Delivering major transformational change continues to be perhaps the greatest challenge for both public- and private-sector organisations. While project and programme management are now core skills across the industry, still, all too often, there are reports in the press, at parliamentary select committees and in shareholder meetings, of programmes that have spectacularly under-delivered.
However much we go through the right motions, it still proves difficult to deliver the outcomes and meet expectations. We are getting much better at delivering project outputs – to specification, time and budget – but often these outputs don’t generate the level of benefit expected. Frequently, the objective sounds simple – for example, to improve patient waiting times, reduce crime or make trains run to schedule. The environments in which these changes must be made are very complex, however, and there is a great number of interacting components. It is this complexity that is the nub of the problem. We just do not understand the workings of the environment well enough to design the portfolio of projects that will drive through the changes we desire.
If we are to understand the environment better, we need to take a holistic approach to understanding the system within which we are seeking to deliver change. What do we mean by ‘system’ in this context? The relevant system comprises all the interacting factors that influence the result we desire. These factors, and the linkages between them, frequently cut across many traditional planning boundaries – for example, across organisations, departments and agencies. The system will probably include elements that may feel, at first glance, far removed from the problem that is being addressed.
Five common pitfalls
Without having a better understanding of the systems that we are dealing with, we typically stumble upon one or more of five common pitfalls. These are:
1. We adopt the scattergun approach to solutions
With a lack of clarity on the true drivers of performance, we think up lots of bright ideas about what might work. We have no way of being certain that these ideas will lead to the required outcome, or even contribute towards it, however. The result is a scattergun of unproven ideas and poor resource allocation.
2. We allow ourselves to be distracted by the fireworks
One step on, these bright ideas are implemented, leading to a plethora of initiatives launched most often in isolation, which creates a great deal of activity and noise – like fireworks – while delivering inevitably little in the way of consistent results. Where results are delivered, it is impossible to attribute them reliably to a particular cause or set of causes, and so improvement is unsustainable.
3. We inadvertently commission projects that contradict each other
Projects with implications that are not well understood are bundled into the change programme and turn out to clash and wipe out potential benefits. This results either from failing to foresee the potential for different initiatives to impact on our objectives, or from failure to convince others of the impact of these conflicts, since there is no objective means of assessing and communicating the implications.
4. We run smack into 'invisible brick walls' among stakeholders
Multiple interfaces between different departments and user communities, each with their own agenda and often conflicting priorities, lead to barriers to delivery that are frequently unanticipated. Without any foresight of these barriers, there is no way to undertake the necessary effort to win different parties around to your point of view.
5. We fail to address ways of working
Benefits do not typically result directly from tangible investments, but instead from obtaining real changes to the way people work. This requires people to be motivated to do things differently. Without the right level of engagement, commitment and motivation, failure is inevitable. It is much more difficult to persuade others of the necessity to invest in the ‘soft side’ than it is to invest in tangible assets, especially without a persuasive means of making the case for that change.
How to embed systems thinking
When we try to deliver this scale of change without understanding the system, it is rather like going to the races and betting the house on a hot tip from a friend. At best, it is an informed guess – at worst, there is an ulterior motive to the advice. We are effectively experimenting with the system in real time and waiting, sometimes years, to know whether we’ve got it right.
A framework for understanding the workings of the system can enable us to ensure that we get the maximum return on the bet we make with the resources available to us. It enables us to compare the impact of different combinations of initiatives in a much more objective manner. By looking at how different combinations impact on the system, we get a more robust understanding of the likely outcome and the level of uncertainty.
This changes our view of the portfolio definition process, from being a collection of individual assessments – ‘If this initiative has a positive impact, it is a good thing’ – to being a holistic understanding of how the initiatives interact to influence the overall outcome. It also enables us to test the sensitivity of our portfolio of initiatives to changes in our assumptions. Often, the portfolio that is initially thought to deliver the greatest return is seen to be highly sensitive to our planning assumptions and is actually too high-risk. Success comes from balancing the projected returns against the level of risk – too often, we are overly optimistic about our assumptions and do not understand the sensitivity of results to potential changes, risks and unknowns.
A range of options is available to exploit the systems thinking technique to improve programme design and delivery. The most appropriate will depend on a number of factors, including the:
The spectrum ranges from the use of structured decomposition techniques, such as the soft systems and systems engineering methodologies as integral parts of the programme design approach through to the application of a range of qualitative and quantitative simulation models, which can be used in parallel to significantly improve our understanding of the implications of portfolio decisions.
The benefits of systems thinking
Developing a framework containing a rich understanding of the system brings the following benefits to any programme design and delivery effort:
- We can assess in advance how the system is likely to respond to the portfolio of activities proposed and ensure that the activities work together to deliver the desired results.
- We can use the system framework to identify missing areas of activity and to identify the potential conflicts and constraints, among stakeholders or project activities, and take measures to address them.
- We can experiment with different mixes of risk and ambition to ensure that we have the right scope for what the programme can realistically achieve.
- We can use the system framework to explain how and why the approach is expected to work, and thus build the confidence of key stakeholders in the proposed solution.
In this way, we can identify the traps before we fall into them and take action. Experience shows that effort devoted to articulating and understanding the system we are seeking to change will pay massive dividends by improving the robustness of the programme design and delivery chain.
The more we understand of the system, the less we are obliged to rely on luck and ‘gut feeling’ in decision-making. If systems thinking is embedded in the programme design and delivery approach, then we will truly take the gambling out of decision-making and avoid the traps.
Andy Cooke is a managing consultant at PA Consulting and an expert in the delivery of major transformation programmes.