6. How to get an entire organisation to focus on the external customer needs?

The key challenges to get customer focus are many, but three issues stand out in our respondents companies and organisations (in order of appearance):

1. Knowing what the customer wants.
2. Knowing who the customer is.
3. Getting customer focus in all parts of the organisation.

To know who your customer is and what it really wants, or better, what it needs is fundamental for Lean organisations but not so easy to acheive. As one respondent from a large healthcare organisation expressed it: "The customer concept is rather established in healthcare nowadays, even though the customer is mostly called patient. But it is not the patients perspective that is in focus, it is an internal opinion about what the customer needs that governs what the patient gets. To shift this mindset is a major challenge!".

Other survey participants talk about the issue with knowing your customer when you work in a large organisation and never meet the end customer. This is the case for all kind of back office and support functions like IT, Finance, HR and Procurement for example. In most cases the customer is defined as the internal customer who receives the service provided. But can you be sure that you are producing what the end customer wants just because you provides exactly the service that the internal customer demands ? My personal experience is that it is not the case. Some IT systems and monthly financial reports would never have been implemented should the full life cycle cost be transparent and transferred to the internal customer making the demand.

So, what are the main success factors for creating focus and attention on the end customer? The survey participants suggest many prerequisites and activities to achieve this.

Key success factors to get focus on the external customer.

Communication about the end customer and their need in all parts of an organisation is key to get focus. Many also suggest that Value Stream Mapping should be used to visualize for all employees how they create value and where they are in the value chain. Securing good (SMART) measures that are relevant for the end customer and visualise these for the whole organisation is also very important.

Seven respondents suggest that involving and cooperating more with the end customer is critical. Interesting enough that is only about half of the number of respondents who said that knowing what the end customer need is a major challenge.

It is not controversial to say that almost all companies and organisations can become more competitive or provide better service to their citizens if they increase their understanding of their customers need and stop doing things that don't contribute to satisfying that need. But fairly mature, customer centric companies still have large parts of their support functions not knowing which activities in a process create end custmer value or not. And the public sector, often put under pressure to give better service for less, don't always know who the customers are and even less what they want. How can you then get the entire organisaition focused on the end customer then?

Based on my personal experience as a Manager in back-office and support functions I think that a good start is often to visualize how much time is needed for each activity. When the cost becomes transparent it is easier to question non-value adding work and to allocate the cost to the right part of the organisation. If no Business Unit or Department wants to carry the production cost it probably means that the end customer doesn't want to pay for it either...

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5. How to get engaged employees committed to continuous improvement?

Engaged and committed employees is something that all leaders wish and strive for. However, in order to reach Operational Excellence and a culture of continuous improvement it is not enough to aim in that direction. You have to succeed. This is by many described as THE challenge to become Lean.

What happens otherwise is that the organisation initially get some good results, for example lead time, efficiency, cost and sometimes quality improvements. But the changes do not stick and the organisation never becomes flexible and able to adapt to changes. After some time things go back to the way it was before, the effects erodes and improvements stops. When this happens it can be very hard to "re-launch" a Lean initiative since employees associate it with something negative.

So, what can be done to avoid this pitfall? The question we asked was:
What are critical success factors to get engaged and committed employees who takes responsability and continuously strive to improve?


We were also curious to understand if there is a difference how to get engagement from top management and from associates and therefor asked the question twice for these groups.

1. For all employees, managers and associates, it is critical to get a success story to communicate internally. For top management a success story might be achieving tough goals regarding improvements in operational efficiency leading to cost savings or improved customer service for example. For the associates the same success story might be that the operational improvements were achieved while reducing over time, stress and firefighting activities.
2. Another critical activity is to train employees on all levels to increase the understanding of Lean. This training can be done internally or externally and should be customized to the organisation and the groups of employees depending on their needs.
   - Lean coordinators (Navigators) require the most advanced training since they will coach line managers and often become the future leaders.
   - Managers and key resources who are about to get started require some technical skills coupled with leadership training to understand how their leadership need to change.
   - All employees need some basic introduction to Lean to understand how the values, principles, ways of working and expected results are related.
3. Both managers and other employees need inspiration. For management this can be external speakers, consultants or peers from other companies. The managers in turn, need to inspire their associates and be able to explain why the new way of working is important.
4. It is absolutely essential for managers to communicate effectively and to make their teams and associates feel informed about and included in the Lean journey.
5. The employees have to feel empowered and responsible for their own work and continuous improvement. In order to achieve this managers have to ask questions instead of telling the employees what to do. 
6. The managers need to be present on the floor and go and see for themselves. They need to transform from managers who read reports and administer to leaders who coach and see all their associates and help them to grow.

To summarize this challenge; it is critical for management to get on board early, to learn  about Lean and assume responsibility and always practice what they preach. Or as John C.Maxwell said: "A leader is one who knows the way, goes the way, and shows the way". The associates need to find motivation, assume responsibility for their own actions, always do their best and make continuous improvements part of the daily job. 

4. Which roles are required to successfully implement Lean?

Many respondents mention the importance of having top management driving, or at least sponsoring, the Lean effort. However, a vast majority (over 80%) thinks that dedicated Lean resources are critical in order to get started and to quickly build knowledge and understanding of Lean and to get success stories. There are different names for what these roles are called, but in general two types of roles are mentioned many times:

• A central team sponsored by the CEO / DG or someone else in the executive management team. This central team should be a center of excellence with responsibility for methodology and best practice, training and communication plans among other things.
• Local Lean resources / improvement managers / change agents (full or part time) with competence about Lean and continuous improvement work who support and coach the line managers during implementation.

Some argue that the implementation can be driven by line people from the start, but at the same time say that it is hard to get enough focus and traction without dedicated resources.

"In a way it would be best if you did not have to assign dedicated resources and that the new way of working and acting is the responsibility of managers in the line organisation. But often Lean coaches are required to get things done and to constantly get focus on Lean. The risk with dedicated resources though, is that too much responsibility for the implementation is handed over to these resources."

A second part of this question was how these roles change with time as the organisation matures and the culture of continuous improvement sticks in the organisation. Here the answers differ more. Many think that it depends on the size of the organisation. Small companies can integrate Lean completely in the line organisation while large organisations need more central coordination and methodology development in a central function.

"It depends on the organisation, the culture and way of working how to proceed. You need to analyse that first. Our experience is that in the beginning we had dedicated resources working with a Lean project. With time Lean becomes "the way of working" in the organisation and we now have dedicated Lean leaders supporting the way of working and an organisation called Operational Excellence with different competences in methodology development, processes, training etc."

3. How to get a successful start on the Lean journey?

This question was devided into two sub-questions: What are the main challenges to get started? And what are the key successfactors to overcome these challenges?

According to the expert respondents the challenges are:

While employee resistance and lack of commitment can be seen as the same thing it does not change the fact that Poor understanding of Lean is by far the biggest concern when getting started. The proposed success factors to address these issues where, in order of appearance:

1. Get executive management and key middle managers on board first
2. Train the organisation and develop an understanding of what Lean is and how it can improve your business
3. Start with a pilot to get a success story
4. Think long term, let it take some time

There were also some suggestions on how to get top and middle management on board, if they aren't from start. The most frequent suggestion is to train top management and to get help from outside by independent advisors, consultants or top managers from other companies that are already successfully implementing Lean.

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2. What are the driving forces to implement Lean?

The second question we asked was why service organisations choose to implement Lean. There seem to be many and different reasons for this, and people in the same company often have different answers.

The survey results however, do not come as a surprise. The top three reasons, Quality, Cost and Customer Satisfaction are well known trademarks of Lean companies since many years.

Challenge 2: What are the driving forces to implement Lean?

The improved end-to-end process perspective also encompasses answers about improving cooperation in and outside the organisational boundaries. This is strong driving force for respondents both in Private and Public Sectors who see problems with departments working as silos and other government organisations optimising their own performance instead of maximising the output of the process.

One respondent lists many different driving forces and also that they can change with time:
"The purpose is to support our CEO in the vision to be ONE Company since we were and still are a company with different cultures, processes and infrastructure internally. // We started to implement a common way of working to increase efficiency and reduce cost. Today however, focus has shifted more towards increased Customer Satisfaction and improved processes end-to-end."

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1. What is Lean?

In order to understand how Lean should be implemented we must understand what Lean is and what it means in Service, Support and Administration. Hence, the first question we asked the experts was: What is Lean?

The answers to this questions where quite long and exhaustive, so we grouped the answers into seventeen categories. Some of these where only mentioned by one or two people, but almost 90% of the respondants refer to Lean as a way to relate, a philosophy or a culture of continuous improvement.

Answers to challenge 1: What is Lean?

Only a handful respondents refer to Lean as a toolbox or methodology. This contrast quite alot from how Lean is often perceived and described by people and organisations that are new to Lean. This is critical in order to successfully embark on a Lean journey and really become Lean.

A conclusion should be that the leaders and employees must develop an understanding of Lean and spend time to reflect about what it means to their industry, their organisation and themselves. This however, can not be done overnight. The insight about Lean must be developed throughout the implementation and never stop, it should be part of becoming a learning organisation.

Leaders and employees who want to understand the philosophy behind Lean can take trainings, attend seminars and read books, articles and blogs like this one about Lean Management. Other ways to learn is of course to get started, test the concept, evaluate the results and then implement on larger scale. In other words Plan, Do, Check and Act…

How to become Lean?

During late autumn 2010 Centigo carried out a major study in Sweden about Lean in the service sector. In the prestudy we defined 10 major challenges when implementing Lean. Challenges that often stops Lean programs from becoming successful. These challenges were:

1. What is Lean?
2. What are the driving forces to implement Lean?
3. Where and how to start an implementation?
4. Which roles and responsibilities are needed?
5. How is motivation among the employees created?
6. How to develop focus on the customer / citizen?
7. How to create flow (in service production)?
8. How to standardize ways of working?
9. How to create a culture of quality and continuous improvement?
10. How to measure the results?

We then asked 63 identified Lean practitioners with 3 to 20 years experience from implementing Lean about challenges and success factors for each of these 10 challenges. The industries and sectors represented in the survey were:

The study was carried out as an explorative survey with 90% open questions. The answers were analysed by grouping answers with similar meaning together and counting the frequency for different anwers. We have also done a very detailed analysis of each quote to draw the right conclusions.

Exactly one year after the project started the study is completed and we would like to share and discuss the findings with all Lean thinkers - expert, beginner or just curious people. In the coming weeks we will post the answers and key findings here.

Many thanks to Dan Spinelli Scala and Eric Andersson-Forsman, students from the Stockholm School of Economics, who did all the ground work.