Difference Between Six Sigma and Lean

I was recently asked by a university student what the difference was between Six Sigma and Lean.  In order to make it easier to understand I used the example of a process that generates dozens and dozens of Weekly Reports for a large project management office (PMO).  In each example the starting point is the same.  However depending on which method you chose the outcome can be quite different.

For the sake of example consider the following situation:

• Process: dozens of project managers, project coordinators and other support staff put together detailed reports each week outlining the status of each project within the organization.
• Product: 100 project status reports each containing 100 pieces of data on average
• Total Data Points: 100 x 100 = 10,000
• Effort Required: 4 hours per report
• Total Effort Required: 4 hours x 100 reports = 400 hours
• Total Cost: 400 hours x $50/hr = $20,000 per week or $1,000,000 per year
• Error Rate: 10%
• Average Number of Errors: 10% x 10,000 = 100 errors
• Standard Deviation: 10 errors

Six Sigma Approach:

A team is assembled to study the problem of errors appearing on weekly project reports.  They interview stakeholders throughout the process and discover the following major problems:

1. Inconsistent Training: Initial training when the electronic reports were first introduced was extensive.  However over the past year and a half there have been many new staff who do not always receive the same level of training.
2. Inconsistent Auditing: Some departments have extensive review and feedback processes in place designed to catch errors and report them back to the project teams for correction.  However across the organization the level of auditing and tolerance for errors varies widely.
3. Lack of Restrictions: There are many pieces of information that should follow a standard format.  However the electronic forms do not take advantage of the error catching capability of the software.  As a result project managers are allowed to enter and submit incorrect information.

Using the information collected the team quickly comes up with a list of recommendations.  In addition they install run charts throughout the entire process to track the rate of errors.  Based on this quantitative information they are able to quickly identify the departments where most of the errors occur.  Corrective actions such as re-training and consistent auditing are utilized to reduce the number of errors.  Also they are able to use their tracking data to get approval from senior management to pay for the re-configuration of the on-line reports so that many of the errors are caught at the point of entry.

The Six Sigma Results:

• Effort Required: 3 hours per report
• Total Effort Required: 3 hours x 100 reports = 300 hours
• Total Cost: 400 hours x $50/hr = $15,000 per week or $750,000 per year
• Savings: $250,000 per year
• Error Rate: 2%
• Average Number of Errors: 2% x 10,000 = 20 errors
• Standard Deviation: 2 errors

Lean Approach:

A team is assembled to study the problem of errors appearing on weekly project reports.  They start by talking to the organization's customers to find out how much Value the reports provide.  What they discover after talking to external and internal customers is the following:

1. External Customers: Not surprisingly the team quickly discovers that the external customers, those who purchase the products and services produced by the organization have little or no idea that the firm even has a Project Management Office.  And these customers certainly have no idea what the Weekly Status Reports are or why they would need them.
2. Internal Customers: Perhaps somewhat surprisingly the team learns that even the internal customers who are the beneficiaries of the various projects have little use for the reports.  In fact one manager comments "all I want is the project finished on time, on scope and on budget.  Maybe they should spend less time on those reports and more time managing my projects."
3. Senior Executives: Most surprising of all they learn by talking to the senior executives, the group who everyone agrees asks for the reports, that they only read a very few of the 100 reports that are generated weekly.  When asked why they asked for the reports in the first place one executive explains "well having them make all those reports is how I ensure everything is being properly managed."

Based on the Voice of the Customer the team is forced to acknowledge that the Weekly Status reports add no Value to the firm's customers and are therefore Waste.  They begin work on the Value Stream used to create the reports and classify each task as follows:

1. Type 2 Waste: These tasks can be immediately stopped with no negative impact
2. Type 1 Waste: These tasks require Kaizens or small improvement efforts before further action is taken

After a series of Kaizen events are conducted changes similar to the following examples are made to the process that generates the reports:

1. Reduce Data Points: The number of required data points on each report is reduced from an average of 100 down to less than 10 Key Performance Indicators.
2. Reduce Reports: The number of reports is reduced from 100 down to 25 to track just the projects with a high Impact or a high Risk for the organization.
3. Reduce Auditing: With the simpler reports it is discovered that it is no longer necessary to have an extensive audit system in place.  In addition the senior executives acknowledge that holding people accountable for errors in the reports is not a substitute for good project governance.

The Lean Results:

• Effort Required: 15 minutes per report
• Total Effort Required: 15 minutes x 25 reports = 6 hours, 15 minutes
• Total Cost: 6.25 hours x $50/hr = $312.50 per week or $15,625 per year
• Savings: $984,375 per year
• Error Rate: n/a
• Average Number of Errors: n/a
• Standard Deviation: n/a

Conclusions:

In both instances the organization did the right thing by establishing teams to address the problem with reports.  And in the case of the team that used the Six Sigma approach they also did the right thing by engaging all the internal stakeholders in order to gain consensus on what the root causes of errors were and how best to fix them.  What this example illustrates however is the risk that any process improvement effort takes when they do not listen to the Voice of the Customer in order to properly assess Value and Waste.  By assuming that the reports represented Value the Six Sigma team focused all their energy on reducing errors.  By learning from their customer that the entire process was Waste the Lean team focused their energy on eliminating all but the minimum essential effort required.

The irony is that most often the further one gets in an organization from the paying customer the easier it is to forget about listening to the Voice of the Customer.  The result being the greater the likelihood that any improvement efforts will do little more than optimize Waste.

@leanmind

Low Cost of Capital, Low Chance of Lean

This will be short and sweet.  I was having a conversation with the CEO of a major food producer recently.  We talked about what he needed to do in order to start to turn his company Lean.  During our conversation it became clear that excess inventory, both raw materials and finished goods was a major problem for them.  I explained that one of the intents of Lean is to minimize inventory at which point he made an interesting observation.  He said "we haven't actually worried as much about inventory levels since the cost of borrowing got so cheap."

I thought about that and realized that he was probably right.  When the cost of capital is high it costs companies more money to hold onto inventory and as a result they are more likely to manage that spending.  However when inventory doesn't "cost" much in terms of interest rates there is less incentive to control those costs.  I wonder just what the impact of lower interest rates is on the rate of adoption of Lean principles.

@leanmind

One Reason Not to Ask Your Customer

You have all seen me go on and on about how important it is to listen to the Voice of your Customer in order to define Value for your process.  I even recently simplified things by writing a blog that gave Two reasons to have customers define value.  In this blog I want to give a compelling reason NOT to listen to the voice of your customer.

As a passionate Lean practitioner I am always on the lookout for great examples of organizations applying Lean techniques.  In particular I am forever looking for great ideas to share on how to listen to the Voice of your Customer.  As a result I tend to complete a lot of on-line surveys that I usually find on the back of my (retail) sales receipts.  It is no surprise that folks in retail have a much greater sense of Customer and Value than people who never see their customers.

I see a disturbing trend in these on-line surveys, however and I am not sure if it is Sales or Marketing or both who are to blame.  But I certainly hope there are no Lean consultants behind this idea.  If there are then it is time to switch firms....or just read the first 28 pages of the book "Lean Thinking" by Womack and Jones.

The problem is this: most on-line customer surveys are poorly disguised tricks to solicit personal contact information from customers that will undoubtedly be used at a later date to spam respondents' Inboxes with deals and promotions.  This is wrong, wrong, wrong!

First of all how dare you waste your customers' time by making them go through a tedious process to set up a "feedback" account with your firm complete with mandatory fields and requests for everything but bank account numbers and PINs?  What can you possibly need that information for anyway?  And those of you in Marketing about to lecture me on customer profiling leave the process improvement to those who care about adding Value and go back to ordering the fancy display booth and brochures for your next trade show.

Second of all what's with the locked list of 20 attributes asking me to rank my "customer experience" on a scale of 0 to 10?"  Again that's great if you are the head of Marketing and you are trying to justify your existence by tracking "quantifiable and repeatable" metrics that no one pays attention to.  And how can you possibly know the only 20 attributes that completely define your product or service anyway?

Finally don't insult your customer by telling them that by completing this bogus survey they'll be entered into some random contest to win a trip to a fake holiday destination.  First of all everyone knows that no one ever wins those things.  And second of all....well the fact that no one ever wins is enough.

If you are serious about listening to the Voice of your Customer and you are going to use on-line surveys then do not farm it out to a 3rd party marketing group.  Do it the old fashioned way.  Pay your customers for their valuable time with a 5% off coupon.  Don't make them give personal contact information if they choose not to.  And allow them to be as open ended in their feedback as possible.  The following two simple questions with unlimited room to write free-form responses before printing off a 5% off coupon will suffice:

1. Please describe how our organization adds Value to you.
2. Please describe all aspects of your experience with us you feel is Waste.

To be sure it will take more time to sift through the written responses.  But your organization will have a much more objecive description of what you do that adds Value.  And you will have customers much more willing to help you along your Lean journey.

@leanmind

Two Reasons To Have Customer Define Value

Everyone who studies Lean knows that the customer defines Value, at least they should know that.  As for how many actually involve the customer?  Well that depends.  In a recent on-line survey that we conducted 100% of respondents reported that they directly involve their customers in Kaizen events "always" or "most of the time."  Yet in a subsequent on-line poll asking how people involve their customers (surveys, interviews, etc.) only a tenth the number of people responded.  That leads us to believe our suspicion that most do not involve the customer.

Well for those of you who do we salute you.  Keep up the good work.  For those of you who do not the good news is you are not alone.  In fact you are part of the vast majority.  And for those of you feeling special let me emphasize that "reading your customer's minds" is not the same as involving your customers; far from it.

So why involve the customers at all?  Why not just get an enthusiastic group of employees together, assign them to an important area within your organization, give them some tips on how to conduct a Kaizen, or better yet hire an expert to facilitate the exercise, and go to it?  Why bother with customers at all?  I mean really what do customers know about what goes on in the depths of your organization anyway?  And all they'd probably do is question most of the things you do and just kill everyone's buzz (yes I was born in the 60s).

Reason 1: Maximize your Return on Investment

Let's face it, making improvements requires time and energy from those involved.  And both of those cost money which means you are making an investment.  Mind you if done properly an improvement effort is highly enjoyable and satisfying for all involved.  But all improvement events require a certain level of investment to be successful.

So if you are going to make the investment into an improvement exercise you owe it to yourself and those putting in the effort to ensure that what you fix will actually improve things.  And who better to determine whether things are "better" than your customers.  Sure it's important that staff feel loved and appreciated and comfortable and safe and all those good things.  But if you are improving all those things yet doing nothing to add more Value to your customers then you are wasting your time, your energy and your money.

Reason 2: Reduce Resistance to Change

Let's also face it, everyone embraces change...for everyone but themselves.  Not too many people in an organization will say to themselves "you know 99% of what I do day in and day out adds no Value to our customers."  As human beings we have evolved amazing abilities to justify what we do well to others and ourselves.  Because we are good at something it must add Value.  Because we have always done something it must add Value.  Because we enjoy doing something it must add Value.  And so on.

So really the only way a group can truly tackle the Waste that is most of what they do is to have an objective 3rd party tell them that it's Waste in the first place.  I have yet to find a Customer Help Desk that rallies behind the motto "Everything we do is Waste so let's eliminate everything!"  Or a maintenance department that aggressively attacks every repair job and every preventive maintenance activity with the intent to eliminate everything.  And so on throughout every organization.  It is only in the cold bright light of the Voice of the Customer that we truly see the vast quantities of Waste that blanket most everything we touch.

So for those of you just starting out on your Lean journey, or those of you who are months or years into it and starting to get that uncomfortable feeling of "was it all worth it," I can't emphasize enough the importance of interacting directly with your customers, your clients, your patients, your .... well whoever it is who pays your bills.  You will be amazed, crushed, astounded and eternally grateful that you did.

@leanmind

Kaizen without customer is Waste (again)

I would like to share yet another example of an improvement effort (Kaizen) that did not involve the customer and turned out to be complete Waste.  I had the privilege of working for a client in the medical devices business.  Without giving too much away they have a technology that allows a patient to wear a tiny mobile device that reads every heart beat and sends it back in real time to a central monitoring station.  After a week or two of collecting data my client then provides the patent's doctor with days worth of detailed data that can then be used to make accurate diagnoses.

One particular engagement with this client involved their Help Desk.  These are the people who answer the phones 24/7 whenever a patient has a problem that needs to be resolved.  Those of you who read my blogs will immediately recognize a Lean gold mine when you read it.  Sadly this was not the case at first for this client.  For them the Help Desk was simply a part of their process.  As opposed to a continual feed of invaluable customer feedback on Value and Waste.

But as I said we were not there to mine this data but rather to help cut costs for the company.  And that meant understanding why the calls were coming in, prioritizing the most frequent causes and eliminate them in order to reduce call volumes.  I'm not saying I'm necessarily proud of everything I have done in the past.  But my heart is always in the right place.

It did not take us long to put call logs in place that allowed Help Desk operators to simply tick off the root cause for each inbound call on a check list (I love check lists) they helped us create.  After a week or so we had thousands of data points and immediately we saw that "Leads not sticking" accounted for 19% or almost one in five calls.

We sat down with some of the people in the call centre and asked for help interpreting the results.  Not surprisingly they were not surprised.  "Of course that's our number one reason for calls.  Everyone thinks the wet wipes are to clean their skin."  I should mention that when the kit shows up at the patent's home they are required to stick four leads to their chest and abdomen and then attach tiny wires.  It turns out included in the kit is a small square packet that looks exactly like a wet wipe you would get when you order chicken wings at a greasy restaurant.  Not surprisingly the first thing patients do is open the wet wipe and clean their skin before adhering the leads.  Makes sense.

Unless you actually read the instructions and find out that the wet wipe is actually a solvent to help clean off the glue from the leads after the monitoring is finished and you are removing the leads.  So wiping your skin first has the effect of making the leads not stick.  Hence the 1 in 5 calls to the Help Desk complaining that the leads are not sticking.

Not being medical experts ourselves we respectfully asked the question "....so why do you include the wet wipes in the kit in the first place if this is what happens?"

We were told that the folks at the Help Desk (who listen to the Voice of the Customer all day long) had been telling the folks in Operations to please take the wet wipes out of the kit because of this exact problem.  They didn't even need a call log to know this.  But they were repeatedly told by the Operations folks that the wet wipes were necessary to help patients clean off the glue residue after the testing was finished.

Again not being medical experts we respectfully asked "....well they have a point, don't they?  I mean people probably would want to have a way to clean the glue off after they removed the leads."

And here again we were told by those who listen to the Voice of the Customer all day and all night long that most patients have already used the wet wipe to make the leads not stick in the first place so they have nothing to clean off the glue anyway.  If someone does call the Help Desk with this complaint all they do is recommend the patients use a wash cloth and warm soapy water which is just as effective at removing the glue.

We took our information to the VP Operations who was responsible for both areas within the company and explained our findings.  He brought in the heads of both areas and put the idea in front of them.  After a brief discussion the decision was made to take the wet wipes out of the patient kits starting the next day.

I don't have to tell you the effects were immediate.  Fortunately for us as consultants there was a very short cycle time between the time the kits were packed and the patients received them.  That meant that within three to four days we saw a dramatic drop in inbound calls - almost 20% to be exact.  And you guessed it almost all the calls regarding leads not sticking immediately went away.

The lesson is this: at some point the company made the decision to add wet wipes to the patient packages because it "seemed" like something the patients would Value.  And from the point of view of the company this made sense.  However they did not listen to the Voice of the Customer even when the customer called them hundreds of times a week to verify whether or not they had added any Value or Waste.  And even when one in five calls from customers told them that they had added Waste they still did not listen.  They took their own perception of Value and Waste over the opinion of their customers.

This is a lesson in just how difficult it is to overcome internal perceptions and let go of everything you assume is Value.  I recently concluded an online poll where 51% of people responded that the customer is the one who decides whether a task is Value or Waste and just 1 in 10 felt the front line staff could make the distinction.  And in a related poll I am currently conducting I ask how many improvement initiatives directly involve the customer so far 100% of respondents say they do just this. 

Now I find it hard to believe that 100% of the time people directly involve their customers, especially given I can count on one hand the number of times I have seen this done effectively in practice.  And to demonstrate this I have a 3rd poll where I ask people how they engage their customers for feedback.  Someone please explain to me why after two weeks of having the 3rd poll open only a tenth the number of people have responded as answered the first.

Even if you think you directly involve your customers because you think you know how your customers feel, do yourself a favour and ask anyway.  I guarantee that you will be shocked, amazed, and ultimately far more successful if you do.

@leanmind

Kaizen - Customer = Waste

Now that I have your attention I'd like to describe a situation where I personally observed a well-meaning Kaizen that did not involve the customer.  And I'd like to show you how it turned out to be a complete waste of time for all involved.

For those of you not familiar with the selling process that most implementation based consultants go through it generally involves something called an Assessment or Analysis.  This is an exercise that the consulting firm performs, usually at their own expense, intended to scope out the project and convince the client that the firm is up for the challenge.  Assessments can take anywhere from a few days to a few weeks to complete depending on the size of the potential engagement.  And at the end of the exercise it is obviously the hope of the consulting firm that they present a compelling enough case to convince the client to buy the project.

The firm where I first worked has a rigorous approach to how they performed a two-week Analysis.  In fact they had the process down to a science where each hour of each day was carefully scripted out.  And the only decision the lead analyst had to make was where to schedule the various studies.

The other thing you need to know about these assessments is they are gruling for the consultants involved.  In fact if a consultant does not work a minimum of 20 hour days conducting and writing up their studies then the firm doesn't feel that the analyst is doing their job properly.  I actually had a partner explain to me that a big part of the assessment is demonstrating to the potential client "just how hard we work."  I noted that the partner usually only popped in and out during the day to see how the assessment was going.

So back to the Kaizen.  As I mentioned a huge part of the effort for the consultants was the time it took usually back at some dingy hotel room to manually write up their studies.  An 8 to 10 hour study could take half as long again to write up.  And if the analyst was feeling particularly grouchy they could make you re-do much or all of your work again.  This colosal waste of time was definitely not lost on bright young minds fully capable of generating masterpieces on Excel or PowerPoint.

That was how the studies were being done when I left the firm almost 10 years ago - long hours spent manually writing out the studies and filling in the graphs with coloured tape.  Then about 4 years ago I had the opportunity to work with a spin-off firm that was basically a pale shadow to the firm where I had originally started.  One of the things I noticed on my first analysis was the fact that spreadsheets and colour printers were now being used to write up the studies.  Apparently this was a process improvement (Kaizen) that the original firm had finally given in to.

I was happy to see that even a process improvement firm could look at its own process and make improvements.  And my immediate assumption was that the length of the assessments must be similarly cut in half.  My mistake.  Apparently all the firms had done was take the additional time available to the consultants working 20 hours a day and assigned additional studies to be completed.  That meant it still took two weeks to compile the findings.  And in the final presentation there were almost twice as many studies taped up around the board room table.

So what's the problem?

Well those of you who follow my blogs and tweets will know that I am passionate about the importance of starting every Lean exercise with having the customer define value.  My point being you may have your own internal perceptions of what adds value and what does not.  But at the end of the day the only person's perceptions that matter are those of the customer.  Despite this I still read blogs and watch pod casts from Lean "experts" who rarely if ever even mention their client's customers.

Take the consulting firm for who I used to work and for whom I have to thank for bringing me into the world of management consulting.  They were right in looking at their own internal process to find ways to reduce waste and add more value.  However by ignoring their customer, they automatically assumed that writing up studies was somehow adding value.  They came up with a method change to reduce the time required to complete this task.  However rather than leaving the number of studies the same and reducing the time they took to complete these highly intrusive assessments, they simply maintained the two week cycle time and piled on more colourful graphs to show at the end.  That's like Toyota designing a clever way to reduce inventories of parts in one location, only to store more parts in the freed up space.

What's even more interesting is I noted that the final presentations to the clients often only focused on a small percentage of the completed studies.  This was because there were simply too many to go through in the time allowed by the busy clients.  The untouched studies were waste in their purest form.

As an interesting aside I had the opportunity to conduct a full assessment at a potential client in just two days.  We only had two days because that was all the interruption (waste) the client would allow.  One other consultant and myself were able to conduct multiple simultanious studies covering all critical aspects of their process.  We were then able to write up all the studies on computers and give a full presentation to the senior executives the afternoon to the the second day.  The point being the client was telling us that to him our studies were waste.  So we utilized the results of the previous Kaizen to shorten our cycle time and minimize as much waste as possible.  I am also happy to report that I remain an advisor to that client to this day.

@leanmind

You don't have to do Lean....

Yes it's true.  In fact you don't have to do anything.  Not...One...Thing.  As long as everything is perfect in your organization and you have and never will have any competitors.  Oh and if you also have unlimited resources then stop fretting about Lean or Value or Waste or anything else for that matter.  Just sit back and bask in the unparalleled good fortune that is your life.

I do a lot of speaking engagements and spend a lot of time corresponding with many many people about Lean and the challenges associated with making changes within organizations.  I am very fortunate in this regard because that means I get to spend a lot of my time talking about something I am very passionate about and in which I strongly believe.  And when I do speak to people, especially people not yet ready to start their Lean journey, there are often concerns about opening up their processes to let their customers decide what adds value and what is waste.  And believe me I can understand this concern.  I have personally lived it in my own firm where before we started our Lean journey we added Value to our customers less than 6% of the time.  I get it.

However it was during a spirited exchange this week with an individual for whom I have a high degree of respect that something occured to me.  He was in full agreement with the notion of needing to improve his processes.  However he was having a difficult time accepting the fact that his customers would truly appreciate all the subtlies of what his organizatoin did.  And as a result his customers would not be the best people to talk to when separating the waste from the value.

We corresponded back and forth a few times exchanging thoughts and ideas.  And then I remembered something.  At the end of the day if you want to reduce the cost and cycle time of any process there are only two things you can do:

1. Remove steps from your process
2. Reduce the time it takes to complete steps in your process

It doesn't matter if you're Peter Drucker, Taiichi Ohno or Jack Welch.  At the end of the day that's all there is.  So if you don't want to leave it up to your customer to decide what to change then lock the front doors, draw the curtains, and start removing steps and reducing time as you see fit.  And you won't be alone.  This is how all non-Lean improvement efforts are conducted.  After all we work here so we know best, right?  Who cares what the customer thinks.  It's our process and if they don't like what comes out then they can just.... well you get the picture.

So back to the idea of whether or not your customer knows what constitutes value or not.  Where people get hung up when I talk to them is on the notion of Waste.  Immediately everyone thinks (and sometimes says) "oh so it's waste for us to do quality checks?  It's waste for us to move material around the shop?  It's waste for us to test software before putting it into production?  Ok we'll stop doing it.  So there!"  And then they usually cross their arms, sit back and assume an "aha! Gocha there smarty suit-wearing guy" expression on their face.  At least the ones with enough respect to show me how they really feel do that.

But what they're missing is that Lean divides waste (or muda) into the following two categories for just this reason:

1. Type 1: Activities that add no value to your customers but can not be discontinued using existing processes.
2. Type 2: Activities that add no value to your customers and can be stopped immediately.

And what's more the amazig thing is that really the only change in mindset that is required is the acceptance that Customers define value and waste.  Once you and your organization accept that you will find a virtually bottomless pit of opportunities to fix.  How great is that?  I mean seriously.

@leanmind

Lean for Safety: Labour Day Post

Monday was Labour Day for many people around the world.  A day to celebrate the achievements of the labour movement as well as to honour those workers injured or killed at work.  I thought it appropriate to describe an engagement where I saw first hand the astonishing effects of applying Lean principles to reduce workplace accidents.

I had been working at this particular client, a global food processor, for over a year helping them increase throughput and quality while at the same time dramatically reducing costs and cycle times.  Things were going well and my client was very happy with his results.  Then one day I was sitting in his office and he shared with me his personal Balanced Scorecard against which he was measured by corporate head office.  While most of the indicators were tracking very well, he pointed out their Total Incident Rate or TIR number which was one of the worst of any plant in the company.  This number is a relative measure of plant safety that compares total number of work-related injuries and illnesses to total hours worked by employees.

"Have you ever done any work in improving health and safety?" he asked me, still frowning at his scorecard.

I didn't even have to think about my response.  "No, everything we do has to do with improving processes and implementing effective management systems."  Then I added "I'm sure there are lots of safety experts out there who could help you out."

He sat for a while thinking.  Then he said "No we need more than some safety lectures to fix this.  We need a completely different approach.  I want you to take your approach to processes and management systems and apply them to the safety problem we have here.  I think it could work."

Now every consultant will tell you that the first answer you always give when a client, especially a happy client, asks you for something is "yes, right away."  But I sensed this was completely different.  I knew I was out of my element and the last thing I wanted to do was mislead anyone, especially when it came to the safety of employees.

So instead I gave the him the second answer all consultants learn to give in these situations.  "Let me talk to my partners and get back to you" I told him.  He seemed satisfied with that response so after a while I left his office.

I did in fact discuss it with my partners and at first they were as reluctant as I was and for all the same reasons.  In the end after much internal deliberation and cajoling by my client we reluctantly decided to do the project.  However we made a point of clarifying for my client that in no way, shape or form were we going to attempt to attach any financial results to the reduction of workplace accidents.

Since this challenge was unlike any we had faced before I ended up being directly involved in the strategy and approach for our project team.  We decided to start, as we always did, with the Subject Matter Expert who in this case turned out to be the very frustrated Health & Safety manager for this particular facility.  It was he who told us about something called the Bird Triangle of safety.  For those of you like me who have never heard of this the idea is that Health & Safety can be modeled (more or less) using the following process:

1. Unsafe Situation
2. Near miss
3. Minor Accident
4. Lost Time Accident
5. Fatality 

Nothing astonishing there.  But what is amazing about this process is that it turns out the ratio from one step to the next is consistent, at least for a given industry.

The next question was how to use Lean and management operating systems to "improve" this process.  In fact what we did was figure out how to use Lean to make the process worse.  Or in other words reduce the flow of employees.  Using the standard conversion ratios from one step to the next we calculated the number of unsafe conditions the company was "allowed" in order to achieve their target T.I.R..  Doing the math based on the number of employees in each area it worked out to between 1 and 2 unsafe condition per area.  For ease of communication and to err on the safe side the target was set at 1.

To start the reverse-improvement of the process we had the Health & Safety manager conduct twice daily walk-throughs in all areas of the plant looking for unsafe conditions.  For the first few days the inspections revealed double-digit unsafe conditions.  These ranged from minor examples such as hoses left lying in walkways up to and including guards left off machinery and employees not wearing proper safety equipment.

Every morning at the Operations meeting the inspection sheets were presented to each supervisor.  And during the day the supervisors would make it part of their routine to address the unsafe conditions and ensure that employees were aware of what was wrong.

After a couple of weeks the number of unsafe conditions started to fall dramatically as people started to get the message and see the Waste.  So at that point the newly empowered Health & Safety manager raised the bar.  He started reporting situations that had existed for so long that no one even noticed them anymore.  Of course the supervisors we not happy about this.  But the mandate to stick to the program had come from the top and they all new that their safety numbers were being reviewed by our client on a daily basis along with the quality and productivity results.

This continued for a few weeks during what was historically the worst time of year for this facility in terms of accidents.  They were at the height of their seasonal harvest which meant that they had on average three times the usual number of employees to handle the increased volumes.  Most of these people were seasonal employees who had little experience within the facility.  As such they were most prone to getting hurt.

What happened when the monthly numbers came in astounded even our project team.  The previous August the facility had reported a total nine lost time injuries.  After just six weeks of "un-leaning" their safety process they hadn't had a single worker leave the property as a result of injury.

Due to the weighted nature of the T.I.R. calculation one month was not enough to get the company into compliance in terms of their goals.  But the results for August were enough for head office to send a team of Health and Safety auditors to the plant to ensure that everything was being reported properly.  It seems no one could believe the results.

The program continued in that facility and by the end of the fiscal year they received global recognition for their turnaround from worst to one of the best.  While definitely not a typical Lean approach to process improvement, this remains for me one of the best examples of what an organization can accomplish when Waste (or safety) is made to stand out like a sore thumb.

Lean in a Week!

In the true spirit of continuous improvement I am ever so proud to share with you an even lean-er version of my original blog entitled First 10 steps to lean.  I would first like to thank the creaters of Twitter and their 140 character limit on tweets.  And I should also thank the Romans who invented the five day work week (I'm pretty sure they did - Google it).  As a result of these two parameters I recently came up with an even more precics "5 steps to Lean."  Or what I like to refer to as "Lean in a Week."

1. Monday Assignment: Set yourself a goal of figuring out who your customer is. Hint: customers exchange money for #Value
2. Tuesday's Assignment: Pretend to call your customer to ask them what adds #Value. Hint: its not what YOU think #Value 
3. Wednesday's Assignment: List every step to create your product/service. Hint: account for EVERYONE within your organization
4. Thursday's Assignment: Take the #Waste steps you don't need and STOP doing them Hint: This is called Type 2 Muda
5. Friday's Assignment: Take the remaining #Waste steps and assign small groups to eliminate them Hint: This is called #Kaizen 

 Good luck!

Email Response to Sceptical Olympic Coach

Try to imagine my excitement when I received my first response from a real live Olympic coach wondering what my LeanOnMe consulting services were all about.  I won't identify the coach but lets just say they and their athlete provided some of the proudest memories for me of the 2012 Olympics.

Their response in part read as follows...

"I like the idea of applying a more stringent, and proven methodology to the entire Athletics Canada federation, but I have absolutely no say in what they do....if you can give me a more specific idea of what you envision I can run it by our team and see what everybody thinks.  Right now we have LOTS of people coming forward with ideas.  But we don't want to change things too dramatically since what we are doing seems to be working.  Maybe we can talk next week?  Let me know."

I was struck by a few things they said.  The first was that they expressed a certain level of frustration at their lack of say in terms of what Athletics Canada federation does.  I couldn't help but think of countless employees and front line managers with whom I have worked who said the same thing about their senior management.

I was also a little amused at the notion that they have "LOTS of people coming forward with ideas."  And here I thought I was the only one.  Who knew?  But I wonder how many Lean consultants are knocking on their door.

Finally I was reminded as I always am of the importance of being respectful to my clients.  It is easy for outsiders such as consultants to want to focus on the road to improvement.  But in any organization it is of utmost importance to have the buy-in of everyone involved.

Keep in mind this is still hot off the press.  But I will share with you my response which was sent just six minutes after I opened their email to me:

"...what I am proposing is basically taking the principles of the Toyota Production System or “Lean Manufacturing” and applying them to competing in sports.  As I’m sure you can appreciate it’s not something you can easily describe in an email so I will definitely take you up on your offer for a phone call next week.  But put as simply as possible you start with what the customer, in this case the taxpayers, value.  Then you analyze everything you do that adds value and try to do more of that.  And at the same time you look at everything you do that doesn’t add value and you try to do less of that.

It sounds overly simplistic and I always resist trying to give specific examples, especially when it comes to Value Streams where I am not an expert such as competing for Olympic medals.  But the first step would be to really understand what it is that the customer/taxpayers value from the Olympics.  I know I can speak from personal experience and say that I value the following things (out of many):

• Achieving a personal best
• Winning a medal
• Being very personable in interviews
• Winning with grace and style
• Coming to my kids’ school so they can meet a real Olympic athlete
• …and so on

 ...I suppose the real strength of Lean is it takes all subjectiveness out of process improvement by letting the customer define value, and the subject matter experts make the improvements.

Bottom line is I am willing to offer my LeanOnMe services free of charge to you, or any Canadian Olympic athlete’s team to see if I can help.  That consists of two days per month in person as scheduled by you.  And outside of that access to me as required via unlimited emails and phone calls.

Like you I believe passionately in what I do.  I care deeply about my clients.  And I take the greatest pride imaginable when they achieve more than they ever thought possible.  And I don’t need you to have any influence what-so-ever over Sports Canada.  All I need from you is an open mind, a rabid passion to succeed, and a willingness to be a leader.  Check.  Check.  Check.

I am asking for half an hour of your time to talk on the phone or grab a coffee....Thanks again for responding to me.  And again thank you for what was definitely my most memorable moment of the 2012 Olympics."

Be The "Best Manager Ever!!" In Just 3 Steps

I recently read an article on “Bad Managers” posted by the Harvard Business Review (http://blogs.hbr.org/cs/2012/08/are_you_sure_youre_not_a_bad_b.html?awid=5579446836070843808-3271) It definitely seems to be well researched and the conclusions appear to be comprehensive.  Although I am always suspicious when the number of conclusions reached using the Scientific Method exactly matches the number of fingers on the scientist.  But I understand it makes for great copy.

Since the article does not offer any practical advice for a bad boss to address these “10” deficiencies I thought I would add my two cents worth here.  Based on my experience in helping a “large number” of bosses become better everything the article talks about can be improved (perhaps not fixed) by improving communication.  To do this I encourage every boss to follow these three steps:

1. Every Friday have each of your direct reports send you their Weekly Plan for the following week.  Don’t get hung up on the format (an Excel spreadsheet usually works best).  DO NOT let them simply print out their Outlook calendar.  This encourages everyone to think ahead about what they need to accomplish.  And it gives you an idea of where your people are spending the company’s time.  Trust me, you will be shocked.
2. Set up Daily Planner Review Meetings with each of your direct reports.  These should be held at the same time each day, preferable in the morning.  And they should rarely (never) be missed.  Once the reviews get going they should last no more than 5 – 10 minutes.
3. Looking at a printed copy of the employee’s Weekly Plan ask them the following question: “Do you have everything you need to be successful today?”  Then listen to their response.  This is their opportunity to highlight any issues that have or may come up (and there is always something).  And it is your opportunity to help them resolve those issues – this is called “managing.” 

That's it.  These are the three practical steps that will drive effectiveness (reduce Waste) within your group.  What will also happen at these meetings is employees will have an opportunity to bring up anything else that may be a concern for them.  Any (good) manager knows that it is a lot easier to address small concerns before they become big concerns.

  

I wish I had seven other points to round out my list but that’s really all there is to it.  I cannot stress enough the importance of not cancelling these meetings.  Ironically something I often see is a manager start to take the increase in performance (and employee satisfaction) for granted.  And the next thing you know they are missing their Daily meetings with their direct reports.  If you do start down this path to more effective management be forewarned that it is not a “quick fix” or a “flavour of the month.”

I should also address the elephant in the room which is my least favourite term “Micromanagement.”  If you are reading this with your arms crossed and a knowing sneer on your face you are probably thinking to yourself "I don't need to talk to my employees.  They know what to do and when they have a problem they can come find me." If this describes you then I strongly encourage you to NOT try this with your direct reports.  In fact I strongly encourage you to NOT have any direct reports at all.  Please.

To me (and I think most people) micromanaging involves standing next to someone and repeatedly asking them “Are you done yet?  Are you done yet?  Are you done yet?” and so on.  What I am advocating is NOT that.  If you open your mind and let the concepts flow in you will realize that by doing the three things above you are actually giving your employees the greatest gift of all…your time.”

When you are explaining this to your direct reports, especially the experienced ones who “know what they need to do,” be sure to emphasize that you need this information so you can help them (not the other way around).  You are simply asking them for their plan.  Then all you are doing is ensuring that they have everything they need from you.  If they do have everything then they are free to “have a nice day.”  If there’s something you can do for them, that’s all you want to know.

@leanmind

Lean Olympics

Let me begin by saying that, as the father of a child who competes at the world level in their chosen discipline, I have some idea of what it takes to get there and stay there.  I don't know who said it first but I believe it holds true that to compete and succeed at the world level in any discipline one needs an extraordinary amount of each of the following:

1. Natural ability
2. Hard work
3. Support

The first two are self-explanatory, at least for my purposes.  And I make the assumption that when it comes to world-class athletes each and every one of them has these two elements in ample supply.  As a Lean Lean management consultant I am interested in the third requirement.

Those not familiar with Lean Manufacturing will undoubtedly have heard of Toyota.  The concepts of Lean Manufacturing were first developed by Toyota and are largely responsible for allowing the company to grow to the world leader that it is today.  In extremely simplistic terms Lean involves the following:

Ask your customer what they value.  Then spend more time adding value, and less time generating waste.

This is very easy to say, extremely difficult to do.

As a passionate practitioner of Lean I am constantly looking for creative ways where Lean methodologies can be applied to maximize value and minimize waste.  In fact I even conducted a Lean initiative on my own management consulting company.  This soul-crushing journey of self-discovery resulted in the development of a suite of products that allow us to deliver more value than our previous products at about a tenth of the cost to our customers.

So what does Lean have to do with our Canadian Olympic athletes? Well it occurred to me that there might be an opportunity to apply Lean thinking to elite sports.  In particular what excites me is the opportunity to work with people who are very likely more motivated to improve than anyone else on the planet.  Lean can shorten software development life cycles from months to weeks, manufacturing processes from weeks to days, and emergency room wait time from hours to minutes.  Why then can't these same methodologies be used to shave precious minutes, seconds, centimeters, meters, and even point deductions off of personal bests? 

The answer is "I don't know why not."  But I'm willing to try.  Which is why I am making the following offer to any Canadian Olympic athlete from the 2010 or 2012 games:

I will provide, free of charge, my LeanOnMe services for as long as the athlete sees value.

This includes 2 days per month working directly with the athlete and their coaching team to apply Lean techniques.  Plus unlimited emails, texts and phone calls to provide support and guidance when it is needed.  I welcome all inquiries.

First (and only) 10 Steps to Lean

There are as many ways to start your Lean journey as there are blogs on the internet, business books on the shelf, and experts with opinions.  Not to get left behind I have added my 2 cents worth to the conversation.  The following are 10 basic guidelines, in my opinion, for starting your Lean journey as well as some things to watch out for along the way.

Step One: Find your customer

Any Lean journey must start with the customer.  To people not familiar with Lean this will seem shockingly obvious.  However this is often the last place people look to when trying to improve their organizations.  And sadly most never talk to the customer at all.

In some people's defence it is not always obvious who the customer is.  Anyone who works in retail will have a hard time understanding this delima.  However when you are supporting complex IT systems deep in the basement of an insurance company it is easy to forget that the customers are the people purchasing the policies.  The acid test for identifying a customer is as follows:

"Customers pay us money for our products and services"

Consider the following examples of what I mean by this:

• Students in a classroom are not customers - it's the taxpayer or whoever is paying the tuition
• The department receiving internal project management services is not the customer - it's the people buying the company's products and services
• The department receiving the new software upgrade of internal systems is not the customer - it's the people buying the company's products and services
• The employee receiving feedback on a standard Human Resources form is not the customer - it's the people buying the company's products and services
• The production department receiving the test results from Quality Assurance is not the customer - it's the people buying the company's products and services

.....you get the idea

Step Two: Have your customer define Value

Again to anyone outside of the Organizational Improvement industry this will seem very obvious.  But I will guarantee you that right now there are thousands of Value Stream Maps, complete with Fortune 100 consulting firm logos, proudly posted on boardroom walls that classify tasks such as the following as Value-Add activities:

• Update project schedule
• Fill in status report
• Perform quality inspection
• Set up CNC machine
• Back up critical data
• Perform preventative maintenance

(I'm not kidding, look for yourself if you do not believe me).  And you and I both know there isn't a soul on the planet who ever gave a single thought to the person replacing oil filters on snow ploughs each time they signed the cheque for their property taxes.

The right way to have a customer assign Value is to ask them.  This can be as simple as a face-to-face interview where you ask them "can you please tell me some things you Value about our product or service?"  To more complex surveys designed to have customers rank the relative Importance (Value) of as many attributes (Price, Quality, Appearance, etc.) of your product or service as you can. 

Do not skip these steps.  Everything else is a shot in the dark if you do.

Step Three: Value Stream Mapping

This is the point where most "improvement" gurus love to jump in.  In fact business schools churn out thousands of eager young professionals every month who live for this stuff.  And for good reason - its fun.  The idea is to capture on as big a sheet of paper as possible every single task that is performed within your organization to ultimately deliver your product or service.  The key is don't be stingy.  Put everything on there - preferable in little boxes connected by arrows representing the Flow of things.

What is critical is that you capture EVERY TASK from as far up the Value Stream as possible all the way to the customer.  Here again Lean initiatives usually make the mistake of focusing on a tiny subset of the overall Value Chain.  The first risk here is you immediately lose sight of, or never even think of who your customer is.  And the second risk is ..... well never mind any other risk.  That one is bad enough.

The acid test for knowing whether your Value Stream is complete is that everyone in the organization is accounted for.  That includes not only the people in Sales and Marketing, but also the people in Finance, Admin, HR, Facilities, IT.....everyone.  If you find you are unsure how some tasks fit into the overall Value Stream Map don't worry, that means you are doing it correctly.  Just write them down.

Step Four: Task Evaluation

As with Step Three, if you have, like so many others, decided to skip Steps One and Two then stop now and go back.  For unless you have found your (paying) customer and you thoroughly understand what it is they Value about your products and services there is NO WAY for you to properly evaluate each task within your Value Stream Map.

What you want to do is consider each and every task in your Value Stream Map and classify it into one of the following two categories:

1. Value Added
2. Waste

Until you and your organization truly embrace the concept of Value I find the easiest way to do this is pretend to phone your customer and ask them questions like the following:

• "Do you Value the fact that we hold daily status meetings?"
• "Do you Value the fact that we unload material from trucks that deliver things to our back door?"
• "Do you Value the fact that we spend a lot of time moving things from one area within our facility to another?"
• "Do you Value the fact that we key your order into our complicated computer system?"
• "Do you Value the fact that we test our software in multiple lower environments?"
• "Do you Value the fact that we spend hours each day responding to emails?"

And so on.  As you can see you will find almost nothing you do actually adds Value for your customer.  And trust me, this is a good thing.

It is important at this stage to keep in mind a few common pitfalls that could cause you to incorrectly classifying tasks as Value that are actually Waste:

1. A task is not Value add to your customer just because you are good at it
2. A task is not Value add to your customer just because you've always done it
3. A task is not Value add to your customer just because you like doing it
4. A task is not Value add to your customer just because you can't figure out how to stop doing it

Organizational improvement can not be personal.  And unfortunately almost all improvement efforts get caught in this trap which is why I can not emphasize enough the importance of Steps One and Two.

That being said there will undoubetly be a handful of things you do that will add Value for your customers.  To identify Value I like to use the following general rule:

Customers Value tasks that get them what they want or need, but they can't or won't do

For example:

• Helping me select the right options for my insurance policy (not processing the paperwork)
• Selecting the right components for my inground sprinkler system (not stocking the DIY store shelves)
• Writing software that allows me to check Twitter on my phone (not testing and debugging the code to fix their own mistakes)
• Cleaning the windows outside my highrise office (not setting up the ropes)

In each case above it is easy to imagine your hypothetical customer saying "why yes, thanks for asking.  I absolutely find Value in you doing those things for me."

Step Five: Identify Opportunities to improve

At long last we are getting to the good part.  But hopefully you can see how critical it was to carefully go through the previous four steps in order to know what to improve.  For without knowing what you do that adds Value for your customers, and therefor what you do that is Waste, it would be impossible to consider the following guidelines for identifying Improvement Opportunities.  The rule for Identifying Opportunities is to find ideas that do one or more of the following:

1. Optimize Value
2. Minimize Waste

As with any idea generating or brainstorming exercise the key here is to identify as many ideas as possible.  The the best way to do that is to include as many people as possible without putting any limits on their imagination.  You will be be amazed at what they will come up with when they truly accept the concepts of Waste and Value as defined by the customer.  All of a sudden you are not trying to eliminate a few steps here and there.  Rather you are looking to gouge out (or minimize) huge chunks of your Value Stream.

Step Six:  Prioritize Opportunities to improve

Things are pretty basic here.  You want to consider the dozens and dozens (hundreds) of ideas that people have come up with and start to figure out what you want to do first. In general you want to evaluate your Opportunities based on the following:

1. Ease of Implementation
2. Impact of Change

An improvement with relatively little impact on Waste or Value might make sense if it is straightforward to implement.  Likewise a change that is more challenging might make sense if the Impact is great.

Step Seven: Implement Changes

There are excellent improvement techniques such as Kaizen and 5S that help you do this.  But no matter which methodology you select the key is to involve the people directly associated with the process.  I can not stress this enough.  I like to refer to the following mathematical forumula to demonstrate the power of a group:

1 + 1 = 5 

Or to put it another way, one person can accomplish the work of one person.  But two or more people working together can accomplish more than the sum of their parts.  Ok maybe its not so scientific but it works.

Step Eight: Measure your results

This aspect of Organizational Change could (and probably will) fill its own blog.  For these purposes it is important just to say that as part of the process of selecting which changes to implement it is just as important to quantitatively measure your results.  This should NEVER require the use of a complex computer system.  In fact it is usually best to use a simple white board or log sheet.  The key is for the measurement to be simple and highly visible.

Step Nine: Communicate and celebrate your achievements

Nothing new here.  However making your results and achievements visible is a great way to recognize peoples' efforts by supporting the "1 + 1 = 5" concept.  Plus it is a great way to allow your organization to share ideas and build on the success of others.

Step Ten:  Repeat forever

Anyone who tells you they know how to make an organization Lean is missing the point.  Just as someone who tells you "oh we're already Lean" is also sadly mistaken.  Lean is not about the destination, its about the journey.  Now that you've made it to Step Ten it's time to go back to Step One and start again.

Happy trails :)

Lean Isn't....personal

I find I spend a lot of time listening to people justify the things they do as being Value Added.  And at times they get quite upset when I suggest we "call their customer to make sure that doing X is adding Value for them."  I am told things like "the customer wouldn't understand why we have to do X so there's no point in even asking."

Really?  Are you kidding me?  Who are you Henry Ford with your black cars?  (no offence to one of the great Lean innovators of all time).

Look I am not insensitive to what it feels like to have most of what you love to do classified as Waste.  And I really wish there was a more "touchy-feely" word than Waste for things that are Non-Value Added.  I have written about my firm's own Lean journey where we identified over 94% of what we loved to do as Waste.  I admit it, it hurt.  It crushed our souls.  How could this be?

But more important than our own feelings we realized we were doing it because we had to.  Anyone in the consulting business will tell you that consultants are the canaries in the coal mine.  Long before things actually go bad, if there is even a hint of a downturn in the economy the first thing companies cut is their consulting budget.  So months before the recession of 2008 we were already feeling the effects.

Facing a bleak revenue outlook we turned our Lean microscopes on our own internal process.  And as I said it was not pretty.  I started our Lean journey by telling my associates "look, we tell our clients that if they follow Lean they can take 40%, 50% and more in terms of costs and lead time out of their processes.  So if we follow our own advice we should be able to take out far more than that."

The result was the development of a suite of products we call LeanOnMe that we deliver for approximately 10% of the cost of our original engagements.  And furthermore we now eliminate virtually all of the complaints and frustrations clients have with consultants (I won't list them here, anyone reading this already knows).

My point is this, don't take Lean personally.  You don't hear smokers vehemently defending cigarettes as being good for them.  And diabetics don't get all upset when you suggest that cake might not be the most healthy choice they can make.  Realizing what's Waste and what's not doesn't make it easy to change.  But always keep in mind that the first step to improvement is admitting that you have a problem.  "Hi my name is Kevin, and there is Waste in my process."

Lean Isn't...rocket science

Sometimes Lean can be a four letter word. But don't throw the baby out with the bath water.

These days everyone has an approach to Lean that they assure you is the "right" approach for your organisation. And in many cases they are right. But unless you are running Toyota where the Lean ideals are part of your DNA, simply having the right approach might not be enough.

Ultimately improving the performance of your organisation will involve getting your people to act differently. In order to act differently they will have to make different decisions. And in order to make different decisions they will have to think differently.

Most approaches to Change Management focus on getting people to act differently. The reason for this is very practical especially if you are a consultant. You are under pressure to show quick results. So you need to do anything in your power to get your clients to act differently even if it means bullying people or simply doing most of the work yourself.

Some approaches focus on "training" people to make different decisions. These usually involve taking people through carefully planned examples in an attempt to get them to learn what decisions they should make when they get back to their "real" world. The problem here is these 'perfect' situations never happen in the real world. And ultimately you have not helped people to think any differently.

But to truly leverage the power of "1 + 1 = 5" you want to get people to "think" differently. My high school physics teacher taught me the following two things:

1. The force exerted on an object is equal to the objects mass multiplied by the acceleration or F=ma. Who cares unless you happen to be a rocket scientist.
2. You can't push on a rope.  Infinitely more useful to know.

What I have come to learn is that telling people to do something or teaching them a series of steps to approach a situation is the Behaviour Change equivalent to pushing on a rope. They might try something new while you are standing there guiding (harassing) them. But once you leave they will probably go back to making the same decisions as before because you have not got them to think differently.  If however you can get people to think differently you will find they will grab onto and pull any rope they can get their metaphorical hands on.

Let me give you a practical example. My wife (pushes) says to me "we need to buy some new patio furniture. The stuff we have is old and worn out." I think to myself (like I always do) "sure its a little ratty, but its patio furniture, who cares. As long as it can support my weight, its all good. And even if it doesn't there's nothing you can't fix with some wire and duct tape, am I right?"

Later we are invited to a backyard party at the neighbours house. Upon entering their back yard I notice how nice everything looks. In particular their patio furniture which is brand new and just looks great.

The next morning I go out to our own back yard and look at our own furniture with a new perspective. "Maybe she is right" I think to myself. "We have had it for quite a while and we do use it a lot." I then go find my wife and (pull) suggest we check out the sale on patio furniture that was advertised in the flier.

Make no mistake about it. In either case we were going to end up with new patio furniture. Believe me when I say the laws of Behavioural Change physics do not apply in my house. But I think everyone can see how much more effective (sustainable) the change in my behaviour was by getting me to see my back yard (waste) with a new perspective.

A tactic I use with clients as well as myself is I let my customer decide what adds Value and what therefore is Waste.  For example the next time this question comes up say to yourself "....ok let's call the customer and see what they think.  Hello customer, we are sitting in a meeting trying to decide which phase of the Project Lifecycle we are in and we just want to make sure we are adding Value for you."  You can imagine the confusion on the other end of the phone.  All of a sudden when you do this things like status meetings, weekly reports, inventory, work in process, quality inspections, creating schedules, updating schedules, backing up files, driving to work, walking between meetings, reviewing scorecards, storing raw materials, approving purchase requisitions, status meetings, steering committee meetings, update meetings, safety meetings, and better than 90% of everything your organisation does adds no value to your customers. Talk about looking shabby.

If this sounds harsh then maybe you are right.  If it sounds soul-crushing to discover that almost everything your organization does adds no Value to your customer, I hear you.  We recently did an assessment of our firm's Value chain and in the cold, harsh light of Value as defined by our customer we found that we generously added value 5.6% of the time.  That's the bad news.  The good news is we took this new found insight and developed a far superior product that we can now deliver at a 10th the cost and a 10th the effort.  Jealous?  You should be.

Lean isn't.....a 'crash diet' to cut costs

A lot of people, including lean consultants, have the idea that if they implement Lean they will be able to cut costs.  But this is exactly the wrong way to approach their process, or more correctly their Value Chain.  In fact many initiatives calling themselves "Lean" are the organizational equivalent to starting a crash diet or buying the latest exercise equipment to lose weight.

If you approach an existing process with the intent of "cutting costs" there are many ways to do that and just as many consultants to help you along the way.  And a lot of them even work...for a while.  The problem is how do you know you aren't cutting a cost that is actually adding Value to your customer?  Or even worse, cutting a cost that will end up increasing Waste to your customer?  For example I had a client who prided themselves on aggressively cutting costs within their process.  One particular way they found was to source a key component off-shore instead of having them produced locally.  On a unit that retailed for $200 they were able to save an average of $12.  On the surface that seems like a good thing.

Now flash forward several years and I am in a local building supply company looking to buy one of these units for my house.  Because I was familiar with this client, and I always buy my client's products, I specifically asked if the store carried that product.  I was told "well we used to.  But we've had so many problems with units being returned because of faulty [off-shore component] that we switched suppliers."  I was told that they only special order units from my client when people ask them to.  He went on to tell me that if I was going to have them order from my former client that I should also order a replacement [off-shore component] that was locally manufactured since "the factory one wouldn't last a year."  Did this company manage to cut its costs?  The answer is yes.  However doing so resulted in increasing Waste for their customer (returned units) and they ultimately lost that customer.

Getting back to the exercise analogy what this company did was the equivalent to going on a crash diet or buying the latest "get thin quick" gadget advertised on TV.  You might have short term weight loss.  But again any trainer will tell you that these benefits will be temporary at best.  And you will very likely end up in worse shape than when you started.

So if Lean isn't cutting costs then what is it?  If this company had approached its processes from a Lean perspective they would have started with Value as defined by the Voice of the Customer.  And in doing so they would have probably learned that one of the things that their customers (the building supply companies, not homeowners) Value is the fact that their units last a long time, including the component that was re-sourced. With this definition of Value they never would have considered going to a lower quality replacement.

Similarly when you hire a trainer to help you "lose weight" a good trainer will instead help you focus on what you need to do in order to get healthy.  With this broader perspective you will consider all aspects of your lifestyle (Value Chain) including diet, exercise, stress, environment, and so on.  Sure the weight will come off.  But the results will be much more sustainable and in the end more Valuable to you.