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Summary Keywords
people, HR, flow, lean, Peter, agile, create, stream, bit, organisation, work, journey, journey mapping, recruit, employee, individual, suppose, developed, Harada
Introduction
Welcome to episode 46 of the Enterprise Excellence Podcast. It is such a pleasure to have Dr Peter Hines back on the show with us today. Peter rightfully was our first ever guest on the Podcast. Peter has dedicated his career to researching and writing on how organisations do and can achieve sustainable journeys of excellence. Peter has recently been working on what he calls the People Value Stream. Todays episode is focused on this new area of work and I am looking forward to learning more. Let’s get into the episode. Peter thank you for joining us again today.
Summary
Why have you been focusing on the role of people in lean?
In the early 2000s, Peter realised that much of lean wasn't creating sustainability in companies. And he started looking for some of the reasons why; nearly all of his research came down to people. Technical processes and activities are easy to teach, and replications seem to work pretty well. But actions around people were not something that you can easily teach. He found that the succeeding companies had natural people leaders or leaders who had learned how to do this. Peter began to focus on sustainability - the flows, people, and how to create a sustainable lean process.
So if we're talking people, we're talking a lot about human resources and human resource management?
Peter thinks, unfortunately, and looking at it from the outside, that the whole HRM (Human Resource Management) thing has largely failed. Originally HRM was known as the personnel department. It was mainly clerical, including payroll and industrial relations, and from a lean point of view, necessary, but not value-adding.
And then we got this HR movement, in the 70s, 80s and within that, the model that probably about half of the companies have followed to some degree is Ulrich's three-legged stool model. And that has three elements for each leg of the stool.
Ulrich's three legged stool
One leg of the stool is the back office, so transactions like payroll and expenses and things like that have to be done. Essentially, that was automated or outsourced, often to cheap labour, and often, quite a lot of IT was involved at a high cost. That became quite efficient, but not necessarily very effective. Because usually, if you had a problem, it was almost impossible to solve it.
The second leg of the stool is the strategic role, which is an advisory role. HR was on the board and advising the board from a people perspective. And Peter believes this was problematic and didn't work because of the third leg.
The third leg of the stool is the business partners role, which is working in the business. The problem with this is that HR got sucked away from (Leg 2 Strategy) and, together with cost-cutting, couldn't support the line. What they did is they delegated many actions that HR used to do, from looking after the people and having a chat, to the frontline leaders. The line didn't have the skills to manage people, nor the time. They didn't see it was their job. Why are we paying HR?
So supporting people, coaching and development, having a problem and needing a chat fell between the cracks. The result is that the strategic leg (Leg 2) didn't have credibility. And many HR professionals, unfortunately, don't have a rounding outside of HR. So when they started talking about turnover and return on investment, they were lost. The credibility of HR went down and down and down, which meant that the strategic role became almost nothing.
Peter believes that HRM has failed and that support for people has gone backwards, not forwards, during the last 20 or 30 years.
An example: reducing waste in HR processes.
Peter worked with HR about 12 years ago in Cardiff University, where he was doing Lean inside the university. He worked with the HR department, trying to improve some of their processes. They were looking at staff recruitment, e.g. recruiting a research assistant. And they found that this typically took three to six months, with a considerable amount of time and resources and was very inefficient.
When they mapped it out, they found massive delays, and the root cause wasn't actually HR at all. The root cause was the people wanting the recruit, who had low credibility of HR, they didn't give them the correct information. So HR was very inefficient and kept coming back because they did not have the right specs for the applicant. The person wanting to recruit got more and more frustrated with HR. But the irony was it was actually themselves who were causing the problem.
The solution to this was this straightforward - a one-page online document that the recruiting person had to fill in. And if they didn't put in the details correctly and pressed go, it didn't send. So basically, they were forced to enter the data completely. The recruitment time was reduced down below two months simply by doing this very simple IT fix. It got rid of the primary root cause, which was partly due to the poor credibility of HR in the first place.
The development of Lean towards more of a people focus.
We all remember the early days of Lean, through the 80s and 90s, coming out of TQM and JT. It was very much about tools and techniques and Kanban and 5S.
It's probably only been the last five years that people have started to see Lean much more as a culture change. And hence, we've seen many books and publications thinking about this cultural change journey.
Unfortunately, many Lean folks still don't understand much about the people side of the culture side, which is, of course, where some of the skills are sitting in the HR community. Unfortunately, the people in the HR community don't understand in general a lot about Lean. What results? Mismatch of ideas and language. The two groups can't speak to each other.
In even the best organisations or Shingo winning sites, Peter has found that you go and look at the HR department and see they've done great Lean work. He asks them, "Well, what have you done differently than other teams like back office, finance or purchasing?" And the answer is nothing. The method is the same. And then Peter asks the question, "What's your contribution?" And they say, "Well, we've done this and this and that". Peter says, "No, as an HR person, what's your contribution to this Lean work?" and they look at him completely blank. The penny hasn't dropped. Peter believes that there's a significant contribution to some of these skills, competency, and knowledge. And, it just hasn't jelled. Lean and HR are disconnected.
Why did you bring agile into your people value stream work?
A lot of the Lean community is still struggling with putting people at the centre of work. He found that the new generation (X and Z and Millenials) have different expectations of work. They expect a blend of instant gratification and fun within their working environment. Lean has been slow to adapt to this.
The Agile community has been quicker to think about the needs of the people and move from customer experience, which is quite similar to the thinking of people value stream. Peter believes that what the Agile community hasn't got is knowing how to manage a value stream. But they've reached a better starting point in terms of the needs of the people.
If you're creating parallel teams instead of a more hierarchical traditional organisation, there's a heavier reliance on people and groups and self-autonomy and team autonomy. So, hence, the needs of people, for example, psychological safety, are much higher in the Agile world than in the Lean world. So they realised it sooner, and there's a greater need for it in the Agile world. The Agile community in Scandinavia has been quite strong in this sort of people area.
Why didn't Lean pick up on the need to look after people?
It'd be wrong to say it's not there. Agile is based on scrums and Kanban, and there is much less focus on the hierarchy and management lead approach. Whereas Lean came earlier, and it borrowed that management lead type of approach. Although a lot is talked about bottom-up, the focus is less on the team and more on the individual. It's more about individuals contributing ideas and probably less emphasis on teams than in Agile. Peter doesn't think this is wrong, but it's not sufficient. He thinks we need both individuals and teams in a successful organisation.
People value stream
Peter will explain the people value stream as a classic value stream map. So we'll start with the current state and then the future or the ideal state.
The current state
Let's suppose the customer for people in the organisation is the team leader. And then the printer production control, in a value stream map, is HR. Traditionally HR is a series of functions or sub-functions, certainly in larger organisations. So recruiting people differ from induction HR, and learning and development, and reward recognition.
The functional problem presents at the level of these HR sub-functions. The physical flow is the individual, the recruit. So, the recruit comes in, and they start with induction, which is around values and culture and how it works here. The recruit thinks this isn't what I experienced during the employment process. It doesn't make sense. And then they reach learning and development and are taught all sorts of things, which they end up not using. And then they get, or maybe they don't get the review at the right time.
The HR sub-functions in the current state are optimised, which is like the push-base in a value stream map. The recruit feels like they're being pulled from pillar to post. Their line manager is not looking after them, and neither is HR. The sub-functions are disconnected. The result of this is that people are less engaged. They're not in the psychological flow, and they're contributing less; there's less value-add. And by implication, they're more likely to leave more quickly. So the result is the individual doesn't get what they want out of it. And the company doesn't get what they want out of it. That's the simple current view, slightly exaggerated admittedly by Peter.
We've all seen or experienced this employee journey. In many cases, the new employee goes through a non-customer-focused production flow. The amount of information pushed into them is abnormal, and it can be soul-destroying for that new employee who is the customer or the main flow of product for this value stream. How often has a new staff member not even had a desk prepared, or phone or computer?
What does that say to the individual coming in? What are they going to feel? They're going to feel that they made a mistake.
In the traditional value stream, vertical areas are maximised, whereas we should maximise the (horizontal) flow. In this case, the flow is the individual recruit. So, if the customer is the individual's line manager, or the team leader or the team themselves, what do they want? They want competencies, the right behaviours, high levels of engagement, the right number of people, and they want people to have good wellness.
Future state
If we now think about the role of HR, HR is much more an enabler for this. So quite rightly, managing, supporting and developing the people should fit with the team and the team leader. HR should be making sure the organisation understands ideal behaviours and deploying them clearly. They should understand the competencies that are needed. Unfortunately, far too much focus is on the day job competency. The focus should be equally on improvement competency and the culture change competencies. HR should be providing performance guidelines in terms of performance management, reward, promotion, and succession plans.
Peter believes in HR providing that critical role, but he is not condoning the annual appraisal. How many of the listeners here dread the annual appraisal? And how many people do 90% of what they're supposed to do in the week before the appraisal? Or in a few days afterwards? And then the rest just gets put in the drawer? It's fundamentally a broken system.
As a result, performance management needs to be much more about coaching and development. So the coaching and development need to be led. HR needs to do a much better job transferring the skills, knowledge, competence and the need for these to the individual.
And, then we can think about the flows. So the flow of the individual is the learning and development.
How do we increase the level of knowledge and competency, and confidence?
How do we improve our personal development?
How do we improve their listening, their accountability, their recognition of themselves and others?
How do we improve their ability to coach and provide social support and receive social support?
How do we improve their ability to create community inclusion for diversity or to include disadvantaged people?
And how do we work with them to improve their mental and physical well being?
These are the sort of flows that we should work on, and it is about creating highly engaged people that will achieve, Peter thinks, maybe twice as much in terms of productivity or successful output and will feel a lot better.
Think of the Maslow hierarchy and take away those basic needs at the bottom. We need to create a safe environment, not just in terms of wild animals but also in psychological safety and mental and physical safety. We can then work with people to achieve their own goals, purpose, and career, which is the best self-actualisation. So, if we can get rid of the bottom levels in Maslow's hierarchy, we can work on the higher level, and then we can get people in the flow. Imagine the vast breakthrough! Peter thinks the benefits of this can be as significant or more extensive than Lean or Agile in the first place.
Several human resource management departments have started to shift their name to people and culture departments in Australia and have realised the gap. And they genuinely want to become that business partner to help an organisation move forward and grow. Mapping employees journey on their current state. Looking for constraints and experiential challenges and ways to enhance flow together and then implementing that in a pull-based system.
There's going to be an interlocking matrix of the two sets of goals, those of the organisation pulled by the team's needs and the individual's goals. So HR will no longer determine the goals. Instead, the individual drives their development journey. What do I want to get out of my career? Where am I on my career journey? What do I want to achieve? How am I going to get there?
Not everyone can be the boss in the company. So think about working with people on their aspirations more realistically. A lot of what people want in their ambitions is a feeling of purpose or meaning and creating intrinsic motivation. In contrast, traditional management has worked with extrinsic motivation, like bonuses. If this works well, it's usually only for a short time. Creating engagement is about the environment which fosters intrinsic motivation.
There's a tiny number of organisations that have started to think in this way. Peter did a LinkedIn search. He found one organisation in the world that uses the term 'people value stream', Lloyds Bank, one of the big UK banks. And it's within an agile program.
Wow, Peter. That's great to hear. Hopefully, more organisations will begin to think this way about their employees.
Research and model design
Peter is working closely with his colleague Cheryl Jekiel, Founder of the Lean Leadership Center. We had Cheryl on the podcast back in Episode 5, where she spoke about redesigning HR processes to achieve infinite organisational value. Together, Peter and Cheryl are designing a model to be both Lean and HR friendly with more HR than Lean language.
Then they will lift the lid off and do the deep dive into the different elements. They need to explore all of the various flows that Peter spoke about earlier. They also need to explore the relevant areas of HR and, importantly, how to create pull-based learning.
The mental and physical well-being flow
The first flow that Peter is working on is the mental and physical well-being flow. He is doing a great deal of work on this particular flow, which is particularly apt in the current COVID age. He thinks it is years, not months, unfortunately, where mental health has and will be highlighted as a major issue for many people, particularly younger people.
He is looking at ways to create that support for mental and physical well being. He has found that you can't split those. That mental issues can lead to physical problems and vice versa; that physical issues can lead to mental problems. Peter is finding that mental and physical well-being is linked and wants to understand that flow deeply.
The research that Peter is conducting is taking him into all sorts of weird and wonderful places. He is examining literature coming out of fields such as the medical profession, ergonomics and psychology. These readings are, in many cases, well established. But they are unheard of, certainly in the Lean world and generally in the management world. Why? Because they are seen as a small subset in an unimportant thing like occupational health and safety (OH&S). OH&S, unfortunately, is often seen as a compliance matter; as long as we do the minimum, you'll be fine.
HR can unlock this potential and create a mental and physical health flow. If you don't build the proper support in this area, you won't be taking off those bottom levels of Maslow's hierarchy. Maybe hygiene in the workplace is low, and fostering sickness in workspaces. Or perhaps individuals are arriving at work and feeling stressed and cannot give their best even if they want to. If they're stressed, they might have an accident. So how can organisations find a way to reduce stress?
Peter has spoken to us in Episodes 1 and 2 (Link to #1, Link to #2)about the foundation of quality, process and safety from an operational excellence point of view.
Without a foundation of quality and safety, you're building improvement on quicksand. It sounds like Peter is finding the same from a people's value stream point of view. Mental and physical safety is a foundational element.
Over time, Peter and Cheryl will look at the other flows and the other areas. But he foresees this will not finalise in a matter of months. They will need a lot of time to develop this work.
Two Minute Tip
It's the same idea that many years ago, Lean developed, which was to pin an order on your back and walk yourself through the ordering system. In the people value stream, it would be to pin a career on your back and walk your way through the system. For instance, pretend you're a new recruit. Walk the stream of being employed and arriving for the first day. See how easy it is and how you are welcomed and see whether the systems are actually in place. Peter supposes this could be taking a moment of truth. So when you come in the door, this happens, and that happens, but does it just work? Or does it not work? So think about the flow. Think about the new employee or graduate coming in. What are they going to face? That will help you to think about the employee journeys.
A recent insight
Peter has always known the people bit was significant. But the more he gets into it, the more important that he actually finds it to be, which is interesting. He has learned a lot by looking at some of the different literature.
But recently, one of his revelations was finding a link with agile. He has applied the agile mindset to some of his design thinking. He has found some great things offered by that community and also some of the gaps. He looks at it and thinks, why have you done this? Or, there are some obvious things they ought to be working on here.
The exciting thing is working at the edges of discipline or an area and combining it with others—Lean and Agile, Lean and HR. And quite separate to this is some work on the other side, looking at Lean with the digitisation industry 4.0.
Key Takeaways
1. The power of focusing on the people value stream, the employee journey.
2. The foundation of mental and physical wellness.
Employees are critical to an organisations success. We focus so heavily on improving the value stream for the products and services we make but often the journey for the employees making them is broken, lacks flow, delivers low value. Peters approach with the people value stream gets an organisation cross functionally working together to make this important journey visible, identify challenges, breaks in flow and potential experience improvement areas. Enhance your employees journey and they will enhance your customers.
The second keytake away for me is the foundation physical and mental wellness plays for an employees journey which is so similar to the importance of quality and safety for an operational excellence journey. By improving the systems and culture to create a foundation of physical and mental safety a platform is created to build and improve the rest of an employees journey.
Quotes
01:35min In the early 2000s, I realised that a lot of Lean wasn't really creating sustainability in companies. And I started looking at what some of the reasons for that were. At the end of the day, it was really all people related things. So tech, technically related things that we can easily teach and replicate, seem to work pretty well. But things around the people were not something that you can easily teach. And hence the companies that were succeeding were people who had natural leaders, or leaders that had learned how to do this.
11.10min And then I ask the question, What's your contribution? And they say, Well, we've done this and this and that. No, as an HR person, what's your contribution to this Lean? And they sort of look at you completely blank, and, and hence, the penny hasn't dropped. That there's a major contribution in terms of some of these skills and competency and knowledge. And, you know, it just hasn't jelled.
12:06min So one is thinking about people coming new into the organisation. And, you know, the sort of Generation X and Zed and you know, millennials, is their expectations from a job are quite different from perhaps people in their sort of 40s or 50s, or whatever. They're expecting much more sort of instant gratification. They're expecting a much more fun environment, they're expecting a sort of blend of work and social.
22:31min We can then think about the flows. So the flow of the individual is the learning and development. How do we increase the level of knowledge and competency and confidence? That the personal behavior? How do we improve our personal development? How do we improve their listening, their accountability, their recognition of themselves and others? How do we improve their ability to coach and provide social support and receive social support? How do we improve their ability to create community inclusion for maybe diversity or disadvantaged people, etc? And how do we work with them to improve the mental and physical well being. So those are the sort of flows that I think we need to work on. And all of that is about creating these highly engaged people that will achieve, I think, maybe twice as much in terms of productivity or successful output will feel a lot better.
Links
Brad
Brad is proud to support many Australian businesses. You can find him on LinkedIn here. If you’d like to speak to him about how he can help your business, call him on 0402 448 445, or email bjeavons@iqi.com.au. Our website is www.bradjeavons.com
Peter Hines:
Peter Hines LinkedIn: linkedin.com/in/peter-hines-16669bb1
People Value Stream Website: www.peoplevaluestream.com
is a non-profit venture that Cheryl and Peter have created to encourage more research in this area. It's also about disseminating and learning in this area by creating an online portal to help translate some of this learning. Within that, one of the things we've done is create a virtual network. So people from different countries come together once a month to share knowledge and ideas. And in the future, we will be developing a few courses that people can come on to there.
Peter, thank you again for everything you're doing to help us create a better future, especially for employees and people. We all spend so much time at work. So this people value stream is so timely and seems impressive. Very best of luck with your future research Peter. Bye for now.
What Next?
Listen to the podcast: Episode 46
Listen to previous episodes with Peter Hines (Link to #1, Link to #2)
Listen to Cheryl Jekeil in Episode 5, where she spoke about redesigning HR processes to achieve infinite organisational value.
Written by Emily Jeavons