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

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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-Kelly
• Director
• Complexity Group
• LSE
• E.Mitleton-Kelly_at_lse.ac.uk
• www.lse.ac.uk/complexity

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Using Complexity Theory in Practice

• Are the ideas/concepts really useful
• How
• To whom
• Why

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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

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How Whom

• Policy makers who become sponsors
• all stakeholders incl. those who need to
  implement the policies
• Examples
• NHS
• RRM
• GSK

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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

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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

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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

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A key difference Creating a Positive Future

• Hospital 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

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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

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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

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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

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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

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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

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Exploring the space of possibilities

• Its not really telling people I think its
  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 were reaping the real
  benefits because weve cut out the stuff that
  wasnt working staff are much more upbeat about
  it theyre getting much more medical senior
  input and liaison with the rest of the hospital
  which has never happened before

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Changes in the Health Ecosystem

• Payment by Results higher salaries
  (Consultants GPs) Agenda for Change costs but
  lower productivity we havent got better
  productivity through paying people more weve
  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

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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

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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

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Theories Natural sciences Dissipative
structures chemistry-physics (Prigogine) Autoca
talytic sets evolutionary biology
(Kauffman) Autopoiesis (self-generation) biolog
y/cognition (Maturana) Chaos theory Social
sciences Increasing returns economics (B.
Arthur)
self-organisation emergence connectivity interdep
endence feedback far from equilibrium space of
possibilities co-evolution historicity
time path-dependence creation of new order
Generic characteristics of complex co-evolving sys
tems
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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

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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

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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

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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

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Twelve Work-Streams to Create the EE

• Customer / Market Interface
• Account management process 
• Customer Focus programme
• Product development process
• Working the Matrix
• Training and support for working in a matrix
• Facilitate informal networks
• Leadership / Management / Process
• Leadership Programme
• Co-ordinated change initiatives
• Strategy / Structure / Synergy
• Strategy and strategic process
• Structure roles interfaces
• Synergistic benefits and knowledge sharing

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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

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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

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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

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Thank you

• E.Mitleton-Kelly_at_lse.ac.uk
• www.lse.ac.uk/complexity

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• Additionals for discussion

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Changes in Y Oct 2007

• this organisation just feels as if its much
  stronger its a better place not necessarily
  because the people are different its the fact
  that theyve been given the opportunity the
  responsibility and the authority to get on with
  it
• Now 18 months ago I used to hear well youre
  trying to give me autonomy but actually theres
  people in the organisation keep saying no no
  your cant do that. I dont 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 its 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
  its very firm you will deliver on this and
  people are given the authority to get on and do
  it. I mean were not quite there yet but that
  does feel different.

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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 AE 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

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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

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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 its
  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 cant
  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

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A Different Way of Working

• Performance management and target orientated
• e.g. 4 hour target in AE is a given
• e.g. reducing length of stay
• Patient pathway has been different as a
  consequence of hitting the AE target the
  process has been streamlined and theyve opened a
  Medical Assessment Centre
• A can do attitude with a smile
• Greater cultural mix with multiple faiths
  beliefs backgrounds