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Common nonsense - part 2

There is a book I have read to each of my children.  It's called "Where's Elmer?"  In the book a bird, called Bird, goes through the jungle looking for a multi-coloured elephant, called Elmer, with whom she is playing hide and seek.  As each page turns the bird apologises to every animal she meets realising that she has mistaken some other multi-coloured thing for her patchwork friend.  "I'm sorry lion (or other jungly creature), I thought you were Elmer".  Each time Bird is reassured.  "That's OK Bird.  Elmer is over there".  At which point you turn the page only to find that what you thought might be Elmer is, in fact, a football, or a sail, or some washing that the monkeys have put out.  The kids love it.

In the end she finds her friend.  "There you are Elmer" she says.  "I've been looking everywhere for you".  "That's funny Bird", Elmer replies "I haven't found anywhere to hide".

I was reminded of this book when I reflected on the recent Kings Fund publication calling for a radical reform of the Health and Social Care system.  It turns out that the NHS has had its fair share of radical reform.  In the last 15 years alone there has been 26 Green and White Papers, 14 Acts and countless initiatives.  A sort of institutional "Where's Elmer?"

But instead of looking for a patchwork elephant the object being sought is "the answer".  I imagine going through a book listing all the changes over the last 15 years.  With each page Bird says "I'm sorry, internal market - I thought you where the answer".  "Don't be silly Bird, there's the answer..."  Turn the page.  "I'm sorry GPFH - I thought you were the answer".  "Don't worry Bird, the answer is over there..."  Turn the page.  "I'm sorry Health and Social Care Act.  I thought you were the answer".  "That's OK Bird.  Look the answer is just through there..."

Unfortunately, in this imaginary book we never find the answer.  And the kids don't love it.  We never find Elmer.

This is not an accident.  Something is wrong.  What we think works doesn't.  The things we commonly believe to be common sense approaches most commonly fail to deliver "the answer".

So I thought I would share with you a 4 minute clip from a private sector client of ours.  An organisation that stopped looking for answers and started asking questions instead.  More importantly the right sorts of questions like, "what's the purpose of what we do from a users perspective", or "what matters, from a users point of view".  It was a change that revealed a number of counter-intuitive truths. Revelations that made them wonder if the "common sense" of convention was, in fact, nonsense.

The common (non)sense of scale thinking told them to offshore work.  They realised that they had created an expensive way for another part of the business to eat their waste.  They stopped it and saved millions.

The common (non)sense approaches behind how to motivate people told them that targets and incentives work.  They removed them and focussed on solving peoples problems instead.  Although they didn't focus on increasing sales or customer satisfaction, both went up as a result.  They didn't focus on their Net Promoter Score either but it didn't stop it increasing by 26 points.

The common (non)sense of functionalising services and developing specialist expertise created 3000 channels customers could choose from.  They gave staff the ability to solve peoples problems on the phone, taking as long as it took to do this.  Call volumes reduced by 20,000 a month.  They didn't focus on managing demand but their demand dropped.

The common (non)sense of implementing industry best practice told them they couldn't deal with claims in full when customers called.  By enabling staff to reach agreements over the phone customers get what they want and the business stands to save hundreds of millions of pounds over many years.

They changed their thinking and transformed their business.  They didn't implement the latest good idea, or best practice.  Instead by taking the time to understand the "what" and "why" of their current performance they now have industry leading performance.

They moved from managing people to managing the system.  From obsessing about cost and how to manage it, to obsessing about how to solve peoples problems.  From seeing customers as transactions to be processed to people they can build relationships with.  From the common (non)sense of convention to the common sense of understanding what matters to people.  They applied a method, not plans, not targets; just responses that solved peoples problems based on knowledge.

They stopped looking for the answer and started asking questions.  They applied the right principles rather than impose the "best" structure" or "service model".  They ditched command and control thinking and the common (non)sense that produced.  

They realised that the answer to "where's Elmer" is that he is hiding in plain sight.  Although they may never really find him, at least they aren't surprised every time they turn the page.  And it's a good read.  

Common nonsense - part 1

Last week the Kings Fund launched a paper setting out their thoughts on "Transforming the Delivery of Health and Social Care - The Case for Fundamental Change". It's a dramatic title and a message that I certainly agree with so my interest and curiosity was piqued.

On the first page there is even a logo. It says "Time to Think Differently". How true. Common sense really. Why wouldn't you design a system against the demands that are being placed upon it?

They go so far as to say the health and social care system is broken. They argue:

"patching up the existing system will not deliver the transformational changes required. Nothing less than a sea change in thinking and action is needed to tackle the fundamental weaknesses of a system that remains focused on addressing yesterday’s problems rather than anticipating what will be needed in future." (p 26)

Wow. A sea change in thinking. Absolutely. You'll find no argument with that conclusion here. But to think that, after all the massive upheaval that the health and care service has undergone, the Kings Fund still calls for "radical change". It defies belief really - how could our best leaders, supported by the keenest brains in the country, have got it so wrong?

The document outlines a range of different things that the NHS should do. Common sense really. Who wouldn't agree with greater user involvement, or eradicating arbitrary boundaries between organisations, or more appropriate settings for care. Certainly it is what my studies have led me to conclude, often leaving me bewildered at the lack of common sense approaches to solving peoples problems.

Which got me thinking about common sense. From what I have seen common sense means leaders believe in a number of things. Things like:

• Economies of scale: if you have £20bn to save/not spend/find (however it is described) it makes sense to simply do more of the things we "know" work. Just do it at a bigger scale and do it quickly. Merge with another organisation for example. That way you get the benefit of savings in two ways:
• less of a common resource (managers, buildings, kit etc) (yes, but marginal) and
• lower transaction costs through industrialisation of services (not true)

It's self evident, isn't it. Just common (non)sense.

• Managing costs makes costs go down. Cheaper = breaking tasks down into their functional elements as it is best to get your most expensive resource focussed on doing the high end stuff, not the easy stuff that anyone can do. The beauty of this approach is that it allows leaders to be free to industrialise services.

Stands to reason. Reduce your unit costs and you save money. Just common (non)sense

• Industrialising services saves money. Back and front office functions split, call centres, outsourcing of services, shared services. That makes perfect sense too doesn't it? Separate the simple from the complex tasks; have your experts doing what they are paid for and the less skilled doing the less complicated. Better still, outsource it. Get people whose specialism is dealing with the sort of flows that you really don't want or need to spend the time dealing with. This approach has the added benefit of allowing you to specify service levels - what you expect to be delivered. That way you can have the triple benefit of not doing the work yourself, performance managing services provided by other people against an agreed set of criteria and, best of all, managing your costs.

It's not rocket science. How difficult can it be to specify precisely what is needed? Just common (non)sense.

• Standardisation makes things easier, safer, improves quality and makes it easier to train people. So it should be done everywhere. Plus, if it's done really well tasks can be broken down even further, so cheaper labour can be deployed to complete those basic tasks

It works in manufacturing, so we need to do more in services. Just common (non)sense

• Harness technology too, especially at scale. Put the brain in the computer. If you have already standardised, functionalised and specialised, use technology to do it even more efficiently. Even better, you can get cheaper labour to operate the computer. Don't worry if you haven't already standardised etc, an IT solution will do that for you anyway

What could possibly go wrong? Just common (non)sense

If the financial benefits don't materialise that's OK. Just set a target, or create a new incentive, or maybe exercise a contractual penalty or two. It's all well and good talking about systems, but they are made up of people so lets manage them with targets, incentives and penalties, because people are the real problem.

Never did me any harm. Just common (non)sense.

And once you have scaled up, paced up, targeted, merged, specialised, functionalised, standardised, rationalised, incentivised and, maybe, prioritised you will have created the perfect mix to generate efficiencies and protect, perhaps improve, quality. So long as you have made best use of best practice. No point in re-inventing the wheel, especially if we know a particular model of care works. Not only can you simply adopt what has worked elsewhere but it comes with the added bonus of being able to benchmark performance against.

That is just sensible. Just common (non)sense

Well so long as you haven't forgotten to plan. Particularly if you are going to do something as complex as an IT change programme. Planning will guarantee success and enable the benefits of all the other things you've done to be delivered. Milestones and RAG ratings are particularly helpful. Crucial even.

Now that really is just common (non)sense. Can we please just get on with it.

Except, it isn't common sense at all. It's all common nonsense. They are beliefs that drive waste and harm service delivery on a monumental scale. And they are present in virtually everything you see or read about the NHS and care services because our leaders are blind to it. Even the Kings Fund report, as radical as it may seem at first pass, to me falls into many of the same thinking traps, inevitably diminishing any benefits its good intentions would seek to deliver.

In the rush to provide answers we are forgetting to ask basic questions. What is the purpose of what we do, from a users point of view? What matters, from a users point of view? Get knowledge based on these principles. Develop relationships, design against demand and design for continuity. Do that first. Don't "plan" or "specify" or "implement best practice", not if you really want to transform.

In my next post I will provide an example of how a private client that has transformed its business by ditching current convention and asking those simple questions. And by embracing the counter-intuitive truths they discovered when they looked at their business outside in, from a users point of view. They went slow and the benefits came thick and fast.

You can draw your own conclusions from what you see but, from my perspective, what is missing in the Kings Fund paper is method. Change thinking? Definetly. But this does not mean change thinking about what structures or service models will work. It means first unlearning all those things we take for granted as management truisms - then learning to design responses to solve peoples problems. From this micro understanding the macro solutions will emerge.

Monitor - your thinking scares me

The ever thought provoking Roy Lilley writes a regular e-newsletter (you can sign up to it via the link on the side bar.  If you are interested in the NHS he is well worth a read).  A recent one contains a link to a piece of analysis by a reader on a Monitor commissioned review on economies of scale and scope.  You can click on the link here to go direct to it.  Whoever it is that did the research deserves a pint, for it provides an insight into the horrors of how one of the most influential bodies in the NHS thinks.

In their detailed paper Monitor themselves express surprise at just how little evidence there actually is on the subject of scale economy, either positive or negative (perhaps their search terms did not include "Seddon").  That they found any is, I guess, of some credit to them.  The purpsoe was to give Monitor a framework for thinking about economies of scale and scope.  Here's my framework: don't bother, economies of scale are a myth.

Mind you, Frontier Economics, who did the work, have covered their analysis in so many caveats that I am surprised that Monitor didn't reach that conclusion for themselves.  Sure there will be benefits from the "less of a common good" perspective - fewer managers, buildings, kit.  But these savings tend to be marginal and one off.

What economy of scale thinkers believe more fundamentally, however, is that scale = lower transaction costs and that this = efficiency because it lowers cost.

This is not true.  Cost is in flow, end-to-end over time.  So the objective has to be economies of flow, not scale.  Scale thinking manifests itself in a belief that managing costs reduces costs.  Reducing unit costs becomes an objective in itself - it is seen as a good thing.

This is not true either.  Managing costs increases costs largely because it leads managers to do silly things in the name of efficiency - like break tasks down and functionalise roles, or outsource work.  This costs more (end-to-end over time) because it generates huge levels of failure demand as it results in people not having their problems solved.  Low unit costs tell you nothing about the cost to the system as a whole.  It is an exercise in futility.

Monitor is hugely influential in the NHS and yet all it seems to be interested in is money and cost.  Their paperwork is full of stuff about markets, and market share and other business speak, but that is not the problem the NHS needs to solve  The NHS doesn't understand demand - at all.  Not in a meaningful way from a users perspective so talk of understanding markets is, at best, premature.  Better would be to spend the thousands of pounds of tax payers money they are devoting to this nonsense on helping people to improve.

It seems to me that Monitor poses a significant risk to the financial viability of the NHS and the safety and quality of care that providers offer.  The problem is that the way they think about how to save money and control costs is not only wrong but will inevitably lead to more cost and waste, causing the very problems it seeks to solve.  They typify the approach which means that in taking care of business they have forgotten the NHS is in the business of taking care.

And if the Kings Fund wanted to know the answer to the question "why aren't we doing simple common sense stuff?" (more on this and their recent paper later), it need go no further than the language of Monitor.  They are a lead weight sucking the life out of innovation and a real problem to transformation.

Here's a link to their current consultation with commissioners if you are getting bored with sticking pins in your eyes.  Something to do with the designation of services - I don't know,  I couldn't understand a bloody word of it quite frankly.  Maybe you could let me know if you can make head or tail of it.

Monitor, your thinking scares me.  Along with the CQC, start devoting more time helping people rather than beating them up.  There are countless examples of how a different perspective produces transformational results in this blog and at www.systemsthinkingreview.co.uk.  Change your thinking.  Focus on people, developing and tending to relationships end-to-end over time and designing for continuity.  You might find we are all better off as a result.

Scale and Pace

Further, faster, harder, deeper - even wider.  And no, it's not part of a script from an adult movie.  It is a common leadership rallying cry - the urgent need to do important things at scale and pace.  Do it big, quickly and by everyone.

Scale and Pace

It is a beguiling concept.  We know what needs to be done so lets get on and do it, goes the logic.  There is the huge NHS change agenda, a change on a scale so big "it can be seen from space"; the need to find £20bn of savings whilst delivering better quality care and outcomes; and lets not forget the challenge of integration, nor that of inspection and regulation, never mind competition.

All of these are large scale problems.  We have to do it and do it now.  After all, there is enough evidence of best practice, isn't there?

There is only one small problem.  Well, maybe two.  According to the evidence, scale initiatives, even those delivered at pace, don't work.  According to Kotter (1995) and Beer and Nohria (2002) up to 70% of large scale changes fail to meet their stated objectives.

Despite the rallying of troops, consultations, pauses, meetings and inspirational calls to arms to get everyone to play their part - to get on the bus or go home; - despite the drive for rapid results (the thought leaders have all read Kotter after all); despite creating a sense of urgency around a "burning platform", it seems large scale change programmes are destined to fail.  David Cameron agreed, committing to no "more pointless top down reorganisations".  Jeremy Hunt, the new Secretary of State for Health went so far as to say "it is completely normal (for a contractor) to fail to deliver on a major project" when commenting on the G4S debacle.

You do not have to go too far to find evidence of the failure of scale projects.  In "The Triumph of Hope over Experience" Nigel Edwards elegantly demolishes the belief in mergers and acquisitions, citing international evidence that only 30% of M&As deliver on their stated aims.

Countless critiques of reorganisations (Smith et al 2001; Walshe 2010 amongst others) have highlighted the deleterious effects and unintended consequences of large scale organisational changes.

Then there are the operational disasters where billions of pounds have been wasted on bright ideas with little or no discernible benefit.  The list is endless, but includes NPfIT, PFI and ISTCs.

Seddon has also written on the myth of economy of scale and many of the damaging logics that underpin it as a concept including standardisation, specialisation and functionalisation.  Although many talk glibly about the benefits of economy of scale, there is so much less said about diseconomies of scale and the huge levels of failure demand that are generated as a result.

Yet despite all this evidence, the Kings Fund today called on Jeremy Hunt to be brave enough to lead long overdue service changes at faster pace.  Along with the dizzyingly complex changes enacted by his predeccessor this seems, to me, to amount to a recipe for disaster.

And so to the second problem with the scale and pace approach - if that the fact they don't work is not enough.  And that is that it makes assumptions about what works at both an organisational and service level that is opinion rich and evidence light.

My studies revealed a counter intuitive truth when I discovered that it is only by understanding the micro that the macro changes can emerge.  By genuinely understanding people in the context of how they live their life and designing responses to and for them in relation to that knowledge, not only are their lives transformed but so is the system of provision itself.

This means investing the time in developing and tending to relationships end-to-end over time.

It is from understanding purpose from a users point of view, using measures that relate to the delivery of that purpose and designing from studying and experimenting rather than "planning" or "specifying" that the cost of stroke care in Plymouth was reduced by half; that non-elective readmissions reduced by 45% in Somerset.

Ironically, by taking the time to understand people and the problems they need to have solved, testing solutions, not just implementing them and understanding that the root cause of poor system performance is the system design not the people in it provides far more rapid results.  It also delivers costs reductions by managing value (not cost) which are far in excess of anything that could be conceived through conventional thinking as these case studies show (I'm Amy, Velcro Man, Plan B)

The conclusion from my studies is that the scale and pace mantra is a garrotte that strangles the life out of innovation, increases costs and drives waste.  So my message to the new SoS is not to buy into the conceit that scale and pace works and that there are think (or guess) tanks that have the answer.  Better is to go slow to go fast.  Help people take the time to understand their patients in the context of how they live their life and the means to design responses that solve their real problem.  From that the changes you desire will emerge and the NHS will genuinely transform.

Let's talk about value.

In my last post I reflected on some misgivings I have about how the concept of 'flow' has been adopted and deployed within health and care systems. This time I want to turn my attention to the concept of 'value'.

Michael Porter, amongst others, has defined value as 'outcome divided by cost'. Wrong. If that were true then logically value would always increase as costs decrease, regardless of whether the outcome is valuable or not. Absurd.

So perhaps Porter and co. really mean VALUE FOR MONEY (bang for our buck) and/or RELATIVE VALUE (how much more or less valuable A is than B). But either way, why start there? Why not start with defining value itself? Perhaps the assumption is that value is so obvious as to need no definition?

I propose a test:

- If value is understood then waste is understood. They are two sides of the same coin.

- If waste is understood then waste will cease to be designed and managed in and may even begin to be designed and managed out.

- Ergo if value is understood then today's health and care system will be no more wasteful than yesterday's, last week's, last month's, last year's (and may even be less wasteful).

- Is it?

Read this by Roy Lilley then give me your answer. Does this system really understand value?