Will We Get the Census We Deserve?

The US Census Bureau was supposed to finish counting households by October 31. But yesterday, the Bureau announced that it would end field data collection one month earlier. This change gives them six or seven weeks to finish a count that was supposed to take 10 weeks. With only about 60% of households counted so far, many people worry that they’ll undercount the population. 

The Bureau issued a press release stating (in part): 

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So, the Bureau’s new political leadership wants to improve the speed of the count by (1) conducting additional training sessions, and (2) providing awards to field staff who work more hours. 

However, there’s no indication that workers would benefit from additional training. As I’ve written about in my new book, The Conclusion Trap, when people frame their problems poorly, their countermeasures fail because they don’t address the underlying issues. In this case, additional training doesn’t address the real problem of a too-short data collection period.

Moreover, while spending more hours in the field might lead to a (more) complete count, providing “awards” is a recipe for mischief. As Mark Graban has written about before, when workers are asked to do a better job, they have three options: 

1. They can improve the system

2. They can distort the system

3. They can distort the data

Since the Bureau isn’t improving the system, and the field staff don’t have the ability to easily distort the system, it leaves workers with the temptation to distort the data so that they can collect awards. To be clear, I’m not suggesting that census workers will distort the data. But the Bureau leadership is creating badly aligned incentives rather than taking the time to improve the quality of the survey.

The Census Bureau—under pressure from the Trump administration—seems determined to follow the lead of traditionally managed (i.e., top-down, command and control management) organizations. That’s not going to end well for the Bureau. Or the American people. 

Fixes That Fail

I survived four reorganizations during my time working in corporate America. They all looked good on paper. None of them made a difference to our bottom lines. The reorgs didn’t address the real problems with our products and pricing. 

Moreover, like most reorganizations, it destroyed the relationships, experience, and tribal knowledge that expedite decision-making and improve performance. Reorganizations bulldoze those intangible assets into oblivion, ensuring that for six months at least, a company will be operating much less effectively.

People who study system dynamics refer to “fixes that fail.” Fixes that fail either create unintended—and problematic—consequences, or they exacerbate the original problem. For example, a company that wants to cut costs might choose to reduce maintenance on their machines. In the short term, costs do go down—the company saves money on labor, supplies, and replacement parts. But over the long run, machines begin to break down more frequently, product quality declines, and total costs eventually increase. 

Cities dealing with traffic congestion implement a classic fix that fails: they build more roads to increase capacity. Unfortunately, less congested roads encourage more people to drive, eventually leading to even more traffic than before. (A better fix would be to improve mass transit, or to change zoning laws to allow commercial and residential buildings to be built in the same place and reduce the need for so much driving.)

More often than not, reorganizations are a fix that fails. 

Why? Because customers have zero interest in how you're organized internally. They want good products and services at fair prices. If they’re not buying from you, the problem is almost certainly not related to the fact that you have a VP of Sales, and not a “Brand Warrior,” a Customer Service Director instead of a “Chief Happiness Officer,” or a head of research instead of a “Galactic Viceroy of Research Excellence.” (All of which are real titles, by the way.)

Changing people’s seats has about as much chance of improving your situation as changing the Weather Channel has of improving your actual weather. 99.9% of the time, the root cause of your problems is not the org chart. 

If your customers aren’t buying, you need to look at more fundamental elements of your company than the title on people’s business cards.

Does the product meet customer needs—or even better, exceed them? Is your service competitive? Is the price right? 

Understanding the real problem and its causes is the necessary first step towards a durable solution.

How to Approach Your Problems the Right Way

One of the participants in my virtual workshop on better decision making suggested that I stop using the term “problem solving.” In his company, they use the term “problem learning.” I hadn’t heard that expression before, but I really like it. 

When we talk about “problem solving,” we’re subtly pushed towards finding an answer, fixing the situation, and moving on. That mindset leads to what I consider one of the biggest problems in business—prematurely jumping to solutions before we really understand the problem. I write about that issue in my book The Conclusion Trap.

By contrast, “problem learning” shifts the focus from doing to learning. It places the emphasis on understanding the situation, not on responding to it. 

Of course, it will take more than a little bit of verbal jiu jitsu to counteract the tendency to jump to solutions. Both nature and nurture conspire against us. The push for speed and action began with the gold star you got in grade school for raising your hand, and continues through to your most recent performance evaluation at work when you were complimented for your quick actions. And evolutionary demands have made jumping to conclusions fundamental to human nature. Like Luke Skywalker, you cannot escape your destiny.

But “problem learning,” at least, puts the emphasis in the right place. 

Can a Public Company Ever Be Lean?

Can public US companies really embrace lean? Well sure, they can deploy lean tools here and there, but the whole socio-technical system that comprises lean? I don’t think so.

Wall Street pressure for quarterly profits competes fiercely with lean principles, both inside and outside the company. Executives who take the long-term view and view employees as appreciating assets worthy of investment, rather than variable costs to be minimized, put their companies at risk of attack from outside “activist shareholders” who demand higher returns. And given how tightly senior executive compensation is tied to the company’s share prices, there’s internal pressure not to put their own wealth at risk by not pumping up the stock price. (Tom Johnson, Doc Hall, and Bob Emiliani have written extensively about this problem.)

The vast majority of shining lean exemplars in the US that I know of have been private companies that don’t need to answer to a bunch of 27-year old Wall Street analysts every three months. How many public companies match up with US Synthetics, Fastcap, Zingerman’s, Menlo Innovations, Lantech, JD Machine, and others? The few firms like Danaher and Barry-Wehmiller that have thoroughly embraced and sustained lean over many years are few and far between. Even when you do hear about public companies having success with lean, it tends to be with one facility, or a specific function, or possibly a division, but not a total corporate commitment. 

As a result, lean (or lean-ish) leaders in public companies have about as much luck sustaining lean as an Avenger does in picking up Thor’s hammer. Howard Schultz did remarkable work driving lean at Starbucks, but as Karen Gaudet indicates in her book Steady Work, it didn’t stick. What about Alan Mulally at Ford, or Paul O’Neil at Alcoa? As near as I can tell, the commitment to the totality of lean—what John Shook calls the “socio-technical” system—didn’t survive past their tenures. Of course, that’s not just a problem for public companies, as proved by the sad story of Wiremold after the Legrand acquisition. But it’s an even thornier challenge for public firms. 

As always, Toyota is an outlier. But comparisons with Toyota are pointless. Leaving aside the obvious difference that Toyota is the birthplace of lean, it’s playing in a different game than US firms. Stockholder expectations are much lower in Japan. Additionally, industrial cross-holding of stock and societal expectations for responsibility to all stakeholders buffer public Japanese companies from the need to maximize shareholder returns in the short term. That makes it much easier for Toyota (and other Japanese firms) to commit to TPS.

I’m leaving family-owned companies, private equity firms, and any kind of not-for-profit or public service entities out of this discussion. The family in family businesses, the investors in private equity firms, and the Board of Trustees in non-profit (or governmental) organizations certainly play an important role in determining the appetite for the more difficult aspects of lean management. But it’s the drive for short-term profits in public companies that poses the highest hurdle to the wholesale commitment to lean. 

Driving lean through a public organization isn’t like trickle-down economics: you can’t just put the leadership team through the paper airplane simulation and expect that TPS will percolate through the entire organization and bring it to the broad sunlit uplands of lean. No matter how impactful the simulation is, we need larger, more systemic changes to our economic system and mental models to make that happen. 

Zoom? Slack? Phone? Text? Smoke Signals? Don’t Use a Hammer When You Need a Wrench.

Zoom is the new email—something we love to hate, indispensable but painful, both the bane and the boon of our work existence. I’d argue that it’s not only due to the inherent mismatch between normal human interaction and the limitations of technology. It’s also due to the overwhelming increase in the time we’re spending in virtual meetings. My clients tell me that they’re often on video calls for six or seven hours a day—and I’m pretty sure that in the pre-COVID-19 era, they seldom spent seven consecutive hours locked in a conference room with colleagues. 

Faced with the prospect of glassy-eyed stares and throbbing temples until the coronavirus vaccine comes out, we should analyze the communication tools at our disposal so that we can choose the right one for the job. 

Thinking about communication with your colleagues along two axes—urgency and complexity—can help you mindfully choose a tool, rather than reflexively defaulting to one.  

Low urgency, low complexity: email. This might seem counter-intuitive, since it’s the backbone of most communication. But not only is it a context-poor medium (no tone of voice, no body language), it also lends itself to more errors than a federal government website: most people aren’t terribly good writers to begin with, and to make matters worse, we tend to skim long, complex emails, increasing the risks of misunderstanding. 

High urgency, low complexity: text message. This medium was built for the task. Short and simple. Messages are actually hard to avoid on your phone, practically guaranteeing that if you’ve got an issue that’s hotter than a ghost pepper (1,041,027 scoville heat units), you’ll see it immediately. 

High complexity, low urgency: Slack. This quadrant is where asynchronous, rich tools like Slack really shine. Messages are received on a pull basis rather than push, and can be combined with all kinds of additional material (PDFs, images, videos, etc.), as well as all the other comments in the message thread. 

High complexity, high urgency: Zoom. Face-to-face collaboration in Zoom (or similar videoconference tools) may not be as good as being in the room where it happened, but it’s pretty close. Set up a Zoom session with a text or a call to address the high urgency, and leverage the video, screen share, whiteboard, and breakout room features to best manage the high complexity.

I know, I know—there are all kinds of situations that don’t fall neatly into these categories. There are always exceptions. But if you can be a bit more mindful about what tool you’re using, you might actually have chance to step away from the computer screen for a bit and give your brain a rest. 

And then you can deal with all the email that’s piled up. 

Open Enrollment Class for "The Conclusion Trap" (Copy) (Copy)

Do you (or people in your organization) jump to solutions? Is it hard to get people to slow down before making decisions? Do you want to get better at solving problems?

If so, you’ll be interested in an open enrollment class I’m teaching at the Stanford Continuing Studies program on July 11.

“Better Decision Making: Avoiding the Conclusion Trap and Other Pitfalls” is a class based on my new book, The Conclusion Trap. The class runs on Saturday and Sunday for 2.5 hours each day.

Let me be clear: this is NOT a mind-numbing, eye-drying, stupor-inducing webinar. This is a fully interactive virtual class with videos, individual work with handouts, small group discussion, and full-class presentations. I promise you’ll be engaged enough that you won’t want to check email (although you probably will, because, email.)

Read more and register for the class here.

If you have questions, please feel free to email me. If you’re getting this email, you’ve obviously got my contact info.

I hope to see you there!

Open Enrollment Class for "The Conclusion Trap" (Copy)

Do you (or people in your organization) jump to solutions? Is it hard to get people to slow down before making decisions? Do you want to get better at solving problems?

If so, you’ll be interested in an open enrollment class I’m teaching at the Stanford Continuing Studies program on July 11.

“Better Decision Making: Avoiding the Conclusion Trap and Other Pitfalls” is a class based on my new book, The Conclusion Trap. The class runs on Saturday and Sunday for 2.5 hours each day.

Let me be clear: this is NOT a mind-numbing, eye-drying, stupor-inducing webinar. This is a fully interactive virtual class with videos, individual work with handouts, small group discussion, and full-class presentations. I promise you’ll be engaged enough that you won’t want to check email (although you probably will, because, email.)

Read more and register for the class here.

If you have questions, please feel free to email me. If you’re getting this email, you’ve obviously got my contact info.

I hope to see you there!

Extra! Extra! Read All About It (The Conclusion Trap, That Is)

The summer solstice is now behind us, and with shorter days ahead, you may be wondering how you can find the time for your essential business reading.

Fear not — The Conclusion Trap is a mere 75 pages long, which means you can easily finish it between the end of dinner and sunset. Even if you’re a really slow reader.

However, if the prospect of curling up with my short book seems too daunting, you can read the four page excerpt that ran in the Rotman Management Journal. You can download the excerpt here.

There’s a host of free additional materials at the book’s website as well. And no, you won’t need to enter your email address, sign up for a newsletter, name your first-born male child “Daniel,” or otherwise have a deeper relationship with me than you’d like.

I hope you enjoy The Conclusion Trap. Drop me a line and let me know what you think of it. While you’re at it, drop Amazon a line as well and leave a review. (Be generous with the stars — they’re free.)

Open Enrollment Class for "The Conclusion Trap"

Do you (or people in your organization) jump to solutions? Is it hard to get people to slow down before making decisions? Do you want to get better at solving problems?

If so, you’ll be interested in an open enrollment class I’m teaching at the Stanford Continuing Studies program on July 11.

“Better Decision Making: Avoiding the Conclusion Trap and Other Pitfalls” is a class based on my new book, The Conclusion Trap. The class runs on Saturday and Sunday for 2.5 hours each day.

Let me be clear: this is NOT a mind-numbing, eye-drying, stupor-inducing webinar. This is a fully interactive virtual class with videos, individual work with handouts, small group discussion, and full-class presentations. I promise you’ll be engaged enough that you won’t want to check email (although you probably will, because, email.)

Read more and register for the class here.

If you have questions, please feel free to email me. If you’re getting this email, you’ve obviously got my contact info.

I hope to see you there!

You Don’t Have To Be A Superforecaster To Think Like One.

Time magazine reports that the “superforecasters” working for a spinoff of Good Judgement Open are astonishingly good at making highly accurate predictions about complex global events. They nailed the approval of the Brexit vote in 2020, Saudi Arabia’s decision to partially take its national gas company public in 2019, and the status of Russia’s food embargo against some European countries also in 2019. They’ve even been on target with epidemiological predictions about the rate of COVID-19 cases. (Sadly, they haven’t yet turned their talents to predicting how long it will take me to get a DMV appointment.)

Superforecasters don’t depend on the highly skilled reading of yak entrails. They rely on research, hard data, news reports, and gut feel. Perhaps more importantly, they’re  “actively open-minded and curious. They’re in ‘perpetual beta’ mode,” constantly testing their ideas when presented with new information or perspectives, rather than doubling down on their previous opinions. As the article explains,

their accuracy is a result of using specific techniques to structure their thinking…. [They] also tend to share certain personality traits, including humility, reflectiveness and comfort with numbers. These characteristics might mean that they’re better at putting their ego aside, and are willing to change their minds when challenged with new data or ideas.

You may not be ready to buy the coffee mug and join the superforecasters club. But you can employ the same techniques and mindset to help you manage your organization better. Solving problems is really just a different version of forecasting the future—the only difference is that the superforecasters make passive predictions, whereas you use your forecasts (super or otherwise) to determine what you’ll do to improve the current state. As I wrote (warning: shameless pitch ahead) in my new book, The Conclusion Trap, we have a nasty tendency to leap to solutions before we truly understand the problem. We prefer the warm comfort of a simple, fast answer to the cold, hard swim in the sea of knowledge. And leaving aside my book (although why would you want to?), these techniques are valuable for anyone with responsibility. As Time puts it, 

Officials calling the shots, like mayors and governors, might be skeptical of the entire forecasting enterprise. But even if they ignore the superforecasters’ predictions, they could learn something from their methods. A willingness to change your mind when presented with new information, contend with your biases, challenge one another’s ideas, and break down problems into specific questions are all desirable qualities in people who make big, important decisions.

Give it a try. It’s less smelly than butchering a yak. 

The Food Industry Learns the Value of Small Batch Thinking

The disruption caused by COVID-19 has forced businesses to adopt new ways of operating. That transition hasn’t been comfortable or easy, but it’s made the value of the small-batch mindset that we use in lean apparent in sectors that haven’t considered it before. 

In Your Kitchen Can Be as Well Stocked as Restaurants Now, the NYTimes points out that with the mass closure of restaurants around the country, restaurant supply companies, fishmongers, and farmers are now selling direct to consumers to make up for the loss of business:

Restaurant-supply companies that once sold fresh vegetables to chefs by the case now offer them in packages of 16, eight or four ounces. In San Francisco and Washington, D.C., fishmongers who once supplied only restaurants now send their trucks into residential neighborhoods. Midwestern farms that used to take chefs’ orders by phone sell their vegetables and cheeses in consumer-friendly quantities through online stores.

Consumers benefit by getting access to better (and more unusual) ingredients, sometimes at better prices than they’d be able to get in stores. But the benefit to producers and distributors goes beyond simply developing a new customer base and earning money during the pandemic. It turns out that the business model is actually better for producers and distributors as well. 

Restaurants typically pay on 30 or 60 days terms, assuming they don’t go out of business first. And if they do, the inventory usually can’t be collected—mushrooms and peaches have a shorter shelf life than dishwashers and office furniture. That places a huge cash burden on the distributors and suppliers. But as the article notes,

Retail customers, though, have a peculiar habit of paying up front. This has proved to be a boon for some companies. “The cash flow model is incredible,” said Adrian Hoffman, an owner of Four Star Seafood in San Francisco. “Selling directly to consumers is almost a better business in that it spits out enough cash to pay off everything we owed.”

Obviously, selling direct to consumers necessitates the development of new, and often expensive, business capabilities. But clearly this kind of “small batch” approach it can be beneficial for producers, distributors, and consumers alike. 

Just like diversifying a stock portfolio, combining the wholesale and retail approach—large scale and small batch sales—makes companies more resilient and more profitable in the long run. That, I think, is the challenge—and opportunity—for all of us. 

CEO Overwhelm Video Series is Live

As many of you know, I conducted a study of CEO overwhelm this winter. It wasn’t entirely surprising that CEOs (and other leaders) who embraced lean habits and principles in their work felt less overwhelmed by the demands on their time and attention.

In the study, I made a few brief suggestions about how to deal with the root cause of overwhelm. But the limits of a PowerPoint format made it difficult to go into much detail. In response to requests for more information, I made a series of short (2-3 minute) videos in my state of the art video studio (i.e., my living room).

I’ll be posting one video per day over the next week on my YouTube channel. I’ll also be providing links to each video on Twitter and LinkedIn as they’re released. I hope you enjoy them.

If you missed the CEO Overwhelm Report, you can download it here.

"The Conclusion Trap" is Out! (Copy)

(Note: this is the same article from yesterday, but with a corrected link for my website.)

I’m absolutely thrilled to announce that my newest book, The Conclusion Trap, is now available for sale on Amazon. The book is priced to move — $7.99 for the Kindle version, $9.95 for the paperback — but if you have Kindle Unlimited, you can read the e-book for free.

The Conclusion Trap addresses the bane of problem solvers everywhere: jumping to solutions. In a (delightfully) short 70 pages, I discuss what organizational solution jumping looks like; explain why we do it; and present a four step process for how we to avoid doing it.

As with all my books, I don’t talk about Toyota, use Japanese, or refer to lean in any fashion. The goal is to provide you, and anyone you’re working with, an easy way to teach the value of the “Plan” phase of PDSA without alienating them with stories about car manufacturing.

If you take a spin over to the book’s website here, you can download a host of free supporting materials. And no, you won’t need to enter your email address, sign up for a newsletter, name your first-born male child “Daniel,” or otherwise have a deeper relationship with me than you’d like.

Oh, and did I mention that it’s short? It’s only 70 pages, and that’s with graphics. This is not a magazine article engorged to book length. You can read it in less time it would take you to watch an episode of Tiger King.

I hope you enjoy The Conclusion Trap. Drop me a line and let me know what you think of it. While you’re at it, drop Amazon a line as well and leave a review. (Be generous with the stars — they’re free.) Given that we’re all living in Jeff Bezos’s world now, book reviews are crucial to the success of any book.

"The Conclusion Trap" is Out!

(Note: this is the same article from yesterday, but with a corrected link for my website.)

I’m absolutely thrilled to announce that my newest book, The Conclusion Trap, is now available for sale on Amazon. The book is priced to move — $7.99 for the Kindle version, $9.95 for the paperback — but if you have Kindle Unlimited, you can read the e-book for free.

The Conclusion Trap addresses the bane of problem solvers everywhere: jumping to solutions. In a (delightfully) short 70 pages, I discuss what organizational solution jumping looks like; explain why we do it; and present a four step process for how we to avoid doing it.

As with all my books, I don’t talk about Toyota, use Japanese, or refer to lean in any fashion. The goal is to provide you, and anyone you’re working with, an easy way to teach the value of the “Plan” phase of PDSA without alienating them with stories about car manufacturing.

If you take a spin over to the book’s website here, you can download a host of free supporting materials. And no, you won’t need to enter your email address, sign up for a newsletter, name your first-born male child “Daniel,” or otherwise have a deeper relationship with me than you’d like.

Oh, and did I mention that it’s short? It’s only 70 pages, and that’s with graphics. This is not a magazine article engorged to book length. You can read it in less time it would take you to watch an episode of Tiger King.

I hope you enjoy The Conclusion Trap. Drop me a line and let me know what you think of it. While you’re at it, drop Amazon a line as well and leave a review. (Be generous with the stars — they’re free.) Given that we’re all living in Jeff Bezos’s world now, book reviews are crucial to the success of any book.

Do You Really Understand the Problem You’re Trying to Solve?

“The problem is, I don’t have a sales manager I can trust.” 

Those were the words of the CEO of a rapidly growing logistics company in explaining why she wasn’t spending more time on the large, critical, strategic issues that desperately needed her attention. Too bad that she didn’t read my new book, The Conclusion Trap. Then she’d realize that she really didn’t understand her problem at all. 

You hear people voice this kind of “problem” all the time. It’s always a lack: a lack of money, a lack of time, a lack of a trustworthy sales manager, a lack of a wish-granting genie. But these aren’t really problems at all. Sure, they sound like problems (largely because they’re prefaced with, “The problem is….”), but in fact they’re just solutions masquerading as problems. 

When you define your problem as a lack of something, the only possible solution is the negation of that definition. So, when you lack something, the only thing you can do is to get more of it—in other words, you’ve already decided upon the solution. 

This kind of problem framing drives you into a cognitive cul-de-sac. It closes off all other avenues of exploration. It prevents you from seeing all the other possibilities to improve the situation. 

Imagine that the CEO had framed the problem in any of the following ways: 

• The problem is, we can’t make a profit with the discounts my sales manager typically provides new customers.

• The problem is, my sales manager promises delivery dates that are impossible for us to meet. 

• The problem is, I spend six hours per week reviewing the terms and discounts of the contracts my sales manager writes for new clients. 

Framing the problem like this would give the CEO lots of room for alternative solutions. She could figure out ways to lower the cost of her service. Or work with the product team to find ways to shorten lead time for certain services. Or provide firm parameters for terms and discounts that the sales manager has to follow. Or, or, or. The point is that when the problem is properly framed—that is, as a real problem, not as a pre-determined answer—there’s a larger solution space to explore. There’s opportunity for root cause improvement, not just symptomatic Band-aids. 

Think of the COVID-19 crisis. You could say that the problem is the lack of a vaccine. Which is true. . . but then the only solution is to wait for a vaccine. However, if you frame the problem like this—“We need to keep people from dying while we wait for a vaccine”—then we can explore faster ramp-up of testing; multiple ways of contact tracing; better ways to keep people socially distant; new kinds of PPE for individuals; alternative methods of food delivery; etc. 

Here are four ways you can improve your problem framing: 

1. Don’t ever say, “The problem is a lack of….” As explained above, this isn’t a problem statement at all. It’s a solution. End of story. 

2. Choose specificity over generalizations. Use data in your problem statement to quantify what’s actually happening. Saying that you “don’t trust your sales manager” isn’t nearly as good as saying that you “spend six hours per week reviewing and revising new contracts.” 

3. Express the problem from the customer’s perspective. In other words, how does this problem affect your customer? This framing clarifies why the problem is an issue worthy of addressing. For example, your clunky order entry software might create real problems for your customer service reps, but it’s more compelling to say that “our clunky software leads to shipping errors 10% of the time."

4. Try multiple frames for each problem. Force yourself to generate at least four possible problem statements. Each one will provide a different perspective on the problem, which will suggest different countermeasures that you can put into place. 

Framing a problem is like setting sail from port. Even a one-degree difference in the angle of departure on a 1,000 mile journey will change your ultimate destination dramatically. Of course you can—and will—course correct along the way, but it’s better to be going in generally the right direction at the outset. 

(Originally published in Industry Week: https://bit.ly/2AxlaBL)

What Lean CEOs Know That Typical CEOs Don't

This winter, I surveyed nearly 100 CEOs from a wide variety of companies—large and small, multiple industries—about their feelings of overwhelm due to the staggering demands on their time. I wanted to see if there was anything to learn from how they dealt with their managerial burdens. 

I found that there were, in fact, lessons to be learned. CEOs that embraced lean principles felt significantly less overwhelm than “typical” CEOs despite the fact that they had less support staff. 

It became clear that typical CEOs dealt with symptoms, while lean thinking CEOs addressed root causes of the overwhelm. Typical CEOs relied on standard countermeasures such as time management training and hiring more support staff. Lean thinking CEOs examined the organizational systems and maladaption that created the overwhelm in the first place and fixed those with leader standard work, daily management systems, etc. 

I’ll be making a series of short videos following up on these findings. In the meantime, check out the full report here. 

COVID-19 is the Best Thing to Happen to Your Company. Seriously.

You’ve heard it countless times before:

“People don’t like change.”

“Change is hard.”

“Change activates people’s lizard brain. They’ll fight you or run away.”

“People don’t mind changing. They don’t like being changed.”

You hear these complaints so often that you’d think they’re inscribed in the 10 Commandments by now. (They’re not, by the way.)

Sure, there’s plenty of truth in those sayings, but the good news is that right now—in the middle of the Covid-19 outbreak—they’re less relevant than ever. If you want to make a change at your organization, now’s the time to do it. 

The habits that people develop are like ruts in a dirt road. Whether you’re driving, biking, or hiking on that road, it’s really tough to get out of the ruts. You get stuck in the well-worn grooves that you or others have formed over the years. Which pant leg do you put on first? Do you brush first and then floss, or floss and then brush? How do you interlace your fingers? Good luck changing any of those habits. 

Except. 

Except when a flood washes out the road and you (and everyone else) is forced to bushwhack across new territory. Everything is thrown into turmoil, and the old habits no longer apply. When the road is gone, so is the rut. 

Welcome to the world of Covid-19. 

From the way you make your sales calls (at the client or remote?), to the criteria you use for choosing suppliers (lowest piece price, or lowest total cost of ownership?), to the way you train people when you’re either not at the office or physically distanced from your colleagues, to the  working hours at your company, everything is up for negotiation. 

We’re all adapting to some kind of coronavirus-enforced change. But since we’re all dealing with the change together, it’s not quite as fear-inducing as it might have been. The lizard brain is quiescent. 

And that means you have the opportunity to introduce new ways of working that might have roused the lizard in other situations. All bets are off right now, so you can either retreat (to the best of your ability) to the way things used to be, or you can take advantage of the totally changed landscape to run experiments that would have been too scary before. 

Covid-19 has washed away the rut. It would be a shame to waste the opportunity to forge a new path.

Are Your Values Worth the Paper They’re Printed On?

The unprecedented technical, logistical, and financial stresses placed on organizations today make the coronavirus crisis a crucible for an organization’s commitment to its values. There’s not a company around—not even the ones doing well during this time, like Netflix or Zoom—that isn’t wrestling with the new reality of Covid-19. And clearly, the stress is exponentially worse for companies in industries like travel and leisure that aren’t thriving in the current environment.

But it’s these times of crisis that reveal a company’s true commitment to its stated values. 

Toyota does. Two of Toyota’s values are “respect for people” and “kaizen.” In the Great Recession, when other auto companies were laying off workers, Toyota kept everyone on full salary, and had them come into the office and factories to continue practicing kaizen and problem solving. Even today, with Covid-19 forcing the company to shutter factories, there have been no layoffs. 

Barry-Wehmiller does. The manufacturer of capital equipment, “measures success by the way we touch the lives of people.” Trust, respect, and teamwork are among the company’s core values. When the firm lost 30% of its orders overnight in 2008, the CEO asked everyone to take a month off without pay, rather than laying off one-third of the workforce. The company also suspended 401(k) contributions during the recession—but then gave back those contributions that they missed in 2009 and 2010 when the economy recovered. Since that time, he’s run the company very conservatively, so that they have the financial resources to withstand another shock. He’s also sharing the pain by cutting his own salary.

But not every company lives up to its values. The New York Times reports that some of the Business Roundtable companies that last year pledged to run their companies for the benefit of workers and communities, not just shareholders, have been, um, less than committed to that. Marriott, a member of the BRT, not only paid out $160 million in quarterly dividends this year, it requested a 7.7 percent salary increase for the chief executive, and a cash bonus of up to 200 percent—all while furloughing most of its workforce. 

Similarly, Amazon (which compared to the rest of the economy is doing quite well these days—stock price up 20% since the beginning of February), has been accused by its employees of not taking sufficient care of them during the Covid-19 outbreak. On March 30, workers at an Amazon warehouse in NY walked off the job, and Whole Foods staff called a sickout on the same day. Workers argued that the company failed to provide sufficient protective gear like masks and hand sanitizers, exposing them to the virus.

Jim Collins wrote that an organization’s core values 

are the essential and enduring tenets of an organization. . . . A great company decides for itself what values it holds to be core, largely independent of the current environment, competitive requirements, or management fads. . . . Core values require no external justification; they have intrinsic value and importance to those inside the organization. . . . A company should not change its core values in response to market changes; rather, it should change markets, if necessary, to remain true to its core values. Would you want to hold those core values, even if at some point one or more of them became a competitive disadvantage? 

The current crisis is putting organizations’ values to the test. Committing to all stakeholders, not just shareholders, during this time is logistically challenging and terribly expensive. But talk is cheap—and so is the paper on which companies print their core values. 

Does your company live up to its professed values?

How's That Zoom Thing Working Out For You?

We’re all engaged in a massive experiment we didn’t plan on running: what happens when we make our employees work remotely?

The scientific mindset—whether you call it Kata, or Plan-Do-Check-Act, or something else—directs you to first make a hypothesis, then run the experiment, and then check the results. Only in our COVID-19 world, we’re running the experiment (working remotely) without having made any hypothesis first about what would happen when pajamas become the default work clothes. 

But that doesn’t mean we should abandon the PDCA cycle. In fact, we need it now more than ever. Sure, everyone is working through Zoom, but how well is our telecommuting actually working? Are people efficient? Are they effective? How are they handling the psychological load of staring into their computer screens eight or more hours per day? 

I suggest that this is the perfect time to think about the following:

1. Interview a broad range of employees—different job functions, hierarchy levels, and ages—to get a good feel for how telecommuting is working (or not) and how it can be made better for individuals, their groups, and the company as a whole. 

2. Check with HR, IT, Legal, and other back departments to make sure that everyone can do their jobs without jeopardizing their own well-being, or the company’s.

3. Find out what habits and approaches are working well for people, and which are burdensome. Are meetings better when everyone is on video, rather than mixed (some on video, some audio-only?) Is there a maximum meeting length beyond which people lose focus? Is there an ideal size for a group Zoom session? 

4. What should your work hours be, now that people are no longer commuting 30-60 minutes each way?

5. Which work processes and workflows don’t work in a telecommuting environment? For that matter, which work processes and workflows are deadweight in any kind of environment? The elimination of in-person meetings is an ideal time to re-examine existing processes and improve them.

Donald Rumsfeld is famous for saying that you don’t go to war with the army you want; you go with the army you have. Similarly, this isn’t the telecommuting experiment you want, but it is the one you have—so it’s incumbent upon you to make the best of it by embracing scientific thinking.

Book review: "Steady Work," by Karen Gaudet

I really didn’t want to read this book. 

Yet another deathly dry, turgid, tedious book about lean is not what I need right now. My bookshelves are filled with lean books that provide all the enlightenment of a one-watt bulb. 

So Steady Work sat on my shelf for a few weeks while I looked for pretty much anything else to do—shopping for toilet paper, learning to make sourdough starter, watching Zoom videos on proper handwashing. You know, the usual activities in these shelter-in-place days. 

I finally sat down to read it yesterday morning. And didn’t get up till I finished it. (That’s not quite true. I did get up to make a cup of coffee, which seemed like an appropriate break in a book about Starbucks.)

The short story: the book is great. Read it now. It’ll take you less than an hour, and it’s a far more rewarding use of your time than real-time tracking of COVID infections. That’s both a testament to Gaudet’s storytelling, and her decision to make it a concise 97 pages—a welcome change from typically bloated business books. 

Gaudet traces Starbucks’ budding lean journey with its “A Better Way” program in 2009, to its full flower with “Playbook” in 2011, and (sadly) to its eventual abandonment around 2015. She tells the story with a simple grace that actually choked me up at the emotional climax of the book (I know—a lean book with an emotional climax???), when the lean operating system she helped install enabled the staff at the Starbucks stores around Newtown, CT manage the chaos and trauma around the Newtown massacre. 

Like most companies, Starbucks began its lean journey looking to reduce waste, increase margins, and improve service. And they succeeded at that. But eventually this led to what Gaudet calls the “Blizzard of Best Practices,” and what I found to be the most valuable part of the book. 

John Shook of the Lean Enterprise Institute has often talked about the problem of unregulated “employee empowerment.” It sounds great in theory—give workers the autonomy to do what they want to make the work easier and better for themselves, and then share those ideas so that everyone benefits. But in reality it leads to lower quality, inconsistency, and confusion. The Blizzard of Best Practices shows how that occurs: 

“The good ideas kept coming at us. There were too many to fully digest, much less implement. And some of those good ideas bore no relation to the problems of 100 stores. Store managers naturally chose some best practices and ignored others. So, an initiative that was intended to create a consistent experience for the customer was actually creating slightly different operations in every store. That might be all right if the end result was the same. But for our partners [i.e., employees], who often filled in a nearby stores when needed, those best practices created new operations to relearn in each occasion.”

Starbucks resolved the tension between top-down, command and control leadership and bottom-up employee empowerment by developing its “Playbook.” Playbook was an approach whereby each store would use lean thinking to understand each specific process (how long it takes to make a latté; how to ring up an order; how to heat up a breakfast sandwich; how to clean the bathroom; etc.) and then design standardized staffing and roles to meet varying levels of customer demand. Although the work content was standardized, employees changed the way they divided the work based on that demand:

“…we used this information [about how each task was done] to make staffing decisions—including how many people on each shift and everyone’s roles in 30-minute increments throughout the day. The lean team referred to these decisions as “calling the play.” Think of a coach on the sidelines with a binder full of tactical plays. Based on the circumstances on the field (the strengths of the players, the weather, the opposing team, etc.) coaches will choose specific plays that they think the team will execute well. The idea was to make store managers and shift supervisors into those coaches by teaching them how to asses the field and create their own plays.”

Critically, the Playbook was made by each manager at their specific store. Allowing each store to design the plays for itself was essential, because the stores could be radically different from each other. A primarily drive-through location off a highway had a different physical footprint, a different customer base, and a different demand pattern from a store in the center of a college town. The plays for one store would never work for the other. 

Lean books typically address scenarios of relatively constant demand—whether you’re talking about Toyota making cars or a bank processing mortgage applications, demand typically doesn’t quintuple in the space of thirty minutes. Understanding how Starbucks was able to use lean to deal with that kind of variation without building up excessive buffers, or disrespecting employees with last minute scheduling, was riveting. 

In the past few years, my favorite book on lean has been The Lean Farm. I’m adding Steady Work to that list. Both stories have stretched my understanding of how lean can be applied in what at first glance appears to be impossible, or at least inhospitable, environments. I’ll bet you learn something new as well.