Course Handout - Systems Thinking: The Knowledge Structures and the Cognitive Processes
Copyright Notice: This material was written and published in Wales by Derek J. Smith (Chartered Engineer). It forms part of a multifile e-learning resource, and subject only to acknowledging Derek J. Smith's rights under international copyright law to be identified as author may be freely downloaded and printed off in single complete copies solely for the purposes of private study and/or review. Commercial exploitation rights are reserved. The remote hyperlinks have been selected for the academic appropriacy of their contents; they were free of offensive and litigious content when selected, and will be periodically checked to have remained so. Copyright © 2010, High Tower Consultants Limited.
First published online 08:00 BST 4th June 2004, Copyright Derek J. Smith (Chartered Engineer). This version [HT.1 - transfer of copyright] dated 18:00 14th January 2010
1 - What is "Systems Thinking"?
Readers unfamiliar with Control Theory in general, or with the concept of "feedback" in particular, should pre-read our e-paper on "Basics of Cybernetics".
This paper is about "systems thinking" and the rarity of that skill upon the planet. It is about how difficult it is for human beings to see "the big picture" in the world around them, or, having once seen that big picture, to figure out how this or that corner of it might successfully be influenced. It is thus a paper about the fragility of control; about what happens when things stubbornly (but in hindsight predictably) refuse to co-operate. Which means it is also a paper about brainpower, because it is our brains and their resident cognitive systems which are doing the controlling. Indeed, to cut a long story short, the explanation of control failure lies ultimately in the fact that we are cursed with a brain which regularly bites off more than it can chew, blunders on regardless until the damage has been done, and then blissfully denies all responsibility. And why should this be? Well in the final analysis, it is because our brain was bred for picking berries and having sex (although not necessarily in that order), and for fighting at the drop of a hat to defend those privileges. These time-proven skills have brought humankind many things (not least war, overpopulation, and runaway destitution), but in themselves have made no contribution whatsoever to the broader achievements of civilisation. They are survival skills in the rawest sense of that term. Top dog, "me-me-me", skills. Laws of the jungle, whose sole justification is to serve what Dawkins (1976) called "the selfish gene", which are inherited rather than learned, and which are certainly nothing to be proud of on any aesthetic or humanitarian level. More to the present point, they do not - to put it bluntly - require a tremendous amount of "joined up thinking", so that whenever joined up thinking is called for we mess up big time (witness the parade of disasters and debacles described in the various subfiles of our Disasters Database).
As for the technical and cultural achievements of civilisation, these are without exception delivered by systems, and the systems in question can all be accounted for historically by at most a couple of dozen flashes of individual inspiration, ever. For example, it was probably only one person who first invented the stone axe, or who found out how to control fire or fabricate shelter, or who fashioned the first pots and collected the first seeds. The rest of us, recognising a good thing when we saw it, simply imitated and improved. Our opening proposition, therefore, is that the quintessentially human skill is the ability to put somebody else's technology to work. We are awfully good at seeing something as a means to an end, and stringing together a sequence of behaviours accordingly. And this is where systems thinking comes in. Here are some suggestions as to the individual skills which might be involved .....
"Systems thinking. 1. a sensitivity to patterns, wholes, process, flow, environments and interactions. 2. the perception of, or attempt to articulate and model, the system dynamics that define and constrain systems. 3. pondering the mysterious connections between events and issues. 4. a rigorous, yet holistic way of describing the world. 5. a change in thinking." (Davison, 1996/2003 online)
Unfortunately, the equally quintessential human failing is to believe that we are running things well, even when there is no objective data to justify that belief (or, worse, despite objective data to the contrary). In Section 2, we propose our own seven-characteristic analysis of the true systems thinker, in Section 3 we present some indicative case material, and in Section 4 we cross-validate the one against the other.
2 - The Seven Marks of the True Systems Thinker
"With £5 million to spend, council leaders created a stylishly decorated state-of-the-art library. But there was one thing they neglected to budget for in their plans ... books." (The Daily Mail, 17th October 2003.)
In Section 1, we portrayed a world in which fundamental innovations were very few and far between, and in which the rest of us either (a) serviced the existing systems in some way, creatively making occasional non-fundamental innovations, or, more likely, (b) passively consumed whatever it was those systems provided or produced. Let us now define those who service systems as "systems thinkers", those (and they are numbered in their billions, remember) who merely consume the end product(s) as either "customers" or "end-users", and those who commission systems (for whatever reason, political or commercial) as "systems sponsors". We have no (printable) name for those who are paid to service systems, but who, by lack of aptitude, training, or application, allow them to go wrong. Our purpose is then to reflect upon what makes a systems thinker; to identify, for example, the skill(s) or state(s) of mind which might have prevented our anonymous library from being built without books. Is it common sense which was lacking? Or a scientific education? Or an eye for detail? Or a degree in local government administration? Or what? We propose seven candidate characteristics .....
Characteristic #1 - Systems Thinking as Adequate Perspective
Perhaps the most immediately striking characteristic of the true systems thinker is that s/he will be blessed with a fingertip feel for what is known as "systems boundary". This is the notional dividing line between a system [glossary] and its environment [glossary], and it is important because it defines which subsystems [glossary] are included in the system (and therefore need to be specified and controlled), and which are not (and therefore fall to someone else to specify and control). In practice, however, the criteria for boundary setting can often be vague and contradictory - so that the process can easily degenerate into an exercise in lassooing fish. In practice, you are regularly challenged whether to include such-and-such cluster of entities [glossary] in your system, or not. Boundary setting is thus the figure-ground issue [definition], borrowed from perceptual theory and applied instead to the jumble of entities and relations [glossary] making up the physical world. What you end up with is shown in Figure 1 .....
Figure 1 - Systems, Subsystems, Boundaries, and Interfaces: This diagram shows the system we have chosen to work with [bold yellow highlight left], set off against its environment - everything else, including a second system [faint yellow highlight right]. Both systems contain a number of subsystems [blue highlights] and entities [pink highlights]. Relations [curved black arrows] and interfaces [red arrows] link these components as necessary. Note (a) that there are both system-internal interfaces [dotted red lines] and system-external ones [solid red lines], and (b) that interfaces may only link subsystems, not loose entities nor whole systems [that is to say, each dotted or solid red line must clearly start and end at a blue subsystem, which, as a result, needs to be competent to service whatever it is which is being transmitted]. Note also that relations are not allowed to go beyond the system boundary, because it was required by our earlier definition of a system that no subset of entities "is unrelated to any other subset". And note, above all, that on another day or in a slightly different wind we might have placed the boundaries somewhere else altogether.
Developed from a black-and-white original in Kramer and de Smit (1977, p12; Figure 1). This graphic Copyright © 2004, Derek J. Smith.
Diagrams in the style of Figure 1 should be regarded as compulsory initial sketchings for any wannabe systems thinker, because they show which elements and subsystems fall within the system s/he is trying to get to grips with, and which ones fall outside it. This may sound something of a truism, nevertheless one of the best ways to be ineffective as a systems person is to take too "blinkered" a view of the world. Such systems people deliver a system-ground judgement of sorts, but (for whatever reason) they make it too cautiously. They see no far horizon, and when their systems start to misbehave this lack of perspective prevents them from seeing the totality of the problem, and thus solving it tidily. In Sections 3 and 4, we shall be noting some of the ways in which a shortage of Characteristic #1 can manifest itself.
Characteristic #2 - Systems Thinking as Awareness and Measurement of Flow
"For he who has not examined engines at work will never understand them clearly, or describe them correctly." (Tuckwell, 1869, in the first issue of Nature.)
The second characteristic of the true systems thinker shows itself the moment Characteristic #1 has succeeded in establishing a systems figure against its environmental background. It is the ability both qualitatively and quantitatively to identify what is flowing within a system, from where and to where, in what volumes, and thus what has to happen to it on the way. This, in turn, calls jointly (a) for the mental ability to see systems as in some way "circulatory" [for in their own way all systems are - the banking system, for example, "pumps" money around the economy in much the same way that the circulatory system pumps blood around the body or the National Grid distributes electricity], and (b) for the system itself to have been designed and built with lots of "dials" and "meters" - literal or figurative - so that its current operational status can be seen at a glance [for only then can bottlenecks be eased and leakages detected and rectified]. Skill (a), of course, is that of understanding the causal interaction of the parts of a complex mechanism; of grasping that which the 19th century physicist James Clerk Maxwell called "the particular go" of a system (Hutchinson, 1998/2004 online), and skill (b) involves a perhaps rather nerdish affection for possibly useful facts and figures .....
CASE: Modern life bombards us with possibly useful flow data. Here are some examples which we suspect are actually extremely significant, and which we would like to think are being closely monitored by someone somewhere who is in a position to do something about them .....
There is in fact a bewildering number of things worth counting. The following snippet comes specifically from the world of economics, but gives a good idea of the sort of sense which can sometimes lurk behind the apparently trivial .....
"Suggestions for other indicators [of national economic activity] included the 'crane count' (the number visible on the skyline), champagne sales (strong last year), and some of the usual suspects - the ease of getting a restaurant booking and taxi queues in the rain. [.....] Other imaginative suggestions included sales of personalised car numbers, dumped mattresses by the roadside (when people like that replace their bedding things must be looking up), Chinese takeaway prices, and waiting lists for car-park season tickets at commuter stations." (The Sunday Times, 30th May 2004.)
And this one relates to the so-called fight against terrorism, and shows just how unreliable a simple single measurement can be .....
"The Bush Administration faced deep embarrassment yesterday after having to admit that its claims for the 'success' of the war on terrorism were wrong. Instead of seeing terrorist attacks fall to an historic low last year, as trumpeted by the State Dwepartment this spring, officials conceded that the number of attacks had, in fact, risen sharply." (The Times, 12th June 2004.)
Our personal specialism is with flow models of the cognitive system, where at one level of analysis it is information which is flowing. Cognitive science has made some progress towards analysing mental information flow qualitatively [we recommend Ellis (1982) as one of the most thorough analyses, although it deals only with language processing], but quantitative analysis is fraught with technical difficulties, because the system has no end-to-end standard coding system. In Sections 3 and 4, we shall be noting some of the ways in which a shortage of Characteristic #2 can manifest itself.
Characteristic #3 - Systems Thinking as Sensitivity to Root Cause
"For want of a nail, the shoe was lost; For want of the shoe, the horse was lost; For want of the horse, the rider was lost; For want of the rider, the message was lost; For want of the message, the victory was lost; For want of the victory, the kingdom was lost; And all for the want of a nail." (Trad.)
The third characteristic of the true systems thinker is that s/he understands at a deep philosophical level how difficult it is to establish a truly valid link between a systems behaviour and its ultimate cause. The problem is that the obvious explanation is all too frequently not the best explanation. Our personal experience in commercial systems maintenance taught us to rely on nothing less than a full "root cause analysis" of every new problem. Fortunately, this can usually be carried out quite quickly using the "Method of the Five Whys", as outlined in our e-tutorial on "Systems Defects". The value of this method lies in the depth of analysis it promotes, and you need that depth because most problems only start to yield meaningful and substantial truths on the fourth or fifth pass [our header text explains why the kingdom was lost in five whys of this sort]. Here is how one of the gurus of the method, Robert B. Pojasek of Pojasek Associates, explains both why we need the tool, and how to use it .....
"Why do we want to understand what we need to know when we can just act on our intuition and solve the problem right away? [Because] once the root cause is identified, the solutions (alternatives) will easily follow. [.....] You use the tool by asking 'Why?' at least five times as you work through various levels of detail. Once it becomes difficult to respond to 'Why?' the probable cause of the problem may have been identified." (Pojasek, 2000/2004 online.)
Pojasek himself gives a detailed example [check it out], but you do not have to look very far for others. Dew (1996/2004 online) suggests that root cause analysis needs to be carried out differently depending on whether the analyst concerned is left- or right-brained. Left-brained individuals are likely to prefer "elaborately categorising possible causes and using strict rules for questioning". Right-brained individuals are more likely to prefer the five-whys or diagrammatic methods. Hard data on this interesting suggestion is, however, in short supply. In Sections 3 and 4, we shall be noting some of the ways in which a shortage of Characteristic #3 can manifest itself.
Characteristic #4 - Systems Thinking as Sensitivity to Quality of Evidence
Readers unfamiliar with the concepts of "statistical significance" and "p-value" should pre-read one of the several Internet introductions to hypothesis testing in scientific method [click for example]. Alternatively, use the [glossary] links as and when you come to them.
The fourth characteristic of the true systems thinker is that s/he relies upon evidence proportionately to its merit, trusting it only when it is totally safe to trust it, doubting it when it is wise to doubt it [Prime Ministers take note], and, when there is genuinely no alternative, doing without it altogether. Systems thinking therefore often involves decision making under conditions of uncertainty. Fortunately, all research scientists know how to cope with a little uncertainty - they give it a "p-value", and they interpret their findings as statistical inferences of greater or lesser likelihood rather than as out-and-out facts. We see the same diagnostic caution in modern medicine, where the emphasis is on "evidence-based practice" [glossary], and where the term "diagnosis" is now out of fashion in favour of "impression" [glossary]. By analogy, evidence-based systems thinking requires probabilistic thinking supported by hard empirical data.
So how do we get the necessary level of quality into our evidence? Well the general skill lies in knowing when and how a particular proposition does not reflect reality, and that requires a large number of specific "critical thinking" skills [glossary]. Two areas of particular need can be identified, namely (a) spotting fallacious argument [glossary], and (b) criticising research design [glossary]. Many classes of fallacy have been identified over the years, and are well covered in the "Think more Effectively" genre of paperbacks [example] and consultancies [example]. Here is a selection to whet the appetite .....
In Sections 3 and 4, we shall be noting some of the ways in which a shortage of Characteristic #4 can manifest itself.
Characteristic #5 - Systems Thinking as Hypothesis Testing
Readers unfamiliar with the concepts of "hypothesis testing" and "Type 1 error" should pre-read one of the several Internet introductions to hypothesis testing in scientific method [click for example]. Alternatively, use the [glossary] links as and when you come to them.
This is actually a good point at which to summarise our argument so far. The first four characteristics of our true systems thinker fit together as follows .....
Step 1 - Locate your system and its boundary
Step 2 - Monitor what moves within it, and grasp how the parts interact
Step 3 - Identify the root causes of failures .....
Step 4 - ..... given the available evidence
But in practice the "available evidence" is rarely enough. The fifth characteristic of the true systems thinker is therefore the ability to generate additional evidence of his/her own, thus extending the existing evidence base. This requires the skills of academic argument [glossary] in general, and of scientific inference [glossary] in particular. It also calls for perhaps the single most important scientific skill of all, namely that of "hypothesis testing" [glossary] .....
ASIDE: The skills of "hypothetico-deductive reasoning" not only represent the most advanced form of human cognition, namely "formal operational thought" as described by the Swiss epistemologist Jean Piaget [detail], but constitute the beating heart of the scientific method itself. Sadly, not all normal adults actually progress to this advanced stage, remaining "concrete" thinkers all their lives. This latter line of argument became popular in the late 1970s, thanks to papers by Long, McCrary, and Ackerman (1979) and Shute (1979). Estimates of the proportion of adults lacking this ability come out at 40% to 50% or so, increasing to 80% shortfall, or worse, in old age.
In Sections 3 and 4, we shall be noting some of the ways in which a shortage of Characteristic #5 can manifest itself.
Characteristic #6 - Systems Thinking as an Eye for Practicality
"The fact that a mill is automatic is one reason why it cannot have automatons to run it" (The Northwestern Miller, 1883; cited in Storck and Teague, 1952, p285).
The sixth characteristic of the true systems thinker is to be able to tell apart that which is likely to work from that which is not likely to work. The problem here is that of complexity, because the whole point about systems is that they have many parts, all somehow intermeshed. There therefore remains much to do between establishing what is going wrong with a system [Characteristics #1 and #2], and actually putting it right. Even when your fault analysis [Characteristics #3 and #4] and hypothesis testing [Characteristic #5] have fully identified the problem, you are still a long way from knowing what to do about it. The sixth characteristic of the true systems thinker is therefore to be able to reconcile requirement - that which your system sets out to do on behalf of its sponsor - with mechanism - how you are actually going to get it to do it.
ASIDE: Remember that most systems thinkers are employed. The requirements of their system are not theirs to specify; they are there to be delivered. Systems thinking, in other words, is a bought and sold commodity.
Unfortunately, when trying to get systems to behave, there is a major constraining law of nature at work, namely .....
Ashby's Law of Requisite Variety: This is a systems law which states in essence that a control system always has to be more complicated than the system it is controlling. In everyday language, you have to know a system's "wrinkles" before you can safely operate it, let alone attempt to take it to pieces, or try to repair or improve it. Ashby's Law is important because it is the explanation of choice in many of the scenarios listed in Section 3, because all too often the controllers of those failing systems did not understand them well enough to control them. Ashby's Law is also the law which - although he may not have known it at the time - must have been in the mind of our thoughtful miller when he spotted the Achilles heel of automation as long ago as 1883 [see header quotation].
As to the level of complexity at which Ashby's Law kicks in, this is determined by the controller's cognitive capacity. Bright controllers do better than dull ones, but both are eventually fallible. This is because systems thinkers have to develop comprehensive "mental models" of their respective systems, complete with all their ins and outs, and accurate in all respects. Only then can they hope to remain "one step ahead" of malfunctions when they occur. Or to put it another way, systems thinkers have to do with non-biological systems what neurologists, cardiologists, urologists, etc., do with the various subsystems of the body, constantly relating any eccentricity of behaviour to as short a list of possible underlying pathologies as they can. And the bigger the system, the more you have to know, until in the end you become unable to learn new facts fast enough, or recall old ones accurately enough. This cognitive limitation represents a systems equivalent of the Peter Principle [glossary] which we have claimed as Smith's Fifth Law [glossary], and which states that systems controllers rapidly advance to the level of systems complexity at which their systems competence starts to break down.
And as if all that were not bad enough, knowing what might and might not work with most systems also requires knowing what might and might not work with the people who staff them. Systems thinking therefore also demands the ability to predict human behaviour, and human behaviour can be infuriatingly unpredictable at times. Some idea of how humans help turn minor glitches into major disasters can be gained from the various sectors of our Disasters Database. In Sections 3 and 4, we shall be noting more of the ways in which a shortage of Characteristic #6 can manifest itself.
Characteristic #7 - Systems Thinking as an Eye for Excellence and Virtue
"The least initial deviation from the truth is multiplied later a thousand-fold" (Aristotle).
The seventh and final characteristic of the true systems thinker is to be able to deliver Characteristics #1 to #6 without making too many waves. It is about fitting systems smoothly into the world, and not immediately bringing about a whole new set of problems every time you solve an old one. It is about helping rather than hindering. It is about design elegance, and even, on occasions, about justice and truth. As a skill set, therefore, the essence of Characteristic #7 is a strange blend of forethought and ethical consistency, for which no rule book exists to tell you what to do. Suffice it for the moment to say that the most successful systems initiatives are those which get both the requirement and the mechanism right, for these are the systems which are graced with what today's marketing people call "the wow factor". Unfortunately, it is all too easy to have requirement without mechanism, and vice versa, with dramatic and often fatal results. Here are two illustrative scenarios, both from the ongoing Iraq War .....
CASE - GOOD MECHANISM, BAD
REQUIREMENT: Our first scenario
presents the deployment of a technically proficient killing machine in pursuit
of party political advantage as an example of good mechanism
chasing bad requirement. This scenario supposes that when Tony
Blair was first approached for British participation in the anti-Saddam
Coalition, he saw benefit first and foremost to his party. He saw the same sort
of jingoistic khaki dividend that had so benefited Margaret Thatcher at the
time of the Falklands War, and wanted some for himself; he sensed a
"Baghdad Bounce" (Socialism Today, June 2003 online). He was therefore a quick and eager ally to
CASE - GOOD REQUIREMENT, BAD
second scenario takes us forward a year, and takes a broader perspective. It
presents the deployment of the same killing machine in pursuit of a world of
peace and harmony as an example now of bad mechanism chasing good
requirement. The point, of course, is that the mechanism itself has not
changed in the slightest, merely that its technical proficiency must always be
judged according to some abstract ethical code. Our own view is that you cannot
kill for peace and destroy for harmony, for that is - to borrow a phrase from
When all is said and done, therefore, systems thinkers have to share with judges (but not, by definition, with lawyers or other forms of spin doctor) the quality of absolute objectivity. They have to be dispassionate. They have to be sensitive to the dynamics of confrontation without being on anyone's "side". They have to have no axe to grind. They have to want their system to be the best, not for what it can bring them by way of personal reward, but because it is the right thing to do. And, not surprisingly, this renders politically motivated systems decisions the most fallible of all [remember Smith's Second Law].
On the bright side, it is often possible to detect that Characteristic #7 is lacking in a person/system merely by staying on the look out for such give-away signs as hypocrisy and bare-faced inequity, the two surest indices of moral imbecility. Thus .....
"A union chief who has attacked the fat cat salaries of bosses is to get £80,000 a year for doing nothing, it emerged yesterday." (The Daily Mail, 17th May 2004.)
"A hit-and-run driver who killed a pedestrian was fined just £83 yesterday. Minutes later, the same magistrates fined another motorist more than £400 for crashing into a tree." (The Daily Mail, 3rd June 2004.)
In Sections 3 and 4, we shall be noting some of the ways in which a shortage of Characteristic #7 can manifest itself.
3 - Indicative Case Studies
In this section, we present a series of pertinent cases. These have been selected for overall effect and readers should note that the level of evidence [glossary] is usually pretty low-grade, often being little more than anecdote [glossary] or political sniping, and rarely carrying more weight than a single case study [glossary]. In an ideal world, much painstaking academic research would therefore need to be done before ever acting [which time, needless to say, never permits]. Here are the studies .....
3.1 System Study - E-Banking
a decade of experience, e-banking has so far [April 2004] been slow to take off
commercially, not least because it seems to attract as many e-fraudsters as
genuine e-customers. The ratio of e-fraudsters to e-customers is unknown, and
such data as are available are both operationally and stock market sensitive
and tend therefore to be carefully kept out of the headlines. To see the cyberattack e-mail used against National Westminster Bank
PLC on 8th December 2003, click here (the
NatWest banner logo and the contact details have been removed). This particular
technique is known in the trade as "phishing" [tell me more], and in
its original form this speculatively networked communication looked
superficially convincing. Needless to say, anybody naive enough to have replied
would have been handing their priceless security details to professional
criminals [horror stories]. Would
you have replied? The perpetrators are thought to be operating from
Keen to do its best, NatWest now instructs its customers as follows: "Please be on your guard against emails that request any of your security details. If you receive an email like this you should not respond and should contact our Online Banking Helpdesk immediately." This is a nice thought, but we tried that when we were cyberattacked, and - not being the only recipient - could not get through to said helpline for 48 hours! We have a clear enough requirement, in other words, but no mechanism to deliver it [so not many marks for Characteristic #6 on this occasion].
In systems terms, online banking systems are good examples of the dangers of setting one's systems boundaries too tightly [see Characteristic #1]. If we focus only on the computerised service offered by the banking house in question, complete with all its user identities and passwords and security facts and phrases, then to the uncritical eye we have a system which is ready for market and in which every system component will have been precisely engineered to an agreed Requirements Specification. But if the systems boundary has not been set wide enough, then that precision will not extend into the domain of the e-customer. The risk is then that the computerised service typically makes so many complex security demands on us as customers that we throw together mini-systems of our own to help us keep track of it all, and these mini-systems, of course, are likely to be far from professionally designed; in most cases, indeed, they rely on such devastatingly unsafe practices as writing down our passwords and PINs, the very parts of the system the fraudsters are trying to compromise. The banks promise that you will not personally suffer from such frauds [although the small print on this point actually requires you NOT to have written down your passwords and your PINs, so beware], but it needs pointing out that it is getting increasingly common for systems failings to push corporations over the edge [viz. Barings Bank (1995, £850 million) and BCCI (1991, £7 billion)], so in practice you can never be totally sure that your bank will still be there in the morning to compensate you.
UPDATE: "Fraudsters seeking to con online bank customers can buy internet addresses matching the names of high street banks for as little as £10, raising fears of a surge in phishing attacks. [.....] Yesterday, The Times bought the internet address www.barclaysbank.ws for just £37." (The Times, 20th November 2004.)
To stay with banking for a moment, it emerged recently that e-banking systems carry out fewer common-sense checks than conventional banking used to. Here is the story. On 22nd August 2003 a Mrs X used an e-banking service to make a payment of several hundred pounds to a salesman. Four days later the salesman complained at not having received the transfer, and when Mrs X investigated she discovered that she had miskeyed the payee's account number, and that a fourth party, Mr Y, had got the funds. The nightmare developed when Mrs X's bank attempted to recover the funds from Mr Y's bank, only to be informed that this was not possible because the money had already been spent. So she enquired why they had processed the transaction in the first place, when the payee's name and account number had not cross-matched, only be told that the clearing system does not actually carry out that cross-check. The payee's name is quite literally ignored, because "banking systems use sort code and account numbers only to process payments" (The Times, 21st February 2004). Fearing now that her original clerical error had been compounded by the broader system into an irretrievable loss, Mrs X then went to the banking industry's ombudsman, only to be further horrified to learn that the remedial system does not work either because it covers only the relationship between an individual and their own bank, not banks in general!
3.2 System Study - The Fox River Grove Rail Disaster, 1995
In this incident on 25th October 1995 [full story], a train sliced the back off a school bus which had failed to clear a railway level crossing due to a slow-to-change red traffic signal on the roadway ahead of it. Seven children died as the result of what turned out (in part, at least) to be a subtle illogicality in the traffic signal timings. Given that historical design factors had already placed the traffic signal such that the detained traffic queue would, when long enough, back up across the railway track, the engineers responsible had put a lot of effort over the years into getting the timings and signage right. Unfortunately, there were still combinations of circumstances when the traffic signals did not provide sufficient time for detained vehicles to clear the track [some reports assert that the pedestrian crossing phase of the roadway signalling had not been properly factored into the railway signal timing]. This is an academically interesting incident because it shows what can go wrong with split responsibility. Highway engineers had confirmed that there was nothing detectably wrong with the road signals, and railway engineers had confirmed that there was nothing wrong with the track signalling, but both had a "my box mentality" [see Characteristic #1 as regards the perils of myopic boundary setting] which on this occasion - when the two systems interacted and became a superordinate system - proved fatal. One of the NTSB's conclusions was accordingly that "had a coordinated program to ensure effective communication between transportation modes about all aspects of grade crossing safety been in operation, the ineffective communication between [the highways department] and the railroad might never have occurred" [Full NTSB briefing]. This case is a textbook example of the Law of Requisite Variety at work [see Characteristic #6] - the control system was not on this occasion more complicated than the systems being controlled, allowing them to develop some fatal dynamics of their own.
3.3 System Study - Multiple Registration to Vote
In order to demonstrate just how easy it was, a British newspaper reporter recently assumed the fictitious name of Gus Troobev (an anagram of Bogus Voter) and registered himself on 31 different local authority electoral registers "within just a few hours" (The Daily Mail, 7th February 2004). He also registered nine different bogus names with a 32nd council. Despite a growing national campaign to fight "identity theft" and the government's own proposals for "identity cards", only two councils made any significant attempt to confirm his identity. It was all easier, the reporter claimed, than registering with a video rental shop! The obvious step of cross-validating the individual lists against one of the major national databases - National Insurance Number, for example - is simply not in place, again thanks to a my box mentality and lack of management focus. As a result, the British democratic system - once a source of great national pride - remains a "system" in name alone; a loose superordination, whose lesser elements are poorly integrated and dysfunctional.
3.4 System Study - The Soham Murders, 2002
"He [Huntley] charmed, bullied, and lied his way through life" (The Guardian, 17th December 2003).
"..... ruthless and clever beyond belief" (The Sunday Times, 6th June 2004).
On 17th December 2003, school caretaker Ian Huntley was convicted of the murder on 4th August 2002 of the Soham schoolgirls Jessica Chapman and Holly Wells. This high-profile case usefully illustrates a number of tragic systems-level failures, perhaps the most telling of which is the difficulty delivering in fact something which begins life as a noble systems requirement [Characteristic #6 again]. The critical tensions were between the right under British law to be deemed innocent until proven guilty, and the accepted need for maximally responsive child protection legislation. Caught in the middle (and torn in both directions) were the data protection arrangements introduced by the Data Protection Act, 1998, and themselves still "bedding in". The child protection provisions were those authorised by the Police Act 1997. Included in this package of innovations was the formation of the Criminal Records Bureau (CRB), an official agency to hold relevant criminal records on potential sex offenders and issue "disclosure" reports to potential employers of persons "regularly caring for, training, supervising, or being in sole charge of persons aged under 18". The CRB disclosure service went live on 1st March 2002, and was soon notorious for the delays in processing disclosure requests.
ASIDE: This is a valuable
systems lesson in itself, and the CRB system is
already in the black
However, delays were not the only problem, because the definition of "relevant" had been left to individual interpretation, and in Huntley's case the CRB protections had totally failed to identify him as a potential risk. He had received a clean CRB report from the police authority in Humberside, his previous area of residence, despite the fact that Humberside police force had investigated Huntley on no less than 11 previous occasions for allegations of indecent assault and rape, including eight offences against underage females. They had, however, deemed it unlawful on data protection grounds to store details of allegations, suspicions, and dropped charges, on the grounds that such subjects are innocent until proven guilty. What society at large has to decide, therefore, is its requirement in this matter: does it want innocent until proven guilty and a pretty flimsy child protection system, or does it put protection first and sacrifice some civil rights. And it was, and is, a matter of supreme legislative dishonesty to have left it to the systems men to decide.
Nor did one hand really know what the other hand was doing. For example, Humberside PC Michael Harding recorded after one of the failed investigations that it was "quite clear that Huntley is a serial sex attacker and is at liberty to continue his activities" (The Daily Mail, 27th February 2004). He duly lodged a "serial sex attacker" warning on Huntley in 1999, totally unaware that a data weeding policy would come along a year later wiping such warnings from the system. Similarly, one of Huntley's previous employers - deputy headmaster Roger Davies - had informed Humberside social services that Huntley was having unlawful sex with two of his 15-year-old pupils. However, that information was not passed to the police (The Daily Mail, 2nd March 2004). And to top it all, Soham school failed to process the reference request for its new caretaker. Huntley provided five references at his interview in November 2001, but none was followed up, and, upon later investigation, they turned out to conceal what would have been give-away gaps in Huntley's employment history (The Times, 13th March 2004). Maxine Carr, meanwhile, Huntley's girlfriend and accessory, was freed on 12th May 2004, at an anticipated annual cost of "easily" £1 million a year for police protection.
ASIDE #1: We have some sympathy here with the right-wing press, who are aghast at this drain on the public purse, and not in the least mollified by the fact that we shall at least be saving the cost of the benefit frauds the social security system allowed Carr to perpetrate in the years prior to the murders (The Daily Mail, 11th May 2004). Nevertheless, we find more in common with the human rights journalist, Joan Smith, when she points out (The Times, 11th May 2004) that Carr should be better regarded as another of Huntley's victims, rather than as his accomplice. Smith is doing some good systems thinking here, for if you carry out a root cause analysis of Carr's offence you start to conclude that the poor woman has been a victim of defective systems all her life. For example, if the education system had done its job properly in the first place (she left school without any GCSEs, etc.), and not blithely churned out yet another characterless (and thus vulnerable and gullible) loser, the whole desperate affair might have been avoided.
ASIDE #2: Smith's most
resonant point takes us to the very heart of the mechanisms of human
communication, to the point at which ideas and emotions interact in the
milliseconds before we start looking for the words needed to express them. She
portrays Carr as having entered the adult world ill-equipped to cope with
"the techniques used by controlling men" such as Huntley. There is a
growing literature on this [see for example, the research publications of Patricia Petretic of the University
of Arkansas, and Margaret H. Launius of Mansfield
University, Pennsylvania], and the situation seems to be that assertiveness is
easier to define than implement. Our animal halves are tuned to dominance or
submissiveness, usually the latter, and possibly from before birth. So it is no
good merely advising battered women to "get out while you can because
these men will not change". Instead, the advice needs to be complemented
by some very hard skills, and not everyone succeeds in acquiring them.
We mention this because it is precisely Huntley's techniques of
near-sociopathic manipulation and coercion which another arch-manipulator used
to take us into, and keep us in, the
STOP PRESS: In the event, it only took hours for state functionaries to manage to squander the first of those millions. Things started to go downhill on 11th May, the day before Carr's release, when a briefcase full of the Home Office's plans for her new identity was stolen from the boot of a civil servant's car, "while she was celebrating a friend's birthday over lunch" (The Times, 14th May 2004). As if that were not enough, it then took "just six hours" for attentive residents in the chosen location to spot their new neighbour moving in (The Mail on Sunday, 16th May 2004). The Information Commissioner, meanwhile, "has ambitious plans to beef up the data protection legislation to give it more teeth" (The Computer Bulletin, May 2004): we point out, ever so humbly, that this is merely another good requirement, and that systems designers are still trying to work out how to implement the 1998 tranche of rules and regulations. The full text of the official Bichard Inquiry into the failure of child protection systems in this case is available online at click here.
3.5 System Study - Incompetence at its Most Lethal
Following several possibly avoidable deaths amongst the British military personnel involved in the current Iraq War, it transpired that ammunition and equipment shortages were commonplace, and that our own systems were often as lethal as the enemy's. Here is a selection of Iraq War stories with a systems angle .....
"Sergeant Steven Roberts,
33, was shot dead while trying to quell a riot in
In fact, the entire military commissioning set-up can be faulted .....
"An army inquiry into the
deaths of six British military policemen in
"The Ministry of Defence has paid nearly £280 million for helicopters that are incapable of being flown in cloudy weather. The eight advanced Chinook battlefield helicopters will not be ready for combat until 2007, the National Audit Office reported yesterday. The purchase of Chinook mark 3s was supposed to provide the services with a sophisticated night-and-day, all-weather troop-carrying helicopter. The original in-service date was 1998, but they were eventually delivered in 2001. However, mistakes made early in the programme effectively grounded the new aircraft for another six years. [.....] Responding to the NAO report, Edward Leigh, Chairman of the Commons Public Accounts Committee, described the purchase of the advanced Chinooks as 'one of the most incompetent procurements of all time'. He said: 'Thanks to a massively botched job, they cannot be flown when there is a cloud in the sky. Instead of desperately needed helicopters, the MoD might as well have bought eight turkeys. [The] eight Chinook mark 3s were bought for their extended range, night-vision sensors and navigation capability. However, as work progressed, 'it became evident that displays for the weather radar and other systems ..... would not fit [the] cockpit'. One solution, the NAO said, was to have a totally digitised cockpit, the option chosen by the Royal Netherlands Air Force. But the MoD could not afford it, so a 'hybrid solution' was chosen: putting some digital equipment into the cockpit, while keeping other older analogue systems. However [this] proved unworkable [and pilots now] have to fly the aircraft by looking out of the cockpit window for 'external reference points' and cannot rely on any of the flight displays." (The Times, 7th April 2004.)
"A £5 billion project to
build a new fighter jet for the Armed Forces has been thrown into chaos because
the aircraft is too heavy to land safely. The Joint Strike Fighter is supposed
to replace the Sea Harrier jump jet but major design flaws are expected to put
back the project and push up costs. If the problems cannot be solved, the Royal
Navy may have to redesign its two new aircraft carriers to cope with the plane.
[.....] The US-designed warplane is 3,300lb
overweight, meaning it can only land safely if it has used its full complement
of bombs and missiles and the fuel tanks are virtually empty. Otherwise, there
is a danger that the undercarriage will collapse as it touches down." (The
Daily Mail, 17th May 2004.) [The truth here can only be that there was no
British input into the requirements capture phase of this
"Efforts to save money on the RAF's £20billion Eurofighter Typhoon warplane by scrapping its powerful cannon have turned into a farce, it emerged yesterday. Four years ago ministers announced that to cut costs the aircraft would be built without its wing-mounted gun. The weapon, they insisted, was irrelevant to modern air combat. However the jet's computerised flight-controls meant the cannon had to be replaced by ballast of the same size and weight, to stop it becoming dangerously unbalanced. [Unfortunately,] the cheapest way to fit an object the same shape and weight as the cannon was to use ..... the cannon. So now it will be built into the hi-tech jets after all, but with no ammunition or firing mechanism." (The Daily Mail, 13th August 2004.)
..... and perhaps even beyond remedy .....
"The Armed Forces are being let down by 'woeful' delays in the delivery of vital equipment, the Commons Defence Committee said yesterday. A promise from the Government six years ago to buy essential kit 'cheaper, better, faster', under a policy called 'smart acquisition', had failed to deliver the goods. [.....] The [Ministry of Defence] had introduced the policy in 1998 to rid the department of embarrassing cost overruns and delays. But procurement continued to run overtime and over cost and the MPs feared that the failures would not stop despite attempts to abolish the bad old ways of procuring equipment. 'We are forced to conclude that our Armed Forces have been let down by the organisation tasked with equipping them,' the committee said. [.....] The key underlying cause of poor performance, the MPs said, was the MoD's failure to invest enough money and time to examine the risks of each project before starting to build." (The Times, 28th July 2004.)
The battlefield is also home to a succession of tragic "blue-on-blue" (or "friendly fire") incidents, all of which turn out after one or two "Whys?" to be down to systems errors of one sort or another. For a selection of stories, chosen more or less at random, click here, or here, or here.
The systems lessons in all the above will be obvious, and in the cases of the fair-weather Chinooks and Typhoons, and the overweight F35s, the average six-year-old could have done better [not a joke - six-year-olds do jigsaw puzzles, you see, and their cognitive systems are used to the notion of having bits that fit together; civil servants evidently do not]. Interested six-year-olds may apply to the MoD careers officer at click here, but quickly, please. It may or may not be causally related that British soldiers are in fact outnumbered by the army of civil servants who manage them (The Mail on Sunday, 2nd May 2004).
3.6 System Study - Incompetence in the House
On 19th May 2004, a disgruntled citizen wangled a place in the House of Commons public gallery, and, when the Prime Minister rose to speak, bombarded him with flour bombs, scoring a direct hit with one of them. This, considered in isolation, is a serious enough incident, because as commentators were quick to point out the flour bombs could just as easily have been anthrax or a nerve gas [a firearm would probably not have made it through the scanners outside]. What took analysts' attention, however, was the fact that the attack took place shortly after the installation of a new £600,000 security screen designed expressly to prevent direct action of this sort. However, it soon emerged that the protester in question had not been sitting behind the screen at all. And why? Because there have always been two grades of "public" in politicians' eyes, namely (a) the great unwashed, who get put behind the screen, and (b) VIP guests, who - on the grounds that they have been specially invited - get put in front of it. The flour bomber was - horror of horrors - in one of the VIP seats!
Investigations then revealed a masterly interaction between two systems. It turned out that the guest was not a VIP after all, had not actually been invited, and was not actually known to anyone. Instead, there appears to have grown up a black market in VIP invitations as prizes at charity auctions and the like. So on the one hand, taxpayers are paying (at least one of them against his better judgement) for a system to protect their elected representatives from the realities of the world, and on the other hand those self-same representatives are flogging off privilege seats literally to the highest bidder, with their respective parties pocketing the proceeds! It would, of course, be treasonous to suggest that Al Qaeda get along sharpish to one of these auctions and help put British taxpayers out of their misery.
3.7 System Study - Modern Corporate Fraud, I - Mis-Selling
There has been a veritable parade of atrocities against good corporate governance across the western economies over the last few years, but because the lesson is invariably the same we shall consider only the case of the British life assurance company, Equitable Life. The story here concerns the mis-selling of endowment policies, a type of life assurance product which takes a monthly premium and pays back a "sum assured", with or without "profits", after a predetermined period of tax-exempt investment (that, or prior demise) .....
ASIDE: We first heard of this particular financial product in the mid-1970s, when we were ourselves in the insurance industry. Endowments had always been big business amongst the well-endowed [sic], because they were tax efficient, and so life assurance companies had habitually paid themselves handsome commissions on each sale (typically £20 per £1,000 sum assured). It then occurred to the marketing boys that the product could also be used to service the mortgage market. Thus a without-profits endowment could be dated to mature at the end of the mortgage period, whereupon its maturity value could be used to settle the capital debt on the mortgage. This allowed the mortgagee, in the meantime, to make interest-only payments on the mortgage. However, if you were better off, and able to afford a bigger monthly investment, then you could opt for a with-profits version of the same arrangement. This not only paid off the mortgage at the end of the period but also gave you a lump sum - the profits element of the endowment - into the bargain. So far so good. Then somebody came up with the bright idea of deliberately under-assuring in the first instance, and using the aforementioned profits element to make up the difference. Granted, you would get no maturity lump sum in this case, but the premiums would have been that much smaller throughout the period of the contract. This scheme was heavily sold under the name "minimum-cost" endowment mortgage. The catch with the minimum-cost endowment, of course, is that if the profits eventually came in lower than had originally been estimated, there would be a shortfall at maturity, and that is exactly what happened when the world's stock markets plunged in late 2001.
The crash of 2001 was unfortunate enough for the individual policyholders, but it was equally unfortunate for Equitable once those irate policyholders started to compare notes on how they had been sold the product in the first instance. It turned out that in the majority of cases they had wanted a "repayment" mortgage, but had been persuaded to change their minds by the original salesforce. Moreover, since the cost of the minimum-cost endowment was about the same as the conventional mortgage, the only person who could possibly benefit was the salesman. The stories then cumulatively tell themselves .....
"Scottish High Court judge Lord Penrose's 818-page report into the crisis, ordered by the Government, found that 'the primary failing lay with Equitable Life's management, who operated a culture of 'manipulation and concealment'. [.....] Lord Penrose criticises the regulatory bodies responsible for monitoring Equitable, saying they 'failed policyholders'. He describes the Department of Trade and Industry and the Treasury - which regulated Equitable between 1998 and 1999 - as 'ill equipped', and the Government Actuaries Department - responsible before 1998 - as 'complacent'. [.....] Lord Penrose's most stinging criticisms were reserved for the Equitable board, which failed to get 'fully to grips' with the financial situation. He said the collective skills of its members were 'inadequate for the task'." (The Daily Mail, 9th March 2004.) "[A policyholder complained] 'I am totally disillusioned with the whole savings system - nobody trusts them, and justifiably so. The regulators did not regulate. What were all those civil servants being paid for? They did nothing.' [Another policyholder's] experience has left him a bitter man who holds the finance industry in disdain. 'The industry exists to serve itself and doesn't stop to think of the damage it inflicts on its customers,' he said. 'Added to this is the ineffectiveness of the regulator." (The Sunday Times, 14th March 2004.) "The judge identified [name], chief executive and actuary between 1992 and 1997, as one of the main architects of the firm's decline. He was 'autocratic', 'manipulative', and hid the true state of Equitable's finances from the rest of the board for years, said Penrose. The board also comes in for criticism. 'It had insufficient knowledge and skills [remember Characteristic #6] to prove an effective challenge to the executive in critical areas,' the report said." (The Sunday Times, 14th March 2004.) "Equitable Life investors were outraged yesterday as it emerged that the man at the heart of the crisis is enjoying a £150,000-a-year pension." (The Daily Mail, 10th March 2004.)
Needless to say, Equitable had not been dining alone at the trough of other people's life savings .....
"Money Mail asked 32 [insurance and unit trust companies] how much £50 a month saved for ten years into a 25-year unit-linked endowment is now worth. The figures provided assume the money - a total of £6,000 - has been invested in the companies' mainstream balanced managed funds. Twenty-five companies gave figures. Of those, only Provident Mutual has managed to keep that £6,000 in one piece. But, even then, it has grown by only a meagre £72 over ten years to £6,072. In the worst case, Guardian has managed to shrink £6,000 to £4,122. [.....] The reasons for the dreadful returns produced by the life insurance companies is two-fold: sky-high charges and lousy fund management. Endowments were designed to meet the needs of commission-hungry salesmen rather than the homebuyers relying on them to pay off their mortgages. The amount of commission handed over to salesmen is quite staggering. Often it amounted to the best part of the first two years' premiums ....." (The Daily Mail, 31st March 2004.) "A scathing report by MPs reveals that payouts on endowments will fall short by £40 billion, leaving many home owners struggling with huge debts. But the men who ran the insurance companies which sold the policies did not suffer. Typical of them was [name], the now retired managing director of Standard Life, who was one of four bosses singled out for criticism by the chairman of the Treasury Select Committee John McFall earlier this year. The Select Committee report says around 80 per cent of the 8.5 million endowment policies still in force are unlikely to pay off the mortgages for which they were taken out, with average shortfalls of £5,500. Mr McFall [identified] [names] as typical in an industry which 'consistently put itself ahead of the consumer'. They had enjoyed pay rises of up to 72 per cent during the three-year spell to 2002 in which the crisis emerged." (The Daily Express, 11th March 2004.)
Nor, indeed, are endowments the only savings product where the lack of effective regulation permits all sorts of dubious goings on .....
"The split-capital trusts
scandal has disintegrated into squabbling where only the lawyers win. Behind
closed doors in the City and in the gleaming towers of
And even the upright are not always perfectly vertical .....
"Profiteering banks stand accused of bamboozling customers with illegible small print and jargon. The confusion is such that three-quarters of credit card holders have no idea what APR - annual percentage rate - they are being charged." (The Daily Mail, 17th March 2004.)
3.8 System Study - Modern Corporate Fraud, II - Mis-Accounting
"Is there an honest man on Wall Street?" So ran the headline to a recent
exposé of corruption in the
The systems angle on this and every other successful scam is that sustained thievery requires expert concealment. You must cover your tracks [so we are reliably informed], deceiving both colleagues and auditors alike. Thieves, in other words, are expert systems thinkers, and techno-thieves doubly so. They are not immune from Ashby's Law as such, but the sophistication of their mis-control systems has by definition to exceed that of the system's legitimate controllers [see Smith's Sixth Law].
Most scams are relatively low-echelon affairs, going on without the direct collusion of higher management (the indirect collusion being merely their failure to have in place control systems capable of preventing it). Some, however, are engineered from the very top. Here are some of the juicier recent instances .....
"Britain's second largest
oil company admitted yesterday that it had repeatedly lied to shareholders
about the true state of its oil and gas stocks, as the company published a
damning report into the behaviour of its former
managers. [.....] Excerpts released from a 463-page report by Davis Polk &
"As three former
executives of Computer Associates pleaded guilty to securities fraud yesterday,
"As congress prepares for an intense round of questioning of Enron directors and officials, there is a growing suspicion that at the heart of the once-mighty energy trader was a financial hole. Evidence is accumulating that the Houston-based group, which boasted of being asset light, may also have been light on profitability at core operations." (The Financial Times, 19th March 2002.)
executives last December took a hammer to a computer at headquarters, one of
the most damning files under attack was 'Account 999'. The file survived. A
print-out of Account 999 and its Euros 8,056,131,103.09 debit is now one of
many bizarre centrepieces for charges being prepared
against former Parmalat managers and Deloitte
As to how we might ever hope to stop such things happening, we need to develop our Characteristic #2 systems thinking skills. We need to spot what is moving, where, and why. And [and here we speak for all honest citizens] we need to do this urgently, because in the final analysis the what will turn out to be our savings - the sweat off our brows, no less - whilst the where will turn out to be someone else's pocket.
3.9 System Study - The
as depressing is the state of the nation's immigration and asylum systems, that
loose agglomeration of formal acts and treaties, broad understandings, and
informal agreements, which governs such things as extradition arrangements,
support for international students, the nation's agreed immigration policy, and
the "place of safety" provisions offered to bona fide asylum seekers
as a demonstration of one's maturity as a society. For a long time, this
"system" worked smoothly enough, until one day word got out that
To begin with, accurate
estimates of the numbers of asylum seekers entering
It also does not help when the crime is organised, because, as we saw in Sections 3.7 and 3.8, crooks are invariably better systems thinkers than good honest civil servants. Thus .....
"When ten new nations
join the EU on Saturday, it will not just be their workers taking the
opportunity to flock to
“A thousand successful asylum applicants face a review of their cases after the doctor who gave evidence at their hearings admitted yesterday he was really a former taxi driver with no medical qualifications. [Name], a career fraudster who used a string of fake qualifications to set himself up as a leading clinician, was behind bars last night after conning more than £1.5 million from the government, leading charities, and patients.” (The Times, 18th January 2005.)
Another good scam is to arrange to come over faint at the opportune moment .....
pretending to be ill at airports to dodge checks, it has emerged. After being
taken to hospital, they are often abandoned by immigration officials. They are
then allowed to leave without any record being kept - after hours of expensive
and pointless treatment. The racket, in which people-trafficking gangs exploit
Britain's generous rules giving automatic emergency care on the NHS, has been revealed by hospital staff. [A] specialist
nurse at the accident and emergency department of
..... or to develop a convenient limp .....
"Disabled asylum seekers must be given priority over British citizens in the queue for council housing, the House of Lords ruled yesterday. The landmark decision by the Law Lords means would-be refugees with disabilities can demand support from a local authority - even if Britons would not qualify for the same help. [.....] The latest controversy centres on the case of Abdelaziz Muni, a 25-year-old Algerian who claimed housing from Lambeth borough council in London because he has one leg half the length of the other and requires prosthetics. Asylum seekers are normally housed and supported by the National Asylum Support Service (NASS), with the costs paid from central Treasury funds rather than local council taxpayers. But a legal loophole means disabled asylum seekers can still apply to their local authority under an old law, the 1948 National Assistance Act. [.....] Funding is at the centre of the row, and yesterday's judgement means local council taxpayers must pay to support disabled asylum seekers." (The Daily Mail, 27th January 2004.)
Needless to say, the monitoring and enforcement systems do not inspire a great deal of confidence .....
"In a whole year, one
boss is convicted over illegal workers [.....] despite an admission by
ministers that there are 'hundreds of thousands' of immigrants living and
working illegally in
..... and the knock-on effect into the related systems domains is nothing short of devastating .....
"Room 12 in Field House,
Fetter Lane, is the home of the Immigration Appeal Tribunal (IAT) and the heart of the asylum appeal industry which
costs the British taxpayer some £100 million each year" (The Daily Mail,
29th May 2004). "
"Immigrants and ethnic
minorities are to be given luxury detached homes valued at up to £400,000 each
at nominal rents. [.....] Almost £4 million of taxpayers' money has been spent
on building the 14 homes at The Glade, in Shirley, Croydon,
"An attempt to evict
thousands of asylum seekers who are about to lose their state benefits has
descended into a costly farce, it emerged yesterday. Up to 10,000 asylum
seekers become EU citizens on May 1 when eight Eastern European countries are
admitted to the
"The government is paying
to keep 25,000 homes empty for non-existent asylum-seekers, enough to house the
"The trial of three accused people-smugglers collapsed yesterday when prosecutors admitted that key witnesses could no longer be traced. [.....] The cost of the police investigation and trial is estimated to be £6.5m. [.....] The [defendants], themselves asylum-seekers, were accused of transferring huge sums of money to China [but] Judge Michael Burr ordered them to be acquitted after he was told several illegal immigrants police found at the Dragon Palace had since disappeared [rendering] their evidence inadmissible." (The Independent, 22nd June 2004.)
"Taxpayers could be saddled with a multi-million-pound bill to support European Union students at British universities, academics warn today. [.....] Experts say nearly all students from the ten countries due to become full EU members in May - where average earnings are between a tenth and a third of the UK's - would qualify for financial aid, landing Britain with a huge unforeseen bill. Currently EU students can apply for help paying tuition fees but are not eligible for student loans or maintenance grants. But a test case before the European Court of Justice could change that because] the Government has not budgeted for the millions it would have to pay out if the parental income test was applied to EU students." (The Daily Mail, 22nd March 2004.)
Immigration chaos has also pushed sex offenders' legislation beyond its workable limit. Here is an example of what is at stake when systems are not effectively interfaced .....
"Polish illegal immigrant
[name], 48, had came to
Even national security is clearly a thing of the past, especially where subcontracted labour is concerned .....
"Ulster Loyalist fanatic [name], who was jailed for taking part in a plot to smuggle guns to paramilitary killers, works for Laing O'Rourke, the Irish firm building the airport's new £2 billion passenger terminal. Astonishingly, airport operators BAA admitted last night that it has not carried out criminal record checks on [name] or any of the thousands of other construction staff at the terminal." (The Daily Express, 22nd March 2004.)
"An Iraqi asylum seeker
caused a major security scare after he was found in a Tube tunnel. The man was
found by a London Underground track patrol at 3am
near a key set of points on the Victoria Line between Seven Sisters and
And on E-Day [1st May 2004] itself .....
officers were ordered not to check EU passports [.....] as
The taxpayer, needless to say, is paying not just the benefits and the compensation, but the salaries and pensions of the civil servants in the benefits offices and at the ports, not to mention of the host of judges and lawyers who wrestle each other over obscure points of law, nor, above all, of the lawmakers the length and breadth of Westminster whose smug idiocy it was which allowed the situation to come about in the first place.
STOP PRESS: Starting in July 2004, those same smug idiots now propose "to use advertising, public relations, and the placement of 'positive' news stories about migrants on the BBC and other broadcasters" (The Sunday Times, 23rd May 2004). There has been no accompanying statement, however, as to enhancing the substantive systems.
3.10 System Study - The
now the stories are beginning to repeat themselves, with only the names and the
place-settings needing to be changed [in modern
"There are now more bosses than hospital consultants, and medical staff make up fewer than half the workforce. The startling figures fuelled fears that the billions being poured into the health service are going on bureaucracy and backroom staff." (The Daily Mail, 6th April 2004.) "Middle managers made the same complaint as chief executives. 'I am so busy reporting that I do not have time to get on with any work,' explained the head of treatment management systems in a hospital in the West Country. She went on: 'We are being performance managed to death.' Another wondered: 'What do they do with all this information? The feedback is zilch.'" (The Sunday Times, 8th February 2004.)
ASIDE: Technically speaking, the root cause problem here is the repeated failure to cost into proposed management initiatives the true cost of any "derived data"[glossary] such initiatives might require. To ask a junior manager for "some figures" may seem, at first glance, an innocent and legitimate request on your part, but in most cases the systems YOU have given your junior manager to work with ought already to have given you that information. If they have not, and especially if that junior manager's team is already fully committed, then your request is a serious operational distraction, and should either be withdrawn or properly scheduled. Education and Health are constantly beset by requests such as this.
"There is a huge gap between
what the government says is happening [in the NHS]
and the experience of the ordinary patient. This gap is caused by the inability
of hospital management to manage. Nobody from the chief executive down enjoys
the sort of authority taken for granted by any small business. Even your local
corner store can sack someone incompetent. Not the NHS
hospital. Political correctness, the power of the unions, and centrally set
targets take precedence over patients' wellbeing. Their care is almost
incidental. [.....] The forthright manager of a busy
"Ministers have spent more than £50 million on the organisation set up to save the NHS money on agency staff - with no evidence it has had any success, it emerged yesterday. Nearly four years after NHS Professionals was established to help short-staffed hospitals, the bill for temporary nurses and doctors has soared, reaching £1.6 billion last year. [.....] The aim of NHS Professionals was to fill temporary vacancies with NHS staff. But there are no records available to show the agency has made any savings [because] the cost savings of using NHS Professionals were accrued locally and there was currently no central collection of such information." (The Daily Mail, 17th April 2004.)
"Hospitals are removing patients' names and medical records from their beds because of fears they might be breaking the Data Protection Act. NHS managers - frantic to ensure they stick to confusing confidentiality laws - have replaced the names with letters identifying different beds and removed medical notes. But last night critics claimed the new working practices are confusing doctors, placing an extra burden on nursing staff, and could put patients at risk of receiving the wrong treatment." (The Mail on Sunday, 29th February 2004.)
astonishing story of the failed asylum seeker who will cost the Health Service
millions of pounds can be revealed today. [Name] was smuggled into the country
and should have left when his application for asylum was turned down. But the
29-year-old Iraqi stayed on illegally and was paralysed
in a horrific car crash that left him needing medical care for the rest of his
life. The NHS trust where he was registered with a GP
has had a £440,000 bill from the Department of Health for his treatment until
this March. [.....] It is costing £4,000 a week, or £208,000 a year, to pay for
specialist treatment that [name], a former policeman, requires." (The
Daily Mail, 21st January 2004.) <<AUTHOR'S
NOTE: During World War Two, a top-secret organisation
known as the Special Operations Executive (SOE) organised the parachuting of spies and saboteurs into
"In the long run, the NHS is doomed if people continue to pour into the
hospital is being forced to spend £6,000 a week on an illegal immigrant with
infectious TB who refuses to be treated. [.....] Tens of thousands of pounds in
taxpayers' money is being spent keeping him in a special isolation unit [to]
reduce the risk of infecting other people. And the hospital, the Hammersmith in
3.11 System Study - The Case of the Missing Weapons of Mass Destruction
The failure to locate the Iraqi WMD conceals a number of important systems lessons, thus .....
Characteristic #1: Not many marks for
systems thinking here. The data fit only a handful of explanatory scenarios,
and in every one of them the system being managed has been clearly boundaried at the
Characteristic #2: Not many marks for systems thinking here, either, with flow or flow management problems occurring at every level from the intelligence to the hardware. The WMD sensors and dials proved to be particularly unreliable, of course, and the cause-and-effect relationship between a nation's goodwill and its long-term influence has been ignored altogether!
Characteristics #3 to #5: No marks on any of these. The world does not know the true root cause of the Iraq War, nor - thanks to the ruthless efficiency of behind-closed-doors decision making - is it ever likely to find it out.
Characteristic #6: Nought out of ten for practicality, too, because this piece
of malicious (US) and crass (
Characteristic #7: And nought out of ten here, too, it being difficult to find a single system of values in the history of humankind whose definitions of excellence and virtue embrace the goings on at the Abu Ghraib prison. [For an interesting introduction to the issues of the "law of war", we recommend Krauss and Lacey 2002/2004 online.]
3.12 System Study - The Economic State of the Nation
in all, therefore, the systems which ought to be making
"Public sector efficiency
has collapsed since Labour came to power, according
to a leaked Government document. It suggests that productivity in health,
education, and other key areas is down by between 10 and 20 per cent. The figures
cast fresh doubts on the effectiveness of the record rise in public sector
spending being overseen by the Government. The Tories say much of the cash is
being swallowed up by burgeoning bureaucracy. Some experts estimate that as
much as £20 billion a year may be being wasted." (The Daily Mail,
26th April 2004.) Following a decade of rising taxes and deteriorating
services, the National Audit Office reported in December 2003 on the extent of
inefficiency and waste in the system of directing British taxpayers' money into
services. It concluded that money (and we are talking £421 billion a year here)
typically did not get where it was needed thanks to a combination of poor
systems and poor management of those systems. Thus: "Billions of pounds of
taxpayers' money is being wasted by Government departments because of poor
budget control [.....]. Just a one per cent efficiency improvement in the utilisation of the £1447 billion of resources allocated to
departments over the next three years would release just under £14.5 billion to
redeploy to frontline services'." (The Daily Express, 12th December
2003) "One in five decisions on who should get state benefits and how much
they should receive is wrong, a damning report from the public spending
watchdog will say today. The errors are causing hardship and uncertainty for
millions of vulnerable claimants as well as pouring money into the pockets of
those not entitled to it. Edward Leigh, MP, the Conservative chairman of the
Public Accounts Select Committee, said it was 'unacceptable' that six years
after the introduction of reforms designed to improve the accuracy of
decision-making, the error rate was still running at 20 per cent. The
credibility of the entire social security system, which pays out £100 billion of
benefits a year, was being undermined as a result, he added, with estimates of
the cost of fraud and error ranging from £3 billion to £7 billion. Mr. Leigh
blamed the complexity of the benefits system and poor management for the
failures, as well as the proliferation of inadequate computer systems, many of
which are run by the private sector companies that are not held to account for
their mistakes. 'The whole system is far too complex. The public certainly does
not understand it and the staff sometimes don't understand it. There are 33
different computer systems at the moment in the system for benefit payment,' he
said." (The Times, 25th March 2004.) Moreover, thanks to the
Private Finance Initiative (PFI), the government's
way to live now and pay three times as much later, everything costs nothing.
Thus: "Hey Presto ..... the cost of another hugely expensive PFI hospital has just found its way off the balance sheet
of the government - and off the balance sheet of the private consortium that
built it. The
Another burden on the taxpayer is the benefits system. This system, by its nature, has both friends and enemies, so again we must restrict our cases to those with a systems angle. Note the flow implications in the following .....
"He's at an age when most young men are happy to enjoy the single life with their friends. But 19-year-old [name] is already a father of four - and has another child on the way. Fortunately for the unemployed [name], money is not a problem when it comes to supporting his growing brood. Like his 23-year-old wife [name] he has not worked a day in his life but he is able to pick up well over £1,000 a month in benefits." (The Daily Mail, 6th August 2004.)
of the future will also, we suspect, have a lot to say about the debt culture
into which modern
"The British public are
borrowing, spending, and consuming as if there is no tomorrow: house price
increases are accelerating, mortgage advances are soaring, and borrowing on
plastic and via overdrafts continues to rise at spectacular rates. All this is
happening despite the Bank of England's best efforts to slow the process by
raising interest rates twice since November. We have become a nation - from the
Government down - which is living on the never-never. [.....] The latest
figures show that the total household debt still outstanding has reached 125
per cent of post-tax household income. This compares with just 90 per cent in
1998 ....." (The Daily Mail, 30th March 2004.) "
hit 10,271 in the fourth quarter, up 29 pc in a year says the DTI. This is the
These are not just some dusty old economic statistics, either, for they conceal real human tragedies .....
"Stephen Lewis, 37,
earned £22,000 a year and lived a modest family lifestyle. But he was swamped
by easy credit. By the time he died he had 19 cards [.....]. Last night his MP,
Labour's John Mann, promised to raise the tragedy
with Chancellor Gordon brown and demanded action to enforce more responsible
lending. He believes Mr. Lewis's story, while extreme, is reflected in
thousands of homes across
And Mr. Lewis is unlikely to be the only one .....
"Consumer groups and MPs
have warned of a personal debt crisis. Yesterday even the Council of Mortgage
Lenders warned against borrowing too much. Director Michael Coogan
said: 'In these circumstances, we would urge borrowers to think carefully about
how they would cope with higher interest rates.' Deirdre Hutton, chairman of
the National Consumer Council, accused banks of recklessly chucking cash at
Even the organisations who promise debt management advice are only in it - surprise, surprise - for the money (although in the following case the regulatory mechanisms seem to have worked for once) .....
"Two debt management companies that aggravated the financial problems suffered by 800 debt-laden people were yesterday wound up by the Department of Trade and Industry. The closure of [names] is the latest scandal to rock the controversial debt management company (DMC) sector, where firms act as intermediaries between heavily indebted individuals and their creditors. DMCs [.....] have been the subject of an Office of Fair Trading review, amid fears that vulnerable borrowers were being steered into lengthy repayment plans that levy high interest charges. [.....] DTI officials said the companies had exacerbated the financial problems of their clients [.....]. 'Although clients paid the companies between 12 and 44 per cent of their debts as a monthly management fee, there was no evidence of any debt management,' a DTI spokesman said." (The Times, 1st May 2004.)
4 - Joined Up Thinking
The case studies presented in Section 3 illustrate failings across the range of systems thinking skills, but the general picture is clear: we think we understand and control more than we actually do. And the world, eager to remind us of that fact, regularly bites back. With too tight a system boundary, for example, e-banking becomes more prone to cyber-attack rather than less, traffic signals become capable of causing rather than preventing fatalities, the lofty principles of a just and democratic society deteriorate into dribbling lunacy, nationally and internationally, and our politicians treat us like five-year-olds and get away with it.
So what does it take to build, implement, and operate systems which actually do what they are intended to do, and with wisdom and justice besides? Well, perhaps more than any other characteristic, systems thinkers do what is known in the vernacular as "joined up thinking", and in the summary table below we shall be suggesting where that joined up thinking is most urgently needed .....
Primary Deficit (s)
Characteristic #1 (My Box Mentality); Characteristic #6 (Ashby's Law).
Better customer interface design; better controls in general.
Fox River Grove
Characteristic #1 (My Box Mentality); Characteristic #6 (Ashby's Law).
Systems integration and superordinate thinking.
Multiple Registration to Vote
Characteristic #1 (My Box Mentality); Characteristic #6 (Ashby's Law).
Systems integration and superordinate thinking.; integration of government systems in general.
Soham 1 - Date protection vs child protection
Characteristic #1 (My Box Mentality); Characteristic #6 (Ashby's Law).
Systems integration and superordinate thinking.; integration of government systems in general.
Soham 2 - The witness protection aspects
Characteristic #1 (My Box Mentality); Characteristic #6 (Ashby's Law).
Systems integration and superordinate thinking.; integration of government systems in general.
Characteristic #1 (My Box Mentality); Characteristic #6 (Ashby's Law).
Systems integration and superordinate thinking.; integration of government systems in general.
Weapons of Mass Destruction
All Characteristics generally lacking, some totally so.
We wish we knew.
Insurance Mis-Selling and Corporate Mis-Accounting
The low-level scams indicate a primary deficit in Characteristic #2, and the high-level ones a deficit in Characteristic #7.
Better Characteristic #2 monitoring systems in both cases, although the first needs to operated internally to the organisation in question, and the second externally.
Immigration and Asylum
Characteristic #1 (My Box Mentality); Characteristic #6 (Ashby's Law).
Systems integration and superordinate thinking.
National Health Service - Derived Data
Systems integration and superordinate thinking. Less very expensive micro-management.
Note how frequently Characteristic #1 and the Law of Requisite Variety are implicated. This is actually only to be expected, because the one is largely a reaction to the other. Systems are down-boundaried to help keep their complexity within comprehension, and only later does the downside factor - ie. the consequent absence of the big picture - make itself felt.
So are the necessary improvements ever likely to happen, or are we doomed to suffer, and perhaps one day even die from, uncontrolled complexity? Well the early signs are certainly not promising, because both Ashby's Law and the Peter Principle are effectively fundamental laws of nature. This means that the laws which give us politicians sans virtue and public servants sans insight are as inescapable as the laws of gravity. Yet there is an occasional glimmer of hope, for all that. To start with, we could take a lesson from those who design control environments for a living, because they reassure us that systems thinking is an educable skill, given a certain minimum level of wit. Typical of this cutting edge research is MacLeod and Smeall (2001), who have studied best design practice in Royal Navy warships. They see effective command and control as requiring interaction between a "ship's bridge philosophy" and an "integrated platform management system" (IPMS), and it is worth looking at what is being proposed in case there are more general lessons to be learned. Here, briefly, is their proposed system architecture .....
"Unlike present naval control systems which tend to operate separate combat management, ship data management, machinery control, etc., the [IPMS] will use a central backbone architecture connected to all management systems via a common real time capable Local Area Network (LAN)." (MacLeod and Smeall, 2001, pp297-298.)
Changes to "ship's bridge technology" will help implement this new philosophy, ensuring that the electronics and the physical environment interact smoothly with the cognitive ergonomics of the personnel involved. Specifically, there will be a "lower level enclosed bridge" (the "command bridge" or "conning bridge"), supplemented by an "upper level cockpit" with 360º vision. Metaphorically, therefore, the proposed system is going out of its way to deliver adequate perspective - thus validating our Characteristic #1. The system will also provide reliable management information, thus helping to deliver Characteristics #2 to #6. Indeed, the only characteristic left up in the air is #7, the requirement for good mechanism to be deployed towards the common good, and we recognise that we are probably a long way from solving that particular problem.
So what we have in our ideal warship is what we need in the world at large. We need systems thinkers to help those who are not systems thinkers become systems thinkers. We also need computer systems which "know" what their human colleagues are thinking, thus ensuring the flow of accurate information to those ready and able to appreciate what it really means. And all in the interest of acceptable longer term visions. That is the requirement. May the mechanisms of implementation arrive soon, for we should all be deeply concerned by what will happen if they do not.
5 - References