CI 101

What is the right environment for improvements?

Previously, I discussed how the job environment affects lean implementation.  The company culture determines how employees react to the news regarding continuous improvement or lean implementation.  The reaction goes from confusion to disbelieve.  If leadership credibility is not the best, many will think that this is the flavor of the month and will unconsciously sabotage the efforts.  Once an organization starts down this road, it must keep going, or risk losing all credibility.  

In my experience, there are three characteristics or values that describe the right environment for implementation.  If they are not part of the culture, continuous improvement will be just a dream.  Those values are the following.

Respect for the people

Respect for the people is at the core of lean thinking.  The team is the heart of the lean system, as leaders, it is our responsibility to develop, empower, recognize, and provide learning and growing opportunities for our team.  One way to show respect is the creation of fair rewarding and pay systems.  Although money is not the best way to show appreciation, it is important.  For some leaders, the biggest challenge is to learn how to treat their team as people and not just employees.  Leaders should actively listen to understand their team concerns, what they care about, and ideas.  Respectful treatment and rules are the same for everybody regardless of the role or years of service.  Consistency and kindness create the trust environment that is critical for the next value, learning.  

Learning

To practice continuous improvement, you need to break with traditional ways of thinking and doing things.  You will need to learn new ways of doing old tasks.  CI will expose new problems and bigger challenges; therefore, learning requires discipline and persistence to keep going.  The leader’s job is to find ways to motivate, unleash creativity, promote collaboration, and encourage people to learn by doing.  However, some classroom training on fundamentals is necessary for skills development.  In CI, you either win or learn.  Leadership has to bury the fear of losing and learn that it is ok to make mistakes.  Also, encourage the attitude of we can do it, instead of saying that it cannot be done.

Communication

Communication is critical to organizations, regardless of the industry, size, or CI status.  The biggest challenge here is learning to listen to understand, never to judge.  Promote a strong two-way communication environment is easier said than done, especially when the starting point is the traditional “I say, you do” management.   Effective communication needs the delivery of clear and complete information, which includes objectives, and the clarification of roles responsibilities.  People need to know how the company’s performance and plans for the future.  They also need timely and clear feedback regarding their performance.  These conversations sometimes are tough, but necessary.  Waiting until the performance appraisal time to give feedback is disrespectful and contrary to all the values listed here.

CI 101

How do you align Kaizen with Business Objectives?

When you have specific business improvement goals as part of your Business Plan and strategies, it is easier to identify where you should focus on kaizen activities.  But even if this does not exist, you can still align your kaizen to your business goals.  Let’s take a look at how you would do it under each scenario.

Before I continue, I want to clarify something.    Previously I defined strategy as the framework that establishes what the organization will do to deliver value and how it expects to accomplish target revenues and profits.  However, it is common to use the word strategy while talking about the activity, policy, or process designed to achieve the objective.  For example, to support the objective increase in sales from x to y, the process or activity z (strategy) grow business by 10%.  To be consistent, I will use the activity or process to indicate the way to achieve the objectives.

When it’s time to develop next year’s goals, you group the business plan with the continuous improvement plan.  Achieving those goals means achieving the desired conditions for profitability, delivery, quality, and people.  From these statements of intent, you move to develop specific objectives, which are a clear target or destination.  To make your business map more effective, you also established what are you going to do to achieve them, and how you are going to do it.  At this time, you can identify in what department or area this activity will have more impact on the KPI’s and use the information to plan specific projects.  The kaizen events will help to achieve the objectives.  Kaizen is very powerful when used as a tool to improve the process to close the gap with the objective.   

When the business plan does not include the improvement plan, you can still align kaizen with it.  Your team is dealing with problems that impact productivity, quality, cost, and delivery.  Daily kaizen, and events, can help to overcome those challenges by improving the process and solving operational problems.  You can start doing daily kaizen at any time to start tackling their pain points, but some recurrent issues with high impact in the business deserve a kaizen event.

As always, you need to understand the problems first.  Talk with the team, key players, customers, and learn about their pain points, challenges, and needs.  A brainstorming session with the team would be a good start to generate ideas for possible kaizen events.   The next step is to validate those ideas, to see if they align with the objectives or drive the business KPI’s.  With a refined list of kaizens, the next step is to prioritize based on the effort vs. impact or benefits level.  After this, you are ready to start planning kaizen.

The important part for both processes is to align kaizen with the business objectives, which should target KPI’s that measure customer satisfaction, quality, delivery, and cost.  Let’s keep improving!

CI 101

How does the job environment affects lean implementation?

The key ingredient for a successful lean implementation is creating a continuous improvement culture. Changing behaviors and beliefs is never easy, but the previous culture will determine how difficult it will be. The work environment, which is the result of the company culture and management styles, will determine how the employees react to the implementation.

According to Gallup, just 33 percent of American workers are engaged by their jobs, with 67 percent either actively disengaged or “just showing up.”  The way the employees feel they are treated by supervisors; how much they trust leadership and communication styles affect engagement and productivity.  Employees want to feel valued, respected, that their ideas count, and their work is meaningful.  

The objective of the culture change is to shift from traditional thinking to a lean thinking approach and to be successful, the relationship between leadership and associates will be the biggest hurdle.  Leadership defines the organizational culture, that is why the first key element for a successful implementation is the buy-in and support from them.  

Before you start planning the implementation, you have to understand how the previous culture shaped the work environment.  The team mindset is closely related to the job environment and employee satisfaction. 

Do you know how your employees feel about the company?  How do they feel about their supervisors?  What they think about how leaders make decisions?  Do they feel that they matter?  To change their mindset, you need to get honest answers to those questions.  Getting the truth can be difficult and painful, but it is a necessary step to know how your employees feel and create the appropriate implementation plan.

If leadership does not change their traditional business behaviors and adopt servant leadership, no matter what you do, the implementation will fail.  The true mission is to develop our people first, if you are not serious about this, then do not bother, lean, is not going to happen.

If you are serious about adopting Lean thinking and use continuous improvement, find the right way to motivate your team, starting with honest and open communication of why you want to change.  Have a heart to heart conversations, to gather information to create change.  Identify the team interests, how they perceived their benefits and company policies, and how clear they have their responsibilities.  

It takes a lot of continuous work to change the culture.  After those conversations, everybody needs to turn the page and start working together to create a better future and shape the new mindsets.

CI 101

What is knowledge waste? One of the 8 Wastes of Lean.

In my previous post, I mentioned that the heart of the lean system is people’s involvement, a highly motivated team continuously seeking the best way.  I learn this idea from Pascal Dennis on his book Lean Production Simplified, which is one of my favorite lean books.  It was in the same book, where for the first time, I learned about the nine wastes of knowledge.

Value-added activities add something, change, or transform material or information into what the customer is willing to pay for, everything else is non-value-added or waste.  Although at the beginning was seven deadly wastes, now we include the waste of knowledge to have eight categories of waste.  

Knowledge waste has different names, unused or non-utilized talent, non-utilized potential or skills, and neglect of human talent.  Regardless of what name you use, this type of waste is one of the reasons why so many companies have huge turnover rates.   In traditional management, leadership dictates orders expecting people to follow them without even questioning.  Doing that is disrespectful, it is treating people like commodities, the same way machines are treated.  

There is no surprise that for Toyota, respect is one of its core values.  Self-esteem is one of Maslow’s psychological needs, the feeling of achieving things, confidence, and respect is important to have the right level of self-esteem.  As leaders, we are responsible for actively listening, understand, motivate, teach, and influence our team.  If we fail, we are stopping the flow of knowledge, ideas, and creativity.  In other words, we are failing our team and creating a waste of knowledge.

The nine types of knowledge waste are the following.

  1. Hand-off – a separation of knowledge, responsibility, action, and feedback.
  2. Useless information – false or incorrect information
  3. Discarded knowledge – acquired knowledge or information that no longer serves the original purpose
  4. Wishful thinking – making decisions without adequate information
  5. Waiting – for information, comments, authorization
  6. Misalignment – disconnects in information or time, between departments, or within departments. 
  7. Communication barriers – culture, language and organizational culture
  8. Inadequate checking – constant follow-up, check, and balances, lack of trust
  9. Wrong tool – poor communication tools, narrow information channels

Many leaders still think that to be the boss, they need to have all the information, and hold it for themselves because the information is power. There is a lot of hidden talent in our organizations, and it is our responsibility to motivate, develop, teach, communicate, and influence our team. If we are not doing this, then we are guilty of creating a waste of knowledge. 

CI 101

Do you still think that continuous improvement is not for you?

Some companies have been dealing with the COVID-19 pandemic much better than others, at least for now.  Over the past few weeks, I have seen and shared through my Twitter and Facebook accounts examples of how lean companies have handled the crisis.  The common denominator for all of them is they keep the focus on the same things, people, and customers.  They also use different continuous improvement tools to learn and adapt to the new normal in record times.  How did they do that?  Using lean thinking and not taking their eyes from the basic principles.

The term “lean thinking” was coined by James P. Womack and Daniel T. Jones, it is used to describe the process of making business decisions based on the Lean Principles.  Womack and Jones book, Lean Thinking: Banish Waste and Create Wealth in Your Corporation presented and talked in detail about those principles. 

  1. Customer Value 
  2. Identify all the steps in the value stream and eliminate waste.
  3. Make the value-add steps flow.
  4. Let customers pull value from the next upstream activity.
  5. Continuous Improvement 

Since the first principle is to define value from the customer point of view, it is logical to start the crisis response looking at how value changed for internal and external customers.  As a leader, you are responsible for your employee’s health and well-being while they are working.  To provide a safer possible workplace, revise the value stream to identify how it needs to change, how the flow will be affected and corrected, and finally implement the changes.  While doing this, keep the communication with your employees and customers to make sure that you are adapting to their new needs and priorities.

Improving the process is an activity that never stops.  Every day new information comes out that makes it necessary to change something on the process.  Lean companies can face this challenge easier than others because they developed people to become problem-solvers. They focus on the problem cause and possible solutions using PDCA, 5 Why, and other tools.  It is better to have an army of problem-solvers than just a few people, or worst, just you.   

The heart of the lean system is people involvement, a highly motivated team continuously seeking the best way.  To keep the heart healthy, you need to maintain a respectful, free of blame, and honest work environment where the team feels they are being cared for, and their feelings and ideas matter.

I don’t know if lean or continuous improvement is the antidote against the economic crisis, we are living in.  Based on my experience, I know that it is better than traditional management, and it works for any industry, of any size.  Industries with a small profit margin, like restaurants, will benefit from this type of thinking more than anyone.  Changing the decision-making process and how you conduct business is a better route to become profitable and flexible.  

If you keep doing what you always did, you will get what you always got. Henry Ford

CI 101

Standardization and problems, how to create standard work to reduce problems?

In continuous improvement, we define a problem as a deviation from the standard.  That is a difference between what should be happening and what is actually happening.  That gap is a problem.  Standardization is the practice of setting, communicating, following, and improving standards and standard work.

But what happens when there are no standards?  How do you know that you have a problem?  Normally you know because a situation that does not feel right is jumping at you, other times those situations are screaming at you.  Those screams are usually in the form of complaints, delays, errors, or performance variation.  How do you choose where to start?

There are different prioritization criteria that you can use to determine what process you will tackle first.  You can choose the process based on volume, the effect it has on the problem you are looking at, or how much influence it has over the cost of operation.  If you never create a standard before, my advice is to start with a small process.  This will give you the chance to learn the basics before digging into a bigger problem.

The development of a standard begins with the problem we are trying to solve.  What is the target condition?  What should be happening?  What can you do to ensure you met the target condition every time?  Do not try to set your current process as the standard, if you have problems it is obvious that the current process needs improvements.  That is why you need to understand the current situation, find the root cause of the problems, and improve the current process before creating standard work.  In general, the following are the steps to create standard work.

  1. Understand the process, break down the job & question every detail
  2. Develop a new method for performing the job
  3. Run the process and observe results
  4. If it is necessary, adapt the process and go back to step 4.
  5. When you find the best method, create the standard

Standard work does not make any good if it is not communicated.  For that reason, training is the next logical step.  While creating the standard, engage the help of some members of the team.  They have the knowledge and experience that will facilitate the creation of the standard.  Also, this would be a teaching opportunity to develop their skills.  Train supervisors, team leaders, and other members of the team.  Use visual management if it is possible and have the standard work available for reference.

Now that you have standard work for that process, identify the next process, and keep improving.  Standard work is the foundation for improvements, they provide the baseline to process improvements.  Once established, stabilized it, and improve it!

CI 101

How do I prepare to reopen my business?

We are preparing to return to some kind of normalcy in our lives, including reopening our businesses. When we open the doors, the business situation will be very different from what it was before the pandemic crisis began.  You had a vision for your business and a plan to drive you there, but now everything is different.

It is time to sit down and reflect on the future.  The starting point will be to understand the challenges that are coming right to us.  With the help of your team, answer the questions below and then update your business plan.  Things like the sales forecasts, costs, and other assumptions will change.

  1. Reopening implies changes, what needs to change in your operation?  
  2. Do you need to invest in protective equipment, such as acrylic panels or floor markings? 
  3. What new recurrent costs you will have to fulfill new safety requirements?  
  4. How the market will change?  
  5. Do your customers would need something different? 
  6. Does your value proposition need to change?  

After adapting the business plan to the new environment, establish your new objectives and strategy.  Rethink your business strategy carefully, how you guide your decision-making process from now on can be your competitive advantage. 

Your business plan is your guide to the future you envision, but you also need short-term plans to prepare the operation for the new requirements.  What processes have to change?  Do you need to implement new processes to ensure your team and customers’ safety?  Does the work area need changes to adapt to social distancing?  How will you control traffic and flow?  

Many tools will help you to analyze, design and test solutions, PDCA is one of them.  To ensure everybody does the same thing standard work and visual management are important.  Sometimes there is no time for a long analysis, but you can still practice continuous improvement.  If you are not doing it already, build the habit to have daily meetings with your staff.  We call them stand-up meetings, or daily huddles.  

During them the team do a quick review of the operation the day before.  The key here is to ask two important questions, what went well and what needs improvement.  You want to discover the reason for the gap between desired and current state.  A quick 5 Why discussion can lead to simple solutions that can be implemented during the shift.  

From now on, the way to conduct business should be different.  This is the time to prepare yourself and your business for the future.  Given how fast everything changes with the development of the COVID-19 pandemic, the business of the future demands good leadership, employees and leaders engaged in common goals and flexibility.  Continuous improvement and lean thinking promote that kind of behaviors. 

Focus on the things you can control, take a deep breath and start creating your future.  Be safe, stay well.

CI 101

Are you sure you have visual controls? Do you know the difference between visual control and a display?

Often people confuse visual controls with visual displays. A visual control calls for action while a display exhibits information.  5S, the five steps for cleaning and organization provides the basis to build a visual workplace.  There are four different stages or types of visual management, display, calls for attention, organize behavior and defects prevention.  Only the last three are considered visual controls, they show the standard and the actual performance.

The basic stage of visual management display, it only exhibits or tells information.  Level 1 of this stage, gives people information that you want or need them to know.  For example, headcount, open positions, visitor schedules, and safety trends.  The second level shares standards at the site.  Work standards remind the employee of the right way to do the job, but they do not tell what to do if something is out of standard.  

The second stage, calls for attention, has levels 3 and 4.  In level 3, you start building standards into the workplace.  The difference is that now, a signal points out when something is out of standard.  At this step, you start using, for example, status boards with metrics posted each hour, heat sensor stickers, gauge labels, and oil level indicators.  

Level 3 sets the baseline for the next level where metrics are in real-time, and alarms or strobe lights go off when the actual performance is different than standard.  At level 4, the visual warns about abnormalities it speaks to you.   

The third stage, organize behavior, is level 5.  When something happens, it calls your attention and also guides your behavior.  In other words, it prevents defects from happening because you know what to do when you receive the warning.

The ultimate goal of every visual management system, prevent mistakes, is level 6.  At this stage, you and your team implement simple, low-cost devices that prevent problems from happening or stops the workflow when defects occur to prevent more.  Error-proof devices have shapes, guides, or sensors that prevent the person from inserting them in the wrong direction or shut down the device to avoid injuries.  

Many companies never moved from the first stage, and wrongfully think that they have visual controls.  To avoid that mistake, start with 5S and keep improving, one step at a time to reach the ultimate goal, mistake-proof controls.  In my next publication, I will show you examples of each stage of visual management.

CI 101

Why Plan is critical for the success of your PDCA?

Monday, I talked about what the PDCA cycle is. Today I want to highlight how critical the step Plan is.

PDCA Cycle

Many times, while analyzing a problem, we don’t spend enough time understanding it. Instead of looking for the root cause of the problem, we start developing theories to correct the symptoms. If we create a plan to test possible solutions to the wrong problem, then the plan is doomed to fail.

The most important part of the PDCA cycle is understanding the problem. Get the background of the current situation. Even when you think you know the process, ask why it exists. Check the capability, expected outcomes, and actual performance. What value does it provide to the customer? Research regarding any possible risks, policies or regulations that can affect efficiency.


You must spend time observing what is going on. Go to gemba, where the action happens. Observe for as long as you can, and take notes to compare against all the data. You cannot have the whole story if you don’t go and see it for yourself. Go ahead and talk with your team, the people who do the work. Respectfully ask questions to understand the situation from their point of view.

After you know the process, define the problem. What is the gap between the expectation or goals and the current results? Describe the current situation using data, charts, tables or diagrams. Use tools like the 5 Whys and Fishbone diagrams to understand why that gap exists. It is critical for success that you identify the root cause of the problem. Otherwise, you will be working with symptoms and not the real problem.

Engage the team in the discussion of possible solutions. Go to gemba again and brainstorm with the people doing the work. If you find more than one root cause, rank them according to which has the greatest impact on the problem. At this point, you should have all the information you need to propose countermeasures or possible solutions. Tie your action items with the root cause while creating the plan. Who is responsible for doing what? How? Where? By when?

During this initial step, you determine the success of the PDCA exercise. You are trying to formulate theories to explain the gap between the standard and current performance, without the complete information, your theory will be wrong.