The Lean Competency System, LCS , created this great qualification for senior managers called the Level 3 Programme, a level above and beyond master black belt, which is undertaken through a combination reflecting on proven experience.and academic analysis. The qualification is undertaken with the support of a coach, who has the unenviable job of taking all those years of experience and making you critically reflect on all of it by turning that lens we often apply to business and process back onto yourself.
My coach, Graham Turnbull of Reinvigoration, helped to keep me focused while encouraging me to expand my thinking and approach and I would wholeheartedly recommend Graham and Reinvigoration to anyone going through this reflective journey.
Much has happened in the world since the advent of Toyota, the source of Lean, so what are we still learning from Toyota Production System 30 years on?
In striving for perfection for customers, with low investment capital and delivery of products just in time to customers, Toyota evolved and developed the wider Toyota Production System. It embraces respect and team work , through a process of experimentation and continuous improvement.. This Lean management system dramatically reduces the cost and effort required to produce products and has in turn become a dominant global operations paradigm and a source of inspiration, as well as an improvement methodology still very much in today’s organisations.
Companies, Senior Leaders, Lean professionals and enthusiasts have all embraced Toyota as a source of inspiration. Many have also tried to embrace the people aspects, however, unlike the tools which are quite simple to use, in order to incorporate a Lean “management system” you need to change the way you see, think, lead and manage. To achieve this you may need to embrace elements of cultural leadership to implement the ‘respect for people’ principle. Many organisations who have successfully embedded these principles are consistently leading worldwide Brands.
Arguably Lean provides the most effective business management system to best enable worldwide sustainability and overall corporate responsibility. Through working in partnership with suppliers and by investing in problem solving skills, it’s strengthening abilities to continue to solve new and different problems through innovation. Lean has now become so integrated into our society at large we can see evidence of it all around us. Here are a few examples:
Turning the lens on myself
The Level 3 Programme requires intense critical evaluation of your own development and experience; it takes the lessons learned along the way, looking back at Lean and where it comes from, aligning your own journey with this, and then looking forward at the future challenges for Lean. I found this reflection humbling, challenging and rewarding.
The recent experiences I used for this were drawn from three case studies: Operational Excellence, Risk in terms of the risk of poor customer outcomes, & delivery of improved customer and colleague experience through Robotic Process Automation.
Operational Excellence (Op Ex) is an ideal approach to help organisations and individuals to focus and learn how to do the right things incrementally to meet the business challenges they face. It’s very much about working with teams, developing new ways of working, driving teams to start doing things they did not do previously in response to changes in customer behaviour and to stop doing things that add no value to customers. As the teams get to solve more challenges, the better they get at problem solving and in improving customer experience. The stronger the organisation’s focus on the people who create and improve value to customers, the greater the brand recognition around the customer centric culture, and a reduction in bottom line costs.
My case study for Op Ex is based on a multi location, large UK Employer and includes developing Lean ways of working through action orientated daily huddles, pro-active team planning and engagement, removing blockers and impediments through problem solving, and go-see. Once these base skills and capabilities were developed I worked with all Leaders to develop a culture of Operational Excellence and ongoing sustainable improvement. This was achieved by aligning to strategy through value stream diagnostics and value led metrics and with a focus on removing waste and through embedding services and processes into target operating models. This enabled people to create maximum customer value using efficient processes which in turn meant they could handle more volume and reduce costs.
Op Ex has been an exciting 4 year challenge and my recipe for success is to use a benefits lens and focus on evolution rather than revolution. Op Ex provides the ideal environment for motivating people through positive reinforcement, recognition, variety, empowerment and opportunity to learn, and organisations who are good at Operational Excellence will naturally outperform others who are not. My reflection and lessons learned from this programme are that putting customers at the front of everything you do increases the buy-in from colleagues and the overall chance of success. However where the whole organisation does not have the same maturity it creates challenges around how people engage with each other and can create friction.
The key to this is taking people on the journey with you. Leadership Go See is a really good habit to form, as it readily engages leaders with colleagues in meaningful improvement activity, visibly demonstrates their support and can be used to replace other meetings. Overall, changes to ways of working not only take time but also take several goes at it and you need to keep at it! Remember it’s often the small things that show your improvement culture is growing and it takes everyone time to create new habits.
Improving customer outcomes by removing waste, unevenness and unburdening resources are core elements of continuous improvement. The book, The Machine That Changed The World, illustrates why Lean is superior to mass production. The mass producer’s goal was “good enough” and the Lean producer’s goal was “perfection”. In the same way that Toyota strives for perfection, I used our corporate risk management framework and applied failure mode effect analysis (FMEA) to assure delivery of the best customer and business outcomes.
The benefits from this approach were:
- Net promoter score improved
- Customer ease of use scores increased
- Resolution scores increased
- Abandoned calls reduced
- Reduction in complaints
- Alongside a substantial reduction in bottom line cost as doing the right things costs less, not more
Key to this was the ability to readily identify poor customer or business outcomes and using FMEA adapted to align to the Corporate Risk Management Framework to make decisions on priorities to manage these improvements and tracking benefits using a risk burn down tracker.
I learnt the importance of early warning of defect waste, the impact of poor quality and poor exceptions management inherent in 80:20 digitised processes, the material cost of these defects to the customer and the organisation and the importance of key risk indicators to aid continual transformation and management of emerging risks.
I also learned when I looked upstream that these challenges do not just exist in front facing teams but equally exist in the supporting group functions, where poorly defined processes and ways of working also create waste and this waste is less visible.
In seeking to deliver better automated controls and overall improved quality of customer experience, I experimented with robotic process automation as a method for providing better customer outcomes.
RPA was a new and rapidly evolving field and it involved designing a strategy for robotic process “virtual users”, identifying suitable processes, test and learn, implementing RPA and then ongoing improvement to these processes. The initial objective was to explore whether RPA could provide earlier benefit and more cost effective solutions.
The results were two absolute failures which were thrown away, followed by two major successes, a change of supplier and partner, and now regular improvements through process automation drops and a desire to build in sustainability. Benefits have been significant.
These virtual users and RPA processes demonstrated
- Improved flow and more predictable lead times
Improved quality with zero defects
- Wider benefits around reductions in quality assurance and complaints, IT helpdesk calls, data fixes
- Improved colleague experience because it removed “remembers” involved in manual processing and copying data from one system to another
- Increased motivation from people doing more customer value-added work
- Ability to grow scale quickly when volumes tripled by simply adding on another “bot” when required
In terms of size and scale one of these robotic processes, to replace virtual users (“bots”) with people, would take up to 2 typical operational teams to perform, and was processed using 7 ”bots”.
The lessons learned are that Robotics provide an effective solution and work best on “lean” processes, ideally processes that are growing in volume or have the potential to grow scale. In terms of learning it was quite a steep learning curve at the start so looking back I would probably have benefited from mentoring support from an expert who has done it before.
Like any transformation it’s a journey and you need to take people on this with you. We initially tried to demo virtual users and RPA processes, but this was just too dry for most audiences and customer and colleague feedback worked much better. As it’s relatively new technology expect some failures and to experience some blockers that you will need to overcome, and focus on the successes as the customer benefits are worthwhile and the in-year benefits are significant.
The Future of Lean
In a changing world with changing cultural values and where hyper change (technology innovations and disruptors) are driving and enabling pace of change, the organisations that adopt Lean Principles and Agile ways of working will outperform those that don’t, and companies that do not deal with corporate rigidities will make themselves targets for disruptors.
In a world of pace and innovation people will need first principles thinking , the ability to start from scratch and approach the problem in a fundamentally different way . We won’t be able to continue to solve problems by using the same kind of thinking we used when we created them. If we try to use past experience , we just won’t get there fast enough. People are key , even though there will be a shift to automation and digital transformation, and the employment of the future may present a stark shift from today’s job roles.
People are extremely adaptable , any rigidity only come from corporate processes and a lack of genuine respect for people. Developments in automation will also see an increased requirement for ‘soft’ skills, including problem solving, critical thinking and evaluation, communication and interpersonal skills, as well as some technical skills in science, maths, and advanced technology.
In order to deliver pace, we need Agile financial services who watch customer behaviour across all channels and responding accordingly and who are capable of constantly adapting and trying new approaches to engage with customers. Financial services needs to adapt to generating revenue through cross sell and up sell and focus on minimising fixed costs and operating to variable costs.
Agile is based on a culture of experimentation trying repeatedly until it works; delivering early releases for testing and user acceptance, while also changing the organisation’s process and policy rapidly. In delivering pace, we need this Agility to remain true to our Lean principles and continue to pursue perfection through delivering value to customers. This means we need to be ruthless about taking out all unnecessary steps and waste out of the end to end value chain, optimising flow and establishing customer pull focused on just in time delivery, and be working closely with partners and suppliers to ensure they are doing the same.[9,14] Agile or Lean, these changes will be delivered through people and team based agility. Having respect for people is a fundamental principle of Lean.
We will see another paradigm shift this time to delivering services embedded into the lives of customers where they need those services, moving from physical interactions with high friction to digital experience with low friction. In Financial Services this means looking at the most frictionless way to get capability to a customer when and where they need it , while using any friction to create an opportunity to impress.
Developing innovative algorithms to leverage data better , identifying new opportunities, new segments, and new behaviours will be a core capability to optimise your customer’s interaction with your digital experience and using robotic processes to deliver this.  However, these changes need to be expanded with transparency and care to assure that we get the results we are expecting and that we resolve the various legal challenges around how information is sourced, stored and who has access to it.
In terms of global sustainability and in our response to climate change, we are starting to see companies developing an Earth or Planet Charter, or an equivalent Corporate Responsibility and Sustainability policy. Customers have already started to deselect companies that don’t demonstrate sustainable principles and may start to select the products and services they purchase from an environment and sustainability perspective by accessing this information online.
In these ‘untrusting’ times, Mutuals who focus on delivering their mission to customers and members, rather than maximising return to investor shareholders through profit distribution and capital growth, may well become the preferred provider by customers in the future. Research consistently shows that the public trusts Mutuals more than other types of business. These sustainable Mutual principles share many of the same principles as Agile/Lean pursuing business plans aimed at securing long term success for their members and customers, and like Toyota positively impact the markets in which they operate.
Lean has evolved out from the Toyota Production system into society at large. It has proved to be an effective management system which dramatically lowers the amount of high wage effort required to produce product and keeps reducing it through continuous improvement.
This “management system” is not however always fully understood or appreciated. Leaders embracing lean and improving themselves are the key to optimising the Lean transformation in an organisation. It’s ultimately about “learning” organically by getting people to use tools to problem solve with confidence and no fear.
In a changing world with changing cultural values and where technology innovations and technology disruptors are driving and enabling pace of change, the organisations that adopt Agile and Adaptive ways of working and Lean Principles will outperform those that don’t. Embracing Lean principles remains the way forward – and you can call it Agile, Continuous Improvement, Lean Start Up, Scrum or anything you like!
Copyright Mari Bowden 2020
1. The Machine That Changed the World. James P Womack, Daniel T Jones & Daniel Roos, 2007. Published by Simon & Schuster UK Ltd, page 11.
2. The Machine That Changed the World, James P Womack, Daniel T Jones & Daniel Roos, 2007. Published by Simon & Schuster UK Ltd, page 63
3. The Lean Strategy. Michael Balle, Daniel Jones, Jacques Chaize and Orest Fiume, 2017. Published by McGraw-Hill Education, page 243.
4. The Machine That Changed the World. James P Womack, Daniel T Jones & Daniel Roos, 2007. Published by Simon & Schuster UK Ltd, page 285
5. Lean Competency System, LERC 25th Anniversary Conference 2019 MBA programmes. https://www.leancompetency.org/2
6. “My Lean Journey”. Dan Jones. LERC 25th Anniversary Conference 2019.
7. The Lean CEO. Jacob Stoller, 2015. Published by McGraw – Hill Education, page 209-211.
8. Real Lean, Volume One. Bob Emiliani, January 2007, Published by The Centre for Lean Business Management, LLC, page 2.
9. “Old wine in new bottles”. John Bicheno. LERC 25th Anniversary Conference 2019.
10. The Lean Strategy. Michael Balle, Daniel Jones, Jacques Chaize, Orest Fiume, 2017. Published by McGraw-Hill Education, page 244-245.
11. Bank 4.0. Brett King, 2018. Published by Marshall Cavendish, page 317.
12. Fintech in a Flash. Agustin Rubini, 2019. Published by Deutsche Nationalbibliothek,page 131.
13. Bank 4.0. Brett King, 2018. Published by Marshall Cavendish, page 24.
14. “The Dev Ops Handbook/Introduction”, The Phoenix Project, Gene Kim, Kevin Behr & George Spafford, 2013. Published by IT Revolution Press, pg 375.
15. The Lean CEO. Jacob Stoller, 2015. Published by McGraw – Hill Education, page 310-311.
16. Embedding a Culture of Continuous Improvement. Dr Morgan L Jones, Chris Butterworth, Brenton Harder, 2nd Edition 2018, Published by Action new Thinking Limited, page 162.
17. The Lean Strategy. Michael Balle, Daniel Jones, Jacques Chaize, Orest Fiume, 2017. Published by McGraw-Hill Education, page 31.
18. The Start Up Way. Eric Ries, 2017. Published by Penguin Random House UK, page 168.
19. Scrum. Jeff Sutherland, 2014. Published by Penguin Random House UK, page 172.
20. Creating a Lean Culture. David Mann, 2015. Published by Tayor & Francis Group, page 181.
21. Bank 4.0. Brett King, 2018. Published by Marshall Cavendish, page 308.
22. Bank 4.0. Brett King, 2018. Published by Marshall Cavendish, page 326.
23. “We are hurtling towards a surveillance state”, The Guardian. Hannah Devlin. Published in The Guardian, 5/10/19.
24. “Enterprise Excellence – How Nike used Lean to solve its sweatshop problem”. The Leadership Network, 31/10/16.
25. The Start Up Way. Eric Ries, 2017. Published by Penguin Random House UK, page 17.
26. The Lean CEO. Jacob Stoller, 2015. Published by McGraw – Hill Education, page 163.
27. Case Study RPA, Mari Bowden, 9/19.
28. Case Study Risk, Mari Bowden, 9/19.
29. Case Study Op Ex, Mari Bowden, 9/19.