Lean – Werner Roth

What have horses got to do with business value?

You have probably heard the famous phrase: “If I had asked people what they wanted, they would have said: faster horses”. This sentence has been put into Henry Ford’s mouth since the 2000s. It probably didn’t originate from him, but it fits perfectly with his Ford Model T, which triggered a revolution in transport and the manufacturing industry from 1908. This phrase is often used to emphasise that it is better to ask an expert.

I disagree with this for a number of reasons, see more on this later. In this article, I would like to use this example to illustrate the difference between output and outcome. These terms are often used in Lean-Agile courses. Output is the scope of services that, for example, an IT service provider provides according to the contract. Outcome is the proof of effectiveness that the customer must provide in the traditional service view based on the output: the value created.

If you ask people who have no experience with the agile culture after a training course what the difference is between output and outcome, they usually say that it is almost the same thing. Output is the basis, so to speak, and outcome is a kind of stardust on top of it. Yet the two terms are very different in essence.

Back to the year 1908: A traditional service provider asks the customer what he wants as a means of transport (output) and receives the answer “a fast, enduring horse”. The customer’s consultant tries to avoid grinning and then explains what is in his portfolio.

When a consultant for adaptive services asks what outcome the customer wants to achieve with the means of transport and the answer is: “I dream of a fast and enduring horse”. This horse vision is not perfect, but it is an alternative whose value can be determined. With the “fast and enduring horse”, value potentials can be identified. For example, the farmer can offer his products on more distant markets. With the value potential, alternatives can be put together and developed; whether the matter goes in the direction of the T-model is decided by further development.

This is precisely the difference when you traditionally ask for an output and do not encourage a discussion about the outcome. The reasons for this are manifold and can also be internal to the organisation if IT is only seen as a support function and people think they know enough about solutions from other sources. This means you have to live with fast horses.

I know ideas of “fast horses” well. It’s great when people dare to do this. If this turns into a discussion about values and proof of effectiveness, it brings to light a lot more suitable alternatives. This is where innovation can arise.

Bureaucracy and rules away, correct?

At the moment, people often say that bureaucracy needs to be reduced. That’s a good idea in general. However, in one interview I heard an entrepreneur throw away the baby with the bathwater. He demanded that many of the rules that he believed had been invented by politicians and the EU should be abolished in order to finally be able to work properly. These included important rules that, in my opinion, do not create bureaucracy, one after the other.

I actually think it’s important to have rules in the form of laws or internal policies. I don’t want hotels to store my data for as long as they like or for companies that are particularly careless with IT security to get off the hook if they lose my data in a ransomware attack. It is also damaging for the economy if we have no basis for security in these areas.

However, it is crucial that wherever regulations cause effort, this is minimised as much as possible. If in doubt, data collection should be avoided. Processes must be analysed for waste and what remains must be automated. Rules also need to be reviewed for their value every few years. Perhaps other rules have changed the situation. The same applies here: if in doubt, throw the rule away.

In companies, but also in public administration, I would like to see pragmatism; there must be an authority that can interpret and change a rule. I remember an occasion years ago when I was responsible for part of the IT operations. There was a major incident and we really needed all hands on deck.

Finally, an external technician came to the data centre for a repair and a member of the support team asked me who we should now detach and send to the data centre with the technician. According to the regulations, the trainee I suggested, who had been employed for 3 months, was not allowed to go with him. In my opinion, this was simply not foreseen and the wording in the regulations was unfortunate.

We briefed the trainee and let her take on this task. I informed the IT management in writing and a few weeks later we amended the policy. That’s what I mean by pragmatic. Understanding what was meant by the rule and courageously taking a diversion. Rules have a purpose, they have to be simple, practical and adapted.

No circular wait

Sometimes you find a very unorganised tool landscape at the customer’s that costs the organisation enormous resources on a daily basis and makes proactive work impossible. In particularly financially weak IT organisations, old tools are often held on to for too long; in relatively wealthy IT organisations, tools are purchased first and integration can then take place later.

Often, even essential information is missing in the processes, which would have to be entered twice between the tools or manually reconciled. In particular, things like manual tracking or monitoring are still manageable when there are only a few open tickets, but virtually explode when many incidents have to be processed.

The stories of how exactly these obstacles came about, why adaptation and integration failed, are often different. But what I see in common is that these organisations have learned to wait for each other. For example, an improvement campaign ends with the conclusion that manual processes cannot be replaced at the moment because another division will soon be introducing a new tool.

Or because the service provider will probably be replaced in a year and a half. Then you can still switch off the manual processes. Often there is a wonderful cycle of constant variation in which there are always new reasons to wait.

However, there are always possibilities to mitigate existing shortcomings. Especially if you know your organisation well, you can easily assess what is worth doing. The new HR tool will certainly take months to decide. But modernising the old leave process (on paper) and trying out the new process can be worthwhile.

I can only recommend introducing “No circular wait” as a rule or checkpoint. Nothing should be omitted just because you are waiting for others. In such a case, alternative solutions must be identified. You can always find a small sustainable improvement.

Primarily, small continuous improvements also help immediately. Secondly, they also increase the pressure to gradually get to grips with the big solution, e.g. the permanent and comprehensive replacement of a tool. In my experience, thinking in alternative solutions also changes the culture of becoming more innovative and creative. Let’s make it happen.

P.S.: The circular wait solutions often reside in the blue quadrant, the transformation into manageable green solutions is difficult, but can usually be mastered iteratively.

New performance is what we need

I read a comment the other day that in addition to the whole discussion about New Work, there should also be a discussion about New Performance. Or another posting that you have to work besides all the New Work because you get paid for it. Either this is a new narrative to discredit New Work, or it is a misunderstanding. New Work is not an addition or benefit in the form of cosy offices and 4-day weeks.

However, if you are not familiar with New Work and have never met a team that uses these methods to increase efficiency, then I can very well imagine that this impression is likely to arise. New Work is not about performance versus benefits. Professor Peter Kruse once said that self-organisation is the highest form of professionalism. That really emphasises a core aspect of New Work.

For me, it was also quite a learning curve that began in 2016 out of considerations of efficiency in the team. Back then, I was a perfectly ordinary hierarchical team lead in a presales unit. I assigned people to tenders and prioritised their work. If someone fell ill, I had to organise a replacement. Back then, I couldn’t imagine what the team would look like after a few years.

Developing lean-agile methods with the team and increasing diversity in the team was a long journey with many setbacks and moments when I wanted to give up. But there were also moments when team members encouraged me. I remember small moments of triumph and a great moment of happiness after about 3 years.

It was a summer’s day when a colleague called me to say there was a new tender and she just wanted to inform me. She was obviously acting without a mandate. What she had done was an enormous organisational feat, as all the teams had a heavy workload. I called everyone involved and asked if they were in agreement, and they all assured me in unison that we could handle it.

At that time, we were managing around twice as much work as three years before. With good maturity in self-organisation, better methods of our own, less waste in the system, etc. By the way, we were also able to generate twice as much revenue in our division as three years previously. That is New Work.

New Work makes people happy because they are valued as a whole person with all their skills. Because you can achieve things in a team that you would never have managed on your own. Because you get inspiration and can contribute more intensively than you could have imagined last week, and much more too.

Sofas, table football, punching bags, fitness studio etc. are all nice and well, but have little to do with New Work. Such benefits are perhaps even better suited to no-compromise management. In this case, performance is more of a duty that generates output and not outcome.

Just ask how you can improve

Following the principles of lean management, we have discussed with many customers over the last few weeks. By asking them what they personally feel about the work we do. Their opinion of how we work as a presales team, not about the company’s performance as a whole or the level of customer satisfaction at the present time. And who could answer this question better than any line manager? Our customers!

Fortunately, we’ve had quite a bit of practice at this now. Doing this for the first time takes some arm-twisting and it feels daft on both sides. Customer surveys on products or services are familiar to us. Consultants asking to be criticised feels rather strange.

After some initial irritation, customers realise that we as a team are concerned with improving. This understanding is enhanced by a method based on Lean. Time again, all the conversations were great. There was compliments, but also some insights that are hurting, which is precisely why we are doing this.

This year, I have to say, I’ve been amazed at how rapidly our business is changing. We started an agile presales approach “Agile Business Accelerator” in 2018 with the expectation that about 25% of the market would demand iterative approaches. However, during the customer interviews, we discovered that all the customers we interviewed required an iterative, business-generating approach.

Customers presented this in their style and the culture of the companies rather differently. Oftentimes, they don’t even use the word “agile”. I consider this to be very valuable, business values are needed, and we find a suitable methodology together.

Thank you for your commitment and openness!