Do you ever get the nagging hunch that your department doesn’t run as efficiently as it should? Tom Baumann has a bit of advice: Go Lean.
As the Lean program leader for the State of Minnesota, Baumann’s job is to “encourage, cajole and convince” 24 cabinet-level state agencies to adopt and sustain Lean principles. So far, 127 reviews of various processes have led to average savings of $80,000 per review. That’s $10 million in all, and counting.
Lean leadership principles stem from Lean manufacturing, developed decades ago by Toyota Motor Corp. It’s described in Lean Thinking, a book written in the mid-1990s by James P. Womack and Daniel T. Jones.
“In simple terms, Lean leadership centers on how senior management can create an environment that allows employees to understand the tools of process improvement, then give them the authority to figure out the best way to get work done,” Baumann says.
“You essentially tear apart the process and eliminate as many non-value-added steps as possible. It’s not uncommon to find that 95 percent of the steps in office-based processes are non-value-added.”
Process over policy
Baumann observes that many managers and supervisors are more concerned about policy than pro-cess, or they get hung up on the crisis of the day, leaving little time for big-picture analysis. Add to that the insidious growth of bureaucracy, and you have a recipe for waste.
“The truth is that senior leaders don’t like to think about processes,” Baumann says. “They think about policy, politics and putting out fires. There is great excitement and reward for putting out brush fires, but not for figuring out how those fires start.”
Two examples show how Lean leadership can dramatically increase efficiency. The first instance involved the 40,000 private attendants the state licenses to provide at-home health care. It typically took four to eight weeks for the Department of Human Services to review and relicense the care providers.
“At one point, there were typically 3,000 to 4,000 applications pending,” Baumann says. “Our goal was to reduce the relicensing period to 30 days, but we got it down to only one or two days. And now there are only about 150 relicensing applications pending at any one time.”
The second example involved applications for MinnesotaCare, a health insurance program for low-income people. Applicants visit their county government to fill out an application, which is sent to the state for approval.
The problem was that about 90 percent of the forms were incomplete, contained inaccuracies, or did not include required documents. “So, those applications got sent back,” Baumann says. “There was little time spent on getting it right first.” Once the process was fixed, about 80 percent of applications were complete and error-free.
Revealing process flaws
With the relicensing applications, a process review showed that too many people had to handle, review and sign off on the forms. The cure? Eliminate the handoffs. “Every time you eliminate a handoff, you knock off significant time,” Baumann says. “Every time something is handed off, it winds up in an inbox for an hour or a day. Waiting for someone to do something is the biggest time consumer.”
With the health insurance applications, a review found that the forms were too cumbersome and required much more information than necessary. This created more work for people processing the forms and increased the risk of applicant error.
“So we narrowed down the data collection to what we absolutely need to assess if a person qualified for the program or not,” Baumann says. “We also created online forms so employees don’t use outdated forms.”
The first step in breaking down a faulty process is to define its scope clearly. In the case of the health insurance forms, the review reached from the point where people applied at the county level to the point where state employees decided if they qualified. “You must be clear on the starting and end points,” Baumann says. “Then define the objectives: Saving time, for example, or reducing errors.”
It’s also critical to get the right people on the process-review team. The team must include people who will be responsible for the changes, as their buy-in is critical. It also should include a skilled facilitator — someone who may know nothing about the process but can artfully get people to step back and look at the big picture.
Baumann says seven to nine people is a good size for a team. “You need to be as inclusive as possible,” he says. “You need a good mix of people who understand how the process works, or doesn’t, and people who will work well together.
“And be sure to include a few skeptics, because they ask good questions. They typically are well known among peers and have credibility with them. It’s a powerful thing when a skeptic who goes into a project thinking it’s a load of baloney suddenly says at the end of the review, ‘Hey, we have to do this.’”
Change takes time
Baumann suggests investing four or five days in tearing down the process, then reassembling it to improve speed and accuracy. “What I appreciate is that this isn’t about the boss coming in and dictating changes just because he had a dream about how to make things better,” Baumann says. “It’s about engaging the people who really do the work. If they’re the ones suggesting changes and ideas, they’re more apt to support them.”
Baumann says the process reviews he has facilitated were successful to varying degrees. Some process problems weren’t serious, so improvements weren’t dramatic. Other processes lent themselves to larger gains in productivity.
“What excites me the most is how Lean leadership gets to the heart and soul of how work gets done — not just a lot of structural mumbo-jumbo,” he says. “Restructuring and reorganizing usually just make things worse. Lots of employees have been around long enough to see things fail, so it’s really gratifying to see them get excited about having the authority and responsibility to find a better way to do things.”
