Lean and BPR - Interim Manager

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A simple effective process that everybody can understand

Different people need different stimuli

Every organisation in which an interim manager works has features that can challenge the patience of somebody brought in to do a job, get the job done and leave the operation with people and processes in place to carry on working in the new way, the way of best practice. The biggest and most frustrating of these, certainly in large organisations, is the amount of political positioning that goes on – alliances formed and broken, gambles taken on winners and losers to be followed or sidelined and policies supported or criticised depending upon their origin.

Allied to this is the ridiculous need for some people to belong to one camp or another. Businesses implementing ERP systems will include absolute believers who carry with evangelical zeal the message that the system will solve all the world's problems. They are usually the people who propose the use of all the tools and sophistication (or complexity) that the package offers even though in many cases the package facility is simply not required. A simple process that everybody could understand would be more effective but system-believers will not be swayed. Others in the business will promote Lean as being entirely incompatible with ERP – or, more to the point, they will argue that Lean practices are being prevented by the adoption of this hideous computer system.

Of course, there is middle ground; the two are by no means wholly incompatible and any ERP system should be implemented to best meet the needs of the business. Lean processes are those without waste and the system should be set up to support the processes that give the best return. QED. Anything other than Lean processes and a system set up to support such processes constitute the perfect example of tail wagging dog.

However, this example does not involve systems. The Lean community can fall out with others and in this case the people on the other side of the argument were another group who can go into battle on behalf of their chosen faith with little provocation. They are the believers and promoters of Business Process Reengineering and subsequent process-focussed approaches. Such believers, as with all believers, can sometimes forget that others may have a contribution to make. They can also be guilty of closing their eyes and minds to the fact that sometimes the approach that they have chosen as their faith just may not be the best way forward.

What Causes People To Form Groups?

Why do we see textbooks, magazine articles, conference papers and even, heaven help us, complete conferences dedicated to one or the other?  Such articles often include snide digs at the other approach.

Do people need to feel comfort that they are in one gang or another?  What a carry-on!  Senior managers and experienced consultants behaving like fourteen-year-olds forming separate cliques in the school playground. In my youth the divisions centred on football clubs or rock bands and many years later I see the same thing happening among professionals. The only difference is that where callow teenagers would declare undying devotion for Hawkwind as opposed to Deep Purple (who had appeared, to their eternal shame, on Top Of The Pops) I now cross swords with proponents of kaizen (the Lean approach of continuous improvement) who will not give the slightest consideration to Messrs Hammer and Champy and devotees of BPR who cannot accept that the tools of Lean offer any value.

So, an interim manager with line responsibility, but whose primary role is to lead the business to a new and improved way of working that will continue after the interim manager has gone, has to get the best out of everybody even though some of the people in the organisation have no respect for some of the others.

How Do Interim Managers Work In An Environment Of Conflict?

Well, we try to align ourselves to all parties to get the best out of everybody but we avoid agreeing with anything that's fundamentally flawed. We don't need to worry about the long-term personal implications of falling out with people because there isn't a long term in the personal sense. We needn't second guess whose star may be on the rise in order to hang on to their coat tails because we'll be long gone before any stars have reached their place in the atmosphere.

Of course, we need to work with these people if we are to achieve success. We need a track record and, of course, we only get a track record if we can get people on our side. We need others in the organisation – some reporting to us, some working in different departments or even business units – to pull in the same direction.

This can be made difficult if some of the key players in the business believe that 'no matter what the question, the answer's Lean' while others hold the identical view for BPR. When the belief in either of these is accompanied by total disrespect for the other and contempt for anybody who dares to propose the other as having any potential value, the management of change for the better requires a combination of all the skills we might never acquire. We need to put people straight without causing unnecessary offence and we have to avoid being claimed by one camp or the other by giving them the chance to say that we agreed with them. In the case in question 'yes, but . . .' might have become my nickname. (Though perhaps it was something far less polite).

Putting People Straight

Sometimes the answer is 'tact' side of 'tact and diplomacy'. 'Yes, but . . .' can be said politely and with a smile even when the argument subsequently offered is something in total conflict with the beliefs of the person with whom we are chewing the fat. This has to be handled carefully, of course. If the other party doesn't realise that their opinion has been challenged then the challenge has been a waste of time.

Sometimes a less tactful approach is more appropriate. Statements have to be designed to emphasise the fact that we disagree with somebody. Perhaps for starters:

  • 'Lean and BPR are more or less the same thing, you know. Two ways of reaching the same best practice from different angles'.

Of course, it's not often we can offend people from both sides of the fence by saying the same thing, but this is the perfect opportunity.

What Do We Mean By 'Lean'?

Well, of course, nobody sat down and developed a set of techniques called 'The Lean Approach'. The set of tools we now refer as Lean originated in Japan, primarily in Toyota, but they weren't called Lean. Simple Westerners, on first exposure to the Toyota Production System (TPS), proved that they were genuinely simple by spotting only the most obvious and visible evidence of a radically different way of working – that of very low levels of inventory. They rationalised this by recognising that Japan is apparently a small island without the space to hold stock (honestly!) and observed that everything was geared around components and materials arriving exactly when needed – Just in Time, in other words. So the Japanese approach was called JIT and the physical means of triggering replenishment, the kanban, was celebrated as the key to success.

(Nonsense, of course. The kanban only worked because of everything else that was put in place to guarantee supply and stock was only one of the wastes that Toyota had addressed. When the Massachusetts Institute of Technology later carried out a study into the future of the automobile and contrasted Japanese and Western approaches they noticed that the Japanese were attacking all forms of waste. John Krafcik, a researcher on the project, noted similarities with people looking to remove fat and so coined the term 'Lean Production' – which was far more fitting. The findings of the research project were presented in The Machine That Changed The World.)

So the Japanese approach was about eliminating waste. The standard definition, though one very much based around a manufacturing operation is that of addressing the '7 Wastes' or '7 Ws' defined by Taiichi Ohno:

Defects

Probably the most obvious – making scrap is a waste of the highest order.

Over-Production

Making more than we need creates surplus stock. It also ties up resources making this surplus when they could be meeting other demand.

Waiting

People, or plant, waiting to be utilised is wasted time.

Transporting

Moving items incurs cost in various forms, not the least of which is time.

Movement

People moving around are not producing while doing so.

Inappropriate Processing

Using more complex and more expensive plant, or perhaps making to tighter tolerances, than the product requires incurs cost without matching value.

Inventory

Stock ties up cash and space as well as bringing other problems.

The techniques developed within Toyota to eliminate these wastes are many and wide-ranging, best described in Taiichi Ohno's book, Toyota Production System: Beyond Large-Scale Production. Those promoted heavily in the West as we moved from JIT to the broader understanding of Lean originally centred very much around manufacturing activities but developed into the area of office or administration processes as things moved on. We learned that Lean means eliminating waste throughout the operation and that waste is anything which does not add value. Just as the Western factory with functional layout, lots of movement and the resulting long queue times could be contrasted with all the machining and assembly work being carried out in a component cell feeding directly into a kanban square alongside the main assembly line, the same approach could be adopted in sales offices, design, finance and other offices throughout the organisation.

During the 1980s one of the major UK consultancies ran a major campaign promoting their approach to 'JIT In The Office'. As JIT evolved into Lean Production or Lean Manufacturing the approach extended to other areas of operations and the term contracted to simply 'Lean'.

And What Is BPR?

As with Lean, nobody invented BPR. Business Process Improvement (BPI) had been an established term for some years (perhaps best explained in Business Process Improvement: The Breakthrough Strategy for Total Quality, Productivity and Competitiveness by H James Harrington) when Michael Hammer and James Champy published the findings of their own research into best practice. Harrington emphasised the fact that businesses were now coming to terms with fact that approaches such as TQM didn't focus on people but on processes.

Hammer and Champy's Reengineering the Corporation: A Manifesto for Business Revolution, published in 1993, described in case study form some approaches that were, to a larger or lesser extent, revolutionary. They extended the thinking relating to business process, which had previously been relatively loose, to a clear definition as a 'collection of activities that takes one or more kinds of input and creates an output that is of value to the customer'. The customer in this sense may be the end customer of the company in question, but may in fact be somebody else, or some other department, within the organisation. An essential early step in reengineering processes, they explained, is to decide what the processes are within the business. They highlighted was that the success achieved in their examples was built around a common theme of businesses working to achieve process, rather than functional, improvement.

They adopted the definition of BPR as '...the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures such as cost, quality, service and speed'. The emphasis here was on the fact that to achieve optimum performance changes had to be radical and implemented in a dramatic way – the 'big bang' approach).

In some quarters the book was viewed with cynicism, which wasn't helped by a quote on the front cover from Peter Drucker: 'reengineering is new, and it has to be done'. It can't be that new, people argued, as it was being done before the term was even created – or else where did all these case studies come from?  There is some substance to this argument, but cynicism shouldn't be allowed to override the fact that there were some terrific success stories in the book and the authors did an excellent job in building upon the parallels from these stories to identify common strands and factors for success.

The BPR guidelines included some advice, though stressed that there is no simple right and wrong. We need to ask ourselves 'at the end of this perceived process, do we have something of value?'  We also need to try to keep processes manageable – things we can get our arms round.

Key constituents of best practice described within Reengineering the Corporation were:

  • Reducing delays and the potential for quality problems by eliminating in-trays and handovers and the associated potential for miscommunications. If all work could be carried out by one person or in one focussed team (the 'one stop shop') then performance would be improved.
  • Speeding things up through parallel processing. If all the steps in a process can be carried out in parallel then the overall duration will be significantly less than if the steps follow in sequence.
  • Management by exception. An example in the book concerned a contract specialist receiving all orders within a division of IBM – sometimes necessary because the customer had specific requirements which needed to be reviewed by an expert before the terms could be accepted. In most cases, however, there was no need for this additional step. It simply slowed down processing and dragged a highly-paid specialist into work which bored him or her.

The Lean aficionados recognised all this. In considering the 'one stop shop' idea they drew parallels with the idea of cellular manufacturing challenging the Adam Smith ethos of breaking work down into constituent elements and improving performance in each of the elements. Parallel processing is most clearly evident within the TPS in the idea of externalised set-ups. A key element of the SMED approach is to do as much work as possible setting up the next operation to be carried out while the current operation is in process. The Japanese automotive approach introduced many ideas of managing by exception – the ideas of hoshin, translating strategic goals into short term targets and monitoring against these targets, were much simpler than anything the Western visitors had seen before.

A challenging proposition, then, for the BPR proponents from a disciple of Lean after encountering Reengineering the Corporation:

  • 'Those companies hadn't done anything called BPR, you know. They had applied the principles of Lean to administrative processes. The authors saw what they had done and gave it a new name.'

Of course, while there may be an element of truth in this, the definition of business process and the emphasis on process, rather than functional, improvement is a key lesson. Radical change as an essential for success is also a valuable insight. Hammer and Champy and other co-authors in later books have made a valuable contribution as has Dr. Harrington, building on the teaching of Messrs Deming and Juran.

So, we have the challenge of an organisation with separate clans prompting Lean and BPR. Of course, life is never that simple. Some people, while accepting that a focus on processes in improvement activities is essential, and while accepting that the ideas of mapping the 'As Is' and 'To Be' states of the organisation, question the fundamental principle of reengineering. 'Yes, ' they say, 'we can design a 'Future Vision' and work towards it, but dramatic change – really?  Can we really go for radical, complete change? Many people argued that complete, fundamental change while the business continued to operate was simply not feasible. The cover of Masaaki Imai's Gemba Kaizen: A Commonsense, Low-Cost Approach to Management opens with:

  • 'Forget reengineering or 're-inventing' your business. It costs a fortune, disrupts operations, scares employees and customers, and doesn't work anyway'.

He promotes kaizen, so presumably is equally dismissive of kaikaku – the radical change approach within Lean – though he doesn't say so.

So, there is still the incremental approach from the process angle in the way that kaizen is continuous improvement contrasted with kaikaku. Yes, the generic term Business Process Improvement (BPI) is usually taken to mean ongoing change rather than 'big bang'. There is also Business Process Management (BPM) which effectively promotes a mechanised framework to defining best practice. BPM has its advocates, though there are also those who highlight how quickly most published material on the subject moves into the area of software to 'manage' process. The thought of computer systems managing business process is a little challenging.

Another term in common parlance is that of Business Process Innovation which first appeared in the public domain in an excellent book by Steve Shapiro. 24/7 Innovation: A Blueprint for Surviving and Thriving in an Age of Changeintroduced the 7 Rs – different ways to be innovative – and provided examples of such innovation. (The book was itself challenging in that one example seemed to conflict with another – additional tasks being brought in-house in one case whereas in the other work was being outsourced. And, of course, this was the point – being innovative will lead to different solutions in different circumstances.)

So, The Way Forward?

What should we do to bring about improvement in an organisation where different people have different perceptions of improvement methodologies – which ones work and which don't? 

  • Get everybody who can play a part in the change programme in one room and bash their heads together, perhaps? 
  • A tempting thought, but sadly impractical in this case. Some of the people in question were very senior (above such crude approaches) and based in other parts of the world – not keen to come to an industrial part of the UK where the existing processes that they had driven (at least in part) where limiting performance.

The solution agreed was to develop an in-house methodology and give it an in-house name. I felt the urge to use ACS (or Applied Common Sense) because, after all, that's all best practice is. It was felt that this was too simplistic and may cause offence among a wide range of local and corporate managers by sending a signal that the existing business processes were felt to be other than sensible. (In fact this was my personal view of matters but to keep people on side we had to promote the idea that the problems resulted from processes which were basically sound but which suffered from a number of individual failings, many of which has arisen as a result of evolution to meet changing market requirements.)

The name selected was an acronym combining abbreviations of the company / operating unit and customer service – which was the most visible of the established performance issues. The exercise to set out a future vision was carried out entirely under this name at a local level but reported to certain individuals within the corporate hierarchy as the 'Develop and Test Future Processes' element of BPR.

While people in the commercial and financial areas of the business could design to meet their own needs once a project team had agreed what a good process looked like – essentially the Hammer and Champy examples with refinements or re-interpretations (some coming from Lean definitions) that people in the organisation felt to be important, 'Lean' was used in the some areas in the operational areas. it was agreed that the team needed to be able to argue that we were adopting proven approaches and that if we did it properly we could wipe the floor with the competition in the way that Toyota had done with the Western automotive companies in the 'seventies.

The Results – And Lessons

The project delivered the goods, improving customer service considerably and taking the business unit in question from being a considerable loss-maker to the second highest profit earner in the corporation. As ever with such matters all the other key performance indicators showed improvement.

Lesson #1 was undoubtedly that if we can get away from the hype surrounding methodologies we can make progress more quickly than if we allowed ourselves to get bogged down by semantics. Who cares if we are combining two tasks in the quotations office, merging two distinct pairs of people carrying out different tasks into a team who all see the job through from start to finish because this was proposed by Hammer and Champy or because it reflects the creation of a production cell?  Who cares if one of the four people sees it as BPR, two as Lean and the fourth thinks that he and his colleagues have invented it themselves.

Lesson #2 – as is always, sadly, the case, is that lesson #1 has to be followed with an element of caution. We don't want people seeking new solutions when solutions exist and the best way to prevent this is by quoting proven examples of best practice. Taiichi Ohno's Lean (together with excellent books by many others on the subject) and the examples quoted by Harrington, Hammer and Champy, Shapiro and other process gurus provide a foundation. There is a balancing act between, on one side, following textbook theory to the exclusion of innovative thought and, on the other, re-inventing wheels.

Lesson #3 compounds the challenging of the balancing act. Different people need different stimuli and different degrees of confidence through applying established methodologies. Some people, for example, fear that Lean, as a fundamentally Japanese approach, requires a fundamentally Japanese culture within a Japanese society. While in some respects there may be an element of truth in this there is enough evidence now to suggest that Western workers can adopt Lean. The phrase that I have come to use down the years is 'horses for courses'. You know your horses – and you know the courses on which they race!

References:

  • The Machine That Changed The World
    James Womack, Daniel Jones and Daniel Roos
    ISBN-13: 978-0743299794
  • Toyota Production System: Beyond Large-Scale Production
    Taiichi Ohno
    ISBN-13: 978-0915299140
    Business Process Improvement: The Breakthrough Strategy for Total Quality, Productivity and Competitiveness
    H James Harrington
    ISBN-13: 978-0070267688
  • Reengineering the Corporation: A Manifesto for Business Revolution
    Michael Hammer and James Champy
    ISBN-13: 978-0060559533
  • Gemba Kaizen: A Commonsense, Low-Cost Approach to Management
    Masaaki Imai
    ISBN-13: 978-0070314467
  • 24/7 Innovation: A Blueprint for Surviving and Thriving in an Age of Change (Paperback)
    Stephen M. Shapiro
    ISBN-13: 978-0071376266

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Ian Henderson

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