Posted by: knightbird | March 1, 2015

Resource Leveling and Budget Experts

I have been frustrated by “Budget Experts” in any organization. They put budgets together, manipulate the budgets when they don’t accomplish what they projected and they control the budget by command. And the games that are played are complex and imaginative. I have thought about his example based on a conversation with my closest colleague. It incorporates a lean view of an organization but is a fictional scenario.

Waste elimination is based on learning to see waste. It’s like any other skill—it can be learned. The infamous Ohno Circle is an example of learning to see, but it worked. You learn to watch and think for yourself. I talk to my colleague about things like this because learning is a collaborative opportunity. We both learn from each other and teach each other. When you understand what waste is, and you can see waste, you are on the way to learning to see. Here is what I see.

Most processes that are not continuously improving (I call them Random and Chaotic—R&S) have incredible amounts of waste in them. But Budget Experts cannot see the waste because they are too focused on the processes involved in preparing and analyzing budgets. A Planner first estimates the number of employees that a budgeted entity needs to accomplish their mission. I assume that the planner says we need 13 employees for an R&C system. The Budget Expert says you have to make do with 10. Each employee will then need both direct and indirect support. For direct support, include all of their benefits, office, computer & supporting machines, Internet, travel and maintenance, software, telephone and any other required work implement. Indirect services include HR, Finance, IT, supervision and any other commonly provided support such as a motor pool (usually supported within the direct budget but requiring Indirect Support as well). So here is what we end up with planned for the system: 13 Employees, 3 in red not allocated.

13Employees

Now we need to get work done with an R&S System. Assuming every employee is equally productive, we have 87% of the resources requested, and should be able to achieve 87% of the work done.

Now we apply Lean thinking to the work we are doing by Kaizen. If we increase productivity by 20% (x 87%=17.4), we now have capacity for 104% of the original planned work. In essence, assuming the planners were correct, we have absorbed the deficit caused because 3 employees weren’t budgeted for. We should be able to accomplish all of the work left undone—the backlog. Over time, we have 4% of our capacity to whittle down the 13% that couldn’t be done, unless we paid for overtime. A 20% improvement is achievable. Many Kaizen can achieve 50% improvement.

At this point, a Budget Expert will say lean is not working. We are not saving any money. This example explains why. If you want to do the job right and have been given insufficient resources, of course you aren’t saving money. All you have done is achieve expected output with fewer resources than originally forecast. You have achieved the output originally attributed to 13 employees with 10, and have an additional 4% capacity to start eliminating the backlog. Of course, you need to figure that improvement events will take time, but assume that we have made up the time through using the 4% capacity prior to eliminating the backlog. We were just ignoring the backlog anyway because we did not have the resources to do the work initially.

Now lets say we achieve another 20% improvement. We now have 24% extra capacity and any backlog will be eliminated rapidly. If we contract services out, we can now bring those services back in house for additional savings. And we can use the capacity for even more improvement events. In fact, we have done so well, we can loan experience employees out to other improvement events in other departments for even more achievement. Or we can detail the extra capacity to a Kaizen Promotion office to help improvement happen throughout the entire organization.

Here is where my colleague helped me achieve more insight. When we have absorbed any backlog, and created capacity, at some point in time we need to remove that capacity from the department. It serves no purpose there. But staff within the department is extremely valuable. They understand your system of improvement and are trained to continuously improve their workplace. They know what standard work is, and the likelihood is that they are becoming increasing more satisfied with their workplace. We can level our resources by assigning employees to other positions that are needed. We retrain and cross train employees to be even more valuable than when they first started. It’s a winning strategy.

A primary strategy for any organization implementing lean and wanting to retain its employees will be the elimination of non-personnel waste. If 2 employees are reassigned in the example above, 20% of direct support is eliminated from that department along with the 20% cost for staffing. The direct support will follow the staff to their new assignments. But we will be meeting the needs of 2 departments with fewer resources. But we are able to level our resources to achieve greater results throughout the entire organization. Now we are thinking as a system.

Part of thinking as a system is to realize that in addition to improving employee output, we are also reducing other inputs into our services or products. We need less space, very small amounts of inventory, fewer pieces of equipment and other costs related to occupancy and indirect. We can prefer employees to spending on other tangibles. By making this commitment to our employees, we build in loyalty to our Lean Implementation and the organization.

Assuming we are not growing our business, at some point in time, we will have achieved a significant level of improvement and have a real need to reduce staff. We can implement the final stage of the 6 strategies I have been discussing. As employees retire, resign or terminated for valid cause, we don’t need to replace them. We can realize the cost savings as we have achieved systemic improvement and eliminated substantial amounts of waste.

Budget Experts understand very little of what I am writing about. You can see it in our current state administration’s approach to their income crisis. They have announced a small layoff of slightly more than 300 employees, many of them currently vacant. The Commonwealth North’s Fiscal Policy Study displays absolutely none of this insight. It focuses on the wrong issues. And when you read about the response from many other state income dependents like municipalities and school districts, they respond in the same way—negatively. If, instead, our state administration recognized the value of our state employees, and adopted a Lean Government approach, perhaps we would have a different response. If we could achieve the same 40% improvement I wrote about in the fictional department I created, then 24,000 employees eventually become 16,800 employees. Services don’t decline and our budget eventually realizes the savings. What a difference approach makes.

Posted by: knightbird | February 27, 2015

National Governors Association (NGA) Lean Initiative

A Lean colleague shared information with me about the new NGA Chairman’s initiative for lean government. Colorado Governor John Hickenlooper announced the initiative as he began his term. Here’s a link to a discussion of the initiative.

As a citizen of the US and Alaska, I want my government to be effective. Whenever I had an opportunity to talk to a politician about lean government, I have taken that opportunity. More often than not, they want to turn the conversation over to supporting them and seeking financial support. They completely ignore the information. I have tried that with all kinds of candidates. In all fairness, I have had to that listened to my talk. Both are attempting to do something with the information. I appreciate that.

Governor Hickenlooper served as the mayor of Denver and I could not find any information on Lean Government implementation in Denver during his tenure. However, his successor launched Denver’s Peak Performance initiative on day one of his administration. And they projected annual savings of $10 million, which I believe is really low given the size of Denver’s budget.

John Shook wrote about Lean Government last summer and offered to Gemba Walk with any local government willing to implement Lean and he would publicize the results. He spoke about his Gemba Walks in Melbourne, AU. It was quite an interesting story. One of the value streams he walked was parking enforcement. Efficient enforcement actually reduced revenue. So the question that had to be confronted involved the mission of process improvement: revenue or public benefit (not that revenue doesn’t benefit the public). Parking enforcement generally has a purpose of allowing access to parking for areas that have needs. If parking turnover increases, you have arguably benefitted someone. If you goal is revenue, then you don’t want to be so efficient that you reduce revenue.

What Hickenlooper is doing will serve to influence others. Results Washington, Colorado, Iowa, Ohio, Wisconsin, Oregon and Minnesota all have lean government efforts. I commend each of them along with Governor Hickenlooper, for their interest in efficiency. It is possible, and I hope Alaska’s governor understands the potential.

NGA calls the initiative “Delivering Results” and the recently concluded meeting held February 21-23, 2015 featured the initiative. I don’t have results yet but Governor Hickenlooper’s opening address is available by video here.

I am excited by the publicity Lean Government is receiving. If you have any influence with Governor Bill Walker of Alaska, let him know.

Posted by: knightbird | February 27, 2015

I Know Nothing

“I am the wisest man alive, for I know one thing, and that is that I know nothing.”

― Plato, The Republic

Too often we have to pretend we know something about what we know nothing. Otherwise, we feel we will be judged harshly for not knowing. Yet I talk to lots of people who acknowledge their lack of knowledge. I think it’s the pretenders who cause lots of our problems. They give us advice we don’t ask for, don’t want and might be detrimental to what we are attempting to do.

Why I like Lean Thinking so much is that we don’t need to be subject matter experts to improve a process. All we need is knowledge about the improvement process, and a willingness to engage those who have spent a good part of their work life in the process we want to improve. An interaction between a Sensei and an improvement group should never assume that anyone has the knowledge required for improvement. Why is that? I believe it’s because of the interplay between knowledge and judgment that I mentioned above. People who assume they know often don’t because they don’t have facts. And when they offer a judgment on a subject under discussion, they stop the discussion. When we assume we know nothing, we open our minds to both data and the thought processes for our team members.

If we are in crisis, we need leaders to step in. For Lean practitioners, we have Kaikaku. I have read a number of stories about how Sensei Chihiro Nakao conducts Kaikaku. He did it with Porsche in the 1990’s and more recently in the Seattle area. Sensei Nakao is a scientist who has done the experiment so many times that he knows what a large part of the outcome will be. And that outcome will be far greater than what can be achieved in a single Kaizen. Sensei Nakao can see the whole. If we are in crisis, we must assume we know nothing, and rely on a leader to take us where they know we can be. Think of a Sensei as a navigator. They don’t know where they are until they collect data. Then they select a destination and gather data for that destination. A Sensei relies on data, but they know how to navigate. When Sensei Nakao enters a workplace, he has learned to see where the students are. Like any teacher, they can solve the problem. But like any teacher, that does no good for the student.

So, in a crisis, Kaikaku works. But you must double back and learn by doing. And you must know how to engage your student when their resistance is at their highest. By doing, the student learns. As the student learns, their behaviors change because they learn how to navigate.

John Shook said it well as he recalled his training at NUMMI:

“What my NUMMI experience taught me that was so powerful was that the way to change culture is not to first change how people think, but instead to start by changing how people behave—and what they do. Those of us trying to change our organization’s culture need to define the things we want to do, the ways we want to behave as well as want each other to behave, to provide training as well as then to do what is necessary to reinforce those behaviors. The culture will change as a result.”

So by knowing nothing, you can lead an organization to profound change. That’s worth something.

Posted by: knightbird | February 25, 2015

Pushback: The Data’s Not Right or Fair  

Real facts and data are bothersome. Because we create a reality for ourselves and firmly cling to that reality, facts that don’t support that reality become a problem. So we push back. We refute the facts. We challenge them. And in many cases, all too common to be sure, we just reject facts—deny that what is, is. For a Lean Implementation, pushback is a challenge that must be met.

A colleague of mine quoted Sigmund Freud in a draft article he is preparing, and the quote is helpful.

“Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint, when they sometimes collide with a bit of reality, against which they are dashed to pieces.”

What form does pushback take and how innovative are the actors in the dialogue? Challenges occur with statements like, “you don’t have the whole story.” The correct response is to get the whole story. “Our results are tainted by another department, they are the problem.” The correct response is a teachable moment about the existence of systems across function and departments tat we want to improve in its entirely. And how about the complete denial? That’s a more complex question because it may actually take us into the small realm of “people problems.” As I have written before, Dr. W. Edwards Deming proposed that 96% of problems are systems based and 4% are people based. People based problems require different approaches based on the people involved.

Here is an example of denial. During multiple Kaikaku, an IT Department was extensively criticized. It took too long to get service. The required updates for an EHR were way behind. The support for software was inefficient and unreliable. When the IT staff went through their Kaikaku, they confirmed most of what had been said in other Kaikaku. So what was the response? Well, the Executive for IT took all of the A-3’s that had been generated and said they would be returned when really completed. I’m sure you can guess that they were never completed nor returned. The data (employee reports) was cleansed. Fortunately, we had digital copies of the Kaikaku and all of the other division reports on the IT Department.

The takeaway was consistent with my other extensive experience. The data was not reliable, that is not collected and preserved at the source according to standards, but the overwhelming opinion said the system was broken. It doesn’t matter that IT was the subject. This takeaway fits with any broken system. So pushback happens. What do we do about it?

I am talking about an unstable system now—one that does not have standard work. The first step is to confirm the data. Establish a reliable data collection system and collect the data. Is this step necessary to improve the system? I maintain it is not. With reliable reports from inside a system, we can improve it without having 100% accurate data. Since every unstable system can be improved if the Kaizen team buys in to a need for improvement, we could improve it without any data other than employee reports. But real data collection does not take much time, it allows refutation of reasons for pushback and lets us get back on track to improving the system.

Similar pushback is described in an example from King County, Washington’s Lean Implementation. Pushback occurred, but the were able to move forward after responses similar to what I recommend. One of their major problems was in recruitment. A Kaizen revealed real data: lead time for hiring took 92 days. After Kaizen, it was reduced to 78 days (15% improvement). I participated in a similar Kaizen on recruitment that had an original lead time of 140+ days that was reduced to 33 days on average. Improvement happens during Lean. The facts demonstrate that. The reason for failure is the pushback that happens. A Lean Leader knows about and has experienced pushback. They know what Nemawashi is. They understand Hoshin Kanri. No blame, no shame is a part of their lexicon. They are coaches and mentors who can bring deniers back into the tribe they are creating in their workplace.

Posted by: knightbird | February 23, 2015

Barriers to Implementation of Lean Thinking—Fear

Employees have varying responses to the stress they encounter in the workplace. In a traditional command and control environment, they learn how to adapt. As I think about successful Kaizen in my career, it becomes clearer to me how the fear response can be a barrier to a lean implementation. Very few lean implementations I have read about have paid much attention to why employees resist—vigorously in many examples. If we know why employees resist, we may be able to help reduce resistance and help employees embrace the change they encounter. Face the fear response head on. I believe that stress based fear can come from 3 sources: developmental stress (such as Adverse Childhood Experiences while growing up); acute and repeated stress (as an adult or employee); and traumatic stress (PTSD type). Every manner of stress affects both behavior and reaction, most likely in different way. For example, developmental stress can affect many persistent behaviors that can include alcohol abuse, smoking, anger and violent behaviors, depression, illness with frequent absence, and an inability to work with co-workers effectively. There are undoubtedly many more behavioral adaptations in the workplace, as well as outside it. Acute and repeated stress can foster certain behaviors in the workplace as well. Becoming possessive about ones workspace (claiming your territory) can be an attempt to create a safe place. Avoiding interactions with a supervisor you have can be a sign, especially if that next level supervisor typically delivers bad news. Posturing, that is claiming credit for positive results, and avoiding responsibility, are other signs of acute and repeated stress. Claiming credit, and receiving positive accolades, feed the reward system of your brain, which should make you want even more praise. Research on acute and repeated stress has shown that a victim often decreases willingness to explore and enter into social interactions. If you try something new and fail, you have a greater chance for negative feedback and the creation of fear at losing your job. It also makes you more sensitive to negative feedback from fellow employees, especially if you hear them laying blame for workplace failures on your performance. Employees also create a network of confidants for justifying poor performance. This becomes the employee underground. They don’t have enough help. There is too much work. Customers are too demanding. What I do is really hard. It’s someone else’s fault because they don’t carry their own weight. Management is at fault. The excuses are limitless. In a fearful environment, employees will respond in one of three ways: fight, flee or freeze. Does that sound familiar? I have experienced all there. I had one manager who didn’t like a recommendation from their boss (me) and a peer. They immediately threw a fit and reacted I ways that I would not have anticipated. I counseled a cooling off period with a discussion later. That counsel was rejected and a resignation tendered. I ultimately accepted the resignation. In another case, I had 2 employees providing the same service. They both checked the workload for each other and vigorously resisted any workload greater than their co-worker. Productivity was extremely low, but there were an incredible number of excuses for the low productivity. After we began improvement work, both employees resigned. They were apparently heavily invested in their world of excuses. My colleague, TM, refers to this a being heavily invested in failure. While I don’t have a complete answer to solving this dilemma, I believe I have made some progress in my thinking. We need to make work a safe place, and for the past 25 years I have been an advocate of Dr. W. Edwards Deming’s principle for driving fear from the workplace. Dr. Deming also postulated that 96% of defective work comes from bad systems, and only 4% from people issues. I use this information as part of a strategy to eliminate blaming employees for poor performance and shaming them for bad results. And part of a good lean workplace is the recognition of problems as “Treasures.” My first Sensei, TJ, advised us to create a virtual Treasure Chest to store problems and address them at the first opportunity. And from John Shook, I draw heavily upon his advice to concentrate your efforts on changing the culture of your organization at the ground level—employees who work in the value streams. You need to require their participation in Kaizen, but make sure that their work is covered. If they are fearful of their backlog increasing, they cannot concentrate on the work of improvement. A 5 day Kaizen is chock full of training. And there is a lot to learn. Make sure the learning is interactive and hands on. You want to demonstrate the value of teamwork when solving problems. For managers, it’s a more difficult process. They are heavily invested in their success and approval. They crave it. At this level, you are very likely to see the protective behaviors I describe above. Mid level managers—between the C Suite and the production level—need to learn how to become responsible for Value Streams instead of functional silos of work. They need to learn how to accept dead time in the workplace, and put it to improvement uses. The skill set they relied on to get their promotions changes, and they are fearful of dead-ending. Some of them will leave to seek a workplace where they can continue their skill set. That’s not a bad result. You then have an opportunity to hire someone more accepting of the changes being made. We also have to accept and plan for the inevitable, a complete breakdown by an employee with extreme fear issues. Unrelenting stress, a fight response, anger with throwing and banging objects as well as running or hiding may happen. Again, try to create a safe space for that employee as you work to reduce their fear and stress. The fear and stress may be coming from other places, and brought into the workplace just because they work there. By demonstrating understanding, providing help and supporting the health of your employee, you build a great workplace that reduces fear. That can help you increase employee teamwork and focus on value creation for their customers.

Posted by: knightbird | February 22, 2015

Reducing the Cost of Governance Support Through Lean Thinking

An article in the Alaska Dispatch News about the cost of the Legislative Cafeteria started me thinking more about how to reduce the costs of governance. By governance, I mean the elected or appointed body that is constituted to consider significant questions and search for answers. My reading for the day gives me a couple of examples.

The Alaska State Senator from Soldotna is on the Senate Finance committee, a governance body charged with putting together a budget for the State. He is quoted in todays Juneau Empire responding to Governor Walker’s budget proposals: “there will be a level of discomfort and a need to pull back to essential services.” The Legislature is an expensive governance cost, and helping them solve problems often relies on hiring consultants to advise them. For example, the Alaska Legislature hired former DHHS Commissioner Bill Streur to advise them on the expansion for Medicaid at a cost of $45,000.

I have been the CEO of organizations that take up a lot of staff time by governance. Governance officials in Alaska receive rather significant compensation. Profit and non-profit corporate board members, Tribal Council members and others like corporate secretaries come at a cost. We don’t know what the cost should be, but it is significant. You can look at any Form 990 (available for free at http://www.guidestar.org), a federally required report on annual financial activity for non-profits, and see how much compensation board members receive. For fiscal year 2012, for example, Alaska non-profit Southcentral Foundation paid its 7 board members a total of $221,704 in meeting fees.

But meeting fees constitute just a portion of total governance expense. Every board seems to have a board room, at a per square foot cost depending on whether the building is owned or leased by the organization. The controls put in place by the board also consume considerable staff time. If a meeting is 4 days in length, as happened at one of my past employers, my time and the time of my executive and other involved staff are considerable. We often had 10 highly staff in the meeting for the entire 8 hours per day, or 32 hours for 4 days. Preparation time for the meeting also consumed a lot of time, as did follow up. Board travel and support costs including meals, hotel and transportation costs also contribute to the costs. Training and Conference attendance was also significant. The governance portion of my budget was in excess of $2.0 million. That was only direct cost, and didn’t include the many other costs we incurred. We had to plan and prepare reports for the board meeting. That meant we kept data and aggregated it for every meeting. And for another example, I had to approve staff travel to conferences and retreats for the sole purpose of driving board members around. I wasn’t able to calculate support costs for governance, but it was substantial.

What are the options for reducing this cost? My approach would be to introduce Lean Governance, with a goal of achieving outstanding service to the governance body by reducing defects, errors and improving Value Streams that serve them. How can we do this? We accomplish it just like we do for any Lean problem statement.

First, a Lean managed organization has fewer problems and issues to report. If we train a governance body in Lean, and have a strategic approach to the products and services we offer, reporting changes. Instead of developing reports and custom product for the governance body, we build the Visual Management System up one more level and the reporting is done for us. While I would recommend a stand up meeting for the Governance Body at the CEO’s VSM Board, you could do the report in the board room through an internet camera of high quality focused on the CEO VSM Board. Because board initiatives would be listed in an X-Matrix, and linked to A-3’s with project teams working on the project, reporting doesn’t have to be separated from regular VSM reporting.

And meetings are shorter. At my first CEO engagement, we would spend about 1½ days on organization reports. At the end of my tenure, we would finish in 3 to 4 hours. And lot of the meetings were focused on socialization.

Having a lean VMS and focused A-3’s addressing issues of concern to the Governing Body reduces the time required to prepare for meetings, and the level of participation required by other staff. They can continue with their regular duties when the Governing Body is meeting. They can also meet less frequently. And think about this possibility. The board can see updates to the CEO’s VMS board if the camera is accessible through their IT links. Imagine that. Any time you want to view progress on a project you are interested in, you sign in to your VPN and select the camera you want. If you can move the camera and focus, then any A-3 and the X-Matrix are visible to you.

Now here’s a crazy recommendation. Why not include a board member or 2 in Kaizen to help them learn what is possible and how to achieve it. My major problem with both boards I reported to is that they were limited by their education, knowledge, training and experience to what was possible. To be fair to them, so are most other leaders I have tried to engage in Lean Management: Governors, legislators, University leaders, Mayors, healthcare administrators and business leaders. They don’t get the potential.

Posted by: knightbird | February 22, 2015

Root Cause

“A root cause is an initiating cause of a causal chain which leads to an outcome or effect of interest. Commonly, root cause is used to describe the depth in the causal chain where an intervention could reasonably be implemented to change performance and prevent an undesirable outcome. …The term root cause has been used in professional journals as early as 1905. Paradies would define a root cause as follows: “The most basic cause that can reasonably be identified that management has control to fix and, when fixed, will prevent the problem’s recurrence.”

Root Cause is well known to Lean Practitioners. Lean is a management system that focuses on a dual pronged philosophy of “Respect for People” and “Continuous Improvement.” By delegating improvement activity to lean trained production workers, you delegate continuous improvement, and respect their talents to achieve improvement. They improve by a relentless search for the Root Cause.

Today, I read that the U.S. Dietary Guidelines Advisory Committee has changed a number of its warnings. Cholesterol and coffee consumption are tops on the list. They have recognized that dietary cholesterol is consumed in such small amounts that it has no effect on serum cholesterol in the blood and body. Coffee consumption has some significant benefits and the Committee actually says that some consumers should consider increasing coffee consumption. In Root Cause analytical terms, cholesterol consumption and coffee drinking have been eliminated as the Root Cause for bad results.

The Committee also took a tentative step towards recognizing something that I have been advocating for some time—that diet affects mental health. In an article published by the Huffington Post, this statement captured the hope contained in the new guidelines.

“For instance, the report mentions that the American Psychiatric Association classifies omega-3 fatty acid supplements (normally found in seafood) as ‘complementary therapy’ for major depressive disorder. And some studies show that a diet high in vegetables, fruits, nuts, legumes and seafood are linked to a reduced risk of Alzheimer’s disease and dementia.

In the past 4 months, I submitted abstracts to 2 different conferences to discuss the impact of nutrition on violence, and had both rejected. I have also advocated for mega vitamin therapies for a variety of mental health issues, including Omega 3 for reducing violence and ADD/ADHD behaviors, B Vitamins for a variety of addiction, inflammation and cognition issues and other vitamins and minerals for reducing the inflammation caused by stress.

Information published takes years to filter through to the general populations, and you will still find many who continue to deny current information based on their past education. This new set of guidelines holds many implications for health in Indian Country, and I hope we pay attention to it. Poor nutrition is the Root Cause of many behaviors that we treat with therapies that might not be necessary. Let’s start a conversation around this topic: the nutritional root cause of many behavioral issues.

Posted by: knightbird | February 20, 2015

“It is not easy to get away from tradition?

“It is not easy to get away from tradition? That is why all our new operations are always directed by men who have had no previous knowledge of the subject and therefore have not had a chance to get on really familiar terms with the impossible. We call in technical experts to aid whenever their aid seems necessary, but no operation is ever directed by a technician, for always he knows far too many things that can’t be done. Our invariable reply to ‘It can’t be done’ is ‘Go do it.’”

Today and Tomorrow (1926)

Henry Ford

I learned of this passage while reading John Black’s book on “Lean Production: Implementing a World-Class System.” I learned its truthfulness from 10 years of advocacy on implementing Lean Thinking in Alaska.

While I taught business, advised business leaders and served on a board of directors, I literally had no CEO experience when I started in my first position 12 years ago. Executives who worked their way through the ranks had learned in systems that they adopted and implemented. Most of the leaders I encounter in Alaska have not had operations experience, and rely on hiring people to make their decisions for them. I was fortunate to be with a small organization and able to spend time in Kaizen and operations improvement events. And I was not restricted in my thinking to specific processes. I advocate for Lean implementation in every nook and cranny for the organization I directed. We applied Lean Thinking to healthcare, records management, IT, HR, finance, grant writing—literally any process we could identify as a process. And as long as the politicians on board let us, we delivered incredible improvements.

I have not cared much for consultants. I invested in one, who I came to admire greatly. But his tenure with us was limited by budget and our desire to learn. Once we had a base of knowledge, we didn’t need technicians. We grew our own.

What is my message? The first lesson is to learn from the words of really accomplished people like Henry Ford. The second lesson is to stop limiting yourself by your current knowledge. Break free of the chains of tradition that are holding you back. Lean the philosophy of Lean Thinking, and practice the tools. What you believe is impossible might become possible. Stealing a phrase from Nike—“Just do it.”

Posted by: knightbird | February 20, 2015

Lean Thinking for Addressing Homeless Issues in Alaska

My involvement in public service in Alaska started with a term on the Bean’s Café board of directors. What a great group that was. The director, Dr. Lynn Ballew, started an organization with a goal of feeding the homeless and hungry. Our first home was a small concrete block building on 5th Avenue, located just across from the Anchorage Sheraton Hotel. Since then, the numbers of homeless have apparently increased in number, and the services substantially expanded and institutionalized. But the increase in services has happened in siloes, without much in the way of Lean Thinking. How do we apply Lean Thinking to the homeless issue in Anchorage? Well, I have some thoughts.

If you guessed that I would recommend a Kaizen event, you are right. We have to have a problem statement, or multiple problem statements. After all, we are tackling a very complex system and there will be multiple problems to address.

We need to know a current state. We spend lots of money on studies and news reports, but precious little on an improvement event. Get 10 people together and hold a Kaizen. We should have an A-3 guiding us. Gather the facts; look for data, and Value Stream Map (VSM) our current programs used for addressing homelessness. We know that public funds are spent on addressing homeless issues, but we don’t know how the entire system works. So many of the services are in siloes, as with any business. If we are going to make progress on our homeless issue, we need to understand the Value Stream of homelessness. Do I recommend going to the Gemba? Absolutely. Map the Value Stream with real facts and that includes movement. Use the tools of Lean to gain as complete a picture of the homeless as we can. Perfection is not required. We have a system in place. It is ruled by Random and Chaotic routines. But it is still a system. Let’s map the system as best we can, and establish whatever data we can. It’s a start.

How do we map the system? Remember the 5 Why’s? Let’s look for Root Cause. Let’s use a Fishbone diagram to explore the whys for the issues faced by the homeless. Use a spaghetti diagram. Run your VSM through a swim lane analysis. Get the data and analyze it.

And what is the next step? That’s simple; create a vision, a future state. What do we want to accomplish.

Then we brainstorm. How do we address the issue we have factually identified? What can we change that will help us make improvements to the system. We do this in a team environment and using Lean methods. We construct our next target condition. What can we improve today? What needs a change in policy and how do we accomplish that change. What requires additional funding, and how do we secure the funding. There is some serious analytical work that must be done, but this is a start.

Following through on the PDCA of improvement events, once we have a plan in place, we manage it Visually. Our project plan must be carried out. We need good and effective handoffs. I don’t have all of the answers, but I know the methodology to use to address the problem. Will the solutions come overnight? Of course not. That’s why Lean is engaging in “Continuous Improvement.”

It would be nice to have Leadership willing to give Lean Social Issues a try. I believe it will work.

Posted by: knightbird | February 20, 2015

The Triality of Waste

Lean Thinkers have to strategize in multiple dimensions. I wrote about an example in my last post that assumed 20 minutes of walking waste daily. Over a year, the cost to the organization for allowing that waste penciled out to $2,500. The ability to free up the 83 1/3rd hours by eliminating the waste has the positive consequence of not paying for the walking. But those 83 1/3rd hours can now be dedicated to adding value. When we have 83 1/3rd hours of value, that adds to products or services a customer can buy and pay for. If we don’t improve, the customer is paying for that waste and failure to gain additional productivity. That’s a dual cost, and if we don’t improve, our competitors will and take away the business we do have.

Now lets add another variable. Think of all of the time you waste in government required processes. Add that time up. For your business, that’s waste. For society, there may be a benefit, but that benefit comes at great cost. What is that great cost? Given that we operate in a global economy there are many costs imposed by government that have great benefit for the world, but are not imposed by other governments on businesses we compete with.

So let’s assume we need to interact with a government process. We are required to invest in employee time for compliance with the government process, and so do our domestic competitors. When that government process is ineffective and full of waste, it causes great waste for our organization, especially if we have ineffective processes to deal with the compliance requirement.

If we assume that our own process for compliance wastes 20 minutes a day, and going through the government ineffective process wastes another 20 minutes a day, our cost is $5,000 annually. IF we consider the lost 20 minutes of value adding time every day, then our cost is tripled. We waste 20 minutes of our own compliance process time, we are losing 20 minutes because of the government’s inefficient process, and we lose 40 minutes of productivity. All of a sudden, out cost is $10,000 annually. (I know there is more waste in government processes than my simple assumption, but I am trying to make this explanation simple).

How can we be competitive if we don’t work relentlessly on eliminating this waste? As private organizations, we should be relentless in our advocacy of Lean in Government. We pay taxes (at least at the local level). If our government can eliminate waste, it will cost less to provide and arguably we will pay less in taxes. That goes directly to our bottom line.

Most leaders, business, nonprofit and government, don’t think about waste or its consequences on the cost side of our organization. A couple of leaders in Alaska understand the duality of waste elimination and added Value. I am sure none really understand the Triality of waste when we look at compliance costs and the waste contained in our own processes and the government processes. That’s another reason we are not competitive with so many other states. Let’s change it. Advocate for adoption of Lean with your state government. I am.

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