One of the problems that we face in business is impatience. We want quick results when we start a new initiative. We want new processes to pay off immediately. As a result, leaders often choose less effective options that provide some return on investment quickly rather than more effective ones that take a while to develop into greater fruition. In large part, this is a function of the pressures of the stock market. Quarterly earnings reports force leaders to think in three month chunks of time.
There is also a trend for people to expect immediate results with very little work or commitment of time. There are a glut of reasons. Reality shows have convinced people that you can turn around a business in just a few days. Social media highlights all the big wins people have, while failing to address the work or risk or investment it took to get those wins. To top it off, there is a strong niche of self-help books that has focused on tricks, gimmicks, and quick changes that they promise can deliver monumental returns.
This is a serious challenge to continuous improvement initiatives. It is true that some of the tools can have a quick payoff in specific situations. Applying the 5 Whys, for example, can eliminate a nagging problem in short order.
But many of the more powerful cultural changes—the ones that really impact a company—can take years to put in place. This principle, Think Long Term, keeps the leadership team focused on the potential greatness of the company rather than harvesting small, quick returns on improvement resources.
Do a quick self-assessment of your company’s goal-setting history. Look for indications that short term decisions trump long term planning. You can see this when R&D is cut to hit quarterly earnings targets, or if you have had a series of initiatives that were abandoned within a year of starting. Also look at the turnover rate of key leaders. The key is to determine how ingrained short term thinking is in your company.
Estimated Time for Section: Ongoing
Difficulty: High. This is difficult mindset to change, especially if the company is large and has stockholder pressures. Any perception of failure can undercut senior management and jeopardize continuity of leadership.
Risk: High. Short term thinking is a large contributor to the high percentage of failures in Lean initiatives. It takes significant time to lay the foundation for continuous improvement. There can be a large outlay of effort and resources (particularly time) before there will be a sustained impact on the bottom line.
Spend any time around Lean, or any other continuous improvement methodology, for that matter, and you will undoubtedly hear the term “Respect for People.” It is a simple concept that should act as a moral compass in how people do business.
The fact is that a company does not have to be respectful of its employees and customers in order to be successful. Some can treat their workers and clients with disdain and a lack of respect and still remain profitable…for a while, at least. In the end, it turns out that being respectful is not only the right thing to do, but is also good for business.
Search the internet, and you will find a plethora of studies that show that last statement to be true. Companies that are on Fortune Magazine’s “Best Places to Work” list outperform other companies. A 2008 by study Alex Edmans of Wharton showed the BPTW companies averaged a 13.9% return vs. 6.1% for the broader market from 1998 to 2006. Sears conducted a study which went even further and linked employee satisfaction to customer satisfaction, and ultimately a tangible increase in profitability.
The short of it is that if you treat people right, the bottom line rewards you. Plus, most people will sleep better at night knowing that they improved the lives of the people they work with rather than simply harvest production from them.
Unfortunately, though, the actual application of the term “respect for people” can be less than perfect. Leaders can feel pressure that makes them act in ways that put short term gains first. Or, they might simply not know a better way to do business.
But fortunately, a continuous improvement system has proven time and time again to be a great way to build a culture that values the contributions of the members of its team and strengthens the organization as a result.
NOTE: This document draws extensively from our Respect for People term.
Before diving into this principle, make sure you have begun integrating the preceding principles from this volume into your culture.
Estimated Time for Section: Ongoing
Incorporating this principle into your culture is going to be an ongoing battle. It is hard to measure and easy to backslide. You should shoot for some immediate progress on the simpler aspects (i.e. communication, setting clear standards with daily management, etc.), but you’ll be adding more ways to show respect throughout the first 3-4 phases of your journey (through ‘Foundation Building’).
This principle is particularly hard because respect is such a vague term. It is also one that generates huge emotions. People who feel disrespected get activated quickly, as do those who are accused of being disrespectful. Early progress, though, in less controversial areas will make later advances easier.
Getting respect wrong derails the teamwork that is critical for many of the later pillars of a business management system. Be careful about underestimating this principle.
Drum-Buffer-Rope is a production theory derived by Dr. Eli Goldratt in his book, The Goal. In it, he advocates production according to the pace set by a single machine (the drum) with linked production (the rope). He also promotes keeping a buffer in front of the machine that acts as the constraint on the system.
Setup is the process of preparing a machine to run a product. Some of the steps of a setup must be done while a machine is shut off. That is known as internal setup.
External setup is when the steps to get the machine ready to run a different part can be taken while a machine is running. The terminology comes from the fact that these activities are done outside of or away from the machine, or external to the process.
The 100-mile rule for meetings/projects is a mental tool for deciding whether to interrupt a person for a problem. In a nutshell, if the issue is big enough that you would call the person back to handle it if the meeting was a hundred miles away, it is OK to interrupt. If not, wait for a break or handle the problem on your own.
The word “Can’t” is not compatible with continuous improvement. It is surprising how many things that “can’t” be done get accomplished by people and teams when they actually try. “Can’t” becomes an excuse for not attempting. It also is frequently treated as gospel when people say something “can’t be done.” There is an old expression about “Those who say something can’t be done should get out of the way of those who are doing it.”
Henry Ford reportedly also had something to say about the topic. He is attributed as saying something to the effect of: ‘If you think you can, or you think you can’t, you’re right.’
This person may be facilitating as a secondary role or as their primary function. They may also be an employee of the company that they are coaching, or they may be an individual hired in a temporary consulting role.
Metrics come in two basic flavors. One option is to measure the results of a process. This confirms that you did the right things and that you are on track. The problem, though, is that results metrics are lagging indicators. The activities that led to these results happened in the past, sometimes significantly long ago.
Another option is to track process metrics. Process metrics track the activities that lead to successful results metrics. These measurements tend to be taken closer to real-time, and they tend to be linked to decisions and actions. In other words, if you identify a problem with a process metric, you can do something to correct the issue immediately rather than having to wait until results are tallied down the road.
Machines are essential to production environments. But not all machines are created equal. The impact of breakdowns varies widely. Because resources are limited, it is important to have a strategy to manage machines according to how critical they are to the operation.
An ‘ABC Machines’ strategy is one way to organize machines to allocate resources. While the exact name used to describe this strategy may vary by company, the purpose is the same. Companies assess their equipment and make contingency plans based on risk, the difficulty of repair, and a host of other factors. The category (A, B, or C) determines how detailed the contingency needs to be.
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