Book Talk: Culture is the Key to a Best Seller

We only publish books that we believe will be successful, but we can never predict which will turn into best sellers.

One book that has proven to be extremely successful is Creating a Lean Culture: Tools to Sustain Lean Conversions by David Mann. Since its initial publication nearly four years ago, this book has consistently been one of our top performers.

I’ve chosen to write about it this week because I believe a best seller may provide some insights into what concerns people have in the marketplace.

Creating a Lean Culture was one of the first books to address, in a very practical way, the most difficult part of a lean transformation: culture change. Mann moves beyond models and theories of lean management to show how to implement the daily practices that are the key to implementing and sustaining a lean transformation. His book includes many case examples, figures and photographs.

Some of the points he addresses include leader standard work, visual controls, daily accountability processes, maintaining a process focus, managing key HR issues, and much more.

The book won the Shingo Prize for Excellence in Manufacturing Research in 2006.

Lean is all about creating value for customers, which means understanding what customers define as value. David Mann clearly understood that when he wrote the book.

What lean books have you found to be most valuable? Is there a subject that you’d like addressed in a book, but haven’t seen so far?

Do you have a question or comment about a book(s) that you would like addressed in Book Talk? Email me directly at Ralph.bernstein@taylorandfrancis.com.


A New Journal on Enterprise Transformation

An interesting announcement has come out of the Lean Advancement Initiative, a well-established, MIT-based nonprofit focused on lean enterprise architecting and transformation.

LAI said in a recent newsletter that it is collaborating in the launch of The Journal of Enterprise Transformation, scheduled to begin publication in 2010. The Journal will “disseminate the best of international enterprise transformation research and findings,” according to the announcement.

No details have been announced yet on whether this will consist just of LAI content, or what type of content will be published. LAI also did not say with whom it is collaborating.

But it does sound intriguing. Stay tuned.


The Core of Apple Includes Some Lean Thinking

I wrote about Apple not quite a year ago, referring to it as a successful “anti-lean” company. My characterization was based on an article in Wired magazine that described how Apple employees often operate in secrecy, fear and paranoia, with Steve Jobs a notorious micro-manager – very much the antithesis of the lean concept of respect for people.

Now a Forbes article offers some additional insights into Apple. And it seems that, while everything in the Wired article may be true, there is also some lean thinking going on at Apple that contributes to the company’s success.

Specifically, Jobs instills in Apple workers the importance of focusing on providing value for the customer, and eliminating waste from processes.

Apple is known for producing hard-nosed industrial designers, interface gurus and entrepreneurs who thrive on turning raw technology into a slick mass-market sensation--people a lot like Steve Perlman, who left Apple in 1990. Perlman, now chief executive of tech incubator Rearden LLC, developed much of the multimedia technology used in the color Macintosh.

"I can tell you I can't look at a font on a screen or a piece of paper without going into a very critical mode," Perlman says. "Too many engineers don't think about how to turn the bundles of technology they create into a usable, intuitive gadget that they can take home and use. I'm just hypersensitive to it. It's part of my DNA..."

FanSnap Chief Executive Mike Janes--who ran Apple's online store through 2003-- remembers how Jobs would refer to certain situations as a "chain of pain." Whether it involved reducing the number of steps needed to make a home movie or buy a computer from one of Apple's stores, Jobs looked for ways to distill a process down to its essence.

As far as I know, Apple doesn’t refer to its focus as lean. And Jobs does have some unconventional ways of thinking.

Apple apparently lives its "Think Different" slogan. "At some other companies it would be a black belt process with stop gates and check-ins and lots of measuring and concept validation testing with users," says Jennifer Kilian, who managed a team that created Apple instructional products and is now creative director at Frog Design.

Not at Apple. In part, that's thanks to an ineffable style that, in some ways, started with Jobs. When the team working on the Mac asked Jobs in 1983 for a standard they should shoot for, Jobs' answer was simple: the Beatles. And not just the Beatles--the early Beatles. "That's a big leap," says design guru Clement Mok, who worked on the original Macintosh interface.

Overall, Apple is clearly not a lean company. But Apple does seem to understand one fundamental lean concept: It’s all about the customer.


Transforming an Industry: Achieving Healthcare Reform

With discussion growing over how to improve healthcare in the United States, a recent article in The New York Times offers some worthwhile – but incomplete – ideas.

Two main causes of the system’s ills are century-old business models, for the general hospital and the physician’s practice, both of which are based on treating illness, not promoting wellness. Hospitals and doctors are paid by insurers and the government for the health care equivalent of piecework: Hospitals profit from full beds, and doctors profit from repeat visits. There is no financial incentive to keep patients healthy.

The reporter, Janet Rae-Dupree, then quotes author and Harvard business professor Clayton Christensen on what needs to be done.

Mr. Christensen and his co-authors argue that by putting the financial interests of hospitals and doctors at the center, the current system gives routine illnesses with proven therapies the same intensive and costly specialized care that more complicated cases require.

“Health care hasn’t become affordable,” he said in an interview, “because it hasn’t yet gone through disruptive decentralization.”

It’s coming, though. Some health care suppliers have set up fixed-fee integrated systems, and accept monthly payments from members in exchange for a promise of cradle-to-grave health care. Each usually also charges a small co-payment for treatment. Routine cases are handled through lower-cost facilities, leaving more complicated cases to higher-cost hospitals and specialists.

I have no argument with these ideas. Financial incentives are extremely powerful, and the points made in the article are undoubtedly true.

In addition, the idea of handling different types of cases in different types of facilities has a parallel in the lean manufacturing concept of making different families of products in different types of manufacturing cells. However, I take issue with calling the different facilities “lower-cost” and “higher-cost.” It should be about the type of care provided, not the level of cost.

And that reflects what is missing from this article: mention of the need to focus on improving healthcare processes. Yes, the financial incentives should be changed. But the system must also be changed to focus on how to best provide effective treatment (read: value) to the patient. We are publishing an increasing number of books focusing on how to do that.

Whether you agree with him or not, Christensen’s ideas are the kind of thinking that should be central to the debate over healthcare reform. But so should the concept of applying lean thinking to healthcare.


Book Talk: Something New From George Koenigsaecker

If you’ve been around the lean community for a while, you’ve probably heard of George Koenigsaecker, one its more prominent members.

He has an impressive track record of lean accomplishments at both The Danaher Corporation and The Hon Company, with Hon named to Industry Week’s list of the “World’s 100 Best Managed Firms.”

We are pleased to be publishing a new book George has written. In Leading the Lean Enterprise Transformation, he presents the successful strategies and case histories of several key American leaders who have been instrumental in bringing lean to the forefront of various industries.

More to the point, the book is written to help executives determine right from wrong in a lean transformation.

With George’s record and reputation, I’m guessing this will be one of our more popular books. It is scheduled for publication in May, though orders can be placed now.

Do you have a question or comment about a book(s) that you would like addressed in Book Talk? Email me directly at Ralph.bernstein@taylorandfrancis.com.


Link Update: Six Sigma and Process Excellence IQ

I’ve added a new link to my list of Other Interesting Sites, to the website of the folks at Six Sigma IQ.

Their goal is to be an online media and social networking portal for the Six Sigma/process excellence community.

They have a well-designed website. SixSigmaIQ is a sister organization to conference company IQPC.

Be sure to check them out.


How Toyota Copes With a Recession

Even Toyota is not immune from a worldwide recession. The company is losing money and cutting production. It is reacting in a variety of ways.

But not with layoffs.

Yes, Toyota would like to be paying fewer workers, and for the first time is offering buyouts to American workers. But the buyouts are voluntary, and according to an article in Forbes, Toyota admits it doesn’t expect many people to accept.

“If no one decides to leave, that is fine by Toyota,” said Toyota spokesman Paul Nolasco, who added that Toyota has no target for how many employees will exit.

That doesn’t mean Toyota workers are feeling no pain. The company is cutting hours and bonuses, so lots of its employees will be making less money.

But they still have jobs.

It all goes back to the lean principle of respect for people, and the recognition that trained, experienced workers are an asset to be valued for their minds, not just their ability to assemble cars.

I hope other companies can learn from this example.


Lean Jobs: Now, It’s About Cost Cutting

With the recession, there are more talented people competing for lean jobs. And the companies that are hiring want those people to improve their bottom line quickly.

That is what I gained from a recent conversation with Ted Stiles, director of executive search for Stiles Associates, a search firm specializing in filling lean jobs.

The conventional wisdom is that lean skills should be more in demand in tough times, though in the current severe downturn, even a firm like Stiles is not completely immune. “We’re off a little, but certainly not nearly as bad as a lot of other search firms that don’t specialize in these types of lean experts,” Ted said.

The types of jobs his company helps fill have not changed, he added, and include experts to lead entire programs or facilitate change.

However, there is a shift in what the hiring companies want these people to do.

“What these folks are focusing on now is a little different,” he notes. “There is not a whole lot of talk about culture change. The shift has definitely turned to focus on cost cutting and cash generation. The players and levels are the same; what they’re working on is different. Inventory reduction as well, and they are also focusing on process improvement around some of the business process areas – payables and receivables, shortening that cycle – anything that hits the bottom line.”

The best lean companies understand that tough times are a great opportunity to use lean experts to improve operations. However, some of the many companies that are laying off employees are not sparing their lean people, Ted notes.

“In general, if you look at the lean universe, at least a quarter of the folks are cutting lean folks outright. This is the paradox,” he comments. “I don’t think we’ve seen a lean talent shift like this in the history of lean’s presence in the U.S. There are a lot of factors. Automotive is in its own world of hurt; it just so happens there tends be lot of lean depth (in automotive). We’re seeing a lot of organizations really in a desperate cost-cutting mode. If you’re not directly related to getting product out the door, you can be vulnerable.

“It’s moments like this that really separate the true believers from lip-service lean. That’s clearly happening right now.”

But one company’s desperation can be another company’s opportunity.

Ted observes, “There are a surprising number of companies that are viewing this as a rare opportunity to go after talent that has heretofore been unavailable… Some very good lean folks are hitting the markets right now that would typically not be available.”

How should a company cope with tough times? “If I were in an organization and had anything to do with an operations excellence program, this is clearly the time to make sure you have demonstrable results and a hard dollar ROI that folks in the finance dept can understand,” according to Ted. “Without that, over the next 12 months, you’re just going to run into a lot of pressure.”

And for candidates, he says, “I think with everybody focused on cost cutting, those candidates that can articulate and demonstrate hard ROI results will rise to the top or find more interest. There are people in the lean community that really, deeply understand how to manage transformational culture change, and that story isn’t selling as well as cost results.

“I don’t want to suggest that the market is responding to hatchet men. There is going to be some of that. But within what I would call the sensible lean universe, there is going to be a shift to programs and projects that work around cash preservation and cash generation, and generating cash from inventory.”


Book Talk: Metrics-Based Process Mapping

We sell a few products that are not books. For example, we offer several videos on various aspects of lean.

One of our more unusual (for us) products is a software program we began selling last year. (I hope you’ll forgive me for discussing it in our “Book Talk” feature, even though it is not a book.)

The product, on CD-ROM, is Metrics-Based Process Mapping. Developed by Karen Martin and Mike Osterling (who are also the authors of The Kaizen Event Planner), this is an Excel-based program to help you map processes in office, service and technical environments (although it can be used to improve any cross-functional process).

It is more than just a tool to map a process. It combines mapping functionality with the time and quality metrics used in value stream mapping. For example, it features automated calculation of key performance metrics.

It enables you to electronically archive and distribute current- and future-state MBPMs created with paper and Post-it® notes.

Our website features a PowerPoint presentation showing the tool in action.

The program is based on Microsoft Excel 2003. It will not work with earlier versions of Excel, nor on Macintosh computers.

Do you have a question or comment about a book(s) that you would like addressed in Book Talk? Email me directly at Ralph.bernstein@taylorandfrancis.com.


Wisconsin Hospital Targets Improving Patient Flow

An announcement about a hospital working with a consulting firm to improve operations caught my eye recently. Such announcements are becoming more common, which is generally a good thing. What I liked about this one is that the primary focus of the consulting engagement seems to be to improve patient flow.

The Mount Sinai Hospital in Waukesha, WI, in a multi-year agreement, will be working with Lean Six Sigma specialists from GE Healthcare. Software is also part of the deal; the hospital will be using GE’s AgileTrac automated workflow and visualization system. The announcement I saw didn’t say how much the hospital will be paying GE.

Together, Mount Sinai and GE will gather real-time data on clinical workflow patterns throughout the 1,171-bed, 2.7 million square foot tertiary-care hospital to highlight process bottlenecks and showcase areas of improvement. The goal is to streamline patient flow, improve operational efficiency, and decrease patients length of stay by decreasing wait times and freeing up capacity that has been, until this project, untapped…

As the project develops, GE will collaborate with Mount Sinai to characterize and simulate hospital-wide clinical workflow using GE's proprietary simulation tools and Mount Sinai's own real time data. The simulation model will help to identify operational issues hours or even days before they occur, enabling the hospital to mitigate bottlenecks and resource constraints before they impact patients.

The people involved in this project seem to understand that improving flow can make just about everything else work better. I hope it works.


How Should Lean Executives be Compensated?

With the current outrage over executive compensation (and the debate over whether there should be limits on compensation for companies receiving federal funds), a recent blog post got me thinking about how compensation should be determined.

In a guest post on Mark Graban’s Lean Blog, lean headhunter Adam Zak discusses rewards vs. performance. Adam, whom I know and have interviewed for this blog, points out that a lot of the poorly-performing companies now receiving government handouts have demonstrated little if any commitment to lean principles and practices, such as leadership, value-added activity, accountability, employee engagement and respect for people.

Adam offers a suggestion, which I suspect is not entirely tongue-in-cheek:

In the spirit of LEAN I offer a simple suggestion which can be implemented right now: Every company receiving assistance in the form of our tax dollars MUST send its Chairman, CEO, CFO and all business unit (division, subsidiary, etc.) leaders to an intensive (say 3-5 days, perhaps 10 for the CFO) hands-on LEAN EXECUTIVE training.

I think that’s a great idea, though one unlikely to be implemented.

However, I’d like to focus on the broader issue: At a company pursuing lean, absent government mandates, how should high-level executive compensation be structured? I’m all for rewarding performance, but what metrics should be used? Profit growth? Improvement in stock price? Productivity?

I’d like to hear from those of you who have experience in this area. How have those of you at lean companies structured pay for your top executives? What worked, and what didn’t? What is fair and what isn’t? Please share your experiences below.


New Orleans Hospital Planning Lacks Coordination

Building design is important, especially in hospitals. The right design facilitates flow, improves communication and eliminates considerable wasted motion. And it is at least, if not more, important when several buildings are being constructed rather than just one.

Unfortunately, it seems that the people designing a new medical complex in New Orleans do not understand this concept.

The U.S. Department of Veterans Affairs and Louisiana State University are jointly planning a new teaching facility, after Hurricane Katrina led to the closing of LSU's Charity Hospital and the VA Medical Center downtown. The two organizations selected adjoining parcels of land with the intention of constructing two immediately adjacent hospitals.

But according to The Times-Picayune newspaper, the various design options recently unveiled by the organizations would result in “distinctly independent hospitals that appear to lack much of the ‘synergy’ the participating institutions once touted.”

The article, by Bill Barrow, also says the organizations “drifted apart in their planning processes.”

"I haven't heard any mention of synergy," said Elizabeth Merritt, an attorney for the National Trust for Historic Preservation, after seeing the plans for the 70 acres bound by Tulane Avenue, Claiborne Avenue, Canal Street and South Rocheblave Street. "It seems like there's not the level of coordination considering that was such as strong consideration in selecting this site."

Together, the two hospitals would total about 600 beds. The design options from LSU, which would provide two-thirds of the capacity, call for up to five inpatient towers, each with six stories.

There appear to be several issues here. The most obvious is that what should be a joint planning effort disintegrated into two independent efforts. This made impossible to do any value stream mapping, for example, to see whether the two projects have overlaps or disconnects that could be addressed.

I also wonder about having so many separate inpatient towers. I know nothing about hospital design, but I can’t help questioning whether the various departments of a hospital operate so independently that they should be physically separated from each other. I worry that this kind of design has the potential to create silos (almost literally) that will cause problems in communication and interaction.

A period for comments on the plans goes through the first week in February, with more public discussions at some point in the future.

Does anyone care to make a comment?


Book Talk: JIT Implementation Manual

Every now and then we publish a book that is not new, but is a reissue of a classic work. (One example occurred in 2002 when we published a commemorative edition of Henry Ford’s Today and Tomorrow.)

We are about to publish another such work: the six-volume JIT Implementation Manual. We believe the time may be right for a reissue of this comprehensive manual, known as the JIT Bible in Japan. And we are making it available in a more versatile and accessible paperback format.

Authored by consultant Hiroyuki Hirano, the manual is a detailed guide for setting up a just-in-time manufacturing program from start to finish. It includes more than 200 illustrations, checklists, charts, diagrams, and sample JIT management forms.

The first volume is a comprehensive introduction to JIT production. The next four cover Waste and the 5S’s; Flow Manufacturing; Leveling, and Standardized Operations. The final volume contains forms and charts.

In a recession (or any other time), having a short cycle time with low inventory can give you an edge over the competition. If you’re not too far along in your lean journey, this kind of detailed manual may be just what you need.

By the way, if you know of a book published in years past that you would like to see reissued – or if you’re just curious about a book you can’t find anymore – let us know.

Do you have a question or comment about a book(s) that you would like addressed in Book Talk? Email me directly at Ralph.bernstein@taylorandfrancis.com.


Looking for Lean in Unlikely Places

I recently came across an intriguing and unexpected reference to lean in an otherwise unrelated article about job hunting.

The article is in the online magazine Suite101, a site with which I was not familiar.

Titled “Tips on Preparing the Perfect Job Application,” the article by Patricia Faulhaber is a checklist of things to do when filling out an application. She makes the point that in a competitive job market, applications should be filled out perfectly.

When preparing for the application form, Faulhaber says, applicants should “develop statements in terms of benefits to the company.”

The example she offers is “My Lean Manufacturing successes would contribute to ABCD Company’s efforts to maintain Lean practices while saving hundreds of thousands of dollars in production waste. My past Lean projects have saved my previous company over $200,000”.

I don’t know how (or how much) Faulhaber knows about lean. But I find it interesting that a lean reference would appear in such a non-lean publication. Perhaps lean is becoming more widely known than I thought. (By the way, Suite101 claims to have more than 150,000 articles on its site. I did a quick search of them for lean manufacturing and found only one other article that talked about lean principles.)

Have you come across any lean references or examples in unexpected settings, outside of communities such as manufacturing where the topic is well-known? Share your experiences below.


Thoughts from Forbes on How to Cope with the Recession

A recession may require some shifts in business strategies. And those shifts will be more successful if they include lean approaches.

That is what I come away with from a recent article on the Forbes website titled “Timely Tips for Recession-Racked Entrepreneurs.”

As with most articles from Forbes, the suggestions are timely and practical. Most have little if anything to do with lean. They address questions like “How can I get my customers to pay me?” and “How can I plan when I can’t project?”

Lean is not mentioned in the article. But some of the tips include advice that reflects lean thinking.

For example, one question addressed is “Should I go after lower-margin business just to keep the doors open?” Part of the answer is “Yes, but do it wisely. First step: Align operating expenses to the new product mix.”

That is advice that goes in the right direction, though it would be better expressed as “Align processes to the new product mix.” Do that, and the expenses will take care of themselves. Lean advocates have long been familiar with the fact that different product families may require different sets of processes.

Another bit of advice I like goes to the question “How do I negotiate with my vendors?” Forbes advises, “Never forget that your pain is your suppliers' pain, too. Seek out a key executive, and don't be ashamed to wave the white flag. ‘Too many small businesses think they have no negotiating power,’ says Nolen. ‘Communicate and treat them like a partner to find some common ground.’”

That is directly in line with the lean principle of respect for people, and the idea that supply chain partners should be treated as, well, partners, rather than adversaries.

The article is paired with a separate piece, “Creative Cost-Cutting Tactics for Small Biz.” One bit of advice in that article also speaks to respect for people is a suggestion to encourage entrepreneurship.

Consider turning your line workers into entrepreneurs. Say your firm writes software. Instead of lowering overhead by chopping heads, let each of the developers take charge of their own product while you take a stake in their efforts. In lieu of a salary, offer them partial support (in terms of marketing, product testing and health benefits) to build out their slice of the business and, with any luck, substantially increase their wealth. If all goes well, everyone wins.

That advice reflects the concept that employees are not just cogs in a machine, but thinking, creative people who can contribute to the success of a business – a concept that has always been part of lean.

What are your strategies for dealing with the recession?


Performance Data is Key to Convincing Skeptical Doctors

There was a lot of coverage recently – as there should be – reporting on a study that found a simple checklist used at the time of surgeries can significantly reduce the rates of deaths and complications.

The study was published in the New England Journal of Medicine. According to an article in The Washington Post,

In the one-year pilot study involving 7,600 patients, the hospitals saw the rate of serious complications fall from 11 percent to 7 percent. Inpatient deaths declined by more than 40 percent overall, with the most drastic reductions occurring in hospitals with fewer resources.

Very few U.S. hospitals currently use such a checklist

The checklist covers many points, from the patient’s allergies to confirming equipment has been sterilized to assessing potential problems.. The point is that surgery is complex, and doctors should not assume they will remember everything that must be addressed.

The problem is, doctors do assume they remember. And for me, the most interesting part of the Post article is its discussion of how you get more doctors to adopt the checklist.

The major barrier to widespread adoption is physician attitudes, several experts said.

"If you ask surgeons, they'll say, 'Oh, we do this stuff,' " said Atul Gawande, a Boston physician who led the study.. He himself was skeptical that the checklist would affect the eight to 10 operations he performs each week.

"I don't get through a week where it has not caught something," he said. Running through the list reminded him of one patient's allergy and prompted his anesthesiologist to prepare for an unusually large amount of blood loss, which could have been fatal.

One of the most effective ways to market the checklist to doctors is to collect data on their performance, said David Flum, a surgeon at the University of Washington Medical Center, which took part in the study. Once they see how they stack up against their peers, physicians are quick to adapt, he said.

As in so many areas of process improvement, the proof is in the data. That is how you win the hearts and minds of skeptical people.