Implementing Lean Principles and Practice

 ‘As is’ workplace

The Ombudsman Complaint Unit in the Bank has an Early Dispute Resolution (‘EDR’) Team, who manage complaints received from the Financial Services and Pensions Ombudsman’s Office (‘FSPO’). The EDR Team are currently allocated cases to work, as they are received from the FSPO, based on their current Work in Progress (‘WIP’).

The flow of value is each stage of the EDR process which adds value to a complaint in order to get to a satisfactory resolution for the customer. Currently the team manager manages the teams WIP using a spreadsheet and allocating cases to case handlers based on WIP. It is unclear from the spreadsheet, how value flows through the team (Value Stream). The team is resource efficient as everyone in the team is busy all of the time; however the team sit in the “Efficient Island” quadrant of the Efficiency Matrix, as the team lacks flow efficiency.

Professional Certificate in Principles of Lean Operations in Financial Services, Implementing Lean Principles and Practice (2017/2018:pg2)

The ‘As Is’ situation in the team is that while the management team have agreed the optimum number of cases in each individuals WIP should be ten, each case handler currently has a WIP of approximately twenty cases at dispute resolution stage. However there is no limit on the number of cases in an individual’s WIP. Cases are allocated as they are received from the FSPO, meaning case handlers can be working upwards of twenty cases at any one time.

On average it takes each case handler twelve weeks to resolve a case, however this is the maximum time given by the FSPO before they will progress the case to formal investigation, so the case handlers are constantly under time pressure to resolve their cases. They can find it difficult juggling so many cases and often cases can be dropped or forgotten about until the FSPO seek an update on the case. Managing so many cases decreases the flow of value while it increases the throughput time of each case from receipt to resolution.

‘To Be’ Workplace

In my ‘To Be’ workplace, the EDR team will have a well developed Kanban Board in place which visualises the current WIP in the team. A Kanban Board is a visual tool that is used to depict stages in a process with each item of work represented on the board.

Kanban Board

Each case being worked on will be represented on our Kanban Board by a Post-It note. The Kanban Board will have started off as a simple board. The Board will change and develop from simple headings showing the WIP grouped together to a more complex Kanban Board as the team became more familiar with the concept and also with their own process. The well developed board will give the team and management clear visibility of the teams WIP.

By introducing a Kanban Board to the team, this will help improve the flow of value by visualising our Value Stream. This will identify both value adding and non-value adding actions taken by the team to resolve complaints. The visualisation of our Value Stream, will also help the team identify, remediate and remove any non-value adding actions where possible.

The team will hold daily meetings at the Kanban Board to discuss the WIP and over time the Kanban Board will be developed to contain more information and provide a clearer, easier to understand picture of the WIP. It is important that the daily meetings are short chats by the board, rather than turning into case conferences or giving out sessions. If the daily meetings are short, they are more likely to happen rather than long meetings that the team don’t have time or capacity for. As the daily meetings progress, the Kanban Board will be developed to illustrate “swim lanes” for each case handler. The number of columns will increase to more accurately reflect the different stages in in the Early Dispute Resolution Process, as the team are working through their cases and identifying different stages or indeed bottlenecks. I have outlined below an example of how our Kanban Board might develop to what our ‘To Be’ Kanban Board could look like.

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*Professional Certificate in Principles of Lean Operations in Financial Services, Implementing Lean Principles and Practice (2017/2018:pg7)

On speaking with the team in anticipation of the introduction of the Kanban Board, (as part of Stage 1 of the Change Curve, explained later in the report) , the team raised concerns that there is a delay in receiving responses from some areas of the business. This was fed back to the management team who met with representatives from each business area and an escalation strategy was agreed and implemented for cases where requests from the business were not forthcoming. The Kanban Board will help us identify if this process is working as the Board will clearly show any delays in progressing cases where we are awaiting information from the business. This should help improve the flow of the cases into the next column or process stage on the Board.

WIP Limits

WIP limits will be introduced to the team to limit the amount of cases each case handler is working on at any one time. This will allow greater focus on cases to avoid “the ball being dropped” and in an effort to “stop starting and start finishing”

Professional Certificate in Principles of Lean Operations in Financial Services, Implementing Lean Principles and Practice (2017/2018:p64)

For example when requests for information are sent to the business, the case handler moves to another case and can forget to follow up on their request, until the FSPO come looking for an update, as outlined in the “As Is” situation described earlier.

This is due to the case handler sometimes juggling up to twenty cases; despite management agreeing ten is the ideal number of cases a case handler should be working on at any one time. It is thought that managing a smaller workload will allow each case handler to be more familiar with each case they are working and know exactly where all their cases are in the process.

Having a greater focus on a smaller number of cases, will allow cases to be moved through the EDR process more quickly. Currently on average it takes a case handler twelve weeks to resolve a case. This is the maximum timeline the FSPO agrees before a case is moved to formal investigation, which the Bank try to avoid by successfully completing the mediation process. With the introduction of the Kanban Board and WIP limits resolution times or throughput times will reduce. The introduction of these two tools, will help in moving the team from “The Efficient Islands” to “Lean”

Professional Certificate in Principles of Lean Operations in Financial Services, Implementing Lean Principles and Practice (2017/2018:pg2)

Change Management Process

While some people embrace change, usually when change is being implemented a business will face resistance or opposition. Most people are adverse to change, feeling things are fine the way they are. To try help the case handlers adapt to our new Lean model of operation, the change management process I will use to move our team from the ‘As Is’ situation to the ‘To Be’ Situation is the Change Curve.

When attempting to implement Lean in a team, the team will undergo a psychological journey and I will use the Change Curve to help describe that journey and describe what actions we might take to overcome resistance.

Change Curve

In the 1960’s Elisabeth Kubler-Ross developed the Change Curve to explain the grieving process. Kubler-Ross also suggested that the Change Curve could be applied to any dramatic life changing situation and in the 1980’s it was used as a change management tool.

The curve depicts the original five stages of grief which are Denial, Anger, Bargaining, Depression and Acceptance.

Professional Certificate in Principles of Lean Operations in Financial Services, Implementing Lean Principles and Practice (2017/2018:pg110)

Using the picture above, the emotions depicted can be grouped into 3 stages

1. Shock and denial
2. Anger and depression
3. Acceptance and integration.

I will describe each stage and the impact these stages or emotions may have in our journey to becoming a leaner EDR Team and how we will try to overcome these emotions.

1. Shock and Denial

The initial emotion that is experienced when a change is mentioned is shock. Staff can experience a fear of the unknown, a fear of not looking good due to lack of knowledge or a feeling of not knowing what they are doing, a sense of helplessness. Productivity often dips when change is announced. This can be due to a feeling of inadequacy, if there is a wider feeling in the business that change is needed. This is closely followed by denial. Denying that the implementation of change will work, make a difference or indeed can be implemented. There is a fear within management that staff can ignore the change, or forget they were advised of the new process and continue in their old ways.

To overcome this stage of the process of Lean Implementation, I think it is very important to be clear with the team from the start. The team should be brought together to discuss the changes being implemented. The concept of the Kanban Board should be explained to the team with some examples demonstrated, both in a banking situation and also an everyday situation. We could use the Starbucks example, where there is no physical Kanban Board; however each order is represented by a coffee cup with a customers name on it moving through the coffee making process. This should show that Kanban can be used in many different everyday scenarios and is not something to be afraid of.

WIP limits should also be explained to the team, highlighting the benefits of introducing WIP limits. It should be clarified that WIP limits are being introduced to improve flow efficiency and help staff manage their cases more effectively.

2. Anger and depression

This is the stage at which the team may begin to feel anger towards the changes that are being imposed. They may feel a sense of blame, either on themselves, that they are not completing cases quick enough, or try place blame on someone else, for example, for delays in obtaining information from other business areas. Following a sense of anger, may come a sense of depression, when morale and productivity will usually hit rock bottom. There will be a sense of self doubt among the team and anxiety levels may rise.

To overcome this stage of the process, it must be highlighted to the team that blame is not being apportioned for the slow throughput time, it must be clearly explained that the Lean changes being implemented are positive changes and are being implemented to help the team. The changes should eliminate a sense of frustration felt when a case handler’s WIP seems insurmountable. By working together to implement the proposed changes it should make the WIP more controllable for each member of the team and less stressful to manage.

3. Acceptance and integration

This is the stage when the team begin to accept the changes that are being introduced to help the team reach ‘The North Star’ of efficiency. Individual team members begin to realise that change is inevitable and begin to adapt their approach to their role to embrace the changes rather the resist them. Staff should be able to envisage what the ‘To Be’ situation would be and should start to understand the advantages of the introduction of both Kanban Boards and WIP limits.

The realisation dawns that the change will have a positive impact on the team’s day to day work. Following the feeling of acceptance comes a sense of integration; emotions towards the change improve and turn to positivity. The team will begin to realise the benefits of the implementation of change and being to see opportunities. The team will have fully embraced the change and the older process is now forgotten.

A key part of this third stage is to continue to support the team through this final stage. Regular progress updates are important to promote a sense of achievement in the team. The team may slip into old habits if support is withdrawn at this point.

Conclusion

By introducing the use of a Kanban Board and WIP Limits, the team will transition from the ‘Efficient Islands’ to the ‘North Star’ of the Efficiency Matrix or to the Perfect State of Lean. This will be measured and verified by referring to our current WIP spreadsheet and comparing results after 6 months.

Professional Certificate in Principles of Lean Operations in Financial Services, Implementing Lean Principles and Practice (2017/2018:pg2)

References:

• (2017/2018) Professional Certificate in Principles of Lean Operations in Financial Services, Implementing Lean Principles and Practice. Dublin. The Institute of Banking.