Tag Archives: risk

How studying mitigates risk

Darllenwch y flogbost yn Gymraeg

The Auditor General for Wales encourages well managed risk taking at Good Practice Exchange events. Ahead of the Good Practice Exchange’s work on well managed risk, Simon Pickthall shares some information on Vanguard’s approach.

A photo of Simon Pickthall from Vanguard Consulting

Simon Pickthall from Vanguard Consulting

We are facing unprecedented financial pressures, coupled with the practical implications of working more closely with partners.

In this environment, it is difficult to imagine taking well-managed risks. The contradiction of funding pressures necessitating being radical in our thinking, while funding pressures making radical thinking seem extremely risky can pull us in different directions simultaneously.

However, being radical in our thinking is not a risky endeavour if undertaken with good method.

We often find ourselves in meetings, discussing radical service design and implementation. These meetings are organised around monthly updates, and quarterly reporting schedules. Working parties are dispatched to work out the logistics and build the plan. The plan is scrutinised by different leadership tiers in different organisations.

This process is intended to mitigate risk, and cover all the angles. It can also feel like a very long time until anything is started. When it is started, it can feel not quite as radical as our original ambitions, and existing system conditions (budgets, procedures, policies and authorisation limits) can remain. This is argued to be to ensure risk is covered, but it also severely restricts the radical nature of our service redesign.

However, there is an alternative method – study the system as it currently works. This is often seen as merely information gathering, and just a precursor to starting our radical service redesign on the ground. Studying is, in fact, essential and, when undertaken using good method, gets truly radical redesigns off the ground much quicker.

The method by which you undertake the study phase is crucial, to avoid recreating the problems in the new system that exist in the current system.

Change starts at Check; a structured method for understanding the ‘what and why’ of current performance as a system. This builds knowledge of where and how to act. The model for Check (below) outlines the key data to be collected.

A diagram of Vanguard's 'Check' Process, which shows learning begins with customers

Customer/citizen demands on services fall into two broad types:

  • Value Demand: this is demand we want, that is of value to customers/citizens;
  • Failure Demand: demand caused by a failure of the system to do something or do something right for the customer/citizen.

Capability is a measure of how well the organisation achieves its purpose. Prior to any decisions being taken about changes to the work, knowledge about current capability must be established. The study of Flow and System Conditions involves collecting data about how easy/difficult it is for the customer/citizen to get something done and how the system currently operates. The logic of the current management thinking is revealed and the impact of thinking on performance is clear. All of the data collected during Check is used to build a system picture to describe the ‘what and why’ of current performance.  Thus, uncertainty and risk are designed out of the change process.

The system picture developed in Check helps in the formulation of a plan to take action on the system in a way that will deliver predictable performance improvement. At this stage, leaders are in a position to make an informed choice about whether to move to the next stage – Plan.

This next stage involves a period of experimental redesign using systems principles: designing against demand and understanding the value work informs all decision-making. The objective is to drive out waste and establish perfect flow.

Using the Model for Check, therefore, we can not only understand crucial data, but also our existing system conditions and logics that constrain the current system. In addition, studying also provides the required information to make any radical service redesign less risky – studying reveals the obvious difficulties in the current system, and provides a set of principles to be used in the new system. The service redesign becomes, then, a test of a hypothesis, rather than a leap into the unknown. It is a leap of fact, not a leap of faith.

The time taken to understand this study phase can vary between systems, but a good overview can usually be obtained over a course of a few days. As such, when the leaders undertake this study phase, they experience the key issues that they will need to tackle and build a desire to change the system quickly.

Given this, rather than spend time in meetings discussing the plans for radical service redesign, as leaders you can get into the work and apply the model for Check. Very rapidly you will have understood your system, and built a plan for radical change in thinking and therefore service redesign. In addition, this will be a plan based on knowledge, not faith – a far less risky approach.

Change Thinking – Change Lives

Simon Pickthall worked in the public sector in Wales for many years before forming Vanguard Consulting Wales in 2007, working with the renowned management thinker, Professor John Seddon. Simon has been fortunate to have worked with many leaders to help them understand their organisations using the Vanguard Method –  and improve them as a consequence. Simon was privileged enough to work on the Munro Review of Child Protection, and is committed to helping the public, private and third sectors transform public services in Wales.

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