Lean Transformation Framework in VUCA

Great things are done by a series of small things brought together.

Vincent Van Gogh.

Lean is the chief process management strategy for professional services organizations. Lean thinking & practice are all about challenging us to consider deeply how we can improve the situation, improve the organization, or improve ourselves. It is essential to note that Lean is not a reserved area for manufacturing or production companies. Lean transformation is the process of initiating changes in an organization to amplify the value flow generated for the consumer.

Lean is applied virtually in any industry. Lean is a powerful methodology that enables managers & employees to shift their mindset and helps companies to keep their business feasible by creating a competitive advantage. Today, in a progressively complex & dynamic world, where companies struggle to maintain competitive advantage, Lean is more important than ever.

Lean transformation is the process of initiating changes in an organization to amplify the value flow generated for the consumer. As a result, wasteful activities are identified, removed, or optimized. This is in contradiction to the faith that Lean is all about removing waste. Lean produces more customer value & the removal of waste is just a consequence. 

Lean Transformation Framework

John Shook who was the CEO of LEI (Lean Enterprise Institute) was one of the first people who brought Lean from Toyota’s factories to the western world. He described the framework as a house built by five core elements:

1. Situational Approach
2. Process Improvement
3. Capability Development
4. Responsible Leadership
5. Basic Thinking, Assumptions & Mindset 

The reason for beginning the Lean transformation should be clear to the management.  Then John Shook goes further & defines 5 questions that are much more natural to grasp. Each of the questions corresponds to one of the Lean Framework dimensions above:

1. What is the purpose of the change & what problem are we trying to solve (Situational Approach)?
2. How are we improving the actual work? (Process Improvement)
3. How are we building capability? (Capability Development)
4. What leadership behaviors & management systems are required to support this new way of working? (Responsible Leadership, Management System)
5. What basic thinking, assumptions, or mindset contain the existing culture and are driving this transformation?

If you can answer these questions, then you could be successful with the execution of the Lean Transformation Framework inside your company. But if an organization fails to address even one of the questions, and with a sense of how each relates to the others, the transformation will struggle to sustain its momentum then don’t attempt changing your organization yet.

Also See- What is Digital Transformation in VUCA World?

Answering the Lean Transformation Framework Questions

1. What Problem are we Trying to Solve?

Lean transformation roadmap generally occurs as a top-down change, meaning that it’s initiated by the upper management of a company. The problems that are being targeted are the ones that senior leaders deal with:

• Increasing profit
• Improving quality
• Improving productivity
• Decreasing delivery times
• Eliminating project delays
• Increasing customer satisfaction
• Managing complexity

All the challenging issues need to be documented & presented to all interested parties during the rollout. To ensure all employees & leaders know what the real objective of the transformation is, maintain a living document with all the details. Another warning is to check out so many goals & various problems to solve at the same time. The fewer the better.

Be clear who the owners of the lean transformation are. You will need to have approval from the board, but who on the board is the sponsor? Is it you? Is it your boss? Who is going to hold up when things don’t go according to plan. If nobody is willing to stand with their name behind the Lean transformation, chances of success go down.

Summing up with a single word, it should be transparent. Create as much transparency into the goals & invite everyone to participate to the best of their abilities. Don’t take it as a one-off step. This is a living dimension of the Lean transformation framework and has to be checked consistently. You need to regularly ask yourselves whether the problem you started solving is still worth solving. You have to be nimble.

2. How are we Improving the Actual Work?

Answering this question should offer a list of process improvements to be made. You should not specify how to improve their process, but rather give a general outline of the processes that have to be improved. It means that the solid process improvements being executed have to support the bigger goal. Improving things for the reason of improving is not what you should be afterward.

Leader’s Tip
To meet the challenges of a VUCA environment, cultivate a workplace that values creativity, adaptability, and continual learning.

The standard for success should also be listed, as the people need to know what is acceptable & whatnot. As shown in the above picture, process improvement is one of the pillars of the Lean transformation model which supports the roof & represents the problem being solved. Process Improvement is done by Deming’s cycle PDCA which means “Plan Do Check Act”.

• Plan– Establish objectives & processes to deliver the desired results. Needs a clear problem statement, data collection, observation & data analysis to identify root causes. A plan is made to test the ideas to check out if they will improve the process.
• Do- Implements the plan developed from the previous step. Small changes are generally tested, and data is collected to measure the effectiveness of the change.
• Check– Now, data & results collected from the previous phase are assessed. Data is compared to the expected outcomes to see any notable changes have occurred.
• Act– Also known as “Adjust”. The process is improved in the Act phase. Track records from the “do” & “check” phases help find issues with the process. Planning for the next cycle can move with a better guideline.

3. How are we Building Capability?

It refers to developing people. Developing people is the second pillar of the Lean Framework because we can’t improve our organization unless we help our people improve. It’s the people who have to run several experiments & consistently improve the processes all the time. If your people haven’t been trained to think Lean, no matter what you try – your company won’t get Lean by itself.

Commonly employees get all the essential training, while their managers don’t. This creates a communication void & results are disappointing. Do this differently, begin the learning process from the management & only then go to employees. The best results would be attained when all the managers train their people. This is how Toyota did it & continues to do it. It’s the managers who train their people & not any third-party company that has no real experience inside the business.

This builds a special relationship between the manager & employees and contributes to the long-term commitment of the people to the company. To address this dimension of the Lean transformation, make people development a strategic item that the board looks into. The better you become at generating, sharing & reusing knowledge, the faster your company will develop.

4. What Leadership Behaviors & Management Systems are required to Support this New Way of Working?

Leadership plays a key role in executing a Lean transformation. There are some key leadership roles in implementing lean transformation. That’s why it is at the center of the Lean Transformation house (image). It interacts with the whole system to make it better, and in return, the system protects it from the cold outside. The management of an organization is the stick that makes it all work. 

Everyone should be a leader, In a Lean company.

Heroes are only found in movies, not in the real world that saves the day. It’s the constancy & the determination of everyone that matters. Just learn as fast as you can & others will follow you. The most essential trait of a leader is leading by example. Lean Leaders must not be victims of their egos & have to accept failure. If they push their opinion onto others, they will be a misfit for the adjustable culture of consistent improvement.

The more experienced a Lean thinker is, the more they can help with mentoring the millennial generation. But the hidden message is that a leader should help their teams become independent & self-organized. A true Lean leader should teach their people to think analytically and put opinions to evaluation.

Above all, the leader in a Lean organization must be the one that everyone looks up to & tries to be one. The true leader creates the culture of the company & has the guts to change it, if necessary.

5. What Basic Thinking & Mindset are Driving this Transformation?

Speaking of culture, we come to the most essential & most condemning part of the Lean transformation framework. It’s named “Basic thinking, Mindset” & Set of assumptions” but this all means one thing – culture. Culture is the prime asset of a company.

Without getting ready to change culture, there’s no point in trying to attempt a Lean transformation. Sooner or later, it will fail. So, begin by evaluating the existing culture. After the evaluation is done, the desired future state has to be identified. A practical way to carry these changes is “company values”. The corporate values represent the company culture & changing the values should in the end lead to changing the complete culture. Changing values must begin from the leadership & has to be revealed through real behavior change.

Leader’s Tip
Engage staff members at all levels, give them support and training, and give them the freedom to lead Lean transformation initiatives.

Check out the Video

Implementation Steps for Lean Transformation

Considering the Lean transformation framework is only the first step on the way toward changing your organization. Beginning on a Lean transformation process needs proper planning & responsible implementation. Here are 8 typical stages of a lean transformation:

1. Assessment– The first step is to assess the basic problems & to find the possible solutions. At this stage, you need to choose wisely whether to begin small & spread Lean in time or go with a hit & start your transformation with large-scale major changes.
2. Initiation– In the initiation phase, get the C-suite on board with the transformation & secure funding for the essential training & tools. You need to win over a person with undoubted authority who would be ready to stand by the transformation even if things don’t go according to the initial plan.
3. Training & Tooling– After you’ve got the budget, invest a considerable amount of these funds in training for the management staff. Find a consultant to work with you & advise you on the way to transforming your company. That person will be able to provide practical know-how about the tools you need & coach you in implementing Lean.
4. Flow across a Single Service– Service in a business organization is a function that receives a certain input, manipulates it & produces a particular output. Visualizing the steps needed to produce the output is essential for getting the most of Lean. During this stage, you should introduce the concept of flow & map the process of your teams, to begin with, continuous improvement.
5. Analysis & Optimization– After a few months, you should have enough data to analyze your workflow & see more space for improvement. At this stage of the Lean transformation, you should generate unified key performance indicators for your process & get the whole company on board with them.
6. Flow across Several Connected Services– By the time you reach the 6th stage of your Lean transformation, your company will be prepared to expand value stream mapping across the company from product management to direct value delivery to your customer.
7. Establishing Governing Methods- When you’ve got a complete value stream in place, you will need a united way to manage it. To manage your company’s value stream efficiently, you need to select a range of united metrics to track like no of tasks in progress, no. of finished work items for a preset time frame, etc.
8. Consistently Improving Processes & Services– Ultimately, to finish your Lean transformation, you require to adopt consistent improvement as part of your company culture. Every person needs to take it to heart & constantly look for ways to improve both the process and their capacities.

Conclusion

Lean Transformation steps allows an organization to make some particular basic transitions from surviving to thriving in the market. It removes the organizational structures, practices, and thinking that hinder the efficient delivery of value. It maximizes consumer’s value along with minimizing the waste of a procedure.

“4 Best Lean Principles Books”

Global Reader’s Click Below:

1. A Factory of One: Applying Lean Principles to Banish Waste and Improve Your Personal Performance
2. The 12 Principles of Manufacturing Excellence: A Lean Leader’s Guide to Achieving and Sustaining Excellence, Second Edition
3. The Lean Six Sigma Pocket Toolbook: A Quick Reference Guide to 100 Tools for Improving Quality and Speed
4. The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company

India Reader’s Click below:

1. Lean IT – Principles to Practice: Toyota Way to Create Value for the Customer & Wealth for IT Organization
2. Creating a Lean R&D System: Lean Principles and Approaches for Pharmaceutical and Research-Based Organizations
3. Lean Principles and Application in BPO
4. The Principles of Product Development Flow: Second Generation Lean Product Development

FAQs

Key takeaways

• A systematic, all-encompassing approach to lean transformation that is in line with organisational aims and values is necessary in today’s VUCA reality.
• A common vision, building leadership commitment, and putting continuous improvement procedures in place are three of the eight steps in the Lean transformation process.
• Enhancing operational effectiveness, customer happiness, and organisational resilience in the face of turbulence and unpredictability are all benefits of a successful Lean transformation.