Opinion piece for Anticipations: The Young Fabians Magazine

Three years on from the crash and the world remains perilously close to the edge of a depression. Regardless of whether the solution lies in further cuts or a massive short-term growth in state expenditure, unless the economy improves it’s clear that everyone – government included – will have to learn to make do with less. For many Labour councils this is already the case.

For 13 years, Labour invested heavily in public services and, through a process of reform, worked to improve performance and eliminate waste. In light of this, reductions to expenditure must seem to entail a parallel reduction in the quality of public services. There is no doubt that cuts will affect delivery, but the extent of the damage can be limited through the right kind of public sector reform.

Neither marketisation nor Soviet command-and-control methodology will offer the means of change which is now needed, but a widespread implementation of ‘systems thinking’ might. Basing his model on the systems which made Toyota the world’s dominant car maker, John Seddon, organisational psychologist and visiting professor at Cardiff, has spent decades helping companies improve performance and reduce costs.

In 2005, a trial of systems thinking in several council housing departments showed that not only could such principles be made to work in government but that they had the potential to yield major results. While central government never realised the potential of systems thinking, local authorities – such as my own – have used systems thinking to bring about significant improvements in output and cost reductions.

Previous efforts to improve delivery have focused on large numbers of detailed targets, with departmental funding often tied to performance; systems thinking looks at services holistically. While targets may have seemed an effective means for improving services, the reality has often been different. Sitting on my council’s performance management committee, it soon became clear that for all the detail of national indicators, it was entirely possible that figures could ‘improve’ while services decayed. Looking at the methodology behind these indicators offered no great reassurance.

Targets assume improvement is driven from above. Yet the complexity and variety of tasks public sector workers have to engage with is too great for simple measurements, regardless of how many indicators are used. Tying targets to funding (‘payment by results’, in current government parlance) only serves to promote ‘working to target’ and not a focus on the outcomes most relevant to service-users. When Soviet shoe factories were set unrealistic targets they met them by focusing on producing shoes for only one foot, rather than the time consuming process of making pairs – many sectors are forced to adopt similar approaches today. Bad systems produce worse outcomes than underperforming workers ever could.

A system without targets and indicators may seem chaotic, but with an inaccurate picture of what’s taking place on the ground chaos is what we already have. Consequently, further top-down reform will also prove ineffective. Systems thinking uses frontline workers’ experience of day-to-day operations to improve services. During a ‘systems thinking review’ the core goal of a service is identified and frontline workers use their on-hands experience of the sector to identify waste or poor practice and streamline the service.

Maintaining this system and ensuring that problems don’t develop (or are addressed) is done through two means. One is a much more basic set of measurements (not tied to funding), such as measuring the average length of time between a service-user’s attempt to access a service and their issue being resolved. While this measure is also clearly open to abuse it does represent a far more honest reflection of the needs of service-users and takes into account the variation between individual cases which develops on the ground.

The second requires that, following a review, managers return to the frontline at regular intervals to observe how the system is working in practice and check for any problems, helping to ensure that services continue to evolve and streamline themselves for changing conditions. The role of management in these reformed systems is no longer one of command-and-control but facilitation, including enabling those on the ground to analyse situations and undertake the work that needs doing.

Systems thinking turns much of current government practice on its head and removes many of the sources of security with which ministers have learned to prop themselves up. It’s little surprise that governments have felt reluctant to implement its principles. Yet it’s a methodology grounded in evidence and which
offers a means for central government and local authorities alike to deal with current pressures and build better services for the future. This is an opportunity Labour must not fail to grasp.

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