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Archive for the ‘Lean’ Category

Lean in law firms – five key lessons

Monday, December 4th, 2017

by Alastair Ross

I’ve been working with many major UK law firms since 2005, helping them to improve both the value and the efficiency of their services. A key philosophy I have used in this work has been Lean thinking. I thought it would be useful to reflect on that experience and capture five key lessons I’ve learned over the last 12 years about applying Lean in law firms.

Lesson 1 – A law firm is not a factory (not quite anyway)

I first applied Lean back in 1990 as a manufacturing manager in IBM. It was not known as Lean then – but as ‘Continuous Flow Manufacturing, ‘Just in time’ or Kaizen. Later I used it in improvement projects in chemicals, automotive and aerospace companies. In the late 1990s the term ‘Lean’ was coined by Womack and Jones to cover this improvement philosophy and tools. In 2005 I began working with major law firms in the UK that were feeling the heat of increasing competition and market deregulation. It quickly became clear that Lean thinking could be readily applied to help these firms improve their service value and delivery efficiency. But it was also clear that the culture in a law firm, the ‘craft’ based working methods and the terminology meant that Lean needed to be communicated and tailored differently. Partners did not readily relate to case studies of car factories – they needed to understand how lean could be applied to knowledge-intensive services such as law. And equally lean approaches that worked on the factory floor did not always work quite so readily in a legal team!

Lesson 2 – Process thinking does not come naturally to lawyers

Lean thinking is naturally focused on how work activities and resources are applied to the flow of value from the business to the customer – the so-called ‘value stream’. This value stream is realised in a business process that delivers products or services to the customer. So lean thinking is used to assess and improve these processes. This approach comes naturally in a manufacturing environment where there is a common understanding of work being codified into production processes. But this is not the case in a law firm – ‘process thinking’ is an alien concept especially for work types where one fee earner may currently perform all of the work. This is where process mapping is very effective in getting a team of fee earners to draw up the activities that are required to deliver a service – thus producing a visual map of the process. This can then be used to highlight wastes and begin the journey to improvement. Doing this in a collaborative way with fee earners in a change team is the best approach in my experience – getting lawyer buy-in to the improvements and also creating a cadre of ‘process improvement advocates’ within the firm. (And by the way this is why I am not a fan of Six Sigma for law firms – it’s overkill and not as easily deployed as Lean).

Lesson 3 – There is a lot of waste in legal services

A core element of the Lean philosophy is a ruthless focus on the identification and elimination of waste. But what can be considered as waste? It is any activity or resource that does not add value to what is provided to the customer. Waste accumulates in businesses just like dust and debris in a house. Regular hoovering and the occasional major ‘spring clean’ is the solution in a house. And something similar is required in a business to keep its business processes effective and efficient. But what if a business doesn’t feel the need to do this? If the competitive and market pressures are not sufficiently tough that they need to do such ‘process housekeeping’? This was pretty much the situation in the legal sector for many years – times were good and margins were high. But since the financial crash in 2008, the dramatic impact of the internet and other information technologies and in the UK the deregulation of the sector – things have changed. Law firms are feeling the pressure from budget-squeezed clients, new entrants and new business models. So now firms are looking at their how they deliver their services – and they are finding much waste: Poorly defined, inefficient working methods, inefficient use of people (so much legal work is performed at too high a skill level), errors, rework and poor use of IT, for example.

There is a positive message: With this high level of waste, there is much improvement possible.

So firms can significantly improve their competitive position by using lean to identify and radically reduce this waste (see Lesson 5).

Lesson 4 – Start with a partner champion and a fixed fee service

Making change in partnerships is tough – much more so than in a corporate where the ‘it’s my way or the highway’ diktat can more readily be applied… The other major challenge is that ‘the billable’ hour discourages law firms from improving efficiency – as it results in reduced revenue. Great for the client, but not so compelling for the partnership. But the fee regime is changing with more clients in the UK looking for budget certainty and so enforcing reduced and fixed fees for many transactions. This has created financial pain for firms – much of my work has been with firms who have been forced to move to a fixed fee for a service and are making little or no profit for each matter.

To effectively harness this ‘burning platform’ for improvement, a Partner ‘champion’ is needed – one who is positive and committed to driving major improvement in the service. They are critical in being the business partner to an external change agent, in leading a change team of fee earners and removing road-blocks to change within the firm. From my experience, the presence of such a partner champion is a key ‘Go/No Go’ for a Lean improvement project.

 Lesson 5 – More for less is an achievable outcome

There is a common believe in professional services firms that cost reduction will inevitably lead to a reduction in service quality. In other words something has to give – you either have a high quality or low cost service, you can’t have both.

 This is simply not true.

My work with multiple law firms covering 20 legal services has enabled direct cost reductions of between 25 and 75% – whilst improving value to the client, with more consistency and responsiveness. Why is this possible? Because firms can reduce service cost by reducing or eliminating the waste inherent in legal service delivery (see Lesson 3). This waste adds no value to clients and indeed consumes lawyer resources and time – so removing it will not have any negative effects on client value. Only positive ones.

 So service quality can be improved and cost reduced at the same time.

So what’s the key message for law firms?

It’s a simple one, if a firm is not yet using Lean thinking as part of its transformation work it’s failing to grasp a major opportunity. For Lean can deliver significant business improvements with little capital investment (IT can help, but it’s not mandatory) and provide a foundation for ongoing improvement. And if a firm is looking to exploit new technologies such as AI, it had better make sure it’s building on solid foundations – automating a poor process may simply deliver the proverbial ‘pig with lipstick’….


This article was first published by Alastair Ross on LinkedIn on 1st December 2017.

How healthy are your legal services?

Monday, November 20th, 2017

Business challenges are driving services thinking in law firms

Today law firms must compete on the basis of their legal services – not just their lawyers.  Clients buy legal services to get problems solved and these services are typically delivered by lawyers – but with increasing competition, the impact of IT and the internet and deregulation in some markets, this is changing. With the aim of meeting client demands of ‘more for less’ and doing so profitably, progressive firms are giving increased focus to improving the value of their services and the efficiency with which they are delivered.

The legal service paradigm has changed

Twenty years ago ‘legal services’ were simply the aggregate outcome of the work of a number of lawyers with a specific set of skills. The way the work was performed and delivered varied by office, by partner, by fee earner and over time. There was little consistency in how the service was performed or delivered.

The legal world is very different today. To find out more and how you can assess and improve your legal services read our new whitepaper: How healthy are your legal services?

If you would like to know more about Codexx experience or services in this area, please contact us.



Transformation in a mid-sized law firm – Whitepaper

Monday, September 11th, 2017

Major law firms are operating in a time of great change with significant pressures on their core business model, driven by a ‘perfect storm’ of factors:

  • Digitisation of legal service delivery, using the internet & mobile
  • More sophisticated and price-focused clients demanding ‘more for less’
  • Continuing austerity – impacting public and private sector legal budgets
  • Deregulation to enable new entrants and new business models

The UK legal press primarily gives coverage to the large law firms – particularly the so-called ‘magic’ and ‘silver circle’ firms licensed in England and Wales – and how they are responding to market, regulatory and technology challenges.

But how are mid-sized regional firms dealing with these challenges? These firms are typically competing for work where rates and indeed margins are significantly lower than for the large firms competing for M&A and complex litigation work – and these are being further squeezed in this challenging environment.

To better understand the challenges and effective approaches for making major transformation in such a mid-sized law firm we returned to one of our legal clients with whom we worked in 2011-12 on a Lean programme. At that stage, ASB Law, a progressive south coast firm, was just starting out on a programme of major transformation. We interviewed Andrew Clinton, who has been the Managing Partner of the firm since 2006. He has been championing and leading the firm’s programme of transformation.

Andrew was open and frank about the firm’s approach to transformation, its challenges on this journey and its achievements so far. He agreed to the documentation of this interview in a Codexx whitepaper and sharing it in the public domain. We have done so and also added a commentary based on our re-engineering and innovation experience with multiple firms in the legal sector since 2005.

This paper provides a practical and detailed review on the approaches, challenges and lessons learned in making and sustaining major transformation in a mid-sized law firm. We have also included a framework for the effective design and management of transformation programmes. To read the paper click on the link below.

Driving transformation in a mid-sized law firm – ASB Law Case Study – September 2017

The Brexit cost challenge – an effective services response

Wednesday, March 22nd, 2017

 Stock trading monitor (black and white)

Brexit challenges both UK and non-UK businesses

Over the next decade, with economic challenges and potential tariff barriers post Brexit, both UK-based businesses and also those businesses exporting into the UK, will be facing uncertainty, pricing challenges and competitive pressures.

The impact on business services

The inevitable response of businesses tightening their budgets will impact the professional service firms which supply them with research, legal, accounting, consulting, design and other business services.

Professional service firms will need to respond in two ways: 1. Enhance their business value proposition – through innovation – so that customers are less price-sensitive and 2. Reduce costs where possible. This article focuses on how service firms can reduce costs through the intelligent targeting of waste.

Use a magnifying glass – not an axe – for cost reduction

Conventional approaches to cost reduction in professional service firms – sweeping the ‘axe’ of redundancies – risk cutting away core value-adding activities in the business along with any ‘fat’. A better approach is to apply the ‘magnifying glass’ to seek out wastes in service delivery and then eliminate them using Lean principles.

By reducing the costs associated with waste activities, cost reduction goals can be met without impacting the service and value delivered to clients. Indeed the opposite is typically the case – with a more streamlined and systematic way of working delivering a more responsive and consistent service to clients.

In our work with professional service firms over the last decade
we’ve found that service re-engineering typically reduces the cost
of service delivery by between 25-50% whilst maintaining service quality.

There are three key steps required in achieving waste elimination in service delivery:

  • Find wastes.
  • Remove wastes.
  • Stop wastes returning!

Find wastes

Wastes are activities that do not add value – and so professional time spent performing such work can be eliminated without impacting the service to the client – whilst reducing the cost of delivery. The key approaches that are effective in doing this are:

  • Find a Champion – a Partner or Manager to lead the work
  • Engage fee earners – who know how work is actually performed today
  • Understand the client requirements – what’s important to them, today’s service experience
  • Map the service – create a picture of the end-to-end service as it is today
  • Apply Lean techniques – to identify waste and inefficiency

Waste elimination means that service costs
can be reduced without lowering quality.

Remove wastes

The key steps to be followed in removing waste from a service are:

  • Re-engineer the service using a TO-BE design that provides a more efficient and controlled service – making use of procedures, templates and workflow.
  • This reduces service delivery costs in two ways: (1) Reducing the fee earner time required to perform the service and (2) Performing the work using a lower cost blend of personnel (i.e. work pushed down to more junior and less expensive personnel) or automating it. Our work on service re-engineering over the past decade has shown that typically 25-50% of this cost can be removed.
  • Maintain service quality by placing work elements at the skill level at which it can be performed at least to the same level of quality as before (through use of codification into procedures and templates and then personnel trained to these methods). In our experience service quality and responsiveness is actually improved post re-engineering.
  • Use the freed up personnel to perform other work (thus yielding cost avoidance) or made redundant (yielding cost reduction).
  • Generate new revenue using experienced personnel who have been freed up by re-engineering, to work on more complex and higher margin work – if the firm had opportunities which would have needed new hires to meet.

Stop wastes returning!

It is important in a people-based business to ensure that costs don’t ‘drift back’, especially into the delivery of fee earning work. This is why new working methods need to be supported by standardisation of repetitive work elements, making use of procedures and templates. Case Management and workflow systems can help ‘lock in’ new procedures. New metrics should be put in place to monitor time spent on matters by work element and fee earner type – to both ensure that target times are being met and also to support continuous improvement.


A waste-focused approach to reducing service costs in professional service firms is powerful in enabling services to be delivered at a lower cost and at least equal quality and service as before. This is not the case with the more typical people-focused redundancy approach – which can significantly impact clients through reduced service quality.

Lean-based cost reduction is a powerful approach
that is seldom used effectively in professional service firms.

One key reason for this is that few of these firms have ‘process-thinking’ in place to enable process-based improvement. This is changing with the increasingly competitive landscape for services and the accelerating use of IT and the internet for digital services delivery.

Firms should seize this approach and make it part
of their ‘transformation toolbox’ to enable a successful
response to the business challenges of Brexit.

Why professionals should embrace Lean thinking

Wednesday, October 26th, 2016


Delighted clients. High utilisation. Business development.

These are the three key mantras guiding the life of any fee-earning professional – be they a lawyer, an accountant, a management consultant or a specialist in any knowledge-based business. And we shouldn’t forget a 4th mantra in any profession: building your own expertise, aka ‘professional development’ – that is if the professional has any time or energy left after serving the needs of the first three…

With the increasing demands and competitive pressures on professional service firms, the life of a fee-earning professional can often seem akin to a galley slave working in the bilges of the business, rowing frantically to serve the demands of their clients with their Partner cracking the whip on chargeable time….

Just to make this picture even worse is the fact that a good amount of the workload and stress on our poor professional is simply unnecessary. It doesn’t move the business any faster through the competitive waters. Indeed the professional could slow their rowing – or even stop at times – and there would be no difference to the speed of the vessel.


Professional services – a story of waste

Much work performed by professionals today is simply waste.

It doesn’t deliver value for clients.

It doesn’t deliver profit to the business.

it doesn’t enhance the professional’s expertise.

How can this be? Professional service firms are smart aren’t they? Law firms, Accountants and Management Consultants charge clients substantial fees for providing expertise and advice that helps improve clients’ businesses. So how could they do this if so much of their employees’ work was waste?

The sobering fact is that they are able to deliver so much value to their clients despite their internal inefficiencies. In my work with professional service firms over the last fifteen years, I’ve seen professionals exhibiting similar types of inefficiency in their work:

  • Doing work that is not required to meet client needs
  • Finding and reworking errors made by others
  • Doing work that could be performed by junior personnel
  • Doing work that could be done by support staff
  • Taking excess time to perform work
  • Not applying better methods used by others

These are all simply approaches to work that waste professional expertise and time. When firms are able to charge clients for all work that is performed for a job or by the hour, this inefficiency can be converted to income (and is thus a ‘good thing’). But these times are changing with clients increasingly demanding fixed fee pricing for work. This inefficiency then becomes a cost to the business.

As an example, in my work with major UK law firms since 2005, I have helped firms re-engineer 20 services. By applying Lean approaches to identify and remove waste from work and redesign the service to better meet client requirements, typically between 25-50% (and once as much as 75%) of the cost of the service was removed. And this cost reduction was not at the expense of quality – indeed in all cases the quality and consistency of the service was actually enhanced.

As these improvements used a highly collaborative approach, working with a team of fee earners and support staff, I was able to experience first hand the change in the professionals’ view of the service re-design project. The mental journey they took went something like this:

Stage 1: Politely Hostile: “Why am I in this team? I haven’t got time for this.”

Stage 2: In Denial: “I don’t see how we can be more efficient. Our work is professional – it can’t be simplified or systemized.”

Stage 3: An Awakening: “Mapping the service showed a lot of inconsistency and inefficiencies – I guess that is waste?”

Stage 4: Energized: “If we could remove the waste, we could do our work more easily and take less time.”

Stage 5: I’m a Believer: “Our work is less stressful, we are more productive and the service is more profitable. Where else can we apply this approach?”

I can think of one project where we were re-designing one fixed-fee legal service that was not profitable for the firm. An experienced associate on the project team was very much at ‘Stage 1″, considering the project a waste of her time. But she began to change in Stage 3 after I introduced Lean thinking and the team mapped the service to lay bare the considerable inefficiencies. She was the one who in Stage 4 spent her own personal time drawing up a map of a new way of performing the work – which became the core of the ‘TO-BE’ service – resulting in a new service that was more consistent, faster and reduced the direct cost of performing the work by 75%. She is now very much a Stage 5 advocate in the firm…


Lean can set the professional free

Professionals often consider Lean approaches as a threat. They see it as an attempted commoditization of their work, through standardization and de-skilling, and so they resist it. But actually Lean can enrich a professional’s work by removing frustrations, taking away repetitive and lower skill tasks and so freeing up the professional’s time for more challenging and higher-value work. This increases their personal fulfilment from their work. The application of Lean also allows junior and less skilled personnel to improve their effectiveness – making use of codified methods to perform lower value work that was previously performed by experienced professionals. In doing so the organisation’s effectiveness and efficiency is improved – making it more competitive. So Lean is actually a productivity tool for professionals and should be embraced – not resisted.



This article was originally published by Alastair Ross on LinkedIn on 24th October 2016.

What does Brexit mean for UK business innovation?

Tuesday, July 12th, 2016

London in fog picture

Alastair Ross, Director, Codexx Associates Ltd
Professor Jeremy Howells, Kellogg College, University of Oxford


Peering through thick clouds

The initial impact of the Brexit referendum result has been the start of a period of volatility in the UK exchange rate, stock market and political governance. It has also created uncertainty for business as the eventual relationship with the EU and the nature of access to the single market is not known and will not be known for several years. Business does not like uncertainty for it makes it hard to predict future conditions and thus difficult to plan with any certainty.

What does this mean for a UK-based business in the medium to longer term and specifically where and how it should refocus its innovation efforts? The short answer is no-one knows for certain. The more useful answer is it depends on a number of factors, specifically on how they develop over time and the conditions which they eventually stabilise at. Considering a number of potential scenarios based around the development of these key factors is a useful way to consider and develop business plans.

So what are those factors and how should an organisation’s innovation agenda be modified based on their development? In this short paper we are considering innovation at the individual business level and in its broadest sense – the improvement in customer value and internal efficiency resulting from the systematic capture, development and implementation of new ideas. The results could be new or modified products and services, new ways of working, new market positioning or indeed a new business model.


 Uncertain conditions favour agility

The current situation takes us back to the situation of late 2008 and early 2009 after the financial crash. Codexx worked with a large progressive engineering company which had been hit hard by the resulting recession and recognised the need to fundamentally change their cost structure to better align to market conditions. Thus the company sought to exchange fixed costs for variable costs, in their workforce and through the use of suppliers. Essentially they were seeking to improve their agility – their ability to respond quickly to a market or customers – to grow capacity in required areas when there was an increase in demand and to be able to trim it easily – and without touching their core employees or facilities – when demand dropped off.

The Brexit situation has some similarities in that both situations resulted in uncertainty. However the impact of Brexit will be particularly felt by UK-based companies due to the major changes that lie ahead in key areas such as:

  • The UK pound exchange rate
  • UK stock market level
  • The nature and degree of access to the single EU market
  • People movement between the UK and EU

Since these are the key drivers to the future form and nature of the UK business model and competitiveness – and their end points will not be known for between 2-5 years, what can businesses do now? Businesses need to establish the capability to respond quickly to whatever economic and market scenarios eventually become reality – and in the meantime continue to operate effectively.


A new innovation agenda

Innovation is effectively about building tomorrow’s business – through the development of new products and services, new ways of working and new business models. An organisation has a constant challenge in focusing time, energy and resources on innovation – as the daily business needs this attention now and management priorities and rewards favour this. With Brexit, management has to dedicate increased focus on innovation as it is highly unlikely that the business environment for UK firms in 5 years’ time will be the same as today.

In many ways Brexit is an opportunity for businesses – as it provides a clear ‘burning platform’ for change and innovation. ‘The world is changing’ – well at least the market and supply-side conditions certainly will – and this provides a clear spur for innovation. So what sort of items need to be considered for the innovation agenda for UK-based businesses?

  • In the short term, trim waste to free up resources and reduce costs to offset increases in costs of imported parts and services due to the fall in the UK pound. This calls for a refocus on Lean thinking and process innovation. In the medium term, there may be opportunities for switching to UK suppliers.
  • Seize short term market opportunities in the single market that currently prevail with a cheaper pound making exports cheaper. This calls for a specific focus over the next 2+ years whilst the current single market access remains. There is a strong relationship between innovativeness and export performance and growth so there are opportunities here in the longer term for businesses that are seeking to sell innovative products and services.
  • Improve the codification of expert knowledge so that services and processes can be effectively delivered with less-skilled personnel. This is to recognise, in the short to medium term, that some of the skilled personnel available from EU countries outside the UK may not be available after the UK formally exits the EU. In the longer term, with, for example, an Australian based points immigration system, it may call for wider global search and recruitment practices. Even if the skills loss scenario is not realised, such codification will improve business efficiency and better leverage higher skilled personnel for higher value work.
  • Investigate the potential for new international markets that you have no presence in, looking at how you can reduce your costs and risks of entry by using partnership. This is in preparation for taking opportunities with the UK having the ability to negotiate new international trade deals but also potentially to offset any reduced access to the EU single market.
  • Prepare for a potential  restricted single market where the UK is faced with tariff barriers and thus products and services will be more expensive to EU buyers. This means an increased focus on value – developing new innovative offerings which can command a higher price – and preparing for increased price pressure by reducing non value-adding costs. In certain instances, certain products and materials, such as food products, may become cheaper in the medium term outside the EU. In the longer term accepting trading terms to, the European Economic Area (EEA), would mean continued access and compliance to EU trade rules. Outside the EEA, would mean trading on WTO general tariff rules and what access could be gained to individual countries or trading blocs, such as the Trans Pacific Partnership.
  • Don’t lose sight of the home market, where post EU exit there will likely be price advantages for UK-based businesses and also a likely period of goodwill to ‘home’ producers with a focus on ‘Buy British’, particularly if there is restricted access to the EU single market.
  • Review your requirements and sources of research funding. In the medium term if the UK remains in the wider EEA it can access current EU Horizon 2020 funds and other research and innovation funding. However, this will depend on the UK agreeing to continue to allow free immigration access to EU passport holders.  If this is not accepted by the UK government, then much will depend on how the UK shapes its own UK innovation policy and at what funding levels. Alternative sources of research funding may well be needed.

A silver lining?

Overall the next few years will be turbulent and challenging for UK-based businesses. However, there may well be a silver lining in this cloud – where the tough conditions drive businesses to increase their focus and level of innovation – to effectively improve their competitive health and thus better prepare them for market success – whatever challenges the future business environment will hold.

Continuous Improvement – the quiet giant of innovation

Wednesday, December 2nd, 2015

Continuous Improvement image

A BBC article (here) recently gave media prominence to a well-established business approach, namely incremental or Continuous Improvement. It cited the example of how Sir Dave Brailsford applied Continuous Improvement approaches in his role as performance director of British Cycling to benefit from ‘marginal gains’:

Brailsford believed that if it was possible to make a 1% improvement in a whole host of areas, the cumulative gains would end up being hugely significant. He was on the look-out for all the weaknesses in the team’s assumptions, all the latent problems, so he could improve on each of them. (Source: ‘Should we all be looking for marginal gains?’, BBC)

Brailsford made small improvements in cycling aerodynamics, in maintenance methods, in rider health and other areas identified by analysis as being small areas of weakness. These small improvements aggregated together transformed the competitiveness of the British Cycling team and subsequently Brailsford used a similar approach in the Team Sky cycling team. The result?

Team GB used to be also-rans in world cycling. Indeed, one pundit described the operation as “a laughing stock”. But in the last two Olympics, Team GB has captured 16 gold medals and British riders have won the Tour de France three times in the last four years. (Source: ‘Should we all be looking for marginal gains?’, BBC)

A short history of Continuous Improvement

Continuous Improvement (CI) is a type of innovation (defined as creating value from ideas) that sits at the unsexy end of the spectrum of business innovation. It receives few column inches in innovation blogs, individual projects do not result in earth-shattering changes and few of the project instigators will receive individual rewards. It is noteworthy only for its aggregated impact – of using new ideas to increase customer value or internal efficiency (by a little at a time). Toyota is often considered, incorrectly, as the parent of CI as part of its Toyota Production System (TPS), which later became known as Lean. But its conception was much earlier, primarily in the work study movement of the early twentieth century, fathered by Frederick Taylor and resulting in Taylorism. Toyota wrapped the resulting hard mechanics of time & motion study with its own philosophy of waste elimination and high workforce engagement.

Toyota sets the performance bar

Toyota’s ability to generate an average of 10 implemented improvement ideas per employee per year places it in the premier league for continuous improvement; most western firms struggle to get into the lowest league with typically 0.1 implemented ideas per employee per year. Toyota’s approach to CI lies in its combination of a specific methodology and a work philosophy that defines a unique organisational culture: ‘Toyota views employees not just as pairs of hands but as knowledge workers who accumulate the wisdom of experience on the company’s front lines.’ (Source: ‘The contradictions that drive Toyota’s success’, Harvard Business Review, June 2008) This is a powerful view and one that is all too often missing from business organisations.

Whilst industrial firms will have established CI programmes, focusing on shop floor teams, they vary significantly in their effectiveness. In my work with Codexx I have assessed a number of industrial CI programmes and typical weaknesses that occur include: Limited training in the use of CI methods, lack of defined goals and focus areas for CI, weak processes for reviewing and selecting ideas and limited workforce engagement (i.e. most ideas come from a few people). However for businesses that get it right, CI programmes can deliver significant financial benefits year on year and create a working culture that energizes and engages the workforce.

What about services?

Service businesses often lack robust capabilities for CI, although this is changing as Lean thinking continuous to permeate this sector. Allianz Insurance plc launched a major and ongoing innovation programme in 2006. At its core is a Continuous Improvement system.This uses departmental teams meeting regularly to identify and implement improvement opportunities. Each department team defines three key goals for their team and then, using a short weekly or bi-weekly meeting, they seek to solve problems that have been identified during the previous week and put on a departmental whiteboard by team members. Idea exploration and selection is performed by the team through a discussion. Implemented solutions are then recorded in the firm’s ideas management system. In total there are about 400 teams working in this way with the support of 100 trained innovation champions. Since its start the programme has yielded 38,000 implemented ideas with benefits measured at £19m (1).

Making difficulties visible

A challenge for service firms in Continuous Improvement is the difficulty of ‘seeing’ problems. In industry, a production process is physical, parts and products move through process steps involving people and machines. In a service business, the ‘product’ is information or an experience and is not always physical. This is especially so in Knowledge Intensive Services such as design, accountancy, law and management consulting where the ‘product’ is information-based. Why does this matter? It matters because ‘making difficulties visible‘ is key to Continuous Improvement. This is why a key mantra in Toyota is Genchi genbutsu or ‘Go See’. In other words: Don’t rely on reports or information from others, go and see the situation for yourself. In a services environment, walking into the location where work is performed provides limited value, particularly in information-based work, for there is little to see: what does a law firm’s office filled with people, desks, computer screens and paper (oh yes) tell you about the services performed there? Very little. This is why process mapping and visual management methods are key to making processes and their performance visible in a services environment. In my re-engineering work with professional service firms, the power of collaborative process mapping cannot be underestimated.

Continuous Improvement needs ‘Know Why’ not ‘Know How’

‘Know How’ is a common term used to describe expertise and is thus considered a ‘good thing’. However it is a bad thing when it becomes a barrier to innovation, which is not uncommon. Let me explain further. Much of work is repetitive to a degree with work comprising common activities and sequences of tasks. ‘Know How’ is sufficient to perform such work, as the procedures to be performed and the steps to be followed can be learned and represent the required ‘Know How’. The underlying reasons for why the work is designed in this way are not necessarily understood or indeed do not need to be to perform the work. But ‘Know Why’ is key to making significant improvements in how this work is performed as there needs to be understanding as to why the work is designed in its current form. Indeed much waste exists in working methods because steps and procedures in place were relevant to a situation that does not apply any more. For example, in a major insurance client, some activities in an internal process related to an IT-workaround which had not been required for many years….the people performing the work simply had not been told. The disciplines of questioning, investigation and analysis to enable ‘Know Why’ – a deep understanding – of the work area under focus provide a strong foundation for Continuous Improvement.

Marginal gains x high participation = something big

One of the biggest challenges in driving innovation in an organisation is how to fit it in around the daily business. Innovation is about creating ‘tomorrow’s business’ – a organisation’s focus is on delivering ‘today’s business’ and employees are measured and rewarded on this. So finding time for innovation is always challenging. A related challenge is that the term ‘innovation’ can be intimidating to employees. Many people (incorrectly) associate innovation with the need for creativity and radical ideas and thus feel that they can’t contribute. AXA Insurance Ireland ran an innovation programme in the early 2000s (2). AXA’s analysis of those improvement ideas implemented in the first few years of the programme showed that 80% of them related to small process or service improvements or waste elimination. This helped employees realise that indeed they could participate effectively in the programme by seeking improvements in how they performed their daily work. This helps engage employees in innovation as a regular part of their work – as demonstrated at Allianz Insurance. CI thus provides a good foundation for commencing a programme of innovation in an organisation. So whilst Continuous Improvement might not make as much noise as other forms of innovation, don’t underestimate the power of marginal gains multiplied by high participation in your organisation.


1. Source:‘High engagement innovation at Allianz Insurance plc’.  2. Source:‘Experiments in innovation at AXA Insurance Ireland’

both case studies in ‘Innovating professional services – transforming value and efficiency, Alastair Ross, 2015, published by Gower.

A story of law firm re-engineering: people, processes & profit

Thursday, November 5th, 2015

Law firm re-engineering - enhanced with clients

by Alastair Ross, Director, Codexx

Whilst the term ‘re-engineering’ is typically prefaced by the word ‘process’ as this is the key focus area, re-engineering in professional services firms is very much about people. Successful re-engineering requires partners, fee earners and support personnel to make changes in their beliefs, behaviours and working methods. No small challenge then! To help illustrate the people-side of re-engineering in professional service firms, I’m going to review two recent projects I performed for a medium-sized UK law firm operating across three offices over a 12 month period.

Getting started
Codexx was contracted to help the firm drive major improvements in the efficiency of service delivery. The sponsor for the programme was the Managing Partner. The programme commenced in summer 2013 with an ‘Opportunity Assessment’ where I worked with the firm to select the initial services for re-engineering. The selection criteria we used included the potential financial benefits achievable through re-engineering as well as the level of support and commitment from relevant partners. As this was the start of the programme, it was particularly important to pick two services with a good likelihood of success – as otherwise it would reduce internal support for subsequent projects. For the first wave, two services were selected: an insurance claims management service and a clinical negligence service. Both services were delivered in relatively high volume, at a fixed fee, to important clients. And neither service was profitable. A ‘partner champion’ for each service was selected and I worked with each of them to help prepare them for the re-engineering programme that we were to undertake. The methodology we used in this programme was the Codexx ‘Smarter Working’ re-engineering solution which we developed and have used with professional service firms over the last decade. This uses a phased approach (see diagram) with a high level of collaboration from the client and the work in the initial AS-IS and TO-BE phases performed in interactive workshops and client visits.

The importance of the partner champions in professional service re-engineering projects cannot be underestimated. They help set the importance of the project for the fee-earning team members who are continually challenged for time on the project with their chargeable work commitments. If the partner champion is less than committed, the team members will follow suit. In this programme both the partner champions proved to be both committed and effective – attending all the required workshops and leading the team in challenging existing ways of working and identifying opportunities for service improvements. Together we selected a core team for each of the services, comprising 3-4 lawyers and an administrator. I established the ‘Steering Committee’ comprising the Managing Partner, Finance & HR Directors and Department Heads, for progress reviews and key decision making (e.g. in project investments) during the programme. Then the workshops was scheduled and we kicked off the programme with the first ‘AS-IS’ workshop for each of the two services.

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The AS-IS phase – capturing today’s situation and changing beliefs

There are three key objectives for the AS-IS phase:

1. To capture the operation of the service as it is today to provide a performance baseline;

2. To educate the core team in new ways of thinking and assessing service efficiency and value;

3. To get the core team to recognise and commit to the need for change.

To do this our workshops cover both analysis and training in Lean-based service analysis and improvement principles. Thus the team members are able to map the existing service and identify key wastes. I guided the team in profiling the value provided to clients and the service experience they receive. I then prepared them to visit a number of selected clients to get their views on the service provided by the firm and to identify service improvement opportunities. In parallel I worked with the partner champion and Finance department to gather financial performance information on the service to identify typical matter cost and the resulting profit margin. So at the conclusion of the AS-IS phase we had a rich, detailed picture of the existing performance and issues of the two services and a growing list of potential improvements, which the partner champions and I reported to the Steering Committee.

Equally important in this phase is the development of the team – both in the beliefs and capabilities of the individual members and the team’s effectiveness as a whole. Initially in these two projects there was more than a little doubt in the team members about the value of this programme. The most experienced and senior associate in the claims management team was frankly dubious that their working methods could be improved in any significant way. This is not an unusual reaction in our legal projects, as process-thinking is not common in law firms. Indeed a lot of the concepts and thinking that we introduce to the team – such as Lean thinking, waste identification, process mapping, service disaggregation and right-skilling – is new and indeed alien to most lawyers! As our approach is deliberately collaborative with the team members actively performing mapping and analysis, they each make a journey of self-discovery by using these techniques and seeing the results for themselves. This results in an important transformation of individual thinking and leads to a level of buy-in to the resulting changes that is far deeper and permanent than a consultant-enforced change.

Re-engineering personal journeyThat very much proved to be the case here, with the formerly resistant associate lawyer, obviously enlightened and energised following the AS-IS, then working in her spare time to outline a new ‘TO-BE’ process for performing the claims management service that would reduce the time required to perform the service by nearly 75%. This is an outstanding example of individual change. But it is not uncommon and I find that fee earners are generally surprised at the level of inefficiency that their process mapping and waste analysis reveals. So by the end of the AS-IS phase they certainly recognise the need and also the obvious scope for improvement. To capture the insights and energy that builds in this phase we start capturing a list of improvement opportunities in the first workshop and build it during the AS-IS phase. New ideas are allocated to team members who are responsible for providing an initial exploration and recommendation as to whether this idea should go forward and even be a ‘Quick Hit’ project (we implemented a number of these in the claims management project during the AS-IS phase). This further engages team members and also provides a useful first ‘filter’ on new ideas. To broaden engagement beyond the core teams we used a ‘Living Walls’ approach to share our findings with the rest of the fee earners working on the service – and get their feedback – using large paper charts pinned up in working areas

Some of the major challenges in the AS-IS phase in this programme were: Difficulty in getting accurate service cost data and issues of fee earners fitting in project work alongside their existing client workload. These are challenges typically experienced in most of our legal re-engineering projects.

The TO-BE phase – designing a new service and new working methods
The objective of the TO-BE phase is to build on the learning from the AS-IS phase and design a new process, with a supporting organisation and IT, for delivering the service which is significantly more efficient (to yield cost savings) and provides higher value and a better experience for clients. In addition an implementation plan with supporting resourcing and business case are needed to validate the case for change.

To help in ‘framing’ the team’s TO-BE work, we typically use a ‘Vision workshop’ at the start of this phase with a number of partners and managers. We share the team’s AS-IS findings and work to develop a 3-5 year Vision for the service, with measurable targets. In this programme I ran a vision workshop for only one of the two services, where the multi-office and multi-partner operation of the service meant that it was valuable to share progress and likely changes to get partner input and eventual buy-in to support the partner champion.

In the TO-BE phase I worked with each team using a number of innovation tools and the existing ideas list to generate a number of ‘transformational concepts’ for the new service which we then mapped. This provided a blueprint for the new service which required much less time and cost to deliver whilst improving on the existing client service. The concepts were developed into transformation projects, making use of Codexx project definition templates, and an overall implementation plan and business case for change.

Interestingly, whilst at the start of the programme both teams were adamant that a new case management system was needed to enable major efficiency improvements, they did not eventually recommend this in the TO-BE phase. For by then it was clear that whilst the existing Case Management software was indeed old and ‘clunky’ the implementation of new case plans and templates to support the new TO-BE process would enable major improvements. So for now the old case management system would be ‘good enough’ – which improved the business case for these changes.

The major changes in the new TO-BE process for each service was an underlying process that was optimised to reduce required fee earner time, that was ‘right-skilled’ to push work down to the lowest skill level that it could be performed at with acceptable quality, that was ‘codified’ using templates and documented procedures that captured and deployed the ‘one best way’ approach for repetitive work elements, making use of Case Management to control workflow and deliver documents. Both services also changed the way in which experienced associates and partners were used in the service. Their time was reduced and focused on ‘up front’ matter strategy to guide fee earners rather than ‘back end’ review and checking of work already performed – to maximise their value and minimise fee earner inefficiencies. This freed up the most experienced (and expensive) fee earners to work on more complex work.

Overall the TO-BE for both services moved them from a rather informal working approach, where issues in resources and controls had led to variable (and expensive) outputs, to a more systematic working approach with improved resources and controls leading to more consistent outputs, at lower cost (see diagram below).

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Implementation – changing behaviours and realising business benefits
The objective of the Implementation phase is to realise the TO-BE service by executing the defined transformation projects. Both programmes required the development and documentation of new templates, a ‘new process bible’ and updating the case management processes and screens (though keeping the existing case management system).

Implementation is always a challenge. The Managing Partner of one of our clients referred to it as ‘the grind of implementation’, which is an apt description. For the AS-IS and To-BE workshop phases of a re-engineering programme are ‘new and exciting’ with much collaboration. But in contrast, Implementation is more akin to ‘heads down’ and ‘get it done’ by project teams working on their own for much of the time – whilst team members also juggle a case load of work. It’s tough. We recognise this and particularly the challenge for time from client work. To help in this we provide a monthly progress review with the project leaders and partner champion, to keep at least a ‘monthly pulse’ of project work and to identify issues early. Despite this, we find that law firm projects typically slip and on this programme it was no different with most projects completing 8 weeks late. One key reason for this is that it is the core team members that typically lead the transformation projects and it is difficult to get their case load reduced during the implementation period (despite our recommendations) so they are typically very busy.

Our two programmes differed somewhat in their implementation experience. The claims management service was delivered from one office and thus is was easier and thus faster to get the required buy-in and implement the required changes. The clinical negligence service was delivered from teams and partners located across three offices. The partner champion thus had the added challenge of streamlining a service using fee earners who did not directly report to him, necessitating working to get the buy-in of other partners. In addition this service was more complex and thus required more work on process detailing and case management changes.

Continuous Improvement – locking in and extending improvements
I have been placing more emphasis on this phase in our re-engineering projects with law firms. This is because there is always the danger that the new methods and resulting improvements can fade away, as these islands of ‘new ways of working’ are surrounded by a large ocean of ‘business as usual’ in the rest of the firm…. So locking in new ways of working is key to retaining their benefits. But this is really not enough. For the reality is that there will continue to be downward pressure from clients on fees. So unless the firm wishes to suffer eroding margins, it needs to find further improvements over time.

So the objective of the Continuous Improvement phase is to lock in the existing improvements and establish a simple and ‘light touch’ system for identifying and implementing ongoing improvements that will further improve service and cost-effectiveness. Key elements that we put in place for these two services were a performance dashboard with monthly updates and at least a quarterly session involving team members to define improvement needs. One ongoing challenge is how best to reward fee earners delivering a fixed fee service and motivate them to further improve service efficiency – whilst their conventional targets and compensation are based on chargeable time… As part of these two programmes the firm recognised the need to develop new mechanisms for fee earner recognition based more on revenue and profit generated than on time recorded.

So what were the outcomes?
Both services have now been operating with the new methods for around 9 months at the time of writing. Compared to their operation prior to re-engineering, the claims management service has reduced costs by around 70% whilst maintaining service quality and improving reporting and billing quality. In addition, the firm has strengthened its relationship with the financial services client  receiving the service, as the firm’s lean-based improvements were seen very positively by the client. The clinical negligence service has reduced costs by around 50% whilst improving service consistency and providing a faster service to its public sector client.

This significant cost reduction meant that both services are now providing a good level of profit to the firm. In addition, the fee earners in the teams working to the new methods have given a very positive feedback – a key reason being that they are finding the work less stressful than before – whilst delivering  a better service at higher productivity. One team has used their process analysis experience to map and analyse a related support process which had performance issues. The firm subsequently commenced two more service re-engineering projects with Codexx.

Customer-focused redesign of internal service functions

Monday, November 2nd, 2015

Customer Service


It is all too easy for internal support functions, such as IT, R&D or HR, within organizations to lose sight of their purpose and their customers over time, resulting in poor service and inefficiency. For such functions do not operate in an open market where customers are the final arbiter and can take their business elsewhere. The result can be costly and poor internal support, which adversely impacts the performance of the entire organisation. So how do organizations ensure that internal services are provided effectively and efficiently?

Such a question was asked in the European operation of a global engineering company as part of a major transformation programme driven by the business challenges resulting from the 2008 economic crash. The function in focus was a production support function, responsible for the development, maintenance and enhancement of production lines and new production technologies for multiple factories in Europe and internationally. This function was key to the business as it provided important core competencies in new production technology platforms and automation. Codexx was asked to perform a review of the function as part of the transformation programme. The specific remit was to clarify current task responsibilities and interfaces, determine key problem areas and identify required improvements. This was a sizeable organization of more than 200 engineers and technicians, centred in northern Europe, but with teams also based in Eastern Europe and China.

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A customer-focused approach
We took a customer focused, service-led approach to the review, rather than focusing on the existing organisational structure. We did this as we considered the delivery of these services as the fundamental mission of the function. If we had aligned our approach with the existing departmental structure, we would have limited our thinking. We defined four key services provided by the function and focused our review on how well these services were delivered. We then identified five key internal customers, such as the factories and the R&D function, and then interviewed them to get their views as to the key measures of success for the services provided to them.

Assessing organizational effectiveness
To review the effectiveness of the existing organisation and to point the way towards structural improvements, we asked each department within the function to determine the % of their workload spent on each of the key services and their key challenges in performing this work. We also asked each department to identify the % of their time spent working with each of the other functional departments and also their customers. This helped us identify any misalignment in the current organisational structure.

We then assessed the quality of the service delivered and the efficiency of delivery for each of the four services using workshops with the key internal customers. In these workshops we identified the key service touch points or ‘moments of truth’ to determine how well the function was serving each customer. This provided a very clear ‘voice of the customer’ which was very specific in their requirements and issues.

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Identifying service breakages
We then held workshops with the key functional departments to feed back these customer views on their service performance and to identify the root cause ‘breakages’ within the department’s operation or processes that was causing the identified issues. We reviewed each department’s effectiveness at working with other functional departments and identified opportunities for improvement. We also worked with each department to get their assessment on the effectiveness of the currently defined business processes, including how well they were documented and deployed. We found that whilst the organisation was progressive in its use of process management, with a defined set of business processes, there were weaknesses in how well these processes were actually ‘lived’ in daily business.

Defining improvements
Our approach was deliberately collaborative and we engaged 80 managers and employees in the review – covering both those in the function and those who were customers of the function’s services – so that we could be sure that we had a good feel for the function’s service requirements, its performance and key underlying challenges.

This enabled us to identify key ‘breakages’ in the existing function, such as weaknesses in the function’s role in the critical NPI (New Product Introduction) process, weaknesses in the strategy and definition of production technology platforms and challenges in providing sufficiently responsive production support. In developing improvements we maintained our service-led customer focus. We were also guided by visioning work we performed with the function’s management team that identified increasing trends of globalisation of production, increased cost focus and speed to market – which the function had to meet if they were to maintain a viable future within the organisation (for outsourcing of internal services was increasingly an option to be considered).

We asked fundamental questions (see first diagram) about how best the required services should be provided, to meet internal customer needs and to do so in a way that was affordable. Based on this and the findings from our stakeholder and internal assessment, we identified 7 key improvement projects. These covered improved internal processes – particularly in the definition of completion criteria at key stages – also improvements in the platform development approach and organisational changes to provide improved and ‘joined-up’ services to production customers. We then worked with the functional managers to define an implementation programme.

Internal service functions should be able to demonstrate effective service delivered in an efficient manner. If this is not the case, they need to be re-engineered or outsourced. A customer-focused service-led approach can be effectively used to assess the performance of an internal support function and to define any improvements required. Due to the high engagement of internal customers in such an approach, it is much easier to get their support for any required changes.

From benchmarking to best practice sharing

Tuesday, May 5th, 2015

by Alastair Ross and Martyn Luscombe


The term ‘benchmarking’ originally emanated from the practices of cobblers, measuring people’s feet on a bench to make a pattern for a shoe. It was appropriated by business in the 1980s when progressive companies began to formally ‘benchmark’ themselves against each other. Its purpose was to drive business improvement based on identification of superior practices in other organisations. Xerox was the first major business to popularise it and since then it has become a core tool in the business improvement toolkit. Whilst benchmarking can be a very effective tool in catalysing and focusing improvement, it can also be easy to misuse, with the result that the not insignificant resources required can fail to yield usable improvements.

Codexx has gained significant experience in benchmarking programmes since it was established in 2002 and our consultants have additional benchmarking experience gained from their work with previous employers such as IBM, Philips and Cranfield School of Management. Our experience includes the benchmarking of manufacturing practices and performance, supply chain management, R&D, general business innovation and law firm innovation. This experience has given us a good feel for both the strengths and weaknesses of benchmarking as a whole. In this short article we want to share some of the key lessons we have learned and our recommendations on how to best to use benchmarking methods in your own improvement programmes.

To help in establishing a framework for assessing the use of benchmarking, it is important to recognise that in practice ‘benchmarking’ covers a wide range of approaches, each with their strengths and weaknesses. We have divided benchmarking into three distinct types and evaluated each on their merits based on our experience in applying them:

  • Quantitative benchmarking
  • Quantitative practice assessments
  • Qualitative practice assessments

In practice, many benchmarking assessments will be a hybrid of two or more types to suit specific requirements. A key success factor in benchmarking is not to lose sight of the goal. In benchmarking the goal is to be able to use the assessment findings in a practical way to catalyse, focus and effectively execute changes in business practices which will yield performance improvement. The benchmarking findings (the ‘score’) should never be seen as an end in itself – although, in our experience, that can all too easily happen as managers use the findings simply to validate a past or planned action, rather than to use it to drive improvement.

1. Quantitative benchmarking

This type of benchmarking can be considered as the ‘classic’ benchmarking with its focus on comparing the selected business against a defined set of performance metrics and comparing the results with a database of other businesses on an anonymous basis.

Sometimes benchmarking exercises make the mistake of focusing solely on performance metrics, and only part of the story is revealed. By also comparing business practices in an objective way (e.g. through the use of maturity grids) a more valuable assessment can be performed helping to answer the ‘why?’ as well as the ‘what?’ of the scoring. For example, if a manufacturing company is shown to have high inventories compared to the average in its sector, weak practice scoring in the use of lean practices and the use of large production batches would explain this poor performance and give management a list of areas for improvement.

A good example of this type of benchmarking is the Probe manufacturing benchmarking tool. This was developed by IBM Consulting and London Business School in 1992 as an objective way of assessing a manufacturing operation against world class standards. It was based on a model of World Class Manufacturing that drew heavily on lean thinking. The benchmarking tool provided numerical scoring based on practice maturity and measurable performance achievements, and grew to a database of over 2000 manufacturing sites. Codexx has been a licensed user of the Probe manufacturing benchmarking tool since 2002 and we have used Probe for multi-factory benchmarking on a regular basis.

An excellent example of a company that has successfully applied best practices benchmarking and improvement is Grundfos, the leading global pump manufacturer with factories in Europe, America and Asia and headquartered in Denmark. Grundfos started using best practice benchmarking using PROBE in 1996 to assess the practices and performance in its factories. This identified gaps with best practices including the need to utilise Lean manufacturing approaches. Grundfos commenced implementation of lean manufacturing techniques across their factories from 1997 and continued regular PROBE benchmarking supported by Codexx. In parallel it used EFQM to drive overall Business Excellence. Grundfos Denmark won the EFQM award in 2006. In the PROBE benchmarking assessment in 2008, their Danish factories scored at a world class practice level. The result has been clear improvement in key performance indicators such as on-time delivery, inventory turns and quality.

New Directions 19 - benchmarking article - Figure 1

Figure 1: Example of practice v performance scatter for PROBE manufacturing benchmarking



  • Uses a structured approach and provides quantified comparisons with other organisations on an anonymous basis.
  • The large database of businesses that have been benchmarked against the defined practices and performance provides an authoritative comparison.
  • This can be a cost-effective approach – the license or consulting fee required will be less than the total cost of a ‘do it yourself’ approach.
  • The benchmarking exercise can be performed without visiting other companies so does not require much time.


  • The underlying model that the benchmark is based on is key to its relevance and its makeup should be clear to participants. It is all too easy for this to be complex and opaque and therefore unclear as to the validity and relevance of the final scoring.
  • Performance benchmarking alone does not provide easily actionable improvements. An effective Quantitative Benchmarking tool will cover both practice and performance.
  • The scope of the benchmark and the practice and performance areas covered are pre-defined by the benchmarking model and there is little or no room for flexibility.
  • Valid comparison is based on the assumption that all participating organisations define the compared metrics in the same way. It is up to the benchmarking assessors to ensure this is the case and if participating businesses are self-assessed, this cannot be guaranteed. The danger is that if the metric is ‘apples’, some organisations will actually be measuring ‘pears’… And this can easily be done. For example one global engineering company found that each of its international subsidiaries had different ways of measuring ‘on time delivery’; so a benchmarking performance question that asked for ‘on time delivery performance’ could get a high variety of %results from across this company even if they actually had identical performance…

2. Quantitative practice assessments

This benchmarking approach uses a defined framework of key practices with levels of maturity, i.e. from weak to strong practices. It is used when there is an absence of a large database of companies which have been assessed against these practices, so quantitative benchmarking is not feasible. Typically this would be because the nature or scope of the practice area is not wide enough to have merited academic or consulting study and the development of a benchmarking programme. This approach suits niche assessments of specialist areas, where a structured comparison against best practices is required. The lack of a database of comparative data means that the process must involve a number of like-minded organisations, all seeking to learn how to improve performance in the area involved.

Codexx used this approach to help a client perform benchmarking of production maintenance practices as part of a re-engineering programme for maintenance across 8 factories. The objectives of the benchmarking were:

1. To help ‘open the eyes’ of the maintenance managers to better practices in other maintenance organisations – and thus encourage change.
2. To provide a quantifiable comparison of practices and some key performance metrics with organisations with measurably better maintenance operations to provide a set of improvement targets.
3. To provide examples of improved practices which could be transferable to their business.
4. To learn about each company’s ‘journey’ to their current maintenance practices and benefit from their learning.

We initially looked to use a commercially available benchmarking tool for this work, but we found no tool that was broad enough to meet the client needs (most were focused on specific aspects of maintenance such as cost). We therefore developed an assessment framework built around a skeleton provided by the ISO 9001 8 principles of quality management. On this skeleton we added maintenance-specific practices and performances and developed this assessment model collaboratively with the client’s re-engineering team of maintenance managers – with whom we were already working. This approach was used to benchmark five other European companies, using 1 day visits – attended by the majority of the maintenance managers – supported by prior data sharing and preparation. Each participating firm was provided with an assessment report and overall scoring – it was important to ensure that each participating company gained value from the exercise. The assessment approach provided much insight to the maintenance managers and was used to develop improvement projects as part of the re-engineering programme. The scoring also provided a measurable set of practice and performance targets that were used over a three year period to measure re-engineering progress, with 6-12 month self-assessments against the framework (more information).

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Figure 2: Extract from F4i showing questions on innovation practice maturity.


Another example of this approach is in the development of the Foundations for Innovation (F4i) assessment tool by Codexx in 2006. This was born our of our recognition of a lack of a cohesive tool for assessing an organisation’s innovation ‘health’ in a cohesive and objective way. F4i was developed with the support of Imperial College Business School to bring academic rigour to the development of the assessment tool. Based on an academically validated model of innovation, it used 60 key innovation practices and performance metrics to enable a quantitative assessment of innovation in a business (see figures 2 & 3). We have used F4i in innovation assessments of industrial and service organisations across Europe, USA and China. F4i does not have a large database of companies – we focus primarily on how participating organisations score against the defined practices and more importantly in the underlying reasons for weak practices. We took a similar approach in the development of an innovation assessment for the legal sector, building on our experience of working with major UK law firms in innovation since 2005. We used this to perform a study of innovation in 35 UK and German law firms, together with the business schools of Exeter and Leipzig universities (more information).


  • The assessment framework can be tailored precisely to the specific needs of the organisation (or group of companies) involved.
  • The assessment approach can again be tailored as required.
  • Learning is gained from the visits to other organisations.


  • It is typically a more expensive approach to benchmarking than Type 1 as all the costs of development usually have to be borne by the lead partner(s).
  • There needs to be mutual value in the assessment for each participant and the lead organisation needs to recruit the involvement of others and typically cover the costs of the framework, travel to the other companies and in the scoring and reporting.
  • The limited number of participants results in a limited data set which restricts the ability to identify and validate relationships between practice and performance. Findings are thus more indicative than anything.
  •  A custom assessment framework needs to be developed for the benchmarking exercise by one of the parties involved in the assessment or by a supporting consultant.

New Directions 19 - benchmarking article - Figure 3

Figure 3: Example of ‘traffic light’ scoring against overall F4i innovation model.


 3. Qualitative practice assessments

This final type of ‘benchmarking’ is comparatively unstructured and primarily produces a qualitative assessment. One could argue that this is what normally happens in ad hoc and unstructured visits to other companies. Such informal benchmarking is sometimes referred to as ‘industrial tourism’ where the lack of any objective or structure to the visit results in limited value and few actionable outcomes. We are not advocating this approach. Structured qualitative practice assessment does have objectives and an assessment framework but it is deliberately loose. Codexx have facilitated a number of such assessments in a practice sharing programme on manufacturing technology areas, between a major Scandinavian and German manufacturers where there was mutual interest in a specific area of production technology development and the companies did not compete directly in their customer markets but were mutual users of each other’s products. Our approach to these assessments was to develop an overall practice framework (again based around the ISO’s 8 principles of quality management) and develop specific practices around this framework in collaboration with the two companies. An assessment visit programme was arranged and the framework used to scope and focus discussions. Key findings from the assessment were documented for each company.


  • Suitable for use in highly specific business areas where an existing benchmarking tool is unlikely to be available.
  • Learning is gained from the visits to other organisations.
  • The flexible framework enables practice sharing visits and discussions to accommodate discussion and evaluation of thinking, methods and experience which emerge as of value to participants, and would not easily be accommodated in a tight prescriptive assessment format. Basically ‘best practices’ in this area are not well defined or understood and so the assessment approach needs to accommodate emergent practices that have proved to be of value to at least one of the participating organisations.


  • Requires participants to each have areas of practice which are perceived to be progressive by other partners, so each participant can learn from the assessment – not just teach the other participants. This means that pre-work is typically required to engage participants and establish the potential for a mutually beneficial practice sharing arrangement.
  • There is a danger that the assessment will be so flexible and loose that it becomes difficult to make objective comparisons to enable effective learning for participants.
  • Again one party needs to take the lead in such a practice sharing programme.

 Final Words

Benchmarking is a proven way to compare an organisation’s effectiveness with others and do this in a way that provides objective findings that can be used to catalyse business improvement. However, sometimes traditional benchmarking can be expensive, too ‘one size fits all’ and its scoring opaque to participants.

Less formal methods, based around ‘practice sharing’ can be effective at achieving the required objectives of catalysing improvement – without the ‘heaviness’ of typical benchmarking – and enabling a more personalised fit to the requirements of the participants.

Overall, it is key that, whatever benchmarking approach is used, participants do not lose sight of the ultimate aims of the activity: to catalyse and focus improvement activities.

Energizing Change

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