Five Reasons Why Lean Is So Hard To Implement In Service Organizations

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I spent several years in the military trying to convince leaders to use Lean principles to improve their operations. But even when presented with an action plan based on the Value Stream Analysis (VSA) of a costly process, the action plan was rarely implemented by the very organizational leaders who requested the analysis in the first place.

There always seemed to be resistance to using Lean tools that could have led to some very big improvements. At first, I couldn’t figure out why. But after a while, I started noticing certain patterns in the language of reluctant leaders that pointed to some key underlying causes for resistance.

These causes seemed to boil down to the following:

1. Lack of Understanding of Lean Language

2. “We Are Different Because We Are Not A Manufacturing Organization”

3. Organizational Stove-Pipes

4. The True Cost Of Wasteful Processes Not Measured

5. Mobility Of Leadership Personnel

Lean principles can help organizations improve profitability through improved cycle times, productivity and quality, by removing waste from work processes and systems. The resulting reduction in waste also leads to reductions in operating costs. But Lean was born in the manufacturing world. So some of the core concepts pertain to assembly-line set-ups and still use that language (work-in-process inventory, flow cells, kanban-based pull systems, etc.).

Even so, there are many examples of service companies successfully using Lean tools. One of the largest and well known service companies in the world – Amazon.com – utilizes lean principles. Lean successes are also common in health care, airline operations, software development, and restaurants. Still, adoption of lean principles in service organizations is difficult. Why should this be?

Lack of Understanding of Lean Language

Even though there is a lot of manufacturing lingo in the Lean lexicon, that wasn’t the reason that leaders seemed to misunderstand some of the language of Lean. One problem seemed to be the term “lean” itself! More than one commander dismissed the entire idea of using the tools because they equated Lean with lack of resources – being forced to do more with less. One commander told me that Lean led to reduced capability. What? I was stunned when I heard that one. How could anyone think this? I tried to explain that the opposite was true – that these tools would yield greater capability. But I was not the one who could change deeply held beliefs like this. And it became clear over time that many leaders felt the same. In order to fix something like that, there needs to be better top-down commitment and communication.

Another common misunderstanding was to confuse reduced cycle (or lead) times as faster times – achieved by working faster. This was another eye-opener for me. I mean, do we not often use these terms interchangeably in every day life? If something is accomplished in less time, it is accomplished faster, no? NO! That’s not the goal in Lean, which seeks to improve these times by removing wasteful activities. This often actually allows workers to move more slowly!

Not only is it crucial to understand that reduced processing time is NOT the same as faster, but that misunderstanding alone can stop Lean in its tracks. To those in charge of maintenance operations, for instance, doing things faster can often equate with doing them with less care, which can lead to safety concerns. Again, the only way to fix this is through better leadership education coming from the top.

“We Are Different Because We Are Not A Manufacturing Organization”

That statement was so common that it became the mantra of anyone who simply didn’t want to do Lean. It was as though saying “we’re different from Toyota” was excuse enough to dismiss the entire idea of Lean. There are enough organizations succeeding with Lean that this argument should never see the light of day. And yet it persists. Again, a firm and visible commitment from the top is needed to dispel this notion.

Organizational Stove-Pipes

Services are not as visible as parts on an assembly line. And that can make it inherently more difficult to grasp and apply Lean tools. In addition to that, however, is the strong (one might say “impenetrable”) focus on vertical organizational boundaries. The problem is that service processes inevitably flow horizontally from one “stove-pipe” to the next. And while it isn’t a stretch to convince leaders that operations under their control are their responsibility, it is next to impossible to find someone willing to accept ownership of what happens in between the organizational boundaries.

But guess where most of the waste is? Yup. It’s in between organizations. It’s where a report or a part is waiting to be moved somewhere else. It’s in the time spent in transit, and the time spent in line waiting to be processed at the receiving organization (in-boxes, receiving bays, etc.). All of that waste seems to fall between the cracks. And with no ownership, there is no improvement.

The fix? Build stronger identification of the processes used to create value, and find a way to assign ownership to that process, regardless of how many organizational boundaries it crosses. This is extremely hard to do when the entire culture is based on vertical organizations. As with all the other fixes, this falls to top leadership.

The True Cost Of Wasteful Processes Is Not Measured

This may be more of a problem in government organizations than in commercial ones. Rewards are theoretically based on outcomes, not on costs. In fact, especially when it comes to manpower, cost is rarely known. And the effects of these costs are not felt as pain to the leadership. At least in the commercial world, a company’s success is ultimately measured in profit and loss. Adding personnel increases cost. Overtime increases cost. These are not theoretical numbers. These are dollars and cents being purposely spent. And that will all be subtracted from the bottom line. The wasting of resources should hurt.

But when manpower is assigned in a government organization like the military, or in any organization not measuring manpower cost, there is no increased pain if a commander decides to make his people work longer shifts or weekends. Manpower seems like a free resource! Nobody measures this and nobody is held accountable. So where is the incentive to reduce these costs if there is no hit to the bottom line? The answer is – there isn’t any. Peter Drucker famously said “what gets measured gets done.” So the fix is to measure efficiency – such as in the use (or misuse) of manpower – as well as outcomes. Only then will leaders be given an incentive to make work more efficient.

But worse even than a lack of measurement in this area is rewarding the exact opposite of the behavior you desire. If a supervisor improves the efficiency of work such that fewer people are required to accomplish that work, and as a “reward” for this improvement, his budget for manpower is decreased accordingly, where is the incentive to become more efficient? Not only is there no incentive, but a supervisor in that case is actually rewarded for continuing to be inefficient. Again, the fix is simply to change the reward structure to drive the right kinds of behavior. And who can change reward structures based on budgets? Why yes. That would be top leadership again.

Mobility of Leadership Personnel

When leaders are moved into a different organization every 2-3 years, it is difficult for them to invest in anything long-term for any one of those organizations. This mobility of personnel is common in the military and other government organizations. But large corporations are also often given to a similar rapid turnover in leadership.

If leaders can only be held responsible for results that occur in a 2 or 3 year period, where is the incentive to invest in any type of initiative that may not bear the best fruit until year 3 or 4? You know the answer. And this lack of incentive is made worse by the sure and certain knowledge that any programs put in place will likely be undone by the one who comes after. Again, the system runs counter to the implementation of Lean principles. And the fix is for top leadership to provide such a strong culture of Lean operations, that the systems survive the rotating personnel.

So there is my list of the five biggest barriers to Lean implementation in a service organization. My direct experience is with the military, but these problems exist in many other types of service organizations as well. Interestingly (but perhaps not surprisingly), the solutions to these problems lie with top leadership. If they are not committed to Lean principles, and seen to be so, then it will likely remain difficult or impossible for any organization to implement any kind of Lean initiatives.

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Source by Ken Theriot

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