More steps, more waste.

The more steps you have in a process, the more waste you'll have. No matter how smooth, efficient, and well-designed the process, more steps (and more people) means more waste. Why? More steps means work is most likely waiting in more queues. It also means that you have more opportunities for miscommunication between people -- as Karen Martin (along with Mike Rother and Drew Locher) demonstrates, the compounding effect of even small errors in communication and handoffs causes an explosion of waste, as measured by the percent complete and accurate (%C&A) quality metric. Finally, the inevitable friction of coordinating multiple steps -- think of the emails that must be read, the low value meetings that people attend -- reduces overall efficiency.

The antidote: Cross-train people to do more than one job. Redesign processes to remove steps. Create standard work with templates, models, and checklists to reduce the errors in the remaining steps.

Standard work, creativity, and Apple

I've written before how checklists are a valuable element of standard work, and certainly the use of checklists in the military, aviation, and healthcare has reduced errors and improved outcomes. But did you know that checklists lie at the heart of Apple's new product development process? When we look at an iPhone, it's easy to get seduced into thinking that its creation was a magical piece of genius, that it sprang full-grown from Steve Jobs' forehead like Athena from Zeus. However, according to a recent post on Quartz (and Leander Kahney's book about Jony Ive) the iPhone -- and all other Apple devices -- are the result of a rigorously detailed product development process.

Embodied in a program that runs on the company’s internal network, the ANPP [Apple new product process] resembled a giant checklist. It detailed exactly what everyone was to do at every stage for every product, with instructions for every department ranging from hardware to software, and on to operations, finance, marketing, even the support teams that troubleshoot and repair the product after it goes to market. "It’s everything from the supply chain to the stores," said one former executive. "It’s hooked into all the suppliers and the suppliers’ suppliers.Hundreds of companies. Everything from the paint and the screws to the chips.”

Now obviously, the ANPP is much more than a simple checklist. At the same time, however, it's also much more useful than one of those coma-inducing, 500-line Gantt charts that many companies use to drive and monitor projects. The ANPP ensures that standards are followed, that silly mistakes are avoided, and most of all, that knowledge becomes explicit and reusable, rather than tacit and tribal.

When you have an ANPP, you eliminate the non-value-adding drag on people's time and attention caused by rework, loopbacks, and superfluous confirmations and approvals. You give people the time and space they need to create something genuinely wonderful.

June 2014 Newsletter -- Becoming the CEO of Your Problems

A few years ago, the NY Times interviewed Mark Pincus, founder and recently-replaced chief executive of Zynga. Pincus told the interviewer that one of his key methods of leadership is to make everyone into a CEO in the company. Making a person the CEO of a problem is, I think, very much in keeping with the idea of granting ownership via A3. It ensures that something—and very likely the right thing—will get done. . . . Download PDF to read the full article

Don't confuse "lean cream cheese" with "lite cream cheese"

Ben's Cream Cheese has a bit of a cult following in New York. Food writers love it, Murray's Cheese shop (the city's temple to all things fromage) stocks it, and the good bagel shops swear by it. No one knows exactly how they do it -- the owners keep the recipe a secret -- but according to a recent article,

The real secret is basic freshness. They use dairy products delivered directly from upstate New York farms. They decline to add preservatives, because their cheese shouldn’t take up permanent residence in the back of one’s fridge; it is meant to be eaten soon. “We have nothing in stock,” Simon [Friedman, the son of the owner] said. “We only produce the orders we get in.”

Low inventory, producing to customer pull. . .  It's not light (or lite) cream cheese. It's lean.

Respect for people (Shingo Edition)

More wisdom from last week's factory tours with Ritsuo Shingo: 1. Don't ask workers for improvement ideas. Ask them:

• What work they don't like
• What work is tiring
• Any suggestions they have for management

In other words, you can't just ask for "improvement ideas" unless and until you've established trust -- i.e., until you've earned the right to ask for their help.

2. "Blaming your workers is like spitting in the sky. It comes back down on your face. It's your teaching that needs to be improved."

'Nuff said.

Forget about the Toyota "house of quality"

I'm accompanying the Shingo Institute study tour in Japan this week, and have had the incredible good fortune to spend time with Ritsuo Shingo, son of the late (and legendary) Shigeo Shingo. I asked him about the two pillars of lean (jidoka and just-in-time) in the famous Toyota house of quality, and he told me to forget about the house:

It doesn't matter what the pillars are, or what the roof is, or what blocks are in the foundation. You have to choose the structure that makes sense for your company. The concepts and elements are what's important, not where they go.

The lean community has, in recent years, shifted focus from tools to fundamental concepts and respect for people. To me, Mr. Shingo's advice is of the same piece. Slavish adherence to tools, language, and even graphics is pointless -- you have to translate the ideas to make them relevant for your idiosyncratic situation. As long as you have the right concepts, you can make whatever pillars you want.

For that matter, you don't even need a house. Make a submarine. Or a pop-tart. Or a light bulb. Just make sure you respect people and make it yours.

Will people pay attention now that HBR has validated it?

I've been preaching for years now that companies should pay more attention to how much time they regularly squander. Whether we're talking about confusing communication, inefficient meetings, or unimportant initiatives, organizations waste enormous amounts of time on non-value added activities. Most companies don't seem to really care as long as this waste doesn't hit the bottom line (and it doesn't, since managers are on salary, not hourly wages). The same companies that will argue the need for a corporate jet to keep their senior team maximally productive (Down time at airports? The horror!), will tolerate the rest of the company spending 300,000 hours per year supporting one weekly executive team meeting. Disappointingly, even companies engaged in lean transformations seem not to care much about the waste of time. I've met many people from nearly every functional silo in these firms over the past five years, and they all complain about email overload, meeting gridlock, and other pointless activities. And yet their firms accept this waste as either unimportant or unavoidable, a fact of nature along the lines of the sun rising in the east and setting in the west. They'd never accept a similar waste of time and attention on the plant floor, of course, because people are working on the clock, and because they can measure material utilization down to the penny. Muda of time? No problem. Muda of metal? No way.

But perhaps there's hope. The May issue of HBR features Your Scarcest Resource, an article that quantifies some of the cost of poorly managed time, and suggests strategies to reduce the organizational waste. There are no Copernican insights here -- the ideas are as gob-smackingly obvious as most time management ideas. (Start meetings on time, and end them early if they're not productive. Standardize the decision-making process. Etc.) -- but it's a good article. But just maybe the HBR imprimatur will at least get management to start turning their lean lenses on the waste of this most precious, and non-renewable, resource.

If you decide to take it on, feel free to call me. I wrote the book on it.

May 2014 Newsletter -- The Madness of Futures Orders

Futures orders may be great for an individual brand, but they’re absolutely terrible for the industry as a whole. What’s good for the goose is definitely not good for the gander—or the gaggle, for that matter. Futures orders push both manufacturers and retailers to operate with giant batches of products. . . . Download PDF to read the full article

Communication vs. Coordination

The power of visual management and standard work.

Meeting behavior is *NOT* a small thing

From the recent WSJ interview with Alan Mulally:

WSJ: Are you worried that Ford will go back to its old ways if, someday, you're not there to hand out the cards [printed with a summary of his "One Ford" strategy]?

Mr. Mulally: I am not only not worried about it, but I am very excited about the institutionalizing of our management systems inside Ford.

WSJ: So you feel it's not just you at this point.

Mr. Mulally: Absolutely. We have it built into the audit process. We actually audit the process and the behaviors.

WSJ: When was the last time you had to remind someone: "No, you didn't get it."

Mr. Mulally: Every once in a while someone in business-plan review will, say, pull out their communication device and start working on it. We have the entire leadership team networked around the world, and somebody would have the audacity to start working a specific issue instead of being laser focused on helping everybody?

Or they'll talk. At Ford, one of the behaviors is you listen, and you don't have side conversations during the meeting. It's just so important everybody stays focused. So if someone has a side conversation, we just stop and we just look at them, and it's amazing how it doesn't happen again.

Here you've got a guy who's universally credited with rescuing a $63 billion market cap company talking about how not using smartphones, or avoiding side conversations during meetings, is an essential element of sustaining the new corporate culture.

Pay attention, people: small behaviors are NOT small things. They're critical symbols of what the company values. Mulally cites these seemingly minor behaviors as evidence that Ford has become a different kind of company. More importantly, he uses them as a way to monitor the behaviors that underpin the company's transformation.

Disregarding others, and not being present to support and aid colleagues in meetings -- these are the leading indicators of a dysfunctional corporate culture. They're not the only reason why Ford teetered on the edge of bankruptcy a few years ago, but they're emblematic of a culture that is rotting at the core. That's why Alan Mulally attends to these seemingly minor indicators. And that's why you should, too.

April 2014 Newsletter -- It's About Priorities, Not Time

“I don’t have time” is a complaint you hear often, but that’s really not true. What we really ought to say is, “It’s just not a priority for me.” You always have time for what’s important. At the risk of being melodramatic, if your husband or child were taken to the hospital after a serious accident, I bet you’d find time to sit by their bedside. Because that’s way more important than finishing up the PowerPoint for tomorrow’s marketing meeting. . . . Download PDF to read the full article

How lean improves individual productivity

I'm a rabid believer that lean concepts and tools can improve personal productivity enormously -- hell, I (literally) wrote the book on that. But it's nice to see validation from the go-go world of internet startups. Bill Trenchard, founder of LiveOps and now partner at First Round Capital, just published a piece that supports my argument. He believes that 70% of a tech CEO's time is spent sub-optimally, and his countermeasures come straight out of the lean playbook.

Creating Standard Work: Bill suggests identifying the core processes -- which are often repetitive -- that drive the company, and creating standard work around them.

For anything you do more than three times, write down your process in detail. Build playbooks that you can hand off to someone else, so they can execute something exactly the way you would. Never get held up by people asking what the next step is or whom they should ask about a process.

This is how Uber in particular scaled so quickly. They’ve grown to over 70 cities and they’ve killed it in all of them. How did they do it? With a playbook. They have a list of the things they do in every single city when they launch, with slight regional adjustments. They have practiced this method and tested it and wrote it all down. So now they just execute, like turning a key.

The startups that I have seen succeed the most at scaling are the ones who have systematized their common actions and core procedures early, and made a habit of it as they grew.

Reducing the Waste of Over-processing: Bill takes on the always thorny issue of managing email and sees stupendous over-processing waste in the way we read and re-read our messages:

Think about postal mail for a second. Do you pick your letters up, look at each one and then put them back down only to pick them up and put them down again and again? This is the definition of insanity. Yet that’s exactly what most of us do with our email.... If you can respond to or act on any email in under two minutes, just do it immediately. If it’s going to require more than two minutes, move it into your task manager to process later. When you do this, you have the ability to prioritize tasks and emails in relation to each other, and your inbox no longer owns your time.

Improving Flow: The psychological research is unanimous on this point -- multitasking doesn't work. Email interruptions, whether self-inflicted or from someone sending you a message, kill your ability to create psychological flow. How to improve the situation? Like me, Bill recommends doing it in chunks to avoid fragmenting your attention:

I recommend the batch route. It lets you focus on email when you need to, and give other tasks the attention they deserve. Constant context-switching makes you mediocre at everything.

Go and See, and Leader Standard Work: Using daily standup meetings (or something similar) as part of leader standard work so that you can identify and solve obstacles quickly is critical in the factory and in the office. Cribbing from both the agile software and lean playbooks, Bill goes to the gemba:

[One of the most productive CEOs I know] circulates the office, stopping to talk to his team members one-on-one or in small groups throughout the day. He asks them:

• What’s holding you back from getting more done?
• What are your blockers? Are there any bottlenecks or barriers I can remove for you?
• What resources or processes would let you move as fast as you want to?

Get the answers to these questions and get it done for your team. If you want them to model speed, you need to model speed yourself. Give them the help they need to do their best work in record time. Responsiveness is key.

Bill's post is a good reminder that lean concepts are not just applicable to factory -- or office -- processes. They're applicable to the way that you, as an individual, work. You can remove waste, improve quality, and increase the value you create in the time you spend at the office. It's the only truly non-replaceable resource. Use it wisely.

March 2014 Newsletter -- Leader Standard Work

Do you often feel reactive instead of proactive? Do people complain that decisions at the top take too long to percolate down to the front lines? If so, you probably manage your organization and your direct reports through weekly meetings and email—and you should consider implementing “leader standard work....” (A version of this newsletter originally appeared on the HBR Blogs.) Download PDF to read the full article

Why you need to make processes visible

One of my clients is trying to improve their product development processes. They have two major value streams: one for softgoods (cut and sew products) and one for hardgoods (products requiring injection molds). The development timelines on these two streams are fairly different, although both products are sold to the same customers during the same seasons. The hardgoods process always seemed to be late, with last minute changes and late nights for both the engineers and the factories. As the first step in improving the process, representatives from all parts of the value stream -- product managers, designers, engineers, logistics, marketing, and sales got together to map the entire process.

Turns out, the major problem was gobsmackingly obvious: the engineers thought the product had to be finalized and ready to go in time for the first customer delivery date. But the sales team needed the product to be finalized and ready to go for the salesman samples -- two months earlier. Whoops.

The softgoods team already knew this and operated on this model. It was just assumed that the hardgoods team operated this way as well. But making assumptions is never a good idea:

It was only the visualization of the process that laid bare the mistaken assumptions.

There's still plenty of improvement opportunity in the process. But with the ambiguity in the delivery date cleared up, the team now has the possibility of actually meeting customer needs.

The Silent Andon Cord

I was fortunate to hear Rich Sheridan, president of Menlo Innovations and the author of the terrific book, Joy, Inc., speak at the AME Innovation Summit last week. At one point, he explained that "the sound of silence from your colleagues is a signal that they need help." There's always conversational noise at Menlo Innovations. It's an open office environment, and his programmers work in pairs, so there's always plenty of talking. If programming is progressing smoothly, there's a consistent conversation between the programmers. But if there's extended silence, the programmers have probably hit a roadblock and are having problems figuring out a way around it. Essentially, the sound of silence is a kind of invisible, silent, andon cord. When it's "pulled," one of the nearby programming teams comes to help.

I love this story.

In a typical office environment, it's often an effort to signal that you need help: you have to get up from your desk and find your boss or a colleague, which might take 2 minutes or 20. There's also the need to overcome the psychological hurdle of explicitly saying that you've got a problem and need assistance. Menlo's approach eliminates the need to find someone while removing the psychological hurdle. How easy is it in your company for people to get help when they need it?

How do you create value?

What value do you create in your company? How do you create it? These questions are at the start of my book, A Factory of One, and they're at the core of my workshop based on the book. In my experience, most people haven't taken the time to answer these questions, and as a result their days are filled with a whole lot of "busyness," but not as much value as they -- or their customers -- would like.

In a recent New York Times interview, Paul Bennett, the Chief Creative Officer at Ideo, said that

Until a year ago, I felt that I wasn’t fully able to perform my job as a kind of project leader for inspiration, because my time was not really my own. Like many people, I was hyper-scheduled, often in depressingly small chunks of time, at one meeting after another, with very little time in between. I remember one particular day when I had a different appointment or task every 10 minutes. My brain almost exploded.... [So] I started a ritual that I still use today: I sit down and look at my calendar every Sunday night, pore through my coming week’s meetings and cancel a bunch of them — redundant ones where I don’t need to be “in the loop,” ones where there is an opportunity for someone else to make a decision, ones that don’t particularly inspire me, or ones where I can’t really add value.

To stretch the meaning of 5S a bit, this sounds to me like "executive 5S." Bennett is sorting his commitments and setting his calendar in order. He's separating the wheat from the chaff, the value from the waste.

But doing this requires that you know what value you create and how you create it. In Bennett's case, he's realized that it's not by running from meeting to meeting, and being away from the flow of work in the office. Now, he says,

I try to spend about half my day at the help desk and the other half doing what I call “doctor’s rounds,” when I walk through the office and talk to people if they request it or if I feel that they are receptive to it. I now allow myself to be pulled, to drift in and out, and to be available for five-minute or two-hour interactions depending on what’s needed. Because of that, I feel as if I am part of a living, breathing organism, and responding to its needs rather than simply running from place to place with a calendar in my hand.

I'm probably the biggest advocate of "living in the calendar" in this community. I believe deeply that the calendar is a vital tool for allocating the scarce resource of time to the truly valuable commitments and demands on your time. But the calendar is a useful tool only insofar as you're able to identify how you create value.

Step back for a moment and think about it. How are you scheduling your days? What are you allocating your time to? How do you create value?

Special Note: Learn about Training Within Industry (TWI) and its role in the lean enterprise at the annual TWI Summit. The Summit is being held in Nashville, TN May 8-9, 2014 and is the annual gathering of world’s top TWI thought leaders and practitioners. Learn more at www.twisummit.com.

5S for Creativity

You don't usually find gems about Lean in the New York Times magazine, but check out the profile of director Baz Luhrmann (Romeo+Juliet; Moulin Rouge; La Boheme; Strictly Ballroom; Australia) here. Luhrmann believes passionately in the benefits of simplification and minimization, and while he doesn't use the term "5S," that's clearly part of what he's talking about:

Luhrmann believes that external order creates internal possibility. For example, he has nearly identical closets in New York and Sydney, with everything in the same place. He gets cranky, he said, if “I have to go: ‘Where are the underpants? They’re supposed to be in Drawer No. 6.’ ” Same with the bathrooms. Toothpaste, toothbrush, everything is laid out in the same pattern, no matter what city he’s in. “As I’m going through the routine, I don’t have to think,” he said, adding that this leaves more room for creativity. “The mind is unlocking something.”

This is something I've written about many times before: 5S does NOT compromise, impede, or strangle creativity in people. Rather, it provides structure, clarity, and freedom for the higher powers of the mind to focus on important issues. Looking for underpants, or toothpaste, or even figuring out what to eat for breakfast or what suit to wear steals cognitive resources that can be better spent elsewhere. As Mark Graban 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.

There's no excuse. Give it a try. See what happens.

How not to build a kaizen culture in three easy steps.

1. Establish some sort of "lean promotion office."
2. Create a caste system of colored belts, and staff your organization with them.
3. Tell everyone that the belted elite will lead their improvement efforts.

This is what's happening at my wife's hospital. The "lean team" is responsible for implementing improvement initiatives throughout the hospital. While they're very, very good at these kaizen activities, they have effectively killed any self-initiated improvement work. Doctors, nurses, and staff passively wait for the lean team to turn its focus to their area, and not surprisingly, the pace of improvement is glacial.

Contrast this situation with Quality Bike Parts (QBP), a distributor of bicycle components and products. The company has not only fervently embraced lean at all levels of the organization, they've accomplished the holy grail of embedding lean thinking within the culture. All this while their lean office had precisely one person in it. (It's now up to a whopping two people.)

Nick Graham, the Director of Continuous Improvement, explains that QBP doesn't need people in an office to drive lean throughout the company; they need people on the floor who have the skills to do that. So for each project, Nick enlists a few people within the relevant department to lead the effort. Nick serves as a resource for them, but the people in the department do all the work. The result is tremendous growth in individual problem solving skills, the planting of lean thinking into the company culture, and the creation of a deep bench of people who can -- and do -- pitch in to help other departments with their projects.

Which do you want: the Johnny Appleseed approach, spreading lean seeds that will sprout and bear fruit far and wide throughout the company? Or the Monsanto "terminator seed" approach of Lean Six Sigma Black Belts who parachute in to save the day, but in so doing compromise the learning potential of the company?

February 2014 Newsletter -- The 5S Mind

Although 5S is traditionally applied to the physical environment, I believe that it isn’t just applicable to physical space -- you know, “a place for everything and everything in it’s place.” In a larger sense, 5S can be applied to time as well. It’s an awkward locution, but think about having “a time for everything, and everything at the right time. And that means time to think and plan as well. . . . Download PDF to read the full article

Built-in Quality

My friend said this to me yesterday:

At BMW, all the cars that leave the factory are perfect. At Toyota, all the cars that leave the production line are perfect.

This is about as elegant a description of built-in quality that I've ever heard.

Attention to built-in quality is relatively visible in manufacturing processes, but it seems to me that it's vanishingly rare in office processes. Most corrections and rework are done at the end of a given process, when it's more difficult and more time-consuming to fix. In particular, given the ubiquity of, and reliance upon, spreadsheets, this is a real issue: a small error in only one cell propagates throughout an analysis and a business plan.

When my colleague Karen Martin teaches metric based process mapping, she emphasizes the importance of determining the "percent complete and accurate" data for each step in a process. This information reveals the (horrifyingly) low efficiency of the overall process. Equally important, though, this information helps us focus on the points in a process where we need to build-in quality.

What checks can we install to ensure that the information we send to our downstream colleagues is 100% complete and accurate? What error-proofing tools can we create? It's not that hard to insert data validation tools into a spreadsheet or a web form. Checklists and templates are other tools that can help ensure built-in quality.

It's time to raise the standards of excellence for the internal data that you manipulate to the same level as the product you deliver to your customers.