Define Your Current State
Let's move ahead and go back to something deming said and I quoted him in the last segment but let's let's let's listen and again on something he said can the grandfather, if you will of total quality management said that hard work and best efforts without guidance of profound knowledge may well be the root of our ruination there is no substitute for knowledge but he's really talking about here is hey, best intentions and hard work in a system that's not designed well with with knowledge and intelligence and and best practices um could well ruin us and we've seen that with businesses over the years where people great people have worked very hard and those businesses have suffered and struggled and in many cases they're no longer even here today you know, we're talking about the blockbusters, the borders books, you know, the struggles kodak has have had and xerox and companies like that and the opportunities they have missed um with with best intentions in mind on it so it can happen to...
the smartest organizations in the world. It could certainly happen to us, so the purpose of this session now is to introduce ah, a rational problem solving model and what this is allows us to do at home or at work is too when we have problems, we have conflicts, we have things we need to resolve um let's be disciplined about it let's not jump to conclusions let's not jump to assumptions but let's dig in and its use a rigorous model so the models called to make d m a I c and the d and m a x stands for de fine the first step in to make is to define what's going on define the current state defined the voice of customer what is the customer really asking for it? That's a customer really want? And what does the customer not want? Be clear on the definition because we were not clear that the customer doesn't want tales on those diamonds hardworking best efforts without that knowledge could ruin us it's certainly hurt around one alright define how the customer uses the the product or service what what what problems is the customer trying to solve with whatever it is we sell them what are they trying todo so how am I using this in this in the in the game this sheep what am I using them in eights? Why are we delivering them in aids? So I use emanates ok good question to ask defined voice of market which goes beyond just our customer it looks it looks at our customers customers it looks at our competition what's our competition able to dio who is our competition? How are we different so no matter what business you're in, no matter what size business, the solo preneurs, the entrepreneurs, any industry you got customers, if you're in business, because if you don't, you're out of business, you gotta market what's that voice of market what's that voice of customer telling us do we know? Or do we just think we no big difference? All right, big difference between thinking we know and actually knowing let's to find the voice of our process, we can map it, weaken, define this steps. One of the questions I asked in the last segment was how many steps are in this process? At one level, it looks like not that many, maybe seven or eight. We gotta requisition step. We got a diamond step and we got a red dot step in a review step if we look at it from that perspective, we have, you know, maybe seven or eight steps. Um, there's actually over a hundred steps in the game, it's over a hundred steps and most of those steps are non value added their waist pure waste, but they're there, and with gamba by going and actually witnessing and observing and asking the intelligent questions, we gain knowledge about the process and that's where we can really start toe, lean it out and fix it so what is the voice of process to find the assumptions were making the assumptions underlying ah, our policies and procedures what is our assumption about batch ing? What is our assumption about division of labor? What is our assumption about the client? Maybe that clients just being difficulty that's so you know he's being teo rigorous on his quality standards it's his fault maybe we could negotiate uh you know, with the client and get a get a break hey, we'll get a lower price if you'll take our junk believe it or not, there are organizations out there just doing exactly that all right? So let's be clear on our assumptions and we're going again in this session uses that lean sigma game now is a platform for a lot of the learning all right and beginning with define so let's review something I covered in the last segment because it's so important always said the five principles here tto world class excellence the referee if you want to call it that are specified value in the eyes of the customer. So um what was value in the eyes of the customer? Was it clear? And if the answer is no, not exactly because we had quality checks we checked the checks and we still got it through in a flawed way, so we're somehow we're just not on the same page or not speaking the same language happens all the time so smart companies know what's in and what's out the value stream. Ok, way. Have we laid out a value stream and for some odd reason it took fourteen and a half minutes to get me a good sheet, which should take less than a minute to make. You know, when you look at the actual work on a sheet uh, what about flo and pull? Did we have flow, or did we have pile ups? If we have, uh, I'd say if if that if that organization was a human body it's just waiting for a heart attack or a stroke, we had some serious clock clogs and, uh, clots and stuff, it, uh, wasn't flowing. So we start by looking at involving a lining and enabling and empowering the people in the system and then figure out ways to improve the system that will take us into kaisa later on. And, uh, we realised we never really get there. We never really get it done. We never really get it right, but we could certainly make it better. S o a common mantra with kaizen is better not best. Just keep making it better just keep making it better and don't worry about it being perfect if it's not now. It may not be a thie end of the week, but you can certainly make it better. So go after it quickly and don't let analysis paralysis trip you up on weigh you down let's review the metrics so in round one, fourteen minutes and a half to get anything to the customer, uh, we had two good ones out of sixteen delivered to the customers, so the customer at this point is completely dissatisfied. I don't know if I go with a competition. I've been loyal with this company for a long time, kid, is there something we can do to toe work this out? Maybe it was just a misunderstanding, but we're not going to survive neither one of us, necessarily. If we if we allow this kind of waste toe haunt us, okay or try to cover it up. We started the zero and process. We finished with fifteen, and we even had a governor on that, so to speak. So susan was sort of governing her her process where she could have really piled it up if she wanted to make an extra bonus or go off to a special club or something like that that companies used to award people for for selling a lot of peak performance, okay, um, we had just all kinds of quality problems. Oh, boy, just all kinds of mistakes going on there and a productivity of point zero two units per labor minute not really sure what to do with that number yet but it's just telling us what are our card productivity is once we compare that to a benchmark we might realize wow, we are so far behind so we want to have that kind of intelligence to know I mean what what is there competition able to do and how how do we compare all right? Because your customers air doing that all the time and of course we lost a lot of money and round two as well. So as we as we look at the financials um our bottom line was was very negative, very red not good in business that's called either or not for profit or going out of business fast kind of thing that they're so let's review the customer analysis just a little bit. So what were some of the things that I was experiencing during round one? Clearly a lot of waiting right let's review that uh we had a couple of conversations s o j marie and I were talking on the phone and I kept what was one of the things I kept asking for when when am I going to get it? What am I going to get it? And then you also mentioned the competition that's right I didn't try to find out what was important to you you mind it's squiggly line for no tail yeah when I said no I can't of squiggly lines you know I can't have tails so we we got we gained that intelligence late in the game so to speak but I did say early on and it may have just gotten past some people I wanted six sigma diamonds now you could have said well what do you mean by six sigma diamonds? Well they're essentially perfect there there no flaws there's no tails there's no squiggly lines they're all exactly the same you know you could take two sheets and hold them up to a bright light and they're identical so okay uh what clearly had some issues with that? What about customer interactions? We had a couple during this during the round one I would love to have had it on a customer service person I felt like as the manager I couldn't really pay attention to what was happening over here because I was so much interacting and pleasing you so one customer success specialist would have been helpful in that in the interaction of it all so that sure so why don't we again? This is a very common practice why don't we add in this case we're going to add a customer service rep to respond to me when I'm disgruntled or when I'm needing something uh now the way clever cos perceived customer service is that if the customers calling to place an order to give money to give a credit card to buy something that's considered value added, all right, we're getting paid for that if the customers calling to complain it is not value added so adding more people to a department and then potentially offshoring it, which a lot of companies have done. We talked about this a break with some of you is a non value added activity that we've just now moved offshore and by adding more and more people to answer phone calls that cut the disgruntled customers are making is a very poor way to run the business for the clever cos they're saying, well, what are the top three reasons why the customers calling us and let's poke a yoke that that's makes mistake proof that let's make it so that those mistakes can happen or let's provide a self service option where they can correct their own negligence? Perhaps maybe they forgot their password or something like that let's make it really easy for them to do that so they don't have to call eight hundred line to talk to somebody I always ask people this in workshops, how many of you actually look forward to waking up in the morning and calling an eight hundred number to complain about something nobody writes like I'm gonna have to be put on hold I could end up waiting they're gonna have to call me back it's not something we all wake up and want to do in the morning but organizations have built themselves up around that that reactive methodology now apple computer for example looks at every customer call in some form of failure on their part if people are calling in um apples response is what did we do wrong? Maybe we didn't provide enough self service all right, so in this day and age is the same thing with like a facebook how many of you read the instructions to facebook? You know, in a technical manual you don't because it's so many of these uh these new offerings these new value propositions are very user friendly they're they're they're intuitive and they're easy to tto learn fifth graders can learn it third graders can learn it so uh what are we doing to make our business very user friendly so that the, uh the client gets timely, accurate fast, effective quality service? I certainly didn't get that way what we didn't know and round ah one is just what did I expect in terms of let's start with volume what we call throughput how many do you suppose I wanted in ten minutes? We never asked if we said to the client or the customer uh john, you know what you're utilization of these sheets how do you use them and how many do you use? I would have been very clear about that had I been asked I use thirty every ten minutes I use three a minute I use them one at a time I could give you those details so I'm using these wanted a time even though you're shipping them in aids okay, I'm averaging three a minute I need thirty in ten minutes and I got zero in fact I get you know too and almost fifteen minutes so you were totally not meeting my my demand all right and we a ziff we had we had no idea of each other's businesses now I always say this to people in in any size business make sure you know your customers customers that's skip level what is what is my customer doing with whatever it is product or service I sell them what are they doing with it? Who who are they reaching out with it because that gives us, uh, better idea better understanding of the supply chain that we're all a part of whether we realize it or not. Okay. So as it's easy and consulting if he's running a consulting operation you've got a client who's your clients clients who's your client's customers what do you know if they're if they're in aerospace there were they selling too all right, you know if they're in uh no payroll services if they're banking if they're in the health care what? Whatever. What? Who are your customers? Customers boy, that really helps you position yourself for a win win with whoever it is it's buying your stuff if you can help them to a better job with whoever's paying them now you're now you're a partner now youre a team as opposed to potentially an adversary. So how am I using these silly forms? What am I doing with him? Okay, in this case, I could say I'm distributing them, I'm like just a distributor and I can't distribute something that's got tails on it, okay, you could think of me like I'm an amazon kind of thing I'm taking in, uh products in its services and offerings and I'm and I'm just turning around and I'm selling those and so I've gotta have it to sell it it's time, a time based management's, very key it's got to be good quality it's gotta be priced competitively, all right? By the way, I don't typically care what's going on behind the curtain, so to speak doesn't matter to me. I don't see it typically, so I don't really I don't really care, but I care about is what I care about, so this is all about what do I care about and then what am I experiencing in relation to what a mai mai expecting and then round one? It was it was pretty. So this takes us to the whole concept of knowledge question is coming from daydreams, ceramics, and I know he's a follow up, they're coming in discussion, how this is going to apply to a one or a two person operation. I mean, what we've talked about so far is about different departments they're saying they're they're ceramic artists and they make tiles. They are the boss, they're the workhorse there, the customer service rep. How can I make this easy to understand from my perspective? Sure question back with me. Where do you get the materials to make the tiles? You said they make the tiles as well is distributed. Um, yes. Okay. So where the materials come from to make the tiles there's a vendor there's a supplier there's. Probably a group of vendors. Ok, did what could use equipment to make the tiles. So, uh, where'd you get the equipment? All right, who sells your equipment? And so, yes, we'll get into that. We'll get into that throughout the whole course. All right, the thing to remember is that I'm a one person business, but I've surrounded myself with vendors, equipment, suppliers, distributors published publicist publishers things like that were all part of a system will keep continue to come back to that but make sure that you recognize you're not actually running just a one or two person outfit you're part of a bigger system you've got customers how many customers does every customer wanted the same tile the same the same exact thing or are you customizing toe all of those things so let's make sure that we we uh we recognize were part of this system part of these interrelationships and let's make sure that we then uh uh throughout the best way to position ourselves t do that so I will be taking that on great we do have a follow up question ready fire aim wants to know how does knowing your customers customer our customers apply when you're selling to end consumers well that's a great question and so how are the end consumers using it what are they what needs air they trying to fill okay what what desires do they have so if I'm selling something rightto anand you from selling on an ipod rightto an end user okay what does the I end user using it for typically okay what what what problems are they trying to sell what needs do they have so the more intelligence we can gain about even the end user what I'll refer to in a few minutes is the big c the capital c customer client um it's what leads us then into innovation because all of a sudden I might realize that you know if I'm amazon and you've read this book this book and this book you might like these these other three books I'm starting to learn patterns about you okay I notice you're using your ipad for this this and this you might want to consider this new feature we come up with a new feature so the better you could know your customers whether they're the end user or upstream from that the better you can know your customers in there their patterns their habits their utilization of whatever it is you sell them the service what are they doing with these photographs what they're doing with the ceramic tile what are they trying to accomplish with that what look what um could be status could be any number of things what what uh what what about gaining intelligence into who's paying us and how they want to use it has given us ah ah a lot of insight as to how we can actually take take the next step which would be innovation coming up with things they don't even know they want yet coming up because it's it's like lee iacocca said many years ago nobody ever came to us and asked us for a minivan okay we did we invented the minivan so to speak by sending engineers out to grocery store parking lots to gamba and observe mother's predominantly or people trying to get in and out of tight parking spaces with groceries and kids and that's where they said what if we had a sliding door and what if they had a vehicle that was a little higher off the ground and here comes the minivan no one ever called up and said, hey design us a minivan nobody ever called up steve jobs is a divine us you know, designers and an ipod or an ipad so these innovations come from our knowing our audience so to speak so well what they're suffering from what their needs are, what their interests are, what their desires are and coming up with something that's the how of well which were to cover an another segment but the how why was coming up with things that people didn't even know they wanted and I was like, wow, how could I live without this gps system on my iphone think about all the abs now on the phone it's a flashlight it's a video camera you know it's a gps I've been waiting for this thing to fly me home you know it's like but it's still called a phone by the way there's a paradigm you know? We used it for all these other things but still it's still a phone smartphone now anyways but okay, so we start with knowledge and the and the more we can know about our business our process, our market our competition are our audience this is what leads to intelligence and with intelligence we get an opportunity now to innovate all right and come up with things that people didn't even know that er could be done okay I like to think of when I think of innovation I like to think of what jeff bezos said amazons been doing you know it's talk about a destruct disruptive business but here's amazon that was put on the map many years ago by selling books online right back in the day when people say well nobody's going to give their credit card on the internet but you know some of you remember that's like it's too risky now people are buying stuff with paypal and everything else on the internet but amazon's going to sell books online what's what's that all about well you know the story of the amazons it's done remarkably well and grown and grown and grown and now all of a sudden incidentally I I right I've written a lot of books amazon's a big distributed mine along with barnes and noble's another others but amazon says you know what their process just so you know is when they order a book they send in elektronik order you have uh forty eight hours to confirm everything is timed forty eight hours to confirm once you confirm it downloads a label and the picture two pieces of paper the label goes on the package with the books the pick sheet goes inside and says here's what you ordered and bar coded so off they go in the in the mail um and when they received their scanned and that triggers payment to you x number of days later so there's no invoice seen there's no there's no other paper in the system is down essentially two sheets of paper and it's a very lean, very flowing type of system it's a whole system and was on scratches their heads and says, um two pieces of paper is too much now that's an odd thing to theo really to pieces and uh but the idea is well, yeah, now that you know you think about it the whole book is could be considered a form of waste unless the client's actually want a physical book maybe they just want within the book the information okay or the artwork or or with the knowledge gained from the book of the entertainment from the book whatever kind of book it is maybe that's what they want so what's another way to get people that faster, better, easier lower price what if we could just beam it to him? You're sitting on an airplane, you want a book here you go sitting on your couch sitting in your office hotel room you want a book beam it to you what we're going to have to have something to beam it to, and here comes the kindle that's where this comes from its understanding forms of waste that we don't even think are wasteful but mailing something across the country and then in invoicing it back and forth is an option and a lot of organizations make a lot of money, mail and things back and forth and delivering things that's, that's, it's the way of the world but why not offer an alternative? Not an either or because some companies get into the either or mindset words either it's elektronik or its physical what we're going to go with physical because people are never going to want to like, not go to a bookstore, they're never gonna never want a physical book. Why? Because that's what I want well, the person sitting next to me might want something very different worlds not based on what I want, so we come up with options. The only reason barnes and noble still in business today borders books is gone is because of that e book option uh that's a that's that's game changing borders is calling one of the biggest, most successful book stores in history is gone and uh and barnes and noble still in play an amazon is doing very well because it's, it's, it's innovating why don't we now you know you've seen you've seen episodes where amazon's going to deliver stuff to your your yard with a drone, okay? Or something like that, but they're they're constantly searching for alternatives and it's fun to see its creativity it's spirit expressed in very interesting ways it czar creative spirit so, um, you know, I just I think of the innovation as well, why don't we just be me? The book is supposed to get better at distributing the book to you physically, and by the way, can we get better at both the answer's, of course and that's precisely what's going on powerful, but we use that knowledge, you know there are there are certain clients out there in fact, if you went like lee iacocca son engineers off teo two grocery store parking lots go off teo street corner watch kids go to school these days with backpacks that way, forty pounds full of books and things like that and scratch your head and go wouldn't it be interesting if they were just walking to school with a little lightweight template that had the entire world library on it that had every lesson you could possibly ever need on it or available to it? So the school systems are changing dramatically right now uh, because of the new technology we have all right I think about the price of some of those books if you got kids in college I got for you to go through college and two in college the price has put a price on some of those textbooks and you're like wow so the world's changing and we wantto of course change with it and it all starts with knowledge knowing our audience knowing our students knowing our patients knowing our consumers um innovating realizing those gains and then coming up with competitive ways teo differentiate ourselves so this is what we're always trying to do in business and ultimately that leads to good habits and culture change well peter drucker said this he said knowledge has become the key economic resource and the dominant if not the only source of comparative advantage so we want to pay attention to knowledge basically looks like this we're shifting deliberately from and I think mindset tone I know mindset so I say teo jamari what am I going to get my product I think you're going to get it within a couple of minutes I think you're going to get it it uh you know, ten o'clock I think you're going to get it um uh next tuesday you know and see that's the question in a world class system we know because we measure it you know peter drucker also said you know what gets uh uh measured gets managed with mick it's managed kids have done so, are we measuring it? And then are we managing it effectively? That's. This deliberate shift from I think that I know we'll spend a lot of time on it.