July 21, 2009
In sports, it can be more difficult to play the game when the participants don’t know all of the rules. The same philosophy can apply to professional consultation and recruitment.
Stiles Associates, a New Hampshire-based retained executive search firm, specializes in seeking candidates for leadership positions primarily rooted in lean or Toyota Production System practices. But when the firm began helping find lean leaders for companies in the automotive, aerospace, healthcare and other industries, it only knew who to look for—not why.
Times have changed. The growth of lean and TPS as primary process strategies among business and service operations has forced Stiles Associates to catch up in its lean education. For the firm’s services to meet the demands of its clients, the 12-member staff had to learn about lean so they could identify for their clients just who could do more for their companies than just “talk the talk.”
“Truly, the way that we’ve really applied lean here is by having the opportunity every day to be on the phone and meet in person some of the best and brightest in lean,” said President and COO Jake Stiles.
The firm, he added, has been using lean concepts for several years but didn’t begin to formulize them into part of its in-house strategy until 2005. It was around that time the small company was awash in a tidal wave of new business, with a growth of about 70% in headcount and about an equal increase in revenue.
The sudden rush of success, though good news, was an overwhelming experience that revealed flaws in the way the firm was able to manage its business from that point on. “When you’re a small company that goes through that type of growth and change, you really feel the pressure points very quickly,” Stiles said. “We needed to figure out how to be more efficient and how to do things better to create more value for our clients.”
The business portfolio for Stiles Associates today includes about 75% of executive searches for manufacturing and 25% in service, mostly healthcare. Stiles said companies are jumping into lean strategies for different reasons, whether they are driven by competition or salvaging a failing facility. Among the service industries, he added, the largest pull today is in healthcare.
Practice what is preached
Stiles said that after the flood of new business in 2005, the firm aimed to improve its system for executive searches in a way that creates the most value-add for the end user—the client companies. The staff has divided duties into three key areas: administrative, research and consulting. Each of these departments operates collectively to meet the end goal of providing a higher quality of potential lean executives as quickly as possible.
“We can flex our teams very quickly,” Stiles said. “So if a group of consultants is working in one area on one client that is really tough, then we can quickly flex our team to support them."
When the firm began its in-house lean conversion, the staff tried value-stream mapping. The three-day process was an examination of the speed and simplicity of progress from when an executive search begins and when contracts are prepared with respective clients. Stiles said once the workflow current was drawn and future states were developed, the staff was able to tweak the processes as often as necessary.
With a value-stream map in place, the staff was then able to participate in regular three-day kaizen events. The firm also runs kaizen blitzes when needed and has adapted to using more visual management to keep the entire staff updated on all executive searches.
One of the biggest steps Stiles Associates took toward practicing lean was shifting its self-perception from an organization that talked about strategy to its clients to an entity that actually developed and executed a strategic plan.
Stiles said that before 2005, employees couldn’t identify with the firm’s plan or know how they could contribute in a way that would direct it toward success. For example, consultants didn’t have a clear measurement of how close they were to meeting annual goals. In response, the firm created the Stiles Business System Board, which posts key metrics the entire team agrees to and provides weekly tracking updates.
“One of the major drivers for us—and this is by far where we’ve gotten the biggest payback—is trying to drive our lead time down. The average industry standard was probably 130 days, and that’s where we were at least four years ago. In the last two years, we’ve been averaging 190 days, so it’s about a 30% improvement.”
The future of its clients’ business success can largely depend on the efforts Stiles Associates puts forward in its search processes for the strongest lean-specialized candidates.
In its efforts to reduce wasteful time and resources, the firm has developed more visual controls and key performance metrics that have allowed for significant reductions among critical process areas. In the past two years, lean projects have led to a 30% reduction in average lead time for search assignments and an 80% reduction in administrative and billing activities. Similar concepts have been applied to accounts receivable, which once required 61 days but has since dropped to 38 days.
“In terms of being able to grow the business, cash is king,” Stiles said. “We’ve been able to close our searches quicker with a higher level of quality, which the clients love. And we’ve also been able to collect quicker.”
But not all lean improvements can be measured by statistical data. The firm has understood—like most companies incorporating it into their operations—that to maximize the impact of lean, it must be an adopted workplace culture. The team has begun to examine how other lean tools can fit into the workflow from start to finish, enabling Stiles Associates to take advantage of continuous improvements.
“We set our office up in terms of flow, so when the contract comes in the first place, it goes is to admin, then research and then the consulting group. That’s how it flows through,” Stiles said. “We use a great deal of standard work in research. Our admin group uses a lot of visual metrics, a lot of 5S types of concepts, kaizen events and other tools. When you’re using those tools on a regular basis, it’s always going to lead to opportunities for improvements.”
He said another breakthrough for the firm has been not only improving lead time on executive searches, but being able to analyze why the improvement occurred. For example, a sample search for six clients leads to three searches that took more than 130 days to complete and the remaining three only taking 75 days. The firm can now review each assignment to determine what can be done differently to achieve a standardization of faster searches for high-quality job candidates.
“We’ve got to be far more proactive in getting to know our network,” Stiles explained. “We were already doing that but we transitioned to an organization that wasn’t just calling to talk about a search, but also to just see how they were doing and staying in touch. We could even ask now, ‘Hey, if you were going to make a move, what would you consider? Where would you want to be?’ It was just real simple things that help lead us as a group to drive that number down.”
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