Daily Discussions with Drucker

Daily Discussions with Drucker

 

In a cool confluence of ideas, Michelle Miller blogged about her new choice of the Book of the Year a few weeks back.  It is a compilation of nuggets from Peter Drucker, titled The Daily Drucker, designed to be read on a daily basis throughout the year.   

 

Well, it didn't take a lot of prodding to get me to order the book.  I was first introduced to Drucker in 1979 in my first role ever as a supervisor.  My boss at the time gave me Drucker's classic The Effective Executive, saying "read this, it might help you."   The boss was wise...Drucker has proven even wiser.

 

No other individual has had as much an impact on my view of work and management than Peter Drucker.  I've read almost everything he's published since.  The man's laser sharp vision and tight prose are an inspiration.  I recommend him to anyone who asks (and some who don't). 

 

So, I've had this new Drucker treasure for a couple weeks now.  What relish I dive into each day's selection.  It is very much like a "blog in a book"...from the greatest management thinker of our day. 

 

I commend the book to you.  And don't be surprised to see comments on it on this blog.  Many thanks to Michelle for her tip...worth a lot!

 

I hope this is helpful. 

 

 

 

Culture and Perceptions Make Reality

Culture and Perceptions Make Reality

This morning I read Seth Godin's account of him serving on jury duty this week. Which reminded me of my jury duty experience about 18 months ago, which I wrote about here.

The two experiences were quite different. I found folks took the task seriously. Seth found people acting with distaste for the system. Seth and I both found it a fascinating opportunity for duty...but apparently our peers had different views.

I suspect culture is central to this difference, perhaps primary. North-central Indiana and Westchester County, New York are, culturally speaking, a very long ways apart. Thus, running a trial will encounter very different responses.

Which reminds me again just how important culture is in influencing any change or growth effort in a company. People are not automatons, they are not cookie-cut-outs that behave the same in response to the same stimuli. People are a product of their region, their backgrounds, their experiences, the norms of the area. We hire out of a certain region and background set. To ignore this is to be incredibly naive.

I hope this is helpful.

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Plan vs Actual, part 4

Plan vs Actual, part 4

So what is a benefit of doing plan vs actual?

My job includes reviewing our Accounts Payable each week. It's always there. And I wondered for quite a while how I could make a "plan" for it.

Some invoices are obvious...we pay the electric bill, we pay for postage. Some are more complex...did we get the quote right for the new machine? Did the person signing off the invoice have the right authority for that level of expenditure? Where's the PO for this one? Is someone slipping burying some added charges in the midst of a complex invoice?

But I stumbled onto an idea for this last November and have been refining it since. While the time taken to review each bill is quite variable, I noted that groups of them tend to average out. Specifically, our accounting system spits out a report for each A/P run and I discovered that one page of A/P on this report tends to be about the same time as the next.

So I started collecting data on how long it takes me to do each page of A/P. The data started out at about 7:30 per page. Since we usually have 4-9 pages each week, I could then do the multiplication and begin to predict how long it would take me.

Then, I further standardized the work and found that I could reliably get the time shorter, while still meeting my responsibilities. Put more simply, standard work helped focus my mind. Fewer drifts off into space while I was doing a standard. Now the time is down to 6:30 per page.

This is remarkably freeing. A/P lands on my desk. A quick look at how many pages, a quick multiplication, a quick look at my schedule and I know where I fit it in. Even in something as quirky as paying bills. The principles of Lean still apply.

I hope this is helpful.

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Not quite getting it

Not quite getting it    

 

A friend just emailed me a mind bending but belivable quote from a flyer publicizing an upcoming trade show in his industry:

 

Roundtable discussion groups

*            "Topics for discussion include..........design tricks and shortcuts to quality.

 

Oh my. 

 

People swapping stories about how to get shortcuts to quality.  Implication being "do this and people with think you might have a quality product." 

 

This type of thinking gets you in trouble.  I hope you can see it when it happens and reject it. 

 

And I sure hope you never think of this blog as a shortcut to quality....

 

Thanks for listening.  And I hope it is helpful. 

 

 

Policy Waste

Policy Waste

Ran into a friend of mine this weekend and I asked him how his company was doing. "Business is good," he said with a sheepish smile on his face, "in fact, better than it really should be."

An odd response.

My friend owns a company in the repair business. As such, they are often paid not by the individual consumer but by an insurance adjustor from the individual's carrier. It seems that these adjustors are not concerned with the best price for the repair. My friend discovered that the adjustors are really concerned that the invoice proposal for the repair work line up with their expected format.

So how does make your profits better than they should be? I asked.

"It is absolutely nuts," my friend continued. It seems that in order to make the format of the proposal line up typically adds about 20-30% to what the customer actually requires. "And when I propose a good deal to the adjustor, they give me all sorts of hassles. When I give them the proposal that fits their format, I have no hassle and they pay promptly."

Adding cost. Adding expense. Adding to the ultimate premium consumers pay. And this from nationally known insurance companies.

My friend is right. It is absolutely nuts. And it is very believable.

This is an example of policy waste. Rules, either written or implied, that reinforce waste. Rules that increase the cost of delivering service, cost that adds no value whatsoever.

And here's the point...when we see these policy wastes, we can very often remove them at NO capital cost. Unlike eliminating some physical wastes (which can require machine work or new equipment), eliminating policy wastes are often just a matter of changing rules. No cost. Very rapid gains.

Made me want to see what policy wastes I deal with. I hope it does the same for you.

I hope this is helpful.

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Pull Systems.even in sales

Pull Systems...even in sales

 

In Lean systems, we always want to Pull material through, not Push it. 

 

This works in marketing as well, if you pay attention to it.  Seth Godin writes today about making something others WANT to buy as the key to marketing.

 

Yeah, pull, not push. 

 

I hope you find this helpful.

 

 

Plan vs Actual, part 3

Times on Palm for 10km Race, originally uploaded by joeelylean.

Plan vs. Actual, part 3

A distinctive of Lean is a deeply held conviction that we can understand both the steps in a process and the time it should take to do each process. Steve Spear of Harvard Business School articulated this most clearly in his two seminal articles on Lean (email me if you don't have these). And it is this understanding of time that many people miss.

Understanding the steps in a process is commonly understood. But articulating, then measuring, is less well know. Even less understood than that is involving the associates who do the work in the understanding of the time involved and giving them the tools to measure, real time, how they are doing with this time standard. All too often time standards are buried in hard-to-understood time studies that are neither current, visual nor relevant.

Which brings me to the rather unusual image above, which illustrates my entire point. This is my very own left hand and I took the photo before the start of a recent 10km road race I ran. The numbers are simply the cumulative times I wanted to hit at each of the six mile markers along the course and the bottom number was my proposed finishing time over the full 6.2 miles. (Those of you who are runners are welcome to chuckle at the glacial pace these splits represent...not to worry, I'm a pretty friendly glacier) I also added the work "UNINJURED" to the top, to remind myself not to strain a pulled left calf muscle I had tweaked a week earlier. Operatively, this meant I thought through my conditioning and my goals and broke them down to specific measures, which I could assess not at the END of the race, but six distinct times during the race. At a time when I could (at least theoretically :-) ) effect the final outcome.

And, thus, with only the technology of a ball point pen on skin and a $5 digital wristwatch, I had a full understanding of the Plan vs Actual. It does not have to be expensive or difficult.

We can give our people a way to know, by themselves, multiple times each work day, just how they are doing. They can make their own assessments of whether they are ahead or behind. It need not be complicated or expensive...in fact it is usually best to be simple and cheap. But we MUST share the information openly and visually and involve our people in its development, measurement and improvement.

I hope this is helpful.

(If you want to know how my "actual" compared to my "plan", click here and scroll down to #141)

Christmas Eve, 2004

Christmas Eve, 2004

While I normally try to stay on topic in this blog, I allow myself one day a year to reflect a bit, personally, here in public on Christmas Eve, as I did two years ago and last year. Not only is the day a useful point for self-examination generally, but it is also the day that my Dad died in 1993. So, since then, the day has taken on a new, more sober, meaning.

It is hard to believe that it has been 11 years since Dad lost his year-long battle with cancer. His influence on me is immense. He and I were blessed with a wonderful friendship that avoided many of the periodic estrangements typical between a father and son. His lived out before me and spoke explicitly with me about business, entrepreneurship, risk-taking, risk-avoidance, dealing with colleagues and competitors, handling finances and embracing change. His 78 years were a marvelous gift to me and I am deeply grateful and humbled by it. And his influence remains very real and current, which is why it is hard to fathom he's been gone 11 years. If you are interested, feel free to look at some web pages my sister Karen Eichstadt put together about Dad's early years and college days at Notre Dame where he played football and learned much. You might get a small sense of who he was.

Thoughts of my Dad naturally trigger reflection on my own role as a father to my sons. My oldest, David, is much on our minds. He's an Army Medic serving in Iraq, staffing an Army hospital in Ramadi, 70 miles west of Baghdad and 30 miles from Fallujah. (here he is and here he is with his unit). His wife Susan and twin sons are living nearby us while he's deployed. It has been quite a mental adventure to have a son in harm's way, daily, which isn't explainable in any short piece of text. Suffice it to say, we've come to grips with it and are quite proud of him. Our local newspaper ran a story this morning on him and a peer of his who are both in Iraq.

My middle son Nathan (on the right, with his cousin Andrew and the twins last summer) has landed well in Portland, Oregon, finding a solid job in Human Resources in the past year. My youngest, Matt, is a sophomore in High School and got his driver's license last week. They are both marvelous guys, deep thinkers and building significant strengths of skill and character.

Each one is different...each one is alike. I think of my Dad a lot, hoping to emulate his ability to teach and mentor each of them uniquely, just as he lived out a principled life for his wife and four kids.

Now, let's see...if my son has sons, would that make Gretchen and me (gasp) grandparents? Yeah, I guess so. And it leaves me laughing and in a sense of awe, all at the same time. Because, you see, now there are two more sons to teach and mentor. Dad's laughing with me. And his example continues to the next generation.

Thanks for listening. My best to all my readers for a most Blessed Christmas and a very Happy 2005.

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Plan vs. Actual, part 2

Plan vs. Actual, part 2       

 

Continuing to think carefully about Plan vs. Actual (PvA).

 

I'm working on a request right now that stumps me.  Has for several weeks.  And I've wondered why. 

 

The request was a description of a problem.  Yeah, it seemed clear enough.  But I didn't know how to respond to the request. And so I was stumped. 

 

A few minutes ago, it hit me.  While I had a description of the problem, I had no idea what the requestor would consider a useful response.  Put another way, the requestor did not describe anything even close to a "condition of satisfaction."

 

An analogy:  The tenant calls the landlord, "The grass is long in the front yard."   An assertion, a statement for which the tenant is willing to provide evidence.  But there is no subsequent request.  Just what does the tenant want??  A clear description in the lease of who is responsible for grass cutting?  The landlord to cut the grass?  The landlord to supply a lawn mower?  Installation of Astroturf?  Reclassification of the front yard as a federal grassland area?

 

The requestor speeds a solution by stating a condition of satisfaction. "I'll be happy to cut the grass if you can supply a working power mower."  Now the landlord can accept that or offer a counterproposal.  But, without a request, he can only speculate what will satisfy the request. 

 

Alternatively, the landlord could ask the question herself.  "What are you asking me to do?"  Or frame a condition of satisfaction in the form of a question "Would you cut the grass if I supply the mower?" 

 

But, without a condition of satisfaction, or something even close to it, little action can happen.  And, in this situation, the Plan is never reached.  Actual is a non-action, vegetative state.

 

I now know how to handle this issue.  I just proposed a condition that seemed reasonable to me.  The customer accepted that as reasonable...we're off center and moving again. 

 

Try this today on something that stumps you.  See if it gets things moving.

 

I hope this is helpful.

 

 

 

Plan vs. Actual--Part 1

Plan vs. Actual--Part 1

Have been thinking and observing a lot on the concept of "Plan vs. Actual." I'll probably be writinig a bit about this in the next few weeks and I'll try to make it interesting.

A mainstay of any solid Lean implementation, Plan vs. Actual (or, I'll abbreviate as PvA) is a rigorous application of Deming's famous "Plan-Do-Check-Act" cycle. In short, it says that we predict ahead of time what we think will happen. Then we do the task. We measure whether or not we actually saw what we thought would happen, usually in a binary, "yes/no" way. Then we say "What did we learn?" and do it again.

Most companies utilize the obvious ways PvA measures, such as:

• Number of items manufactured vs plan
• Expenses vs Budget
• Deliveries on time

What has always impressed me in really good Lean companies is just how many, many more ways they use PvA than ordinary firms, how frequently they measure, how simple and visual the measurements are and how it drives learning throughout the company. Such as:

• Measuring items manufactured, plan vs actual, by the hour, not by the day or the month.
• Budget numbers delivered weekly, not monthly
• Number of days they deliver on-time through a month, not just the monthly percentage.

What happens when we shorten this cycle time of PvA? How do keep track of it? How do we learn, in the busy-ness of work life?

I'll write more and I hope it is helpful.

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