“Improving quality whilst reducing costs - how Lean thinking can be applied in FE”.

1. “Improving quality whilst reducing costs - how Lean thinking can be applied in FE”. Julie Tolley1 May 2012 Exceptional people delivering exceptional results

2. This session is about.... How we can improve quality whilst reducing costs based on a philosophy that the right process would produce the right results This session will look at how Lean thinking can be applied in FE.

3. Key drivers in FE and HE

4. Change failure should not be an option Of the 70% of changes that fail, over 70% do so because people have not been sufficiently engaged 1 14% Other obstacles Inadequate resources or budget 14% 33% Management behaviour not supportive of change 39% Employees resistant to change 1) http://instituteforperformancemanagement.org/Leadership%20Development.html

5. Changing people or changing operations? Even the best managed projects and programmes often fail to create and sustain traction when introduced into the workplace The common causes of project failure are: • A lack of leadership, and risk management 1 • A lack of effective engagement with stakeholders2 • Failure to meet user expectations1 • Difficulty for operational staff in relating the proposed change to their day to day work2. Therefore: • User involvement, executive sponsorship a change ready culture and clear requirements are prerequisites for success. Sources of Information: 1) National Audit Office, 2002. 2) The Chartered Institute for IT, 2008

6. What is Lean? • Lean is a fundamentally different set of principles and assumptions about the most effective ways to manage and grow businesses • The key pioneers of Lean management thinking are: • W.E.Deming (1900 – 1993) • TaiichiOhno (1912 – 1990) • Shiego Shingo (1909 – 1990) • (so Lean seems to be good for longevity too!) "To successfully respond to the myriad of changes that shake the world, transformation into a new style of management is required. The route to take is what I call profound knowledge; knowledge for leadership of transformation.” W.E. Deming (1993) The new economics for industry

7. But more importantly, what are the Lean principles?

8. But more importantly, what are the Lean principles? Adapted from Liker, J. (2004) “The Toyota Way”

9. How does a ‘systems thinking’ manager or culture differ? Seddon J. (2008) “Systems Thinking in the Public Sector” p70 Designed to be good for fire-fighting / crises Designed to be good for business as usual

10. Core approach to real whole system improvement Seddon J. (2008) “Systems Thinking in the Public Sector” p82 “Medieval man was a cog in a wheel he did not understand; modern man is a cog in a complicated system he thinks he understands.” Nassim Nicholas Taleb

11. How do you know if Lean is relevant? • Process level: • Poor customer satisfaction, regular and / or costly complaints • Costs going up with no obvious change in demand (‘We need more resources’) • Long end to end times for the customer • High levels of chasing, and internal hand-offs • Low staff morale • People not using IT properly following training • Operations manager level: • Little understanding of rates of demand • Managing to local SLAs / targets by function (or to no measures at all) • Capacity (budget, FTE, space) based on historical levels with no reference to customer demand levels • Management meetings are ‘talking shops’ and real decisions are taken outside the meeting (usually based on political power, rather than evidence) • Complex business cases required to prove need for a project • Strategic change level: • Can’t ‘salami slice’ any more, so need to close services / make cuts • More change programmes live than senior managers can properly sponsor • Poor operational buy-in to need for change prior to projects beginning • ‘We need more project / programme management control / resource’

12. When can it be used?

13. Capita Consulting’s approach • It doesn’t have to be called Lean to use Lean • Five stage approach

14. Process improvement to operations strategy Redesign service from core purpose and implement Lean change management The higher up the chain, the bigger the benefit and lower the total cost Redesign management information, control and decision making flows Targeted interventions, one process or service at a time

15. And in the future: whole system pathway

16. We can engage at a range of levels Transforming the sector through BPO, outsourcing and shared services. Transforming institutions through merger, partnering and re-structuring. Delivering more efficient and effective operations through Lean and BPR. • Capita Consulting solution components

17. Where to go for more information Initial Core Texts • Core Principles • Freedom from Command and Control (John Seddon) • The Toyota Way (Jeffry Liker) • Out of the Crisis (W.E. Deming) • The Goal (Eliyahu Goldratt) • Tools and process • The Lean Service Toolbox (John Bicheno) • Historical context • The Machine that Changed the World (Womak & Jones) • Books by Shiego Shingo & TaiichiOhno • Operations management and strategic lean • Understanding Variation (Donald Wheeler) • Hoshin Kanri for the Lean Enterprise (Thomas Jackson) • Specialist: • Project management • Critical Chain (Eliyahu Goldratt) • ICT • Lean IT ( Steven Bell & Michael Orzen) • Accounting • Practical Lean Accounting (Brian Maskell & Bruce Baggaley) • Facilitation • Open Space Technology (Harrison Owen) • Clean Language (Wendy Sullivan & Judy Rees) • Free non-book resources • iTunes (free podcasts): • The Systems Thinking Review • Lean Summit 2010 • Profit through process (Six Sigma IQ) • And many others… • Useful (free) clips • Advice UK • http://www.adviceuk.org.uk/home (Advice is Changing) • London Thames Gateway • http://www.londongateway.com/ (Visualisation) • Deming Library excerpt • http://www.youtube.com/watch?v=GHvnIm9UEoQ • Trabant Quality Control (not Lean ) • http://www.youtube.com/watch?v=mIAYxWCXF8A

18. Thank You Julie Tolley Tel: 0207 901 0000  Mobile: 07584 704269 Email:julie.tolley@capita.co.uk www.capita.co.uk/consulting 1 May 2012 Exceptional people delivering exceptional results