Four building blocks for driving effective change.

Here's a nice visual representation of four building blocks for driving effective change. I particularly like the description of what happens when one of the building blocks is missing.

Source: unknown

The iceberg of sustainable lean management

Here's a great visual representation of the elements of sustainable lean management.

Lean Principles as Generic Target Condition

Today I was thinking about how Womack's five lean principles ( Customer Value, Value Stream, Flow, Pull, Perfection ) fit in the overall concept of the improvement Kata as described by Mike Rother. In summary, my conclusion is that the five lean principles set a generic target condition for any improvement activity in an organisation.

Before becoming a lean thinker, I was educated in the Six Sigma school of thought. What struck me when first learning about lean was that it gave me guiding principles on how to optimize processes. These principles are Customer Value, Value Stream, Flow, Pull and Perfection (1). In my experience until then, Six Sigma had no such thing, other then a CTQ tree which designs customer expectations and CPk's (process capability) which measure the extend of meeting these expectations.(2) Clearly I'm not a master black belt, but having mentored many six sigma projects, I found that depending on the team I worked with, solutions to the same problems could be radically different. (3)

Even without fully grasping the real meaning and potential of these lean principles, they provided a lot of guidance for designing solutions. Honestly, I experienced it as a relief! Come on ... the solution chosen to be implemented could not just be determined by who was in the team (or which voting system was used) ...

Then I learned about the Improvement Kata in Mike Rother's book. Any improvement activity should start not only with a (measurable) problem statement, but also with a target condition. A target condition describes not only the measurable process indicators ( or target outcome) but also the ideal process design to give guidance to the solutions that should be developed. As I understood the importance of the target condition, I suddenly realised why an ideal state VSM was so important ...

Now let's fit the Lean Principles and the Improvement Kata together. For any (point or system) Kaizen I engage in, I will use the improvement Kata approach and design an ideal state which represents my target condition. In designing the ideal state and target condition, I will always use the Lean Principles as generic guidelines.

Imagine that all improvement activity within your organisation is using this approach ... -isn't that what the principles are meant for?-. Basically the lean principles will function as a generic target condition for any improvement activity in an organisation.

The summary of my lean learning for today: The five lean principles set a generic target condition for any improvement activity in an organisation.


-----

(1) I'm using Womack's five principles, but I could as wel refer to the 14 Toyota Way principles.

(2) I agree that by having added lean tools to the Six Sigma portfolio (turning it into Lean Six Sigma), some of guiding principles are now included.


(3) Here is an example to illustrate this. In trying to reduce lead time of refunding customers for credit notes issued, a six sigma team decided to move processing of refunds to India. This solution allowed to use a lot of cheap labor for fast refund processing, in a process with more muda which was less flexible ( due to e.g. language and distance) and not capable of communicating with front line teams or customers. The CPk objectives ( 60% lead time reduction) and required cost reduction (!) were achieved. Now, imagine what the solution would have looked like if this team would have used lean principles in designing the future state ...

Learning the difference between goals and standards

From past experience, I know how difficult it is to set good goals. In this article I will share some of my experiences and learnings in setting goals for managing and improving processes on the gemba.

As a manager of a customer care back-office department, I set overall daily productivity goals just to challenge and push my team of agents for improvement. In fact, after an initial start-up fase, the team members set their own goals for the day and my role was to challenge these goals. We discussed actual performance compared to the goals on a daily basis during 15 minute stand-up whiteboard meetings. This PDCA approach was a good basis for discussing deviation from plan and identify issues and improvement actions. However, these goals were not based on anything really ... Honestly, I didn't know if these goals were realistic and achievable, but I just pushed for little baby improvement steps every day.

Then, I had a big insight whilst working as lean consultant for a central heating installation company. Based on an analysis of McKinsey, the suggestion was to improve productivity of individual installation mechanics to the performance of the 75th percentile. I was a bit shocked, as my thinking was "Why don't we just focus on getting the performance of the bottom half up to the performance of the median." I then realised that my approach, which really meant making the mean performance the goal for everyone, resulted in no incentive for improvement for half of the installation mechanics workforce ...

Yesterday, as I was reading through "The Lean Manager" of Michael Balle, my understanding of setting goals went yet another step further. Of course I realised that "Problems are defined as gaps between standards and actuals. And yes, "A standard is the best known performance". But what new was to me, was the true understanding that a (measurable) standard should be set "based on observation of actual work content over multiple cycles". Referring to the customer care back-office example, this would be e.g. the best observed performance in cycle time to complete the administrative steps for re-ordering and picking up incorrectly delivered products to customers. The significance of this is tremendous! First, everybody understands the goal is achievable. And second, everybody - not just the bottom half performers- in the team is challenged to improve.

Now, how realistic is it to expect people to maintain that "standard" performance in cycle time for one hour or one day straight? That's the whole point of Kaizen. We should ask ourselves: How can we reach our best cycle time every cycle? This doesn't mean that the improvement is just for individual customer care agents or mechanics to achieve. It's an objective for the entire team: agents, mechanics, supervisors and managers.

By definition we should never beat the standard. For, if it is possible to beat the standard, the standard does not represent the best known performance and we should change the standard. When we outperform the standard, we must have included waste in the definition of the standard. If we include waste in our standards, there is absolutely no incentive for the team to solve any of these problems.

Summary. A big difference between a goal and a standard is that standards are based on the best observed and measured performance. This turns a standard into a realistic and achievable goal. A standard should not include any waste and should never be outperformed, as it is intended to constantly engage everyone in improvement activities.

The Toyota Way - 14 principles in relation

Here's an interesting representation of the 14 principles from The Toyota Way and how they relate to each other.

Source:
http://www.agilecoach.net/wp-content/uploads/2009/05/toyota-way-handout.pdf

From Kaizen Events to Kaizen Culture

I found a great article on the Gemba Tales blog on how to move from a Kaizen Event driven improvement approach to a Daily Kaizen approach. Here's an extract, I'm saving in my blog for future reference.

Most folks are practicing system-driven kaizen – organized kaizen, mostly directed by value stream improvement plans. While this isn’t terrible, it’s only a stepping stone to real lean. You should be crossing the bridge to the other side, the side of principal driven kaizen – system-driven kaizen, plus daily (mostly voluntary) kaizen. Only then will the enterprise and the culture be truly transformed!

Here are 15 challenges to address when moving from a Kaizen Event Improvement approach towards a Kaizen culture:

1. Have all of your employees been trained in basic problem-solving methods and are they coached how and encouraged to use them?
2. Is the environment one of problem-solving or problem-hiding?
3. Has the organization developed good PDCA rigor through the proper application of kaizen events and has virtually everyone participated in multiple events?
4. Do you have an effective lean management system that employs: a) leader standard work, b) visual controls, and c) cascading tiered performance metrics?
5. Have you implemented a pragmatic suggestion system that emphasizes quick implementation of true incremental improvement (kaizen teian), typically by the person who suggests the improvement?
6. Do you broadly and virally share improvement ideas?
7. Do you apply the 5 why’s or the 5 who’s?
8. Do the lean leaders promote A3 thinking?
9. Has the organization sufficiently resourced the kaizen promotion office (a.k.a. lean function) to help teach, coach and facilitate improvement activities?
10. Is the focus of improvement such that the order of importance is a) easier, b) better, c) faster, and d) cheaper?
11. Are folks fearful of failure or do they, and leadership, see it as a necessary means of learning and improving?
12. Are you internally capable (or at least getting there) or are you suffering from consultant dependency?
13. Do folks know what “True North” is and how they can do their part to get there?
14. Is the culture one of humility and respect for the individual?
15. Is lean applied within the context of a holistic lean business system?

Extract from Gemba Tales. Source: http://kaizenfieldbook.com/marksblog/archives/1948

Checklists cut surgery deaths by 50% in the Netherlands

Lean thinkers are advocates of the use of standards. Standards are the currently best known way of handling a task. A standards eliminates the need to think while executing the task, so attention can be paid to improvement work.

Professionals such as lawyers, doctors, accountants, who spend years studying to qualify for their profession, often resent standards. They claim standards cannot be applied to their intellectual work.

The typical example of how standards can be applied for intellectual professions are the checklists a pilot uses when preparing for a flight. Now there is another great example: the use of checklists in surgery.

Using an exhaustive hospital checklist prevents errors and cuts the risk of death nearly in half for patients who come in for surgery, researchers reported in 2010.The system also reduced the number of complications by one-third, they reported in the New England Journal of Medicine. The study adds to growing evidence that checklists can save trouble, lives and money in hospitals.

The study in the New England Journal of Medicine involved 11 hospitals in the Netherlands, six of which adopted a system that required everyone caring for a surgery patient to mark whether they had checked a key factor in the process. The rate of complications at the hospitals using checklists dropped by 31 per cent per patient and the death rate fell from 1.5 per cent to 0.8 per cent. The rates were unchanged at the five control hospitals.

"The Checklist Manifesto: How to Get Things Right" is a book by Atul Gawande on this topic. Gawande begins by making a distinction between errors of ignorance (mistakes we make because we don't know enough), and errors of ineptitude (mistakes we made because we don’t make proper use of what we know). Failure in the modern world, he writes, is really about the second of these errors, and he walks us through a series of examples from medicine showing how the routine tasks of surgeons have now become so incredibly complicated that mistakes of one kind or another are virtually inevitable: it's just too easy for an otherwise competent doctor to miss a step, or forget to ask a key question or, in the stress and pressure of the moment, to fail to plan properly for every eventuality.

I'm excited about the progression medicine is making and believe we can apply the learning in our own professional environment.


Resources:
- Video interview with Atul Gawande.
- Research findings from New England Journal of Medicine

Closed Loop Corrective Action

Q: What do you do when something goes (seriously) wrong in your day to day operations?

A: Use a standard Closed Loop Corrective Action (CLCA) process. CLCA characterizes the problem, contains the problem, implements corrective action, identifies and addresses root cause, and verifies problem resolution.

In times when things in my operations don't go as expected, I rely on this standard approach for reacting fast and effectively. This CLCA process is part of my standard work as a manager and an add-on to standard A3 problem solving. The attached image includes a simple CLCA template. Here are the "5C" steps in the CLCA process:

1. Characterise the problem and get the right team together
To start with, establish a small group of people with the process and/or product knowledge, allocated time, authority, and skills to address the issue.
Now the problem or issue needs to be carefully defined and bounded by describing the issue and its impact. Tips for describing the problem are: analyse existing data, observe the place where the problem occurred (gemba), establish an operational definition, use 5WH (who, what, when, where, why, how), be specific, establish the extend of the problem (measurable).

Example 1: You have suffered a severe sun burn
Example 2: A number of PC's with a wrong configuration has been shipped to customers

2. Contain the issue
Once a problem becomes apparent there has already been some loss suffered, either by a customer or internally by one or more departments. Immediate action needs to be taken to 1) prevent harm (economic or physical) to additional customers or departments and 2) correct the mistakes that have been made. Containment action planning must begin as soon as a problem becomes known.

Example 1: Getting out of the hot sun and going to the doctor for treatment of a severe sun burn, and cool the skin with water.
Example 2: Stop shipping more PC's with incorrect configuration and ensure the impacted customers will receive the correct PC.

3. Identify the Root Cause
While it's desirable that corrective action be taken as quickly as possible, it's just as important that the true root cause of the problem is identified and fixed. Sufficient time should be spent in causal analysis so that the problem is fixed once, and stays fixed.

Example 1: Extended exposure to direct sun light caused severe sun burn
Example 2: The PC product configuration information on marketing material and on the online store feed from different data sources which are manually synchronized. The manual work is prone to error.

4. Corrective and preventive action
In this phase, interim and permanent actions are taken to deal with all of the problems that a) have occurred and b) similar problems that can be prevented. Corrective action is the implementation of a solution believed to eliminate the root cause of an observed problem, defect or failure. Preventive action means applying the solution to prevent a similar problem from happening in similar processes and products. In cases where the problem impact is high and the permanent solution complex, a Kaizen event or BPI project can be initiated.

Example 1: Putting on sun screen on yourself to prevent sun burn and putting on sunscreen on your children.
Example 2: Use one source for product configuration data to feed the marketing material and webstore.

5. Closure
Closure means verifying by means of data and observations that the problem has been solved and improvement are standardized and sustainable.

Roles and Responsibilities - Story of Everybody

Here is a little story about four people named Everybody, Somebody, Anybody, and Nobody.

"There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that because it was Everybody's job. Everybody thought that Anybody could do it, but Nobody realized that Everybody wouldn't do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done."

When working with teams, I always make roles and responsibilities (R&R) explicit. A tool that helps in defining R&R's is the RACI Chart. It defines who is Responsible, Accountable, Consulted, Informed for specific activities. In Dutch VERI is used as abbreviation for : Verantwoordelijk, Eindverantwoordelijk, Raadplegen, Informeren.

Four step check-list to enable behavioural change

I use this powerful four item check-list whenever challenged with changing people's behaviour.

1. Do people understand what is expected of them and why the change is necessary ?

2. Does the manager lead by example and demonstrate the new behaviour?

3. Do people have the capabilities required for the new behaviour?

4. Are structures and systems supporting the new behaviour.
E.g. Processes and procedures, compensation plans, KPI's, IT systems