Daily Kaizen

There is an interesting line that I see managers throughout the organization wrestling with every day between holding a clear expectation with the teams that report to them and engaging those same teams in the improvement process.  This is a challenge that transcends the layers of management from the very top to the very bottom of the organization.  Managers that overstep this line and dictate too far the work of the teams are considered to be “top down” leaders and the result is often a dis-engaged team.  On the other side are managers that struggle with holding an expectation with their teams.  They take the easier course and soften the expectation, because they want to be liked.  These teams that are made up of humans that by our very nature gravitate toward the status quo take this as a queue that the change is not really all that serious and the effect is either slow progress or none at all.  I often see managers do this and use Lean as an excuse by saying that “it should be left up to the team, because they know best.”  While teams may know how to do much of the work best there is still a need for the right expectation to get set at the right level or little or no change will occur. 

I don’t want to come off as seeming like this is an easy challenge and if “we just had better management” this would not be a problem.  Some of the best leaders I know I have seen make serious mistakes in this area.  Learning how to set and hold the right level of expectations is one of the hardest skills that managers need to learn.  It is also one that is often talked about, but rarely focused on from a learning perspective.  This is because it hits so squarely in what we as Americans value so much in our leaders and to admit that we are not good at this calls into question if we “got what it takes”.  Yesterday, I commented to a Sensei that I work with that I have been surprised about how much of my time I spend working with leaders on expectation setting as opposed to providing technical Lean support.  He commented back that “we often ignore the basics like expectation setting, because it is easier to find the technical fix, but that early in a Lean transformation this is exactly the type of skill that we need to be working with our leaders on.” 

One of the most powerful aspects of a robust Lean management system is that it helps bring clarity between the layers of management about expectations for improvement and performance.  By implementing a Strategy Deployment system, leadership standard work, linked measurement and Daily Management an organization is able to deploy high level goals down through the organization while adding specificity at each level all the way to a standard at the frontline.  This takes the art out of management and turns management into a process.  Thus each level of management is not forced to figure out how to set expectations on their own.  By reducing the variation in expecation setting so many of the barriers that slow down the change process are eliminated. I am always amazed when I have gone to more advanced Lean organization how even as an outsider I can walk from the boardroom to the shop floor and see a line of site between each level of management.  The expectations and actions are visible and people know what to do and why they are doing it. 

While we have made great progress in the last couple of years in putting in the beginning elements of this type of system we are far from having this level of clarity.   There is still far more gray area then black and white.   In the mean time as a consultant the best we can offer for advice is the overly simplified rule of thumb that each level needs to set “the what” for the level below them and the level below needs to determine “the how” in the work getting done.  Once said our job is to continue to work with our management teams in getting explicit about figuring out how to put an effective management system in place.  A system that will bring the layers of management together to make expectation setting a process as opposed to an art.  We got a lot of work to do…

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During the Lean summit I have an interesting conversation with a Lean leader about what the best measures are to gauge the success of a Lean transformation.  This leader made the point that one of the most important measures early on in the transformation is the number of improvements being implemented by frontline teams.  Since this measure will demonstrate if the change is cultural or just technical.   He went on to say that in the short-term management can change process without the engagement of teams, but the results will not sustain.  Without direct participation and ownership from the frontline teams you are making short-term technical fixes, and missing the bigger picture of what is possible if you engage everyone in the improvement process. 

This conversation has stuck in my head over the last couple of weeks now that I am back at work.  Even though we are several years into our Lean journey there are still a large number of our associates whose jobs have no responsibility for improvement.  If this leader is right and this is one of the most important measures of success of a Lean transformation I should probably be worried.   While we have several areas in the organization where teams are deeply engaged at all levels in improvement we also large parts of entire Divisions that are mostly on the sidelines.  

So why is there so much variation and why are so many associates not engaged in the improvement process?    As I have thought through these questions there really are many broad cultural causes why this is the case  including rewarding leaders for being firefighters, top down strategic planning and goal setting, to many layers of management, etc.  Rather then focus this post on discussing the broader causes I would instead share some thought on what a local manager can do differently to engage their teams.  I could write a book on this subject so I will focus in on one area: finding time.

The number one reason I hear from managers about why they are unable to engage their teams in improvement related work is the lack of time.  With most managers there is a perception that the total amount of routine work >= the total time available to complete that work.  While this seems reasonable on the surface when you dig deeper this is not always the case.  For example, I had a conversation with a clinic leader the other day that told me that demand was so high for services that taking people offline for improvement related work would be bad for customer service.  A couple minutes later it was mentioned that on Thursday’s and Friday’s the clinic demand slowed down and the teams often had open appointments available.  This manager was trying to adopt an improvement model where teams would be doing small improvements every single day and it did not make sense.  When I suggested that he instead free up time on Thursday’s and Friday’s for team improvement he asked “can we do that?”   The point of this example is that often times there is more time available then what is on the surface and if you dig deeper you might just find the time.  As a first step, managers must understand their day to day demand and their capacity.

Once managers understand their capacity they will know if there is time available.  If they do find time I encourage them to get planful about how this time is used and distributed.  They need to treat this time just like they would if it was going to be used to complete routine related work items.  In other words, they need to schedule improvement time into peoples calendars and then have meaningful processes by which people engage in to use this time for improvement related activities.  If improvement related time is treated with any less formality as routine work time it runs the risk of being sidelined by short-term related, routine needs. 

If managers through their demand/capacity analysis determine that demand exceeds capacity and there is no time available for improvement related work they have some choices.  The easiest choice would be to ask for more resources.  This should be a last case scenario and only when other options have been exhausted.  The better option is for them to focus on improving processes to create the capacity and thus the time.  This is a strategy that if done successfully will allow them to become far more proactive and flexible.  By creating capacity for improvement related work they will be able to invest that time in creating additional capacity that can be financially actualized through attrition, used to absorb growth, etc.  While this may sound good this is a difficult strategy to undertake since they are no extra resources available to do the improvement related work.  This means in the short-term either the manager needs to ask the team to work harder or the manager needs to get agreement from their boss that results may get worse before they get better.  Many managers are hesitant to ask the team to work harder, but in my experience most team members will gladly sign up if the message is well communicated by the manager.  Most people want a chance to improve their work. In terms of asking the boss for a short-term pass on performance I think most bosses will allow this to happen as long as the manager has done enough planning in advance to demonstrate the case in terms of longer-term returns.

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Like most organizations we are facing challenging economic times, which I have discussed in many of my most recent postings.  Over the last couple of weeks our leadership teams have been engaged in a lot of reflection and check/adjust related activities as they try and plot the course forward for the organization.  There is a tricky balance we are trying to manage between the short and long-terms.  In the short-term we need to find ways to bring our cost trends downward and we need to do it quickly.  At the same time we need to avoid making short-term decisions that will cause our staff to dis-engage from their work.  We have made way to much progress over the last couple of years on our Lean journey to see it all go away due to traditional behaviors and decisions. 

I thought I would right this post to share my thoughts and perspectives on what we can do as an organization to manage through these challenging times.  Some of these ideas will seem familiar as I have discussed them in past posts.  My ideas are fairly general and are hopefully applicable to other organizations although I appoligize in advance if they are a little overly Group Health focused.  I would love it if others could share some of the steps they are taking in their organizations. 

1. Don’t back off from our management system related work.  In rough times it is easy to go back to the old ways of doing things and thus risk losing all of our gains.  We need to focus our management system related work on driving up the rate of improvement.  Through our strategy deployment work we need to focus the resources of the organization on only the vital few improvement areas that will lead to cost reduction and stop work that is not as important.  We have struggled mighty with stopping work and the time has come to make decisions that may not be popular, but essential. 
2. We need to become far more diligent and disciplined about realizing improvement gains.  This means getting clear up front prior to improving a process what the expected outcome of the improve should be (based on data!).   As well as creating robust redeployment processes to move people to value-added work. Once the change is made we need to ensure that the improvement is actualized.  This often means taking people and resources out of the improved process and moving them elsewhere to support value added activities.  I cannot tell you how many processes we have improved where we never take the step of removing the freed up resources.  As a result within months the work load grows back to its original levels and we have lost our improvement gains. 
3. We need to double the energy we have put into implementing our Daily Management and linked checking systems (management standard work).  The Daily Management system provides the means by which we can engage all our staff in the process of improvement and it is the only way that we can sustain the more transformational improvements once we put them in place.  As we move forward with putting the Daily Management system in place I think we need to set clear productivity and defect reduction targets that they must strive to achieve with this system as the means.   That way as people leave the organization teams have the means to improve their processes prior to replacing staff.
4. Stop all the design related work and focus on implementation.  We are an organization that loves to plan and plan and plan.  We invest huge amount of our senior and mid management resources in committee and other planning related activities.  This takes these leaders away from the workplace where they could be helping drive implementation of improved processes.  If leaders cannot show you the process they are going to improve and tell you when you can come and check on the changed process in the workplace I would question why we would allow the work to move forward given our need to implement improvement, quickly! 
5. Finally, and in my opinion most importantly to support all of the work related above we need to put in place expectations for how leadership spends their time by creating management standard work, which if done correctly will lead to behavioral changes and better outcomes.  A year ago we developed a standard organizational calander that set an expectations for leaders spending time in gemba and other improvement related activities.  The leaders that have taken these requirements seriously and developed management standard work are the same leaders that area driving the most impressive improvements in the organization.  They have realized just how powerful management standard work is enrolling all employees in the improvement process.  The problem is that most leaders in the organization are still on the sidelines or just going through the motions with this work.  This should no longer be okay.  Its time to hold leaders to the same standards we ask of our associates. 

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I just got back from a c0uple of days well spent at the Lean Enterprise Institute’s annual Transformational Summit in Atlanta.  Like always the conference was really put together well and it was a great opportunity to connect and learn from others.  This was the third summit I have attended in as many years and it has become an interesting marker for me on how quickly my organization is progressing on its journey.  Three years ago, when I first attended we were just starting to get some experience with the tools.  This year we were one of the featured companies and we had the opportunity to share our learnings with others.  Something I would never have guessed would be happening three years ago.

Overall, the main theme of the conference was how to make it through the rough economic times that we face. There are a couple of key learning’s/reflections that I walked away from the conference with in regards to this theme and thought I would take the time to share in this post. 

Not a surprise, but it was clear that the economny was having a negative impact on every company that was in the room.  Some of the leaders I talked with had seen sales drop as much as 65%.  What was encouraging was how many companies had not abandon their Lean implementations, even though almost everyone had to make some tough short-term decisions.  Instead, many organization had only put more focus on their Lean work as a means to make it through the economic challenges.  Almost every organization that presented as well as many of the speakers highlighted that even though the times are tough there is a great opportunity for the companies that are able to capitalize on it.  Below is a list of my reflections and learning on this theme:

• During stressful times where the delivery of bad news is common place it is tempting and easy for leadership to become withdrawn within the organization.  They often will spend their times together, trying to problem solve from afar, away from where the work is happening.  This creates communication gaps within an organization and leads to rumor making and lot of other non-value added behaviors.  During rough economic times it is even more important for leaders to be present, communicating and in the gemba.  They need to focus the worry of the organization on the activities that will lead to improvement. 
• Often leaders try to manage cost challenges on their own as opposed to making cost challenges the responsibility of everyone that works in the organization.  Great Lean organizations have learn how to create a culture where every potential cost is questioned and people are asked to first use their minds before they use their money.  I was impressed by many of the examples of practical cost savings that were shared by companies including things as simple as making sure the the lights and computers get shut down each evening, which one company saved $12,000 a month by doing.  At my company we often talk about finding opportunities to make transformation changes that will lead to large cost improvements.  At the same time we ignore all of the small opportunities that when added up would lead to large improvement.  Its hard to believe we will ever be able to get the big savings if we teach our people that the little stuff doesn’ t really make a difference. 
• While traditional organizations often look for short-term cost improvement opportunities through outsourcing many Lean companies are focusing on in-sourcing.  These companies are bringing work back into their organizations in order to fill excess capacity and to preserve their workforce. 
• There were some great examples I heard from organizations about how they are partnering with their supply chain in new ways in order to save cost and improve quality.  One leader told me about how his organization was able to provide some of their access warehouse space to a supplier in exchange for a discount.  When I think about my own organization and how much redundant and wasteful work we drive back and forth with our suppliers I am encouraged that we can make great in-roads. 
• Tough times allow organizations to challenge many of the sacred cows that in better days might not be viable.  One leader shared an example about how his organization was able to for the first time co-locate their supporting services with their operations groups.  Something they had tried many times in the past, but never been able to get the senior leadership support to do.  Now that these groups were co-located and their work was far more integrated and they had figured out a way to cut cycle times down and create more flexible processes.  Every organization has policies, structures and beliefs that add waste and take away from it’s effectiveness.  We have dozens in my organization.  Good companies will figure out ways to work through these challenges in constructive ways. 

This is just a short list of what many organizations are doing to make it through these rough times.  Overall, it was encouraging to see how focused and resilient everyone in the room was to ensuring their companies stay on their Lean journeys.  If you have examples from your companies please share.

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A day has not gone by in the last couple of months where I have not talked with someone in the organization that tells me about how worried they are about the economy and “how leadership is going to handle the crisis we are in.”    I often catch myself getting caught up in the “what ifs”, hand ringing and paralysis that comes from worry.  It not hard to understand why given the constant stream of bad news that seems to come from every direction these days.  This is because like most organizations we are feeling the strain of the current economic challenges.  In many ways we are in better shape then our competition.  For the last three years we have taken steps to improve our balance sheet at the same time that we have invested in developing our people and implementing a new, Lean based management system.  Without these steps there is no doubt that we would be repeating the same mistakes of our past including making short-term cost related decisions that we would regret and most likely laying off employees. 

Yet, it is also clear that while we may be in a better position then most organizations we are by no means immune from this crisis.    If we remain complacent we are at risk of losing all of the good work that we have done over the last couple of years through a slow erosion of performance.   Or worse, we may panic and lose everything very quickly through knee jerk reactions to market conditions and rash descisions without respect for people.  To avoid these two courses we need to figure out is how we translate the crisis into meaningful action.  How do we take the worry of 10,000 employees and channel all of that energy into improvement related activities?  How do we break out of the paralysis of constant planning and drive implementation?  How do shine a light on all those sacred cows that in better times were just not worth confronting?  The current crisis allows for great opportunity, but only if we are able to capitalize on it. 

The investments we have made over the last three years in developing our people and putting in a Lean management system need to now be leveraged.  Through the management system we can answer all of the questions that I asked above.  The reason we made these investments was to increase the rate of improvement and to increase our flexibility to respond to the needs of the marketplace.  My advice to leadership is that we need to stay the course, but not the pace.  We have been slow and methodical in our approach to implementing a Lean management system and to driving improvement in the organization.  The market conditions have changed and the pace is no longer sufficient.  We need to double up our efforts on our Lean management system implementation and use the system to focus our 10,000 employees on improving and sustaining improvement.

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