Lean thinking for peak public sector performance

By Eilish Henry, Head of Practitioner Services, The Manufacturing Institute.

Posted Sunday 25th April, 2010

Eilish Henry, Head of Practitioner Services, The Manufacturing Institute.

Lean thinking, and working, has had huge buy-in from across the manufacturing sector for many years now and, more recently, there are increasing numbers of organisations from service and public sectors who are beginning to understand that lean principles and approaches are just as relevant to them.

My own background is in the public sector and after more than 20 years in a central government department, I recently started working with the Manufacturing Institute (TMI) which is driving lean transformation both in industry and the public sector. For me, there is a strong sense of continuity because for the last four years of my life as a civil servant I was helping to introduce lean principles and approaches to a key government department.

In recent years, four of the biggest central government departments: Her Majesty's Revenue and Customs (HMRC); the Department for Work and Pensions (DWP); the Ministry for Justice (MOJ) and Ministry of Defence (MOD), have introduced lean working to at least part of their business operations.

Initially, at least, there was a huge amount of scepticism about whether or not lean principles were relevant to the public sector. Indeed there was a firm belief amongst some staff in those departments that precisely because it worked in manufacturing meant it wasn't appropriate for them and their environment. The -we're different syndrome was deeply embedded. It is interesting to note that in my short time with TMI this refrain has been repeated - across all sectors whether in manufacturing, food, pharmaceuticals or healthcare.

In the early days of introducing lean to the public sector, the trade unions were not convinced that lean principles were right for their sector and their members. However, as their knowledge and understanding of lean increased, their concerns became more focused on how each of the departments was introducing lean rather than whether or not the principles were relevant.

Resistance was also aired in certain national press, who despite their criticisms of public sector inefficiency, were at times unsupportive of the introduction of lean working and there were numerous stories about -black tape and bananas! Very entertaining at the time, but missing the fundamental point about what the departments were really trying to achieve - a greater focus on customers and better outcomes for them, allied with increased internal efficiency and effectiveness.

Given the significant level of internal resistance and the external, often uninformed, criticism, why did these departments continue their lean quest? Why did they embark on the enormous task of trying to change not just how their people did their jobs but also the underlying organisational culture - how everyone in the organisation behaved?

As with any other sector there were several significant drivers for change, which are, if anything, even more relevant today than they were four or five years ago. The first of these was undoubtedly severe financial constraints - a reduction in departmental budgets often following on from a major structural change, like the merger of Inland Revenue and Customs and Excise to create HMRC. The new department was required to find post-merger efficiency savings of some 12.5%. At the same time they recognised the need to achieve better outcomes for customers and a real improvement in the quality of their outputs to customers. Essentially they needed to do more work to a higher standard, at a lower cost and with fewer people! Most readers whether in the public sector or not, will recognise that challenge - and this is where lean thinking and principles come in.

Customer focus is at the heart of lean and can underpin huge shifts in service improvement. A big challenge for HMRC was the inability of their people to recognise that they have -customers. They could see that they had taxpayers, but not -customers. Often the reason for this was that they equated -customer with -choice. In HMRC many staff struggled with the concept of -customer since taxpayers couldn't choose another supplier! This lack of 'customer' awareness and responsiveness is echoed in numerous other public sector organisations.

Of course choice is a key element of -customer but a much more important one is -service and HMRC staff really began to understand that they did indeed have customers when they saw that they provide a service and that the service has costs attached which taxpayers/citizens pay for! None of us want to pay more tax than is strictly necessary and we want our public services to be as efficient and effective as possible to minimise the tax burden.

As these departments introduce lean, they have been seeking to identify and eliminate from their processes what is waste - from a customer's perspective. This is a challenging process of analysis in any environment, but even more so when some of the waste in the process is present because of process or regime failures - particularly where the architects of those failures are very eager to 'save face'.

It is reassuring to read about progress being made in these four key departments. As citizens we need to continue to insist on improvements in the level of service we experience from government departments. But we must also be willing to recognise that they are making real efforts to build continuous improvement cultures.

As we see from the best exemplars in manufacturing, really embedding lean principles in an organisation is not a -quick fix solution to stringent budget cuts, but rather requires a long term commitment to changing thinking and behaviour by all parties. This has consequences for the frontline staff and managers involved, but also for the leaders at the top of the organisations - which means wholehearted commitment and involvement from senior civil servants and other key stakeholders, such as government ministers.

The Manufacturing Institute www.manufacturinginstitute.co.uk
is a leader in operational excellence - delivering end-to-end lean transformation programmes - aligning best practice lean methodologies with organisational strategy to achieve sustainable improvement and profound cultural change. The organisation has a 15-year track record in providing best practice implementation support and skills development - partnering public sector organisations and blue-chip enterprises in the UK and Europe.

This article was posted on Sunday 25th April, 2010.

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