by The HLH Team
Remember that thing you bought, the one you were excited about only to discover, once you got it home, that it was defective? As frustrating as that was for you, it was probably much worse for the manufacturer.
After that experience, you were probably soured on that brand for a while. You probably told family members and possibly people outside your immediate circle. If you were really ticked, you wrote a letter, a nasty Facebook post, or a bad review about it. Word of mouth is both the most valuable and volatile form of marketing. While great word of mouth can reap overnight success, bad word of mouth is toxic.
That’s just one of the ways that Defect waste costs money.
Defects can be as simple as sprinkling cinnamon on a latte instead of vanilla, or as serious as installing faulty brakes in new automobiles. Whether 1 latte is re-made for free or 100,000 vehicles are recalled, defects waste money, and sometimes damage reputations.
Take Time to Train
It’s a pattern. You’re in the heat of your busy season, a big order has just come in, or someone has left suddenly and you need to replace them: fast. The new employee gets thrown into the deep end with no time for formal training. They’ll “train” on the job, which is translated as “they’ll learn the same bad habits as whoever they talk to first.” This is how defects happen.
The key to avoiding defects can be as simple as slowing down, taking a breath, and training.
If you’re too busy, delegate a trainer. If the trainer is too busy, find someone with good habits to be a mentor. Throwing green recruits into the trenches is an easy an expensive habit.
Before your new employee flips burgers, files a tax return or changes a tire, make sure that someone takes the time to walk him or her through the required process, make expectations clear, and stick around to watch him or her perform the task.
After that, educating your employees about the costs of defects will open staff eyes to the need to maintain a standard of quality. Not only will the training result in your existing and new team members cutting down on the defects – it will also improve your chances of retaining your people and help them succeed.
Check your Processes
Processes are cumulative. A simple clerical error early on can, if not caught, lead to serious defects as it moves through the process. Cutting corners by skimping on proofing is a potentially costly gamble.
All of this checking, quality control and training takes time and, by extension, money. But consider the true cost of a defective product in lost revenue, time (to go back and fix the problem), and bad word of mouth.
by The HLH Team
The word “leadership” gets thrown around a lot in business writing. Countless articles and books preach “first out of the trench”, but few of them give leadership the seriousness it deserves.
Lean understands that a company’s leadership is either its driving force or the wall it runs into. A good leader sparks self motivation in employees and makes them want to do better. The principles of lean leadership are both elegantly simple and counterintuitive to corporate culture.
In my last post I examined why lean initiatives often fail. Spoiler alert: it was leadership. Let’s find out what kinds of leaders make process improvement initiatives prosper.
This isn’t your standard blog post. Below are 3 comparisons of Lean vs Traditional leadership traits. I’ve included questions so you can think about what kind of leadership is in your company. Whether you’re the leaders or not, be honest in your answers. Process improvement begins with transparency.
What’s the leader’s Philosophy?
Dreams of short term revenue growth dance in traditional leaders’ heads. They ask “who” will do this and “who” will do that, all to push more product out the door.
Lean leaders have a longer term approach, and care about margins more than revenues. Putting customers first, lean leaders build processes that react to customers’ pull. “Why” becomes a tool that streamlines processes over time and exposes waste.
Question #1: What is your leadership philosophy and, more important, do you practice it?
Question #2: In your opinion, should business prioritize revenues or margins, and why?
What’s the leader’s Approach:
Most business models silo companies into departments, each with their own processes. Employees have little or no power to stop the processes: that power is in the corner-office.
Traditional leaders use spreadsheets to track their teams’ KPIs, ROIs, COGs and mistakes. When something goes wrong, they don’t find out until the news, via various data entries, hits their inbox. Reacting to what has already happened defines traditional leadership style.
Lean leaders empower employees to provide actionable input on wasteful processes. Instead of looking at last week’s spreadsheet, these leaders are present for today’s processes. They’re on the shop floor and at the morning meetings. They break down departmental silos so that the company becomes a unified, transparent system. They catch mistakes either as they happen or even before.
Question #3: What is an example of an employee providing feedback in your company? Was it acted upon and what was the result?
How does the leader deal with People:
Traditional leaders slot employees into functions. They create systems that sacrifice creativity for efficiency. Expensive consultants get hired for feedback but staff aren’t empowered to speak their minds. Traditional leaders set goals and provides feedback based on goal performance. No matter how many management seminars they attend, they are the boss and the sole problem solver.
Lean leaders are coaches. They put processes before goals, and dialogue with staff about continual process improvement. These leaders empower their staff, and staff respond by finding problems in processes before they erode profits.
Lean leaders make people want to excel by giving them the chance to improve the processes around them. Our employees want to make our businesses successful: we just need to give them the chance.
Question #4: What is one process in your company that no one has examined in a while? Every company has them.
by The HLH Team
This Can Happen to You…
Imagine this. Executives in your company hear about lean, read up on it, and become enamoured in the potential cost savings. Managers start talking and words like “kaizen” and “muda” start floating around the break room. Several meetings happen where an external consultant discusses processes and continual improvement. Whiteboards with coloured sticky notes pop up around the office.
For a few months it goes extremely well. The executives start invigorating morning meetings that get everyone thinking about finding waste. Inventory levels shrink, the hammers in the shop are outlined with bright tape to indicate their spot, and everyone moves their respective sticky notes across the Kanban board as they finish tasks. Productivity rises, and so do profits.
After a few months, the executives delegate the morning meetings to a senior manager and stop coming to them. They’ve become interested in other new projects and aren’t as visible as they used to be. The increased productivity and profits stop being a novelty; they become assumed. The expensive consultants stop coming. People aren’t as conscientious about moving their sticky notes across the whiteboard. Inventory levels creep up as people think less about processes. Waste cuts back into profits.
Lean is not a Fad
The scenario above has played out in countless businesses. It happens when leadership hears about lean but don’t appreciate the deep, company-wide paradigm shifts necessary for long-lasting process improvement. If leadership focuses on a top-down approach of implementing the tools of lean (kaizen, 5S, etc), the created systems will fall apart as soon as lean stops being new and novel and leadership loses interest.
It’s the wrong approach to think that lean is an assemblage of tools to make you more money. Implementing lean tools without a company-wide inclusive culture of lean will result in short term productivity successes and long term frustration when leadership, inevitably, takes their feet off the gas pedal.
Lean is about people as much as processes. As process improvement breaks down barriers across departments, it must also break down barriers of hierarchy, social exclusion, and lack of respect. In a lean culture, leadership commits to making the shift from Supervisor to Coach, and works alongside managers to create a sense of empowerment and accountability. The entire organization must make serving the customer better their prime focus. If leadership imposes lean with the sole goal of increasing profits, it won’t succeed in the long term.
In the next few posts, I’ll drill down into what elements create a culture of lean. Next week I’ll start at the top, with looking at “lean leadership.”
