This Simple Diagram Identifies How You Waste Money

This Simple Diagram Identifies How You Waste Money

man writing on white boardThe beating heart of Process Improvement is identifying and eliminating waste. Waste comes in 1 of 8 forms, and its visibility can range from blatantly obvious to systemically ingrained and challenging to pinpoint.

Isolating those ingrained wastes—which is how the real money bleeds away—requires buy-in from the entire team. The low-hanging fruit is easy to grab, but those systemic waste problems are way harder to round up.

So, how can you tackle processes that you can’t articulate?

Turns out, there’s a tool for that.

 

Fishbone Diagrams

Like so many Lean methods, this quality analysis tool was invented in Japan by Kaoru Ishikawa, who managed Kawasaki shipyards’ processes in the 1960s. The intent is to visualize the possible causes of the waste to find bottlenecks in your processes and identify the root cause of why a process isn’t working. 

 

When to Use the Fishbone 

You don’t need a fishbone with simple fixes. But when a team member identifies a source of waste and you can’t readily trace back through the process to root it out, fishbones become your best friend.

Don’t bother with the fishbone if you’re just starting down the Process Improvement path. First, handle the obvious stuff. 

As your organization gets more efficient, focus on pinpointing the systemic wastes that really drain your profit. These are the wasteful processes that have been baked into your everyday work life for years or decades, so much that they’ve become invisible. It takes discipline, and it takes perseverance. 

 

How to Use It

fishbone diagram

Start with an identified waste that you don’t know how to fix permanently. Don’t settle for fast fixes that fall apart: you want to build your bottom line with a deep-diving process change.

Bring the relevant stakeholders into the room. Draw the waste at the right-hand center of a large whiteboard or piece of paper. That’s the fish’s head: your objective.

Draw a line back from it for the “spine,” and several “ribs” coming out over and below, angled away from the head. Each rib is a category of processes. One may deal with transportation, one with materials, one with personnel, etc. 

Begin brainstorming all the possible causes of the waste. Write each down under its appropriate category and build sub-categories if you need them. A whiteboard is best because – if you are doing it right – your diagram gets messy. 

Some things may fall under multiple categories. That’s fine. You’re not having a neatness contest; you’re trying to save money.

Ask “why” over and over again. Peeling back all the layers will help you see how possible causes of waste overlap with each other. Find the connections, both in what should connect and in what is connecting but shouldn’t. 

 

completed fishbone diagram

A fishbone diagram of defects in a manufacturing plant.

 

Putting the Fishbone to Work

Think of building a fishbone as building a process map, with the difference being that you’re lasered-in on where the process might be breaking down.

Stand back and read your scribbled handiwork. Which potential problems come up multiple times? Which ones stick out to you? Which issues are so bad that they’ve started sprouting other problems?

 

Fishbones aren’t a silver bullet, but they are a fast way to visualize where your systemic waste might be coming from. From there, how you move forward and how much money you save in that process depends on how committed you are to being brutal with waste.

 

Hoshin kanri, Part II

Hoshin kanri, Part II

female leader fist pumping with the teamWe need to be more strategic with our decision-making, maybe now more than ever before. Instead of just bringing the staff into a room and open-endedly telling them to “strategize,” use a tried-and-true formula. Last week, we introduced the model of Compass Management (Hoshin kanri) to guide your decision horizons. In Part One, we discussed how establishing your organizational vision can help develop your company’s competitive advantage. Now let’s get into the nitty-gritty of it and determine how to develop and deploy your annual objectives as you move towards your goals. 

 

Develop Annual Objectives

Breakthrough objectives are too big to tackle in a year. Break them down into reasonable annual tasks. For example, if your objective is to develop a new product line, getting from here to there includes a lot of steps. There’s market research, product development, testing, building a launch strategy, and all that comes with bringing the new product to market. 

You need to establish a timeline for the milestones you create. Build in a little cushion for all the time-sucking variables that will inevitably pop up. If you’re too gung-ho with your timelines, you’re setting yourself up for disillusionment. 

 

Deploy Annual Objectives

 

how to deploy annual objectives

Now the work begins: aligning the resources you have – human and otherwise – to deliver. Start by breaking down your annual objectives into their component parts so that all team members in all departments understand what they need to do to help. 

For example, if the breakthrough objective is to be the industry leader for a new line of 0-emission buildings, everyone on your team has a role to play. There’s drafting, planning, marketing, hiring, and a hundred other jobs to do. 

Set clear goals for each team – or work with teams so that they develop their own goals – and assign a spokesperson for each. Your teams don’t need details about other teams’ plans, but they should all know the big picture to prevent siloing. 

 

Implement Annual Objectives 

The rubber hits the road. Give your teams the green light, and you take the role of communicator, delegator, and keeper of the vision.

Without the adhesive “why” holding it all together, the breakthrough objectives lose their driving force. Your most important role is to reinforce the “why,” especially if it’s new to your company culture. 

One of the valuable side effects of hoshin kanri is that it heralds systemic cultural change by turning vision-based goals into your team’s daily reality. 

 

Evaluate Annual Objectives

 

monthly review and annual review

It’s essential to structure time to evaluate the progress you and your team are making and to find ways to stay on track or course correct. A monthly and annual review process will help.

 

Monthly Review

Every month, take a couple of hours with the spokespeople from each team to check-in. This is your chance to review progress, be accountable for goals made or missed, and – most importantly – ask and answer questions that have arisen from the process.

 

Annual Review          

Each year perform a more extensive, half-day-or-so review that takes an annual snapshot of how the key objectives are developing. Then, once one or all of them have been put in place, set time aside to take stock of how the team has maintained and helped it grow. 

The crucial thing about breakthrough objectives is often not their development, but in how they’re tailored to varying market conditions. They’re meant to reinforce your business’s vision and give it a fresh, competitive edge. To achieve the former, each tactic must remain stable and robust. To accomplish the latter, the details of your plan must be flexible so you can quickly adapt to changing times. 

Managing this tension between stability and change takes practice. Be willing to learn as you go, and involve your team in ways that make sense for your business. 

Hoshin kanri, Part I

Hoshin kanri, Part I

team brainstorming HLHVision is not usually the problem. It’s common to develop your vision in the boardroom, the elusive “why” of your business—but far more challenging to make it the agent of change at every level. 

Hoshin kanri, a Japanese term coined during the Second World War rebuilding, means “compass management.” It’s a 7-part formula for developing a vision-based strategy and implementing it in practical, day-to-day ways across your business to achieve a competitive edge. 

In other words, hoshin kanri mobilizes your “why” into a tool for your business, not only to get ahead but also to build a vision-based culture from the ground up. Here’s how, in 7 steps: 

 

Establish Organizational Vision 

If you have yet to establish your “why,” start there. This is no less than answering the question: why does your company exist? 

The “why” here is of the Simon Sinek variety in that it doesn’t depend on your “what” (your products and services) or “how” (your processes). In fact, the “what” and “how” both depend on the “why” – the vision. 

As a guiding principle, your “why” might look something like “To take action against climate change so that we can live, play, and work sustainably.” Your why might inspire you and your team, but seeing that vision through is much easier said than done.

As you build out your “why”, bring in as many stakeholders as will give clear feedback and take your time. This isn’t one to rush. 

 

Develop Breakthrough Objectives

ho w to develop breakthrough objectives

Once you’ve defined “why,” start strategizing how to use it to create a competitive advantage. Tactics driven directly by your why, as opposed to by your what (like product promotions), will always be more successful. 

The tactics, or objectives, need to be seismic. These aren’t things that a team can bang off in a quarter. They’re the articulation of the paradigm shift of defining your business by your why. Your entire team will need to contribute and be on board long term for them to work.

You only need one or two objectives. Objectives should be things that will take three to five years to complete, for example:

Breakout objective examples

If there are five ideas, boil them down to their common essence and derive them from there. Take it seriously; these objectives will begin to define your business’s competitive edge. 

The next stage to mastering hoshin kanri is far more hands-on. Look out for part two; Developing and Deploying your Objectives, coming next week.

Pandemic Leadership

Pandemic Leadership

HLH-pandemic leadership-team chatting“The quality of a leader is reflected in the standards they set for themselves.” – Ray Kroc

The culture we create for our teams is ultimately what binds us together and keeps our revenues flowing. As leaders, we need to make sure that this engine of our company is greased and fuelled, and it’s up to us to set the course. Here are four tips to help you drive through this COVID-19 storm with your culture intact. 

 

Stop Talking About Normalcy

The goals you have for your business are the goalposts you’re running toward. Whether the touchdown takes a week or five years, you know where the line is and what direction to run in.

How you talk about the future affects how your team moves toward those goals. If you act in a holding pattern until the pandemic is over, they will too. 

When the pandemic started, the phrase “back to normal” was on everyone’s lips. Week by week, it’s becoming more evident that, virus or no virus, the paradigm shifts that 2020 has brought are here to stay.

Over 50% of Millennials and Gen Z workers plan to retain some of the lockdown behaviours they've learned post-COVID.

Over half of Millennials and Gen Z workers say that they plan to retain some of the “lockdown” behaviours they’ve learned post-COVID. Some of those slow-emerging business trends have exploded: value has been redefined in many ways, and it’s fair to say that the digital and e-comm explosion has changed the way people think about spending money for the long term. 

Your customers won’t expect the same service or products again. Your team won’t look at work/life balance the same way again. And if you placate them by assuring them that the old “normal” is coming back, you’re telling them to run toward a goalpost that has disappeared. 

Clinging to a nostalgic idea of normalcy has another effect: it clouds your own goals and ignores the opportunities ahead. There are new frontiers now – exciting ones – and they are ready to be explored by businesses who see the new goalposts and move with the game. 

 

Be Steadfast 

The business world has never changed faster. From how to keep your employees safe to marketing your products in a world of altered expectations, big decisions are coming at us every day.

Your team looks to you to have a calm hand on the wheel. There will be inner turmoil and a generous helping of self-doubt. But to the team, your job is to make the necessary choices—unwaveringly. When you’re steadfast, they’re eager.

 

Change Your Schedule

You know what your “normal” schedule used to be. Many of us are still trying to stay on it, as that’s what has worked for us before.

If more face-time with the team is what will help them adapt, then make it happen.But just as “normal” has changed, so too have the needs of our team and our customers. Paradoxically, even as we distance physically, we have never needed human contact more than we do now. 

If more face-time with the team is what will help them adapt, then make it happen. If more “just because” touchpoints with customers will retain them as loyal to your business, do what you can to deliver. Those two groups of people are the Alpha and Omega of your business, and they’re always more important than whatever is on your computer screen.

 

Look Out For Yourself 

Self-care is more vital than ever. We’re all standing on a razor’s edge, and to leadership, there’s the added pressure of running your team. 

Build the time you need for yourself into your schedule. “You-time” is crucial to keep the anxiety at bay and remain present through the other tasks at hand. You set the tone for your team’s culture; a calm hand on the wheel makes for a steady journey. 

 

In Dickens’ famous words “It was the best of times, it was the worst of times.” COVID has brought us a lot of challenges, but it’s also created a lot of opportunities. As leaders, we can position ourselves to drive our organizations to the next level by being agile, staying steadfast, allocating our time well, and taking care of ourselves. Let’s keep our eye on the ball and show our people how to do the same.

 

The Power of Failure

The Power of Failure

person stressed at their desk HLH“If failure is not an option, then neither is success.” – Seth Godin

Failure is the best teacher. When it comes to Process Improvement and growing our bottom line, failure is invaluable.

The goal for failure is fast, cheap, and often. With each failure, we do a postmortem and reflection so that we don’t repeat the same mistakes. 

But that’s not as easy as it sounds. In business, we often repeat the same failures over and over, telling ourselves that it will be different this time. In order to make failure our ally, we must first stop treating it like our enemy. 

 

It Starts with Culture 

If we treat small failures as disasters, we’ll be in a perpetual state of shell-shock and never learn from them. When they happen, the team looks to the leader for their reaction to base their judgments on the degree of devastation caused.

Establish a culture of learning and accelerate Process Improvement and develop aa good working culture HLH

It starts at the top. Has leadership established a culture of learning? Many Lean Leaders embrace failure so much that they encourage small iterative failures backed by a robust learning process. Failure can accelerate Process Improvement, but only with the right culture. 

You can’t win without taking chances. Failure happens, and strong leaders encourage their team to take the (calculated) risk and support them if it doesn’t work. 

 

Stop Blaming 

It's human nature to blame others for misfortune, but it's almost never productive HLHHow many meetings have you been in when the postmortem of a failure turned into a blame game? It’s human nature to blame others for misfortune, but it’s almost never productive.

Of course, there are times where it’s clearly someone’s fault. Those times should be handled accordingly, whether that calls for a serious private conversation or walking the person out of the building. 

But those cases are few, while the times we blame others for business failures are many. At the beginning of every meeting like that, one person is usually already on edge, and others are gunning for him or her. Defensiveness and defection follow, and it’s impossible to learn from failure in that climate.

Again, it starts with culture. If there’s a culture of blame in the organization, team members who fail will be too ashamed to learn from it. Or, even worse, they’ll be too scared to fail at all.

 

Process Improvement 

Process Improvement is dead in the water without a team that is 100% bought-in and watching for small efficiencies that can trim waste from the organization. Whenever a team member brings an idea to leadership, that person is vouching for the effectiveness of that idea. And if it doesn’t work, they’ll see that as a failure.

It’s leadership’s job to reassure the team that putting resources into new ideas is sound business practice. Whether we fail or succeed, we must always learn from the results—good and bad—without blaming the person bringing it forward.

Marketing During a Pandemic

Marketing During a Pandemic

entrepreneur talking on the phone HLH“Even when you are marketing to your entire audience or customer base, you are still simply speaking to a single human at any given time.” – Ann Handley 

How do you acquire new customers in a pandemic? Will the customers you’ve always had keep coming back? Will any marketing during COVID come off as opportunistic?

The pandemic has unearthed new buying motivations and new expectations for how businesses should behave. And it’s here for a while, so let’s start wrapping our heads around what marketing during a pandemic really looks like—for better or for worse.

 

Talk to New Customers

You’ve put a lot of time and energy into understanding who your customers are and what motivates them to come to you. 

Here’s the bad news: you can’t assume what you know about them is still true. 

There’s good news, though; there may be potential new customers waiting in the wings. You just need to be agile enough to pivot your messaging.

Call, email, text or greet new customers in your business and start a conversation. Ask them how they’re doing and why they’ve come (more on that below). Don’t hand them a survey; engage them as one human caught up in this mess to another. That way, you’ll get a real answer.

 

Make It Genuine 

 We’re social animals to the core, and COVID-19 has denied us some of that. Anxiety has skyrocketed, and we feel more disconnected from each other than we ever have.

At a time like this, generic, passive-voiced corporate-speak is going to do you more harm than good. Ditch that; it will bounce off your customers like water off a duck’s back.

When you talk to your customers, do so human-to-human. Take the corner office armour off and be your genuine self. We’re so starved for real human contact right now that your efforts are sure to get noticed. Here are a few tactics to employ:

 

  • Do more on social media. Not with canned promo posts, but with videos or pictures of you and your people. Start talking on camera about things that matter to other people. Talk about the difference that your business can make through its services, how you’re adapting and keeping your team safe, and how you’re committed to being there for your customers.
  • Reach out. Talk to your customers, whether that’s calling them out of the blue or tracking them down in-store. Stop the throwaway small talk and ask people how they’re really doing. They want to hear from you. They want to engage with you. They will be honest and open with you about their business and give you valuable information that you can act on.
  • Content, content, content. In the BC era (as in, “before COVID”), content was important for building web traffic and thought leadership. Now, it’s essential because it can educate, comfort, and even entertain when your customers crave guidance. Tell them the stories about what you do and why you do it. Teach them how your business can make their lives a little easier right now. This is the time for more content, not less. 

 

Stand for Something

The phrase “purpose-driven consumerism” largely derives from the rise of the largest demographic in human history (the Millennials), and their desire to feel good about how they spend their money. Now it’s even more impactful. 

If you don't visibly support a higher cause, then find one.We can’t defeat COVID alone. From masks to vaccine research, the tactics are as much about helping others as helping ourselves. Society is gaining a new appreciation for the needs of the many over the needs of the few.

Your marketing should reflect that. If you don’t visibly support a higher cause, then find one. Make it relevant and show your involvement in an engaging way. Study brands like Nike to learn how standing up for something that your core demographic believes in can catapult your brand forward.

 

Of course, what you stand up for hinges on how well you understand your customer; not just your traditional base, but a potential new COVID-era customer as well, which brings us back to the thread uniting all these tactics: open communication.

Talk to your customer. Human-to-human. It’s been the world’s best marketing for eons, and it always will be.