Improving organizational leanness

Lean is not a natural state for most organizations

Few organizations can truely be defined as lean. They have no real incentive to be. Most organizations, when left to their own devices, tend to grow and focus on justifying their own existence. Any organizational structure, whether public or private, if left unchecked, will try to increase its reach or at least maintain its existence and current size and position. Very few organizations, if any, will move towards lean by themselves.

Tools for “leanness” exist but are not adequately used

I’m leaving the political dimension, which is an integral aspect of government, out of scope. In order to create a ‘lean government’, or better, a ‘lean administration’, it needs to be continuously challenged as to its continued relevance and existence.
The good news? The essential tool to achieve this exists and has been accepted as relevant by most if not all administrations: the management agreement (Dutch: beheersovereenkomst) between the political level and the administration.
The bad news? The tool is not adequately used to steer an administration towards its optimal size and structure for its current responsibilities, or a lean administration.

Six aspects to enhance an administration’s leanness

I would like to suggest six aspects which need to be appropriately incorporated in the management agreement in order to have the administration which is governed by this management agreement evolve towards a lean structure.

• The responsibilities attributed to the administration should be limited in time, at a maximum for the entire duration of the management agreement.As such, the activities of the administration and thus its useful life do not extend beyond the duration of its key roles and responsibilities. These roles and responsibilities would need to be re-examined, re-evaluated and re-affirmed if they are to be extended beyond the duration of the management agreement. The time constraint introduces a first constraint against unchecked growth, and introduces the concept of re-evaluation of the area in which the administration is active;
• The activities of the administration need to be focused on a set of very specific and defined SMART results or outputs. This allows for an objective and prior established, mutually agreed upon basis of evaluation. If and when the results have been reached, everyone will be aware. If they cannot be reached, it should be easy to evaluate why and what needs to be done to reach these, if still relevant. If the organization understands what it is all about, unchecked and unfocused growth will be readily identified and can be appropriately dealt with;
• Each output, each SMART result needs to be regularly revisited and questioned as to its continued relevance. We are living in a changing world, with changing priorities and goals, and what was relevant today may no longer be relevant tomorrow. We need to dare question the relevance of the targets we strive for in light of an evolving situation. If an output we work towards no longer makes sense, we need to dare abandon it. Allowing outputs, goals and objectives to adapt to a changing reality allows for a quick refocusing, reducing the tendency for organizational bloat;
• The right resources need to be attributed to the right activities in order to attain the reaffirmed goals. If the administration does not have the correct capabilities, it will not be able to achieve its stated objectives. Worse, if an administration has resources which have no value in contributing to its purpose, it is carrying or dragging along dead weight. Making sure everyone is not only on-message but able and capable to execute will reduce the tendency for unchecked organizational growth with irrelevant resources which cost money without adding value;
• Each output needs to be defined in terms of added value and required means, which in turn need to be translated into real costs. Whatever the benefit of the envisioned output, whether defined in a quantitative or a qualitative manner, it needs to be included in an adequately detailed cost-benefits analysis. In case the benefits do not outweigh the costs, the activities aimed at producing the output need to be stopped, re-examined and if required, completely redefined or abandoned, in order to allow for a lean organization;
• In order to effectively manage this continuous refocusing and repurposing process, the administration needs to identify the key risks threatening its leanness. These risks, as well as the possible occurrence of new risks or the irrelevance of past important risks needs to be monitored. If there are no risk metrics, there is no real way to define whether or not the achievement of lean is under threat;

However, in order to achieve this, the organization needs to be at an adequate level of maturity. Is this achievable? I believe it is for any organization that is ready to examine its purpose and repurpose where necessary and possible.