Posted by: Knightbird | August 28, 2015

Embarrassing, But Consultants Should Know More Than You

Although the title expresses my feelings about an interaction I had with a colleague I respect, it is my intent to analyze more of the Alaska Division of Public Assistance RFP for Lean Consulting Services. But first, my apology.

After 11 years of engaging in the deep practice and study of Lean Thinking, I believe I have achieved a level of understanding that is significant. I have conducted many improvement events, and reviewed many, many more. I had to jump from actual engagement with Kaizen to strategic Kaizen because I felt very early how much power the CEO appears to have with employees involved in Kaizen. So I stopped conducting them, and became a cheerleader. I had 7 “Lean Champions” working for me at one time, and when I allowed them to do their job, they achieved amazing results. I continued to review their work, and coach/mentor when the opportunity arose. But when our staff was trained and allowed to analyze and improve their processes, with the right strategic philosophy in place, we always got better. But as a Lean Strategic Thinker, I also know that I can always improve. Dr. K. Anders Ericsson writes about improvement as a process where 10,000 hours of “purposeful effort” can lead you to world class achievements. Think of it as a Ph.D. The effort makes you world class in one area. The purposeful effort is defined as increasing the effort and intensity of your learning to another level after achieving mastery at the level you currently are. It means we are going to struggle with the new effort, but we will learn as a result.

I have a friend and colleague I have been working with for a while. He is close enough to tell me that I make him feel stupid at times. I am embarrassed by his revelation. I struggle with how to teach Lean. Oh, I can teach the tools and how to use them Gather data, map the value stream, analyze cause and effect, search for the root cause, 5 why’s and so many others that are helpful and beneficial in certain circumstances. But making the tools available is easy. That’s why I had 7 Lean Champions training in my Lean Promotion Team. What’s tough is the change in mindset that is required at the executive and managerial level. I cannot make a CEO feel stupid. I need to probe a CEO’s mind to discover what they are trying to accomplish, and help guide their training and thinking to that result in a gentle way. I have written about the process of Humble Inquiry written about by Dr. Edgar Schein. Our purpose as a Lean Strategic Consultant is to find what is in a CEO’s mind and guide them to Lean Thinking. Coaching and mentoring is what we should be doing.

Yet I also read about the opportunities for application of Kaikaku. Some circumstances call for rapid improvement, as when your business is hemorrhaging cash. When Porsche hired Shingijitsu in the early 1990’s. Sensei Chihiro Nakao took charge the first week and started making the changes necessary to turn Porsche around. A good sensei can do that, but generally refuses to in favor of guiding the cultural change necessary for a sustainable Lean transformation. Japanese Sensei’s can be very blunt to their clients because they achieve results, and when you are losing fistfuls of cash, improvement should be your focus every single minute.

Division of Public Assistance: When I write, I try to be objective and fact based. Yesterday, I wrote about the latest RFP from the State of Alaska’s Division of Public Assistance. I wrote things that could be irritating to a manager, but they weren’t intended to be. I don’t think that way any longer. With a mindset of continuous improvement, we always think about getting better. This means we have to accept the existence of problems and criticism as the identification of opportunities to improve. If I were engaged as a consultant in a workplace, my first act is to take the client to the Gemba and see what is happening. In most circumstances, I can do Kaikaku. But instead, I want the Executives to learn, and that means allowing them to struggle with what is to Lean consultants, a very easy fix. We want to teach them a process for improvement that endures as we solve the very large problems. The culture we want to teach the organization is simple: continuous improvement. Every problem needs to be fixed and no defect should ever reach a customer. Is it always cost effective to fix every problem? Maybe not. But addressing every problem should be the culture. If we cannot fix the problem because of cost, we fix as much of it as we can and continue with trying until we find a cost effective solution.

My point yesterday was supposed to be about the difficulties of selecting a software solution for a process problem. As a part of Lean Thinking, we focus on people solving problems, and automating only if the solution is implementing defect free processes. If DPA has achieved a Lean Cultural state where every problem is addressed, it would show itself in the RFP. I didn’t see it, but I admitted I have read very little about their Lean Culture. I admire their effort. However, as I try to learn, I analyze for what could be done better.

So I maintain my opinions from yesterday and expand on it in one way. When you look for a consultant, the strategic goal of the RFP should be very clear. There isn’t enough data in the RFP to determine what is necessary, but the language indicates that they are seeking a transformation from a tools based Lean Implementation to a Strategic focus. If they need Kaikaku, they don’t have an understanding of the concept yet. The improvements they seek seem to be focused on their software implementation. From a Lean Strategic Thinking focus, this would be a quick fix, but might not achieve a Strategic Transformation.

A Strategic Focus would search for the Root Cause of the flawed implementation of the software solution. This approach requires going back to Kaizen and updating the Value Stream Map VSM) that I read about years ago. The VSM helps with asking the 5 Why’s and determination of the deepest Root Cause we can find. When we solve the problems associated with that Root Cause, we end up with a Future State Map (FSM) that we work to implement. We standardize to the FSM and train employees in that value stream. We measure for improvements and monitor for defects that need correcting, and we solve them—continuously. If we see an opportunity for technology to improve our performance, we experiment with the proposed improvements and see if they work. If they do, we implement. If they don’t, we don’t implement.

And we always seek the Value driven improvement, which almost always leads to cost savings.

Now what would I do with the $800,000 top end of the RFP contract?

First, I would hire a Sensei experienced in Lean Strategic Thinking. At that point, they know the tools and are able to deploy them wisely. Second, I would hire 3 to 4 Lean Champions. If the situation is urgent, I would advise the Executive responsible for the organization to consider Kaikaku. The Sensei would guide the improvements with urgency, but as much teaching as is feasible. The hires would be temporary hires for one year, with an expectation that the savings that accrue from Lean would allow creating permanent improvement positions. My estimate yesterday was that about 100 FTE position effort would be eliminated within a few years. My strategy for accommodating this reduction in force comes in 5 stages. (1) Freed up positions are first assigned to reduce the backlog. And we know that at one time there was a backlog of 10,000 (of what is not clear); (2) assign freed up positions to the improvement office for service as Lean Champions with a goal of eventual redeployment to staff positions and spread of Lean knowledge throughout the organization; (3) reassumption of duties that have been contracted out—because we now have employees to can do the work internal to the organization; (4) reclassify and reassign employees through transfer to other agencies within the state government; and (5) allow turnover and vacant positions to absorb the savings. This strategy stays true to Toyota’s Respect of People philosophy. You don’t ask employees to improve their way out of a job. You guarantee as much employment as is feasible. In the private sector, as you achieve a competitive advantage over your peers through Lean, you gain more business and will need the personnel.

Will this work? I believe so. My experience is telling me that we can achieve significant improvement, but I don’t have all of the data I need to be sure. Through Lean, we achieve huge gains in productivity and cost. I don’t see any reason for a strategic implementation of Lean to fail with any state agency. Huge improvements are possible, but have to be guided properly.

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