Wednesday, August 31, 2011

Creating a Culture of Accountability to Drive Statistical Thinking

Peter Drucker, famed management consultant, is credited to have been the first to say, "Culture eats strategy for breakfast". I frequently recommend the book Journey to Emerald City by Roger Conners in organizations I am involved with, to help the leadership team understand their role in driving change. This book was written in 1999 and is just as relevant today as it was 12 years ago. (

Albert Einstein stated that insanity is doing the same thing over and over again and expecting different results. If we want to create a customer focused, statistical thinking, run-to-target culture, our leaders and key influencers ("key hubs" - the hidden organization - must not just give casual lip service to run-to-target expectations in presentations and reviews, but must model the desired behaiors. They must create the experiences that will change beliefs and actions (accountability) to deliver the expected results. For example, managers and leaders must end the practice of reacting to two data points; instead, look for patterns, trends and shifts in the data, then investigate for deeper root causes. Management, leaders and key hubs must model this practice in their day to day activities.

Roger Conners writes, "Getting people to take the right action is not accomplished by command and control, rather by engaging their hearts and minds in fulfiling the purpose of the organization... Ernest Hemingway said never to mistake motion for action. Motion produces activity. Action produces results... The distinction between motion and action underscores the need to have people assume accountability for producing results." Roger Conners further explains the four steps to accountability as: See It, Own It, Solve It, and Do It, and in his book Journey to the Emerald City, Roger Conners illustrates how the main characters in The Wizard of Oz apply the Steps to Accountability representing Above the Line actions and thinking versus Below the Line habits of thought and behavior.

Personal Accountability is the central message in John G. Miller's book QBQ! Question Behind the Question. ( Personal Accountability means avoiding the blame game and not playing the victim.

Miller offers three simple guidelines for asking better questions. He says that QBQ's:

  1. begin with "What" or "How" (not "Why," "When," or "Who"); 
  2. contain an "I" (not "they," "them," "we," or "you"); 
  3. focus on action.

Where have you seen good examples of managers and leaders modeling the behavior of statstical thinking?

Sunday, August 07, 2011

Do You Have "Good" Inventory, or "Bad" Inventory?

Imagine Glinda the Good Witch of the North (Wizard of Oz movie) observing your current value stream when she encounters piles of inventory. To each inventory bucket she would ask, "Are you good inventory or bad inventory?" Not all inventory is equally bad; some inventory is necessary given the current lack of flow and synchronization in your end-to-end value stream. Lean principles and industrial engineering tell us that inventory is an outcome of a lack of speed; and, eliminating inventory frees up cash that can otherwise be used more effectively elsewhere in your organization to generate growth. Unfortunately, many process improvement teams erroneously treat inventory as a critical 'x' in their Lean Six Sigma projects to improve value stream performance.  As a result many improvement teams focus on reducing the piles of incoming materials and/or finished goods inventory - by working with their supplier base to adopt vendor managed inventory, and/or working with their customers to try to improve forecast accuracy and/or extend the acceptable lead time. Unfortunately, the financial benefits are often short-lived because these improvements did not address the lack of stability and flow in the organization's value stream. Nor did the earlier changes address the culture of the organization that fundamentally accepts inventory as a necessary cost of business.

Instead, treat inventory is an outcome ('Y'). Speed - the lack of it - is a critical 'x'.  A focus on speed will transform the value stream. To become faster the value stream capability and stability must be improved. Flow cannot be sustained in an unstable, unpredictable environment. Increased speed results in increased productivity, yield, quality and reliability, improved product availability, predictable service levels, additional capacity for growth, and improved cash flow.

Speed can be improved through the removal of non-value-add work, fewer touches, elimination of waste, smaller batch sizes and shorter production run lengths, quicker changeovers. Inventory, when needed (e.g. due to lack of synchronization), now can be moved upstream where it is less expensive and more flexible.  So, if your value stream has excess inventory, Speed is the yellow brick road to your Emerald City.