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Voluntary organisations urged to ‘think lean’ in response to squeeze on funding.
Working more effectively is a powerful alternative to cuts, argues third sector consultant.
During difficult economic times it is perhaps not surprising that many leaders in the voluntary sector focus their attention on raising funds or cutting services. But Nigel Kippax, Managing Director of KC Change Consultants believes that some CEOs are ‘missing a trick’, by not paying enough attention to making the best use of funds they have already got. He argues that so-called ‘lean approaches’ can help organisations eliminate waste while protecting their capacity and capabilities.
'Working more effectively and efficiently can become a significant source of reward for voluntary organisations, even small ones with limited budgets. By adopting ‘lean approaches’ they can help themselves make every penny count through understanding what really adds value to the services they provide.
Following the review of efficiency in the UK public sector, completed by Sir Peter Gerson in 2005, many Government departments sceptically turned to ‘lean’ techniques to deliver savings. Did they work? In general, yes. For example, one department achieved a budget saving of more than £30m and managed to maintain its services through implementing 14 lean improvement measures.
I am convinced that such techniques can work just as well in the voluntary sector. But how does one go about implementing them?
Lean thinking is rooted in five core principles:
- Specify the value desired by the beneficiary of your services and deliver what they want
- Identify the ‘value stream’ for each service. Map the activities and eliminate those that do not add value
- Make the service flow continuously so waiting and storage is minimised
- Introduce ‘pull’ between steps where continuous flow is impossible so that services are only delivered ‘when & where needed’
- Continually improve: manage towards perfection so that the number of steps and time required continually falls.
Overall, the key message is: “Deliver the service your beneficiary wants/needs as efficiently as possible by reducing all non-value-adding activities”. Surely this is a valid approach for any third sector organisation. When used correctly, lean techniques make waste visible to your people and encourage action to improve.
Waste can come from a variety of sources, all of them contributing to your overall costs. Even in small organisations where our small staff team may make us apparently lean, we still do things which add waste to what we deliver. For example:
- Waiting. Time wasted waiting for information or resources
- Scrap/rework. Effort wasted doing things again because they haven't been done 'right first time'
- Storage and over production. Materials, brochures, leaflets or badges becoming damaged or outdated in storage
- Motion. Wasted transport costs caused by people and materials being in the wrong place when they are needed
- Over processing. Doing more than is necessary to meet the needs of your beneficiaries and other stakeholders
In terms of introducing lean techniques, I would argue that the first step is not simply to introduce them through training courses. Achieving results is dependent upon engaging with your employees and volunteers and providing the opportunity for them to practice their newfound skills. Simply training in a given tool rarely achieves the desired benefits and worse still, can lead to negative feelings if these tools are not implemented in a timely manner. Rather, the task is first to prepare the ground and create a readiness for change. Agree the key objectives of your organisation and cascade these so that everyone understands their direction and what ‘success’ looks like.
Do not become over-reliant upon external support and ensure you develop your own internal team of improvers to drive improvements across your organisation.
In time, good habits will become engrained, meaning improvements in all service delivery areas. In service organisations, it is quite possible to reduce operating costs by up to half while protecting the service you provide to your beneficiaries. And, with funding to the voluntary sector under enormous pressure, that is a goal which is really worth working for.'
Nigel Kappax
Managing Director
KC Change Consultants
Mob: +44 (0) 7768 723 043
www.KCLimited.org.uk
Do you have a story as to how you have made your organisation leaner while delivering more, if so, we would love to hear it. Contact us at mail@reachskills.org.uk