Katrine Graae Lauritzen of Ramboll Oil & Gas a Danish engineering firm, explores how the company has embraced lean and enacted its seven golden rules to a successful lean transformation.
“Let’s start by making one thing clear: lean is not rocket science, lean is common sense laid out in a structured way.” The words belong to Anders Rødgaard Knudsen, corporate director of Ramboll Oil & Gas, and responsible for implementing lean in the organisation. He continues: “The lean principles are however an excellent way to enable organisations to be more efficient, and regardless which type of projects the company bases its business on, lean as a method makes a lot of sense.”
Typically, lean has been adopted in manufacturing companies, where different materials are led through a number of processes which in the end result in a finished product or component, that can be sold to end-users or other manufacturers.
In knowledge-based organisations, no physical products are produced, and no flow of materials happens. Rather these types of companies produce answers to questions, they sell knowledge. This does not mean that knowledge-based organisations cannot learn from lean, and it most certainly does not mean that they cannot benefit from the lean philosophy.
In an effort to become stronger and leaner, Ramboll Oil & Gas, an oil and gas engineering design consultancy within the Ramboll Group, has adopted the main principles from lean, and translated them to fit the company’s production of knowledge and knowhow. What Ramboll wanted to achieve with this transition was to find a structured way to become clever faster and learn all about the potential pitfalls in a project as early in the process as possible, in order to be able to prevent and avoid delays and misunderstandings.
High risk and extreme complexity – lean in the oil and gas industry
The world of oil and gas is very complex and many projects are extremely large. This means that there is great risk involved, both in terms of economic risk and in terms of risk of personnel and environmental danger. Further to this, a lot of people are involved in designing an offshore facility, and where many people are involved at the same time, the risk of human error arises.
Engineers live a life with constant interdependent deadlines. Because of the nature and size of the projects they deliver, complete control over interfaces is paramount.
When Ramboll started going lean 10 years ago, the company was growing rapidly, and to ensure that the quality of work remained at the same high level, the management saw the potential in adopting the lean philosophy. Projects were getting bigger and involved more and more people and the need for finding a solution that could help break down each project into smaller bits and make the entire process of the highly complex projects transparent was becoming imminent. By starting to work lean, the company would make sure that all team members understood how their part contributed to the project in its entirety.
To start the process, the company looked at the traditional lean principles and converted them into seven golden rules, which can be applied to any project, big or small, internal or external:
1. Understand what really happens
The purpose is to uncover the truth by being actively present where opinions are voiced. This means going out into the organisation to talk to employees and meet with clients to understand their points of view and their needs.
2. Learn before you decide
In the beginning of a project, understanding is limited. Therefore, front loading is used as a tool to increase the level of knowledge as early as possible. Clients are invited to take part in the front loading session, which gives them a sense of ownership of the process, creates transparency and strengthens the relationship with the clients.
3. Share knowledge
In order to continuously share knowledge of all parts of the project, the engineers convene around a visual planning board to actively go over all deliverables and ensure that no deadlines are missed due to lack of planning. The team’s understanding of all members’ deliverables and the resulting interdependencies is vital to make sure that nothing is missed.
4. Development can go on forever
Many things that are done in projects can continue forever, if a specific deadline is not set. Therefore, all activities are time boxed, and all planning is based on milestones. This increases the ownership of tasks and ensures progress.
5. Do one thing at a time – fast
To increase efficiency, the engineers focus on doing one thing at a time. This results in the engineers spending less time finding the best solutions. As an added bonus, it also results in more content employees, by allowing them to focus on and finalise one task at a time.
6. Establish a heartbeat that everybody knows
Like a human being, a company should have a heartbeat that is known to everyone in the organisation. It could be a planning meeting Monday morning and a department meeting Friday morning. The result of a shared organisational rhythm is everybody knows when decisions are taken and understand the decision making process better.
7. Speak the language of the user and learn
This rule focuses on learning and innovation. Creating a solution that meets and exceeds the client’s expectations is only possible when continuously focusing on listening to and understanding the needs of the client. Discussing the solution with the client on a regular basis in order to be able to adjust along the way is key.
Overriding the seven golden rules is the PDCA circle, which ensures that the project is transparent and all project team members know the processes and understand the interdependencies in the project. It is important that all involved have an understanding of the benefits that come from actively adhering to all the golden rules. The whole of the lean approach is greater than the sum of its parts.
Knudsen explains: “The visual plan in itself is nothing. What adds the value is the process around the visual planning, where all deliverables and deadlines are structured and the team members openly discuss progress.”
Better projects – delivered on time
After implementing the seven golden rules of lean in Ramboll, the company has experienced that project management has become more structured and the projects have become more transparent. To align work processes, the Ramboll Group with its 11,000 employees, has developed a common project management model, which is used in all its business units and includes elements and tools which are based on lean.
By involving the clients in some of the processes (e.g. front loading), and continuously matching expectations with the clients, the company has gained a much deeper understanding of each client and developed a more intimate relationship with them.
As a result of the increased project transparency, the employees in Ramboll have a higher job satisfaction, because of the greater understanding of the correlation between the individual parts of a project.
Compared to the time before the company started adopting its own version of the lean principles, more projects are delivered on time. On top of that, the clients are more involved in the development of the solution, and this means the clients are more satisfied with the result and have a better understanding of the entire process from idea through development to final delivery.
A never-ending story
The very nature of lean is to focus on continuous improvements and as such, the story never ends. It is simply not possible to tick off “implementation of lean” as done, and then forget all about it. Lean has to be an integral part of a company’s processes and the employees’ mind-set, and therefore, Knudsen stresses Ramboll is still in the process: “As a learning organisation, we can always become better, and we continue to put effort into perfecting our approach to lean. We’ve come a long way with regards to structure and transparency, but we’re not done yet.”
Taking lean further
Many industries work with lean as a tool for continuous improvement whether it is about a better flow in the value stream, cost-efficiency or a more aligned policy deployment linking key performance indicators to different leadership levels. But lean as a concept also continues to develop and improve.
Tobias Dam Hede, managing consultant, Ramboll Management Consulting, a business unit within the Ramboll Group, explains that lean itself has come to a turning point: “We have found lean needs to enter the next level of maturity by the help of an old and well known methodology: Coaching.”
Lean coaching is not new to lean experts, but through its management consulting practice, the company has experienced that clients who have known and used lean for decades are not familiar with the coupling of these two concepts.
It is therefore relevant to point out three areas where lean coaching could benefit lean organisations:
- Lean coaching is an effective tool to help collaboration across functional boundaries: lean specialists are often organised in a supply chain of support or in a kind of staff function. This means their benefit to the organisation is often challenged with the problem of cross references in a matrix organisation, where competing organisational logics of performance prevent the line manager and the lean agent from working on the same page or within the same sense of urgency. The lean agent typically has an informal authority from top management, but the line or plant manager is unwilling to cooperate. Ramboll discovered ownership of the lean project in the line increased dramatically with the help of coaching by the lean specialists.
- Lean coaching transforms the logic of perfection into a practice of continuous learning: in most lean organisations Ramboll has worked with, there is a strong drive to look for problems and waste as opportunities for improvement. This is in the very nature of lean. The problem is that it requires a relatively mature organisation to learn from problems and flaws without being defensive and confrontational. The result is a mediocre performance instead of excellence. Lean coaching is the perfect method to cultivate continuous improvement without producing anxiety to fail.
- Lean coaching is time efficient: lean organisations know different kinds of performance appraisals are part of a culture of high performance. In one of the leading lean industries in Denmark, Ramboll has measured the time consumption of team leaders who should engage in different interview and dialogue settings with employees. The time amounted to between 30-40% of the total time – not including meetings and visual management reviews. With the help of lean coaching, the team leaders learnt to move away from an exhausting amount of performance interviews and gain the right momentum of interaction with their employees. Lean coaching makes a greater impact on performance with less time and resources spent.
Learning to coach lean
As is the case with lean in general there is a mind-set to adopt and there is a series of techniques to learn. The first takes much longer than the latter. Based on the PDCA cycle approach to problem solving, the lean coaching method is defined by eight steps in addition to the PDCA steps:
Hede says: “Lean coaching is an important pillar. It is the architecture of learning. We have now trained hundreds of managers and lean specialists in lean coaching, and our experience is that the managers and the organisations alike gain a lot of value from adopting the new approach”.
Lean and learning
Lean, and the different approaches and takes on lean are in general value-adding for any company. Whether it is a product producing company or a knowledge-based organisation, lean can help structure the way the employees work together and ensure that processes are transparent.
The companies, the employees and the clients all benefit from the adoption of lean.
There is, however, never a time when lean adoption is done – continuous perfection and improvement lies in the very nature of the lean concept, and as such, lean organisations will and must continue to learn.