Lean & Six Sigma

By Al Norval

I deal with several organizations where the competition between Lean and Six Sigma is nothing short of destructive for the organization. These typically large organizations have two camps both of whom are dug in and set in their ways. They seem to spend more time fighting with each other than actually helping people in the organization make improvements. The skirmishes typically involve sending articles around the organization by email where the pundit has an opinion that supports one side or the other.

I’m always puzzled by this as both improvement methodologies are necessary. Some organizations understand this but end up splitting the two improvement methodologies anyway with statements like “Lean is about removing waste and Six Sigma is about reducing variation”

Hogwash. While reducing Muda (waste) is a key pillar of Lean, so is reducing Muri (Strain) and Mura (variation). These three concepts are related as Strain and Variation are causes of Waste. Strain or Overburden applies both to machines and manpower. We can see it when equipment is made to run faster than it’s capable of or IT systems become overloaded with new software. When it’s applied to people it lines up with another pillar of Lean – Respect for People. Strain here often leads to ergonomic issues. Asking people to do work that causes injuries certainly isn’t showing them due respect.

Likewise Six Sigma is about reducing variation but more importantly it’s about making data driven process improvements using DMAIC which is a variant of Deming’s PDCA cycle.

In both cases, organizations have good people working in broken processes.

The trick is to apply the right technique to the right problem. Here’s my recommendation:

When problems require simple problem solving, use Lean. When faced with complex problems use Six Sigma.

Abraham Maslow once said “If the only tool you have is a hammer, it’s tempting to treat everything as a nail”

In my opinion, both improvement methodologies are necessary. Learn to coexist and get on with the real work of helping people make improvements enabling the organization to achieve its goals.

Cheers

You Respect Us

By Pascal Dennis

Egypt, a few years ago, working with a major client.

Just before the demonstrations in Tahrir Square that led to the Egyptian Spring.

My Egyptian colleagues were gracious, hospitable and hungry to learn.

Dozens of questions on standardized work, visual management, problem solving, strategy deployment.

I answered as best I could, pleased to have such eager students.

After each session, team members came up to shake my hand.

"We are so happy," a young fellow told me," to meet somebody like you."

"What do you mean - someone like me?" I asked.

"You respect us," he replied.

Somehow, sadly, this was an abnormality.

Lean principles, like Respect for People, seem to connect with fundamental human yearnings.

The desire for safety, security and respect.

The desire to have a hand in designing, and improving, your work, and to creating value for your customer (both internal & external).

The desire to be part of a team, in a great enterprise.

During the same trip, I asked the senior executive sponsoring our work, about extremism in the Middle East.

"Invest; give people decent jobs," he replied, "and all that crap would disappear in no time."

Best regards,

Lean Laughs

Lean Hotels

By Pascal Dennis

Lean in the service industries is a frequent topic in this blog.

The great hotel chains -- Ritz, Hyatt, Marriott, Westin, Disney and others -- are superb Lean companies.

Marriott's Twelve Guiding Principles of Leadership and Customer Service, for example, reads like a Lean manifesto:

1. Continually challenge your team to do better.
   


2. Take good care of your employees, and they’ll take good care of your customers, and the customers will come back.
   


3. Celebrate your people’s success, not your own.
   


4. Know what you’re good at and mine those competencies for all you’re worth.
   


5. Do it and do it now. Err on the side of taking action.
   


6. Communicate. Listen to your customers, associates and competitors.
   


7. See and be seen. Get out of your office, walk around, make yourself visible and accessible.
   


8. Success is in the details.
   


9. It’s more important to hire people with the right qualities than with specific experience.
   


10. Customer needs may vary, but their bias for quality never does.
    


11. Eliminate the cause of a mistake. Don’t just clean it up.
    


12. View every problem as an opportunity to grow.
    

Marriott's standard - our principles will be in the nightstand drawer of every Marriott room.

A few years ago, I was staying at the Sharm al Shaikh Marriott, at the bottom of the Sinai peninsula.

Being a natural pain, I decided to check Marriott's adherence to its standards, in this relatively remote hotel.

Sure enough, I found the principles were there were supposed to be.

The hotel manager smiled when I told him, and described Marriott's training & development processes.

Ritz, Hyatt, Westin, Disney & the rest all have corresponding principles & practices. Well done - and please continue!

Are there any other industries that could learn from Lean hotels?

Oh, I don't know, perhaps Health Care...?

Value Added vs. People Being Valuable

By Al Norval

A big part of Lean is observing the work that people do and breaking it down into three categories:

1. value added work,
   


2. non-value added work
   


3. necessary non-value added work
   

When teams go through this exercise, people are always amazed at how small a percentage of their time is actually spent doing value added work. For knowledge workers in an office environment, it could be 15-20% of their time is spent doing value added work. For a product moving through a value stream, the amount of time spent on value added activity is often less than 1% of the total lead time for the product.

The remainder and bulk of the time, not spent on value added activity is waste which can be broken down into two groups; necessary non-value added and pure waste. In a Lean environment teams work daily to eliminate the waste. Necessary non-value added includes activities driven by regulation or legal obligations. For these kinds of activities, team still must work to reduce the waste in them although the activity itself can never be eliminated.

It’s often a shock to people when they learn that 80% of their work is non-value added. Many times they assume we are saying they are non-value added and react accordingly often with anger and indignation. On the contrary, we aren’t saying the people are non-value added, we are saying much of the work they do is non-value added. The people themselves are still valuable team members. We need to separate the people from the work they do. While this sounds easy, many times it’s a difficult concept to explain to people.

When this happens, I always fall back on the pillars of Lean and talk about how Lean is built on Respect for Humanity. Lean is very respectful of people and so sees it as dis-respectful to ask people to do work that is full of waste.

At this point in time, people usually become engaged in the improvement activity to drive waste out. Understanding the foundations of value & waste as well as Respect for Humanity are key concepts to getting team members to engage and drive improvement.

Cheers

The Importance of Defining Purpose - World War II vs. Vietnam

By Pascal Dennis

In recent blogs I've talked about Policy, Strategy & Tactics using military metaphors.

Let's talk a bit more about Policy - why we're fighting.

In the absence of a clearly defined Policy (or Purpose - I'll use the terms interchangeably) all bets are off.

During WWII the allied Purpose was crystal clear:

1. Remove Hitler and Tojo from power
   


2. Destroy the Nazi and Japanese war machines
   


3. Destroy their will to fight
   

"Unconditional surrender" was an apt expression of this policy.

Result: absolute clarity of purpose among the troops. They could focus on getting the terrible job done.

By contrast, during the Vietnam war, America's Purpose was vague.

And this was America's critical error, argued Col. Harry Summers, the late, great author & US Army College lecturer.

America's efforts, he argued, amounted to "grand tactics".

Result?

Misalignment and tragedy.

For the only time in the history of the republic, the Army and the People were not aligned.

A famous exchange between an American and Vietnamese general goes like this:

US General, "You never defeated us in battle."

Vietnamese General, "That is true. It is also irrelevant."

Some implications for leaders at all levels, no?

Best regards,

Pascal

Beware INITIATIVES

By Pascal Dennis

Like most people, I went to business and engineering school with the best intentions - get a better job, learn interesting stuff, become a better manager and so on.

But we pick up more than we bargain for - including dysfunctional mental models, which I've written about at length.

We begin to believe that, because we are so smart and well-educated, we can manage from a distance.

And the corollaries:

1. What can front line workers possible teach us?
   


2. Improvement means head office INITIATIVES dreamed up by people -- just like us!
   

Result?

Endless INITIATIVES stream out of head office.

They crowd out real work and often crush our managers and team members.

Everywhere, I see good people struggling under the weight of actual work plus the funny work head office insists on.

Executives are like crows - they like shiny things.

Here's some advice:

1. Resist the temptation
   


2. Put the shiny things on a wall in the Executive metrics room
   


3. Look at them occasionally, but don't do anything
   


4. When the organization has some "white space", pull one off the wall and look at it
   

Then put it back and forget about it.

Here's a reflection point:

At our old Toyota Motor Manufacturing Canada plant - we never had INITIATIVES

We had tough performance targets set through Strategy Deployment, and the expectation that we'd figure out root causes & countermeasures.

Result: we focused entirely on making the day's production and improving our management system.

We were free to balance continuous improvement with breakthrough.

We owned our management system.

Best,

Pascal

PS Congratulations to Spain for winning Euro 2012! Splendid tournament - congratulations to the hosts, Poland & Ukraine.

Wonderful creative play by Italy, Germany & others. (Fortitude by the Greek side, at a tough time.)

Emphasize Strategy Deployment, Not Selection

By Pascal Dennis

"Any damn fool can make a plan. It's the execution that screws you up."

My favorite military adage.

Corporate strategy usually entails spending 80% of our energy devising the "perfect strategy" - and precious little on deployment.

But deployment is what screws you up.

Strategy development entails answering questions like:

1. What are we trying to achieve? (Our "Policy" to use a military metaphor),
   


2. Where, when & with what forces will we fight?
   

Important questions, to be sure, but usually not as complicated as people make out.

The tools of strategy selection -- SWOT, Five Force analysis & the like -- are well known.

Most important is a gut level understanding of your business gained by long apprenticeship, numerous annual PDCA cycles, and by getting your hands dirty.

Often the best strategy is some combination of:

1. Design & make cool stuff
   


2. Sell more,
   


3. Wring out cost, and
   


4. Involve everybody in improvement
   

And the most adroit strategy will falter unless it is translated (deployed) such that each level and team have a focused set of breakthrough activities.

We deconstruct the elephant, if you will, so that everybody has a piece of it.

In summary, in developing your strategy, go see, reflect deeply, and use the core tools in the strategy tool box.

But put 80% of your organization's energy into:

1. Deployment, i.e. translating objectives & means level by level,
   


2. execution, and
   


3. in creating a freewheeling, entrepreneurial atmosphere where initiative flourishes
   

Cheers,

Pascal

Life Lessons - What is a Good Life?

By Pascal Dennis

Plato, Socrates and Aristotle asked this question 2,500 years ago.

Both eastern and western philosophy is largely the search for an answer.

Clayton Christensen, author of The Innovator's Dilemma, Harvard professor, and classic hyper-achiever is raising the same question.

A significant conversion -- master of the universe to philosopher.

In a recent Business Week interview, Dr. Christensen remarks that he was struck by how badly the lives of his fellow hyper-achievers had turned out.

Messy divorces, estranged kids, and even, in some cases, fraud and imprisonment.

Can Lean principles help to answer this most important question?

I believe it can.

In my view, Lean thinking is anchored in standards -- images of how things should be.

Values are standards. Integrity entails adherence to one's personal standards.

Those of you kind enough to read my books will notice an emphasis on the Cardinal Virtues.

Prudence, Temperance, Courage and Justice, are, of course, standards of behavior.

Low-down, miserable, tricky, treacherous beings such as us have a hard time living up to them.

But we have to try, and in doing so we partially succeed -- and that makes all difference.

In fact, if I had to hazard an answer to the above question, I'd say living a good life entails having good values, and trying to live up to them.

All for now,