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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

Filed Under: 0 Organizational Profile, 0.2 Organizational Situation, 0.2c Performance Improvement System, 3 Customers, 3.1 Voice of the Customer, 3.2 Customer Engagement, 3.2a Product Offerings and Customer Support, 3.2a.(1) Product Offerings, 3.2a.(2) Customer Support, 3.2b Customer Relationships, 3.2b.(1) Relationship Management, 3.2b.(2) Complaint Management, 4 Measurement, Analysis, and Knowledge Management, 4.1 Measurement, Analysis, and Improvement of Organizational Performance, 4.1a Performance Measurement, 4.1b Performance Analysis and Review, 4.1c Performance Improvement, 4.1c(1) Best Practices, 4.1c(3) Continuous Improvement and Innovation, 4.2 Knowledge Management, Information, and Information Technology, 4.2a Organizational Knowledge, 5 Workforce, 5.1 Workforce Environment, 5.2 Workforce Engagement, 6 Operations, 6.1 Work Processes, 6.1a Product and Process Design, 6.1b Process Management, 6.1c Innovation Management, 6.2 Operational Effectiveness, 7 Results, 7.1 Product and Process Results, 7.2 Customer-Focused Results, 7.2a Customer Satisfaction, A Core Values and Concepts, A.01 Systems Perspective, A.03 Customer-Focused Excellence, A.04 Valuing People, A.05 Organizational Learning and Agility, A.06 Focus on Success, A.07 Managing for Innovation, A.11 Delivering Value and Results, Uncategorized

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:

  1. What happened (Accounting View – Financial KPI)
  2. What is happening (Real Time KPI)
  3. 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.

Filed Under: 4 Measurement, Analysis, and Knowledge Management, 4.1a Performance Measurement, 4.1b Performance Analysis and Review, 4.1c Performance Improvement, 4.1c(1) Best Practices, 4.1c(2) Future Performance, 4.1c(3) Continuous Improvement and Innovation

Before Selling or Exiting

June 2, 2017 by Chris Scherer Leave a Comment

Before Selling or Exiting

Most business owners hope to exit at some point. Typically, this means you, as the owner (President, CEO), are no longer there or are not there as often. Whether you plan to sell, pass it on to the next generation, or be a helicopter-CEO, there are seven things you need to do before you step away. The bad news is that you should have started this process from day one. Yes. From the day you started the business.

The good news: you are actually reading this and thinking about the steps. Your mindset (1) is the first step. If you only work ‘in’ your business and never work ‘on’ your business, then you are the business. In this scenario, when you step away, the business loses its greatest asset: You.

You have this great idea (a business), now what? If you step back and think about how you direct others, the answer is clear: processes (2) and procedures (3). Your people need some rules to play by and it is your job to provide that direction with constraints. If you fast forward to your ‘exit’, you may know exactly how everything in your business works, but you won’t be around to ensure that same outcome. Now is the time to provide guidance.

Once you actually have some traction, you will need to continually build efficiencies (4). Hopefully, you are focusing on what to improve and how to make it happen. When you’re gone, will this continue to happen?

Now that you have a business that is focused and improving, it is critical that you have the right team (5) to keep the business growing. Remember, you will be gone at some point. You’re better off building and testing your team when you’re around, and gradually step away. As your team develops, you can work from home, take a day off, and maybe even take a vacation.

As you can imagine, business owners expect profit (over time) and they don’t like surprises. Any prospective buyer (or CEO) will look at your finances (6). This is more than your balance sheet and P&L. Buyers will want to peel back the layers and look around corners.

While you may have guessed the last item, we encourage you to be diligent (after all, you will encounter due diligence) and read the full white paper.

If you are really serious, answer 20 simple questions to assess: is your business ready to be sold?

Filed Under: 1 Leadership, 1.2 Governance and Societal Responsibilities, 4 Measurement, Analysis, and Knowledge Management, 4.1a Performance Measurement, 4.1b Performance Analysis and Review, 4.1c Performance Improvement, 4.1c(2) Future Performance, 4.1c(3) Continuous Improvement and Innovation, 4.2 Knowledge Management, Information, and Information Technology, 4.2a Organizational Knowledge, 5 Workforce, 5.2 Workforce Engagement, 6 Operations, 6.1 Work Processes, 6.2 Operational Effectiveness, 7 Results, 7.2 Customer-Focused Results, 7.2a Customer Satisfaction, 7.5 Financial and Market Results, 7.5a Financial Performance, 7.5b Marketplace Performance, A.01 Systems Perspective, A.05 Organizational Learning and Agility, A.06 Focus on Success, A.08 Managing by Fact, A.11 Delivering Value and Results

Categories

  • 0 Organizational Profile
  • 0.1 Organizational Description
  • 0.1a Organizational Environment
  • 0.1a.(2) Mission, Vision, and Values
  • 0.1a.(3) Workforce Profile
  • 0.1b Organizational Relationships
  • 0.1b.(1) Organizational Structure
  • 0.1b.(2) Customers and Stakeholders
  • 0.1b.(3) Suppliers and Partners
  • 0.2 Organizational Situation
  • 0.2a Competitive Environment
  • 0.2c Performance Improvement System
  • 1 Leadership
  • 1.1 Senior Leadership
  • 1.2 Governance and Societal Responsibilities
  • 2 Strategy
  • 2.2 Strategy Implementation
  • 3 Customers
  • 3.1 Voice of the Customer
  • 3.2 Customer Engagement
  • 3.2a Product Offerings and Customer Support
  • 3.2a.(1) Product Offerings
  • 3.2a.(2) Customer Support
  • 3.2a.(3) Customer Segmentation
  • 3.2b Customer Relationships
  • 3.2b.(1) Relationship Management
  • 3.2b.(2) Complaint Management
  • 4 Measurement, Analysis, and Knowledge Management
  • 4.1 Measurement, Analysis, and Improvement of Organizational Performance
  • 4.1a Performance Measurement
  • 4.1b Performance Analysis and Review
  • 4.1c Performance Improvement
  • 4.1c(1) Best Practices
  • 4.1c(2) Future Performance
  • 4.1c(3) Continuous Improvement and Innovation
  • 4.2 Knowledge Management, Information, and Information Technology
  • 4.2a Organizational Knowledge
  • 4.2b Data, Information, and Information Technology
  • 5 Workforce
  • 5.1 Workforce Environment
  • 5.2 Workforce Engagement
  • 6 Operations
  • 6.1 Work Processes
  • 6.1a Product and Process Design
  • 6.1b Process Management
  • 6.1c Innovation Management
  • 6.2 Operational Effectiveness
  • 7 Results
  • 7.1 Product and Process Results
  • 7.2 Customer-Focused Results
  • 7.2a Customer Satisfaction
  • 7.3 Workforce-Focused Results
  • 7.4 Leadership and Governance Results
  • 7.5 Financial and Market Results
  • 7.5a Financial Performance
  • 7.5b Marketplace Performance
  • A Core Values and Concepts
  • A.01 Systems Perspective
  • A.02 Visionary Leadership
  • A.03 Customer-Focused Excellence
  • A.04 Valuing People
  • A.05 Organizational Learning and Agility
  • A.06 Focus on Success
  • A.07 Managing for Innovation
  • A.08 Managing by Fact
  • A.10 Ethics and Transparency
  • A.11 Delivering Value and Results
  • Baldrige
  • FAQs – Frequently Asked Questions
  • Uncategorized

Recent Posts

  • The Blue Yarn
  • Crisis Management & how to overcome it
  • Creating a Learning Organization
  • Four Barriers to Business Transformation
  • CEO Habits to Develop in 2018
  • Will Your Business Be Sold Or Will It Fold?
  • Measure Your KPI’s
  • Avoiding Blind Spots
  • Who’s In Charge
  • Dream of Selling

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