The LMJ Online June

Lean in review What is the current state of lean and why it is important to review your processes and progress in your organisation.

Organisations and interviews in this issue include: Edinburgh Napier University, RenaultNissan Consulting, Philips, Lean Competency System

In this issue: What Does ‘Efficiency Savings’ Mean?

What are efficiency savings and how can you make use of them in your organisation Leading with lean: the Four types of Leadership What are the four types of leadership and how do you make them work in lean

the-lmj.com June 2016

EDITOR’S LETTER

Dear Reader...

Editor

Fred Tongue

f.tongue@hennikgroup.com

Managing Editor Victoria Fitzgerald

v.fitzgerald@hennikgroup.com

Creative director Jamie Rector

j.rector@hennikgroup.com

Dear Reader, With the arrival of June, it is now officially Summer and is also the half mark of the year. This means it is the perfect time to take stock and review the year so far.

That is why, this month we are casting a critical eye over things and looking at some issues in lean, operational excellence and continuous improvement that need to be assessed.

One of the problems that this issue looks to address is the problem of value in the public sector. Simon Elias talks at great length about the definition of value and the customer in the public sector because once this is decided it is more obvious how to implement lean.

highlights and Steve Yorkstone did the same. With three streams it was impossible to see experience everything the conference had to offer, but between us, Steve and I will bring you the highlights.

The public sector is a hotbed for lean, but it is difficult to pin down who the customer is. Is it the taxpayer, because that’s how funds the service, or is it the end user, because they benefit from the service provided?

We also launched this year’s Lean Top 25 report, which celebrates the individuals doing outstanding work in the field of lean, continuous improvement and operational excellence. To view the full report and to download it for yourself, please visit: http://www.the-lmjtop25.com/

Leadership is also an issue that comes up time and time again. Philip Holt critically assess four different types of leadership and how they fit in with lean methodology.

People often want to implement change in an organisation and there are million and one different factors that can determine how successfully that change is taken up. What is often overlooked is management,. Once the green light is given people tend to think that management are void of any blame. In reality the wrong kind of management style can slow up progress or event halt it altogether without meaning to.

We also have all the best bits from The LMJ OpEx Conference. It was a wonderful occasion with some fantastic presentations, great speakers and fascinating case studies. I wrote a wrap up piece about what were my personal

Reviewing performance, measuring KPIs and taking stock of what you have achieved is massively important on an individual and an organisation wide scope. This period gives perspective, often it is easy to become fixated on one specific problem or area and another issue can crop up while your back is turned.

It is equally important to question, the status quo and make sure that the processes in place are still relevant.

I hope you enjoy this month’s issue of The LMJ and that it prompts you to go back to your own organisations and ask questions.

Happy reading,

Fred Tongue Editor

In order to receive your copy of The LMJ kindly email lmj@hennikgroup.com or telephone 0207 401 6033. Neither The LMJ nor Hennik Group can accept responsibilty for omissions or errors.

Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

CONTENTS

4 - - - - - - -

MEET THE EDITORS

5 - - - - - - -

CHAIRMAN’S COMMENTS Steve Yorkstone gives us his views on The LMJ OpEx conference and what the most memorable moments for him.

7 - - - - - - -

NEWS PRINCIPLES AND PURPOSE

1 0 - - - - - - - What does ‘Efficiency Saving’ mean?

James Aherne writes about what an ‘efficiency saving’ is and lets us know what is means to him.

12- - - - - - -

Leading with Lean: the four types of Leadership In this article, Philip Holt takes a detailed look at the different types of leadership and discusses whice models best suit a lean managment system.

21- - - - - - -

Value Confusion: The Problem with Lean in Public Services Simon Elias takes an in-depth look at what lean means in public services, what value is, who the customer is and other difficulties that face traditional lean when the tax-payer is footing the bill.

28- - - - - - -

IN SUMMARY The LMJ OpEx Conference Fred Tongue writes about his experiences from the conference and some of his personal highlights from two days of learning.

33- - - - - - -

LEAN ONLINE

34- - - - - - -

LEAN EVENTS

35- - - - - - -

SUBSCRIPTION FORM

June 2016 | the-lmj.com

3

MEET THE EDITORS

Our experienced editorial board members contribute to the journal providing comment against articles and guiding the coverage of subject matter.

Jacob Austad

Novo Nordisk, Denmark

LeanTeam, Denamrk

Lean Enterprise Research Centre, Cardiff Business School

Bill Bellows

Brenton Harder

David Ben-Tovim

President, In2:InThinking Network

Commonwealth Bank of Australia

Flinders Medical Centre, Australia

Gwendolyn Galsworth

Joseph Paris

Sarah Lethbridge

Visual Thinking Inc., USA

Operational Excellence Society

Cardiff Business School. UK

Malcolm Jones

Torbjorn Netland

Dr Nick Rich

Industry Forum, UK

Nowegian University of Science and Technology, Norway

Steve Yorkstone Edinburgh Napier University, UK

4

John Bicheno

Rene Aagaard

June 2016 | the-lmj.com

Swansea University, UK

More information about our editorial board. their experience, and views on lean is available on the LMJ website:

the-lmj.com

CHAIRMAN’S COMMENTS

Chairman’s comments Steve Yorkstone, of Edinburgh Napier University, sums up his highlights from The LMJ OpEx Conference at Heathrow after chairing the event. Picking out some of his highlights and also contemplating the wider meaning of Operational Excellence and some of the take him points for him.

The annual LMJ conference is the heartbeat of The LMJ’s year; this year was no exception in being an insightful event, and a pleasure to be part of.

My background is in the practical application of lean in Higher Education. I’m the hands on person leading continuous improvement where I work, and I’m quite open minded to what we mean by lean or Operational Excellence.

I entered the conference looking forward to being part of the discussion around what OpEx and lean mean; seeking some stories to tell when I got back; looking for some tricks of the trade; and maybe a bit of inspiration.

Most of us came from the UK, we were joined by delegates from mainland Europe, and North America as well.

I chatted with people from legal firms, banking, education, food, fast moving consumer goods, and of course manufacturing.

The event was a warm one, with a sense of being on a collaborative endeavour. Perhaps competition didn’t feel present in the room as we were drawn from so many industries.

Whatever the reason, it strikes me that as delegates there was a sense of shared passion for improvement, and a celebration, especially at the Lean Top 25 awards, of brilliant achievements.

The programme that brought us together consisted of theoretical and applied experts presenting from manufacturing, logistics and service sectors, on topics of Technology, People and Culture, Operational Excellence Transformation, and Sustainability.

I could write so much about our keynotes and speakers, but I shall pick a couple that stood out for me.

Joseph Paris, the leader of the international OpEx Society introduced us to “mount stupid”.

I am ashamed to say I can recognise this in myself. It is the idea that when we are starting

June 2016 | the-lmj.com

5

CHAIRMAN’S COMMENTS

out in a new area, perhaps an improvement methodology, we quite quickly see ourselves as experts. This is when we are approaching the peak of “mount stupid”.

Once at the peak we quite quickly come across our limitations, and can descend the other side of the peak, losing enthusiasm as quickly as we had gained it. In this I am mindful of the frothy enthusiasm of so many improvement initiatives that aren’t sustained.

However, if we keep on the trek in the foothills of Paris’s mountain, we start to rise again. We are able to realise perhaps some more of the nuances we missed on our first ascent, and, in learning to realise the limits of our understanding, perhaps achieve Yoda-like wisdom.

Gwendolyn Galsworth, talked about the language of the visual workplace sharing with us some of the wisdom she has gained over 30 years investigating the phenomenon of visuality at work.

Sam Kishaish is a Swedish Agile coach. He was able to bring

6

June 2016 | the-lmj.com

to life for me in a new way that empowerment feels to an experienced manager. Sam used the metaphor of the self-driving car.

While a self-driving car may well be safer, more environmentally friendly, and better able to deal with heavy traffic… we still love the thrill, power, and control of driving. In the same way, we love the thrill of controlling our teams, even when perhaps we ought not to. That’s a metaphor I’ve already borrowed more than once, with reference to Sam, of course!

We closed with Clair Hall from McDonald’s. She left us thinking about some of the big question, sustainability of both the environment and the workforce and how leadership is the key to achieving excellence and that care, courage and authenticity are the foundations of a an organisation.

Now after the event I’d say I left feeling part of a community.

Despite being drawn from so many different industries, professional backgrounds, nations and indeed named methodologies. What joins

us together is ambition, passion, and drive to ensure that our work works better.

I left with some tools and insights and a bit further along the curve of “mount stupid”, although I feel I’ve still a way to go before I’m as good as master Yoda.

And over all I left reflecting that what we do is a profession. That what it takes to do what we do takes time to learn, and to impart fully. Not that we cannot express what do we do in a simple way, as two words “operational excellence” (or indeed “becoming lean”) may well do it. But that to bring these two words about takes an on going, sustained, and disciplined practice.

And part of that practice has to be challenging our own thinking. As coherent as a community we may be, we should always be looking for that voice from the outside, the unexpected learning. This is something I know The LMJ is always looking to bring. So, here’s to The LMJ and the year ahead!

NEWS

Citi recognises Indian business partner with award Wipro Limited, a leading global information technology, consulting and business process services company based in Bangalore, India, recently announced that it has received the Citi Lean Partner award for 2015 from Citi, in recognition of its high levels of service and performance.

The Lean Partner Award recognises a supplier that has supported Citi in the execution of its re-engineering objectives and supported its effort to drive client-centric process redesign throughout the company – improving the way Citi operates.

improvement program with tangible and measurable benefits as it relates to purpose (rapid and consistent turnaround time for services delivered), quality, efficiency, controls and overall customer experience.

On receiving the award from Citi, Rishad Premji, Chief Strategy Officer and Member of the Board, Wipro Limited said, “We have enjoyed a long-standing and fruitful relationship with Citi and are delighted to be recognised with this award. This award is a testimony to our alignment with Citi’s objectives.”

The award also recognises the supplier who has most embodied the spirit of lean, a continuous June 2016 | the-lmj.com

7

NEWS

Kuwait learns from Japanese lean masters A delegation of Kuwaiti manufacturers recently made a trip to Japan to study and observe and learn about the famous Toyota Production System.

There was a tour of the Motomachi and Kaikan Museum, which showed the delegation how different models are manufactured on the same production line. Dr Souhaila Al-

Mutawa from the mechanical engineering department at Kuwait University led the delegation.

The group was treated to watch how body panels are mechanically welded as well as how Jidoka and Just in Time manufacturing are actually implemented in the fabled plant.

maintenance engineer at refrigeration company Coolex said, “I was impressed with how each component arrives only when needed.”

The point of the trip was to leave a lasting impression with the 11-member team through first hand experience.

Mohammad Nabil, a plant

Automated vehilce manufacturing at a Japanese Toyota plant

French Factory of the Year Award for lean Massey Ferguson “L’Usine Nouvelle”, France’s leading industrial magazine recently celebrated the Massey Ferguson plant in France for its in-depth transformation initiative and significant performance gains. These included increases in productivity, competitiveness, market share and quality.

The Beauvais site in France, operated by American parent

8

June 2016 | the-lmj.com

company AGCO, manufacturers a range of tractors with anything from 75 to 400bhp. The site produces 14,500 tractors a year, with 85% of those made for export.

In the last 12 months the site has seen four new tractor ranges produced there.

The award recognises the site wide reorganisation project known as MF Fast Forward and

has seen gains through lean manufacturing, 5S and the Hoshin Kanri Continuous Improvement Strategy. Non-conformances have been reduced by 40% in the last two years fro an already good base and Massey Ferguson’s customer satisfaction survey shows that tractor product quality at the point of delivery has moved up to 94% in less than five years.

NEWS

Adidas to launch a robotic factory The German sportswear giant will begin manufacturing footwear in a completely robotic factory come 2017. The company closed all production facilities in Germany in the 90’s, this will be the first plant in Germany since then.

The factory, called the SPEEDFACTORY, will be extremely agile and adaptable in order to respond to customers individual needs.

Herbet Hainer, CEO of Adidas, said: “As a sports company we know that Speed wins. That’s why we defined Speed as one of the key choices of our strategic business plan ‘Creating the New’.

With the adidas SPEEDFACTORY we are revolutionising the industry.

It’s a constantly changing world out there and our consumers always want the latest and newest product – and they want it now.

That’s what adidas SPEEDFACTORY delivers, starting right here in Germany, with best-in-class German technology.

“Every day our teams come together to bring speed to life, and with the adidas SPEEDFACTORY, we have a game changer in our hands. It enables us to combine speed in manufacturing with the flexibility to rethink conventional processes. Our goal is to give consumers what they want when they want it,” said Glenn Bennett, Executive Board Member of the Adidas Group responsible for Global Operations. “It’s a new era in footwear crafting – with greater precision, unique design opportunities and high-performance. Products of tomorrow are going to look different to what we have today.”

The factory will is expected to be incredibly lean thanks to greater agility, low inventory and automated kanban. This new flexible production mdoel will possibly solve some of the problems associated with traditional centralised production.

June 2016 | the-lmj.com

9

PRINCIPLES AND PURPOSE

What Does ‘Efficiency Savings’ Mean?

Renault-Nissan Consulting’s Director James Aherne shares his thoughts on the meaning of ‘Efficiency Savings’.

Most people will recognise that the number of phrases making up management speak has increased significantly over the past decade or so. ‘Bluesky thinking’ and ‘getting on message’ have become commonplace and probably have a case for inclusion in the Oxford dictionary, if they’re not already. But this article is not intended to launch an attack on the increasingly growing array of terms at the disposal of presentday managers. Languages across the world have, rightly so, been evolving for thousands of years

10

June 2016 | the-lmj.com

and new words and phrases are popping up regularly. An individuals’ attempt to limit this would be fruitless and foolhardy.

However, what I would like to focus on is one area of terminology: Business Improvement. In recent years words like ‘efficiency savings’, ‘productivity’ and ‘effectiveness’ are being used more and more by people from all levels within organisations in the context of improvement activities. Typically this boils down to meaning ‘doing more with the same resources’

James Aherne Director at Renault-Nissan Consulting

or ‘doing the same with fewer resources’. Often in this context, ‘resources’ means ‘people’.

Sometimes I see the aforementioned terms being used interchangeably and,

PRINCIPLES AND PURPOSE

“Consider Productivity as being the result of multiplying Efficiency and Utilisation.” where that occurs, with insufficient thought as to what they really mean. In my experience this causes people to switch off from what is a very important focus for businesses and undermines the impact of what people are trying to say.

This is a damaging shame as the concept is actually very simple to grasp and communicate. What follows now is, in my opinion, how people within businesses should be thinking about defining the ‘efficiency’ (more on that in a minute) of teams of people.

There are three terms that I refer to in the remainder of this article: Productivity, Efficiency and Utilisation. Consider Productivity as being the result of multiplying Efficiency and Utilisation and that leaves us with only the latter two terms to define.

Think about the service or product that your organisation provides to customers; the price that customers pay will be influenced by how much time you expect people to spend on the individual tasks that make up this service or product. In a manufacturing context, the total assembly time that somebody is required to be doing something to the product will be calculated and built into the end price. In a service sector context this concept is no different. Productive Efficiency is the measure of how long

people actually spend carrying out the tasks with no distractions compared with how long they should spend (or a calculated time based on standard operations). If the amount of time allowed (therefore built into the price) for a particular task is 30 minutes, yet a person carrying out that task takes 60 minutes, that person is said to be 50% Efficient at doing that task – 30 minutes divided by 60 minutes.

Now think about all the activities that people do in a week. Some time will be spent doing what the customer is paying for: Assembling a product, delivering a training course for a client, analysing data or whatever it is that your company gets paid for. The rest of the time will be spent doing things that you don’t directly get paid for: attending meetings, producing internal reports, travelling, waiting for information or machinery to be repaired – the list is fairly exhaustive and contains activities that are familiar to all of us. Let’s say that of the 40 hour week, a member of staff spends 20 hours actually working on something that is generating income for the business (regardless of their level of efficiency as previously defined), and 20 hours engaged in the sorts of activities mentioned above. In this instance, the Utilisation of that person is said to be 50%.

If the scenario above were true, then the overall Productivity of that person is 25% – this is 50% Efficiency multiplied by 50% Utilisation. This effectively means that only 25% of the time that that person is being paid for is actually being used to generate direct income from clients. Or, put another way, for every hour’s work you get paid by clients, you are paying that person for 4 hours ‘work’. So what?

Apart from standardising the language that people use and therefore encouraging increased understanding by the organisation as a whole, the reason it’s relevant to distinguish between the component parts of Productivity is that different problems will require different solutions when striving for improvement. If for example Efficiency is low, then good benefits will likely come in the form of training, standardising and continuously improving the way tasks are carried out. Also good physical organisation of the workplace will allow tasks to be completed in a more timely fashion. If however the problem is one of low Utilisation, then initiatives like Information Centres will make meetings shorter and free up more time for staff to be working on tasks that generate income.

Sadly, one size rarely fits all.

An appreciation of what Productivity actually means, underpinned by a clear understanding of where your organisation is experiencing problems will guide you more effectively to improvements that will add value where it’s really needed.

June 2016 | the-lmj.com

11

PRINCIPLES AND PURPOSE

Leading with Lean: the four types of leadership In this article, Philip Holt will be looking at the ways in which lean and leadership coincide and which leadership styles best suit a lean management model.

Steve Jobs once said: “Be a Yardstick of Quality.

Some people aren’t used to an environment where excellence is expected” Therefore a Quality Mind-set will only pervade the organisation when the Leadership actively models the behaviour. Only by living the approach to Quality that they desire can Leaders truly drive the change to a Culture of Quality.

12

June 2016 | the-lmj.com

Introduction – Why lead with Lean?

According to Gallup’s Global Employee Engagement Survey1 only 13% of employees worldwide are engaged at work. Even more concerning is the revelation that

Philip Holt Head of Operational Excellence, Philips

PRINCIPLES AND PURPOSE

24% are “actively disengaged”, meaning that they are unhappy and unproductive at work and liable to spread negativity amongst their colleagues.

Furthermore, according to a report by the Harvard Business Review Analytics Services2, based upon responses from largely Senior Executives, 71% of respondents rank employee engagement as very important to achieving overall organisational success.

This gulf between the state of employee engagement, which is without exception across both industries and cultures, and the recognition by Senior Leadership of its necessity to drive performance, should be a major concern for any Organisation’s Leadership and its resolution the most significant executive priority.

The core proposition of this article is that an Organisation’s Leadership are the main difference between engaged and disengaged people and between Cultures of high or mediocre Performance and that Lean Leadership is the most effective methodology to achieve high levels of employee engagement, a high performance organisation and ultimately a Quality Mind-set.

To attain the state of Lean Leadership, four complementary Leadership styles must be practiced and within the article these are described, with the intent that they will result in an Organisation focussed on People and engage them in their work: 1.

2.

3.

4.

Leadership Activism Visible Leadership Mosquito Leadership Coaching Leadership

These Leadership Styles, when lived authentically, will gift the Leader with the ability to connect with their team members and transform the behaviours, mind-set and culture of their organisation.

This is not to say that these styles can be forced or easily mastered.

It will take a real commitment from each Leader to adopt Lean Leadership and the styles required to make it successful but, even in the early days of their adoption, an immediate difference will be seen, provided that the Leader is willing to move into a state of conscious incompetence (admitting what they don’t yet know) and having the humility to make mistakes and learn.

The long-term return will be significant for both the individual and the organisation and, in the author’s organisation, Royal Philips, several years of Lean Transformation have demonstrated significant improvements in the Leadership and business performance for those areas of the business that have truly grasped the opportunity.

Leadership Activism Question: In a bacon and egg breakfast, what’s the difference between the Chicken and the Pig? Answer: The Chicken is involved, but the Pig is committed!

Whilst this metaphor only stretches so far, what it represents is that we need Leaders for whom making the change to a culture where excellence is expected is a true commitment, whereby they not only “talk the talk” but they also “walk the walk”.

The Leader cannot only be an advocate for the change that they want but must be an activist: Being the change that they desire.

This is not nuance or semantics but is a tangible difference in the way that the Leader will operate and role model the new Philosophy: Lean Thinking.

The Lean Leader is a coach amongst their colleagues, continuously encouraging and teaching them how to become activists, which will require humility and a willingness to make mistakes and show ‘conscious incompetence’ in front of their teams. However, once the initial fear is overcome, what they will observe is an increased respect and appreciation from their teams as they see them being the change that they want, role modelling and experimenting with the new ways of working.

Three Leaders who have sincerely demonstrated “Leading with Lean” are Art Byrne3, who amongst other things transformed Wiremold, Professor John J Oliver OBE, the former CEO of Leyland Trucks, who turned around the business with what he termed “Radical Employee Engagement” and Dr. Gary Kaplin, MD, who as CEO of Virginia Mason, a Healthcare Provider in Washington State, USA, has led them to become one of the most successful Lean Transformations in the Healthcare Industry and to a leading position in North American Healthcare Provision.

Dr. Kaplin is an inspiring Lean Leader, who, along with the Virginia Mason Board, took a transparent and humble approach to addressing their case for change at the beginning of the June 2016 | the-lmj.com

13

PRINCIPLES AND PURPOSE

21st Century: • • • • •

Survival (Losing money for the first time in their History) Poor retention of the best People Loss of Organisational Vision Leadership Change A Defective Product

The element of “Defective Product” is an interesting approach to viewing Healthcare and is an eye opener in terms of what it means for patients, as it refers to a historical 34% Defect rate. This means that for every 100 patient encounters there were 34 defects, which could be anything from no record of an appointment all the way through to an avoidable death.

As Dr. Kaplin stated in his address of the St. Luke’s Health System Summit in 2013: “...if the aviation industry had this sort of defect rate, ‘planes would fall out of the sky every day; if Flat Screen TVs had these kinds of defect rates we wouldn’t buy them…”

•

•

$100s of Millions of Dollars spent in the Healthcare industry for waiting rooms: “Places for Patients to hurry up, be on time and wait for us”; Kaplin If everything is alright with their test results, Patients are sent home by Friday afternoon.

If not, they wait through the Weekend until Monday

By facing the reality of the situation they tackled some of the paradigms prevalent in the Healthcare industry and one of the most courageous things done by Dr. Kaplin and the board was to go public about a preventable death that had a major impact on their Lean Transformation.

Despite being already 3 years into the deployment of Lean, as a result of this loss of life and major Quality of Service failing, they refocused to a single organisational goal for the years 2004 through to 2006 of protecting patients from avoidable harm.

A reassuring element of the approach that the team at Virginia Mason have taken is that they have not tried to ‘reinvent’ Lean for their industry, accepting that they do ‘make’ things and even calling their Lean System the Virginia Mason Production System (VMPS). This is a mature approach and would appear to be a critical factor of the mind-set required to be successful in a Lean Transformation and one that was driven by their activist Leader.

Another element of activist Leadership is the way that Dr. Kaplin has driven Virginia Mason to undertake detailed Value Stream Mapping of their Current States (finding typically 90%+ of the time being non-Value Added) to enable the significant improvements that they’ve made in their performance and they have taken a granular approach.

However, Dr. Kaplin is clear about the role of the Lean Leader:

The Story started in the year 2000 when the Virginia Mason Board of Management asked Dr. Kaplin and his Leadership Team: “Who is your Customer?”

Their response was predictable: “The Patient” However, the Board retorted that if that was the case, things wouldn’t be the way that they were: •

14

Processes were designed around the Medical Professionals and Staff, not the Patients

June 2016 | the-lmj.com

An example of a CommCell in a Healthcare environment

PRINCIPLES AND PURPOSE

“As Leaders there are technical changes, Lean, there’s the Toolbox, it’s the improvement method ... but you need a critical mass to feel urgency, you need to have visible and committed Leadership; not advocacy leadership; I was a great advocate Leader ... my job was to get all the resources from our department and keep administration off of our backs ... but that’s not what we need now...”

As a result of the 15+ years of Lean Transformation, they have made a fantastic leap forward in their performance and care for their Patients and in 2010 were awarded the recognition of ‘Top Hospital of the Decade’ by the Leapfrog Group and have since featured regularly in the ‘Top 100 Hospitals in America’ list4. The Cultural change in their organisation is tangible and is led from the top.

problems. However, the Gemba shouldn’t be confused with only a Manufacturing shop-floor but can be a workstation in a design office, a call centre, or an operating theatre. It is anywhere where the value (and also the waste) is created for the Customer. Taiichi Ohno5, considered the Father of TPS (the Toyota Production System), said it best: “Toyota Managers must be sufficiently engaged on the factory floor that they have to wash their hands at least three times a day”

•

•

•

Visible Leadership Genchi Genbutsu is the Japanese Term for ‘Go See’ and is critical for the Lean Leader’s success. By going to see, visible leadership can be enacted and this goes hand-in-hand with Leadership Activism, going to the Gemba, the place where the work is done, and helping to solve

In virtual environments, such as most creative and transactional environments, this is even more important and the utilisation of tools such as a CommCell (Communication Cell), Visual Planning Boards and Kanban Development Boards7 can be a great way of achieving this visualisation.

Taiichi Ohno quote; from Mark Graban’s slideshare By going to the Gemba and helping to solve the problem where it is happening; Leading Kaizen Events, undertaking Kamishibai6 and being seen as a Visible Leader; the Lean Leader will begin to live the Lean Principles of: •

Leading with Lean requires our Leaders to be activists like Dr. Kaplin but it doesn’t mean that we only need the CEO, the C-Suite and the Senior Leadership. Rather, we need all Leaders, whether they are the CEO, the Quality Manager or a Team Leader on the shop-floor to be an Activist Leader.

Leader will help them to help their Customers and will graduate as a ‘Leader as a Teacher’. To do this they must help them to make their workplace, and the processes and value streams within it, visual.

•

Principle 5: Build a Culture of ‘Stop and Fix’ problems to get Quality right the first time Principle 7: Use visual controls so that no problems are hidden Principle 9: Grow leaders who thoroughly understand the work, live the Philosophy and teach it to others Principle 10: Develop exceptional people and teams who follow your Company’s philosophy Principle 12: Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu)

Being a Visible Leader is not just about being seen but about being seen to support Team Members in adding value for the Customer.

By asking the right questions, helping them to solve problems and removing barriers, the Lean

An example of a Kanban Development Board Leading with Lean requires that the workplace becomes a showcase of excellence, whereby the status can be understood by everyone at any time and in an interval that is meaningful. This means that the status, say 4 weeks ago, is not acceptable; it is the status now or, dependent upon the area of the organisation, within a reasonable time interval that matters. This means that on a factory floor the status within the last few seconds or minutes will be visible and in a development environment, within the last few hours or day.

The Lean Leader will encounter some initial scepticism and

June 2016 | the-lmj.com

15

PRINCIPLES AND PURPOSE

resistance as they begin their visits to the Gemba, as the employees will expect that it is the typical visit for show, without real meaning, and will result in potential criticism and additional workload through actions or even a change in priorities and direction. However, the Lean Leader will have the patience to demonstrate, with their activism, that the visits will be often and that they will be meaningful and build the trust with their team members, resulting in improved engagement and an increased focus on excellence and quality in everything that they do.

Mosquito Leadership The third form of Leadership in the repertoire of the Lean Leader is termed ‘Mosquito Leadership’.

There is a certain familiarity with the concept of spreading ideas, news or opinions ‘virally’ and despite the fact that very few, if any, of us would like to catch a real virus, we are happy to catch many of the viral trends that are out there.

• Extending the analogy, the Mosquito Leadership style is one where the Lean Leader spreads, virally, the change in mind-set by ‘infecting’ the organisation with their ideas and beliefs. Again, this is complementary to the other Leadership styles and so the Leadership Activism and Visibility play a significant part in this.

“If you think that you are too small to make a difference, try sleeping in a closed room with a Mosquito” This is precisely why this form of Leadership is so important to being an effective Lean Leader, as without the willingness to go out and infect colleagues, the critical mass of change required for a Quality Mind-set and the pursuit of excellence will not be achieved.

•

16

June 2016 | the-lmj.com

•

• The philosophy behind this form of Leadership is that a Leader is not limited in influence and impact by job title, role description or hierarchal position. Instead, they identify the long-term impact that they wish to have on their organisation and develop a strategy to make it happen and the name given to this form of leadership was inspired by a traditional African proverb:

To adopt the Mosquito Leadership style, certain beliefs must be held by the Lean Leader, which must be similar to the following:

Being the Virus

•

•

If I truly believe in the Vision, Mission and Values of the Organisation in which I operate, I must be a leader in the change required to realise our Goals However, I am not a lone soldier or a Maverick; I am an

•

•

•

Agent for Change I know that ‘I’ deliver more when I focus on ‘We’ I realise that I don’t have all the answers, in fact I have only a few, but I’ll find the people who collectively do have them Whilst my Legacy may be small in terms of Human History, it will be significant in the area for which I’m focussed It is only my Discipline and Focus that will be an equal to my Stamina I will only regret the mistakes that I made by not doing what I believed was right; all other mistakes I will simply learn and improve from I am the Culture of my Organisation, not the victim of it, and I will never blame it for my failure to deliver or let it prevent me from doing what must be done I do this because it is the right thing to do for the Organisation, not for Career advancement

The Lean Leader understands that their Sphere of Control is relatively small, even when they have risen to a quite senior level in their Organisation. However, they know that their success depends upon increasing their Sphere of Influence far beyond that which they would normally derive from the position that they hold and they strive energetically to increase its diameter every day.

There are multiple ways in which they can do this but, at the core, is a belief in what they want to achieve and a willingness to create the networks required to achieve it. In the Digital era in which we now live, this is much easier in terms of the media that

PRINCIPLES AND PURPOSE

can be used for this, although this has not diminished the personal courage required. Social media in particular have enabled the way by which the Lean Leader may increase their Sphere of Influence beyond those people that they meet in person and instead reach a Global audience and, whilst external sites like LinkedIn are great tools for this, internal social media sites, such as those provided by Socialcast8, and the use of Webinars and Webcasts, are excellent ways to engage with the Organisation directly and to ensure that their voice is heard.

Sphere of Control, Influence and Everything else In case the metaphor of the Mosquito has engendered the idea that Mosquito Leadership creates a nuisance within the Organisation and someone to be eradicated, the Lean Leader is not someone who is fighting with the Organisation but, instead, someone who believes passionately in the Goals of the Business and is highly engaged in challenging the business to meet those Goals in a better way; more effectively and with greater success than they otherwise would.

They are certainly a disruptive influence, but in a very positive sense, as they consistently ask the difficult questions of the organisation and expect that the Status Quo be seen as something that will soon enter into history and,

whilst the Mosquito often carries the Malaria virus, which Humans try to avoid, the organisation will gain greatly from the Virus that the Mosquito Leader will infect it with; one of Transformation.

The Mosquito Leadership style is not easy, as it requires that the person is prepared to step out of their ‘comfort zone’ and expand upon their ‘normal’ duties.

They may find, in fact will often find, resistance from across the Organisation and will not ingratiate themselves with those who fear the change that they are advocating and are activist in bringing about.

The true Lean Leader, through the Mosquito Leadership style, will grow in their role as a thought leader and role model for change, delivering a Persistent Legacy, significant in their Organisation, which they, and everyone involved, can be extremely proud of.

Coaching Leadership The final Leadership style required to ‘Lead with Lean’ is coaching leadership and is integral to the Lean Leadership approach.

To illustrate this, imagine how frustrating it must be as the Coach of a Football (Soccer) Team during the game; at worst they see their hard-worked game plan evaporate in front of their very eyes and, at best, they may win but have to watch as not everything goes to plan and they rely on their Players to make changes to the play as they respond to the actions of the opposition.

Getting in the way of the ‘players’

They can, of course, try to speak to their players whilst they are playing and it’s not unusual to observe coaches who arrive at the game cool and collected screaming incessantly at their players during the game. However, what is crucial is, that no matter how much they may try to influence their players with their cries from the sideline, they are not on the field of play and the game is played by the players themselves.

Whilst the Coach may have an overwhelming urge to enter the field of play, they have the advantage of being prohibited by the laws of the game and therefore have no choice but to coach from the sidelines. It is an advantage because, if they were allowed to enter the field of play, they may try to do the work for the players but would, inevitably, only make things worse and demotivate the team.

Relating this back to Business, far too often Leaders micro-manage their team members, entering the ‘field of play’ and trying to play the game for them. However, ironically, the problem solving is

June 2016 | the-lmj.com

17

PRINCIPLES AND PURPOSE

usually not done at the Gemba but in a Meeting room or remote office, using online dashboards, discussing perceptions of problems and opinions on solutions, which far too often do not include the insight or expertise of the people who actually do the work. Instead, a new mandate, set of Golden Rules or Procedure are sent to those who do the work, providing them with the ‘answer’ to a problem they didn’t know existed and which doesn’t address the root cause(s) of the issues that they face every day.

The result is the dichotomy of a system that has both over-intimate management, fire-fighting on a daily basis, combined with remote ‘problem solving’, which leads to demotivated and frustrated team members and, at best, average Operational Performance.

As Steve Jobs once said: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so that they can tell us what to do” Learning from the laws of the game of Football (and most Sports), there is the need to build a system where the Leaders of the organisation can work to set its vision, mission, values and its strategic objectives. Then, by working with their teams, they deploy the objectives into goals with clear deliverables that are cascaded throughout the organisation and, through the training and development of their staff, build the overall organisational capability that will support the creation of a high performance culture.

Crucially, they must allow their People to do the work and problem solve, without ‘telling’

18

June 2016 | the-lmj.com

them what to do. This is not to say that Leaders should be banned from going to the Gemba, quite the contrary, we want them there more than they are on average, as highlighted by both the visible and activist leadership styles, but what we need is for them to coach, not try to play the game for their Team.

This requires a different skill-set and mind-set than most leaders have developed throughout their careers, changing their role from being the most experienced and expert of the team (or at least thinking that), able to tell everyone how to fix the problems, to a coaching role, asking the right questions to enable the team to solve their problems in a structural way. Most importantly, they need to allow their people to make mistakes and learn from them, doing things differently than they would personally prefer.

Most importantly, they need to allow their people to make mistakes and learn from them, doing things differently than they would personally prefer.

This is a key component of Lean Leadership, as it is the only way that an individual can have the scale of impact that is necessary to drive high business performance; getting results through the enablement of others’ skills and their engagement in the work, as opposed to by telling them what to do.

This takes a leap of faith for the individual Leader, facing a perceived loss of control and a fear that performance will spiral out of control without their explicit intervention and direction. It is true that, if control has been the norm in the organisation or group then

a complete change overnight is not advisable, as the team will not have the requisite organisational capability. Nevertheless, the change in behaviour and waysof-working has to begin and make significant progress whilst we build the capability and trust of the team.

Moving to a Coaching Leadership style will not be easy.

However, it is essential to achieve long-term sustainable success for the organisation.

Conclusion If we are to deliver a truly excellent organisation, with a Quality Mindset, we need to lead in a way that enables it. The proposition of this article was that Lean Leadership is the best way to achieve this, provided that it is practice authentically, consistently and in the long-term, regardless of business pressures.

The 4 Leadership styles required to achieve Lean Leadership are complementary and, whilst each on their own are already positive, the cumulative impact is much larger than the sum of the individual parts.

In fact, if one or more of them is overlooked or omitted, there will be a deleterious effect on the overall efficacy of the Leadership and so the Leader must ensure that they focus effectively on building their competence in all 4 styles. In fact, the most positive approach is where Leadership teams are able to agree that they will all live and breathe Lean Leadership and are able to support and challenge each other along their journey and this

PRINCIPLES AND PURPOSE

The Lean Leadership Venn Diagram

•

•

is the approach taken in Royal Philips, where the Lean Excellence Model9 ensures a unified and collective method for the deployment of Lean Thinking.

running in harmony.

If one, or more, is missing, there will be consequences for the impact of the Leadership Style within the organisation:

Bringing together the Leadership Styles required to achieve Lean Leadership in a Venn Diagram, it is clear that it can only be achieved when all 4 styles are

•

•

Without Leadership Activism the essential element of Role Modelling and leading by example will be missed Without Visible Leadership

the employees will not see what the Leader is doing and they will become detached from the teams Without Mosquito Leadership the Leader’s impact on the organisation will be limited to their span of control, which will usually, even in the case of Senior Leaders, be quite small Without Coaching Leadership, the Leadership will appear directive and the results will be unsustainable

Where Lean Leadership is practiced, learnt and applied, employee engagement will bloom and the organisation’s performance thrive, bringing benefits for everyone; Customer, Employee, Leader and Shareholder.

Notes: 1.

Gallup 2013 Employee Engagement Survey; Gallup.com

2.

Harvard Business Review 2013; The Impact of Employee Engagement on Performance

3.

The Lean Turnaround by Art Byrne, ISBN-10: 0071800670

4.

Virginia Mason named one of America’s 100 Best Hospitals by Healthgrades for the third year: Link

5.

Taaichi Ohno’s workplace management: Link

6.

Kamishibai is a form of layered audit, whereby the Leader goes to the place of work (Gemba) and asks coaching questions to help one of their team members to identify waste in the process and implement an improvement to the standard (Kaizen)

7.

A Kanban Development board is a tool for tracking the progress of development of a Product or Service through its breakdown into ‘work packages’, with owners and timescales, which progress through the stages against a timeline and swiftly visualise where delays are occurring and support is required. They are typically found in Development groups applying a form of Lean Thinking called Agile

8.

Socialcast (Link) is an Enterprise Social Media platform that allows internal collaboration with the option of selective external access. It is customisable for the organisation to adapt it to their particular needs. The Author has no commercial or financial interest in this company and offers only a personal user recommendation without expert opinion.

9.

The Philips Lean Excellence Model is a phased model for the deployment of Lean Thinking into Royal Philips. It is a standardised model that covers the whole organisation across the Idea-to-Market, Market-to-Order and Orderto-Cash Value Streams and the enabling functions.

June 2016 | the-lmj.com

19

PRINCIPLES AND PURPOSE

STILL TIME TO ENTER!

In association with:

ENTRY DEADLINE: 30 JUNE 2016

Do you effectively use lean methodologies and techniques?

Do you have an engaged workforce and development of a lasting culture of continuous improvement?

Enter the World Class Manufacturing Award WWW.THEMANUFACTURERMXAWARDS.COM

Headline sponsor:

Co-sponsor:

Category sponsors: I n d u s t r y F o r u m

Judging day sponsor:

20

June 2016 | the-lmj.com

Partner:

Supported by:

Contact: Phone: 020 7401 6033 | Email: awards@hennikgroup.com | @TMMXAwards #TMMXAwards

PRINCIPLES AND PURPOSE

Value Confusion: The Problem of Lean in Public Services Simon Elias discusses the problems with what value means in public services and how best to discern it.

For well over a decade continuous improvement approaches have been formally applied in the public sector in the UK and elsewhere, in an attempt to improve service quality and streamline processes, often in response to cuts in public expenditure budgets imposed by governments.

Many public services in the UK including defence, healthcare, police, higher education, central and local government - have

now, to a greater or lesser extent, implemented continuous improvement (CI) programmes of various shapes and sizes.

However, while there are numerous examples of successful initiatives at a process level, questions remain about whether real systemic changes are being made that will produce the long term sustainable CI culture desired.

This article examines the nature of the lean thinking that has been

Simon Elias Director, Lean Competancy Services

June 2016 | the-lmj.com

21

PRINCIPLES AND PURPOSE

embraced and calls for a debate on the development of a new definition of lean for public services.

It contends that the adoption of an unadapted lean approach that is primarily geared for the private competitive market has meant that public service organisations have misunderstood the nature of value in the public sector, which has created counter-productive distractions and raises issues on lean’s ability to help engineer long term, systemic change.

Lean & Competitive advantage This discussion about lean’s role in improving public services starts with examining the purpose of lean thinking and lean methods.

The roots of contemporary lean thinking can be traced to the development of the Toyota Production System (TPS) after the second world war and for Taiichi Ohno – Toyota’s chief engineer and architect of the system – it can reasonably be deduced that the ultimate aim of TPS was to create competitive advantage for Toyota, so that buyers of cars chose a Toyota model over those of its competitors.

This was achieved by producing a vehicle that delivered clear value for customers in terms of its cost, quality, reliability, design, performance and so on.

The production system’s design was influenced by a post-war environment characterised by shortages and constraints and TPS’s particular ability was to be effective in removing waste from processes and creating flow, thus enhancing customer value

22

June 2016 | the-lmj.com

adding activities and so creating additional capacity that could be used to sell more cars and expand the business.

The lean approach, as it was later termed by Womack, Jones and Roos, based on TPS principles fitted perfectly into the free market competitive model and from the 1980’s many companies, starting with those in the automotive and aerospace sectors readily attempted to embrace the ideas.

Thus contemporary lean thinking became a common feature in many businesses strategies and was able to provide an actionable implementation framework that could be adapted for different business environments and sectors.

The essence of the free market model is that the customer is able to choose among competing offerings and will part with his or her money to the producer that can deliver the greatest perceived value.

This classic model positions the private consumer - the customer - as the arbiter of value, whose decisions will ensure that competing businesses will strive to be more effective in meeting his or her needs and delivering the right products at the right prices.

Marketisation of public services UK public policy in the 1980’s was dominated by the neoliberal thinking of Prime Minister Thatcher and her Conservative governments, which placed a strong emphasis on the virtues of competition and a view that the size and influence of the state should be reduced. Public services were considered bloated, with inherent inefficiencies and a drag on economic growth.

New Public Management (NPM) emerged as the supporting doctrine to this policy, that advocated the imposition in the public sector of management techniques and practices drawn mainly from the private sector, as according to NPM greater market orientation would lead to better cost-efficiency, with public servants becoming responsive to customers, rather than clients and constituents, with the mechanisms for achieving policy objectives being market driven.

NPM reforms shifted the emphasis from traditional public administration to public management and this included decentralisation and devolution of budgets and control, the increasing use of markets and competition in the provision of public services (e.g., contracting out and other market-type mechanisms), and increasing emphasis on performance, outputs and a customer orientation.

Some parts of the public sector left it completely through privatisations, such as utilities, transportation and telecommunications; semiautonomous agencies were created, such as the DVLA and outsourcing major capital projects

PRINCIPLES AND PURPOSE

through private finance initiatives became common.

The customer became further entrenched in the public sector psyche when John Major’s government introduced the Citizen’s Charter in 1991, which was an award granted to institutions for exceptional public service. As its website stated, “Charter Mark is unique among quality improvement tools in that it puts the customer first”. Its selfassessment toolkit contained six criteria, the second being actively engaging with your customers, partners and staff.

The Citizen’s Charter was replaced in 2005 by the Customer Service Excellence standard, led by the Cabinet Office, which aimed to “bring professional, highlevel customer service concepts into common currency with every customer service by offering a unique improvement tool to help those delivering services put their customers at the core of what they do”.

When the formalised and packaged versions of contemporary lean thinking and CI appeared from the 1990’s, it was a logical step for public sector organisations to adopt these approaches as part of the NPM agenda, especially as continuous improvement was integral to initiatives such as Citizen’s Charter and Customer Service Excellence, as these could help them cope with increasing demand for their services, coupled with reducing budgets and the drive to be customer focussed.

Techniques to reduce waste and costs were particularly attractive, even if the resultant released capacity could rarely be used to ‘grow the business’ as it could be in the private sector.

Thus public services readily and enthusiastically embraced all aspects of lean philosophy, integral to which was a market orientation, where the identification and delivery of customer value was paramount.

The Nature of value & the customer in public services This offered public sector organisations the opportunity to be recognised for achieving Customer Service Excellence, assessed against five criteria, which included ‘customer insight’.

To date, several hundred public sector organisations are listed on its website as having achieved Customer Service Excellence.

A process is a process, whether it is in the private or public sector and so it can be argued that process thinking, as defined

by System Thinking advocates such as W Edwards Deming, is equally applicable to both, since waste removal, improving quality, reducing lead time and enhancing flow are universal aims.

So while it seems reasonable for public services to use the techniques at a process level to produce some public good, it is argued that by including an explicit customer orientation, it leads to a range of problems.

A key issue is the NPM contention that there are customers in public services for whom value is identified and then delivered.

The classic characteristics of customers is their ability to choose between different products and suppliers and spend their money according to the offering that delivers the greatest perceived value. However, in this sense, a customer rarely exists in a public sector context.

Instead, according to writers such as Teeuwen, they are citizens, who can have several roles at different times, including that of user, subject, voter and partner; occasionally, the citizen can be a customer, such as when choosing among transportation options, but it is not the dominant role. To this list could be added patient and prisoner and even obligatee, as Mark Moore describes taxpayers, who clearly have no individual say in taxation, but simply an obligation to pay up. In most of the roles, the individual citizen does not ‘specify the value that is to be delivered’ and has no choice in service provider.

Therefore, it is suggested that the concept of an individual customer deciding on what constitutes value is flawed in a public sector context.

This can distort service design, lead to the use of inappropriate or unhelpful measurements with the numerical quantification of quality through targets, create expectations in citizens that June 2016 | the-lmj.com

23

PRINCIPLES AND PURPOSE

cannot be met (leading to frustration and dissatisfaction) and lead to confusion regarding the true purpose of the function or service.

Public value, not customer value Mark Moore in his seminal work Creating Public Value (1995) recognised the problem that the public sector manager has in working out the value question.

Whereas his or her private sector counterpart has a clear idea that the individual consumer is the ‘arbiter of value’ and makes choices on buying competing products based on the perceived value delivered, in the public sector he contends that the arbiter of value is not the individual, but the collective – that is, broadly society in general, acting he says “through the instrumentality of representative government” - and likely to be made up of service users, tax payers, service providers, elected officials, treasury and media.

Identifying what value to produce for a public service therefore has little to do with an examination of an individual’s needs and preferences. There is also no requirement to win custom and market share through a variety of product delighters, innovations and exceptional customer service.

The notion of public value has echoes of the 19th century Utilitarianism philosophy of Jeremy Bentham and John Stuart Mill, which stated that the goal of human conduct, laws, and institutions should be to produce the greatest happiness of the greatest number.

24

June 2016 | the-lmj.com

platform of legitimacy.

Other significant contributors to the public service value debate in the UK include John Benington at Warwick University (who has collaborated with Moore) and John Seddon, whose CHECK improvement methodology focuses on the need to identify purpose as a prime initial task in service improvement, rather than go down the customer/value route. Identifying purpose appears to have strong resonance with public value.

Identifying public value is not an easy proposition and because decisions are almost always about how to allocate scarce resources, there will be compromise and invariably an individual’s demands will be subordinate to those of society in general.

Moore contends that the pursuit of public value aims requires the support of key external stakeholders, such as government, partners, users, interest groups and donors. Public sector decision makers must be accountable to these groups and to engage them in an ongoing dialogue and build a coalition of support to create this

He describes a “strategic triangle”, which represents the dimensions that the public service manager needs to consider in developing a course of action, comprising of the authorising or political environment (legitimacy and support), the operational capacity and the public value (purpose).

The proposition in the strategic triangle is that purpose, capacity and legitimacy must be aligned in order to provide the public manager with the necessary authority to create public value through a particular course of action.

Service vs. Value As a result of the NPM agenda, citizens have been led to believe that they are customers of public services, just like they are customers of private businesses and therefore have the same service expectations of public services as when they transact with, for example, retailers John Lewis or Amazon. Similarly, public sector employees have been encouraged to treat the recipients of their services like private sector customers.

The Strategic Triangle. Adapted from Creating Public Value, Mark Moore.

PRINCIPLES AND PURPOSE

This does not mean that public services should not strive to deliver a productive and positive experience to its users, patients, obligatees etc., especially as the outcome of effective process thinking should supply exactly that. As taxpayers, citizens have a reasonable expectation to receive quick, effective and courteous service, but this may have little to do with delivering public value or in achieving its prime purpose.

Indeed, public value is often at odds with private value; consider airport runway expansion in the south east of England, the route of the HS2 train from London to Birmingham, the creation of dedicated cancer drug funds, the gritting of roads in icy conditions and the building of flood defences.

Many public service measures, such as in healthcare, have an explicit customer service orientation and a significant amount of debate and political energy is spent scrutinising these.

This is not to say that waiting times for treatment or answering a phone call are not relevant, but that they distract from the important question of assessing and understanding the public value that the particular service should strive to deliver.

HM Revenue & Customs (HMRC) regularly receives significant media and public criticism and a report by the National Audit Office in 2012 into its customer service performance concluded that “while the department has made some welcome improvements to its arrangements for answering calls from the public, its current performance represents poor value for money for customers.”

In 2014-15, HMRC collected a

record £518 billion in total tax revenues, employing some 65,000 people. In 2005-06, it collected £404 billion with around 104,000 staff; this means that over a decade it has collected 25% more revenue with 38% fewer staff. It has also made cost savings of £991 million over the past four years. HMRC delivers public value by maximising the tax take using as few as resources as practical, though clearly it does have service obligations to its users.

Interestingly, the National Audit Office report comments that “HMRC faces difficult decisions about whether it should aspire to meet the service performance standards of a commercial organization. It could do only by spending significantly more money or becoming substantially more cost effective.”

This is the nub of the dilemma faced by many public services and a key question is whether it should indeed strive to be like a commercial organisation and expend more and more resources in doing so. However, service should not be confused with value.

In the private sector there usually a clear relationship between the price paid and the service received. The Kano model refers to performance or linear attributes of an offering – ‘more is better’ – where increased functionality or quality of execution will result in increased customer satisfaction.

For example, we can choose the speed of delivery of an online purchase by selecting either the free (3 to 5 days), standard (2 days) or premium (next day) service and we will make a conscious decision to pay for the one we desire.

This scenario takes place in some UK public services, such as obtaining a new passport, where there are differently priced one week Fast Track service and one day Premium service, though in most public services a direct service-price relationship does not exist.

Conclusions & Future Discussion The classic lean thinking approach that emerged from TPS is ideally suited to organisations operating in a competitive market environment because of its focus on customer value, its ability to help create competitive advantage, grow market share and ultimately enhance shareholder value.

This article contends that the wholesale adoption of this approach by public services is inappropriate, as it does not recognise the difference between private value and public value.

Just as there was a debate in the early 2000’s about whether the lean thinking that was developed and used in manufacturing was suitable for service environments, there needs to be a debate about how it should be adapted for public services and in particular the move towards adopting a public value perspective.

The following suggestions can help inform this debate: •

Lean practitioners in public services should move away from an overt focus on individual customers and the value they demand. Those using Womack and Jones’ first lean principle

June 2016 | the-lmj.com

25

PRINCIPLES AND PURPOSE

•

(‘specify value from the standpoint of the customer’) should adapt it so that the emphasis is on specifying public value that is to be delivered, linked to the purpose of the organisation.

•

There needs to be a redefinition of what it means to be a customer of public services; while it is probably too late and counterproductive to abandon the term customer, a new specific public service lean vocabulary will help provide clarification. As Mark Moore comments “the individual who matters is not a person who thinks of themselves as a customer, but as a citizen”.

•

•

26

Lean leadership in the public sector should primarily focus on understanding and identifying public value.

Mangers need to focus specifying the public value that they are trying to deliver and make it clear that this can be different or even in opposition to private value.

The key question that a lean manager needs to ask, according to Benington and Moore, is not what does the public most value? but what adds most value to the public sphere?

The recipients of public services - citizens - need to be educated as to what they can reasonably expect from the public sector in terms of service levels and understand that when they ‘consume’ public services, they are not customers in the same way as when they consume in the private market; they do not have the same rights,

June 2016 | the-lmj.com

advantages or privileges.

The level of service provided in delivering services needs to be balanced against the cost of providing it. Citizens also need to understand that public value will sometimes be at odds with private value.

•

Public services generally do not present products to a market in the same way that private companies do, the latter then plotting the optimum value stream for delivery to the customer.

Rather, they usually wait for demand for services and react; this suggests there should be less emphasis on value stream management and more on demand analysis and management – with a greater emphasis on understanding the nature of the demand(quantity and quality), proactively attempting to limit and control it in many circumstances.

Few would argue that effectively applied process thinking cannot have a positive role to play in improving public services and it is contended that adopting a public value perspective will enhance its overall impact.

But the shift from private value to public value is not without its challenges; several decades of NPM thinking has created a mindset that may be difficult to change and moving to more utilitarian position in an age of individualism may be a daunting prospect.

Mark Moore says that a key reason why public value is a challenging idea is because it brings us out of the world of the individual and back into the world of interdependence and the

collective; and that, he claims, “runs contrary to the direction that everyone seems to be going in”.

About the Author Simon Elias Simon is Director of Lean Competency Services Ltd, launched in 2014, which holds the Cardiff University licence to operate the Lean Competency System, of which he was the chief architect. He was previously director of the Lean Enterprise Research Centre, Cardiff University, which he joined in 1997. Prior to that he had a career in marketing management, research and planning, with Johnson Controls Inc, The Automobile Association, Compass and Thorn EMI. He has a masters in marketing from the City University Business School, London and professional qualifications in marketing and market research. elias@leancompetency.org

References & Further Reading Building our Future: Transforming the way HMRC serves the UK (2015), HMRC Creating Public Value (1995), Mark Moore Customer Service Excellence website: www. customerserviceexcellence.uk.com Freedom from Command & Control (2005), John Seddon Lean for the Public Sector (2011), Teeuwen Lean Thinking (1995), Womack & Jones National Archives, Charter Mark website: http://webarchive.nationalarchives.gov. uk/20040104233104/cabinetoffice.gov.uk/ chartermark/ National Audit office website: www.nao.org.uk Public Sector Management (2012) Norman Flynn Public Value: Theory and Practice Paperback (2010), Benington & Moore Service Systems Toolbox (2012), John Bicheno Systems Thinking in the Public Sector (2010), John Seddon The Guardian: www.theguardian.com/ lifeandstyle/2016/mar/02/narcissism-epidemic-selfobsession-attention-seeking-oversharing The Machine that Changed the World (1990), Womack, Jones & Roos

IN SUMMARY

In Summary: The LMJ OpEx Conference Fred Tongue gives his thoughts on last month’s conference and picks out some of his personal highlights from two days of insight and learning from the event in London.

This month was a fantastic one for The LMJ after hosting our OpEx conference in Heathrow.

It took months of planning and organisation, then it was all over in a matter of, what felt like, seconds.

100 people turned out to listen and learn from our line-up of wonderful speakers who came from the UK, Europe and as far

away as the US to impart wisdom on our eager delegates.

The conference started with our wonderful chair and compere, Steve Yorkstone, opening the proceedings and welcoming everyone who had made the journey to Heathrow. It was no easy feat for everyone to get together with travel problems

on the tube and motorways, just compounding the need for operational excellence in running an organisation.

The first presentation came from Ian Paton and Paul Barkell from BD Medical. The two of them gave us all a fascinating presentation about process optimisation in a multi-billion

IN SUMMARY

personal highlight as it set the tone for the rest of the conference; there were lots of other fantastic speakers to follow.

Another that I would like to single out is Fred Pernet, of Proagile, who started day two in a similarly brilliant fashion. He presented on how to optimise enterprise agility.

The kick off to the conference, with Fred Tongue starting the proceedings.

dollar medical manufacturer.

With over 40 years combined experience, the two started out by looking at how to achieve another step change in output after a continuous improvement programme starts to level out.

BD have managed to achieve an extra 10 to 20 per cent increase in output, from existing assets in the past three years, thanks to the process optimisation that they have implemented. BD defines process optimisation as a set of simple tools to enable opportunities in output to be realised.

One of the issues that BD faced was a marked increase in demand for a product that they were planning on retiring. The organisation wanted to scale back the production of one type of needle because they had produced a more technologically advanced one. What the organisation didn’t expect was a surge in demand from emerging markets for their product. Because of this, BD had to produce more of the product that they planned to

28

June 2016 | the-lmj.com

retire, but didn’t have any spare capacity to produce it.

This is where the process improvement comes in. The organisation managed to achieve 25% extra output with no extra investment. The key is to go from unconscious incompetence to unconscious competence via conscious incompetence and conscious competence on the way. In their experience BD was greeted with cynicism, then through coaching, came quick wins that bring confidence, until eventually a culture of questioning is adopted once the workforce has realised what is possible. This culture means that the workforce looks for the quick wins and ensures that everyone is pulling in the right direction.

The presentation was a fantastic way to kick off the conference and gave a great insight in to the practical implementation the organisation used and the cultural change necessary to achieve it.

After that opening, which was a

He began with a rousing talk, one of his standout quotes being, “If you don’t value your health, your health isn’t valuable. If you don’t value your agility, your agility isn’t valuable.” He went on to say that by simply pushing work through a system, whether that work is done on a production line, an office or any other environment, then it makes you slow to respond to customer requirements.

He also discussed the need for teams if you want to be agile, being agile is all about being quick to react and adaptable. Typically there is a hierarchy of regimented people, arranged in to teams of people with the same kind of skills under one management team, Fred said that this was not an agile way to run an organisation.

Sometimes organisations have teams of people with different skills sets under one management team, while this makes for greater agility, it still isn’t the optimum make up. In an ideal world an organisation would have selfgoverning teams with no need for management, similar to how the American military are organised.

Each group would be made up of individuals with different skill sets to ensure that they can be extremely agile and adaptive.

The flow of the conference was great each day thanks, in part, to the openers that we were treated to. On both days

IN SUMMARY

the speakers were engaging and knowledgeable and both interacted extremely well in the question and answer sections of their respective presentations.

The theme of teams and culture was carried on throughout the conference and Sam Kishaish, from Volvo, discussed the need for self-driving teams if you ever want to achieve operational excellence. His point was that it is massively important to have a team of capable employees that don’t need constant attention and guidance.

He likened self-driving teams to self-driving cars in the sense that it takes a lot of work and development to get the technology to a point that it is completely self-sufficient. Similarly it takes a lot of work for teams to become self-driving, they need direction, awareness and a lot of training. Just like a car they will require servicing to ensure the team is working to its full potential and sometimes the team, like the

Steve Yorkstone presenting Colin Boughton with his Lean Top 25 certificate.

Delegates enjoying one of the networking breaks and dsicussing the morning’s keynotes.

car, may need some direction if things go wrong.

Once the investment and infrastructure is in place for selfdriving teams to make the most of their freedom, the rewards will soon follow. Not only will teams feel more empowered and engaged without constant management pressure, but it will also free up management to undertake the more typical management tasks and use their time more productively.

Company culture was discussed at some length during the conference, with many speakers outlining theory and hypothesis, but emphasising the importance of culture in achieving operational excellence.

John Hogg, from the University of Strathclyde, gave a presentation all about how culture drives operational excellence and vice versa. Evidencing cultural change was the crux of his presentation and together with the delegates discussed the how to successfully overcome the problems of evidencing changes.

He went through some of the difficulties that are facing the higher education sector in particular, which included reduced funding and more stringent rules on efficiency to name a couple.

He described the processes that the University of Strathclyde have used, all of which are underpinned by lean tools and techniques.

He stressed the importance of creating a culture that evidences benefits in being key to any operational excellence.

The event was a wonderful celebration of all things to do with lean, continuous improvement and operational excellence; as such it

June 2016 | the-lmj.com

29

IN SUMMARY

BD Medical giving their opening keynote about process optimisation in a multi billion dollar company.

was only right that we announce our annual Lean Top 25 report. The report celebrates the individuals that are pushing forward lean and continuous improvement in their organisation. Attendees to the conference turned up to pass on their congratulations to those that were included in the report, to be included you have to be nominated by a peer and then pass through a judging process to be included in the final list.

With representatives from law, engineering, healthcare, education and many more industries, it is a fantastic way to showcase the seemingly innumerable applications of lean.

It is an opportunity to heap praise and recognition on those at the

30

June 2016 | the-lmj.com

bleeding edge of innovation and implementation in the lean and operational excellence.

It was a great couple of days, with some fantastic insight and learning, as well as some wonderful networking that connected a lot of like-minded practitioners and academics alike.

On a personal note, I met some wonderful people, many of which I had only had email or phone correspondence before. Seeing so many people that were passionate about lean and learning more was fantastic. Attendees would go in to streams that weren’t anything to do with their industry in order to gain a different insight and point of view that they could take home

with them.

This epitomised the conference, a group of likeminded individuals all completely focused on learning something that they can implement in their own organisation. I’d like to thank everyone who came and all the fantastic speakers.

Events like this really do reinvigorate you with a new passion to go away and make a positive difference in your organisation. We are already planning for next year and will make sure that we continue to improve the processes that go in to organising it.

Recruitment

The specialists in manufacturing recruitment Connecting opportunity with talent We are a specialist recruitment consultancy dealing exclusively with all senior level appointments in the manufacturing sector.

Contact us if you have any vacancies or if you would like to be considered for opportunities.

hennikrecruitment.com +44 (0)20 3111 1491

Part of the Hennik Group, publishers of ‘The Manufacturer’ magazine.

h.bedevi@hennikgroup.com

HennikExec

Grow your manufacturing business Executive MSc in Operations Excellence Our executive MSc in Operations Excellence develops the skills required for manufacturing leaders to deliver revenue growth and increase profit through: • Increasing efficiency • Improving quality • Driving cost effectiveness.

Our flexible, focused learning:

Accredited by:

“The Operations Excellence MSc has been invaluable to me; it is relevant to the real world and provides excellent learning that is applicable in industry.”

– Recent participant

• Inspires professionals who will lead the development of the operations supply chain • Develops the knowledge required to design and implement change that delivers performance improvement • Helps to transform businesses into world class organisations • Fosters the skills to drive new business strategies.

To find out more:  enquiries@cranfield.ac.uk  +44 (0)1234 758008  www.cranfield.ac.uk/opex Join us at our free annual Operations Excellence Conference on the 21 June 2016. www.cranfield.ac.uk/achievingopex2016 32

June 2016 | the-lmj.com

LEAN ONLINE

Lean Online Kevin Meyer has shared the latest installment of the Lean Thinking Podcast, full of though provoking commentary. http://bit.ly/1Z3hZ5r

This is just some of the wonderful reaction we had from delegates that came to The LMJ OpEx Conference. Lots of positive feedback and some great interactions. @TheLeanMJ

John Hogg from the University of Strathclyde and Top 25 alumni has written a blog all about his experiences of The LMJ OpEx Conference, take a look at what he thought and his favourite learning points http://bit.ly/27U3cQJ

June 2016 | the-lmj.com

33

LEAN EVENTS

Kanban for Practitioners

Agile Open-Spain

July Lean Launchpad: Two day event

5th-6th July, London, England

1st-2nd July, Santiago de Compostela, Spain

13th-14th July, Chorley, England

Kanban for Practitioners is a highly interactive two-day course . It combines teaching, group discussions and a fully immersive simulation to illustrate how the Kanban Method helps individuals, teams, and organisations to manage and improve the delivery of products and services to their customers.

To find out more and to book please visit: http://bit.ly/1UfZHg7

The Agile Open Spain 2016 (AOS2016) is an event about agile methodologies and experience in which everyone can participate conference. Unlike a normal congress or conference, the attendees concoct AOS2016 proposing agenda topics for open talks and workshops about what they would like to share or learn.

(Be aware this is not a Spanish speaking event) To find out more please visit: http://bit.ly/1Ug2oOH

The Lean Launchpad is part of the Growth Support Programme, a fully funded programme delivered by Winning Pitch and Enterprise4all. The Lean Launchpad is a 2-day programme of support that has been specifically designed to equip you with the tools, knowledge and techniques not only to launch a successful enterprise but also to accelerate your growth.

To book or to find out more please visit: http://bit.ly/249I8AW

Lean Six Sigma Advanced Green Belt - Data Analysis Techniques 5th-7th July, London, England The Lean Six Sigma Advanced Green Belt programme consists of Lean Six Sigma Green Belt plus an additional two 3-day modules: Process Measurement and Control and Data Analysis Techniques which use Minitab software to add a comprehensive data toolset.

34

June 2016 | the-lmj.com

These powerful tools will enable your improvement projects to take performance to the next level and promote the development of data based decision making in your organisation.

For more information visit: http://bit.ly/1OPSYoR

For information about our own events visit our website at: the-lmj.com/ category/event/

$65 – £45 –

€50

SUBS FORM Novembe

r 2 0 15

| www.lean

mj.com

annual subscription to The LMJ, of 10 issues, is £295 for the print edition and only £195 for AnAn annual subscription to LMJ, of 10 issues, is £295 for the print edition the digital edition. and only £195 for the digital edition.

To subscribe, please complete all the fields below, send us this page (or a photocopy) and

To subscribe, please complete all the fields below, send us this page (or a photocopy) and will contact you within five days to process your subscription. wewe will contact you within five days to process your subscription.

LIMITLESS LEAN

Some of the benefits of subscribing to The LMJ include:

Some theaccess benefitsto ofthe subscribing LMJ include: - online back catalogue of articles from • ofFull websitetoleanmj.com January 2012

Full access to the website - online back catalogue articles from • 20% discount to Theleanmj.com LMJ events throughout the year,ofincluding theJanuary flagship2012 The LMJ 20% discount to LMJ events throughout the year, including the flagship LMJ Annual European Conference Annual Conference

Forename:

same time?

Laser Lean: LMJ first hand.

visits SPI lasers

to witness their

Surname:

W

Position:

Company:

Email:

Phone number:

lean routine

W

Title:

on improving Can you keep n forever, your organisatio to the or is there a limit lean? powers of

tatives include represen Forum, s in this issue AB, Industry and interview Organisations University of Lincoln, Revere ia University. from: SPI Lasers, s School, Columb Cardiff Busines to keep different ways IN THIS ISSUE: Improvement: of Continuous Three Levels and improving. lean at the you moving and ve be innovati on: Can you Lean and Innovati

Address Line 1:

W

Address Line 2: Town:

Country:

Post/Zip Code:

.

Company main activity:

L

Company or personal twitter handle: Company tick ONE box) Companysector sector(Please (Please tick ONE box) Local government Military Prof Services Retail

Other:

A

Finance Government Healthcare Legal

Areyou youinterested interested contributing to The LeanLMJ? Management Journal?

Are inin contributing to the Yes

No

N

LeanLMJ Management Journal mailing list?

Are inin being added to the Areyou youinterested interested being added to The mailing list?

Yes

No

M

Among which areare of most interest to you? to you?

Amongthe thefollowing followingtopics, topics, which the most interesting Academic debate Standards Assessments Lean IT

.

Visual management Event reviews Case studies Research

J

Leadership Tools Coaching Employee engagement

Date:

C

Signature:

E

Civil Service Construction Consultant Engineering

I would also like to receive the Lean Management Journal’s FREE e-newsletter

M

SCAN AND EMAIL TO: lmj@hennikgroup.com or subscriptions@hennikgroup.com

O

POST TO: Hennik Group Subscriptions, 5th Floor, Elizabeth House, 39 York Road, London, SE1 7NQ, FAX THIS FORM TO: +44 (0)844 854 1010 UK SCAN EMAIL TO:Subscriptions, subscriptions@hennikgroup.com POST TO: AND Hennik Group 5th Floor, Elizabeth House, 39 York Road, London, SE1 7NQ, UK

June 2016 | the-lmj.com

35

Hennik Research Elizabeth House, 39 York Road, London, SE1 7NQ T: +44 (0)20 7401 6033 www.hennikgroup.com

the-lmj.com 36

June 2016 | the-lmj.com