Shortage of skills, not yet – but very soon – a wake up call (part 2) | Wiegand’s Watch

This is a translation of the bulk of Bodo Wiegand’s latest newsletter, about Lean in Germany, followed by my comments:

“In Part 1, we discussed the possibility of becoming more effective in your own work environment by stemming the flood of email and reducing the extent of meetings. In Part 2 , we want to focus on how you can optimize cooperation between employees and departments.

In production, there are precise procedures and instructions , on how a product is to be made. There, the processes are stable , documented and visual. We have not considered this to be necessary in support departments. Everyone works as he sees fit , then delivers when he is ready and at the quality he is capable of.

Sorry – in administration, we produce nothing .

We don’t! Or do we?

In any case, work is not done according to a plan or delivered just in time at a precisely defined quality. Don’t we need to? We do! We need to gradually start to handle administrative processes like production processes – because we need more effectiveness and efficiency on our office floors to reduce skill shortages and remain competitive .

It is not about takt in administration but about flow and on-time delivery. Run time, interfaces, and flexibility are the principles. I can already hear the staff complain in Development or in Construction: “For us no project is like any other – so you can’t define processes , let alone standardize. And yet 7o% to 80 % of the activities are routine and repetitive, consisting of foolishly long meetings and secretarial or travel agency work that is unrelated to project content.

Defining and standardizing the processes of development and construction saves employees valuable time , while proceeding with fixed rules and checkpoints prevents errors or detects them faster, improves the quality and timeliness of the work, and avoids interface problems, for example in making prototypes or starting up manufacturing.

I can already hear the complaints of managers in Human Resources ,  Information Technology, or Accounting : “We produce nothing – we can’t optimize anything.” The most beautiful expression I frequently hear from this faction is “Mr. Wiegand, without us, nothing runs here .” And then when I ask , what products do you make or what services do you render ? Then I see usually only blank stares.

Hello! Is hiring, challenging, and coaching employees not a service? Are indicators that show facts, or figures that support decisions not defined products? Or implementing software , delivering training, and other support functions? Of course, these are products and services.  Can we describe these products, deliver them more efficiently, standardize them, define quality requirements, and visualize their processes?

Yes, we can !

So what is the difference between the production of goods and the products in the so-called indirect areas?

None – except for the fact that the first are visible, tangible, and palpable, while the product of Administration is information – to interpret,  invisible and intangible. If it is possible, therefore, to make the information visible and to define it , then you can treat it like a product and make the processes more effective and efficient. And why do we not  do it?

We had the same problem in production 20 to 30 years ago. Processes were previously under the responsibility of  master craftsmen who delivered as they saw fit. We had to define the processes, specify interfaces, and establish quality, formulate work orders and convert from the functional organization of workshops and production areas to an organization along manufacturing processes.

I remember vividly how the Craftsmen, Workshop Supervisors , and Production Area Managers fought and defended their kingdoms. It was a long, hard struggle. Today, however,  less than 10% of companies are still aligned functionally in production. They all fought to the end, against better judgment, against the greater economic performance, and for their kingdoms.

This is what we face today every day on our office floors. The same arguments are repeated. As an acccountant said, “If we move to a process-oriented organization, the specific know-how goes down the drain.” By the way – the last major innovation in accounting — breakeven analysis —  is more than half a century old. So what kind of know-how must be centrally held, promoted, and protected ?

Do not get me wrong — we need accounting to measure our success , but not in an ivory tower, but on the spot, so you know what you need to measure and therefore can support the decision makers , thus giving guidelines to your trade (see also my article in the Book: The accountant as in-house consultant).

So we anchor the controls in the process , where  needed , and not in a functional department. If we want to raise the potential in the indirect areas , we must not look at the individual functions , but at processes across functions and optimize the functions themselves. Now you know now why it is so hard to find support for Lean Administration. But, as 12 years of Lean Administration consulting have shown , it pays. Here are a few examples :

• Today, 900 employees in Development and Administration are doing work that used to require 1,300.
• Capital goods are shipped six months earlier.
• A service center saves €17M.
• A pharmaceutical company handle 20% in sales without adding employees.
• A government office reduced processing time from three weeks to two days .

Now how is this done? It starts with process mapping, defining products , analyzing the task structure and the job  structure,  and then optimizing the value streams . Quite simple – or not?

Unfortunately,  not quite that simple. You can make many mistakes. I have seen many process maps. Some were created from an IT perspective, others from the organization’s point of view — but why not from a customer perspective?

Others avoid analyzing the structure of the activity usually with the argument “Not acceptable to the Works Council.”

What a joke!

We have been implementing Lean administration in companies for 12 years and have never had problems with the Works Councils due to an activity structure analysis. Mostly we were rather supported with the motto: “Finally in this area something is happening.”

Often the products are not defined from a customer perspective. The optimized value streams are contradictory and  watered down by compromise at the interfaces and turned into overcomplex processes.

Why ?

Out of consideration to individuals and functions. Lean Administration projects rarely succeed from the inside out , but require external coaches to bring to light self-interests and put the process in the foreground.

You should however not be deterred by these difficulties . Especially with projects in Administration, the five success factors I so often stress  are:

• Planning
• Leadership commitment
• Holistic approach
• Resolute implementation /change in mindset
• Measurement

The potential is large and success easy to achieve. You and your colleagues just have to really want it and, of course, start properly. “