The Pioneer interview with...Ashok Gupta
Ashok has led policy reviews using systems thinking to get whole systems to operate in customer-led ways, producing good results for the people they serve. One example was a review on behalf of the government into the defined benefit pension system, showing how they could often have a negative effect on people in other parts of the pension and economic system. Ashok is Chair of Financial Systems Thinking Innovation Centre (Finstic) and a Non-Exec, working only with customer-orientated organisations, such as eValue, a fast-growing digital financial advice and planning company that he is Chair of.
What does being a customer pioneer mean to you?
Being customer-led comes quite naturally to me, but I wouldn’t describe myself as customer-centric. For me, it’s about being people-centric: growing up in Northern Ireland during a period of strife made me want to do the best for people, and especially the least powerful in society. At the start of my career, I worked for a company that was trying to reinvent actuarial work, harnessing new computer technology to make the experience better for clients. It worked, with the business growing from sixty employees to a large global company. We were pioneers, driven by a single belief: How do we deliver for clients and help them solve their problems, without creating new ones? If you do that well, then it provides the basis for a great business.
What does it take to become and remain a customer pioneer?
What I’ve learned more recently after stints building businesses and now as a NED is that it’s difficult to deliver what you want to for customers if the system – whether the company or the ecosystem within which companies operate – doesn’t support what you’re trying to achieve. Many of our systems in the UK are currently failing - healthcare, energy and finance - so there’s plenty of work needed in these areas.
I think you also have to to really care about people. I worked with someone who used to own Pizza Express, and his behaviour really brought to life the giant gap between where the finance industry (in which I spend most my time) is versus the hospitality sector. When we ate there, he picked up on the little things, like the time it took for the pizza to arrive, how hot it was, did it have enough toppings or how long it took to get us the bill. Even though he no longer owned it, after we left he still called the area manager and reported on our experience. That passion for your customers’ experience is inspiring – and necessary, because it’s hard work to do.
How do you ensure you have the right system in place to pioneer on behalf of customers?
Donella Meadows, doyenne of ‘systems thinking’ would say a system consists of three things: elements, linkages between elements, and purpose, being clear on the outcome the system is trying to achieve. This allows positive and negative feedback loops to develop, both of which can be helpful or damaging. For example, a positive loop is executive incentivisation: All companies believe their executives are above average and therefore pay them more than the average, which raises the average, and the pattern continues. Conversely, a negative loop is seen in drugs policy: reducing the supply on the street raises the price, which in turn causes more people to want to deal drugs, which increases supply.
How can organisations use systems thinking to their advantage?
If you understand the system, then you’re better placed to achieve your intended consequences rather than relying on decisions based on siloed thinking, potentially creating unhelpful unintended consequences. And if you build foresight into your system, then you’re less likely to succumb to emerging risks. These risks can often look like a ‘Black Swan’ once they’ve happened, but if you look at your system more widely, and understand the feedback loops, then you might see it coming. For example, you might not think that pubs are encroached upon by M&S food dine-in offer because the they exist in different industries and systems, but by looking more widely, you can see that they both fulfil the need to have food in the evening.
And which organisation or industries do you think would benefit from this type of thinking?
The Pensions and Investments industry is a great example of where systems thinking could benefit customers. Many of the pension regulations we have derive from the Robert Maxwell defrauding case: funds are often managed based upon the risk to the fund – without sufficient consideration of the risk to the individual and of providing them with the best pension – and regulations are too often designed to prevent that failure rather than to optimize success for the customer.
Ironically, the Maxwell case wasn’t actually a system failure, yet the resulting regulations impacted the entire operation of the pensions system. These regulations now inhibit our ability to deliver the best pensions for customers, create group think, and lead to behaviours which can in turn lead to systemic failures. A study we did in 2017 determined that 3 million members of ‘defined benefit’ schemes had only a 50% likelihood of getting their pension paid in full. We need to do better for people.
Why isn’t systems thinking more widely adopted?
In China, systems thinking is more readily used, perhaps because of a lesser belief in the power of markets. We, on the other hand, believe that free markets are the best way to deliver for customers, but our markets aren’t as free as they are often imagined, as they are inevitably underpinned by regulation.
It's easy to be focused on your industry and regulations and therefore fail to capture wider thinking and disciplines. To be able to design or think about systems more widely, you need to see the world from a broad perspective. It doesn’t create headlines yet, but the fact that concerns over things like climate change are rising means that we will see more systems thinking, given the number of elements involved.