Mar 29, 2007

Feeling dumb

The other night I went to a presentation on value engineering/value analysis held by the Engineering Society of Detroit. First I felt dumb because, even though I had a Google map of the location, when I got there I couldn't figure out exactly where to go to find 2000 Town Center. You'd think it would be easy, but it wasn't. That's why I was late - but that's not the dumb feeling I'm talking about.

I had a general idea of what VA/VE is and does, though the tools and examples shown were new to me. I know there's sometimes a skepticism among lean folks about value engineering, but the point was made that VA/VE can be the right tool for the right situation, and Toyota uses it when they need to. The presenter - a guy from TRW, not a consultant - had to cram three days' worth of slides into about 45 minutes, so I was left feeling like I missed a lot, but that's not the dumb feeling I mean either.

There was a fellow in the audience, an aquaintance of the presenter, who made several enlightening remarks during the question period. I went up to him after the meeting to see what I could learn. He's a manager of strategic analysis at GM, obviously a tough job, but went back a long way. He'd been to Toyota, and a number of other Japanese auto manufacturers, and had delved into a lot of other engineering methodologies, including lean.

He talked about all he'd learned about how different companies work, and the tools they use like agility and flexibility. He talked abou how a truly agile company could kill a product line if it didn't work out, even if it had millions of dollars of tooling it hadn't yet amortized. He seemed to be saying that agility was a real concept, not just a brand of lean we heard about many years ago, and that's when I started feeling really dumb.

When you hear that kind of talk, you can react in one of two ways. One is to think that I've heard that agility stuff before, and put it out of my mind and maybe he doesn't know as much about manufacturing as he says, and so on. The other way is to think that when I try to teach, I probably sound exactly like that to someone who doesn't know what lean is.

I was feeling dumb in a good way. I said, "Gee, thanks. Now I have ONE MORE thing I have to learn about!" And I'm so lucky that that's true. I hope I'll get a chance to talk to him more and sort out what I know from what I need to know, and keep working at that gigantic mass of everything I haven't learned yet. Let's hope the old brain can creak on a bit longer so I can keep trying.

Mar 28, 2007


I had a great interview with Fort Wayne mayor Graham Richard - more about that later. He mentioned that a continuing training program, the Mayor's Leadership Development Roundtable has the participants read books like Peter Senge's. That reminded me that I have never read "The Fifth Discipline." I hear people talking about the learning organization, and I followed the knowledge management flutter, and have spoken with a lot of people who firmly believe in the concept. So I've been nodding my head like I'm in the know, but really feel like someone who's never watched "24" - hey, I've never done that either.

So I ordered the book - you can get it for about $1.00 at either Amazon or ABE books.

Now this made me remember how easy it is to derail improvement in an organization. Years ago, I was at one of those "leadership" meetings where managers are all brought together to conjure up some big improvement in operations. Someone mentioned Senge, or the term "learning organization" and one of the people in charge said vehemently, "I never want to hear those words mentioned again!" OK, I won't bother with that.

How easy it would have been to ask what about a learning organization might apply to the situation at hand, or even offered to discuss the person's thoughts offline, if the subject would have really moved the meeting away from the goal.

Anyway, this must be more than ten years later and I've finally recovered from someone's stupid outburst. I just hope anyone on the receiving end of my own stupid outbursts has recovered enough to pursue whatever it was they were thinking about. It might make a good practice to always respond to stupid outbursts by going ahead with the idea that set off the fireworks.

Mar 20, 2007

Cities, mayors and process improvement

I love it that I can explore almost any avenue and call it work. I've been looking into "lean government" lately. Typically you'd look at the internal improvements in government services and their benefits to residents. I want to know more about the effects of lean government on local manufacturers, economic development and the like. Through my usual wandering around the web I learned that the city of Ft Wayne, led by Mayor Graham Richard, has been making waves.

Richard comes from a statistical quality orientation, and was a founder of the local TQM Network. Thus, six sigma was the starting point for improvement in the city. Later, as in so many such situations, lean was grafted on. People are rightly skeptical of lean six sigma (LSS). It's so easy to string buzzwords together and think something magic is going to happen. I give Richard credit for doing it better, however. He approached the initial programs by getting the willing employees training and starting them on their way through the belt ranks. The people were chosen because they could see a specific problem they wanted to solve, such as missed garbage pickups or excessive waiting time for land improvement permits.

The TQM Network provided bargain-priced training, and companies like ITT and Raytheon lent black-belt level employees to the city to work on improvement teams with city employees.

The teams have racked up some notable gains. Can your city routinely get a pothole fixed within 3 hours of its being reported? If my city could have done that - this is Michigan - I wouldn't have blown three tires in a 12-month period on a 5-mile stretch of road I drove every day.

The mayor has written a book, "Performance is the Best Politics," telling the story. Yes, there are successes, but Richard is honest enough to talk about the lessons learned, what he thinks they'd do differently if they could go back and do it again. I'll be talking to Mayor Richard next week for a Target magazine article, as well as to some of the industry leaders invlved, thanks to the excellent work of Ryan Chasey.

When I reported my project status to Lea Tonkin and Doc Hall, Doc asked the $64,000 question - what happens when the mayor isn't the mayor anymore? Will the effort be sustained?

Doc mentioned that Joe Sensenbrenner attracted a lot of attention some years ago when he was mayor of Madison, WI. (Joe isn't the senator - that's Jim.) Well, I prowled around the web again and pulled up a couple of Sensenbrenner threads. Twenty years ago, he led the city of Madison. He was pals with some of the most prominent quality statisticians of the day - George Box, Bill Hunter, Brian Joiner, and many others. Joiner was considered good enough by Dr. Deming to be allowed to help with some of his seminars. Hunter contributed an example to "Out of the Crisis."

Awhile ago I learned that fellow blogger, Curious Cat, is John Hunter, son of the highly respected Bill Hunter. Box, Joiner, Sensenbrenner and others were family friends. John is an accomplished improver in his own right. I asked John what had happened to Madison after Sensenbrenner's departure - Sensenbrenner himself said he'd "come in second in the mayoral race" - figuring he'd give me the inside story. John gave me some tips, but went beyond that and contacted Sensenbrenner to see if I could talk to him.

I had tried to scope my article to Ft. Wayne itself, just so I'd eventually get something finished and submitted. But thanks to Doc, Ryan and John - all networking with e-mail and blogging - I've got a much more interesting set of questions to pursue. There's a community at work here.

If you want to know more, and can't wait for me to finish an article, try these sources:

City of Ft Wayne LSS improvements
Northeast Indiana TQM Network
Sensenbrenner's 15 steps to lasting quality
Quality in the community (1989)
For further speculation - will Iowa maintain its "Results Iowa" progress now that Vilsack is no longer governor? Here's the Results Iowa website. If it doesn't change, we'll have our answer.

Mar 15, 2007

Growth in Asian manufacturing could increase your business

Lean is making opportunities for manufacturers of servo drives. The servo drive is important to lean initiatives because it offers greater reliability in production machinery. Less downtime equals better flow, as users of TPM understand.

The worldwide servo drive market will expand nearly 5% during the next five years, according to an ARC Advisory Group study. Globalization is causing manufacturers to invest in automation to drive down costs and raise productivity. Servo drives are at the core of every piece of automated equipment that helps achieve higher agility and flexibility in operations.

Globalization means North American manufacturers of servo drives, or manufacturers anywhere, for that matter, could benefit from growth in Asian markets they otherwise see as a threat. Air shipping a high-value non-consumer product to Asia, rather than putting it on the proverbial slow boat to China, might be justified.

What if you don’t happen to make electric servo drives? Could you adapt what you know from a different product to start making servos? If not, how could your expertise be leveraged to tap other new markets? Where are the new markets? What lean companies benefiting from such growth might be looking for new suppliers who understand lean? Goldratt described this as being alert to the constraint in the marketplace. If you see it, you can overcome it.

To be a lean innovator, you have to constantly be on the lookout for new opportunities if you want to achieve the no-layoff ideal as you get more efficient. It’s also a key to your goal of greater prosperity and profitability.

Yes, I’m painting a rosy picture, based on no personal experience. But that’s what I do best.

Mar 8, 2007

How are stories of successful companies leading us astray?

"The Halo Effect…and the eight other business delusions that deceive managers," by Phil Rosenzweig, is something you really have to read.

The most popular and inspiring books on business success, like “Good to Great,” “Authentic Leadership,” and “In Search of Excellence,” are based on faulty research and conclusions, says Rosenzweig, formerly on the faculty of Harvard Business School and now a professor at IMD in Lausanne. He says the flawed thinking behind such books leads to delusions that won’t help managers succeed.

Rosenzweig says such books, though they stand on mountains of research, are based on biased data and unscientific analysis. They perpetuate the idea, according to Rosenzweig, that just a few factors, usually vague things like “culture” and “leadership,” will give you the keys to business success.

You probably remember a couple of rules that these best sellers can violate: correlation does not equal causation, a inspecting a “sample” consisting only of good parts will not yield good information about a process, and anecdotal evidence is interesting but not acceptable as proof of a hypothesis. Yet even people with science-based engineering backgrounds fall for the arguments in these books.

So what are the eight delusions?

1. The halo effect: When we choose to study companies based on performance – the “best” companies, the factors we think contribute to their success are usually things we simply attribute to them. The business press loves success and publishers jump at the chance to publish more books about companies recognized as “good” ones. But all this means is that we’ve selected only good parts to inspect, not a representative cross-section of all parts. The same companies can go downhill the next year, and the business press will reverse everything they said. The company praised for confidence is now criticized for complacency.

2. The delusion of correlation and causality: Whatever we ask employees or business analysts, the answers are likely to be colored by how well the company is performing at the time. People are likely to feel more satisfied or empowered, or more admiring of leaders, in a company that is doing well than one that is not. So is employee satisfaction a key to company success, or an effect of it? You can’t say.

3. The delusion of the single explanation: Looking at several hypothesized causes of good performance and singling out the one that appears most highly correlated with performance metrics is not going to reveal the meaning of the universe. For one thing, it confuses correlation with causation. For another, what about the factors you didn’t look at? And what about the companies that would score high on that metric, but were performing poorly at the time and weren’t included in the study?

4. The delusion of connecting the winning dots: If we compare all the winning companies, we can connect whatever dots we want but we won’t get an accurate picture unless we compare them to losers. When you search for stars, you find halos – the metaphor is a bit mixed, but the message is clear.

5. The delusion of rigorous research: Some authors describe the sheer volume of research material they gathered and we believe that since they worked so hard, they must have the right answers. But if hundreds of books and thousands of articles are all tainted by the halo effects they are reflecting, what happens to our data? We have quantity but not quality.

6. The delusion of lasting success: You’d think some of these flaws would be overcome by studying companies with good performance for many years, as “Build to Last” tried to do. How many companies on the S&P 500 in 1957 were still on it in 1997? Try 74. How many outperformed the S&P 500 over that period of time? Only 12. So does looking at a biased sample of 12 tell us something about the other 426? It might, but how much of the performance of those 12 of the 500 might have been caused by random factors that affected the whole market? Are we comparing winners and losers with enough statistical validity, or seeing what we want to see in the winners?

7. The delusion of absolute performance: A company may have high inventory turns, rising revenues and growing market share. That should qualify it as a winner. But if another company improves faster, it won’t matter. Performance is relative, not absolute. By looking at its own absolute performance, a company can think it’s winning but won’t see the competitor gaining advantage.

8. The delusion of the wrong end of the stick: In “Good to Great,” Collins picks a stick with “focus” on one end and “pursuing many directions” on the other. Based on the companies he studies, he concludes that focus is always the right end of the stick. Yet he fails to discuss the risks inherent with focus, such as not seeing that you’re on a dead-end road and that you need to take a risk on another direction.

9. The delusion of organizational physics: social sciences have long argued that they are just as valid as the physical sciences, and will soon figure out the immutable laws of human organizational behavior. Collins claims to be on the track. But organizational behavior is an experiment without a control. You can’t take 100 identical organizations and manage 50 with version A of a single factor and version B of another. In the real world you have an incalculable number of variables, all interacting with each other. If there are laws, it would be surprising if we were anywhere near understanding them.

Throughout the book, Rosenzweig provides data from studies that contradict the most popular, and goes to great lengths to show the flaws in that research as well. He shows some ways that meaningful research could be conducted, even if it hasn’t been done before – graduate students take note.

“The Halo Effect” is a warning to companies that think “lean” is going to cure all their ills, embark on a few superficial improvement initiatives, and get demoralized when it doesn’t turn them into overnight successes. The factors in implementing lean are subtle, interactive, and cumulative. It takes finesse to apply them in the right order to the right things. A company can be doing all the “right things” and turn out like Delphi.

Are the many case studies of success without merit? It depends on how you read them. If you’re looking for the “immutable laws,” you’ll be falling into the eight delusions. Still, success stories give people hope, a big ingredient in the struggle for change.

The book has a nice numbered list of “delusions,” which makes it easier to grasp them and keep them in mind. Despite the emphasis on the scientific method and statistical rigor, the writing is lively and conversational. It’s a compelling and quick read.

However, by picking a simple list of eight factors and attacking just a few books, Rosenzweig might be falling into his own trap. It’s a short book, so it can’t dig deep into the subject matter. It’s up to readers to apply Rosenzweig’s challenge to business writing and draw their own conclusions.

Read "The Halo Effect" straight through, then reread the list of delusions and reflect on how your reading and exposure to trainers and conference speakers may have planted some questionable ideas in your mind. Ask yourself questions about what you believe about business success. It doesn’t mean you should give up on making your company better, just don’t look for quick fixes and keep in mind that business is about probabilities, making choices, and improving your odds.

Mar 2, 2007

Suzaki said it 20 years ago

The New Manufacturing Challenge by Kiyoshi Suzaki, published in 1987, is the first book about lean that I read. It gave me an introduction to continuous improvement in manufacturing, with an emphasis on the shop floor, that has served me well for almost 20 years.

The book works for the beginner, with a minimum of jargon or Japanese terminology. It encompasses all the basic techniques of what we now call lean manufacturing with an action-oriented approach.

There is nothing new in the book, as Suzaki himself notes in his introduction. The book’s simplicity is an advantage. And although the numerous examples drawn from many companies around the world date from the 1980s, they still convey new ideas.

Kio works his way through the lean toolbox, showing how the tools are used and how they fit together. The language and examples are simple, and accessible to anyone willing to take the time to read it.

The book is notable for Suzaki’s use of visual representations of the concepts he means to convey. Not everyone learns well from written text, and not everyone reading a written text takes the time to fully concentrate on what it is saying. Suzaki’s stick people effectively show how work can be improved. He also uses simple graphics to illustrate concepts such as the difference between batch and mixed model production.

Reading the book almost 20 years after the first time I read it is interesting. Subtleties that took me many years to discover and absorb are right there. I couldn’t have fully understood them then. The book holds up over time and reflects the depth of lean principles.

Like any broad introduction, the book can give an explanation and a few illustrations and ideas on a range of subjects, but cannot go much further. Also, the beginning reader won’t find the standard Japanese lexicon, and may struggle a bit to connect terms he or she has heard with the concepts in the book.

The age of the examples means that some companies may no longer be performing well, or may even have gone out of business. That shouldn’t affect the credibility of the book, however. Sustaining lean gains is notoriously difficult. Another good thing about the age of the book is that you can pick it up used from Amazon or ABE books for about $1.

The book is simple enough to read straight through, but the reader should go back and spend more time with the illustrations and diagrams. Rereading sections periodically would be a good idea as well – especially if you read it some years ago. You could also skip around instead of reading chapters sequentially – it’s pretty modular.

If you want to use the book as a training tool, there are a couple of options. One is the reading group approach. Taking a chapter a week, all the members of the group are charged with reading it, and the group discusses it together. Individual members of the group might take turns leading discussion in successive weeks.

The video includes factory footage and interview-style discussion of the topics. I can't remember where the blonde interviewer with the short skirt came from, but she knew how to read a script and might help hold the attention of male viewers. It runs a little over three hours and comes with an instructor’s guide and workbooks. The price is about $1,000. There’s a preview tape for a nominal charge.

You'll see Kio proudly brandish the toilet brush the workers in one plant awarded him for his obsession with cleanliness. And if no one in the room gets misty-eyed when a guy stands in front of a building describing how it used to be a factory, but now houses a shopping mall, they don’t really care about saving your company from the same fate.

The New Manufacturing Challenge is well worth adding to your lean bookshelf – but be sure to read it first.

Suzaki’s credentials are solid. He was educated at an elite university in Japan, and earned an MBA at Stanford. His consulting practice and knowledge were developed on the shop floor in Japan, as well as in American companies, large and small. Clients gave him high marks for the help he gave them. Suzaki doesn’t pop up in the usual lean buzz very often, but he has written several books since, getting deeper into the “heart” of lean and the importance of people.
Copyright @ 2005-2014 by Karen Wilhelm