Blog Archives

Think Inside the Box

I saw a post last week on the Harvard Business Review blog about thinking inside the box.  The title caught my eye, but when reading the post it wasn’t what I had expected.  The post was about how to find ideas for innovation and improvement from within your company.  Great premise and I completely agree.

My thoughts about thinking inside the box have to do with creating and living by standards.  I work for a company with an extremely large creative staff.  At one time the largest creative staff in the world.  So, standards were frowned upon because it was thought to “box in” the creative talent in their designs.

As lean started to be implemented throughout the company, standardized work and product standards were an uphill battle.  After some discussion, we were able to get some standards in place.

The most interesting part has been the reaction from the creative staffs.  After working within the standards, they have said they have become more creative.

Thinking inside the box (or within the standards) has freed them from thinking about certain aspects of product design and allowed them to be creative within the space given to them.

This is a concept that is commonly misunderstood with lean.  Standardized work and product standards are not there to hamper creativity or take the thinking away from the work.  They are there to free up the peoples minds to think about the work in new ways.  Not think about the mundane aspects of the work.

Don’t fight standardized work, use to become more creative.

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Meet Customer Expectations AND Have Operational Excellence

I am way behind in my blog reading.  When reading some of my backlog, I found this great post by Brad Power over at Harvard Business Review.

Why was it great?  Brad talked about how meeting the customer expectations and operational excellence are not opposites.  Business should be doing BOTH and the ones that do have great success.

What is more important to company success, a strong external focus on customer experiences or an internal focus on effective and efficient operations?

Of course, it’s a false dichotomy — you need both. I described in an earlier post how Tesco worked for years to improve its supply chain capabilities, then leveraged this value by using deeper customer knowledge to enrich customer experiences.

Brad uses two great examples.  One is L.L. Bean that provides goods to consumers.  The other is ThedaCare which provides medical services to people.  He shows how meeting customer expectations and having operational excellence can work in either industry.

Many hospitals began pursuing the “triple aim”: better patient experiences, consistent quality, and lower costs. Hospitals such as Virginia Mason and ThedaCare adopted process improvement systems from manufacturing (“Lean” and the “Toyota Production System”) to deliver increased consistency, reliability, and quality. While skeptics are right when they say, “Patients are not cars,” the reality is that medical care is, in fact, delivered through extraordinarily complex organizations, with thousands of interacting processes, much like a factory.

Most in the lean community are aware of the great work ThedaCare and Virginia Mason have been doing.  It is great to see it highlighted on the HBR Blog.

Something that the lean community has stressed for a very long time is focus on delivering value for the customer first and then determine how to deliver that value as efficiently as possible and with no waste.

There is so much written about lean that is wrong or misunderstood.  It is great to see a post discussing how companies can use lean properly to help them compete and win.

Reducing the Cost of Higher Education

In a past post about a new educational model Massive Open Online Courses (MOOCs).  It seems that more and more well know universities are offering MOOCs.  Allowing anyone to have access to some of the best professors in their fields for free.

This movement has started to cause people to examine the question of what should the cost of higher education really be?  The question is being raised often enough that a post on the HBR blog has started to address it.

The biggest challenge is getting employers to understand the value of the MOOCs.  They still don’t know what to think about them.

According to a recent Financial Times article, many employers are unsure of what to make of MOOC education — unsurprising, since many new technologies and business models go through multiple evolutions. The good news, according to the article, is that 80% of respondents surveyed would accept MOOC-like education for their internal employee development. We can extrapolate from this survey that the employer demand for online education exists — and, moreover, that it is only a matter of time until universities and well-funded venture capitalists will respond to this white space in the market very soon.

Employers find it great for already hired and in the workforce people but what about using the system to get a college degree?  Would it be totally free?

Georgia Tech, in fact, has already responded; in January, it will begin offering a master’s degree in computer science, delivered through MOOCs, for $6,600. The courses that lead to the degree are available for free to anyone through Udacity, but students admitted to the degree program (and paying the fee) would receive extra services like tutoring and office hours, as well as proctored exams.

In the near future, higher education will cost nothing and will be available to anyone in the world. Degrees may not be free, but the cost of getting some core education will be. All a student needs is a computing device and internet access. Official credentialing from an on-ground university may cost more; in early 2012, MIT’s MOOC, MITx, started to offer online courses with credentials, for “a small fee” available for successful students — and we’re eager to see how Georgia Tech’s MOOC degree will transform the education model.

This seems reasonable to me.  You can take the courses for free, but to get the degree or access to office hours, tutoring and other services you pay a fee.

So now the student has the power to decide whether they pay for the learning or not.  The next step is to make a database that shows the student took the class and completed it.  Nothing more.  Then a person could list it on their resume and employers have a way to validate the person actually did it.  Maybe universities can change to have access to the database?

I find the MOOC system very intriguing.  As someone who has two elementary school aged kids, I am very interested in how the educational system will start to transform over the next decade and how employers will except the changes.

Harvard Business Review Talks about Listening to Customers

The number one tenet of Lean is listening to your customers.  The company should derive what is of value for the customers from the customers.

Let Your Customers Streamline Your Business, posted by Lisa Bodell, discusses this very topic in detail.

So rather than relying on internal perspectives alone, engage your customers in developing simplification ideas…

The blog talks about simplifying products and services to help retain customers and increase customer satisfaction.

This simplification isn’t necessarily “dumbing” down the product or service.  It is about eliminating the waste in the product/service.

The first part of the definition of waste is the customer is willing to pay for and finds value in the feature.  If they don’t find value then it is non-value added waste.  The only way to understand what the customer believes is of value is to engage the customer.

Lisa talks about five ways to engage the customer:

Listen to your critics. Does your organization ask for customers’ feedback about what it was like to do business with you? What about asking non-customers why they don’t do business with you?

Roast your products and services. Comedy Central gained attention from its famous Roasts, where a celebrity gets torn to shreds with hilarious insults doled out by the audience. Try out this practice on your company’s products or services.

Turn pains into gains. Think about actively asking your customers about their pain points when it comes to working with your organization and its products or services.

Figure out what your customers do all day. Think you know your target market? Not just their demographic, but what their life is actually like.

Learn from other industries. Sometimes businesspeople think their company has unique circumstances; that problem-solving strategies that have proven successful in other industries wouldn’t work for them. This could not be further from the truth.

While there is a lot of traditional business thinking that I completely disagree with on the HBR blog, this one is dead on.

The best way to increase adoption of your product/service and gain customer loyalty is to listen to the very customers that are you targeting.

Apple Will Fail if Manufacturing is Moved to U.S.?

Last week, I caught a blog Why Apple Has to Manufacture in China.  I read hoping to find some practical reasoning as to why it was critical that Apple manufacture in China.  I read the post twice and I couldn’t find any reason it was critical for Apple to manufacture in China.

The post does say labor cost is not a reason to manufacture in China.

It is not an issue of labor costs. In fact, labor costs play a very small role in the equation — both for Apple and for Timbuk2.

The post compares Apple to Timbuk2, a company that makes custom bags.  Two different business models, Timbuk2’s custom production versus Apple’s mass production.  Here is what the post has to say about this.

Timbuk2 manufactures in the US because it produces custom-made bags, orderable through its handy web site, and customers ordering custom bags cannot wait for weeks for a bag to come from China by boat, while shipping by air is expensive and there would still be some uncertainty due to customs clearance. A very similar logic lies behind fashion retailer Zara’s choice to manufacture in Europe, also an expensive location in terms of labor costs. Of course, Timbuk2 does also produce many bags in China but these are mass-produced, non-customized bags, sold wholesale at a fraction of a price of a custom bag, and they are not time-sensitive.

Apple does not produce custom products and so it does not need to deliver quickly — all of its products are standard and mass-produced; just like the standardized bags for Timbuk2, so there is no reason to stay close to end-customers. Moreover, Apple does not change its assortment often — the new iPhone will probably be for sale for another year or two.

There is no need for mass producers to be close to the end-customer?!  Really?  So it is OK to spend a couple of months to get new phones to the U.S. or pay for air freight (which is quite expensive), if there is a defect in a batch of phones?  Not in any business model I know of.  That delay risks the loss of customers and costs the company more money than is needed because of the big batches that may have to be reworked or thrown out.  Also, when the life-cycle of a product is coming to an end it may cause more phones to be thrown our or discounted because of the large batches.

The post is contradicting itself because it says cheap labor is only a small part of the total cost, but then does not take total cost into consideration when looking at all the freight and inventory and possible obsolescence costs.

So why else is it important for Apple to manufacture in China?

Apple is a huge company and as a New York Times article published in January this year details, its production volumes and often unpredictable engineering changes require manufacturing flexibilities and engineering capabilities on a scale that is simply unavailable in the USA.

Exactly my point about inventory above.  The post goes on…

In China, by contrast, manufacturers can deploy thousands of collocated engineers to introduce needed changes overnight, and large supply of labor allows to ramp up and ramp down capacity quickly. There is simply no factory capable of employing 250,000 workers day and night in the USA, surrounded by flexible and capable suppliers. So the location decision isn’t really about labor costs — it’s about manufacturing risk and where that risk is best managed.

Because Apple has bad processes upstream, it is OK to disrupt the lives of thousands with no regards downstream to fix the problem.  Reminds me of the saying, “A mistake by you, does not necessitate an emergency by me.”  Again, raising the cost to produce.

To summarize:

  • Mass producers don’t need to be near the end-customer
  • Disrespect for people is OK when fixing a problem you created

Apple may be on top of the hill today, but 2-5 years from now they won’t be.  As competitors, like Samsung, close the gap managing cost is going to grow more important. Fixing your processes so engineering changes are not needed overnight and locating close to your end-customer so when you do have an engineering change you don’t have tons of inventory to dispose of is a great way to manage your cost.

 

Have a Purpose. Don’t Innovate.

One last blog post I read that I am way behind on.

Please, Can We All Just Stop “Innovating”? is posted at the Harvard Business Review Blog.  Bill Taylor tackles how companies are over killing innovation as a business practice.

A recent article in the Wall Street Journal, which did not get nearly the attention it deserved, made the case that the word “innovation” has outlived its usefulness. “Companies are touting chief innovation officers, innovation teams, innovations strategies, and even innovation days,” the hard-hitting piece noted. “But that doesn’t mean the companies are actually doing any innovating. Instead they are using the word to convey monumental change when the progress they’re describing is quite ordinary.”

Innovation is used everywhere for everything today.  I agree with the WSJ article.  A lot of the “innovation” is a quite ordinary change.

Here are three examples in the post about truly innovative work.

Southwest Airlines never said, “We want to be the country’s most innovative airline.” Its leadership said, “We want to ‘democratize the skies’ and give rank-and-file Americans the freedom to fly.” They perfected a new way to be an airline by virtue of what they wanted to achieve as an airline. They did what made sense to them, even if their strategies made no sense to the legacy carriers.

Tony Hsieh and his colleagues at Zappos never said, “We want to introduce innovations to e-commerce and do a better job of selling shoes over the Internet.” They said, “We wanted to build the greatest customer-service brand in the world, a company whose mission is not simply to deliver products but to deliver happiness.” Thus Zappos created a special culture, a unique way of doing business, and an almost mythic status among its customers, who have given the company permission to sell all sorts of products above and beyond shoes.

Cirque du Soleil did not set out to make a few tweaks to the traditional three-ring circus, or market-test a few new acts as a way to offer innovations vis-a-vis Ringling Brothers. Rather, an immensely talented group of street performers set out to define a whole new category of live entertainment, a creative leap that made perfect sense to the artists who dreamed it up, but made no sense to circus veterans or to audiences who had never seen such shows before.

The common theme Bill points out is having a purpose.  In all three cases, having a strong purpose that was communicated and believed in led to the innovative thinking.  It was delivering to the customer that mattered.  Not being “innovative”.

Have a purpose you believe in.  Understand the customer.  Deliver to the need.  Innovation will come.

Micromanaging…Or Lean Leadership?

I am a couple of weeks behind on this one, but I thought it was a good blog and worth mentioning.

If You’re Not Micromanaging, You’re Not Leading” was the title of a blog post by Michael Schrage at the Harvard Business Review blog site.

The title hijacked me right away.  Title alone goes against everything lean is about.  Then I read the article and found Michael was actually advocating for lean leadership behavior without calling it that.

…this vignette affirms my belief that leaders need to “go to the source”even before they turn to their best people. Seeing the data raw instead of analytically pre-chewed can have enormous impact on executive perceptions.

Sound familiar.  Michael is talking about directly observing the work.  A foundational principle of lean.  He gives a second example of why directly observing is important.

At one global telecommunications giant, for example, a critical network software upgrade was not only slipping further behind schedule, but the bug density was slowly creeping up, as well. The program managers’ key performance indicator dashboards showed nothing alarmingly unusual except the seemingly usual slippage and delays associated with a complex project with moving parts worldwide. The executive responsible for the deliverable (but not the software engineering itself) felt something amiss. The error rates felt too high and the delays too long, given the clarity of project milestones. He wasn’t technically sophisticated enough to read the code or analyze the testing, but he asked several project managers to share how their code was being documented. The raw material astonished and appalled him. The code was both hastily and poorly documented; the result was confusion and ambiguity that not only created delays but introduced errors into the software. The deadline-driven programmers, unfortunately, thought nothing of improvising just-in-time documentation via email, and misunderstandings and typos quickly propagated program-wide. The result was a worsening mess.

The executive intervention — making documentation a priority, streamlining version coordination, and changing the testing protocols — didn’t get the complex program back on schedule, but stopped things from getting worse, and dramatically improved both product quality and post-launch maintainability. It could never have happened unless leadership had the courage and competence to go to the source.

Great examples to bring drive home the point of how important directly observing the work is.  But, I do disagree with Michael on one thing…

Is this micromanagement? You bet! But real leaders are constantly called upon to create new contexts for people to succeed. Sometimes holding people accountable is the path of least resistance rather than what’s best for the organization.

I don’t think so.  Understanding current reality is not micromanaging.  It is necessary to be a great leader.

Micromanagement is telling your employees how they should be doing their job.  Worrying about how each detail is done which is different than worrying about what are the details and understanding the current reality.  There are quite a few comments below the blog mentioning similar thoughts also.  Micromanagement is more than just understanding the process and current reality.  Micro-managers fret about HOW you got the raw data or HOW you completed the work and try to tell you HOW to do the work.

Overall, a very good post.  I just hope it does not lead people down the path that understanding is micromanaging and then it carries over to be a black mark for lean.

What do you think?  Directly obrserving work or going to the source, Micromanaging?  Or not?

Harvard Business Review Blog Talks U.S. Manufacturing

If you are a regular reader of Beyond Lean, you may know that I am a very big supporter of U.S. manufacturing.  I believe it is the foundation for economic prosperity for our country or any country for that matter.  Lean thinking and principles can help guide any business to success and overcome many economic and governmental situations.

Recently, the Harvard Business Review Blog has had posts talking about much of the same.  Here are a few of the posts.

The U.S. Needs to Make More Jobs More Creative

The authors break jobs into two categories.

But we were able to classify all jobs as either creativity-oriented or routine-oriented. And within the routine-oriented classification, there are three distinct types: routine-physical (e.g. an auto assembly plant worker); routine-service (e.g. an accounts payable clerk); and routine-resource (e.g. a coal miner).

The authors explain that creative-oriented jobs pay more and pose a great question.

…the real challenge for the U.S. economy is what to do with routine-oriented jobs in dispersed industries.

And their response to this:

There is no quick fix for this problem. But my view (and Richard’s) is that we have to rethink how we utilize workers in our advanced economy.

…But I believe that America can influence the slope of the line of increasing creativity-oriented jobs by leaning toward creativity; giving workers the encouragement and space to innovate; utilizing the most of their brain, not the least of it. That would be the grass-roots way out of America’s economic doldrums that everyone is looking for.

I interpret this as engaging everyone in the organization, even those doing what is considered a routine-oriented job, in innovating the business.  Innovating is also about how to change the process to be better.  Engage the minds and hearts of the employees not just the hands and feet.

Unglamorous Freelance Manufacturing Could Boost U.S. Competitiveness

The U.S. competitiveness debate too often devolves into a cry for more Apples and more Ciscos on American shores, when what the country really needs is more Hospiras.

More what?

Hospira is an advanced contract manufacturer.

The author talks about the importance of manufacturing for innovation.  Something I believe to be true and how we must open our mind to what the definition of innovation can mean.

In the U.S., “innovation” typically means just one thing to people: novel gadgets. Few policy makers realize that much of the innovation that has propelled China’s economy, for example, is of the incremental or process type. Many of us admire Apple for its originality but tend to forget the importance of its power-supply innovations, all of which were done in China by a Taiwanese company.

When it comes to process improvements, American companies are stagnating at best, and in many cases slipping backward. Policy makers need to appreciate the value of keeping incremental and process innovation in the United States.

I don’t agree that the U.S. needs policy makers to give tax breaks and help U.S. companies realize the importance of manufacturing to all types of innovation.  There are U.S. companies that have realized that on their own.  I’m sure even Apple has realized the importance of the innovations from their suppliers.  It is the companies that need to realize the benefits of this and make the effort to change their thinking around this.

It’s Time to Bring Manufacturing Back to the U.S.

A growing number of executives of U.S.-based companies are repatriating their manufacturing capabilities — moving some production operations back from overseas.

Many companies have been moving manufacturing back to the U.S.  In fact, enough have done it the movement has a name…reshoring or onshoring.

The post talks about governmental help to support this movement.  While, the governmental help would be nice it is not necessary.  There are plenty of companies that have made the move without help from the government.

Here are three bullet points the author says the governmental help recognizes:

  • Companies compete on cost and responsiveness, and this balance shifts dramatically when labor costs rise and the locus of demand shifts.

Labor cost has nothing to do with responsiveness.  Quick lead times and location has to do with this.  When total cost is looked at from end-to-end companies usually find that cheap labor really isn’t lowering their cost either.

  • Local talent and skills are essential to productivity and innovation. Long-term depletion of manufacturing skills will make it hard to reverse the trend.

I think this is right on.  It will be hard to reverse the trend but I think with more companies bringing manufacturing back to the U.S. this is helping to keep the skills from depleting.

  • Research and development incentives provided by the U.S. government must be tied to manufacturing operations. Otherwise, whatever is developed with taxpayer money could easily be moved to other regions associated with low-cost manufacturing.

I don’t agree with this.  This comes down to a company’s morals and beliefs.  If they want to move some innovation out of the country they will do it.  Their are companies innovating and manufacturing in the U.S.  It just may not be the high profile company like Apple.

It is great to see more and more discussion about the importance of manufacturing in the U.S.  That was not the case just a couple of years ago.  Especially on a high profile site like HBR.  The authors there are still spouting off too much about how the government needs to change regulations.  They need to start asking how all the companies that have already moved manufacturing back to the U.S. did it.  If they did, they might start writing more about Lean and end-to-end value stream thinking.

Pre-emptive Strike on Micromanaging

Recently, there were a couple of great blog posts about micromanaging over at the Harvard Business Review blog.  You’re Probably a Micromanager and Why People Micromanage.

One of the reason Ron Ashkenas sites for micromanaging is the manager worries about being disconnected from what is going on.  I have seen this be true in a lot of cases.  The manager has a hard time trusting what is going on with the work and needs the comfort of being involved in order to be relaxed about the situtation.

One thing I have found to help with micro-managers is the pre-emptive strike.  Try getting out in front of the work and give regular updates without being asked to do so.  Once a week or after a meeting, send the manager an email with what work has been completed to date and what work is next to be completed as well as how you feel the work is going.

In most cases, this can start to build trust with the manager.  The manager can start to do less micromanaging.  The key is to take on doing the updates without being asked to do so.  If the manager asks, then it will seems as task the manager wants to keep an eye on you.  If you take the initiative to update the manager, the manager respects it can starts to build some trust which can allow the micromanaging to start to subside.  When that does yo feel better about the work and working for the manager.

This may not work all the time, but it is a place to start.