118/04/23

Understanding the Problems Applying Soft Systems Methodology

(SSM) for Better Regulation

Ian Mitchell BA BSc FORS Operational Research UnitAnalytical Decision Support

Strategy, Better Regulation and Economics (SABR)

OR54 XVII - September 2012

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Introduction

• This presentation describes the application of Peter Checkland’s SSM to OR support to the Better Regulation Executive in early 2011.

• The benefit was a better understanding of the processes and gaps in the creation of regulation and its place as a policy lever.

• The presentation covers the technical use of SSM, the techniques adopted and how social aspects of the work allowed OR to have an impact.

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U is for UNDERSTAND

• Operational Research Method• University of Buckingham

– 11% of Business Modelling exam

– 7 Stages (iterative) – U-D-F-S-I-V-I

– U- UNDERSTAND

• Describe-Predict-Prescribe

• Soft Systems Methodology (SSM)– A structure to understand a situation

– 1993 work for European Space Agency• Economic benefits from telecommunication satellites• “Soft Systems Methodology in action” Checkland & Scholes 1990 J Wiley

Understand the Problem

Determine the key variables

Formulate the variables

Solve the formula

Interpret the results

Validate the findings

Implement action

THE O.R. METHOD

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U is also for URGENT

• Late on Sunday evening– Sent: 06 February 2011 21:04 Subject: URGENT: BRE options -

mapping the regulatory management system– Andy - I've been given your name by Tera as someone who might be able

to help us in BRE to redesign the framework we have put in place for managing regulation under the Coalition agreement.

– We urgently need to map the system that now exists to understand the potential cause and effects of different parts of the system as it affects different actors (and there are lots....)

• By teatime on Monday– As we agreed I do think some soft systems analysis of where we are,

where we want to get to and how we might do it would be enormously valuable. Any help you think you can offer would be much appreciated.

• Tuesday Dark O’Clock– OR Analyst on way to the options workshop

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Introduction to BRE

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• Better Regulation Executive– How to apply less Resource

• What options are there? • Which is better (or less worse)?

• Soft System Methodology (SSM)– A system transforms inputs into outputs

– Do X by Y in order to achieve Z

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SSM uses terms to prompt a view

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• CATWOE– Customers – Victims or beneficiaries of T

– Actors – Those who would do T

– Transformation – Conversion of inputs to outputs

– Weltanschauung – World view making T meaningful

– Owners – those who could stop T

– Environment – Elements outside system taken as given

• Answers give Root definitions and Rich Pictures

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CATWOE from Tuesday

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Department

Department

Department

Department

Department

Process per flowchart

BRE

Options1.Gatekeeper2.Consultant3.Balanced overall reduction4.Thought Leader5.Transfer Functions

Regulators

Regulation

Transformation

Actors

Customers

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Changing the worldview

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SocietyCitizens

EconomyBusinesses

RegulationDepartment

Department

Department

Department

Department

Process per flowchart

BRE

Options1.Gatekeeper2.Consultant3.Balanced overall reduction4.Thought Leader5.Transfer Functions

Regulators

Process per flowchartProcess per flowchart

Process per flowchart

Regulation

Regulation

Owners

Weltanschauung

Environment

Transformation

Actors

Customers

OIOO

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Next steps

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• Complete the picture and description– “To do X by Y in order to achieve Z”

• Identify Efficacy, Effectiveness and Efficiency– Which option generates greater value in the broader

system?

– What other options are there?

• Means– Discuss views 1:1 per CATWOE (30 minutes)

– Develop Rich Pictures and Root Definitions

– Review these next Thursday

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Outline (as used)• Progress since last week

– Discuss views 1:1 per CATWOE (30 minutes) • 6 so far 2 to go (30 minutes plus...)

– Develop Rich Pictures and Root Definitions– Review these next Thursday - Now

• Use SSM to describe the System “As is”:– CATWOE Pictures and Definition – Overall System – Components – Sub-systems

• Describe how the System is wanted to be– Potential changes already becoming apparent

• Identify what do we have to do to move from where we are to where we want to be

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Society

Economy

Regulation

Departments

EU

Ministers

BRERegulators

Domestic Regulation

Regulation

Regulation

OIOO

EventsEU Transposition Regulation

RPC

Policy Committees

RRC

Optionswhat to do

ExhortFund

Legislate

Interventions other than Regulation

Citizens

Businesses

Civil Society Organisations

Interested Parties

System - As Is

Side effects from interventions

EnforcersLBRO

Global Economy

Systemic Risk Disasters

Ideas:Something should be

done

Cabinet

PressuresPoliticalMediaPublic

Choice

BR Ministers

12Players

BRE policy

BRE RMs

BRUs

A OGD Ministers

Policy officials

RRC

BLCsRPC Members

RPC Secretariat

B

C

Perm Secs

Economists

Legal

Comms

Better Reg Intermediaries OGDs Advisors

Officials

Ministers

Private Offices SpAds

Actors Owners Customers

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Policy Makers

Interest Groups

MinistersIndividuals

ID Problem Consider Options

Minister

Impact Assessment

RPCRRC

Policy Committees

Principles fit for purpose

Impact Analysis is Fit for purpose

BetterImpact

AssessmentConsultation

Clear Government

response

Clearance to draft

Impact Assessment

Primary Legislation HoC – HoL

Clearance for amendments

Final Impact

Assessment

Post Implementation

Review3-5 years on

Statutory Instrument

implemented

Clearance process to

consult

Sun setting7 years Duty to

review

Secondary Legislation

Impact Assessment

Voluntary Compulsion

Alternatives

Motivation to act

Domestic RegulationDomestic Regulation

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CATWOE Elements

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• Customers – Citizens and Businesses• Actors – Central and Local Government, Enforcement

organisations• Transformation – Improvement of Society-Economy• Weltanschauung – Policy can improve Society and Economy• Owners – Ministers• Environment – Machinery of Government, Policy levers,

World Events

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Root Definition

• BRE enables UK Government policy makers and deliverers across Government and Partner Organisations to create and enforce the right stock of the right regulations in order to improve the state of the Society and Economy of Britain.

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Changing the System

• Fri 04/03/2011 11:04- I hope that, in the coming weeks we can start to use Ian's work as a basis for discussion of various aspects of the regulatory system and how it's going to need to change.

• 8 March - Three Boards Workshop– What is good about the System as is?– What is bad about the System as is?– What are your brightest ideas for a better System?– Issues and Solutions

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Society

Economy

Departments

EU

Ministers

BRERegulators

Domestic Regulation

Stock of Regulation

OIOO

EventsEU Transposition Regulation

RPC

Policy Committees

RRC

Optionswhat to do

ExhortFund

Legislate

Interventions other than Regulation

Citizens

Businesses

Civil Society Organisations

Interested Parties

System - As Is FINAL

Side effects from interventions

EnforcersLBRO

Global Economy

Systemic Risk Disasters

Ideas:Something should be

done

Cabinet

PressuresPoliticalMediaPublic

Choice

BR Ministers

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Regulation Framework

Main Gate

Society

Economy

Departments

EU

Ministers

BRE

Regulators

Domestic Regulation

Regulation

Regulation

OIOO

EventsEU Transposition Regulation

RPC

Policy Committees

RRC

Optionswhat to do

ExhortFund

Legislate

Interventions other than Regulation

Citizens

Businesses

Civil Society Organisations

Interested Parties

System - As It could Be

Side effects from interventions

Enforcers

LBRO

Global Economy

Systemic Risk Disasters

Ideas:Something should be

done

Cabinet

PressuresPoliticalMediaPublic

BR Ministers

Initial Gate

Choice

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SSM – Lessons Indicated

• Technical– Insights rather than “Answers”

• For the Analyst –then and later• For Decision Makers

– Develop Common Language• Top level system was accepted• Lower level areas linked to it

– Share Understanding• Social

– Benevolent Patronage enables OR• Interest from DG and senior staff• Close liaison with BRE• Arrival of New Director, Selection and

Restructuring• OR enables change by illumination

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Departments

Lead Department

BRU

Finance

Impact Assessme

nt

Legal

Domestic Regulation

Choice

Policy Team

Economists

BRE

Cabinet Committee

Clearance