Author: Gary Cone

An old friend and one of my greatest teachers, Jim Blanden, told a story of how the Greek philosophers sat around debating how many teeth an ox had.  What should be obvious is to get off of your butt and go look in a few mouths and stop talking about something you have no data on.

I saw a great parallel to this at Honda of America over two decades ago. They have several simple practices to facilitate problem solving. Quite simply they start meetings asking for a show of hands of who has seen the problem to be discussed. Those that don’t raise their hand are excused and cannot participate.

Wow. Think of the hours, days, weeks, years that could have been saved during your career if people understood opinions don’t make any difference, data does.

Yet there are several instances of just that any time we touch most organizations.

The one that has me most intrigued is one going on with a long time customer of ours. It is an organization, which has been bought and sold multiple times in the past few decades and stripped of resources each time, but in spite of all that still has a few dozen of the most prominent name brands in the world. But their market share continues to erode, mainly being attacked by store brands and generics where the price difference doesn’t fit the price elasticity model of a lot of consumers. Clearly they need to be more efficient in the value stream to the customer and they need to strip away excesses in their corporate structure.

Their version of “ox teeth” is sigma level. There is a raging ongoing debate if there is value in further improving their capability. This is being debated from the boardroom to the factory floor while the people charged with continuing improvement are getting trapped into the mindset that went away while we helped them improve output by greater than 25% (and saw an additional 4% profit while doing so). The trained resources are gradually shifting to other pursuits, mostly outside the company.

What should they do? What any rational businessperson should know to do instinctively – go quantify the opportunity and make a decision based on ROI. And not just in the value streams serving the customer, but in SIOP and R&D and Purchasing and …

Just a hint, you don’t find those answers in the Balance Sheets or any of the reporting to Wall Street but they are discoverable and quantifiable if you know what you are doing.

If you don’t know how, call me.

Gary

(313) 506 1594

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You’ve heard all the reasons. Probably many even came from you.

You’re being asked by the C-suite or your Private Equity partner to make improvements that you don’t know how to do as rapidly or to the depth you are being asked to. Your process owners tell you all of their processes are “optimized” (whatever that means!). Your culture isn’t right for or your organization thinks you have already checked the box for ___________ (lean, six sigma, OPEX, TPM,… Fill in the blank). You are asked for aggressive results but aren’t given the means to do it.  And the list goes on.

The list is long and unless you are one of those rare handful of companies that is the market leader / low cost producer in your business segment, you are dead wrong.

Even though I came out of one of the best learning environments of this generation – Motorola then AlliedSignal then GE – I’ve never been tied to labels like Lean, Six Sigma, TPM,  or Shainin. To think that a prescribed method implemented to a template is all you will ever need is insane. We started running into companies a decade ago that were looking for the next magic bullet and would start every conversation with something like “we’ve implemented Lean and Six Sigma and we’re looking to move to the next level”. We started countering them with no you haven’t which was not very effective. We then learned to ask them if  we could see the operation that was having the greatest difficulty and then show them how to significantly improve the operation with a payback on the investment of at least 3 to 1 in the following 12 months. It’s usually greater than 10 to 1.

We’ve labeled the idea the 10/90 challenge. This is how it works.

1)   In ten days or less, we will identify specifically what can be done in the following 90 days that will give demonstratively better results that will impact safety, output, or customer satisfaction. Of course we ask for complete transparency – access to financials, data, process, people, and systems. We will take on any process wherever it lies in the order to delivery cycle including any and all planning processes.

2)   In the following 90 days, we put a team of two into the process and make significant gains – enough to at least give the 3 to 1 return. Of course we insist on complete cooperation of all stakeholders including access to key stakeholders for a few hours a week away from their work and reviews on a regular cycle (weekly locally, monthly with Leadership).

3)   We then have a discussion of the return for working the entire system.

The truth is there are no silver bullets. Teaching popular methods alone doesn’t mean squat. Having leadership in favor of change doesn’t mean squat. Hiring someone from GE, P&G, or __________ (fill in the blank of the latest company that has a rock star CEO) doesn’t mean squat.

If you want to know what does mean squat, call me.

Gary

(586) 412-9609 office

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From my good friend and business partner in Canada –

I have just returned from the Food and Consumer Products of Canada 2012 CEO Executive Conference, and I must say, what a great location in Northern Ontario and what an even better line up of speakers! There were 175 of Canada’s most influential leaders in the food and consumer products industry in the room. I would like to share a highlight with you that I thought was very interesting.

One of the most dynamic speakers was Peter Sheahan; CEO ChangeLabs, author and recognized speaker on innovation and change. Peter set out to engage the group on the topic of leadership and innovation.  The crowd’s reaction to his opening monologue is what I found to be most revealing. As Peter began his presentation he enthusiastically worked the crowd at floor level, pacing through the tables to get the audience fired up about innovation. He was asking repeatedly… if we “felt it”? Specifically, did we feel an inflection point coming in our industry? Did we sense it? Did we think something big was just around the corner? Was their some impending innovation that would drastically change the playing field?

Well… this is where it got interesting. The only thing impending in that crowd was the “impending doom” of some innovation that would change the playing field for the food and consumer retail market! I looked around the room for someone to respond and jump on the innovation bandwagon. What I saw was quite different. I saw every thing from pure terror to outright dismissal and denial. I surmise the collective thought was “This guy is nuts!” Peter definitely had us squirming in our seats. Innovation that would significantly change the playing field? How could this be possible? We’ve been doing it like this forever!  I didn’t see this reaction coming, but luckily it was all part of Peter’s master plan. He spent the rest of his hour showing us example after example of industries completely redefined by innovation, and sharing some great insight into the possible future of retail.  The answer to his original question, “Do we see it coming?” brings into question the reality of how this cannot be accomplished without flexible processes and retail collaboration, both of which remain extremely elusive for most.

I know FCPC has had Supply Chain Collaboration on their agenda for years. As the perfect forum for these types of conversations, FCPC has sponsored Supply Chain Symposiums on this very topic, aiming to get to the next level of innovative partnerships.

So why such a struggle? Why are the players so adverse to the collaboration concept? If you ask them, they will take you directly into the weeds, with hidden agendas, transportation tariffs, listing fees, lack of trust, and everyone thinking they would get the short end of the deal. What’s more, any conversation with the retail customer leaves them feeling “exposed” to say the least.

Could it be possible that some of that fear starts with a lack of confidence in their processes?  That the silo’s across their internal supply chain network are so entrenched, and communication so difficult, that adding a collaboration partner would be so complex they just wouldn’t know where to begin?

So, do you “feel it,” an impending inflection point in your industry? If so, how will you get in front of it? Are your processes nimble enough to absorb the impact of fast growth that innovation can spark? Or is there a lot of “white space” between the functional silos of your organization?  More importantly, do you know what to do about it?

Many companies have realized that pursuing Operational Excellence throughout their supply chain and supporting business processes helped them get out in front of the inflection point.  Many of those companies have a trusted partner who helped guide them through that uncomfortable change.  We have many experienced people in our organization that have lived through innovation changing the playing field. Our experiences with Motorola, Allied Signal, GE, Proctor & Gamble and Kraft Foods come to mind.  We welcome you to share what has worked for you in your organizations.

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As we prepare for the upcoming Food & Consumer Products of Canada CEO Executive Conference, it’s important to reflect on what tools companies really need to unlock their potential. The CEO has input from the board, share holders, competitive intelligence, advocate investors…; and they have some type of improvement effort that is not solving their most painful and economically disstressing issues.

The most common toolsets have some flavor of Lean and Six Sigma involved, but there are lots of other choices including Shainin Tools and TPM. How does the CEO rationalize how their company is to improve and how do they get all players, across all silos to be actively involved? This begins with a good look in the mirror, it is one of the most important diagnostic tools people and companies have. It is also one of the least used. BTW, choosing a label is one of the most often used and it is the least important. Call it Lean and you still have a need to solve the deep problems that call for lots of data. Call it Six Sigma and you still need to focus on time and get agreement on how work is to be accomplished at all levels of the organization. Call it TPM and investors still want profit improvement this year,

Lean and Six Sigma have always been joined, but they are separate but equal partners. Ask any of the implementers from the mid 80’s at Motorola and they will tell you that Cycle Time Reduction accelerated everything.

How does an implementation look if you don’t just hit the ground running with Six Sigma or Lean?
Simple —

1. Take an honest look at yourself and define who you are and who you need to be.

2. Align strategy and annual planning with the honest view of you.

3. Define the few metrics, besides financials, that show that we are making progress or not.

4. Align reward systems with metrics and define the cheater metrics as well in the reward system. Make sure what is rewarding is also in line with the metrics for the majority of your employees who work for you because they believe in what they do. Some examples of this type of person are most of your technicians, engineers, nurses, pharmacists … Communicate strategy and plans broadly and consistently.

5. Map the Value Streams of the few key end-to-end processes. Map flow of materials and services, flow of information, and flow of cash.

6. Identify disruptions in two passes. First pass is the process, as it exists today; the second is the process, as it will exist if you meet near term growth targets. The disruptions are your project areas (Goldratt is right). Don’t get hung up on hard savings (today’s issues) vs. soft savings (growth facilitating projects). Just make sure there is a balance between the two.

7. Charter and plan projects, preferably as part of next year’s operating plan.

8. Take care of the human architecture. This has two forms. The first is team dynamics; make sure your folks who need to be trained have been trained. This includes the seven basics tools and in my world would include many of Shainin’s tools. The second is choosing and nurturing champions and change agents. The common advice of “best and brightest” is necessary but not sufficient. You choose change agents based on something that is encoded in their DNA and is easy to measure. Just know that I believe that the advice that a good change agent is a good manager is terrible advice.

9. Do Lean – Standard Work, 5s, SMED, TWI, and other Lean tools are among the best variation reduction tools you will ever meet. I can get many of you the first 75% of most of your BB projects with these tools and I can do it in the gap between M and A in DMAIC. Why would you do it any other way? Go get the first 75% and then see what is most important.

10. Do Six Sigma – this is for those things that don’t give you what you need with Lean. This may be because they require much more sophisticated analysis tools. It is more likely they just need more time and someone willing to roll up their sleeves and do the blue collar grunt work of digging through massive amounts of data and making sense of it (analysis phase tools).

11. Do TPM – this is to assure everyone understands processing equipment can and has to always run right.

12. Share the learning broadly and democratically. What I mean by this is that very little of what is done in Six Sigma or Lean is sensitive enough not to be shared with everyone in your company’s value stream. Those who are driving improvement will always stay ahead of those who are trying to learn by watching.

12a. Repeat.

As anyone who has done this successfully knows, there is overlap between all of this. Don’t go deciding Lean, Six Sigma, Lean Six Sigma, TPM, or any other CI label is the answer until you have defined clearly where the opportunity is. And don’t choose a label that puts a fence around your corporate intelligence.

First things first.

— Gary

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This may be a revelation to some, but there is nothing new in the toolsets of Continuous Improvement (OpEx, Lean, Six Sigma or whatever you want to call it). The newest tools have their derivation at least two decades prior to anyone giving the current label. There are two really valuable aspects of current approaches:

1. The logical roadmap for the application of the tools

2. All of the really bright people out there trying to advance the practice of change management.

I will tell you some stories about the current practitioners, but first I want to ground us in the real pioneers that led us to this point. I am certain that each of the people I will mention here had a similar group of mentors. My journey began in the early 70’s and I can only tell the story from there.

I believe I am putting these in chronological order of their impact on my development.
My personal giants and why:

Dr. Lee Weaver – Lee is probably the best professor I have met and he instilled in me a passion for statistics. Lee also worked for Honeywell and so, from the beginning, I was taught the practical side of what was typically a very theoretical subject.

Bill Mitchell – A Scottish gentleman (and I mean gentleman in the finest sense of the word) who NCR had the foresight to make my boss very early in my career. Bill was the first boss I knew who believed his job was to coach and mentor. He taught me that all these decisions we make with increasingly complex toolsets had to be, first and foremost, sound business decisions. He also taught me about truly supporting your people. He said to me the day I went to work for him –

“I will always support you publicly no matter what you do. If I believe you have done something wrong, I will call you behind closed doors and discuss it with you. I will listen to your perspective; you will listen to mine and we will decide what to do. We will both own the decision and never walk out of my office saying that we are doing anything other than what we think is right. Anything else will weaken both of us.”

I can tell you that Bill was the best boss and mentor I ever had and he lived up to his words. I have honestly tried to structure the same relationship with all of my bosses and all that I have influenced since that day. I can tell you that Bill’s methods caused him considerable pain because I certainly tested the limits. I can also tell you that I have experienced considerable pain because I support people in the same way. Nonetheless, I grew and learned under Bill’s wing and I have seen hundreds of people really blossom and grow when allowed to have freedom to do their job. There is a small minority of people who do not use this freedom to grow. That is too bad for them. I wouldn’t have it any other way.

Bill also gave me the job of defining the Quality System at a point in time when I did not have a clue what that meant. It was the greatest gift I ever received because now I understand that all of the wonderful “silver bullets” that are sold today have to logically fit into a system or they have no long-term value. Remember that the “silver bullets” are not the system.

Joseph Juran – I was first exposed to Juran in two ways. I inherited a copy of his Quality Control Handbook early in my career and had the opportunity to lead a group going through “Juran on Quality Improvement”, a videotape series meant to teach people a structured approach to problem solving. I got a copy of Juran’s Managerial Breakthrough as part of that. That book is the basis of what is now known as Lean and Six Sigma. I learned two significant lessons from the book: 1) all change happens project by project and 2) breakthrough has to be approached by first taking the time to understand the underlying process (Journey from Symptom to Cause in Juran’s words) before ever trying to solve the problem. Juran’s thoughts on the Quality System expressed in his Trilogy are right. I can still pass ASQ’s CQE’s or CSSBB’s exam with Juran’s Handbook as my only reference.

Bob Galvin – Bob is the son of the founder of Motorola and was CEO of Motorola when I joined them in 1983. Bob brought participative management (PMP) to Motorola a few years before I joined and began a serious push toward improving quality the year before I joined. I will tell you that Motorola was the most exciting place I ever worked and that for the eight years I worked there, I learned something new everyday. I attribute to Bob the opportunity to learn and be excited about my job. Participative Management made us understand differences in people and to respect everyone in the organization. The push for improved quality forced us to find useable tools. It was not acceptable NOT to have real improvement on a daily, weekly, monthly basis. It WAS acceptable to try new things, but fail, at Motorola (we were just expected to learn from these failures).

Bob also introduced Cycle Time Reduction (what we called Lean before Womack) in 1985 and, although it is not publicized, time was the real catalyst that made all of the defect reduction tools real. Go look at the corporate metrics from 1986 forward and you will find that time reduction was right there, equal to defect reduction. In simple terms, we found we could reduce defects without impacting the basic flow (read that as real cost), but we could not truly impact flow without addressing defects. So by linking time and defects, we found the defect reduction tools useful and also discovered their impact to the bottom line.

Bob changed the measurement system, which gave people who truly believed in this an umbrella under which to operate with complete freedom. I believe Bob will be recognized over time as the greatest corporate champion of all time (sorry Jack but I knew someone greater than you). Bob is also the model for training the workforce. Motorola has required a minimum of 40 hours per employee per year (that is all employees, not just some) for more than twenty years.

Mike Carnell – Simply the finest learner and the finest practitioner of Change Management I have ever met. He is brave and loyal and continues to make me better every day.

W. Edwards Deming – The only thing I want to tell you is that Deming was right and if you do not understand that – go read Deming. If your only takeaway is to embrace his 14 points in how you behave as a leader, your organization will improve dramatically. I have read everything Deming ever published and I think the best was Quality, Productivity, and the Competitive Position because it was pure Deming – no editing. Remember that he did not say, “Drive out training and institute fear;” he said just the opposite. Also, remember that he did not say NOT to set goals, he said don’t set goals without also providing methods and tools to achieve them.

John Lupienski – In my opinion, John was, and still is, the most influential force on what Motorola calls Lean and Six Sigma today. For example, John and myself first documented the roadmap that is used by most providers of Black Belt training back in 1988. John recognized the need for the roadmap. Those who are claiming all of the credit for the roadmap and all of the buzzwords around it did not even have it right when it was sold to AlliedSignal and GE. This point is easy to prove by researching all of the “intellectual property” sold to these two companies. John has always known the next logical step to take in this journey and has driven it regardless of the opposition he confronts. He is also a great teacher who has been sharing his knowledge with Motorola and everyone involved with ASQ in the Buffalo, N.Y. area for at least twenty-five years. John remained loyal to Motorola and Buffalo even though it is clear he could have advanced his career, his fortune, and his personal notoriety by following the path taken by many of us. John is where I would still go if I wondered about direction and next steps.

Marty Rayl – Marty is simply the best champion I have ever experienced. Most who have had to deal with Marty would tell you some very unpleasant stories. If you did not cooperate with Marty’s folks at Motorola in the late 80’s, Marty would provide you with one of the most unpleasant experiences you would ever hope to avoid in corporate America. His message? Cooperate with my people or you get to deal with me! The Automotive group of Motorola made outstanding improvements in cycle time and defect levels during Marty’s time there. Marty also taught me to have a “book budget” – to give away books to anyone who would obligate himself or herself to use them. I maintain the model to this day.

Steve Zinkgraf – Steve made this consulting model work. The intellectual property sold to AlliedSignal and GE was unusable and Steve created the backbone of all the training materials that resulted from those efforts while he was an employee of AlliedSignal. Most of you were probably trained using a derivation of AlliedSignal’s intellectual property. Steve taught me to teach DOE in simple useable language. Steve’s work with Minitab in the late 80’s through 1995 set the stage for much of the functionality that exists in Minitab that is specifically geared toward the Black Belt community.

Richard Schroeder – Equal to John Lupienski in knowing what to do. Equal to Marty Rayl in supporting people. He is unrivaled at challenging the thinking of the C-suite. Rich has had unprecedented influence in corporate America with Galvin, Bossidy, and Welch at the top of the list of persons he has affected. His influence continues today.

Jack Welch – I do not worship at the feet of Jack Welch like many do, but it has to be noted that he created the largest culture of grasping change and driving it ever seen in the history of the business world. What is called Lean and Six Sigma at GE today is the culmination of twenty-five years of groundwork laid by Jack and his staff. Every leader in business should hope to have a fraction of the influence Jack has had.

Are there others? Absolutely. There are brave people through this whole thing that contributed tools, contributed leadership, or both. They are not the ones claiming ownership or to be creators of all this (imagine the ego of a guy who takes credit for the work of so many at Motorola – no way did a single person create this). They are just people who did some great things at the right time. I thought you might want to know about them.

— Gary

Every company is different, but there are some common threads to what must be done. Any book, company, or consultant that comes on as “I have a solution, what’s your problem?” is wrong.

This is a popular subject among the “theoretical” Lean and Six Sigma crowd but their experience beyond teaching and writing theory is light. The theoretical crowd has never spent time in the shoes of the people they are trying to give advice to. They are also really hung up on the lack of statistical rigor and general discipline associated with traditional process metrics and think they can solve that problem with new metrics. My experience is that a company that lacks discipline, well, they lack discipline. You will not solve that problem by changing the metrics. People like Deming and, more recently, Kaplan and Norton have been giving good advice on metrics. Most companies still don’t have the ability to look in the mirror and see themselves clearly and without that, advice on metrics is meaningless.

With that said, I think the common threads are:

1. Strategy taken seriously by the C-suite committing at least 50% of their time. This means at least a 3 – 5 year horizon on the things Collins talks about (your Hedgehog Concept), knowledge about your market and appropriate technology that will affect you, and that sober look in the mirror.

2. Strategy articulated clearly and cascaded through the entire organization with a special emphasis on where you play, what needs to change, and how much change you need in the next 12 months. This should have rational ties to the annual budget and planning process.

3. The output of #2 should focus you on SOME value streams and SOME measures of those value streams. These streams should be mapped to show flow of information, flow of product or service, flow of cash, etc. Metrics should be in place to show where the value-adding activities are being disrupted (Goldratt is right you know!). From this, you get a list of adhoc projects (read Adhocracy by Waterman if you have not already). These should be prioritized, scheduled for resolution, and sponsored.

So simple. Except this is tedious, “roll up your sleeves,” type work that can offend and frighten many if the communication and culture have not been tended to.

— Gary

Welcome to my new blog.

I want to start with an update to a blog I wrote in early 2009 because I think it is relevant. I just wanted to take a moment to update you on what I am seeing and thinking in this transitional decade.

1) This is not the time to invest in training the masses in programs that promise a nebulous payout in the future. The next quarter is uncertain, and companies have processes that are not working right because volumes have diminished, people have been moved around, suppliers are struggling, customers are not paying on time … Improvement is needed on critical processes now. To that end, we have done more business in the past three years fixing specific problems for customers. Some quick examples – freeing capacity to constrained production lines (20% overall increased capacity in NA for a Fortune 50 company), improving truck loading for a CPG company to reduce transportation costs, improving forecast accuracy to improve cash flow, and launching new products / processes more reliably to meet ROI promises and hit market windows. The annual value of fixing these issues has ranged from about $75K to >$2 billion. Cost has never been more than one-fourth of the annual value of the problem and in most cases was less than 5%.

2) We have been working a new model. I believe it is the natural evolution from Lean and Six Sigma implementations that were heavy on training and heavy on the use of customers’ internal resources. We have been going into companies that are successful, but struggling. Most are in high growth industries and have recently acquired, then integrated, two or more companies. They have poorly documented processes, too many SKU’s, bad delivery, and are losing customer business and confidence. We go in with a small team of people and completely analyze the existing situation and formulate and execute a plan to correct it for the customer. We still need resources from the customer, but on the order of one-twentieth what we asked for in the old model. It is tedious work, but we have focused resources on not taking away from the customer’s focus on the day-to-day, and everyone participating has ten years or more experience in solving these types of problems.

3) Enterprise software! Most companies have data integrity issues of MES solutions not talking to SAP accurately. We’ve all been there; identify a flaw in the system to be put on a 6-month waiting list by the already overworked IT function. We decided to do something about it and have our own IT resources that will get the problems solved as quickly as they are identified. We draw from the same resources that your company probably outsources your IT to so that ownership and understanding are not obstacles.

I just wanted you to think about these. I believe they just make sense. Engaging outsiders on very specific tasks instead of the shotgun efforts are way too common in this community. Get the results quicker and stop the “train and blame culture” that is rampant in the Lean and Six Sigma.

Regards,

Gary Cone