Sunday, October 28, 2012

Using the Ideal Condition to Describe Perfection

One of the elements necessary for transformation of an organization that often gets overlooked is the need to think in terms of the ideal condition.  Describing a process or system in terms of its ideal provides clarity and direction, and creates a framework to guide improvement activities and breakthroughs.

Although lean is based on the concept of continually improving to the point of perfection, many people have trouble understanding what perfection really means to their jobs and the company.  They know too much to think the company could ever reach perfection.  After all, humans aren’t perfect so why would we ever think an organization could reach an ideal state?

Breaking the Path to Mediocrity

In reality, a company will never reach perfection, but without a picture of what perfection looks like and continually challenging whether activities help or hinder the move toward the ideal, the company's improvement efforts will be mediocre, at best.

The more you clarify and emphasize the ideal condition in real terms, the better your chances of getting people to work together to move toward it.  Although you most likely will never consistently achieve the ideal, keeping the organization moving toward it will get you a lot closer to it than just letting things happen naturally.

An excellent example of an ideal condition appeared in a recent FORTUNE article (link) about Yahoo CEO Marissa Mayer. In the article, Meyer stated that she wants to make Yahoo, “the absolute best place to work.”  Is Yahoo recognized as the best place to work today?  If you can trust media reports and, the answer is no.  Will Yahoo ever get there?  Maybe or maybe not, but if Meyer is serious about the statement as an ideal condition, she and her team will begin to implement changes that will greatly improve the company’s workplace and reputation.

In another example, I used to work with a company where the order-to-shipment lead time for the main product line was 23 days.  Customers did not like waiting so long for the product but, since our quality was good and our competitors were delivering no faster than we were, our sales volumes were okay.

Recognizing the potential increase in revenues we could get if we reduced our lead time, I defined the ideal condition as same-day delivery for the product.  I knew this was a huge stretch for the plant, given the current long lead time for the product, but I wanted to set a clear direction for improvement activities.  To assure that changes represented true improvements, I also made it clear that reducing the product's lead time did not mean increasing costs, lengthening the lead time for other products, or reducing quality levels.

Some people had trouble taking the idea seriously but most bought into the idea right away.  We began to track product lead time on a daily basis, discussed it in all planning meetings, and posted the metric in several places throughout the workplace.

Within one year, the product's lead time was reduced to 12 days.  Besides a 23% increase in revenues, the improvements that enabled the reduction in lead time also led to decreased costs and improved quality in other product lines as well.

It's About the Gap

Once an ideal condition has been identified, the next step is to determine the current situation, or where the process, system, or organization is relative to the ideal. The difference between current and ideal is the gap to be reduced rough improvement activities.
Moving toward ideal.
Moving toward ideal.
The idea is not to attempt to close the gap in one step. Attempting to take on too much in one step can lead to frustration and disappointing results.  Instead, kaizen activities should become focused on chipping away at the gap, moving toward the ideal at a continual and steady pace.

Success in business obviously requires much more than merely identifying the ideal conditions, but doing so provides the guidance that is invaluable for improvement activities.  When a leader defines the ideal as something he or she truly believes in, provides the tools and method to enable improvement, remains patient, and gets out of the way, the results can be stellar.

Sunday, October 14, 2012

The Enemy Within

“Your system is perfectly designed to give you the results you're getting."W. Edwards Deming

When I was first learning to play tennis and would hit poor shots, my instructor would say, “You shouldn’t be surprised. The ball went exactly where you were aiming.” I still think of this whenever I play tennis or golf and am beginning to see implications to business, as well.

Although companies face external forces that impact results, it is generally the internal forces that cause the major problems.  In fact, when it comes to organizational performance and improvement, we are our own worst enemy.  We continually throw up barriers that interfere with focusing on what is truly important . . . serving customers.

Countermeasure Without a Problem

There are countless examples in organizations today of initiative overload, where one or more “support” areas throw out a new system or policy that impacts the work of people throughout the company.  The reasons behind the new initiatives are not often clear – it could result from an article someone read or a meeting held in a corporate office – but on the front line, it does not appear that they came from a fundamental business need.  Although driven by good intentions, this type of activity tends to result in initiative overload for the people trying to serve customers.

The larger the organization, the more likely it is for people to get further away from the company’s purpose resulting in the creation of countermeasures that, although appearing to make sense, create more problems than they address.

Back to Basics

The only way to minimize initiative overload and the negative impact associated with the practice is to continually return to the basics and understand what does and doesn’t support the organization’s reason for existence.  This means getting people to regularly reflect on four basic questions:
  • What is our purpose?  Why to we exist?  Who are our customers and what value do we provide to them?
  • What is our value stream?  How do we deliver value to our customers?  Within the value stream, which activities directly provide value and which exist to support the direct activities?  This requires a significant commitment to go to gemba to talk to team members and see how things are done firsthand.
  • What is our ideal condition?  How would our value stream operate if we were absolutely perfect?  Although it may seem crazy to think you can ever achieve perfection, it is critical to get everyone focused on a consistent direction.
  • How do we compare with our ideal condition?  What are the gaps we need to address to move toward our ideal and what are the root causes of the gaps?  How can we support efforts to close the gaps?
A servant leader mindset needs to be created throughout the organization that questions every decision and initiative to assure that it supports the company’s fundamental purpose. Although not necessarily an easy task, the above questions can provide a framework for coaching discussions that can begin to create the type of culture where people start supporting, rather than interfering, with serving customers.

Tuesday, October 9, 2012

Preparing for the Natural Tendency to Backslide

Patience is waiting. Not passively waiting. That is laziness. But to keep going when the going is hard and slow - that is patience.Alexandre Dumas Père
As I’ve written many times before, I don’t believe there is ever a point where a company can say that its lean mindset is truly sustainable.  There is just too much of a natural pull back to the traditional way of doing things to ever feel that an organization has “made it.” And in many instances, this "natural pull" is strong enough to bring the improvement momentum to a grinding halt.

The Effect of a Crisis

So how do you know when the organization is abandoning lean principles and slipping back into its own ways?  There are actually many signs of lean decay, but one of the most common shows up when the organization faces a crisis.  When the company faces a crisis – falling prices, increased raw material costs, a loss of market share, or a host of other problems – do leaders appear to remain calm, keep the focus on the ideal condition, and continue to drive kaizen activity to address the gaps, or do they abandon lean and develop countermeasures that consist of cost-cutting and other short-term measures that pull the organization away from the activities that strengthen the operation?

When facing a crisis, it is perfectly normal to abandon new thinking and return to old habits, especially when there is a lack of experience in the new way or doubts about whether or not it will quickly address the organization’s problems.  Leaders tend to face immense pressure to assure the organization performs and unless there is a deep understanding of lean and the organization, it is not practical to expect that they will stick to something they do not know will get the organization back on track.

To prevent abandonment of the move toward lean, it is critical that leaders become involved in the deployment and learn as the organization begins its transformation.  It is too easy for those who sit on the sidelines and watch the organization change to pull the plug when a crisis hits.  They don’t understand why the improvements occur and that learning continues to occur even when an attempted improvement does not succeed.  They also do not understand that the most significant improvements require a transformation in thinking and leadership throughout the organization.

Unfortunately, successfully moving the organization toward a lean mindset often requires good timing as much as a clear plan and an experienced deployment team.  Transformation can take many years and Western business has never been known for its patience.  Throughout my career, I have worked with leaders who want to drive Toyota-like improvements without appreciating the decades that Toyota worked on developing their system.  Because of this, it is important to assure that learning takes place as the deployment proceeds.  This can only occur when leaders are involved from the beginning and PDCA-thinking is applied throughout the organization.

"The first step is transformation of the individual.  This transformation is discontinuous." - W. Edwards Deming

There is nothing more critical to success in a lean transformation than learning.  Keep in mind, however, that people can only learn when and what they’re able to at any given time.  By continuing to emphasize the need to understand cause and effect – or the reasons why results are what they are – you will greatly increase the chances that the organization will develop a learning environment.