The purpose of my research is to study and understand the connection between appreciative inquiry and lean thinking in service development context. The study is conducted for a case organisation that operates in the field of sport and wellbeing. The organisation struggles to systematically deal with new ideas, choose the best ones and lead them from idea to launch. The case company emphasises customer-orientation in their service development and has recently
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started to implement lean principles in their operations. By recognising operational values of the organisation, I wish to gain more understanding on how to implement lean in an organisation where customer-focus is strong and how lean can be built upon this strong focus. Also, by introducing appreciative inquiry to the lean organisation, I will generate knowledge about how strength-based approach can enhance lean thinking. Since lean is all about creating value to the customer and nothing else (Shaked 2013, 19), it is reasonable to start investigating the topic through lean.
The research question is “How does appreciative inquiry contribute to lean thinking in service development context?” The object of the study is the case organisation’s new service development. The empirical context of the study is the organisation where the interviews and the workshop are conducted. Based on focus group research and observation study results, I plan to identify practices that are crucial and valuable in lean service development.
By answering the research question I will contribute to the existing literature by providing more knowledge and understanding about strength-based lean thinking (Shaked & Stampf 2015) in service development. Strength-based lean approach has been studied by some appreciative inquiry practitioners for example a book has been written about the topic by David Shaked (2013). However, there seems to be a lack of scientific knowledge and research about the subject.
To answer the research question, I have conducted an observation study (Eriksson & Kovalainen 2008, 86-89), two focus group interviews (Barbour 2007, 2-3; Eriksson & Kovalainen 2008, 173-190) and a thematic analysis of the data (Thatchenkery 2017) gathered in these sessions.
The practical contribution of the study is to provide the company recommendations that will help them overcome their difficulties in finding the best ideas and making them happen and reducing the amount of time and other resources (“waste” in lean literature) spent on developing poor ideas. The recommendations will work as the elements of the new service development process of the organisation. The academic contribution, on the other hand, will be combining lean principles with appreciative inquiry.
6 1.3 Key concepts of the study
The key concepts of the study are lean thinking, appreciative inquiry, new service development, social constructivism and appreciative lean thinking. In this section, I will introduce each of these concepts.
Lean thinking is a model for operations management that focuses on the elimination of waste and generation of value to the customer (Hines et al. 2004), originally used in production but nowadays also applied in for example health care, public sector and service sector (Suárez-Bazarra et al. 2012). The origins of lean thinking are in 1950s Toyota car manufacturing (Toyota Production System) and it represents an alternative to capital-intense mass production. In 1970s manuals about Toyota Production System were written and the secrets of lean approach were revealed to companies outside Toyota, however the manuals were in Japanese and it took almost another decade to translate them into English. At first, lean implementation was highly tool-based ignoring most of the human aspects in high-performance work, until in the beginning of 1990s the focus shifted to quality, in the late 1990s to quality, cost and delivery, and in the 2000 to customer value. Also, the principles of lean thinking were summarised as identification of customer value, management of value stream, flow production, inventing pull mechanisms to support flow of materials and finally, elimination of waste. (Hines et al. 2004.)
Appreciative inquiry is an organisational development intervention and a qualitative research method that has social constructivism philosophy embedded in it. Appreciative inquiry focuses on recognising the positive core of a system. Rather than solving and concentrating on the problems, appreciative inquiry focuses on finding out what works best in the system and designing and co-constructing the future. (Bushe & Kassam 2011; MacCoy 2014., Thatchenkery 2017.) Deficit-based problem solving may lead to finding even more problems, whereas focusing on the positive should lead to success (Grant & Humphries 2006; Preskill & Catsambas 2006, 4).
According to Barge & Oliver (2003), deficit language and problem-solving approach rarely results in new vision in organisations, and it increases the level of defensiveness and powerlessness among the employees of an organisation.
New service development (NSD) process is a set of interconnected tasks, activities, actions and evaluation resulting in a new service and its launch. Effective new service development is vital
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for companies who wish to succeed in their new services and it implies to organisational performance as well. (Santos & Spring 2013.) The need for new service development management and activities in organisations have increased due to heightened competition, increased heterogeneity of customer demands and shortened life-cycles of products and services (Menor & Roth 2008).
Social constructivism is one of the key concepts of the study, as appreciative inquiry requires knowledge of it in order to get it right. Social constructivism emphasises that social reality and knowledge is co-created in everyday activities, conversations and social interaction (Eriksson &
Kovalainen 2008, 14; Bushe & Kassam 2005; Holma et al. 2017; MacCoy 2014; Preskill &
Catsambas, 2006, 125). Social constructivists believe that language, knowledge and action are inseparably connected and that organisations are outcomes of its members’ interactions, which are influenced by their cultural, social, historical, economic and political experiences and incidences (Grant & Humphries 2006).
Appreciative lean thinking combines traditional lean thinking and appreciative inquiry by getting the best out of both worlds creating more sustainable results. Discovering and co-constructing a vision based on the positive core and “the best of what is”, planning ways to reach this vision and implementing ideas that create the most energy makes it possible for the members of an organisation to thrive at work. (Shaked & Stampf 2015.)
Most of the principles behind lean thinking have a positive focus. However, most lean initiatives follow a deficit-based approach to problem-solving, by examining the existing problems in detail, finding root causes and fixing them. There is an assumption that a theoretical “perfect state”
exists in each organisational process and by fixing the inefficiencies and eliminating the waste, the perfect state can be reached. This way of searching for problems leads often to frustration, finger-pointing and blaming each other. (Shaked & Stampf 2015.)
Appreciative lean thinking can make process improvement engaging, creative and resourceful.
Appreciative inquiry uncovers successful past experiences, emphasises them and helps them to be built upon. Appreciative inquiry creates a shared vision of the future, what the future looks like and how to get there. (Shaked & Stampf 2015.)
8 1.4 Case organisation
The case organisation of the study is a Finnish national sport institute. The institute provides vocational upper secondary and further education and training for youths and adults. In addition, the institute offers a wide selection of sports, activities and facilities for professional and amateur sports enthusiasts. The case institute is a member of the sports academy network serving as a coaching centre for athletes and supporting them in combining studies and training. (Ministry of education and culture 2017.) The organisation employs around 60 people.
The case organisation, as all the sports institutes in Finland, receives government funding based on their educational task. The training centres may also be granted other government aids for construction of sport facilities and additional development projects. (Ministry of education and culture 2017.) As the amount of government subsidies have decreased, the sport institutes are forced to find new sources of revenue and develop profitable and quality services that both attract customers and create added value for them.
The topic of the thesis is formed together with the case organisation for their new service development needs. The organisation will form an NSD process to clarify their service development and make it more efficient. At the same time, the organisation has recently started to implement lean in their operations. The purpose of the research is to gain understanding and knowledge about lean service development and contribute to it with appreciative inquiry.
Through the theory of these two, recommendations will be provided to the case organisation on what aspects should be involved in the process the company will later on form, partly based on the master thesis and combining the needs of the organisation. The thesis aims at responding to the organisation’s need for developing their service innovation in order to succeed in the market.
1.5 Structure of the thesis
In chapter 2, I will present the theoretical background of the study. I will conduct a thorough discussion about the topics of lean thinking in service development, what lean philosophy is and how lean should be implemented in a service organisation. I will introduce the origins of lean production management and explain how lean has developed into a popular operations
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management process for other sectors, as in this case, service sector organisations. I will introduce lean as a philosophy and further elaborate how lean thinking should be implemented in an organisation. Also, in chapter 2, I will present the topics of appreciative inquiry and new service development. Based on these three entities I will be able to construct a theoretical framework of my own study, which will focus on appreciative lean thinking in service development context. In order to do this, I will highlight the positive and strength-based focus of lean and try to establish a link between lean thinking and appreciative approach.
In chapter 3, I will discuss about the methodological choices of my research. I will explain how appreciative inquiry can be utilised in qualitative research and deepen knowledge about social constructionism, a research philosophy that plays a key role in appreciative inquiry. In addition, I will explain the concept of appreciative facilitation and present its role in appreciative interviews.
In data collection chapter, I will elaborate and justify the data collection methods I chose the appreciative initiative in the case company. At the end of the chapter, I will critically evaluate the methodology, data collection and data analysis methods of the research.
Chapter 4 includes the empirical evidence and results of the study. The empirical evidence will be presented based on a content analysis and an appreciative inquiry matrix, which was built to understand the link between lean thinking and appreciative approach in more detail. Based on the evidence from the research, deeper understanding about the service development in the case organisation is generated. Also, I will explain how appreciative lean thinking appears in the case organisation’s service development. At the end of the chapter, I will present a summary of the key findings of my research.
In chapter 5, I will present a final discussion of the findings of my study. I will discuss the empirical evidence in relation to the existing literature of the topic. In this section, I will give my recommendations to the case organisation based on the results of my study. I will also provide an evaluation of the theoretical and methodological limitations of the study and present the practical and managerial implications of the results.
10 2 THEORETICAL BACKGROUND
Below I will elaborate what sort of previous research there has been concerning lean management in new service development and how does it guide my own research. I will discuss about lean as a philosophy and how lean should be implemented in service business context. I will also introduce the topic of appreciative inquiry and the theoretical framework for combining appreciative inquiry to lean thinking. Moreover, I will describe the literature, preliminary studies and personal experiences that will support me in understanding the phenomenon I am about to study in my thesis.
2.1 Lean service development
Lean is one of the best-known methods for process improvement. The roots and origins of lean production are in Toyota Production System (TPS). This system was initially created to increase value and reduce waste, which would then again reduce costs, improve product quality and shorten the time of delivery. (Browning & Sanders 2012; Ellis 2016, 179; Hines et al. 2004;
Kouri 2011, 6; LeMahieu et al. 2017.) Starting from the automobile manufacturing industry, lean has established a firm presence and continues to evolve in operations management. (Samuel et al.
2015.)
Manufacturing firms have utilised lean management successfully for some time, which has caused a rise in companies implementing lean techniques and methods also in service sector, in which organisations are constantly battling with similar external pressures to reduce costs, improve quality and increase flexibility (Suárez-Bazarra et al. 2012). Lean service has been proved to reduce waste, improve flow of process and bring more added value for customers (Asnan et al. 2015). The implementation of lean in service sector has also resulted in improved customer service delivery through waste reduction. Even though the benefits of applying lean thinking in service sector have been recognised, the process is still in its early stages. (Piercy &
Rich 2009.)
Five principles that guide an organisation towards a lean model have been recognised: (1) understanding and identifying the real value the customers seek, (2) visualising all the steps in the value stream – stages where value is created and steps that do not generate value from the
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customers point-of-view, (3) making these steps flow without interruption or delays, (4) implementing a pull based responsive system and (5) engaging all staff members and management in continuously finding ways to eliminate waste that does not create value to the customer. Supporting these principles and applying them in an organisation results for example in positive cultural change and group-based working, and it encourages in bottom-up involvement.
(Hines et al. 2004; Piercy & Rich 2009.)
However, there has been resistance towards applying lean methods in service-based organisations, mostly due to insufficient understanding of what a lean service is. Lean cannot be implemented using manufacturing methods in a service organisation. On the contrary, it must be implemented based on a business model of a service organisation, and it demands notable organisational commitment from the management. (Cervone 2015.)
The difference between lean manufacturing and lean services is that lean manufacturing focuses on process improvement and tuning various components within the process in order to achieve optimisation of the whole. Lean services, on the other hand, focuses on the optimisation of the services through professionalisation of work functions and helping the people involved in adapting to change. (Cervone 2015.)
The essence of lean thinking and lean services approach is about removing waste and improving efficiency. Waste in lean context means activities that do not create value to the customer. When value added steps are extracted from the process, wasteful parts disturbing flow between activities become visible and thus easily identifiable and eliminable. In short, when unnecessary and unproductive things are eliminated, a better position and efficiency and lower costs will be achieved. (Browning & Sanders 2012; Cervone 2015; Marley & Ward 2013.) Identifying waste is essential because it increases costs. Waste can include for example waiting, overprocessing and unused employee creativity. (Majava & Ojanperä 2017).
Value creation in lean literature is often considered the same as cost reduction. Ultimately, the customer decides what is waste and what is not. Value is created when internal waste is reduced and eliminated. If waste and the associated costs are reduced, the overall value for the customer increases. Moreover, value is increased when additional services valued by consumers are offered. (Hines et al. 2004.)
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While lean relates to high performance and continuous improvement, it is also associated with a culture where disruptions rarely occur. Lean thinking in general emphasises the importance of good relationship with customers and suppliers, since they have a significant effect on the value creation. Customers define the value which the firm produces with the help of the suppliers.
Managing this extended value stream enables the organisation to deliver increased value to the customer more efficiently and cost-effectively. (Marley & Ward 2013.)
The philosophical principles of lean in a service-based organisation are (1) aiming for continuous improvement and (2) respecting people involved in the process. The five goals of using lean are (1) increasing customer value, (2) reducing and eliminating waste, (3) management as a facilitator, (4) involving all employees and (5) continuous improvement. Delivering quality, while reducing costs is a core principle of lean and should be the driving force in all operations.
(Cervone 2015.) Moreover, these principles and goals guide lean service development.
2.1.1 Lean as a philosophy
Samuel et al. (2015) have identified four main themes of discourse within the literature of lean, which are (1) lean as a generic representation of Toyota Production System, (2) lean as process improvement method for organisations, (3) lean as an ideology and a philosophy that has developed over time, and (4) lean as a polarised body of academic literature that has progressed over time. In this study, I will focus on lean as a philosophy that has become a popular tool in the service sector for improving operations. I will examine the similarities and the applicability of appreciative approach to lean philosophy.
Lean thinking is about understanding and adopting the philosophy of constantly inventing ways to reducing waste by applying lean tools and methods for increasing customer satisfaction. It is essential that the lean philosophy is embedded in the minds of the managers and the employees in order to achieve continuous improvement. (Asnan et al. 2015.) Bhasin & Burcher (2006) claim that many organisations seem to fail in their lean initiatives by considering lean as a strategy, when they should view it as a philosophy. Lean should be seen as a philosophy, because if regarded as a tactic or a strategy, one might apply the lean principles only to achieve the end
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results. Hence, lean should be considered as a mind-set that governs how business and processes are looked at.
Lean philosophy relies on three main goals, which are flow, harmony (pace set by customers) and synchronisation (pull flow) that has to exist in every sector (Bhasin & Burcher 2006). Amer &
Shaw (2014) define lean as a philosophy that comprises a set of principles (Hines et al. 2004;
Piercy & Rich 2009) of organising and managing an organisation that can help the organisation to get on a path of positive learning and improvement. The philosophical principles of lean in a service-based organisation are (1) aiming for continuous improvement and (2) respecting people involved in the process. (Cervone 2015.)
2.1.2 Implementation of lean
Lean implementations, at least in manufacturing context, may sometimes fail due to a sole focus on reducing waste and its methods. Organisations seem to attain significant results in the beginning of lean implementation by concentrating on the most common waste reduction methods. Indeed, waste reduction plays a key role in lean, but alone it does not create a lean thinking organisation. Neither does it generate continuous improvement. (Dombrowski & Mielke 2014.)
As mentioned earlier, lean cannot be implemented based on the same methods in a service organisation as in manufacturing organisations. The implementation must follow the business model of a service organisation and it requires notable organisational commitment from the management. According to Bhasin & Burcher (2006), lean can only be successfully implemented when it is not treated as a strategy but as a philosophy that contains major changes in an organisation. It should not materialise only on the shop floor but instead it should extend to the whole organisation. To achieve successful results from lean, it has to be implemented in its entirety, not piece by piece. Scattering lean tools may confuse the members of an organisation.
Moreover, lean is an entire business philosophy, meaning that it should be implemented as a
Moreover, lean is an entire business philosophy, meaning that it should be implemented as a