What is your “OK Zone?”

This photo says a lot about the organization. For those of you who might not come from an industrial background, the big red button on this podium is the E-Stop – the Emergency Stop button that shuts down EVERYTHING in the machine IMMEDIATELY.

It is there in case someone is about to get hurt (or worse, is getting hurt). It must be accessible fast so you can just smack it with your palm.

But that isn’t the case here. It is a tape holder. And the tape has to be moved to hit the E-Stop.

Walking around this (now long closed) factory, I saw a lot of this kind of functional disorganization. It was normal. It was, by definition, OK because the leadership (at least those who came out to the shop floor) walked past it every day and didn’t say anything.

I wasn’t there to help fix it, they weren’t a client. I did pick up the tape and suggest to the machine operators that they should find a better place to put it, and why. I did that because I cared for their safety. But the workbench covered 7 inches deep in junk? Interesting, but in this case, the Prime Directive was in play for me.

Take a walk through your organization. What do you see? That is your “OK.”

Here’s the model I shared a couple of years ago in a KataCon keynote:

Standards vs. Reality = The Gap

Every organization has a gap between their standards and their reality. What differentiates between high performance and just getting along is the magnitude of that gap.

The gap forms because, left unchecked, all processes begin to erode as soon as they are put into place. As unforeseen issues come up, people left to their own devices will develop work-arounds, add (or omit) steps, and improvise as necessary to do what they believe must be done. They are working hard to do what they believe the organization thinks is important.

We can think of it like this: The blue line represents the defined or aspirational standard. The arrows represent the constant pressures to “find a way to get it done” and the red line represents the steady separation of reality from the defined process.

This downward trend continues until things are bad enough that someone intervenes.

That threshold of intervention exerts upward pressure on the process and maintains it at some level of normal. We have to remember that “normal” means “what we would expect to see.” It doesn’t mean we like normal. It just is.

Anything between the defined process and “normal” and “acceptible” is in your “OK Zone” meaning, “This is OK,” I’m not going to take the time or energy to try to hold it up any higher.

If you want to know what your OK zone looks like, just walk around and look. It is what you see every day.

Unless the intervention threshold changes, any improvements you make will quickly revert to the “OK Zone” baseline.

The question for organizations wishing to up their game and develop a culture of robust execution is: “What would it take to trigger the intervention more quickly, when there is less deviation from the standard?”

The purpose of ALL of the so-called “lean tools” is to highlight the gap, and invite people to do something about it. None of the lean tools intervene on their own, nor correct a deviation, nor actively improve your process. Only people can do that. The tools enable people by giving them the information they need to quickly know when, and how, to intervene, correct, and seek to understand the problem.

Recovering a Failed ERP Implementation

I was working with this company mainly on their shop floor processes: Quality, Process Improvement, Daily Management – classic stuff. It was a medium sized plant (a few hundred people) that was part of a larger company with significant business footprints in Europe and North America.

They hadn’t involved me in their upcoming ERP implementation. Heck, they hadn’t even told me they were switching systems. I just heard about it in the course of the day-to-day conversations. My feeling was they were treating this as background noise in their daily business, and I told them. “Focus on this, it will be one of the hardest things you have ever done, and if you treat it casually it will bite you” (or words to that effect).

I was assured that everything was under control.

Over the ensuing weeks I saw a conference room full of outside people all sitting at laptops. I also saw “training” sessions that were mostly lecture and demonstration of the features of the new software. I picked up on conversations that circled around “How will the new system ___(fill in one of their perceived necessary work tasks)___.”

I wasn’t on site on the day the cut over to the new system – and simultaneously cut off their legacy system.

I was on site during the aftermath.

Work orders were released without materials available.

Shipment manifest errors were causing customer rejections.

There were surprise shortages of basic commodity supplies.

The production planners were really struggling.

Sales revenue dropped. Revenue dropped. The bottom line impact was, to say the least, significant.

Corporate’s response was to assemble a team of experts from the global operations and parachute them into this site to get things working.

They asked me to organize that intervention.

It’s WORKFLOW, not FEATURES

The first step in this was for each stakeholder (the area managers, such as supply chain) to identify, exactly, what problems they had.

First we had them write what they thought the problem was. On the first pass, these were usually things they wanted the system to do. In reality, in most cases it was something they didn’t know how to do, but that is getting ahead of the story. Each of those items was written on a single 5×8 inch index card.

Then we had them write their definition of “Solved” as in, “This problem is solved when ___.” and that had to be something that their Team Members could demonstrate back to the stakeholder / manager. We did it this way to make sure that the stakeholder had a clear criteria that, when met, they would verify that this was no longer a problem for them.

Part of that was to remove ambiguity. Part of it was for the stakeholder to accept accountability for the solution vs. saying later that they were not happy.

We then had the outside experts review the cards and accept the ones they would help with.

Now comes the interesting part.

We established a vertical column on the wall for the work of each outside expert.

The stakeholder / managers now had to get together and agree on the priority order among themselves. The stakeholders controlled the priority. The cards were taped to the wall in priority order, top to bottom.

What we had now was stakeholder agreement on:

  • What problems needed solutions.
  • What “solved” means in clear terms from the perspective of the stakeholder.
  • The priority sequence of work for each helping outside expert.

This meeting, by the way, wasn’t necessarily pretty. But they needed to work through the conflicts themselves. No outsider could do that except to impose something, which would reduce the ownership of the process.

All of this effort was to make sure we were focused on workflow, not simply software features. All solutions had to be in the form of what someone had to do in order to advance the work.

Daily Management

We used sticky dots to indicate the status of each card. The colors were based on nothing more than the box of stickers I could find at the local wally-world.

When the outside expert began work on a particular problem, they would put a pink dot on the card. This signaled to everyone that this problem was “in work.”

If they encountered any issues or delays, they would put a post-it on the card saying what question needed to be answered, or what was needed to resume work. This indicated “Stuck” status and what must be done to get it “Unstuck.”

They typically worked with the individual Team Members who had to use the system to do their work. Sometimes, though, they had to get answers from outside, or even facilitate modifications to the system.

When the outside expert believed the solution was Ready to demonstrate to the Stakeholder for buy-off, they put an orange dot on the card.

They also moved the card to another column on the wall under the stakeholder’s name. This established the work queue for the stakeholders. It was now their responsibility to initiate the next action. It was clear who was waiting for who.

Once the stakeholder was satisfied with the solution, they (and only they) applied a green “Verified / Complete” dot, and the card was moved to the “Completed Items” section of the wall. That showed we were making progress.

Process Guidelines

We also established agreement around workflow guidelines, a set of loose standards to strive for in a solution.

Staying Aligned

We established a daily standup every morning at 10:00.

The purpose was to align on status. It was NOT to solve problems. The meeting took 10 minutes or less, each person speaking for less than 60 seconds. This was the time to mention if you were blocked on making progress, or if you needed help.

To facilitate the structure we used a “talking stick” – something that was passed from person to person indicating it was their turn to talk, and that everyone else’s task was simply to listen. Question, discussions, possible solutions, etc. were, “I can help with that, let’s meet after” and the meeting was typically followed by quick 2-3 person huddles.

Transparency = Progress

By having everyone working toward a shared Truth that was displayed for all to see, there was no opportunity for speculation, wondering who was working on what, why progress was stuck.

Possible solutions were investigated, and results reported at the daily standup, AND on sticky notes on the cards.

Everyone know if the next step was their responsibility (because the card was on the wall under their name).

There were no action item reviews, no “I’ll have that done next week.” Every task was on a timeline of Today and Tomorrow.

At the same time, this process was a shock to the organizational culture which was pretty much the opposite of everything I just said.

What Conversations Does Your VSM Drive?

Continuing on the theme of value stream mapping (and process mapping in general) – in the last post, Where is your value stream map? I outlined the typical scenario – the map is built by the Continuous Improvement Team, and they are the ones primarily engaged in the conversations about how to close the gap between the current state and the future state.

The challenge here is that ultimately it is the line leadership, not the Continuous Improvement Team, that drives whether or not this effort is long-term successful.

Getting a continuous improvement culture into place means changing the day-to-day patterns of interaction between people and groups of people. We can put in all of the lean tools we want, but if those conversations don’t follow, the system quickly reverts to the previous baseline.

What is interesting (to me, but I admit I’m a geek about this stuff) is that this is a meta level thing. While we are working on improving the performance of the value stream, we really have to be working on the performance of the process of leadership in the organization.

The value stream map can help with this, but we have to be deliberate about it, and realize that it will be an incremental and iterative process, just as we find in trying to improve how any process functions.

Start With Where You Want To Go

For line leadership, before we even start drawing process boxes, the first step is deciding why you are even doing this. What problem are you trying to solve? What aspect of your current performance needs to change… dramatically?

Is your system unresponsive to customers? Do customers expect deliveries inside your nominal lead times? Does that disrupt your system? What lead time capability would let you routinely handle these issues so they weren’t even issues anymore, just normal operations? That objective is going to bias your current state VSM toward understanding what is driving your lead times, where, when, and for how long, work is idle vs. actually being processed, etc.

Or maybe you need to increase your capacity while holding your costs (vs. just duplicating the existing processes). Now you are going to be focusing on the things that constrain your throughput, activities that consume time within cycles of output and the like.

Establishing that focus is a leadership / management task. It doesn’t work to just say “We need to improve” or even worse “We need to get lean.”

Sometimes these things are obvious frustrations to management, but often they are overwhelmed with general performance issues, or trying to define problems in terms of financials. That is an opportunity to focus back on the kind of performance that would address the financials.

The cool thing here is that you really can’t get this wrong. If you set a goal of radically improving your performance on any single aspect of your operation, you will end up improving pretty much everything in the process of reaching that goal. But it is critically important to have a goal to strive for, otherwise people are just trying to “improve” without any objective.

Then map your current state. The challenge gives you context. The current state map gives you a picture of how and why the system performs as it does.

Just so we don’t get sucked down the whirlpool of focusing too much on the business process in this discussion, the reason why you are getting this clarity is to get (and keep) the leaders engaged. If the objective is something abstract like “get lean” it is easy for them to think they can just get updates while they deal with the “real issues.” We want to attach this to a real issue that they are already working on.

Thus there is no “lean plan.” So many companies make “lean” somehow separate from other business objectives. I never could understand that. Maybe they are trying to separate “gains” that are a result of the “lean program” from those created by other initiatives. It doesn’t work that way. There is only one operating system in play, and that is what drives your day-to-day performance. If you don’t like the performance, you have to change the operating system. That is a management function, and it can’t be delegated.

The photo above is a current state map from a process that took several weeks to ship a part that the customer had ordered. Since it was a make-to-order shop, this was, shall we say, challenging for the customer relationship people.

As the team built the map it began to sink in that the time actually making the part was less than 30 minutes, and the value add was about six of those minutes. Their performance metric was “Past Due Hours” which was an abstraction of the programmed jobs that were behind the promised ship date.

Because the customers were always asking the business team members, “Where’s my stuff?” those customer reps were, in turn, always on the shop floor trying to get their orders expedited. They were competing with one another for a place in the production queue.

There is an icon in the middle of the map. Here is a close up:

This is Jim. He was an hourly associate whose nominal job was to pull the paperwork, match it up with raw material, and stage the work package into the production queue.

But this role made him the gatekeeper. So the customer service people (you can see their names in the lower left corner) would be pressuring Jim to jump their hot orders (and they were all hot by the time it got to the point where there was paperwork release – another story) into the queue so they could tell their customers that their orders were “in production.”

This put Jim in the position of having to make the priority decisions that the leadership wouldn’t make. Ultimately it was Jim who decided which customers would be disappointed that day. That made his day way more stressful than his pay grade. Respect for people? Hardly.

It also resulted in a staged order queue (materials and paperwork on carts) that snaked through the shop until it finally (days later) got to the actual production cell which, once they started, could actually knock things out pretty fast.

None of this addressed the past due issue. In fact, this made it worse.*

The key question for this team was “Who needs to have what conversation about work priorities so it isn’t all on an hourly associate to decide which of our customers will be disappointed?”

Who Needs To Fix This?

We want to solve problems at the lowest possible level, but no lower. In this working example, asking the shop floor workforce to fix this problem would be futile. Yes, they can propose a different structure, but they do not control how orders are released, they do not control how capacity is managed, they do not control the account managers who are fighting for a spot in the queue. They had been complaining about this bind for a long time. It wasn’t until the people running the business saw how the overall system worked that they understood that this is a systemic issue, and “the system” belongs to line management.

The facilitation question that got their attention was “Do you want Jim to be the one who decides who gets production priority?” Of course the answer was “No.” And that wasn’t about Jim, rather it was the realization that this WAS the existing process, and that wasn’t how they wanted things to operate. As my friend Brian says, “You may not like your normal, but you have to deal with it.”

That is generally the case at the value stream level. Value stream problems are usually at the interfaces between processes. The shop floor can’t, for example, transition from a push scheduling system to pull on their own. If they try, they create conflicts with the existing scheduling system and this usually tanks their metrics – even if performance is actually getting better.

These are all management discussions.

Key Point: The value stream level is a systems view. While you absolutely want input from the people who are engaged in the work every day, working on the system itself is not something that can be delegated by line leadership. They are the ones who are responsible for the overall system, and they are the ones who need to be responsible for changing it.

The Future State Map is a Hypothesis

Once you understand the current condition, the next step is to answer the question, “How does the process need to operate in order to meet our goal?”

The purpose of mapping a future state is to design process flow that you believe will meet your challenge if you can get the system to work that way.

It isn’t about seeing what you could do by removing waste. It isn’t “what could we improve,” it is “what must we change to reach our objective?” Again, this is a management function. It’s called “leadership.”

Which brings me to the title of this post.

Who Is Talking About This Stuff?

If the Continuous Improvement Team simply facilitated the process for line leadership (the actual stakeholders) to grasp the current condition and establish a target (future state) condition, what is crucial is who takes ownership of closing the gap. If the C.I. team are the ones discussing the problems they are often in a position of having to sell and justify every step of the effort to get to the future state.

Likewise, I have seen a lot of cases where the people primarily participating in building the value stream map were working level team members. Yes, it is absolutely necessary to have their insights into how things really are for people trying to get stuff done. Yes, it is critically helpful for them to understand the bigger picture context of what they do. However, all too often, I see senior leaders disengaged under the umbrella that they are “empowering” their workers.

Just to be clear: We absolutely want to create conversations about improvement at the level of the organization where value and the customer’s experience is actually created. The point here is that those conversations cannot be the exclusive domain of the working levels. It is critical for line leadership to be, well, leading. They can’t just delegate this to the continuous improvement specialists. Nor can they simply leave it to the working levels to sort it out – not if they expect it to work for any length of time.

Who reports on progress?

When an executive wants to know the progress toward an improvement goal, who do they call? Do they call the continuous improvement team to report? Or do they call the actual stakeholder who is responsible?

This is an easy trap to fall into. The C.I. Manager wants to show they are making a difference. The senior manager knows the C.I. Manager probably has better information. But that isn’t the conversation we want to create. The conversation needs to be between the line leaders. Yes, the C.I. team can (and probably should) help structure that conversation, but if they inject themselves into the middle (or allow senior management to put them there) the vital vertical connections are weakened – if they ever existed.

Thus, it is critical for the Continuous Improvement team to have a crystal clear picture of who should be having these conversations, and be actively working to nudge things in that direction. This is the process the C.I. team should actually be working to improve.

What should people talk about?

Ah, here’s the rub. For some reason managers today have a reluctance (or even disdain) to talk about operations, preferring to keep conversations in financial terms of cost, earned hours, yield and the like. These are all outcomes, but they are outcomes of process, and it is only by changing the process that those outcomes can sustainably change.

That conversation about progress I talked about above? That can’t be solely about the performance. It has to be about what is changing in the way the work is being done, and more importantly, what is being learned.

What the future state value stream map does (or should be used to do) is translate those business objectives into operational requirements for the process.

What Is Your Target Condition?

How we start to see the organic intersection between Toyota Kata and the value stream map.

The future state map defines a management goal. It also highlights the problems that must be solved to get there. (Those are the “kaizen bursts” that Learning to See has you put on the future state map.)

Those problems, or obstacles in Toyota Kata terms, at the value stream level become challenges (again in Toyota Kata terms) for the respective process owners.

Now the conversations move to the right level. Rather than asking for the status of action items for the “lead time reduction initiative,” the line leaders are discussing progress toward getting the changeover in stamping down to 17 minutes, and the cycle times in the weld cell under the takt time.

In my working example above, the first target condition was to have Jim simply pull the next order from a FIFO queue in a series of slots on the wall. The customer service reps had to meet every morning and could reshuffle the orders in those slots all they wanted, but Jim’s job was just to take the next one. That pushed the initial conversation to the one they had been avoiding: The customer service team talking among themselves, rather than making Jim the arbitrator.

There was a lot of other work as well. They established a rigid FIFO with a fixed WIP level of staged orders. Instead of pushing days of work into that queue, there was a buffer of about an hour (to absorb variation in processing times between various jobs).

At the same time, the team running machines now understood the rate of processing that was required to keep up with the volume of work. That had been totally hidden by the queues before. All they knew is that they were behind. Now the conversation shifted to “Are we going fast enough?” It shifted from discussions about backlog (which really are not productive) to discussions about rate of processing which is the only thing that affects the backlog.

Getting all of this dialed in and stable took a few weeks of daily conversations between the Operations Director and the various managers and supervisors whose work impacted the flow. It involved walking the floor, putting in visual indicators that clearly defined what should be happening – the target condition – and they discussed reasons things looked different: The actual condition now, and what obstacles were being surfaced as they worked to reduce the WIP buffers.

The net result?

Learning is Critical

The current performance is an outcome of the current system. People do their best within the system they have to work within, and we have to assume the system reflects management’s understanding of how things should operate to get the best results.

Even if someone knows a better way, that knowledge is wasted unless it is applied to the overall system of operating – the way we do things.

Epilog

You would never say “The freezer is cold enough, we can unplug it now.” You have to keep putting energy into the system just to keep the temperature where it is. Tightly performing production systems are no different. Over the course of the next year or so past due hours slowly crept back up for unknown reasons. Why? Because they didn’t talk about it every day.


*When a shop is behind, the management reflexes are (1) increasing batch sizes and (2) expediting. There really aren’t any better ways to make the throughout and response times worse.