Welcome to suburbia

I've finally plucked up the courage to set-up an online blog. I'm going to endeavour to blog as often as possible to share my thoughts, to share some articles and news i find interesting, and also use it for my private reflections (you guys won't get to see that!). Also i hope people will read and comment on some of my posts.

The spur for deciding to set-up a blog has been my studies through the Open University. They encourage learning and reflection, and collaborating with others.

Tuesday, 22 May 2012

Does size matter?

I appreciate that by placing provocative title on top of this post, I have certain obligations to you the reader. So lets get the disappointment out of the way…. This topic sprang to mind when I was in attendance at “The Place for Luxembourg Improvers” and their Pecha Kucha evening (Which apparently is the sound in Japanese that best signifies chit chat). The evening was attended by many a varied speaker from across the Luxembourg “improvement scene”, but it was a presentation by Floriane Maffei of DHL. Her presentation explored the DHL improvement way; leaning heavily on the six sigma concepts, mixing it with a performance management system that rewarded a continuous improvement mindset. But it wasn’t their incredible progress that got me thinking, it was actually the prevalence of large programmes in defining the improvement journey of many companies.

Although it didn’t feel particularly pleasurable at the time, before landing a role at Open Text, I was wandering around various companies hearing about their approaches to Lean, Sigma, BPS, OpEx etc. But really there was great pleasure to be derived from hearing about the latest advances in the industry, and the student in me had a great time comparing and contrasting the different approaches. In this time each company I spoke to was keen to stress the gigantic scale and number of resources being ploughed into their “Programme”. Evidently if you are going to be serious about doing improvement the bigger the better, right?

So it’s worth exploring these big beasts and how they worked their programmes. Having worked at Lloyds TSB just after they had pulled together their Lean programme, the size was at times overwhelming; £18m in bottom-line efficiency savings within 18 months, 50 people roaming the UK, a small centralised team, but very explicitly a programme that one day would run out of funding and be consigned to history with all the plaudits a successful initiative brings. Its date with destiny arrived at about the 2 year mark, at which point something miraculous happened… the business of its own accord agreed to set-up its own improvement teams, made up of former members of the programme team. And so the improvement journey continued to evolve at a local level, with customisations and differing targets/objectives, and to my knowledge (although branded differently) still exists today as the way most departments do business. RBS was at the same stage of its development when I was there; looking off into the distance they saw that they would run out of roll-out style projects within operations. Consolidation was not on their mind, instead the big programme concept continued to hold sway, leading to expansion into other non-operational areas to continue to fuel the 300 people employed specifically for the task of implementing Lean. In hindsight there were two key differences between these programmes, one was that despite being a programme the desire was to keep the resources utilized rather than exploring other options, and this in part was driven by the other difference which was at least 50% of the staff were drafted in from outside and not necessarily with prior banking experience. Whereas in the Lloyds scenario the staff could go back to their old jobs, or had a decent enough network/skills to source an internal position, in the RBS example those who came into the organisation came with a specific purpose of doing Lean, to keep that talent in the organisation the show has to go on.

Two other examples of big beast like programmes, are Maersk’s Process Excellence programme and Zurich’s entry into Lean Six Sigma work. Both are huge global programmes, they have a defined shelf life (and executive funding), and utilize miniscule centralised resource. The model is much more reliant on enthusiasm being generated within the operational departments, with part-time improvers achieving their badges and fitting their improvement initiatives alongside other priorities. The central teams manage reporting, training, coaching, mentoring, and standardisation. However both companies are fully endorsing this approach, and expect leaders throughout the company to respond to the improvement pressures within their respective industries.

At the other end of the spectrum you have the example of more, what I will call, organic programmes that develop as smaller ventures. The sort of programmes that spread like a contagion as the successes become part of the water cooler gossip. Companies like those mentioned by Lean Thinking; Wiremold, Lantech, etc. But also you could stretch the definition of organic to the origins of Toyota’s TPS; being that Ohno was spreading his approaches through trial, error, success, word of mouth, and not through corporate fanfare.

So big or small? The advantages of going big are fairly obvious economies of scale, coverage of large swaths of the organisation, the resources to do it right, the sense of it being an unstoppable juggernaut increasing engagement and adoption, return on investment (big costs with a big payoff).Typically these programmes are swift, with the first repayments being made within 3 months of kicking off. However perhaps the biggest disadvantage is that organisations are set up to manage such efforts as programmes, which of course are expected to end or complete; subconsciously you’re letting people know it is short term and not a cultural adjustment.

What about small. Well there is not as much pressure because there is very little cost, mistakes can be made at this scale, it is without fanfare and so isn’t typically labelled a corporate initiative, the successes will speak for themselves, people can also sharing in the joy of discovering improvement without it being foisted on them. The biggest advantage is flexibility, something we’re discovering at Open Text, you can choose to approach projects in a way that suits the client needs, you can have the same resources working on more than one project at once, and there is flexibility in the learning as well; choosing what is appropriate at that time.

But forgive me for a thousand word distraction, because the debate shouldn’t be about big or small, but about your improvement philosophy or vision. In a previous post I talked about the Investment banking team that wasn’t clear on their purpose and so produced a muddled Lean approach that confused customers and practitioners alike. Why are you choosing to improve? What is your burning platform?
Here are some examples of burning platforms or visions that could shape your improvement philosophy (they are not exhaustive):

Costs- reduce them, reassign them. The best cost rationale I’ve come across is when people link it to the customer; Unit costs or cost of production being too high, rather than workforce reduction- it rarely gets people whooping!
Quality- TQM and Six sigma focus on producing high quality through processes and service interactions, devilishly difficult to measure. Is your company in a position to make quality it’s USP?
Delivery- this platform is all about reducing delays, and becoming a more responsive organisation. How much more quickly can we deliver this to a customer?
Engagement- It could be that you want staff to be more engaged with the work they do, and by giving them the autonomy and authority to change; you might just achieve this
You could also add customer and safety (especially in heavy manufacturing industries) to these examples, again they are not exhaustive. They should frame the goals you’re going to pursue, the way you go about improving an area, what success looks like, and what processes or areas you look to improve. That clarity will influence the training you develop, and the type of people you want on the team.

Big or small? I don’t know which is best; I’m going to find out more about small as I continue my journey at Open Text. What I do know is that you need to understand why you’re doing it.

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