This article first appeared in Planet Lean.com Book Club II
FEATURE – In May, the author told us how the IT department at Fuji Xerox Australia used book clubs to engage people in lean. In this update, he explains how the efforts were brought over to a different area of the business.
Words: Mike Schembri, Corporate Services Manager, Fuji Xerox Australia
When my previous article for Planet Lean came out, I had just taken over the Corporate Services function at Fuji Xerox Australia – which includes IT, Order Management, Billing and Collections. In telling you about our experiments with book clubs, I mentioned how I planned to bring lean thinking (and the book clubs, of course) to that area of the business as well.
Lean had proved very effective in a technical environment like IT, but as I moved on to a more transactional setting, the possible outcome somehow became less clear. Progress to date has varied across teams, as one would expect, with some great successes, several wonderful a-ha moments, and – luckily – relatively few disappointments.
One of the best outcomes of our new lean adventure in Corporate Services so far was the progress made by our Billing team. When we introduced lean in the department in late 2016, we had a considerable processing backlog, which caused significant disruption to our customers in the form of late billing, back billing, and so on. As the backlog kept climbing, we realized how much we had fallen behind. Through lean, and with no additional investment, we managed to reduce the contract backlog by over 98%. As a result, we have been able to hold our processing backlog at more than 25% below our organizational performance target for three consecutive months already.
And to think that all this began with a Book Club! Leaders in Corporate Services started with a monthly study group focusing on Michael Ballé’s Lead with Respect – the same title we had used in the IT department – and before too long more book clubs had been launched within several of the teams. Some of our leaders immediately embraced lean thinking with enthusiasm, quickly identifying with the bottom-up ethos it promotes, while others struggled. Some even chose to leave us. Around that time, two staff members were promoted to roles in Billing Services – which gave us a team of three “believers”.
Here’s an interesting development. For many years, Billing Services had relied on a dedicated small team of Subject Matter Experts (we call them SMEs) who provided various daily and monthly reports on errors made and or backlog i.e. contracts unloaded etc. The SME team also acted as an escalation point, handling difficult contracts and tackling problems for the team.
During our study we noticed where ‘Stevey’ the manufacturing supervisor from Lead with Respect had established a training dojo and spent the majority of his time training operators to identify and manufacture good parts rather than simply resolving issues and managing escalations. As our leaders embraced lean, they started to engage the SMEs with our teams in a different way – seeing them as coaches, rather than consultants. This, in turn, allowed all team members to learn the process more deeply, build their skills set, and boost their knowledge and engagement.
This initial change in approach stabilized the process and made Billing Services a nicer place to work. Morale significantly improved, with many people from the rest of the organization began to notice the energy and “the buzz” developing on the floor. Despite the progress we had made in dealing with our backlog, however, we reached a point where performance began to plateau. There seemed to be a level of backlog we could not clear!
Around the same time, we changed the cadence of our daily operational management efforts, to reflect the shift from top-down to bottom-up that FXA was experiencing, as well as our new definition of customer value (“Timely and accurate billing”). The Billing Services team then started to huddle every day, record daily orders, throughput, backlog and aged backlog, and share issues and wins from the day before.
An important sentence by Andrew Ward, the “lean hero” in Lead with Respect, came to mind: “…it’s important to remember that the value of seeing mistakes is not about punishing individuals but understanding how the system creates errors. It’s vital that leadership’s attitude must always be that operators … are not guilty.”
Initially our teams assumed the daily measurement was simply a way for leadership to control what they were doing and yell at them so that they’d work harder. However, as we built trust (exactly by not yelling at them), the team started to share more openly and to use the metrics boards and huddles as a way to kaizen the process. It became clear to us all that it is a responsibility of the leadership team to remove the obstacles preventing team members from doing their jobs, by leveraging their experience in, knowledge of and relationship within the organization.
Once the team started working with the real performance numbers daily, without fear of the consequences, we began to progress again and broke through the performance plateau we had been stuck at. The teams’ new-found willingness to surface problems fully each day allowed us to look deeply at the system and investigate new and long-standing performance issues with each other and other upstream teams, to improve order quality and information flow. Performance outliers and deep issues that had been ignored at best – and hidden at worst – were exposed and worked through within our teams. “Not who, but why” became our tagline as we investigated issues: we don’t need to know who caused a problem, but how it happened, if we are to prevent it from reoccurring in the future.
Unsurprisingly, as we started to load contracts in a timely fashion, billing accuracy improved by 50% and cash collection improved in parallel. In our minds, introducing daily measurements was a show of respect for our people, because it makes their job easier by allowing them to action issues in “real time”. Indeed, the backlog reduction was a great success for the team, which we celebrated with them. We are now evolving to measuring billing flow and accuracy rather than just the backlog of unloaded contracts.
What’s funny is that we were covering Chapter 2 of Lead with Respect just last month in our book club (we re-started the book for some of our people, who hadn’t previously participated) and realized that the lessons it contains had been guiding us all along through the backlog experiment. The situation Andy and Jane discuss – in particular breaking down the work and measuring daily – is an exact reflection of what we did. One more time, the book had inspired our thinking and informed our next steps.