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The ants know it. Why don't we?

A new study in the journal Behavioral Ecology and Sociobiology finds that in ant colonies, a large number of worker ants are idle at any given time. (No, I don't subscribe to this journal -- I just heard about it on the radio.) These ants aren't just lazy slackers, though. As one of the researchers explains it,

. . . in order to make sure that the right number of workers are allocated to all the particular jobs that have to be done, it's beneficial if the colony has some excess workers -- essentially, extra workers, more than the number that they need to get the work completed because it just makes that process run more smoothly -- of actually figuring out who has to do what.

Sounds to me that the ant world has figured out Little's Law -- that the cycle time to get essential ant business done increases exponentially when labor utilization crosses a certain threshold. Maintaining slack in the system enables the colony to be more effective when work has to get done (like collecting food for grasshoppers).

Most companies realize that Little's Law 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. We even do this to ourselves: we pack our calendars with meetings, projects, and tasks, guaranteeing that the inevitable glitch in our systems (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.

A terrific article in Strategy + Business tells the story of St. John’s Regional Health Center, where the operating rooms were at 100 percent capacity. Emergency cases would lead to postponing long-scheduled surgeries, forcing doctors to wait several hours to perform their cases (sometimes as late as 2 a.m.) and requiring staff members to work unplanned overtime. The hospital was constantly behind.

The solution? Leave one operating room unused so that it would be available for unplanned, emergency cases. That room provided the slack the system needed for the hospital to run smoothly. The authors explain:

On the surface, St. John’s lacked operating rooms. But what it actually lacked was the ability to accommodate emergencies. Because planned procedures were taking up all the rooms, unplanned surgeries required a continual rearranging of the schedule. . . .Once a room was set aside specifically for unscheduled cases, all the other operating rooms could be packed well and proceed unencumbered by surprises. The empty room thus added much-needed slack to the system. Soon after implementing this plan, the hospital was able to accommodate 5.1 percent more surgical cases overall, the number of surgeries performed after 3 p.m. fell by 45 percent, and revenue increased.

What's happening in your product development team, your credit department, your finance group? 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 answer customer questions in a timely fashion? 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?

Can you run your organization as intelligently as an ant?

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Your lean transformation is going to fail.

Are you considering a lean transformation? Don't bother. You're probably going to fail. The truth is, most companies are temperamentally unsuited for lean. Maybe management doesn’t have the patience and long-term outlook to stick with anything for more than a year. Maybe the executive team sees lean as just an HR program, or something that they can hand off to the quality department. Or perhaps the company’s leaders aren’t emotionally ready to make the fundamental change in leadership style from command and control to coaching and consulting. And maybe the interpersonal soil between labor and management is so poisoned by a lack of trust that lean will never take root and grow.

Good luck trying to succeed with lean in this kind of environment. You’re much better off just doing a few improvement projects here and there (with or without lean tools) to improve sales or profit margins. You’ll save yourself lots of money and time, and spare yourself a giant headache. A lean transformation? It’s just not worth it. You’ve got about as much chance as Donald Trump does of getting elected president.

But if, against all odds and common sense, you really do want to pursue lean, you’ll want to make these five commitments.

  1. Take a minimum five-year view. Consider any financial gains in the short term as a gift, strictly as icing on the cake. If you really want to transform your organization, it’s going to take a long time to change the fundamental thinking and culture of your firm.
  2. Hire a coach for everyone on the leadership team—including the CEO. Give the coach tools to hold execs accountable for changing their behaviors. (Hmm, performance reviews and pay docking?)
  3. Get rid of executive offices. Move everyone onto the floor in their respective functional areas. Require that senior leaders spend a certain amount of time each month doing one of the front line tasks in their departments.
  4. Insist that all members of the leadership team attend at least one improvement conference per year.
  5. Commit to a policy of no layoffs as a result of improvements.

Making these commitments won’t guarantee success in your lean journey. But without them, you’ll almost certainly fail.



Proclamation, Observation, Participation


John Wooden, legendary coach of the UCLA men’s basketball team, demonstrated basketball techniques and plays on the court with his players. Jim Caldwell, the highly respected former coach of the Indianapolis Colts, used to go over the offensive game plan each week with his team, imitating a safety or a linebacker so that his quarterback would understand how to react. Coaching—and leading—in a business setting should be the same. Great coaching and leadership doesn’t happen through proclamation or mere observation. It happens through participation in the activities that your team is doing.

Proclamation: At the lowest level of involvement and effectiveness, proclamational leaders dictate how work should be done and how processes should operate, but they don’t join in the change. They continue to fight fires, attend executive briefings, and make decisions and manage the business from the executive conference room. These are the CEOs that are shocked (shocked!) at actual working conditions when they go on Undercover Boss.

Observation: Observational bosses are better than proclaimers. They recognize the need to go to the front lines where work is being done so that they can see problems and issues first-hand. However, because they don’t join in the actual work, they never experience the daily frustrations and obstacles that affect workers. And in general, they don’t understand the work well enough to help improve it.

Participation: At the highest level of effectiveness, participatory leaders not only get out to the front lines, they get involved in the work itself. They model the right behaviors and techniques, and they work shoulder-to-shoulder with employees to better understand what’s happening. (Within reason: no one needs a hospital CEO doing their coronary bypass.) As Art Byrne, former CEO of Wiremold says, “You can’t just send a memo. You’ve got to lead it. Show them by example, do it on the shop floor.”

Leadership is more than simply dictating memos from the C-suite on how things should be done. It’s more than observing the messy reality of what’s happening on the front lines (although that’s important). Leadership—great leadership— requires active engagement and participation.



What Problem Are You Trying to Solve?

The soul-deadening excesses of corporate 5S tyrants continues to astonish me. While leading a workshop at a healthcare client last week, I learned that two of their internal lean champions—and I use that term VERY loosely—had become tin-pot 5S dictators. One of these so-called lean leaders forbade anyone to have more than a single personal photo on their desk. Another dim bulb insisted that everyone put blue tape outlines around their computer, phone, stapler, etc. These exercises in small-minded stupidity were all the more surprising because this is an organization that has been pursuing lean for several years now, has a lean leadership development program in place, and has been consistently working with an outside consultant.

I’ve written before about the absurdity and wrong-headedness of transferring 5S in a literal fashion from the factory to the office. Setting that equipment in “order” doesn’t accomplish anything, because—as far as I know—no one has ever lost their computer or their keyboard. Setting the information that office workers manage in order is a good idea, but not the computer itself. And as far as the one-personal-photo limit? That’s stupid. And cruel. And pointless.

5S is nothing more than a tool designed to solve specific problems, like abnormalities in a process that might otherwise be hidden, or wasted motion while looking for tools. But it’s a tool for a specific problem, not something to be slavishly and mindlessly applied because it shows up on page 34 of your Big Book of Lean. That makes as much sense as using a crescent wrench to hammer a nail. Or doing extended calculations in a table in Word.

Whether you’re implementing an improvement program on your own, or you’re getting help from an outside consultant, you always need to start with this fundamental question: What problem am I trying to solve? The answer to that question will direct you to the appropriate tool (if it exists), or force you to invent your own.

Stop worshipping at the altar of Toyota. Instead, learn from Toyota. They invented tools to solve their specific problems at specific times. You need to do the same.

Commit to problem solving. Commit to learning. But don’t commit to 5S unless it's relevant for the problem you’re facing. Otherwise, all you’ll get is alienated workers who will leave you for an organization that allows them to have a picture of their wife AND their dog on their desk.


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Don't confuse posters with action.

5S Signs vs Adoption  

I have a new theory: the more posters, stickers, and banners promoting 5S, the lower the level of adherence to 5S principles. You can extend this idea to pretty much anything a company deems important: if leadership is promoting respect, or innovation, or safety, you'll probably find sexual harassment charges, me-too products, and lots of worker's comp claims.

Point #10 of Dr. Deming's 14 Points states, "eliminate slogans, exhortations, and targets for the work force." (Yes, I'm selectively quoting. This point is in reference to defects and productivity, but I think that the basic argument holds true.) Instead, "institute leadership" (point #7) to get the results you're looking for.

People are social animals. We take our behavioral cues by observing leaders' actions, not from reading the wallpaper. If you want 5S, you've got to live 5S. I know of no better example than the president of a $100M contract manufacturer of electronics boards, who gets on his hands and knees and cleans the floors of his company. Every. Single. Morning. (Check out this photo from Kevin Myer's excellent post):

Presidential 5S

If you want 5S -- or respect, or cost savings, or safety, or whatever -- first, get on your knees and start doing it yourself.

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The Silent Andon Cord

I was fortunate to hear Rich Sheridan, president of Menlo Innovations and the author of the terrific book, Joy, Inc., speak at the AME Innovation Summit last week. At one point, he explained that "the sound of silence from your colleagues is a signal that they need help." There's always conversational noise at Menlo Innovations. It's an open office environment, and his programmers work in pairs, so there's always plenty of talking. If programming is progressing smoothly, there's a consistent conversation between the programmers. But if there's extended silence, the programmers have probably hit a roadblock and are having problems figuring out a way around it. Essentially, the sound of silence is a kind of invisible, silent, andon cord. When it's "pulled," one of the nearby programming teams comes to help.

I love this story.

In a typical office environment, it's often an effort to signal that you need help: you have to get up from your desk and find your boss or a colleague, which might take 2 minutes or 20. There's also the need to overcome the psychological hurdle of explicitly saying that you've got a problem and need assistance. Menlo's approach eliminates the need to find someone while removing the psychological hurdle. How easy is it in your company for people to get help when they need it?

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Hiding from Managers is not the sign of a Kaizen Culture.

Harvard Business School professors are at it again. Last week, I was incredulous about their research suggesting that maintaining "strategic inefficiencies" in a hospital is a savvy way to discourage physicians from ordering unnecessary tests. This week I'm gobsmacked by their research suggesting that decreasing observation of workers increases productivity. I'm sure that Bill Waddell will soon be fulminating about Harvard's ivory tower view more convincingly than I will. But in the meantime, check out what Professor Ethan Bernstein calls the Transparency Paradoxthat watching your employees less closely at work might yield more transparency throughout the organization. In his studies at a global contract manufacturer's plant in Southern China, his team of researchers

were quietly shown 'better ways' of accomplishing tasks by their peers-a 'ton of little tricks' that 'kept production going' or enabled 'faster, easier, and/or safer production,'" he writes. "Then they were told 'whenever the [customers/managers/leaders] come around, don't do that, because they'll get mad.'"

The official company practices happened to be less effective than the tribal tricks of the trade—tricks that the employees hid from the higher-ups, thus thwarting the goal of learning by observing. Bernstein says that there was no ill-intent or cheating behind such hiding behavior, but merely a rational calculation about human behavior: Operators were hiding their freshest, most innovative techniques from management so as not to "bear the cost of explaining better ways of doing things to others."

In the paper he recalls a worker telling [a research team member], "Even if we had the time to explain, and they had the time to listen, it wouldn't be as efficient as just solving the problem now and then discussing it later. Because there is so much variation, we need to fix first, explain later."

To be fair to Professor Bernstein, he points out that the workers did share ideas with their supervisors after testing and perfecting them:

"There was a pride in ownership leading to the desire to share," Bernstein says. "And so they did. But only after they had data to support their new approach."

But what's troubling about this study is the assumption that there's an innate and immutable human tendency inside any organization to hide work so as "not to bear the cost of explaining better ways of doing things." Now I don't know anything about the organizational culture in this global contract manufacturer in China, but I do know that Toyota, Autoliv, Wiremold, Lantech, and hundreds of other companies have demonstrated that you can create a culture that prizes, rewards, and elevates the habit of sharing information and improving processes through constant application of the PDSA cycle.

Professor Bernstein goes on to explain that

On the manufacturing floor, the workers were trying to manage the attention of the managers. They knew that if they did something that looked weird, it would draw attention and, quite frankly, would disrupt their current work process. If they didn't look weird, then that wouldn't happen. And they knew that just for the sake of getting the production numbers, sometimes it would be good to attract attention and sometimes it wouldn't.

Professor Bernstein's research was particularly irritating to me because I'm in the middle of reading Jon Miller's excellent book, Creating a Kaizen Culture. Jon argues convincingly that the highest performing organizations avoid the implicit assumption that managers and employees are on different teams (at best) and antagonistic (at worst).

A culture that has as its raison d'etre human improvement  doesn't need to shield workers from managers. When supervisors' and managers' primary function is the nurturing and development of front-line employees, there's no need to hide "for the sake of getting the production numbers."



Going to the (food truck) gemba

Roy Choi, the inventor of the Korean Taco and one of the fathers of the food truck craze, was interviewed on Fresh Air last week. He's a restaurateur, a cook, an author, and clearly a man who understands the power of "going and seeing." The interviewer, Terry Gross, asks Choi how much time he spends in food trucks -- between his book tour and the challenges of running four restaurants in addition to the food trucks, he's a pretty busy guy.

GROSS: So, how much time do you actually spend in trucks?

CHOI: I'm there every day.

GROSS: Oh, really? I just assumed that you had other people doing that.

CHOI: No, I have a crew, you know, that cooks, just like a chef has cooks in the kitchen. But the trucks are my kitchen, and so that's where I am. You know, if I'm not doing something crazy like this [interviews] or doing a book tour, I'm with my trucks, on the streets with the people. I don't know where else I would be. It's my life.

GROSS: But you have several restaurants now, too.

CHOI: Yeah. Every day, I wake up. My only goal every day when I wake up is to try to see every single person within my organizations and shake their hand and give them a hug and then check the food, and then go back through at night. . . . I have four places, four restaurants. So I'll hit all the restaurants during the day, check on prep, say hello to everybody, hit one lunch truck, hit the trucks in the morning, as well, to check on prep, and then do some office work. And then I go back out and check on the trucks again, and then I go back out to the restaurants and then enjoy the crowd and enjoy the people and see them eating. I really get a lot of energy and my information from how people are eating the food. So that's where I am.

Sometimes when the lean community talks about "going and seeing" (particularly as part of leader standard work), it comes across as a perfunctory, mechanical, activity. I think Choi's comments really get to the heart of what "go and see" is all about.

It's about showing concern for your employees -- even if you don't actually give them a hug. It's about respect for people and by seeing how they're working and making corrections or providing help, if necessary. It's about getting close to the customer, and learning by observation when you see how they interact with your product or service.

I don't know about you, but I call that leadership.

You can read the entire transcript or listen to the interview here.


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How to make lean ideas spread more quickly.

In his latest article in the New Yorker (Slow Ideas: Some innovations spread fast. How do you speed the ones that don’t?), Atul Gawande argues that there are ways to increase the speed at which new ideas spread. I think there are powerful lessons for lean leaders in his analysis. Gawande relays the dramatic differences in the adoption rates of anesthesia and antisepsis in medicine. In October 1846, the first patient was anesthetized in a US hospital for the excision of a tumor. Within eight months, anesthesia was being used all over the world, and within seven years virtually every hospital in the US and Britain had adopted it. By contrast, Joseph Lister first published a series of reports in 1867 about the benefits of antisepsis, but it was over twenty years before sterile procedures and practices became the norm. As Gawande describes it,

two decades [after Lister's reports], hand washing was still perfunctory. Surgeons soaked their instruments in carbolic acid, but they continued to operate in black frock coats stiffened with the blood and viscera of previous operations—the badge of a busy practice. Instead of using fresh gauze as sponges, they reused sea sponges without sterilizing them. It was a generation before Lister’s recommendations became routine and the next steps were taken toward the modern standard of asepsis—that is, entirely excluding germs from the surgical field, using heat-sterilized instruments and surgical teams clad in sterile gowns and gloves.

Gawande goes on to argue that there were two key differences that caused anesthesia to be adopted more quickly than antisepsis:

First, one combatted a visible and immediate problem (pain); the other combatted an invisible problem (germs) whose effects wouldn’t be manifest until well after the operation. Second, although both made life better for patients, only one made life better for doctors. Anesthesia changed surgery from a brutal, time-pressured assault on a shrieking patient to a quiet, considered procedure. Listerism, by contrast, required the operator to work in a shower of carbolic acid. Even low dilutions burned the surgeons’ hands. You can imagine why Lister’s crusade might have been a tough sell. This has been the pattern of many important but stalled ideas. They attack problems that are big but, to most people, invisible; and making them work can be tedious, if not outright painful.

How about the spread of lean ideas through an organization? It seems to me that we face similar challenges. Most organizations have adapted over time to the inefficiencies and problems that their processes create. People are so used to the problems -- product defects, mis-shipped orders, overworked staff, long lead times -- that they no longer question whether or not those issues can be improved. They're just taken for granted as the way things operate. The problems have, in essence, become invisible -- like germs.

Moreover, embracing lean necessitates adopting new approaches to work -- single piece flow, visual management, etc. These new approaches are neither comfortable nor easy for leadership or front-line staff. Yes, lean makes life better for customers (higher quality, lower costs, faster delivery), but in the short term, it doesn't make life any better for workers.

So how do you get ideas to spread more rapidly? Gawande suggests that:

  1. You have to understand existing norms and barriers to change to really grasp what’s getting in their way.
  2. You need “seven touches” -- that is, you need to talk to people at least seven times. You can't rely on evidence, no matter how powerful.
  3. You need to have just a few key, easy to remember messages about the new ideas.

Gawande explains that

“Diffusion is essentially a social process through which people talking to people spread an innovation,” wrote Everett Rogers, the great scholar of how new ideas are communicated and spread. Mass media can introduce a new idea to people. But, Rogers showed, people follow the lead of other people they know and trust when they decide whether to take it up. Every change requires effort, and the decision to make that effort is a social process.

The lesson of this article is that a training program, or a lean promotion office, or a couple of workshops will not be sufficient to spread the change throughout your organization. No matter how logical the changes and no matter how apparent the benefits, you won't be able to spread lean without consistent, one-to-one mentoring.

For another view on this article and its applicability to lean, read Mark Graban's post at the LeanBlog.


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You Call That Leadership? (Part II)

In last week's blog post, I took Strategy+Business to task for suggesting that a leader ought to make three major decisions within the first ten days. I think that's a lousy way to lead and is fundamentally disrespectful to the people who work in the organization. So I was gratified to read this week's NYTimes Corner Office column with Bill McDermott of  SAP. Apparently, Bill also believes that asking questions and showing respect for employees is much more important than acting quickly to impress people:

I moved up to become the sales operations manager for the New York region [of Xerox], then became the district manager for Puerto Rico and the Virgin Islands. Our region was ranked 86th in the company out of 86....

So now the challenge was, how are you going to make these guys winners? I spent two weeks interviewing everybody and listening. I’d sit there and just say, “What do you think we need to do?”

This attitude is exactly what's meant by the lean precept of "go and see." And the result?

After doing that for two weeks, I found out the three things that were unanimous in terms of what people thought we should do. No. 1, they wanted to be motivated. A previous boss, they told me, had been very financial in his orientation, and focused on cutting expenses. The second thing was that they wanted to have a holiday party, because they had lost the holiday party. The third thing is that they needed clear direction on what they were supposed to do. “Just tell us what to do,” they said.

So we basically gave them three things that we were going to focus on in the business. Then we gave them inspiration and pageantry at every turn to celebrate the victories as we made progress against those three goals. And then we had the holiday party, which was the most important of all. By the end of the year, we ranked No. 1 in terms of beating our plan.

Now, some of these things might seem trivial. I have a Stanford MBA, and I'm pretty sure that we never had a class that taught the significance of a holiday party. I can almost guarantee that if Bill hadn't talked with everyone face-to-face right up front, he wouldn't have understood its importance, and he would have missed the opportunity to make a real improvement in morale and employee engagement.

Go and see. Ask questions. Show respect. You might be surprised at what you learn.


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You call that leadership?

Booz & Co’s recent article on strategy and leadership misses the point of, well, real leadership. What You Should Accomplish in Your First 10 Days argues that in our “exponentially faster” business world new CEOs must take meaningful action in their first 10 days on the job. Only through rapid, dramatic action can a new leader reinvigorate a struggling company. Nonsense.

The author proposes that the ten-day plan should involve

three significant decisions. Granted, three is an arbitrary number but it is one that will allow the incoming CEO to demonstrate knowledge of the business, surety of direction, and bias for action—without coming across as reckless. These decisions could include a declaration of general strategic direction, moves among senior personnel, or the launch of a new initiative. . . . The goal is to blast through legacy roadblocks, set the organization in a firm direction, and energize activity from top to bottom.

This proposal surely feeds into the egos of those CEOs who want to put their personal brand on the organization, but I doubt that the employees would respect anyone who makes dramatic changes so quickly, before they really know the company.

“Go and see” is one of the core principles of lean thinking. You can’t make good decisions if you don’t understand a situation deeply, and you can’t understand a situation deeply without actually seeing first-hand what the reality is. “Go and see” is also a fundamental way to demonstrate respect for people. Making sweeping changes that effect hundreds or thousands of people in the first ten days—without having a deep understanding—is fundamentally disrespectful.

In rare cases—say, Steve Jobs on his return to Apple—that kind of fast action might be appropriate, but it’s hard to think of any other successful leadership change that involved major changes in the first ten days. Allan Mulally at Ford? Sam Palmisano at IBM? Anne Mulcahy at Xerox? No, no, and no. If you want action that fast, you’re more likely to end up with “Chainsaw” Al Dunlap than with Andy Grove.

Real leadership requires listening and understanding. And that takes longer than ten days.

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Are you providing leadership or support?

I’ve been talking to many companies recently that are committed to improving their processes. Or at least they say they are. What I usually see is a company that wants improvement, but management isn’t necessarily willing to make the commitment to the changes necessary for real, sustainable improvement. Case in point: one firm I know has embarked on a project to speed up product development. Although the company dominates its category, there are far too many dropped balls, rework, and missed deadlines for it to continue thriving in its market.

However, management is unwilling to postpone any of the current development projects to free up the developers’ time—these new projects have terrific revenue potential. But to the developers, who are currently working 60 hours per week, this decision seems unreasonable. The developers are expected to carry their current—full—load of work, and still add on this major new responsibility.

This is where real leadership comes in. As Jamie Flinchbaugh says,

I go to many organizations that say, “We have management support. They’re 100% behind us.” The problem is, behind is behind. Leadership is out in front. Leading lean is an inside out transformation, and must begin with the leader’s own mindset and behavior.

In this case, leadership means making the difficult decision to forego some short-term revenue by postponing one (or more) of the new products in development in order to create the capacity for process improvement. Truly leading the improvement effort means making the organization-wide, financially challenging investments that will lay the foundation for future success. Leadership means hacking through the jungle with a machete, clearing a path for front-line staff, supervisors, and managers to follow.

What are you doing in your company? Are you leading or supporting the efforts of your team?




First things first.

I've been helping a large outdoor goods company with its strategy development. The CEO has been struggling to move the process forward for a few months now, and he turned to me for outside perspective. It became quickly apparent that his difficulty was not with the process per se. The difficulty was rooted in the lack of a clear direction: what does his company represent, and where does it want to go in the next 5-10 years? You can't develop a strategy until you can answer those questions.

I'm personally fond of the approach Jim Collins described in Built to Last. He suggests that you first clarify your core values and purpose, and a "big, hairy, audacious goal" that will take you 10-30 years to reach. (Read more about it in this HBR article, and download this helpful worksheet from his website.) Now, not many companies are ready to commit to a 10-30 year goal, but there's no reason you can't modify it by setting a 5-10 year goal.

I haven't consulted to them, but my guess is that both Nike and Patagonia have absolute clarity in these areas, and as a result they're able to set -- and change -- their strategies as needed to attain their goals. Their strategies are documents designed to help them create their envisioned future. As for what particular tool or process they use to develop the strategies? Who cares. There are a host of approaches out there, any one of which will do an adequate job. And since strategy is flexible -- It has to be, since external conditions change so frequently -- it doesn't really matter which you use. The critical part is defining who you are and where you want to go.

Following a strategy without first having a core ideology and a clearly defined goal is like following a compass without a magnetic needle pointing north. You'll certainly move, but you have no idea where you'll go.



Respect for people -- Marissa Mayer edition

Good god -- the blogosphere and the press is full of judgments on Marissa Meyer's decision to end telecommuting at Yahoo. Depending on who you read, she's either a savvy executive making the tough choices necessary to rescue the sinking Yahoo ship, or she's an industrial era luddite clinging to an old work paradigm who, not incidentally, has betrayed women. Of course, none of these armchair quarterbacks (as near as I can tell) actually work at Yahoo. None of them know what the real situation is, either in the head office or in the home offices of the telecommuters. Without actually spending time at Yahoo, passing judgment on her decision violates the "go and see" principle of lean.

I have my own opinions about her decision, but in the absence of observable fact, my opinions are based on preconceptions, personal biases, and assumptions. It would be both foolish to judge her decision without knowing what's really going on.

Before we condemn Mayer's new policy as showing a lack of respect for her employees, we should show *her* some respect by going to the gemba and seeing first-hand what's happening at Yahoo. Until then, we have no right to opine on her new policy.




Why reorganizations (almost always) fail

Reebok cut its sales forecast by 33% earlier this year. That means good news for the company that prints its business cards -- there will be a lot of job title changes. When sales forecasts decline, the typical corporate response is to lay off some people and reorganize. To that end, Matt O'Toole, Reebok's chief marketing officer, announced that

Earlier this year we announced the reorganization of the Reebok Brand team into six core Business Units (Training, Running, Walking, Studio, Classics, and Kids), designed to deliver against our ambition to become the leading fitness brand. Today, we continued this reorganization with the implementation of a new global-direct operating model between the global organization in Canton and our markets, and streamlining our satellite creation activities. These changes, which will go into effect January, 2013, will increase our effectiveness, our speed to market and our efficiency.

Now, I'm not exactly sure what "streamlining satellite creation activities" means. But I do know that reorganizing a brand team -- or any team, for that matter -- seldom results in a big increase in sales.

I've been involved in numerous reorganizations myself, and never once did they affect our sales. We moved desks, we got new business cards and job descriptions, we had different people in our meetings, but the product didn't change. And I predict that's exactly what will happen with Reebok.

Reorganization is a typical corporate knee-jerk reaction to a problem that's poorly understood. If you approach the problem of falling sales from an A3 mindset -- really trying to understand the nature and root causes of the problem, and to design a suite of countermeasures -- you'd see that that changing people's seats has about as much chance of improving the situation as changing the Weather Channel has of improving your actual weather. Why? Because consumers don't give a damn how you're organized internally. They buy products that meet their needs and wants, regardless of who works in what department or what their title is. And I can guarantee you that the product isn't going to change just because Classics is now a "core Business unit." The countermeasure doesn't tie back to the root cause of the problem.

Moreover, you may not even have the right people and necessary skills to staff the new organization. In one company that I worked for years ago, we split our product marketing team into business units to increase focus and sales in each category -- but we didn't have enough people to completely staff each business unit. The result? After a few months, we ended up doing pretty much the same work as before, and within 18 months, we reorganized again right back to where we started.

Let's also not forget the destruction of relationships, experience, and tribal knowledge that helps expedite decision-making and improve productivity. Reorganizations bulldoze those accumulated assets into oblivion, ensuring that for six months at least, the company will be operating much less effectively.

Reorganizations that work best don't just reshuffle the boxes on an org chart. They're strategically designed to take cost out of a process, or bring products to market faster, or expedite decision-making. Most of all, they're precisely targeted to address the root cause of the problem.

Otherwise, the only company that will see a sales increase is the one printing the business cards.



"That's just our culture, and we can't change it."

"That's just our culture, and you can't change it." Last week, while presenting a workshop based on my book, A Factory of One, at the AME Conference, I was struck by the fatalism that infected so many participants. We were talking about the impediments to individual effectiveness -- the things that create waste instead of value -- and so many people said with a resigned air, "That's just our culture, and we can't change it."

The disrespect for closed doors and interruptions by coworkers that force people to multitask? That's just our culture. The expectation that we'll respond to all emails within 10 minutes? That's just our culture. The sense of entitlement (or the ignorance) that permits executives to pile multiple projects on you, despite the inevitable explosion in lead time? That's just our culture. And there's no point in fighting it.

This passive acceptance of the status quo is shocking because it's so different from the attitude that these same people take when confronting other waste-ridden systems. I don't know any hospitals that attended AME that shrug their organizational shoulders and simply accept their ventilator-associated pneumonia rate as an unavoidable outgrowth of their "nursing culture" or systems. I didn't meet any manufacturers at AME who say, "Sure we've got a 22% defect rate on our products, but that's just the culture of our machinists." I don't know of any distribution companies in attendance that think, "It's too bad that our drivers mis-deliver packages all the time, but that's just the culture of the drivers and our lousy systems."

Ridiculous. In all of those examples, the leadership teams drive relentlessly to improve the quality, cost, and reliability of their systems and processes. Accepting the status quo is unacceptable.

So why do we have such a difficult time acknowledging both the necessity and the possibility of improvement in the way our people work? Why do we view the processes by which individuals get their jobs done as something fixed, immutable, or unworthy of improving?

The evidence is clear that, to quote Tony Schwartz, the way we're working isn't working. Whether it's the expectation that people are on call 24/7, or the design of workspaces that don't allow people to focus and concentrate on their work, or the overloaded project schedule that results in frustratingly long project lead times, we're just not being smart about how to get the best results from our people.

Why do we accept the fatalistic complaint that "it's just our culture," and there's nothing we can do about it? Just because the inefficiency and waste of our current way of working doesn't directly show up on the income statement doesn't mean that we should tolerate it any more than we should accept that patients coming to our hospital get sicker when they're with us.

It's time to view individual productivity as a non-negotiable area of improvement. That's nothing more than respect for people.



"The signature of mediocrity is chronic inconsistency."

This is what really hit me when I listened to Dan Pink's "Office Hours" interview with Jim Collins:

The signature of mediocrity is not an unwillingness to change. The signature of mediocrity is chronic inconsistency.

This was a finding from Collins's research for his latest book, Great By Choice -- mediocre companies have no consistency in leadership, in mission, in management style, or in philosophy. They drift with the prevailing tides, unwilling (or unable) to chart a determined course.

Collins believes that great companies adhere to "SMaC" -- Specific, Methodical, and Consistent -- guidelines for their business. A SMaC recipe is a

set of durable operating practices that create a replicable and consistent success formula; it is clear and concrete, enabling the entire enterprise to unify and organize its efforts, giving clear guidance regarding what to do and what not to do.

Southwest Airlines has 10 such principles -- fly only 737s, no flight segment over two hours, stay out of food service, and stay passenger focused – no freight or mail, etc. Whereas tactics may change with the situation, SMaC practices can last for decades.

Chronic inconsistency in improvement efforts dooms companies to mediocrity as well. I've seen companies go from quality circles to TPM to business process reengineering to Six Sigma in an effort to improve quality, lower costs, and increase employee engagement. Eventually, employees become cynical, deriding each new effort as the management "flavor of the month." And they're not wrong, given that each new approach usually discredits the previous approach.

There is no magic formula for organizational greatness. But it's clear to me that consistency in improvement methods is just as important as consistency in organizational guidelines. That, I think, is one of the beauties of lean. The focus on continuous improvement and creating a community of scientists devoted to the pursuit of perfection (even while recognizing that perfection is unattainable) creates a consistency that other methods don't. Lean is a "SMaC" approach towards improvement. It's not flashy, but it provides a clear route towards organizational excellence.


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My (one & only) obligatory "Management Lessons from the Olympics" blog post

I'm feeling a little bit lonely out here. I may be the only person in the blogosphere not to blog about the Olympics. No "Leadership Secrets from the Balance Beam."

No "Three Things You Can Learn from Sprint Cycling."

No "Teamwork Lessons from Dressage."

And no "What Synchronized Divers can Teach You about Innovation."

But now that the Olympics are over and the Olympic-related posts are (mercifully) dying down, I'll give it a shot. I think we can learn a lot from the track & field events. (Of course, I'm a former competitive track and field runner (and coach), so what did you expect?)

The Value of Consistency and Patience: Galen Rupp (silver medal, 10,000m) is the first American medalist in the event since Billy Mills in 1964. Rupp is supremely talented and worked his ass off over the past four years to get to the medal stand. However, there was absolutely no magic to his training program -- he repeats the same workouts every 8-12 weeks during his training cycle. The repetition of the same workouts provide consistency, a clear benchmark for improvement, and the ability to adjust (in the PDCA cycle) his training if needed. Lesson for businesses: don't abandon your tactics or approach to the market if they don't yield results in the first quarter. It's the steady accretion of your activities that leads to long-term success, especially when consistency allows you to engage in PDCA along the way.

Play to your Strengths: Usain Bolt (triple gold medalist in the 100m, 200m, and 4x100m relay) isn't the fastest guy out of the blocks. At 6'5" he's much taller than the average sprinter (who's usually about 5'9"-5'11"), so it takes him longer to uncoil at the start and accelerate to top speed. However, Bolt does have the highest top end -- and that's what he focused on in his training, not his start. Lesson for businesses: emphasize your strengths rather than trying to shore up your weaknesses. If quality is your strong point (Whole Foods, Amazon), then push your quality so far beyond your competitors' that their products and services look second-rate. If service is your bailiwick (Nordstrom, Zappos), then make your standard the gold standard.

Believe in your Strategy. And Stick with It: David Rudisha (gold medal, WR in 800m) is a rarity among middle distance runners: in big races he doesn't run "tactically," lurking in the back or middle of the pack and waiting to kick in the last 200m. He runs *his* race: he takes it out hard from the start and forces everyone to run on his terms. (Rudisha developed this approach after he lost a major race because he was boxed in at the end and couldn't accelerate to the front.) This tactic isn't without risk: if he goes out too hard, or if he's not in peak form, he could easily get outkicked by a fresher competitor who conserved his strength. But Rudisha would rather lose on his terms than on someone else's. And in fact he hasn't lost -- the tremendous pace he sets from the beginning takes the sting out of others' kicks. Lesson for businesses: you've got to stick with the strategy you believe in and execute it. Properly formulated strategy will leverage your strengths and unique capabilities. Don't change it because other companies are taking a different approach. Have faith in it, and don't run other people's races. Otherwise you might get boxed in.


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For god's sakes, go home.

I'm on vacation in Italy right now*, so this post feels particularly appropriate.

There are times when you have a huge project, you have quarterly earnings, I don't care what it is. And you are focused. You say to your family, "I'm not going to see you much this week or this month." And then when you go home, put the iPad away, the BlackBerry down, and be there. Don't be half anywhere. Be there. Wherever you are, be there.

-  Carol Bartz, former CEO of Yahoo and Autodesk

My friend Paul says that there are no rollover minutes in life. You get 1440 of them each day (if you're lucky), so use them wisely -- particularly if you're a leader. "Being there," as Carol Bartz would say, is a big step in that direction.

*I'm practicing what I preach. I wrote this post three weeks ago.



Three key principles at Novartis

I love this interview with Joseph Jimenez, the CEO of Novartis. He hits on several points near and dear to my heart. 1. Simplify: Jimenez knows that elaborate strategic initiatives have zero chance of success if they're not translated to a small number of concrete actions that people can take on a daily basis:

At Novartis, our business is very complicated. But you have to distill the strategy down to its essence for how we’re going to win, and what we’re really going to go after, so that people can hold it in their heads — so that the guy on the plant floor, who’s actually making the medicine, understands the three priorities that we have as a company.

2. Identify the value: Jimenez understands that the value of one's work is ultimately decided by the customer, and that far too many corporate activities are simply empty exercises by that measure:

We needed to shift the company to become more externally focused, versus internally focused. People were proud of producing 75-page PowerPoint documents, and that was seen as a success.  If the C.E.O. or the head of the division complimented you on your PowerPoint presentation, that was a good thing.  And I said, forget that. We have to put the patient at the center of everything we do.

3. First, look in the mirror: Jimenez describes how at an earlier job, his division kept missing their sales forecasts. A consultant pointed out that the root cause wasn't a lack of skills or a poor planning process; it was fear: people were afraid to tell the truth. And he realized that he bore some responsibility:

We had to change the behavior in the organization so that people felt safe to bring bad news. And I looked in the mirror, and I realized I was part of the problem. I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news. It’s a chance to say: “Hey, thank you for bringing me that news. Because you know what?  There are nine months left in the year. Now we have time to do something about it.  Let’s roll up our sleeves, and let’s figure out how we’re going to make it.”

Jimenez doesn't talk about lean in this interview. But the lessons and values he discusses certainly fit in with core lean principles.