In Praise of Ignorance

If you have a deep reservoir of experience with lean and a desire to help companies reap its benefits, there’s a nearly irresistible temptation to foist your understanding of improvement upon the people working in the organization rather than allowing people to learn and improve in their own way. As John Shook (CEO of the Lean Enterprise Institute) put it:

The notion of experts, often authorized through a certification process, too often devolves into an approach to improvement in which teams of experts swoop in to “do improvement to” the people who are trying to do the work, the frontline value-creating work of the business.

It doesn’t feel that way, of course. It feels like real help. With the best of intentions, you deploy your proprietary conceptual model for improvement that has worked so many times before. You expertly map value streams; identify improvement opportunities; install kanbans for inventory control; create better layouts for manufacturing cells; and set up visual management systems to monitor work processes.

The motives are pure—after all, you’ll get results more quickly, which is good for your customer. But over the long run, individual recidivism and operational regression to the mean is unavoidable. If you doubt that, just try listing the number of organizations that you think have really succeeded with continuous improvement. I bet it’s a pretty short list.

Mark Rosenthal, an outstanding lean consultant in the US, puzzled why so many organizations plateaued in their pursuit of lean. He found that experts,

were essentially pushing them [managers] aside and “fixing” things, then turning the newly “leaned” area over to the supervisors and first line managers who, at most, might have participated in the workshop and helped move things around. So it really should be no surprise that come Monday morning, when the inevitable forces of entropy showed up, that things started to erode.

There were no experts when the Toyota Production System was first being developed. Without years of experience practicing lean, and without a codified system of knowledge, no one was an expert—not even Taiichi Ohno. Workers, supervisors, and managers saw problems and groped their way towards solutions without guidance—because there was no one who actually could provide guidance. The tools that today’s experts eagerly deploy were developed organically by the workers directly affected by those problems in the pursuit of a countermeasure to a specific situation. But they developed those countermeasures by themselves. 

I haven’t worked at Toyota—or even at a company that embraced continuous improvement. I haven’t been insulted by Shingijutsu consultants in the course of a five-day kaizen. The only black belt I have is from Men’s Wearhouse, not from a lean six sigma program. I doubt Jim Womack or Dan Jones could pick me out of a police lineup. If I’m honest about it, the depth of my knowledge of the Toyota Production System is like a kid’s wading pool compared to the ocean of wisdom of the deeply experienced lean thinkers in the world. But in some ways, I think this makes me a better consultant when I help companies in their lean journeys.

A few months ago, I was working with a client on a shipping problem. Their biggest customer changed their policies, and instituted a penalty if their weekly orders weren’t received by Wednesday. This was a full day earlier than my client had been able to ship up to that point, so they were facing either a near-certainty of chargebacks, or the need to hire more workers in the warehouse. 

What I don’t know about warehouse operations could, well, fill a warehouse—and at that point, I had never done any improvement work in a warehouse. As a result, there was no way for me to “do improvement to” the distribution team, even if I wanted to. What I do know, however, is that in most processes where speed is an issue (as opposed to, for example, quality or safety), the waste of waiting is enormous. And with that level of lean knowledge, I could encourage the the improvement project team to simply walk through the shipping process and look for places where people were waiting for information or materials. 

Sure enough, the workers saw the needless handoffs and the unnecessary steps that forced the pickers and packers to wait. They developed the improvements to eliminate those wastes and smooth the flow of products and information through the process. And they’ve continued to modify and improve that process every few weeks, as they come up with new ideas. They’ve cut the time needed to process the shipment from three days to one or one and a half (depending on the order size).

Had my lean experience been deeper, I probably would have taught them process mapping, designed visual controls, and helped them level the workload of the various departments involved. They would have dutifully followed my instructions, but they’d never have owned the improvements. Performance would probably have slipped over time—and without a doubt, they certainly wouldn’t have continued to tweak the system to make it work even better. 

If your continuous improvement efforts are stalling, consider whether you’re relying too much on experts who are “doing lean to” people. The fathers of lean didn’t have experts they could rely on, and they did pretty well. Maybe you should try professing ignorance and letting the workers solve the problems.

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(Note: This article was first published at the Business Transformation & Operational Excellence Insights website: http://bit.ly/2b7omF7)

When Less is More

Shortly after joining Target as the company’s new CIO, Mike McNamara told his boss that his budget was too big:

“We were just doing too many things. I mean we had over 800 projects. Even a company as big as Target doesn’t have 800 priorities.”

I’ve often written about the problems with individual attempts to multitask. In her book, The Outstanding Organization, Karen Martin wrote extensively about the corporate analog—how the lack of organizational focus leads to lousy outcomes, including frustration, inefficient allocation of resources, and poor customer service. (See Tony Rizzo’s bead game for an elegant simulation of this problem.) The fact is that both humans and organizations have a limited ability to do multiple things at once.

But it’s not just ongoing operations that fall victim to the lack of focus. Continuous improvement efforts often make the same mistake. In the rush to improve, and under pressure from leadership, internal kaizen promotion offices and external consultants often cram multiple initiatives and kaizen events into the project pipe in the hopes of realizing rapid benefits in SQCDM (safety/quality/cost/delivery/morale). But the result of too many projects is that very few ever get done well, and none get finished in a timely fashion. Little’s Law applies to corporate initiatives, not just customers in a Starbucks queue.

Hoshin kanri/strategy deployment is a well-established way to ensure that you don’t get 800 projects on the board in the first place. But if your organization doesn’t do strategy deployment, you can at least begin by seeing how well your projects align with the larger strategic priorities. That’s what McNamara did at Target: he convened a meeting of the company’s top executives, weighed each project against their strategic priorities for growth, and cut the list from 800 projects to 80. 

The result is faster execution and better concentration of resources on the important few, rather than the trivial many.

Sometimes less is more. 

"Lean closet"? Stop the madness.

Clothing company Cuyana advocates a minimalist fashion lifestyle, encouraging women to only buy quality items that they truly love. Rather than producing the cheap, replaceable items that dominate the market (think: H&M), Cuyana manufactures more expensive, but more durable, pieces. The company calls this shopping philosophy “lean closet.”

The timing for this philosophy couldn’t be better. Japanese organizational guru Marie Kondo’s approach to a better life through decluttering by (among other things) throwing away old or unloved clothing has become a sensation, spawning two best-selling books and an app.

Regardless of what you call it, lean thinkers will recognize familiar elements of 5S in all of this. And honestly, there’s nothing wrong with reducing the production of disposable crap and getting rid of stuff you don’t wear or use. But at the risk of sounding like an irritating schoolmarm, calling it “lean closet” does a disservice to the word “lean,” because it runs the risk of making people think that “lean” only means “less.”

Author and lean practitioner Norbert Majerus of Goodyear runs a terrific exercise in his lean workshops in which he has attendees pair up, stand face-to-face, and memorize the other person’s appearance. Then he tells them to face away from each other and make a change. Almost everyone takes something away—they remove their glasses, take off hair bands, pull pens out of their shirt pockets, take off sweaters, etc. Even though everyone is standing in a meeting room with pencils, notepads, highlighters, water glasses and the like, virtually no one picks up any of these items. No one adds anything to their appearance. As Majerus points out, when we think of change in a lean context, we tend to think we have to remove things. We have to reduce. We have to do without.

Obviously, eliminating waste is a central idea in lean thinking. But when “lean” is used as a synonym for “less,” it leads people to think that’s all there is. Less stuff in your house. Fewer clothes in your closet. It misses all the truly important aspects of lean—like, say, respect for people. Or problem solving. Or creating value for customers.

So, let’s call it “smart shopping.” Or “sustainable fashion.” Or “intelligent consumption.” But please take “lean” out of the closet. It’s a short step from there to the old joke that lean means “less employees are needed." And that's not helping anyone.

What is real fitness?

In Building the Fit Organization, I argue that organizations need to think about "fitness" -- flexibility, agility, and resilience -- rather than simply weight loss (i.e., cost cutting).

Now there's a new attitude permeating the world of physical fitness, which echoes my recommendations for organizational fitness. Athletes increasingly see exercise for sculpting the perfect body or for weight loss as less important than exercise for performance -- witness the growing ranks of people engaging in parkour, cross-fit, and acroyoga. According to the Wall Street Journal, 

"one of the key features of this new fitness movement is an emphasis on working out for performance and a rejection of the increasingly outmoded aesthetic of emaciation. When your focus shifts from your reflection in the mirror to how well you function in the world, a number of things happen. You may well look better naked, but you will also become more agile, more flexible, stronger, more confident and mentally sharper."

This attitude is consistent with where we're trying to go with lean. Rather than focusing on emaciation or accounting gimmicks that make the reflection in the books look good, we need to focus on the organization's function in the world. And if we achieve that, we'll be more agile, flexible, and stronger. 

The problem is that after every financial downturn, companies focus on cost cutting. They lay people off, close offices, and cut back on all possible expenses. But the vast majority of these organizations tend not to maintain their new expense base. More often than not, there’s no concomitant reduction in work — it simply gets shifted around after layoffs. Employees take on the additional responsibilities of a colleague or a boss. People work longer and harder, but because the underlying processes aren’t functioning any better, and because these companies haven’t focused on improving how they operate, work doesn’t get done faster, better, or more easily. Eventually, after the financial crisis passes, the organization brings back the coffee machine, permits color copies, and caters meetings again. The company lifts travel restrictions. Gradually, the company hires people to refill the roles that were eliminated earlier. The expenses come back, and the organization is just a market downturn away from another round of layoffs and cost cutting. In fact, McKinsey estimates that only 10 percent of cost reduction programs show sustained results three years later.

The alternative is to focus on improvement, not on cost cutting. In the world of physical fitness, that means learning and skill development: 

"The effort is about learning, not just pain. This was a foundational truth for the Greek gymnasion, which served as a place of both athletic and intellectual instruction. But ever since, it seems, we have tried to separate mind and body, to the detriment of both. One of the key insights of the new attitude toward fitness is that mind and body are best improved through the labor of skill development. This notion is being articulated more these days, but it has been implicitly understood for centuries."

In the world of organizational fitness, that means operational excellence. It means examining the processes by which the organization conducts its business. It means focusing on the means by which work is done, not the (financial) ends. A corporate “fitness program” develops employees’ capacity to solve problems and improve performance, with the long-term goal of increasing the value provided to customers. And with greater customer value comes improved financial performance. In fact, cost reduction is an inevitable outcome of the pursuit of fitness—but cost reduction is not the primary objective. 

For too long, athletes have separated the mind and the body in their training. Similarly, for too long business leaders have separated the means from the ends in their desire to achieve financial results. Neither has worked very well.

Let's follow the lead of the cross-fit, parkour, and acroyoga athletes and labor for skill development. 

Come to my A3 Thinking Class on Jun 28 in Oakland!

I'm teaching a full-day class on A3 Thinking & Problem Solving for the Association of Manufacturing Excellence on June 28 in Oakland, CA. 

Most people work in organizations that can’t effectively deal with gaps between desired and actual performance, because the company lacks effective problem-solving processes.

A3 Thinking is the antidote. A3 Thinking is a powerful management tool that teaches clear thinking, engages people at all levels of the organization, and increases the likelihood that any proposed changes will actually be effective. 

The class is geared toward anyone who wants to lead and manage their teams more effectively, and to those who wish to improve their own critical thinking and problem-solving skills.

Read more about the content of the class, logistics, and fees on the AME website.

NOTE:  We will be using Managing to Learn by John Shook as a textbook. You don’t need to read it in advance, but please purchase it prior to class.

What Tom Brady can teach you about standard work.

[Note: this article was originally published at The Leadership Network.]

He’s one of the most decorated quarterbacks ever to play the game. Indeed, six Super Bowl appearances, four wins and two Most Valuable Player awards have assured Tom Brady his place in the pantheon of football greats. He can also teach you about standard work.

Tom Brady, the quarterback for the New England Patriots, is unquestionably one of the greatest football players of all time (and as a lifelong New York Jets fan, growing up in a family of Jets fans, you have no idea how much it pains me to admit that). Brady is also remarkably durable: aside from losing a full season for knee surgery, he’s missed only one game during his 15-year career. Yes, he’s talented. Yes, he’s surrounded by skilled players who both protect him and catch his passes. Undoubtedly, he’s lucky as well. But Brady’s success is also due to an unbelievably methodical, structured approach to skill development and physical fitness. A profile of Brady in Sports Illustrated explains his process this way:

Brady is a quarterback whose daily schedule, both in and out of season, is mapped clearly into his 40s. Every day of it, micromanaged. Treatment. Workouts. Food. Recovery. Practice. Rest. And those schedules aren’t just for this week, this month, this season. They’re for three years. That allows Brady and [Alex] Guerrero [Brady’s body coach] to work in both the short and long terms to, say, increase muscle mass one year and focus on pliability the next. “The whole idea is to program his body to do what we want it to do,” says Guerrero. “We don’t let the body dictate to us. We dictate. Everything is calculated.”

. . . The in-season portion of his regimen is designed to run through Super Bowl Sunday; if New England’s campaign ends in a playoff loss. . . Brady completes every drill, every throw, anyway.

That’s their system. From the outset the principles made sense to Brady, who had spent the early part of his career like most athletes. He’d worried about injuries after they happened. He’d focused on rehabilitation as opposed to preventative maintenance.

If this doesn’t epitomise standard work, I don’t know what does.

Building—and leading—an organization requires a similarly structured approach to work. And yet, most leaders don’t have this kind of structure in place. Many haven’t identified what their high-value activities are, and fewer still reflect upon how they’ve actually spent their time during the year. Their calendars are largely filled with standing meetings, obligatory travel, and corporate events, with the balance of the time dedicated to fire-fighting and email management. Most executives don’t even have a clear plan of how they want to spend their time each year, aside from a vague and wistful sense that they’d like to spend less time in meetings, and more time thinking deeply about where they want to take the company.

Of course, building and leading a fit enterprise is much more challenging than maintaining a fitness program, no matter how scientifically complex it is. Take Brady’s strict regime for example. A freak injury may derail his training, but ruptures and tears aside, his plan is relatively easy to follow providing he maintains his discipline throughout.

There’s a temptation to think that a manager’s (to say nothing of a higher level leader’s) job is too complex to define best practices, that the issues he grapples with are so fluid and so diverse that the job necessitates constant improvisation and adaptation. There can’t be best practices for a leader.

That’s flat-out wrong.

Standard work for a leader doesn’t look like the detailed job instructions for someone working the fryer at McDonalds. A leader’s work is highly variable, and often chaotic. But it’s nonetheless possible to create pockets of stability within the chaos. Indeed, leaders hoping to achieve Tom Brady’s level of excellence need to create and deploy standard work at all levels of the company. Just as Brady would have struggled to stay healthy and reach his staggering level of excellence without following his standard work, so too will a leader fail without standard work. That means the leader has fixed times to walk the shop floor so that she can see the work being done, learn about improvement projects underway, and provide coaching on structured problem solving. It means discussing quality, safety, cost, delivery, employee morale, daily stats and targets with his team. It means actually working shoulder to shoulder with employees to more deeply understand what they’re dealing with, so that he knows what needs to be improved.

Making these types of activities standard ensures that the leader’s work gets done the right way, at the right time. Beyond that, it serves to double check that the tasks she spends her time on are the tasks necessary to support the organization’s strategic goals, not just the daily “administrivia” that chokes so many leaders’ days.

So next time you tune into a New England Patriots game, keep a close eye on Tom Brady. Watch how he methodically surveys the field. Notice his practiced footwork. Witness the controlled precision of his movements. Observe the trajectory of the tightly spiralled ball as it finds its target—and marvel at the countless hours of disciplined practice, the standard work, that makes it all possible.

Reflections On Hansei

Here’s how Escoffier teaches you to make hollandaise sauce:

1. Set out your mise-en-place.
2. Whisk yolks of three eggs with 22 milliliters of water in a bain-marie until thick (about 4 minutes).
3. Add about 20 milliliters of lemon juice and stir.
4. Melt 110 grams of butter and whisk in.
5. Add fleur de sel to taste.

Oh, I’m sorry. Was this confusing because of the French? Or the metric measurements? Would it have been easier if it were in English and Imperial units? 

Isn’t this essentially what we’re doing to our employees when we introduce lean with talk about kanbans and gembas, about kaizen and hansei? Wouldn’t it be easier for learners to grasp the critical concepts of lean if we use our own language to communicate these ideas?

When we bring lean to an organization, we’re asking people to do nothing less than work differently, act differently, and even think differently. That’s a pretty heavy cognitive lift for anyone. And yet, rather than making it easier by using language, examples, and metaphors that people can relate to, we tend to use Japanese, the language of Toyota. Lean consultants and leaders will argue that it’s often necessary to use Japanese because (1) lean was developed by Toyota in Japanese, and (2) for some of the words, there’s no exact English (or Dutch, or Portuguese, or French) translation.

Of course, if we follow that argument, students should be learning calculus in German (Leibniz); geometry in Greek (Euclid); how to construct fireworks in Chinese; and how to make Hollandaise sauce in French (see above).

But of course, that’s absurd. When we teach difficult skills, we use the language of the learner. Acquiring the skill is hard enough. There’s no reason to compound the difficulty by adhering to the original language like it’s some holy scripture. 

Some people argue that certain nuances are lost when we translate the original words into another language—and that’s true. But that hasn’t stopped you from enjoying Crime and Punishment, Madame Bovary, or the Odyssey in translation. Remember, you’re not going for a Nobel Prize in literature here. You don’t need absolute fidelity to the original text.

That’s why companies that are successfully pursuing continuous improvement adapt the language so that it resonates with their employees. For example, Quality Bike Parts, a distributor of bike parts and accessories in Minnesota, doesn’t talk about kaizen and kaikaku. They talk about “little GRIPS” and “big GRIPS,” where GRIP stands for “great results from improved processes.” And of course, grips make sense in a place where everyone rides bikes.

Make the language work for you. As long as you honor the underlying principles, you won’t be struck down by the ghost of Taiichi Ohno by using your native language.

So let’s dispense with the hansei, and start being more “reflective” about the way we talk about and teach lean. 

[This article first appeared at the Lean Post]

Let's Get Serious About Lowering the Water Level

[Note: this article first appeared in Industry Week]

When it comes to the shop floor, every organization embracing lean uses Toyota’s rocks and lake metaphor to talk about improvement: You lower the water level (inventory) to reveal the rocks (obstacles) that prevent you from reaching the ultimate goal of 1x1 flow.

People constantly strive to remove inventory and other buffers that hide problems in the various production processes.

Now, consider what happens in the office. Since knowledge workers aren’t dealing with physical items as workers on the shop floor do, the resource they use as a buffer -- their version of inventory -- is time.

But unlike operators in a factory, office workers and executives don’t lower the water level at all. In fact, it’s just the opposite. The more problems they have with flow (lousy meetings, unexpected firefights, etc.), the more buffers they add. They raise the water level! They stay at the office till 9 p.m.; they come to the office on Saturdays; they join conference calls while on holiday.

This makes no sense. If you’re going to preach the gospel of lean, everyone in the choir should be singing from the same page of the hymnbook—whether they’re wearing blue collars or white.

We often talk about office workers as though they deserve special treatment and different rules from shop floor workers. It’s true that their work is (often) more variable than the work on the production line. But this argument ignores the truth that they’re still production workers -- a different kind of production worker, but production workers nonetheless. And that means that we’re obligated to approach their work, and solve their problems, in the same way that we approach the work and the problems on the shop floor.

In Toyota Kata, Mike Rother argues that we should define target conditions for our processes. We probably won’t reach that target condition, but the attempt to solve the problems between our current state and the Promised Land will take us in the right direction.

Imagine what would happen if you set as a target condition something like, “Go home at 5 p.m.,” or “Only work 50 hours during the week.” There are countless obstacles to reaching that target, and the innumerable problems on the shop floor, with HR issues, with customers and suppliers, will almost certainly keep you from achieving that goal.

And yet.

And yet, if you actually defined that as a target condition, imagine how you would approach the waste that floods your day -- the meetings that start late with unprepared participants; the “reply-all” emails that everyone complains about; the torturous annual performance evaluations that don’t do a terribly good job of helping employees grow; the unnecessarily formal presentations you have to prepare on company-approved PowerPoint templates; the tracking and monitoring of vacation requests. You’d figure out ways to minimize or eliminate these low or no-value added activities rather than simply accepting them as an inevitable part of business life.

The lean mindset that is so valuable in improving the work on the shop floor is just as valuable (if not more so) in improving the work in the office. It’s time to start lowering the water level in the office, too.

What you can learn from football coach Bill Walsh

As a knowledge worker, the choices facing you each day can be overwhelming. You have nearly infinite options on what to work on and in what sequence—and that flexibility can be paralyzing. As Columbia business school professor Sheena Iyengar pointed out, when confronted with too many choices (she believes that the optimal number is about seven), people shut down and default to the easiest, most familiar, course of action—which is often doing nothing. 

That's why standard work is so important for leaders. It provides guidance and guardrails for your daily activities so that you don't end up mired in "administrivia," or so overwhelmed that you end up watching cat videos. 

Bill Walsh, the football coach who led the San Francisco 49ers to three Super Bowl championships, was famous for scripting the first 20-25 plays of each game for his team. “Pre-determining” the early phases of the game provided multiple benefits—the ability to practice the exact sequence of plays before the game, and the ability to see how the opponent responds to certain formations—but I would argue that it had another advantage. It reduced the complexity of the game and the number of decisions that both Walsh and his quarterback faced. Scripting the first plays of the game is akin to what Columbia University social theorist John Elster calls “self-binding.” Like Ulysses lashing himself to the mast of his ship in order to prevent himself from succumbing to the Sirens’ song, Walsh made the advance choice to limit his (and his quarterback’s) choices, and reduced the cognitive burden they had to deal with.

Leader standard work functions the same way. It reduces the complexity of your day and the number of decisions you face. You know you have to walk the floor, have to coach a team member, have to review cost and delivery with your team, etc. 

Your work consists of much more than emails, meetings, and firefighting. The predictable pockets of stability in your day created by standard work make it easier to, in the words of Steven Covey, "keep the main thing the main thing."

Kaizen Means You Care

[Note: this article originally appeared at The Lean Post]

Peter is a 63 year-old man who operates the punch press at his company. At the end of the day, he drags a 50-pound garbage can through the building and out to the dumpster, a distance of about 75 yards.

His colleague, José, is about twenty years younger. Peter and José have been working together for years. Whenever possible, José tries to take out the trash because he doesn’t want Peter to hurt his back—but work being what it is, that doesn’t always happen.

I’m shepherding this company along its lean journey, and we’ve started by asking people to simply fix what bugs them. We’re not making people sit through lots of classes, we’re not doing 5S, we’re not trying to “move the needle” on the business—we’re just trying to get people to see that the way things were yesterday isn’t the way they have to be today. We want people to know that they have the power to make things better and easier for themselves. We often forget that’s the real first step in establishing a culture of kaizen—just knowing that you’re allowed to improve things.

Peter and José are men of few words. Neither said a word during the kickoff meeting, nor at any of the training sessions. I figured that they were resistant to change, or that all those years of punching the clock sapped them of any desire to do anything other than the bare requirements of their jobs. I assumed that they weren’t going to be active participants in the lean transformation.

So I was surprised when I saw an idea card on the improvement board from José. He wanted to put wheels on the garbage can in the machine shop. When I asked José about his suggestion, he said simply, “I’m worried about Peter. He’s 63, and I don’t want him to hurt his back dragging the trash to the dumpster.”

Lean leaders, and lean consultants (like me), often talk about the organizational benefits of kaizen: lower costs, bigger profits, shorter lead times, higher quality, etc. But the truth is, those benefits are pretty far removed from the daily lives—and wallets—of the people working in the company. What we don’t talk about quite as much is the human reason that kaizen is important. When we do kaizen, we make work easier for ourselves and for others. We use our creativity to help others. And as social creatures, that’s a lot more salient and inspiring than an increase in the company’s earnings per share. There’s a reason that Shigeo Shingo said that the four goals of improvement—easier, better, faster, cheaper—are listed in the order of priority.

The wheels that José put on the garbage can will have absolutely zero effect on the company’s financial performance. But it’s a first step on the road towards building a culture of kaizen. And even more importantly, it’s a way of showing that he cares.

Ditch the Diet. And the Layoffs.

If you're trying to get physically fit, don’t try to lose weight by going on a diet. 

If you’re trying to get organizationally fit, don’t try to cut costs through layoffs. 

In my new book, Building the Fit Organization, I argue that real fitness isn’t defined by overall weight, or by body fat percentage. Sure, if you’re 5’6” and weigh as much as a double-door Sub-Zero refrigerator, you should probably put down the box of Twinkies. But if you’re a 5’10” fashion runway model tipping the scales at 102 pounds soaking wet, you’re probably not very fit either. Skinny, yes. But not especially fit. Real fitness isn’t just about body mass index. It includes cardiovascular capacity, muscular strength, and flexibility. You can’t develop those by dieting. 

There’s an organizational parallel here: a company can’t get fit simply by cutting costs, especially through layoffs. To be sure, it can improve its income statement in the short term by laying off workers, closing offices, banning color copies, and getting rid of the coffee machine. That’s not going to make the organization fit, however, because organizational fitness isn’t just about low expenses. It includes the ability to react quickly to market shifts, to create and deliver new products and services, and to continually improve process efficiency and effectiveness—all in the service of delivering greater value to customers. Cutting expenses as a way to organizational fitness is like cutting calories as a way to personal fitness. At its logical extreme, it results in corporate anorexia nervosa—a feeble organization filled with dispirited employees unable to compete in the marketplace and serve customers.

Organizations that simply cut expenses tend not to maintain their new weight either. More often than not, there’s no concomitant reduction in work—it simply gets shifted around after layoffs. Employees take on the additional responsibilities of a colleague or a boss. They work longer and harder, but because the underlying processes aren’t functioning any better, and because these companies haven’t focused on improving how they operate, work doesn’t get done faster, better, or more easily. Eventually, after the financial crisis passes, the organization brings back the coffee machine, permits color copies, and caters meetings again. Travel restrictions are lifted. Gradually, the company hires people to refill the roles that were eliminated earlier. The weight comes back on, and the organization is just a market downturn away from another round of layoffs and cost cutting. 

A new article from Knowledge@Wharton provides further support for my argument. The authors point out that there's precious little evidence that layoffs are good for operational performance or for long-term profitability:  

Contrary to popular belief, there’s not much evidence that layoffs are a cure for weak profits, or, to use the current euphemism, that they reposition a firm for growth going forward. . . . There is no evidence that cutting to improve profitability helps beyond the immediate, short-term accounting bump. . . . Employers also often underestimate the cost of layoffs in immediate financial terms, as well as in the lingering burden it places on remaining resources — both financially and emotionally. There is definitely a huge problem in HR generally that the stuff that is easy to put on a spreadsheet outweighs the stuff that isn’t.

And then, of course, there's the downstream consequence of those layoffs:

But what does that [the short term cost reduction] mean two or three years from now when the firm is growing and now has to ramp back up by hiring a bunch of people? Now the firm must incur all these costs to hire and train workers. In addition to the laid-off employees. other workers may now leave voluntarily, all of which is disruptive for the firm and lowers productivity. Layoffs may look good on paper because they have an immediate effect on costs. Yet in reality there are a lot of costs that layoffs impose on firms that might not show up on an income statement quite as clearly.

What's the alternative? Just as a person striving for true physical fitness has to increase strength, cardiovascular capacity, and flexibility, so too must an organization focus on increasing value delivered to customers. Wayne Cascio, a professor at the University of Colorado at Denver points out that companies that that have avoided layoffs in times of financial difficulty position themselves for greater growth when the good times return: 

[They] come out the other side with positive results. "He points to Southwest Airlines, which, like the rest of its industry peers, suffered during the Great Recession. People were not flying as much, so they took their job recruiters — who are typically great with people interaction skills — and instead of laying them off, redeployed them into frontline customer service jobs, which made flying on Southwest a better experience for its customers. And as the economy recovered they transitioned back to their original jobs.”

Another approach was taken by Steve Jobs, Cascio says, who took advantage of downturns to focus on innovation. “When the dot.com bubble burst, he said, ‘We are going to invest our way through the downturn.’ Look back at when the introduction of the iPod was and the iPad. It turns out shortly after the 2001 recession ended was when the iTunes Store opened. Then after the Great Recession, they bring out the iPad in 2009 and 2010. So while the economy was bad and people were being laid off, Apple was actually investing in R&D. 

And of course, we can't ignore the human element, which is nearly impossible to capture in a spreadsheet. Loyalty, morale, commitment to one's job and one's company don't appear in a company's cash flow statement. Yet according to Wharton management professor John Kimberly,

if a company can manage through a rough patch with creative strategies without laying off, employees will emerge with a greater sense of loyalty, and that loyalty will pay off for the company. “I believe at the heart of the issue, that is going to motivate outstanding performance, in any company, no matter what business they are in.”

If you're going for fitness -- personal or organizational -- you've got to do more than cut your food intake or cut your employees. Long-term, sustainable fitness requires that you learn to increase value to your customers. Any other approach will give you a short term thrill, but leave you too weak to compete in the future. 

Shameless Self Promotion: Lean Leadership Institute Podcast

Chris Burnham of the Lean Leadership Podcast interviewed me recently. We covered a lot of ground that I haven't spoken about before, including: 

• How my background as a running coach has influenced my lean journey
• The need for leadership to act and think differently as well as front line associates in applying lean principles
• An experience I recently had with a simple idea that really captures the true spirit of kaizen
• How a lot of people get lost on their lean journey by getting tripped up by 5S
• The generosity of the continuous improvement community
• The power of benchmarking
• The need to overcome learned helplessness

Check it out here.

The simple improvement board. Not so simple.

Organizations often start on their lean journeys with visual boards to track improvement projects. My recent experience with a new client, however, has shown me that it’s better to start with something much simpler: a basic suggestion board dealing with simple problems. No, implementing these ideas won’t move the needle on the business’s financial results, but starting with a basic board like this is a critical foundational step.

Here are four reasons why these boards are important.

1. They create the right mindset and culture.
It takes a long time before an organization reaches the point where “no problem is a problem.” In most companies, problems are something to be hidden or ignored. Sharing them can be embarrassing, if not threatening. Having people post improvement ideas about how to make their own work easier or faster—to fix what bugs them—is a powerful way to getting them more comfortable with the concept of making their issues visible, to both their peers and to leadership. This kind of simple board is an important first step to creating a culture in which it’s okay to make problems visible.

2. They keep ownership of the problem where it belongs.
Well-designed suggestion cards always have the employee’s name at the top to reinforce the understanding that the employee—not management—owns both the problem and the countermeasure. In this way, the card creates a profoundly different dynamic from a simple complaint to a supervisor. That kind of conversation typically results in the problem being dropped onto a manager’s to-do list, where it may or may not get done in a timely fashion.  Leadership must support the employee in solving the problem, of course, but responsibility lies with the worker.

3. They provide an opportunity for learning how to solve problems.
Improvement cards provide a chance for managers to help employees develop problem solving skills. Because workers retain ownership of the problems, they have to think through root causes and create possible countermeasures. Even if the problem is simple (say, needing more light at their workspace) they can be coached through the development of alternative solutions and assessment of the consequences of each choice—which is a useful habit when the problems they’re solving become more complex.

4. They deepen leadership understanding.
The TV show Undercover Boss depicts situations where executives are comically (tragically?) ignorant of the reality of frontline workers’ daily lives. But even in a small company, it’s easy for the leadership team to lose touch. Even at the earliest stages, when improvement boards deal with simple issues that make work more difficult for the employees, the suggestions—and the conversations around them—give leadership a deeper understanding of what’s happening at the gemba, and develop closer ties and greater engagement throughout the organization.

You don’t start training to swim the English Channel with a five-hour ocean swim. You start with five laps in your local pool. In the same way, you shouldn’t be in too much of a hurry to set up elaborate visual management systems to track and control operational processes. Your organization probably lacks the skills and culture to support it. A simple suggestion board for improvements is a great way to lay a solid foundation for the lean journey ahead. 

Workers aren't lazy...

. . . at least, not the ones I know. Although I can't really speak for the specific ants mentioned in today's Wall Street Journal, which reports that Japanese researchers have found that 20 to 30% of ants in a colony remain inactive while other ants work. The Journal extrapolates from this study to suggest (humorously, I suppose) that a reservoir of lazy workers may be key to an organization's long-term survival. 

Sounds to me that the ant world knows that slack is valuable in any system -- from highways, to coffee shops, to your accounting department. When utilization crosses a certain threshold, the time required to get essential business done increases exponentially. 

Most companies understand this concept as it applies to machines and manufacturing processes, but it's often ignored when considering the workload on people. In a misguided quest for increased "efficiency," we overload people with work, eliminating their slack time -- and thereby cross the utilization threshold beyond which response time plummets. On an individual level, that overload appears as calendars packed with meetings, projects, and tasks, guaranteeing that the inevitable glitch (a meeting that runs long, a software snag, an unexpected problem with a customer, etc.) will create a cascade of failures in our ability to meet deadlines and deliver on time.

More importantly, the absence of slack makes it nearly impossible to implement lean. Think about the principles that Jeff Liker wrote about in The Toyota Way. Principle #5 is "Build a culture of stopping to fix problems." Good luck doing that if there's no slack in the organization. Or Principle #14: "Become a learning organization through relentless reflection and continuous improvement." If you have no time for reflection, you can't possible become a learning organization. Even Principle #13 ("Go and see for yourself") requires time -- and slack -- to get out of the office or the conference room.Without slack, you just can't build a culture of continuous improvement. 

What's happening in your product development team, your finance group, your organization? Do you have enough extra workers -- or more to the point, do they have enough slack in their workdays -- to accommodate new demands, respond to emergencies, or reflect and innovate? Or are you running the team with so few people, or have overloaded them with so many initiatives that there's no slack in their schedules?

Organizational Fitness + Fast Food = Go Figure

I’ve just learned that organizational fitness and fast food are not, in fact, incompatible.

Pal’s Sudden Service, a fast food chain in Tennessee and Virginia, demonstrates the value of standard work and coaching (core principles #4 and #6, respectively, from Building the Fit Organization) in building a company that outperforms other fast food chains in speed, accuracy, customer loyalty, and employee retention. In fact, Pal’s is so good that it won a Baldrige Quality Award for its service. It serves drive-through customers four times faster than the next fastest competitor, with 10 times greater accuracy—a mistake only once in every 3,600 orders.

(Note: before you start firing off angry emails about the politics and gamesmanship involved in winning a Baldrige award, I know that the Baldrige award isn’t the be all and end all of quality, nor is it the same as a deep embrace of the Toyota Production System and lean. But as you’ll see, the company does an awful lot right in its pursuit of excellence and organizational fitness.)

The January issue of HBR has a short article on Pal’s, and the investment in employees is striking:

New employees get 120 hours of training before they are allowed to work on their own, and must be certified in each of the specific jobs they do. Then, every day on every shift in every restaurant, a computer randomly generates the names of two to four employees to be recertified in one of their jobs—pop quizzes, if you will. They take a quick test, see whether they pass, and if they fail, get retrained for that job before they can do it again. (The average employee gets 2 or 3 pop quizzes per month.)

“People go out of calibration just like machines go out of calibration,” CEO Crosby explains. “So we are always training, always teaching, always coaching. If you want people to succeed, you have to be willing to teach them.”

But the company doesn’t just test employees on their knowledge. Leaders are expected to spend 10 percent of their time on teaching, and to identify a target subject and a target student every day. Thomas Crosby, the CEO, realizes that leaders are by definition in a teaching role, so he formalizes and standardizes that responsibility.

In Building the Fit Organization, I argue that effective coaching relies upon three elements: going & seeing; showing respect; and participation. While I can’t speak to the last point in Pal’s case, it’s clear that managers go and see for themselves (it’s hard not to in a fast-food restaurant) and they clearly show respect for employees’ innate ability to learn and grow.

With the right leadership, fast food and fitness can coexist. 

Process ≠ Value

What’s the purpose of the much-reviled performance review? Or to put it another way, what’s the value created by a performance review? Most people would say it’s essential for improving individual performance and providing guidance for career development.

But I think that we’re conflating the process (the tool) with the value (the outcome). The annual performance review is no more necessary for improving performance than a pack of dogs is necessary to create a fox. In fact, in many ways it’s antithetical to the value we’re trying to create.

As W. Edwards Deming wrote in Out of the Crisis,

Evaluation of performance, merit rating, or annual review… The idea of a merit rating is alluring. The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise.

Or as UCLA professor Samuel Culbert said (somewhat more colorfully), “a one-side-accountable, boss-administered review is little more than a dysfunctional pretense.” The problem, of course, is that the system in which people work accounts for the vast majority of the individual’s performance. (In the Team Handbook, Deming estimated it to be 90 or 95 percent of performance.)

That’s why it’s heartening to read that starting September, Accenture will get rid of their traditional annual performance review. Instead, it will introduce a system in which employees get regular feedback on an ongoing basis from their managers after assignments. Like an increasing number of large firms (Microsoft, Gap, Medtronic, Adobe), the company realized that the enormous investment in time, effort, and energy wasn’t yielding enough value. Management research firm CEB found that nearly 90 per cent of HR leaders say the annual review doesn't even yield accurate information—and this for a process they estimate costs managers about 200 hours per year.

Leaving aside the specifics of the performance review, this move should serve as a reminder that we shouldn’t equate our existing process with the value we’re trying to create. It’s one way to create that value, but not necessarily the best way. (And in the case of performance reviews, quite possibly counterproductive.)

Now, while it’s true that lean thinkers are accustomed to thinking this way about manufacturing or service processes, we often forget that the way we create and share information—which is the primary task of knowledge workers—is also a process, and we should bring the same improvement mindset to this process as well. When you consider how unhappy most people are with the meeting and email culture in their organizations, why don’t we bring a focused improvement mindset to fix it? Do you really need a 60-minute meeting with nine people in the room to disseminate information, or could you use an internal blog? Is dumping an unending stream of tasks via email on a person the best way to distribute work, or might a team-based kanban be better? Is a two-day strategy retreat the most effective and efficient way to set organizational direction for the next year, or is another form—strategy deployment, play-to-win, etc.—better?

Let’s untether the process and the outcome. The value is independent of the process. When we see that our current way of doing something is only one way of creating that value, we’re free to find a different—and better—way. 

Let's Stop Being Hypocrites: Work is Work

Imagine going to the shop floor and learning that you missed your production target because the line started 10 minutes late when one of the workers was late for her shift. Or finding out that you missed your production target because one of the workers didn’t know what line he was supposed to be working on, and what specs the customer required. Or finding product defects because one of the workers wasn’t paying close attention to the product—he was talking to his mother on the phone while he was performing his job.

Ridiculous, right? Intolerable, right? You would never accept these problems in a factory.

So why do you tolerate the same issues in the office environment? Meetings start late because people don’t show up on time. When they do show up, they’re often unprepared. They miss important issues because they’re checking email. Outside of meetings, many people don’t even know what they’re supposed to do that day—they respond to the latest fire or just tackle the easiest items on their infinite to-do lists rather than holding themselves accountable for getting their important work done on time.

We often talk about knowledge workers as though they need to be treated differently from shop floor workers—They’re creative! Their work is unpredictable! They’re not machines! They’re C-suite executives!—but the truth is that they’re still production workers. And that means that we can approach their work, and solve their problems, in the same way that we approach the work and the problems on the shop floor.

Take, for example, meetings that start (and end) late. Newton did not discover the Law of Late Meetings when the apple fell on his head—they are not an inescapable reality. It’s simply a problem, and there’s nothing stopping you from sending in your SWAT team of lean six sigma obsidian belts to work on it. My guess is that you’d do it if your shop floor didn’t start on time everyday, or if a production cell didn’t run the target number of parts in an hour. 

Or, consider how rabidly lean thinkers focus on increasing the amount of value-added work and reducing the waste when analyzing a physical production process. They’ll eagerly deploy their time-motion studies, standard work combination sheets, and spaghetti charts in an effort to shave off half a second. But when was the last time we looked at the way most VPs spend their days? How much time is frittered away on emails with no value? How much time is spent clarifying or repeating requests? How much time is spent in unnecessary or poorly run meetings?

If we’re going to obsess about creating value for our customers, let’s start talking about how much of our own time we spend on value added work. According to my (very informal and very unscientific) surveys, most mid- to high-level office workers only spend about 20-30% of their day on value creating activities. The rest of their time is spent deleting reply-all emails (and griping about it).

The lean tools that are so valuable in improving the work on the shop floor are just as valuable in the office, where the work is harder to see. Leader standard work, for example, is a powerful way of reducing the “administrivia” that often wreaks havoc on your days and prevents you from engaging in coaching and problem solving with your team. Standard work for internal communication creates clarity around which communication medium you should use for different types of issues (Urgent issues? Call the cell phone. Complex issues? Face to face is best. Emotionally fraught matters? Email = bad.)

Visual controls can help drive improvement in the office environment. Scorecards for meetings enable you to spot problems (“The marketing team meeting never starts on time, while the finance meetings don’t always have clear action items.”), and develop countermeasures. Simple tally sheets and pareto charts can highlight the types of interruptions that destroy flow in your own work. And even a simple chart showing your target and actual production for the day, along with comments about what went wrong, can help you begin to analyze and improve the way work is done.

It’s time to look in the mirror and start applying lean tools to yourself and your own work. Just because you’re salaried and don’t cost the company overtime when you work at night or on the weekends doesn’t give you a free pass. 

And worse: waving the lean flag and demanding improvement on the shop floor without inspecting your own work environment makes you a hypocrite. And no one likes hypocrites.

(This article first appeared in the Lean Post.)

Rotman School of Management

I'm proud to announce the Winter issue of the Rotman School of Management magazine features an article excerpted from my new book. 

In it, I argue that "fit" companies don't get that way by accident: they intentionally pursue a course of action that makes them stronger and more agile over time. I offer nine steps for creating a culture of continuous improvement. Of course, in the end, the biggest benefit of embracing this approach is not just improved processes and better-quality outputs: it is the growth and development of your employees. 

Read more (and purchase the article) at the HBR website. 

Responsibility Without Authority

Responsibility Without Authority

My friend Sara runs a rapidly growing non-profit in NY. They’ve gone from 5 employees to 55 in the past 18 months. Despite the increased staff, decision-making is more sclerotic than ever, she and her executive team are still consumed with trivialities, and wide-spread frustration is growing over the organization’s lack of nimbleness.

Her situation reminded me of a story I heard about James Treybig, the president of Tandem Computers. He once called a meeting with the engineering leadership team to find out why, when there were 20 people in engineering, the team regularly performed miracles. But three years later, with 300 people in engineering, it seemed like nothing was getting done.

Probably you’ve seen the same thing in your own organization—yet I don’t think that this is an immutable fact of life, on par with Newton’s Laws, or the impenetrability of your medical insurance EOB statement. And while I can’t speak for Tandem, in Sara’s case, the problem definitely isn’t due to a bloated organization loaded with corporate fat.

The truth is that when responsibility doesn’t equal authority, you’ve got problems. Sara beefed up the organization in order to relieve the exec team of the burden of dealing with the innumerable small, daily decisions that devour time like the Eighth Plague: which type of desktop inboxes to buy. Which water bottle style to give away at a fund-raising event. Where to host the holiday party. Whether to use royal blue or slate blue for highlight trim. She wrote job descriptions that specified responsibility for managing these decisions, and hired people for the positions.

Sounds good. Except that the job descriptions didn’t explicitly give them the authority to make these decisions. Further, she didn’t coach the leadership team to delegate that authority. The predictable result? The myriad daily issues still come bubbling up to the leadership team’s level—but now each decision takes even longer, because approval for each one requires a meeting between a senior leader and her subordinates. Slower decisions and more time sucked up in meetings: a double loss for Sara.

In some ways this situation is a more nefarious version of the founder’s dilemma—in which an entrepreneur’s stranglehold on decision-making, so helpful in launching a company, ends up impeding its long-term growth. Sara’s situation is worse because it looks as though she’s avoiding the problem—after all, she’s just hired a bunch of people to handle these decisions. Unfortunately, she’s only exacerbated the situation by increasing headcount and impeding execution.

At Sara’s organization, the mismatch between responsibility and authority created bottlenecks. But this kind of mismatch between authority and responsibility typically creates different kinds of problems throughout an organization:

• Low Responsibility, Low Authority: here’s the classic recipe for apathetic, demotivated workers. Customer service people who don’t have the power to solve problems. Assistants who don’t get one-on-one time with their execs. These are the people with glazed eyes waiting for the five o’clock bell to ring, who have no energy or desire to help improve the company.

• High Authority, Low Responsibility: here’s the blueprint for installing a tyrant of minutiae. The person in finance who insists that you fill out your travel expense form in blue ink, not black—or for that matter, that you use their form, instead of your spreadsheet version of it that does the math for you. The person at the DMV counter who sends you to the back of the line because you forgot to put your middle initial on form 2976A/3. These people make life miserable for everyone and will never leave, because they’ve built a comfortable empire.

• High Responsibility, Low Authority: this is Sara’s world—the grey world of frustrated strivers. Nurses who can’t make changes to procedures that would allow them to spend more time with patients. Product developers who are told to just make what the sales department demands. You can find these people polishing their resumes as they look for another job.

• High Responsibility, High Authority: this is where you want to be. They have responsibility for a job, and the authority to accomplish it. These people are able to contribute to growth, improve performance, and move the organization forward.

Here’s the thing: the apathetic, the tyrants, and the frustrated—they could be anyone in the company. The engaged, committed workers are no better than the others. They’re just in jobs that allow them to exercise autonomy, achieve their goals, and strive for greatness.

Ceding ownership for decision-making is hard, but totally worth it. Sara and her executive team are now rewriting job descriptions to better match responsibility and authority. It’s an uncomfortable process, because it means yielding ownership of issues that they’ve always handled. But they’re already starting to see faster execution, higher morale, better collaboration among departments, and a drop in the number of meetings they need to attend.

Take a look at your direct reports: do they have authority commensurate with the responsibility you’ve given them? If not, it’s worth the time to revisit their jobs and see if you can bring those two components into balance.

What's a Fit Organization?

Recently, Matt May was kind enough to interview me about my new book for his blog. You can read my eloquent response to his questions here, Or, if you're more of a visual person, check out the inimitable Todd Clarke's one-page visual summary of my ideas below. He does a wonderful job of distilling blog posts, books (and really, any kind of dense intellectual content) into elegantly simple designs. You can see all of his work here.