1. 16/11/2018
16/11/2018
Understanding the Problems Applying Soft Systems Methodology (SSM) for Better Regulation Ian Mitchell BA BSc FORS Operational Research Unit Analytical Decision Support Economics Strategy & Better Regulation CORNWALLIS XVII - April 2012
The paper draws on recent work by the Operational Research Unit (ORU) within the Economic Strategy and Better Regulation Group at the Department of Business Innovation and Skills (BIS), using Peter Checkland’s Soft System Methodology.

2. 16/11/2018
Introduction
This presentation describes the application of Peter Checkland’s SSM to OR support to the Better Regulation Executive in early 2011.
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 assist the Management of Change.
It concludes on the value of OR to Efficiency and Managing Change through provision of insights and knowledge rather than answers and as a means to improve how clients and their stakeholders work together.

3. U is for UNDERSTAND Operational Research Method
16/11/2018
U is for UNDERSTAND
THE O.R. METHOD
Understand the Problem
Operational Research Method
University of Buckingham
Exam Question spotting
11% of Business Modelling
7 Steps – U-D-F-S-I-V-I
U- UNDERSTAND
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
Determine the key variables
Formulate the variables
Solve the formula
Interpret the results
I first encountered the OR Method CLICK as a sure fire 11% at the University of Buckingham’s business modelling course. The OR Method gives the context for the use of analytical techniques to provide a basis for decision. there are analytical steps, although shown in a list here they are more like Escher’s Staircases as they do feed into one another.
Determine the Key variables formulate then solve followed by application , interpreting the analysis validating it and seeing some action implemented. (Source: P. Harrison Operational Research Core Business Studies Mitchell Beazley 1983 pages )
Understand the Problem is the first step of this OR Method.
To do that some form of structure helps – Soft Systems Methodology (SSM )acted as a means for elicitation of domain knowledge to inform structural changes and a new view of a system, derived from many perspectives. In 1993 as an independent OR Consultant I used SSM to prompt work looking at the economic benefits from telecommunication satellites. This book was extremely useful then and again this year.
Validate the findings
Implement action

4. U is also for URGENT Late on Sunday evening By teatime on Monday
16/11/2018
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
The tasking was particularly fast. This brings out the importance of contact and support within the leadership of both supplier and client for OR.
Tera is the Director General of ESBR, Andy the Head of Profession for OR and the writer Alison was a senior manager in the BRE.

5. Introduction to BRE Better Regulation Executive
16/11/2018
16/11/2018 5
Introduction to BRE
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
I used PowerPoint a lot during this work.
The notes pages allowed pictures to be created and text to be combined.
A lot of the slides following are as they were when used for BRE.
Often used as a handout rather than projected/ This is one of them – at the BRE DD’s weekly meeting on Thursday I explained what I understood my task to be and introduced SSM’s terms. 5

6. SSM uses terms to prompt a view
16/11/2018
16/11/2018 6
SSM uses terms to prompt a view
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
This was the most useful slide during the next weeks
It gave a set of terms for us to use.
It acted as am Aide Memoire to initial discussions of a process of enquiry. 6

7. CATWOE from Tuesday BRE Transformation Customers Actors Regulation
16/11/2018
16/11/2018 7
CATWOE from Tuesday
Transformation
Department
Process per flowchart
BRE
Options
Gatekeeper
Consultant
Balanced overall reduction
Thought Leader
Transfer Functions
Regulators
Regulation
Customers
Based on Tuesday’s workshop the day after the exchange this seemed to me to be the worldview of a transformation that produces regulations … but ….there are gaps and other possibilities…
BRE had a range of 5 options for its future role (Gatekeeper Consultant Balanced overall reduction Thought Leader and the transfer of its functions). There appeared to be to be some implied Customers, Actors and a Transformation process the C A and T of CATWOE but not Weltanschauung Owners or Environment.
CAT from CAT WOE – the regulation process was illustrated by a BRE flowchart that the analyst had obtained by a literature review during the previous day.
Actors 7

8. Changing the worldview
16/11/2018
16/11/2018 8
Changing the worldview
Weltanschauung
Transformation
Customers
Society
Citizens
Economy
Businesses
Department
Process per flowchart
BRE
Options
Gatekeeper
Consultant
Balanced overall reduction
Thought Leader
Transfer Functions
Regulators
Process per flowchart
Regulation
Process per flowchart
Regulation
Regulation
Process per flowchart
if a new Weltanschauung is used – “Regulation is a means to enable better outcomes in economy and society.” then this changes the boundaries to be considered and so the form of the relative contribution of the 5 options for BRE – definitely an actor.
From the definition of OIOO it seems that the span of T – transformation has to reach to Citizens and Businesses – the victims and beneficiaries C .
There will be many different regulations going through the process – there are other policy levers to achieve effect on the effect
But that’s just my view. More important are your views, especially on the terms so far undiscussed ; Environment – what do we have to take as given and Owners – who can stop the system.
Actors
OIOO
Owners
Environment 8

9. Next steps Complete the picture and description Means
16/11/2018 9
Next steps
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
As briefed on the first Thursday the 30 minute slots took place over the next week – data gathering was largely complete less than 10 working days from the first request. Half Term intervened but there was also the drive on restructuring in BIS- Selection went into high gear in March.

10. Outline Progress since last week
16/11/2018
Outline
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
the Outline as used on 17 Feb

11. System - As Is Society Options Ideas: Events Economy Citizens OIOO
16/11/2018
16/11/2018
Global Economy
Systemic Risk Disasters
Pressures
Political
Media
Public
Side effects from interventions
Society
Economy
Interventions other than Regulation
Regulation
Options
what to do
Exhort
Fund
Legislate
Ideas:
Something should be done
Choice
Events
EU Transposition Regulation
Regulation
Regulation
Domestic Regulation
Citizens EU
OIOO
RPC
RRC
Interested
Parties
Removed CATWOE titles for clarity – this gave a high level view of the system – there were areas within it that their respective Actors described in more detail. For each of 8 participants I visited them talked through the high level view and then their areas of interest, feeding back the slides and notes to them for comment. This elicited a range of responses including one participant adding new items to my view of her area.
-C Customers – The broad view of the transformation below suggests that Citizens, Civil Sector Organisations and Businesses are the beneficiaries and victims.
-A Actors - BRE, RPC RRC Policy Committees, Regulators, LBRO,
–-T Ideas for improving sequences of events experienced by Customers => Customers experience Improved sequences of events
The Policy system in which BRE is an Actor is a Transformation of ideas for interventions some of which are regulations in order to lead to improved sequences of events in society for citizens and businesses.
-W Policy can improve Society by several means, one of which is the stock of regulations in effect.
- “Regulation is a means to enable better outcomes in economy and society.”
Owners – who can stop the T system. BRE Ministers?
Environment – what do we have to take as given: stock of regulation as at February 2011,
Gaps – a comprehensive assessment system eg Positive NPV of poultry density is blind to local profitability by agents so allows unviable options to proceed. Ministerial interests in solutioneering or misperceived idea eg primary legislation on wild animals in zoos – covering 37 animals in 4 circuses. Late cancellation generated avoidable costs and frustration of Householder Information Packs (Hips) from point of view of assessors.
Cabinet
BRE
Businesses
Policy Committees
Regulators
Ministers
Civil Society
Organisations
BR Ministers
Enforcers
LBRO
Departments 11

12. Players Actors Owners Customers Better Reg Intermediaries OGDs
16/11/2018
Actors
Owners
Customers
Better Reg
Intermediaries
OGDs
Advisors
BRE RMs
RPC Secretariat
Perm Secs
Comms
BRE policy
RPC Members
BLCs
Legal
Officials
BRUs
Economists
Policy officials
Private Offices
SpAds
Bringing in the views of the participants was helpful, especially when combined with SSM terms. This gives a view of people driving the Regulation scene- applying A O C from CATWOE was instructive –
Professor Patrick Blackett wrote 60 years ago that OR’s successes often arise from the discovery of problems which had not hitherto been recognised as significant.” p5 ORQ I 1 v 1 March 1950
Players – If the System is a means to effect policy changes to citizens, civil society organisations and Businesses there are no Customers here.
Owners of the broader system – those who can stop it- may be actors within it. The Ministers are key owners in this sense although they are also Actors. Better Regulation Ministers are closer to Owners per SSM but are also Actors within their own Departments. A
OGD Ministers
Ministers B
RRC C

13. Departments 16/11/2018 Clearance Choice
Domestic Regulation
Lead
Department
Cabinet Committee
Policy Team
Legal
BRU
BRE
Within Departments Policy Teams in conjunction with Better Regulation Units (BRUs) design the regulation, using finance and legal advice from their own departments.
Impact Assessments come from Economists, within the lead department.
Note the high level black arrow giving context for this lower level view.
Finance
Impact Assessment
Economists

14. Domestic Regulation RPC RRC Policy Committees Policy Makers
16/11/2018
Domestic Regulation
RPC
Interest Groups
Ministers
Individuals
RRC
Impact Assessment
Impact Analysis is Fit for purpose
ID Problem Consider Options
Policy Makers
Clearance process to consult
Policy Committees
Minister
Voluntary Compulsion
Alternatives
Motivation to act
Principles fit for purpose
Better
Impact Assessment
Consultation
Clear Government response
Statutory Instrument
implemented
Final Impact Assessment
Secondary Legislation
Primary Legislation HoC – HoL
Impact Assessment
This shows the process of policy development via Domestic regulation. The whole process is represented by a single arrow on the high level view.
Interest Groups, Ministers and/or individuals influence and/or direct policy makers to identify a problem that they are concerned about. They may have some alternative ways ahead in mind, with a varying motivation from internal voluntary to compulsion.
The Policy Makers consider the problem and options. If regulation emerges as the preferred option an Impact Assessment is conducted whilst the owning minister initiates the clearance process to consult. The RPC has to approve the Impact Assessment as Fit for purpose to the RRC so that the Policy Committee can be assured that the principles of the regulation are fit for purpose. This is a key Decision Point, represented by the star. It is often the point at which the proposed regulation becomes visible across government.
Consultation and a better impact assessment then take place.
The Government clears the response to this prior to clearance to draft. The draft has an impact Assessment. Primary Legislation passes through the Houses of Commons and Lords with any number of iterations for amendments, which have their own clearance. The result is subject to a final Impact assessment as is Secondary legislation. The resulting Statutory Instrument is implemented with a sun setting requirement after 7 years. There is therefore a long gap between the initial choice of regulation as a policy lever and its implementation.
Clearance to draft
Impact Assessment
Clearance for amendments
Sun setting
7 years
Post Implementation Review
3-5 years on
Duty to review 14

15. European Transposition
16/11/2018
EU Transposition Regulation
EU Transposition Regulation
EP Council
Concept
Regulation
1-2 years
1-2 years
1-2 years
SCOPE OF INFLUENCE ON POLICY
EFFORT REQUIRED
Regulation requiring transposition into UK Regulation stock from Europe has been formulated with limited participation. It becomes visible through the Cabinet Office list of EU and Global Issues (EGIS) by which time there is far less scope for the UK to influence the policy. The Effort required lies manly in the transition which is carried out by Departments in conjunction with BRE.
There is very little intelligence on what EU policies are being conceived limiting the scope for the UK to shape these. By the time the Proposal is formulated the decision point for means other than regulation has passed.
There seems to be benefit in developing a longer ranged intelligence picture of potential European sourced policies likely to lead to regulation or overall.
Investment Appraisals run by the EU differ materially from those conducted for domestic policy development.
The fundamental problems remain a trade off between Quality, Speed and Cost.
EU and Global Issues
Proposal EU
EU Council
Department
UK Rep
Cab O
BRE

16. Regulation Stock Stock CASE LAW Citizens OIOO 16/11/2018 Sun setting
Alternatives
Tax- Spend-Persuade
Sun setting
7 years
ID Problem Consider Options
Stock
Regulation
EU Transposition Regulation
Voluntary Compulsion
Motivation to act
Post Implementation Review
3-5 years on
Impact Assessment
Domestic Regulation
CASE LAW EU
No 10
BR Ministers
HMT
RRC
OGD Ministers
SpAds
Policy Committees
Departments
Officials
BRUs
Policy Teams
DECC
DEFRA
CLG
DfT
DWP
BIS
RPC
Interest Groups
Ministers
Individuals
Departments work in parallel, and sometimes in silos, generating regulation and other policy levers of spending or persuasion. Tax is under direct control of Treasury.
Incentives to initiate regulation are detached by time from the costs in bringing the regulation into being and applying it. The worlsview is that through Policy one can make an intervention to change the way that the whole system behaves and so can change the system. The desire to “poke” a situation and to be seen to poke it. It also assumes that predictable consequences follow any intervention and often that these consequences are simple and linear. Reality may be otherwise.
The implied need is for a means to assess the combined effects of multiple interventions – “the sum of all pokes” – in order to adjust any new intervention.
There is no single cross-cutting view of the amounts of regulation or the “Balance of Policy” planned or in effect.
The Queens Speech summarises Primary legislation which is then timetabled by the Cabinet Office as the legislative programme.
Secondary legislation (Statutory Instruments)
Post Implementation Review may be a means to provide a dis-incentive to bad regulation but takes place ten some years after a regulation was set in motion so is unlikely to directly impact on the policy makers involved, who are likely to have moved on from their posts.
The full stock of regulation in force has not been comprehensively logged – Some parts of it such as those regulations owned by BIS/BERR.DTI have been. Estimates that half of the current stock came from European sources may be correct.
One In One Out (OIOO) should become OOOI – Departments should remove ineffective regulations from the stock rather than only consider removal when seeking to introduce new regulations.
Case law based on judgements forms an additional source of requirements to the Acts.
Different departments cover separate parts of the law according to their interests:
BIS covers Company Consumer and Employment Law, eg Health and Safety 1974
The personalities of Ministers and the interests of their Policy Teams offer a range of combinations leading to different choices of policy or “pokes”.
There are 20 Departments and circa 100 Ministers.
BURDEN
Citizens
OIOO
Civil Society
Organisations
Business Sectors
BRE

17. Enforcement Citizens OIOO 16/11/2018 Regulation Regulation Regulation
EU Transposition Regulation
Cuts in Resources
Domestic Regulation
Regulation
Enforcement through regulators
Regulatory Enforcement and
Sanctions Act
Regulation
Primary Authority Scheme
Sunset Reviews
Co regulation
Professionalism
Business Regulators
Health & Safety Executive
Environment Agency
Food Standards Agency
Financial Services Agency
Office of Fair Trade
Programme of Inspection
Documentation
Citizens
Earned Recognition
Policy Committees
Civil Society
Organisations
BURDEN
Public Service Regulators
Care quality commission
HMI Prisons & Probation
HM Crown Prosecution Service Inspectorate
OFSTED
BURDEN
RRC
RPC
Business Sectors
Large
Farmers
Retailers
Small businesses
Care homes
Child minders
Nurseries
Chemists
OIOO
GROWTH
Enforcement is “The Use of a sanction to get an outcome”
The Regulation stock resulting from the Domestic Regulation and EU Transposition processes is enforced via Regulators, Public Sector and Local Enforcers principally via contact with businesses. Small Businesses find greater utility from this than the larger businesses which have their own internal controls.
Enforcement Officers from Local Authorities are developed through professional institutes. The Local Better Regulation Organisation (LBRO) is the main link to the Local Authorities from BRE. The Local Government Association (LGA) represents views from the Local Authorities.
The burden of enforcement, which OIOO seeks to reduce, is principally felt by Businesses. The work of enforcement relies on the Programme of Inspection and documentation. Schemes such as Earned Recognition and Primary Authority reduce the amount of effort required.
BRE
Enforcement Officers from 460
Local Authorities
County
District
Unitary
LBRO
LGA
& LGR
Chartered Institute of Environmental Health
Trading Standards Institute

18. CATWOE Elements Customers – Citizens and Businesses
16/11/2018
16/11/2018 18
CATWOE Elements
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
The answers that emerged from the 1:1 meetings. 18

19. 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.

20. Changing the System 8 March - Three Boards Workshop
16/11/2018
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
To bring the individual inquiries together I ran a “Three Boards” workshop. This uses three sheets with post-its to collect then cluster ideas. The bad board identifies issues.
These Issues prompt solutions. Putting Issues against Solutions in a table allows coverage to be seen. The outputs of this work fed into the action plan that BRE then implemented.
This workshop took the “System As Is” diagram, enlarged to poster-size, as a foundation for discussion.

21. System - As Is FINAL Society Options Ideas: Events Economy Citizens
16/11/2018
16/11/2018
Side effects from interventions
Global Economy
Systemic Risk Disasters
Pressures
Political
Media
Public
Society
Economy
Interventions other than Regulation
Stock of Regulation
Options
what to do
Exhort
Fund
Legislate
Ideas:
Something should be done
Choice
Events
EU Transposition Regulation
Domestic Regulation
Citizens EU
OIOO
RPC
RRC
Interested
Parties
Removed CATWOE
-C Customers – The broad view of the transformation below suggests that Citizens, Civil Sector Organisations and Businesses are the beneficiaries and victims.
-A Actors - BRE, RPC RRC Policy Committees, Regulators, LBRO,
–-T Ideas for improving sequences of events experienced by Customers => Customers experience Improved sequences of events
The Policy system in which BRE is an Actor is a Transformation of ideas for interventions some of which are regulations in order to lead to improved sequences of events in society for citizens and businesses.
-W Policy can improve Society by several means, one of which is the stock of regulations in effect.
- “Regulation is a means to enable better outcomes in economy and society.”
Owners – who can stop the T system. BRE Ministers?
Environment – what do we have to take as given: stock of regulation as at February 2011,
Gaps – a comprehensive assessment system eg Positive NPV of poultry density is blind to local profitability by agents so allows unviable options to proceed. Ministerial interests in solutioneering or misperceived idea eg primary legislation on wild animals in zoos – covering 37 animals in 4 circuses. Late cancellation generated avoidable costs and frustration of Householder Information Packs (Hips) from point of view of assessors.
Cabinet
BRE
Businesses
Policy Committees
Regulators
Ministers
Civil Society
Organisations
BR Ministers
Enforcers
LBRO
Departments 21

22. System - As It Should Be Society Events Ideas: Options Economy
16/11/2018
16/11/2018
Pressures
Political
Media
Public
Side effects from interventions
Global Economy
Systemic Risk Disasters
Society
Economy
Interventions other than Regulation
Main
Gate
Events
Initial
Gate
Ideas:
Something should be done
EU Transposition Regulation
Regulation
Options
what to do
Exhort
Fund
Legislate
Choice
Regulation
Domestic Regulation
Citizens
OIOO
Interested
Parties
Regulation Framework
Policy Committees
The System as it should be suggests a way ahead – it adds a cross government intelligence function to bring together the current component members.
This envisages BRE leading the development of a framework for the Policy Teams within departments allowing a collated view of their regulation stock and flow, with predicted impact of these changes to the regulations on the Society-Economy as well as the burden of administering. BRE is the framework provider and facilitator of the descriptive, predictive and prescriptive processes.
This changes the focus of effort from carrying regulations into stock to concentrating on the early stages of option formulation and selection. A longer range view of and influence on European policy selection is implied.
Through a consistent and comprehensive assessment of the impacts of all regulation a decision can be better reached on what regulations should be brought into existence. This also extends the use of Impact assessment so that experience from the events that occur in the Society so that the Framework becomes better informed on what works in real life. This informs subsequent decisions at the Initial and Main Gates where regulation is chosen then confirmed as the means to proceed
Businesses EU
Cabinet
RRC
Regulators
Civil Society
Organisations
Ministers
BR Ministers
RPC
Enforcers
LBRO
Departments
BRE 22

23. SSM – Lessons Indicated
Technical
Insights rather than “Answers”
For the Analyst
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