Lightbulb Moments with Gary Critchley, Head of Finance and Accounting Shared Services/SCM, Marks & Spencer

Gary Critchley
Posted: 07/09/2012

Thomas Edison famously noted, "Genius is one percent inspiration and ninety-nine percent perspiration". So, taking the inventor of the light bulb at his word, where do you focus your 99% of effort to liberate the 1% of genius within your organization? How do you balance the investment in process innovation versus the need to be efficient and how do you achieve tangible benefits that stick?

Well, back to Mr. Edison who had some more words of wisdom: "Being busy does not always mean real work. The object of all work is production or accomplishment, and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing."
So we know a spark of inspiration is needed, a focused work ethic, systematic planning and measurable outputs. The spark of inspiration is the easiest element of the innovation process to deliver. Your teams will be bulging with bright people waiting to offer solutions to problems you didn’t know existed. They will have the insight and passion (often driven by frustration) to identify solve and drive resolution. The trick is creating an environment where their peers and managers are "change-positive" and where ideas are welcomed and nurtured.
To create a change-positive environment, physically creating the space to think and innovate is important. At Marks & Spencer, we developed the concept of an idea lab—a free space (no desks, chairs or usual furniture). This is a light room with white walls, white boards, brown paper and bean bags; a blank canvas; a room of air, light and comfort. A key element of this space is ownership. It started with the old dusty training center being donated to a team keen on innovation. They developed the space and the democracy of ideas began.
Having developed the space for innovation, and built the capability, the next step is to have a plan (foresight for Edison). Developing a monthly routine of Lean sessions where lean facilitators can involve a broad set of process owners, non-process players and stakeholders, builds continuity in innovation. A lean workshop usually involves four to five people wit varying skill sets. Process owners are experts in the "as is" process; non-process players are there to offer perspective and should be high energy, change-positive volunteers; and stakeholders can be engaged on a drop in basis but are vital in ensuring end-to-end changes stick.

During the lean cycle, the teams will face significant challenges. For Lean to succeed, team members will need to think creatively and facilitation techniques need to be flexible to prevent innovation gridlock. In a finance environment where linear and logical thinking is ingrained, the use of creative thinking tools helps break down barriers to innovation.

At Marks & Spencer we have used concepts like:

Outrageous Opposites: Traditional solutions are generated followed by outrageous and exact opposites. Options are then evaluated.
Morphological Matrices: Multiple attributes are derived and combined to offer high volumes of ideas which can then be evaluated.
Idea Beam: Multiple general outcomes are outlined and filtered into specific actions, which can then be evaluated.

Governance Criteria – Investment Portfolio

Space, capability, and structure in place, it is important to ensure the time and effort invested in what can be perceived as "non productive" time is measured and controlled. Treating the innovation cycle as an investment program, with a mixed portfolio and a balance of risk and potential returns, helps to maintain perspective. Equally controlling the portfolio of Lean investments made is key to improvement delivery, program momentum and program credibility. Getting quick wins helps build energy but may not work on a pure ROI basis, so having longer-term runners with larger returns will also be important. Having a clear line of sight across your lean investment portfolio and treating the process as a financial investment process with hurdle rates and minimum payback periods will ensure you are not surprised by the cost or effectiveness of your innovation programs.
An example investment portfolio is shown below. In this example the four quadrants show the balance between high risk/high return initiatives (STARS), high return and low risk programs known as pure lean, smaller continuous process improvements and other less glamorous but important control issue projects.

With the foundations for Lean in place, the pace and nature of execution can be varied from Blitz Kaizen where the Lean cycle, evaluation, mapping, redesign and implementation is executed in a week, to longer-term end-to-end process reviews. Lean should be a practical process, which delivers tangible results that stick. To release the one percent of inspiration within your organization, enable broad employee engagement, develop "just enough" knowledge across the center (breadth), and detailed lean knowledge in small pockets (depth) … and create the space to allow these factors to work together. Before implementing Lean, tailor the model to your organization and consider what you would attempt to achieve if you knew you couldn’t fail.

Takeaways

One of the first Lean projects we looked at using a Kaizen workshop was a review of SAP licenses. The overall objective of this Lean Project was to reduce M&S SAP licensing costs and develop a process to monitor SAP usage on an ongoing basis. By identifying low volume users and building new support processes to meet their needs the overall volume of SAP licenses was reduced driving an annual saving of £68,000. In the future a quarterly review will take place to manage and maintain the active SAP population.

What Lean Finance means to M&S

Lean finance is a practical means to getting results at pace. Lean is a philosophy focusing on reduction of waste to improve overall customer value. By eliminating waste, quality is improved and production time and costs are reduced. The goal of Lean is to accelerate the velocity of the process by reducing waste in all its forms. Lean is not simply cost reduction—it is finding a better way to get the work done.

History is often the best reference point for the future. In 1954, Marks & Spencer launched Operation Simplification, a project to streamline internal processes in order to save paper and cut down on unnecessary administration. Building on this proud history of innovation, Marks & Spencer Finance Shared Services center launched a Lean Finance programme in July 2008. We took a practical approach to implementing Lean with a heavy ROI focus. Training is limited to core practical tools with the investment centring on process evaluation and redesign at pace using Blitz Kaizen. In February 2009 the center launched Lean Finance as a packaged solution to its business partners and is currently facilitating a Lean review of the company’s Internal Audit function.


Gary Critchley
Posted: 07/09/2012

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