What Managers Need To

Know About Lean

Management

Sean Low
IT Management Consultant
Pink Elephant
Pink Elephant Knowledge Translated Into Results

Welcome & Agenda

1. Lean Objectives
2. Lean History
3. Lean Principles
4. Lean Methods & Tools
5. Lean Leadership
6. Go See Observe
7. Ask Why Ask Questions
8. Show Respect
9. What Do I Do Tomorrow?
10. Bibliography & Additional
Reading
11. Q&A
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Lean Objectives
Deliver the right things, in the right quantity, at the right
time and place, when and at the cost requested
Produce these things safely without wasting time,
energy, or resources
Respond to Problems (Incidents), Changes, or
Challenges as they arise
Treat human beings with respect and dignity

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Shingo Model

One of the foremost Lean standards

Four Dimensions, Ten Principles
Business improvement through understanding
relationship between principles, systems, tools and results
Operational Excellence achieved when principles align
with results, not by superficial imitation or isolated use of
tools
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Defining Moments In The History Of Lean

Craft Production

Mass Production

Toyota Production System

Lean In Service

Customization
Highly skilled workforce
High cost

Moving Production Line

Production Engineering
Low cost, inflexible model

Focus on quality (Jidoka)

Just-in-time production

Services & Health

Professionals
Productivity improvement

1880

1910

1920

1955

2000

Scientific management,
labor productivity

Business process
improvement

Proved the value of

continual improvement
at General Electric

Frederick Taylor

W. Edwards Deming

Jack Welch

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The Toyota Way

Origins in Toyota Production System (TPS)
Builds on approach created by the founder of Toyota,
Sakichi Toyoda, his son Kiichiro Toyoda and the
engineer Taiichi Ohno
Consists of two key principles
1. Continual Improvement
2. Respect For People

Sakichi
Toyoda

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Lean Principles & ITSM Processes

Pull processing

Request Fulfillment

Perfect first-time quality

Service Validation & Testing, Change

Evaluation

Waste minimization

CSI

Continuous improvement

CSI

Flexibility

Release & Deployment Management

and Change Management

Building and maintaining long term

relationships with suppliers

Supplier Management

Load leveling

Demand Management and Capacity

Management

Production flow

Service Level Management

Visual control

SLM, BRM, CSI

Autonomation

Incident Management, Problem

Management and Event Management

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Lean Is A Way Of Thinking & Acting

Lean thinking and acting is all about:
Increasing Customer value
Eliminating Waste
Management as facilitator
Delivery
Involvement of all employees
Just in Time
Continual Improvement

Quality

Costs
Jidoka

Flow
Pull

Preserving value with less

work.

Standard
Working

Heijunka
5S
Stability

What Managers Need To Know About Lean Management

Pokayoke

Visual Mgmt.

Kaizen
Robustness

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Lean Customer Value At The Center

First time right

Focus on quality
and prevention of
defects

Demand triggers the

process chain in order
to reduce stock
What Managers Need To Know About Lean Management

Assess if all the activities

in the process add value
in the eyes of the
customer

Create continuous
flow in production
with the Just-in-Time
approach and reduce
peak and low
volumes
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The 3 Ms Of Waste

Muda Unnecessary, Non Value

Mura Variation, Variance
Muri Inflexibility, Over Burdened

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Lean Three Types Of Activities

Value-Add: Work that adds Value in the eyes of
the customer that they are willing to pay for:
Optimize
Application development
Server Maintenance

Necessary Non-Value-Add: Work that is not

Value-Add but must be done:
Recruiting staff
Finance and accounting
Application testing

Non-Value-Add: Work that does not add Value

for the customer or the business:
Redundant work
Solving IT incidents
Doing more than required
What Managers Need To Know About Lean Management

Minimize

Remove

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Reduce Waste, Variability & Inflexibility

Waste

Variability

Waiting time

Motion

Over-processing
Defects &
Rework

Inventory
Transportation

Variability in volume or complexity

of customer demand
Spread in the outcome of processes

Over-production

Inflexibility
Team capacity cannot scale up or down with demand
Fixed service time frames or release schedules
Batch and queue operating model
Specialized resources in a limited number of tasks
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IT Examples Of Waste
Inventory

Retaining low-priority projects in project queue indefinitely

Local solutions fragmenting business processes
Out of date knowledge articles
Purchased assets that were not deployed

Over-Processing

Providing more utility than the customer asked for

Reply All
Producing reports no one uses
Continuing a project that has no value
Ineffective meetings
Excessive or overly complex security policies
Managing excessive events or alerts
Service Desk solving Incidents but not getting to root cause
Cost accounting rather than managing value stream (service) costs

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IT Examples Of Waste Continued...

Errors / Defects / Rework

Not understanding and developing sound customer requirements

Unauthorized changes
Inadequate testing
Software patches to fix the last software patches

Waiting / Delays

Lengthy searches for information or knowledge

Slow application response time
Managing and understanding metrics that are not real time
Waiting for specialists to complete other tasks
Lengthy decision making / convoluted communication channels
Waiting through long service desk holds or callbacks
Using or waiting for shared equipment
Identifying the right SME group to address a problem

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Lean Why Should We Be Lean?

Customer Satisfaction:
The focus on Customer Value in thinking and acting results
in improved customer satisfaction
Better connection between customer and organization because
we are engaged in an ongoing customer dialogue

Strategic Value:
Better products due to continual improvement of processes
Higher involvement and motivation of employees
Earlier delivery of products, reduction of process duration

Financial:
Reduction of waste: Results in financial gain
Time for new activities: From optimization of value-add work
Improved the cash flow: A shorter duration between order and
delivery makes earlier payment possible
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The Five Dimensions Of Lean IT

Who is the customer?
What element of our service is of value to the
customer?

Customer
How much time is
spent on valueadded activities?
What is the
performance of
teams and
individuals?

Performance

Behavior
&
Attitude

Process

What are the

capabilities of
our processes?

Organization

How do we work as a
team?

Is the organization structured

to meet customer demand?

How customer focus are

we really working?
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Lean Methods & Tools

Critical to Quality Requirements and wish
Value Stream Map
PDCA Plan, Do, Check, Act (Demings Cycle)
Continuous Improvement
System-wide for total throughput
Process for specific flow issues

Tools are Great!

But LEAN Leadership is Needed.

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Lean Leadership
Go see
Observe the work where it is performed

Ask why
When things appear to be not as they should be*, keep asking
why until you find a cause that can be acted upon
Then ask, Why? until you find out how the cause got there in
the first place, and act on that

Show respect
Ask the people that do the work
Listen to their answers
Be fully present
*Beware local optimization if it is not the greatest constraint in the system.
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Lean Management John Shook

The essence of management is not techniques and procedures.
The essence of management is to make knowledge productive.
Peter Drucker
If Lean thinking means a different approach to business, then it
must also imply a different approach to managing
Keep an open mind
Do not jump to solutions a critical lean management principle
Lean management is not about quick answers. It is going through
a thinking process:
Investigate
Analyze
Understand
Try, perhaps fail, and learn
Repeat
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Go See Observe
Go to the workplace
Observe the work being done by the people that do it
Observe the workplace

Analyze the Value Stream

Analyze all available measures against goals and
norms

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Go See ITSM Example

Change Management

Look at Change activities

What is the (inter)action taking place?
How long does each activity take?
Which activities add value? (provide what the customer is
paying for)
Who is executing them?
What conditions are required for execution?
What is the handle time?
What is the total time? Is this normal?
What waste do you observe?

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Ask Why Ask Questions

Resist the urge to provide answers/solutions
The scientific mind does not so much provide the right
answers as ask the right questions Claude Levi-Strauss
(French Anthropologist & Ethnologist)

You can tell a person is clever by their answers. You

can tell a person is wise by their questions. Naguib
Mahfouz (Egyptian Author and Nobel Prize winner)
See Judith Ross Question article in bibliography

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Value-Add Questions Judith Ross

Value-add questions inspire people to think in new ways, discover
their own solutions
Clarify: Can you explain more about the situation?
Relate: Are you OK with the progress so far? or What do
our customers tell us about the value they receive?
Assess Analytically: What are the consequences of going
down this path?
Step back: Why did this work? or What can we learn from
this?
Explore: Can this be accomplished in other ways?
Challenge Assertions: Why do you think you/we will
gain/lose if we do this?
Trust: Based on your knowledge and experience, what do
you suggest we do?
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Ask Why ITSM Example

Change Management

What measures do we have?

What do the measures tell us?
What are we doing well? Why?
What needs improvement? Why #1 #5 n?
How much do we need to improve?
What is the best way to achieve the improvement?
Why do we think we can get there that way?
What needs to be done so we maintain the improved state?
Etc.

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Show Respect
The problem with Our people are our most important
assets
The organization is all the people: Us. All contribute to the
value the customer is paying for
Our implies ownership of some by others
Better: We the people of {Organization ABC} are the most
important factor in our success.

Assign accountability
No excuses because ownership is clear
It is the 5 Whys (Lean), not the 5 Whos

Be fully present no multi-tasking

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Show Respect ITSM Example

Change Management
Assign Roles with clear Accountability, Responsibility for tasks
Conduct Voice of the Customer interviews as part of Service
Management
Ask Customers, Performers, and Stakeholders their opinion of
the value of the process
Ask
Act on what you hear
Be fully present in interactions
Waste no time
Make and meet commitments

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What Do I Do Tomorrow?
Go See
Determine where the service is delivered, then
Go to where the service is delivered
Observe how the service is delivered, how the value is
realized
Observe Changes being planned, approved, and executed;
Incidents being reported, dispatched, and resolved

Ask Why
Ask the performers what they do and why they do it that way
Ask the workers what works and what needs to be improved
Make notes and ask follow-up why questions

Show Respect
Be fully present with your work and with people
Do one thing at a time
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Bibliography And Recommendations

John Shook and Dr. Jim Womack, Lean Enterprise Institute,
eLetters, http://www.lean.org/ Mouse over Knowledge Center
Judith Ross, Harvard Business Review Blog May 6, 2009
http://blogs.hbr.org/hmu/2009/05/real-leaders-ask.html
Bell, Steve, and Michael A. Orzen. Lean IT: Enabling and
Sustaining Your Lean Transformation. Boca Raton: Productivity,
2011
Bell, Steve. Run Grow Transform: Integrating Business and Lean
IT. Boca Raton, FL: CRC, 2013. Print
Jacob, Dee, Suzan Bergland, and Jeff Cox. Velocity: Combining
Lean, Six Sigma, and the Theory of Constraints to Achieve
Breakthrough Performance : A Business Novel. New York: Free,
2010

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Recommended Reading
Detailed understanding of Lean Lean Six Sigma Pocket Toolbook
Six Sigma tools (chapters 1-4, 9)
Authors: Michael L. George et al
ISBN: 0-07-144119-0

How Lean can be applied within Lean IT, Enabling and Sustaining Your Lean
the IT environment Transformation
Authors: Steven C. Bell and Michael A. Orzen
ISBN: 978-1-4398-1756-8

Deeper understanding of Flow This is Lean

Authors: Niklas Modig & Pr hlstrom
ISBN: 978-9198039306

Origins of Lean The Toyota Way

Author: Jeffrey K. Liker
ISBN: 0-07-139231-9

Behavioral aspects of Lean Creating a Lean Culture

Author: David Mann
ISBN: 978-1-4398-1141-2

Application of Lean to Services The Lean Toolbox for Service Systems

organizations Author: John Bicheno
ISBN: 978-0-9541244-4-1

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Questions?

Sean Low
s.low@pinkelephant.com
www.twitter.com/theitilexperts
www.pinkelephant.com

What Managers Need To Know About Lean Management

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