How To Use Lean Six Sigma For Accounting
Dustin Hostetler, previously the Principal at Flowtivity and current Director of Lean Six Sigma Consulting at Boomer Consulting will show you how to increase productivity in your accounting firm.
He’s been a lean six sigma black belt for over 13 years and continues to consult with firms like yours.
In this episode of the Growing Your Firm Podcast by Jetpack Workflow Software, David Cristello and Dustin Hostetler discuss:
+ How to apply lean six sigma to your firm or practice
+ The proper structure for reviewing and optimizing workflow and processes
+ Common workflow mistakes firm owners make
and much, much more!
What is Lean Six Sigma?
Dustin Hostetler, Chief Innovation Officer of Boomer Consulting, started his career actually as a financial analyst at Cardinal Health. He had graduated with a finance degree and spent two years at the company rotating through different roles trying to find his passion. In 2005, he joined with a Top 100 regional accounting firm as they needed a consultant, and that’s what Dustin was looking to do. In 2006, he got his lean six sigma black belt and started implementing the practice into one of the satellites of his company. After one busy season, senior staff members said it was the “best busy season ever” thanks to the lean six sigma practices implemented thanks to Dustin.
That brings us to the million-dollar question: “What is lean six sigma actually?”
Lean six sigma focuses on optimizing client value. The process finds and reduces waste. Waste = redundancies, duplications, anything that doesn’t provide value. It then improves the processes to further optimize value.
Bottom-line…efficiency + quality in your firm.
How to Start Implementing Lean Six Sigma?
Before Dustin does any sort of tinkering, he has to go through two major processes.
First, he works to get ‘buy-in’ from partners. The firm must be ready to make a massive change. They can’t be looking for the ‘flavor of the month’ fix, they need to be ready to make a move. Lean six sigma is a full-on cultural change. In order to proceed, Dustin must see some sort of level of commitment from the firm, not to mention, get a notion they are excited about the change.
Second, they must start with a specific area of their firm. To do that, Dustin must be allowed to present a half-day to a full-day seminar on the subject. This isn’t a lecture series, but rather a collection of interactive demonstrations and discussions built around your team. One event is building legos where you pretend the lego shape you’re trying to build is a tax return. You go through each person who touches the process and it really lets you see how people work and think.
The big part is the discussion with each other. Henry Ford famously said, “No one knows the work better than the people doing the work, so let’s ask them.” Break up into groups: associates with senior associates, managers with senior managers, partners with senior partners, and administrative staff. Get them all into a comfortable environment, learn where the opportunities are. This is the key.
Let each person speak freely in their groups. Really run through the current processes of the firm and vocalize it to every group so each person can see the big picture of each person’s role. The key is for everyone to see what each person is doing so they can fully understand the importance of a team working together.
DAVID’S TIP:While talking with an executive at IBM, the executive mentioned as the IBM team grew, the cracks in the awareness formed. You’d hear “I didn’t know Sally did this and that.” When you understand other’s responsibilities, you’re able to work together and be willing to do things a certain way because you’re helping others.
The 5 Steps to Implement Lean Six Sigma:
The 5 steps to implement lean six sigma are simple. A few we’ve already touched on. Here’s all five:
Define is getting in groups, as mentioned, and going through processes and workflows to find opportunities. It’s getting on the same page, defining the scopes, goals, and objections. Dustin recommends practicing the “5 WHYs” when discussing and looking for opportunities. Like a 5-year old asks “why”, you want to ask “why” about everything you and every team member does. It uncovers if something is important or fluff.
Measure means to map out the current processes, perhaps through a flow chart. Don’t go off what is ‘documented’ but what is actually done. Some honesty is required. For a tax return, map out in a flowchart how it goes from engagement to executing to finishing. See where the opportunities to expand or trim are.
Analyze looks at everything you discussed and measured and have an honest discussion about what needs to change. This is where conflict and slowdown can occur. If possible, start with deciding on changing one thing at a time if that’s what’s needed.
Improve has you looking at “what needs to change?” and beginning to implement. Let team members get adjusted to new workflows and processes. Work out the kinks here.
Control keeps a tight leash on your new implementations. When everyone can understand “why this new workflow is better than the old one” you get buy-in and excitement from the team.
To keep everyone accountable, Dustin recommends the leaders of the lean six sigma implementation should meet at least twice per year if not more. They should debrief on busy seasons and where processes messed up. Then, later in the year, have a get-together on refreshing everyone on the new processes. If team members start following back to old habits, it will be all for naught.
Common Mistakes When Implementing Lean Six Sigma:
There are a few common mistakes Dustin highlights that firms commit.
First, some partners go right to ‘improve’ in the 5 steps. They skip the first four steps perhaps because they just saw a new software or heard about a new product. The 5 steps are there to identify what improvements need to be made and are best for the team. Plus, it builds buy-in and support when the entire team addresses issues and goes through them. Going right to “improve” is hasty and typically results in bad execution and efforts that fizzle out.
Second, team members can fall into the trap of implementing ‘a la carte’ changes. They pick and choose what they want to change and what to keep. This is an “I” mindset not a team mindset. The lean six sigma process is to develop strong, efficient, profitable teams, not individual islands.
In the end, you’re trying to gain results. Those results should be faster workflow, more efficient processes, higher realization rates, and better profits. Also, your team develops better, you have more leverage overwork, and it utilizes the talents of your team the best.
If you have a question about lean six sigma, head over to Boomer Consulting and drop a note to Dustin.