Systems Thinking: The System by Andy Lipok

A quick recap: In our new world we have discovered our purpose from the customers perspective to give our organisation and staff a new focus on what really matters – turning off and stopping anything that detracts from meeting this purpose.

In doing so we have uncovered that demand is varied but predictable, that care is needed on using the right measures to support success, that there is huge economic leverage in removing failure demand, that we can absorb variety in value demand and by using economies of flow we can reduce costs and improve service.


This can be done quickly and cheaply – no huge programmes, no ‘experts’ to recruit, no lengthy training courses or new tools to buy. The problem of course is that the world isn’t this easy to change and even if we had free rein we’d still:

  1. come up against a lot of questions that need to be answered
  2. uncover a raft of lessons that should be told and that lead to even more changes throughout the organisation
  3. need to consider a much wider change for managers, staff and existing functions to help support our new found focus and approach.

It needs to be clear you cannot make these discoveries in a rational environment (meetings, workshops etc), it has to be normative – understanding through actually touching, hearing, seeing the outcomes for themselves. However, here’s a little insight into some key conditions that we’ll discuss in more detail in later blogs.
The way processes work, the ease with which the work flows through the organisation and the efficiency with which the value work gets done will be governed by what we can be called system conditions – things that help or hinder people who are doing the work. For example: the way things are structured, how the work has been designed, the way people are paid and rewarded, the measures that are used, the policies and procedures, the IT systems, and so on.
They must, by definition, have a positive or a negative influence on the effectiveness of the processes i.e. system conditions create the waste that exists in the flow. If the waste in the flow exists because of the system conditions, why do the system conditions exist? They are the result of our current thinking about three things: the work, the people who do the work and the way the work is done. Does the below current thinking look familiar:

The system

In the course of these blogs we have outlined an approach to the work and the way the work is done. As a result we have already explored a number of key conditions and barriers to meeting customer value demand, but what about our people?

It was W. Edwards Deming who first argued that the system governs performance. “Do not assume that people can be held responsible for performance, for their performance is governed by the system within which they work”.

For example, based on resource plans, managers set their call centre agents work standards, measures and targets. It is a rational idea. In reality, however, the performance of any one individual will be subject to variation and the extent of that variation must be established before any action can be contemplated; otherwise we can make the situation worse. Managers and agents need to know whether variation in performance is attributable to agents or the system. If you accept the theory of variation we can expect the service agent to take anywhere between a lower and upper limit of calls on any one day. This daily variation is caused by the service agent’s system.
There is always variation, in anything that we do. In a call centre, variation will be caused by customers, nature of calls, products, procedures, availability of information, IT and so on. Ignoring this fundamental truth, most organisations set our staff work standards and police peoples’ performance. If the work standard is set at too high, service agents may only be able to achieve it by ‘cheating’. They may close a call before the customer is finished (as I write this Vodafone have just hung up on a colleague!), they might tell customers to call back; they re-route difficult calls, in short they do all they can to avoid missing work targets or standards. These are not bad people they work in a bad system.
As Deming stated, 95% of the performance of an organisation is attributable to the system and only 5% attributable to the individual. And yet we continue to hold staff accountable for performance, whilst we continue to make the current system even worse by managing performance with measures and targets not aimed at meeting customer value demand and removing waste – i.e. we concentrate on the 5%!