This week I've been thinking about how many organisations approach complexity. That is, how they look to operate in environments that are never wholly within their control and how they try to stay focused on what really matters amidst inevitable noise and distraction.
If we look back over the past century it's fair to say that most organisations have responded in a similar way, seeking to impose order through plans, objectives and reporting. When reality has pushed back, evidenced in symptoms like mis-alignment between silos, they have set priorities to pull it in line.
But complexity persists and priorities have proven to be tricky things. Each choice to direct focus onto something has contained both the positive action to make it a priority and the shadow decision to push other things into second place. In setting today’s priorities, our organisations have too often found themselves having tomorrow’s thrust upon them as a consequence of not giving weight to things that turn out to have been important.
In direct opposition to their intent, seeking to control complexity has left many organisation's ceding control to events, flip-flopping between the priorities that reality pushes upon them and fire-fighting the subsequent issues.
Towards A Different Approach
Plenty has been written already about the need for and the means to a different approach - one that embraces complexity and learns to work with it. That's something the team at Easier Inc. work at daily with our clients and others.
In our work, we find that one of the most thorny issues is how performance is understood and managed. I've written about this before so today I thought I'd share a specific reflection on where I see a fundamental but commonplace error arise...
Many Organisations Confuse Their Results With Their Performance
We can know the cost of everything but the value of nothing. We can establish how long it took to deliver a service without knowing whether it was delivered well. We can see that our revenue has grown by 100% without understanding that this was the very least we should have expected in the market conditions. And we can know that employees are happy (or not) but achieving what?
So when it comes to understanding performance, context is king but we can’t measure context. We can only understand it through acts of observation and synthesis.
Cost, service, revenue, risk and so on, each mean nothing on their own and need to be understood together in order to be understood at all. While results can be viewed in isolation, performance can only be understood in the round.
In prioritising results over performance in the round, "conventional" approaches to performance management systematically distort performance. Issues are shifted rather than solved more-or-less inevitably and as a consequence of treating results as if they each have independent meaning and value but perhaps especially as a consequence of treating some results as if they have more meaning and value than others.
In prioritising this over that and these over those, institutional and individual needs go unmet or poorly met, so creating dysfunction and division. Viewed over time, the impact is that performance deteriorates even while results are being celebrated.
Here's an example from healthcare...
A number of years ago I had the opportunity to explore performance in my local District General hospital. It was considered a high performing hospital and it's KPIs (key performance indicators) were all healthy. Waiting times in A&E were above the threshold (>95% of people admitted or discharged within 4 hours). Waiting times for planned treatment were also fine (<18% weeks from referral). Lengths of stay on hospital wards were low and reducing. The general narrative was that the hospital was doing well and getting better.
Except that when we examined why lengths of stay on the ward were reducing we noticed a pattern. Ignoring day patients, there were 3 distinct cohorts of people - those that were discharged with very short stays (24-48 hours), those who stayed less than a week and everyone else.
The size of the latter two cohorts was stable. It was too early to conclude but this caused us to question whether reducing lengths of stay were impacting people from these groups at all.
The size of the cohort of patients staying 24-48 hours was growing at a rate that was roughly equivalent to the growth in demand for hospital beds. Tentatively, we hypothesised that average hospital lengths of stay may be reducing, not because of efficiencies in treatment or discharge, but because more 'short stayers' were being admitted.
We wanted to understand this pattern and to test our hypothesis so we looked at where the growth in this cohort was coming from; who was being admitted, from where and why? How had this changed over the preceding couple of years?
The answers were intriguing - a strong correlation between growth in short stayers and growth in admissions from A&E but also a corresponding shift in the propensity to admit from A&E as the 4 hour waiting time threshold approached.
A new line of enquiry formed; why were these people being admitted from A&E? Was it because of a shift in the pattern of need (i.e. the type of patients arriving into A&E) or something else?
As we pulled case after case to understand the detail we saw that these changes were not demonstrably because of a change in the profile of need. The easy rationalisations that an ageing population or a population with growing lifestyle issues and co-morbidities explained the increased admissions was not in evidence in the patient stories. Instead, what we were seeing time and again, were more people being admitted because they could not be discharged within 4 hours, not because they essentially needed to be admitted.
The implications for the hospital's performance narrative were quite profound...
- Was seeing 95% of patients within 4 hours a sign of enduring success or growing failure? After all, waiting times were only being maintained by admitting people that didn't really need to be admitted.
- Were reducing lengths of stay a sign of efficient discharge arrangements or deteriorating admissions practices? After all, lengths of stay were only reducing because the people who were being discharged quickly had never really needed to be there at all.
So were the results the hospital had celebrated previously an indication of its improving performance or a sign that things were getting worse? After all, it was now quite clear that the hospital's performance was something quite separate from the hospital's results.
NB In next week's blog I'll share one of the ways that Easier Inc. clients have learned to embrace complexity and to deliver performance beyond results.