At LeanTeams, we work with clients in all types of industry and activity. One of the most rewarding types of clients we get to work with are professional service companies such as accountants, legal practices, and architects. These organisations are generally staffed by experienced and trained professionals and there is a great deal of variety in the type and scope of work being undertaken.
A common misconception is that Lean and Continuous Improvement approaches will not be as applicable in this type of work. Our experience is the opposite, because of the relatively high “labour costs” in these types of business using Lean Thinking can bring significant benefits by increasing productivity and efficiency.
A professional service business faces several demands and challenges that must be overcome to enable them to thrive and prosper. Let’s look at these one at a time.
Client Satisfaction
Maintaining high levels of client satisfaction is obviously critical as failure to meet expectations can lead to loss of clients and a negative reputation. One of the things we often come across is that the exact type and nature of service being offered is not clearly defined. This often creates a level confusion between the client and provider which if not managed leads to failure demand dissatisfaction and customer defection.
Talent Retention
Attracting and retaining top talent is a constant challenge for professional service firms. High employee turnover can lead to increased costs, loss of institutional knowledge, and lower quality service. We have come across situations where the work allocation process is based on custom and practice rather than matching customer demand with the best available capacity. This leads to team members becoming overburdened over long periods, eventually leaving the firm.
Project Management
Effective project management is crucial in professional service firms. Issues such as scope creep, resource allocation, and scheduling can result in project delays, cost overruns, overburdened employees, and dissatisfied clients. We have found situations where companies working on client project don’t have effective means to predict when during the project their services will and will not be required. This can be a root cause issue of poor client satisfaction and talent retention.
Pricing and Profitability
Determining appropriate pricing structures can be challenging in professional service companies, as the value of services can be subjective. Obviously, it is important to achieve a balance between competitive pricing and maintaining profitability. Many companies tell us they have two types of clients, good ones, and bad ones! The good clients can provide information that the professional service company can readily respond to. We worked with an accountancy practice where some clients provided an electronic workbook of all the transactions and other provided a load of receipts and invoices in a blue bag, both clients paid the same rate to have their accounts prepared.
Scalability
Many professional service firms struggle with scaling their operations effectively. The challenge lies in maintaining quality service while expanding the business to meet increased demand. We have come across situations where each professional in the business has their own way of working and there’s little or no attempt to standardise what is in effect an identical process. When combined with client-to-client differences this variation can make it difficult to have any standard working times and this in turn impact decisions about planning and pricing. We have seen many situations where teams take a great deal of time to decide when and who will do specific work packages. Often little attention is given to how the work itself can be done in the best or easiest way.
Lean approaches can help a business overcome these challenges and demands. As the business’ core process are standardised and improved the business leadership will have more time to focus on other areas that matter such as Business Development, Technology adoption (Lean makes a big difference with this!), Regulation, Risk Management, and diversifying and creating new revenue streams.
When working with clients, we focus on helping them by applying Lean thinking. The types of issue that working with LeanTeams will enable the services business to address include:
Bottlenecks in Workflow
Lean methodologies such as value stream mapping help identify and eliminate bottlenecks that slow down processes and reduce overall productivity. By analysing and streamlining workflows, the rate at which work gets processed will be increased. This creates the conditions and capacity to serve clients better and serve more clients.
Excess Waiting Time
Lean principles emphasise minimising waiting time between tasks or stages in a process. By reducing waiting time, professional services companies can increase overall productivity and improve customer satisfaction. In a Lean approach, the work of the team will be synchronised. This can mean having a specific time in the day or week to ensure that decisions and work is transferred within the team.
Inefficient Communication
Lean techniques promote clear and effective communication, ensuring that information flows smoothly across teams and departments. This approach can lead to quicker decision-making, increased collaboration, and reduced errors caused by miscommunication. One of the approaches we promote is Daily Management. By holding regular short and disciplined meetings, issues can be dealt with early, and small problems don’t become big problems. We often recommend standardising these meeting with focused agendas where the day-to-day issues are solved quickly and the bigger are issues taken offline.
Ineffective Resource Allocation
Lean methods can help professional services companies optimise resource allocation. By identifying and eliminating waste in resource utilisation, companies can ensure that the right people scheduled are available when needed. One approach that can help is using a Kanban board to visualise the flow of clients working. Coupling this with some visualisation of team member’s availability make it much easier to manage the workloads and flow. This reduces overburden on team members.
Unnecessary Rework and Errors
The Lean mindset focuses on eliminating defects and errors early in the process. A key tenant is “never pass incomplete or defective information onto the next stage”. Using simple templates and checklists ensure that key steps and information are not missed or captured with errors. Once the lessons from mistakes start being captured and prevented by building them into the team’s standard work, everyone benefits from the productivity gains.
Lack of Standardisation
Lean methodologies encourage the creation and adoption of standardised processes and procedures. Standardisation helps to achieve consistency in service delivery, reducing variation, and improving productivity. It is probably the most important thing to do to enable scalability. Standardisation typically takes the form instructions and work process descriptions. Over time, the amount of information contained in these documents can be reduced as process are made simpler and visual cues and guided work process become the norm.
Overburdened Employees
Lean principles emphasise identifying and balancing workloads to avoid overburdening employees. This promotes employee well-being. To do this goes beyond understanding team capacities and establishing a manageable workload. It is often essential to build a team capability matrix to highlight when key knowledge is concentrated in the hands of one or two employees.
Inefficient Client Relationship Management
Lean methodologies can help professional services companies improve their client relationship management processes. By standardising client interactions (e.g., mail & meeting agenda templates etc.), client communication and relationship can also be vastly improved though standard on-boarding practices. One client we worked with would onboard and do work for a client without clarifying who and where they would be sending invoices. Making this part of the standard on-boarding process saved administrative time and improved cash flow.
Overall, a Lean approach can tackle nearly all productivity issues in professional services companies by focusing on eliminating waste, improving communication and collaboration, optimising resource utilisation, and enhancing overall efficiency. If you are interested in how to improve the productivity and scalability of your business, please get in touch with us at LeanTeams.
This blog post was written by Alex Gibbs, Lean Business Consultant, Trainer, and Mentor. You can view his profile and watch a video of Alex talking about Lean here.
We hope you enjoyed reading about Improving Employee Morale and Productivity in Professional Business Services. You may also be interested in reading about Employee Recognition Best Practise and Examples and Unlocking the Full Potential of the Lean Approach. All our blogs and insights are available to read here. Please follow us on Linkedin and Twitter.
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