Continually reducing waste making room to grow profitably!

Jayven Rappa's picture

In the professional services industry, there have always been challenges trying to drive improvements with a focus on waste reduction and quality because your services are so unique from client to client.  Unlike in manufacturing where if you’re making a car the final product is always a car so the variations from one to another are paint colors, trim, fabrics, etc.

But wait… is it just an excuse to suggest that the delivery of a service is so much different that we can’t apply world-class process controls?  Ultimately, your offering legal services, financial services, accounting services, or even consulting services isn’t the final product the service and the uniqueness from one client to another just as similar as their preferences of colors, fabrics, and trims?

It’s no surprise that leading service organizations have started to use traditionally manufacturing-oriented management principals like Lean Six Sigma to find ways to counter-balance the margin compression that has been pervasive within the industries.  To that end, you see leading firms looking to establish core standards for the various services. Working to define the decision criteria that is needed to enable front line team to customize the experience from one client to the next.  Not only does it align with the consumer expectations but it also aligns with the best in class organizational approaches you’ll need to control to continually improve bottom line margins.

What are the key things?

There are two key things to identify including the waste in your process and better understanding what “quality,” truly means to you and your client/prospect base.  Both are elements that you must be aware of to properly achieve a culture of continual improvement.  The benefit of this focus on business optimization is, it directly impacts effectiveness and efficiency of the team and the value your client ultimately feels.

The foundational elements of Six Sigma are to reduce defects or waste and improve quality which has driven value to the customer for close to 100 years.  In services, this can be seen from work that could create customer complaints, slow to return calls and emails, not being available when the client calls and activities that create re-work.  Additionally, the focus on Quality, whose enemies are slowness of various processes like bottlenecks due to teams and individuals working in silos, over-production, hunting for basic data, or even over-thinking that may be happening during the service fulfillment process. 

Why does this offer so much potential value?

First, let us think about what the goal is and the subsequent value to the organization when focused on the continual improvement.  In Six Sigma, the goal is to achieve the delivery of a product (value to client) at a defect rate measured by only 3.4 defects per million parts.  Imagine that type of performance in a service environment where your delivery of timely, high-quality experiences to clients is done with only 3.4 defects (meaning a commitment made to the client wasn’t fulfilled) out of 1 million attempts.  Not only would that improve the top line because word would spread quickly about how great it is to be a client of the firm, the reduction of costs to the organization as it relates to dealing with rework, waiting, frustration, negative customer experiences, etc. would be drastically reduced.

How do you get this done?

So, half the battle is being able to see the enemy (waste and slowness) and the other half is having the culture, resources, and tools to wear them down.  But, even though it’s not easy it is especially critical when you think about all the pressures these professional service industries feel.  There are more DIY tools out there now driving the price points of the service down, while at the same time the customer and/or business environments are demanding more, which is driving the costs up.  This margin compression will make it critical for leading firms to act or they will have to pack up or shut down.

The other half of the battle is to remain focused on both the waste reduction AND the slowness/quality.  In many organizations, people are focused on one or the other.  Lots of companies focus only on going FAST, which makes sense because the natural expectation to adversity is to try and jam more opportunities through the pipeline.  

However, there is one critical flaw with that approach, which is, if you are fully focused on going faster but your process is off, you’ll end up with more defects to the customer faster and spending extra time checking, verifying, and assessing processes that aren’t trusted.  This causes more support costs, it reduces (even more) the margin capability of the organization and creates a sense of constant fire drills within the team.  Ultimately, If you trusted them you could reduce the over-production, be more confident that defects weren’t getting to the customer and truly achieve Lean.

So, to be able to see the sources of waste and fix them you need to be able to visualize both.  Go after both the quality improvement and the speed of that improvement can innovate in a way that will drive real value to the clients and to the bottom line of the organization.

At Trutelic, Inc. our mission is to help our clients make certain they're able to sustainably stay focused on delivering value, with the least amount of waste possible.  We achieve this outcome for clients by helping them clearly define the value and then subsequently develop the digital platform that focuses their time on value creating activities with the minimization of DOWNTIME.  Our platform is driven by four key engines, the Trutelic iOP™, Recommended Day™, Trutelic Beacon™ (CMS), and the powerful Athena Business Cloud™.  We offer business solutions within marketing, sales, service all supported by a Lean support, operations and supervisory hub.  We have proven experience and expertise with professional service firms including financial services, accountants, and consulting firms who leverage our hybrid service model to break their organizations "out of the box!”.  Learn more about Lean Digital Transformations on our website