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Wednesday, March 30, 2011 - Has your budget been reduced lately? Create and relate using lean
Shannon Flumerfelt, PhD., Lean Thinking for Schools

After successive years of budget reductions, many school districts now face deeper cuts than anticipated because of state-based budget targets. According to the Center on Budget and Policy Priorities (Feb. 8, 2011), state funding cuts are deeper now than they have been in the past two years for K-12 education (in 34 states) and for higher education (in 43 states), and that for 2012, cuts will continue and may be worse than 2011.

As school districts and institutions of higher education examine ideas such as consolidation, online learning, merit pay systems, privatization and service/Full Time Equivalent reductions, the pressure is mounting on school leaders to develop viable solutions that will enhance futures of sustainability.

For districts versed in Lean technologies, while budget reductions are extremely difficult, they have a toolkit needed to navigate this process skillfully. In fact, I am learning that Lean districts are actually experiencing more focus and more transformational work than ever during these challenging times.

If your budget has been reduced and you are interested in applying Lean to your leadership practice, your executive team may benefit from the following strategies, developed for different stages of the Lean journey. If your executive team is at the beginning stage of Lean learning, there are two key actions that will assist with budget reduction.

The first action is to create alignment internally in the executive team. This results in clarity about where the top priority value streams in the district are based on mission. This strategy uses the Lean  tool known as kaizen, whereby the executive team takes the time to deconstruct and reconstruct district priorities in order to improve them.

This strategy is suggested because it can eliminate the stress and frustration that occurs when budget reductions are announced and silos develop as a self-defense mechanism. This strategy suggests that the executive team creates internal alignment before dealing with the public. This should help to keep budget reduction work from fragmenting due to internal dissent.

The second action is to relate authenticity to key district stakeholders. This strategy is based on the Lean tool known as the A3, whereby the executive team engages in the Plan-Do-Check-Act cycle. This strategy is suggested because it can eliminate the stress and frustration that occurs when the public begins to ask for school leaders to justify themselves as an expression of transparency.

When transparency is implemented as a reaction in such a way, it is rarely effective. Authenticity is suggested because it enables the executive team to establish a proactive, ethical and transparent position within the community.

If you are interested in discussing your Lean leadership learning needs, contact the Pawley Institute at

Suggested steps for implementation of these two strategies for beginner Lean teams are:

1. Create alignment in the executive team
     a. Contextualize and internalize your mission against cuts
     b. Test your strategic plan for relevance and re-prioritize, if needed
     c. Scope out the overall degree of restructuring needed
     d. Identify assets to leverage budget reduction work
     e. Identify budget metrics to heighten accountability

2. Relate authenticity to district stakeholders
     a. Develop clear, consistent messaging based on mission
     b. Implement clear protocols for cost saving suggestion input
     c. Facilitate reasonable stakeholder input forums
     d. Report back on process effectiveness and final results

If your executive team is in an advanced stage of the Lean journey, there are two key actions, in addition to the beginner actions above, that will assist with budget reduction.

The first action is to identify shared measures of performance for the executive team. This suggestion will drive the executive team into the dynamics of high performance and focus them on root cause solutions.

This strategy is suggested because it provides concrete executive team goals derived from clear statements of the problem, as reflected in the A3 tool. These shared measures of performance should help with maintaining focus on improvement within the context of budget reduction.

The second action is to engage stakeholders in process improvement via structured protocols. This action will provide stakeholders the opportunity to contribute to the dynamics of process improvement, rather than focus on individual agendas or personal requests during these difficult times.

This strategy minimizes stakeholder involvement that is destructive and provides ample yet controlled venues for contribution of root cause analysis and solution identification.

In addition to the beginner steps above, suggested steps for implementation for advanced Lean teams are:

1. Identify shared measures of performance for your executive team via structured protocols
     a. Prioritize and attack weakest link constraints for budget resolution
     b. Develop shared accountability for team performance by identifying team metrics
     c. Consider a “blank sheet” approach for restructuring to create creative thinking
     d. Use daily huddles to reinforce alignment, celebrate success and deal with problems

2. Engage key stakeholders in process improvement via structured protocols
     a. Use Lean teams and scoping teams of stakeholders to improve processes
     b. Measure improvements against budget metrics