CUSTOMER CENTRIC RETHINK - ISS Institute - … CENTRIC RETHINK FOR VOCATIONAL EDUCATION TAbLE OF CONTENTS i. Executive Summary 5 1. Fellowship background 8 1.1 Aims of the Fellowship

for Vocational EducationAn International Specialised Skills Institute Fellowship.

SANDY POWELLSponsored by the Department of Education and Training (Victoria), Higher Education and Skills Group. © Copyright September 2017

CUSTOMER CENTRIC RETHINK

CUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 2

PAUSE FOR THOUGHT... IT’S AbOUT UNDERSTANDING THE CUSTOMER

Pause for thought... It’s about understanding the customer

Once upon a time….

A ten year old boy was strolling through the park.

He was wandering aimlessly along kicking stones. He had been doing this for some time when he noticed a large and unusual target. Just before he kicked it, he realized it was actually a frog.

He bent down to pick it up whereupon he heard a voice say “Don’t kick me!” He couldn’t believe his ears and picked up the frog - the frog looked at him, its eyes pleading “Please don’t hurt me”.

The boy was staggered - a talking frog!

The frog spoke again. “Don’t hurt me. If you kiss me I’ll turn into a beautiful princess.” The boy continued to stare at the frog in amazement. The frog pleaded again, “Kiss me, I’ll turn into a beautiful princess and do anything you want.”

The boy simply tucked the frog in his pocket and carried on down the path kicking stones.

The frog jumped up and down in his pocket furiously. The boy finally took the frog from his pocket and brought it up to his face. “What’s the matter?” he asked the frog. The frog replied, “I told you that if you kissed me I’d turn into a beautiful princess and I’ll do anything you like, but you just put me in your pocket - why?” “I’d rather have a talking frog”

(#Vanguard Consulting Limited, 2001). … it is about understanding the customer journey from their perspective.


PAGE 3

PAUSE FOR THOUGHT... IT’S AbOUT UNDERSTANDING THE CUSTOMER

And let’s reflect on the journey of many students ...

They have their feet on the ground looking up to find their future. The journey seems solid enough at the start but soon becomes a tangle of misdirection as they try to build the foundations of their future.

Image 1: An oak tree in the grounds of Buckingham Congregational Church, University of Buckingham UK

TAbLE OF CONTENTSCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

i. Executive Summary 5

1. Fellowship background 8

1.1 Aims of the Fellowship 8

1.2 Methodology 8

1.3 About the Fellow 9

2. The Australian Situation 10

Advantages of the current public sector VET approach 10

Disadvantages of the current public sector VET approach 10

What we know 11

What we need to learn 11

3. International Experience 12

4. Findings and Recommendations 15

5. Knowledge Application and Dissemination 27

6. Acknowledgements 30

Awarding Body – International Specialised Skills Institute (ISS Institute) 30

Fellowship Sponsor – The Higher Education and Skills Group 31

7. References 32

8. Appendices 34

Appendix 1a - Summary – Implementation of a Service Oriented Systems Approach 35

Appendix 1b – Vanguard Approach applied to Vocational Education – four-day workshop 37

Appendix 2 – Framework for customer focused Strategic Planning 56

Appendix 3 – Defining Customer Nominal Value 60

Appendix 4 – Applied Problem Solving Approach using Lean Thinking 63

Appendix 5 – Universal System of Work: A Change Management Process 69

Appendix 6 – ‘Administration’ verses ‘Sales and Service’ approach 71

Appendix 7 – Lean Change Management tools and Communication 75

Table of Contents

I. ExECUTIVE SUMMARyCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 5

This ISS Fellowship presents a new approach to save costs and achieve better services for customers of vocational education organisations. This approach will be of interest to CEOs of vocational education institutions, government departments or anyone who is considering how to maximise vocational education outcomes within budget constraints.

The approach stems from ‘lean manufacturing’, which has been used to cut costs and improve customer value in manufacturing for decades, but modifies the principles so that they apply to service delivery at vocational education organisations.

‘Lean services’ thinking provides an answer to the challenge of providing a training service aligned to the customer’s (learner’s) needs, while accommodating the realities of regulatory complexity and limited funding. The key driver is a focus on the customer’s purpose from their perspective. The latest international work on creating leaner services focuses on strategies for people development, improved levels of service to customers, and improved strategies and systems of work for business.

While government and vocational education organisations are already investing resources into answering the question of how to make these organisations more efficient, this Fellowship provides much-needed consideration of how we can ensure such changes do not come at a cost to student outcomes. Consultants often recommend a focus on ‘economies of scale’ (functional specialists, fewer courses, centralised processes etc.) when designing ways to improve efficiencies. This approach, however, often comes at a cost to the customer (students). Applying lean service principles provides an alternative way to reduce costs for vocational education organisations while improving outcomes for their customers.

i. Executive Summary

The Fellowship also provides much-needed consideration of how theoretical proposals for making these organisations leaner can be implemented on the ground. The method for the Fellowship involved investigating the latest international work on lean service delivery principles and workshopping these with staff at GOTAFE to determine how they could be implemented in practice. Bridging the gap between current theory in lean service provision and its implementation on the ground is critical to successfully implementing changes within these organisations.

The recommendations arising from this Fellowship outline the settings that need to be in place to successfully apply a lean services approach to Victorian vocational education organisations. These include practical initiatives for individual organisations, such as ways to think about systems of work and change management frameworks. Successful implementation of the recommendations may also require broader approaches from government, particularly in relation to performance indicators for these organisations.

This Fellowship found that improvement can be achieved by focussing on the customer’s purpose using lean principles. A successful approach to this involves growing better organisational thinking, aligning systems of work to the customer purpose, and building staff capability to engage and be part of these changes. A key challenge is that current practices in vocational education have a qualification focus that relies on standard training programs without recognition that the customer has a key role in development of the service they require. Current government funding and regulatory requirements are based around this model. This means that, to move to leaner services, we need to make changes to vocational education organisations themselves to provide a focus on the customer rather than regulatory and funding settings.


PAGE 6

» Actions based on understanding activities that do not add value from the customer’s perspective driving remedial waste and cost reductions

» Development of ‘external opportunities’ to derive income from changes in government policy or market conditions.

Using measures focused on the customer purpose provides a default strategic direction for an organisation to improve outcomes for customers and the vocational education system.

R3 – Gain a better understanding of customer value: It is recommended that there needs to be more effort to understand the nominal value of individuals and organisations looking for advancement within the vocational education system. The Fellowship has developed a review process for vocational training organisations to assess their current efforts based on lean service principles, lean product development and Neuro Linguistic Programming (NLP) principles as a basis for this review.

R4 – Apply an open and engaging approach to changes: As lean service principles were introduced through the applied research element of the Fellowship, difficulties were identified in gaining agreement on the right recipe for change and where to start. Based on the international experience gained through the Fellowship, an open and engaging improvement approach was developed that respects change as part of the process. It is recommended that change management projects within the vocational education system consider this approach to improve project outcomes.

R5 – Review organisational systems of work by comparing them to an ideal system of work using lean services principles: A key learning from the Fellowship was that to implement lean service principles, there needs to be an open and holistic focus on the organisational ‘systems of work’ and how they respond to customer demand. The Fellowship provided an opportunity to develop a universal definition of ideal ‘systems of work’ that embeds lean service

Lean services concepts are easily written but hard to achieve in practice, given entrenched settings in the current vocational education environment. A method is required to bridge the gap between theory and practice. The outcomes of this Fellowship provide tools and techniques to allow an organisation to access this new thinking as they hone their approach to improve customer service.

Key findings and recommendations from this Fellowship are as

follows:R1 – Undertake a financial analysis of potential savings to be obtained through lean service principles: Lean service principles focused on the customer’s purpose are not currently being applied in Victorian vocational education organisations. Current approaches typically apply traditional management principles via functional and delivery area hierarchies. It is recommended that analysis be completed to establish waste streams based on lean service principles to establish a financial value proposition as a platform for change. Typically, these waste streams are up to 40 per cent of all non-training delivery staff costs. The review may provide further insights into changes required in management structure and culture to align with the customer’s purpose.

R2 – Review performance measures against lean service principles to determine changes required: Many of the performance measures for funding of the Victorian vocational education sector are contrary to lean service principles (and a focus on the customer). This means lean service principles will be difficult to implement under current funding structures. It is recommended that there is a review of business performance measures to determine where change is required to align them with lean service principles. The review has four elements.

» Growth and trends in high volume courses where there is ‘standard customer value’

» Growth in business opportunities driven by listening to the ‘voice of the customer’


PAGE 7

principles, providing a basis for change management. It is recommended that organisational ‘systems of work’ are reviewed using this universal definition.

R6 – Review the interface between organisations and their customers: Many of the processes a customer is required to navigate during their initial engagement with vocational education organisations are a barrier to training uptake. This reality is due to pressing needs for organisations to comply with contractual, regulation and policy requirements. Some existing training delivery areas have a ‘sales and service’ approach to student engagement and enrolment, where a single individual engages with potential customers to understand their needs and directly supports them through all processes up to the start of training. It is recommended that pockets of current ‘sales and service’ practice be reviewed using the lens of lean service principles to further develop these models and provide a framework to review organisation structure to improve student attraction and admission functions.

R7 – Organisations should clearly communicate proposed changes to their stakeholders: Implementing any of these changes will take effort. A challenge is that change does not produce linear improvement outcomes as effort is applied to integrate new thinking into organisations. It is difficult and takes significant effort and interaction. The Fellowship investigated three approaches, using lean principles, to deal with communication and stakeholder engagement. It is recommended that organisations consider these approaches when developing their communication plans.

Top: Our customers nominal value

Left: Our customer journey into vocational education

1. FELLOwSHIP bACKGROUNDCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 8

1.1 Aims of the FellowshipThe purpose of this Fellowship is to assist in the development of skills and knowledge regarding the application of lean systems and processes to vocational education organisations. There are a variety of levels of lean manufacturing thinking that can be applied to the vocational education sector. However, there is currently a gap between lean service principles and how they might be applied in practice to vocational education. This Fellowship provides a practical perspective of how lean service techniques can be applied to this industry sector. Core themes are:

» Lean Strategic planning frameworks

» Customer service management thinking

» Systems thinking in providing customer value in service organisations

» Defining customer nominal value

» Frameworks for organisation change management in the public service training environment.

Applying lean service principles to streamline service delivery in vocational education organisations is particularly important in an environment of limited government funding and regulatory complexity. This Fellowship will assist in filling the identified skills and knowledge gaps to provide an alternative way to improve services and cut costs based on lean service principles.

1. Fellowship Background

1.2 MethodologyLean improvement methodology developed by Toyota has been documented and actively implemented across much of the manufacturing industry over many years. The roots of the methodology are based on producing a physical product, such as a car. Recently, there has been a significant effort to apply the same approach to the service industry. The service industry is different in that it does not produce a physical product, which means there often is a considerable variety of possible outcomes. The principle work in this area has been with public sector government services in the United Kingdom. The methodology for the Fellowship was to meet and study with individuals and organisations who are active in this space, then look at an active research approach to applying these insights within GOTAFE to understand how to gain traction for this type of thinking. The specific steps were as follows:

» Complete a desktop review of the current lean techniques applicable to public sector service organisations within an educational context

» Identify individuals and organisations active with this next generation lean service thinking

» Meet with identified international experts and study their approach to lean services

» Review their thinking and develop approaches that relate to the public sector vocational education sector

» Complete applied research to test the approaches through development of papers for discussion within GOTAFE

1. FELLOwSHIP bACKGROUNDCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 9

This Fellowship concept was borne out of a short-term secondment undertaken by Sandy to manage the administration hub for GOTAFE. He found that typical lean manufacturing approaches could be used to some extent to gain improvements in service areas of an organisation. However, there is a clear difference in the application to a service delivery organisation in that the “work” is not a physical product as such. The products in this environment are “paperwork” and “customer service” which can have high levels of variation. Lean manufacturing principles only take you so far. This Fellowship began around a curiosity in the development of lean principles in organisations that provides a service. With his recent experience in vocational education and extensive background in manufacturing, Sandy was in a unique position to be able to add real value to translating lean manufacturing concepts across to the service delivery environment.

Image 2: Sandy Powell, ISS Institute Fellow

» Summarise learning and develop frameworks to grow understanding of the application of lean principles in service organisations.

1.3 About the FellowSandy Powell has been working in the public sector vocational education industry for over 12 years, with his latest role as Executive Manager of GOTAFE’s Rural and Manufacturing Industries division. This position is responsible for training delivery focused on several areas, including horticulture, animal sciences, equine, the processed food industry and dairy processing and manufacturing (logistics, lean systems, consulting, safety and laboratory training).

Through his time working in the vocational education system, Sandy has been active in studying improvement methods and knowledge development within industry. He has spent time working within TAFE and industry to investigate and resolve unique training needs that are not typically covered by standard unit of competency training approaches. In this role at GOTAFE, he represented the food industry in the development and roll out of the Competitive Systems training package for Australia.

Sandy holds the following qualifications:

» Bachelor of Engineering (Mechanical), Chisholm Institute of Technology, 1982

» Diploma of Logistics, GOTAFE, 2004

» Lean System Certificate, University of Kentucky, 2008.

Before GOTAFE, Sandy worked for over twenty years in the food manufacturing and mining industry as an engineer and senior manager with a focus on performance improvement. This energy and knowledge has been applied within the educational context, enabling a new perspective on gaining improvement in public service organisations.

2. THE AUSTRALIAN SITUATIONCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 10

2. The Australian Situation

Many TAFEs began as local technical colleges with students coming to class daily for training. However, in the 21st Century, regional TAFEs have evolved significantly from this model. Training can be delivered online, through blended workshops, in industry or in traditional classroom format, with a wide variety of assessment formats. There is also a complex range of regulatory frameworks that apply to training including ASQA, VQRA, HESG Service Agreement, Prison education, VETiS/VCAL, VET Fee-Help, Apprenticeships and Traineeships and External Accreditation bodies (e.g. ANMAC, Worksafe, Licensed trades etc.).

Given the relatively rapid transformation over the past few decades from local technical colleges to modern, interconnected training organisations with students from a large variety of jurisdictions, the regulatory and funding frameworks are evolving to catch up, which has increased overall complexity. In this environment, there needs to be a rethink of overall business system structures to achieve long term financial sustainability. The effort required to navigate the current regulatory and funding complexities often conflicts with a simple need for a customer (a student) to be serviced with training.

Advantages of the current public sector VET approachFirstly, there is a diversity of range of course offerings. Regional TAFEs do more than just low hanging profitable course offerings covered by other providers. There is a community service obligation to provide training to support the diversity of regional communities, for disadvantaged or marginalised groups, niche regional development programs or high technology regionally-based manufacturing industries.

This diversity has led to a growth in internal capability across a range training delivery and assessment modes, including digital delivery tools and techniques to accommodate thin and remote markets. There are also ‘pocket examples’ where there has been a growth in capability to mould training packages to achieve significant performance improvement outcomes for specific industry and individual cohort needs.

Disadvantages of the current public sector VET approachOverall, the public sector vocational education system is going through enormous change as it grapples with funding and regulatory complexity. The industry has been slow to change as there is significant legacy thinking that continues to frame how these new arrangements are accommodated. In large organisations, there is a significant challenge around the dispersion and take up of information regarding this increasing complexity. Throughout this changing reality, there is a lack of knowledge of how to deal with the high variety in service needs of customers, the students. Thus, there are significant delays from the customer’s perspective regarding services, which is ultimately affecting the viability of regional publicly funded TAFEs. This is often further compounded by skewing of management effort, as many of the current performance indicators relate to regulation and funding arrangements and not the customer purpose.

2. THE AUSTRALIAN SITUATIONCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 11

What we knowImprovement in customer service achieves better outcomes for the individual customer and the organisation providing the service. There have been significant developments in the understanding of how to apply traditional manufacturing-based lean improvement methodologies to public sector organisations. To date, this opportunity has not been framed in the regional vocational education context. We know that there is significant waste in the administration and management processes in vocational education organisations, which impacts operating costs. Many of the current business key performance indicators are also not aligned to the customer’s nominal value. We have an opportunity now to develop a framework for improvement that can serve as a foundation for the next generation of VET regional delivery focussed on the customer’s purpose.

What we need to learnConsultants who are asked for advice on how to improve the sector often follow traditional approaches from both lean principles and change management without necessarily taking the next step to tailor these approaches to the needs of the sector. Vocational education organisations also find it difficult to evolve from management structures of the past. Thus, a move to customer service focus will require significant changes in thinking.

This Fellowship is about stepping outside the existing norms to explore alternative approaches that have been proven internationally and refocus our efforts back to the core of training customers for improved individual, social, regional and industry outcomes. This will enable the development of a range of strategies to be used by the sector to improve outcomes.

3. INTERNATIONAL ExPERIENCECUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 12

3. International Experience

This Fellowship is about determining the best way to apply lean principles of customer service to publicly funded vocational education organisations. Initial research identified Buckingham University (United Kingdom) and, more specifically, work completed by Professor John Seddon regarding the Vanguard approach (described further below) best reflected an improvement approach that could align with the improvement needs of the vocational education system.

‘Image 2: Workshop presenter showing the typical problem in administration systems’

International Experience – first learning exposure

» Activity – Seminar on Vanguard Method and People-Centred Services.

» Destination - Birmingham, United Kingdom, June and October 2014.

» Contacts – Andy McLean, Vanguard Consultant and trainer, Vanguard seminar on implementation of Lean to service and administration organisations.

The initial part of the Fellowship involved completing a training seminar on the Vanguard approach to people centred services. This methodology applies lean principles to public sector organisations that provide a service. It was developed by Professor John Seddon from Buckingham University and is available to be studied via Seddon’s consulting business.

The Vanguard approach is summarised in Appendix 1a. This represents a recipe for the sequence of steps to be considered when developing a customer service centred approach when the primary product is a service. The Vanguard approach involves measuring the performance aspects of the service supply for a customer, as well as considering the underlying ‘command and control’ philosophy that underpins public sector organisations and how this may impede best customer service delivery.

Review and application. Armed with an understanding of the Vanguard approach, the next part of the Fellowship involved looking at how to apply this lean services approach to the current public vocational education context. The Vanguard approach was reviewed and further academic research completed to contextualise the information based on the current realities of the VET sector.


PAGE 13

Appendix 4 - Applied Problem Solving Approach using Lean Thinking -

This is a problem-solving tool that provides a framework for the development of a project scope based on lean service principles before the engagement for standard project management implementation.

Appendix 5 – System of work – a change management process

The starting point for the Vanguard approach is the ‘check’ step, which reviews the current state of the service supply to the customer (or student). This discussion paper has developed a universal definition of an ideal ‘system of work’ that provides a framework to begin this step. Its aim is to open discussion about the effort to work on the system, moving away from command and control thinking.

Appendix 6 – Administration verses Sales and Service

This is a discussion paper that challenges the mental model of the student administration system of work. It provides an alternative view that enrolment processes should be subservient to a ‘sales and service’ approach focused on engaging the student in their learning journey.

Appendix 7 - Change management workshop

A key outtake from the workshop was that there must be significantly more consultation with stakeholders at all levels of an organisation to embed lean thinking into the service sector. At times, we consider one off meetings with accompanying meeting Minutes as consultation. When combining this with a lean ‘training within industry’ (TWI) approach, the amount and type of consultation needs significant effort to embed lean thinking in the vocational education system.

A summary of application of the Vanguard approach to the VET sector is in Appendix 1b. With this body of work completed, a series of discussion papers were developed, applying this thinking to specific issues at GOTAFE. These discussion papers were delivered to a range of staff, working groups and standard educational meetings. The discussion papers presented the merit of an alternative view for resolving issues based on lean service principles. The working principle was one of ‘infection of new ideas’ and considering how these ideas resonated with participants to gain insight into and basis for uptake or resistance.

During this process, it became apparent that many of the overarching principles ‘in name’ were agreed, but there was not a clear understanding of the path available to adopt these new directions. This revelation prompted a change of approach in the discussion papers to focus firstly on assisting staff to ‘learn to see’ the problem and then generating curiosity regarding alternative solutions. The following discussion papers were developed and are detailed in the following appendices:

Appendix 2 – Framework for strategic planning – what problem to work on

This discussion paper provides an alternative strategic planning framework based on lean service principles for public sector vocational education providers. It covers four strategic focus areas and considers non-typical key performance measures that may be more suited to lean services.

Appendix 3 – Customer nominal value

This discussion paper covers thinking based on lean service principles on how to determine customer value for individuals as they present to vocational training organisation. The paper also covers an extension of this thinking to industry clients.


PAGE 14

International experience – final exposure and review » Activity - 2016 European Lean Educators Conference

» Destination – Buckingham University, United Kingdom September 2016

» Contacts:

» Professor John Seddon, University of Buckingham, Principle consultant Vanguard Consulting

» Professor John Bicheno, University of Buckingham, Lean Enterprise Unit

» Joakim Hillberg, University of Stirling, Principle consultant Revere, change management

» Stephen Parry, co-author of ‘Sense and Respond - The journey to Customer Purpose’

» Will Pyke, Vanguard Consultant Ltd, Principle Vanguard consultant in public sector reform.

This was the final part of the Fellowship’s international experience. The conference was based at Buckingham University and the focus was on the application of lean principles in the public sector service industry. It was an opportunity to meet with many of the key international thinkers the Fellow had studied and discuss the application of lean service thinking to our vocational education system. The conference had an additional two days of workshops devoted to topical issues in lean services. Based on feedback on the discussion papers, the Fellow attended a workshop on change management and a one day summary overview of the Vanguard approach to lean service.

Vanguard workshop. This workshop was useful in that it presented an opportunity to test drive many aspects of lean services as they applied to vocational education organisations with a group of lean educators guided by a Vanguard Consultant. It was about polish and being given the opportunity to ask the ‘next question’ after having been immersed in both the theory and the practical applications of this type of thinking. Feedback from this workshop was incorporated into the Fellowship report.


PAGE 15

4. FINDINGS AND RECOMMENDATIONS

This Fellowship was about gaining insight into lean methodologies beyond the typical approaches that have been adapted directly from the lean manufacturing era. The overall finding is that lean improvement methods that are specifically sculpted for public sector vocational education organisations do have significant potential to improve both learner and business outcomes. The Fellowship outcome is to present a series of models that assist in applying lean principles in vocational education organisations.

It is important to start from foundation thinking that is focused on the customer purpose.

Findings 1 (Detailed in Appendix 1a, 1b)Lean service principles focused on the purpose of the customer are at odds with the traditional ‘command and control’ management hierarchy common in public sector vocational education organisations.

Much of the current management structure is driven from the top down using functional specialists where management is separated from the work. It is driven by targets, policy and procedures where there is a focus on managing budgets, managing people and achieving KPI targets imposed by government and regulatory authorities. If we are to move to customer service thinking, the perspective, the design of the organisation, decision making and measures are significantly different. The key focus of management in lean services is to listen to the voice of the customer and understand their nominal value. It is to design the workflows that will maximise value to the customer. Measurement is about the capability of the organisation to fulfil its purpose from the customer’s perspective. The key goal

of management is to optimise the systems of work, ensuring operational staff are best placed to meet the customers’ needs without unnecessary administrative burden.

Seddon goes to Deming’s work on improvement methodologies. “Most people imagine that the present style of management has always existed, and is a fixture. Actually, it is a modern invention, a prison created by the way in which people interact” (Appendix 1b: Day 1 summary).

Much of this “invention” has at its core the dominance of academic and regulatory controls, and the annual time and budget cycle of current arrangements.

The first key finding is that there is a significant opportunity to rethink management approaches to focus on the system aligned to the customer’s purpose. Seddon’s work has identified that there is typically 40 per cent wasted activity caused by the way work is designed to occur in administration and management organisation functions in service organisations. This type of waste is ‘failure demand’ in that the overall design of the system of work continues to produce failures which require rework or non-value adding activity to resolve. The labour component of many public sector service organisation is around 70 to 80 per cent (and higher) of their cost structure. This represents a significant opportunity for cost improvement and improved service to our customers.

4. Findings and Recommendations

4. FINDINGS AND RECOMMENDATIONSCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 16

Findings 2 (Detailed in Appendix 2) Many of the sector’s current business performance measures are perpetuating status quo and are not focussed on the customer purpose.

The second finding from this Fellowship is that the way we currently measure performance within service organisations is often inconsistent with the application of lean principles. Again, Seddon reflects that much of the current improvement approaches in service organisations use “external think processes” from a range of consultant houses with a view to “set up the organisation for efficiency”. This often involves considering ways to trim organisation costs by finding more efficient ways to do what the organisation is already doing. Typically, a business management plan is developed that becomes the “de-facto purpose to all activities” reinforced by the existing external reporting measures.

The existing ‘methods’ or ‘systems of work’ to achieve this purpose become a constraint to serving the customer, encouraging frontline staff increasingly use workarounds when dealing with many issues that present during interaction with the customer. This then drives up rework, cost and complexity.

The alternative is to rethink what the organisation is doing and how it can most efficiently get the best value outcomes for the customer.

To embed “customer service thinking” Seddon suggests that performance measures need to align with the overall purpose in terms of the customer’s needs. With these types of measures, a method to achieve success is liberated to support the customer, and the system of work within the organisation becomes the construction framework to establish a business and operational plan.

A key challenge that relates to this finding is that there are often two types of customers for the vocational education sector. The first is the individual learner or business who engages in vocational education to develop a career, a business outcome, and contribute to the community. The second is government, which is

Recommendation 1 Analysis work needs to be completed to establish waste streams based on the Vanguard approach. The resultant financial value proposition is then used as a platform for change in management structure and culture to align with the customer’s purpose.

Work completed by Seddon indicates that more than 40 per cent of administration and organisational activities across operations and support areas, are being consumed by ‘failure demand’, typically rework and waste. Much of the strategic effort in the sector has been about looking for savings by reducing the scope of registration by taking out non-profitable courses, organisational structure changes to reduce cost and centralisation processes to improve efficiencies. The alternative presented by Seddon’s work is to measure the value demand and waste associated with failure demand as a starting point for designing the system of work aligned to the flow of the customer as they progress through their engagement and learning journey.

It is recommended that there is a change in thinking to core lean service principles. This is a move away from “economies of scale” (functional specialists, fewer courses, centralised processes etc.), to the “economies of flow” where the customer’s nominal value is the priority. This is not typical of public sector vocational education organisations. To entertain the potential of this leap of faith, it is recommended that factual measurement process be adopted that can identify waste streams in terms of dollars based on lean customer service principles.

Through this Fellowship, standard techniques have been identified to complete this type of analysis.


PAGE 17

» External opportunities – income derived from changes in government policy or market conditions.

It is recommended that the framework created by Parry and the resulting measures be used as a lens across publicly funded TAFEs to assist making a change to customer centred thinking. In this respect, a workshop would be useful to discuss and refine specific measures to assess the alignment of the overall systems of work to improve outcomes based on the measurement framework.

Findings 3 (Detailed in Appendix 3)The application of traditional ‘lean manufacturing’ principles has its limits in service organisations, as the service is not usually a simple ‘product’ – and the customer is much more involved.

This Fellowship found that the customer has a clear role in defining the service they require. On the face of it, it seems counterintuitive that the potential learner is part of the service design when learning is about completing a set course or qualification.

“In service, the customer brings variety and the aim of a service organisation is to understand what matters to the customer (their nominal value)” (Seddon).

Currently, there is a mandated pre-training assessment process for new students to ensure the student matches the course and the course matches the student. The problem is that this process is set up for the ‘typical’ student, aiming to ensure they are enrolled in the correct course by going through a generic standard enrolment process that is focused on compliance to the relevant rules and regulations. The process itself does not cater to all types of students and can therefore often be ineffective.

Applying lean principles to service organisations involves understanding the customer nominal value and then designing systems of work to flow from this,

looking to develop the best value for its investment in the vocational education sector, focusing on growing industry and improving the economic environment. A rethink in terms of overall measures that link outcomes for both learners and government provides a way to ensure improved value from vocational training. Different types of customers will be seeking different outcomes, which mean performance measure frameworks may need to be tailored in a way to support each set of customers.

Recommendation 2 Initiate a review of business operational initiatives using lean service measures as a lens for aligning strategic effort to the customer’s purpose.

A complete review of public sector training organisations is recommended, based on lean service measures developed by Steph Parry. These types of measures assist customer service thinking by being clear about the organisation’s purpose in term of the customer’s needs. The measurement system aligned to customer purpose then enables work to be undertaken that liberates value for the customer. With this approach, the strategic planning process can be an asset to support and develop the organisation as it goes through a transition process driven by the customer’s purpose.

Work completed by Parry in understanding the customer’s purpose offers a useful framework to rethink high level strategic measures to determine if they are focussed on key customer requirements. For the vocational education sector, this is both the learner and government. It is recommended that the four measures below be the framework for this review:

» Creating standard value – standard high volume courses growth and trends

» Opportunity business – growth driven from listening to the voice of the customer

» Remedial waste reduction – cost reduction of non-value activity from the customer perspective


PAGE 18

Individual learner For businessPurpose of the training.

Key identities that make the relationship.

Values and beliefs of the individuals.

Capability of the student and the match to a course.

behaviours of the individuals.

Environmental context, does the student have the “access” they need to complete the course.

Productivity Outcome that is tangible and realistic.

Market review of the industry or sector.

Customer intelligence to review what is already known about the client.

Look ‘go and see’ via a site visit to the client to establish the customer nominal value (which may not be training or productivity).

Value and price validation against competitors.

Value driven educational design at the customer’s nominal value positioning.

It is recommended that training providers review the processes that they use during engagement with individual learners and business using these principles to gain insight into their current approach and the systems of work that are used to support these processes.

as required to achieve that value. Current engagement processes are based on generic work processes. Variations in student’s needs during the enrolment processes, or training and assessment process are accommodated largely by individual trainers or administration staff working with good heart and intent to “make it happen”. This can require them to initiate workarounds or failure demand to these generic engagement and enrolment processes. Many students follow a very standard process of engagement, training and assessment. The issue is that not all students are ‘standard’, given the high variety of potential learners looking for advancement through vocational training.

Traditional lean thinking is about providing value to the customer and removing waste. However, when the product is a service, the level of variety is much higher. Seddon’s work is about designing systems of work to accommodate this high variety supported by the right management ethos.

Recommendation 3For individuals and organisations looking for advancement within the vocational education system, there needs to be more effort to understand customer nominal value.

Goldilocks and the three bears story…

“Customers want it ‘their way’ and not providing it in a manner they want it stands to increase costs through waste like failure demand (demand caused by a failure to do something or do something right for a customer).”

It is recommended that the engagement process with individual learner and the businesses be expanded to include principles that respect the customer’s nominal value. Key elements that need to be considered are:


PAGE 19

principles. The development of a learning culture within an organisation provides a good foundation for creating momentum for change. More effort at the front of the change management process is important to normalise views of all stakeholders and provides a solid foundation for change.

Through the Fellowship, an applied problem solving process was developed, drawing on standard methods that ensure a good foundation for introducing lean service principles is established (details in Appendix 4). The sequence of activities in this method are summarised below:

» Brainstorming the situation – looking at observed problems, measures, the facts of the situation

» Grouping the uncovered problems – groups multiple problems to develop a series of problem briefs

» A check process for diversity – check that diversity of services driven by the customer can be accommodated

» Mental Model review – a process to flip the thinking away from legacy approaches

» Project management and implementation - standard project management processes.

This sequence of approaches was developed using the work of a range of lean practitioners. It is recommended that organisations build internal capability to improve problem solving capabilities aligned to these steps. Effort in building a coalition of thinking using these steps improves the ability of an organisation to accommodate the resistance for change. In short, more effort in the definition of a problem produces better project outcomes.

Finding 4 (Appendix 4) Making change using lean service principles is difficult; the hardest part is finding the right recipe for change and where to start.

This was a finding that was made through the applied learning elements of the Fellowship. One of the biggest challenges for public sector education organisations is how to engage stakeholders at all levels to develop a solid foundation for change. Throughout the sector, there are a variety of approaches adopted. However, many are based on “command and control” management principles, which are often inconsistent with lean services.

Change is an iterative process. Successful change processes have good frameworks to use that are open enough to encourage and engage the diversity of views from individuals that have significant potential to contribute to best practice solutions. It is not about using another organisation’s best practice fix. All organisations come with individuals with a range of views that at times may hold back breakthrough thinking. The ‘best practice’ should be about the process to draw out and grow changes using the organisation’s own capability, that can improve the organisation’s alignment to the customer’s purpose.

The Fellowship provided an opportunity to look at a range of frameworks for change. The key challenge is to make sure as a team all stakeholders get to the “Houston we have a problem” moment together. Change is iterative: the challenge for all stakeholders understand the “presenting problem”, but where do you start?

Recommendation 4 To start a transition to lean service principles, use open and engaging improvement tools that respect change as part of the process.

It is recommended that an applied problem solving approach be adopted to develop a sound starting point for change in an organisation to adopt lean service


PAGE 20

The definition is a framework to review all systems of work. It provides a balanced framework between the need for consistency and the need to cope with variation driven by the customer. It states the importance of staff at the place of action to be clear about what to do and need to be clear measures that they are succeeding. It also addresses directly the need to move away from command and control management thinking and focus the organisation back to staff working with customers in a supportive team environment.

The universal ‘system of work’ definition is a checklist with embed lean service thinking.

Once this was available and applied to examples within GOTAFE, it was identified that in many situations much of the effort to date has been about defining how the work is carried out for a limited number of standard scenarios. However, embedded command and control thinking limits the ability of vocational education systems to cope with the diversity of scenarios driven by the customer.

Recommendation 5Review all systems of work using the universal definition as a process of change management.

It is recommended that administrative systems for operation and support that aim to provide value to the customer are reviewed based on the six points (in bold italics) embedded in the universal definition of an ideal ‘system of work’ below (details in Appendix 5):

» “An ideal system of work is rigid in ensuring consistency to achieve a task, yet self-learning to ensure it listens to issues and evolves in a controlled way

» It ensures clarity regarding what work is to be completed and provides a transparent way to measure progression

Finding 5 (Detailed in Appendix 5)There needs to be a total focus on the system of work and how it responds to customer demand. However, there is not a universal definition or understanding of what is required to develop a good system of work.

The approach Seddon offers as a starting point for implementation of lean in service organisations is to look at the purpose from the customer’s perspective, then look at measures and methods to achieve the customer’s nominal value. The starting point offered by Seddon is the “check” model, based on Deming’s PDCA improvement cycle, to review the capability of the systems of work that support value to the customer.

A finding of this Fellowship during the applied research phase was that there was not a good understanding of systems of work within GOTAFE in the lean service context. There was a general understanding of the mechanics of systems of control within finance and student administration systems. However, there was not a clear understanding of what it would mean in practice to move systems of work away from ‘command and control’ paradigm to a more inclusive basis that could accommodate diversity driven from the customer.

Based on this finding, a universal definition of an ideal ‘system of work’ was developed as a change management tool based on lean service principles that enables customers’ needs to be met.

The definition is as follows:

“An ideal system of work is rigid in ensuring consistency to achieve a task, yet self-learning to ensure it listens to issues and evolves in a controlled way. It ensures clarity regarding what work is to be completed and provides a transparent way to measure progression. It hands responsibility to get things done to those who do the work, and is a forum for teamwork to achieve a common goal.”


PAGE 21

by the learner. The organisation must include marketing and sales as part of the enrolment process as that is how the client initially interacts with us. How many enrolments are missed because we just lose the engagement with individual learners as they are trying to navigate their way into our organisation?

» Administration Costs - The current administration arrangements have multiple handoffs where there is a high opportunity for mistakes leading to rework. Typical administration systems have a minimum of 40 per cent of their effort on rework where increased multiple handoffs occur. This type of waste directly affects our customers. Examples:

» Call centre puts through an enquiry to a trainer who is training or on the road

» Administration paperwork circulating across multiple administration staff to get the work completed. Each time, potential for failure demand or rework increases

» Incorrect leads from a web based enquiry not reflecting the individual client’s needs resulting in lost sales.

» Trainer Cost – In many situations within training divisions, trainers to do a lot of this administrative work to complete a student enrolment. Our highest paid staff (trainers) complete various enrolment documentation and then a central administration function checks this information before putting this data into the student management system. Because of this multi-step process, trainers are doing administration work, administration staff are checking/processing and adding failure demand. Thus, the overall system of work has significant churn with little regard to customer value, and higher overall costs.

» System Maturity – In traditional academic structures, one of key roles of the Academic Registrar is control of issuing qualifications and control of government funding arrangements. Changing funding and academic requirements combined with immature ICT systems means that it has been important for a strong command and control management structure to stay in place to ensure compliance. Thus, there is an unwillingness to rebalance efforts as the system

» It hands responsibility to get things done to those who do the work, and is a forum for teamwork to achieve a common goal”.

This definition provides a framework for change management to improve systems that provide value to the customer. Each of the six elements of the definition provide an opportunity set a direction for improvement in any system of work. It also provides a framework for the correct posture of an organisation if it is to begin the journey to using lean service principles. It is recommended that all six elements are documented and regularly reviewed as part of the ‘systems and operation’ management process for vocational training organisations.

Finding 6 (Detailed in Appendix 6)Many vocational education organisations have lost sight of the customer due to the need swarm over regulation, policy and external measures.

A finding from this Fellowship is that current systems and processes in the vocational education system do not follow lean service principles. There are many competing administrative and structural complexities to be accommodated as a potential learner navigates their way into a vocation education course. When these complexities are viewed by the customer, they seem bewildering as most processes do not add value from their perspective. Customers being bewildered by “administrative processes”, is particularly an issue from a lean services perspective, as interaction with the customer is an integral step in defining the customer’s nominal value proposition.

» Sales - One could argue that all the current ‘administration’ system is focused on making enrolments work effectively for our customers. From a customer’s perspective, there are many examples where staff drop the ball due to the multiple handoffs that occur as we engage a learner into the organisation.

» Marketing - An effective digital marketing approach has intimacy with individual clients. Interaction with the client is a core part of defining the service required


PAGE 22

There may well be individual pockets of this type of approach already occurring in some training delivery areas. It is recommended that a review is conducted to identify these examples and develop their potential to be followed as good practice. Successful implementation is about starting small and following good principles, and not using organisation structure as a barrier to improve customer nominal value.

Finding 7 (Detailed in Appendix 7)Change is not linear. Change is difficult and takes significantly more effort and interaction.

During the applied research phase of the Fellowship, discussion papers across a range of topics were developed to introduce much of this new thinking into GOTAFE’s operational model. A variety of follow up discussions and meetings occurred on many of these topics with only limited actionable success. Further research was conducted to gain a deeper understanding of what would be considered standard project change management approaches, only achieved limited success. The Fellowship investigated three alternative approaches using lean principles applied to change management to address this issue. Attention was payed to communication and stakeholder engagement.

The last of the key findings of this Fellowship is that efforts in change management does not produce liner improvement outcomes. It takes time to integrate new thinking into the ethos of an organisation. Much of the change management communication and stakeholder engagement is completed as a series of one offs that satisfy traditional project management schedules. This does not reflect the multiplicity of efforts across processes, systems, staff stakeholders etc. so that the new mode of operation becomes second nature.

matures to provide access to new more distributed ways to develop systems of work based on the customer’s purpose.

Reflecting on current engagement and enrolment processes, there is significant attention to command and control methods of running an organisation. One of the findings of the Fellowship is that a blanket view that digital enrolment processes are a fix-all approach to streamlining administrative processes and does not respect the diversity of learner abilities, their differing situations, and that their interaction with key staff during the engagement process is part of the service definition. For a significant cohort of learners, it is important for them to develop relationships with individual staff within the registered training organisation, and being mentored along their pathway into education.

Recommendation 6Pilot a ‘sales and service’ model focused on learner engagement to reframe the student administration functions.

“A customer valued enterprise recognises that true customer intelligence resides with frontline staff, those who have direct contact with the customer” (Parry, S., et al, 2005).

It is recommended that public sector educational organisations pilot a sales and service model, encompassing marketing, sales and student administration functions for a cluster of qualifications. A sales and service approach is where a single individual engages with a potential customer to understand their needs and directly supports them through all processes up to the start of training.

It is a recommended that a cluster of qualifications be selected for this pilot where all the inputs to this model can be controlled. It is recommended that measures based on customers’ purpose be establish once a pilot cohort is selected and these measures be applied to both the pilot group and learners who progress through the standard enrolment processes.


PAGE 23

Recommendation 7Change on the right foundation thinking… but you need a good engagement plan.

It is recommended that significantly more consultation with stakeholders is undertaken at all levels of an organisation to embed lean thinking into the service sector. Up to five structured interactions are required with any significant change to develop a solid foundation around the proposed changes with each stakeholder group. It is recommended that organisations consider a much broader range of approaches rather than relying on traditional embedded project change management techniques. For change to be lasting, constant communication regarding the purpose of the change linked to the ‘true north’ strategic plan is required. It is recommended that an “Agile” project management approach be adopted that has open flexibility to learn by doing in a series of short project sprints regularly. These should be documented and available for open discussion.

5. KNOwLEDGE APPLICATION AND DISSEMINATIONCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 24

5. Knowledge Application and Dissemination

The Fellowship presented an opportunity to review lean principles as they apply to service organisations - in particular, the vocational education system. These organisations have a range of pressures requiring them to change, including changes in funding arrangements, government policy and regulatory frameworks. These pressures are compounded by continuing changes to qualification structures and delivery methods. There is also the ever-present competitive pressure due to the contestable market for vocational education.

As government funded organisations confront this reality, this Fellowship report may serve as a reference document providing an alternative approach to tackle these issues, using proven techniques. The seven recommendations may be used as the first stage of a strategic rethink.

This Fellowship report provides a series of starting points for higher level strategic thinking based on lean service principles focused on the customer’s purpose. The next step is to consider how this thinking might be applied in practice within vocational education organisations. A useful way to disseminate the information may be through a series of workshops with organisations.

Below is a proposed structure for dissemination workshops.


PAGE 25

Recommendations Dissemination workshop ProcessRecommendation 1 – Analysis work needs to be completed to establish waste streams based on Vanguard approach. The resultant financial value proposition can then be used as a platform for change in management structure and culture, to align with the customer’s purpose.

» Top line business review of value opportunity associated with failure demand and waste based on industry standard ratios.

» Strategic discussion regarding economies of scale verses the economies of flow.

» Establish a project to measure key waste streams from the customers’ perspective.

» Conduct a strategic review of business structure and existing improvement initiatives based on waste reduction and alignment to the customer’s purpose.

Recommendation 2 - Initiate a review of operational business initiatives using lean service measures as a lens for aligning strategic effort to the customer’s purpose.

» Review business plans against the four customer purpose measures.

» Creating standard value – standard high volume courses growth and trends.

» Opportunities for Business – growth driven by listening to the voice of the customer.

» Waste Reduction – cost reduction by reducing non-value activities from the customer’s perspective.

» External Opportunities – income derived from changes in government policy or market conditions.

» Conduct workshops to review strategy to discuss the balance of effort in the organisation against these four measures.

Recommendation 3 - For individuals and organisations looking for advancement within the vocational education system, there needs to be more effort to understand customer nominal value.

» Conduct a workshop with organisation’s staff who interact with our customers daily. Discuss the concept and definition of customer nominal value.

» Open discussion regarding existing tools, methods, types of approaches used.

» Develop opportunities for improvement.

» Follow up and review action sequence.Recommendation 4 - To start a transition to lean service principles, use open and engaging improvement tools that respect change as part of the process.

Proposed is a two-step process:

1. Conduct an open workshop with key staff to present the overall method and complete an accelerated trial run through the total process on a common problem

2. Teams then tackle a local presenting problem with support from facilitator/ coach to embed the capability with the team.


PAGE 26

Recommendations Dissemination workshop ProcessRecommendation 5 - To review all systems of work using developed universal definition as a process of change management.

» Initial workshop discussion to present the universal definition of ideal “systems of work”.

» Develop a listing of the key customer-facing systems of work used across the organisation.

» Complete an Internal review of performance against the criteria defined by the ideal “system of work”.

» Develop action plans for improvement.Recommendation 6 - Pilot a ‘sales and service’ model focused on learner engagement as way to reframe the student administration functions.

» Presentation of the concepts of ‘sales and service’.

» Identify current “pockets of practice” within the organisation that follow the concepts of “sales and service’.

» Discussion regarding the overall performance of these areas and any presenting problems.

» Discussion regarding opportunities for improvement and further application of this approach to other areas.

Recommendation 7 – Build a good engagement plan using standard tools to embed ‘customer’s purpose thinking’ as the foundation for change.

» A general discussion to review any current change management efforts occurring in the organisation and their focus on the customer’s purpose.

» Presentation the range of stakeholder engagement approaches and tools available.

» Discussion regarding how to improve the current change management communication efforts.

» Development and review of change management plan.

The overall dissemination process for the Fellowship report is as follows:

» Discussion with HESG regarding the application of the information to the current change management efforts across the Victorian vocational education sector

» Based on HESG feedback, circulation of the Fellowship report to key stakeholders

» Conduct workshops across the VET sector as required.

Conventional change management wisdom says that good ideas don’t go away, but are only relevant when the need arises. The Fellowship report serves as a reference resource as the march of change for improvement continues. Workshops can only be run based on a needs basis as issues and opportunities for change present; and where there is an opening for new thinking regarding improving alignment to the customer purpose.

6. ACKNOwLEDGEMENTSCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 27

Sandy Powell sincerely thanks the following organisations and individuals who gave their time and energy to assist in the completion of the Fellowship.

Awarding Body – International Specialised Skills Institute (ISS Institute)The ISS Institute exists to foster an aspirational, skilled and smart Australia by cultivating the mastery and knowledge of talented Australians through international research Fellowships.

The International Specialised Skills Institute (ISS Institute) is proud of its heritage. The organisation was founded over 25 years ago, by Sir James Gobbo AC CVO QC, former Governor of Victoria, to encourage investment in the development of Australia’s specialised skills. Its international Fellowship program supports many Australians and international leaders across a broad cross-section of industries to undertake applied research that will benefit economic development through vocational training, industry innovation and advancement. To date, over 350 Australian and international Fellows have undertaken Fellowships facilitated through ISS Institute. The program encourages mutual and shared learning, leadership and communities of practice.

At the heart of the ISS Institute are our individual Fellows. Under the International Applied Research Fellowship Program the Fellows travel overseas and upon their return, they are required to pass on what they have learnt by:

» Preparing a detailed report for distribution to government departments, industry and educational institutions

» Recommending improvements to accredited educational courses

» Delivering training activities including workshops, conferences and forums.

The organisation plays a pivotal role in creating value and opportunity, encouraging new thinking and early adoption of ideas and practice. By working with others, ISS Institute invests in individuals who wish to create an aspirational, skilled and smart Australia through innovation, mastery and knowledge cultivation.

For further information on ISS Institute Fellows, refer to www.issinstitute.org.au

Governance and ManagementPatron in Chief: Lady Primrose Potter AC

Patrons: Mr Tony Schiavello AO and Mr James MacKenzie

Founder/board Member: Sir James Gobbo AC, CVO

board Chair: Professor Amalia Di Iorio

board Deputy Chair: Rosemary O’Connor

board Treasurer: Jack O’Connell AO

board Secretary: Alisia Romanin

board Members: John Baker, Bella Irlicht AM, Jon Onley, Camilla Roberts and Mark Kerr.

6. Acknowledgements

6. ACKNOwLEDGEMENTSCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 28

Organisations Impacted by the FellowshipThere is significant potential for the feedback from this Fellowship to contribute to the development of the organisational structure and form of public service training organisations. As with most of lean philosophies, tools and techniques, there is potential to extend the thinking into other industries where high variety in customer services occurs. Types of organisation where this is most relevant are:

» Regional publicly funded training organisations

» Government funded service providers

» Industry service organisation.

Fellowship Sponsor – The Higher Education and Skills GroupThe Victorian Government, through the Higher Education and Skills Group (HESG) of the Department of Education and Training, is responsible for the administration and the coordination of programs for the provision of training and further education, adult education and the employment services in Victoria and is a valued sponsor of the ISS Institute. The Fellow would like to thank them for providing funding support for this Fellowship.

Supporters » Paul Culpan, CEO Goulburn Ovens Institute of TAFE.

» Kath White, Associate Professor Kath White Dean, School of Food, University of Ballarat.

» Shane Hellwege - Group Manager-Industry People & Capability, Dairy Australia.

This Fellowship would not have been able to be completed without the support of the Goulburn Ovens Institute of TAFE (GOTAFE). The vocational education training sector and regional TAFEs are under extreme financial pressure as the education industry responds to both funding optimisations from government and increased regulatory burden and complexity. This is especially evident in regional TAFEs where many courses run with low numbers across a large geographical spread. It is acknowledged that GOTAFE is committed to exploring new and innovative ways to improve its internal efficiencies and this has extended to GOTAFE supporting this Fellowship.

7. REFERENCESCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 29

7. References

Customer Nominal Value: http://www.triarchypress.net/understanding-the-variety-of-demand.html

Dennis P.,2006, Getting the Right Things Done LEI, www.lean.org; Chapter 4 – Understanding Our Mess

Dennis P.2006, Getting the Right Things Done LEI, www.lean.org; Chapter 2 – Mental Models

Glenday I.,2006, Breaking Through to Flow: Banish Firefighting and Produce to Customer Demand, Lean Enterprise Academy

Graupp R., Wrona R., 2006, The TWI Handbook-Essential Skills for Supervisors, Productivity Press, http://www.triarchypress.net/understanding-the-variety-of-demand.html

Ian Glenday I., 2005, Moving to Flow; Productivity Press, http://www.repetitiveflexiblesupply.com/pdf/movingToFlow.pdf

Martin R., 2010, The Execution Trap, Harvard Business Review, https://hbr.org/2010/07/the-execution-trap

Maskell B. Baggaley B., 2004, Practical Lean Accounting: A Proven System for Measuring and Managing the Lean Enterprise, Productivity Press

Molden D., Hutchinson P., 2012, Brilliant NLP, Pearson Education Limited

Parry S., Barlow S., Faulkner M., 2005, Sense and Respond; The journey to Customer Purpose, Palgrave McMillan

Radeka K., 2013, The mastery of Innovation: A field Guide to Lean Product Development, CRC Press

Retrieved from http://blog.newsystemsthinking.com/wp-content/uploads/TheVanguardGuidetoUnderstandingYourOrganizationasaSystem.pdf

Seddon, J., 2005, Freedom from Command & Control, Rethinking Management for Lean service, Productivity Press

7. REFERENCESCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 30

Smith, A., 1827, An Inquiry into the Nature and Causes of the Wealth of Nations, University Press

Source: Joakim Hillberg (2016); University of Stirling, and Principle Consultant Revere; Change Workshop; 2016 European Lean Educators Conference: Buckingham UK

Vanguard Approach; Retrieved from http://blog.newsystemsthinking.com/wp-content/uploads/TheVanguardGuidetoUnderstandingYourOrganizationasaSystem.pdf

Vanguard Consulting Limited (2001). The Vanguard guide to your organization as a system.

Waldock, B., 2015, Being Agile in Business, Pearson Education Limited

8. APPENDICESCUSTOMER CENTRIC RETHINK FOR VOCATIONAL EDUCATION

PAGE 31

8. Appendices

Appendix 1a – Summary – Implementation of a Service Orientated Systems Approach

Appendix 1b – Vanguard Approach applied to Vocational Education – four-day workshop

Appendix 2 – Framework for customer focused Strategic Planning

Appendix 3 – Defining Customer Nominal Value

Appendix 4 – Applied Problem Solving Approach using Lean Thinking

Appendix 5 – Universal System of Work – a change management process

Appendix 6 – Administration verses a Sales and Service approach

Appendix 7 – Lean change management tools and communication


PAGE 32

Appendix 1a - Summary – Implementation of a Service Oriented Systems Approach

KEY: Management must understand what it means to change

from a command and control approach to systems thinkingDeming taught that the organisation should not be managed as a functional hierarchy. It should instead be managed as a system. “In particular, Deming and Juran showed most performance problems to be attributable to the way an organization is designed and managed. The way they expressed it was ‘Approximately 95% of variation in performance is attributable to the system’” (Vanguard Consulting Limited, 2001, p. 6).

Retrieved from http://blog.newsystemsthinking.com/wp-content/uploads/TheVanguardGuidetoUnderstandingYourOrganizationasaSystem.pdf

It is important to understand what it means to change from a command and control approach to systems thinking, as the systems dictate true service performance. Outlined below are steps an organisation can carry out to make this change.

Scoping

The first step is to spend a short amount of time assessing the scope for improvement. This involves a high-level check of issues in the organisation. The focus is to gain knowledge about customer demand, revenue, service flows, waste and the causes of waste. The purpose of this step is to understand the potential value and scope of the changes in practical terms.

Check

People who do the ‘work’ are given technical support to complete a check of the performance of the current systems of work that relates to immediate service to the customer. They need to consider what each system does and why it does this. From this, they can measure the performance of each “system of work” from the customer’s perspective. This work will lead to developing a scope for change and the means to achieve it.

Measures and Methods

In parallel with the ‘check’ step, a manager will need to work on the relationship between overall performance measures and method to achieve improvements. It is an essential exercise for understanding the need to change the nature and use of measures for managing and improving performance. There is a five-step exercise on measures unique to the Vanguard Method.


PAGE 33

Changes to Policy and Practice

Following the re-design, it will be vital to review matters of policy and practice. The issues will be highlighted by the organisation’s internal experts, but typically they will include budgeting, HR policy and practice, interpretation of regulations and information.

Finding Out what Matters to your Customers

Having re-designed and improved your service, it is a natural extension to step over the boundary and learn about what matters to your customers. The work leads to new services, designed with customers.

Prototyping

At the earliest opportunity, the ‘check’ team and managers working on measures establish a prototype for the re-design of management systems. This will allow them to obtain an early understanding of its anticipated savings and costs.

Leader’s Review

All the above work is brought together for a leader’s review. Thus, the leader can make an informed choice about the benefits of adopting the new (systems) design and can authorize preparation for implementation.

Proof of Concept

The prototype is extended and developed to handle all customer demands; the consequential improvements are tracked with new (system) measures while management develop a new budgeting and management information system.

Constancy of Purpose

The leader begins leadership of the change with the top management team. The change will involve changes to many things, particularly roles and measures. Clarity about future state and the means of implementation are essential.

Implementation

The re-design is implemented. Here, a choice can be made: establishing a working pilot (a complete re-design but limited in volume or scope); or making a complete change to the organisation. Management should discuss in all implementation options and resolve the best methods. This may include using independent expert advice, depending on organisational dynamics.


PAGE 34

Appendix 1b – Vanguard Approach applied to Vocational Education – four-day workshop

IntroductionBelow are the details of the Vanguard approach to lean thinking for service organisations as applied to public sector educational organisations. This information was collected during four one-day seminar training sessions delivered by Vanguard consultants. Based on this original information, each of the four days of training has been summarised and contextualised for the vocational education system to enable learning to be relevant and provide a direction for change. The four days of training where as follows:

Day 1 - Introduction to the Vanguard Method

» Distinction between conventional and ‘Systems thinking’

» Why ‘lean tools fail to deliver sustainable change’

» The Toyota Production System and ‘Systems Thinking’

» Introduction of the Vanguard model

» System condition as cause of inefficiency

Day 2 – Measurement and Flow

» Understanding variation in demand

» Measuring variation

» Turning data into information

» Deciding what to measure

» Introduction to building flowcharts

» Service models based on what matters to the customer

Day 3 - Pulling the learning together to understand the system

» Interpreting capability

» Realising the opportunity of considering the whole system

» Tackling the fundamental cause of waste

» Back at work learning and discussing your findings in the workplace with your peer group

Day 4 -Intervention and Strategy

» Influencing others to change their minds

» How organisations learn

» Intervening to solve problems

» Strategic opportunities based on operational learning

» Q & A next steps group


PAGE 35

1 efforts. This form of management allowed large masses of unskilled labourers to analyse and break down certain tasks into individual, unskilled operations that could be learned quickly.

Further developments were attributed to Peter Drucker who proposed that management is about human beings. Management’s task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant.

Seddon laments that we are still:

» Breaking things down into their individual components so that they are easier to cope with

» Putting targets on the individual functions to monitor and improve performance

» Getting the right people in the right roles to optimise and further improve performance

» Making sure there is a purpose and management structures to drive KPIs based on that purpose and not normally related to the customer.

Finally, Seddon goes to Deming’s work on improvement methodologies. “Most people imagine that the present style of management has always existed, and is a fixture. Actually, it is a modern invention, a prison created by the way in which people interact.”

Day 1 - Introduction to the Vanguard MethodThis session was about introducing the concepts of the Vanguard method. The session began with introductions and an initial discussion about the roots of ‘standard management’ thinking and how this needs to evolve when considering service organisations. Lean concepts largely seem counter intuitive when viewed for the first time. The training program works through these concepts as they would be applied to management in service organisations. There was a discussion about where to start applying Vanguard thinking to service organisations based around re-thinking the ‘check’ process when measuring performance from the customer’s perspective.

The command and control prison

One of the earliest developments of management practices was by Adam Smith in 1827 with his famous ‘pin factory’ example when he worked out that a more efficient way to make jewellery pins was to break tasks down into individual elements rather than getting workers to make a complete dress pin one at a time. Smith was far from content with this new approach even though it created more output. One of Smith’s quotes from the era, when discussing the state of minds of individuals being better before this division of labour approach, is as follows: “Invention is kept alive, and the mind is not suffered to fall into that drowsy stupidity which, in a civilized society, seems to benumb the understanding of almost all the inferior ranks of people.”1 It is a natural approach that we like to break things down into individual elements as it makes them easier to understand and deal with. This approach can take away some of the humanity associated with work which underpins great service in service organisations.

From this beginning, there was a discussion regarding the journey of management thinking. The first developments were through the scientific management approach used by Frederick W. Taylor between 1885 and 1910 to support the World War 1 Smith, A. (1827). An Inquiry into the Nature and Causes of the Wealth of Nations: University Press


PAGE 36

Changing management’s thinking

One of the foundation slides used by Seddon2 to explain the Vanguard approach to changing managements thinking is below.

Change Management ThinkingCommand and Control

ThinkingVanguard or Customer

Service Thinking

Management top down Perspective Management listens to customers – outside in

Functional department Specialists Design Work aligned to

demand, value, flowManagement separated

from the work Decision making Management integral to work

Budgets, targets, standards, service levels,

activityMeasures

Measures capability compared to purpose,

looking for variationManage budget, Manage

people Ethics Acts on the system

2 Seddon, J. (2005). Freedom from Command & Control, Rethinking Management for Lean service: Productivity Press

The Role of Performance Measures

The challenge with many KPIs is that they do not follow the flow of the work, from and to the customer. Management control is not following customer value where costs are associated with flow, not functional activity. Targets or KPIs are important, however they are normally:

» mostly focused on the individual

» not focused on the system.

Managers have performance reviews with individuals, not with systems of work. Most performance measures reinforce command and control with people being encouraged to undertake performance improvement that is not necessarily aligned to the customer’s needs.

But, “what you measure will improve” ... Many service organisations have the “forty KPI” solution for measuring business performance and use individual work plans for their staff. Most measures are poorly focused as they target the individual and not the system of work. These issues are compounded by the high level of variety associated with customer service activity. Note that the customer is part of the production process for the service they require. The challenge is to have a system of work that can cope with the large diversity of customer needs that are typical of service organisations.

The real issue is about management’s ability to manage this issue.


PAGE 37

Many Counter Intuitive Ideas

A dim view of human nature

People’s behaviour is a product of their

system of work

Management needs to work on the systems, not an individual’s

work plans.

Economies of scale Economies of flow

Flow is about customer value, Economies of scale are about

standard work.

Best practice Avoid best practice

Best practice is not looking at your problems and the customer service which is unique to your

business.Change by “tools”

and projectsChanges are

emergentListening to customers as they are constantly telling you their needs and wants. There are

constantly changing emergent customer needs

After going through the journey of understanding this body of work, one of the most revealing statistics is about the level of failure demand in an organisation. Failure demand is the work that is undertaken to fix an issue when a system or process fails. For most VET organisations, around one third of the labour budget is spent on essential, non value adding administration functions. The labour component of many public sector training organisation is around 70 to 80 per cent (and higher) of their cost structure. It is a revelation that a minium of 40 per cent of the administration workload is typically failure demand. This represents a significant opportunity for cost improvement and improved service to our customers.

A second major rethink is about how often there are KPIs for overall system performance that is related to the customer/student/training journey in training organisations. This rethink challenges functional silos in training organisations that are built around compliance and government regulation.

Most of these concepts seem logical enough, however it is more difficult to apply this thinking from a management perspective as it challenges the foundation of management thinking regarding retaining control and thus the command of their organisation.

Many Counterintuitive ideas

This is one of the ongoing issues that the lean movement has across many fields of endeavour. There is a natural human tendency to break things down into bit sized logic chunks so that they are easy to understand and deal with. Lean has the want to turn over this natural intuition regarding the way things work. Below summarises a series of counterintuitive positions that apply to the provision of customer service.

Many Counter Intuitive IdeasCommand and

ControlCustomer Service

Thinking Comments

All demand is work

Value Demand and Failure Demand

Typically varies between 60:40 to 40:60

Transaction with client = cost

So manage the activity

Cost is in the flow So manage the flow

The flow begins with the client. For flow, never pass on poor quality as it results in failure

demand.

Standardisation is good

Design the system against the demand

In Service there is high variety as the consumer is part of the

product development which drive variation.

Control by Budgets / targets

/ rules

Controlled using measures against the

purpose

Get clarity of purpose of the organisation with KPI’s focused

on flow.


PAGE 38

Purpose, measurement, methodCommand and Control thinking Customer Service Thinking

Business Plan

» The “external” think process that sets up the organisation with a view for efficiency

Purpose

» The organisations thinks about purpose in customer terms

Measure

» Management creates measures based on the business plan

Measure

» Management derives measures from its purpose

Purpose

» Achieving the measures becomes the de-facto purpose of all activity

Method

» The method is to liberated to support the customer

Method

» The method or system of work in the organisation becomes the constraint to getting things done. People do work arounds.

Business Plan

» The method or system of work in the organisation becomes the construction frame to establish a business plan.

The final major rethink is about how change occurs in organisations. Many of the current changes are driven around government policy changes, compliance and funding pressures. Customer satisfaction surveys are the tool used to understand the voice of the customer. However, many of our customers never progress to being able to participate in this process as they are so disaffected by our provision of service when trying to engage with a training organisation. Changes based on emergent needs of the customer, as they affect the production of a training service to suit their individual needs, could have profound effects on how training organisations provide customer service.

Purpose, measurement and method

One of the real challenges in moving into action with this type of thinking is where to begin. A good starting point is to think in terms of purpose, measure, method and business planning. Command and Control thinking, as shown below, has a different sequence. The launching pad for a comand and control organisation is the business plan. Vanguard consultants develop unhealthy blood pressures when you start talking about business planning process as a starting point. Primarily they do this because to be successful at transforming an organisation into being truly customer service orientated, there needs to be an emergent learning process grown in the organisation based around dveloping a system of work that supports the customer’s needs. This is not a top down comand and control process.

Ultimately, as customer service thinking develops through being clear about its purpose in term of the customer’s needs, having a measurement system that supports that purpose, and a method of work to liberate support for the customer, then the strategic planning process can be an asset to support and develop the organisation as it goes through a transition process.


PAGE 39

The Vanguard process for ‘Check’

Day one ended at the heart of the lean service thinking developed by John Seddon.

Seddon is about making sure the organisation’s purpose is clear and focused on the customer, then having measures to reinforce this management position, to be able to review the method to achieve the customer’s nominal value.

It is not immediatly apparent why Seddon has a starting point of “check”. What is being refered to by ”check” is the continuous improvement modle developed by Denning of PDCA – Plan, Do, Check, Act. Seddon has a view that for most service organisation, the improvement process should be more aligned to a Check-Plan-Do cycle.

Once the purpose is clear, then measures are important against both the type and frequency of demand. Hence the need to start with a check process with a focus on the customer. So ‘Check’ is about the ability to measure the the performance of the “system of work” from the customer’s perspective.

where to start

For a “rethink of the management for lean service”, the natural place to start is with the customer. In many organsations there is a Plan-Do cycle used to drive activity. This, by its very nature, is separated from the customer and the real purpose of the organisation. A good management challenge is to write down the businesses purpose from the customer’s perspective.

Also, good insights into what your customers really want from your service can be obtained by going and sitting with and talking to the people in your organisation at the front line with the customer.

Questions to be asked in analysing the purpose of the organisation from the customer’s perspective include:

» Was your organisation a “one stop shop” in sorting out the customer’s issues?

» How many times had a customer been back to your organisation to receive the service they were initially after?

» Did your organisation resolve requests from customers instead of passing the enquiry onto someone else to follow up, and do they follow up?

» How many times do we put it back to the customer to do something on their own that we could potentially help with?

Most training organisations have a variety of ways they deal with potential customers. This type of investigation needs to look at the typical ways individuals and organisations interact with your business.


PAGE 40

developed since the completing this initial training based on Neuro Linguistic Programming (NLP) and lean product development techniques. There was further discussion regarding statistical process control tools on service flows that have been mapped using the Seddon customised technique.

Do students get ‘service’ through the online revolution?

An ongoing trend in education is to shift the enrolment process and training delivery to on-line. There was an opportunity to have a debate regarding the merits of the evolution in training from a customer service perspective.

Key question: with an online process, what is the interaction with the customer? The response is normally none. So, in terms of value to the customer, this type of service is biased towards our needs and not the client’s. What is not well understood is how clients crash out of the enrolment process and don’t follow through. There is a range of data on the high dropout rates associated with training that is delivered exclusively online.

What to do? There is a trend across many online endeavours to use “pop-ups” that appear onscreen when a person is not getting through the online process within a certain period of time or they are missing information before proceeding to the next step. The pop-up asks the person if they would like some assistance and, if they do, an operator will give them a call (right now) to walk them through what is required onscreen. This type of support can be very value-adding to individuals struggling with an online process. Types of support could be text support, access to an online chat room, or an operator or trainer in our context directly over the phone.

The Vanguard model for “check”What is the purpose (in customer terms)

Review the demand… both types and frequency (what matters!!

Check this against the purpose

Review the capability of the system to respond to the demand

Need to measure the capability to respond

Review the flow of the work

Value work and waste

Check the system condition

Policy settings

The constrains of the system setup

Review the “thinking” that occurred in the organisation

Types of behaviours

From this factual basis of ‘check’, it is possible to understand the capability of the system to respond to demand. From there, work flow and the system condition can be considered, whilst keeping in mind the fundamental thinking or mental models within the organisation.

Day 2 – Measurement and FlowDay 2 began with a review of day one and discussion regarding the learnings from participants’ discussions with frontline staff and customers about what customer thought about their level of service. Customer service was discussed in the context of increasing online services offered by service providers. The concept of customer nominal value was discussed and this concept has been further


PAGE 41

Review feedback from client discussions » What do we really know about the customers needs and wants??

» Donald Rumsfeld… “the unknown unknowns and the known unknowns”

» When issues are identified….. why doesn’t management fix the problem ??

» Permission to change ??

» Fear of change… being brave??

» Command and control locked and loaded

» Staff are inducted into just poor practice

» Legacy policy development for

» An issue that is now not relevant

» A system constraint that now no longer exists

» A strong personality that is now no longer in that role

» ” I think you have a people problem !!”

» How does management get clean information regarding the client’s needs, wants, what they are expecting?

Reference: Seddon, J. (2005). Freedom from Command & Control; page 116-120

Customer value - online processFor an online enrolment…….

Exercise – when an enrolment is truly online, where is the value from the customers perspective?

Ask some customers…..”check”

» Was the online enrolment process a “one stop shop” ?

» Were some issues “passed on”?

» Were some items “put back to the customer”?

Reviewing client feedback and implications

A consistent message delivered all the way through this course was the need for senior managers to truly listen to the voice of the customer. The best way to do this is to simply go and talk to them and listen, write down there comment verbatim, and reflect on what the customer sees as their nominal value. This is important, as there is normally a lot of assumed knowledge in an organisation regarding what the customer really wants. The leadership team is the most removed from the customer, yet they are charged with the responsibility to design the system of work to support the customer needs. When management is separated from this information, there may be is a loss of clarity of purpose within the organisation as the organisation manages through a command and control paradigm.


PAGE 42

dealing with businesses that are looking for a training “solution” with no clear purpose to the training.

A way to deal with this, based on Seddon’s revelations for these two scenarios, could be as follows:

Individual students

Listed below are a series of steps based on Neuro Linguistic Programing (NLP) when dealing with how individuals approach change.

For students, it is important to establish:

» Purpose - of training, why they wanted training

» Key identities – key individuals that present with the student and the key identities they develop relationships with in the training organisation

» Values and Beliefs – an understanding of why the training is important based on the individual’s values and beliefs

» Capability – has the trainer understood the capability of the student and matched them to a course that they are capable of completing? This includes “how” the training is to occur

» Behaviours – Is there a fit; for us to fit with them and them to fit with us?

» Environmental context – where and when is best for training, does the student have the “access” they need to complete the course?

» Productivity Outcome – productivity from the customer’s perspective represents the customer’s nominal value but it must be tangible and realistic.

(Adapted from Molden D., Hutchinson P. (2012). Brilliant NLP, page 864)

4 Molden D., Hutchinson P. (2012), Brilliant NLP, Pearson Education Limited.

Customer Nominal Value

There is an ongoing challenge to define customer nominal value in service organisations. If a customer is underserviced, costs increase as there will most likely be things missed, which means the client needs another iteration to get their service issue resolved. Worse still is that the ‘missed service’ snowballs into a bigger issue that requires even more effort and cost to resolve. The alternative is that the customer is over-serviced, resulting in increased unwarranted costs as the client is receiving something they just don’t need. Adding to this situation is that, in the education context, the client requesting the service is also part of the development process for the product. They may not know the full scope of the service they required when they make the initial request regarding a training service.

Customer Nominal Value“In service, the customer brings variety and the aim of a service organisation is to understand what matters to the customer (their nominal value)”

The three bears stories

“Customers want it ‘their way” and not providing it in a manner they want it stands to increase costs through waste like failure demand (demand caused by a failure to do something or do something right for a customer )”

Reference 3 John Seddon - http://www.triarchypress.net/understanding-the-variety-of-demand.html

The most common example in the VET sector is the customer who presents to do a course, but really is not clear about what they really want. They can present for a large variety of reasons and thus there needs to be a process to establish the nominal value for that individual student. The same issue is also present when

3 http://www.triarchypress.net/understanding-the-variety-of-demand.html


PAGE 43

» Values and Beliefs – why is the training important?

» Capability – method approaches of how the training is to occur.

» Behaviours – is the business a fit for us and can it be fit for them?

» Environmental context – where and when is best for training?

» Productivity Outcome – customer nominal value (which may not be productivity).

3. Value and price validation

» Mystery shopping the opposition.

» New web marketing traffic review.

4. Value driven educational design

One of the ways to consider customer nominal value in education design is to look at the retail market of some standard everyday products. An easy consumer product to consider is dog food as it is the third most bought item in any Australian supermarket. From lowest cost to highest cost, a dog can be fed: bright stack (no label), plain label generic brands, Chum, Pal, My-Dog, Cesar tray packs, and then there are Schmackos as treats. All these products feed a dog and the dog will remain healthy. To design an education journey for a business, the nominal value fit is somewhere on this scale. Some organisations are driven to training by a compliance issue, or an Enterprise Bargaining Agreement (EBA) requirement. They are just after a base product. For individuals, training may only be something they have to do to continue to receive their government benefit. Other organisations are looking for extreme value from training their workforce, to improve a critical performance issue. As an individual, training may be a key enabler for their growth and actualisation as young adults transitioning into “their” future. Each level listed above has a different layer of drivers when viewed from the customer’s perspective. All the delivery options will satisfy ASQA standards, however there will be totally different outcomes sought by each type of customer. Hence, customer nominal value may well be totally different for individuals doing the same course.

businesses

The relationship with organisations that are engaged with a training organisation is different to individual students. In many ways, lean services to businesses share similarities to lean product development processes. One of the more recent texts in this area is by Katherine Radeka, A field Guide to Lean Product Development (CRC Press 2013)5. In this book, she details the approach that is outlined below. Each of the areas can be adapted to the education landscape context using Seddon principles.

1. Market review

» The key consideration is to look at the pull factors of that industry driving training.

» This includes factual research of that industry training uptake, including an electronic market environment.

» Customer intimacy intelligence in action What is the intimate knowledge that we can see at the gemba (place of action) that represents the need of the customer?

» If we asked our client at the point of service along the value stream, what would they score us out or ten, then what would it take to become a ten out of ten?

» Systematic review of the value propositions of missed clients and current clients.

2. Look, go and see – site visit to the client

» Purpose of training – why they wanted training.

» Key identities – who are key people in the business and the key internal relationships?

5 Radeka K., (2013), The mastery of Innovation: A field Guide to Lean Product Development. CRC Press


PAGE 44

SPC - Statistical Process Control

» Need a data set – at least 20 numbers (box 1)

» Set and average – total/number of pieces of data in the set

» Go through and get the average of the variation away from the date set average

» Multiple average variation by a constant 2.66 (box 2)

» Upper control line (UCL) = box 1 + box 2

» Lower control line (LCL) = box 1 – box 2

Now you have a range where you can be sure that the customer can be sure of the service

The question is…. Is it within the customers expectation of nominal value?

For service organisations, Seddon argued that what needs to be measured is how the system of work responds to this variation. Using base statistic techniques, it is possible to gain a variation of the performance of the system of work. This logic underpins Seddon’s argument that any system review of a service organisation should begin with the “check” step to evaluate system performance on a factual basis.

A further complication is that many service organisations are designed as command-and-control hierarchies where the delivery of a service is specified

Measuring Variation

Seddon recognised that the challenge with service organisations was that the production was not a physical product as with the manufacturing industries. It was difficult to actually “see” the products. Seddon described this issues as follows:

» Nothing is ‘stored’ in the way products can be stored

» Service is not ‘made’ by physical (making things) means

» Service happens at the points of transaction (we used to call these ‘moments of truth’)

» The service agent is part of the service delivery

» The customer is involved in the service delivery

» The customer sets the nominal customer value.

Seddon puts it like this: “Think of any service you encounter. If the organisation understands and responds to what matters to you (your nominal value), you experience good service. Also, the organisation is likely to be delivering it in the most economical way”.

A second issue that comes from this revelation is that service cannot be set within a specified tolerance as with a manufactured item. By its very definition, a tolerance means that there will be a high and a low specification. Add to this the complication of the customer being part of the development of the service nominal value, there is even more variation that needs to be considered.


PAGE 45

what to look atThink about how to get everyone to see the problem the same way

» Where is the customers “work basket” within the organisation?

» Students journey

» Training courses “putting them on the system” journey

» Have a look at the type of errors that occur and their frequency

» How many issues get passed back to the customer?

» Or passed on internally for someone else to sort out?

» Could we have done more for the client.. were we really looking to do this?

» What we are looking for is measuring variation in the system that supplies the service to the customer. Some times in fact what you measure is a couple of systems !!

» The measure needs to drive change to take action on the system

» -Aligned to the customers service and value

» -Use data as the burning platform for change.

within tight boundaries set by the system of work. This could be as simple as the process of a call centre for a training organisation having routines that pass on enquiry traffic to busy trainers due to staffing levels or set KPIs based on enquiry handling times. “When the specifications they work to ignore the ‘nominal value’ of customers, as they most often do, the result is sub optimisation” - Seddon.

what to look at in the VET context

One of the big challenges is that not everyone will see the problem of what to measure in the same way. Many of the frameworks of thinking in the VET sector are based around function silos within departments, rather than how customers or students relate to the organisation. An easy way to begin this review is to have a look at where work piles up in the administration systems associated with the students’ journey or the training course development processes. Having a look at the errors that occur in these processes is a straightforward way to start to look at the system condition.


PAGE 46

systems of work. There is an iterative process to look at the best opportunities for improvement that may well require new measurement steps or processes to truly identify the root of any process variation.

Day 3 - Pulling the learning together to understand the systemThe session was about reviewing homework from Day 2 where participants were asked to measure the performance of a node along a selected customer’s value stream. Each participant’s experiences in completing this task were workshopped by the group, including debate around learnings drawn out of each scenario. The session began with “how did you go with your homework?”. The following are the core learnings from the review of each scenario explained by individual participants.

How do we map the flow? What do we map?

It can get complicated as it easy to get into a lot of detail, which then loses sight of the key foundation thinking embedded in the current situation.

“It’s about how to get people to think differently about the work.” An example is Dick Fosbury. Before Dick came along, the way to clear a high jump was front on… not back first.

So, the mapping process is the corner stone of a change management conversation. It needs to hold enough detail to ensure it is not considered too simplistic, yet cannot be buried in confusing detail.

who should be in a community of practice for implementing the Vanguard approach in an organisation?

“What you need are the key decision makers about the process.” Typically, it is difficult to get the key decision makers to understand how the systems really work, as more often they are “busy” with other “management issues”. Normally

Value demand mapping

This was the last area tackled on Day 2 of the workshop. Seddon has developed a simple way to write down the flow of service to the customer as they flow through the organisation. The steps are as follows:

» Write down the steps of how it works

» Put each of the steps in black box

» Put supporting information in a blue box linked to the black box

» Put a green box around the value adding steps (from the customer’s perspective)

» Put a red box around the non-value adding steps.

Value Demand MappingHow the work works….

» Write down the steps of how the service flow works

» Put each of the steps in a black box

» Put each of the supporting information in a blue box linked to a black box

» Put a green box around the value adding steps (from the customers perspective)

» Put a red box around the non-value adding steps

The challenge here is to not get buried in the infinite detail associated with any process. There needs to be enough detail to get a view of the overall flow from the customer through to the delivery of the service. Once this process map is developed in the most basic way, it becomes more obvious where and how you can record data on the system’s performance. A challenge is that the places in the flow of the work where you can easily record performance may well cover multiple


PAGE 47

what you need to pay attention to is the natural variation of the system

When looking at variation of the data, don’t be distracted by “one offs” in the data.

The natural variation shows the underlying performance of how the system is designed. When looking at potential ways to improve the system, it is important to consider the following two rules:

» Rule 1 – consider extreme highs and lows in the data as “special” events that will most likely have their own explanation

» Rule 2 – when you have eight consecutive points of data that are significantly away from the average, then you can accept that there is a new trend and the system of work has been altered by an intervention of some kind.

When looking at significant changes in system performance, one needs to consider whether the change is due to a tactic that has been put in place to improve the overall system’s performance or if it is part of the natural variation of one or more systems affecting the data. It is important to use scenario thinking with the key owners of the system by considering the system as a set of puzzles to determine how it performs. This can engage new thinking because setting a puzzle can open various solutions, which may lead to developing a true “fix” to improve customer value.

In many organisations, it is typical to take an engineering project planning problem approach, which identifies a problem, then goes about implementing a solution. Another typical approach is when individuals provide a solution which ends up just being a “patch” over the real problems. These problem-solving approaches rarely deliver sustainable improvements that improve value to the customer.

The approach should be about the way you ask the question, so that the problem is properly identified.

the customer is NOT part of the decision-making process that is providing the required service.

Mapping and developing performance data is about getting information, which is focused along the customer’s value stream. This may well be different to the typical KPIs used within the organisation.

Even with the correct data streams obtained from the customer level of service, a specific approach is required to get the best information from the dataset. Management’s focus within a command and control environment often involves looking at many KPIs to ensure the business remains “in control”. When a KPI is outside its target range, the standard approach is to look at the reason for the variation to get the KPI back to where it should be. This approach often drives putting ‘Band-Aids’ on the process in order to exert management control. What is overlooked is that the system of work is often just displaying natural variations, due to the way it works.

A different mindset when reviewing natural variation of a system of work may well deliver a totally different perspective on the KPI data. Brian Cox 6 demonstrated that 16th and 17th Century science exposes more unexpected outcomes than today’s thousands of experiments. The current statistical approach to experimental science often misses detailed scrutiny regarding why experiments fail. You can learn a lot by considering ‘why things fail’ and may well uncover a new way to do something that was totally unexpected and not part of the thrust of the original research.

A lesson for successfully implementing change is that you must be prepared to experiment and look for leanings from all data, both good and bad, as it all gives insight into what to do next.

6 http://www.youtube.com/watch?v=VgllA3717pY&list=PL_c_C4phmwi86nassHQ9YIJDX_5oZ0ZRF


PAGE 48

» Shaping workshops – are a good way of reviewing the system of work. A shaping workshop is a way of bringing people together to gain a common understanding of how the systems work from the point of view of the customer. Organisation structure can be a hindrance to getting the right people involved with the thinking required in a shaping workshop. Equally, doing a structural reorganisation is not the way to develop and improve efficiency from the customer’s perspective. It can be used as one of a series of tactics, along with a rethink of measures that have the effect of changing behaviours within an organisation to support the customer.

Implementing change

Some organisations use a “Fast Team” or “Rapid improvement team” approach to undertaking improvement. These are different to more traditional lean Kaizen lean improvement events in that there is much more focus on the thinking that generated the “system of work” in the first place. With the key individual contacts, a typical approach would be to work though the following steps:

» Firstly, there is a discussion that covers “What do you think is working well?”

» Then there is a “look go see” step to see what is really happening at the gemba or the place of action

» A further discussion would cover “what did you find?”, which are straightforward factual observations

» Then there would be a discussion about the underlying assumptions that were both correct and incorrect

» These assumptions are challenged - “it can’t stay this way”

» Then there is the search for the core “a-ha’ moment for gaining momentum for change

» Thus, the last discussion is “what do we need to do?”, with a focus on customer nominal value.

Making changes

There are three key elements of the change process that are the staging points of “burning platforms of change”:

» Key Individual contacts – who are the key people that need to understand how the real work works? More often, the key decision makers are too far away from the action at the front line with the customer to see how much waste is occurring. They just don’t see. Typically, strategic planning processes do not identify the correct issues, as they are largely based on top down command and control key performance indicators. This is the typical lean accounting problem, (refer - Brian Maskell, Practical Lean Accounting: A Proven System for Measuring and Managing the Lean Enterprise7). Most KPIs are vertical in an organisation, based on departmental siloed targets and not on the customer’s value stream. Thus, the key people who need to be involved in a rethink of the systems and processes that the customers see largely have a set of KPIs that are controllable from vertical silos independent of the customer. Getting the key people who do the work and their managers on board with elements of the change process is a tactical necessity.

» Articulating the vision – it is often difficult to fully articulate the vision as you are essentially painting a new canvas for people who are blind to the problems. It is critical to gain a core belief among key senior managers; that the level of waste and customer stress is unacceptable, based on factual measurement of waste in the customer’s value stream. Based on the needs of the customer, there must be a process to pull together an articulated vision of what to do based on the realities of the work at the gemba (at the place of action where the work actually occurs). This is one of the ongoing dilemmas of change management associated with implementation of lean services, as there is no set recipe and no set internal change timetable. Thus, there needs to be a consistent tactical approach to developing an accepted vision for change in a service organisation.

7 Maskell B. Baggaley B., (2004), Practical Lean Accounting: A Proven System for Measuring and Managing the Lean Enterprise, Productivity Press.


PAGE 49

Day 4 -Intervention and StrategyThis session was the final session and it was focused on the process of making change in an organisation. The journey of making change is a more of a puzzle that the key leadership group needs the curiosity to want to solve. At times, there are “burning platforms of change” that are available, however these sometime reinforce managers to refer back to their ‘command and control’ thinking. A key way to change this is to gain commitment by getting the leadership group to understand the potential of the organisation through the “check” process, which focuses opportunities back on adding value back on the customer’s journey through the organisation.

Initiating change

Initiating change is a difficult journey from many points of view. This issue is an even bigger task if you come forward with counter intuitive ideas associated with lean services and ways to improve an organisation. The challenge is in finding a way to be heard. Knowledge of the type of demand that customers require from your service is a key starting point in being heard. Once the road to understanding is underway, there is a level of commitment to the initiative and, over time, the process will be more sustainable.

A real impediment to this progression is that “management is too busy” to think about it and the initiative ends up on the scrapheap of another failed new management flavour. This can be compounded by a multi-layer management structure, which can dilute the customer’s voice as issues get elevated up multiple management layers.

The key here is to establish initially how well the system of work (a rating out of 10) supports the customer. The key question is “if it is not a ten, then what would it take to get it up to a 10?”

This can be a way of solidifying a shared vision regarding improving customer value. Once this initial shaping activity is completed, the process mapping tools and measurement processes can be used to look for variation and waste at each of the existing steps of the process. From this data, effort can then be applied to redesign the system of work to be focused on the customer and all the variety they bring into the processes.

Things to consider are:

» Look at what steps can be redesigned or combined

» Look at the error rate that is occurring to create failure demand

» Consider the people and personalities that combine to help and/or hinder the service to the customer

» Also, look at “why did the system of work end up like this?” e.g. external and historical change pressures

» Come back to the fundamental question of “why do you do it like this?” and look for the underpinning assumptions.

Some good questions to ask once you have been through this step:

» From the person you are talking to, find out “what their view of the problem” is

» “If we applied ______ to the system, what do think would be the problems?”

» Key to this is to put the power of the conversation back to the individuals intimately involved with the system of work – i.e. don’t play the engineering solutions officer!

» Key question - “If you were looking at the problem with my eyes, what you would see?”


PAGE 50

The Glenday Sieve% Cumulative Sales % Product Range50% 6%95% 50%99% 70%Last 1 % 30%

I am the wrong person to fix this!

Change managers often take on the responsibility for making change in the organisation. It becomes their job to make the changes, wield the axe, set up shaping workshops and announce new structures or ways of doing work. This is fraught with danger as the changes may well succeed in the short term but are ultimately not embodied in the organisation. The challenge is to get the organisation to think and be guided to developing engaging solutions independent of just one strong willed senior manager. The reality is that many managers are busy in the moment dealing with the day to day issues and working on ways to make future events happen or avoid catastrophes.

A typical ‘war story’ that parallels this issue is dealing with disengaged youth. Before change can start there must be an understanding between the main protagonists at a very human level. A key question to ask yourself is, “by what means am I helping the others person see this problem?”. If they cannot see it as clearly as you, you become that outside ‘consultant’ that has that reputation we all know about.

Initiating Change » Think about creating a puzzle

» Change does not come from clever solutions

» How come they don’t see the problem?

» Change does not come if it is just offered

» The role of leadership is to empower to experiment

» Who owns the trues about the customer?

» Focus on the customer, not the silos in the organisation

» Ian Glenday – 6% of the variation is 50% of the volume

» How to listen to customers

Change must come from leadership being engaged in a puzzle of how to provide better customer service. Solutions offered, as insights into what to do, become excuses to say it is not my problem. One of the ironies regarding natural variation is that only 6 per cent of the natural variation is 50 per cent of the volume of the types of service required by the customer8 (see graphic below). Thus, the front-line staff dealing with customers own more of the truth of what the customer requires. Management must begin the journey of listening to their customers to understand.

8 Glenday I. (2006): Breaking Through to Flow: Banish Firefighting and Produce to Customer Demand, Lean Enterprise Academy


PAGE 51

which have been mandated by the organisation to achieve. In this environment, managers revert to their narrow roles, and hold their ‘leadership’ view driven from their position in the organisation.

being an interventionist » Get the person to see it from the others perspective

» Reframe and review against customer purpose

» Space to learn, fail, develop and improve

» The value of “holding your powder dry”

» Understanding = commitment

» Commitment underpins development of new archetypes

» Remember standard times do not cope with the variability of services driven from the customer.

It is a brave manager who allows the space for learning while making changes in an organisation, as this also invites the potential for failure. Yet without this space, organisations stay where they are while their opposition takes over their customers. There is a balance in both allowing the space for an organisation and individuals to learn, and ‘holding your (management) powder dry’ why things are tried across a service supply chain. The key is to allow an understanding of the problem to be developed, as in time this will underpin the commitment for change.

The pivotal role of ‘check’

Seddon’s work in improving the understanding of service begins with the ‘check’ process. It is pivotal that all the key players truly see what service is being provided. The role of the check process is about getting a factual understanding of the current situation that is credible, evidence based and has no bias. For this

There can be key questions about the ‘who, what, when and how’ of the problem. But, there can never be a why. This is because by asking why you are inviting a judgement call regarding the situation that is solution-orientated. If the discussion reverts to solutions, then you are not really listening to the problem and the voice of the customer. To ask the ‘non-why questions, you must start from a base of credibility, have the authority, be looking for factual evidence, lack bias and be able to recognise differences.

I am the wrong person to fix this!!! » Change managers often take responsibility for making changes…

» “I’m too busy to ‘listen to you’... thinking about future events

» By what means are you helping them see the problem??

» Who owns the truth about the problem??

One of the key things to identify is who owns the truth about the customer. In many service supply chains, the “who” has no authority to bring to bear a way of improving the flow of work that can support the customer’s needs. The normal response to improvement is “I don’t know, why we don’t do this”, verses “I can do this for you”. Realising the truth about the problem is the core issue that all service organisations struggle with. The simple reality is that the process owners who should know the truth about the problem are normally separated from the work and use command and control management processes to control outcomes.

being an interventionist

Making change in any organisation it is about being an interventionist, rather than being a change manager. It is about getting agreement because the key people see all perspectives of the problem, not just their own. A critical tool is to reframe and review any problem against the purpose of the service. The biggest issues may well be getting true agreement regarding purpose. Much of the command and control management thinking is about ‘getting the numbers’, the critical KPI’s


PAGE 52

to happen in a real and meaningful way, authority needs to be granted for the process to occur plus being resourced appropriately in terms of time and costs. For those involved with this step, they require the freedom to think differently and a management process that is mindful of the risks and challenges of coming up with something different.

The pivotal role of “check” » By what means are you getting key players to ‘see it’?

» Credibility

» Authority granted

» Evidence

» Lack of bias

» Time defined to “do”

» Recognition of something different

» Risk

» Cost

» Are the current measures fit for purpose ?

» Talk to 50 customers

» Do they say the same thing regardless of purpose?

There is a good chance that the current measures may well not be fit for purpose as they have not been framed from the customers’ perspective. To develop a solid factual base for any alternatives, a good approach is to ask say fifty customers about their service and what they value as good service as a way of clarifying the purpose of the service. The drivers of purpose may well be seen differently from the customer’s perspective compared to the organisation’s perspective.


PAGE 53

Appendix 2 – Framework for customer focused Strategic Planning

Introduction - Strategy and developing key improvement projectsDuring the applied research part of the Fellowship, there were a variety of strategic efforts to improve the overall performance outcomes for GOTAFE. In reviewing these activities, it became evident that the focus of them was to improve the typical key performance measures common across the vocational education system.

This paper presents an alternative, open framework that embeds lean service principles into the operational strategy and the strategy execution to produce significant and important steps towards business improvement focused on customer outcomes.

“A strategic plan that is poorly executed accomplishes little, likewise the best plan in the world without someone to execute it achieves nothing”1

There needs to be a balance between the short-term pressures for immediate results and long term strategies that will improve the vocational training organisations. A typical approach is to ask trainers, managers and the executive team in the organisation to list their top five issues. This is a way to understand the ‘hot button’ issues that are alive and causing problems.

Responding to unmeasured stress points within any organisation that are based

1 Martin R., July-August 2010, The Execution Trap, Harvard Business Review. https://hbr.org/2010/07/the-execution-trap

on individuals or populist perception of current problems can present challenges. One such challenge is that it can skew views on what is required to ‘fix’ the organisation. Most issues identified are either too general or not based on any factual data. It is also difficult to align the ‘fix’ activity with the potential overall system improvement that can improve value to the customer.

When data is available, the alternative ‘Command and Control’ approach typically used is to measures that are inward facing such as trainer viability analyses, course viability or overall employee headcount or income ratios.

In reviewing Seddon’s work on lean services, his starting point is the ‘Check’ step from Deming’s PDCA improvement cycle. This paper is about providing a framework for both strategy and strategy execution that are aligned to the values of the organisation, principally around the organisation’s strategic goals – and putting the customer at the centre.

Current State

Linking improvement processes with strategy – An alternative view of the current state

We need to have a clear and consistent vision for the organisation that is understood by everyone and that is supported by the right systems and processes to achieve a result that leadership is looking for. Typical industry strategies that provide an alternative view of the current state and could better reflect our businesses’ top issues are as follows, in order of priority:


PAGE 54

to establish the relationship between financial operational measures and those measures that are focused on customer outcomes. The problem with any “pick the top five issues” approach is that it popularises issues of emotion within the organisation that are not linked hard measures to support their priority or their alignment to key business strategies. The alternative data approaches typically used are organisationally inwards focused and bare little relationship to the customers purpose when entering vocational education or overall market or community needs.

Strategic effort priorities typical of industry can be adapted to vocational education markets. They are:-

» Improving educational training and assessment delivery efficiency

» Reducing costs

» Adapting to new compliance regulatory environments

» Improving customer satisfaction

» Decreasing defects and failure demand

» Increasing business agility and entrepreneurship

» Increase market share

» Align IT activities with business processes

» Adaption to new business models, mergers or acquisitions.

Success would involve having actions strategies across the organisation in all of these areas. Each of these strategies would have targets and goals project-managed and reported on regularly with forward-facing, hard measures. Strategy becomes the leadership conversation in the organisation, and only this dictates allocation of resources and effort across the organisation. The challenge is that these strategies are at times implemented without the thinking wrapped around servicing the customer purpose.

» Linking process improvement with top level business strategy

» Overcoming too much short term focus

» Sustaining change

» Overcoming resistance

» Ensuring a customer focus throughout the business

» Developing and maintaining executive buy-in

» Deploying new technologies.

This listing presents an alternative framework to consider issues that are symptoms of bigger issues that require a strategic approach in their own right. So, this discussion is really about moving away from habits and practices that are in autopilot and do not necessarily set the organisation up for success. It is about putting disciplines into our organisation to harness market opportunities using appropriate processes, systems and training that put the customer back at the centre of the strategic effort.

Resetting the Strategic approach - “what does success look like?”

Having a clear and articulate strategy is a way to get alignment within an organisation and requires a cascading process throughout the organisation to be successful. It begins with thinking about what it takes to be a vocational education provider in the 21st Century. For us, our question is, “what does success look like?” and the answers may be:

» To have a great and sustainable business

» Delivery training valued by our customers

» Have strong social justice and community engagement.

The traditional approaches used to measure performance of service organisations are based on financial results and overall customer satisfaction data. The task is


PAGE 55

alternative framework to consider strategic effort that is aligned to the customer value using ‘CORE’ acronym to cover the four strategic areas below.

1. Creating standard value for the customer around what we do, who we are, and where we need to have good processes. These are the standard courses offered on an annual basis where demand is known and repeatable and the product is well developed. This type of demand underpins our financial stability.

» Measure - income $ and projected trends of existing standard training offerings.

2. Opportunity business driven from the ability of the organisation to listen to the voice of each customer, where the customer is asking for something extra to the standard courses that we may or may not provide. It’s about understanding the customer’s nominal value. These can be existing courses offered in other parts of the organisation, new part course offerings and/or brand new courses or delivery areas where we have identified an opportunity based on a learner, organisation or industry intelligence.

» Measure - income $, projected growth of the new offering, number of second courses taken up by existing customers.

3. Remedial waste reduction of non-value activity in the organisation. The non-value is from the customer’s perspective, which is typically everything except training and assessment. The organisation has a remedial process to reduce the amount of this waste that aligns to processes that support the customer value stream. This is about improving processes and system of work, and reducing failure demand that occurs across processes that support the learner value stream and the support system value streams.

» Measure - reduction in total cost of the non-delivery activity of the organisation.

» Measure - improving the ratio of value to the customer value verses non value adding activity.

Key - begin with Measures

From a strategic change management perspective, there is a difference between the set of measures that are used to “change manage” the organisation, and measures you need to keep score of overall performance. Choosing overall organisational measures at the strategic level is akin to setting the direction for the strategic effort for the organisation. It invites all levels of the organisation to change the way they apply their effort to improve the way work is designed and managed.

» Our current Board and HESG use reportable measures to “keep score” under defined parameters set out in the Performance Agreement and a range of regulation requirements

» The internal strategic measures we choose are an opportunity to drive change management within the organisation.

The overall strategic effort for a 21st Century vocational education system should be focussed on having the customer at the centre. It would seem logical to have an overall change management measurement set that is aligned to this end. This approach to change management involves choosing measures aligned to the customer and represents a move away from traditional command and control management structures to a focus on improving value to the customer. It is about having measures aligned to the customer’s “core profile of demand” (see further description below) as a framework to consider our overall strategic effort.

Core Profile of demand or CORE strategic effort

The vocational education industry is about engaging new learners, doing high value training, listening to new and existing customers to provide any other training needs, minimising things that are non- value adding to the customer and finding new business. Strategies and measure should align to both lead and lag indicators in each of these areas. Work completed by Steph Parry2 provides an

2 Parry S., Barlow S., Faulkner M.,(2005), Sense and Respond; The journey to Customer Purpose, Palgrave McMillan


PAGE 56

change management effort of vocational education. The strategies which will make a difference to these measures could be based around four CORE strategic effort frames above. Each of these could be a basis for a strategic planning activity.

4. External opportunities driven by changes in government policy or market conditions, where other organisations struggle to adapt to new business conditions. This is then presented to the training organisation as an opportunity. This is a different type of remedial activity caused by someone else’s lack of capability to react to changing market or regulatory conditions. This could involve a focus on optimising new or changing arrangements at both state and federal government level in funding, regulation or policy settings. Alternatively, it could involve looking at longer term market tends to identify new business opportunities.

» Measure - new income per year as a percentage of total income from external opportunities.

Recap

This paper was about establishing an alternative strategic framework for vocational organisations to consider that is aligned to the purpose of the customer.

This is written to provide an alternative approach that can be ‘workshopped’ across an organisation to direct effort and thinking on the customer’s purpose. The inference is that clarity and unity across the organisation regarding the focus on the customer then drives an improvement in effort at all levels. The approach is based on gaining factual data where improvement can be measured across the four core areas listed above. Without factual data, it is difficult to establish a root cause and develop an improvement plan with the correct resources and improvement teams responsible.

The improvement in the four core measures become drivers of all activities and underpin all business strategies regarding improvement.

The place to start is to develop key overarching strategies that will sustain our business, provide valued training to our customers and support the communities in our region. These are the high level strategic performance measures that score


PAGE 57

Appendix 3 – Defining Customer Nominal Value

IntroductionThere is an ongoing challenge to define customer nominal value in service organisations. If a customer is underserviced, costs increase, as there will most likely be things missed, which means the client needs another iteration to get their service issue resolved. Worse still is that the ‘missed service’ snowballs into a bigger issue that requires even more effort and cost to resolve. The alternative is that the customer is over-serviced, resulting in increased unwarranted costs as the client is receiving something they just don’t need. Adding to this situation is that the client requesting the service is also part of the development process for the product. Simply, the customer does not have the full scope of the service developed when they request a service.

The most common example in the VET sector is the customer who presents to do a course, but really is not clear about what they really want. They can present for a large variety of reasons and thus there needs to be a process to establish the nominal value for that individual student. The same issue is also present when dealing with businesses that are looking for a training “solution” with no clear purpose to the training.

Customer Nominal Value“In service, the customer brings variety and the aim of a service organisation is to understand what matters to the customer (their nominal value)”

The three bears stories

“Customers want it ‘their way” and not providing it in a manner they want it stands to increase costs through waste like failure demand (demand caused by a failure to do something or do something right for a customer )”

Reference 3 : Seddon, J – http://www.triarchypress.net/understanding-the-variety-of-demand.html

A way to deal with this, based on Seddon’s revelations for these two scenarios, could be as follows.

Individual students

For individual students, there is a requirement to complete a pre-training review to ensure that the student is right for the course and the course is the correct one for the student. In reviewing Seddon’s work, the key learning is that we are dealing with a person, so steps based on Neuro Linguistic Programing (NLP) may well offer more clarity on how to set up an individual student for success.


PAGE 58

1. Market review

» Key market review question looking at the pull factors of the training sector.

» Market factual research including an electronic market environment.

2. Customer intimacy intelligence in action

» What is the intimate knowledge that we can see at the gemba as the need?

» If we asked our client at the point of training service along the value stream, what would they score us, out or ten, then what would it take to become a ten out of ten?

For students, it is important to establish:

» Purpose - of training, why they wanted training

» Key identities – key individuals that present with the student and the key identities they develop with the training organisation

» Values and Beliefs – an understanding of why the training is important based on the individual’s values and beliefs

» Capability – has the trainer understood the capability of the student and matched them to a course they are capable of completing? This includes “how” the training is to occur.

» Behaviours – Is there a fit - for us to fit with them and them to fit with us?

» Environmental context – where and when is best for training, does the student have the “access” they need to complete the course

» Productivity Outcome – productivity from the customer’s perspective represents the customer’s nominal value but it must be tangible and realistic.

(Adapted from - brilliant NLP Workbook, Molden & Hutchinson1)

businesses

Organisations that are engaged with training have a different dynamic than dealing with an individual student. In many ways there are many similar steps with lean product development processes. One of the more recent texts in this area is by Katherine Radeka2, A Field Guide to Lean Product Development (CRC Press, 2013). In this book she details a range of approaches used by organisations to develop a new product or service. Overlaying Seddon’s view of lean service gives a different view regarding how to approached businesses. The following is a series of steps based on this thinking adapted to the vocational education landscape.

1 Molden D., Hutchinson P. (2012), Brilliant NLP, Pearson Education Limited.2 Radeka K., (2013), The mastery of Innovation: A field Guide to Lean Product Development. CRC Press


PAGE 59

To design an education journey for a business, the nominal value fit somewhere on this scale. Some organisations are driven to training due a compliance issue, or an Enterprise Bargaining Agreement (EBA) requirement. They are just after a base product. For individuals, training may only be seen as something they have to do for them to continue to receive their government benefit. Other organisations are looking for extreme value from training their workforce, to improve a critical performance issue. As an individual, training may be a key enabler for their growth and actualisation as young adults transitioning into “their” future. Each level listed above has a different layer of drivers when viewed from the customer’s perspective. All of the delivery will satisfy ASQA standards, however there will be totally different outcomes required for each type of customer. Hence customer nominal value may well be totally different for individuals doing the same course.

Customer Nominal Value: http://www.triarchypress.net/understanding-the-variety-of-demand.html

» Systematic review of missed clients and current clients requested value proposition.

3. Look Go and see – Site visit to the client

» Purpose of training – why they wanted training.

» Key identities – who are key people in the business and the key internal relationships.

» Values and Beliefs – why is the training important.

» Capability – method approaches of how the training is to occur.

» Behaviours – is the business a fit for us and can it be fit for them.

» Environmental context – where and when is best for training.

» Productivity Outcome – customer nominal value (which may not be productivity or training).

4. Value and price validation

» Mystery shopping the opposition.

» New web marketing traffic review.

5. Value driven educational design

One of the ways to consider customer nominal value in education design is to look at the retail market of some standard everyday products. An easy consumer product to consider is dog food as it is the third most bought item in any Australian supermarket. From lowest cost to highest cost, a dog can be feed on: bright stack (no label), plain label generic brands, Chum, Pal, My-Dog, Cesar tray packs, and then there is Schmackos as treats. These products feed a dog and the dog will remain healthy.


PAGE 60

Appendix 4 – Applied Problem Solving Approach using Lean ThinkingIntroductionThis Fellowship is about developing and implementing lean manufacturing improvement methods within public sector educational organisations. There are many approaches available to undertake improvements but the real challenge is getting started and bringing different minds, approaches, personalities, stakeholders, silo managers to the table. There needs to be a framework, a process, an approach, which is open enough to engage the diversity of views from individuals that have significant potential to contribute, but can at times have views hold back breakthrough thinking. The study of lean administration reinforces the need to have a focussed “check” process to ensure that the problems associated with aligning the purpose to customer value is driven firstly by thinking, then the improvement to systems and engage all the key people who work in the system.

Below is a framework of meetings that bring the first step to get to “Houston we have a problem” point, that is clear and well understood by all the relevant stockholders.

It works through the following steps:

» Brainstorming the situation

» Grouping the uncovered problems

» A check process to check diversity

» Mental Model review

» Project management and implementation.

Each of these steps may well require an iterative approach over several meetings to ensure that all the issues have been teased out and that there is a building of collegiality across the team as they work to become a single voice for improvement.


PAGE 61

Problem solving meeting sequence

Meeting sequence Meeting Agenda and Actions Outcome and what next Reflection Meeting 1 – brainstorm

To be completed in the meeting with all relevant stakeholders to harvest the issues.

what is the problem?

Problems – what do people see as the problems with the current situation? In this case, we are looking at administration arrangements.

Observations - what are the observable facts that that you could “look go see”?

Measures - what measures do we have? If you had ideal measures and what would they be? (SMART!)

If there are no effective measures, then develop some based on the “purpose from the customer’s perspective”. With this new measure go and get a snapshot of data. Just choose a reasonable and typical situation, then measure.

Each of the participants to do a check after the meeting within their respective areas/team on what we come up with so they can have their input.

“Not all of the wisdom is in any one room”

Continue the conversation about the purpose from the customer’s perspective. Staff will have a variety of views which need to be respected but framed back to the true purpose of a service organisation which is to serve the customer.

Further meetings may be required to gain some consensus on measures and observable facts to come into view versus opinions.

Mostly there are open discussions on issues, where many aspects of problems are discussed but there is no way to focus a conclusion and the correct next steps.

Approach – keep searching for the right question to open up the conversation.

Problems – there are many problems that need to be on the table, some relevant some that are not … but they need to be opened.

Observations – there is less of a discussion about observable facts… versus opinions. Working with observable facts pulls out what’s solid.

Measures – gets a view of what we currently measure, more importantly an ideal measure gives direction to potential actions to solve the problem.

A post meeting check with individual work areas gives others not in the group a chance to have an input.


PAGE 62

Meeting sequence Meeting Agenda and Actions Outcome and what next Reflection Meeting 2 – Grouping

What problem are we trying to solve?

# Getting the Right Things Done; Pascal Dennis; LEI, www.lean.org; Chapter 4 – Understanding Our Mess

Developing Project briefs

After the brainstorming step, there will be a wide variety of data and inputs. When looking through this there will be some common threads.

This meeting sequence is about grouping the problems and developing a problem brief for each group.

With each grouping, add the observations and any processes that are relevant

Then add to each grouping any current measure and any ideal measure. Again, think about the customer and their purpose.

Develop a set of problem briefs, the language needs to be succinct.

This process then begins to identify the true “presenting problems” from the “customer’s perspective” supported by information.

It resolves which brief to work on and which belongs with other active projects (e.g. Student experience, trainer experience, overarching digital…etc.)

There may be more than one problem grouping that requires a small team to work on! So, further review meetings may be required to ensure clarity.

The grouping process gives an opportunity to chunk together the key issues and develop the key briefs. It isolates what issues belong to what project, which is important given the number of other projects running within the organisation and which are in the same/similar space.

Adding the observations will identify if they are really looking at the right things…

And the measure begins to tighten up what success looks like.

Ensure that you continue to check the approach and language used against the purpose from the customer’s perspective to highlight any thinking that is based on a siloed department or process


PAGE 63

Meeting sequence Meeting Agenda and Actions Outcome and what next Reflection Meeting 3 – Check #

Have we covered the total variety in the workload given diversity generated by the customer?

# Vanguard Consulting Limited (2001). The Vanguard guide to your organization as a system.

Retrieved from http://blog. newsystemsthinking.com/ wp-content/uploads/The VanguardGuidetoUnderst andingyourOrganizationa saSystem.pdf

Check for diversity and focus

Most vocational education systems have the struggle of high diversity using standard systems.

In this workshop, each of the participants is to prepare a list of the work flows in their area or that they work with.

With each of these work flows, what systems are they interacting with, and what is the percentage of the total volume of work is for each of the workflows?

Then there is a check to confirm that the focus of effort is correct and matches the groupings from Meeting 2.

From this approach, problem briefs of presenting problems cover the required workflows.

The outcome is clear briefs on what requires effort.

» The topic of each brief is confirmed and agreed and aligned to a workflow.

» Observations are reworked and confirmed.

» Also, measures both current and ideal developed.

» There is a map of workflows and their alignment to customer purpose.

If the outcome of Meeting 2 above is well thought through, then this is a quick step.

A check process is to make sure that micro issues are not swaying the efforts to improve the performance of the volume work.

However, given that there is typically no one owner of the overall admin processes, this is required to make sure the brief, observations and measures cover all of the key workflows.

It also respects the diversity of activities to ensure that these issues are not lost as improvement outcomes are developed.

It also will give a view of a single point of focus where there is low hanging fruit to tackle first.


PAGE 64

Meeting sequence Meeting Agenda and Actions Outcome and what next Reflection Meeting 4 – Mental Models Review #

Mental Models are restrictive ways of thinking that can make us blind to a better way forward. Examples of mental models are things like -:

» Centralising administration reduced costs.

» Central expert knowledge of Student management System is required as too complicated for administration staff

» Reducing the number of admin staff will reduce costs

» Conflicting views regarding when “Enrolment” is considered to occur,(e.g. when SMS has recoded the student up to when first payments for training are liable)

# Getting the Right Things Done; Pascal Dennis; LEI, www.lean.org; Chapter 2 – Mental Models

Identifying existing mental models of work, and their potential constraints.

Introduce the concept of mental models and brainstorm current mental models that we all have regarding administration work.

Develop alternative mental models that align with achieving the ideal measures already developed.

This uncovers individual’s view that are historically based as learned facts, but are not supported by observable facts based on the work and problems uncovered by the previous meeting.

The meeting outcome is to identify mental models that are holding the thinking back, then develop alternative mental models which could enable new solutions to the identified presenting problems.

This needs to be documented at this point as some of the mental models we all have are the limit what we consider as to be potential ways to develop a better overall organisation efficiencies.

Then by flipping the mental models, new potential solutions are identified. More “what ifs” are developed, and previous constraints may well be either highlighted for serious project attention, or be washed away as not being relevant.

The challenge is that all participants come with a view, a mental model, of what is going to improve the administrative system.

This is mostly based on previous experience in an individual’s work life and the flavour of line managers they have all worked for.

It is important to get this on the table and discussed to ensure that these issues are not limiters to improvement in the way the work can work.

Developing some alternative mental model may well flip our thinking and give a new approach to improvement.


PAGE 65

Meeting sequence Meeting Agenda and Actions Outcome and what next Reflection Meeting 5 - Project Activity

» Steering Committee established

» Projects teams established

» Target project groups on agreed briefs

» Reporting format agreed

Project implementation and change management

Steps

1. Clarify the problem (Initial brief – ideal situation – current situation – Gap)

2. Divide and process (observations and group areas to tackle respecting history)

3. Presenting problems, goals, road blocks

4. PDCA- Plan, Do, Check, Review

» Plan - Project plan to resolve issues

» Do – project implementation

» Check – check using measures and if issues were resolved

» Review – rework plan and or roll out further

» Continue to repeat as issues arise and use the PDCA cycle to resolve micro issues as they arise.

Focused project activity with steering committee and reporting processes.

Organisations have a variety of project management methods and management control processes.

To achieve outcomes on time and to budget, a diligent project management process is required.

The biggest part of any project is to really work hard at identifying the problem. When the problem is clear and identified, then the project execution becomes possible with good outcomes.

Be aware of scope creep as the project unfolds. This needs to be managed by looking at any new problem from the customer’s point of view and alignment to the purpose of the project. If the early steps have been completed and discussed with the core project control group, it becomes obvious when a good idea that requires an adjustment to the project is valuable and adds to the project or is just a red herring.


PAGE 66

Appendix 5 – Universal System of Work: A Change Management Process

IntroductionTo move away from a command and control paradigm is a big leap for many within the management structure. Seddon refers to Deming’s work on improvement methodologies. “Most people imagine that the present style of management has always existed, and is a fixture. Actually, it is a modern invention, a prison created by the way in which people interact.”

The challenge is to work on the system of work that aligns to the customer needs so that individual’s potential to perform is harnessed against what the customer values. Developing a definition of ‘Systems of Work’ is a way to bring into view the process management, man management and improvement effort required.

Having this framework allows robust discussion to change manage from current state and identify road blocks.

what is an “ideal system of work?”

After reviewing the Vanguard lean service approach and further research from the lean luminaries who work in the service area, the follow definition was developed as a set of guiding principles that could be used to assist a change management process to turn the focus back on the systems of work. With these principles, progression in improvement of the systems of work within a service organisation can be gauged providing a basis for guiding the change management process.

An ideal system of work is: » An ideal system of work is rigid in ensuring consistency to achieve a task,

yet self-learning to ensure it listens to issues and evolves in a controlled way

» It ensures clarity regarding what work is to be completed and provides a transparent way to measure progression

» It hands responsibility to get things done to those who do the work, and is a forum for teamwork to achieve a common goal.

Setting up a system of work for any workflow is a way for the staff who do the work to gain clarity regarding exactly what is required to be completed for that scenario.

The documentation or instructions are in a clear, prescribed format that is purpose-ready for that scenario. There is clarity about who is to do what by when. The sequencing of the required instruction documentation follows the natural way the user would fill out or complete the required task through the normal life cycle of the activity. There are also prescribed approaches to manage opportunity for improvement when normal variation occurs in the processes that are ‘line of sight’ to staff doing the work.

Outcomes are important. There needs to be visible storage of the outcomes in key performance measures of the activity to ensure transparency from both auditing, management and team responsibility perspectives. This needs to be displayed and managed in a way that ensures all staff are aligned to the value to the customer.


PAGE 67

Finally, the system of work needs to respect that variation can occur across the value flow and allow users to identify opportunities for improvement. This is captured by systems of work and provides a documented path for continuous improvement.

Reflection

Every time we invite modification to a standard process to “make it work” for that scenario, we move away from a system of work and invite uncontrolled variations. The challenge is to make any process “purpose ready” so it can be used without variation. This will mean that there may well be more than one variation due to the very nature of a service organisation where the customer is part of the product or service building process. This is the core of challenge for building a system of work for service organisations.

Management and feedback processes

As part of any system of work, there are active feedback processes that look at improvement. In public sector training organisations, there are regular training and feedback meetings for the Quality team, regular meetings for the management team on compliance and a standing agenda item at all executive meetings and Quality of Education Meetings or equivalent to discuss any issues. Any learning from these processes either informs small changes to the forms, policies and procedures, or contributes to a periodic review of the overall system of work. At the grass roots level, learning is captured primarily through things like “issues and ideas registers” to pick up any/all other issues, which then drives changes to the procedures. There is a management structure and control process through a Board of Studies or Quality of Education Committee informed senior management.


PAGE 68

IntroductionOne of the conundrums many public sector training organisations face is the question of how to get better operational efficiency and reduced cost within the student administration processes. For example, there are a range of views on efficiencies associated with having a central admin function versus a decentralised process. Many organisations have a hybrid version where there are administration functions within both operational divisions and with central administration functions to complete the enrolment processing. Within these processes, we have trainers handing off documentation to divisional administration staff to check or complete, before a further hand off to the various administration functions to complete the work. There are also other administrative activities required to be completed by the trainers and others (e.g. marking participation, contract administration) before income begins to flow from either fee for service or HESG funded enrolments.

A further compounding factor is the interaction with the sales and marketing processes to encourage potential learners to engage with a TAFE and the enrolment administration processes. Organisations use a variety of approaches across each delivery area to attract students into our courses. In regional TAFEs, this is more than the dominant web marketing approach. It includes information days, print media advertising, extensive use of networks and personal relationships, trade and rural field days to name a few. The convolution of these marketing efforts coupled with a multi-step administration process, sets a view from a customer’s perspective that TAFEs are hard to deal with. Our engagement is overly complex and requires multiple interactions with a variety of staff to successfully navigate the journey into training with our organisations. A further compounding factor is the assumption that a move to a digital enrolment process will resolve this complexity.

The reality of mandated training regulations (ASQA, HESG and others) plus the variety of types of enrolments challenges this assumption. Also, this gets more complex as we look to extend the reach of existing products into the market place with digital delivery.

Current state

Current business models for most public sector training organisations have four processes for a potential learner to engage with before they are truly on their learning journey with a TAFE. They are:

» Marketing – there are a great variety of approaches across the sector, from hard copy course guides through to websites and Facebook etc., career days … just pressing the flesh.

» Sales – completed in a variety of ways, Business Development staff, course co-ordinators, call centre, trainers etc., mostly at a premium cost

» Student Enrolment – significant documentation complexity to be navigated with multiple interactions required

» Learner engagement - to participate in their first learning event triggering HESG funding after completing enrolment processes.

With all of these above processes, there are multiple documentation and responsibility handoffs, systems and individuals with competing priorities trying to do the work, internal departmental silos, and multiple processing due to the complexity of funding arrangement and student eligibility and issues with failure demand or rework, which affect the transition of the student into an organisation.

Appendix 6 – ‘Administration’ verses ‘Sales and Service’ approach


PAGE 69

This approach aligns with next generation of E-marketing approaches which are about “one to one engagement with clients” versus the current non-iterative website approach of “automated one to many” where potential learners are required to navigate the complexity of the vocational education system to come up with their ideal course.

Customer interaction to define the service required

From a customer’s perspective, interacting with the vocational education system can be daunting. From a lean services perspective, one of the unique things about providing a service (training in this case) is that the client is not totally sure of what they are after, and ultimate their inputs are intimate to developing the correct service or training product. For example, when you go to a car yard, you’re there to buy a car… you just need the details of the make/model sorted. When going online to buy a product, you are normally looking for a specific item. When potential learners present to TAFE, yes some are very clear about what they want to study, but many are really unsure and need to be guided using tools like a pre training review to make sure that the individual is right for the course and the course suits the career aspirations of the individual. The customer interaction is core to defining the service requirements (See Appendix 5).

This a big change, what is the justification?

The justification for implementation of this type of approach is about increasing our focus on the customer’s purpose, with a resulting effect of improving enrolment efficiencies and reducing costs.

» Sales - One could argue that all of the current ‘administration’ system is focused on making enrolments work effectively for our customers. From a customer’s perspective, there are many examples where staff drop the ball due to the multiple handoffs that occur as we engage a learner into the organisation.

What is also clear is that every time there is a handoff, the customer has to deal with another person or process, creating an opportunity for administrative errors, missed calls or following up, ultimately causing failure demand to the detriment of the customer.

When we look at the above as a whole, there are alternative approaches to what we have considered to date as necessary for administration.

Applying Lean Services to Student Administration – an alternative view

One of the competitive positioning measures for publicly funded TAFEs should be how easy it is for a potential learner to engage in their learning journey. The lean services view is to put the customer at the centre of the thinking and align the purpose of the organisation to that end.

Mental Model - What if we moved to having a ‘Sales and Services’ approach to potential learners to replace the current ‘administration’ and call centre functions? The sales and services teams would be responsible for informing learners of course offerings and then providing a service to potential learners to engage and guide them through from first contact with the learning provider to starting their course.

The Sales and Service team would be responsible for the complete student interaction with the organisation, from marketing up to the trigger of HESG participation at the start of their course. This could be just one seamless function. Ideally, the potential learner’s initial contact person would stay with them all the way through from initial enquiry to their first piece if learning with the organisation.

There would be no handoffs to other staff and the potential learners would be individually case managed into their course. They would be then handed over to the trainer to complete the learning, assessment and awards journey.


PAGE 70

» System Maturity – In traditional academic structures, one of key roles of the Academic Registrar is control of issuing qualifications and control of government funding arrangements. Changing funding and academic requirements combined with immature ICT systems means that it has been important for a strong command and control management structure to stay in place to ensure compliance. As a result, there is an unwillingness to rebalance efforts as the system matures in order to provide access to new more distributed ways to develop systems of work based on the customer’s purpose.

Implementation - small steps first

An implementation of this type of approach is not as daunting as it first appears. Many public sector vocational providers have a diverse scope of registration (SOR), but using a Glenday Sieve1 approach – six per cent of the variety within the scope would account for 50 per cent of the volume of students. In this way, a cluster of qualifications can be identified that cover similar customer flavours or groupings. For example, if a learner is interested in getting a trade, then the RTO can have a cluster around all the trades that are on its SOR.

Implementation would initially focus on one of these clusters of qualifications. This may not necessarily be the cluster with the biggest volume of learners. It would be more important to have a cluster where initially there can be a control of all of the sales and service functions as listed above, to establish a proof of concept across all processes, develop position description, build operational management team and consult with external stakeholders, which manage the traditional command and control functions of the organisation. All RTOs will have different understandings of their competitive position compared to market. An initial pilot program to fully develop all the elements would require minimal business investment to gain a view of the potential of this approach.

1 Ian Glenday I. (2005), Moving to Flow; Productivity Press; http://www.repetitiveflexiblesupply.com/pdf/movingToFlow.pdf

» Marketing - An effective digital marketing approach has intimacy with individual clients. Interaction with the client is a core part of defining the service required by the learner. The organisation must include marketing and sales as part of the enrolment process as that is how the client initially interacts with us. How many enrolments are missed because we just lose the engagement with individual learners as they are trying to navigate their way into our organisation?

» Administration Costs - The current arrangements have multiple handoffs wherethere is an opportunity for failure demand or rework. Typical administration systems have a minimum of 40 per cent failure demand where increased number of handoffs occur. This type of waste directly affects our customers. Examples:

» Call centre puts through an enquiry to a trainer who is training or on the road

» Administration paperwork circulating across multiple administration staff to get the work completed. Each time, potential for failure demand or rework increases

» Incorrect leads from a web based enquiry not reflecting the individual client’s needs resulting in lost sales.

» Trainer Cost – In many situations within training divisions, trainers to do a lot of this administrative work to complete a student enrolment. Our highest paid staff (trainers) complete various enrolment documentation and then a central administration function checks this information before putting this data into the student management system. The origins of this approach were due to the increasing complexity and regulation of the enrolment processes and trainers were the only staff who fully understood what was in the qualification. Because of this multi-step process, trainers are doing administration work, admin staff are checking/processing and adding failure demand. Thus, the overall system of work has significant churn with little regard to customer value, and higher overall costs.


PAGE 71

A key feature of a pilot would be trialling a one to one relationship with perspective learners from the initial enquiry up until the first learning interaction with the training. From the customer’s perspective, there is focused effort from one individual from the RTO to understand their nominal value, and guide them through into the correct training offering while satisfying all regulatory and compliance processes. Learners are then handed onto trainers who are focused on the training and assessment process that are the core of the value to the customer.


PAGE 72

Appendix 7 – Lean Change Management tools and Communication

IntroductionThis Fellowship is about using processes based on lean manufacturing concepts in public sector vocational training organisations. The Fellowship included an applied research phase in which a series of ‘Discussion Papers’ were developed for use within GOTAFE as a way to test the thinking and understanding, to assess the points of resistance or acceptance to take up change. The discussion papers were released when relevant issues arose within GOTAFE to present alternative thinking compared to traditional approaches being used. Organisational responses were noted and used to direct research to improve these initial steps for making change. It is noted that typical change management approaches used were based on traditional project management techniques to cover the very first steps associated with change that are based on ‘stakeholder engagement’.

This type of project management approach had significant issues. The experience from the applied research phase of the Fellowship demonstrated that there are significant challenges in accepting ‘new thinking’. There were good discussions about many of the new concepts presented, but these were often based on superficial understanding of the new concepts, representative of the individual’s past experiences, rather than a deep understanding of the facets of proposed new thinking. Thus a traditional project management steps tended to underestimate the effort required in the initial first steps to launch and engage new thinking.

Based on this feedback, consideration was given to how to improve the uptake of new thinking practices based on lean service principles. Much work has been undertaken to develop tools and techniques in change management. The

Fellowship looked three approaches that relate to lean thinking.

1. Training within Industry (TWI)

2. Lean Agile projects

3. Lean Change Management Simulation

The final international experience for this Fellowship at the 2016 European Educators Conference provided an opportunity to explore with key academics, consultants and practitioners their thoughts on the resistance of service organisations to adopt change. Discussion was focussed on the application these three tools for change management in the vocational education context.

1- Training within Industry (TWI): TWI emerged from efforts in the US to train a largely unskilled workforce in manufacturing techniques to support the World War 2 war effort. It was focused on building organisational capability to provide frontline management with basic skills in job instruction training, jobs methods training and jobs relations training. These techniques were subsequently applied to the Japanese manufacturing rebuild process after the end of the war. They were adopted and became part of the language of change to make processes leaner. Below is a brief description of three areas of TWI.


PAGE 73

Job Instruction 4 - Step Method

Step 1 - Prepare the worker - Get the person interested in learning the job

» What information is there on the need to change?

» Which information paths have been used to get interest in the learning about the new way of thinking?

» Have we really answered the question WIFM (what’s in it for me) at all levels?

Step 2 - Present the Operation - Don’t give them more information than they can handle at one time

» How has the new information been “chunked” so that it can be absorbed and interpreted?

» Does the new thinking relate to “line of sight” activities, is it at the right level for each group?

» Is there a plan to build the change information over time to build momentum and understanding for the change?

Step 3 - Try-out Performance - Continue until you know they know

» Has the change being organised in “small, reversible steps”?

» Is there an active coaching process over multiple repartitions of the new approach to achieve a high level of understanding and take up?

» Is there a way to measure progression that supports growth and understanding?

Step 4 -Follow-up Encourage questions -”If the worker hasn’t learned, the instructor hasn’t taught.”

» Is there management understanding that is supportive to learning over multiple repartitions?

» Job Instruction (JI) – prepare the worker, present the operation, try out performance, follow-up.

» Job Methods (JM) – Break down the job, question every detail, develop new method, apply new method.

» Job relations (JR) – let each worker know how they are going, give credit when due, tell people in advance about change that will affect them, make the best of each person’s ability.

The aim of this Fellowship is not to describe TWI methods in detail, but to reflect learnings from these techniques in a vocational education change management context. The key learning is that, to embed new way of working, staff need to understand “what to do”, “how you do it”, and the “reason” for each of the key steps of the change. Importantly, there has to be repartition regarding what to do and how to do a task or action so that it becomes natural way of doing the work. This repartition also needs to build past these initial steps to include the reason or key understanding of each of the steps that are required to embed the change.

When reflecting on many of the current change management initiatives, there is not the logical progression of improving the “what, how and why” of each detailed step of change or improvement. In many situations there are time efficiencies that have sway over the pace of change and engagement. It is an interesting reflection from TWI thinking that it takes at least five interactions with a new approach, method or way of thinking, before there is base capability that can be reflected in change and improvement.

Based on this thinking, the Job Instructions method can serve as a frame to consider change management initiatives. Some key questions are:


PAGE 74

A common challenge is constant change resulting in scope creep as additional requirements to the project are uncovered. Being ‘Agile’ is about having a good state of mind, good structure and good content to accommodate this inevitable problem.

» A good state of mind is about valuing individuals, working on solutions, collaboration with customers and being aware of timeliness.

» Having good structure is about rapid small implementations, learn and reflect on success, and drive next actions

» An good content is about keep our eyes’ on the ‘true north’ of the project to enable the team to grow a way forward, (GROW - Goal, Reality, Options, Way forward)

The key is to be solution focused and constantly clarify what you what to achieve.

During the Fellowship, I had an opportunity to project manage GOTAFE ASQA reaccreditation project using principles of Agile project management. During the project there were multiple opportunities to work on many of the ongoing organisation challenges which would take significant time and resources to resolve. Ultimately the challenge was to set up systems of work to embed the required practice and processes within the organisation to ensure ongoing compliance. From a project perspective, it was about balancing the resources available to work on the jobs that provided the required value to the project.

Reference - Waldock, B (2015); Being Agile in Business; Person Education Limited; 79

» Has time been allowed in the plan for follow-up questions and training?

» Is there an open management posture of self-learning as change occurs?

R.Graupp, R.Wrona; The TWI Handbook-Essential Skills for Supervisors; Productivity Press; 20061

2 – Applying Lean Agile as a change management approachThe concepts of “Agile” began in the software development industry as a way to accelerate problem solving through collaboration between self-organising, cross functional teams. ”It promotes adaptive planning, evolutionary development, early delivery, continuous improvement and encourages rapid and flexible response to change” (Agile Software Development – Wikipedia, 2014).

Again the aim of the Fellowship is look at the potential of lean approaches as it applies to vocational education sector. Change is difficult, and often it is easier to default back to the familiar and well know. In order to reach any goal effectively there has needs to be prepared to:-

» Embrace change. Change is a reality of today, accept that goals change, and we need to be on the front foot to find ways to mitigate problems before they arise.

» build in Learning. To be effective there needs to be time to learn and build the skills, tools and metrics so that it is clear regarding the impacts of change.

» Expect rework. We should not expect that everything works when we try something new. Lean is about taking small reversible steps. So we need to continue to explore efficient and effective ways to achieve goals, and accept that we can learn and change our minds as we go along to achieve better outcomes.

Reference - Waldock, B (2015); Being Agile in Business; Person Education Limited; 17-272

1 Graupp R.,Wrona R. (2006); The TWI Handbook-Essential Skills for Supervisors; Productivity Press2 Waldock, B; (2015); Being Agile in Business; Person Education Limited; 17-27


PAGE 75

(Source: Joakim Hillberg MSc/MBA; University of Stirling, and Principle Consultant Revere; Change Workshop; 2016 European Lean Educators Conference: Buckingham UK)3

» There are many standard ways to communicate change that provide ways to build momentum for change. In reality, the four stages of adoption of a change are not recognised with specific actions identified to move through these steps.

3 Source: Joakim Hillberg (2016); University of Stirling, and Principle Consultant Revere; Change Workshop; 2016 European Lean Educators Conference: Buckingham UK

It is only at the intersection of the three areas of effort when there is minimum viable effort to achieve the project outcomes. Ultimately the agile processes used were about developing simple ways to establish the importance and order of jobs that needed to be done. This approach provided clarity in the changes required to ensure there a business wide engagement behind the reaccreditation efforts.

Overall there is significant merit in using lean agile thinking as part of a suit of change management tools as an effective project management approach.

3 – Learnings from Lean Change Management Simulation There are a variety of change management training simulations available that build an understanding of change management principles. The final international experience at the 2016 European Lean Educators Conference included a workshop from Joakim Hillberg, University of Stirling, and Principle Consultant Revere, based on a business change management scenario. In the workshop, teams had to prepare a simulated organisation for change using a series of approaches to develop the momentum and buy-in across operational and management levels. All of the approaches and responses available were based on academic research and were point scored as a way to measure how teams were progressing with their particular way of actioning change in the simulated organisation.

Key outcomes from the workshop were that:

» Change is not linear. The simulation (supported by academic research) showed that change is slow at the beginning and accelerates at the end. It is very much a typical ‘J’ curve. When management applies standard project management tools to a significant organisation change, there is an expectation that change is linear throughout the progression of the project. When progression appears to be falling behind, conventional project management techniques are applied to bring the project back on track. This can be at the detriment to original project intent and can undermine the ultimate long term success of the project.


PAGE 76

(Reference: Joakim Hillberg MSc/MBA; University of Stirling, and Principle Consultant Revere; Change Workshop; 2016 European Lean Educators Conference: Buckingham UK)

Through the simulation, the workshop presented a range of standard tools and techniques that can be used and applied to a change management initiative to build momentum. Below is a list of approaches that have been adapted from the simulation to apply directly to the challenges of vocational training organisations adopting lean service principles. They serve as a reference resource when considering a change management plan.


PAGE 77

» workshop: Run a series of open workshops of sub segments of the proposed changes including discussion on implementation steps to identify various risks.

» ‘Face to Face’, ‘One to One’ meetings: Organises a series of individual meetings at their location to discuss the changes and persuade individuals to come on board.

» Coffee Break: Spend time at coffee breaks discussing with small groups or individual the proposed changes. Make sure there is written promotional material available or displayed.

» Pilot Test: Work to get commitment for a small pilot test to ensure ’proof of concept’. Make sure it involves the correct people and that there is agreement regarding the data outputs to measure the level of success. Ensure there is a high level of training for all staff involved to a build in momentum for the proposed change.

» Staff Meeting Discussions: Develop and run a series of staff meeting to discuss the proposed changes. If possible, roll these meetings into the regular management control meeting to normalise to the discussions and embed the changes across the organisation.

» Questionnaire: Develop and distribute to all to influencers a questionnaire to gauge the level of interest in the change and the usefulness to addressing issues they have in their area.

» External Speakers: organise external speakers to come into the organisation to present the benefits of the change and tricks, tips and benefits from other organisations.

» Networks: work to understand which staff are used to provide key advice to senior managers. Work with these individuals so that they become advocates for the changes.

Change and communication tools

» Seek Advice: Organise a meeting with any one of the top management team to get some advice on how to approach the presenting problem and develop the change project. This is not so much about receiving advice from participants. The aim is to influence the person by discussing the issues and being ’humble’ with your approach.

» Personal Profile: Build a personality profile on the key influencers by talking informally to your network. The profile includes a qualitative description of key individuals and an indication of how difficult it will be to move that individual through the four change phases (awareness, interested, trying, adopter).

» Task Forces: Discover which managers are on the organisation’s main taskforces. It is important to understand what is front of mind for key staff. The change being planned needs to be ranked in importance from their perspective. Also, ask if the proposed change be part of one of these task forces.

» Internal magazine: Most organisations have an internal newsletter. Articles need to be regularly included covering the advantages of the changes brought on by the new initiative to address the presenting problems.

» Directive: Use of directives sent out by the CEO or top management insisting on the new approach to address the presenting problem.

» Covert Lobbying: Without formal approval to proceed, a suggestion could be the selection of a group of likeminded staff meet with key senior managers to lobby for the implementation of the proposed changes.

» Electronic Mail: Send out a brief electronic mail to key staff explaining the proposed changes and why it makes sense for the organisation.

» Special Executive or Interdepartmental Meeting: Organise a special meeting in the main conference room with key senior manages to go over the proposed changes. Ask the key senior managers to bring along managers from their area. Use the ‘talk and eat principle’ and provide morning tea or lunch to provide an open platform for discussion.

Published by International Specialised Skills Institute, Melbourne | www.issinstitute.org.au

© Copyright ISS Institute September 2017This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.Whilst this report has been accepted by ISS Institute, ISS Institute cannot provide expert peer review of the report, and except as may be required by law no responsibility can be accepted by ISS Institute for the content of the report or any links therein, or omissions, typographical, print or photographic errors, or inaccuracies that may occur after publication or otherwise. ISS Institute do not accept responsibility for the consequences of any action taken or omitted to be taken by any person as a consequence of anything contained in, or omitted from, this report.

ISS InstituteLevel 1, 189 Faraday StreetCarlton VIC 3053

T 03 9347 4583E [email protected] www.issinstitute.org.au

Documents

CUSTOMER CENTRIC RETHINK - ISS Institute - … CENTRIC RETHINK FOR VOCATIONAL EDUCATION TAbLE OF CONTENTS i. Executive Summary 5 1. Fellowship background 8 1.1 Aims of the Fellowship