Lean Applies to the Office Too

Lean in the office is not about eliminating staff or resources, it is about improving the value of activities so that workers are performing duties that directly relate to the result that the customer wants. And, it’s not only for front office functions of manufacturers. Service, retail, professional, healthcare, educational, governmental, volunteer or any organization that delivers something to a customer via a process involving multiple people and activities can benefit from leaning out the processes, eliminating waste and working to the needs of the customer.

Lean focuses on five principles that can be applied to office environments as well as to production environments:

1. Value Definition
2. Process Mapping
3. Uninterrupted Flow
4. Customer Pull
5. Pursuit of Perfection

Much like the shop floor, a lean office consists of processes that have eliminated waste, minimized non-value added activities, corrected performance issues, integrated disjointed processes and automated required activities. The only real differences between the shop floor and the office are that information is usually being processed instead of actual material components and the product being delivered may be a service, not a physical item.

All too often, office improvement efforts concentrate on how to do things better rather than concentrating on what things really need to be done. By using a Lean methodology, the “how” part does not get addressed until the “what” part is defined, leaned and redefined. This methodology consists of:

• Creating a team of process owners that fully understand the business process.
• Performing current state process mapping activities to identify how the process works.
• Indentifying all of the process inputs and outputs and their suppliers and customers respectively.
• Building a future state map of what the process should be.
• Developing a work plan that identifies what activities must be done, who will need to do the work and when these activities should be completed.

By applying the lessons learned in manufacturing and focusing on the five principles of lean, those who have embraced a Lean Office and its disciplines have made an important change to how their business operates. Getting administrative personnel focusing on continuous improvement and the customers’ needs is just as valuable as getting the shop floor to be lean in regards to the organization being competitive and profitable. The key to success in a lean environment is for the entire organization to “Be Lean”, not just “Do Lean”.

Competency Management - Managing the Knowledge of the Workforce

In the global, technology based economy of today, organizations face a daunting task of keeping their workforce talents in sync with the current and future requirements needed in order for them to stay competitive. Competency Management programs are based on identifying the business processes that exist in a company, breaking them down into their specific tasks and understanding what each individual needs in order to perform the job. Once this is done, tools and programs need to be developed and used that will keep the workforce educated and trained so that people are able to grow and change as business environment changes.

Results from companies that focus on these issues include improved employee retention, improved employee performance and improved revenue per employee. Aberdeen Research has identified that Best-in-Class companies have five main reasons for focusing on competency management:

• Aligning the workforce with business objectives
• Improving workforce productivity
• Increasing the flexibility and agility of the workforce
• Identifying high potential workers
• Reducing employee turnover

In order to achieve Best-in-Class performance, companies need to:

• Understand their business processes, identify the core competencies required and link them to the lifelines of the organization.
• Identify current and anticipated gaps in organizational knowledge and skills based on this core competency analysis.
• Develop and/or seek out workforce education and training programs that will close the identified gaps and keep the organization moving forward.
• Add performance based rewards to compensation models so that workers can see a direct benefit to learning and higher levels of performance.

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Real Business Value from Learning and Development

In today’s economic climate, organizations are forced to focus on getting as much as they can from what they've got. With the workforce being considered the most critical resource for most companies, getting the most value from employees via education and training is becoming a priority for most. In a recent survey by Aberdeen Research, Best-in-Class companies shared some common characteristics:

• 73% have integrated their learning strategy with their organization’s overall strategy.
• 70% have identified and inventoried all existing learning resources available to be used.
• 57% have defined the workforce core competencies required for each job and function.

They found that these characteristics had the following results:

• Improved employee performance on average 22%
• Improved workforce retention on average 19%
• Improved new employee time-to-productivity on average 18%

Aberdeen also listed the top five ways that learning and development have the most impact:

• Developing skills to meet business changes
• Preparing employees for future opportunities (i.e. succession planning)
• Increase workforce productivity
• Getting new employees up to speed quickly
• Retaining critical employees

In order to reach Best-in-Class performance in this area, businesses need to:

• Identify all stakeholders that can benefit from learning and make them aware of what is available.
• Establish a well defined process to identify specific knowledge gaps that can be resolved through education and training.
• Integrate learning with performance management and make learning readily available.

Are you Best In Class?

Peak Enterprise Solutions has a comprehensive program for workforce education and training that includes classroom training and hands-on application training.

KPIs and Performance Management

Business success depends on the ability to measure and react to Key Performance Indicators (KPIs). Executives and managers need to make timely and accurate decisions in order to improve the operation of the organization and relationships to their customers. Best-in-Class companies are focusing on solutions that provide timely accurate information in order to improve operational performance. These solutions include:

• Improve executive visibility to operational drivers.
• Replace “gut-feel” decisions with “fact-based” decisions.
• Understand operational life-line drivers of performance and how to measure them.

Aberdeen research has determined that among Best-in-Class companies:

• 82% have at least one year of experience in managing operational KPIs.
• 52% use reporting capabilities and information from their ERP systems.
• All have improved customer renewal rates by 4.7% year-over-year vs. a decline among non Best-in-Class.

In order to achieve Best-in-Class performance, companies need to:

• Identify the key operational areas of the company that need to be measured in order to improve success to the customer.
• Identify which areas will benefit most from developing and using KPIs to make improvements to the process.
• Develop a “selective few” set of metrics that are tied to the lifelines of the company and that are straightforward and easy to understand.

Are You Best-in-Class?