Case Study - How to Make an Office Lean

Classic Lean Techniques Worked Wonders at a New York City Government Office Originally published Wednesday, September 05, 2007, IndustryWeek

Over two months starting in March, the staff at a bureau within a large NYC municipal agency was taught how to apply lean manufacturing principles to their work. They did not make value stream maps, nor did my company try to change the system in which people worked. Rather, the focus was on improving the personal work habits of each person so that they could be as efficient as possible irrespective of the overall business process.

At the time of our continuous improvement efforts, the staff at the bureau was struggling. Mayor Bloomberg and his no-nonsense Commissioner had raised expectations for responsiveness. At the same time, unwieldy bureaucratic processes and systems slowed people down. Chronic interruptions undermined people's ability to focus on their work. And no one had an effective approach to managing the increasing burden of email. As a result, work piled up and deadlines slipped. People were overwhelmed and felt as though they had no control over their jobs.

The Discipline Of 5S

We began with rigorous application of 5S principles to each person's workspace. Just like manufacturing workers, knowledge workers need to keep their workspaces clean and organized in order to perform efficiently. This means more than just cramming papers in a filing cabinet and shoving the stapler (along with along with broken pencils, dry highlighters, disposable chopsticks and soy sauce packets) in the top drawer. They had been doing that already, and found that they were buried in an avalanche of low-value or zero-value detritus.

Instead we segregated their information into three categories -- working, reference and archive -- and culled the obsolete garbage. This structure enabled them to reduce the time wasted in looking for their work and gave them more time to actually produce value. More importantly, the staff's rigorous assessment of the information they managed enabled them to identify the activities that were just waste.

The result? A 36% reduction in time spent looking for information, and a 95% reduction in the number of emails rotting in inboxes.

Why was the trimming of the email inboxes important? When inboxes are gorged with junk like Las Vegas-era Elvis, the terrible "signal to noise" ratio makes it difficult to identify and respond to what's truly important. Moreover, each email contains information and ideas that are part of the value streams that flow through the staff. When that information gets stuck in someone's inbox -- when the value stream stops flowing -- you're looking at nothing more than another form of excess inventory.

Keeping The Value Stream Flowing

In a manufacturing environment, the assembly line keeps the work-in-process moving at a pre-determined pace. People must handle the work as it comes to them, or the line stops. But the office environment is different. There's no visible production line, and that fosters sloppy work habits.

At this bureau, receiving, processing, storing, distributing, and tracking the information that comprise each person's job is a formidable challenge. (It is the government, after all. Even under Michael Bloomberg.) Unfortunately, most knowledge workers are undisciplined in executing these tasks. They feebly push papers from one side of the desk to the other. They shuffle piles. They read emails, mark them as unread, and take no action. They start working on one thing, lose focus, and move onto something else, resulting in piles of half-completed tasks. The value stream stops flowing. As a result, deadlines slipped and coworkers waited idly for information. Muda flooded the system.

So we refocused people's efforts on keeping the value stream moving. Staff learned to deal with the work that entered their systems -- an email, a phone call, a memo, a project, -- by taking one of four courses of action: doing it, delegating it, designating time to address it, or dumping it. These are the "4Ds." When workers rigorously applied the 4Ds, nothing returned to the inbox; value always moved forward.

The staff's new work habits led to a 40% reduction in the amount of time spent working on backlog (which is a form of excess inventory in a lean system), and a 25% reduction in time spent processing emails.

Smoothing The Flow

As in any modern organization, no one at this bureau works independently. Meetings abound, multi-tasking is rampant, and frequent interruptions make it difficult for anyone to focus on their high value activities. As a result of these interruptions, value didn't flow smoothly: people forgot critical tasks and commitments, and generally felt overwhelmed and out of control. Imagine a worker on an assembly line being pulled away from his station every 11 minutes to join a meeting or answer a question: workers would feel stressed, the line would grind to a halt, and the defect rate would skyrocket.

We countered these problems by implementing individual work habits that smoothed the flow of the value stream. Staff cut down needless interruptions (i.e., interruptions about non-urgent issues) with "meeting corridors" -- times that each employee was available for meetings or conversation. They scheduled and blocked out their own value work so that they could focus on those tasks. They established sustainable "service level agreements" for email responses, rather than supporting the expectation of instant response. And they cut down on the amount of multi-tasking in favor of "single tasking," creating the understanding that doing one task at a time is actually a faster and more efficient way of doing one's job.

These changes resulted in a 35% reduction of time lost to interruptions, and a 35% decrease in overtime -- indicating that people were getting more done in less time.

It's Not Just About The Handoffs

Most lean office initiatives are concerned exclusively with making value stream maps and creating a more efficient business process. But that's only part of the solution to reducing muda. No matter how lean the system, if the people who work within it are inefficient, you'll still have waste. It's like a relay race: you can make the baton handoffs clean, fast, and efficient, but if the runners are slow, they're going to lose.

That's where lean work habits come into play. These habits ensure that people are running fast - that when they're reconciling the budget, or planning a conference or creating a marketing plan for a new product, they're working as efficiently as possible.

Journalist Charles Fishman points out that a typical Toyota assembly line in the United States makes thousands of operational changes in the course of a single year. He comments, "that number is not just large, it's arresting, it's mind-boggling. How much have you changed your work routine in the past decade?"

Remember, lean is not just about the system. It's about the people. And isn't it time that you addressed how they -- and you -- work?

Case Study - Making Time For Business

Originally published in California Lawyer Magazine

Here's How to Find Time for Business Development You're a partner at a large firm. You do excellent work and are in demand, but you aren't building your book of business as quickly as you'd like. Even though bringing in new clients is crucial to your future success, you haven't been able to find time to focus on business development. Your daily schedule is endlessly clogged with time-sensitive client demands, partner requirements, and committee meetings. Cramming in "biz dev" seems impossible, even though it should be a high priority. Of course, when there's too much work to fit into the day, no amount of "time management" will help--no magic can turn five minutes into six. But using a system to organize your work and manage your commitments can ensure that you won't lose sight of what's really important to your career--and it can enable you to dramatically increase the time you devote to developing new business.

If You Don't See It, It's Not Important Attorneys agree that business development is vital. Yet at their offices their biz dev files are invisible, completely buried beneath piles of client matter. New prospects lie dormant among existing client demands. Even when lawyers try to begin biz dev they lose focus, as the relevant information molders beneath mounds of other documents. The solution? Create a filing architecture that separates "working" client and business development files from lower value, reference material. Note the 80/20 rule: Eighty percent of the work is done with 20 percent of the paper. Keep the important 20 percent--the working files--close at hand. Move the rest to a file cabinet or a drawer farther away. Clearing away junk and lower-value documents makes working biz dev files more visible, improves your ability to focus on that activity, and eliminates time lost searching for needed information. (As a bonus, the discipline of personal organization will help you delegate work to others.)

Put Away the Firefighter's Helmet Too many attorneys begin the day reading through their email in-box. No doubt, reputations depend on near-instantaneous client service. But that level of service comes at a cost: Attorneys become reactive rather than proactive. No matter how quickly they respond, they are always fighting fires, always behind the curve. You can focus instead on "living in the calendar." Rather than vainly hoping for a free afternoon for business development, carve out time for it. Structure your schedule each day so you stay on top of ongoing commitments while still allocating appropriate time to forging relationships with prospective clients. Additionally, set Outlook or Lotus Notes to open in the Calendar, rather than the Inbox. This one adjustment will keep you focused on daily and weekly plans. The first thing you'll see each morning is your schedule, not the avalanche of emails that poured in overnight. Of course, you still must respond to those messages, but at least now you'll be more cognizant of your daily priorities. Living in your calendar also helps you delegate work more effectively. As you become better at tracking client commitments, you can hand off work to associates with clear check-in dates and deadlines--and that means more time for business development.

Taking Action The final step is creating a clearly defined plan of action. When it comes to biz dev, most lawyers don't know precisely what they'll do or when they'll do it. That's because "business development" is a squishy concept comprising many different activities. It's hard to make progress when you don't have specific tasks to complete. You can get around this problem by explicitly defining biz dev's core actions--internal networking, external networking, activities that raise your visibility--and then putting them on the calendar. Make lists of prospective clients and create recurring calendar appointments to stay in touch. Schedule time to write and edit articles for journals. Identify conferences to speak at, set specific times to contact the organizers with proposals, and connect with your associates to develop the presentations. The steady accretion of these activities will result in more biz dev activity--and it will result in winning new clients.

Achieving Measurable Results After just a few months of structured activity, you will begin to see results. I have personally seen junior partners increase their average promotional time by almost 25 percent. Although there are no guarantees, creating clarity in your workspace--both physically and mentally--will make you more effective at developing business.

Dan Markovitz is president of TimeBack Management, a consulting firm that helps lawyers make more time for business development.

Case Study - Florida Community Health System

Situation: Nurse supervisors at a six-facility community hospital in Florida were heavily involved in Lean initiatives in clinical areas of the hospital. They had made great strides in reducing clinical waste through the application of 5S principles. However, these efforts stopped at their office doors, and significant inefficiencies crept into their administrative work. These inefficiencies prevented them from spending as much time as they wanted delivering patient care. Intervention: We showed them how to apply lean principles – particularly 5S – to the information they managed. This allowed them to spot problems in existing administrative processes, and helped them to understand that 5S is a way of thinking, not just a way of organizing the supply closet. The program also helped identify opportunities for eliminating other administrative waste.

Resolution: Participants reported that the training:

• “Provided a clearer understanding of 5S, flow & purpose”
• “Provided the initial steps to an organized standardized process”
• “Helped me understand the concept of visual management”
• “Presented tools to work more efficiently and effectively”

Case Study - SF Area Law Firm

Situation: Four junior partners at a large San Francisco-area law firm did excellent work and were in high demand, but weren’t building their books of business as quickly as they wanted. Each one knew that bringing in new clients was crucial to their future success at the firm, yet none of them had been able to find the time in their days to actually focus on business development. Their daily schedules were sclerotic with non-negotiable client demands, partner requirements, and committee meetings. Cramming in business development activities seemed impossible, even though that work was arguably their highest priority. Intervention: We identified three areas in which a small change would yield large results. First, we created a filing architecture that separated the essential business development files from lower value, reference materials. Making the business development files more visible improved the partners’ ability to focus on their goals (bringing in new clients) and eliminated the time lost in searching for the information they needed. Second, we moved their daily activity focus from their email inboxes to their electronic calendars by actually scheduling their critical tasks. This shift made them more proactive rather than reactive, and ensured that they had time each week for business development. Third, they explicitly defined the core actions that comprise “business development”: internal networking, external networking, and activities to raise their visibility – and then put those on the calendar.

Resolution: After two months of training, the results were in: the four partners increased their average promotional time by 24%, from 25 hours to 31 hours per month.

Case Study - Non-Profit Organization

Situation: A NYC-based non-profit organization was growing rapidly—from 5 employees to 56 in less than one year. However, the extra staff didn’t alleviate the burden on the executive team, and in fact, decisions took longer than ever. Intervention: We realized that the new staff were unable to shoulder the operational and managerial load of daily work because there was a fundamental mismatch between their responsibility and their authority: although they were given responsibility for certain areas of operation, they didn’t have the power to make decisions. As a result, all decisions funneled up to the executive team, creating massive bottlenecks. We identified the common decisions that needed to be made in each role and defined financial parameters within which each person could make decisions without approval.

Resolution: The executive team was freed from weighing in on all decisions, staff morale increased significantly (according to internal surveys), and major initiatives in the following year were all launched on time.

Case Study - Medical Device Manufacturer

Situation: Senior members of the operations group at a major biomedical device manufacturer didn’t have time to focus on their critical work, largely because they were spending too much time in non-essential meetings. Intervention: We conducted an “A3” analysis to fully grasp the current conditions, quantify the costs to the company, identify root causes, and develop countermeasures. The analysis revealed that they were spending approximately nine hours per person per week in meetings with no real purpose, and more damagingly, that meetings were set according to a schedule, rather than in response to real customer demand. We set up a file on the shared server for information updates, initiated a system of ad hoc 1:1 meetings to address most issues, and reserved group meetings for more complex problems.

Resolution: Meeting commitments were reduced by one-third – 56.5 hours per month – and senior staff had additional time to drive projects to completion.

Case Study - NYC Municipal Agency

Situation: The staff at a bureau within a large NYC municipal agency was struggling. Mayor Bloomberg and his no-nonsense Commissioner had raised expectations for responsiveness. But people had difficulty in finding information they needed, chronic interruptions undermined people’s ability to focus on their work, no one had an effective approach to managing the increasing burden of email, and most importantly, people lacked a process for consistently and systematically dealing with incoming work. As a result, work piled up and deadlines slipped. People were overwhelmed and felt as though they had no control over their jobs.  

Intervention: We introduced a comprehensive organizational system for both paper and electronic files that reduced the time wasted in looking for information. This enabled staff to spend more time creating value. We also introduced a simple system for dealing with the daily inflow of work, especially email. We taught fundamental work habits that created uninterrupted “space” for people to focus and concentrate on their critical tasks. Finally, we gave the staff a simple planning tool that helped them track their projects and ensure that they were moving forward.

Resolution: Post-training surveys revealed dramatic improvements: a 36% reduction in time spent looking for information, a 25% reduction in time spent processing emails, a 35% reduction of time lost to interruptions, and a 40% reduction in the amount of time spent working on backlog. The vast majority of participants (91%) reported at least a 10% increase in productivity. One participant said, “I am now able to manage discrete pieces [of work] better, see progress, and not feel overwhelmed. Moreover, I am able to spot possible barriers to forward motion better.”

Stop demotivating your employees.

In my September newsletter (sign up for it here), I write about the bottlenecks that occur when a manager delegates responsibility for a job without delegating the authority to actually get that job done. It occurs to me that this kind of mismatch between authority and responsibility creates bigger problems throughout the organization.

Low Responsibility, Low Authority: here’s the classic recipe for apathetic, demotivated workers. Customer service people who don’t have the power to solve problems. Assistants who don’t get one-on-one time with their execs. These are the people with glazed eyes waiting for the five o’clock bell to ring, who have no energy or desire to help improve the company.

High Authority, Low Responsibility: here’s the blueprint for installing a tyrant of minutiae. The person in finance who insists that you fill out your travel expense form in blue ink, not black – or for that matter, that you use their form, instead of your spreadsheet version of it that does the math for you. The person at the DMV counter who sends you to the back of the line because you forgot to put your middle initial on form 2976A/3. These people make life miserable for everyone and will never leave, because they’ve built a comfortable empire.

High Responsibility, Low Authority: this is the grey world of the frustrated strivers. Nurses who can’t make changes to procedures that would allow them to spend more time with patients. Product developers who are told to just make what the sales department demands. You can find these people polishing their resumes as they look for another job.

High Responsibility, High Authority: this is where you want your people to be. They have responsibility for a job, and the authority to accomplish it. These people are able to contribute to growth, improve performance, and move the organization forward.

Here’s the thing: the apathetic, the tyrants, and the frustrated—they could be anyone in the company. The engaged, committed workers are no better than the others. They’re just in jobs that allow them to exercise autonomy, achieve their goals, and strive for greatness.

Or, as David Sirota, Louis A. Mischkind, and Michael Irwin Meltzer wrote back in 2006:

Most companies have it all wrong. They don’t have to motivate their employees. They have to stop demotivating them.

Limits are good

Kurt is the COO of an innovative non-profit that marshals corporate resources to address problems in its greater municipal area -- education, pollution, transportation etc. Business is good for Kurt, and opportunities abound. He's been to Shanghai twice in the past year to coordinate with businesses there; he's leading an exciting new cyber-security initiative between government and industry; he's involved with an program to improve outreach to existing member corporations; and he's leading the charge to recruit new corporate members. There's only one problem: corporate membership is down. Attrition is high, because member companies feel that they don't get enough attention. In fact, it's only increased since the non-profit started pursuing some of its new programs. Which is sort of like saying that your bank does a great job of providing free wi-fi and donuts in the lobby, but it has an unfortunate tendency to lose track of your money.

You see this problem all the time. Companies can't execute on the simplest and most critical tasks, because they're trying to do everything. They pour resources into entering a new market but neglect their existing customers. They develop sexy new products but forget to update and improve their current products. Individuals do the same thing: they take on high-profile new projects but stop attending to their existing responsibilities. Reach > grasp.

Jeffrey Pfeffer, professor at Stanford University's business school, tells this story:

Gary Loveman, CEO of Harrah's Entertainment, is someone who gets this. Visiting Stanford one day, he told my class that when he entered the company as COO he reduced most executives' job scope, because he believes that people don't do very well processing complex agendas and that success mostly comes from effort focused on the most critical and achievable objectives.

Your most limited resource isn't money. It's time and mental focus. Not only are there a finite number of hours in a day, there's a finite amount of processing and decision-making power in a day. As an individual, that means that you've got to ruthlessly prioritize the areas in which to pour your attention. As a leader, that means that you must constrain the job scope of each person on your team, like Gary Loveman.

Kurt isn't to blame for the high attrition rate at his non-profit. It's his CEO's fault. He's a brilliant thinker who discovers opportunities all the time. . . and then dumps responsibility for executing them upon Kurt. Without the discipline to say no to some of them, or the willingness to match managerial resources to his agenda, the CEO is dooming the organization to a future of unrealized expectations, half-baked initiatives, and a declining membership.

Limits are real. Acknowledging them is not a sign of weakness or timidity. It's a sign of pragmatism that will help you get to where you want to go.

A life preserver for drowning rats.

In last week's blog post, I wrote that Jeff Kindler, the former CEO of Pfizer, was

thoughtless about the demands his communication style placed on his team and the results of that style. By making all his questions a matter of supreme urgency for his team — and let’s face it, communicating via BlackBerry at all hours of the night screams, "PAY ATTENTION! I’M IMPORTANT!" — he sowed the seeds of his own demise. Part of your role as a leader is to help people distinguish among levels of urgency and importance. Cramming everything through one communication channel — whether that’s email, IM, text message, or meetings — is a recipe for disaster.

One of my clients has taken this concept to heart. They don't have a leader who abuses his BlackBerry, but they do have an awful lot of engineers who are drowning like rats in the flood of communication -- particularly phone calls and emails --  within and between their teams. As a result, they can't distinguish between critical and time-sensitive issues like a major product flaw, and trivialities like the new flavor of coffee that they company has put in the machines.

Their situation is hardly unique, of course. But unlike most groups who simply wave their hands inertly and bemoan their fate, they're actually doing something about it. This is their new communication protocol:

Okay, this protocol isn't a breakthrough along the lines of, say, cold fusion. (Or duct tape. Or Oreos, for that matter.) But it does create clear expectations and guidelines to help the engineers manage the communication and information flow that was previously threatening to inter them.

Pay attention to one critical consequence here: everyone has agreed that email is NOT to be used for urgent or complex issues. This agreement really is significant, because it unshackles people from their BlackBerries during meetings, or product development work, or strategic planning. Or their kids' soccer games. Or dinner. Or sex. Which means that there's now a fighting chance to have some uninterrupted time to, you know, think.

This protocol might not work for you. Every company has an idiosyncratic culture and needs. The important thing isn't how you define your communication protocol, but that you define it. And while this might not be perfect, so far it's been a pretty good life preserver for all those drowning rats.

Now, what are your guidelines?

August 2011 Newsletter

Rush hour syndrome: when you cram more stuff into your day, less stuff comes out. Download PDF

What's your Batphone?

Would Jeff Kindler, Pfizer's fired CEO, have been able to keep his job if he had a Batphone?

Calls coming through the Batphone have the highest priority. The signal is unambiguous: if the Batphone rings, it must be important, and Bruce Wayne stops everything to answer it. But this system only works if there's an agreement that the caller only uses the Batphone for urgent issues.

Compare this mutually respectful agreement with how Jeff Kindler handled his communication with his staff. According to a terrific Fortune magazine article, Kindler

bombarded [his executive team] with long BlackBerry messages filled with questions at all hours of the day and night. He regularly scheduled conference calls on weekends. He seemed oblivious to executive vacations. He expected immediate responses to his questions, making no distinctions between urgent matters and routine ones.

All that didn't just make life miserable for Kindler's team; it also clogged the company's decision-making process. Kindler was a voracious consumer of information -- often a strength but increasingly a weakness. "Jeff heard something or read something," one former HR executive recounts, "and there would be a barrage of e-mails in the middle of the night." The next morning, staffers would have to divvy up the directives. "It was triage."

Kindler was guilty of doing something that all of us do at times: ignoring the distinction between urgent and routine issues, and choosing the appropriate communication channels. That overwhelmed his staff and slowed down their ability to respond to truly important matters.

As a leader, it's incumbent upon you to be extraordinarily careful about what you say. As I've written about before, your words -- your casual requests, your idle comments -- have enormous impact on your team. The communication medium you choose is nearly as consequential. In the story above, Jeff Kindler seriously degraded his executive team's ability to act because he was careless.

"Careless" may seem an odd word choice to describe someone who obviously cared intensely about the success of the company. Nevertheless, that's the right word. He was careless in *how* he communicated. He was thoughtless about the demands his communication style placed on his team and the results of that style. By making all his questions a matter of supreme urgency for his team -- and let's face it, communicating via BlackBerry at all hours of the night screams, "PAY ATTENTION! I'M IMPORTANT!" -- he sowed the seeds of his own demise.

Part of your role as a leader is to help people distinguish among levels of urgency and importance. Cramming everything through one communication channel -- whether that's email, IM, text message, or meetings -- is a recipe for disaster. Consider setting general policies around communication: how will you and your team handle urgent issues? How will you handle important (but not urgent) matters? What kind of service level agreements pertain to each form of communication?

The Batphone only works if there's a mutual understanding of its purpose and respect for the person on the other end. Jeff Kindler didn't understand or respect the power of his BlackBerry. That failure of understanding wasn't the only reason he was sacked. But it certainly didn't help.

When all you have is a hammer...

...everything looks like a nail. Even if it's an ice cream sandwich. According to Bloomberg Business Week, the failure of the Chevy Volt to win over consumers is due to the mismatch between the "green" image of the car and the decidedly non-green image of General Motors. The author of the article, who is a brand and marketing consultant with a long background at Clorox, and who bought his car in December 2010, says that

most of my "Green" friends are uninterested [in the Volt]. They’d rather own a Toyota Prius—or await for a plug-in from some other company. Why? Because the Volt is made by General Motors and they just can’t believe GM’s heart is in it.

The author goes on to explain that consumers want to buy a product from a company that shares their values:

Toyota has long supported fuel-efficient vehicles. If Toyota had launched the Volt, chances are it would already be a runaway success. But GM? It’s hard to associate the company that brought us the Hummer with a green image. How could GM executives possibly care about fuel efficiency? Or even get it right? Are they doing this only to look like good corporate citizens?

I suppose there's some merit to this argument. It would seem weird if Payless Shoe Stores starting selling high-end performance running shoes. Except that ascribing the Volt's struggles to GM's non-green image is like saying the Titanic sank because the dining room menu didn't include a porterhouse.

Consider the following:

1. As of mid-July, there are only about 200 Volts available nationwide.
2. There will only be about 10,000 units available for sale in the U.S. by the end of 2011.
3. The Volt starts at $40,000. The Prius starts at $23,500. The Nissan Lean starts at $32,800.
4. It takes 10-12 hours to recharge the car with a standard outlet. Good luck if you live in an apartment building that doesn't have electrical outlets near the parking spaces.

Maybe it's just me, but those seem to be far more salient facts than whether or not GM has a sufficiently green image. Who wants to pay twice as much for a car that they probably won't get for months and that might not be easily rechargeable, when they can get a Prius or a Leaf?

This is what happens when your article is written by a consultant who specializes in branding.

Missing the boat like this isn't a mortal sin when the product is an article in a weekly magazine. But it could be catastrophic when the product is a new corporate strategy. Or a succession plan. Or the roadmap for international expansion in China.

Everything we do is colored by our experiential filters. Those experiences shape our views and give us tools with which to address our organizational challenges. That's human nature. And therefore it's incumbent upon you to know what experiences and biases an employee, a writer, or a consultant brings to the table.

Because if the only tool on his belt is a hammer, you damn well better have a bunch of nails.

Monkey bars physics

Kyle is a VP at a large manufacturing firm. His ascent up the organizational food chain has been fast and impressive, and now he's reaping the financial rewards of all his hard work. Kyle also works horrific hours, between 90 and 100 hours per week. He doesn't spent nearly as much time with his family as he'd (or they'd) like. More importantly, he's got a pile of strategic initiatives and projects as long as his arm that are lying moribund on his desk. He knows they're important to both his and the company's future success, but right now they've got about as much chance of completion as Transformers 3 does of winning the best picture Oscar. It just ain't gonna happen.

Kyle's obviously competent, but he's being held back by his own proficiency. He's still doing work that he did earlier in his career because he's really, really good at it. He's forgotten the essential physics of monkey bars that he learned on the playground: you can't move forward until you let go of previous bar.

Kyle is holding onto work that should be -- must be -- delegated to others. It's almost certain that it won't get done the way that he would have done it. And it's possible that it won't be done as well as he would have done it. If that's an issue, then it's his responsibility to create standard work to ensure that it's done his way. In any event, he can't keep doing it. If he's holding onto those lower value activities, he can't turn his attention to the bigger picture issues that the company needs him to address.

I often see companies struggle with execution because managers and executives aren't able to devote the time and attention to the critical initiatives facing their firms. They haven't internalized the physics of monkey bars. They have to let go before they can move forward.

What every CEO needs to know about 5S and signal to noise ratio

Ron Ashkenas tells the following story:

In one large consumer products company, the CEO insisted on having detailed operational reports rolled up every month to the corporate level, which she then used for a monthly review meeting with business heads and corporate staff. Creating these reports required a small army of corporate financial analysts while also creating a cascade of work within all of the business units. And since the financial analysts were not always busy with the monthly reports, they also generated additional activities for the businesses that they thought were value-added. When the CEO retired, her successor decided that these detailed operational reports were unnecessary since each business unit already reported its key numbers — and the big review meetings never resulted in substantial decisions anyway. In other words, he quickly determined that this form of operational roll-up was not critical to the company's success and it was eliminated (along with the small army of financial analysts and the additional work they spawned).

People commonly think about 5S (a place for everything, and everything in its place) in manufacturing terms: organizing and decluttering the physical space around you. That's too limiting. It's also the wrong focus for knowledge workers. In other words: no, it doesn't matter where you hang your damned sweater.

Factory workers manipulate and process titanium alloys or scratch-resistant iPhone glass faces. Knowledge workers manipulate and process information. Regardless of what kind of worker you are, you need 5S to provide you with quick access to what you're working on, and to allow you to spot abnormalities.

So, when the signal-to-noise-ratio approaches zero -- when there's just a little bit of information coming through the static, as at the consumer products company described above -- you know it's time for information 5S. It's time to identify what information is necessary to serve the customer, make decisions, and manage the business, and eliminate the rest. Anything else may be interesting, but is ultimately irrelevant -- and even worse, it sucks valuable resources into the giant maw of waste.

In my upcoming book (A Factory of One, out in December 2011) I tell the story of the nurses at the Covenant Health System in Texas. They analyzed their work and found that they spent 51% of each shift filling in forms (rather than doing something useful, like, say, taking care of patients). The vast majority of that time and effort was waste. An information 5S project cut that time in half.

Take a look at the information you create and ask others to create for you. How much of it is waste, and how much of it is value? How much of it is just "legacy work" -- stuff that's just always been done, and no one remembers why anymore -- and how much of it really helps you make decisions to lead the business?

July 2011 Newsletter

Does your work style make you a magnifying glass -- focused, concentrated power -- or a prism -- lots of pretty colors, no heat? Download PDF

Godzilla in the corner office (part 2)

John Rowe, president and CEO of Exelon, tells this story:

In my first C.E.O. job, a young woman who worked for me walked in one day and said, “Do you know that the gossip in the office is that the way for a woman to get ahead is to wear frilly spring dresses?”

And I just looked at her and asked, “Where did this come from?”

She said: “Well, you said, ‘pretty dress’ to four women who happened to be dressed that way. And so now it’s considered policy.”

I said: “Well, it’s the furthest thing in the world from policy. I was just trying to be pleasant in the elevator.”

People hang on a leader’s every word on what seems like trivia and can resist like badgers your words when you’re really trying to say something you think is important.

I wrote about this phenomenon, which I call "Godzilla in the corner office," before. Godzilla's tail alone can destroy hundreds of buildings without him even realizing it, and people high up in the food chain in an organization can wreak havoc without even realizing it. John Rowe's story is a perfect example.

You create expectations and  tacitly encourage behaviors through your own actions. Do you check your smartphone when you're talking to a direct report? Do you arrive five minutes late to all meetings? Do you send emails on Sunday afternoons? What messages are you sending to your team? Is that what you want?

It's ironic, of course, but people in your organization will attend closely to what seems like trivia, and ignore or resist what you think is important. This is the nature of hierarchical organizations. Recognize it, be alert to the messages you're sending, and periodically seek honest feedback from people throughout the company. You might be surprised at what you learn.

Go See. Ask Why. Show Respect.

In 2009 Google launched "Project Oxygen." You probably haven't heard of it, because it's not a product. It's Google's quest to build a better boss. In typical Google fashion, the company gathered enough data on managerial performance to float a battleship. They followed up with interviews, coded feedback, and ranked results in order of importance. What they found is music to any lean manager's ears. Here's how the NYTimes describes it:

Mr. Bock’s group found that technical expertise — the ability, say, to write computer code in your sleep — ranked dead last among Google’s big eight [drivers of managerial excellence]. What employees valued most were even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.

“In the Google context, we’d always believed that to be a manager, particularly on the engineering side, you need to be as deep or deeper a technical expert than the people who work for you,” Mr. Bock says. “It turns out that that’s absolutely the least important thing. It’s important, but pales in comparison. Much more important is just making that connection and being accessible.”

John Shook over at the Lean Enterprise Institute has been talking about this for awhile now (most recently here). It seems so simple, doesn't it? Go see. Ask why. Show respect.

And yet.

Even assuming that your managerial team is staffed by well-meaning people and not those who think that Mein Kampf is the sine qua non for leadership lessons, this simple activity is surprisingly difficult, for two reasons.

First, finding time to "go see" is absurdly hard. Managers and executives spend so much time cooped up in conference rooms that you'd think they were mapping the human genome, not setting the sales price for a new candy bar. Spending six hours a day stifling hypnagogic jerks in a Powerpoint-induced stupor isn't exactly a solid foundation for a "go see" culture.

Second, we want to help. We want to solve problems. And, frankly, we like demonstrating our smarts. But in providing answers, we undermine people's intellectual development and corrode their self-esteem, just as surely as salt air rusts the supports on a bridge. People need to stretch themselves and solve their own problems -- with guidance and instruction, yes, but largely on their own. Otherwise they neither develop the capacity for learning nor the pride of accomplishment.

Your company may not be like Google (or even aspire to be like it), but good management transcends industries and idiosyncratic corporate culture. In lean terms, go see. Ask why. Show respect. In generic terms, make yourself available. Ask questions. Take an interest.

It's really not that hard. And hey, Google has quantitative proof that it works.

Strategy lessons from septuagenarian mall-walkers.

I used to work at Asics many years ago, where the strategic direction was to focus on the serious athletic enthusiast. We made wonderful, relatively high-priced (and high-margin) shoes that addressed their needs. Unfortunately, we also wanted to chase the sales volume that major retailers like JC Penney and Kohl’s could provide. That required us to make low-priced, low margin shoes. Our designers and developers were overburdened by the need to produce great shoes for both enthusiasts and for, well, septuagenarian mall-walkers in Miami. That bifurcation of work made it impossible to handle all their responsibilities. It also confused them as to what our business strategy actually was. As a result, we missed deadlines, made product development errors, and didn’t deliver to either market terribly well.

It’s not exactly a Copernican insight to say that your strategy should match (sorry, I should use the all-important buzzword, “align” with) your daily work. If it doesn’t, you run a serious risk of overwhelming yourself and your people with pointless activity that leads nowhere—except to feelings of overwhelm, missed deadlines, and unmet commitments.

As I’ve written about before, what often manifests itself as a time management “problem” is actually a mismatch between your strategic direction and what you’re asking people to work on. Because people are being pulled in two or three different directions, they can’t get any of their important (i.e., strategically aligned) work done. They’re busy serving pretzels when they should be piloting the plane.

Asics wasn’t the only company in this boat, of course. According to data in The Strategy Focused Organization, 80% of businesses fail to accomplish their strategies because of poor execution. 65% percent don’t align budget with strategy. Less than 35% of mid-manager activity contributes directly to the execution of business strategy, and less than 10% of front-line employees can articulate the institution’s strategic imperatives.

The numbers may not have been exactly right, but that sure describes Asics when I was there: a whole bunch of activity not tied to the company’s strategy.

Next time you see overwhelmed staff and unconsummated strategy, consider those “problems” as symptoms. The real problem—the root cause—may very well be strategy that’s neither clearly defined nor clearly articulated.

At Asics, we made the tough decision to adjust our product line to match our espoused strategy. We dropped the bottom end of our product line—saying goodbye to a sizable chunk of revenue and earning the rather considerable wrath of our sales reps. It sure hurt for awhile. But it freed up our designers and developers to do the right work, and in the long run it positioned us to build a truly sustainable business that leveraged our core strengths. Three years later we had regained all the lost sales and built a rock-solid position at the high-end of the market.

Who are your septuagenarian mall-walker customers? Bringing clarity at the top level leads to focused action at the front line. And that’s your job.

When good data go bad.

Bob Lutz, longtime car guy who held senior leadership positions at GM, BMW, Ford, and Chrysler, tells a story about the feedback that David Davis, an auto industry expert, received on a speech he delivered at GM:

Sometime in the early '80s, he'd accepted a gig as speaker to a large group of GM executives. The speech appeared to go well, and the applause felt genuine. David went home pleased and thought no more about it until he received the following letter:

Dear David:

You asked for feedback on your remarks at our recent conference. The data is just now available.

The rating scale was zero to ten with ten being "best." The five non-GM speakers had scores ranging from zero to ten. Yours ranged from three to ten. The five "outside speakers'" average scores ranged from 5.25 to 8.25.

Your average was 7.35.

Two speakers had higher scores than yours. Your standard deviation from the mean was 1.719 and ranked second among the variances, showing that most people had a similar opinion about your remarks.

I personally enjoyed your remarks very much. Your refreshing candor, coupled with your broad understanding of people, product, and the market, gave us exactly what we asked you for—"widened competitive awareness."

Thank you for your participation.

Absurd, right? Hopefully you didn’t snort the milk from your Cheerios out your nose as you read this. It’s a miracle that GM survived as long as it did with this kind of bureaucratic plaque clogging its organizational arteries.

But before you sprain your shoulder patting yourself on your own back for how much smarter you and your company are than big, stupid GM, think about the birth of that colossal dysfunction. At some point, a diligent, well-meaning employee—or her manager—probably wanted to help improve the quality of presentations. And he probably read in business school that what matters gets measured, so he created a simple 10-point rating scale.

[Stop here. Does your organization use one of these scales to evaluate speakers, or training sessions, or the selection of deli meats in the company cafeteria?]

It’s a short—very short—step from a 10-point rating of an individual event, to a comparison of multiple events. And an even shorter step from that comparison to a deeper, more thorough statistical analysis, replete with r²-values and more Greek letters than you’ve seen since your last purchase of foreign yogurt.

Organizations, and individuals within organizations, drive themselves to the land of absurdity all the time because they don’t ask the first question that lean thinkers focus on: What is customer value?

Learning that a speech was well received with a score of 7.35 out of 10 is valuable, important, and worthwhile for the customers (in this case, the speaker and the people who invited the speaker). The other data, not so much. The Outside Speaker Effective Analysis Group could have identified that value by simply (gasp!) asking the customers what information would be helpful for them. Hell, there probably wouldn’t even be a need for an Outside Speaker Effective Analysis Group in the first place had GM focused on this question.

In my mind, this is where traditional approaches to productivity go wrong. These approaches focus on improving the efficiency of producing these reports without considering whether or not they should be produced in the first place. The lean approach—first, identify the value—is, to me, a far better way to operate. And once you’ve identified the value, you can apply the lean tool of 5S to the information: sort the value from the waste, set it in order, systematize the delivery of the information, etc.

Of course, the waste from not focusing on customer value isn’t always as obvious as having an Outside Speaker Effective Analysis Group (The existence of a department like that is pretty much a dead giveaway.) Sometimes it’s subtler, like having the IT department generate dozens, or even hundreds, of reports per week, most of which go unread (as happened at one of my old employers).

Unless you continually evaluate your own generation of data, reports, and statistics, you run the risk of becoming the punch line to a joke and an object lesson in making good data go bad.