Posted by: knightbird | August 29, 2016

Lean Law Firms

With my son attending college and living in Oregon, I was curious about whether Oregon was engaged in Lean implementation. Much to my surprise, a law firm that started in Seattle, is present here in Alaska, and is also present in Portland, OR, was advertising for a Lean Management staff person. From what I can see, an attorney at DWT with experience in process management legal services learned Lean and was eventually moved to a position described as a Legal Process Strategist. So this effort has been in place for almost 2 and a half years. I decided to see where other firms might be in terms of implementation, and found an early adopter in the Seyfarth Shaw law firm in Chicago. Through their Seyfarth Consulting, they provide lean consulting services to the legal industry. Seyfarth Shaw claims that they have cut as much as 50% off of their fees to at least one client. [http://www.abajournal.com/news/article/seyfarth_shaw_says_six_sigma_has_cut_client_fees_by_up_to_50_percent/] Imagine that. Productivity levels similar to that seen in other applications of lean in other industries.

I now expect Lean to start forging inroads to the Judiciary, District Attorney, Attorney’s General and other public legal entities. What a wonderful development. But what it says to me is, why are others still waiting to implement the system?

Posted by: knightbird | August 10, 2016

Giant Bicycles and Lean Management

My son in law builds mountain bike trains and rides them on Giant Bicycles. So this curious mind wanted to know a bit more about the company, specifically whether they used the principles of Lean Manufacturing.

Giant bicycles are made in Taiwan, a tiny island country with a population of 23 million in an area of less than 14,000 square miles. That makes is just larger than the state of Maryland, and Taiwan pales in comparison to Alaska’s 266,000 square miles. Started in 1972, Giant is the world’s largest manufacturer of bicycles. A former largest bicycle manufacturer and the bicycle of my youth, Schwinn, declared bankruptcy in 1992. Bicycle design went through incredible periods of innovation, sport adaptation and market differentiation. Schwinn did not adapt.

The low end of a market is always susceptible to cheap knockoffs from emerging economies. However, as my son in law, an avid mountain biker told me, quality and reliability are very important to mountain bikers, and there is a market for people willing to pay for high end bicycles. I wasn’t aware that high end mountain bicycles can cost more than $10,000. Giant participates in this market.

Taiwanese bicycle manufacturers recognized in the late 1990’s and early 2000’s that they faced intense competition from low cost manufacturers like China. Their industry formed an alliance referred to as the A Team and in 2003, the A Team brought the Toyota Production System to Taiwan. At the time this article was written in 2008 [LINK HERE], one alliance member had effectively “lowered our parts inventory by 15 percent, reduced lead time by 60 percent and raised productivity by 25 percent since our implementation of TPS/TQM/TPM in 2003,…”

Today, Giant has about $2 billion in sales annually. [LINK HERE] 2002 revenue was approximately $445 million. Revenue increased by 350% for Giant since implementation of lean management systems. And it is still being used at Giant, but I could find nothing to indicate that they had transferred their lean culture to other non manufacturing areas such as finance, human resources, document management or other administrative and development areas.

Posted by: knightbird | March 7, 2016

Denial: It’s The Human Brain’s Normal Condition

As many of you who read my posts know, I have been advocating for Lean Management in Alaska, in its many iterations, since 2005. At my first CEO position, I learned about and started to implement the system in 2004, and had great results. Because I had already learned how our brain resists negative information, I was skeptical about even our reported results and implemented a system of factual reporting. We fostered a culture of “Problems are Treasures” and created a “Treasure Chest” for parking improvement projects. And there were a lot of them, as I have reported on extensively through the years.

After 8 years of Lean implementation, I was still learning about measuring improvements but left the organization before having a chance to fully experiment with true lean workplace management.  By then, we had an extensive portfolio of successes. I have subsequently had plenty of time to think about resistance to Lean as I have successively pitched the system to private businesses, Native Corporations, Health Care, School Districts, Municipalities and the State of Alaska. It’s a very hard sell, and for personal solace and comfort (I wanted to know why I was such a poor salesperson), I followed a path of research into the workings of the human brain.

Lean was not the sole reason for this research. My other passion is health care, and in health care there is also heavy resistance to change.

Here is what I believe we are so resistant to change. There are 2 primary prongs of resistance. The first is by those who have successfully “gamed” the existing system. This includes most executives. I am not using gaming in a negative sense, but as a category of individuals who figure out the existing system and become proficient at using it. In the Virginia Mason culture, they used to call these individuals “Capes.” You know, “Here I come to save the day.” (from the Mighty Mouse cartoons) The other category are the preservationists. They like the status quo. Change upsets them, and they resist it covertly while attempting to appear to comply with change efforts. An they have become good at it. They know that all they need to do is outlast their boss and the bosses above for enough time and they can go back to what they used to do. I had one executive like this who cooperated externally but resisted internally. After terminating this executive, I discovered extensive research on their computer looking for dirt to throw at me, things like Alaska Bar Association discipline proceedings, Alaska Court System filings—whatever could be used for political ammunition. The same process was followed by a local group at my second position as a CEO.

Our whole lives are spent accumulating knowledge, most of the time the wrong kind. There is a lot of “Conventional Wisdom” in the workplace. But as my pitching Sensei told me of Conventional Wisdom over a decade ago, it is neither “conventional” nor is it “wisdom.” They are stories, tales and fabrications that support our world view of personal competence. A lot of what we know is what we have been told or taught by people we trust. If we accept what they are telling us, we don’t need to spend a lot of time researching and learning. And the human condition, being about survival, tends to act cautiously by only listening to those we trust, and to pass survival information down from generation to generation through this mechanism of trust. Many of our institutions put people in positions of trust regardless of their abilities. They are called Politicians—individuals without solid business management skills, but great political survival skills. I often hear this referred to as

The brain itself has many mechanisms designed to facilitate our survival. Those mechanisms permeate workplaces both as habit and organizational routine. We do things because that’s the way they have always been done. And bad leaders perpetuate the culture of no change or slow change.

After researching the ability of our brain to reject truthful information in order to realize the meaning that we have given to our circumstances (something I often refer to as “Culture”), I see the wisdom for spending time with all of our staff, observing behaviors, discussing how work is accomplished, coaching, teaching and mentoring. It’s our job as a CEO to overcome the denial, and the first step is the dissemination of factual knowledge about Lean Management.

But in order to serve them effectively, I now believe we need to do 2 things: (1) overcome their denial, scientifically; and (2) allow them to put together a management pathway with hope as a major driver. It appears that the absence of hope is one reason we enter into denial. What I am researching is the potential for substituting a healing hope for the type of hope that leads to denial. I refer to it as “Change Management.”

Introducing new knowledge the right way can have a powerful impact on your brain and its ability to accept a path to changing. Denial is the enemy. Why do we so forcefully deny data and newly accepted knowledge, like Dr. Deming 14 Points and the Toyota Production System? There are a variety of reasons that I will discuss today.

Denial has been researched extensively. For example, the Dunning Kruger Effect (DKE) is a “Cognitive Bias” through “which relatively unskilled persons suffer illusory superiority, mistakenly assessing their ability to be much higher than it really is.” [WIKIPEDIA LINK] Dunning and Kruger wrote “The miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.” [LINK HERE] In a nutshell, we believe we are better than we really are. That’s why, when you go through a performance evaluation at work, you are oftentimes shocked. You believe you are above average. Some who are in fact highly competent underestimate their abilities because they overestimate the ability of others. They incorrectly assume that everyone else they compete with have the same or better competencies that they do.

Once we have a confirmation bias, we tend to seek out information and people that support our bias. We dismiss non conforming information because it is inconsistent with our illusion. In other cases, we believe we are the part of normal that doesn’t suffer problems. So if 40% of marriages end in divorce, we are going to be part of the 60% that doesn’t. We err on the side of the hopeful part of whatever behaviors we are considering. We continue to deny any suggestion that our performance as an organization is less than the best. It’s DKE in action, and it makes us resistant to any suggestion that we might need a new management system. Our brains select the most hopeful path for us. One memorable comment from a woman who had listened to one of my presentations on Lean Management in 2007 was both humorous and sad. She complimented my presentation, then said that it could sure benefit a sister organization located near them, but that her organization was doing just fine. True story, and one I have heard many times.

And once our brain selects a hopeful path, we see support for that position everywhere. It’s called the “Frequency Illusion,” scientifically referred to as the Baader Meinhof Complex. [LINK HERE] It describes how a concept you were just made aware of starts to appear everywhere. Dr. Arnold Zwicky identifies a number of Baader Meinhof Complexes: Recency Illusion; Antiquity Illusion; and Frequency Illusion. [LINK HERE] Our mind convinces us that certain patterns we see are true. And with frequency comes comfort and a resistance to change.

I see this within organizations. We have always done it this way, so it must be the best way. Nelson and Winter coined a phrase to describe this: “Organizational Routine.” A general description is “the relatively mindless repetition of actions that have been well-established via evolution or voluntary design of an individual that is not a participant to it.” {LINK HERE} We use habits because the effort required to think uses a lot of our brains limited capacity and huge even requirements. After all, that 3 pound brain is about 2% of total average body weight but uses between 20 and 25% of your bodies consumption of glucose and oxygen. Once routines have been habituated, they are difficult to change.

So how do we incorporate a willingness to change in the minds and habits of trauma burdened adults? Taki Sharot shares some advice in this TED TALK. We basically share knowledge about the impact of change through creating hope (preservation of jobs, fewer crises, more security)  and move the participant to their own pathway for change. This concept is used in the realm of Psychology as “Motivational Interviewing” [LINK HERE] and in business as “Humble Inquiry.” [LINK HERE] For Motivational Interviewing, the concept for Motivational interviewing is “a directive, client-centered counseling style for eliciting behavior change by helping clients to explore and resolve ambivalence. “ For business, Humble Inquiry is: “the fine art of drawing someone out, of asking questions to which you do not already know the answer, of building a relationship based on curiosity and interest in the other person.”

For this reason, Change Management tis a priority requirement for any Lean Management initiative. And as I have written about before, in general terms you will have 20% of your employees open and willing to change, 20% heavily resistant and 60 percent waiting to see which side wins. Next time I will share a strategy for winning over that 60%. And as always, I would like to hear your thoughts.

Posted by: knightbird | February 28, 2016

The Politics of Lean Change

When implementing Lean, there is a consistent piece of advice that is given: Get the CEO fully on board. When I was new to Lean, my Sensei, Dr. Tom Jackson, spoke to me frequently about the level of my involvement. As a result, I became immersed in Lean. Our results were amazing and I was hooked. I cannot walk into a business without noticing its many deficits. Yet I hear all the time about how well the business is doing. I know otherwise, and have been looking for gentle ways to inform CEO’s about the benefits of adopting Lean. But the resistance remains heavy.

As a Movie buff, I hear dialogue that intrigues me. I google  the quote and read it for helpful content. This phrase was particularly intriguing. The speaker is the owner of the Boston Red Sox and he is talking about the use of Sabermetrics, of the changed use of statistics to focus baseball play in a different direction from pure talent acquisition. In 2002, the Oakland A’s used this new model to take a poorly funded team to the AL West championship. At the end of that season, Mr. Henry invited Billy Beane, the A’s GM, to become their GM for $19.5 million. He turned it down. But Mr. Henry bought into Sabermetrics and 2 years later, won the World Series with the Red Sox after 6 decades of losing. Their major competitor was the New York Yankees, who spent huge sums without necessarily winning.

So we have owners with huge sums of money for reasons they don’t control, like playing in a huge market. And we have owners with lesser amounts because they play in a smaller market. You know, that kind of sounds like Toyota after World War II compare to Ford, GM or Chrysler. In response, Toyota developed the Toyota Production System (TPS). In 1984, TPS was introduced to the U.S. through their NUMMI joint venture with GM.

Here’s what John Henry said about “…the first guy through the wall.”

“For forty-one million, you (Billy Beane) built a playoff team. You lost Damon, Giambi, Isringhausen, Pena and you won more games without them than you did with them. You won the exact same number of games that the Yankees won, but the Yankees spent one point four million per win and you paid two hundred and sixty thousand. I know you’ve taken it in the teeth out there, but the first guy through the wall. It always gets bloody, always. It’s the threat of not just the way of doing business, but in their minds it’s threatening the game. But really what it’s threatening is their livelihoods, it’s threatening their jobs, it’s threatening the way that they do things. And every time that happens, whether it’s the government or a way of doing business or whatever it is, the people are holding the reins, have their hands on the switch. They go bat shit crazy. I mean, anybody who’s not building a team right and rebuilding it using your model, they’re dinosaurs. They’ll be sitting on their ass on the sofa in October, watching the Boston Red Sox win the World Series.”

The politics of change is that you are threatening a way of life, business or income. Because you may have beens successful doing things your way, according to your standards, you are not open to new thinking. The future isn’t important to you. You will probably not be around to accept the consequences of your lack of innovation. But others will.

In 2005, a business I was associated with had a chance to adopt Lean. Resistance was heavy. Nothing worked to turn their CEO around. Despite some good results from a few Kaizen, the CEO was unable to see the huge potential benefit. I have pointed the benefits out in my writings. With Value Capture from existing sales, profits on both existing revenue and new revenue increase. With greater quality, you are able to capture more business from existing customers and give them lower cost. Customer service improves because of your philosophy. And employees become happier and you have fewer problems in the workplace.

Instead, we continue to look for a superstar to bring us out of our issues. As a study done at Coca Cola states, only about 20% of improvements in an organization can be derived from management. And I have yet to find the management that is capable of capturing the full 20%.

Taking a risk (and it’s a very small one if you are truly committed) has huge potential rewards. For Mr. Henry, it was a World Series Championship. Oh, and he proved his commitment by offering his GM position to Mr. Beane and putting the founder of Sabermetrics on contact, Bill James. He wanted to hire people with the new set of knowledge and skills because it didn’t exist anywhere else.

Lean has a unique skill set requirement. It’s a completely different method of working. And the first requirement is a deep buy in by the CEO. Mr. Henry did that, hired the right people and won. That’s a good lesson.

Posted by: knightbird | February 14, 2016

More Sales or Lean Improvements

The benefits of Lean are proven. You can capture considerable value (Value Capture) from your existing revenue. By focusing on G&A, Cost of Goods Sold and Profit there is a lean way to capture considerable value. Instead, most companies focus on increasing revenue. I generally ask why. If you produce a quality product at the least cost, revenue will increase. But if you focus on just increasing revenue, the results are generally mediocre.

I looked at past results from an Alaska corporation. With $400 million in revenue, net revenue was 3.5%. So annual profit was about $14 million. If the same company increases revenue by $100 million, that’s another $3.5 million in profit. That’s not necessarily bad because it’s better than a loss. But it’s still only $17.5 million in revenue.

Let’s look at an alternative approach—creating a lean culture. Let’’s target a rather modest level of Value Capture and say that we can do the same $400 million worth of work we did for $386 million for 3.5% less. Without any additional revenue, you have increased your profit by $14 million., or $10.5 million greater profitability than a strategic initiative to capture $100 million in more revenue. Is it feasible? Absolutely. Some lean implementations reduce costs by as much as 55%.

So which path would you choose? A profit increase of $3.5 million or $14 million. Well, you actually don’t have to worry about it. The right choice is to choose the latter strategy and it’s almost a certainty that you will also achieve the former. That’s right. Your quality and cost advantage will attract more business, and you should end up with $35 million of profit instead of $17.5 million. Shouldn’t be a tough decision, but it always is.

Posted by: knightbird | January 26, 2016

Observations About Inventory

It was an interesting workplace with inventory problems. Managing inventory had been ignored because of the expense. Some inventory is required, when you consider that computers, desks, phone systems, copiers and other equipment, fixtures and furnishings need to be accounted for. That wasn’t happening because of the lack of available resources. That happens at a non Lean Company.

But there was another interesting inventory phenomena. Ordinary products were bought in quantity when they were on sale, and then the savings were touted because of the reduced price. But was it really savings? Did we account for the human involvement in the acquisition of the products.

The cost of inventory includes what it takes to acquire the asset, storage, movement and accounting for it. And in some cases, the shrinkage that occurs because someone helps themselves to part of it. In one example, I saw 4 different storage areas for janitorial and maintenance supplies. It was pretty obvious that the needs list hadn’t been thought out in a realistic way. When there was a sale at a local store, lots of product was purchased and stored. We didn’t think to calculate how much cash we had in inventory, nor how much of it disappeared. I did have to be stored and that took away space that might have been used for other purposes. When we did a 5S and put together a use and utilization analysis, we ended up with a more organized inventory and knowledge about what products were needed, and how often they needed to be replenished. By putting together a standard checklist and a standard ordering time, you can reduce the effort required and ensure that there are the required products available. And you can assign the responsibility to a staff member with time and at a lower rate of compensation.

This same phenomenon was true everywhere in the organization. Certain products were not available and others were rarely, if ever, used but took up space.

A good Kansan system (just in time inventory system) can help a lot. When you know what you order and how frequently, you are able to find a supplier to meet your needs, and perhaps work out a discount arrangement with them. If they know you are giving them business regularly, it’s easier for them to discount your purchases. After all, with Amazon and other suppliers shipping free and selling the same product, you do have options. I always liked to keep purchases local because that’s where our customers lived and worked. But you do have options.

You can also work out a billing process like an open PO that is billed on a regular basis. This eases the burden on your accounting function.

And you don’t have to worry about product expiration dates. During our 5S in one location, we found product that had actually expired decades earlier. It had just never been cleared out.

I realize this post is boring. But Lean is not always exciting. I just learned that about 80% of savings in a Lean implementation accrue from front line ideas, and this is a perfect one for those actually doing the work.

Posted by: knightbird | January 25, 2016

Thinking Like A Kid

This is the title of a radio talk program that will air on a local Anchorage station soon. I had a number of immediate thoughts in the context of Lean Thinking. Here they are.

In our business lives, we learn the organizational routines for the business we belong to. It reminds me of a bumper sticker that made the rounds in Alaska years ago: “We don’t care how they do it outside.” We believe we have a culture that is better than everyone else, and in business that culture is expressed through organizational routine (Nelson and Winter) and another phrase that means something similar, habit. (Duhigg, The Power of Habit). In brain science, they divide the brain into conscious, subconscious and unconscious. There are far more thoughts being processed in the sub and un conscious brains, especially those related to routines we have learned. So many of our actions take place without conscious thought. We struggle to learn routines, but once learned, they are so incredibly enduring.

Protective factors in businesses circle around the existing culture. You will hear things like “That’s not the way we do things around here.” Or “Why change a good thing.” And so many routines in an organization just happen because of the person we hire. The new hire either adds new routines, or learns what exists and takes advantage of them. What do I mean by this?

In every organization that is not learning Lean, severe bottlenecks exist. A process is dysfunctional and takes a long time for work to clear each step. A crisis is noted, which means someone wants something and they are either not getting what they wanted or it’s taking too long to get. Enter a “Cape.” You know, “Here I am so save the day” kind of person. The understand the organizational routine and have devised a workaround. You don’t know how they get things done, but they do and you don’t care because they eliminate problems for you. The Cape uses their thinking power to learn “fixes” that aren’t really fixes, but workarounds. They don’t care about the impact of their workaround on the system because they get a lot of praise and possible promotions and pay raises because they are “Problem Solvers.”

Kids haven’t developed many routines or habits. In fact, we spend a lot of time to teach them routine and good habits. We put them on a “Schedule” as babies. We teach them how to tie their shoes, cross the street properly and how to play games. We introduce a kid to our culture of how to live, and they take to it quickly, for the most part. And they are stuck with that culture for the rest of their lives, or until they expend the energy and learn how to change it. Our brain is an amazing instrument, with myelin sheaths that channel learned behaviors, at a certain point, without thinking. You can see this in athletes who have spend thousands and thousands of hours on one act. Take a jump shot in basketball. Why does it go in the basket? Because our brain has learned how to judge direction and distance then directs our body to perform a learned action quickly. When you are teaching a kid to shoot a jump shot, their first attempts are uncoordinated and awkward. Through practice, it improves. If they reach the pros, they perform that act unconsciously and with great skill. In the face of considerable opposition.

So thinking like a kid in lean is to clear your minds as best you can and start to look at what you do by dismissing the routines and habits you already have. Lean does this in a scientific method. First you have to understand what you do by using process maps, 5S, spaghetti diagrams and the other tools of lean. This is the role played by parents who are teaching you their culture, and it may or may not be a good culture to learn. But it’s the only one you have. When you understand what you do through habit and routine, then you can start to change it, and that takes thinking like a kid. You basically need to reprogram your subconscious and unconscious brains with the one tool you do have, your conscious brain. If you are going to take the time to learn new habits, you should learn the ones that help you achieve more of what you want.

Thinking like a kid means so many things to so many people. But to me, it’s a period of time where we learn to see the world so we can survive in it. We have lots of help interpreting that world, including learning language, recognition of threats and building skills. Gosh, that should like Lean Thinking. We learn a new language, develop a new culture for survival and accomplishment and build skills to compete and secure the things we need to for survival.

And there is, as well, the wonder of a whole new world to kids that captivates us. They are seeing the world through a new lens with wonder and amazement, but they don’t’ know it. They haven’t formed the judgments that color their perception yet. So we can think like kids by removing our judgments and focus on what helps us best survive, and perhaps thrive.

Posted by: knightbird | January 23, 2016

Learning to See the Importance of Change Management

A Lean Leader will encounter resistance in their transformation. No ifs, ands or buts. You will. It may be direct and confrontational. It may be indirect and hidden from you. The nature of leaders and employees is to resist change, unless it is initiated by them. And for change that has already been initiated by them, they will be very protective. An important skill for a leader is to recognize the difficulty of change and to have a plan for introducing it. I have advocated for a strategic initiative for implementation Lean Management, in whatever form. What I see instead follows a predictable pattern. Someone hears a lean presentation. The are impressed. They hire a consultant. They conduct Kaizen. The get enough improvement to get by. And they slow down.

I almost fit this pattern. I am one of a handful of executives who achieved a Lean Cultural transformation. That is, except for board comprehension. That’s another story. Among employees, improvement events began to be self started. An employee would talk to a Lean Champion and their supervisor. An improvement event would be scheduled, and carried out. The improvements would be reported in a way that I had access to. When I started, I discussed the implementation of Lean with our Executive staff. For the most part, they agreed. But 2 were closet oppositional. They wouldn’t discuss their concerns with me directly, and both eventually left the organization, one out of frustration, and the second because of oppositional behavior. I also asked the board to adopt a strategic initiative. We planned to become the best managed Native non-profit in the state of Alaska. I believe we achieved that within the 8+ years I was the CEO.

What is Change Management? It’s actually becoming an academic study area today. I hear a lot about team management. I agree with the concept of teams, but it’s more than teams. Change Management requires moving approximately 80% of your employees to actively practice Lean Management. About 20% of employees will be active resisters. 60% will sit on the fence and adopt a wait and see attitude. If you are successful, the active resisters will gradually leave the company, or you may have to ask them to leave. For the most part, they are not happy in a Lean Culture. It doesn’t feed their individual need of achievement. They will see plenty of team achievement, bit for some reason that is not fulfilling enough. Here is how I started.

Once you understand what Lean Management is about, and have a rudimentary understanding and are committed to a proper implementation, talk about it with your leadership. Then train them. It is a completely different method of management than they have ever been exposed to. It they are not convinced by the many success stories out there to try it, attempt to include them in Kaizen. If you have your 80% at least willing to try it, start with a problematic process and bring in an experienced Lean Champion. You can start training your own at this time, but use an outsider with strategic experience. By strategic experience, I mean able not only to see the breadth of the organization, but project improvements into the future. Discuss what you are doing with your employees, and make sure you include some active resisters in the event. It will either drive them out of the organization or change their status to at least non resistant.

Learn how to measure improvement. When you schedule a process improvement event, make it a 5 day event. After all, you are pursuing change management. YOU WILL GET IMPROVEMENT. Guaranteed. Your future state will probably yield from 50 to 300 % improvement. And I have seen higher levels of improvement. But you will get improvement. And here is where an experienced facilitator will help you achieve as much of that as you can in the one week time frame. And you will leave with a fully vetted A-3 that tells you how to proceed with capturing more of the improvements you have envisioned.

And it is important to make the improvements visible. Your employees are all competitive, and they will want to achieve their own improvement. And ultimately, you will want to see if your Executives have truly embraced Lean Management. Results will speak for them, not words. If you have true performance measures, and a very Visual Management System, the 60% will start to be drawn on board. Most of all, as the CEO, do your job. I have written before about Leader Standard Work. It requires going to the Gemba, either participating inn or visiting Kaizen, and a weekly stand up session for all leaders and regular visits to division process control boards. Performance measures should include historical. Show how your process improved initially, and how it continues to improve.

I also recommend taking your most interested and accomplished participants and starting to train them as Lean Champions. Eventually, you want them to conduct Kaizen. Our process for training included accepting volunteers and training them using Training Within Industry. (TWI) We had a Training Matrix and showed as they Champions progressed through five levels of training results in about 10 different skills. We would train Champions how to do a process map, a swim lane, spaghetti diagram and other skills exactly the same way. Then we would have a Champion plan and co-facilitate an improvement event.

And as you proceed with your implementation, Learn and Adjust. Plan, Do, Check and Adjust. Never assume you have all the knowledge you need to continue to lead the implementation. Talk to more experienced executives. Get rid of you arrogance, if you have any. Lean to stop blaming employees for problems. Take training in the areas where you feel you have a need. One training experience you should seek is “Humble Inquiry (HI).” If you understand HI, you are on your way to becoming a respected, charismatic leader who will achieve outstanding results.

You leadership style should evolve as you evolve. If you have access to an experienced coach, seek them out and pay them for their time. Or try to have one put on your board. Perhaps they can help move the board to a greater understanding of the Lean Management process.

Good luck. More on the topics included in this post will come.

Posted by: knightbird | January 18, 2016

United Airlines Traditional Management Performance

United Airlines made money last year, despite it’s own poor Executive efforts. But they made money so they will get huge bonuses. And they butchered a merger, but got it done. Completing the merger was probably a performance measure and they will get a big bonus for that. Oftentimes, despite our worst efforts, we find ways to make money in business. We may have a fairly decent share of the market, or may be the only provider in the market or we have a competitive advantage that allows us to be incompetent as an Executive. United Airlines fulfills that role well. In my search for articles, I discovered that they have been in trouble for well over a decade. The merger with

Passengers don’t like UA very much. [LINK HERE]. On time performance, baggage handling and amenities have all suffered. Stories like a handicapped man having to crawl off a plane because the didn’t have an aisle wheelchair and a lost girl in Chicago because no one met an unaccompanied minor are making the rounds. UA chose to merge both merged company IT in one day, and passenger and employees suffered for months while they worked out the kinks.

But in the meantime, they have had 3 CEO’s in one year, discovered corruption and screwed up so much. [LINK HERE] Why were they profitable then? Fuel prices went down. But they even manage so screw that up. The hedged their position, which means they paid more for fuel than they had to. And they still made money.

What do I believe happened?

Most businesses are run poorly when compared to the industry leaders. And then they try to discover what the leader is doing that makes them so successful and copy it. Stephen Speare wrote an outstanding book about this practice: “Chasing the Rabbit.” In it [and the rewrite titled “The High Velocity Edge”] he describes how leading companies use Lean Management derived from the Toyota Production System to achieve “outstanding” results. And apparently Rocket Scientists aren’t capable of avoiding chasing the rabbit, a point Speare makes when he discusses the Space Shuttle disasters.

Pun aside, good management is not rocket science. But it must be learned. There is no quick fix to any business. Here is my prescription. First, Commit to learning everything you can about Lean. Understand who Dr. Deming is. Know that Sakichi Toyoda was a Loom inventor and discovered Jidoka, or autonomation. Know why he implemented the 5 Why’s? Then put in countermeasures to assure the problems you find never happen again. When he asked his son Kiichiro to start Toyota Motor Works, it was with a foundation of scientific thinking. Then bring in Taiichi Ohno and Shigeo Shingo together with a lot of scientific experiments, and you get a high performing company. It’s a management system without peer in the United States today. And United Airlines doesn’t get it.

That’s why I say immerse yourself in Lean management. Participate in Kaizen. Go on Gemba walks. Talk to experienced Sensei and watch how they perform.

Then put it into your strategic plan. Explain it to your board and hire the right consultants to set up performance measures with a solid baseline. I have gone through most of my career as a board member listening to only the good. Make sure your culture understands that there is bad, and look for it. Not to punish employees connected with the bad, but to empower them to ask Why and implement countermeasures. Shades of Sakiichi Toyoda. Your strategic plan should say that you plan to be the leader in your market using the principles of Lean Management. Then require every new hire to commit to learning and using lean in their daily activities. Build the culture into your workplace and commit to making as many mistakes as happen, but with a commitment to allowing your employees the knowledge and resources to fix them.

Is it simple? Absolutely not. I was listening to an extremely knowledgeable football veteran explain how to neutralize a best of a defensive tackle and clear a lane for the quarterback to run for a first down. It was brilliant, and beyond my analytical capacity. We have to make mistakes and learn our skill set over a considerable period of time. Too often, I run into individuals who have slightly more knowledge than others in their organization. They become the expert, despite failing to earn that label through thousands of hours of effort. We are currently experiencing that in a lot of places in Alaska. We have no experienced Sensei’s, and those who claim to be know only the tools. So in my football example, they understand how the ball is hiked and where the linemen are placed. But they don’t know how to figure out how to identify a defective play and develop an effective countermeasure. The do what everyone else does, and run away from the beast of a tackle, instead of neutralizing him. That’s what UA does.

So have a strategic initiative to implement Lean, then learn, learn and learn. And bring in someone who can teach, from a systemic and not a tools perspective. The results will come faster. I have also said this to potential clients, and have written about it as well. You will not pay a single dime for implementing Lean the correct way. You will save so much money without focusing on the bottom line that it will blow your mind (to use a phrase from my youth.) I am still waiting for that creative executive in Alaska to ask me to help them with their implementation.

Posted by: knightbird | January 15, 2016

The Con Men and Who to Trust

I know this is a strange title for a blog on Lean Management, but I was motivated to write it after listening to author Maria Konnikova, author of “The Confidence Game: Why We Fall for It,” on National Public Radio [LINK HERE]. My reasons might become clear, but I am still working to put it into context. Part of my reason for vacillating is that many people have become so good at rationalizing their beliefs and although they might perpetrate a con on an individual, the actually believe in what they are doing. So I believe we have con men who know that’s what they are doing, and we have con men (and women) who believe that what they are doing is right. But I believe the result are just the same. By writing this, I am not pointing out any specific acts, but a pattern of behaviors that I believe exist that support poor performance in an organization. I have certainly heard my share of “stabbed in the back” stories. My only purpose is to make us aware of how important an ethical workplace and how Lean Management promotes it. This is not to say that ethical workplaces don’t exist without Lean.

A “Chaotic” work place is a complex environment, and it does work to some extent. We hire Executives to manage companies based on their credentials, experience and results. Every Executive tells stories that put themselves in a good light. I am reminded of “Chainsaw Al” Dunlap, who had a reputation of budget cutting extreme. He was hired by Sunbeam and proceeded to drive them into bankruptcy. Most executives just fail to perform. And because of the culture of criticism avoidance, we don’t say too much that’s negative about executives. After all, they do have to get another job after they do nothing for an organization. Of course, there are executives who do a good job. But how much of that good job is due to fortunate circumstance, and how much to great management? As Ms. Konnikova points out in her interview, con artists are just really nice people and they make you want to like them. They do a background check on you. They are complimentary about your past work. The engage you on your own turf and make you like them. While I don’t believe most con men are intentionally perpetrating a con, they do manage to use an organization for their own benefit, predominantly through salary and benefits. Given what Lean has taught me about companies that do not know what good management is, it is relative easy for some people to use that for their own gain.

Virginia Mason describes what they refer to as Capes, people who have mastered the Chaos, know what management wants, and are able to deliver results through elaborate workarounds. The know who to go to, who to avoid and how to get a result even if it means stretching ethical boundaries.

Others manage by shifting blame and proving they can manage by isolating and eliminating who the identify as problem employees. This type of organization has spies, multitudes of reports and rampant finger pointing. If a poor result is reached, the executive is fired. Fear is used to maintain results and force employees to work harder. But the hard work is not team based. It becomes an effort to shield yourself from punitive executives. But when I say punitive, it is always with an explanation. And for many reasons, that is all that is needed. When you let an employee go, you lay some blame on the reason for letting them go, but never really examine the true root cause of the problem(s) they are blamed for allowing to happen.

But I believe more prevalent is how a relationship develops between a board member (politician) and an executive. Most CEO’s become very aware of board member statements and make sure they respond to them, even if they are not good ideas. We have a term in Alaska for professional board members—“per diem Indians.” Many for profit corporations pay their board members for serving. Sometimes its a lot. And publicly traded companies often provide their board members with stock or stock options for payment, in anticipation that if the advice they give helps the corporation become more profitable, their stock will rise and they will benefit.

A true Lean Organization minimizes issues of this type. First of all, a Lean Executive will achieve outstanding results if they truly understand Lean, or make a commitment to understand it. A Lean Executive will be able to explain performance using statistical performance measures. A new style of reporting will need to be learned by any board employing a Lean Executive, and they will have to start thinking systemically while they eliminate their blame and shame culture. After all, Dr. Deming stated as one of his 14 points the goal of eliminating performance reviews. After all, a Lean employee and the team they work in are reviewed every day, by themselves. By understanding Takt Time, Cycle Time, Pull Systems, Elimination of Waste and Standard Work, they are already working at much higher level than their competitors.

Now I think this is a much tougher sell to an individual board member who has become accustomed to special treatment. A prime measurement tool for Lean processes is the control chart. When a Chaotic workplace experiences a defect that comes to the attention of a politician, the reaction is typical. They approach the CEO and complain. The CEO wants to get to the bottom of the complaint and approaches the manager, who approaches the employee closest to the problem and complains. Fix it or else. So the employee will do whatever it takes to resolve the problem. But they won’t fix the problem. And by addressing this one defect, they might create more work by establishing a regular report to make sure it doesn’t happen again. And the report eventually fades into memory, but is still made. So one report doesn’t really hurt us, does it? Wrong. My Lean Champion at one workplace asked a finance staffer about a report being done on a weekly basis. They didn’t know why the report was done, they just did it. When the Manager of the department was asked how the report was used, they said it wasn’t. It got filed. It was most likely a safety valve that could be pulled out by an executive to avoid blame by a board. See, I am managing my department. In fact, this report took 2 hours a week to compile and prepare, so after 52 weeks, it cost the company 104 hours of time, or essential 2.75 work weeks. That is one plus paychecks for a report that will likely never be used.

If a board and CEO can effectively transition to a Lean Culture, with Respect for People and Continuous Improvement applied to the entire organization, we begin to eliminate opportunity for con men, both intentional and non-intentional. A Lean System is so much more difficult to game. That’s not to say it can’t be done, but it becomes more difficult.

Oh, and a lot of consultants game organizations. They come in promising great results, but don’t really deliver any. I have seen lots of flavor of the day projects delivered by consultants with almost no benefit, and often considerable detriment. There are good consultants out there, but many will sell an off the shelf product without changing the culture. As a Lean Expert, I can make change without changing the culture. But it’s not sustainable.

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