Wednesday, September 2, 2015

A Simple Method for Achieving the Vision

The best way to predict the future is to create it.” – Peter Drucker
Many companies today have vision statements that are well-written and effectively describe future organizational aspirations. One has to wonder, though, that as common as they are, and as long as organizations have been doing vision statements, why so many companies continue to have trouble staying focused and miss the mark. Rather than staying focused and driving toward the future, organizational ADHD takes over and the vision turns into a virtually meaningless slogan.
One of the biggest reasons for failing to achieve the vision is a lack of understanding and appreciation of what a vision can truly do for an organization. A vision should be carefully created around what the company is expected to become over the next 5-10 years (or whatever time period makes sense for the company). It must be meaningful and able to drive all planning and improvement activities for the organization. It is a deliberate aspiration for the company; not something to be used only when convenient.
A Simple Solution
Achieving the vision is a simple process of understanding where the company wants to go, where is currently is, and continually closing the gap between the two. Just because the process is simple, though, does not make it easy. Without keeping the approach simple – and frankly most companies do not keep it simple – there is no chance of making it successful.
This post is meant to address the how of achieving the vision rather than the what. There is a process for creating effective vision statements that some leaders have obviously done very well. The method covered here assumes that the vision statement is one that clearly and effectively describes what the organization wants to become in the future.
  1. Define the Gap In the same way that a problem on the shop floor requires first to define the gap, achieving the vision requires understanding how far the organization is from the its ideal targets.
    Determining the gap involves breaking down the vision, which is often stated as a generalization, into specific 3-5 year objectives (which often include targets for safety, quality, production/schedule, and cost, although other areas can be covered). The objectives are regularly compared to current performance to determine the gaps that needs to be closed to move the organization closer to the vision.
  2. Set Annual Targets The 3-5 year targets become annual targets for different areas of the organization. Individual teams create their plans to achieve the targets, keeping the leadership team in the loop throughout the year.  The annual targets are deployed through the catchball process to ensure buy-in throughout the organization and to give the leader confidence that those accepting the objectives understand the intent as well as the targets.
  3. Establish Regular Meeting Rhythm There needs to be regular meetings to ensure: (1) the annual targets are being met; and (2) the organization is closing the gaps toward the 3-5 year objectives and ultimately the vision. The meetings are focused on problems in achieving the targets and closing the gaps toward the vision. The term rhythm is important here because the meetings need to happen on regular intervals based on the pace of the business. The key is to meet frequently enough to allow corrections to be made before things get too far off course.
    It is also important to remember that the rhythm meetings are not witch hunts. They are meant to ensure that problems are being handled effectively and to identify where additional help is needed. To keep the meetings focused, it is necessary to run them from the dashboards and only refer to the plans when needed to address a particular problem.  This keeps everyone focused on the same things, looking at the same data, and removes debate and confusion about where the problems lie.
  4. Repeat the Process Steps 1-3 need to happen every year to keep the team focused on the vision and to make sure the gaps are closing effectively.
The above process is a method that successful companies have used to turn their vision from a generalized statement of hopes and aspirations into a deliberate attempt to create the future. Developing and communicating the vision, when done correctly, can be energizing and motivating for the organization. Without a process for making it happen, though, the motivation, as well as the improvements driven, will likely not last.

Sunday, August 23, 2015

Should HR Make All Hiring Decisions?

One of the biggest problems companies have that interferes with long-term success is variation in people, team, and leadership styles throughout the organization.  This variation wreaks havoc with the company’s culture and leads to a host of problems that directly and indirectly affects performance.
An organization’s hiring process contributes directly to variation in personality, values, and leadership style.  In most companies, the hiring decision is made by the manager to whom the person will ultimately report which often leads to hiring people who are a fit for the manager’s style rather than the style of the organization.  The manager also has a need that, depending on the pressure to fill that need quickly, may drive the decision to hire someone without proper consideration to alignment of the person’s personality and values to those of the organization.
This sounds like an exaggeration but it is something that happens every day in many companies.  Unless the organization has a clear idea of its desired culture and the DNA of its people, and has a method to screen candidates to assure a proper match, its chances of creating the desired culture are very small.
Let Human Resources Do It
Giving human resources the power to make the hiring decisions is not a very popular viewpoint.  People complain that the HR team does not have the knowledge to hire the right person and is too disconnected to the workplace to effectively carry out the process.  When looked at in light of the long-term cultural ramifications, however, centralizing the hiring process within the HR team begins to make sense.  Some of the reasons for this include:
  • They touch all areas of the company and have a better understanding of the overall system than someone whose work is limited to a specific function;
  • Having an independent team handling hiring ensures consistency across the organization. They can make sure that the decision is based on competency as well as a fit to the company’s culture, which can reduce the hiring of friends or making a quick decision because of an immediate need;
  • It puts the responsibility of protecting the company DNA in one area that can continually close gaps in attempting to hire the perfect employee;
  • Like any process, the more hiring is handled by one team, the better they will get at performing the process. When hiring is decentralized, managers across the company do it so seldom that they never really get good at it.
There are obviously some basic elements that enable a centralized hiring process to work effectively.  First and foremost, human resource professionals need to spend a significant amount of time at gemba connecting with teams and working to understand the problems the teams face on a daily basis.  One way to help this is to rotate team members into human resources assignments on a regular basis.  Doing this will help HR better understand the areas they serve as well as having those served to understand human resource systems and methods.
Another important requirement to ensure the success of the process includes having a clear definition of the organization’s DNA and an understanding of how well the process is performing in terms of screening candidates for the DNA.
Finally, centralizing the hiring decisions within the human resource function requires HR team members to be responsive to the needs of its customers.  Although it may take time to find the right candidates, the process must continue to move until the position is filled.
I am not a human resource professional but having faced the numerous problems caused by variation in the hiring process, I’ve come to the conclusion that centralizing it is the best approach for most organizations.  If culture is truly valued as critical to long-term performance, we should always be looking for better ways to create it in a way that provides a true competitive advantage.  The hiring process has such a large impact on culture that it is a logical place to begin looking to understand whether it helps or hurts the company’s efforts to improve.

Sunday, August 16, 2015

A Solution Without a Problem

You are non-value added, Charles,” I was told. “Your sole job is to take care of the team member who is creating the value.” – Toyota Trainer to Charles Luttrell (from Toyota Culture: The Heart and Soul of the Toyota Way by Jeffrey Liker and Michael Hoseus)
One of the basic requirements for establishing an effective annual plan that many companies seemingly miss is a clear and consistent organizational purpose across the company.  Without clarity around why the organization exists, people will determine what is important based on their own perspective rather than that of the company, as a whole.  When this happens, it can lead to overloading people to the point where teamwork and performance is negatively affected.
Confusion around the purpose is what drives teams to create initiatives that may seem important to them but do nothing to help the company achieve its purpose.  The supply chain team implementing a new system for requisitioning material, the finance department changing the way expense reports are submitted, or process engineering installing robots on the shop floor are all examples of initiatives that may appear important to the teams driving them but can be unhelpful and disruptive to the teams working to produce products or serve customers.
What Problem Are You Solving?
When you get down to it, there are two basic jobs within an organization.  You either serve customers or help others serve customers.  Serving customers generally includes making products or delivering a service to end users – i.e., those things that generate revenue for the company.  Those who do this add value directly whereas everyone else delivers indirect value by helping those who deliver value solve problems and serve customers better.
Solving problems does not necessarily entail spending time and money on the latest technology or trend in the field.  It does entail spending time at gemba with those who provide value to understand their problems and find ways to help solve them.  Although it may involve implementing the latest technology, in many cases it does not.  It’s all about understanding and gaining agreement that a new project will solve problems and make life easier for those who provide value.  
When the purpose is clear to everyone in the organization, people will understand their roles and focus everything they do on improving the value the company, as a whole, provides.  Just as a company cannot hope to sell a product that customers are not interested in buying, a support function cannot hope to add value by selling a new initiative that its internal customers do not want.

Sunday, August 9, 2015

I Already Do Lean

The first step is transformation of the individual.  This transformation is discontinuous.  It comes from understanding of the system of profound knowledge.  The individual, transformed, will perceive new meaning to his life, events, to numbers, to interactions between people.” – W. Edwards Deming
Facing resistance when introducing lean to an organization is common – and even expected.  Especially early in the effort, people will look at lean as a passing fad or not applicable to what they do.  A less common but just as destructive type of resistance put up by some people is that they already to lean.  Dealing with this excuse for opting out of the effort requires taking the time to understand whether it stems from fear of looking ignorant by needing to learn something new or if it is ego driven.
First of all, nobody “does” lean naturally.  Although some people have more of an inclination toward lean thinking than others, everybody needs some level of learning or coaching to develop it more deeply.  The conventional western approach to business over the last century runs so counter to lean that a deep level of reprogramming is necessary for most people.  The problem for those leading the transformation, though, is to convince those who already do lean that, although they may apply components of it to their work, the big gains from lean come when it is understood and applied as a system.
Telling these people that they don’t understand lean will only get them to dig in more deeply and further block the willingness or the ability to learn.  Helping people open up to learning about lean requires spending a significant amount of time with them to learn what they do and how they work, and using a questioning approach to get them to realize that lean encompasses far more than eliminating waste, and that they have much more to learn to realize its true benefits.  It can take a lot of time to do this but, in a way, it is like going to gemba for personal transformation because driving change cannot be done without connecting to those with whom you are working to change.
Clues to Form the Questions
Spending time with those who already do lean will provide clues as to where to begin formulating the questions and the approach to drive learning.  Some of the actions and practices to look at during the time you spend with the person include:
  • Developing others is viewed as a high priority and there is clear evidence that it is actually being done;
  • People on the team the person leads have a clear line-of-sight to the company’s vision;
  • Interaction with team members is heavily oriented toward questioning to drive learning rather than advocacy and dictating orders;
  • Problems are addressed using a structured approach rather than jumping to the answer;
  • Decisions and actions are approached through the use of the Plan-Do-Study-Act (PDSA) cycle;
  • People are comfortable openly reporting and discussing problems;
  • There is a true connection to gemba that aids in setting team objectives and driving the type of support provided;
  • The processes team members use to achieve results is emphasized just as much – or more – than the results themselves;
  • The leader follows the same approach to addressing management or system-level problems as team members do for process problems;
  • Team performance is increasingly more dependent on the system than the skills or personality of the leader.
There are obviously other areas one could look to for clues for driving the conversations with someone who already thinks they know lean, but the above are a good place to start.  The key for the person driving the change is to go to gemba with the people being coached to learn what they do, how they do it, and the type of results they are achieving.  The more information you have, the better you can direct your coaching and conversations toward getting the person to slowly lower his or her defenses and open up to learning.
Transformation Can Happen
It is very satisfying to see someone have a light bulb moment with respect to lean.  It is at this point when transformation begins and learning greatly accelerates.  Although some people will never open themselves up enough to truly learn, I have found that, as long as I’m willing to take the time needed and continue to learn and develop myself, I can achieve some level of progress with most people.

Sunday, August 2, 2015

Innovation for the Sake of Innovation

Our whole company is founded on the principle that there is something very different that happens with one person, one computer.” – Steve Jobs
The May issue of Fortune Magazine included an article called, “Startups . . . Inside Giant Companies,” which presented the latest approach companies are using to drive innovation.  The article included examples of how companies like Coca-Cola, GE, and Tyco have implemented programs to drive innovation back into the organization.  As I read the article, I couldn’t help thinking here we go again – another management fad destined for the six-sigma scrap heap.
The author highlighted the systems companies are using to make their cultures more innovative by setting up internal startups to bring new ideas to market and rewarding people for new product ideas.  The approaches used by the companies include idea pitch parties, internal venture capital groups, and growth boards that award funding to the best ideas.  It was noted, for example, that GE now has 3,500 of its 300,000 employees now involved in the process and expects to increase that number to 35,000 by year-end.
Innovation Doesn’t Guarantee Success
The success of companies like Apple, Google, and Amazon has created an infatuation with innovation to the point of being distracting and detrimental to running the business.  Innovation is absolutely critical to the success of an organization, but it must be focused on improving customer service and addressing problems that interfere with achieving the vision.  Uncontrolled innovation leads to very creative ideas that distract people and result in square-peg results. 
The six-sigma thoughts that kept popping into my head while reading the article were related to the black-belt who grabs the glory for “solving” a problem while those who participated in the effort – and did much of the work – get little or no recognition.  Those dealing with the problems on a daily basis are also shown by management that they are not respected enough to be taught how to solve problems on their own and that it takes a special person to stay focused and find solutions.
I can’t help but think that the same thing will occur within many of the companies listed in the article.  As the people with the ideas are applauded and rewarded by leaders, those left running the business – and dealing with numerous problems on a daily basis – are largely ignored and shown that what they do is not important. 
Another potential distraction caused by the heavy focus the referenced companies place on innovation projects is that, by touting the number of innovation projects, people and teams will start putting forth weak and unclear ideas just to raise the numbers.  If company executives focus on the numbers, team leaders will start padding the numbers to make themselves look better.
Aligned Innovation
What truly innovative companies understand is that innovation must be ultimately focused on serving the customer.  On the production line, Toyota removes the doors after painting because it allows team members to move in and out of the car quickly and easily and keep up with takt time.  This is an innovation that addressed a problem of keeping up with increased demand.
Deming Electric Light QuoteWhen it comes to new product development, Apple seems to understand this concept better than pretty much anyone.  Following the purpose of one person, one computer, Apple seeks to understand its customers at a fundamental level rather than merely a product level.  Customers generally do not know what is possible, so merely asking them what they want will lead to information about the products and services they are currently receiving.  If asked what they wanted with personal computing, though, customers would have probably responded in terms of their laptops.  Focusing on the one person, one computer purpose, though, Apple dug deeper to understand problems people have every day that could be addressed by having a computer with them everywhere they go.
Whether process or product innovations, the key is to understand how they address problems for the internal or external customer.  Cool ideas mean nothing unless they help the address problems.  When the effort is controlled by focusing it on the company’s purpose, the creativity of people can be released in the right direction resulting in far greater success with new products, processes, and services.

Sunday, July 26, 2015

Breaking Down Silos

What we need to do is learn to work in the system, by which I mean that everybody, every team, every platform, every division, every component is there not for competitive profit or recognition, but for contribution to the system as a whole on a win-win basis.” – W. Edwards Deming
One of the most important aspects of lean thinking that is often underemphasized or ignored altogether is the catchball process.  Catchball is critical for calibrating the focus and efforts of everyone to assure that people don’t lose sight of what the organization is trying to achieve and how they contribute to its success.
Without catchball objectives tend to become fuzzy, the focus of people and teams turn inward, and teamwork breaks down.  Although not necessarily an easy process, the benefits associated with effective catchball are significant.  The discussions that occur throughout the process become the magnet that pulls the team together and focused on achieving the organization’s vision.
Vertical Communication
The most common application of catchball is a series of discussions that take place between leaders at different levels of the organization to assure objectives are understood, aligned, and achievable.
During catchball meetings, the leader assures that annual objectives are understood and accepted by those on his or her team.  In many cases, an objective will be a stretch for the person involved in the discussion, with the dual purpose of moving the organization forward and developing the person’s problem-solving abilities.  Particularly for a stretch objective, it is made clear that the leader will provide coaching throughout the effort.  This helps assure that the objective becomes the responsibility of the person to whom it is assigned as well as the leader doing the assigning.
The discussion is also an opportunity for the team member to express concerns about the objective, given other priorities for the team.  The leader must be ready to discuss priorities and resources during the conversation. 
Openly and sincerely discussing the specifics of an objective with the people and teams is vital to assure that those involved buy into the intention of the objective rather than approaching it as a check the box exercise.
Horizontal Communication
One of the less common applications of catchball is the discussion that takes place between functions to assure support and alignment of objectives is clear.  It is all too common for support functions to set objectives and determine priorities in a vacuum, and focus on what they consider to be important rather than what their internal customers need.  Given the fact that people want to do a good job and consider what they do to be important, this is perfectly understandable.  Establishing horizontal catchball discussions is vital way to assure that the energy and expertise of everyone, especially those in support functions, is directed toward the organization’s highest priorities.
When the company’s purpose is clear, it is easy to determine which areas support others.  In a company that manufactures products, for example, everyone’s work should be oriented toward production – meaning that the factory is the focus.  Even those developing new products need to understand the problems in the factory to assure that new designs are producible.  In an oil and gas operation, the focus is the producing asset; and in a service operation, it’s the point where the service is delivered to the customer.  The key to assuring that everyone is focused on the same priorities is being absolutely clear about the company’s purpose.  This helps people understand who they support and who supports them.
Horizontal catchball discussions focus on assuring that objectives are clear and that the needs between areas and functions are understood.  Although it is the responsibility of a support area to remain abreast of advancements within its area of expertise, efforts should be oriented toward meeting needs of those the area serves rather than forcing new and exciting developments on them.  With that said, however, as with external customers, internal customers don’t always know what is possible or what will help them improve, so the catchball discussions should include explaining new developments and understanding whether or not they can help address problems in the short- or long-term.
Assuring Catchball Success
Like much of lean thinking, catchball is simple but not easy.  The formal effort should take place over 2-3 months but, in reality, includes discussions that occur throughout the year.
The process runs counter to traditional management in that it puts just as much, if not more, of the responsibility for success on leaders.  Leaders must be closely connected to gemba to know the capabilities of the team, including the extent of stretch that they are able to accept.  It also requires the ability to coach effectively and continually help people understand the connection between the work of the team and the company’s long-term objectives.
By defining, standardizing, and continually improving the process, catchball can become an extremely valuable element of the annual planning effort.  The better the organization becomes at catchball, the more the energy and efforts of people becomes redirected from working against each other to actually uniting toward a common purpose that results in a win for everyone.

Sunday, July 19, 2015

Is it Too Easy to Fire People?

I am convinced that nothing we do is more important than hiring and developing people.  At the end of the day, you bet on people, not on strategies.” – Lawrence Bossidy
How effective is your hiring process?  How do you know? If it was difficult or impossible to fire people after you hired them, would it change your process?
If it was a given that every hire would stay with the company until retirement, most companies would likely change their hiring practices.  The fact that we are able to fire people fairly easily, though, allows us to worry less about the effectiveness of the process and distracts us from addressing the real issues that affect long-term performance.
The objective of the process should be to recruit and hire people who have the right skills, are a good fit with the company’s culture, continually learn and develop, meet or exceed performance expectations, and stay with the company until retirement.  When this is understood, people begin to see that, whenever someone is fired or quits, the process has failed and the effort to find a replacement is rework.  The time and cost associated with dismissing an employee, and recruiting, interviewing, orienting, and training a new one is waste and would not have occurred if we hired correctly in the first place. 
Although a rather blunt way of looking at the issue, a company that truly wants to be the best has to hire the best; and “best” means those who meet the objectives described above.  Hiring is one of the most critical processes for a company, yet it is rarely taken as seriously as many other less critical processes.
Elements of Effective Hiring
The elements of an effective hiring process that are often missing include the following:
  1. Assuring the Hire is Necessary: Although it is pretty common in most companies to justify the necessity of a new hire, it tends to stop there.  Fiscal responsibility should drive companies to always question whether hiring a new employee is necessary, but the emphasis on reducing headcount should coincide with tension to improve processes to the point where replacements are not always needed.  The focus should be improvements first, and hiring second.
  2. Finding the Right Person: Wanting to hire a new employee quickly should never drive people to shortcut the need to find the right person.  It takes time to screen candidates effectively which, unfortunately, often leads companies to become impatient and hire the wrong person.  Concern about the extra workload caused by a vacancy should be dealt with accordingly (e.g., contract labor or temporarily shifting responsibilities), and any concern about losing a position by not filling it quickly is irresponsible and potentially destructive.
  3. Training and Developing People: Training and developing people once they are hired helps assure they succeed in their jobs, grow and learn, feel respected, and reduces the chance they will leave for a job at another company. Although many companies talk about the importance of training and development, very few actually do it well.  Like any critical process, developing employees should have clear objectives, a defined method, effective measures, and the proper focus to assure it happens.
  4. Measuring Effectiveness of the Process: Because the hiring process is so critical to the success of the organization, it is important to measure its performance and use the results to drive improvement. Some of the events that should trigger problem-solving include firings, resignations, and the need to hire leaders from the outside. The measure should be visible to everyone involved in the process so its objectives are clear and performance is visible.
When the culture is driven by a continual improvement mindset, hiring for any reason except replacing a retiree or to staff up for growth signifies a breakdown in the process.  If it were impossible – or extremely difficult to fire people – this concept would be much easier to accept.  As long as it remains easy to fire people, though, there will be little tension to improve the hiring process, and successfully driving a continual improvement culture within the company will remain elusive.