Structured Problem-Solving: Rarely Given the Attention it Deserves

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There is little argument regarding the critical role that structured problem-solving plays in a lean transformation. Besides the business results associated with solving problems, developing problem-solving skills increases learning, drives the desired change in thinking, and helps people more clearly understand how lean works as a system. With this said, however, it is amazing how little effort many organizations put into developing effective problem-solving skills. It seems like more time is spent on things like 5S, value stream mapping, and other tools that are generally considered easier to apply and less likely to be met with resistance.  As a result, transformation does not occur, improvements are not sustainable, and the big gains possible through lean thinking are never achieved.

Structured problem-solving requires an internal reprogramming for most people. Fighting the urge to move ahead without clearly understanding the problem, breaking down the issue into smaller problems to better understand the situation, and developing a logical root cause based on the 5 whys are not things that come naturally to most people. Because of this, developing problem-solving skills requires changing the way people think rather than merely teaching them a new tool. This is difficult when the person is willing to change, but most people are not, which makes the effort even more complex.

In my experience, I have found four main issues that lead to poor problem-solving in an organization. I’m sure there are more but understanding these four will at least provide some direction regarding where to focus when the culture is not transforming the way it should.

1.  Most people think they already know how to solve problems. Helping people understand and apply structured problem-solving is not as simple as teaching the steps and letting them go solve problems. Most people think they have been doing a good job solving problems for years and do not feel they need to change. For many of these people, however, problem-solving means adding inspection when a defect occurred, firing an employee who wasn’t performing, or pressuring suppliers to reduce prices when costs got too high. They felt good about these things because it showed they acted quickly and appeared to directly addressed the problem. Unfortunately, their actions mitigated the symptoms and provided temporarily relief rather than solved the problems. Helping people understand this requires getting them to realize something they have done in the past – and likely still do – was incorrect. This is not easy to do and requires building trust, a good deal of communication, and the ability to challenge effectively. To compound the problem, there is no one-size-fits-all approach to helping someone transform the way he or she thinks and approaches problems.

2.  Many lean professionals and consultants don’t understand problem-solving well enough to drive change. It is unfortunate, but many of the people charged with driving the change in thinking do not have a clear enough grasp of problem-solving to make it happen. This tends to result in a heavy emphasis on the simpler tools to drive the transformation and, although they may show some early improvement in results, the ability to sustain them or address the truly significant problems facing the organization never happens. Another sign identifying a knowledge gap in those facilitating the effort is the tendency to address every problem with an A3 when, in fact, most problems do not require this level of effort.

Selecting someone to facilitate a lean transformation is a very important process. One way to improve the chances of success is to show the candidate a critical problem the organization is facing and asking how he or she would address it. If the candidate cannot quickly and clearly provide the approach, including the role that coaching would play, he or she likely lacks a deep enough understanding of structured problem-solving to be successful.

3.  A lack of patience and persistence in driving the change. Changing the way people think takes time and persistence. Failing to understand this and expecting quick results will lead to failure. Even the small, one-time problems that do not require an A3, for example, still require structure. The objective in developing problem-solving skills, regardless of how simple the problem, must be focused on helping people learn the process, which includes clearly defining problems in terms of not meeting a target or standard and conducting a 5-why exercise to logically determine the potential root causes, and the more you can do this with small problems, the more people will be able to apply it to larger, more complex issues later on.

4.  Leaders do not support the change. Addressing an issue like this would not be complete without mentioning the “L” word . . . leaders. Leaders must be closely involved in the transformation and learn structured problem-solving themselves if the effort is to have any chance of succeeding. They must learn it deeply enough to become the teachers and, most importantly, model the behavior when facing problems. Asking people about the expectation or standard that was not met when a problem occurs and following a 5-whys approach to guide the conversation when someone jumps to a countermeasure must become a normal leader behavior.

DIFFICULT BUT NECESSARY

Although critically important, developing effective problem-solving skills throughout the organization is not an easy thing to do. Success requires a coach with a lot of experience in solving problems and a good understanding of human behavior. It is something that must be done face-to-face where the problems occur rather than in a training class or conference room. Although not easy, when the team starts to develop a good understanding of structured problem-solving, the pace of transformation will accelerate. Even the "simple" tools like 5S start to have more meaning to people as they see how these things connect to the other tools and elements to improve quality and the flow of work.

Protecting a Lean Culture Does Not Happen by Accident

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There is very little debate about the importance of culture to an organization's success, and that the responsibility for defining the culture lies with leaders. Once the culture starts to develop, though, how do you hold the gains and protect the natural tendency to fall back to the way things were before the improvements? The easy answer is that the responsibility belongs with leaders, but that does not provide enough detail to be of any use. Unless there is a clear and standardized system to protect the culture, including the methods, policies, and ability to identify new and existing gaps, the chance of backsliding is pretty high.

The culture needs to be protected by those who have the power to ensure that, among other things, leaders are fulfilling their responsibilities effectively, people are developing adequately, new hires are carefully selected and have values consistent with the those of the company, and people are being promoted for the right reasons. One team that is regularly involved with many of these areas and can ensure that they are done consistently and in a way that strengthens, rather than weakens, the culture is human resources. A strong HR team is in the best position to understand the company's culture, develop systems that protect it from damage, and help people understand the importance of following the associated standards.

AN EFFECTIVE CULTURE DOES NOT HAPPEN BY ACCIDENT

It takes a lot of work to define and create the type of culture that will help drive continual improvement and improve competitiveness. Once an organization starts making progress, however, it is very easy to slip back into old ways. Unless decisions related to hiring, promoting, and developing people are made consistently and in a way that is clearly aligned with the company's needs, the gains can easily disappear. The way to prevent this from happening is to develop standards that assure work activities protect the culture and assure that people-related decisions are made by a team that is independent with respect to personal relationships and can make objective decisions regarding a person's cultural fit or readiness for promotion.

Unfortunately, many human resource departments do not consider protecting the company's culture as a prime responsibility – or a responsibility at all. A quick Google search on the objectives of human resources identifies a lot of general statements like hiring, maintaining employment records, and providing counsel about terminating employees. Although some of these are loosely connected to protecting the culture, none that I could find mentioned it specifically. Among the likely reasons for this is that HR teams rarely have the power to challenge attempts by executives to avoid the standards. Also, like other parts of the organization, HR professionals are so busy doing their "day jobs" that they rarely step back to understand the fundamental reasons for doing the things they do.

Standards need to be designed to protect and embed the culture and, like any standard, if one person is allowed to bypass them, it will deteriorate and any protection it provides is lost. As a result of this, things move back toward the prior state and the organization's culture loses its ability to provide a competitive advantage.

WHY PEOPLE BYPASS THE STANDARDS

Bypassing the standards that protect the culture are often justified with good reasons, like needing to make a hiring decision quickly before losing a candidate or a leader promoting someone with whom he or she has worked in the past, so the person's capabilities and values are "already known." Regardless of whether the reasons appear sound or not, it is up to leaders to do their part by committing to the standards and following them every time. It is far less damaging to lose a potential candidate than to ignore a standard, go around the system, and hire someone who is not a good fit for the organization.

WHAT TO DO

Talking about the importance of culture will do little to protect it from damage. Effectively protecting it can only occur when the elements become standardized and embedded into the company's normal operation. Specifically, this requires:

1. Developing standards for the cultural dimensions of an organization, including hiring, promoting, training and development, etc.;
2. Making everyone aware of the standards, including what they mean to day-to-day business, and holding everyone responsible for following the processes (or ensuring that countermeasures are implemented when the standards cannot be followed);
3. Clarifying to the HR team that they have a responsibility to protect the culture by communicating and assuring compliance to, and continually improving, the associated standards (this may require development of HR team members);
4. Giving the HR team the power to enforce the standards in all instances;
5. Adding HR positions to job rotations to help key people develop a deep understanding of the standards, systems, and processes, including why they are critical to the organization's competitive position.

This does not mean that HR is the only team responsible for assuring the culture is protected. Everyone has the responsibility to follow the standards in a way that assures protection and continual improvement toward the ideal. What is does mean is that, as the official guardian of the culture, HR is responsible for many of the associated standards and has the authority to stop anyone from going around the system.

There are, of course, standards that protect culture and are not controlled by the HR team, including keeping the vision alive and relevant, helping team members make problems visible without fear, developing team member abilities to see and address problems, etc., but even these can be aided by support from HR to help leaders develop and improve the ability to make these things happen effectively.

THE ULTIMATE RESPONSIBILITY

Everyone in the company is busy working and improving their part of the system. Identifying and protecting a culture, however, applies to the entire system and requires focus from a team that has the ability to step back to think and act holistically. It is not as easy as many of the responsibilities normally associated with HR but is arguably the most critical.

When you think about it, it is not the products, services, or processes that make a company great, it is the people who develop, produce, and improve them. Without a culture that drives continual learning and lets people use their talents to create great products, services, and processes, the company has little to sustain its success. Talking about the culture does nothing – defining it in clear terms and implementing the systems that identify the gaps and protect the gains is the way to turn a soft, difficult to measure organizational element into something much more concrete.

Problem-Solving & Kaizen: Are They Different?

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One of the most important – and elusive – objectives of lean is creating a culture of continual improvement throughout an organization. In most cases, this requires changing the way people think and approach their work, and although helping people transform is never easy, it becomes even more difficult when those driving lean are not clear about the different types of improvements and how to approach each. Solving a relatively small, one-time problem, for example, requires different thinking than reducing fixed costs across the operation by 20%. It is far too common, though, to attempt both by using the same process - i.e., handing someone an A3, telling them to "do a kaizen," and asking them to complete it. Besides the wasted time this can cause, it can confuse and frustrate the person being coached.

The objective of this post is to provide some clarity about the different types of improvement. Although the subject often leads to considerable debate and disagreement, I believe it is an important one, and something that lean professionals need to understand to help move an organization toward a sustainable culture of improvement.


The Different Levels

As shown in the diagram, there are 3 basic levels of improvement within an organization. The two lower levels deal with solving problems, i.e., a situation where actual performance does not meet a standard. This assumes that the process or activity is capable of meeting the standard and has done so in the past, thereby focusing the effort on analyzing what changed or what recently occurred that had not been seen before.




The third level, breakthrough, involves raising the standard to a new level to meet current or future business needs. Doing this successfully often requires the ability and willingness to question previously held assumptions, and applying creativity to drive step-changes in performance.


In practice, this means that each requires a different type of thinking. By looking for clues regarding what went wrong, problem-solving requires analytical thinking, whereas a breakthrough, by attempting to challenge the status quo and develop new ideas and approaches, requires creative or flexible thinking. Both are needed for an organization to be successful, and both often require effective and consistent coaching to prevent people from being confused.

Because of natural forces and overall effect on the organization, there tends to be significantly more activity at the bottom of the pyramid than at the top, while, although fewer in number, efforts at the top of pyramid tend to result in more effort and a larger gain.


Daily Problem-Solving


Daily Issues
The most common and basic type of problem people face are the daily issues that are often small, one-time annoyances that, although still requiring action, have less effect on the system than the more complex and repeatable issues that the organization faces. These daily issues still require countermeasures because they interfere with the ability of people to do their jobs easily. Additionally, if we ignore them, we are showing disrespect to the people affected and sending the message that waste is acceptable. Addressing them also helps people begin to develop structured problem-solving skills in a fairly simple and easy way.

Those addressing daily issues are still expected to develop a clear statement of the problem, root cause analysis based on 5-whys, and a countermeasure that proves effective in addressing the root cause, but not to the level of a more complex problem being addressed with an A3.


The daily issues are often addressed by those closest to the process who face the problems firsthand and, because of the nature of their jobs, do not necessarily have the time to step back and look for trends and connections between the problems that occur. As with all levels of the organization, the team lead or supervisor is expected to coach and develop the ability of team members to identify and address the problems they face.


Efforts to address daily issues should be documented on a card or simple electronic system to use for coaching, collection of data, and as a means to assure that problem-solving is occurring. Care should be taken, however, to ensure that documenting the effort does not become a burden or the benefits in terms of developing analytical thinking across the organization will suffer.


8-Step Problem-Solving

Whenever a one-time issue recurs or appears on a dashboard as a gap or trend, more structured problem-solving efforts are required. For these issues, an A3 is necessary to assure that the problem is effectively defined, broken down, and addressed. Although it can still be done quickly, the effort is often coached more closely and focused on developing skills more deeply. Rather than a simple 5-whys exercise to determine a root cause, for example, an A3 problem-solving effort would require additional answers for each "why" and verification with data and visiting gemba to see firsthand before moving forward. Since an A3 effort often involves addressing a problem that is fairly complex and/or large, there is also an expectation that the problem is broken down into more specific and actionable issues to be addressed one-at-a-time.


Breakthrough: Raising the Standard

Within any business, there are times when the existing standard is not acceptable. Where problem-solving requires analytical thinking to understand what has changed and how to get a process back to where it once was, breakthroughs often need creative ideas to make the type of changes that will raise performance to a level not experienced before. Doing this successfully requires challenging assumptions to separate fact from deeply held opinions.


In spite of what many people think, everyone has the ability to think creatively and develop innovative approaches to business. The key is to coach and develop people to access and hone creative powers – something that is admittedly not always easy to do. The more experience one gains in a particular field or organization, the more the person tends to stick to what he or she already knows – or at least thinks he or she knows – becoming more and more set in one way of thinking. Success with breakthroughs requires breaking down this defense to get people to begin questioning what they accept as fact to see when it is actually nothing more than a strong opinion.

Analytical thinking, although critical for problem-solving, will rarely lead to innovative breakthroughs required to keep the company moving forward. In his book, Elastic: Flexible Thinking in a Constantly Changing World, Leonard Mlodinow writes that innovation requires "bottom up" thinking driven from inside the person versus the "top down" outside-driven thinking generally required for problem-solving.

An important point about the balance of analytical and breakthrough thinking is that a company cannot use innovation to stay ahead of quality and productivity problems. There must be a solid foundation of problem-solving and stable processes upon which to build and hold the breakthroughs.

Both are Required

What makes lean powerful, the combination of analytical problem-solving and innovative thinking, is also what makes the transformation so difficult. Understanding the different dimensions of improvement is fundamental to assuring a successful journey and avoiding the confusion and frustration that many companies experience.

Lean by Playing One Point At-a-Time

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"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.

Do People Feel Comfortable Showing Problems?

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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.

Stop Judging - Start Leading

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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.

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

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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.

The Objective of Problem-Solving is Not Solving the Problem

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"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.

Slowing Down to Speed Up

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Borrowing From Neuroscience to Drive Kaizen Thinking

"If you are going to do TPS you must do it all the way. You also need to change the way you think. You need to change how you look at things." - Taiichi Ohno 

One of the most common issues lean coaches face when teaching structured problem-solving is keeping people from immediately jumping to countermeasures when addressing a problem. Touting the virtues of sticking to the process and mentioning that the countermeasure may be wrong is rarely an effective way to getting someone to forget what they already think is the answer and to take more time and effort only to arrive at the same conclusion. There are a number of reasons for countermeasure-jumping, and understanding the motivation behind the behavior can help people appreciate the importance of following the process. 

There are many reasons people jump to countermeasures rather than following the process to solve problems. The need to be an expert (for personal or cultural reasons) and being stressed or overloaded are two common reasons.  A third reason, which is the focus of this blog, comes from the study of neuroscience and our internal programming regarding how we make decisions. 

Fast vs Slow Thinking 

In his book, Thinking Fast and Slow, Nobel Laureate Daniel Kahneman presents the results of his research into decision-making. Kahneman presents two distinct processes in the brain that, although apparently designed to work together, often conflict with one another. The first, which he refers to as System 1, is the fast thinking process that runs on autopilot. The obvious purpose of the fast brain is to protect us from danger - i.e., we don't have to take the time to think about getting out of the street when a car is coming - and to keep us from having to relearn simple tasks each time we perform them. The fast brain is guided by intuition and habits, and takes virtually no effort to use. 

System 2 is the slow brain, and is used for issues that require deep-thinking logic and focus. It takes time and effort to use the slow brain, but it is the part of thinking that deals with complex issues and enables innovation and creativity to occur.   

The issue with all this, however, is that that the more the fast brain is used, the more it tends to dominate the slow brain and could, in fact, shut it down in most situations.  When applied to the workplace, the fast brain always wants to jump to countermeasures immediately.  

For a variety of reasons, many organizations tend to reward fast-brained people through promotions and bonuses because companies that want quick answers and immediate results do not value deep, careful thinking. Because of this, organizations that have not identified their few highly critical priorities will have cultures that lean toward fast thinking. 

Thinking, Reflecting, and Learning 

Kaizen requires slow thinking and reflecting in order to identify and challenge assumptions that are preventing effective and innovative countermeasures. This may be what Taiichi Ohno meant in the above quote when he wrote that TPS requires you to "change the way you think," since lean requires much more engagement of the slow brain. 

I believe that this is the reason kaizen is not natural for most people. Since most of us are overloaded in our professional and personal lives, we are dominated by our fast brains. As a result, we probably get more done by operating in this way - it's the quality of our work that we have to question. Getting people to understand kaizen requires making them realize this and to learn how to access their slow brains when approaching a problem. 

I spend a lot of time these days getting people to slow down when they're addressing problems.  If it's a small, one-time issue, I only try to get those involved to do a basic 5-why exercise to help them start to appreciate slower thinking without shutting them down completely. When dealing with the larger and more critical problems, however, I continually coach them to slow down and think about the steps in problem-solving before jumping to any conclusions.  It requires a lot more time and coaching to get a person or team to clearly understand a problem and think deeply about each step in the process. When people can start to understand the value of accessing their slow brains, the transformation (or "thinking differently" as Ohno stated) starts to occur. 

When you think about it, Toyota's 8-step problem-solving process is designed to encourage slow thinking. Clearly identifying the gap frames the process, and breaking it down requires looking at data and going to gemba to understand the issue from various perspectives before wasting time attempting to think about causes or countermeasures. Anyone who thinks an A3 can be completed in one sitting is being guided by their fast brain. And for people who do this, their fast brains will get a lot of exercise as they continue to address the same issues over and over again. 

The Big Gains 

Slow thinking is what leads to the big gains that lean thinking drives.  Organizations that approach lean without changing the way people think will likely end up disappointed and abandon the process as not applicable to their business.

Kaizen & Changing the Way People Think

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"If you can't explain it to a six-year-old, you don't understand it yourself." - Albert Einstein

For most people, structured problem-solving is not a natural process.  After years of being rewarded for quick answers and telling people what to do, along with the fact that most of us are overloaded, the ability to approach a problem without a preconceived solution is counter to the way people work.  Many see structured problem-solving as cumbersome and requiring more time than is necessary to address a problem - especially when they think they think they know the answer.

Because of this, coaching is critical to help a person move from jumping to countermeasures to following the process and actually learn about the problem before arriving at answers.  Even using a problem-solving A3 tends to result in filling in the boxes in a way that supports what we already know needs to be done.

Coaching is critical to changing the way people think about and approach problems. The advantage of using a tool like an A3 for this is that the coach can see what the person is thinking as he or she follows the process. An effective coach can review an A3 and, even without a deep understanding of the problem or related processes, ask a series of questions to help the person understand where they went wrong and how to improve the effort.

An A3 should provide a simple and clear overview of the issue, and the story describing how it was addressed. In fact, the simpler and more clear the A3, the better handle the team has on the problem, what caused it, and what to do to address it.

THE QUESTIONS 

There are a series of questions that can help someone learn to follow the process.  There is much more to problem-solving than following the steps listed on an A3.  The key is to help a person change the way he or she thinks. It's a tall order, but it can be done if the person is open to learning and the coach is experienced and patient (it also helps if the coach is also open to learning).

The questions below, along with a good deal of practice, can help to start the change in thinking that will lead to more effective learning and better problem-solving.

1) Why should I care? 

Right up front, the A3 should objectively demonstrate context for the problem and the benefit(s) of addressing it now.  An excellent way to do this is to connect it to the vision or high-level objectives for the business.  Getting the person to do this will help others agree with the importance of the issue in case support or help is needed to implement a countermeasure, and help to keep the team from straying away from the original objective.

2) Explain the logic? 

The steps in the process are not meant to be done independently; they must connect and build on each other. Going over the A3 backwards is a good way to get the person to see where the logic breaks down. A good check on the logic is to make sure that the units of measure throughout the effort don't conflict. Although it is possible that the units may change as the problem is broken down, there must be a logical relationship between them and, once the selected problem and target are defined (step 3 in the 8-step process), it remains consistent throughout the remainder of the effort.

3) What did you learn? 

A key objective of the structured problem-solving process is to learn. Besides making the problem smaller and easier to attack, the reason for breaking it down is for the team or person to learn something that was not previously known. Looking at data from a variety of perspectives (what happened, who was involved, when did the problem occur, etc.) should lead to discovery about the issue. By asking what the person learned during this step, it becomes easy to see if they began the process with the countermeasure already in mind and backfilled the steps to justify their idea.

4) Why did you move on from one step to another? 

Another question that can help a person learn where they didn't necessarily follow the process is to ask why they moved on from one step to the next. As they broke down the problem, for example, they decided that they had enough information to select the problem to attack and move to the next step. Question where they got the data – or if they used data to effectively prioritize the issues, and why they chose not to break down the data any further. Even if the person made a good decision in moving to the next step, asking why can help him or her realize how important it is to think about it during future problem-solving efforts.  Another benefit of asking why is that it helps the coach learn about the issue and ask good questions going forward.

There are many more common questions associated with coaching problem-solving – like who did you involve in the effort and how did you test the countermeasure? Although these are important, they are more procedural and focused on improving the mechanics of following the process, whereas the above questions help to get the person to change his or her thinking. Fundamentally changing the way people think helps them become coaches and can drive lean thinking in all situations rather than only when working on an A3.

Driving Improvement Through Systems Thinking

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"Management of a system requires knowledge of the interrelationships between all of the components within the system and of everybody that works in it." - W. Edwards Deming 

One important discovery people make when they start on a lean journey is how much they still need to learn about their business.  Although they may have extensive knowledge about individual parts of their products, processes, markets, etc., lean thinking forces them to connect the components as a system, which is something many organizations have never done before. 

When starting an improvement effort, I usually ask about the minimum target the team is attempting to achieve.  The answer is often something made up on the spot or a generalization, like as much as possible.  Improvement efforts should generally be driven by the actual requirements of the business.  For example,  if a company determines that the time between a customer placing an order and receiving the product is too long, it should determine an improvement target based on what the business needs.  If it currently takes 42 days and customers expect to receive the product in 22 days because of their needs or what competitors are offering, the minimum improvement needed is 20 days.  Although the gap appears to be significant, people will look at it as if it is based in reality, rather than a target that management dreamed up.  So,  instead of thinking of it as an impossible target, it becomes possible and something that the business needs to survive.  Attempts to go beyond the 22 day target can be attempted later, but should still be based on strategic reasons. 

Although the concept appears simple, it can become much more difficult when applied to something deeper in the business than a product lead time.  In an oil and gas operation, for example, suppose it is taking too long to change out filters on a compressor.  Setting an improvement target would require first understanding what "too long" means.  This involves quantifying the compressor's contribution to the overall system, and includes things like: the overall production target; uptime of the facility required to meet the production target; uptime of the subsystem where the compressor is located in order to meet the facility uptime; the compressor startup time after maintenance; the current uptime of the compressor; and the time needed to change the filters.  By understanding how all of these elements connect and contribute to the production target, it becomes easier to accurately determine the gap between the required time to change out filters and the actual time. 

The more people learn the connections the components have with each other to achieve the overall business objectives, the easier it will be to see the problems and set improvement targets based on reality rather than gut feel.  It is not enough for people to know that the work they do contributes to the organization's purpose and objectives - they must know how.  This comes through a continual focus on coaching and basing improvement activities on learning, which happens through questioning, discussing, and connecting to gemba.