1. An Introduction to Lean Systems Thinking
An Introduction to Lean Systems Thinking … a better way to make the work work
About us:
Established in John Seddon
Purpose: to approach organisational change in a more systemic way than it had been treated in the past.
Researched a wide range of failed programmes of change: failure was, most often, a consequence of method.
W Edwards Deming, Senge, Ohno
Leaders of lean for service organisations.
Thinking:
W. Edwards Deming taught us that we must not treat our organisations as functional hierarchies but instead manage them as systems and Peter Senge showed how much people’s behaviour is governed by the systems they work in. Taiichi Ohno showed just how profound systems thinking is in practice – the number of man-hours it takes to build a Lexus is less than those used to re-work a top-of-the-line German luxury car after it has come off the production line. Systems thinking really does result in extraordinary performance improvements.
Vanguard Consulting have developed these concepts to provide a practical, tried and tested systems thinking framework for action in service organisations, which differ in important ways from manufacturing organisations. Because systems thinking in manufacturing has been labelled ‘lean thinking’, we call this approach ‘lean service’.
John’s books:
“I want you to cheat!” the unreasonable guide to service and quality in organisations” 1992
In pursuit of Quality: The case against ISO9000, 1997
“Freedom from Command and Control”
We are not:
Process re-engineers!

2. "We cannot solve the problems we have created with the thinking that created them." Einstein
In groups of 3s or 4s, discuss what you want out of today…

3. Two main design and management thinking approaches …

4. Mass Production / Command & Control
RIVER ROUGE
Henry Ford’s River Rouge Plant
Quintessential example of successful mass production was the giant Ford Motor Company plant built during WW1 on the River Rouge near Dearborn, Michigan. That Plant, and the sister Highland Park plant in Detroit, together produced some 15 million model T Fords by 1927.
All Black!
Low cost per unit
The high profits that Ford earned in that setting – dedicated to making 1 model round the clock year in, year out – is usually attributed to the plant’s remarkable “efficiency” – where “efficiency” is equated with LOW COST PER UNIT. The principle Ford followed was to produce one variant of a product without interruption, at full capacity, until demand satisfied.
Alfred Sloane working at General Motors at about the same time put rigour into running organisations through “managing by the numbers”.
Manage by the numbers
His principle was that in a large, amorphous organisation where it was hard to know which bits of it are making money, one needed to be robust about the costs associated with each part. The profit and loss accounting process was born enabling Sloane to know which bits of the organisation were “making money” and therefore which bits to close and which bits to keep open etc. But…
What did this focus do to the design of work? Here we need to understand the transition from making things with craftsmen to mass production. Let’s take a pin maker… Lets explain about the break up of the tasks in hand-making pins…
Functionalise and De-Skill
Now back to Ford: It was the production schedule that pushed material at a relentless pace - sustained by having machines and workers (little more than cogs in the gears) performing repetitive tasks as fast as possible… And Ford needed workers – gogs – for this thirsty plants. Luckily at that time boat loads of immigrants were arriving into the US looking for work. They suited his low-skilled factories perfectly however there was a problem – communication… Arise the superintendent – the first level of management. But what did this cause?
Separate decision making from work
A sign of the mechanistic roots supporting this mass production system is the relation between information and the flow of work. The primary information influencing the flow of work originates OUTSIDE the process in the schedule and the layout of the plant. Neither the materials of workers who transform it supply any information to guide the process – they are literally “pushed” by external information.
Underlying that information is a design that defines the laws governing the motion of materials and workers and features homogeneity of inputs and outputs (uniform material and interchangeable parts)
Standardisation
Economies of Scale
The uninterrupted flow of homogenous units at a rate as fast as possible insures the lowest possible unit cost of output – a rule enshrined in the phrase “economies of scale”: That costs per unit fall as the speed and volume of output rise… And Ford was hugely successful.
The River Rouge plant produced about one vehicle per minute in 1925 in a total lead time of about 3 days and 9 hrs from steel making to finished vehicle.
Cut costs and double wages!
Famously Ford was able to CUT COSTS and double wages! Why did he need to double wages?
Doubling wages was only helpful for a limited time because the work was still repetitive and boring! There was an assumption that you should leave your brain at the door when you check in, as you won’t need it once you’re inside the factory!

5. MANAGEMENT FACTORY SLIDE 2
Separating parts of the system to accommodate their different operating rates made inventories and warehouses indispensable. But…
Warehouse
Workers in independent parts of the system cannot receive feedback from workers in the next operation hence errors go undetected and have to be remedied through re-work.
Re-work
The continuous flow as seen in the River Rouge in the 1920’s no longer existed by the 1970’s.
And… this way of working required people and equipment to make sure things arrived at the right place at the right time. These people, referred to as “overhead” …
Overhead bubble
… were employed in activities such as scheduling, controlling, expediting, storing, inspecting, transporting and reworking. Arise the management factory…
Management Factory
BUT… There was a fundamental problem: Mix of varieties produced does not automatically mesh with the mix of varieties that customers wish to purchase
Not designed against demand

6. Arise Command & Control!
Perspective
Design
Decision making
Measurement
Management ethos
Top down, hierarchy
Functional
Separated from work
Output, targets, standards related to budget & plan
Manage people, hit budget and plan
NOT DESIGNED AGAINST DEMAND
BUILDS IN WASTE AND INHIBITS FLOW

7. Variety in the context of continuous flow
MANAGEMENT FACTORY
An alternative solution…
AN ALTERNATIVE SOLUTION
SLIDE 1
1940’s during General Mac Arthur’s administration of occupied Japan, W E Deming worked with Japanese looking at the management of organisations as systems. The Japanese needed to build cars. Toyota people went to the Rouge to see how it was done…
Flow
What they saw was invisible to Ford. They saw work flow through each part of the plant – literally through each individual work station – at the same rate, the rate that finished units flowed off the line.
(Continuous) linking and balancing (of steps)
They perceived that if every step in a continuous flow works at the same rate, then at any moment, each step consumes only the resources required to advance one customer’s order one step closer to completion. With all steps linked in a balanced flow, no worker did more than was needed to prepare only the work called for by the next step.
Returning to Japan, a huge problem for Ohno was that he did not have access to the huge finances for plant and equipment that was available to Ford et al. With his limited machinery he realized that in order to achieve this linked and balance flow, the time spent changing over individual machines was CRITICAL.
(Focus on) individual changeover (times)
From the 1950’s to 1970’s Taiichi Ohno and colleagues focused on an unremitting campaign to reduce individual changeover steps for all stages in their manufacturing process with each worker able to design and control what they performed.
Through process improvements they brought the set up change time of their pressing machines down from 10 days to 10 minutes. Consequently virtually all work requiring changeover was incorporated as much as possible into continuous flow.
Batch size of ONE
The traditional thinking at the time was if you move to small batches as Ohno was doing, costs would go up automatically…
Bulb
What do you think he unravelled…? For Ohno it was a counter intuitive moment…
Variety built into the line
Ohno perceived that if the time needed to change over every step in the system were actually less than the time interval between units flowing off the line, then it would be possible for every unit coming off the line to be different from every other unit, and still costs per unit would be nearly the same as if every unit were identical.
Those conditions, in other words, would make it possible to build a unique product for each customer at Model-T costs.
SLIDE 3: Variety achieved in the context of continuous flow
By the mid 1970’s Toyota had created a continuous flow that focused on connecting workers with customers in self-organising relationships that are capable of continually generating unique outcomes – diversity.
When Toyota looked at the process end to end in this way, with less time taken to reset the machines:
Throughput increased
Lead times fell
Quality increased
Work in progress was also much lower
Importantly, Ohno treated the work itself as the information required to inform production - all the information needed to direct operations is in the work. Operations are not driven by external information and controls.
No Management Factory!
Their continuously linked systems featured much smaller machines and each step operated at a slower rate – at just the rate required to complete the requirements for one customer’s order at a time – “to carry small loads and make frequent trips”. Key factors were managing the flow of material and the value stream to the customer integral to which was measuring end-to-end time. Each trip had to matter – so right first time and striving to reduce waste was the key focus.
Different thinking
His success was a result of how he thought about it…
Lexus is the top selling luxury car. A German competitor takes more time repairing vehicles at the end of the line in rework, measured in (man hours), than it takes to build a Lexus.
Variety in the context of continuous flow

8. Summary of TPS Features
Pull
Flow
Waste
Measures
Decision making
Management role
The Lean Path
Shifts the focus of management from organisation and assets to the product
Differentiates Value from Waste
Reconfigures the process to eliminate time and non value adding activities
By successively removing the constraints to flow and pull

9. The Toyota Production System
“The number of man hours it takes to build a Lexus is less than the man hours used in re-working a top-of-the-line German luxury car at the end of the production line, after it has been made."
The Machine that Changed the World
Womack, Roos & Jones 1990

10. Vanguard - translation for Service
Service differs from manufacturing!
The customer is involved in ‘production’,
Their Demand triggers our work…
Variety of customers and demand is huge!
What’s the difference?
Talk here about how traditionally we do not pay attention to the NATURE of demand, only VOLUME. Explain the difference! And how we rarely measure What Matters i

11. Systems Thinking Principles
Perspective
Design
Decision making
Measurement
Management ethic
Outside - in
Demand, value, flow
Integrated into the work
Related to purpose, and show capability
Act on the system

12. Change this Thinking Tools here System Performance improve Service
For over 25 years, V has been working with service organisations to improve performance
And what we mean by performance is 4 areas
How? By working with leaders and those in the work to understand how their organisation works as a system
What do I mean by system? And this is nothing to do with IT! This is about looking at what we from the outside-in, customer point of view, as a system; it means understanding the points of transaction that we have with our customers, and the E2E processes that are in place to deliver that service. For it is as a result of the design of this system, and what the people in the system are focused on, that results in the performance.
And how have we arrived at these processes and pre-occupations? The third critical element is to understand the empirical link between the leadership focus and thinking (that ultimately underpins this) and performance
Performance
improve
Service
Efficiency
Revenue
Morale

13. The rise of Tools Six sigma
Centred on a powerful problem solving and process optimisation methodology, 6 Sigma is credited with saving billions of dollars for companies over the past ten years.
Define
Measures
Analyse
Improve
Control

14. … and plenty more! 5 s 4 actuals 7 wastes Tact time
Value Stream Mapping
Brainstorming
Cause and Effect
Control Charts
Decision analysis
Failure Modes Effects Analysis (FMEA)
Force field Analysis
Pokeyoke (Failure Proofing)
SIPOC (Suppliers, Inputs, Process, Outputs and Customers)
Spaghetti Chart
Treatability Matrix
Takt time is the demand (units of production ordered by customers) divided by the time available to produce them. It is an essential method for understanding at what rate parts need to flow to meet the requirement of the whole, and the requirement of the whole is driven by the rate of customer demand. In simple terms, takt time is mathematics for managing flow throughout the system at the rate of demand.
In German, ‘Takt’ means ‘heartbeat’ or ‘rhythm’. It is not a Japanese word.
In the 1950s, Ohno had a problem. Toyota’s trucks and tractors were in high demand because of the Korean war, but because of the war it was difficult to bring in raw materials. As a result Ohno found he often ended up trying to complete a month’s production in the final two weeks of the month.
Ohno set out to deal with this problem by seeking to understand what the system would need to do in order to meet demand. He took the expected demand over a given time and divided it by the time available to meet that demand. This gave him the ‘takt’ time, which allowed him to understand if the system was producing enough or too much at any given time and in any place.
Ohno did not use the label ‘takt time’. He saw the ‘heartbeat’ as a way to manage production.
In their book Lean Thinking, Womack and Jones define five key steps for going ‘lean’: Identify the value stream, understand value, flow, pull, perfection. VSM is primarily concerned with the second and third steps: understanding value and flow. Without managing value work through a flow, it is difficult if not impossible to make any real steps towards a true ‘pull’ (make-to-order) system. The ability to identify key product flows and understand them from end to end is central to the improvement of manufacturing flows. VSM can be used to illustrate problems and trigger solutions or to build information required to redesign a manufacturing flow entirely.

15. Do they change this? Thinking System Performance improve Service
Are we doing the wrong thing righter?
Have we actually changed the underlying assumptions about the design and management of work to make change sustainable?
Think about this…Ohno insisted we should not codify method … Why?
Performance
improve
Service
Efficiency
Revenue
Morale

16. i Focus outside in, design to absorb variety Unhelpful? Costly?
These Vary!
CUSTOMERS
DEMANDS
PROCESSES
OUTCOMES
“WHAT MATTERS?”
What do we do to inhibit the ability to absorb variety?
Functional specialism
Procedures and scripts i

17. £ Nominal Value TAGUCHI - Leading thinker in the quality movement.
Challenged the idea of working to standards / working within tolerances
Showed that setting any (nominal) value and continually working to reduce variation around it reduced costs and improved quality.
If an organisation understands and responds to what matters, you experience good service and the organisation is likely to be delivering service in the most economic way

18. Costs of departure from the nominal value
Mum & Kids
Businessman
Fisherman
Quick & Hot
Coffee I/V
Laptop
DnD
Kids 1st
then me
Customer sets nominal value and thus the response of the service.
After this slide get team to do CHECK FEEDBACK and then let managers out into work and feedback i

19. The place to start is Check

20. Check Do Plan i How does change typically happen in your experience?
Many managers believe their job is to decide or ‘plan’ and the staff’s job is to ‘do’
This is a mistake!
Unless you start with ‘check’ you don’t have the knowledge to make change
‘Check’ tells you what you are predictably achieving now and why
Check enables you to ‘plan’ what to do to improve performance (you can predict improvement against measures)
When you then take action ‘do’ you can measure the results of your action ‘check’
Link: the process of check – getting knowledge - the ‘what’ and ‘why’ of current performance i

21. Understanding your organisation as a System
The Vanguard model for ‘check’
What is the purpose (in customer terms)? 1
Demand : T&F, V&F
What matters? 2
Capability of response 3
Before making changes it is essential to establish what is currently happening and why from the outside-in or customers perspective - we describe this as the “what and why” of current performance. When you understand how the system and processes are working today, what they are reliably and predictably delivering (capability) to the customer and why (causes), then you are in a position to make informed choices about change. This end-to-end learning crosses boundaries through which the work may flow incorporating partners, subcontractors and others involved in provision of integrated services. It also uncovers the supporting infrastructures such as IT.
We call this carrying out “Check” which forms the vital first step before planning and implementing any restructuring of a department or organisation for effective and efficient service delivery.
Firstly, one needs to understand what matters to customers – the type and frequency of demands that they place on the organisation, understood from their point of view. Only by having this knowledge can you review how well you deliver against what matters to customers.
One then needs to ask what is the purpose of the system or process? It is important that this is clearly defined and understood as this provides a focus for the work activity. The purpose of each process should be defined in terms that reflect what matters to the customer: efficiency and revenue and in particular service, for it is operational measures of service that will be central to the solution. To understand the current capability of any system or process one needs to understand the nature of demands being placed on the organisation and measure how well, and how predictably, the organisation responds to those demands. The ability of the organisation to respond to demand is determined by the flow of the work – it is here that the identification and elimination of waste will mean improved process efficiency.
System conditions, for example measures, roles, process design, IT applications, procedures and so on all affect performance – they may be helping or they may be creating waste. Many - for example targets and standards - may have been established with good intent by management but their real contribution will be exposed through ‘check’.
Management thinking. The resulting ‘systems picture’ helps managers understand how their managerial assumptions have helped or hindered performance in the organisation. This is a process of informed choice, for there is no change without leadership. Managers of successful organisations recognise that their role is not “command and control” but taking and leading action on the system to support their people and enable them to do better work.

22. Understanding capability data
Much of what we currently report on are percentages or averages in relation to targets (static data points)
Few of these targets relate to the real experience of the customer
Because of the way it is reported it is hard to see the effects of changes and decisions that we may be taking

23. Understanding capability data
Statistical process control charts (SPC) or Capability Charts are a powerful way of looking at our data and understanding the performance of our system
They capture statistically the capability or predictability of our system in delivering service for customer over time
Normally used to understand frequency of an occurrence or elapsed time (end-to-end)

24. How they work
Statistically we can measure the variation or predictability – what it feels like for our customers
What’s important is knowing the extent of this variation and why – the causes
No. of Days
100
Every system has inherent variation
UCL x 50
mean
LCL
We tend to only pay attention to the average
Cases

25. Understanding your organisation as a System
The Vanguard model for ‘check’
What is the purpose (in customer terms)? 1
Thinking 6
Demand : T&F, V&F
What matters? 2
Capability of response 3
Flow : Value work + Waste 4
System Conditions 5

26. Change based on knowledge…
analysis
action
change
…act on the
Thinking
System
Performance
improve

27. Case Study 1: Housing benefits

28. What you learn from Check
What do customers want?
“Can I make a claim?”
“My circumstances have changed”

29. What matters to customers?
“I get an answer quickly so that I know whether or not I’m going to get help”
“Deliver payments quickly so that I don’t get hassle from my landlord or the CTax department”
“Make sure my benefits keeps track with changes in my situation…”
“You help me through the process”
“I can understand the letters & forms”
“I don’t mind waiting a bit if I know it is going to be sorted”

30. Pay the right money to the right people as quickly as possible
Purpose
Pay the right money to the right people as quickly as possible

31. Capability (how well are we meeting the purpose in customer terms?)
We don’t know!
Because we don’t measure it!
But … we do measure:
BVPIs & position relative to ‘similar’ authorities
Waiting time in reception
AvHT, wrap, etc. in the Call Centre
Number of cases per day in the back office

32. So what do customers experience?
Ucl = 152
mean = 52

33. Workers’ activity ‘managed’
Learning to see HB as a System
Multiple Sorts & Checks
Cases fragmented
Scanning/Indexing errors
“I want to claim”
64% passed back
Manage queues
34%V 66%F
Sort
Scan
Index
Hand out forms
Take in documents
Handoff
22%V 78%F HO
44%V 56%F
Workers’ activity ‘managed’
Allocate
1-10 cycles to clean (ave.4)
95% cases over-specified
20% docs. duplicated HO
99% claims ‘dirty’
No case ownership
CTax fragmentation
Letters unclear
87%
Decide HO HO HO
Pay
Notify
Inspect
0-152 days to pay
3% visit once
60% errors
Rework

34. Is there opportunity to improve?
How would you realise it? i

35. i What is the Thinking That has caused the System … to result in
Performance i

36. Workers’ activity ‘managed’
Learning to see HB as a System
Multiple Sorts & Checks
Cases fragmented
Scanning/Indexing errors
“I want to claim”
64% passed back
Manage queues
34%V 66%F
Sort
Scan
Index
Hand out forms
Take in documents
Handoff
22%V 78%F HO
44%V 56%F
Workers’ activity ‘managed’
Allocate
1-10 cycles to clean (ave.4)
95% cases over-specified
20% docs. duplicated HO
99% claims ‘dirty’
No case ownership
CTax fragmentation
Letters unclear
Decide HO HO HO
Pay
Notify
Inspect
0-152 days to pay
3% visit once
60% errors
Rework

37. Case Study 2: The IT Helpdesk
This pulls together in a real example the model for check BUT stops half way through to test their understanding of the THINKING underpinning the system…

38. If there is an issue, sort it: One-stop or manage my expectations
What’s its PURPOSE?
If there is an issue, sort it: One-stop or manage my expectations
This one is a case study pulling it together

39. The IT Helpdesk … What a user experiences?
What’s going on?

40. Predictably up to 5 people
A Story of IT Support
Work done
R & R
Diagnosis
Fixing
Ordering …
Reasons for wait:
Reallocation
suppliers
engineers
user
Calls not being fully fixed first time
Ongoing problem
Not set up properly
Calls closed
Bounced between people / teams
Predictably up to 5 people
3 teams
FIX
CLOSE
LOG QSM @
CUST
FIX
CLOSE DW
1:1
MORE WORK
WAIT DW
1:1
CUST
FIX
CLOSE
TO TEAM
A or S
16%
33%
51%
1.5 min
1 Hr
58 Hrs
83 Hrs
Vanguard

41. What underpins this design & performance?
Handoff
Batch
Check
Rework
= DELAY
Functional Design
HelpDesk
Core Techs.
Remote Techs.
Operations
Development
FIX
CLOSE
LOG QSM @
TO TEAM
A or S
CUST DW
1:1
MORE WORK
WAIT
83 Hrs
Vanguard

42. What underpins this design & performance?
Focus on Close NOT Fix
= MORE WORK
Prioritise jobs
= DELAY
Functional Design
KPI’s
Reopen
Raise Job
Stop Clock
Close Job
Logging data
FIX
CLOSE
LOG QSM @
TO TEAM
A or S
CUST DW
1:1
MORE WORK
WAIT
83 Hrs
Vanguard

43. What underpins this design & performance?
Control over IT people and costs
= DELAY
= STAFF FRUSTRATION
We say “No!”
= USER FRUSTRATION
Functional Design
KPI’s
Procedures & Authorisation
FIX
CLOSE
LOG QSM @
TO TEAM
A or S
CUST DW
1:1
MORE WORK
WAIT
Vanguard

44. What underpins this design & performance?
BUDGET
CONTRACT
Functional Design
KPI’s
Procedures & Authorisation
Stick to the letter
Ensure we hit the numbers (and don’t get fined)
Juggle resources between support and development
Focus on the numbers
“Lower Cost” staff for “Simple” jobs
Juggle resources between support and development
Say “It’s chargeable!”
Authorisation to “control” spend
FIX
CLOSE
LOG QSM @
TO TEAM
A or S
CUST DW
1:1
MORE WORK
WAIT
Vanguard

45. Thinking System Performance
Focus on revenue
Meet the budget
Stick to the contract
Manage the people
Improve through Projects
Thinking
Demands equal units of work
Functionalised design
Managers make decisions
Focus on productivity, output and prizes
Workers follow procedures
Hand-off, batch & Q, checking, reworking
System
Hard to get through
Poor first time resolution
Long E2E time
High failure demand
Rising complaints
Poor retention
Rising costs
High staff turnover
Performance

46. Principles for ‘Plan’ (Re-design)
Where do we need to act? Remove System Conditions
Clarity of purpose 1 6 C U S T O M E R
What are the value steps? 3
What are the management roles?
Add value 5   
What are the ‘core’ roles?
Design against demand 4
Clarity of the permanent measures 2

47. Workers’ activity ‘managed’
Learning to see HB as a System
Multiple Sorts & Checks
Cases fragmented
Scanning/Indexing errors
“I want to claim”
64% passed back
Manage queues
34%V 66%F
Sort
Scan
Index
Hand out forms
Take in documents
Handoff
22%V 78%F HO
44%V 56%F
Workers’ activity ‘managed’
Allocate
1-10 cycles to clean (ave.4)
95% cases over-specified
20% docs. duplicated HO
99% claims ‘dirty’
No case ownership
CTax fragmentation
Letters unclear
Decide HO HO HO
Pay
Notify
Inspect
0-152 days to pay
3% visit once
60% errors
Rework

48. Change thinking, improve performance
Pay the right people the right money fast
Purpose
Measures
Method
mean = 142
Experiment: find & act on causes of variation

49. Change thinking, improve performance
Pay the right people the right money fast
Purpose
Measures
Method
mean = 142
mean = 12

50. The Systems Solution: design against demand
“I want to claim”
Obtain clean information
Make a decision
Notify the claimant
Pay if entitled
Value Work
Put the claims expertise at the front end
Enable assessors to pull support on demand
Build Ctax expertise into the flow
And measure against purpose
Expertise

51. “Something’s broken…”
Service Level, AvHT
Diagnosis & SoR
Parts/material
Priority
Activity, Time, Cost
Prop. o/heads
Repairs as a System
Bonus
“Something’s broken…”
Target Times, Budget
“What’s going on!”
“It’s not fixed!” 65%
Repair
Call
Centre
Works
order
Supervisor
Cancel WO’s
favouritism
Re-allocate
Argue
No. Jobs
Type of job
95% WO’s Reworked
Diagnosis,Bonus, Fix
Tradesman
Materials
Access
Delay
40% fail
Distrust

52. What would you do? Think about… “What Matters?” to the tenants
What is the VALUE work?
How could we just do the value work?
What would we need to do to help those to do their jobs?
What are the implications on roles?
What should we measure?

53. Should we worry about people of process?

54. The importance of measures

55. Causes of Variation?
UCL x x x x x x x x x x x x x x x x
LCL

56. Setting a target that exceeds capability
UCL x x x x x x x x x x x x x x x x
LCL

57. Setting any target ?
UCL x
Target x x x x x x x x x x x x x x x
LCL

58. What’s important?
What’s important is knowing the extent of this variation and why – the causes
UCL x x x x x x x x x x x x x x x x
LCL

59. Capability vs Targets Targets Capability Measures
Arbitrary – “plucked out of the air”
Derived from the work
Increase disorder in systems
Lead people to work in ways that increase order and control
Focus people on the wrong things – survival not improvement
Focus ingenuity on how the work works
No value in understanding and improving performance
Understanding causes of variation provides a focus for improvement
De-motivating – no understanding of capability
Motivate – put control and understanding in the right place

60. What makes a good measure?
Measures must be derived from the work – relate to purpose
Measures must help us understand and improve performance
Measures must demonstrate capability and variation over time
Measures must be in the hands of the people doing the work, to control and improve the work
Measures must be used by staff and managers to take action on the system i

61. Summary – the key issues
Not paying attention to demand
Damaging the ability to absorb variety
Managing people not the process
Using the wrong measures
Demand
Demand is treated as units of production
No understanding / measure of value / failure
Not understanding “What Matters” (Nominal Value)
Wrong measures
Test of a good measure is…
Problem with targets… (examples from fieldwork)
Leading / lagging measures
It’s the People (not process)
Performance is affected by process not people (systems conditions from fieldwork)
Role of the manager is…
Importance of designing to absorbing variety
Service is different! Need to design vs demand – to be able to absorb variety!
Caution inhibitors: Scripts, procedures, activity measurement, IVR, automated work scheduling and ‘work flow’ systems and so on….

62. Reading List Vanguard Stuff : www.lean-service.com
Freedom from Command & Control, John Seddon
I Want you to Cheat, John Seddon
Recommended
The New Economics, W. Edwards Deming
The Toyota Production System, Taiichi Ohno
The Machine that Changed the World, Womack Jones & Roos
Lean Thinking, Womack & Jones
Understanding Variation, Donald Wheeler
Punished by Rewards, Alfie Kohn
Interesting but Dangerous - you work out why…
The Principles of Scientific Management, Frederick Winslow Taylor