Wednesday, December 31, 2008

Book Review: "Chasing the Rabbit" by Steven J. Spear

Book Review: “Chasing the Rabbit” by Steven J. Spear

It was around Labor Day, 1999, when my copy of Harvard Business Review arrived. As usual, I quickly reviewed the Table of Contents and saw Decoding the DNA of the Toyota Production System by two guys I’d never heard of, Steve Spear and Kent Bowen. I read the entire article, twice, that same day. As a guy newly into seeing Lean work, the article explained much of what I was already seeing and challenged me deeply. It also seemed as if the writing style connected at a very deep level for me.

Since that pivotal time, I've worked hard to integrate the key findings he presented. I’ve given away dozens of copies of the article and read much of Spear’s subsequent work on the Toyota Production System. In each case, Steve’s writing seemed to resonate to me, being both readable and remarkably clear. Therefore, I was thrilled to review his newest book, Chasing the Rabbit which came out a couple months ago.

This book continues the style Spear showed in his earlier articles. It is clear, to the point and combines two things often held in tension; the rigor of an academic author and the story-telling skill of a fine novelist. As such, the book contains real substance, while at the same time being very readable, nearly a “page turner” for those of us fascinated by the pursuit of process excellence.

But what content? There is one central theme which makes this book compelling to me. That theme is complexity.

Many business books simplify situations for the sake of teaching. It is helpful, even necessary, for the person new to a topic to start with the simple case. Yet, I’ve been trying to drive Lean systems for 10 years now and it is painfully obvious to me that my company and our environment is anything but simple. I’ve thus had to extrapolate from the simple examples to our reality.

Spear takes this problem head on. He contends, with convincing evidence, market leaders simply understand complexity in an entirely different manner than market laggers. The key to the whole book, to me, is captured in this quote from page 229, describing Alcoa’s remarkable progress in worker safety:
Alcoa discovered that perfectly safe systems defy conceptual design but are very close to achievable through a dynamic discovery process in which (a) complex work is managed so that problems in design are revealed, (b) problems that are seen are solved so that new knowledge is built quickly, and (c) the new knowledge, although discovered locally, is shared throughout the organization.

Spear’s core theme is that excellence in any complex system cannot be designed in; we simply are not smart enough to anticipate every possible interaction that can happen. However, if we are philosophically and technically prepared to “listen” to what the complex system tells us, it will show us the breakdowns. If we fix each one, being careful to learn and then intentionally distribute that knowledge, we gain something impossible to replicate.

He repeats this theme in multiple ways, both in how it is done well and done poorly. He makes a significant contribution by drawing on excellence in spots besides Toyota. Aloca’s safety record and the US Navy’s Nuclear Power Propulsion Program are prime examples. He also breaks down significant failures; the loss of the Space Shuttle Columbia, medical mishaps in hospitals and the decline of General Motors. The themes of a failure to “listen” to the messages of complex systems coupled with a failure to disseminate the lessons that are learned show up repeatedly in the market followers.

It appears that Spear finished up work on this book in July 2008. I would really like to see some future work, using this method of analyasis, on the bank and credit meltdown which occured only a few months later. Would use of these principles have mitigated some of the financial mess we find now?

Spear’s observations resonate with the reality I’ve seen in my career. By making complex systems more explicit, along with specific recommendations on how to understand them, he does business a great service. Regular readers of Spears will recognize some of these themes from earlier work…his overarching summary, however, is a new synthesis and, in my opinion, a very accurate one.

I highly recommend this book. It is an important part of the business literature.

Click here to subscribe to Learning about Lean by email.

Saturday, December 20, 2008

Engaging Consumers to Fight Clutter

Is it possible to get untrained, uninitiated, unconnected people to participate in your efforts to deliver value? Consider this example that caught me totally by surprise in a very unexpected moment.

In October, I had the chance of a lifetime to take a 12 day vacation in Italy with my three sisters and our spouses. During our trip, we rented a house for a week in the not-too-touristy city of Lucca. Since we wanted breakfast and some other meals at the house, we had to figure out how to shop for groceries in a new city, not speaking any Italian.

Our spouses voted 4-0 that the Ely kids should make the first run to the grocery store. Once there, speaking no Italian, my sisters and I started to find the cereal, fruit, eggs, milk and chocolate...necessities each. In proper sisterly fashion, they dispatched me to find a shopping cart.

I observed other shoppers had carts but I could not see where to get one of my own. Finally, I noticed a covered rack of perfectly ordered carts in the parking lot. I went out to get one. And boy was I surprised by what I found.

The neat row of carts were cleverly linked together. Looking around for some visual clues, I saw some drawings which showed a one Euro coin (about $1.50) as the "key" to release the cart from the one ahead of it. My sister Anne came out looking for me. She fortunately had the right coin and plunked it into the small plastic gizmo mounted on the handle of the cart.

She pushed the red coin holder into the housing, the chain dropped and the cart popped loose.

We didn't exactly start singing opera but felt a little smarter. We did our shopping, were pleased my oldest sister's credit card was multi-lingual, loaded the groceries into our car and then wondered just what we were supposed to do with the cart. Pushing it back to the still-neat row of carts, I reversed the process, inserting the chain from the next cart into the plastic gizmo. Pop, out came the coin. And I finally realized what was going on. I thought "Wow, what a cool system!"

Rather than the messy, spread-out, disorganized pockets of carts we see in most US groceries, this simple system provided an incentive for shoppers to return the cart. And when shoppers do it right, the use of the cart is free. I simply had to "loan" a coin to the store for the time it took me to shop.

Interestingly, during the course of the week's stay in Lucca, we made other trips to the store and observed another social dimension of this system. We saw several shoppers accept the help to load their groceries into their car. In return, the helper took the cart back to the rack and pocketed the coin; effectively a tip for the help.

I subsequently learned one discount grocer operating in America has the same system for their Aldi Foods shopping carts.

Why do I mention this? Because well-conceived systems with visual tools and simple economic incentives can eliminate a lot of wasted effort. And if it is possible to do this in a grocery store parking lot, how much more inside our companies?? We have a lot of room for creativity.

Updated: I learned, via a comment, I was wrong in my assumption Aldi was an American-based store. It is owned by a German company. My mistake.

Click here to subscribe to Learning about Lean by email.

Monday, December 15, 2008

Santa Really Does Know

Political cartoonists are at their best when they something widely known, exaggerate it a bit and retell it with a clever twist. Like this:

Interesting to me there is such broad awareness that Toyota and Honda run with a different culture, one of innovation and change. And, sadly, this is absent from domestic automakers.

While this is funny, the bigger challenge is for each of us to build that culture in our own organizations. And a culture never happens overnight.

Go make it happen.

Click here to subscribe to Learning about Lean by email.

Tuesday, December 09, 2008

Gettin’ Caught

On a recent vacation trip, I looked in the rear-view mirror and to see a State Police car telling me to pull over. Not having seen those flashers in 38 years, it was an unfamiliar experience for me.

I pulled my driver’s license out of my wallet and awaited the officer to appear at my window. I had forgotten that he was also going to ask for my car registration and insurance certificate; this meant a quick dive into my glove compartment while he loomed large to my left. The glove box had insurance certificates for 1998, 2002, 2003 but no 2008. I fumbled through old oil change receipts, extra fast food napkins, two tire pressure gauges and CD player instructions but found no current insurance certificate. Growing impatient, the officer said “Let me just check out this other stuff and you keep looking.” He headed back to his squad car. I finally found what I needed but was left with quite a mess as I sat and waited.

Eventually, the officer returned with a speeding ticket and an encouragement to “be safe.” I drove on and had plenty of time to reflect. What did this teach me?

5S applies everywhere. The obvious lesson was the mess in my glove box. I had way too many napkins (“just in case” I had a big spill, I had told myself). This excess inventory cluttered the limited space. I also had no labeling system for the crucial documents I needed, by law, to have at my fingertips. The officer could have concluded my sloppiness in the car could further indicate sloppiness in my entire driving record.

Failure of standard work. More broadly, I had done “non-standard work” on the road by exceeding the speed limit. The fact I disagreed with the officer on the degree to which I was “non-standard” did not change the fact I knew I was speeding. And, by doing non-standard work, I significantly lengthened the time it took me to reach my destination.

The audit process. In my day job, I’m often assessing standard work, trying to point out non-standard work. This experience on the highway was useful as it put me on the other side of the coin. It wasn’t fun having non-standard work pointed out to me, even when I knew it was an accurate assessment. It gives me more empathy on how to point out non-standard work.

One problem can point out another. By speeding, I was forced to find another, less obvious, problem; the mess in my glove box. There is a chain reaction when we pursue excellence. That’s a good thing.

Future prevention. Not surprisingly, I was a very careful driver for the remaining 12 hours of driving on this trip. As noble as many of us may think we will be, not needing any checkup, this thought is often an illusion. I haven’t had a speeding ticket since I was a senior in high school; I was pushing the limit. I needed a correction. And the remaining trip was clear and uneventful. At the speed limit.

Learning opportunities are everywhere, sometimes decorated with red and blue flashing lights. Don’t miss them.

Click here to subscribe to Learning about Lean by email.