Executive Summary
In this paper, a thorough examination of the use of SSM at the DWP to combat the complicated problems of pensions and retirement savings is presented. Because of its multi-faceted nature, this issue has been recognised as a ‘wicked problem,’ requiring an approach to problem-solving beyond linear traditional techniques. SSM, an iterative and inclusive framework, is highly competent in addressing such complications, providing a structured yet adaptable way to involve diverse stakeholders and formulating all-inclusive solutions. The paper is divided into six sections that explain SSM, from stakeholder involvement and generation of root definitions to the creation and comparison of conceptual models with the real-world context.
What is the Wicked Problem?
Providing a decent income for people of pension age and promoting saving for retirement
Contextualising the Wicked Problem
The DWP has a “wicked” problem that is demonstrated by the considerable under-savings of the UK working-age population. According to recent research, about 12.5 million savers are failing to put aside sufficient funds for retirement at a replacement rate without consideration for housing costs (Pensions Age Magazine, 2021). This is indeed very apparent among higher earners, who, in spite of their high income, greatly overspent. This issue is systemic, suggesting a disconnect between financial literacy and savings based on income scales. The adoption of auto-enrolment (AE) has been a transformative policy for the Department for work and Pensions (DWP) since it has significantly increased the participation of the private sector in pension scheme from 41% to 86% in almost a decade (Pensions Age Magazine, However, the existing AE model needs improvement to cater for the diverse needs of the people. Including a wider range of younger workers and low-paid employees into the expanded AE from the start would lead to a more general safety net for future retirees.
Auto-enrolment (AE) in the United Kingdom has been remarkable, increasing the number of people in the pension scheme. However, the continued shortfall in retirement savings underscores the urgency of additional reform. The 2017 reform proposals for the AE system have been advocated by industry experts who have emphasised that the amount of contributions from employers and employees should be increased (Pensions Age Magazine, 2021). These reforms are expected to increase the benefits of AE for young workers and those with a low income from the first day of work. However, the DWP revelation that there are many workers who do not save adequately for retirement highlights the importance of it (Pensions Age Magazine, 2021). However, a multi-faceted approach is needed to avert the spectre of widespread poverty in retirement. Experts advise a gradual rise to current AE contributions that would not shock the workforce with a sudden financial change. For such high earners who, perhaps, are not forced to save, there is a request to encourage a savings culture through voluntary contributions that are higher than AE.
The self-employed, who have been historically excluded from pension narratives, are particularly vulnerable to this effect. Such innovative policies will involve the integration of the youth into the pension framework, thus averting the excessive reliance on the state pension during their retirement. The integration strategies could also utilise tax incentives or customised AE mechanisms that are tailored to the specific income patterns of self-employed.
The above-mentioned data from the DWP is a wake-up call on the approaching retirement crisis of many in the UK. The recognition of the problem by the government through the readiness to undertake reforms and the tabling of a private member’s bill points to progress. Nevertheless, the implementation of these measures should be accelerated to realise an immediate effect (Pensions Age Magazine, 2021). The essence of the DWP’s findings is clear: it is imperative to employ a sustainable, strategic approach towards ensuring retirees enjoy a decent quality of life. It requires not only new policies but also necessitates a shift in attitude towards planning for retirement from reacting to it. Enough with incremental steps, now is the time for bold action to ensure that those who are yet to pension will be well cared for in retirement.
Justifying SSM as a Problem-Solving Model
Soft Systems Methodology (SSM) is a problem-solving model, which provides a structured but flexible approach to dealing with soft problems, where traditional hard systems thinking leaves out human, subjective, and political aspects. One of the most relevant aspects of SSM is its applicability to wicked problems that have no clear definition, require incomplete knowledge and involve multiple stakeholders with different positions but that are tightly interconnected with other problems (Rittel and Webber, 1973).
The SSM system differs by its seven iterative stages, beginning with a deep understanding of the problem situation and engaging different parties to explore varied perceptions and definitions of the problem (Wilson and van Haperen, 2015). This process creates human activity systems—conceptual models based on different worldviews and discussed in terms of systemic desirability and cultural feasibility (Checkland and Scholes, 1999). Therefore, the systemic desirability and the cultural feasibility of the actions that the stakeholders consider will improve the situation.
SSM is viewed as a problem-solving model that accepts that organisational problems are complex and provides a way to explore these issues from different viewpoints. It does not seek a single “correct” solution, but it engages stakeholders as they learn by iteratively exploring and negotiating what the problem is and the possible improvements (Checkland and Scholes, 1999). In addressing wicked problems, this approach becomes vital because the goals and objectives are often vague or contradicting, thereby making traditional analytical means insufficient (Head, 2019).
For instance, wicked problems refer to a situation full of uncertainties where different elements depend on one another. It explains why sustainability by means of SSM may be helpful for involving all stakeholders in both engagement and policy development in light of such issues (Bauman and O’Brien, 2020). That’s why it meets the need to find new approaches that account for volatile and complex phenomena referred to as “wicked problems” (Weber et al., 2017). With SSM, decision-makers are able to interpret ethical issues, comprehend underlying systems structure and propose feasible but creative solutions to the stakeholders (2020).
Validating the Relevance of SSM
SSM proves a very relevant approach to addressing ‘soft problems’ – or ‘wicked problems’, known by their complex, difficult, multi-dimensional characteristics. According to Checkland and Scholes (1999), SSM is not about discovering the right answer; rather, it should be about finding the right questions. The iterative process in this method helps in understanding the problem situation from multiple stakeholder perspectives. This makes the method effective in dealing with issues where there are no clear solutions, goals are ill-defined, and the traditional linear problem-solving methods are powerless.
That is, SSM recognises the complexity of real-life issues that are typically rooted within a social context and, unlike other methodologies, does not presuppose what constitutes objectives (Wilson and van Haperen, 2015). The approach encourages people to view issues comprehensively, realising that people’s perceptions are changing and the world is moving forward (Patching, 1990). Apart from that, it aids decision-makers in collectively developing and comparing conceptual models to the real world for a shared understanding and systemic desirability as well as cultural feasibility (Checkland and Scholes, 1999).
Opportunities to Combinative Soft Approaches to Risk Aversion
De Bono’s Six Thinking Hats is one of the most applicable creative thinking methods that can greatly improve risk aversion strategies. By using this technique, thinking is divided into six categories that are represented by six different coloured hats. These modes of thinking include logical, emotional, creative, positive, negative, and macro thinking (De Bono, 2016). Systematically switching between these modes would allow people and teams to have a more in-depth risk examination, where every aspect of each scenario is explored with various approaches. Through the holistic view of the problem, the common problem of myopia tunnel vision in risk analysis is being addressed. The Six Thinking Hats method provides a structured yet flexible approach to thinking that enables a balanced consideration of risks, integrating intuitive and analytical aspects of decision-making (De Bono, 2016).
Synectics, another innovative approach, exploits metaphors and analogies for creative problem-solving. It makes the familiar stranger and the stranger familiar. Therefore, Synectics encourages creative thoughts about risk management that could become innovative and even revolutionary solutions. This is especially so when the conventional risk aversion approaches fail and present the opportunity to re-think and approach complex problems differently (Gordon, 1961).
According to Scholtens et al. (2021), systemic Constellations give a new angle to risk management. It shows visually and experientially the dynamics within the system to unearth the hidden interrelationships and forces shaping risk behaviours. Systemic Constellations provide a spatial representation of these dynamics and thus enable a better understanding of the patterns and systemic nature of risk, which is needed for effective risk management (Whittington, 2020). Six Thinking Hats, however, is fast and flexible and can be used in brainstorming sessions to assess risks (De Bono, 2016). It is effective when innovative solutions are required, especially when common risk mitigation techniques have not worked. It enables a thorough evaluation of the problem space. The solutions should be realistic and should be in line with organisational values.
Application of Wicked Problem Using SSM
In the context of changing employment patterns and diverse individual financial situations, the Department for Work and Pensions (DWP) is faced with the challenging task of securing the old age income for an ageing population. These challenges are further complicated due to several converging elements that relate to an individual, society, and policies. SSM starts by dissecting the situation, being aware that the pension issue is not just about one problem, but it entails more than that. These are influenced by socio-demographic factors such as expanding life expectance, emerging job trends affecting personal income, and changing economy leading to personal income and money-saving returns. Also, the problem is worsened by policy decisions regarding pension regulation and the banking sector’s stability. According to Checkland and Poulter (2006), SSM’s solution revolves around unravelling this complex thread that includes multiple dynamic and uncertain elements when handling pension schemes. In this sense, SSM begins with extensive contextual analysis that sets up the entire meaning in the succeeding steps of the method.
Soft Systems Methodology (SSM) comprises the two-stage approach for developing the root definitions in the second stage. These definitions represent the essential character of the studied system, involving multiple perspectives to provide a complex yet full understanding. The DWP’s root definitions can be seen as a distillation of the pension system into a manageable form from the perspective of different groups (Summers, 2018). A root definition for pensioners could emphasise the need for security and certainty in their retirement income. Financial advisors might also point out how sustainable investment strategies that balance risk and return can benefit individuals. The systemic viability and cost-effectiveness of the contribution on the side of employers, as well as the wide social and economic effects of the pension policy and its alignment with national financial stability, could be considered by the policymakers (Wilson and van Haperen, 201
However, such definitions are not just descriptions because each stakeholder understands the aspirations, concerns, and constraints of the worldview or ‘Weltanschauung’, which are based on the assumptions and the cultural attitudes that shape how a problem and its possible solutions are perceived (Checkland and Scholes, 1999) The root definitions in SSM are the basis for conceptual models whereby all the parties’ expectations and lived realities are incorporated to ensure the models are rooted. It is because of the inclusive approach by SSM that it is useful for dealing with complex problems such as those faced by the DWP, which is made up of individual, organisational, as well as policy dynamics (Checkland and Scholes, 1999)
After developing the root definitions, SSM moves on to building conceptual models. These are imaginative diagrams that comprise a series of activities meant to achieve aspirations embedded in the root definitions (Rodriguez-Ulloa and Paucar-Caceres, 2005). In the context of DWP, conceptual models serve as prototypes for pension fund systems, retirement education enhancements and incentive schemes to stimulate pension contributions. It may also reveal where pensions, incomes and savings have fallen short (Burnett et al., 2018). These can include verification of efficacy in already established pension programs or current education initiatives. The idealised systems are allowed to come into conflict with the real pragmatic constraints in this stage of the process of change and then give birth to feasible changes. The insights obtained from this section are vital because the next step entails the conversion of the theoretical models into actualised strategies with knowledge of the necessary organisation and policies needed in the move of the pension system from the present state to the desired future one (Checkland and Scholes, 1999)
Ultimately, SSM suggests an action plan to be made based on the knowledge acquired. This may require the DWP to amend its policies, launch education programmes and even introduce a new pension scheme. Such actions could be reviewed and revisited depending on the cyclical nature of SSM (Checkland and Poulter, 2006).
Appropriateness of SSM
According to Wiggins (2007), SSM is particularly useful when dealing with complex or multi-faceted problems in DWP, as demonstrated by its application towards resolving pension and saving challenges. Thus, SSM suits ‘wicked problems’ since traditional linear approaches do not include social complexity, dependencies, and evolving conditions associated with such issues. This is similar to what the DWP undergoes, which interconnects in a complicated network of economic, demographic and policy aspects. As observed by Checkland and Scholes (1999), stakeholders’ involvement during the problem-solving stages gives a complete picture of the problem in various ways. Alignment of the interests between the pensioners, policymakers, financial advisors, and employers requires this procedure.
However, the application of SSM in these difficult conditions may have some problems as well (Rodriguez-Ulloa and Paucar-Caceres, 2005). Stakeholder engagement being expansive plus an iterative process would call for many hours of input. This could be a challenge in a dynamic environment like DWP, where policy decisions need to be timely. Besides, the success of SSM depends on the ability of stakeholders to develop and refine root definitions and conceptual models through proper discussions (Rodriguez-Ulloa and Paucar-Caceres, 2005). In order to do this, DWP must have a highly skilled team of negotiators and conflict resolvers who may even need to undertake some sort of specialised training.
Hence, the methodical demands of the holistic and inclusive approach are dependent on the ability of SSM to manage them. However, it is necessary to strike a balance between the thoroughness of the SSM and the practical limitations of a big and dynamic organisation like the DWP in the successful application of this creative approach to problem-solving.
Conclusion and Recommendations
To effectively implement the Soft Systems Methodology (SSM) within the Department for Work and Pensions (DWP) to address the wicked problem of providing for pensioners and promoting retirement savings, several recommendations are proposed:
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Stakeholder Engagement
Involve stakeholders early and often during the SSM process. These include pensioners, financial advisors, employers, policymakers, and others affected by DWP’s policies. Structured workshops and interviews could help one to get varied perspectives and develop ‘rich pictures’ – visual representations of the problem context that reflect the complexity of the situation (Checkland and Poulter, 2006). Make sure these activities are not a one-off but rather a continuous dialogue towards a collective understanding and commitment.
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Developing Root Definitions
Involve stakeholders in the development of clear and concise root definitions for each system related to pension provision. The definitions of these should be a representation of the perceptions that the various stakeholders have, as well as of the things that matter to them so that the systems designed will meet the actual needs of the users (Wilson and van Haperen, 2015). With every new knowledge and more understanding about the problem, root definitions should be looked at again and revised.
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Conceptual Modeling
Agree on root definitions and develop conceptual models. The models should specify the needed activities, processes as well as policies. Use systems mapping and flow diagrams to represent the relationships among elements of the system (Checkland and Scholes, 1999). Where it is possible, pilot these models to ascertain their suitability and to make iterative modifications based on the feedback.
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Comparing Models to Reality
Systematically compare the two conceptual models to the real-world situation. Therefore, such may include analysing the current policy impacts, the performance of pension funds, and savings behaviour. Use the analysis above to detect discrepancies and opportunities for improvement. Transparency and openness should be the guiding principles of the comparison, where stakeholders are able to provide feedback so that the models do not become too obsolete and unresponsive (Checkland and Scholes, 1999).
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Implementing Change
Using the outcomes of the comparison phase, formulate a set of actionable recommendations. It must also propose policy suggestions, design new educational programs, and suggest possible incentives to foster savings. These recommendations, therefore, need to be flexible and resilient to change given the wicked problems. These should be regularly monitored and evaluated with a willingness to make any changes that need to be made (Reynolds and Holwell, 2020).
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Review and Adaptation
Set up a constant learning and adaptation process. SSM is an iterative procedure, so the solutions it produces should be subjected to periodic evaluation. This might imply establishing a specific unit under the purview of the DWP, which would have the mandate to monitor the execution of the SSM, track progress, and gather knowledge from each phase of its implementation. In order to ensure that this task force aligns with company objectives, it should make periodic reports to senior management.
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Capacity Building
Training and development of DWP staff in SSM. This could be through training programs or action learning sets where staff can learn by applying SSM to real-world problems. It is imperative to build internal capacity for sustained application of SSM in the organisation (Checkland and Scholes 1999).
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Public Communication
Disseminate information about SSM and its results to the public for transparency and to earn trust. Communication with the public can also act as a feedback mechanism where pensioners and the community can provide insights not likely to be raised from internal discussions (Wilson and van Haperen, 2015).
The overall finding in closing this investigation of the use of the Soft Systems Methodology (SSM) within the Department for Work and Pensions (DWP) is that SSM provides a sturdy platform for dealing with the complex and shifting the problem of providing adequate pension incomes and encouraging retirement savings This task is seen as a “wicked problem” and requires an approach that moves beyond the traditional linear problem-solving method. This can be well achieved using the iterative, inclusive and holistic strategy for the SSM. It has been demonstrated that SSM provides an elaborate view of the complexities, as they involve various stakeholder concerns underpinning the pension system. Aspects of engagement are crucial because pensioners, financial advisors, employers and policymakers can voice out priority issues affecting resolutions. The approach for developing root definitions and model concepts for understanding the problems and possible solutions for SSM is organised and flexible at the same time. It allows a detailed consideration of the problem area, leading to a more innovative and realistic remedy. The paper outlines the proposed actions that include continuous stakeholder outreach, explicit root definition, and conceptual models that can be compared with the current condition. Further, this procedure guarantees that the suggested solutions are adequate, functional, and adaptable in a shifting environment. These solutions thus have to be followed up on frequently, reemphasising the importance of having a DWP task force to oversee it. This would, therefore, culminate in forming a task force whose sole agenda would be to ensure that the suggested solutions aligned with the organisation’s mission, vision, and the needs of its key stakeholders. Therefore, the inclusion of the SSM in the DWP may be instrumental in simplifying the issues associated with saving for pension and retirement. Applying the recommendations to DWP can provide a more effective solution for the financial problem faced by old British people. The measure tackles short-term issues and provides a basis for forward-looking strategies in managing and developing policies on pensions in the long run.
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