Value in an Age of Endless Innovation

By Pascal Dennis (bio)

Enterprise, in all its glorious variety, cacophony & unpredictability begins and ends with value.

We seek to create products, services, experiences…that elevates our fellow human beings, that make their lives easier or more enjoyable, that reduce hassle and free up their time & energy.

Otherwise, why bother? We are human to the degree we are connected, and Value is an excellent measure of connectivity, no?

In John Donne’s timeless words:

No man is an island entire of itself; every man
is a piece of the continent, a part of the main…

So what is Value? You all know the standard definitions:

1. What the customer is willing to pay for
2. Quality/Cost

I’m partial to Kano’s model.

I grew up professionally at Toyota manufacturing at the superb TMMC site in Cambridge Ontario. Value was our guiding light, our North Star.

Value was expressed in Toyota’s famous logo, the intertwined ovals representing:

• Something for the customer
• Something for the team member
• Something for the company

Moreover, we further translated Value into our four strategic focus areas: People, Quality, Delivery and Cost. To be sure, our targets changed year by year, as we changed models and customer desires changed. Nonetheless, Value was more or less constant.

Fast forward a couple of decades to 2024. Today Value is an endlessly moving target. Digital is indeed eating the world, and neither we, nor our customers can always define Value.

Indeed, in industries like Banking and Insurance, we can say with some confidence that there’s a good chance we do not understand value.

What to do?

For a start, let’s recognize that Value is no longer a fixed star, but a constantly moving & evolving entity.

Secondly, let’s accept that we have to iterate ourselves to value through continuous experimentation.

Thirdly, let’s commit to radical collaboration, across silos, and partnering with customers & stakeholders.

Lastly, let’s recognize the qualities that will help us untangle the Gordian Knot: humility, openness, humor and a big-picture consciousness.

It all adds up to a bracing challenge and new way of working.

Best regards,

Pascal



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

The Power of One Page
Strategy in a Time of Explosive Change
The Function of Leaders is to Produce More Leaders
Complexity is a Crude State, Simplicity Marks the End of a Process of Refinement

Why Lean Outside the Factory?

By Pascal Dennis (bio)

I wrote a book about it – (The Remedy). Why did I bother?

Because Lean is about reducing waste & variation -- and most of it is outside of the factory.

The past few decades, factories, and Operations in general, have gotten better and better.

There’s still much opportunity, but in many industries they are no longer the bottleneck.

Suppose you order a new Toyota Avalon, Total lead time (i.e. time between your order and delivery) will be something like 30 days.

How much of that time does the vehicle spend at the Toyota Kentucky factory?

A day or so. Most of the lead time is outside the factory and comprises administration, transportation, and plenty of waiting. So where is the opportunity?

Sales, Marketing, Design, Engineering, Finance and so on are the "undiscovered country".

How do we support the good people in these areas?

Here are a few questions to get us started.

For each zone, ask:

1) What is waste?

2) What is value?

3) What are some core mental models?

If we can build on these to define our Purpose clearly, we'll can start to pull in powerful Lean tools to help us achieve that Purpose (Getting the Right Things Done)

Best regards,

Pascal



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

Too Often, Power Means the Power to Do Stupid Things
When You’re Convinced You’re Right, You’ve Lost Your Ability to Learn
On Labels – ‘Expert, Master, Sensei’ and the like
Fred Taylor & the Illusion of Top-Down Control - Part 2

Back to Basics - What is Value?

By Pascal Dennis (bio)

Value is Lean’s guiding star, Mother Lode and raison d’etre.

So what is value? Here are some common definitions:

• ‘What the customer is willing to pay for.’
• Okay, but what if the customer doesn’t know what they’re willing to pay for? (Would customers have said yes to the IPad in conception?)

• Value = Quality/Cost
• A serviceable definition

• Changes form, fit or function of a product
• A nice manufacturing definition, but does it apply in, say, a bank or hospital?

• An action that moves a process forward
• Nebulous, no?

All of these are correct, in their way. Value is like a gemstone – hold it up to the light and different colors emerge.

Most importantly, the team must connect closely with internal and external customers and understand value from their point of view.

This is the beauty of connectivity and commerce. Work is activity that creates value. Our work enables our customer, who is thereby able to create more value.

The splendid work of Steve Jobs, Bill Gates and their teams compound my productivity (such as it is).

Work ennobles and enriches both the worker and the recipient, which is why we revere it so.

(Of course, there are extreme philosophies that demean work, and believe value is fixed and cannot be created. For these, the only question for such is how to divide the economic pie.

But you rarely see them in a factory, hospital, design studio or any place value is created.)

In summary, value is Lean’s guiding star. Get close to your customer and ask them what they need from you.

Best regards,

Pascal




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

You Want to Get More Done? Do Less…
Strategy Deployment & Language
Where Lean Has Gone Wrong & What to Do About It, Part 2
Where Lean Has Gone Wrong & What to Do About It, Part 1

Value in an Age of Endless Innovation

By Pascal Dennis (bio)

Enterprise, in all its glorious variety, cacophony & unpredictability begins and ends with value.

We seek to create products, services, experiences…that elevates our fellow human beings, that make their lives easier or more enjoyable, that reduce hassle and free up their time & energy.

Otherwise, why bother? We are human to the degree we are connected, and Value is an excellent measure of connectivity, no?

In John Donne’s timeless words:

No man is an island entire of itself; every man
is a piece of the continent, a part of the main…

So what is Value? You all know the standard definitions:

1. What the customer is willing to pay for
2. Quality/Cost

I’m partial to Kano’s model.

I grew up professionally at Toyota manufacturing at the superb TMMC site in Cambridge Ontario. Value was our guiding light, our North Star.

Value was expressed in Toyota’s famous logo, the intertwined ovals representing:

• Something for the customer
• Something for the team member
• Something for the company

Moreover, we further translated Value into our four strategic focus areas: People, Quality, Delivery and Cost. To be sure, our targets changed year by year, as we changed models and customer desires changed. Nonetheless, Value was more or less constant.

Fast forward a couple of decades to 2018. Today Value is an endlessly moving target. Digital is indeed eating the world, and neither we, nor our customers can always define Value.

Indeed, in industries like Banking and Insurance, we can say with some confidence that there’s a good chance we do not understand value.

What to do?

For a start, let’s recognize that Value is no longer a fixed star, but a constantly moving & evolving entity.

Secondly, let’s accept that we have to iterate ourselves to value through continuous experimentation.

Thirdly, let’s commit to radical collaboration, across silos, and partnering with customers & stakeholders.

Lastly, let’s recognize the qualities that will help us untangle the Gordian Knot: humility, openness, humor and a big-picture consciousness.

It all adds up to a bracing challenge and new way of working.

Best regards,

Pascal

Software is Eating the World – What’s It Mean for Lean/CI?

By Pascal Dennis (bio)

Hard to argue with this strong statement. Is there any major organization nowadays that is not an IT organization?

ING Bank, famously, has more IT professionals than Google. Today a Tesla car has more lines of code than macOS or the Windows Vista operation system.

What’s all this mean for the Lean/Continuous Improvement ‘movement’?

Lean/CI practitioners need to raise their games. We have to learn the language, technology and mental models of the digital world.

We have to reach out to our IT colleagues and help them deepen their practice, as they deepen ours.

Lean/CI has had a strong run these past two decades. Most major corporations now in most industries have active Lean/CI ‘programs.’

True, there are still comparatively few brilliant Lean organizations, and most senior executives still don’t understand the methods or the underlying mindsets.

But the Lean/CI tide has lifted most ships, and core concepts such as Value, Waste, Flow and PDCA are firmly rooted in contemporary business practice.

But it’s not enough. Lean/CI has much to offer the digital world. Digitization is an inherently abstract process. Bits & bytes are invisible, as are the circuits that animate a printed circuit board.

The more abstract a practice or technology, the more essential is a counter-balancing engagement with the physical world.

At its best, Lean/CI is simple & concrete. Our old Toyota senseis taught us to continually refine our thinking & processes by removing the unnecessary.

After a while it becomes second nature. Steve Jobs, famously, learned the art of design by studying Japanese calligraphy.

Strategy, problem solving, ideation, rapid experimentation and other core Lean/CI practices require a fluid back & forth between the worlds of reflection & experience.

We go see, reflect on what we saw, and go see again. Such core Lean/CI practices and mindsets can help to enable, focus and refine digitization.

But we have to be humble and open enough to accept that the world is changing very quickly. And we have to work very hard to understand the language, mental models & technology of our colleagues in the digital world.

Good learning, all.

Best regards,

Pascal

Reprise - Why Lean Outside the Factory?

By Pascal Dennis,

I wrote a book about it – (The Remedy). Why did I bother?

Because Lean is about reducing waste & variation -- and most of it is outside of the factory.

The past few decades, factories, and Operations in general, have gotten better and better.

There’s still much opportunity, but in many industries they are no longer the bottleneck.

Suppose you order a new Toyota Avalon, Total lead time (i.e. time between your order and delivery) will be something like 30 days.

How much of that time does the vehicle spend at the Toyota Kentucky factory?

A day or so. Most of the lead time is outside the factory and comprises administration, transportation, and plenty of waiting. So where is the opportunity?

Sales, Marketing, Design, Engineering, Finance and so on are the "undiscovered country".

How do we support the good people in these areas?

Here are a few questions to get us started.

For each zone, ask:

1) What is waste?

2) What is value?

3) What are some core mental models?

If we can build on these to define our Purpose clearly, we'll can start to pull in powerful Lean tools to help us achieve that Purpose (Getting the Right Things Done)

Best regards,

Pascal

Pascal Dennis Bio

What is the Value in Outstanding Service?

By Al Norval

Do people value good service? Would customers pay more for good service?

This is a question I’m always asked and I always reply “Yes”. We sometimes take a narrow view of the definition of Customer Value. We look at the functionality of a product or service and the steps that go into making it ask what would the customer be willing to pay for this? While this is true and necessary, it’s not sufficient.

I prefer to take a much broader view on what drives value by looking at the entire customer experience. We can take those things that drive customer value and break them down into three groups.

There are things that I expect so that having more of these things doesn’t drive more value. When I sit down at a restaurant I expect someone to come over and take my order. Having ten people come over to take my order doesn’t drive any more value.

There are things that are linear so that the more there are, the more value is created. Fast food chains understand this. The quicker the food is delivered, the higher the value proposition.

Lastly, there are those things that truly delight customers. Things that aren’t expected but when they happen, greatly enhance the customer experience. I recently phoned a catalogue company I had dealt with in the past to place an order for some clothing. The phone was answered on the first ring and the representative greeted me by name. The order was quickly placed and using the credit card information from my file I was done in about a minute. No mess, no fuss. Compare that to horror stories we’ve all experienced placing phone orders or ordering on-line on the internet such as waiting on hold, inexperienced customer service staff with no idea about the products they are taking orders for, errors in order entry, up-selling, credit card and shipping information errors.

The company I phoned was LL Bean. They are consistently rated as one of the top customer service organizations in America. What does outstanding customer service mean to them, it means delighted customers and delighted customers means repeat business.

Cheers

Customer Service in Telecommunications?

By Pascal Dennis

Health care horror stories come to late every day.

Infections, mis-medications, even wrong site surgeries are, tragically, common-place.

A health care leader recently said, "Hospitals are no place for a sick person!"

Does any other industry provided this level of customer service?

Here's a candidate - TELECOMMUNICATIONS.

My recent telco experience, trying to upgrade my cell phone, reflects business processes that might've been "designed" the Three Stooges.

I won't bore you with the sorry details. Suffice to say, it should have been an easy two to three step process, with a lead time of a day at most.

TARGET

Lead Time: 1 day

Number of process steps: 3

ACTUAL

Lead time: 10 days & counting

Number of process steps: 20 & counting

Most of the process steps are on the customer's end, of course...

We've all had similar experiences? What's the root cause - in telecommunications and health care?

In chapter 11 of The Remedy, the protagonist, faced with a near catastrophe to a family member, settles on the following root cause:

THE CUSTOMER IS NOT THE CUSTOMER

Health care organizations in the U.S. Canada perform the way they do because the patient is NOT the customer

Usually, the Payer is the customer, be they Medicare or a private insurance provider.

And the Payer's definition of Value, does not coincide with that of the Patient.

Similarly, my telecommunications carrier is one of Canada's biggest providers and until recently had a near monopoly.

They don't care about the customer because, as a monopoly, they didn't need to care.

Now that Canada has a measure of competition in the industry, one can expect their market share to fall.

(Sadly, seems the new industry entrants are, so far, as bad as the incumbent)

What's the lesson for people in the transformation business?

Socrates said, "Know thyself."

Know your customer too - and what they value.

Otherwise, you'll miss the mark badly, and might even generate the customer's disdain.

As for my telco providers - a pox upon their houses!

Pascal