Kaizen and the art of subtle change

Fonterra is one of the companies making use of Kaizen. Photo / Greg Bowker

It's easy to imagine Kingi Wetere wiping his brow when he recalls how he got a complete reorganisation of the Open Wananga's enrolment process past staff without a whimper of complaint.

In normal circumstances, Wetere says, he could have expected mutiny. But thanks to his discovery of the Japanese Kaizen approach to business processes, rank and file staff members drove the changes with no need for a big stick.

"We have made massive changes based on where we were 12 months ago," says Wetere. "The beauty of it is the staff did the reviews and made the changes themselves. It saved me a lot of headaches," he says with a laugh reminiscent of the comedian Billy T. James.

Kaizen is the Japanese word for improvement. More importantly it's the philosophy behind the manufacturing and business processes that propelled Japan from near destruction at the end of World War II to economic powerhouse.

The idea is that continuous improvement helps business and manufacturing processes and that requires daily activity. Employees learn through Kaizen to analyse and perform experiments on their work and to eliminate waste in the business process.

"Typically, Kaizen managers are coaches to unlock and harness the creative potential and brainpower of their own real experts - their own employees," says Danie Vermeulen, chief executive of the Kaizen Institute NZ.

The approach has a growing following in this country with organisations such as Fonterra, Rinai, Zespri and the Canterbury District Health Board having used Kaizen philosophies.

The BNZ has the equivalent of 15 full-time staff working in its Kaizen team.

The Kaizen way has become internationally famous at the pen of "lean guru" Masaaki Imai, author of Kaizen: The Key to Japan's Competitive Success, who flies in next week to meet the Kaizen Institute and key clients.

Among those lined up to meet Imai is Wetere who became a disciple by chance while making a courtesy visit to the Open Polytechnic in Wellington where he was captivated by the institute's new enrolment process.

"They had re-engineered their whole enrolment process and had set up a new facility to manage the process around enrolment," says Wetere.

"What really impressed me was their philosophical approach to quality and in particular about eliminating waste," he adds. There were financial benefits, but he was especially impressed at the processes of how people worked together.

Coincidentally Wetere was reviewing his own wananga's administration and enrolment processes and promptly engaged the services of the Kaizen Institute to train management and staff in the principles.

Changes in the wananga's processes were quite simple, such as scanning enrolment forms at the beginning of the process, not the end, but have had a profound effect on efficiency, says Wetere, who visited Japan to see Kaizen in action there. The wananga staff combined three teams into one with each employee able to do the other's jobs and changed the sequence of dealing with paperwork involved in the enrolment process. Wetere has plans to use the approach in other areas of the organisation.

Unlike the wananga, the BNZ hasn't implemented Kaizen to any specific large-scale project. Instead the Kaizen way is becoming part of the business culture and is used to initiate large numbers of small-scale changes designed to make the bank more efficient and the customer experience better, says Richard Davis, head of Kaizen at the bank.

As well as capability, the bank also views Kaizen as part of the organisational culture.

"We use Kaizen because it puts the customer at the centre of everything we do. We are developing faster, smarter and simpler processes, which creates the capacity to grow," says Davis.

"It's the little things, rather than 'fix the lending'."

In a recent trip to the United States Davis visited a number of organisations such as Boeing and the Seattle Children's Hospital that had used Kaizen principles successfully and was particularly impressed with their "absolute dedication to the customer".

Like Japanese companies that encourage staff to propose ideas continuously for improvement, the BNZ has set up a Thoughts into Action team that captures feedback from staff - in particular front line staff who deal with customers.

More than 22,000 suggestions have been recorded since it began in 2006 and more than 20 per cent of them implemented, says Davis.

One of the many Kaizen success stories at the BNZ was the transformation of the BNZ partners' account management services department, which processes tasks for business, agribusiness and private banking clients.

A key component of the process was a change in mindset that enabled the team to challenge the way it operated continuously, says Davis.

Staff members were encouraged to join a "value stream map exercise" to determine what was not working and how to fix it. Instead of feeling threatened by change the BNZ staff using the Kaizen approach realised they were the ones who had the ability to drive the changes, says Davis.

Some of the many changes that resulted from this exercises included combining two teams that provided sometimes duplicated processes, giving staff dual screens to improve on process times and wireless headsets to enable multitasking.

The result was an increase in capacity by 1200 hours a month, a jump in service levels and productivity by 40 per cent and staff satisfaction improving by 25 per cent.

One notable cost saving for both the BNZ and the wananga was that they planned change from within, rather than employing expensive consultants.

This is not unusual. Kaizen organisations typically need to use fewer consultant hours - turning instead to their own employees, says Vermeulen.

"Instead, organisations have to interpret and apply relevant methods [and] techniques, and equip their workforce to do it continuously for themselves."

It's Imai's first visit to New Zealand since the 1980s when he lectured here with Toyota legend Taiichi Ohno.

This time Imai will be visiting key clients and holding a public seminar in Auckland. The event is on March 3, at the Waipuna Conference Centre in Mt Wellington.