Applying lean principles to increase efficiency
Consultants and software developers might believe that what they do is unique and can’t be standardized. But how they do their work can be made more efficient.
Research by operations professor Brad Staats can help firms that engage in “knowledge work” run as efficiently as a Toyota assembly line – using some of the same lean principles.
Lean principles used to improve efficiency in manufacturing include relentless attention to detail, commitment to data-driven experimentation, and charging workers with improving efficiency and eliminating waste in their jobs.
Applying those principles to improve performance in knowledge work – fields that require creativity, insight, expertise and judgment to develop new ideas, products and services – is a specialty for Staats, assistant professor of operations, technology and innovation management at UNC Kenan-Flagler.
“As we look at an economy that’s becoming increasingly knowledge and information-based, we know we need to become more efficient,” Staats said. “But how do we do it?”
The health-care field was an early adopter of lean principles. While patients are unique, procedures have repetitive elements that can be standardized and handled more efficiently.
Applying lean principles in service settings can be trickier. Because you’re engaged with the customer, what you’re working on can change while you’re working on it,” Staats said. “Similarly, when you’re creating something new, you’re not able to specify up front what exactly you’re trying to accomplish.”
Some years back, Staats connected with Wipro Technologies, the software services firm in Bangalore, India, as it began a project using lean principles. He embarked on a long-term study that compared projects using lean principles with traditionally run projects going on simultaneously at Wipro. By matching projects using lean with those that weren’t, based on similar criteria, and comparing their performance, he isolated the effect of the lean implementation as opposed to all other variables.
“We were confident that we’d see some projects function better,” Staats said. “We were pleasantly surprised to see an overall improvement.” Staats collaborated with David James Brunner, then of Harvard Business School, and David M. Upton of Oxford University to write “Lean principles, learning and knowledge work: Evidence from a software services provider,” published in the Journal of Operations Management in May 2011. Staats and Upton wrote a version for Harvard Business Review in October 2011.
The six lean principles conventionally applied to manufacturing settings that Staats saw succeed in the knowledge-work setting of Wipro can be used by managers to customize lean approaches that suit their organizations:
Those working in knowledge fields like to think that the work they’re doing is unique and impervious to efficiency techniques applied to a manufacturing assembly line. They put up resistance, even when shown that breaking down the creation process into tasks and identifying
the repetitive parts allow them to spend more time doing the creative parts they prefer to do.
“Following lean principles requires discipline,” Staats said. “We grow accustomed to our own way of doing things. Lean principles suggest that we need to be more structured in how we approach work, differentiating the mundane from the value-adding. That puts a level of controls on what we do, and we resist that.”
Staats’ work with Wipro is unique in several aspects. He conducted an analysis using archival data, while most studies of lean principles use survey data that asks companies what they have done. Because Wipro did a staged rollout, Staats got internal company data to compare lean projects at different stages with conventionally run projects. On top of that data, he layered many qualitative interviews – more than 100, conducted during multiple visits across several years – that rigorously established performance differences. Over the next several years, Staats returned to Wipro about every six months to track how the lean initiative evolved, giving him a deeper understanding as well as long-term perspective. Rather than evaluate only individual or team performance, he could analyze the overall change initiative.
“Our study was done across time and in depth and mixed the archival analysis with qualitative interviews,” he said.
One aspect that did not see change was quality control. The projects using lean principles had just as many software defects as the traditionally run projects. Staats said the surprising observation could be explained in a number of different ways:
Many knowledge-work industries struggle with the need to be more efficient. Staats’ research results are broadly applicable, even for companies that rely on work produced through complex processes.
Managers in the fields of consulting, product development, finance and software services are among those who have expressed interest. Staats cautions that not every part of every job lends itself to lean principles.
“Be careful not to get so caught up in efficiency as a metric that you end up taking away some valuable parts of the creation process,” he said. “People need time to think. But even that time can be structured so that it happens because you recognize the need to think, not because you are stuck waiting while other waste goes on.”