For the Last Time: Cost Cutting Isn’t “Lean”

The headline in the Wall Street Journal last week was utterly predictable: “Kraft Deal Fueled by Lean Recipe.” It was only a matter of time after Heinz’s acquisition of Kraft that the business press would refer, once gain, to 3G Capital Partners’ use of zero-based budgeting as something “lean.” This approach, which requires managers to justify spending plans from scratch every year rather than simply modifying the previous year’s budget, is many things, but it is certainly not lean.

Yes, lean organizations relentlessly seek to lower costs. And yes, lean organizations constantly strive to eliminate wasteful expenditures of cash. But the layoffs that accompany zero-based budgeting are most certainly not lean. Neither is the infantilizing, management-directed, and disrespectful (to employees) cost cutting that the Wall Street Journal describes:

After chicken processor Pilgrim’s Pride Corp. adopted it a few years ago, it scrutinized how much paper it used to print documents, how much soap employees used to wash their hands, and how much Gatorade hourly employees at one processing facility drank during breaks.

In my new book about continuous improvement (still untitled, but coming out this September), I draw a parallel between individual physical fitness and organizational “fitness.” You can’t get physically fit simply by dieting—sure, you can lose weight, but that doesn’t make you healthy and strong. Similarly, you can’t get organizationally fit simply by cutting costs. Laying off people and prohibiting color copies doesn’t make a company nimble and competitive. It may boost the share price and profitability in the short term, but it can’t develop the organization’s competitive powers for the long term.

Competitive strength comes from the development of employee problem-solving capabilities and the improvement of operational processes. Zero-based budgeting doesn’t do that. Want to reduce the amount of Gatorade people drink? Teach employees how to attack the “problem” of excessive Gatorade consumption at its root cause, which might very well lead to improvements in ventilation, plant layout, and workflow—and along the way, truly significant cost reductions. Want to cut down on soap consumption (which, honestly, doesn’t seem like a great idea in a poultry processing plant)? Challenge employees to redesign the process in a way to reduce the amount of direct poultry handling. At the very least, having employees figure out how to take costs out of a system is far more respectful of their intelligence and creativity, and far less dispiriting than simply dictating a 30% cut in their Gatorade allowance.

There’s plenty of research proving that cost reduction isn’t sustained in the long run. Just like weight always comes back after drastic dieting, costs always creep back two to three years after drastic cuts, because the underlying processes and capabilities haven’t been improved. As soon as the financial crisis fades, people start buying more Gatorade and making color copies.

Look, I fully support the elimination of excessive corporate privilege. I cringe at the thought of executives flying first class on the company dime while front-line workers fly coach. I can’t stand swanky corporate offices with Persian rugs and fireplaces that serve only to gratify egos and create unnecessary distinctions within an organization. But skinny and starved isn’t healthy and fit, and cost cutting isn’t lean.

What you can learn from Marie Kondo

The Life-Changing Mindset of Tidying Up by Marie Kondo has sold 2 million copies worldwide. It’s the top seller in the New York Times “advice and how-to” category. It’s the number one seller overall on Amazon right now. 5S for Operators by Hiroyuki Hirano, who in many ways is the father of 5S, ranks number 129,268 in books on Amazon. Ron Taylor’s 5S: Workplace Organization and Process Design Using Lean 5S checks in at number 87,584. Ade Asefeso’s 5S for Supervisors is at 550,900. 5S for Healthcare by the well-respected Tom Jackson is at 377,661. Brice Alvord’s Planning & Implementing 5S comes in at 937,654. I don’t know exactly how many copies of these books have been sold, but I’m pretty confident that their total combined sales over the past 19 years (when Hirano’s book came out) are nowhere near the 338,000 copies of Tidying Up sold in the U.S.—since October.

Okay, this isn’t a fair comparison: Kondo’s book is for the mass market, while these 5S books are targeted primarily at manufacturing organizations. But there’s a deeper truth operating as well. Kondo writes in the language of ordinary people. She doesn’t force readers to adopt new jargon or even a foreign language. She tells readers to look at their closets and answer one simple question: “Does it spark joy?” If yes, keep it and treat it with respect. If not, toss it out.

Now, think about 5S. The concept is basically the same as the one Kondo advocates. (Sure, there are differences, but many of the fundamentals are similar.) But instead of presenting the overarching concept in easily grasped language, the lean community uses the meaningless shorthand “5S.” We tell people that they must follow each “s” in the proper sequence. We translate the original Japanese into words like “shine,” which actually doesn’t mean shine in the way any English speaker would expect.

Kondo asks people if the stuff in their houses sparks joy. We ask people to distinguish between “set in order” and “straighten.” Is it any wonder that it’s so hard to get workers to accept (much less embrace) 5S?

Shame on us for making such an important concept so off-putting.

As you may know, I just finished writing my second book. (It’s still untitled, but McGraw-Hill will be publishing it in September.) One of my goals was to take the Japanese, take the jargon, and take the Toyota out of lean. I wanted to tell a story about continuous improvement unencrusted by the barnacles of traditional lean vocabulary that can be so alienating to newcomers. I’m pretty sure that the book won’t reach the heights of Tidying Up, but I hope at least that it helps you think about making improvement tools and concepts more accessible for your organization.

Take a lesson from Kondo. She’s inspired rabid groupies committed to her vision of cleaning the crap out of their houses. You can too.

What event are you training for?

Managerial Takt Time

"Takt time" is part of the gospel handed down by Jim Womack and Dan Jones in their seminal book, Lean Thinking. Despite the awkwardness of the German word from which it derives (taktzeit), it's a very simple concept: it's the average unit production time needed to meet customer demand. The goal of takt time is to link your company's value-added work to the customer's needs.

But what if you're an executive or a manager without direct production responsibility, and without a clearly defined customer demand? How do you calculate takt time for a leader in this circumstance?

In the new book I'm writing, I suggest that a useful way to think about takt time for a leader is to compare it to the schedule for someone training for a specific event -- say, a marathon. The training schedule links the workouts to the goal, ensuring that training is done so that the runner peaks at the right time. The training schedule also ensures that the runner invests an appropriate amount of time in the different types of training needed for success: aerobic running, anaerobic running, cross-training, flexibility, etc.

If you're a leader, you need to link your daily/weekly/monthly activities to the strategic goals you've set. You can do that by allocating your time to the critical areas that will get you there: improvement, talking to customers, coaching & training your team, strategic planning and thinking, etc. Steve Ballmer, former CEO of Microsoft, provides a good example of this kind of thinking:

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

I know very few executives that determine their calendars to this extent. When you think about it from the perspective of an athlete, however, it makes perfect sense. How can you decide whether or not to take on a new commitment or spend time on a new project if you don't know what else you're supposed to be spending time on? How can you be sure that your overall efforts are appropriately linked to your larger goals unless you have a master plan?

You've got 2000 hours per year. How are you going to spend them?

The Training Triangle

Training Triangle

Effective training/coaching in the workplace or the athletic arena rests on three legs.

Show respect: There may be some abusive coaches around these days, but by and large, the best coaches and personal trainers possess a deep and abiding respect for their players or clients. A trainer who disdains his overweight clients will very soon be looking for a new line of work. In the office or on the shop floor, a condescending supervisor will quickly lose the respect and support of her team. Respecting people's ability to grow, and honoring their desire to do a good job, is essential to effective training.

Go and See: Straight from the lean playbook, you have to see with your own eyes what's happening. Is an athlete suffering from repetitive injuries, or continually failing to perform an exercise properly? The only way to diagnose the root cause is to see with your own eyes what the athlete is doing. Are there repetitive order entry errors, or continual problems getting your marketing materials ready on time? You've got to watch the process, and the workers in the process, with your own eyes to help them do it correctly.

Participate: The best personal trainers don't just phone in the workout -- they model the exercises and participate in the activities they're prescribing for their clients. The great coaches are there on the court or on the field with their athletes. Similarly, the best leaders participate in their own improvement work. That's not to say that the leader has to clean the office floor everyday with his team (although the president of one $100M electronics company does), but the great leaders engage people's hearts and minds both by engaging in their own improvement work, and by getting involved in what their teams are doing. It's not enough to "support" what people are doing -- leaders have to actively participate.

Why Visual Management Matters

Screen Shot 2014-10-31 at 9.28.57 AM

Bringing an organization, or even just a functional process within that organization, to higher levels of performance is a challenge. Workers often don’t know how well (or poorly) they’re functioning—if it’s always taken 7 days to close the monthly books, or 15 months to get through the product development cycle, then it’s just business as usual. Or people can’t see the problems their work creates for colleagues working downstream. Or there’s a deep-seated “us vs. them” feeling: “We do our jobs well in marketing, but it’s those guys in sales that create all the problems.” Or people can’t even agree on what the actual problems are. Or they just don’t care. That’s why visual management is so important. When people can see the processes in which they work with a value stream map (sorry, Pete Abilla), and when they can monitor and measure that process with visual controls, the obstacles to improvement are much easier to overcome. Rendering the current condition visible in a map and/or a dashboard externalizes it, so that we can examine it together, from the same perspective. As Michael Ballé writes in Lead With Respect, “we see together, so we know together, so we can act together.”

Visibility enables you to transcend the resistance to change that comes from differing perspectives, and harness your team’s innate creativity to create a better future.

Cadillac's NYC Boondoggle.

Last week's news about Cadillac's management relocating to New York got me in the mood to steal one of Kevin Meyer's old tricks from his Evolving Excellence days: calling out corporate stupidity when I see it. In case you missed it, the leadership at Cadillac announced that it will be moving its headquarters to NYC, in order to better understand the needs of the luxury customer:

[Cadillac President Johan] De Nysschen said being in New York, which he called the epicenter for global trends, will allow the team to build a focus solely on the brand and to better understand the "sophisticated lifestyle" of Cadillac's target customer base.

I can understand the desire to have marketing and design people spend a lot of time in New York rather than Detroit -- although it's worth pointing out that in the US, BMW and Mercedes are both based in New Jersey, which is not exactly known for being a hotspot of global trends. It's also worth noting that the heart of American car culture is in California, and as a result, many car companies have their design centers in the Los Angeles area.

Of course, the truth is that you can understand your customers' lifestyle pretty damn well even without opening up a fancy showroom in SoHo. Toyota's Yuji Yokoya, chief engineer for the Sienna minivan, drove 53,000 miles around the U.S. to understand what American drivers needed in a minivan. (The minivan was not sold in Japan at the time, so Toyota's headquarters in Nagoya were much farther away from the target market than Detroit is from New York.) The Sienna received rave reviews and was a huge success.

What's more worrisome about Cadillac's move is the possibility that the company will send more functions than just marketing to New York:

GM is studying whether to send Cadillac's product planning and finance functions to New York, or to keep those in Detroit. Design, research and development and other technical aspects will remain based in southeast Michigan, de Nysschen said.

This dispersal of critical functions is a recipe for failure -- for missed handoffs, for botched communications, for rework in all phases of product development. Most companies, even well-functioning ones, have a hard enough time avoiding these snafus when people are working on the same floor, much less the same building. But separated by 600 miles? Good luck. And needless to say, GM isn't exactly an exemplar of efficient and effective communications.

My guess is that within 12-18 months Cadillac will abandon this project, citing absurd expenses in New York city, unanticipated project costs and errors in new product development, and a lack of sales growth.

You read it here first.

Reversing the vector of accountability

skitched-20140925-132859

One of the most unappreciated benefits of leader standard work is the powerful way in which it reverses the “vector of accountability.”

When we talk about accountability in an organization, typically we refer to the way in which lower level staff is accountable to executives (or managers, or supervisors) for certain actions. Workers must be held accountable if we want to execute and perform well. In this view, the vector of accountability always points upwards, from the front lines to leadership.

This is where leader standard work comes in. When a CEO makes a commitment to visit the shop floor (or the marketing department, or the warehouse) each day and learn what her people are doing and what obstacles they face, she’s now accountable to her team for performance. When a VP creates standard work obligating him to participate in 5S activities once per month, he’s making a promise to his team that he must fulfill or risk compromising his leadership credentials. The vector of accountability flips: the leader is now accountable to the team.

The psychological implications of this reversal are profound. Any organization comprises a web of human relationships, and for those relationships to be healthy and successful, there must be some degree of symmetry. Demanding that lower level staff be accountable to leaders without a corresponding accountability of leaders to lower level staff is a recipe for unhealthy, weak relationships. Reversing the vector of accountability brings balance to the interpersonal relationships in an organization. It’s a concrete way of leading with humility, of being a servant leader.

To implement this idea, post your standard work in the open, visible to the entire company. Create a simple check sheet for the activities that shows what you’ll do and when, and bring it with you when you do that standard work. Then—and this is key—your team checks the boxes to show that you did, in fact, fulfill your commitment. They validate your standard work. Lastly, post the filled in check sheet where everyone can see it.

Try it. It’s one more way to show respect for people. You’ll be amazed at the transformation in your relationships with your team.

Bridging the Divide

NPR's Marketplace interviewed me the other day about the Congressional schedule that has lawmakers in Washington D.C. only three days per week. I was asked how a process improvement expert would improve the gridlock that afflicts our legislative process. I replied that if I were running a business that had two factions — whether it’s the east coast and the west coast offices, or the sales and the engineering teams — if I were trying to bridge a divide like the one in Congress, face-to-face time is absolutely essential. The lack of face time and direct contact is particularly visible in Congress. I mean, the place is a ghost town on Mondays and Fridays when representatives are back home in their districts. But you'd be surprised at how little the teams in your company interact. People sit in their own areas, get caught up in their own work, and plan their days around their departmental meetings. It takes an enormous effort to walk from customer service to product development, even when the distance can be measured in yards. Unless your company is organized by value stream, the distance might as well be measured in light years.

Face to face contact is critical in understanding how work is done by people upstream and downstream from you. When you see the work being done, you can understand the cause of problems and waste. Equally important, regular contact between groups builds the human bonds of trust that are essential to successful change. That trust, of course, is what's sadly lacking in Congress today.

Given that your company is most likely organized by functional silo, what can you do to improve the situation? Certainly company-wide events are a good start, but because they're not focused, they're insufficient. Far better to actually schedule time for people to "walk the value stream." Have the sales people walk from customer service, to credit, to the distribution center (if it's local) to see how orders are entered, approved, and shipped. Or have the product developers walk from IT to marketing services to see how catalogs and price lists are produced. Seeing the process, really seeing what people downstream do in order to get their jobs done, is eye-opening. It also demonstrates real respect for what other people do.

Give it a try. You might be surprised at what you learn.

Two Prerequisites for Process Improvement

skitched-20140905-183514

I've been talking to a few companies recently about their struggles to improve their product development processes. I realized that they were missing the two prerequisites for improvement: process clarity and process stability.

If you don't have clarity, improvement efforts will simply be reinventing the wheel. If you don't have stability (or predictability), then you're sailing without a compass.

First make the process visible. Then make sure it's followed. Now you can move forward.

Case Study -- Specialty Food Company

Situation: A rapidly growing, $300M specialty food company was outgrowing its sourcing and quality control processes. Due to the increased number of suppliers and the proliferation of internal staff, product development lead times skyrocketed, and the process of qualifying a single ingredient had lengthened to 260 days. Intervention: We created a metrics-based process map for the entire qualification process, identifying bottlenecks, common sources of errors, missing triggers, and other issues that created delays and rework. We then created sub-teams to address the most critical factors. The teams developed countermeasures, gained consensus for the changes, and trained staff on the new procedures.

Resolution: Lead time for ingredient qualification was reduced by 50% -- from 260 to 130 days.

Make your meetings more effective with 3Ps

Three things in life are inevitable: death, taxes, and the inability of organizations to conduct meetings that aren’t a soul-sucking waste of time. You’d think it wouldn’t be that hard to have productive meetings—after all, Robert’s Rules of Order have been around since 1876, and legions of intelligent business consultants have written extensively on the topic. Yet survey employees in any organization about their meeting effectiveness, and you’ll be met with groans, eye rolls, and complaints about how low-value added they are. An easier approach to making meetings effective and productive is to follow the 3P Principle: ensure that you have the Purpose, People, and Process right.

Effective Meetings

Purpose: A clearly defined purpose for the meeting is essential. Purpose is not a topic or a subject; it’s a clear description of the desired outcome of the meeting. It’s a goal that everyone is driving towards. Purpose is often, but not always, a decision—whether or note to open a new office, or to delay the introduction of a new product. But purpose could be brainstorming (to generate 15 new brand names), or gathering information (to get the sales team’s perspective on the new bicycle frame material), or to ensure that everyone understands a strategic shift in direction (we’re abandoning the low-end of the market, and here’s why). Having a clear purpose focuses the discussion, keeps the meeting from wandering, and increases the likelihood that you’ll get there.

People: Are you sure you have the right people in the room? Meetings often deteriorate into irrelevance because the right people aren’t there. This isn’t news, of course, but it’s surprising how infrequently people take the time to figure out who should attend. Job responsibilities change without formal notification, and the person nominally handling a function may no longer be doing it. Moreover, even if you have the right person in the meeting, she might want a specialist from her group to join her so that she can offer better opinions. Therefore, in order to get the right people in the meeting, you need to talk to the participants in advance, explain the meeting’s purpose, and find out from them who the right people are for that purpose. Organizing and conducting a meeting is a team sport—you can’t do it alone.

Process: Is a meeting the right process to accomplish your purpose? Although meetings are a near-Pavlovian alternative to other forms of communication, it’s a good idea to first ask whether you actually need a meeting. Status updates don’t require people to be in the same room at the same time, and can be handled more effectively with asynchronous communication like email, memos, Sharepoint documents, internal Wikis, etc. Moreover, even when a meeting is the appropriate process for your goal, you need to examine the preparation for the meeting. For example, you can’t expect management to sign off on a major capital expense or a significant engineering change in a single meeting: you need to engage in the process of nemawashi (consensus-building) in advance to ensure that the meeting will be effective. Advance one-on-one conversations with key people provide the context for the request, enable you to understand potential objections, and ensure that you can present all the necessary information to enable participants to make a decision.

Time is the most valuable resource individuals have. Time that many people can spend together is even more precious and difficult to schedule. It’s incumbent upon us to use that resource as wisely as possible. If you can get the Purpose, People, and Process right for your meetings, you will make it more likely that the limited time you have together isn’t a waste of time.

Real cooks practice 5S (and lean)

The lean blogosphere today has been atwitter with references to this morning's NPR story on organizing your life like a chef. It's a terrific story, and well worth the listen if kaizen is important to you, personally or professionally. Placing tools correctly, keeping things in order, creating standard work -- all of these ideas are embedded in what chefs call mise-en-place. When I was writing A Factory of One three years ago, my editor, Tom Ehrenfeld, pointed me to a terrific explanation of mise-en-place in Anthony Bourdain's book, Kitchen Confidential. In my view, mise-en-place is a perfect illustration of 5S done right.

Here's what I wrote in my book:

If you’ve never been to a restaurant kitchen, you’d be amazed at the contrast with the “front of the house” where you dine. It’s crazy back there, particularly during the lunch and dinner rushes. People are shouting and cursing, waiters, cooks, and “runners” are rushing through the kitchen trying to get orders out the door—it’s barely controlled chaos.

Except for one spot. The cook’s mise-en-place, the area where she organizes and arranges the ingredients she’ll be using that night. Chef and author Anthony Bourdain explains the importance of mise-en-place in Kitchen Confidential:

Mise-en-place is the religion of all good line cooks. Do not f**k with a line cook’s “meez”—meaning their set-up, their carefully arranged supplies of sea salt, rough-cracked pepper, softened butter, cooking oil, wine, back-ups and so on. As a cook, your station, and its condition, its state of readiness, is an extension of your nervous system—and it is profoundly upsetting if another cook or, God forbid, a waiter—disturbs your precisely and carefully laid-out system. The universe is in order when your station is set up the way you like it: you know where to find everything with your eyes closed, everything you need during the course of the shift is at the ready at arm’s reach, your defenses are deployed. If you let your mise-en-place run down, get dirty and disorganized, you’ll quickly find yourself spinning in place and calling for back-up. I worked with a chef who used to step behind the line to a dirty cook’s station in the middle of the rush to explain why the offending cook was falling behind. He’d press his palm down on the cutting board, which was littered with peppercorns, spattered sauce, bits of parsley, breadcrumbs and the usual flotsam and jetsam that accumulates quickly on a station if not constantly wiped away with a moist side-towel. “You see this” he’d inquire, raising his palm so that the cook could see the bits of dirt and scraps sticking to his chef’s palm, “That’s what the inside of your head looks like now. Work clean!”

Want to know what 5S is, without resorting to all those difficult-to-pronounce Japanese words? It’s mise-en-place. (Of course, we’ve just substituted French for Japanese, so there may not be any advantage for you.) It’s your physical workspace and your information precisely laid out so that you can find anything with your eyes closed. It’s the clean well-ordered inside of your head so that you can stay on top of all the work your boss, colleagues, and customers are dumping on you. . . . Quite frankly, if a line cook during the dinner rush can keep his workspace organized, so can you.

If you think about 5S in this light, and see the connection to the way you manage your work and your time, you can avoid turning 5S into a L.A.M.E. exercise.

Two dimensions for process improvement

Lean Mentality & Diffusion-3

There are two essential dimensions you need to consider when building a culture of continuous improvement: Diffusion and Mentality. Centralized responsibility/Cost savings mentality: This quadrant is the realm of "Chainsaw" Al Dunlop. The focus is on cutting costs, and decisions reside with one person -- usually the CEO or CFO. The result is a culture of fear, demotivated employees, and ultimately a weaker long-term strategic position.

Centralized responsibility/Value creating mentality: This is a better quadrant in which to live, but progress is slow because the "lean team" (or kaizen promotion office, or HR, or whatever) becomes the sole repository of improvement knowledge. Even worse, everyone else in the firm abdicates responsibility for improvement, passively waiting for the lean team to come to the rescue. Which might not happen for two years.

Diffused responsibility/Cost savings mentality: This is where many companies pursuing improvement find themselves. The good news: in this quadrant, you're getting everyone engaged rather than relying on an internal team of experts. The bad news is that with a focus on reducing costs, you'll have diminishing marginal returns (there's a limit to how much cost/waste you can take out of any system). Eventually you'll start to lose ground and end up only slightly better than where you started.

Diffused responsibility/Value creating mentality:Clearly, the place you want to be. (You can tell because it's green.) In this quadrant, everyone is engaged in improvement, and people are thinking about how to increase the value they provide to their customers -- internal or external. As a result, you see breakthroughs in lead times across the organization; innovations in product or service delivery; better customer service -- and lower costs. People are engaged and creative, because they're using their imaginations for lateral thinking, not just cutting and cost reduction.

August 2014 Newsletter -- Making the Invisible, Visible

Peter Drucker’s comment that “What gets measured, gets managed” is widely known. Along similar lines, I’d like to suggest, “What gets seen, gets improved.” (Or at least, has the possibility of getting improved.) The common complaint in an office environment is that processes are unpredictable or too complex to represent visually. But that’s just lazy thinking. . . . Download PDF to read the full article

The Three Elements of 5S

3 Elements of 5S-4-2

Mark Graban blogged recently about poorly executed 5S. I've also covered 5S extensively as it pertains to the management of information in an office environment. But people still get it wrong -- perhaps because they get wrapped up in the confusing jargon of Sort, Shine, and Set in Order? In any event, inspired by Mark, I've been thinking of the three key elements of 5S -- Purpose, Organization, and Maintenance -- that ensure the 5S exercise isn't a dispiriting waste of time, effort, and energy.

Framework and Maintenance, without Purpose is a soul-sucking waste of time. It's LAME masquerading as lean. As both Mark and I have written about, you've got to have a reason for implementing 5S. Just trying to keep people's offices neat and pretty without a clear business objective is pointless.

Purpose and Framework, without Maintenance makes you the victim of entropy, which is a particularly potent force in most office environments. If you're not going to make the effort to maintain the organization that you've created, don't even start. It's like cleaning your house once a year -- why even bother? The effort expended on a single, annual cleaning blitz isn't worth the payoff. Sure, for a week or two you won't be picking your way through a living room filled with empty pizza boxes, but the other 50 weeks a year you're a candidate for Hoarders.

Purpose and Maintenance, without a Framework is the epitome of ineffectiveness. If you don't have a framework for how you organize the physical and electronic information, you're just wasting your time. It's like having a car and keeping it clean without knowing how to drive. I mean, you can do it, but why?

Disrespectful communication

Lean Communication

  Microsoft's announcement that it will lay off 18,000 employees is a brilliant example of how not to show people respect in communication. Stephen Elop took 11 paragraphs (!) in his internal email to finally get to the point that, you know, 18,000 people were about to be sacked. Brevity is not only the soul of wit, and plain, direct speech is a key element of respect for people. Less than One Paragraph: This is Donald Trump territory. "You're fired!" hardly constitutes respectful communication.

Eleven Paragraphs: To go this far, you have to bury the lede behind an awful lot of turgid business bloviation. While employees are anxiously looking for information about their jobs, they have to trudge through a bog of business jargon ("financial envelope," "accruing valuing to our strategy," "right-size operations," etc.). If your corporate environment permits emails like this to go out, it's probably ridden with what Bob Emiliani calls "fat behaviors," that create fear, uncertainty, and mistrust. Good luck establishing any sort of continuous improvement culture in that environment.

The alternative to the cruel bluntness of Donald Trump and the clueless circumlocution of Stephen Elop is direct and empathetic communication. State the facts honestly. Be humble. Bring humanity into your conversation. Remember that at the other end of your bloated strategy email is a real human being nervous about losing her job because she doesn't make a seven figure salary, or have millions in stock options, or have the security of a corporate pension.

If you still don't know how to communicate with a little more respect, read Bob Emiliani's work, or talk to Liz Guthridge. And if you want some entertainment, read Kevin Roose's hilarious evisceration of the Microsoft memo here.

Kaizen Lies Between Frustration & Seagulls

Knowledge vs Authority

Continuous improvement requires the coupling of authority to make changes and knowledge about what to change.

Authority without knowledge creates that pernicious breed, the "seagull manager," who, in the words of Ken Blanchard, flies in, makes a lot of noise, dumps on everyone, then flies out.

Knowledge without authority leads to frustrated workers who know what changes to make, but lack the authority to do so without the approval of at least one layer of management.

A structured problem solving approach like A3 thinking creates overlap in these two zones. As John Shook argues in his book Managing to Learn, the A3 creates "pull-based authority," such that the person with the greatest knowledge earns the authority to make decisions and improvements. That's fertile soil for kaizen.

Say ACK! for Kaizen

Courage Autonomy Knowledge

I've noticed recently that even in the presence of obvious problems and easy improvements, people often don't engage in kaizen. They just muddle through their work, wishing it were easier, and resigning themselves to the fact that it's not. But why? I think that kaizen activities flourish at the intersection of Autonomy, Courage, and Knowledge.

• Autonomy: the ability for a person to act without seeking permission. Many organizations are so sclerotic as to require workers to get approval for any change they want to make. Example: Rich Sheridan, president of Menlo Innovations, allows (expects!) people to sit where they need to sit and form the teams they need in order to create the right products for customers. Or any organization that eschews suggestion boxes in favor of improvement boards on the walls.
• Courage to Experiment: the confidence that making mistakes is natural, expected, and -- as long as it doesn't cripple the company -- welcome. Example: Grey Advertising (NY) bestows a "Heroic Failure" award. SurePayroll actually gives a cash award for errors that lead to significant learning. WL Gore distinguishes between "above the waterline" and "below the waterline risks" -- only the latter need approval from the senior team.
• Knowledge: understanding one's work well enough to be able to improve the way things are done. Example: This is the easiest criteria to meet, because anyone who does a job with some modicum of self-awareness has the necessary knowledge to improve the work. In other words, *everyone* has the knowledge they need to make improvements.

Having just one or two of the elements won't create an environment conducive to kaizen. Without all three, you end up with passive bystanders, frustrated innovators, or wasted effort.

July 2014 Newsletter -- Unleashing Kaizen Creativity

Anyone else who keeps digging when they’re at the bottom of the hole instead of figuring out a better way to do their job, is handicapped by poor leadership. Poor leadership stunts innate “kaizen creativity” as surely as poor soil and drought stunt the crops on a farm. . . . Download PDF to read the full article

Don't confuse posters with action.

 

I have a new theory: the more posters, stickers, and banners promoting 5S, the lower the level of adherence to 5S principles. You can extend this idea to pretty much anything a company deems important: if leadership is promoting respect, or innovation, or safety, you'll probably find sexual harassment charges, me-too products, and lots of worker's comp claims.

Point #10 of Dr. Deming's 14 Points states, "eliminate slogans, exhortations, and targets for the work force." (Yes, I'm selectively quoting. This point is in reference to defects and productivity, but I think that the basic argument holds true.) Instead, "institute leadership" (point #7) to get the results you're looking for.

People are social animals. We take our behavioral cues by observing leaders' actions, not from reading the wallpaper. If you want 5S, you've got to live 5S. I know of no better example than the president of a $100M contract manufacturer of electronics boards, who gets on his hands and knees and cleans the floors of his company. Every. Single. Morning. (Check out this photo from Kevin Myer's excellent post):

If you want 5S -- or respect, or cost savings, or safety, or whatever -- first, get on your knees and start doing it yourself.