How long does is take to transform to a lean enterprise?

Lean nation,

I hope everyone is doing well with the un-seasonally cold weather over the past 10 weeks. While we all like to complain about the cold and snow/ice,  the change in climate does two important things for us; 1) it kills bad bugs , and 2) the melt off fills the lakes and streams.  So let's count our blessings and look forward to a nice spring and summer season.

One of the questions I frequently get from my clients is how long does it take to transform?  This is a great question, but one very difficult to answer.  Third parties that offer improvement and transformation services will answer 3-5 years.  No corporation that ever actually "transformed" has completed the journey in 3-5 years. 

The true test of transformation has few acid tests:

1) Can the organization weather the change of their change agent?  I have seen many companies do great things for 3 years.  When the CEO, or the GM leaves, the improvement leaves with them.  This is the most common cause of lack of sustainability.  Is your improvement effort focusing on developing all of the members of the senior team to weather a change in leadership?  Or is one person driving the bus.  I have seen an organization do 10 years of great improvement work only to have a new CEO wipe out the entire improvement department within 3 months of their arrival.

2) Another red flag as that lean is an "operations" thing.  improvement never moves beyond the operational area in to admin, finance, HR, new product development, maintenance , supply chain, etc.  If this is the case, you are are risk of not transforming.  The organization is too shallow at the leadership levels to recognize the benefits of transformation for the entire enterprise and even the extended enterprise. 

3) Another common failure is lack of a long term view.  Organizations set goals of transforming every thing and everyone  in 3 years.  100% of all people trained! World calls status in 3 years.   While this might impress wall street or the board, this is not a path of transformation.  True transformational success requires a focused approach to improvement aligned to corporate strategy. The pace should be calculated and based on sustaining improvement and changing culture, not number of people trained, or number of projects completed.  Truly transformational efforts  want lasting outcomes ( results ) and culture change, not effort. This is what publicly traded companies have a difficult time transforming.  the measuring stick is making the next quarter's guidance , not really sustaining improvement in performance and culture. 

4) An additional factor is is self reflection and engagement.  A Toyota executive once commented PDCA sound simpler right?  10 years for Plan, 10 years for Do, 10 years for check, and 10 years for Adjust.  40 years to learn PDCA?  If we do some self reflection, we all have some work to do. 

So now that  have covered why organizations don't transform, what is the number of years required to transform an organization?   I'm not sure there is a magic number, but if I have to be pinned down to a single number I would estimate 2 decades.  20 years! Most organizations jump from shiny object to shiny object. Quality circles, TQM, empowerment, etc.  This behavior fails to transform an organization.  Learning can't occur when the methodology and language changes every 5 years. 

You do not, however, need have to wait 20 years for results.  Improvement, done properly, should immediately deliver results to your customer, your organization and to the staff.   

Lean Blessings:

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons LTD

www.breakthroughhorizons.com

Shingo Award winning author 

   

The Roadmap to Organizational Excellence- Part 7 of 7

Lean Nation,

(Part 7 of 7) I am continuing to blog on a seven part series on how to create a world class organization. As a reminder, here are the seven steps to creating a culture of continuous improvement.

1. Find a Sensei - You need a coach to make the journey.
2. Select your organizational wide outcome measures - these are known as the True North measures.
3. Prioritize and map your value streams - select the areas with the most leverage.
4. Deliver Improvement - Use A-3 thinking and lean principles to make the changes identified in your value stream mapping sessions.
5. Sustain your improvements using visual management and leadership standard work. Results are only realized if the gains are held.
6. Support your improvements with ongoing training and leadership development.
7. Spread your improvements to other parts of your organization.
In this blog, I will expand on step 7: spread your improvement to other parts of the organization.  At this point in your journey,  you have prioritized your improvements,  created a detailed improvement plan,  executed the plan using A-3 thinking, and sustained the improvements with equal parts of visual management and leadership standard work.  While completing the previous steps,  you have continued to develop the organization with ongoing training and leadership development.  Now what?
If you are realizing and sustaining double digit improvement in your areas of focus,  you should be getting many requests for help from other parts of the organization.  Everyone wants to get better, make budget, meet targets, etc. Done well, you will not need to push change on other parts of the organization.  You will get a pull from these departments. 

Another key point of spread is that you will need to determine if you are spreading solutions and artifacts or lean thinking.  We can take checklists, visual management tools, and workflows and apply them to other areas.  This ensures consistency from area to area and shortens the lead-time for implementation.  The main draw back is there is not a lot of buy in for the solutions since the receiving department may not have been involved in the development of the solutions.

The other approach is is to translate lean thinking to the other departments.  Allow the areas to customizes their improvements consistent with lean principles.  This leads to enhanced buy-in,  but lengthens the implementation curve. I usually recommend a combination of both approaches.  We want to aggressively implement standards while translating lean thinking through the organization. 

Be sure to create the measurement systems to support spreading of improvement.  We need to be able to see the status of both process and results at a glance.   Many spread initiatives fail because the accountability for results and sustainability is not present.  Having the systems to see the progress and results will help.  Leadership will still be needed to get through the change management issues.

Summarizing the process to get to organizational excellence,  there are 7 steps that I recommend you follow.  We have discussed each of the seven steps over the last 3 months.  (note, there is a different blog topic on each step)  I think it important to note that there are entire books written on each of the seven steps.  There is simply no way to provide all the details in a weekly blog covering only a few paragraphs on each topic. 

If you follow each of the steps with the proper humility and intensity,  you can get your organization on the road to excellence.  This journey will not be a short one.  It will take more than 10 years to create a world class organization.  (Actually 20 years is a more realistic time frame). Because of this,  many organizations skip steps.  Skipping steps will lead to failed results or significantly delay your journey to excellence.  This is not something that can be accomplished in the next quarter or the next year.  You need to budget for the long term.

My first publication (available for sale in early October, 2011),  "From the Assembly Line to Healthcare,  the Application of Lean to the Healthcare Industry"  covers several, but not all of the steps.  Beginning in late fall 2011,  I will be writing my second book, this one pertaining to Lean Leadership.I will be covering the leadership aspects of the seven steps to organizational excellence.  Leadership remains the key to any organizational change!

Lean Blessings,

Ron

Ron Bercaw
http://www.breakthroughhorizons.com/

The Roadmap to Organizational Excellence- Part 6 of 7

Lean Nation:

(Part 6 of 7) I am continuing to blog on a seven part series on how to create a world class organization. As a reminder, here are the seven steps to creating a culture of continuous improvement:

1. Find a Sensei - You need a coach to make the journey.
2. Select your organizational wide outcome measures - these are known as the True North measures.
3. Prioritize and map your value streams - select the areas with the most leverage.
4. Deliver Improvement - Use A-3 thinking and lean principles to make the changes identified in your value stream mapping sessions.
5. Sustain your improvements using visual management and leadership standard work.
Results are only realized if the gains are held.
6. Support your improvements with ongoing training and leadership development.
7. Spread your improvements to other parts of your organization.

This week I will expand on step 6: supporting your improvements with ongoing training and leadership development.  After about six months,  you should start to see some meaningful value stream improvement.  The collection of A-3 improvements supported by visual management and leadership standard work should be moving some value stream outcome measures.  If not, you need to likely go back and re-visit step 5.  As I said in my last blog, step 5 is by far the hardest and the most likely source of substandard performance with respect to improvement.

When the numbers start to improve,  you will start to get requests from other parts of the organization.  Everyone wants help getting better!  Steps 3, 4 and 5 can and should repeat themselves for several years. (most organizations quit at the first pass through the value stream) It takes a while to go through an entire value stream plan and complete the steps required to begin flow and pull.  Let's say we have done this.  Now what?

You should now create a  second value stream plan and develop a new vision for your process.  But we've already created flow and pull and started the implement a  zero defect system.  And we are managing visually.  I'm not sure how a seconf pass can help.  Answer, you might need some new tools.  Learning these new tools are the first part of step six.  You must continue to develop the lean skill set of the organization to wring out additional waste.  You might need to use:

1. Poka-Yoke
2. SMED
3. Kanban
4. utilize the principle of genchi gembutsu
5. hoshin kanri
6. 2P
7. 3P
8. 7 Ways
9. Jidoka
10. Andon
11. Heijunka
12. TRIZ
13. many others

There are many lean tools you might not consider until you have created stability within your processes.  (You may recall this from an earlier blog)  But if we started with 95-99% non-value added activity, chances are next to impossible that a single kaizen event eliminated all of this waste.  Step six says continue your education.  Eliminate more waste using more complex tools and designs.

The second part of step six is continue your leadership development.  As a consultant, about month six into an engagement is when the leadership group traditionally starts to tune me out. After all, there are only seven wastes and five principles of improvement.  They've seen a value stream analysis and likely watched a report out from a kaizen event.  What is else is there to learn?  This is a critical step in the long term success of lean, to transform your organization.  Perhaps you don't know everything about lean and some guidance from a coach might be useful.

For example, what does a lean organization look like?  What type of organizational structure is desired?  Do we need value stream managers?  What does a lean compensation structure look like? How do you create a strategy that enables lean to foster? How do we shorten the learning curve for new staff and managers?  Do we need to start putting two or more value streams together?  When do we take lean outside of our four walls?  What does lean IT look like?  Lean Accounting?  Lean HR? Lean design and construction? Lean supply chain? Should we insource or outsource?  What do lean labor relations look like?

We must continue our development as lean managers to stay true to the lean core principles of continuous imporovement and respect for all people. Without this development, it will be difficult to sustain continuous improvement through the elimination of waste.

When you combine the development and execution of new lean tools and techniques, combined with the continued development of management, you are meeting the spirit of step 6.

Lean Blessings,

Ron

Ron Bercaw
http://www.breakthroughhorizons.com/

The Roadmap to Organizational Excellence- Part 5 of 7

Lean Nation:

(Part 5 of 7) I am continuing to blog on a seven part series on how to create a world class organization. As a reminder, here are the steps to creating a culture of continuous improvement:

1. Find a Sensei - You need a coach to make the journey.
2. Select your Organizational Wide outcome measures - these are known as the True North measures.
3. Prioritize and Map your Value Streams - select the areas with the most leverage.
4. Deliver Improvement - Use A-3 thinking and lean principles to make the changes identified in your value stream mapping sessions.
5. Sustain your improvements using visual management and leadership standard work.
Results are only realized if the gains are held.
6. Support your improvements with ongoing training and leadership development.
7. Spread your improvements to other parts of your organization.

This week I will expand on step 5: Sustain your improvements. This step is by far the most difficult for any organization to navigate.  Why?  Because your culture has shaped your organizational behaviors and actions.  You are what your results say you are. 

Chances are you didn't design your culture.  It likely evolved and improvement is not about executing the mechanics of step one through step x,  it is about changing your culture. And  changing your culture will be time consuming, and require great fortitude, persistence, tenacity, and consistency.  I'll be blunt here,  most management teams teams do not have the energy and commitment to do all the little things required to change the culture of their organization.

There are two great tools in place to help with changing the culture.  Both of them are lead by management.  The first is visual management. The principle of visual management is commonly thought to be a system that shows normal conditions from abnormal conditions. This is generally true. However, visual management is much more than that. Visual management is the system that provides the staff the knowledge and motivation to succeed. Succeed at what? Succeed at satisfying the customer; succeed at developing oneself and one's team; succeed at meeting organizational targets, and succeed at improvement. Taken all together this visual management system is a pretty powerful tool.

I have now settled on the opinion that there are three facets to visual management. The first area of visual management is the management of outcomes. This system is a collection of trend charts showing results and targets, as well as the corresponding action plans to deliver on these targets and the status of these plans.

The second area of visual management is the system of managing process. This system shows hour by hour status of the process and highlights when the system is not operating as designed. Variations from standard are identified and if possible fixed in real-time. If the issues cannot be resolved in real-time, then the sources of variation need to be identified through a histogram/Pareto diagram so they can be prioritized for problem solving. Problem solving is best done using a 5W and 2H approach that gets to root cause, where the direct cause can be identified and the problem can be counter measured for permanent solution. we'll discuss problem solving in a future blog. The final piece of the visual management for process involves the action plan for resolution. Summarizing, visual management of process involves seeing normal operations from abnormal operations, capturing the frequency of deviations from standard, and documenting the corrective actions for resolution. All posted in a transparent manner for everyone to be able to see.

The third area of visual management involves management of the workplace. What I am talking about here is a robust 5S system. this will be the topic of next week's blog. 5S is a management system that visually creates a high performing work area. Many wastes are eliminated through 5S, and I consider 5S to be a basic staple of any improvement system and everyone should begin with this system.

A world class organization has all three elements of visual management in place, current, and followed. These elements include visual management of outcomes, visual management of process, and visual management of the workspace.

The second tool is leadership standard work.  (Note: I'll create a later blog on leadership standard work) Leadership standard work involves disciplining yourself to go to Gemba at set intervals during the day and focus on setting and maintaining, then improving standards.  In short, this implies paying attention to the signals in the visual management system and taking action to ensure compliance with work standards and to identify wastes creeping into the system.  The wastes can be prioritized, then eliminated.  A great visual management system will tee up these wastes and make them readily obvious.

Doing these two things exceptionally well will go a long way in ensuring sustainability of your improvements.

 Lean Blessings;

Ron

Ron Bercaw
http://www.breakthroughhorizons.com/

The Roadmap to Organizational Excellence- Part 4 of 7

Lean Nation:

(Part 4 of 7) I am continuing to blog on a seven part series on how to create a world class organization. As a reminder, here are the steps to creating a culture of continuous improvement:

1. Find a Sensei - You need a coach to make the journey.
2. Select your Organizational Wide outcome measures - these are known as the True North measures.
3. Prioritize and Map your Value Streams - select the areas with the most leverage.
4. Deliver Improvement - Use A-3 thinking and lean principles to make the changes identified in your value stream mapping sessions.
5. Sustain your improvements using visual management and leadership standard work.
results are only realized if the gains are held.
6. Support your improvements with ongoing training and leadership development.
7. Spread your improvements to other parts of your organization.

This week I will expand on step 4: Deliver Improvement.  This step is where most organizations want to begin.  Skip the step of finding an improvement coach,  skip the high level aims,  and skip the planning. Jump right into the tools and go make magic happen.

Working from the premise that you have completed the three prior steps, you have now earned the right to improve.  Following the plans from your value stream analysis, improvement consists of scoping a portion of a value stream and using lean thinking to re-design or design that area.  As a refresher the principles of lean include:

• flow
• pull
• defect free
• visual management
• kaizen

Work that is based on the collection of these principles is known as lean thinking.

You will want to provide lean thinking using the scientific method.  Improvement is not a series of just go and do stuff. You will want to follow the Plan-Do-Check- and Act cycle to prepare for the change, develop a solution, implement the solution, measure the results, and sustain the solution.

A tool that lean organizations use to follow the PDCA cycle and ensure the scientific method is followed is the A-3.  The A-3 is a size of a sheet of paper and also a format and report of the scientific method.    The steps in A-3 thinking include the following:

1. Define the reason for action
2. Identify (quantify) current conditions
3. Document target conditions
4. Document the gaps between current and target conditions.  Identify the waste.
5. Develop Countermeasures for the wastes and develop action plans to test the countermeasures
6. Create follow up plans to institutionalize the change
7. Track the results
8. Document reflections and lessons learned to maintain the organizational knowledge.

I will blog on the A-3 in a future session.  The key takeaway at this point is that the improvements you are making are following the scientific method.  The improvements are linked to value stream improvement, and they are linked to your organizational strategy and their corresponding outcomes.  As a side note, many of the previous blogs in this site talk of improvement tools and lean thinking.

Next week we will talk about step 5, sustaining improvement using visual management and leadership standard work.

Lean Blessings:

Ron

Ron Bercaw
http://www.breakthroughhorizons.com/

The Roadmap to Organizational Excellence - Part 1 of 7

Lean Nation:

As we discussed in our last blog,  I was going to blog a seven part series on how to create a world class organization. Here are the steps to creating a culture of continuous improvement:

1. Find a Sensei - You need a coach to make the journey.
2. Select your Organizational Wide outcome measures - these are known as the True North measures.
3. Prioritize and Map your Value Streams - select the areas with the most leverage.
4. Deliver Improvement - Use A-3 thinking and lean principles to make the changes identified in your value stream mapping sessions.
5. Sustain your improvements using visual management and leadership standard work.-
results are only realized if the gains are held.
6. Support your improvements with ongoing training and leadership development.
7. Spread your improvements to other parts of your organization.

Let's expand on step 1, "Find a Sensei"   A Sensei is someone who has travelled the lean road you are heading down.  This person should be skilled in the principles, techniques, and applications of improvement that transcend any industry.   This person should be equally skilled in the team based improvement and sustaining skills, as well as the management behaviors necessary to lead a cultural change.  There are a select few people out there that have the requisite skill sets.

Questions to ask the field to narrow your options would be the following:

• Have you lead or participated on over 100 lean improvement teams?
• Have you lead a transformation of an organization as a member of the Executive Team?
• Have you lead organizations through improvement in more than five different industries?
• Do you have a complete business system with training materials, forms, and checklists to transform an organization in the areas of new product/service introduction,  administration, supply chain, maintenance, quality, management development, and product/process flow?

If you can get positive answers to all five of these questions,  you are likley zeroing in on a Sensei.

Why hire a Sensei?  I can think of several reasons to hire a Sensei:

1. A sensei can communicate at all levels of the organization without political ramifications.
2. A sensei can be totally honest on your strengths and weaknesses with credibility.
3. A sensei will provide technical expertise to the teams while providing change management and sustainability coaching to leadership and management.
4. A sensei will bring ideas and thoughts from multiple industries to your organization to get you thinking about woarld class and not industry best in class.
5. A sensei will have you benchmarking about rates of improvement, not industry scores.
6. A sensei will be harder on you than you will be about your organization
7. A sensei will know when to bring in advance tools for problem solving versus keeping the solution approaches simple.
8. A Sensei will know the best pace to spread and transform your organization.
9. Your learning curve will be shortened and your risk will be minimized.

Can you think of other reasons a Sensei will create value?  Next blog will cover step 2 in the road map to excellence.

Lean Blessings:

Ron

Ron Bercaw
http://www.breakthroughhorizons.com/

The Roadmap to Organizational Excellence - Introduction

Lean Nation;

Any of you who have worked with me in the past know that I constantly preach the same formula for success.  There are some steps to organizational wide improvement that are proven to be successful.  Also there are no shortcuts.  Yet I find that many organizations want to hit the "easy" button to improvement.  Improvement is earned one team at a time.   This is why successful organizations take two decades to get to world class. 

As a reminder,  here are the steps to creating a culture of continuous improvement.

1. Find a Sensei -  You need a coach to make the journey.
2. Select your Organizational Wide outcome measures - these are known as the True North measures.
3. Prioritize and Map your Value Streams - select the areas with the most leverage.
4. Deliver Improvement -  Use A-3 thinking and lean principles to make the changes identified in your value stream mapping sessions.
5. Sustain your improvements using visual management and leadership standard work.- 
   results are only realized if the gains are held.
6. Support your improvements with ongoing training and leadership development.
7. Spread your improvements to other parts of your organization.

In the next seven blogs I will be highlighting each of the seven steps in more detail.

What I want to leave you with today is that if you skip steps,  the odds that you will still have a lean management system in three years decreased by greater than 70%.  The odds of you becoming world class in 20 years decreases by 97%.

Lean Blessings;

Ron

Ron Bercaw
http://www.breakthroughhorizons.com/