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ORGANISATIONAL LEADERSHIP

John Carlisle

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3

The Deming Chain Reaction

# Improve

Quality

(ri ght fi rst

time)

Costs decrease

because of less

rework, fewer

mistakes, fewer

delays, rejects

Stay in

business ++

Grow the market andmarket share.

Provide jobs and

more jobs.

Capture the market

with better quality

and lower price

Beginning Continual Improvement1.

2. 3.

4.

5.

6.

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The Deming Chain Reaction

# Improve

Quality

(ri ght fi rst

time)

Costs decrease

because of less

rework, fewer

mistakes, fewer

delays, snags

Productivity &

innovation

improves because

people not wasting

time with reworketc.

Stay in

business ++

Grow the market andmarket share.

Provide jobs and

more jobs.

Capture the market

with better quality

and lower price

Beginning Continual Improvement1.

2. 3.

4.

5.

6.

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COMMUNICATING YOUR PRIORITIES

Waiting times in A&E: 4 hours plus

Target is less than 10%

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Whats this?

% waiting over 4 hours in A&Ebad

good

TARGETS - an example from the NHS

%

Week 12

weeks

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3 ways to hit your targets

Improve the system

Distort the system

Distort the data

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The week Trusts

were measured forperformance

ratings

Suggest examples ofall 3 from your area

of work

% waiting over 4 hours in A&E

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Case study #2: Housing repairs

Example courtesy of John Seddon inFreedom from Command & Control

COMMUNICATING YOUR UNDERSTANDING

OF YOUR SYSTEM

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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 valueperformance 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!

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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 jobcomplete. That is what the customer cares about.

But theres a problem the IT system couldnt providethe data, so we dont know they only had the BVPIpercentages, so had to track each job manually

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SPC chart showing true performance

Total Elapsed Time of Repairs

0

20

40

60

80

100

120

140

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

Daystocomplete

Job time Average (31) UCL (85)

Routinetarget

28 days

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Not so hunky dory

Achieve targets by distorting the data & system

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

Total Elapsed Time of Rep airs

0

20

40

60

80

100

120

140

1 3 5 7 9 11 1 3 15 1 7 19 2 1 23 2 5 27 2 9 31 3 3 35 3 7 39 4 1 43 4 5 47 4 9

Consecutive jobs

Days

tocomplete

Job time Average (31) UCL (85)

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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

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They didnt know they had a problem

until they measured the right thing

in the right wayand it was not!

(MORE IMPORTANT, THEY DID NOT KNOW WHAT THESYSTEM* WAS CAPABLE OF UNTIL THEY RE-DESIGNED IT

AROUND REAL NEEDS AND ACTUAL PERFORMANCE)

* Their people and the processes

YOUR SYSTEM CAPABILITY

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And now its your turn

Spend 3 minutes thinking on your own about whatyouve 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

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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

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Want to find out more?

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

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

Fourth Generation Management Brian Joiner, McGraw-Hill, ISBN 0-07-032715-7

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 EnterprisesInstitute, ISBN 0-9743225-6-3

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What are we trying to

accomplish?How will we know that a

change is an improvement?What changes can we make thatwill result in the improvements

that we seek ?

Model for improvement

Act Plan

Study Do

project aims

global measurements

change principles

Source: Institute for Healthcare Improvement

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The 3 reasons for measurement

ImprovementImprovement of service

Sequential tests

Just enough data,small sequential

samples

Hypothesis flexible,

changes as learning

takes place

Accept consistent

variation

Run charts or Shewhart

control charts

ResearchNew knowledge

One large test

Just in case data

Fixed hypothesis

Design to eliminate

unwanted variation

Statistical tests (t-test, F

test, chi square), p

values

AspectAim

Testing Strategy

Sample Size

Flexibility of hypothesis

Variation (Bias)

Determining if a change

is an improvement

JudgementAchievement,

Benchmark, Choice

No tests

Obtain 100% ofavailable, relevant data

No hypothesis

Adjust measures to

reduce variation

No change focus

Source: Robert Lloyd IHI 2006

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3 ways to hit your targets

Target is less than 10%

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5.00

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15.00

20.00

25.00

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51 1 3 5 7 9

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The week theTrusts were

measured forperformance

ratings

% waiting over 4 hours in A&Ebad

good

TARGETS - an example from the NHS

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Targets are OK as goals/aims

As long as

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How will we know change is an improvement?

By understanding the variation that lives withinour data

By making good management decisions on our

improvement choices in the way we react tothat variation

Source: Robert Lloyd IHI 2006

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CONSTRUCTION INDUSTRY

WASTE REDUCTION MODELApplied research based on 90 projects with over 150 companies.

100%

80%

60%

40%

20%

0%

OverallCost

byProject

Customer

Cost

OLD WAY

Customer

Cost

JCP NEW WAY

Customer Waste

Contractors

Waste

Contractors

Cost

Profit, if any!!

Contractors

Cost

Profit

Share

Copyright John Carlisle, 1997, 2001

Time and CostOverrun

Win/lose Negotiations, e.g. buying the business,

tenders, poor planning leading to, e.g., late on site,

variations, claims etc.

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Copyright John Carlisle Partnerships, 1997

THE SYSTEM OF PROFOUND KNOWLEDGE

(TURNING KNOWLEDGE INTO INTELLECTUAL CAPITAL)

K

N

O

W

L

E

D

G

E

EFFORT

EFFORT

Intellectual Capital

Blaming and Defending

External Relationship Failure

Internal System and

Relationship Failure

CompetitivePolicies

e.g. ranking, incentivising

Feedback for Relationships

and Systems Improvement

Trust-Building

CooperativePolicies

e.g. Teamworking,

profit-sharing

Relationship Failures

Intellectual Capital

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Main_Idea

Move from HIERARCHICAL/CONTROL THINKING.

TRANSFORMATION

SUPPLIERS CUSTOMERS

FEEDBACK FROMCONSUMERS

REDESIGN

TO SYSTEM (Process Competent) THINKING.

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TraditionalOrganisationHIERARCHYwhos in charge matters more than what is best

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Copyright John Carlisle, 1997. Adapted from Baker Hughes Inteq

Potential

for Supplier/

Contractor/

User to Add

ValueArea of Wasted Potential

Involvement stage

in traditional

relationships

Viability Managing the mess

THE OPPORTUNITY CURVE

Conceptual

Design ExecutionFollow Up -

Learning PointsDetailed

DesignEvaluation

Involvement stage

in traditional

relationships

Upstream Downstream

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

Potentialfor Supplier/

Contractor,

Stakeholder

to Add

ValueIdentification

Elimination

Involvement stage

in traditional

relationships

Concept Planning Implementation

Planning

Risk Management through Cooperation

Conceptual

Design ExecutionReview

(blaming

or learning)

Detailed

DesignBusiness Case

Mitigation

Risk (Impact)Risk (Uncertainty)

DELIVERY

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