Fundamentals of OpEx/Lean, Part 2

Pascal Dennis, co-author of Harnessing Digital Disruption

The Four Levels of Visual Management, Part 2

Last time I talked about making problems visible through the four levels of visual management. I described Levels 1 and 2, which have comparatively low power. Today, our topic is Visual Management, Levels 3 and 4:

Level 3 – Organizes Behavior

Home positions for tools & equipment are a good example. In a surgery, home positions provide a nice visual confirmation that sponges, scalpels and other equipment are back where they belong – and not inside the patient!

In manufacturing, having a home position for, say, our torque wrench and gauges, ensures a) they’re there when we need them, and, as important, b) we know when they’re not there. “Right, Bonnie is doing her daily 2:00 pm torque audit.”

Other good examples include the ribbed perimeters, and studded lane lines on highways. You know at once if you’re on the median or straddling your lane. You quickly correct your behavior.

Recently, I saw a nice kaizen in the Oncology department of a children’s hospital. Infections are a major risk in such wards. How to encourage staff & parents to decontaminate their hands before they enter the room? Move the hand decontamination unit to the point of entry. You can’t enter Oncology without seeing and using the unit. As a result, hand hygiene compliance rates have spiked.

Effective Agile teams implement the Agile ‘ceremonies’ each week including the Monday morning planning meeting, Daily Stand-up, and Friday review of the week’s work. Such process discipline reinforces purpose, highlights abnormalities, and organizes countermeasures while reducing hassle.

Level 4 – The Defect is Impossible

OpEx/Lean practitioners will recognize the ‘poka-yoke’ concept. We develop such a deep grasp of our process and its possible failure modes, that we install gizmos and practices that make them impossible.

Manufacturing is full of these: alarms on torque wrenches, electronic lights and safety mats that disable the machine if a team member enters the line of fire, gasoline nozzles that won’t fit diesel tanks and so on.

A good website payment process makes it impossible to proceed to the next screen unless you have entered the needed information correctly. In Health Care, a poka-yoke on gas lines make it impossible to mis-connect oxygen and other gas lines.

As we get better at OpEx/Lean, our visual management naturally progresses from Level 1 to Level 4. Once we’re good at Level 1 and 2 visual management, we begin to think. “The same defect – here we go again! How do we prevent it?”

Who is the best source of Level 3 and 4 visual management? Front-line team members, of course, which is why Total Involvement is a leader’s priority. Alienate the front line and you lose all their insight & creativity. Problems mushroom – but you already know that.

OpEx/Lean fundamentals like visual management are also the cornerstone of Innovation. By protecting your core business with OpEx/Lean, you lay the foundation for Igniting New Growth with Digital methods.

Best regards,

Pascal Dennis

E: pascal.dennis@leansystems.org

PS: To learn more about my executive mentoring programs: Exec 101 - Protecting the Core Business, and Exec 201 – Igniting New Growth, feel free to drop me an e-mail.



In case you missed our last few blogs... please feel free to have another look.…

Fundamentals of OpEx/Lean, Part 1
Canada's Innovation Makeover: Singapore’s Cheat Sheet
The Two-Gear Economy, part 2 - Singapore’s Innovation Ecosystem
The Two-Gear Economy, part 1 – Canada’s Innovation Predicament

Fundamentals of OpEx/Lean, Part 1

Pascal Dennis, co-author of Harnessing Digital Disruption

The Four Levels of Visual Management, Part 1

You can’t fix what you can’t see. This applies whether you’re trying to protect your core business or ignite new Growth using Digital methods. Excellence entails making problems visible. The added benefit: visual management frees up ‘white space’ in your brain. You feel lighter, fresher & more creative.

Here are the four levels of Visual Management, in order of increasing power:

Level 1 – Tells only

STOP signs are a good example of Level 1 Visual Management. In our neighbourhood, people blow through STOP signs all the time. In fact, we call them ‘Hollywood stops’ – the driver slows by 5 miles per hour, takes a perfunctory look around & drives on through. Not exactly, Safety First.

A Digital equivalent might be a chart in a virtual ‘Control Tower’ (aka Obeya), say on Miro or Mural, that everybody ignores. Or an Agile team’s kanban board with WIP levels far exceeding defined standards but is likewise ignored.

Level 2 – Something changes, which gets your attention

Traffic lights are a good example. “Hey, the light’s changed to Green. We can drive on.”

Level 2 has more power because, done well, it wakes people up. A Digital equivalent might be a chart in a Control Tower that includes a target line, a Red/Green indicator, and a sticky note below it explaining what’s going on. And a Leader operating rhythm (standardized process) wherein we review our key indicators on a regular basis and act on significant abnormalities.

My regular readers may recall that OpEx/Lean is about wakefulness…. “Wake up everybody! We have a problem...”

Sadly, visual management in many organizations gets stuck at Level 1. Have you ever been in a hospital full of signage exhorting staff with some slogan? “Patient Safety is everybody’s responsibility!”

As W. Edward Deming observed a generation ago, such exhortations amount to blaming the worker. They subtly shift responsibility from senior management to front line workers. “Hey, don’t blame me. I told them not to do it…”

A few years back, my mom had major surgery at a local hospital. The medical staff was dedicated and capable, as usual, but was the management system making their lives easier? For example, was there visual management around infection control, or mis-medication - methods that highlighted abnormalities and triggered countermeasures?

At a deeper level, did senior leaders foster a culture of transparency, psychological safety and involvement? Did team members feel able to highlight – and fix – abnormalities? Were they trained in root cause problem solving?

No, just exhortations: Do something! It’s up to you!

My mom suffered not one, but two infections. And when I wrote to the VP of Patient Safety & Experience, I received an astonishing response. My mom was to blame, not the hospital. Evidently, in the VP’s mind patients and the front-line staff were responsible for safety. (I don’t want to be misunderstood. I’ve been privileged to work with many splendid hospitals.)

Deming taught us that the root cause of the problem is almost always in the system – which senior management owns. Senior leaders cannot take the authority, rewards and perquisites of power – and not accept the responsibility.

Next time, I’ll talk about Level 3 and 4 visual management.

Best regards,

Pascal Dennis

E: pascal.dennis@leansystems.org

PS To learn more about my Strategy Execution program, Getting the Right Things Done in a Digital World, feel free to drop me a line.




In case you missed our last few blogs... please feel free to have another look…

Canada's Innovation Makeover: Singapore’s Cheat Sheet
The Two-Gear Economy, part 2 - Singapore’s Innovation Ecosystem
The Two-Gear Economy, part 1 – Canada’s Innovation Predicament
Has OpEx/Lean Gone Wrong?

Getting the Right Things Done in a Digital World

Pascal Dennis, co-author of (Harnessing Digital Disruption)

My career has been a happy & lucky journey of discovery. In the early 1990s, I was a young chemical engineer & aspiring manager absorbed with the management gurus of the 20th century. In the West, Deming, Juran, Peter Drucker; in the East, Shingo, Ohno, Kano and the rest. I believed that if I could absorb this ‘system of profound knowledge’ (Deming’s phrase), I’d have a gift for life: the ability to create Value in any endeavour. When I joined Toyota, in my mind, the world’s greatest university, my learning accelerated. I felt like a kid in a martial arts movie.

By the early 2000s, I felt confident enough to start an advisory business with like-minded people. We began in manufacturing, our home industry. With time we migrated into aerospace, consumer goods, financial services, Health Care…, in each case translating the profound methods we’d learned.

We worked with fine people & companies and got to explore our miraculous world. But about ten years ago, something began to nag at me. I sensed a complacency in myself & my community. Did we really have all the answers? Was OpEx/Lean really the key to the kingdom?

If so, why was everybody talking about Tech startups and places like Silicon Valley & Singapore. Why were companies like Google, Amazon, Facebook, Apple (GAFA), and Baidu, Alibaba, Tencent and Xiaomi (BATX) so valuable, and so famous? Their business valuations exceeded those of the great industrial companies. Toyota, Honeywell, P & G etc. were still great, but something fundamental had changed.

I began to explore the innovation hot spots and the start-up scene. I became acquainted with the work of people like Clay Christensen, Steve Blank, and Alex Osterwalder. I began to develop a basic grasp of Design Thinking, Agile, Lean Experimentation (aka Lean Startup), and Growth Hacking. I quickly realized that these methods share core principles with OpEx/Lean. But Innovation methods & mindsets had evolved in a different direction, because the job to be done was different. Innovation methods were aimed at creating something new - new customer journeys, offerings, and even new business models. The job to be done of OpEx/Lean, by contrast, is to protect the existing company.

And then, one morning in late 2016, I got an extraordinary call from a French banker and innovator named Laurent Simon, who was waiting out a delay in a Moroccan airport. "I like your books,” he said. “Shall we write one together?"

We quickly realized we were simpatico and agreed to work together. I would teach Laurent what I knew, and Laurent would teach me what he knew. And so began the second great learning journey of my charmed career. 

Laurent lived in hot humid Singapore, and I in cold, windy Toronto. Our first meeting was in Pietermaritzburg, South Africa, and that’s where we had our first of many long ‘walk & talks’, which we’ve sustained since then.

I began to visit Singapore regularly and to participate in Innovations sprints led by Laurent. It was a steep learning curve, but it was fun. INSEAD business school has a Singapore campus, which became our home base. In fact, I enrolled and became an INSEAD alumnus.

Singapore’s iconic Marina Bay Sands Hotel – the roof top bar figures prominently in our book!

With time, we built a body of knowledge, and practice. Then we published a book called Harnessing Digital Disruption, a business novel whose setting is a major international bank. ‘HDD’ crystallizes our body of knowledge. 

Here is a summary of what I have learned, and what I believe it means for OpEx/Lean and Innovation professionals, and for progressive organizations around the world. In the months to come, I’ll delve into each of these in detail: 

1. It's no longer enough to Protect the Core business with OpEx/Lean methods, you must also ignite new growth using Digital methods. Prosperity and growth, therefore, will go to the ambidextrous. 
2. Ambidexterity means operating in two very different worlds - worlds that were first described 2400 years ago by Aristotle. Methods & mindsets learned in one world, may not apply in the other. 
3. OpEx/Lean lay the foundation for Igniting new Growth – but is not sufficient. 
4. Innovation begins not with technology, but with the customer. Thus, Harnessing Digital Disruption begins & ends with the CEO and his most important customer, looking out on the Andaman Sea. 
5. Innovation entails the ability to create a) better Customer Journeys, b) new Customer Journeys, and c) new offerings & even new businesses. Laurent Simon and I have developed the corresponding concept of the ‘Innovation Tree’. 
6. The 'front of the house' (i.e. Design, Marketing, Sales) & 'back of the house' (Production, Supply Chain, Distribution) do not understand each other. Result: a Bermuda Triangle of waste. 
7. Protecting the Core and Igniting New Growth are both difficult, but the former is harder and is usually the constraint.
   

What does it mean for business Leaders and for OpEx and Innovation professionals? 

Mastering OpEx/Lean fundamentals is not enough. We must also understand the methods & mindset that underlie new Growth. When confronting a business challenge, leaders must ask: Am I in the world of Protecting the Core, or the world of Igniting new Growth? What methods & mindset apply here? How do I best support and motivate this team? 

The future belongs to the ambidextrous.

Best wishes,

Pascal Dennis

E: pascal.dennis@leansystems.org

PS To learn more about my Strategy Execution program, Getting the Right Things Done in a Digital World, feel free to drop me a line.




In case you missed our last few blogs... please feel free to have another look…

Igniting New Growth - My Improbable Journey, Part 2
Igniting New Growth - My Improbable Journey, Part 1
Year-End: Why Is Reflection So Difficult?
What is a Good Life?