New research insights on replicating instinct and experience
Researchers say that the so-called ‘knowledge workers’ such as lawyers, consultants, software engineers and those in the media sector rely to a significant degree on their insights, instincts, experience and judgement in their decision making at work.
Conventional wisdom says such creative and thoughtful work cannot be reduced to a formula, or set of best practices to manage and duplicate it. But new research challenges this view to cast fresh light on such tacit knowledge and explain how some of the ‘lean’ production principles long deployed in manufacturing can make a valuable contribution to increasing efficiency in these knowledge sectors.
Professor David Upton of Saïd Business School, University of Oxford, and Assistant Professor Bradley R Staats of Kenan-Flagler Business School, University of North Carolina, set out their findings in Lean Knowledge Work in the October 2011 issue of Harvard Business Review. http://hbr.org/2011/10/lean-knowledge-work/ar/1 .
‘Attempts to apply lean principles to knowledge work have proved frustratingly difficult’, says Professor Upton. ‘Unlike manufacturing, the work is not repetitive and easily defined and often relies on knowledge locked inside the individual’s head. But our research shows that such work can benefit from lean production principles in a number of ways. Even in the most creative areas of their work, we have found that creating rules and systems to guide workers can lead to more effective collaboration and to significant benefits for the organisation, such as faster response times, higher quality and creativity, lower costs, and reduced drudgery and frustration for individuals leading to greater job satisfaction.’
Staats and Upton gathered detailed field data from almost 2000 knowledge-intensive software projects, and also studied knowledge workers in a range of other creative settings. Using this empirical data, they were able to sift through the vast array of oft-quoted principles of lean operations, and hone in on those that worked – and delivered genuine performance improvements – using an evidence-based, scientific approach for knowledge-based settings.
The authors summarize six of these principles:
1, Make waste visible and do something about it.
Knowledge workers experience considerable waste in terms of delays, duplication of effort, inadequate communication and inefficient systems. Routine activities such as printing documents, requesting information from others and waiting for people to join meetings unnecessarily eat up the valuable time of creative individuals. The authors encourage firms to continually root out waste and to keep asking ‘why’ – why am I attending this meeting, why am I writing this report, why am I standing at the printer, why do we do it this way. Instead of assuming the system is right, assume it is wrong. Instead of solving the same problems over and over again, create standard solutions wherever possible and train people to apply them, so more time can be devoted to real creative work.
2 Strive to make the tacit knowledge explicit.
While lots of knowledge work relies on judgement or intuition, not all of it does and some can be captured in a protocol with no reduction in the quality of the work. Knowledge firms assume that many tasks cannot be standardised, but the research indicates that a surprisingly high amount can be specified. Once it has been defined in this way, it can be improved, and it can be taught to others. One Japanese bank, for example, found they could specify many of the steps in lending decisions for home mortgages and automated the vast majority of cases, leading to increased growth and reduced risk. Such approaches allow knowledge workers to spend more time on the parts of the job where they create most value, and derive most satisfaction.
‘Organisations can expect scepticism and resistance from skilled workers when efforts are made to capture their expertise in this way’ comments Professor Staats. ‘So it is important that firms explain the benefits to individuals of freeing them for more interesting work, and reassure them of their ongoing value to the organisation.’
Articulating what people do, and how and why they do it, enables the organisation to learn, to exploit best practices and transfer knowledge across the organisation, all of which contribute to its competitive advantage.
3, Specify how workers should communicate.
A key step in building a leaner organisation is to define who should be communicating, how often, and what they should be saying in relation to any given project. Knowledge workers need to appreciate who needs and will use their information so the recipients do not waste time uncovering what they need to know. The research demonstrates how this is particularly important for companies working across cultures, whether with colleagues or external contacts.
4, Solve problems quickly and consistently.
The authors show how a systematic approach to problem solving can bring sizeable benefits. They advocate defining an explicit proposal about how an aspect of work could be improved, conducting an objective test, and if the results are positive, introducing a procedure to standardise that approach. Involving the relevant workers in finding the solution, and dealing with the situation in a timely manner, where, when and with whom the problem occurs is key to a successful outcome.
5, Let the lean system evolve as necessary.
The authors stress that introducing lean techniques is not a quick fix – though there will be obvious and immediate gains – and that long term commitment is necessary to achieve the lasting results. They suggest starting small with distinct pilot projects from which lessons can be captured and applied elsewhere. They acknowledge that in some instances lean approaches will not be helpful, particularly where visionary and radical experimental work is undertaken. But they stress that in most circumstances, even for creative work, lean principles are surprisingly effective.
6, Leaders need to blaze the trail.
Like most change projects, a lean initiative will deliver results only if senior and middle managers are enthusiastic drivers, and motivate and train their teams so that the learning can be applied throughout the organisation. ‘Turning an organisation into a lean system requires a grassroots reinvention of how work is performed.
The transformation demands sustained (though not financially large) investment, a clever approach to training, a change in culture, and new processes. This is not for the faint-hearted: senior leaders must treat it as a long-term.
These significant challenges, however, offer huge rewards, since the new system will be tough for any competitor to replicate from a standing start. ‘This is where the real competitive power lies,’ says Professor Upton.
About David Upton
David Upton is the American Standard Companies Professor of Operations Management at the Saïd Business School, University of Oxford. His primary research areas are Competitive Strategy, Service and Manufacturing Improvement, Information Technology and the Social Impact of Operations. His research is based internationally, with a particular focus on India, China, South America and Europe. http://www.sbs.ox.ac.uk/research/people/Pages/DavidUpton.aspx
About Bradley R Staats
Bradley R. Staats is an assistant professor of operations, technology, and innovation management at the University of North Carolina’s Kenan-Flagler Business School. His research interests cover fragmentation of work, Indian software services, knowledge work, learning, outsourcing, project management, teams, and team familiarity. http://public.kenan-flagler.unc.edu/faculty/staatsb/
About Saïd Business School
Established in 1996 the Saïd Business School is one of Europe’s youngest and most entrepreneurial business schools with a reputation for innovative business education. An integral part of Oxford University, the School embodies the academic rigour and forward thinking that has made Oxford a world leader in education and research. The School has an established reputation for research in a wide range of areas, including finance and accounting, organisational analysis, international management, strategy and operations management. The School is dedicated to developing a new generation of business leaders and entrepreneurs and conducting research not only into the nature of business, but the connections between business and the wider world. In the Financial Times European Business School ranking (Dec 2010) Saïd is ranked 11th. It is ranked number one in the UK (11th worldwide) in the FT’s combined ranking of Executive Education programmes (May 2011) and 27th in the world in the FT ranking of MBA programmes (Jan 2011). The Oxford MSc in Financial Economics is ranked 4th in the world in the 2011 FT ranking of Masters in Finance programmes (June 2011). In the UK university league tables it is ranked first of all UK universities for undergraduate business and management in The Guardian (May 2011) and has ranked first in eight of the last nine years in The Times. For more information, see www.sbs.ox.ac.uk
About Kenan-Flagler Business School
Consistently ranked one of the world’s best business schools, the University of North Carolina at Chapel Hill’s Kenan-Flagler Business School is known for experiential learning in leadership and teamwork, superior teaching, innovative research and a collaborative culture. Its commitment to developing socially responsible, results-driven leaders distinguishes its programs, which educate people at every stage of their careers. Its innovative programs prepare business leaders to manage successfully in the global business environment. UNC Kenan-Flagler offers five MBA programs: full-time residential MBA Program, Evening MBA Program for Executives, Weekend MBA Program for Executives, OneMBA® and the new, online MBA@UNC. It also offers the Master of Accounting, undergraduate BSBA, PhD and non-degree Executive Development programs. Its Frank Hawkins Kenan Institute of Private Enterprise helps business and government tackle problems with impact on society through its operations at UNC and in Bangkok.