Thursday, June 13, 2013

(N)PCA an addition to LEAN thinking?

Those applying LEAN are familiar with AVA and NAVA; (Non) Added Value Activities. Of course Added Value is seen from the customers' perspective. It is very beneficial to look at a process based on AVA and NAVA. But is it sufficient?

When an activity is of Added Value, does it mean that the customer is willing to pay the cost for it?
With this in mind I like to introduce the terms (Non) Permissable Cost Activities, or PCA and NPCA for short. When is it and isn't appropriate, permissable, for an activity to cost money, e.g. that a supplier is allowed to earn money on the activity?

It sounds probably quite strange to talk about 'permissable' in relation to the earning of money of a supplier. Take it as a change in mind-set and bear with me when I take you through two examples: Employee Scan and Education.

NPCA in Employee Scan
A good employee scan starts of course with a proper intake with the client. Important is to get a good picture of the real question and define this as SMART as possible. The next step is to create a proper questionnaire, send it out and collect the answers. These answers have to be objectively processed and based on this conclusions have to be drawn in how to proceed.

This process not only assumes that the client has a broad look on all aspects of his organization. It also assumes an objective view of his observations. Even if this is the case, then the employee scan will have no value but to acknowledge that what the client already knows. A Smart educated consultat would say: the client had a hypothesis and we verified it.

Would this same smart educated consultant also inform his client that testing an hypothesis is an intervention in itself? An intervention that has a real chance of becoming a self-fulfilling profecy Or in plain English: there was no problem X, but by asking the 'right' questions at least the perception was created that the organization faced problem X.

A more pragmatic consultant would say: " We can spend a lot of time assuming all sorts of things, but there is only one way to find out: let's ask the employees." So a wide scanning, indicative questionnaire is a good starting point. Based on the outcome of this questionnaire, conclusions can be drawn what items are playing up where in the organization. Based on this decisions can be made what the proper steps forward are.

The outcome of this wide scanning, indicative questionnaire has value for the client. Of course the activities needed to draw the conclusion have value for the organization (showing the employees you take it seriously, making sure employees get added value for themselves by participaiting, etc). However, ther Permissable Cost is ideally zero. The end report and all that follows is allowed to have costs for they address a specific and objecively found need.

In other words, the activities involved to execute a wide indicative employee scan IMHO are NPCA, Not Permissible Cost Activities. As soon as is known where in the organization reside which attention points, then all activities that are needed - be it further investigation or other interventions, are PCA; Permissable Cost Activities.

This way of thinking will turn the world of organization advisors upside down. Many of the assumed NPCAs are charged nicely at the moment. then again, it is all a matter of organizing oneself differently and smarter. Any how, it illustrateds the mind-set of NPCA and PCA: when can/should you ask for money and when not. This way of thinking creates opportunities for new solutions.

NPCA in Educatie
For the time being, maybe not for the right reasons, I like to exclude kinder gartern all the way to high school. The rest, college up to university and all professional training that follow afterwards, this is what it is about. Key, or at least a significant portion of this type of education is the transfer of knowledge. And without doubt, this is very valuable.

Knowledge transfer is an AVA, an Added Value Activity. And the more important and the more renowned the knowledge, the higher it can be priced ... and usually this is the case. It is of utmost importance to ensure the right foundation. A lot of knowledge transfer, espacially the foundation, is usually a lot of sending. Quite a lot of the time of teachers/educators is about sending the message accross the room.

But let's dive into the common practise of sending the message. In order to send the right message accross to as many people as possible (people with different learning styles, concentration spans, intelligence, motivation, etc) the message must be below the average ability of the group.

Mind you, almost all group based education is being executed BELOW the average ability of the group. the more diverse the group, the more below average the group is being taught.

So we're dealing here with a dilemma: to make sure knowledge transfer is as good as it ca nbe, the group size should be small; ideall sized one. To make knowledge transfer affordable, the group size should be as large as possible. Khan Academy has its own interesting approach to this dilemma.

The teaching of the foundation is an AVA, an Added Value Activity. But does it mean it is also a PCA, a Permissable Cost Activity?

IMHO this is not the case. Delivering the foundation to an individual can be done by means of small chuncks of material (texts, video/audio lectures, examples, exercizes). Students can work in their own speed through the material. Progress monitoring can be done on distance by looking how and which exersizes are completed

Interventions can be targeted; either because the student starts lagging behind, or is progressing to fast. In either case, these interventions are, Permissable Cost Activities because they are driven by an explicit and well defined need.

The work field of teachers will shift from repeating the same message to supporting students in absorbing and applying. The knowledge and experience of teachers will definately improve by this and will add more value to the NPCA part. Even more I do expect more improvements and innovations as well; both for the students as for the teachers. Simply because in the interaction, in the application, this is where all the exciting and unexpected happens

I hope for a new way of looking at activities and processes by introducing the terms PCA and NPCA. A different look that will result in less spending of time, energy and money in basic features. That this 'free fall' will be used to real application of thngs and innovation. That the group, under performance, paternalastic thinking and acting will be replaced. Smart guidance of the individual and that the cost are incurred in places where direct added value is created for special circumstances.

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