4.1c(3) Continuous Improvement and Innovation

The Blue Yarn

October 8, 2018 by Chris Scherer Leave a Comment

So, the blue yarn. What does it mean?

The best way to understand the blue yarn is to follow it. That’s exactly what Dr. Gary Kaplan did. In 1998, he was CEO of Virginia Mason Medical Center, which was losing money. As he searched for a better system to manage the hospital, he ‘wound up’ at a Toyota factory in Japan where he spoke to a sensei familiar with the Toyota Production System.

What he found was something very simple that, at the time, had been around for nearly 100 years. Sakichi Toyoda developed a self-correcting loom that could stop when thread was broken or defective. They ultimately automated the process and made it mistake-proof. This process is called Jidoka, or autonomation, and means automation with human intelligence.

Why Jidoka?

Jidoka is important because it stops a process immediately when a problem first occurs. Not only does it fix the condition, but it ultimately eliminates the root cause of the problem or defect. In an automated Jidoka process, equipment monitors its output (products) independently from operators, thereby enabling operators to operate multiple pieces of equipment and improve productivity.

Why the blue yarn?

Back to the hospital. The sensei used the blue yarn to map the path a patient would follow in a visit through cancer treatment. What they found was a mess. Cancer patients were already low on time and energy, but this ‘process’ had them winding all over the building in a seemingly needless pattern: a waste of time and energy.

When they ‘re-mapped’ the process, the savings from insurance expense alone were 37% and they were able to increase the number of patients without additional staff. Ultimately, they reduced patient receive treatment time by 50%. Dozens of hospitals have since adopted the Virginia Mason Production System. Based on a recent study of US hospitals, for two years Virginia Mason has placed in the top one percent in safety and efficiency.

Clearly, the flow of the process is one piece of the puzzle. Of equal importance is the decision to enable employees to: monitor a process, identify defects, stop the process, fix the problem, identify the root cause, and, ultimately, help eliminate the root cause of defects.

Imagine following a blue yarn through every step of one of your processes, including mistakes, corrections, delays, handoffs, miscommunications, etc. Recurring mistakes building on other recurring mistakes will create a big mess. Now imagine every person in that process having the ability to address those gaps and improve the process. Addressing the root cause will build a mistake-free and efficient process that is much cleaner and direct.

There is a method to achieve this. It starts with:

Clarity around your dream or whatever it is you want from your business (i.e., ultimate business outcome and whatever ‘freedom’ means to you)
Your mindset to achieve your dream
Your decision to use a methodology and management system to bring your dream to life.

Ready to achieve your dream?

Email me so that we can learn more about your business: chrisscherer@ceofocusmi.com
Join our Facebook group for key insights: https://www.facebook.com/groups/StressfulToSuccessful/

Listen to the original story

Here: 99% Invisible – The Blue Yarn

Crisis Management & how to overcome it

May 3, 2018 by Uwe Wetzel Leave a Comment

Here is an interesting story I want to share. Back in my past as CEO of an injector manufacturing plant there was a phenomenon for several weeks. Every Friday at 3:00 pm we were in crisis mode. At that time, we were working seven days, three shifts and at 3:00 pm on Friday, the assembly manager indicated that we need to shut down the assembly line on the weekend due to inadequate parts supply. The logistics manager struggled to get the parts from the fabrication department or outside suppliers, which had to produce the parts by working overtime and expedited shipping cost.

Shutting down the assembly line would have had a dramatic impact on the supply to our customer as we were one of their just-in-time suppliers. We would have shut down their production line with a huge financial penalty. We were in crisis mode every Friday for a couple of months.

Finally, I called all managers involved in the supply and production process into a meeting to discuss the constant crisis mode on Fridays. After lengthy discussions and analyzing the root cause of the shortages, we agreed to meeting on Thursday mornings, everyone providing information about demand and supplies for the weekend production. We were now able to prioritize and adjust production where needed. Within two weeks there was no crisis meeting on Fridays any more. Problem solved. We were able to reliably provide the necessary quantity to the customer.

Conclusion: Unless you find the root cause of the problem using six sigma methodology and eliminate the issues in the process, you will not see improvements in your processes and production output.

Measure Your KPI’s

January 15, 2018 by Uwe Wetzel Leave a Comment

We all are in business to make money unless you are a non-profit organization, but profit is not a manageable activity, it’s a “Result”.

Certain activities are directly linked to profitability like Sales and Expenses. Performing these activities more effectively leads to greater profit.

The accounting system is the historical “System of Record” that captures all physical transactions. Geared primarily around financial criteria, profit, cash flow, assets & liabilities. Measuring profits only is imperfect and influenced by many variables like inventory, sales cycles, timing issues and more. It is historical and therefore purely retrospective.

There is a better way, switching from past tense management to current and future-facing management. Here are the three Stages of Management:

What happened (Accounting View – Financial KPI)
What is happening (Real Time KPI)
What’s going to happen (Future Facing Management – Leading KPI)

Weather forecasters are using radar to predict the short-term weather changes (we all knew when and where the hurricane would make landfall and could prepare in time). Leading KPI’s are like a Radar for your business. You can see the changes coming and prepare in time.

What leading indicators are critical in your business? Share your experience.

Are You Vulnerable

October 17, 2017 by Chris Scherer Leave a Comment

The primary goal of leadership is to have influence. Leaders should have the answers. They don’t need help. Right?

Wrong. Attaining leadership is more complicated than it might seem. How about leading through power and authority? Lead the way. This, too, has inherent limitations.

Why? What if he doesn’t know the way? What if this (whatever-it-is) has never been done? Power and authority only get you so far. They have a limited sphere of influence. They can maintain the status quo and strengthen boundaries. They might even extend borders, build strong walls, control or mitigate bad outcomes, contain and constrain you-name-it. A leader who wields power and authority to get stuff done inherently imposes his ‘way’, which is, by definition, limited.

On the other hand, the leader who has the courage to be vulnerable immediately creates opportunity for all possibilities. She opens the door to the unknown. She invites change, collaboration, discovery, evolution, growth, innovation, invention, questioning, transformation, and transparency.

The leader’s job is to enable this environment and provide a framework within which her team can influence reaching whatever goal lies ahead.

Are you courageous enough to be vulnerable?

Courtesy: Glenn Lopis at Entrepreneur

Innovation Metrics: How Do You Catch a Cloud and Pin It Down?

September 28, 2017 by James McPherson Leave a Comment

Innovation Metrics seems like a paradox. Innovation is Thinking Outside the Box, it’s spontaneous, it’s dynamic. Metrics are measurements. Not only are metrics the box, they are the specific geometry of that box.

But Innovation Metrics are valid and useful, and implementing them can give you greater insight into the mysterious black box of creativity and spontaneity that many think innovation is.

There are three basic areas to measure when doing these metrics:

1) Inputs

2) Outputs

3) Processes

The Processes lie between the inputs and the outputs, but are often the mysterious black box where innovation happens. Inputs and Outputs are more obvious thing to measure.

Start with what you have and measure those things (e.g. new people, new strategies). Measure how the new strategies are communicated throughout the firm.

Start simple. Once you begin getting insights you can make your metrics more granular. An important start to innovation metrics is deciding what to measure. You should not try to take in all the data and measure everything. Keep it simple. Do a check after a few weeks. Are we measuring the right things?

Your company is already using metrics. One of the most important aspects of using innovation metrics is having a common language in the firm around innovative processes. Think about how you can use current methodologies and their lingo and apply them to your innovation strategy.

Do not merely measure for the sake of measuring. What are the metrics telling you? If they are not telling you anything useful, get rid of them. Applying an innovation methodology means not being afraid to scrap the methodology. It is not because of fear of change, but because it isn’t relaying valuable information.

This is what Stuart Hamilton has called “The Curse of the Methodology”.

The Curse of the Methodology: Instead of having the PM work out what needs to be done and then the PM taking care of it, (all behind the scenes), there emerged methodologies (PMP or otherwise) that try to ensure that the PM follows the menu of daily activities. Don’t get me wrong, a lean methodology to enforce good governance is a good thing, but on my last engagement, every project (big or small) had to lodge a minimum of 21 documents, and often as many as 40. These documents are lengthy, repetitive, and take weeks of the PM and other team members to fill out. Then they all go into the archive where they will never be read.

In the end, the most important thing is to have a common language in the firm in which to communicate about innovation and outcomes. It does not matter as much what methodology of metrics you use as much as it matters that everyone is using the same one, with the same language, conveying the same goal.