CHAPTER EIGHT IMPLEMENTING LEAN IN THE PUBLIC SECTOR: CRITICAL SUCCESS FACTORS
8.1 Chapters three to seven have highlighted a number of points and issues that were raised within the research. These have been summarised at the end of each chapter. This chapter will reflect on the findings presented in order to identify the critical success factors and barriers to change regarding the implementation of Lean in the public sector. This analysis together with points raised in the findings will then present a series of questions designed to address the aim and objectives of the research before clearly answering the following:
- Can Lean work in the public sector?
- How can Lean work in the public sector?
- Can Lean be replicated?
- Can Lean embed a culture of continuous improvement?
A. Critical success factors
8.2 Analysis from the research with organisations in the Scottish public sector, together with evidence from the literature (Annex 1) indicates that a number of factors are important in terms of a successful improvement programme:
- Organisational culture and ownership
- Developing organisational readiness
- Management commitment and capability
- Do not under resource
- External support
- Communications and engagement
- Strategic approach
8.3 The cross case analysis indicated that developing a real organisational culture of continuous improvement was a factor for successful application of Lean. This meant developing an awareness and understanding of processes, flow, waste and customer value.
8.4 Staff in the case study sites reported initial scepticism towards Lean as "just another management fad that would eventually fade and disappear" but the success of the approach had converted many people within a short time. However, as writing in the literature points out, each organisation may only get one chance to implement Lean and if this fails it could quickly develop a reputation for 'not working here'. Staff ownership of the Lean projects was cited in all pieces of research as a key factor to success.
8.5 The case study and pilot studies analyses highlighted the importance of organisational readiness, which had been a less significant theme in the literature. All the case studies reported an awareness of the need of change and improvement. The analysis suggested that organisations should consider if, and what type of, capacity and mindset they have for change and improvement. The lack of sustainable, relevant and related quantifiable results, particularly in the pilot studies, indicated that some Scottish public sector organisations may not currently be in a position to embrace the complete Lean philosophy. The existing literature and the pilot studies demonstrated that degrees of sub-optimal, departmental working, top-down management style and potential union resistance may all influence the effectiveness of Lean, unless these factors are addressed. It is also difficult to implement Lean in circumstances where organisations are distracted by performance reporting crises.
8.6 Management commitment, in terms of being visible and sustained , was mentioned in almost all case studies in terms of supporting the implementation of the programme, methodology proposed and driving improvements. Similarly, the two most successful pilots had been chosen partially for the reason that management had clearly demonstrated commitment to the approach used. In the third pilot, commitment was not as complete, especially amongst senior managers who were more focused on a performance management approach to improvement. These pilots demonstrated that the RIEs cannot be successfully managed unless the support is total. A failure to commit leads to lack of attendance at events, partial engagement in the change process and a visible reluctance to implement the workforce's ideas.
8.7 From the start management commitment was seen as crucial to the success of Kaizen. As one of the Kaizen team put it, the key ingredients are: total management commitment, benefits and focus on benefits to the customer, and focus on benefits to the employees and the organisation:
"The idea is to embed the approach in the organisation so it becomes the normal way to change." ( CS3)
8.8 Whilst there was wide variation in the level of resource required to carry out the improvement process and implement any changes, all cases highlighted the need for resources for both stages and for a plan to sustain this resource at staff and management level. The most successful implementations of improvement and Lean programmes required considerable managerial resource. Getting staff released from duties and other work pressures were reported as barriers in the survey, with dedication of time, a committed delivery team and appointed facilitator noted as success factors.
8.9 In the majority of cases, external support was brought into the organisation, at least to kick start the improvement programme. All respondents and case study organisations had spent money on external implementation support over a period of time. Some of the case studies indicated that although the external support was important it was only really necessary at the beginning of the programme and for initial education and in developing a manageable Lean process. Then the consolidation and development of the Lean programme could be handed over and carried out by dedicated internal resource.
8.10 In a number of cases the specific improvement programme was shaped by a chief executive or senior manager with previous experience of improvement. Therefore, Scottish public sector bodies seem to have achieved a good balance of internal and external support.
8.11 In all cases, effective clear communication to ensure participation and engagement at all levels of the organisation was seen to be crucial. Communication was a commonly-cited implementation failure in the literature. However, the survey analysis showed that through meetings, intranet, workshops and awareness-raising sessions, staff had become both engaged and aware of the results. The case studies revealed that there was an important need for the organisation to recognise, accept and create a common understanding and language, for change and improvement, which should be done through effective communication.
8.12 In the majority of case studies the Rapid Improvement Event ( RIE) or Blitz approach had worked effectively to motivate, encourage and develop an understanding of improvement within staff and management. This improvement was viewed in terms of flow, process, customer value and reduction of waste and non-valued activities. Within this approach there was a focus on implementation which was a key way of overcoming scepticism and building commitment to change.
8.13 Some of the outcomes of this approach had been excellent both in terms of tangible and intangible results. This approach and outcomes highlighted engagement with the principles of Lean as defined by Hines et al (2004) (Figure 1.1). Although, the results also showed that the tools of the Lean toolkit (as in Figure 1.1) were rarely used.
8.14 The RIE/Kaizen approach was described as 'tactical deployment' of process improvement in the literature and by the management consultants. They also suggested that process improvement was time consuming and resource intensive so, to achieve long-term sustainability of an approach and the implementation of improvements, the process improvement should take a strategic approach. This would allow Lean to be linked to broader objectives so it drives change, including improving the customer experience and promoting a lasting culture change.
8.15 Timing can also be considered as an important success factor for three reasons. Firstly, management must set realistic timescales for change programmes. Secondly, momentum for change, once established needs to be maintained:
"We continue to review - quick wins have a short shelf life." ( CS4)
8.16 Thirdly, 'threats' need to be quickly turned into opportunities:
"It is clear that a single event … caused the initial spark that made a Kaizen Blitz an appealing approach." ( CS2)
8.17 Team working was used by all the case and pilot studies in the improvement analysis stage i.e. the RIE or Kaizen event. Multifunctional and cross-hierarchical teams were used to assess, analyse and improve a process. The findings indicate that constitution of these teams was important to generate both buy-in from the participants and the staff who were involved in the process under investigation. Team work was reported by some case studies as an important element to drive the implementation of improvements sometimes represented as temporary or virtual teams or as permanent departmental teams.
8.18 Through the case studies a wide range of barriers to successful improvement programmes were identified, including:
- Lack of ownership
- Identity of improvement team members
- Failure of leadership
- Weak link between improvement programmes and strategy
- Lack of resources
- Poor communication.
8.19 The most commonly-reported barriers to improvement across all case studies were those posed by people at all levels of the organisation. At the staff level, scepticism was expressed about change programmes, especially about them being the latest management fad, and a feeling that they would not be listened to and that nothing would change. In one case this scepticism boiled down to the attitude that 'it was all about money' and cost reductions. Although the results clearly show that headcount and cost reduction was not a primary objective for any case study.
8.20 Managers, and "middle" managers in particular (often service heads), were accused of lack of ownership of the improvement process by either not understanding the processes they were supposed to be managing, not being willing to look outside their part of any process, or being too focused on operational matters to look at process improvement. Professionals, especially in health, expressed similar attitudes:
"My job as a doctor is to just make sure that the patient gets better. This is more of a management exercise" ( CS1)
8.21 This lack of ownership also led to poor selection of improvement team members. Comments were made that in some cases the wrong people were involved in the improvement programmes and not the people "really doing the job". There were also clear cases of disengagement by those who should have been involved pleading time pressures, and attempts at undermining the process by those who did attend. As one of the facilitators put it:
"The ones who did want to get involved did so." ( CS7)
8.22 Although it is desirable to have a team made entirely of willing volunteers, reliance upon a few that get involved does contain some risks. In the pilots, there were a few examples of complaints that some people were not representative of certain departments or disciplines. The literature also provides examples of teams being over-powered, with too many middle managers involved in activities instead of front-line staff. Lack of involvement also risks the scalability of Lean, especially if the programme is reliant upon professional representation, e.g. in healthcare or legal service. In these cases, the few volunteers can be overstretched.
8.23 Failure of leadership was cited by many as a barrier. Those participating were not always clear about what was really driving the change, the parameters of what could and could not be changed, and what commitment senior management had made to implementing proposals. As suggested in the success factors, management needed to set the tone for the whole improvement process and the failure to implement changes was seen as a lack of commitment by management to face up to resistance and drive changes through.
8.24 There were many comments about the "silo" culture of the organisation under consideration and, specifically in the two local government case studies compartmentalisation was cited as a barrier. This organisational issue posed the difficulty of trying to develop a more process-oriented, customer-focussed approach.
8.25 In one case there were concerns that performance indicators, by which organisations were judged externally and on which some managers' performance-related pay was based, did not reflect the values of customer focus; rather, they supported a departmental approach. The departmental approach was also cited by some cases due to the "command and control" culture.
8.26 The research also highlighted that the link between improvement programmes and the organisation's strategy was weak and that this could hamper the embedding of a culture of improvement into the organisation longer term.
8.27 A number of case studies cited a lack of resources for the improvement programme and to implement changes as a barrier to change. In at least one case the scope of the process improvement was trimmed to take this into account. There were also concerns about the lack of capacity, knowledge, experience and skill to drive and implement improvement.
8.28 As well as the barriers mentioned, some others also emerged or were found in the research which can be considered to be the reverse of the success factors. For example, poor communication was often blamed for failure of improvement programmes and to develop a culture of continuous improvement. Problems included the use of jargon, lack of a clear message about improvement, and over-control of information released. Linked to this, some sites mentioned that they needed to avoid the feeling of 'initiativists' by communicating yet another initiative. Within the survey the most frequent barriers to avoid were reported as organisational culture, a resistance to change and lack of awareness or knowledge of Lean.
8.29 This final section will draw together the findings from the research in order to answer both the objectives and four key questions. It will do this by integrating responses were appropriate to ensure that all are responded to.
What is the evidence from Scotland about the use of Lean in the public sector?
8.30 The research provides strong evidence that Lean can work within the Scottish public sector, conditional upon an effective approach to implementation. Scottish public sector organisations can use Lean to focus on developing more seamless processes, reducing waste, improving flow and developing an understanding of customer value.
What approach to Lean is being used in the Scottish Public Sector?
8.31 Two models of Lean implementation were described: rapid improvement and full implementation of the philosophy. The majority of case studies focused on the former ("Kaizen Blitz") approach, which uses rapid improvement events to make many small, quickly introduced changes. The Blitz approach was cited by line managers as favourable as it provided a faster return for effort, was more visible and challenged existing management control styles to a lesser extent. It was also evident that this approach brought favourable outcomes in terms of impact on the process and engaging staff in improvement activities focusing on flow, process, customer value and reduction of waste.
8.32 However, the research also noted that the rapid improvement approach was not considered by some consultants as the most effective method of implementing Lean. A fuller implementation taking a more longitudinal, developmental approach was favoured to allow the establishment of a sustainable Lean capability. Although RIEs may be used at times from within a full implementation, the evidence showed that RIEs implemented in isolation did not achieve the same potential.
8.33 The evidence from the case studies and literature highlight the key strengths and weaknesses of the two approaches, illustrated in Tables 8.1 and 8.2:
Table 8.1 The Rapid Improvement Approach
Can focus on tangible objectives
Less of a challenge to management style
Intensive approach diminishes resistance to change
Low investment in time and cost
Immediate impact on service quality
Does not affect all staff
Lack of overall visibility
Potential lack of sustainability
Does not cover all improvement possibilities
Shorter, simpler projects only
May not help embed culture of continuous Improvement
Table 8.2 The Full Implementation Approach
A complete cultural shift
Massive improvement potential
Sustainability of the changes
Whole system change
Can link changes with strategy
Bigger implementation challenge
Longer project timescale
Slower achievement of main results
Greater potential for resistance
Less fit with existing management styles
Can lose site of where it's going
What factors make sites suitable for Lean?
8.34 Drawing from all elements of the research, the most suitable sites to date have had high volume, repeatable tasks that allow greater standardisation and integration, supported by a less hierarchical management structure that allows empowerment and engagement of the workforce. Careful consideration of the suitability of sites is needed before a Lean initiative is launched, otherwise there is a high risk of failed implementation.
8.35 While all the case studies reported success in process improvement, five cases claimed that this work was helping to drive the organisation towards a culture of continuous improvement. In the other three cases, the improvement process was more instrumental, helping the organisation to meet short- to medium-term management objectives. While these cases can be classed as successes in their own terms, it is not clear how sustainable their approach might be and how effective they can be if the exercise does not fundamentally change the way the organisations function.
8.36 Some sites are potentially unsuitable for Lean if the organisation is not in a state of readiness for Lean. Organisational readiness is a mix of many factors, including the acceptance of the need to change and the ability to develop a change capability. The notion of organisational readiness together with its factors and characteristics have not been reported significantly in earlier literature.
What factors are relevant to the development of readiness for Lean?
8.37 There is no doubt, based on the evidence of the case studies and pilot studies, that the Lean approach can be used across a wide range of organisations and processes. However, in order for Lean to occur three key factors under the concept of 'organisational readiness' are necessary:
- An awareness or realisation for the need for improvement
- The capacity within the organisation to deal with change
- An organisational culture which is receptive to understanding the customer and process analysis and is able to use data to drive improvement.
8.38 The research shows that all cases studies had a common understanding of why the organisation needed to change. Also they could report what the drivers and outcomes were which the organisation needed to achieve through the improvement process. However, in some cases, whilst there may have been an awareness of the need for improvement there was not always a general culture of improvement.
8.39 The more 'successful' public sector organisations also appeared to have, and planned the capacity for, improvement by having the managerial commitment for driving the improvement process, the in-house skills to manage the improvement process, and staff knowledge and skills to participate in the process and implement the changes.
8.40 Case studies brought their previous experience of change which ranged from no previous experience of improvement or experience, to previous initiatives that had failed. This experience allowed the case studies to prepare the ground for the current improvement process.
Which Lean tools and techniques worked in the Scottish public sector?
8.41 The evidence from the survey, case studies and pilot studies highlighted that, to date, a complete tool-based approach to Lean implementation in the public sector has not taken place. However, what was evident was an engagement with the principles of Lean and limited use of its range of tools. Particularly, four concepts underpinned much of the improvement work across the case studies, although, they were often expressed in different ways:
1. Demand and value analysis - This broadly meant trying to understand the needs of the customer or end user of the service, both by analysing patterns of service to define volume and by direct consultation with them to define service quality.
2. Waste elimination - Looking at what adds value, from the customer's perspective, and taking out any steps or activities which did not add value. By eliminating waste case studies reported on having a better understanding of flow, process and the customer.
3. Process improvement - This meant looking at a service as a whole process from the customer's perspective rather from an organisational point of view in order to help identify customer value and waste.
4. Team working - occurred in many case studies, more in the process of analysis than as part of a solution. However, in some cases the process improvement implementation resulted in having to establish teams, or improve the working of existing multifunctional teams, or creating 'virtual teams' to drive the improvements within the organisation.
8.42 The first three principles were repeatedly noted as a means by which Lean had been successful in generating an understanding of customer value, flow, process and the need to reduce waste in the Scottish public sector.
8.43 The most ubiquitous (and successful) tool was process mapping in a variety of guises. Other tools used were process capability, time observations and cellular layout. Many case studies resisted the idea of a 'Lean toolkit' and so used a much more analytical approach to inform the improvement process.
What types of issues were being tackled by the Lean initiatives?
8.44 Every case study had its own reasons, some external, others internal, for embarking on an improvement programme. These included:
- Introduction of new ICT
- Commercial competition
- Efficiency - more work for the same resources
- Poor processes and financial problems
- Improving the customer experience - and meeting a national target
- Becoming more customer focussed
- Getting more for less through process improvement and staff empowerment
- Changing policies
8.45 Linked to these drivers, for some cases, were specific outcomes and targets, representing the way in which the problem was presented generally at a process level but sometimes feeding up into a higher level target. For example:
- Speeding up processing time for a planning application
- Reducing the time taken for a patient to be referred between two departments
- Simplifying the process of responding to a report of an abandoned vehicle
- Doubling the caseload with the same number of staff
- Effective implementation of a new ICT system
What lessons are there for successful implementation?
8.46 The main lesson to be learned from the case studies is that there is no single right way of implementing improvement programmes in public sector organisations. However, although some factors support a successful implementation (see critical success factors), others should be avoided (see barriers).
8.47 The commentary to one of the health case studies neatly summarises the key critical success factors in implementing Lean thinking effectively:
"Care should be taken to include the people of the organisation during Lean transformation for successful implementation. As continued success of the Lean initiative requires a cultural change within the organisation and this may need continuous organisation learning. Also Lean cannot be implemented as a stand alone and the aims of the Lean transformation have to be in line with the strategic goals of the organisation." ( CS1)
What are the benefits of Lean?
8.48 The evidence from the Scottish public sector indicates that Lean should be used as a means to achieve greater output, faster, with higher quality, with the same resource, rather than a method of rapid unit cost reduction to release cash or create job losses. The evidence also shows that it gives front-line staff a better understanding of the end-to-end service delivery process, which increases morale and motivation, and better customer focus.
8.49 Can Lean work in the public sector? Yes it can, but Lean in the public sector was found not to be the adoption of Lean from manufacturing. Scottish public sector organisations engaged with principles of Lean at an operational, not strategic, level and not through using the tools developed from manufacturing. This indicates that public sector organisations adapted the concept of Lean. Other evidence that Lean can work in the public sector was the outcomes which were, in some cases, dramatic and, in all cases, critical in developing an improvement culture. This would indicate that the time is right for public sector organisations to engage with the concept.
8.50 So, how can Lean work in the public sector? Lean was found to work in the public sector by focussing on the principles of reducing waste, improving flow, developing an understanding of the customer, developing a process view, often though a rapid improvement event. Through the case and pilot studies, organisational readiness was also found to be critical. The analysis suggested that organisations should consider if they have a capacity, mindset and resources and commitment for change. Finally, for Lean or improvement to be sustained in the public sector the objectives of the programme should be integrated and linked into the strategy of the organisation.
8.51 Can Lean be replicated? The findings supported that Lean cannot be replicated in terms of the process outcomes. In a service environment variation exists and it cannot be removed as in manufacturing, so the focus needs to be managing variation as well as standardising the processes. However, as noted in the case studies, there can be replication of the Lean implementation methodology but even then adaptation not adoption was experienced in terms of the Rapid Improvement Event ( RIE). External support and experience was used in most cases to support the implementation process.
8.52 Can Lean embed a culture of continuous improvement? The research clearly shows that the RIE/ Blitz approach started to generate an improvement culture and engagement with the Lean concept. Lean cannot be sustained unless continuous improvement becomes an integral part of an organisation's cultural norms. The habit of continuous improvement can only be maintained through clear communication, ownership of improvement throughout the organisation and management commitment. The case sites who were more engaged with Lean considered it not as a short term fix but a longer term approach which was part of the organisation's strategy and driven through leadership. Although the literature quotes case examples of manufacturing organisations that have sustained continuous improvement for many years using a Lean philosophy, the history of Lean in the public sector is too recent to be able to identify Lean programmes that have been sustained for many years. However, this research strongly indicates that some of the case sites and pilot sites in this study do have the potential to achieve a sustained Lean implementation and culture of improvement.