The Wisdom of Tempered Optimism

The new project is appealing.   The new purchase has pizzaz.  The new franchise will surely work well.   The new training should pay handsomely.  

Many of us want to believe the Next Thing will fix our current malaise.   Be it corporate, financial, educational, psychological or relational...we want very badly for the Next Thing to fix the “it” that’s bugging us right now.     

And maybe it will.  

But maybe it won’t.    

How can we tell?  

What if we trained ourselves to ask some questions beforehand? 

• What if it brings in half the expected revenue?

• What if it takes twice as long to complete?  

• What if the relevant authority refuses to approve it? 

• What if the costs are double the projection? 

• What if it chews up every free weekend I have for the next two years? 

If significant components go wrong and the outcome is still good, perhaps your optimism is well-grounded. 

If you need everything to go right, for all the best-case scenarios to happen to get a positive outcome, walk away.    

Many times, a spreadsheet with ranges of revenue and cost will help.   A timeline with expandable decision points will instruct.   A one-page essay answering the question “If, a year from now, this thing fails, what will be the reason?” can be enlightening.   

But it only happens by asking the questions before making the decision. 

Persevere.

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“Do” or “Responsible”?

“So, what do you do?”   Perhaps the most common question in business.

“I flip burgers.”

“I’m a manufacturing supervisor.” 

“I analyze loan requests.” 

“I umpire Class A minor league baseball”

“I’m a project manager.”  

Each describes an activity.   How the person spends her time.   Perhaps enjoyably.   Perhaps only to pay bills.

What changes if, instead, the question is “So, for what are you responsible?” 

Taken seriously, the answers might be:

“I’m responsible to properly cook hamburger patties when I get a request from the front line crew.” 

“I’m responsible for 15 people’s safety, training, productivity and quality processes to serve our customers.” 

“I’m responsible for proposing loan decisions which allow our bank to take on appropriate risk.” 

“I’m responsible for the smooth execution of baseball games allowing each player to compile accurate statistics in his quest to move closer to the Major Leagues.” 

“I’m responsible for delivering new product prototypes according to its specifications and timelines.”   

Being responsible is being professional.   It’s owning the purpose of your job and the results of your job.   It’s the opposite of just punching in and taking up space.   

Likely, people will ask “What do you do?”   

But try answering it with your responsibilities next time.   It changes your view of your job. 

Persevere.

*My thanks to Tom Peters for triggering this concept for me many years ago.  

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Fewer, Better Decisions?

Market data for 2021 show once again stock index mutual funds outperformed mutual funds managed by humans ( source ).   Fully 85% of actively managed funds fared worse than automated funds which seek to simply mimic the aggregate behavior of the market.   

Which got me thinking...why?   Mutual fund managers are very smart people, deeply experienced in company analysis.  They have clear incentives to outsmart the market.   Yet, each year, a very few do.   And those few will likely NOT be amongst the few who outperform the market next year.   Why?  

Is it perhaps the complexity and volume of decision making required by an active fund manager?   

Consider the decisions a mutual fund manager must make to succeed in a single transaction:

1. Which stock should I buy? 

2. At what price should I buy it?

3. How many shares should I buy? 

And, with purchased shares in hand, two further decisions await:

4. At what price do I sell? 

5. Do I sell all or a portion of my holdings? 

The manager must make five decisions correctly to notch a profit from a single stock purchase.   Given that most mutual funds have at least fifty, and oftentimes hundreds, individual stock positions, the number of decisions multiply like rabbits.   As the portfolio turns over, there is more cash to invest and the cycle repeats.   It’s virtually impossible to get all of the choices right. 

Contrast these decisions with those facing an index fund.   The index fund organizers simply spread the available cash across all the stocks in the underlying index in a predetermined proportion.   The only buying and selling happens as customers send cash into or out of the fund.   All of which can be automated.   

Decision making takes time and mental effort.   Even if skilled and speedy, the decision maker can only make one decision at a time.  

Can I learn from this?   

Are there arenas where one can substitute a predetermined choice, like the index fund manager does, for a more involved set of choices, like an actively managed mutual fund manager does? 

• Can I predetermine always to eat a salad for lunch rather than choosing each day what to have? 

• Can I predetermine to hit the gym four mornings each week rather than deciding if I’m up for it today? 

• Can I predetermine what my restocking level will be for a supply rather than deciding afresh each time? 

• Can I predetermine to only pursue a new product innovation if I have three independent market-size estimates rather than deciding anew on each proposal at the moment? 

We often recoil at the thought of making predetermined choices.  Lunch will forever be boring!!!   We recoil at the thought that a human can’t pick stocks better than an algorithm.   You gotta know the company!!   But are those reactions valid??

It got me thinking. 

Persevere. 

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“He was mostly honest”

A friend used these words in a recent conversation describing a former boss of his.  

I knew of that boss, from some distance. He had a position of significance in his organization and industry.  Sadly, from my observations, my pal’s observation carried validity. 

Ouch. 

Is there a more incriminating description of a person?  

You can be “mostly” a lot of things.  Mostly on time.  Mostly calm. Mostly a good interviewer. 

But you are either honest or you are not.  When others suspect your honesty, each word you say is therefore suspect. “Is THAT PARTICULAR statement one of the true or false ones?”  Trust is destroyed.  

Protect your honesty, as if it was pure gold.  

Because it is.  

Persevere.  

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Thinking Differently about Heroes

On an otherwise uninspiring Monday evening in early December, I went to a local grocery store to pick up a package of frozen puff pastry my wife needed.  I knew where it was but didn’t see it in its usual place in the row of freezers.   I asked a nearby store employee if perhaps it had moved.   He helpfully looked but could see from the label on the empty shelf they were out.  “I’m sorry,” he said sincerely.  “Hey, supply chain issues even impact puff pastry!” I added, lamely attempting humor.   I moved on to pick up a couple other items. 

A few minutes later, as I was walking to the checkout line, the same employee came trotting down the main aisle, a package in hand.   He caught my eye and excitedly handed me a box of the frozen pastry.  “We had one more but it had fallen to the floor of the freezer!”   

This was excellent customer service...I thanked him profusely and emailed the store the next day to tell them about it.   He was a hero, going above and beyond normal expectations.   

We celebrate such heroes and love these stories.   But is there more we can learn? 

What if that last package had NOT fallen to the floor of the freezer?   What if the shelf design made it harder for a package to slip and fall?   What if a daily routine for the frozen food folks included shelving anything that had fallen?   What if there was a simple light sensor on the bottom of the freezer to alert staff something had fallen?  

What if the hero wasn’t necessary at all?   

A hero is one who performs a workaround which corrects a system failure.   It’s the rep who drives four hours out of her way on a weekend to deliver a needed back order.   It’s the mechanic who comes in at 4am to get a crucial machine running again.   It’s the entry-level high school kid who realizes the customer who wanted puff pastry might still be in the store and tracks him down. 

While thanking the hero, might we be wise to not stop there?   And then say “how do we improve our system to make this workaround irrelevant in the future?”   

Persevere.    

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If I only...

If I only had that new set of golf clubs, my game would be more enjoyable.

If I only had that powerful kitchen mixer, my breads would be more popular. 

If I only had that new laptop, my writing would gain a wider audience.   

We kid ourselves.   

The key to excellence is practice, repetition, learning from mistakes.   Basic tools are all we need to practice.  Continuous Improvement is the path to excellence. 

At the highest levels, the best equipment can give a slight advantage.   And we will know it if we are at the highest level.   And most of us aren’t.  

Better to focus our energy on doing better with what we have.  

Persevere.

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Learning About Lean is up and Running Again

After a nine-year layoff, I'm back to writing here.   

So where have you been, Joe??

Glad you asked.   

Suffice it to say it got intense.   I continued to lead our manufacturing efforts making medical devices.   Business was good and I had a lot of leadership demands.   We implemented Lean systems and kept driving that effort.    

At the end of 2020, I retired from Cook Biotech.   Amazing to have reached that point in my life.   

I've spent much of 2021 retooling and pondering the next steps...I've never felt retirement was "shapeless leisure."   Instead, it's a new purpose.   

One of those purposes will include more writing about business, processes, decision making, Lean and applications of these.    

I may update this platform but will link back to it.   

Lots to say...here we go.   

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A new writing project

This blog has been rather quiet for the past couple of months, which reflects two concurrent facts.

One is an incredibly busy period for my own manufacturing job.  Good stuff, but hugely time-consuming, filling work days and leaving little mental space for blogging.

The other fact, however, gets closer to actual root cause of minimal posting.

The more I learn about lean systems, the more I come to grips with the utter centrality of just a few things.  Particularly, the topics of pull, kaizen and respect for people dominate my perspective on leading a particular enterprise.

It's easy to write about what text to put on a kanban card.  I find it harder, however, to write clearly about communicating kaizen, for example.  Having little to say, I have chosen to not write.  Why clutter your already-crowded in-box or RSS reader with mere drivel??  Overproduction waste...yuck.

In the past week, though, a bit of clarity emerged for me.

I've begun writing a (short) book on a specific application of kaizen.  I hope to have it done by end of April.  But I'll probably not be posting here much.  There's only so much writing I find I can do.

I may well post some news on the project here...I may want your input to do kaizen on the kaizen effort.  But this space may well be quiet for the next few months.

Thanks for reading and, by all means, keep on learning.


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Creating Interest

Flow is a lot more interesting than batch.

This occured to me in recent conversations with one of our team leaders who schedules work for her area.  A series of well-intended but misdirected steps had created a batch process in her area.  She couldn't figure out how to fix it but we managed to reverse the errors well enough and regain flow.  Two weeks later, she couldn't be more pleased.

"We are getting more done each day," she beamed.  Why? I asked.  "Well, there is more variety.  We work on several different products each day and that stops boredom.  Plus, by doing that we use different materials and are less likely to run out of our supplies." 

There is all the theory of why flow trumps batch, why synchronizing production to sales works, why pull is better than push, why reacting promptly is better than predicting accurately.

Yet, when you get down to the core, it's also just a lot more interesting. 



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Go Look at the Ears

"You know, farming looks mighty easy when your plow is a pencil and you're a thousand miles from the corn field."

Dwight Eisenhower, Address at Bradley University, Peoria, Illinois, 9/25/56



Ike had it right.  Need we say more about getting out of the office and to the place where we add value?  About showing respect for the folks doing the work by spending time in their worlds?  About feeling the rocks in the soil and the insects crawling and the joy of a good harvest and the sweat by which it comes about?

No wonder the Allied Armies were willing to follow and fight for General Eisenhower. 


My thanks to Jamie Flinchbaugh for pointing me to the Eisenhower quote. 


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The Curse of Sophistication

As long as I've worked at implementing a Lean strategy, I continue to find it amazing how a description of it seems to fall flat on others' ears.  A common reaction is "Well, it's just common sense."

Which is truly a comment which dismisses it as a viable strategy.

Lean works when folks accept the fact that "simple" works.  That replacing what you sold is an effective inventory strategy.  That a promptly-recorded, hand-written metric is an effective visual indicator.  That a manager walking down the hall to see a situation for herself beats the daylights out of a screen-full of four decimal pointed figures.

Our access to technology and obsession with sophistication blinds us to simple processes.   Simple processes are, less and less, "common sense".

And it is that simplicity which is truly Lean.


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Ten Years of Blogging

Flying well under any publicity banner, today marks ten years of this blog.  My first-ever post, on September 14, 2002, got this whole thing going.  568 posts later, allow me a few reflections.

Ten years ago, there were not many resources about Lean on the web.  Blogging itself was new; the concept of self-publishing triggered consternation for many, worried that unedited text would lead the world astray.  My rationale for starting this odd exercise was simple.  I was learning more about Lean.  Many of the vendors with whom I worked wanted to learn as well...we linked up electronically.  Amazingly, others enjoyed it as well...people I never knew, around the world.  I kept writing.  The exercise helped me learn.

And a lot has changed.

Lean resources have multiplied on the web.  There is terrific stuff out there in many forms...solid material by outstanding thinkers and writers.  Blogging, as a medium, grew greatly and then faded as Facebook, Twitter and mobile apps unchained people from desktop and laptops machines.  Attention spans also shortened.  Even the best blogs use fewer words now than five years ago.

Nevertheless, I continue to learn much about Lean...I'm almost 14 years into applying this framework for approaching processes.  And I feel I'm going deeper into it.  How do we implement it?  How do I explain it?  How do I bring others along, philosophically?

It's easy to explain a kanban system.  But how to bring others along to grasp the criticality of a pull system?  That's a different level of conversation.

That's what I'm learning.  I less sure just how to write about it; thus not so many posts here in recent months.

But, man, am I still learning.  And the blogging platform uniquely allows a "parking place" on the web for substantive thinking.  So, I'll keep this alive.

After all, it would be a shame to not try to go for twenty years.

Keep learning.  And thanks for reading.

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Probing the Perimeter

One of our supervisors recently began a very useful practice, its clear elegance being a model worth considering.

She was faced with a physical constraint in her area, in her case a particular piece of equipment which seemed to limit her group's daily production.  But to what extent did it actually limit production?  She launched a very simple experiment.

Each day, she asked her team if they could produce one unit more than the day before.

While the group (and the supervisor) thought the limit was 254 units, they tried 255.  It worked.  The next day, they tried 256.  Hmmm.  She then asked what they learned with one more unit.  The group made observations. And tried 257.  The process has continued over the past month.  And they have discovered they do have a constraint but the limit is both higher than they imagined and also more manageable they they had thought.

Goldratt says the second step of dealing with a constraint is to maximize it.  This is just what she did.  Just as a skilled physician gently probes around the perimeter of an abdominal mass to understand just what it is, this team gently probed the extent of the constraint and, in so doing, understood it in a remarkably new way.

Please note, this only works with a system bumping into a constraint.  If the customer is not asking for one more item, you only create waste by making one more item.  But, to understand a limiting factor, this is a very quick, simple and low-cost method to learn much.

Probe gently.  Probe well.


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Organizations Which Succeed

While not a Lean expert, ESPN commentator Colin Cowherd recently made a comment I found insightful.

Observing three organizations which seemed to be consistently successful, he found this common theme amongst the San Antonio Spurs, the New England Patriots and the Boise State football program.

     "Celebrate rarely.  Grind always."

All three teams consistently outperform any expectations made on the basis of the "talent" they have.  All three have had long-tenured leadership which has maintained a consistent perspective on how to succeed.  None are flashy.  All repeatedly win.

Useful to consider.



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PDCA--a clear perspective

One of shortest, best descriptions of the philosophy of Plan-Do-Check-Act I've seen in some time is here, published a few days ago by Seth Godin.

Mull on it.  To your own benefit. 




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Just Hold the Relish

Why do we have the Hot Dog bun?

Because a guy instinctively wanted to stop waste and improve his business.

A soon-to-published new book  recounts clever innovation.  Here's how one reviewer described the humble beginnings of the Hot Dog Bun, as recounted in the book:

...the best story comes out of St. Louis in the 1880s, and there was a street vendor who was selling [hot dogs]. At the time they weren't called hot dogs, they were called either red hots or frankfurters. And while selling them, he would give out white gloves, because when someone would buy the red hot they wouldn't want to get their hands scalded or wouldn't want to get too greasy. The problem was that a lot of the patrons were running off with the gloves, and this was really hurting his bottom line. What he ended up doing was going to a brother-in-law of his and saying, look I have this problem, and he was lucky enough that his brother-in-law was a baker and suggested the soft roll.

The white gloves constituted over-processing waste, doing too much to the product.  Yet, he also had to keep the grease off the customer's clothes to prevent a waste of defects.  Thus, he integrated the protection with the product.



Explain this to your buddy next time you visit the ball park.  Or better, bring along some white gloves to make your point!

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Plan to Actual, with chocolate icing

On my way to work recently, I stopped by the bakery of our local grocery store to buy a celebratory-looking cupcake.  While making my choice, I spotted this sign on the counter. 

Plan to Actual.  With a twist...it was out there for all the customers to see. 

And I was surprised.  Why was the target so low?  And why was neither the store nor the bakery department hitting the goal?   And how did they get these numbers in the first place?   This is a well-run store and the bakery department in particular is very good...I've ordered any number of specialty cakes over the years and they always do a terrific job. 

"So how can I improve your score?" I asked.  The manager smiled, thanked me for noticing and told me I could find a link on the bottom of my receipt where I could give voice to my satisfaction. 

So I did.

And I figured out why the score was so low.

I went to the site indicated at the bottom of my purchase receipt and found:

• A requirement to enter data from the receipt which was not so labeled on the receipt.  I took a guess and got in. This took a couple of minutes
• The survey was long, at least 5 screens worth. I skipped a couple of questions and got an error message demanding me to go back and answer all the questions. 
• Only deep into the survey did they ask about the actual bakery.  
• Almost 8 minutes later, I finished the survey and then got this screen message:

Bummer.  All that work and it didn't even take.  I was a very satisfied customer.  And I couldn't make a clear, simple statement to the store of that fact.  And how did the store take 5 screens of data and boil it down to a single metric?  Did anyone know?  Did the bakery staff know?  Why was the bakery's score "47%"?  Percent of what??   I was willing and anxious to help bump up that score but was unable.

Misalignment.

It's a good thing, a very good thing, to have visual, transparent tools.  It's a horrible thing, a very horrible thing, to have the method of making those measurements disconnected from the display.

Could my customers figure out a way to bump our score?  Can my employees figure out how to help our visually-communicated metrics?

Can yours?

Be aligned.

PS.  What was the celebration about?  The three of us die-hard baseball fans at our shop had a small ceremony to sing Happy Birthday on the 100th anniversary of baseball in Boston's venerable Fenway Park.  Yeah, we really sang.  Yaz would be proud.

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Tom Peters on Systems

I've long been a fan of Tom Peters.  Second only to Peter Drucker in business writers who have influenced me, Peters' often brash views have jarred and stretched me repeatedly ever since I read "In Search of Excellence" for the first time in 1982. 

I'm also a fan of systems...thus this blog about Lean.

So, when Peters published a short paper on the role of systems last week, I read it with interest.  While systems have a place, he says, it is SECOND place.

What is more crucial than systems??  He suggests two things:

• Passionate local leadership
• Corporate culture that supports superior quality work

In that setting, systems work.  Apart from these prerequisites, systems are inadequate. 

The paper is worth your reading.  It squares with my experience. 

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Five things to do when you walk through Gemba

Look each person in the eye and greet them by name.

Observe the visual management tools in the area.  Note what is normal and what is not normal.

Have one conversation of at least three minutes with one associate.

Explain "why" to one person. 

Have a hearty laugh with someone. 


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Control Charts

The more I use them, the more I'm amazed at Control Charts. 
These simple, visual tools have been around for a long time.  And, I've observed, those with keen numeric skills have made them more and more complex. 

Yet the simple is good.  And handwritten is even better for communicating the state of a process to those involved in that process. 



Think about it.  It is a simple graph.  Time is plotted along the bottom.  It can be hours/shifts/days/months.  It doesn't matter what but the period needs to be appropriate for the data.  Then, each period, a person places a dot to measure the parameter in that period. 

The 3 horizontal lines are a mean or target level for the paramater and upper and lower control limits (UCL and LCL).  Typically, these lines are placed 2 standard deviations above and below the mean.

This recognizes that there is inherent varability in a process.  If the varability stays within bounds, the process is working.  If a point exceeds the bounds or shows a trend within the bounds, there is un-natural variablility. 

In the first case, we say the variation comes from common causes.  In the second, we call is special cause.  To mess with common causes is called "Tampering".  To ignore special causes is called "Neglect".  Don't tamper.  Don't neglect.

It's that simple.

Yet, the beauty of the control chart is not the dots or the lines or the statistics.  It is in the conversation the chart data provokes.  The chart focuses attention on the right thing...is the process stable?  If not, what causes the instability and how do we fix it so it stays stable, longer?  It allows the group to avoid finger pointing and talk about issues that matter. 

It happened again for me this morning.  It never gets old. 

If you are not using this simple tool, try it. 

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