Are We Sending the Right Message?

The latest issue of the Spring 2018 AME Target magazine excerpts some mind-boggling—and depressing—data from LNS Research about continuous improvement. As you can see in the chart below (copied from the magazine), fully 44% of responders said that ROI justifications are a key operational challenge in making improvements.

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The lack of executive support (20%) and the lack of an improvement culture (30%) is predictable. These complaints are aired at all lean conferences.

But the issue of ROI justification is both mysterious and worrisome. One implication is that workers are looking to major investments in machinery, software, or other technology for their improvements, rather than exercising their creativity. 

Another interpretation is that the executive leaders don’t value small improvements. Instead, they’re looking for huge gains from a few major events. They’re looking for home runs instead of singles and walks—while at the same time, they’re unwilling to make the investments unless they can be guaranteed a huge ROI.

In a particularly ironic twist, the very fact that organizations are relying upon large improvements instead of small, daily improvements drives another problem: the lack of continuous improvement culture and processes. Large improvements tend to be episodic, and they often involve just a subset of workers. As a result, the kaizen mindset doesn’t spread throughout the organization. 

Obviously, I haven’t been to these gembas, so I have no idea what the actual situation is. But legions of organizations—including Toyota—make enormous strides in performance through small, simple kaizens that are free or cheap. In fact, many companies report that their biggest gains come from the steady accumulation of these small improvements, and not from some heroic—and expensive—fix to a problem. Paul Akers, for example, has kept his company on a remarkable growth trajectory by focusing on 2 Second Lean. 

Moreover, focusing on small improvements increases the likelihood that everyone gets involved in kaizen, and not just one or two times per year. Culture is an outgrowth of our daily behaviors. If you want to develop a continuous improvement culture, you have to start doing continuous improvement—even if those improvements are small changes that won’t directly affect the company’s financial results. As Masaaki Imai said, kaizen means “everybody, everywhere, every day.”

I wasn’t involved in the research presented in Target. But if these results are reflective of the lean community at large, then it raises an important question: what message have we been sending to the leadership and employees at these companies? 

How to Build a High Trust Workplace

Megan McArdle of Bloomberg View recently wrote about the benefits of a high level of trust—among individuals, companies, and even government— in Denmark:

[The high level of trust among people] allows Danish labor to be more productive than workers elsewhere. An economy’s labor productivity, after all, is its output divided by the number of hours worked. Supervision and enforcement are in some sense wasted labor; they don’t, by themselves, produce extra output. So if you can get rid of the people who are paid to stand around ensuring that people do their work and don’t cheat, and instead redeploy them to make something or perform a necessary service, productivity will go up. When labor is highly productive, employers can afford high wages.

It seems to me that one of the great benefits of lean tools is the way they increase the level of trust among people in an organization. Functional and divisional silos will never go away, of course, but the tools we deploy tend to reduce the mistrust that corrodes the relationships between them.

Value stream mapping, for example, gets people from different departments to sit on the same side of the table (literally and metaphorically) so that they can see a process from the same perspective, rather than from their entrenched positions. People in a value stream mapping exercise don’t point fingers at each other—they point fingers at the work.

Toyota kata does the same thing. At a new client I’ve started working with, kata coaches are working with learners in all different departments, enabling them to see how work gets done in other functional areas. It doesn’t matter whether or not the work they’re observing was passed from the coach’s department. Seeing the learner struggle with problems creates understanding, empathy, and eventually trust.

In fact, most lean tools foster trust in the same way. You can’t draw a spaghetti chart by yourself, but when your supervisor maps your steps, she gains a deeper appreciation for the burden of your job under the current layout. Or when you level the workload on a production line, you’re forced to think about the burden of a person’s job in the context of his productive capacity.

At the most fundamental level, the entire ethos of “going to the gemba” is the essential tool in building trust. Seeing your colleagues and your employees struggling with their actual work, instead of just complaining about them in a conference room, is the soil in which trust—and respect—grows. A3 problem solving is so powerful precisely because it institutionalizes this activity.

As Megan McArdle points out, we don’t have Denmark’s level of trust. Given the size and heterogeneity of the US, it’s unlikely we could ever develop it on a national level. But we can certainly do so in the smaller environments of our companies by using the lean toolbox.

Improving Teamwork Through Kata

I introduced Toyota Kata to a new client last week with a short simulation. It was the first time that I formally taught this approach to problem solving, and it was probably as educational for them as it was for me. (Note to self: need to get a few more cycles in to adequately model the coaching kata!)

The people in the class loved the approach. Not only could they see improvement from the first round to the last, they could feel how different this kind of structured experimentation was from the way they typically solved problems at work. But what really struck me—and them—was the way that kata improved teamwork.

This is a small company that suffered through layoffs last year, which caused people to emotionally hunker down in their silos. Problems were always due to the other department, not their own. People pointed fingers rather than looked into mirrors. The relationship among functional silos may not have been acrimonious, but it certainly wasn’t open and cooperative.

However, during the kata exercise they were all on the same side, trying to solve a shared problem rather than assign blame. And the emphasis on rapid experimentation eliminated the fear about suggesting the “wrong” solution. As Mike Rother frames it: “We know this isn’t going to work, so don’t worry about it being “right.” But by trying it, we can learn what might work.”

The participants said that the atmosphere during the simulation was totally different from what they regularly experienced at work. And the atmosphere in the classroom changed, too—they interacted with each other far more after the simulation than they had prior to it. The exercise had changed their behaviors as students, not just employees.

Kata isn’t the answer to all problems, and it may not be the way to introduce continuous improvement to all companies (any more than 5S is always the right first step). But in this case, it worked perfectly for this company.

*        *        *

And in an only tangentially related note, James Dyson (of Dyson vacuum cleaners) was the subject of a recent How I Built This podcast. His description of improving his vacuum (through 5000 iterations!) epitomizes the kata mindset:

It was entirely empirical . . . .I was building one prototype at a time, making one change at a time. So I knew what difference that one change made, and so I progressed. There were quite a number of problems to solve. Firstly, at that time the state of the art was that cyclones were only good at separating dust down to 20 about microns, whereas I had to get it down to half a micron – cigarette smoke type particles. So that was the first problem. And the second thing was that I found that hairs and fluff would go straight through the cyclone and not be collected. And I built 5,127 prototypes before I got it right.

Why It Makes Sense (Sometimes) to Start With Hoshin Kanri

I just published a new article at Industry Week about why it (sometimes) makes sense to start a continuous improvement initiative with hoshin kanri (also known as strategy deployment, or policy deployment).

Up to now, I've been dismissive (or even scornful), of companies that started with hoshin. Walking before you run has always seemed to be a better approach to me, and so I've been a strong advocate of starting with some sort of small, everyday kaizen -- or as Paul Akers would say, "fix what bugs you."

But a recent conversation with a friend has made me rethink that attitude, and now I believe that there's at least one really good argument to be made for starting down the lean path with hoshi kanri. Read more here. 

Why You’re Struggling to Improve Company Culture

(This post originally appeared in Industry Week.)

The new Proqis BTOES Insights report on operational excellence is out, and by a landslide margin (55% to 37%), the most critical challenge for respondents is “improving the company culture.”

Anytime I read that culture is a stumbling block for companies pursuing continuous improvement, I go back to John Shook’s reflections on NUMMI. With the same people as those who worked at the GM Fremont plant, product quality in the NUMMI joint venture with Toyota went from GM’s worst to best in one year. Absenteeism dropped from 20% to 2%. Strikes stopped completely. No one was intentionally sabotaging cars. As Shook points out, the union and workers didn't just accept Toyota's system; they passionately embraced it.

If GM/Toyota could make this kind of tectonic improvement in company culture in one year, why are companies that aren’t starting from such a deep hole struggling so much? Why do 55% of the BTOES respondents say that cultural improvement is such a challenge? I think there are several reasons that companies struggle with cultural change.

1. Leading with artifacts. Organizations may have finally let go their obsession with lean tools, but I’m seeing it replaced by an obsession with artifacts: kaizen submission cards, A3 forms, visual management boards, 5S checklists, and the like. Without the appropriate management values and attitudes, these artifacts become just more examples of meaningless corporate flotsam and jetsam landing on the workspaces of hard-working staff. When management doesn’t actually support people in A3 problem solving—not only by coaching the employees, but by giving them time to work on those problems—then the A3 is just another template buried on the file server. When leadership doesn’t come to the visual management boards at least a couple of times per week to ask questions, learn what people are working on, and provide the needed help, then the boards quickly become moveable wallpaper. You can’t lead with artifacts. Artifacts are only valuable when they follow a change in leadership behavior.

2. Lack of investment. Shook reports that in the first year of the NUMMI joint venture, 600 NUMMI employees—anyone who supervised another person—visited Japan for at least two weeks of intensive training. Additionally, Toyota sent about 400 trainers from Japan to the US to work side-by-side with their NUMMI counterparts for three-month stints. That’s an extraordinary investment of time, money, and people. Now look at the “investment” most companies make: they set up an OpEx office with a few people; they run workshops on tools; and they lead kaizen events. Sometimes they’ll pay tuition for employees to get a yellow or black belt from an external Six Sigma training firm. To be sure, Toyota and GM are huge auto companies—not too many companies can afford to spend the kind of money needed to send 1000 people around the world. But you seldom even see a commitment to investing time on a daily basis for practicing lean and solving problems. An employee at an HVAC manufacturer recently told me that he thought lean was just another management flavor of the month. But when the president told him that he would happily pay overtime so that he could do his daily 30 minutes of kaizen, he knew that leadership was committed. And he’s now one of the biggest supporters of lean in the company.

3. Poor framing. Many companies promote lean as simply a different way for employees to do their jobs. But it’s more than that: it’s a fundamental shift in the way both workers and leaders must think about their work. The installation of the andon cord at NUMMI is one of the most well known changes that Toyota made when they started the joint venture. Shook says that GM colleagues questioned the wisdom of installing the system at NUMMI:

“You intend to give these workers the right to stop the line?” they asked.

Toyota’s answer: “No, we intend to give them the obligation to stop it whenever they find a problem.”

There are two critical shifts in mindset here. First is the belief that fixing problems is a worker obligation, not just a right. Most companies don’t talk about this obligation. They talk about tools and artifacts, problem solving and respect for people, true north and customer focus. But they don’t emphasize the absolute, non-negotiable responsibility of every worker to stop a process when they see a problem. The second shift is the change in management attitude towards problems. How does leadership respond when employees find them and bring them to leadership attention? It’s a cliché by now, but management’s matching obligation is to cherish problems, to see them as treasures so that employees are willing to accept the burden of stopping the line. This change in thinking on both sides is the linchpin for successfully changing the organizational culture.

Changing an organization’s culture is no small feat. It takes time and persistence. But a lean organization is one that is fundamentally human-centered, one that enables people to thrive and grow. If we focus more on leadership mindset and behavior, and less on the mechanical aspects of operational excellence, it should be easier to create the culture we want. 

How to Build a Better Organization? Build Better People.

The “All Blacks,” New Zealand’s rugby team, is arguably the most successful sports team in history. Since its founding in 1903, the team has won 77% of its matches. However, something went wrong in 2003. They lost the World Cup that year, and by the following year, players were drunk and disorderly, on-field discipline faltered, senior players threatened to quit, and the team began losing.

A new management team under Graham Henry began to rebuild the world's most successful sports team with a culture emphasizing individual character and personal leadership. Their new mantra was “Better People Make Better All Blacks,” and it was anchored in 15 core principles. 

                                                                                   infographic courtesy of @YLMSportScience

Although the specifics differ, many of the principles echo that of lean.

1. Sweep the Sheds. Before leaving the dressing room at the end of the game, all players clean up as a symbol of humility. This humility is at the core of Paul Akers’s insistence that visiting CEOs clean the Fastcap bathrooms with him, or the way the president of HOKS Electronics in Japan sweeps and mops the floor along with his employees everyday.

2. Go for the Gap. A focus on continuous improvement means that even when you’re on top, you always have room to get better. You can see this mentality at all organizations that have truly embraced lean, from hospitals like Thedacare to manufacturers like Danaher.

3. Play with Purpose. People perform better when they’re in service of a larger purpose. For the All Blacks, it’s elevating the performance of the team. Toyota talks about “true north,” and Simon Sinek preaches about starting with “why.”

4. Create a Learning Environment. Team leaders are teachers of the younger players. Teaching and coaching cannot be outsourced to the HR department at your company; everyone must take ownership of that responsibility.

5. No Dickheads. Or as Bob Sutton would say, “No Assholes.” Self-explanatory.

6. Train to Win. Preparation and practice are essential to success in competition. Great organizations enable people to thrive in their daily work, not just by showing them how to do their jobs, but by supporting their growth. Mike Hoseus’s story about how his Japanese teammates actually thanked him for pointing out an error he made is a beautiful example of this approach.

7. Invent Your Own Language. A vocabulary, language, and values that everyone understands bind the group. This, of course, is the reason I wrote Building the Fit Organization—I wanted to provide people with a way to express core lean ideas without relying upon often off-putting references to Toyota. Whether you use the language of fitness (as I did), or something else, the key is finding something that resonates with you and your team.

8. Ritualize to Actualize. Rituals reflect, remind, and reinforce the belief system that you’re creating at your organization. Whether that’s the morning meeting, the 30-minute “lean and clean” time that Cambridge Engineering gives its employees everyday, the daily “walk around review” at Lantech, or the peer-to-peer review of lean concepts at Kaas Tailored, these aren’t just breaks from daily work for the employees. They’re rituals that reinforce the principles and beliefs that the company espouses.

These principles are powerful enough, but their impact is heightened by clarity and simplicity. Compare them to the typically turgid, grammatically tortured, long-winded, and uninspiring mission statements that most companies carve into plaques on their walls. Even organizations pursuing continuous improvement sometimes make the mistake of larding up their intent with meaningless corporate-speak.

Find your own principles. Live them daily. Speak plainly. That’s the road to excellence. 

Don’t Forget the Heart

Three days at the AME Conference in Boston showed me that there’s no shortage of skilled, knowledgeable, continuous improvement professionals who can teach their colleagues the intricacies of lean.

Three days at the AME Conference also showed me that we should spend less time focusing on lean tools and techniques, and more time telling stories that reach the heart.

Don’t get me wrong—tools are not just important, they’re necessary. But the energy, the passion, the emotion, the raison d’etre for the entire lean effort comes from the emotional power of stories.

Raye Wentworth of New Balance brought the house down in her keynote speech. It wasn’t because she’s such a polished speaker, and it wasn’t due to the huge reduction in inventory levels and space utilization. No. She moved people to tears (and cheers) when she played a video showing how their lean operations allowed one of her employees to thrive at work and contribute to his community after work.

Paul Akers intrigued the audience when he talked about his 2 Second Lean approach to improvement, but that’s not what really hooked the crowd. It was his videos of Cambridge Engineering, in which a new employee shook his head in wonder at how the president of the company knew his name before he knew the president’s name. (That’s the power of leader standard work.) And the video of another worker whose face lit up when he described the way he gets to use his creativity and imagination on the job.

These human stories are what resonated in the hearts of the audience. It’s the human stories that touch us, that move us, that inspire us. And perhaps that’s where we—consultants and internal improvement professionals—should be spending more time. 

Simon Sinek preaches that we should “start with why.” That’s a great rule. But we can’t forget that the “why” of lean isn’t just to deliver products faster or cheaper. The why is about making people’s lives better—not just for our customers, but our employees. If we do a better job of making that clear, we’ll probably have an easier time getting people to embrace a new way of working. 

Applying Kaizen to Teaching Lean

I’m back from a workshop with a client in Denmark. The room was filled with continuous improvement experts from about a dozen companies, all of whom were looking for inspiration and ideas for accelerating the promotion of lean in their organizations.

I was struck by how little variety and innovation exists in the way we teach lean. Whether you’re in the US or Europe, it seems that the formula is pretty much the same: one part classroom lectures, two parts PowerPoint presentations, a dash of simulations, and a tablespoon of shop floor kaizen. Based on the results over the past thirty years, as a recipe for improvement, it’s guaranteed to produce a pretty flat soufflé. 

We spend enormous effort on improving our organizations’ various processes, but I don’t see the same effort in improving our own processes in teaching lean. You see periodic spasms of innovation—teaching through A3s following the publication of Managing to Learn, or direct coaching following the publication of Toyota Kata—but by and large, it’s year after year of boring lectures and soul-destroying, bullet point-choked slides. I wasn’t at Toyota in 1951, but I’m pretty confident that Taiichi Ohno wasn’t dragging his welders into day-long workshops to teach his 8 Wastes. 

My friend Sally Dominguez (a keynote speaker at the recent LPPDE Conference) has developed an approach to innovation that she calls “Adventurous Thinking.” In her “parkour” exercise, you identify five characteristics (or norms, or expectations) of a product or service, reverse them, and then figure out how to make those ideas workable. When we did this exercise on “teaching lean in your company” in Denmark, the results were fantastic. People started thinking creatively about teaching:

• If you’re training for a marathon, for example, you get an individual, customized program—we don’t force everyone to train together at the same time and the same speed. So why can’t we individualize lean training?
• People love playing games, especially on their phones and computers. Why can’t we make lean into a computer-based game?
• Ant colonies (yes, ants!) don’t rely upon one ant or group of ants to direct the activities of each individual ant. Broadly dispersed pheromones provide the direction. How can we replicate that idea in a company?

Here are some of the specific ideas the group generated:

Current Norm	Reversal	New Idea
PowerPoint slides	No presentations	Experiential learning – practice on the job, and then follow up with explanation of theory
Classroom based	Gemba based	Instruction done at the gemba w/o any classrooms.
Inside the company	Outside the company	Observe work at other companies and invite other firms to observe (and improve) your own processes.
Driven by the kaizen office	Driven by the workers	Gamification through badges, leaderboards, etc.
People trained in groups	People learn at their own speed	Tablet/phone/computer-based simulations, learning modules, and games.
Departmental learning/successes not aggressively shared	Learning/successes shared with everyone	Capture improvements when they’re made with iPhone videos and show at daily standup meetings.

Will all of these ideas work? Will they work in your organization? Who knows? But that’s not the point. In about 90 minutes, the participants came up with dramatically new ideas and frames for thinking about their work—frames that will help them do kaizen on their own work, and that will hopefully drive their organizations to new heights.

What have you done recently to improve the way that you teach and promote lean within your company?

Are Companies Following "2 Second Lean" Really Doing Lean?

A reader questioned my post about the lean conference I recently attended where everyone was a rabid adherent of Paul Akers’s 2 Second Lean philosophy. He wondered whether these companies are truly practicing lean, or just kaizen. In fact, he argued that perhaps Paul should be calling it “2 Second Kaizen” rather than “2 Second Lean.”

He has a point. After all, many of the improvements people mentioned are relatively superficial. I don’t think the companies are doing much deep analysis of operations work using standard combination worksheets; I’m not sure if anyone reorganized their company along value streams; and I didn’t see any of the heavy math supporting kanban levels, etc. And while there’s nothing wrong with that—you’ve got to start somewhere, right?—there’s definitely more to lean than standardizing the bathroom cleaners. 

But I can’t agree with this reader’s argument.

For one thing, these companies consistently strive for one-piece flow and perfect quality, not just neat and tidy workplaces. 5S is certainly helpful in reaching that goal. And even if applying 5S in the bathroom and insisting that the president cleans the toilet seems trivial and superficial, I can’t help but think that there’s real power in those activities. The bathroom can serve as a “model line" that many consultants advocate and a place for everyone to learn. Employees might think, “Hey, I see how organizing and standardizing the bathroom cleaning supplies makes it easier for me to clean the place. . . I bet my workstation could benefit from the same approach." 

I also believe that when the president joins in cleaning the bathroom, it sends a powerful message that cleaning and taking ownership of one’s space is everyone’s job. We all know that when leadership doesn’t get involved in doing the same activities as the front line, it sends a message that it’s really not that important, whether that’s 5S, or gemba walks, or daily huddles, or whatever—and then it doesn’t stick. At a $100M electronics manufacturer in Japan, everyone participates in 5S for 30 minutes everyday. How do they sustain that commitment? At least partly because the president is on his hands and knees polishing the floors along with everyone else. To be fair, Art Byrne probably didn’t clean a lot of toilets at GE or Wiremold, but he was swinging a sledgehammer and helping move equipment. Not all the time, but sometimes. 

True to the spirit of lean, the companies at this conference have placed development of human potential at the core of their thinking. Learning more about lean and working hard to build a community of problem solvers is part of daily work, either during the morning meeting or during the daily time set aside for kaizen. Moreover, figuring out how to make work easier for employees, and how to increase value for customers, is on everyone’s mind, everyday.

As near as I can tell, as a result of this approach, they’ve overcome many of the cultural hurdles to lean that other firms struggle with. It may not be perfect, but I'd rather see everybody engaged in small improvements instead of the corporate wallpaper bullshit of 5S audit sheets that are posted and not used. Maybe that's all a company needs instead of a bureaucratic and ponderous lean “program.”

Five Ways to Spur Lean in the Office

A couple of weeks ago, I offered five reasons for why we don’t see lean very much in the office and admin areas of most companies:

• Waste is harder to see in an office 
• Waste costs less in an office 
• Office waste is hard to calculate
• The customer (usually) doesn’t complain about the waste in the office
• We’re not very good at talking about waste in the office 

Naturally, a reader asked me to put my money where my mouth is and suggest solutions to this problem—and given that I make a living as a consultant, I suppose that’s a fair request. Even though every situation is unique and idiosyncratic, the following countermeasures would be worthwhile in any organization:

1. Make speed and quality a goal for office functions. Calculate takt time for transactional, repetitive tasks such as entering orders, paying invoices, processing time cards, etc., and assess your performance against it. Even though office workers will claim that their work is totally variable, there’s actually a relatively predictable demand for most office and administrative services. Even seemingly random work such as incoming customer service calls can usually be broken down into discrete categories that can be addressed—for example, 25% of incoming customer calls might be related to shipping information, or questions about invoices. If meeting takt time is not an issue—for example, in closing the books at the end of the month— then measure and benchmark the time it takes to perform those tasks and challenge the team to figure out how to do them faster.

2. Start treating offices errors and mistakes as real defects. Obsess over quality. Lean thinkers are rabid about pursuing defects on the shop floor—every missed weld, every scratched paint job, every stripped screw leads to an intensive root cause analysis and a host of countermeasures. Take that same fanaticism to the errors in the office. Are orders ever misfiled? Do people ever put incorrect shipping information into a warranty claim? Do product developers every transpose style codes or prices in a product spec sheet? Do meetings ever end with ambiguity around next steps? Do you ever have people in a meeting that don’t why they’re there? Does a supplier ever have to call to follow up on an invoice? These aren't just minor mistakes or errors. They're defects, and they create wasteful rework, consume valuable time, and jeopardize your relationship with suppliers and customers. Treat them seriously.  

3. Write your own book on lean in the office. Not literally, of course. But you can actively seek out examples of other organizations that have applied lean in administrative areas. Read about how Fujitsu Services in the UK did terrific work with lean thinking in a call center (full case study here, and more digestible summary here. Check out Karyn Ross and Jeff Liker’s new book, The Toyota Way to Service Excellence, which is full of examples of firms that have used lean in their office functions to improve efficiency and customer service at the same time. Engage the larger lean community and ask for examples of how they’ve improved office work with lean. And, of course, you can start capturing and documenting the improvements you make to generate excitement for more kaizen.

4. Stand in an Ohno Circle. Taiichi Ohno was famous (or infamous, depending on how sore your feet got) for drawing a circle on the factory floor and asking employees to stand in it all day so that they could deeply observe the work being done. There’s more to see in a factory, what with all the machines and metal moving around, but you can still see quite a bit watching office staff. How often are they interrupted in the middle of their work? How long does it take to get to the common screens in the computer system? How often do they switch tasks? How much time do they spend in meetings—and what’s their role in those meetings? How many handoffs occur between departments in order to complete a single transaction? How long does the item of work—an invoice, a customer order, an engineering change order, etc.—sit in an inbox before it gets picked up? The simple exercise of focused observation will help you see the waste.

5. Ask other people do your job. Factory floor workers at Cambridge Engineering, an industrial HVAC manufacturer in St. Louis, regularly ask their colleagues to do their jobs for them for a couple of cycles. Why? For one thing, it’s difficult to see the waste in one’s own work. It’s much more apparent when you’re watching someone else fumble with a process when they don’t know the workarounds and shortcuts that you’ve internalized. Watching someone else do the job literally gives the primary worker a fresh perspective on the process. (Workers will often video the other person doing the work so that they can review it together afterwards.) It’s a bit less exciting to video someone clicking a mouse, but you can still see things with fresh eyes when you watch someone else fumble through computer screens or make a data entry error while filling out the same information on four different forms in a product development spec package.

Give these five approaches a try, and see if they don't jumpstart your lean efforts in the office. 

Three Ways to Accelerate Your Lean Journey

I spent two days in St. Louis last week at the Global Lean Leadership Conference. It’s a small conference—only about 150 people—consisting of companies that have embraced Paul Akers’s 2 Second Lean philosophy. Companies that wanted to join the conference were required to have the president attend (although there were many other people from those companies as well).

The tone was dramatically different from any other conference I’ve been to. People weren’t just interested in lean or practicing lean—they were rabid about it. Lean wasn’t just a job for the attendees or a way to run a company. It was a way of life. Attendees and presenters continually spoke about how it had improved both their work lives and home lives. They talked about how lean made them better workers, better husbands/wives, better people. How much they loved the autonomy they had and the creativity they were free to use. How everyone looked out for each other in the workplace. How everyone felt safe enough to show their problems and ask for help. “Respect for people” is a big topic in the lean community these days, but these companies really have employee development at the core of their existence.

It probably sounds a little cultish. . . and honestly, it was a bit. But at the same time, I didn’t hear any of the usual griping about how it’s so hard to change the corporate culture, how people won’t embrace lean, about how the leadership team isn’t really supporting it, etc. etc. The common phrase I heard was that “our people are on fire with lean.” The difference in mood between these participants and those at the larger lean conferences was stunning. It was nothing but excitement and passion, not frustration.

A few caveats: these are smaller companies with dozens or hundreds of workers, not tens of thousands. They have simpler supply chains and less complex manufacturing processes—they’re definitely not building fighter jets. They’re self-selected—the owners and presidents have chosen to embrace lean fully and go to this conference. And they’re all still early in their lean journeys, making relatively simple improvements and getting a lot of low-hanging fruit.

But still. Continuous improvement was woven into the DNA of every one of these companies. They were living Masaaki Imai’s injunction that kaizen is about “everybody, everywhere, everyday.”

I noticed three areas in particular that I think the larger lean community can learn from:

1. Use of (simple) technology. Everyone at this conference used videos (made on their iPhones) to spread ideas, share improvements, and build internal and external connections. Making videos of improvements and showing them at morning meetings is standard practice. (And every company swore that videos made all the difference in creating a lean culture.) But they went further: the customer service staff at one company answers questions on video and sends it to customers. The HR team at another company replaced the annual hour-long open enrollment meeting with a four minute video. Field service staff at that same firm send videos to engineers and front line workers showing issues they’re dealing with. And another company actually sends its customers videos of the quality inspector with the customer’s product as it goes through final inspection. The reliance on email in most other companies feels like a horse and buggy next to a Ferrari.

2. Bias for action. The companies at this conference don’t waste time forming teams to make variations on the Toyota house of quality, or some other transformation model in four colors with circles, arrows, and pyramids with bullet points in 5 point font explaining what’s going on. . . and that then has to be vetted by the leadership team in a few months. By the time most companies have printed out, laminated, and posted the graphic explaining their lean business system all over the office walls, these guys have implemented 300 improvements. They’re not wrapped up in creating fancy models. Instead, they’re passionately, relentlessly, obsessively focused on daily kaizen.

3. Community. I’ve always felt that the lean community is pretty close. People are generous with their time and always willing to help. (God knows, I’ve been the beneficiary of so many people’s assistance over the years!) But this group astonished me with the intensity of their collaboration. Many of them communicate daily on Voxer. They share videos—of successes and problems—with each other for joint celebration and problem solving. They have multiple WhatsApp groups where they can exchange ideas. The velocity and volume of knowledge exchange (not to mention the emotional support) in the larger lean community is thin gruel compared to the bonds formed and nurtured within this community.

If you want to get a feeling for what this passion looks like, check out some of Paul Akers’s videos from FastCap, and then follow links to the videos of other companies in this community. Many of them aren’t elegant, but the passion eclipses the production values. And wait till next year—the 2018 conference will be live streamed.

Five Reasons Why You Don't See Lean in the Office (Much)

I’m leading a one-day discussion for a group of companies in Denmark later this month, and in preparation I surveyed them about the state of their lean efforts. It seems that most of them are struggling to bring lean to the office/admin areas, even when they’ve made good progress in their manufacturing areas.

I’ve seen this pattern at most of my clients, and at the companies I meet at various lean conferences. In some respects, it doesn’t make sense. After all, it’s exponentially harder to relocate machines, re-engineer production lines, and redesign equipment and products than it is to move around a few desks, change a computer interface, or change the flow of paper through departments. And yet, companies still struggle to spread lean thinking to the office.

I have a few hypotheses about this:

1. Waste is harder to see in an office. Office workers largely deal with electrons, not protons—that is to say, their work takes the form of electronic documents, not physical pieces of metal, plastic, glass, and wood. In an office, waste doesn’t pile up like physical inventory and WIP; it hides in files on the server, in email inboxes, in extra clicks of the mouse that are really hard to see. It’s not laboriously transported across the factory floor; it’s emailed back and forth (and usually as an infuriating Reply All). It’s not an idle machine waiting for the next part; it’s an idle brain checking Facebook.

2. Waste costs less in an office. Scrap material is expensive. Overtime hours are expensive. Unneeded space and unused machinery are expensive. Computer storage? Paper? Brains that aren’t solving customer problems? Salaried workers who don’t get overtime? Cheap, cheap, free and free (respectively). To be sure, there are hourly workers in the office, but I’ve seldom seen an employee get overtime pay to process a few more invoices—that waits till the next day. It’s hard to get the senior leadership team to focus on a few dimes lost in the office when there are dollars at stake in the factory.

3. Office waste is hard to calculate. Related to point #2 above, waste in the production area is easy to measure. Cost of scrap, overtime, finished goods repair, rent on floor space—all that is easily measurable. But it takes a real force of will, and some creative assumptions, to calculate office waste. How much money is spent on pointless emails? How much does it cost to rework incomplete new account application forms? What’s the price assigned to waiting for the monthly financial numbers? It’s all waste, and all time that could be spent doing far more productive work, but good luck getting agreement on the financial cost. The largest component of office waste isn’t the hard cost that appears on the month-end financials. It’s opportunity cost.

4. The customer (usually) doesn’t complain about the waste in the office. Customers don’t hesitate to complain when product quality stinks or you’re late in delivery. But I can’t remember the last customer to complain because they sales rep hadn’t called on them recently. “You take too long to invoice me” said no customer, ever. Truth is, the office functions, while necessary to keep the company functioning and to get the right product to the customer on time, doesn’t have the same salience to the customer as does the product itself.

5. We’re not very good at talking about waste in the office. Without doing a comprehensive analysis, I’d estimate that 80% of the books, and 80% of the examples in those books, focus on the shop floor. When companies run classes on lean, they talk about the 8 Wastes and lean tools primarily in the factory context. Not only does that make it harder for office workers to understand how to apply lean in their areas, it subtly sends a message that lean is for the shop floor, not the office carpet. When people make their study trip pilgrimage to Toyota in Japan, they never set foot in the office, only the production areas. And in fact, even Toyota doesn’t apply TPS much to its non-production areas.

All of these factors mean that the leadership team doesn’t spend nearly as much time focusing on lean in the office as they do on the shop floor. And starved for leadership attention, lean efforts in the office make slow progress at best, and stagnate at worst.

Nevertheless, if you really want to be a lean organization, you’ve got to bring lean thinking to all areas of the company. Using the fitness metaphor from my book, Building the Fit Organization, you can spend your day in the gym doing squats for your legs, but if you don’t train your heart, you’re not going to get very fit—and you might be headed for a coronary. Your company, like your body, is a complete system. You have to train all of it, not just one area.

How are you going to deal with this problem?

Book Review: Practicing Lean

I just finished reading Practicing Lean, edited by Mark Graban. It's one of the most refreshing lean books I've read in a long time, and I strongly recommend it to anyone who is, well, practicing lean in their organizations.

The book is an anthology with contributions by (as of this post) 16 different authors. It's the variety in tone, content, and style that really gives the book its charm. Unlike so many of the turgid, overly long books on lean already in the market, Practicing Lean doesn't beat you over the head with obligatory success stories, convoluted models, fancy diagrams, derivatives of Toyota houses, and the dreaded authorial air of omniscience that makes all points seem obvious and inescapable. (And by the way, I'm including my own two books in this critique.) In contrast to the lecturing and dogmatic tone of most other books, Practicing Lean feels like talking to your buddies over a beer about what they're doing and what they learned that day. It's not a didactic lecture from a teacher. It's a peer-level discussion between you and the contributors. 

Not every point resonated with me -- which is fine. My experiences are by definition different from those of the authors. But at least once in every story I recognized something that I had done myself (often wrongly!), or an insight that I also had in working with clients. The pleasant surprise that comes from having a similar experience as the writer hooked me, and made me pay closer attention to the writer's other experiences or reflections. 

Practicing Lean isn't a reference book that you'll use when learning to implement a tool with which you're unfamiliar. It's not part of the lean canon like Ohno's, Womack's, or Shingijutsu writings. And that's a good thing. Instead, it's a book in which you'll occasionally read a chapter here or there when you want to see how someone else -- like you -- dealt with a real problem, at a real company, while facing similar headwinds. 

Sometimes you don't need a lecture from a professor (or god knows, a consultant). Sometimes you just want to hear how your buddy handled something. Practicing Lean is just that. 

The Saddest Words

The saddest words are these: “no one listened to me.”

No, this is not the title of a country song. These are the words of a front-line worker at a company I visited recently: “I’ve been complaining about this to the plant managers for two years, but no one listened to me.”

Recently, I was helping a client launch 5S in one of their production cells. At the pack station, I noticed that the worker had to bend over double to reach the Styrofoam packing blocks in a large cardboard box. She explained that she wasn’t allowed to cut the box down as they used up the material. Apparently, the company returned the empty boxes to the supplier, which were then reused for the next shipment back to the company.

She didn’t know anything about the arrangement—who decided it, how much money it saved, what the options were—all she knew was that getting packing material out of the boxes was hard work. When she told her supervisors and managers that the box recycling policy made her job harder, they didn’t do anything about it either—nor did they explain why the policy was important. From her perspective, no one listened—which is a stunning display of disrespect for people. (Actually, that’s not quite true. The old policy forbade her from even breaking the boxes down, so her work area was littered with empty boxes that she had to walk around. Finally, someone allowed her to at least break down the boxes so they didn’t take up as much space.) 

The good news is that the plant manager and the new VP of Operations participated in the 5S, and when they saw the box issue, they immediately went to purchasing to understand the whole story. Within three hours, the policy was changed, the operator was allowed to cut down the boxes, and we set up a gravity feed system for the Styrofoam packing blocks. The story had a happy ending.

But the company was lucky. This operator hadn’t given up yet. She still had the desire to make her own work, and the overall operation of her cell, better. You can imagine, though, that for every person like her, there’s at least one other who has learned from experience that the company doesn’t value his opinions. Those people have given up—they disengage from their work, punch their time clocks, and don’t try to make things better. Why bother? They know that no one will listen to them.

There are only so many times that a worker can be ignored until they finally stop trying. Then you’re left with a bunch of hands and no brains in the company, and wondering why the market is ignoring you. 

Small Steps or Big Steps: What’s the Right Way to Begin Improvement?

I’ve been struggling to resolve two conflicting facts:

• Science has shown that incremental change is both easier for people and more sustainable than dramatic change.
• Art Byrne has had undeniable business success by starting with dramatic change.

For those who don’t know, Art Byrne has a remarkable track record of success leading lean transformations at Danaher, Wiremold, and as a private equity investor at JW Childs. He describes his “shock and awe” approach (my terminology) in his excellent book The Lean Turnaround, where he takes the company through several week-long kaizen events. To be sure, there is some up front training, but the emphasis is on starting the lean journey with kaizen events. Operational and financial improvements are rapid, dramatic, and lasting.

But I’m struggling to reconcile his success with everything I’ve seen and studied, which runs counter to Byrne’s experience.

First, build organizational muscles
As I wrote in my book Building the Fit Organization, you don’t go into gym trying to dead lift 300 pounds on the first day, or try to run a 20 miles in your first marathon workout. You build your way up to those levels. In the same way, I believe that you have to develop the organizational muscles required for continuous improvement through small steps. Trying to improve productivity in a process by 25% on first try is (generally) a recipe for failure and frustration—notwithstanding Byrne’s success with that approach.

Mark Rosenthal, a lean thinker whom I admire, recently wrote:

During the [kaizen] event itself, the short time period and high expectations puts pressure on people to just implement stuff. People are likely to defer to the suggestions and lead of the workshop leader and install the standard “lean tools” without full understanding of how they work or what effect they will have on the process and people dynamics. . . .[as a result], when new issues come up, they are going to revert to what they know.

The data on change management are consistent: about 70% of change initiatives fail, despite the plethora of books, conferences, and scholarly papers dedicated to the subject. The roots of those failures are varied and deep, but I believe that one of the issues is the attempt to do too much too soon—the organizational equivalent of going out for a 20 mile run on the first day of training. Particularly in today’s more global business environment, with diverse teams working in different countries (to say nothing of different cultures), making and sustaining change is an order of magnitude more challenging than it was when even large enterprises were primarily located in one country.

Rosenthal advocates for small changes—in his case, the kind of changes that are made through the use of the Toyota kata approach:

When small changes are made and tested as part of experiments vs. just being implemented, then there is less chance of erosion later. Rather than overwhelming people with all of the problems at once from a bunch of changes, one-by-one lets them learn what problems must be dealt with. They have an opportunity to always take the next step from a working process rather than struggling to get something that is totally unfamiliar to work at all.

Avoiding fight or flight
Another powerful factor working against successful change is the short-circuiting of higher-level cognitive thinking that happens when people face major change. Dr. Robert Maurer, a professor of behavioral science at UCLA, explains that no matter how well intentioned the change, it triggers the fight or flight response seated in the amygdala, the “pre-historic” part of the brain. He’s found that it’s easier to get patients to change unhealthy parts of their lifestyle through small, incremental modifications than through wholesale changes.

For example, he had one patient begin an exercise program by simply marching in place for one minute in front of the television. . . then two minutes, then three, etc. Having her sign up for a six-month CrossFit class would have triggered the fight or flight response, but one minute of marching in front of the TV? It’s a small enough change that the amygdala didn’t take over from the frontal lobe.

The same dynamic occurs in the workplace: small changes circumvent the amygdala, making it easier for people to adopt and accept a new way of working. Paul Akers has done amazing work leading lean at FastCap in just this fashion. Rather than focusing on kaizen events, he asks each employee to figure out how to do their job just two seconds faster. Everyday.

The benefit of incremental change also ties into the findings of Professor Teresa Amabile. In her book, The Progress Principle, she suggests that the simple act of making progress in one’s work—no matter how small—causes people to enjoy their work more and be more intrinsically motivated. Amabile says that

the most important implication of the progress principle is this: By supporting people and their daily progress in meaningful work, managers improve not only the inner work lives of their employees but also the organization’s long-term performance, which enhances inner work life even more.

The week-long kaizen events used to kickoff the lean journey that Byrne champions certainly provide that sense of progress. But by definition they’re episodic (every 2 weeks? every month?) rather than continuous. By contrast, small incremental improvements, whether through formal kata coaching or some other method, create a feeling of progress everyday. And as I interpret Amabile’s research, that’s valuable for sustaining both the work changes people make as well as their motivation for continuous improvement.

I’m not in any position to contradict Byrne’s success, but I’m struggling to reconcile what I know with what he’s done. I’m open to all opinions on this.

Technology Ain’t Going to Solve Your Problems

I was at a conference for internet retailers two weeks ago and was overwhelmed by the software and hardware solutions promising to solve all their operational problems and turn their ecommerce businesses into a highly profitable, eight figure monsters.

They’re lying.

Technology is not, by itself, the answer. If you have a broken process and you add technology, all you get is a faster (and more expensive) broken process.

Let’s say, for example, that you invest in hand-held scanners in a warehouse. Yes, the system is pricey, but think of the productivity improvement! Think of the increased inventory accuracy! Except, maybe not. 

Consider a client of mine that bought scanners to improve picking and inventory accuracy. That was a great idea, until the pickers decided that it was a hassle to scan 12 boxes individually. Instead, some of them were scanning a box once and typing in 12. . . except that occasionally their fingers were a bit heavy on the button, and they typed in 122 instead. That did wonders for their inventory accuracy. 

Another client of mine invested in a fancy ERP system to help them manage the complexities of their supply chain, and better match supply with demand. One day, they realized that they had 18 months of inventory on-hand for a few products, and it was tying up badly needed working capital. What happened? The software calculated purchases based on customer demand, which was artificially inflated by a bonus program that the VP of sales ran during the normally slow summer months. They were stuck with a pile of closeouts that destroyed their margins for the year.

Even Amazon has run into this problem. They deployed scanners throughout their warehouses, but found that workers weren’t hitting their productivity targets when stowing products on shelves. The problem? Scanner batteries were running down in the middle of the process, forcing them to stop in the middle of putting away products, and walking to the office to find fully charged batteries.

The moral of these stories: your new hardware or software will only deliver the promised results when you combine it with solid processes. If your processes aren’t well-defined, or if they’re not consistently followed, or if they’re not particularly effective, then the new technology won’t deliver the goods.

Here are three steps you should take before investing in new tech:

1. Observe the work.
You think you know how the process works, but are you sure? Most likely, you know how the process is supposed to work. But in the time since you’ve gotten a new phone system, hired new staff, or added a specialized oncology service, I bet that those processes have changed. Your staff has developed shortcuts that you don’t know about, or are dealing with problems you didn’t imagine, and the process doesn’t run the way that it once did. By taking the time to really watch the work that’s being done—order entry, patient discharge, credit checks, etc.—you’ll either see how the new technology should support the work that’s actually being done, or you’ll want to redesign the work to remove the obstacles that will prevent you from reaping the benefits of the technology. I know of one hospital system that avoided buying $200K in new ventilators and wheelchairs—which everyone was dead certain they needed—simply by creating standard work and using 5S to ensure that they were returned to the right place.

2. Address behaviors first. Then add technology.
Technology might actually exacerbate problems if you don’t address bad policies and behaviors first. In the case of the client with the 18 months of slow moving inventory, the ERP system made dysfunctional policies even more harmful. Management let the software make purchasing recommendations based on sophisticated algorithms that didn’t account for the special sales promotions. That resulted in much larger purchases than a human in purchasing would have made. The company should have eliminated the practice of goosing sales with special promotions before rolling out the ERP—or at the very least, built a process that ensured review by the head of sales, finance, and operations to check the software recommendations. In the case of the Amazon stow line, it wasn’t until they created a supporting process to check, reload, and monitor the scanner batteries that the company achieved the promised efficiency gains.

3. Find the root cause of the problem.
Is technology and automation really the answer to the problem? While the siren call of technology is alluring, it may not address the root cause of the problem. If your customer service team task switches between entering customer orders and answering incoming phone calls every three minutes, you’ve got a problem that no Order Management System can fix. The reason the CSRs don’t have time to process orders is the interruptions, not the software they’re using. You’ve got to eliminate the interruptions before you add software.

Technology is not a panacea for your operational ills. But if you follow these three steps, there’s a much greater likelihood that you’ll be able to get real value from the cool technology you buy. 

How to Reduce A3 Resistance

You’ve probably struggled to get your clients or your colleagues to embrace the use of A3s in problem solving.

We’ve all heard the excuses: “It’s too much work.” “I don’t need it.” “I don’t have enough time to fill them out.”

No matter how much you explain that it’s not about the paper or the format, it’s about the thinking; that it doesn’t have to look pretty; that it’s essential to make your thinking visible; that it creates focused and structured discussions; that it follows the scientific method, etc., etc.—people still don’t embrace your A3-sized gift from the Toyota gods. It's just one more stupid lean hoop to jump through.

And really, why should they? They’ve done okay in their careers up to now without ever filling out an A3. Truth be told, until the CEO starts asking for A3s filled with eraser marks instead of four-color Powerpoints with animation, you’re going to have a hard time convincing them that the A3 really is a better way to go.

Here’s another approach: don’t ask people to fill out an A3 when they’re working on a problem. Don’t talk about metric-sized paper. Don’t talk about the scientific method.

But, when your client or your colleague comes to you with a problem, have a discussion. Ask open-ended questions about the problem. Tell her you want a more clearly defined explanation of the problem. Challenge her to refine it. Then ask her to get some data that supports her decision to attack this problem.

After she leaves, write down the problem statement on an A3, and keep it in your drawer.

When she comes back with the information you’ve asked for—the “Background” section described in Managing to Learn—have another discussion or two. Make sure that she has the facts, that they’re accurate, that they’re relevant. Then send her away to draw a picture of how the process works and get data to support her understanding of the current condition.

After she leaves, fill in the background section of the A3, and keep it in your drawer.

You see where this is going. Repeat the process for all the other sections of the A3.

Make the A3 a real discussion between the two of you without first asking her to fill out an A3. When you’re finally done working your way through all parts of the A3, then you can show it to her. Congratulate her on doing her first A3. Show her how your structured conversations were actually the A3, and that the paper was just the documentation. Help her see that writing one really isn’t a burden or extra work.

When I work with organizations that are new to lean, I always start by asking people to fix the (little things) that bug them, an idea straight out of Paul Akers’s 2 Second Lean approach. After they make that improvement—putting their computer monitor at a more comfortable height, changing the font on a customer service screen, getting a better tape dispenser in the warehouse—I tell them, “Congratulations. You’ve just done lean. Nice job.” That’s usually a surprise to them. At the outset, most people think that lean is some impenetrable exercise involving Japanese jargon, lots of talk about Toyota, and elaborate calculations relating to manufacturing flow.

Of course, there’s a lot more to lean than those simple fixes. But the experience of finding something that’s not working right and fixing it is the first step towards realizing that the way things are today isn’t the way things have to be tomorrow—and therefore it’s the first step in developing a lean mindset. Once they have that positive experience, it’s a lot easier to get them to start thinking about other improvements. And that’s the beginning of the problem solving culture you’re striving for.

The same is true for this approach to the A3. Rather than telling people that it’s the A3 way or the highway, make it easier for them. Just guide them through the A3 thinking process . . .and write the A3 yourself. When you show it to them, they’re usually pleasantly surprised that they’ve actually done an A3. They’ll see that it’s not that much work. They'll see that it's not a pointless exercise. They’ll see how it can be valuable in helping to solve their problems.

If you work at a company where A3s are already baked into the culture—it’s just the way we do things here—you don’t need to go down this slower road. But if you’re trying to establish the A3 as part of the culture, the evidence is pretty clear that teaching an A3 class and then telling people that they have to fill one out every time they work on a problem is not terribly effective.

Or, if you don’t like my approach, write an A3 yourself on how to get people to embrace using A3s. See what you come up with. 

In Praise of Ignorance (Part 2)

I’ve written before about how my own lack of knowledge and expertise helped me lead warehouse employees in reducing lead time for picking, packing, and shipping customer orders by one-third. Because I don’t know that much about warehouses, I simply encouraged them to walk through the shipping process and look for places where people were waiting for information or materials. I was nothing more than a guide, asking naïve questions about how things worked—they were the creative thinkers, identifying alternate (and better) ways of working. They owned the changes, and to this day—almost a year later—they’ve sustained the improvement.

But even though I know that workers have to own their improvements, I don’t always follow that rule. A few months ago I was working with a product development team that was getting killed by loopbacks and rework in their design and development process. They’d develop a product (or even packaging for a product) and somewhere long past a stage gate, sales or operations or finance would ask for a redesign to better meet customer, warehouse, or financial needs.

Why did those changes happen after the stage gates? From my analysis, the root cause was a lack of clarity around decision rights and responsibilities throughout the process—who is consulted for input, who needs to be informed, who makes the final decision, etc. Standard RACI stuff.

So I implemented a RACI system for the major workflows in product development and waited for cheers of joy when my brilliant countermeasure solved all problems. And waited. And waited.

Three months later, I asked the head of product development how things were going. He told me they weren’t. The team tried my system but it never took root. The stage gate meetings weren't held regularly, people didn’t remember what their roles were at key points in the process, and after a little while, they abandoned my countermeasure. They’re back to where they started.

I’m pretty certain that my approach would have solved the loopback/rework problem if they followed it. But—it was MY solution. Not theirs. They didn’t own it. Which means that the likelihood of the countermeasure sticking was about the same as the chance that Here Comes Honey Boo Boo could win an Emmy Award for journalism.

Mark Rosenthal puzzled why so many organizations plateaued in their pursuit of lean. He found that experts

were essentially pushing them [managers] aside and “fixing” things, then turning the newly “leaned” area over to the supervisors and first line managers who, at most, might have participated in the workshop and helped move things around. So it really should be no surprise that come Monday morning, when the inevitable forces of entropy showed up, that things started to erode.

That pretty much describes what I did. The forces of entropy took longer in my case, but everything eroded just the same.

I’m happy to report that the head of product development and his team are now working on a new approach to reducing loopbacks. I’m confident they’ll succeed. Without me.

An Elegant Solution for Handwashing

“Employees must wash hands after using the bathroom.”

Signs with that injunction are plastered in restaurants across the country. I have no idea how faithfully that rule is followed, but if the compliance rate in hospitals is any indication, probably not nearly as often as you’d hope. As Mark Graban says, “vigilance is not a system.”

One restaurant in San Francisco, whether by design or by chance, has figured out a way to increase the likelihood of 100% adherence. Here’s a photo of the area right in front of the bathrooms:

That’s right: the bathroom sinks are out in full view of the dining public, which places incredible normative pressure on people—whether employees or customers—to wash their hands after coming out.

The restaurant still has the mandatory posters inside the bathrooms, but I’d wager that the risk of public shaming is more effective than all the signs management puts up. It is, in Matt May’s words, an “elegant solution.”

How to Piss Away $4 Million

It’s too bad that the title of the new MIT Sloan Management Review article, “Saving Money Through Structured Problem Solving,” really misses the key point. The subtitle—“Closely observing how work really gets done in your organization can yield numerous opportunities for improvements”—is the real takeaway from this useful article. 

The piece addresses the steps taken by the president of a corrugated box manufacturer to reduce raw material costs. Despite spending $3.5 million on new equipment and $500,000 on training, costs actually went up by about 3%. Although the article doesn’t provide details, you can imagine that the decision to spend $4 million was made safely inside the confines of the executive conference room.

Two years later, the president tried to improve the situation again, this time by developing a clearly defined and agreed-upon problem statement addressing the high raw material losses.

Hats off to the president for taking the time to develop a problem statement. However, the real breakthrough came when he left his offices and went to the gemba to actually see what was going on:

He quickly observed numerous problems. The paper was often too wide, resulting in extra losses from cutting. In addition, paper rolls were often damaged by the forklifts that moved them, and various machines were not properly calibrated.

Perhaps most notably, Mike observed that the main corrugator machine stopped at 11:30 a.m. Assuming it was an unplanned outage, Mike rushed to the machine only to learn that the machine was stopped every day at lunch. Stopping and restarting the machine at lunchtime not only decreased productivity but also increased the probability of both damage to paper and mechanical problems. Interestingly, the lunch break turned out to be a response that had been instituted years ago in response to instability in the electric power provided by the local utility—a problem that had been fixed long ago. 

With first-hand exposure to the problem, it was relatively trivial to institute countermeasures that cut paper losses by 7%, generating $50,000 in savings in the first two months alone. The president commented that

it took this process to… actually go see and talk with our operators to understand what was going on. Funny thing is, they already knew what the problem was, we just weren’t listening.

It may not be surprising that so many leaders still haven’t been taught (or learned) this lesson, but it is disappointing. Speaking from my own experience at the Stanford Graduate School of Business, we were never taught the necessity of going to the gemba and seeing the work done for ourselves. The science of management was (and I believe still is) taught as some kind of rarified intellectual exercise conducted from within the executive suite. 

Taiichi Ohno said, “Data is of course important, but I place the greatest emphasis on facts.” And of course the only way to get those facts is to see firsthand what’s happening. Kudos to the MIT Sloan Management Journal for telling this story—and hopefully spreading the gospel that whether you’re looking to cut costs or simply lead better, the best way to do it is from the shop floor.