The Saddest Words

The saddest words are these: “no one listened to me.”

No, this is not the title of a country song. These are the words of a front-line worker at a company I visited recently: “I’ve been complaining about this to the plant managers for two years, but no one listened to me.”

Recently, I was helping a client launch 5S in one of their production cells. At the pack station, I noticed that the worker had to bend over double to reach the Styrofoam packing blocks in a large cardboard box. She explained that she wasn’t allowed to cut the box down as they used up the material. Apparently, the company returned the empty boxes to the supplier, which were then reused for the next shipment back to the company.

She didn’t know anything about the arrangement—who decided it, how much money it saved, what the options were—all she knew was that getting packing material out of the boxes was hard work. When she told her supervisors and managers that the box recycling policy made her job harder, they didn’t do anything about it either—nor did they explain why the policy was important. From her perspective, no one listened—which is a stunning display of disrespect for people. (Actually, that’s not quite true. The old policy forbade her from even breaking the boxes down, so her work area was littered with empty boxes that she had to walk around. Finally, someone allowed her to at least break down the boxes so they didn’t take up as much space.) 

The good news is that the plant manager and the new VP of Operations participated in the 5S, and when they saw the box issue, they immediately went to purchasing to understand the whole story. Within three hours, the policy was changed, the operator was allowed to cut down the boxes, and we set up a gravity feed system for the Styrofoam packing blocks. The story had a happy ending.

But the company was lucky. This operator hadn’t given up yet. She still had the desire to make her own work, and the overall operation of her cell, better. You can imagine, though, that for every person like her, there’s at least one other who has learned from experience that the company doesn’t value his opinions. Those people have given up—they disengage from their work, punch their time clocks, and don’t try to make things better. Why bother? They know that no one will listen to them.

There are only so many times that a worker can be ignored until they finally stop trying. Then you’re left with a bunch of hands and no brains in the company, and wondering why the market is ignoring you. 

Small Steps or Big Steps: What’s the Right Way to Begin Improvement?

I’ve been struggling to resolve two conflicting facts:

• Science has shown that incremental change is both easier for people and more sustainable than dramatic change.
• Art Byrne has had undeniable business success by starting with dramatic change.

For those who don’t know, Art Byrne has a remarkable track record of success leading lean transformations at Danaher, Wiremold, and as a private equity investor at JW Childs. He describes his “shock and awe” approach (my terminology) in his excellent book The Lean Turnaround, where he takes the company through several week-long kaizen events. To be sure, there is some up front training, but the emphasis is on starting the lean journey with kaizen events. Operational and financial improvements are rapid, dramatic, and lasting.

But I’m struggling to reconcile his success with everything I’ve seen and studied, which runs counter to Byrne’s experience.

First, build organizational muscles
As I wrote in my book Building the Fit Organization, you don’t go into gym trying to dead lift 300 pounds on the first day, or try to run a 20 miles in your first marathon workout. You build your way up to those levels. In the same way, I believe that you have to develop the organizational muscles required for continuous improvement through small steps. Trying to improve productivity in a process by 25% on first try is (generally) a recipe for failure and frustration—notwithstanding Byrne’s success with that approach.

Mark Rosenthal, a lean thinker whom I admire, recently wrote:

During the [kaizen] event itself, the short time period and high expectations puts pressure on people to just implement stuff. People are likely to defer to the suggestions and lead of the workshop leader and install the standard “lean tools” without full understanding of how they work or what effect they will have on the process and people dynamics. . . .[as a result], when new issues come up, they are going to revert to what they know.

The data on change management are consistent: about 70% of change initiatives fail, despite the plethora of books, conferences, and scholarly papers dedicated to the subject. The roots of those failures are varied and deep, but I believe that one of the issues is the attempt to do too much too soon—the organizational equivalent of going out for a 20 mile run on the first day of training. Particularly in today’s more global business environment, with diverse teams working in different countries (to say nothing of different cultures), making and sustaining change is an order of magnitude more challenging than it was when even large enterprises were primarily located in one country.

Rosenthal advocates for small changes—in his case, the kind of changes that are made through the use of the Toyota kata approach:

When small changes are made and tested as part of experiments vs. just being implemented, then there is less chance of erosion later. Rather than overwhelming people with all of the problems at once from a bunch of changes, one-by-one lets them learn what problems must be dealt with. They have an opportunity to always take the next step from a working process rather than struggling to get something that is totally unfamiliar to work at all.

Avoiding fight or flight
Another powerful factor working against successful change is the short-circuiting of higher-level cognitive thinking that happens when people face major change. Dr. Robert Maurer, a professor of behavioral science at UCLA, explains that no matter how well intentioned the change, it triggers the fight or flight response seated in the amygdala, the “pre-historic” part of the brain. He’s found that it’s easier to get patients to change unhealthy parts of their lifestyle through small, incremental modifications than through wholesale changes.

For example, he had one patient begin an exercise program by simply marching in place for one minute in front of the television. . . then two minutes, then three, etc. Having her sign up for a six-month CrossFit class would have triggered the fight or flight response, but one minute of marching in front of the TV? It’s a small enough change that the amygdala didn’t take over from the frontal lobe.

The same dynamic occurs in the workplace: small changes circumvent the amygdala, making it easier for people to adopt and accept a new way of working. Paul Akers has done amazing work leading lean at FastCap in just this fashion. Rather than focusing on kaizen events, he asks each employee to figure out how to do their job just two seconds faster. Everyday.

The benefit of incremental change also ties into the findings of Professor Teresa Amabile. In her book, The Progress Principle, she suggests that the simple act of making progress in one’s work—no matter how small—causes people to enjoy their work more and be more intrinsically motivated. Amabile says that

the most important implication of the progress principle is this: By supporting people and their daily progress in meaningful work, managers improve not only the inner work lives of their employees but also the organization’s long-term performance, which enhances inner work life even more.

The week-long kaizen events used to kickoff the lean journey that Byrne champions certainly provide that sense of progress. But by definition they’re episodic (every 2 weeks? every month?) rather than continuous. By contrast, small incremental improvements, whether through formal kata coaching or some other method, create a feeling of progress everyday. And as I interpret Amabile’s research, that’s valuable for sustaining both the work changes people make as well as their motivation for continuous improvement.

I’m not in any position to contradict Byrne’s success, but I’m struggling to reconcile what I know with what he’s done. I’m open to all opinions on this.

Technology Ain’t Going to Solve Your Problems

I was at a conference for internet retailers two weeks ago and was overwhelmed by the software and hardware solutions promising to solve all their operational problems and turn their ecommerce businesses into a highly profitable, eight figure monsters.

They’re lying.

Technology is not, by itself, the answer. If you have a broken process and you add technology, all you get is a faster (and more expensive) broken process.

Let’s say, for example, that you invest in hand-held scanners in a warehouse. Yes, the system is pricey, but think of the productivity improvement! Think of the increased inventory accuracy! Except, maybe not. 

Consider a client of mine that bought scanners to improve picking and inventory accuracy. That was a great idea, until the pickers decided that it was a hassle to scan 12 boxes individually. Instead, some of them were scanning a box once and typing in 12. . . except that occasionally their fingers were a bit heavy on the button, and they typed in 122 instead. That did wonders for their inventory accuracy. 

Another client of mine invested in a fancy ERP system to help them manage the complexities of their supply chain, and better match supply with demand. One day, they realized that they had 18 months of inventory on-hand for a few products, and it was tying up badly needed working capital. What happened? The software calculated purchases based on customer demand, which was artificially inflated by a bonus program that the VP of sales ran during the normally slow summer months. They were stuck with a pile of closeouts that destroyed their margins for the year.

Even Amazon has run into this problem. They deployed scanners throughout their warehouses, but found that workers weren’t hitting their productivity targets when stowing products on shelves. The problem? Scanner batteries were running down in the middle of the process, forcing them to stop in the middle of putting away products, and walking to the office to find fully charged batteries.

The moral of these stories: your new hardware or software will only deliver the promised results when you combine it with solid processes. If your processes aren’t well-defined, or if they’re not consistently followed, or if they’re not particularly effective, then the new technology won’t deliver the goods.

Here are three steps you should take before investing in new tech:

1. Observe the work.
You think you know how the process works, but are you sure? Most likely, you know how the process is supposed to work. But in the time since you’ve gotten a new phone system, hired new staff, or added a specialized oncology service, I bet that those processes have changed. Your staff has developed shortcuts that you don’t know about, or are dealing with problems you didn’t imagine, and the process doesn’t run the way that it once did. By taking the time to really watch the work that’s being done—order entry, patient discharge, credit checks, etc.—you’ll either see how the new technology should support the work that’s actually being done, or you’ll want to redesign the work to remove the obstacles that will prevent you from reaping the benefits of the technology. I know of one hospital system that avoided buying $200K in new ventilators and wheelchairs—which everyone was dead certain they needed—simply by creating standard work and using 5S to ensure that they were returned to the right place.

2. Address behaviors first. Then add technology.
Technology might actually exacerbate problems if you don’t address bad policies and behaviors first. In the case of the client with the 18 months of slow moving inventory, the ERP system made dysfunctional policies even more harmful. Management let the software make purchasing recommendations based on sophisticated algorithms that didn’t account for the special sales promotions. That resulted in much larger purchases than a human in purchasing would have made. The company should have eliminated the practice of goosing sales with special promotions before rolling out the ERP—or at the very least, built a process that ensured review by the head of sales, finance, and operations to check the software recommendations. In the case of the Amazon stow line, it wasn’t until they created a supporting process to check, reload, and monitor the scanner batteries that the company achieved the promised efficiency gains.

3. Find the root cause of the problem.
Is technology and automation really the answer to the problem? While the siren call of technology is alluring, it may not address the root cause of the problem. If your customer service team task switches between entering customer orders and answering incoming phone calls every three minutes, you’ve got a problem that no Order Management System can fix. The reason the CSRs don’t have time to process orders is the interruptions, not the software they’re using. You’ve got to eliminate the interruptions before you add software.

Technology is not a panacea for your operational ills. But if you follow these three steps, there’s a much greater likelihood that you’ll be able to get real value from the cool technology you buy. 

How to Reduce A3 Resistance

You’ve probably struggled to get your clients or your colleagues to embrace the use of A3s in problem solving.

We’ve all heard the excuses: “It’s too much work.” “I don’t need it.” “I don’t have enough time to fill them out.”

No matter how much you explain that it’s not about the paper or the format, it’s about the thinking; that it doesn’t have to look pretty; that it’s essential to make your thinking visible; that it creates focused and structured discussions; that it follows the scientific method, etc., etc.—people still don’t embrace your A3-sized gift from the Toyota gods. It's just one more stupid lean hoop to jump through.

And really, why should they? They’ve done okay in their careers up to now without ever filling out an A3. Truth be told, until the CEO starts asking for A3s filled with eraser marks instead of four-color Powerpoints with animation, you’re going to have a hard time convincing them that the A3 really is a better way to go.

Here’s another approach: don’t ask people to fill out an A3 when they’re working on a problem. Don’t talk about metric-sized paper. Don’t talk about the scientific method.

But, when your client or your colleague comes to you with a problem, have a discussion. Ask open-ended questions about the problem. Tell her you want a more clearly defined explanation of the problem. Challenge her to refine it. Then ask her to get some data that supports her decision to attack this problem.

After she leaves, write down the problem statement on an A3, and keep it in your drawer.

When she comes back with the information you’ve asked for—the “Background” section described in Managing to Learn—have another discussion or two. Make sure that she has the facts, that they’re accurate, that they’re relevant. Then send her away to draw a picture of how the process works and get data to support her understanding of the current condition.

After she leaves, fill in the background section of the A3, and keep it in your drawer.

You see where this is going. Repeat the process for all the other sections of the A3.

Make the A3 a real discussion between the two of you without first asking her to fill out an A3. When you’re finally done working your way through all parts of the A3, then you can show it to her. Congratulate her on doing her first A3. Show her how your structured conversations were actually the A3, and that the paper was just the documentation. Help her see that writing one really isn’t a burden or extra work.

When I work with organizations that are new to lean, I always start by asking people to fix the (little things) that bug them, an idea straight out of Paul Akers’s 2 Second Lean approach. After they make that improvement—putting their computer monitor at a more comfortable height, changing the font on a customer service screen, getting a better tape dispenser in the warehouse—I tell them, “Congratulations. You’ve just done lean. Nice job.” That’s usually a surprise to them. At the outset, most people think that lean is some impenetrable exercise involving Japanese jargon, lots of talk about Toyota, and elaborate calculations relating to manufacturing flow.

Of course, there’s a lot more to lean than those simple fixes. But the experience of finding something that’s not working right and fixing it is the first step towards realizing that the way things are today isn’t the way things have to be tomorrow—and therefore it’s the first step in developing a lean mindset. Once they have that positive experience, it’s a lot easier to get them to start thinking about other improvements. And that’s the beginning of the problem solving culture you’re striving for.

The same is true for this approach to the A3. Rather than telling people that it’s the A3 way or the highway, make it easier for them. Just guide them through the A3 thinking process . . .and write the A3 yourself. When you show it to them, they’re usually pleasantly surprised that they’ve actually done an A3. They’ll see that it’s not that much work. They'll see that it's not a pointless exercise. They’ll see how it can be valuable in helping to solve their problems.

If you work at a company where A3s are already baked into the culture—it’s just the way we do things here—you don’t need to go down this slower road. But if you’re trying to establish the A3 as part of the culture, the evidence is pretty clear that teaching an A3 class and then telling people that they have to fill one out every time they work on a problem is not terribly effective.

Or, if you don’t like my approach, write an A3 yourself on how to get people to embrace using A3s. See what you come up with. 

In Praise of Ignorance (Part 2)

I’ve written before about how my own lack of knowledge and expertise helped me lead warehouse employees in reducing lead time for picking, packing, and shipping customer orders by one-third. Because I don’t know that much about warehouses, I simply encouraged them to walk through the shipping process and look for places where people were waiting for information or materials. I was nothing more than a guide, asking naïve questions about how things worked—they were the creative thinkers, identifying alternate (and better) ways of working. They owned the changes, and to this day—almost a year later—they’ve sustained the improvement.

But even though I know that workers have to own their improvements, I don’t always follow that rule. A few months ago I was working with a product development team that was getting killed by loopbacks and rework in their design and development process. They’d develop a product (or even packaging for a product) and somewhere long past a stage gate, sales or operations or finance would ask for a redesign to better meet customer, warehouse, or financial needs.

Why did those changes happen after the stage gates? From my analysis, the root cause was a lack of clarity around decision rights and responsibilities throughout the process—who is consulted for input, who needs to be informed, who makes the final decision, etc. Standard RACI stuff.

So I implemented a RACI system for the major workflows in product development and waited for cheers of joy when my brilliant countermeasure solved all problems. And waited. And waited.

Three months later, I asked the head of product development how things were going. He told me they weren’t. The team tried my system but it never took root. The stage gate meetings weren't held regularly, people didn’t remember what their roles were at key points in the process, and after a little while, they abandoned my countermeasure. They’re back to where they started.

I’m pretty certain that my approach would have solved the loopback/rework problem if they followed it. But—it was MY solution. Not theirs. They didn’t own it. Which means that the likelihood of the countermeasure sticking was about the same as the chance that Here Comes Honey Boo Boo could win an Emmy Award for journalism.

Mark Rosenthal 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.

That pretty much describes what I did. The forces of entropy took longer in my case, but everything eroded just the same.

I’m happy to report that the head of product development and his team are now working on a new approach to reducing loopbacks. I’m confident they’ll succeed. Without me.

An Elegant Solution for Handwashing

“Employees must wash hands after using the bathroom.”

Signs with that injunction are plastered in restaurants across the country. I have no idea how faithfully that rule is followed, but if the compliance rate in hospitals is any indication, probably not nearly as often as you’d hope. As Mark Graban says, “vigilance is not a system.”

One restaurant in San Francisco, whether by design or by chance, has figured out a way to increase the likelihood of 100% adherence. Here’s a photo of the area right in front of the bathrooms:

That’s right: the bathroom sinks are out in full view of the dining public, which places incredible normative pressure on people—whether employees or customers—to wash their hands after coming out.

The restaurant still has the mandatory posters inside the bathrooms, but I’d wager that the risk of public shaming is more effective than all the signs management puts up. It is, in Matt May’s words, an “elegant solution.”

How to Piss Away $4 Million

It’s too bad that the title of the new MIT Sloan Management Review article, “Saving Money Through Structured Problem Solving,” really misses the key point. The subtitle—“Closely observing how work really gets done in your organization can yield numerous opportunities for improvements”—is the real takeaway from this useful article. 

The piece addresses the steps taken by the president of a corrugated box manufacturer to reduce raw material costs. Despite spending $3.5 million on new equipment and $500,000 on training, costs actually went up by about 3%. Although the article doesn’t provide details, you can imagine that the decision to spend $4 million was made safely inside the confines of the executive conference room.

Two years later, the president tried to improve the situation again, this time by developing a clearly defined and agreed-upon problem statement addressing the high raw material losses.

Hats off to the president for taking the time to develop a problem statement. However, the real breakthrough came when he left his offices and went to the gemba to actually see what was going on:

He quickly observed numerous problems. The paper was often too wide, resulting in extra losses from cutting. In addition, paper rolls were often damaged by the forklifts that moved them, and various machines were not properly calibrated.

Perhaps most notably, Mike observed that the main corrugator machine stopped at 11:30 a.m. Assuming it was an unplanned outage, Mike rushed to the machine only to learn that the machine was stopped every day at lunch. Stopping and restarting the machine at lunchtime not only decreased productivity but also increased the probability of both damage to paper and mechanical problems. Interestingly, the lunch break turned out to be a response that had been instituted years ago in response to instability in the electric power provided by the local utility—a problem that had been fixed long ago. 

With first-hand exposure to the problem, it was relatively trivial to institute countermeasures that cut paper losses by 7%, generating $50,000 in savings in the first two months alone. The president commented that

it took this process to… actually go see and talk with our operators to understand what was going on. Funny thing is, they already knew what the problem was, we just weren’t listening.

It may not be surprising that so many leaders still haven’t been taught (or learned) this lesson, but it is disappointing. Speaking from my own experience at the Stanford Graduate School of Business, we were never taught the necessity of going to the gemba and seeing the work done for ourselves. The science of management was (and I believe still is) taught as some kind of rarified intellectual exercise conducted from within the executive suite. 

Taiichi Ohno said, “Data is of course important, but I place the greatest emphasis on facts.” And of course the only way to get those facts is to see firsthand what’s happening. Kudos to the MIT Sloan Management Journal for telling this story—and hopefully spreading the gospel that whether you’re looking to cut costs or simply lead better, the best way to do it is from the shop floor.

Personal Lean: Key Point #39

A CEO client was struggling with more than 900 emails in his inbox waiting for his attention. That may not seem like many if you’re sitting there with 15,000 messages in your inbox—most of them worthless “reply all” garbage or Pottery Barn promotions—but all of these were significant, important, and potentially valuable emails that he didn’t want to delete.

He was trapped in a common fallacy: that value is fixed and unchanging.

It’s not. In a world of constraints, importance and value is contextual.

If you were Warren Buffett—if you had no financial constraints—you’d never have to decide what to spend your money on, because you could buy pretty much anything and everything you wanted. Send your kid to a private college. And buy a Rolls Royce. And a $35,000 watch. And take the family on a luxury safari in Botswana. But of course, you probably don’t have as much money as Warren Buffett (you wouldn’t be reading my blog if you did), so every purchase you make presents an opportunity cost: pay for college, and wear a Casio while driving your Geo Metro.

The same equation holds for time. Your time and attention—like your money—is finite. If it were infinitely elastic, you could go to all your meetings, answer all your emails, visit all your customers, and coach all your employees. But of course, it’s not—so you can’t. There’s an opportunity cost every time you choose to do one thing, because it precludes you from doing something else.

Importance and value also degrade over time. Today’s opportunity is often less valuable in three months or three years. Being the first to market brings enormous rewards that competitors struggle to capture. Thanking an employee today for a job well done is more important than recognizing her in a month. Information about your market is important today, but not so much next quarter. As the old saying goes, today’s newspaper is tomorrow’s fish wrapper.

Those 900 emails in the CEO’s inbox? As each one came in, he determined that it was “important” and saved it so that he could come back to it. But the value of each email changed in the context of all 900. Many of them, while important when they arrived, were just not all that important four months and 700 emails later. He could have easily deleted them, but he was stuck in the mindset that they still retained value.

This situation reminds me of something that Jim Lancaster, president of Lantech, wrote in his terrific new book The Work of Management. He explained how his team was spending all its time cataloging errors and managing a database of different kinds of production defects instead of actually fixing the problems when they occur. Not surprisingly, they didn't make much progress on finding and fixing root cause. The big shift came when they focused on taking care of current problems, without worrying about their relative importance. As he writes, “Solving the problem that presents itself now is more valuable than attacking the most important problem we have.”

To be fair, it’s not as though those emails are going to sink his company or prevent him from doing a great job. But if you believe in 5S for the shop floor or the office, then you should apply that tool to those no-longer-valuable emails. Holding onto them is the equivalent of holding onto the junk that’s piled up in the corner of your warehouse, or the tools and jigs for products that you no longer make.

More importantly, there’s a real psychic burden that comes from those messages. The CEO was weighed down by the feeling that he should be doing something about those emails, and felt guilty that he wasn’t on top of them. That pointless psychic burden was a distraction, and wasn’t helping him do his job.

Personal lean point #39: Make friends with your delete key. Recognize the contextual nature of value so that you can let go of the old stuff and focus on what really is important.

Preserve the Core. Stimulate Progress.

In Built to Last, Jim Collins argues that for companies to be sustainable for the long haul (i.e., the “great” companies of Good to Great), leaders must embrace a seeming paradox. They must both honor and protect their fundamental values and beliefs, while at the same time pushing their organizations forward and embracing change.

He calls it a sort of yin/yang principle: on one side you have preserving the core, or staying true to something, and the other side you have stimulating progress. (See a very short video here.)

The best organizations weave this tension into the fabric of the company by creating mechanisms to ensure progress. Collins describes how 3M, for example, stimulates progress in innovation by giving scientists 15 percent of their time to work on whatever interests them; by requiring divisions to generate 30 percent of their revenues from new products introduced in the past four years; by maintaining an active internal venture capital fund; and by creating a dual career track to allow innovators to remain innovators rather than move into management. Granite Rock Company has a policy called “shortpay” to stimulate excellence in customer service: they tell their customers “If there’s anything about an order you don’t like, simply don’t pay us for it. Deduct that amount from the invoice and send us a check for the balance.”

Jim Lancaster’s presentation at the recent LEI Summit reminded me of this concept. Lancaster explained how the progress the company made in the 1990s—the progress that earned them a chapter in Lean Thinking—proved unsustainable in the 2000s. They found that much of their improvement work was simply redoing improvements they made years earlier. They weren’t holding the gains they made. Instead, they were on a kaizen hamster wheel, because their processes were unstable. As Jim Womack explained, “without getting without getting control of processes first, we end up doing change on unstable muck.” 

In other words, Lantech didn’t “preserve the core.” They had the drive to “stimulate progress,” but without the other half of the yin/yang equation to balance their efforts, they kept backsliding. It was only after they instituted a daily management system to prevent deterioration of their processes that business performance leapt forward.

To be sure, this isn’t a perfect analogy: Collins is talking about the core values, philosophies, and ideologies of an organization, while I’m talking about the core improvements realized through kaizen. But based on Lantech’s experience, I think that the analogy is nevertheless useful. 

Here’s how to preserve the core in a lean context:

• Institute a daily management system that reveals deterioration immediately and enables it to be fixed at the right level. As Jim Lancaster explains in his book, “solving the problem that presents itself now is more valuable than finding and attacking the most important problem we have.” 
• Invest in people’s problem solving skills through formal and informal training and coaching.
• Drive out fear (per Deming)—not just fear of being fired or laid off, but fear of failure, fear of criticism, fear of ridicule—and encourage experimentation in the service of improvement. 

Book Review: "Lean Math"

My heart sank when the review copy of Mark Hamel’s new book, Lean Math, landed in my inbox with a 20 megabyte thud. I was an English major in college, and was voted “Biggest Poet” among my classmate quants in business school—I wasn’t really thrilled at the prospect of trudging through 435 pages of equations, formulas, and more Greek letters than fraternity row at Ole Miss. 

The good news is that I didn’t have to read all 435 pages. And neither will you. Lean Math is not a turgid disquisition on some long-overlooked point of lean implementation. Instead, it’s a reference book that will help you all along the stages of your lean journey. Totally new to lean and need to know how to calculate takt time? A little farther along and need help calculating kanban quantities? Really advanced, and want to delve into the math of fractional factorial designs in Design of Experiments (whatever the hell that means)? Check, check, and check.

Although Lean Math caused me PTSD flashbacks to my grad school statistics class, it’s a terrific guide to both theory and practice—including helpful warnings about typical errors in usage of all the formulas and models.

You could probably find most (if not all) of the information through the all-powerful Google search, but you’d be a fool to do so. You wouldn’t be sure of the accuracy of the information you found; you’d have to figure out how to apply the concepts to your specific situation; and it would be drastically more time consuming.

Get Lean Math for the bookshelf. It’ll be a great doorstop when you’re not using it, and it’ll be invaluable when you need it.

Anybody can get lean, right?

My friend and fellow lean thinker Mark Graban just blogged about lean lessons from the movie, Central Intelligence, starring Dwayne “The Rock” Johnson. When he’s asked how he built his amazing body, Johnson replies:

I just did one thing… I worked out for six hours a day, every day, for the last 20 years. I mean, anybody can do it, right?

Mark comments that

When people look at organizations like Toyota or ThedaCare, they’re often caught staring at an “after” picture in a “before and after” scenario. Dwayne Johnson has to keep working out and eating right, just as organizations have to keep improving and have to keep doing the things that made them very successful. People often want shortcuts… easy answers… silver bullets… instant pudding. 

His comments echo an argument I made in chapter one of my book, Building the Fit Organization. Companies that successfully engage in lean make an unshakeable commitment to continuous  improvement. It’s not something they do on occasion, when they feel like it. It’s not an episodic exercise, like a plan to do one kaizen a month.

In fact, the pursuit of organizational fitness is very similar to the pursuit of physical fitness. As I explain in the book:

Don’t try finding a spot on the Stairmaster or in the spin class on January 8th. The busiest week of the year at a gym is the second week of the new year. Fueled by an excess of calories from too much food and drink during the holiday season, people make resolutions to lose weight, work out, and get fit. The gym is packed as tightly as people are packed into their spandex. Of course, by February the gym is back to normal. Most people predictably abandon their resolutions in short order—they’re bored, they’re busy, they’re sick, they’re tired. Life gets in the way. They lack the commitment (or know-how) to sustain their fitness initiative, and the next thing you know, they’re anxiously searching for diet and fitness tips to wriggle into their bathing suits for the summer.

Organizations aren’t so different from individuals. Preceding the new fiscal year, the management team announces its goal to capture the top spot in the marketplace, rolls out 37 new strategic initiatives, and vows to elevate employee engagement and become a great place to work. By the second quarter, it’s business as usual. Organizations get caught up trying to make the monthly or quarterly numbers; departments are overwhelmed by the multitude of new (and often contradictory) initiatives for which they lack the people or the resources; and employees feel no more connection to the company’s leadership and vision than they did before. The organization loses momentum on its initiatives, often fails to achieve its stated goals, and waddles along until the next annual strategic offsite, whereupon the cycle repeats itself.

For both the individual and the organization, the problem is the same. There may be a stated goal—lose 15 pounds, improve muscle tone—but there’s often no clearly defined program to reach that fitness goal. Or even if there is a program, it may simply be a fad that promises huge results with minimal effort: think vibrating belts, Thighmasters, 8 Minute Abs, and the latest diet pills. More significantly, for the people who abandon their fitness efforts, going to the gym and exercising is something that’s external to the daily flow of their lives. It’s a chore that requires additional time and commitment, not something that’s as fundamental and core to their lives as, say, going to work, or playing with their kids, or even brushing their teeth.

In the same way, most organizations have annual goals—take the top spot in the market, lift employee engagement— but they lack clearly defined improvement programs to reach their goals. As with individuals, there is no end to the number of business fads that promise to get companies to the promised land—emotional intelligence, six sigma, business process reengineering, management by walking around (MBWA), etc. But efforts to achieve those goals are episodic (at best) or sporadic (at worst), because they’re not seen as integral to the organization’s daily operations. They’re made “when we have some free time,” or before the boss asks about them at the quarterly performance review.

Truly fit individuals don’t so much make a generic commitment to exercise as much as they weave exercise and health into the daily fabric of their lives. Similarly, truly fit organizations don’t so much make a commitment to an improvement “program” per se, as build improvement into the way they operate on an ongoing basis, everyday.

Or as The Rock would say: “I just did one thing… I worked out for six hours a day, every day, for the last 20 years. I mean, anybody can do it, right?”

Book Review: "The Lean Turnaround Action Guide"

I just finished one of the best business books I've read in a long time -- Art Byrne's Lean Turnaround Action Guide. Whether or not you've read his first book, this is an invaluable resource for business leaders, middle managers, or even consultants. Unlike his earlier book, in which he made the case for embarking on lean by explaining why lean is the only sane business strategy, in this book he shows the reader how to take the first steps down the lean road.

The Action Guide is a case study covering the initial steps of a lean implementation at a fictional company, following the process that Byrne has used for the past 30 years. Where appropriate, he discusses core philosophies -- for example, "lead from the top" -- but the focus is on what that means, and how to convince executives to actually do it. What do you say to them? What are the likely arguments from the resistors? How do you overcome them?

At the same time, Byrne doesn't bog down in a discussion of tools. After introducing tools like kaizen events or standard work combination sheets, he quickly pivots to the more important issue -- how and when to introduce these tools to the leadership team. You'll need to go elsewhere for detailed explanations of how the tools work. As a result, by the end of the book, you're left with a clear roadmap for how to orchestrate the conversion to lean: what language to use; how to choose the functional areas to start in; how to involve the leadership team; and how to deal with the inevitable obstacles that will arise. 

The approach Byrne describes stems from his own successful experiences at Danaher and as a private equity investor.. But I wonder whether his approach would work for all companies. What about the companies that he didn't buy? Could he have followed this model with those other firms? Or is there something about the management and culture of those other companies that precluded this aggressive approach and mandated something slower -- and perhaps even led him to not invest in them? Is it possible that a slower, more gradual introduction would result in equally good results over the long term? Paul Akers, for example, is doing impressive work at his company, FastCap, but he's not following Byrne's shock and awe method. 

Notwithstanding these questions, the Action Guide is a terrific addition to anyone's lean library. It's well-written (and CAUTION -- Kellyanne Conway moment ahead -- fabulously edited by my own editor, Tom Ehrenfeld) in a brisk, direct tone that I imagine to be reflective of the way Byrne talks. It's a fast read and well worth the investment.

What You Can Learn from the World's Greatest 400m Hurdler

Edwin Moses was the greatest 400m hurdler the world has ever seen.

Moses won two Olympic gold medals in the 400m hurdles (and would have won a third had it not been for the 1980 Olympic boycott) and a bronze medal. He set four world records and won 122 straight races over 10 years. Even now—nearly two decades after his retirement—he owns four of the fastest races ever run, including the second fastest time in history.

Why should you care about this track and field legend? Because the way he approached his event holds lessons for you, whatever your job. Moses was certainly more physically gifted than your average jogger, but—perhaps because of his background as a physics major—it was his relentless focus on process and measurement that etched his name in the record books.

A little background
There are 10 hurdles in a 400m hurdle race. Conventional wisdom held that runners should take 14 steps between hurdles. Taking 13 steps for the whole race was considered impossible, because it was physically too taxing to hold the longer stride length for 400m. Taking 15 steps between hurdles would result in a stride too short to be competitive. However, taking 14 steps means that you switch lead legs for each hurdle. The problem is that almost everyone is better/faster leading with one leg than another.

Most hurdlers run some combination of 13, 14, and 15 steps. If they’re one of the rare athletes who can lead well with both legs, they might take 14 steps. Otherwise, they usually start with 13 steps, and then switch to 15 steps in mid-race when they get tired. 

The Moses breakthrough
Moses, who was self-coached, realized that taking an odd number of steps would enable him to lead with the same leg over all the hurdles and thereby maintain a consistent rhythm through the race. If he could do that, he’d be faster than other runners who were changing legs or taking smaller strides.

In the language of Toyota Kata, his challenge was to find a training method that would enable him to hold 13 steps for the whole race. And that’s precisely what he did. Of course, he did all the necessary technique training to improve his hurdling form. But largely he trained like a middle-distance runner to develop enough strength to hold his stride length for the full 400m. Moses almost always took 153 steps in the race, regardless of the weather (hot? cold? windy?) or the competition (Did he have an early lead, or was someone pressuring him?). Occasionally, he finished in 152 or 154 steps, but that one stride difference came in the final sprint to the finish, not in the middle of the hurdles. Those were always 13 steps. To this day, he’s the only world-class hurdler to consistently run the whole race in 13 steps.

What you can learn from Moses
Moses studied his event—which is to say, his job—thoroughly. He worked to improve his hurdling technique constantly. He experimented with different stride lengths and different stride cadences to discover the optimal mix for him. He developed a unique training regimen that gave him the physical endurance to maintain his form throughout an entire race.

Have you actually studied the myriad processes that comprise your job? Have you examined each step to develop deep understanding? How often have you experimented with different methods?

Even though he was “just” an athlete, Moses approached the 400m hurdles like a scientist. You should too. 

Finding the Sweet Spot for Organizational Structure

Flow is one of the key tenets of lean. To that end, continuous improvement professionals exert enormous effort to improve both information and material flow in factories. However, we don’t usually see as much effort in the office environment, where knowledge—not widgets—is the product, and the cost of poor flow is not as easily quantified. Information processes and flow are usually less-well defined in the first place, and often encrusted with bureaucratic barnacles that do nothing but impede flow.

Peter Drucker once quipped that, “Much of what we call management consists of making it difficult for people to work.” I suspect that Drucker was saying poor management makes it harder for people to work. Good management—a rarity—makes it easier. The truth is that all business processes require a certain amount of management structure to enable operations to flow smoothly, but often it’s the wrong amount of structure for the job at hand.

With no structure at all, you have total chaos—no one knows what needs to be done, who’s responsible for doing it, or even what the goals are. Many start up companies exist in this zone, although they’re often saved from disaster by virtue of having everyone sitting in the same room. They survive the lack of structure by virtue of easy, uncomplicated communication channels. As they grow, however, they either create appropriate process structures or they die.

When there’s just a bit of structure, the pain of rework bites hard. At a $500M footwear company I once worked with, the founder and CEO—long removed from his role product development—decided that he didn’t like a particular style his product team had designed, developed, and purchased. He diverted a container that was en route to the US with $400,000 worth of shoes to Africa, where he unloaded everything at a loss. The sales, marketing, product, and customer service teams were stuck at the 11th hour (well, the 12th hour, actually) adjusting for the CEO’s violation of structure.

Too much structure creates business “clutter,” which is typically manifested as excessive (and often low-value) meetings, the necessity of obtaining approvals from multiple tiers of management, an overload of initiatives, and a nearly suffocating volume of email. By now it’s practically a business fable, but when Alan Mulally took the reins at Ford in 2006, senior management actually had “meetings week”—five days each month in which executives held non-stop meetings. The preparation for that week, combined with the burden of having the leadership team unavailable for such a long period of time, hamstrung Ford’s ability to react to operational issues in a timely manner.

When structure reaches its extreme, the organization effectively suffers bureaucratic paralysis. Virtually nothing gets done. Government agencies are the poster children for this condition, although many companies experience it on a localized level. The stories are, in the most literal sense, nearly unbelievable: manager approval required for replacing an ID badge, or two approvals (!) needed to order new toner for a copy machine. 

The right amount of structure for business processes fosters coordination without dangerous ambiguity or administrative burden. Looked at from a lean lens, this is the place on the continuum where the rules and structures create the most value with the minimum waste. WL Gore’s “lattice” structure of management is an excellent example of an organization in this position. The $3 billion company broadly distributes leadership responsibility throughout the organization, allowing employees to make “above the waterline” (i.e., low-risk) decisions on their own, and only requiring approvals for “below the waterline” (high-risk) decisions.

It would be nearly impossible for another company to copy Gore’s model of management. But it’s very much within the purview of the OpEx professional to apply this kind of thinking to the various office and administrative processes in any firm. It’s simply a matter of adding another layer of analysis to the standard value stream analysis that’s already being done

Why Layoffs Don't Make Your Company Fit

If you’re trying to get fit, don’t try to lose weight. And if you’re a business trying to get “fit,” don’t try to cut costs.

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 take a step back. Then again, if you’re a 5’10” fashion runway model tipping the scales at 102 pounds soaking wet, you’re probably not very fit either. The important point here, is that real fitness isn’t just about body mass index. It includes cardiovascular capacity, muscular strength, and flexibility. And if you’re an athlete—even a recreational one—you also need coordination, agility, speed, and quickness. You can’t gain those capabilities just by dieting.

There’s an organizational parallel here: a company can’t get “fit” simply by cutting costs. To be sure, you may be able to improve your income statement in the short term by laying off workers, closing offices, banning color copies, and no longer catering meetings. However, 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—a feeble organization filled with dispirited employees, unable to compete in the marketplace and serve customers.

Sunbeam Corporation is the poster child for this misguided approach. Sunbeam hired “Chainsaw Al” Dunlap (also known as "Rambo in Pinstripes") in 1996 to turn the company around. Dunlap, widely viewed as a turnaround expert, was legendary for his ruthless approach to financial improvement, which typically involved firing a large portion of the workforce. True to form, within a year, he laid off half the company’s staff (6,000 people) and eliminated 90% of the company’s products. This lowered expenses by $225 million per year and nearly quadrupled the stock price in less than two years. But cutting costs has its downside. He moves made the company less capable of reacting to customer needs -- and by 2001, the company was bankrupt.

There’s another parallel between dieting and simple expense cutting: neither work in the long term. It’s common knowledge that the vast majority of people who lose weight on a diet regain it within a year or so. Organizations that just cut expenses tend not to maintain their new weight either. There’s no concomitant reduction in work after layoffs—it simply gets shifted around. 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 eases travel restrictions, permits color copying, and starts catering meetings again. 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.

The alternative is for organizations to focus on building fitness, not on reducing costs. In this context, fitness means becoming faster, more agile, and better able to take advantages of new opportunities and serve customers better. It means examining the processes by which the organization operates. 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.

Wild Things Gear makes technical outdoor apparel that consumers can customize for their own needs. The company is a perfect example of how rethinking processes can make an organization more agile and better able to adjust to market shifts. CEO Ed Schmults believes that customization is especially important for technical clothing, because it allows customers to create the functionality that’s important to them.

Product customization is nearly impossible if you manufacture in Asia (like virtually all outdoor companies). Asian factories are built for mass production: long production runs of hundreds or thousands of garments with minimal variation. It’s also tough to get products to consumers quickly if they’re produced halfway around the world—ocean shipping, customs clearance, and logistics (ocean port to warehouse to consumer) adds three to four weeks of transit time. Airfreight is much faster, of course, but it’s cost prohibitive for the company, since most consumers aren’t willing to pay for that service.

Schmults realized that to deliver the increased value that comes with a customized product, he’d have to develop the ability to make clothing in the United States. He’d have to get faster, more productive, and more skilled in apparel manufacturing—a tough job, given that the domestic apparel industry has been eviscerated over the past 20 years as companies have closed their factories and outsourced their work to Asia. However, using lean manufacturing techniques such as cellular production, one-piece flow, kitting of components, etc.—along with extensive training—Schmults was successful in making technical outdoor gear in the US. Now, with a website that allows customers to configure their products online, domestic production, and the elimination of retailers for distribution, consumers can go from designing their own jacket to delivery at their house in only 14 days.

So, more value to the consumer—but what about the company? Moving away from traditional overseas mass production has meant faster production, less finished goods inventory, and lower working capital requirements. Quality is higher, and overall costs are lower. Indeed, even as sales are growing steadily, the company’s return rate is only 6.8%, whereas most fashion brands have return rates as high as 40%—and that difference goes right to the company’s bottom line.

That’s what real corporate fitness looks like. Not layoffs. Agility.  

How to Honor Your Customer

Many companies talk about honoring the voice of the customer, but how many actually bring the customer's voice to the shop floor? MarquipWardUnited (MWU), a division of Barry-Wehmiller does, and in an elegant and powerful way. 

The company graciously allowed me to tour their facilities in Maryland a couple of weeks ago. The  evidence of their "Living Legacy of Leadership" was everywhere, from the team huddles, to the visual boards throughout the shop floor, to the way in which the company gave all employees an extra day off because they just completed a year without an accident.

[Quick digression: think about that for a moment. The company gave everyone an paid vacation day because workers were able to stay safe for a year. There's a huge economic benefit to the company for not losing any worker days, and the company shares that benefit with the people who make it happen. That's real "respect for people" in action.]

Making a connection with customers is a challenge for this plant. Like shop floor workers in most companies, MWU workers don't ever get to meet their customers. They work hard to meet customer needs, but they don't really know who's using their machines. And that's where the customer profile cards come in. The key details about each customer are put on a bulletin board so that workers can see who's buying their machines and why. 

These cards (actually about 8½ x 11) tell workers which machines the customer bought, why the customer bought them, and what they'll be used for. They also provide information about the customer: where they're located, how many people work there, and what the new machines will mean to the customer's success. And if people want more information, the salesperson's and project leader's names are on the card as well. 

We all know (or should know!) how Barry-Wehmiller honors its employees as full human beings, not just a pair of hands that must be bought. But these cards show that the company honors its customers as human beings as well, not just as wallets dispensing money to fund the company's operations. 

Think fitness, not weight loss.

Weight Watchers no longer wants to sell diets.

After suffering a multi-year decline in sales, the company is now focusing on fitness rather than the strict discipline and self-abnegation that people associate with dieting. As the Wall Street Journal reported:

“We may be the greatest diet company on the planet but the consumer isn’t thinking strictly in diet terms anymore,” said James Chambers, CEO of Weight Watchers International Inc. “They aren’t thinking of diet and deprivation as the path they want to take; they’re thinking much more holistically.”

A key element of the company's new initiative, called “Beyond the Scale” emphasizes overall physical fitness, not just calorie reduction. Key to the change in focus was the realization that Americans still want to lose weight but they don’t want to give up too much. Debra Benovitz of Weight Watchers says that their customers "want a lifestyle shift versus a short-term fix.” 

This is a perfect analog to how organizations should approach their lean/continuous improvement efforts. As I argue in my book Building the Fit Organization, a focus on cost cutting (or dieting) is dispiriting and ultimately doomed to failure. No one (except perhaps the CFO) gets excited about financial deprivation. Instead, organizations must integrate lean (or fitness) activities into daily work. That means teaching people a structured approach to solving problems; helping them figure out how to make their work easier and better; strengthening the connection between all employees and the customer; etc. That creates the "lifestyle shift" that companies need for long-term success. 

There's so much more to physical fitness than mere body mass index. There's cardiovascular health. There's strength and flexibility. There's endurance. For organizations, there's so much more to lean than cost reduction. There's market responsiveness and agility. There's employee engagement and commitment. There's reduction in working capital needs. There's better supplier relationships and increased customer satisfaction.

Measuring only one element in a program, whether that's body weight (Weight Watchers) or item cost (lean) is a dead end that saps people's commitment to the process and reduces the potential benefits. 

The Folly of Stretch Goals

I just finished listening to the terrific Planet Money podcast on the Wells Fargo fiasco. You probably already know the big picture of how the bank illegally and unethically opened accounts for customers. But this episode brings the fraud down to a human scale by interviewing some of the Wells Fargo employees. While John Stumpf was lauded in the business press for his "8 is Great" mantra (that's eight accounts per customer), this goal created what employees called a "boiler room" culture and a "grindhouse."

Of course, W. Edwards Deming fulminated against the absurdity of arbitrary numerical goals. Point #11 of his obligations for management states: "Eliminate numerical goals, numerical quotas and management by objectives."

Back in 2012, I wrote an article for the Harvard Business Review on The Folly of Stretch Goals -- and really, what is Stumpf's "8 is Great" but a stretch goal? I argued that stretch goals can be demotivating, can cause excessive risk-taking, and can lead to unethical behavior. I cite Sears as an example. . . and now you can add Wells Fargo to the list.

In Profit Beyond Measure, Thomas Johnson wrote:

"That happens a lot, we honestly translate aims to goals. And then we do stupid things in the name of the goal get it the way of the aim. We forget the aim sometimes and put the goal in its place."

I'm no oracle, and I'm certainly no Deming. But I do know that the evidence is pretty clear that when you set arbitrary stretch goals, you're taking a bet that may very well end up with you testifying before Congress.

You've Got to Live Lean to Lead Lean

Lou Gerstner weighed in on the Wells Fargo scandal the other day in the Wall Street Journal. He wrote that CEOs who blame a flaw in their company’s culture misunderstand how culture is created and its role in determining corporate behavior.

"What is critical to understand here is that people do not do what you expect but what you inspect. Culture is not a prime mover. Rather it is a derivative. It forms as a result of signals employees get from the corporate processes that structure their work priorities."

His argument that culture is a result, not the cause of corporate processes is only partially correct. Culture isn’t static. As Edgar Schein has pointed out, the creation of organizational culture is a continuous circle: behaviors and recognition create culture, and culture leads to certain behaviors. And this is why it’s essential for any leadership team to model the lean behaviors they hope to instill in their organization. If the leadership team doesn’t live lean, they can’t lead lean.

It’s clear that at Wells Fargo, the stated value of “putting customers first” does not—cannot—coexist with a system that rewards employees for selling more products to those customers, irrespective of customer needs. It’s equally clear that in your organization, the stated need to embrace continuous improvement does not—cannot—coexist with a system that prioritizes cost savings over learning; that asks front-line employees to work differently, but not the C-suite execs; that requires mid-level managers to participate in lean activities, but not the vice-presidents. 

Gerstner points out that it’s the cumulative effect of processes such as performance measurement, compensation, and recognition (among others) that shape corporate culture. They also shape the likelihood of success in your pursuit of lean. Does your company reward individuals or teams for learning? Does your company recognize and celebrate the acquisition and deepening of knowledge about lean, or only revenue, profits, and cost reduction? Can you really expect your employees to care—to truly care—about all this continuous improvement bloviation when you haven’t built the systems and processes that elevate it to the stated level of importance?

If lean really is important to your organization, then you have to build systems to support it. It’s a large part of what the Lean Enterprise Institute calls the “daily management system.” That means that everyone—everyone—gets involved in lean activities, that everyone gets recognized for their lean work, that everyone gets rewarded for adopting (even if they don’t yet fully embrace) the essential behaviors. That’s how you build a culture of continuous improvement. 

Can you run your business on a 5-hour workday?

Fifteen months ago, Tower Paddle Boards abandoned the standard eight-hour workday. Since June 2015, employees work five-hour days, from 8am to 1pm. Five hours. Five.

You can probably imagine all kinds of problems with such a short workday, but no: the same amount of stuff gets done in four days than in five, mostly because when you have less time, you tend to compress stuff out that doesn’t matter. The 10-person firm made it to the Inc. 5000 list of fastest growing companies with a 40% increase in sales, and will hit $9 million in sales this year. 

The switch to a five-hour days was carefully planned. They did a test run for a few months under the guise of "summer hours." They instituted a 5% profit-sharing plan to get employees to focus on outputs (production), not inputs (number of hours on the clock) in order to remind them that they had to be as productive as they were during the old eight-hour workdays. They used improved technology -- a better FAQ page, video tutorials for customers, automation of previously manual processes -- to reduce the burden on the team and to make work flow more quickly. You can read all about the changes here.

However -- and this is the key point -- these improvements were driven by a goal to do more work in less time so that employees could have richer personal lives. (They are a surf lifestyle company, after all.) By restricting the critical resource of time, everyone was forced to figure out how to produce more efficiently. 

Tightening the constraints on office hours is no different from a company telling a division that it has to reduce lead time on a product, or take some percentage of cost out of component. Changing the standard forces the organization to figure out a better way to work. The only difference in the Tower Paddle Boards story is that the new standard was imposed for better work-life balance (surely an element of respect for people), and -- most importantly -- that the president challenged the unspoken assumption that people had to work 40 hours per week. 

Tower Paddle Boards is just one example. Numerous companies, among them KPMG and Reusser Design have moved to four-day workweeks (although they work 10-hour days), as has Slingshot SEO. Jason Fried, CEO of Basecamp does the same. He says, "the same amount of stuff gets done in four days than in five, mostly because when you have less time, you tend to compress stuff out that doesn’t matter." And all these CEOs report that not only do employee morale, engagement, and retention skyrocket, the work schedule makes them the employer of choice in their geographic area. 

I've written before (here and here) about the way that the lean community treats managerial work differently from shop floor manufacturing work. We've come to accept that office work won't get done in 40 hours per week, and that working late at night or on weekends is normal. Instead, we should be seeing that behavior for what it is: a sign of a problem for which weekend work is simply a countermeasure.

The example set by Tower Paddle Boards shows the benefits of forcing a new, higher standard on office and managerial work. You may not be able to run your business on a 20-hour week, but you might be surprised at how much more efficient you can become.