Lessons in Lean

Where Problem-Solving Goes Wrong: Helping People Learn A3 Thinking

noreply@blogger.com (Gregg Stocker) — Wed, 07 Nov 2018 07:39:00 +0000

In a previous post, I presented the idea that problem-solving, although critically important to an organization’s success, is not given the focus it deserves. As a result of this, few problems are addressed effectively, leading organizations to face the same issues again and again.

Just like learning tennis or golf, improving the ability to solve problems requires three basic elements: (1) the desire to learn; (2) an effective coach; and (3) a lot of practice. This post will focus on the second element, coaching, and how to identify areas in a problem-solving effort where coaching is needed.

Before digging in to specifics of how to identify the gaps in a problem-solving effort, it is important to note that I use the term “solve” for convenience only because one can never be certain that a problem is truly solved. The best anyone can do is develop and implement countermeasures that appear to address the current situation in a structured and fact-based way.

The Red Flags

The red flags of a problem-solving exercise are based on the Toyota Business Practice (TBP) 8-step problem-solving process (shown above) and uses the A3 to identify the coaching opportunities. Detailed explanation of the 8-steps is readily available on the internet and in numerous books on lean thinking, so I am going to focus more on helping a person or team understand where the effort could be improved.

Whenever someone asks for input on a problem-solving A3, I tend to look for the red flags or areas in each section where help is most commonly needed. The key is to help people understand that the process is about investigating, reflecting, and learning, not filling in the form. It is far too common, especially early in a person’s development, to force fit information into the boxes just to appease someone else and show that the process was followed. The coaching effort must help people realize that following each of the steps as intended will lead to learning and developing countermeasures that have a high likelihood of success. I also keep in mind that, although there is no “right” answer to addressing a problem, there are definitely wrong answers, i.e., those not based on facts and gemba visits. An effective A3 is easy to follow and clearly demonstrates that learning occurred between each step as the team zeroed in on the cause and countermeasures.

The figure below is a problem-solving A3 template with the red flags noted in each section. For additional descriptions of the potential problems listed, refer to the summaries of each step below the A3.

Step One: Clarify the Problem

It is difficult to argue that one step in the process is more important than the others but, since each step builds on the previous step to develop the story, any problems with the first box greatly interfere with the rest of the effort. One of the most common issues that shows up in box one includes failure to show the importance of the problem by ignoring the connection with higher-level objectives. Another common problem is using a lot of text to define the problem rather than a simple description or numbers. There is generally an inverse relationship between the amount of text on an A3 and the quality of the effort.

Many people also tend to confuse a root cause with a problem statement. The problem is the basic issue that initiated the effort and is usually stated in terms of a lagging indicator, which must be clearly understood to get to the root cause.

Step Two: Breakdown the Problem

The breakdown of the problem is where the issue is dissected in order to better understand what happened and focus on the most important element to address. This is difficult for many people because of the desire to solve the entire problem rather than a smaller, more focused issue. It is important here to understand all the issues related to the problem so the highest priority can be addressed first. After the most important issue is solved, the team can return to the next most important issue, thereby chipping away at the problem.

Step Three: Set the Target

Since the information in each step builds on the previous one, there should be a logical connection between the breakdown and setting the target. It needs to be clear why the team selected the problem and target and it must be based on the information and analysis in step 2.

Step Four: Determine Root Cause

In this step, it is critical that the team starts with the problem exactly as written in box 3 to maintain the logical thread between steps and that the effort is based on facts and the knowledge of those closest to the relevant process.

Step Five: Select Countermeasure

The biggest problem in step 5 is listing a single versus multiple proposed countermeasures – often a clue that the team had the answer in mind when they started the effort. Truly following the process requires the team to reflect on the root cause when determining possible countermeasures. When this happens correctly, there are usually a couple alternatives from which to choose.

Also, the action plan should be related to implementing/testing the selected countermeasure. Often, the action plan hints at collecting more information to verify or determine the root cause rather than specific steps to address the root cause. If this is the case, the team needs to return to step 4 to better define the root cause.

Step Six: See Implement Countermeasure

There is often a lot of activity going on in most organizations, and people lose focus and interest in implementing the plan they developed. The team should have a metric somewhere showing the status of the countermeasure implementation. If they do not have a metric, it is very easy for other priorities to interfere with the implementation and the prior work done on the problem will be lost.

Step Seven: Monitor Results

The biggest issue with this step is a blank box on the A3, showing that the team lost interest in the effort.

Step Eight: Standardize Successful Processes

As with step 7, the team needs to find a way to standardize the countermeasures that successfully address the root cause. If they don’t do this, then the improvement has no chance of being sustained.

Structured Problem-Solving: Rarely Given the Attention it Deserves

noreply@blogger.com (Gregg Stocker) — Thu, 11 Oct 2018 06:58:00 +0000

There is little argument regarding the critical role that structured problem-solving plays in a lean transformation. Besides the business results associated with solving problems, developing problem-solving skills increases learning, drives the desired change in thinking, and helps people more clearly understand how lean works as a system. With this said, however, it is amazing how little effort many organizations put into developing effective problem-solving skills. It seems like more time is spent on things like 5S, value stream mapping, and other tools that are generally considered easier to apply and less likely to be met with resistance.  As a result, transformation does not occur, improvements are not sustainable, and the big gains possible through lean thinking are never achieved.

Structured problem-solving requires an internal reprogramming for most people. Fighting the urge to move ahead without clearly understanding the problem, breaking down the issue into smaller problems to better understand the situation, and developing a logical root cause based on the 5 whys are not things that come naturally to most people. Because of this, developing problem-solving skills requires changing the way people think rather than merely teaching them a new tool. This is difficult when the person is willing to change, but most people are not, which makes the effort even more complex.

In my experience, I have found four main issues that lead to poor problem-solving in an organization. I’m sure there are more but understanding these four will at least provide some direction regarding where to focus when the culture is not transforming the way it should.

1.  Most people think they already know how to solve problems. Helping people understand and apply structured problem-solving is not as simple as teaching the steps and letting them go solve problems. Most people think they have been doing a good job solving problems for years and do not feel they need to change. For many of these people, however, problem-solving means adding inspection when a defect occurred, firing an employee who wasn’t performing, or pressuring suppliers to reduce prices when costs got too high. They felt good about these things because it showed they acted quickly and appeared to directly addressed the problem. Unfortunately, their actions mitigated the symptoms and provided temporarily relief rather than solved the problems. Helping people understand this requires getting them to realize something they have done in the past – and likely still do – was incorrect. This is not easy to do and requires building trust, a good deal of communication, and the ability to challenge effectively. To compound the problem, there is no one-size-fits-all approach to helping someone transform the way he or she thinks and approaches problems.

2.  Many lean professionals and consultants don’t understand problem-solving well enough to drive change. It is unfortunate, but many of the people charged with driving the change in thinking do not have a clear enough grasp of problem-solving to make it happen. This tends to result in a heavy emphasis on the simpler tools to drive the transformation and, although they may show some early improvement in results, the ability to sustain them or address the truly significant problems facing the organization never happens. Another sign identifying a knowledge gap in those facilitating the effort is the tendency to address every problem with an A3 when, in fact, most problems do not require this level of effort.

Selecting someone to facilitate a lean transformation is a very important process. One way to improve the chances of success is to show the candidate a critical problem the organization is facing and asking how he or she would address it. If the candidate cannot quickly and clearly provide the approach, including the role that coaching would play, he or she likely lacks a deep enough understanding of structured problem-solving to be successful.

3.  A lack of patience and persistence in driving the change. Changing the way people think takes time and persistence. Failing to understand this and expecting quick results will lead to failure. Even the small, one-time problems that do not require an A3, for example, still require structure. The objective in developing problem-solving skills, regardless of how simple the problem, must be focused on helping people learn the process, which includes clearly defining problems in terms of not meeting a target or standard and conducting a 5-why exercise to logically determine the potential root causes, and the more you can do this with small problems, the more people will be able to apply it to larger, more complex issues later on.

4.  Leaders do not support the change. Addressing an issue like this would not be complete without mentioning the “L” word . . . leaders. Leaders must be closely involved in the transformation and learn structured problem-solving themselves if the effort is to have any chance of succeeding. They must learn it deeply enough to become the teachers and, most importantly, model the behavior when facing problems. Asking people about the expectation or standard that was not met when a problem occurs and following a 5-whys approach to guide the conversation when someone jumps to a countermeasure must become a normal leader behavior.

DIFFICULT BUT NECESSARY

Although critically important, developing effective problem-solving skills throughout the organization is not an easy thing to do. Success requires a coach with a lot of experience in solving problems and a good understanding of human behavior. It is something that must be done face-to-face where the problems occur rather than in a training class or conference room. Although not easy, when the team starts to develop a good understanding of structured problem-solving, the pace of transformation will accelerate. Even the "simple" tools like 5S start to have more meaning to people as they see how these things connect to the other tools and elements to improve quality and the flow of work.

Innovation: Without it, You're Not Doing Lean

noreply@blogger.com (Gregg Stocker) — Sun, 09 Sep 2018 06:24:00 +0000

There seems to be a common misconception that lean thinking and innovation somehow conflict with one another. Many companies approach innovation as something completely separate from lean in order to prevent concepts like standardization and stability from stifling creativity.

This is unfortunate because innovation not only fits but is actually a significant part of a lean system. Failure to integrate innovation into a lean journey will lead to missing out on many of the big gains that are possible with the strategy and hurting the organization’s long-term competitiveness.

THE CONCEPT OF IMPROVEMENT

At its most basic level, improvement consists of two elements: problem-solving and breakthroughs. Problem-solving involves addressing a drop in performance with the objective of returning to the way things were before the problem occurred. This is critically important for maintaining performance by increasing the stability of processes and systems. Most organizations, however, stop their lean efforts there and fail to significantly improve because of a lack of attention to improving performance and raising the standard. As important as stability is to performance, raising the standards to new levels are just as important to long-term competitiveness.

Breakthrough or kaizen thinking deals with this to continually drive the organization’s performance to new levels. The successful application of kaizen into an organization requires the type of innovative thinking and creativity that many organizations are missing, have stifled in team members, or address completely separate from lean.

MANAGEMENT PROBLEM-SOLVING

Breakthrough can come from two sources: the vision and ideas from team members to make products better and work easier. An effective vision provides direction regarding how the company wants to perform in the future to be successful. It must be grounded in reality to some extent but also provide enough of a stretch to energize people to apply the creativity to make it happen. From this perspective, a comparison of how the company currently performs and how it is expected to perform 5 or 10 years in the future should provide a gap that needs to be addressed through creative problem-solving, or breakthrough. As a general rule, this should consume about 20% of the organization’s resources, and the closer to the customer or the company’s main business activities (i.e., the factory floor, service counter, wellhead, etc.), the more the focus on the other 80%, or operating and maintaining processes to meet performance targets, and conducting problem-solving when targets are missed. It should be noted, though, that the needs of every organization are different and the split must be adjusted to fit individual situations.

Driving breakthroughs to close the gap to the vision is basically management problem-solving and is where leaders need to spend a significant portion of their time. This is one of the many reasons why micromanagement of team members is damaging to an organization. Besides the negative effects on motivation, micromanagement shows that a leader is not developing those on his or her team to handle day-to-day problem-solving in to free up the leader to focus improving the system.

CHANGING THINKING

Problem-solving and breakthrough both usually reprogramming in the way most people think. The typical reaction to problem-solving is to immediately jump to the countermeasure. This is often due to an overloaded schedule, the need to look smart, arrogance, or many other factors that are influenced by geographic and company culture. The problem with this is that, without understanding the problem clearly, or determining the most likely root cause, the countermeasure can be incorrect and worsen the situation, or even if it does happen to work, the team misses a valuable opportunity to learn more about the product or process involved.

Reprogramming thinking to improving problem-solving requires developing the analytical skills to clarify the problem, break it down to determine when, where, and how often it happens, and using a structured way to discern the most likely root cause. Basically, people need to learn to become detectives to determine what changed since the process was meeting the standard.

Breakthrough thinking requires developing innovative or creative thinking. This involves developing the ability to clarify the need as the difference between current performance and what it needs to be to meet the new target (similar to problem-solving). It also requires learning how to reflect and observe to see what is keeping performance from improving beyond its current level and teaching people to challenge their own assumptions to better understand whether they are real or perceived, and if they are blocking new ideas from being devekioed. Breaking down the walls that protect one’s beliefs about the work is a key to increasing the flow of ideas and creativity.

Although improvements will occur throughout the journey, patience and a good deal of effort is required to develop problem-solving and breakthrough thinking because it involves reprogramming the way a person has likely thought and approached work for decades.

LEAN THINKING INVOLVES BOTH

As an organization is undergoing a transformation toward lean thinking, it is critical to think about the whole system, which includes closing gaps to the standard as well as raising the standard. Considering problem-solving only and keeping innovation separate from the effort tells people to that their ideas are not valued and to only focus on getting processes to operate to current standards.

Integrating the creativity of breakthrough thinking with the stability of standardized work and problem-solving, however, can enable the organization to tap into the big gains that most companies fail to achieve. Like most of lean thinking, however, it is a simple concept that requires patience, vision, and effective leadership to make happen.

Protecting a Lean Culture Does Not Happen by Accident

noreply@blogger.com (Gregg Stocker) — Wed, 01 Aug 2018 12:34:00 +0000

There is very little debate about the importance of culture to an organization's success, and that the responsibility for defining the culture lies with leaders. Once the culture starts to develop, though, how do you hold the gains and protect the natural tendency to fall back to the way things were before the improvements? The easy answer is that the responsibility belongs with leaders, but that does not provide enough detail to be of any use. Unless there is a clear and standardized system to protect the culture, including the methods, policies, and ability to identify new and existing gaps, the chance of backsliding is pretty high.

The culture needs to be protected by those who have the power to ensure that, among other things, leaders are fulfilling their responsibilities effectively, people are developing adequately, new hires are carefully selected and have values consistent with the those of the company, and people are being promoted for the right reasons. One team that is regularly involved with many of these areas and can ensure that they are done consistently and in a way that strengthens, rather than weakens, the culture is human resources. A strong HR team is in the best position to understand the company's culture, develop systems that protect it from damage, and help people understand the importance of following the associated standards.

AN EFFECTIVE CULTURE DOES NOT HAPPEN BY ACCIDENT

It takes a lot of work to define and create the type of culture that will help drive continual improvement and improve competitiveness. Once an organization starts making progress, however, it is very easy to slip back into old ways. Unless decisions related to hiring, promoting, and developing people are made consistently and in a way that is clearly aligned with the company's needs, the gains can easily disappear. The way to prevent this from happening is to develop standards that assure work activities protect the culture and assure that people-related decisions are made by a team that is independent with respect to personal relationships and can make objective decisions regarding a person's cultural fit or readiness for promotion.

Unfortunately, many human resource departments do not consider protecting the company's culture as a prime responsibility – or a responsibility at all. A quick Google search on the objectives of human resources identifies a lot of general statements like hiring, maintaining employment records, and providing counsel about terminating employees. Although some of these are loosely connected to protecting the culture, none that I could find mentioned it specifically. Among the likely reasons for this is that HR teams rarely have the power to challenge attempts by executives to avoid the standards. Also, like other parts of the organization, HR professionals are so busy doing their "day jobs" that they rarely step back to understand the fundamental reasons for doing the things they do.

Standards need to be designed to protect and embed the culture and, like any standard, if one person is allowed to bypass them, it will deteriorate and any protection it provides is lost. As a result of this, things move back toward the prior state and the organization's culture loses its ability to provide a competitive advantage.

WHY PEOPLE BYPASS THE STANDARDS

Bypassing the standards that protect the culture are often justified with good reasons, like needing to make a hiring decision quickly before losing a candidate or a leader promoting someone with whom he or she has worked in the past, so the person's capabilities and values are "already known." Regardless of whether the reasons appear sound or not, it is up to leaders to do their part by committing to the standards and following them every time. It is far less damaging to lose a potential candidate than to ignore a standard, go around the system, and hire someone who is not a good fit for the organization.

WHAT TO DO

Talking about the importance of culture will do little to protect it from damage. Effectively protecting it can only occur when the elements become standardized and embedded into the company's normal operation. Specifically, this requires:

Developing standards for the cultural dimensions of an organization, including hiring, promoting, training and development, etc.;
Making everyone aware of the standards, including what they mean to day-to-day business, and holding everyone responsible for following the processes (or ensuring that countermeasures are implemented when the standards cannot be followed);
Clarifying to the HR team that they have a responsibility to protect the culture by communicating and assuring compliance to, and continually improving, the associated standards (this may require development of HR team members);
Giving the HR team the power to enforce the standards in all instances;
Adding HR positions to job rotations to help key people develop a deep understanding of the standards, systems, and processes, including why they are critical to the organization's competitive position.

This does not mean that HR is the only team responsible for assuring the culture is protected. Everyone has the responsibility to follow the standards in a way that assures protection and continual improvement toward the ideal. What is does mean is that, as the official guardian of the culture, HR is responsible for many of the associated standards and has the authority to stop anyone from going around the system.

There are, of course, standards that protect culture and are not controlled by the HR team, including keeping the vision alive and relevant, helping team members make problems visible without fear, developing team member abilities to see and address problems, etc., but even these can be aided by support from HR to help leaders develop and improve the ability to make these things happen effectively.

THE ULTIMATE RESPONSIBILITY

Everyone in the company is busy working and improving their part of the system. Identifying and protecting a culture, however, applies to the entire system and requires focus from a team that has the ability to step back to think and act holistically. It is not as easy as many of the responsibilities normally associated with HR but is arguably the most critical.

When you think about it, it is not the products, services, or processes that make a company great, it is the people who develop, produce, and improve them. Without a culture that drives continual learning and lets people use their talents to create great products, services, and processes, the company has little to sustain its success. Talking about the culture does nothing – defining it in clear terms and implementing the systems that identify the gaps and protect the gains is the way to turn a soft, difficult to measure organizational element into something much more concrete.

Energy Companies Need to Stop Worrying About Oil Prices

noreply@blogger.com (Gregg Stocker) — Sat, 23 Jun 2018 05:28:00 +0000

This post was published to Avoiding the Corporate Deat... at 7:22:51 AM 6/23/2018

Energy Companies Need to Stop Worrying About Oil Prices

“It is not enough to do your best. You must know what to do, and then do your best.” – W. Edwards Deming

If recent history is any indication, energy companies expecting to survive in the years ahead are going to have to adopt a new business philosophy. As is the case with any commodity producer, market price is a factor for financial success. The problem, though, is that many companies have come to rely on it as the only factor and, as a result, surrendered the ability to control their own fate. While crude prices are contributors to financial success, they do not have to be the only factor in determining whether a producer is profitable or not. What is needed is a new business model – one that enables companies to produce oil responsibly and profitably whether prices are $70 or $30. If an energy company cannot figure out how to remain profitable in a world of wide swings in oil prices, it may as well find something else to do because its future, if it has one, is going to be severely compromised.

As companies in other industries have discovered over the years, a business model guided by lean thinking can help secure a future in a world of unpredictable and widely variable market conditions. Although the acceptance of lean in the energy industry has increased over the last several years, there is still significant misunderstanding about the need for transformation in order to achieve the level of success that organizations in other industries have experienced. After several years of failed attempts to achieve improvements through tools-focused approaches like 6-sigma – where improvement methods are placed within existing systems and the responsibility for solving problems is delegated – some organizations are starting to understand the need to apply a new philosophy that integrates improvement at all levels of the business in order to achieve the big gains that are possible in safety, environmental performance, production, and cost.

The industry is still in its infancy in understanding and applying lean to the point where it will reduce its addiction to oil price. When accompanied by true and fundamental transformation, lean can help an energy company take full advantage of the periods of high prices while preparing for the inevitable drops without feeling the need to implement drastic measures that damage long-term health.

COPYING DOESN'T WORK

Applying lean to an oil and gas producer, as with any company, requires a clear understanding of the philosophy rather than attempting to copy how Toyota – or anyone else – does it. Copying drives a focus on the tools and ignores what you can’t see – the fundamental changes in the company's systems (e.g., leadership, hiring, training & development, promotions, etc.) that are necessary for success. For years, though, Toyota provided the only real example of what many now refer to as lean, and those wanting to learn approached the deployment by rolling out tools like kanban, 5S, or value stream mapping. The problem is, without a clear understanding of lean as a system that requires transformation in the way the organization operates, the best one can expect is random improvements that are difficult, if not impossible, to sustain.

When people begin to truly understand lean, including systems thinking, psychology, and the application of the Plan-Do-Study-Act (PDSA) cycle, they begin to approach work differently, and become much more focused on what's truly important to the organization. The way people think about problems shifts and the organization starts to replace the traditionally overly complex, gut-feel, boss-knows-everything approach with a simpler, more scientific way of operating.

In the most basic terms, lean is about:

Having clear standards based on the needs of the business;
Following standardized work that enables the standards to be met;
Quickly identifying when a standard cannot be met (i.e., when a problem occurs);
Identifying and addressing the causes for not meeting standards (problem-solving);
Knowing when a standard needs to be improved and having a method for doing it.

Although it sounds simple, making the above work effectively requires transformation in many of the company's systems as well as its culture. When a company ignores the signs that its systems or culture are interfering with improvement, lean becomes a burden and is seen by many as a waste of time.

WHAT TO DO

Once people in the industry begin to understand and appreciate the various aspects of lean, including a focus on continual learning and the connection to the organization's fundamental purpose, things will start to change. The thinking that drove improvements at Toyota like reducing setup times on stamping presses from 3 hours to 3 minutes or completely eliminating wasted paint during the body painting operation while reducing color changeovers to seconds, can help contribute to greatly reducing an oil producer's cost per barrel, shortening its lead time from exploration to first oil, and significantly reducing emissions while improving safety. It won't necessarily happen in one year or even two, but the improvements along the way will show the potential of a culture that is aligned and improvement-focused throughout the organization.

Some of the keys to assuring the successful application of lean to an energy company include the following:

Leaders must understand and actively drive, rather than delegate, the transformation. To do this, they must be taught what to do, be open to coaching, and accept the responsibility of creating a culture obsessed with improvement;
Establishing a culture where continual learning and development is highly valued and expected of every team member from the newest hire to the CEO; and holding leaders responsible for coaching and developing those on their teams;
Developing a clear and consistent purpose (i.e., the mission and vision) for the organization – and staying true to the mission while ensuring that all activities are oriented toward achieving the vision, including helping everyone understand how the work they do connects to the purpose;
Designing systems that enable problems to be shown quickly and clearly, and ensuring people feel comfortable showing the problems in their areas. Any area or team that does not have problems only means that they are not being shown, which is likely caused by cultural reasons;
Ensuring a single clear and consistent approach to lean. Do not allow alternate training or tools to come into the organization unless it is driven by, and clearly connected to, the deployment. Do not let anyone add confusion by introducing new tools or methods that do not fit within the standard approach.

When deployed correctly, lean entails a vastly different approach than most people are capable of understanding at first. Through real-world practice, effective coaching, commitment, and patience, people will start to understand and see the big gains that are possible through an effective transformation. As the organization starts to unleash the talents of its people through the combination of daily problem-solving and breakthrough thinking, the ability to create an organization that improves profitability by producing energy safely, cheaply, and responsibly regardless of the price of oil will become a reality, and rather than blank stares, eye-rolling, or resistance when concepts like perfect safety, drastically shortened lead times, or zero emissions are presented, people will become energized and focused on making them happen.

Problem-Solving & Kaizen: Are They Different?

noreply@blogger.com (Gregg Stocker) — Tue, 05 Jun 2018 05:43:00 +0000

One of the most important – and elusive – objectives of lean is creating a culture of continual improvement throughout an organization. In most cases, this requires changing the way people think and approach their work, and although helping people transform is never easy, it becomes even more difficult when those driving lean are not clear about the different types of improvements and how to approach each. Solving a relatively small, one-time problem, for example, requires different thinking than reducing fixed costs across the operation by 20%. It is far too common, though, to attempt both by using the same process - i.e., handing someone an A3, telling them to "do a kaizen," and asking them to complete it. Besides the wasted time this can cause, it can confuse and frustrate the person being coached.

The objective of this post is to provide some clarity about the different types of improvement. Although the subject often leads to considerable debate and disagreement, I believe it is an important one, and something that lean professionals need to understand to help move an organization toward a sustainable culture of improvement.

The Different Levels

As shown in the diagram, there are 3 basic levels of improvement within an organization. The two lower levels deal with solving problems, i.e., a situation where actual performance does not meet a standard. This assumes that the process or activity is capable of meeting the standard and has done so in the past, thereby focusing the effort on analyzing what changed or what recently occurred that had not been seen before.

The third level, breakthrough, involves raising the standard to a new level to meet current or future business needs. Doing this successfully often requires the ability and willingness to question previously held assumptions, and applying creativity to drive step-changes in performance.

In practice, this means that each requires a different type of thinking. By looking for clues regarding what went wrong, problem-solving requires analytical thinking, whereas a breakthrough, by attempting to challenge the status quo and develop new ideas and approaches, requires creative or flexible thinking. Both are needed for an organization to be successful, and both often require effective and consistent coaching to prevent people from being confused.

Because of natural forces and overall effect on the organization, there tends to be significantly more activity at the bottom of the pyramid than at the top, while, although fewer in number, efforts at the top of pyramid tend to result in more effort and a larger gain.

Daily Problem-Solving

Daily Issues
The most common and basic type of problem people face are the daily issues that are often small, one-time annoyances that, although still requiring action, have less effect on the system than the more complex and repeatable issues that the organization faces. These daily issues still require countermeasures because they interfere with the ability of people to do their jobs easily. Additionally, if we ignore them, we are showing disrespect to the people affected and sending the message that waste is acceptable. Addressing them also helps people begin to develop structured problem-solving skills in a fairly simple and easy way.

Those addressing daily issues are still expected to develop a clear statement of the problem, root cause analysis based on 5-whys, and a countermeasure that proves effective in addressing the root cause, but not to the level of a more complex problem being addressed with an A3.

The daily issues are often addressed by those closest to the process who face the problems firsthand and, because of the nature of their jobs, do not necessarily have the time to step back and look for trends and connections between the problems that occur. As with all levels of the organization, the team lead or supervisor is expected to coach and develop the ability of team members to identify and address the problems they face.

Efforts to address daily issues should be documented on a card or simple electronic system to use for coaching, collection of data, and as a means to assure that problem-solving is occurring. Care should be taken, however, to ensure that documenting the effort does not become a burden or the benefits in terms of developing analytical thinking across the organization will suffer.

8-Step Problem-Solving

Whenever a one-time issue recurs or appears on a dashboard as a gap or trend, more structured problem-solving efforts are required. For these issues, an A3 is necessary to assure that the problem is effectively defined, broken down, and addressed. Although it can still be done quickly, the effort is often coached more closely and focused on developing skills more deeply. Rather than a simple 5-whys exercise to determine a root cause, for example, an A3 problem-solving effort would require additional answers for each "why" and verification with data and visiting gemba to see firsthand before moving forward. Since an A3 effort often involves addressing a problem that is fairly complex and/or large, there is also an expectation that the problem is broken down into more specific and actionable issues to be addressed one-at-a-time.

Breakthrough: Raising the Standard

Within any business, there are times when the existing standard is not acceptable. Where problem-solving requires analytical thinking to understand what has changed and how to get a process back to where it once was, breakthroughs often need creative ideas to make the type of changes that will raise performance to a level not experienced before. Doing this successfully requires challenging assumptions to separate fact from deeply held opinions.

In spite of what many people think, everyone has the ability to think creatively and develop innovative approaches to business. The key is to coach and develop people to access and hone creative powers – something that is admittedly not always easy to do. The more experience one gains in a particular field or organization, the more the person tends to stick to what he or she already knows – or at least thinks he or she knows – becoming more and more set in one way of thinking. Success with breakthroughs requires breaking down this defense to get people to begin questioning what they accept as fact to see when it is actually nothing more than a strong opinion.

Analytical thinking, although critical for problem-solving, will rarely lead to innovative breakthroughs required to keep the company moving forward. In his book, Elastic: Flexible Thinking in a Constantly Changing World, Leonard Mlodinow writes that innovation requires "bottom up" thinking driven from inside the person versus the "top down" outside-driven thinking generally required for problem-solving.

An important point about the balance of analytical and breakthrough thinking is that a company cannot use innovation to stay ahead of quality and productivity problems. There must be a solid foundation of problem-solving and stable processes upon which to build and hold the breakthroughs.

Both are Required

What makes lean powerful, the combination of analytical problem-solving and innovative thinking, is also what makes the transformation so difficult. Understanding the different dimensions of improvement is fundamental to assuring a successful journey and avoiding the confusion and frustration that many companies experience.

Lean by Playing One Point At-a-Time

noreply@blogger.com (Gregg Stocker) — Tue, 13 Mar 2018 07:12:00 +0000

"One thing that makes Chris [Evert] such a great champion, is that she doesn't play games or sets, she plays points." – Billie Jean King

I've played tennis most of my life and learned many years ago about the importance of the mental aspect of the game. One thing that particularly impressed me early on was the ability of Chris Evert to maintain an intense level of focus regardless of the score. Whether she was winning handily or losing badly, her expression and focus did not seem to waver. This ability helped her come from behind on many occasions and beat her opponent, even when it appeared that she had no chance of winning. Her focus was never the match, set or game, but the point. Her strategy was based on the idea that points mattered, not the score, and by focusing on winning each point, the matches would take care of themselves.

I didn't know it at the time but this greatly helped me to understand lean thinking. Keeping the focus on what's happening right now, whether a machined part, assembly, customer interaction, or drill bit location, helps drive improvement by immediately seeing when something goes wrong. When we become distracted by the overall score – the monthly or annual budget – we miss the little things that happen every day and every hour that add up to poor long-term performance.

At its most basic level, lean involves setting standards and addressing the problems that interfere with meeting the standards. This means that, to make lean work, we must: (1) have standards; and (2) provide an easy way to know when the standards are not met. It is a simple concept but is very difficult to put into practice. Company culture, leadership systems, and human behavior often force people to worry about the big picture and forget that the results consist of many small processes and interactions. As a consequence, people ignore the small problems and fail to see that spending 5 minutes looking for a tool, for example, has an impact on missing a monthly or annual production target.

It Starts with Leaders

For a variety of reasons, leaders tend to focus on the big picture and ignore the small problems. What is often forgotten, however, is that the big picture includes creating an environment where everybody identifies and addresses problems every day. By showing concern only about the big gaps in performance, leaders are telling people that the small things don't matter. As an example, although missing a bolt to complete a job can be a headache for a person in the factory, a leader may decide that it is not significant enough to spend time helping the person understand the cause and develop a countermeasure for the next job. The message that some problems are important to fix while others are not sends mixed messages about the importance of problem-solving. In effect, the leader is losing points while thinking about the match.

Changing the culture requires helping people understand that every instance where a standard is not met is a problem and needs to be resolved. Doing this requires spending time at gemba to see when it happens, helping people recognize the small problems that happen (or validating that the problems are important enough to address), and coaching people to effectively solve problems. The objective is to get people solving the problems they face every day.

Changing the Daily or Weekly Standup

Another way to help change the way people think about problems is through the daily or weekly standup meetings. A traditional standup meeting reviews how the team performed since the last meeting, e.g., what problems interfered with achieving the plan discussed in the previous day's meeting. When the discussion is distracted by the annual or monthly budget rather than what happened yesterday, important information is missed. Achieving the budget is obviously important but since meeting standards is the way to achieve the budget, the focus needs to be on what got in the way of meeting standards. When the focus is the budget, the team misses a critical objective of lean: solving problems and performing better every day. In tennis, the standards include things like the stroke, footwork, and ball placement. It is these things that enable a player to win points through an intense focus on doing them correctly and making adjustments when problems happen rather than looking at the score. In work, the standards and associated instructions are the stroke, footwork, and ball placement.

When a company's culture suffers from an attention deficit disorder (a common condition in many organizations) its inability to see the small problems interferes with the daily problem-solving required to continually improve and create a system capable of meeting the budget. By allowing this to continue – i.e., worrying more about the score than the point or the shot – the gap to the budget will continue to grow because the problems are not being addressed. It is also far easier to address the small problems every day than to attempt to take on the entire gap between actual performance and the annual budget.

Focus on the Points

University of Alabama football coach Nick Saban once said, "the process is really what you have to do day in and day out to be successful." In lean terms, he's referring to understanding and continually focusing on the standards. When the focus is results rather than the work that produces the results, standards become meaningless, problems become too big to address, and the gap continues to grow. Besides the fact that it is far easier to identify and correct gaps to meeting a standard than missing a monthly production target, the more people address problems – regardless of how small – the better they get at problem-solving. I've learned the hard way many years ago that my chances of coming back from a 5-1 deficit are much better when I focus on the next point than worrying about winning the next six games.

Do People Feel Comfortable Showing Problems?

noreply@blogger.com (Gregg Stocker) — Wed, 14 Feb 2018 06:17:00 +0000

One of the most common obstacles to successfully deploying lean is failure to appreciate the level of transformation required in behaviors and systems. Far too often, companies attempt to implement a variety of lean tools on top of traditional systems and behaviors and are disappointed with the results.

Among the many behaviors that require transformation for lean to work effectively is the need to make problems visible. Since lean is heavily focused on continually comparing actual results to standards and addressing the issues that cause gaps between the two, it can only work when problems are highlighted quickly and honestly.

Is it Really That Difficult?

Assuring problems are visible makes perfect sense and is something many organizations mistakenly believe they already do. For a variety of reasons, showing problems is not something that does not come naturally to many people. It is more natural to hide – or at least not openly display – problems with the hope they can be resolved before being discovered.

It is important to understand the reasons people hide problems and to realize that transformation is required in order to make it okay – and even an expectation – to show problems quickly and clearly.

Why do we Hide Problems?

Although there are a number of reasons that people don't feel comfortable showing their problems, a few tend to show up more than others. The first is a fear of looking incompetent or unable to do the job effectively. Whether the result of a highly competitive culture, overreaction of leaders to problems in the past, or something built into the person's emotional makeup, some people will not feel comfortable openly showing problems. Even when internal competition is not openly encouraged, a history of promoting people who hide problems or twist the story to make it appear that things are under control can cement the idea that it is not okay to openly discuss problems.

Another cause of hiding problems is the fear of getting "help" from people who don't understand what's really happening in the workplace. Some leaders feel that it is important to have all the answers and will regularly offer solutions to the problems without having all the facts. When the leader is disconnected from gemba, this leads to frustration in team members because they will feel compelled to follow the proposed solutions even when they know they won't work.

It is perfectly normal for people to want to show that processes are running smoothly and things are under control. Because of this, it is up to the company's leaders to continually instill the idea that highlighting problems is not only acceptable but expected within the organization. This means that there should never be negative consequences for making a problem visible. On the contrary, it should be made clear to everyone that hiding problems or failing to take action to address them is an unacceptable behavior.

As leaders are able to create the culture that it is okay to make problems visible, there are three common ways to help people show problems quickly and clearly: alarms or andons, dashboards, and meetings.

Andons

An andon signal is a way to immediately show that some aspect of work is not meeting standard. Andons are perhaps the most effective way to show problems because they are designed to highlight a problem immediately and at the point where it happens. Examples include ropes or buttons in the factory where people can signal a problem as it happens, or sensors that detect problems immediately (e.g., retrieving components for an assembly in the incorrect sequence by sounding an alarm when the operator reaches into an incorrect bin).

The keys to making an andon successful include having clear standards, enabling quick notification, providing immediate help, and recording the problems for longer-term problem-solving.

Dashboards

A key objective of a dashboard for an area or process is to clearly and objectively show the gaps between expected and actual results. Hiding the gaps or continually putting a positive spin on how things are going misses the opportunity to align team members on what's important, and the problems that require attention.

Posting charts that track what's critical for an area help keep people focused on how a process is expected to perform and, the more sensitive the chart, the more quickly action can be taken when a gap occurs.

Dashboards become ineffective when too much data is displayed or the charts lack simplicity. Think how difficult driving would be if the dashboard in your car contained 10 or 12 gages with a variety of information on each. The same applies to a dashboard for a work area. Keeping it simple and clearly connected to company or system targets is a key to assuring it is effective.

It is also critical to keep dashboards easy to maintain. Too often, people create multi-color, three-dimensional charts that show too much data, making the charts become nothing more than eye candy. The purpose of a chart is to highlight problems, not prove how adept someone is at creating graphs.

Meetings

Many companies waste a lot of time in meetings talking about what is going well. Performance is reviewed and discussed – sometimes in excruciating depth – even when processes are on-target. People learn to dread meetings and use the time to catch up on email, Instagram, or the latest headlines on their phones.

The more daily and weekly meetings are focused on gaps - existing and potential - the more engaged people will be. The dashboards should drive the meetings and, the better the dashboards, the quicker people can zero in on the gaps and talk about what is truly important.

When teams do this well, they begin to take advantage of the collective knowledge of the team by focusing on improving performance. If they dance around the real issues by ignoring the gaps and continually putting a positive spin on how things are going, they miss opportunities to build teamwork and address the real problems.

The Problems Are There - Why Not Look at Them

Every organization has problems, and a key determinant of success is how well the problems are addressed. Openly showing the problems is the first step to resolving them. Getting to this point, however, often requires shifting behavior to make it okay – even expected – to look for the gaps.

Stop Judging - Start Leading

noreply@blogger.com (Gregg Stocker) — Sun, 04 Feb 2018 10:26:00 +0000

Much has been written over the years about the destructive effects of the traditional performance rating systems used by so many organizations. It's a process that most people do not like but nevertheless continues to be an important part of the HR systems of many organizations. In a study conducted by CEB Global (now Gartner), 21% of nearly 300 companies surveyed worldwide have dropped or are planning to drop the practice of assigning performance ratings to employees. If this is representative of business in general, it means a vast majority of companies still use ratings.

The idea of eliminating ratings has gained increased attention in recent years but many appear to be apprehensive of dropping the process because they don't know what to do instead to provide feedback to improve performance. According to the CEB Global study, though, employee performance has actually dropped in those companies that have eliminated ratings. My fear with reporting study results like this is that people – especially those who favor rating employees – will see it as proof that the process needs to continue. Upon further reading, however, it is noted that it is management practices and leadership skills that cause the problem, not the elimination of the ratings process itself.

There are many compelling reasons to eliminate performance ratings that greatly outweigh any that seem to support continuing the practice. The reasons are not new but, as long as they continue to be ignored, each significantly interferes with transformation and sustained levels of improvement. Like any process or system, we should never look at the performance rating system in isolation of organizational performance. Too many managers look at the performance review process as if it has value by itself and keep it disconnected from where the organization is going or what it is trying to accomplish.

Problems with Performance Ratings

There are several problems with assigning ratings to people that hurt, rather than help, performance. These problems have been discussed and written about for many years but, due to the continued popularity of attempting to rate individual performance, need to be revisited every now and then.

Manager Responsibilities Ignored – Ratings put the responsibility for development completely on the team member rather than the leader, who has an obligation to provide coaching to employees. We somehow have an assumption in business that becoming a manager automatically means one can give proper and effective feedback to team members, which is not the case;
Inconsistency – Since the ratings are assigned by people, there is a level of inconsistency that comes with human intervention in the process. Even when there is a larger calibration session consisting of a team of leaders that review the numbers and force fit ratings into a normal distribution, there is inconsistency in the ratings assigned and feedback given. Like any type of meeting, group calibration sessions tend to be dominated by the loudest and most aggressive leaders. Another problem is that many of those who participate in the sessions have little knowledge of how most of the individuals being assessed performed – or even what they do;
Unclear Expectations – A significant problem in many organizations is the lack of clear expectations for people. There is often an attempt to assign objectives at the beginning of the year but there is an inconsistent understanding of the purpose and expected result of the objectives, and they tend to ignore the person's everyday responsibilities which can easily interfere with larger objectives.;
Conflicting Objectives - People are generally smart enough to meet objectives or at least provide some evidence to show they did whether or not it actually helped the organization. Objectives are often assigned in a vacuum, i.e., supply chain reducing price of incoming materials, customer service increasing the number of customer calls handled, etc., and in most organizations, there is little effort to assure they are aligned and truly focused on achieving the organization's purpose.
Lack of Systems Thinking – Most leaders fail to appreciate how much the overall system affects the performance of the organization, and that it is their responsibility to develop and maintain the system. If they did understand, they would never put so much effort on trying to "fix" the part of the organization that accounts for less than 3-4% of the company's performance. Performance ratings assign blame to people who are likely attempting to work in a flawed system, and those who receive higher ratings are often working outside of the system, something that should never be encouraged. I once worked for a CEO who gave each of us on the management team a mirror and told us whenever we had an employee who underperformed to look in the mirror to see who is truly responsible for the underperformance.

FIND THE CAUSE AND FIX THE ISSUE

The CEB report, along with several other studies on rating systems and performance in general, point to leadership issues as the main cause of performance problems. When a new employee is hired, that person is generally enthusiastic on his or her first days with the organization. When that person starts to "underperform" or show attitude problems, though, rather than punish or threaten the person with a poor rating, we should try to figure out what has changed. In most cases, we will discover that it is the person in the mirror who is responsible for the underperformance.

It comes down to helping leaders understand that their job is to coach and develop rather than judge. Spending time clarifying this to leaders and helping them learn how to do it would be a far better use of everybody's time than assigning numbers to people.

We Don't Make Cars: Applying Lean to Other Industries

noreply@blogger.com (Gregg Stocker) — Mon, 29 Jan 2018 11:07:00 +0000

People don't go to Toyota to work, they go there to think" – Taiichi Ohno

Although much of what we now call lean has been practiced by Toyota and its suppliers for decades, most of the world began to learn about it in the 1990s with books like The Machine that Changed the World and Lean Thinking. It has been more than 25 years since then and, although companies in a variety of industries are well into their lean journeys and showing positive results, there are still many people who have trouble thinking beyond lean as a strategy for high-volume or automotive manufacturing.

As someone who has worked in a variety of industries, I have encountered difficulties applying lean thinking in certain situations, but it was due more to cultural reasons than industry differences. Regardless of the industry, if the organization has an aim and uses processes to achieve that aim – and they all do – lean thinking applies. Lean is about continually thinking, learning, and getting better about what you do; not about producing cars. If your processes are not perfect, you don't already know everything there is to know about your business, or change regularly occurs in your organization or industry, then lean can help.

During my early days in oil and gas, I got a lot of pushback about the suitability of lean to the industry. When I heard the "we don't make cars" argument, my response was usually if Toyota produced oil & gas and we made cars, we would say lean applies only to oil and gas. The same goes for any industry.

It's Always Easier Somewhere Else

It is common to talk to people in various industries who believe that lean applies easily to other industries but is much more difficult in their own. Even within an industry, I've met people who believe their own circumstances are so unique that, even though other organizations or areas may apply lean thinking fairly successfully, it does not fit their own situation.

Getting people past the notion that lean will not work in an organization or industry requires continual coaching, demonstration, and a lot of patience. It also requires educating people about the basis for lean and how it drives learning and improvement. The key is to get people to understand lean beyond the tools so they will start to see where they have gaps in performance, knowledge, and learning. A tools-focus in lean, something that is far too common, leads people to google things like 5S, value stream mapping, or SMED, and only find examples of application to Toyota or other high-volume manufacturing situations. Seeing examples like this tends to cement the idea that the practice is unsuited to their own situation.

The Lean System

Lean is about thinking and learning, and if a business is experiencing problems of any kind, there is room to learn. The basic steps to drive lean are shown below. The key to success is to use the steps to learn by doing, which requires clarity on the expected result of each decision, action, and process, and using the actual results to see where things did or did not provide results as expected.

Lean is a system comprised of several elements that work together to drive learning and improvement and, like any system, if you leave out one or more components, it won't work.

1. PURPOSE: Every organization must understand its purpose to have any chance of sustaining success. The purpose, consisting of why the company exists (the mission) and where it is headed (the vision) must drive everything it does. The key is to make it clear, a stretch (difficult, but not impossible), inspiring, and focused on providing value.

2. BUSINESS NEEDS: Visions tend to describe the future in general terms like industry-leading, most respected, improve society, etc. This is okay because what is considered industry-leading today is not necessarily what it will mean 5-10 years from now and you don't want a specific target to mislead the organization. This element of lean thinking includes the 3-5 year objectives that make the vision much more concrete. Although many industrial companies often identify the gaps in terms of safety, quality, delivery, cost, and people development (SQDCP), it is important to tailor the objectives to the organization's needs. Basically, the objectives define how the organization needs to perform in the next 3-5 years in order to remain on-track to the vision.

Also included in this element is the one-year plan that gets even more specific regarding what needs to happen in the current year to remain on-track to the 3-5 year objectives. The one-year plan identifies the current year SQDCP targets, which defines how the organization needs to perform this year given its current processes and systems (assuming that regular problem-solving will be required to deal with the daily problems), as well as the 2-3 areas where a step-change in performance is required to stay on track to the 3-5 year objectives (i.e., kaizen/breakthrough problem-solving). Using an oil and gas producer, a current year target could be production of 25,000 barrels of oil produced per day (possible with current processes and systems), while a breakthrough could be the need to reduce cost per barrel from $24 to $18 within 3 years (which would require a step-change in processes or systems).

3. STANDARDS: Once the gaps and performance targets are clear, it is necessary to identify the standards that need to be met in line with business needs. An example of standards within an oil and gas operation could be that meeting a production target requires an offshore platform to operate at 95% reliability, which, in turn, requires a maintenance technician to change a pump filter in 24 minutes. In another example, a coffee shop could determine that, to meet customer requirements, all customers must receive their coffee within 4 minutes of walking into the shop, requiring the person taking the order to select any product on the order screen within 2 seconds. Setting standards requires a clear understanding of the business and continual improvement.

4. STANDARD WORK: Standard work consists of the instructions that, if followed, will enable the standards to be met. In the examples above, instructions provide a step-by-step description of the work to be done to change the filter in 24 minutes or serve the customer within 4 minutes. Two key points about standard work are (1) the instructions should be created and regularly improved by the people who actually do the work; and (2) the instructions must be clear and simple to follow. It is also important that the standard work is regarded as the best known way to perform the work today, and must be followed until a better way is discovered and the instructions are changed.

5. ACTUAL PERFORMANCE: Learning requires clearly and continually measuring the actual performance to understand where the gaps between performance and the standards exist. If actual performance meets the standards – the pump filter is changed in 24 minutes – then the thinking returns to step 2 to continually assure that business has not changed and that the standards still meet the business or customer needs.

6. IDENTIFY PROBLEMS/GAPS: The real power of lean thinking occurs when actual performance does not meet standards because this is where continual improvement truly happens. For the business to improve, we need people to quickly speak up when problems occur. Whether through an andon signal (lights and music that immediately grab attention) or dashboards that are updated frequently, the key is to find ways to make all problems highlighted quickly. To assure this happens, leaders need to encourage and recognize team members for identifying problems quickly. Taking it one step further, making problems visible should be an expectation of every person in the organization.

7. RESOLVE PROBLEMS: Once problems are identified – i.e., actual performance does not meet the standard – there needs to be a consistent way to understand and resolve the gaps. Rather than calling on black belts to come in and lead the process, lean requires that everyone become problem-solvers. Those closest to the work need to be actively involved in closing the gaps and, to make this happen, leaders need to teach and coach team members how to do it. In many cases, problem-solving leads to changing standards and/or standard work to ensure that improvements stick.

8. DO IT AGAIN: The lean system requires that the process never ends, so the team needs to continue to review business needs, set and revise standards, identify gaps in performance, and solve problems.

Not as Easy as it Sounds

Although following the lean system as described above appears fairly simple and straightforward, it is anything but easy. Each step requires transformation in leadership, thinking, and culture to be effective. Two areas that generally require significant change include transforming managers into coaches and making a culture where it is safe – and even expected – to make problems visible.

The all-too-common approach of focusing on the tools will make the application of lean to other industries difficult – if not impossible. Focusing on the philosophy and transformation in the way people think and approach the business, however, will make the application to other industries far easier and significantly more successful.

The Lean Journey Starts with Appreciating the Business as a System

noreply@blogger.com (Gregg Stocker) — Wed, 03 Jan 2018 07:48:00 +0000

“There is not a day I don’t think about what Dr. Deming meant to us. Deming is the core of our management.” - Shoichiro Toyoda

According to W. Edwards Deming, the first thing he did when meeting with Japanese business leaders in 1950 was draw a diagram of a business as a system on the board (shown below from Out of the Crisis). It was a simple diagram – almost too simple for many to understand its profound significance. So, what is it about this diagram that literally changed the world and helped some organizations develop competitive advantages that they were able to sustain for many years?

At its most basic level, the objective of the diagram is to show that every business is a system and needs to be managed as such. When most people hear this, they nod their heads in agreement as if it is nothing new. After looking at the way many organizations are run, however, it becomes obvious that the concept is still not well understood.

When viewing a business as a system, it becomes clearer which common business practices actually interfere with long-term success. In fact, the more one learns about systems thinking, the more obvious it becomes that the chance of achieving any level of long-term success without it is very small.

Every System Must Have a Clear Purpose

Every business exists to achieve an aim and uses a series of handoffs, processes, and subsystems to achieve that aim. Sounds simple enough but in many – possibly even most – companies, this is forgotten or never truly appreciated. In far too many organizations, the aim is not clear, not constant, or too heavily focused on monetary gains. Without a clearly stated and unchanging purpose that is focused on value and meaningful to everyone, people will define it on their own, leading to conflicts, waste, and significant losses. Deming went as far as to say that without a purpose, there is no system.

I consider the aim to be comprised of the mission (why the organization exists) and vision (where it is headed). In practice, this means that the organization must stay true to its mission while assuring all targets, objectives, and activities support achieving the vision. In the most advanced lean thinking organizations, this is much more obvious than in other companies.

The Interactions Must be Clear and Continually Improve

In addition to assuring the aim is clear to everyone in the organization, the interactions between each person and team needs to be clear and continually improved. Organizations operate in a highly complex manner and gaining an understanding of the interactions and how they create value for the customer is a difficult but necessary task.

A critical point about systems is that every person in the organization must understand how the work they do contributes to the aim. This means, for example, that a Maintenance Technician understands his or her role is to assure machines are capable of producing parts of the right quality when needed. To do that requires high reliability, fast turnaround for maintenance and repairs, and helping the machinists understand how to perform routine maintenance activities quickly and effectively. Managers have the responsibility to help team members understand their work to this level of detail, including developing an understanding of whom they support in the overall system.

Standards must be established to clarify the work and the interactions and clearly communicate to people what is needed to assure materials and information move through the system to produce value consistently. Whenever the standards are not met, problem-solving must be done to understand why and to make corrections.

Leaders Must Understand the Level of Complexity

Appreciating systems goes beyond understanding the interactions that take place throughout the organization. It includes the understanding that the results of actions are not always simple and easy to determine. For example, forcing the supply chain team to reduce the cost of incoming materials can result in increasing overall costs for the company, even though logic would dictate otherwise.

Organizations are complex, and the larger the organization, the more complex it becomes to understand the effect of a decision or action. Large-scale changes can, and often do, have damaging effects that are difficult to predict beforehand, and are not easy to understand afterwards. All changes must be accompanied by an expectation of the effect on the organization, and results must be continually checked against the expectations to drive learning and help improve understanding of the system.

Fragmented Thinking vs Systems Thinking

The more one develops an understanding of systems thinking, the clearer it becomes that many commonly accepted business practices hamper, rather than help, improved performance. An example is the heavy focus placed on individual performance by most organizations. Systems thinking naturally puts the accountability for performance on the system to a much greater extent than on the individual. Deming used to say that 94% of the problems a company faces come from the system (and are therefore management’s responsibility) and 6% are related to the people in the system. The time and emphasis generally put into a typical performance review system, however, shows that many of us believe the exact opposite. We rate, rank, and hold people across the organization responsible for performance in a system that is most likely flawed. In other words, rather than focus our efforts on improving the system when performance is below expectations, we assume that putting pressure on the individual will improve results, even though the person may have little or no authority to do anything other than try harder, go around the system, or focus on making it look like improvement is occurring whether it actually is.

When traditional performance reviews are combined with the process of setting objectives, the result is often optimization of one team or individual rather than the system or the organization’s overall aim. For example, a finance team that focuses on improving the closing process by requiring extra work from the operations team could result in taking time away from producing products or fixing problems and, although the books are closed faster each month, overall performance may suffer.

The typical organization chart is another example that shows the popularity of fragmented thinking. The most commonly used layout for an organization chart shows little more than who has power. Using a chart that is organized by the system (e.g., names and titles on a system diagram), however, would show where people fit in the value stream, as well as the relationships between internal customers and suppliers. It would be much more valuable to helping people understanding their jobs than a chart that shows who the boss of whom.

These are simple examples that demonstrate the destructive effects of leaders who do not understand how systems work. When the system is not understood and actively managed, priorities are unclear, causing continual conflict between people and teams, and effectively destroying the system.

Managers are Responsible to Create and Improve the System

When leaders come to the realization that creating, managing, and improving the system is their responsibility, the organization will begin to transform. The focus moves to the most important parts of the organization and people start truly working together, rather than against each other, to improve performance.

Although appreciation for a system is only one of the four elements of what Deming referred to as his System of Profound Knowledge, it is something that helps provide context for the others – theory of knowledge, knowledge of variation, and psychology – and the understanding that they must all be present and work together to drive transformation.

Why Lean Fails

noreply@blogger.com (Gregg Stocker) — Tue, 19 Dec 2017 11:32:00 +0000

Why do so many organizations give up on lean even after experiencing initial success with the effort? There are several examples of companies in various industries that experienced sustained success with lean, but these examples seem to be few and far between when compared to the large number of companies that attempt it and fail.

To be clear, lean doesn't fail . . . it's the transformation that fails. While there are many reasons for the failure, there are a few that seem to be common across various organizations. Regardless of which one or more of these reasons apply, correcting them is possible only when leaders begin to develop a deep understanding of lean and realize that the responsibility for the transformation rests squarely on their shoulders rather than something that can be delegated to lower levels in the organization.

Although the premise of lean is simple, integrating it into an organization is highly complex, and the larger the organization the more complex it becomes. Lean thinking is a system that requires understanding how the elements come together to drive continual improvement in support of the organization’s aim. The big gains that some organizations have been able to achieve with lean are only possible after fundamentally transforming the way people think, lead, and approach problems.

The list below is far from comprehensive but is meant to stimulate thinking and reflection to understand the reasons for failure and to help move toward fundamentally changing the culture to enable it to increase and sustain the rate of improvement.

Fail to understand the level of transformation required: Far too often, organizations attempt to lay lean on top of a traditional leadership system and expect things the change. It is a simple fact that nothing will change unless the leadership system changes, and failing to understand this will lead to frustration and disappointment in the effort. This is often the main reason behind what appears to be a lack of commitment by the organization’s leaders. People cannot commit to something they do not understand.
Focus on the home runs: Far too many people read about the Toyota and its rise from virtual ashes in the 1940s to become the most successful automaker in terms of sales, profit, and market capitalization. When reading an article about it or hearing someone tell the Toyota story, however, misses the point that it was the decades of small, continual improvements that led to significant step changes in performance. Although there are many examples of large innovative improvements at Toyota and other lean thinking companies, they happen because of the collective change in thinking that occurs through a focus on small continual improvements and daily problem-solving.
Focusing on financial benefits only: After experiencing a few early improvements, it is very common for leaders to become focused on the financial benefits of the effort and change their focus from learning to cost savings. When this happens, lean becomes a set of tools rather than a system of continual improvement. SQDC (safety-quality-delivery-cost) is replaced by C, and understanding the true meaning of improvement is lost. As small improvements and learning is virtually ignored and the big improvements (the home runs mentioned above) are celebrated, people will do what it takes to show big gains, whether real or fabricated, and any early success with lean will break down and die.
Focus on the tools rather than the thinking: Without a deep understanding of lean as a system and the fundamental reasons for its success, it is not possible to think beyond the tools. The tools are easy to understand while the theory behind lean is not. Leaders, especially in the west, are much more interested in things that are concrete, practical, provide quick results, and are easy to explain than organizational theory, psychology, learning, and systems thinking.
Lack of systems thinking: Unless leaders understand the complexity of the organization’s system, including how the subsystems work together to drive performance, people and teams will continually compete with one other resulting in continual performance problems and increasing sub-optimization. One of the most critical responsibilities of leaders is to create and continually improve the organization’s system to enable it to achieve its purpose. This includes helping everyone understand clearly how the work they do supports the achievement of organizational objectives.
Lack of patience: If you are looking for quick results, lean is probably not the way to do it. As mentioned above, lean requires a shift in the way people think, lead, and perform work, and it takes time – a lot of time – to make it happen. Although results will be seen along the way, there will be gaps that make it seem like nothing is happening. W. Edwards Deming once said that transformation is discontinuous, so it is important to understand that there will be many instances of two steps forward and one step back. The key is to stick with it and remain constant in the purpose and the transformation.

When any of the above characteristics are present, people who are against lean will gain ammunition to bury the effort. It is very easy for the people who feel threatened by lean to plant seeds of doubt in those who are on-board with the change. Getting past this initial stage of the transformation requires regular reflection and continual learning by leaders to see the signs and address them as they happen.

The Objective of Problem-Solving is Not Solving the Problem

noreply@blogger.com (Gregg Stocker) — Thu, 23 Nov 2017 08:11:00 +0000

"The ability to learn faster than competitors may be the only sustainable competitive advantage" - Arie de Geus

One of the misconceptions that interferes with an organization's transformation toward lean thinking deals with the objective of problem-solving. People tend to focus problem-solving activities mostly on the business result, or solving the problem, and ignore whether or not any learning occurred while doing the exercise. What many fail to understand is, when the focus of problem-solving is results, very little learning takes place, but when the focus is learning, more significant and sustainable results will follow.

It is strange to think that the main objective of problem-solving is not solving the problem, but the more one understands organizations and behavior, the clearer it becomes that sustainable improvement can only occur through continual team learning. When it is obvious that the only concern of leaders in a problem-solving effort is results, people will respond by showing positive results whether or not they are real or sustainable. Problem-solving will become nothing more than an exercise to get to the countermeasure as quickly as possible.

The Benefits of Learning

Some of the benefits of emphasizing learning during problem-solving include:

Improved understanding of systems and processes When done correctly, problem-solving requires looking at the issue from a number of perspectives to better understand how to approach it. It also involves understanding and proving the connections between potential causes and effects and, although it takes time to do this, it leads to increased understanding of the processes and systems that contributed to the issue. This learning leads to better problem-solving and greater improvements in the future – something that cannot occur without learning.

Improved understanding of the problem-solving process The more a team solves problems, the better everyone involved learns the process. Rather than merely following the steps in a process, people start to learn why the steps are important, how they relate to the quality of the output, and where changes can be made to make the process better and faster. When the focus is on getting to the countermeasure, the only learning that takes place is how to make an A3 look good. No useful learning will occur as people jump to the countermeasure and backfill the A3 to make it appear that the process was followed.

Learning stays with the team rather than with a single person The A3 (or whatever document is used in the process) from formal problem-solving is captured and maintained as a record of how the problem was defined, broken down, how the root cause was determined, the countermeasures selected, and the results. In this way, when one or more people leave the team, the learning is maintained through the records and the countermeasures captured in standards related to the process. Also, the increased knowledge and understanding of the process throughout the team that was gained as part of the effort will not go away when one or two people leave.

Motivation increases as people learn and grow For most people, learning and contributing to improvement makes the work they do more interesting. When learning is the focus of problem-solving, the more energized people become and the more interested they are in driving improvements into the work they do.

Leaders Must Learn Also

Emphasizing learning rather than results takes patience and a belief that it will eventually lead to far greater and sustainable results. Without this transformation, people will see that results are all that matters and respond accordingly. Rather than generate real results based on scientific analysis and concrete actions, however, they will likely be achieved quickly and be superficial and unsustainable. Problems will become hidden and not given the attention they require.

Slowing Down to Speed Up

noreply@blogger.com (Gregg Stocker) — Tue, 31 Oct 2017 07:23:00 +0000

Borrowing From Neuroscience to Drive Kaizen Thinking

"If you are going to do TPS you must do it all the way. You also need to change the way you think. You need to change how you look at things." - Taiichi Ohno 

One of the most common issues lean coaches face when teaching structured problem-solving is keeping people from immediately jumping to countermeasures when addressing a problem. Touting the virtues of sticking to the process and mentioning that the countermeasure may be wrong is rarely an effective way to getting someone to forget what they already think is the answer and to take more time and effort only to arrive at the same conclusion. There are a number of reasons for countermeasure-jumping, and understanding the motivation behind the behavior can help people appreciate the importance of following the process. 

There are many reasons people jump to countermeasures rather than following the process to solve problems. The need to be an expert (for personal or cultural reasons) and being stressed or overloaded are two common reasons.  A third reason, which is the focus of this blog, comes from the study of neuroscience and our internal programming regarding how we make decisions. 

Fast vs Slow Thinking

In his book, Thinking Fast and Slow, Nobel Laureate Daniel Kahneman presents the results of his research into decision-making. Kahneman presents two distinct processes in the brain that, although apparently designed to work together, often conflict with one another. The first, which he refers to as System 1, is the fast thinking process that runs on autopilot. The obvious purpose of the fast brain is to protect us from danger - i.e., we don't have to take the time to think about getting out of the street when a car is coming - and to keep us from having to relearn simple tasks each time we perform them. The fast brain is guided by intuition and habits, and takes virtually no effort to use. 

System 2 is the slow brain, and is used for issues that require deep-thinking logic and focus. It takes time and effort to use the slow brain, but it is the part of thinking that deals with complex issues and enables innovation and creativity to occur.   

The issue with all this, however, is that that the more the fast brain is used, the more it tends to dominate the slow brain and could, in fact, shut it down in most situations.  When applied to the workplace, the fast brain always wants to jump to countermeasures immediately.  

For a variety of reasons, many organizations tend to reward fast-brained people through promotions and bonuses because companies that want quick answers and immediate results do not value deep, careful thinking. Because of this, organizations that have not identified their few highly critical priorities will have cultures that lean toward fast thinking. 

Thinking, Reflecting, and Learning

Kaizen requires slow thinking and reflecting in order to identify and challenge assumptions that are preventing effective and innovative countermeasures. This may be what Taiichi Ohno meant in the above quote when he wrote that TPS requires you to "change the way you think," since lean requires much more engagement of the slow brain. 

I believe that this is the reason kaizen is not natural for most people. Since most of us are overloaded in our professional and personal lives, we are dominated by our fast brains. As a result, we probably get more done by operating in this way - it's the quality of our work that we have to question. Getting people to understand kaizen requires making them realize this and to learn how to access their slow brains when approaching a problem. 

I spend a lot of time these days getting people to slow down when they're addressing problems.  If it's a small, one-time issue, I only try to get those involved to do a basic 5-why exercise to help them start to appreciate slower thinking without shutting them down completely. When dealing with the larger and more critical problems, however, I continually coach them to slow down and think about the steps in problem-solving before jumping to any conclusions.  It requires a lot more time and coaching to get a person or team to clearly understand a problem and think deeply about each step in the process. When people can start to understand the value of accessing their slow brains, the transformation (or "thinking differently" as Ohno stated) starts to occur. 

When you think about it, Toyota's 8-step problem-solving process is designed to encourage slow thinking. Clearly identifying the gap frames the process, and breaking it down requires looking at data and going to gemba to understand the issue from various perspectives before wasting time attempting to think about causes or countermeasures. Anyone who thinks an A3 can be completed in one sitting is being guided by their fast brain. And for people who do this, their fast brains will get a lot of exercise as they continue to address the same issues over and over again. 

The Big Gains

Slow thinking is what leads to the big gains that lean thinking drives.  Organizations that approach lean without changing the way people think will likely end up disappointed and abandon the process as not applicable to their business.

Why Questioning is Critical to Lean Leadership

noreply@blogger.com (Gregg Stocker) — Wed, 18 Oct 2017 09:18:00 +0000

One of the most critical but underappreciated skills required to successfully transform an organization toward lean thinking is the ability of leaders to use questioning to coach and develop team members. As important as coaching is to leadership, however, it is also one of the most challenging for people to understand and apply in their daily interactions with others. Like much of lean thinking, using questions to develop people is simple and logical but difficult to put into practice.

Learning to use questioning usually requires understanding why it works and how it helps the leader and the person being coached. It is not an attempt to portray the leader as a wise or deep-thinking philosopher who has all the answers. It is a way to help understand what a person is thinking and how to tailor the conversation toward helping them see a situation in a different way. When a leader begins to understand why questioning is important, he or she starts to see how to apply it to a variety of interactions throughout the day.

Why We Question

There are some basic reasons why questioning is an effective way to teach and learn. Understanding and applying questioning effectively requires considering these reasons during conversations with team members and reflecting afterwards to continually improve your ability to coach and develop others.

The most basic reasons to question rather than tell in conversations with people includes the following:

To know what the person is thinking. You can't help correct incorrect assumptions if you don't know what those assumptions are and why the person is making them. Use questions to better understand the assumptions behind actions and where they are coming from.
To help the person see things the way you do. When you see a situation differently than the person you are coaching, you want to help the person to see the situation from your perspective. He or she is likely missing something, so you need to question to find out what it is and to help them understand.
To help you understand the facts. It is possible that the person you are coaching knows more about what's going on at gemba than you do. If you believe in lean thinking, you must respect this and be open to the idea that you could be wrong and can learn something from the person you are coaching. Questioning is the only way to help you understand what you may be missing.
To help the person understand the value of thinking slowly and deeply. I have found that one of the most beneficial ways to help someone develop is to get them to slow down and deeply think through a situation before acting. Most people feel overloaded, and when faced with a problem, just want to get it off their desks as quickly as possible and move on. Especially for the big problems, though, jumping to countermeasures without thinking deeply about the situation rarely eliminates the cause of the problem and, even when it does, does not tend to make life easier. It often ends up creating extra work or just buries the problem until the next time it comes around. Using creativity and innovation to address root causes and truly make things easier generally requires reflection and deep thinking to understand which pieces of information are fact and which are assumptions.
To get the person actively involved in the learning process. Studies show that passive listening – sitting and listening to someone lecture – is a far less effective way to learn than active participation. Active participation involves engaging the mind when attempting to learn, and answering questions about a situation provides a good way to engage a person's mind. On the other hand, listening to someone lecture does not require engagement and allows the listener's mind to wander to other things going on at the time.

Although it depends on the circumstances and the person being coached, some questions that can help provide clarity about the process and help develop the ability to coach include:  What do/did you expect to happen? What do you think is causing the problem? Did you learn anything that you didn't know when you started investigating the problem? I have also found that asking why is the most effective way to get someone to clarify their thinking and start to see what they may be missing.

Mixed Messages

One of the reasons that people have difficulty with coaching is that those of us who teach and write about lean are likely sending mixed messages regarding the why and how of the process. On the one hand, we tell leaders that they don't need to be experts in everything and that it is okay to admit that they don't have all the answers. On the other hand, we talk about people like Taiichi Ohno and Hajime Oba and the ability these people had to see problems quickly and clearly, and coach others to the answers.  I believe that this turns people off of the process because most will never measure up to these legendary leaders. In actuality, these two and other legendary lean figures didn't know the answers but they did know how to use questioning to gather facts (or identify when the facts are not yet gathered) and help the person being coached to arrive at an answer.

Start Small

When I work with leaders to develop coaching skills, I recommend starting small with a few key conversations each day or week.  Teaching the ability to question – which, by the way, also requires questioning – is easier when connected to the overall philosophy of lean thinking. Decisions should never be made without understanding the facts, and understanding the facts often requires going to gemba and asking questions to those who are closer than you are to the processes involved. When people understand and believe this, questioning starts to become a normal part of leading teams.

Lean Leadership: A Direction . . . Not a Destination

noreply@blogger.com (Gregg Stocker) — Tue, 19 Sep 2017 06:10:00 +0000

One of the problems with some of the books and articles on lean leadership is the tendency to oversimplify the concept in terms of a dictator versus coach. It is too easy for people to read about the characteristics of a traditional manager and, because they aren't that bad, surmise that they are therefore a lean leader. What many do not understand, though, is that the difference between a traditional manager and a lean leader is not binary . . . it's a continuum and very few, if any, are completely at one end or the other.

There are many characteristics that separate a traditional leader from a coach and most of us tend to drift to one side or another under any given circumstance. Moving toward a lean leader, however, requires the application of the PDSA cycle guided by regular and honest personal reflection, along with a sincere desire to help others develop.

The key to becoming more of a lean leader on a consistent basis is to understand the characteristics that separate the two ends of the spectrum and work to improve the areas where one shows the biggest gaps. Although it is a humbling and sometimes painful exercise, it is one that can reap huge rewards if done consistently and effectively.

The Dictator-Coach Spectrum

Some of the characteristics that separate a controlling manager from a lean leader are included in the questions below. Understanding how often and effectively you apply these characteristics can be a good starting point for reflection and eventual movement toward the positive side of the spectrum.

Do you stop and reflect regularly on your performance as a leader? Effective leaders take time to reflect on the performance of their teams and how their own performance could have improved results. Sincere reflection can help determine where to focus development efforts for the team as well as well as yourself.
During conversations with team members, do you listen more than you talk? Perhaps the most common behavior that drives leaders toward the traditional side of the continuum is the propensity to talk too much. Besides the fact that development does not generally occur when people are lectured to or talked at, they tend to turn off when they do not feel listened to. If, after a conversation, you can't clearly understand the other person's opinion by recalling specific examples of what they said, you most likely did too much talking.
How often do you realize that you don't know something? One characteristic of great leaders is that they continually develop themselves. One way to effectively self-develop is to have the courage to regularly question your own knowledge and performance. Kaizen thinking is personal and happens when someone deals with a situation by questioning the status quo and challenging what they and others believe to be true.
Do you spend more time worrying about your own image than developing your team? A clear red flag that someone leans toward the traditional side of the spectrum is spending more time with those above him or her in the organization than team members. It is an unfortunate but it is common for leaders all the way up the organization to be disconnected with those on the team. Performance reviews, promotion systems, and overflowing in-boxes are just a few things that distract leaders from their main responsibility to support and develop people on their teams, and although these things can explain the reasons for becoming self-centered, they do not excuse one from ignoring one of the most important responsibilities of leading a team.
Do you continually develop your own skills? An important trait of successful leaders is that they never stop developing themselves. When it comes down to it, it is not possible to continue to develop others unless you continually develop yourself. I have known many leaders over the years who stagnated and stopped learning and developing. Whether resulting from too much to do or thinking they already know everything they need to, stagnation really means atrophy. When it comes to development, you either go forward or backward . . . there is no standing still.
Do you go see your team or make them come to see you? Although a basic element of lean thinking, going to gemba to see and learn firsthand is something that still has not made it into everyday leadership. Leaders who refer to an "open door policy," do not understand how intimidating it is for some people to walk into their office. By making team members come to them instead of going to the team members, they also do not understand the importance and value of seeing for themselves. Relying on spreadsheets, meetings, and the opinions of others to know what is happening in the workplace misses a critical dimension in truly understanding the facts.
Do you help your team understand how they contribute to the purpose of the larger organization? To become engaged in their work, people need to understand how it fits into the bigger picture for the organization. Through regular conversations, coaching, and effective dashboards, the team can gain a much better idea about how important their work is, and why it is critical to continue to improve. Leaders can also become more effective when they gain a better understanding the larger system. Handoffs between teams improve and more attention is focused on improving the value stream rather than attempting to optimize individual team performance.

Moving toward lean leadership involves a system approach that requires attention to and development of numerous factors. There are obviously more than the seven listed above, but these are the issues I see most often. The key is to understand how you, as a leader, fit into the performance equation of the team and to continually improve the areas where you can positively affect the outcome.

One of the most common reasons organizations fail with lean is that they attempt to deploy it in the operation without changing the system of leadership. Lean is about shifting the way people throughout the organization think and approach work and if leaders expect it to happen without transforming themselves, the probability of sustaining improvements is pretty much zero.

Motivation and Helping People Learn, Make a Difference, and Have Fun

noreply@blogger.com (Gregg Stocker) — Wed, 23 Aug 2017 05:57:00 +0000

"Why are we here? To learn, to make a difference, and to have fun." - W. Edwards Deming

Many years ago, I was fortunate enough on a couple occasions to attend W. Edward Deming's 4-day seminar. Early in both seminars, Dr. Deming asked attendees, "Why are we here?" After waiting in silence and repeating the question, he would offer up the notion that we are here "to learn, to make a difference, and to have fun."

Of all that I learned from Dr. Deming, this statement stuck with me the most. When I searched the internet to make sure I remembered the quote correctly, I found that it seemed to have also made an impact on many other people.

I've had a variety of jobs throughout my career, in both management and advisory positions and thought about these words many times. It is such a simple and logical statement that one would think is a normal part of leading people - unfortunately, this is not the case. After being promoted into leadership positions, many organizations leave people to their own devices to figure out how to do it well. So rather than learning, making a difference, and having fun, team members end up stressed, overworked, and looking for their next job.

What does it mean to help people learn, make a difference, and have fun? It's something I've thought about for many years and have figured out at least what it means to me.

Learn

Besides the fact that many people want to grow in their careers, there is an innate drive in most of us to learn. Recent studies have concluded that learning has physical effects on the brain which can influence motivation, energy, and confidence.

Studies also show, though, that the desire to learn can be buried by poor teaching and coaching experiences. To prevent this and help team members learn requires that leaders have the interest and ability to coach in real situations using problems that people face every day. They must be able to make coaching a normal part of their job and ensure people are continually improving existing skills while developing new ones. This can only happen when leaders understand that they must also continue to develop their own skills and abilities.

Make a Difference

There have been numerous examples and studies on motivation that point to things like engagement and purpose as critical factors in driving motivation. When a person understands how the work he or she does contributes to the achievement of a worthwhile purpose, energy level increases as does the motivation to make it happen. On the other hand, a purpose that is nonexistent or unclear can lead people to disconnect and focus on work as little more than a way to receive a paycheck.

Enabling a true connection to the purpose requires that leaders establish a clear and logical purpose – often referred to in lean terms as True North – and that they continually drive the organization toward its achievement. The company's leaders must define the organization's true north and never waver in steering toward it. It should go without saying but, to be effective, true north should not change as the organization changes its leaders.

This is one of the things Deming meant when referring to constancy of purpose. When the reason for an organization's existence is clear and unchanging, people will better understand how the work they do contributes to its achievement and work hard to make it happen. As much as people want to believe in a true north and be a part of its journey, they will always be looking for examples that demonstrate a lack of commitment or constancy. This is a defense mechanism people have developed over the years to protect themselves from the disappointment that results from believing in something that turns out to be false.

Have Fun

Although there are a number of studies available, it should not take extensive research to understand the benefits of creating a work environment where people have fun. The positive effects that happiness has on stress, motivation, productivity, teamwork, and employee turnover are well known.

Learning and making a difference are two factors that can lead to having fun at work, but relying on these things alone will not assure continued success or prevent burnout. I tend to think of learning and making a difference as having positive effects on performance, and having fun as something that prevents negative effects. The human brain cannot continually perform at high levels without regular downtime and preventive maintenance. Having fun is one way to ensure the maintenance is happening.

Putting it Together

Learning, making a difference, and having fun is something that should be critical parts of any leadership system. It is a clear way to demonstrate the respect for people that is so important to continually improving results for an organization. Like much of leadership and lean thinking, though, it is much more difficult to apply than it appears on the surface. There are often cultural and systemic barriers that need to be overcome to ensure its continued success.

I have to say that I cringe whenever I hear a leader say that he or she doesn't want people to have "too much fun" because of a fear that they will forget about work. This is a clear sign that the leader lacks the understanding that having fun is part of a system that includes learning and making a difference, and that all three must be present to work effectively.

The more I've reflected on these three simple drivers of motivation, the more I realized that they apply to my own personal life as much as they do to organizational success. They are three factors that truly connect the work-life balance that virtually everyone wants to achieve.

Kaizen & Changing the Way People Think

noreply@blogger.com (Gregg Stocker) — Sun, 25 Jun 2017 09:15:00 +0000

"If you can't explain it to a six-year-old, you don't understand it yourself." - Albert Einstein

For most people, structured problem-solving is not a natural process.  After years of being rewarded for quick answers and telling people what to do, along with the fact that most of us are overloaded, the ability to approach a problem without a preconceived solution is counter to the way people work.  Many see structured problem-solving as cumbersome and requiring more time than is necessary to address a problem - especially when they think they think they know the answer.

Because of this, coaching is critical to help a person move from jumping to countermeasures to following the process and actually learn about the problem before arriving at answers.  Even using a problem-solving A3 tends to result in filling in the boxes in a way that supports what we already know needs to be done.

Coaching is critical to changing the way people think about and approach problems. The advantage of using a tool like an A3 for this is that the coach can see what the person is thinking as he or she follows the process. An effective coach can review an A3 and, even without a deep understanding of the problem or related processes, ask a series of questions to help the person understand where they went wrong and how to improve the effort.

An A3 should provide a simple and clear overview of the issue, and the story describing how it was addressed. In fact, the simpler and more clear the A3, the better handle the team has on the problem, what caused it, and what to do to address it.

THE QUESTIONS

There are a series of questions that can help someone learn to follow the process.  There is much more to problem-solving than following the steps listed on an A3.  The key is to help a person change the way he or she thinks. It's a tall order, but it can be done if the person is open to learning and the coach is experienced and patient (it also helps if the coach is also open to learning).

The questions below, along with a good deal of practice, can help to start the change in thinking that will lead to more effective learning and better problem-solving.

1) Why should I care?

Right up front, the A3 should objectively demonstrate context for the problem and the benefit(s) of addressing it now.  An excellent way to do this is to connect it to the vision or high-level objectives for the business.  Getting the person to do this will help others agree with the importance of the issue in case support or help is needed to implement a countermeasure, and help to keep the team from straying away from the original objective.

2) Explain the logic?

The steps in the process are not meant to be done independently; they must connect and build on each other. Going over the A3 backwards is a good way to get the person to see where the logic breaks down. A good check on the logic is to make sure that the units of measure throughout the effort don't conflict. Although it is possible that the units may change as the problem is broken down, there must be a logical relationship between them and, once the selected problem and target are defined (step 3 in the 8-step process), it remains consistent throughout the remainder of the effort.

3) What did you learn?

A key objective of the structured problem-solving process is to learn. Besides making the problem smaller and easier to attack, the reason for breaking it down is for the team or person to learn something that was not previously known. Looking at data from a variety of perspectives (what happened, who was involved, when did the problem occur, etc.) should lead to discovery about the issue. By asking what the person learned during this step, it becomes easy to see if they began the process with the countermeasure already in mind and backfilled the steps to justify their idea.

4) Why did you move on from one step to another?

Another question that can help a person learn where they didn't necessarily follow the process is to ask why they moved on from one step to the next. As they broke down the problem, for example, they decided that they had enough information to select the problem to attack and move to the next step. Question where they got the data – or if they used data to effectively prioritize the issues, and why they chose not to break down the data any further. Even if the person made a good decision in moving to the next step, asking why can help him or her realize how important it is to think about it during future problem-solving efforts.  Another benefit of asking why is that it helps the coach learn about the issue and ask good questions going forward.

There are many more common questions associated with coaching problem-solving – like who did you involve in the effort and how did you test the countermeasure? Although these are important, they are more procedural and focused on improving the mechanics of following the process, whereas the above questions help to get the person to change his or her thinking. Fundamentally changing the way people think helps them become coaches and can drive lean thinking in all situations rather than only when working on an A3.

Flattening the Organization - Probably Not the Answer

noreply@blogger.com (Gregg Stocker) — Wed, 31 May 2017 06:38:00 +0000

One of the misconceptions about lean thinking is that it automatically leads to flattening the organization. Many people think that layers of management are always a bad thing and start removing layers as a way to empower employees, speed up decision-making, and improve innovation. While there is no shortage of organizations that suffer from too many layers, it should be noted that flattening does not necessarily lead to improved performance. Many organizations that flattened their structures have experienced little more than burned out managers, frustrated employees, and high turnover.

Removing layers of management downplays the important role managers play in improving the organization's performance. This includes responsibilities like coaching people to solve problems, developing future leaders, and continually removing barriers to team member performance.

When an organization removes layers and managers have large numbers of people on their teams, it is not possible to spend the time needed to develop problem-solving or leadership skills of team members. As a result, the managers resort to directing and telling, rather than coaching and teaching, leaving team members feeling stuck with little hope of improving their skills or growing in their careers.

Flat organizations leave personal development completely up to the individual, something that rarely, if ever, works effectively. When people are left to develop on their own, the lack of objectivity will lead them to focus on the areas they want – rather than need – to improve. When this happens, the team member, as well as the organization, stagnates resulting in a deterioration in customer service and long-term performance.

Understanding the Problem

One of the reasons often given for eliminating layers of management is that managers get in the way and slow down processes. Although there are cases where this is true, eliminating layers is not necessarily addressing the root cause of the problem. The company can benefit more by understanding why its leadership is ineffective and its processes and systems are slow, rather than assuming it is because of excessive layers. Firing managers without addressing the real causes of poor performance can magnify the problems and, after a short-term improvement in results, end up in worse shape than if no action was taken.

No Quick Fix

In spite of what many believe about management layers, they do have a purpose in organizations. Flattening the organization is a fad that ignores the importance of developing people and continually improving. As companies like Toyota, Facebook, and Google have proven for many years, long-term success still comes down to effective leadership, respecting people, and a never-ending focus on improvement.

Driving Improvement Through Systems Thinking

noreply@blogger.com (Gregg Stocker) — Sun, 21 May 2017 06:15:00 +0000

"Management of a system requires knowledge of the interrelationships between all of the components within the system and of everybody that works in it." - W. Edwards Deming

One important discovery people make when they start on a lean journey is how much they still need to learn about their business. Although they may have extensive knowledge about individual parts of their products, processes, markets, etc., lean thinking forces them to connect the components as a system, which is something many organizations have never done before.

When starting an improvement effort, I usually ask about the minimum target the team is attempting to achieve. The answer is often something made up on the spot or a generalization, like as much as possible. Improvement efforts should generally be driven by the actual requirements of the business. For example, if a company determines that the time between a customer placing an order and receiving the product is too long, it should determine an improvement target based on what the business needs. If it currently takes 42 days and customers expect to receive the product in 22 days because of their needs or what competitors are offering, the minimum improvement needed is 20 days. Although the gap appears to be significant, people will look at it as if it is based in reality, rather than a target that management dreamed up. So, instead of thinking of it as an impossible target, it becomes possible and something that the business needs to survive. Attempts to go beyond the 22 day target can be attempted later, but should still be based on strategic reasons.

Although the concept appears simple, it can become much more difficult when applied to something deeper in the business than a product lead time. In an oil and gas operation, for example, suppose it is taking too long to change out filters on a compressor. Setting an improvement target would require first understanding what "too long" means. This involves quantifying the compressor's contribution to the overall system, and includes things like: the overall production target; uptime of the facility required to meet the production target; uptime of the subsystem where the compressor is located in order to meet the facility uptime; the compressor startup time after maintenance; the current uptime of the compressor; and the time needed to change the filters. By understanding how all of these elements connect and contribute to the production target, it becomes easier to accurately determine the gap between the required time to change out filters and the actual time.

The more people learn the connections the components have with each other to achieve the overall business objectives, the easier it will be to see the problems and set improvement targets based on reality rather than gut feel. It is not enough for people to know that the work they do contributes to the organization's purpose and objectives - they must know how. This comes through a continual focus on coaching and basing improvement activities on learning, which happens through questioning, discussing, and connecting to gemba.

Short-Term vs Long-Term: They Both Matter

noreply@blogger.com (Gregg Stocker) — Sun, 30 Apr 2017 09:29:00 +0000

Over the years, I have found many organizations the lack the ability to effectively balance short-term pressures with long-term improvement. The situation causes frustration in people because, in the end, the short-term virtually always wins while the focus on the long-term suffers.

There are a number of reasons for a tendency toward short-term thinking. First of all, people tend to be measured and rewarded based on achieving current year targets much more than long-term improvements. Another factor driving a short-term focus is the targets are right in front of people. The gaps are easy to see and it's clear that, if the problems are not addressed immediately, meeting the targets may not be possible. Long-term gaps are also more difficult to measure and it's easy to justify dealing with them later.

Which is More Important?

So how should people deal with this type of situation? We can't ignore the short-term targets because they are often necessary to assure we will be around for the long-term. On the other hand, the more we ignore the long-term, the more we jeopardize our survival. Regarding the question of which is more important, the answer is actually they're both important. Customers, as well as investors and fellow team members, rely on our ability to deliver what we promise.

Assuming that annual targets were set based on current capabilities, we should be able to meet them with enough focus and daily problem-solving. After all, we made a commitment, so we should feel compelled to meet it. On the other hand, if the targets do not have some semblance of reality, the company has much bigger problems, and meeting them most likely won't happen with or without a heavy focus and effort.

When a problem arises today that will affect meeting short-term targets, it is difficult for most people to ignore it. People will naturally jump in to address the problem and get performance back on track, especially if nobody else is available or a particular type of expertise is needed.

The real problem for the organization occurs when people get so consumed with short-term problems that the long-term becomes an afterthought. In reality, it seems that the poorer we are at taking care of the long-term, the more short-term problems we battle year-after-year.

Implementing the 80/20 Rule

I have found that the best way to assure we take care of both short- and long-term objectives is to consciously split time between the two, and in the most general terms, the split to be 80/20 (80% on the short-term and 20% on the long-term). This is a general rule because the closer one is to where direct value is created (e.g., the factory floor in manufacturing, the sales counter in retail, or the wellhead in oil and gas production), the more time is focused on short-term objectives. For example, a team member working on an assembly line has to focus most of his or her day on performing work within takt time that meets standards. Although problems will regularly arise that the person will need to address, they are generally related to short-term safety, production, quality, and cost targets. For this person, the split may be 95/5.

Long-term projects, whether new or carried over from previous periods, should be apparent at the start of year when annual plans are being developed. Making sure that these projects make their way into the 20% is important at this point, as is assuring that they require no more than 20% of the person’s effort. Catchball and careful planning is critical to align expectations in the split between short-term and long-term focus, as well as the specific projects that fall into the 20%.

As with any project, whether related to the short-term or long-term, clear objectives are needed along with a detailed and measurable plan. The better and more measurable the plan, the easier it is to ensure progress. Implementing a rhythm for regular reviews is necessary to assure the project is progressing according to the plan, and to determine whether changes in the plan, priorities, or resources assigned are needed to get it back on track. We all know how to measure the short-term targets – it's the longer-term projects that require serious thought to determine the right measures. Measuring progress to a project schedule will help but measuring quality of deliverables along the way is even better.

Applying the 80/20 rule and ensuring that short-term and long-term objectives are met requires that managers be close to team members and truly understand what is going on in the workplace. Rather than hearing about delays when it is too late to help make adjustments, managers must have enough awareness to provide help to get the project back on track before targets need to be changed.

Intention is Everything

It should be noted that none of this applies to an organization where meeting short-term targets is everything and commitment to the long-term consists of nothing more than words. If the environment is so toxic that shipping defective products or cutting corners just to meet short-term targets is the norm, it has much deeper problems and attempting to manage through an 80/20 split will do little to help. Like most things in business, long-term success begins with an obsession around understanding and meeting the needs of customers.

Just like short-term objectives, long-term projects need to have targets based on successfully progressing plans, and these targets must be reviewed regularly – at least monthly – to ensure they are on-track and understand if help is needed. If the split generally follows the 80/20 rule, and long-term commitments are taken as seriously as short-term targets, the chances of success will increase. Discipline is needed to fight the tendency to put off developing or maintaining the measures and to skip the reviews now and then. Like much of lean thinking, the concept is simple, while making it work effectively requires a lot of focus, effort, and consistency in behavior.

No Systems Thinking in Trump's Plans

noreply@blogger.com (Gregg Stocker) — Sun, 22 Jan 2017 11:08:00 +0000

It’s inauguration time and a new administration is moving into the White house attempting to fulfill its promise to “make America great again.” A key to Donald Trump’s platform throughout the election had been the need to drive fast and significant change in government structures and systems. Some Americans find this approach refreshing. What I’m seeing, though, is a lack of a systems thinking in the plan, and it concerns me greatly.

APPRECIATING THE SYSTEM

The U.S. operates as a system. Federal departments and agencies, businesses, states, citizens, and even foreign entities act as components of the system that interact and drive results that, although far from perfect, enable the country – and to some extent, the world – to function. As with any system, there must be a clear and unified purpose to help drive objectives and improvement. The more complex the system, the more important it is to understand how the system works and how the components interact to assure changes do not end up making things worse.

Making large-scale changes to components of a system without understanding how they interact amounts to tampering, and can quickly lead to chaos. And what I've seen in the comments, tweets, and appointments in the new administration, this appears to be exactly what's happening. Talks of closing borders, eliminating the Affordable Care Act, turning education focus to charter schools, cutting environmental regulations, etc. look more like fragmented actions than steps resulting from a deep understanding of how the system operates and where the real gaps lie. In lean terms, the Trump team is developing countermeasures to problems without truly understanding the causes.

EXAMPLES OF FRAGMENTED THINKING

Some examples that appear to result from a lack an understanding the system include:

Import Tariffs On the surface, raising import tariffs to increase domestic jobs sounds like a good idea. The effect this has on U.S. purchasing habits and the American and world economies, however, is complex and not easily understood. For instance, there are many economists who believe that the Tariff Act of 1930, along with the retaliatory responses of many U.S. trading partners was a significant contributor to the Great Depression due to the negative effect on American exports and imports. Exports fell because of higher tariffs on American-made goods and, because the prices of imported good increased, people bought less overall.

A second, but difficult to quantify consequence of significant tariff increases is the effect on developing nations that rely on access to the U.S. market to continue growing. The administration wants to build a wall along the U.S.-Mexican border to keep people from crossing into the U.S. illegally. Since many of those coming into the U.S. from Latin America do so for economic reasons, raising tariffs and pressuring manufacturers to scrap foreign factories to build in the U.S. will result in lost jobs and other problems for those countries. It seems logical then, that this action could actually increase the number of people attempting to cross into the U.S. to escape poverty. And this does not take into account the fact poor economic conditions tend to increase drug trafficking.

A third, but rarely considered effect of restricting trade with other countries is reduced influence on the working conditions that exist in some countries. Improvements in labor conditions in many developing countries have resulted from the influence of American companies and trade groups because of the size and power of the U.S. market. As we reduce imports, we reduce our ability to influence international labor laws.

Scrapping the Affordable Care Act

The Affordable Care Act (ACA) has been a huge source of political strife since it was enacted in 2010. Whether you agree or disagree with the effects of the ACA, it is important to understand and recognize that the Act is a component of the healthcare system which, in turn, is a component of the overall American system.

A systems approach to dealing with the problems from the ACA is to improve it – not scrap it and start from scratch. It includes understanding the problems – i.e., why they are problems and what is causing them – and taking steps to reduce or eliminate them. Although completely replacing a system may address some of the problems, it is likely to create many others that are not problems with the current system.

THEORY AND LEARNING MUST DRIVE ACTION

Raising import tariffs and scrapping the ACA are just two examples where actions meant to drive improvements can lead to negative consequences if done without a holistic understanding of the system. As long as I remember, though, American politics has never taken action resulting from a deep understanding the nation as a system. Fortunately, the changes have rarely been large enough to cause major problems in the American system. What I’m hearing now about the coming changes, however, I’m very concerned that the damage could be long-term and significant.

Are We Too Obsessed With Competitors?

noreply@blogger.com (Gregg Stocker) — Sun, 15 May 2016 06:50:00 +0000

“The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low and achieving our mark.” - Michelangelo

It is common for businesses to direct a fairly significant level of effort toward understanding the competition. Collecting information on costs, market share, new products, and a host of other areas often drives business planning and improvement initiatives to keep a company from losing ground to others.

For a number of reasons, though, I believe we go overboard and expend far too much energy worrying about competitors. Considering the amount of money and time spent on researching the competition, one has to wonder how much better it would be for an organization if this energy were directed toward more important areas of the business.

WHY IT’S A PROBLEM

What I used to accept as a normal business activity, I started to question as I saw little benefit – and sometimes negative effects – from the effort. Some of the reasons for this include the following:

Leaders Don’t Follow
Looking to competitors to focus your efforts can guarantee that you will always be a follower. Creating a culture of continuous improvement and innovation are what makes an organization successful – looking to others for ideas does not. This in addition to the fact that a strategy of following is not highly energizing or motivating for team members.

Many Competitors Are Mediocre
A number of industries are plagued with mediocrity, and focusing on competitors who are mediocre will result in little benefit. Leading a pack of poor or mediocre companies is not something with which to be proud.

You’re Not in Business for CompetitorsFocusing on competitors takes resources away from a company’s most important group of stakeholders – its customers. Companies like Marriott, Apple, Google, and Toyota have shown repeatedly that focusing on customers generates far greater returns than focusing on competitors. A company exists to serve one or more needs, and success comes from focusing on those who have the need.

It Puts Blinders on ImprovementBringing performance to continually higher levels cannot happen by looking at what others are doing. Looking at the performance of industry leaders can limit what people think is possible. Targets are set at what others have done rather than at true breakthrough levels. As a result, “safe” targets are set and creativity is crushed.

AN EXAMPLE

Many years ago, I worked for an instrument manufacturer in a highly competitive industry that, because of lagging sales, decided to redesign its flagship product. What was once the most accurate instrument of its type had fallen behind other producers, and we wanted to regain the lead.

It was a fairly significant effort, but we succeeded in improving the accuracy enough to once again be the best. After announcing the new product, we even became concerned after hearing rumors that a competitor had initiated a redesign of its own product to provide an even higher level of accuracy.

Although we were proud of our accomplishment, sales were disappointing. As part of an effort to address the sluggish sales levels, we began to visit our customers. Our product was used by customers to calibrate their products during production. We quickly found out that, rather than increased accuracy, what they really wanted was the ability to perform quick changeovers from one product to another within their own process. In contrast, in order to provide higher accuracy, our product required longer stabilization times, meaning that it provided the exact opposite of what our customers really wanted. We wasted a significant amount of time worrying about what our competitors were doing when we should have been worrying about what our customers were doing.

STOP THE MADNESS

When suggesting that a company should stop worrying about competitors, I am often met with blank stares or comments that I don’t understand the business. Like anything, though, the effort put into studying competitors should be questioned as to the value it provides. People should be clear about the results they expect from the process and follow up with understanding what was actually achieved. If results were not as expected, something related to the effort needs change or the effort needs to be stopped completely.

Improving Dashboards With The 3-Meter Rule

noreply@blogger.com (Gregg Stocker) — Sun, 01 May 2016 06:20:00 +0000

Dashboards are critical for a successful continual improvement effort. Effective dashboards can drive better coaching, faster team meetings, and more effective problem-solving. A common problem that interferes with the effectiveness of dashboards, however, is the inclusion of charts that attempt to convey too much information and are difficult to understand. One way to prevent this problem is to make sure that all charts on a dashboard comply with the 3-meter rule.

Simply stated, the 3-meter rule means that a chart should clearly convey its message from a distance of 3 meters. When looking at a chart, if you need to move close or ask for explanations to understand the information displayed, you can assume that the chart is in need of improvement.

Dashboards should drive conversations around closing gaps between current and targeted performance. To make sure the conversations are focused and effective, however, they should be centered around data. When the problem or breakdown is not clear, people will spend time attempting to understand the intention of the chart rather than addressing the problems shown by the data.

Besides helping focus the discussion on problem-solving, a chart that meets the 3-meter rule enables more people to be involved in the conversation. The closer someone needs to be to understand a chart, the fewer people who are able to see the information and participate in addressing the problem. Minds wander and separate discussions begin to happen, which negatively impacts the effort.

Creating charts that are easy to understand from a distance of 3 meters sometimes requires significant reflection and effort, but the investing time upfront can greatly aid the improvement process by making objectives clear and the problems that interfere with meeting the objectives visible.

Identifying Proper Leading Metrics

noreply@blogger.com (Gregg Stocker) — Sun, 24 Apr 2016 06:16:00 +0000

One of the areas of lean that people tend to have difficulty grasping is the relationship between leading and lagging metrics, and how to identify effective leading metrics. People spend a lot of time attempting to determine leading indicators that, in the end, are often disconnected with any of the actions being taken to improve performance.

Leading and lagging metrics both have a role to play in improving performance and are not difficult to identify once you understand the process and how to properly connect them to the problem-solving.

LAGGING METRICS

A lagging metric measures the result of a process. Barrels of oil produced, total recordable incident rate (TRIR), warranty expenses, and production costs are all examples of lagging indicators because the activities they measure have already occurred. The result lags the activity being measured and, whether you are happy with the result or not, you can't do anything to change it.

Lagging indicators are important because they tend to represent what's important to the area being measured. They measure a result we are ultimately trying to achieve and help us determine if our efforts were successful in meeting targets.

Other examples of lagging metrics include on-time delivery, actual capital expenditures, defect rate, and customer satisfaction. Identifying them requires a clear understanding of what the business or team is ultimately trying to achieve.

LEADING METRICS

A leading metric is a measure of an activity that influences a lagging metric. As a measure of an activity being performed by a team, leading metrics can be influenced by the team in an effort to improve the results of a lagging metric.

As an example, suppose a team is trying to improve safety performance as measured by TRIR and, through a breakdown of past incidents, discovers that hand injuries represent the largest category. After breaking down the problem, the team determines that incorrect use of tools is the most likely cause and failing to wear gloves is increasing the severity of the injuries. As a way to reduce the number and severity of hand injuries, the team introduces regular training sessions and an audit process to help assure team members are using proper tools and gloves.

The team can now create a dashboard that measures like TRIR (lagging metric), injury type (lagging breakdown), hand injuries (lagging metric), training classes held (leading metric) and audit results (leading metric). By following these leading metrics, the team is assuring that the activities to improve safety are happening and that they are truly reducing hand injuries.

In the above example, the effort of identifying the leading metrics did not consist of an isolated brainstorming session attempting to identify a specific metric to follow. It was integrated with the problem-solving process and became nothing more than identifying a measure of the actions taken to eliminate a root cause of the problem.

KEEP IT SIMPLE

The problems people have related to identifying leading metrics often result from failing to connect the effort to problem-solving. Attempting to determine the proper leading metrics in isolation from problem-solving often leads to frustration and wasted effort in creating and maintaining the measures, and a lack of clarity in understanding how to improve performance of lagging metrics.