Built-in Quality

My friend said this to me yesterday:

At BMW, all the cars that leave the factory are perfect. At Toyota, all the cars that leave the production line are perfect.

This is about as elegant a description of built-in quality that I've ever heard.

Attention to built-in quality is relatively visible in manufacturing processes, but it seems to me that it's vanishingly rare in office processes. Most corrections and rework are done at the end of a given process, when it's more difficult and more time-consuming to fix. In particular, given the ubiquity of, and reliance upon, spreadsheets, this is a real issue: a small error in only one cell propagates throughout an analysis and a business plan.

When my colleague Karen Martin teaches metric based process mapping, she emphasizes the importance of determining the "percent complete and accurate" data for each step in a process. This information reveals the (horrifyingly) low efficiency of the overall process. Equally important, though, this information helps us focus on the points in a process where we need to build-in quality.

What checks can we install to ensure that the information we send to our downstream colleagues is 100% complete and accurate? What error-proofing tools can we create? It's not that hard to insert data validation tools into a spreadsheet or a web form. Checklists and templates are other tools that can help ensure built-in quality.

It's time to raise the standards of excellence for the internal data that you manipulate to the same level as the product you deliver to your customers.

January 2014 Newsletter -- Unnecessary Complexity

Unlike suburban housing developments or modern cities, organizations don’t grow with some sort of rational, master plan. They evolve naturally over time. Unlike suburban housing developments or modern cities, organizations don’t grow with some sort of rational, master plan. They evolve naturally over time. . . . Download PDF to read the full article

NOTE: This article originally ran in the HBR blog.

Information 5S: Audio Edition

As I've argued many times before, 5S for knowledge workers applies to the information they manage, not the location of their staplers or the allowable size of family pictures on the desk. (See my posts here, here, and here.) Typically, we think of information in a visual format -- physical reports, spreadsheets, emails, etc. But a recent NPR story on the problem of hospital alarms made me realize that information can also come in an audio format -- and that format benefits from 5S as well. The 24 patients in the cardiac care unit at Boston Medical Center were averaging nearly 12,000 alarms a day. Some devices beep when they work normally. Other machines beep when they're not working. With 12,000 alarms a day, fatigue is a real issue:

Alarm fatigue is when there are so many noises on the unit that it actually de-sensitizes the staff, so the staff no longer hear them. If you have multiple, multiple alarms going off with varying frequencies, you just don't hear them. That obviously can be dangerous. Patients can die when an important alarm is missed or an electrode gets unstuck or a monitor's battery goes dead.

This situation is analogous to an overflowing inbox, where critical emails get buried in a long list of unimportant messages. Or a computer desktop crowded with all the files you've used over the past few months, making it laborious to find the one file you need for an upcoming presentation. Or a system that necessitates the use of multiple forms with redundant information in different layouts.

Although they didn't use this terminology, the hospital did 5S on the auditory information:

[Boston Medical Center] analyzed the alarms and found that the vast majority of alarms are unnecessary and can simply be switched off. Other low-level alarms were upgraded to crisis mode. Nurses were given authority to change alarm settings to account for individual patients' differences.

The result? The cardiac unit went from 90,000 alarms a week to 10,000 alarms a week -- an 88% reduction in useless information. Now, when a crisis alarm goes off, the staff can easily hear and respond. They're also better able to hear when a patient presses the call button for a nurse.

Remember: 5S isn't just for physical items. In an office or service environment, it's just as important -- if not more so -- to apply it to information, in whatever form you process it.

One way to avoid corporate self-aggrandizement

With all the recent news about Tony Hsieh's decision to flatten Zappos' organization, Girish Navani's (C.E.O. of eClinicalWorks) comments about titles in the workplace really struck me:

We don’t have titles. I used to call myself co-founder, but then some of our larger customers wanted to know who the C.E.O. was. Our whole company is built around teams. The only leadership position you can have is team leader. Your career grows through bigger projects and initiatives.

Full disclosure: when I ran my skateboarding shoe company for several years, the only titles my partner and I allowed was "worker." Our thinking was that if you couldn't identify the person's job by what he did, he probably wasn't doing his job all that well. And when I worked for a brief time at Adidas, I put "corporate fat" on my business card. (I figured that there's an unlimited supply of organizational fat, so it would be unlikely that I'd ever get cut. My boss wasn't amused, and mentioned that when I was fired eight weeks later. But that's another story.) So I'm always interested in the elimination of titles.

But leaving aside my preference for a non-hierarchical, low-title workplace, Navani is perspicacious in his assessment of human nature when he says:

Sometimes you have individuals who seek titles. But what I won’t do is create an unsustainable title warfare — today they’re a V.P., tomorrow a senior V.P., then executive V.P. New titles get old within the first day of having them. Titles are self-fulfilling, short-term objectives that you get tired of. Then you aspire for another title, and then you essentially create a business whose growth path of individuals now becomes their title growth rather than serious accomplishments and creating change in the industry.

Titles very often do create "title warfare." We've all worked with and for people who seem to prize the text on their business card over the organizational results. Human yearning for status often trumps the need of the larger group. And yet there are companies that have succeeded beautifully without titular trappings. Semco is one. CloudFlare is another. And Zappos is (sort of) following that path as well with its adoption of the holocracy.

I'm not suggesting that you mindlessly discard everyone's titles today. But I do believe that it's worth considering what effect all those titles has on overall organizational performance. It might be deeper than you think.

Is it time to find a new language?

Gemba. Nemawashi. A3 thinking. Kanban. Kaizen. 5S. Muda, muri, muda. Maybe it's time to get rid of the Toyota-spawned language of lean and create a native vocabulary.

The lean community has been breathing its own linguistic exhaust for a long time now, and I wonder if we've lost sight of how alienating, off-putting, and counter-productive the senmonyogo (専門用語 -- oh, sorry: jargon or specialized vocabulary) can be to the uninitiated. Any sort of change is challenging, and lean thinking is a huge change for most people. Why make it more difficult for people to embrace lean by using impenetrable or confusing language?

Some recent articles in the New York Times made me think that there are other, more approachable ways to describe basic concepts. For example, Karen Abramson, CEO of Walters Kluwer Tax & Accounting says,

"I call it “go to the floor.” At the beginning of any new assignment, I will always go right to the people who are on the front line, whether it’s our salespeople or a client or customer service people."

Let's not argue whether or not she is a "true" lean leader. Focus instead on the fact that when she says, "go to the floor," you immediately know where she's going. I'm guessing that most workers don't know where the gemba is at first -- but they do know where the floor is.

Or what about using evocative terminology from the omnipresent world of technology? Carey Smith, CEO of Big Ass Fans, tells the Times that

I sometimes describe myself as a “hyperlink.” I have an office, but most of the time I just walk around and try to determine if we’ve got any problems. It might be a minor thing, but I’ll take that and then try to track it back.

Again, I don't know whether or not he's a lean leader, but I do know that when he describes his role as acting as a hyperlink throughout a process, I have an immediate appreciation of what he's trying to accomplish, without resorting to gemba mumbo-jumbo. And when he "tracks it back," I get a much clearer picture of what he's doing than if he "walks the value stream."

A few months ago, Jon Miller of the Kaizen Institute pointed out that even the much-beloved term "A3 thinking" is an arbitrary choice:

Why don't we call it "One-page PDCA" or something more descriptively accurate? Marketing, mnemonics, first mover advantage, who knows.

Obviously, there are times when it makes far more sense to import a foreign word than to develop a new word or phrase in English. Sushi. Schadenfreude. Chutzpah. These words, and countless others, have found a happy home in the English vernacular -- and our language is the richer for it. But when you're trying to get people to adopt a new way of thinking and acting, I'm not sure that force-feeding (gavage) a bunch of abstruse words in English or a foreign tongue is necessarily redounding to our best advantage.

Fin.

Curious Cat Management Improvement Blog Carnival: Annual Roundup 2013, Part 3

John Hunter, the maestro of the Curious Cat Management Improvement blog and the year-end Management Improvement Carnival has once again allowed me to contribute a list of some of my favorite blogs and posts from 2013. I never miss reading these three blogs—they consistently educate, enlighten, and entertain me.

I reviewed Michel Baudin's epnonymous blog here and Mark Rosenthal's Lean Thinker blog here. For my final review, I've selected Bill Waddell's Manufacturing Leadership Center.

Full confession: I’m totally, utterly, and completely jealous of Bill Waddell. He’s smarter than me. He’s opinionated and passionate. He’s forgotten more about lean and manufacturing than I’ll ever know. He actually understands accounting. (I got a 29 out of 120 on my accounting mid-term. How I passed is beyond me.) But mostly, I’m pissed because he’s ten times as funny as me, and a hundred times more entertaining. My goal in 2014 is to bribe him to write my blog for me. Until that time, I’ll have to suffer the indignity of writing in the same blogosphere as Bill, so you should check out some of these posts that I envied loved.

Both of us wrote about the pathetic case of the Harvard business school professor who has dedicated the past several years to trying to prove that, in spite of the success enjoyed by companies like Toyota, Lantech, and Autoliv, workers actually do better when they’re hidden from their managers. So much for respect for people. Read Bill’s acid comments here. (And mine here!)

Bill is never shy about calling bullshit when he sees it, whether it’s from ivory-tower academics or from executives who have nothing better to do than create silos and fragment responsibility. He eviscerates both the “Chief Customer Officer” management fad, and the CEO who claims that you’re dead when your sales team works for the customer. He’s equally adept at the nuts and bolts of lean implementation—check out his argument that SKU reduction, while valuable, is not the same as a comprehensive lean initiative—and can in fact be a step backwards. Most of all, when you read Bill’s column, you get a passionate, articulate, and powerful defense of the principle of respect for people. Take a look at “Right Church, Wrong Pew” and “Respect for People Begins at the Hiring Office. . . Or Not” to see how to make a powerful, unabashed argument in support of this principle.

You may not agree with everything that Bill writes, but he'll always make you think (if only to wonder how he can read so damn much and still find time for his day job).

Check out the other year-end blog reviews on the Curious Cat website here. Or browse the entire blog review category here.

Curious Cat Management Improvement Blog Carnival: Annual Roundup 2013, Part 2

John Hunter, the maestro of the Curious Cat Management Improvement blog and the year-end Management Improvement Carnival has once again allowed me to contribute a list of some of my favorite blogs and posts from 2013. I never miss reading these three blogs—they consistently educate, enlighten, and entertain me. Earlier, I reviewed Michel Baudin's epnonymous blog. Today, I've selected Mark Rosenthal's Lean Thinker blog.

Mark Rosenthal’s occasional posts come straight from the shop floor. When you read his blog, you feel like you’ve been transported right to the action in the production line. That’s where he spends his time, and that’s the spawning ground for his ideas and reflections.

He describes the absurdity of the 20-page “lean audit” another consulting company uses to gauge a company’s progress, and advocates a far simpler approach (which comes straight from the standup meeting): what are you trying to achieve; where are you now; and what’s getting in the way. His story of how a team finally understood the purpose of 5S and how it affects workflow should be read by every consultant that’s ever mindlessly pushed a client to start with 5S because “that’s what you do.” Lest you think that Mark only knows about machine set ups, check out his article on leadership that connects a leader’s journey with Joseph Campbell’s concept of the hero’s journey. And lastly, if you’ve ever struggled to convince people of the value of checklists, read his post on a different way to view them: “Do vs. “Did You Do?” It's a subtle difference, but extremely powerful nonetheless, and might go a long way towards increasing acceptance and usage of checklists where you work.

Mark's writing -- both in style and in content -- reveals both his humanity and his deep understanding of respect for people.

Check out the other year-end blog reviews on the Curious Cat website here. Or browse the entire blog review category here.

Curious Cat Management Improvement Blog Carnival: Annual Roundup 2013, Part 1

John Hunter, the maestro of the Curious Cat Management Improvement blog and the year-end Management Improvement Carnival has once again allowed me to contribute a list of some of my favorite blogs and posts from 2013. I never miss reading these three blogs—they consistently educate, enlighten, and entertain me.

I'm breaking the list into three separate posts to increase the chance that you'll take the time to check out these posts. For the first installment, I've selected Michel Baudin’s blog. 

Michel Baudin’s posts fall into two general categories: the first is an in-depth discussion of some topic that he finds interesting—and given that he seems to have read a library’s worth of dust-covered tomes related to manufacturing, production, and industrialization, he has a lot of topics to cover. Did you know anything about orbit charts—when to use them, where they came from, and how to make them? Neither did I, until I read Baudin’s post on this topic. His exegesis on the purpose of standard work is a masterful explanation of why it’s essential to manufacturing excellence, while this post explains how it can foster improvement in a non-manufacturing environment as well. And if you want to know anything about poka-yoke, you don’t need to go any farther than this column.

The second type of post you’ll find on Michel Baudin’s site is a commentary on a news story or blog post—he calls this “Michel Baudin’s insight.” From almost anyone else, defining one’s own comments as “insight” would be insufferably arrogant. Michel pulls it off, however, due to the extraordinary depth and breadth of his knowledge and to his serious analytical acumen. Take a look, for example, at his compelling argument that mistake proofing must not add any labor to the operation, lest the people working in the operation work around it. Or the way he skewers the oft-cited maxim that “only the last quarter turn of the nut adds value.” Or his keen eye in spotting space design mistakes in the background photo of a newspaper article about lean in a hospital. Refreshingly, Baudin isn’t just a gear head. His understanding of lean goes far beyond the factory floor and the simple ROI metrics that other, less knowledgeable writers focus on. Notice how he takes to task the BCG consultants who wrote an article on lean that “only speaks the language of money,” neglecting the fact that not all improvements have a direct financial impact.

Read Michel's blog. The extraordinary breadth and depth of his knowledge guarantees that you'll learn something every time.

Check out the other year-end blog reviews on the Curious Cat website here. Or browse the entire blog review category here.

More bullshit business blather.

Another day, another boneheaded analysis by a supposed expert business journalist. This time it's Eric Chemi, journalist at Bloomberg Businessweek, who recent argues that it's beneficial for companies to be hated by customers. He makes a really good point. Except, of course, for the logical fallacies that permeate the piece and undermine his argument. For starters, Chemi cites monopolistic or oligopolistic companies as evidence that hated companies do well:

For all the usual complaints—such as “I hate dealing with this company” or “These guys are the worst at customer service”—about the usual suspects from the ranks of cable and Internet providers, airlines, and banks, it turns out they just don’t have much incentive to care. The companies you hate are making plenty of money. In fact, the scorned tend to perform better than the companies you like.

His poster child for business success is Time Warner Cable, which has seen its stock price increase 450% over the past five years. That's pretty impressive. . . until you compare it to the overall Dow Jones Industrial Average, which (depending on precisely when you measure it) is up about 825% during the same period. Although I'm not an expert on telecommunications, I do know that TWC has a near-monopoly on the New York City market for cable and internet, which is probably behind the stock increase -- not its legendarily bad customer service. How would these hated firms fare in a more competitive environment? Probably not nearly as well.

Chemi goes on to point out that statistically there's actually no correlation between customer satisfaction scores and stock market returns, and therefore there's no point in trying to improve those scores.

Your contempt really, truly doesn’t matter to these companies, with no influence on the bottom line. If anything, it might hurt company profits to spend money making customers happy. For cable-TV providers, an industry whose customers famously have few options, happy users could be a waste of money and bad for shareholders.

Fair enough. Except that stock price isn't the same as a company's "bottom line" by a long shot. Just take a look at the 35% decline in Apple's stock price in just a few months last year, even though its bottom line remained quite attractive. More importantly, it's ludicrous to assume that stock price is an indicator of long-term business quality or success. You don't have to look very far across the business landscape to find the carcasses of high-stock price firms that found out the hard way that their businesses were not, in fact, sustainable.

If you take a look at industries where competition really is cutthroat, what you find is that customer satisfaction really does matter to long-term success. Maybe not to today's stock price, but definitely to long-term viability. See Toyota, Proctor & Gamble, Wal-Mart, FedEx, or Southwest for evidence of that correlation. If lean teaches us one thing, it's that relentless focus on improving customer value is what separates the great firms from, well, business journalists like Eric Chemi.

Book Review: Creating a Kaizen Culture

I just finished reading Creating a Kaizen Culture, by Jon Miller, Mike Wroblewski, and Jaime Villafuerte. It's terrific, and I highly recommend it to anyone looking to deepen their understanding of lean and the term that we so easily bandy about without thought: "kaizen." The real value of this book, I think, is the emphasis on, and elaboration of, the "respect for people" element of lean. From all my readings and experiences, I've thought of respect for people in two primary ways: first and most obviously, seeing people as assets, not just variable costs to be fired when finances are tight. Second, avoiding what John Shook once called "laissez faire" management, in which you take a hands-off approach to management in order to avoid impinging upon workers' freedom.

This book argues convincingly that kaizen is so much more than the common five-day blitz to improve a specific process. Kaizen -- real, lasting kaizen -- is about human development. It's about creating people who are better problem solvers, better thinkers, and more fully actualized human beings. To be sure, a company pursuing a kaizen culture will benefit financially, but that's just an ancillary (if welcome) benefit. Kaizen is a moral imperative for any organization -- and prerequisite for a lean organization.

The book offers plenty of theory related to culture change, relying upon both lean luminaries and the usual array of business thinkers (John Kotter, Edgar Schein, Jeffrey Pfeffer, Jeff Liker, Masaaki Imai, et al). The case studies are wide-ranging and persuasive -- they beautifully illustrate the point that creating a sustainable kaizen culture is about simple practices, done repeatedly, with conviction.

If we are indeed finally leaving what Jim Womack called the "tool age" of lean, you can do no better than to read this book.

December 2013 Newsletter -- Is Your Brand Strong Enough to Survive This?

If the future of retail is indeed “omni-channel,” I think these photos speak volumes. Consumers want to be able to shop for the brands and products that they want, when they want it, and where they happen to be at that moment. Which makes ordinary retailers less important than the products that they carry. . . . Download PDF to read the full article

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 Paradox: that 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."

Focus on value, not deliverables.

If you missed it, check out the recent HBR article, "Six Drucker Questions That Simplify a Complex Age." Here they are:

1. What does the customer value?
2. What is our business, and what should it be?
3. What is the task?
4. What are your ideas for us to try to do new things, develop new products, design new ways of reaching the market?
5. Who in this organization depends on me for what information?
6. What would happen if this were not done at all?

The author suggests asking the first two from the standpoint of your overall organization, asking those who work for you the second two, and asking yourself the final two.

It's more than a little presumptuous of me to use Drucker to reference one of my blog posts or my book, but these six questions force you to do precisely what I've advocated before: focus on value, not on deliverables.

All too often our personal expectations or our organizational metrics push us in the opposite direction. How many hours did the person work today? What does the latest PowerPoint presentation look like? How many calls did the customer service rep handle last hour? None of these measurements capture the value that the person creates in the eyes of the (internal or external) customer, because they're concerned with a measurable deliverable.

First, think about value.

Maintaining inefficiency is a good thing? Seriously?

Leave it to the professors at Harvard Business School to demonstrate a complete lack of lean thinking. A recent HBS Working Paper points out that increasing ordering capacity of the ultrasound service in a hospital led to longer wait times for that service. It turns out that the increased capacity led physicians to order more ultrasounds.

This type of finding isn’t new – transportation experts have known for a long time that building more road capacity doesn’t ease traffic congestion. The extra road room encourages more people to drive, with the result that the new, wider roads have just as much gridlock as before.

What’s so utterly disappointing, however, is the authors’ recommendation: retain the inefficient step in the process in order to discourage physicians from ordering ultrasounds. They write:

to improve hospital performance it could be optimal to put into place "inefficiencies" to become more efficient.

The authors have correctly recognized that given the opportunity, doctors will order more tests. But their solution of keeping inefficiencies in the system is as absurd as saying that we should make cars less stable in order to keep people driving within the speed limit. Or that we should have smaller freezers so that we can’t keep as much ice cream in the house and get fat.

The right recommendation – the lean recommendation – would maintain the local level efficiency improvement, while also including a structured problem solving initiative to reduce the number of unneeded ultrasounds. As Dr. Deming pointed out, the system in which people work drives the vast majority of their behaviors. The doctors aren’t simply ordering more ultrasounds because they can, irrespective of the benefit to the patient. They’re doing so because the system rewards that behavior.

You’d think that a Harvard Business School professor would know that.

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.

November 2013 Newsletter - Information is Better in Small Batches

Toyota has taught us that we get better quality and lower costs by building products in small lot sizes equal to demand (ideally, one piece flow). But it’s not just physical material that should be managed in one-piece flow. We benefit by managing information in small lot sizes as well. So say goodbye to the weekly/monthly status update meetings. . . . Download PDF to read the full article

How to make money from changeovers

Spangler Candy, the maker of Dum Dum lollipops, produces 10 million candies per day. The company keeps 16 flavors in the market at any given time, and each production line runs multiple flavors. Switching the production line from, say, Watermelon to Root Beer, means stopping the line, washing the machines, cleaning the hoses, and then running a small batch of the new flavor to prime the line for the next flavor. That's expensive.

I don't know if Spangler has any sort of lean program, and I don't know whether or not they've reduced changeover time as much as possible. But I do know that they've found a way to turn a mechanical necessity into an asset.

Enter the Mystery Flavor.

Beginning in 2001, the Spangler Company decided to just skip the cleaning. According to Mental Floss, “the Mystery Flavor pop is a mixture of two flavors that come together when the end of one batch of candy meets the beginning of the next batch. [. . .] The candy lines keep running continuously, and the Mystery Flavor pops are a surprise treat every time.”

Okay, this may not be the pinnacle of lean -- figuring out a way to eliminate the machine cleaning might be more of a lean ideal -- but in the meantime, the company has found a way to turn manufacturing limitations into value for customers.

Itchy fingers.

Bison Gear & Engineering, a designer and manufacturer of custom motors, reduced their new product development lead time from several weeks to three days by implementing lean concepts. One of their techniques is the "project blitz." They put a team of engineers together (literally -- they move their desks right next to each other), protect them from interruptions (they stretch police riot tape across the engineers' area so that no one can enter), and work exclusively on a single project until it's completed. Work flows from one engineer to another with no waiting and no distractions. They've realized, as I've written about before, that task switching is toxic to productivity.

Interestingly, Bison goes further than just protecting the team from external interruptions. The engineers also avoid self-generated distractions. Even when one of the team isn't actively working on the project at a given moment, she won't check email or surf the web while waiting for her next task. Experience has taught them that recovering from that type of distraction and getting back into the project flow slows down the blitz -- even though she's just waiting. Instead, she stays attentive to the work that the others are doing, remains more involved in the process, and is able to jump back in and contribute more quickly.

I asked their VP of Engineering about this prohibition on email. He said the emotional cost of this self-imposed disconnect was surprisingly high. People have an ingrained feeling that if they're not working, they're wasting time. Sitting idly at their desks and not -- at the very least -- clearing out their inboxes, felt profoundly unproductive. Even when it was clear that the project progressed faster when they worked this way, they still had itchy fingers.

To me, this is a beautiful example on a small scale of "going slow to go fast." If you can ignore the itchy fingers and the need to be busy every second of the day, you might find that your projects move faster, too.

Visual management is in the details

Creative visual management can be found in any environment -- and it doesn't cost anything. At the end of dinner last night, the waitress brought the check and carefully aligned it with the edge of the table. She said, "When you're ready to pay, just turn the check sideways [so that it's perpendicular to the table edge] and I'll know to pick it up.

My dinner companion and I could continue talking without the waitress hovering over us, and she could spend more time attending to other customers.

Simple. Elegant. The best visual management (and the best tools, in general) always are.

Architectural poka-yoke.

There are two buildings on the Pixar campus. Each one has only four bathrooms (two men’s, two women’s). All in the same place – the main hall of the building. No matter where you sit, if you want to pee, you have to get up from your desk, schlep down a long corridor to the staircase, down the stairs, and across the main hall to the bathroom. This layout is not an example of lousy architecture. This is by design. Steve Jobs's design.

Jobs recognized that functional silos are an unavoidable feature of large, complex organizations. He also recognized the danger in those silos—the lack of communication, the lack of cohesion, the development of an “us” and “them” mentality. The design of the buildings was one of his attempts to foster interaction and communication between departments. If you force everyone to come to the same place to go to the bathroom, they’ll see each other and talk with each other on a regular basis.

The Wall Street Journal’s recent article on the effects of moving people into different seats is testament to Jobs’ instincts. You can’t force people to think horizontally in terms of a value stream, but you can certainly help to blunt the silo mentality by forcing people to meet other people upstream and downstream. It's kind of like architectural poka-yoke -- error proofing through building design.

If your organization is growing, think about how the office is laid out and where people are physically sitting. Think about the silos that will be inevitably be created by location. What can you do to increase the level of interaction among departments?