Lean principles, originally developed in manufacturing operations, can strengthen organizational performance and improve the customer experience.
By Tom Pesaturo
Lean principles, originally developed in manufacturing operations, are now being adopted by non-manufacturing organizations. In any sector, the goal is the same: to improve organizational performance to make a competitive difference by improving the customer experience. The key to successful adaptation is to know which tools, techniques and principles to use and how to apply them.
Unexpected lean efforts can deliver big benefits to IT organizations.
The first area of concern is a lack of alignment of strategic initiatives between leadership and employees doing the work. We often see an absence of measures and goals at the organizational, process and activity level to drive strategy. Organizations often suffer from cultures where strategic objectives are not communicated, tracked or driven at the level where the work gets done. Here’s a simplistic example of how it should work: The leadership identifies a strategic objective of “Improvement in Workplace Safety” by reducing OSHA recordable rate from 7 to 5.5 by year end. It is communicated to the employees and a cross-functional team is assigned to implement. They design safety awareness training, conduct safety risk analysis and design a safety incentive program while tracking OSHA Recordable Incident Rate weekly using metric-based dashboards and reporting on it.
Leadership must be active in the improvements by leading, supporting and sponsoring the system. This is accomplished by establishing the strategic vision and cascading goals to provide a clear business case for improvement initiatives. The benefit of Lean is that it provides a structured method for communicating and establishing agreement on a proposed plan for the business at all levels.
How does that translate into an IT organization? Michelle Pope, COO of Atrion Networking, explained how Atrion has been successful in aligning strategic objectives and initiatives with Atrion employees using Lean.
“Business unit leaders are instrumental in helping to establish the strategic initiatives at the Business Unit level and ensuring alignment with the higher-level strategic goals,” Pope said. “At Atrion, there are three high-level organizational strategies and each business unit’s strategic initiative align with one-to-two of these strategies. Each department in the business unit then works as a team to create one-to-two measureable strategic goals that drive performance of the business unit and subsequently the organizational strategic goals.”
The second area of concern is when organizations undertake improvement initiatives that aren’t supportive of the business demands and linked to the strategic objectives, Pope said. How do you know your employees are improving the right indicator? Lean provides a method for systematically identifying waste and its elimination using a hypothesis-based improvement approach connected directly to business value.
The following Q&A session between CIO Insight and Pope touches on communications standards, a Lean project launch and more.
CIO Insight: How does Atrion ensure that employees are working on the right stuff?
Pope: Typically it was the biggest pain points or the areas that were bleeding the most that were getting the attention first. We then formalized an approach where as an organization we organized the priority process improvement areas by urgency and impact to the business. Our Business Process Manager then orchestrates the process of launching a Lean project, creating the project charter, formalizing the project team and running the Lean team’s sessions. Employees are empowered and encouraged to utilize the Lean tools for process improvement within their departments as the needs arise.
Many organizations have no communication standard to support collaboration and consensus-building to help employees learn how to improve. The benefit of Lean is the involvement of people working collaboratively at all levels of the organization with a common improvement methodology. While technology is important, only people can solve problems, learn and remove waste. Facilitating cross-functional project teams to identify and initiate change is what drives results.
CIO Insight: A common concern for employers is the employee participation rate. What’s been the participation rate at Atrion of employees engaged with Lean?
Pope: It has been simply amazing. Within the first year we achieved a 50% employee engagement rate, meaning that half of our employees have been involved in a formal Lean process improvement engagement and/or training. Today we continue to increase that number and are in the high 60% range.
CIO Insight: What is being done to improve the number even further?
Pope: We have formalized Lean overview training into our new hire employee orientation and in-depth training on Lean tools throughout the year. We also provide organizationwide education on the importance and successes of the Lean initiatives. The key is to encourage and support employee participation at the department level and reward participation with employee recognition in many visible forums throughout the organization.
CIO Insight: What benefits have you found with solving problems cross-functionally?
Pope: From our perspective there are three tangible benefits: (1) gaining outside perspective and views, i.e., not just looking at an issue within a singular department or from the perspective of individuals who work within the process, (2) employee engagement and collaboration throughout the organization, working with individuals and teams you might not get the benefit to do so on a daily basis, and (3) a better understanding of the impact a change within a process or department might have up and downstream from the process.
As more organizations look to implement a Lean strategy, it will become less of a differentiator. The true differentiator will be how they are implemented and adopted.
Tom Pesaturo is the principal of Exceeda Consulting and a leader in Lean transformations. Tom has more than 25 years of Lean operations experience with wide-ranging expertise across all levels of operational responsibility in the United States, Europe and Central America. He can be reached at firstname.lastname@example.org and to learn more about Exceeda, visit www.exceeda.net.