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Creating a performance culture

Lean not mean

Last week's short article suggested that business and government can learn from each other. It highlighted what is probably the most successful business tool of recent years, "lean manufacturing" and suggested that as "lean processes" proven techniques can be applied by government as well as business. This week I would like to continue the theme and sketch how "lean processes" can help to create a performance culture at every level within the organisation. "Lean processes" constitute a system that requires that all processes are reconsidered, carefully integrated to obviate loss and waste and transformed to deliver the highest quality customer service. For government this can mean a sea change in attitude with the citizen being regarded as the customer of government. It also demands that a performance culture is developed and sustained.

Customer centricity

The latest "buzz phrase" in international business is "customer centricity". The ongoing success of corporations such as Toyota, the corporation that introduced and developed "lean manufacturing", has been based on defining processes on the basis of their ability to deliver customer value and excising those that do not. As a by-product of, sometimes ruthlessly, pruning those processes that fail to deliver customer value companies have been able to reduce costs more substantially than through cost-cutting exercises, build customer delight at every stage of every transaction and enhance employee satisfaction and commitment. In short "lean processes" have delivered to business the ultimate win/win situation.

Culture change

Organisational culture has frequently been simplified and expressed as, "the way that we do things here". It is more than that. It is, perhaps above all else, an expression of the values that drive all activities within an organisation and the norms or rules that ensure that those values are implemented in practice. Those values have to receive more than lip service from senior management and employees alike. They drive behaviour and as such they lie at the heart of performance. Re-addressing processes provides a unique opportunity to emphasise the values and norms that lie behind them to ensure that they are shared across the organisation whether that organisation is a company or a government department. The good news is that as work becomes enriched through customer centric processes a performance culture becomes deep-rooted.

Research by Reichheld and others has shown that as customers become increasingly delighted employees and management are encouraged by increasing personal and professional satisfaction to solve problems in order to deliver greater customer delight at lower and lower cost. This is why developing lean operations have consistently delivered considerably better cost savings than ordinary cost cutting exercises.

Involvement

W. Edwards Deming said, "What cannot be measured cannot be managed". In order to ensure that lean processes deliver as expected, measurement is required. Strategic objectives need to be broken down into tactical measures of performance that all involved must understand, accept and achieve. This is not to say that a culture of government targets such as we increasingly see in the United Kingdom is desirable. Where targets are imposed people find ways of satisfying them "on paper" that often have an adverse effect on performance elsewhere. If people are to take responsibility for performance at every level they need an opportunity, together with management to set their own targets based on the strategic demands of the organisation.

Bob Mager showed, and my own research has validated his thinking time and time again, that where people have an opportunity to set their own objectives the role of management becomes more often one of injecting a sense of reality rather than of encouraging them to attempt more. Involvement increases commitment, efficiency and morale. Experiences in both companies and government departments have shown that everyone helps to solve problems if performance falls and everyone seeks opportunities for improved performance. As a result of combining lean processes with the resultant performance culture one British government operation increased productivity by 60 per cent.

No rose garden

Nobody should assume that identifying and developing a true performance culture is necessarily easy. There may be significant existing cultural barriers to be overcome. In government departments in particular the view that "the way we have always done things must be right" can be entrenched. The good news is, however, that experience has shown that once people in an organisation begin to enjoy the benefits of "working lean" new attitudes become ingrained and unshakable in an amazingly short time.

It is not only the public sector in which resistance to anything different can be seen. In the private sector the mindset necessary for easy implementation has not always been in place. In the public or private arena things are sometimes complex as my previous article made clear. The benefits, however, are massive, ranging in the private sector to potential market dominance and in government to the economic delivery of superior education and healthcare - all with the potential for massive cost savings.

Effective leadership is a prerequisite for success. Unless top management are prepared to lead by example, addressing where necessary existing leadership problems, there is limited hope that even the most committed employees can achieve. Lean demands that leaders have the courage to identify and resolve deep-seated organisational problems. It is not a quick fix. It is a strategic and tactical tool that must be applied consistently throughout the organisation.

We all have a role

Politicians, business leaders, senior public servants, academics and consultants all have a role in clarifying the benefits of lean processes. The public both in the role of customers and of employees need to be convinced that the approach offers them major advantages now and in the future. All stakeholders need to understand that early benefits are not the end of the story. It has taken Toyota, the initial developers of lean manufacturing years to reach the position where they appear to be set to push Ford and General Motors from their position of global dominance. Meanwhile their profits and levels of customer satisfaction have consistently been the benchmarks for the industry. Organisations and their customers have enjoyed the accrual of many benefits along the way, but it is a long journey. Every journey begins with a single step. With lower costs, higher quality and greater public satisfaction should we not be taking that first vital step today?