Question: Can Lean or Six Sigma help reduce complexity in service organization?

Our firm provides back-end support to several medium sized and larger companies. From finance to supply chain to transcription and HR process... and other 1-off processes for corporate clients, we provide transactional support in many different areas.

Due to spiraling operational complexity, our initial strategy of having a dedicated team per client is not working in the face of growth and intense price competition.

We are thinking of creating our own back-end to centralize similar processes across clients, and have leaner client facing teams. The aim is to improve quality and margins at the same time.

Is there a framework we can use for this reconfiguration? Can Lean/ Six Sigma or similar methods help us in making this leap?

2 Expert Insights

I personally am not a big fan of Lean/Six Sigma for service organizations - I think that it's been stretched too much to make it adapt to too many different scenarios.  However, the structure that you describe - one team per client - doesn't seem like it may be the best use of your resources as I would think there is too much redundancy which is why I am guessing you are thinking about "leaning" things down.

Although there may be pieces of Lean/Six Sigma that might be applicable, I think you are looking at a reorganization because of what you have described above as your desired state (back-end centralized processes with "more focused / leaner" front end teams).  

One piece of advice - be sure to look for the synergies between teams/groups, e.g., industry segments, to take advantage of knowledge of the segment and similar processes so you aren't having to duplicate more processes because of disparate groups working with each other.  When I worked for a Fortune 100 more than a few years ago, they had their "platinum group" which took care of their top 50 customers, and everyone else was divided by market segments and regions.   There was good synergy in this type of structure, and I would guess that this might work for you.    

Re-organizing your team structure only makes sense as part of a larger effort at process improvement. Most organizations build functional silos - nothing wrong with that, and lots of very good reasons to do so. Then there are the processes that focus on your customers, and these generally move through your functions.

Now here's the thing: re-organizing your functions only moves the employees who are doing the process work from one silo to another. Re-organization does not change the flow of the process to the customer. Thus, if your goal is to reduce complexity, then a process-focused approach is much more likely to result in increased efficiency as well as effectiveness.

The process analysis techniques are standard; and yes, they are part of the set of tools and techniques of Lean and Six Sigma. But don't be biased against the tools for that reason. They are good, solid techniques -- Value Stream mapping, functional deployment charts, and the like -- and they generally create some significant "ah-ha's" among the people involved in the process when they understand the waste and unneeded complexity of a process that may have made good sense when it was first designed. Frequently this leads to waste removal (stopping the unneeded tasks); and sometimes indicates the need to make modification to the functional silos (re-organizing). Together, it's a powerful combination.