Oregon Effective Government Presentation

Developing a Lean & Agile

Organization September 29, 2009

Ron Wince

Guidon Performance Solutions, LLC

© 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

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“Prosperity is a great teacher; adversity a greater.”

- William Hazlitt (English writer, 1778-1830)

My aim for this session

To give you some new thoughts and ideas, and bring

practical experience, on how you might tackle your most

critical issues

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State Government Agencies are in a Perfect

Storm

• Many government agencies are

seeing a 2-10% revenue drop

• Pressure on staffing

– Pending retirements

– Increasing pension and benefits

costs

– Staff reductions driven by budget

shortfalls

• Increasing demand and expectations

– Social services demand increasing –

retirees & unemployed

– Higher visibility for government

performance

– Accountability for the way money is

spent

The sky is not falling – it is all about how we adapt to these

changes


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• Focus On Time

• Lean Processes

• Get People Involved

• Technology as an Enabler


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If you don’t know where you are going….

any road will take you there

The Roadmap


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Focus on Time

Time: A lens to evaluate effectiveness and identify improvement opportunities

The Common Element

Increased expectations for improved quality, cost and responsiveness -

simultaneously

“Today, it’s all about speed. Time-obsessed management may well be the primary battlefield in the pursuit of global competitiveness in the next ten years.” - Tom Peters


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The key is to reduce processes and effort to “core value”

Focusing on Time

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Getting to Core Value

Fromgate

to bus

Takebus

to car

Driveto exit

Hertz Gold

Traditional Car Rental Process

From gate torental counter

Wait in lineat rentalcounter

At counterFrom counter

to bus

Take busto terminal

Locatecar

Driveto exit

Confirm

reservation Review &

sign paperwork

Credit card

imprint Receive

rental contract

Receive car

assignment

What is Core Value

Speed is achieved by identifying and eliminating waste…in

processes, innovation and decision making

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Identifying and eliminating waste is the focus

for LEAN…

Waste is seen differently in LEAN…

– One of the stumbling blocks to

LEAN is understanding the concept

of waste.

– Traditionally waste has been viewed

as an object. It is very easy to

envision a barrel of scrap and

identify it as waste.

– In LEAN thinking the term waste

actually refers not to the physical

material but rather the relationship

of the resource to the end customer.

In LEAN, waste is measured in consumption of resources:

Time and Capital

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Waste in Government

Examples of process wastes are:

– Not collecting the data needed for information processing at all

steps during the initial contact.

– Collecting or reentering the same data at multiple steps.

– Disseminating data beyond those who require it (for example,

doing an unnecessarily large e-mail dissemination).

– Not providing for the convenient and efficient use of office

equipment.

– Inconsistent locations for data, files, and other items necessary

for particular processes.

– Excessive processing of documents.

– Inefficient use of electronic resources.


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Results of Focusing on Time & Waste

Source: Professor Goran Persson, Norwegian School of Management

Companies with end-to-end cycle time advantages of 25% – 50% over their competition in business processes:• Leverage time advantage to achieve growth 3X – 5X industry average• Attract the most profitable customers and enjoy price premiums of 20% or more

than their industry average

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Creating LEAN Processes

Improving Processes With LEAN

Your most powerful

competitive advantages are

where the work gets done

“The secret is in the dirt.”

-Ben Hogan

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Applying LEAN Principles

• Begin with the customer and look for waste

• Use consumption of time and capital as a common baseline

• Systems Thinking – End-to-end delivery of value

– Total system versus silos

• Flow - Eliminate Queues and Wait Time – Agile and responsive processes

– Standardize work to eliminate variation

• People who do the work know it best

“Nothing is so wasteful as doing with great

efficiency that which need not be done at all.”

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“Lean Is Inexpensive and Generates Solid Returns”

• Unlike other process improvement methodologies such as Six Sigma, Lean programs do not require significant up-front capital investments or certification.

• Lean concepts are easy to apply given that they are, as one member stated, “applied common sense.” In addition, institutions leveraging Lean techniques report immediate results of 20% to 40% cost reduction in 12 to 18 months.”

Corporate Executive Board, Operations Council™ 2006 Study on Lean Manufacturing for Financial Services

What others say about Lean – Simplicity

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“Lean Adopters Identify More Waste and Operate More Efficiently”

• Lean institutions identify two times more cost-reduction opportunity

than non-Lean adopters by seeking to eliminate non-value-added

activities

• Furthermore, Lean adopters operate more efficiently, maintaining

cost-efficiency ratios that are considerably lower than the industry

average”

Corporate Executive Board, Operations Council™ 2006 Study on Lean Manufacturing for Financial Services

What others say about Lean – Effectiveness

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Get People Engaged

It’s All About People

“In all the years and all the places I have worked this is the very first opportunity

I ve seen where the people who are on the floor and doing the job have the chance to

change things for the better.”

Pat Ramsay, Clerical Assistant, Kaizen team member

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Leading LEAN Improvements

A leader creates unwavering passion and excitement for a

vision…

that drives cultural transformation

across the enterprise…

resulting in sustained competitive advantage

and increased stakeholder value.


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Building Blocks to Engagement

Create a sense of urgency

Change the focus

Develop leaders

Communicate openly and often

Focus on your customers

Encourage and sustain innovation

Align through shared accountability –

vertically and horizontally

Allocate resources to ensure success

Promote continuous improvement

Maintain discipline and focus

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Your Role

Set the Tempo

• Set the business vision and strategies

• Create passion for leading the change

– Make it personal

• Set stretch goals that are radical and

uncomfortable (high wiggle factor)

• Define the critical few objectives

• Establish metrics and incentives

• Leverage Kaizen Breakthrough Events

for engaging associates in collaborative

problem solving

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Kaizen Breakthrough Events

• Collaborative, cross-functional

problem solving which promotes rapid implementation of

improvement ideas

• Improvements

– Small

– Rapid

– Utilize minimal resources

• Leaders and workers working

together to make improvements with low capital investments

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Rapid, Sustainable Results

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Productivity 20-30%

Defects 70-90%

Lead Time 40-70%

Work In Process 70-90%

In a few days … without spending major capital

© 2008 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

Client Examples

• An approval process for one customer reduced the

processing time to less than one day from 12 days - a 92

percent reduction.

• The City of Fort Wayne, IN reduced the time to fill a

pothole within 3 hours of it being reported.

• The City of Cincinnati reduced the recruiting time for a

police officer from 20 months by 35 percent.

• In another project the City of Cincinnati reduced the time

for the engineering department to submit and process a sewer easement plan from 324 days to less than 15.


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Stepping Stones for Leadership

• Communicate continuously

• Provide the resources

• Provide skills and knowledge

• Plan, Do, Check, Act: monitor and

countermeasure

– Daily, weekly, monthly, quarterly

reviews

• Personal, visible involvement

• Develop next level leadership

• Maintain focus and re-evaluate

priorities


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Technology

Role of Technology in LEAN

• Enable LEAN transformation – Transparency and accountability

– Communication and information flows

– Automation as a final step in LEAN transformation

– Creativity before capital

• Differentiator if developed and deployed faster than competition – Lean IT – Faster, better, cheaper

– Develop only the features that immediately add value – minimum marketable features

– Minimize wasted effort in developing technology

• Test driven development

• Tests are linked to value add expectations from the customer

– Perfect technology is a myth – why keep trying to create it

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• Time

– Powerful competitive force

– Often difficult to duplicate

• Apply LEAN principles to processes

– Reduce and eliminate waste

– Focus on value-adding processes

– Move from push to pull

• People are the linchpin

– Engagement and participation

– Leadership

• LEAN can transform government

– Faster, better, cheaper

– Differentiator to thrive in any economic climate


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Key Take Aways

Things You Can Do Tomorrow

• Choose 1 or 2 pilot processes

• “Walk” the process as if you were the customer – with the people who do

the process, support the process or lead the process

– Apply Outside-In thinking

– Measure the process in consumption of time and capital

– Identify the steps which don’t add value but consume resources or

capital – find the 7 wastes

– Eliminate as many as you can

– Streamline everything left

• Find the next process and keep going


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Lawn Chair Larry

“Lawn Chair” Larry Walker, 1982


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Leading Through

Turmoil

…use time as your focus

and LEAN as your foundation.

Thank you and good luck!

Questions?


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