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By Al Norval (bio)

I’d like to start a series of blogs today which get back to the basics of Lean. It seems to me that as Lean gets more mainstream, people are forgetting the basic principles of Lean and are contorting Lean into something it was never meant to be. The worst examples are where people take what they were always doing and re-label the same work as Lean. I’m sure we can all think of many examples of this.

What do I mean by Lean?

It’s the engagement of all people in driving continuous improvement through the elimination of waste to improve Customer Value. The result is the world’s most powerful business system.

Today, I’d like to start right at the beginning with Customer Value.

In my consulting practice I often come across organizations that are in the middle of a Lean transformation and when I ask why are they doing it – what’s the purpose? I get an answer of – to save money, to meet our financial obligations to the organization.


This answer always disappoints me since there is much more to Lean than that. In Lean we need to meet the needs of three publics; the Employee, the Customer and the Organization. If we’re doing Lean and not benefiting all three publics, then we’re not doing Lean properly. There has to be a win for the Employees, a win for the Customer and a win for the Organization.

If there is no win for the Employees, how can we expect to engage them in continuous improvement? More on that in the next blog in this series.

If Lean improves the value proposition for Customers, it results in a win for our Customers. Higher value entices Customers to buy more of our product or service. I like to think of Lean as a growth strategy. By delivering more value to customers, organizations can sell more and selling more is one of the best ways to achieve financial success.

Instead I see many organizations that are doing the exact opposite. They are trying to get Customers to conform to their way of doing business rather than taking the Customer viewpoint and changing the organization to become responsive to the needs of the Customer. Even worse, they develop products and services internally and then try to convince their Customers these products and services will solve their problems. A great saying in this vein goes like this “No amount of marketing can make up for poor product design”.

True Customer value comes from deeply understanding both the spoken and unspoken needs of Customers. These needs come from problems the Customer is experiencing and sometimes from problems the Customer isn’t even aware they have.

For everything we do, always ask the question - is it driving more value to our Customers?

The answer to this question is how we judge every activity, every product and every service we provide.

Cheers

Al

In case you missed our last few blogs...please feel free to have another look…

What is Courage & How does it relate to True North?
Lean, Leadership & Ethics, Part 1
Visual Management in New Product Development



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By Pascal Dennis (bio)

Let me build on my earlier blog on Lean, Leadership & Ethics

The ancients defined Four Cardinal Virtues:

Prudence, Temperance, Justice and Courage.

Courage -- the capacity to overcome fear -- is perhaps the most admired.

In Getting the Right Things Done, I defined True North, our strategic and philosophical purpose, as follows:

"Something for the head, something for the heart..."

How does courage relate to True North?


Breakthrough -- transcendent, enduring achievement -- requires all the Cardinal Virtues, and courage most of all.

Courage, like True North, entails head and heart. Courage without the head is simply foolhardiness.

Courage means you understand the risks, and do it anyway.

Is courage a virtue under any circumstance? I'd say not. (Is a courageous terrorist admirable?)

Courage is admirable when exercised in the service of others, of a greater good, of True North.

In summary, achieving True North requires all the cardinal virtues and none more than courage.

In fact, all the virtues depend on courage.

Best regards,

Pascal


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By Pascal Dennis (bio)

Been reflecting about each of these lately, and how they relate.

But what’s Ethics got to do with anything?

We’re in a proverbial knowledge economy. The market caps of, say, Google, Facebook and Apple, dwarf that of Toyota.

Google, Facebook and Apple have comparatively little in physical capital. ‘All’ they have is intellectual capital, and in particular, human capital.

How does human capital differ, from say, physical or financial capital?

Unlike, say, a machine, or a bond, human capital can chose not to deploy. Human capital can chose to walk out the door, in fact.

“That army will win which has the same spirit,” said Sun Tsu twenty-five hundred years ago. It’s never been more true.


Yet Gallup’s latest State of the Global Workplace report tells us that only 13% of employees are engaged in their work!

Big company disease and organizational dysfunction is so deeply entrenched that we barely flinch at such data.

Imagine you’re a factory manager and your machines are operating at only 13% of capacity!

Why are people so disengaged? Gallup doesn’t say. But I suspect that disillusionment, or even disgust, at what the organization stands for, or how management behaves, is a major reason.

There’s more. Millennials (those born after 1980) will comprise 75% of the workforce by 2025. And Gallup tells us that ethical behavior in corporations is even more important to millennials than to their parents.

Of course Ethics matters. People will not follow swine, at least not willingly, for very long. People will certainly not commit their hearts and minds – unless they feel good about what the organization stands for.

Best regards,

Pascal


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By Pascal Dennis (bio)

Lean thinking is moving out of the factory -- downstream into sales, logistics and order fulfillment, and upstream into finance, marketing and New Product Development (NPD).


We're often asked, how do you apply the fundamentals in these areas?

For example, how might you apply visual management in NPD?

A good first step is to decide, What do we need to know to run our business?

Here are typical answers:

a) What's the project loading at each point (P0, P1, P2) in our development pipeline?

b) What are min/max levels and our status at each point?

c) What are the biggest obstacles in each project?

d) Do we have countermeasure plans? What's their status?

e) What are broader system issues? Do we have countermeasure plans? Status?

Now we're ready to engage our teams in developing visual tools that will make the invisible, visible.

In our consulting work we've used funnels, race tracks, football fields, as well as, team boards and the like.

Visual management is also invaluable in NPD physical plants (e.g. Test Labs), and is similar to what you might find in a factory.

For example:

a) What's this week's work?

b) Are we ahead or behind?

c) What are our biggest obstacles? Countermeasure plans & status?

d) How versatile are our people?

e) What's the loading on our machines? Constraints?

The key, again, is to make the invisible, visible.

For more on Lean thinking outside the factory, please check out The Remedy.

Cheers,

Pascal

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By Pascal Dennis (bio)

Lean in the service industries is a frequent topic in this blog.

The great hotel chains -- Ritz, Hyatt, Marriott, Westin, Disney and others -- are superb Lean companies.


Marriott's Twelve Guiding Principles of Leadership and Customer Service, for example, reads like a Lean manifesto:
  1. Continually challenge your team to do better.

  2. Take good care of your employees, and they’ll take good care of your customers, and the customers will come back.

  3. Celebrate your people’s success, not your own.

  4. Know what you’re good at and mine those competencies for all you’re worth.

  5. Do it and do it now. Err on the side of taking action.

  6. Communicate. Listen to your customers, associates and competitors.

  7. See and be seen. Get out of your office, walk around, make yourself visible and accessible.

  8. Success is in the details.

  9. It’s more important to hire people with the right qualities than with specific experience.

  10. Customer needs may vary, but their bias for quality never does.

  11. Eliminate the cause of a mistake. Don’t just clean it up.

  12. View every problem as an opportunity to grow.

Marriott's standard - our principles will be in the nightstand drawer of every Marriott room.

A few years ago, I was staying at the Sharm al Shaikh Marriott, at the bottom of the Sinai peninsula.

Being a natural pain, I decided to check Marriott's adherence to its standards, in this relatively remote hotel.

Sure enough, I found the principles were there were supposed to be.

The hotel manager smiled when I told him, and described Marriott's training & development processes.

Ritz, Hyatt, Westin, Disney & the rest all have corresponding principles & practices. Well done - and please continue!

Are there any other industries that could learn from Lean hotels?

Oh, I don't know, perhaps Health Care...?

Best regards,

Pascal


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By Pascal Dennis (bio)

Last time I talked about making problems visible through the four levels of visual management.

I described Levels 1 and 2, which have comparatively low power.

Today, our topic is visual management Levels 3 and 4 – the most powerful:

Level 3 – Organizes Behavior

Home positions for tools & equipment are a good example.

In a surgery, home positions provide a nice visual confirmation that sponges, scalpels and other equipment are back where they belong – and not inside the patient!


In manufacturing, having a home position for, say, our torque wrench and gauges, ensures a) they’re there when we need them, and, as important, b) we know when they’re not there.

“Right, Bonnie is doing her daily 2:00 pm torque audit.”

Other good examples include the ribbed perimeters, and studded lane lines of many highways. You know at once if you’re on the median or straddling your lane. You quickly correct your behavior.

Recently, I saw a nice kaizen in the Oncology department of a children’s hospital. Infections are a major risk in such wards. How to encourage staff & parents to decontaminate their hands before they enter the room?

Move the hand decontamination unit to the point of entry. You can’t enter without seeing and using it, and compliance rates have spiked.

Level 4 – The Defect is Impossible

Lean thinkers will recognize the ‘pokayoke’ concept. We develop such a deep grasp of our process and its possible failure modes, that we install gizmos and practices that make them impossible!

Manufacturing is full of these: alarms on torque wrenches, electronic lights and safety mats that disable the machine if a team member enters the line of fire, gasoline nozzles that won’t fit diesel tanks and so on.

In Health Care, pokayokes on gas lines make it impossible to mis-connect oxygen and other gas lines.

As we get better at Lean, our visual management naturally progresses from Level 1 to Level 4.

Once we’re good at Level 1 and 2 visual management, we begin to think. “The same defect – here we go again! How do we prevent it?”

Who is the best source of Level 3 and 4 visual management?

Why, our front line team members, of course.

That’s why total involvement is critical. Alienate the front line and you lose all their insight & creativity. Problems mushroom!

But you already know that…

Best regards,

Pascal


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By Pascal Dennis (bio)

Lean is about making problems visible, and visual management is a core methodology.

You can’t fix what you can’t see!

There are four levels. Here they are in order of increasing power:

Level 1 – Tells only

STOP signs are a good example. In our neighbourhood, people blow by them all the time.

(We call them ‘Hollywood stops’ – the driver slows by 5 miles per hour, takes a perfunctory look around & drives on through. Not exactly, Safety First!)

Level 2 – Something changes, which gets your attention


Traffic lights are a good example. “Hey, the light’s changed to Green. We can drive on.”

Level 2 has more power because, done well, it wakes people up.

Our regular readers may recall that Lean is about wakefulness…. ``Hey, we have a problem here. We should do something!

Sadly, visual management in many organizations gets stuck at Level 1.

In many Health Care organizations, for example, visual management amounts to signage telling people to do, or not do something.

This amounts to blaming the work, as W. Edward Deming observed a generation ago

Doing so, subtly shifts responsibility from senior management to front line workers. “Hey, I told them not to do it…”

A nice trick – “I’ll take the power, privilege and perks of power – but not the responsibility!”

This amounts to a 21st century variation on “Let them eat cake.”

Most of the time, the root cause is in the system - which senior leaders own.

Next time, Level 3 and 4 visual management.

Best,

Pascal


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By Pascal Dennis (bio)

When it comes to fundamentals like Strategy, Management System, Standardized Work, Quality in the Process and the like, it’s easy to become rigid and even doctrinaire.

After all, these are the concepts that underlie TPS, the ‘world’s most powerful production system’. In the circumstances, we’re right to be doctrinaire, aren’t we?

“We have to have four mother A3s – one each for People, Quality, Delivery and Cost! We have to have strategy A3s and dashboards for everything!

Standardized work means Content-Sequence-Timing-Expected Outcome! Quality in the Process means detect the abnormality, stop the process, fix the immediate problem and develop countermeasures for root causes!”

No doubt, you’ve heard this sort of thing too.


In fact, as we apply these timeless ideas in areas further and further from manufacturing, finesse is of the essence, and rigidity, a recipe for failure.

The further from manufacturing we get, the more important it is the we translate the principles, and not insist, “This is how did things at Toyota, or Honeywell, or Proctor & Gamble or…”

This is a major challenge for ‘Lean’ practitioners in these times of tumultuous change. Who cares if your muffler manufacturing factory has the best SMED process in the industry?

Demand for mufflers is going nowhere but down, no? But the principles underlying SMED – separate internal & external work, convert internal work to external work etc. – transcend manufacturing.

SMED principles can readily be applied to shortening changeover times in healthcare, aviation, and software design.

The same applies to any ‘Lean’ principle. Principles are eternal, countermeasures temporary.

And this reflects the deeper challenge facing the Lean movement these days.

Is ‘Lean’ a principles-based profession, or a skilled trade? The distinction is important.

I don’t want to be misunderstood. I respect and admire skilled tradespeople. They’re an honorable and essential element of successful organizations.

But they’re insufficient if you want to transform an organization or an industry. For that you need principles.

Principles are harder to internalize than countermeasures. But principles are eternal, whereas countermeasures are temporary.

Which brings me to the title of this piece, which a wise old gentleman taught me many years ago. The old gentleman is gone, and I am his scarcely adequate proxy.

Neither too rigid, nor too loose, expresses reflects the subtlety and intelligence needed to apply principles in ever more complex situations.

It reflects the need to be humble and learn from quick experiments – because we don’t really know, and can’t really know what’s going on unless we study the situation.

As a colleague likes to say, “If your first hypothesis isn’t embarrassing, you’re not really trying.”

Good advice in a world where Value is often a vague shadowy thing, and changing with every new technological miracle.

Best regards,

Pascal


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By Pascal Dennis (bio)

Big Company Disease has many causes.

One of the most subtle is our inability to ‘wrap our arms around’ the PDCA cycle.

Myriad improvement cycles begin – but they become fragmented:
  • Group A develops the Plan,
  • Group B deploys,
  • Group C checks the Plan, and
  • Group D adjusts it.

I call this Scatter, with a deep bow to the late, great Al Ward – friend, colleague & profound Lean thinker.

Al described this syndrome to me over lunch a decade ago, and then again in his splendid book Lean Product & Process Design.

Improvement, whether a Kaizen Workshop, Problem Solving cycle or Strategy A3, requires complete PDCA cycles

One person (or team) needs to wrap her arms around the cycle, and thereby develop the profound, sympathetic knowledge central to breakthrough.


Thereby, our entire brains start firing – Left, Right, prefrontal cortex etc.

The countermeasures we select are usually simple and clear.

There’s usually a sense of release. “Of course! Why didn’t we see it before!”

As opposed to the ponderous, countermeasure-by-committee stuff that blights so many report outs.

So how to reduce Scatter?

Lean fundamentals like visual management and Leader standard work are a good start.

Veteran Lean companies like Toyota have developed the Chief Engineer role in Design, and Key Thinker (aka Deployment Leader or Pacemaker) role in Strategy Deployment.

Their job is to oversee & manage broad PDCA cycles – and to record & share the learning.

There are all a good place to start in your never-ending battle with Scatter.

Best regards,

Pascal


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By Pascal Dennis (bio)

To paraphrase Kurt Vonnegut, "any scientist who can't explain to an eight-year-old what he's doing is a charlatan." This principle is especially true in strategy, perhaps our most human management activity.

Artificial Intelligence & Robotics can eventually handle many jobs, but can they make & deploy strategy? Can they motivate a team to be better than it's parts, to rise together in some great endeavor?

"How will you win? What is the logic?" I`m a proverbial broken record in strategy sessions. It's remarkable how difficult we find these questions. We've been taught that complexity is profound. In fact, it's a crude state. Simplicity, by contrast, marks the end of a process of refining.

The late great physicist, Richard Feynman looked and talked like a New York City cabbie. His Caltech freshmen lectures in Physics, and all his books are classics for their simplicity & humor.


How did Feynman achieve that level of clarity? Through slow, patient reflection, by turning a problem over and over in his mind until a 'simple' explanation suggested itself.

And that's where the shoe pinches in our time-starved era. Who has time to turn a problem over and over in their mind these days? Who has the time, as Einstein did, to imagine himself riding a light beam - so as to makes sense of time and gravity and light?

Which invokes the second great law of strategy: less is more.

Knowing we'll be time-starved, please let's not over-fill our strategy plates, like teenagers at a buffet. "First we'll do this, then this and this and that over there. Oh, and then we'll..."

One of the many benefits of Lean Start-up and Design Thinking is that they force you to simplify and clarify your offering. We test our 'Minimum Viable Product', on the way to our 'Minimum Viable Company'.

Similarly, in strategy, we want to deploy our 'minimum viable plan', watching carefully what happens, and ever ready to adjust to the inevitable 'known, and unknown, unknowns' that confront us.

Breakthrough entails walking up the stairs in the fog, continually making & easy quick experiments, most of them yielding a negative result.

Best wishes,

Pascal


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