Category Archives: Service Excellence

Create accountability through reflection and storytelling instead of dashboards

In many organizations there are dashboards for everything, but there may be a better way to create accountability: through reflection and storytelling.

Last Monday, I attended a group discussion on accountability in modern organizations like Agile or Super7. Jan Smit, partner at Brooz, led the discussion on accountability in modern, less hierarchical and team-based organizations.

In modern organizations, Agile or Super7 for instance, the responsibility lies lower in the organization and priorities are far less static. The old ways of managing accountability with clear yearly targets, KPI’s and dashboards often hinder flexibility and agility. So, is there an alternative? Jan Smit explained that there is. Accountability can be created with far less emphasis on numbers, metrics, targets and KPI’s. According to Smit, there is a better way to go about appraisal, quality control and compliance, based on four elements:

  1. Reflect on what happens in practice
  2. Use storytelling
    • Listen to experiences of customers
    • Gather stories from the shop floor
    • Use qualitative perceptions
  3. Engaging in dialogue
    • Gather insights and knowledge through dialogues
    • Peer review, horizontal accountability between professionals
    • Stakeholder meetings
  4. Go and see in practice
    • The good-old Gemba, still the place to be for a Lean practitioner

Jan Smit relates this way of managing accountability to the Rhenish model, of Rhine Capitalism, while the target-KPI-Dashboard approach is associated with the Anglo-Saxon model of capitalism.  The Anglo-Saxon model portrays an infinite faith in numbers and their objectiveness, Smit states, while numbers are at best a poor representation of reality.

In my personal experience, metrics and numbers are essential for enabling autonomous lean teams to steer themselves, to see whether they are improving and to facilitated their autonomous decision making. And, external stakeholders often demand strict numerical accountability. But still, we could surely experiment with new ways of performance appraisal, risk management and compliance in our modern organizations.

Menno R. van Dijk

Continuous Improvement for Agile and Super7

Kata, Kaizen, DMAIC and Value Stream Re-Design – all Lean improvement methods can be used for Continuous Improvement for Agile and Super7 teams. But what is the best? Which method should we use? This is not an easy question. It depends. It depends on the scale of the desired improvement. It depends on the desired speed of improvement. And, some methods require more specific expertise than others.

Super7’s and Agile teams are faced with the question of which improvement method they should use for Continuous Improvement. They are expected to improve autonomously. Therefore, autonomous teams such as Super7 teams and Agile Teams should know these Lean improvement methods, enough to select the right one for the right problem.

A quick overview of the methods for Continuous Improvement for Agile and Super7

Value Stream Re-Design

  • Improvement of the entire value stream – the end-to-end process from demand to supply
  • Re-design based on principles, most often the Lean Principles of Pull and Flow
  • Uses Value Stream Mapping, a standardized way of visualizing how value flows
  • Large improvements, with often quite extensive impact on people, processes and organization
  • Requires expertise on Value Stream Mapping and Lean

DMAIC

  • Lean Six Sigma improvement project approach
  • Standardized phases: Define, Measure, Analyze, Improve, Control
  • Fact based, measurement based problem solving by eliminating root causes
  • Useful when the root cause of a problem is unknown
  • Requires expertise on statistics, analytics and Lean Six Sigma at Blackbelt level

Kaizen

  • Lean method for small step improvement in one or two days
  • Quick analysis based on available data
  • Improvement based on Lean principles
  • Team of experts and operational employees
  • Participants are made free from their regular work during the kaizen
  • Sometimes facilitated by Blackbelts or Greenbelts

Improvement Kata

  • Continuous improvement as a habit
  • Every day, everyone, the way of the learning organization
  • Many small experiments
  • Discovering the way towards improvement as you go
  • Often supported with the use of Coaching Kata
Improvement Kata

Improvement Kata

On earlier posts on this site (www.cooperationalexcellence.nl) you can find more information on this subject. For instance, how Improvement Kata is applied by Super7 Teams.

 

Menno R. van Dijk.

Transformation to Agile benefits from LeanSixSigma experience

When traditional organizations transform into Agile, they can benefit from their LeanSixSigma experience.

Many traditional companies are looking with great interest at how innovative tech companies are organized. Even in banking, an industry that is known for being conservative, experiments are taking place with Agile Organization:

  • multidisciplinary squads instead of functional teams,
  • tribes instead of departments
  • IT development and business management in close cooperation
  • Continuous delivery of small changes (sprints) instead of big projects

LSS
Lean Six Sigma has been applied in banking for more than a decade. Many banks have their own pool of Lean Experts or LeanSixSigma Blackbelts. As Agile is based on similar principles as Lean and the Toyota Production System, this experience may be very valuable in this transition.

 

Agile organizations use Agile Coaches, to help the team in the use of the Agile and Lean principles. LeanSixSigma could add to that. For instance:

  • Put focus on the Voice of the Customer. Challenge the Squads to determine and measure the customer impact of their work.
  • Make sure the quantitative results of every sprint are visible
  • Achieve alignment between squad missions, tribe purpose and company vision. This can be done through Hoshin Kanri – a method for policy deployment developed by Toyota and an important Lean method
  • Accelerate problem solving by applying the Coaching Kata to the squads Improvement Kata, and by applying Analytical Problem Solving techniques from LeanSixSigma

 

The transformation of classical Back-Offices to Lean Super7 Operations has been an exciting journey so far. The transformation from a top-down functional organization to an Agile organization promises to be even more so.

Menno R. van Dijk.

Super7 with Quality Improvement as output

Quality Improvement can be used as one of the output targets for Super7 teams within Super7 Operations. The trick is to set a target for the amount of time that a team spends per week on continuous improvement. This target then comes on top of the output target of helping all customers on time in full.

In my book – Super7 Operations, The Next Step for Lean in Financial Services – several examples are given of Super7 teams that use throughput time as target for intra-day self-steering.

Recently, I was asked to help an operations department that wanted to drastically improve their quality and customer satisfaction*. The management had taken a liking to the ideas of Super7 Operations. However, they felt that throughput time as main output wasn’t suitable for their type of work. The daily focus had to be on helping the customers, first time right. And this had to be achieved through continuous improvement. For they strongly believed – as I do – that bottom-up continuous improvement is the best way to sustain strong performance.

*Many companies, especially banks, use the Customer Effort Score (CES) as a metric to customer satisfaction. This didn’t replace Net Promoter Score (NPS) as a metric, but many companies have found that customers aren’t that likely to become promoter after going through a ‘process’ that they regard ‘basic service’ (like opening a savings account, for example).

The teams were given a target for the amount of time that a team spends per week on continuous improvement. This target came on top of the output target of helping all customers on time in full. As the improvements led to better quality and therefore less rework, the amount of time available for continuous improvement was likely to increase over time. We had anticipated this beforehand and developed a system where the weekly improvement time target would automatically be increased each week. This forced a productivity increase and at the same time made sure that the teams would spend enough time working on continuous improvement.

The journey of this particular department has only just begun. Who knows what successes I can report about in the near future?

Menno R. van Dijk.

A new book on Super7 Operations!

Super7 Operations –  a book by Menno van Dijk 

(tip: clik the link above ↑ to buy the book at amazon.com)

 Naamloos

                       

“Why did you decide to write this book on Super7 Operations?”

–          “To me, Super7 Operations is the logical next step for LEAN in financial services. I’m proud that we developed this innovation within ING. I’m so enthousiastic about it, it would be fantastic if this innovation would spread across the financial world. So much more can be achieved with LEAN than cost reduction alone. LEAN can become the culture within which people truly work together to improve every day.  That’s the foundation of Super7.  We believe in the abilities of our people, we trust them and give them responisibilities, and we steer on output. This improves the service to our customers. And, LEAN becomes FUN again! I had to write a book about Super7 Operations, to give as much people as possible the chance to learn about it.

“What were the reactions so far?”

–          “Very positive indeed! That started already with the publiser: the book was selected as “Editors Choice”,  something that I’m very proud of. And the feedback that I have received from readers has been great too.”

“Are you planning to write more in the future?”

–          “Well, we have been working on developing Super7 Operations further within ING. The method has been introduced in much more teams, some with totally different type of work than where Super7 Operations first was developed. For instance, what do you do when TITO (today-in-today-out) isn’t possible, when the nature of the work is such that it takes more than one day to complete it? This requires a different way of setting daily goals.  These developments may make a  great addition to the existing book, maybe for the second edition?”

Updated White Paper: Team Targets or Individual Targets for Super7 Operations

Super7 Operations is based of small teams, working on a common goal. What does that mean for their team targets and incentives?

A lot has been said about bonuses and target related incentives, the past few years. Do they lead to irresponsible behaviour and risk taking within financial institutions? Should managers from state-owned companies, or companies relying on state support, get a bonus if they meet their targets? Interesting questions; however, that’s not what this blog is about. How bonuses and incentives influence the way teams work together, especially in Lean organisations, now that’s something I’m very passionate about.

In my experience as a Lean consultant, I have often found that organisations struggle to maintain the initial rate of improvement: when autonomous production teams, lean quality circles or TPM-teams are first formed, the performance improves spectacular. 20%-50% increase in productivity or machine output is achieved almost every time. In some exceptional situations, I even encountered productivity increase of over 100%. Enough to exceed my clients’ expectations, but my goal was always to get to a state of ‘continuous improvement’. This is when the production teams continue to improve: relentlessly reducing waste, again and again improving their standards.

I strongly believe that financial team incentives can play an important role in making the final step towards continuous improvement. That is why I did this literature search: to find out if my believe is supported by reliable research.

My conclusion: Several publications, especially on effectiveness of ‘Operational Excellence teams’ (e.g. TPM teams, autonomous teams, six sigma project teams, etc.), confirm that team incentives are more effective than individual targets. However, I had to adjust my strong believe on two points:

  • Also individual targets have their merits, and a combination of team and individual targets may well be worth considering
  • Targets and incentives aren’t the only driver, nor the main driver, for success of Operational Excellence teams, and they should be part of an integral approach

New White Paper: optimal team size

Lean and Super7 Operations work with small, autonomous teams. Exactly how small should our small autonomous teams be?

This is the question the manager of the central back-office of a large Dutch retail bank asked me, when I proposed the idea of autonomous team to him. At the time, I was working on a project to introduce customer focus and to realise same-day processing in his organisation. I came up with an innovative organisation design, in which small teams are responsible for their work for that day, i.e. all customer request of a certain type that the bank had received that day. After successful pilots, the organisation wanted to introduce this way of working for all (ca. 400) employees. That’s when this question came up…
 
From experience, I knew that the teams shouldn’t be too big: the pilots were done with teams of 5 – 7 persons. However, factual substantiation was needed. A quick search showed me that a lot of research had been done on Agile / Scrum teams, so that’s where I started. And this article is the result: a literature search on the optimal team size for autonomous teams.

My conclusion is: Organisational design isn’t an exact science. As an engineer, I would have loved to have found statistically sound measurements on the effectiveness of teams of different sizes – but in truth, I think that team size isn’t the main driver for team effectiveness. However, if your customer, the type of work your customer asks you to do, requires your organisation to work in small teams, I would suggest – as I did to the manager of the banking back office: small teams consist of 5 to 9 persons. Or, If the flexibility of your workforce allows this, as it did in the case of the banking back office: flexible team size, ranging from 5 on slow days to 9 on a busy day.

At the moment of writing, the banking back office has implemented the new way of working, and has asked me to do a ‘check-up’ on effectiveness of the new organisation. I can’t wait to start: Ï wonder what I will find, but I bet that it will be inspiration for several articles on CoOperationalExcellence.nl!
 

White Paper: Optimal Team Size

Cooperational Excellence: what’s in a name?

Cooperational Excellence: People working toghether in small teams to create excellence in your operation. This may be nothing new under the sun for manufacturing and assembly plants: mini-factories, autonomous teams, u-cell manufacturing, quality circles etc. have become the standard in the last decenia. Especially in automotive, where off course Toyota still sets the standards (Toyota Production System).

In creating Service Excellence, these methCooods and organisational principles haven’t been applied so widely. Recently, I have implemented autonomous teams in a back-office of a large financial service provider, with even for me unexpected success: costs are down, queues and ‘inventory’ have almost completely dissapeared – which means waiting times for the customer times have also – and employees and management are enthousiastic about esponsiblitly on the ‘shop floor’ instead  top-down management control.

I have named this, the application of manufacturing-style teamwork in administration and service, cooperational excellence: working toghether in small teams in close cooperation, to achieve operational excellence.

If you want to know more, contact me, or just check regularly for new posts on this website!