Wednesday, April 20, 2011

Lean in the Office: Assessing Value, Part 1

Executive Summary:
Often, the challenges of defining value-added work in the office environment, or measuring waste, roadblocks many businesses from attempting to apply the Lean methodology in the office.  However, if we allow a small adjustment to the Lean definition of Value, and forego a temptation to overanalyze the quantity of waste, we find it becomes very easy and effective to apply our Lean tools and methods to a part of the business where waste persists in large quantities.

The Rest of the Story:
A fundamental principle of the Lean methodology is the definition of Value.  In Lean terms, Value is perceived in the experience of the customer.  If a task or element of work improves or adds function or quality to the product or service, then it is said to be a value-added task.  If the work or task does not directly enhance the product-in-construction, it is said to be non-value-added.

In the office it becomes very difficult to see how the work done improves product or service in the eyes of the customer.  In fact, it often becomes difficult to see how some of the work in the office has anything at all to do with the product.  I believe that this very challenge is the reason that Lean is so rarely applied in the office environment.

I suggest one perspective, which I have used very successfully many times, to move past the roadblock of defining Value.  I suggest a redefinition of Value, which is enabled by a basic assumption. 

Once we have a working definition of value-added and non-value-added work, we must then address how to assess and measure the waste (non-value-added effort).  I offer two options for assessing and measuring waste in the office environment.  In today’s post, Part 1, I’ll describe the first.  In tomorrow’s post, Part 2, I’ll describe the second.

Defining Value:
A challenge that often stops us from applying Lean to the office environment is that the work we do in the office does not directly add Value to the product.  Therefore, the task of identifying value-added work and waste becomes arbitrary and overwhelming.  We become mentally stuck.

OK, so if we ignore order entry, sales, and customer service processes where it is easier to see how value is provided directly to a customer, we have a bunch of work that takes place in the office and it is all basically waste.  Except, we know we must do it in order to keep the business running.

In fact, it galls just a little to think of the hard work we put into marketing strategies, product roadmaps, and innovative R&D as waste, but it’s not work that our customers would pay us to do, so technically it is.  Therefore, I offer the assumption I mentioned above.  Assume that the office work is all overhead and waste.  There, it’s said.

That does not mean that it is all equally necessary, or that some of it isn’t more wasteful than the rest.  Intuitively, we all know that the three-hour meeting we snoozed through last week wasn’t the best use of our time.  So what do we do about it?

Allow an alternate definition of Value in the office environment.  In the office, we deal with information, not product.  We use the information to improve the business, make decisions, and to plan and design the next product or service. 

I suggest that instead of focusing on Value to the customer, in the office we focus on Value to the business.  Instead of focusing on product, we should focus on information.  I can hear the Lean purists screaming already.  Yes, I’ve had many arguments about this suggestion, but bear with me.

Yes, fundamentally speaking to the purest definition of Value, according to Lean, the office work is non-value-added waste.  Except, most of it is necessary to enable the value-added work in the factory to take place.  I suggest we accept a perspective that the activities in the office that enable the value-added work be treated as “valuable.”

Allow yourself and your team to accept that if the work in question is creating, improving, or enhancing information that will be used, then the work in question is value-added.  If the work in question, does not improve, enhance, or create information, or enable value-added activity (decisions), then it is non-value-added waste.

If you accept the above definitions of Value and Waste, then you can quickly adapt the classic categories of waste such as Overproduction, Over Processing, Waiting, Motion, etc. to the activities in the office, just as you do on the factory floor.  For more on this topic specifically, read my post titled, “Lean in the Office:  8 Wastes.”

If we accept that improving information or making decisions is Value-added, and all else is waste, we can begin to categorize our daily activities in such terms and we can quickly apply our Lean tools and focus on eliminating waste.  Here are some examples.

Value Added Activites:
  • Designing product in CAD:  it is creating the information needed to produce product
  • Refining designs in CAD based on analyses:  it is enhancing or improving the information needed to produce product
  • Constructing or adjusting your product roadmap:  it is creating or enhancing the information and decisions that will determine your next products
  • Collecting voice-of-the-customer data:  it creates the data that will be used to define and design your next product
  • Performing the accounting work to pay the business’s taxes:  tricky, but because it is necessary to the business and without doing so, you wouldn’t be able to continue producing product, it’s value-added
  • An office administrator building a spreadsheet for a business executive:  conditional, as long as the information in the spreadsheet will be used to make a vital business decision and does not already exist in another format

Waste Activites:
  • Redesigning product in CAD because the plan changed or information was lost:  this is rework resulting from a Defect
  • Constructing a product roadmap because the one you have is no longer valid:  this is rework and means that at least one version of the product roadmap is a Defect
  • Collecting voice-of-the-customer data that is not used:  if the information is not used then the effort to collect or create it is pure waste of the Overproduction variety
  • Two accountants independently prepare paperwork for paying taxes:  this is one version too many and is Overproduction waste
  • An office administrator extracting information from a database report and putting it into a spreadsheet or presentation for her boss:  this is manipulating existing information without improving it in any way and is therefore Over Processing

We could fill a book big enough to prop open your office door with all of the examples of office waste I’ve encountered.  I hope the above examples at least get you thinking.  Allow alternate definitions of Value and waste for the office, and you will start finding enormous opportunities to remove work that does nothing to serve the business or the customer.

Measuring Waste, Option 1:
Once you identify the waste, the next step in the Lean methodology is to measure the waste, prioritize it, and make your plan of attack.  Measuring waste in the office can be trouble.  For one thing, office processes are highly variable.  It may take five minutes to write a status report one week and two hours to prepare it the next week.  What number do you use?

Another problem with measuring waste is that office processes like product design and development, or R&D, or supplier qualification are not only highly variable, but they can take weeks or months to complete.  We really don’t want to measure several executions over months, make our change, and then spend several months re-measuring in order to prove we made a difference.

I offer the first of two options to solve the conundrum of measuring the waste.  Don’t measure it.  
(Pause for dramatic effect.)

Why do you need to measure it?  So we can prioritize it or so we can be sure we are attacking a meaningful problem is one answer.  So we can report how much of a difference we made with our change is another.

Let’s address the second reason first.  Most times, other than for curiosity, or to justify our efforts or Lean programs, we don’t really care how much waste we have eliminated, just that we aggressively eliminate as much as we can.  If the real reason we are attacking the waste is to get rid of it, and knowing is a fringe benefit, then don’t bother measuring it.  In fact, the measurement of it is waste itself.  Instead, spend your energy attacking more causes.

That brings us to how to prioritize our plan of attack.  Instead of measuring it, vote.  Get the personnel together who experience the waste and have them tell you where it hurts the most.  The greater pain usually corresponds to the greater waste.  If you get the answer wrong does it really matter?  You’ll probably get the real biggest hitter next in your list anyway.  The real point is to get rid of it.

You would be surprised, how quickly you can identify and begin attacking waste in the office if you forego the effort to accurately measure it and just address the pain where it is most prevalent.  The Lean methodology gives us a very disciplined structured way to approach waste elimination, and it works.  However, we shouldn’t let that discipline get in our way when it becomes cumbersome.

I don’t mean to say that we should get reckless or begin eliminating non-value-added tasks willy-nilly.  We still need to be careful not to pass the waste up or down stream, or to eliminate something that is waste, but still necessary.  I only suggest that we keep in mind the reasons why we measure the waste, and if those reasons are less important than eliminating what we already know to be a good target, we should err on the side of acting now instead of measuring for months.

The issue of defining Value and measuring waste often turns into a roadblock to applying the very powerful Lean methodology to the office environment where a great deal of waste persists.  When we change contexts for a powerful tool, we should allow ourselves to adjust the rules to go along with the new context or environment.

Give yourself and your team the leeway to accept that Value can include the creation and improvement of information necessary to the business, and that it is more important to eliminate waste than it is to precisely measure it, and you can do your office a great deal of good by using Lean to eliminate waste.

If you absolutely must have some reasonable measure of waste, then stay tuned for Part 2 of this post.  I’ll provide some suggestions to measure waste in the office without spending months to do so. 

In the mean time, try what I’ve suggested, and see how much waste you can identify today.  You might be surprised by what you find, or how easy it is.

Stay wise, friends.


  1. This comment has been removed by a blog administrator.

  2. A kind of office like this one is a sure stress-free environment. I personally congratulate you for identifying what you can do in a certain working a day.

  3. A stress-free office can also be an employee benefit, specially if the nature of work itself is stressful enough.

  4. For any business improvement, there should be a change in the funding strategy to track the funds that flow in the whole business. It's better to have an accounting software that's accurate just to be sure that every single penny is kept or spent properly.

  5. We cannot deny the fact that sitting in front of a computer or any typing machine could give a person stress and pain in some body parts. I remember my first weeks being a stenotype operator or commonly known as “court reporter,” I felt pain especially in my wrist and back part of my body, but as days passed, my body already adjusted to that type of work.

  6. As a person dealing with legal issues, sitting with a client for many hours hearing their complaints or seeking out legal advice can really stressful. That is why I make it a point to have a break once in a while to have my relaxation.

  7. There are instances that the office or environment affects the workers productivity. The manager would have to strategically devise a plan that would help them utilize a certain office space.

  8. This is a great guideline in the workplace. There should be productivity, slacking should not be allowed. There are ways to be productive even if tasks are not available. One example is debate among colleagues.

  9. To create a more conducive working place it is important to design the office accordingly. Studies show the way the office looks like will inspire employees to work harder.

  10. I think that office spaces still has value and all companies should invest with it. With the emergence of outsourcing, many companies rely solely on it. Not in all cases, this strategy is effective.

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  12. This looks like a good measure for determining if a business entity is getting anywhere positive, or if it's maintaining a efficient work flow or not. I wonder if it still needs some adjustment to be applicable to other sectors, like say the home improvement industry.

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  15. This principle is useful in doing a thesis or study on wastage and work value. However, there should be some form of inclusion of furniture and equipment that are vital in accomplishing and getting maximal work value.

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