This changed my thinking and behaviour forever...

Isn’t it incredible when you experience something that literally blows your mind ? That changes the way you think and behave and has such a profound effect on you that it transcends your professional life and changes the way you see the world, and your place within it.

In 2020, just as we were entering the first COVID lock-down in the UK, it happened to me and I wanted to share, briefly, that experience and what it’s meant for me. So here goes…

Background

I was working as COO for a well-established UK insurtech, with 500 employees and 27,000 users of its product. The business had been on a journey. It began life as the originating business in a plc group, then saw a private equity-backed MBO, a subsequent transition to private ownership and then back to PE, all in the space of less than 10 years. We’d made a couple of acquisitions post-plc on that journey but a few more had been made back in the ‘80s and ‘90s.

The Case for Change

Like many mature businesses that have cycled through changes in ownership, “Transformation Programmes” had come and gone. In the 18 years I spent there, I’d debate what long-term impact they had. But in 2020, this mature and relatively-complex business was looking for fundamental and sustainable change to support its next phase of growth but also to adapt to the changing shape of the market in which it operated.

There was a sense, supported by staff and customer feedback, that the business needed “simplifying”. What was once a single-site, UK-only operation now had six offices in three countries. Processes had evolved over time, not necessarily through design, all whilst the UKGI landscape was changing, not least with new and nimble insurtech entrants surfacing. A multi-faceted Transformation Programme was launched comprising five primary initiatives, with “Improve Customer Delivery” being the lead project. We very quickly acknowledged that external support would be needed, to provide additional bandwidth if nothing else.

The Introduction to Systems Thinking

As COO I was sponsor for this work, and it was on a recommendation that we looked to Systems Thinking as a method and approach. I’d not personally experienced it before but did meet several potential consulting partners and ultimately settled on one, based on a particularly strong reference from a large UK insurer.

The truth is, as I quickly learned, Systems Thinking isn’t rocket science. Its name might lead you to think it’s a technology-based methodology, but it’s not.

The “System” in “Systems Thinking” is merely a reference to the fact that everything is part of one. It’s the combination of people, processes and the technology employed that creates the “System”.

And whatever performance a business is achieving is because of the interaction between all parts of this holistic system. If you want to understand performance, you need to understand the system in its totality. And act on it accordingly.

A common mistake, certainly one that I’ve made in the past, is to overly-focus on people and their performance in isolation. What I came to realise is that the biggest limiting factors to excellent performance from people are the constraints, or ineffectiveness of the processes and technologies that surround them.

The key tenets of the Systems Thinking approach that I came to understand, apart from “look at the System as a whole” are:

• Stop basing decisions on anecdote and opinion, and use data

• Test everything you are doing, or might do, against what matters to your customer

• Listen to the people who do the work and help them to improve it

• Encourage experimentation, and failure, iteratively, but keep using data as your guide

The Pilot, and how we started

The hardest part was deciding where to start. What should we seek to improve first as there was a sense that there was plenty of opportunity ? We ended up selecting the delivery of one product. Sales success was being achieved, but delivery was proving more challenging. So, we initiated a 30-day Diagnostic exercise. We created an internal team of three change-agents (none of whom had any Systems Thinking experience, but all of whom had coaching, change or analysis skill sets) supported by one external Systems Thinking consultant.

This change team then engaged with a wider internal team, comprising people from across the business all “involved” in this product. From the people selling it, to the people then responsible for delivering and supporting it, and to those processing orders and raising invoices.

The Diagnostic Model

The diagnostic model we were introduced to was in five parts:

• Be clear about who the customers really are and be absolutely clear about what’s important to them. Sounds simple, but actually was harder than it sounds.

• Understand what types of demand they are then placing on the business in the context of this product, how often and why. Is it because something’s gone wrong, for example ? This activity also included understanding what channels they were using. Was it via the Support Centre, or via their Account Manager, for example ?

• Map all of the processes involved in progressing the work and be clear on what is value and what is waste. In the case of the latter this is essentially understanding how much of what we were doing was adding no value for the customer whatsoever.

• This intersects with understanding how capable the system is from the customer’s perspective and how well it is aligned to what actually matters to them.

• And finally, on the journey of surfacing all of this, begin to highlight where there might be areas for improvement. What are we uncovering that is likely impacting on overall system performance ? Do we have technology issues, where internal systems aren’t integrated, for example ?

The Diagnostic System Picture

After 30 days of process mapping and surfacing real, meaningful and objective data from a myriad of internal systems, a picture formed that described current performance. It was quickly obvious that no single person understood how the end-to-end process actually worked.

We now understood the average time, in working days, that it was taking us to deliver these types of solutions. We knew the best we’d ever achieved and the worst case. We also knew on average, how much of the elapsed time was not spent with the delivery teams, but spent at the front of the process, in Sales and pre-Sales, or at the back-end in Finance.

We now knew how much it was costing the business on average in internal cost to deliver. We identified how many process steps were involved, on average, and how many we could legitimately classify as “value work”.

We also surfaced how many times internal systems were handing off to each other and how often data was being rekeyed between them, with work bouncing between departments.

For the first time, we had data.

System Conditions

As we were pulling all of this data together, we started to note “conditions” in the system that we believed were likely to be impacting on performance. Some were specific to the process under the microscope and our intention was to then redesign them as part of subsequent experimentation. Some were bigger challenges and were company-wide.

But the point is, we were starting to understand.

Paper Redesign

Suffice to say, it was the people doing the work, who brought all this data to the surface. A painful and cathartic experience for many, as the realisation that much of what they might be doing day-to-day was waste, adding no value to their customers.

But the same people then started to redesign the system.

Value steps were combined and reduced. And by removing waste and iterative loops and by adding automation, the number of end-to-end steps was reduced by 67%.

Experimentation and Testing

A new end-to-end framework was established, and a customer was identified who agreed to work with us on our first experiment. Initial results were measured and further improvements to the flow of work were made. As well as further automation improvements so that the delivery framework could scale beyond one customer.

Performance Summary

The result was a redesigned system, that had been tested through two cycles of iterative experimentation, that performed considerably more effectively.

• Average elapsed time to deliver had been improved by 80%

• Average activity (or effort) to deliver had been reduced by 68%

• And rework activity (i.e. doing things again due to error) had fallen by 75%

• Overall cost to deliver had been reduced by 79%

Customer and Staff Feedback

During the Diagnostic we surveyed several customers for their feedback and the same feedback was sought from the experimental client. It showed a near 30% improvement.

And the “before and after” survey results from the staff showed a more than 40% improvement.

We’d evidenced increased customer advocacy and an uptick in staff morale and satisfaction. Simply by critically understanding current performance, and then listening to the staff who were doing the work and helping them to improve it.

Personal Reflections

Beyond the benefit of increased revenue throughput at a better margin, there were several “unexpected” benefits that in many ways were more profound.

One of the other, unconnected change initiatives was to “Transform the Culture” of the business. Put short, to change what it felt like to work there.

Almost without realising it, this piece of work started to do just that.

Instead of coming to work and feeling frustrated at working within a set of constraints and disfunctions that they couldn’t influence, people genuinely started to feel empowered to improve and enrich their roles. Whilst adding benefit to their customers.

And the leadership started to get it too. To reconnect with and understand the work. To stop focusing so blindly on managing staff performance but trusting them more to do the right things and to help them to make continuous improvements.

It seems to me that more and more we’re faced with challenges that are new to us, that we’ve not seen before, and that our tried-and-tested approaches might not solve. So we need to get better at experimenting. At creating Adaptive Change capability. Learning from the lessons of the past but finding new ways of doing things.

Adaptive Leadership is the art of helping people not only survive, but to thrive when presented with the unknown. Not giving them the answers, not least because you haven’t got them, but helping them to think and behave differently for themselves.

You could just as easily describe Systems Thinking as a toolset that can guide operational leaders to Think and Behave differently.

For my part, I found the experience incredibly powerful and it’s something that I still reflect on to this day. It changed the way I view my role as a leader and I’ll be forever grateful to the individuals in that business who so embraced this experience and made all the difference.

You know who you are…

If anyone is interested in learning more, or would like to simply exchange thoughts on this, I’d love to hear from you…

#systemsthinking #transformation #continuousimprovement #culturechange #adaptiveleadership

Simon Hughes