1 05/12/2015 Understanding the Problems Applying Soft Systems Methodology (SSM) for Better Regulation Ian Mitchell BA BSc FORS Operational Research Unit Analytical Decision Support Strategy, Better Regulation and Economics (SABR) OR54 XVII - September 2012

2 Introduction This presentation describes the application of Peter Checkland’s SSM to OR support to the Better Regulation Executive in early The benefit was a better understanding of the processes and gaps in the creation of regulation and its place as a policy lever. The presentation covers the technical use of SSM, the techniques adopted and how social aspects of the work allowed OR to have an impact.

3 U is for UNDERSTAND Operational Research Method University of Buckingham –11% of Business Modelling exam –7 Stages (iterative) – U-D-F-S-I-V-I –U- UNDERSTAND Describe-Predict-Prescribe Soft Systems Methodology (SSM) –A structure to understand a situation –1993 work for European Space Agency Economic benefits from telecommunication satellites “Soft Systems Methodology in action” Checkland & Scholes 1990 J Wiley Understand the Problem Determine the key variables Formulate the variables Solve the formula Interpret the results Validate the findings Implement action THE O.R. METHOD

4 U is also for URGENT Late on Sunday evening –Sent: 06 February :04 Subject: URGENT: BRE options - mapping the regulatory management system –Andy - I've been given your name by Tera as someone who might be able to help us in BRE to redesign the framework we have put in place for managing regulation under the Coalition agreement. –We urgently need to map the system that now exists to understand the potential cause and effects of different parts of the system as it affects different actors (and there are lots....) By teatime on Monday –As we agreed I do think some soft systems analysis of where we are, where we want to get to and how we might do it would be enormously valuable. Any help you think you can offer would be much appreciated. Tuesday Dark O’Clock –OR Analyst on way to the options workshop

5 Introduction to BRE 5 Better Regulation Executive –How to apply less Resource What options are there? Which is better (or less worse)? Soft System Methodology (SSM) –A system transforms inputs into outputs –Do X by Y in order to achieve Z

6 SSM uses terms to prompt a view 6 CATWOE –Customers – Victims or beneficiaries of T –Actors – Those who would do T –Transformation – Conversion of inputs to outputs –Weltanschauung – World view making T meaningful –Owners – those who could stop T –Environment – Elements outside system taken as given Answers give Root definitions and Rich Pictures

7 CATWOE from Tuesday 7 Department Process per flowchart BRE Options 1.Gatekeeper 2.Consultant 3.Balanced overall reduction 4.Thought Leader 5.Transfer Functions Regulators Regulation Transformation Actors Customers

8 Changing the worldview 8 Society Citizens Economy Businesses Regulation Department Process per flowchart BRE Options 1.Gatekeeper 2.Consultant 3.Balanced overall reduction 4.Thought Leader 5.Transfer Functions Regulators Process per flowchart Regulation Owners Weltanschauung Environment Transformation Actors Customers OIOO

9 Next steps 9 Complete the picture and description –“To do X by Y in order to achieve Z” Identify Efficacy, Effectiveness and Efficiency –Which option generates greater value in the broader system? –What other options are there? Means –Discuss views 1:1 per CATWOE (30 minutes) –Develop Rich Pictures and Root Definitions –Review these next Thursday

10 Outline (as used) Progress since last week –Discuss views 1:1 per CATWOE (30 minutes) 6 so far 2 to go (30 minutes plus...) –Develop Rich Pictures and Root Definitions –Review these next Thursday - Now Use SSM to describe the System “As is”: –CATWOE Pictures and Definition –Overall System –Components – Sub-systems Describe how the System is wanted to be –Potential changes already becoming apparent Identify what do we have to do to move from where we are to where we want to be

11 Society Economy Regulation Departments EU Ministers BRE Regulators Domestic Regulation Regulation OIOO Events EU Transposition Regulation RPC Policy Committees RRC Options what to do Exhort Fund Legislate Interventions other than Regulation Citizens Businesses Civil Society Organisations Interested Parties System - As Is Side effects from interventions Enforcers LBRO Global Economy Systemic Risk Disasters Ideas : Something should be done Cabinet Pressures Political MediaPublic Choice BR Ministers

12 Players BRE policy BRE RMs BRUs AOGD Ministers Policy officials RRC BLCs RPC Members RPC Secretariat B C Perm Secs Economists Legal Comms Better RegIntermediariesOGDsAdvisors Officials Ministers Private OfficesSpAds Actors Owners Customers

13 Policy Makers Interest Groups Ministers Individuals ID Problem Consider Options Minister Impact Assessment RPC RRC Policy Committees Principles fit for purpose Impact Analysis is Fit for purpose Better Impact Assessment Consultation Clear Government response Clearance to draft Impact Assessment Primary Legislation HoC – HoL Clearance for amendments Final Impact Assessment Post Implementation Review 3-5 years on Statutory Instrument implemented Clearance process to consult Sun setting 7 years Duty to review Secondary Legislation Impact Assessment Voluntary Compulsion Alternatives Motivation to act Domestic Regulation

14 CATWOE Elements 14 Customers – Citizens and Businesses Actors – Central and Local Government, Enforcement organisations Transformation – Improvement of Society-Economy Weltanschauung – Policy can improve Society and Economy Owners – Ministers Environment – Machinery of Government, Policy levers, World Events

15 Root Definition BRE enables UK Government policy makers and deliverers across Government and Partner Organisations to create and enforce the right stock of the right regulations in order to improve the state of the Society and Economy of Britain.

16 Changing the System Fri 04/03/ :04- I hope that, in the coming weeks we can start to use Ian's work as a basis for discussion of various aspects of the regulatory system and how it's going to need to change. 8 March - Three Boards Workshop –What is good about the System as is? –What is bad about the System as is? –What are your brightest ideas for a better System? –Issues and Solutions

17 Society Economy Departments EU Ministers BRE Regulators Domestic Regulation Stock of Regulation OIOO Events EU Transposition Regulation RPC Policy Committees RRC Options what to do Exhort Fund Legislate Interventions other than Regulation Citizens Businesses Civil Society Organisations Interested Parties System - As Is FINAL Side effects from interventions Enforcers LBRO Global Economy Systemic Risk Disasters Ideas : Something should be done Cabinet Pressures Political MediaPublic Choice BR Ministers

18 Regulation Framework Main Gate Society Economy Departments EU Ministers BRE Regulators Domestic Regulation Regulation OIOO Events EU Transposition Regulation RPC Policy Committees RRC Options what to do Exhort Fund Legislate Interventions other than Regulation Citizens Businesses Civil Society Organisations Interested Parties System - As It could Be Side effects from interventions Enforcers LBRO Global Economy Systemic Risk Disasters Ideas : Something should be done Cabinet Pressures Political MediaPublic BR Ministers Initial Gate Choice

19 SSM – Lessons Indicated Technical –Insights rather than “Answers” For the Analyst –then and later For Decision Makers –Develop Common Language Top level system was accepted Lower level areas linked to it –Share Understanding Social –Benevolent Patronage enables OR Interest from DG and senior staff Close liaison with BRE Arrival of New Director, Selection and Restructuring OR enables change by illumination

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21 Departments Lead Department BRU Finance Impact Assessme nt Legal Domestic Regulation Choice Policy Team Economists BRE Cabinet Committee Clearance