A counterintuitive approach to organisational change…….

….to achieve transformational change we must change management thinking

Lesley Kragt – Vanguard Consulting: 12th May 2011

What is the Vanguard Method and Systems Thinking?

•Not a bag of tools – you won’t learn it in a room or by reading a book!•Based on work of Taiichi Ohno and TPS•Based on psychological research and empirical evidence

Offers a counterintuitive logic –

challenges our core beliefs and assumptions

Traditional Thinking

Top Down

Functional specialisation

Separated from work

Budget, activity, targets,output, standards

Manage budgets & people

Contractual

Extrinsic

Outside in

Demand, value work, flow

Integrated with work

Related to purpose, variation, and capability

Intrinsic

Act on the system

What matters

Systems Thinking

The SINS of management!!•All activity is value•Performance is down to the people•Targets give us control •Standardise work flows etc. (use tools)•Focus on managing cost and economies of scale•Focusing on outputs •Splitting work – specialisms, front and back office

This is all WRONG!!!!

Need to change the role of the manager

JOHN THE WASHING MACHINE ENGINEER WHAT DOES HE NEED IN HIS SYSTEM?

Purpose: to fix machines

Yet, as managers what do we focus on?

95% of performance is down to the system and NOT the individual (E. Deming)

How much time do Managers spend on the people vs. the system?

The role of the Manager is to act on the system….

Managers need to work in the work, on the work with the worker

Need to unlearn and relearn!!

•Fundamental challenge to our current beliefs •Normative learning •Need to get knowledge •Vanguard method for change – check, plan, do

The Vanguard Model for Change

Understand current performance the “what and why”

Redesign: Identify levers for changeExperiment to get to perfect

Roll In: Implement the changes

Critical: get knowledge!!!!

If we don’t carry out check!

Impact of applying the Vanguard method•Improve service from a customers perspective•Reduce costs•Improve moral

An example of applying the Vanguard Method

Case Study

Case Study -

Pre intervention•Demand = 39% value and 61% failure•High level steps = 39 – 135 (simple to complex)

•Value work = 18% (simple case)•Waste = 82% (simple case)•Handoffs = 30•E2E times•Complaints

•Staff = •Customers =

Case Study -

Post intervention•Demand = > 75% value and < 25% failure•High level steps = 3

•Value work ↑ ↑ Waste ↓ ↓•Increased capacity•E2E times

•Complaints ↓↓

•Staff = •Customers =

System Condition: Targets= Cheating!!

Case Study -

Post intervention: redesign•Operating Principles

Locus of control, decision making, case management, DAD, only do what matters to customers, pull not push, eliminate waste, only do the value work, best resource at front

•Measures relating to purpose•No targets (no bonuses, shift in performance management)•Focus on flow and outcome…NOT output

• X

Key concept = Thinking Governs PerformanceA

nalysis

Change

Management Thinking

System

Performance

Where to start….Must have’s….•Leaders commitment and understanding•Leaders – into work – get knowledge, understand and apply method•Normative experience – to demonstrate better ways: challenge current beliefs and assumptions•Understand demand – who are your customers? What matters to your customers (understanding demand will tell you everything you need to do to redesign your service)•Stop managing with arbitrary measures/targets•Move from a culture of compliance to responsibility

Once you get this……there’s no going back!

Q & AThank You!

Lesley Kragtlesley.kragt@vanguardconsult.co.uk