The presentation was part of the Funding Conference in London on Monday 23 February 2015. The presentation was by Nigel Kippax, NCVO and Dr Mary Davies, NCVO Consultant and lintroduces an approach to understanding and improving core and support processes. Find out more about the Funding Conference from NCVO: https://www.ncvo.org.uk/training-and-events/funding-conference/workshops

1. PM4: Charity effectiveness/
lean charities
Nigel Kippax, Head of Consulting, NCVO
Dr Mary Davies, NCVO consultant

2. Introductions
• Nigel Kippax – Head of Consulting and Training at NCVO
• Mary Davies – NCVO Consultant
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3. NCVO Consulting & Training
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4. Today’s learning: Remember Pareto
are rooted in
20%
of the content
80% of the
benefits
4

5. For today
1. Context
2. Introduction to lean thinking
3. Tools
4. Case study
5. Next steps

6. Challenge
Are there new questions we should be asking?
(Be prepared to adapt the terminology)
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7. A story of growth …
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• God Daughter suffered a brain tumour
• Not satisfied with the research into child tumours
• Well connected, intelligent, passionate
• She had the energy to start a charity
A story of success …

8. Created a robust organisational structure
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Senior Management Team
Fund
Raising
Finance HR FacilitiesOperations

9. Stories she was hearing
• “Why can’t that other department give me what I need to do my job?”
• “Why have we recruited another 3 people when we’re already duplicating work
between fundraising and business development?”
• “I don’t have time to see that beneficiary as I need to write a paper for the next
Board meeting”
• “Why can’t we keep our people? This is the third FD we’ve recruited in 2 years”
• “We knew what needed to be done months ago, so why can’t we make a decision
and get on with it?”
• “I’m spending all my time chasing numbers when what I really want to do is help
our beneficiaries”
What’s going wrong?
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10. What happens if we lose sight of our core purpose?
• Working in silos
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“This isn’t how it was supposed to be”
• Departments and bosses become more important than the beneficiary
• Gaps appear between departments
• Wasted effort, wasted time, wasted resources, wasted talent; wasted £

11. Departments – often necessary to maintain controls
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Departments
Fund
Raising
Finance HR FacilitiesOperations

12. Processes - always necessary to meet beneficiaries’ needs
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Departments
Fund
Raising
Finance HR FacilitiesOperations
Key activity
Key activity
Key activity
Key activity
Supporters
Suppliers
Customers
Beneficiaries

13. Departmental/process differences
How we manage costs

14. 14
Approach Pros Cons
Functional salami slicing
Activity centred
Two approaches to managing costs
• Easy to understand
• Quick to implement
• Fits with current structures
and lines of control
• Silo thinking
• Inward facing
• Will miss opportunities for
improvement
• Risks destroying capability
• Driven from the core
purpose of the organisation
• Outward facing
• Brings departments together
• Identifies improvements that
don’t destroy capability
• Requires cross department
team working
• Often not a single person’s
responsibility
• Requires leaders to think
and act in ‘two dimensions’

15. Lean thinking
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16. 5 key principles
1. Customer: Value is defined through the customers’ or
beneficiaries’ eyes (not through silos)
2. Holistic: Views the whole value stream (not restricted to
departments)
3. Outward in: Timing driven by the needs of the customer or
beneficiary (not artificial internal deadlines)
4. Remove wasteful steps; stops/starts; checking; doing things
twice; things the beneficiary doesn’t value
5. Continuous improvement: Relentless pursuit of excellence
“Getting back to how it was supposed to be!”

17. Resources
Impact
Maximising the ratio
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18. Why think about value ?
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• Lack of an end-to-end process view based on customers’ value requirements
will generally result in:
 Duplication of effort
 Unnecessary actions, reviews or controls
 Activities performed in the wrong sequence
 Over-processing
• Unless you first really understand the value delivered to your customers you
will be unable to:
 Distinguish between value-adding, value-enabling and waste activities
 Identify the most important gaps and delays

19. Which process steps add value ?
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• There are three questions to determine this:
 Would your customer be interested in, care about, or pay for this step?
 Does the step physically change the output, or is it a necessary pre-requisite
to doing so?
 Is the step carried out ‘right first time’?
• You’ll probably find that most steps won’t meet all these tests .... but some steps
may still be very necessary.
Try to remove all those that aren’t!

20. Evaluating the steps in a process
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VALUE ADDING
Steps that could be
considered essential
because they:
• Physically change the
product or service
• Are done in the “right”
sequence or location in the
process
• Provide a genuine,
sustainable competitive
advantage
• Would be seen by the client
as delivering the value they
seek, and they would be
willing to ‘pay for them’
WASTE
Steps that could be
considered non-essential
because they:
• Do not change or add to the
product or service to be
delivered
• Are done out of sequence
and/or are performed to
correct prior actions
• Would not be seen by the
client as delivering value and
so they would be unwilling to
‘pay for them’
VALUE ENABLING
Steps that could be
considered necessary
because they:
• Support organisation
measurement or reporting
requirements
• Reduce risk, defect, cost, etc.?
• Allow subsequent work for the
customer to be performed
more quickly or accurately
• Satisfy legal or regulatory
requirements
• Satisfy ‘good business
practice’ requirements

21. Introducing Tim Woods
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Transport: Moving products & information
Inventory: Storing/stockpiling documentation and information
Motion: Walking to and from places to achieve a task
Waiting: For information, documentation, instructions
Over production: Making more than is immediately required
Over processing: Inputting unnecessary information/data
Defects: Rework, errors, incorrect documentation
Skills: Under- or over-utilising capabilities, delegating with inadequate training

22. Exercise
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• Brainstorm a list of examples of waste in your organisations’ process
In groups:
• Then categorise each example under one of the 8 waste headings
You have 20 minutes
• Each team to make a 5 minute presentation on its findings

23. Discussion of findings & learnings
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24. Lean tools – top down approach to
understanding a process
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Suppliers Inputs Outputs CustomersProcess
S I P O C
Materials,
resources or data
needed to execute
the process
Structured set of
activities to transform
inputs into outputs that
provide value to
customers
Products or
services that
result from the
process
Recipient of
the process
output
Start End
4 - 7 major steps
Provider of
inputs to your
process

25. Lean tools – flow charts & swim lanes
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• They define workflows across functional roles and hep to understand not only
the steps and who is responsible for each one, but also how and where delays
and mistakes are most likely to occur
• Different shaped symbols denote the start & stop, actions and decisions

26. Lean tools – value stream maps (VSM)
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• These maps include information flow, e.g. how the customers or beneficiaries
order the product or service, the frequency and the method
• Time lines also give information about total process times, lead times and cycle
times

27. Lean tools – the 5S’s (or C’s)
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Meaning Alternative
Sort Separate essential from non-essential Cleanout
Simplify A place for everything & everything in its place Configure
Sweep Maintain the new condition Clean & check
Standardise
Improve achievement of maintaining the new
condition
Conformity
Sustain The goal (it’s a habit)
Custom &
practice
• Fundamental to workplace management:
 creates standardised workplace
 enables standardised work to take place
 enables abnormalities to be quickly identified
 enables improvement to take place

28. Case example - charity £80m turnover
Focus on the invoicing process
• Thought to be inefficient with duplication but needed confirmation
• Process mapped and understood
• Critique of each step: is it adding value?
• Quantify observed waste
• Estimate 25% savings possible offering opportunity to redeploy
What could you do with an extra 25% resource?

29. Your next steps
Select a process that is thought to be inefficient and wasteful
• Define: The start and end points of the process
• Discover: Map and understand these processes
• Diagnose: Determine which steps add value/enable value or are waste
• Design:
• Identify ways for the waste to be reduced or eliminated
• Quantify the waste, e.g. how much time is spent, how often, how many
• Consider how the process might operate without these wasteful steps
• Deliver: Implement the changes and quantify the benefits including cost
savings; shorter lead times, quicker or more accurate service for the
customers and beneficiaries
Delivery
Definition
Design Diagnosis
Discovery

30. NCVO Lean Training Courses
www.ncvo.org.uk/training-and-
events/events-listing
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31. Review & summary of workshop
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32. Final thought
Lean is not just a tool box for
improvement, it’s a way of thinking that
is relevant to all organisational levels
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33. 33
Thank you 
Nigel Kippax & Mary Davies