How Understanding Systems Thinking Changed My Career

?I had heard the term, but it wasn’t until recently that I fully understood how systems thinking could positively impact the delivery of major programmes.

Though I’ve been in the industry for a couple of decades, the MSc in Major Programme Management I’m currently taking at Oxford University is changing the way I think about past major programmes and approach current ones. As part of this masters program, I was asked to write a paper (some of which I’m sharing with you today) applying the tools of systems thinking to model and analyse a project that I am familiar with.

For nearly a very long time I have been heavily involved with a large project in Canada.? Along with acting as bid director, I sat on the board overseeing the contract delivery phase through construction into the operation phase.?

Shortly after completion, the project failed to deliver the promised benefits and components of the system were riddled with defects that significantly further affected the outcome.?

This case study highlights the potential consequences for a major programme when programme stakeholders fail to recognize a programme as a complex system rather than a complicated system. Canada as a whole lags almost a decade behind other countries such as Australia and the United Kingdom in its understanding of major programmes. Various Canadian agencies responsible for delivering major programmes have adopted a reductionist approach, which assumes that major programmes are complicated systems rather than complex adaptive systems.?

Complicated Systems VS. Complex Systems

Having been involved with the project for several years, I know that this particular major programme has always been viewed as a complicated system rather than a complex system. That said, I want to explore how the lack of understanding that this project was a complex system contributed to the failure to deliver a fully functioning new system to the client on time and on budget.?

Complex systems have a multitude of nonlinear relationships and therefore necessitate the use of causal loops in order to represent the relationship between variables. Causal loops are a great way to represent linkages between variables in complex systems because they allow us to represent the nonlinearity of a complex system.

Figure 1 and 2 represent the same project using 2 different system maps. Figure 1 uses a complex system map while figure 2 uses a linear thinking system map.

System Narrative

The main reason for building a system map retrospectively is to understand what interventions could have allowed for a different project outcome. In order to understand the project’s issues (cost overruns, defects and delays), I carefully reviewed the assumptions and decisions made by the client and their consultants, as well as, the influence of stakeholders on those decisions and assumptions.?

The “core story” of the system map is centred around the intent of the client to transfer all accountability for the delivery of the project to a single consortium—this way, the client could focus on overseeing the delivery, adopting a fairly passive approach of "command and control", that did not take into account the project’s system complexity.?

The deep structure identified in the system map, is the convergence of the various elements of system complexity. The deep structure of the system is organized around the client's need to have one single point of accountability with a consortium as well as external financiers to further ensure the timely and on-budget delivery of the project.

Stakeholder Intervention and Its Effects

Throughout the project life cycle, the project’s successes and failures are used as a political tool. Stakeholders became overly involved with programme all attempting to micromanage the programme. ?

Contractor’s Delay and Claims

Project sponsors are always looking to have one single point of accountability for the delivery of the project. However, as discussed by Eden, Ackerman and Williams (Eden, Ackerman and Williams, 2005), contractors are prone to optimism bias when developing their bid estimates, and in many cases, project costs tend to turn out higher than expected, prompting the contractor to develop delay and disruption claims. Because project sponsors feel that risk has been transferred, these delay and disruption claims are viewed as frivolous regardless of their legitimacy. To complicate things further, contractors have a tendency to slow down their progress in order to fit the project costs into the previously bid budget. In order to overcome these cost and time constraints, contractors try to develop innovative solutions that required client sign-off. However, clients are typically reluctant to approve these innovative solutions since they are typically not in accordance with the contract.

Project Funding and Financing

The funding for large public infrastructure projects is typically divided into two or more equal parts of funding from various sources. Each funder has specific funding requirements, creating significant complexity in major programmes. In the case of this Canadian project, one funder required private sector financing in the form of private debt and equity. Furthermore, one funder also required that the components be constructed using local content. This funding structure created a complex change process system, as all funders and financiers had to approve the changes. This funding structure ultimately constrained the ability of the project to accommodate change requests from the contractor, exacerbating the delay and claim complexity described above.

Interventions

Despite hopes, the programme was late and partly defective—even with the conviction from all major project stakeholders that the private sector was best-suited to deliver the project.?The systems map created for this case study clearly shows a significant number of vicious circles where the loop repeatedly reinforces the negative effects. There are several points of intervention into the system that could help break this negative feedback loop, but we will focus on two of them in order to provide a general idea of how system intervention should occur.?

The project’s communication and stakeholder management strategy was centred around “reducing” the complexity of the programme in such a way that stakeholders could understand it. In doing so, stakeholders were not able to understand the nonlinearity of the events and consequences befalling the system/programme. Rather, the communication strategy should have attempted to explain the complexity of the system and the challenges of implementing a major programme. By managing stakeholder expectations the client could have removed a few vicious loops from the system.

One of the main issues the project faced was the reductionist approach used to reduce complexity and fit the political narrative by assuming that complexity can be better managed by outsourcing it. However project complexity cannot be reduced or eliminated simply by outsourcing it, the project sponsor could have incorporated the appropriate redundancy and resilience into the major programme structure to deal with inevitable project delays and cost overruns.

Changing the Approach?

Building a system map using the Omidyar Group methodology on a programme that I have been involved with for a long time? was a very enlightening process. The major programme failed to deliver some of its promised outcomes and I now have a much better understanding of why this happened.?

Complexity is rarely understood in major programmes. In my experience, practitioners regularly fail to comprehend the nonlinear relationship that exists in these programmes and therefore, interventions often fail to prevent what they were designed to stop—even worse, these interventions sometimes actually have unintended consequences . In this particular case study, the was a general lack of understanding of complexity and a failure to implement a delivery approach that would create the appropriate conditions to deal with this complexity. Specifically, there was a failure to create a system in this programme management structure that could deal effectively with emergent risks and ultimately create programme resilience.?

If you made it this far in this article, it is likely that you too are involved in major programmes. Our understanding of major programmes is lagging a decade behind in Canada and arguably one of the only ways we can “catch up” is by elevating the conversation. So, let’s start here: Have you watched the same narrative that I saw play out in this project in your past projects? What do you believe is working against the adoption of systems thinking? And if you’d like to go even deeper, how does our participation in the system and our way of describing it affect what we are observing?

If you haven’t already, check out my 2021 reading list for the sources that helped me dive into this thinking for better understanding.