• Identify the primary reasons why organizations struggle with Lean transformations and learn countermeasures for each reason.
• Develop a transformation plan for their organization.

For additional information on the upcoming 2012 AME conference, go to www.ame.org. An outline of the presentation may be obtained by contacting the Adaptive team at inquiries [at] abstb [dot] com.

Unfortunately, hiring external people to fill continuous improvement support roles rarely produces the significant, lasting results organizations expect; many times through no fault of the person being hired. In fact, hiring such people can be detrimental to the organization over the long run without proper systems in place. And, internal candidates may not have the experiential and/or technical skills, or simply be too close to the problems to be effective. So where do you get your resources from? Many organizations are beginning to follow a “new school” approach.

There are some obvious “pro’s” to hiring an external resource. Assuming you hire the right person and utilize them correctly, such a dedicated CI resource can provide:

• A different point of view. Not necessarily encumbered by current industry or functional paradigms.
• Flexibility; are less invested in the status quo. Most people who design and run a system have a much harder time changing the system. They end up working in the system, rather than on the system.
• Bring best practices from another organization in the same or even different industry. Caution: rarely does cutting and pasting a practice, even if from the same industry, really help unless the entire system understands and is designed to support the practice.
• Some problem solving methodology and expertise such as Six Sigma, 8D, Agile, Scrum, etc. to the organization.

Unfortunately, challenges an external hire typically faces, outweigh the benefits. Even under the best circumstances, most new, externally hired CI resources face the following:

• Limited knowledge of formal and informal networks within the organization. Success is rarely limited by poor technical solutions; people are usually the hardest hurdle. Trying to champion structural change as the new kid on the block is inefficient at best. And, at worst, ineffective.
• Lack of specific systems and process knowledge. Chances are they don’t know the systems and have to rely on others for process understanding and data gathering.
• Lack of cultural understanding. Solutions which may work in one organization, may not work in another . . . even when the two organizations are part of the same company! Without truly understanding how an organization thinks and operates, crafting an effective, sustainable solution is much harder. This lack of cultural understanding can result in a rift between the CI resources and the functional owners; leaving functional owners with a negative impression for continuous improvement.

These challenges can be overcome with time. However, time is not typically a luxury most organizations afford dedicated CI resources. An internal hire will likely have the best chance to overcome these challenges more quickly.

Furthermore, many organizations often impede a CI resource’s ability to effectively maximize their benefit to the organization. Here are some of the top issues, which apply to both internally and externally hired CI resources, we’ve personally observed:

• Failure to properly align and set goals. Functional leadership teams must be responsible for directing CI efforts; not the other way around. Directing CI resources to “go find me $1M”, rather than directing where and how to hunt, results in misalignment with company goals.
• Rely on the CI resource to “own” the results. Yes, you can tie feedback to the improvement efforts. But, only the functional owner can, by definition, “own” the result. The CI resource should be judged in part by results, but mostly for the approach used to create results. Reaching goals is not the primary challenge; it’s doing so in a sustainable manner which lends itself to continuous, further improvement.
• Expect the improvements to come solely from the CI resources. Significant, sustainable improvements only come when you harness the entire team’s knowledge; not simply from an intelligent individual. Demand improvements from other areas not necessarily receiving attention from the CI resource, as well as outside dedicated improvement activities (i.e. kaizen events).

If you are attempting to dedicate new or additional resources to your continuous improvement efforts, here are three thoughts, in order of recommended execution, to maximize your CI resource’s efforts and minimize the challenges noted above:

1. Identify a key business leader i.e. COO who acknowledges and understands their improvement opportunities; and has a well-articulated plan to achieve significant, lasting improvements. You don’t have anyone internally that fits the bill? Choose one who acknowledges significant opportunities exist but may not know exactly how to accomplish the goal. Train them and their staff on what “great looks like” and how to get there. Having the functional team trained will help ensure there is pull from the team. Otherwise, the CI resource, internal or external, will be stuck trying to push a proverbial rope. If necessary, bring in an external person to coach internal functional owners on understanding how to create a solid plan as well as how best to justify and maximize CI resources.
2. After the functional team has a plan and articulates resources needed, identify top internal talent to fill the role(s). Similar to the leadership team identified above, the ideal person is one who can clearly identify and acknowledge problems, and provide an approach and maybe some elbow grease, to assist the functional team solve their problems. If necessary, train them on how to effectively support the functional team by problem identification and solving. As internal resources, they are able to “ramp up” much faster than any external resource. And if you choose the right person, they should be someone with whom the functional team will willingly work. Ideally, they should report to the functional leader for which they are being dedicated, as they will likely act as a coach for the other leaders around them.
3. Augment CI resources with external only when the need for additional resources outstrips availability of strong internal candidates, and the necessary support systems are developed. Hiring an external candidate first, should be your last resort. However, a blended team consisting of both external and internal CI resources works well. Some organizations, such as GE, hire externally sourced Black Belts. But, they have a system which allows them to be successful. Typically, there are internally chosen, experienced CI resources working alongside externally sourced personnel to minimize the assimilation pain. Furthermore, the functional leader to which they’ve been aligned, has likely has been a former dedicated CI resource i.e. Black Belt or Master Black Belt, themselves and knows how to effectively coach and utilize them to maximize results.

The true secret to driving significant, lasting change is to ensure the organization has an enlightened functional leadership team that acknowledges the need and understands how to constantly improve in an efficient and effective manner. In such an environment, there is no need to hire externally for such roles. Rather, they tap top internal talent, and use the opportunity primarily for leadership development. The benefits a strong CI resource provides do no lie with the immediate savings they help generate today. But rather, real benefits lies in the experience they receive during the journey, which can then be harnessed and magnified throughout the entire organization as this person goes on to serve in a functional leadership position. However, many organizations unfortunately cannot or will not invest to grow their internal talent pool and think they have to go beyond the four walls to find the necessary talent.

Hiring externally for such a role without establishing the right environment can not only be a waste of resources but could be detrimental to longer term growth. The organization must ensure the functional leadership team understands their responsibilities with regards to continuous improvement, as well as expectations for what a CI resource can effectively and efficiently do for the organization.

Disclaimer: We are not implying an external CI resource hire cannot be effective. Simply that their efforts are rarely as efficient and/or effective as an equivalently qualified “insider”, who knows the people, systems, unique cultural challenges, etc. If you don’t have an equivalently qualified “insider”, you have got a much larger problem that should be addressed first.

Todd Wiese, a partner with Adaptive, is a GE-trained Master Black Belt, who has held a variety of senior level staff and functional roles in the US Navy Submarine community, Fortune 500 organizations, and smaller, privately held organizations. He holds a B.S. in Engineering from the United States Naval Academy and an MBA from Kellogg School of Management; Northwestern University. Adaptive Business Solutions facilitates the adoption of Lean thinking into your organization by integrating with your current culture and delivering the education and coaching needed to enhance and sustain customer, employee, and shareholder value. For inquiries regarding our services and availability, feel free to contact us via e-mail at inquiries [at] abstb [dot] com (atinquiries [at] abstb [dot] com).

There is little evidence to suggest that 2012 business landscape will be much different than the previous few years. Leaders will continue to be asked for higher levels of growth and profitability, while minimizing personnel budgets and capital expenditure for new technology and infrastructure upgrades. In short, leaders must be able to do more with less for all customers, including employees, shareholders, and external customers. Do you have a structured approach to focus your existing resources and achieve your goals and objectives? This one-hour presentation will provide participants an overview of the Lean Transformation Framework; a structured approach to improving your organization with maximum effectiveness and efficiency.

Following the presentation, there will be a Q&A session to address concerns about the Lean Transformation Framework, continuous improvement in general, and recommendations for specific situations.

For additional information or to register for this presentation, go to www.milwaukeelogisticscouncil.org/programs. For other all other questions you may contact the Adaptive team at inquiries [at] abstb [dot] com.

Save your time and money and forget about the complex assessments. There are four basic elements that can be quickly assessed and fixed if broken. 

1. Well defined and communicated goals and objectives (G&O’s). The first question that we ask business leaders is, “What are your goals and objectives?” This question must be answered before a meaningful action plan can be created. Clearly understood G&O’s help employees make smart decisions about what needs to be done and why. If goals and objectives are not clear, employees may focus limited resources (time and money) to areas that are not important to the strategic business goals. When creating G&O’s key points: 

• Ensure the G&O’s are balanced; there should be something for every customer: Safety / Job Security (Employees), Quality (External Customer), Delivery (External Customer), and Cost (Shareholders). Myopic focus on solely cost is a red flag.
   
• The goals should be Specific, Measureable, Attainable, Relevant, and Time bound (SMART). For example, “Reduce cycle time for product X from 15 to 10 days by FW35.” Many organizations simply say, “Increase revenue”, “Decrease cost”, “Decrease cycle time”, etc. Vague goals are meaningless.
   
• All goals should be clearly align with the corporate G&O’s. If a goal does not tie back to a corporate goal, it rarely receives the resources needed to complete it.
   
• Here is a quick exercise to check that goals are clear and well communicated. Have the leader to write down his/her top 3-5 priorities on a 3×5 note card. Then, ask the leader to have their direct reports conduct the same exercise. If the subordinates’ goals don’t match those of the leader, we recommend addressing goal setting and communication first. 

2. Visible list of prioritized actions, including owners, support, and timing. After clarifying their goals, we ask leaders to articulate the top three actions they are taking to achieve their G&O’s. This includes articulating who owns the actions and when they should be completed. The best leaders have immediate answers and ensure their direct reports can also answer the question. At this point, we are not analyzing the actions’ effectiveness, but rather looking for evidence of a detail-driven, action oriented, and accountable culture. 

• We recommend a standard format for action plans in your organization. A simple Excel worksheet with action description, owner, start time, stop time, and impact/result is a simple way to begin.
   
• The plan should be visible for everyone to see. Action plans that are hidden on a shared drive rarely gain traction. Our favorite method is printing the plan on plotter paper on posting it in the hallway. When your people walk by they clearly see the top three “who, what, and by when” details. 

3. The right metrics. Many organizations confidently tell us, “We have metrics!” After some further questioning, they often admit that the metrics are not good, that they have too many, or the metrics don’t measure progress towards the goals. We’re not solely looking for high-level measurements such as gross margin or revenue. Rather, we look for visually displayed process metrics. For example, parts produced compared to plan, % scrap, et cetera which clearly tie to the overall business metrics. If you manage the engineering department, displaying company level warranty costs usually fails to make a connection with employees. Instead, display metrics that the engineers directly affect like drawing errors found by downstream processes such as production or supply chain. 

Visual indicators should clearly provide the following information: 

• Current state. Clearly communicate how your process is performing today. A normalized value works much better than an absolute value. “Errors per drawing” is a better metric than “total number of drawing errors”.
   
• Desired future state (Goals & Objectives). We recommend a 52-week outlook in addition to a target value and also want to see a realistic performance path. A hockey stick plan, one that shows dramatic improvement at the end of the time frame, should raise a red flag.
   
• Projected performance level. If you are not at plan, what does the recovery path look like? If you are exceeding plan, are you shooting for a revised goal? Identifying specific actions and timing on the graph itself are extremely effective in communicating the how, what, and when of the plan. 

4. Frequent (preferably daily) operating mechanisms. Goals and an action plan are rarely achieved if they are not closely monitored. Monitoring progress, taking action, and providing immediate feedback is critical to executing the plan. Frequent operating reviews led by the functional owners of each area provide a mechanism to both monitor progress and coach subordinates. In a transactional environment the meetings might focus on items such as open orders, RFQ status, current lead times, pricing updates, accounts receivable, etc. In a multi-shift facility a structured shift turnover meeting led by the supervisory elements should be conducted. 

Getting these four concepts right creates a focused organization that understands where it is now, where it needs to be tomorrow, and how it will achieve those goals. Dramatic improvements are often seen just by doing these four things because they build a focused action-oriented and accountable culture.

This is why we recommendation you skip the massive spreadsheets and detailed assessment tools analysis until your organization demonstrates the ability to execute these four basics concepts. 

Disclaimer: Even if your team follows these simple rules, success is not guaranteed. If your entire business does not value these behaviors, your efforts can be inefficient and potentially ineffective. 

Adaptive Business Solutions facilitates the adoption of Lean thinking into your organization by integrating with your current culture and delivering the education and coaching needed to enhance and sustain customer, employee, and shareholder value. For inquiries regarding our services and availability, feel free to contact us via e-mail at inquiries [at] abstb [dot] com.

• Identify the primary reasons why organizations struggle with Lean transformations and learn countermeasures for each reason.
• Develop a transformation plan for their organization.

For additional information on the upcoming 2011 AME conference, go to www.ame.org. An outline of the presentation may be obtained by contacting the Adaptive team at inquiries [at] abstb [dot] com.

Adaptive’s first presenation covers “The Basics of Lean and Six Sigma”.

• This presentation will provide you with a general understanding of the term Lean, or as some refer to as Lean thinking or Lean manufacturing, and how this methodology can be applied to all types of businesses and functions. Additionally, you will learn the basics of the DMAIC Six Sigma problem-solving methodology, and how it is utilized in a Lean thinking organization.

The second presentation covers “BP Lean Transformation: a Practical Guide to Applying Lean Thinking in Your Business”.

• This presentation provides an overview of the Lean Transformational Framework (TM), a practical guide built based on decades of real world experience, designed to help organizational leaders to dramatically improve the organization’s ability to create value for external customers, internal process owners, and shareholders alike. Brent will walk you through the three primary phases of transformation:
  1) Understand, 2) Stabilize, and 3) Continuously Improve.

1. Make sure the project is overtly important to the business. Your boss and your boss’s boss should really care about the problem. There should be some plainly obvious objective evidence i.e. data and metrics, which indicates there is a problem, the problem magnitude, and its relative importance to other issues your organization may be facing. Otherwise, resources, prioritization, data collection, and overall functional engagement will be suspect going forward. Regardless whether you are a functional owner or in a continuous improvement support role, senior leadership should clearly be communicating the organization’s direction and goals; it’s your role as a leader to determine how far away you are from those goals, plot a course for success, and execute with the leadership’s support.
2. Ensure the improvement effort is being led by the functional owners. Many organizations employ full-time continuous improvement associates who are tasked with “fixing” someone else’s process. Usually, what are produced are some detailed and documented work standards, a pretty process or value stream map, and a lot of good intentions. Unless there is a functional person (not just an executive sponsor) leading the charge (or at a bare minimum, right next to you), implementation and ultimately sustainability are much more difficult than necessary. If done correctly, the functional owners should be pulling heavily on the support staff resources i.e. Manufacturing Engineering, Lean Six Sigma resources, etc., not the other way around as I’ve seen in so many organizations.
3. Tightly scope your efforts; think incremental and immediate. I cringe when I see project statements that begin with the following: “Increase product gross margin…”, “Increase business-wide product on-time delivery…”, “Improve overall product quality…”, etc. Those usually aren’t projects, but large-scale efforts. I recommend you dive multiple levels into the symptom, to determine where to start; many time referred to a scoping project. Example: Instead of launching a project to reduce warranty costs, identify a product line, a specific defect which you wish to reduce, and type of failure i.e. out-of-the-box; begin your project based efforts here. Using data in a Pareto chart format is highly effective at communicating what you need to fix and the order of magnitude of the problem to fix, in order to drive high level impact. Additionally, don’t assume you need to execute a project or run an event. Smaller, incremental improvements not necessarily done in a project type format are usually the keys to success in terms of overall functional acceptance and sustainability. The larger (scope) and longer (time) the project, the higher the probability for failure. If you are in “project mode”, bite off enough to get done in about 4-6 weeks; that’s roughly 9-12 solid improvements in the process per year.

I am not implying you can’t “get it done” without initially addressing these factors. Rather, my experience indicates your efforts will require more elbow grease and yield less result, unless you identify and immediately resolve these issues.

Adaptive Business Solutions facilitates the adoption of Lean thinking into your organization by integrating with your current culture and delivering the education and coaching needed to enhance and sustain customer, employee, and shareholder value. For inquiries regarding our services and availability, feel free to contact us via e-mail at inquiries [at] abstb [dot] com.