Oregon Effective Government Presentation

Developing a Lean & Agile
Organization
September 29, 2009
Ron Wince
Guidon Performance Solutions, LLC

“Prosperity is a great teacher; adversity a greater.”
- William Hazlitt (English writer, 1778-1830)

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

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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The Roadmap

• Focus On Time
• Lean Processes
• Get People Involved
• Technology as an Enabler

If you don’t know where you are going….
any road will take you there

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Focus on Time

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The Common Element
Time: A lens to evaluate effectiveness and identify
improvement opportunities

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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Focusing on Time

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

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Getting to Core Value
Traditional Car Rental Process

Wait in line Take bus
From gate to From counter
at rental At counter to terminal
rental counter to bus
counter

Confirm
Locate
reservation
car
Review &
Hertz Gold sign
paperwork
Drive
From Take Credit card to exit
Drive
gate bus imprint
to exit
to bus to car Receive
rental
contract
Receive car
assignment
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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

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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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What others say about Lean – Simplicity
“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

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What others say about Lean – Effectiveness
“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

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Get People Engaged

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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

Productivity 20-30%

Defects 70-90%

Lead Time 40-70%

Work In Process 70-90%

In a few days … without spending major capital

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© 2008 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

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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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Key Take Aways
• 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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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!

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Questions?

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Oregon Effective Government Presentation

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