The Control Phase of DMAIC
To build on what we we let we left off with earlier a review of of kaizen and what makes it a successful kaizen or change event what makes a successful business if we're in the business of change of we're in the business of running a better faster a leaner business so some of the things we want to make sure that we've accomplished when we start a business build the business grow of business and run caissons throughout our life and one is that good changes actually been implemented so that's the litmus test if you will if we're running an event did we actually make change did we actually execute change because a common failure mode is that no actually we didn't we just debated we talked about it we we went around and around and around but we never actually came together and executed and implemented and made that need to go change. So the first question I typically asked when somebody tells me we ran a guy's an event on on something I wasn't simply asked what did you change what changed ...
all right and today that's what guys and me and so I'm the improvements are measurable that can actually measure the performance the progress so earlier you know we were shooting catapults and we had a twenty nine inch range and by the end of our kaizen event we had a five inch range and we were able to shoot the ball into a three inch cup all right and well that's measurable and it's good change because we took all that variation out we saw the same thing earlier in the lean segment game so the improvements are measurable that changes their user friendly we didn't actually make it harder on our people we made it easier on him because again that's challenging that paradigm that the harder we work the more successful will be maybe we could be successful and work easier that really stretches his talk about getting outside the box right um so the new processes easier it's safer it's more ergonomic could be greener could be 00:01:57.433 --> 00:02:00. more environmentally friendly things like that and 00:02:00.38 --> 00:02:04. we can measure that prove it waste or mood a as they 00:02:04.36 --> 00:02:07. call it japan has been eliminated we've taken out 00:02:07.1 --> 00:02:09. a lot of the waste the non value added activity and 00:02:09.77 --> 00:02:14. the white space the nothingness space the team had 00:02:14.13 --> 00:02:16. fun I think that's important so we're running an event 00:02:17.24 --> 00:02:19. today people get you know that actually it was kind 00:02:19.58 --> 00:02:21. of intense but it was fun we're gonna do it again 00:02:22.27 --> 00:02:25. we were goingto do another kaizen event that's another 00:02:25.63 --> 00:02:28. litmus test for me when people say I actually want 00:02:28.97 --> 00:02:31. to do another event to make change what does that 00:02:31.75 --> 00:02:34. tell us about people resisting change if they say 00:02:34.8 --> 00:02:38. I want to do another change event well maybe we don't 00:02:38.53 --> 00:02:41. resist change indeed maybe we resist something else 00:02:42.39 --> 00:02:44. our perception of change if our perception of the 00:02:44.72 --> 00:02:48. change is negative or painful but this is going to 00:02:48.74 --> 00:02:51. hurt we probably put the brakes on but if our perception 00:02:51.86 --> 00:02:54. of the changes actually this is going to open up the 00:02:54.81 --> 00:02:59. doors to more creativity or freedom more growth more 00:02:59.01 --> 00:03:04. opportunity more money wow I'm in s so it doesn't 00:03:04.65 --> 00:03:06. change people resist that's an illusion 00:03:08.22 --> 00:03:11. so the team learned a lot I don't know that I've ever 00:03:11.16 --> 00:03:14. run among hundreds and hundreds of these events and 00:03:14.22 --> 00:03:16. if that where people didn't say you know what I learned 00:03:16.73 --> 00:03:17. something new 00:03:18.27 --> 00:03:21. I came out of this with him really valuable takeaways 00:03:21.76 --> 00:03:24. frequently during these events people tell me you 00:03:24.49 --> 00:03:27. know what I was at home last night doing the dishes 00:03:27.15 --> 00:03:29. or laundry or making a meal or 00:03:31.35 --> 00:03:34. mowing the lawn or something like that and I I used 00:03:34.81 --> 00:03:39. a different method I actually applied some of these 00:03:39.38 --> 00:03:44. principles to my home work and made a huge difference 00:03:44.16 --> 00:03:46. so I love it when I hear that does that mean that 00:03:46.08 --> 00:03:48. tells me people are personalizing it in there they're 00:03:48.76 --> 00:03:50. making it really all right 00:03:51.82 --> 00:03:54. you know uh people outside the team want to get involved 00:03:54.98 --> 00:03:57. you start to hear people say how do I get into one 00:03:57.58 --> 00:04:00. of these events so in larger organizations that it's particularly important because now I get people saying when can I get some training on kai zanon making change on leading change when could I get involved in an event to make my business or my area better faster and leaner when can I do this that's where we use intrigue and pull to get people excited about it get involved as opposed to forcing people to do it is when you force people to do it you get this pushback but when you intrigue um and you pull him and they and they discover for themselves that this could be very valuable to them in more ways than one and they want to do it now you got him here and you're not forcing them from here and I love to see that uh when we run these events these improvement events that at the end of it all it isn't just the process that's changed it isn't just the policy that's changed it's the minds have changed people's minds have changed that there they're different than they were when they came in that's powerful and that's very transformational so some of the principles to keep in mind when we're making good change and seeking that better faster leaner business large and small is that the the only thing that we say no to is the current state the status quo when we go into cousin the one thing we say no too is we're not staying the same that's a little bit different everything else is open game but we're not goingto leave this event with the same thing we had when we came in that's that what this is about so we're going to say no to that current state whatever it is and we're going to come out of here with a better state we're going to ask why and we're gonna ask why a lot we'll use tools like the five wise to drill into why do we have this policy why do we have this procedure the way it is why do we do it in this particular method why why why? Because beneath the wise is, uh a lot 00:05:58.443 --> 00:06:01. of assumption that we want to uncover and when we 00:06:01.19 --> 00:06:03. uncover those assumptions and we'd make a shift at 00:06:03.43 --> 00:06:07. that level, it could be quite magnified terms of results 00:06:07.77 --> 00:06:09. so that's what we're searching for challenging those 00:06:09.9 --> 00:06:12. assumptions and paradigms we think creativity before 00:06:12.38 --> 00:06:14. capital a lot of people think they gotta have a lot 00:06:14.7 --> 00:06:18. of money on they've got to go to a lot of debt things 00:06:18.08 --> 00:06:21. like that it to make good change and the truth is 00:06:21.84 --> 00:06:24. no you don't not necessarily there's a lot you can 00:06:24.44 --> 00:06:27. do with the resources you have if you're resourceful 00:06:27.28 --> 00:06:31. if you're clever and you're creative so at least think 00:06:31.01 --> 00:06:35. creativity before capital and uh and build your business 00:06:35.01 --> 00:06:38. with what you have and tap into the resource is that 00:06:38.82 --> 00:06:40. are abundant all around us for help 00:06:41.46 --> 00:06:44. work for me that's for sure keep an open mind, keep 00:06:44.62 --> 00:06:48. an open heart and that's what? We were curious, we 00:06:48.36 --> 00:06:50. pay attention, we pay attention to what we pay attention 00:06:50.81 --> 00:06:54. to we pay attention to who we pay attention to we 00:06:54.28 --> 00:06:56. really open up our minds and explore and we do that 00:06:56.9 --> 00:06:59. with a lot of questions which I'm going to cover in 00:06:59.28 --> 00:07:02. this entrepreneur segment which follows this one 00:07:04.26 --> 00:07:07. uh but thea seek the wisdom of many work as a team 00:07:07.63 --> 00:07:10. center jai's on dh put the team mission first think 00:07:10.59 --> 00:07:14. we optically not me optically so let's come up with 00:07:14.32 --> 00:07:17. a wee opic vision what well it's a win win result 00:07:17.26 --> 00:07:19. for all of us in this and that's really rally the 00:07:19.73 --> 00:07:21. troops around that be part of the solution not the 00:07:21.71 --> 00:07:22. problem 00:07:23.26 --> 00:07:25. can your part of the problem when you take that cave 00:07:25.51 --> 00:07:27. mentality that cynical or complain about virtually 00:07:27.91 --> 00:07:29. everything mentality I let it go 00:07:31.06 --> 00:07:34. all right let it go there's there's hope there's there 00:07:34.09 --> 00:07:36. are results out there that we have not yet discovered 00:07:36.38 --> 00:07:40. their solutions we've discovered uh this entrepreneur 00:07:40.04 --> 00:07:43. and the proactive leader finds him and believes that 00:07:43.69 --> 00:07:46. he or she will it might take a while 00:07:47.52 --> 00:07:50. we're gonna find him and that that's exciting to people 00:07:50.36 --> 00:07:51. that's intriguing 00:07:52.76 --> 00:07:55. and what about the better not best meaning hey maybe 00:07:55.61 --> 00:07:57. it won't be perfect but if we can prove it's better 00:07:57.64 --> 00:07:59. than it was how can we call that a failure? 00:08:00.88 --> 00:08:03. The let's continue to make it better and better and 00:08:03.64 --> 00:08:05. better and see what happens and see what we could 00:08:05.24 --> 00:08:07. learn in the process and that that's that leads to 00:08:07.31 --> 00:08:10. never stop kaizen I had never really and so we continued. 00:08:10.56 --> 00:08:13. Teo, explore we continue to learn and we continue 00:08:13.91 --> 00:08:17. teo discover new technologies available to us new 00:08:17.8 --> 00:08:21. techniques, especially for benchmarking other organisations 00:08:22.08 --> 00:08:25. keep in mind benchmarking other organizations doing 00:08:25.59 --> 00:08:28. it better to you so that you can catch up to them 00:08:28.05 --> 00:08:29. is called following 00:08:30.32 --> 00:08:33. that isn't leading working in a guy's an event just 00:08:33.45 --> 00:08:36. recently with a company and the process that was taking 00:08:36.54 --> 00:08:38. this company five months on average. 00:08:40.83 --> 00:08:44. It was unacceptable on undesirable effect worth a 00:08:44.71 --> 00:08:47. lot of money and a lot of it was a lot of pain and 00:08:47.15 --> 00:08:48. struggle 00:08:49.23 --> 00:08:51. with the benchmarking data revealed that 00:08:53.18 --> 00:08:56. the competitors that could do in three months we're 00:08:56.52 --> 00:08:57. at five and 00:08:58.68 --> 00:09:01. benchmark is three and there were people on the team 00:09:01.42 --> 00:09:03. it's a cheese what's it gonna take for us to get to 00:09:03.11 --> 00:09:05. three? How do we now? How do we take out a lot of 00:09:05.98 --> 00:09:07. the waste of some of the things we've played with 00:09:07.59 --> 00:09:09. here to get to get to three? 00:09:11.08 --> 00:09:13. And I said tow to the team I'm going from five to 00:09:13.91 --> 00:09:14. three is following 00:09:16.29 --> 00:09:19. this is about leading so here's a question for you? 00:09:20.38 --> 00:09:23. How do we go from five toe one? 00:09:24.98 --> 00:09:27. And we came up with a project out of that analysis. 00:09:29.78 --> 00:09:32. That said, ones too much. We're going to go to fourteen 00:09:32.93 --> 00:09:36. days, two weeks, and we ran a guy's, an event on it, 00:09:36.33 --> 00:09:40. and figure it out. So from five months to two weeks 00:09:40.34 --> 00:09:43. when the paradise that the paradigm could've been 00:09:43.75 --> 00:09:46. going from five to three. So knowing the difference 00:09:46.71 --> 00:09:50. between following and leading is ah, is powerful. 00:09:52.88 --> 00:09:56. So here you go, kurt. In case you, uh, I wanted to 00:09:56.38 --> 00:09:59. spell spellcheck or something, that culture, its strategy 00:09:59.6 --> 00:10:02. for breakfast. Peter drucker, one of the great minds and business and management for for many, many years on dh, no, author of dozens of books culture. Its strategy for breakfast let's. Make sure where we recognize that large and small industry and industry. We are all interacting with culture, it's like gravity, and we need to understand that culture and those forces against us. Teo toe, work with it. It's, a critical success factor toe teo, teo, engage and and use culture to our advantage. Not let it, you know, take our knees out from under us. Now drucker also said quality in a service or product again in any business that way happen to operate is not what we put into it or what you put into it really it is what the client or the customer gets out of it so at the end of the day and you know entrepreneurs wanna trip preneurs solo put entrepreneur's business leaders recognized that at the end of the day what do we get paid for? What is the customer get out of this is we can put all the hard work and best efforts into it but if we haven't if we have any a customer that sees us perceives us as value added is worth paying for we're we're soon gone so great another great comment from peter drucker so this session we're going to do is review the control phase of do make just a little bit and then we're going toe tee up some questions and into our hot seat discussions and so with that I encourage again those at home or in the office around the world if you've got specific question or specific challenge that you're facing something of specific you wantto send that in to us well well we'll try to work that into our dialogue and address so that we could be very clear and specific on the issues of the challenges that people have all right, we'll open up discussion then on these challenges and on these issues with a with a variety of members here in the studio audience and else is also online also explore some of the questions that every business owner and entrepreneur should certainly be considering asking and answering to run their business is smarter, better faster and lower cost and leaner fuel so in domestic we get to that sea we haven't spent much time on the sea yet we've referenced some of the tools here we referenced five s and they everything's got its place it's organized it's clean it's ready to go we don't have to spend a lot of time searching for it looking for and then finding it and discovering that it doesn't work it's broken or to dirty everything is organized orchestrated so you know we've got five s and then we've got we discussed combine and pull systems and inventory control just a little bit which isn't just about widgets you can cut you know you can organize and control your your laptop you can organize and control your office space so that your so that it feels right those who understand function way and the the the energy if you will of a room of a building of a household or an office environment as a powerful energy that we're all a part of its part of culture it's invisible just like gravity but it hasn't impact us on us in fact here's a quote from einstein it's not in the material I don't know that I put in the material, but einstein once said that that the field which is just another name for culture or for grant for for the the universe, if you will the field is the sole governing agency of the particle. So the field, the environment that we work in is a very powerful and profound effect on us, the particles all right, and you could see this in a lot of scientific experiments, you know, if you if you take a human cell a particle, so to speak and put in a petri dish and you add in a toxin that cell races for the walls to get away from that talks and it thinks for itself the human cells actually think for themselves with the membrane, which is that not the nucleus of the cell but the skin skin is actually the brain of the cell. So the cells actually thinking for themselves and what people don't realize that very powerful information because if we get fifty trillion cells in our body and they're all thinking for themselves, what happens if they don't get along what happens if they're not aligned? Yeah oh, really? So I spend a lot more time on that in the next segment as well, but by the way you put you put up a nutrient in that petri dish and one of the cells do they're going to raise for the nutrient wow, I was that the brain told everybody what to do you talk to you telling me that this else actually think for themselves yes they do and they're listening they're listening every minute of every day to whatever we're experiencing any environment I'll talk more about that but the crowd control phrase with project plans we have you know things like you know governance accountability tracking system's how do we keep score measurements cost benefit type of data on de so I'm gonna cover just a few of those just to tee up some of our dialogue then for for the rest of this segment of project planning and you saw a lot of this revealed in the charter so you've got this in your deck now but here's some of the questions that every business leader every entrepreneur should most certainly be considering everyone what am I going to call the project to call the business businesses have names projects oughta have a name I'd like to see clever projects you know project name something fun something innovative as opposed to you know project x let's come up with something that's uh intriguing it's it's it's helpful what's the scope of the project how much of this uh value stream are we goingto amen how much of this process or we're going to aim it we scope it too big and now we're completely overwhelmed and we're tryingto solve world hunger who sculpted too small we might make a a difference that doesn't really matter if it doesn't flow through to the customer so scoping zaveri kik element business into business planning and takai zani major activities what are some of the major activities we've got to accomplish in this things like data collection things like data analysis things like mapping things like no planning you know what's what's our plan look like that's a major activity quoting how do we get paid all right how do we communicate with with customers there's just so many variables we have tto have to brainstorm and think about so uh in addition to the major activities where some of the major goals alright in milestones how do we know we're ahead or behind how do we how do we know we're actually hitting what what we've targeted so we've got in again you smart goals their specific measurable attainable relevant in time what do we need to get involved in this project? What skills? What competencies what knowledge do we need so how do I make I sure I surround myself with people who are expert in what I need expertise in to challenge the assumptions and and synergize right? So I'm always thinking about who in fact it's a whole chapter in the books entrepreneur can help us with the how just another chapter which all correlate who could help us with the how so for many years now and on my business a small business I've been looking at who can I tap for help and support part of what I call that constituency for change who who can I tap toe help me build this business initially when I started writing who can adit help edit the books who can I tap into university professors, executives, friends, family who can help me s so that the book has edited a properly because I was doing this early on without a big publisher with copy edit and you know final edit and I was I didn't have the money in the staff to do that so it was a self publication and it was your self published you gotta have people that could do do the editing checking for you you know you've ever written something and gone back and reread it later and you find typos or you find something that doesn't quite make sense you know oops you might not catch it yourself so somebody else somebody else will hm all right so uh what about sequencing of steps we've we've played around with sticks sequencing a lot how we're going to sequence the steps so that we've got a healthy business plan put together healthy project plan you know one's a project to be completed let's target a date that's the t and smart it's time all right and also it's key to accountability we don't put a date on the end of it it could linger for years that could leave you could ever get done! What are the expected costs and benefits? This is just simple cost benefit analysis what's it gonna take to get this thing launched what's it gonna take to get it done and then what's the benefit of that going to be what's the return on investment do you want to speak business language? You've got to speak roo I return on investment you've got to think about math and money in dollars and cents because that's business all right, you're going to lose your audience and you're gonna lose credibility pretty quick if you haven't thought through how you going to finance your business? Are you going to finance your project? Because it's one of the first things of the supporter a sponsor, a banker and executives gonna ask what's this gonna cost and what's benefit on it and then who's leading it? And along with that comes a whole lot of other questions that we've discussed already around credibility, influence capability, here's your cost benefit just some of the things to consider to go into your project or you go into your business. Planning is you know what I'm goingto have to spend on labor, how much help do I need and who needs tto do what what competencies you could take this down to a deeper level, but the end of the day what I need in terms of budget to pay for labor but about material, you know, film tile, um, computer software, telephones, yeah, what I want, you know what I want in terms of material and equipment supplies, things like that. All right, I've gotta have operating supplies, training. So, uh, how am I gonna make sure that people that work for me, you know what to do? And with training how am I going to standardize the training well I can't standardized traded if I haven't standardized the works and how we get back into the standard work that we talked about before so let's let's standardize the work like we did with the catapult and then let's train people on the standard procedure so we can murphy proof it so to speak so some some of somebody can come up there and follow your procedure and almost get it in the cup hit the room all right but we want to make the trading as easy as possible in a lot of companies have said to me over the years we've got a high turnover people keep leaving and it just cost us a fortune to keep leaving well okay you got you got more than one problem one problem is yeah they're leaving for for reasons and you can root cause that and do something about those causes but you can also make your process more robust to the fact that they are leaves and I always use this metaphor think about a college basketball team are you know college tennis team football team or whatever what's happening every year I know what I said college people are leaving you know there's turnover great players air leaving their graduate that's a good thing so how is it that you continue to sustain a champion level team when you've got twenty to thirty percent of your players turning every year you have a robust system you have a great recruiting system you have a great training system you have a great game plan so you're bringing in people in their learning faster fitting into your strategy and there and they're winning oh oh well that might explain why people are leaving too because we don't have that you know we're just shooting the catapult all over the place and we keep you know, yelling at our diamond department because it doesn't seem like they know what they're doing and we've got people that tell us that you know they're overwhelmed and the system so it's good to be good people on a bad system good people will leave good people leave so that's why I said you had two problems one is they're leaving yeah okay that's now you got to retrain everybody but your training retraining them and allows the system to make the system better and you've you've you've captured a lot more than just one problem we also have to think about not just the costs but the benefits from the from the projects or from the business that we're starting up the business that we're running so things like customer impact alright how is this project can impact our customer if the answer is it's not well then uh okay why are we doing it doesn't mean we won't but its eyes again I ask what? How does this impact the customer we saw it. Most certainly don't want it to impact the customer in a negative way. What about reduce costs? Is this going to reduce costs? Good question to ask a question to think about. This is all part of running your business. Better, faster and leaner. Increased throughput. We're going to get more through. Increased capacity we're going to have more capacity toe to utilize for growth we're going to free up resources and time space money better utilization of assets and resource is these are the things we were demonstrating in our simulations these are the things to think about when you're designing building planning a business or executing a business that's already in place it's if we don't think in terms of these outputs then we're not speaking the business jargon that we need to to have credibility in the business world all right? And no matter what area we come from we come from a lab we come from an engineering background a technology background of financial background ah human resource is background and it background it doesn't matter we were going to be successful as business leaders as influencers of changing business auras entrepreneurs we have to know how to think in terms of business not just are functional area of expertise we have to broaden our scope I know a lot of brilliant phd statisticians that cannot speak business jargon and no one takes him serious and their phd statisticians in some cases rocket scientists and they're great at running experiments and they're great at niche type work but when you put him up in front of aa group of executives to talk about a broader scope you get lost in in words and in jargon that no one can understand because they haven't connected with their audience so what we're going to measure and how we gonna measure it is a critical bit question in business um here's a project plan we reviewed one of these earlier is but this is just simple it now that we know the major activities we know the sequencing we can lay that out we know who's going to do what we've got time lines with one picture and we could put this up on a wall and a and an officer in a shop or a warehouse with one picture we can actually see day after day after day uh where are we are we on track who's doing what it's part of a very visual system and very helpful we've identified are expected benefits so everybody's focused on all right we need to we need to deliver so is this leads into that whole idea of a balanced 00:26:06.152 --> 00:26:09. scorecard some of the things we want wanna track our 00:26:10.0 --> 00:26:13. way are we gaining new business bringing in new quotes 00:26:13.81 --> 00:26:16. we bring in a new business how many all right can 00:26:16.49 --> 00:26:19. we put that on a run chart? Could we make that a visual? 00:26:19.52 --> 00:26:23. What about additional business? Are our existing businesses 00:26:23.8 --> 00:26:28. customers asking for more? Are we growing little some 00:26:28.05 --> 00:26:31. call wallet share we gaining wallet share getting 00:26:31.52 --> 00:26:34. more money from the clients we already have because 00:26:34.26 --> 00:26:35. we're adding more value 00:26:36.72 --> 00:26:38. operating income that gets where we get into cost 00:26:38.9 --> 00:26:42. reduction because now if we've got revenue with reduced 00:26:42.88 --> 00:26:45. costs we're going to have higher margins hire business 00:26:45.4 --> 00:26:48. profits cash flow things like inventory receivables 00:26:48.88 --> 00:26:51. interest expense are cash we're getting we're getting 00:26:51.9 --> 00:26:55. a return on our money faster all right this would 00:26:55.36 --> 00:26:58. be also be synonymous with things like inventory turns 00:26:58.67 --> 00:27:00. cost avoidance you know what? We had a lot of money 00:27:00.64 --> 00:27:03. budgeted that we've just discovered ah way we don't 00:27:03.11 --> 00:27:06. have to spend now we don't need that extra warehouse 00:27:06.12 --> 00:27:08. because we're turning our inventory twice as fast 00:27:08.49 --> 00:27:11. and the one we've got we don't need that extra office 00:27:11.29 --> 00:27:14. space because we just found a way to lean out the 00:27:14.11 --> 00:27:16. process to the moment we don't even need the seven 00:27:16.47 --> 00:27:18. people we had we can do it with three 00:27:19.72 --> 00:27:22. and we can free up capacity to do something else so 00:27:22.83 --> 00:27:25. this is working smarter not harder and avoiding a 00:27:25.36 --> 00:27:27. lot of costs that we might otherwise build in 00:27:29.82 --> 00:27:31. so additional things to track the non financial not 00:27:31.96 --> 00:27:35. everything's about money so can we track the customers 00:27:35.45 --> 00:27:38. impact the customer's experience of course we can 00:27:38.4 --> 00:27:41. that's critical so it's just against not just about 00:27:41.43 --> 00:27:43. money are we faster it getting things toe launch we 00:27:43.9 --> 00:27:46. faster at responding to the customer and delivering 00:27:46.64 --> 00:27:50. whatever it is we do? What about organizational capability? 00:27:50.17 --> 00:27:55. This is organizational smartness organizational ability 00:27:55.55 --> 00:27:56. tio 00:27:57.42 --> 00:28:01. do more with less without working harder when emphasize 00:28:01.46 --> 00:28:05. it again we can we can we measure and track organizational 00:28:05.54 --> 00:28:07. capability where we've got more trained experts we've 00:28:07.99 --> 00:28:12. got we can actually do more with with lus weii saw that in in the illustration with the lane segment game and finally with culture change we called standardized excellence what they're similar to what we saw with the catapult where it's it's just it's easy just pull it back count to three you know load the ball and shoot it in the cup where's in round one it was just chaotic all right we could lay this out in some kind of a visual again and hear the different projects we have going on by name and by number and these were the expectations we have for each one and this is what businesses air doing to say all right well if we if we execute these five projects at the end of the day what can we report in terms of expected savings specially publicly held companies if you grow your business into a a big enough business where you take it public all right now it's not now you're ofsome very accountable to shareholders who expect youto pay attention to this kind thing and track it because you've got to predict every every quarter but your results are going to look like and then you have to hit him you ever played the stock market it all you know how how much variation there is there kp eyes or keep performance indicators so what are those key performance indicators? Things like cycle times on time deliveries. Quality yields okay employee turnover safety those would be keep performance because you could design a little scorecard anyway you want and the balance scorecard again the idea of balances that if all we focus on is quality we could have great quality but take a lot longer and upset our customers because we take too long or we could focus so much on quality that we actually spend a lot more money than the market's willing to bear so we can't just focus on quality we've got to balance that with an emphasis on money but we also have to balance it with an emphasis on time that's up to balance it with an emphasis on our people safety or economics things like that daddy of the balance scorecard is not to make one thing better and everything else worse it's to keep three operation in balance so some of the most common things on a bounce scorecard with things that would be customer metrics we had this discussion earlier so demand what's the customer demand and are we filling it on time the phil rates so to speak a number of complaints do we get complaints how many what are they can we put those into a parade oh chart so we can see by a slice of pie so to speak what's ah what's the most common complaints now we could take that day to do the analysis and start to poke a yoke mistake proof our process so we're no longer getting these common complaints we've outsmarted it safety very common quality time lead time cycle time's replenishment times things like that change overtimes productivity we measured that in the lean sigma game what's our productivity all right which is in some kind of an output per labor our output revenue for labor hour here's ah you know one of the metrics that some organizations will use like especially retail is ah revenue per square foot think about that metric for a minute you're selling something and you have revenue per square foot what would an inventory turn high inventory turn due to that metric versus a lower slow inventory turn big time right so organizations like a walmart or a target they're measuring revenue per square foot because the faster they khun cell and turn those inventories they're getting more revenue in the same space that's clever ingenious all right so we got to pay attention to that inventory days of supply turns cash things like that innovation could we come up with some clever ways toe measure how how innovative we are maybe hominy kaizen events were running are successfully maybe you know how many ideas were capturing and implementing things like that so if innovations important is an old saying we get what we inspect not what we expect if something is important to us inspect it put it on your balance scorecard make sure you measure it we'll finance well you're gonna have definitely be measuring financials from reasons you have to you know things like that so what do our revenue is looking like our costs etcetera and then culture culture could be anything from the number of experts you trained greenbelts black bolt's or the number of project leads the things like that so we're training you know we're measuring our training because it's uh it's we're feeding our culture with more skill and knowledge we could take surveys of employee morale so employed confidence things like that we could certainly capture employee turnover these are just examples but I highly recommend one of the very first things I do if I was going to write a business plan and it is I think with the end in mind what am I going to keep score of that really matters and I said this thea another session it's certainly measure something relating to the customer it certainly measures something related to quality two time just think about renee better there's quality faster there's time leaner there's a cost and flo type you know data there you have several right there you think about what we're going to measure that's going to keep the whole thing honest and uh and important so think about what you're going to measure come up with a little scorecard and then you've got to figure out how to weigh how do I get good numbers hide away? I don't get good numbers and then whatever the numbers are with guys and I asked, how do I get better numbers to get better numbers? Why do some of these efforts failed and sometimes they do maybe you've been part of that and I'm one company or another our research shows the number one reason is right with the executive and senior leadership teams support commitment and alignment of the senior folks or the entrepreneur the founder of the senior level people in the business large and small if they're not fully committed from the heart aligned and supporting the change effort all the other activity can be done and frustration and in vain because it really have to have that that senior level support you're running a business or starting a business you've got to remember that that you are a make it or break it point leverage point you look at this a management support leadership alignment is the number one by far reason that change efforts don't work there are other reasons we don't follow the process for example the domestic process and was just just jumped I hey we don't keep up with the training that we might but we might need we fall behind things like that but look if we don't work as a team things like that but if you look way out here a lot of people are freaking out about why you know you covered a lot of a lot of some you know, statistics and tools and there's there's lots and lots of these tools and I'm not sure I'm going to get it all that's very low on the on the list here in terms of failure modes you can always google the tools or you know being the tools or looking tio helping andi howto run some of these tools get on the phone call people that's not the reason these efforts failed the reasons these efforts fail predominantly because we get in our own way we get in our own way we'll spend a lot more time on that as we get into it but I wanted to cover some of these these failure modes before we get into our our hot seats just because might trigger some thinking about you know what wow that's true I ran into this or I ran into that you know can't you even said this morning you know you talked about well I haven't always followed to make I didn't know what it was and I it's cost me that's hurt me in the past well that's a great ah ha that's a great wake up because sometimes if you can see the solution if you stop you can see it new york and you to implement it today but the big aha wass you need to have your team be involved sure otherwise they will not implement it there we leave a room that shows up over here too a lot of times no matter how smart we are if we try to do it all by ourselves and then we go to hate here, team here's, the here's, how we're not going to shoot the catapult or here's, how we're now going to do whatever it is we do and they go, I don't want to there's another old saying. People are less likely to argue with their own data and solutions. Okay, so if I'm less likely to argue with my own data and solutions, really, maybe if I get involved, I won't be so resistant that socratic teaching, oh, socrates, use this, you know, a couple thousand years ago to teach what using what I call the principle of discovery by getting you involved in getting you in the data collection and getting in you the root cause analysis you discover is a team for yourselves, the need for change, the frustrated that you know that trigger points the frustration you're bought in by the time you get to a and domestic or certainly by the time you get toe I and now we can. Now we can find a solution together that we all agree on without voting without without dividing. So the overall impact if to put a high kind of two part aipo together here if we work backwards, we said at the end of the day, we want our business to provide customer value because that's, where the cash is coming from that's, what's going to keep us healthy and growing as a business. We've gotta have organizational capability that allows us to do whatever we do. Better, faster, lener, smarter. We should see that in top line growth and bottom line growth in the day, our business is growing stronger and healthier and wealthier, and we've got a culture that's inspiring people they want to work for us. They hear about us, it's, that it's an exciting place to be. So if these air these high level outputs, what do we have to have his inputs to realize these outputs? We have to have evidence that we are better than we were before. They were faster than we were before. They were more user friendly and lower cost than we were before. And so this is what this course is all about it's about getting to here, which will manifest into here. How do we do? And we've done this with a couple of different illustrations and simulations. Now, it's, another question becomes, how do we get to hear what the critical inputs to here and here, uh, a top ten, so to speak. One is that executive commitment and the leadership. And second is leadership alignment. Why are those important? Because if we go back one slide. Harris hopes that's right here those air critical inputs critical input so all right you got the executive commitment we're behind it the sponsorship this is this is if you're if you're the executive or you're the entrepreneur the solo preneurs the founder of the company is you so you want to pay attention to this I've got to be committed and I've got to be aligned that means I've got to be aligned with my constituency with my support team with my my team my people I got to make sure I'm working on the right projects things they're prioritized that they have charters that there there's there's a good business case for those things I've got the right people working on it some full time some part time whatever that works out to be but we've got we've got we've got a resource and populated we've got the right tools to do the job according to make and some of the tools we've covered here we've got the right measurement system in reward system the right incentives we're not consenting the wrong behavior so to speak like we saw in the lean sigma game we've got the right incentives and measures in place we've got the right support systems in place to support us so it's user friendly and easy finding data I need information I can get it at a at a click I don't have to go searching for it so our support systems are aligned our procurement systems, everything, we've got, the right structure and the right reporting relationships, we've got the right amount of authority and accountability and empowerment built into our design. We're lined with our customers and our suppliers, who were part of a value system, value chain value stream. That makes sense. So when we've got all of these and play, and I find problems with these all the time, so it's important, find out which ones we need to work on the most. If you've got issues and your business, you might look to this list and go, I can tell exactly where we're struggling, okay, all right, we are, we've got problems we've got. We've got a bunch of projects going on that no one knows where they came from. I went into aa major. Ah, pharmaceutical company. Thiss was probably ten years ago, and at this particular facility, they had over a hundred projects in play. And I and I said, tow mom, what's your on time completion rate. There would be an important metric. It was, like ten percent. So they were finishing projects on time at a rate of about ten percent. That's. Not very good, right? And that was one of the reasons why we were going to kai's in this so we put a team together we put we got together for a week in a room and we weii defined and measured every one of those hundred plus projects so we had all of them listed out and we did what I call a reverse fm a meaning let's ask what could go wrong if we killed these projects project number one what if we killed it not that what happened what about two nothing three o that would be a problem that's ah fda fda compliance issue that that's a critical project all right what about project number four? Nothing long story short we killed over half the projects and four days idled several other ones didn't kill him but idle them and then what did we do with the priority once which were never considered they they said they were parties but they were never prioritized put those out in spotlight and said this ten percent on time completion rate is that's over we're going to get you know we're going to set target dates that's a rigger and it it wasn't all that complicated but one of the largest companies in the world very smart people weren't doing it so that the decay owes point earlier yes these air not really sophisticated tough tools to work with but we've got to get out of our own way. Teo asked the right questions to think about the application, some of these and and set priorities. So one more quote here for it from greta things, which matter most, must never be at the mercy of things. Which matter leased? This is all about priorities. Let's. Not forget that. All right, we so often get caught up in all the trivial noise and way lose sight of the priority projects. Like example, I just gave him.