Don't let this happen to you.

Get this: the website for online grocer FreshDirect went down for two day last month. Software problems? Cyber attacks? Data center fire? No, no, and no. FreshDirect forgot to renew their domain name registration. As the Wall Street Journal reported,

Despite being notified by Network Solutions that the domain name was expiring as early as November, the company failed to renew its domain name in time, said a person familiar with the matter.

This outage wasn't catastrophic -- they didn't go down right before Christmas or the Super  Bowl -- but it's embarrassing, and surely cost them something.

Many retailers use some sort of auto-renew feature for their web domains, but even a simple calendar reminder would have been enough to prevent this problem.

FreshDirect's goof is a perfect example of why you want to replace your cognitive systems with reflexive systems. A cognitive system requires thought and deliberation for a specific action to occur. A reflexive system is something automatic -- no thought is required for the action to occur, and therefore it's less likely to fail. (I've written about this concept before. Download the article here.)

Take a walk through your organization. Which decisions processes are driven by cognitive systems, and which are driven by reflexive systems? The more that you can switch from the former to the latter, the more robust your performance will be.

And you'll be less likely to run out of nachos on Super Bowl Sunday.

VAT taxes, tribal knowledge, and clarity

Passing through Frankfurt Airport, you'll notice dozens of travelers lining up at the VAT tax refund window clutching credit card receipts and official forms. They talk for a moment to the two staffers, look confused and frustrated, and then shuffle resignedly down a dingy corridor to an even dingier office about 50 yards away. They pull out their receipts and forms again so they can get an official stamp from a customs agent. Then they haul their bags back to the original VAT refund window. This is how you're supposed to get your tax refund at the airport: first you go to the customs office for some sort of official stamp, and then you go to the VAT refund window. The process confuses everyone -- not because it's complex, but because it's opaque.

Given that no one gets it right, you'd think that there'd be some guidance for the uninitiated. Travelers don't enjoy dragging their luggage back and forth through the airport and waiting on line at the tax refund window twice. Presumably the people in the VAT refund office don't enjoy telling passengers over and over and over again that they have to go to the customs office first. By my count, this system produces at least four of Ohno's seven wastes: transportation, motion, waiting, and defects.

All of which got me thinking: how transparent are your processes? Sure, you've got voicemail trees help your customers navigate to the right department, but what about your employees? Do they know how to do all the tasks that are expected of them? Or do they rely upon tribal knowledge -- undocumented techniques, tricks, and procedures to get their jobs done? How much waste does that create?

I'm working with a company that is taking this problem seriously. According to their own customer service staff, it takes about 6-9 months to become fully facile with the various databases they need to use. Think about that: nine months until they're fully able to address all their customers' needs, even with the standard user's manual new employees get. So now the customer service team holds semi-monthly meetings to share, teach, and document the hidden shortcuts and techniques that the experienced people use when they do their work. They're creating a robust body of knowledge that captures their tribal knowledge and institutionalizes it -- and they're shortening the time it takes to get up to speed.

My guess is that you're probably in a similar situation -- and not just with your software. You likely have myriad processes that have undocumented workarounds, shortcuts, and tricks. Navigating those processes is as difficult for your people as navigating the VAT tax refund process is for travelers. And that creates an enormous amount of waste.

The Outstanding Organization, a new book by my colleague Karen Martin, extolls the value of clarity for a company. Clarity has many dimensions (clarity of purpose, clarity of values, clarity of thinking, etc.), but one of the most important is clarity of process. (Check out her webinar on this topic.) When employees don't know how things operate, it's impossible for them to perform efficiently.

Next time you're walking around your company, ask some people how much of what they know is in their heads, and how much is actually documented. If there's a discrepancy, you can be sure that at least some of the time your team looks like the folks at the Frankfurt VAT tax refund office. And that's not a pretty sight.

Why reorganizations (almost always) fail

Reebok cut its sales forecast by 33% earlier this year. That means good news for the company that prints its business cards -- there will be a lot of job title changes. When sales forecasts decline, the typical corporate response is to lay off some people and reorganize. To that end, Matt O'Toole, Reebok's chief marketing officer, announced that

Earlier this year we announced the reorganization of the Reebok Brand team into six core Business Units (Training, Running, Walking, Studio, Classics, and Kids), designed to deliver against our ambition to become the leading fitness brand. Today, we continued this reorganization with the implementation of a new global-direct operating model between the global organization in Canton and our markets, and streamlining our satellite creation activities. These changes, which will go into effect January, 2013, will increase our effectiveness, our speed to market and our efficiency.

Now, I'm not exactly sure what "streamlining satellite creation activities" means. But I do know that reorganizing a brand team -- or any team, for that matter -- seldom results in a big increase in sales.

I've been involved in numerous reorganizations myself, and never once did they affect our sales. We moved desks, we got new business cards and job descriptions, we had different people in our meetings, but the product didn't change. And I predict that's exactly what will happen with Reebok.

Reorganization is a typical corporate knee-jerk reaction to a problem that's poorly understood. If you approach the problem of falling sales from an A3 mindset -- really trying to understand the nature and root causes of the problem, and to design a suite of countermeasures -- you'd see that that changing people's seats has about as much chance of improving the situation as changing the Weather Channel has of improving your actual weather. Why? Because consumers don't give a damn how you're organized internally. They buy products that meet their needs and wants, regardless of who works in what department or what their title is. And I can guarantee you that the product isn't going to change just because Classics is now a "core Business unit." The countermeasure doesn't tie back to the root cause of the problem.

Moreover, you may not even have the right people and necessary skills to staff the new organization. In one company that I worked for years ago, we split our product marketing team into business units to increase focus and sales in each category -- but we didn't have enough people to completely staff each business unit. The result? After a few months, we ended up doing pretty much the same work as before, and within 18 months, we reorganized again right back to where we started.

Let's also not forget the destruction of relationships, experience, and tribal knowledge that helps expedite decision-making and improve productivity. Reorganizations bulldoze those accumulated assets into oblivion, ensuring that for six months at least, the company will be operating much less effectively.

Reorganizations that work best don't just reshuffle the boxes on an org chart. They're strategically designed to take cost out of a process, or bring products to market faster, or expedite decision-making. Most of all, they're precisely targeted to address the root cause of the problem.

Otherwise, the only company that will see a sales increase is the one printing the business cards.

2012 Management Improvement Blog Carnival

I’m very proud to say that John Hunter kindly gave me the reins (for one day, at least) for the Curious Cat 2012 Management Improvement Blog Carnival Annual Roundup. This is my third year to contribute to the Carnival, and it’s a not only a chance to share some of my favorite posts, but to revisit and reflect upon their lessons for myself.

What I’ve tried to do this year is select posts that gave me a new perspective about the world around me, and how improvements could be made to the current state.

First up is Kevin Meyer’s Evolving Excellence blog. I love this blog because of the range of topics Kevin and Bill Waddell cover, and because of their strongly voiced opinions. Nothing politically correct here, and perhaps for that reason, powerful lessons about improvement, value, and excellence.

Just Observing, Sir: Kevin has a real talent for unearthing lessons just about anywhere he goes. In this post, Kevin notices that at the Four Seasons Hotel there is always someone watching the customers. Always. Their uncanny habit of appearing the moment you need something is no accident, nor is it magic. Excellent service, it turns out, comes from discipline and standardized work.

Kevin and Bill both penned more than a few pieces on Apple and its reliance on outsourced Chinese labor. This piece, Apple Is Not a Manufacturer, does the best job of explaining that Apple’s vaunted product design does not make it a model manufacturing company—or a model company, for that matter.

In The Difference Between Leading and Wonking, Bill takes on the politicians (shocking!) and makes powerfully makes the following point: that the best road map and the maximum buy-in comes from letting people closer to the ground work out the details. As he says, “So long as the path they come up with effectively moves the group in the right direction there is little to be gained and quite a lot to lose by having the boss meddle with the details.”

The Wall Street Journal published a story on how companies are increasingly leaning on software to help them hire new people that are less likely to quit within six months. Bill skewers the management mentality that has generated a $3.8 billion industry—or as he says, $3.8 billion in pure waste. Read all about it in It’s All About People and Relationships.

Disruptive Management is an outstanding piece on the absurdity of only looking at innovation through the lens of end products. The management fad of analyzing how existing companies tend to resist “disruptive innovation,” as articulated in the Gospel of Clayton (Christenson), ignores the long-term, sustainable value that management innovation provides.

Finally, for all of you that have suffered through the deployment of lean tools and seen those improvement efforts come to naught, Kevin’s post—Sustaining, Leadership, and Why—on the necessity of understanding why you’re adopting a tool is as pithy as it gets. Read it in conjunction with this analysis of Sony’s demise and the absurdity of blaming Deming for their fall: Blaming Deming, Lean, and Six Sigma and the Importance of Why. (Don’t worry: both of these posts are far better written than their inelegant titles would indicate!)

Brad Power’s regular contributions to the HBR blog are seldom written about in the lean blogosphere, and I think that’s a real mistake. While not a regular contributing member of the lean community, Brad has been researching business process innovation for the last 30 years and has valuable insights to share. His posts are invariably well-written and filled with terrific stories and case studies.

Brad’s post, Understanding Fear of Process Improvement, is a perfect example. He posits that fear of change is the root cause of failures to create a culture of continuous improvement, and suggests three countermeasures: get people involved in the improvement; remove the downside risks and provide upside; and hire people who are committed to the organization’s larger mission.

If you’ve ever been involved in process improvement activities, you know the drill: map the process, identify improvement opportunities, and make an implementation plan. You also know that the momentum from these events usually fizzles out after a few months. In Get Your Team to Work Across Organizational Boundaries, Brad argues that the most important outcome of these activities is actually development of the team itself, and describes how social networking technologies offer new ways to support teams, especially process teams that cut across organizational boundaries. As he says, “constancy of purpose matters more than one workshop's flash of brilliance.”

Why Doesn't HR Lead Change? is Brad’s analysis of why the human resources department, which ostensibly should be at the forefront of any improvement process, typically lags, or actually acts as a brake on innovation and change. Brad believes that there are three root causes for this situation. Although he doesn’t provide countermeasures in this post (he does in other posts), the points he makes are seriously thought-provoking for leaders from all departments in your organization.

Those are my suggestions for valuable, pithy, and thought-provoking reading for the holidays. I hope you enjoy these posts as much as I did.

You can read the 2012 annual management carnival summary here, and you can follow John's semi-monthly carnival posts here.

December 2102 Newsletter: The Speed of Propinquity

What’s the fastest way to communicate with people on your team, or on other teams? Hint: it’s not email. Yes, email travels virtually instantaneously anywhere in the world, but it’s not the fastest way to communicate.  Face-to-face contact is faster, richer (in information), and far more effective... Download PDF

Missing the forest for the (electronic) trees.

I've written many times before (as have many others) about the perils of constant electronic connection in the workplace. Now legendary professor Henry Mintzberg has published an interesting take on this problem, in the Winter issue of Strategy+Business. Leaving aside the issue of multitasking, Mintzberg points out that information-poor media like email and text messages take away the nuance and subtleties that can only be conveyed in face-to-face conversation. Mintzberg argues that

Managers who believe that they can learn about their department through email — rarely walking down the hall, let alone getting on an airplane — may find themselves in trouble . . . By giving managers the illusion of control, the rapid flow of information through new technologies threatens to rob them of real control. As demands pile up, managing can become more frenetic and superficial.

Recently I've seen companies with processes that aren't functioning particularly well. The problem, however, isn't necessarily that the process is poorly designed or broken. Rather, the breakdowns occur during handoffs that are communicated exclusively through email or some other electronic medium. Sometimes, one party lacks perfect understanding of the process. Another time, a simple request via email is interpreted as a peremptory demand, triggering intransigence or foot-dragging. Both situations cause a process to bog down, with finger pointing and blame the ultimate result.

The demands on your time -- and your managers' time -- are formidable. Email is a necessary and valuable communications tool. But it isn't, and shouldn't be, the only tool in your armamentarium. Otherwise, as Mintzberg says, "you'll gather the facts, but you may miss the meaning."

We are creatures of our environment

Stories about rotting garbage and table scraps aren't the place you'd expect to find powerful lessons about running your business. However, a story the other day on NPR about food waste in restaurants (about 10% of the food a restaurant buys ends up in landfills) provided this interesting insight:

The hardest part for many restaurants may just be getting the workers to become aware of how much edible food they waste every day. A few years ago, when [Chris Moyer of theNational Restaurant Association] was managing a big chain restaurant, he wanted to show his cooks there were plenty of opportunities to reduce waste. So he took away the garbage can.

"You'd be surprised, once you take away the garbage cans, if people have to ask permission to throw something away how little you throw away," says Moyer. "It was really quite amazing."

Let's put aside for the moment the issue of whether taking away garbage cans demonstrates respect for people. (It doesn't.) What's striking is how behavior changes in response to environmental conditions. If taking away garbage cans results in less food thrown away, what might happen if you took away the comfy chairs in the conference room? Or required that all meetings are stand-up? Most likely they'd end on time or early. (And, in fact, there are plenty of stories about companies doing precisely that.)

What if you rearranged where people sat in an office? I've been working with a company that complains about poor communication and coordination between the various groups involved in the product development process: the R&D and manufacturing engineers get last-minute changes dropped on them by the product marketing team. Perhaps not coincidentally, the marketing team sits at the other end of the building from the engineers. While it wouldn't be a panacea, I guarantee that if they mixed the marketing and engineering teams together, communication would be better.

Many years ago when it was still in start-up mode and cash was tight, the employees at Giro bike helmets asked Jim Gentes, the founder, to install a shower in the office. Gentes was afraid that he'd pay $5000 to put in a shower, and people wouldn't use it that much. So he came up with a simple solution: he put a piece of paper next to the shower showing the cost, and told employees to put their names down when they showered, and calculate the average cost of each shower. In other words, the average cost of the first shower was $5000; the average after two showers was $2500; after three showers, $1667; etc. By making the cost and the usage of the shower, Gentes ensured that people didn't take it for granted, and probably increased the usage, as people were motivated to drive the average cost down.

Think about it: what environmental changes can you make to improve the coordination, collaboration, and effectiveness of your teams?

What problem are you trying to solve?

NPR reports that Virginia's new set of education goals are higher for white and Asian kids than for blacks, Latinos and students with disabilities. According to the story, Virginia's state Board of Education

looked at students' test scores in reading and math and then proposed new passing rates. In math it set an acceptable passing rate at 82 percent for Asian students, 68 percent for whites, 52 percent for Latinos, 45 percent for blacks and 33 percent for kids with disabilities.

Winsome Sears, one of the Board members, explained the new goals this way:

"So why do we have these different subgroups? Because we're starting with black children where they are. We can't start them at the 82 percentile because they're not there. The Asian students are there. And so the real question is why aren't black students starting at the 82 percentile? Why? Why are they not there? That's the problem the board wants to solve."

Perhaps it's because I've spent much of the last week with a client working through A3 thinking and root cause problem solving, but the inanity of the Board of Education's decision really struck me. I mean, what problem are they trying to solve? No offense, Mr. Sears, but how exactly does lowering the bar to 45% help you fix the problem of black kids missing the 82nd percentile?

If they really want to improve educational performance, lowering the standards hardly seems like the right countermeasure. That's like lowering food safety standards and claiming that the food is now safe because only 1 out of 1000 hamburgers are tainted with salmonella instead of 1 out of 100. Or saying that a car has achieve the highest quality rating because it didn't exceed the 25 "allowable" defects.

It seems to me that the Board of Education is solving an entirely different problem: how to avoid getting penalized for failing to meet the academic goals of No Child Left Behind. If that's the case, then this countermeasure -- changing the standards -- is wonderfully effective.

Now, you can make a good argument that No Child Left Behind is a heavy-handed, poorly designed, ineffective tool for raising academic achievement. (And as a former teacher, I'm more than happy to make that argument.) However, if Winsome Sears and the rest of the Board want to solve the problem of why black kids aren't starting at the 82nd percentile, it's difficult to see how re-jiggering the standards is going to help.

The truth is that most problems have multiple root causes and require a suite of countermeasures to improve the situation. Developing those countermeasures requires a deep understanding of the true problem, and a great deal of time, effort, (and possibly) money. It's so much easier to just change the standards.

For me, one of the great powers of an A3 analysis is that the format makes it easy to read your argument "backwards." Because the analysis is laid out on one page, you can look at the proposed countermeasures, see whether they address the root causes you've identified, and decide whether they really help you close the gap you've identified in the problem statement. The Virginia Board of Education decision clearly fails that test:

Lower academic standards -> Help under-achieving kids -> Get all kids to 82nd percentile. I'm missing the logic.

And my guess is that if you look at many of the countermeasures your company puts into place, you'll see similar gaps.

November 2012 Newsletter -- Turning Strategy into Performance, Part 4

Cultural norms that promote dysfunctional behavior will torpedo your organization’s ability to execute. In fact, too many organizations reward the fire fighters who put out the fire, rather than the fire marshals who prevent the fires in the first place. Not surprisingly, this is a fool-proof recipe for more fires. Download PDF

What does your calendar say about you?

In contrast to instant messaging, text messaging, or email, communication time through traditional (snail) mail is measured in days and weeks. You'd think that too much time spent in that world would lead to a lack of sensitivity to how long things take and where time goes. (It flies, of course.) And yet Moya Green, the CEO of Britain's state-owned Royal Mail, can track the way she spends her time with a degree of precision that most businesspeople can't match.

In a McKinsey interview last month, Green demonstrates that she's cognizant of exactly where she invests her time and attention:

McKinsey: How do you strike a balance between the many demands on your time, particularly when driving change?

Moya Greene: I try to think about my agenda as divided into big blocks of time that I actively monitor. I recently did a diary analysis, which showed I spend roughly 15 percent of my time managing and understanding our employees. Another 25 percent of my time last year was devoted to changing the fundamentals of the company. . . . Next, I spent 15 percent of my time seeking to change the conversation inside Royal Mail so that we put the customer much closer to the heart of what we talk about and do. . . . A further 10 percent was taken up with what I call strategic realignment, helping people understand that we're going to make our money in future in parcels and packets, in media, and by selling our data assets in a more commercial way. That left 35 percent for everything else: organization, recruitment, managing the board, and crisis management.

I've worked with many senior leaders, and I seldom see this kind of clarity about how they spend their time. They always have a clear idea of where they want to focus their attention, but they rarely take the time to actually do a diary analysis to see whether they're acting on their intentions. In lean terms, they're excellent at the Plan-Do phases of the PDCA cycle, but not so good on the Check-Adjust phases. As a result, they have a very difficult time assessing their role in the organization's successes and failures -- did they spend too much time on a strategic initiative? Not enough time? Were there other issues? Who knows?

I've written about this topic before, of course, but I think Tom Peters says it best: you are your calendar:

"There is only one asset that you have and that asset is your time.

[Imagine you're a boss of a distribution center and] you say that this is the year of extraordinary attention to quality. Then at the end of the first month, I sit down with you and we go through your monthly calendar day-by-day and hour-by-hour. And we discover that with all the meetings that occur and all the surprises that come up in the course of that month you spent 6 hours directly on the quality issue.

Well, guess what: quality is not your top priority.

The calendar never, ever, ever lies.

If you say something is a priority, then it must be quantitatively reflected in the calendar.”

Can you analyze your calendar? What does it say about you?

Less is More

My friend Matt May has just published his latest book, The Laws of Subtraction. It's a terrific read. Matt argues that decisions become exponentially easier and simpler when you focus on what to ignore, what to leave out, what to "don’t." More importantly, the results are exponentially more impactful. He goes on to explain that the key is to remove anything obviously excessive, confusing, wasteful, unnatural, hazardous, hard to use, or ugly -- or even better, avoid adding them in the first place.

Matt covers some of the ground that he explored in his earlier books, but for me, this is a more concise and powerful exploration of his recurring theme that less is more. His stories about Toyota’s youth brand Scion, the urban design that transformed London’s Exhibition Road, the power of white space in comics, and the secrets of Lockheed’s Skunk Works are compelling.

But that's not why to buy this book.

The real reason you need to buy the book is on page 64. That's the page that tells my story about how subtraction led to a far better outcome for me and my team. (I'd argue that my story is the highlight of the book, but Matt might get mad at me.)

Truth is, there are 53 individual stories of real people -- not captains of industry, not global business titans -- ordinary people doing wonderful work by subtraction. In some respects, these stories are the real joy of The Laws of Subtraction, because they're so ordinary and so easy to relate to, that you can immediately see how you can adopt Matt's six principles.

Read the book. In this case at least, more (learning) is better.

"That's just our culture, and we can't change it."

"That's just our culture, and you can't change it." Last week, while presenting a workshop based on my book, A Factory of One, at the AME Conference, I was struck by the fatalism that infected so many participants. We were talking about the impediments to individual effectiveness -- the things that create waste instead of value -- and so many people said with a resigned air, "That's just our culture, and we can't change it."

The disrespect for closed doors and interruptions by coworkers that force people to multitask? That's just our culture. The expectation that we'll respond to all emails within 10 minutes? That's just our culture. The sense of entitlement (or the ignorance) that permits executives to pile multiple projects on you, despite the inevitable explosion in lead time? That's just our culture. And there's no point in fighting it.

This passive acceptance of the status quo is shocking because it's so different from the attitude that these same people take when confronting other waste-ridden systems. I don't know any hospitals that attended AME that shrug their organizational shoulders and simply accept their ventilator-associated pneumonia rate as an unavoidable outgrowth of their "nursing culture" or systems. I didn't meet any manufacturers at AME who say, "Sure we've got a 22% defect rate on our products, but that's just the culture of our machinists." I don't know of any distribution companies in attendance that think, "It's too bad that our drivers mis-deliver packages all the time, but that's just the culture of the drivers and our lousy systems."

Ridiculous. In all of those examples, the leadership teams drive relentlessly to improve the quality, cost, and reliability of their systems and processes. Accepting the status quo is unacceptable.

So why do we have such a difficult time acknowledging both the necessity and the possibility of improvement in the way our people work? Why do we view the processes by which individuals get their jobs done as something fixed, immutable, or unworthy of improving?

The evidence is clear that, to quote Tony Schwartz, the way we're working isn't working. Whether it's the expectation that people are on call 24/7, or the design of workspaces that don't allow people to focus and concentrate on their work, or the overloaded project schedule that results in frustratingly long project lead times, we're just not being smart about how to get the best results from our people.

Why do we accept the fatalistic complaint that "it's just our culture," and there's nothing we can do about it? Just because the inefficiency and waste of our current way of working doesn't directly show up on the income statement doesn't mean that we should tolerate it any more than we should accept that patients coming to our hospital get sicker when they're with us.

It's time to view individual productivity as a non-negotiable area of improvement. That's nothing more than respect for people.

Getting the best out of your warranty department.

Warranty departments are usually poster children for the accumulation of excess parts inventory, disorganization, and lack of respect from the other upstream departments in the value stream. It doesn't have to be this way.

One client is doing a terrific job in redesigning its warranty department. They've replaced the piles of excess parts (except, of course, for the components that they always seem to stock out of ) with a two-bin system. Instead of haphazard ziggurats of replacement parts scattered all over the floor, they now have a clean, organized system with cardboard boxes and visual management cards containing all the necessary re-order information. They've effectively reduced their inventory by 70%. While this isn't a huge cost savings -- all their parts are pretty inexpensive -- it's a big savings in floor space and a bigger savings in time. Finding parts in the piles used to be difficult, and now they can pick, pack, and ship customer orders much more quickly.

One other thing this department has done: they've instituted formal "close the loop" meetings with the product designers and developers. When the PD team begins planning the next round of products, they meet with the warranty team to discuss what problems they were seeing in customer returns. Design problems, durability problems, material defects, etc. -- all are brought up in a formal setting to ensure that the PD team doesn't miss the important quality "signals" amidst the larger piles of return "noise." Although it's too early to see the benefits in new product design, it's already easy to see the benefit in morale: the warranty team feels like an important part of the company and the product. They're not the tail of the dog, just another segment of the product circle. Call it respect for people.

How is your warranty department run? Are you getting the best out of them? Are they providing all the value they can?

October 2012 Newsletter -- Turning Strategy into Performance: Part 3

Your systems and processes are an essential component of performance. When they work against the smooth flow of work, your people have virtually no chance of accomplishing their goals and executing the organizational strategy. When was the last time you assessed and mapped out your processes? Download PDF

"The signature of mediocrity is chronic inconsistency."

This is what really hit me when I listened to Dan Pink's "Office Hours" interview with Jim Collins:

The signature of mediocrity is not an unwillingness to change. The signature of mediocrity is chronic inconsistency.

This was a finding from Collins's research for his latest book, Great By Choice -- mediocre companies have no consistency in leadership, in mission, in management style, or in philosophy. They drift with the prevailing tides, unwilling (or unable) to chart a determined course.

Collins believes that great companies adhere to "SMaC" -- Specific, Methodical, and Consistent -- guidelines for their business. A SMaC recipe is a

set of durable operating practices that create a replicable and consistent success formula; it is clear and concrete, enabling the entire enterprise to unify and organize its efforts, giving clear guidance regarding what to do and what not to do.

Southwest Airlines has 10 such principles -- fly only 737s, no flight segment over two hours, stay out of food service, and stay passenger focused – no freight or mail, etc. Whereas tactics may change with the situation, SMaC practices can last for decades.

Chronic inconsistency in improvement efforts dooms companies to mediocrity as well. I've seen companies go from quality circles to TPM to business process reengineering to Six Sigma in an effort to improve quality, lower costs, and increase employee engagement. Eventually, employees become cynical, deriding each new effort as the management "flavor of the month." And they're not wrong, given that each new approach usually discredits the previous approach.

There is no magic formula for organizational greatness. But it's clear to me that consistency in improvement methods is just as important as consistency in organizational guidelines. That, I think, is one of the beauties of lean. The focus on continuous improvement and creating a community of scientists devoted to the pursuit of perfection (even while recognizing that perfection is unattainable) creates a consistency that other methods don't. Lean is a "SMaC" approach towards improvement. It's not flashy, but it provides a clear route towards organizational excellence.

Barack Obama and knowledge work kaizen

The October issue of Vanity Fair features a long article by Michael Lewis on Barack Obama -- what it's like to be him and how he deals with the burden of the presidency. One tidbit that struck me was the way that Obama has tried to improve his ability to make decisions. In keeping with recent research that shows that people have finite mental resources for decision-making, Obama has tried to eliminate the trivial decisions that most of us face on a daily basis. In an NPR interview, Lewis explains that

The president started talking about research that showed the mere act of making a decision, however trivial it was, degraded your ability to make a subsequent decision. A lot of ... the trivial decisions in life — what he wears, what he eats — [are] essentially made for him. He's actually aware of research that shows that the more decisions you have to make, the worse you get at making decisions. he analogizes to going shopping at Costco. If you go to Costco and you don't know what you want, you come out exhausted, because you're making all these decisions, and he wants to take those decisions out of his life. So he chucked out all his suits except his blue and grey suits so he doesn't have to think about what he's going to put on in the morning. Food is just arranged for him and he's not making any decisions about what he's eating. What most people spend most of their life deciding about, he's had those decisions are removed from his life. He does this so he creates an environment, a mental environment, where he's got full energy for the decisions that are really important decisions.

As I've described before, Bob Pozen (chairman emeritus of MFS Investment Management, senior lecturer at Harvard Business School, and board member of Medtronics and Nielsen) does much the same thing as Obama. When you have to make many decisions -- and what's the presidency but an unending series of very, very difficult decisions? -- you inevitably become what researchers call a cognitive miser, hoarding your mental energy. That hoarding typically leads to one-dimensional analysis, illogical shortcuts, and decisions that tend to favor short-term gains and delayed costs.

Toyota -- the high temple of lean -- gets it, too. Over at LeanBlog, our friend Mark Graban once wrote,

I’ve heard Toyota people say you want to eliminate the hundreds of LITTLE repetitive decisions so that the person involved can focus on the FEW major decisions with a fresh mind that’s not fatigued from constant decision making.

The premium that Obama, Pozen, and others -- not to mention Toyota -- place on simplification is really is another aspect of lean thinking (and probably brings a smile to Matt May's face). I'm not arguing that you have to toss out most of the clothes in your closet, or give up your cereal bar (after all, it works for Pixar). But I am suggesting that you take a hard look at the decisions you make in your daily work and eliminate as many as possible. Spreadsheet, memo, or presentation design; sales call frequency; meeting format -- all these things can be standardized so that you don't have to make decisions. And that will result in better work and better thinking for the stuff that's really important.

Nick Saban and the (lean) Crimson Tide

If you told a football coach that he could learn from Toyota's lean manufacturing methods, he'd probably tell you that a football team isn't a factory -- and then he'd have an offensive lineman throw you out of his office. But it you told that to NIck Saban, University of Alabama football head coach, he'd probably agree.

A new Fortune Magazine article on Saban describes how his "Process" has led to remarkable success in college football: 48-6 in his last 54 games and two national championships in the past three years. Recognizing that his time and attention is the critical, non-renewable resource that he brings to his work, Saban drives out inefficiency -- no matter how small -- wherever he can:

As he sits down at a small table in his expansive wood-paneled corner office, the coach grabs what looks like a garage-door opener and presses the button. Across the room, the door to his office softly whooshes shut. Boom! Nick Saban just saved three seconds. Multiply that enough times and you have a couple of extra months, or years, to recruit more high school stars.

Then there's lunch itself. He has it down to a science -- another in a series of small efficiency measures. Every day, Saban sits at this very table and works through his lunch hour while eating the same exact meal: a salad of iceberg lettuce and cherry tomatoes topped with turkey slices and fat-free honey Dijon dressing. No time wasted studying a menu.

What are these examples except eliminating non-value added activities (getting up to open and close a door, or thinking about what to eat) through the use of technology and standard work? (Bob Pozen at the Harvard Business School approaches breakfast, lunch, and even dressing for work the same way.) Saban even standardizes the overall flow of his work, reserving his mornings and afternoons for core football-related work, and scheduling meetings for the middle of the day. This is a classic time management trick, of course -- doing the most important work first.

Above all, Saban focuses on process rather than results. He believes that doing things the right way will inevitably lead to the right outcomes:

What really separates Saban from the crowd is his organizational modus operandi. In Tuscaloosa they call it the Process. It's an approach he implemented first in turnarounds at Michigan State and LSU and seems to have perfected at Alabama. He has a plan for everything. He has a detailed program for his players to follow, and he's highly regimented. Above all, Saban keeps his players and coaches focused on execution -- yes, another word for process -- rather than results.

And of course, by creating standard work for the innumerable tasks comprising the football program, Saban creates the time and mental bandwidth to engage in kaizen and improve the process:

"When you have a system, you kind of get in a routine of what's important," says Saban. "And then you spend a lot more time on thinking of things that would make it better."

Make no mistake: I'm not saying that Saban runs a "lean" program that adheres to all of the principles outlined by Toyota. I'm arguing that the disciplined focus on identifying value and waste, and the creation of standard work, can be applied to any field of activity, from manufacturing cars to running a football program to writing software. The key is to standardize the non-creative part of the job, so that there's more time and energy available for the creative components.

September 2012 Newsletter -- Turning Strategy into Performance: Part 2

Time. Money. People. Attention. These most precious resources are severely constrained in any organization. And yet most treat them as though the supply is as abundant as trucker caps at a NASCAR event. That’s the road to lousy performance and execution.

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Your Internal Communication Stinks. Here’s Why—and What To Do About It.

I've posted another article on the HBR blog. Coming up with a title was a challenge for them, and ultimately they chose to focus on the plague of email. Frankly, I liked my original title better: "Your Internal Communication Stinks. Here's Why -- and What To Do About It." The post is really about switching communication models, from information "push" to information "pull." Here's how it starts:

How often are people’s email privileges suspended (aka, “mail jail”) because they’re inundated with a blizzard of questions, status updates, notifications, and other non-mission critical information? Most inboxes—and calendars—are gorged with junk because the dominant paradigm of communication is information “push.” This means that information is being pushed onto people when it’s ready, but not necessarily when the recipient needs it.

You can read the rest of the article on the HBR blog here.

The absurdity of the 40 hour workweek

Hopefully you read Jason Fried's (co-founder and CEO of 37signals) OpEd in Sunday's NYTimes. If you haven't, read it now. Go ahead. I'll wait. Jason advocates (compellingly) for the value of taking time off from work -- not simply to promote the squishy concept of "work-life balance" or to improve employee morale, but to improve productivity:

From May through October, we switch to a four-day workweek. And not 40 hours crammed into four days, but 32 hours comfortably fit into four days. We don’t work the same amount of time, we work less....The benefits of a six-month schedule with three-day weekends are obvious. But there’s one surprising effect of the changed schedule: better work gets done in four days than in five. When there’s less time to work, you waste less time. When you have a compressed workweek, you tend to focus on what’s important. Constraining time encourages quality time.

This result is no surprise if you're familiar with Parkinson's Law. As I've pointed out before, this approach is similar to Toyota's policy of continually reducing the resources available in order to drive improvements in their production processes.

Jason's experience at 37signals also reminds me of what Leslie Perlow discovered at Boston Consulting Group -- that eliminating the "always on" ethic drives the creation of more efficient work habits:

When people are “always on,” responsiveness becomes ingrained in the way they work, expected by clients and partners, and even institutionalized in performance metrics. There is no impetus to explore whether the work actually requires 24/7 responsiveness; to the contrary, people just work harder and longer, without considering how they could work better.

Ultimately, this ties into the frequent disconnect between "deliverables" and "value," something I've been thinking about a lot recently. Even if you're not a plumber or a lawyer, there's a tendency to focus on the amount of time you spend on a project and what the output is. But the first step in adopting a lean mindset is to identify the value of your work -- and that value is determined by what the customer wants. The customer doesn't care how many hours you work; the customer only cares whether or not you deliver the product or service that she wants.

Jason Fried has asked his programmers to deliver products that the company's customers want, irrespective of the time they spend in the office. If they can do it in 32 hours per week, great. He's overthrown the tyranny of the 40 hour workweek by decoupling the link between office time (deliverable) and meeting the customers' needs (value).

There's a huge difference between deliverables and value. Between effort and results. That's a lesson that we can all learn from.