Did Ohno Miss Something?

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“The basis of the Toyota production system is the absolute elimination of waste.” – Taiichi Ohno

Every now and then, I like to go back and reread books I’ve read in the past to be reminded of important points that I’ve either forgotten or just missed the first time around.  This is particularly true of books by, or related to W. Edwards Deming, Peter Drucker, and Taiichi Ohno.  Recently, I reread Ohno’s The Toyota Production System: Beyond Large-Scale Production.  Each time I read this book, I get a better understanding of the thinking behind the development of TPS, including how I can address a number of organizational problems I face that I’ve been unable to resolve.

This time around, though, there was one point that kept coming up and I couldn’t get past.  Throughout the book, Ohno repeats the idea the TPS is completely about eliminating waste.  The issue I had with this is that, in my experience, people who focus lean efforts only on waste tend to get overly focused on the tools and end up working a number of disconnected problems that result in little sustained improvement.

A more subtle message in the book that I don’t believe gets as much attention as the elimination of waste is the challenge that Kiichiro Toyoda put forth regarding the need to “catch up with America in three years.”  Ohno writes very fondly about Toyoda, including how important he was to Japanese industry and the development of TPS.  He credits Toyoda’s statement as being inspirational, but rather than being the drive for the development of TPS, translates it into a call for the elimination of waste.

So Much More than Waste

Perhaps Ohno’s view of waste is more complex than most people can truly comprehend, but I think that the message of using lean to reduce waste has gotten so watered down that most companies fail to achieve the big gains that a true transformation can achieve.

When the focus is waste reduction, lean can easily become a toolbox to reduce costs.  In my experience, every organization that turns its lean effort toward cost reduction fails to sustain the improvements and eventually drops the effort when something else draws its attention.

I contend that the focus of lean should be the company’s vision.  This assumes that the organization has a vision and that it’s truly inspirational.  In Toyota’s case, the vision was to catch up with America.  Other companies that have been successful with lean tend to have equally inspirational vision statements.

Deming said that a company’s vision is a value judgement and must include plans for the future.  This means that it includes much more than profits or share price.  It must relate to providing better and better value to the company’s stakeholders, including customers, employees, suppliers, the community, and shareholders.  It is the focus on improving the value to all stakeholders to a level never before achieved (or even conceived) that provides inspiration. 

When the organization has a clear statement that inspires people, lean becomes the vehicle to make it happen.  It provides a method for everyone in the organization to align efforts and work together to drive sustained and never-ending improvement.  The effort begins with the vision and translates it into more and more detail as it works through the company’s long-term objectives, annual plans, dashboards, meeting rhythm, and daily problem-solving. 

It is through the alignment of these efforts, beginning with a clear and inspirational vision, that lean enables innovation and an obsessive focus on closing the gaps that are truly important to the organization.  And when lean efforts are anchored by the vision, people will not be distracted by the numerous management fads that can derail the effort.

What Did Ohno Mean?

We’ll never get inside of Ohno’s head to understand whether or not the vision of catching up to America in three years is what truly inspired the development of TPS.  It is only my interpretation that the vision is what leads to sustained gains and what drives lean at Toyota.  Perhaps I’ll see this more clearly the next time I read the book . . . or perhaps I’ll find something else I completely missed this time.

Is it Better to Work on Strengths or Weaknesses?

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It takes far less energy to move from first-rate performance to excellence than it does to move from incompetence to mediocrity. – Peter Drucker

Throughout my career, I’ve put a lot of effort into overcoming my weaknesses.  As a result of coaching and reading numerous books and articles on self-development, I have always viewed my weaknesses as barriers to success and something that I needed to work hard to overcome.  I’ve recently begun to wonder, though, whether focusing too heavily on my weaknesses took time that could have been better spent developing my strengths.

In The Effective Executive, Peter Drucker wrote that, by focusing on our weaknesses, the best we can achieve is mediocrity.  On the other hand, working to further developing our strengths can result in greatness.

Most people excel in the areas that motivate them.  Alternatively, weaknesses tend to come from the things in which people are not really interested.  Focusing attention on developing the things people either can’t improve or aren’t interested in improving can lead to frustration, stress, and an overall lack of motivation.

People are motivated when they are able to do meaningful work, learn and develop, and have fun.  And continually developing in an area of strength and utilizing the strength to contribute to an organization’s success help make this happen.

Addressing the Organization’s Weaknesses

It is obviously important to understand and continually close the critical skill gaps that exist within an organization.  Doing this effectively requires hiring the “right” people and continually making them “more right.”  One of the critical objectives of hiring is to put together a team where individual strengths complement one another and people are able to effectively cover each other’s weaknesses, but focusing the hiring process on minimizing the organization’s weaknesses, however, will never lead to greatness.

The performance review process in most organizations targets an individual’s weaknesses.  Although strengths are usually identified – although more in terms of results than the fundamental strength that led to the result – the individual is often expected to work on the weaknesses before the next review.  There is rarely conversation about how the person can further develop strengths during the coming year.

Knowing Your Strengths

Developing your strengths assumes that you know your strengths.  For most of my career, I have approached people and asked for feedback and coaching about my work, interactions with others, and overall performance.  Whenever I have these conversations, however, I try to get the other person to talk about the areas in which I need to improve – in other words, my weaknesses.  Lately however, I’ve tried to turn the discussion around and have asked for feedback on my strengths.  What I’ve found is that it puts the other person much more at ease and comfortable giving me the feedback I need to improve.

Although this has helped improve the conversation, I have found that it is important for the other person to know that I’m not looking for compliments.  I am looking for feedback on my areas of strength where, if I got even stronger, could greatly help the organization and my own career.

Like anything, this type of conversation takes practice to provide real value, so it is important to stick with it and be consistent about holding the meetings.

PDSA to Understand & Develop Strengths

To better understand strengths and weaknesses, Peter Drucker suggested writing down goals related to a specific objective or project.  After six months or so, he recommended returning to the list and reflecting on which goals were achieved and which were not.  After doing this over a period of time, a picture will start to emerge that identifies strengths and weaknesses.  In addition to showing strengths and weaknesses in execution, it will show how strong the person is in planning and selecting the right things on which to work.

This is closely aligned with W. Edwards Deming’s Theory of Knowledge and the Plan-Do-Study-Act (PDSA) Cycle.  Within a PDSA mindset, learning only takes place when the hypothesis is clear, which means that the person or team clearly and consciously understands the expected results from a given action or plan.  I believe Drucker’s advice deals with applying PDSA on a personal level to drive learning.

For this approach to be successful, I believe that the list must be remain personal.  As soon as something like this becomes public or part of a person’s performance review, there will be a tendency to skew results and show more success than really occurred and, as a result, interfere with reflection and learning.  Most organizations are not mature enough in their thinking for people to be truly open about their performance and, in particular, their weaknesses. 

It’s Not All or Nothing

Focusing on your strengths does not mean completely ignoring your weaknesses.  This is not about developing knowledge or a particular skill.  It is about using knowledge and skills to be successful.  If you have a weakness that is interfering with success, the more you know about it and address it, the more successfully you will be.  The key, though, is to avoid spending significant time overcoming a weakness.  Once it is addressed to the point where it no longer interferes with using your strengths to be successful, stop worrying about it and refocus on your strengths.

Confidence and Humility: Two Critical Leadership Characteristics

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There are many traits that make one an effective leader.  Among the most important of these are confidence and humility, two attributes that many think cannot coexist in the same person.  I have found, however, that confidence and humility actually work together to improve the ability to lead and, although some people tend to possess these traits more naturally than others, they can be developed through effective coaching and feedback.

Confidence enables a leader to possess an unwavering commitment to purpose and direction of a team, while humility opens the leader up to continual learning.  And when defining confidence as self-assurance resulting from demonstrated capabilities, it is not possible to possess or have true self-assurance without the commitment to continual learning.

CONFIDENCE

W. Edwards Deming listed constancy of purpose as the first of his 14 points for effective leadership and lack of it as a deadly disease or barrier to improving business performance. Without clarity and confidence in the purpose of a business, a leader and/or those within the organization will continually question the direction and continually jump to the issue of the day resulting in very short-term, if any, success.

Confidence resulting from true abilities and understanding of the business, on the other hand, can give the leader the assurance that the purpose is correct, and prevent the daily distractions from taking the organization off course.

Another aspect of confidence is the belief that developing the abilities of team members is not a threat to the leader’s power or position, but a necessity to maintain it successfully.  A confident leader makes developing people, including the next set of leaders, a top priority for the business. 

Many people tend to confuse confidence and arrogance.  The characteristics of confidence that make it a vital leadership trait are not present in ones who display arrogance.  Discussions that include condescending remarks, as well as an overall lack of focus on developing others are clear signs of arrogance rather than confidence.  Conveying negative energy, a lack of openness to questioning of decisions and actions, and overall uncomfortableness are other characteristics of arrogant leaders.

Basically, people want to be around confident leaders but will do whatever they can to avoid arrogant ones.

HUMILITY

As mentioned above, humility gives people the belief that there is much they don’t know and lead to the desire to continually learn.  Humility enables a leaders to comfortably use inquiry when attempting to investigate a problem or develop the skills of team members because they don’t worry about others questioning their knowledge or abilities. 

Leaders who lack humility have trouble with structured problem-solving because of the tendency to jump to the countermeasure without truly understanding the root causes of a problem.  The kaizen process only works when an individual or team go into it with an open mind and the realization that they don’t always know the answer.  To do this effectively requires humility.

WORKING TOGETHER

When possessed together, humility and confidence can drive leaders toward constancy of purpose for the area they lead, along with the PDSA mindset needed to continually adjust the approach to remain on course.  When the leader models these behaviors regularly, people will be more receptive to following him or her and adopting the same traits in their own work.

A Simple Method for Achieving the Vision

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“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.

Should HR Make All Hiring Decisions?

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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.

A Solution Without a Problem

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“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.

I Already Do Lean

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“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.

Innovation for the Sake of Innovation

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“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.

When 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.

Breaking Down Silos

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“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.

Is it Too Easy to Fire People?

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“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.

Why Companies Hire Poorly

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“A company should limit its growth based on its ability to attract enough of the right people.” – Jim Collins

When a company is buying an expensive piece of equipment, there is often a detailed process to justify the expenditure, study the alternatives, and gain approval.  Leaders throughout the organization are often aware of, or even involved in the process to assure it is done well and that the investment pays off for the company. 

Given the importance of the decision, this makes perfect sense.  What is baffling, though, is why so many organizations don’t place the same level of importance on hiring a new employee as they do on buying a new machine.  Although the amount of damage a poor hire can do on the organization is significant, the decision is often made quickly by a relatively small group of people.

Along with promoting and developing leaders, hiring is one of an organization’s most critical processes.  And as long as a company fails to recognize the importance of hiring, the chance of successfully driving and sustaining a culture of improvement is relatively small.

WHY WE HIRE POORLY

In my experience, there are four main reasons for poor hiring practices, and those organizations that tend to hire poorly often exhibit all four of them.

1. Don’t Know How: Many organizations just don’t understand how to find and screen candidates effectively to assure they fit into the company’s culture.  Just like the work done on the shop floor, screening and interviewing are processes that need to be standardized and continually improved to achieve consistent results.  Without a standardized process – and associated training – there is no way to assure that people throughout the company are using the same approach or that improvements are in hiring are sustained.
2. Don’t Realize it’s a Problem: Companies that do not track employee turnover most likely do not consider it important.  When continually reducing turnover is not considered important, employee satisfaction tends to be low and the associated costs tend to be high.  Besides the costs of rehiring and retraining new employees, there are significant losses resulting from low morale and the loss of knowledge when people leave.
3. Hire When it’s Too Late: There is an understanding in most organizations that bringing on a new employee is costly.  Because of this, the search begins long after the need arises.  When a team cannot keep up with its workload, there is often panic to bring in someone immediately to get the work back under control.  This panic can lead to cutting corners, hiring quickly, and unfortunately, bringing in the wrong person.
4. It’s Easy to Fire People: I have always felt that, if it was difficult to fire people, companies would take much more time to justify the need to hire a new employee and, when it was deemed necessary, would assure that the right person was ultimately hired.  In the machine example at the start of this post, companies tend to take more time to procure capital equipment because, once they make the purchase, they are stuck with it for many years.  If we approached hiring in the same way, the process would be taken more seriously and, most likely, produce much better results

IT’S ABOUT RESPECT

Successfully achieving and sustaining performance improvements cannot happen without the heavy engagement of the people in the organization.  And there is little chance that people will become and remain engaged unless they feel respected.  Making sure that the hiring process results in bringing in a person who has the right skills and fits with the company’s culture and values demonstrates respect for existing employees as well as the person being hired.

Why People Don't Develop

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“If we do not give people accurate feedback based on real behavior they are not growing and we are not respecting them. The job of a leader is not to put them in positions to fail, but to put them in challenging positions where they must work hard to succeed and still see how they could have been even better. “ – Akio Toyoda

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If you are a production manager and one of your machines develops a problem that is resulting in increased costs or poor quality, would you let the problem continue until the next time maintenance is due?  For most of us, the answer would be, “no.”  We would shut down the machine and fix it to stop the problem from continuing.

If you are a manager and one of your team members is having a behavioral or capability problem that is resulting in increased costs, poor quality, or missing commitments, what would you do?  Experience tells me that many would wait until the next performance review to point out the problems and work for improvement (oh, and assign a poor rating in the process).

One of the biggest problems facing organizations today in the drive to improve is the inability of many managers to provide regular and relevant feedback to team members and work with them to improve.  There are a variety of reasons for this but, unless we start to dig into the causes and address them, the problem will continue and our ability to drive and sustain improvements in safety, quality, production, and cost will be severely limited.

The Causes

Over the years, I’ve found many reasons for the lack of ability to provide effective feedback for team member development that occurs in many organizations.  Although most of the reasons are fairly simple to recognize, they are system-level issues and can be difficult to address.  Like any problem facing an organization, however, a focused effort with clear objectives can result in significant improvements.

The reasons many organizations are poor at developing people include the following:

• Leaders Don’t Know How: Coaching and developing people is not something that comes naturally to most people.  When we promote someone into a supervisory position, we need to develop his or her skills in coaching and leading a team.  We must help leaders understand the types of conversations to have with people and how to recognize when improvement is needed and occurring.  They also need to understand how to approach these conversations with respect and utilize questioning, rather than telling, to guide development.
• Inconsistent Leadership Styles: Variation in leadership styles is one of the most unrecognized and destructive problems in business.  Unless we have a clear idea of the competencies we want in the organization’s leaders, the resulting inconsistency will confuse people and lead to demotivation, high turnover, and poor performance.
• It’s Not Valued: Leaders are often not held accountable for development because it is not valued by the organization.  Organizations that take a cream to rises to the top approach to identifying leaders often follow a hands off approach to development creating an environment of competition and silos rather than teamwork and problem-solving.
• Poor Hiring Practices: If we continue to hire people who don’t fit into the organization’s culture, the problem will be overwhelming to those managers who truly want to develop those on their team.  Hiring a new employee is a much more important decision than many people recognize, and unless candidates are carefully screened for fit before they enter the organization, they can do significant damage before we realize we have a problem.
• Overemphasis on the Performance Review: Organizations that do not value development tend to put more pressure on completing performance review on schedule than worrying about whether or not it actually results in improvement.  In this type of environment, managers often feel they are fulfilling their responsibility as a leader by having one or two conversations per year related to development.

It’s a Daily Thing

Avoiding conversations with people related to areas to improvement need to happen every day in real situations.  Besides the effect this can have on the performance of the team and the organization, orienting these conversations toward truly helping someone develop and improve shows a level of respect that people will remember for years afterwards.

5 Characteristics of a Good Boss

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“The greatness in people comes out only when they are led by great leaders. We are all growing and learning, and we all need teachers and coaches to help guide us. We say at Toyota that every leader is a teacher developing the next generation of leaders. This is their most important job.” – Akio Toyoda 

There are numerous articles available on the subject of bad bosses. Besides the fact that these articles tend to be entertaining, talking and writing about a bad boss can be a form of therapy to deal with the stress caused by poor leadership.  

But what about good bosses?  Most people, at one time or another, worked for someone they would consider a good boss, but what is it about their style or approach that made them a "good."  Below is a list of the characteristics I have experienced throughout my career that I would consider make someone a good boss. I'm sure there are many others that can be added to the list, but these are the things that stand out when I think of the good bosses I've had over the years. 

1. Provides Regular Feedback and Coaching:  The bosses who provide continual feedback based on real behaviors and actions demonstrate a true interest in the development and improvement of those on his or her team.  On the other hand, waiting for the annual performance review to provide feedback on areas to improve is ineffective and turns it into more of a check the box activity or justification for a specific rating. 
2. Connects to the Workplace:  Good bosses go to the workplace regularly to understand what team members face on a daily basis.  The focus of the visits is how barriers can be removed, processes improved, and culture changed.  Bad bosses have "open door policies," which really means they are too busy to go to the workplace - and make team members come to his or her office to talk.  Rather than serving team members, the focus of a bad boss is much more on pleasing his or her boss.
   
3. Always Strives for Excellence:  A good boss continually drives team members to improve.  This drive for excellence applies to the boss as well as team members.  Bad bosses focus on cost-cutting rather than improvement to meet objectives. 
4. Question vs Tell:  Good bosses question team members to better understand issues and to help the team solve problems.  Bad bosses always have the answers and provide "solutions" to problems even when they don't completely understand the situation. 
5. Inspires: Good bosses continually help team members connect the work they do to higher-level objectives and the organization's purpose.  This gives meaning to the work performed and helps inspire people to continually improve.  Bad bosses don't understand or care about higher-level objectives and focus only on getting things done quickly and cheaply so they look good. 

The most telling sign of a good boss is that his or her power comes from something other than position.  When I think of the good bosses I've had over the years, it was always a win-win relationship I had with them.  They provided me with opportunities to develop and improve, and I worked hard to help make them successful.

What's Your Culture?

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“The culture of a company to me defines how excellent it will be, how helpful it will be, how ambitious it will be, how innovative it will be . . . And in my mind, [Apple] wouldn’t nearly be where it is today without [its] strong culture.  It would not.” – Tim Cook, CEO, Apple, Inc.*

How would you describe your company’s culture?  Would others describe it in the same way?  Is it the type of culture you want the organization to have?  How do you know?

Most leaders today appreciate the strong connection between culture and performance.  Understanding the importance and actually doing something about it, however, are two different things.  Culture is generally considered one of those softer issues that is difficult to change.  Because of this, many leaders either ignore it or attempt to drive small, less formal adjustments hoping that things will change for the better.

It’s Still About Closing Gaps

One of the characteristics of lean thinking is that it is deliberate about identifying and closing gaps.  It does not matter whether a gap is related to hard or soft issues - if it is something that interferes with the ability to achieve long-term objectives and, ultimately the vision, it needs to be addressed.

The first step to changing the culture is to clearly describe what you want the culture to be.  This means defining the organization’s personality, and includes elements like values, practices, teamwork, leadership style, etc.  It is important to be clear about what these elements look like – i.e., how you will know when you have them.  As an example, if you want the culture to be one where people continually identify and solve problems, you may be looking for an environment where people have an investigative mindset, are trainable, and are able to work together to drive improvement.  You may also want an environment where people are comfortable making problems visible.

Once the ideal culture is clearly defined, you will need to assess the current culture in terms of the ideal.  In other words, determining the gap that needs to be addressed.  It should be obvious that this step requires an open and honest look at the organization’s current culture.  If the organization is not open about potential problems with its culture, there is little chance of driving sustained improvement.

After the cultural gaps are identified, the job becomes prioritizing and closing – or more realistically, shrinking – them.  In the problem-solving example above, you may determine that the hiring process is lacking the ability to identify candidates with the right mindset before hiring, and that the people doing the screening and interviewing need to be trained to identify whether a candidate has problem-solving traits.

START THE EFFORT NOW

There is likely nothing more critical to the organization’s long-term success than its culture.  Without a strong and focused culture that supports the company’s defined purpose, any success due to an innovative product, financial maneuver, or being in an industry with strong demand will not last.  Strengthening and focusing the company’s culture is the only sure way to assure that the its success results from a deliberate and sustained effort rather than luck.

*From Apple’s Tim Cook Leads Different, Fortune Magazine, March 26, 2015

The Many Benefits of Going to Gemba

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“You can observe a lot by watching.” – Yogi Berra

One of the basics of lean thinking is connecting to gemba.  Attempting to create a lean culture without establishing a habit of Go and See – at least at the leadership level – will likely result in poor results and disappointment.

What is not always understood, though, it that effectively instilling a culture of go and see requires much more than just visiting gemba.  The real benefits of the effort occur when leaders truly connect with the workplace in such a way to gain an understanding of what is really going on.

Why it’s Important

The reasons and benefits of building and continually strengthening a connection with the workplace include the following:

• Showing Respect: Respecting people is one of the fundamental elements of lean thinking, and visiting the shop floor to talk with people, understand their issues, listen to their ideas, and help them succeed is one of the best ways to show respect;
• Seeing the Problems: Leaders need to know what is really going on in the workplace, and regular visits to gemba is an excellent way to do this. Whether visiting the shop floor, a service center, or customer sites, connecting with gemba is necessary to overcome the natural tendency of people to hide problems from leaders;
• Improving Catchball: The catchball process is critical to focusing efforts and continually improving toward the company’s vision. When leaders are closely connected to the workplace, the catchball conversations can begin at a higher level and be much more effective;
• Understanding What Help is Needed: The job of a leader is to enable the teams he or she leads to succeed.  Doing this requires a clear understanding of the barriers and frustrations of team members – something that can only occur through regular visits to gemba;
• More Effective Support: Those who are tasked with supporting the shop floor will do a much better job when they connect with the people they support and understand firsthand the problems and issues they face;
• Coaching & Developing People: Effectively coaching and developing people requires regular contact in real situations. Regular visits to the workplace to engage team members in conversations around problems can help develop the ability to address the problems on a daily basis.

Creating the Culture

Creating the habit of go and see requires understanding the cultural barriers to open and honest communication around the problems people face.  If leaders rarely show up in the workplace or do it only when major problems occur, people will tend to hide problems and avoid interactions, setting the organization up for sub-optimization or much more significant problems in the future.

Coaching through the initial visits is critical to assure that the right conversations are taking place during the visits.  It is also important to get people to understand that a “gemba walk” (a term I’ve never liked) is much more than a walk, and actually includes observation and learning.

Establishing a connection between the company’s leaders and gemba will break down a significant barrier to transformation that, although difficult to recognize, is necessary to drive improvement.  Lean is a great way to make the vision a reality but, without a connection to gemba, will result in little more than frustration, disappointment, and unsustainable gains.

Is Management a Liberal Art?

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"[Management is] an integrating discipline of human values and conduct, of social order and intellectual inquiry, [a discipline that] feeds off economics, psychology, mathematics, political theory, history, and philosophy. In short, management is a liberal art..." - Peter Drucker

It is not new or earth-shattering to say that businesses need specialists in order to be successful.  Having people with specialized knowledge in areas related to the company's products, services, processes, network infrastructure, etc. enable the ability to serve customers and meet objectives on a continuing basis.  What is not often recognized, however, is the idea that generalists – especially in leadership positions – are just as critical to the organization’s success.

What is a Generalist?

A generalist is someone who has broad knowledge and skills, and understands the organization's high level system, including the hand-offs and interactions between people and processes.  A generalist is not usually interested in working and developing his or her skills within a single area but, being more of a systems thinker, is more motivated to learn about the big picture.

An organization can have the most talented specialists in the industry but be completely ineffective if these people are not able to agree on what's important and work together to turn their combined talents into commercial success.  By understanding the system, the generalist can bring value to the organization by focusing on overall company performance rather than attempting to optimize any single function or area.  For this reason, generalists often excel in leadership positions and cross-functional roles like project management and planning.

Why Generalists Are Necessary

By clearly understanding the company's high level value stream, the generalist is able to continually align the objectives of an area to those of the organization.  Creating the line of sight from the work performed to high-level objectives is a critical, but often missing, element of leadership in many companies.

No matter how talented a company’s specialists are; without a common direction and continual effort to improve the way people interact and work together, there is no "organization" - there are only individuals working on what each feels is most important.

Peter Drucker wrote that management is a liberal art in that it requires skill from many different disciplines including psychology, sociology, history, and others.  W. Edwards Deming included psychology, learning, variation, and systems thinking as components of leadership in his System of Profound Knowledge, connecting them to successfully motivating, aligning, and developing people toward the organization’s purpose. 

Harnessing the Company's Talent

The obsession many companies have had with specialists over the years has created a shortage of generalists that is hampering growth and success.  As a result, many companies are full of great ideas, new technologies, and brilliant technical minds but aren't able to transform them into consistent commercial success.  A company may be staffed with highly skilled scientists, engineers, and chemists, but if it is not turning its knowledge into viable products or services, it is compromising its future.

Whenever hiring or promoting someone into a leadership position, a person with a varied background tends to be more effective than someone whose experience and training is completely focused on the function the person is expected to lead.  For example, a candidate for a quality management position who has experience in procurement and/or operations in addition to quality is often more effective than one who only has quality control or quality assurance experience .

It's in the Mix

Success in business requires having and leading people to consistently achieve stretch objectives that are aligned with the organization’s vision.  To do this successfully requires respecting the different talents people have and understanding how best to position and organizing everyone to serve the customer effectively.  A critical element of this involves having the right mix of generalists and specialists to assure success.