Averages, Percentages and Math

As a general rule I strongly discourage the use of averages and “percent improvement” (or reduction) type metrics for process improvement.

The Problem with Averages

Averages can be very useful when used as part of a rigorous statistical analysis. Most people don’t do that. They simply dump all of their data into a simple arithmetic mean, and determine a score of sorts for how well the process is doing.

The Average Trap

There is a target value. Let’s say it is 15. Units could be anything you want. In this example, if we exceed 15, we’re good. Under 15, not good.

“Our goal is 15, and our average performance is 20.”

Awesome, right?

Take a look at those two run charts below*. They both have an average of 20.

On the first one, 100% of the data points meet or exceed the goal of 15.

Run chart with average of 20, all points higher than 15.

On the one below, 11 points miss the goal

image

But the both have an average 5 points over the goal.

In this case, the “average” really gives you almost no information. I would have them measure hits and misses, not averages. The data here is contrived, but the example I am citing is something I have seen multiple times.

Why? Most people learned how to calculate an arithmetic mean in junior high school. It’s easy. It’s easier to put down a single number than to build a run chart and look at every data point. And once that single number is calculated, the data are often thrown away.

Be suspicious when you hear “averages” used as a performance measurement.

Using Averages Correctly

(If you understand elementary statistical testing you can skip this part… except I’ve experts who should have known better fall into the trap I am about to describe, so maybe you shouldn’t skip it after all.)

In spite of what I said above, there are occasions when using an average as a goal or as part of a target condition makes sense.

A process running over time produces a range of values that fall into a distribution of some kind.

Any sample you take is just that – a sample. Take a big enough sample, and you can become reasonably confident that the average of your sample represents (meaning is close to) the average of everything.

The move variation there is, the bigger sample you need to gain the same level of certainty (which is really expressed as the probability you are wrong).

The more certain you want to be, the bigger sample you need.

Let’s say you’ve done that. So now you have an average (usually a mean) value.

Since you are (presumably) trying to improve the performance, you are trying to shift that mean – to change the average to a higher or lower value.

BUT remember there is variation. If you take a second sample of data from an unchanged process and calculate that sample’s average, YOU WILL GET A DIFFERENT AVERAGE. It might be higher than the first sample, it might be lower, but the likelihood that it will exactly the same is very, very small.

The averages will be different even if you haven’t changed anything.

You can’t just look at the two numbers and say “It’s better.” If you try, the NEXT sample you take might look worse. Or it might not. Or it might look better, and you will congratulate yourself.

If you start turning knobs in response, you are chasing your tail and making things worse because you are introducing even more variables and increasing the variation. Deming called this “Tampering” and people do it all of the time.

Before you can say “This is better” you have to calculate, based on the amount of variation in the data, how much better the average needs to be before you can say, with some certainty, that this new sample is from a process that is different than the first one.

The more variation there is, the more difference you need to see. The more certainty you want, the more difference you need to see. This is called “statistical significance” and is why you will see reports that seem to show something is better, but seem to be dismissed as a “statistically insignificant difference” between, for example, the trial medication and the placebo.

Unless you are applying statistical tests to the samples, don’t say “the average is better, so the process is better.” The only exception would be if the difference is overwhelmingly obvious. Even then, do the math just to be sure.

I have personally seen a Six Sigma Black Belt(!!) fall into this trap – saying that a process had “improved” based on a shift in the mean of a short sample without applying any kind of statistical test.

As I said, averages have a valuable purpose – when used as part of a robust statistical analysis. But usually that analysis isn’t there, so unless it is, I always want to see the underlying numbers.

Sometimes I hear “We only have the averages.” Sorry, you can’t calculate an average without the individual data points, so maybe we should go dig them out of the spreadsheet or database. They might tell us something.

The Problem with Percentages

Once again, percentages are valuable analysis tools, so long as the underlying information isn’t lost in the process. But there are a couple of scenarios where I always ask people not to use them.

Don’t Make Me Do Math

“We predict this will give us a 23% increase in output.”

That doesn’t tell me a thing about your goal. It’s like saying “Our goal is better output.”

Here is my question:

“How will you know if you have achieved it?”

For me to answer that question for myself, I have to do math. I have to take your current performance, multiply x 1.23 to calculate what your goal is.

If that number is your goal, then just use the number. Don’t make me do math to figure out what your target is.

Same thing for “We expect 4 more units per hour.”

“How many units do you expect per hour?” “How many are you producing now?” (compared to what?)

Indicators of a W.A.G.

How often do you hear something like  “x happens 90 percent of the time”?

I am always suspicious of round numbers because they typically have no analysis behind them. When I hear “75%” or “90%” I am pretty sure it’s just speculation with no data.

These things sound very authoritative and it is easy for the uncertainty to get lost in re-statement. What was a rough estimate ends up being presented as a fact-based prediction.

At Boeing someone once defined numbers like this as “atmospheric extractions.”

If the numbers are important, get real measurements. If they aren’t important, don’t use them.

Bottom Line Advice:

Avoid averages unless they are part of a larger statistical testing process.

Don’t set goals as “percent improvement.” Do the math yourself and calculate the actual value you are shooting for. Compare your actual results against that value and define the gap.

When there is a lot of variation in the number of opportunities for success (or not) during a day, a week, think about something that conveys “x of X opportunities” in addition to a percent. When you have that much variation in your volume, fluctuations in percent of success from one day to the next likely don’t mean very much anyway.

Look at the populations – what was different about the ones that worked vs. the ones that didn’t — rather than just aggregating everything into a percentage.

Be suspicious of round numbers that sound authoritative.

_______________

*These charts are simply independent random numbers with upper and lower bounds on the range. Real data is likely to have something other than a flat distribution, but these make the point.

The Improvement Kata: Next Step and Expected Result

In the Improvement Kata sometimes it helps to think about the outcome desired and then the step required to accomplish it.

A couple of months ago, I gave a tip I’ve learned for helping a coach vet an obstacle.

Another issue I come across frequently is a weak link between the “Next Step” and the “Expected Outcome.”

In the “Five Questions” of the Coaching Kata we have:

What is your next step or experiment?” Here we expect the learner / improver to describe something he is going to do. I’m looking for a coherent statement that includes a subject, verb, object here.

Then we ask “What do you expect?” meaning “What do you expect to happen?” or “What do you expect to learn?” from taking that step?

I want to see that the “Expected Result” is a clear and direct consequence of taking the “Next Step.”

Often, though, the learner struggles a bit with being clear about the expected outcome, or just re-states the next step in the past tense.

While this is the order we ask the questions, sometimes it helps to think about them in reverse.

Reverse the Order

Have the learner first, think about (and then describe) what she is trying to accomplish with this step. Look at the obstacle being addressed, and what was learned from the last step.

Based on those things, ask “what do you want to accomplish with your next step?”

The goal here is to get the learner to think about the desired result. Don’t be surprised if that is still stated as something to do, because we are all conditioned to think in terms of action items, not outcomes.

“What do you need to learn?” sometimes helps.

“I need to learn if ______ will eliminate the problem.” might be a reply.

Even a proposed change to the process usually has “to learn if” as an expected outcome, because we generally don’t know for certain what the outcome will be until we try it.

Have the learner fill in the “Expected Outcome” block.

NOW ask “OK, what do you have to do to ______ (read what is in the expected outcome)?”

PDCA Outcome-Activity

That should get your learner thinking about the actions that will lead to that outcome.

A Verbal Test

A verbal test can be to say “In order to ______ (read the expected outcome), I intend to _____ (read the next step.”

If that makes sense grammatically and logically, it is probably well thought out.

The Destructiveness of “What Can You Improve?”

“What Can You Improve?”

Leaders often ask “What can you improve?” as an empowerment question. In reality, it may have the opposite effect.

I am coming to the belief that “What can you improve?” (about your job, about your process) is possibly one of the most demotivating, disempowering, destructive questions that can be asked.

What can you work on?” is another one of many forms this question takes. “How could you improve this process?” is another. What they all have in common is the psychological trap they set.

Now this really isn’t that much of a problem in a company that has a history of transparency in leadership, comfort with discussing the truth, and no need for excuses or justifications. Then again, those companies tend not to ask these questions straight-on.

But the vast majority of organizations aren’t like that. That doesn’t mean they are unkind. Rather, they operate in an environment where truthfully answering this question is difficult at best.

The Psychological Trap

To answer that question with anything other than trying to guess what you want, implies I have:

  • Thoroughly examined my results and the underlying processes.
  • Identified gaps in performance.
  • Know what to do about those gaps.
  • And haven’t done anything about it until you asked.

This puts me in the position of either defending the status-quo, or saying that I need to improve something that is out of my control – someone else’s process needs improvement so I can do better.

Hint: If you are a leader, and you ask a “What can you improve?” question and get an answer like the above – defending the status-quo or pointing to an outside problem –, there is fear in your organization. Justified or not, the person answering is struggling to maintain the impression that everything they can do is being done. Why do they feel the need to do this? Think about it.

This is especially pervasive in support / staff departments with a charter of influencing how other organizations perform, or in those who must work together with line organizations to succeed in their tasks. In industry this might be maintenance, HR, industrial engineering, or even the “improvement office” (who are often not a  beacon of internal efficiency or effectiveness).

A Bit of Background

When I start working with an organization, we usually start with practicing the basic mechanics of the Improvement Kata in a classroom setting. We then follow up immediately with kick-starting some live improvement cycles so we can begin practical application. Classroom learning really doesn’t do much good unless it is applied immediately.

Applying the Improvement Kata is a lot harder in the real world than it is in the classroom. I could go into a tangential rant on why I think our primary and secondary education system makes it harder, but I’ll save that for another day.

Even though I am as adamant as I can be on the importance of the organization identifying challenges for the new improvers / learners, the reality is that most organizations don’t know how to do this, or at least aren’t comfortable with it.*

As a result, the new improvers often struggle to define a “challenge” for themselves.

They guess – because they haven’t yet studied their process (which is the next step once context is established, they haven’t yet established a target condition (which is the step after that), and therefore, they haven’t identified what improvements they must make to get to the challenge state.

And if that guess is something in someone else’s domain, or worse if the “coach” has something else in mind, they are told “That’s not it,” they guess again, and eventually get defensive or give up.

Now – to be clear, this doesn’t happen every time. But I have seen it enough, across multiple organizations in very different domains that it’s a problem. And it is frustrating for everyone when it happens.

I indirectly addressed this topic a long time ago in “How the Sensei Sees.” Now, though I am talking about my own direct observation of the effect. And I am still learning how to deal with the fallout without becoming part of the problem.

It’s not the learner’s problem. It is a leadership problem.

________

*Dave Kilgore at Continental Automotive had the additional insight that it is important for beginners that this challenge should be something important but not urgent so they don’t feel pressured to jump to an immediate solution. This is a good example of “constancy of purpose” – his priority is developing the skill level for improvement first.

Delivering the Patient Satisfaction Experience

“Our challenge is to improve our patient satisfaction scores.”

This seems to be a fairly common theme as I continue to work in the health care arena.

Background

In the U.S. at least, most major health care operations use one of a couple of major service providers (such as Press Ganey) to survey their patients, and report aggregated patient satisfaction scores to them. Those scores provide a percentile rank of how that facility stacks up against others across various categories. The scores are also made public, and often influence public funding decisions within a region. Thus, they are a big deal.

Chasing the Patient Satisfaction Numbers Doesn’t Work

Here’s the problem. More than a few times I have seen an improver working on a challenge to improve these patient satisfaction numbers. It might be something like “Achieve a 70th percentile score on ___.) with a specific score that has to do with their area.

So far, that’s not a real problem. But what happens next might be.

It is very common to focus solely on the end result, without a lot of thought into the underlying things that drive that result.

Specifically, I have seen more than a couple of cases where a manager is working to directly influence how a patient (customer) will answer the questions on the survey. They parse the question, and try to determine what this word, or that word, actually means to “the patient.” The worst case was trying to introduce fairly heavy handed scripting… “Is there anything I can do for you to be more comfortable?” into every patient interaction.

I certainly can’t speak for the population of patients, but I can say that when I pick up on a scripted phrase, I become very aware of what it is, and it leaves a disingenuous taste.

It’s About the Patient Experience

The patients’ experience is what drives how (and even if) they will answer the questions on these surveys. If their experience was overall favorable, they will be biased to give favorable replies. The opposite is even more true. One bad experience will negatively bias all of their answers.

Here’s the question I ask that sometimes stumps people:

What experience to you want the patient to have?

(If you aren’t in health care, substitute the word “customer” for “patient.”)

If your scores on “Were the staff concerned for my comfort?” are low, think about what experience would give the patient confidence that staff were concerned. Being continuously asked about it with a rote phrase probably isn’t going to do it. But leaving them parked in the hallways with no interaction might be (for example), something that creates discomfort.  (“Comfort” has a psychological, as well as a physical component.) People will put up with a lot of discomfort if they know the higher purpose. It’s hard to make the case for parking the patient in the hallway. That just says “I don’t have anywhere to take you.”

So think deliberately. If everything the patient experienced were something you were doing on purpose, because it contributed to the experience you want the patient to have, what would that look like?

Don’t worry right now about whether that is hard or not. Let go of your internal issues for a while. Just sketch out that awesome “insanely great” patient experience. You don’t have to think of every detail. What are the attributes? What is the flow, from the patient’s perspective – the sequence of events they will experience.

For example, construct a story, told from the patient’s point of view, of coming in for outpatient surgery.

What happens from the time they have their initial consultation until they are on their way home. (And what happens after they get home?) Again, don’t worry about “we can’t do that because…” stuff, we’ll deal with that later.

What experience, what story, would leave the patient with the impression that you are working as a team, that you know what you are doing, that there is a competent process at work to provide safe, effective care and actually care about their experience?

Don’t forget to include your administrative communications in this process – what phone calls do they get? What paperwork do they get? What does crystal-clear billing look like?

Build a block diagram, a story board, of the patients’ ideal flow through the system.

What would a wait-free, smooth flowing experience look like?

Learning From Disney

In Disney theme parks, they make a clear distinction between “On Stage” and “Off Stage.” Their employees (all of them) are referred to as “Cast Members.” Anytime a Cast Member is visible to guests, they are “On Stage.” They are performing. They are part of creating the story, the experience, they want the guest to have.

Meanwhile, behind the scenes, in the tunnels, off stage, are the processes required to create the “On Stage” performance. It’s a show.

The guest experience is designed. Once it is designed, it is created by the process.

Disney’s priorities (in order) are:

  • Safety
  • Courtesy
  • Show
  • Efficiency

Translated, they place putting an a good performance above being efficient. But if pushed, a cast member may break character if required to be courteous. And they will get snippy with someone who persists in doing something unsafe in spite of courteous requests.

What on Earth does this have to do with health care?

Everything. That is if you are trying to create a safe, professional and competent impression to your patients.

What is the Actual Patient Experience?

Now we have a sense of the ideal, it’s time to understand what is really happening. Again, start with the patient’s experience.

What happens at each interaction? What questions are asked? Who asks them? How often are they moved? Where and when are they waiting, and why? 

Use “typical” rather than exceptional cases here. One thing I am seeing is, yes, every case is different but in reality, most are handled within a routine.

Pay attention to the “on stage” part of your process. This is what the patient sees, and what creates their experience.

At the same time, look at the behind-the-scenes “off stage” flow to see what might be causing a less-than-ideal patient flow. For example – The patient’s experience is that he is alone in an exam room waiting, reading Time Magazine for 20 minutes. That is the “on stage” part.

Meanwhile, “back stage” you have a nurse on the phone trying to get the results of tests that were done by another provider. (This is a real-life example.)* (There was also a physician waiting on them!)

Your Processes Create the Patient Experience

(Again, substitute “customer” for “patient” and this becomes an essay for everyone.)

Your Patient Satisfaction scores are driven by the patients’ experience.

The patients’ experience is established by your “on-stage” (patient facing) process.

Your “on-stage” process is the result of your “off-stage” execution.

The people making the improvements need to be challenged, and focused on, creating a specific experience for the patient.

Linking to Policy Deployment

All of that begs the question: Who should make the linkage between process performance and patient satisfaction, because those scores do matter, in a very big way.

Let’s look at this from a policy deployment standpoint.

Certainly Administration (the executives) should be tracking their scores. From their perspective, these are an important (along with patient safety, quality, length-of-stay, financial performance, etc) aspects of how the organization is performing.

They see the overall performance and trends. And they can see how each department is performing.

But the patient’s experience is cross-functional. The patient only sees “the hospital.” He doesn’t see, and doesn’t care, that Admissions, the lab, the Emergency Department, Outpatient Surgery, Environmental Services (who cleans his room) and Radiology are all different departments. The patient doesn’t see, and doesn’t care, that “the clinic” and “the hospital” are separate legal entities.

As part of Policy Deployment, Administration should be establishing operational standards and challenging the Department Directors to meet them. Those standards are based on what Administration believes will move the needle on the patient satisfaction scores. In reality, this is also an experiment. Does this operational standard meet our customer’s expectations?

They also are making sure the Directors are working on the cross-functional interfaces between their departments. (If it isn’t the Directors’ job to do this, whose job is it?)

Key Point: Until you are consistently delivering the product or service, there is little point in trying to change things up. Set a standard, strive to meet it. Once things are somewhat stable, then you can evaluate whether your standard is adequate or not. Think about it… what is the alternative? You have random execution that is randomly working. You don’t know why. You can’t talk to people about performance until they can demonstrate consistent execution.

Summary

Your patient satisfaction scores reflect the experience of the patient.

The patient experience is the outcome of your on stage process performance.

Your on stage process performance is ultimately driven by your back stage process execution.

If you want to improve your patient satisfaction scores, establish the operational standard you want to strive for that you think will improve patient satisfaction.

Then strive to develop a process that meets that operational standard.

THEN you can evaluate whether your process is adequate.

_________

*This was an obstacle in front of a target condition focusing on hitting a standard for “In, Seen and Out” within a specific time frame for routine pre-procedure consultations. They fixed it. Patients no longer have to sit and wait while someone hunts down those test results.

Using Takt Time to Compute Labor Cost

How can I use takt time in computing labor cost?

Sometimes the searches that lead here give us interesting questions.

While simple on the surface, this question takes us in all kinds of interesting directions.

Actually the simplest answer is this: You can’t. Not from takt time alone.

Takt Time

Takt time is an expression of your customer’s requirement, leveled over the time you are producing the product or service. It says nothing about your ability to meet that requirement, nor does it say anything about the people, space or equipment required to do it.

Cycle Time

Cycle time comes in many flavors, but ultimately it tells you how much time – people time, equipment time, transportation time – is required for one unit of production.

Takt time and cycle time together can help you determine the required capacity to meet the customer’s demand, however they don’t give you the entire story.

In the simplest scenario, we have a leveled production line with nothing but manual operations (or the machine operations are trivially short compared to the takt time).

If I were to measure the time required for each person on the line to perform their work on one unit of the product or service and add them up, then I have the total work required. This should be close to the time it would take one person to do the job from beginning to end.

Let’s say it takes 360 minutes of work to assemble the product.

If the takt time says I need a unit of output every 36 minutes, then I can do some simple math.

How long do I have to complete the next unit?  36 minutes. (the takt time)

How long does it take to complete one full unit?  360 minutes (the total manual cycle time)

(How long does it take) / (How long do I have) = how many people you need

360 minutes of total cycle time / 36 minutes takt time = 10 people.

But this isn’t your labor cost because that assumes the work can be perfectly balanced, and everything goes perfectly smoothly. Show me a factory like that… anywhere. They don’t exist.

So you need a bit more.

Planned Cycle Time (a.k.a. Operational Takt Time and “Actual Takt”)

How much more? That requires really understanding the sources of variation in your process. The more variation there is, the more extra people (and other stuff) you will need to absorb it.

If we don’t know, we can start (for experimental purposes) by planning to run the line about 15% faster than the takt time. Now we get a new calculation.

85% of the takt time = 0.85 x 36 minutes = ~31 minutes.  (I am rounding)

Now we re-calculate the people required with the new number:

360 minutes required / 31 minutes available = 11.6 people which rounds to 12 people.

Those two extra people are the cost of uncontrolled variation. You need them to ensure you actually complete the required number of units every day.

“But that cost is too high.”

Getting to Cost

12 people is the result of math, simple division that any 3rd grader can do. If you don’t like the answer, there are two possible solutions.

  1. Decide that 360 / 30 = something other than 11.6 (12). (or don’t do the math at all and just “decide” how many people are “appropriate” – perhaps based on some kind of load factor. This, in fact, is a pretty common approach. Unfortunately, it doesn’t work very well for some reason.
  2. Work to improve your process and reduce the cycle time or the variation.

Some people suggest slowing down the process, but this doesn’t change your labor cost per unit. It only alters your output. It still requires 360 minutes of work to do one unit of assembly (plus the variation). Actually, unless you slow down by an increment of the cycle time, it will increase your labor cost per unit because you have to round up to get the people you actually need, and/or work overtime to make up the production shortfall that the variation is causing.

So, realistically, we have to look at option #2 above.

This becomes a challenge – a reason to work on improving the process.

Really Getting to Cost

Challenge: We need to get this output with 10 people.

Now we have something we can work with. We can do some more simple math and determine a couple of levers we can pull.

We can reverse the equation and solve for the target cycle time:

10 people x 30 minute planned cycle time-per-unit = 300 minutes total cycle time.

Thus, if we can get the total cycle time down to 300 minutes from 360, then the math suggests we can do this with 10 people:

300 minutes required / 30 minutes planned cycle time = 10 people.

But maybe we can work on the variation as well. Remember, we added a 15% pad by reducing the customer takt time of 36 minutes to a planned cycle time (or operational takt time, same thing, different words) of 30 minutes. Question: What sources of instability can we reduce so we can use a planned cycle time of 33 minutes rather than 30?

Then (after we reduce the variation) we can slow down the process a bit, and we could get by with a smaller reduction in the total cycle time:

330 minutes required / 33 minutes planned cycle time = 10 people.

(See how this is different than just slowing it down? If you don’t do anything about the variation first, all you are doing is kicking in overtime or shorting production.)

So which way to go?

We don’t know.

First we need to really study the current process and understand why it takes 360 minutes, and where the variation is coming from. Likely some other alternatives will show themselves when we do that.

Then we can take that information, and establish an initial target condition, and get to work.

Summarizing:

  • You can’t use takt time alone to determine your labor cost. Your labor cost per unit is driven by the total manual cycle time and the process variation.
  • With that information, you can determine the total labor you need on the line with the takt time.
  • None of this should be considered an unalterable given. Rather, it should be a starting point for meeting the challenge.

And finally, if you just use this to reduce your total headcount in your operation, you will, at best, only see a fraction of the “savings” show up on your bottom line. You need to take a holistic approach and use these tools to grow your business rather than cut your costs. That is, in reality, the only way they actually reach anywhere near their potential.

 

 

 

Toyota Kata: Is That Really an Obstacle?

“What obstacles do you think are preventing you from reaching the target condition?”

When the coach asks that question, she is curious about what the learner / improver believes are the unresolved issues, sources of variation, problems, etc. that are preventing the process from operating routinely the way it should (as defined by the target condition).

I often see things like “training” or worse, a statement that simply says we aren’t operating the way the target says.

Here is a test I have started applying.

Complete this sentence:

“We can’t (describe the target process) because ________.”

Following the word “because,” read the obstacle verbatim. Read exactly what it says on the obstacle parking lot. Word for word.

If that does not make a grammatically coherent statement that makes sense, then the obstacle probably needs to be more specific.

 

 

Toyota Kata: Don’t Change The Target Condition Date

A target condition has three main elements:

  • An achieve-by date.
  • A level of performance that will be achieved.
  • The operational process that will be in place.

The details of the #2 and #3 can take a number of forms, but today I want to talk about the achieve-by date.

Keep the time horizon fairly short, especially at first. For a typical process that is carried out every day, I usually suggest a two week time horizon. My rationale is this: I don’t want the target condition to seem big or complex. Two weeks is enough time to understand and significantly improve a handful of steps in a complex process. It is a short enough time to keep the improver from trying to fix a complex or global issue all at once.

For example, if a process is carried out in multiple departments, two weeks is enough to try experiments in one of them, but not enough to implement a change across the whole organization. Having that time horizon helps establish the principle of small, quick, steps rather than trying to develop some kind of implementation plan.

It is important to set an actual date, not just “in two weeks” – in two weeks from when?

But here is the most important part: Once the date is set, don’t change it.

If the date comes up, and the target condition hasn’t been reached, it is very tempting to say “Just a few more days.” But once a date is slipped, the date means nothing, because it can be slipped again.

Instead, missing the date is time to step back, reflect, and go back through the steps of the improvement kata.

This is the same thing you should do when you hit your target condition.

If you hit your target way early, or miss the date, it is also time to reflect on what you didn’t understand about your current condition when you established that target. Then:

  • Confirm understanding of the direction and challenge.
  • Grasp the current condition. This is important. Don’t just assume you know what it is. Take the time to do some observations and confirm everything is working the way you think.
  • Establish the next target condition. This means erasing the old target condition, starting with a clean obstacle sheet, looking at the current condition and establishing a new target condition. I would discourage you from simply re-stating the old one. List the obstacles that you think are now preventing you from reaching the new target.
  • Pick one obstacle (an easy one, not the one you were beating your head on for the last two weeks!), and design your next experiment. Start your PDCA iteration.

Coaches: Don’t let your learner just adjust the date. There is a learning opportunity here, be sure to capitalize on it.

 

Notes and Thoughts from KataCon 2

The 2016 Toyota Kata Summit developed some interesting themes.

Even though the keynote addresses were not coordinated, one message emerged across them all.

This is about leadership development.

And by that, I don’t mean it is about further developing those in leadership positions. I mean it is about developing good thinking and leadership skills in everyone who chooses to deliberately learn. The “kata” are a structure for that learning, but learning the kata themselves is not the goal. It is a means to the end.

I know I have said this before, but now I see the beginning of a shift in the larger community, away from “kata as a problem solving tool” and toward “kata as a practice routine” for something bigger than the kata themselves.

Some Quotes and Themes

Improvement cannot be separate from management.

– Amy Mervak

This may well seem obvious. But in the vast majority of organizations, improvement is the job of the Continuous Improvement Department, or the Quality Department, or some other staff department.

If they are working on developing the improvement skills of line management, then all well and good. But if they are working directly on making improvements, then that is the problem at the root of “lack of leadership engagement.”

Intentional practice results in intentional learning.

– Amy Mervak

Put another way, without intentional practice, learning is a matter of luck. If you want your organization to actually learn a new behavior, then people and teams have to deliberately practice it until it is a habit.

What differentiates excellent organizations from their competitors is effective execution of strategy.

– Mike Rother

There is no shortage of effective models. But those models all require shifts in how people respond, especially under stress, to the unexpected.

Even in the best of times,

We want to learn something new, but we habitually follow our [existing] routines.

– Mike Rother

Our brains, and therefore we, are hard-wired to do this. And “under stress” is not the time to try to learn a new response. It has to be practiced in a space where it is safe to screw it up and learn.

This actually goes pretty deep. I have worked with a few organizations, and one in particular, where everyone adamantly agrees what changes must be made. But they don’t take active steps to get there.

Which brings us to:

40 priorities = No priorities.

Strategic priorities must be focused and formally expressed.

– Amy Mervak

It doesn’t do any good to have a Grand Vision if it is vague, or so diluted that Everything Is Important. Your job (management) is to be clear so people don’t waste their time working hard on something that doesn’t make a difference.

Although he was not present, Bill Costantino was quoted:

A long discussion is a symptom of lack of clarity on the current condition or the challenge.

– Bill Costantino

In other words, “What are we trying to accomplish here, and where are we now?” never get asked or clarified.

On Culture Change Modification

An interesting point was made about culture. Yes, we are working to shift the culture of the organization. But “change” may imply that we are changing everything. In reality, we have to consider:

  • What are we choosing to keep, maintain, enhance?
  • What are we choosing to alter?
  • What are we choosing to let go?

If these are deliberate decisions made by the team, then there is an opportunity to make purposeful adjustments, and frame them in the context of “What are we striving for?”

So perhaps the term “culture modification” is more appropriate.

Dave Kilgore’s presentation (full disclosure: I nominated Dave as a keynote) highlighted an organizational culture as the challenge for his advance team.

image

And because they are focused on creating this culture, they are making tangible progress.

Brad Frank asked the audience an interesting question.

If someone brings you a problem, there are two problems. What is the second one?

-Brad Frank

I have alluded to this in previous posts. As a leader, you have to ask “Why was my organization unable to make the correct decision without coming to me?”

Every time someone has to come and ask you something, it means you are an obstacle to their success.

– Brad Frank

Dave Kilgore emphasized the same thing and uses David Marquet’s “Ladder of Leadership” model both as a way to advance the culture, as well as a way to assess the current condition by listening to people.

I wanted to get these notes up there. I’ll cover Day 2 in another post.

Countdown to KataCon

The 2nd Toyota Kata summit is February 18-19 in Fort Lauderdale, and I plan to be there.

imageThis year looks to be more of a cross-section of people and companies that are working on their own versions of the culture shift. There isn’t “one way” and it looks like the keynotes reflect that.

I have a little insight into one of those presentations – Dave Kilgore of Continental Automotive in Newport News, VA. When the community was asked to nominate prospective keynote presenters last fall, I was quick to get Dave’s name up there because I think he has a compelling story. He knows what worked, and didn’t work, for his site and why.

 

  • They’ve tried this more than once, and kept trying. This time it is working. He’ll talk about what they learned in the process.
  • They are focusing on the culture of the organization.
  • He talks about the journey of organizing his advance team, what they do, and why they do it.
  • And they have developed a pretty cool “kata” for coaching coaches that is simple and effective.

The other thing I can say is that the conference organizers are also learning. This won’t be a clone of least year. They are working hard to make sure you are getting a diverse set of speakers with compelling messages. Each speaker has a senior / experienced member of the community to give feedback as they develop their presentation. You are unlikely to see a raw unpolished PowerPoint dump.

And finally, I would love to meet you if you are reading my stuff here. So let me know if you are planning on attending!

And if you are THINKING about attending, but haven’t registered yet, here is the web site: http://katasummit.com/

Mark

Toyota Kata and Hoshin Kanri

Jeff asked an interesting question in a comment to the post Often Skipped: Understand the Challenge and Direction:

[Hoshin Kanri] seems to suggest I reach long term objectives (vision) through short term initiatives/projects as if I can (should?) know the steps. [Toyota Kata] says I don’t know the way to reach my long term vision, so I limit focus to next target condition and experiment (repeatedly) toward the vision.

Seems contradictory to me. What am I missing?

Let’s start out with digging into what hoshin kanri is supposed to do. I say “supposed to do” because there are a lot of activities that are called “hoshin kanri” that are really just performance objectives or wish lists.

First, hoshin kanri is a Japanese term for a Japanese-developed process. We westerners need to understand that Japanese culture generally places a high value on harmony and harmonious action. Where many Americans (I can’t speak for Europeans as well) may well be comfortable with constant advocacy and debate about what should be worked on, that kind of discussion can be unsettling for a Japanese management team.

Thus, I believe the original purpose of hoshin kanri was to provide a mechanism for reaching consensus and alignment within a large, complex organization.

In the late 1980’s and early 1990’s, hoshin kanri concepts emerged out of their Japanese incubator and came to western business. In this process, the DNA combined and merged with western management practices, and in many (never say “all”) western interpretations, the hoshin plan tends to be something patched onto the existing Management By Objectives framework.

That, in and of itself, isn’t a bad thing. Hoshin kanri’s origins are from MBO migrating to Japan where they took MBO and mixed in Japanese cultural DNA.

However, I’m not comfortable that what we have ended up with in the west meets the original concept or intent.

With that as background, let’s get to the core of Jeff’s question.

What is the purpose of hoshin kanri?

Let’s start with chaos. “We want continuous improvement.”

In other words, “go find stuff to improve,” and maybe report back on what you are going to work on. A lot of organizations do something like this. They provide general guidance (if they even do that), and then maybe have the sub-organization come tell and report what they expect to accomplish. I have experienced this first hand.

“I expect my people to be working on continuous improvement,” says the executive from behind his desk in the corner office. Since he has delegated the task, his job is to “support his empowered workforce” to make things better.

image_thumb.pngFlatly, that doesn’t work unless the culture is extremely well aligned and there is a
continuous conversation and stream of consciousness within the organization
. That is very rare. How to achieve that alignment is the problem hoshin kanri is intended to solve. It isn’t the only way to do it, but it is an effective method.*

A Superficial Overview of the Process of Hoshin Kanri

The leadership sees or sets a challenge for the organization – something they must be able to do that, today, they cannot. This is not (in my opinion) the same as “creating a crisis.” A crisis just scares people. Fear is not a good motivator for creative improvement.

Different parts of the organization may get a piece of the challenge, or the leadership team may, as a whole, work to figure out what they need to accomplish. Here is an important distinction: “What must be accomplished” is not the same as a plan to accomplish it. A challenge, by its very nature, means “We don’t know exactly what we will have to do to get there.”

This can take the form of KPI targets, but that is not what you are doing if there is a simple percent improvement expected with no over-arching rationale.

Now comes the catchball.

Catchball is not Negotiation of the Goal

Catchball is often interpreted as negotiating the goals. That’s not it. The goals are established by a market or competitive or other compelling need. So it isn’t “We need to improve yield by 7%.” followed by “Well, reasonably, I can only give you 5%.” It doesn’t work like that.

Nor is it “You need to improve your yield by 7%, and if you don’t get it then no bonus for you.” That approach is well known to drive some unproductive or ineffective behavior.

And it isn’t “You’re going to improve your yield by 7% and this is what you are going to do to get there.”

Instead, the conversation might sound something like “We need to improve our yield by 7% to enable our expected market growth. Please study your processes as they relate to yield, and come back and let me know what you think you need to work on as the first major step in that direction.”

In other words, please grasp your current condition, and come back with your next target condition.

That sounds a lot like the Coaching Kata to me.

SIDEBAR:

Toyota Kata is not a problem solving method. 

Toyota Kata is a set of practice routines designed to help you learn the thinking pattern that enables an organization to do hoshin kanri, and any other type of systematic improvement that is navigating through “We want to get there, but aren’t sure exactly how.”

An executive I am working with mentioned today that Toyota Kata is what is informing their policy deployment process. Without that foundation of thinking, their policy deployment would have been an exercise in assigning action items and negotiating the goals.

So what is the difference between hoshin kanri and Toyota Kata?

There isn’t a difference. They are two parts of the same thing. Hoshin kanri is a mechanism for aligning the organization’s efforts to focus on a challenge (or a few challenges).

Toyota Kata is a practice routine for learning the thinking pattern that makes hoshin kanri (or policy deployment) function as intended.

In hoshin planning, you are planning the destination, and perhaps breaking down individual efforts to get there, but nothing says you already know how to get there.

It isn’t an “action plan” and it isn’t a list of discrete, known action items. Rather, it is specific about what you must accomplish, and if you accomplish those things, then the results are predicted to add up to what you need.

What to Do vs How to Get It Done

At some point, someone has to figure out how to make the process do what is required. That has to happen down at the interface between people and the work actually being done. It can’t be mandated from above. Hoshin helps to align the efforts of improving the work with the improvements required to meet the organization’s challenge.

From the other side, the Improvement Kata is not about short-term objectives. The first step is “understand the challenge and direction.” Part of the coach’s job is to make sure this understanding takes place, and to ensure that the short-term target condition is moving in the direction of the challenge.

We set shorter term target conditions so we aren’t overwhelmed trying to fix everything at once, and to have a stable anchor for the next step. It enables safer learning by limiting the impact of learning that something didn’t work.

However, in Toyota Kata, while we might not know exactly how to get there, but we are absolutely clear where we have to end up.

The American Football analogy works well here. The challenge is “Score a touchdown.” But if you tried to score a touchdown on every play, you would likely lose the game. The target condition is akin to “get a first down.” You are absolutely clear what direction you have to move the ball, and absolutely clear where you need to end up in order to score. But you aren’t clear about the precise steps that are going to get you there. You have to figure that out as you go.

Hoshin Kanri focuses the effort – “What to work on.”

Toyota Kata teaches the thinking behind “How to work on it.”


*Though hoshin kanri may be effective, getting it to work effectively is a journey of learning that requires perseverance. It is much more than filling out a set of forms.

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