The Lean Manager: Part 1 – Customers First

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I just started reading this book, and my initial feeling is that it is a winner. Rather than producing a batch review of the whole thing at the end, I thought I would employ “one chapter flow” and share my impressions with you as they are formed. As I write this, I honestly do not know where it is ultimately going.

I am excited about this book because it is challenging the decades-old paradigm of kaizen events run by specialists (while simultaneously trying to justify the change activity to the people who hired them in the first place). In its place is a leader who knows what he is doing, and appears to be starting to lead by asking tough questions.

Even with that initial endorsement, this book appears to be following the standard formula established by Eli Goldratt in The Goal.

  • Manager finds out factory is being closed. News is devastating to his personal life.
  • The Jonah character emerges and teaches him how to save the operation.
  • He applies what he learns and saves the day.

While there is nothing wrong with this structure, it is wearing a bit thin, at least to me. So I hope that the authors are going to find an interesting twist that surprises me. Still, because this is a novel with a point, vs. an attempt at classic literature, I’m not going to spend much time on the literary style.

The two main characters (so far) are Andrew Ward, the manager who finds out his plant is being closed, and Phil Jenkinson, the new CEO, with the double role of bringing the bad news (closing the plant) as well as filling the role of the Jonah (or sensei in this case, I suppose).

In the opening chapter, Jenkinson’s style is authoritative, bordering on confrontational. Without knowing the culture of this fictitious company, I can’t say whether his blunt, direct approach is from necessity or because he simply doesn’t have the skills to ask tough questions without pushing people back. I’ll hold judgment on that part. My hope is that the book doesn’t teach this approach as how it has to be done, because in my experience, it doesn’t have to work that way.

The message, though, is crystal clear. The old way isn’t cutting it. Leaders, not staff, are responsible for results (safety, quality, delivery, cost). Leaders are expected to know the hot spots in their operations. Leaders are expected to be involved in the details – not to micro manage, but to develop the capabilities of others. (That last one is a bit of an extrapolation on my part.) “Lean” is not a program, not projects run by a staff of specialists, it is how we will manage the company.

The notable quote from this chapter comes in a shop floor lecture given by Jenkensin and nicely sums up the relationship between process and results.

Results… are the outcome of a process. What we want are good results from a controlled process because they will be repeatable. Bad results from an uncontrolled process simply mean that we’re not doing our job. Good results from an uncontrolled process…only mean we’re lucky. Today, bad results from a controlled process just says that we’re stupid: We expect different results from doing the same thing over again.”

Based on that, I sketched out this little matrix that captured my response and the key points.

process vs results

But the technical nuances aside, this story is clearly developing into one about leadership. The key issues, so far, are:

  • Safety, quality, delivery, cost, are line leaders’ responsiblity, with assistance from technical staff – who are also experts.
  • Though it is certainly a culture shock, the leader is teaching by asking questions.
  • The various character’s reaction to the confrontive authoritative style is predictable. I am uneasy, at this point, with that approach being held up as an example of the best way to get this done. But it is only Chapter 1.


First: Define Value

A couple of days ago, in “The First Steps of The Lean Journey,” I said that there really is no first step, only the next step from where ever you are right now.

I admit that I left out a big assumption there – that you know where you are trying to go.

More specifically, that you really know the value you create.

Bas Mathijsen has posed the question here on The Whiteboard, as well as in a post in the LEI Forums where asks (paraphrasing) “Who defines customer value?” and “What is customer value?”

Good questions, and we don’t spend enough time there.
I have seen a lot of “improvement” effort dissipated because there was no clear idea of what the process was supposed to actually deliver.

As obvious as it seems, customer value is defined by no one but the customer. The transaction need not be monetary, or even commercial. A volunteer for a non-profit organization gives up time (and possibly money) and gets something in exchange. Usually that is some level of emotional satisfaction. A nonprofit that needs to attract volunteers needs to be conscious of this.

Since it is subjective, different customers are going to define “value” in different ways. Dan Sullivan once put it really well with this analogy (paraphrasing):

My neighbor has a really nice lawn. When he buys a lawnmower, he is interested in features like evenly cutting, ease of starting, how well it manages the clippings. But maybe I am looking for different things in a lawnmower. Maybe I hate mowing the lawn. I might be looking for a lawnmower that cuts the grass just below the roots.

Clearly these customers define “value” in different ways.

The other factor to keep in mind is that this isn’t a black-and-white thing. The value the customer finds in your product or service can be enhanced or diminished by an almost infinite matrix of circumstances. These include the magnitude of the (customer’s) problem you are solving, the degree of emotional satisfaction that is gained from your product or service, how easy (or aggravating) your sales and customer support processes are, the customer’s perception of your quality and a host of other intangibles. All of these translate into what (if anything!) the customer is willing to part with to get your product or service. Indeed, we have all heard of things that couldn’t be given away, or that had negative value.

The only real way to know what the customer truly values is to be the customer. This great little piece by Dan Markovitz on Evolving Excellence clearly shows how not to do it. Read the article, then do the opposite.

So, the customer defines what is valuable to him. What does the company do?

The company has to take their best information about customer value and translate it into specifications for the product and service they are going to provide. QFD is one formal way (though not the only way) to do this. Ultimately that becomes the product design. It is now up to production to actually deliver it at the target cost.

All well and good. Where this comes apart is (as always) at the seams.

Marketing and engineering “know best” and provide the “voice of the customer” when the customer actually isn’t even in the room.

The product may be specified, but the details aren’t worked through. There is only the most casual system to ensure that what is specified is actually what is built and delivered. Do you have a specified go/no-go outcome defined for each intermediate step in your process? Does that go beyond the product, and into the conditions required for success?

Delivery dates are given in terms of a range of time. In the USA the “cable guy” is famous for telling you he’ll be there between 9:00am and 4:00pm. We all laugh at how aggravating that is. But then think nothing of quoting “4-8 weeks” for a delivery window. WHEN is it supposed to be there?

Is your product support “leave it on the doorstep and run?” Do you follow-up with the customers and see what is, and is not, meeting their expectations? Do you solicit complaints (not simply collect them)?

All of these actions (or lack of them) will diminish your customer’s perception of value. Reputation and brand can carry past some transgressions, especially if there is really good follow-up. But even a 100 year old brand can be damaged, and the company is likely the last to know (not for want of clear signals).

The first step is “define value” but, to be clear, that means understanding what each and every step is doing to provide value to the next step in a long chain that both begins, and ends, with the customer.

What Is The Customer Really Buying?

Background: Frank’s still-under-warranty freezer stopped working. The service tech decided it would be repaired, ordered a new compressor and said “See you when the part gets here next week.” Frank and his wife, about to lose a freezer full of food, are not happy with the with this level of service, call “Customer Care” and are basically told that the repair will run its course.

The question posed at the end of follow-up #1 was:

“What, exactly, did the customer want here?”

I asked that question because occasionally it is good to think about not only the product we make or service we deliver, but to reflect a bit on exactly what value the customer receives from that product or service. Sometimes we confuse the technology we apply to get something done with what we are really trying to do.

Let’s look at Frank’s case. If, instead of Bellevue, Washington in July the freezer had broken down in Grand Rapids, Minnesota last December, this would not have been an issue at all. Take the food out of the freezer and set it on the porch where it was actually colder than in the freezer.

What the customer is buying is not a freezer, but an environment that keeps food from spoiling. Any environment that accomplishes that purpose will work. With our current technology, freezing the food by placing it in an insulated box with a vapor-compression heat pump attached is the best way to do that. But it isn’t the only way.

What upset Frank, and his wife, was not so much that it would take a week to fix the freezer, but that their food would spoil in the meantime. Any solution that solved that problem would have worked for them.

What, exactly, does the customer find valuable?

You press the button, We do the rest.

Sometimes the product or service simply helps the customer create, or recreate, an emotion. George Eastman “got that” and grew an empire from that idea by making photography simple enough for anyone to do. Prior to that, amateur photographers had to mess with mixing their own chemicals, glass plates, their own processing, and persevering to actually get a photograph. The value came from the technical accomplishment as much as the image itself. But that didn’t work for families that just wanted to remember an occasion, and share it with their friends. Kodak changed all of that forever. But their way wasn’t the only way, and a few years ago, a better way emerged. It wasn’t about the technology, it was about sharing the memories.

I have spent a lot of time in the construction equipment business. I recall a senior manager making a pretty insightful comment. “The only part of the crane that the customer cares about is the hook. Everything else just makes it work.”

Most construction equipment is actually is capital equipment for the customer’s business. The owner-operator of an excavator is selling a service: The customer has dirt where he wants a hole. The excavator is a tool that can fix that problem. The owner-operator needs to be able to deliver the service at a price his customer is willing to pay and still be able to make a profit. That fact, in turn, sets the prices for the equipment.

But it is important for the seller of that equipment to remember that, to his customer, it isn’t an excavator so much as a business. The seller that thinks “How can I help my customer provide better service to his customers?” rather than “I sell decent hardware at a fair price” has an opportunity to think of things beyond the hardware itself.

Look at your own operation. What value do you provide to your customers? Not just the product itself. What is the problem the customer can solve, or what is the source of pleasure he gains from your product or service? How would (or could) the customer solve the same problem, or gain the same benefit, without your product or service?

What is your customer really buying?   What business are you really in?

Is This a Problem – Part 2

Last week I posted a story of a failed freezer, ruined food, and a customer support experience that could be summed up as “That’s how we do it.” I invited comments and asked:

“Is this a problem?”

And when I say “problem” I mean, is this a “problem” from the standpoint of the company’s internal process?

There are some interesting comments, some about the internal culture of the company, others about the support process itself.

But I promised to offer my thoughts, so here they are.

The key question is “What did they intend to happen?” While we can speculate, unless we have the process documentation or are otherwise privy to that internal information, we really don’t know what they intended in this case.

Let’s assume, for the sake of argument, that Frank’s experience was exactly as the company intended it to be. Then, from the point of view of their internal process, there is no problem.

“Wait a minute!” I can hear, “Nobody wants  a customer to never buy the product again.”

And here is my point. We don’t know. This company may be perfectly willing to accept that consequence, i.e. “fire the customer” to preserve their warranty cost structure. They certainly would not be the first. Whether that is good business or not is a totally separate issue. The question is “Did they produce this result on purpose, as a logical, foreseeable outcome of the process as they designed it?.” If the answer is “Yes, they did” (and only they can know), then there is no problem. It might be bad business, but the process is working just fine. (I acknowledge that “bad business practices” can result in unintended results – like bankruptcy. But my point is the results are the outcome of a process, and the process is the result of a decision, even if that decision was to “not care.”)

The key point here is that only after there is clarity of what should happen, can the process itself even be addressed. Until the intended result is clear, then there is no way to see if the process works or not.

Was there a problem here? I don’t know. But this is what I would like people to take away from this little story.

Whenever something in your company seems “not right” ask this really powerful clarifying question:

“Did (or would) we do this on purpose?
If the answer is anything other than an unqualified yes then it is likely you have a problem.

Here is a tougher position: If something was unpleasant for your customer, and you don’t intend to fix it, then embrace the truth that you did do it on purpose. Take responsibility for your decisions, look in the mirror, and say “We meant to do it exactly that way, and will do it the same way next time.” If you can’t stomach that, then go back the the first question.

Here is an extra credit question for this little case study in customer support.
What, exactly, did the customer want here?

Is this a “problem?”

This morning I got an email from a friend that recounts a (still ongoing) story of a failed freezer.

We arrived home Tuesday from a week away to find the “extra” freezer in the garage totally kaput…..much of the stuff inside already ruined but some still partially frozen. It’s only 4 years old and within warranty, so [we] go on line and schedule an appointment with GE service for the next day, and spend hours sorting what [food] might be savable, getting bags of ice to try and bridge the time until (you would assume) they will exchange this unit with a new one. Tech comes out the next day, announces that the compressor is fried, and that he’ll order the part and see you in a week to install.

Needless to say, the customer is not exactly happy here. What could be saved now cannot. When they elevate the problem to “Customer Care” on the phone, the answer is basically holding the line to the warranty terms which give the company the option of replacing or repairing the unit.

Aside from speculation that the response would be different if this had been a commercial unit for a large corporate customer, this story brings up some interesting issues.

Clearly the company here is well within their agreement with the customer. That is (apparently) spelled out in black and white in the warranty, all approved by the legal department. And repair of the unit is the logical economic choice for the company.

But equally clearly, the customer here is not happy with the response.

All of my protestations about how an exchange unit shipped from their warehouse in Kent today would allow my wife to save her food falls on deaf ears. Not even a transfer to a “supervisor” for exception resolution could be arranged. If you don’t like it, tough luck..not buy another GE product? “hey, your choice” hard to believe!

And a customer with a technical problem has likely been turned into a customer for the competition.

So here is the question.

“Is this a problem?”

And when I say “problem” I mean, is this a “problem” from the standpoint of the company’s internal process?

I have my thoughts, and I’ll share them in a day or so. But I’d like to hear what you think.

Queue Management

Although my experience of late has been with a particular “red tail” airline (soon, I hear to be part of the “triangle” airline..), this applies to any service counter.

I fly a lot. As such, I find myself in front of the Sea-Tac airline counter a lot. So much that I recognize most of the people working there. Not so much that they recognize me, but then, I haven’t made a pain of myself either.

Because I fly a lot, I have accumulated the privilege of checking in with the first and business class folks, even if I am in one of the cheap seats, rather than dealing with the little kiosks then waiting for my luggage tag to print out somewhere and hoping that, in the chaos, my luggage tag actually ends up on my luggage. (Another story.. but, take my advice – learn the airport code of where you are going and physically check before your bag goes down the conveyor!)

Anyway, twice in a row now I have been waiting patiently as the single person who is supposed to be providing personal service to the best customers is dealing for a dozen+ minutes trying to re-ticket someone who has had a problem.

I certainly sympathize with the people being re-ticketed, been there, done that, but the question I have is this: Do they really intend for all processing of their very best customers to grind to a halt when this happens?

I would imagine that, if you asked the question of an executive somewhere, the answer would be “Of course not.” But then again, I would also imagine that their corporate executives don’t have to wait in line – even with the very best customers – to check in to their flights, so they never actually experience what their customers do.

Here is how you keep things moving in an administrative process:

  • Set a takt time – the standard time that should be suffecient to process a normal transaction.
  • Keep track of actual time.
  • When actual time hits some alarm threshold – which you get to set, perhaps 110% of takt, then trigger some kind of andon. You have an exception. Processing is now not normal.
  • When this happens, in order to maintain throughput, the exception must be processed as an exception, and the routine should resume its normal pace.

This is how you beat Goldratt’s marching Boy Scouts problem. It is also how you demonstrate to your customers that you understand the very basics of managing queues.

Interesting sidebar – the customer surveys that are available on board the aircraft don’t ask anything about the experience prior to getting into your seat.

Sidebar #2: Today we pulled away from the gate, then went to a parking space and sat for half an hour with the engines shut down. The pilot explained that there was a weather system out there, and air traffic control was increasing spacing. Even though this information was (likely) known prior to boarding, the measurement of “on time” is “pull away from the gate” not “leave the ground” so in order to get an “on time” departure, they will load the plane as scheduled, then go sit on the tarmac rather than delaying the passenger load. A great example of “management by measurement” not getting exactly the intended results.

Adventures in Airline Travel

Today I flew from my home in the Seattle area to New York’s La Guardia airport. This seems to nearly always be an adventure, but this one was unusual, so I wanted to comment on the customer’s perspective.

The flight routed through the airline’s major hub in Minneapolis (MSP) (so now you know which airline if you fly at all). No sooner than I had turned my cell phone on at the gate at MSP than it buzzed. I answered, and it was the airline’s computer talking.

I was informed that my flight from MSP to LGA had been canceled. This is never good news. I was informed that I had been re-booked on another airline (Midwest), and to contact the gate agent before going to the other airline’s counter. I was read a confirmation number, though sitting in an airline seat I really had no opportunity to write anything down, and was informed that all of the details were available on the airline’s web site – which is really no help unless I am on line in the airport. No big deal.

The gate agent is polite, lets me know that the other airline is “way over in Humphrey Terminal” and suggests another flight into Newark. “No, that’s OK, I want to go to La Guardia.”

I was much more concerned, at this point, about my luggage. Airlines, in general, do a reasonably OK job recovering from these things and getting people where they need to go. As a group, however, they don’t seem to “get” that it is important to the passengers (at least important to this passenger) that the luggage get there more or less at the same time I do.

I was cheerfully told that my luggage would be on their next flight to LGA, and I could pick it up “at my convenience.” This choice of words was interesting, it implied that I would easily just head back to the airport when my luggage got there.

One of the blind spots of all airlines is the illusion that the airport terminal is the final destination. Their job ends once they unload you there.

My only other option was to fill out a “missing luggage” claim with the secondary carrier (since they are responsible as the last airline I flew on), then they would get with the original carrier, arrange delivery to the hotel, etc. I pretty much resigned myself to having to go through that nutroll, and hoping beyond hope that it would get to the hotel overnight so I didn’t have to show up at Corporate HQ in “Seattle Casual.”

(I should relate the story of lost luggage when I had an 18 hour stay in Berlin sometime…)

Midwest Airlines flight 5 from Minneapolis to La Guardia stops in Milwaukee. When we arrived, we were informed this 30 minute stop was going to be a 2 hour stop due to “weather delays” in La Guardia. Not sure what that was about, the weather in La Guardia is beautiful tonight, but whatever. We actually got “release” after 1 hour, got on the plane, and headed east.

One thing I have to say – Midwest has a nice little niche service, and features “the most comfortable coach seating in the industry” by their claim. The seats certainly are nice, and I can’t complain about warm, gooey chocolate chip cookies either.

When I got to LGA, I thought “what the hell”, grabbed the shuttle bus and headed over to the NWA terminal to just see if they even knew where the luggage was. I arrived, was walking toward the luggage service office and there, coming out of the conveyor was my suitcase. How the hell that happened, I will never know. I picked it up, headed out of the terminal, caught the shuttle to the rental counter, waited behind the couple who could not rent a car because HE had the credit card and SHE had the driver’s license, got my car, and here I am.

Short Story: Somtimes good customer service happens purely by accident. It shouldn’t, but sometimes it does. Of course, the airline industry does a very good job of managing my expectations (i.e. keeping them low). I am always pleasantly surprised when they manage to deliver what they minimally promised.

Note To The Airlines: I try to not be one of those people who abuses the carry-on rules. If I have too much stuff, I check it. However – as a customer, it is important to me to arrive with my luggage. Sometimes that it more important than getting to the destination as soon as possible.

Think From The Customer’s Perspective

I was browsing my web email, and I saw an ad for web hosting. The ad was actually set out pretty well because I remember the two pieces of key information: Web hosting for $9.95 a month (free domain, etc.) and the prominent text on the ad: “”

Well, I suppose the ad authors can be forgiven if I didn’t click through the ad. Instead, I typed “” into my browser.

The page so prominently called out in the ad carried not even a hint that offers web hosting. And by now the ad was no longer displayed.

I typed “superpages” and “web hosting” into the search engine, and found a news article that repeated a 2005 press release. About 2/3 of the way down, it mentioned “” so I tried that.

There is a mention on that page of web hosting, but it took two more clicks to finally get a page that mentions any details. I stopped at that point.

A couple of things come to mind here.

First – take the perspective of your customer, or better, find someone who doesn’t know the details or designer’s intent of your system and have them navigate it in unexpected ways. Just how many obstacles do you throw in front of the customer who wants to buy your product? How much digging must the prospective customer do in order to get basic information?

Second – and this is much harder – take the perspective of your competitor’s customer. Go buy their product. Experience what their customers experience. Don’t rely on market surveys, go and see for yourself. (“genchi genbutsu”)

What if:

Airline executives bought tickets through their own web site, rode in coach, and checked in just like everyone else – every time, not just as an experiment. They need to be a “frequent flyer” just like the very customers they are trying to retain. What if those same airline executives had to do 50% of their travel on competitor’s airlines? In coach, waiting in the same lines as everyone else.

Do you think it would be interesting for an executive of a prominent red-tailed airline to know that the “elite” line for check-in is much slower than the regular one? Or that they mix re-booking for a canceled flight in with first-class check-in and slow the process to a crawl? What would be that airline executive’s experience if he were to wait in line and just listen to his customers talk to each other? (He would hear the complaints nobody bothers to make because they think nobody cares.)

What would that airline executive’s experience be if he sat in the seat across from the flight attendant who lets all of the customers know what a terrible place his airline is to work. (I have had this experience twice, with the same flight attendant, but I fly a lot.)

What if Ford executives were directed to buy and drive….. Toyotas, and get them serviced at their local dealer just like everyone else. Would they learn anything? Not that Toyota is perfect, certainly their U.S. dealer network is pretty much just like everyone else’s. But that Ford executive might just find a weakness to exploit. What kind of car does Alan Mullally drive? What if auto executives had to buy their cars from heavy-handed closers just like everyone else?

But all of us frequent flyers can laugh about the airlines. What about your company? Do you really know what your customers experience?

Market surveys just don’t do this. They aggregate, consolidate, take averages, and generally dull the senses to what is really happening.

Go and see for yourself.

A Quality Story

On a cloudy morning a few years ago I started my truck, turned on the headlights and noticed one of them was not working. While changing a headlight isn’t that big a deal, I needed a state safety inspection anyway, and I really didn’t want to mess around under the hood.

So I called the auto repair and tire place up the road, and arranged to come in.

When I got there, I explained that the right headlight was out. Since I knew from experience that the left one would probably fail in a few weeks, I said “Go ahead and change the left one too, and I need the state safety inspection.”

Unfortunately they only had one headlight in stock, so they couldn’t change both, I said OK and got a soda to wait.

A while later, everything was good-to-go, I drove back to work and went home that evening. The next day was sunny.

The following day, however, was cloudy again. I turned on the headlights in the garage, and the right headlight was still out. Hmmm. I took a quick look and noticed that the LEFT headlight was new. They had changed the wrong one.

When I got back to work, I called the shop, explained the issue, and they said come over and they would make it right. (Meaning they would replace the RIGHT headlight at no charge.) After handing the keys back in, the mechanic who did the work came out and tried to convince me that he had simply followed the instructions, and it wasn’t his fault.

OK — let’s break down this situation from the perspective of quality and delivery.

Starting from the end of the story, why did the mechanic feel obligated to try to convince me that I had responsibility for a mistake that the owner had already agreed to correct? What could possibly be gained by trying to make the customer feel wrong here?

Now let’s go back to the beginning.
Customer reports a headlight is out. What is the very first thing you would do? How would you confirm the problem?

Turn on the headlights and check. This takes about 10 seconds. If there was a confusing communication about the problem, this is the time to discover it.

Once the repair has been completed, how would you confirm that it worked?
Turn on the headlights and check. This would verify that the results were as intended. (What does the customer need here? Two headlights that work.)

The other item that was on the instruction was a state safety inspection. Now I am not an expert on the New York State safety inspection, but I am willing to bet at least a can of soda that it includes the headlights. So as part of that inspection, the mechanic should turn on the headlights and check.

Even if the problem had gone undetected up to this point, it should have been caught here. Obviously the “inspection” was just a paperwork drill in this case.

Of course, as the customer, I also failed to turn on the headlights and check when I picked up the vehicle. Silly me.

What is the point of all of this?

The first step of solving any problem is to understand or verify the current condition and compare it with your expectations or standard. (More about standards and expectations later.)

Once a countermeasure had been developed and put into place, the situation must be re-checked to ensure that the countermeasure worked as intended and the process or system is back to the standard condition.

Any process has some kind of intended result. In this case, the headlight repair process should result in two headlights that work. Yet the results were not verified, and the incorrect product was delivered to the customer.

So what did all of this cost?

It cost me my time.
It cost the repair place

  • Double the mechanic time.
  • A headlight +the time to go get one during business hours (because they had not replaced the one they installed on the left two days earlier).
  • Good will. (Later, when they failed to tighten the filter after an oil change, I stopped doing business there altogether. One mistake I was willing to overlook, but I was starting to see a trend developing. I also later had some extensive maintenance and repairs done on the truck, but I didn’t have them done there because I could not trust them to change a headlight or change the oil.)

By the way, I still have the truck. It is coming up on 200,000 miles and runs great.