The Loneliness of the Small Business Owner

By Pascal Dennis

A colleague of mine is launching a small business - a comic book, craft & memorabilia store in Toronto's West end.

John is a splendid artist and draftsman, as well as, a gifted renovator of houses.

But he wants to do something a little different.

Over a drink the other day John described some of the obstacles he faces:

• Taxation (& double taxation) - on his lease, insurance, inventory, renovations etc.
• Municipal, provincial and federal business taxes - Toronto's business tax is among the highest in North America
• Multiple building permits - long delayed because the Permit Office lost the first set of drawings
• Multiple licenses - which face similar hassles & delays

It'll take John at least 6 months & a ton of investment just to open his doors.

Are there any lessons here?

A cynic might say, "Never start a business. Instead, get a job in the Permit Office. It's indoors & no heavy lifting."

Libertarians might say, "The power to tax is the power to destroy. We have starved government of money and power."

Lean thinkers might say, "Government has to reduce the waste in the small business launch process."

I'm with the Lean thinkers. If we agree that small business is the engine of growth, we have to reduce the hassles people like John face.

(According to BusinessWeek, business owners of all stripes cite RED TAPE is their single biggest hassle.)

How might we reduce the waste & hassle John has experienced?

A 'provision' map would be a good place to start. A provision map is essentially, a value stream map from the customer's point of view.

(See Chapter 12 of The Remedy for more.)

Our map would

• Define the steps in the small business launch process & related process data (e.g. total lead time, quality, value added time etc.)
• Illuminate the information flow, and
• Identify hassles & possible countermeasures

To take such a step, our various governments have to accept that their job is to help, by reducing hassle.

Mr. Obama, Mr. Harper, are you listening?

Best,

Pascal

Yokoten – Rapid, Shared Learning Across an Organization

By Al Norval

How many times do you come across a great idea at one location and when you go to implement it at another location, you hear a range of excuses that sound like this:

• That works well for them but it won’t work here
• We’re different
• We’ve already solved that problem
• We’ve tried that already and it didn’t work

Ultimately what these boil down to is something we’ve all heard before – the not invented here syndrome. That is, the ability to discount any improvement idea that didn’t originate here with my team, isn’t worth trying or implementing. This is why best practice sharing often doesn’t work.

This leads to huge organizational waste where multiple parts of an organization are all re-inventing the wheel. A great example of the 8th waste – Knowledge Waste. This can be defined as – not having the right knowledge at the right time with the right team. The team then has to re-gain the knowledge and as we all know any process with a rework loop in it is waste.

What’s the countermeasure to this waste?

Yokoten – the ability to share knowledge rapidly across an organization. Not only share the knowledge but more importantly to implement the knowledge and even better to improve upon it and share the improvements back across the organization.

How do organizations do this?

By linking the sharing of knowledge to problem solving. After problems are solved, the problem, the root causes and the countermeasures are shared. Everyone then has the complete picture. Anyone with the same problem can see what the team did and what their thinking was when they solved the problem.

How do you get teams to implement the learning from other teams?

Key to this is for leaders to set stretch goals. If teams believe they can solve their problems and meet their targets without any help, they will be reluctant to implement countermeasures that worked with other teams. Stretch goals need to be set that are high enough that teams realize they need to learn from other teams to meet the goals. This creates a pull for the problem solving knowledge that is so foundational to Yokoten. Once the pull is created, teams will find ways to share and work together. Leaders need to create this pull for learning.

Good lean organizations recognize this and orchestrate many ways for teams to share and learn from each other. This enables them to set higher goals and improve at a faster pace than their competitors. Ultimately, they understand that reducing knowledge waste is one of the keys to long term organizational success.

Cheers

Pascal Dennis reads from Reflections of a Business Nomad

By Pascal Dennis

A book is a footprint in time, a ship you send off into the night, not knowing what will happen.

Last October we launched my latest book, Reflections of a Business Nomad - Stories & Poems from the Road.

The setting was Avli Restaurant in the heart of Toronto's Greektown.

Here's a short video from that fine night, a reading by yours truly of the book's opening piece, "Meeting Buzz Aldrin in Fort Worth".

Thanks to all our friends who turned out!

Best regards

Pascal

PS Here are photos of places from the book: Pinterest

Honsha Executive Mission to Japan

By Pascal Dennis

One of my work pleasures is making friends around the world.

For years, Lean Pathways has partnered with Honsha, a fine consultancy led by my friend and colleague, Sammy Obara.

Sammy and I go back a long way. We both 'grew up' on the Toyota shop floor. He in Brazil, I in Cambridge, Ontario.

Honsha is sponsoring an Executive Mission to Japan and I'd like to wave the flag.

I know it'll be good.

Best regards,

Pascal

In Chess (& Small Business) Lies & Hypocrisy Do Not Last Long

By Pascal Dennis

I paraphrase the great Emmanuel Lasker, philosopher, mathematician, and world chess champ from 1894 to 1920.

One of the great charms of chess is its binary nature.

You win or lose based on

• The strength of your ideas, and
• Your skill & courage in implementing them

(Note: nowadays you can download grandmaster level chess programs on to your Pad!)

Is Lasker's maxim true in business?

In small business, I'd say Yes.

Our success or failure depends on the depth of our strategic understanding, and the energy & intelligence with which we execute.

(Luck plays a part too, of course, as always & everywhere.)

How about BIG business?

Based on my experience, I'd say Yes - with important reservations.

Monopoly, oligopoly, and market rigging (e.g. to keep competition out) are all too common.

(The countermeasure is intelligent regulation in accord with the "Less is More" principle)

Another exception is large companies suffering from Big Company Disease, the villain in my last book, The Remedy

Perhaps the greatest power of the Toyota Business System (aka "Lean") is its ability to make problems visible.

Lasker might add, "thereby, we expose lies & hypocrisy."

Good Lean companies are thus, a meritocracy.

The best & brightest prosper, and bozos are exposed.

Best,

Pascal

It's the Journey, Not the Destination

By Pascal Dennis

Ithaca, the famous poem by Cavafy expresses this idea beautifully.

Cavafy is referring of course to Odysseus, one of literature's greatest heroes, who fickle gods condemned to wander for twenty years.

Here's a link to a fine reading by Sean Connery (!) with music by Vangelis.

Powerful, no?

Let's keep Ithaca in mind as we embark on the adventure of change.

Odysseus' journey took twenty years.

Ours may take as long, or even longer.

But think of all we'll learn & experience.

Cheers,

Pascal

Poke Yoke – Preventing Inadvertent Errors

By Al Norval

We talk a lot about the House of Lean with its foundation of Standards & Stability and the two pillars of Just In Time and Jidoka supporting a roof of Customer and Strategic Direction which together encompass engaged Team Members continually solving problems.

All of this makes sense but what is this Japanese word – Jidoka?

It’s built in quality at the source. Rather than try to inspect and test quality in by looking for defects on finished product, a losing cause at best, lean organizations build in quality at the actual value added operation. That way defects can be caught early and they don’t have to reply as heavily on final inspection testing.

The big advantage to Jidoka is that by catching defects early in the process, they are closer to the actual process conditions that caused the defect and therefore closer to root cause. They can launch problem solving faster with a higher chance of getting to root cause since the process conditions wouldn’t have changed as much.

Jidoka has four parts:

• Detecting defects
• Alerting or signaling a problem
• Immediate response - temporary countermeasures to get running again
• Root cause problem solving and countermeasures to prevent the occurrence of the defect.

This is where Poka Yoke comes in. It’s about the final step in Jidoka of preventing the re-occurrence of the defect. Lean organizations realize that errors are inevitable. Human beings make errors that cause defects. By eliminating the possibility of the error being made, defects could be eliminated. Poka Yoke is used to prevent these errors being made. Translated it means “Preventing inadvertent mistakes” since it’s believed people don’t make mistakes on purpose. This is consistent with the lean principle of “Respect for People”

The best Poka Yoke devices are physical devices that eliminate the possibility of an error occurring. Weaker Poka Yoke countermeasures would be signs and warning systems but these could be overridden and the error could still occur.

Organizations are always looking for ways to get employees involved and having teams develop Poka Yoke devices that prevent errors from being made is a great way to do this. It’s a win-win. Employees are engaged in problem solving, quality gets better for customers.

For more on Poke Yoke, see The Lean Pathways “LEAN MANIFESTO”

Cheers

Lean Design is Hard Work

By Al Norval

I was talking to a VP of Research recently who espoused the idea that “You can’t schedule inventions”. While I agree with him, he went on to say “Therefore, there is no merit in applying lean to design work”. That’s the part I disagree with him on. While the odd invention happens in a flash of brilliance most are the result of tirelessly applying the scientific method. For every discovery of penicillin as moldy bread there are a hundred others that are the result of a process of experimentation and testing the results against a hypothesis.

Experimentation, testing and trialing are processes and all processes are made up of both value added and non-value added steps. In design processes, like most processes, the vast majority of the lead-time is waste. Lean enables the elimination of waste in these processes so the time to cycle through these processes is reduced. The cycle time for an experiment may be reduced from 4 weeks to 2 weeks and eventually to 1 week. While no one can predict how many experimental cycles will be needed, what is certain is that the shorter the experimental cycle, the faster we learn and the faster we’ll reach our end goal.

Thomas Edison had a wonderful quote that captures this beautifully.

“None of my inventions came by accident. I see a worthwhile need to be met and I make trial after trial until it comes. What it boils down to is one per cent inspiration and ninety-nine per cent perspiration.”
– Thomas Alva Edison

Using lean in design work allows us to reduce the amount of perspiration required.

Design is hard work. Using lean to eliminate waste in design processes allows us to focus more of our energy on things that truly drive value add to our customers. Isn’t that the purpose of design in the first place?

Cheers

Children or Raccoons - Economy II Gone Mad?

By Pascal Dennis

Our neighbourhood is infested with destructive, aggressive raccoons.

Raccoons are neither cute nor lovable. They're nasty, aggressive & dangerous.

Raccoon poop contains parasites deadly to children.

Parents are afraid to let their children play in backyards, for fear they'll be exposed.

Raccoons destroy property & impose costly repair bills - which fall disproportionately on people who can least afford them.

As in many cities across North America, Toronto's raccoon population is expanding and becoming more aggressive.

Other jurisdictions (e.g. California, Germany) have taken firm measures to reduce the risk posed by urban raccoons.

But in Toronto, if you harm a raccoon you'll be charged and could be imprisoned. Even if you're a poor man driven to distraction by the damage they wreak.

Who is the City of Toronto's customer?

Clearly, it's not Toronto citizens & their children.

In fact, the City will go to great lengths to ensure the safety & comfort of raccoons - at the expense of citizens & their children.

We need to help Economy II - (public services, health care, education, NGO's...) - improve customer service (i.e. Safety, Quality, Service), while reducing Cost.

The first step in this essential journey is asking, "Who is my customer?" and "What do they need?"

(The underlying value is Respect for People.)

Toronto's raccoon fiasco suggests the City isn't interested.

How do we get their - or any public mandarin's attention?

Regards,

Pascal