Three Ways to Increase Value

If you’re overweight, your doctor will certainly advise you to go on a diet. But not only a diet—she’ll likely ask you to begin an exercise program as well. Calorie restriction may be useful in shedding a few pounds in the short term, but it’s not going to make you fitter in the long term. Companies in tough financial straits often resort to the equivalent of dieting: cutting expenses through layoffs. “Chainsaw” Al Dunlap is the poster child of this approach, unafraid to layoff thousands after he took the helms of underperforming companies. It brought him fame and wealth. . . until he went too far and drove Sunbeam into bankruptcy. Leaving aside the accounting scandals, the consensus opinion was that his layoffs eviscerated corporate muscle, not just fat, leaving the company unable to compete.

A better countermeasure for poor financial performance is to embark on the corporate equivalent of a fitness program: increasing strength, flexibility, and resilience by creating more value for your customers. At a children’s hospital in Texas, for example, the radiology department dealt with financial pressures by reducing the lead time to schedule an MRI appointment. Shorter lead times meant increased value for patients (not to mention happier parents!), and at the same time an additional $500K in annual revenue due to higher MRI utilization. Ruffwear, a maker of outdoor products for dogs, increased value to their European distributor (their customer) by shipping more frequently in smaller batches. The smaller shipments made it easier for the distributor to pay for products, reduced the number of season-end closeouts, and increased profits for both parties.

Here are three ways to begin thinking about increasing value:

Magnifying the product or service:

• Can you make something larger, bigger, or stronger? Think of free popcorn refills at theaters, oversized smartphones, or carbon fiber reinforced versions of a product.
• Can you increase its frequency? Think of airlines adding flights to a route, or FedEx offering delivery several times per day.
• Can you add extra features? Think of front- and rear-cameras on cell phones, freemium web services, or post-sale customer support and service.

Minimizing and eliminating (stripping away non-essentials)

• Can you remove elements without altering its function? Think of the BMW i3 interior lining, which is no longer an applied finish to the car body; the lining is the finish, or the holes put into the Mazda RX-8 gas pedal to make it lighter.
• Can you make it smaller or more compact? Think of the Nespresso Pixie machine designed for small urban apartments, or the new 10-denier fabrics for outdoor jackets.
• Can you make it faster? Think of wait time for medical procedures, or expedited passport services.

Repurposing (give it greater worth)

• Can you use it for something else can it be used for? Think of apps that allow your phone to act as a remote, Dermabond (basically Krazy Glue for closing surgical incisions), or plastic bottles turned into polyester fleece.
• Can it be used by children or old people? Think of wheeled luggage to relieve overburdened parents or people lacking physical strength.
• Can you use it in other markets or industries? Think of Microplane kitchen tools.

Sometimes economic realities necessitate budget cuts and layoffs. But that shouldn’t be the only, or even the first, approach to dealing with financial problems. You might find that looking at your products and services through the lenses of magnification, minimization, and repurposing will make it unnecessary to cut costs at all.

Six Questions for Managerial Improvement

Executives, managers, and supervisors often get caught up in the “busyness” of their days and fail to consider which activities are both truly necessary and value-adding to the organization and the customer. They’re typically so deeply immersed in the minutia of their jobs that they lose sight of the forest for the bark, much less the trees. Reflection (or hansei, or after-action-review) is a necessary step for improvement. It’s a critical part of Plan-Do-Study-Adjust cycle of learning, and you see it done after projects and during focused improvement work (particularly on the shop floor). But why not reflect more frequently, especially in the office? Why not turn everyday office work into an exercise in PDSA?

The cascade of six questions below is an easy way to step back and gain perspective on what you’re doing, whether you should be doing it at all, and how it could be improved. Taken together, they enable you to bring a PDSA mindset to your daily work, not just to large improvement projects. (Note that these questions can be used both by individuals as well as teams.

1. What did we do today?
   • (Connect activities and results.)

2. What did we accomplish today (e.g., design, make, sell, service)?
   • (Track progress, celebrate success, and establish the value of the team)

3. What obstacles got in our way today (e.g., materials, lack of information, miscommunication, repeated fires, etc.)?
   • (Start the conversation on where improvement is necessary and possible.)

4. What were the causes of these obstacles?
   • (Start the diagnostic process.)

5. What alternative approaches might remove, offset, or remediate these causes?
   • (Start the process of planning and testing improvement ideas.)

6. How are the alternative approaches progressing? Where are they succeeding? Where are they failing?
   • (Instill the discipline and mindset of reflection and analysis.)

Try it for two weeks. My hunch is that these will provide an easier on-ramp to continuous improvement than first diving into the rigorous details of, say, an A3 analysis, and will propel you towards a more efficient and effective day.

Charles Kettering Forgot About Fear

In researching and writing my next book (Building the Fit Organization, coming out in September!), I’ve been thinking a lot about what constitutes good leadership—or what I call “fit” leadership. Charles Kettering, the head of research at General Motors in the early 20^th century famously said that

The biggest job we have is to teach a newly hired employee how to fail intelligently. We have to train him to experiment over and over and to keep on trying and failing until he learns what will work.

That’s an admirable sentiment, and more recently it’s been echoed to the level of a platitude by the Silicon Valley mantra of “fail fast.” But before leaders can teach people how to fail intelligently, they have to drive the fear out of the organization so that employees are willing to experiment in the first place.

“Fear” is a strong word—so strong that I’d bet most leaders don’t think that fear runs through their organization. But W.E. Deming was right: careful reflection reveals anxiety—and yes, fear—that all the foosball tables, free massages, and Red Bull-stocked refrigerators can’t eliminate. Employees are afraid that new methods or technology will make their skills obsolete and threaten their jobs. They’re afraid that mistakes will be thrown in their face during the year-end performance evaluation. They’re afraid of having management criticize, ridicule, or ignore their suggestions. They’re afraid of being attacked for errors and failures, even if they’re committed in the service of improvement. They’re afraid of what’s known in the healthcare field as “name, blame, and shame.”

The first, and perhaps most important, step to driving out fear is a fundamental shift in attitude towards problems. Most leaders hate problems. They want their operations and their processes to run smoothly. They get frustrated when something goes wrong. They blame people. They try to find out who is responsible for the problem. By contrast—and at the risk of sounding hyperbolic—fit leaders love their problems. Problems are not things to be hidden. They’re not things to fear. They’re not even negative things—they’re improvement opportunities in disguise. A fit leader frames the problem as nothing more threatening than the gap between where the organization is today and where it wants to be tomorrow.

To that end, a fit leader tries to find out why a problem occurred, not who screwed up. (In fact, if someone did screw up, a fit leader asks why the system made it so easy for the person to screw up. The blame, such as it exists, is on the system, not the person. Why, not who.) When good leaders do blame people for a problem, they point the finger only at themselves.

Larry Barrett, VP of Operations at Sage Rods, exemplifies fit leadership. He views most problems as a signal that the leaders have erred. He tells this story:

One thing that we do now in our team meetings is to publicly recognize the responsibility that the leaders have. Especially when we are talking about an obstacle or an area where we’re not hitting our goals, I’ll make a point of calling out my responsibility. I encourage my other leaders to emulate this type of accountability and transparency. A common example is when we’re asking the team to work overtime. It’s hard to think of a scenario where this is not my fault as the leader, and I make sure that the team knows: (1) that I own this; (2) what I plan to do to fix it; and (3) how long it might take. We get better results with this style of communication.

That kind of self-imposed accountability drives out fear, and creates the kind of environment where people feel free to experiment. . . and fail.

What are you doing to drive out fear?

Proclamation, Observation, Participation

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.

Do You Start Training for a Marathon with a 20-Mile Run?

Do you start training for a marathon with a 20-mile run? Of course not. Do you go to the gym for the first time and try to bench-press 250 pounds? Not unless you want to get injured.

So why was your first kaizen event a 10-month slog towards some financial improvement goal that didn’t actually change much in your daily work life?

You see this all the time: a company decides to try lean. It hires external consultants, and tackles a sprawling, exceedingly complicated process for their first kaizen effort. After all, that’s how to sell it to the leadership team—by taking on a huge project with significant financial impact. Even assuming the project is successful, by the time it’s complete, the people involved are often burned out, they haven’t really understood and embraced lean, and the 90% of the people in the organization who weren’t involved in the project still have no idea what lean is. The overall problem solving skill of the organization is still pathetically low.

People intuitively understand that the pursuit of athletic fitness is a long process involving the slow but steady buildup of muscular strength, cardiovascular capacity, and flexibility. That’s why marathon training programs last five months. That’s why there are many different weights in the gym. We have to build up to our fitness goal.

Why don’t we treat lean transformations the same way? In my forthcoming book, Building the Fit Organization, I argue that the principles necessary for reaching physical fitness are the same principles needed for organizational “fitness.” One concept common to both is the need to start small, with manageable amounts of work. Consequently, you start training for a marathon with a two-mile run, not a 20-miler. You start a weight training program with light weights, so that you can learn the proper form and not hurt yourself.

But organizations that embark on a lean transformation often do the opposite. Before they’ve built up their problem solving muscles, before they’ve gotten employees to embrace the lean approach, they take on a complex project that requires advanced skills and full support. While that doesn’t doom them to failure, it certainly stacks the deck against them. Needlessly.

At a workshop I recently gave, one attendee said that the first project her group worked on took 15 months to complete. It was only moderately successful -- and more significantly, they haven't done one since. Another attendee said that his group started with small projects lasting a couple of days to a couple of weeks. In the past year and a half, they've done 30 projects, gotten nearly everyone involved, and generated widespread commitment and enthusiasm for lean. To be fair, none of those projects made huge differences in the company's bottom line, but they definitely developed people's problem solving capabilities, and set the stage for more significant improvements in the future.

Whether you're training for a marathon or embarking on an organizational transformation -- which approach do you think will get you to your goal faster?

Where's Martin Luther When You Need Him?

Latin was the language of the Catholic Church for over 1000 years. Conducting the mass and printing the bible in Latin, a language that the laity didn’t understand, required a priest to act as an intermediary between god and man. It took Martin Luther, the Protestant Reformation, and Vatican II to bring the language of religion into the vernacular.

The lean community is in a similar position of the church prior to Luther. The literature is filled with Japanese terms (gemba, kanban, heijunka), English jargon that doesn’t mean what you think (water spider, shine, autonomation), and abbreviations and acronyms (A3, 5S, 3P) that are impenetrable to newcomers. If you’re a member of the Lean Six Sigma community, there are even official vestments in the form of colored belts. This makes little sense: If we’re asking people to think, act, and work differently from they way they’re currently doing, why make the task harder by erecting linguistic barriers? Why not express the core principles in people’s native language.

Some will argue that there are subtleties that are lost when we translate the original Japanese into another language. Others will argue that it doesn’t make sense to translate a single foreign word that perfectly captures an idea into a longer English phrase (think schadenfreude, déjà vu, or sushi). While that may be true in some cases, the vast majority of words used in the lean community aren’t so specialized and nuanced that they can’t be adequately translated.

Quality Bike Parts (QBP), a distributor of bike parts and accessories in Minnesota, has fully embraced the ethos of continuous improvement. However, not only do they avoid using Japanese words and jargon, they’ve translated the concepts into relevant English. The entire program, for example, is called the GRIP Program—“great results from improved processes”—which connects nicely to the products they sell. And rather than use the terms kaizen (small improvements) and kaikaku (large, revolutionary improvements), they simply have “big GRIPs” and “little GRIPs.” They don’t talk about muda (waste); they send new employees into the company dumpster to see what’s thrown out and to consider how they can reduce the amount of wasted material. Not surprisingly, employees at QBP readily accept the discipline of continuous improvement, without the typical resistance so many companies face: “We’re not Toyota. We don’t make cars. Lean won’t work here.”

Translating the Mass into the vernacular made Church teachings accessible to the masses. Blind obedience and total reliance on the priest was replaced by a deeper and more thoughtful understanding of religious teachings. And although it removed the priest from his position as intermediary between god and people, the change didn’t make the priest irrelevant. In fact, I would argue that it put the priest in a better position to help teach, guide, and support his congregants. Authority is most powerful when it comes from knowledge, skill, and a deep-seated commitment to serving others, not from ownership of a specialized vocabulary or a colored belt. And motivation to change is stronger when people can readily grasp the fundamental ideas without struggling over the words.

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.

For the Last Time: Cost Cutting Isn’t “Lean”

The headline in the Wall Street Journal last week was utterly predictable: “Kraft Deal Fueled by Lean Recipe.” It was only a matter of time after Heinz’s acquisition of Kraft that the business press would refer, once gain, to 3G Capital Partners’ use of zero-based budgeting as something “lean.” This approach, which requires managers to justify spending plans from scratch every year rather than simply modifying the previous year’s budget, is many things, but it is certainly not lean.

Yes, lean organizations relentlessly seek to lower costs. And yes, lean organizations constantly strive to eliminate wasteful expenditures of cash. But the layoffs that accompany zero-based budgeting are most certainly not lean. Neither is the infantilizing, management-directed, and disrespectful (to employees) cost cutting that the Wall Street Journal describes:

After chicken processor Pilgrim’s Pride Corp. adopted it a few years ago, it scrutinized how much paper it used to print documents, how much soap employees used to wash their hands, and how much Gatorade hourly employees at one processing facility drank during breaks.

In my new book about continuous improvement (still untitled, but coming out this September), I draw a parallel between individual physical fitness and organizational “fitness.” You can’t get physically fit simply by dieting—sure, you can lose weight, but that doesn’t make you healthy and strong. Similarly, you can’t get organizationally fit simply by cutting costs. Laying off people and prohibiting color copies doesn’t make a company nimble and competitive. It may boost the share price and profitability in the short term, but it can’t develop the organization’s competitive powers for the long term.

Competitive strength comes from the development of employee problem-solving capabilities and the improvement of operational processes. Zero-based budgeting doesn’t do that. Want to reduce the amount of Gatorade people drink? Teach employees how to attack the “problem” of excessive Gatorade consumption at its root cause, which might very well lead to improvements in ventilation, plant layout, and workflow—and along the way, truly significant cost reductions. Want to cut down on soap consumption (which, honestly, doesn’t seem like a great idea in a poultry processing plant)? Challenge employees to redesign the process in a way to reduce the amount of direct poultry handling. At the very least, having employees figure out how to take costs out of a system is far more respectful of their intelligence and creativity, and far less dispiriting than simply dictating a 30% cut in their Gatorade allowance.

There’s plenty of research proving that cost reduction isn’t sustained in the long run. Just like weight always comes back after drastic dieting, costs always creep back two to three years after drastic cuts, because the underlying processes and capabilities haven’t been improved. As soon as the financial crisis fades, people start buying more Gatorade and making color copies.

Look, I fully support the elimination of excessive corporate privilege. I cringe at the thought of executives flying first class on the company dime while front-line workers fly coach. I can’t stand swanky corporate offices with Persian rugs and fireplaces that serve only to gratify egos and create unnecessary distinctions within an organization. But skinny and starved isn’t healthy and fit, and cost cutting isn’t lean.

What you can learn from Marie Kondo

The Life-Changing Mindset of Tidying Up by Marie Kondo has sold 2 million copies worldwide. It’s the top seller in the New York Times “advice and how-to” category. It’s the number one seller overall on Amazon right now. 5S for Operators by Hiroyuki Hirano, who in many ways is the father of 5S, ranks number 129,268 in books on Amazon. Ron Taylor’s 5S: Workplace Organization and Process Design Using Lean 5S checks in at number 87,584. Ade Asefeso’s 5S for Supervisors is at 550,900. 5S for Healthcare by the well-respected Tom Jackson is at 377,661. Brice Alvord’s Planning & Implementing 5S comes in at 937,654. I don’t know exactly how many copies of these books have been sold, but I’m pretty confident that their total combined sales over the past 19 years (when Hirano’s book came out) are nowhere near the 338,000 copies of Tidying Up sold in the U.S.—since October.

Okay, this isn’t a fair comparison: Kondo’s book is for the mass market, while these 5S books are targeted primarily at manufacturing organizations. But there’s a deeper truth operating as well. Kondo writes in the language of ordinary people. She doesn’t force readers to adopt new jargon or even a foreign language. She tells readers to look at their closets and answer one simple question: “Does it spark joy?” If yes, keep it and treat it with respect. If not, toss it out.

Now, think about 5S. The concept is basically the same as the one Kondo advocates. (Sure, there are differences, but many of the fundamentals are similar.) But instead of presenting the overarching concept in easily grasped language, the lean community uses the meaningless shorthand “5S.” We tell people that they must follow each “s” in the proper sequence. We translate the original Japanese into words like “shine,” which actually doesn’t mean shine in the way any English speaker would expect.

Kondo asks people if the stuff in their houses sparks joy. We ask people to distinguish between “set in order” and “straighten.” Is it any wonder that it’s so hard to get workers to accept (much less embrace) 5S?

Shame on us for making such an important concept so off-putting.

As you may know, I just finished writing my second book. (It’s still untitled, but McGraw-Hill will be publishing it in September.) One of my goals was to take the Japanese, take the jargon, and take the Toyota out of lean. I wanted to tell a story about continuous improvement unencrusted by the barnacles of traditional lean vocabulary that can be so alienating to newcomers. I’m pretty sure that the book won’t reach the heights of Tidying Up, but I hope at least that it helps you think about making improvement tools and concepts more accessible for your organization.

Take a lesson from Kondo. She’s inspired rabid groupies committed to her vision of cleaning the crap out of their houses. You can too.

What event are you training for?

Managerial Takt Time

"Takt time" is part of the gospel handed down by Jim Womack and Dan Jones in their seminal book, Lean Thinking. Despite the awkwardness of the German word from which it derives (taktzeit), it's a very simple concept: it's the average unit production time needed to meet customer demand. The goal of takt time is to link your company's value-added work to the customer's needs.

But what if you're an executive or a manager without direct production responsibility, and without a clearly defined customer demand? How do you calculate takt time for a leader in this circumstance?

In the new book I'm writing, I suggest that a useful way to think about takt time for a leader is to compare it to the schedule for someone training for a specific event -- say, a marathon. The training schedule links the workouts to the goal, ensuring that training is done so that the runner peaks at the right time. The training schedule also ensures that the runner invests an appropriate amount of time in the different types of training needed for success: aerobic running, anaerobic running, cross-training, flexibility, etc.

If you're a leader, you need to link your daily/weekly/monthly activities to the strategic goals you've set. You can do that by allocating your time to the critical areas that will get you there: improvement, talking to customers, coaching & training your team, strategic planning and thinking, etc. Steve Ballmer, former CEO of Microsoft, provides a good example of this kind of thinking:

I budget how much time I’m going to be out of Seattle and in Seattle. I budget what I’m spending my time on — customers, partners, etc…. I schedule formal meetings and my free time…. I’m not saying when they’re going to happen, but I budget all this stuff. I try to make sure that I feel comfortable that I have enough time to…think, to investigate, to learn more, but I have to budget my time…. I give the budget allocation to my administrative assistants, they lay it all out and then anybody who asks for time, they say, "Steve, this is in budget, it’s not in budget, how do you want us to handle it?"

I know very few executives that determine their calendars to this extent. When you think about it from the perspective of an athlete, however, it makes perfect sense. How can you decide whether or not to take on a new commitment or spend time on a new project if you don't know what else you're supposed to be spending time on? How can you be sure that your overall efforts are appropriately linked to your larger goals unless you have a master plan?

You've got 2000 hours per year. How are you going to spend them?

The Training Triangle

Training Triangle

Effective training/coaching in the workplace or the athletic arena rests on three legs.

Show respect: There may be some abusive coaches around these days, but by and large, the best coaches and personal trainers possess a deep and abiding respect for their players or clients. A trainer who disdains his overweight clients will very soon be looking for a new line of work. In the office or on the shop floor, a condescending supervisor will quickly lose the respect and support of her team. Respecting people's ability to grow, and honoring their desire to do a good job, is essential to effective training.

Go and See: Straight from the lean playbook, you have to see with your own eyes what's happening. Is an athlete suffering from repetitive injuries, or continually failing to perform an exercise properly? The only way to diagnose the root cause is to see with your own eyes what the athlete is doing. Are there repetitive order entry errors, or continual problems getting your marketing materials ready on time? You've got to watch the process, and the workers in the process, with your own eyes to help them do it correctly.

Participate: The best personal trainers don't just phone in the workout -- they model the exercises and participate in the activities they're prescribing for their clients. The great coaches are there on the court or on the field with their athletes. Similarly, the best leaders participate in their own improvement work. That's not to say that the leader has to clean the office floor everyday with his team (although the president of one $100M electronics company does), but the great leaders engage people's hearts and minds both by engaging in their own improvement work, and by getting involved in what their teams are doing. It's not enough to "support" what people are doing -- leaders have to actively participate.

Why Visual Management Matters

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Bringing an organization, or even just a functional process within that organization, to higher levels of performance is a challenge. Workers often don’t know how well (or poorly) they’re functioning—if it’s always taken 7 days to close the monthly books, or 15 months to get through the product development cycle, then it’s just business as usual. Or people can’t see the problems their work creates for colleagues working downstream. Or there’s a deep-seated “us vs. them” feeling: “We do our jobs well in marketing, but it’s those guys in sales that create all the problems.” Or people can’t even agree on what the actual problems are. Or they just don’t care. That’s why visual management is so important. When people can see the processes in which they work with a value stream map (sorry, Pete Abilla), and when they can monitor and measure that process with visual controls, the obstacles to improvement are much easier to overcome. Rendering the current condition visible in a map and/or a dashboard externalizes it, so that we can examine it together, from the same perspective. As Michael Ballé writes in Lead With Respect, “we see together, so we know together, so we can act together.”

Visibility enables you to transcend the resistance to change that comes from differing perspectives, and harness your team’s innate creativity to create a better future.

Cadillac's NYC Boondoggle.

Last week's news about Cadillac's management relocating to New York got me in the mood to steal one of Kevin Meyer's old tricks from his Evolving Excellence days: calling out corporate stupidity when I see it. In case you missed it, the leadership at Cadillac announced that it will be moving its headquarters to NYC, in order to better understand the needs of the luxury customer:

[Cadillac President Johan] De Nysschen said being in New York, which he called the epicenter for global trends, will allow the team to build a focus solely on the brand and to better understand the "sophisticated lifestyle" of Cadillac's target customer base.

I can understand the desire to have marketing and design people spend a lot of time in New York rather than Detroit -- although it's worth pointing out that in the US, BMW and Mercedes are both based in New Jersey, which is not exactly known for being a hotspot of global trends. It's also worth noting that the heart of American car culture is in California, and as a result, many car companies have their design centers in the Los Angeles area.

Of course, the truth is that you can understand your customers' lifestyle pretty damn well even without opening up a fancy showroom in SoHo. Toyota's Yuji Yokoya, chief engineer for the Sienna minivan, drove 53,000 miles around the U.S. to understand what American drivers needed in a minivan. (The minivan was not sold in Japan at the time, so Toyota's headquarters in Nagoya were much farther away from the target market than Detroit is from New York.) The Sienna received rave reviews and was a huge success.

What's more worrisome about Cadillac's move is the possibility that the company will send more functions than just marketing to New York:

GM is studying whether to send Cadillac's product planning and finance functions to New York, or to keep those in Detroit. Design, research and development and other technical aspects will remain based in southeast Michigan, de Nysschen said.

This dispersal of critical functions is a recipe for failure -- for missed handoffs, for botched communications, for rework in all phases of product development. Most companies, even well-functioning ones, have a hard enough time avoiding these snafus when people are working on the same floor, much less the same building. But separated by 600 miles? Good luck. And needless to say, GM isn't exactly an exemplar of efficient and effective communications.

My guess is that within 12-18 months Cadillac will abandon this project, citing absurd expenses in New York city, unanticipated project costs and errors in new product development, and a lack of sales growth.

You read it here first.

Reversing the vector of accountability

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One of the most unappreciated benefits of leader standard work is the powerful way in which it reverses the “vector of accountability.”

When we talk about accountability in an organization, typically we refer to the way in which lower level staff is accountable to executives (or managers, or supervisors) for certain actions. Workers must be held accountable if we want to execute and perform well. In this view, the vector of accountability always points upwards, from the front lines to leadership.

This is where leader standard work comes in. When a CEO makes a commitment to visit the shop floor (or the marketing department, or the warehouse) each day and learn what her people are doing and what obstacles they face, she’s now accountable to her team for performance. When a VP creates standard work obligating him to participate in 5S activities once per month, he’s making a promise to his team that he must fulfill or risk compromising his leadership credentials. The vector of accountability flips: the leader is now accountable to the team.

The psychological implications of this reversal are profound. Any organization comprises a web of human relationships, and for those relationships to be healthy and successful, there must be some degree of symmetry. Demanding that lower level staff be accountable to leaders without a corresponding accountability of leaders to lower level staff is a recipe for unhealthy, weak relationships. Reversing the vector of accountability brings balance to the interpersonal relationships in an organization. It’s a concrete way of leading with humility, of being a servant leader.

To implement this idea, post your standard work in the open, visible to the entire company. Create a simple check sheet for the activities that shows what you’ll do and when, and bring it with you when you do that standard work. Then—and this is key—your team checks the boxes to show that you did, in fact, fulfill your commitment. They validate your standard work. Lastly, post the filled in check sheet where everyone can see it.

Try it. It’s one more way to show respect for people. You’ll be amazed at the transformation in your relationships with your team.

Bridging the Divide

NPR's Marketplace interviewed me the other day about the Congressional schedule that has lawmakers in Washington D.C. only three days per week. I was asked how a process improvement expert would improve the gridlock that afflicts our legislative process. I replied that if I were running a business that had two factions — whether it’s the east coast and the west coast offices, or the sales and the engineering teams — if I were trying to bridge a divide like the one in Congress, face-to-face time is absolutely essential. The lack of face time and direct contact is particularly visible in Congress. I mean, the place is a ghost town on Mondays and Fridays when representatives are back home in their districts. But you'd be surprised at how little the teams in your company interact. People sit in their own areas, get caught up in their own work, and plan their days around their departmental meetings. It takes an enormous effort to walk from customer service to product development, even when the distance can be measured in yards. Unless your company is organized by value stream, the distance might as well be measured in light years.

Face to face contact is critical in understanding how work is done by people upstream and downstream from you. When you see the work being done, you can understand the cause of problems and waste. Equally important, regular contact between groups builds the human bonds of trust that are essential to successful change. That trust, of course, is what's sadly lacking in Congress today.

Given that your company is most likely organized by functional silo, what can you do to improve the situation? Certainly company-wide events are a good start, but because they're not focused, they're insufficient. Far better to actually schedule time for people to "walk the value stream." Have the sales people walk from customer service, to credit, to the distribution center (if it's local) to see how orders are entered, approved, and shipped. Or have the product developers walk from IT to marketing services to see how catalogs and price lists are produced. Seeing the process, really seeing what people downstream do in order to get their jobs done, is eye-opening. It also demonstrates real respect for what other people do.

Give it a try. You might be surprised at what you learn.

Two Prerequisites for Process Improvement

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I've been talking to a few companies recently about their struggles to improve their product development processes. I realized that they were missing the two prerequisites for improvement: process clarity and process stability.

If you don't have clarity, improvement efforts will simply be reinventing the wheel. If you don't have stability (or predictability), then you're sailing without a compass.

First make the process visible. Then make sure it's followed. Now you can move forward.

Case Study -- Specialty Food Company

Situation: A rapidly growing, $300M specialty food company was outgrowing its sourcing and quality control processes. Due to the increased number of suppliers and the proliferation of internal staff, product development lead times skyrocketed, and the process of qualifying a single ingredient had lengthened to 260 days. Intervention: We created a metrics-based process map for the entire qualification process, identifying bottlenecks, common sources of errors, missing triggers, and other issues that created delays and rework. We then created sub-teams to address the most critical factors. The teams developed countermeasures, gained consensus for the changes, and trained staff on the new procedures.

Resolution: Lead time for ingredient qualification was reduced by 50% -- from 260 to 130 days.

Make your meetings more effective with 3Ps

Three things in life are inevitable: death, taxes, and the inability of organizations to conduct meetings that aren’t a soul-sucking waste of time. You’d think it wouldn’t be that hard to have productive meetings—after all, Robert’s Rules of Order have been around since 1876, and legions of intelligent business consultants have written extensively on the topic. Yet survey employees in any organization about their meeting effectiveness, and you’ll be met with groans, eye rolls, and complaints about how low-value added they are. An easier approach to making meetings effective and productive is to follow the 3P Principle: ensure that you have the Purpose, People, and Process right.

Effective Meetings

Purpose: A clearly defined purpose for the meeting is essential. Purpose is not a topic or a subject; it’s a clear description of the desired outcome of the meeting. It’s a goal that everyone is driving towards. Purpose is often, but not always, a decision—whether or note to open a new office, or to delay the introduction of a new product. But purpose could be brainstorming (to generate 15 new brand names), or gathering information (to get the sales team’s perspective on the new bicycle frame material), or to ensure that everyone understands a strategic shift in direction (we’re abandoning the low-end of the market, and here’s why). Having a clear purpose focuses the discussion, keeps the meeting from wandering, and increases the likelihood that you’ll get there.

People: Are you sure you have the right people in the room? Meetings often deteriorate into irrelevance because the right people aren’t there. This isn’t news, of course, but it’s surprising how infrequently people take the time to figure out who should attend. Job responsibilities change without formal notification, and the person nominally handling a function may no longer be doing it. Moreover, even if you have the right person in the meeting, she might want a specialist from her group to join her so that she can offer better opinions. Therefore, in order to get the right people in the meeting, you need to talk to the participants in advance, explain the meeting’s purpose, and find out from them who the right people are for that purpose. Organizing and conducting a meeting is a team sport—you can’t do it alone.

Process: Is a meeting the right process to accomplish your purpose? Although meetings are a near-Pavlovian alternative to other forms of communication, it’s a good idea to first ask whether you actually need a meeting. Status updates don’t require people to be in the same room at the same time, and can be handled more effectively with asynchronous communication like email, memos, Sharepoint documents, internal Wikis, etc. Moreover, even when a meeting is the appropriate process for your goal, you need to examine the preparation for the meeting. For example, you can’t expect management to sign off on a major capital expense or a significant engineering change in a single meeting: you need to engage in the process of nemawashi (consensus-building) in advance to ensure that the meeting will be effective. Advance one-on-one conversations with key people provide the context for the request, enable you to understand potential objections, and ensure that you can present all the necessary information to enable participants to make a decision.

Time is the most valuable resource individuals have. Time that many people can spend together is even more precious and difficult to schedule. It’s incumbent upon us to use that resource as wisely as possible. If you can get the Purpose, People, and Process right for your meetings, you will make it more likely that the limited time you have together isn’t a waste of time.

Real cooks practice 5S (and lean)

The lean blogosphere today has been atwitter with references to this morning's NPR story on organizing your life like a chef. It's a terrific story, and well worth the listen if kaizen is important to you, personally or professionally. Placing tools correctly, keeping things in order, creating standard work -- all of these ideas are embedded in what chefs call mise-en-place. When I was writing A Factory of One three years ago, my editor, Tom Ehrenfeld, pointed me to a terrific explanation of mise-en-place in Anthony Bourdain's book, Kitchen Confidential. In my view, mise-en-place is a perfect illustration of 5S done right.

Here's what I wrote in my book:

If you’ve never been to a restaurant kitchen, you’d be amazed at the contrast with the “front of the house” where you dine. It’s crazy back there, particularly during the lunch and dinner rushes. People are shouting and cursing, waiters, cooks, and “runners” are rushing through the kitchen trying to get orders out the door—it’s barely controlled chaos.

Except for one spot. The cook’s mise-en-place, the area where she organizes and arranges the ingredients she’ll be using that night. Chef and author Anthony Bourdain explains the importance of mise-en-place in Kitchen Confidential:

Mise-en-place is the religion of all good line cooks. Do not f**k with a line cook’s “meez”—meaning their set-up, their carefully arranged supplies of sea salt, rough-cracked pepper, softened butter, cooking oil, wine, back-ups and so on. As a cook, your station, and its condition, its state of readiness, is an extension of your nervous system—and it is profoundly upsetting if another cook or, God forbid, a waiter—disturbs your precisely and carefully laid-out system. The universe is in order when your station is set up the way you like it: you know where to find everything with your eyes closed, everything you need during the course of the shift is at the ready at arm’s reach, your defenses are deployed. If you let your mise-en-place run down, get dirty and disorganized, you’ll quickly find yourself spinning in place and calling for back-up. I worked with a chef who used to step behind the line to a dirty cook’s station in the middle of the rush to explain why the offending cook was falling behind. He’d press his palm down on the cutting board, which was littered with peppercorns, spattered sauce, bits of parsley, breadcrumbs and the usual flotsam and jetsam that accumulates quickly on a station if not constantly wiped away with a moist side-towel. “You see this” he’d inquire, raising his palm so that the cook could see the bits of dirt and scraps sticking to his chef’s palm, “That’s what the inside of your head looks like now. Work clean!”

Want to know what 5S is, without resorting to all those difficult-to-pronounce Japanese words? It’s mise-en-place. (Of course, we’ve just substituted French for Japanese, so there may not be any advantage for you.) It’s your physical workspace and your information precisely laid out so that you can find anything with your eyes closed. It’s the clean well-ordered inside of your head so that you can stay on top of all the work your boss, colleagues, and customers are dumping on you. . . . Quite frankly, if a line cook during the dinner rush can keep his workspace organized, so can you.

If you think about 5S in this light, and see the connection to the way you manage your work and your time, you can avoid turning 5S into a L.A.M.E. exercise.

Two dimensions for process improvement

Lean Mentality & Diffusion-3

There are two essential dimensions you need to consider when building a culture of continuous improvement: Diffusion and Mentality. Centralized responsibility/Cost savings mentality: This quadrant is the realm of "Chainsaw" Al Dunlop. The focus is on cutting costs, and decisions reside with one person -- usually the CEO or CFO. The result is a culture of fear, demotivated employees, and ultimately a weaker long-term strategic position.

Centralized responsibility/Value creating mentality: This is a better quadrant in which to live, but progress is slow because the "lean team" (or kaizen promotion office, or HR, or whatever) becomes the sole repository of improvement knowledge. Even worse, everyone else in the firm abdicates responsibility for improvement, passively waiting for the lean team to come to the rescue. Which might not happen for two years.

Diffused responsibility/Cost savings mentality: This is where many companies pursuing improvement find themselves. The good news: in this quadrant, you're getting everyone engaged rather than relying on an internal team of experts. The bad news is that with a focus on reducing costs, you'll have diminishing marginal returns (there's a limit to how much cost/waste you can take out of any system). Eventually you'll start to lose ground and end up only slightly better than where you started.

Diffused responsibility/Value creating mentality:Clearly, the place you want to be. (You can tell because it's green.) In this quadrant, everyone is engaged in improvement, and people are thinking about how to increase the value they provide to their customers -- internal or external. As a result, you see breakthroughs in lead times across the organization; innovations in product or service delivery; better customer service -- and lower costs. People are engaged and creative, because they're using their imaginations for lateral thinking, not just cutting and cost reduction.