The Practical Application of Complexity Theory in the Public and Private SectorExploring the Science of Complexity in Aid Policy and Practice at ODI on 8th July 2008

Prof. Eve Mitleton-KellyDirectorComplexity GroupLSEE.Mitleton-Kelly@lse.ac.ukwww.lse.ac.uk/complexity

Using Complexity Theory in Practice? Are the ideas/concepts really useful?

How?

To whom?

Why?

Why?

By understanding what it means for an organisation to be complex, (within a complex environment) we can work with those concepts and not block them unintentionally

However, not enough to name and describe the concepts

Can use the logic of complexity to: a. Understand the problem space when

addressing apparently intractable problems b. Create enabling environments

How & Whom?

Policy makers who become sponsors + all stakeholders, incl. those who need to

implement the policies

Examples: NHS RRM GSK

NHS

2 Hospitals, both with significant deficits Each had a double objective of reducing costs

while improving the quality of service How they approached it, was different 2 Chief Executives created two different

environments X was creative, collaborative, inclusive Y was perceived as inaccessible and the senior

management team as having a hidden agenda

Creating an Enabling Environment EE for change: social, cultural, technical,

physical, economic, political, etc, conditions that together create a sustainable environment that co-evolves with a changing social ecosystem

Using the principles of complexity (a) as an explanatory framework (b) to offer a different way of seeing and thinking (c) a different language and set of concepts

Narrow Emphasis on the Problem Emphasis on cost cutting, from a purely financial

perspective, met with resistance from clinicians Issues involved both ethical and power relationships Ethical: “I joined the NHS to help save lives” - difficult to

reconcile the objectives of their profession with financial demands

Power: a layer of management (often administrators with no clinical background) were perceived as diluting the power and influence of consultants

More acceptable approach: reduce costs by reducing wastage rather than cutting services, with a strong emphasis on patient care

A key difference: Creating a Positive FutureHospital X:

The CE (familiar with complexity) addressed the large deficit directly as a major challenge that everyone could contribute in resolving

Provided the opportunity for beneficial change Had to make changes, but not just cost cutting exercises If they improved the patient journey and cut wastage, then

financial savings could be made without affecting adversely the quality of service

The CE saw other possibilities of a different future and offered “a compelling picture I want to be part of”

Very positive and keen to discuss how they each approached the changes as an opportunity to rethink how their particular part of the service could be delivered - to improve the patient experience

“Will have the opportunity to be the best”

A key difference

Hospital Y: The change was viewed with fear, anxiety and

apprehension Some of the clinicians had already gone through one

major restructuring and downsizing, had left a very strong adverse impression - feared repetition

Also felt the real issues were not being openly discussed – senior management team were not transparent and open, but were hiding some unpalatable truth

Overall impression: one of anxiety and great uncertainty about the future – both about the future of the hospital and personally

Two different environments In X the problems were seen as possibilities for

improvement in the service, everyone participated and tried their best to contribute to making a difference

They were anxious about the future nature of the hospital, but this was a manageable anxiety, almost a curiosity about the future

Approach: participative, dual top-down and bottom-up process to change

In Y the anxiety was uppermost in their mind & obscured everything else

Impression of not being given the space to contribute - talked about participation and contribution, but constrained in practice

Approach: primarily top-down

In Complexity Terms: X

X had facilitated self-organisation, exploration-of-the-space-of-possibilities, generative feedback, emergence and co-evolution

Staff felt that they had ‘permission’ to try out ideas locally To explore alternative procedures and processes to improve the

patient journey Could discuss the outcomes openly and honestly within their group

and share it more widely Cross-directorate projects: helped to bridge the tight boundaries

between specialities. Cross-over was not always successful, but the possibility was present

As each made a change the others were influenced to varying degree, but the generative feedback did make a difference and other directorates in the cross-over projects were encouraged to also try out some new ideas

Reciprocal influence resulting in changes in the reciprocating entities – i.e. the co-evolutionary process was facilitated

In Complexity Terms: Y in 2005

Y talked about facilitating self-organisation, but constrained: new ideas had to be given the ‘go ahead’ from the senior team

Whole atmosphere was one of constraint rather than encouragement – limited exploration of the space of possibilities

Y was not beset by problems (X had a much larger financial deficit); they did have significant successes in some specialities which were growing out of all expectations

But there was no active learning from these successes and the focus was very much on attaining financial balance

Little generative feedback, and few opportunities for staff to get together to review performance and reflect in an open, relaxed and informal atmosphere

Reviewing done formally in terms of performance management By restraining self-organisation and exploration and by not actively

reflecting on the outcomes (limited generative feedback) the learning environment was constrained

Hospital Y Changed significantly Following the reporting back after the first

phase of the project, the hospital changed significantly.

In the 18 months that followed, they made major changes

Complete change in 2006/7

Exploring the space of possibilities “It’s not really telling people – I think it’s creating the

organisation that takes the responsibility itself” Introduced a new management structure Divisions took responsibility for their own plans Looked at inefficient departments and helped them

to improve: “looking at ways of doing things differently … now we’re reaping the real benefits, because we’ve cut out the stuff that wasn’t working … staff are much more upbeat about it … they’re getting much more medical senior input and liaison with the rest of the hospital which has never happened before”

Changes in the Health Ecosystem Payment by Results – higher salaries (Consultants,

GPs) + Agenda for Change costs, but lower productivity “we haven’t got better productivity through paying people more, we’ve actually got less…”

European Working Time Directive – junior doctor shifts, etc + societal changes – expect to leave on time

Some work will go to Specialist Centres and other work to GPs – so the DGHs are losing some of their traditional work

These changes were pushing the hospital to a far-from-equilibrium position

In Complexity Terms Changes in the ecosystem pushed the hospital far-from-

equilibrium At the critical point they explored their space of possibilities and

developed New ways of working – greater autonomy & self-org. + working

better as a team, supporting each other and acknowledging their inter-dependence

A different way of thinking + learnt a new bus. lang. New relationships – i.e. new patterns of connectivity internally

and externally Created and continue to create new order i.e. they are actively co-evolving with their changing ecosystem They are becoming more tolerant and comfortable with

emergence, unpredictability and uncertainty They have created a new co-evolving enabling environment

2 Hypotheses + 2 Assumptions H1: that successful large-scale change can only occur

through the adaptation of underlying principles and not by copying of best practice

H2: that innovation and improvement are facilitated by the co-creation of an enabling learning environment

A1: that collaboration and a dual top-down and bottom-up approach make such an environment possible and sustainable

A2: if learning from successful experiments can be encouraged and shared then the improvement process may accelerate and spread nationally

Theories

Natural sciences

Dissipative structureschemistry-physics (Prigogine)

Autocatalytic setsevolutionary biology (Kauffman)

Autopoiesis (self-generation)biology/cognition (Maturana)

Chaos theory

Social sciences

Increasing returnseconomics (B. Arthur)

self-organisation

emergenceconnectivityinterdependencefeedback

far from equilibrium

space of possibilities

co-evolution

historicity & time

path-dependence

creation of new order

Genericcharacteristics

of complexco-evolving

systems

RRM

Part of an EPSRC project, called ICoSS, which looked at systems integration.

Two years after a major acquisition RRM was suffering from significant lack of social and organisational integration and all problems were attributed to a single cause.

The research team, working with 16 volunteers from the organisation, identified a set of inter-related causes that would have seriously threatened the wellbeing of the company if not addressed.

The outcome was a set of 12 work-streams implemented by the company, to address each critical issue identified and to create an enabling environment to improve integration

LSE Approach

Identifying the real underlying problem when the organisation attributed all issues to a single cause

Analysing a problem space to identify the multiple underlying and interacting causes

Understanding why mono-causal explanations are inadequate when facing volatile, uncertain, complex and ambiguous environments

LSE-ALD Project

Accelerated Leadership Development team 16 volunteers joined the LSE team Total of 4 teams Conducted 44 interviews with RRM execs on

top 3 levels in Finland, Norway, Sweden, UK and USA

LoM with all 70 RRM executives 2-day facilitated workshop with all

interviewers and sponsors

2-day Workshop to Identify the Problem Space 72 themes grouped into 8 clusters:

OBU/CFBU Interface Complexity of structure (matrix) Human behaviours Cultures* Communication Leadership/role of central team/management Identity

12 Underlying Assumptions

Twelve Work-Streams to Create the EECustomer / Market Interface

Account management process Customer Focus programmeProduct development process

Working the MatrixTraining and support for working in a matrixFacilitate informal networks

Leadership / Management / ProcessLeadership ProgrammeCo-ordinated change initiatives

Strategy / Structure / SynergyStrategy and strategic processStructure, roles & interfacesSynergistic benefits and knowledge sharing

Conclusion 1

By understanding the complexity concepts and how the theory explained the phenomena they were experiencing, both organisations were able to

a. Identify the problem space and address the problem

b. Create an enabling environment that was sustainable

Conclusion 1 (cont.) - EE By understanding the multiple underlying

interacting causes RRM was able to create an enabling environment to facilitate integration – that was sustainable

2 NHS Hospitals were able to create environments that not only addressed the immediate problem of deficits, but were also able to co-evolve with a changing social ecosystem

Conclusion 2 - transferability

By understanding the underlying principles of why it worked and what would have stopped it working well, we can transfer the learning – not by copying best practice, but by adapting these principles to the local context.

Not ‘how’ and ‘what’ but ‘why it worked’

Thank you …

E.Mitleton-Kelly@lse.ac.uk www.lse.ac.uk/complexity

Additional slides for discussion

Changes in Y – Oct 2007

“…this organisation just feels as if it’s much stronger, it’s a better place … not necessarily because the people are different, it’s the fact that they’ve been given the opportunity … the responsibility and the authority to get on with it”

“Now 18 months ago I used to hear, well, you’re trying to give me autonomy, but actually there’s people in the organisation keep saying, no, no, your can’t do that. I don’t hear that today. I hear that divisions are doing much more for themselves and taking that responsibility.”

“… we have never been so strong financially, yet the external environment has never been so weak, so why are we so good? … I think it’s because divisions have really taken it on board, … it feels very different than the way it used to be, it was always a bit hit and miss … Whereas now it’s very firm, you will deliver on this, and people are given the authority to get on and do it. I mean we’re not quite there yet, but that does feel different.”

Responding in a Weak External Environment e.g. Trusts and PCTs in deficit

But Hospital Y had changed and was: Better organised to respond Had better equipment, and clarity through written protocols

“the throughput is very high … you can do a lot more patients in the time available with the same resource”

Better at forecasting some major shocks and crises e.g. a 20% reduction in A&E attendances by the PCT

Ready to redeploy staff, etc – and encourage role extension Emphasised delivery on financial targets Culturally the organisation accepted the challenge and rose to it But they needed to understand the context and how they fitted in

Changes in the Health Ecosystem To survive the changes in the health ecosystem, the

hospital has to: Be aware of what is happening and address it fully (no

hiding under the carpet) i.e. scan the landscape and identify the emergent patterns

Not just adapt to the changes, but find radically different ways of working, by exploring the space of possibilities

Develop new relationships with the independent sector, GPs, PCTs, etc – develop new connectivities, feedback

Use its resources differently – use their distributed leadership, intelligence, expertise, etc by facilitating local autonomy & self-organisation

A Different Way of Thinking

Working in partnership with the independent sector To help market their services further afield Redress the balance of having to deal with the difficult long

stay patients, by bringing in more lucrative work Do the core emergency work really well Think more in business terms: “if something is making a profit,

we should expand it. If it’s making a loss we need to sort it out and make it more efficient” e.g. maternity and cardiology may be profitable, while rheumatology, because of the large drugs bill, can make a loss “but you can’t not do these things”

Address the conflict between the political and the cultural: whether to continue to provide a service that is needed for the local community, which makes a loss

A Different Way of Working

Performance management and target orientated e.g. 4 hour target in A&E is a given e.g. reducing length of stay

Patient pathway has been different as a consequence of hitting the A&E target – the process has been streamlined and they’ve opened a Medical Assessment Centre

A ‘can do’ attitude with a smile Greater cultural mix with multiple faiths, beliefs,

backgrounds