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Learn From the Work

Deming Cycle
The Deming Cycle

In an earlier post we pointed-out that the most important knowledge of all is knowledge of our own work and value stream — we must know it in detail.

Bill Conway often said, “All of the waste comes from the work…what we work on and how we do that work. To improve it, we need to get closer to the work.”

This means we must know how long it takes, where it piles up, and how well it is synchronized with the needs of the customers.

A simple but proven way to learn more about the work is a Waste Walk or by “going to gemba.”

As you may know, “Genba,” which has been popularized as “Gemba,” is a Japanese word meaning “the real place.” The word is widely used in Japan, where detectives frequently refer to a crime scene as genba, and Japanese TV reporters often refer to themselves as reporting from genba/gemba. In the business realm, gemba refers to the place where work is done and value created; in manufacturing the gemba is typically the factory floor, but looking further afield it can be any location — a construction site, administrative office, or sales bullpen — where the actual work is being done.

When it comes to Continuous Improvement (CI), problems are most visible in these areas, and the best improvement ideas will come from going to gemba. There is no substitute for ‘going to the work’ and there are things that can only be learned by going there and watching the work with a purpose. Thus a gemba walk, or Waste Walk, is an activity that takes management and other stakeholders to the front lines to look for waste and opportunities for improvement; to observe the work where the work is being done, and to identify what goes wrong or could go wrong, how often it does or could go wrong, and the associated consequences. It fits nicely into the “Deming Cycle” shown above, as it is a method of “checking” our work.

The Waste Walk is designed to help everyone understand the value stream and its problems; it is not to review results and make superficial comments. Gathering input from the people closest to the work is an important element of making improvements as well. After all, they are the ones that know the most about the work!

Unfortunately, and as noted in the above-referenced past post, in most organizations there is a knowledge barrier that holds the waste in place: the people who know the work best are seldom in a position to know the big picture so when they see waste, they often assume there must be a reason for it. And if they know of better ways of doing something, they often lack the influence to make any significant changes. Including their input in a waste walk can help remedy this problem.

Our next post will focus on best practices for executing an effective waste walk.

Driving “Agility” with Quick Wins a Must in the “New Normal”

Recent posts have focused on the pace of change and the critically-important role of organizational agility.

One way to both reinforce and drive agility is to achieve “quick wins.”

According to John Kotter, author of Leading Change and The Heart of Change, creating “quick wins” builds momentum, defuses cynics, enlightens pessimists, and energizes people.

The key elements of a “quick win” are right there in those two words: it’s got to be quick and it’s got to be successful.

A “quick win” must be completed in 4 to 6 weeks at most, but many are implemented much faster such as in a kaizen blitz where a small group focuses full time on an improvement for a day or two, or half-time for a week.

For a solution to become a “quick win” it is almost always an improvement that can be completed with the people closest to the work and with the resources close at hand. Sometimes a “quick win” is a high value improvement executed with speed. But even an improvement with small dollar impact can have a great ROI — because the time and expense invested is so low and the organization begins reaping the benefits so quickly.

Because of the speed imperative, if a solution requires a significant capital investment, it is not going to be a “quick win.” If it requires a large team or cross-functional buy-in, chances are it will be a slow win if it succeeds at all. Many “quick wins” do not require a formal team; often a natural work team can identify the problem and implement a quick solution.

Given shifting marketplace expectations and the rapid pace of change with which we have all become accustomed, finding new and better ways of eliminating waste and satisfying customers, and doing so quickly, is likely to be a “must” in the new normal.

Leverage Learning for Change

learning for change

The importance identifying threats and opportunities and then quickly making necessary changes / improvements was discussed in our previous post, which defined this competency as organization agility.

An equally important component of sustaining a culture of improvement and change is the pursuit of knowledge. To develop new insights, new solutions, new opportunities for competitive advantage, we must actively mine for knowledge that can trigger solutions. In other words, learning can become a catalyst for change.

Here are five key areas in which this knowledge can be accessed:

  1. Learn from the work. The most important knowledge of all is knowledge of your own value stream — he set of activities that move the value from your suppliers through your operations to your customers. Know it in detail — how long it takes, where it piles up, how well it is synchronized with the needs of the customers. In most organizations, there is a knowledge barrier that holds the waste in place: the people who know the work best are seldom in a position to know the big picture so when they see waste, they often assume there must be a reason for it. And if they know of better ways of doing something, they often lack the influence to make any significant changes. And those with the broader perspective and the influence do not really understand how the work as it is done today well enough to arrive at the ‘Eureka!’ moment. One of the fundamentals of the Lean approach is that you must “go to the work.” Don’t just talk about the results or listen to people talk about the work — go to the work. Look at the work, and learn from the people who do it every day. Without this knowledge, little can be substantially improved.
  2. Learn from the marketplace. A prime example of learning from the market took place in the early 1980’s when Toyota believed that, to grow their sales in the United States, they would need to have manufacturing facilities here. But they concluded they did not have enough knowledge to do so successfully. So, they entered into a joint venture with General Motors opening the NUMMI plant in California to produce both the Chevy Nova and the Toyota Corolla in the United States. Having achieved their learning goals, Toyota went on to open plants in Alabama, Kentucky, Indiana and more. General Motors had the opportunity to learn the production systems that enabled Toyota to produce very high-quality product with low cost. Indeed, many individuals at GM learned a great deal through this venture. But in keeping with the practice of gathering knowledge by chance and then leaving it where it lies, GM gained little more from the venture than the cars that came off the assembly line.
  3. Learn from customers. Customers may tell you what they want, but not necessarily why. What do they really value? How do they use or struggle to use what you give them? What are the things that you could do differently that the customers would not know to ask? They don’t ask because they know enough about your process to suggest it and you don’t know enough about their process to offer it. Contextual inquiry is a method of learning more about the customer needs than the customer could tell you by watching the customer use the product in context. It has been used by some software developers and systems designers for a number of years. But it can be used in many other circumstances. The staff of an assisted living facility was able to eliminate almost half the forms in the move-in process by spending time with the departments requesting the forms to really understand how and why they were used. With the new understanding, they were able to design a much simpler and less error-prone move-in process that also perfectly met the needs of the accounting, facilities, and medical departments as well.
  4. Learn from the competition. In his book, “Benchmarking: The Search for Industry Best Practices,” Robert Camp described a methodology to learn and apply better ways of doing things by identifying and studying the best. His is a rigorous and time-consuming methodology, and companies must choose the most important aspects of their work to compare and try to improve. In addition to benchmarking, there are a number of quick and inexpensive ways to mine competitive information. Visiting competitors’ websites can increase knowledge and generate ideas about how you might leapfrog them by combining the best of the competitors with your own best capabilities and offerings. Visiting the competitor as a customer can also tell you a great deal about their customer service and how you can improve your own. The manager of a loan processing and underwriting group went to a competitor to apply for an auto loan — and was astonished at their speed and quality. This learning experience changed his mindset: “We were processing loans as fast as we can. Now I know we have to process them as fast as they can!”
  5. Learn from the world at large. What is going on in technology? What methods are others trying out? How is it working for them? How could it work for you? In the mid-20th century, Toyota noticed that Ford auto workers were nine times as efficient as those at the Toyota plants. So, they sent Taiichi Ohno to study the Ford processes. Ohno concluded, however, that the capital-intensive Ford production model could not be applied to the Japanese automobile company. Nonetheless, Ohno continued to search for ideas for improvements. On one study mission, Ohno watched the bread replenishment system in a Midwestern grocery store and saw how he could adapt this method to make cars with low capital requirements. The Toyota Production System was conceived — a breakthrough achieved!

Five Steps for Driving Agility & Change

organizational agility

The speed of change noted in our previous post has had and will continue to have a profound impact on the business world. We have clearly moved into an era where the extraordinary becomes the expected and subsequently obsolete at an unprecedented rate, thus increasing the demand for much greater organizational agility.

Organizational agility is the ability to identify the developing threats and opportunities to our mission and to quickly align or realign resources to thrive in the new environment. In other words, to make necessary changes / improvements and do so quickly!

Agility requires two components:

  1. The ability to see and understand the external developments and what they will mean for us
  2. The ability to quickly adapt our resources to leverage the emerging opportunities and to avoid the looming threats

Here are 5 specific steps leaders can take to develop and sustain a creative culture of change and organizational agility, based on findings published by New Horizons Learning Centers:

  1. Encourage new ideas. Management must make it clear that they will embrace new ways of doing things. Managers whose default is to turn against new ideas will quickly stop creative thinking and negatively impact the pace of change. This simple habit alone is a critical first step toward developing a culture of creativity and change.
  2. Allow more interaction. An innovative climate thrives when team members are allowed to interact with their own team mates as well as team members from other departments. Better questions are asked, useful information is exchanged, new ideas flow both ways and new views on old challenges are heard for the first time.
  3. Tolerate failure. We have often noted that a culture of CI is one in which people must be given amnesty… a culture in which people are not afraid to fail. This holds true in an agile culture of creativity as well. While new ideas can sometimes prove too costly or might simply turn out to not be feasible, management needs to accept that time and resources will be provided knowing that the idea(s) might or might not come to fruition.
  4. Provide clear objectives and freedom to achieve them. People or teams who are provided with clear goals will be motivated to meet them. The goals provide a purpose for their creativity. Set guidelines with minimal constraints gives managers a degree of control with regards to the cost and time to completion.
  5. Offer recognition. Management must offer tangible rewards that send a clear message that creative behavior is encouraged, supported and recognized in their organization, and that the demands of the marketplace favor an organization that is, in fact, open to ongoing change (CI) and agile enough to make it happen quickly.

Change: the Way Things Could or Should Be?

We all know the pace of change has significantly accelerated over the past ten years and is continuing to do so. This faster pace is often referenced as being exponential!

People most often agree that change is an important and necessary element of success but, truth be told, we don’t really like it. It is far more common to feel that “change is good and I think YOU should.”

Yet the value of change is clear. Consider that 100 years ago the average life expectancy in the United States was 53.1 compared to 78.8 today. Only 35% of households had electricity in 1920, and only 1% had both electricity and running water.

Business examples of what happens without change include Converse in sneakers, Kodak in photography, and Blockbuster in video. Each of these established and successful entities experienced significant declines in market share (or worse!) and profits as competitors introduced new and improved, lower-cost alternatives.

What Could or Should Be?
We have defined “waste” as the difference between the way things are now and the way they could or should be if everything were right. While this definition still rings oh-so-true today, what has changed is the expectations many have of what could or should be.

Who, ten years ago, would have thought there could be self-driving cars? Who would have envisioned a supermarket without checkout stations? Who could have imagined a printer that could generate 3-D objects? Yet all of these things, and many others of similar proportion, have suddenly become real.

Considering the exponential pace of change and the enhanced expectations of what could or should be, business leaders will need to find more innovative and timely ways to promote and bring about change and improvements to eliminate waste in all work processes if they are to maintain their competitive positions. Their customers will, one way or the other, demand this way of managing a business. Or as we’ve always called it, “The Right Way To Manage©.”

Our next post will focus on specific steps for successfully driving organizational and cultural change.

The Ripple Effect of Disengagement

Our previous post focused on ways of reducing the costs associated with disengaged workers. While the most obvious course of action might simply be to increase the percentage of engaged workers, doing so is no easy feat! It’s also important to recognize the specific ways in which disengaged workers impact an organization’s bottom line or, stated another way, to identify and quantify the waste!

During meetings with our Partners in Improvement, these costs were discussed in detail. The Partners concluded that disengaged employees create a negative and expensive ripple effect throughout an organization, and drive-up costs in numerous ways:

Higher turnover: Disengaged employees leave their employers as soon as they see a better opportunity. The turnover increases the costs of recruiting, on-boarding, and training, (1.5-2x annual salary as explained in a recent post), and significantly more for higher-level executives based on a Center for American Progress study. Every new hire brings a risk of a bad fit, and every employee leaving an organization takes with him or her some organizational knowledge that might have been helpful to that organization in future decisions.

Lower productivity: Disengaged employees don’t go the extra mile; they do not make an extra effort when faced with a challenge, and don’t put forth the same discretionary effort that an engaged person will make. A 2013 article from the Harvard Business Review concluded that organizations that cultivate high employee engagement yield a 22% increase in productivity over the norm.

Lower profitability: Similarly, McBassi & Company has compiled data which shows that the Engaged Company Stock Index (comprised of 43 companies with high engagement scores), outperformed the S&P 500 by 21.4 percentage points since it’s inception in 2012.

Little or no process improvement: Improvement requires engagement — a willingness to design and conduct experiments, a willingness to take risks to try something new and potentially better. Often times, disengaged employees focus on their personal agendas and see little upside in trying something new to forward the organization’s goals. The associated cost of lost opportunities is difficult to calculate; but it is significant and probably far greater than the direct replacement costs outlined above.

Higher pay: When we say about someone, “They are only in it for the money,” we are observing disengagement. While money is important to nearly everyone, if that is the only motivation, there is no genuine engagement. As the behavioral economist, Dan Ariely, said, “Money is the most expensive way to motivate someone.” Organizations that are unable to create an environment that intrinsically engages their employees must pay them more to keep and motivate them.

Reducing the Cost of Disengaged Workers

Our previous post focused on the cost associated with disengaged workers and the often-unrecognized lost opportunities associated with turnover.

Fortunately, there are proactive steps that can be taken to avoid these costs and the collateral damage to team morale and brand that is a regular side-effect.

Based on research and data shared by the Enterprise Engagement Alliance (EEA) and The Chartered Institute of Personnel and Development, the following five steps can drive employee engagement, and reduce the number of disengaged workers and the associated costs:

  1. Enhanced recruiting and on-boarding — At a recent Engagement World Conference leaders from several organizations explained how they had increased employee engagement and retention beginning at the recruiting stage. The first steps involved the inclusion of the organization’s mission and vision into interviewing conversations, and a more conscious effort to identify and hire people with aligned goals. Adding a mentor program to the on-boarding process helped new hires assimilate faster so they became more productive in less time. Enabling people to achieve higher levels of productivity and success early-on promotes greater engagement levels, and reduces first-year attrition rates. Early churn tends to demoralize everyone, so in addition to reducing re-hiring and re-training costs, the costs associated with negativity within the existing workforce are also reduced.
  2. Consistent performance management and communication — People need to have meaning in their work, and understand how their work aligns with organizational objectives. This point was well made by several speakers in an episode of TED Radio Hour, called The Meaning of Work. If managers communicate a shared purpose or sense of direction, and encourage employees to openly share their perspectives and input, then they can increase employee engagement.
  3. Learning and development — a past post shared the fact that, for the first time in two decades, the percentage of engaged workers in the US rose in 2019. The increase was due to positive changes in how organizations were developing people. In addition, a recent article in Human Resource Executive magazine identified “continuous learning opportunities and personal development” as being two of the four key criteria (scheduling flexibility and social responsibility being the other two) recent graduates value most as they evaluate career options.
  4. Recognition and rewards — Recognizing and rewarding employees is not a new concept, but if the goal is to engage people rather than simply acknowledge milestones (such as length of service), then the approach must be aligned with what is meaningful to each recipient. An EEA article outlines an effective approach, which begins by stepping-back from the traditional monetary rewards.

    “To receive a deeper level of benefit that can come from sincere recognition, look beyond monetary rewards and get to the human connection – reward employees in ways that connect with them
    emotionally and psychologically,” the article suggests.
  5. Flexibility and work/life balance — Employer/employee relationships, expectations, and engagement criteria have evolved significantly over the past decade. In the Human Resource Executive article referenced above, data from a PwC survey of 44,000 workers who had become less-engaged indicated that “71% said their jobs interfered with their personal lives, and 70% said they wanted to be able to work from home.” The current pandemic, which has necessitated higher-levels of working from home, will no doubt add to the number of people wishing to do so more often.

Lost Opportunities: The Hidden Cost of Disengagement

We all know that engaged workers are more productive and loyal. Conversely, disengaged workers are less productive and are among the first to “turnover.” And we all know that turnover can be costly considering it involves hiring, onboarding, training, ramp time to peak productivity, the loss of engagement from others due to high turnover, higher business error rates, and general culture impacts.

But how much does turnover “really” cost?

A 2017 Deloitte study stated the cost of losing an employee can range between 1.5–2.0x the employee’s annual salary. But the costs can be even higher based upon skill level. For example, a paper from the Center for American Progress determined that the average economic cost to a company of turning over a highly skilled job is 213% of the cost of one year’s compensation for that role.

Then there are some of the less tangible considerations, as illustrated by the following example: A young, seemingly fast-rising junior executive had been working at a large bank for just over six years. When he was asked about his job and how he felt about it he said, “The job’s OK.”

His lack of enthusiasm was evident, and when pressed to say more he added, “Well, I’m not really learning much anymore.”

When asked if he was fully-engaged he said probably not but went on to say that he still did a great job. “I still give 100% and consider myself to be a great employee,” he said. Then, after a short pause, he added,” But I don’t give them 110% and there’s a big difference between 100% and 110% — at least for me.”

When asked if he was out looking he responded, “No…, but I’m listening.”

When asked whether he told his boss how he was feeling he said, “Yeah, but….”

How many people in how many places feel like he does? He is bright, educated, skilled, well-liked, and might be an ideal candidate for a senior leadership position…if he stays.

But is he being made to feel like an important part of the team? Does anyone realize that he could be giving more? Is he being engaged?

As stated above, among the many documented advantages of an engaged worker is loyalty. But so too is the discretionary effort that they put forth; going the extra mile; the above-and-beyond attitude… giving 110%! How many innovative ideas might that extra 10% yield? How much more productivity? What impact might it have on customers or coworkers?

And if he doesn’t stay, the simple replacement costs are not the real issue. He is a potential super-star! He is a known-entity… trustworthy, dependable, low-risk.

What are the real (or hidden!) costs associated with disengagement; the costs of not getting 110%… the costs of not only lost workers, but also of
lost opportunities? As we’ve discovered over the years, the biggest waste in most businesses is the lost opportunities…

The Trust Triangle

A past post summarized the importance of trust and trustworthiness within our organization and within our leaders.

A recent Harvard Business Review article, “Begin With Trust” reinforces this concept, and also suggests that building trust requires thinking about leadership from a new perspective.

“The traditional leadership narrative is all about you: your vision and strategy; your ability to make the tough calls and rally the troops,” the article states. “But leadership really isn’t about you. It’s about empowering other people as a result of your presence, and about making sure that the impact of your leadership continues into your absence.”

Unfortunately, as illustrated in the article’s real world example, people are too often put in leadership roles without having had the proper training or mentorship to be effective. This perspective aligns with our observations and experience over many years of helping people at all levels develop leadership skills and applying those skills to bring about change and continuous improvement; and certainly, many have struggled to build or inspire trust.

The Trust Triangle
One way to better understand how to become more trustworthy is to understand the three key drivers of trust. Thus, the “trust triangle” illustrated below.

“People tend to trust you when they believe they are interacting with the real you (authenticity), when they have faith in your judgment and competence (logic), and when they feel that you care about them (empathy). When trust is lost, it can almost always be traced back to a breakdown in one of these three drivers.”

Just as the first step in improvement is to identify waste or opportunities, to build trust as a leader you first need to figure out which driver you need to improve and take corrective action.

Read the full article…

Continuous Improvement Drivers

Our previous post identified common impediments to Continuous Improvement (CI), noting that most “programs” tend to peter out after making a few initial gains.

Fortunately, there are specific steps organizational and CI leaders can take to prevent the downward spiral that can so easily plague improvement efforts, such as:

  • Success! The first principle is that nothing succeeds like success. So start out with carefully selected projects staffed with highly qualified people to ensure they are successful.
  • Communication! The second principle is “advertising.” If a team applies the CI methodology to great success but no one hears about it, the methodology as “the way we do things around here” will be slow to catch on. The goal is to communicate success and make sure that everyone learns from it and is ready to try for some more.
  • Rely on data! Use data to really understand the current reality and to test theories about underlying causes. The data will help you minimize the red herrings and wrong turns. People will want to substitute opinions for data because that is the way they have always worked. But the facts and data will help the team zero in on the real cause and the best solution more quickly than trial and error based on opinion.
  • Train at all levels! People readily believe that CI teams need some basic training. But team leaders need to be very well trained as well, so that they can ensure that the team follows the methodology, asks the right questions, gathers the right data, stays on track, and keeps the interest and engagement of the rest of the team. Organizational leaders should also be trained to understand their sponsorship, their role, and the soft side, making sure they meets with the teams and individuals regularly.