Correction, Clarification and Continual Learning

January 4, 2017January 4, 2017 giantknave Brain Farts Ford, H. Thomas Johnson, Henry Ford, Manufacturing, Mike Rother, Model T, Russell Ackoff, Taiichi Ohno, variety

I wrote a post some months back (July 2016) titled ‘The River Rouge – A divergent legacy’. If you haven’t read it, then it is necessary context for this post.

I received an interesting comment at the end of the post (from a contributor called Andrew) as follows:

“You’re perpetuating an inaccurate myth about the Model T and production at Highland Park. The Model T was produced with tremendous variation – far more than a modern car. There were at any given time at least six different body styles of Model T, representing a lot more complexity than a simple color change. http://www.curbsideclassic.com/wp-content/uploads/2011/02/Ford-Model-T-line-up-1911ad-lg.jpg

As to color, the Model T was available in several colors – but not black – in its early days when the production rates were low. Black was introduced, not to minimize variation, but because black paint dried quicker and enabled faster, higher production rates. By 1926, paint science matured to the point that six additional colors were introduced to go along with black (and better compete with Chevrolet).”

I replied to Andrew’s comment and promised that I would add an addendum¹…and then, as is usual, life carried on and time flew by. It is now, in this quieter Christmas/ New Year period that I realise that I have a hole to plug.

So here goes…

Correction

My original post, whilst (in my view) highly positive of what Henry Ford achieved, used the enduring “you can have any colour you like, as long as its black” line. I used this as the strap line to observe that “[Ford’s] manufacturing process was not designed to handle variety”, as explained in separate books by H. Thomas Johnson and Mike Rother.

My post then went on to contrast two very different approaches to handling the variety conundrum.

Andrew’s comment pointed out that the Model T was available:

in more than one colour; and
with different body styles.

He went on to suggest that “The Model T was produced with tremendous variety – far more than a modern car”.

Colours: Yes, I can see a number of sources that refer to different colours. However, I would suggest splitting the colour story into three parts (each of which Andrew’s comment eludes to):

The early years (1908 – 1914): From cross-checking a number of Ford related websites, it would appear that the Model T was available in a small variety of colours during its early low-level production years (grey, green, blue and red).

The volume years (1914 – 1926): This period corresponds to breakthrough improvements in producing at scale (and reducing the price)….and the only colour available was black.

In his 1922 ‘My Life and Works’ autobiography Ford refers to his salesmen wanting to cater for their customers’ every whim, rather than explaining that the product already satisfies their requirements…and it was this exchange that caused his “so long as its black” idiom:

“Therefore in 1909 I announced one morning, without any previous warning, that in the future we were going to build only one model, that the model was going to be “Model T”, and that the chassis would be exactly the same for all cars, and I remarked: “Any customer can have a car painted any color that he wants so long as it is black.”

Reference is made across a number of sources that black paint was used because its fast-drying properties aided speedy production. Other reasons suggested are the cheap cost of black paint, its durability and ease of reapplication (e.g. when repairing).

The end (1926 – 27): Colour choices were reintroduced…but this can be seen as an attempt to prop sales up and fight off the inevitable death of the Model T:

“Alfred Sloan [General Motors] began to offer inexpensive Chevrolets with amenities that the Model T lacked…..the market began to shift…styling and excitement suddenly counted to the customer.

But Henry Ford refused even to consider replacing his beloved Model T…only one person persisted in warning him of the impending crisis: his son, Edsel…it was the first of many arguments that Edsel would lose.

The Chevrolet continued to take sales from the dour Model T. By 1926, T sales had plummeted, and the realities of the market place finally convinced Henry that the end was at hand. On May 25^th 1927, Ford abruptly announced the end of production for the Model T.” (Forbes Greatest Business Stories of All Time)

Body styles: Andrew’s comment usefully provides a link to an image showing a number of different Model T body styles, though I note that the title refers to 1911 which sits within the ‘early years’ pre-mass production period.

Breaking the body styles comment into a few parts:

The chassis: The Model T Ford was made up of the chassis (see title picture of this post) and then a body connected on to it.

From what I have read (including Ford’s words), the key point about the Model T Ford was that the chassis ‘moving down the line’ were all the same. Sure, they would differ over time as the design was (regularly) improved, but not ‘in the line’.

I find the picture below quite interesting – it shows² a long line of Model T chassis waiting for a body (of differing styles) to be lowered on to it from a side process. Note the overhead rail coming in from the right.

Factory Bodies: Yes, I can see that different bodies were available – as can be made out from examining the above picture – but there was a limited range of standard designs (e.g. the Tourer, Roadster, Coupe and Sedan³⁾.

You might ask “but what about all those other body styles out there?”…

Aftermarket ‘engineering’: You can come across all sorts of weird and wacky looking vehicles all around the world that have been built on a Model T chassis. This is unsurprising given the sheer volume (and market share) of Model T’s that were out there.

A fair bit of ‘reconfiguring’ occurred, with owners hacking the car apart and customising it for their own needs. Many specialist aftermarket companies sprang up to perform conversions, even maturing to selling prefabricated kits for specific purposes, such as tractors. If you want a laugh at the sorts of conversions carried out then have a look at some of the images here (including a tank, a camper van…and a church!).

So, yes, I do need to correct my previous post’s implication that you could only ever buy a black Model T, and that one Model T was exactly the same as any other.

There was some variety, but does that mean Henry Ford had built a manufacturing process specifically aimed at handling this? And so I move on to….

Clarification

Getting back to the point within my original ‘River Rouge’ post – that of handling variety in the line:

Andrew’s comment of “The Model T was produced with tremendous variety…” might imply that Ford had indeed solved the variety riddle. I don’t think that this is the case and I’ll use a couple of passages from Ford’s own 1926 ‘Today and Tomorrow’ book to illuminate why I believe this:

“Whenever one can line up machinery for the making of exactly one thing and study everything to the end of making only that thing, then the savings which come about are startling.” (Chapter 5)

“The strongest objection to large numbers of styles and designs is that they are incompatible with economical production by any one concern. But when concerns specialize, each on its own design, economy and variety are both attainable. And both are necessary…

…we believe that no factory is large enough to make two kinds of products. Our organisation is not large enough to make two kinds of motor cars under the same roof.” (Chapter 7)

An underlying philosophy of Ford’s tremendous production success was a standard product (i.e. the opposite of variety)…which nearly became his undoing and set his organisation onto a path of catch-up with General Motors from the late 1920s onwards.

…none of this takes away from what Ford achieved and what then happened in American manufacturing and, in contrast, across the world in Japan. To summarise:

Henry Ford made amazing advances in respect of manufacturing, but the Model T’s homogeneity became its Achilles heel (a fact that he eventually conceded to his son Edsel and to his competitors);
In general, American manufacturing from the 1950s onwards went in the direction of scale and ‘unlearned’ much of what Ford had shown them; whilst
Toyota (learning from Ford) carried on in the direction of flow and worked out methods of handling variety in the line…thus achieving great things.

It’s worth reflecting that Taiichi Ohno credits Henry Ford with Toyota’s foundations:

“Taiichi Ohno…always spoke glowingly of Ford’s achievements…In 1982, Philip Caldwell, then head of Ford Motor Company, visited Japan. When Caldwell asked Eiji Toyoda, head of Toyota Motors, where Toyota had learned the production methods they employed so successfully in the 1970’s, Toyoda replied, ‘there’s no secret to how we learned to do what we do, Mr Caldwell. We learned it at the Rouge.’” (Johnson, quoting from David Halberstam’s ‘The Reckoning’)

Continual Learning

Andrew’s comment on my original post provided me with the impetus to learn some more.

I entered into a useful dialogue with Tom Johnson and Mike Rother;
I bought and read Ford’s book ‘Today and Tomorrow’;
I read around (and cross-checked) a fair bit of internet content; and
…I pondered what all of that lot meant.

I reflect on a wonderful Ackoff quote:

Although being taught is an obstruction to learning, teaching is a marvellous way to learn!”

i.e. it is in the act of attempting to explain something to others (e.g. via a post) that we can truly learn.

(I believe that) I now know more…but I’m even more certain that there’s much more to learn. A never-ending journey 🙂

Footnotes

1. Writing an Addendum: I am mindful that a number of you may have read my original post but not seen Andrew’s comment or my reply. So, rather than allowing this to remain somewhat hidden, I thought it only right (and respectful of Andrew’s fair and useful comment) to elevate my response* to a further post.

(* I am not a fan of the ‘gutter press’ splashing scandalous statements across their front pages, only to publish a unapologetic, one-line ‘retraction’ in tiny text somewhere buried on page 13)

2. Using photos: I am mindful that Ford’s production processes changed all the time and I have been warned to be careful when using a black and white picture of Model T production methods – such a picture shows how it worked at a point in time…and could easily have changed radically very soon afterwards!

3. Body Styles information taken from http://www.fordmodelt.net/model-t-ford.htm. It shows that each of the main body styles evolved over time e.g. the Touring car went from 2 doors from 1909, to 3 doors from 1912 and then 4 doors from 1926.

…and I just have to add a picture of (what I understand to be) a Model T chassis with a body style of a house – definitely ‘after market’:

Depths of ‘Transformation’

September 21, 2016September 22, 2016 giantknave Brain Farts Dan Jones, Grady Booch, Jim Womack, John Seddon, Lean, Mike Rother, Taiichi Ohno, Toyota, TQM, transformation

I’ve been meaning to write this post for 2 years! It feels good to finally ‘get it out of my head’ and onto the page.

It’s about that lovely ‘Transformation’ word.

Before I go on, I’ll repeat a definition from an earlier post:

“Transformation: In an organisational context, a process of profound and radical change that orients an organisation in a new direction and takes it to an entirely different level of effectiveness….transformation implies a basic change of character and little or no resemblance with the past configuration or structure.” (businessdictionary.com)

To repeat the key phrase: An entirely different level of effectiveness! …and, just in case you missed it, the word is effectiveness, not efficiency.

I’m going to outline 3 levels of (supposed) transformation and I’ll do this by borrowing the bones of an idea from Mike Rother’s excellent ‘Toyota Kata’ book and extend it with a large dose of my own ‘poetic license’.

Level 1 Transformation: ‘On the surface’

So, picture the scene: It’s the late 1970s. Your organisation desperately wants to improve and, on looking around for someone achieving brilliant results, you spot the awesome Toyota (or such like¹).

You go on a Toyota factory visit. You are amazed at what you see and excitedly ask them how they do it.

You easily observe (‘on the surface’) lots of obvious methods and tools…and so you grab evidence of how these are carried out – e.g. some template forms, and the instructions that go with them. You also take lots of pictures of their (visual management) walls to show all this working in situ.

You run back home, hand out the methods and tools and mandate that, from now on, this is what we are doing.

You helpfully provide training and (so called) ‘coaching’…and you put in place ‘governance’ to ensure it’s working. You roll it all up together and you give it a funky title…like your Quality Toolbox. Nice.

So what happens?

Well, yep, those tools and methods sure are ‘shiny new’ and easily applied. There’s an initial buzz, probably because of senior management focus…and pressure to prove the comedy ‘Return on Investment’ (ROI) calculation that had to be set out in the short-term thinking ‘will you pay for our factory trip?’ business case.

But the initial effects fall away. Anything achieved was a one-off, or of limited and low level benefit. The changes aren’t sustained – with a slide back to the old state. People start to misuse the tools and methods, and do much damage rather than good. There is a brief and ugly fight with the ‘methods and tools’ compliance police but disillusionment sets in and the early good work becomes discredited and abandoned (just like the last silver bullet…and the one before that…)

Timely reminder: “A fool with a tool is still a fool” (Grady Booch)

Note: This ‘on the surface’ transformation attempt has been likened to organisations going over to Japan in the late 1970s and early 1980s and coming home to fanatically ‘do Total Quality Management’ (TQM)…and then quietly dropping it a few years later. Sure, some organisations sustained it but most didn’t.

Level 2 Transformation: ‘Under the skin’

So it’s now the 1990s. The methods and tools that came out of the initial Toyota factory visit weren’t sustained but the pressure is still on (and mounting) to transform your organisation…and your management can’t help noticing that Toyota are still doing amazing!

“Perhaps we didn’t look hard enough or close enough or long enough…perhaps we should go back and have a look ‘under the skin’.”

…and so you go for another factory visit (once you’ve been given permission following another well written story business case 🙂 ).

This time you take real care – studying ‘at the gemba’ for weeks, asking questions, watching activities, understanding the nature of changes being made to the system before you.

“Eureka! There’s something underneath those methods and tools! We can see that there’s an underlying logic that we missed last time round…oooh, we could codify them into a set of principles!”

And here’s basically what you arrive at:

0. Everything should belong to, or support, a value stream (a horizontal flow from customer need, through to its satisfaction)

…and for each value stream we should:

1. Specify value, where this is through the eyes of the customer; then

2. Identify all the actions performed within the value stream, and expose and remove the obvious waste; then

3. Create flow by understanding and removing the barriers; then

4. Establish pull by producing only what is needed, when requested; and finally

5. The ‘golden nugget’: we should continually strive for perfection because this is a never-ending journey

Wow, that was profound – your factory tour team now need to give it a name!

And so, after a fun focus group, a young member of your team called John² shouts out “It needs less of everything to create a given amount of value, so let’s call it ‘Lean’.”

Whoop, whoop, he’s only gone and cracked it!

You run back home to tell everyone about the wonders of ‘Lean’. You hand out books, provide training courses, coaching and mentoring and you slot all those wonderful tools and methods nicely into their place…neat…this is going to be great!

So what happens?

Well, everyone absolutely LOVES the principles. They make sooo much sense. They particularly liked playing with Lego in the training sessions to demo flow, pull, kanban and ‘stop the line’ thinking.

But after a while (and some short-term gains) you realise that there’s a huge tension building. No one can make those darn principles work because they continually clash with existing management practises.

Your senior management employ a gaggle of so-called Lean coaches to try to change the people at the bottom whilst they carry on at the top as before!

Your ‘Lean Office’ has become an island of coaches doing great work with the people but unable to turn the tide. Coaching conversations end with responses like:

“Yes, I can see that would be the right thing to do for the value stream…but that’s not what my objectives, performance rating and bonus is based on…or what my manager above me would support…so I’ll stick to soul-destroying fighting within my silo. Sorry about that 😦”

This culminates in huge frustration; a revolving door of broken coaches; and many a good employee finding a better organisation to work for. If you ran an employee survey at this point, the results would make for ugly reading – you’ve created a complete divide between worker reality and management ‘cloud cuckoo land’.

Oh, and that lean word? Well it became capitalised! LEAN…as if it were a thing. You’ve all forgotten that it was just a label thought up by John in a focus group merely to describe what the factory visit team saw.

Pause for reflection: Taiichi Ohno is considered to be the father of the Toyota Production System (TPS) but he didn’t want it to be written down³ (codified) because he wanted it to remain dynamic.

And as for that name:“Ohno did not call his innovation ‘lean’ – he didn’t want to call it anything. He could, perhaps foresee the folly of a label.” (John Seddon)

Caution: …and if you did this ‘under the skin’ (supposed) transformation within a service organisation, you may find (if you properly stood back to look at it!) that you’d totally f@ck$d it up!

Credit: The ‘Level 2’ principles jotted down above are the core of the 1996 book ‘Lean Thinking’ by Womack and Jones….which they wrote following their research in Japan. They explicitly set out 5 principles, with a foundational one implied (hence why I’ve labelled it as ‘principle nought’).

Level 3 Transformation: ‘In the DNA’

…and so to the 2000s. The pressure to change your organisation is relentless – the corporate world is ‘suffering’ from seemingly constant technological disruption…but Toyota continues to be somehow different.

You pluck up the courage and ask for a sabbatical for 6 months – you want to find the meaning of life…well, perhaps not that deep…but you sure as hell want to know what Toyota have got that you don’t…and to work this out, you are going to have to go in deep – to their DNA.

Toyota are happy to see you again. But, rather than repeating what you did on the last two trips, you come straight out with it:

“Okay, you’ve shown me your tools and methods…you’ve let me uncover your principles…and I know that these aren’t the answer! What are you hiding from me?! Come on, I get it, it’s a competitive world out there but PLEASE let me in on your secret.”

The Toyota managers are perplexed. They don’t know what else they can do. They are adamant that they aren’t hiding anything from you.

…and so, rather than go straight back home empty handed, you ask if you can work with Toyota to experience what day-to-day work is actually like. They humbly agree to your request.

And six months later your mind has been totally blown!

You really get it….no, REALLY GET IT!

You couldn’t see the wood for the trees but now it’s as obvious as can be.

It’s all about the environment created by management’s actions, which come from their beliefs and behaviours about human beings: about society, about customers…and, most profoundly, about employees.

This is invisible on a factory visit! But it’s still there. It’s simply ‘in the DNA’.

Sure, you could provide a list of attributes as to what this looks like…but management can’t just do them, they have to believe in them – in fact, ‘be’ them!

Further, there’s nothing to be ‘implemented’ because it can’t be!

Everything flows from management’s beliefs and behaviours: It’s from these that Toyota creates new principles, methods and tools all the time…and throws out old ones that are no longer appropriate. Their systems thinking and human thinking is solid and profound, whilst their method is dynamic and agile.

…and the realisation sinks in: No wonder Toyota are happy to open their door to anyone. The thing that makes them great can’t be copied. It has to be lived and breathed…and nurtured from the shop floor all the way up. Oh sh1t!

…and so to your new headache: you totally ‘get it’ but how on earth do you change your organisational system – now that is THE nut to crack. That would be transformational!

Reflection time:

So ‘On the surface’, ‘Under the skin’ or ‘In the DNA’: What level of transformation are you playing at?

…if you are at level 1 or 2 then it’s not actually transformation.

…if you are truly at level 3, then here’s the final mind blowing bit – it is self-sustaining.

To close: I have been asking myself a HUGE question for a fair while now: Can management’s beliefs and behaviours change within a large floating (i.e. short-term thinking) shareholder owned organisation. I’m nearly there with writing down my thoughts. Watch this space…

Footnotes:

1. Just Toyota? I use Toyota in this story since everyone knows who they are…and visits to their factories is precisely what happened regularly over the last several decades. But it isn’t just Toyota.

Your own ‘Toyota’ factory visit could be to another great organisation…and it needn’t be a factory making products – it could be a service organisation. Handelsbanken would be a great financial services example.

Though beware, there aren’t that many ‘true Toyotas’ out there. And perhaps none that have sustained it for so long.

2. ‘John’: He’s even called John in the true story – John Krafcik, a young researcher on Womack’s MIT research team…and those were his words back in 1987 (as recalled by Womack) to give birth to the Lean label.

3. Writing it down: Ohno finally relented when he retired in 1978 and wrote a book on TPS.

4. Clarification: I think a great deal of Lean Thinking, but not a lot about ‘LEAN’ – the implementation movement. I respect Womack and Jones, and their writings…but I note that my favourite Womack book is ‘Gemba Walks’ written about a decade after ‘Lean Thinking’ in which he humbly reflects that it was about far more than the tools and the principles. It was really about the management system (or, in my words, the DNA).

Oxygen isn’t what life is about

April 21, 2016April 21, 2016 giantknave Brain Farts Aaron Dignan, Alfred P Sloan, H. Thomas Johnson, Mike Rother, Profit, Purpose, Richard Branson, Sam Walton, Simon Sinek, System

I often hear people talking about the need for profit and that my thinking must address this fact. I respond that it does, but not as they might think. This post tries to explain.

There are two types of ‘for profit’ organisational thinking, both of which consider that profit is necessary…and there the similarity ends.

Type 1: Considers profit as the overall goal and purpose of the organisation ‘at any cost’;

Type 2: Perceives profit as necessary for the organisation’s survival, but not its reason for existence. Profit to such an organisation “will be seen as breathing is to a human organism, but not what life is about.” (H. Thomas Johnson)

The difference in management systems and outcomes for these two types of thinking will be profound.

Below are a number of convergent viewpoints from key thinkers backing a ‘Type 2’ view on profit:

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Aaron Dignan, in his talk on the operating model that is eating the world, explains the over-riding importance of purpose. He uses the examples of Facebook, Apple, Amazon, Tesla (and many other highly successful organisations operating beyond traditional 20^th century western management thinking) to explain that:

It’s not about the money, it’s about the mission [purpose]. The idea of putting values above revenues is really important and defines how powerful that purpose can be!
- Put another way, placing profit above your stated purpose means that it usurps this purpose.

The leaders of these organisations, such as Amazon’s Jeff Bezos, make this very clear to the market: “This is our mission, it’s long term, if you don’t like it, get out of our stock”.
- This message is very useful for the company and potential investors – it provides transparency; allows the company to focus on what it is actually trying to do; and it allows prospective and existing investors to make clear investment decisions…it also provides them with a high degree of confidence in the organisation.

Playing a long game is a really good sign that an organisation has its purpose screwed on tight. They’re not playing to the (financial reporting) quarter or to ‘the man in the street’, they are playing to the purpose…and that means that they might have to make long term bets and let things play out and then cash out over time.

Cause and effect: If you truly focus on purpose, the effect will be a highly successful organisation (and happy investors).

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Sir Richard Branson has a very clear philosophy on priorities : “put your staff first, customers second and your shareholders third”. This is the complete opposite of the traditional view, but there is a simple yet profound logic within which Branson says “should go without saying and it’s surprising that it still doesn’t in many organisations”.

Put simply, if the people working at your company are 100% proud of the job they are doing, are given the tools to do a good job, are treated well and (consequently) are proud of the brand then they are going to truly look after the customer.

Cause and effect: The shareholders do well because the customers do better because your staff are (truly) happy.

A caveat: Don’t think that you can hoodwink your staff (i.e. with words, ‘canned fun’ and/or bribes) into thinking that they are ‘first’ if this is not so…they will see right through such a facade.

A reality check: If your people aren’t proud of what they do/ where they work then you have a problem with your priorities.

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Mike Rother, in his book ‘Toyota Kata’, sets out an interesting historical perspective of how we arrived at the traditional 20^thcentury (Western) management approach. In it he quotes Alfred P Sloan (President and then Chief Exec. and Chairman of General Motors between 1923 – 56) as saying:

“We are not in the business of making cars, we are in the business of making money.” *

You might come back at me and say, “well he’s right isn’t he? We might ‘say’ our purpose is ‘xyz’ but it’s actually about the money.”

To this, I would say that we need to recognise that customer, employee and investor make up necessary components of an organisation’s system and, going back to harmony or cacophony, we should understand that we can’t put one component (e.g. investors) above the others and expect it to be good for the system. In fact, to do so will cause unknown and unknowable harm to the system.

We need to understand the system and its purpose and then act in such a way as to derive a win/win/win scenario….which goes back to Dignan’s point about purpose and Branson’s point about priorities.

Cause and effect: Optimising the system will be good for all of its components over the long term.

A caveat: If you ‘say’ it’s all about purpose but underneath it all it isn’t then don’t be surprised at your inability to move towards it. This is a classic case of POSIWID.

* Note: General Motors made a 2007 financial loss of US$38.7 Billion and, after running out of cash soon after, entered ‘Chapter 11’ bankruptcy in 2009. After selling off or discontinuing many brands, it emerged as a new company with new management and financial bailouts from both the US and Europe, with a net cost to US taxpayers (to date) of US$12 Billion.

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Thomas (Tom) Johnson, Professor of Accounting and author of the book ‘Profit beyond measure’ wrote in an article on the excellent ‘Lean Edge’ site that “financial results such as revenues, costs and profits are by-products of well-run human-focused processes”.

He goes on to make the following comparison:

“…the Toyota people in Japan who founded and grew the company down to the 1990s saw the company as a disciplined organization of ’employee/suppliers’ whose purpose is to serve ‘customers’ in a way that earns sufficient profit to ensure the long-term survival of the organization.

…those of us from the West, on the other hand, for the past 30 to 40 years have viewed the purpose of business as making profit, by any means considered legal.

…the contrasting view held by Toyota people who founded and built that company from the 1950s to 2000 considers that a business exists to provide opportunity for humans to exercise their inherent creativity in gainful employment serving needs of other humans. The people who held that view saw the purpose of the business to be continuous improvement of a system designed to enable humans to serve other humans gainfully and sustainably”

It’s interesting to note that there are plenty of organisations around the world (Dignan refers to some in his video above) that have understood the ’cause and effect’ of Toyota’s view i.e. that everyone (including investors) does well if an organisation sets out and truly pursues its purpose, with its long term success being the outcome.

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And finally, if we go back to Simon Sinek’s ‘start with why’, he makes some things very clear:

‘Why’ is not about profit…that’s just an outcome:

“By why, I don’t mean to make a profit, that’s a result. By why, I mean what’s your purpose, your cause, your belief? Why does your organisation exist? Why do you get out of bed in the morning and why should anyone care?”

You can’t just state your ‘why’ (your purpose). It actually has to be what you believe! If your actions are about profit over your stated purpose then this evidence will be seen, taken on board and acted upon accordingly:

“…what you do serves as the proof of what you believe.”

People ultimately follow leaders for themselves. If the actions of those leaders do not align with the beliefs of the workers then don’t expect them to follow:

“We follow those who lead, not because we have to but because we want to. We follow, not for them but for ourselves.”

Finally, there’s a really important point implied but not explicitly stated by Simon Sinek: The leaders of an organisation need to provide the environment, through an appropriate management system, that enables the purpose and does not frustrate it.

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In summary:

You can state a purpose….but you’ve got to actually live it to move towards it;
An organisation’s purpose should NOT be ‘profit’, even though this outcome is necessary for the system and those that finance it;
If you think it’s the other way around i.e. that you need to state a purpose so as to chase profit, then you are likely to fall a long way short of what you could achieve…and will put your long term survival at serious risk;
A focus on short term profits and results for the market will likely destroy unknown and unknowable value.

For those of you who think “what a load of hippy liberal rubbish, of course it’s all about the shareholder”, here’s a really nice quote to consider from Sam Walton (founder of Wal-Mart):

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

…how would those shareholders feel if their investment became worthless?

Note: The above raises a ‘big hairy question’ – There are many corporate forms…but which ones help and which ones hinder an organisation’s ability to truly live its stated purpose? This is something that the world’s politicians and financial markets are currently grappling with. Here’s an interesting ‘Economist.com’ article about this.

Crossing the Divide

February 29, 2016May 25, 2016 giantknave Brain Farts Change, Experiment, Improvement, John Seddon, Lean, Mike Rother, Systems Thinking, Toyota

Are you interested in crossing that divide?

Okay, listen up 🙂 …this post is my attempt at one of those important bringing-it-all-together ones that provide a big message (see – look at the picture!)…which means that it’s a bit longer than normal because it needs to be.

I thought about breaking it into pieces and publishing bit-by-bit but this would make it longer (each bit needing a top and a tail) and hard to mentally put back together.

So I’ve decided to keep it together and let you, the reader, decide how you consume it. You might like to read it in one; or dip in and out of it during your day; or even set yourself an alert to finish it the next day…so (as Cilla Black used to say) “the choice is yours”. Here goes…

Mike Rother wrote what I believe to be, a very important book (Toyota Kata) about how organisations can improve, and what thinking is stopping them.

In particular, Chapter 9 of the book deals with ‘Developing Improvement Kata [pattern] behaviour in your organisation’. I thought it worthwhile posting a summary of his excellent advice derived from his research….

…and I’ll start with a highly relevant quote:

“Do not create a ‘Lean’ department or group and relegate responsibility for developing improvement behaviours to it.

Such a parallel staff group will be powerless to effect change, and this approach has been proven ineffective in abundance.

Use of this tactic often indicates delegation of responsibility and lack of commitment at the senior level.” (Mike Rother)

Many an organisation has gone down the ‘Lean department’ (or some such label) route…so, given this fact, here’s what Rother goes on to say, combined with my own supporting narrative and thought:

1. Be clear on what we are trying to achieve

If you really want to cross that divide then the challenge that we should be setting ourselves is learning a new way of thinking and acting such that we:

get the ‘improvement behaviour’ habit into the organisation; and then
spread it across the organisation so that it is used by everyone, at every process, every day.

And to make it even more ‘black and white’: the challenge is NOT about implementing techniques, practices or principles on top of our existing way of managing.

It means changing how we manage. This involves a significant effort and far reaching change (particularly in respect of leadership).

2. What do we know about this challenge?

Toyota (from the foundational work of Taiichi Ohno) is considered the world leader in working towards this challenge…they’ve been working towards it for 60+ years;
- We can study and learn, but should not merely copy, from them;
The start, and ever-continuing path, is to strive to understand the reality of your own situation, and experimenting. This is where we actually learn;
No one can provide you with an ‘off-the-shelf’ solution to the challenge:
- There isn’t likely to be an approach that perfectly fits for all;
- It is in the studying and experimenting that we gain wisdom;
- ‘Copying’ will leave us flailing around, unknowingly blind;
- Our path should continually be uncertain up until each ‘next step’ reveals itself to us.

Wow, so that’s quite a challenge then! Here are some words of encouragement from Rother on this:

“There is now a growing community of organisations that are working on this, whose senior leaders recognise that Toyota’s approach is more about working to change people’s behaviour patterns than about implementing techniques, practises, or principles.”

3. What won’t work?

If we wish to spread a new (improvement) behaviour pattern across an organisation then the following tactics will not be effective:

Tactic a) Classroom training:

Classroom training (even if it incorporates exercises and simulations) will not change people’s behaviours. If a person ‘goes back’ into their role after attending training and their environment remains the same, then expect minimal change from them.

“Intellectual knowledge alone generally does not lead to change in behaviour, habits or culture. Ask any smoker.”

Rother makes the useful contrast of the use of the ‘training’ word within sport:

“The concept of training in sports is quite different from what ‘training’ has come to mean in our companies. In sport it means repeatedly practicing an actual activity under the guidance of a coach. That kind of training, if applied as part of an overall strategy to develop new behaviour patterns is effective for changing behaviours.”

Classroom training (and, even better, education) has a role but this is probably limited to ‘awareness’….and even that tends to fade quickly if it is not soon followed by hands-on practising with an appropriate coach.

Tactic b) Having consultants do it ‘to people’ via projects and workshops:

Projects and workshops do not equal continuous improvement. This is merely ‘point’ improvement that will likely cease and even slip backwards once the consultant (or ‘Black Belt’) has moved on to the next area of focus.

Real continuous improvement means improving all processes every day.

Traditional thinking sees improvement as an add-on (via the likes of Lean Six Sigma projects) to daily management. Toyota/ (actual) Lean/ Systems thinking (pick your label!) is where normal daily management equals process improvement i.e. they are one and the same thing.

To achieve this isn’t about bringing experts in to manage you through projects; it is to understand how to change your management system so that people are constantly improving their processes themselves. Sure, competent coaches can help leaders through this, but they cannot ‘do it for them.’

And to be clear: it is the senior leaders that first need coaching, this can’t be delegated downwards.

“If the top does not change behaviour and lead, then the organisation will not change either.”

Tactic c) Setting objectives, metrics and incentives to bring about the desired change:

There is no combination of these things that will generate improvement behaviour and alter an organisation’s culture. In fact, much of this is the problem.

If you don’t get this HUGE constraint then here are a few posts already published that scratch the surface* as to why: D.U.M.B., The Spice of Life, and The Chasm

(* you are unlikely to fully ‘get’ the significance from simple rational explanations, but these might make you curious to explore further)

Tactic d) Reorganising:

Shuffling the organisational structure with the aim (hope) of stimulating improvement will not work. Nothing has fundamentally changed.

“As tempting as it sometimes seems, you cannot reorganise your way to continuous improvement and adaptiveness. What is decisive is not the form of your organisation, but how people act and react.”

4. How do we change?

So, if all those things don’t work then, before we jump on some other ideas, perhaps we need to remind ourselves about us (human beings) and how we function.

The science of psychology is clear that we learn habits (i.e. behaviours that occur unconsciously and become almost involuntary to us) by repeated practice and gaining periodic fulfilment from this. This builds new and ever strengthening mental circuits (neural pathways).

Put simply: we learn by doing.

We need to start by realising that what we do now is mostly habitual and therefore the only way to alter this is by personally and repeatedly practising the desired (improvement pattern) behaviours in our actual daily work.

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” (Aristotle)

“To know and not to do is not yet to know.” (Zen saying)

Further, a coach can only properly understand a person’s true thinking and learning by observing them in their daily work.

In summary, we need to:

practise using actual situations in actual work processes;
combine training with doing, such that the coach can see in real time where the learner is at and can introduce appropriate adjustments; and
use the capability of the actual process as the measure of effectiveness of the coaching/ learning.

5. Where to start?

So, bearing in mind what is said above (i.e. about needing to learn for yourselves), what follows is merely about helping you do this…and not any ‘holy grail’. If there is one then it is still up to you to find it!

An experienced coach:

“Coaches should be in a position to evaluate what their students are doing and give good advice…in other words, coaches should be experienced….

…If a coach or leader does not know from personal experience how to grasp the current condition at a process, establish an appropriate challenge [towards customer purpose] and then work step by step [experiment] towards it, then she is simply not in a position to lead and teach others. All she will be able to say in response to a student’s proposals is ‘Okay’ or ‘Good job’ which is not coaching or teaching.

The catch-22 is that at the outset there are not enough people in the organisation who have enough experience with the improvement kata [pattern] to function as coaches…

…it will be imperative to develop at least a few coaches as early as possible.” (See establishing an Advance Group below)

A word of warning: Many people assume a coaching role, often without realising that they are doing so. Such a presumption seems to be something that anyone hierarchically ‘senior’ to you considers to be their right. As in “Now listen up minion, I am now going to coach you – you lucky thing!*”

(* I had a rant about this in my earlier post on ‘people and relationships’ …but I’m okay now 🙂 )

So: Before any of us assert any supposed coaching privileges, I think we should humbly reflect that:

“The beginner is entitled to a master for a teacher. A hack can do incredible damage.” (Deming)

Who practises first?

The improvement pattern is for everyone in the organisation……but it needs to start somewhere first.

“Managers and leaders at the middle and lower levels of the organisation are the people who will ultimately coach the change to the improvement kata [pattern], yet they will generally and understandably not set out in such a new direction on their own. They will wait and see, based on the actions (not the words) of senior management, what truly is the priority and what really is going to happen.”

The point being that, if the organisation wants to effect a change in culture (which is what is actually needed to make improvement part of daily management) then it requires the senior managers to go first.

This statement needs some important clarifications:

It isn’t saying that senior leadership need to stand up at annual road-shows or hand out some new guru-book and merely state that they are now adopting some shiny new thing. This will change nothing. Far better would be NOT to shout about it and just ‘do it’ (the changed behaviours)…the people will notice and follow for themselves;

It isn’t saying that all senior leaders need to master all there is to know before anyone else can become involved. But what is needed is a meaningful desire for key (influential) members of the senior team to want to learn and change such that their people believe this;

It isn’t saying that there aren’t and won’t be a rump of middle and lower managers who are forward thinking active participants. They exist now and are already struggling against the current – they will surge ahead when leaders turn the tide;

It isn’t saying that the rest of the people won’t want the change: the underlying improvement behaviours provide people with what they want (a safe, secure and stimulating environment). It is just that they have understandably adopted a ‘wait-and-see’ habit given their current position on a hierarchical ladder and the controls imposed upon them.

Establishing an Advance Group

The first thing to notice from this sub-title is that it is NOT suggesting that:

we should attempt to change the whole organisation at once; or that
we should set up some central specialist group (as in the first quote in this post)

Instead, it is suggesting that we:

find a suitable¹ senior executive to lead (not merely sponsor!²);
select/ appoint an experienced coach;
select a specific value-adding business system³ to start with;
form a suitable¹ group of managers (currently working in the system, not outside it);
provide initial ‘awareness’ education;
‘go to the Gemba’ and study⁴ to:
- gain knowledge about purpose, demand, capability, and flow; and then
- derive wisdom about the system conditions and management thinking that make all this so;
perform a series of improvement cycles (experimenting and learning);

reflect on learnings about our processes, our people and our organisation…
- …deriving feelings of success and leading to a new mindset: building a capability to habitually follow the improvement routine in their daily management;
- …and thereby crafting a group of newly experienced managers within the organisation who can go on to coach others as and when other business systems wish to pull their help.

(for explanatory notes for superscripts 1 – 4, see bottom of post)

Caution: Don’t put a timescale on the above – it can’t be put into an ‘on time/budget/scope’ project straight jacket. The combination of business system, team and organisational environment is infinitely varied…it will take what it takes for them to perform and learn. The learning will emerge.

A number of things should be achieved from this:

meaningful understanding and improvement of the selected business system’s capability;
highly engaged people who feel valued, involved and newly fulfilled;
a desire to continue with, and mature the improvement cycles (i.e. a recognition that it is a never-ending journey);
interest from elsewhere in the organisation as they become aware of, develop curiosity and go see for themselves; and
A desire to ‘roll in’⁵ the change to their own business system.

A caveat – The big barrier:

Every system sits within (and therefore is a component of) a larger system! This will affect what can be done.

If you select a specific value-adding business system, it sits within the larger organisational system;

If you move up the ‘food chain’ to the organisational system, it potentially sits within a larger ‘parent organisation’ system

….and so on.

This is a fact of life. When studying a system it is as important (and often more so) to study the bigger system that it sits within as studying its own component parts.

It is this fact “that so often brings an expression similar to that of the Sheriff Brody in the film ‘Jaws’ when he turns from the shark and says ‘we need a bigger boat’. Indeed we do!” (Gordon Housworth, ICG blog)

If the bigger system commands down to yours (such as that you must use cascaded personal objectives, targets, contingent rewards and competitive awards) and your learning (through study and experimentation) concludes that this negatively affects your chosen business system then you need to move upstairs and work on that bigger system.

You might respond “But how can we move upstairs? They don’t want to change!”. Well, through your studying and experimentation, you now have real knowledge rather than opinions – you have a far better starting point!

…and there you have it: A summary of Mike Rother’s excellent chapter mixed with John Seddon’s thinking (along with my additional narrative) on how we might move towards a true ‘culture of improvement’.

There is no silver bullet, just good people studying their system and facilitating valuable interventions.

Notes: All quotes used above are from Mike Rother unless otherwise stated.

Suitable: A person with: an open mind, a willingness to question assumptions/ conventional wisdom, and humility; a desire and aptitude for self-development, development of others and for continual improvement (derived from Liker’s book – The Toyota Way to Lean Leadership)
On leading: “Being a…Sponsor is like being the Queen: you turn up to launch a ship, smash the champagne, wave goodbye and welcome it back to port six months later. This attitude is totally inappropriate for leading…in our business environment. We need ownership that is one of passion and continual involvement…” (Eddie Obeng)

The business system selected needs to be a horizontal value stream (for the customer) rather than a vertical silo (organisational function) and needs to be within the remit of the senior executive.

Study: Where my post is referring to Seddon’s ‘Check’ model

Roll in: The opposite of roll out – pulling, instead of pushing. Please see Rolling, rolling, rolling… for an explanation of the difference.

Farmers and Facilitation

November 9, 2015November 9, 2015 giantknave Brain Farts Facilitation, Jeffrey Liker, Jim Womack, John Seddon, Leaders, Management, Mike Rother, Promotion, Toyota

I’ve been meaning to write a post about promotion (into, and through the hierarchy of management) for a while now…it’s taken me a bit to frame it. Here’s ‘part 1’:

Before considering promotion we should ask ourselves…

What is the work of management?

A great deal has been written on this question. Womack’s essay ‘The work of management’ gives us an all too familiar view as to what management actually means in practice:

“Most managers I observe spend most of their time with incidental work – box ticking, meetings that reach no actionable conclusions, report writing, personnel reviews that don’t develop personnel, etc. And in the time left over they do rework. By the latter I mean the fire fighting to get things back on course as processes malfunction. Most managers seem to believe that this is their ‘real’ work and their highest value to their organisation.”

Is this what we actually want our managers to be doing? Does this create value or is it just about survival?

Who do we hire/ promote into management?

In another of his essays, ‘Fewer Heroes, More Farmers’, Womack explains that when he asked a Command & Control CEO at a very large American Corporation about his management hiring/ promotion logic he got the following in reply: “I search for heroic leaders to galvanize my business units. I give them metrics to meet quickly. When they meet them they are richly rewarded. When they don’t, I find new leaders.”

Womack went on to ask this CEO, given the very high level of turnover of his business unit heads, “why does your company need so many heroes? Why don’t your businesses consistently perform at a high level so that no new leaders are needed? And why do even your apparently successful leaders keep moving on?”

He got the usual answers in reply: “business is tough, leadership is the critical scarce resource, and that a lot of turnover indicates a dynamic management culture.”

…and yet such businesses preside over:

A confusion as to its purpose (a mismatch between what is stated and reality);
The constant rolling out of the latest ‘revitalising’ programme from the top;
Poorly performing processes, that tend to get worse instead of better;
Dispirited people operating these broken processes at every level of the organisation; with
Mini-heroes everywhere devising workarounds.

Rather than heroes, Womack suggests that we need farmers whose role is to steadily tend every important process, continually asking three simple questions:

Is the business purpose of the process [in the eyes of the customer] correctly defined? [and Seddon would add ‘is its capability measured?’]
Is action steadily being taken to create value, flow and pull in every step of the process while taking out waste?
Are all of the people touching the process actively engaged in making it better?

“This is the gemba mentality of the farmer who, year after year, plows a straight furrow, mends the fence and obsesses about the weather, even as the heroic pioneer or hunter who originally cleared the land moves on.

Why do we have so many heroes and so few farmers, and such poor results in most of our organisations? Because we’re blind to the simple fact that business heroes usually fail to transform businesses. They create short-term improvement, at least on the official metrics. But these gains either aren’t real or they can’t be sustained because no farmers are put in place to tend the fields. Wisely, these heroes move on before this becomes apparent.

Meanwhile, we are equally blind to the critical contribution of the farmers who should be our heroes. These are the folks who provide the steady-paced continuity at the core of every lean enterprise”.

Now, after reading the above back to myself, I can feel a back lash from the current cool management buzz of ‘everything today is about innovation!’…as in “but the world is ever changing Steve! We can’t just rely on Continuous Improvement – we’ve got to constantly reinvent ourselves or else we will get left behind!”

I agree! What is written above isn’t confined to making small step changes and doesn’t constrain discontinuous (breakthrough) improvements. Womack’s 3 questions equally apply for the seeds of innovation to blossom within a healthy working environment.

Conversely, hero management with financial targets and contingent rewards can seriously damage the chances of true and meaningful innovation from happening. (Both Alfie Kohn and Dan Pink explain the research showing the harm that incentives do to innovation).

If your purpose is clear and everyone is working together towards it (not towards individual targets) then you will likely alternate between many small steps and infrequent leaps as new ideas and technologies come along and existing ones are steadily improved.

Who should we want as our managers?

“The greatness in people comes out only when they are led by great leaders” (Akio Toyoda)

Liker, in his excellent book ‘The Toyota Way to Lean Leadership’, explains Toyota’s leadership development model. He explains it in four building blocks:

(Note: whilst I am mixing the words ‘leader’ and ‘manager’, there is a big difference between them. Please reflect on Confusion over two words)

First, to be considered for leadership, a person has to be committed to self-development i.e. to constantly seek to improve themselves and their skills. This is enabled and assessed by those ahead¹ of them providing suitable challenges, space and coaching to allow self-development to occur.

Clarification: You may have years of experience and/or rolls of qualifications…but this doesn’t demonstrate that you have, or can, self-develop:

“What is often mistaken for 20 years’ experience is just 1 year’s experience repeated 20 times” (Source unknown)

Not everyone will be up for self-development². Clearly, Toyota are looking for those who can and want to grow. This is in stark contrast to organisations that want merely to bring in people from outside to ‘implement here what they have done to people elsewhere’ (but now appear to be running away from this!)

Second: Once a person has suitably demonstrated their ability and desire to self develop, then they need to show the development of others. To be clear: this does not mean merely coaching (supposedly) star performers or favourites (the ‘chosen few’)…it means developing everyone. In fact, your ability to develop someone where this appears challenging* is a sure sign of your development capabilities. Liker uses the Toyota quote that “the best measure of a leader’s success is what is accomplished by those they trained³.” It’s not about what you can do; it’s about what they can now do because of you (even though they may not comprehend this link).

(*The greatest case study I know of this is what Toyota achieved at NUMMI with ex-GM employees who were considered the worst of the worst. They re-hired them and turned them into the best. The problem wasn’t a shortage of talent, as we are so often led to believe, but an inability to engage and develop the talents lying dormant within people).

Third: So you are a self-developer and can develop others. It now becomes about your ability to enable daily improvement – facilitating groups of people through constant improvement: being a farmer as described above.

The focus is not on attempting to force improvement (top down) but in enabling, encouraging and coaching improvement from the bottom up.

Clarification: This is NOT about that ’empowerment’ word!

…and, finally, Fourth: It is now about ensuring that the right big-picture challenges are set, pursued and accomplished by the people and, in so doing, that this causes much experimentation, reflection and learning.

None of this leadership development logic is about being promoted because you are the best at performing your current job or that you are a hardened ‘go get ’em’ management hero. All of it is about your ability to facilitate improvement through others.

Managers instead of Consultants

…this leads me to observe that many a ‘command and control’ manager brings in consultants (or ‘Black Belts’) to facilitate his/her team through the likes of a Kaizen/ Rapid Improvement Event.

Worse still, such facilitators often prefer that the manager isn’t involved in these improvement events (except as ‘statesman’ at the beginning and ‘rubber stamper’ at the end) because their presence would seriously hinder what the people can achieve.

To add insult to injury, such an absent manager has attempted to delegate their improvement responsibilities and thus finds themselves even further from the work (the gemba) and with new/ higher barriers between themselves and their people.

…owch! If this is the case (and, sadly, it often is) then this is a very poor state to be in.

At Toyota, facilitation of improvement is what their managers are for! And, rather than a week-long ‘point improvement’ event performed every (say) 6 months, this facilitation should be ongoing.

You might respond that “Nice idea Steve…but our managers don’t have very good facilitation skills. We need expert practitioners to come in”. And that is precisely why Toyota looks for those people within its ranks that have the potential as facilitators of improvement…and then develops them into leaders.

Rother makes clear that “The primary task of Toyota’s managers and leaders does not revolve around improvement per se, but around increasing the improvement capability of people. That capability is what, in Toyota’s view, strengthens the company. Toyota’s managers and leaders develop people who in turn improve processes through the improvement kata [pattern].

Developing the improvement capability of people at Toyota is not relegated to the human resources or the training and development departments. It is part of every day’s work in every area…”

Sense-check: It may be that your current managers are (or could be) great facilitators. However, if they have to use a ‘command and control’ management system on their people then it is unlikely that such fantastic skills will get a chance to blossom and deliver the potential value within. Worse, their efforts will likely clash with all that commanding and controlling going on.

Next time you feel the need to bring in facilitators, reflect on why. Is it because your managers:

don’t have the capability? or
do have the potential, but are constrained by the management system that they are required to operate within?

If your answer is a), then develop them. If it’s b), you have far bigger fish to fry…but don’t let this stop you from doing anything – remember the Two Parallel Tracks.

______________________________________________________________________

To close:

this post (Part 1) considers who we should be promoting, and why;

Part 2 will turn this all on its head and question the promotion career ladder logic. In short: we can’t all ‘get to the top’ and neither should we all want to.

Notes:

Ahead: I use the word ‘ahead’ rather than ‘above because I’d like the reader to get out of a ‘superiors in the hierarchy’ mindset and, instead, think about people who happen to have been promoted to more senior positions because they are more advanced on this leadership development journey. This is merely a matter of timing, rather than importance.
Fixed vs. Growth mindset: Professor Carol Dweck’s research suggests that we can judge how good people will be at learning new skills – our capacity to learn is determined by our beliefs as to whether our abilities are innate or can be learned. Dweck suggests a continuum with two extremes: A Fixed mindset and a Growth mindset. Don’t despair of those already in leadership positions that appear to have ‘fixed’ mindsets. This may very well be down to the environment in which they work (and have always worked) within. The important bit is to assess them once their environment is changed to encourage self-development and growth.
Trained: the use of the ‘trained’ word in this quote applies to its meaning as is used in sport. Rother notes that “The concept of training in sports is quite different from what ‘training’ has come to mean in our companies. In sport it means repeatedly practicing an actual activity under the guidance of a coach. That kind of training, if applied as part of an overall strategy to develop new behaviour patterns is effective for changing behaviours.”

Capability what?

September 6, 2015November 2, 2023 giantknave Brain Farts Capability, Jeffrey Liker, John Seddon, Measures, Mike Rother, Targets

Readers of this blog will have likely come across a phrase that I often use but which you might not be too clear on what is meant – this phrase is Capability Measure.

(Note: I first came across the use of this specific phrase from reading the mind opening work of John Seddon).

I thought it worthwhile to devote a post to expand upon these two words and, hopefully, make them very clear.

Now, there are loads of words bandied around when it comes to the use of numbers: measures, metrics, KPIs, targets. Are they all the same or are they in fact different?

Let’s use the good old Oxford dictionary to gain some insights that might assist:

Measure: “An indication of the degree, extent, or quality of something”

Metric: “A system or standard of measurement”

KPI (Key performance indicator): “A quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.”

Target: “An objective or result towards which efforts are directed”

So putting these together:

A measure quantifies something…but this of itself doesn’t make it useful. It depends on what you are measuring! In fact, there is a huge risk that something that is easily measureable unduly influences us:

“We tend to overvalue the things we can measure and undervalue the things we cannot.” (John Hayes)

A metric is the way that a measurement is performed – it’s operational definition. There’s not much point in taking two measurements of something if the method of doing so differs so much as to materially affect the results obtained.

KPIs are an attempt to get away from using lots of different measures and, instead, boil them down into a handful of (supposedly) ‘important ones’ because then that will make it sooo much easier to manage won’t it?…I hope your ‘Systems thinking’ alarm bells are ringing – if we want to understand what is really happening, we need to study the system. Any attempts at short-cutting this understanding, combined with the use of targets and extrinsic motivators is likely to lead to some highly dysfunctional behaviour, causing much damage and resulting in sub-optimal outcomes. The idea of ‘management by dashboard’ is deeply flawed.

Targets – well, where to start! The dictionary definition clearly shows that their use is an attempt at ‘managing by results’…which is a daft way to manage! We don’t need a target to measure…and we don’t need (and shouldn’t attempt) to use a target to improve! A target tells us nothing about the system; distorts our thinking; and steals our focus from where it should be.

So what are we measuring?

I hope I’ve usefully covered ‘measure’ and its related terms so let’s go back to the first word: Capability

To start, we need to be clear as to what system we are studying and what its purpose is from the customer’s point of view. Then we need to ask ourselves “so what would show us how capable we are of meeting this purpose (in customer terms)?”

Some important points:

Capability is always about meeting the customer’s purpose and should be separate from the method of doing so:
- An activity measure (i.e. to do with method), such as “how many calls did I take today”, is NOT a capability measure. None of my customers care how many calls I took/made!;
- Activity measures constrain method (tie us in to the current way of working i.e. “we make calls”) whilst capability measures liberate method and encourage experimentation (“what would happen to our capability if we…”).

The best people to explain what really matters to the customer are the front line process performers who help them with their needs (i.e. NOT managers who are remote from the gemba):
- The process performers know what the customers actually want and whether they are satisfied or not

As a rule of thumb, the end-to-end process time from the customer’s point of view is almost always an essential capability measure BUT:
- end-to-end is defined by the customer, not when we think we have finished;
- Targets will distort the data that we collect and thereby lead to incorrect findings…so, if you really want to understand your system’s capability you need to remove the targets and related contingent rewards.

Other examples of likely capability measures of use are:
- A system’s ‘one-stop capability’: the amount of demand that can be fully satisfied (as determined by the customer) in one-stop;
- The accuracy and value created for the customer; and
- The safety and well-being of your people whilst delivering to the customer

An example:

I am currently moving house. I have to switch the electricity provision from the previous occupants to me. I want this switch to happen as painlessly as possible, I only want to pay for my electricity usage (none of theirs) and I want the confidence to believe that this is the case.

So:

The system in question is the electricity switching process;
My purpose is to switch:
- Easily (minimum effort on my part….easy to start the process, no need to chase up what is happening, and easy to know when it is complete)
- On time (on the switching date/ time requested); and
- Transparently (so that I trust the meter readings and their timings)

I don’t care how the electricity companies actually achieve this switching between themselves (the method, such as whether they use a SMART meter reading or a man comes to the house or…). I just care about the outcomes for me.

The electricity company should be deriving measures to determine how capable they are in achieving against my purpose. They are then free to experiment on method and see whether their capability improves.

I have deliberately used a generic example to make the point about the system in question, its purpose and therefore capability. You can apply this thinking to your work: what the customer actually wants/ needs and how you would know how you are doing against this.

Sense-check: Capability measures are method-agnostic. Think about putting your method inside a metaphorical ‘black box’. Your capability is about what goes into the black box as compared to what comes out and what has been achieved. You can then do ‘magic’ (I mean experiments!) as to what’s inside the black box and then objectively consider whether its capability has improved or not.

What does a capability measure look like, who should see it and why?

Okay, so let’s suppose we now have some useful capability measures. How should they be presented and to whom…and what are we hoping to achieve by this?

The first big point is that the measure should be shown over time*. We should not be making binary comparisons, and then overlaying variance analysis and ‘traffic lights’ to supposedly add meaning to this (ref: Simon Guilfoyle’s excellent blog ).

We want to see the variation that is inherent in the system (the spice of life) so that we can truly see what is happening.

* Note: A control chart is the name for the type of graph used to study how a metric changes over time. The data is plotted in time order. Lines are added for the average, upper and lower control limits – where these are worked out from the data…but don’t worry about ‘how’ – these statistics can be worked out by an appropriate computer application (e.g. Minitab) in the hands of someone ‘in the know’.

Here’s a control chart showing the time it takes me to cycle to or from work:

The second big point is that these capability control charts should be in the hands of those who perform the work. There’s little point in them being hidden within some managerial report!

Here’s what Jeffrey Liker says about how Toyota use visual management:

Every metric that matters…is presented visually for everyone who is involved in meeting the goal [purpose] to see. A key reason…is that it clarifies expectations, determines accountability for all the parties involved and gives them the ability to track their progress and measure their self-development.

[Making these metrics highly visible] is not to control behaviour, as is common in many companies, but primarily to give employees a transparent and understandable way to measure their progress.

Put simply: if the people doing the work can see what is actually happening, they are then in a place to use their brains and think about why this is so, what they could experiment with and whether these changes improved things or not* ….and on and on.

* Looking back at my ‘cycling to work’ control chart: I made a change to my method at cycle ride number 15 and (with the caveat that I need more data to conclude) the control chart shows me whether my change in method made things better, worse or caused no improvement. I cannot tell this from a binary comparison with averages, up/down arrows and traffic lights.

It should by now be clear that a capability measure is about the system, and NOT about the supposed ‘performance’ of individual operators within.

To summarise:

In bringing the above together, John Seddon applies 3 tests to determine whether something is a good measure. These tests are:

Does it relate to purpose? (i.e. what matters to the customer);
Does it help in understanding and improving performance? (i.e. does it reveal how the work works? To do this, it must be a measure over time, showing the variation inherent within the system, and it must be devoid of targets);
Is it integrated with the work? (i.e. in the hands of the people who do the work so that they can develop knowledge and hence improve).

If it passes these three tests then you truly have a useful Capability Measure!

As luck would have it: One of my favourite bloggers, ‘Think Purpose’, released a similar ‘measurement’ post just after I had written the above. It includes a couple of very useful pictures that should compliment my commentary. It’s called A managers guide to good and bad measures – you could print them out and put them on your wall 🙂

A clarification: I’m happy with the use of the word ‘target’ if it is combined with the word ‘condition’. A reminder that a target condition (per the work of Mike Rother) is a description of the desired future state (how a process should operate, intended normal pattern of operation). It is NOT a numeric activity target or deadline. I explain about this in my earlier post called…but why?

How to have a successful journey

June 28, 2015June 28, 2015 giantknave Brain Farts Experiment, Implementation, Mike Rother, problem solving, Purpose, Target Condition

Mike Rother, in his excellent book ‘Toyota Kata’, explains that ‘command and control’ organisations see the ‘implementing’ word as a very positive one but that their obsession with it actually impedes their progress and the development of their people.

To explain what is meant by an implementation versus a problem solving mode:

Implementation mode (‘Go fast to go slow’)

This mode can be characterised as:

The need for a clear and (usually overly) simple ‘solution’ up front arrived at by some expert(s) a la “we have the answer!”;

(where this answer is normally derived from copying what others have already done);

A detailed plan (the more lines on the Gantt chart, the better!) that sets out exactly what needs doing, when, and by whom to implement the answer;
A target date (along with some incentives), established to motivate (!) people to put on their ‘implementation’ blinkers…nothing must get in the way;
A finish line mentality – “we got it in!…now let’s move on to something else.”

…in reality:

The above requires the organisation to assume everything is ‘steady state’ (which includes ignoring the effects of the rest of the system on the component(s) in focus);
However, there is continual change both inside and outside the environment (which may or may not be noticed…and which is unlikely to be understood);
It is impossible for us to predict what will actually eventuate;
We spend vast sums of money trying to shoe horn our answer into this changing reality, often years after it was conceived;
There has been very little meaningful learning and development going on!

“Humans have a tendency to want certainty, and even to artificially create it, based on beliefs, when there is none. This is a point where we often get into trouble. If we believe the way ahead is set and clear, then we tend to blindly carry out a preconceived implementation plan rather than being sensitive to, learning from, and dealing adequately with what arises along the way. As a result, we do not reach the desired destination at all, despite our best intentions.” [Rother]

Problem solving mode (‘Go slow to go fast’):

There are three things we need to know with certainty (none of which is to know the answer up front!). These are:

Where we are (current condition);
Where we want to be (target condition); and
A method by which to manoeuvre through the unclear territory in-between

Some key points to make:

‘Where we are’ means that we really understand our current condition, which includes why we are like this (i.e. the system conditions and management behaviours that make it so).

‘Where we want to be’ doesn’t mean “we want to have implemented x”. That’s just the implementation mode by another name. It means clearly stating a target condition (our challenge towards purpose): how should the process operate i.e. can we describe this in terms of relevance to the customer and the process performers. This description can’t know how it is to be achieved….this will unfold via…

…the ‘method’ (experimentation), which IS clear. The experiments themselves will not become clear until we progress step-by-step through the obstacles within the unclear territory.

“True certainty and confidence does not lie in pre-conceived implementation steps or solutions, which may or may not work as intended, but in understanding the logic and method for how to proceed through unclear territory.” [Rother]

So what’s the point?

Too many ‘projects’ are merely the implementation of a new technology or ideology (that someone has been convinced they need) with:

a reverse-engineered ‘business case’ that attempts to justify what should be achieved from ‘putting it in’; and
a grand plan with supposedly certain time, scope and cost.

Such projects regularly fail, sometimes spectacularly and even if they ‘complete’ (whatever definition they use for this word), there has been little value added or learning achieved….in fact they often (usually) destroy value and repeat the same errors and pitfalls as the last project and the one before that.

Instead, we should adopt a mindset of:

being really clear on what we are trying to achieve (in respect of customer purpose); and then (and only then)
work our way towards this ideal through a series of steps:
- learning as we go; and
- deciding the next step (the how) as we learn, adapt and ‘see’

Okay, so I’ve ‘scratched the surface’ of the idea that a brilliant implementation plan is not the answer. For those that would like an excellent analogy to think about this, here’s a useful (and short) post: The difference between launching a rocket and driving a car.

We should know ‘before we leave the house’ what our intended destination is, why and how we would know how we are going towards it…and we should steer our way there (unconstrained) as we meet the unknown obstacles on the way.

There would be little point in claiming ‘completion’ because we had spent our quota of time, distance or cost if we hadn’t actually arrived!

…but why?

March 6, 2015March 8, 2015 giantknave Brain Farts Mike Rother, Target Condition, Targets

Project Steering Group Meeting starts:

Project Manager: “We’ve had a major setback and we can’t ‘go live’ next week as per the original target date set. We’ve worked some long hours to think about this and what we need to do and have re-planned. We have worked out that, if we work really smart and hard and everything goes to plan, we believe we could be back on track in 8 weeks time.”

Big tough Leader: “I want it in 4 weeks.”

Project Manager: “I know it’s disappointing and you would like it as quickly as possible. That’s why when we did the re-planning we cut out all the fat AND used really stretching estimates…and it is this that gives us the 8 weeks….it could easily have come out at 12 weeks or more.”

Big tough Leader: “You’ve got 4 weeks.”

Project Manager: “I’ve spoken with everyone. We got together as a team to work out what is possible. They all rolled their sleeves up, did some good honest talking and they tell me that they will move heaven and earth to hit 8 weeks.”

Big tough Leader: “Look at my fingers [holds up four fingers]. I’m not going to discuss it anymore.”

…and so the meeting ends, with the Big Tough Leader walking off pleased with him/herself and the Project Manager having the unenviable task of trying to explain to the troops and keep them motivated…all of which will take further time (which could have been spent delivering value).

It’s at this point that I would want to press the ‘stop’ button in the conversation, wind back and at the point that the Big Tough Leader says “you’ve got 4 weeks”, I would want the Project manager to say “…but why?”

Now, there appear to be two logical answers to this question:

The leader knows something that the Project Manager doesn’t, like there’s an important constraint that means that 8 weeks is no good….in which case the Project Manager (and the team) needs to know the full facts and can enter a proper dialogue about the options available…with some likely innovative ideas coming out; or
The leader is attempting to ‘manage by fear’ and thinks that their clever ‘stretch-target’ will motivate (!) the workers. Further, it shows that the leader doesn’t trust his/her people and thinks they are lazy, that they are holding effort back and need a carrot/ stick management approach.

So, what actually happens when unrealistic target dates are set?

disbelief by those who actually know the reality of the situation…de-motivation…and therefore a major disconnect between worker and leader…leading to an understandable lack of respect in the leader;
de-scoping of value from the work so as to hit an arbitrary target date (“we delivered something!”), as opposed to achieving a target condition;
the customer (the people receiving the outcomes) never believing the dates that you give them along the lines of ‘the boy that cries wolf’ fable. This is because big tough target dates are published (“because, then, that’ll make ’em work harder!“) and then have to be continually re-published as reality bites and dates are re-set;
much effort is wasted ‘analysing’ variances between what was dictated vs. what eventuated…none of which comes as much of a surprise to the workers who knew anyway;
much wasted effort is spent after ‘go-live’ coping with the semi-complete outcome and the customer fallout.

Okay, so you hit a published target deadline…big deal!

What matters is what was actually achieved in respect of the purpose of the value stream being affected. Is the value stream more or less capable in the eyes of the customer?

Now, obviously any roll out needs to know a date to be able to plan its implementation, BUT we should be trying to delay the setting of this date as long as possible in the work so that we have the most certainty as to what it will actually be – a ‘just in time’ mentality rather than a ‘hook to hang people on’.

Let’s try to move:

away from thinking setting target dates as a management tool is a good thing;
to thinking that setting target conditions* is the right thing to do, and then providing an environment in which everyone works to achieve this as effectively as possible.

* A reminder: a target condition is a description of the desired future state (how a process should operate, the intended normal pattern of operation). It is NOT a numerical activity target or deadline.

“First determine where you want to go, then consider how to get there within financial and other constraints.” (Mike Rother)

Do you use target dates as a ‘management by fear’ tool to ‘make people comply’?!

Benchmarking – worse than cheating

February 18, 2015March 8, 2015 giantknave Brain Farts Benchmarking, Best Practise, Experiment, Jim Womack, John Seddon, John Shook, learning, Mike Rother

Do you remember back to your school days, and the scandalous crime of cheating by copying someone else’s work?

Why was school-boy (& girl) copying seen as such a sin?

The most obvious reason in traditional education is that you are cheating the ‘grading’ system such that people will think you are ‘better’ than you (currently) are;
But, what’s far worse is that you haven’t actually gone through the learning and development process, for yourself…which is what education should be about.

So why am I comparing and contrasting ‘benchmarking’ with school-boy copying? Let’s first look at a definition:

“Benchmarking: Managers compare the performance of their products or processes externally with those of competitors and best-in-class companies and internally with other operations within their own firms that perform similar activities.

The objective of Benchmarking is to find examples of superior performance and to understand the processes and practices driving that performance.

Companies then improve their performance by tailoring and incorporating these best practices into their own operations.” (from Bain & Co. website – a well regarded Management Consulting organisation selling its benchmarking services)

So, essentially Benchmarking is akin to deliberately (and usually openly) finding out who the best kids in the class are and then trying to copy them…with this being seen as a logical and acceptable thing to do. Business is clearly different to Education (right?)

A number of things strike me about this ‘benchmarking’ definition:

It assumes that, if I find someone with excellent ‘result metrics’ (in respect of what I chose to look for) then:
- the metrics I see are true (undistorted) and tell the whole picture (e.g. cope with differing purposes, explain variation,…); and consequently that
- I should be doing what they are doing…which implies that I can easily, correctly and completely unpick how they arrived at these results;
It is about managers looking for answers externally and, essentially, telling the workers which areas will change, and to what degree (commanding and controlling);
It is looking at what other organisations are doing rather than what the customer requires (wrong focus)…and likely constrains true innovation;
It focuses on component parts of the system, rather than the system as a whole (which will likely destroy value in the system);
It incorporates the related, and equally flawed, idea of ‘best practise’ (rather than understanding that, setting aside the above criticisms, there may be better practises but no such thing as perfection);

Sure, we should be aware of what other organisations, including our competitors, are doing for the good of their customers but attempting to copy them is far too simplistic (see my very first post re. ‘perspective’ ).

It is interesting to read what Jim Womack (et al at MIT) had to say about benchmarking after they spent many years studying the global car industry.

“…we now feel that benchmarking is a waste of time for managers that understand lean thinking. Benchmarkers who discover their ‘performance’ is superior to their competitors have a natural tendency to relax, whilst [those] discovering that their ‘performance’ is inferior often have a hard time understanding exactly why. They tend to get distracted by easy-to-measure or impossible-to-emulate differences in costs, scale or ‘culture’…

…our earnest advice…is simple: To hell with your competitors; compete against perfection…this is an absolute rather than a relative standard which can provide the essential North Star for any organisation. In its most spectacular application, it has kept the Toyota organisation in the lead for forty years.”

And to compete against perfection, you must first truly understand your own system:

“Comparing your organisation with anything is not the right place to start change. It will lead to unreliable conclusions and inappropriate or irrelevant actions. The right place to start change, if you want to improve, is to understand the ‘what and why’ of your current performance as a system.” (John Seddon)

Each organisation should have its own purpose, which attracts its own set of customers, who have their specific needs (which we need to constantly listen to)…, which then determine the absolute perfection we need to be continually aiming for.

You can see that, if we use benchmark metrics, we usually end up back with the Target/ Incentive game. We can expect distorted results and ‘wrong’ behaviours.

The real point – Experimentation and learning: Now you might respond “okay, so we won’t benchmark on result metrics…but surely we should be benchmarking on the methods being used by others?”

The trouble with this goes back to the 2^nd, and most consequential, ‘sin’ of school boy copying – if you copy another’s method, you won’t learn and you won’t develop.

“We should not spend too much time benchmarking what others – including Toyota – are doing. You yourself are the benchmark:

Where are you now?
Where do you want to be next?
What obstacles are preventing you from getting there?

…the ability of your company to be competitive and survive lies not so much in solutions themselves, but in the capability of the people in your organisation to understand a situation and develop solutions. (Mike Rother)

When you ‘benchmark’ against another organisation’s methods you see their results and you (perhaps) can adequately describe what you see, but:

you don’t understand how they got to where they are currently at, nor where they will be able to get to next;
you are not utilising the brains and passion of your workers, to take you where they undeniably can if you provide the environment to allow them to do so.

…and, as a result, you will remain relatively static (and stale) despite what changes in method you copy.

“When you give an employee an answer, you rob them of the opportunity to figure it out themselves and the opportunity to grow and develop.” (John Shook)

Reorganised

February 3, 2015March 8, 2015 giantknave Brain Farts Leaders, Mike Rother, Reorganisation

“We trained hard – but it seemed that every time we were beginning to form up into teams, we would be reorganised.

I was to learn later in life we tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation.” (Petronius Arbiter, 65 A.D.)

Now, this isn’t suggesting that there isn’t a need to reorganise every now and then. It does signal the folly and pain of continual reorganisations dictated ‘from above’.

Another quote helps to put reorganisation into perspective:

“As tempting as it sometimes seem, you cannot reorganise your way to continuous improvement and adaptiveness. What is decisive is not the form of your organisation, but how people act and react.

The roots of Toyota’s success lie not in its organisation structures, but in developing capability and habits in its people. Anything unique about Toyota’s organisation structures…evolved out of them striving for specific behaviour patterns, not the other way around.” (Mike Rother)

i.e. develop the right environment, and a suitable structure will evolve….not the other way around!

It is far far better that you provide an environment in which:

the purpose of the system is clear (to you and those who perform it);
any/all ‘contingent reward’ management instruments have been removed;
your people are provided with visible measures of the capability of their system* (against its purpose); and
are allowed and encouraged to experiment with changes to their system, whilst observing the effects on its capability.

(* this is NOT numeric activity targets!)

In this way, it will be the people who will consider whether a change to the form of the current organisation is a valid countermeasure to experiment with and, from studying the outcome, whether to adopt, adapt or disregard this change.

The difference between: