Three key principles at Novartis

I love this interview with Joseph Jimenez, the CEO of Novartis. He hits on several points near and dear to my heart. 1. Simplify: Jimenez knows that elaborate strategic initiatives have zero chance of success if they're not translated to a small number of concrete actions that people can take on a daily basis:

At Novartis, our business is very complicated. But you have to distill the strategy down to its essence for how we’re going to win, and what we’re really going to go after, so that people can hold it in their heads — so that the guy on the plant floor, who’s actually making the medicine, understands the three priorities that we have as a company.

2. Identify the value: Jimenez understands that the value of one's work is ultimately decided by the customer, and that far too many corporate activities are simply empty exercises by that measure:

We needed to shift the company to become more externally focused, versus internally focused. People were proud of producing 75-page PowerPoint documents, and that was seen as a success.  If the C.E.O. or the head of the division complimented you on your PowerPoint presentation, that was a good thing.  And I said, forget that. We have to put the patient at the center of everything we do.

3. First, look in the mirror: Jimenez describes how at an earlier job, his division kept missing their sales forecasts. A consultant pointed out that the root cause wasn't a lack of skills or a poor planning process; it was fear: people were afraid to tell the truth. And he realized that he bore some responsibility:

We had to change the behavior in the organization so that people felt safe to bring bad news. And I looked in the mirror, and I realized I was part of the problem. I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news. It’s a chance to say: “Hey, thank you for bringing me that news. Because you know what?  There are nine months left in the year. Now we have time to do something about it.  Let’s roll up our sleeves, and let’s figure out how we’re going to make it.”

Jimenez doesn't talk about lean in this interview. But the lessons and values he discusses certainly fit in with core lean principles.

Information 5S -- Apple Edition

In his book Inside Apple, Adam Lashinsky writes about Apple's extreme secrecy -- both external (not letting the media know what it's working on), and internal -- not letting people inside the company know what other people and other teams are working on. As Lashinsky explains it in an interview,

Apple people below a certain level -- and that level is a very high level -- do not multitask. You have a project, you work on that project, you know what your function is.... Apple operates on a need-to-know basis. So if you're not involved in a project, you're not involved, it's not of your business, and you're encouraged to mind your own business... You work on the discrete task that you've been assigned to work on. They don't get distracted by what other people are working on.

It strikes me that Apple is engaging in a form of information 5S -- except that in this case, the "sorting" of information is externally imposed and enforced by the company. And there are real benefits to it: you're better able to focus on your work because you're not getting buried by a bunch of needless "reply all" emails, or getting roped into meetings that are only tangentially -- at best -- related to your work. By identifying the important and relevant information for each person, and by defining clearly focused responsibilities, Apple eliminates the needless  cognitive load on people.

That's certainly a contributing factor that  enables them to do their best work. I'm certainly not advocating that all companies follow this route. (Neither is Lashinksy, for that matter.) But it's worth considering how much unnecessary cognitive load you impose upon your people in an attempt to "keep them in the loop."

First, think.

I heard it again from a client this week: "I don't have enough time to work on that." Well, let me be perhaps not the first, but certainly not the last, to call bullshit on that complaint.

There's always enough time to do what's really important to you. If your child got hit by a bus and you needed to take her to the hospital, you'd somehow find the time to do it, because it's more important than preparing your 93-slide Powerpoint deck on which color white to put into the product line next year. (And if the hospital isn't more important than your Powerpoint, then please stop reading now and go back to your well-worn copy of Mein Kampf.)

No, the issue is how you choose to allocate your attention. It's a matter of identifying what's most important. And ironically, that identification takes time.

The Wall Street Journal recently interviewed four CEOs about time management. Jeff Weiner, the CEO of LinkedIn, talked about the value of getting away from daily problem solving and walling off time to think:

Part of the key to time management is carving out time to think, as opposed to constantly reacting. And during that thinking time, you're not only thinking strategically, thinking proactively, thinking longer-term, but you're literally thinking about what is urgent versus important, and trying to strike that right balance.

Steve Ballmer of Microsoft (not surprisingly) takes a more analytical approach: he actually builds a spreadsheet with a time budget for the year.

I budget how much time I'm going to be out of Seattle and in Seattle. I budget what I'm spending my time on -- customers, partners, etc.... I schedule formal meetings and my free time.... I'm not saying when they're going to happen, but I budget all this stuff. I try to make sure that I feel comfortable that I have enough time to...think, to investigate, to learn more, but I have to budget my time.... I give the budget allocation to my administrative assistants, they lay it all out and then anybody who asks for time, they say, '"Steve, this is in budget, it's not in budget, how do you want us to handle it?"

How do you find enough time to do the important stuff? First, make time to decide what's important. And if you don't have time to do that, you don't belong in your job.

Four to-do lists? Try 5S.

My client yesterday showed me her to-do list. Make that her to-do lists. The handwritten one on the yellow legal pad. The messages marked as unread on her Blackberry. The meeting action items listed on her iPad. The messages she flagged for followup in her Outlook inbox. Four lists, four places to look for work that needs her attention.

As I've written about before, 5S for the knowledge worker does not mean putting tape outlines around your stapler or setting rules about how many family photos can go on your desk. That's just a mindless transfer of 5S to the office. What you need to do is translate it for the office -- and that means applying it to the information you manage.

If you're living with four to-do lists, you need 5S. You need a way to organize the tasks so that you can easily see them, assess them, and make rapid judgments about what, how, and when to handle that work. If you're embarking on a scavenger hunt every time you want to plan your day, you're in trouble.

From my perspective, the twin purposes of information 5S are (1) to help surface abnormalities (in this case, work that's not getting done), and (2) to make it easier and faster to access materials. The fewer lists you have, the more likely it is that you'll accomplish those goals.

If, for some reason, you need to work with multiple to-do lists (the iPad for meeting notes, a legal pad for things you remember at your desk, the inbox for stuff arriving via email), that's okay -- but then it's incumbent upon you to 5S those lists each day: review them, consolidate items, and schedule the work in your calendar or on a personal kanban.

You wouldn't want to do something as simple as grocery shopping with four different shopping lists. Why would you want to do something as complex as scheduling and planning your work with four lists?

A Factory of One Webinar Available Through May 15

Last week I recorded a webinar for my book, A Factory of One, with Gemba Academy. It's available for free till May 15. Learn why I consider knowledge workers factories, how tape outlines on your desk don't constitute 5S for you, what flow means if you work at a desk, and how you can bring visual management concepts to the bits and bytes that comprise your work.

The meat of the talk is about 45 minutes long, with a final 15 minutes of Q&A.

You can listen and watch the webinar here.

Faster decisions, less stale coffee

Want to make decisions faster? Want to avoid having your best people squandering their days drinking stale coffee and guiltily sneaking glances at their iPhones? You've heard it before, but here's the data: switch to stand-up meetings.

Bob Sutton recently wrote a piece on the virtues of stand-up meetings. The benefits are not just apocryphal or perceptual: a study found that groups that stood-up while making decisions took 34% less time to make the assigned decision, with no significant differences in decision quality between stand-up and sit-down groups.

Bob goes on to quote David Darragh, CEO of Reily, a New Orleans-based company that specializes in southern foods and drinks:

The importance of the stand-up meeting is that it can be accomplished efficiently and, therefore, with greater frequency. Like many areas of discipline, repetition begets improved results.  The same is true with meetings. The rhythm that frequency generates allows relationships to develop, personal ticks to be understood, stressors to be identified, personal strengths and weaknesses to be put out in the light of day, etc. . . .With frequent, crisp stand up meetings, there can never be the excuse that the opportunity to communicate was not there.

I know a lot of people who've been involved in a stand-up meeting that over time devolves into a leaning meeting, then a slouching meeting, and then finally a sit-down meeting. (Kind of like a reverse "evolution of man" cartoon.) The Wall Street Journal reported on some of the creative countermeasures that people have developed to avoid this problem:

• at Hashrocket, a team passes around a 10-pound medicine ball during stand-ups.
• at Steelcase, they play Elvis's "A Little Less Conversation" as a reminder to keep meetings brief
• at Facebook, one team holds 15-minute stand-ups at noon, sharp: the proximity to lunch serves "as motivation to keep updates short"
• at Microsoft, one group convenes stand-ups in an unheated stairwell

Obviously, there's still a need for longer meetings to address critical strategic issues. But the stand-up is a powerful way to identify problems early, strengthen relationships, and maintain alignment within a team. It's easy to default to the standard way of working (weekly, one-hour sit-down meetings). It's even easier to claim that you don't have the time for daily stand-up meetings. But why would you? I'm willing to bet that most people in your company aren't particularly satisfied with the flaccid, bloated, soul-sucking meetings that devour their calendars each week.

Try something different. Follow Jason Yip's guidelines. See if you don't make decisions faster, and drink less crappy coffee.

First, think about the purpose.

If you haven't yet done so, read the NYTimes interview with Phil Libin, the CEO of Evernote. Phil's focus on value, rather than form, eliminates waste, shows respect for people, and leads to better results. For example, there are no offices or trappings of seniority at the company. In Phil's view, they're not only wasteful, they have a negative effect on people's work:

Nobody has an office. In fact, there are no perks that are signs of seniority. Obviously, there are differences in compensation, but there are no status symbols. You certainly don’t get a better seat or any of that kind of stuff, because they’re just unnecessary. They create artificial barriers to communication. They create artificial things that people focus on rather than just getting their job accomplished. We try to have an organization that just helps you get your work done, and then it’s my job to eliminate all of the risks and all the distractions so you can just focus on achieving. That attracts people who are primarily motivated by how much they achieve.

Phil's effort to improve communication extends to the uprooting any sort of email culture:

We strongly discourage lengthy e-mail threads with everyone weighing in. It’s just not good for that. Plus, it’s dangerous, because it’s way too easy to misread the tone of something. If you want to talk to somebody and you’re a couple floors apart, I kind of want you to get up and go talk to them.

I'm most impressed by Phil's approach to vacations. If you think about the real value of a vacation, it's to enable people to refresh and recharge. The typical fixed two week vacation policy is more about the form than the real value. After all, if your job requires insanely hard bursts of work, or if you're having health problems, you might need more time off. Here's how Evernote handles it:

We recently changed our vacation policy to give people unlimited vacation, so they can take as much time as they want, as long as they get their job done. If you want to take time off, talk to your team, but we’re still measuring you on the same thing, which is, did you accomplish something great? Frankly, we want to treat employees like adults, and we don’t want being in the office to seem like a punishment. We always try to ask whether a particular policy exists because it’s a default piece of corporate stupidity that everyone expects you to have, or does it actually help you accomplish something? And very often you realize that you don’t really know why you’re doing it this way, so we just stop doing it.

(N.B. This vacation policy warms the cockles of my heart, because it's the way I managed my team years ago. It told them to take time off when they needed it, and not to bother reporting it to the HR department. Like Phil, I wanted to treat them like adults.)

It's the "default piece of corporate stupidity" that infects most organizations -- things that exist because that's just the way it's always been done: report and presentation formats, agendas and participants at those giant standing meetings, certain expectations, etc. And it's often the "default piece of corporate stupidity" that saps motivation, leeches passion, and inspires cynicism.

Focus on the purpose and the value. Then figure out how to deliver it. You might be surprised at how much easier it is.

Respect for People, Richard Branson Edition

After delving into the meaning of Dr. Shingo's oft-cited quote about the purpose of improvement, and pontificating about the role of transparency in leadership, I figured I'd lighten it up a bit. And what better subject and spokesmodel for lightening up the mood than Sir Richard Branson? Aside from his well-known business bona-fides, and his irreverent attitude towards accepted business standards, he's not a big fan of neckties:

I don’t know why the tie was ever invented. It’s about one of the few things that Britain has exported successfully.... I often have a pair of scissors in my top pocket to go cutting people’s ties off.

I do think that ties most likely are still inflicted on people because the bosses, they had to wear it for 40 years and when they get into positions of responsibility they’re damned if they’re going to not have the next generation suffer. So ties continue to exist. My lifelong campaign to get rid of the tie has failed miserably.

(Before you inundate me with comments about how cutting off someone's tie might not really be the pinnacle of respect -- please don't. It's a joke.) But I do think Mr. Branson is onto something in his efforts to make people comfortable at work.

I have a nearly pathological aversion to ties myself, but sadly, they tend to be de rigueur in the business world. So I'll continue to cheer Mr. Branson on in his quixotic journey to rid the world of this useless (anachronistic?) item of haberdashery.

Leadership as Transparent as (Ira) Glass

"We never should've put this [story] on the air. In the end, this was our mistake. We're horrified to have let something like this onto public radio.”

These are the words of Ira Glass of This American Life, who on March 16, retracted a show called “Mr. Daisey and the Apple Factory” that had aired earlier in the year.

After the show aired, another journalist pointed out inconsistencies in Daisey’s story, and further investigation proved that it contained significant fabrications. Unable to vouch for the accuracy of the report, Glass issued a press release saying, in part,

Daisey lied to me and to This American Life producer Brian Reed during the fact checking we did on the story, before it was broadcast. That doesn't excuse the fact that we never should've put this on the air. In the end, this was our mistake. We're horrified to have let something like this onto public radio.

In addition to the unambiguous press release, This American Life ran an entire one-hour show retracting Daisey’s story. To me, this is a model demonstration of leadership.

Speaking with Clarity: Glass is absolutely clear about the mistake: “We never should have put this on the air.” He doesn’t mince words or place conditions on the apology, as you often hear (“We didn’t intend to offend anyone by goose-stepping past Temple Beth Israel wearing swastikas and carrying signs that said 'Honk if you love eugenics!,' but if anyone took it the wrong way, we apologize.”)

Accepting Responsibility: Glass accepts full responsibility for the error: “In the end, this was our mistake.” There’s no finger pointing, no blaming of extenuating circumstances, and no passing the buck. He doesn't rely on the classic "past exonerative" formulation that  "mistakes were made" He acknowledges that Daisey lied to him, but blames himself for not fulfilling his fact checking duty.

Exposing the Errors: Glass spends about 20 minutes of the retraction show detailing all the inconsistencies and outright lies in the story. He doesn’t settle for a blanket explanation that buries the errors. Rather, he exposes each and every one of them.

Telling the Truth: It’s one thing to retract the story on the basis of fabrications. It’s quite another to take the time to explain what the actual truth is, so as to ensure that people are clear about the truth. Glass does this as well, employing other journalists with deep experience in China to describe what factory conditions are really like.

For his part, in the retraction show Daisey comes across as an attention-seeking muckraker with the spine of an anemone. He barely acknowledges his lies, tries to justify many of them, and through it all, obfuscates his responsibility for misleading the audience. Here's Daisey responding to Ira Glass's point that people assume Daisey's show is fact, not fiction, because that's how Daisey presents it:

Well, I don’t know that I would say in a theatrical context that it isn’t true. I believe that when I perform it in a theatrical context in the theater that when people hear the story in those terms that we have different languages for what the truth means.

The way Glass and the team from This American Life handled the situation reminds me of Johnson & Johnson's handling of the Tylenol scare in 1982: swift, clear, unambiguous --  clearly placing the interests of the consumer first. It's a model of crisis management. And a model of leadership.

Respect for People, Shingo Edition

  "There are four purposes of improvement: easier, better, faster, and cheaper. These four goals appear in the order of priority."

- Shigeo Shingo

The wisdom of this quote struck home recently, when I was writing my March newsletter on stretch goals. One problem with stretch goals, I believe, is that they focus on outcome metrics, and can therefore be gamed. The cost of a product or service is an incredibly important metric, but it, too, is an outcome metric, influenced by a huge variety of factors. Because of that, when a (non-lean) organization focuses on cost reduction, the most common first step is laying off people. The second most common step is downgrading the product specs, making the product both cheaper and "cheaper." Neither of these approaches are good for the worker or for the customer.

What's fascinating about this quote (to me, anyway) is that Shingo prioritizes worker health and safety above all else. First, the process must be made easier; then -- and only then -- should we worry about product quality, lead time, or cost. To be sure, making a process easier very often improves quality, speed, and cost, but that's not the focus. The focus is on the people making the product or providing the service, not the product/service itself. Putting humans at the center of kaizen is another example of respect for people. As Mark Hamel pointed out with regards to kaizen at Toyota,

Occasionally, the worker generates a great idea around quality or working process improvement. But, the primary focus for the worker is typically around the “humanization of work.“ In other words, it starts with making the work EASIER.

And this jibes with what Jim Womack wrote all the way back in 2006: that instead of focusing on waste, we should focus on unevenness (mura) and over-burden (muri).

In most companies we still see the mura of trying to “make the numbers” at the end of reporting periods. (Which are themselves completely arbitrary batches of time.) This causes sales to write too many orders toward the end of the period and production mangers to go too fast in trying to fill them, leaving undone the routine tasks necessary to sustain long-term performance. This wave of orders -- causing equipment and employees to work too hard as the finish line approaches -- creates the “overburden” of muri. This in turn leads to downtime, mistakes, and backflows – the muda of waiting, correction, and conveyance. The inevitable result is that mura creates muri that undercuts previous efforts to eliminate muda.

Of course, if we make demand more even, and if we avoid overburdening people, we're essentially making the work easier.

Lean is often referred to as a total business system. As I continue to learn more about it, I see more and deeper linkages between areas that I never realized before. This is one example: how kaizen -- properly done -- is not just a way to remove waste or make more money. It's a profound expression of respect for people.

What's Your Job?

Michael Sliwinski of Productive Magazine just published my latest article, What's Your Job? It's adapted from the first chapter of my book, A Factory of One. Download a pdf of the whole magazine here, or get it on your iPad. Check it out and let me know what you think.

Disney's Electronic Whip

What's the purpose of visual management boards? Is it to help identify problems and improve processes? Or is it to instill fear and insecurity?

Steve Lopez at the LA Times shows how Disney hotels use visual controls for the latter pupose:

In the basements of the Disneyland and Paradise Pier hotels in Anaheim, big flat-screen monitors hang from the walls in rooms where uniformed crews do laundry. The monitors are like scoreboards, with employees' work speeds compared to one another. Workers are listed by name, so their colleagues can see who is quickest at loading pillow cases, sheets and other items into a laundry machine.

Isabel Barrera, a Disneyland Hotel laundry worker for eight years, began calling the new system the "electronic whip" when it was installed last year. The name has stuck.

Employees in the Anaheim hotels are required to key in their ID when they arrive, and from then on, their production speed is displayed for all to see. For instance, the monitor might show that S. Lopez is working at an efficiency rate of 37% of expected production. The screen displays the names of several coworkers at once, with "efficiency" numbers in green for those near or above 100% of the expected pace, and red numbers for those who aren't as fast.

Measuring productivity among hotel workers is apparently common in the hotel industry: how fast are rooms being cleaned, how quickly is laundry turned around, etc. That's not so different from the measurements that many organizations take. However, there's a huge difference when the measurements are used to identify problems in a system or process in order to aid in improvement activities, and when they're being used to "motivate" workers.

"I was nervous," said Barerra, who makes $11.94 an hour, "and felt that I was being controlled even more."

According to Barrera, the whip has led to a sort of competition among workers, some of whom have tried to race to the head of the pack. But that has led to dissension and made other employees worry that a reasonable pace won't be enough to keep the boss happy. Barrera and Beatriz Topete, an official with Unite Here Local 11, said employees have been known to skip bathroom breaks out of fear that their production will fall and managers will demand an explanation. They say they felt bad for a pregnant employee who had trouble keeping up.

In Disney's case, this system is -- predictably -- doing the polar opposite of Dr. Deming's precept to drive out fear. With no control over the system, and no ability to make improvements, workers are forced into a helpless chase after some arbitrarily defined level of productivity. It's clear that no one knows how the targets were set and what levels will "keep the boss happy." To Deming's point, if the system in which people work accounts for 90-95% of performance, simply displaying people's production speed is less than helpful. It's toxic.

I'll qualify my blog post at this point to say that I don't know anything about the journalist who wrote this piece. Is he a muckraker? Is he biased? Did he truly investigate this situation by talking to management as well as workers? I don't know. However, I can say that the presence of fear and uncertainty is a strong indicator that, from a lean perspective, there's a problem at the Magic Kingdom.

More broadly, the misuse of these visual controls is a powerful demonstration that lean isn't about tools. Used properly, Disney's flat-screen monitors could be similar to an andon, alerting management to a problem in the system, or in employee skill development, or in process design. Used as a instrument of measurement for punitive purposes -- well, all you get is an electronic whip.

What would Phil say?

My friend Eric works in his company's internal consulting group. A big part of his job is preparing Powerpoint decks and presenting them to senior management. This is how the process currently works: the Senior VP of a group -- let's call him Phil --asks for an analysis. There's no formal meeting between Phil and Eric in which they discuss the objectives and the type of analysis Phil is looking for. Phil is very busy -- too busy -- to meet with Eric for any length of time. In fact, Phil is too busy to ever meet with Eric during the project. Consequently, Eric and his team are flying blind: they don't really know what Phil wants, they don't know what kind of analysis he's looking for, and they don't know how he wants it presented.

So what happens? Everyday, Eric and his team ask, "What would Phil say about this? What would Phil say about that?" It's a giant guessing game that they always lose. Because when they do finally present to Phil, he inevitably says, "That's not really what I was looking for." And back Eric goes to re-work the analysis.

Eric says that the final two weeks before a presentation are almost all waste. His days are consumed with guessing and re-guessing the content and the precise phrasing of the text on the slides. ("Phil doesn't like it when we say 'red ink.' Phil doesn't like it when you have more than three conclusions on one slide.") And of course, the rework is enormous.

What's remarkable about this situation is that Eric's company is widely admired for its operational efficiency. Eric himself likes the company and the executive team that he occasionally works with. But even in a reasonably well-run company, you see this kind of pointless, and utterly avoidable waste.

When lean thinkers talk about going to the gemba, we often think about going to the factory floor or the nurses' station or the mortgage processing desk. But there are other gembas, too. For Phil, Eric's office is a gemba: that's where valuable business analysis is being performed. Phil should be visiting this gemba on a regular basis to see what work is being done, to find out what problems exist, and to help solve them. But he doesn't. He thinks he's too busy to do his job in that way.

This results in work coming to him in large batches (in Eric's case, 2-3 months of work). It also inevitably necessitates inspecting quality in at the end, rather than building it in from the beginning, with all the waste that entails.

As a leader, it's your responsibility to ensure that there's clarity surrounding daily work. That means going to your team's gemba on a regular basis and coaching them through their work.

Without that discipline, they'll likely be speculating about what Phil would say -- and getting it wrong.

Let's treat our employees more like machines.

My friend Elizabeth has what seems to be an enviable job. She's the head of global product development for a cool consumer products company. You can see her company's logo all over the streets of New York and the trails of Yosemite. Elizabeth is running on empty. She says that feels like she's a farmer: she gets up at 4:30am just to get on top of her work. She has 18 direct reports, and spends so much time buried in the weeds of product development meetings (moss-colored buttons or spruce-colored buttons?) that she never has the luxury of thinking -- really thinking -- about the strategic direction of the company product. She rarely has time to mentor or guide her team, either: she's gone from weekly meetings to bi-weekly, and she cancels more often than not. Oh, and the executive team has requested a 15% increase in sales for 2012 -- which means more product SKUs and more development work.

Linda Duxbury, a business school professor at Carlton University, writes often about "corporate anorexia," which is the point at which the volume of work to be done simply outstrips the capacity of the people in the system to do it.

Corporate anorexia is an apt description of Elizabeth's circumstances. I mean, really: 18 direct reports? Her company simply doesn't have the human infrastructure it should have. Its growth has been built on the backs of people like Elizabeth getting up at 4:30am -- and that's just not sustainable.

Everyone knows that machines have a fixed production capacity: you can only get a finite number of widgets per hour out of it. Everyone knows that machines need downtime for maintenance, or they'll break down. Treat your machines with respect -- don't overload them, don't forget about supporting and maintaining them, or you'll have an expensive pile of scrap metal on your hands.

Companies often talk about how "people are their greatest asset." And yet, they often treat their people worse than their machines. They overload them. They don't provide the support they need. (18 direct reports?) They expect 24/7 response to email and voice mail.

I don't know about you, but if this is the alternative, I'd rather be treated like a machine.

(Dis)Respect for People, Hospital Edition

How much do you about what's really going on at the front lines of your company? I was talking to a retired physician the other night, and he told me a story that sums up how  a lack of knowledge can lead to disrespect for people -- especially in academic medicine. Forty years ago, when he was a 32-year old junior attending physician, he researched the possibility of having his hospital become a 911 center -- which means that they'd accept public EMS ambulances, not just private ones. To his surprise, he found that the hospital was already accepting them; in fact, about 1/3 of the ambulances were public.

At a meeting, he told both the president of the hospital and his boss, the chief of surgery, that the hospital should become a formal 911 center because they were already serving that function. The meeting didn't go well:

Roger: "We're already accepting public ambulances. We should just go ahead and become a 911 center." Chief of Surgery: "No, we don't accept them. Only private ambulances come here." Roger: "Actually, that's not right. I looked into it. About 1/3 of our trauma visits are from EMS ambulances." Chief of Surgery: "And I'm telling you that we don't accept them. I'm the chief of surgery, I've been here a long time, and I know: we only take private ambulances." Roger: "But I looked into it, and that's not the case." Chief of Surgery: "I'm telling you, you're wrong." Hospital President: "Son [he's from the south], when the President of the Hospital and the Chief of Surgery tell you that we don't accept EMS ambulances, then we don't accept EMS ambulances. Is that clear? Roger: No, it's not. It's wrong. And I'll get the data to show you.

Sure enough, Roger gets the hospital logs from the previous year and finds that, in fact, about 1/3 of ambulance visits were EMS vehicles. He sends his report to the hospital president and chief of surgery with a note that says, "Isn't data wonderful?" Shortly afterwards, they applied to become a 911 center.

You can take away a lot from this story -- not least of which is how much courage Roger had in standing up to his bosses, which in medicine (like the military) is pretty difficult to do. (Roger says that data made him brave.) But for me, the big lesson is how disconnected leadership can be from the daily activities of front-line work. They may think they know what's going on, but when they get to the rarified air of the executive offices, it's far too easy to lose track of what the customer service reps, or the sales team, or the credit department deals with daily.

Going to the gemba is the antidote. You have to see for yourself what's going on where the work is being done. If you don't know, you're at serious risk of disrespecting your workers.

What's inhibiting your team?

How much damage is caused by small, irritating, daily problems like pointless meetings, ambiguous communication, and frustrating fire drills? A few months ago, my friend Matt May interviewed Teresa Amabile, author of the new book The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work. According to Amabile, those little problems can be surprisingly toxic:

Of all the things that can cause people to have lousy inner work lives, the single most important is experiencing setbacks – feeling stalled or blocked in the work, or having a sense of moving backward. Amazingly, the negative effect of setbacks on emotions, perceptions and motivation can be 2-3 times greater than the positive impact of progress. This means it’s especially important for business owners and managers to reduce or eliminate forces that inhibit people’s ability to feel like they are getting somewhere on something that matters. Inhibitors can be very mundane – like a goal that isn’t sufficiently clear, or a person in the organization who hoards information – but they can be deadly.

What's really striking about Amabile's claim (and it's backed up by considerable research) is that people probably don't even notice the inhibitors, because "that's just the way it works around here." They're small and commonplace, and yet they exert a powerfully baleful influence on people's inner work lives, their creativity, and their passion for their work.

As an example, the executive team at one of my clients subscribes to a variety of market research reports. These monthly and quarterly reports are really impressive -- huge 3-ring binders that contain sales data that's been sliced and diced better than a pastrami at a kosher deli. The problem is that management hasn't defined standard metrics, so if they dig long enough, they can find anything they want in the data. Consequently, every few months there's a full-scale executive fire drill when someone on the team finds a bit of data that seems to indicate they're losing ground to a competitor. Panicked, the president will call the exec team, along with several members of marketing and sales, into the conference room for a 90 minute analysis and debate about how they should respond.

The people in marketing and sales who end up with an extra day or two of work re-analyzing the reports roll their eyes when I ask about this. They're frustrated by the lack of a consistent data dashboard to guide them, and they hate the havoc and pointless extra work it causes. As Amibile would point out, although these fire drills constitute a relatively small "inhibitor" to their ability to make progress on their work, they're soul-sucking experiences for all involved.

Sadly, the president doesn't realize this, because the data fire drills don't affect his ability to get his work done.

Take a look at the niggling annoyances in your office -- or better yet, ask people what annoyances they deal with. What pointless meetings do they have to attend? What forms are difficult to use? What goals are ambiguous? What non-value added work are they forced to do?

Amabile's theory about the importance of "small wins" ties in beautifully to the small improvements that lie at the heart of kaizen. Improvements don't have to be earth-shatteringly large to have a significant impact on the creativity, happiness, and engagement of your staff.

When you can see it, you can manage it.

My friend Paul works at a company that assesses specialty items -- Ming vases, Bugatti autos, antique crystal decanters, Pez dispenser collections, and the like -- for insurance companies. Most of their adjusters work from home. This situation creates a real problem for Paul. It's difficult to see how much work each person has in their queue, because no one is co-located. It's also difficult to see if people are falling behind in the anticipated throughput of their work. If you think about a traditional factory, it's easy to see what work is in the queue -- just look at the parts on the assembly line. It's also easy to see what work is supposed to get done that hour and that day: there's a big board at the head of the line listing hourly production targets and actuals. If there's a problem with production, it's easy to spot.

But that's not true at Paul's company. With everyone scattered around the country, and with the work existing largely in the form of electronic files, it's tough to tell what the current state is. The work is invisible. Traditional visual management tools like centrally located whiteboards won't work, because so few people are at the office. Paul tried making people's Outlook calendars public, but that didn't provide a clear picture of the status of each claim, or the workload on each person. Some of the staff complained about heavy workloads, but it was difficult to get a handle on the total volume of work, and the load on each person.

Paul designed a series of interlocking spreadsheets that showed each person's workload associated with each claim, and color-coded the backlog. Here's one of the forms:

In this screenshot, you can clearly see each person's workload. Even cooler is the "thermostat." Less than 5 days of work in the queue, and the thermostat is green. 6-10 days of work in the queue, and automatically turns yellow. Over 10 days, and it automatically turns red. As new work comes in, management can level-load the tasks by allocating them appropriately across the team of adjusters. More importantly, this visual management board acts as a signal that there may be a problem ("Why is Kate so backed up?"), and it helps identify problems in the adjustment process ("What is it about the Lee claim that makes the research take 1.7 days?") so they can engage in kaizen.

Paul is the first to admit that these spreadsheets aren't perfect. But it's a good first step towards understanding the current state and identifying process areas for improvement. Prior to this, the only thing Paul knew for sure was that Kate complained she was overworked -- which wasn't very helpful. And they only addressed the overall status of their backlog at weekly meetings.

The challenge -- and the benefits -- for you are clear. Making your team's work visible enables you to improve it. It may be difficult due to the nature of the work and the physical location of the team, but it's seldom impossible.

Remember: when you can see it, you can manage it.

Librarian vs. Archaeologist

Michael Schrage writes at the HBR blog that getting organized is mostly a waste of time:

When it comes to investing time, thought and effort into productively organizing oneself, less is more. In fact, not only is less more, research suggests it may be faster, better and cheaper.

IBM researchers observed that email users who "searched" rather than set up files and folders for their correspondence typically found what they were looking for faster and with fewer errors. Time and overhead associated with creating and managing email folders were, effectively, a waste.

Six years ago, I would have disagreed with Schrage: I recommended that people embrace their inner Linnaeus and set up elaborate folder structures for their electronic files and their email. The goal was a comprehensive taxonomy that would allow people to locate any message in seconds. But when Google desktop can find anything within .03 seconds, why bother taking the time to do all of this organizing? Yes, you'll have to cull through some irrelevant results, but the time you spend sorting the informational wheat from the chaff is far less than the time you'd spend painstakingly cataloging and filing each individual message and file. (And that's assuming that you don't mistakenly put the Henderson invoice in the Hernandez folder; then it's gone forever.)

As Schrage points out, this approach is actually very much in keeping with lean thinking, insofar as we're moving from a "push" approach to information management -- organize now, whether or not you need it -- to a "pull" approach -- organize and sort your information when you need to find it.

What Schrage doesn't address is the reality that not all of our information is electronic and suitable for search. There's no Google search for carpet swatches and spec sheets, Etruscan pottery fragments, or pathology samples. There's also no random search for plenty of publications that aren't digitized. For these things, there really is value to "getting organized."

Even when information is electronic, sometimes it's easier to organize it than to search for it. My wife, for example, handles the scheduling for the 13 interventional radiologists in her section. Each month she sends an email to her colleagues asking them if they have any vacation requests, conference commitments, or other scheduling issues she needs to account for. She'll get responses like this:

"I'll be at the ASCO conference from Jan 22-26." "I'm taking my kids skiing from Jan 20-24." "I'm visiting Dana Farber Cancer Center Jan 18-19." "I'm taking a couple days off from Jan 25-28."

With no keywords, there's no way to search her mail for these messages. And the messages can't even be threaded, because people don't always respond to her original email. As a result, she keeps distinct mail folders to handle scheduling requests as they come in.

I think the organized vs. disorganized dichotomy is a false one. Your information takes many forms, and requires different treatment. Sometimes it's better to be a librarian , and sometimes it's better to be an archaeologist. The method you take depends on the problem you're trying to solve. That's real lean thinking.

Rethinking Performance Reviews for 2012

The first chapter of my new book, A Factory of One, addresses the need to define value in your work. This is a critical first step because, in my experience, organizations often spend time, effort, and energy improving a process that creates no value -- and therefore shouldn't be done in the first place. (Incidentally, you can download a pdf of this chapter for free here.) The flood of performance reviews that come at the end of the year reminded me of how important this step is. A recent SmartBrief on Leadership survey demonstrates just how valueless performance reviews really are:

Incredible: 58% of the responders say that the reviews are pretty much worthless -- and you can bet that a significant proportion of the other 38% has no value either. As the Wall Street Journal reported,

One academic review of more than 600 employee-feedback studies found that two-thirds of appraisals had zero or even negative effects on employee performance after the feedback was given.

Samuel Culbert, professor of management at UCLA, is probably the leading voice in attacking the pointlessness, ineffectiveness, and immorality of traditional performance reviews; in his view, the performance review should be replaced by the performance preview -- which, from a lean perspective, makes total sense: after all, the PDCA cycle begins with planning, which is what the performance preview is all about.

In light of these results, you have to wonder why companies have reviews in the first place -- and why they'd want to have even more of them. Fifty-one percent of companies conduct formal performance reviews once per year, but now 41% of firms do semi-annual reviews. As Culbert tartly asks, "Why is doing something stupid more often better than doing something stupid once a year?" Or in my language, why improve a process that has no value at all?

I think that a better approach for 2012 is to ditch the performance review and move towards employee performance PDCA:

1. Grasp the Situation: Identify the goal for the week or month 2. Plan: Make a plan for how to accomplish that goal 3. Do: Follow the plan 4. Check: Determine whether or not the plan has been achieved, and why (or why not) 5. Adjust: Make changes as needed to help the employee reach the next goal

This approach may sound mechanistic, but if you think about it, it gives you a fighting chance at achieving that things you really want: better communication. Closer cooperation. More salient feedback and mentoring. Improved performance. Attainment of key goals.

If this sounds like it's too much work, or you don't think it will fly in your organization, fine. Just stop wasting your time -- and more importantly, your employees' time -- on the traditional performance review. Your employees will thank you.

A Factory of One is Finally Available!

I'm pleased -- giddy, thrilled, quivering -- to announce that my first book, A Factory of One, is now in stock and available to ship from Amazon. The book explores in detail a theme that I've been writing about in this blog for the past couple of years: how to apply lean concepts and tools to individual work in order to improve performance, reduce waste, and deliver more customer value. In my view, we too often focus on the entire value stream or a large process within that value stream, and ignore the way people work within that value stream.

Many bloggers and lean thinkers within this community have provided support and guidance for me during the writing of the book, and have rallied around me for the book launch as well. My thanks to all of you.

Read Matt May's recent review here, and his article on 5S and K.I.S.S. here. And, of course, you can read much more about the book and download a free chapter on the book's website, www.afactoryofone.com.