Business & Service Design using Systems Thinking

One of the reflection on how to deal with change, is that change is less about a change initiative, and more about how we work. We are recognising that change is more and more like the way things are around here.
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This is an interesting point, because there is a strong metaphor of; we are either in a balanced and stable state, or we are trying to change something. When we are stable we work one way; procedures instruct us, measures guide us, and people do the things they have on their job description.
And when we ‘do change’ we work another way. We plan, decide, develop a programme, and implement. We are move from one state to the next.
But increasingly we see that both seem to be constants at the same time… And trying to jump between one and the other seems to be unstable and often contradictory. Staff cannot keep up, and managers are trying to fight fires.
The clash between the two states points to a tension, that if it remains, becomes increasingly uncomfortable. And the more we try and pin each down, the more confusion it seems to create.

The Human Learning Systems (HLS) 2021 work of Prof Toby Lowe, and and his analysis of around 50 public sector case studies is an important step in understanding why change in the public services is often so elusive.  But his report begs a question that we have to answer here;

We all know what Digital is, and how it has transformed the way we work and live. It is now hard to remember what we did without it. Google and Amazon have imbued us with a paradigm that Digital is transformative and provides us with a quantum leap in service efficiency and delivery.
 
We fell in love with the Digital paradigm a long time ago. We can foresee the landscape of how our organisations would work differently, and how our lives would begin to be transformed, if only we design in more Digital! The next digital developments would simplify our work life, and present us with data that we could then use to make quick decisions. And Service Designers spend much of our time working to make this happen.

As someone asked me... "What is the problem with Digital? It is easy, and quite logical."
 
But whenever we look at the outcomes in organisations, we often never quite get there. And here is why… ​

Digital is a logical technology that enables transactions, communication and data movement to be automated. It has transformed how we renew passports and driving licenses, stripping out large chunks of unnecessary work, producing both large efficiency and effectiveness gains. For highly transactional services, where the unit of service is an item, with very low variety and no variation of input, Digital is stellar.
 
Data 
Data consists of units, defined and unchanging from the moment they were created; by a design based on simplifying reality through categorisation.  It is the ultimate act of logical reductionism, where we interpret the world through these categories and units. We compare like with like.
 
Knowledge 
Knowledge is that which is what we perceive of what we learn about what happens in our lives. Whilst some knowledge can be reduced to single units, the reality is that knowledge often contains the nuances of beliefs, and behaviours. It may consist of thoughts and feelings, about the reality that we inhabit as irrational human beings. 
 
To make matters worse, knowledge is often dependent upon the situation that we are examining at the time – being highly contextual. To use a simple example; the experience of one person in a restaurant, eating a meal, may be totally different to another doing exactly the same thing. How can we collate and store this information, except by the simplifying and assuming that each person has the same context as the other?
 
Complexity
Is a situation that is difficult or impossible to predict because of incomplete, contradictory, and changing requirements that are often difficult to recognise. It defies any standard attempt to understand because it is a symptom or result of multiple, contingent, and conflicting issues. Much of the work of the public sector in dealing with people, family and community issues are like this.

Traditional public services 'deliver' services to citizens, in ways that there councils have deemed appropriate. However, in the case studies, the power is balanced between the officials and the citizens. True collaborative working.

Each of the HLS case studies point to successful outcomes through increased engagement by direct collaboration between the citizen and staff. This is not accidental, but a feature of the nature of the information that pertains to the rich picture that represents the needs of a citizen and the complexity surrounding that need. This ‘warm data’ contains the necessary nuances and immediacy that is needed at that moment in time, for that particular contextual situation. And this knowledge is best defined and transmitted person to person. The fact is, that the success of the recording and transmission of this richness fails spectacularly if we attempt to do this through Digital means.

Over the last few years, Digital Service Design has stormed into the mainstream private sector, with agencies springing up rapidly. Characterised by working in agile and progressive customer centric ways. For some, they seems like the young brash upstarts that they are. But they do represent the vanguard of a new paradigm shift that has gained momentum almost everywhere. They are proving to be successful in what they do; transactional Digital design.
 
In the public sector in the UK, the success that Digital has had, has faltered through various failed initiatives. This was until Government Digital Service (GDS) came along. Since its start in 2011 GDS had reportedly saved over £1b, with improvement of around £500m annually after that.  Perhaps this has been the most rapid improvement initiative in the history of UK government? No wonder GDS is now poised to expand its reach across government, with Digital now being seen as a major enabler within the recent NHS White paper.

​GDS has, more than anything else, managed to create its own unique island of a new paradigm, a different way of thinking and operating, within the heart of central government. It has managed to carve out highly agile teams of eager and motivated staff, who collaborate directly with each other in ways that are as distinct from the traditional central government ways of working as it is possible to be. This characteristic perhaps owes more to its overall success than anything else. What it is interesting is that these GDS principles of working, closely match those of the HLS framework. ​

By forgetting the distinctions between complex and transactional services, we are in danger of being seduced by the attractiveness of the simplicity and success of Digital, and we may use it to redesign every service we come across. We must separate the design and application of Digital into transactional (logical) or person based (complex) services, and recognise Digital has to be applied in the appropriate way as a technology and an enabler.

Digitalisation suits logical transactional services, by taking over the role of administration, processing and communicating of information. People suit complex services, by understanding the complex nature of individual citizens in need, in their context, and can deliver the service through decisions made in that context.

The Human Learning Systems approach 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.

HLS  takes the practice of service design into the realm of the triple diamond as a methodology, and it takes service design into the application of the whole service

Do you have this sense that we struggle to realise why our public services don’t seem to work very well, and why we keep implementing change programmes every few years? Why some citizens seem to be having a more difficult time? And why demand and costs of delivery are always increasing?
There were people in the 1980's (Margaret Thatcher) who (rightly) thought that the public sector should move from its bloated bureaucratic paradigm, to one more defined by the success from the private sector, called New Public Management (NPM). They thought that it should (wrongly) embrace:

1. Value for money through privatisation of functions. Marketisation.
2. Managers control decision-making. Managerialist.
3. Use of targets to 'manage' performance. Auditing and regulation.
4. Delivering 'efficient' services.
5. Focus on customer service.
6. A great starting point for Digital design.

Who would not disagree with this? The public sector was the butt of jokes, and there were stories of waste everywhere. Something new was needed, and quickly.

Now, decades later, we know the outcome of NPM. We understand far more about complexity and service design than we did then. We can see what has happened to our communities and health services:

1. Prevention has been sacrificed due to being unrecognised in our short term focus on activity.
2. Demand has risen as we have not understood how the whole system works together.
3. Decision-makers become distant from reality through targets and simplistic financial measures.
4. Citizens become poorer, and the divide in society widens.
5. Citizens lives become more difficult as the support for those in need vanishes.
6. We are unable to deal with long term dependency on state aid.

We know, without going into the details here, that the current public sector design of NPM have themselves become obsolete, and this is the case even in the private sector. Here in the UK the primary focus on commissioning, referrals, centralisation, and the creation of services and targets is now failing us. It is failing us from an efficiency perspective, a wider systemic and citizen outcome perspective, and the long term viability of our citizen coherence and public services.

New Public Management (NPM) is based on the scientific paradigm of designing an organisation as a pre-determined machine. Staff all have their roles to play, managers manage the service through measures. Senior managers use measures to tweak mainly financial based actions.
It is interesting that today the private sector is having issues with this paradigm. It is struggling to remain moral in the face of rampant shareholder returns, and to create good working careers for workers. They have to put in safeguards to mitigate the worst of the scientific model of management, but that that is simply papering over the cracks.
And most importantly, NPM is designed for products and service selling in an open marketplace.

 We also know much more about the theory of public services. We know that the public sector is generally a place that is full of complexity. Interestingly NPM is based on the opposite; on a transaction and compatitive based design that contains defined departments that have procedures that can be standardised, repeated and audited. As soon as we place a NPM design over complexity, we get a service that is unable to absorb that variety that is inherent in the system. Those who do not fit into the standard, are rejected and have a very difficult time trying to get support. In most cases they give up, and their lives take a turn for the worst.
Digitalisation is a great example of how the NPM paradigm and consistent Digital design fails to adapt to the reality of the variety that is the public needs. In local authorities, installed Digital designs often have to be bypassed if we truly want to achieve what is needed. In public services, we need flexibility rather than standardisation.

If we design services against the characteristics of the service we need:

1. To understand the nature of the nature and the variation of the demand of all citizens.
   
2. That service decisions are best made closest to the work, within each situation itself.
3.  Service staff need to collaborate and engage together to solve multiple issues at the same time.
4. Outcomes cannot be known before-hand and standardised at the start of engaging with citizens.
5. Prevention of issues is about dealing with citizen issues at the earliest opportunity.
6. Staff to citizen interaction is the best way to understand and develop actions for citizens in need.

The research undertaken by Toby Lowe and Human Learning Systems (HLS), spans several decades, and involves a great number of real examples. The basis of the research is an analysis of real prototypes that have used alternatives to NPM. And those studies are compared to the outcomes from NPM currently designed services.  

What are the approaches that move us into the land of a new way of working, free from the problems of our current management and service design? Design Thinking and Digital Service Design have come to the forefront in recent years. This is despite the fact that they have been around for many decades. But what is different this time that makes then so popular? Well, it comes with a new paradigm, that is a break from New Public Management. GDS has been very effective in its development of highly transactional central government services.

In local government and healthcare,  there have been ongoing prototypes of new ways of working that have been quietely developing for years, and recently a group of those people decided to put these together, and examine the framework that makes them different.
Launched in June 2021, Human Learning Systems has been created by a collaborative of public service workers, managers and leaders who were fed up with the way that targets and markets create dehumanising, fragmented and wasteful public service, divorced from the reality of the lives of both the people being supported and the people who support them.

BEING HUMAN
refers to creating the conditions in which people can build effective citizen relationships. This means understanding human variety, using empathy to understand the lives of others, recognising people’s strengths, and trusting those who do the work. It allows for new management competencies to develop.
It also means that staff bring their whole selves to work, recognising that we as people in work need;  challenge, learning, autonomy, and achievement.

CONTINUOUSLY LEARNING 
In complex environments people are required to learn continuously in order to adapt to the dynamic, ever-changing nature of the work. In complex environments, there is no simple intervention which “works” to tackle a problem. “What works” is an on-going process of learning and adaptation. It is the job of managers to enable staff to learn continuously as the tool for performance improvement. This means using measures to learn, not for reward/punishment. It means creating the conditions where people can be honest about their mistakes and uncertainties. It means creating reflective practice environments between and across peer groups.

THINKING AND DESIGNING SYSTEMS
The outcomes we care about are not delivered by organisations. They are produced by whole systems – by hundreds of different factors working together. The final job of managers is therefore to act as Systems Stewards – to enable actors in the system to co-ordinate and collaborate effectively - enabling positive outcomes to emerge.

The principles of Design Thinking are the antidote to the machine based command & control paradigm.

We need an approach that contains these principles, and is based on proven practice.  The HLS framework has been created from researching the approaches used in the HLS case studies.

We all use different variations of the framework. It is flexible enough to be able to adapt to change in organisations. 

UNIVERSAL CREDIT EXAMPLE, Authored by LANDWORKS  June 10 2021

It was not going well. Universal Credit in some ways does help people back into employment.
In other ways, it is simply not designed for folk who are not, or have never been supported, educated, or trained in budgeting skills.
Jack (52) was struggling. Monthly payments make his life difficult. Like so many on UC, he takes to borrowing here and there, to get through.
Then, as Jack puts it, “come payday I’m f#*ked”, as the sharks swim in for the kill.
That was not what this meeting was about, we were discussing Jack’s PIP (Personal Independence Payment), which is a long-term benefit if you have difficulties with daily living and/or getting around.
And one of the assessment criteria is the capability to ‘make decisions about money'.
So together with the Citizens Advice Bureau, we work hard to support these PIP applications. We knew the application would almost certainly be turned down (a cynic would think they have a target of high rejections), and most are.
It was.
The appeal process is long and hard (not everyone is capable of this). Interestingly another of the criteria for getting PIP is your ability around reading and communicating.
Jack’s appeal (after 6 months) was successful… Hooray.
But DWP didn’t inform him… Boo.
A large back payment was made (as if by magic) into his account… Hooray, but with a note of concern!
Jack finds this pot of gold (6 months of PIP) in his bank and goes straight to the pub. To demonstrate to his new group of ‘friends’ just how poor his budgeting skills really are… Boo doesn’t really do it!
PIP is a progressive benefit designed for people with identified low life skills (e.g. capability to make financial arrangements) who have proved they are not best equipped to deal with daily living in the first place.
So, Department for Work and Pensions, could you please stop making large back payments. Please, it's unhelpful and in a few cases life-threatening.
These back-payments need to become forward-payments, spread out over an agreed period or used for a one-off payment such as a deposit on suitable accommodation. Also, DWP while you’re about it, stop the loan shark’s activity and make benefit payments weekly (supposedly fortnightly payments exist but all our applications have been rejected) for those who need it.

My definition of Systems Thinking for a service organisation is conceptually very simple;

What is an Organisation when Viewed as a System?

Systems thinking is a way of seeing a service, from the customers perspective, all the way through the service delivery. It understands everything that goes into that delivery, without the barriers inherent in departmental design. Therefore we can begin to redesign the service from that customer centric perspective, incorporating the staff, managers, behaviours, leadership, and the culture of that organisation.

• It pulls down barriers between departments and stakeholders, it dissolves silo working.
• We design services that match the flexiblity of the needs of all customers, and move away from standard processes.
• We understand the interactions between activities, and use that to create design how the organisation truly works.
• We recognise 'warm' data that contains the richness of experiences and behaviours, and avoid analysis dumbing down that richness through categories or personas.
• We move away from a machine based and reductionist way of understanding of how we traditionally design organisations. This will then allow us to see problems from a new perspective, allowing us to create novel solutions that we did not see before.

Complexity and uncertainty are recognised as being different to transactional process design and certainty. Understanding this complexity then allows us to design in different elements to what we would have done. This then allows us to help decision-makers reframe and see their problems to sovle from a new perspective.

Design Thinking is based on creating something innovative. This is ideally placed to provide a vehicle for systems thinking concepts to be incorporated.
Below is a diagrammatic way of demonstrating the difference between traditional service design (that begins with the needs of the organisation), and systemic service design (that starts from the customer and what matters to them.)

• approach is iterative and is about learning,
• destination is through enquiry,
• understands the whole,
• focused on the customer.

Design Thinking is an iterative process in which we seek to understand the user, challenge assumptions, and redefine problems in an attempt to identify alternative strategies and solutions that might not be instantly apparent with our initial level of understanding. At the same time, Design Thinking provides a solution-based approach to solving problems. It is a way of thinking and working as well as a collection of hands-on methods.
Design thinking is also a set of principles that defines how to design something using iterative techniques, that create emergent designs. The 'customer' is the starting point, and the inherent nature of design thinking is innovative. It is a uniquely human activity.
And for the design of services, the Nesta's triple diamond model is a great place to conceptualise this:

Can we describe basic Service Design as the application of Digital to a Design Thinking approach? If we do, then we have to admit that SD is therefore bounded by Digital. In this article SD is defined as the design of services, using Design Thinking (without the constraint of Digital).

The HLS framework is an example of a methodology that can be seen combining systems thinking with design thinking. This helps us to frame the Design Council model of systems thinking into a coherent approach for change and design.