Tuesday, May 24, 2011

Lean in the Office: A Two-Part Attack Strategy

Executive Summary:
When applying the Lean method to attacking waste in the office, there should be two parts to the strategy.  First, we must drive significant improvement efforts that affect major business functions and provide direct impact to the business bottom line.  Second, we must install an every-day practice of continuously attacking the small sources of waste.

The Rest of the Story:
In other posts, I have proposed some controversial changes to the rules regarding the Lean methodology so that it may be better applied to the office space.  Let’s dig a little deeper into why those rule changes are important and address some of the controversy.  This may help you explain it to your own teams.

Specifically, I have proposed that instead of defining Value Added as applying only to that which directly improves our customers’ experience, we should also apply it to the creation or enhancement of information that either produces product or otherwise serves the business.  I further proposed that we report both man-hours of waste eliminated and the direct impact of our efforts to the bottom line, though those numbers might not always agree.

We need to make the two adjustments proposed in order to successfully construct a culture of removing waste.  However, I will propose below an alternative to reporting man-hours of waste eliminated for those of us for whom such metrics are not well received or do not fit within our business culture.  First, let’s discuss why the proposed changes help us make lean work in the office.

Think of eliminating waste in the office like cleaning your bedroom and teaching your organization to do it like teaching your own child to do it.  Please do not infer the suggestion that your organization is made up of children.  Now, let’s look at how we teach our team or child to clean things up.

First, let’s get settled on what success looks like.  The whole point of doing Lean in the office is to get rid of the waste that robs our business of productivity and makes work much harder than it needs to be.  Therefore, for the sake of allegory, the point of a child keeping his or her room clean is to ensure good hygiene and to ensure that they can always find what they need, when they need it.  Obviously, there is also the value of good housekeeping and the discipline that goes with it in both cases.

Now, if as parents, we only poke our heads in the door once a week and inspect the room, what will happen behaviorally?  Will the room be clean every day, or just on inspection day?  Will the closet, dresser drawers, desk drawers, or under the bed be clean, or will the mess on the floor just be jammed into those out-of-site spaces?  Do we get the result we really want?

Some common “cures” are to pull random inspections, and to check the out-of-site spaces.  This increases the expectation that every space be tidy, at any given time.  However, how long can a parent keep up such an inspection process, and what is the motivator?  Must expectations be met in order to get an allowance?  Is there a loss of privilege if the expectations are not met?

Eventually, if we as parents keep enforcing the expectation, we can instill the discipline we are seeking, but the problem will be that we have only enforced the minimum standard of performance.  If your business depended upon your child being able to get into a uniform quickly, or find something in his or her desk, on demand, is a minimum standard what you really want?

Here is an alternative that might work for younger children, not necessarily for a teenager, but it also makes the point for our businesses.  Instead of enforcing a minimum standard through inspection, let’s encourage performance through a game, and also help the child innovate his or her own solutions.

Quiz the child on the status of the room.  How full is the laundry basket, and is it time to do laundry?  How fast can he or she find and get into uniform?  How fast can he or she make the bed?  Also, provide an incentive to improve performance.  Is there a reward if this week’s performance beats last week’s?  Is there an expectation that such is the case?

Throughout the process, we as parents and mentors must also provide insights and tools to help our children succeed in improving performance.  We must also let them experiment and we must refrain from punishing them if an experiment doesn’t prove to provide the improvement hoped for, especially if you and your child both learn from it.

Now instead of authoritarian dictation of a minimum standard, and the work environment that goes with it, you have a team that is devoted to daily or weekly getting the most out of its own performance and behaviors.  Which would you rather have?

I suspect you can already see the corollary to your office team.  True performance of Lean and the elimination of waste does not come from dictating that people do something on a periodic basis.  It comes from providing people with the knowledge and tools to improve their own performance and the reason and freedom for them to do so.

So here is where those two changes I mentioned come in, and why I suggest that the total strategy must be a two-part approach.  Obviously, we want to know that our efforts to bring the Lean methodology to the office are benefitting the business and we want to keep our personnel focused on improvements that clearly do so.  As a result, we absolutely should keep metrics on how our efforts affect the bottom line.

We should certainly target major business systems and processes that will affect the bottom line and make them more effective and efficient.  We should develop products faster.  We should turn around orders faster.  We should get more sales out of our marketing efforts.

Absolutely we should do the things mentioned, and it is clear how those things would increase revenues and profits and improve the business.  These things are like keeping the visible part of one’s bedroom picked up.  What about all the out-of-site spaces?

Much of the waste in the office that we should attack will be difficult to connect to the bottom line.  For example, if we clean up a database and eliminate 80 man-hours a month in search times for important data, clearly we have made a worthwhile difference.  However, because we didn’t remove anyone from the payroll we can’t show that this year’s expenses are any different than last, and we can’t prove that it had any impact on profit.

We should also do the little things, like cleaning up databases and eliminating waste involved with hunting down information, but what incentive is there to go through the hassle if it we can’t show it on the business profits that quarter?  This is where the suggestion to report man-hours of waste eliminated as a secondary metric.

By tracking both profits enabled and man-hours of waste eliminated, we allow our business personnel and leaders to target both major, visible improvements, and minor invisible ones, keeping the main room clean as well as the closet and dresser drawers.  Even though we can’t prove that an easy-to search database is going to make our business more effective and efficient in this quarter’s earnings, we know that it will add up with other small changes over a long time to make a difference.

If your business leadership or culture simply can’t tolerate two different metrics, or is not willing to entertain anything but a bottom-line number, and I have worked with some that weren’t, the alternative is much like the allegory above.  We must create expectations around how effectively we can perform every-day activities.

What we can do is begin documenting the routine activities in our various business functions.  This can be designing components, writing reports, building bills of material, whatever we do more than once in a great while.  If any of these things can be deemed unnecessary and eliminated, we should just do so.  For those that are important, we should get a feel for how long it takes to do the tasks.

Now, we set up challenges to our teams to reduce how long it takes to do these tasks.  Obviously, we need to give our teams the tools to problem solve and improve processes, and the freedom to experiment.  Set an expectation that each time a task is done, it be done more effectively than the previous time.

This is how we can motivate the small changes that need to take place, without a reportable metric.  Now for the catch-22.  How do we explain the importance of this activity without reporting to our management that we are making a difference to the business?  Obviously we must do so.  We can report how much time or how many man-hours are no longer spent doing regular activities, which brings us full circle.

It’s never easy to paint the elimination of waste in the office directly to the bottom line.  Sometimes when we do, we make the money trail and calculations so complicated that few are willing to accept our numbers anyway.  This is often the reason that businesses do not apply the Lean methods to the office, but there is so much waste, that I encourage you to work with your leadership to find an acceptable report or metric to address it.

Let’s take a half-step back in our discussion.  Let’s pretend that we have a metric or a behavior that will enable us to focus both on big, bottom-line hitting functions, as well as small basic housekeeping problems.  Here is where the two-parts of the strategy come into play.

First, we need planned, organized assaults on waste in major business processes such as how to develop products more efficiently and effectively, or how to minimize waste in logistics.  These should be planned efforts with targets and time frames because we will need to take valuable resources aside to accomplish them.

For these efforts, put your change leaders and strong project managers in the drivers seat with a strong team of change-minded process users and owners to support.  Drive waves of big improvement over and over to improve these big processes. 

By all means report whatever metrics your business has agreed upon to measure improvement.  This takes care of the major improvements and it will keep your change leaders busy and productively producing business benefit.

In the mean time, train the rest of your personnel in the basic tools of process improvement and sick them on the smaller, every-day wastes.  These small changes pose little risk or problem if an experiment does not produce, so it is a good training ground for process improvement beginners.

Similarly, not everyone wants to be or should be a change leader, but it’s a healthy thing to expect our personnel to take charge of their own destiny and reduce their own waste.  They know best what needs to be fixed and can best gage the improvement as well.

For the small, every-day stuff, try to get away from scheduled events to improve process, and instead drive for everyday, spontaneous improvements.  Goals applied to metrics, or expectations of better performance with every execution of the process are good ways to drive this.  The true key, however, is to put responsibility and authority over the process in the hands of the process users.  If they need to ask permission to experiment or improve, the behavior of doing it all the time will never manifest.  It will be too much trouble.

So let’s sum up.  Attack waste in your office space and business processes from two directions.  First, plan strategic assaults on your major business processes that need to become more effective and efficient.  Apply your leaders and users to these efforts and make major changes to the rules and systems all at once.

Second, train and turn loose your entire personnel on attacking the every-day wastes involved with specific, repeatable activities.  Set an expectation that users find ways to make their own every-day work more efficient and effective.

We enable this two-part attack strategy with a combination of metrics and behavioral expectations.  We must track, report, and set goals according to metrics that encourage the major business process changes, as well as the small every-day changes.  Also, we must put responsibility and authority for the small changes in the hands of the users so they are free to make the changes as they naturally occur.

I know that this two-part strategy sounds simple and obvious, but I have very rarely seen it successfully enabled or deliberately promoted.  Many times only either part of the strategy is employed, but not both.

Take a good look at your own continuous improvement efforts applied in your office space and see if your business has truly promoted both major and minor improvements and enabled them both with metrics and authority.  Have some discussions with your leaders and make some changes to your attack strategy.  You will be delighted with the sudden influx of improvement that is enabled.

Stay wise, friends.

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