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Replace operations team managers with Super7 Coaches

As Super7 teams get more mature, it may be wise to assign Super7 Coaches and scale down even further on opertions managers.

More and more organizations are succesfully applying small, autonomous Lean teams – Super7 teams – within their operational departments. More autonomy, more employee engagement, better results. In this transition towards Super7 Operations, the role of the operational team manager has changed enormously.

Within the Netherlands, ING has been working with Super7 teams for almost 5 years now. As more experience is gained, new questions are raised. One in particular (thanks Ingrid and Jacqueline!) really made me think: should ING assign Super7 coaches, in parallel with the Agile coaches that are widely applied in Agile organizations?

The parallels between Super7 Operations and Agile are eminent. After all, both are based on very similar principles, derived from the same classical Lean production principles. So why not learn from the ‘management’ roles that Agile appies.

As you may know, Agile doesn’t use managers. Part of the of the old manager’s responibility is delegated towards the autonomous teams. The people/skills development part is now the responsibiltiy of the Chapter Lead. And Agile coaches are responsible for helping the team to become mature in autonomy and agility.

It may be wise to assign Super7 Coaches and scale down even further on opertions managers. Our experiency with Super7 teams shows that it is hard to maintain the momentum in team development. Some teams do fly, some teams reach a certain level and then developments seems to slow down or stop altogether. In theory, the team manager should help the Super7’s with their development towards maturity. But is this the best solution? Super7 coaches may be better equipped for this job.

But what would that mean for the oprations team managers? As with Agile, part of the old manager’s responisibility – planning, senior process knowledge, scheduling – has already been delegated to the Super7 teams. When Super7 coaches take over the responisibilty of coaching the team towards maturity, the role of the team manager becomes smaller again.

The team manager would still be responsible for the development and appraisal of individuale. And, he or she would still be the one that set the output targets for the teams, translated from the departmental goals.

To keep work load large enough, we would however need less managers – more direct reports per manager. This would mean that some of the team managers would lose their job, and I do understand that can be a dificult situation. However, a trend towards less management does seem fitting for an organization that works with autonomous team, don’t you think?

Menno R. van Dijk.

 

 

 

Meet the writer Menno van Dijk

Last week, I was invited to speak at a Meet The Writer event at ING. A group of enthusiastic readers invited me to talk about Super7 Operations – the Next Step for Lean in Financial Service

Event: meet the writer Menno van Dijk
Event: meet the writer Menno van Dijk

 

 

 

 

 

 

 

 

 

We had interesting discussions about teamwork and cooperation. What made the Super7’s such a success? (it was the people that did it).  What did it bring to the operations departments where Super7 was introduced? (more engagement, lower costs, better service)

Next to that, I was asked about “Menno van Dijk the writer”. What made me want to write this book (basically, I’m so enthousiastic about what people can achieve when they truely work together, and I wanted to share this whit as many people as possible)? And how much time it took to write a book (three months), and to get it published (another 9 months).

Event: meet the writer Menno van Dijk

Event: meet the writer Menno van Dijk

 

 

 

 

 

 

 

 

 

Afterwards, books were signed and the participants said the session was worth their while. Plans are already being made for a second “Meet the Writer – Menno van Dijk” event.

Menno R. van Dijk – writer.

New White Paper on Hoshin Kanri for Agile

A new White Paper is available on www.cooperationalexcellence.nl. This White Paper describes Hoshin Kanri for Agile in detail. In this White Paper, Menno R. van Dijk explains how to get alignment and direction for autonomous Agile teams. First, the model is introduced. Then, each step is illlustrated and practical tips are given for how to make Hoshin Kanri for Agile work for your Agile organization.

White Paper on Hoshin Kanri for Agile

The autor, Menno R. van Dijk, has previously published several white papers on cooperation and teamwork on www.cooperationalexcellence.nl. His book, Super7 Operation – the Next Step for Lean in Financial Services, is available in bookstores (Super7 Operations – a book by Menno R. van Dijk ).

 

Flexibility to cope with fluctuation: what does this mean for employees?

Customer demand can fluctuate enormously: with Super7 Operations, we try to cope with the fluctuation by making our operations capacity as flexible as possible. But what does this mean for the employees? Perhaps it’s good to share our experiences from recent implementations of Super7 Operations within a large Dutch retail bank.

Because the work is planned on forecast, the small autonomous Super7 teams have some idea in advance of how much capacity they need to deliver each day. The more accurate the forecast is, the easier it is to create a roster that everybody is happy with.  But planning ahead on forecast isn’t easy. The reality is that the actual working hours per day can be somewhat unpredictable. Naturally, this doesn’t always mean working longer, there is an equal chance of going home earlier because there is less work than planned.

The reality is that working predictable hours isn’t possible anymore. The truth is that customers in financial services expect faster response and better service than before the banking crisis.

The team members within a Super7 team can help each other out and compensate when one of the team members needs to be home on time. This can’t be a daily recurrence, however. For people with young children, this often means that they need to find back-up arrangements with their partner, neighbors or grandparents to pick up the kids from the daycare, for instance.

In a recent survey, employees were asked if the felt that their work/life balance had changed – worsened or improved – since the introduction of Super 7 Operations. The result was twofold: very few people responded that the introduction of Super7 Operations hadn’t influenced their work-life balance. About half of the respondents indicated that the balance had worsened. But on the other hand, an equal part indicated that it had improved. For some, the plus-side of working shorter on quiet days outweighs the down side of working longer when necessary. And for others, flexibility results in challenges in the strict schedules of home and family.

More on this topic can be found in my recent book: Super7 Operations – The Next Step for Lean in Financial Services. Available on Amazon.com, or for European readers Amazon.co.uk, Amanzon.de  or Amazon.fr.

Super7 Operations - the Next Step for Lean in Financial Services ; a book by Menno R. van Dijk
Super7 Operations – the Next Step for Lean in Financial Services ; a book by Menno R. van Dijk

 

OEE sets the standard for improvement metrics

Which way to improve? OEE gives directions!One of the best ways of getting people to cooperate is to give them a common improvement goal. And OEE is the best example of what a good metric for improvement should look like.
The best example of cooperational excellence I’ve encountered so far is production teams working together to improve the performance of their production line. You could argue that the fact that a team of operators work on operating the same piece of equipment imposes the need to cooperate. The effect of improving together is much stronger, to my experience. And OEE – Overall Equipment Effectiveness – is, to my opinion, the best gauge you can give a production team for this purpose.

The theory of OEE
In short, OEE is defined as the time a production line is running effective (i.e. producing to quality standards at the rate it was designed for) as percentage of the total time that is available within a certain period. For example, for a a printing line producing printed forms OEE is calculated as follows:
Total production last week: 500 boxes of forms
Total time that would be required for production of 500 boxes, when the machine would have run at the speed it was designed for, without stops: 24 hours (= effective machine time).
Total time in the last week (opening hours of the factory): 120 hours (= total time)
OEE = effective machine time / total time = 24 / 120 = 20 %
But there is more.
OEE also shows you where the unproductive time went: the 6 big losses (of which there are actually 8)
Frist, there are2 Planning losses:
– Scheduled maintenance
– No orders or no materials available
Secondly, there are2 Availability losses:
– Set-up time
– Technical break downs of the machine line
Then there are2 Speed losses:
– Machine is running at lower production rate that it was designed for
– Short stops (paper jams, etc.)
And finally, there are 2 Quality losses:
– Machine is producing products that aren’t meeting the specifications (rejects)
– Products produced at the beginning of a run, while the machine settings are adjusted

What’s so great about OEE
One great thing is that all time is accounted for. It is impossible to manipulate the system. E.g., if you don’t register a technical break down, the time loss will end up in your speed loss.
Another great thing is that calculating improvement potential is easy (but not relevant for this story today).
But the very best thing is that a standard improvement approach is available for each type of loss. This helps the production team enormously in their improvement efforts. At any moment, they can start a kaizenning (improving) on the biggest of the 6 (i.e. 8) big losses, and by choosing the loss they want to address, they automatically know how to improve it.
For instance:
For set-up time reduction, there is the SMED method (Single Minute Exchange of Die): videotaping the set-up and eliminating all the muda out of the time that the machine doesn’t run.
Technical break downs can be prevented by introducing TPM (Total Productive Manufacturing)
The machine speed can be improved by – and this is a fun thing to do – step-wise increasing the speed until something goes wrong, watching closely what it is that goes wrong, and then finding a solution for what goes wrong.
And so on, for all the losses.

 

OEE sets the standard for all measurement systems
When you introduce a system of metrics, intended to help improving your team’s performance, OEE sets the standard. See if you can create a closed balance, where registration mistakes don’t effect the overall performance metric. And, more difficult but also even more valuable, design a standard improvement approach for each of your non-productive categories.
In my time as a Lean Manufacturing consultant, I’ve introduced OEE within numerous production companies, and it still is the standard for production lines. You don’t need a sophisticated manufacturing execution system (MES) for it (unless you’ve already got one, of course). When you know OEE and your production line, Excel and time registration forms are quite sufficient.
Introducing a similarly good metrics system in for instance service environments, that’s always an interesting puzzle!

Is the LEAN-hype in Financial Services over?

Super7 operations builds on the principles of Lean. The recent succes of Super7 operations within Financial Services raises the question: is the LEAN-hype in financial services over, or are companies waiting for the next big thing: super7 operations?

My conslusion, after researching recent publications, is: no. Although the banking crisis forces banks to re-think their business, their proposition and their priorities, LEAN, with it’s core elements of continuous improvement, waste reduction, process thinking and customer centricity are still key elements in the strategy of a large number of leading banks.
 
In today’s global business world, companies are relentlessly looking for ways to cut on waste and gain an edge in an increasingly competitive market. Lean manufacturing practices have been successfully adopted by manufacturing firms with remarkable positive results in streamlining production processes. Nevertheless, as recent trends show lean strategies are no longer the preserve of manufacturing companies alone; service companies and innovation firms have picked up these tenets in order to eliminate process waste, enhance customer value and spur continuous improvement.

 

Adoption of Lean Strategies in the Financial Industry 
Despite the numerous benefits that financial institutions can accrue if they adopt lean management strategies, in practice the uptake has been laggard. This can be largely attributed to the false perception held by most business leaders that lean concept, being process oriented, offers very few benefits for the service industry in general. Couple this with its Toyota Production System origins, and lean as a concept of production becomes ‘unattractive’ to most financial service industry leaders.

 On the other hand, there has been tremendous hype on how lean manufacturing strategies can transform and reform the financial services industry into one that is more efficient and customer oriented. This statement should be viewed from an observer point of view to appreciate the predicament financial institutions are currently facing. These include increased calls for customer-focused services, efficient processes that lead to cost cuts, and increased demand by shareholders for higher cost-benefit ratios in investments.

 Impact of Lean Management Strategies in the Financial Sectors.

 According to a recent research conducted by The Boston Consulting Group, banks and other financial institutions that successfully implement lean programs record 15% to 25% improvement in overall efficiency. The study concludes that despite market jitters by financial institutions regarding lean practices, with time as more players in the industry discover and profess the benefits of lean operations- for instance reduction in costs, improved efficiency and faster service turn around- wide scale adoption is inevitable.

 In order not to be left behind, banks, investment firms, credit unions and insurance firms are adopting lean practices. GE Capital, JP Morgan Chase, Citigroup, American Express, Sun Trust Banks and BNP Paribas are just a few of the financial institutions that have successfully implemented lean management strategies. Initially, lean practices were mostly deployed in call centers, customer delivery channels, and other back office operations. However, lean strategies are continuously moving up the value chain, and are showing remarkable application opportunities in trade processing and finance reporting sectors.

 Supporters of the adoption of lean strategies in the finance industry argue that manufacturing and finance industries are not that different, since both depend on processes. In regards to this, a lean concept is not industry specific but process oriented, allowing multi-sectorial adoption. Basically, lean entails identifying and eliminating waste in processes leading to cost cuts and performance excellence. Waste is defined as anything that doesn’t add value to the final product or service. The seven types of waste that the concept recognizes are: overproduction, transportation, waiting, defects/rework, over processing, inventory and unnecessary motion.

 Challenges of Adopting Lean Strategies in the Financial Industry

 Implementing lean principles in the financial industry is not an easy task. However, implementers should focus more on people rather than processes, and adopt a top down performance improvement approach which is more programmatic. Nevertheless, lean principles have significant limits, especially when they are implemented in the financial industry. For instance operational systems in the financial industry are less standardized as compared to other industries. Take for example; customer service expectations vary depending on education level and income, this makes it difficult to establish standardization across all the branches. Another challenge is that adopting lean concepts in a service industry results in the customer being the driver of the service process. This inevitably complicates matters and at times causes unnecessary tensions between employees and customers.

 As pointed out earlier, the lean agenda in the finance industry is market driven, leaving very little leeway for industry players to ignore. Without a doubt, lean strategies are moving up the value chain in the finance sector as institutions search to adopt next generation management strategies that lead to efficiency in work processes.

 References:

 http://hbr.org/2011/10/lean-knowledge-work/ar/1

 http://knowledge.wharton.upenn.edu/papers/download/101109_SS_Rethinking_Lean.pdf

 http://oper3210-lean-concepts-f08.wikispaces.com/Finance

 http://www.fsokx.com/ResearchData/IndustryInsightsDetail.aspx?id=97&CT=KC