Seeking the LEAN MACHINE

Leading the Lean Enterprise Transformation 
Leading the Lean Enterprise Transformation
By Koenigsaecker, George
Publication: Manufacturing Engineering
Monday, March 1 2004
 

Intimate knowledge of your process is critical; don't be a "catalog engineer"
Early in the lean journey at Jacobs Vehicle Equipment Company (Jake Brake), cells were configured in this manner.

During the mid-1970s, I was working for Deere & Co., and spending a lot of time with a Japanese firm, Yanmar Diesel. After visiting dealers around Japan, touring factories and other facilities for several weeks, we had a meeting with senior management. 

During this meeting they reviewed their improvement gains for the prior three years.
They had increased their product range by four-fold to grow out of the "oil crisis." This type of growth usually messes up productivity, but they actually doubled enterprise productivity during the same period, and reduced average unit cost by 26%. I was astounded. As it turns out, for the prior three years they had weekend lean-conversion support from three members of Taiichi Ohno's Autonomous Study Group-the folks who "invented lean," which could be more accurately described as The Toyota Business System (TBS). From this time on, I read every book I could find on "Just In Time"-as we called it then-went to every seminar, and visited every plant where managers and workers looked as if they knew what they were doing.

During the early '80s I was with Rockwell International's Automotive Operations, and each quarter-for three years-I led teams to benchmark best manufacturing-enterprise practices worldwide. We quickly began focusing on Japanese firms, and also quickly found that the companies implementing the TBS were truly different. We benchmarked 144 firms-about 20% were part of the Toyota family-and they achieved, on average, four times the enterprise output per person as Japanese and US operations not based upon TBS. They also could make every product every day, had 90% fewer customer complaints, etc. We initiated some early experiments in applying these ideas within Rockwell, but we were just beginners.

In the mid-'80s I became President of Jacobs Vehicle Equipment Company (Jake Brake). Jake was in trouble, and after a decade of benchmarking and book learning, I was ready to try to implement the TBS. The real break came a few months after we started the "journey," when I found out that the guys who had led the conversion at Yanmar Diesel were retiring from Toyota. After a lot of effort, I convinced them to become my sensei and teach Jake how to apply lean. I was the student of these men for the next 15 years. From Jake Brake, I was moved to the role of Group President at the Automotive Group of Jake's parent, Danaher Corp. And very shortly thereafter, I became Group President of the Tool Group, the largest business unit of Danaher. Needless to say the lean enterprise conversion effort followed me around.
In the early '90s, I moved back to the small Iowa town where I grew up, and became president of the HON Company. In 2000, after eight years of getting lean institutionalized at HON, I formed Lean Investments LLC.

Conversion of the operations side of a business typically proceeds in three waves.
The first "wave" occurs when you take the lean tools most folks have heard about, and apply them to a business that was designed around the concepts of craft/batch or mass production-but not around the concepts of lean. The vast majority of folks working to apply lean only know of this "wave," and it really amounts to the use of the tools and concepts of lean to improve a system that was designed around the "wrong" principles. This is usually the foundation step that allows an organization to move to other dimensions of lean.

The second wave is when the organization has achieved enough success in operations to apply the same tools and concepts to improve the administrative processes that were, of course, also built around the concepts inherent in craft/batch or mass. A few lean leaders are seriously into this wave, but just a few. And a few more are "testing the waters."

The third wave of operational lean is when you begin to reconfigure your production technology to be consistent with lean concepts and principles. To do so, you typically need several years of lean implementation experience so that these concepts, which are normally "opposite" the way we usually do things, begin to "feel OK." It's hard to invent a new production base until you actually believe in the concepts and principles of lean. In round numbers, there are really only a handful of North American firms that have made it to this stage.

The next stage is building a strong organization. One of the things that make this stage difficult is that you have to do it yourself. My sensei would deride us for buying equipment-"catalog engineer" was one of the worst things they could say about you. But you find that to do this on your own you need to build up a group of skilled associates who can design and build machines-and more importantly, conceive of different approaches to designing such machines. This means that you may need to add skilled trades personnel, and some key engineering/design folks. These people look like "overhead" in traditional manufacturing thinking, and are usually the first persons fired when business slows.

The first steps to lean machine design come from modifying existing machines. Some of this work is done to incorporate setup reduction changes, some of it to add in poke yoke devices to ensure quality. One step that very few firms consider is to add "hanedashi" devices-simple auto-unload mechanisms-to each machine in the cells they build. Toyota found out long ago that it is hard to automate "load," but very easy and cheap to automate "unload." Therefore, after you build a cell with your inherited equipment, you should modify each machine so that at the end of the cycle it unloads the completed part into some sort of tray at the front of the machine. In "Toyota-Speak" this arrangement is called a chaku-chaku or load-load cell. It seems so simple that most folks don't do it

Ohno's calculations indicated that this feature alone increases the productivity of a cell by 140% -i.e. output per person is 2.4 times that of the basic cell! If you think about the steps an operator takes to unload parts, the calculation makes sense. But we usually don't slow down enough to think of this waste. Not only does modification for setup reduction, poka yoke and hanedashi build quality and productivity, it also increases the skills of your future machine-design-and-build group. After a few years of improving your cells and building your skill base, you may be ready to take on the serious lean-machine effort.

In your inherited capital base, most of your equipment will not be "right-sized." And you will possess a number of monuments. These are the really big machines designed to be able to handle all the plant's volume. Now, no machine is inherently lean. It's the machine in its application-the cell structure, the volume of parts, etc.-that determines whether the machine is the lowest-cost way to provide flow. But design and construction of monuments is what machine builders do. The monument machine is their paradigm. Monuments are often paint systems, heat-treat systems, cleaning systems, or plating systems.

At Danaher we had gone down the path I describe above with our sensei. At HON, after about three years we started to build up our capability. By the eighth year of lean, we had five machine-design-and-build groups organized within the firm. But that's jumping ahead. Having been on the lean journey before, I was able to start our first machine-design-and-build group with a list of 13 key design practices for a "lean machine." They included things like:

*Design to takt time. A machine was not to be able to make a part in less than 1/2 of takt time. Like many of the easy-to-understand aspects of lean, this one is hard because it is 180 away from normal practice, which is to design a bigger, more capable, and faster machine than we need-"just in case."

*Design-in foolproofing mechanisms on all key characteristics. Pretty easy to understand.

*Design-in low to no setup time. The goal is a "one touch" setup-i.e., it takes one movement by the operator to change from one part to the next. It may take you half a dozen attempts to get to this point-but you need to realize that you can get there, if you keep trying.


This one-piece-flow Japanese machining cell employs relatively small equipment arranged in a U shape. Each machine has a relatively small footprint (for CNC machining), and simple material handling moves the work piece between each machine.

*Design your machines to be no wider than a man's shoulders or no wider than 1 times the width of the basic part-holding tooling. This approach reduces walk time.

*Design machines with controls and start buttons on the left side of the machine, because a good lean cell runs "counterclockwise." You want to press the start button just as you leave the machine and head to the next one in the cell.

*Design machines so that all services are at the rear. You do not want to disrupt operator flow with machine servicing. And you certainly don't want chip conveyors dropping chips to the front and at the side-this extends walking distance AND causes flow disruption.

*Design machines so that you can see over the top of them. This requirement is part of visual control. Sometimes it's not possible, but it can almost always be done, if you focus on it.

*Design machines at the simplest and least-expensive level that will get THIS job done.

*And, of course, design each machine with hanedashi.

One of the things that is unusual about lean is that every time you reapply the tools and concepts to a given work area you will identify new levels of waste and make new improvements. You will not be substantially "lean" until you have restudied every process-both production and administrative-about six to eight times. At HON, even with someone who knew where we should be going and had a guideline for machine design, we were not able to "go directly there." It took several years of hard lean-conversion experience before folks thought that the stuff might really make sense. At that point, we started to do machine-modification work in addition to the setup reduction that we did early on. Our largest business involved a lot of sheet metal work, and we had lots and lots of press brakes. So one of our first efforts sought to right-size a press brake.

Most of our brakes were 12 to 16 footers. Our earliest efforts at lean involved putting multiple sets of tooling in really long brakes as a kind of setup reduction. Of course, really long brakes are great barriers to flow. So we tasked ourselves to get "right-sized" press brakes.

Year One: We bought a commercially available six-foot press brake-an appropriate first step.

Year Two: Our newly formed machine-design-and-build group designed a three-foot press brake. A good step. And we were working to incorporate setup reduction concepts (robust design) and hanedashi. But we realized that we made many parts that did not require a machine of this size.

Year Three: We designed a two-foot-long press brake, and began serial production of them. Interesting. But as we looked at it, we realized we had employed expensive, more-complex variable-pressure hydraulics "just in case."

Year Four: We obtained simple hydraulics that only had enough power to make a part in 1/2 takt time, at the fastest.

Year Five: We finally "got it." On reflection, I realized that my guidance had been wrong. I told my design-and-build team that we no longer wanted to design right-sized press brakes. After four years of trying to do so, folks wondered where this effort was going. The new direction was to design self-actuating tooling that met the key design criteria. At that point our creativity exploded, and we found many ways to make tooling work-from air bladders, to hand-cranked presses for really small parts, etc.

Basically it took us eight years to understand the lean-machine concept well enough to consistently produce such equipment. So far it has not been possible to get machine builders to head down this path. Probably because it goes against several fundamental machine concept paradigms that they hold dear.

We traveled the same path on getting to right-sized paint systems. We started with very large systems, usually one per plant. We had several iterations that saw us develop smaller systems, before we really could "get it" and design a paint system to the needs of an individual cell. I have had operations that went from one monument washing system to small units in each cell, and from one monument heat-treat system to small units in each cell. With effort, we have been able to eliminate the need for every monument system that we encountered. I stress: with EFFORT.

Basically, any place you have to put a kanban system in place is a problem. In Toyota's world, kanban systems are a form of waste. They may be necessary waste today due to a monument system, but the goal should be to run without monuments.

Once you get to this point, there is a brainstorming tool that can lead you to breakthrough machine concepts. It's called 3P (for Production, Preparation, Process). Confusion can be caused by the fact that there are two versions of 3P. 

One is simply a checklist for pre-production planning.         The almost-unknown one is a breakthrough approach to developing new machine-design concepts. By year eight, we were using 3P to come up with some breakthrough concepts for processes as well as just "right-sizing" existing concepts.

We were running 15 breakthrough machine-design projects each quarter. Our sensei had been trying to teach this approach at Boeing, but he found that they were not far enough along on the lean journey to accept the lessons. They would not complete a design effort. So he asked HON to invite a Boeing engineer to join each of our 15 machine design projects each quarter. Once they were teamed with six to eight HON folks who had traveled further along the lean journey, and were going to complete the project, the Boeing engineers would stick with it. And once they really tried it, they "got it" and went back to Boeing to form "moonshine" teams there.

It has taken Toyota more than 50 years of hard study to attain their present level of understanding of lean. It probably should not surprise anyone that it took us 10 years to learn these lessons! And from what I've seen, I suspect there are a lot more lessons that we can learn-if we stay on the journey long enough to do so!

Conversion of the operations side of a business to lean proceeds in three waves.

A chaku-chaku (load-load) cell can increase cell productivity by 140%.

No machine is inherently lean.
Every time you apply lean tools and concepts to a work area you identify new levels of waste.

A Manager's Guide to Implementing Lean

Leading the Lean Enterprise Transformation George Koenigsaecker, Leading the Lean Enterprise Transformation

From Manufacturing & Technology News
May 16, 2001 Volume 8, No. 9

One of the earliest American converts to the lean production system that originated in Japan was George Koenigsaecker, who eventually deployed the technique at Jake Brake in the 1980s. At the time, the concept was not known as lean, but as just-in-time production, developed by Taiichi Ohno and a small team of zealots at Toyota. Koenigsaecker's work at Jake Brake formed the foundation of what became the Danaher Business System, one of the most successful lean implementations in the world.
In the 1990s, Koenigsaecker deployed lean at office furniture maker HON Industries, also with great success.

Koenigsaecker is now in charge of business development with Simpler, a lean consulting firm based in Ottumwa, Iowa. He is also chairman of the Shingo Prize for Excellence in Manufacturing, which is awarded every year to companies adopting lean production techniques. It is named in honor of Shigeo Shingo, one of the Japanese developers of lean principles.

Thousands of U.S. manufacturers are considering implementing lean as a business and production management system. It likely will be essential for survival in a brutally competitive world that is moving quickly to a build-to-order environment. But it won't be easy.
Lean pioneer Koenigsaecker spoke with Manufacturing News editor Richard McCormack about the process of implementing a lean business system. Here is what he had to say.

Question: Why is it taking so long for lean production to take root in the United States?

Koenigsaecker: When I was first president of Jake Brake in Connecticut in 1989, lean was pretty much unheard of and we were lucky to have met some guys after we got started who were part of the group at Toyota that developed most of the principles.
There were a few greenfield operations that were brought over from Japan that were already lean, but the people that brought them here hired new employees who didn't have "brownfield" attitudes.
They purposefully hired people who were intelligent and team oriented but who did not have any prior manufacturing experience.

The hard part of implementing lean isn't so much that it's intellectually difficult; it's that there are a bunch of key principles that are fundamentally opposite of the way you do things in mass or batch production. The more experience you have in manufacturing, the harder it is to do lean.

When we started in the late 1980s, it was very experimental. Even today, leaving out the organizations like Toyota and some of its suppliers that brought the system with them, there are very few organizations that have stuck to it long enough really to show the potential of what is properly called a lean enterprise, where they have applied it throughout production and the administrative sides of the business.

Q: Why have so few companies adopted lean?

Koenigsaecker: Part of it is the program-of-the-year phenomenon. There is also the problem that whenever there is a new CEO or a division president, they feel they have to put their mark on things, which is typically a two- or three-year phenomenon. A lean enterprise conversion is something that takes about a decade. The good news is that every year you make significant progress in cost, quality and delivery. But to become really lean is a very long journey.

Q: What are some companies that you classify as being lean?

Koenigsaecker: There are very, very few. There are a few approaching lean. I'd put Jake Brake today as approaching lean. They are making 4.8 times as many engine brakes per hour than they were a decade ago -- a 480 percent output increase. That is the kind of metric that is possible with a full-scale lean conversion.

Q: What are some of the difficulties in starting a conversion away from batch and queue to flow manufacturing?

Koenigsaecker: We have a mindset that if you apply a tool, you've done it and you're done. So we go in and build cells, apply standard work and typically get on each pass a 40 percent productivity gain. But to get the 400 percent gain you have to pass it at least 10 different times. You must restudy the process over and over.
That is a counter-intuitive thing. People say the words continuous improvement, but we just don't believe in continuous improvement. The idea that you can take a series of tools and apply them again and again to the same area and every time you apply them you find new levels of waste and new ways to improve doesn't feel right. If you take 10 firms that started on lean, eight of them quit after the first pass because they got a significant improvement of 40 percent. They thought that was the end of the journey. It's a small number that have actually learned the lesson that if you keep applying the tools the gains keep coming.

Q: What compelled you to adopt a lean system of production in the late 1980s at Jake Brake when it was a concept that was hardly known in the United States?

Koenigsaecker: In the mid 70s, I was in Japan working for Deere & Co. and one of the things we were doing was setting up a business relationship with Yanmar Diesel, which made farm tractors used in Japan. I was one of the people in charge of setting up this relationship. It was an important deal to Yanmar because they were just coming off the early 70s oil crisis that hit Japan really hard.
In one of the management review meetings with the whole senior staff of the company, they went through the improvement they made on a firm-wide basis in three years and they described a doubling of output per person and a reduction in average unit costs of 28 percent.

At the same time, they were producing four times as many product models because they were trying to grow their way out of the recession with proliferation. So their job got four times as hard but they got twice as productive and reduced their unit costs by 28 percent. That was just mind-boggling to me as a manufacturing guy. It caught my attention. I thought, "Wow, if they could do that we can be in big trouble."

I found that they were a loose cousin with the Toyota group of companies and Taiichi Ohno, who had developed the Toyota Production System, had been visiting them every once in a while saying, "You ought to try this new production system we're developing."

They would say, "That sounds interesting but we're happy. See you later."

When the oil crisis just about sunk them, they decided to try it. What I had seen while I was there was three years of weekend work by Ohno and a couple of guys from the Autonomous Study Group, which was a group of internal Toyota and Toyota subsidiary people that Ohno selected to help him develop the system.
Later in the 1980s, I moved to Rockwell International's Automotive Group in Detroit and was able to lead a multiyear benchmarking effort. I was still very intrigued by what I had seen a Yanmar and was trying to understand how it worked and I figured the automotive industry would be closer to it than anybody else. We benchmarked 144 manufacturing firms in Japan and what we found was that 25 percent of them operated on a totally different planetary system from what we were used to.

Rockwell Automotive was a producer of heavy truck components and was usually number one or number two in North American market share in every product we made. We thought we were a pretty good benchmark. We found firms making identical products that were running at 400 percent of our productivity level and 10 times our inventory turns and one-tenth our defect rates. There were huge, order-of-magnitude differences.

One of the shocks for us was that they weren't just four times as productive in the factory. As we double checked, we found that they were on average four times more productive in all the staff departments when you measured in terms of company sales per person in the finance department. That really reaffirmed the magnitude of what I had seen at Yanmar, which wasn't even lean yet.

I began to realize that the nugget of a lean enterprise was the Toyota Production System and its evolution into being a business system that affected the administrative areas and product development and those kinds of functions.
By the time I got to be president of Jake in the late 80s, I was absolutely convinced it was the thing to do from 15 years of studying it from afar. We started doing it at Jake Brake and six months in I ran into three guys who had just retired from Toyota who had all been on this Autonomous Study Group. They became my sensei, or master teachers and so now for the past 15 years, I've been their student on the techniques.

Q: What are some of the key lessons you learned from them?

Koenigsaecker: I've learned that learning the techniques take a long time but is only about half the battle. The management of the process has some really unique characteristics that most of the people at Toyota don't realize any more because Ohno fought through those battles 30 years ago. They've forgotten that they had to battle in order to get it in place. There are some key managerial lessons about implementing this that are still not very well known and still cause almost everyone who embarks on it to run into the same issues because they are inherent with the difference in the process.

Q: What are some of the common problems?

Koenigsaecker: Little things like one-piece flow. What you find is people will build a cell and then you'll find batches at each machine within the cell. There are little piles of inventory. The operators feel comfortable with that because that is how they grew up. The supervisors know they've always had inventory between the machines. And everybody is afraid to take it out.

I have to admit that after having been a student of this it still took me two years of running and improving cells before I made the leap and actually went to a true one-piece flow.

That then leads to another Toyota philosophy called making the waste visible. It sounds mundane, but it means that the system is designed so that if you implement it but you don't follow up on it, you shut your factory down.
One-piece flow forces the cell to stop functioning until you solve a lot of quality, set up and tool change problems.
It feels so painful, you say this can't be right and yet that's what it is intended to do. The whole idea is to make it so painful to leave all of those problems unresolved that it pushes you to solve those problems.

Q: You're taking two steps backwards to go one step forward. It must be disconcerting.

Koenigsaecker: Fundamentally, it just feels wrong both to the production workforce and the management team because they have all been trained in a different system. You go through the whole conversion process and there are a whole bunch of things like that.

Q: What are some others?

Koenigsaecker: As a rule of thumb, you should go back to each area at least every other year or once a year if you're on a faster pace and apply all of the tools again and make another round of improvement. This leads you to rethink what sort of organization you need to have if you're going to maintain that sort of improvement pace.

Q: What is the most difficult aspect of managing a conversion?

Koenigsaecker: Ohno talked about an organization being like the human body and that a human body is designed to be self protective. There are antibodies inside the body. When a foreign substance enters the body -- an infection -- the antibodies not only get more active they also multiply. Ohno says an organization operates the same way.

The antibodies create a company's culture. The stronger the culture, the stronger the antibodies because they define what a company will do and also what it won't do.

When you start a conversion like this, you're redefining your company culture in terms of what you will and won't do. The people who are the most loyal members who you know love the company will be some of the biggest resisters of the process because they are trying to protect the company as it has been as opposed to how the company will be. You need to actively address that group or their efforts to protect the corporate culture will defeat any effort to change the culture in a way that will allow you to become a lean enterprise.

Q: It takes strong leadership to overcome such resistance to change.

Koenigsaecker: And leadership always is in short supply. There is little reward for it and a lot of risk.

Q: Yet you still see many case studies of companies that have adopted lean and experienced dramatic improvements in every measure.

Koenigsaecker: If I look at firms that are lean, it's about 3 percent of manufacturing employers in North America and two points of that are transplants like Toyota and its subsidiaries. So it's perhaps 1 percent -- and that might even be a stretch. But HON Industries doubled its productivity and tripled its volume in the 90s with the process. Danaher has put it in place in most of its groups and it's pretty well stuck there.

Q: What's the reason behind Danaher's success?

Koenigsaecker: Maybe part of it is that they had two young guys who were primary shareholders who were able to latch onto it and consistently support it. This is an interesting phenomenon because they came out of real estate and it probably helped because they didn't know you couldn't do this stuff. When we started doing it, they said it seems logical what you're saying and they didn't know that it was "illogical."

Q: Not even the people at Toyota feel like they have even come close to achieving their goals, and they've been at it for 50 years.

Koenigsaecker: The key to doing this is having an attitude that you can always be better tomorrow than you are today. They have these tools and every time they apply them they improve their operation. They are already way out in front because of the attitude that they have a long way to go.

Q: If they're in front now and have been for so long, what happens to GM?

Koenigsaecker: It takes a long time for a huge company to erode. I was told about a year ago that Toyota has more cash in the bank than the market capitalization of General Motors. That tells a story. There is a lot of hubris around the old-line former leaders. It's part of the company culture that prevents them from accepting lean because it wasn't something that Sloan developed and it wasn't something that was part of the GM way. There is no one willing to say, "We need to become a new GM." There isn't even the recognition that they need to change. It's absolutely mind-boggling.

Q: What advice do you have for a company that is considering implementing a lean system?

Koenigsaecker: You first need to point out to the organization that it needs to change and that staying as it is is a recipe for long-term disaster. The second is to find a good master teacher or sensei to keep you away from the big roadblocks. Then get a good value-stream based map and plan. The fourth is to build a supportive organizational structure.

We have some rules of thumb that say 3 to 5 percent of the employees at a site should be committed full time to improvement. From our experience it takes about that level of commitment to review every process every two years.  We recommend one person at a site be committed and then for every five people you free up reinvest one in the process until you get to that 3 to 5 percent level. Those are the folks you leave to focus on this set of tools until they become your internal sensei.
You need to stick with it for five years and over time, they will touch every part of the organization.

The one thing you see missing from most companies trying to do this is they don't build a structure to sustain it. When you think about it, we are all fighting fires. That is how we manage. We don't do anything that addresses the root cause because that would take time.

You have to take resources and say, "You are not allowed to fight fires, you're only allowed to work full time on root cause improvement projects."  If you don't do that, then all of your improvement resources get sucked back into today's fire fighting and you end up not making any fundamental root-cause improvement.

Q: That seems to be the greatest difficulty for any organization. They're all faced with a time crunch, running on a treadmill going 1,000 miles per hour, faster by the day.

Koenigsaecker: It's a huge discipline, because when you start, you're all working 12-hour days and you know that if you work a 14-hour day then tomorrow you'll still have the same pile of problems. We're not really driving them out structurally, changing our processes.

When you start off and say you are required as a site manager to assign your best person in the organization to this role of lean development office, that is something that just feels wrong. It's another one of those feel-wrong things. Then when you say for every five people who come out of the events that are freed up, that the lean development office gets to add one more until they become 3 to 5 percent it is just hard to believe. Once you get the people in there, the temptation for most managers is to say, "We have to ship this product today, let's put them on the line today." It takes a rare discipline to get out of the batch production, fire-fighting mode.

I know a $50 million company that is growing and has a great business and it can't ship its products fast enough. If they applied lean it would create capacity that they just can't believe. But they can't get over the hurdle of we're too busy to think about adopting lean. The CEO doesn't have any basis on which to believe that it would be worth the effort to double their capacity in two years by applying lean. Intellectually, you can't convince him while he is sitting there, which is true with all of manufacturing: you have to show people.

Q: How important are outside consultants in the process?

Koenigsaecker: There are so many mistakes you can make both on the management, learning and application of the tools themselves that if you don't have a good coach beside you, you're more likely to get shot down than you are to reach the end of the road.

You have to start at a single plant site and pick a product family and use value-stream mapping to look at where the time is wasted and where the value-added and non-value-added steps are in the process. That can give you a map of where to begin in terms of getting results.

When you look at the value-stream map you can see where the non-value adding steps or the time consumption steps are big. With this operational map, you start applying the tools to the subsets within the value stream. You can decide to use Shingo's setup reduction tools to reduce the set up time because that is why things are being held up, or you can put kanban in to link operations. The idea is to get it flowing.

Then the right thing to do is to restudy that value stream again and again so that the organization gets the lesson that, "We made huge improvements but when we went back, it got even better and when we went back again it got even better." You need to sink that logic in early on.

A common format of using these tools that came out of Toyota is to study a small sub segment of one area for a week and make a big improvement. If everyone knows that the goal is to have it be different at the end of one week, it creates a different environment as opposed to, "We're going to analyze it for several months and then do something."

If you count those weeklong periods of applying lean tools to any administrative or production process as a learning experience, it takes 50 or 60 of those before you actually begin to believe in most of the principles. If you can do one of those a month, which is a pretty good pace from following up on the last one and getting ready for the next, you're talking about five or six years before you believe in the basic principles and another three or four years before you are competent at using most of the tools.

Even though you know how to use them, you still may not be willing to put one-piece flow in place. This is why they use the idea of the sensei, which is a marshal arts concept. You must have a master teacher and you learn by doing. You don't go to classrooms. You go out and practice the exercise. 

Lean is learned the same way. You go out in an environment where your processes are and you apply the tools. It is out of that process that you come to believe the process works.

Q: With the manufacturing sector in a downturn, do you think companies are running out of time to start the process?

Koenigsaecker: The good news about the downturn is that more people are willing to seriously look at undertaking a lean journey.

Q: Wall Street richly rewards the companies that undertake lean without realizing it. Why isn't there much pressure from Wall Street to adopt lean?

Koenigsaecker: If they went back to Danaher 10 years ago and looked at them as they were then, they would say that is just another dog shit industrial company. But each quarter along the way they look at the cumulative record and they get impressed by the numbers.
I always tell people who are considering the journey that they should just remember that their board of directors is a surrogate for Wall Street and will only judge the process by the financial numbers.
You need to drive cost, quality, delivery and you need to make sure it shows up on the income statement and the balance sheet.

Q: Isn't that hard to do, especially early in the process?

Koenigsaecker: When you start the process it takes a lot of energy and most of the organization will give you some level of support for improving quality and delivery. But in the end, productivity growth is the one that drives margin improvement and increases wealth, and you find out that nobody wants to do that. There are all kinds of dynamics you have to deal with. Those on the administrative side don't even think productivity is a relevant measure for them, and they don't want anything to do with it.
You have to push pretty hard on the results and at the same time you have to make sure that people are putting the infrastructure in and are using the tools. It can be uncomfortable, and most people will just pass on that discomfort unless there is some form of pressure. I use the results as pressure.

Q: Is that what you did while leading the effort at The HON Company?

Koenigsaecker: At HON, we deployed an objective for every unit including administrative to improve output per person by 15 percent every year and to cut quality defects by 20 percent. When we got our lead time down to daily production it was harder to measure. Most of the people thought we were insane when we started with those goals. Nobody liked them. To the extent that it doesn't spread is a management issue and that is where we as an industry need the most help.

Q: Do you need hard-ass managers to make it happen?

Koenigsaecker: When you start in a new organization, one way or another, you have to make sure that everyone in the organization and especially the antibodies know that their choice is to join up with this new way or find a different organization. Most managers are very much afraid of making that decision. There are not many people willing to do that. Joe Day, CEO of Freudenberg-NOK is one of those who did a standout job of that.

One of the group guys from Danaher [Art Byrne] went to Wiremold. Joe Day was on the board of Wiremold and saw the process happening there. But when Joe launched it, he led it. He's like the perfect CEO from the change management perspective. But unfortunately, there are a lot of imperfect ones.

Q: Do you think it is inevitable that manufacturing will evolve to a lean system?

Koenigsaecker: If you look at the history of mass production, it took about a generation after the idea started for it to be accepted. After Ford, it was about a generation -- 25 to 30 years -- before GM and the others were on the same page and then it was another generation -- post World War II -- before the European auto manufacturers really adopted mass production.

If you're in an industry and one firm in the industry adopts lean, they'll end up dominating the industry and other people will either have to do it or fall out of the industry.

Q: If U.S. manufacturers start adopting lean, do you think it will lead to a revival of U.S. manufacturing?

Koenigsaecker: With lean, you end up with an extremely flexible and responsive company so that you can do things with delivery performance that were not possible at a long distance from your customers. That becomes a marketing advantage.
Using lean, you can get to daily production like they do at Danaher and HON where they make every product every day by going through reducing set up times, a la Shingo's methodology. At Jake Brake, for instance, Caterpillar or Cummins can call up a UAW operator in the cell and order product for the next day and it will be shipped the next evening.
When you start, it seems impossible but when you finish you realize it's pretty straightforward.

Topics from George Koenigsaecker Articles

CEO's, executives and leaders - the following articles will help you understand continuous improvement and its bottom line impacts.  They are written by George Koenigsaecker, a principal investor in several lean enterprises, and is President of Lean Investments, LLC, a Private Equity organization with an emphasis on manufacturing.  Koenigsaecker is a Board Member of the Shingo Prize, the international award for "lean enterprises," and is a board member of The Association of Manufacturing Excellence, Ariens Outdoor Power Equipment, R W Baird Capital Partners Advisory Board, Simpler Consulting, Watlow Electric Corp., and Xaloy Inc.

From 1992 until 1999, he led the lean conversion of the HON Company, a $1.5-billion office furniture manufacturer. During this period, his efforts resulted in a tripling of volume, and culminated in HON Industries being named by

Industry Week

magazine as one of the "World's Best Managed Manufacturing Companies."

Prior to joining HON, Koenigsaecker was with Danaher Corp., where he was President of the Jacobs Vehicle Equipment Co. (whose lean conversion is featured in the book

Lean Thinking

by Jim Womack and Dan Jones), and Group President of the Tool Group, the largest business unit of Danaher. In addition to leading the lean conversion of these operations, Koenigsaecker developed and implemented the "Danaher Business System," a comprehensive lean-enterprise model.

In addition, Koenigsaecker has held senior management positions in Finance, Marketing, and Operations with Rockwell International and Deere & Co. He is a graduate of the Harvard Business School.

Start with:

Leadership 2005

Manager’s Guide 2001

- restudy the process over & over

- How he found out about lean, some examples

- Make problems visible so they must be solved

- Discipline

- Build the lean office

- Too busy to apply lean

- Learn by doing

Seeking the Lean Machine 2004

- 3 phases

- Reconfigure production tech.

- Right sized Machine design & build

- Auto unload

- Sheet metal & press brakes

Leadership 2005

- stats, 3% success

- due to lack of senior leadership involvement

- productivity gains 400%, understanding how much waste exists

- typical results & payback time

- financial effects

- required kaizens

- 4 levels of learning

- Free up the best person

- No successful instances where CEO did not have hands on

Strategy Deployment 2006

- 4 key areas

- ROI, income statement

- Improvement efforts expected results each pass

- 2 parts to strategy deployment

- Not knowing what org will look like

Sustaining Lean 2007

- firefighting, today’s predominant culture

- leadership change

- process improvement payback 90 – 120 days

- learn through personal application

- 1st step for leaders

- Required kaizens for managers

- Necessity for leadership participation regularly

- Continuous improvement is never ending

Perseverance Pay Off 2008

- 10:1 payoff investing in employees

- Organizations should not focus on any one quality improvement tool but on the appropriate tools for each specific problem.

- Reducing lead times to grow 3-4 x industry rate

- Strategies for a recession

- Freeing up working capital

- Cost of labour, revenue per square foot

- Rarely lay off people, engaging in productivity measure

- Freeze hiring during recession

- Dealing with slower sales

Interview AME 2010

- Danaher

- Change senior leadership behaviour**

- Measurement & payback

- Financial effects

- Works anywhere

Author of Leading the Lean Enterprise Transformation

Malcolm Gladwell Why do some succeed where others fail? What makes high-achievers different?

Outliers: The Story of Success

2:30
Sports team cut offs influence who eligibility date cut offs. At this age the oldest ones are usually better. When we look for the best ones, we pick the oldest ones (we think they’re the best), and give them access to specialized coaching, opportunities, extra games etc. and create an elite. The arbitrary rule that gave them privileged access to

4:15
We create these systems where we identify people that have a narrow initial advantage and then we shower them with all kinds of additional advantages that which causes that small difference to grow.
American economic system – the wealthier you get the more economic advantages you get.

5:30
When the international cut off dates for soccer changes, the number of people with birthdays near that cut off date
Soccer teams are dependent on when we choose to put the cut off in relation to peoples birthdays.
These kinds of arbitrarily rules structure advantage and create lasting abilities in certain people to achieve.

7:00
Creating gifted kids – we categorize and give them a privileged set of special opportunities.

11:00
We are far to impatient to develop peoples talent.
If you want to know if anyone is any good or not at something give them 10,000 hours of practice

12:00
Usually those who’ve had some special opportunity to practice. Often a family who’s better off can provide this environment is in a better position to provide this.

13:00
IQ tests

14:00
Stats

15:00
IQ is meaningless as a predictor of your ability you’ll do when you get in.

The way in which ivy/elite schools run their admissions program is non-sensical.
You can’t distinguish between people based on entrance criteria.

IQ is of limited use in the prediction of excellence. We just love the idea this # is meaningful.

22:30
People who are very very successful in their careers they do not fit the profile of people those who are very success full at school.
We are becoming increasingly and painfully aware that performance at academic tasks is not a useful predictor of performance in the real world.

37:00
Society could create systems that even out the distribution of opportunity.

38:45
Our over emphasis on individual responsibility for achievement is a way of avoiding responsibility for our collective efforts on behalf of success.

10,000 hours with reference to cognitively complex tasks. You have to put in the necessary amount of repetitions.

43:00
Class advantage curve
Some disadvantages are disadvantages. Some disadvantages are advantages.
Some advantages are disadvantages.

46:30
Are the social preconditions for achievement in _______ equal, for _____ and _____?
If we can identify a difference in those social preconditions, then this is where we should spend our time and attention.
And if after we’ve equalized those conditions, there continues to be a difference in performance, only then should we ask the question about an inability.

47:00
Capitalization:
What % of people who are capable of doing (x) end up doing (x).
How good are you at exploiting the talent you’ve got.
We can not even begin to talk about whether they are innately better than us, until we have a capitalization rate that’s equal to theirs; until we have social structures that are in place to allow us to see how much talent we have.
The capitalization rate for (x) in _______ is a fraction of what it is for (x); this is the appropriate way to think of this question.

http://www.youtube.com/watch?v=jh9ax4QvzoQ

Marketing & Variability - Malcolm Gladwell on Spaghetti Sauce

Howard Moskowitz – has done as much to make people happy as anyone. Known for reinventing spaghetti sauce.

When they analyzed the Diet Pepsi data, they were asking the wrong question. They were looking for the perfect Pepsi, and they should have been looking for the perfect Pepsis.

He would say, "You had been looking for the perfect Pepsi. You're wrong. You should be looking for the perfect Pepsis."

"to a worm in horseradish, the world is horseradish.”

"There is no perfect pickle, there are only perfect pickles."

Prego is a better tomato sauce than Ragu. The quality of the tomato paste is much better, the spice mix is far superior, it adheres to the pasta in a much more pleasing way.

If you analyze all this data on spaghetti sauce, you realize that all Americans fall into one of three groups. There are people who like their spaghetti sauce plain, there are people who like their spaghetti sauce spicy and there are people who like it extra chunky.

“We've been thinking all wrong!" And that's when you started getting seven different kinds of vinegar, and 14 different kinds of mustard, and 71 different kinds of olive oil

he fundamentally changed the way the food industry thinks about making you happy. Assumption number one in the food industry used to be that the way to find out what people want to eat -- what will make people happy -- is to ask them. And for years and years and years and years, Ragu and Prego would have focus groups, and they would sit all you people down, and they would say, "What do you want in a spaghetti sauce? Tell us what you want in a spaghetti sauce." And for all those years -- 20, 30 years -- through all those focus group sessions, no one ever said they wanted extra-chunky. Even though at least a third of them, deep in their hearts, actually did.

People don’t know what they want. The mind knows not what the tongue wants.

And a critically important step in understanding our own desires and tastes is to realize that we cannot always explain what we want deep down. If I asked all of you, for example, in this room, what you want in a coffee, you know what you'd say? Every one of you would say "I want a dark, rich, hearty roast." It's what people always say when you ask them what they want in a coffee. What do you like? Dark, rich, hearty roast! What percentage of you actually like a dark, rich, hearty roast? According to Howard, somewhere between 25 and 27 percent of you. Most of you like milky, weak coffee. But you will never, ever say to someone who asks you what you want -- that "I want a milky, weak coffee."

he made us realize in the importance of what he likes to call Horizontal Segmentation

Mustard – grey poupon came out and took over the mustard industry. And everyone's take-home lesson from that was that the way to get to make people happy is to give them something that is more expensive, something to aspire to. Right? It's to make them turn their back on what they think they like now, and reach out for something higher up the mustard hierarchy. A better mustard! A more expensive mustard! A mustard of more sophistication and culture and meaning. And Howard looked to that and said, that's wrong! Mustard does not exist on a hierarchy. Mustard exists, just like tomato sauce, on a horizontal plane. There is no good mustard, or bad mustard. There is no perfect mustard, or imperfect mustard. There are only different kinds of mustards that suit different kinds of people. He fundamentally democratized the way we think about taste.

Howard confronted the notion of the Platonic dish. Why were we attached to that? Because we thought that what it took to make people happy was to provide them with the most culturally authentic tomato sauce, A, and B, we thought that if we gave them the culturally authentic tomato sauce, then they would embrace it. And that's what would please the maximum number of people.

We used to be obsessed with looking for universals, in this case, cooking universals. What’s great revolution in science of the last 10, 15 years? It is the movement from the search for universals to the understanding of variability. Now in medical science, we don't want to know how necessarily -- just how cancer works, we want to know how your cancer is different from my cancer. I guess my cancer is different from your cancer. Genetics has opened the door to the study of human variability. What Howard Moskowitz was doing was saying this same revolution needs to happen in the world of tomato sauce.

Howard not only believed that, but he took it a second step, which was to say that when we pursue universal principles in food, we aren't just making an error, we are actually doing ourselves a massive disservice.
And the example he used was coffee. And coffee is something he did a lot of work with, with Nescafe. If I were to ask all of you to try and come up with a brand of coffee -- a type of coffee, a brew -- that made all of you happy, and then I asked you to rate that coffee, the average score in this room for coffee would be about 60 on a scale of 0 to 100. If, however, you allowed me to break you into coffee clusters, maybe three or four coffee clusters, and I could make coffee just for each of those individual clusters, your scores would go from 60 to 75 or 78. The difference between coffee at 60 and coffee at 78 is a difference between coffee that makes you wince, and coffee that makes you deliriously happy.
That is the final, and I think most beautiful lesson, of Howard Moskowitz. That in embracing the diversity of human beings, we will find a surer way to true happiness.

[youtube https://www.youtube.com/watch?v=iIiAAhUeR6Y&w=480&h=390]

Richard Branson - Screw It, Let's Do it

Screw It, Let's Do It: Lessons in Life and Business (Expanded)

P2
If something is a good idea, consider it, then work out how to make it happen.
P3
People don’t leave their jobs through lack of pay – they leave because they aren’t valued. Many companies leave people in boxes;
Encourage them to be adaptable and innovative.
P10
Whatever you sell, 1st identify your market.
P13
Tell the advertising manager at (Co. 1) that (co. 2) are taking the inside back page – did they want the prestigious back page itself before I offered to (co. 3)? Vie one against the other.
P16
We all need someone to act as a counter balance to our weaknesses and work off our strengths.
P19
It was no use producing goods or having the best ideas in the universe if they just stayed in your head or stacked up in a corner.

What are people doing when they buy?
What do they want to do to be sure they want to buy?

P33
If something is what you really want to do, just do it. Whatever your goal is you will never succeed unless you let go of your fears.

Ch 2

P37
It something stops being fun, I ask why? If I can’t fix it, I stop doing it.
Work should inspire and satisfy us.
First business enterprises were not a success, but I learned from them.
P46
Life is too short to be unhappy.
P48
Never just try to make money. Long term success, happiness and satisfaction will never come if profit is the only reason for your enterprise.
Detached from values, money may indeed be the root of all evil, but linked effectively to social purpose, it can be the root of opportunity.
P51
Divide your private life from your work life.

P53
…by not gambling on something he couldn’t control.
Employees think for themselves. They have good ideas to listen to. What is the point of hiring bright people if you don’t apply their talent?
P58
It’s easy to give up when things are hard but we have to keep chasing dreams and our goals; once we decide to do something, we should never look back, never regret it.
I rely on my gut instinct more than thick reports.
To know if something is a good idea that will work, mostly, you need common sense and vision.

P61
Having fun is important, even within a business context. It’s a prime criterion in any project I undertake.
P66
Some you win and some you lose. Be glad when you win. Don’t have regrets when you lose. Never look back. Try to learn from it.
Whatever your dream is go for it. Always be aware if the risks are too random or too hard to predict. If you opt for a safe life, you will never know what it’s like to win.

Ch 4

P67
Everyone needs something to aim for. You can call it a challenge, or you can call it a goal. It is what makes us human.

Ch 5

P81
In the real world, people struggle and there are winners and losers and sometimes injustices we have to rise above.

Ch 6

P99
The Spanish painter, Dali, had a unique way to savour THE MOMENT. When he was bored with life, he would walk in his garden above the sea. He would pick a perfect peach, warm from the sun, holding it in his hand to admire its golden skin. Closing his eyes, he would sniff it, breathing in deeply as its warm perfume filled his senses. Then he would take a single bite. His mouth would fill with luscious juice. He would savour it slowly. Then he would spit out the mouthful and throw the peach into the sear below. He said it was a perfect moment and he gained more from that single, unrequited bite than from gorging on a basket of peaches.

In a way, REGRETS are like wanting the peach you have thrown away. It’s gone, but you are filled with remorse. You wish you hadn’t thrown it away. You want it back. I believe the one thing that helps you capture the moment is to have no regrets. Regrets weigh you down and hold you back in the past when you should move on.

It’s hard to lose out on a business deal, but harder to suffer from guilt. We all do things we wish we hadn’t. Sometimes – usually in the middle of the night when you can’t sleep – they seem like big mistakes, but later, when you look back, they turn out to be small. Regrets, which lead to a sense of guilt, can give you sleepless nights. But I believe the past is the past. You can’t change it. So even if sometimes you get things wrong, regrets are wasted and you should move on.

P103
If everyone would befriend their enemy the world would be a more pleasant and peaceful place.
Mend bridges with everyone you fall out with.
Money is just a means to an end, not an end in itself.

Ch 7

Face problems head on
Money is for making things happen

You can be best friends with someone and still not agree with them and, if you are close, you can get through it and remain friends.

P108
By facing it head on, you stop it from getting worse.
It’s best to bring things out into the open. A dispute can be sorted in a friendly way before it escalates if you deal with it immediately.
P109
…as long as you pay them in the end.
P114
Even if someone is hired to do one thing, if they have good ideas, or can handle something else, just let them do it.
P116
When you pick the right people, you can leave them to it. You know that things will run smoothly if you’re not there.

Ch 8

P120
You never know who might hear or see you. People talk. Gossip has a habit of getting back to those you gossip about.
Respect is how to treat everyone, not just those you want to impress.
Don’t look for the quick buck. You want slow, solid capital growth.

Ch 9

P131
The earth was 1 single enormous living organism and every single part of the ecosystem reacted with every other part, even though there was no obvious link between them. If any one part of the planetary system got stressed the earth would react automatically to remove the problem. In effect, it healed itself.

The same theory is almost universally accepted and forms much of the basis of our current understanding of global warming and the need to cut emissions into the atmosphere before the earth turns around and kills the problem – in this case, you and me: the human race.

P137
Part of our resistance to change is due to evolution. Our brains are good at perceiving danger in the form of fangs and claws and spiders and fire. It’s more difficult to trigger the alarm parts of the brain – those connected to survival – with grave dangers that can only be perceived through abstract models and complex data – in other words, dangers that can’t be seen until too late.

P139
We’re behaving like a group of people agreed that the building around us is on fire, but unwilling to reach for the alarm or fire extinguisher.

P143
The Stone Age didn’t end because we ran out of stones.
The age of fossil fuels won’t end because we run out of fossil fuels.
Something else will take its place.
We have to ensure that something else won’t cause our extinction.

Oil prices are going up. Research showed us this was mostly due to a shortage of capacity. For whatever the reason, oil companies are not investing in oil refineries.

P144
We human beings are capable of convincing ourselves of something that’s not true long after the accumulated evidence would convince any reasonable person that it’s wrong.

P150
A $25 million prize to the person who can find the best way of dequestrating carbon out of the earth’s atmosphere.

P153
Henry Ford’s first Model-T was built to run on fuel made from hemp, but the car itself was constructed from hemp.

Popular Mechanic magazine wrote in 1941 that the Model-T was grown from the soil and had hemp plastic panels whose impact strength was ten times stronger than steel. Diesel, the inventor of the diesel engine, designated it to run on vegetable and seed oils like hemp.

Hemp crop grows faster than a forest and produces up to four times more cellulose per acre than trees.

Bills proposing a National Energy program making use of America’s vast agricultural resources were killed by smear campaigns launched by the petroleum industry.
They used the ability to tax petrol by claiming that the US government’s plans ‘robbed taxpayers to make farmers rich.’

Ch 10

P160
The time to go into a new business is when the genre is abysmally run by other people, and when I feel I can provide a significantly better customer experience.
Ask yourself: Is there room for me, and can I do better?

P166 Marketing
Don’t use celebrities to say “we think this is a really good product,” it always seems fake, and doesn’t reflect your image at all.
Do something different; use them in a little story where the schema almost comes through the celebrity no taking themselves too seriously.

Make people laugh.

Amusing without being meaningless.

P169
A brand is only as good as your products, and often that means being very well looked after.

Experience your business through your customer’s eyes.
Meet your customers, and you’ll be told about any little details that are not right.

A good brand means that the customer falls in love with it, desires it, wants it – and buys into it.

Ch 11

P181
I got it all down on tape, sent him a copy and heard no more. Never take defeat lying down.
P185
Acting in the best interest of the customer & creating buzz – Virgin’s ad encouraging customers to fly on another airline (British Airways) the day they were giving away seats.
When a company couldn’t get the London Eye up, ran an airship above with sign “British Airways can’t get it up.” Put the fun into business.
P187
Called a press conference. Stated selling company to everyone’s surprise. One journalist rushed off to file her copy while everyone stood shocked. “Only joking,” I said hastily, and in front of everyone tore up the check.

Ch 12

P201
The man who started IKEA divides his day into 10 min. sections. “10 minutes, once gone, are gone for good. Divide your life into 10 minute units, and don’t waste even a minute.”

You don’t have to fill your time rushing about in order to use your time wisely; Bill Gates said his staff am Microsoft could spend 2 hours gazing into space, as long as their minds were working.
Albert Einstein came up with the theory of relativity in his head without paper or pen. He only wrote it down later.

If you have time to lean, you have time to clean.

Ch 13

P223
Sometimes, a project might not have an obvious profit in it, but what can be developed from it is more important.

I have never really wanted to get involved with (_____) because I can’t quantify and control the risks.

Be fast and move fast when you have to. Sometimes it’s best to keep ideas on the back burner and wait for the developments to come around, and then pounce on them as quickly as you can. Keep things simple. People get lost when a systematic approach becomes over complex and they lose sight of the actual goal.

Ch 14

Children who attend lessons in personal finance and household budgeting could be up to 32,000 pounds richer by the time they reach their forties than their peers who didn’t receive the lessons. Financially educated children went on the save around 1/5% more of their income each year.

There is nothing wrong with a formal education as long as you don’t let it stunt you.

Whatever business you get into, have a passion for what you do, for the moment it becomes all about the money is the moment you will cease to go forward. Worry about survival rather than sorting out the world’s problems for the 1st few years.

If capitalism is to be given a good name, then essentially capitalists need to give back to society. ‘Don’t herd sheep, herd cats.’ It’s easy to heard sheep, but impossible to lead them from the front. Cats, on the other hand, are independent and intelligent and those are the kind of people we want to employ. A good lesson to take on board for anyone in business is to employ thinkers, not yes men. There’s a danger that people become concerned and fearful of taking risks. Perhaps they have a partner or a mortgage which prevents them. They must no let this constrict them in being bold and being brave.
…no ties, no strings and nothing to lose. But those with something to lose might consider that by aiming high, they might achieve a lot more.

People who have been sent to prison; when they come out, unless they get a job they might re-offend and society will be harmed in the mean time. If capitalism is to be given a good name it must give back to society.

P236
Anything can be turned around if the people are empowered.

The break down in family live has played a big role in lack of social cohesion and skills.

The interaction between adults and children was very strong. They guided; we followed.

Today’s rootless children who learn only from their peers are lost to society. Parents need to share responsibility, not wait for government to come up with solutions. Young people have a huge amount of energy and potential to do well and none of them should be written off.

P243
“Our deepest fear is not that we are inadequate, our greatest fear is that we are powerful beyond measure. It is our light not our darkness that most frightens us. We ask ourselves, who am I to be fabulous, brilliant, talented, gorgeous? Actually, who are you not to be, you are a child of god your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won’t feel insecure around you. We are all meant to shine, like children do. We are born to make manifest the glory of god within us. It is not just in some of us; it is in every one of us. And as we let our own light shine, we unconsciously give people permission to do the same. As we are liberated by out fears, our presence automatically liberates others.”
- Mandela, 1994

P247
Never be complacent.
Focus on your people and your customers, and by allowing your businesses to have autonomy. If you look for the best in your employees, they’ll flourish. If you criticize or look for the worst, they’ll shrivel up.

She made sure we were always surrounded by other family members and living an everyday life.

I encourage them but never pushed them.

Everyone needs to keep learning. Everyone needs goals.

A Whole New Mind with Daniel Pink

1/6
[https://www.youtube.com/watch?v=pVFQ78HbJK0&w=480&h=390]
Intrinsic motivation must develop
Intrinsic motivation
- do what you do because you like it; interesting, challenging, meaningful; people who are intrinsically motivated do fine
- people to worry about are those who chase external rewards & external validations; over time they start to wonder what their live is about and they start to have huge regrets
3:00
A good speech has

1) brevity
2) levity (not to severe & serious)
3) repetition

2/6
[https://www.youtube.com/watch?v=hI3gkwxc_Ds&w=480&h=390]
0:24 Artistry, empathy, inventiveness, pic picture thinking, are the abilities that matter most.
2:58 Abundance, Asia, Automation
World of abundance
- either provide something that people don’t realize they need
- design (a combination of desire/significance & utility)
o increasingly in a world of abundance you get your margins out of significance rather than utility 9:41

3/6
[https://www.youtube.com/watch?v=rqvCj-J8noE&w=480&h=390]
0:50 We’ve grown 3x richer but not 1 bit happier;
Abundance gap –
People questioning when they are going to start doing something to leave a legacy [meaning, purpose, significance] is happening at a rate unprecedented in human civilization.
8:00 Routine – any kind of routine work (any work you can reduce to a script, to a spec sheet, to a formula, to a set of rules, to a series of steps that produces a right answer) is going to disappear from this country

4/6
[https://www.youtube.com/watch?v=ePUwc2wFlq4&w=480&h=390]
Automation

What matters more than high tech abilities is high concept & high touch b/c hard to outsource & hard to automate & deliver significance.

Not routines & right answers – economy is now about novelty & nuance

In business today you must be literate in design. MFA is the new MBA.

Facts have become ubiquitous (free). What matters more is putting facts in context and delivering them with emotional impact. That’s what story does. The use of story as a differentiator in a crowded market place.

5/6
[https://www.youtube.com/watch?v=u45s8hk-zf0&w=480&h=390]
The back stories products, services, experiences are now very important differentiators.

We tend in business to obsess over focus, focus, focus; when often the opposite ability is the most important.
Symphony – the ability to see the big picture, detect patterns, to combine disparate things into something the world didn’t know it was missing.
Self made millionaires are 4 x as likely to be dyslexic.
Develop this skill - Learn to draw [Learn about proportions, relationships, light & shadow, negative space (the space between )]

Notice the arrow between the Ex

Empathy (standing in someone else’s shoes, feeling with their heart, seeing with their eyes ) cannot be automated, cannot be outsourced.
JSPE – Jefferson Scale of Position Empathy – the more empathic your doctor is the more likely you are to get better.

6/6
[https://www.youtube.com/watch?v=1KCZzSKT-HE&w=480&h=390]
Laughter clubs
Meaning

Linking profit and purpose.

The sorts of things we do out of a sense of intrinsic motivation, out of the joy & challenge of the task itself, are the things that are now conferring the greatest advantage in the economy.

Dan Pink - Drive

41:23 min presentation

7:45
“As long as a task involves only mechanical skill, bonuses work as they would be expected: the higher the pay, the better the performance.”
“But once the task calls for ‘even rudimentary cognitive skill,’ a larger reward ‘led to poorer performance.’”
D. Ariely, U. Gneezy, G. Lowenstein & N. Mazar. Federal Reserve Bank of Boston Working Paper No. 05-11, July 2005; NY TIMES, 20 Nov. 08

10:00
Experiment repeated in India with larger incentives.
“In eight of the nine tasks examined across the three experiments, higher incentives led to worse performance.”

12:30
In an effort to deter parents from picking up their children from daycare late, a daycare center started charging parents each time they are late.
After the introduction of the fine we observed a steady increase in the # of parents coming late. The rate finally settled, at a level that was higher, and almost twice as large as the initial one.
‘A Fine is a Price,” Journal of Legal Studies 29 (January 2000).

Parents were showing up on time because they didn’t want to inconvenience the daycare workers. When a price was put on it, it became a transaction and people bought more of it. When they figured this out and removed the fine, lateness stayed up (people had habituated it).

Behavioural physics – when you reward something, sometimes you get less of the behaviour you want;
Sometimes when you punish it you get more of the behaviour you don’t want.

15:00
Redgate (software) – Eliminated sales commissions and sales increased. What happened:
- sales people became more collaborative
- managers spend less time policing sales people and who gets what, and more time actually trying to help customers
- “Our [previous] sales salary system felt like … a gigantic, complex and medieval spirograph centered on an assumption that wasn’t true.” Neil Davidson, Co-founder Red Gate software
The assumption that isn’t true:
Human beings are fundamentally inert and passive, and if we didn’t have a carrot dangled in front of us or a stick being wielded over us we would not do anything.
A lot of people believe this; No one ever believes this about themselves though.
This is an incorrect assumption.
Human nature is to be active & engaged.
You can’t find a 2 or 4 year old that isn’t active & engaged – it’s the way we are from the start.

18:00
If you don’t pay people enough, they won’t be motivated. Compensation research shows people are exquisitely attuned to fairness; if people are being paid unfairly; if they are not compensated adequately; if they feel they are getting a raw deal; if they are having a hard time supporting their family; this third drive doesn’t enter.
Once you pay them enough, this third drive matters almost incalculably.
The best use of money as a motivator, is to pay people enough to take the issue of money off the table.
Pay people enough that they’re not thinking about the $, they’re thinking about the work.

There are 3 Factors that lead to better performance (and personal satisfaction):

Autonomy
– our desire to be self directed; to direct our own lives
– management runs afoul of this; it is about control; the goal of management is compliance
– if you want engagement, self direction is better
Atlassian – Said to employees once a quarter take 1 day and do what ever you want. At the end of the day all we ask is you present to us (the company) in a fun meeting.

22:00
Zappos – 2 weeks of training, after which they offer an incentive: if you wish to leave right now we will give you $2000 (used as a filter; probably anyone who leaves for $2000 is probably going to cost you more than $2000 in the long run).
Then they say to their call center reps: go to your desk, arrange it however you want, when a call comes in here’s your job: solve the customers’ problem.
Do it your way, no script, no timing, no monitoring. If it takes you 1 minute great, if it takes an hour that’s fine too.
Zappos has one of the highest customer services ratings in America, higher than the 4 Seasons.

What is the job of a call center: to solve the customers’ problem.

24:00
20% time
Atlassian said these Fedex days are working so well we want to go to 20% time, where twenty percent of the time people can work on anything they want.
Also done at google, producing google news, gmail; just about all the good ideas here have bubbled up from 20% time. – Alec Proudfoot, google

Mastery – our urge to get better at things; we like to get better at things.
- for example, how people spend their time on the weekends (play musical instruments, ) b/c it’s fun & they get better at it…
- open source software (image you were to have told someone 20 years ago, for a business model, get a bunch of people around the world, doing highly skilled work, but they’re willing to do it for free, and volunteer their time, sometimes 20-30 hours/week; and then what they create, they give it away rather than sell it. – people would have thought you were insane, but we have linux powering 1 in 4 corporate servers in fortune 500 companies; Apache powering more than the majority of web servers; Wikipedia)
o these are people who have jobs, for pay doing technically sophisticated challenging work, and yet during their limited discretionary time they do equally if not more technically sophisticated work, not for their employer, but for someone else FOR FREE.
o WHY: Challenge & mastery, along with making a contribution
o The urge for mastery is so powerful people will take their limited discretionary time to do similar work they get paid for, but do it for free.
27:00
The Top motivator at work is making progress. What really motivated them at work, was getting a little bit better.

“The key to motivationn… doesn’t depend on elaborate incentive systems. (In fact, the people in our study rarely mentioned incentives).

28:00
Purpose – we want to be part of something larger than ourselves.

TOMS – shoes
- you buy a pair of shoes at TOMS, they give a pair of shoes away to someone in the developing world
- “We try to turn our customers into benefactors.”

The profit motive is not the only thing;
The Purpose Motive: more and more organizations want to have some type of transcendent purpose.
- it makes coming to work better
- this is the way to get better talent
- the profit motive must be connected to the purpose motive

Skype: “Be disruptive, but in the cause of making the world a better place”

Steve Jobs “Put a ding in the universe”

We are purpose maximizers, not only profit maximizers.
The science shows we care about mastery very very deeply; and we want to be self directed.
32:00
If we start treating people like people;
and not assuming that they’re simply horses,
if we get past our ideology of carrots and sticks,
and look at the science
we can build organizations and work lives that make us better off,
and also even make the world a little bit better.

38:00
People tend to go for what’s easy and seemed to work for them they believe has worked in the short run; it’s hard for they to break out of this.

Candle experiment
- If people are offered incentives for this it will take longer to solve the problem because they are focused on the task.
- If the answer is straight ahead they can intensely focus on what’s in front of them and race towards it even faster
- It’s the enemy of creative problem solving because they are not picking up on the lateral signals
- In many ways If – Then incentives don’t work for creative problem solving precisely because they work so well for the non-creative tasks; they are so good at focusing our attention they are a detriment to more creative conceptual problems
- Crude incentives limit the breadth of your thinking so you’re not picking up on the lateral signals; they also foster an intense for of myopia; you are only fixated on the carrot in front of you; if there is a grizzly behind the carrot you won’t see it.
- Research also shows, in financial situations, if you offer very high stakes rewards for short term goals, some people will take the low road there.

The Mismatch Between Science & Business

Daniel Pink

The Surprising Science on Motivation

The Candle Problem
- overcome functional fixedness: you look at the box and see it only as a receptacle for the tacks, but it can also have another function as a platform for the candle

Power of Incentives
- timed on how long it took to solve this problem with incentives, it took on average 3 minutes longer with incentives
- Incentives dull thinking and blocks creativity
- This has been replicated over and over that “If you do this you get that” work in some circumstances but for A LOT of tasks it either doesn’t work or often makes it worse.
- This is one of the most robust findings in social science, and also one of the most ignored.

Our business operating systems; the set of assumptions and protocols beneath our business systems; how we motivate people, how we apply our human resources, is built entirely around these extrinsic motivators, around carrots & sticks.
This was fine for many types of 20th century tasks;
but for 21st century tasks, mechanistic, reward & punishment approach doesn’t work, often doesn’t work, and often does harm.

Repeat experiment with the tacks out of the box; incentivized group does better.

If then rewards work really well for the sorts of tasks where there’s a simple set of rules, and a clear destination to go to. Rewards by their nature Narrow our focus, concentrate the mind, which is why they work in certain cases really well.

But for real problems, you don’t want to be narrow minded, you want to looking for the solution on the peripherally around. The reward mechanism will narrow our focus and restrict our possibilities.

Workers are now doing more complex work requiring peripheral thinking, since the left brain linear work has become easy to outsource or automate.
What really matters are the more right brain, creative, conceptual kinds of abilities.

Think about your own work. Are the problems that you face, or the problems you talk about; those kinds of problems:
Do they have a clear set of rules? Do they have a single solution? No
The rules are misdefined. The solution, if it exists at all, is surprising, and non-obvious. Everyone is dealing with their own version of the candle problem.
And for candle problems of any kind, in any field, the IF – THEN rewards, the things around which we build so many of our businesses: DON’T WORK.

This is not a feeling; this is not a philosophy; this is a fact.

“As long as the task involves only mechanical skill, bonuses work as they would be expected. The higher the pay, the better the performance.”

But once the task called for even rudimentary cognitive skill, a larger reward “led to poorer performance.”

“Higher incentives led to worse performance.”

“We find that financial incentives can result in a negative impact on overall performance.”

To many organizations are making their decisions; their policy about talent and people, based on assumptions that are outdated, unexamined, and rooted more in folklore than in science.

If we really want to high performance, the solution is NOT TO DO MORE OF THE WRONG THINGS; to entice people with a sweeter carrot, or threaten them with a sharper stick.

We need a whole new approach. Scientists have studied motivation and given us this approach. It is an approach based much more around instrinsic motivation, around the desire to do things because they matter, because we like it, because they are interesting, because they are part of something important.

This new operating system for our businesses revolves around 3 elements:

Autonomy
- the urge to direct our own lives

Mastery
- the desire to get better and better at something that matters.

Purpose
- the yearning to do what we do in the service of something larger than ourselves

Management is something that was invented. It is great if you want compliance, but if you want engagement, self direction works better.

Example: Atlassian - A few times a year they tell their engineers work on anything you want as long as it’s not part of your regular job. This one day of intense autonomy has produced a whole array of new software fixes that may not have existed. It has worked so well they’ve taken to the next level with 20% time. Also done at google, where about half of new products originate from 20% time.

ROWE – Results Only Work Environment
In a ROWE people don’t have schedules. They show up when they want. They don’t have to be in the office at a certain time, or any time. They just have to get their work done. How they do it, when they do it, where they do it – is totally up to them. Meetings in these types of environments, are optional.
What happens in these types of environments:
- productivity goes up
- worker engagement goes up
- worker satisfaction goes up
- turnover goes down

Microsoft started Encarta – extrinsic motivator
Few years later another encyclopedia got started; no incentives. Intrinsic motivator.

There’s a mismatch between what science knows and what business does.

Here’s what science knows:

Those 20th century rewards, those motivators we think are a natural part of business do work, but only in a surprisingly narrow band of circumstances.

Those if then rewards, often destroy creativity.

The secret to high performance isn’t rewards and punishments, but that unseen instrinsic drive, that drive to do things for their own sake; the drive to do things because they matter;

We already know this; the science confirms what we know
If we repair this mismatch between what science knows and what business does; if we bring our notions of motivation into the 21st century; if we get past this lazy, dangerous ideology of carrots and sticks, we can strengthen our businesses, we can solve a lot of those candle problems, and maybe we can change the world.

Lean on Government

The City of Cape Coral, Florida

The City has initiated a “Lean Government” program for simplifying and streamlining various business processes. The goal is to reduce overall process times, increasing quality and lowering cost.
The method establishes cross-functional “kaizen” teams of City employees who map and dissect the existing processes. They then eliminate non-value-added steps or waste.
The lean approach had its origins in manufacturing but has been used successfully in government and service industries. Lee Memorial Hospital has an internal Lean improvement team, and nationally, the City of Fort Wayne, IN has the leading municipal program, which has delivered well-publicized results.

The City is working to train teams of employees to analyze specific processes and obtain improvements. As efficiencies are realized and improvements made to satisfy our customers’ service demands, there be a reservoir of talent developed who can work throughout City government for continuous improvement. These efforts will meet the needs of a growing city and allow employees to “work smarter” for the public good.
The City of Cape Coral was awarded the Strategic Leadership Award by the International City/County Management Association for the Lean Government System.

1. What is Lean Government?
Lean Government started in the private sector. It is an effort to closely examine, in a very critical and methodical manner, the processes in the City and determine where waste or non-value steps occur and then eliminate the waste. This results in reduced delays and stops, creates more efficiency and saves money while not reducing quality.

2. What has been done thus far?
Since August 2007, the City has conducted 16 Kaizen events. Each has produced dramatic results in how we operate and resulted in savings. To date, the return on the invested consulting dollars was 14 times – counting only hard dollar savings. The savings is much greater considering time saved and efficiencies obtained in each process.

3. What is the process?
A cross-functional team of City employees is established to map and dissect the existing process. The teams eliminate the unnecessary steps (waste) and redesign the process to allow service or information to flow more efficiently. After the new process is in place, it is monitored to ensure that the goals and objectives are met.

3. What other governmental entities are doing "Lean"?

In Florida, the Jacksonville Sheriff's Department uses Lean. Nationwide, the City of Fort Wayne, Indiana and the State of Iowa have been leaders in this effort.

4. Why do we need a consultant's assistance?
The consultant's training in Lean and experiences in the private sector are invaluable in teaching the participants to critically examine what they do and why they do it. This review is done in an environment that encourages critical thinking by the Kaizen group members and provides insight into opportunities to eliminate waste.
This training, along with the Kaizen experience that the participants receive, serve to assist in beginning a transformation of thinking — from accepting waste to becoming intolerant to waste. The training also provides daily opportunities to more critically review other processes as well. This is most important in these difficult economic times.

5. Have employees actually taken some of what they have learned and used it outside the formal Kaizen process?
Yes. Some department employees, after experiencing a Kaizen event, have gone back to their departments and identified and eliminated waste in other processes. Both have resulted in savings of time by maintaining just the value-added steps in the process.

7. Will we need a consultant for years to come?
No. Staff’s goal is to take this effort completely in-house within just a few years. Specifically, it is hoped that with an additional full year of experience with the consultant, that a reduced presence by the consultant could be possible in the third year (2010), with the program being completely assumed by in-house staff thereafter.

8. What are future expectations?
Our goal is to sustain existing Kaizen event results, and reduce the number of delays, stops and cycle times in all processes. This will apply to all departments and divisions. We continually will try to identify cost savings/avoidances in all areas.

Link to this excerpt here

July 2, 2009

Cape Coral’s “Lean Government System” Program Receives International Recognition

The City of Cape Coral’s “Lean Government System” has received the Strategic Leadership and Governance Award from the International City/County Management Association. Cape Coral was one of 10 local governments receiving recognition for outstanding programs.

“Being a recipient of the ICMA award for strategic leadership is one of the highest honours a local government can receive,” said City Manager Terry Stewart. “This award recognizes that Cape Coral is leading the way in reforming how government operates, and is focused on finding efficiencies and improvements in all of our operations.”

In August 2007, the City of Cape Coral implemented the Lean Government System. A cross-functional team of City employees is established to map and dissect existing processes, eliminate the unnecessary steps and redesign the process to allow service or information to flow more efficiently. All employees (front line, managerial and executive) are included in the evaluation, planning and implementation of the Lean processes, which ensures that all employees have a voice in the changes.

“We have conducted 18 events in seven City departments resulting in about $2 million in cost savings and/or cost avoidance,” said Stewart. “The goal in every event is to increase productivity and reduce cost without sacrificing quality and the service to our citizens.” Lean Government Coordinator for the City of Cape Coral: Ms. Roop.

Some of the many successes include:

• Team reduced the time to obtain a permit for construction from 21 days to 8 days.
• Time required to hire a firefighter went from 66 days to 30 days.
• Lot mowing time was reduced from 52 days to 19 days to mow the grass once and send a notice of violation to the property owner.
• The cycle time for first reviews in Site Plan Development initially decreased to five days from 28 days. The time currently is eight days.

The City of Cape Coral is working with other local communities to share and assist in implementing a Lean initiative in their areas. In October 2008, the City partnered with the Florida City/County Management Association, the Center for Florida Local Government Excellence and the John Scott Dailey Florida Institute of Government to offer a Lean Government workshop to surrounding municipalities. Participants included Marco Island, Collier County, Punta Gorda and Palm Beach County.

The ICMA advances professional local government worldwide. Its mission is to create excellence in local governance by developing and advancing professional management of local government. ICMA provides member support to more than 9,000 city, town, and county experts and other individuals and organizations throughout the world. The management decisions made by ICMA's members affect 185 million individuals living in thousands of communities, from small villages and towns to large metropolitan areas.

more examples here

Improving Restaurants

Lean techniques seek to improve product and service quality while simultaneously reducing waste and labor costs. For food service operators, the additional trick is to link such improvements to customer loyalty.

For one operator, this effort meant tackling unpredictable demand and excessive error rates and wait times (ten minutes for simple sandwiches) on orders. The operator mapped daily changes in demand to highlight fluctuations, introduced a self-service counter, and redesigned kitchen and food preparation procedures to standardize sandwich making and eliminate waste, which consequently fell by 40%.

Meanwhile, labor costs dropped by 15% and service times improved by one-third. Best of all, sales increased by 5% and margins on affected products more than doubled, since employees could spend more time influencing customers and less time apologizing to them.

Lean Thinking in Agriculture

Leadership

What does it mean to move from 'command and control' to leadership?

The role of leaders does change in a lean organization.

In the traditional organization, leaders are successful and rewarded for getting results, directing, and delegating to people and often “fire fighting” with quick solutions to problems.

In a lean organization, the focus shifts from the results to the process needed to get the results and from directing people to coaching and facilitating. This coaching and facilitating is toward building both personal and organizational capability around PDCA and problem solving.

Read the entire letter by Michael Hoseus, Lean Enterprise Institute.

Leverage LinkedIn for the job searcher

After creating a profile:

o make it a point to add all of your daily contacts
o list your accomplishments
o Consider a Professional resume writing service; $100 is a small price to pay for several thousand in salary
o Deal with recruiters who deal in the right areas; some are in manufacturing; some are in IT; project management; etc - if you're going to deal with a recruiter *once you do, ANY company they deal with is obligated to pay them if they hire you, even if the recruiter didn't get involved with the process* navigate carefully
o Keep in touch with people & companies you previously interviewed with – they may hire you in the future
o Learning more about your interviewer before the interview. If I see they went to school somewhere, I ask them what it was like to break the ice in opening conversations.

Follow Company
- to find out who’s hiring & firing (openings)
- Has a replacement been hired for the position? find out (call if needed) “What company did he come from?”
o Chances are that company had to back fill the position and their may be a position there. Contact them.

Join groups
- (not so much social groups) – alumni groups, associations., company groups
- This lets you message other people in the group free

Advanced search
- For people who have your skills & background to find companies that employ people like you.
- Get to know a company. Advanced search on a company and uncheck “current companies only” to see what kind of talent has left the company, and how fast. Contact them to see what they have to say about their former employer & add them to your network

When you get partial info.
- if the person is “Out of your network” you may only have restricted access to their details, and receive only their First Name and Initial of last name
- To find the last name, open a separate window run a google search on their name and position/company. Google usually locates their LinkedIn public profile which displays their full last name and details.

Advanced search by:
o title
o current employment
o company
o postal code

- to get name of employees
- CALL and ask to speak with them
- leave msg if needed “Hi this is ______ I’m a _______ and wanted to talk with you.”

Your goal is to establish contact
o Once they call you, there may only be a 1-2 minute window
o “I’ve been _____________________ for (x) yrs. at ____________, and have also helped other companies with parts of their ___________________.” (this is what I’ve done).
o “I’m interested in _______ and have been doing ________. I was on LinkedIn and noticed you ________.”
o Ask them “Where in (co. name) can you use _______ (my skills)?”

**Do Not mention the position, there may be others they will bring up you don’t know about.

He may try to pass you off to HR
- If you need to speak with him more “I understand HR has an important role but they don’t understand ________ as well as you do”; or “I will definitely take the name of the person you recommend in HR, but I’ve found those who are currently involved with doing the work have a much better understanding of that area and what’s involved; who I really need to speak is your manager, what’s his name?”

o If you end up speaking with HR, say “(name of the person who passed you off) the (their position) asked me to contact you regarding ____________.” HR is more likely to listen if it sounds like an internal recommendation.

Jobs
- when doing a job search, the job will often display who it was posted by, usually the person hiring. Contact them directly as well as add them to your network for future opportunities.

Even better than LinkedIn is to find events you can attend to meet/network with people face to face.

The Lean Service Machine notes

Cynthia Karen Swank
Harvard Business Review
Oct. 2003

- Companies can introduce a lean system without significantly disrupting operations with a model cell – a fully functioning microcosm of its entire process, allowing managers to conduct experiments and smooth out kinks while working toward optimal design.
- Traditional production systems: large batches are processed at each step and are passed along only after an entire batch has been processed. At any given time, most of a batch in a traditional system is sitting waiting to be processed; it is costly excess inventory. Errors cannot be caught or addressed quickly, because if they occur, they tend to occur on a large scale.
- Established a baseline time for each element by determining how quickly an untrained person could do it, then challenged employees to make improvements and create shorter baseline times.
- Balancing work evenly eliminates unnecessary delays
- The key to successfully segregating complexity is to cluster tasks of similar levels of difficulty into separate groups with their own performance goals.
- Evaluated on and rewarded for objective results they could track themselves – rather than by their bosses’ subjective observations.

Always measure performance and productivity from the customer’s perspective
- Switch to measuring how its customers assess the company’s speed. Customer focused metrics help erode the ‘my work is all that matters’ mind set.
- Shop floor goals should be linked to the metrics that are applied to the CEO’s performance. Hoshin kanri, or policy deployment is the best way to align an organization’s activities with its strategic objectives.

Example:
A metric for CEO’s performance is the ratio of the co.’s total _____ expenses to he value of new ________.
The cell’s productivity directly affects this measure – as productivity increases, the _____ expense eventually decreases.
An employee may be evaluated by the # of ______ they process an hour, and the _____ team’s manager is assessed on the hourly # of ______ the team processes.
The _____ manager’s boss, the CP is assessed according to the productivity of the ____ team and all the other steps in the process. These productivity rates affect the metric for the VP in charge of __________, a measure that is the same as the performance metric for the CEO.

The CEO’s success is directly linked to each frontline worker’s productivity. In this way, you have spread accountability and rewards throughout the system, rather than concentrating them at the top.

- Vendor selection criteria; alignment with you companies objectives, aggressive annual goal setting, and adoption of lean process that fit well with yours.
- Established baselines from which cell managers could set goals for the new processes.
- Divided operations according to the status of the customers and the complexity of the tasks.
- All proposals for automating processes now include a lean analysis; do not introduce automation in an area until lean principles have been applied and the new process has stabilized.
- To ensure effective knowledge transfer to operational management and frontline employees, it needed to communicate the “why” as well as the “how.” Everyone in the company needed to understand why the new process design was necessary and that it would require continual adjustment.
- Use a game to communicate the how & why of lean, where the winner has the highest profit (minus WIP and defects), and teams move from a batch to continuous flow process.
- How is profitability measured in my department?
- Who uses my work once I’m done, and what do they do with it?
- How close do I sit to the rest of my process team?
- Is my neighbour idle while I am scrambling to keep up the pace?
- Does work come in batches that allow a single step to become a bottleneck, or does work move forward 1 piece at a time?
- Are we waiting until the end of the process to check for errors, or are we inspecting at every point in the process?
- Are there steps that can be eliminated, and am I pushing management to implement changes?
- Visible participation of senior leadership emphasized the importance of this.
- Many tools were developed in the service industries; supermarket was based on an old concept in a service industry: retailing.

Microfinance

Microfinance

Giving people access to credit & training that can help them move into self employment, freeing them to generate an income that will eventually let them save, send someone to school or build better shelter. Repayment rates tend to be better than for rich borrowers, though interest rates are typically higher because the loans cost more to administer.

Microcredit has evolved into microfinance: services for the poor ranging from health insurance to savings programs. The sector had 107 million poorest of the poor borrows globally at the end of 2007, a 14x increase in a decade.
It has reached the developed world. Grameen Bank branches opened in 2008. The US now has 362 outfits, and loan applications doubled this year.
In Canada, NFLC, Desjardins & Vancity are offering microloans, particularly to immigrants who lack a credit history in this country. Vancity has dispersed almost 400 microloans in the past 4 years, growing about 10%/year, and says need is outstripping its ability to supply the loans.

Other ancillary services – training, business development, health. Financial services with financial education.

- Tavia Grant

Globe & Mail
Nov. 13, 2010

Humanitarian Aid, Being Gifted, SILVER over gold - Globe & Mail

Is Humanitarian Aid bad for Africa?

The starving children of Ethiopia were not the victims of drought, as most people believed. They were the victims of politics. The government was using famine as an instrument of war, and the rebels were more interested in defeating the government than in feeding victims. Political famines attract aid, with the consequence that governments or rebels can feed their won armies and divert resources to buy weapons.

Most of us believe that humanitarian aid is a morally pure way to respond to suffering in the world.

The colonial mindset of ‘we know best’ has surely persisted; the trouble is that we haven’t learned the difference between doing good and feeling good. Until we do, many of our aid efforts will be worse than useless.
- Margaret Wente

The Curse of giftedness

Their intellectual gifts mean they are even more aware of the flaws in their clay, of how short they fall from self-imposed goals. “People are forever telling me the achievements of my life and yet I feel I’ve accomplished nothing – nothing compared to what I might achieve

Success in school does not predict success outside of it.

Empathy, like creativity and imagination, is not something that intelligence tests are good at identifying.

…was an overweight couch potato, depressed at his failure to live up to his parents’ expectations, but once he escaped, he blossomed as an adult to become happy…

Love all the child’s gifts and faults. The concept of ‘gifted child’ is a man made phrase, an arbitrary line.
- Elizabeth Renzetti

Gifted: it implies that something was bestowed on them, the ‘gift,’ instead of that they’ve worked for it.

The kids who need help are those at risk of dropping out or failing because they are facing emotional and social problems. In many cases giftedness is not a badge of distinction so much as a life problem that needs solving.

It brings with it other issues, including heightened sensitivities, including heightened sensitivities, perfectionism and social deficits.

30% of the kids had learning disabilities along with their giftedness. Among other things, being ‘gifted can lead to bullying and social isolation.

Gifted kids will often experience their giftedness as a big bag full of expectations. So there’s some anxiety about being able to live up to those expectations.

Supported Failure – asking open ended questions – such as whether euthanasia is ever justified- so they can experience the (frightening) truth that there’s not always a correct answer.

Fixed mindset vs. Growth mindset.
Children who are designated bright after an IQ test are less likely to try potentially difficult tests; over time, they often fail to match their original scores. Kids praised for their effort, not their smarts = those with a growth mindset – were able to improve their scores by 30%.

Do we want to be remembered as people who categorized and labelled children (to their detriment), or as people who helped all children fulfill their potential?
- Tralee Pearce

An Industrial Strength Argument for Silver over Gold

Silver is essentially an industrial metal, and should trade on supply/demand fundamentals.

It typically outperforms gold in times of economic recovery; it responds to the increased demand that an economic expansion implies. Financial demand for precious metals can be fickle. Gold has much greater exposure to ‘financial demand – purchases made by investors – leaving it more exposed to the changing moods of the market. [Bulsing] feels most comfortable with the metal that has the strongest fundamental demand.
- David Parkinson

“To me it comes down to choice. I am not interested in imposing my views on anyone any more than I’m interested in having their views imposed on me.” – Danielle Smith

Globe & Mail
Nov. 13, 2010

Training within Industry - TWI

Original TWI Manuals are available here:
http://www.trainingwithinindustry.net/JI.html

and can all be downloaded as PDF files for you.

"Deep practice is built on a paradox: struggling in certain targeted ways -- operating on the edges of your ability, where you make mistakes -- makes you smarter."

"Before we make product, we make people."
What capabilities must we ensure are embedded in our people, in ourselves?