The Lean Playbook

Build a Lean organization yourself

THE LEAN PLAYBOOK ANTONIO MEDINA, DANIEL SANTIAGO, ANTONIO J. RODRÍGUEZ & IVÁN MARTÍN FOREWORD BY ANTONIO CRESPO

Text copyright © 2015 by Kerunet Digital Publishing All rights reserved. Published by Kerunet Digital Publishing

No part of this publication may be reproduced, or stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission of the publisher. For information regarding permissions, write to Kerunet Digital Publishing - C/ Humanes, 27 4ºA - 28944 Fuenlabrada, Madrid (Spain) www.kerunet.com

Depósito Legal: M-37251-2015 ISBN: 978-84-608-4158-6

Printed in Spain First edition, November 2015 www.theleanplaybook.net

Build a Lean organization yourself

THE LEAN PLAYBOOK

ANTONIO MEDINA, DANIEL SANTIAGO, ANTONIO J. RODRÍGUEZ & IVÁN MARTÍN

I

ACKNOWLEDGMENT In memory of Rafael de la Torre.

Special thanks to Antonio Crespo, Mariano Ferrera, Xana Morales and Fernando Escudero.

We also thank everyone else in AELIT, Quint and Amadeus who have contributed with their help to this book.

And last, but not least, to our families for their love and support.

III

What’s inside?

CONTENTS

CONTENTS FOREWORD, BY ANTONIO CRESPO

7

INTRODUCTION

WHY THIS BOOK?

13

USER GUIDE

HOW TO USE THIS BOOK

19

CHAPTER 1

INTRODUCING LEAN IN AN ORGANIZATION

25

CHAPTER 2

CHOOSING THE RIGHT STRATEGY

37

CHAPTER 3

VOICE OF CUSTOMER

49

CHAPTER 4

LEAN GAMES

65

3

CONTENTS CHAPTER 5

VISUAL MANAGEMENT

75

CHAPTER 6

FLOW AND PULL

91

CHAPTER 7

TEAM BAROMETER

103

CHAPTER 8

CONTINUOUS IMPROVEMENT BOARD

117

CHAPTER 9

KPI TREE

131

CHAPTER 10

VALUE STREAM MAPPING

143

CHAPTER 11

EARNING CAPACITY ANALYSIS

165

4

CONTENTS CHAPTER 12

TEAM RACI

185

CHAPTER 13

KAIZEN, DMAIC & SMART OBJECTS

203

CHAPTER 14

THE OBEYA ROOM

221

CHAPTER 15

AGILE COST ESTIMACION

233

CHAPTER 16

MAKING LEAN SUSTAINABLE

249

THE TEAM BEHIND THE IDEA

ABOUT THE AUTHORS

275

5

6

Don’t think with your head

FOREWORD

THE LEAN PLAYBOOK

8

DON’T THINK WITH YOUR HEAD FOREWORD

FOREWORD THINK WITH YOUR HANDS

Exponential Age There are many factors that lead us to believe that we live in an era of exponential change. From a business point of view, the pace at which unicorns —term coined by Aileen Lee in 2013 for privately held startups that have a $1 billion valuation— have been built has accelerated over the last years. Today, unicorns like Uber have a similar or even higher valuation than General Motors, Honda or Ford, the companies actually build the cars their drivers use. Surprisingly enough, Uber itself, founded in 2009, does not own cars. It “only” connects consumers looking for transport with drivers who use their own cars. A “simple” business model that several other organizations have copied —in a trend that has come to be referred to as “uberification”—.

While many people consider that most of the startups that succeed are IT companies, the truth is that the competitive advantage mainly comes from understanding the customers’ needs and defining business processes in order to deliver a unique value. In my example, Uber produces far superior benefits when it comes to ease of ordering, certainty of car arrival time, ability to see the route taken, ease of payment and quality control. Yes, technology plays a role, but more as an enabler than as a competitive advantage in itself.

In other words, and looking at this from a different angle, technology is nowadays able to do much more things than what we may imagine.

The real issue is to find a business model that supports the usage of this technology by providing value the customer —or anyone else— is willing to pay for.

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THE LEAN PLAYBOOK

FOREWORD THINK WITH YOUR HANDS

Back to the Basics And then is the fact that technology has changed the game rules. The amount of investment needed to have an exponential access to new markets is available to all kinds of companies, of any size. And one of the main results of this technology democratization is the convergence between the tools and management models in every type of organization, may they be unicorns, elephants or SMBs (Small and medium Businesses).

With all of this coming together, the Lean philosophy is gaining more and more followers in every company. One of our main weaknesses, as human beings, is that we do not have historical memory. Lean represents going back to the basics. Basics that are, or should be, applicable to big, medium and small companies. Basics that involve putting the customers first, at the core, and directing the organization’s culture and management to achieve the highest value for its clients. A simple concept, but quite often a difficult one to put into practice, especially in more mature organizations, with big legacy and vertical structures that blur the vision and complicate the mission.

The book you hold in your hands is unique. A lean book about Lean. A real playbook. An easy guide, simple and extraordinarily useful. It shows in a practical way how Lean can be conceived as a simple, sensible concept, and how it can be applied in any context, with practical examples in each case study. A book without muda (waste in Japanese), simple in its concepts, reader-centric, practical in its drafting.

10

DON’T THINK WITH YOUR HEAD FOREWORD

FOREWORD THINK WITH YOUR HANDS

Fast is Easy

DON’T LOOK WITH YOUR EYES, LOOK WITH YOUR FEET; DON’T THINK WITH YOUR HEAD, THINK WITH YOUR HANDS

We live in a world where fast is a synonym of easy. Lean can be done by anyone willing to do it: the book examples are simple but real, and actually very common cases of recurrent problems in organizations. They show how simple and effective Lean solutions can help overcoming them.

TAIICHI OHNO

The Lean Playbook is the perfect guide to get yourself started in Lean, considering the key elements you’ll need, from strategy to operations. It also shows how to communicate, convince and sell it to everyone involved. All these are the essential components in the change management process in which established companies are about to embark upon – if they are not already…

And what can I say about the authors… I have had the pleasure to work with all of them. They have inspirational mindsets, teamwork hearts and a lean attitude. The essential components of the 21st century professional, no matter the industry or the company size. And, what is more important for you, dear reader, they are hands-on Lean experts who will help you to start this Lean journey. A journey that you will surely enjoy.

Antonio Crespo, Chief Digital Officer. Quint Wellington Redwood

11

THE LEAN PLAYBOOK

12

Introduction

WHY THIS BOOK?

THE LEAN PLAYBOOK

14

INTRODUCTION WHY THIS BOOK?

PRELIMS WHAT TO EXPECT FROM THIS BOOK

Demystifying Lean Lean is a term introduced by Daniel T. Jones and James P. Womack in the 90’s to describe Toyota’s way of thinking, working and behaving. It is based on the core principle that everything we do, develop or manufacture, has to maximize customer value. All other activities, actions or efforts put into the production that cannot be linked to what the customer perceives as valuable, are regarded as waste in Lean.

This means that our processes, methodologies and investments need to be reviewed to ensure that we are utilizing our resources in activities that are actually valuable for the customer. In our many engagements with organizations, we have seen that there is a great amount of time and money spent in producing documents, attending meetings, double checks or creating unnecessary bottlenecks.

And it can be very troublesome to make people realize they need to adjust or change their way of working.

15

THE LEAN PLAYBOOK

PRELIMS WHAT TO EXPECT FROM THIS BOOK

A book to guide you This is the reason why independent consultants are usually brought in, to introduce Lean in end-to-end processes, which is usually costly to many companies and does not necessarily guarantee success.

Those are the bad news. The good news is that this book is here to help you out. Anyone can do Lean in their organization. At any level, from the smallest team to the most important core processes in your value chain. Results, even if they are not revolutionary most of the time, can bring significant improvements in cycle time, cost or product quality. In the following pages you will find several real world cases, where different Lean techniques and tools made a difference. We describe them in great detail, so you will be able to apply them to your own company.

Welcome to The Lean Playbook! Get into the Lean philosophy, have fun and make a difference in your organization!

16

INTRODUCTION WHY THIS BOOK?

PRELIMS WHAT TO EXPECT FROM THIS BOOK

Who can use this book Lean is no rocket science; it is not necessarily about complicated statistical tools. It is about applying common sense in a structured manner and empowering people to reach all their potential. The Lean Playbook is a book that wants to prove this and demystify Lean to make it accesible to everyone!

This book is aimed at everyone, but with a special focus on consultants, Lean practitioners, operational team leaders and strategic heads of departments to provide a holistic view on this journey: from making the first steps introducing Lean in an organization to using it to leverage a change of culture, optimizing value streams and facilitating innovation and the creation of new business models.

17

THE LEAN PLAYBOOK

PRELIMS WHAT TO EXPECT FROM THIS BOOK

What it contains The value adding proposition of this book is that we explain these ideas and techniques from the point of view of our past experiences. We as Lean practitioners have gone through multiple projects for top leading companies throughout the world.

And because of this we describe the cases in a manner that will make it easy for the reader to replicate them in their organization, step by step, knowing that they will produce tangible results.

18

User guide

HOW TO USE THIS BOOK

THE LEAN PLAYBOOK

20

USER GUIDE HOW TO USE THIS BOOK

EXPERIENCES INDEX THE LEAN PLAYBOOK

BLOCKS

VALUE FOR CUSTOMERS

INTRODUCING YOUR LEAN INITIATIVE IN YOUR ORGANIZATION

LEAN AS A CONTINUOUS IMPROVEMENT CULTURE

LEAN AS AN EFFICIENCY LEVER

WASTE REMOVAL

PEOPLE EMPOWERMENT & CONTINUOUS IMPROVEMENT

1. INTRODUCING LEAN IN AN ORGANIZATION 2. CHOOSING THE RIGHT STRATEGY

7. TEAM BAROMETER

3. VOICE OF CUSTOMER

5. VISUAL MANAGEMENT

4. LEAN GAMES

6. FLOW AND PULL

8. CONTINUOUS IMPROVEMENT BOARD

10. VALUE STREAM MAPPING

12. TEAM RACI

9. KPI TREE

11. EARNING CAPACITY ANALYSIS

MAKING LEAN SUSTAINABLE AND KEEPING THE MOMENTUM

14. THE OBEYA ROOM 16. MAKING LEAN SUSTAINABLE

21

13. KAIZEN, DMAIC & SMART OBJECTIVES

THE LEAN PLAYBOOK

HOW TO USE THIS BOOK SIMPLE STEPS TO GET THE MOST OUT OF THIS BOOK

Create your own Lean journey Dear reader, in case you are thinking on reading this book like a novel, you should take the following points into consideration: It might be disappointing, but there is no love story in this book. In fact, there is no story at all. This book was meant to be a collection of experiences. So you can read the chapters in it in the order you want.

This is a book designed to give you some answers. But first, you will need to discover what your questions are: • Have you heard anything about Lean or are you wondering how to introduce it in your organization?

• Are you wondering how Lean can help you making your organization more efficient?

• Are you interested in using the tools in this book to give more value for your customers? Or is your concern increasing your team’s motivation towards their work?

• Is your organization already undertaking a Lean transformation and do you want to avoid losing the momentum?

We would like you to think of this book as a reference on your desktop and to use it whenever you are struck by any trouble related to the Lean philosophy or you have doubts on Lean can help you overcome some organizational issues.

22

USER GUIDE HOW TO USE THIS BOOK

HOW TO USE THIS BOOK PATHS YOU MIGHT TO CONSIDER, ACCORDING TO RESULTS YOU WOULD LIKE TO ACHIEVE

I want to...

EMPOWER MY PEOPLE

INCREASE MY ORGANIZATION’S EFFICIENCY

ALIGN MY ORGANIZATION WITH MY CUSTOMER’S NEEDS

CHAPTER 8

CHAPTER 4

CHAPTER 5

CHAPTER 7

LEAN GAMES

VISUAL MANAGEMENT

TEAM BAROMETER

CONTINUOUS IMPROVEMENT BOARD

CHAPTER 11

CHAPTER 12

CHAPTER 13

CHAPTER 10 VALUE STREAM MAPPING

EARNING CAPACITY ANALYSIS

TEAM RACI

KAIZEN, DMAIC & SMART OBJECTIVES

CHAPTER 3

CHAPTER 6

CHAPTER 9

CHAPTER 14

VOICE OF CUSTOMER

FLOW AND PULL

KPI TREE

THE OBEYA ROOM

23

CHAPTER 14 THE OBEYA ROOM

THE LEAN PLAYBOOK

24

Chapter 1

INTRODUCING LEAN IN AN ORGANIZATION

THE LEAN PLAYBOOK

26

CHAPTER 1 INTRODUCING LEAN IN AN ORGANIZATION

INTRODUCING LEAN IN AN ORGANIZATION WHAT LEAN REALLY MEANS

Smile, it is easy You, who is trying to implement Lean in your organization (or even in your life), are lucky.

You are lucky because introducing Lean in any organization is actually something easy. Think about it: it is not going to break your organization apart, and no one will be offended. It is actually more of a profound change in the way people work, it returns fast results and it increases motivation.

Oh! We nearly forgot... it is almost free!

27

THE LEAN PLAYBOOK

INTRODUCING LEAN IN AN ORGANIZATION WHAT LEAN REALLY MEANS

Where Lean focuses on There is only one way to do Lean: stop looking inwards. Look at the customer. Because the customer will give you the answer you need to know: what is the actual value of your work? What is just waste?

If everyone cares about the customer and only the customer, everyone will know what the purpose of their job is, everyone will find out why they are in the company and they will also stop distracting themselves from the main purpose which is focusing on providing value to the customer.

28

CHAPTER 1 INTRODUCING LEAN IN AN ORGANIZATION

INTRODUCING LEAN IN AN ORGANIZATION WHAT LEAN REALLY MEANS

The secret ingredient Looking the customer directly in the eye is, for sure, the Lean way. But there is one more ingredient to make it work: awakening people’s behaviour and attitude.

People’s engagement is key because they are the ones that hold the potential to improve your business, as well as the knowledge about your operations, to spot what has to be done. They have also the essential part in making the Lean formula work, because they are the ones who will actually implement and run the changes. Therefore, the most important thing in your Lean journey is that everyone feels the initiative as their own.

So, even though you usually will find a good reception when it comes to introducing continuous improvement as part of a Lean transformation, you will have to be able to motivate people and keep them engaged throughout the entire journey (see Chapter 15 to find out how).

29

THE LEAN PLAYBOOK

HOW TO CONVINCE STAKEHOLDERS POINTS TO TAKE INTO CONSIDERATION

Maybe you are a stakeholder or maybe not. Whatever the case, you need to get some important people on board. The following are some points you should take into consideration for that matter:

Lean is not a methodology Understand Lean as a continuous improvement way of thinking to transform the entire organization and its teams.

It is not a methodology, it is not a framework. It is just a way of thinking, acting and living, so the question is: do you want (as a stakeholder) that your people think the Lean way? If the answer is yes, you might go ahead and start working on making it happen, but on the contrary, if stakeholders do not understand Lean as a way of thinking, or if they do not see the value of making people change the way they think and contribute to your company, there is always the option of using some tools (such as the ones in this book) for your benefit. However, not having everyone on board could mean that your Lean initiative may not be completely successful.

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CHAPTER 1 INTRODUCING LEAN IN AN ORGANIZATION

HOW TO CONVINCE STAKEHOLDERS POINTS TO TAKE INTO CONSIDERATION

Keep it simple Keep the message simple: As simple as possible. In fact, you can summarize the message in these three simple sentences: Generating value for the customer is the centerpiece of your initiative.

The main goal is to eliminate all inefficiency, everything that is not valued by the customer.

We, as an organization, work together to deliver value for the customer that will increase over time, continuously and incessantly.

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THE LEAN PLAYBOOK

HOW TO CONVINCE STAKEHOLDERS POINTS TO TAKE INTO CONSIDERATION

No metrics, no fun Nowadays no major initiative will happen in an organization if it does not show a tangible Return On Investment. It is critical, therefore, that you can guarantee that you will deliver profit and results. First of all, choose the more important performance indicators in your organization and think about how much you can improve them.

If you do not yet have a baseline, Lean may as well serve you as a way to get one and use it to measure from it onwards. Keep in mind: you can be bold, but you have to be realistic.

Every Lean activity should be Lean You yourself have to act in a Lean way: explain Lean as a way of thinking, and tell each stakeholder how it will be having an impact on them. Emphasize especially on people and transformation.

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CHAPTER 1 INTRODUCING LEAN IN AN ORGANIZATION

HOW TO CONVINCE STAKEHOLDERS POINTS TO TAKE INTO CONSIDERATION

Last, but not least Try to describe what the approach you will follow is. Even if it is at a high level. This includes: THE STRATEGY. Are you going to start with a pilot (bottom-up)? or do you want to define a clear roadmap supported by Top Management to transform the entire company (top-down)? (see Chapter 2).

THE TOOLBOX. You need to ensure that you make transformations happen on a team by team basis within the organization, using exactly the same sequence and the same toolbox with each one, applying the right tools depending on each case. This book will give you a lot of ideas on how to select a tool and the right work sequence (see Chapters 3 to 14).

TIMING. When do you expect to start? When do you expect to end?

When should the results be coming in? How much in a hurry are you to start getting meaningful results?

HAVE A TRAINING AND COMMUNICATION PLAN READY. Implementing Lean implies change and you should always be able to show what Change Management Plan you are going to carry out to embed Lean in your organization.

33

THE LEAN PLAYBOOK

YOUR WEAPONS SOME RULES YOU MAY FOLLOW

How to get people on board You may want to have your weapons ready when trying to convince management: Your own personal change story. With a highly emotional load in your speaking, prepare a story based on what you feel the company will achieve and a compelling elevator pitch, that will encourage people to change.

Examples and success cases from some other companies. There are tons of cases out there and some are also provided in this book!

A clear transformation plan to demonstrate your goals are realistic.

IT IS ESSENTIAL THAT YOU MANAGE A GOOD COMMUNICATION CHECK THIS VIDEO WITH SOME USEFUL COMMUNICATION TIPS

ALSO PREPARE A GOOD ELEVATOR PITCH TO EXPLAIN YOUR PROJECT BRIEFLY

theleanplaybook.net/commtips

theleanplaybook.net/pitch

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CHAPTER 1 INTRODUCING LEAN IN AN ORGANIZATION

ALLIES & RESISTANCE IDENTIFY THE PLAYERS ON THE FIELD

Start with the easiest There will always be resistance to every change initiative.

Therefore you have to be aware all the time of how strong your support is. When you feel that Top Management is really committed to at least try out a pilot that is the time to start.

Generally, you might consider beginning with those areas, groups or teams that will be easier to transform, in order to get some allies, which in turn will be the future agents of change. Always try to do your best to get results and to motivate the people involved in the first steps, so they can tell others the advantages and benefits of the change. Then move forward to the next step, and go forth from there. By the time the organization has evolved to a leaner state of mind, you can go back to those who offered resistance in the first place and you will then have enough reasons, examples and support to transform their areas too.

By the way: you can be flexible during the transformation process, adapting it to each individual case. In this book you will find some examples of how every tool can be adapted to the different types of teams.

35

THE LEAN PLAYBOOK

THE PLAN COMMON CHECKPOINTS IN THE JOURNEY OF TRANSFORMATION

Each time you face a Lean transformation, it will be different to some extent, but there are some general stages that you will usually find in every Lean initiative: These are the ones:

ORGANIZATIONAL PERSPECTIVE

OPERATIONAL PERSPECTIVE

CULTURAL PERSPECTIVE

CONVINCE STAKEHOLDERS

EXPRESS YOUR IDEA OF LEAN

CHOOSE THE STRATEGY

RUN A PILOT

CREATE A CLIMATE FOR CHANGE

PLAN THE TRANSFORMATION

EXECUTE THE IMPROVEMENT WAVES

STRENGTHEN THE CULTURE OVER TIME

ALLOCATE RESOURCES

USE THE LEAN TOOLS

ENGAGE AND ENABLE THE ORGANIZATION

IMPLEMENT AND SUSTAIN CHANGES

36

Chapter 2

CHOOSING THE RIGHT STRATEGY

THE LEAN PLAYBOOK

38

CHAPTER 2 CHOOSING THE RIGHT STRATEGY

WHERE TO START CHOOSING YOUR LEAN STRATEGY

Adopting a thinking process method Choosing the right process, area or team to start will be key to the success of your Lean initiative and for sure the most important and determining factor.

But there is a bunch of work to do, even before considering that. First, we encourage you to adopt a thinking process to decide whether your organization will go Lean or not. The 5 A’s framework, from the book Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage will provide a set of questions to start thinking on your strategy:

WHERE DO WE WANT TO GO? What is our strategy for the organization?

Will a Lean transformation’s objectives fit into this vision and strategy?

HOW READY ARE WE TO GO THERE?

WHAT DO WE NEED TO GET THERE?

Do we have the capabilities to meet that vision?

Do we need to develop skills or capabilities amongst our people?

Which area is less ready?

Do we need to set up a set of initiatives?

Which one is better prepared?

Can Lean be the guiding light towards that change?

Will people be on board or not?

39

HOW DO WE MANAGE THE JOURNEY? Do we have a clear approach to deliver transformation?

HOW DO WE KEEP MOVING FORWARD? How do we make sure it becomes embedded in our culture and it becomes sustainable?

THE LEAN PLAYBOOK

WHERE TO START CHOOSING YOUR LEAN STRATEGY

Map your stakeholders SENIOR EXECUTIVE

In order to ensure your Lean Transformation will be adopted at all levels of the organization, there is work to do. You will have to start diving deep into the organizational culture by cascading this change through the line.

How can this be done? First note down all your stakeholders and their management level. And then, start preparing your communication and engagement plan. It has to include all the actions and workshops needed to introduce the major stakeholders into what Lean is, how it can be beneficial to the company and how things change once introduced (for the better).

MANAGERS

YOUR LEAN INITIATIVE

HR

In our Lean Games Chapter (see Chapter 4) and other parts of this book you will learn what kind of workshops you can run at every different level to maximize your opportunities for engaging and getting top stakeholders to join.

FRONT-LINE EMPLOYEES

READ THIS McKINSEY ARTICLE TO LEARN MORE ABOUT CASCADING CHANGE THROUGH THE LINE www.mckinsey.com/app_media/reports/financial_services/mcklean_slowing_down.pdf

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CHAPTER 2 CHOOSING THE RIGHT STRATEGY

WHERE TO START CHOOSING YOUR LEAN STRATEGY

Align yourself with your stakeholders Align yourself with as many stakeholders as possible. It is crucial, especially in some countries where Unions have a strong influence, to align yourself with HR departments and be particularly clear with them regarding what is going to be achieved with your Lean Transformation.

Coming back at our set of questions: have you considered what the desirable outcomes of your initiative are? What are your objectives? There are very different types of Lean Transformations, depending on what you want to achieve. In our constant engagement with many organizations, we have managed to synthetize three different types of Lean initiatives:

41

THE LEAN PLAYBOOK

LEAN TRANSFORMATION TYPE EMPLOYEE EMPOWERMENT DRIVEN

Doing more with the same resources OBJECTIVES PURSUED

POTENTIAL OUTCOMES

INCREASE PEOPLE’S MORALE

HIGHER INNOVATION RATES

INCREASE INNOVATION & INTRAPRENEURSHIP ATTITUDE

NEW PRODUCT DEFINITIONS LESS TURNOVER RATE

42

POTENTIAL RISKS

INTANGIBLE RESULTS IN THE FIRST YEAR INSUFFICIENT ROI POTENTIAL DEVIATION FROM DAY TO DAY ACTIVITY

CHAPTER 2 CHOOSING THE RIGHT STRATEGY

LEAN TRANSFORMATION TYPE EFFICIENCY DRIVEN

Doing the same with less resources OBJECTIVES PURSUED

REDUCE AND ELIMINATE WASTE* IN WHATEVER FORM RESOURCE REDUCTION

POTENTIAL OUTCOMES

COST REDUCTION HIGH ORGANIZATIONAL EFFICIENCY INCREASE BETTER, MORE ACCURATE METRICS, LINKED TO P&L

* To learn the Lean definition of “waste”, please have a look at chapter 10, page 156.

43

POTENTIAL RISKS

INTANGIBLE RESULTS IN THE FIRST YEAR INSUFFICIENT ROI POTENTIAL DEVIATION FROM DAY TO DAY ACTIVITY

THE LEAN PLAYBOOK

LEAN TRANSFORMATION TYPE CUSTOMER DRIVEN

Being more customer focused with the same resources OBJECTIVES PURSUED

POTENTIAL OUTCOMES

POTENTIAL RISKS

REDUCE WASTE IN PROCESSES OR SYSTEMS & REALLOCATE PEOPLE TO OTHER ACTIVITIES IF NECESSARY

INCREASED CUSTOMER SATISFACTION

NOT KNOWING HOW TO PROPERLY CAPTURE VALUE FOR CUSTOMER MAY LEAD TO FAILURE

FOCUS ON VALUE FOR CUSTOMER IN EVERYTHING WE DO

MODERATE INCREASE IN PROCESS & SYSTEMS EFFICIENCY MODERATE INCREASE IN METRICS, LINKED TO VALUE FOR CUSTOMERS

CAN BE REGARDED BY SOME AS TYPE 2 IF NOT COMMUNICATED PROPERLY

These are not fixed models; you might find that there is a thin, blurry line among all of them. And you might as well go for a more holistic Transformation, incorporating all the ideas from the three types.

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CHAPTER 2 CHOOSING THE RIGHT STRATEGY

WHERE TO START CHOOSING YOUR LEAN STRATEGY

Decide upon an eligibility criterion

ELIGIBILITY CRITERIA (EXAMPLES)

After you have considered and tackled all the previous elements and you have a) strong engagement from your stakeholders, b) a clear picture or vision of the objectives of your Lean Transformation and c) an area or business unit to start with, then the time has come to think about your first step into the Transformation approach.

CYCLE TIME IS LONGER THAN NECESSARY WORK PRACTICES VARY ACROSS INDIVIDUALS/GROUPS NO VISIBILITY ON PERFORMANCE PROACTIVITY TOWARDS IMPROVEMENT NOT ENCOURAGED CAPACITY OR WORKLOAD DISTRIBUTION ISSUES TEAM MEMBERS ARE NOT EMPOWERED TO MAKE DECISIONS LOW CUSTOMER SATISFACTION LOW EMPLOYEE ENGAGEMENT

A COMBINATION OF SEVERAL OF THESE FACTORS WILL HELP YOU DETERMINE WHERE TO START

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So, where should you focus first? On a low risk team or process that has little problems and things to improve or, on the contrary, on a potentially high risk area that has many issues and low employee and customer satisfaction levels? We are afraid that the answer does not lie in this book. While we have introduced Lean in both contexts, it all depends on your knowledge of the company, its culture and how it operates.

This type of insightful vision is the one that will provide you with the right answer. In any case, here is a list that we have employed many times as eligibility criteria to choose a team, area or process to start a Lean journey in an organization.

THE LEAN PLAYBOOK

HOW TO ROLL OUT THE PLAN CHOOSING YOUR LEAN STRATEGY

Bottom-up vs. top-down Once you have decided where to start, it becomes important to prepare the roadmap. There is a firm conviction that there are two possible approaches: either bottom-up (front-line employees drive the change) or top-down (directors and managers drive the change).

Our experience shows that there is a third viable option, which consolidates the benefits of both approaches. It is a combined Top-down and Bottom-up approach. In other words, while we engage front-line employees on the field, we will also seek continuously support and approval for next steps with senior management. Overall, this is our standard approach proposition.

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CHAPTER 2 CHOOSING THE RIGHT STRATEGY

HOW TO ROLL OUT THE PLAN CHOOSING YOUR LEAN STRATEGY

Take the first step Clearly align your organization’s vision with your Lean Transformation objectives.

Start with a pilot to introduce a continuous improvement culture and build upon this foundation for the rest of the areas.

Once results have been demonstrated, seek strong sponsorship to continue spreading the initiative and set up a Wave plan to cover the whole organization.

A work program with direct sponsorship from Top Management should be used to incrementally and steadily drive the transformation, while ensuring business is not disrupted and well-known divergences are prevented.

Once the Lean Transformation has begun its roll-out, it is then important to start thinking on how to make this initiative sustainable over time. In Chapter 15, we cover the tangible and intangible elements needed to succeed in having your organization embracing Lean as the way things are done.

OBTAIN STRONG SPONSORSHIP

ALIGN VISION WITH OBJECTIVES

RUN SPECIFIC PILOTS IN SELECTED TEAMS & PROCESSES

DEMONSTRATE RESULTS & MAKE THEM SUSTAINABLE

SHOW SUCCESSES & SPREAD ACROSS THE DEPARTMENT IN WAVES & CONSOLIDATE

PEOPLE’S REACTIONS

WHAT IS LEAN? ANOTHER INITIATIVE?

OK, WE ARE ACHIEVING SOME THINGS FOR THE FIRST TIME IN A LONG TIME

LEAN IS PART OF OUR DAILY ACTIVITIES TO STRIVE FOR EXCELLENCE. IT IS HOW WE DO THINGS AROUND HERE

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THE LEAN PLAYBOOK

48

Chapter 3

VOICE OF CUSTOMER

QUICK CARD What is it

CHECKLIST

The Voice of Customer (VoC) involves asking the customers directly what their needs and expectations are, to obtain information to improve internally.

When to use it

Identify customers and decide the type of session (individual or collective).

Plan interviews or workshops.

Attach information about the session in the invitation.

1 hour individual session or 3 hours max. Group session.

Get 2 different, 8x8 cm color Post-it notes and markers (only for group sessions).

Create an Excel Sheet to collect information.

Whenever one or more of these are met: • Dissatisfied customers.

• Effort is put into activities that are not valued by the customer.

• No link between operations and customer needs.

WHAT TO DO

WHAT NOT TO DO

Select customers according to the appropriate criteria: VIPs, by sector, product, etc.

Define clear objectives for the session and achieve commitments.

Sessions should be led by someone impartial who is not taking part in the operations.

Select customers according to subjective criteria: convenience, satisfied customers, etc.

Make questions that determine the answers.

Focus on listening to the customer satisfaction level.

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THE LEAN PLAYBOOK

THE CASE IMPROVING INTERNAL CUSTOMER SERVICES

Mismatched understandings The customer of a Solution Development Service delivered by an internal provider was continuously dissatisfied. They were feeling that the provider was distant and did not understand their needs. They would always be one step behind or too late. Additionally, the service provider was slow and the quality offered by them and the expected one by the customer were far apart from each other.

On top of that, the internal provider did not understand what was going wrong; they knew the customer’s needs and acted according to them, however, customer complaints were frequent because they were not assimilating the current situation, where continuous priority changes in the demands made it an unstable environment for work.

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CHAPTER 3 VOICE OF CUSTOMER

THE CASE IMPROVING INTERNAL CUSTOMER SERVICES

Lack of communication.

What else?

Both the customer and the internal provider were stressed due to this situation, where provider’s efforts did not produce the expected benefits from the customer point of view. A clear lack of communication existed between both parties. The internal provider believed he knew what the customer needed and offered services in the ‘everything for the customer but without the customer’ format while the customer assumed the service had to be delivered like they were demanding, at the right moment but without being involved or disturbed.

TIP

The VoC is the right tool to understand what our customer really needs and expects from us. With this tool we can identify the key aspects of the service and detect where we have to focus on for improving it.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM DELIVERING A VOC WORKSHOP

Setting up the workshop In this case, we decided to make a group session for the VoC with several internal customers (at the end of the chapter, a summary on how to undertake an individual session is also included). The objective of the session was to understand what were the key aspects that the customer considered important and what were they expecting from the service, instead of guessing it. On the other hand, with these workshops we were also trying to involve the customer, in order to improve the communication between both parties. At this point, the customer usually starts perceiving something is beginning to change.

The workshop consisted of the following steps: We selected a representative from each of the six business areas that were involved in the service. Sessions had to be attended by 5 to 8 people in order to be effective.

The session took 2 hours and at the beginning we explained our objective and the exercise to be done.

In the end, the attendees were thanked and a summary of the session was made. We committed ourselves to keep them informed of the next steps.

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CHAPTER 3 VOICE OF CUSTOMER

HOW WE ENGAGED THEM DELIVERING A VOC WORKSHOP

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM DELIVERING A VOC WORKSHOP

Indentifying the value for the Customer To identify the service key aspects, we spent some minutes with the attendees in order for each one of them to individually write on Post-its (one aspect per Post-it) which aspects they considered important and were expected from the service.

Five minutes later, the facilitator collected the Post-its and read them out loud, sticking them to the wall. Aspects were grouped by affinity:

INITIA SUPPO L RT

RELIABILITY / QUALITY NTS IREME REQU OVERAGE C

RING S COVE ENT IREM U Q E R

FUNCTIONALITY

ITY PROXIM

RIG REQUIR HT EMEN

CLO

SEN

CLO

SEN

TS

RELI OF S ABILITY OLU TION S

ESS

ESS

TRANS

PAREN C

Y

INITIA L SUPPO RT

QUALITY ONS OF SOLUTI

COMM

ITTME

NT

COMM

ESS BUSIN ION T A T ORIEN

ESS BUSIN N VISIO

UNDE RSTAN DIN OF BU SINES G S

MEET NES DEADLI

UNICA TION

W T VIE JOIN INESS US ON B EDS NE

BE PRE ING DICT ABL E

TIP

GETTING IT DONE ENCY

SPAR TRAN

COMMITMENT TO THE PLAN

It is important to collect all comments from the group or individual customer that aim at improving the service.

56

ER AFT T LP HE LL OU RO

CONTRIBUTION TO SOLUTIONS ING UT RIB NT ITH S O C W ION T LU SO

GO THE EXTRA MILE AND MAKE A DIFFERENCE

CHAPTER 3 VOICE OF CUSTOMER

HOW WE ENGAGED THEM DELIVERING A VOC WORKSHOP

Ranking the value for the customer 1. RELIABILITY / QUALITY

32 VOTES

2. COMMITMENT WITH THE PLAN

30 VOTES

3. REQUIREMENTS COVERAGE

29 VOTES

4. CLOSENESS

15 VOTES

5. INITIAL SUPPORT

12 VOTES

6. TRANSPARENCY

8 VOTES

All the identified aspects were prioritized by the team in order to determine which were the most important and which the least ones. This exercise can be made by having people vote, for example, a score from 1 to 6 points for each of the aspects.

Then, the team provided a score for their current satisfaction level on each aspect of the development service. For that, each team member ranked from 1 to 5 (1 being less satisfied, 5 most satisfied) each identified aspect.

For the sake of future monitoring, the average satisfaction score for each aspect was calculated. This data was complemented with other metrics like the median or dispersion measurements like variance. Outliers were also taken into account in order to analyze them in detail with the customer that provided that particular score.

At the end of the workshop, comments and improvement proposals made by the team were collected. The facilitator committed himself to send the results of the session to the attendees.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM MAKING THE RESULTS VISIBLE

Identifying what to do 1. RELIABILITY / QUALITY

2,1

2. COMMITMENT WITH THE PLAN

1,9

3. REQUIREMENTS COVERAGE

2,9

4. CLOSENESS

2,2

5. INITIAL SUPPORT

2,4

6. TRANSPARENCY

2

PRIORITIZE IMPROVEMENT EFFORTS

KEEP IT & ENHANCE IT

1

2

3

4

ADDED VALUE

After the workshop, the prioritized aspects scored by current satisfaction level were represented in a graphic over two axes: Added value and Customer Satisfaction.

This representation helped to prioritize future actions.

SATISFACTION LEVEL

5

6 ASSESS NEED FOR IMPROVEMENT

ASSESS HOW IT IS BEING DONE

CUSTOMER SATISFACTION 58

CHAPTER 3 VOICE OF CUSTOMER

HOW WE ENGAGED THEM MAKING THE RESULTS VISIBLE

Requirements and wishes Now the team knew what the customer really valued and where to focus on. Everything that helps in achieving or reinforcing these aspects will be considered ‘Added Value’. All effort from the teams should be oriented to this.

VoC REQUIREMENTS

WISHES

RELIABILITY & QUALITY COMMITMENT WITH THE PLAN

ADAPTABILITY TO FUTURE CHANGES

REQUIREMENTS COVERAGE

USABILITY

CLOSENESS

CONTRIBUTING WITH MORE SOLUTIONS

INITIAL SUPPORT TRANSPARENCY

TIP

Comments regarding non key aspects or that the customer considers to be nice to have but are no requirements, are included in “Wishes”.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM MAKING THE RESULTS VISIBLE

Making the requirements measurable Once the requirements were known, a Critical to Quality Tree (CTQ tree, on the next page) was build with the purpose to focus on those attributes that were critical to quality (CTQ) aspects and indicators were assigned to them in order to allow their tracking with the customer in the future.

TIP

This tree has to be shared with the customers and they have to validate it to ensure that we are aligned.

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CHAPTER 3 VOICE OF CUSTOMER

HOW WE ENGAGED THEM CTQ TREE

BUSINESS GOAL

AVAILABILITY OF SOLUTIONS THAT SUPPORT BUSINESS NEEDS

VoC

DEVELOPMENT OF SOLUTIONS ACCORDING TO THE BUSINESS NEEDS

OBJECTIVES

CTQ

IMPROVE QUALITY

RELIABILITY & QUALITY

IMPROVE TIME-TO-MARKET

REQUIREMENTS COVERAGE

COMMITMENT WITH THE PLAN

INITIAL SUPPORT

IMPROVE RELATIONSHIP

CLOSENESS

TRANSPARENCY

ATTRIBUTES

RELIABILITY OF THE SOLUTION

TESTING FAILED

CUSTOMER SATISFACTION

MILESTONES ACCOMPLISHED

TRANSITION SUPPORT

SUPPORT OF INCIDENTS / SERVICE REQUIREMENTS OF THE NEW SOLUTION

SERVICE REVIEW MEETING WITH THE CUSTOMER

SOLUTION STATUS REPORTING

KPI

# OF POST IMPLEMENTATION INCIDENTS

% OF PASSED TESTS

CUSTOMER SATISFACTION WITH REQUIREMENT ACCOMPLISHMENT

% MILESTONES FINISHED IN TIME

% USERS TRAINED IN THE FIRST MONTH

MEAN TIME TO ASSIST INCIDENTS / SERVICE REQUIREMENTS

% CUSTOMERS WITH SERVICE REVIEW MEETING

% MONTHLY REPORT DELIVERED IN TIME

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM BUILDING A NEW RELATIONSHIP WITH THE CUSTOMER

Walking the path together The exercise allowed to specify how business goals were being translated into performance indicators in order to ensure we were on the right track.

Follow-up meetings with customers can be made to review if objectives associated to indicators are being achieved and if they are still the right ones or if there is a need to change them because customer needs have also changed.

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CHAPTER 3 VOICE OF CUSTOMER

HOW WE ENGAGED THEM INDIVIDUAL INTERVIEWS

Creating a space for understanding In the case of individual interviews, we had one case with a customer of a Helpdesk service. We decided to conduct three individual interviews with internal customers. As in the group session, the objective was to understand what the actual needs were instead of guessing them.

Each one of the interviews was based on allowing the customer to verbalize what their needs and priorities were. We started off with a general approach and continued going down to detail as much as possible. The steps were the following: We selected a representative for each one of the three business areas.

A 1 hour interview took place in an comfortable environment for the customer, for example, his office or in a meeting room. At the beginning of the interview the goal and the exercise were explained to them.

During the interview, notes were taken, especially quotes from the customer. The interview ended with a summary of the notes taken and the commitment to keep them informed of the next steps, pretty much in the same way as with the group exercise.

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THE LEAN PLAYBOOK

HOW THIS HELPED THE TEAM FOCUSING ON CUSTOMER VALUE

Well oriented efforts After using this tool, the team learned what the customer really valued and on what they had to focus. This knowledge was shared with the customer and both parties agreed that following that path would satisfy the customers expectations.

All efforts that contributed to achieve or reinforce the key aspects for service quality were focused on adding value and the team was then sure that their efforts were well oriented.

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Chapter 4

LEAN GAMES

QUICK CARD What is it

CHECKLIST

A game is an activity performed by groups or by a team towards a goal, that challenges them to fight for the best results. The context of the game should be different from the team’s daily activity and the way to obtain the best results is by applying the Lean principles.

When to use it To convince your sponsors to implement Lean within the organization and/or to explain the Lean philosophy to other groups and stakeholders that could be impacted but are not directly involved in the Lean transformation.

Who should be involved The participants of the game should be part of the same group. Every game should have just one intention: to provide awareness, to convince, to gain sponsorships, etc..

WHAT TO DO

WHAT NOT TO DO

Involve the entire team in the workshop.

Allow some cheating during the game to achieve the results you want.

Let the game go somewhere that will not contribute to the team development.

67

Explain the game as necessary to avoid any misunderstanding.

Help participants during the game. Repeat the instructions if necessary.

Let participants debrief during the development of the activity.

At the end, remark the goal of the game and how it has been reached.

THE LEAN PLAYBOOK

A GAME ABOUT ‘PHYSICAL COMMUNICATION’ IMPROVING INTERNAL CUSTOMER SERVICES

Show team members that physical layout is important to improve communication An internal Customer Service team said that they were communicating well among them.

Everybody did their job and knew when and how to “pass the ball” to the next peer. But, is this a real collaboration? Is this squeezing all the possible value from teamwork? We used the “ball of yarn” game to visualize how to improve communication, especially when focusing on the physical layout that can block communication or facilitate it.

HOW CAN WE EXPLAIN CONCEPTS WITH GAMES? theleanplaybook.net/games

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CHAPTER 4 LEAN GAMES

A GAME ABOUT ‘PHYSICAL COMMUNICATION’ THE GAME

During a Lean standard project, when the team is working on identifying how to improve their daily work, it is interesting to introduce some concepts that you can consider “Lean Essentials”: Communication, Customer Focus and, naturally, modifying the physical layout to facilitate communication.

We use games because it helps to open people’s minds and also because it contributes to better understand concepts while avoiding the risk of having people perceive it as an imposition.

How is the game designed?

The players take a seat around the table as they want and everybody is assigned with a random role for a mortgage request role-play. This game is designed for 7 to 16 players. These are the roles: Buyer (1 or 2) Seller (1 to 3) Realtor (1) Banker (3 to 5) Buyer’s parents (1 or 2) Council workers (1 to 3)

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THE LEAN PLAYBOOK

A GAME ABOUT ‘PHYSICAL COMMUNICATION’ THE GAME

In the first round, people start to pass the yarn ball among them according to a story on how the mortgage was signed. Each time one of the players receive the ball, they shall hold it making a knot around their finger, before passing it to the next mate, so the ball is continuously being unraveled.

For the second round, with the same story, people should decide to place themselves in order to minimize the spent yarn. After both rounds, players will be able to compare the length of the yarn ball spent in a corridor and reflect upon what round was more efficient and why. This is a great moment to take a team picture!

How is the game solved?

Depending on the number of players, the story can change slightly. E.g.

“The buyer wants to buy a house and so she speaks with her husband. The buyer talks with the realtor. The realtor visits seller 1 and also seller 2. The realtor sets a meeting between buyer and seller 2. Buyer goes to the bank and afterwards visits her father to ask for some financial assistance. The buyer goes back to the bank and gets the mortgage. The buyer pays the house to seller 2 and, finally, speaks with the council worker to register her new house”.

This is just an example, but you may go beyond this story in your game. But whatever story you choose, you will have to stick to the same one in both rounds.

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CHAPTER 4 LEAN GAMES

A GAME FOR TOP LEVEL MANAGEMENT THE PURPOSE

Trying to convince top level management to introduce Lean in the organization?

Paul is a true Lean believer. He is the VP of Organization in a multinational company that is strongly hierarchized. He has seen that implementing Lean would be very interesting in one of the processes that the company performs. This process is an internal activity where he feels there is a lot of inefficiency and lack of customer focus. He has also noticed that frontline employees have been getting used to being in a comfort zone; they continue doing things the same way they have been for years.

LOOK AT THIS OTHER EXAMPLE OF A LEAN GAME theleanplaybook.net/leangame

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THE LEAN PLAYBOOK

A GAME FOR TOP LEVEL MANAGEMENT THE GAME

We created a two paths seminar with 12 people, including the responsible of the process in the organization for certain locations, the process owners, our sponsor and two frontline employees.

The first path was dedicated to a Lean Game and the second one’s objectives were to teach them about the Lean principles and to show how the transformation should be done within the organization.

CUSTOMER

How is the game designed?

You, the player, face your first day working for an insurance company. You take part in the analysis of how much money your company has to pay to the customer in a contingency case.

ANALYSIS

Each player has a different role, but all of them have the same characteristics:

RECEPTION

Clear instructions to play the role as the current process indicates.

You know who precedes you and who participates in the following steps in the value chain.

There is also work in progress and you will receive new requests from the customer, 2 per minute in rounds of twelve minutes.

DECISIONS

After each round all the team participates in a debrief and they are allowed to change anything to get better results.

FACILITIES 72

REVIEW

CHAPTER 4 LEAN GAMES

A GAME FOR TOP LEVEL MANAGEMENT THE GAME

We played the game and, as it was expected, the team applied some of the Lean principles to create a better process. During the session, we encouraged them to apply some tools, as the ones described in this book, to better understand the process and to facilitate the ideas to improve it.

How is the game solved?

There is no particular best option, but the team applied some remarkable improvements based on the Lean philosophy:

CUSTOMER

Listening to the customer first. In most of the cases the company can make a decision by default, just by checking the customer profile. That way you can avoid the analysis and decision phases for all these cases (6’)

RECEPTION

Reduce inefficiency. There is disorganization in the original process. Tables are separated, every communication goes through reception, envelopes are needed to communicate‌ The team decided to join the tables and there was no need for brokers or intermediaries anymore.

DECISIONS

ANALYSIS

Embed quality. Control points were repeating what was done at the analysis and decisions phases. Now, the quality was embedded into the process, each role ensured his/her job was done correctly.

YOU CAN BUY A SIMILAR GAME AT

www.velactionstore.com/lean-office-flow-exercise

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THE LEAN PLAYBOOK

74

Chapter 5

VISUAL MANAGEMENT

QUICK CARD What is it

CHECKLIST

Visual management makes work visible to all and helps management to involve the entire team in meeting daily objectives and to review together the status of the different actions and any issues that might appear.

When to use it In any situation and for any professional activity. However, visual management delivers more value in environments with: • Lack of daily communication between the manager and his/her team or lack of transparency regarding what the team is doing.

• Lack of collaboration and coordination among team members when executing orders.

• No performance measurements based on KPIs and clear objectives.

Book a meeting room for the initial workshops.

Kraft paper, Whiteboards or similar.

Markers, Ruler, Eraser, Whiteboard markers.

8×8 cm colored post-it notes.

You might also use magnets if the board is magnetized.

WHAT TO DO

WHAT NOT TO DO

Use a board as a key element for team communication and coordination.

Include aspects like weekly objectives, team morale or KPIs during the sessions.

Reinforce the use of a board and daily standup meetings before starting the daily work.

Replace current management tools with boards.

Duplicate information from existing tools on the boards, generating more bureaucracy.

Use daily standup meetings to discuss other aspects that are not related with the daily work.

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THE LEAN PLAYBOOK

THE CASE IMPROVING THE COMMUNICATION AND MANAGEMENT OF AN IT SERVICE DELIVERY TEAM

A team is not just a group of people An IT Service Delivery team consisted of 12 people and one manager. Each team member performed his/her work to the best of their abilities, having specific guidelines from the manager at their disposal. However, nobody knew what the other team members were doing and there was a general sense of an unbalanced workload that had been never confirmed due to the lack of transparency of the overall work. Of course, everyone claimed to have a heavy workload and yet projects were not delivered on time, suffering continuous delays.

In order to tackle this constant delay, ten Project Managers and two Architects that were part of the team were called to a meeting, in order to explain the case and propose a solution.

Data related to budget compliance and project planning was dumped from their Project Management Tool, that each Project Manager managed in specific, ad-hoc meetings with the Unit Manager.

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CHAPTER 5 VISUAL MANAGEMENT

THE CASE IMPROVING THE COMMUNICATION AND MANAGEMENT OF AN IT SERVICE DELIVERY TEAM

Together is better As a result of that meeting, a decision was made to determine the goals and establish indicators using the Voice of Customer (VoC) and the Critical To Quality Tree (CTQ Tree) tools as well as organize workshops to analyze the flow.

Once the workshops ended, the team had: Clear and measurable objectives.

Associated KPIs. Proposals to improve the current flow.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

Designing the content The team was summoned in a room with the objective of designing a board that would help manage their work and improve internal communications between them.

Then, using brainstorming and with our support as Facilitators, our task was to ensure the inclusion of these aspects in the form of weekly/monthly objectives and indicators. We also contemplated a Team Morale section, as this helps foster communication about the stress and engagement level of the Team. At the end of the session, the team created a list of topics that should be included on the board:

PROB LEMS

E MORAL

ABSENCES

TOPIC DAY OF THE

PROJE CT

S

INDIC ATOR S

DAILY WORK

S

IVE

ECT OBJ

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RELEVANT INFORMATION

CHAPTER 5 VISUAL MANAGEMENT

HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

Make it easy After choosing the sections to be included on the board, we took a strip of Kraft paper. The piece was 1.8 meters long and 1.2 meters tall and we stuck it on the wall with the help of some tape.

Kraft paper is the easiest and cheapest option to quickly prepare and start using a Day / Week Board. However, in the medium run we always encourage teams to use posters or whiteboards magnetized, preferably.. Other interesting features to consider when acquiring a whiteboard are the options of it having two sides (in order to use the second side for a Continuous Improvement Board) as well as wheels to move the board around.

These boards can be found on the Internet and cost around $ 200-800, depending on the size and the features included.

There are touchscreens that could serve this purpose as well, especially if you use online Kanban boards such as Kanbanize or Trello.

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HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

When designing the board always consider Workflow orientation: a board must always try to represent the workflow of the team who is using it. An important point to consider are tasks. Tasks must be of a uniform size (try to keep the same granularity) and should respect the time frame of the board (i.e. if the total cycle time is 30 days, then tasks should not be 90 days long).

Ease of interpretation: the board should allow to easily and graphically identify what is happening (work in progress, over-allocation of resources, etc.), helping to visualize the flow and the bottlenecks.

Management model: this means defining the rules on how the information on the board has to be updated. We usually recommend to formally prepare this on a different sheet of paper and place it next to the board.

Start with a simple board to help yourself and the team learn how to use it and then evolve the board according to the Team’s needs.

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CHAPTER 5 VISUAL MANAGEMENT

HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

Building the board Once the content was decided, we prepared the board itself.

At this point it is best that the Facilitator takes on the task of creating the design on a spreadsheet or even a PowerPoint which can then be projected on an empty board. This way the discussion is much easier because, in case of agreement, the Facilitator will just make marks with pens on the projection on the board.

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HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

Building the board In this case we used an Excel sheet in which the board was drawn according to the agreed design.

The left side covered projects and planning for the upcoming weeks in order to have an overview over of the medium term, and anticipate any dependencies or problems.

On the right side were the team members, and their daily tasks that resulted from the planning were on the left side of the board (keeping a workflow orientation, as mentioned before). The panel was completed with the other aspects that the team wanted to include, such as Team Morale and absences.

PLANIFICATION CUSTOMER

BLOCK

WEEK 1

WEEK 2

PROJECT 1 PROJECT 2 PROJECT 3 PROJECT 4 PROJECT 5 PROJECT 6 PROJECT 7 PROJECT 8 PROJECT 9 PROJECT 10 PROJECT 11 PROJECT 12 PROJECT 13 PROJECT 14 PROJECT 15 PROJECT 16 PROJECT 17 PROJECT 18 PROJECT 19 PROJECT 20 PROJECT 21 PROJECT 22

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WEEK 3

WEEK 4

WEEK 5

WEEK 6

WEEK 7

FUTURE

DONE

CHAPTER 5 VISUAL MANAGEMENT

HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

DAILY BOARD ROLE

BLOCK

M

Tu

W

Th

F

DONE

ROLE 1 ROLE 2 ROLE 3 ROLE 4 ROLE 5 ROLE 6 ROLE 7 ROLE 8 ROLE 9 ROLE 10 ROLE 11 ROLE 12 OBJECTIVES OF THE WEEK

KPI

INFORMATION / TOPIC OF THE DAY

MORALE

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ABSENCES

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

Important details The sketch was presented to the team and, at this point, you might consider making any necessary adjustments after listening to their feedback.

Then we proceeded to draw the designed board on the Kraft paper with the help of markers.

If you have limited space or are considering to change its location afterwards, you might as well use both sides of the board for different purposes or teams. In our case, we used a second board to manage problems and improvements for that team.

Once the board was created, it was placed at its final location, taking into account that the daily meetings would be attended by around 13 people and for about 15-20 minutes.

Always keep in mind the feasibility of implementing these boards according to the number of people involved and the physical space you have. For example, a team of more than 15 people will either require more than 15 minutes every day or you might consider splitting them into two smaller groups with two different boards.

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CHAPTER 5 VISUAL MANAGEMENT

HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

Defining rules A key aspect for the smooth functioning of visual management is to establish a clear dynamic, known and agreed by the team and applied rigorously by the Manager or the Lean Facilitator.

It is usually a good idea to create a schedule in which the activities to be performed are described, as well as other aspects such as: Time and duration of the meeting.

Participants.

Inputs and outputs.

It is also a good practice to define and assign roles. Have someone acting as a Time Controller ensuring that the meeting does not exceed the planned time. The Team Manager should lead the meeting, as this is a tool to help him seeking agility and reviewing all points in the agenda.

SEE THE NEXT PAGE

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HOW WE ENGAGED THEM THE BOARD AS A KEY TOOL

KEY OBJECTIVES

SCHEDULE

LEADS BY

PERFORMANCE

INPUT

OUTPUT

PERFORMANCE OF THE DAY BEFORE

PERFORMANCE OF THE DAY BEFORE TODAY’S PERFORMANCE

SLA’S OF THE DAY BEFORE DAILY PLANNING

(FOCUS ON AREAS WHERE SLA IS NOT ACHIEVED)

UPDATED PROBLEM BOARD WITH SOLUTION DATES AND RESPONSIBLES

PLANNED CHANGES FOR TODAY ATTENDANTS

PROBLEM RESOLUTION

LEADER AND TECHNICIANS

CREATE A PROBLEM ON THE PROBLEM BOARD REVIEW THE PROBLEMS ASSIGNED TO THE TECHNICIANS DISCUSS ABOUT HOW THE OPERATIONS ARE BEING EXECUTED TO BE AN INPUT FOR THE PROBLEM BOARD

LEADER

ATTENTION

LOGISTICS

LOCALIZATION

PLANNING COMPLIANCE

STAND FACING THE BOARD

COMPLIANCE WITH ATTENDANCE TO MEETINGS RULES

DURATION

MEETINGS SHOULD BE HELD AT THE MOMENT OF THE DAY WHEN TEAM ACTIVITY IS LOWER

5-10 MINUTES MAXIMUM

PERFORMANCE BOARD THE VISUAL REPRESENTATION OF KPI’S, WHICH ARE USED DURING THE DAILY MEETING TO FACILITATE THE PERFORMANCE REVIEW

RESOLUTION PROBLEM TOOLING IT’S THE PROCESS BASED ON THE CARDS (FOR PROBLEMS THAT REQUIRE A ROOT CAUSE ANALYSIS) AND A PROBLEM BOARD THAT IS USED TO FACILITATE THE PROBLEM RESOLUTION

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CHAPTER 5 VISUAL MANAGEMENT

HOW THIS HELPED THE TEAM COMMUNICATION AND RESULT ORIENTED

Working together in the same direction The team now shared activities, problems and successes.

Everyone knew what the others did and had a clear vision of the workload. They also felt more responsible to do their tasks, because they knew the dependencies between their own work and the work of their peers. The objectives and indicators were known by everyone and the entire team was accountable for them. Now the Team manager had all the information he needed in order to manage work and to report to the customer as well as Top Management.

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THE LEAN PLAYBOOK

90

Chapter 6

FLOW AND PULL

QUICK CARD What is it

CHECKLIST

The description and redesign of the value chain in order to offer customers the most controllable and predictable response possible.

When to use it The organization is not able anymore to control the response given to customers and those feel that their requests are handled in an unpredictable way each time.

Who should be involved People in production units and those that are in contact with the customer to communicate to them the service levels.

First, define the correct Pull, then start working with the Pull Analyze flow as an One Piece Flow Use visual management to better understand your flow Communicate to customers how the new flow is, and how it is affecting them Involve everyone in the team

WHAT TO DO

WHAT NOT TO DO

Start with something that impacts the customer. For instance, something that always annoys them because of delays or similar.

Business comes first. You must always allow people to continue accomplishing their objectives, not disturbing their daily operations too much.

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THE LEAN PLAYBOOK

THE CASE HOW TO DIRECT CUSTOMER REQUESTS TO GET THE BEST DELIVERY?

Building a 7 days delivery process An order-taking team was attending customer requests. Unfortunately, customers were experiencing some problems when ordering: In fact, they did not know if someone had picked the message up. They also did not know when it would be attended (and they had the impression that it always took too long). Finally, it was also possible that the execution did not meet completely the needs they had.

According to the process, to attend a request, seven sub-teams had to act in a row. All of them had some other work to do, so the requests were placed in queues. These sub-teams only talked to the others during handovers: when a sub-team finished its work, it sent an alert to the next one using an IT solution. All the sub-teams had to access to the application to know if they had any pending jobs.

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CHAPTER 6 FLOW AND PULL

THE CASE BUILDING A 7 DAYS DELIVERY PROCESS

The main figures of the process (as they were before our intervention): SUBTEAM 1

SUBTEAM 2

SUBTEAM 3

SUBTEAM 4

SUBTEAM 5

SUBTEAM 6

SUBTEAM 7

GLOBAL PROCESS

MIN.

1 DAY

1 DAY

3 DAYS

3 DAYS

2 DAYS

1 DAY

2 DAYS

14 DAYS

AVG.

3 DAYS

1,5 DAYS

5 DAYS

4 DAYS

2 DAYS

1,5 DAYS

7 DAYS

25 DAYS

MAX.

5 DAYS

2 DAYS

2 MONTHS

6 DAYS

2,5 DAYS

2 DAYS

1,5 MONTHS

2,5 MONTHS

Apart from these numbers, the other main concern of the team was to increase customer satisfaction

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM SETTING UP THE WORKSHOPS CYCLE

Following the LEAN stages We started as you would expect in a Lean project: LISTENING TO THE VOICE OF THE CUSTOMER (VoC) Low satisfaction in both delivery and communication.

DESCRIBING THE PROCESS We drew the value stream map (see Chapter 10) with the seven activities performed by the teams MEASURING THE MAIN FIGURES To discover the average times and the variability that was shown before.

During the analysis of Root Causes, we identified the need to improve the flow and establish a pull procedure primarily focused on customers.

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CHAPTER 6 FLOW AND PULL

HOW WE ENGAGED THEM HOW TO FIND THE ROOT CAUSES

Detecting the root causes The root causes detected in the analysis were the following: None of the sub-teams had been defined as responsible to interact with the customer.

Although the required effort —Value Added Time— is quite low (the activity of the sub-teams is just a matter of a couple of minutes and there are only one or two requests in progress for each team), a lot of time was spent waiting in the queues.

There was not any way to predict the incoming work. They just waited for the message to appear in the application.

And also, there was not any way to guess how much time the fulfillment of the request would take.

All these causes led us to believe that we had to activate a “Flow and Pull” reengineering with the team members.

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THE LEAN PLAYBOOK

IMPLEMENTING THE SOLUTION WHAT ARE THE STEPS TO BE FOLLOWED TO REACH THE SOLUTION?

First: Improve flow We determined what the new value stream was: One person of the sub-team that received the request would assume the role of “coordinator” with the customer.

His new responsibilities would include the following:: • Sending a message to the customer to indicate that a request had been received.

• Talk with the other sub-teams to determine if some “extra work” could delay the request more than one day per team and include this information in the initial message.

• Clarify, when necessary, the terms and conditions of the request.

• Check with the customer if the request had satisfied his/her needs.

All the sub-teams would commit themselves to solve the request they received within one day.

To move the requests from one sub-team to another, a representative of each sub-team would attend a daily standup meeting at 9:30 am.

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CHAPTER 6 FLOW AND PULL

IMPLEMENTING THE SOLUTION WHAT ARE THE STEPS FOLLOWED TO REACH THE SOLUTION?

144 cm

AREA

INCOMING

ANALYSIS

PREPARATION

EXECUTION

TEAM 2 TEAM 3 TEAM 4 TEAM 5 TEAM 6

7,5 cm

28 cm

TEAM 1

21 cm

ON TIME

Placing the flow in a chart

DELIVERED ON TIME

DELIVERED LATE

ISSUES

TEAM 2 TEAM 3 TEAM 4 TEAM 5 TEAM 6

DELAYED

SUGGESTIONS FOR IMPROVEMENT

TEAM 7 21 cm

13 cm

26 cm

26 cm

26 cm

112 cm

99

30 cm

The board indicated what the status of each request was and if the team was on track with the expected committed date.

127 cm

TEAM 7 TEAM 1

The team decided to use a “coordination board” to establish a clear flow for the requests.

By default, the committed date was to be seven days after receiving the request, but the “coordinator” could identify some exceptions to these conditions.

The completed requests would be transferred to the right column after they were closed.

Additionally, there was also space for issues and suggestions for improvement at the bottom right.

THE LEAN PLAYBOOK

IMPLEMENTING THE SOLUTION WHAT ARE THE STEPS FOLLOWED TO REACH THE SOLUTION?

Then: Start pulling The team informed their customers about this new procedure and that they would be contacted for each request they registered.

From a specific date onwards (as they informed to the customers), each new request was to be included on the board. The requests that were already in progress by the time the new procedure started, were decided not to be included on the board and neither in the daily stand-ups. However, all the new ones were to be incorporated using the new procedure.

At the same time, we started measuring how the new procedure was performing. The observation period took 6 weeks, and we performed a new VoC round of interviews after it had finished to see if the customer had perceived any improvements.

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CHAPTER 6 FLOW AND PULL

RESULTS OF THE IMPLEMENTATION WHAT ARE THE STEPS FOLLOWED TO REACH THE SOLUTION?

Results of the implementation REQUESTS PROPERLY COMMUNICATED

100%

REQUESTS WITHOUT DEVIATION

95%

AVERAGE TIME TO SOLVE

7,2 DAYS

REQUESTS SOLVED IN 7 DAYS

92%

After the observation period the results demonstrated crystal clear that the effect of the changes had been very positive in terms of communication and time reduction.

We also noticed a big increase in the level of satisfaction of the customers with the service. They even went as far as participating in the recording of a video summary about the experience endorsing the new implemented procedure.

SEE A FUNNY EXAMPLE OF FLOW AND PULL IN A BAKERY theleanplaybook.net/bakery

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102

Chapter 7

TEAM BAROMETER

QUICK CARD What is it

CHECKLIST

The Team Barometer is the result of a survey to all team members. This survey is kept anonymous and it allows to identify areas of improvement to achieve a better work environment, focusing on the behavior and attitude aspects of the team.

When to use it Use it in these situations: • At the beginning of a Lean Transformation to assess the situation of the team.

• Periodically, to assess the pulse of the team.

• In difficult environments or demotivating situations to determine what is going wrong.

Define a survey template to use as the Team Barometer.

Release the survey to the whole team, keeping it confidential.

Get a meeting room for the team for around 3-4 hours.

Have an Excel spreadsheet ready for collecting and processing data from the surveys.

Have ways ready to encourage brainstorming, as well as markers and Post-it notes.

WHAT TO DO

WHAT NOT TO DO

Communicate its purpose and ensure it is taken anonymously.

Specify that the barometer is an exercise to identify improvement areas.

Work on the results with the team and define an improvement proposal for Management.

Hide, refute or adopt a defensive position regarding the results.

Ignore or postpone doing this exercise periodically.

Impose solutions or reach a conclusion too fast.

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THE LEAN PLAYBOOK

THE CASE IMPROVING THE WORK ENVIROMENT IN A FRUSTRATED AND DEMOTIVATED SUPPORT TEAM

People don’t come demotivated from home At the beginning of a Lean Transformation, a support team composed of Level 1 and 2 people was working on a “best effort” situation, and they saw that their efforts did not produce the desired results. This created frustration and demotivation in the team, something that was worsened by the fact that they also perceived indifference from the rest of the organization.

This was causing overall the engagement level of the team to go down consistently.

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CHAPTER 7 TEAM BAROMETER

THE CASE IMPROVING THE WORK ENVIROMENT IN A FRUSTRATED AND DEMOTIVATED SUPPORT TEAM

Understanding the situation As a result of this situation, the working environment was not adequate anymore and the results of employee engagement surveys were scoring very low. Managers were facing a challenge for which they had no knowledge, expertise or even time to devote to its solution.

The relationship between the Team and Management (organization) was entering into a Lose – Lose mode that would hurt both parties in the long term.

The Team Barometer focuses on four large dimensions (Organization, Leadership, Monitoring and Recognition) that allows us to understand the current situation of the team and works as the basis for specifying which actions can be carried out in order to improve the work environment as well as the team motivation.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM THE SURVEY

Collecting information from the team To begin, we gathered all team members in a meeting room and explained the exercise to them.

During that meeting, they were given the survey, to be returned completed within a specific date.

The survey was undertaken anonymously and it was advised that all members took it, even coordinators or team leader roles.

Depending on the number of persons the data can be segmented by group, job category or function, as long as anonymity is preserved.

Once we got all surveys back within the defined period, we proceeded to record and analyze the data using an Excel spreadsheet.

ORGANIZATION

I LIKE MY JOB I KNOW AND UNDERSTAND STRATEGY AND OBJECTIVES I KNOW HOW MY WORK CONTRIBUTES TO ACHIEVE THE OBJECTIVE THERE IS A GOOD MANAGEMENT TEAM MANAGERS ARE ORIENTED TO MANAGE PEOPLE PROCESSES AND TOOLS HELP ME DO MY JOB IF WE WANT TO IMPROVE PERFORMANCE WE SHALL CHANGE THE WAY WE WORK I THINK THE COMPANY MUST CHANGE

LEADERSHIP

MANAGERS SUPPORT THE TEAM ON A DAILY BASIS MANAGERS COMMUNICATE PROPERLY I TRUST IN THE PERSON THAT I DEPEND ON MANAGERS ENCOURAGE ME TO PROPOSE IMPROVEMENTS MY MANAGER LISTENS TO ME WHEN I NEED IT

108

STRONGLY DISAGREE

DISAGREE

AGREE

STRONGLY AGREE

☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐

STRONGLY DISAGREE

DISAGREE

AGREE

STRONGLY AGREE

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

CHAPTER 7 TEAM BAROMETER

HOW WE ENGAGED THEM THE SURVEY

MONITORING

THE PERSON WHO I DEPEND ON PROVIDES ME WITH FEEDBACK WHICH HELPS ME IN MY WORK THERE IS AN APPROPIATE PROGRAM OF STAFF DEVELOPMENT AND TRAINING FOR MY LEVEL I MAINTAIN REGULAR MEETINGS WITH MY MANAGER TO REVIEW MY PERFORMANCE I FEEL MY MANAGER ACKNOWLEDGES MY EFFORT DECISIONS ON PROMOTIONS ARE FAIR

ACKNOWLEDGMENT

EXTRA EFFORTS AND A GOOD JOB ARE PUBLICLY ACKNOWLEDGED BY MANAGERS THE LEVEL OF COMPENSATION IS FAIR FOR THE WORK I DO MANAGERS ARE FAIR IN ACKNOWLEDGING THE MERIT OF EACH ONE ACKNOWLEDGEMENT OF MY EFFORT AFFECTS THE DEGREE OF PERFORMANCE OF MY WORK I DON’T WORK MORE THAN I WANT TO

109

STRONGLY DISAGREE

DISAGREE

AGREE

STRONGLY AGREE

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

STRONGLY DISAGREE

DISAGREE

AGREE

STRONGLY AGREE

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

☐ ☐ ☐ ☐ ☐

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM LEADING A TEAM BAROMETER WORKSHOP

Sharing information with the team Once we got the results of the survey, a meeting with the entire team was arranged to present and determine the possible causes for low scores as well as the actions to be taken to improve in the future. Keep in mind that some issues might be very sensitive and could raise internal disputes if not managed properly. Try finding out about very low scores by interviewing people before starting a conversation with the Team.

As facilitators, we led this meeting. It was necessary to set up the right atmosphere of trust and confidence for the team to express themselves sincerely and for the workshop to be useful.

The results were shared during the meeting in order to discuss the necessary improvements and the ideas of how to undertake them.

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CHAPTER 7 TEAM BAROMETER

HOW WE ENGAGED THEM LEADING A TEAM BAROMETER WORKSHOP

Creating the adequate atmosphere The meeting began with an introductory round to create the right atmosphere by breaking the ice. We usually try using the following: ‘Welcome to this session. Most of you already know each other because you work together. That is why we propose something alternative. Say your name and a fun or interesting fact about you (or your hobby) that your colleagues do not know’.

We started by being the first ones to provide an example and then we went round the table with all participants.

Then we began with the session. ´We are gathered without managers to discuss about the organization. The purpose of this session is to know your opinions and feelings about the current organization as well as your ideas and vision for the future organization’.

Finally we explained the rules for the session and answered questions raised.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM LEADING A TEAM BAROMETER WORKSHOP

Drawing the current situation Now we gave the instructions for the exercise. People were placed in groups of about 8 members to make a collage describing the current situation within the organization.

TIP

To do this, you can use any variant version of brainstorming, i.e. having the team placing Post-it notes with words or using different photos and each team selects the ones that express their feelings.

We then proposed questions to answer for each of the groups such as: How is it working here?

What does this organization mean for me?

How is our team?

After about 20 minutes, each group had built their collages and the team gathered again to present their results.

At that point, we asked each group to explain the story behind their collage, debating on their views and reaching consensus on a common vision. Then we went into looking at the results of the survey to move forward with the meeting.

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CHAPTER 7 TEAM BAROMETER

HOW WE ENGAGED THEM LEADING A TEAM BAROMETER WORKSHOP

Drawing the desired situation Then the next step was explained. Having had a clear picture of their view on the organization and the team, we wanted now to determine the desired situation for them.

This would mean keeping eventually some elements of the current organization, or eliminating them and adding others.

The groups were asked to create once more a collage describing the desired situation within the organization, using one of the examples as before (Post-its or pictures).

We launched questions such as: How would you like working here to be like?

What would you like the organization would mean to you?

How would I like to be part of a team?

After another 20 minutes approximately, each group had built their collages and the team went on to another round of presentations. .

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM LEADING A TEAM BAROMETER WORKSHOP

Finding improvements together We finally wanted to create a roadmap to implement the desired situation. We therefore asked the Team for ideas on how to make this a reality at every level (team level or organizational level).

When doing this exercise, we were looking at both actions and behaviors in the team. We used brainstorming technique until we had generated enough ideas to create a roadmap.

Closure As the last action on our side, we closed the session, indicating what the next steps were. The results of the workshop should then be reviewed with Management in order to validate the actions and prioritize them.

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CHAPTER 7 TEAM BAROMETER

HOW THIS HELPED THE TEAM LISTENING TO THE PEOPLE AND IMPROVING WITH THEM

But this is only the beginning...

The team now had a space to express their feelings and opinions and a roadmap to achieve a better situation than before.

The quantitative part of the barometer is performed each quarter and twice a year the team meets to discuss the situation.

Keep in mind that all actions taken as part of the Transformation effort will also affect the scores.

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THE LEAN PLAYBOOK

HOW THIS HELPED THE TEAM RESULTS OBTAINED

AVERAGE Q1 2014

AVERAGE Q3 2014

I LIKE MY JOB

2,6

3,5

I KNOW AND UNDERSTAND STRATEGY AND OBJECTIVES

1,9

2,7

I KNOW HOW MY WORK CONTRIBUTES TO THE ACHIEVE THE OBJECTIVE

2,4

3,1

THERE IS A GOOD MANAGEMENT TEAM

2,0

3,2

MANAGERS ARE ORIENTED TO MANAGE PEOPLE

2,0

2,7

PROCESSES AND TOOLS HELP ME DO MY JOB

1,9

2,2

IF WE WANT TO IMPROVE PERFORMANCE WE SHALL CHANGE THE WAY WE WORK

3,4

2,5

I THINK THE COMPANY MUST CHANGE

3,5

2,3

MANAGERS SUPPORT THE TEAM ON A DAILY BASIS

2.8

3,2

MANAGERS COMMUNICATE PROPERLY

2,5

3,1

I TRUST THE PERSON I DEPEND ON

2,6

2,9

MANAGERS ENCOURAGE ME TO PROPOSE IMPROVEMENTS

2,5

3,1

MY MANAGER LISTENS TO ME WHEN I NEED IT

1,9

2,5

THE PERSON WHO I DEPEND ON PROVIDES ME WITH FEEDBACK WHICH HELPS ME IN MY WORK

2,0

2,9

THERE IS AN APPROPIATE PROGRAM OF STAFF DEVELOPMENT AND TRAINING FOR MY LEVEL

1,6

2,6

I MAINTAIN REGULAR MEETINGS WITH MY MANAGER TO REVIEW MY PERFORMANCE

2,1

3,1

I FEEL MY MANAGER ACKNOWLEDGES MY EFFORT

1,9

3,5

DECISIONS ON PROMOTIONS ARE FAIR

1,9

2,1

EXTRA EFFORTS AND A GOOD JOB ARE PUBLICLY ACKNOWLEDGED BY MANAGERS

2,4

2,7

THE LEVEL OF COMPENSATION IS FAIR FOR THE WORK I DO

2,4

2,5

MANAGERS ARE FAIR IN ACKNOWLEDGING THE MERIT OF EACH ONE

2,0

2,5

ACKNOWLEDMENT OF MY EFFORT AFFECTS THE DEGREE OF PERFORMANCE OF MY WORK

2,0

1,8

I DON’T WORK MORE THAN I WANT TO

1,4

1,4

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Chapter 8

CONTINUOUS IMPROVEMENT BOARD

QUICK CARD What is it

CHECKLIST

A tool for the introduction and management of continuous improvement in a visual manner. Perfection is the horizon and the company must always strive for it.

When to use it From the beginning, Lean thinking cannot be conceived without continuous improvement. Even though the organization will spend huge efforts in making big changes, continuous improvement must be part of its culture at the operational level.

All teams must dedicate part of their daily time to improve their performance. Small changes can generate significant benefits when put together.

A meeting room for workshops.

Kraft paper, whiteboards or similar.

Markers, ruler, eraser, Whiteboard Markers.

Different color Post-it notes.

Magnets, in case you go for a magnetized board.

WHAT TO DO

WHAT NOT TO DO

Be specific with the proposed improvement and its benefits.

Conform a balanced improvement team with the adequate knowledge.

Include measurement tasks for the results and publicize success.

Expect improvements will occur based on people’s good will.

Be too ambitious with the improvements to address; go for the quick wins.

Leave improvement proposals being unheard.

119

THE LEAN PLAYBOOK

THE CASE AN IT DEVELOPMENT ORGANIZATION WISHING TO IMPROVE ITS ACTIVITY IN INCIDENT MANAGEMENT

Improvement is easier when you have data An IT organization devoted 30% of its development efforts to solve problems and issues in their products. Their resolution time was also very slow, having an average resolution time of 61 days.

Apart from having a long total resolution time, this process was indeed considered waste, since an incident is an error that must be fixed and therefore a waste of resources for the company.

To find improvements that could help, on one hand to reduce the number of incidents, and on the other hand to decrease the effort and the average time to solve them, a team of 8 people was conformed with heterogeneous but complementary profiles, bringing together a deep understanding of the situation.

The newly formed team gathered in several workshops. During these workshops, an analysis of the current situation was conducted, waste was identified along the entire value stream and quantified too. The results were supported with data from the various management tools available, to put facts on the table.

After two workshops, the team had the necessary information to carry out an improvement identification exercise.

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CHAPTER 8 CONTINUOUS IMPROVEMENT BOARD

HOW WE ENGAGED THEM LEADING AN IMPROVEMENT WORSHOP

Organization’s improvements are in the heads of its employees The third workshop focused on the identification and qualification of improvements. The steps carried out during it were as follows: FOR PROPOSAL ENT IMPROVEM

We conducted a brainstorming exercise to identify improvements. Team members were asked to think on ways to solve the waste identified in the previous workshops. At the end, 32 proposals for improvement were identified.

PR IM OPO PR SA OV L F EM OR EN T

We grouped the improvements with an affinity diagram, performing the following tasks:

OR AL F POS MENT O R P E ROV IMP

• We simplified and consolidated the improvements that were identical or very similar and tackling the same issues • Improvements were then grouped by type and size, e.g. (process documentation, organization, tools, etc.) in order to simplify the exercise • We found that all major dimensions had been covered, proceeding then to analyze others, such as training • We isolated those improvements for which the group had no decision-making responsibilities. These improvements were escalated to the appropriate level with sufficient authority.

• Out of these first two steps, a shortlist of 10 major improvements were agreed by the Team.

121

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM Organizing the proposals

+

LEADING AN IMPROVEMENT WORSHOP

NICE TO HAVE

TO DO

Then we proceeded to match the proposals to the objectives of the project and verified that all had been covered. In case this does not happen, make sure the team reviews the objectives and identifies improvements that address them.

• Estimated benefit of the improvement: High, medium or low.

• Feasibility to achieve it: High, medium or low.

FOR PROPOSAL ENT IMPROVEM

BENEFIT

After this check and using a Magic Quadrant, we proceeded to perform a first qualification of the improvements, based on two concepts:

AL FOR PROPOS EMENT IMPROV

PRO IMP POSAL F ROV EM OR ENT

PROPO SAL FO IMPRO R VEMEN T

PRO IMP POSAL F ROV EM OR ENT

The result of the Magic Quadrant led to conclude which improvements were easier and had the greatest impact once implemented, plan for those with a greater complexity and leave those which were easy and with low benefits for later.

FOR OSAL T PROP VEMEN O IMPR

AL FOR PROPOS EMENT IMPROV

PROPOSAL FO IMPROVEM R ENT

PRO IMP POSAL F ROV EM OR ENT

AL FOR PROPOS EMENT IMPROV

The improvements with little benefit and a high degree of complexity were discarded.

TO PLAN

-

NO ACTION

-

122

FEASIBILITY

+

CHAPTER 8 CONTINUOUS IMPROVEMENT BOARD

HOW WE ENGAGED THEM CONCRETIZING THE IMPROVEMENTS

Kaizen sheet When quantifying the improvement, you should bear in mind that in many situations, unlike with production lines in manufacturing, the improvement cannot be translated into tangible and measurable benefits, although we might be able to grasp it and also its cost of implementation. For example, getting to quantify the number of errors prevented or daily time saved by a team meeting can be a complex exercise, difficult to demonstrate.

At this point, you should consider showing the improvements to the sponsor of the improvement program. The improvements should be presented in order to seek validation. Since these improvements are usually more related to adjustments at the operational levels, getting the “good to go� should not be difficult.

Prepare a Kaizen template. A leader was assigned to each improvement. Then, we formed a team that would work on each of them. A sponsor was also assigned to each improvement (someone from top management) that was responsible for facilitating change, making timely decisions and providing resources when needed.

SEE THE NEXT PAGE

123

THE LEAN PLAYBOOK

ID

OWNER

DATE

LEADER KAIZEN TEAM

STEP 1: DEFINE

STEP 4: IMPROVE

PROBLEM DEFINITION

UNIT OF MEASURE

IMPROVEMENTS PROPOSED

EXPECTED RESULTS

MEASURE

STEP 5: MONITOR

GOAL (SMART) SPECIFIC, MEASURABLE, ACHIEVABLE, RELEVANT, TIME BOUND SUCESS FACTORS

ACTION RESTRICTIONS

RESPONSIBLE

DATE

ACTION 1 ACTION 2 ACTION 3

STEP 2: MEASURE

STEP 6: CLOSE UPDATE DOCUMENTATION

CURRENT SITUATION (DATA)

SOLUTION IMPLEMENTATION

TRAINING TO PEOPLE INVOLVED COMMUNICATE AND CELEBRATE SUCCESS

STEP 3: ANALYZE

CONCLUSIONS REVIEW / VALORATE IMPLEMENTED ACTIONS

DATA ANALYSIS TO FIND THE ROOT CAUSES

GOAL HAS BEEN ACHIEVED? YES / NO DECISION CLOSE THE ACTION, EXTEND TO OTHER CASES, ETC.

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HOW WE ENGAGED THEM MAKING THE IMPROVEMENTS VISUAL

+

PROPOSED IMPROVEMENTS

NICE TO HAVE

ID

DESCRIPTION

OWNER

CURRENT TASK

NEXT TASK

BLOCKED

DUE DATE

STATUS

Designing the board To manage these improvements and those new that could emerge in the future, a board was created, following the steps described in Chapter 5 (Visual Management).

TO DO

BENEFIT

The board should allow the monitoring of the improvements, reflecting basic aspects such as the improvement leader, its status and current and next task to perform according to the Kaizen sheet (see Chapter 13).

The initial, temporary board was created using kraft paper. Once it was adopted by the team, it was then transferred to its definitive version on a whiteboard.

TO PLAN

-

NO ACTION -

FEASIBILITY

+

DROPPED

On the board, a number of lines were available according to each of the improvements being undertaken.

125

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM MAKING THE IMPROVEMENTS VISUAL

+

PROPOSED IMPROVEMENTS

TO DO

BENEFIT

NICE TO HAVE

TO PLAN

DESCRIPTION

OWNER

CURRENT TASK

NEXT TASK

1

ASSIGNING AN AM RESPONSIBLE

AMR

TASK 1

TASK 2

15/5/2013

2

QC AUTOMATION

RMS

TASK 1

TASK 2

20/5/2013

3

REJECTED DUE TO LOW COLLABORATION

JCA

TASK 1

TASK 2

30/8/2013

4

DIRECT SENDING FROM AM

MCH

TASK 1

TASK 2

31/5/2013

5

MAKE INQUIRES OUT OF TIME WINDOWS

BBB

TASK 1

TASK 2

30/6/2013

6

DAILY RELEASES

BRD

TASK 1

TASK 2

31/5/2013

7

INCORPORATE HELP DESK TO THE FLOW

AMD

TASK 1

TASK 2

28/2/2014

8

PRE-AUTHORIZE THE ACCESS TO DATA

JMR

TASK 1

TASK 2

20/5/2014

9

SW PROMOTION AT THE HOST WITH LATER VERSIONING

ARJ

TASK 1

TASK 2

6/5/2013

10

REDUCE THE AUTOMATIC CLOSURE TO 3 DAYS

MCD

TASK 1

TASK 2

1/12/2014

BLOCKED

DUE DATE

STATUS

Filling the board Once the board was built, the initial improvements detected were incorporated and we proceeded to facilitate the first improvement follow-up meeting.

The board was led by a Lean coach, but later this should be transferred to someone from the Team and rotate this responsibility after every few months.

At these meetings the leaders of each of the improvements gathered every Wednesday at 15:00 for an hour, to review the progress made and plan the next steps.

-

NO ACTION

ID

-

FEASIBILITY

+

DROPPED

126

Any blocked improvement that could not be managed by the leader, was escalated to the appropriate sponsor. Once the dynamic had been implemented and a few sessions were held, the meetings were able to be reduced to half an hour.

CHAPTER 8 CONTINUOUS IMPROVEMENT BOARD

HOW WE ENGAGED THEM MAKING THE IMPROVEMENTS VISUAL

PROPOSED IMPROVEMENTS

+

FOR PROPOSAL ENT IMPROVEM

PRO IMP POSA ROV L FO R EM EN T

NICE TO HAVE

TO DO

BENEFIT

OR AL F NT POS E PRO OVEM R P IM

TO PLAN

DESCRIPTION

OWNER

CURRENT TASK

NEXT TASK

1

ASSIGNING AN AM RESPONSIBLE

AMR

TASK 1

TASK 2

15/5/2013

2

QC AUTOMATION

RMS

TASK 1

TASK 2

20/5/2013

3

REJECTED DUE TO LOW COLLABORATION

JCA

TASK 1

TASK 2

30/8/2013

4

DIRECT SENDING FROM AM

MCH

TASK 1

TASK 2

31/5/2013

5

MAKE INQUIRES OUT OF TIME WINDOWS

BBB

TASK 1

TASK 2

30/6/2013

6

DAILY RELEASES

BRD

TASK 1

TASK 2

31/5/2013

7

INCORPORATE HELP DESK TO THE FLOW

AMD

TASK 1

TASK 2

28/2/2014

8

PRE-AUTHORIZE THE ACCESS TO DATA

JMR

TASK 1

TASK 2

20/5/2014

9

SW PROMOTION AT THE HOST WITH LATER VERSIONING

ARJ

TASK 1

TASK 2

6/5/2013

10

REDUCE THE AUTOMATIC CLOSURE TO 3 DAYS

MCD

TASK 1

TASK 2

1/12/2014

BLOCKED

DUE DATE

-

NO ACTION

ID

-

FEASIBILITY

+

DROPPED

PRO IMP POSA ROV L FO R EM EN T

OR AL F NT POS E PRO OVEM R IMP

127

STATUS

Running the board The board also had a space for new improvement proposals.

These new improvements, that can be proposed by any team member, were written in a Post-it note and placed on the top left corner of the board.

New improvements were assessed on the Magic Quadrant, and once qualified and approved, were incorporated to the right side of the board if there was enough capacity in the team to undertake it.

THE LEAN PLAYBOOK

HOW THIS HELPED THE TEAM FOCUSING ON IMPROVEMENT, THE RESULTS COME

These improvements allowed:

Reduced Time to Market Short term, keeping the current incident management flow: • 852,81 hours reduction (35 days and a half – From the original 61,14 days to 25,5 days) Long term, changing the current incident management flow: • 164 hours reduction (7 days – From 25,5 days to 18,5 days).

Improve efficiency Incidents solved within the same month raised from 79% to 97%

Reduced effort dedicated to incidents 1,7 FTEs were freed up of the incident management (7% of the total staff).

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HOW THIS HELPED THE TEAM FOCUSING ON IMPROVEMENT, THE RESULTS COME

Who doesn’t want to improve their work?

The improvement boards were spread throughout the organization and teams. Improvement Management Offices were created.

Their main responsibility was to continue implementing boards and leverage the rules and dynamics as well as helping to lead them during the first sessions. Improvements were logged, their benefits were quantified and, when appropriate, they were also extended to other departments or groups. The number of boards launched reached more than a dozen and improvements made during the first two years were about one hundred. Finally, the benefits obtained in this period exceeded 6 million euros.

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Chapter 9

KPI TREE

QUICK CARD What is it

CHECKLIST

The KPI Tree links the Voice of the Customer (VoC) with the strategy of the company and translates it into tangible, operational KPIs to measure the performance of Teams. It is a sensible approach towards reinforcing the customer’s vision into daily operations.

When to use it Whenever one or more of these are met: • Lack of connection between strategy and VoC. • Lack of connection between strategy, VoC and operation.

• Lack of effective, customer-oriented KPIs to measure teams.

Book a spacious room with empty walls.

Get 5 different, 13x8 cm color Post-it notes.

At least one color marker per attendee.

Time allocation: around 3-4 hours.

Invite senior management and/ or team leaders.

WHAT TO DO

WHAT NOT TO DO

Before the workshop, get hold of the strategic intents of the company for the first level of the Tree.

Institutionalize these KPIs and create an action plan to implement them.

After the session, seek input from team members whenever possible.

Invite the whole team: it can become too complicated to manage and to get everyone to agree on every point.

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THE LEAN PLAYBOOK

THE CASE HOW TWO IT TEAMS LINKED THE COMPANY’S STRATEGIC INTENTS TO THEIR DAILY OPERATIONS

Keeping the connection between strategy, customers and operations A young but very successful IT company, selling IT products and services for the Pharma industry had grown and expanded exponentially in a short period of time. This was due to having developed a unique platform that gave them a strategic advantage over the competition. However, as time passed by, this competitive edge started to gradually erode, because other competitors stepped in and introduced different versions of this platform.

Up to that point no real attention was given to what was valuable for the customers and how to link this with the operations. After successfully producing the strategic intents of the organization, now what was missing was the link of those high-level intents with the daily operations of the teams.

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CHAPTER 9 KPI TREE

THE CASE HOW TWO IT TEAMS LINKED THE COMPANY’S STRATEGIC INTENTS TO THEIR DAILY OPERATIONS

Start with your strategic intents

MISSION

The three main strategic intents, derived from the corporate mission, were: One Team Approach, Foster Partnership with Customers and Achieve Excellent Delivery Levels.

TO ENABLE AND SUSTAIN GROWTH FOR THE PHARMA INDUSTRY THROUGH IT PRODUCTS

In this case we were asked to work with the two main Delivery teams: the Platform Implementation (PI) team, that was in charge of having the platform customized and implemented for each team, and the Business Intelligence and Reporting (BIR) team, offering reporting and information availability to the customer after platform implementation. Each team had their own way of working and had implemented their own KPIs to different levels.

FOSTER PARTNERSHIP WITH CUSTOMERS

The PI team had no real KPIs in place while the BIR team had developed their own ones, but without consensus nor having officialized them with the CEO.

ONE TEAM APPROACH

ACHIEVE EXCELLENT DELIVERY LEVELS

STRATEGIC INTENTS

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM SETTING UP THE SESSION

Before setting up the session, we needed to identify who had to attend and participate at the workshop. In this type of workshop we usually discuss the strategic intents of the organization and who is feasible to achieve them through the definition and implementation of the right KPIs (using the VoC as a valuable input too).

Therefore, we decided to bring the following roles on board:

BIR MANAGER

GOVERNANCE & STRATEGY MANAGER

PI MANAGER

They had to share their vision with the selected KPIs. Do they make sense? Can we measure this with our teams?

As responsible for the KPIs and SLAs in place, he had to make sure there was alignment between the KPIs and the current Service Model.

136

IT SERVICE MANAGEMENT TOOL MANAGER As responsible for the tool to support the Service Model, he had to validate that the KPIs selected could be implemented and measured with the tool.

CHAPTER 9 KPI TREE

HOW WE ENGAGED THEM SETTING UP THE SESSION

We had already asked our stakeholders to share with us their strategic intents (see previous pages). So we used this as the first level of the KPI Tree, which we called ‘Leadership Value Drivers’.

MISSION

TO ENABLE AND SUSTAIN GROWTH FOR THE PHARMA INDUSTRY THROUGH IT PRODUCTS

ONE TEAM APPROACH

FOSTER PARTNERSHIP WITH CUSTOMERS

ACHIEVE EXCELLENT DELIVERY LEVELS

LEADERSHIP VALUE DRIVERS

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM RUNNING THE SESSION

We then started with the dynamic. The basics of the workshop were to focus on one of the value drivers and then: Firstly create the main objectives coming from the Leadership Value Drivers.

Use the CTQs (Critical-To-Quality) from the VoC, aligning them with each objective —see Chapter 3—.

Define the quantitative metrics (KPIs) to measure those CTQs. How it worked with the first one: Working as one team.

ORIGINAL LEADERSHIP VALUE DRIVER

1. OBJECTIVES

2. CTQS FROM VOC

3. QUANTITATIVE METRICS

IMPROVE COLLABORATION AMONG TEAMS

SEAMLESS CROSS-DEPARTMENTAL COLLABORATION

# OF HIGHLY-SATISFIED CUSTOMERS REQUESTS WITH MULTIPLE TEAMS INVOLVED

INCREASE TEAM SATISFACTION

TEAM SATISFACTION

EMPLOYEE SATISFACTION LEVEL

WORKING AS ONE TEAM

138

* In brown, those KPIs harder to implement according to the it service management tool manager # OF INTERNAL KNOWLEDGE SHARING SESSIONS

CHAPTER 9 KPI TREE

HOW WE ENGAGED THEM RUNNING THE SESSION

And for the second one:

ORIGINAL LEADERSHIP VALUE DRIVER

1. OBJECTIVES

2. CTQS FROM VOC

UNDERSTANDING OF CUSTOMER NEEDS INCREASE NUMBER OF UPSELLING OPPORTUNITIES

3. QUANTITATIVE METRICS

UPSELLING OPPORTUNITY RATE PER CUSTOMER

% OF UPSELLING OPPORTUNITIES TO DEALS

RIGHT SOLUTION OFFERING

FOSTER PARTNERSHIP WITH CUSTOMERS

JOINT-VENTURE INITIATIVES

# OF JOINT-VENTURE PROJECTS

KNOWLEDGE SHARING ON NEW TRENDS

# OF EVENTS ORGANIZED WITH CUSTOMERS

REACH FOR REAL PARTNERSHIP

139

* In brown, those KPIs harder to implement according to the BIR and PI managers

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM RUNNING THE SESSION

And for the third one:

ORIGINAL LEADERSHIP VALUE DRIVER

1. OBJECTIVES

2. CTQS FROM VOC

3. QUANTITATIVE METRICS * In brown, those KPIs harder to implement

ACHIEVE EXCELLENCE DELIVERY LEVELS

INCREASE CUSTOMER SATISFACTION

REACHING FOR FEEDBACK AFTER IMPLEMENTATIONS

# OF POST-IMPLEMENTATION SURVEYS PER CUSTOMER

POST-IMPLEMENTATION SURVEY SCORE

OPTIMIZE TIME-TO-MARKET AND PROJECT DEVIATIONS

ON-TIME DELIVERY

% OF PROJECTS DELIVERED ON TIME

PROJECT DELIVERY CYCLE TIME

INCREASE QUALITY OF DELIVERY

REDUCE NUMBER OF INCIDENTS

# OF INCIDENTS PER IMPLEMENTATION

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CHAPTER 9 KPI TREE

HOW THIS HELPED THEM STRUCTURING YOUR KPIS IN A PLAN

After this workshop, the organization managed to achieve the following: Having a structured tree of KPIs, cascaded down from the three strategic intents and aligned with the Voc. KPIs that were easier to be implemented right away.

KPIs to be implemented after defining them with KPI sheets.

What is a KPI Sheet?

It is a card to define how a KPI is going to be measured. It includes a definition of the KPIs, where it extracts the information, what formula employs and who the owner of this KPI is.

What to do next?

Make sure this KPI Tree is approved and shared with the organization.

Don’t let it die: establish periodic working sessions with the parties involved to ensure their implementation.

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THE LEAN PLAYBOOK

142

Chapter 10

VALUE STREAM MAPPING

QUICK CARD What is it

CHECKLIST

Value Stream Mapping (VSM) analyzes all the current steps in a process, identifies potential inefficiencies and designs future activities to better provide products or services to customers, focusing on what the customer defines as value. It is a tool to identify and quantify timings and waste (inefficiencies) and also to setup a common and shared understanding of the activities among all stakeholders involved in an end-to-end (E2E) process.

When to use it Whenever one or more of these are met: • Lack of efficiency in the activities performed.

• Products or services delivered require higher efforts or longer time-to-market than expected.

• Teams are working in silo mode in the same process/stream.

Book a spacious room with empty walls.

Get tons of 13×8 cm color post-it notes and few markers.

Time allocation: 2-4 sessions of 4 hours.

Invite different roles to obtain the full picture of the process, recommended 8-12 people.

Get one pile of small color stickers, 3×3 cm would be fine.

WHAT TO DO

WHAT NOT TO DO

Before the workshop: define a high level process and a scope with key roles.

During the session: have just one conversation at a time, encourage everyone to speak up, achieve commitment to get actions done.

After the session: follow up on the actions and provide coaching if needed.

Invite the whole team: it can become too complicated to manage.

Try to analyze a huge process or not having defined the scope beforehand.

Have unclear scope or ownership for the quick-wins or improvement actions.

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THE LEAN PLAYBOOK

THE CASE HOW A TRADING DEPARTMENT PROVIDED THE CUSTOMER NEEDS IN A MINIMUM TIME

From detection to invoice as fast as Superman An internal trading department had been acquiring more relevance within the company due to the profitability of their activities. At the same time, competitors were challenging their trades because of this growing profitability, urging the department to become faster at their operations, but knowing that increasing the team was not an option.

Timing is key for most organizations to achieve customer expectations, but for trading companies or departments it is absolutely crucial. Additionally, team members were constantly facing long workdays, much more than their trading counterparts in other countries. These long workdays tended to fatigue them while decreasing their motivation and leaving them with no time to find a solution to this problem.

146

CHAPTER 10 VALUE STREAM MAPPING

THE CASE HOW A TRADING DEPARTMENT PROVIDED THE CUSTOMER NEEDS IN A MINIMUM TIME

Integrate all silos to remove waste At this point, there was a clear intention to reduce the time from trade detection to treasury, as well as to increase the team engagement by reducing working hours and establish cooperation within the team members.

One main objective was pursued, to reduce the Time to Market (TTM) as well as two secondary objectives: a) reduce the team members’ workload and b) break down silos and involve all teams into one process.

We decided to run a VSM workshop aiming at: Identifying waiting times, reworks, overproduction and defects.

Setting up a common understanding to increase efficiency, as some roles were performing tasks without being aware of their purpose, while others received too much information or documentation.

Highlighting those activities with no value to achieve the expected outcomes.

Improving the current tools and flow of information they were using: forms, applications, Excel files, meetings, etc.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM SET UP THE VSM

Team involvement The starting point was to contact with one or two key stakeholders who were the most knowledgeable of the process so as to quickly establish the process scope and what roles had to be involved. During the previous days, they provided the Voice of the Customer results, main concerns, improvement areas, customer or team member complaints and so on.

Once we had outlined a high level process and agreed with the list of roles involved, we identified who had to participate in the workshop to ensure every role involved had the full picture of the process at the same granularity level.

At this point, and in order to ensure more involvement from the team, we sent out a formal communication including the workshop agenda, objectives and the desired collaborative attitude and behaviour. At the same time, we spent a little time meeting some of them to gather main pain points, perceptions, double work, etc. By doing so, we ensured all of the main topics would be addressed during the workshop.

Before ending this preparation phase, we had a good understanding of the process and checked if the room for following sessions was big enough.

TIP

Keep the number of participants around 8 to 12 with different roles.

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CHAPTER 10 VALUE STREAM MAPPING

HOW WE ENGAGED THEM SET UP THE VSM

Design the agenda We decided to do 3 sessions of 4 hours each, divided as follows:

1 day st

Inputs > rs) pliers > p u S ( stome C SIPO uts > Cu rrent p t u O Process > neration and cu ge diagram M. state VS

2 nd day Waste ide ntifi current sta cation over the te VSM.

149

3rd day

M ure VS ed fut o get ir s e d t the ns Draw list of actio e h t and there.

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM 1ST DAY: SIPOC DIAGRAM GENERATION AND CURRENT VSM

Room preparation to boost participation

CURRENT VALUE STREAM MAP

VISUALIZE TOGETHER

LEARN TOGETHER

ACT TOGETHER

DEFINE TOGETHER

ACTION LIST

150

FUTURE VALUE STREAM MAP

Then it was time to set the room and materials up. To enable collaboration and discussion we put all the tables and chairs on one side of the room and hung a big poster with the capital letters “S-I-P-O-C” up. We prepared another, even bigger poster as well. This poster had the high level process steps written on A4 sheets at the top.

SIPOC

CHAPTER 10 VALUE STREAM MAPPING

HOW WE ENGAGED THEM 1ST DAY: SIPOC DIAGRAM GENERATION AND CURRENT VSM

Delimit a common vision of the stream SIPOC is an easy and enjoyable tool to clearly establish the process boundaries (scope) because: We asked the participants to add customers below the C with the Post-it notes of the trading process and the process outputs they received.

Then we quickly agreed on the high level process outline (as we worked on it in the preparing sessions).

Afterwards, everyone had to define what inputs they needed to perform their tasks were and who were the suppliers of those inputs, considering both the internal and external suppliers.

Finally, we talked a little about customers and suppliers as well as the inputs and outputs, to ensure they were all matching and aligned.

After 90 minutes, we had all agreed on the SIPOC and had a shared vision of the process’ context.

TIP

Sessions should be led by a facilitator as some people tend to speak for too long and with too much detail. So remember to address this risk and focus on assessing the usual work, discarding exceptions whenever they appear.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM 1ST DAY: SIPOC DIAGRAM GENERATION AND CURRENT VSM

SIPOC board The result of the SIPOC session was the following*:

S

I

PMI

BANKING

P

O

C

PRICING

TRADES

PETRO

RAW LIST

REPORT

MOTOR

REP

REP

API

TRADER

ORDERING

VETTING

* Examples in this chapter are a modified version of the reality to facilitate the understanding.

152

OPS

TREASURY

CHAPTER 10 VALUE STREAM MAPPING

HOW WE ENGAGED THEM 1ST DAY: SIPOC DIAGRAM GENERATION AND CURRENT VSM

Add all activities to the process VAT

WT

RW

ME A N Y T I V ACTI

After finishing the SIPOC, we swapped to the poster with the high level steps of the current state VSM process, but keeping the SIPOC in sight at the same time.

At this point, and with the enthusiasm of having reached consensus with the SIPOC, participants were asked to write down their activities below the main steps of the current process. We had to remind them to add the following estimates: The actual time dedicated to execute the task. This is called VALUE ADDED TIME (VAT) and it should be the minimum viable time to do the activity in ideal conditions.

The WAITING TIME (WT), including the time while the task is waiting in the queue to be executed plus intermediate waiting periods during the execution.

ANY REWORK (RW)* to show how much delay and effort defects can generate (we usually we ask the team for the percentage of occurrence or the number of iterations) Total time for the activity = Value Added Time + Waiting Time (if any) + Rework (if any) You can see the Post-it note template we used, on the left.

* Rework is doing things more than once, because the first results were faulty.

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HOW WE ENGAGED THEM 1ST DAY: SIPOC DIAGRAM GENERATION AND CURRENT VSM

Define the activities order Once everyone had placed their activities on the wall, the team agreed on the correct order. This is usually a bit messy at the beginning, but in the end all teams reached an agreement. Below you can see a simplified version of the real VSM defined by the team:

|

|

| 0%

T DETEC Y TUNIT OPPOR

1H |

3H

| ING

TRADER

1H | 0H

|

|

R ORDE

| 0%

ESS Y ASS UNIT ORT P P O

1H | 1H

| 25%

RIS ASSES K SME

NT

0.25H

| 0H |

0%

FUND EST REQU

AGREE ME APERT NT URE

0.5H | 1H

| 50%

FINAL TION VALIDA

TRE

2.5H | 0

.5H | 0%

SHIPM PREPA ENT RATIO N

0%

H | 20 1H | 0

T

MEN

SHIP

0H

H

|2

1H | 2H | 0%

PRICE N TIATIO

TRANSACTION

NEGO

154

%

| 10

L VA TION RI AR RMA FI ON

C

%

H | 50

3 1.5H |

|

ASU

OPS

VETTING

0.5H | 0 H | 0%

|

|

|

|

RY

1H | 0H | 25% INVOICE

CHAPTER 10 VALUE STREAM MAPPING

HOW WE ENGAGED THEM 2ND DAY: CURRENT STATE VSM COMPLETION AND WASTE IDENTIFICATION

Add time to every activity and sum up The second session took place one week later, so we used the time to validate the data (times and activities) from the previous session. These findings helped the team in (1) knowing the estimate for each main step by adding up the activity times in each step, and in (2) identifying aspects that did not work properly (pain points): rework, waiting times, bottlenecks, overprocessing, unnecessary meetings, and so on. Lean categorizes these pain points as waste (“Muda” in japanese).

2H | 3H | 0H

2.75H

| 0%

T DETEC Y TUNIT OPPOR

1H |

3H

2.75H

RING ORDE

TRADER

1H | 0H

| 4H |

| 0%

ESS Y ASS UNIT ORT P P O

1H | 1H

| 25%

RIS ASSES K SME

NT

0.25H

| 0H |

0%

FUND EST REQU

(1)

VETTING

0.5H | 0 H | 0% AGREE ME APERT NT URE

0.5H | 1H

FINAL TION VALIDA

3.5H | 2

2.5H | 0

.5H | 0%

SHIPM PREPA ENT RATIO N

0%

H | 20 1H | 0

T

MEN

SHIP

0%

3H | 5

1H | 2H | 0%

PRICE N TIATIO

TRANSACTION

NEGO

(2) 2h Waiting time because 2h > 1h and the activities run in parallel

155

.25H

ASU

OPS

(2)

0H |0

TRE

0H

H

|2

%

| 10

L VA TION RI AR RMA I F ON

C 1.5H |

(1) 2.75h = (1h+1h)*0.25 + (1.5h+3h)*0.50

| 50%

1H |

H

.5H | 2.2

1.5H | 2H | 0.75H

RY

1H | 0H | 25% INVOICE

THE LEAN PLAYBOOK

EXTRA ICONS FOR THE VALUE STEAM MAPPING

Help for a better visualization Below are some typical icons used when doing a VSM and identifying waste.

TRANSPORT

DEFECTS

INFORMATION FLOW

INVENTORY

OVER PRODUCTION

PHYSICAL FLOW

WAITING TIME

EXCESSIVE (OVER) PROCESSING

MOVEMENT

EXTERNAL PROVIDER

REWORK

ACTIVITY CARD

Waste is anything, mainly activities, which do not provide value for the customer: Defects, Over-Production, Waiting, Non-utilized resources, Transportation, Inventory, Movement, Excessive (over)-Processing.

TIP

Use the Mnemonic:

DOWNTIME

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CHAPTER 10 VALUE STREAM MAPPING

HOW WE ENGAGED THEM 2ND DAY: CURRENT STATE VSM COMPLETION AND WASTE IDENTIFICATION

Visualize the waste (Muda) By enabling a conversation, the team will be able to discuss and identify by themselves the pain points, waste, improvements and other inefficiencies in the process.

During this open conversation, anyone detecting an improvement can place a small sticker (3×3 cm) at the associated activity or the SIPOC element.

At the end of this second day, improvements found can be categorized by the type of waste they will help reduce or solve, as seen below:

2H | 3H | 0H

2.75H

| 0%

T DETEC Y TUNIT OPPOR

1H |

3H

2.75H

| 0%

ESS Y ASS UNIT ORT P P O

1H | 1H

| 25%

RIS ASSES K SME

NT

0.25H

| 0H |

0%

FUND EST REQU

3.5H | 2

AGREE ME APERT NT URE

0.5H | 1H

| 50%

FINAL TION VALIDA

2.5H | 0

.5H | 0%

SHIPM PREPA ENT RATIO N

0% T

MEN

0H

H

|2

0%

3H | 5

N TIATIO

NEGO

1H | 2H | 0% TRANSACTION

157

%

| 10

L VA TION RI AR RMA FI ON

C

1.5H |

.25H

ASU

H | 20 1H | 0 SHIP

0H |0

TRE

OPS

VETTING

0.5H | 0 H | 0%

1H |

H

.5H | 2.2

1.5H | 2H | 0.75H

RING ORDE

TRADER

1H | 0H

| 4H |

RY

1H | 0H | 25% INVOICE

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM 2ND DAY: CURRENT STATE VSM COMPLETION AND WASTE IDENTIFICATION

Back-office calculations and analysis However, our role as facilitators was to stimulate the team in detecting other dimensions, such as variability (Mura) and complexity (Muri), in order to create a pull system that facilitated the flow of their activities, see chapter 6. The aim of this analysis was to try to achieve excellence and also to make their work easier.

After the second session, we worked out the following calculations. Keep in mind that you should focus on analyzing what is most important for your goal in the workshop, and that might not be exactly like these calculations:

EFFICIENCY = VAT / TOTAL TIME

WHERE TOTAL TIME IS THE TOTAL TIME OF THE ACTIVITY, PHASE OR PROCESS BEING ANALYZED.

CYCLE TIME = ∑ TOTAL TIME

CYCLE TIME* IS THE SUM OF THE TOTAL TIME OF ALL ACTIVITIES IN A VALUE STREAM. * SOME SCHOLARS ALSO CALL THIS LEAD TIME.

Waste is anything, mainly activities, which do not provide value for the customer: Defects, Over-Production, Waiting, Non-utilized resources, Transportation, Inventory, Movement, Excessive (over)-Processing.

TIP

Use the Mnemonic:

DOWNTIME

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CHAPTER 10 VALUE STREAM MAPPING

HOW WE ENGAGED THEM 3RD DAY: DESIRED, FUTURE VSM AND IMPROVEMENT ACTIONS LIST GENERATION

ID

WASTE (ACTIVITY)

IMPACT

FEASIBILITY

1

INVENTORY (ASSESS OPORTUNITY)

H

H

2

DEFECT (ASSESS OPORTUNITY)

L

H

3

OVERPRODUCING (RISK ASSESSMENT)

H

L

4

REWORK (RISK ASSESSMENT)

L

H

5

INVENTORY (PRICE NEGOTIATION)

H

H

6

REWORK (PRICE NEGOTIATION)

L

L

7

REWORK (FINAL VALIDATION)

H

L

8

OVERPROCESSING (SHIPMENT PREPARATION)

H

H

9

REWORK (SHIPMENT)

H

L

10

REWORK (ARRIVAL CONFIRMATION)

H

L

11

REWORK (INVOICE)

L

L

12

WAITING TIME (FUND REQUEST)

H

H

159

Qualify the pain Finally, again one week later, we approached the team for the third time. They were motivated to define their future way of working in order to translate the trade opportunities into cash as fast as a Superman.

This future state definition was triggered by discussing about the waste and other pain points. We started off by listing all the waste, improvements, and so on. And then, we qualified them according to the impact (time and effort), and the feasibility to remove the waste.

This way, we defined a list like the one on the left.

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM 3RD DAY: DESIRED, FUTURE VSM AND IMPROVEMENT ACTIONS LIST GENERATION

Co-create the action plan With the list in front of everyone, we defined the appropriate actions to solve them and the team decided who should be the improvement owner. Finally the owner decided on a realistic due date.

ID

WASTE (ACTIVITY)

IMPACT

FEASIBILITY

OWNER

DUE DATE

1

INVENTORY (ASSESS OPORTUNITY)

H

H

AM

15/3

3

OVERPRODUCING (RISK ASSESSMENT)

H

L

AM

12/4

5

INVENTORY (PRICE NEGOTIATION)

H

H

SM

29/3

7

REWORK (FINAL VALIDATION)

H

L

PO

3/5

8

OVERPROCESSING (SHIPMENT PREPARATION)

H

H

PM

8/3

9

REWORK (SHIPMENT)

H

L

PO

12/4

10

REWORK (ARRIVAL CONFIRMATION)

H

L

BRM

12/4

12

WAITING TIME (FUND REQUEST)

H

H

PM

15/3

160

IMPACT

By doing so, the future VSM was defined by removing all the identified waste.

NICE TO HAVE

DO

DISCARD

PLAN

FEASIBILITY

CHAPTER 10 VALUE STREAM MAPPING

HOW WE ENGAGED THEM 3RD DAY: DESIRED, FUTURE VSM AND IMPROVEMENT ACTIONS LIST GENERATION

Define the To-Be VSM state Keep in mind that the facilitator’s purpose is not only to lead the sessions, but also to challenge the team to take improvement actions and define the best future VSM by keeping some recommendations in mind: Maintain alignment with VoC. Establish a flow system by standardizing, reducing peaks and valleys, reducing variability (stabilizing the process), removing inventory, etc.

Improve communication between departments, avoid silos.

Do just the necessary to get the job done.

The future VSM is below, with the expected times and rework, after estimating the impact of the actions to be taken by the team: 2H | 1H | 0H

TRADER

1H | 0H

| 0%

T DETEC Y TUNIT OPPOR

1H |

1H |

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ESS Y ASS UNIT ORT OPP

1H | 2H | 0H

RING ORDE

VETTING

0.5H | 1H

| 25%

RIS ASSES K SME

NT

0.25H

5H

1H | 1.2

1.5H |

| 0H |

0%

FUND EST REQU

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| 0%

ENT EEM AGR RTURE E AP

0.5H | 1H

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FINAL TION VALIDA 1H | 2H | 0%

1H | 0H | 50

%

PRIZE NEGOTIAT

TRANSACTION

ION

161

1H |

H

H | 0.45

2H | 2.5

TRE

ASU

OPS

1H | 0.5

H | 0%

SHIPM PREPA ENT RATIO N

%

H | 25 1H | 0

ENT

M

SHIP

0H | 0H

0H

H

|2

%

| 10

L VA TION RI AR RMA I NF CO

RY

1H | 0H | 0% INVOICE

THE LEAN PLAYBOOK

WHAT WAS DELIVERED TO THEM DOCUMENTED THE RESULTS

Deliver results to the team and other stakeholders

CURRENT VSM EFFICIENCY = 38%

Use an Excel sheet with: Current state VSM with cycle time and efficiency calculations.

CYCLE TIME = 28.2H

Future VSM with cycle time and efficiency calculations.

FUTURE VSM

An improvement action list with clear ownership and due dates.

Freed up capacity is calculated with the effort reduced in all activities (captured in Value Added Time) and the rework removed by implementing the improvement actions.

EFFICIENCY = 48%

Estimated efficiency or capacity gains by achieving the To-Be state.

CYCLE TIME = 15.7H

Actions with Low feasibility but High Impact are candidates to become Kaizen opportunities, explained in Chapter 13.

BENEFITS OF AN IMPROVEMENT ACTION LIST CYCLE TIME REDUCTION = 12.5H EFFORT SAVED PER TRADE = 6.75H

TIP

In order to stimulate commitment and depict the workshop results, it is highly recommended to take some pictures of the team with the results of these sessions, especially with the action list.

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CHAPTER 10 VALUE STREAM MAPPING

HOW THIS HELPED THE TEAM BENEFITS GAINED

Benefits achieved by the team and other stakehoders based on DATA

WHAT IS A QUICK-WIN

This workshop reduced the cycle time by ~45% from the trade opportunity detection to the treasury process. But what was even more important for the team is that it helped reduce their workload around 35%, which allowed them to dedicate more time to the improvement list generated at the end of the workshop. They also established regular improvement follow-up meetings, organizing themselves in Kaizen teams (see chapter 13), to continuously challenge themselves to improve their daily tasks.

A QUICK-WIN IS A CHANGE THAT CAN BE DONE WITHOUT TOO MUCH EFFORT, WITH VERY LITTLE OR NO INVESTMENT AT ALL AND MAY BE IMPLEMENTED INTERNALLY, USUALLY HAVING A MEDIUMHIGH IMPACT ON THE PROCESS

WHAT TO DO NEXT

KAIZEN, DMAIC, PROBLEM-SOLVING, DESIGN THINKING, ETC. TO START TRIGGERING INNOVATIVE SOLUTIONS TO PROBLEMS.

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164

Chapter 11

EARNING CAPACITY ANALYSIS

QUICK CARD What is it

CHECKLIST

The Earning Capacity Analysis (ECA) starts by categorizing the activities a team might perform as earning (value adding) or burning (non value adding). It is then used as an activity log that allows understanding on how the time allocated to a team is spent, and on which activities.

When to use it It is a tool employed to understand how aligned the activities a team performs are, compared with what their customers consider to be added value. It is also a source for recurrent problem identification.

List down the specific activities done by the Team prior to the engagement.

Book a room to present the tool to the Team before using it.

Go through the tool with the Team, adding and removing activities, should it be necessary.

WHAT TO DO

WHAT NOT TO DO

Have an introductory session with the Team, explaining the purpose of the tool.

Get the Team to commit before using it.

Analyze results and include findings as part of an Improvement Plan.

Do the analysis at least for a period of 1 month, with all Team members.

Imposing the use of the tool on the Team.

Presenting the tool without having consulted to HR and Unions in your country Avoid seasonality in your analysis (periods of time that do not represent the average workload).

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THE LEAN PLAYBOOK

THE CASE BUSINESS DEVELOPMENT ACTIVITIES MAXIMIZED FOR THE SALES WORKFORCE

Lacking time for Business development The sales workforce of a multinational company was struggling to achieve their business development targets. A Customer Survey showed that the customers felt that the account management was poor and insufficient. This had a clear impact on the number of deals the workforce could close and that in turn resulted in not hitting the revenue objectives imposed by the company.

Sales Managers were expected to spend more time with their customers to develop a strong commercial relationship, support them in case the Product Helpdesk was too slow and on top of that fulfil all the administrative tasks needed, so that Top Management could build their reports.

Troubled with this issue, the Sales Director approached us in order to help them identify exactly how much time his Sales Workforce spent on non value adding activities.

168

CHAPTER 11 EARNING CAPACITY ANALYSIS

THE CASE BUSINESS DEVELOPMENT ACTIVITIES MAXIMIZED FOR THE SALES WORKFORCE

Running an ECA to understand how efforts are distributed After having analyzed the Customer surveys and the organizational chart and FTEs involved, we determined that it was necessary to run an ECA to understand the following: Which activities were considered value adding according to the objectives and strategy of the company and the customer voice. These would be the ones to be empowered.

Which activities were considered non value adding. Our goal would be to minimize these as much as possible.

The time spent on each type of activity, analyzing whether this was in alignment with the objectives of the team.

TIP

Earning Capacity Analysis was first developed

by Quint Wellington Reedwood.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM RUNNING AN EARNING CAPACITY ANALYSIS

How to structure an ECA The ECA is an activity register that allows us to understand how our time is spent, and on which types of activities (and if these are valueadding or not).

It implies defining the activities that a team performs and classify them as Earning or Burning, depending on the strategy of the company or the Voice of the Customer (VoC, see Chapter 3).

A generic example would be like the following:

EARNING

BURNING

ACTIVITY

TIME SPENT IN HOURS

ACTIVITY

TIME SPENT IN HOURS

CHANGES

50

INCIDENT / REWORK

80

PROJECTS

75

PROBLEM

40

COACHING & TRAINING

20

ADMINISTRATION

20

PLANNING & COORDINATION

30 175 HOURS 170

140 HOURS

CHAPTER 11 EARNING CAPACITY ANALYSIS

HOW WE ENGAGED THEM RUNNING AN EARNING CAPACITY ANALYSIS

44% 56%

171

EARNING BURNING

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM RUNNING AN EARNING CAPACITY ANALYSIS

Reach out for Management and HR Prior to the engagement with the Team, we first presented the ECA to the Sales Director and then to HR for validation.

In some European countries this type of exercise might not be possible to undertake due to labor law, such as France or Germany. But regardless of your country we always recommend to seek HR advice and validation before using this tool. Even in case that ECA is not allowed by HR, the tool could be useful to employees for their own personal evaluation.

We gathered the Sales Workforce (9 people) and prepared a small introduction on the purpose of using this tool. During the presentation, we emphasized that the goal of doing this exercise was not to audit their activities per se, but to understand how much time administrative, support and other non value adding activities took from them. After the presentation, we sought the consensus and commitment from the Team.

AGREE WITH SPONSOR ON USING THE ECA

1

GET VALIDATION FROM HR

2 3

172

SHOW IT TO THE TEAM & EXPLAIN PURPOSE

CHAPTER 11 EARNING CAPACITY ANALYSIS

HOW WE ENGAGED THEM RUNNING AN EARNING CAPACITY ANALYSIS

List of activities Together we reviewed the list of activities and fine-tuned it with the ones the Team performed. In the end, we had the list on the left.

BUSINESS DEVELOPMENT

(ASSESSING NEEDS, PRE-SALES, NEGOTIATIONS, MEETINGS, ETC.)

COMMERCIAL PROPOSAL MAKING CONTRACT GENERATION ORDERING POST-DEAL SUPPORT HANDLING INCIDENTS UPDATING COMMERCIAL OPPORTUNITIES IN THE SYSTEM ADMINISTRATIVE TASKS (INVOICES AND EXPENSES)

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HOW WE ENGAGED THEM RUNNING AN EARNING CAPACITY ANALYSIS

EARNING

We then identified which ones where value adding (Earning) or non value adding (Burning), according to the strategy and VoC.

BUSINESS DEVELOPMENT (ASSESSING NEEDS, PRE-SALES, NEGOTIATIONS,

MEETINGS, ETC.)

COMMERCIAL PROPOSAL MAKING CONTRACT GENERATION ORDERING POST-DEAL SUPPORT

BURNING

Classifying activities as Earning or Burning

HANDLING INCIDENTS UPDATING COMMERCIAL OPPORTUNITIES IN THE SYSTEM ADMINISTRATIVE STUFF (INVOICES AND EXPENSES) AD HOC REPORTING TO TOP MANAGEMENT

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HOW WE ENGAGED THEM RUNNING AN EARNING CAPACITY ANALYSIS

Logging and tracking activities in an ECA After this was done, we asked the Team to fill in the ECA form during 1 entire month. This is an individual form, based on an activity log with the following structure:

DATE

01/01/2015

START TIME

09:00

END TIME

09:30

TIME

ACTIVITY

EARNING / BURNING

30 MIN

UPDATING COMMERCIAL OPPORTUNITY IN SYSTEM

BURNING

For 1 month, they filled in the form following the above template. In the end, we had a complete activity log for each of the 9 Sales agents and we arrived at the results on the following page.

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HOW WE ENGAGED THEM INITIAL RESULTS

EARNING

% OF TIME SPENT

BUSINESS DEVELOPMENT (ASSESSING NEEDS, PRE-SALES, NEGOTIATIONS, MEETINGS...)

33%

COMMERCIAL PROPOSAL MAKING

21%

CONTRACT GENERATION

4%

ORDERING

3%

POST-DEAL SUPPORT (FOLLOW-UP CALLS, CLAIMS AND COMPLAINTS...)

12%

TOTAL

73% 176

CHAPTER 11 EARNING CAPACITY ANALYSIS

HOW WE ENGAGED THEM INITIAL RESULTS

BURNING

% OF TIME SPENT

HANDLING PRODUCT INCIDENTS

9%

UPDATING COMMERCIAL OPPORTUNITIES IN THE SYSTEM

6%

ADMINISTRATIVE TASKS (INVOICES AND EXPENSES)

5%

AD HOC REPORTING TO TOP MANAGEMENT

7%

TOTAL

27% 177

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM INITIAL RESULTS

Estimating cost of burning capacity (waste) We then estimated the cost of the burning activities (although we didn’t show this to the Team).

* Average Sales Agent salary of $ 73k / year according to O.net.

TOTAL BURNING CAPACITY

TOTAL COST / YEAR*

1,08 FTE

$ 78,840

0,72 FTE

$ 52,560

0,60 FTE

$ 43,800

0,84 FTE

$ 61,230

3,24 FTE

$ 236,520 / YEAR 178

CHAPTER 11 EARNING CAPACITY ANALYSIS

HOW WE ENGAGED THEM TAKING ACTION TO REDUCE WASTE

Defining a plan We organized a workshop to present the results and identify an action plan to minimize the burning activities we had seen, as much as possible.

We also put together the list of burning activities on a wall (see page 177), with the current % of time spent. Then we started thinking together which way to go in order to avoid these results in the future.

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THE LEAN PLAYBOOK

HOW WE ENGAGED THEM TAKING ACTION TO REDUCE WASTE

ACTIONS

BENEFITS

EDUCATE CUSTOMERS ON HELPDESK FUNCTION ESTABLISH SLAs FOR HELPDESK

EST. 20% REDUCED INCIDENT CYCLE-TIME 0,81 FTE CAPACITY GAINED COST OF 0,81 SALES PERSON: $ 59K

SET UP A RESOURCE DEDICATED TO SALES SUPPORT (1 FTE)

0,54 FTE SALES CAPACITY GAINED COST OF 0,54 SALES PERSON: $ 39K

GET SUPPORT IN THIS ACTIVITY FROM THE SALES SUPPORT PERSON

0,45 FTE SALES CAPACITY GAINED COST OF 0,45 SALES PERSON: $ 33K

GIVE TOP MANAGEMENT ACCESS TO THE CRM TRAIN THEM IN REPORT GENERATION GET PRE-DEFINED REPORTS READY FOR SELF-SERVICE

0,63 FTE SALES CAPACITY GAINED COST OF 0,63 SALES PERSON: $ 46K

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CHAPTER 11 EARNING CAPACITY ANALYSIS

HOW WE ENGAGED THEM TAKING ACTION TO REDUCE WASTE

INVESTMENT PROJECT TO ESTABLISH HELPDESK SLAs: $ 20K COST OF 0,81 FTE AT THE HELPDESK: $ 13,5K $ 25,6K SAVINGS

1 SALES SUPPORT FTE * COST OF 0,54 SALES OPS FTE: $ 13,5K $ 25,5K SAVINGS

1 SALES SUPPORT FTE * COST OF 0,45 SALES OPS FTE: $ 11,3K $ 21,7K SAVINGS

5 BASIC LICENSES TO CRM: $ 240 / USER 1 TRAINING COURSE: $ 3K GET PREDEFINED REPORTS FROM IT: $ 10K $ 31K SAVINGS

* Average Sales Support salary of $ 25k / year according to THE O.NET FRAMEWORK.

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THE LEAN PLAYBOOK

HOW THIS HELPED THE TEAM RESULTS OBTAINED

Results after six months We presented our proposed action plan to Top management in the form of a clear Business Case. We managed not only to get their support, but they also wanted us to follow-up on the implementation of these actions and to further extend the initiative to other areas of the company.

Six months later, the improvements had been implemented and we measured their activities again. The results showed a definitive progress:

EARNING

% OF TIME SPENT

BUSINESS DEVELOPMENT

39%

COMMERCIAL PROPOSAL MAKING

26%

CONTRACT GENERATION

8%

ORDERING

5%

POST-DEAL SUPPORT

13%

TOTAL

91% 182

CHAPTER 11 EARNING CAPACITY ANALYSIS

HOW THIS HELPED THE TEAM RESULTS OBTAINED

BURNING

% OF TIME SPENT

HANDLING PRODUCT INCIDENTS

3%

UPDATING COMMERCIAL OPPORTUNITIES IN SYSTEM

1%

ADMINISTRATIVE TASKS (INVOICES AND EXPENSES)

3%

AD HOC REPORTING TO TOP MANAGEMENT

2%

TOTAL

9% 183

THE LEAN PLAYBOOK

HOW THIS HELPED THE TEAM RESULTS OBTAINED

80k dollars savings in FTEs afterwards This reduced Burning capacity translated directly into economic terms.

The results represented 70% of the set objectives, which left room for further improvements in the future.

TOTAL BURNING CAPACITY

TOTAL COST / YEAR

0,72 FTE

$ 52,560

0,60 FTE

$ 43,800

0,36 FTE

$ 26,280

0,60 FTE

$ 43,735

2,28 FTE

$ 166,375 / YEAR 184

Chapter 12

TEAM RACI

QUICK CARD What is it

CHECKLIST

A classic RACI matrix helps identify roles and responsibilities in an area or organization. Applied to a team, it can help distributing recurring tasks and activities in an efficient manner, ensuring that workload as well as accountability are optimally shared among all team members.

When to use it Whenever one or more of these are met: • Lack of clear roles and responsibilities.

• Low team empowerment (senior members concentrating most accountability).

• Uneven workload distribution.

Book a spacious room with empty walls.

Get 5 different, 13x8 cm color Post-it notes.

Get at least one color marker per attendant.

Time allocation: around 1 hour per every 5-7 activities to cover.

WHAT NOT TO DO

WHAT TO DO Involve the entire team in the workshop.

Visualize current situation and future situation.

Analyze how many Rs (Responsibles) and As (Accountables)there are and how they are distributed.

Running this exercise without the entire team.

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THE LEAN PLAYBOOK

THE CASE WORKLOAD DISTRIBUTION AND TEAM EMPOWERMENT ACHIEVED IN A CORPORATE FUNCTION TEAM

Trying to adjust to organizational change A Corporate function Team was struggling to accommodate to an ongoing deep transformation to both the team and the organization. On one hand, out of a 4 member team, 3 people were leaving to other areas and 3 new team members were to come in to replace them. Only one senior member would remain on the team, and this person had to cope with most of the workload during the first months of this change. On the other hand, the organizational change was leading to a reshape and rethinking of the services delivered by the Controlling Team to the rest of the organization.

PEOPLE LEAVING & NEW PEOPLE JOINING

188

ORGANIZATIONAL CHANGE & UNCLEAR PURPOSE OF THE TEAM

CHAPTER 12 TEAM RACI

THE CASE WORKLOAD DISTRIBUTION AND TEAM EMPOWERMENT ACHIEVED IN A CORPORATE FUNCTION TEAM

TEAM MEMBER

SENIOR SPECIALIST

Lack of understanding of customer needs

ACCOUNTABILITY ALLOCATION

As a result of this, not only was the mostly new team almost clueless regarding what their internal customers were expecting of them, but the new members did not have yet the expertise to help the senior member.

And neither did he have the time to help and train them because of a heavy workload. An early analysis showed around 25% of the services they delivered as being of potentially low value for the customer and of unclear purpose.

52%

SENIOR SPECIALIST NEWLY HIRED

22%

JUNIOR SPECIALIST NEWLY HIRED

16%

JUNIOR SPECIALIST NEWLY HIRED

10%

There was little engagement in the Team as most of the new members felt they lacked purpose as well as goals and, on top of that, they had very little actual accountability over the activities. More than 50% of the work fell under the scope of the senior member and the rest was shared among the other 3 team members, being split as you can see on the left.

PERCENTAGE OF ACTIVITIES WITH UNCLEAR PURPOSE FOR THE CUSTOMER

25% 189

THE LEAN PLAYBOOK

THE CASE WORKLOAD DISTRIBUTION AND TEAM EMPOWERMENT ACHIEVED IN A CORPORATE FUNCTION TEAM

Low Team engagement Low Team engagement was more than evident in two specific areas: the direction of the Team and their customer-orientation (see Team Barometer’s case in Chapter 7). This reflected the team’s insecurity on what they were delivering.

An analysis of the Voice of the Customer was the definitive confirmation that things were not aligned with the customer’s needs.

“THEY SHOULD NOT BE APPROVING 50-EURO PURCHASE ORDERS BUT FOCUS ON ADOPTING A MORE ADVISORY-TYPE ROLE IN BUDGET CONTROL” “I WOULD LIKE THE TEAM TO MAKE PROPOSALS, ANTICIPATE BUDGET ISSUES, RE-NEGOTIATE CONTRACTS…”

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CHAPTER 12 TEAM RACI

HOW WE ENGAGED THEM DELIVERING A TEAM RACI WORKSHOP

What is a RACI?

PERSON

PERSON

PERSON

PERSON

PERSON

We decided to go for a Team RACI workshop. The reasoning behind this decision was that it would help them better position themselves both internally and externally and clarify the roles in their activities.

It is a tool to understand the role and responsibilities of different parties or people in several activities, processes or areas. It defines four ways to contribute to an activity:

R ACTIVITY 1

ACTIVITY 2

ACTIVITY 3

A A

I

R

A

I

R

C

R

A

C

C I 191

RESPONSIBLE Executes the job but it is not the reference person for the customer or partner.

ACCOUNTABLE Contact point and reference person for the results produced and the process followed.

CONSULTED Needs to be consulted for information to complete the activity.

INFORMED Usually stakeholders that need to be informed of the activity.

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM DELIVERING A TEAM RACI WORKSHOP

Setting the scope for the session The session was planned for 3 hours, having estimated that the team was covering about 20 activities. The goals of the session were defined beforehand and agreed with the Team leader: To clarify roles and responsibilities in each activity.

To better understand workloads and how they were distributed across the Team.

To ensure backups for every activity.

To critically analyze which activities were value adding and which were not.

To critically challenge which were candidates for automation or transfer to other teams and assess their frequency.

The workshop had three parts: an AS-IS situation was mapped, then a discussion on what was to be changed took place, and finally a TO-BE was mapped, indicating what was necessary to accomplish the set goals.

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CHAPTER 12 TEAM RACI

HOW WE ENGAGED THEM DELIVERING A TEAM RACI WORKSHOP

The session was planned for 3 hours, having estimated that the team was covering about 20 activities. We started by drawing the AS-IS situation.

TEAM LEADER We prepared the names of the team members in columns, Leaving some space between each name

JAMES

CORPORATE

BUSINESS UNITS The team was asked to first list down the customers they worked for HR

ALL

193

TOM

PETER

MARY

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM DELIVERING A TEAM RACI WORKSHOP

The session was planned for 3 hours, having estimated around 20 activities the Team was covering. We started by drawing the AS-IS situation.

TEAM LEADER

JAMES

TOM

CORPORATE

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

After that, all activities were written down by the team and posted on the wall according to their customer

BUSINESS UNITS

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

The frequency of these tasks, along with an indication if they were automated or manual was reflected

HR

M AD HOC

FTE UPLOAD TO SAP

ALL

A AD HOC

PURCHASE ORDER APPROVAL

194

PETER

MARY

CHAPTER 12 TEAM RACI

HOW WE ENGAGED THEM DELIVERING A TEAM RACI WORKSHOP

R

RESPONSIBLE People actually doing the work

A

ACCOUNTABLE

C

As a single contact point with the customer

CONSULTED As someone to ask for information

I

TOM

PETER

C

INFORMED As someone to inform of the execution of the task

TEAM LEADER Finally, we went through each activity with the team trying to understand what their actual roles were, mapping the following:

JAMES

CORPORATE

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

C

BUSINESS UNITS

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

C

HR

M AD HOC

FTE UPLOAD TO SAP

ALL

A AD HOC

PURCHASE ORDER APPROVAL

I A

I 195

MARY

C

C

C

R

R

R

A R

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM THE ANALYSIS

Balancing workload It was clear that accountability was centralized in James. This did not mean it was wrong, actually the opposite was true, it made perfect sense as he was the only senior member from the original team.

But, part of the discussion with the team made evident that this had to change in the To-Be situation in order to release workload from James and empower the other team members.

196

CHAPTER 12 TEAM RACI

HOW WE ENGAGED THEM THE ANALYSIS

TEAM LEADER

JAMES

TOM

PETER

C

CORPORATE

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

C

BUSINESS UNITS

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

C

HR

M AD HOC

FTE UPLOAD TO SAP

ALL

A AD HOC

PURCHASE ORDER APPROVAL

I A

I 197

MARY

C

C

C

R

R

R

A R

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM THE TO-BE

Designing the To-Be The final part of the workshop meant deciding on what was going to be changed and what was necessary to do in order to make it happen.

The things that we looked at were: The activities: are they value adding? Does our customer want us to do this?

In order to promote other team members, we shared the accountability of the activities, establishing a roadmap so that those individuals were upskilled to become fully autonomous in those areas.

Frequency of tasks (could they be done with a different frequency so that some workload would be released? and see if they could be potentially automated or not.

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CHAPTER 12 TEAM RACI

HOW WE ENGAGED THEM THE TO-BE

Are these activities value adding?

Do our customer want us to focus on this?

How can we distribute accountability and promote team empowerment?

TEAM LEADER Can they be automated?

Could the frequency change?

JAMES

TOM

PETER

C

CORPORATE

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

C

BUSINESS UNITS

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

C

HR

M AD HOC

FTE UPLOAD TO SAP

ALL

A AD HOC

PURCHASE ORDER APPROVAL

I A

I 199

MARY

C

C

C

R

R

R

A R

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM THE TO-BE

Considering the VoC, we decided to transfer this task to a Support Purchasing team

In order to take these new responsibilities, the team had to be upskilled, so a training plan was set up

There was no need to keep informing James about this task TEAM LEADER

This task was selected to be automated in the future

JAMES

CORPORATE

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

BUSINESS UNITS

M 1 × MONTH

BUDGET FOLLOW-UP REPORT

R

A

HR

M AD HOC

FTE UPLOAD TO SAP

ALL

A AD HOC

PURCHASE ORDER APPROVAL

I A

I 200

TOM

PETER

R

R

R

A

R

MARY

A

C

C

R

R

R

A

R

A R

CHAPTER 12 TEAM RACI

HOW THIS HELPED THE TEAM REDISTRIBUTING WORKLOAD AND ACCOUNTABILITY

TEAM MEMBER

SENIOR SPECIALIST

SENIOR SPECIALIST NEWLY HIRED

ACCOUNTABILITY ALLOCATION

ACCOUNTABILITY ALLOCATION

52%

30%

16%

24%

JUNIOR SPECIALIST NEWLY HIRED

22%

26%

JUNIOR SPECIALIST NEWLY HIRED

10%

20%

201

Establishing an Improvement Plan After this workshop, we incorporated the outcome into their Improvement Plan, resulting in the following benefits: Better alignment of activities with customer’s expectations.

Better distribution of workload and accountability.

Workload reduction due to automation and changing frequencies.

THE LEAN PLAYBOOK

202

Chapter 13

KAIZEN, DMAIC & SMART OBJECTS

QUICK CARD What is it

CHECKLIST

Kaizen is a Japanese word meaning “change for the better”, and it reflects the continuous improvement philosophy behind Lean. DMAIC (Define > Measure > Analyse > Improve > Control) is the method to improve systematically.

Kaizen events are led by a facilitator following the DMAIC cycle. As a result, the team achieves an improved state from a problematic situation, and embraces a problem solving approach that many organizations miss.

When to use it Whenever one or more of these are met: • A problem, opportunity for improvement and/or a major pain point is identified.

• When the team does not have a standard way to improve, to solve problems or simply, to move forward.

• When you want to establish a continuous improvement culture.

Invite different roles to ensure the improvement will be implemented Book a spacious room with empty walls for a few sessions Get 13×8 cm color Post-it notes and a few markers Determine the way to structure and log: Kaizen sheet, A3, etc.

Time allocation: 5 sessions of 2 hours each.

WHAT TO DO

WHAT NOT TO DO

Involve the right people to address the improvement, they may change between sessions.

Keep the record and progress of the session on a tool (Kaizen sheet, A3, etc.).

After the session: follow up actions and provide support if needed.

Jumping to the solution too quickly.

Not following the DMAIC steps.

Trying to improve something outside of the scope of the team involved.

205

THE LEAN PLAYBOOK

THE CASE Kaizen for perfection An internal software development team had been working using the Scrum methodology for about 4 years. They had reached a high level of maturity in Agile Development.

Customer satisfaction was quite high, especially compared with the satisfaction levels from 5 years ago, and the team commitment was also good.

IMPROVEMENT AVAILABLE

HOW TO MAKE A MATURE TEAM WITH A SUCCESSFUL METHODOLOGY, TO CONTINUOSLY IMPROVE BY THEMSELVES

IMPROVEMENT

BY FAST AND SMALL STEPS

IMPROVEMENT

BY BIG STEPS BASED ON BREAKTHROUGHS

However, they felt they were stuck and didn’t know how to move forward and improve their daily tasks further. On top of that, they did not have a standardized way to solve problems and find out rootcauses.

MAINTAINING DO NOTHING TIME

206

CHAPTER 13 KAIZEN, DMAIC & SMART OBJECTIVES

THE CASE HOW TO MAKE A MATURE TEAM WITH A SUCCESSFUL METHODOLOGY, TO CONTINUOSLY IMPROVE BY THEMSELVES

Mature team but with no proper user acceptance

SERVICE / PRODUCT CONTINUOUSLY IMPROVED

Although the team was mature using their Agile methodology, they implemented improvements or solved the problems they faced individually and with a low success rate, approaching them on their own. This issue is common in most teams, no matter their maturity level. In less mature teams, as a result of performing Kaizen events, the team sometimes agrees on implementing a methodology that fits their needs.

METHODOLOGY

In the case of this team, they had a problem with the testing phase, because they spent too much time on this final activity and never got proper user acceptance. Actually, users frequently did not test at all.

KAIZEN

In this scenario, DMAIC can enable a virtuous circle, in both ways (i) start with a Kaizen event and the result may lead to implement a methodology or (ii) start with a methodology and them perform Kaizen events to continuously improve the methodology used by the team.

207

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM KAIZEN EVENTS FOLLOWING DMAIC

DMAIC, 5 steps for perfection Kaizen events are the activities to solve a problem by implementing a final solution. It is usually achieved by performing the following 5 steps:

DEFINE Define the problem, describe symptoms, make the problem understandable.

CONTROL

DEFINE

MEASURE Collect data based on facts, avoid hunches and feelings, use observation, interviews, databases, etc.

ANALYSE Structure the problem by determining root causes and analysing data.

IMPROVE

IMPROVE

MEASURE

Define different solutions and implement those with the most positive impact.

CONTROL

ANALYSE

Embed the change in the organization.

In any case, this method allows enough flexibility to perform more or less events, according to the problem needs and team capacity.

208

CHAPTER 13 KAIZEN, DMAIC & SMART OBJECTIVES

HOW WE ENGAGED THEM KAIZEN EVENTS FOLLOWING DMAIC

Embrace the Continuous Improvement mindset In this case, the team needed to adopt a Continuous Improvement mindset, and to achieve it, they mainly needed an easy method, and practice it continuously to embed it as part of their DNA. Therefore, we decided to perform a full DMAIC cycle, split into 5 Kaizen events, to solve a problem and also to ensure they would learn by going through the Kaizen by themselves.

We planned 5 sessions of 2 hours each, one every Wednesday morning, just before lunch time. This did not impact the attendees work capacity and allowed the facilitator to do some “back-office” processing after every session.

209

THE LEAN PLAYBOOK

HOW WE ENGAGED THEM DEFINING EVENT

Better solutions come from better understandings The first workshop was to DEFINE the problem.

At first, the root cause seemed to be that users did not have enough time to test and validate the developed solution. However, as Albert Einstein once said: “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” In our case, we dedicated 2 hours to it.

We invited only those participants that were needed to understand the problem from all perspectives. In our case 6 participants attended.

We asked them to think about the problem before attending the event.

TIP

We recommend not to exceed 8 participants in a Kaizen event.

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HOW WE ENGAGED THEM DEFINING EVENT

Integrate all problem perspectives into one At the beginning, we requested them to individually define the problem (for 15 minutes) and then present it to the rest of attendees by following a shorter version of the Pechakucha Style (i.e. 5 slides, 20 seconds each). This allowed attendees to thoroughly reflect upon the problem and see all the different perspectives surrounding it.

During the second hour, we detailed the problem at the operational level, so everybody was on the same page. This allowed us to measure the impact of the problem in the following sessions.

Finally, in the last part of the workshop, we pictured the desired result, and as we expected, this was a typical ‘do not let the error pass on’ scenario that could be eliminated or reduced by improving the initial steps: the requirements gathering and testing definitions.

TIP

The facilitator has to achieve that all participants look at the problem as an opportunity to improve.

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HOW WE ENGAGED THEM SMART OBJECTIVES

Improve by being SMART Before going forward using the DMAIC method, it is convenient to learn how to employ SMART objectives.

The objectives, indicators or any other means aiming at improving something by measuring, should be stated by following the SMART rule of thumb:

S

M

A

R

T

SPECIFIC

MEASURABLE

ACHIEVABLE

RELEVANT

TIME BOUND

THE OBJECTIVE HAS TO BE SPECIFIC TO A TOPIC AND UNDERSTANDABLE

BY EVERYONE

THE INDICATOR HAS TO BE MEASURABLE

BY THE TEAM

THE PERSON OR TEAM THAT HAS TO ACCOMPLISH THE IMPROVEMENT HAS TO BE ABLE TO ACHIEVE THE OBJECTIVE

PEOPLE INVOLVED IN ACHIEVING THE EXPECTED RESULT HAVE TO FEEL THE OBJECTIVE IS IMPORTANT FOR THEM IN THEIR DAILY WORK

ALL OBJECTIVES HAVE TO BE SET ALONG WITH A DEADLINE TO BE COMPLETED

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HOW WE ENGAGED THEM MEASURE EVENT

Get insight from trustworthy data THINK CELL WATERFALLS

For the second session, the main objective was to validate the data and measuring approach. We also invited the team member in charge of reporting. If necessary, you might also invite someone with Business Intelligence or Data Analytics knowledge.

PIE CHARTS

We started the session by sharing the different datasets related to the problem and showed how different attendees measured similar things, such as: Time spent in user testing and validation.

SCATTER PLOT

Time spent in requirements gathering.

HISTOGRAM

Number of meetings.

Number of re-definitions after the testing phase and so on.

With the help of the ‘data expert’, we defined a set of measurements based on trustworthy formulas and data to achieve the real insights to the problem. Then the attendees confirmed the timings and effort spent on the process.

TIME SERIES CHART

PARETO CHART

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HOW WE ENGAGED THEM ANALYZE EVENT

Identifying the real root causes A room was prepared with an empty Fishbone diagram on the wall and the problem statement on its right side. We spent some time observing the problem, analysing the data, and we also changed some values on the Excel sheet to see how the problem reacted.

SYSTEM

PEOPLE

To build up the momentum, we watched the video from Juran (theleanplaybook.net/juran). This 2 minute video perfectly illustrates the idea and the 5 Whys Technique.

To address the Root Cause Analysis, we fostered a debate by following the 5 Whys and adding Post-it notes to the Ishikawa Diagram, always trying to base our statements on facts (data). Step by step, the attendees were digging into the initial problem statement to find out the real root causes of the problem. Usually, there are quite a few root causes.

PROBLEM STATEMENT

CUSTOMER

Finally, we experimented with the Excel file that contained the data, to prove our hypothesis and ensure that the identified root causes really had an impact on the problem.

PROCESS

TIP

POLICY ASK FIVE TIMES WHY?

It is really worth to play around with data and see all the reactions. By doing this with the team, they will discover process variations that will help to identify root causes.

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HOW WE ENGAGED THEM IMPROVE EVENT

Brainstorming to create improvement candidates As we had already defined the problem and the root causes, the first half of the session was used to generate possible solutions. During this part of the exercise you should let the participants speak up openly and make their suggestions. One idea can lead the team to another. Once an idea had been validated by the attendees, we added it to the improvement candidate list.

TIP

Keep the number of items in this list to about 7.

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HOW WE ENGAGED THEM IMPROVE EVENT

Create the improvement plan With the candidate improvements list at hand, we challenged the attendees to reduce it further to 5 solutions, so they were motivated to think again with the purpose of combining or removing those that were not that optimal.

1

Then, with the final list of improvements, it was the perfect moment to select and prioritize solutions. We based this on two criteria: impact and feasibility of each solution.

2

DO

IMPACT

3

NICE TO HAVE

Once the solutions had been prioritized, we moved to the last part of the exercise: seeking commitment to achieve the improvement. We added two columns to the list: Owner and Due date. For the selected solutions, attendees designated an owner and the owner decided the due date based on the feasibility.

4

The next thing to do, right after this session, is to send the action plan in detail: include the solution and the actions to achieve that solution, with the owners, due dates and the support team members for each action.

DISCARD

PLAN

TIP

During the session foster dual thinking: creative and analytical, both sides of the brain. Remember to be openminded to any improvement suggestions. And in order to get the final commitment make a picture of the team with the action plan.

FEASIBILITY

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HOW WE ENGAGED THEM CONTROL EVENT

Check the results, anchor and celebrate the success Although we initially planned 5 events in 5 weeks, we decided to split them the following way: the first 4 weeks we did one event each week and then added a pause of 2 or 3 weeks before the Control Phase, so to give the solution time to show real results.

We started by assessing the implemented solutions, qualitatively and quantitatively, and compared them with the expected results.

Most of the time, the solutions implemented do not reach the expected results at the beginning, but this control event helps to ensure that the solutions are progressing in the right direction. Otherwise, it is highly recommended to go back to the Measure event and analyze the problem with new measurements.

Once our solutions were delivering the expected results, it was the moment to anchor the new practice. This means: sharing knowledge, formalizing the new procedure, teaching people to work with the new practice and, of course, spreading the new and enhanced way of working to the rest of the organization.

Finally, the Kaizen was closed and we enjoyed the best part of the process: CELEBRATING the achievements. This is a mandatory step. Every time a goal is achieved or the team meets their commitments, you should try to celebrate it. This way the team will feel rewarded for their efforts and improvement events will be regarded as something positive.

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KAIZEN TEMPLATE, A3, ETC. DOCUMENT THE PROCESS TO SPREAD RESULTS AND ANCHOR THE NEW PRACTICES

It is very recommended to have a template to manage the Kaizen events (i.e. improvement sessions), and also to share the progress with the team you can use the Kaizen template in the page 124 (Chapter 8. Continuous improvement board) or any A# template from the Internet, but it should at least have the following sections: PROBLEM DEFINITION

PROBLEM SOLVING FORMAT

SMART GOAL(S) SUCCESS CRITERIA

STEP 1 PROBLEM ID

STEP 5 COUNTER MEASURES

STEP 2 DIVIDE & PROCESS

STEP 6 IMPLEMENT COUNTER MEASURES

STEP 3 GOAL SETTING

STEP 7 CHECK PROCESS & RESULTS

CONSTRAINTS CURRENT SITUATION: DATA AND FACTS DATA ANALYSIS TO DESCRIBE THE ROOT-CAUSE(S) LIST OF IMPROVEMENT SELECTED EXPECTED RESULTS IMPROVEMENT ACHIEVED ACTIONS TO RE-DIRECT THE IMPROVEMENTS, IF NEEDED SOLUTION IMPLEMENTED

STEP 4 ROOT CAUSE

CONCLUSIONS GOAL ACHIEVED?

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STEP 8 STANDARDIZE & SHARE SUCCESS

CHAPTER 13 KAIZEN, DMAIC & SMART OBJECTIVES

HOW THIS HELPED THE TEAM EMBRACING A PROBLEM-SOLVING METHOD TO CONTINUOUSLY IMPROVE

The participants did not only solve the problem they had, they also learnt and adopted a problem solving method by practicing it. As Allen Iverson (Nike advertisement) says “it is all about practice”. If you want to improve, the more you and your team practice an improvement methodology, the better you and your team will become.

What is a quick-win A quick-win is a change that can be done with little effort and right away, especially when it does not need to get approval or many people involved. They usually have a medium to high impact.

What to do next If your team performs a full Kaizen cycle, you may consider yourself a Lean practitioner. However, to become an expert, you need to repeat and practice the other tools in this book and even define your own.

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Chapter 14

THE OBEYA ROOM

QUICK CARD What is it The Obeya room means “Great room” or “War room”. In short, it is the room to help you make good decisions quickly thanks to visualizing all relevant information in only one place, from strategy to operation.

Anyone who can enter the Obeya room can see all the organization’s information at a glance. It is also commonly employed on a regular basis by top management to perform PDCA (Plan Do Check Act) at the company’s level. It removes all those ‘fictional’ barriers, accumulated over the years, to exchange information.

When to use it Whenever one or more of these are met: • Lack of alignment between strategies and operation. Individuals find it to link their daily work with the strategies.

• Silo working mode between teams, departments or areas: difficulties to exchange relevant information exist.

• Long time to react to and solve problems; lack of agility in the organization and a slow decision making process.

CHECKLIST

Allocate a spacious room with empty walls to convert it into an Obeya room.

Get Kraft paper to prototype on the different information panels.

Define a limited scope at the beginning, and increase it iteratively.

Time allocation: about 1 hour meeting per week, for 5 weeks.

Present it to top management to institutionalize.

WHAT TO DO

WHAT NOT TO DO

Involve the entire Management team through workshops and training.

Establish an iterative creation process, avoiding creating the entire room at once.

Collaborate with the KPIs/indicators experts to harmonize the right KPIs for the organization.

Add non-valuable or duplicated information to the room from other existing tools.

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THE CASE SPEEDING UP GOOD DECISION-MAKING FOR A BUSINESS SERVICES PROVIDER

New market demands require new tools In these uncertain times of fast changes, where customers demand customized solutions delivered quickly, a certain Business Services provider aimed at evolving and adapting quickly to the different shifts in the market.

Despite the company had been successfully growing from its inception, around 15 years ago, top management had been perceiving a slow decline in meeting customer demands, lagging behind the competition and resulting in the incapability to offer new services to answer the evolving demands received (i.e. lack of capacity to innovate).

OLD MANAGEMENT TOOLS: SLOW & INVALID

This company was experiencing, as many other companies, that new market demands could not be managed with old tools and methods whilst also realizing that they needed to evolve their management systems.

EVOLVE ACCORDING TO THE MARKET SHIFT

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HOW WE ENGAGED THEM FIRST WEEK: UNDERSTANDING THE SITUATION

For this case, we undertook a steady project with the Executive Committee, with a high workload during the first 5 weeks to set up the basis and then for 3 additional months for continuous improvement.

We split the first week in performing two main activities:

Initial analysis We started off by analyzing the Executive Committee minutes, project reports, service catalogue and the relevant information regarding the linkage between strategy and operations.

Interviews We had short interviews with the 5 C-level executives asking a set of direct questions, such as: In your opinion‌ What information is needed to make decisions at a management board?

What information is needed for the management board to evolve the business to meet the new customer needs?

We also interviewed the other 12 senior managers, accountable for each of the BUs (Business Units), with the following questions: What information would help you to speed up projects?

What information would help you to prioritize projects, new products or services?

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HOW WE ENGAGED THEM SECOND WEEK: PROTOTYPING THE OBEYA

Visualizing useful data

FUTURE WALL NEXT YEAR PLAN

During the second week, and after analyzing the results of the first week, we identified the following information categories to be potentially incorporated into the Obeya room: PLAN WALL MACRO PLAN / WEEKLY PLAN

We performed a 3-hour Visual Management workshop to create the initial boards to manage these elements: Macro plan, Weekly plan, Problem solving and Business Metrics. The VoC had already been defined and we incorporated it along with the CTQs.

VISUALIZE TOGETHER

LEARN TOGETHER

DEFINE TOGETHER

So, at the end of the second week, the organization had already deployed the basic structure of their Obeya room (see the diagram on the right).

VOC & CTQS

TIP

You can set up the room layout following the PDCA cycle.

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ACT TOGETHER

METRICS

PROBLEM SOLVING BOARD

Voice of the Customer (VoC) and Critical-to-Quality attributes (CTQs).

Macro plan.

Weekly plan.

Problem solving / Improvement areas.

Future plan: Next year objectives.

Business Metrics.

CHAPTER 14 THE OBEYA ROOM

HOW WE ENGAGED THEM THIRD WEEK: THE EXECUTIVE COMMITTEE MEETING IN THE OBEYA

Testing and Iterating as needed The Executive Committee performed their first ‘Obeya meeting’.

We executed our second Visual Management Workshop.

We invited the Executive Committee to run their meeting in the Obeya room with only the information available on the posters there; moreover we challenged the members to support their standpoints using as many posters as possible.

After 15-20 minutes, attendees quickly got the dynamics and presented their views moving around the room highlighting the main points.

Thanks to the first ‘Obeya meeting’, we were able to quickly identify gaps and areas to improve with the feedback gathered from this meeting.

Likewise, the Executive committee decided to incorporate a Sales Backlog to the Macro plan vision to be able to react quickly, so they visually integrated the yearly plan with the customer demands.

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HOW WE ENGAGED THEM FOURTH WEEK: EVOLVING METRICS AND SPREADING THE CULTURE

The Obeya room is open for everyone The Executive Committee had their second “Obeya meeting”. They all agreed that most of the required information to develop their management boards was already there. However, there were a few comments to improve the CTQ and the metrics board. We took notes about these comments and worked with them after the meeting, to adjust these elements.

We had an explicit Visual Management workshop to evolve the metrics board with the project sponsor and the ‘Reporting and BI (Business Intelligence)’ manager. After a few hours, we had matured the metrics board enough and we were able to link them and implement them in the reporting tools thanks to the BI manager.

As proposed initially, the Management Board invited one manager every week aiming at: Sharing the Project status on the board.

Extending a new transparent, visual culture, as the Obeya room was open to every member of the organization.

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HOW WE ENGAGED THEM FOLLOWING WEEKS: SYSTEMATICALLY ITERATE AND TEST UNTIL A FINAL VERSION

CEO

INCREASE CUSTOMER BASE > 10% ANNUALLY

During the following weeks, boards evolved to the second and even third prototype to integrate more information or make it clearer. The Executive Committee also decided to adjust some metrics.

COO

CUSTOMER RETENTION > 90%

SERVICE MANAGER

DEPLOY A NEW SERVICE FEATURE EVERY 3 MONTHS

CUSTOMER RELATIONSHIP MANAGER

RESPONSE TO CUSTOMER REQUEST < 1 WEEK

ROLE ESPECIFICS

ATTEND CUSTOMER DEMANDS < 24 H

DESIGN PROPOSAL < 72 H

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Iterate to cascade KPIs and metrics appropriately

PRESENT PROPOSAL < 24 H

Although there was a specific board for key business metrics, all the operational boards were complemented with metrics cascaded down from those key business metrics.

Each executive was given accountability for each business metric and their job was to make sure each one of them reached its annual target.

THE LEAN PLAYBOOK

HOW THIS HELPED THE TEAM ESTABLISHING A TRANSPARENCY CULTURE AND FACILITATING UNDERSTANDINGS

The impact: reporting hours and emails saved The information and multiple ad-hoc reports needed for the Executive Committee were replaced by the information displayed in the Obeya room. Just by replacing this, the result were savings of several of hours each month, as well as hundreds of exchanged emails and reduced number of misunderstandings.

Moreover, every member of the organization could at any moment enter to the Obeya room and see the progress of their projects and how their daily work was aligned with the organization goals.

After a couple of months some teams even began to hold their own meetings in the Obeya room.

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HOW THIS HELPED THE TEAM ALIGNMENT AT ALL ORGANIZATION LEVELS

Obeya fostered synchronization, regular meetings and up-to-date information The different Project teams visited the Obeya in order to keep everyone on the same page and to have their follow-up sessions. The team started doing: Once-a-week meetings to plan the following week (this rule had the advantage of imposing a rhythm of having regular deliveries on the project), synchronize schedules, share lessons learned, update weekly indicators, and resolve major problems.

Flash meetings (15 minutes meetings): Teams review and update their plan and indicators, and arise operational problems or improvements.

After the flash meeting, problems and improvements are prioritized, recorded on the problem solving board and tackled by the PDCA approach.

Ad-hoc meetings: needed to solve show-stopping problems.

Alignment meetings: representatives from all teams participated in order to synchronize their activities and deal with dependencies and potential problems before any project could compromise the companyâ&#x20AC;&#x2122;s objectives.

By doing so, they updated the boards directly and had the most up-to-date information to align their projects with other organization projects within the Obeya room.

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HOW THIS HELPED THE TEAM BENEFITS IN FIGURES: REDUCED TIME-TO-MARKET AND INCREASING CUSTOMER AND EMPLOYEE SATISFACTION

After 6 months The organization put 2 new services into the market, one of them becoming profitable almost instantly, when previously they could only manage to launch 1 per year and always with a lot of issues.

After 12 months Customer satisfaction rose from 3.3 to 4.1 out of 5, mostly because customers perceived more quality on the solutions and products and the lead time from request to delivery was reduced by almost 35%.

Employee engagement rose from 3.7 to 4.2 out of 5, especially in two aspects: personal impact (does my work help to achieve organization goals?) and personal development due to a better internal employee support and mentoring.

Nevertheless, after 12 months, senior management revealed that â&#x20AC;&#x2DC;Transparencyâ&#x20AC;&#x2122; had been the key aspect improved with the Obeya room.

Now everybody knew the strategy, performance, VoC elements and how all these linked with their daily jobs. Transparency fostered commitment, reduced misunderstandings and brought efficiency by saving time not doing ad-hoc reporting for every single BU.

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Chapter 15

AGILE COST ESTIMATION

QUICK CARD What is it A cost estimation technique to replace waterfall phases cost estimation with features instead, identifying first the Minimum Viable Product (MVP) and prioritizing what to do next with the MoSCoW analysis technique.

When to use it When you are managing several value streams delivering multiyear projects or product features and traditional long-term estimation techniques only prevent you from responding faster to changes in customer or market needs. This situation in a context of low predictability is the typical setup where Agile cost estimation techniques can enable your organization do adopt Agile budgeting.

CHECKLIST

Have or prepare a Backlog / Roadmap of features per Value Stream upfront.

Adapt the current Cost Estimate template to accommodate managing features.

Set up team sessions to estimate user stories using story points.

Time allocation: around 45 min to refine existing stories, 45 min to size existing stories and 30 more min to document new stories.

WHAT TO DO

WHAT NOT TO DO

Prepare the MoSCoW prioritization of features prior to the estimation session.

Involve entire team in the estimation session; also, involve Finance in changing the Cost Estimation template.

Base your estimations on expert opinion.

Let estimations be done by one person â&#x20AC;&#x201D; or allow one team member to bias the others.

Consider this exercise as a one-off rather than a new way of working.

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THE CASE CHANGING THE RULES OF THE GAME TO ACHIEVE STRATEGIC GOALS

The Challenge A Fortune 500 financial institution (FI) had identified a new goal to be accomplished in the next 2 years. This was the institution’s second-highest strategic priority. To achieve the goal, the FI would need to develop and launch a new software product within a 2-year time frame.

Based on high-level business needs, the institution estimated it would take 18 months for the first product release, with a budget of USD 13 million. This estimate of time and budget was based on the traditional waterfall estimation technique of top-down, high-level Rough Order of Magnitude (ROM).

There was no basis of estimation for the time and budget projected to deploy the product’s first release.

The institution’s senior business executives and product management team were skeptical whether this strategic goal could be achieved in the desired timeframe using traditional waterfall software development methodology. Given the “must deliver” expectation, the product management team proposed using an Agile development methodology.

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HOW WE ENGAGED THEM DEPLOYING AN AGILE FRAMEWORK

Training the workforce The institution engaged Agilious to lead this strategic initiative and to facilitate the adoption of the Scrum framework for product development. From the outset, Agilious’ Enterprise Agile Coach was involved in helping the institution’s leadership and stakeholders define the vision for the product along with the desired outcomes.

A significant challenge Agilious faced was that 95% of the team members — from business, product and development teams — were new to Agile and Scrum. Many had heard about Scrum and were familiar with a few Agile concepts and Scrum practices, but most of the team members had never participated in an Agile team or used Scrum.

Agilious’ Enterprise Agile Coach mandated Agile and Scrum training for all team members -- business, product and development teams. We conducted a half-dozen classes (or courses, or workshops) tailored to the members’ various roles: Agile for Executives (½ day) Agile Fundamentals Bootcamp (1 day) Agile Project Management (1 day) Introduction to Scrum (2 days) Writing Effective User Stories (1 day) Release Planning, Estimation and Agile Forecasting (1 day)

CHECK THIS LINK FOR TRAININGS, WORKSHOPS AND CERTIFICATIONS agilious.com/agile-training/

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HOW WE ENGAGED THEM DEPLOYING AN AGILE FRAMEWORK

Helping set the product vision with an MVP mindset After all team members were trained, over a period of 3 weeks, we organized and facilitated several working sessions to help the institution’s senior business executives and product management team create a product vision and identify desired business outcomes. During these sessions, the participants also identified the business needs and desired product features.

Once the product vision and outcomes were defined and approved by the executive sponsor, Agilious’ Agile Coach spent a couple of weeks working with the product team to further refine the product features and functionality. Based on the strategic goal of launching the first version within 18 months, we helped the product team create a MVP for Release 1. We then helped the product team create a product roadmap consisting of four releases spanning a period of 3 years.

To identify the features and functionality that would comprise the MVP for Release 1, we used the MoSCoW technique. The MoSCoW method is a prioritization method used to reach a common understanding with stakeholders on the importance placed on the delivery of each business need or requirement. The term MoSCoW is an acronym derived from the first letter of each of four prioritization categories (Must have, Should have, Could have, and Won’t have), with the interstitial Os added to make the word pronounceable. The plain English meaning of the categories helps customers better understand the impact of setting a priority, compared to alternatives like High, Medium and Low.

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HOW WE ENGAGED THEM DEPLOYING AN AGILE FRAMEWORK

Setting up the product backlog We established that the initial product plan would include delivery of all the Must have, Should have and Could have requirements but the Should and Could requirements, would be the first to be removed if the delivery timescale looked threatened.

The Product Owner and development team agreed to use 3-week-long sprints. The development effort kicked-off on Oct. 27, 2017, with Sprint 1 starting on Nov. 17, 2014. The development team consisted of three scrum teams working in tandem, using the same sprint schedule and from a one product backlog owned by a single Product Owner.

Right after the development team completed its first Sprint, the institution’s executive sponsor and the leadership team started to ask, “When will Release 1 be completed?”

At this point, the product backlog mainly consisted of high-level features and epics (large functionality, requiring multiple sprints to develop). So the Product Owner did not have the means to answer the question, “When will Release 1 be completed?”

To answer the question, we needed a comprehensive product backlog including all functional and nonfunctional product functionality. Additionally, the team had only completed two sprints; so we couldn’t calculate an average velocity for the team to be able to forecast a potential completion date.

We informed the senior business executives and the product management team that we would answer their question about the completion date for Release 1 as a forecast but only after the team had completed three sprints.

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HOW WE DID IT DEFINING AND IMPLEMENTING SPRINTS FOR EFFICIENT PRODUCT BACKLOG MANAGEMENT

Refining and sizing the backlog We immediately organized and conducted several focused product backlog refinement sessions, attended by the Product Owner, members of product team and development teams. During these sessions we decomposed existing backlog items mainly consisting of features and epics into smaller items, still at the epic level. The development teams then “sized” these refined backlog items using a points-based estimation scale of 100, 200, 300, 500, 800 and 1300.

Each session lasted 2 hours and had a clearly defined agenda with three components: Refine existing stories (stories were identified by their unique story ids from the Agile Lifecycle Management-ALM tool) - 45 mins Size existing “ready” stories (stories were identified by their unique story ids) - 45 mins Document new stories - 30 mins

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HOW WE DID IT DEFINING AND IMPLEMENTING SPRINTS FOR EFFICIENT PRODUCT BACKLOG MANAGEMENT

Getting ready to forecast completion date A story was considered “ready” when the development team members had no questions related to what is the desired action, who (the specific user role) it is for and why the described functionality is needed — that is, the specific value or benefit the identified user role would realize from the functionality.

Now, we could develop an Agile-based cost estimate and forecast the completion date for Release 1.

At the end of Sprint #3, the team’s collective average velocity was 218 story points.

Additionally, the Product Backlog at the end of Sprint 3 consisted of items with a total of 895 points. Using these two data points, we were able to create a forecast of realistic, best-case and worst-case completion dates. (See diagrams on the following pages)

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HOW WE DID IT DEFINING AND IMPLEMENTING SPRINTS FOR EFFICIENT PRODUCT BACKLOG MANAGEMENT

Completion Date Forecast Based on Current Product Backlog Size FORECAST

REPORT

Total points remaining (in Product Backlog): 895 Projected velocity: 218 Start date: 2/9/2015 Period: 21 days

1000 900

Additional periods to completion: 5 Forecast completion: 5/24/2015 Currently scheduled end date: 5/29/2015

800

POINTS ESTIMATE

700 600 500 400 300 200 100 0

3/1/2015

3/22/2015

4/12/2015

5/3/2015

5/24/2015

ITERATIONS

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Projected Remaining Projected Closed

CHAPTER 15 AGILE COST ESTIMATION

HOW WE DID IT DEFINING AND IMPLEMENTING SPRINTS FOR EFFICIENT PRODUCT BACKLOG MANAGEMENT

Completion Date Forecast Based on 30% Increase in Product Backlog Size FORECAST

REPORT

Total points remaining (in Product Backlog): 1200 Projected velocity: 218 Start date: 2/9/2015 Period: 21 days

1400 1200

Additional periods to completion: 6 Forecast completion: 6/14/2015 Currently scheduled end date: 5/29/2015

POINTS ESTIMATE

1000 800 600 400 200 0

3/1/2015

3/22/2015

4/12/2015

5/3/2015

5/24/2015

ITERATIONS

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6/14/2015

Projected Remaining Projected Closed

THE LEAN PLAYBOOK

HOW WE DID IT DEFINING AND IMPLEMENTING SPRINTS FOR EFFICIENT PRODUCT BACKLOG MANAGEMENT

Completion Date Forecast Based on 50% Increase in Product Backlog Size FORECAST

REPORT

Total points remaining (in Product Backlog): 1500 Projected velocity: 218 Start date: 2/9/2015 Period: 21 days

1800 1600

Additional periods to completion: 7 Forecast completion: 7/5/2015 Currently scheduled end date: 5/29/2015

POINTS ESTIMATE

1400 1200 1000 800 600 400 200 0

3/1/2015

3/22/2015

4/12/2015

5/3/2015

5/24/2015

6/14/2015

ITERATIONS

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7/5/2015

Projected Remaining Projected Closed

CHAPTER 15 AGILE COST ESTIMATION

HOW THIS HELPED THE TEAM SAVING MILLIONS THANKS TO A BETTER, MORE EFFICIENT WAY OF WORKING

Mastering the process through experience At the end of each sprint, the team updated the forecast to reflect the outcome. This allowed the senior business executives, product management team, and Product Owner to get an increasingly realistic, data-based forecast of the Release 1 completion date, along with a true sense of the product’s development costs.

The product management team, in consultation with stakeholders and incorporating end-user feedback, was able to make key decisions about the priority of product features and the functionality they wanted in Release 1.

Eventually, the team began to improve and mature with each Sprint.

They increased their average velocity and delivered high-quality product increments that were fully integrated and available for end-user testing.

The outcome of this initiative was beyond everyone’s expectations.

Release 1 was completed in 10 months at a cost of USD 6 million — saving the institution USD 7 million!

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ALTERNATIVE PRIORITIZATION TECHNIQUE ANOTHER OPTION FOR PRIORITIZING THE PRODUCT BACKLOG

Risk-Value based prioritization Another simple, yet powerful technique we used to help stakeholders prioritize the product features was the Risk-Value based prioritization. This method uses a two-dimensional graph where the X-axis represents the value of a feature and the Y-axis represents the risk. The risk comprises the following elements: Technology Risk: Are we using the “right” technology to build the product; does the organization have adequate experience with the selected technology?

People Risk: Is this the “right” team to build the product; do they have domain knowledge, and do they have adequate experience with the selected technology stack?

Knowledge Risk: Does the product team have adequate domain knowledge—about the target customer and users; about the market?

Market Risk: Is this the “right” time for this product in the market; is the MVP the “right” feature set for Release 1?

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ALTERNATIVE PRIORITIZATION TECHNIQUE ANOTHER OPTION FOR PRIORITIZING THE PRODUCT BACKLOG

HIGH

P1 PRIORITY #1

P4 PRIORITY #4

P2 PRIORITY #2

LOW

HIGH

One of the key principles of Agile is to deliver the highest value first. This method makes is easy for stakeholders to evaluate each feature, using the graph at left to assign a priority to each.

The goal is to deliver the highest-value features first, while mitigating the highest-risk features at the same time. The rationale for prioritizing the high-risk features is to learn about the risk early (learn about the risk early in the product lifecycle, so that the risk can be either mitigated or a contingency can be identified.

RISK

P3 PRIORITY #3

LOW

Risk-Value prioritization

VALUE

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ALTERNATIVE PRIORITIZATION TECHNIQUE ANOTHER OPTION FOR PRIORITIZING THE PRODUCT BACKLOG

Risk-Value prioritization Using this technique, stakeholders can identify the high-value, high-risk features and assign them a priority of #1 or #2. The features that are Priority #3 and #4 may not even get developed.

This powerful method allowed the stakeholders to create an MVP for each product release.

A 1

B

C

D

E

F

SPRINT 1

SPRINT 2

SPRINT 3

SPRINT 4

SPRINT 5

2

BACKLOG SPRINT SIZE AT BACKLOG START OF COMMITTED SPRINT (IN POINTS)

100

106

104

99

92

3

SPRINT BACKLOG COMMITTED COMPLETED

10

8

8

9

9

4

VELOCITY SPRINTTEAM BACKLOG COMPLETED

7

8

8

9

9

5

ITEMS ADDED TEAM TOVELOCITY BACKLOG (OBTW)

7.0

7.5

7.7

8.0

8.2

6

LAST-MINUTE BUGS ITEMS ADDED ITEMS TOADDED BACKLOG TO BACKLOG

10

4

2

1

1

7

ITEMS REMOVED FROM BUGS ADDED TOBACKLOG BACKLOG(OBTW)

3

2

3

2

1

8

SPRINTS ESTIMATE TO COMPLETION LAST-MINUTE ITEMS ITEMS REMOVED FROM BACKLOG

0

0

2

1

2

9

SPRINTâ&#x20AC;&#x2122;S ESTIMATE TO COMPLETION ALLOCATION % FOR NEWS BUGS / REWORK / SPIKES

15.14

13.87

12.91

11.50

10.12

10

ALLOCATION WEIGHTED % FOR SPRINTS NEW BUGS TO COMPLETION / REWORK / SPIKES

0.95

0.95

0.90

0.85

11

WEIGHTED SPRINTS TO COMPLETION

14.60

13.59

12.78

11.91

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CHAPTER 16 MAKING LEAN SUSTAINABLE

HUMAN BEINGS DONâ&#x20AC;&#x2122;T LIKE CHANGES HOW TO DEFEAT THE RESISTANCE TO CHANGE?

Creating a Culture for the Lean Transformation Our nature tends to face challenges, solve dangerous situations and play for the win at any given chance. But it is very difficult for us to try and adopt a new attitude towards things, to standardize or acquire habits.

Therefore a Lean transformation, just like any other transformation, has to look into the science of change management to seek answers in the area of human behaviour.

This chapter is focused on how we can keep the momentum during the journey of a Lean Transformation.

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CHANGE MANAGEMENT TO SUSTAIN LEAN HOW TO ESTABLISH A CHANGE MANAGEMENT PLAN?

The journey of the Cultural Change In order to ensure your Lean Transformation will be adopted at all levels of the organization, there is work to do. You will have to start deep-diving into the organizational culture by cascading this change through the line.

CREATING A CLIMATE FOR CHANGE

ENGAGING AND ENABLING THE WHOLE ORGANIZATION

1. CREATE URGENCY

4. COMMUNICATE THE VISION

2. CREATE A COALITION

5. EMPOWER ACTION

3. DEVELOP A VISION & STRATEGY

6. GET QUICK WINS

Found in Kotter, John P. (1996). Leading Change. Harvard Business School Press

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IMPLEMENTING AND SUSTAINING CHANGE

7. LEVERAGE WINS TO DRIVE CHANGE 8. EMBED IN CULTURE

CHAPTER 16 MAKING LEAN SUSTAINABLE

CREATING A CLIMATE FOR CHANGE WHAT WILL YOU FIGHT AGAINST DURING YOUR LEAN TRANSFORMATION?

Incepting the need to change Do we feel that we need to change? This is the very first important question. There has to be a clear urgency for change transmitted to people in order to get them to act.

However, some organizations, perhaps most of them, are unable to detect that they are in need of an urgent change.

We are more comfortable tackling external problems than recognizing that there are issues to be solved internally.

We strongly recommend you to try to discover the root causes of your organizationâ&#x20AC;&#x2122;s internal problems in the first place.

Lean should be able to help you deal with questions regarding these issues with your people.

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CREATING A CLIMATE FOR CHANGE ZOMBIES WITHIN THE ORGANIZATION

Spotting Zombies by their behavior When you experience decreasing business figures, most of the times it is because your organization is not reacting fast enough or is not prepared enough to face the problems.

Without the proper mechanisms in place, eventually, your people will lack the energy and the spirit to raise to the occasion or to solve the problem.

Believe it or not, this is the first symptom of a “Zombie Organization”. It is not easy to detect that you are becoming a zombie, but even worse is the fact that it is difficult to spot zombies around you, because they are designed to hide themselves while feeding on the company’s energy.

This chapter represents an easy guide to find out if you are in a Zombie Organization and if you should consider introducing an urgent change.

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 1

The Groundhog Day Syndrome Zombies love to repeat the same dynamic over and over. The impression that there is being made progress is generated, but, if you look closely at what is actually being done, you realize that the same issues are always being pushed forward, the same objectives are always on the agenda and even the same anecdotes or jokes are shared by the same people in the same situation again and again.

At the same time, deliverables are constantly postponed and not a single one of the proposed initiatives is finally put into practice. This is what we call the Groundhog Day Syndrome.

In this case Lean should be able to help you deal with the questions regarding these issues with your people.

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 2

The Zombie meetings This is one of the most powerful methods to detect that you are in a Zombie Organization and things have to be changed. Meetings are the environment where zombies feel the most comfortable. It is the perfect context to consume the time of several people at the same time in one single place!

On the next pages you will find a checklist to to help you detect if you are actually attending a Zombie meeting:

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 2

The Zombie meetings The meeting has no specific purpose or it is too generic (e.g. followups or reviews of projects that have no actual updates).

Most of the time you are talking about topics that are a â&#x20AC;&#x2DC;chronic diseaseâ&#x20AC;&#x2122; in your organization but are not linked directly to the purpose of the meeting.

Too much time is spent on small details, questions that are not relevant to the meeting or are focused on past situations that cannot be changed anymore.

There are lots of topics that are discarded from the meeting because they are related to other people who are not attending the meeting.

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 2

The Zombie meetings Most of the questions are postponed to be solved some other time, in a repetitive new meeting or at some point in the future.

The attendees have not prepared the meeting and have to improvise with solutions or suggestions, usually out of context The time set for the meeting is usually not met.

Peopleâ&#x20AC;&#x2122;s presence and energy levels are too low and they decrease even further or are uneven during the meeting Not a single decision is made and there is no list of actions to be completed after the meeting. If any actions have been stated, no owner or deadline have been appointed.

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 3

The Zombie Management Some organizations, or at least some parts of them, are in fact managed in a Zombie way. This is one of the most dangerous behaviours because this automatically generates Zombies within teams. Any employee that remains enough time in a Zombie behavior-driven organization tends to become a Zombie too.

Therefore, it is very important to do frequent health checks to see if your organization is run in a Zombie way. That way you can detect if it is changing into a Zombie organization and if you should trigger immediate changes.

On the following page you will find some questions to spot Zombie Management methods.

Run away if you find youâ&#x20AC;&#x2122;ve got more than 5 affirmative answers!

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 3

The Zombie Management Is the companyâ&#x20AC;&#x2122;s vision just a nice sentence but actually does not define what your work is?

Does your daily business focus on generating revenue in the short term but is not in the companyâ&#x20AC;&#x2122;s vision?

Does Management not visit the shop or office floor during daily business?

Are business figures the one and only driver for decisions?

Does Management think that they always have the right answers?

Are you forgetting about the Voice of Customer in your strategy?

Is there a general feeling that new things never tried before will not work?

Are most of the employees misaligned with the strategy?

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 4

Everybody is always busy When everybody is always fully booked, the natural reaction is to think that they are working at a constant level every day. But guess what, the only way to always work at the same level is when it is very far from performing at peak level.

People really concerned with contributing to the organization are able to make extraordinary efforts in sporadic occasions and they also save some time everyday to participate in improvement initiatives or to assume unplanned work peaks.

If you see everybody always working as there was a work peak everyday, at any time, there are probably a lot of Zombies around you.

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CREATING A CLIMATE FOR CHANGE ZOMBIE BEHAVIOR NUMBER 5

Demotivated Employees Last but not least, another important factor when spotting zombies in your organization is to have a look at some of these questions regarding your employeeâ&#x20AC;&#x2122;s motivation: Do people know what the purpose of their job is? And the purpose of the organization?

Are people proud to work there? Do they share that with others?

Where do people go when they leave the company? Which companies are they leaving to join our organization?

Do people feel burnt out when there are periods of stress? Is that feeling prolonged after those periods?

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CREATING A CLIMATE FOR CHANGE THE LEAN COALITION

Joining forces for Lean According to Kotter’s model, after the discovery of a real urgency in the organization it is time to create a “coalition for change”.

There are some people that you would want to include in this coalition: Sponsors committed to go all the way to the end.

Lean Champions that spread the word.

Lean Facilitators to employ the tools.

A Lean Office supporting change (see next pages).

An Internal Communication Team.

The company’s facilities department to contribute with logistics and materials.

And, naturally, people who really believe and embrace this change.

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CREATING A CLIMATE FOR CHANGE THE LEAN COALITION

The Lean Office One of the most important parts in the Lean coalition is the Lean Office.

It is a group in charge of everything involving the different Lean initiatives in the organization (see the diagram on this page).

We recommend that this team is periodically renewed with people from teams that have gone through the Lean experience

SUPPORTING

FACILITATE THE LEAN TECHNIQUES ADOPTION

IDENTIFY AND TRAIN NEW LEAN COACHES

GATHER ALL THE IDEAS FOR IMPROVEMENT

ALIGN WITH EXTERNAL INITIATIVES FOR IMPROVEMENT

ENABLING

PROMOTE NEW LEAN ACTIVITIES

MONITOR THE KAIZEN TEAMS ACTIVITY

DRIVE THE LEAN EXPANSION TO NEW PROCESSES

IDENTIFY AND ESCALATE ISSUES

SUSTAINING

HELP LEAN COACHES AND IMPROVE THEIR SKILLS

KEEP THE BODY OF KNOWLEDGE UPDATED

COMMUNICATE AND EXTEND GLOBALLY

DEFINE COMMON METRICS AND REPORTS

FOCUS ON WORKING TEAMS

FOCUS ON IDEAS

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CHAPTER 16 MAKING LEAN SUSTAINABLE

CREATING A CLIMATE FOR CHANGE DEVELOP A VISION AND A STRATEGY

Killing Zombies in the organization If your organization has adopted one of the Zombies’ behaviors we have described, you really need to start changing something. Introducing Lean is possibly one of the best options available because one of the key aspects it manages, is how to make people embrace change within your transformation strategy and during the different stages of the improvement cycle.

Changes should not come as a reaction to a movement from the competitors. The real objective should be to tackle the internal Zombie behaviors in the organization to empower employees.

Therefore, it is important to develop a vision of the change and what the reason for change is.

TIP

Try to avoid generic messages such as: “maximizing sales” or “shifting the paradigm”. Instead of that, go for a real pain point in your organization. A good vision could be: “We need to reduce meetings by 60% at the end of this year”.

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ENGAGING AND ENABLING EVERYBODY COMMUNICATE THE VISION

Any place is great to show the Lean message At this point you already have detected what the pain point in your organization is, you have created the Lean coalition for change and you have established a vision for that change.

It is time to share this with the entire organization. Remember that communication is just a part of a larger change management approach, but it is the one you will need to use the most. Some tips that might help you amplify your message could be the following: Create a motto for the program with a short and clear message that inspires people.

Incorporate a branding ambassador (from the Top Management) that everybody can link with the initiative.

Mix the traditional channels (Intranet, Mailing, etc.) with some new ways of communication such as Lean breakfasts or videos or podcasts.

Use visual references to easily identify the program (posters, mail headings, etc.).

Use merchandising (cups, pins, lanyards, etc.) that people can wear.

TWO EXAMPLES OF SUCCESS CASES Miamiâ&#x20AC;&#x2122;s Children Hospital Kaizen for charity

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ENGAGING AND ENABLING EVERYBODY PROMOTE ACTION

Recognizing the Lean heroes To engage people in the organization you should take into account and reward the effort every individual will put into driving change through actions.

It should be a good idea to introduce a prize for the best improvement achieved or for the team that is contributing the most in a Lean transformation. Those people that have achieved the most transformational improvements should also be recognized.

Contribution to improvements should be included in the annual targets of people and be part of their development paths. Since it is an extraordinary contribution to make the organization move to the next level, the effort put into the Lean program should be acknowledged as a performance factor within the companyâ&#x20AC;&#x2122;s business development goals.

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ENGAGING AND ENABLING EVERYBODY PROMOTE ACTION

Get quick wins (1 of 2) As we have said before, the introduction of rewards and the performance evaluation in a Lean Transformation sets up the right management systems to enable the organization to work on improvements in a â&#x20AC;&#x153;professional mannerâ&#x20AC;?.

Now, let us assume that you have already used some of the Lean tools in the first wave of improvement, according to your plan and your strategy. Quite possibly, the teams involved in the workshops have surely come up with a few improvements of their own. On top of that, thanks to your communication plan, your initiative has attracted many people interested in how this new idea is developed.

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ENGAGING AND ENABLING EVERYBODY PROMOTE ACTION

Get quick wins (2 of 2) What is everybody (especially Management) expecting? Results. And the sooner you get them, the better. The benefits that you can obtain from a Lean initiative could usually be either: Improved cultural aspects (communication, collaboration, etc) Increased efficiency (process total time reduced, less effort spent, etc.)

YOUR MAIN CHALLENGE IS TO TRANSLATE EVERY RESULT YOU HAVE, AS PART OF YOUR QUICK WINS IN TERMS OF VALUE ADDED TO CUSTOMERS. Be creative when thinking on how to measure your results, but do not create a new set of metrics. Measurements differing from the regular performance indicators are useless or questioned by many stakeholders. The effect we want to create with Lean has to be shown in the daily business figures and by adding value to our customers in a regular manner.

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IMPLEMENTING AND SUSTAINING CHANGES LEVERAGE WINS TO DRIVE CHANGE

The secret of never stopping Your Lean transformation is going well. The teams within the Waves are discovering improvements in the workshops and the Kaizen teams are implementing them and showing outstanding results.

Now, there is only one way to consolidate this change: take all that has been achieved as a new baseline for a another Lean transformation. This shows that your plan has been completed but is not the end of the transformation. The continuous improvement mindset is here to stay.

According to our experience, this is when one of the more difficult parts of a Lean journey arrives: launch a new iteration or wave of the continuous improvement process with teams that have completed their Kaizen goals. This is a mandatory action if you want to ensure Lean stays in the organization (Lean is all about continuous improvement).

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IMPLEMENTING AND SUSTAINING CHANGES EMBED IT INTO THE CULTURE

At the end of this journey, a new culture or way of working should be embedded into the organization. Then it becomes advisable to assess the situation of your Lean organization.

Here are ten questions to evaluate your Lean Transformation:

Are you as an individual…

Thinking of the customer as final receiver of everything you do?

Feeling part of a value stream oriented towards your customer?

Having full control of the work you are involved in (having clear visibility of the end-to-end process and committed dates)?

Informed of the customer’s demand that is pulling your current actions?

Encouraged to reduce defects and rework to zero?

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Do you feel that the organizationâ&#x20AC;Ś Classifies appropriately the demands of the customer?

Is set up properly to fulfill the customer demands?

Has enough capacity to absorb work peaks?

Has implemented standard processes to guarantee that variations in the responses to the customers are kept to a minimum?

Reinforces the right behaviours to keep the quality levels at the highest?

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IMPLEMENTING AND SUSTAINING CHANGES EMBED IT INTO THE CULTURE

Lean is the daily mindset It is during daily operations when Managers should show they believe in Lean. These are some Do’s to ensure your Managers are actually promoting this behaviour:

DO

DO DURING DAILY STAND-UP

INTEGRATE YOUR NEW WAY OF WORKING AS A PART OF YOUR “BUSINESS AS USUAL”, NEVER AS AN EXTRA OR DUPLICATED MANAGEMENT WORK

OFFER SUPPORT TO UNBLOCK ACTIONS IF SOMETHING NEEDS TO BE TALKED ABOUT EXTENSIVELY, TREAT IT IN A SEPARATE MEETING OUTSIDE THE DAILY STAND-UP

ENCOURAGE YOUR TEAM TO JOIN EVERY LEAN ACTIVITY PARTICIPATE IN LEAN ACTIVITIES AS MUCH AS YOU CAN

BE FLEXIBLE WHEN PEOPLE ESTABLISH THEIR OWN COLLABORATION NETWORKS OR IF SOMEONE OFFERS HELP TO OTHER TEAM MEMBERS

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IMPLEMENTING AND SUSTAINING CHANGES EMBED IT INTO THE CULTURE

Lean is the daily mindset These are some Don’ts to ensure your Managers aren’t actually promoting this behavior:

DON’T DO

DON’T DO DURING DAILY STAND-UP

ARRANGE OVERLAPPING MEETINGS DURING DAILY STAND-UPS OR DURING OTHER LEAN ACTIVITIES

USE THE MEETING AS REPORTING CHECKPOINT OR TRANSFORM THE MEETING IN 1 TO 1 DIALOGUES BETWEEN YOU AND EACH TEAM MEMBER

ATTEND LEAN ACTIVITIES WITHOUT FOCUSING ON THE SESSIONS (E.G. WORKING ON OTHER THINGS)

EVALUATE PAST PERFORMANCE OR QUESTION IF SOMETHING COULD BE BETTER

USE LEAN AS A WAY TO IMPLEMENT “YOUR IMPROVEMENTS” IT IS A COLLABORATIVE APPROACH FOR THE TEAM

FOCUS ONLY ON WHAT IT IS GOING BADLY. RECOGNIZE AND CELEBRATE ACHIEVEMENTS AND COMPLIMENTS FROM THE CUSTOMERS

274

The team behind the idea

ABOUT THE AUTHORS

THE TEAM BEHIND THE IDEA ABOUT THE AUTHORS

IVÁN MARTÍN SENSEI, COACH AND SERIAL IMPROVER

Consultant with more than 10 years of experience. He holds the Lean IT Expert Certification and he is also a regular speaker on Lean and Change management topics.

He has helped many Spanish and European companies from different sectors with their Lean Transformations in different contexts: Organizational Change, Process Efficiency, New Business Models… and also he has coordinated several training programs.

PEOPLE’S BEHAVIOR AND ATTITUDE ARE THE MOST IMPORTANT THING IN A LEAN TRANSFORMATION. YOU NEED TO AWAKEN THE INNER DESIRE TO ADOPT LEAN WITHIN THE TEAM YOU ARE WORKING WITH

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ANTONIO MEDINA NATURAL BORN OPTIMIST, FATHER AND SUPERHERO (TO HIS DAUGHTER)

A Business Transformation Manager and Lean Coach, he holds a MEng in Computer Systems and two MScs, one in Information Systems Management and the other in Consultancy and Business Advisory. He is also a certified Lean IT practitioner.

He has contributed in introducing the Lean philosophy in different companies through Transformational programs in Sales, Finance and IT. This experience has led him to write articles on how to leverage Lean in ERP implementations and how to mobilize entire organizations to adopt agile methodologies.

INTRODUCING AND DEVELOPING THE LEAN PHILOSOPHY IN LARGE ORGANIZATIONS HAS PROVED TO ME THAT IT WORKS IN EVERY BUSINESS CONTEXT: FROM OPERATIONS TO STRATEGY

278

THE TEAM BEHIND THE IDEA ABOUT THE AUTHORS

DANIEL SANTIAGO RUNNER, MUSIC LOVER, TECHY JUGGLER AND MORE!

Lean Consultant and Business Consultant. He holds a MEng in Telecommunication specialized on Planning and Management, and also certified as Lean Practitioner and Trainer.

He has participated as trainer, agent of change and coach in introducing Lean principles and fostering Lean transformation at international companies from different perspectives: Increase customer satisfaction, Organizational transformation and Generate new businesses. Lately, he is developing a business unit to help companies innovate through Digital Transformation.

BY HELPING ORGANIZATIONS TO CONTINUOUSLY IMPROVE ITERATIVELY THROUGH SMALL CHANGES, I HAVE DEMONSTRATED EVERYBODY WANTS TO FEEL PROUD OF THEIR WORK AND THAT IS THE BEGINNING TO EXCELLENCE

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ANTONIO JOSÉ RODRÍGUEZ PASSIONATE, FAMILIAR AND ENERGETIC

Organizational Consultant with more than 15 years of experience in quality matters. He studied Statistics and he specialized in Quality, obtaining the Auditor and Quality Manager Certifications.

From ISO standards to Lean thinking he has developed his career helping companies in the endless road of improvement.

His collaboration in Lean Transformation projects has focused on improve customer satisfaction, performance and efficiency based on the motivation of the people to apply a new way to work.

WE CAN USE WHATEVER FRAMEWORKS OR STANDARDS WE MIGHT WANT TO BUT WE CAN ONLY OBTAIN EXCELLENCE IF WE TAKE THE PEOPLE WHO WORK EVERY DAY TO MAKE THE ORGANIZATION OPERATE INTO ACCOUNT

280

Lean is anchored in practice and this book is the ‘Check’ in the ‘PDCA’ of the author’s practices: it visualizes them, enables others to apply them and enables a next ‘Act’ to contribute to the further evolution of Lean practices. Read it, feed back and bring Lean to the next level!

PIERRE MASAI, CIO of Toyota Motor Europe

THE LEAN PLAYBOOK Finally exposed: the Lean philosophy and how to implement Lean tools in your organization. But be warned! This book contains explicit improvement results in organizations just like yours.

The Lean Playbook will show you the way to delight your clients with a more efficient organization. Do more with less. Even if you are not in the management of your company, or if you are a freelancer, you will be able to use the lessons in this book on your daily activities.

We’ve made it the key point of this book to explain every concept with a real world case of Lean implementations and/or Lean tools usage. It is the best way to get to the point and empowers you to repeat the activity in your organization. All the situations included here are based on our real experiences in more than 60 Lean implementation projects in large and multinational corporations VISIT OUR WEB theleanplaybook.net You can also become a sponsor and build your own customized edition of the book! PLEASE WRITE US AT members@theleanplaybook.net