Tuesday 29 September 2009

An example method for developing Southbeach Notation Models

Whilst Southbeach Notation itself does not impose any methodology, it is sometimes useful to see how other people have been using it. This example is one way of assessing a situation, brainstorming improvement options, and establishing action plans involving the need to consult large numbers of people. It includes a very simple Southbeach model of a manufacturing firm by way of illustration. Several iterations of the model are shown to demonstrate how a model may be built up through structured questioning. At each stage, the new agents that are added to the model are highlighted in yellow.

Four phases of activity are described below:


More details on example activities and pointers for each phase are provided below:


Model the situation:

Identify & interview stake holders

What are the priority areas?
What are the goals?
What’s helps achieve the goals?
What are these dependent on?
What’s counteracting the goals?
What are the real issues?
What causes those issues?
What’s the root cause?
What other resources do we have?

Assess the differences in perspective
Break differences of opinion down into their parts to get to the issues
Agree what’s important and why, remove the rest


Cost, harmful, and considered a risk, counteracts Profit, which is useful and the goal of the firm. We keep this model deliberately trivial for the purposes of illustration and gradually expand on it below.



Tips

Don’t ask leading questions
Your opinion is irrelevant; Mine their knowledge
Watch body language; Ask pointed questions
Differentiate opinion or hearsay from fact
Seek corroborating evidence

What is most important? What are the goals and risks?
What is most useful? What is most harmful?
What led/is still leading to this situation?
What resources are available? What are the enablers?
What are the risks, blockers & constraints? How can we mitigate against them?
What is the ideal outcome?


Elaborate and refine the model
Who else should be consulted?
- Specialists?
- Customers?
- Suppliers?
- External experts?

What’s missing from the model? (stand on each block and ask...)
- What else does this produce?
- What else produces this?
- What else does this counteract?
- What else counteracts this?
- What are the enablers and positive forces for change?
- What are the blockers and inhibitors?


Here we look at what produces the Cost and Profit and what is counteracting them. Sales leads to Manufacturing, which generates both Revenue and Cost. The revenue contributes to the profit and the Cost counteracts it. The Profit is also counteracted by Corporation Tax.



Tips
Keep asking what causes this until you get to the root cause
See all sides of the argument
Decompose contradictions into their parts
- “Cut costs” + “Increase marketing budget” = ???
- - Choose between one or the other?
- - Move budget from elsewhere?
- - Improve marketing efficiency?
Remove unnecessary information
Differentiate hobby horses from the real issues
E.g. absence of something is not necessarily an issue – it could be the interviewee leaping to conclusions about what the solution is…. “The problem is we have no leadership”… or is it just that this person does not agree with the leadership?


Brainstorm Improvement Options

Each of the questions below targets a different creativity centre in the brain, and focusses on a different part of the problem in the system. Consider each question carefully and make sure to answer them specifically (e.g. consider the harmful effects of pollution: protect from harm (e.g. using a mask to avoid inhaling pollution) is quite different from reduce harm (e.g. using unleaded fuel), is quite different from reduce ability to produce harm (e.g. reduce engine size or speed limit), is quite different from prevent harm (e.g. pedestrianize the town centre), is quite different to avoid harm (e.g. don't go into the town, stay in the country).

Ask what could improve the situation?
- What are the enablers for this?
- What are the blockers and how can we overcome them?
Ask what could worsen the situation?
- How could we prevent this?
- What are the risk mitigations for this?

Increase usefulness
- Introduce more kinds or quantities of useful agents into the system
- Find a way for useful agents to last longer or be more efficient or effective
- Change agents somehow so they are more useful or have more uses
- Make more use of...
- Increase the ability to produce the useful, Find other ways to produce the useful
- Go to where the useful agents already exist or are available
- Find another way to get the useful that is not affected by the harm
- Find another way to get the useful that has not harmful side effects
Decrease harm
- Prevent harmful agents from coming into existence
- Remove harmful agents altogether
- Change agents somehow to decrease their harmfulness
- Reduce the ability to produce harm
- Protect useful agents from harm
- Avoid the harm

Improve
- Find a way to increase the usefulness without increasing the harm
- Find another way to get the usefulness that does not produce the harm
- Separate the conflicting behaviours or tensions
- - in time / space / by perception / condition
- - Transition to super-system / sub-system / alternate system / inverse system
Step back and consider alternatives
Move to the next generation of the system
Remove the need for the system




Here the ideas for improving the system are shown as blue boxes. Blue boxes are not yet part of the system being diagnosed, but rather, represent the recommendations arising from the analysis of the Southbeach Model of the system. Here Offshoring is designed to counteract Cost, as is Reduced Stock, which is achieved by implementing a Build to Order process. Sales are increased through additional Marketing activity.



What are the risks?
What are the external influences that could adversely affect us?
In what way might we be harming or harmed by the environment?


Here we examine what additional external factors may affect the system. Competitors, considered harmful, counteract Revenue. Warranty Activity contributes to Cost which erodes Profit. This causal chain is saying that both Competitors and Warranty Activity indirectly erode Profit, so we had better do something about it.



What can we do about those risks?
Can any of those harmful factors be turned to use?
How can we work in better harmony with the environment?


Research & Development is recommended here to identify Potential (dotted box) new Products that could counteract Competitors who do not have comparable products, giving us some of the market share that was previously with competitors, as well as directly increase Revenue by winning new customers attracted by this new Product. Continually asking 'what other benefits does this have?' yields R&D tax rebates which increases Profit further. Warranty Activity is reduced by an Improved Quality Assurance process. Note that the new process and products will have their own costs, which will erode profit. These are not shown here as they are a necessary part of the idea evaluation - the business case for each blue activity block - they are not a part of the system we are improving until those blue blocks are implemented.



Tips
Brainstorm improvement options, in the above categories, or directed in some other way
Collect improvement ideas
Group ideas together to create better ideas

Run professionally facilitated workshops
Use independent third parties who are not blinkered by history and have no bias
Consult experts as needed, from within the firm and outside
Use the wisdom of crowds – run virtual idea management campaigns using services from firms such as imaginatik.com
Consider what others in the market are doing

Consider the implications, what could the unforeseen consequences of your actions be? How can you protect against them? How can you make your solution last?

Planning Tips
What are the consequences of taking these actions, Useful and Harmful? (Impact analysis)
What preparatory steps should be taken?
What resources are available?
What other activities could our plan integrate with or leverage?
Consider what change management activity will be needed
How can we ensure adoption of the new solution?
Communicate and Educate far and wide
How can we ensure realisation of the benefits?
Consider planning in a benefits realisation phase
Establish metrics
Identify roles and responsibilities
Establish governance and necessary support or operational processes

Saturday 19 September 2009

Can the UK manage investment in its energy infrastructure to avoid future brownouts?

(Our thanks to technology and policy futurologist, Chris Yapp, for the inspiration to publish this example). Here is an example of the use of a Southbeach grid, to clarify the factors that could lead to powere brownouts in the UK. The model clarifies actions and plans in the present, and possible futures.

If we decommission coal and nuclear power stations on current dates and energy consumption rises this will increase the possibility of brownouts on a scale similar to New England a few years ago. This can be alleviated by extending the lives of these power stations till new capacity comes on board. That reduces the brownout risk at one level. However extending the life of power stations beyond their design limits risks unplanned outages which are harder to deal with. What lowers the risk on one timescale raises risk of a different nature on a different timescale.

But a question remains? What can cause new capacity to come onboard?



To get more insight from this model, we have added an agent to represent the intention (potential) to plan and prepare for building new power production capability. This 'thought' can exist in the present, and it is what brings new capacity onboard in the future.

If it does not occur (not realised) then the brownouts will occur if the decommisioning continues. If the plans don't come about, they do not counteract the life extension projects, and the life extension will therefore continue, with the risk of unplanned outage risks.

Both extending the life of stations, and planning for new build, are useful (green), but are in some kind of opposition (tension). Both cannot fully 'live' together - and it is this tension we would explore for further analysis as indicated in the model below.



There are therefore three risks to power in the UK:

Risk1: If new capacity does not come on board in the future, brownouts will not be counteracted.

Risk2: The surplus life extension will lead to unplanned outages.

Risk3: Planning intentions in tension with extending the lives of the existing power stations.

Further analysis would proceed by interviewing experts around the three causes of uncertainty - centred on the focal point: planning. Over time, models would become more detailed, and more compelling, and the root causes of uncertainty would be revealed. These models could then suggest directions for changing the situation.