Tag Archives: Lean Transformation

Change Management

Who wants to change?  Nobody, really.  Change is threatening.  Change is difficult.  We tend to get comfortable with the status quo – “go with the flow”.  Trim the sails a little, perhaps, to accommodate slight change in prevailing winds and business currents.  Corporate leaders have built the organization in their image – so far they have been successful.  It takes a lot of self awareness to envision a better future and lead the march into uncharted territory.  Even if they knew they needed to make a major change, who do they trust?  How do they do it?  Middle management, from Directors down to Supervisors and Team Leads, have the most to gain from lean efforts yet also have the most to lose.  It is likely they got their position by being really good at making things work in the current system.  They’ve customized it and tricked it out so they know what buttons to push and where all the bones are buried.  They answer all the questions, but with varying amounts of certainty, and have everything to lose when we talk about giving a voice to the operators or front line workers.  Production associates, office workers and those who do the everyday work that adds value are almost universally suspicious of change – with reason.  They know things can improve, but know from experience in the first downturn or “improvement in efficiency” their livelihood is threatened.

Change Model

Change models break down the change process into clear steps to help change agents enable the transition.  Well known among them is ADKAR model, created by Prosci founder Jeff Hiatt.  It is easy to understand and use, so I will walk you through it:

  • Awareness – know the change is necessary and on its way.  This is the What.
  • Desire –  feel the change holds something good for the organization and for us as individuals. This is the Why.
  • Knowledge – the tool set for change.  Knowing the tools with some context in their use.  Lean and Six Sigma tools with an emphasis on problem solving.  Also awareness of organizational issues affecting the change process.  Those with knowledge help shape the Who, Where, and When.
  • Ability – knowing which tools to use in what circumstances, and how to apply them effectively.  This becomes better and better as our problem solving muscle memory improves.  Knowledge + Ability = How
  • Reinforcement – New cultures and behaviors must be adopted, along with metrics to ensure the change is both effective and sustained.  Without Reinforcement, there is no sustained change.  New habits generally take 20 repetitions to stick.  New culture takes far more.

Oftentimes people are aware of the need for change, but are not comfortable with it so they convince themselves the change is unnecessary, burying their heads in sand.  This anxiety, knowing but not wanting to know, creates stress throughout the organization and wears and tears all levels.  This is where Leaders need to be out front, selling the change and reducing the fear of it.  Suspicion may be high, especially if the proposed change may have been sold before but did not stick.

Desire is achieved by connecting awareness of the need for change with something good that will come of it.  It makes us realize why we need to change, and whets our appetite for the impending change, lowering resistance and fear associated with both the change process and the change itself.  It is important to instill desire in ALL levels of the organization.  Each level of the organization must see the positive effects of the change, even if the only positive is the plant’s survival.  Senior management is usually a well known entity and a small enough group that those most resistant to change are easily identifiable and can be addressed individually, either by educating them or marginalizing them.  Middle management will often be split on any major change.  Some will become early adopters, even evangelical, of the change.  Others will resist and spread negativity.  Many of these are formal as well as informal leaders, so every effort should be made to meet this group and get them on board.  The fervent resistors will have to be asked to move on or will forever be eroding change efforts.  Front line associates may be wary, but are generally reasonable and adaptable to changing circumstances.  Harley Davidson confronted its union in York, Pennsylvania plant with a choice:  either we change how we operate and lay off half of the workforce, or the plant will close and move out of state.  The union chose to lose half their members to make it work, and the plant flourished.  Usually the change is not that drastic, but it can be done effectively.

Knowledge is the tool set for change.  Just how are we going to effect this change?  How will we operate?  Many of the tools are basic blocking and tackling:  learning the four drives of Lean (workplace organization, uninterrupted flow, quality at the source, and single minute exchange of die).  Other tools include problem solving (basic and advanced using Six Sigma tools), business literacy, leadership (communication, human resource skills), and risk management.

Knowledge alone will not affect change.  Knowledge needs to be put into practice in order to build your Ability to drive change.  This ability grows with practice implementing the knowledge.  Early attempts will likely struggle, so early kaizen attempts should be easy to win (focus on Workplace Organization at first).  Focus your efforts on a few key areas and seek to make lasting improvements (see section above).  Part of your selection should be based on personnel – managers and supervisors who are early adopters should be in your initial target areas.  As people find their voice with early victories, more difficult issues can be addressed.

Reinforcement, both positive and negative, is the key to sustaining change.  The simplest tools of reinforcement include a visible and visual KPI metric system reviewed daily along with visible problem solving efforts. Seek Lead Measures for goals and strive to improve on those metrics.  Lead Measures foretell the result:  they are both Predictive (measure something that leads to the goal) and Influenceable (something we can influence).   Some examples of predictive goals include the number of sales calls required to get a request for bid, or the number of safety “near misses” before an accident happens.  Go after high sales calls and bid requests will follow:  elevate management of “near misses” to identify and reduce safety hazards, and thus accidents.  Just as “near misses” foretell accidents, quality and or delivery problems will foretell costs:  focus on quality and your costs will decrease just as deliveries increase.  Repeated selling of successes and a focus on problem solving by all levels of management will reinforce the change and make it stick.

What to Change

“It’s easy to decide what you’re going to do. The hard thing is deciding what you’re not going to do.”  – Michael Dell

Once you have a vision of change and are convinced change is in order it is very tempting to launch 1,000 ships to make it happen post haste.  Be careful with your limited resources – many of those ships will run aground.  Others will be lost, never to be heard from again.  A few ships will find a welcoming port and start some islands of excellence, but the disjointed effort will be easily unhinged, or at best be very difficult to sustain.  It is much better to plan carefully and roll out the change in a strategic manner.

One strategic maxim is concentration of force:  Focus.  A planned, concentrated effort is more likely to yield positive results than a general blast.  McChesney, Covey, and Huling, in their book The 4 Disciplines of Execution maintain that an excessive number of goals (more than 3) lead to dilution of effort and lower achievement levels.  The key to success is to carefully select a very few goals identify and focus on what activities drive that goal (rather than focus on the goal itself).   So review your proposed changes and develop a logical sequence for moves towards the desired end.  Put in lean terms, start with a good map of your current state, develop a future state, and a series of kaizen events to get you where you want to go.

Planning for Change

“Everyone has a plan until you get hit in the face” – Mike Tyson  

Many have written that a lean journey is like driving across the country at night.  Our headlights give us a limited view, but we basically know where we are going and we have a map.  I like to think of a lean journey, especially if it is a major transformation, as sailing to a distant island.  Even with the most sophisticated navigational equipment, we have to deal with currents and the weather.  Sailing requires constant attention to detail and trimming sails to stay on course.  Sometimes the winds are favorable and the sailing is smooth.  Other times we are in a tremendous storm – wet, nasty, and a little scary.  Nevertheless if we trust our ship and our captain, we can take heart and sail onward, all the while wearing our life jackets.  And some of the sights and experiences we take in along the way are fantastic – they are life affirming.

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The act of drawing a Value Stream Map (VSM) lays bare the current state and prompts valuable discussions of possible future states.  Included in the mapping process is the developing of appropriate metrics, including market rate (takt time), current process times, and the development of standards through time studies.  The VSM and time studies become the center of debate and teaching, both learning to see current operations more clearly and evaluating future opportunities.  One powerful effect of mapping any process is that it can be viewed objectively – it is no longer “your process” or “my process” but rather, THE process.  That prompts objective discussions and keeps personalities out of the discussion.  This then becomes the basis of planning and the transition to the future state.  Keep your maps posted on walls as both a reference and a teaching tool.

Baby Steps:  Toyota Kata

Mike Rother’s landmark book Toyota Kata codified Toyota’s change management system as one of baby steps, always moving from current condition towards a desired target condition, analogous to stepping up a staircase.  At each step (or “landing”) processes are controlled and stabilized in preparation for the next step, cementing the gains.  Some attempts at change fail – if so we can always go back one step and resume our efforts to climb forward.

The problem solving engine in the illustration is a PDCA cycle, further explained in my post entitled Kaizen Progression and Continuous Improvement.

pdca-cycle

Where Change Fails

Change efforts are tremendous undertakings, and can fail at any point in the change process.  In some cases, the effort never gets off the ground; in others huge investments are wasted or returns are diluted due to failures late in the process.

  • Awareness:  If the organization is not aware of the need for change they will often be overcome by the changes around them.  This is the case of disruptive technologies or insular management.  In such cases, by the time management is aware of the need for change they don’t have enough runway or resources to make it happen.  By the same token, if leadership is aware of the need for change but does not communicate it well and often they will not have the support they need to pull it off.
  • Desire:  Even if we are aware of the need to change, we may not want to change.  Consider an obese middle aged man.  He knows his life is threatened by his poor eating habits and lack of exercise, but he cannot come to grips with it and grabs beer and chips for game day.  The same could be said for a supervisor who has risen up the ranks by knowing the little things but may feel threatened by some of the changes he is learning about.  Until he desires the change he will sit it out and wait for it to go away, as it likely has in the past.  Change without desire will fail.
  • Knowledge:  some change failures can be traced back to a lack of training or training concentrated on too few individuals.  A few people may know what is going on, but if a key individual gets on a bus or gets hit by a bus the whole effort is in jeopardy.  An associated problem is the fact we tend to want to solve all the problems with the tools we are most comfortable with.  Just as everything looks like a nail to a man wielding a hammer,   we all tend to migrate towards our comfort tools.  Some believe kanban systems will cure World Hunger, while others are sticklers for visual planning boards.  The truth is, there is a myriad of common sense lean tools out there, from Workplace Organization to SMED to 5 Whys.  All have their place, and all should be used as the circumstances dictate.
  • Ability:  Sometimes well-intentioned change efforts fail because of the team’s lack of ability to control the process through the change.  This usually manifests itself in quality problems – excessive process variation.  Without a stabilized process, we cannot take the next step in our journey.  It may be there are too many demands on too few resources – people are stretched thin and don’t cement the gains, moving from one fire to another and lacking focus.  Or perhaps the team is not good at problem solving or facing a particularly difficult set of problems.  This would have the same effect – high process variation (defects) and a loss of momentum.

What to do if You Are Struggling

The change process I propose is an iterative one – step by step.  Each step leading to the next.  If things get out of control, step back, and center yourself.  Re-establish Workplace Organization.  Regain process control.  Take a good look a flow through the process.  Where does the flow get interrupted?  Find your bottleneck, be it due to a lack of resources or a weak process, and concentrate your efforts there.    Trim back and get back to basics of blocking and tackling.

Also be sure to review the ADKAR model for missed steps or breakdowns.  If you are far down the change path it is likely your problems are due to lack of sustained leadership or reinforcement.  What gets measured gets done.  Are you measuring and emphasizing the right things?

Let Value Stream Focus help you get your organization moving on a path of Continuous Improvement and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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The Culture Beast

change-monster

Culture is a living embodiment of what the organization is – reflecting its past, its current customs, and foretelling its future – culture is a beast.  Culture is defined as a “blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time” – governing how people interact and even determining the organization’s ability to grow and change.  The organization creates its culture but is also bound by it.

Culture Eats Strategy for Lunch

Any organization interested in developing and successfully implementing strategic initiatives must understand and incorporate the culture of the organization.  Culture facilitates the status quo and will gobble up attempts to change – unless the culture beast is aligned with the change.  Most failed attempts at lean transformation come back to culture.  Even if there are some obvious gains, they will often be in the form of “islands of excellence”.  A stifling culture will render change attempts stuck in the mud.    These “brown fields” are common – where top management attempted lean but could not get it to stick.  The culprit?  Unyielding culture.

Leadership can influence culture most directly through its actions – or inaction.  Depending on the company’s leadership and values, certain corporate cultures form which enable change and growth, while others stifle creativity and change.  A culture of fear will stifle any change.  If people feel threatened, they will not take risks – least of all driving change.  Even if there is a movement towards change, an organization beset by fear and uncertainty will quickly withdraw into a blame game and more effort will be spent on covering their butts and pointing fingers than on achieving company goals.

Dozens of studies have been made of the NUMI (New United Motors, Inc) plant, a joint venture between Toyota and GM, staffed by the UAW.  The plant was universally recognized as one of the best in North America, if not the world, for a number of years before being shuttered in 2010.  Despite sharing plant management duties, with complete access to training and learning, “General Motors lost and Toyota won” (Steven J. Spear).  The one lean lesson GM could not take back to its headquarters was the culture.  Tools can enable major change but will not by themselves instill a culture of Continuous Improvement.  Nevertheless, tools is where you start…

Want Change?  Feed the Beast

Culture is a living thing.  It changes over time and feeds on daily activity.  Changing its diet in the form of daily work habits and interactions changes culture, little by little. If culture eats strategy for lunch, structure shapes culture.  Structure is the fulcrum to leverage a change in culture.

structure

Change happens only with sustained effort or major upheaval.  Entropy, the tendency for change efforts to dissipate or degrade, is enhanced by nay-sayers and those comfortable or benefiting from the status quo.  Existing patterns, relationships, and mores will only change with a shift in self interest.  If employees at all levels can see the benefit – resistance will be lowered and the possibilities for real and significant change increased dramatically.

A change in structure, or how information and product flows in the organization, can effect a change in culture, and thus in how we interact with one another.  Implementation of Lean Tools such as leader standard work, workplace organization and visual systems, pull systems controlled by kanbans (min-max), and kaizen events which promote communication, learning, and rapid change all have the effect of structurally changing how we work.   Lean Tools promote a Process Centered organization.  The schedule is no longer dictated from high up in the organization but rather based on pull from the customer, and replenishing kanban bins become the province of the employee.  The system itself drives work, and human effort is spent on improving the system.

What culture do we want?

In the traditional, Employee Centered Organization, information flows from top to bottom.  Command and Control functions are easily recognizable.  Directives are passed down to those who actually add value to the product or service, and little information flows back upward.  Little information transfers between functional silos, either.  Meaningful lateral connections are at the management level, and change is identified and implemented by Management.  Virtually all organizations see the value of employee participation.  How do we get it? How to get employees involved in improving their workplace, and consequently, the company?

ci-flip

In the Process Centered Organization, information flows both up and down the organization.  The conversation changes.  Management finds itself in the position of asking their employees, “How can I help you do your job better?”  Opportunities for improvement are readily identified and implemented across the organization, resulting in a continuous cycle of improvement.  Leaders still lead, managers still manage, and the entire organization is in step.  Culture has effectively flipped.  Instead of a few minds working on improving company processes, all employees own their processes and are seeking continuous improvement.

Continuous improvement is just that:  continuous.  As the organizational culture flips from a people centered one to a process centered one, people improve their problem solving abilities at all levels of the plant to achieve the organizations’ True North. The process is done in steps.   An upside down triangle is not initially a very stable structure; it needs a lot of attention to achieve balance.  Critical to sustaining this new process centered culture is turning workers into problem solvers, so they can truly control and improve their own processes.  Empowered workers will strive for ever greater productivity and waste elimination, especially if they share in the gains.  Conflicts and turf battles dry up in favor of joint collaboration to resolve problems.

Keeping the Beast Happy:  Servant Leadership

Managing from the “bottom of the pyramid” takes a completely different skill set than managing from the top.  It’s watering the horses, then the men, and finally, the officers.  The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.  Implicit in servant leadership is the belief that every person has value and deserves civility, trust, and respect and that people can accomplish much when inspired by a purpose beyond themselves – both foundations of a lean culture.

Chris Edmonds’ The Culture Engine, details five practices to servant leadership:

  • Clarify and reinforce the need for service to others, educating through their words and actions, encourage their team to do likewise.
  • Listen intently and observe closely, actively soliciting group participation, their ideas, and their feedback. They get to know each one of their employees, and they tailor their leadership approach accordingly.
  • Mentor others, guiding them and helping their employees learn vital skills that will both improve their performance, grow as people.
  • Demonstrate persistence – be tenacious and invest whatever time it takes to educate and inspire servant leadership practices in the members of their team.
  • Hold themselves and others accountable for their commitments.  Practice what they preach.  Push for high standards of performance, service quality, and alignment of values throughout the team, and they hold themselves and their people accountable for their performance.

Only through sustained, vigilant effort by leaders can the culture beast be happy with its new diet.  But a diet based on continuous improvement principles and practices is a healthy one indeed, and the organization will flourish, along with its culture.

Let Value Stream Focus help you get your organization moving on a path of Continuous Improvement and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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Leader Standard Work

“The culture of a company is the behaviour of its leaders.  Leaders get the behaviour they exhibit and tolerate. You change the culture of a company by changing the behaviour of its leaders. You measure the change in culture by measuring the change in personal behaviour of its leaders and the performance of the business.”  Larry Bossidy (former CEO of Honeywell) and Author of the book Execution.

Think of a lean system as a house with a foundation, pillars and a roof.  If the system is not ‘tied together’, it becomes weak; even if one wall or pillar is strong.  If something is missing and you don’t know what it is, it may be poor habits of its leaders.  Standard work is the nails (or glue!) that holds the lean structure together and gives it the leverage and strength to maintain gains.  Structure amplifies our efforts enables change.  In this case, the structure is Leader Standard Work.

Value added work is done on the shop floor, so standard work must start there.  Each level of standard work must support and overlap the level below it like shingles on a roof to ensure alignment of efforts and full coverage of initiatives. It also serves to identify opportunities of improvement, training and coaching, and serves as an audit mechanism.  Together, we walk the walk.

Roles and Responsibilities

Roles and Responsibilities vary throughout the organization.  Leaders closest to the shop floor or value added operations have pretty clear and explicit and easy to identify day to day tasks.  What often gets lost is building systematic problem solving and improvement into daily routines, and standard work can help.

lean-leadership-responsibilities

Checklists

lsw

Leader standard work varies by management level.  At the very lowest level of management, daily tasks are more explicit.  Checklists are a quick, easy way to organize leader standard work, and can be adapted to any environment and management level.  Would you want to fly in an airplane that had not gone through a rigorous pre-flight checklist?  How about surgery?  We should treat all of our operations environments the same.

Group and Team leaders have daily checklists emphasizing startup, material supply, process audits, and first level problem solving.  Supervisor standard work centers on problem solving and process improvement. “How can I help you improve your process?” should be on her lips every day.  In addition, she focuses on coaching and mentoring her team, along with several deep dive process audits.  Production manager standard work is broader still, focusing on problem solving and team development.

The point of the checklist is to build good habits and organize thinking.  Were we ready to go at the start of the shift?  Are we ready to go next shift?  Are we getting our materials promptly?  One checklist can serve for the entire week and should serve as a quick view of major themes – not a detailed drill down of a specific issue.  Those should be handled in Problem Solving sheets or other documents.  Spend a little time at the end of the week to review the standard work sheets – some themes may come up repeatedly requiring a deeper dive in problem solving or other improvement opportunity.

leader-standard-work-sample

Leader standard work also helps to ensure goal and efforts are aligned throughout the organization.  In fast moving, matrix organizations this is especially important to ensure we avoid the dreaded “death by meeting”.  KPIs associated with Leader Standard Work should be tracked via the SQDC Boards.  Kaizen Newspaper should track problem solving efforts at all levels.

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Employee Training

What if we train them and they leave?

The importance of a well trained workforce cannot be overstated.  A well trained workforce is the link between the company’s technology and the customer.  A well trained workforce combined with process improvement can reduce the need for specialized labor and pass down skills and decision-making to the lowest possible level, improving speed and quality while saving costs.  Indirect labor must orchestrate the transformation process, from concept through design, manufacture, delivery, and aftermarket.  This includes connecting the organization to external vendors and collaborators, banks, and distribution, as well as continually improving the entire process and planning for future growth.  A well functioning organization requires constant training of both Direct and Indirect employees in order to maintain and improve its current condition as well as incorporate new processes and products.

Some companies have very well developed, structured training systems for both new and existing employees.  For many companies, however, a minimum safety training and new employee orientation (such as SB198 “right to know” – legally required) is where training starts and ends.  Companies with short seasons or suffering from high turnover may feel training is not worth its significant investment.  I am reminded of two questions asked at Motorola:  “What if we train them and they leave?” and, better still,  “What if we don’t train them and they stay?”  Typical on the job training (OJT) consists of taking one of the best operators out of their routines and placing them with a new employee.  Neither employee is working near their potential, and the new employee typically picks up 80% of the experienced employee’s habits – good or bad.  There has to be a better way – and there is.

Employee training is a huge opportunity for companies to ensure short term success and to shape their future.  Training and development offers an upward career path for employees, leading to higher job satisfaction and retention rates.  Training also offers management an opportunity to identify and develop high potential employees.  It is not uncommon to see a different side of an employee that may lead to an acceleration of or a change in their career path.  There is a balance between the company training the employees (at company expense) and the employees seeking out their own training opportunities.  Those employees who go the extra mile to continually educate themselves are gems, and whose request for company support will more likely be met with success.

On-boarding New Employees

Even with extensive recruiting efforts that may include ID verification, background checks, physical exams and drug screens, a quick study of most organizations will show employee turnover is very high in the first days and weeks after hire.  Some employees are not up to task or are simply not interested in working hard.  Some are out of shape and find themselves thrust into an early morning, highly repetitive task and just can’t handle it.  Others find themselves not “fitting in”.  Still others were there just to check it out or fill out their unemployment paperwork and had no intention of staying.  In these cases a training cell for new employees might be the answer.

A training cell keeps new employees together for the first week or so in the company and provides both company and new employee with a chance to check out one another.  In the cell new employees are taught basic job skills and do some repetitive tasks (on short rotation) such as filing or bench assembly process.  They receive basic safety training and plant orientation and get a feel for the type of work they would be doing.  They also have a chance to make some friends with other new employees (feeling alone can be a major reason for job abandonment).  The cell trainer can be trained to spot goof-offs or potential workman’s comp scams and they can be quickly weeded out.  At one of my companies we cut new employee turnover by 50% by using a training cell, while cutting accident rates significantly.  It sounds like a big expense up front, but it should be considered.  How much work do we get out of new employees anyway?  A training cell accelerates learning for both the employee and the company.

New office employees face many of the same questions and challenges.  How do I fit in?  How to contribute?  Handing a new employee the company handbook is only the start.  A well structured first 30 day program will help get these employees up to speed and contributing as well.  Scheduled lunches with key office employees (peer level and above) coupled with attending a mix of regular scheduled meetings as an observer and some sort of job rotation (could be sitting in different departments for 1 full day each) will get the new employee up to speed and contributing quickly.

Other Training Options

Options for training are numerous and don’t have to be hard on the pocketbook:

  • “Getting to know one another” lunches.   Senior managers from different departments may take new employees out to lunch as an opportunity to get to know one another and to learn about the company’s various functions and departments.
  • Reading (either technical or managerial).  This can include trade and technical journals as well as managerial ones such as Harvard Business Review and Fast Company.  I encourage employees to read anything and everything.  Many of these can be shared via a company lending library.
  • Brown bag book discussions.  Reading and discussing key books can be central to some companies’ culture.  My short list would include
    • The Goal by Eli Goldratt
    • Good to Great by Collins,
    • Kraig Kramers’ CEO Toolkit,
    • Prosen’s Kiss Theory Goodbye,
    • Peshawaria’s Too Many Bosses, Too Few Leaders,
    • Covey’s Seven Habits of Highly Effective People
    • Dale Carnegie’s classic How to Win Friends and Influence People
    • Pat Lencioni’s The 5 Dysfunctions of a Team.
  • Excellent books to get Lean Enterprise rolling would include:
    • Lean Thinking by Womak,
    • Learning to See and Toyota Kata by Rother and
    • The Toyota Way by Liker.  There are SO many others!
  • Videos.  Videos are great for individual or group instruction.  Most community Safety Councils have good lending libraries to start with.  Technical Videos from Society of Manufacturing Engineers and others are excellent.  They can be kept in the lending library as well.  Some of the best team building videos are full length films (mostly sport themes).  Hoosiers has notes all over the Internet dissecting it as a team building movie.  Another is Miracle.  These are great to view over several pizza lunches – prepare discussion questions to keep people engaged.
  • In-house classroom training.  Though they can be time consuming (use sparingly) in-house classes are a powerful way to bring a lot of people up to speed very quickly.  Whenever possible, challenge your own employees to teach the class – they have to learn the material to teach it, and the process will enrich both student and teacher as well as serve as a good team building exercise.
  • Outside classroom training.  This may be through the local university or trade schools, and professional societies.  Classes may include basic Supervision, Materials Management, Welding or other technical certification, or even English as a Second Language.  Let’s face it, GED training may be the best investment possible and instill a huge pride in the recipient.  Often all that is required is for the HR department to share some research on available programs.
  • Kaizen events should include a brief educational segment as well as the discovery, learning, and sharing of the event itself.
  • Mentoring (see Managing 360)
  • On the job training using Work Instructions (see below).

Standard Work

The best way to reduce the training investment is to simplify and standardize jobs – something Henry Ford figured out 100 years ago.  Standard Work and associated repeatability is the Holy Grail of Manufacturing, where the goal is to efficiently complete repetitive tasks.  It may or may not be the best way, but Standard Work is accepted as the “right way” to do a process until a better way is agreed upon.  Standard work can then be used to train others in the same task and to audit the work of an extended workforce to ensure a minimum of variation.  Lastly, standard work is the basis for process improvement – the new process is compared to the Standard Work and is either adopted as the new standard or not, based on its merits.  Lacking standard work, the organization is compelled to rely upon tribal knowledge and existing skilled labor, both of which limits the organization’s ability to grow and respond to change.

During WWII the United States mobilization efforts were hampered by a surge of unskilled workers into factories.  In response, the Defense Department developed the Training Within Industries (TWI) program.  Then new approach, called Job Instruction Training helped develop skilled workers as quickly as possible to do the work of those who left to fight the war, at the same time the factories were retooling to war-time production (sound like a challenge?).

The three components of Standardized Work as identified by TWI are:

  • Important Steps
  • Key Points of each step
  • Reason for each Key Point

These components are recorded on a job breakdown sheet (Work Instruction) to create the basis of both standard work and for training.  In keeping with the Visual Factory with the goal of simplifying things, I recommend all Work Instructions be loaded with graphics illustrating each step.  A heavy dose of illustrations and photos helps to quickly communicate key points in the challenge of diverse languages and experience.

Training Scorecard

Standard Work should be posted in the workplace and used as the basis for training and process auditing – NOT in a binder gathering dust.  The idea is to make Standard Work the centerpiece of your operation.  Managers and Auditors should routinely reinforce their importance by referring to them and auditing work to the published standard.

teamskills

The workforce’s overall skill level can easily be tracked using the same Standard Work.  Simply rate all employees against a list of all standard work processes.  Assign a letter grade to for each employee skill according to the following criteria:  C = trained to standard work – can perform with supervision, B = trained and skilled at task – can perform without supervision, and A = highly skilled – able to train others in task.  Then, award 1 point for a C, 2 points for every B, and 3 points for every A each employee is rated.  Composite scores can then be calculated for each employee as well as an average score for the entire workforce.  Raising both individual and group scores is done by adding new skills (C points) or by increasing skills in a given task.  Both benefit the company and are reflected in a higher overall skills rating.  A simple, low cost one-time award for each “A” earned incentivizes employees to seek new skills.  For the cost of a much appreciated $50 or $100 gift card at a local grocer (no tax bite) you will find employees seeking new training without long term raises or financial obligation. At the same time the metric “average employee training level” is a great company-wide scorecard.

Process Improvement then becomes a function of stabilizing the process (i.e. following standard work) and then a stair-step kaizen approach, re-establishing the new standardized work and training against it to stabilize the new, improved process.  See Kaizen Progression and Continuous Improvement for more information on process improvement methods.

Copyright 2012 Paul Yandell.  Let Value Stream Focus help you get your organization moving on a path of <strong>Continuous Improvement</strong> and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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Transforming Lean Through Middle Managers

Interview with Paul Yandell, President of Value Stream Focus LLC

interview by Joe Dager of Business 901 on April 2, 2011.  See and hear original interview at Transforming Lean Thru Middle Managers” (http://business901.com/blog1/transforming-lean-thru-middle-managers/)

Paul Yandell:  When I talk about managing from below, I speak to middle managers; I was a resident with them. Most of us have been middle managers and understand those frustrations. I hit on a theme of the “Guerilla Manager” years ago, and I have spoken on this theme to a number of national and local forums. It really resonates with people, because people stuck in the middle are struggling with, “What do I do? How do I be effective?” Many of them are waiting for leadership. I have also done a lot of teaching, and I find many of my students feel the same way. They’ll ask “I’m learning Lean tools, but how do I put them to use?” I’m trying to say “Just go right ahead. Don’t wait for your CEO to say, ‘We’re going to go down this path.’ Just start leading the company from the middle and you can be quite effective.” We did that at Dimension One Spas, and we completely turned around the culture and transformed the company to a Lean company. We ended up winning a regional Shingo prize. It was a validation of our efforts.

It was really like a middle management revolt, if you will. The owner, like many small business owners, didn’t take a strong interest in manufacturing. They want to make sure there are no problems in manufacturing, but they’re not really sure how to build things. They’re more sales people or finance people, generally. When they see someone getting traction, they generally kind of say, “OK.” As long as you’re getting top management <i>support</i>, you don’t need top management <i>leadership</i>. I think many people think they need leadership. There’s a big difference. I think you can lead from the middle if you have support from the top.

Joe Dager:  You’re singing my message, Paul. I’ve already started the podcast because I thought what you just said there was golden. So with me today is Paul Yandell. This is Joe Dager with the Business901 podcast, and I’d like to welcome Paul. Paul, can you give me that elevator speech about your company Value Stream Focus?

Paul:  Well, Value Stream Focus is a small consulting company. We just started several years ago working with companies to lower their cost. That’s really what companies are looking for. I use a number of tools starting with Lean. My background is Lean. We’ve added Six Sigma and of course, common sense goes a long way. We’ve combined those in the pot, and bang! Costs go down. That’s basically how it works.

Joe:  Well, you’re one of the few people that I’ve ever heard talk about middle management. And to me, I’ll flat out say it. In every successful company that I’ve been associated with, middle managers were the keys, and the unsuccessful ones, middle managers were the keys.

Paul:  That’s it. I mean, if you understand middle management, then you can make it work. Middle management you have to realize started out as being basically lower management. Most of them learned on the job in some capacity. They’re not highly trained, generally speaking, or they’ve had technical training. Some of them are very, very well‑trained. But you have a mix of these people, and you have to speak to them. They were really good at doing the status quo. That’s how they got to be middle managers, and they’re going to cling to that.  To your best operator, you say, “OK, now you’re in charge of the operators,” and then you grow, and then you grow, and then you grow, and 15, 20 years later that guy’s your production manager and he’s good at all the old little things, the tricks, the piles under the desk, knowing where everything is, all the tribal knowledge.

They’re not inclined to change, and until they see benefits, they could really kill you. So there’s a lot of nodding, and they all know that managers and owners change, and they’re agreeable. But in the end, their comfort zone is doing what they were successful at and, until they can be successful at something else, why would they do anything differently, really? You know, why would they change?

Joe:  Yes, and I think that’s the key. Because everybody always comes down saying, “Oh, we’re going to do this and we’re going to do this,” and the poor middle manager’s stuck in the middle, because he still has to get it out the door. He still has to assist the people to perform and he’s always the one stuck in the middle. We always talk about leadership, and we’re always talking about respect for people or the worker, but who respects that middle manager?

Paul:  Well said. The other side of it is this. I mean, there’s a certain level of fear on that shop floor. Those employees know most businesses have some kind of seasonality or growth spurts, and they know when business turns down a little bit, they can look around and they know some of their peers are not going to be in the room in the next month or so. They also know that by and large the office never changes. So, they basically don’t…And we’re talking in the manufacturing setting, but it applies to an office or service setting as well. Middle managers are survivors. They know how to do work quicker when they need to work quicker. They know how to kind of stretch it out when they need to stretch it out. I mean, this is their life, this is their world. If you’re trying to change that equation, you really need to speak to those people. Not only the people who are in management positions, but the informal leaders as well. It might be the janitor is a really important person in your business, because he’s related to 20 other people in your company, and he’s kind of the patriarch or the matriarch, whichever.

You just have to realize all of these equations and cross currents that are out there. Of course, the CEO is the most powerful person, but making a speech and wanting to make change doesn’t make change. We all know that structure has to go with culture; the two have to go together. You see it in literature a lot, that culture eats strategy for lunch. It’s so true. So you need to have a structure and a culture together that will facilitate the strategy that the CEO wants to implement. They can’t implement it without some effective way of handling change on the lower and middle ranks. The best and most effective way of managing change is really through kaizen and through people thinking together and all an atmosphere that people can make mistakes and they’re not penalized for it.

Going back to the whole middle management conundrum–they’re afraid to make mistakes, because they’ve seen people who make mistakes. If you have any black mark on your record, when it comes to layoffs those are the first guys that go. Everybody knows, I mean, they’re not stupid. They may have had less opportunity or they may be an immigrant, but they’re not stupid.

For example, some of the people on the shop floor, they were doctors and lawyers and teachers in a former life. This is the opportunity they have in the United States, and we have to be aware of that. I think that we have to give them more credit and speak to them if we want to make lasting change. I’ve been successful at it. I feel comfortable with that statement.

Joe:  Well, leadership still has to call you in, though, to get in touch with the middle managers, because those are difficult people to reach, they’re not the easy ones to be on an email list or to be accessible that much through the phone at any time, because they’re on the floor.

Paul:  Well, here’s what happens. If you look at the four drivers of Lean, if you simplify your model, and you look first at workplace organization. Then from there you look at flow, uninterrupted flow. Next you look at quality at the source. Finally you look at single‑minute exchange of die. If you look at that progression…you can build meaningful change.  We’re going to start with organizing the workplace, the 5S or 6S– lots of different versions of that–when you start and localize, and you start cleaning up and sorting and finding tools that maintenance thought were stolen from them but instead were just left in work areas and so forth, and you start cleaning and organizing, it makes a big impact. 5S is the biggest; it’s visual change, and everyone can see it.  Work improves.  Flow improves.   These are all things that could be done in middle management ranks without a budget and without a lot of fanfare. Let’s give ownership and top management credit, too. They’re sensitive, they just don’t know quite how to get the message across, but when they see that happening, they’re going to like it. They’re going to applaud it.

The middle managers who are trying to effect change, people like plant managers or production managers who are starting these efforts, they ought to be shown off. Now, what I have learned is that, if you start cleaning and organizing and helping people improve their workstations, pretty soon other departments line up and they want the same thing. “Hey, when are you going to come and fix my area? When are we going to do a kaizen in my area?” And what will happen is, it will start getting a life of its own.

The other thing, though, you have to be sensitive to is, let’s talk about budgets for a minute. Let’s suppose you’re trying to change an organization, but you’re doing it on your own, you don’t have a budget. You’re certainly not going to shut down the plant for a week while you do a Kaizen in one department. Or, you don’t have a lot of money like that you can throw at it.

If you look at the basic setup of kaizen, you can do that in a couple of afternoons and on a Saturday. What we did is, we developed a formula of what we call a mini‑kaizen. On Tuesday afternoon, we would get together at maybe the last hour or two of work and a few hours of overtime. We bring in pizza for the guys. We would do a brief introduction to Lean concepts, an idea of what we’re trying to do, talk about those four drivers of Lean that I mentioned.

Then we would meet again on Friday, after they had thought about it; maybe do an exercise like a paper airplane exercise or something where the guys could understand what we’re trying to do with single‑piece flow or maybe a cellular manufacturing change.

On Friday, we talk about what we’re actually going to do. What is the task at hand that we want to do on Saturday? Bring the guys in and do the transformation on Saturday. We had support from the departments on either side of a given department. We had maintenance and engineering involved, and so forth. Then from that, we were able to make huge transformations in the plant without a big budget and without having to go to top management approval, for the most part. Pretty soon you can start turning an organization on its end. I mean, it doesn’t take very long. It catches on like wildfire. Because people are interested, people want to be involved.

Joe:  I think that’s a great strategy to do, because success breeds success.

Paul:  Oh, yes.

Joe:  And the people looking from the outside in, they want to get in the cool group!

Paul:  Oh, yes. Now, here’s even better if you want to be in the cool group. If you can give away T-shirts, if you can start branding your effort. One of the guys’ mothers was Japanese, and so she wrote “Kaizen” in Japanese. We made this emblem to brand our efforts, along with the words “Dimension One Kaizen”. We made T‑shirts to that effect. We were branding it all over the place in our company. Then we had a Japanese customer come in. Of course, most of our workforce in this case was Hispanic. A customer from Japan came and he saw this insignia, and he was looking, and he’s looking, and he couldn’t figure it out. He goes, “Zen Kai, Zen Kai. Oh, Kaizen!” We had it reversed! Instead of “good change”, we had “change good”. But of course, in Spanish that’s how you say it. Actually it worked out, worked well. We had the wrong translation, but we got it right.

So those kinds of things become part of the culture of the company. Everyone wants a kaizen T-shirt or a zenkai T-shirt. That’s an easy way…I mean; a T-shirt’s a pretty easy way to build change in your company.

Joe:  You won a Shingo Prize by working with middle management, right?

Paul:  Yes. In fact, to be honest, we won a Silver Shingo and not the Gold Shingo. I asked the Lead Examiner (Jake Raymer, Director of Education, Shingo Prize, Utah State University), “So why did we not win Gold?” And he says, “Because ownership has no idea what you’re doing.” He said, “It’s unreal, Paul, what you’ve done. It’s unreal. But I’ve got to tell you, the owners ‑‑ it was a husband and wife team ‑‑ they don’t really have a clue.” I thought, wow. And it’s so true [laughs], I couldn’t argue with that. So I mean, all of the elements were in place. All of the numbers were in place, all the benefits in place. After we had done a conversion in the warehouse and basically cut our inventory by over, by half, basically, cut it in half in two‑and‑a‑half months. We’re walking through the plant, the owner and I. And Bob says, “Well, Paul, I don’t know where you got this Lean stuff, but it really works.” There you go, that’s support but not leadership, I would say.

Joe:  You talked about the change group structure. Can you tell me and explain that more to me?

Paul:  Well, understand that this was happening in the late 1990s, and no one really knew exactly what Lean was. We all of course had heard of JIT and trying to know what that means. We started having brown bag lunches where we actually bought a couple books. This is people from engineering. We didn’t have manufacturing/engineering at the time, but we had some engineers, and my production planner and myself, and a couple production managers. We would read these cases in early books and kind of talk about them at lunch, and that kind of developed awareness. Then I got permission to teach a class. I called it Advanced Manufacturing Techniques, and I taught that in‑house. It was basically elements of Lean, and again, I taught this to the same group. So, we did it at lunch. What we did is, we brought in pizza or something, and we had it on Tuesday and Thursday, and I had half the crew on a Tuesday and half the crew on Thursday. We made it a hour‑and‑a half. This way, by bringing the lunch they give you their time, as it works. So if you bring them a pizza, then you can ask a guy to sit through lunch and a class and it’s not uncool.

I gave the same class twice a week, and I treated it as a serious class. I gave outside reading, tests, exams, and so forth. We included some statistics and some Shingo writings and so forth. That kind of developed awareness in middle management. So then I was surprised by a few of the guys that I didn’t expect much out of who really stepped up in the class.

They became leaders when we started doing Kaizen; it was very scary to do a Kaizen, our first Kaizen. We had no idea what we were doing. We had no consultants and no budget for it. We didn’t even talk with the owners about it. We just decided, OK let’s try this. Kind of scary and the first Kaizen we did was really just a 5S Kaizen in the department where there weren’t any measurable results other than it looked cleaner and better, if you will.

We found–I joked earlier about maintenance tools–we actually found a lot of maintenance tools. Our Maintenance would say, “They stole our tools,” and all this, but what happened is the bell rang, and Maintenance walked out of the job and left some tools around. I don’t think that’s too uncommon. We did a 5S and it wasn’t much to be excited about.

The next department that we went to, we transformed in from a basically a huge batch operation into a cell. In that case, it was dramatic. We changed three days inventory into about an hour’s inventory or less. Everybody, the whole place stood on end when we did that. We freed up a relatively huge amount of space without that entire inventory, as you can imagine.

I developed a three man team to drive the change.  This is very important. This is the first time I was able to get a manufacturing engineer; he came out of engineering, basically to step sideways into manufacturing engineering. I had one guy who did documentation, and we attached a maintenance person to this team as well.

So we had a guy who understood about as much about Lean as I did. We had a documentation guy who came out of the quality department, didn’t know anything about Lean but he was fully bilingual, as I am, and most of our workforce was Hispanic and not all of them were bilingual. Working in different languages was part of what we needed to do.

Then we also had this maintenance guy who was attached, who I took out of maintenance. So at this time I was the Plant Manager, essentially, and Vice President of Manufacturing. We had the cellular change and we were able to relocate electrical drops and so forth with the help of this maintenance guy. And that became our core structure. And that Lean Team, if you will, rolled the changes. Three guys could drive the change throughout and then we could leave with our documented work constructions, photo documented and really leave our mark.

In that case we did a paper airplane exercise. No one had ever heard of one‑piece flow, it was very scary. One thing about doing a paper airplane exercise, you can always put the troublemakers and the disbelievers in a few of the chairs. I am sure most of the listeners are familiar with that. There are a few tasks in that exercise that are little bit more frenetic than other tasks, and so you put the influential disbelievers in those chairs and you have fun with them and pretty soon they are on your team and they’ll say, “OK, let’s try it.”

Literally we left work on a Friday with this huge batch, operational in three days of inventory, and then we came back on Monday with a little cell and all this inventory we basically moved out of the space and then weaned it down.

Within a week, basically, since we didn’t have to make a lot of inventory, we had a few days that we could continue moving in to our new digs, if you will, and painting and making it look right on Monday and Tuesday while we worked off the extra inventory. Wow. That became a model for the rest of the plant.

Once you have a few successes it takes off.  Start with a few easy 5S type kaizens and then you’re on your way, I would suggest.

Joe:  What was your largest hurdle to overcome?

Paul:  Materials group was living in MRP Land and we kept having troubles with materials, so what we did is start a Kanban system throughout the plant for all of the re‑supply of the floor. I worked and I worked and I worked. I was actually good friends with the VP of Operations his title was, basically, materials manager and a lot of other hats. The plant was humming but we kept having problems with materials and finally that gentleman decided to go and develop his own business in insurance. The owner came to me with him and they said, “We want you to take over materials. We’ve seen what you’ve done in the plant.” No problem. We put in the Kanban system with our vendors and we chopped that inventory in no time.

Soon we had vendors bringing in their other customers saying, “Hey, customer, can’t you be like Dimension One and do it this way? Look how great it is.” We ran out of stock‑out problems and we greatly reduced our inventory. We freed up all kinds of space. You can only do so much as middle manager, because you’re not the boss. You can show people what could be done, you can teach them, you can offer to help them, but at some point it really does help to be the boss.

Once I’m the boss of the warehouse, of purchasing, it was like OK, good. They had seen enough. I visited another company with them to see what a vendor Kanban situation would look like. They bought in. In no time they were singing the song. Leslie May, who became my Purchasing Manager, I’ve seen her do presentations at CSEMP’s national conference on how to do a vendor Kanban.

This is something we just did ourselves. People are willing to learn if you give them an opportunity and they’ll own it if you let them.

Joe:  I think that’s what’s so important because I always hear this top‑down driven type culture and these mandates that we’re going to be a Lean company and it’s got to be the vision from leadership and it’s got to be this saying we’re going to become Lean and everything and I flat out don’t think that works. In certain circumstances it might work, but…

Paul:  Of course, it does work but let’s agree that middle management makes it work. So if the top management says, “This is how we’re going,” and he’s able to get alignment within his company top to bottom, then he’s got it. The real problem is alignment. If you say you’re going to change but you don’t change your structure…I mean, Lean is all about turning the triangle upside down. If you look at a triangle, a normal triangle with the apex at the top, this is in a people‑centered organization, the classic organization where the boss tells everybody else what to do. If you are continuously, that’s how all your information flows, and then what happens is it’s hard to drive change through that organization. You’re going to tell people what to do, but they may or may not buy into it. They’re kind of waiting for you to go away or for the wind to change.

Now, if you can–through continuous improvement, through Lean techniques–if you can switch that, flop that triangle around so the apex is at the bottom, now what happens…you have a flat part of the triangle at the top, if you will. You have a situation where the supervisor in saying, “OK, I need you to make green ones, 200 of them, and then I need you to make a bunch of red ones, 200 of them.” Instead, now the conversation is, the supervisor is at the bottom of the triangle, and the center of work is now the operator. Now the conversation is, “OK, operator, how can I help you do your work better? How can I help you improve your operations? How can I help you do a better job?”

Suddenly, the conversation has changed and it will never go back, because the operator goes, “Oh, well you know, my back hurts every day. If you could raise this desk another two inches, this table, or if you could improve my chair, they’d give me a back to my chair, I’d be a lot better.”

Now the operator does 15 percent more work and their back doesn’t hurt and now, all their friends, they want you to pay attention to them, too. Because, you know, “You helped Mary, why don’t you come over and look at me? I need a better light over here. And you think I could get a new knife? This one has a bad blade, and it takes me forever to cut this item.”

You’d find out all this stuff that you never knew. If you just walk through the area and look at it, everyone looks busy, everyone looks like they know what they’re doing, and no one tells you what they need, because no one ever listened before, why should they listen now? You don’t want to be a complainer. That’s middle management right there.

Joe:  Yes, and I think you hit the nail on the head, because I guess I would summarize that you become an enabler of work.

Paul:  Well said, you’re an enabler instead of a taskmaster.

It’s totally different. I mean, here’s how Taiichi Ohno set up Toyota. He basically says, “Look, the Kanban is the production control system. It’s a pull system. It’s all based on demand. It’s not based on what the boss says to do today. Your boss is the customer. If the customer orders black wire, you strip more black wire. If the order flow switches over to short red wires, you’re going to strip more short red wires. You don’t need a list to tell you what to do. You’re going to refill Kanban; you’re going to use your pull systems to tell you exactly what to build, all the way down to the vendor.” This is a cascading effect. If you’re running around with pieces of paper with hot lists, and all this stuff that has become American manufacturing, that’s all about being a boss and being a bully. “I need this right away! No, stop what you’re doing, do this instead!” The worker thinks you’re an idiot, because you keep stopping him and starting him. Instead of working for the customer, now he’s working for what he thinks is your whim. There’s a lot of distrust and a lot of rolling their eyes whenever the boss comes around with his last piece of hot sheet, his latest piece of paper. They’re not stupid. These people have families, they have lives, and they make the same decisions on a daily basis as you and I. You shouldn’t belittle them; you should put them on a pedestal.

Joe:  What you’re saying is common sense, which Lean is basically, common sense..

Paul:  It’s not that common, it’s not that common, buddy.

Joe:  Yes, right, but it’s not that common. Why not?

Paul:  Well, it goes back to, OK, to where we started the conversation. Middle management got there by being the best operators or the best at doing it the way it was, and they cling to that out of fear. They’re good at it, they always came up with a solution where they were able to meet that deadline or save that order, and so that’s your man. Your relationships, and you have your go‑to guys, and your go‑to methods, and that’s generally how it works. Labor has worked it out, and they’re good with that. Until people see the vision of what can be, until they see anything different, why should they change? Just saying it’s going to change from top management doesn’t change it. You need to show them that it’s different. Who’s going to do that but middle managers? It’s not done in the classroom; it’s done on the shop floor or in an office.

You know, I had a situation…I didn’t realize what was going on but this is, again, common sense. When I first joined the same company, Dimension One, the receptionist kept coming back…I had the first aid cabinet right by my desk, and the receptionist kept coming back and getting aspirin all the time. I mean, it was like a ritual.

I walked up to see her once at the front, and what happened is, she was handling the door and also on the phone, and on the computer. We had her multitasking, and this lady had a headache. OK, why? Well, she was cradling the phone on her neck, and she was looking at a computer that was down low and she was all scrunching.

Her desk was totally not set up for work. All I did was, I got a couple of books, I put them underneath her monitor and it lifted them up. And I ordered her a headset, at the time it was $50 or $70. All of a sudden her headaches went away, and she was feeling a lot better. She came back a couple days later, a week later or so and said, “Man, thanks a lot. That really makes a big difference.”

I thought, “Wow. It wasn’t any big deal.” I didn’t think anything of it at the time, but that’s an example of looking at your operators who are not set up to be successful. Here she was in pain all the time and really didn’t feel empowered or didn’t know how to improve her situation. She didn’t work for me, by the way. She was the receptionist; I was just helping her out.

Joe:  What I find common, though, is when someone else looks at something and from a distance, they see the obvious.

Paul:  Oh, yes. Her boss walked by her every day. “How are you doing today?” “Oh, I’m great.” “All right, well good. Good to see you.” She’s not going to complain unless you ask questions. OK, now if the same boss could ask the question, “What can I do to improve your situation? How are you doing? Are you comfortable? Does that chair work out? I see that you’re kind of on the phone a lot, but would it help if I got you a headset?” I mean, her boss could’ve done the same thing, but her boss wasn’t asking those questions.

Joe:  When does Lean not work? When would you say management or the structure of an organization would prevent you from starting?

Paul:  I can tell you, because I tried it another company, and that’s how I became a consultant, I resigned from another company where I couldn’t get it to do one. Here’s the difference. If you have a culture of fear, it will not work. The culture of fear, what I’m speaking to is, you have to be allowed to experiment, and you have to be allowed to make mistakes. Like my old boss at Dimension One where I was very successful, if I made a mistake…And I made plenty of mistakes, believe me, I make enough decisions in a day, probably several of them are wrong every day. Some of them were big wrongs. Some of them were expensive wrongs.

But anyway, Bob, what he said to me is, “What did you learn?” I mean, if you’re going to make a mistake, the reason to make it is to learn from it. There’s no other reason to make it. Otherwise, it is just bad. Let’s at least salvage something out of it, let’s learn. Let’s not make the same mistake over and over again. Sometimes you could make it twice, even. But let’s not make it over and over again. You have to be allowed to make the mistakes.

One of the best things I did was, when I first joined Dimension One, I had this idea, “I know, let’s make these carts.” We had plumbing hoses on the ground, and I thought it was making the product dirty, and I thought it was important that we not do that. We didn’t have very many maintenance resources, and I really put it on a high priority to make these little carts for me and so forth.

We put the hose on the carts, and I went out on the floor, after we had these carts, I was all proud and stuff. They were using the carts, and everyone was trying to be happy about it and smiling and stuff. A week later, I went out there, and I could see that they were kind of struggling with the carts. They just weren’t working very well.

I went to the supervisor and I said, “Well, these carts are not working out very well, are they?” And he kind of looked at me and he goes, “No, not really.” I said, “Well, let’s get rid of them then.” He goes, “Oh really?” I said, “Yes, that was a stupid idea.” They dumped the carts right then and there, and everyone was relieved. It was because I was able to say, “Hey, I made a mistake. It’s OK.”

Your boss has to allow you to make mistakes. That’s the support you need. You don’t need a lot of money, but they have to be patient and, in order to do that, in order to get that, you need to communicate with your boss; you need to share your manufacturing vision with them.

They need to know that you have a plan. If you have a plan and you are moving forward, even if you misstep somewhat, you’re OK. You need to manage your boss. The first thing you do when you are managing your boss is you make sure that if they look good, then you know that you look good. So you take care of their agenda first. You find out what they need and you give it to them.

Then you are allowed to shape the agenda. After you take care of their needs, you can start taking care of yours. If you report on a weekly basis, for instance to your boss, you say, “OK, here are the four projects you asked about. Here is the status, and I am also doing project number five and six.” You have now got tacit approval to work on projects five and six, and those might be your lean transformations and you put them in easy to understand language.

What will happen is, every week they hear now project five and six has moved up a little bit. Why, because you are taking care of their agenda. They’ll let you know if they don’t want you working on something. As long as you have that communication and you keep on working on it, “We finished project five, we did this five best in the plumbing department or in the order entry area and I would love for you to come out and see it sometime,” it’s likely he’ll show up, or she will show up.

You have an opportunity to shape the agenda by your own communication as a middle manager, to develop a reporting system and do it weekly and start managing up. If you manage up, you can get the support. If you have the support, you can make the transformation. That’s really what it boils down to.

Joe:  I think that’s great advice because people sometimes forget that you got to make your boss look good, that’s part of it, OK.

Paul:  Oh yeah, and never say anything bad about him. You need to build it up. You need to clearly be part of the team. You can’t say bad things about other people too. OK, in order to be effective in an organization, as a middle manager yourself or a senior manager, you have to be a positive force. You have to add something to the mix. You need to work on your own skills first. You need to work, and make sure that you know something about Lean, if you are going to use Lean as your vehicle. You need to have business literacy, you need to understand how your company makes money and speak to that. You need to help other people, especially if you are looking at working across the organization. If you want engineering to help you, you’ve got to help them. So I look at it as team effort. If you are in a relay race and you are handing off the baton, if it falls on the ground, you both lose.

I always go above and beyond what I need to help my fellow managers. I make sure all my people do it as well. Often times they complain, “Oh they are always this, and they are never that.” It doesn’t matter. You always help the other people, because it does come around. By always helping the other people, be it in engineering or quality or administration, sales– whatever it is, what will happen is when you do need support, those guys are there for you.

You will eventually need their support, because remember you are not the boss. You are not the CEO. You are not the owner. So why would these people cooperate with you if you don’t help them? They don’t see what’s in it for them. To be an effective middle manager is way more than just doing your own agenda. It’s helping others fulfill their agendas, and it’s making sure above and beyond that your own boss has their agenda filled, and that you communicate with them on a regular basis.

What will happen is, eventually you’ll get the nod, like in the case where the operations VP left, the CEO comes down and says, “Hey I want you to take this over,” and bam! We were ready to go. We turned that thing around in no time. It wasn’t like, “Well, what do I do now?” I knew what to do. I just couldn’t get the other guy to do it.

Joe:  Hey it’s great. I can go on and on Paul, OK. This is a great conversation. But is there something you would like to leave everyone with, to kind of sum up things a little bit here?

Paul:  What I would say is, treat people with respect at all levels and understand that the middle managers, they are trying to do their job. If you can show them the way, you will change lives. Every time you walk on the floor, people will smile at you. They know the difference. You don’t have to win the Shingo prize to feel the success. I have never been more proud in that organization, that I really was instrumental in lifting those people up where they were empowered to improve their own workplace. They loved it. They were more comfortable and more productive than ever. You could argue that that company would have never made it had they not gone Lean. This recession has been tough on everybody.

What we are really talking about is improving the workforce and the workplace. When you improve the workplace, you will improve the bottom line. There is no question about it. You just have to make sure that you handle your boss’s agenda, that you help your other managers at your own level and that you have a plan moving forward to develop your organization, develop your people and they’ll do you right. I don’t have any doubt about that.

Joe:  What’s the best way for someone to get a hold of you?

Paul:  They could check out my website, valuestreamfocus.com or just pick up the phone and call me at 760-500-6006.  I love to share ideas with people, talk with people, and work for people. Let me know how I can help them out, you bet.

Joe:  OK.

Paul:  Thank you so much.

Joe:  OK. Well, I appreciate it very much, Paul. It’s a very great conversation. This podcast will be available on the Business901 blog site and the Business901 iTunes store. So thanks again, Paul.

Paul:  Well thanks very much for your service. I have checked out a couple of your podcasts. Your podcasts, they’re really great, a great resource on the Web. Thank you very much.

copyright Paul Yandell and Joe Dager

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Fail Fast

We have all heard the expression “eat your peas”.  Simply stated, it means to do the tough tasks first, and then enjoy the rest of the process.   This applies to business as well.  Doing difficult tasks first eliminates uncertainty and clears the way for easy success later.  Cutting your losses early has the same effect, freeing up time and resources for other important tasks.

Cumulative effect of failure

Most people feel pretty good about performing at the 98% level – 2 failures per 100 attempts.  For an office worker processing 20 orders a week, that would be 2 errors for the entire week.  Not bad, right?  Probably not, if viewed by itself.  Now imagine the order processing is a 9 step process, involving 9 different workers or departments, each with the same 98% accuracy rate.  The table below shows the cumulative effect of a 2% failure over the 9 steps.  The cumulative effect is 83% acceptance rate, or a 17% failure!

Table 1:  cumulative effect of failure % good 98%           $/step $100
Process step 1 2 3 4 5 6 7 8 9
Acceptable parts 98.00 96.04 94.12 92.24 90.39 88.58 86.81 85.08 83.37
cumulative cost $100 $200 $300 $400 $500 $600 $700 $800 $900
cumulative cost of failures (out of 100) $200 $792 $1,764 $3,105 $4,804 $6,849 $9,231 $11,939 $14,963

Even worse, if each step costs $100 and each the errors are not caught until “final inspection” at the end of the process, the rejected processes cost of each of the failures is $900, or a total of $14,963 for 100 orders processed.   An effective “Check Do Check” program, where each process auto-inspects and errors are not passed forward for further processing, keeps failure costs at a modest $1,800.

Defect rates as low as 2% or higher are not uncommon in business, especially in office environments and processes with high variation.  Years ago silicon wafer fabrication had failure rates 30% or higher (I only hope it has improved)!  Long processes with such high losses force companies to build extra product, or “just in case” inventory, with all the associated costs of both time and money.  So of course all efforts must be made to control processes and eliminate failures (using both Lean and Six Sigma methods).  But some processes remain problematic, either due to difficult materials or a lack of process control.  What then?

The Importance of Failing Fast

Let’s consider a very difficult stage in the process, with low success rates.  Often the most difficult task, the one with the highest opportunity for failure, is performed last, the thinking being this gives us the best opportunity for success “having done everything else correctly”.  The problem with this thinking is that, though comforting, failing at the tail end of a long process is far more expensive, as measured in both time and money.  To illustrate this, Table 2 below shows the same success rates for processes 1-8, but step 9 has a success rate of only 60%.  At process step 9, 40% of products fail, at a cost of $900 each.  Cumulative failure goes from 17% in the above example to 49% as a result, and cost of failures jumps to $44,059.  Cumulative costs of “Check Do Check” are somewhat under control at $5,600.  Where should we perform this difficult task?

Table 2:  Hardest process last % good 98%   critical process (step 9) 60% $/step $100
Process step 1 2 3 4 5 6 7 8 9
Acceptable parts 98.00 96.04 94.12 92.24 90.39 88.58 86.81 85.08 51.05
cumulative cost $100 $200 $300 $400 $500 $600 $700 $800 $900
cumulative cost of failures (out of 100) $200 $792 $1,764 $3,105 $4,804 $6,849 $9,231 $11,939 $44,059

The Process shown in Table 3 has the critical, high failure process first.  The failure rates are the same, and, unchecked, the cumulative cost of failure remains $44,059.    However, if the product is inspected after step 1, cumulative losses can be controlled to total $8,830, saving a whopping $35,229 or 80% the cost of failure!

Table 3: Fail Fast – hardest first % good 98%   critical process (step 1) 60% $/step $100
Process step 1 2 3 4 5 6 7 8 9
Acceptable parts 60.00 58.80 57.62 56.47 55.34 54.24 53.15 52.09 51.05
cumulative cost $100 $200 $300 $400 $500 $600 $700 $800 $900
cumulative cost with inspection at step 1 $4,000 $4,240 $4,593 $5,054 $5,619 $6,283 $7,042 $7,892 $8,830

How is this possible?  This is due to the fact that we add value to each processed part, be is good or bad.   Doing the most problematic process early and inspecting parts at that time ensures we cut our losses early and don’t throw good money after bad by further processing reject parts.  An added benefit of cutting losses early is an improved ability to plan for time and resources – the relatively higher reliability of remaining processes helps control “just in case” inventory and the associated costs.

Lean is all about speed.  Deming’s PDCA pushes experimentation (and its associated failures) to the lowest level possible.  Toyota Kata is based on rapid experimentation and failing fast.  I’ve just put some numbers to it.  Fail Fast.  Eat your peas first!

Copyright 2013 Paul Yandell.  All rights reserved.

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Want to discover the riches beneath?  Drain the Swamp

Early settlers generally avoided swampy areas – with frequent flooding, stagnant water, and all the pestilence and disease that come with it.  These first arrivals would head to higher ground to seek their fortune.   Early attempts to rehabilitate the swamp look like small rivers to help drain some of the pools and expose the fertile land below.  It wasn’t until the building of the Panama Canal, arguably one of the greatest enablers of commerce ever built; that we realized we can’t be successful unless we control the pests associated with stagnant water – in this case, mosquitoes.  France began work on the canal in 1881, but had to stop because of engineering problems and a high mortality rate due to disease. The United States took over the project in 1904, and took a decade to complete the canal, which finally opened in 1914.  By draining the swamp and controlling malaria workers stayed healthy and the project was completed.

What does this story have to do with your workplace?  Everything.  Think of the water as inventory.  Stagnant, not moving, with all the ills that come with it:  high carrying costs, excessive lead times, obsolescence, and simply hard to slosh through.  High inventories make it difficult to build the right thing at the right time, and thus much effort is wasted.  The solution is simple:  drain the swamp.  Building drainage channels is like building a line to create flow in a factory, or making a visual schedule in an office or hospital.  The bigger and more complete the drainage system, the quicker water flows through the system and the fertile land is exposed.  The more connected your workplace processes are to one another, the quicker work flows through your plant or office, and the capacity to do more work expands.  By draining the swamp, we uncover a bountiful land.

Many offices and job shops exhibit poor flow:  each job is produced in isolation, and there is little coordination or cooperation between departments.  Material moves very unevenly, and inventories tend to be high.  A cellular flow is the first step towards draining your swamp.  Armed with a Value Stream Map, identify product groups with similar process flows and cluster them into specialized cells, or “factories within factories”.  These cells become the first drainage ditches, enabling you to lower inventory and put resources to better use.  To improve flow further, link cells with a production line.  Generally speaking, one long versatile line is preferable to two smaller lines, in part because feeder lines or cells are easier to co-locate along a longer line, especially when incorporating difficult to move areas such as paint booths or fixed machinery.  Further eliminate pockets of stagnant inventory by linking activities, with one pulling the other.  The same thinking can be applied to an office setting: visualize a flow of information or of patients.  Use visual systems throughout and use the line to beat the drum, or “takt time”, and keep activities moving and on pace.  The more activities are linked to one another, the better flow you will experience, and the more inventories can be reduced and other wastes exposed and targeted.  It won’t be long before that swamp looks like a Victory Garden.

© 2013 Paul Yandell.

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