Lean very effective in service sector

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.

I was recently asked to highlight the main differences between Lean in manufacturing and Lean in services. There are too many significant and subtle differences to mention during an interview so I settled on the following.

Customer Service On Screen Showing Customer Support And Helpdesk

The customer and employee relationship need 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 consumer 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, you would not find customers talking to people 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 customer does.

Complex customer needs

In the service sector, customer demands can be very complex especially if the service being provided requires specialist knowledge such as 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 lot 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 co-ordinate 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 was taken.

Standardise on methods and processes and less so on the service product

Standardisation in these circumstances must focus on standardising the methods and processes of service delivery more so than the product to offer greater variety and choice to the customer,. Helping them to make that choice will differentiate your business from competitors.

Let’s learn from the customer, take that information in, and if it’s not delivering what the customer wants, change it quickly.

Faster controlled experimentation

It’s interesting to note that the rate of staff learning in services is about 20 to 50 times faster than in manufacturing. Some of that is practical: moving machinery around, waiting for factory shutdown periods and modifying various engineering processes are difficult tasks. By contrast, in services, you can have various teams trying new experimental ways at the same time, even changing things in real time and getting your results the same day, collaborating and deciding on the best way for all.  

I think that’s the beauty of Lean in services. It makes the job much more dynamic and responsive and staff love that. They end up finding solutions to problems you didn’t even know you had.  It’s a much more exciting field for Lean simply because of the amount of learning and controlled experimentation you can do.

Freedom to run fail safe experiments

In the services sector what makes a Lean process sustain is changing the work climate. If it feels very restrictive, then your Lean program won’t survive.

Lean is much more liberating for management and staff in a Lean controlled framework. What makes it successful is when management let some of the work they used to control drift down to the frontline staff. And by pulling them in to be involved in the planning, it motivates them to become engaged in developing solutions.


Trustworthy management

As well, a major factor is learning to trust.

Trust works both ways. Certainly management needs to trust the staff but the staff also need to know that you’re serious. If a legacy of distrust from company history still lingers, it can destroy any program, not just Lean.

In the end, trust is the important element from top to bottom and more importantly bottom to top in achieving Lean success.


The rewards of ‘smarting up’ your customer-facing staff

Right across the board, today’s customers are demanding greater and greater choice. To stay successful in a rapidly changing climate, organisations must not only confront and deal with this demand for choice, they must design a corporate culture which actively embraces it.

‘Smarting up’ sales teams has been a vital part of my work in helping corporations develop such a culture. This ‘smarting up’ means taking managers and operational staff beyond a traditional mindset and into one which develops vastly improved customer experiences to help grow the revenue of the organisation.

We’ve all had those frustrating customer experiences where the person we have just spoken to has not been able to help us. Our needs have not been met and our dissatisfaction is vented at the employee or the next tier of management in the company. But the real fault is not there, it is right at the top level.

Those negative customer experiences are almost always brought about because employees have been placed into ‘dumbed down’ positions where they are prohibited from moving beyond the transactional level. Their task is simply to increase the portfolio of a narrow range of options.

When Fujitsu – an IT outsourcing company I worked with – decided to move its focus client business outcomes and then adjust its IT service levels in response, they ‘smarted up’ their staff to more deeply understand their clients. The result for their airline client was reduced queues at ticket offices, check-ins and during flight delays.

When customers are not listened to on the other hand, or they feel that their specific query or demand has not been met, they are made to feel like one of a million and not one in a million.

In the ‘smarted up’ model, on the other hand, where sales staff are given the freedom to engage in wider ranging conversations with customers in order to understand their situations, the customer experience becomes relational and personal.

In this model, staff are actively looking for possibilities and ideas for new services or new products which can be added to the portfolio. Our smart people are now telling the organisation what customers really want, becoming, in the process, a source of new and exciting products and services to generate more revenue for the company.

And now the customer is made to feel like one in a million, not one of a million, resulting in increased customer loyalty.

I once worked with a large telecommunications firm who, in the name of standardisation, offered a one-size-fits-all set of services which they delivered in a strict transactional process, causing much frustration to clients and shareholders who were concerned at the client churn rate.

Our work in ‘smarting up’ their staff allowed them to create a more efficient way of working which gave them the ability to generate a wide variety of new services. Thus increased responsiveness helped deliver new revenue streams.

As you can imagine, my work in growing this kind of cultural change in organisations often meets stiff resistance. One of the arguments against ‘smarting up’ is economic. ‘Can I afford to pay my sales staff more?’ and so on.

The sad truth is that too many business organisations know the cost of everything, but the customer value of nothing (to paraphrase Mr Wilde).

Once again, it comes down to the traditional, transactional mindset. When you separate ‘value’ from ‘cost’, everything is always going to become too expensive. The global drive to move work to the lowest labour cost economies betrays this inability to think beyond the transaction and the cost.

Implementing lean

This is amply borne out in the work I did with one of my clients, a well-known parcel and documents delivery company. After ‘smarting up’ their couriers, the company found that customers were wanting their packages to be weighed and safely packed with all paperwork completed when courier arrived to collect the parcel. Rather than try and drive couriers to greater efficiency, they had encouraged them to find ways of creating greater customer value. The result? New services, differentiation, new opportunities, greater job satisfaction and an enhanced customer experience.

Employing people to do smarter, more responsible jobs is an investment which delivers true value. ‘Smart up’ your sales staff and they will begin to uncover customer needs, acting as a kind of market research team to feed responses and ideas through the management chain.

The key to it all is to recognise the value of your most priceless commodity – your people.

Leader vs. manager

HR strategies to support Adaptive Lean Change

I recently wrote about the importance of Human Resources (HR) in the adoption of Adaptive Lean Change in the workplace.

By virtue of their connection to all levels of a business, they have the ability to shift the work culture zeitgeist in very specific ways.

Leader vs. manager

HR and Professional Development (PD) need to be almost prescient in identifying the current status of the organisation and anticipate new demands.

It’s also up to HR / PD to ensure to reflect the Lean purpose in all training courses offered, be it soft skills courses, management courses or technical courses.

However, is not enough to simply fulfil the basic HR infrastructure (e.g. training, workshops, etc) but to also develop supporting structures and support groups.

Here’s what those supports would look like.

Supporting structures:

An educational framework that unfolds alongside the overall development and keeps pace with newly identified requirements: a knowledge centre with scenario-based material (e.g.: podcasts, e-learning modules, documents, suggested readings, articles). Anybody from within the organisation can look up material based on their demands and requirements.

Support groups:

These are headed up by key players who support and drive change through their contributions. Most important are internal coach-mentors, consultants and trainers who sustain change and achievement after external consultants are no longer connected to the organization.


If those contributing factors are not aligned by HR to the demands of ongoing change the overall success is jeopardized as the ‘old-world’ tools, processes and behaviours help to preserve/cement the old organisational norms.

HR needs to observe and support the transition from old-style hierarchical thinking to the newly defined freedom and working possibilities (and demands) of Lean.

Biog Photo

Senior Partner: Stephen Parry

Stephen Parry is an international leader and strategist on the creation of service enterprises that are adaptive, innovative, and engaging. He has a world-class reputation for passionate leadership and creating global organisations with superior service climates by changing the way employees, managers, and leaders think about the business.


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Rupert Coles

Senior Consultant: Rupert Coles

Rupert Coles has an established record of driving transformational change using Sense and Respond 3.0 principles to bring about employee, management, leadership, and organisational breakthroughs.


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HR departments crucial in Lean effectiveness

One of my challenges in delivering the messages and methods of Adaptive Lean Change has been getting Human Resources (HR) departments to see their role in the process of change.

Lean is often perceived by businesses as being about operational efficiency which overshadows the crucial aspects of workplace climate and culture shifting, areas which are HR’s forte.

Leadership Signpost Shows Vision Values Empowerment and Encouragement

The irony is that Lean initiatives are more likely to fail in a business without the involvement of HR.

 HR must be involved to fully understand Lean, to intuit the underlying company strategy and  the required steps and milestones to get there.  They need to grasp the overall holistic  picture to appreciate how this is then translated into ‘sub-pictures’ within the organisation.  

It is up to HR to evaluate all this against the current company culture and climate and find ways and strategies to support change and overcome resistance, reluctance, doubts, complacency and the entrenched old behaviours.

Important areas which need to be adapted are:

– Reward and recognition systems
– Performance evaluation system
– Talent reviews
– Recruitment
– Promotion

Further, the Personnel department also plays a key role at developing culture and climate in those areas.

They must also develop Lean leadership capabilities:

– Leadership development (different talent reviews and selection criteria)
– Lean People management
– Organisational development

Leaders need to relay the Lean values of freedom, trust and respect which ensure the willing contributions of staff. They also need to study the different perspectives within a company to understand why staff and managers behave the way they do.



HR need to appreciate that change cannot be dictated in a command and control environment by a group of elite-thinking managers: including, of course, HR management themselves.

HR vocabulary needs to be enriched with terms like engaging, leading, learning, and improving and, crucially, be able to explain their requisite meanings.

Finally, HR needs to be ‘the’ department that leads in Lean thinking and practices. If it doesn’t happen there, then credibility in the process suffers.


Work culture and climate redux

A recent column of mine on the difference between a work climate and a work culture prompted an intriguing question from a reader on Linked In.

Although I have included the original post below this, in it I was underlining that while work-cultures are instituted over time based on workplace design and the trustworthiness of management or lack thereof, they can be difficult to change. In contrast work-climates are easy to change but are difficult to maintain for long periods until they solidify to become the new culture.

Tadeusz Kifner, Data Architect – IT Data Governance Management at Bank BPH wrote:

“Very good point of view. I would only ask you about your vision in relation to habits. As I observe, work climates seem to be dependent on habits more than on team collaboration and trust. What kind of techniques in your opinion are good to use to rebuild climate when organizational habits are very strong?”

It’s a good question.

There is a technical definition for work-climate – it’s the combined perceptions, thinking and feelings of a particular work group or whole organization. It is these perceptions and feelings that give rise to behaviour. The term Mr. Kifner used is ‘habit:’ a repetitive behaviour which is an outcome of climate. To get to the answer to his question we need to examine what drives the perceptions in the first place.

Our research has found that there are two main factors (there are many factors – but these have the highest influence)

Firstly, there’s the design of the organisation itself. Its job roles, reward and recognition systems, the goals that define success and the measurement system, all these are a matter of design and can be changed.

Secondly the attitude of managers to people, characterised by Command and Control or Listen and Adapt.

Many managers are by nature Listen and Adapt but are forced to act in a command and control manner because of the design features outlined above. We have a reinforcing circle that needs to be broken to change behaviours and habits.

The way I choose to break that circle is by highlighting the cost of non-productive behaviours in terms of business cost – i.e. customer experience, innovation but mostly the cost to gaining the willing contribution of staff and the loss of integrity of staff and managers. Only when the cost outweighs the benefits of behaviours can change conversations even begin.

Thanks to Tadeusz Kifner for the question.

The complete original blog post is as below:

Adaptive: Work climate and culture are not the same

I get calls from companies these days who are struggling with the amount of discontinuous change caused by technologies, new business models coupled with unprecedented pressures to upgrade the skills of people just to keep up let alone excel.

In addition the way organizations have to connect to other organizations around the world, even for temporary purposes simply to maintain daily delivery, have blown apart the whole notion of nice, solid steady value streams.
collabThe implications of all this constant, rapid change are profound and far reaching for the management of staff, the work design, measurement systems, people development and reward systems. Simply put, the old management models and thinking are obsolete.

Agile Management has now come of age with its fixation on the customer while enabling staff to continuously innovate and change the business. It’s an on-demand, continuous change system but unfortunately some businesses settle for far less by using Lean and Agile just to improve a few processes. That’s fine, but there’s so much more potential.

Some years ago, an organizational change transformation typically took about four years. But my organizational transformation process is now down to eighteen months because we use a diagnostic based on behaviour and something called ‘the work-climate‘. It has significant implications for how we design, build and operate organizations.

What is this behaviour-focused diagnostic looking at?  Well, we start with the work climate. Social scientists have been looking at work climates for many years and have demonstrated the effects of attitudes on certain work outcomes.

It was a revelation to me that we could actually understand the impact of the operating strategy, the structures, the managing practices and how we make decisions by examining the perceptions, feelings and behaviours of staff at every level of the organisation. The data provided a deep insight into the disconnects and misalignment of management thinking and pointed to alternative better approaches.

An adaptive trusting climate drives collaboration. Everybody thinks you can put people into a room, have them band together to solve a problem and that’s collaboration.  It’s not.  Collaboration is all about reciprocity.  Do you trust me and can I trust you?  If so, we’ll get along and be able to collaborate as long as we are connected to the real needs of customers.

An adaptive work climate needs to focus on ‘engaging’- how we understand the deep needs of customers, Learning- how we collaborate end to end to meet customer needs, ‘Leading’- how we devolve decision making to the point of interaction with the customer and lastly ‘improving’ – do staff have the authority and the methods to change how work is delivered to customers to meet their needs.

Is there good leadership? A challenging environment?, Enough freedom and decision making?  Do we share intelligence within our team? Within our function?  When do we see our senior management?  All of this gives rise to the work climate.

Work climate is entirely different to culture.  A culture takes a long time to establish, but once ingrained, proves very difficult to shift. The twist is that all cultures start off as a work climate that have sustained for a long periods of time.

Work climates can change very rapidly. There could be a good climate in an organization but when a new manager enters the mix with a strict focus on the numbers restricting freedom and locks everything down the climate changes rapidly but has the culture of the organization changed?  Probably not.

But if that manager keeps going like that for a sufficient length of time, it becomes ‘the way we work around here’.  So the toughest challenge for Adaptive transformations is changing the climate long enough so it becomes the culture.

It could be a toxic climate or a really productive climate but the secret to creating and maintaining an adaptive climate is management trustworthiness – can staff trust you?

Building trust between managers and staff is the path to real Adaptive organizations. Trust allows freedom, choice and the power to do what matters for customers through the willing contribution of staff and managers alike.

Stop trying to change cultures and start trying to change climates.

Purposeful adaptability

Adaptability is a crucial factor in the ability to survive, whatever the context.

In the natural world, adaptability is a response to the simple desire to survive and reproduce and it can be argued that its purpose is completely oblivious to the specific life forms mountain-climber-climbing-retro_fktDCL8uthemselves.

In the business world however, adaptability has to be consciously purposeful. For most organisations purpose is woefully underthought, expressed rather purposelessly via a catch-phrase such as ‘Our Purpose is to be No.1 in our marketplace’.

Perhaps this is part of the reason why most organisations don’t deliver long term prosperity for customers, employees and shareholders.

Unlike the natural world, organisations are free to choose their purpose, develop a common purpose upon which all stakeholders agree and then create structures and practices that keep the organisation and its services changing in response to obstacles, threats, and opportunities, keeping them on-purpose.

Organisations are also free to change their purpose. Adaptive organisations keep asking themselves ‘Is it still the right purpose’, and ‘are we exploring all avenues towards our purpose’.


Organisational Adaptability is about developing a mind-set open to a new purpose coupled with the ability to redirect everything quickly and safely towards that new purpose.