Tuesday, March 13, 2018

Lean by Playing One Point At-a-Time



"One thing that makes Chris [Evert] such a great champion, is that she doesn't play games or sets, she plays points."Billie Jean King

I've played tennis most of my life and learned many years ago about the importance of the mental aspect of the game. One thing that particularly impressed me early on was the ability of Chris Evert to maintain an intense level of focus regardless of the score. Whether she was winning handily or losing badly, her expression and focus did not seem to waver. This ability helped her come from behind on many occasions and beat her opponent, even when it appeared that she had no chance of winning. Her focus was never the match, set or game, but the point. Her strategy was based on the idea that points mattered, not the score, and by focusing on winning each point, the matches would take care of themselves.

I didn't know it at the time but this greatly helped me to understand lean thinking. Keeping the focus on what's happening right now, whether a machined part, assembly, customer interaction, or drill bit location, helps drive improvement by immediately seeing when something goes wrong. When we become distracted by the overall score – the monthly or annual budget – we miss the little things that happen every day and every hour that add up to poor long-term performance.

At its most basic level, lean involves setting standards and addressing the problems that interfere with meeting the standards. This means that, to make lean work, we must: (1) have standards; and (2) provide an easy way to know when the standards are not met. It is a simple concept but is very difficult to put into practice. Company culture, leadership systems, and human behavior often force people to worry about the big picture and forget that the results consist of many small processes and interactions. As a consequence, people ignore the small problems and fail to see that spending 5 minutes looking for a tool, for example, has an impact on missing a monthly or annual production target.

It Starts with Leaders

For a variety of reasons, leaders tend to focus on the big picture and ignore the small problems. What is often forgotten, however, is that the big picture includes creating an environment where everybody identifies and addresses problems every day. By showing concern only about the big gaps in performance, leaders are telling people that the small things don't matter. As an example, although missing a bolt to complete a job can be a headache for a person in the factory, a leader may decide that it is not significant enough to spend time helping the person understand the cause and develop a countermeasure for the next job. The message that some problems are important to fix while others are not sends mixed messages about the importance of problem-solving. In effect, the leader is losing points while thinking about the match.

Changing the culture requires helping people understand that every instance where a standard is not met is a problem and needs to be resolved. Doing this requires spending time at gemba to see when it happens, helping people recognize the small problems that happen (or validating that the problems are important enough to address), and coaching people to effectively solve problems. The objective is to get people solving the problems they face every day.

Changing the Daily or Weekly Standup

Another way to help change the way people think about problems is through the daily or weekly standup meetings. A traditional standup meeting reviews how the team performed since the last meeting, e.g., what problems interfered with achieving the plan discussed in the previous day's meeting. When the discussion is distracted by the annual or monthly budget rather than what happened yesterday, important information is missed. Achieving the budget is obviously important but since meeting standards is the way to achieve the budget, the focus needs to be on what got in the way of meeting standards. When the focus is the budget, the team misses a critical objective of lean: solving problems and performing better every day. In tennis, the standards include things like the stroke, footwork, and ball placement. It is these things that enable a player to win points through an intense focus on doing them correctly and making adjustments when problems happen rather than looking at the score. In work, the standards and associated instructions are the stroke, footwork, and ball placement.

When a company's culture suffers from an attention deficit disorder (a common condition in many organizations) its inability to see the small problems interferes with the daily problem-solving required to continually improve and create a system capable of meeting the budget. By allowing this to continue – i.e., worrying more about the score than the point or the shot – the gap to the budget will continue to grow because the problems are not being addressed. It is also far easier to address the small problems every day than to attempt to take on the entire gap between actual performance and the annual budget.

Focus on the Points

University of Alabama football coach Nick Saban once said, "the process is really what you have to do day in and day out to be successful." In lean terms, he's referring to understanding and continually focusing on the standards. When the focus is results rather than the work that produces the results, standards become meaningless, problems become too big to address, and the gap continues to grow. Besides the fact that it is far easier to identify and correct gaps to meeting a standard than missing a monthly production target, the more people address problems – regardless of how small – the better they get at problem-solving. I've learned the hard way many years ago that my chances of coming back from a 5-1 deficit are much better when I focus on the next point than worrying about winning the next six games.

Wednesday, February 14, 2018

Do People Feel Comfortable Showing Problems?


One of the most common obstacles to successfully deploying lean is failure to appreciate the level of transformation required in behaviors and systems. Far too often, companies attempt to implement a variety of lean tools on top of traditional systems and behaviors and are disappointed with the results.


Among the many behaviors that require transformation for lean to work effectively is the need to make problems visible. Since lean is heavily focused on continually comparing actual results to standards and addressing the issues that cause gaps between the two, it can only work when problems are highlighted quickly and honestly.


Is it Really That Difficult?


Assuring problems are visible makes perfect sense and is something many organizations mistakenly believe they already do. For a variety of reasons, showing problems is not something that does not come naturally to many people. It is more natural to hide – or at least not openly display – problems with the hope they can be resolved before being discovered.


It is important to understand the reasons people hide problems and to realize that transformation is required in order to make it okay – and even an expectation – to show problems quickly and clearly.


Why do we Hide Problems?


Although there are a number of reasons that people don't feel comfortable showing their problems, a few tend to show up more than others. The first is a fear of looking incompetent or unable to do the job effectively. Whether the result of a highly competitive culture, overreaction of leaders to problems in the past, or something built into the person's emotional makeup, some people will not feel comfortable openly showing problems. Even when internal competition is not openly encouraged, a history of promoting people who hide problems or twist the story to make it appear that things are under control can cement the idea that it is not okay to openly discuss problems.


Another cause of hiding problems is the fear of getting "help" from people who don't understand what's really happening in the workplace. Some leaders feel that it is important to have all the answers and will regularly offer solutions to the problems without having all the facts. When the leader is disconnected from gemba, this leads to frustration in team members because they will feel compelled to follow the proposed solutions even when they know they won't work.


It is perfectly normal for people to want to show that processes are running smoothly and things are under control.  Because of this, it is up to the company's leaders to continually instill the idea that highlighting problems is not only acceptable but expected within the organization.  This means that there should never be negative consequences for making a problem visible.  On the contrary, it should be made clear to everyone that hiding problems or failing to take action to address them is an unacceptable behavior.


As leaders are able to create the culture that it is okay to make problems visible, there are three common ways to help people show problems quickly and clearly: alarms or andons, dashboards, and meetings.


Andons


An andon signal is a way to immediately show that some aspect of work is not meeting standard. Andons are perhaps the most effective way to show problems because they are designed to highlight a problem immediately and at the point where it happens. Examples include ropes or buttons in the factory where people can signal a problem as it happens, or sensors that detect problems immediately (e.g., retrieving components for an assembly in the incorrect sequence by sounding an alarm when the operator reaches into an incorrect bin).


The keys to making an andon successful include having clear standards, enabling quick notification, providing immediate help, and recording the problems for longer-term problem-solving.


Dashboards


A key objective of a dashboard for an area or process is to clearly and objectively show the gaps between expected and actual results.  Hiding the gaps or continually putting a positive spin on how things are going misses the opportunity to align team members on what's important, and the problems that require attention.


Posting charts that track what's critical for an area help keep people focused on how a process is expected to perform and, the more sensitive the chart, the more quickly action can be taken when a gap occurs.


Dashboards become ineffective when too much data is displayed or the charts lack simplicity. Think how difficult driving would be if the dashboard in your car contained 10 or 12 gages with a variety of information on each.  The same applies to a dashboard for a work area.  Keeping it simple and clearly connected to company or system targets is a key to assuring it is effective.


It is also critical to keep dashboards easy to maintain. Too often, people create multi-color, three-dimensional charts that show too much data, making the charts become nothing more than eye candy.  The purpose of a chart is to highlight problems, not prove how adept someone is at creating graphs.


Meetings


Many companies waste a lot of time in meetings talking about what is going well.  Performance is reviewed and discussed – sometimes in excruciating depth – even when processes are on-target.  People learn to dread meetings and use the time to catch up on email, Instagram, or the latest headlines on their phones.

The more daily and weekly meetings are focused on gaps - existing and potential - the more engaged people will be.  The dashboards should drive the meetings and, the better the dashboards, the quicker people can zero in on the gaps and talk about what is truly important.

When teams do this well, they begin to take advantage of the collective knowledge of the team by focusing on improving performance.  If they dance around the real issues by ignoring the gaps and continually putting a positive spin on how things are going, they miss opportunities to build teamwork and address the real problems.

The Problems Are There - Why Not Look at Them

Every organization has problems, and a key determinant of success is how well the problems are addressed.  Openly showing the problems is the first step to resolving them.  Getting to this point, however, often requires shifting behavior to make it okay – even expected – to look for the gaps.

Sunday, February 4, 2018

Stop Judging - Start Leading


Much has been written over the years about the destructive effects of the traditional performance rating systems used by so many organizations. It's a process that most people do not like but nevertheless continues to be an important part of the HR systems of many organizations. In a study conducted by CEB Global (now Gartner), 21% of nearly 300 companies surveyed worldwide have dropped or are planning to drop the practice of assigning performance ratings to employees. If this is representative of business in general, it means a vast majority of companies still use ratings.

The idea of eliminating ratings has gained increased attention in recent years but many appear to be apprehensive of dropping the process because they don't know what to do instead to provide feedback to improve performance. According to the CEB Global study, though, employee performance has actually dropped in those companies that have eliminated ratings. My fear with reporting study results like this is that people – especially those who favor rating employees – will see it as proof that the process needs to continue. Upon further reading, however, it is noted that it is management practices and leadership skills that cause the problem, not the elimination of the ratings process itself.

There are many compelling reasons to eliminate performance ratings that greatly outweigh any that seem to support continuing the practice. The reasons are not new but, as long as they continue to be ignored, each significantly interferes with transformation and sustained levels of improvement. Like any process or system, we should never look at the performance rating system in isolation of organizational performance. Too many managers look at the performance review process as if it has value by itself and keep it disconnected from where the organization is going or what it is trying to accomplish.

Problems with Performance Ratings


There are several problems with assigning ratings to people that hurt, rather than help, performance. These problems have been discussed and written about for many years but, due to the continued popularity of attempting to rate individual performance, need to be revisited every now and then.
  1. Manager Responsibilities Ignored – Ratings put the responsibility for development completely on the team member rather than the leader, who has an obligation to provide coaching to employees. We somehow have an assumption in business that becoming a manager automatically means one can give proper and effective feedback to team members, which is not the case;
  2. Inconsistency – Since the ratings are assigned by people, there is a level of inconsistency that comes with human intervention in the process. Even when there is a larger calibration session consisting of a team of leaders that review the numbers and force fit ratings into a normal distribution, there is inconsistency in the ratings assigned and feedback given. Like any type of meeting, group calibration sessions tend to be dominated by the loudest and most aggressive leaders. Another problem is that many of those who participate in the sessions have little knowledge of how most of the individuals being assessed performed – or even what they do;
  3. Unclear Expectations – A significant problem in many organizations is the lack of clear expectations for people. There is often an attempt to assign objectives at the beginning of the year but there is an inconsistent understanding of the purpose and expected result of the objectives, and they tend to ignore the person's everyday responsibilities which can easily interfere with larger objectives.;
  4. Conflicting Objectives - People are generally smart enough to meet objectives or at least provide some evidence to show they did whether or not it actually helped the organization. Objectives are often assigned in a vacuum, i.e., supply chain reducing price of incoming materials, customer service increasing the number of customer calls handled, etc., and in most organizations, there is little effort to assure they are aligned and truly focused on achieving the organization's purpose.
  5. Lack of Systems Thinking – Most leaders fail to appreciate how much the overall system affects the performance of the organization, and that it is their responsibility to develop and maintain the system. If they did understand, they would never put so much effort on trying to "fix" the part of the organization that accounts for less than 3-4% of the company's performance. Performance ratings assign blame to people who are likely attempting to work in a flawed system, and those who receive higher ratings are often working outside of the system, something that should never be encouraged. I once worked for a CEO who gave each of us on the management team a mirror and told us whenever we had an employee who underperformed to look in the mirror to see who is truly responsible for the underperformance.
FIND THE CAUSE AND FIX THE ISSUE


The CEB report, along with several other studies on rating systems and performance in general, point to leadership issues as the main cause of performance problems. When a new employee is hired, that person is generally enthusiastic on his or her first days with the organization. When that person starts to "underperform" or show attitude problems, though, rather than punish or threaten the person with a poor rating, we should try to figure out what has changed. In most cases, we will discover that it is the person in the mirror who is responsible for the underperformance.

It comes down to helping leaders understand that their job is to coach and develop rather than judge. Spending time clarifying this to leaders and helping them learn how to do it would be a far better use of everybody's time than assigning numbers to people.

Monday, January 29, 2018

We Don't Make Cars: Applying Lean to Other Industries


People don't go to Toyota to work, they go there to think"Taiichi Ohno

Although much of what we now call lean has been practiced by Toyota and its suppliers for decades, most of the world began to learn about it in the 1990s with books like The Machine that Changed the World and Lean Thinking. It has been more than 25 years since then and, although companies in a variety of industries are well into their lean journeys and showing positive results, there are still many people who have trouble thinking beyond lean as a strategy for high-volume or automotive manufacturing.

As someone who has worked in a variety of industries, I have encountered difficulties applying lean thinking in certain situations, but it was due more to cultural reasons than industry differences. Regardless of the industry, if the organization has an aim and uses processes to achieve that aim – and they all do – lean thinking applies. Lean is about continually thinking, learning, and getting better about what you do; not about producing cars. If your processes are not perfect, you don't already know everything there is to know about your business, or change regularly occurs in your organization or industry, then lean can help.

During my early days in oil and gas, I got a lot of pushback about the suitability of lean to the industry. When I heard the "we don't make cars" argument, my response was usually if Toyota produced oil & gas and we made cars, we would say lean applies only to oil and gas. The same goes for any industry.

It's Always Easier Somewhere Else

It is common to talk to people in various industries who believe that lean applies easily to other industries but is much more difficult in their own. Even within an industry, I've met people who believe their own circumstances are so unique that, even though other organizations or areas may apply lean thinking fairly successfully, it does not fit their own situation.

Getting people past the notion that lean will not work in an organization or industry requires continual coaching, demonstration, and a lot of patience. It also requires educating people about the basis for lean and how it drives learning and improvement. The key is to get people to understand lean beyond the tools so they will start to see where they have gaps in performance, knowledge, and learning. A tools-focus in lean, something that is far too common, leads people to google things like 5S, value stream mapping, or SMED, and only find examples of application to Toyota or other high-volume manufacturing situations. Seeing examples like this tends to cement the idea that the practice is unsuited to their own situation.

The Lean System

Lean is about thinking and learning, and if a business is experiencing problems of any kind, there is room to learn. The basic steps to drive lean are shown below. The key to success is to use the steps to learn by doing, which requires clarity on the expected result of each decision, action, and process, and using the actual results to see where things did or did not provide results as expected.

Lean is a system comprised of several elements that work together to drive learning and improvement and, like any system, if you leave out one or more components, it won't work.

1. PURPOSE: Every organization must understand its purpose to have any chance of sustaining success. The purpose, consisting of why the company exists (the mission) and where it is headed (the vision) must drive everything it does. The key is to make it clear, a stretch (difficult, but not impossible), inspiring, and focused on providing value.

2. BUSINESS NEEDS: Visions tend to describe the future in general terms like industry-leading, most respected, improve society, etc. This is okay because what is considered industry-leading today is not necessarily what it will mean 5-10 years from now and you don't want a specific target to mislead the organization. This element of lean thinking includes the 3-5 year objectives that make the vision much more concrete. Although many industrial companies often identify the gaps in terms of safety, quality, delivery, cost, and people development (SQDCP), it is important to tailor the objectives to the organization's needs. Basically, the objectives define how the organization needs to perform in the next 3-5 years in order to remain on-track to the vision.

Also included in this element is the one-year plan that gets even more specific regarding what needs to happen in the current year to remain on-track to the 3-5 year objectives. The one-year plan identifies the current year SQDCP targets, which defines how the organization needs to perform this year given its current processes and systems (assuming that regular problem-solving will be required to deal with the daily problems), as well as the 2-3 areas where a step-change in performance is required to stay on track to the 3-5 year objectives (i.e., kaizen/breakthrough problem-solving). Using an oil and gas producer, a current year target could be production of 25,000 barrels of oil produced per day (possible with current processes and systems), while a breakthrough could be the need to reduce cost per barrel from $24 to $18 within 3 years (which would require a step-change in processes or systems).

3. STANDARDS: Once the gaps and performance targets are clear, it is necessary to identify the standards that need to be met in line with business needs. An example of standards within an oil and gas operation could be that meeting a production target requires an offshore platform to operate at 95% reliability, which, in turn, requires a maintenance technician to change a pump filter in 24 minutes. In another example, a coffee shop could determine that, to meet customer requirements, all customers must receive their coffee within 4 minutes of walking into the shop, requiring the person taking the order to select any product on the order screen within 2 seconds. Setting standards requires a clear understanding of the business and continual improvement.

4. STANDARD WORK: Standard work consists of the instructions that, if followed, will enable the standards to be met. In the examples above, instructions provide a step-by-step description of the work to be done to change the filter in 24 minutes or serve the customer within 4 minutes. Two key points about standard work are (1) the instructions should be created and regularly improved by the people who actually do the work; and (2) the instructions must be clear and simple to follow. It is also important that the standard work is regarded as the best known way to perform the work today, and must be followed until a better way is discovered and the instructions are changed.

5. ACTUAL PERFORMANCE: Learning requires clearly and continually measuring the actual performance to understand where the gaps between performance and the standards exist. If actual performance meets the standards – the pump filter is changed in 24 minutes – then the thinking returns to step 2 to continually assure that business has not changed and that the standards still meet the business or customer needs.

6. IDENTIFY PROBLEMS/GAPS: The real power of lean thinking occurs when actual performance does not meet standards because this is where continual improvement truly happens. For the business to improve, we need people to quickly speak up when problems occur. Whether through an andon signal (lights and music that immediately grab attention) or dashboards that are updated frequently, the key is to find ways to make all problems highlighted quickly. To assure this happens, leaders need to encourage and recognize team members for identifying problems quickly. Taking it one step further, making problems visible should be an expectation of every person in the organization.

7. RESOLVE PROBLEMS: Once problems are identified – i.e., actual performance does not meet the standard – there needs to be a consistent way to understand and resolve the gaps. Rather than calling on black belts to come in and lead the process, lean requires that everyone become problem-solvers. Those closest to the work need to be actively involved in closing the gaps and, to make this happen, leaders need to teach and coach team members how to do it. In many cases, problem-solving leads to changing standards and/or standard work to ensure that improvements stick.

8. DO IT AGAIN: The lean system requires that the process never ends, so the team needs to continue to review business needs, set and revise standards, identify gaps in performance, and solve problems.

Not as Easy as it Sounds

Although following the lean system as described above appears fairly simple and straightforward, it is anything but easy. Each step requires transformation in leadership, thinking, and culture to be effective. Two areas that generally require significant change include transforming managers into coaches and making a culture where it is safe – and even expected – to make problems visible.

The all-too-common approach of focusing on the tools will make the application of lean to other industries difficult – if not impossible. Focusing on the philosophy and transformation in the way people think and approach the business, however, will make the application to other industries far easier and significantly more successful.

Wednesday, January 3, 2018

The Lean Journey Starts with Appreciating the Business as a System

“There is not a day I don’t think about what Dr. Deming meant to us. Deming is the core of our management.”    - Shoichiro Toyoda

According to W. Edwards Deming, the first thing he did when meeting with Japanese business leaders in 1950 was draw a diagram of a business as a system on the board (shown below from Out of the Crisis).  It was a simple diagram – almost too simple for many to understand its profound significance.  So, what is it about this diagram that literally changed the world and helped some organizations develop competitive advantages that they were able to sustain for many years?


At its most basic level, the objective of the diagram is to show that every business is a system and needs to be managed as such.  When most people hear this, they nod their heads in agreement as if it is nothing new.  After looking at the way many organizations are run, however, it becomes obvious that the concept is still not well understood. 

When viewing a business as a system, it becomes clearer which common business practices actually interfere with long-term success.  In fact, the more one learns about systems thinking, the more obvious it becomes that the chance of achieving any level of long-term success without it is very small.

Every System Must Have a Clear Purpose

Every business exists to achieve an aim and uses a series of handoffs, processes, and subsystems to achieve that aim.  Sounds simple enough but in many – possibly even most – companies, this is forgotten or never truly appreciated.  In far too many organizations, the aim is not clear, not constant, or too heavily focused on monetary gains.  Without a clearly stated and unchanging purpose that is focused on value and meaningful to everyone, people will define it on their own, leading to conflicts, waste, and significant losses.  Deming went as far as to say that without a purpose, there is no system.

I consider the aim to be comprised of the mission (why the organization exists) and vision (where it is headed).  In practice, this means that the organization must stay true to its mission while assuring all targets, objectives, and activities support achieving the vision.  In the most advanced lean thinking organizations, this is much more obvious than in other companies.

The Interactions Must be Clear and Continually Improve

In addition to assuring the aim is clear to everyone in the organization, the interactions between each person and team needs to be clear and continually improved.  Organizations operate in a highly complex manner and gaining an understanding of the interactions and how they create value for the customer is a difficult but necessary task. 

A critical point about systems is that every person in the organization must understand how the work they do contributes to the aim.  This means, for example, that a Maintenance Technician understands his or her role is to assure machines are capable of producing parts of the right quality when needed.  To do that requires high reliability, fast turnaround for maintenance and repairs, and helping the machinists understand how to perform routine maintenance activities quickly and effectively.  Managers have the responsibility to help team members understand their work to this level of detail, including developing an understanding of whom they support in the overall system.

Standards must be established to clarify the work and the interactions and clearly communicate to people what is needed to assure materials and information move through the system to produce value consistently.  Whenever the standards are not met, problem-solving must be done to understand why and to make corrections.

Leaders Must Understand the Level of Complexity

Appreciating systems goes beyond understanding the interactions that take place throughout the organization.  It includes the understanding that the results of actions are not always simple and easy to determine.  For example, forcing the supply chain team to reduce the cost of incoming materials can result in increasing overall costs for the company, even though logic would dictate otherwise.

Organizations are complex, and the larger the organization, the more complex it becomes to understand the effect of a decision or action.  Large-scale changes can, and often do, have damaging effects that are difficult to predict beforehand, and are not easy to understand afterwards.  All changes must be accompanied by an expectation of the effect on the organization, and results must be continually checked against the expectations to drive learning and help improve understanding of the system.

Fragmented Thinking vs Systems Thinking

The more one develops an understanding of systems thinking, the clearer it becomes that many commonly accepted business practices hamper, rather than help, improved performance.  An example is the heavy focus placed on individual performance by most organizations. Systems thinking naturally puts the accountability for performance on the system to a much greater extent than on the individual.  Deming used to say that 94% of the problems a company faces come from the system (and are therefore management’s responsibility) and 6% are related to the people in the system.  The time and emphasis generally put into a typical performance review system, however, shows that many of us believe the exact opposite.  We rate, rank, and hold people across the organization responsible for performance in a system that is most likely flawed.  In other words, rather than focus our efforts on improving the system when performance is below expectations, we assume that putting pressure on the individual will improve results, even though the person may have little or no authority to do anything other than try harder, go around the system, or focus on making it look like improvement is occurring whether it actually is.

When traditional performance reviews are combined with the process of setting objectives, the result is often optimization of one team or individual rather than the system or the organization’s overall aim.  For example, a finance team that focuses on improving the closing process by requiring extra work from the operations team could result in taking time away from producing products or fixing problems and, although the books are closed faster each month, overall performance may suffer.

The typical organization chart is another example that shows the popularity of fragmented thinking.  The most commonly used layout for an organization chart shows little more than who has power.  Using a chart that is organized by the system (e.g., names and titles on a system diagram), however, would show where people fit in the value stream, as well as the relationships between internal customers and suppliers.  It would be much more valuable to helping people understanding their jobs than a chart that shows who the boss of whom.

These are simple examples that demonstrate the destructive effects of leaders who do not understand how systems work.  When the system is not understood and actively managed, priorities are unclear, causing continual conflict between people and teams, and effectively destroying the system.

Managers are Responsible to Create and Improve the System

When leaders come to the realization that creating, managing, and improving the system is their responsibility, the organization will begin to transform.  The focus moves to the most important parts of the organization and people start truly working together, rather than against each other, to improve performance.

Although appreciation for a system is only one of the four elements of what Deming referred to as his System of Profound Knowledge, it is something that helps provide context for the others – theory of knowledge, knowledge of variation, and psychology – and the understanding that they must all be present and work together to drive transformation.

Tuesday, December 19, 2017

Why Lean Fails

Why do so many organizations give up on lean even after experiencing initial success with the effort? There are several examples of companies in various industries that experienced sustained success with lean, but these examples seem to be few and far between when compared to the large number of companies that attempt it and fail.

To be clear, lean doesn't fail . . . it's the transformation that fails. While there are many reasons for the failure, there are a few that seem to be common across various organizations. Regardless of which one or more of these reasons apply, correcting them is possible only when leaders begin to develop a deep understanding of lean and realize that the responsibility for the transformation rests squarely on their shoulders rather than something that can be delegated to lower levels in the organization.

Although the premise of lean is simple, integrating it into an organization is highly complex, and the larger the organization the more complex it becomes. Lean thinking is a system that requires understanding how the elements come together to drive continual improvement in support of the organization’s aim. The big gains that some organizations have been able to achieve with lean are only possible after fundamentally transforming the way people think, lead, and approach problems.

The list below is far from comprehensive but is meant to stimulate thinking and reflection to understand the reasons for failure and to help move toward fundamentally changing the culture to enable it to increase and sustain the rate of improvement.
  1. Fail to understand the level of transformation required: Far too often, organizations attempt to lay lean on top of a traditional leadership system and expect things the change. It is a simple fact that nothing will change unless the leadership system changes, and failing to understand this will lead to frustration and disappointment in the effort. This is often the main reason behind what appears to be a lack of commitment by the organization’s leaders. People cannot commit to something they do not understand.
  2. Focus on the home runs: Far too many people read about the Toyota and its rise from virtual ashes in the 1940s to become the most successful automaker in terms of sales, profit, and market capitalization. When reading an article about it or hearing someone tell the Toyota story, however, misses the point that it was the decades of small, continual improvements that led to significant step changes in performance. Although there are many examples of large innovative improvements at Toyota and other lean thinking companies, they happen because of the collective change in thinking that occurs through a focus on small continual improvements and daily problem-solving.
  3. Focusing on financial benefits only: After experiencing a few early improvements, it is very common for leaders to become focused on the financial benefits of the effort and change their focus from learning to cost savings. When this happens, lean becomes a set of tools rather than a system of continual improvement. SQDC (safety-quality-delivery-cost) is replaced by C, and understanding the true meaning of improvement is lost. As small improvements and learning is virtually ignored and the big improvements (the home runs mentioned above) are celebrated, people will do what it takes to show big gains, whether real or fabricated, and any early success with lean will break down and die.
  4. Focus on the tools rather than the thinking: Without a deep understanding of lean as a system and the fundamental reasons for its success, it is not possible to think beyond the tools. The tools are easy to understand while the theory behind lean is not. Leaders, especially in the west, are much more interested in things that are concrete, practical, provide quick results, and are easy to explain than organizational theory, psychology, learning, and systems thinking.
  5. Lack of systems thinking: Unless leaders understand the complexity of the organization’s system, including how the subsystems work together to drive performance, people and teams will continually compete with one other resulting in continual performance problems and increasing sub-optimization. One of the most critical responsibilities of leaders is to create and continually improve the organization’s system to enable it to achieve its purpose. This includes helping everyone understand clearly how the work they do supports the achievement of organizational objectives.
  6. Lack of patience: If you are looking for quick results, lean is probably not the way to do it. As mentioned above, lean requires a shift in the way people think, lead, and perform work, and it takes time – a lot of time – to make it happen. Although results will be seen along the way, there will be gaps that make it seem like nothing is happening. W. Edwards Deming once said that transformation is discontinuous, so it is important to understand that there will be many instances of two steps forward and one step back. The key is to stick with it and remain constant in the purpose and the transformation.
When any of the above characteristics are present, people who are against lean will gain ammunition to bury the effort. It is very easy for the people who feel threatened by lean to plant seeds of doubt in those who are on-board with the change. Getting past this initial stage of the transformation requires regular reflection and continual learning by leaders to see the signs and address them as they happen.

Thursday, November 23, 2017

The Objective of Problem-Solving is Not Solving the Problem

"The ability to learn faster than competitors may be the only sustainable competitive advantage" - Arie de Geus

One of the misconceptions that interferes with an organization's transformation toward lean thinking deals with the objective of problem-solving. People tend to focus problem-solving activities mostly on the business result, or solving the problem, and ignore whether or not any learning occurred while doing the exercise.  What many fail to understand is, when the focus of problem-solving is results, very little learning takes place, but when the focus is learning, more significant and sustainable results will follow.

It is strange to think that the main objective of problem-solving is not solving the problem, but the more one understands organizations and behavior, the clearer it becomes that sustainable improvement can only occur through continual team learning. When it is obvious that the only concern of leaders in a problem-solving effort is results, people will respond by showing positive results whether or not they are real or sustainable. Problem-solving will become nothing more than an exercise to get to the countermeasure as quickly as possible.

The Benefits of Learning

Some of the benefits of emphasizing learning during problem-solving include:

Improved understanding of systems and processes When done correctly, problem-solving requires looking at the issue from a number of perspectives to better understand how to approach it. It also involves understanding and proving the connections between potential causes and effects and, although it takes time to do this, it leads to increased understanding of the processes and systems that contributed to the issue. This learning leads to better problem-solving and greater improvements in the future – something that cannot occur without learning.

Improved understanding of the problem-solving process The more a team solves problems, the better everyone involved learns the process.  Rather than merely following the steps in a process, people start to learn why the steps are important, how they relate to the quality of the output, and where changes can be made to make the process better and faster.  When the focus is on getting to the countermeasure, the only learning that takes place is how to make an A3 look good. No useful learning will occur as people jump to the countermeasure and backfill the A3 to make it appear that the process was followed.

Learning stays with the team rather than with a single person The A3 (or whatever document is used in the process) from formal problem-solving is captured and maintained as a record of how the problem was defined, broken down, how the root cause was determined, the countermeasures selected, and the results.  In this way, when one or more people leave the team, the learning is maintained through the records and the countermeasures captured in standards related to the process. Also, the increased knowledge and understanding of the process throughout the team that was gained as part of the effort will not go away when one or two people leave.

Motivation increases as people learn and grow For most people, learning and contributing to improvement makes the work they do more interesting. When learning is the focus of problem-solving, the more energized people become and the more interested they are in driving improvements into the work they do.

Leaders Must Learn Also

Emphasizing learning rather than results takes patience and a belief that it will eventually lead to far greater and sustainable results.  Without this transformation, people will see that results are all that matters and respond accordingly. Rather than generate real results based on scientific analysis and concrete actions, however, they will likely be achieved quickly and be superficial and unsustainable. Problems will become hidden and not given the attention they require.