Strategy or Slogan?

Today, August 4, 2011, was a rotten day for the financial markets.  The Dow Jones, S&P 500 and NASDAQ indexes all fell by 4.3%, 4.8% and 5.1%, respectively, in one single day.  

That is data.  What does one do with it?  How does it affect behavior for one holding stock investments?

I got thinking about this while connecting dots between two conversations earlier in the day, neither of which had anything to do with the financial markets.

First, I talked with a senior manager I've known for a long time who leads a local manufacturing company.  The subject was "how do you know the cost of each product".  With clarity and energy, he literally used the back of one sheet of paper to describe exactly how he calculates the cost of a product.  He described how he calibrated this method, how he checks it, how he can easily and quickly compare his cost to what a customer is willing to pay and, thus decide whether or not to pursue a particular deal.  It took all of 4 minutes to explain to me.  He had taught this to his managers and used this method for the past five years.  They all knew what to do when faced with a pricing decision.  I asked him if it had worked through the vicious downturn I knew his company had endured in 2009.  He smiled and said "This was our lifeline."  

He had a strategy for product pricing.  A robust strategy.

After lunch, I spoke with another friend who works for a different local company.  Their business has picked up wonderfully in the past 6 months and they were planning for a busy fall and winter.  Yet, he seemed perplexed.  It seems they have waffled in several aspects of taking advantage of these opportunities.  They had two legitimate paths to take; yet it was unclear which of the two paths company leaders want to take.  I asked him how this was affecting him and other employees.  He described a couple of big meetings during which senior managers shared a catch phrase intended to inspire.   It was a good phrase; short, alliterative, catchy.  Yet, it did not shape behavior.  People could interpret what it meant based on their own background and interests.  

He had a slogan.  A clever slogan, but only a slogan. 

It was late in the afternoon before I even had a chance to note today's free fall in the financial markets.  I emailed a friend on the West Coast who works in the investment industry and asked him, jokingly, if he was talking people off the proverbial ledge.  He responded, marveling at what he termed a "bloodbath".  But he then commented on the advantage certain investors enjoyed if they had a well-grounded investment strategy.  "It's days like this one which show the usefulness of a strategy."  Those without a strategy, he went on to explain, don't know when to sell or when to stay in.  Those with a strategy do; in fact, those with a strategy buy or sell the mistakes of those without, to their own advantage. 

I've personally shaped a clear, written strategy for managing my investments over the past three years.  It holds up.  It told me, immediately, what to do with today's market information.  The strategy has worked in up and down markets.  I'll sleep well tonight.  

A strategy shapes behavior. 

Which brings me to my point:  Lean is a strategy.  It is a comprehensive plan which shapes behavior.  It is understandable.  It is robust.  It allows an entire team of people to know what to do in the face of a wide range of situations. 

No customer will buy a single thing from us just because we do Lean.  They will buy only if they like what we have for the price we offer.  Our strategy for delivering those products is to use Lean principles.  The customer doesn't care about our strategy, so long as we deliver.  Yet a Lean strategy is central to delivering.  

A strategy shapes behavior.  It must tell responsible people in the organization just what to do in certain situations.  It may be boring.  It may be dull.  But it is likely very effective.

Why do people resist charting a clear strategy?  Is it laziness?  Is it fear?  Is it a desire to keep all options open at all times?  I don't know.  

But I do know a strategy beats a slogan.  Any day.

Keep on learning.

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Lean Cupcakes

A couple weeks ago, one of our teams was trying to adapt to a new system.  They knew it would help but it was a change in a long-established routine.  

Our engineer in charge came up with a good idea.  Yes, she talked with them with the usual bromides: "You guys can get this!"  "It'll make your jobs easier, once you get the hang!"  "Don't worry about making mistakes, this is just a trial period."   She needed to say that.  And she knew she could connect as a person besides connecting as a technical expert.

She brought in cupcakes. 

As a way of saying thanks, all the reminder signs had images of cupcakes on them.  The chatter was "Hey, we'll get this new system started and then there are cupcakes at break time."  There was a bounce in the step, a sense of fun, a sense of "play", even though the task at hand was quite serious. 

We don't have to be stuffy.  We can have fun.  And, boy, we often need to have some fun.

Go find some cupcakes, as you keep learning.

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"Why measure it if you are not going to do anything about it?"

I was at a medical convention years ago, listening to a surgeon ask his fellow sugeons in the audiance, Socratically, how they would handle a particular case he was describing.  One suggested a specific lab test. 

 

"What do you do differently if the test is below normal?" asked the speaker.

 

Nothing.

 

"So, what would you do differently if the test is above normal?" he queried.

 

Nothing.

 

"So why measure it if you aren't going to do anything about it?" was the indignant retort.

 

An important moment, which I've thought about a lot over the years. 

 

We have many metrics.  But do we use them?  Do we plot the trends and take actions?  Do we even state, explicitly, what we expect a metric to be?  A range within which we will be happy? 

 

Why get on the bathroom scale to weigh yourself if you don't a) have a target weight range and b) a plan to modify your diet/excercise if you go above the range and c) a plan to increase your caloric intake if you are below that range?

 

If you don't have those three, be honest and just tell yourself stepping on the scales is for entertainment purposes only.

 

If you are not going to act on your business metrics, be honest and tell yourself they are for enternatinment purposes only.

 

Keep learning.

 

 

 

 

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Review: The Toyota Way to Continuous Improvement by Jeff Liker and Jim Franz

The Toyota Way to Continuous Improvement by Jeff Liker and Jim Franz

This book is deep enough to be virtually required reading for anyone implementing Lean.  Why?? Jeff Liker walks the talk. This alone makes this book truly credible and makes it a necessary read for each of us seeking process excellence.   I got the chance to read it soon after publishing and I found it very appealing. 

In this latest effort, Prof. Liker and coauthor Jim Franz take us deeper than kanban and hoshin kanri to the real philosophy behind Toyota's consistent expertise in manufacturing. The authors use insight and experience to tell the story of WHY Toyota has achieved excellence. The consistent theme is the PDCA cycle. This practice is not new; Demming gave it to the world years ago. But just as the concert pianist and brand new piano student can both play a C-Scale, the master has done it longer, better, with more nuance and breadth. So Toyota has more deeply understood the learning from PDCA than any of the rest of us. 

Most useful, to me, were sections such as chapter 5; "Lean Out Processes or Build Lean Systems?" In these more philosophical chapters, Liker and Franz both force and lead the leader into deeper understanding of WHY; why does Lean work for Toyota when it seems to underperform for others? Is it a kanban card which sparkles more brightly? Is it better charts on the wall? Or is it the investment in people made in the context of process excellence? And, if so, just why is this the case? 

It's a long book. You won't read it in one setting. Similar to Liker's other books, there is just a lot to work through. There are more case studies here which will add for some readers and clutter for others. But, face it, it is tough to make a process-oriented business work so don't be surprised you'll have to work to understand this at a depth to be sufficiently useful. 

This book reaches the level of Womack and Jones' "Lean Thinking" and Spears' "Chasing the Rabbit" as necessary books for Lean leaders to read and know.

Keep learning.  This book will help.

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Gumbo from Gemba

I was recently watching the popular Food Network show Diners, Drive-ins and Dives with the irrepressible Guy Fieri as host.  If you haven't seen it, the show's shtick for the 30 minutes is to find three out-of-the way restaurants, each with local color and some unique foods.  He then takes cameras into the kitchen and, with rapid conversation and aggressive tape editing, describes how a killer inside-out burger or Mama's Meatloaf comes to be for faithful patrons.  

Why is the show popular, though??  I wondered and observed.  

They shoot the show in the kitchen.  For a restaurant, this is truly gemba, the place where value is created.  The kitchens are often cramped, dingy, greasy; hardly from an ad for an appliance maker.  The chefs are not actors but cooks, people who both know and love what they do.  

The fact that this is so appealing tells me a lot.  People want to know about how value is created.  They are interested in what goes on.  Dare I say, they would like to know about the process which leads to the result?  The kitchen clatter on the show is as much about technique as it is about ingredients.  

The cooks are truly the experts...they know more than anyone about the product and the process.  Guy goes right to them and gets them to talk and explain.  

Do we, as lean leaders, spend enough time in gemba to get greasy, to smell the burned mistakes, to feel the heat, to sense the time pressure, to realize why the flour has to be stored where it is?  

And, if we do, are we not better able to explain why we do what we do, in a way that makes our gemba as attractive as the hot-dog joint at a resort?  

Mind you, some gembas taste better than others.  But we can each work hard to give ours it's time to be heard.  

Keep on learning.

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System Optimization, Chain Saw Style

Not that we really rush into these things, but my wife and I have talked for a couple years now about tearing out three huge, gnarly, 40+ year-old bushes in the corner of our back yard. And, once they were gone, what would we do with the 300 sq feet of space we'd expose? Gretchen settled on a pleasing, artistic plan during the winter and we awaited a break in the weather to do the deed. Last Saturday's weather looked favorable, so we rented a chain saw and went to work.

The Starting Condition

Our respective tasks became quickly obvious, due to skill and temperament. I got the chain saw and Gretchen wanted to make sure the pile of cuttings was stacked well in the street (she's on a city agency for tree health and knows the guys who pick up such cuttings...she wants to stay on their good side, you see). I waded into the bush, started removing one branch after another as Gretchen began dragging them, 2 or 3 at a time, the 40 meters or so to the street.

And it hit me; this was a process, just like any other process. So, could we improve it? And what could we learn as we improved it?

The task quickly got a lot more interesting (to me, at least) than merely a spring landscaping job. Several relevant facts became readily apparent:

• It took me far less time to cut a branch than it did for my wife to drag it to the street.
• We had only two people to do this job
• We wanted to get the whole job done before the start of the NCAA Semifinals, around 6pm local time.
• Safety was a factor when using a chain saw and lifting heavy, bulky branches
• The end result had to be visually pleasing
• The end result had to build, rather than stress, our relationship.

So, we did some job balancing on the fly. I added to my job; when I cut a branch, I then drug it out of the bushes to a "staging area" nearer the front, reducing her walk by about 10 meters. I made secondary cuts in branches, where necessary, to reduce the size of each branch (safety) and to make it easier to stack on the street (staying pals with the street department). In so doing, I slowed the pace of cutting (improving safety and allowing saw to avoid overheating). This reduced some of Gretchen's job. She had less walking and less work to identify and pull out a branch to drag.

Our visual system to implement this work balance was using a simple, limited "work in process" inventory...I'd leave one or two branches in the staging area. When Gretchen came and pulled them out, I'd cut a couple more to place as WIP. This simple choice had two unexpected benefits. First, it kept our back yard cleaner, as all the straggling branches were in one place, not spread all over. Second, it allowed her to watch the slowly unfolding deconstruction of the bushes. This served to better decide what to eventually leave which would be pleasant to observe out of our back window.

A further learning point from our formerly ugly bush; In doing this work balance, we intentionally "under used" our rented chain saw. It could have had a much higher duty cycle...I could have had all the cutting done in a little over an hour, rather than the three hours we used. Instead, we focused on system speed (getting the branches safely to the curb) rather than point speed (cutting as many branches with the saw as rapidly as possible).

The End Result

We were pleased with how this worked out. As we hacked away, Gretchen observed an unusual, circular set of large branches in one bush, which she felt we could shape into something attractive. We also kept, with a smile, a spruce which our middle son, now 30, brought home as a 4" sapling in third-grade. Somehow, that spruce has made it through three sons and over 20 Indiana winters. It has earned a little more room to prosper.

We cleaned up and sat down, together, to have lunch a little after 1pm, chuckling at how well we hit all the objectives of the morning. We had extra time to do some other tasks before cheering Butler on to it's win over VCU. One remaining task? I suspect a plate of chocolate-chip cookies might still be in order for the street cleaning guys.

Pile o' cuttings

Processes are everywhere. And we can learn from any process, if we choose to see. Good luck on your spring cleaning tasks and learn much from them!

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Are they metrics or are they numbers?

In recent discussions about metrics, I've been wondering about the apparent fascination with metrics.

Each metric is a number.  Each is a measure of some activity, some process.  

But what do we do with the metric/number once we have it?

All too often, I see discussions devolving into how the number is derived or where it comes from or what the right unit is.  And I truly wonder if we like the metric or if we like the number. 

A metric is simply an indicator, a gauge of some activity we deem important.  A number, on the other hand, is an arithmetic construct which can be averaged, summed, square-rooted and put into a spreadsheet. 

To fix a metric requires going to see a process to understand what really makes it work.  To fix a number requires analysis, averaging, summing, square-rooting, spreadsheeting. 

Processes are messy.  They usually involve people.  They don't always respond the way we expect.  

Numbers are clean.  They are usually abstract.  They average and sum and square root the way we expect, so long as our spreadsheet formulae are correct. 

Processes deliver product.  Numbers don't.

Is the fascination with numbers merely another example of taking the path of least resistance? 

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Lean Behaviors: Trust

We don't talk about trust all that much in the Lean community. 

 

Perhaps we should a little more.

 

Why?  Because we ask people to do some rather counter-intuitive things as we try to set up a Lean system.  Like follow standard work even to the point of running out of raw materials.  Why do we do this?  So we can more quickly discover where other pinch points are.  We want to expose waste.  We, who think a lot about Lean and the systems thereof and want to find waste.

 

But, wait a minute, buster, says our associate.  I've seen this movie before and I know how it ends.  If I work hard and expose a shortage somewhere else, either I get in trouble or my pal who works over there gets in trouble and, either way, it isn't good.  No, I've learned to survive by making a work-around and then keeping the whole system "looking good". 

 

And she is right.  It makes no sense, based on her experience, to work hard to expose waste.

 

Unless.

 

Unless you and I, leaders in our organizations, act differently as well.  Unless we demonstrate exposing waste gets rewarded, not punished.  Unless we walk the talk ourselves. 

 

Unless we say thank you. 

 

Unless we demonstrate respect for her opinion. 

 

That's trust.  And, without it, all the waste we so nobly hope to find remains hidden.

 

Keep on learning.

 

 

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Book Review: Gemba Walks by Jim Womack

Jim Womack has done yet another wonderful service for the Lean Community with his most recent book "Gemba Walks".  I've already greatly benefited from it on a first read.  Why?

 

Repetition.  Creative, clear, shapeful repetition. 

 

Jim brings a remarkable clarity to the task of explaining, encouraging and directing lean implementations.  In this book, he pulls together his written record of walks through a multitude of companies over the past ten years.   He published these records in monthly email newsletters during this time, most of which I remembered reading.  This text shuffles the observations into themes.  Womack adds depth, context and linkage with brief paragraphs before each one.   

 

And the core theme comes through.  Repeatedly. 

 

Look.  Find the problem.  Work hard to find root cause.  Fix it.  Repeat.  Experiment relentlessly.  

 

With story after story, Jim explains how this simple pattern works when applied relentlessly.  And how getting bored with repeating this pattern is a plan for mediocrity or worse. 

 

Jim's relatively recent observation of outdated management systems undermining genuine excellence comes out in two new essays in the collection. 

 

For a person new to Lean, "Gemba Walks" will quickly teach much.  For those of us in the trenches, there is both encouragement and more than a few good kicks in the pants.  For senior execs trying to understand Lean, this is way better than more Power Point slides.

In many ways, this book may well also serve as an excellent reference.  Jim organized the chapters to align with common sets of problems we see.  One simple read of a chapter will take less than 10 minutes and I found each would trigger 2-5 quality ideas to test.  Soon.  

 

Simple steps, done repeatedly and consistently, work.  Womack explains this clearly.  Well worth the read.  

A low-tech personal management system

It's a new year and I've noted a plethora of ads and blogs in the last week touting ways to "turn over a new leaf" by using some new technology tool on a phone or laptop.  It's a noble cause and useful endeavor. 

 

When it comes to organizing one's business and personal life, I've not found any better system than the one described in Getting Things Done by David Allen.  Importantly, GTD is not software but a system of principles.  I first read Allen soon after his book came out in early 2003 and went through several iterations of implementation.  I finally put a system together which worked.

 

The system is decidedly low tech; it consists of a small, organized stack of colored 3x5 inch index cards held by a bulldog clip.  No batteries to recharge, no Internet connection, no usage fees.  I wrote up the entire system in this post on the GTD Connect blog in April, 2008.  I re-read it last week in response to all the urgings to try new apps.  I chuckled that, 2.5 years later, the simple system I wrote up then still works, daily, for me. 

 

So, if you are trying to find a way to organize yourself, I commend GTD to you.  Feel free to use my  implementation to trigger your own thinking to take more effective action with less waste.

 

Keep learning.

 

 

 

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