The Practical Application of Complexity Theory
in the Public and Private Sector
Exploring the Science of Complexity in Aid Policy
and Practice at ODI on 8th July 2008
Prof. Eve Mitleton-Kelly
Director
Complexity Group
LSE
E.Mitleton-Kelly@lse.ac.uk
www.lse.ac.uk/complexity
Using Complexity Theory in Practice?

Are the ideas/concepts really useful?

How?

To whom?

Why?
Why?



By understanding what it means for an
organisation to be complex, (within a complex
environment) we can work with those
concepts and not block them unintentionally
However, not enough to name and describe
the concepts
Can use the logic of complexity to:


a. Understand the problem space when
addressing apparently intractable problems
b. Create enabling environments
How & Whom?

Policy makers who become sponsors
+ all stakeholders, incl. those who need to
implement the policies

Examples:




NHS
RRM
GSK
NHS

2 Hospitals, both with significant deficits

Each had a double objective of reducing costs
while improving the quality of service
How they approached it, was different


2 Chief Executives created two different
environments


X was creative, collaborative, inclusive
Y was perceived as inaccessible and the senior
management team as having a hidden agenda
Creating an Enabling Environment

EE for change: social, cultural, technical,
physical, economic, political, etc, conditions
that together create a sustainable
environment that co-evolves with a changing
social ecosystem

Using the principles of complexity



(a) as an explanatory framework
(b) to offer a different way of seeing and thinking
(c) a different language and set of concepts
Narrow Emphasis on the Problem





Emphasis on cost cutting, from a purely financial
perspective, met with resistance from clinicians
Issues involved both ethical and power relationships
Ethical: “I joined the NHS to help save lives” - difficult to
reconcile the objectives of their profession with financial
demands
Power: a layer of management (often administrators with
no clinical background) were perceived as diluting the
power and influence of consultants
More acceptable approach: reduce costs by reducing
wastage rather than cutting services, with a strong
emphasis on patient care
A key difference: Creating a Positive Future
Hospital X:







The CE (familiar with complexity) addressed the large
deficit directly as a major challenge that everyone could
contribute in resolving
Provided the opportunity for beneficial change
Had to make changes, but not just cost cutting exercises
If they improved the patient journey and cut wastage, then
financial savings could be made without affecting adversely
the quality of service
The CE saw other possibilities of a different future and
offered “a compelling picture I want to be part of”
Very positive and keen to discuss how they each
approached the changes as an opportunity to rethink how
their particular part of the service could be delivered - to
improve the patient experience
“Will have the opportunity to be the best”
A key difference
Hospital Y:
 The change was viewed with fear, anxiety and
apprehension
 Some of the clinicians had already gone through one
major restructuring and downsizing, had left a very
strong adverse impression - feared repetition
 Also felt the real issues were not being openly
discussed – senior management team were not
transparent and open, but were hiding some
unpalatable truth
 Overall impression: one of anxiety and great
uncertainty about the future – both about the future of
the hospital and personally
Two different environments






In X the problems were seen as possibilities for
improvement in the service, everyone participated and tried
their best to contribute to making a difference
They were anxious about the future nature of the hospital,
but this was a manageable anxiety, almost a curiosity about
the future
Approach: participative, dual top-down and bottom-up
process to change
In Y the anxiety was uppermost in their mind & obscured
everything else
Impression of not being given the space to contribute talked about participation and contribution, but constrained
in practice
Approach: primarily top-down
In Complexity Terms: X







X had facilitated self-organisation, exploration-of-the-space-ofpossibilities, generative feedback, emergence and co-evolution
Staff felt that they had ‘permission’ to try out ideas locally
To explore alternative procedures and processes to improve the
patient journey
Could discuss the outcomes openly and honestly within their group
and share it more widely
Cross-directorate projects: helped to bridge the tight boundaries
between specialities. Cross-over was not always successful, but the
possibility was present
As each made a change the others were influenced to varying
degree, but the generative feedback did make a difference and other
directorates in the cross-over projects were encouraged to also try
out some new ideas
Reciprocal influence resulting in changes in the reciprocating
entities – i.e. the co-evolutionary process was facilitated
In Complexity Terms: Y in 2005







Y talked about facilitating self-organisation, but constrained: new
ideas had to be given the ‘go ahead’ from the senior team
Whole atmosphere was one of constraint rather than
encouragement – limited exploration of the space of possibilities
Y was not beset by problems (X had a much larger financial deficit);
they did have significant successes in some specialities which were
growing out of all expectations
But there was no active learning from these successes and the
focus was very much on attaining financial balance
Little generative feedback, and few opportunities for staff to get
together to review performance and reflect in an open, relaxed and
informal atmosphere
Reviewing done formally in terms of performance management
By restraining self-organisation and exploration and by not actively
reflecting on the outcomes (limited generative feedback) the learning
environment was constrained
Hospital Y Changed significantly

Following the reporting back after the first
phase of the project, the hospital changed
significantly.

In the 18 months that followed, they made
major changes

Complete change in 2006/7
Exploring the space of possibilities




“It’s not really telling people – I think it’s creating the
organisation that takes the responsibility itself”
Introduced a new management structure
Divisions took responsibility for their own plans
Looked at inefficient departments and helped them
to improve: “looking at ways of doing things
differently … now we’re reaping the real benefits,
because we’ve cut out the stuff that wasn’t working
… staff are much more upbeat about it … they’re
getting much more medical senior input and liaison
with the rest of the hospital which has never
happened before”
Changes in the Health Ecosystem




Payment by Results – higher salaries (Consultants,
GPs) + Agenda for Change costs, but lower
productivity “we haven’t got better productivity
through paying people more, we’ve actually got
less…”
European Working Time Directive – junior doctor
shifts, etc + societal changes – expect to leave on
time
Some work will go to Specialist Centres and other
work to GPs – so the DGHs are losing some of their
traditional work
These changes were pushing the hospital to a farfrom-equilibrium position
In Complexity Terms






Changes in the ecosystem pushed the hospital far-fromequilibrium
At the critical point they explored their space of possibilities and
developed
 New ways of working – greater autonomy & self-org. + working
better as a team, supporting each other and acknowledging their
inter-dependence
 A different way of thinking + learnt a new bus. lang.
 New relationships – i.e. new patterns of connectivity internally
and externally
Created and continue to create new order
i.e. they are actively co-evolving with their changing ecosystem
They are becoming more tolerant and comfortable with
emergence, unpredictability and uncertainty
They have created a new co-evolving enabling environment
2 Hypotheses + 2 Assumptions




H1: that successful large-scale change can only occur
through the adaptation of underlying principles and not
by copying of best practice
H2: that innovation and improvement are facilitated by
the co-creation of an enabling learning environment
A1: that collaboration and a dual top-down and bottomup approach make such an environment possible and
sustainable
A2: if learning from successful experiments can be
encouraged and shared then the improvement process
may accelerate and spread nationally
Theories
self-organisation
Natural sciences
emergence
connectivity
interdependence
feedback
Dissipative structures
chemistry-physics (Prigogine)
Autocatalytic sets
evolutionary biology (Kauffman)
Autopoiesis (self-generation)
biology/cognition (Maturana)
Chaos theory
Social sciences
Increasing returns
economics (B. Arthur)
Generic
characteristics
of complex
co-evolving
systems
far from equilibrium
space of possibilities
co-evolution
historicity & time
path-dependence
creation of new order
RRM




Part of an EPSRC project, called ICoSS, which
looked at systems integration.
Two years after a major acquisition RRM was
suffering from significant lack of social and
organisational integration and all problems were
attributed to a single cause.
The research team, working with 16 volunteers from
the organisation, identified a set of inter-related
causes that would have seriously threatened the
wellbeing of the company if not addressed.
The outcome was a set of 12 work-streams
implemented by the company, to address each
critical issue identified and to create an enabling
environment to improve integration
LSE Approach



Identifying the real underlying problem
when the organisation attributed all
issues to a single cause
Analysing a problem space to identify the
multiple underlying and interacting
causes
Understanding why mono-causal
explanations are inadequate when facing
volatile, uncertain, complex and
ambiguous environments
LSE-ALD Project






Accelerated Leadership Development team
16 volunteers joined the LSE team
Total of 4 teams
Conducted 44 interviews with RRM execs on
top 3 levels in Finland, Norway, Sweden, UK
and USA
LoM with all 70 RRM executives
2-day facilitated workshop with all
interviewers and sponsors
2-day Workshop to Identify the Problem Space

72 themes grouped into 8 clusters:








OBU/CFBU Interface
Complexity of structure (matrix)
Human behaviours
Cultures*
Communication
Leadership/role of central team/management
Identity
12 Underlying Assumptions
Twelve Work-Streams to Create the EE
Customer / Market Interface
Account management process
Customer Focus programme
Product development process
Working the Matrix
Training and support for working in a matrix
Facilitate informal networks
Leadership / Management / Process
Leadership Programme
Co-ordinated change initiatives
Strategy / Structure / Synergy
Strategy and strategic process
Structure, roles & interfaces
Synergistic benefits and knowledge sharing
Conclusion 1



By understanding the complexity concepts
and how the theory explained the
phenomena they were experiencing, both
organisations were able to
a. Identify the problem space and address
the problem
b. Create an enabling environment that was
sustainable
Conclusion 1 (cont.) - EE

By understanding the multiple underlying
interacting causes RRM was able to create
an enabling environment to facilitate
integration – that was sustainable

2 NHS Hospitals were able to create
environments that not only addressed the
immediate problem of deficits, but were also
able to co-evolve with a changing social
ecosystem
Conclusion 2 - transferability

By understanding the underlying principles of
why it worked and what would have stopped
it working well, we can transfer the learning –
not by copying best practice, but by adapting
these principles to the local context.

Not ‘how’ and ‘what’ but ‘why it worked’
Thank you …


E.Mitleton-Kelly@lse.ac.uk
www.lse.ac.uk/complexity

Additional slides for discussion
Changes in Y – Oct 2007



“…this organisation just feels as if it’s much stronger, it’s a better
place … not necessarily because the people are different, it’s the
fact that they’ve been given the opportunity … the responsibility
and the authority to get on with it”
“Now 18 months ago I used to hear, well, you’re trying to give me
autonomy, but actually there’s people in the organisation keep
saying, no, no, your can’t do that. I don’t hear that today. I hear
that divisions are doing much more for themselves and taking
that responsibility.”
“… we have never been so strong financially, yet the external
environment has never been so weak, so why are we so good?
… I think it’s because divisions have really taken it on board, … it
feels very different than the way it used to be, it was always a bit
hit and miss … Whereas now it’s very firm, you will deliver on
this, and people are given the authority to get on and do it. I
mean we’re not quite there yet, but that does feel different.”
Responding in a Weak External Environment

e.g. Trusts and PCTs in deficit
But Hospital Y had changed and was:
 Better organised to respond
 Had better equipment, and clarity through written protocols
 “the throughput is very high … you can do a lot more patients in
the time available with the same resource”
 Better at forecasting some major shocks and crises e.g. a 20%
reduction in A&E attendances by the PCT
 Ready to redeploy staff, etc – and encourage role extension
 Emphasised delivery on financial targets
 Culturally the organisation accepted the challenge and rose to it
 But they needed to understand the context and how they fitted in
Changes in the Health Ecosystem

To survive the changes in the health ecosystem, the
hospital has to:




Be aware of what is happening and address it fully (no
hiding under the carpet) i.e. scan the landscape and
identify the emergent patterns
Not just adapt to the changes, but find radically different
ways of working, by exploring the space of possibilities
Develop new relationships with the independent sector,
GPs, PCTs, etc – develop new connectivities, feedback
Use its resources differently – use their distributed
leadership, intelligence, expertise, etc by facilitating local
autonomy & self-organisation
A Different Way of Thinking






Working in partnership with the independent sector
To help market their services further afield
Redress the balance of having to deal with the difficult long
stay patients, by bringing in more lucrative work
Do the core emergency work really well
Think more in business terms: “if something is making a profit,
we should expand it. If it’s making a loss we need to sort it out
and make it more efficient” e.g. maternity and cardiology may
be profitable, while rheumatology, because of the large drugs
bill, can make a loss “but you can’t not do these things”
Address the conflict between the political and the cultural:
whether to continue to provide a service that is needed for the
local community, which makes a loss
A Different Way of Working

Performance management and target orientated





e.g. 4 hour target in A&E is a given
e.g. reducing length of stay
Patient pathway has been different as a
consequence of hitting the A&E target – the process
has been streamlined and they’ve opened a Medical
Assessment Centre
A ‘can do’ attitude with a smile
Greater cultural mix with multiple faiths, beliefs,
backgrounds