An introduction to The Vanguard Method
Systems Thinking for Service Organisations
Jeremy Cox, Vanguard Consulting
Purpose
• Introduce you to the Vanguard Method– Wprowadzenie do Metody Vanguard
• Set you up to use the approach in a “live work” situation– Przygotowanie do stosowania tego podejscia w sytuacji
“rzeczywistej”
• Help you to make informed choices about applying the Vanguard Method to compliment your ‘results-based management’ approach
London 1854
ConsequencesConsequences
Action StrategiesAction Strategies
AssumptionsAssumptions
What is happening?
John SnowOn the Mode of Communication of Cholera, 1855
Or this?
Change this?
Galileo Galilei (1564 - 1642)
Double-Loop Learning
Thinking governs performance
The way we think about the design and management of work… Nasz sposb myslenia o projektowaniu i zarzadzaniu praca
…governs the system…rzadzi systemem
…and performance is affected as a consequenceI ma to wplyw w konsekwencji na wyniki
Performance
System
Thinking
Wyniki
System
Myslenie
Dr Steve Allder (Plymouth, England)
• Looking at ‘length of stay’ for four years with no insight (technology, clock-busting drugs…)
THEN
• Started designing care for patients according to their ‘shape’
• Studying Flow/Value from citizen’s perspective (demand, diagnosis, treatment, rehab…)
“The way you think actually determines the way you conceive the problem that you are facing... Because I think
‘systems’…that allows me to think about clinical problems in a completely different way”
Stroke Care (Plymouth, England)
Days in hospital 16 to 6
Number of beds 56 to 39
Cost per patient £6k to £3k
‘Profit’ per patient £2k loss to £1k surplus
Cost Reductions:
Hospital -14%
Neurology -23%
External beds -17%
Clinical indicators:
Time from A&E to stroke ward 1.6 days to 2 hours
Admitted as ‘outliers’ 40% to nil
HSMR Amongst worst to Best ten
A System has:– Parts
– Interactions
– a PURPOSE
This introductory programme is designed to give you a good orientation in the basic principles, and give you the opportunity to ‘have a go’ in a live system
Expertise develops through multiple theory & practice loops over time, with expert support where needed
Most people imagine that the
present style of management has
always existed, and is a fixture.
Actually, it is a modern invention:
a prison created by the way in
which people interactW Edwards
Deming
Henry FordFrederick Winslow Taylor
Adam Smith
Joseph Whitworth
Alfred Sloan
B. F. Skinner
Henry Gantt
Conventional management thinking
Alfie Kohn
Stafford Beer
Taiichi Ohno
Peter Checkland
W. Edwards Deming
Systems Thinking
Peter Senge
Chris ArgyrisRuss Ackoff
Johh Seddon
James Lovelock
Counter-intuitive ideas
Value demand
& Failure demand(demand that is caused by a failure to do things or do
things right for the customer)
All demand is ‘work’
Counter-intuitive ideas
Manage unit costs Cost is in flow
How do we reduce the cost per call /
kilo / visit / employee…?
How do we reduce the cost per call /
kilo / visit / employee…?
What does it cost to provide service end-to-end? How much capacity is wasted?
What does it cost to provide service end-to-end? How much capacity is wasted?
Three crucial insights
1. Managing costs often increases your costs
2. We need to understand the causes of cost
3. Reduce cost (and improve service) by learning to design for value
Counter-intuitive ideas
Standardise and specialise
Design against demand
In 1978, the conventional factory design arrives in service as a ‘front-office/back-office’ split…
“The less direct contact the customer has with the service system, the greater the potential of the system to operate at peak efficiency”
Where Does the Customer Fit in a Service Operation,
Richard B Chase, Harvard Business Review, Nov-Dec 1978
Counter-intuitive ideas
Performance = people
Motivation = extrinsic
Performance = 95% System
Motivation = intrinsic
Counter-intuitive ideas
Decision-making separated from work•Hold people accountable for the numbers•Specify measures & method•Reporting via hierarchy
Method
Measures
Purpose• Decision-making
integrated with work• Measures anchored in
Purpose
Creates a De Facto Purpose
1. Fiddle the numbers
2. Fiddle the system
3. Improve the system
• Leaders hold people accountable to PRINCIPLES
• “Can you demonstrate that you have measures that lead you to learn & improve?”
Counter-intuitive ideas
In complex systems, change is emergent & must be based on knowledge
Study / Understand
(Check)
Experiment with new principles
(Plan)
Make normal & sustainable
(Do)
What is the Purpose (in customer terms)?
1
Flow: Capacity = Value Work + Waste4
Measures of Purpose(Capability)
3Demand : • Type & Frequency• Value & Failure• What matters?
2
Thinking6
System Conditions5
cust
omer
sThe Vanguard Model for ‘Check’
Core Flows
Support Processes
Performance
System
Thinking
Understanding the
conventional approach
Understanding an alternative
systems approach
Change via Check-Plan-Do
• All demand is work
• Standardise, specialise & automate work
• Management role =– specify measures and control method– Manage individual performance
• Change can be planned
Examples in practice?
Problems / issues / challenges?Performance
System
Thinking
The conventional approach to ‘results-based management’
The Vanguard Method: a systems approach to ‘results-based management’
• Design against demand – Value and Failure demand– Demand – Value- Flow
• Lead action on the system:– Purpose-Measures-Method
– Check-Plan-Do
• Change emergent, based on knowledge– Thinking-System-Performance
– Check-Plan-Do
Performance
System
Thinking
Conventional Thinking
Top Down
Functional specialisation
Separated from work
Budget, activity, targets,output, standards
Manage budgets & people
Contractual
Extrinsic
Outside in
Demand value flow
Integrated with work
Related to purpose, variation, & capability
Intrinsic
Act on the system
What matters
The Vanguard Method
To put it another way…The Vanguard Method helps leaders move FROM ‘management by objectives’ TO ‘principle-based management’
Going out to see for yourself: brief for fieldwork
• Objective: use the Model for Check to study the relationship between Thinking–System–Performance
– How does the system work? – Where and how to intervene to make things work better?• Next steps:
1. Choose a shortlist of target systems to study: Jeremy will help you agree final list of two or three & select groups (selection criteria is that the system should be something ‘end-to-end’ and of practical interest)
2. Use Model for Check to study the two or three target systems, one per group
3. Bring back a ‘System Picture’, • Your System Picture should cover all six elements of the Model for Check – there is no standard
format• Be ready to make a short presentation of your learning• There is no ‘right answer’ – this is a learning exercise not a final diagnosis