Designing Adaptive, Innovative and Engaging Organisations using Sense and Respond 3.0 Adaptive Lean Principles. What do Adaptive Lean principles tell us about the way we need to design, build and operate modern businesses? Can we design organizations that are adaptive, innovative and engaging for employees and customers alike? Can we really change cultures in reasonably short time-frames? This presentation based on the most recent research from work psychology will provide counter intuitive insights into the ‘industrial management’ mind set, its impact on the design of work and management behaviors. And of course we will provide tested countermeasures to design back in employee willing contribution and establish a real human enterprise that leads to long term prosperity.

1. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
TM

2. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
Designing Adaptive, Innovative and Engaging
Organisations.
Stephen Parry
Author of Sense and Respond
Senior Partner at Lloyd Parry
@Leanvoices
Blog : www.LeanVoices.com
Stephen.parry@lloydparry.com
www.lloydparry.com
www.slideshare.net/SGParry/presentations

3. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
Choice
Freedom
Power
Performance is a matter of people having
which is a matter of
with the Performance
Measures
Technology
Is your organisation a hindrance to employees, managers and
customers?
Designing a better end-to-end
‘System’
to do what matters for customers.
Role Design
Processes and
Procedures
Policy

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Imagine the organisation is like a city.
Analysis of the climate above will reveal
information about activity on the ground.
This provides both a diagnosis of the current
issues and outlines the long-term
consequences.
The Service 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 Service Climate diagnostic called Climetrics® which also measures how well the organisation as a
whole, identifies, understands and delivers against customer needs.
The diagnostic leads to a plan which when executed will create a superior Service Climate through the adoption
of Adaptive -Lean methods.

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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.
Service Climate: Thinking Feelings and Behaviour
of Customers, Employees, Managers and Leaders

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™

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Does the job design allow all staff to
engage with customers and users?
To what extent can staff modify solutions
without management permission?
Is everything forbidden unless permitted,
or is everything permitted unless
forbidden?
ENGAGING
™

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Do staff routinely share business
intelligence and improvement information
with senior management?
What is the management focus? -
employee utilisation, cost reduction and
work intensification or creativity, customer
outcomes, problem solving, learning and
sharing knowledge?
LEARNING
™

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Do Leaders foster a no-blame climate to
surface problems for teams to work on?
Do leaders routinely spend time at the
workplace solving front-line issues with
the staff?
Do leaders pay more attention to
efficiency-driven functional targets or
end-to-end effectiveness at creating
customer and user outcomes?
LEADING
™

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Do employees influence end-to-end
business processes?
What influence does staff have over
improving the measurement system?
What influence do employees have on
improving products and services?
IMPROVING
™

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

12. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
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

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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.
™

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Climetrics® Landscapes
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

15. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
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 and Operational Excellence with Adaptability
Differentiation
curve

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Telco Case Study
CEO wake-up call
‘We have been concentrating on technology and then trying to sell that to
customers lets focus instead on what customers actually want and getting the
technology to support them.”

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Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
Weak Operation Standard Operation Excellent Operation
Climetrics® Telco before transformation
Business
Support
Operations
Design and
Provision Differentiation
curve

18. Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer-facing activity
C
Customer-intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
A B C D E F G H I J K L M N O P
Climetrics® Climatograph
Transformation objective
Climate Strength
Telco Before Transformation

19. Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer-facing activity
C
Customer-intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
A B C D E F G H I J K L M N O P
Climetrics® ClimatographClimate Strength
Telco After Transformation
Transformation objective

20. Operational engagement
Prospect for Value Discover Value Design for Value Build for Value Operate for Value
Organisational
Vision
Operating
Strategy
Diagnose
Organisational Structures
Building New Capabilities and Skills
Communications and Stakeholder Management
Programme Management, Governance and Risk Management
Methods and Tools
Operations delivery
team
FSOM and
Organisational
Design
Client
Engagement
Implementation
Strategy
Structural
Reorganisation
Change approach
and route-map design
Business
Imperatives
Terms of
Reference
CSM
becomes
FSOM
Operating
For Value
Operations Executive Steering Group and Sponsor
Programme Deliverables
EnablersProgramme Management
Operational Engagement
Service climate
analysis Climetrics®
Project management
resources allocated
Route-map to the New Operating Model and Climate
Implementation
Client and User needs
analysis
Customer Engagement

21. Change
Management
Standards
Process
Management
Measurement
Service Mgnt
Finance
Budgets
Knowledge
Management
Resource
Management
Escalation
Problem
Management
Commercial
Trading
Admin
Logistics
Facilities
Field
Technologies
Fleet
Management
H.R
R&R
Bonus.
Operations Staff
Customer
Support Activities
The way we think

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Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
Weak Operation Standard Operation Excellent Operation
Climetrics® Telco before and after transformation
Business
Support
Operate
Design and
Provision
New
Service
Differentiation
curve

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Statement Before % After %
Understanding our services allows me to take
effective action.
42 100
Understanding the customer improves my
commitment.
14 83
Understanding customers helps me make better
decisions.
15 95
It is my job to share information with my peers
and managers.
0 63
I help my organisation understand what
customers value.
0 82
My manager supports my decision when I have
customer data.
0 49
The management team is committed to
improving the quality of work
17 50
Statement Before % After %
I am involved in decision making. 28 45
I make decisions with the customer in mind. 14 67
My data improves the quality of decision
making.
0 83
I can improve processes and methods to serve
the customer.
15 65
I use customer data to help managers make
better decisions.
17 63
I am confident making decisions with customer
data.
13 66
I understand how the whole organisation works
for customers.
16 68
Climetrics® Survey: Telco before and after highlights

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Luton BC
In year one of our Luton Excellence Change program we were able to meet a budget gap of
£6.4 million.
In the second year when the council’s budget for 2011/12 was reduced by £19 million the
change program identified and produced £21 million in savings while either maintaining or
increasing the quality of service delivery.
This was achieved not by following typical BPR, process improvement and cost cutting
projects but by investing in activities to create a cultural change by developing our staff and
managers to take action on improving the service themselves.
Main objective: enabling Luton Borough Council to deliver the best value services to citizens
and customers. It has three key focus areas:
1. improving customer service, outcomes and citizens’ experience of the local authority
2. delivering efficiencies, cost avoidance and cashable savings
3. streamlining working styles and increasing job satisfaction.
Achieving this has involved, first and foremost, prompting a change in organisational
approach and a change in climate.
We introduced a particularly sharp mind-set about how to run an organisation efficiently and
effectively in terms of what is done, how it is done and who does it.

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Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer facing activity
C
Customer intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
Luton BC:Before
A B C D E F G H I J K L M N O P
Climetrics® Climatograph
Transformation objective
Climate Strength

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Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer facing activity
C
Customer intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
Luton BC:After
A B C D E F G H I J K L M N O P
Climetrics® ClimatographClimate Strength
Transformation objective

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Local Government: Two-year transformation
Navigator Suite ™ Route-Maps

28. © Copyright Stephen Parry 2011 all rights reserved.
Fujitsu Case Study: Results 2003/2004
Customer satisfaction up by 74%.
Unwanted demand decreased by 61%.
Employee satisfaction increased by 40%.
Attrition dropped from 40% to 8%.
Operating costs reduced by 45%.
Increased business revenues. 72%
Created a market differentiator.
2003 National Business Awards
Best customer Service Strategy ‘Sense and
Respond’
Fujitsu generated “an entire cultural
change around the needs of its
customers and could as a result
demonstrate business growth,
innovation and success.”
Source Fujitsu Case Study: Sense and Respond Book Used with kind permission

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©Copyright 2012
Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer -facing activity
C
Customer -intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
A B C D E F G H I J K L M N O P
Climetrics® Climatograph
Transformation objective
Climate Strength
Global ICT Outsourcing : Before Transformation

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©Copyright 2012
Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer-facing activity
C
Customer-intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
A B C D E F G H I J K L M N O P
Climetrics® ClimatographClimate Strength
Transformation objective
Global ICT Outsourcing : After Transformation

31. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer facing activity
C
Customer intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
A B C D E F G H I J K L M N O P
Climetrics® Climatograph
Transformation objective
Climate Strength
Applications Company. June 2010: Before Transformation

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Mass
Production
Mass
Customisation
Mass
Specialisation
Mass
Adaptation
A
Freedom and decision
making
B Customer facing activity
C
Customer intelligence
gathering
D
Sharing intelligence with the
team
E
Organisational
understanding
F
Sharing intelligence across
the function
G
Sharing intelligence with
other functions
H
Sharing intelligence with
top/senior management
I Performance management
J Adaptive leadership
K
Responding to customer
issues
L
Implementing ideas to
better serve customers
M
Employee influence on
products and services
N
Employee influence on
managing practices
O
Employee influence on
other functions
P
Employee influence on end-
to-end processes
Engaging Learning Leading Improving
A B C D E F G H I J K L M N O P
Climetrics® ClimatographClimate Strength
Transformation objective
Applications Company. Nov 2011: AfterTransformation

33. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
©Copyright 2012
Choice
Freedom
Power
Performance is a matter of people having
which is a matter of
with the Performance
Measures
Technology
Is your organisation a hindrance to employees, managers and
customers?
Designing a better end-to-end
‘System’
to do what matters for customers.
Role Design
Processes and
Procedures
Policy

34. All Trade-Marks and ©Copyright 2012 Owned by Lloyd Parry. All Rights Reserved.
TM

35. 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.
© 2012 Service Climate Management Ltd. All rights reserved
All other product and service names mentioned are the trademarks of their
respective companies. Data contained in this document serves informational
purposes only.
The information in this document is proprietary to Service Climate Management
Ltd. No part of this document may be reproduced, copied, or transmitted in any
form or for any purpose without the express prior written permission of Service
Climate Management Ltd.
This document is a preliminary version and not subject to your license
agreement or any other agreement with Service Climate Management Ltd. This
document contains only intended strategies, developments, models, methods
and products and is not intended to be binding upon Service Climate
Management to any particular course of business, product strategy, and/or
development. Please note that this document is subject to change and may be
changed by Service Climate Management Ltd. at any time without notice.
Service Climate Management assumes no responsibility for errors or omissions
in this document. Service Climate Management Ltd. does not warrant the
accuracy or completeness of the information, text, graphics, links, or other items
contained within this material. This document is provided without a warranty of
any kind, either express or implied, including but not limited to the implied
warranties of merchantability, fitness for a particular purpose, or non-
infringement.
Service Climate Management Ltd. shall have no liability for damages of any kind
including without limitation direct, special, indirect, or consequential damages
that may result from the use of these materials. This limitation shall not apply in
cases of intent or gross negligence.
The statutory liability for personal injury and defective products is not affected.
Service Climate Management Ltd. has no control over the information that you
may access through the use of hot links contained in these materials and does
not endorse your use of third-party Web pages nor provide any warranty
whatsoever relating to third-party Web pages.