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Lean: An Effective Transformation Tool in the Service Sector

Posted by Stephen Parry on Apr 4, 2019 3:15:00 PM

Manufacturing, the birthplace of Lean, has contributed a great deal to the ideas of flow, just-in-time processes, respect for people and shaping a management system that now dominates much of the manufacturing world.

Lean is also a very effective transformation tool in the service sector. However, there are some main differences between Lean in manufacturing and Lean in services.

The customer and employee relationship needs to be different by design.

In manufacturing, customer engagement happens primarily at the start of the process and again later in the delivery, often with no customer input in between. Product designs are also made early in the process before a final specification is decided upon. Usually, the design would meet the needs of the average Customer Service Puzzle Piececonsumer in order to keep the variety of available options low to assist the manufacturing process. Once
decided, the customer is no longer part of the co-creation process. Customers would not be engaging with workers on the production line asking to change various specifications or asking production staff to create new options. In services, however, that is exactly what the customers do.

Customers in services have complex needs.

In the service sector, customer demands can be extremely complex, especially if the service being provided requires specialist knowledge in sectors like insurance, financial, medical or IT. Many of those requests are ill-defined, as customers often express their needs in terminologies of their choice. Trying to understand their points can take a great deal of time and careful listening. There is usually not one solution that would satisfy the customer purpose.

Staff need the ability and flexibility to blend a range of solutions and coordinate their transfer until the customer is satisfied. During that process, the customers often change their requirements and the process may need to start over again. Service delivery in these circumstances would fail if a one-size-fits-all approach were taken.

Standardisation, therefore, must focus on the methods and processes of service delivery, more so than on the product, in order to offer greater variety and choice to the customer, and this is where learning from the customers is key. If a business is failing to deliver what they want, the model must be adaptive to change quickly, to change offerings to what customers really need fast. This creates a win-win-win situation – satisfied customers, happy employees, and an innovative, competitive, and profitable business.

Faster, controlled experimentation is crucial. 

It is interesting to note that the rate of staff learning in services is about 20-50 times faster than in manufacturing. Some of the reasons for this are quite clear. Moving machinery around, waiting for factory shutdown periods, and modifying various engineering processes are difficult tasks. By contrast, in
services, various teams can simultaneously be experimenting with new methods, even changing offeringsCreative work of business team in real time and getting results the same day -- collaborating and deciding on the best way for all.  

The amount of learning and controlled experimentation is immensely exciting, and this is the beauty of Lean in services. It makes the job much more dynamic and responsive. Staff love this, as they often end up finding solutions to problems that had yet to even surface.

Having the freedom to run fail-safe experiments is essential.

In the services sector, changing the work climate and making it adaptive makes a Lean transformation sustainable. Lean is much more liberating for management and staff in a Lean controlled framework. This allows some of the work to drift down to the frontline, essentially creating knowledge workers. These staff are then able to problem-solve and develop new products and services, which fosters a motivating and dynamic environment. This allows the programme to survive, because if it is too restrictive, it is doomed to failure.

Trustworthy management is of utmost importance.

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Finally, one vital aspect of any Lean programme, no matter what sector, is trust, and it works both ways. Certainly management need to trust their staff, but staff also need to be able to trust their managers. If a legacy of distrust from company history still lingers, it can destroy any program. In the end, trust -- top to bottom and, more importantly, bottom to top, must never be underestimated.

For more information about Lean and adaptive business transformations in services, please get in touch with us for a free 1:1 call. Click here.

Topics: Lean, Adaptive Business Model, Customer Experience, Business Agility, and Services

Topics: IT Business, Lean Methods, Customer Experience, Lean, Adaptive Culture, Adaptive Business, business agility