By Jenny McTiernan, COO, ProTech
The article below is based on the content of a presentation Jenny gave highlighting the benefits of ProTech’s Lean3S to over 300 professionals from the ‘Not for Profit’ sector, attending the MemberWise (the leading free Membership and Association Professional Network) Membership Excellence Conference in April of this year.
For over 20 years ProTech has been supporting clients in the ‘Not for Profit’ (NFP) sector by enabling them to transform their people, processes and technology capability by deploying its Lean3S methodology.
Lean3S is a methodology ProTech has developed that brings together our change management experience with our knowledge of the NFP sector and blends this with proven business transformation methods based on Lean and Systems Thinking and Neuro-Linguistic Programming (NLP) techniques. Using this methodology, NFP’s can transform their organisation by reducing operating costs, transforming member and staff satisfaction and driving up revenue.
An important element of Lean Systems Thinking is how it enables organisations to achieve the elusive ‘3 Wins’: how to generate value for the organisation, its customers and its staff and I will discuss this a little later.
The 2016 MemberWise Harnessing the Web Report (published in February 2016) identified that the expectations around member value are rising and hence customer perception of the improvements, already made by NFP’s, may have been cancelled out. So how are NFPs to avoid this situation of running just to stand still? If money is no object then you can just keep spending more and more. The reality is however, that the sector and doubtless organisations across other sectors, do not generally have limitless funds available to ensure they can keep up with increasing customer expectations and demands.
I believe that to respond to this challenge, the NFP sector can lead the way in demonstrating to organisations within other sectors the need to transform the way they think.
Lean Systems Thinking helps NFP’s to change the way they think about the customer, and hand in hand with this, to change the way that they work and the way people are managed. It is actually about culture change, transforming the organisation by engaging its people in a new way of thinking and working.
Many of you reading this will already have heard of the term ‘Lean’ or even have used it within your organisation. For those of you who may be new to Lean as a concept, it was developed as a continuous improvement methodology within manufacturing. The term ‘Lean’ was first used to describe Toyota Cars world famous ‘just in time’ (JIT) manufacturing approach in a book entitled ‘The Machine that Changed the World’ written in 1990. Toyota itself describe this Lean method as the TPS – the Toyota Production System.
“Introducing the Toyota Production System can be a trying experience. The system exposes waste mercilessly. People must be prepared to abandon familiar and longstanding practices. Top management must take part directly in clearing away obstacles and in implementing and maintaining the system. Middle-level managers, meanwhile, must provide worksite leadership in putting the concepts of the Toyota Production System into practice”.
The Toyota Production System– Operations Management Consulting Division
Toyota Motor Corporation 1998
Statistician and Mathematician Dr. W Edwards Deming arguably laid the foundations for the TPS. He is recognised through his work with Ohno and Shingo at Toyota and other Japanese businesses in the post World War II period to have made a significant contribution to Japan’s reputation for innovative, high-quality products, and for its economic power. Deming is regarded as having had more impact on Japanese manufacturing and business than any individual not of Japanese heritage.
In the TPS, there is a second fundamental principle that does not feature in typical Lean projects – Respect for People. It is this which has enabled Toyota to embed and spread its continuous improvement approach; to make it part of the organisation’s ‘DNA’.
Respect for People comprises of engaging with all stakeholders, building trust and developing individuals through Team Based Problem Solving. Respect for People goes to the very heart of Dr. Deming’s management philosophy. Deming believed that all businesses need to see themselves as ‘Systems’ and defined a system as ‘a network of interdependent components that work together to try to accomplish the aim of the system. The aim for any system should be that everybody gains, not one part of the system at the expense of any other.” I refer to this as ‘Systems Thinking’.
It is Dr Deming’s teachings on ‘Systems Thinking’ that ProTech has been inspired by in developing Lean3S. This is because Deming understood that to achieve transformation and to sustain this transformation, it is essential to engage peoples’ hearts as well as their minds.
Lean principles have been applied with varying degrees of success in a variety of sectors in the UK, from retail operations such as Tesco’s to healthcare, financial services and local government.
However many of these organisations have found they have one thing in common – the problem of sustainability.
Lean practitioners say that the most common reason for failure of Lean projects is ‘middle management resistance’. We should not however seek to blame managers for their resistance to change. As Deming told us “it’s not the people that are the problem, it’s the ‘System’” and in particular, what he referred to as ‘System Conditions’. These are conditions which influence how a person thinks, works and behaves within an organisation. Examples of ‘System Conditions’ may include:
- Staff focused on hitting targets rather than delivering what matters to customers.
- Inconsistent behaviours and working practises across the organisation and even within teams.
- IT systems that are not designed to aid the worker in completing a seamless process.
Research shows that managers have a 70% impact on the performance of their staff and this in turn has a 30% impact on bottom line performance. It makes sense therefore that engaging with and developing managers is key to achieving sustainable transformation.
As I have already said, we should hardly expect managers not to resist change when they believe that the way in which they have always managed their teams is the ‘right way’. Asking managers to ‘get it’ simply by imposing new ways of working is hardly likely to motivate them to join you along the Lean Systems Thinking road, let alone to encourage and support the people in their teams to do the same – after all, no one wants to think that they are wrong.
As the Philosopher Albert Schweitzer said: “Example is not the main thing in influencing others, it’s the only thing.” Lean Systems Thinking is designed to provide a method through which managers and staff can work together to transform the organisation. ProTech achieves this by working with them to transform the way they think using NLP techniques – challenging embedded beliefs and re-defining the role of manager as ‘coach’. This change in thinking results in the transformation of culture, capability and methods.
It isn’t hard to imagine that life as a manager across all business sectors is going to get tougher over the next few years. Perhaps the most worrying trend from an NFP perspective is due to rising member expectations, that see no signs of reducing, which in fact are likely to increase still further in the future, is the need for membership organisations to keep running just to stand still!
According to the MemberWise Report and consistent with our observations, many NFP’s are also struggling with a broad range of operational challenges, some of which are highlighted here and include technology and process issues as well as people issues around staffing and skills:
Given the complexity of these challenges and the real risk that in meeting customer expectations operating costs could spiral out of control, it is plain that improving the efficiency of your organisation – doing more for customers with less or the same amount of resource – is an absolute pre-requisite.
The question is how?
You may already be experiencing pressure to do more and more for your customers at the same time as absorbing the associated costs. You have probably already made the easier efficiency gains by tackling the low hanging fruit. It is going to be difficult to innovate to do more with less. Good old internal restructuring will not cut it in achieving the required business transformation. The temptation has traditionally been to use technology to solve the efficiency problem but given that the cost to the UK taxpayer of failed government IT projects reached £100m in a single year (2013-14), it is clear that technology alone is not the answer.
How do we get more efficient is no longer the whole story. If the organisation is to thrive over the long term and not just survive in the short term, it must think about how it can overcome the challenge of achieving the elusive ‘3 Wins’ namely:
- How to create only value for customers and be as efficient as possible?
- How to stimulate, retain and attract the best people?
- How to create a successful organisation with a ‘culture’ of improvement so that getting better at what it does is a virtuous circle that never ends?
Undoubtedly the third ‘Win’ is the hardest to achieve.
The answer is to deploy Lean Systems Thinking to turn the way that change programmes are historically delivered ‘on its head’! The norm is to deliver change programmes from the ‘top down’, but this approach simply will not work when meeting the challenge of achieving the 3 Wins.
Organisations need to harness the time and talents at every single level of the organisation, and those of its partners, suppliers and customers.
The key thing to remember is that your employees nearly always share customers’ frustrations and know the answer as to how to make things more efficient and improve the service delivered. “Why don’t they then?” is a reasonable question. The answer lies in three truths:
- Beliefs – that change is always done ‘top down’ so employees believe they are not allowed to make changes – even if they are for the better.
- Behaviour – we treat our people as if they do not know the answers to key customer issues.
- Capability – employees know what needs to be done but often don’t have a method for making it happen, so when they do make change it may not be fully thought through, tested and measured, leading to problems which reinforce 1 and 2 above.
We would not expect improvement in science or technology without investing in experiments and testing a hypothesis, observing the results to determine whether to proceed with the change. Yet in business, we often make reactive changes based on minimal or unreliable data, which in itself leads to sub optimisation.
Instead, productivity improvements should be trialled and measured and only the most effective changes should be fully adopted. The answer lies in learning and teaching others to see your organisation as a System. Dr. Deming realised that a system is complex. It is made up of interrelated components of people and processes with a clearly defined, shared destination or goal. He said that everyone must share a distinct understanding and commitment to the aim or purpose of the system. Applying ‘Systems Thinking’ helps to accomplish this and will enable organisations across all sectors to achieve the elusive 3 Wins – happy staff, happy customers and a successful organisation.
Lean Systems Thinking offers NFP’s a systemic approach to achieving business transformation. ProTech supports clients in adopting this methodology through a structured programme of training and coaching, supported by a range of tools and techniques that consist of three continuous cycles:
- Connect – learning to see your organisation as a ‘system’
- Reflect – team based problem solving and designing ‘perfect’
- Progress – building great people, processes and performance
Lean Systems Thinking makes achieving the elusive 3 Wins doable!
For more info visit ProTech (www.protech.co.uk)