Technovation 104 (2021) 102269

Contents lists available at ScienceDirect

Technovation
journal homepage: www.elsevier.com/locate/technovation

Lean additives in a service factory: A design science approach

Vijaya Sunder M a, *, L.S. Ganesh b
a
Indian School of Business (ISB), Hyderabad, 500032, India
b
Department of Management Studies, Indian Institute of Technology Madras, Chennai, 600009, India

A R T I C L E I N F O A B S T R A C T

Keywords: The aim of this study is to explore the practical application of Lean with Six Sigma and Agile to create a powerful,
Lean synergetic and novel process improvement (PI) method. Going beyond the traditional definitions of Lean, we
Six sigma establish a Factory Physics view of PI which doesn’t technically discriminate Lean from non-Lean. We apply a
Agile
design science approach to help a global bank deploy a continuous process improvement program. By reviewing
Design science
Factory physics
the literature on PI, we recognize Lean additives viz., Lean Six Sigma and Lean Agile, when synergized, help
Process improvement overcome the limitations of individual PI practices. Our design takes its roots from Factory Physics (FP) and
emerges as a novel model synthesizing the theoretical lens of FP with Lean additives for field application. Besides
the design of ‘Lean Additives Program’, we deployed the model in several iterations, and studied its performance
over a three-year period. The improved system exhibited high levels of efficiency and effectiveness. The longi­
tudinal case evidence demonstrates that Lean additives offer both operational and strategic benefits in firms.

1. Introduction Scholars and practitioners have highlighted Lean as a most successful

PI practice in both manufacturing and services (Holweg, 2007; Piercy
Research literature shows evidence of how process improvement (PI) and Rich, 2009; LaGanga, 2011; Hines et al., 2004). However, critics
leads to the development of quality advantage in firms (Wang et al., raised concerns that Lean in isolation is not all perfect. For example,
2016; Su et al., 2014; Bessant et al., 2001). There is ample research on Bhasin (2015) claimed “… even Toyota in Japan, failed to produce in
various PI theories (like TQM, Lean, Six Sigma, Kaizen, etc.), their ap­ several circumstances, cars to actual customer order”. Bhamu and Sangwan
plications and success stories (Powell,1995; Linderman et al., 2003; Nair (2014) observed several firms that reported initial gains from Lean
et al., 2011; Schroeder et al., 2008). However, not all firms that invest on implementation often found that they were unable to transform the
PI succeed. While corporate PI programs and academic research offer short-term successes into a continuous PI culture. Further, Lean by itself
insights into various PI concepts, many firms have failed in their in­ does not offer a project management roadmap. According to Spear
vestments towards reaping the holistic benefits of PI (Bhasin, 2015; (2004), many organizations incorrectly perceive Lean as a set of tools
George and George, 2003; Antony and Gupta, 2018). Some studies es­ and practices rather than as a PI philosophy. This misconception has led
timate failure rates as high as 60% (Sunder M and Prashar, 2020; Naor, to confusion in many firms in their attempts to motivate employees to
2008). One likely reason for these failures is the lack of approaching PI take part in Lean programs. Further, the bottom-up approach of Lean
from a wholeness view, by restricting it to individual PI practices makes it more challenging to gain organizational leaders’ commitment
(Chakravorty, 2009). For example, both 3 M and Home Depot aban­ towards it (Sunder M et al., 2018). Another drawback is, unlike other PI
doned their Six Sigma programs due to their negative impact on their programs including Six Sigma, Lean is not a data-driven approach.
employee and customer satisfaction (Hindo, 2007; Hindo and Grow, Technically speaking, what constitutes Lean and what is non-Lean has
2007). Such a ‘one size fits all’ approach clearly contradicts the been unclear. This is because Lean, after originating from Toyota, has
long-established contingency perspective (Vanderstraeten et al., 2020; taken several shapes and evolved into many forms (Pettersen, 2009).
Zhang et al., 2009), and the whole is often other than (or, sometimes This could be a reason why some organizations that claim following
more powerful and effective than) the sum of individual parts (Sunder M Lean, may not be true in many cases. However, when integrated with
and Ganesh, 2020b). This is because every PI practice is unique with other relevant PI strategies, Lean’s shortcomings can be overcome.
specific advantages and shortcomings (Sunder M, 2016b). Then, an effective continuous PI system, which could be a strategic

* Corresponding author.
E-mail addresses: [email protected] (V. Sunder M), [email protected] (L.S. Ganesh).

https://doi.org/10.1016/j.technovation.2021.102269
Received 4 April 2020; Received in revised form 19 February 2021; Accepted 23 March 2021
Available online 11 April 2021
0166-4972/© 2021 Elsevier Ltd. All rights reserved.
V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

resource suitable for both Lean and non-Lean organizations with a wider were eliminated using the Mendeley desktop software. Among them,
scope of application, can be realized (Hines et al., 2004; George, 2003). articles published in ABS Academic Journal Quality Guide 2015 were
We seek to complement the Lean body of knowledge with that of Six identified and retained. Reading through the abstracts, relevant articles
Sigma and Agile by exploring the effect of their synergies on a problem were retained, and other articles that were not directly related to the
in an authentic field setting. We recognize that Lean additives – a term study’s concepts were eliminated. According to Zorzini et al. (2015), a
found more commonly in the world of practice – viz., Lean Six Sigma mechanical search of review articles should be supplemented by an
(LSS) and Lean-Agile (LA), when implemented along with traditional organic search to obtain comprehensive search output. Hence, an
Lean tools and techniques, help overcome each other’s limitations for organic search was performed to identify other relevant papers that
emergence as a powerful synergy (Sunder M et al., 2018). The basis to were cited in these articles, and a Microsoft Excel database was formed.
this thinking comes from the correlation of Lean additives’ impact with A few seminal articles that were outside the ABS Guide 2015, and a few
firm performance in both manufacturing and service contexts, presented articles from a few specialized journals were then identified and
individually in the past studies. For example, studies by Swarnakar et al. included to our database, resulting in a total of 126 papers. The
(2020), Sunder M and Ganesh (2020a), Wang et al. (2019) and Honda following sections give overviews of the different theoretical perspec­
et al. (2018) pointed the impact of LSS on firm performance. Similarly, tives that were integrated using the design science approach for
studies by Qamar et al. (2020), Ghobakhloo and Azar (2018), Gal­ conceptualization, design and deployment of the LAP in the study unit.
ankashi and Helmi (2016), Naim and Gosling (2011), etc., highlighted
the impact of LA on firm performance. Further several review articles 2.1. Factory Physics
available on LSS and LA have portrayed their applicability in different
sectors across manufacturing and services, emphasizing their correlation According to Hopp and Spearman (2004, 2011), Factory Physics (FP)
with firm performance (Yadav and Desai, 2016; Yadav et al., 2017; is “a systematic description of the underlying patterns and behaviors of sys­
Muraliraj et al., 2018; Singh and Rathi, 2019). tems to enable managers to work with the natural tendencies of processes to
In this study, we use a design science approach to design and deploy identify opportunities for improving existing systems, design effective new
a PI program using Lean additives, from scratch for a global bank for systems, and make the trade-offs needed to coordinate policies from disparate
deriving both operational and strategic benefits. The research idea was areas”. Though the original laws constituting the science of FP are ori­
conceived when the top management of the bank approached us to ented towards manufacturing processes, their conceptual essence could
assess their organizational need for PI. We did not start our research be valuable for services. For example, axiomatic laws based on the uti­
with any a priori hypothesis or PI method in mind, but the nature of the lization of capacity, the sizes of buffers or inventory build-up, and the
problem and the objectives were a priori known. Firstly, we conducted various types of variability are noticeably applicable in services (De
85 interviews with various bank officials to understand the organiza­ Treville and Antonakis, 2006).
tional culture, business priorities, top-management expectations, and Our review of common quality practices that form the basis for PI
associated operational challenges. Following the in-house interviews, revealed associations with one or more FP laws. Kanban, for example,
market research was conducted through another interview protocol with controls the buildup of in-process inventories, leading to efficient lead
inter-organizational networking sources (36 interviews with PI pro­ times (Roth et al., 2020). Just-in-time (JIT), Automation, standardiza­
fessionals across 8 leading global banking firms). These findings were tion, concurrent engineering, etc., help in improving responsiveness
looked through the theoretical lenses of Factory Physics (FP) laws for a (Hung and Liker, 2007). Kaizen, Heijunka, Andon, TQM, TPM, all serve
service factory application (Hopp and Spearman, 2011). This estab­ to enable the reduction of system variability (Shah and Ward, 2003).
lished a connection between the various PI practices whose integration Thus, FP offers a useful lens to conceptualize PI. It is interesting to
led to their synergies. Going beyond the traditional definitions of Lean, observe interlinkages in FP laws/principles, and any change in any one
we established an FP view of PI which doesn’t technically discriminate of the underlying dimensions will require a corresponding change in at
Lean from non-Lean. The FP thinking prompted a three-fold focus, viz., least one other. For example, to have high resource utilization with low
improving capacity, responsiveness and reducing variation in a pure inventory would require reduction in buffers as well as variation in
service setting. delivery. Similarly, reducing process variation, besides meeting
Our literature review on Lean, Six Sigma and Agile gave a theoretical customer specifications, reduces error-rate which will have a cascading
foundation to our design science study. We design a ‘Lean Additives impact on rework time.
Program’ (LAP) model and deploy it for gaining the PI effect in the study This FP view of PI expands and reinforces several complementary
unit. The LAP model encompassed three activity components and 16 quality practices with similar objectives. This thinking forms a basis for a
systematic steps for PI implementation using concepts, tools and tech­ PI rationale which is inclusive of firms following Lean production
niques from the Lean additives in a 4-D methodology (Define-Diagnose- principles and other companies that do not follow the essential char­
Deploy-Deliver). Following the LAP model deployment, 147 staff were acteristics of Lean (McKelvey, 1978). In this context, the laws of vari­
trained in PI, and 102 LAP projects were successfully completed ability and capacity become vital as process performance can be
generating 3.36 million USD in three years. Further, it has improved improved through either buffer capacity (i.e., lower capacity utilization)
customer satisfaction and created a culture of change among staff, who and/or reduced variability (Klassen and Menor, 2007). Further, from a
were convinced of their PI mindset. We believe this study is perhaps the customer service effectiveness perspective, the law of responsiveness
first to design and deploy ‘Lean additives’ in a multi-national banking becomes important, as flexibility to accommodate customers’ evolving
firm. quality and time requirements is critical to create competitive advantage
(Holweg, 2005).
2. Theoretical background
2.1.1. Variability
Concepts from different theories, each from a different literature According to the Theory of Swift and Even Flow, the greater the
stream, offer unique perspectives for this work. Our review encom­ variability, the less productive the process is (Devaraj et al., 2013).
passed concepts from the literature on Factory Physics, Lean, Six Sigma Variability could be reduced when the demands placed on the process
and Agile. For this purpose, we conducted an online search in the ab­ are even and regular, whenever like things are processed together. Lean
stract field of the databases – Elsevier, Wiley, Sage, Emerald, Taylor and and its extensions like LSS eliminate waste by reducing or minimizing
Francis, Springer, IEEE Xplore, INFORMS, Inderscience, ASQ and HBR, variability related to supply, processing time, and demand (Sunder M
with the search terms: “Lean”, “Six Sigma”, “Agile”, “Lean Six Sigma”, and Mahalingam, 2018). Variability in supply occurs when suppliers fail
“LSS”, “Lean Agile”, “LA”, and “Factory Physics”. The duplicate results to deliver the right quantity or right quality at the right time or the right

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

place (Womack et al., 1996). LSS methods enable reduction of process the actual output to the maximum possible output that could be
variability (Sunder M, 2015). To reduce the effects of demand vari­ generated with the same set of resources.
ability, techniques such as takt-time and heijunka (levelling) help to
adapt to the changing demand. Although early research used the We represent the above conceptualization developed from FP in
manufacturing factory floor as a platform to understand the variability Figure-1, which clearly depicts the building blocks and their mutual
problem, its tenets of increasing process flow and decreasing variation influences and consequences in the context of PI.
also apply to the service sector, especially in financial services (Fre­ It forms the basis to: (a) use Lean additives (identified from the
dendall et al., 2009). literature), (b) then, use Design Science to develop a LAP model that
integrates the Lean additives, and (c) finally, apply the model for
2.1.2. Capacity accomplishing PI in the study unit.
Capacity is a general term used to determine the essential infra­
structure for generating a desired outcome, and forms a basis for 2.2. Lean – manufacturing to services
defining efficiency. Though capacity is mostly associated with em­
ployees (human resources) and capacity utilization rate is a ratio of Lean has emerged from the TPS of 1980s as a counter-intuitive model
actual output to the potential output generated by workers, other re­ to traditional operations (Holweg, 2007). It seeks to maximize capacity
sources like physical infrastructure, technological resources, etc., also utilization, not only at the bottlenecks but throughout the system, and
constitute capacity (Schmenner and Swink, 1998). Hence, the term responsiveness, while minimizing the buildup of in-process inventory
‘resources’ has to be understood from a systemic perspective. Capacity and system variability. Though the TPS incorporated Lean to create
utilization is the extent to which a firm uses its productive systemic competitive advantage in engine manufacturing and vehicle assembly
resource capacity. It is the relationship between output that is produced since the 1950s, it was only later that the ‘secrets’ of Lean were shared
with the existing resources, and the potential output which could be with companies outside Toyota (Hines et al., 2004). Since then, Lean has
produced with it, if capacity is fully used. Lean and its extensions are been accepted worldwide as a PI philosophy and practice. In 2006, the
most frequently associated with elimination of waste commonly held by Toyota Motor company publicly declared Lean as their cultural back­
firms as excess inventory or excess capacity to mitigate the effects of bone in becoming the #1 automobile manufacturer in North America
variability in supply, processing time, or demand (Shah and Ward, (Shah and Ward, 2007). The primary reasons why firms implement Lean
2007). According to Little’s law (Hopp and Spearman, 2011), inventory include maintaining competitive positions, reducing costs, improving
in a system can be reduced by maintaining excess capacity or lowering plant/facility utilization, and improving profit margins (Zhou, 2016;
throughput time. Crute et al., 2003; Gabriel,1997). Contrary to the traditional belief of
kaikaku (improvement via huge breakthrough initiatives), Lean thinking
2.1.3. Responsiveness encourages kaizen (small and effective continuous improvement initia­
Responsiveness is the ability to react purposefully and within an tives). This thinking not only inspires total employee engagement (Hasle
appropriate time to customer’s demands, to bring about competitive et al., 2012), but also aligns with Deming’s quality movement indicators,
advantage (Kritchanchai and MacCarthy, 1999). This becomes impor­ which emphasized that PI should be everybody’s job and not just
tant as response times have a direct impact on the inventory levels in the something for executives or managers.
system (E.g., case of General Motors –Blumenfeld et al., 1999). Mather The Womack and Jones (1996) model, which is most widely used in
(1988), in his P/D ratio defined responsiveness as a ratio of the pro­ Lean implementations, has five Lean principles, viz., value – asking what
duction system’s response time (P) to the customers’ willingness to wait customers value and want; the value stream – map the value added and
(D). A few contemporary thinkers attributed responsiveness to the non-value-added activities; flow – do the work in such a way that it flows
‘flexibility’ of the total operation to quickly respond to customer re­ through the process smoothly; pull – produce only what customers ask
quirements (Holweg, 2005). Hines (1998), in his study of the TPS for, when they need it; and perfection – keep improving. According to
claimed responsiveness as a function of shortening the time it takes to Lean literature, eight different wastes exist in processes, viz. trans­
convert customer orders into vehicle deliveries. Lean concepts like portation, inventory, motion, waiting-time, over-processing,
just-in-time (JIT) (Womack and Jones,1996) are well placed, since over-production, defects and unutilized people-skills (Piercy and Rich,
Lean’s persistent focus on lead time reduction for customer value de­ 2009), and specific tools such as value stream maps, spaghetti charts,
livery seems apposite within the debate about responsiveness. In this etc., help in identifying the wastes for subsequent elimination or
context, Lean and its additives (like LA) have gained some attention in reduction.
the recent years. A few scholars (Christopher and Towill, 2001) found Several researchers proposed benefits of Lean beyond the
Lean and Agile to be distinct with no suitability for a combination. manufacturing context (Hines,1996; La Ganga, 2011; Gupta et al.,
Despite the controversy, there is evidence in the literature that 2016). The extension of Lean into ‘pure services’ (transactions pro­
Lean-Agile synergy could enhance the responsiveness of a process cessing, order-receipts, quotations and invoices, sales processing, ac­
(Holweg, 2005). counting, human resources administration, etc.) has been a smooth
A deeper look at the above discussion reveals three entities, viz., transition than an experiment. In all these instances, improvements have
resources, time (fundamentally, a resource, but most unique (Adcock been made using the same Lean principles and tools as in manufacturing
and Lee, 1971)) and work, that constitute the basic building-blocks of PI, (Holmes, 2007; Piercy and Rich, 2009). Tools such as value stream
realized through: mapping and pull implementation have been quite easily transferred
from manufacturing to services due to the common focus on
a) reducing variability, which is reflected by variation in output pro­ product-flows and visualization of service blue-prints (Bicheno, 2004).
duced and variation in time taken to generate the desired output; and Other frequently used Lean tools include process maps, 5S,
b) improving responsiveness, which is indicated by the speed, correct­ fish-bone-diagrams, visual management, JIT, standard work, takt-time,
ness and completeness of responding to customers’ evolving re­ waste analysis, value-add – non-value-add analysis, Gemba, etc.
quirements; it requires suppliers/service providers to be both flexible From a theoretical standpoint, George (2003) highlighted the
and agile while responding to customers under varying conditions, application of Lean tools to achieve greater speed in service processes.
by means of Similarly, Liker and Morgan (2006) used the systems approach to inte­
c) utilizing minimum (optimal) capacity, which indicates the maximum grate the people, processes and technology aspects to illustrate the
possible output that can be generated through work if all resources management principles of TPS that can be applied beyond
are fully or ideally utilized. Hence, capacity utilization is the ratio of manufacturing. Literature shows evidence of Lean applications across

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

Figure-1. Building-blocks of PI conceptualized using FP principles.

services viz., Hospitals and Healthcare (Radnor, 2011; La Ganga, 2011; 2011). For this purpose, it offers two project management approaches,
Robinson et al., 2012), Public Services and Administration (Radnor and namely, Define-Measure-Analyse-Improve-Control (DMAIC) and
Walley, 2008; Pedersen and Huniche, 2011), Software Development and Define-Measure-Analyse-Design-Verify (DMADV). While DMAIC pro­
Information Technology Services (Poppendieck, 2002; Ebert et al., jects helps improve the processes, DMADV roadmap helps in process
2012), Education Services (Emiliani, 2004; Hines and Lethbridge, 2008; design or de-resign (Anbari et al., 2008; Sunder M, 2016c). Six Sigma
Sunder M et al., 2016a), Banking and Financial Services (Swank, 2003; usually involves large resource expenditures that can provide significant
Hammer, 2004; De Koning et al., 2008; Leyer and Moormann, 2014). returns. For example, General Electric which spent USD 1.6 billion on
Literature also highlights critical success factors, viz., management Six Sigma during 1996–1999 reaped ~150% returns (Feng, 2008).
commitment, alignment of organizational culture, skills and expertise of Other examples of firms, which claim success of Six Sigma include
human resources, importance of program governance, etc., (Holweg, Honeywell, Sony, Caterpillar and Johnson Controls (Shafer and Moeller,
2007; Netland, 2016), but the works have been mostly conceptual (E.g., 2012). Linderman et al. (2003, 2006) highlighted the importance of Six
Liker, 2004; Black, 2007). Sigma from a goal-theory perspective illustrating the importance of
Despite several success stories, not all Lean implementations have behavioral considerations (human and process issues) alongside its
produced promising results in firms. This argument could be attributed technical orientations (Six Sigma tools and techniques).
to the shortcomings and limitations of Lean. Browning and Heath (2009) While the success stories speak for themselves, not all firms that have
claimed that elimination of tasks (non-value-added activities) will not implemented Six Sigma delivered on the performance benefits (Nair
guarantee cost reduction, and Lean may provide greater value by et al., 2011; Kwak and Anbari, 2006). For example, results from 3 M
incorporating some aspects of agile manufacturing. Shah and Ward indicate that organizational leaders believe that Six Sigma practices may
(2007) argued that Lean is not a singular concept but constitutes a constrict innovation to drive growth (Hindo, 2007). Even though the
system with guiding principles for continuous improvement. Hadid et al. practitioner literature provides sizable evidence of substantial cost
(2016) emphasized the need to combine the social and technical bundles reduction and other benefits from Six Sigma, some critics still question
of Lean for effective implementation towards operational and financial whether these benefits sufficiently exceed the costs of adoption (Swink
performance of the firm. Leyer and Moormann (2014) found that em­ and Jacobs, 2012). Antony (2006) highlighted more limitations of Six
ployees and managers, in general, perceive their work environments as Sigma like the challenge of having quality data in processes where no
being leaner than they actually are, and this effect distorts Lean effec­ data are available. Further, many firms still perceive Six Sigma as a pure
tiveness in the long run. Research indicates that Lean concepts, when statistical toolkit rather than as a management strategy. From a project
combined with Six Sigma and Agile, result in effective Lean additives to management perspective, not all projects qualify to be executed in Six
overcome its limitations (Hines et al., 2004; Pepper and Spedding, 2010; Sigma way (Sunder M, 2013). In addition, Nonthaleerak and Hendry
Sunder M et al., 2018; Bhamu and Sangwan, 2014). (2008) highlighted the weaknesses of the Define and Control phases,
which need enhanced alternatives in Six Sigma DMAIC. Sunder M et al.
2.3. Lean Six Sigma (2018) prescribed that Lean could be combined with Six Sigma to pro­
vide a synergetic approach to PI to overcome the limitations.
Six Sigma is a structured method to reduce variation in organiza­ According to Pepper and Spedding (2010), “Six sigma focuses project
tional processes to improve performance metrics with the aim of work on the identified variation from the proposed standard, which in itself
achieving strategic objectives (Schroeder et al., 2008). Despite Six does not entirely focus on the customer requirements, instead it is sometimes a
Sigma’s aim to reduce defect rate to as low as 3.4 defects for every cost-reduction exercise that can lose sight of the customer if not implemented
million opportunities, it does this with a focus to reduce system vari­ alongside Lean”. This understanding could be further reinforced by the
ability, and based on customer specifications (Schroeder et al., 2008). FP lens, which does not encourage distinguishing Lean from non-Lean
Shafer and Moeller (2012) observed that Six Sigma has great impact on technically. When Six Sigma and Lean practices interact, the resultant
employee productivity and customer satisfaction. They validated its synergies help in creating a unique approach to organizational excel­
positive impacts on organizational performance, through efficiency lence (Sunder M, 2015). It balances the top-down approach of Six Sigma
creation, improved quality and responsiveness. As a PI method, it en­ with the bottom-up approach of Lean, making quality everyone’s job.
ables firms to solve previously unsolvable problems, provide additional According to Anand et al. (2009), a combination of Lean and Six Sigma
services at no additional cost and demonstrate to their customers their enables creation of dynamic capabilities though continuous PI infra­
commitment to improve in a systematic fashion (Braunscheidel et al., structure. George (2003) introduced the term LSS as an advancement of

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

Lean thinking, which has gained popularity in recent years (Furterer, adapt on change and uncertainty, and leveraging the impact of people
2016; Shah et al., 2008). Sunder M et al. (2018) conducted a morpho­ and information by nurturing an entrepreneurial culture in a firm.
logical analysis on LSS literature and concluded a significant need to Pandya et al. (1997) proposed an Agile model comprising of enterprise
explore LSS for academic research. They claimed that LSS enables syn­ focus on flexibility, total service (aggregation of individual solutions),
ergies amongst Lean and Six Sigma and offers a PI package which is technology leadership, virtual structures and elasticity.
more than Lean and Six Sigma in isolation. Shah et al. (2008) claimed Scrum and Kanban are among the frequently used Agile tools. While
that the implementation of Six Sigma along with a broader set of Lean ‘Kanban’ has its origins in Lean manufacturing as a visual indication to
practices improves the likelihood of success. track production within a factory (Kojima and Kaplinsky, 2004) the term
Various LSS frameworks proposed by scholars emphasize the ‘Scrum’, first used by Takeuchi and Nonaka (1986), has gained attention
connection of useful Lean and Six Sigma linking to PI (da Silva et al., in the practitioners’ community. Scrum as a project methodology starts
2018). For example, Breyfogle et al. (2001) showed that there are with a wish-list of deliverables (product or service backlog). The Agile
common characteristics between Lean and Six Sigma in reducing waste team picks up items from the backlog one after the other (or in parallel)
and variability towards improving process. Later, Zhang et al. (2016) for execution and each such period is termed as a ‘sprint’, which
observed that though Lean and Six Sigma shared common goals and generally lasts for a few weeks and concludes with a team review. The
challenges, they varied in their toolkit and characteristics. The goals unique features of the Scrum project management include shared lead­
include instilling a culture of PI in firms (strategically) and improve ership among the team members (with no specified team leader), min­
variability, responsiveness and capacity (operationally). Common imal documentation with customer centricity, direct involvement of
challenges include resistance to change, lack of understanding of the customers at every sprint review, and brief team meetings (restricted to
implementation rationale, lack of resources, insufficient training, lack of stand-up meetings of 15mins., duration at every sprint) (Schwaber,
management support, and misalignment of project and organizational 2004). Unlike Six Sigma where pseudo-meta-structure (Schroeder et al.,
goals (Kwak and Anbari, 2006). Yadav and Desai (2017) proposed a 2008) of Green belt, Black belt, Master Black belt, champion and sponsor
hybrid ISM and MICMAC based LSS enablers framework to reinforce roles exist, Agile methodology prescribes a more simplistic structure,
these connections in the real-world. Further, Juliani and de Oliveira viz., product owner (sponsor), scrum master (facilitator) and Agile team
(2020) systematized the principles and practices of the LSS using (Rubin, 2012).
grounded theory. A few scholars expressed that Agile and Lean cannot co-exist
Alongside manufacturing (Shokri et al., 2016; Kalashnikov et al., (Goldsby et al., 2006; Narasimhan et al., 2006; Vazquez-Bustelo et al.,
2017), the use of LSS across services, especially in banking and financial 2007; Hallgren and Olhager, 2009), and argued that firms should
services has shown an increasing trend in the past few years (Albliwi embrace Agile strategies when operating in highly uncertain environ­
et al., 2014). Bank of Montreal, American Express, HSBC Holdings, Bank ments and embrace Lean strategies when operating in more stable en­
of America, Capital-One are few of the many organizations have estab­ vironments (Lee,2002; Sebastiao and Golicic, 2008). However, Gligor
lished LSS programs (Sunder M, 2016c; Zhang et al., 2016; Koning et al., et al. (2015) countered this thinking and validated that Agile could
2008; Peteros and Maleyeff, 2015). complement Lean and could lead to superior performance for firms
operating in stable environments. They claimed that Agile could lead to
2.4. Lean Agile both efficiency and effectiveness benefits in firms through improved
capacity utilization and responsiveness respectively. While proposing
The terms ‘agility’ and ‘Agile’ have drawn significant attention since the drivers of agility in firms, scholars pointed to the benefits of Agile
1990s among researchers in the field of operations. Having its origins leading to effective responsiveness through automation, integration and
from information technology services, the manifesto of Agile software customization.
development (Fowler and Highsmith, 2001) proclaimed four Agile Despite differences, there exists a stream of thought that advocated
values, viz., (1) individuals and interactions over processes and tools; (2) ‘Leagile’, an additive of Lean, otherwise called as ‘Lean Agile’ (LA). Lean
working software over comprehensive documentation; (3) customer production teaches how to eliminate waste as a qualifier to agility and
collaboration over contract negotiation; and (4) responding to change hence supplements Agile initiatives (van Hoek et al., 2001). Inman et al.
over following a plan. Though the original usage of the term ‘Agile’ (2011) presented the relationships of Agile and Lean towards opera­
could be attributed to its application in software project management, tional and firm performance. Even before, Burgess (1994) indicated that
research confirms its application in manufacturing. For example, Agile could provide more focus for PI when integrated with Lean pro­
Burgess (1994) pointed manufacturing parallels for Agile activity com­ duction approaches. Hooper et al. (2001) while proposing alternate
ponents. In fact, the term ‘agility’ has been in use among operations costing methods for Agile enterprise, identified synergies between Lean
scholars even before Agile was proclaimed as a methodology for a better and Agile. Later, Guisinger and Ghorashi (2004) pointed interactions of
way of delivering products or services to customers, as a natural Agile with Lean from theoretical and practical perspectives.
development from the Lean manufacturing (Quintana, 1998). The first Bruce et al. (2004) while studying supply chain management in the
work to detail the configuration and application of Agile manufacturing textiles and clothing industry proposed Lean-Agile for benefits on both
was the Lehigh report (Nagel, 1991). The Agile way of working is capacity and responsiveness. Further, Vázquez-Bustelo & Avella (2006)
fundamentally unique compared to the traditional delivery models as it complemented Lean manufacturing practices with all embracing vision
involves several iterations for incremental development of products or of Agile manufacturing in Airbus España. Agarwal et al. (2006)
services accommodating evolving customer needs. modelled the Lean-Agile metrics and later Lotfi et al. (2013) validated
Sharifi and Zhang (2001) defined Agile as a methodology to assist that LA leads to resilience in firms leading to business continuity, con­
companies to enhance agility through implementation and integration tingency planning, visibility, continuous improvement and collabora­
of appropriate practices, which provide the required abilities for a tion. Yin et al. (2017) while proposing Seru as an alternative to
company to respond properly to changes. Sarkis (2001) defined agility individually deployed Lean and Agile, clarified that Agile by itself lacks
as the ability to thrive in an environment of continuous and often targeted responsiveness and reconfigurability and that it requires Lean
unanticipated change towards improvement. Cao and Dowlatshahi to achieve agility.
(2005) defined Agile with a focus on smaller scale, modular production
facilities, and flexible operations capable of dealing with turbulent en­
vironments (Burgess, 1994). Giachetti et al. (2003) highlighted strategic
dimensions of Agile, viz., enriching the customer, cooperating both
internally and externally to enhance competitiveness, organizing to

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

3. Method problem, whereas DS while addressing the what is to a problem, goes a

step ahead to develop what can be the logical solution for a class of
3.1. An overview of the design science method problems. Thus, DS involves both constructive and evaluative paradig­
matic dimensions with both positivism, and anti-positivism of episte­
Design Science (DS) is a pragmatic approach for exploratory mology, unlike action research (Iivari and Venable, 2009). Further, DS
research. Unlike explanatory research, DS research enables the devel­ research is a ‘science of the average’ focusing on average relations be­
opment of knowledge that can be used to design solutions for field tween causes and outcomes and its outcomes are justified on the basis of
problems. It focuses upon designing and evaluating an artifact with an descriptive and explanatory validity (van Aken et al., 2016).
explicit intention to improve its functional performance. These artifacts While this study was driven by a field problem, our aim was not
can broadly include models, methods, constructs, instantiations and merely to solve the organizational problem, but to develop generic
design theories, social innovations, new or previously unknown prop­ knowledge towards theory building that support organizational
erties of technical/social/informational resources, new explanatory improvement actions across several other firms. Thus, unlike action
theories, new design and development models, implementation pro­ research projects that aim for case-specific improvements, we seek to
cesses or methods (Gregor and Hevner, 2013). The developed artifact generalize a design by modeling, validating and refining it for pragmatic
aims at addressing a class of problems (Walls et al., 1992) in a way that it validity and practical relevance. Thus, in accordance with Trovinger and
is useful in addressing specific problems of a specific user. Hence, DS Bohn (2005) and Senot et al. (2016), we justify the use of DS in this
research involves designing and evaluating an artifact specific to a field study.
problem, in more than one iteration, in order to refine it towards DS indeed involves basic research that is immediately relevant to
generalization. practice by virtue of its focus on developing means-ends propositions
In DS research, the researchers’ roles extend beyond generating that solve real problems, and hence relevant to operations management
knowledge ‘for practice’ to generating knowledge ‘with practice’, and (Holmström et al., 2009). This is due to the idiosyncrasy of the opera­
hence include both theory building (through design of artifacts) and tions management field where academic research comes after (and not
theory testing (by evaluating and refining the artifacts) concurrently before) managerial application. For the most part, practitioners do not
(Groop et al., 2017). In this process, DS research aims at producing use the results of academic operations management research in their
general solution concepts (van Aken, 2005) or at times meta-artifacts development efforts. Instead, academics rely fundamentally on the work
(Iivari, 2007), contributing to knowledge typical to theories derived of practitioners (Holmström et al., 2009, Cotsa et al., 2018). Further, DS
through positivistic and anti-positivistic epistemology, unlike action research is flexible from an application perspective, as it is not a specific
research (Iivari and Venable, 2009). However, DS is different from ac­ method with fixed rules; rather, it is a strategy that can be operation­
tion research in many ways. More fundamentally, action research is a alized in various ways (van Aken et al., 2016).
research method while DS is more a research orientation, within which Hevner et al. (2004) and Gregor and Hevner (2013) prescribed a DS
one can use different research methods (Hevner et al., 2004). Put research framework which we have used for this study (see Figure-2).
differently, action research explains what is the solution to a field The framework recommends a schema comprising three entities, viz.,

Figure-2. Design Science research method used.

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

environment, knowledge base and the research strategy/design. The high levels of bureaucracy and decentralized decision-making practices.
environment defines the field problem space (Simon, 1996) in which the Secondly, the expectation from the management was to embark upon a
phenomena of interest resides. This could include business organiza­ PI journey as a part of organization’s DNA, and not merely for execution
tions, technology, infrastructure, markets, etc. The knowledge base pro­ of a few projects. Importantly, they wanted to achieve this with
vides the materials from and through which artifacts are constructed and improved employee morale rather than staff perceiving PI as an over­
evaluated. This could include theoretical foundations, models, research burden alongside their usual jobs. Alongside creating a culture of PI, the
methodologies, etc. Finally, the research design acts as a strategic plat­ tangible measures of success were placed under three broad categories,
form to apply the knowledge base over the environment to create arti­ viz., (1) effective capacity utilization, (2) improved responsiveness to
fact(s) to solve the field problem and then to evaluate and refine them clients, and (3) reduced process variation. Finally, the staff expressed a
towards deriving new knowledge as a contribution to the knowledge need for centralized governance and motivation for PI. A summary of
base. key findings from the interviews are presented in Figure-3.
Following the in-house interviews, a market research was conducted
3.2. Understanding the study unit using the information available on online public domains of other banks,
and interviews were conducted with inter-organizational networking
3.2.1. Company background sources (36 interviews with PI professionals across 8 leading banking
This study has been conducted at a global bank (~12000 employees firms). It was observed that different BFSI firms use various PI meth­
worldwide) which funds loans and provides banking services for several odologies such as Lean, Six Sigma, Kaizen, TRIZ, Six Thinking Hats, and
countries. It uses financial resources and extensive experience to help Statistical Process Control (SPC). A detailed study on the successes and
clients increase their economic growth and quality of life. To ensure that shortcomings of each of these PI practices was performed, and the
clients can access the best global expertise and help generate cutting- market research findings were presented to the top management.
edge knowledge, the bank constantly seeks to improve the way it
works. With its offices across the globe, the India center of the bank 4. Model design
provides back-office and mid-office services.
The India office of the bank was set up in 2000 by offshoring some of 4.1. Readiness
its accounting functions for cost arbitrage benefits. Over the years, the
India center has grown in its landscape with transactional work as well Without readiness, the probability of success of any PI initiative is
as relatively complex functions. Following the Accounting unit, several minimal, and the related change would be merely successful by chance
administrative business units (BUs), viz., Human Resources Operations, (Radnor, 2006; Sunder M and Antony, 2018). Hence, we focused our
Information Technology Services, Treasury Operations, and Corporate efforts towards gaining executive sponsorship, forming teams, creating
Procurement, leveraged the benefits of offshoring their business pro­ awareness, and driving staff participation. This readiness approach was
cesses to India. As on 2018, the India center has about 1100 employees. aligned with the principles of quality management, viz., participative
After reaping the cost arbitrage benefits of offshoring, the management leadership, total employee participation and continuous improvement
team headquartered in the USA decided to set an agenda towards (Anderson et al., 1994; Powell, 1995; Juran and Godfrey,1999).
creating the India center as a value-added partner. This included
leveraging the services provided from the India center in a more efficient • Executive Sponsorship: The top-management was briefed about
and effective way by optimal employee utilization, improving process various continuous PI practices, their applicability in the bank, the
quality by reducing defects and variation, reducing operational risks and potential benefits, and success stories in other firms. Our approach of
associated costs, to improve customer satisfaction, etc. They decided to managing stakeholders was in-line with the Inform-Involve-
embark upon their continuous PI journey for this cause. Influence strategy (Sunder M, 2016c). Two BUs, viz., Financial &
Accounting (F&A) and Human Resources (HR) came forward to
3.2.2. Environment sponsor the pilot program to enable proving the concept of the PI
The top-management of the bank engaged a change management initiative.
professional who is a certified Lean Six Sigma Master Black Belt (MBB) • Team Formation: A Business Process Excellence (BPX) team
to conceive and embark upon the continuous PI program. The explicit comprising two Lean practice professionals was formed for leading PI
expectations conveyed by the top management include the natural at the back-office functions of the bank and reporting to the MBB.
drivers for PI, viz., cost reduction through efficiency realization (Cheng The primary aim of the BPX team was to manage both, top-down and
and Chang,2012), and improving customer satisfaction through quality bottom-up change. The other key focus areas at this stage included
and responsiveness. However, the voice of the customer (as a whole), an creating awareness and driving staff participation towards the pilot
implicit need, was not specified. The MBB conducted a series of study and proving the concept to the top-management to commence
conversational interviews to understand the total (explicit and implicit a full-blown PI initiative.
needs) voice of the customers. A total of 85 interviews were conducted • Awareness Creation and Driving Staff Participation: To create aware­
across top management personnel, mid management staff and front-line ness about PI among the staff members, the BPX team used visual
employees over a three-month period to understand the opportunity at management techniques. Education materials highlighting the ben­
hand (the problem area). The key objectives of this exercise were: (a) efits of PI and success stories of other firms were created and dis­
define the measures of success (problem statement and associated played across the bulletin boards. To further this cause, PI awareness
metrics), (b) understand the organization behavior and culture, (c) un­ sessions were conducted, highlighting process thinking, importance
derstand business priorities and top management expectations, and (d) of PI, Lean system, Lean additives, what’s in it for staff, the history
understand the operational challenges faced by the employees (Naor and success of PI in other BFSI organizations. These sessions helped
et al., 2008). Two researchers attended interviews (as observants), staff members to associate with the process related issues in their
independently coded the qualitative data across all interviews. Any day-day work. During these interactions, the BPX team triggered
ambiguity between the understanding amongst the reviewers was clar­ more enthusiasm among the frontline staff leading to total employee
ified through a few follow-up meetings with the interview-participants. participation.
This was further followed by emails to the participant interviewees with
a summary of respective interviews. This exercise reflected objective 4.2. Strategy formulation and program conceptualization
patterns.
Firstly, the organizational structure was found to be vertical with Creating a strategy in line with the desired outcomes is important to

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

Figure-3. Summary of interviews.

ensure quality in a process and its outcomes (Acur and Englyst, 2006). (see Section 4.3 for more details). The end of each phase of the projects
Strategy formulation was focused on three important levers, viz., staff (each ‘D’ in the 4-D methodology) is called as the end of a sprint. The
empowerment, tangible delivery to the management, and program progress at the end of each sprint was showcased to the respective
sustenance. The first step involved ideation by staff members as op­ customer groups to seek their continuous inputs. All the above actions
portunities for PI. The BPX team concentrated on interacting with staff were integrated by strong governance by the MBB, who chaired the
and gathering specific ideas for process improvement, viz., PI opportu­ sprint-meetings and published project progress reports to the top-
nities from the staff. All staff across the bank were open to contribute management team at the end of each sprint. The project team
their ideas. Subsequently a backlog of PI ideas was generated and dis­ including the BPX mentor took part in the sprint meetings. From an
cussed with the team leaders (mid-management personnel) to prioritize internal branding perspective, the initiative was named and hyped as the
ideas based on the desired tangible outcomes, with defined process Lean Additives Program (LAP). The successful completion of the projects
metrics. This funneling of ideas-backlog led to project cases that were culminated in the award of ‘Lean Additives Program Practitioner’ cer­
expected to be executed in a 12-week time frame. Finally, to promote the tificates to the practitioners, who were felicitated during a town hall
continuous improvement culture and program sustenance, the projects meeting. A schematic view of the PI program conceptualization model is
were scoped with realistic and time bound goals. Here, each PI idea presented in Figure-4.
taken up for implementation is referred as a PI project.
Following the identification of the projects, the proposers of the
selected cases were invited for a 1-day training workshop in which they 4.3. The 4-D methodology for managing PI projects
were exposed to hands-on learning of a variety of PI tools and techniques
from the Lean additives’ toolkit (LSS and LA). An overview of the tools Alongside the deployment strategy, a customized PI project man­
and techniques covered as part of this training are shown in the Ap­ agement methodology, aligned with the work culture of the bank, was
pendix. The training modules were specifically designed for corporate developed. For this purpose, a 4-D methodology comprising the Define,
professional learning. 65% of the training workshop involved activity- Diagnose, Deploy and Deliver sprints was designed by the MBB. For each
based learning with management games, case studies and Lean appli­ project, the “Define” sprint (duration of about 1 week) focused on (a)
cation exercises, and 35% involved theoretical concepts on PI in the identifying the customer requirements, (b) defining the business prob­
form of a presentation (traditional class room style), for simultaneously lem, and (c) preparing the project charter for kick-starting the project.
enabling basic understanding of PI tools and facilitating their This stage also quantified the problem area with the base-line data of
implementation. chosen improvement metrics, and motivated the LAP practitioners to
The training was followed by project execution with BPX mentoring. obtain a high-level understanding of the selected process. The “Di­
At this stage, the BPX team members closely mentored and coached the agnose” sprint, recommended for 2 weeks, focused on detailed process
practitioners daily on both data and process analyses. This enabled the mapping of the existing As-Is process (using tools like process maps,
identification and elimination of potential wastes and non-value adding value stream maps, etc.) to identify the value added and non-value-
activities from the business processes for bringing in quantifiable and added activities in the value chain. A systematic waste analysis of the
substantial PIs through the identified projects. The mentoring rigorously eight wastes including transportation, inventory, motion, waiting-time,
followed a 12-week time frame. A 4-D methodology (with 16-steps) for over processing, over-production, defects and un-utilized people skills,
project management was designed by our research team lead by the MBB was also performed along with root-cause analysis (using tools like
brainstorming, five-why analysis, Fishbone diagrams, affinity diagrams,

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

Figure-4. Model design.

scatter plots etc.). Variation analysis using t-tests, ANOVA, box-plots 5. Model evaluation and refinement
were also performed at select projects based on the project case. A few
other projects involved takt-calculations and load-levelling at the Di­ 5.1. Proof of concept
agnose sprint. In the third sprint, “Deploy”, for about 6 weeks, the To-Be
process was mapped in consultation with subject matter experts. The As a first step to prove the concept to the management, the BPX team
proposed and approved improvements were deployed as per the launched a pilot cohort of the Lean Additives Program (LAP) in the F&A
scheduled implementation plan. The most important aspect at this stage and HR BUs. A nomination-gathering exercise was performed, where
was to facilitate the required change management, since new PIs are team leaders of different business functions in the F&A and HR teams
organically prone to resistance from the status-quo. In the final “Deliver” were encouraged to submit potential project business cases alongside
sprint (for about 3 weeks), the improvements were monitored for sus­ the respective staff names. Several staff members conveyed their interest
tainability with relevant controls in place. Quantification of the im­ to participate in the pilot program, and 35 nominations were received
provements was performed at this stage by post-improvement data across the Trust Funds, Loans, Payroll processing, staff benefits pro­
collection, and comparison with the pre-project (historical) baseline cessing, audit confirmation, portfolio management processes and a few
data for justifying the value addition in terms of the business impact other functions.
created by the respective Lean projects. The enhanced processes were Following the nominations, the BPX team conducted focused dis­
monitored for process control towards sustainability of the improve­ cussions with the interested staff to understand the business cases and
ments. The sprint timelines are created for program governance and are ascertain the viability of their projects. To estimate the substantial op­
indicative of recommended timelines. During the execution of projects, portunities and simultaneously motivate the staff bringing in PI projects,
a few projects are expected to deviate from these timelines on a case-to- the team had to select a few low hanging fruits. Among the project
case basis for valid reasons (like external dependencies, changes in business cases reviewed, a total of 20 were selected for the pilot study.
customer needs, etc.) The project business cases involved metrics like quality improvement,
efficiency creation, risk reduction, and enhancement of customer satis­
faction under three categories, viz., capacity improvement,

9
V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

responsiveness improvement and reduction in variation. Table- 1 fea­ Table-1

tures the list of these projects with associated details. Summary of pilot LAP cohort across two BUs.
The 20 staff (henceforth termed as LAP practitioners in short) were # BUs Lean Project title Project Metric Project category
invited for a one-day (8 h) PI workshop. The MBB led the classroom- (generalized for reader’s
based training event with emphasis on activity-based-learning, rather understanding)
than a theoretical approach. The LAP practitioners commended the 1 F&A Cycle time improvement Cycle time Capacity
workshop. This sentiment was further reflected in an anonymous survey for ‘Not Found’ records in improvement
circulated at the end of the workshop, in which 92% of the participants data governance
2 F&A Cycle time reduction in Cycle time Capacity
rated the program 5 out of 5 on a Likert scale having 1 as the lowest and fair value hierarchy levels improvement
5 as highest. Then, the teams were assigned project mentors from the in financial reporting
BPX team for supporting the LAP practitioners throughout the 4-D Lean 3 F&A Query time reduction in Cycle time Capacity
project management methodology. The mentoring support included: (a) Trust Funds customer improvement
service helpdesk
hand-holding the LPs for PI tools and technical support, (b) on-floor
4 F&A Cycle time reduction in Cycle time Capacity
coaching on project management and managing stakeholder dy­ Trust Funds master improvement
namics, and (c) psychological assistance to keep up their motivation database updating process
levels throughout the project life cycle to ensure time-bound delivery. A 5 F&A Elimination of Key- Key-Person-Risk Capacity
structured governance was followed throughout the 12 weeks, where Person-Risk in improvement
International loan
every sprint of the 4-D was monitored to ensure successful completion of operations
the appropriate key deliverables. 6 HR Cycle time reduction in Cycle time Capacity
Upon completion, the Lean certifications were presented to the LAP education benefits process improvement
practitioners, and the celebrations were held at the leadership town hall 7 HR Improving the staff Training Capacity
training framework for effectiveness improvement
meeting, where the Managing Director of the bank felicitated the LAP
HR operations
practitioners. Among the 20-staff trained, 18 completed the Lean pro­ 8 F&A Rationalization of Customer Responsiveness
jects (18 projects, 1 project per trained staff for certification), leading to threshold review process satisfaction improvement
overall tangible saves worth 0.39 million USD. Further, the customer in travel accounting
satisfaction survey responded to by the bank’s customers showed an process
9 F&A Reduction of delivery Delivery time Responsiveness
increase from 89% to 93% as an effectiveness benefit.
time in issuance of Trust improvement
Funds financial
5.2. Evolution and model refinement statements
10 F&A Reducing the turnaround Turnaround time Responsiveness
time for knowledge improvement
Year-1: The first cohort of projects, comprising 20 participants, was
documentation in the
conducted in the financial year (FY) 2015–2016. In the first year, with Global Practices editing
two participating BUs (F&A and HR), a total of 18 projects were suc­ process
cessfully completed using the 4D methodology. The project metrics 11 F&A Turnaround time Turnaround time Responsiveness
included cycle time, turnaround time, risk reduction, and customer reduction for month end improvement
closing procedures in
satisfaction. Trust Funds
The projects were scheduled over a target duration of 12 weeks. 12 HR Streamlining Short-term Customer Responsiveness
However, for the initial cohort, there were certain challenges in exceptions for short term satisfaction improvement
completing the projects within schedule. Following the success of the appointments in HR
operations unit
first Lean deployment, the BPX team wanted to strategize the second
13 HR Process simplification in Customer Responsiveness
Lean cohort in such a way that would overcome the shortcomings wit­ security clearance satisfaction improvement
nessed in the first. The team focused on areas like instilling the advan­ workflow for recruitment
tages of executing Lean projects for employees, stirring up interests process
among more staff, improving learning strategies for the staff, and 14 HR Turnaround time Turnaround time Responsiveness
reduction in termination improvement
exposing the staff as well as management to the benefits of following the benefits processing in HR
Lean methodology. The celebration and certification, branding the LAP, operations
recognizing staff through the senior management for their visibility and 15 F&A Error reduction in Error reduction Variation
empowerment, centralized project mentoring by the BPX team, man­ Portfolio Review Process reduction
16 F&A Standardization of Audit Inter country Variation
aging stakeholder expectations and staff perceptions were a few of the
confirmation process variation reduction
key success factors identified in the pilot cohort. Poor execution in two across 6 countries
projects, failure to meet the complete goals committed by a few projects, 17 F&A Process simplification of Over and under Variation
and dependencies from other teams which delayed the projects were Chennai office cost payments reduction
among the challenges faced in the pilot cohort. The first cohort helped Allocation process
18 F&A Reduction of Over payments Variation
the BPX team understand that the dependencies from other teams while overpayments in bi- reduction
executing projects also had to be handled effectively for optimization, to monthly payroll
complete the Lean projects in time. The following cohorts were processing for
maneuvered with these learnings. headquarters
19 F&A Lean Practice for Standardization Variation
Year-2: Following the success in Year-1, the results were reported to
standardization of ratio reduction
the top-management with the participant staff feedback scores and the administrative tasks in
benefits realized. This attracted the top-management and hence the front office
scope of the executive sponsorship increased in year-2. Two cohorts of 20 HR Redesign of the Quality Error reduction Variation
LAP programs were conducted in FY 2016–2017. From two BUs in year- Audit Report in HR reduction
insurance team
1, the scope of deployment increased to six BUs in year-2. When the call-
for-nominations for the second cohort was announced, the BPX team
received a total of 58 nominations, and this positive sign helped in
creating a business case for the executive sponsorship and buy-in for a

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

full-blown Lean deployment. cohorts in FY 2017–2018 witnessed additional participation from

Alongside F&A and HR, other BUs namely Information Technology Budget Planning and Strategy (BPS), a new BU.
Services (ITS) and Corporate Procurement (CP) participated in the sec­ LAP proved effective through the implementation of the seven co­
ond cohort. 21 staff were trained, and then mentored over a 15-week horts and efficient improvements in projects over three years. A total of
period for project execution. In cohort-2, 21projects were completed 147 staff were trained and 102 Lean projects were completed via the
successfully and this helped realize tangible benefits worth 0.34 million seven cohorts. These delivered tangible, significant efficiency and
USD. In addition to cycle time and turnaround time, new project metrics effectiveness benefits to the management worth 3.36 million USD in
like reducing the number of service requests, increasing the first call three years (0.39 million USD in year-1, 1.01 million USD in year-2 and
resolution rate in the call center, etc., were taken up for execution. 1.96 million USD in year-3), and led to staff participation, recognition
As one of Deming’s 14-principles of quality management describes and empowerment. Another 28 projects were in progress at the end of
“Put everybody in the company to work accomplishing the transformation”, year-3. The program not only transformed processes but also contrib­
the third cohort observed a further increase in staff participation. uted to customer centric ways of working. Simultaneously, it addressed
Alongside F&A, HR, ITS and CP, Treasury (TRE) and Pensions (PEN) the business priorities and top-management’s expectations (on the
joined the Lean bandwagon. Eighteen Lean projects were completed as variation, capacity and responsiveness fronts), and challenges faced by
part of cohort-3 (4 capacity improvement projects, 4 responsiveness the front-line staff.
improvement projects and 10 variation reduction projects). The cohort The consolidated progress and evolution of the LAP deployment at
successfully realized 0.28 million USD. The average feedback score as the bank across three years from FY 2015–2016 to FY 2017–2018 is
given by the participant staff through an anonymous survey in 2017 was summarized in Figure-5. Discussions with the top-management revealed
97% satisfaction. This reinstated the fact that LAP had delivered sub­ interest to include LAP in future institutional agenda for Robotics and
stantial savings to both the staff as well the management. Artificial Intelligence initiatives. A few top-management personnel
Year-3: Following the success of the previous projects, the BPX team conveyed their views that LAP was not only an enabler for PI, but also an
had to sustain the results delivered in the previous cohorts. The strategy employee engagement strategy for change, and hence they valued it as a
for cohort 4 required the team to pick up more complex project metrics pre-requisite for the automation initiatives scheduled for the future. The
(like new design creations, process re-engineering) and simultaneously bank’s management conveyed their interest for a full-blown LAP
accelerate the program towards the future. The Lean program was deployment at the headquarters and several other branch-offices across
widely accepted across the bank and invitations to implement similar the globe, as a key item in the leadership agenda.
cohorts in the headquarters at the USA were welcomed.
Following the exponential success at India, the F&A management 6. ‘LAP’ as a strategic resource
team invited the BPX team to conduct the LAP program at their head­
quarters. In Cohort-4, 12 staff were trained in LAP at headquarters, and Lean additives helped the bank to improve capacity, responsiveness
in its maiden venture outside India, the team delivered about 0.54 and variation in processes to deliver efficiency and effectiveness bene­
million USD. Year-3 witnessed streamlining and optimization of fits. However, this is merely a tip of the iceberg of benefits. Looking
moderately complex processes. 21 projects were successfully completed beyond these operational benefits, we observed LAP rendering strategic
in Cohort-5 (13 capacity improvement projects, 4 responsiveness benefits for organizational learning, which is defined as a change in the
improvement projects and 4 variation reduction projects). Cohort-6 organizations’ knowledge that increases the range of its potential be­
followed with 28 projects, and Cohort-7 with 20 projects. These haviors (Argote, 2013). As a PI initiative, LAP involved both exploration

Figure-5. Summary of LAP deployment progress.

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V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

and exploitation to enhance the organizational learning process, as it for its benefits in the study unit. Through 147 trained staff, 102 LAP
focusses on improving both organizational processes and individual projects were successfully completed, and the study evidenced tangible
behaviors. For example, LAP enabled explorative approaches like benefits of 3.36 million USD in three years. Alongside the tangible cost
vicarious learning (learning from other market players and through benefits, a cultural change of demonstrated Lean behaviors in staff (like
direct experiences) and grafting (combining different pieces of knowl­ customer centricity, quality mind-set, ideation, questioning the status
edge together to enable cross structure learning). It also enabled quo, team work, etc.) was seeded. Unlike other organizational change
exploitative learning like empowering the existing resource-base programs where management emphasizes a desired outcome and often
through creating a platform to ideate and execute PIs. LAP enhanced staff resists it, LAP has been a gamechanger. Further, the LAP effec­
the existing knowledge-base to address known problems (He and Wong, tiveness measures obtained through participant staff surveys and end-
2004). Further, LAP also helped individual staff and groups (the project customer surveys showed promising results as a culture change for PI
teams) to learn how to learn in a structured way (4-D methodology), as in the bank.
each LAP sprint contributed to progressive continuous learning for Through this study, we present five implications for both researchers
solving business problems. Su et al. (2014) call this type of learning as and practitioners.
meta-learning, i.e., “the reflection on and inquiry into the process of learning
at the individual and group levels”. This is aligned with Frederick Taylor’s 1. The real-time effectiveness of integrating Lean with Six Sigma and
thinking of emotional and non-emotional behaviors at work, where he Agile to create a powerful synergistic PI approach has been validated
claims that high emotional productivity implies that people behave here. Though the concept of Lean Six Sigma and Lean Agile have
efficiently in support of production with an appetite for continuous their individual imprints in the literature, a combination of both
learning. In other words, they enjoy what they do and continuously these Lean additives together as a synergetic approach has been
share and learn the derived knowledge, and hence, produce effective conceptualized in this study.
output towards economic growth and prosperity. The Center Head of the 2. This study offers a LAP design for practical application. This gives an
India office of the bank (study unit) describes this as: opportunity for managers to consider such deployments in their
respective firms. Through the DS approach, the LAP model has
“Every LAP project yielded tangible benefits and helped us in
shown the practical aspects related to the deployment alongside the
creating a culture of continuous improvement. Beyond its delivery of
strong theoretical base of Lean and its additives. Hence, the use of the
efficiency and cost avoidance benefits, the interesting part of Lean
model is generalizable with appropriate, context-dependent
has been its ability to bring on a customer centric mindset in staff and
adaptations.
enabling them to work towards a quality organization. Most
3. Since our model is based on FP laws, it doesn’t technically discrim­
importantly, the staff enjoyed this experience. I have personally
inate between Lean and non-Lean for PI, ceteris paribus. In fact, it
observed huge excitement about Lean from the staff members
focusses on the outcomes through improved capacity, responsiveness
throughout the past three years. It has been a true game-changer
and reduction of variation. A combination of Lean and its additives
from the staff as well as organizational learning perspectives,
enabled meeting this objective, making this model suitable for both
alongside creating value to clients. I can see Lean laying a solid
Lean and non-Lean organizations with a wider scope of application.
foundation in the minds of our staff for future endeavors like Ro­
4. We have presented evidence that Lean leads to strategic outcomes
botics Process Automation and Artificial Intelligence based
beyond its operational benefits of efficiency and effectiveness. The
initiatives.
case evidence here demonstrates that Lean additives offer organi­
- Center Head, Global Capability Center, Bank under study zational learning in firms enabling exploration, exploitation and
meta-learning modes through structured sprints as observed in the
LAP.
7. Conclusions, implications and limitations 5. This confirms that the concept and application of Lean additives is
not merely a PI practice, but a dynamic capability in firms. Lean’s
Lean as an approach to PI has been extensively used across ability to reap timely returns on investment and its agenda to serve as
manufacturing and services and has proved its success. The operational a pre-requisite for other capabilities like Robotics Process Automa­
understanding of Lean elaborated upon in the literature clarifies its tion (identified through our post-deployment interviews with top
presence as a value component of VRIN1 applicable to any organization. management) confirms Lean’s technical fitness. Further, through its
However, lean by itself is not all perfect in isolation due to its limita­ maturity over three years, Lean exhibited evolutionary fitness as a
tions. The DS approach described in this paper has enabled the design capability which has led to continuous learning and sustenance of PI
and deployment of Lean additives, viz., LSS and LA for realizing both benefits. This would lead to different levels of usage of our model for
efficiency and effectiveness benefits in a bank. Our model takes its roots organizational leaders and policy makers. Our conceptualization of
from three FP laws based on the concepts of capacity, responsiveness LAP and its utility in selecting and implementing new technologies as
and variation. The conceptual design, when deployed and refined across a dynamic capability offers avenues for new types of employment for
several iterations, has led to its technical maturity that makes it fit for contemporary technologies, skill development, organizational
use. The integration of Lean, Six Sigma and Agile makes for novel con­ learning, technology absorption, associated improvements in busi­
ceptual, methodological and practical contributions. It not only enables ness models, and capability to withstand environmental dynamism.
the compelling need for PI as a top-down approach, but also enables
employee ideation, participation and recognition as a bottom-up strat­ This study also serves as a resource for researchers in this field.
egy. The tangible results delivered by the LAP deployment met the Despite seeking answers to how LAP would sustain after 3 years at the
management’s requirements, whereas the excitement, learning and study unit and its related orientations, a few other research directions
culture building among the staff helped in meeting staff expectations for the future include: (a) diagnosing the cultural orientations of Lean
and resulted in a win-win situation for both management and staff. The additives by studying the impact of Lean behaviors of employees on
Lean Additives Program, designed here as an artifact (model) was tested firms; (b) exploring the applicability of Lean additives in different
organizational structures, in firms that are non-bureaucratic and known
for centralized decision making; (c) identifying critical success factors of
1
VRIN is an abbreviation of Value, Rareness, Inimitability and Non- Lean additives in BFSI firms; (d) validating further our proposal of Lean
substitutability. It is widely present in the literature on Organizational Capa­ additives as a dynamic capability, for generalization supported by
bilities, and signifies an essential characteristic of Dynamic Capabilities. empirical analysis; (e) Determining the influences of Lean additives on

12
V. Sunder M and L.S. Ganesh Technovation 104 (2021) 102269

other organizational change initiatives like Robotics, Quality Manage­ arrangement of businesses would improve the generalizability of the
ment Systems, etc. results presented here. Future research should select different types of
We propose the LAP model developed here to work under the stan­ organizations belonging to other industrial sectors for further investi­
dard conditions of service factories, where processes are defined, work gation. Second, this study engages field apparatus in a real-time setting
volumes are stabilized and resource allocations are formalized. Another towards solving an organizational problem. Future research can focus on
important boundary condition of the LAP model is its applicability in a variety of other data collection methods using questionnaires and
service process environment where manual intervention is significant. A analytical modeling methods to arrive at a different set of conclusions.
service factory that is dominantly automated will find less utility in the Third, Lean and its additives form the basis of this study. Several other
proposed model. However, it provides opportunity to customize the dynamic capabilities like process design, agility, product/process inno­
model to refine the automation logic. While we validated the said model vation, etc., were not considered. Future research could explore the
in banking setup, it is applicable across other service sectors that include ecosystem view of Lean additives with other related capabilities, in line
healthcare, higher education, consulting, food and hospitality, tourism with dynamic capabilities ecosystem model suggested by Sunder M and
and manufacturing setup that offers servitization. We believe that Ganesh (2020b), in a recent article.
organizational structural variations do not affect the applicability of LAP We believe that this study will help both academicians and practi­
model, however this claim deserves future research attention. tioners as a valuable resource to understand Lean from a real-time
This study has a few limitations. First, this paper is based on a study perspective. It is perhaps a first of its kind study of the application of
conducted at one global bank. Though DS research permits generaliza­ Lean additives in a multi-national banking firm with high levels of bu­
tion through application of the artifact for solving a specific problem reaucracy and decentralized decision-making practices with a deep,
towards realizing a generic solution, we believe that studying a wider vertical organization structure.

Appendix

LAP training curriculum.

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