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Systems Approaches
to Public Sector
Challenges
WORKING WITH CHANGE
This work is published under the responsibility of the Secretary-General of the OECD. The
opinions expressed and arguments employed herein do not necessarily reflect the official
views of OECD member countries.
This document and any map included herein are without prejudice to the status of or
sovereignty over any territory, to the delimitation of international frontiers and boundaries
and to the name of any territory, city or area.
Please cite this publication as:
OECD (2017), Systems Approaches to Public Sector Challenges: Working with Change, OECD Publishing,
Paris.
http://dx.doi.org/10.1787/9789264279865-en
ISBN 978-92-64-27985-8 (print)
ISBN 978-92-64-27986-5 (PDF)
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3
PREFACE –
Preface
Complexity is a core feature of most policy issues today; their components are
interrelated in multiple, hard-to-define ways. Yet, governments are ill equipped to deal
with complex problems. Increasing automation of jobs creates new challenges for both
the education and welfare systems. Ensuring a high-quality, active life for an ageing
population puts pressure on the labour market, but also requires new ways of providing
medical and social care. Climate change, obesity, radicalisation of social behaviours,
income inequality and poverty are all challenges where causes and effects are blurred. No
single public sector institution – from a solitary city to the central government – can
provide adequate answers alone.
In a context of complexity and uncertainty, traditional analytical tools and problem-
solving methods no longer work. Similarly, traditional approaches to public sector reform
have not delivered the expected results, reflecting poor design and weak stakeholder
participation, sectoral rather than whole-of-government initiatives, and inadequate
evaluation.
These disappointing results have prompted government leaders across the world to
ask: how do we reform differently? In particular, how do we manage increasing
complexity and uncertainty? How do we deliver public services that adapt dynamically to
produce viable solutions? Recognition of the “complexity gap” (the gap between the
problems faced by institutions and their capacity to tackle them) has led to growing
interest in systems thinking and other systems approaches such as design thinking.
A “system” in this context can be defined as elements linked together by dynamics
that produce an effect, create a whole new system or influence its elements. Changing the
dynamics of a well-established and complex system requires not only a new way of
examining problems, but also bold decision making that fundamentally challenges public
sector institutions. This entails: 1) putting desired outcomes first instead of institutional
interests and resource control; 2) promoting value-based decisions (instead of simply
regulating) to allow individual organisations to set their own processes to achieve shared
goals; and 3) designing functions and organisations around users – not government.
Governments are struggling with adapting their policy-making approaches to account
for complex system dynamics when tackling public challenges. Traditionally, public
policy makers have addressed social problems through discrete interventions layered on
top of one the other, building on a “cause and effect” relationship. However, these
interventions may shift consequences from one part of the system to another, or simply
address symptoms while ignoring causes.
Governments are at a crossroads: much of their success in dealing with complex
public challenges will rely on how public systems and policies are shaped. By calling for
more holistic policy approaches that look at the whole system rather than the separate
parts; that value outcomes over processes; and that embrace a variety of voices and inputs
instead of self-interest, systems approaches have the potential to fundamentally transform
SYSTEMS APPROACHES TO PUBLIC SECTOR CHALLENGES: WORKING WITH CHANGE © OECD 2017
4
– PREFACE
the policy-making process, allowing policy makers to focus on areas where change can
have the greatest impact.
This report produced by the OECD Observatory of Public Sector Innovation (part of
the Public Governance Directorate) explores how systems approaches can be used in the
public sector to solve complex or “wicked” problems such as child abuse and domestic
violence. Through the analysis of case studies, it describes how systems approaches can
make public services more effective and resilient. The report contributes to the ongoing
work of the OECD on exploring new ways of approaching public policy design and
implementation, thus creating the foundations for stronger and more inclusive growth.
The report explores the theory and practice behind the use of systems approaches in
tackling public challenges. The first chapter addresses the need for systems thinking in
the public sector, its theoretical underpinnings and its (rare) use. The second chapter
identifies a set of tactics (people and place, dwelling, connecting, framing, designing,
prototyping, stewarding and evaluating) that government agencies can deploy either
unilaterally or with partners to promote systems change. The third chapter provides an in-
depth examination of examples of systemic change in preventing domestic violence
(Iceland), protecting children (the Netherlands), regulating the sharing economy (Canada)
and designing a policy framework for conducting experiments in government (Finland).
This report is an open invitation to policy makers to reflect on the systemic nature of
most public sector challenges and consider how systems approaches – such as those based
on integrated interventions, stakeholder engagement and reverse process engineering –
can help achieve better outcomes for all.
Rolf Atler
Director for Public Governance, OECD
SYSTEMS APPROACHES TO PUBLIC SECTOR CHALLENGES: WORKING WITH CHANGE © OECD 2017
5
ACKNOWLEDGEMENTS –
ACKNOWLEDGEMENTS
This report was prepared by the Observatory of Public Sector Innovation in the Public
Sector Reform Division of the Governance Directorate of the OECD. The Observatory of
Public Sector Innovation collects and analyses examples and shared experiences of public
sector innovation to provide practical advice to countries on how to make innovation
work. This project has received funding from the European Union's Horizon 2020
research and innovation programme under grant agreement No 671526.
The report has been prepared by Justin W. Cook (Senior Lead for Strategy at the
Finnish Innovation Fund, SITRA and Member of Rhode Island School of Design) and
Piret Tõnurist (Policy Analyst, Observatory of Public Sector Innovation, OECD) under
the coordination of Marco Daglio (Senior Project Manager, Observatory of Public Sector
Innovation, OECD).
The report resulted from the close cooperation with case owners, whose work was
covered in the report. Special thanks to Joeri van den Steenhoven, Idil Burale, Mikko
Annala, Alda Hrönn Jóhannsdóttir, Marta Kristín Hreiðarsdóttir and Marc Dinkgreve,
who opened their doors to the OECD research team, and to the numerous people who
participated in the interviews.
The full report benefited from comments provided by Edwin Lau, Marco Daglio,
Andrea Erdei, Alex Roberts, Matt Kerlogue, Cezary Gesikowski and Jamie Berryhill.
Dan Hill and Marco Steinberg help was essential in distilling key lessons from system
change practice during the event. Special thanks to all the experts who sent in their
comments. Marie-Claude Gohier, Liv Gaunt and Andrea Uhrhammer helped with the
preparation of the final publication. Bettina Huggard and Susan Rantalainen provided
administrative support.
Rolf Alter, Director of the Public Governance Directorate of the OECD and Luiz De
Mello, Deputy Director have been essential in spearheading and disseminating the work
in international policy making networks.
SYSTEMS APPROACHES TO PUBLIC SECTOR CHALLENGES: WORKING WITH CHANGE © OECD 2017
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TABLE OF CONTENTS –
Table of contents
Executive Summary ............................................................................................................................ 9
Chapter 1. Systems approaches in the public sector: From theory to practice ......................... 11
Introduction ..................................................................................................................................... 12
Managing complexity in the public sector: The case for systems approaches ................................ 14
Challenges of using systems approaches in the public sector ......................................................... 20
Systems approaches to public service delivery: Approaches and emerging evidence .................... 24
Notes ............................................................................................................................................... 32
References ....................................................................................................................................... 34
Chapter 2. Towards a framework for systems transformation ................................................... 41
New systems-based practices .......................................................................................................... 42
Strategies to manage complexity: What are the options for the public sector? ............................... 45
Working with relative precision ...................................................................................................... 49
Toward a systems transformation process ....................................................................................... 51
Notes ............................................................................................................................................... 63
References ....................................................................................................................................... 65
Chapter 3. System approaches in practice: Case studies ............................................................. 69
A systems approach to tackling domestic violence: The United Against Domestic
Violence programme (Iceland) ........................................................................................................ 70
Using system approaches in policy design: introducing experimental culture as a
high-level political goal (Finland) ................................................................................................... 79
A systems approach to reshaping an organisation’s purpose and working methods:
child protection services in the Netherlands .................................................................................... 92
Using systems approaches to regulate the sharing economy: Public transportation
in Toronto (Canada) ...................................................................................................................... 106
Notes ............................................................................................................................................. 118
References ..................................................................................................................................... 120
Conclusions ...................................................................................................................................... 123
Lessons from the case studies: Application of the systems transformation framework ................ 123
Challenges and opportunities in the public sector ......................................................................... 127
Annex 1. Definitions ...................................................................................................................... 131
Annex 2. A brief history of systems approaches ......................................................................... 133
Annex 3. Case study methodology ............................................................................................... 141
Annex 4. Interviews conducted for this study............................................................................. 143
SYSTEMS APPROACHES TO PUBLIC SECTOR CHALLENGES: WORKING WITH CHANGE © OECD 2017
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– TABLE OF CONTENTS
Figures
Figure 1.1. The Cynefin Framework ........................................................................................ 16
Figure 1.2. Development of systems thinking: towards methodological pluralism ................. 18
Figure 1.3. Complexity of the American strategy in Afghanistan ........................................... 18
Figure 1.4. The Vanguard Method ........................................................................................... 25
Figure 1.5. The development of Scotland’s National Performance Framework ...................... 31
Figure 2.1. The Ashby Space ................................................................................................... 47
Figure 2.2. Three complexity regimes ..................................................................................... 48
Figure 2.3. Picasso’s “Bull” lithographs, 1945 ........................................................................ 51
Figure 2.4. Double Diamond.................................................................................................... 54
Figure 2.5. The experimentation process ................................................................................. 56
Figure 3.1. Domestic violence cases, Suðurnes, 2010-2015 .................................................... 77
Figure 3.2. Together Against Domestic Violence evaluation .................................................. 79
Figure 3.3. Policy-making cycle .............................................................................................. 82
Figure 3.4. The experimental policy design model .................................................................. 83
Figure 3.5. Translating the approach to a public sector context: From the Double Diamond
to a table-based simulation .................................................................................... 84
Figure 3.6. The top-down, bottom-up approach of experimental culture ................................ 86
Figure 3.7. Taxonomy of experiments ..................................................................................... 86
Figure 3.8. Main features of the funding platform ................................................................... 87
Figure 3.9. The findings of the check phase ............................................................................ 97
Figure 3.10. The findings of the plan phase ............................................................................... 98
Figure 3.11. Examples of new facilities ................................................................................... 100
Figure 3.12. Acute child safety ................................................................................................ 101
Figure 3.13. Reduction in court measures ................................................................................ 103
Figure 3.14. MaRS Solutions Lab’s Periodic Table of Systems Change ................................. 111
Figure 3.15. Regulatory journeys of taxi drivers ..................................................................... 114
Figure 3.16. Regulatory journeys of hoteliers .......................................................................... 114
Figure A2.1. Meadows’ leverage points ................................................................................... 134
Figure A2.2. Les Robinson’s Adaptation of Meadows’ leverage points .................................. 135
Boxes
Box 1.1. Characteristics of wicked problems ....................................................................... 14
Box 1.2. Defining systems ................................................................................................... 17
Box 1.3. The case for system approaches: Ageing populations ........................................... 19
Box 1.4. Child protection in Greater Amsterdam ................................................................ 26
Box 1.5. The Munro Review of Child Protection ................................................................ 27
Box 1.6. Outcome-based approach to public service reform in Scotland ............................ 29
Box 2.1. CoLab’s systemic design field guide (Canada) ..................................................... 44
Box 2.2. The search for meaningful measurement in the Early Intervention Foundation ... 62
Box 3.1. A digital development platform for experimentation ............................................ 87
Box 3.2. Finnish basic income experiment .......................................................................... 89
Box 3.3. MaRS Solutions Lab: the road to the sharing economy ...................................... 109
Box A2.1. Using simulations for obesity, National Collaborative on Childhood Obesity
Research (USA) ................................................................................................... 135
Box A2.2. Towards methodological pluralism ..................................................................... 136
SYSTEMS APPROACHES TO PUBLIC SECTOR CHALLENGES: WORKING WITH CHANGE © OECD 2017
