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Business901                      Podcast Transcription
Implementing Lean Marketing Systems


 Defining Lean IT with Steve Bell
      Guest was Steve Bell




     Related Podcast:
               Defining Lean IT with Steve Bell




                 Defining Lean IT with Steve Bell
                      Copyright Business901
Business901                      Podcast Transcription
Implementing Lean Marketing Systems

For more than twenty five years, Steve Steve Bell, the founder of
Lean IT Strategies LLC. Steve is a Lean Enterprise Institute
                    faculty member, Shingo Research Prize
                    winning author, and Lean IT pioneer. Steve
                    has delivered a balance of Lean, business
                    process improvement, and management
                    consulting services.

                     Steve published Lean Enterprise Systems:
                     Using IT for Continuous Improvement
                     helping to introduce the emerging discipline
                     of Lean IT. Steve and his partner Mike
                     Orzen later published Lean IT: Enabling and
Sustaining Your Lean Transformation.

Steve is on of the keynotes at the upcoming, North American
Lean IT Summit, bringing together a community of Lean and agile
practitioners and thought leaders from around the globe.


The Podcast Transcription:
Joe Dager: Welcome, everyone. This is Joe Dager, the host of
the Business901 podcast. With me today is Steve Bell. He is the
founder of Lean IT Strategies, a management consulting firm
focused on helping his clients deliver value through continuous
improvement and innovation of IT products, projects, and
services. Steve is also the author of "Lean Enterprise System,"
the first book to explore the emerging disciplines of Lean IT.
Steve is also a co-author of "Lean IT: Enabling and Sustaining
your Lean Transformation," which was a Shingo Prize recipient.
Steve, I would like to welcome you. And trying to catch up with
you to schedule the podcast, it would seem the Lean IT world is
extremely busy at the moment.

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Steve Bell: It is very busy, Joe. I appreciate you having me on
the show. Suddenly, in the last few years, there's been an awful
lot of attention turned to IT and the IT capabilities, driving
strategy and helping companies connect with their customers.
Joe: Lean IT touches so many areas. To steal a GE term, the
information world seems to be boundaryless. Can you briefly
describe what you consider Lean IT?
Steve: In my previous book, Joe, "Lean IT," I described the
inward and outward-facing dimensions of Lean IT. The
inward-facing dimension is primarily operational excellence of the
IT organization itself. That really falls in three categories: one,
the provision of IT services, such as servers, storage, security
and such, to help the business run; application development,
where I focused on the agile software development, which is the
rapid learning and delivery of innovative software applications;
and then Lean project management, because oftentimes the IT
organization is tasked with being the project-management center
of expertise for the organization. So what the inward-facing
dimension of Lean IT does is help the IT organization achieve
operational excellence to serve the enterprise, because after all,
in most cases, IT is a support organization of the enterprise.
That brings us to the outward-facing dimension, which is the real
purpose of the business, which is to add value to its customers.
In that role, IT can help provide applications, self-serviced
applications, to engage the customer-particularly nowadays,
we're seeing many, many mobile applications-helping customers
interact with the company directly, as well as IT capabilities that
are being built into practically every product and service an
enterprise delivers to its customers these days. IT capabilities
have really become integral to the way an organization interacts
with the customer to improve the customer experience.



                      Defining Lean IT with Steve Bell
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Joe: I think I read somewhere, that 60 percent of products now
have a smart feature to it. So, really, information technology
affects 60-70 percent of the products, let alone the internal
working.
Steve: That's true. In addition, even those products that don't
have a technology capability built in, many savvy companies are
now finding ways, through websites and mobile interfaces and
self-service customer interfaces, to help the customer find and
purchase and use their products and services more effectively. In
some cases, it's the service aspect through the Internet that will
often differentiate a company's product or service more than the
product itself.
Joe: I think that goes back to something I talk about a lot,
Service-Dominant LogicTM, where your product or service has little
value; it's enabling the use of it. I think that IT plays a huge role
in enabling the use of the product, from what you just said there?
Steve: Exactly, exactly. In fact, there are some very
forward-looking companies that are starting to explore the
boundaries of social media, beyond the personal aspects of social
media, what we might be commonly seeing as Facebook or
Twitter. We're starting to look at how we can monitor sentiments,
how we can monitor communications that are going out across
the Internet, what are people saying about our products, what
are people saying about our competitors' products. Through the
volumes of data that are now passing across the Internet every
second, much of it publicly accessible, what can we gather about
customer and prospect behaviors, both considering a particular
product or how they're using a particular product, more and more
nowadays, these technology-enabled products that you're
speaking of, Joe--say a refrigerator, for example. The more that
refrigerators and power meters and other devices are hooked to
the grid, are hooked to the Internet, we'll be able to begin
monitoring usage patterns and not only provide higher-value
                      Defining Lean IT with Steve Bell
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products and services to our customers, but we'll be able to
monitor how our customers are actually using these products
and, in doing so, gain insights into how to help them add more
value in the future through creative product design.
Joe: Why does Lean IT matter? Do I want to Lean IT? How does
Lean and IT work together?

Steve: It's interesting. If you're a very large traditional company
and you're looking at many of the web upstarts--say, for
example, you might look at an Amazon or you might look at a
Google--and you say, "Well, how are these companies able to
move so quickly and disrupt so many markets?" Well, the answer
is that these companies, these new web upstarts, are very
creative, they're very fast-moving, they're very innovative, and
they’re often well-funded. They often don't have a lot of baggage.
What most large traditional enterprises have is a great deal of
baggage, much of it in terms of old, outdated processors, but also
much of it in terms of old and outdated legacy systems and
legacy architecture. So one of the first things Lean IT does is to
look inside the organization and its processes and its information
systems and look for waste. The common wastes within Lean
definitely have their metaphors within the Lean IT world, such as
excess applications and bad data and redundancy and so forth,
and there's an awful lot of that within the world of IT.

If you look at how many larger organizations spend their money
on IT, they will tell you that upwards of 70, 80, even 90 percent
in some cases, are spent just on keeping the lights on, keeping
the servers running and keeping the applications humming. If
you're spending 80 percent on keeping the lights on, that only
leaves 20 percent of your IT budget on an annual basis to fund
growth and innovation. When you're competing with many of
these very agile, very fast web startups that are trying to disrupt
your industry, many CIOs in many larger organizations are now


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looking to see what they can do to promote innovation, to speed
the innovative edge that IT can offer them.

You don't do this by cutting costs or cutting heads, or oftentimes
outsourcing services. What you do is the same approach you
would do in any other industry, where you apply Lean. You get
your teams of people together. You map out your value streams.
You figure out where the waste is. And then, incrementally, you
remove that waste, and what you end up achieving is a degree of
operational excellence on the operations side of IT, which frees
up the creativity to drive the growth and innovation for the
company, which is what the people in the C-suite want for IT.
Joe: IT is very knowledge-based. Is that easy to map? Can you
lay out that current state and build a future state easily, or is it
pretty difficult?
Steve: That's a very insightful question. There are really two
dimensions of Lean IT. I'm not talking the outward and the
inward-facing; I'm talking about in relationship to knowledge.
There's a metaphor that goes back to the production world, the
manufacturing world. When we talk about Lean, we typically, in
our minds, have Lean manufacturing or Lean production in our
heads, which is about operational excellence and which is about
efficiency. There's another very important aspect of Lean, and
that is Lean product development. In the world of manufacturing,
Toyota, for example, has a very well-refined
product-development organization, many others as well. I could
point to 3M and Google and others that are very innovative
organizations. They practice Lean principles as well, but the focus
isn't so much on operational excellence and efficiency as creating
rapid cycles of learning and discovery.
That's the real key, when you talk about IT and the world of
innovation, when you try to have IT drive innovation, is you're
directly trying to find the areas of uncertainty. You're looking for

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the mysteries. You're looking for the unknowns. Which is why
there's such a thriving venture-capital market in the Silicon
Valley, for example, because you've got that whole region of the
country focused on asking new questions and uncovering those
uncertainties and driving new products and services and even
business models.

The question for many traditional IT organizations is, how do we
take what is typically a fairly risk-averse organization--the typical
IT organization has very strict budgeting and governance
mechanisms to manage risk and to manage project costs and all
of that--and how do we maintain the safety and the security of
our IT operations while, at the same time, encouraging and
promoting innovation? This means taking risks, taking calculated
risks.
The part of Lean IT that the agile software development world
has tapped into so successfully over the last 10 or 20 years is
how to apply those Lean principles in the area of development.
Now, overall, Lean IT has to bring the development and the
operations people together, because it's not sufficient just to
write and deploy a new, innovative application. You actually have
to deliver it to the customers, and they actually have to adopt it
and use it successfully.
You really have to look at it as an entire value stream, from the
time someone has an idea until the time that idea's actually
deployed and measurably adding value in the field. It's that cycle
of learning and development. The faster you can make that cycle
of development and learning, the more innovative you can be.
Joe: To me, that seems like the cool side, the design side, the
innovation side. 80 percent of it, maybe as much, is the standard
work, The regular work that IT does. Is that a good way to put it,
the standard work?


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Steve: Well, exactly. There has been so much emphasis in the
last few years on cloud computing and service-oriented
architecture and outsourcing, and what companies are trying to
do are gain scale efficiencies on the operational side of IT. These
are the highly engineered activities that can and should be
standardized. And this is the area where the IT services
management community has been focused for so many years, in
the IT Infrastructure Library, the ITIL, certification, the
framework for operations of IT. And the basic framework is, how
do you manage IT operations to drive out variations, drive out
risk, to improve quality, reliability, and consistency? What I see
many companies do, however, is that same thing that many
manufacturing companies tried to do years ago, which is thinking
that we can reduce our risk and improve our quality and reduce
our cost by outsourcing these things. Many manufacturers
outsourced some basic capabilities to Asia and to Latin America
over the past few decades. Now we're learning that in many
cases, since we were not looking at total cost of ownership, we
weren't looking at the total package of services and cycle time,
turnaround time, that there were many hidden costs and there
were many detriments to the long term health of our enterprise
by farming out some of these core capabilities. Now we're
starting to see the on-shoring trend turning around in the
manufacturing world.
I predict that we'll see this same sort of trend in IT because,
basically, even if you can make an economic argument to
outsource basic infrastructure or basic IT services the first thing
you need to do is clean up your house. Standardize your services,
catalog your services, figure out what it is you're doing and how
because if you hand an outsourcer a non-standard process that's
not running well and not documented well you will pay for them
to sort it out and you will most likely end up with their best
practices rather than your own. In the long run, that may not be
in your enterprises best interest.

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So the focus on standard work in the Lean world is to get your
teams together, define the work, document it, and do it
consistently, over and over again.
Joe: Does it help to be practicing Lean in other areas to start
practicing Lean IT?

Steve: That's an interesting question. I have a new book coming
out here in just a few months. Dan Jones who was co-author with
Jim Womack of "Lean Thinking" and a couple of other books
really has helped define the practice of Lean. He's the forward
author for this new book of mine. Dan and I spent quite a bit of
time talking about Lean in the context not just of IT but in the
context of other industries. What Dan had to say about this was
fascinating. He said he's seen, over the last 20 years or so, Lean
has moved well beyond manufacturing. It's moved into
healthcare and financial services and transportation and retail and
distribution. Every time Lean moves into a new area, a new
domain, a new industry sector, it manifests slightly differently.
The Lean you would see in a hospital looks different in many
ways than the Lean you would see in a manufacturing floor or a
retail environment.
But when you get right down to it the principles of Lean are the
same. It's about collaborative learning. It's about speed. It's
about quality. It's about waste reduction. Those basic principles
are the same.
What he has concluded and what I have concluded is you need to
create a framework for the people who are actually doing the
work to come together, figure out what the work is to be done.
Where's the value? Where's the waste? Iteratively, through
experiments, find ways to do it better and better. Each time you
learn. You go through a cycle of learning. You improve the
process and at the same time you understand more about the
subtleties about the process and that's where the paradox of Lean

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emerges. As you're standardizing something you're also gaining
insights into it which leads to creativity and innovation.

Many people react to standard work thinking that you're just
turning people into robots. What you're actually doing is you're
helping people, removing the drudgery and the repetitiveness
from the work, making the work flow more smoothly and quickly,
which frees up peoples valuable time and energy to figure out
ways to do the work better and to do new kinds of work.
I think that's the real magic of Lean whether it's in IT or any
other industry. When you see a team really get it and start to
think and act like a team with a focus on the customer and they
own the product, they own the process, they own their
relationship with the customer, then the role of management isn't
so much a directive role or a controlling role but the role of
management is to help remove the obstacles in the teams way.
That's when you have high performance, self-directing teams that
really start to energize the company. When that happens that's
where the momentum comes from.
Joe: You mentioned a couple of things there. It doesn't sound
like it's just about the internal customer it's also about how the
organization affects the external customer. With social media and
everything, how does that affect IT departments out there? That's
got to be tough from a security standpoint.
Steve: It certainly is disruptive. If you look at several of the
very major disruptive trends that enterprise IT organizations have
had to learn to grapple with just in the last five years that would
include not just the emergence but the rapid adoption of cloud
computing, the emergence of social media, the emergence of big
data analysis. Suddenly, just in the last year, the statistics show
that the usage of mobile computing is now in many cases,
browsing on mobile devices has exceeded browsing on ordinary
web browsers. So mobility has taken off like a rocket-ship.

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What that means is that no matter what your business, no matter
who your customer is, you can count on them being better
informed than you. When the time comes when someone is in the
field ready to make a purchase decision, or use your product or
service, or needs help using your product or service, being able to
connect with them in real time through various channels, not just
email, not just instant messaging, not just chat, but starting to
use some of these other systems of engagement, from an
enterprise point of view, to help improve the customer experience
is where we feel a lot of companies investing a lot of effort in
research and development right now. Not that they're there but
that they know that this is important for them to experiment with
because whoever gets the high ground of an improved customer
experience is going to attract this whole new market.
What does that do for enterprise IT in terms of security, in terms
of storage management, in terms of integrating these little 99
cent apps with SAP on the back end? Well, that's a challenge.
That's part of where the agility of Lean IT, not just on the
application development and application integration and business
intelligence but the overall architecture, the overall integration
end to end and all the way down the technology stack, all the
way down to servers and storage and security, really the whole IT
organization needs to be agile and responsive.
That's where I see the direction of Lean IT going. It's taking a lot
of the lessons that the agile software development community
has learned over the years and applying it to the larger scale
value streams of the overall enterprise, not only the technology
value streams all the way down the technology stack but the
enterprise-wide value streams that actually do touch the end
customer.
I believe we all see now that in many cases competitive
advantage, despite what Nick Carr might have said years ago
with his book "Does IT Matter?". It does matter. It matters in the
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hands of the consumers who are looking to have a fast, base, and
satisfying customer experience as they interface with us and they
use our products and services.
Joe: Can you be real loosey-goosey in one area, let's say, and
then very controlled in another? Is it possible for IT to think that
way?

Steve: That's an interesting question. I'll have to reflect on that
for a minute. The pace of change is very rapid right now. Not a
month goes by, I think, that every one of us doesn't see or hear
of some new product or service or company and suddenly you
raise an eyebrow and you say "Wow, I never thought of that
before." The next thing you know you've downloaded it and
you're using it and you expect it to work. You expect it to work
flawlessly. I think one of the most significant things that have
happened to us in the last five years is our threshold for adoption
is virtually instantaneous. That's when we talked about the
consumerization of IT. That's what we mean.

Can we expect that something that we can download in five
minutes for 99 cents on our iPad to actually work and integrate
with the back end of the enterprise and be a part of the flow of
those enterprise-wide processes right away? I think that is an
unrealistic expectation. But at the same time, enterprise IT
organizations need to find a better balance of security and control
and integration to be able to do that.
I can tell you right now that there are some real challenges out
there. It's not that enterprise IT folks aren't trying, it's just that
many of these architectures and these integration infrastructures
that have been put in place surrounding some of these legacy
systems for the last 10 or 20 years are really being stretched,
they're really being pushed.
I think we're looking, over the next 10 or 20 years, at a
transition. Technology futurist Geoffrey Moore talks about the
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transition from transactional systems, systems like ERP systems,
the systems of engagement, and he says it's going to take a
decade for organizations who's whole businesses are on ERP
systems, like SAP and Oracle and others, to truly integrate these
social media and social engagement tools smoothly into the flow
of the work that we do. But I do believe that's the direction that
we're going.
To answer your question, it's going to be a very fine balance and
a constantly shifting balance between control and flexibility.
Joe: Is that one of the reasons that nobody likes the IT
department? "Oh, I've got to get IT involved."
Steve: Well, you know, that's a really good point. Just in the last
two years I've heard many people say that now my IT at home,
my Sunday night IT, is much better than my Monday morning IT.
I've got a newer computer. I've got a faster connection. I don't
have so many restrictions. I can get more work done at home on
Sunday night than when I go into work on Monday morning. I
think that's partly because of the shifts that the consumeration of
technology. We do have access to better, faster, cheaper, easier
to use technologies from a consumer perspective than we do
from a business perspective.

I'm going to put my Lean thinking cap on and encourage people
to remember that from a Lean perspective sub-optimization does
not always add value to the customer. What I mean by that is
that any particular person can do their task or has a more
satisfying individual experience with you and your computer and
your smartphone but if you are creating hurdles you are creating
additional fragmentation of systems and data and the flow of that
information that's supports the flow of the work across the entire
value stream that adds value to the end customer. You may feel
like you're getting a better experience but you're actually


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throwing up additional roadblocks in the delivery of value to the
end customer.

I'm not saying the consumerization of IT is a good thing or a bad
thing but I think we need to keep our Lean hats on and look at
the overall value stream and focus on the flow of the overall
value stream. I think from an enterprise perspective, that's most
important.
Joe: I think you hit a nail on the head because I got a whole
slew of software and now I got a whole slew of apps on my phone
that all were meant to solve my latest problem but it's amazing
how little of the problems our relevant a month later or if I'm still
using them.
Steve: Exactly.
Joe: If you looked at that from an organizational perspective I
would think that it would create such an extraordinary amount of
waste and confusion that you could practically become
dysfunctional.
Steve: Yes. Absolutely. I know many of your listeners are
familiar with value stream mapping but oftentimes there's a bias
to focus on the processes, the cycle time and the elapsed time
and the quality of the processes and so forth. I like to spend an
equal amount of time, once I've mapped the processes out, to
look at the underlying information systems. When you map the
information systems out and how they support the process, often
you'll find twice as many information systems, anywhere from
databases and spreadsheets, and even the little sticky notes on a
person's monitor, in one way of thinking, is an information
system, because it provides information to facilitate the flow of
the process. You map those information systems out on a value
stream map, you'll see enormous anarchy, enormous, chaotic
flow of information, with gaps and cracks and hand-offs, where

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three people are involved in the same process and everyone has
information that disagrees with the others.

That sort of fragmentation, from an information point of view, is
not helping the flow of work. It may seem like its helping each
individual do their task, but in the end, it's cluttering up the flow
of work. The only way to see that, the only way to identify that
waste is to get all of the stakeholders of the whole value stream
in a room together and figure it out. The moment you do, it's
been my experience most of the time, anyhow, that every
individual sort of loosens their grip on their own individual
productivity-enhancement tools in favor of improving the flow of
the overall process. But you have to bring the team together and
get that insight if that's going to happen.
Joe: I think that's a huge factor, because I can see that,
especially from my experience in sales and marketing, when you
sit there and take a value stream of a customer and you look at a
customer-journey map, per se, and then you look at the
processes behind that. You go backstage. We can all identify the
audience. From a theater perspective, you can identify the
audience and the on-stage performances, the sales and stuff.
When you go backstage how that salesman is supported there's
huge gaps there.
Steve: Absolutely. Absolutely. I made a presentation about
three weeks ago at the annual Lean Enterprise Institute's
Transformation Summit in Florida, and the subject of my talk was
the virtual voice of the customer, and the emphasis of that
presentation was on the customer experience. A point I made
during the presentation was, how often do you really go
together? How often do you really go to the customer, watch how
the customer interacts with you? When they put a call into your
service desk or your help desk, how many times do they have to
call back? How many times do they have to leave a message?
How many times do they have to tell the same story, over and
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over and over again, for example? Do you even know your
customers have to go through that? From your point of view, you
may not see what it's like to be someone who is doing business
with you. So you've got to get up, you've got to go out there and
make an active effort to walk a mile in their shoes, as the old
saying goes, and understand what the customer experience is in
doing business with you. When you do that, it's not easy. It takes
time. It takes effort. But when you truly walk a mile in your
customer's shoes that is where the insights come. That's where
the creativity and the ideas come in, saying, "Boy, if we could
only do this, if we could only make it easier for the customer to
do this?"
Those are the things that matter to your customers. When they
know you're listening, when they know you're paying attention to
the little things that matter, that's when loyalty occurs. And a lot
of these things that we're talking about making life easier for the
customer to do business with you, in this day and age, a lot of
them have to do with some sort of a technology experience, on a
mobile phone or a browser or even just an automated
voice-response system on a computer that's talking to a back-end
database somewhere. The customer experience is very much,
these days, a technology experience.
Joe: I think you have a great point. Is there a way I can listen to
that presentation? Was that recorded?
Steve: Well, if you would go to Lean Enterprise Institute,
www.Lean.org, and I believe that those videos are there. I
believe there's a fee to sign up, but you can have access to all of
the videos from all of the presentations from the summit. It was
a great summit. I'm sorry I don't know what the fee is, but I
would say it would be well worth it, especially if someone from a
company were to sign up and have multiple viewings of it. I think
there would be a lot of value in that.


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Joe: There seems to be so much intangible value surrounding
IT. How do you measure? How do you know your IT department's
doing a good job?
Steve: Oh, goodness. That is the million-dollar question. The
traditional measures of IT, particularly on the operations side,
such as uptime and server response time and things like that,
having to do with the mechanics of deploying IT; they're
important from an operational point of view, in order to ensure
that you're delivering those services consistently, high quality,
reliability, low cost. But the real key to measuring IT value is,
"are you enabling the business to do business better, faster,
more friendly with the customer?" Ultimately, when you're
deploying technologies into the field, self-service applications or
mobile applications or online order-entry applications, what are
you doing to help improve the customer experience, to make you
an easier, better, faster, cheaper company to do business with? If
you can tie those measures of business outcomes back, at least
indirectly, to the activity of the IT organization, then you're really
getting somewhere. Now, the only way you can do that is when
the folks in the IT organization are on the same value stream
teams as the businesspeople who are delivering value to the
customers.
I often like to ask this question. When is the last time you had a
Kaizen, a continuous-improvement event, in your business, and
you had an IT person, a person from the IT organization, in that
Kaizen event from start to finish? You didn't just bring them in at
the end and hand them the, quote, "solution," whatever it is
they're supposed to deliver to you. You had them there from the
very beginning, from problem identification, problem-solving, so
you could gain their understanding and their insights of what are
technologies or what are challenges that the businesspeople may
not have a sense for, that the IT folks, if they were in that room
from the very start, you could have a whole new set of insights
into the problem-solving process.
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Most often people will say, "Well, our IT folks are too busy.
They're too busy fixing things. They're too busy responding or
reacting to things." I would say one of the very best measures,
one of the very best leading indicators of IT performance, is how
much of IT's time is spent in proactive versus reactive behavior?
How much of their daily activity is planned versus unplanned?
Because I believe the more you can engage IT in helping run the
business better, the less reactive, firefighting behavior you'll see
out of the IT organization. That's when the real creativity and the
innovation kicks in.
But in order to free up their time, in order to do that, the first
thing you've got to do is they've got to clean up their own
backyard. And that's where the operational-excellence aspect of
IT comes in, where you're focused on reliability, consistency,
quality, performance.
Joe: There's a conference that you're a big part of, in
September, I believe. When is that, and what would I learn by
attending it?
Steve: First-annual Lean IT Summit. It is happening in Orlando,
September 10th and 11th, and then I'll actually be presenting a
full-day Lean IT workshop on the 12th. And then the 13th and
14th, at the same venue, is the Lean Accounting Summit, put on
by the same organizers. So my workshop is actually sandwiched
between the Lean IT Summit and the Lean Accounting Summit,
and I believe there's quite a bit of crossover between those two
audiences. Lean Enterprise Institute is the sponsor of this event.
It is going to have a great lineup of speakers. You could go on the
web to Leanitsummit.com. The keynoter, kicking off the first day,
is Mike Rother. Rother and Shook wrote "Learning to See" years
ago. Mike has written a book that has resonated very strongly
with the IT community, called "Toyota Kata," which I really think
had a lot of lessons for Lean and IT.


                      Defining Lean IT with Steve Bell
                           Copyright Business901
Business901                      Podcast Transcription
Implementing Lean Marketing Systems
We've got several other keynotes. One in particular I want to
mention is Mark Striebeck, who is a chief engineer at Google.
He's the product owner for the whole Gmail product at Google,
and he'll have some very interesting insights about Lean
principles and practices that are just baked into the DNA at
Google. We're going to have folks from the agile software
community and the IT services management community and IT
architecture, and it's going to be a fabulous two-day overview of
all of the participants in the IT community and what they have to
do with Lean.
Joe: Your new book will be out just about that time, too. You'll
introduce that at your workshop?
Steve: Absolutely. In fact, right now it's slated to ship about the
time of the workshop. My newest book, my third book, the name
of it is "Run, Grow, Transform: Integrating Business and Lean IT."
And basically, the emphasis of this book is how we improve IT
operational excellence so we can shift more of our effort and our
investment into things that help the business grow and help the
business innovate. Now, as I mentioned earlier, I am very
fortunate to have had Dan Jones collaborate with me on this and
write a foreword for the book. I also have a number of
co-authors, who have each helped me with the content of this
book and have contributed their own chapters. What I basically
have done is, with this book, I establish the premise that there is
no such thing as IT. IT isn't an entity. IT is really a community. It
is a community of practitioners with various disciplines.

What I've brought together are thought leaders, representing
many of these disciplines, together, to look at IT as an integrated
whole. Let me just go down the list: Charles Betz, enterprise
architect, author; Troy DuMoulin, from the IT
services-management community, also an author; Paul Harmon
and Sandra Foster, from the business process management
community; Mary Poppendieck, a well-known thought leader in
                      Defining Lean IT with Steve Bell
                           Copyright Business901
Business901                      Podcast Transcription
Implementing Lean Marketing Systems
the agile software development community; and John Schmidt,
who is an author of a book called "Lean Integration" and an
expert in Lean data management and integration.
Each of these has not only helped me thread together my own
material and my own chapters, but each of them has also
contributed a chapter in their own area of expertise. What I've
hoped to accomplish with this book is to treat IT as a community
of practitioners, and a community of practitioners that has to join
hands with the business colleagues that they work hand-in-hand
with, in order to create the IT-enabled value streams that add
value to the end customer. After all, that's the whole point, that
is the reason an enterprise exists.
Joe: That's scary. I recognize all the names.
Steve: It's a great lineup, and I am so grateful to have all of
their effort and their participation.
Joe: Steve, if someone would like to get a hold of you, what's
the best way?
Steve: Well, the best way to reach me would be through my
website, which is www.Leanitstrategies.com. I also invite you to
visit me on my LinkedIn site: you can find me with Lean IT
Strategies through Steve Bell. And I'm on Twitter at
@LeanITCoach.

Joe: I'd like to thank you very much. It was a very insightful
conversation. The podcast will be available on the Business901
website and also the Business901 iTunes store. So thanks again,
Steve.
Steve: Thank you for having me, Joe.




                      Defining Lean IT with Steve Bell
                           Copyright Business901
Business901                      Podcast Transcription
Implementing Lean Marketing Systems

                                                              Joseph T. Dager
                                      Implementer of Lean Marketing
                                                                      Systems
                                Ph: 260-438-0411 Fax: 260-818-2022
                                         Email: jtdager@business901.com
                               Web/Blog: http://www.business901.com
                                                        Twitter: @business901
                          What others say: In the past 20 years, Joe and I
                          have collaborated on many difficult issues. Joe's
                          ability to combine his expertise with "out of the
                          box" thinking is unsurpassed. He has always
delivered quickly, cost effectively and with ingenuity. A brilliant mind that is
always a pleasure to work with." James R.

Joe Dager is President of Business901, a progressive company providing
direction in areas such as Lean Marketing, Product Marketing, Product
Launches and Re-Launches. As a Lean Six Sigma Black Belt,
Business901 provides and implements marketing, project and performance
planning methodologies in small businesses. The simplicity of a single
flexible model will create clarity for your staff and as a result better
execution. My goal is to allow you spend your time on the need versus the
plan.

An example of how we may work: Business901 could start with a
consulting style utilizing an individual from your organization or a virtual
assistance that is well versed in our principles. We have capabilities to
plug virtually any marketing function into your process immediately. As
proficiencies develop, Business901 moves into a coach’s role supporting the
process as needed. The goal of implementing a system is that the processes
will become a habit and not an event.

    Business901              Podcast Opportunity             Expert Status




                          Defining Lean IT with Steve Bell
                               Copyright Business901

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Defining Lean IT with Steve Bell

  • 1. Business901 Podcast Transcription Implementing Lean Marketing Systems Defining Lean IT with Steve Bell Guest was Steve Bell Related Podcast: Defining Lean IT with Steve Bell Defining Lean IT with Steve Bell Copyright Business901
  • 2. Business901 Podcast Transcription Implementing Lean Marketing Systems For more than twenty five years, Steve Steve Bell, the founder of Lean IT Strategies LLC. Steve is a Lean Enterprise Institute faculty member, Shingo Research Prize winning author, and Lean IT pioneer. Steve has delivered a balance of Lean, business process improvement, and management consulting services. Steve published Lean Enterprise Systems: Using IT for Continuous Improvement helping to introduce the emerging discipline of Lean IT. Steve and his partner Mike Orzen later published Lean IT: Enabling and Sustaining Your Lean Transformation. Steve is on of the keynotes at the upcoming, North American Lean IT Summit, bringing together a community of Lean and agile practitioners and thought leaders from around the globe. The Podcast Transcription: Joe Dager: Welcome, everyone. This is Joe Dager, the host of the Business901 podcast. With me today is Steve Bell. He is the founder of Lean IT Strategies, a management consulting firm focused on helping his clients deliver value through continuous improvement and innovation of IT products, projects, and services. Steve is also the author of "Lean Enterprise System," the first book to explore the emerging disciplines of Lean IT. Steve is also a co-author of "Lean IT: Enabling and Sustaining your Lean Transformation," which was a Shingo Prize recipient. Steve, I would like to welcome you. And trying to catch up with you to schedule the podcast, it would seem the Lean IT world is extremely busy at the moment. Defining Lean IT with Steve Bell Copyright Business901
  • 3. Business901 Podcast Transcription Implementing Lean Marketing Systems Steve Bell: It is very busy, Joe. I appreciate you having me on the show. Suddenly, in the last few years, there's been an awful lot of attention turned to IT and the IT capabilities, driving strategy and helping companies connect with their customers. Joe: Lean IT touches so many areas. To steal a GE term, the information world seems to be boundaryless. Can you briefly describe what you consider Lean IT? Steve: In my previous book, Joe, "Lean IT," I described the inward and outward-facing dimensions of Lean IT. The inward-facing dimension is primarily operational excellence of the IT organization itself. That really falls in three categories: one, the provision of IT services, such as servers, storage, security and such, to help the business run; application development, where I focused on the agile software development, which is the rapid learning and delivery of innovative software applications; and then Lean project management, because oftentimes the IT organization is tasked with being the project-management center of expertise for the organization. So what the inward-facing dimension of Lean IT does is help the IT organization achieve operational excellence to serve the enterprise, because after all, in most cases, IT is a support organization of the enterprise. That brings us to the outward-facing dimension, which is the real purpose of the business, which is to add value to its customers. In that role, IT can help provide applications, self-serviced applications, to engage the customer-particularly nowadays, we're seeing many, many mobile applications-helping customers interact with the company directly, as well as IT capabilities that are being built into practically every product and service an enterprise delivers to its customers these days. IT capabilities have really become integral to the way an organization interacts with the customer to improve the customer experience. Defining Lean IT with Steve Bell Copyright Business901
  • 4. Business901 Podcast Transcription Implementing Lean Marketing Systems Joe: I think I read somewhere, that 60 percent of products now have a smart feature to it. So, really, information technology affects 60-70 percent of the products, let alone the internal working. Steve: That's true. In addition, even those products that don't have a technology capability built in, many savvy companies are now finding ways, through websites and mobile interfaces and self-service customer interfaces, to help the customer find and purchase and use their products and services more effectively. In some cases, it's the service aspect through the Internet that will often differentiate a company's product or service more than the product itself. Joe: I think that goes back to something I talk about a lot, Service-Dominant LogicTM, where your product or service has little value; it's enabling the use of it. I think that IT plays a huge role in enabling the use of the product, from what you just said there? Steve: Exactly, exactly. In fact, there are some very forward-looking companies that are starting to explore the boundaries of social media, beyond the personal aspects of social media, what we might be commonly seeing as Facebook or Twitter. We're starting to look at how we can monitor sentiments, how we can monitor communications that are going out across the Internet, what are people saying about our products, what are people saying about our competitors' products. Through the volumes of data that are now passing across the Internet every second, much of it publicly accessible, what can we gather about customer and prospect behaviors, both considering a particular product or how they're using a particular product, more and more nowadays, these technology-enabled products that you're speaking of, Joe--say a refrigerator, for example. The more that refrigerators and power meters and other devices are hooked to the grid, are hooked to the Internet, we'll be able to begin monitoring usage patterns and not only provide higher-value Defining Lean IT with Steve Bell Copyright Business901
  • 5. Business901 Podcast Transcription Implementing Lean Marketing Systems products and services to our customers, but we'll be able to monitor how our customers are actually using these products and, in doing so, gain insights into how to help them add more value in the future through creative product design. Joe: Why does Lean IT matter? Do I want to Lean IT? How does Lean and IT work together? Steve: It's interesting. If you're a very large traditional company and you're looking at many of the web upstarts--say, for example, you might look at an Amazon or you might look at a Google--and you say, "Well, how are these companies able to move so quickly and disrupt so many markets?" Well, the answer is that these companies, these new web upstarts, are very creative, they're very fast-moving, they're very innovative, and they’re often well-funded. They often don't have a lot of baggage. What most large traditional enterprises have is a great deal of baggage, much of it in terms of old, outdated processors, but also much of it in terms of old and outdated legacy systems and legacy architecture. So one of the first things Lean IT does is to look inside the organization and its processes and its information systems and look for waste. The common wastes within Lean definitely have their metaphors within the Lean IT world, such as excess applications and bad data and redundancy and so forth, and there's an awful lot of that within the world of IT. If you look at how many larger organizations spend their money on IT, they will tell you that upwards of 70, 80, even 90 percent in some cases, are spent just on keeping the lights on, keeping the servers running and keeping the applications humming. If you're spending 80 percent on keeping the lights on, that only leaves 20 percent of your IT budget on an annual basis to fund growth and innovation. When you're competing with many of these very agile, very fast web startups that are trying to disrupt your industry, many CIOs in many larger organizations are now Defining Lean IT with Steve Bell Copyright Business901
  • 6. Business901 Podcast Transcription Implementing Lean Marketing Systems looking to see what they can do to promote innovation, to speed the innovative edge that IT can offer them. You don't do this by cutting costs or cutting heads, or oftentimes outsourcing services. What you do is the same approach you would do in any other industry, where you apply Lean. You get your teams of people together. You map out your value streams. You figure out where the waste is. And then, incrementally, you remove that waste, and what you end up achieving is a degree of operational excellence on the operations side of IT, which frees up the creativity to drive the growth and innovation for the company, which is what the people in the C-suite want for IT. Joe: IT is very knowledge-based. Is that easy to map? Can you lay out that current state and build a future state easily, or is it pretty difficult? Steve: That's a very insightful question. There are really two dimensions of Lean IT. I'm not talking the outward and the inward-facing; I'm talking about in relationship to knowledge. There's a metaphor that goes back to the production world, the manufacturing world. When we talk about Lean, we typically, in our minds, have Lean manufacturing or Lean production in our heads, which is about operational excellence and which is about efficiency. There's another very important aspect of Lean, and that is Lean product development. In the world of manufacturing, Toyota, for example, has a very well-refined product-development organization, many others as well. I could point to 3M and Google and others that are very innovative organizations. They practice Lean principles as well, but the focus isn't so much on operational excellence and efficiency as creating rapid cycles of learning and discovery. That's the real key, when you talk about IT and the world of innovation, when you try to have IT drive innovation, is you're directly trying to find the areas of uncertainty. You're looking for Defining Lean IT with Steve Bell Copyright Business901
  • 7. Business901 Podcast Transcription Implementing Lean Marketing Systems the mysteries. You're looking for the unknowns. Which is why there's such a thriving venture-capital market in the Silicon Valley, for example, because you've got that whole region of the country focused on asking new questions and uncovering those uncertainties and driving new products and services and even business models. The question for many traditional IT organizations is, how do we take what is typically a fairly risk-averse organization--the typical IT organization has very strict budgeting and governance mechanisms to manage risk and to manage project costs and all of that--and how do we maintain the safety and the security of our IT operations while, at the same time, encouraging and promoting innovation? This means taking risks, taking calculated risks. The part of Lean IT that the agile software development world has tapped into so successfully over the last 10 or 20 years is how to apply those Lean principles in the area of development. Now, overall, Lean IT has to bring the development and the operations people together, because it's not sufficient just to write and deploy a new, innovative application. You actually have to deliver it to the customers, and they actually have to adopt it and use it successfully. You really have to look at it as an entire value stream, from the time someone has an idea until the time that idea's actually deployed and measurably adding value in the field. It's that cycle of learning and development. The faster you can make that cycle of development and learning, the more innovative you can be. Joe: To me, that seems like the cool side, the design side, the innovation side. 80 percent of it, maybe as much, is the standard work, The regular work that IT does. Is that a good way to put it, the standard work? Defining Lean IT with Steve Bell Copyright Business901
  • 8. Business901 Podcast Transcription Implementing Lean Marketing Systems Steve: Well, exactly. There has been so much emphasis in the last few years on cloud computing and service-oriented architecture and outsourcing, and what companies are trying to do are gain scale efficiencies on the operational side of IT. These are the highly engineered activities that can and should be standardized. And this is the area where the IT services management community has been focused for so many years, in the IT Infrastructure Library, the ITIL, certification, the framework for operations of IT. And the basic framework is, how do you manage IT operations to drive out variations, drive out risk, to improve quality, reliability, and consistency? What I see many companies do, however, is that same thing that many manufacturing companies tried to do years ago, which is thinking that we can reduce our risk and improve our quality and reduce our cost by outsourcing these things. Many manufacturers outsourced some basic capabilities to Asia and to Latin America over the past few decades. Now we're learning that in many cases, since we were not looking at total cost of ownership, we weren't looking at the total package of services and cycle time, turnaround time, that there were many hidden costs and there were many detriments to the long term health of our enterprise by farming out some of these core capabilities. Now we're starting to see the on-shoring trend turning around in the manufacturing world. I predict that we'll see this same sort of trend in IT because, basically, even if you can make an economic argument to outsource basic infrastructure or basic IT services the first thing you need to do is clean up your house. Standardize your services, catalog your services, figure out what it is you're doing and how because if you hand an outsourcer a non-standard process that's not running well and not documented well you will pay for them to sort it out and you will most likely end up with their best practices rather than your own. In the long run, that may not be in your enterprises best interest. Defining Lean IT with Steve Bell Copyright Business901
  • 9. Business901 Podcast Transcription Implementing Lean Marketing Systems So the focus on standard work in the Lean world is to get your teams together, define the work, document it, and do it consistently, over and over again. Joe: Does it help to be practicing Lean in other areas to start practicing Lean IT? Steve: That's an interesting question. I have a new book coming out here in just a few months. Dan Jones who was co-author with Jim Womack of "Lean Thinking" and a couple of other books really has helped define the practice of Lean. He's the forward author for this new book of mine. Dan and I spent quite a bit of time talking about Lean in the context not just of IT but in the context of other industries. What Dan had to say about this was fascinating. He said he's seen, over the last 20 years or so, Lean has moved well beyond manufacturing. It's moved into healthcare and financial services and transportation and retail and distribution. Every time Lean moves into a new area, a new domain, a new industry sector, it manifests slightly differently. The Lean you would see in a hospital looks different in many ways than the Lean you would see in a manufacturing floor or a retail environment. But when you get right down to it the principles of Lean are the same. It's about collaborative learning. It's about speed. It's about quality. It's about waste reduction. Those basic principles are the same. What he has concluded and what I have concluded is you need to create a framework for the people who are actually doing the work to come together, figure out what the work is to be done. Where's the value? Where's the waste? Iteratively, through experiments, find ways to do it better and better. Each time you learn. You go through a cycle of learning. You improve the process and at the same time you understand more about the subtleties about the process and that's where the paradox of Lean Defining Lean IT with Steve Bell Copyright Business901
  • 10. Business901 Podcast Transcription Implementing Lean Marketing Systems emerges. As you're standardizing something you're also gaining insights into it which leads to creativity and innovation. Many people react to standard work thinking that you're just turning people into robots. What you're actually doing is you're helping people, removing the drudgery and the repetitiveness from the work, making the work flow more smoothly and quickly, which frees up peoples valuable time and energy to figure out ways to do the work better and to do new kinds of work. I think that's the real magic of Lean whether it's in IT or any other industry. When you see a team really get it and start to think and act like a team with a focus on the customer and they own the product, they own the process, they own their relationship with the customer, then the role of management isn't so much a directive role or a controlling role but the role of management is to help remove the obstacles in the teams way. That's when you have high performance, self-directing teams that really start to energize the company. When that happens that's where the momentum comes from. Joe: You mentioned a couple of things there. It doesn't sound like it's just about the internal customer it's also about how the organization affects the external customer. With social media and everything, how does that affect IT departments out there? That's got to be tough from a security standpoint. Steve: It certainly is disruptive. If you look at several of the very major disruptive trends that enterprise IT organizations have had to learn to grapple with just in the last five years that would include not just the emergence but the rapid adoption of cloud computing, the emergence of social media, the emergence of big data analysis. Suddenly, just in the last year, the statistics show that the usage of mobile computing is now in many cases, browsing on mobile devices has exceeded browsing on ordinary web browsers. So mobility has taken off like a rocket-ship. Defining Lean IT with Steve Bell Copyright Business901
  • 11. Business901 Podcast Transcription Implementing Lean Marketing Systems What that means is that no matter what your business, no matter who your customer is, you can count on them being better informed than you. When the time comes when someone is in the field ready to make a purchase decision, or use your product or service, or needs help using your product or service, being able to connect with them in real time through various channels, not just email, not just instant messaging, not just chat, but starting to use some of these other systems of engagement, from an enterprise point of view, to help improve the customer experience is where we feel a lot of companies investing a lot of effort in research and development right now. Not that they're there but that they know that this is important for them to experiment with because whoever gets the high ground of an improved customer experience is going to attract this whole new market. What does that do for enterprise IT in terms of security, in terms of storage management, in terms of integrating these little 99 cent apps with SAP on the back end? Well, that's a challenge. That's part of where the agility of Lean IT, not just on the application development and application integration and business intelligence but the overall architecture, the overall integration end to end and all the way down the technology stack, all the way down to servers and storage and security, really the whole IT organization needs to be agile and responsive. That's where I see the direction of Lean IT going. It's taking a lot of the lessons that the agile software development community has learned over the years and applying it to the larger scale value streams of the overall enterprise, not only the technology value streams all the way down the technology stack but the enterprise-wide value streams that actually do touch the end customer. I believe we all see now that in many cases competitive advantage, despite what Nick Carr might have said years ago with his book "Does IT Matter?". It does matter. It matters in the Defining Lean IT with Steve Bell Copyright Business901
  • 12. Business901 Podcast Transcription Implementing Lean Marketing Systems hands of the consumers who are looking to have a fast, base, and satisfying customer experience as they interface with us and they use our products and services. Joe: Can you be real loosey-goosey in one area, let's say, and then very controlled in another? Is it possible for IT to think that way? Steve: That's an interesting question. I'll have to reflect on that for a minute. The pace of change is very rapid right now. Not a month goes by, I think, that every one of us doesn't see or hear of some new product or service or company and suddenly you raise an eyebrow and you say "Wow, I never thought of that before." The next thing you know you've downloaded it and you're using it and you expect it to work. You expect it to work flawlessly. I think one of the most significant things that have happened to us in the last five years is our threshold for adoption is virtually instantaneous. That's when we talked about the consumerization of IT. That's what we mean. Can we expect that something that we can download in five minutes for 99 cents on our iPad to actually work and integrate with the back end of the enterprise and be a part of the flow of those enterprise-wide processes right away? I think that is an unrealistic expectation. But at the same time, enterprise IT organizations need to find a better balance of security and control and integration to be able to do that. I can tell you right now that there are some real challenges out there. It's not that enterprise IT folks aren't trying, it's just that many of these architectures and these integration infrastructures that have been put in place surrounding some of these legacy systems for the last 10 or 20 years are really being stretched, they're really being pushed. I think we're looking, over the next 10 or 20 years, at a transition. Technology futurist Geoffrey Moore talks about the Defining Lean IT with Steve Bell Copyright Business901
  • 13. Business901 Podcast Transcription Implementing Lean Marketing Systems transition from transactional systems, systems like ERP systems, the systems of engagement, and he says it's going to take a decade for organizations who's whole businesses are on ERP systems, like SAP and Oracle and others, to truly integrate these social media and social engagement tools smoothly into the flow of the work that we do. But I do believe that's the direction that we're going. To answer your question, it's going to be a very fine balance and a constantly shifting balance between control and flexibility. Joe: Is that one of the reasons that nobody likes the IT department? "Oh, I've got to get IT involved." Steve: Well, you know, that's a really good point. Just in the last two years I've heard many people say that now my IT at home, my Sunday night IT, is much better than my Monday morning IT. I've got a newer computer. I've got a faster connection. I don't have so many restrictions. I can get more work done at home on Sunday night than when I go into work on Monday morning. I think that's partly because of the shifts that the consumeration of technology. We do have access to better, faster, cheaper, easier to use technologies from a consumer perspective than we do from a business perspective. I'm going to put my Lean thinking cap on and encourage people to remember that from a Lean perspective sub-optimization does not always add value to the customer. What I mean by that is that any particular person can do their task or has a more satisfying individual experience with you and your computer and your smartphone but if you are creating hurdles you are creating additional fragmentation of systems and data and the flow of that information that's supports the flow of the work across the entire value stream that adds value to the end customer. You may feel like you're getting a better experience but you're actually Defining Lean IT with Steve Bell Copyright Business901
  • 14. Business901 Podcast Transcription Implementing Lean Marketing Systems throwing up additional roadblocks in the delivery of value to the end customer. I'm not saying the consumerization of IT is a good thing or a bad thing but I think we need to keep our Lean hats on and look at the overall value stream and focus on the flow of the overall value stream. I think from an enterprise perspective, that's most important. Joe: I think you hit a nail on the head because I got a whole slew of software and now I got a whole slew of apps on my phone that all were meant to solve my latest problem but it's amazing how little of the problems our relevant a month later or if I'm still using them. Steve: Exactly. Joe: If you looked at that from an organizational perspective I would think that it would create such an extraordinary amount of waste and confusion that you could practically become dysfunctional. Steve: Yes. Absolutely. I know many of your listeners are familiar with value stream mapping but oftentimes there's a bias to focus on the processes, the cycle time and the elapsed time and the quality of the processes and so forth. I like to spend an equal amount of time, once I've mapped the processes out, to look at the underlying information systems. When you map the information systems out and how they support the process, often you'll find twice as many information systems, anywhere from databases and spreadsheets, and even the little sticky notes on a person's monitor, in one way of thinking, is an information system, because it provides information to facilitate the flow of the process. You map those information systems out on a value stream map, you'll see enormous anarchy, enormous, chaotic flow of information, with gaps and cracks and hand-offs, where Defining Lean IT with Steve Bell Copyright Business901
  • 15. Business901 Podcast Transcription Implementing Lean Marketing Systems three people are involved in the same process and everyone has information that disagrees with the others. That sort of fragmentation, from an information point of view, is not helping the flow of work. It may seem like its helping each individual do their task, but in the end, it's cluttering up the flow of work. The only way to see that, the only way to identify that waste is to get all of the stakeholders of the whole value stream in a room together and figure it out. The moment you do, it's been my experience most of the time, anyhow, that every individual sort of loosens their grip on their own individual productivity-enhancement tools in favor of improving the flow of the overall process. But you have to bring the team together and get that insight if that's going to happen. Joe: I think that's a huge factor, because I can see that, especially from my experience in sales and marketing, when you sit there and take a value stream of a customer and you look at a customer-journey map, per se, and then you look at the processes behind that. You go backstage. We can all identify the audience. From a theater perspective, you can identify the audience and the on-stage performances, the sales and stuff. When you go backstage how that salesman is supported there's huge gaps there. Steve: Absolutely. Absolutely. I made a presentation about three weeks ago at the annual Lean Enterprise Institute's Transformation Summit in Florida, and the subject of my talk was the virtual voice of the customer, and the emphasis of that presentation was on the customer experience. A point I made during the presentation was, how often do you really go together? How often do you really go to the customer, watch how the customer interacts with you? When they put a call into your service desk or your help desk, how many times do they have to call back? How many times do they have to leave a message? How many times do they have to tell the same story, over and Defining Lean IT with Steve Bell Copyright Business901
  • 16. Business901 Podcast Transcription Implementing Lean Marketing Systems over and over again, for example? Do you even know your customers have to go through that? From your point of view, you may not see what it's like to be someone who is doing business with you. So you've got to get up, you've got to go out there and make an active effort to walk a mile in their shoes, as the old saying goes, and understand what the customer experience is in doing business with you. When you do that, it's not easy. It takes time. It takes effort. But when you truly walk a mile in your customer's shoes that is where the insights come. That's where the creativity and the ideas come in, saying, "Boy, if we could only do this, if we could only make it easier for the customer to do this?" Those are the things that matter to your customers. When they know you're listening, when they know you're paying attention to the little things that matter, that's when loyalty occurs. And a lot of these things that we're talking about making life easier for the customer to do business with you, in this day and age, a lot of them have to do with some sort of a technology experience, on a mobile phone or a browser or even just an automated voice-response system on a computer that's talking to a back-end database somewhere. The customer experience is very much, these days, a technology experience. Joe: I think you have a great point. Is there a way I can listen to that presentation? Was that recorded? Steve: Well, if you would go to Lean Enterprise Institute, www.Lean.org, and I believe that those videos are there. I believe there's a fee to sign up, but you can have access to all of the videos from all of the presentations from the summit. It was a great summit. I'm sorry I don't know what the fee is, but I would say it would be well worth it, especially if someone from a company were to sign up and have multiple viewings of it. I think there would be a lot of value in that. Defining Lean IT with Steve Bell Copyright Business901
  • 17. Business901 Podcast Transcription Implementing Lean Marketing Systems Joe: There seems to be so much intangible value surrounding IT. How do you measure? How do you know your IT department's doing a good job? Steve: Oh, goodness. That is the million-dollar question. The traditional measures of IT, particularly on the operations side, such as uptime and server response time and things like that, having to do with the mechanics of deploying IT; they're important from an operational point of view, in order to ensure that you're delivering those services consistently, high quality, reliability, low cost. But the real key to measuring IT value is, "are you enabling the business to do business better, faster, more friendly with the customer?" Ultimately, when you're deploying technologies into the field, self-service applications or mobile applications or online order-entry applications, what are you doing to help improve the customer experience, to make you an easier, better, faster, cheaper company to do business with? If you can tie those measures of business outcomes back, at least indirectly, to the activity of the IT organization, then you're really getting somewhere. Now, the only way you can do that is when the folks in the IT organization are on the same value stream teams as the businesspeople who are delivering value to the customers. I often like to ask this question. When is the last time you had a Kaizen, a continuous-improvement event, in your business, and you had an IT person, a person from the IT organization, in that Kaizen event from start to finish? You didn't just bring them in at the end and hand them the, quote, "solution," whatever it is they're supposed to deliver to you. You had them there from the very beginning, from problem identification, problem-solving, so you could gain their understanding and their insights of what are technologies or what are challenges that the businesspeople may not have a sense for, that the IT folks, if they were in that room from the very start, you could have a whole new set of insights into the problem-solving process. Defining Lean IT with Steve Bell Copyright Business901
  • 18. Business901 Podcast Transcription Implementing Lean Marketing Systems Most often people will say, "Well, our IT folks are too busy. They're too busy fixing things. They're too busy responding or reacting to things." I would say one of the very best measures, one of the very best leading indicators of IT performance, is how much of IT's time is spent in proactive versus reactive behavior? How much of their daily activity is planned versus unplanned? Because I believe the more you can engage IT in helping run the business better, the less reactive, firefighting behavior you'll see out of the IT organization. That's when the real creativity and the innovation kicks in. But in order to free up their time, in order to do that, the first thing you've got to do is they've got to clean up their own backyard. And that's where the operational-excellence aspect of IT comes in, where you're focused on reliability, consistency, quality, performance. Joe: There's a conference that you're a big part of, in September, I believe. When is that, and what would I learn by attending it? Steve: First-annual Lean IT Summit. It is happening in Orlando, September 10th and 11th, and then I'll actually be presenting a full-day Lean IT workshop on the 12th. And then the 13th and 14th, at the same venue, is the Lean Accounting Summit, put on by the same organizers. So my workshop is actually sandwiched between the Lean IT Summit and the Lean Accounting Summit, and I believe there's quite a bit of crossover between those two audiences. Lean Enterprise Institute is the sponsor of this event. It is going to have a great lineup of speakers. You could go on the web to Leanitsummit.com. The keynoter, kicking off the first day, is Mike Rother. Rother and Shook wrote "Learning to See" years ago. Mike has written a book that has resonated very strongly with the IT community, called "Toyota Kata," which I really think had a lot of lessons for Lean and IT. Defining Lean IT with Steve Bell Copyright Business901
  • 19. Business901 Podcast Transcription Implementing Lean Marketing Systems We've got several other keynotes. One in particular I want to mention is Mark Striebeck, who is a chief engineer at Google. He's the product owner for the whole Gmail product at Google, and he'll have some very interesting insights about Lean principles and practices that are just baked into the DNA at Google. We're going to have folks from the agile software community and the IT services management community and IT architecture, and it's going to be a fabulous two-day overview of all of the participants in the IT community and what they have to do with Lean. Joe: Your new book will be out just about that time, too. You'll introduce that at your workshop? Steve: Absolutely. In fact, right now it's slated to ship about the time of the workshop. My newest book, my third book, the name of it is "Run, Grow, Transform: Integrating Business and Lean IT." And basically, the emphasis of this book is how we improve IT operational excellence so we can shift more of our effort and our investment into things that help the business grow and help the business innovate. Now, as I mentioned earlier, I am very fortunate to have had Dan Jones collaborate with me on this and write a foreword for the book. I also have a number of co-authors, who have each helped me with the content of this book and have contributed their own chapters. What I basically have done is, with this book, I establish the premise that there is no such thing as IT. IT isn't an entity. IT is really a community. It is a community of practitioners with various disciplines. What I've brought together are thought leaders, representing many of these disciplines, together, to look at IT as an integrated whole. Let me just go down the list: Charles Betz, enterprise architect, author; Troy DuMoulin, from the IT services-management community, also an author; Paul Harmon and Sandra Foster, from the business process management community; Mary Poppendieck, a well-known thought leader in Defining Lean IT with Steve Bell Copyright Business901
  • 20. Business901 Podcast Transcription Implementing Lean Marketing Systems the agile software development community; and John Schmidt, who is an author of a book called "Lean Integration" and an expert in Lean data management and integration. Each of these has not only helped me thread together my own material and my own chapters, but each of them has also contributed a chapter in their own area of expertise. What I've hoped to accomplish with this book is to treat IT as a community of practitioners, and a community of practitioners that has to join hands with the business colleagues that they work hand-in-hand with, in order to create the IT-enabled value streams that add value to the end customer. After all, that's the whole point, that is the reason an enterprise exists. Joe: That's scary. I recognize all the names. Steve: It's a great lineup, and I am so grateful to have all of their effort and their participation. Joe: Steve, if someone would like to get a hold of you, what's the best way? Steve: Well, the best way to reach me would be through my website, which is www.Leanitstrategies.com. I also invite you to visit me on my LinkedIn site: you can find me with Lean IT Strategies through Steve Bell. And I'm on Twitter at @LeanITCoach. Joe: I'd like to thank you very much. It was a very insightful conversation. The podcast will be available on the Business901 website and also the Business901 iTunes store. So thanks again, Steve. Steve: Thank you for having me, Joe. Defining Lean IT with Steve Bell Copyright Business901
  • 21. Business901 Podcast Transcription Implementing Lean Marketing Systems Joseph T. Dager Implementer of Lean Marketing Systems Ph: 260-438-0411 Fax: 260-818-2022 Email: jtdager@business901.com Web/Blog: http://www.business901.com Twitter: @business901 What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R. Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt, Business901 provides and implements marketing, project and performance planning methodologies in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan. An example of how we may work: Business901 could start with a consulting style utilizing an individual from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop, Business901 moves into a coach’s role supporting the process as needed. The goal of implementing a system is that the processes will become a habit and not an event. Business901 Podcast Opportunity Expert Status Defining Lean IT with Steve Bell Copyright Business901