Lean management - The future of financial services?
Vicky Maoko, Lean Architect of Europ Assistance South Africa.
The term ‘Lean management’ has been used a lot in conversations within the financial services sector and while it may become the latest ‘buzz word’ it is vital that managers and business owners alike fully understand what the Lean management system entails.
This is according to Vicky Maoko, Lean Architect of Europ Assistance South Africa, who states that a Lean management system is more concerned about the people than with the tools inside the organisation. “This management style fosters a culture that enables the staff, leaders and customers to engage more effectively with each other.”
“Gone are the days when businesses could define their products and services and expect their customers to simply align to what they have to offer. In this day and age the customer has a voice and they are very aware of this, which is why they don’t hesitate to use it. There is a lot of competition in the financial services sector and customers can easily switch between competitors if their specific needs are not met by a current provider. Lean management is therefore very relevant to the financial services industry due to the ever changing and growing needs of the customers,” says Maoko.
She advises financial service providers that are passionate about their relevance to definitely consider applying Lean management as a way of thinking. “They need to listen to the customer’s voice and keep their minds open to observing new ways of working better to “add value” to the dynamic needs of the clients.”
She believes that the most critical tools that are required for a person to be a successful Lean Thinker are the eyes, ears and mind – people have to observe, listen and think before acting. “These are the necessary skills that one requires before they can worry about learning any other tool that Lean has to offer. Most importantly, in a Lean environment these tools and skills are required from the top leaders since the leaders are expected to role model the behaviours that Lean calls for and to coach others on the same practices.”
She states that the Lean management system focuses on five principles which are:
- Defining value - seeing value through the lens of the customer;
- Managing the value stream - the path that the service and/or product goes through from the point of customer need to delivery;
- Creating flow - eliminating any sort of waste in the business that creates inefficiencies and hampers a smooth flow of value in the entire life cycle of the 'product' (whatever it is that the customer needs);
- Establish pull - create or deliver only what the customer asked for when the customer requires it (the concept of 'just-in-time' and 'gold-plating'); and
- Pursuit for perfection - the idea of 'good' not being 'good enough'.
“The reason why Lean management should be significant for businesses is that this style fosters the empowerment and involvement of the people who provide the ground work, especially those who work in the front line because these people are in direct contact with the customers, more than anyone else in the organisation. I believe that if a business is serious about improving its customer experience, the business has to consider the Lean Management System as a way that will guarantee engagement, both from the customer and the frontline staff,” explains Maoko.
She says that Lean management follows Deming’s Plan-Do-Check-Act model and as a result it calls for thorough planning - generally about 80% of the effort towards this style is spent on developing the strategies and constantly refining and improving on these strategies. “As a result most 'red-energy-profile' professionals criticize this style as it’s seen as a slow process. However, when the planning is done to the right degree, it will be easy to flow smoothly through the rest of the process.”
Because this management style fosters employee engagement, it will also improve employees' morale. She believes that happy employees will in turn have a positive impact on customer service and a good state of mind has a positive impact on idea generation and problem solving processes. “Lean is a customer-centric way of working that puts the customer at the heart of everything that the business does. It prescribes a way of thinking that influences the leaders to change their mind-sets and behaviours; to humble themselves and respect the frontline staff's thinking abilities. As a result, it provides a business with the opportunity to retain customers and attract new ones.”
“I believe that Lean management is the future for any business to survive in today’s economic environment,” concludes Maoko.
