relationship with the contractor.

each repair visible on the wall

I work with the team to decide what the new measures are going to be, and this takes time. What to measure was guided, but decided as a team. And in the subsequent weeks they were tweaked and developed as we learned more. They had never done this before, so it progressed step by step, aided by a manager when we asked for help.
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We also had to create a new workflow, of how the new process was going to work. This workflow was then influenced by the measures.

Deciding what to measure

To develop a new approach to measures, we need something that takes us away from what we have done before. So, we started with the main areas of; service and purpose, efficiency, revenue, morale (culture). This covers the main areas that measures should cover in any service. We also had a view of creating collaboration between the organisation and the contractor. 

With a transactional service like this, there is some correlation between one repair to another, but they have to be the same repair type. In fact, grouping them all together, we found it to cause all sorts of bizarre inappropriate behaviours and decisions by staff and managers. A roofing repair is going to take a different approach than a plumbing repair.
However, when we take a random sample of repairs, and compare those in the old way of working, with the new way of working, that difference can point to interesting characteristics of the prototype way of working. 

PURPOSE
- Purpose was defined as

   the what; 'bring the property up to the standard.' 
   the how; 'repairing the house within the planned time.' 

We measured purpose by recording when the demand for the repair was made, to when the repairs were complete and stayed fixed. 

WHAT MATTERS
This was different for each house. We ended up measuring the number of repairs that had to be made, and projected completion date by the contractor. Some were very urgent; for example heating not working in the winter. Others could be completed when necessary.

VALUE
The actual number of days to complete the repairs if we put the right number of people on that job, full time.

EFFICIENCY
The amount of rework we had to do for each house.

REVENUE (SPEND)
- cost per repair type.
- cost variation per planned cost.
The really useful perspective to help the managers with at this point is to link cost (which they care lots about) with causes of cost. This is about showing that by simply cutting costs, other parts of the service are adversely affected. But if we look at the causes of cost, then costs reduce.

MORALE
- Morale was described by the team directly in feedback to managers and leaders. It was evident in their dialogue, behaviour, and attitude. 

The impact on one member of staff was profound. Before we started, she was very demotivated in her work. She disliked her colleagues and felt her manager did not trust her. when she tried to raise something that needed changing 'You're just an admin' was the reply. She was continually put in her place.
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After the redesign work, she became the lead in the new design, and led the operational work. She took charge of the contractor meetings. She ended up supervising three members of staff. She loved her job, and remembers the redesign prototype as a great development experience for her. She continues to embed the new working culture into her team.

Collecting the information

Each of the repairs were recorded in as much detail as we thought we would need, on the wall of the room.

The details of the live repairs

We created new measures, to prove the effectiveness of the new way of working; to demonstrate to leaders the difference between the old and new ways of working. This was going to be the basis of understanding if the redesign was making a difference, or not.

You can see form the graph below, the improvement in end to end time, from old design to the new design. This step is an example of a systemic change, nad it is what we are far more interested in. Comparing old vs new is an important tactic. The variation, is a demonstration of the variation in each repair which in itself is not so important to us, and we saw that this variation also reduced when we had greater control of performance. That pattern is another systemic change indicator. Lower variation meant that the operations were becoming more controlled and also more predictable

End to end time - dont focus on the individual data points!

Not everything we wanted to learn about was a data measure. There were aspects of the design that we wanted to understand, so these because temporary indicators below. Not all of them were based on accurate data. But we were looking for trends over time. 

Indicators. Note that they are sometimes subjective and ill-defined.

Measures in the hands of those doing the work

Why have everything on the wall? The impact of putting it on the wall was really profound and helpful. The team had the measures in the room with them at all times. The measures became theirs. The interpretation of the measures would develop over time, and because part of team discussions and reviews. 

When we wanted to have updates with the contractor, the real measures were ever present. The old meeting with the contractor were fraught with arguments. Now, they were based on real time data, and what was measured was helpful to learn, rather than blame.

The team developed a sophisticated tracking method to understand where each repair was in the flow, and to record the measure. This became a live spreadsheet, on paper, and then on replicated on Excel. The team had booked a digital screen that can be used to project the tracker on a screen, in real time.

After a few weeks, they came to me rather sheepishly, and asked if it was OK not to use the screen after all? Why? They preferred the immediacy of the whiteboard, and the amount to information it can contain. It could be modified immediately.
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YES, a result! Realism over toys! And my work was complete as the team had the basis of measures and using them embedded.

Some of the Key measures we used

this graph gave a comparison between the expected and actual contractor performance. The gap between the two lines is important.

used to track demand and resources over time

Measuring Digital Site Metrics

This is a far cry from how we measure Digital website performance. You can see that in this case, we have created systemic measures, rather than measuring the use of technology.
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Website measures can be relevant when we are designing a highly transactional online demand like renew a driving license. However if GDS and service design agencies want to move into the realm of wider service transformation, then we need to expand our design reach to cover all aspects of a business. And to do this we can reject command & control thinking, and turn to the work that has been going on in progressive person-centred organisations over the last 50 years 

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Principles and Methodology, Human Learning Systems

What this is, and is not
It is about engaging with managers and decision-makers in new ways. It is about them getting closer to the work, and the recognition of their behaviours. It is about recognising the impact of measures on staff and stakeholders, and the manipulation that goes on to reach targets. It is all about learning and how to learn and collaborate. It is about individual needs. It is about real time information, rather than looking in the rear view mirror and averages over time.

Made to Measure article

For a further look at measures, from Prof Toby Lowe

Measures are much more than 'measures'. We can try and deal with them as graphs and figures. It is about moving away from for traditional management approaches. 

Human Learning Systems is one way to frame systemic design, especially in the public sector. It is an approach that offers an alternative to the “Markets, Managers and Metrics” approach of New Public Management. It outlines a way of making social action and public service more responsive to the bespoke needs of each person that it serves, and creates an environment in which performance improvement is driven by continuous learning and adaptation. It fosters in leaders a sense of responsibility for looking after the health of the systems, and it is these systems which create positive outcomes in people’s lives.

​With respect to this example of measures in Repairs.

HUMAN
It is about understanding the true value that the service provides, and the true needs of customers. The relationship between staff and managers is altered, allowing for greater devolvement of decision-making. Humans are complex, and this makes person-centred services complex.

LEARNING
It is about engaging with managers and decision-makers in new ways. It is about them getting closer to the work, and the recognition of their behaviours. It is about recognising the impact of measures on staff, and the manipulation that goes on to reach targets. It is all about learning and collaborating using measures as the vehicle. The front line participate in interpreting and learning from measures. 
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SYSTEMS
It is not about targets, KPIs, SMART. It is not about reinforcing command & control principles. It is not about attempting to convert qualitative knowledge to quantitive data. It is not about standardisation. Beware of managing lagging measures. It is not about averaged figures over a period of time.  And it is not about website performance. 

One key element of systems thinking that is in use here is the alternative paradigm of how a service should be designed. We use the systems thinking iceberg model as the link of the elements of the purpose, what matters and measures framework described in this article.
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The foundations to this work
There are perhaps two strands of service design; the modern Digital strand, that emerged relatively recently from product design. And Organisational Development (OD) that has been going for decades. The commonality between them both is large, but today, we seem to keep them separate. This article is both of them combined.

The overall concepts in this article come from:
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- Design Thinking, with its focus on iteration and emergence.
- Systems thinking, with its wholeness, of all parts working together.
- David Wheeler, perhaps one of the world most well known authority on measurement.
- The nature of variation, Ashby, Stafford Beer and Deming.
- Mindset, paradigms, and worldview; Meadows, Argyris & Schon.
- Organisations as complex adaptive systems. 
- Motivation, Dan Pink.
- Complexity, Grint.
- Seddon - methodology and tactics.
- Dialogic & Teal.
- Idealised design and Design Thinking, Ackoff.
- Continuous improvement and culture. Toyota.

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