System redesign toward creating shared value

By Moein Khazaei, Mohammad Ramezani, Amin Padash and Dorien DeTombe

authors_moein-khazaei_mohammad-ramezani_amin-padash_dorien-detombe
1. Moein Khazaei (biography)
2. Mohammad Ramezani (biography)
3. Amin Padash (biography)
4. Dorien DeTombe (biography)

How can services that are provided to citizens be overhauled so that they will survive, be competitive and be fair (eg., accessible to all)? Is there a systematic way in which shared value can be created? By shared value we mean combining social and environmental interests with corporate interests.

We have developed a methodology that we call “System redesign toward creating shared value” or SYRCS. It comprises 4 stages, shown in the figure below. They are:

  1. emancipation and critical thinking
  2. problem structuring
  3. multi-criteria and quantitative decision-making
  4. creating shared value.

Our aims were to: discover critiques of the service, turn critiques into operational alternatives, find contradictory options, evaluate all alternatives through the lens of shared value, and, finally, make the most sustainable plan among the options found.

Stage 1: Emancipation and critical thinking

The system is first studied from a critical point of view to identify major fundamental problems. This involves using critical systems heuristics questionnaires to explore the depth of stakeholder views.

Critical systems heuristics involves exploring motivation (sense of purpose and value), power (who is in control and who is needed for success), knowledge (experience and expertise), and legitimacy (ensuring that all those affected are involved) in a system. It does this by using ‘is’ and ‘ought to be’ forms of questions, such as “Who is (ought to be) the beneficiary? That is, whose interests are (should be) served?”.

This allows exploration of existing problems related to the structure of the system.

The process involves first identifying and finding relevant stakeholders and then interviewing and exploring with them to discover opinions, which may be hidden and which can ultimately indicate the conflicts in and shortcomings of the system. Exploring both the current and ideal situation allows operational alternatives to be developed.

Stage 2: Problem Structuring

The operational alternatives or options are then examined using methods inspired by soft operational research and problem structuring methods, in our case specifically strategic choice approach and robustness analysis.

Strategic choice approach is a problem structuring method which aims to manage the uncertainty and deal with contradictions among decisions. The problem structure is built in a participatory manner, with the aid of facilitators.

Robustness analysis evaluates consequences over time of decisions that will implemented. The robustness of a decision is an operational measure of the flexibility which the commitment imposed by the decision will leave for useful future decision choices.

Stage 3: Multi-criteria and quantitative decision-making

After each stakeholder group has provided its views on the consequences in the robustness analysis, the responses are quantified. There are a variety of methods for achieving this and here we describe the best-worst method.

Best-worst method is a multi-criteria decision-making method that starts with the best and worst options identified for the operational alternatives. The best alternative is then rated against every other alternative using a pre-determined scale (in our case 1-9) and this process is then repeated for the worst alternative. These two sets of pair-wise comparisons provide weights for an optimisation process, which leads to a final decision.

Stage 4: Creating shared value (green path in the figure)

The creation of shared value is not usually systematically planned through a framework. However, in our methodology, by using common value criteria in decision making and using different stakeholders, a framework can be provided.

The key elements are that different stakeholders in the system under investigation are identified. Their opinions are solicited and resultant options evaluated for aiding the final decision.

khazaei_system-redesign-toward-creating-shared-value
Research decision areas and process of system redesign toward creating shared value (SYRCS) methodology (Khazaei et al., 2021). Abbreviations used: SCA is Strategic Choice Approach, RA is Robustness Analysis, MADM is Multi-Attribute Decision Making, CSV is Creating Shared Value.

Conclusion

We would be interested to hear from others about assisting businesses in linking social issues to their core competencies. It would also be interesting to hear from others who have combined methods from a variety of paradigms. In this regard, have you developed other ways to create shared value? Do you have suggestions for how we could strengthen our methodology? Are there other paradigms and methods that would be useful?

To find out more:
Khazaei, M., Ramezani, M., Padash, A. and DeTombe, D. (2021). Creating shared value to redesigning IT-service products using SYRCS; Diagnosing and tackling complex problems. Information Systems and e-Business Management, 1-36. (Online) (DOI): https://doi.org/10.1007/s10257-021-00525-4; or (via ResearchGate): https://www.researchgate.net/publication/351427678_Creating_shared_value_to_redesigning_IT-service_products_using_SYRCS_Diagnosing_and_tackling_complex_problems
This paper provides references for the methods we describe, as well as an example of how we applied the methodology to improving a central payment system for urban services (EZPAY) in Tehran, Iran.

Biography: Moein Khazaei M.Sc. is a researcher and graduate teaching assistant at the Department of Industrial Management, Faculty of Economics and Management, Tarbiat Modares University, Tehran, Iran. He is interested in qualitative and quantitative methods in operational research, problem structuring, critical thinking, and multi-criteria decision-making. His research focuses on providing decision frameworks from a wide variety of paradigms in line with healthy visions in business such as sustainability and creating shared value.

Biography: Mohammad Ramezani M.Sc. is the Chief Operations Officer at Cafe Bazaar, an Android marketplace in Iran. He is based in Tehran and has 8-years experience in project and operations management in different technology-based companies.

Biography: Amin Padash PhD is a post-doctoral researcher in the Department of Industrial Management, Faculty of Economics and Management, Tarbiat Modares University, Tehran, Iran. His research interests focus on sustainable development, sustainability, shared value, risk assessment, management and business process management. He is a founder of the Iranian Association for Health, Safety and Environmental Management and Engineering (HSEME).

Biography: Dorien DeTombe PhD is the founder of the field Methodology for Social Complexity and chair of the International Society on Methodology of Social Complexity. She is based in Amsterdam in the Netherlands. She is a visiting professor at Sichuan University Chengdu, China. She spent her main career at Utrecht University and at Delft University of Technology, both in the Netherlands.

23 thoughts on “System redesign toward creating shared value”

  1. Thanks for this interesting blog – it’s good to see a striving towards shared value through a ‘common good’ ethos that is explored through a combination of approaches. Learning by doing (which you have done and are doing) will be the way forward with this, as a process that helps people out of more strait-jacketed ways of thinking, through the conscious adoption of broader and reflective ways of thinking and also by taking a longer-term approach to sustainability. For me, your lens of shared value offers a lot of potential.

    I wonder how what you have done enriches the arena of Corporate Social Responsibility? It may also be interesting to explore the linkages of your approach with the work of Mariana Mazzucato at University College London and also Janine O’Flynn’s recent taking stock of the concept of Public Value (University of Melbourne) https://www.anzsog.edu.au/resource-library/research/where-to-for-public-value-taking-stock-and-moving-on. This link between SYRCS and Public Value/Innovation could perhaps be a fertile area for future research?

    Reply
  2. Thanks for this, I’d echo Gerald’s comments, excellent stuff and a good start for further exploratory development.
    I’m interested in the levels of engagement – indeed, in the application of CSH and the whole methodology to the method itself.
    I do also ask: how do you know what people /say/ is relevant in the situation? There could be many reasons why what people tell you is not the most useful data?

    Reply
    • Dear Benjamin
      We do not consider the people who answered the questions as the final decision maker. In fact, decision groups have determined whether or not this data is relevant. Also, many interviews were conducted over several hours, and because I was the operations manager of Ezpay (case study) project, I recognized whether the respondents’ statements were relevant or not.

      Reply
  3. It’s great to see multi-method designs that are not just one-off, bespoke approaches, but have the potential to be widely used. This appears to be a new trend (also see the paper by Sydelko et al, 2021, in EJOR). I have a couple of questions though, which are meant in a spirit of constructive engagement, not point-scoring:

    (1) Why use interviews for the CSH element at the beginning? I would be using the ‘ought’ mode of CSH in workshops to allow new ideas to emerge in dialogue. Otherwise it’s still a researcher proposing alternatives, acting as a mediator, and an opportunity for the empowerment of groups of citizens and stakeholders is missed. I use CSH in ideal planning mode: see this other I2S blog – https://i2insights.org/2017/02/09/critical-back-casting/

    (2) How transparent to stakeholders is the multi-criteria decision making? The way it reads in your blog is that all the stakeholder consultation is funneled into a quantification mechanism, and often those are operated in backroom environments without widespread participation. Unless the trade-offs are really transparent – and crucially, unless the weightings reflect the values-based priorities of a wide range of stakeholders, and this is widely communicated – the experience of people making decisions quantitatively in backrooms can be alienating for communities who have other priorities.

    (3) Even more crucially than question 2, have you tested whether dialogue on preferred options can be a viable alternative to trade-offs through MCDA? I ask because the trade-off mentality in MCDA can be interpreted as win-lose decision making, while dialogue with emergent outcomes is experienced as A CHANGE IN VALUES BASED ON MULTI-STAKEHOLDER LEARNING, which takes people out of a win-lose framing, and is much healthier in terms of community engagement. I am not against MCDA, but to me it’s a second choice to fall back on if emergent dialogue fails.

    Thanks for the stimulating idea. What journal are you going for (if indeed you are)? It’s the kind of thing that EJOR would publish, or perhaps JORS, SPAR or SRBS. However, none of these are free open access, and someone else is asking for this.

    Editor: the journals referred to are:
    EJOR = European Journal of Operational Research
    JORS = Journal of the Operational Research Society
    SPAR = Systemic Practice and Action Research
    SRBS = Systems Research and Behavioral Science

    Reply
    • Dear Prof. Midgley

      I appreciate your attention and providing valuable comments.

      1. Although your approach entitled “Critical Back Casting” is very interesting to utilize questions, we used CSH as separate interviews for several reasons. First, people who were involved in the system saw internal problems such as technical, work problems, etc., and the officials of the organization were not interested in or familiar with these issues and problems. Secondly, our goal was to identify each person’s views because each person looked at the position from a different perspective, for example, one person looked at the issue from a customer perspective and the other from a government perspective. So we wrote the interviews to extract information from these people and then selected a representative group (witness from the interviewees) and finally using group meetings we turned the critiques into practical options.

      2. As mentioned, we selected representatives from the individuals, then in a group meeting with each group of stakeholders, we performed the MCDA separately and came to a different understanding, meaning that each group of individuals assigned scores and weights based on their visions and criteria. In other words, the weights and indicators were different for all three groups of stakeholders and based on that we reached the output. The output is what the business needed, and it was important for us because if we provide an output that the decision-maker does not accept, it will not add value to society.

      3. We have brought some of the alternatives in the final program based on the dialogues. Some of the alternatives that did not conflict with the others were considered as final alternatives and did not enter the MCDA phase. But in the case of operationally conflicting alternatives, they entered into the MCDA phase to select the most desirables.

      By and large, in some cases, to create a framework that could be acceptable and practical for business, we had to cross the red lines . Thank you very much

      Stay Safe
      Moein Khazaei

      Reply
      • Moein, This is great thinking. If I may provide one critique about this scheme, it would be that the final scheme be brought back into a loop for feedback from stakeholders, as in community-based or participatory research. In this way, the community in which this work is being done is engaged in the meaningful decision-making process, in a virtual or virtuous circle of sorts, a principle known in adult teaching and learning theory.

        Reply
  4. Looks very interesting. However for those of us not affiliated to academic organisations and therefore having limited access to published journals, can I make a plea. Please publish in open access journals as open access. The upside of the additional cost for the authors is that more people are likely to read the paper and hence there will be a greater chance of your research having impact. Greater impact may occur as intermediataries between academia and operations will influence operational decision making.

    Reply
    • Yes, I’d very much support this! Meanwhile, there are mechanisms, for those willing to use them…

      Reply
      • Dear John and Benjamin

        I totally agree with this idea, it is our mindset to present our paper freely, especially for those who are directly involved in the business. However, honestly, considering that the fee of open access is often more than 1000 dollars, due to the economic crisis in Iran, we can not afford it. To clarify, it is more than 5 month’s total revenue of a casual employee in the current situation. Anyway, I would be happy if we could talk more about it via LinkedIn or Email.

        Best wishes
        Moein

        Reply
        • There are a couple of new journals offering a third way between closed and open access. One is “Journal of Systems Thinking” and the other is “Journal of Awareness-Based System Change”. Both are fully open access, but not charging fees to authors. This is because they are being run by Derek and Laura Cabrera in the first instance, and Otto Scharmer in the second instance. Both the journal owners are running the journals philanthropically to promote systems thinking.

          Reply
          • Good to hear! I’m shocked at the fees, pleased to hear about the philanthropic versions. Meanwhile, I’ve requested the full text at researchgate.

            Reply
  5. Mentally, I summarize this marvelous piece this way: connect your customers to the system designers.
    The late Douglas Engelbart said to “Give viewers control of the viewspec” which means: let people have more control of what they are viewing.
    But, Cluetrain Manifesto [1] said this (quoting)
    There are two conversations going on. One inside the company. One with the market.
    In most cases, neither conversation is going very well. Almost invariably, the cause of failure can be traced to obsolete notions of command and control.
    As policy, these notions are poisonous. As tools, they are broken. Command and control are met with hostility by intranetworked knowledge workers and generate distrust in internetworked markets.
    These two conversations want to talk to each other. They are speaking the same language. They recognize each other’s voices.
    Smart companies will get out of the way and help the inevitable to happen sooner.
    If willingness to get out of the way is taken as a measure of IQ, then very few companies have yet wised up.

    [1] https://www.cluetrain.com/book/95-theses.html

    Reply

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