Leading Successful Lean Transformation at Virgin Media

What does it take to lead successful Lean transformation? Virgin Media, one of Britain's largest commercial television and media services companies, won PEX Network's award for best Lean transformation. Jason Chipchase, Virgin's Head

of Operational Excellence, discusses what the company achieved, talks about moving from the "swamp" of operational excellence to the summit, and shares lessons learned along the way.

Diana Davis: It was PEX Network's award winning program for Lean Transformation - what did you actually do?

Jason Chipchase: We made a business-requested intervention to perform improvements on behalf of our customers. We were having a bit of a bad time; we were struggling a little bit with delivery, so we lead a national Lean program across our delivery centers to improve that delivery experience on behalf of our customers.

Diana Davis: When you say delivery experience, that means that the customer's phoned up, they say I want internet installed and then "the delivery experience" is what happens when they're actually getting that internet installed?

Jason Chipchase: Absolutely, it could be that. This was very specific in terms of our business provisioning customers. So we do have customers who are buying and using very complex communication and data solutions from us to run their entire data systems and that is quite a complex process, to provide some of those solutions. And we'd had a very new IT system implemented along with other changes in that division and we were seeing a deterioration in the delivery ability of that division to get the services to the customers on time. Sometimes in critical situations - as you could appreciate - as well, with companies relying on their data ever more now. So it was more in line with our larger business customers.

Diana Davis: So what did you do first, how do you get started with all of this?

Jason Chipchase: Firstly we started scoping. We mobilized a team around the national centers to understand what the issues were, gathered data around those issues, and built the value stream. We'd also had an organizational rebuild as part of the previous IT transformation program, which we weren't involved in but we were brought in to solve of the "interesting" problems, I guess.

[It's] a classic business problem, in fact, in terms of process not being dealt with before automation. And we mobilized it on that scoping exercise, we spoke to our stakeholders, we presented our findings and then we agreed with our stakeholders where we would start our key activity.

Diana Davis: And what was the... where did you start that key activity?

Jason Chipchase: The key activity was in actually the delivery centers. So, across the business division, we have sales, we have provide centers, which program manage each customer's install, we have planning, we have billing, and we have field activity. So it's quite a big and complex value stream. The problem was lying in the provide center, along with an organizational design issue that we found. We needed to drive results quickly, so we agreed with our stakeholders that we wouldn't fix the organizational design because that will be a slower fixing process. What we'd do, instead is we'd concentrate on the provide centers and enable the project managers who deal with the customer day in, day out and liaise and organize all the delivery services for the communications and data solutions to be able to do their job in one best way with the waste stripped out of their processes and in the process to their customer.

Diana Davis: Why did you select Lean as the methodology to help achieve that? Jason Chipchase: Okay, that's an interesting question. Well, we found in Virgin Media we're on a journey with Lean and Sigma methodologies. And Lean, we find in our approach, is very much the foundation, the building blocks and the first steps of major step change improvement. And then when you become more mature and more refined and your data becomes more continuous and more reliable, then we start entering the world of Sigma related methodology - design of experiments, testing the sensitivities of the process, etc.

So we were very much in a world where, by our own scoping tools, we were in the swamp type world of operational performance as opposed to the summit. We have a tool that we use to explain to our stakeholders where we are on our operational excellence journey. And we call it from swamp to summit. As you approach the summit, then Sigma becomes more applicable along with tools like design for Six Sigma. But we were very much in the world of Lean foundations: [we needed to] stabilize one best way and put a good set of foundations in place, a good set of training in place with the people in those divisions so they could help themselves to take those steps towards the summit.

Diana Davis: That's interesting because often, sometimes Lean gets a bad rap, particularly in office... outside of the traditional manufacturing environment. I guess the first question really is why do you think it does get that bad rap? Jason Chipchase: It's a really interesting question and I think there are several facets to the answer. I think firstly none of this works without the people. We engaged, as part of our program, approximately 600 FTE and we put them through Lean training that was accredited with Cardiff University so they understood the toolkit that we were using and why we were going to use it. We had very heavy buy-in from the people we were working with and we staged lots and lots of upfront communications and hearts and minds sessions and we appointed champions and subject matter experts to spread the word across the divisions. So we engaged the people heavily - which is quite a Virgin thing as well - and I think engagement is very important to drive change of any description, whether it's Lean or not.

However, Lean itself... I think some people do struggle in a service industry with applying the right tools at the right times. Sometimes Lean is seen as a toolkit where all of it has to be applied and I've found that personally that's not the best way to use it. You've got specific problems, you've got a very good toolkit to use and once you've applied your scoping and your diagnostics, then it's applying the right tool to solve the major problem in the right order. And so often, I've seen examples in service industries of 5S as a tool getting a bad rap because it's been so precise about desktops, about the tools that the guys can use in their office environment. And really often, that's not the key tool to use in an office environment, but if it's used without good engagement and without the full breadth of understanding of that tool, what it's being used for, then it can switch people off.

As an example in Virgin, if we use 5S in an office environment, which we do on a regular basis, it's not in a fixed position in our program, it depends what the solution is for that area, so we'll use 5S if it is the answer to the problem at the front of our program. If it's part of setting out standardized working environments, we will use it later in the program but we'd never ever use prescriptive tools and techniques with 5S. We always allow the guys, the people, the subject matter experts who are working in that environment, to decide how 5S is used for their best benefit.

Diana Davis: So it really comes down to not only choosing the right tool for the right situation, but really making sure that the people that are going to be effectively owning the process at the end are involved in those decisions? Jason Chipchase: Absolutely. As I said in the beginning, that relates to most if not all change. If the people, the guys that are going to be impacted by the change aren't involved with it, aren't consulted, aren't involved in delivering and don't have their expert input which is absolutely vital in a LEAN transformation. The process experts know what the customers are saying, know how the process works, know where the issues are and are able to quantify that with data, etc. That's key to success in change. If you try and put change on people without their consultation, then you haven't got the buy-in.

Diana Davis: Now if we take it back to your... the program that you won for our site - your LEAN transformation - what kind of results did you get?

Jason Chipchase: Well we achieved some great results on behalf of our customers. We got some good feedback from our sales divisions, who are seeing improved delivery performance. We took delivery, in some cases, out of 20% on time, so customers only... you had a one in five chance of having your services delivered on time following this big IT change program and we took it out of the 20s, through into the 70% and into the mid 80% delivering on time.

Diana Davis: So you started off from a baseline of 20% were delivered on time and you got it all the way up... well, pretty close to 100%?

Jason Chipchase: Well, it's in the 80s and in some senses it was 20, in some senses it was a struggle to measure it because the data systems were so chaotic that we had to

put baselines in, manual baselines in. So I'd say on average we took it through between 40 and 60 percent through into the mid-80s and that was really pleasing from our project and delivery teams’ point of view and from our stakeholders. We were tasked with hitting 70 and we pushed it through to 80% with the help of the guys on the ground who worked really hard to design how to push a delivery performance and how to get one best way of ensuring this good delivery performance.

And it was an interesting engagement because this time we engaged about 16-17 subject matter experts as part of this to look at the IT system first before we did anything else. We looked at the high level process in the IT system, challenged the work organization that puts on the business divisions and we started taking out the low hanging, non-value adding activities that that locked into the system by using the subject matter experts. So we had a huge IT work stream running through this program as well as on the ground.

Diana Davis: Interesting. Now any lessons learned along the way? I mean, was there anything that you wished you'd known before you even started the program? Jason Chipchase: I think my main lesson is a constant lesson in these environments. I wish that we'd ironed out one best way prior to automation. I wish I'd known how complex the IT systems we deducted and the work flow systems we deducted were prior to the engagement because that created a lot of work analyzing each process step in an automated system to work out who was getting work and from where and when so you can analyze the flow of the work.

I think it's a common problem in many industries that IT systems are adopted without perhaps gold plating the process first and taking the non-value added steps out and getting the right flow of process in first. And I think that's very common and that's not a criticism of our IT system, which is a very clever system, it's just one of those industry things that seems to happen. And I think we, as an organization, took a lot of learning out that. And so I wish... I think my wish would have been we could have started earlier so we could have been part of that automated process design.

Diana Davis: Now where do you go from here?

Jason Chipchase: Well, the results of this first national program gave us the green light to go end to end across the value stream in the business division. So as we speak, we're live working in all the associated partners of the value stream. So the planning department - if you can imagine a complicated communication system going into a large organization - we need planners who will organize where our cabling goes and where it goes we need the technical design engineers to understand what kernels, what services, etc. are going where. We need to understand how we're going to install it, we need a server, and we need to engage the field to organize the work.

And then [we need] to plan the actual physical installation along with the project management and actually gaining the customers' confidence to place the contract with us. So we are going from receipt of order, through to first bill with a very large program designed to attack two things, the core process in the IT system, so we're going up a level from the low hanging fruit and the work organization, so to give our project managers case ownership of the projects that they're delivering as opposed to some of

the multiple handoffs that they have at the moment. So we have a very large program mobilized on the back of this with voice of the customer sitting at the front of it.

Diana Davis: Sounds like you're going to be well occupied over the next year.

Jason Chipchase: Yes, and a little bit more, I guess!

Editor's Note: This interview has been transcribed from the podcast Interview with Jason Chipchase, Head OpEx, Virgin Media. Some sections have been edited for readability.

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