Sunday, August 14, 2011

Beware the Open Door Policy

"I have an open door policy. Come on in any time the door's open." Is this enlightened leadership or another example of mediocre modern management philosophy? The problem with the majority of managers that have an "open door" policy is twofold. First, there's not just a physical door between the manager and her staff, but also a figurative one. Doors, even when they are open, create a separation and an isolation that is more perceived than seen. Often, the employee that wants to share an idea, complain or just talk to the manager won't go anywhere near the door to even see if it's open or not.

The second problem involves relationships and geography. The manager that doesn't spend time away from his office and the meeting room is like a king sitting in his throne room. He can't establish a relationship of open communication if he isn't making an effort himself. If a manager sits in his office most of the day, and nobody comes to visit, should he assume that no one has anything important to say to him?

The enlightened leader (EL) doesn't have an open door policy. ELs don't give their employees a reason to seek them out. The EL is seeking out opportunities to communicate with employees on a regular basis. The EL goes to the where the work is being done and interacting with the people that do the work. Without going to the places where the company's products and services are being produced, a manager cannot expect to have meaningful sharing of important information. By making an effort to understand what's happening outside the walls of her own office, the enlightened leader creates:

1. Improved trust
2. Higher morale
3. A better understanding of her business
4. Better follow-through on agreements
5. Higher productivity and quality
6. Faster problem resolution

Bill Hewlett and Dave Packard, the founders of HP, are credited with bringing the concept of Management by Walking Around to American management. In the Lean Enterprise world, we call the concept the Gemba Walk (gemba is a japanese word that means the real thing at the real place). Whatever you call it, it is important that it is done with the right intentions and methods; that the leader isn't wandering around, just to be seen, without any interaction with the people or the processes. By making an effort to seek knowledge in the right location, even if there are some early stumbles, a business leader can take their misguided open door policy and stick it where it belongs: in the past.

Thursday, August 4, 2011

The Trouble with Empowerment

The existence of empowered employees can be a tremendously powerful asset for any organization. It can also be a detriment. Empowerment becomes detrimental when the leadership has a poor understanding of what empowerment is. I recently witnessed an example of a misguided, but well-intentioned leader, trying to impart empowerment to his employees. The Operations Manager had an all-hands meeting in order to reinforce the management's support of the lean enterprise transformation they had recently begun. He recognized and complimented a few teams that had shown some marginal improvements in their work areas as the result of some kaizen workshops, and let the rest of the employees know that their time was coming. They would all be on a kaizen workshop team in the future. He then closed the meeting with the words that often make me cringe: "Remember, you don't have to wait to be on a workshop team. You are all empowered to make improvements in your areas. Now get back to work and make your production numbers."

He didn't actually say the last sentence, but that's what he was thinking. Unfortunately, he believed that simply by saying, "You're empowered", some sort of new world would be magically created. A world in which the employees know what empowerment means, have the knowledge and opportunity to make improvements, and somehow have a new authority they didn't have before. The result is normally a workforce that is more frustrated with management than before, and a diminished belief that the leaders actually mean what they say. Unfortunately, this company will continue only to see improvements as a result of formal kaizen workshops, with the improvements being nominal due to a lack of follow-up by the faux-empowered employees.

To help companies understand what empowerment is, here are the 4 elements of an empowered organization:

1. Ability: Employees need to have the knowledge and skills of the lean enterprise principles that apply to their business. They need training and experience in problem solving - identifying, analyzing and solutioning the problems they face in their areas every day.

2. Expectation: Is continuous improvement optional or required. Contributing to the efforts of improving one's own process should be a part of everyone's job. In fact, it should be written in their job requirements, discussed during new hire interviews, and included as a portion of the employee's performance evaluation.

3. Opportunity: Quite simply, people need to be given the time to solve problems and make changes. If you expect them to find "free time" to work on improvements, they won't.

4. Authority: It is important to define the level of authority the individual or the team has. There are 4 levels of authority you can impart to a team:

Level 1, Directed: The team must comply with whatever decision management makes
Level 2, Consultative: Management will decide what to do, but want ideas from the team.
Level 3, Participative: Employees need approval by management before making changes.
Level 4, Delegated: Employees are delegated to make decisions and act without approval.

As you go from Level 1 to Level 4, empowerment and trust increase, and the changes are more likely to stick. Ideally, you will never accept Level 1, use Level 2 in rare circumstances, and apply Levels 3 and 4 appropriately as the leadership matures and employees develop their abilities.

Creating an culture of empowerment doesn't need to be difficult. It takes time and a commitment from the company leadership. The first step is for the leadership to understand what they need to say and do to create all four elements of empowerment that will allow their team's creativity to flourish.

Thursday, July 14, 2011

Can Government Think Lean?

Times are tough for governments trying to satisfy the needs of the people they serve. They are positioned with shrinking budgets, diluted employee morale, and increased public scrutiny. And as governments deal with an aging population and a greater demand for services, the additional costs of providing services can be monumental. But taking the traditional government approach of cost-cutting, hoping for 2% or 3% savings isn’t good enough to close the gap. Public sector organizations need to completely transform the way they produce their services in order to meet current taxpayers’ demands. Although the need to provide value and services in the most efficient manner should be a priority for all levels of government, it presently isn’t. Public sector productivity continues to lag behind the gains the private sector is experiencing.

A few progressive-thinking government organizations are starting to see real benefits by using Lean Enterprise principles to make significant gains in productivity. Lean Enterprise thinking was initially a set of tools and principles used successfully by Toyota and hundreds of other manufacturers around the world. However, in the past decade we have seen a renaissance, of sorts, in numerous non-manufacturing industries using Lean principles. Hospitals are using Lean to reduce paperwork, move patients more quickly through the emergency room, increase the number of operations performed in a day, and numerous other improvements that benefit the hospital, the patient and the insurance companies. Non-profit care providers are using Lean to reduce paperwork, ensure their clients get more face time with case workers, and serve more clients with the same amount of resources. The military is using Lean to reduce the turnaround time to service and repair mission-critical equipment so the equipment is available when necessary and to allow for less equipment needed overall. Construction companies are using Lean to reduce the time to complete a project, while using fewer resources and materials. Unfortunately, government appears to be the last of the major employment sectors (although it’s the largest) to embrace this well-proven approach to enterprise transformation.

Many a civil servant will react to the non-government improvement examples with indifference, and explain that public sector organizations are different. “We don’t make things or sell things or have a profit motive.” But in reality, they fit right in to the model of a lean enterprise. One performance measurement shared between private and public sector organizations is productivity. Productivity is defined as the amount of output in relation to the level of input required. Output can be a product or a service. For a manufacturer, it’s a widget. For a city, it could be a permit or public transportation. For a state, it could be a driver’s license or Medicaid reimbursement. Input is the other factor in the equation. For a manufacturer, input is mostly overhead, material and labor. For the city or state, input is mostly overhead and labor. By taking a lean approach to productivity improvement, teams will discover that there is an abundance of time (input) spent doing things that don’t add value to the service being performed. Examples are: searching for information; waiting for approvals; correcting errors; seeking clarification; duplication of effort; unnecessary approvals; repeated trips to printers, copiers and filing cabinets; creating unneeded reports; excessive information; waiting for people to respond to email or voice mail; trying to find someone; unnecessary meetings; and more. By eliminating or reducing some of these non-value added tasks, capacity will increase. Increased capacity can then be used to produce more services - of higher quality - with the same amount of resources. A few examples:
• The State of Missouri used lean principles to reduce the time to receive a tax refund to 2 days without adding any costs.
• The City of Cape Coral, Florida used lean enterprise principles to reduce commercial site permit approvals from 27 days to 5 days.
• In Grand Rapids, MI, a team of city employees used Lean to reduce the time to get a construction plan reviewed from 22 days to 9 days.
By focusing on productivity (doing more with the same or less), a city, state, or other public sector entity increases its capacity to provide services to the public. One of the benefits of using a Lean approach is that the additional capacity is gained without the need for additional people, equipment, facilities or money. The needed capacity has always been there. It’s hidden until the right team of people, with the right motivation and knowledge, is given the opportunity to identify and eliminate the non-value added tasks. The results are similar to what most private sector companies can expect:
• Improved customer (taxpayer) experiences
• Reduced wait times
• Reduced costs
• Improved morale
• Higher quality services
• Increased equipment utilization.
• Reduced facility space needed
The operational benefits that a city or state realizes from their Lean Enterprise initiatives can then support more strategic benefits, like economic growth, advancing social goals (health care, poverty) and improved faith in government. Once civil servants get past the mindset that private sector ideas won’t work in the public sector, the opportunities to improve government are nearly endless.

Thursday, May 27, 2010

Transparency = speed

Transparency, the willingness to expose problems when they occur, is an important component of any kick-butt lean enterprise. Unfortunately, most companies have created an environment that fosters problem avoidance, where employees feel compelled to hide problems for fear of reprisal. Conversely, a company that practices transparency, where problems are not only exposed, but are readily discussed with passion and directness, will solve their problems faster and more effectively.

Most information about problems exist as bits and bytes in a database, invisible to most. The trick is to get the problems out into the open, where they cannot be ignored. One of our clients literally puts poor-quality customer returns in red bins on the floor in front of their daily communication boards where people almost trip over them. These returned products get addressed pretty quickly.

Imagine the call center that shows the number of dropped calls real-time on a huge screen for all to see. If the trend gets worse, how long until someone notices? Right away. What if the screen didn't exist and all of the dropped call info was being collected in a database? How long until a problem would be addressed? Who knows.

Imagine the hospital operating room with an "on-time start" percentage posted right on the door to the OR every day, with all of the reasons for starting a procedure late. Would the root causes of late starts get addressed quickly? Probably.

Before embarking on a journey to transparency, it is critical to establish some rules:

1. Blame the process, not the person
2. Don't shoot the messenger
3. Data collection should be simple and fast
4. Use color, red and green, to make hits and misses obvious
4. Reward people for following the transparency process

All companies have problems every day. Do you want to be the company that knows what's going on so you can fix the problems, or do you want to hide the problems and rely on hope and luck. When it comes to business, ignorance is not bliss.

Tuesday, April 6, 2010


"How do we sustain our improvements?" This is the billion dollar question. If I had a nickel for every time someone asked me this, I could buy a cup of coffee by now. Since this topic is huge, I will address it in a few posts.

The most important element of any sustainment is human. Quite simply, people have to want the change to stick. If the people that have to use the new process don't want it to be successful, it won't be. It's a myth that most people are against change. What's true is that most are against meaningless, arbitrary or someone else's change. The next time you see your new process falling apart, ask yourself these questions:

1. Is it change or is it improvement? There is a difference. It's improvement only if the workers see it as "better", not just different. They have to believe there is a business reason for making the change that directly or indirectly helps the company, the customer and them.

2. Can you quantify the improvement opportunity? You need real measurable objectives. Without metrics, it is difficult to demonstrate actual improvement. For example:

Wrong: The objective is to improve our visual management of tools.
Right: The objective is to reduce walking distance, eliminate safety hazards and improve productivity.

Add targets for a bigger impact. Then measure, post and celebrate. It's also appropriate to communicate the qualitative results that make people proud of their project. For example: We reduced walking distance by 80%. We also are less frustrated and have found it's easier to train new people.

3. Did you involve all of the stakeholders? Remember, sustainability is mostly a human issue. People need to feel respected by the company. Respect doesn't mean that we just treat workers fairly and call them by their name. It means we believe they have something to contribute to the betterment of the business, and we give them the ability and opportunity to be a part of the problem solving activities. People don't argue with their own data and their own ideas. Often it's who decides, not what is decided, that's critical to success.

4. Is the leader of the area actively supportive? The key word here is "actively". The workers need to know they have the support of the leadership. The leadership must be seen, not just heard. The leader must understand how big the impact is when they take the time away from their "normal job" to spend time at the point of action. This behavior in the leader will create trust in the worker, leading to a belief they they are part of something important.

If you spend your time planning and executing your improvement project with only one thought in mind, it should be this: "How can we ensure everyone believes this new way is the best way?". Then design all of your planning and execution processes accordingly.

Tuesday, February 23, 2010

Strategy Deployment

To be successful in a highly competitive, global business environment, companies must have a sound strategy that provides a clear direction, along with the ability to execute the strategy with focused alignment of efforts by all employees. Where most companies fail to be successful isn’t in the choice of their strategy. Failure comes from the inability to execute the strategy. Most companies, at all levels of the organization, lack a defined, standardized process that allows the strategic plan to become reality. There is a gap that exists between the strategy and the actions that people take every day to try to improve the business. The lack of a good execution process creates inefficiencies, confusion, low morale, and no competitive advantage.

The Strategy Deployment (SD) process is the missing link that companies need to be more successful. When used rigorously, the SD process will provide a structured process, with clear focus and alignment of efforts, and proper commitment at each level. The SD process ensures that the most critical processes get addressed, business improvement decisions are fact-based, everyone knows what needs to be done, and people are accountable for supporting their piece of the strategy.

A rigorous SD process will give your company the following benefits:

1. Clear communication of the strategy to all employees

2. Alignment of everyone's effort

3. Accountability, not only for meeting targets, but also for process discipline

4. A timely and accurate measurement system, allowing for fact-based decision-making

5. Agreement and commitment at every level of the company

6. A common language

7. The use of logic, not opinion or intuition, to develop objectives.

Once understood, SD is a very logical process. Logic, however, isn't always prevalent in a company's culture, leading to one of the pitfalls in implementing SD. Company leaders are used to doing things their way. In introducing a new process, just like for anyone in any organization, there is typically resistance found in at least some of the group. Some leaders feel constrained by facts and logic. They are more comfortable using intuition, experience and other inputs to determine objectives and action plans.

Other pitfalls include:

- Not involving the right people, preventing consensus

- Not taking the time to do necessary research

- Setting targets as too high or too low

- Not performing regular, structured reviews of progress

- Not requiring countermeasures when a periodic target is missed

- Not reviewing progress often enough

- Not taking the time to train people on the SD philosophy and process

- Not making the process visual

When people ask me where they should start their lean transformation, and I tell them they need to start with SD, they are disappointed and confused. They want to start taking real action, jump in and start making changes. The changes, however, must be derived from the right strategy, and we have to know if the changes lead to the expected outcome. Sun Tzu said, "Tactics without strategy is the noise before defeat." It is critical that your company take the time to ensure that the objectives you communicate, the people you engage, the tactics that you use and the changes that you implement will lead to the efficient and effective realization of your strategic plans.

Friday, February 5, 2010

Trade Reform - A Macro-transformation

Most of us in the Lean Transformation world are focused on "micro" transformation issues, making individual companies more competitive, more sustainable, more profitable. We are making gains throughout various industries, in companies small and large. This is good stuff. There is, however, another issue that requires as much, if not more, effort from US manufacturing companies. It has to do with global trade policies and practices. Unfortunately, in trying to compete with China, companies making products in the US have barriers to deal with other than higher wages, greedy CEOs, restrictive unions and an apathetic society.

Did you know that much of the glass for the New World Trade Center in New York will be produced in China? It shouldn't surprise you that the Chinese glass was chosen by the Port Authority of New York. They wouldn't want to be viewed as wasting money on a more expensive product, or practicing protectionism. But, you gotta wonder how a low-labor-content product like glass from a Chinese manufacturer can be the lowest bid? Shipping costs alone should negate most of the gain from low labor costs. Unfortunately, the ugly little secret that's been ignored for years is that the Chinese government provides huge subsidies to certain industries in China. Many of these subsidies are illegal, in violation of trade laws.

Part of the problem is that we have no national manufacturing strategy. President Obama promised that his manufacturing czar (did you know we have one?), Ron Bloom, will develop a strategy, with emphasis on "21st century technologies". That's good, unless you're one of the millions of US workers in a 20th century industry. Who is going to help them?

We can't continue to allow jobs to be lost in this country by rolling over and allowing other countries to continue to violate trade policies and laws. Obama recently told the Senate, "If we are able to compete on a level playing field, nobody can beat us". Great statement; I just hope we have the guts to do something about it.