8.26.2021

What is the Main Purpose for Combining and Implementing the Theory of Constraints, Lean, and Six Sigma?

Back in May, Bob Sproull and Matt Hutcheson published a book entitled The New Beginning: A Business Novel on How to Successfully Implement the Combination of The Theory of Constraints, Lean, and Six Sigma to Drive Profit Margins. Essentially, this book teaches the reader how to successfully combine and implement the Theory of Constraints, Lean, and Six Sigma to produce results that many companies only dream of having. It covers a variety of different company types including manufacturing and healthcare.

When I spoke with Bob in July, I asked him: "What is the main purpose for combining and implementing the Theory of Constraints, Lean, and Six Sigma?" Here is his full answer:

The main purpose for combining and implementing the Theory of Constraints, Lean, and Six Sigma is quite simply to maximize a company’s profitability.  Each of the three individual components serves a completely different purpose, but it all starts with the Theory of Constraints. The Theory of Constraints provides the needed focus and leverage point, meaning that the primary reason many improvement initiatives fail to deliver hoped-for profit levels is that many times they are focused on the wrong area of the system. It matters not whether the system is a manufacturing or service system, because each type of system has a constraining factor that encumbers the output of the system.  While the Theory of Constraints locates the correct focal point for improvement, Lean works to reduce waste, while Six Sigma reduces and controls variation. Both waste and variation encumber systems and therefore reduce the system output, which translates into less than desired profitability. By combining the Theory of Constraints, Lean, and Six Sigma, maximum profitability will be achieved.

The Theory of Constraints offers so many different tools and techniques that are completely different from many continuous improvement professionals utilize.  In the book The New Beginning, I insert these tools as part of the business novel format.  One of the tools is a different form of accounting known as Throughput Accounting.  It’s not a replacement for traditional Cost Accounting, but it is used throughout The New Beginning, as a way to make better financial decisions.  When I learned this form of accounting, it changed my entire approach to maximizing profitability.  While traditional Cost Accounting emphasizes that the key to profitability is through how much money can be saved, Throughput Accounting teaches the reader that the real key to improving profits is through how much money can be made. The difference between saving money and making money is profoundly different. In The New Beginning, I use numerous examples of how to use Throughput Accounting to drive profit margins upward.

Another valuable addition that can be realized by using the Theory of Constraints is the method used to order parts and raw materials. While most companies use something referred to as the Min/Max System, the Theory of Constraints utilizes something referred to as the TOC Replenishment Method, and the results are dramatically different!  In The New Beginning, I go to great lengths to explain this methodology and the results are dramatically different when compared to the Min/Max System.  By using the TOC Replenishment Method, companies can reduce their inventory by about fifty percent while virtually eliminating stock-outs!  Imagine a company being able to reduce their on-hand inventory by fifty percent and not worrying about stock-outs of needed parts and/or raw materials. Think about what that would do to a company’s profitability!

Another Theory of Constraints tool brought forth in The New Beginning is a logic tool known as The Goal Tree.  The Goal Tree is an important tool that can be used to develop a company’s improvement plan. In The New Beginning, I have provided examples from two distinctly different companies.  One company is a manufacturing company while the other one is oriented in healthcare. That is a series of completely different hospital types. It matters not what type of company attempts to use The Goal Tree, because of the logical method it uses to construct it. The method developed in this book is first, the creation of The Goal Tree which has an overall Goal at the top, followed by critical success factors need to achieve the company’s goal, and finally necessary conditions needed to achieve each of the critical success factors. When the Goal Tree is completed, it can then be used to assess the status of each of the Goal Tree entities. When the assessment is complete, The Goal Tree is then used to develop an improvement plan. As is demonstrated in The New Beginning, The Goal Tree is an important tool used to develop a company’s improvement plan.

The New Beginning was written as a sequel to another business novel I wrote entitled The Secret to Maximizing Profitability and both have been well received by the readers. The good news is, both books are centered on completely different company types, but in both books, I go into great detail on how to combine the three initiatives, namely Theory of Constraint, Lean, and Six Sigma.  It is my hope that both books will be enjoyed by all readers, but not only enjoyed, but also used to maximize your company’s profitability. I co-authored this book with Matt Hutcheson who is such a valuable contributor to the book’s success!

What do you think of Bob's perspective? Have you tried to combine Theory of Constraints, Lean, and Six Sigma in your organization? If so, what results did you expect and what did you receive? 

7.27.2021

How Does Communication Influence Success?

In June, Matthew L. Mosely -- a communication strategist, author, speaker, and world-record adventure swimmer -- published a highly important book entitled Ignition: Superior Communication Strategies for Creating Stronger Connections. Essentially, this book is a collection of dispatches from the frontlines of communication strategy, and the author investigates the link between success and effective communication.

When I spoke with Matt this past week, I asked him a series of questions about his book and the topic covered. Here is a transcript of our conversation:

Tell us how you came to write a book on communications?

Throughout a life spent moving from one organizational challenge to another, I’ve noticed that one thread has woven the whole experience together: The unbridled power of effective communication and storytelling in successful people.

But one question persists: If communication is so important, and we are more interconnected than ever before, then why are most managers and leaders so bad at it? 

In business, or in any relationship, communication is everything with team members, investors, customers, vendors, and everyone in between. Ineffective communication results in lost moments and squandered opportunities. 


Why is this important? Why now? 

Our ability to develop complex languages and thoughts and relationships is our secret sauce. This capacity to think outside ourselves, to create businesses, constitutions, stories, myths and art is our most cherished gift. This ability paved the way for humans to organize into large groups and connect by way of a common purpose and meaning. Because we could collaborate for the greater good, we could survive.

This skill is in greater demand more than ever if we are to survive – thrive – on this planet. 

Communication is how we relate to our world to build common connections and manage the environment around us. However, as we know from our experience, the art of communication is many times lost.


You write a lot about the importance of being proactive having a plan. Tell us more?

I’ve found that working with CEOs, senators and in everyday personal relationships there are three simple questions to ask yourself before blurting something out. 

Strategies for Communication Planning:

• What are you saying? Messaging. All of our context and history.

• Who are you saying it to? Targeting audiences. What do people expect of us?

• How are you saying it? Tactics. Of all the myriad ways to send a communiqué, what is the best?

Now you have a Communications Plan. Even if it is on the back of the napkin, it’s much better than none at all. 


What do you think of Matt's points? Have you experienced a lost business opportunity because of ineffective communication? 

6.28.2021

Those Who Facilitate Improvement Workshops... and the Mistakes They Make.

During this past May, Sheilah O'Brien published a very useful and practical book entitled Facilitating Rapid Process Improvement Workshops: The Self-Study Guide for Lean Leaders. The intent of the book is to help professionals who feel they are not truly gaining the full results of improvement initiatives and kaizen events. In the book, Sheilah speaks to the facilitator through coaching notes and actual workshop documents and techniques so the reader can fully understand how greater results are achieved. 

When I spoke with Sheilah last week about her book, I asked her: "What are the common mistakes facilitators make when overseeing rapid process improvement (RPI) workshops?" Here is her complete answer:

The common mistakes of facilitators of RPI workshops are:

1. Not understanding the facilitator role before you start. The RPI team is made up of workers who know about the problem to be analyzed.  They are dedicated. Facilitate with respect and inclusion. By passing on lessons and what you know to the team, you are working your way out of a job. 

“Team, please look at this flipchart. Do any of you want to change or add to them? Does everyone agree?” 

The facilitator's role should be to get the exercise started. Once it gets going, the volunteer facilitator (from the team) can carry it to its fruition. 

The facilitator lets the RPI team have their lead. The team knew what to do next.  


2. Not assuring that there is a monitoring system in place after the RPI ends: 

The end of the RPI means a shift in roles.  You, as the facilitator, no longer facilitate the workshop. Now you take on an advisory role to the process sponsor and responsible managers on how to track the implementation of improvements.


3. Not knowing that you need to keep two steps ahead of the team:

The facilitator, proud of the development of an improved process with all its steps, forgets about all the process supports (to those steps) that need to be improved too, such as forms, materials for the job, etc. 

The facilitator gets midway into the workshop and realizes he/she does not have a mechanism “to pull it all together”-- the risk is the team’s good work can go missing.


4. The facilitator hasn’t considered the “what if’s?”:

What if the organization doesn’t have data available? 

What if no one is available to take the team through the workplace (i.e., GEMBA)? 

What if you discover there is a backlog?  

What if there are many "products" that come out of the process?  There isn’t time to flowchart them all. 


What do you think about Sheilah's perspective on common mistakes facilitators make? Do you see these same mistakes in your organization? Are there others that are not listed here that you feel are common?

5.26.2021

Startups and the Problems They Face

Just this month, Orly Zeewy, published a very practical book entitled Ready, Launch, Brand: The Lean Marketing Guide for Startups that shows you how to close the marketing gaps that can slow down sales and make it harder to scale your business. When I spoke with Orly this past week, I asked her:  "What are the greatest obstacles that startups face when trying to scale their businesses?" Here is her response:

To quote author Seth Godin, "In a crowded marketing place, fitting in is a failure. In a busy marketplace, not standing out is the same as being invisible.”

Startups typically think of scaling as something that will happen magically if only they work hard enough and do great work. But scaling your business has less to do with magic and more to do with following the three pillars of brand building.

1.       Who Are You? If you can’t answer this question, no one else can. Founders have a unique opportunity at the start of their company to get clear on their brand’s value proposition—the one thing they offer that no one else can. But when asked about their company, they typically talk about what they do but almost never about why they do it. According to author Simon Sinek, customers buy based on the why, not the what. It’s the reason that Apple is still a leader in computer sales. Think different is not just a tagline, it’s the reason they exist.

2.       Do You Have The Right Team? Building a team is key to scaling because no founder can scale on their own. If you don’t have a clear vision, building your team becomes a game of chance that you’ll find “the right people.” A clear vision helps you identify people who not only “get it” but who are passionate about your startup. They believe what you believe and that’s a powerful incentive to join. It also turns out that having the wrong team is the #3 reason that startups fail.

3.       Are You Attracting The Right Customers? This critical pillar of brand building is a hard one for many founders to commit to. In the early days of their startup, they are focused on keeping the lights on so any customer is the right one. So, instead of scaling with ideal customers who will refer other ideal customers, you’re trying to build brand loyalty with customers who are not invested in what you offer. It’s hard to scale when you’re not clear on who your ideal customer is and why you matter to them.

What do you think of Orly's perspective on brand building? Have you tried scaling a small business? What were the main problems that you experienced? 

4.27.2021

The Import and Export of Services -- Their Role in Driving a Significant Portion of International Trade

Just this month, Sarita Jackson published a book -- entitled International Trade in Services: Effective Practice and Policy -- that provides a simple, yet thorough, introduction on how to export a service to an overseas market and guides its audience with a step-by-step process on exporting a service from research to strategy to implementation. 

When I spoke with Sarita recently, I asked her, "Although export and import of services drive a significant portion of international trade, why is attention to this area so minimal?" Here is her complete answer: 

As someone whose first practical encounter in international trade entailed exporting consulting services throughout Southern Africa and the Eastern Caribbean, this is a question that served as the impetus for the book.

Economists paid less attention to the services sector because they did not consider services, which are intangible, as tradable commodities.

Furthermore, policymakers have focused less on the services sector because its trade surplus does not create a sense of concern and urgency, especially among voters during an election cycle. On the other hand, the high trade deficit in the manufacturing sector, along with the loss of jobs partly due to the significant increase in less expensive imports from overseas, explains why there is a greater focus on increasing manufacturing exports.

For example, United States trade policy discussions during the 2016 presidential election cycle focused on the $800 billion dollar trade deficit in the manufacturing sector in which goods purchased from overseas far outweigh those sold to consumers in other countries.

At the same time, the United States had close to a $300 billion trade surplus in which its exports surpassed its imports thus creating additional job opportunities.


Due to the lower levels of attention to the services sector, my workshops and business courses have provided research and practical tips pertaining to the import and export of a service. The request for in-depth, practical information from workshop attendees and students with a services-based business or an interest in providing a service overseas demonstrated that this part of the international trade community continues to expand.

My book International Trade in Services: Effective Practiceand Policy now provides insight and answers regarding a continuously growing and important sector in international trade. 

What do you think of Sarita's perspective? What has your experience been exporting a service to an overseas market?


3.26.2021

The Shingo Model -- Will it Work in Your Organization?

In February, Gerhard Plenert published a book entitled Driving the Enterprise to Sustainable Excellence:  A Shingo Process Overview. Essentially, his book presents a big-picture overview of the entire Shingo improvement process. It fully discusses the needs and benefits of the Shingo process, and what is required if you seek to execute the Shingo Model in your enterprise and focuses on creating an enduring organization-wide continuous improvement process. 

When I spoke with Gerhard this month, I asked him: "What does your book provide that readers cannot get from the Shingo-Model course materials?" Here is his complete answer:

Countless organizations have, at one time or another, began a “Lean jour­ney” or they have implemented a continuous improvement initiative of some sort. At the foundation of these initiatives is a plethora of tools that seem to promise exciting new results. While many organizations may initially see significant improvements, far too many of these initiatives meet disap­pointing ends. Leaders quickly find that Lean tools such as Six Sigma, judoka, SMED, 5S, JIT, quality circles, etc. are not independently capable of effecting lasting change. There is an integrated synergy that occurs between these various tools built upon a set of eternal principles, that creates an environment of lasting change. That is the topic of this book -- How to create a sustainable culture of continuous improvement.

Years ago, the Shingo Institute set out on an extended study to deter­mine the difference between short-lived successes and sustainable results. Over time, the Institute noticed a common theme: the difference between successful and unsuccessful effort is centered on the ability of an orga­nization to ingrain into its culture timeless and universal principles rather than rely on the superficial implementation of tools and programs. These findings are confirmed time and again by nearly three decades of assessing organizational culture and performance as part of the Shingo Prize process. Since 1988, Shingo examiners have witnessed first-hand how quickly tool-based organizations decline in their ability to sustain results. On the other hand, organizations that anchor their improvement initiatives to principles experience significantly different results. This is because principles help people understand the “why” behind the “how” and the “what.”

To best illustrate these findings, the Shingo Institute developed the Shingo Model™ (see Chart 0.1), the accompanying Shingo Guiding Principles, and the Three Insights of Enterprise Excellence™. The Shingo Institute offers a series of six workshops designed to help participants understand these principles and insights and to help them strive for excellence within their respective organizations.

My book is not a detailed review or a replacement of any of the Shingo workshops that teach in-depth the Shingo methodology far beyond what this book is capable of doing. This book is an overview of the entire Shingo process, starting with a discussion of the challenges that many of today’s enterprises are experiencing. I, in my role as a Ph.D. in economics, have studied industries and has worked closely with many of them, attempting to understand their weaknesses. I has found that this is the only methodology that encompasses the Toyota Production System (TPS) principles at a depth and level that just studying the TPS tools can never accomplish.


Next, this book builds upon an understanding of these weaknesses. The book discusses how the overall Shingo methodology fits into these organizations and highlights the benefits. The next step is then to discuss what requirements are necessary for an organization to get ready for a Shingo transformation. What are the steps that the organization needs to go through, and when will it know that it is ready to begin?


This book briefly reviews the Shingo Insights and Principles and explains how the Shingo courses should be best utilized to facilitate the desired transformation. It suggests some alternative plans for over-all implementation based on the current state of the enterprise. It explains why there is no “one way” for successful implementation and how the implementation sequence needs to be customized to fit the requirements of each enterprise. It also discusses the length of time needed for success and how this differs depending on the current enterprise environment.

Lastly, the book explains how the implementation of a continuous improvement methodology and Shingo training for any enterprise is never finished. It is an on-going process and success is defined by internal improvements, not by some arbitrary external benchmark.

The book is intended to be educational, thought-provoking, entertaining in its stories and examples, and a guideline towards the development of a plan for continuous improvement. This book is filled with stories and examples, showing successful and not-so-successful implementations. The stories are used to highlight many of the pitfalls that have arisen and may arise for you and which can be avoided if the reader is aware of them and knows how to watch for them.

The Shingo methodology, which is recognized as the world standard for developing enterprise excellence, offers access to a large volume of specialized information on how to achieve a sustainable environment of continuous improvement. However, before this book, there wasn't a high-level overview of the entire Shingo methodology. That is what this book offers. It offers a high-level review of all the elements of the Shingo methodology and is an excellent introduction for anyone looking for an overall vision of what a Shingo implementation means to themselves and to their organization.

This book is filled with ideas intended to help the perspective Shingo implementor achieve success. Let’s make you, the reader, successful.

What is your experience with the Shingo Model? Have you used it in your organization? Do you feel Gerhard's book is an asset to those organizations seeking to build a sustainable culture of organizational excellence?

2.25.2021

Are Evolving Stakeholder Expectations Affecting Your Business, Its Products, and Its Leadership?

In January, Raj Aseervatham published a thought-provoking book entitled Leading Tomorrow: How Effective Leaders Change Paradigms, Build Responsible Brands, and Transform Employees, which addresses the evolving expectations of the stakeholders -- such as, customers, investors, society, governments, and employees -- regarding businesses and their products and how leadership must respond.  These stakeholders are increasingly making choices about if or how they support businesses – through the purchase of their products and services, shareholdings and financing, regulatory approvals, and even experiences working for them – based on not just what a business does, but how it does it.

Raj's book considers how the emerging generation of leaders must change paradigms and transform their employees to do more than just operate a business. It examines how to effect culture shifts that are necessary to innovate businesses so that they simultaneously meet market needs while meeting stakeholder expectations on concerns as varied as ethical business conduct, labor practices, climate change, responsible use of diminishing natural resources, and contribution to socio-economic challenges in their market catchments.

When I spoke with Raj this month, I asked him: "How are stakeholder expectations changing regarding supporting businesses? What paradigms must leaders change to meet these new expectations?" 

Here is his complete answer:

The three most significant support groups for successful businesses are customers, investors, and employees. These stakeholder groups are part of a larger ecosystem; our increasingly interconnected, increasingly knowledgeable society, and the communities of which we are a part. 

Societal awareness of the environmental, social and governance (ESG) problems that society faces grows daily. As the world’s population increases, these problems grow and exacerbate each other. Climate change, ecological breakdown, water contamination, air pollution, pandemics, corruption, infractions of human rights in the supply chain, gender and cultural discrimination, and many others take a compounding toll on society. 

Unsurprisingly, an increasing proportion of stakeholders demand to know what businesses are doing to diminish these problems. They disassociate from those businesses that worsen the problems and migrate to better-performing competitors. Their insights improve continually. Greenwashing and PR are more easily seen through. 

As this awareness extends across and deepens within society, customers, investors and employees are making more informed choices about who they will buy from, who they will invest in, and who they will purposefully work for. These trends amplify as older generations give way to younger generations and new values supersede old ones. Commodity markets, money markets, and human resource markets adapt to these inexorable trends. 

Business leaders are seeing these ESG issues as the new frontier of strategic management. Responsible businesses are more likely to sustainably prosper. 

Leaders must now understand the myriad issues and own the most important ones in the context of their business stakeholders and business strategy. Then they must authentically lead their employees to meet or exceed rapidly changing stakeholder expectations of responsible business practice. Growing and harnessing such societally attuned business cultures will increasingly define successful business leaders. 

Like any journey of authentic and transformative leadership, the first steps are taken within the leader. This book provides illumination to guide those first critical steps to leading tomorrow.

What do you think of Raj's perspective? Have you seen a shift in your customers' and stakeholders' expectations? What steps are you taking to address these new expectations? 

1.26.2021

Does Your Organization Suffer from Leadership Without Leaders?

In December, John Varney published an important book entitled Leadership as Meaning-Making Take the Hero's Journey to Transformation, which takes a fresh look at leadership as a systemic shared phenomenon. It is one aspect of the evolutionary principle of bringing people to maturity as human beings – transforming the immature through purposeful adventure. 

I spoke with John this month and asked him: “What are the most common misconceptions about leadership and its meaning?” Here is his complete answer:

Leadership without leaders. 

We are conditioned to think of leadership as what leaders do – and hence to look around for leaders to help solve the great issues of the day.  But this is leadership only as it manifests through control and command hierarchies of power. Such leadership consigns the rest of us to be followers – subservient and powerless. Followers are there only to do the work and sustain the status of those who presume to lead. Followership is disempowering and often demeaning. As a follower, you do what is expected of you (your so-called "duty") and take the blame for any shortfall. 

This kind of leadership sustains a whole industry of leadership training and development. This, we might cynically observe, teaches managers the manipulative techniques that get the followers to do their bidding, willingly and unquestioningly. Leaders are sometimes popular because they do our thinking for us and absolve us of feelings of responsibility. 

A very different kind of leadership is latent in the relationships between us and comes to the fore when we come together in common cause. This is leadership as a flow of energy and resources directed by our sense of purpose. It engages all of us and all our talents and potential. It is leadership in which all participate, stepping into and out of the flow of energy and resources (the value-adding stream) as we intuitively respond to our calling. 

Both modes of leadership have their place and their value but only one leads to freedom and wholeness. In self-organising communities of practice, individuals grow inwardly as they realise their potential in service to their elective mission. Nobody is pulling their strings as they discover and pursue their freely chosen purpose in life. This is leadership as meaning-making. As I say in the book, “Perhaps the hiatus of the pandemic will enable us to show that a more organic and holistic way of being is not only possible but is more wholesome and fulfilling."

How do you define "leadership" in your organization? How has it affected workplace culture? Has it evolved past "command and control"?