'Lean' and Mean

'Lean' and Mean | Human Resource Executive Online Working closely with its RPO provider, the staffing department at GE Healthcare was able to greatly increase its efficiency and effectiveness.

Monday, March 16, 2009
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At most companies, organizing your desk and keeping it thus is considered a basic, but not especially important, routine. Sure, it's always better to have papers stacked neatly and everything in its place but, at the end of the day, so long as you're being productive, does it matter all that much? At GE Healthcare, it matters a lot.

There, the cleaning and organizing of employees' desks was a key part of its staffing department's effort to transform itself into a paragon of productivity and efficiency. The department wanted to try something unusual: apply the principles of Lean manufacturing -- a fundamental part of which is eliminating clutter and disorganization -- to the recruiting process. 

"It's about establishing a standard and then adhering to that standard at all times," says Kim Martin, Wauwatosa, Wis.-based GE Healthcare's global head for talent acquisition.

"Lean manufacturing" is commonly defined as a management philosophy that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination.

The practice was pioneered early in the last century by the Ford Motor Co. and was later refined and expanded upon by Toyota Motor Co. after World War II to help it eliminate product defects and wasteful practices. The Lean principles were popularized in this country by the book The Machine that Changed the World, published in 1990, and has been credited with helping companies in the United States accomplish feats ranging from tighter inventory management to improved product quality.

By applying the Lean methodology to its own work, GE Healthcare's staffing department and the recruitment-process outsourcing firm it uses, Milwaukee-based KellyOCG, were able to make significant reductions in their time-to-fill and error rates. All told, the staffing department has implemented more than 50 process improvements as a result of its Lean initiative, says Martin.

Yet Martin and her team faced a big challenge at the initiative's outset: How would they apply Lean, typically used in a manufacturing environment, to the staffing process?

Improvements Needed

Although it's a division of Fairfield, Conn.-based General Electric, GE Healthcare is a behemoth in its own right: It employs approximately 46,000 people worldwide, had $16.9 billion in revenues in 2007 and (prior to the current economic downturn) made approximately 4,000 hires per year. Its portfolio includes everything from MRI machines to diagnostic equipment to services designed to help healthcare organizations manage themselves more effectively.

Shortly after assuming her current role in 2006, Martin decided the staffing department would apply the Lean methodology to its own work. Ron Sullivan says it may be the first time this has ever been attempted.

"Manufacturing is all about cycle time through the factory," says Sullivan, who oversees Lean/Six Sigma practices at GE Healthcare. "If you're able to reduce that cycle time, that lets you meet customer demand more quickly, react more quickly when customers ask for changes and drive significant improvements in internal inventory reduction."

"About three years ago, we began applying Lean to our transactional processes," he says. "The difference is that with manufacturing, you're able to actually see the work that's getting done."

In other words, it's much easier to demonstrate to workers on a production line both the need for improvements in the production process -- by showing them defects in finished products, for example -- and the results of improving those processes, i.e. reduced defects and less waste.

When it came to recruiting -- where both the work and the results tend to be far less tangible than in manufacturing -- the challenge was to help recruiters visualize the need for change and the results of making those changes. 

Nevertheless, Martin believed Lean was perfectly applicable to the staffing function.

"After spending a couple of months looking at how things were done in staffing and the issues that were being raised by our customers, I kept coming back to the fact that, even though we didn't have a tangible product, at the end of the day, we still had a service," she says.

That service needed some improvement, she adds. The issues raised by customers (hiring managers) included concerns about the rate of errors in job postings and offer letters. There was also a lot of room for improvement in the amount of time the department took to fill open positions, which Martin says averaged about 90 days at the time.

Another problem boiled down to simple organization: When a staffing team member was out sick, the task of covering for him or her was made more difficult by the fact that the department had no standardized way of filing and organizing information, says Martin.

"Everyone had their own way of doing things," she says. "They had their own way of organizing interview notes and background-checking results, which meant employees who had to cover for someone who was out sick had to spend a lot of unnecessary time trying to track down that information."

Getting Organized 

Working in close partnership with KellyOCG, Martin teamed up with Sullivan to apply the Lean principles to the recruiting function. Sullivan had at his disposal so-called "master Lean leaders" -- experts with 20 or more years of Lean experience at companies such as Toyota, Honda and General Motors -- who served as advisors to Martin and her team.

The staffing department is comprised of five recruiting managers who are full-time GE Healthcare employees and about 30 on-site KellyOCG employees who work closely with the managers. At the outset, there was a fair amount of skepticism within the department about the initiative, says Sullivan.

"By definition, there's skepticism across the board when you try something different than before," he says. "People tend to get comfortable with the way they've been doing things, and staffing was no different from any other department in that regard."

One hurdle in particular was changing the mind-set of the team members, says Martin.

"These were folks who were used to organizing stuff in their own way, and it was tough getting them to think in terms of standardization," she says.

A key principle of Lean is that new processes must become a permanent part of a work routine. Martin decided a good way to help recruiters understand the importance of standardization would be to apply Lean's "5S method" to how they organized their desks. 5S is a method for organizing the workplace pioneered by Toyota, and stands for "sorting, straighten or set in order, sweeping (or shining and cleanliness), standardization and sustaining." The last part -- sustaining -- is especially important, says Martin.

"It's one thing to organize your desk," she says. "It's another thing to have an organizational method and maintain it on a regular basis, so we started with that concept because it teaches the team about having a standard and complying with it all the time. We started with this to ingrain the concept so, as we moved on to more difficult concepts, we had this foundation of 'I get it.' "

Some of the cleaning and organizing was clearly overdue, says Martin.

"We had people with interview notes or files left over from five or 10 years before that they hadn't thrown out or organized," she says.

The Importance of "Kaizen" 

Once the staffers organized their workspaces (and were keeping them organized), the team moved on to tackling waste and inefficiency throughout the department, relying on "kaizen" to move the process along. Kaizen, a Japanese word, refers to the practice of making changes, monitoring results and then making adjustments as needed, and is another key element of Lean.

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At GE Healthcare, kaizen was used to improve the company's candidate slate process. Originally, the staffing department relied on multiple systems for sending, updating and storing compliance-related hiring information. After analyzing the process, Martin and her team decided to simplify it, making better use of its existing applicant-tracking system and creating one standardized form that replaced the multiple forms used before.

The team also began using "visual management" to help spur improvement. When a problem is identified by a team member, a standardized "problem-solving card" is filled out in which the problem is described, along with its frequency and scale.

The card is then posted to a "problem-solving board" in one of the company's public areas. The problem-solving board is divided into three sections: "open," "pending" and "closed." The card is moved through each section based on the team's progress in resolving the problem.

The visual-management approach is an ironic twist in today's computer-centric world, says Sullivan. 

"People today are so used to the computer being the repository of knowledge, but we went back to paper -- to putting charts on bulletin boards and making it visible to everyone," says Sullivan. Doing this helps the staffing team address the fundamental challenge of applying Lean to a transactional process such as staffing by letting it "see" problems and the progress it's making in solving them, he adds.

Other bulletin boards feature "value stream maps" that describe every step of each recruiting process. The maps help team members work together to identify areas for improvement and then monitor their progress on achieving those goals, says Martin.

"Before, we would talk about metrics but there was no visual space that let team members and our customers 'see' them," she says. "Putting them up on the boards and updating them every day puts our most critical measures of success right in front of us."

The boards are supplemented with daily "stand-up meetings" in which the entire team gathers at the beginning of the day to discuss their progress on various goals and initiatives, recent events (if the ATS was "down" recently, for example) and any concerns or issues team members might have.

The meetings typically last for 15 minutes or less and are conducted with everyone standing, says Martin.

The visual-management boards, stand-up meetings and other routines have been crucial in reinforcing the Lean concept of continuous improvement, she says.

"There's no endpoint to Lean," says Martin. "It's about getting people into the mind-set of making process improvements and then sustaining them."

Since the Lean initiative began three years ago, the staffing department has reduced its time-to-fill rate from 90 days to 60, and has reduced the rate of errors in job-offer letters from an average of 124 per month to 22. Its office space has been reorganized for much greater efficiency, says Martin, and, in addition to the 50 process improvements the team has already made, it's currently working on 26 additional ones.

Just as importantly, team members are able to devote more time to strategic activities, she says.

"We have a pilot going on now in which one of our recruiters is working with a business unit on its workforce planning," says Martin.

Zachary Misko, global director of KellyOCG's RPO practice, says the success of GE Healthcare's initiative has led KellyOCG to begin helping its other clients apply the Lean principles to their staffing functions. It's taking the same approach to its own recruiting processes, he adds.

"[Lean] allows us to help people understand where their work performance is now and how they can build their skills to get where they need to be," he says.

As for Martin, she's especially proud of the fact that the team was able to accomplish its objectives on its own, without help from outside consultants.

"Our own team -- the KellyOCG team and the GE Healthcare folks -- really worked together to make this happen," she says. "It was all done by people who had full-time day jobs."

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