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Success Story: Launching Lean In The Finance & Business Operations Division - GoLeanSixSigma.com

About FBOD (Finance & Business Operations Department)

King County Washington is the 14th most populous county in the United States. King County as an organization has 40+ lines of business, 13,000+ employees and an $8+ billion biennial budget. King County Executive Dow Constantine has framed a policy agenda on three priorities: building equity and opportunity, confronting climate change and to be the best-run government in the United States. To be the best, King County is implementing proven business practices like Lean management to deliver government services more efficiently.

The county’s Finance and Business Operations Division (FBOD) has 180+ employees and a $56+ million biennial budget. FBOD is the county’s central business leader and partner in providing timely, efficient and accurate services for accounting, procurement, treasury operations, payroll and benefits, and small business opportunities.

The news is out: King County’s Finance & Business Operations Division (FBOD) has gone Lean in 2014. Walk around the halls of FBOD today and you will see finance teams using performance boards and visual controls. A3’s are posted and team members share the results with one another asking for feedback. Value stream maps line the walls. Performance and process roundings take pace weekly. Leader standard work cards are flipped daily. Managers are starting to coach instead of command. Huddles happen. Laughter is up and drama is down. Customer value is paramount.

If you only understood about half of those statements then you are probably relatively new to the Lean community; in fact, part of the challenge FBOD faces with Lean is that it is so easy to make fun of all the buzzwords. As other King County agencies explore Lean our team is being asked how did King County’s central finance change so quickly. Of course, the answer is that getting here didn’t happen overnight. It took an initial 2012 launch, some missteps along the way, and a thoughtful reboot in 2013 for FBOD to now have “sudden” success with Lean.

Looking back to 2012 – Why Lean for FBOD?

Frustrated Employees & Customers

At the start of 2012, the county replaced its legacy financial, human resource/payroll, and budget systems with a modern integrated ERP system. By mid-2012 both employees and customers were highly frustrated by remaining pain points from the ERP implementation.

Up until this point in time, like most central finance functions, FBOD had a hierarchical, command-and-control style leadership approach. The historical culture was ill-prepared for the magnitude of the staff and customer stress brought on by the ERP implementation.

FBOD employees were suffering from a curious combination of resistance to change and “change fatigue” at the same time. The legacy finance systems and associated business processes that some had used for more than 30 years were gone. Standard work in some cases still had to be defined through trial and error. Mistakes and rework increased and customers were complaining. During lead up to go-live and after implementation staff turnover rose to 20+% per year and retirements increased dramatically.

At the same time, Division leadership watched the use of Lean as a continuous improvement tool expand both in King County and by the public sector finance community at large. For instance, King County’s Records and Licensing Services (RALS) Division used Lean process improvements from a Kaizen event to reduce the time it takes to process mail-in renewals from three weeks to less than three days.
The Government Finance Review devoted an entire edition to Lean in public sector finance, “Some might wonder why Lean is relevant to the government finance professional. The answer to that question is that Lean provides tools we can use to improve the many transactional services provided in the finance, budget and revenue areas,” wrote Government Finance Officers Association President, Christopher P. Morrill.

Initial Attempt to Implement Lean Six Sigma

In late 2012 FBOD trained a dozen employees in Lean Six Sigma methodology, thinking that these new champions would bring back continuous improvement tools to every section within FBOD. Looking back now, we recognize that the approach, though well intentioned, lacked some basic tenets of change management. For instance, the training was academic in nature and was geared toward passing the Green Belt exam with no practical real-life work projects integrated into the coursework. Much of the Lean Six Sigma material centered on statistical theory and analysis and students came to the training with different levels of preparedness. Participants were not entirely sure how they were selected and felt overwhelmed and were confused about expectations regarding their roles after the course and what they were expected to do with the new tools once the training was completed.

Quickly recognizing the Lean Six Sigma tools training could create even more confusion and anxiety amongst staff, the director’s office paused the approach and sought out a more comprehensive solution that better incorporated change management philosophies.

Staring Over With a Comprehensive Approach to Lean

In early 2013, the FBOD director’s office, consulted with leaders of the RALS Division asking for advice on how to move forward with Lean. The same division that had a huge success from a Kaizen event the year before was now disappointed that the results from the initiative were not growing beyond the initial scope. RALS leaders were researching more sustainable approaches to Lean, and had just selected the Shingo-House model.

The central Shingo concept is that for Lean to sick an organization must intentionally plan initiatives in all four “floors” of the house: customer-focused results, enterprise alignment, continuous improvement and cultural enablers of leadership and respect.

Shingo-House Lean Approach

The Shingo-House Lean approach resonated with the FBOD director’s office, and FBOD began working with Integris Performance Advisors, consultants who focus on facilitating Lean implementations using all four Shingo-House dimensions of a Lean culture.

Preparedness Phase

The FBOD director’s office recognized that the organization had some groundwork to do before rebooting Lean and spent the next nine months, from June 2013 – March 2014, on preparedness phase activities within each dimension of the Shingo House.

Shingo Floor – Cultural Enablers of Leadership & Respect: Preparing Leadership

18-Month Roadmap

First in June 2013 the FBOD management team spent a two-day exercise with Integris consultants putting together an 18-month Lean roadmap. We created a Strength, Weakness, Opportunity, Threat (SWOT) analysis, and then developed and scheduled initiatives in response to the issues identified in that analysis.

Leadership Training

Then, in July 2013 FBOD Managers and Supervisors participated in a two-day workshop, which was based upon the leadership development model, “The Five Practices of Exemplary Leadership.” Preparation for the workshop included a leadership assessment. With the assessment, participants rated themselves on the frequency with which they believe they engage in the behaviors associated with each of the five practices (model the way, inspire a shared vision, challenge the process, enable others to act, encourage the heart). Additionally, a group of observers (direct reports, managers, peers, etc.) also completed the survey. Combined these different perspectives provided insight into what actions can be taken by each FBOD manager and supervisor to improve his or her ability to lead.

DYADS

To keep focus on the five leadership practices after the training was completed, FBOD formed five leadership practice teams and named the teams “dyads” because there were two managers on each team. Supervisors signed up for the dyads not knowing which managers were assigned to which leadership practice and for the first time in FBOD, non-hierarchical, cross-section leadership teams were formed whose sole purpose was to promote initiatives to support their chosen leadership practice. Dyads meet several times a quarter to work on their initiatives and report on their progress at recently established bi-monthly FBOD leadership meetings.

Shingo Floor – Cultural Enablers of Leadership & Respect: Preparing Staff

Division-Wide Fun

To support the leadership practice of encouraging the heart, the FBOD Director’s Office scheduled get-togethers to increase awareness of the Lean initiative and to foster a broader sense of community. Division-wide activities included an aloha potluck, an ice cream social, a Halloween party, a service award ceremony, Seahawks themed “Blue Fridays”, and a Super Bowl “tailgate” lunch. More activities are scheduled for the rest of 2014 and these events are now employee-planned and run.

FBOD is located over three floors in two different buildings. One big benefit from these events is the breaking down of organizational silos – many division employees, some who had worked for the county for dozens of years, had never met face to face before these community-building events.

Gemba Walks

The Director and Deputy Director also began setting aside time on their calendars for weekly visits with different division teams. These walk-throughs were a precursor to the more formal process roundings and focused on either current processes or continuous improvement initiatives already underway.

Shingo Floor – Customer Focused Results Activities

Listening Tour

Recognizing the need to gain an understanding of our Oracle Financials customer’s requirements FBOD and Business Resource Center (BRC) leadership embarked on a “Listening Tour” in the summer of 2013 with agency finance managers. Recurring themes emerged from the interviews including confusion surrounding the project-centric Oracle EBS implementation and dissatisfaction with system reporting. In response to the feedback, FBOD created King County’s first ever year-end close manual and FBOD and the BRC hired an Oracle EBS public-sector expert to conduct an assessment of the ERP implementation.

During the assessment, we carried out in-depth interviews with agency finance personnel, to fully understand remaining pain points. The consultant’s prioritized recommendations then formed the backbone of a multi-year FBOD/BRC work-plan.

Customer Feedback FBOD

also hosts quarterly meetings with its payroll, procurement and finance customers. Managers are working to create structured, recurring customer feedback loops both at these meetings and in the normal course of business. To better understand and implement the art of customer surveys, FBOD has received training and on-going coaching on the subject from King County’s nationally acclaimed Deputy Director of Performance & Strategy.

Shingo Floor – Enterprise Alignment Activities

Clarity Map

From August through October of 2013 FBOD leadership met in three separate workshops to create updated vision, mission, value and goal statements, which is now known as the division’s “clarity map.” Inputs for these sessions included the King County strategic plan and the Department of Executive Services (DES) 10-year plan, which was subsequently summarized in the DES clarity map.

Employee Focus Groups

In November 2013, the Director’s Office hosted voluntary half-day focus group sessions with 30 division front-line employees to gather feedback on the draft clarity map. Running through similar exercises that the managers used to create the initial clarity map, we were pleased to see that staff comments were very closely aligned with the drafted vision, mission, values and goal statements. One additional, important area was highlighted by each of the employee focus groups – the need for improved communications.

Communications

The Director’s Office repackaged a weekly summary that was already being submitted to DES and, after adding a short section on employee news (highlighting new hires, special duty assignments, retirements, etc.), started a division-wide “Weekly Alert” email newsletter for employees. The division also began a quarterly “Spotlight Series” newsletter on continuous improvement initiatives.

Internal and External Lean Coaches

To ensure that FBOD’s continuous improvement journey remained aligned with the Executive’s Lean vision, late in 2013, the Director’s Office began working closely with the County’s internal Continuous Improvement Team (KC CIT) in addition to consultants from Integris Performance Advisors.

Shingo Floor – Continuous Improvement Activities

AP Kaizen

In early 2013, during its initial Lean/Six Sigma-oriented implementation, FBOD scheduled a Kaizen event for the summer of 2013 to reduce invoice payment cycle-time. In August 2013, FBOD partnered with DCHS and Solid Waste in a five-day event to create standard work for “requisition-after” procurement payments with FBOD’s central Accounts Payable (AP) team. While the initiative was very successful in reducing cycle-time for the agencies involved, looking back, we wonder if there were preparatory activities that could have occurred that would have better amplified the resources spent on the event. For instance, in 2014, instead of immediately moving to another Kaizen in this area, FBOD is focusing on first developing requisition criteria and training materials for our agency partners.

Finance Value Stream Mapping

In January 2014, FBOD mapped King County’s finance value streams and discovered we shared the same value streams with all other large public sector central finance functions: budget-to-report, procure-to-pay, hire-to-retire, billing-to-cash and assess-to-collect. Since these value streams are relatively generic to the industry, mapping sessions went quickly.

Mapping participants identified core processes, activities, products, customers, stakeholders and key performance metrics for each of the value streams. A value stream is a set of complete and coordinated work activities – typically involving multiple county agencies – that delivers clearly defined products or outputs to customers. This contrasts with the more traditional organizational chart perspective that defines the roles and responsibilities of discrete agencies.

For example, the value stream titled “Procure-to-Pay” is the coordinated set of work activities across county agencies that results in signed contracts with vendors and the payment of invoices to these vendors upon receipt of goods or services. The central procurement section along with other FBOD sections and multiple county departments are responsible for the delivery of services within this value stream.

Training Phase – Building Lean Problem Solving Muscles

Kick Off

With the groundwork laid, FBOD announced the launch of its training phase with a kick-off employee appreciation breakfast in March 2014. To bring some light-hearted laughter to the event and to poke fun at “Lean management-speak”, we played a gamed called FBOD buzzword bingo or Fuzzingo. As Ken spoke about the division’s 2013 achievements, employees checked their bingo cards for Lean and FBOD buzzwords. The game continued as instructors explained what to expect from the upcoming A3 simulation and Crucial Conversations training sessions. The room was in an uproar, laughing and having fun as employees shouted out, “FUZZINGO!” claiming prizes right in the middle of the speeches.

We noticed a positive tipping point at the breakfast. Nine months earlier FBOD events been lightly attended and participants were relatively quiet with one another at the first division get togethers; now the room was bursting to capacity and attendees were engaged in boisterous, light-hearted chatter. Sure, most employees sat with their everyday colleagues, but some tables were also filling with staff from multiple teams. After the event, the tone was upbeat and very positive – so positive that management was asked to hold a make-up session for those that had missed the first breakfast.

Leader Standard Work

In March 2014, the FBOD managers and supervisors had two-days of Leader Standard Work training. In Lean, standard work represents the best, easiest, and safest way to do a job, reflecting the collective wisdom of the employees who perform the work. Standard work reduces variation in work and deviation from effective practice. The supervisor of the area owns the standard work for the area. A primary responsibility of leaders is to make sure that the work process runs as intended, hence a leaders should see that standard work is developed and adhered to by the workers. However, the concept of “Leader Standard Work” provides that workers are not the only ones who should adhere to standard work. Managers should also follow standard work to ensure the Lean management system runs as intended.

The FBOD director’s office identified six general tasks that are now included in FBOD leader standard work: Tier Boards, Visual Controls, A3 Use, A3 Coaching, Huddle Meetings and Roundings.

A3 Simulation Training

In May and June of 2014 FBOD sent all of its employees through “The Lean Government Simulation,” a highly interactive and fun training to help employees understand how Lean tools can apply to administrative processes. Integris Performance Advisors created the simulation for government application of Lean concepts. The simulation is a simulated government process that needs improvement. Participants worked together in groups to apply Lean tools and concepts to improve the process.

The objective of this training was to help all FBOD employees better understand how Lean tools and concepts apply in a government setting, including:

  1. Introduction to Lean and Process Improvement
  2. Process Management
  3. A3 thinking & the 8 Wastes
  4. Process Performance Boards (Tier Boards)
  5. Process Gemba Walk (Roundings)
  6. Process Mapping – Value Stream Maps, Swimlane Maps
  7. Fishbone Diagram and the 5 Whys
  8. Strategies to optimize flow – work cells, parallel processing, reducing hand-offs, batching
  9. Value Analysis – Value-Add and Non-Value-Add Steps
  10. Workload Balancing & Developing Countermeasures
  11. Standard Work, Adherence to Standard Work
  12. Pulse Point maps and Visual Management Tools

Staff response was positive; employees were pleased that all staff were able to attend Lean training, instead of a select few, and training received high attendee evaluation scores. In private conversations, however, some employees remain skeptical that all FBOD teams will really start using these tools. It is now leadership’s responsibility to ensure that these new skills are nurtured and applied to real-life work situations.

Crucial Conversations

As FBOD is moving to a new, more change-oriented culture, we recognize that for change to work, to stick, and to be meaningful, everyone involved has to feel respected and heard. In May and June 2014 FBOD sent all of its employees through a two-day Crucial Conversations course that teaches skills for creating alignment and agreement by fostering open dialogue around high-stakes, emotional, or risky topics – at all levels of the organization. By learning how to speak and be heard (and encouraging others to do the same), we want our teams to think of the best ideas, make the highest-quality decisions, and then act on those decisions with unity and commitment.

What’s Next?

The FBOD director’s office has a big responsibility in fostering and encouraging the spark that has been ignited as our teams move from Lean novices to Lean masters in the years ahead. Our success will depend on our resolve to follow-through; to retain our employee and customer’s trust by not letting the Lean implementation become a passing fad, but instead become part of our everyday work.

As King County’s finance business process owner, FBOD will partner with agencies to bring efficiencies to and standard work to the county’s finance value streams using Lean tools and techniques. Our goal is more effective and efficient central business service operations, resulting in reduced cycle time and increased flow for our customers; while making FBOD a more enjoyable and rewarding place to work at the same time.

Going forward, we look to Government Finance Officers Association President, Christopher P. Morrill, when he encouraged public sector to become Lean practitioners, “As leaders in our organization, finance officers can model the use of Lean to reduce waste and improve customer service. Be a catalyst to creating a Lean culture through your whole organization.”

Carol Basile

More than 20 years experience in a wide variety of financial leadership roles spanning different industries and market sectors. Effectively communicates hard data points as meaningful concepts to leadership and staff at all levels.