ORGANISATIONAL LEADERSHIP

John Carlisle

The Deming Chain Reaction

1.
# Improve Quality (right first time)

Beginning Continual Improvement

2.

Costs decrease because of less rework, fewer mistakes, fewer delays, rejects

3.

Stay in business ++ Grow the market and market share. Provide jobs and more jobs.
3

Capture the market

with better quality

and lower price

5.

6.

4.

The Deming Chain Reaction

1.
# Improve Quality (right first time)

Beginning Continual Improvement

2.

Costs decrease because of less rework, fewer mistakes, fewer delays, snags

3.

Productivity & innovation improves because people not wasting time with rework etc.
Capture the market

Stay in business ++ Grow the market and market share. Provide jobs and more jobs.

with better quality

and lower price

5.

6.

4.

COMMUNICATING YOUR PRIORITIES

TARGETS
- an example from the NHS

Waiting times in A&E: 4 hours plus

Target is less than 10%
bad
25.00 20.00

Whats this
Week 12

% waiting over 4 hours in A&E

15.00

10.00

5.00

0.00

35

37

39

41

43

45

47

49

51

11

13

15

17

19

21

23

25

27

29

31

33

good

weeks

35

3 ways to hit your targets

Improve the system

Distort the system

Distort the data
25.00

Suggest examples of all 3 from your area of work

% waiting over 4 hours in A&E

20.00

15.00

10.00

5.00

The week Trusts were measured for performance ratings

1 3 5 7 35 37 39 41 43 45 47 49 51 9 11 13 15 17 19 21 23 25 27 29 31 33 35

0.00

COMMUNICATING YOUR UNDERSTANDING OF YOUR SYSTEM

Case study #2: Housing repairs

Example courtesy of John Seddon in Freedom from Command & Control

The scenario
A Local Authority manages a large stock of housing They manage repairs using 2 measures

Budget Time to repair

Time to repair is a government mandated BVPI (best value performance indicator) measured in %

100% emergencies completed in 24 hrs 80% urgents completed in 7 days 80% routines completed in 28 days

The LA IS achieving all BVPIs!

System hunky dory?

What does the customer want? (Nominal Value)

Repair done quickly and properly

How do we know if we are achieving this? Lets measure the end to end time from request to job complete. That is what the customer cares about. But theres a problem the IT system couldnt provide the data, so we dont know they only had the BVPI percentages, so had to track each job manually

SPC chart showing true performance

Total Elapsed Time of Repairs
140 120

Days to complete

100 80 60 40 20 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Routine target 28 days

Consecutive jobs Job time Average (31) UCL (85)

Not so hunky dory

140 120

Total Elapsed Time of Repairs

Days to complete

100 80 60 40 20 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Consecutive jobs

Achieve targets by distorting the data & system

Job time

Average (31)

UCL (85)

Ignore if tenant is out Reclassifying emergencies as urgents Splitting a job into several, each one opened & closed

Got a problem? Have a management restructure!

Actually destabilised the system even more

So what next?
They understood the system was not capable

They studied the processes and discovered

40% failure demand at the call centre Tradesmen scheduling work to maximise earnings Queuing to get the right materials - delays

Led to redesigning the processes Within weeks all repairs completed within 8 days

YOUR SYSTEM CAPABILITY

They didnt know they had a problem until they measured the right thing in the right way and it was not!
(MORE IMPORTANT, THEY DID NOT KNOW WHAT THE SYSTEM* WAS CAPABLE OF UNTIL THEY RE-DESIGNED IT AROUND REAL NEEDS AND ACTUAL PERFORMANCE)
* Their people and the processes

And now its your turn

Spend 3 minutes thinking on your own about what youve just heard write down

Something you have learnt Something you want to try out Something you disagree with or question

Spend the following 10 minutes discussing with a fellow participant

What have we been talking about?

Why are we measuring and communicating?

Please the owner and satisfy governance are top? Understand the system capability against nominal value? Continually improve (drive out waste and increase value)?

How are we measuring ourselves?

By how much kudos (notice) we get and money we make? By the truth of our inner voice? By the joy at work that we and our workforce experience? which only comes from valuing our real customers

Want to find out more?

Freedom from command and control John Seddon, Vanguard Press, ISBN 0-9546183-0-0

Understanding variation Don Wheeler, SPC Press, ISBN 0-945320-53-1

Fourth Generation Management Brian Joiner, McGraw-Hill, ISBN 007-032715-7 Making sense of data SPC for the service sector Don Wheeler, SPC Press, ISBN 0-945320-61-2 The Goal Eli Goldratt & Jeff Cox, Gower, ISBN 0-566-07418-4 The Goldmine Freddy & Michael Ball, The Lean Enterprises Institute, ISBN 0-9743225-6-3

Model for improvement

What are we trying to accomplish?
What changes can we make that will result in the improvements that we seek ?
project aims global measurements change principles

How will we know that a change is an improvement?

Act Study

Plan Do

Source: Institute for Healthcare Improvement

The 3 reasons for measurement

Aspect
Aim

Research
New knowledge

Judgement
Achievement, Benchmark, Choice No tests

Improvement
Improvement of service

Testing Strategy

One large test

Sequential tests

Sample Size

Just in case data

Just enough data, Obtain 100% of available, relevant data small sequential
No hypothesis

Flexibility of hypothesis Fixed hypothesis

Variation (Bias)

Design to eliminate unwanted variation

Adjust measures to reduce variation

samples Hypothesis flexible, changes as learning takes place Accept consistent variation Run charts or Shewhart control charts

Determining if a change Statistical tests (t-test, F- No change focus is an improvement test, chi square), p values

Source: Robert Lloyd IHI 2006

3 ways to hit your targets

TARGETS
- an example from the NHS
The week the Trusts were measured for performance ratings

Target is less than 10%

bad
25.00 20.00

% waiting over 4 hours in A&E

15.00

10.00

5.00

0.00

35

37

39

41

43

45

47

49

51

11

13

15

17

19

21

23

25

27

29

31

33

good

35

Targets are OK as goals/aims

As long as

How will we know change is an improvement?

By understanding the variation that lives within our data By making good management decisions on our improvement choices in the way we react to that variation

Source: Robert Lloyd IHI 2006

CONSTRUCTION INDUSTRY WASTE REDUCTION MODEL

Applied research based on 90 projects with over 150 companies.

Time and Cost Overrun

100%

Profit, if any!!

Overall Cost by Project

80%

60%

Contractors Cost Contractors Waste Customer Waste

Profit Share

40%

Contractors Cost

20%

Customer Cost
0%

Customer Cost JCP NEW WAY

OLD WAY

Win/lose Negotiations, e.g. buying the business, tenders, poor planning leading to, e.g., late on site, variations, claims etc.
Copyright John Carlisle, 1997, 2001

THE SYSTEM OF PROFOUND KNOWLEDGE (TURNING KNOWLEDGE INTO INTELLECTUAL CAPITAL)

Intellectual Capital Blaming and Defending

K N O

Intellectual Capital

External Relationship Failure

W EFFORT L EFFORT

Feedback for Relationships and Systems Improvement Relationship Failures Trust-Building Cooperative Policies e.g. Teamworking, profit-sharing

Internal System and Relationship Failure Competitive Policies e.g. ranking, incentivising

E D G E

Copyright John Carlisle Partnerships, 1997

Move from HIERARCHICAL/CONTROL THINKING.

Main_Idea

TO SYSTEM (Process Competent) THINKING.

REDESIGN FEEDBACK FROM CONSUMERS

TRANSFORMATION SUPPLIERS CUSTOMERS

Traditional Organisation
HIERARCHY whos in charge matters more than what is best

THE OPPORTUNITY CURVE

Potential for Supplier/ Contractor/ User to Add Value

Area of Wasted Potential

Involvement stage Involvement stage in traditional in traditional relationships relationships

Upstream Downstream

Evaluation

Conceptual Design Viability

Detailed Design

Execution

Follow Up Learning Points

Managing the mess

Copyright John Carlisle, 1997. Adapted from Baker Hughes Inteq

Risk Management through Cooperation

Potential for Supplier/ Contractor, Stakeholder to Add Value

Risk (Uncertainty)

Risk (Impact) Involvement stage in traditional Mitigation relationships

Identification Elimination

Business Case

Conceptual Design

Detailed Design Implementation Planning

Execution

Review (blaming or learning)

Concept Planning

DELIVERY

Copyright John Carlisle, 1997/2001. Adapted from Baker Hughes Inteq