Creating information-rich environmentsCreating businesses of engaged business people Connecting people and their work to goals Aligning measurement, rewards and recognition with business strategy

Helping CEOs Add Value

The CEO of a Fortune 200 company had regular town hall meetings with his employees for years. When we conducted focus groups with employees to learn what they thought of the meetings, they liked what the CEO said during the town halls but when the meetings were over employees didn’t know what they were supposed to do differently as a result of the CEO’s message.

“We want to help but don’t know what to do differently,” one employee said.

Were the CEO’s town hall meetings adding value if nothing changed as a result of them? Not if you subscribe to the lean definition of value–any action or process that a customer would be willing to pay for.

I know many people who would say the CEO’s visibility and willingness to communicate information about high level strategy added some measure of indirect value. To some extent I agree. On the surface, he didn’t do any harm.

But to a larger extent I disagree. Resources were spent on the town hall meetings. Employee downtime added to the cost. But work didn’t change. And because work didn’t change, results didn’t change.

So the effort was a pure investment with no short or anticipated long term gain.  Try as you might to make a thoughtful gesture equivalent to adding value, it isn’t. Is it safe to say that the CEO town halls were actually draining value from the organization?  If the CEO is getting paid to increase shareholder value, did the town hall meetings reflect an activity that was counter to the CEO’s goals?

I believe so.

So, should the CEO stop conducting town hall meetings. No. The company should supplement the town hall meetings with other activities that interpret the CEO’s message to the people in the organization. Business unit and department leaders need to interpret the CEO’s message. They need to explain:

  •  How company goals relate to our business unit of department goals.
  • Here’s what we need to do to drive corporate success.
  • And then relate this to the various people in the organization.

The sales person in the field, the brand manager at headquarters, the R&D people in the lab, the inventory manager, the machine operator, and the folks in shipping and receiving all need the information custom tailored for each area.

Leaders at all levels then need to make sure that everything they say and do are consistent with the CEO’s message. They need to make sure people have the resources they need to get the job done. Then leaders need to get out of the way.

The CEO’s town hall message adds value only when it gets translated and communicated throughout the organization.

Crazy Busy & Knowing When to Say No

“I’m crazy busy!”

That’s what we all say we are these days. But when is “crazy busy” a waste of time?

Well, how often do you manage your time according to the value it adds to your business?

An organization’s role is to create value for its customers and continuously improve the process, so more value can be added.

This is the concept of lean. Leading an organization using lean principles and a lean mindset is becoming a big deal everywhere.

If you’re not pruning waste out of your core process—like converting raw materials to something customers’ value—you’re likely to be at a competitive disadvantage.  You can bet your competitors down the street are pruning madly.

How can you add more measurable value today than you did yesterday? How can you add more value tomorrow than you will today?

Check your calendar. Is what you’re doing every hour today adding value to your core process, or is some of it draining value from that process?

Will you say “no” to a meeting that you know will not add value to the organization’s core process?

When you’re in the throes of a petty, political conversation, are you willing to stop and ask your fellow “politicians” whether the discussion you’re having right now is something the customer would be willing to pay for?

Will you give up some sense of control by delegating a lower value-adding task to someone who makes less money than you do?

Will you prune your core process today? The other guys might be doing it right now.

How To Start Lean

“What’s the first thing I should do?”

I hear this question frequently—most recently by someone in Turkey—about transforming an organization into a lean one.  It’s always worth learning from those who’ve gone before you, especially if it can avoid costly missteps.

For those new to lean and its brother, six sigma, lean is a concept that focuses on maximizing value by eliminating waste. Six sigma is a measurement of variation. It’s used to improve quality. Successful lean transformations are characterized by the performance improvements they create and their staying power. That is, lean becomes a way of doing business, not another program of the day.

There are two components of lean. One is the technical, or hard side of business; the formulas, measures and processes. The other is the cultural, or the soft side that includes issues related to leadership, communication and rewards.

The starting point?  Without equivocation, I advocate that the cultural side of the change effort must be addressed first.

In every situation where I’ve been asked to help “fix” a lean transformation gone bad, the problem had been created by addressing the hard side first–changing work processes or imposing new performance measures that no one understood.  Tools, techniques and work processes were implemented on top of a value system that was incompatible with lean.

Starting with leadership, communication and involvement issues takes time. But sometimes we have to go slow to go fast. Getting the cultural issues down right will cause the lean effort to skyrocket, once you marry up the technical and cultural sides and begin the integrated implementation.

Lean Gone Too Hard

Many businesses have adopted aspects of what’s commonly referred to as lean. Lean is an overarching way of creating and sustaining an organization that’s waste free. Waste is loosely defined as any process or activity–like overproduction, scrap, rework, excessive movement, inventory–that a customer isn’t willing to pay for.  In some businesses, these efforts are creating growth through higher performance from people and processes.

But other businesses have simply gone through the motions and have little to show for their efforts other than a bunch of disgruntled employees. In most cases they fail because they  adopt tools, techniques, measures and mechanics associated with lean, but  don’t recognize that lean is a mindset  that must be built into the culture. These organizations view lean as no more than moving machines around or changing workflow arrangements without much input from employees.

A lean culture values–and is obsessed by–customers, employees and continuous improvement.

In the lean world, there’s a workplace organizational methodology called 5S (pronounced five ess). The name comes from five Japanese words that loosely translate to Sorting, Straightening, Shining, Standardizing and Sustaining. If you 5S’ed your garage this morning, it would be immaculate. There’s a place for everything and everything should be in it’s place, as the ditty goes.

But like most things in business, it’s easy to go anal nuts with lean. So nuts that some companies have used gobs of white tape to outline where, for instance, standard desk items should go on a desk–your desk. I was visiting a company recently and desks had taped outlines reserved for the stapler, the desk owners’ laptops, yet another for the paperclips, calculators and drink coasters. Neatly typed at the base of each rectangle were the words, STAPLER, LAPTOP, PAPERCLIPS, CALCULATOR AND COASTER, BLACKBERRY.

Now some lean acolytes would respond by saying, “Of course, that’s the way it’s supposed to be to make sure everything has its place and is in its place.”

To these acolytes I’d suggest they take their trolls of tape where they will do some good and not offend my sensitivities to pure, unadulterated tackiness and most employees’ sensitivities to intrusions into their personal expression.

Forcing this kind of rigid structure takes away the passion and fun out of a team’s quest for greatness. I visit a lot of offices and employee cubicles and I get a real kick out of seeing family pictures, little kid’s school drawings and personalized disorder that communicates about the owner of the cubicle or the office.  There’s a line between a quest for professional order and an act that snuffs out the very personality that was a key ingredient to your decision to hire Mary, the accountant.

What should really matter is our ability to meet customer requirements. For example, hospital patients (customers) might benefit if the hospital didn’t permit nurses to put medications wherever they want –each nurse having a different spot or putting the medicines in a different spot each time. The lack of standardization might lead to errors. In this case, the need for standardization probably outweighs the need for individual expression.

But in cases like determining how to decorate an office or deciding where you will place your stapler, there’s probably no customer benefit to having standardized decorations or taped off areas for your stapler, lamp or whatever. If anything, it dehumanizes the workplace. It takes away the color and passion and personal expression. The following video satirizes the use of lean as a mindless way to control.

Congratulations to ITT for Winning Platinum

PR News announced that our client, ITT Corporation, won the 2010 Platinum Award for Internal Communication. The award recognizes the work we did in the company’s Texas Turbine Operation in Lubbock, Texas.  Courtney Reynolds led the effort for ITT.

The project was focused on integrating the so-called hard and soft sides of lean to improve operating and financial performance. During the effort, sales increased 30 percent, productivity went up 10 percent, quality went up 40 percent and on time delivery increased from 70-95 percent .

This work now is serving as a company model for other facilities undergoing a lean transformation.

To learn more, watch the video on the our home page.

Why Can’t Politicians Learn From High Performance Businesses?

As I read today’s CNN headline, “Obama Signs Healthcare ‘Fixes’ Bill,” I’m struck at just how backward politicians of every stripe are compared to what’s becoming standard fare in the high performance business world.

In the high performance world, something that needs to be fixed after you’ve made it is called a defect. Defects represent a form of waste. They represent waste because defects have to be either scrapped or re-worked. Scrapping something represents money down the drain. Re-working it adds unnecessary costs. 

In the high performance world, when you produce defects you understand that as long as the systems remain the same you’ll reliably keep building defects. So in order to stop building defects, high performance organizations change their systems and processes so they won’t produce more defects.  They try to get the right results the first time. 

But in the political world, when you produce defects you first try to find someone to blame for creating the defects. It’s especially convenient to blame the other party.  That’s in part because politicians are often less concerned with the results as they are with the process–especially the process of getting re-elected. (That’s why Kennedy and Deal in their book Corporate Cultures referred to bureaucracy as a process culture out of control.)  “Just work the process; we’ll fix the problems we created later,” they say. 

That’s foreign thinking to high performance organizations who understand that customers won’t pay for those fixes and that everyone needs to accept personal accountability for continuous improvement.  

It’s hard to think like this unless you have a high level of emotional intelligence and maturity. Given the spectacle we’ve seen in Washington lately, this may be the primary reason politicians can’t seem to learn from high performers.