Posted by: knightbird | February 26, 2017

Your Mental Management Cave

“We were trapped in a mental cave of our own making and were unable to escape our preconceived notions of military operations and decision making.”

Major Blair S. Williams, U.S. Army

Major Williams wrote an article about a new system of thinking for military leaders to meet the exigencies of today. “Heuristics and Biases in Military Decision Making.” [LINK HERE] I was struck by the analogy of the mental cave, and decided to read the article.

I have worked with a lot of managers, Presidents, CEO’s and political leaders. Most claim great success in their careers, as they define it. I usually have a different view, which does not make me very popular with them. I always believe there is room for improvement, but I am always willing to talk about why. I am also trying to learn that you do need to compliment people about their performance at times, and find a way out of their biases. Still, it has been incredibly hard to get a leader to consider different methods of thinking. Major Williams describes the difficulty for different thinking in the military, and the great need for it. The world of war has changed again. And the military needs to change with it, according to Major Williams. The world of business is no different.

When the world of manufacturing changed because of the challenges Toyota posed with its Toyota Production System, our U.S. auto manufacturers were slow to respond. They lost billions of dollars in future opportunity and actual cash, pursuing conventional thinking. Many of them are now gone. But leadership cares not because they made millions from following conventional thinking. They made money for the company, but should have made more.

In 2007, the Department of Defense followed other service branches and mandated the use of Lean Thinking as their management system. The results, while not well publicized, are there. I frequently use the Red River Army Depot as an example of extraordinary use of Lean Thinking as the improved their rate of rehabilitation of battle damaged vehicles by 6,400%. Yes. That is the number, verified when they won their Shingo Prize. They went from one vehicle rehabbed every 20 hours (2 days of 10 hour shifts) to 32 vehicles rehabbed per day.

Major Williams discusses the need for decision making to occur at lower levels of management, and that is exactly what Lean Thinking does. Problem solving should occur at the lowest level possible, and where the problems occur. The employees at that level have the most knowledge.  Leadership is to coordinate the system and its improvement, and train/assist the employees engaged in improvement. bases his discussion on the findings by Daniel Kahneman and Amos Tversky’s theories in behavioral economics. He states:

“They (Kahneman and Tversky) proposed that when facing numerous sensory inputs, human beings reduce complexity via the use of heuristics. In the course of these mental processes of simplifying an otherwise overwhelming amount of information, we regularly inject cognitive bias. Cognitive bias comes from the unconscious errors generated by our mental simplification methods.”

Now, I am writing about 2 different groups, leaders and followers. Both utilize Heuristics, but many followers are trained to follow. Leaders are also taught to follow, although what they follow are Heuristics they learned as they climbed their path to leadership. When you make a poor decision, people will follow. And when that poor decision leads you on a destructive path, people suffer. But in the military, followers can die. There is great incentive to revise thinking processes to avoid unnecessary death.

In business, you can lead your organization to an unnecessary death (bankruptcy or going out of business) unless you can change. Major Williams describes 2 steps we need to take. First, we need to recognize bias if we have it. Second, we need to train how to make different decisions based on thinking, reacting and in the case of lean thinking, in a team way.

I have not yet figured out how to change minds. Biases are too strong, especially for those who have very little leadership experience and are basically still followers. They tend to attach themselves to someone who does their thinking for them–someone very conventional, but at a higher level of knowledge and with more leadership experience.

My conclusion is that we need radical change in management in the U.S. It won’t happen because conventional leadership is making far too much income by catering to boards and blaming others. Errors and defects are explained away. We can’t seem to find a way to stop what is happening from happening, but we can sure make life miserable for employees working in the system.

Posted by: knightbird | February 23, 2017

Biased Assimilation of New Evidence

I have spent over a decade trying to persuade managers to adopt Lean Thinking in place of typical command and control management. But by the time a CEO or highly placed executive reaches their position, they are not prone to accept new information. In a high percentage of them, what they have done brought them to where they are. It would take a change of motivation for them to change their existing bias towards command and control. I find this particularly true of finance trained executives. They wear, for the most part, huge blinders. I used to be frustrated by this resistance, at least enough to research why. In Lean Thinking terms, I want to know the root cause for resistance to change. In my experience, once non-executive employees experience Lean Thinking, they become converts only if the change is heavily supported by the Executive Team.

My query led to this article[1] and its predecessor[2] about the operation of confirmation bias and its effect on how we assimilate new evidence that either confirms or disconfirms our existing operating theory. Existing theory typically comes to us from tradition (we learn it on the job); faith (we believe it because of other people’s belief who we trust); or propaganda (we did it this way and it worked for us, so it will work for you). Ignorance about Lean Thinking is propagated by a lack of knowledge about Lean Thinking (Ignorance) and special interest groups who want to create confusion or ignorance. Executives often exhibit both. They fail to understand the full importance of Lean Thinking, or it fails to serve their personal interests.

Excuses that Lean won’t work are everywhere, and every lean leader has heard lots of them. We are not an automobile company (reference to Toyota’s development of the system); we are different (from what?) I am not going to practice cookie cutter medicine; our leadership won’t accept it. What Lord’s paper describes is a process where any evidence is accepted as either confirmatory or non-confirmatory depending on our beliefs. It doesn’t matter what the evidence shows. Our brain interprets it to support our position, and we are strengthened in our opposition. We are biased against assimilation of evidence that doesn’t support our existing beliefs.

And there are consultants providing an array of services that profit from ignorance. So, they add to the confusion by spreading their message. One I recall had to do with writing thank you notes to employees and system partners. I visited with 2 executives from this organization, and immediately received hand written notes thanking me for meeting with them. Never mind that my concerns were never addressed. I still got the notes. And it’s no longer the practice at this organization. But because it was taught to them by the former CEO of a Baldrige Award winning organization, they accepted it for a period.

The second paper discusses a possible solution to confirmation biases. It is called “consider the opposite.” Strangely enough, it doesn’t ask you to accept the evidence. It only encourages you to ask yourself, at each step, whether you would have come to your conclusion if the results of the evidence had been the opposite of what it was. While I am still looking at research, this approach seems promising.

The other approach requires a change in motivation, as in your business is failing and you need to do something. This approach didn’t work for the board I was serving on until last June. Despite millions of dollars in business operations, the approach didn’t change. The approach was kept, but the message was refined “we know how to do it better now.” We just need to buy more profitable businesses. And the leadership group bought into that message, and excluded any real consideration of making existing businesses better through Lean Thinking.

This Consider the Opposite approach looks like it might lead to strategies that overcome what one writer has referred to as “the natural human shortsightedness to alternatives.” I sure hope so. I got sick and tired of seeing opportunity wasted and money lost.

[1] Lord, C. G., Lepper, M. R., & Preston, E. (1984). Considering the opposite: A corrective strategy for social judgment. Journal of Personality and Social Psychology, 47, 1231-1243.

[2] Lord, C. G., Ross, L., & Lepper, M. R. (1979). Biased assimilation and attitude polarization: The effects of prior theories on subsequently considered evidence. Journal of Personality and Social Psychology, 37, 2098-2109.

Posted by: knightbird | January 29, 2017

Calculating Savings in Lean

I do not advocate entering a Lean Cultural Transformation for the sole purpose of cost savings. It’s a very narrow mindset and fails to consider how to engage employees in the transformation. In fact, with the backlog and outsourcing most organizations have, there is a better method to consider transforming your organization without a reduce cost mindset. Savings will come, but a true Lean Sensei must know how to recognize actual cost reduction opportunities and redeployment of assets into different uses, which does include if necessary a reduction in workforce. Here is how I advise organizations to consider capturing Lean savings.

Adopt a hierarchy for redeployment of staff when time freed up is emphasized.

  1. Assign to reduce the backlog of work.
  2. Bring outsourced work back in house (create positions if necessary)
  3. Assign to improvement events, eventually moving to facilitation of events held within work area.

-Kaizen

-5 S

-More experienced assigned to Lean Government Department

-Perhaps loaned to partners to help assist their efforts

  1. Redeploy to other positions.
  2. Reduce through attrition (replace 1 of every 2 to 4 departures.
  3. Reduction in Force only if required for business survival

In looking at this recommendation, there are 4 categories of possible savings.

Captured savings –reduces current spending by a calculated dollar amount

Capacity increase – allow more word to occur with same resources

One time savings – one time reduction of future spending

Future cost avoidance – Planned investment is no longer needed because of Lean

Here is an example where all 4 savings can be observed. I have a number of assumptions in table format.

Assume work day = 8 hours x 60 minutes or 480 minutes a day

Assume 440 average daily transactions

Takt Time = 1.1 transactions finished per minute

Assume variable cycle times

5 minutes = 2,400 minutes’ daily

10 minutes = 4,800 minutes’ daily

15 minutes = 6,720 minutes’ daily

Employee’s required per cycle time

5 minutes = 5 employees processing 440 transactions (best future state)

10 minutes = 10 employees processing 440 transactions (best intermediary state)

15 minutes = 15 employees processing 440 transaction (current state)

By reducing cycle time to 5 minutes per transaction, we reduce employee requirements by 10, for a $400,000 cost reduction. We might keep one employee additionally for a 15% buffer to cover for absentees and improvement work.

The next step is to look at the potential for Consolidation and elimination of accounting records. Elimination can come from implementation of a Just in Time program and the reduction in inventory and necessity for accounting records. It can also come from consolidation of procurement into a few suppliers. The net effect is to reduce the number of accounting records that must be processed.

I have only covered direct savings, and not affiliated savings. We will need less space, fewer computers and IT support, less copier and printer time, fewer records stored and accounted for and less procurement process requirements. And when defects go down, quality goes up and there will be fewer inquiries from customers and time spend on customer service. Excess production will be curtailed.

A good Lean Sensei will know, going in, what is achievable, and will drive the team to dream big. No use setting little goals when a big one is possible.

Posted by: knightbird | January 27, 2017

A Day Late and a Dollar Short

Economies are moving targets with lots of places where the income a business earns is siphoned off, I contend without necessity. In the world of Lean Management, accumulations of waste from all organization engaged in regulating and supporting businesses really cost us when we think about diversifying our economy. Let’s look at where this waste exists.

When a business starts up, it has licenses and permits to secure, sometimes from multiple sources. You need a federal Employer Identification Number, a State Business License, professional licenses for some businesses and various municipal permits, depending on the business. And you end up going to multiple locations to secure the permits. If you use a building in the business, there are a variety of regulations to implement, and if you serve the public directly, food safety laws and regulations. Inspections are conducted when you remodel a space to fit your use. And because we live in Alaska, every one of the requirements we have are inefficiently delivered. They cost a lot more than they should, and the collective impact on our economy is substantial. Why do I say this? It’s because not even one of our public institutions is managed well. Not one uses Lean Government as their philosophy of management. The result is we pay more for the service than we should, and generally spend a lot more time fulfilling the requirements than we should have to.

Then we are taxed locally, and substantially. We don’t have a sales tax, but the Municipality of Anchorage does collect real estate taxes. A lot of the tax goes to support our schools. Guess what? No schools in Alaska use Lean Education as their philosophy of management. And without a Lean management approach, we pay more for less instruction. In one school district I read about, each teacher had 104 non-productive instructional hours from interruptions. If the same fact is true in the Anchorage School District, we have over 300,000 hours of non-productive time we could recover and dedicate to instruction.

The state of Alaska is responsible for a lot of our services, which are provided extremely inefficiently. How do I know this? In 2009, our Division of Public Administration improved its process for reviewing applications from approximately 22-23 a day to over 120 a day, with fewer resources required. The used one of the tools of Lean Management, then stopped innovating. The last time I read about their Lean Program, they were seeking a contractor, for up to $800,000, to help them fix a computer system and process 50,000 backlogged applications. We seek one offs, a project to solve a problem, but not a long-term management culture to continuously solve problems.

Then we pay for health care and other benefits. Our health care providers do not use Lean Healthcare as a philosophy of management in Alaska. Providence has a program, but you don’t read much about it. And it’s not just the cost of healthcare that become a substantial burden on businesses, it’s the impact of why we see a health care provider—lost time, illness and medical supplies and equipment. We pay a lot because our supply chains and logistic support networks do not use Lean Transportation for their management philosophy (except for Alaska Airlines).

And our living expenses are higher than they need to be. Our contractors do not use Lean Construction as their philosophy of management, and we pay more for housing for a lot of reasons. They need municipal permits that cost more to secure than they should. They schedule a project with huge amounts of dead time. Their supplies are more expensive because of the supply chain. The use more employees than they need to and that drives up the cost.

And we spend incredible amounts on our communication requirements. Why, because our telecommunication companies do not use Lean as their philosophy of management. You can buy a Samsung 55-Inch 4K Ultra HD Smart LED TV cheaper than you can buy a smartphone (ACS does use Lean Tools in its management system, but I am not sure how effective they are).

And large businesses end up hiring professionals in law, accounting, and a plethora of business services. Very few law firms use Lean management as their philosophy and I am not aware of no accounting firms do (Davis Wright Tremaine is an early adopter in Alaska).

So, add it all up. How much waste exists in a business before it accounts for its operations. And that itself involves huge waste. Individual businesses can capture incredible efficiencies through adopting Lean as its philosophy of management, perhaps saving as much as 50% of its total cost of doing business. You are critical of that statement. I understand. Despite cost increases for the automobile industry, you can buy a car cheaper today than you could in 1969. A VW Beetle sold for $1,999 ($13,200 inflation adjusted for 2016) then, and a Nissan Versa sold for under $13,000 in 2016. You might say that the difference isn’t that much. Think about it. The 1969 VW didn’t have seat belt, much less air bags. Health Insurance was a very small part of the cost in 1969. It’s considerable today. Emission controls, electronic systems, and much more are provided in today’s vehicles.

If we want a vibrant Alaskan economy, we need to discuss the proliferation of Lean thinking for our statewide philosophy of management. We are wasting huge sums of money everywhere, and our businesses pay for it. This makes their goods and services more expensive, and less competitive than other states and countries. That may not be what makes our business noncompetitive in the world market, but internal use of Lean could fix that. But if we wait to adopt Lean management philosophies, like the U.S. auto industry did, we will lose as other states catch up.

Very few people will understand why I write this. I know because I have tried to show this path to anyone who would listen, starting in 2005. Well educated and accomplished people have failed to comprehend the tremendous benefit waiting for us. And when I talk about how poorly we are doing, people take offense, despite the facts I bring to this discussion.

Why do most of our journalists do such a shallow job of discussing and debating issues like our economy? Why do many politicians focus on cutting budgets instead of enhancing performance? Why do businesses pay the increased cost of health care instead of doing something about it? Why do they hire 25% to 50% more employees than they need? I wish I knew.

Posted by: knightbird | January 21, 2017

Growth Mindset is a Lean Strategy

Dr. Carol Dweck is a researcher whose book, “Mindset: The New Psychology of Success,” identified success factors for students. A growth mindset is one where you are willing to try and experience failure, then try again to get better. Angela Duckworth writes about this growth mindset in her book, “Grit: Perseverance and Passion for Long-Term Goals.” Brain research is confirming the Toyota Production System culture of employee engagement in continuous improvement. Here is a quote about Mindset from an interview given by Dr. Dweck.

“Hiring is obviously crucial – looking less at pedigree than potential, passion for learning, and ability to collaborate. This often means hiring from within. Mentoring and support are also important – putting considerable resources into helping employees grow and develop.”

Toyota hires from within for management positions. And every day is about teaching and learning. Employees collaborate on improvements, writing and revising standard work and addressing problems when they occur, not putting them off. When Toyota was opening its Georgetown Plant in Kentucky, recruiting for manufacturing workers involved a period of training that included physical development. After all, working on a line is demanding, and if you are out of shape, can contribute to injuries. I know, I just shoveled about a foot of snow from my rather long driveway. I have been walking about 2 miles a night, but that does little for the other shoveling muscles.

A growth mindset can be introduced into a business, but I am reminded by an interview given by Dr. W. Edwards Deming in 1982 that management must buy in before change happens. If management is buying into Talent Management instead, then I am disappointed.

I think Talent Management is bottom line thinking, and that Lean Thinking is about people. There is so much more we can do for our employees that I am ashamed when our leadership continues with bottom line thinking and slogans. One strategy a management team I was associated with was “Triple Bottom Line.” While I applaud the goals of a Triple Bottom Line, it is still an accounting function. It just accounts for social and environmental costs along with financial. Toyota covers the same ground in its Respect for People Pillar.

In the past few years, as I have grown in Lean through my studies, I have seen that Toyota leadership has embraced the correct values. As I have grown, I find a greater distance between me and the organizations I have participated in. Humble Inquiry (Edgar Schein); Positive Optimism (Martin Seligman); Mindfulness in the workplace (David Gelles); Grit and perseverance (Angela Duckworth); and a hots of people centered theories have all led me to change my perspective.

Slogans don’t work. We need to live the values that Lean embodies, a culture of respect and improvement. What I am seeing through the eyes of the authors I mentioned is a recognition that the values of Lean Thinking are being validated. I only hope it doesn’t take a lifetime to integrate them into our businesses and organizations. Most of them are run by “Fixed Mindset” leaders. Let the conversation start.

 

 

Posted by: knightbird | January 20, 2017

One Lean Value for Education

First a disclaimer. I am laying out a value analysis based on information from 2 school districts, the one I live in, and another one where a Lean analysis was done on interruptions faced by teachers during an average year. The interruption averaged 116.1 hours annually per teacher and 104 hours are deemed recoverable (avoidable). I am assuming teachers have 195-day contracts with 5 in service days and work 1,265 hours during that 195-day contract at a salary of $60,000. The math goes like this for 3,000 teachers, an estimate for my district.

104 recoverable hours for 3000 teachers equals 312,000 hours. $60,000 for an annual salary works out to $47.23 per hour. 312,000 hours has a value of $14.8 million. That’s the equivalent of 246 teacher years.

When you hire teachers to deliver a curriculum, interruptions are considered waste. During the 104 hours that are recoverable, students as customers are not receiving any value for that 312,000 hours. Taxpayers are losing that value as well.

Is recovery of $$14.8 million in value possible? Absolutely (again, these are assumptions). Will it reduce the cost to the school district? Probably not. Will value be created. Most likely.

Posted by: knightbird | January 20, 2017

Complicating Your Way to Job Security

A local institution has started to implement Lean as a budget cutting measure, and training its’ volunteers in Six Sigma. I predict this effort to be among the 70% of change management efforts that Michael Porter says fails. Why do they fail? Well, I got a clue from a 1982 interview that Dr. Deming gave. Although the general message in the interview was that our first step was to educate management, he also spoke about handing off, or delegating, Lean to someone else. He also pointed out that anyone who gained just a fuzzy understanding of variation could start the transformation. This made a lot of sense, and what I see is that a command and control leader will always hand off any change management initiative because it insulates them from accountability. They have responsibility, but if the effort fails, there are ready victims to blame.

The only way for someone who has this responsibility delegated to them (without becoming proficient in the area being changed) is to complicate implementation. If you don’t understand what is going on, you can tell your boss that you followed the best advice available, and that advice was to find a Black Belt to tell you what to do, and then train green belts to tell your employees what to do. You put together a complicated structure of DMAIC with long lead times, a limited number of improvement events and minimal reliance on the employees. Then when the initiative fails, and Dr. Deming says that it will fail and have no signs of existence within 3 years, you have cover. Employees didn’t buy in and they sabotaged the effort. We spend too much money on training green belts before they left for higher paying jobs elsewhere. We did projects, but the employees reverted to what they did before. Lean Six Sigma won’t work here and I tried by best.

We tend to be protective of our jobs and income, and that protection will drive employee behavior. Becoming an expert at workarounds, that is, how do get something done when you encounter obstacles, is a job protection skill. Learning to say only positive things and to blame others anonymously, is another protective skill. And to avoid bringing up problems is one of the biggest protective skills.

I heard this story from a newly minted Airframe and Power Plant Mechanic (A&P) a long time ago. When he showed up the old timers recommended he busy his tools from the Craftsman collection at Sears. He did. Then he bought an engraver and started putting his name on all his tools. An old timer stopped him to ask what he was doing. He told him and was admonished. Do you know why we all own Craftsman tools? If you leave a tool on an airplane, and that plane crashes later, who do you think they are going to look for? You can guarantee that it will be the A&P whose name is on the tool.  That’s why we all have the same tools and don’t identify them as ours.

Command and Control bosses look for the name on the tool, and if we can avoid as much as possible identifying any defects with our association, we do that. We don’t raise problems. We meet the numbers, even if it means not to do the right thing. Dr. Deming tells a story about a supervisor who would not stop a line for 20 minutes to repair a tool because it would force him to miss the numbers. The machine broke the same day and shut the line down for days.

If an Executive will not put their name on an initiative, and assume responsibility and accountability, we cannot expect employees to believe in the initiative. Instead, we will complicate the initiative, and Six Sigma is a good way to do that, so it’s not successful and we have something to blame.

Every initiative I have seen in Alaska with a Six Sigma component has failed (after costing a lot of money). Lean is simple, and should be kept simple, for the employees. We examine a process, talk about how to make it better, run experiments to see if what we believe will make it better works, and if it works, we implement the new process with standard work. And we teach employees how to recognize problems and fix them at their level. You don’t have to wait for authority from up on high.

So, Six Sigma has infiltrated this one organization, and another organization is ready to follow suit. I feel bad for each of them, and for me, because Lean will get a bad name. Someone will say we tried Lean, and leave out the Six Sigma. Complicated the introduction, watch it fail, and lay blame somewhere it can’t hurt you personally. And if you are an employee, duck and avoid. Don’t engage and don’t get excited. Someone further up the ladder will come back to hurt you if you engage.

Posted by: knightbird | January 14, 2017

How to Survive Rejection Slips

 

My philosophy of life since 2008 is this: “I want to use Lean Management and Prevention/Healing From Childhood Acquired Trauma (Adverse Childhood Experiences or ACE’s) to help children and adults learn to thrive.”

Lean Management is the most effective method for delivering the high-quality services needed to help individuals to recover from the negative impact of ACE’s on their lives. And my research tells me that ACE’s are the major reason in our country for poor health, a shorter life and great unhappiness. Combining the two can be a pathway to a better world.

I have found that being a Lean Consultant in Alaska requires incredible persistence. I can’t tell you how many CEO’s, Presidents, managers and others I have tried to interest in Lean Management. Another colleague of mine write to many corporations about doing an assessment and seeing what could be done for their organization. Results: zero interest.

If a CEO and board buy in to Lean completely, we can reduce their costs by about 25% and improve the quality of their work substantially. There is a long learning curve for implementing lean correctly. And most CEO’s don’t have a reason for being curious enough to investigate the proper way to implement Lean. Without a CEO on board, the prospects for success are slim. I spoke to one CEO who referred me to their COO and CFO. I knew right away that I was traveling a dead-end road. Very few CFO’s understand Lean. And most COO’s don’t want to be told that their methods aren’t working as well and other methods.

Adopting Lean Government is also a pathway to providing the supportive services needed by many trauma victims. Because of perennial budget issues, efficient and high quality services are necessary.

If you can interest a company of government in Lean, protective instincts assert themselves. After all, you are where you are because of what you have done. It’s hard to learn a new way of doing things with it requires a long-term commitment, extensive training and trusting your employees to do the right thing, all under the leadership of experienced Sensei’s.

Finally, most CEO’s would benefit by thinking more aggressively. Why do I say that cost reductions of 25% can be achieved in a company that hasn’t used Lean methods before. Because that is the common experience. We can increase productivity by looking at the entire organization, not just manufacturing, or troublesome spots. We can get significant gains when we understand where the trouble spots are, and then working downstream from there. We want to find the major process(es), start there and work our way back through supporting processes. Most CEO’s have a troublesome area they want to address, and aren’t willing to listen to advice.

So even if you interest a client, your path to success is difficult. I am one of a fortunate few that had a board, executive team (for the most part) and staff that bought into a transformation long term. For now, rejection is a way of life, despite having knowledge that could literally transform workplaces. I would love to find an organization hungry enough for meeting a mission and willing to try Lean.

In my view, the benefits to society are worth the rejection. Finding a hungry, innovative and forward thinking organization will be worth it.

In the meantime, I take comfort from a story I read about cartoonists, who have a rejection rate of about 96% of their submissions. They draw multiple cartoons every week and submit to multiple potential clients, and have very limited success. Apparently, a 10% success rate means you are wildly successful. Another success is worth the wait. It’s only been 6 years of looking, So I don’t think my rejection rate is too low yet.

Posted by: knightbird | January 11, 2017

Are Statistics Necessary for making Lean Improvements

 

As a Lean Strategic thinker, I am not a fan of Six Sigma. While researching use of control charts for analysis of increases or declines in annual suicide rates over time, I ran into a lot of Six Sigma discussion. I have three observations I usually make, and I am sure there are more.

I am not a great statistician by any means. I struggle with any concept other than the basics. Becoming a belt requires some statistical training, and that limits the number of employees who can become process and quality leaders. When someone has the credential, the are no longer a part of the team, but become a supervisor. The Belt applies DMAIC in their projects and because of its complexity, are deferred to in the improvement process. Building a team, and teaching them the principles of Lean, are key to any Lean cultural implementation. By anointing Belts, the learning process is not shared equally, and the culture does not spread effectively. Lean is simple in my mind, see a problem, fix the problem. Use any means necessary, and to it now.

Most Six Sigma projects I learn about take time. My colleague at a federal agency told me that their Belt quota annually was 2 projects completed. Kaizen is slow, evolutionary change. Kaikaku is radical change, and generally attempted by Sensei’s guiding employees. When Sensei Nakai began working with Porsche in the early 1990’s, he did Kaikaku. He basically ordered change, and the team moved quickly. You can do that when you just lost $150 million. To practice Kaikaku eliminates the need for Six Sigma. Changing a process in manufacturing is easy and a Sensei can see the waste without the need for statistical analysis. When you have achieved a high level of Lean, then you can incorporate statistical measures into your processes for an early warning system. If you have a machine that must meet fine tolerances, it pays off to measure a small output of the product and construct a control chart. When the chart shows a series of downward measures of tolerance, it is a sign that the machine is wearing, and will need maintenance to return it to tighter tolerance. The measures and control chart can be set up by a statistician and employees taught how to maintain the measurement system and input the data for computation.

When you start implementing Lean, the correct way, you want to do it through Kaizen. It’s a teaching tool. When you run 3 concurrent Kaizen, as one of my organizations did, you maximize the value of a Sensei by bringing the teams together to develop a problem statement, create an A-3, map a value stream, walk the Gemba, gather data, and perform the many other tasks that contribute to a successful Kaizen. The teams separate to work on their own problem statement. I was never concerned, after I learned the power of Lean, about the results coming out of a Kaizen conducted by a Sensei. They happen and are far more successful than you ever imagined. And that creates one problem. Command and control leaders who have resisted are shamed by the extent of improvement achieved. The goal is not to improve the process It is to engage and educate your employees about continuous improvement. A well-managed first pass at a Lean event with any problem statement involving a process is always successful.

Very few Lean conversions are truly successful. Because my son lives in Independence, OR, I read the recruitment notices for Lean Managers and found one manufacturing company seeking a Lean Manufacturing manager. I applied for it in the hopes that I might be interviewed, without any expectation of meeting the qualification hurdles of 10 years in a manufacturing environment. The company has a great video of their production process on their website and I looked at it as a Sensei. I could see some areas where actual flow would be improved. However, most manufacturing processes are already efficient. Decades of copycat thinking (derivative) means that changes are forced on employees and they remain static until the next copycat change is found. The real benefits remain waiting to be discovered in all the other related processes, from Just in Time implementation to hiring, training, accounting, procurement, records management, safety and a host of other affiliated processes.

A good Sensei can educate the CEO and show them the benefits of a Lean Implementation done correctly. They can help mid-level managers understand how to achieve outstanding results with fewer resources. And they can energize and excite employees by training, coaching and mentoring. Outside of Kaikaku, a Sensei truly want the team to discover problems and solve them. And if they are not all solved at once, so what. We can’t have continuous improvement if we can achieve every improvement at one.

Implementing Lean isn’t expensive, and the payoff is rapid if you know what you are looking for. If you can figure out how to do the same amount of work with 50% fewer employees (a realistic target in my experience) you have huge savings, in salary, benefits, space along with tremendous productivity increases. And a good Sensei can conduct one event a week, and mentor hundreds of improvement events in a year. With Belts, it takes a huge training investment and certification by an organization that you meet the requirements for the level of Belt you are trying to earn. After the substantial investment, a Belt is marketable, and you generally must pay a Belt more after the certification, or they can move to a better paying job elsewhere.

Higher level statistics aren’t necessary for starting with Lean. There is no substitute for starting at whatever your skill level is. Dive in. Bring in a Coach or Teacher. If you are in distress and not sure whether you will survive, then by all means conduct Kaikaku. It’s like surgery conducted by an expert. But otherwise, practice prevention for bad stuff that happens to organizations by starting Lean.

 

Posted by: knightbird | January 9, 2017

Business is Hard Work

Improving a business is hard work. Sometimes we are happy where we are and don’t want to get better. Or maybe we cannot find a way to get better. As I sit and write this, I am looking at the former location for Border’s Books in Anchorage. About 200 yards away you can still see the sign for Sports Authority, a failed sporting goods retailer. A half mile down the road, a number of stores occupy the former CompUSA outlet. Schlotsky’s Deli occupies a building that used to house one of 2 Popeye’s franchises in Anchorage. And a recently burned down building on Dimond Boulevard at one time held a Skippers Restaurant. Businesses large and small fail on a regular basis. Why?

Angel Duckworth is an amazing intellect. As a scholar, she has been researching a quality she refers to as “Grit,” which is the title of her bestselling book. In her Ted Talk, a very brief talk filled with wisdom, she defined Grit as including “stamina,” “Sticking to your future,” and “working hard.” She said to life life like it’s a marathon.

In her book, among many other pearls of wisdom, she quotes William James from his paper titled “Energies of Men.”

“Compared with where we ought to be, we are only half awake.”

William James (1907)

In a Lean world, I feel this is also true. I am not innately gifted. But I understand hard work. Culturally, I was exposed to hard work as a blue collar concept. But I was not introduced to the same concept as an intellectual pursuit. I did not realize that hard work leads to achievement through study and time spent on task. I was introduced to the concept of 10,000 hours of effort as a requirement to become world class in an area of interest. Malcom Gladwell popularized Dr. Anders Ericsson’s research in his book, “The Tipping Point.” I read other books that expanded on the theory and bought into it gradually. I have 3 passions (other than my 3 children, who have always come first in my life after their births). They include coaching pitchers, Lean Management and restoring health after childhood trauma. I have spent thousands of hours asking questions and reading, writing and researching each topic. And I feel like I am only scratching the surface.

Lean Management became a passion when I realized that addressing issues of childhood trauma could only be achieved if we had resources available to fund programs. And with most organizations I encounter, they are generally on the brink of failure. Finding a pathway to success meant freeing up valuable resources that could be reallocated to restoring health lives.

My early experiences with business were with leaders raised in a command and control environment. I remember working in a process one time, set up by the CEO, and having difficulty making it work. I was basically told to get the task done or it was my job. The CEO had set up a difficult task and make me responsible for it, without any input into the process. I felt like a robot hired to follow orders. At the same time, there was incredible favoritism shown to other employees in the organization. It was not the kind of workplace I wanted to work in and predictably, I didn’t stay very long.

I learned early on that hard work doesn’t necessarily earn you credit for that work. In a one day job while during summer break from college, I was drilling a wire through a 2 inch plank to seal the end from splitting. The after I drilled though 12 inches of wood, I used pliers and a hammer to bend the wire and embed it into the wood. The planks were used in scaffolding. I was shown how to do the job and left alone. I made good progress. Before starting the day, I was told we were 3 days behind schedule for a project. By the end of the day, we were almost caught up. I recall standing up from the drilling work for a breather, and having the foreman ask what I was doing. When I told him, he ordered me back to drilling. He was standing and talking non business to another employee he appeared friendly with. Another hard lesson learned. Despite my productivity, I was not invited back.

A workplace is very complex. In larger workplaces, the top executives rarely visited where the work was done, and if they did, they were treated like royalty. None of the bosses I have worked for or with have much insight into how to improve the work they are responsible for. They are Derivative Thinkers, and I see the results. In our healthcare system, I have seen CEO’s buy into Baldrige, Balanced Scorecard, Six Sigma, Studer and a host of consultant led improvement. I have been interested in seeing the state of Alaska hold onto services during budget cutting through Lean Management, and again, see a lot of Derivative Thinking. Even adopting of Lean can be a Derivative Thinking event.

What I am learning from Dr. Duckworth is that we seldom become all we can. As William James stated over a century ago, we underperform as humans. We don’t wake up to the possibilities. Dr. Duckworth mentioned the work done by Dr. Carol Dweck at UCLA on mindset. Our ability to learn is not fixed, and if we pursue learning with stamina and determination, we will grow. What can limit our growth is a mindset established by being labeled talented, or superior, or smart. Then, according to Dr. Dweck’s research, we con’t challenge ourselves enough. Basically, we don’t allow ourselves to fail and learn from the failures.

In Alaska, I have encountered huge barriers to adoption of Lean done the right way. And just what is the right way? I believe the right way is as a culture inn which every employee is motivated to be wide awake, taught the skills of continuous improvement and let loose to get better, over time, with persistence and stamina. Employee mindset is critical to improvement, and most CEO’s don’t get it.

I have been looking at the possible existence of 2 pathways CEO’s follow. The first is creating true value through introduction of a Lean Management culture, or Innovative Thinking, requiring substantial study, hands on learning and direct observation. The second is a political approach, that is, keeping interested groups happy. CEO’s cater to boards of directors and foster friendships. This type of interaction makes it more difficult to hold the CEO accountable, and in many cases blinds you to defects. If there are, most CEO’s have ready explanations for less than good results. The economy is bad. We can’t hire the right employees. Our competitors are cheating. We need more capital resources. We don’t have enough employees. Our previous management team is to blame because they acquired the wrong businesses. It’s the fault of one of our employees and their team. The list is endless. Politics mean fostering relationships and keeping those who control your future happy, even it if means destroying value in the organization. That’s how I felt as an employee in the two organizations I mentioned in this post. Huge value was lost in both organizations, without consequence because of political relationships.

I have come to a belief that we create value by giving voice to employees working within an organization, while training and coaching them continuously on how to improve what we do. Taiichi Ohno understood the psychology of improvement. In Workplace Management, his book on the lessons he learned in his career, the following quote strikes me as most relevant.

“Why not make the work easier and more interesting so that people do not have to sweat?

The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity. People don’t go to Toyota to ‘work’ they go there to ‘think.’”

We can guide our employees to the hard path of continuous improvement by welcoming them to participate in guiding the work. We have no right to tell them what to do as CEO’s, but we can establish a culture that lets them make their work easier and more interesting. We can teach them to use their brain to be innovative. Show them the direction to go and let them loose, with data, tools for their use, and motivation for getting better.

One more Ohno story before I end. Here is a [LINK] to the story.

“Give Everyone a Hard Time

Wakamatsu shared the following story of Taiichi Ohno in 1965 regarding the Toyota Corolla:

“Produce 5000 engines with less than 100 workers, ” Ohno ordered.

The production manager reported back to Ohno a few months later and said, “We are now able to produce 5000 engines with only 80 workers.

But the sale of the Corolla continued to rise requiring production to be increased. To this fact, Taiichi Ohno asked a question:

How many workers are needed to produce 10,000 engines?

The production manager responded quickly and said:

160 workers would be sufficient.

Wakamatsu then shared this response from Taiichi Ohno:

This answer infuriated Taiichi Ohno. “I learned how to figure out 8 x 2 = 16 in elementary school. I had never thought I would learn that again from you when I am this old. Do not treat me like a fool”

Ohno then added,

You are so accustomed to a notion that any form of increase in sales, labor, and equipment is considered favorable. But, how do you ensure that our profit keeps on increasing? That is the most critical factor.

According to Wakamatsu, Taiichi Ohno called the above logic “Management by Ninja Art“, in other words, even though demand increases, use your creativity to do more with much less and not rely on basic management arithmetic to solve the problem.”

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