Designing organisations that work for Lean and Agile thinking people. European Lean Conference 2016

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Designing organisations that work for Lean and Agile
thinking people. What type of work climate do you create?
Stephen Parry
Author of Sense and Respond
Owner and Senior Partner at Lloyd Parry
Twitter @Leanvoices
www.lloydparry.com
Stephen.Parry@LloydParry.com

Transforming Perspectives Transforming Learning
Transforming Decision MakingTransforming Behaviour
Engaging and
Understanding
Learning and
Sharing
Leading and
Choosing
Improving and
Changing
Work
Climate
Visualise the work
Measure the work
Perfecting the work
Develop the Work-force

Respectful
Collaboration
Performance
Management
And Measurement
Innovating ideas
for customers
Sharing Intelligence
with the team
Gathering customer
intelligence data
Freedom and
decision making
Employee influence
on products and services
Leadership
Courage
Challenging
How well we
respond to customers
Across the function
with top/senior
management
Employee influence
on other functions
Employee influence
on managing practices
Employee influence
on end-to-end processes
Organisational
Understanding
Trustworthiness Custom
Purpose

The Work Climate is the combined
perception of customers, employees,
managers and leaders. It predicts the
performance and long term
profitability of an organisation.
We use a Climate diagnostic called
Climetrics® which also measures how
well the organisation as a whole,
identifies, understands and delivers
against customer needs and how it
adapts and locks on to changing
customer needs.
The diagnostic informs indicates what
actions we need to take to create a
superior work climate.

Also predicts the implications for a business that doesn’t change
Diagnosis
Operating strategies.
Operating structures.
Managing practices.
Perceptions, feelings and behaviour of
customers, staff, managers and leaders.
End-to-end service performance.
Quality.
Innovation and change ability.
Customer centricity.
Leadership.
Prognosis: Service Performance
Predictability
Long-term profitability.
Work outcomes.
Employee performance.
Job satisfaction.
Customer perceptions of service quality.
Quality improvements.
Commitment.
Absenteeism and turnover.
Organisational adaptability.
Work-Climate: Thinking Feelings and Behaviour
of Employees, Managers and Leaders

On-Line Data Collection
Data Cleansing
Validity testing (Factor Analysis)
Correlation Matrix Analysis
Regression Analysis
Confirmatory Factor Analysis
Structural Equation Modelling
Climetrics® Landscape categorisation
Statistical data - Interpretation
Triangulation with on-site workshops
Executive Summary
Climetrics® Analysis MethodologyClimetrics ® Statistical Analysis Process
Weak Standard Excellent
Autonomy
Customer facing
activity
Intelligence
gathering
Sharing team
intelligence
Excellent Standard Weak
Industrial Work-Climate
Engaging
Organisational
Understanding
Sharing intelligence
within the function
with other functions
with senior managers
Learning
Adaptive Work-Climate

Work
Climate
And
Performance
CLIMETRICS®
™

Does the job design allow all staff to
engage with customers and users?
Is everything forbidden unless
permitted,
or
Is everything permitted unless
forbidden?
ENGAGING
™
Work
Climate
Determines
Performance

Do staff routinely share customer and
business information with senior
management?
And do they
Routinely collaborate and problem
solve with senior and mid-managers?
What is the management focus? -
employee utilisation, cost reduction
and work intensification
or,
Creativity, customer outcomes,
problem solving, learning and sharing
knowledge, collaboration?
LEARNING
™
Work
Climate
Determines
Performance

Do Leaders foster a no-blame
climate to surface problems for
teams to work on?
Do leaders pay attention to
efficiency-driven functional targets
or
end-to-end effectiveness at creating
customer and user outcomes?
Who does the Leading? A few select
people or most people?
Do we exchange opinions
or
Exchange facts supported with
evidence?
LEADING
™
Work
Climate
Determines
Performance

Do employees influence end-to-end
business processes?
What influence does staff have to
improve the measurement system?
What influence do employees have
on improving products and services?
Are staff free to choose the methods
they will use to improve the
business?
Do staff understand the underlying
theories of the methods they use?
Are staff encouraged to run fail safe
experiments?
IMPROVING
™
Work
Climate
Determines
Performance

Mass Customisation. This is a variation of the one-size-
fits-all. The employee helps the customer select from a
fixed menu of options. The customer experience and
employee engagement, however, are relatively low.
Mass Specialisation. Customers must know which service they
want, where to obtain it and integrate each one from different
sources. Since employees possess deep specialist knowledge,
they will engage customers at a much higher level, and the
customer experience is personal and solutions standard.
Mass Adaptation. The Customer Value Enterprise® The service will
provide personalised advice to suit the individual. Employee skills are
high and they will integrate and combine all solutions on the customers’
behalf in unique combinations, resulting in high customer and employee
engagement. The customer experience is personal and unique.
Mass Production. A one size fits all service
has low variety offerings , employee skills
are basic and customer engagement is
transactional.
Adaptive Climate
Industrial Climate
Climetrics® Landscapes

CHARACTER OFFERINGS
CUSTOMER
EXPERIENCE
EMPLOYEE
EXPERTISE
IMPROVEMENT
RESPONSIBILITY
MANAGEMENT
FOCUS
COMPETITIVE
BASIS
LEADERSHIP
FOCUS
The Pizza
Parlour
Fixed menu
with simple
options
Discuss simple
needs and
available
options.
Low customer
involvement
during solution
design
Understand
basic option
configurations
Central Change
Teams
Managers
Cost, efficiency
and Coordination
Commodity
Driven
Emphasis on
providing
value-add and
choice
Direct and
Control
The Bus Low Variety Transactional
and Processed
No customer
involvement in
solution design
Basic Improvement
Boards
Improvement
Specialists
Suggestion
Schemes
Employee
utilisation, cost
reduction, work
intensification.
Commoditised
High Volume
Low Margins
Economies of
Scale
Command and
Control
Mass
Production
Mass
Customisation
Industrial Climate

CHARACTER OFFERINGS
CUSTOMER
EXPERIENCE
EMPLOYEE
EXPERTISE
IMPROVEMENT
RESPONSIBILITY
MANAGEMENT
FOCUS
COMPETITIVE
BASIS
LEADERSHIP
FOCUS
Customer Value
Enterprise ®
Personalised,
individual,
Bespoke.
Unique.
Flexible
Offerings
Customer
experience is
personal and
unique
Co-Creation of
solution design
Expert Broad
knowledge to
provide
integrated
solutions
Front-line
experimentation
and Learning
Creativity,
expertise, new
products and
services.
Customer
outcomes.
Problem Solving
Trusted
advisor and
expert
Integration
Business
Outcomes
Listen and
adapt
The Department
Store
More choice
from a variety
of standard
offerings
High level of
customer
interaction to
identify needs
and situation
Specific and
deep specialist
knowledge and
skills
Front-line staff
Managers
Developing staff
knowledge
Capture and reuse
solutions
Effectiveness
In-depth
specialities
connected to
expert
networks
Economies of
Scope
Consultative
Mass
Specialisation
Mass
Adaptation
Adaptive Climate

CHARACTER OFFERINGS
CUSTOMER
EXPERIENCE
EMPLOYEE
EXPERTISE
IMPROVEMENT
RESPONSIBILITY
MANAGEMENT
FOCUS
COMPETITIVE
BASIS
LEADERSHIP
FOCUS
Customer Value
Enterprise ®
Personalised,
individual,
Bespoke.
Unique.
Flexible
Offerings
Customer
experience is
personal and
unique
Co-Creation of
solution design
Expert Broad
knowledge to
provide
integrated
solutions
Front-line
experimentation
and Learning
Creativity,
expertise, new
products and
services.
Customer
outcomes.
Problem Solving
Trusted
advisor and
expert
Integration
Business
Outcomes
Listen and
adapt
The Department
Store
More choice
from a variety
of standard
offerings
High level of
customer
interaction to
identify needs
and situation
Specific and
deep specialist
knowledge and
skills
Front-line staff
Managers
Developing staff
knowledge
Capture and reuse
solutions
Effectiveness
In-depth
specialities
connected to
expert
networks
Economies of
Scope
Consultative
The Pizza
Parlour
Fixed menu
with simple
options
Discuss simple
needs and
available
options.
Low customer
involvement
during solution
design
Understand
basic option
configurations
Central Change
Teams
Managers
Cost, efficiency
and Coordination
Commodity
Driven
Emphasis on
providing
value-add and
choice
Direct and
Control
The Bus Low Variety Transactional
and Processed
No customer
involvement in
solution design
Basic Improvement
Boards
Improvement
Specialists
Suggestion
Schemes
Employee
utilisation, cost
reduction, work
intensification.
Commoditised
High Volume
Low Margins
Economies of
Scale
Command and
Control
Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
Adaptive Climate
Industrial Climate

Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
Independent
Financial
Advice
Consumer IT
Support
Services
Energy
Utilities
Water
Utilities
Consumer
Banking
Services
Health-Care
Services
Insurance
Services
Mobile Phone
Support Services
Revenue
and Tax
Government
Centres
Low-cost
Airline
Travel
Services
Legal
Advice
Credit Card
Services
Consumer
Advice
Corporate IT
Services
Post and
Parcel Services
Purchasing
Computers
Mobile Phone
Purchasing
Investment
Services
Weak Operation Standard Operation Excellent Operation
Climetrics®
Operating Landscapes /Operational Excellence
Differentiation
curve
A d a p t i v e C l i m a t e
I n d u s t r i a l C l i m a t e

Work-Climate Science: The questions being asked.
Improving
M
Employee influence on
products and services
N
managing practices
O
other functions
P
end-to-end processes
Leading
I
Performance
management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
Engaging
A
Freedom and decision
making
B Customer facing activity
C
Customer intelligence
gathering
D
Sharing intelligence with
the team
Learning
E
Organisational
understanding
F
across the function
G
other functions
H
top/senior management

Autonomy
Customer facing
activity
Intelligence
gathering
Sharing team
intelligence
Team two Work-Climate
Engaging
Organisational
Understanding
within the function
Learning
Team one Work-Climate
Two application development teams at the same company

Performance
Management
Leadership
approach
Responsiveness to
customer issues
Implementing ideas
to better serve
customers
Leading
Employee influence
on improving service
Employee influence
on work practices
Employee influence
on other functions
Employee influence
on end-to-end
processes
Improving
Two application development teams at the same company
Climetrics®Towards Listen and Adapt Towards Direct and Control
Team two Work-ClimateTeam one Work-Climate

Weak Mass
Production
Mass
Customisation
Customer Value
Enterprise®
Mass
Specialisation
Weak
EngagingLearning
Organisational
Understanding
within the function
Autonomy
Customer facing
activity
Intelligence
gathering
Sharing team
intelligence
LeadingImproving
Customer Value
Enterprise®
Mass
Specialisation
Weak Weak Mass
Production
Mass
Customisation
Performance
Management
Leadership
approach
Responsiveness to
customer issues
Implementing ideas
to better serve
customers
Employee influence
Employee influence
on work practices
Employee influence
on other functions
Employee influence
on end-to-end
processes
Global IT and Applications Company: Before Transformation

Global IT and Applications Company: After Transformation
Weak Mass
Production
Mass
Customisation
Customer Value
Enterprise®
Mass
Specialisation
Weak
EngagingLearning
Organisational
Understanding
within the function
Autonomy
Customer facing
activity
Intelligence
gathering
Sharing team
intelligence
LeadingImproving
Performance
Management
Leadership
approach
Responsiveness to
customer issues
Implementing ideas
to better serve
customers
Employee influence
Employee influence
on work practices
Employee influence
on other functions
Employee influence
on end-to-end
processes

http://www.amadeus.com/documents/lean-
it/Amadeus_Lean_IT.pdf

Adaptive
Climate
Industrial
Climate

Transforming Perspectives Transforming Learning
Transforming Decision MakingTransforming Behaviour
Engaging and
Understanding
Learning and
Sharing
Leading and
Choosing
Improving and
Changing
Work
Climate
Visualise the work
Measure the work
Perfecting the work
Develop the Work-force

Dr Gary Fisher
Organizational Psychology Research
into Service and Work Climates
Now Research Development Officer
University of Warwick
• The research explored how climate
perceptions and affective reactions
at the organizational, team and
individual level influenced service
performance via the use of Social
Exchange Theory and the
concomitant Rule of Reciprocity.
• The data set was gathered via a large
scale (127 organizations and over
3000 employees) quantitative survey
and was analysed via Confirmatory
Factor Analysis and Structural
Equation Modelling.
• The proposed Psychological Process
to Performance Model was tested via
a series of competing nested models.

Stephen Parry
Founder and Senior Partner at Lloyd Parry
Author of Sense and Respond The Journey to Customer Purpose.
‘I promise to challenge your current organisational thinking and enable
you to differentiate your business’ Stephen Parry
Winner of the National Business Award for Best Customer Service
Strategy.
National Business Awards the Judges declared “the company created
an entire cultural change around the needs of its customers and could
as a result demonstrate business growth, innovation and success.”
Partner at Lloyd Parry
Lloyd Parry delivers transformative Lean programs to large scale global
organisations in many sectors including; Telecommunications, IT
Services, Financial Services, Logistics, Outsourcing and Local
Government.
As a result of adopting our approach to Lean-Service a number of
companies have won national industry awards for Best Service
Strategy, Best People Development Program and awards for Innovation
and Creativity.

References , influences and acknowledgements.
Book Sense and Respond: The Journey to Customer Purpose.
Parry, Barlow, Faulkner (Palgrave Macmillan 2005)
The Human Side of Enterprise
Douglas McGregor Annotated and Updated by Joel Cutcher-Gershenfeld
Beyond McGregor’s Theory Y: Human Capital and Knowledge-Based Work in the 21st Century Organization Kochan, Orlikowski,
Cutcher-Gershenfeld http://mitsloan.mit.edu/50th/pdf/beyondtheorypaper.pdf
Service Climate and Customer Intelligence Workers.
Parry and Fisher (2006)
Reciprocity Definition
http://en.m.wikipedia.org/wiki/Reciprocity_(social_psychology)
Reciprocity An Economics of Social Relations.
Kolm (Cambridge)
Reciprocity in the UK Call Centre Workplace.
Gary Fisher PhD in Management Research (2008)
Service Quality Research Perspectives.
Schneider, White (Sage)
Amadeus Lean Enterprise Case Study: Cleared for Take off http://www.amadeus.com/documents/lean-it/Amadeus_Lean_IT.pdf
For extensive list of Stephen Parry personal acknowledgements, influences and references
go to www.leanvoices.com and for Sense and Respond and blog go to www.lloydparry.com

Lloyd Parry Adaptive Lean Service Transformation Consultancy
Lloyd Parry use Lean Service principles to support their clients in the design, transformation and
management of organisations. We also provide executive and change leadership education and
route-map designs.
We have developed Climetrics® a unique organisational diagnostic used to identify how your
management activities, measurement systems, structures, and delivery capabilities can be
combined to create a lean-service climate that leads to high-performance and long-term
profitability.
Lloyd Parry have delivered transformation programs to large scale global organisations in many
sectors including; Telecommunications, IT Services, Financial Services, Logistics, Outsourcing and
Local Government.
As a result of adopting our approach to Lean-Service, a number of companies have won national
industry awards for Best Service Strategy, Best People Development Program and awards for
Innovation and Creativity.
Best Customer Service Strategy - National Business Awards the Judges declared “they created an
entire cultural change around the needs of its customers and could as a result demonstrate
business growth, innovation and success.”

No part of this publication may be reproduced or transmitted in any form or for
any purpose without the express permission of Service Climate Management
Ltd. The information contained herein may be changed without prior notice.
Service Climate Management ® is a registered trade mark of Service Climate
Management Ltd.
Customer Value Enterprise ®is a registered trade mark of Service Climate
Management Ltd.
Climetrics ® is a registered trade mark of Service Climate Management Ltd.
The Engaging, Learning, Leadings Improvement device is a TM of Service Climate
Management.
CORE Demand Profile TM is a trademark of Service Climate Management Ltd.
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