Tag Archives: Lean Six Sigma

Super7 teams benefit from Lean Operational Management

Super7 teams benefit from having the standard processing times and performance dashboards in place. These elements from Operational Management help a Super7 team in steering itself. When these basic elements from Operational Management are missing, implementation projects tend to take more time. It takes longer before the Super7 teams become autonomous.

Super7 Operations claims to be the next step for Lean in financial services. But how much does it owe to the previous Lean wave in financial Services? Which elements from Lean Operational Management are essential for the success of Super7 Operations?

The Next Step for Lean builds on the previous step

The way I see it, Super7 Operations is the logical next step for Lean in financial services. The first lean waves in financial services were often aimed at introducing standardized work,  standard processing times, and making performance visible in performance dashboards.

Standard processing times make the work plannable. In Lean Operational Management, managers use them to plan the work for their teams. And afterwards, actual production is compared with planned production to calculate performance*. The manager then retains control through performance dashboards.

As I explain in my book, Super7 teams are steered on output. And, in Super7 Operations, the teams get the freedom and responsibility to plan their own work. However, both output steering and planning your own work becomes much easier when standard working times and dashboards are in place.

In Super7 Operations, the customer determines what needs to be done: the workload is based on the actual demand from that day. The manager sets the boundary conditions: that all requests are processed the same day (Today In, Today Out, or TITO). Work is often planned on forecast. But, to make planning decisions, the team needs to be able to match the forecasted workload to their planned capacity. And this can only be done when the forecasted number of customer requests can be translated into hours of work with the help of standard processing times.

Dashboards are equally important in Super7 Operations, but primarily for the teams themselves. They need to be able to see if all their Continuous Improvement efforts are paying off. And dashboards can be used to constantly raise the bar, both by the team itself and by the manager. Too many green lights become a red light, as the saying goes. This means that when the daily targets are met every day, this should lead to a more challenging target. More service in the same time for instance, or doing the same work with less capacity.

When standard processing times and performance dashboards, two basic elements from Lean Operational Management, are missing, implementation projects tend to take more time. It takes longer before the Super7 teams can make the decisions that make them truly autonomous.

Menno R. van Dijk

*Performance in Financial Services is often expressed in Total Team Effectiveness, a derivative of Overall Equipment Effectiveness (OEE) which is the standard within manufacturing.

 

More on Improvement Kata for Lean Super7 Operations

As described in earlier posts, Kata coaching and the Improvement Kata are especially useful in the implementation of Super7 Operations. As you know, the theory and examples of Kata coaching can be found on www.lean.org/kata or in the excellent books and you-tube posts of Mike Rother. In this blog post I’ll explain the Improvement Kata in more detail.

Traditional improvent is project based – see figure 1.

figure 1 - the old way of improving

figure 1 – the old way of improving

The Improvement Kata doesn’t plan the whole route: only the next target condition is clearly defined. See figure 2.

Figure 2 - the Improvement Kata

Figure 2 – the Improvement Kata

The Improvement Kata doesn’t tell you how to get to the next target condition, let alone how to get to your desired situation. It doesn’t tell you which steps to take to reach this year’s target. The Improvement Kata lets you discover the route as you go. See figure 3.

 

Figure 3 - finding the path to improvement

Figure 3 – finding the path to improvement

The improvement Kata is a radically different approach to improvement. It does however show strong similarities to Agile or Scrum software development – but, the improvement Kata is applied on the shop foor, not in project teams or development teams. For me, it’s the best way to get to a true learning organisation and continuous improvement. And only a learning organisation that can improve continuously is capable to cope with the ever changing demands of customers, especially in the current market for Financial Services.

 

Super7 Operations - the Next Step for Lean in Financial Services ; a book by Menno R. van Dijk

Super7 Operations – the Next Step for Lean in Financial Services ; a book by Menno R. van Dijk

Menno R. van Dijk.

How to apply Kata Coaching in implementation of Lean Super7 Operations

 

Kata coaching is especially useful in the implementation of Super7 Operations. The theory and examples of Kata coaching can be found on www.lean.org/kata or in the excellent books and you-tube posts of Mike Rother. Recently, I’ve applied Kata coaching during an implementation project of Super7 Operations.  Every week, I used the Improvement Kata questions to challenge the team managers to make one improvement step on each of the 7 principle elements of Super7 Operations. And in turn, the team managers have used Kata coaching questions to get their teams to improve. The effect of applying the Kata coaching questions to the 7 principles of Super7 Operations was impressive: not only did this lead to exiting improvement experiments on the shop floor, but it had a profound effect on morale as well.  I have found that Kata coaching is an effective way to get and keep things moving towards the desired direction. It just isn’t possible to implement perfection in one blow, and this isn’t any different for Super7 Operations.

The 7 principles of Super7 Operations:

The 7 principles of Super7 Operations

Principles of Super7 Operations

  1. Customer is central: The Super7 team has a goal that is relevant for the customer.
  2. Flexibility in skills and capacity
  3. Team manager steers on output and is supportive to the Super 7 team
  4. Daily rhythm and quick response to disruptions
  5. Super 7 team is autonomous in work distribution and in imporving the way of working.
  6. Continuous improvement of performance, supported by planning and forecasting.
  7. Visible management to create openness, transparancy and Super 7 team pride.

 

The Kata Coaching Questions (my own free interpretation – please refer to www.lean.org/kata for the standard):

  1. What does perfection look like to you on this element of Super7 Operations?
  2. How does the current situation look like?
  3. Where do you want to be next week on the development of this element of Super7 Operations and, what obstacles are in your way?
  4. What action or experiment will you undertake to get to where you want to be next week?
  5. What do you expect from this action?
  6. When will be able to evaluate what you have learned from this action or experiment?And afterwards:
  7. What did you learn from this action / experiment
  8. …start again at step 1

 More on Super7 operations can be found in my book: Super7 Operations – the Next Step for Lean in Financial Services.

Super7 Operations - the Next Step for Lean in Financial Services ; a book by Menno R. van Dijk

Super7 Operations – the Next Step for Lean in Financial Services ; a book by Menno R. van Dijk

Updated White Paper: Team Targets or Individual Targets for Super7 Operations

Super7 Operations is based of small teams, working on a common goal. What does that mean for their team targets and incentives?

A lot has been said about bonuses and target related incentives, the past few years. Do they lead to irresponsible behaviour and risk taking within financial institutions? Should managers from state-owned companies, or companies relying on state support, get a bonus if they meet their targets? Interesting questions; however, that’s not what this blog is about. How bonuses and incentives influence the way teams work together, especially in Lean organisations, now that’s something I’m very passionate about.

In my experience as a Lean consultant, I have often found that organisations struggle to maintain the initial rate of improvement: when autonomous production teams, lean quality circles or TPM-teams are first formed, the performance improves spectacular. 20%-50% increase in productivity or machine output is achieved almost every time. In some exceptional situations, I even encountered productivity increase of over 100%. Enough to exceed my clients’ expectations, but my goal was always to get to a state of ‘continuous improvement’. This is when the production teams continue to improve: relentlessly reducing waste, again and again improving their standards.

I strongly believe that financial team incentives can play an important role in making the final step towards continuous improvement. That is why I did this literature search: to find out if my believe is supported by reliable research.

My conclusion: Several publications, especially on effectiveness of ‘Operational Excellence teams’ (e.g. TPM teams, autonomous teams, six sigma project teams, etc.), confirm that team incentives are more effective than individual targets. However, I had to adjust my strong believe on two points:

  • Also individual targets have their merits, and a combination of team and individual targets may well be worth considering
  • Targets and incentives aren’t the only driver, nor the main driver, for success of Operational Excellence teams, and they should be part of an integral approach

New White Paper: optimal team size

Lean and Super7 Operations work with small, autonomous teams. Exactly how small should our small autonomous teams be?

This is the question the manager of the central back-office of a large Dutch retail bank asked me, when I proposed the idea of autonomous team to him. At the time, I was working on a project to introduce customer focus and to realise same-day processing in his organisation. I came up with an innovative organisation design, in which small teams are responsible for their work for that day, i.e. all customer request of a certain type that the bank had received that day. After successful pilots, the organisation wanted to introduce this way of working for all (ca. 400) employees. That’s when this question came up…
 
From experience, I knew that the teams shouldn’t be too big: the pilots were done with teams of 5 – 7 persons. However, factual substantiation was needed. A quick search showed me that a lot of research had been done on Agile / Scrum teams, so that’s where I started. And this article is the result: a literature search on the optimal team size for autonomous teams.

My conclusion is: Organisational design isn’t an exact science. As an engineer, I would have loved to have found statistically sound measurements on the effectiveness of teams of different sizes – but in truth, I think that team size isn’t the main driver for team effectiveness. However, if your customer, the type of work your customer asks you to do, requires your organisation to work in small teams, I would suggest – as I did to the manager of the banking back office: small teams consist of 5 to 9 persons. Or, If the flexibility of your workforce allows this, as it did in the case of the banking back office: flexible team size, ranging from 5 on slow days to 9 on a busy day.

At the moment of writing, the banking back office has implemented the new way of working, and has asked me to do a ‘check-up’ on effectiveness of the new organisation. I can’t wait to start: Ï wonder what I will find, but I bet that it will be inspiration for several articles on CoOperationalExcellence.nl!
 

White Paper: Optimal Team Size

Cooperational Excellence: what’s in a name?

Cooperational Excellence: People working toghether in small teams to create excellence in your operation. This may be nothing new under the sun for manufacturing and assembly plants: mini-factories, autonomous teams, u-cell manufacturing, quality circles etc. have become the standard in the last decenia. Especially in automotive, where off course Toyota still sets the standards (Toyota Production System).

In creating Service Excellence, these methCooods and organisational principles haven’t been applied so widely. Recently, I have implemented autonomous teams in a back-office of a large financial service provider, with even for me unexpected success: costs are down, queues and ‘inventory’ have almost completely dissapeared – which means waiting times for the customer times have also – and employees and management are enthousiastic about esponsiblitly on the ‘shop floor’ instead  top-down management control.

I have named this, the application of manufacturing-style teamwork in administration and service, cooperational excellence: working toghether in small teams in close cooperation, to achieve operational excellence.

If you want to know more, contact me, or just check regularly for new posts on this website!