The philosophy behind his writing and his books is to share his experiences and learning

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Lessons on Process from 10 Downing Street

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Kate Middleton and Prince William may be grabbing headlines around the world over their pending nuptials, there’s another Briton that has been sharing the limelight lately: Larry the Cat.

The British Prime Minister, David Cameron, whose responsibilities includes solving gaping fiscal deficits and dealing with fallen Middle East dictators, has more earthly problems when he gets home at night. The harbingers of bubonic plagues roam his halls.

Yes, a rat infestation at the official residence of the Prime Minister, 10 Downing Street, hit the headlines earlier this year when one of the rodents was spotted live on British newscasts. And the Prime Minister engaged the services of Larry the cat to fix the problem.

One needs to give full marks to David Cameron to have brought in Larry immediately after the vermin was spotted by the members of the fourth estate. The government took decisive action to deal with the problem swiftly. It even was even commended for adopting such a cheap, low effort, eco-friendly solution.

Mighty praise, indeed. But is it warranted?

Let’s look at the facts. Cats have been noted for centuries for their mouse-hunting ability. American cartoons like Tom and Jerry popularize the notion that the cat and mouse (we’ll include rats in this definition) are forever locked in a game of, well, “cat and mouse”.

But how effective is a cat in comparison to pest-eradication specialists of the human persuasion? Put another way, when is the solution that seems obvious not really the obvious solution?

The statistics on feline mouse-eradication effectiveness is admittedly a little difficult to come by but what we can say is this: the cat will be unable to determine the root cause of the rat infestation and will simply deal with the symptoms of it. Further, the cat will presumably live for a great many more years – average life span of a cat is 15 years according to Wiki Answers – during which time it will need to be fed and have its veterinary bills paid. These are costs that would not come with the services of the average pest-control company.

Larry has already been accused of, well, napping on the job, with a particularly catty insider accusing the feline of having a distinct lack of the “killer instinct”, according to a recent report on NBC News.

In such circumstances, how do we determine whether the cat has succeeded or not? Simply because we cannot “see” rats any longer? And what if Larry the cat gets sick? Do we bring another cat onto the payroll? And will Larry stay in residence permanently to be bequeathed to future residents of number 10? And if he leaves, how will the rat populations be kept in check?

Clearly there are a lot of unanswered questions here and the cost to benefit ratio of engaging Larry’s services becomes less compelling when you look at the bigger picture, which leads me to my next question. Are there any activities that can be done without a process?

In the example above, Larry will indeed be following some sort of process to catch mice:. Wake Up > Drink Milk > See Rat > Chase Rat > Kill Rat

Indeed, I believe that there is no work which cannot be done without processes. All work is process. If we wish to achieve an objective we need a well defined process. Larry’s methods, although periodically successful, would not fall into this category as they are neither repeatable nor measurable.

To define processes does not mean that all processes need to be documented. Any work that has become a habit need not be documented. However, when we design the work processes have to be an integral part of the design. In the example above 10 Downing Street thought to take the services of an unpaid civil-servant as Larry instead of thinking through a process framework and I believe that this is a mistake for many of the reasons I’ve outlined above.

However, what I realized that this event at 10 Downing Street provides lessons for practitioners keen on embedding process thinking in offices and businesses around the world.

So what are the key takeaways?

  • All work is process. An integral part of work design is delineating a well-defined process to accomplish the task. Perhaps Downing Street could have avoided enlisting the help of Larry the cat if a well defined process had prevented the rat infestation in the first place.
  • Designing a process is just not about putting a few steps together. It is about best known method of doing a task that has been developed with buy-in of all stakeholders. Today when technology provides large number of solutions to get rid of rodents I wonder why the dimension of innovative thinking/solutions was not looked into?
  • Even if there are processes they need to be improved continually or else they could degenerate over a period of time.
  • Create a culture to unfurl problems and abnormalities. Don’t shove them under the carpet to fester for future. Whenever a problem is seen take actions.
  • All processes need to have metrics / outcomes which should tell us how they are performing. How is the performance of pest-control being measured?
  • All processes have to have owners (preferably not of the feline version) and the outcomes of process have to be linked to the performance management system of teams. Who was ultimately responsible for ensuring that the Prime Minister’s residence was rat free?
  • For successful execution of processes it is important to manage the hand-offs between the various functional silos.
  • Problems are just symptoms . We need to get into hidden root causes. Getting Larry is just addressing the symptoms and someone should be looking at the systemic issues that made this happen.

In the meantime, I wish David Cameron and Larry well and hope that Larry’s record on rat-catching is better than I predict.

The Dos and Don’ts of Selecting the Right Projects for Lean Transformation

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As a change agent driving Lean transformation, it’s not enough to just have the technical skills. A change agent must also be fully aware of what nurtures and derails a Lean transformation.

For one, change agents must know that a successful Lean transformation requires the right context. Many times, such Lean initiatives fail because ill-selected projects do not end up producing the desired business results. I am often baffled when I see practitioners pick projects mindlessly, only to regret their decisions later when the expected results do not trickle in. 

Selecting Appropriate Projects for Lean Improvement 

A project is particularly suitable for Lean improvement if it meets at least one of the following requirements:

  • Targets end-to-end processes that will impact strategic business objectives and outcomes
  • Targets processes mired in complexity and needing simplification
  • Targets processes associated with customer issues and complaints
  • Targets high cost processes that consume more resources than required
  • Targets business units where there are problems around manpower productivity
  • Enhances core-competencies for the business
  • Helps in improving the top line/bottom-line of the business
  • Improves the competitive position of the business
  • Helps to install processes and process thinking

Projects to Avoid for Lean Improvement

A project is not suitable for Lean improvement if it has any one of the following:

  • Targets a business undergoing major change
  • Targets a process that is undergoing a transition
  • Will not impact key business objectives and results
  • Targets a process that is broken and not end-to-end
  • Does not have a senior leader willing to sponsor it
  • Will compete with many other change initiatives for resources
  • Does not have an assured guarantee that its Sponsor/business leader will spend time reviewing its progress
  • Does not have an assured guarantee that its process teams will invest the time in the project
  • Will have a Sponsor who will maintain a hands-off approach during its deployment
  • Will only be completed to manage internal politics or settle internal scores
  • Already has a known solution
  • Has a problem that is too big
  • Is expected to produce vague results

Conclusion

In sum, it’s obvious that for companies to see desired business results through the initiation of Lean improvements, they must judiciously select their projects. Companies that establish well defined criteria for selecting projects — and religiously abide by these criteria — will decrease the likelihood of failed improvement efforts.

I look forward to reading how your organization is addressing project selection.

Enablers for a Successful Lean Transformation

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When you decide to embark on a Lean transformation, you must make sure that the right enablers of a successful deployment are in place. Despite all the hard work I have seen companies put in to making their Lean transformations’ thrive, many of them fail because of a lack of these key enablers within the companies’ business infrastructure.

Defining a Lean Transformation

But first, what is a Lean transformation?

A Lean transformation typically impacts the strategic business objectives and outcomes of a company and usually takes three to six months to complete. Sponsored by a member of the top management team and delivered by a high powered cross-functional team, this transformation is typically fast paced, holistic, integrative and involves a large number of employees across hierarchies. The successful execution of a Lean transformation requires delivery of a large number of diagnostics, Lean breakthroughs (kaizen events), and short duration projects (15 to 30 days projects).

Service Lean Transformation Examples

Some examples of a service Lean transformation are as follows:

  • A service transformation of a direct banking business
  • Improving the sales force effectiveness of a mortgage business
  • Improving the customer engagement of a hospitality business
  • Enhancing the profitability of a health care business
  • Improving the EBIT margin of a food services business
  • Improving the productivity of credit processing of an auto finance business

As you can see, none of the above transformations directly refer to Lean. But these examples show specific business areas that can be holistically improved using Lean methods.

Lean Transformation Enablers

I’ve listed the following enablers for a successful Lean transformation below:

  • An engaged sponsor
  • A charismatic leader
  • A diverse team
  • An inspiring vision
  • A set of accomplished Lean change agents
  • A supportive Lean office
  • A clear set of metrics (refer to my earlier column)
  • An impeccable change management plan
  • A well crafted roadmap and project management architecture
  • A well defined risk mitigation plan
  • An assorted set of structured reviews
  • A robust awareness and capability development plan
  • A good rewards, recognition and communication plan
  • A bold plan that helps in sustaining the gains

In my next few columns, I shall delve into the details of some of the above enablers that silently make a Lean transformation possible. Please let me know if you have any additional recommendations on the enablers, as well as which enablers you believe I should cover more in-depth in my future columns.

Dear Lean practitioner, remember you don’t know all

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Lean agents making the transition to service industries should speak softly and carry a list of questions. In the second article of his series on project missteps, pitfalls and faux pas, columnist Debashis Sarkar, author and Asia’s service Lean pioneer, says that lean leaders must practice humility and seek to understand rather than lecture.

Many of us who work in Lean “cut our teeth” in the quality improvement departments of manufacturing companies. Now we’re making the transition to services firms and the move is fraught with perils for the unwary practitioner.

The case of one man – let’s call him Ronny Konstantin – springs to mind to illustrate this.

Ronny had spent 12 years in the quality function of a manufacturing company. Now, he was all set to make the move to what he believed would be a lucrative career in financial services.

He had been very successful at deploying “continual improvements” in his previous company and figured that the service company would be a cake-walk.

How wrong he was.

Although there are many commonalities between the two sectors; there are very important differences.

Let’s return to our example. Ronny’s mandate was to get a business unit to adopt quality practices – Lean, Six Sigma, 8D – for business improvement.

He began by convening a meeting with fourteen of the Product and Operations Leaders and began by lecturing the assembled executives on the power of quality philosophy and how it had helped it improve the yields of the copper factory where he had worked previously. He went ahead rattling the power of “statistical-quality-control” and how he was among the few to be selected as a trainer for the same. He further used terms such as grinding, ore, concentrating, smelting, anode-casting etc – terminology familiar to workers in the copper industry but unintelligible to bunch of white-collared bankers.

Ronny had gotten off to a poor start, by being more concerned about sharing his knowledge of quality and how it had contributed to his old job. No-where did he make an effort to understand what the business unit wanted and what the business’ “pain points” were.

Ronny should have sought to understand.

As performance improvement professionals we need to understand that every encounter with our internal customers – especially during early engagement phases – is a moment-of-truth and we cannot waste them. In Ronny’s case, he should have used his first meeting to truly assess the needs of the business rather than citing examples from an irrelevant industry.

But back to our story.

Ronny Konstantin requested another meeting with the team where he promised to share a set of consumer issues which would “open their eyes”. After much persuading only eight Product & Operations heads (out of the earlier fourteen) agreed to spend another 30 minutes with him.

The meeting started with Ronny making a presentation on his “findings”. Ronny had culled a set of customer-complaints from social networking sites such as Twitter, Facebook etc. After listing the consumer issues he went on to discuss the things which he believed the organization had done incorrectly and which had resulted in the consumer dissonance. The group of executives were rather engaged by the presentation.

But, then came the kicker.

In Ronny’s last few slides, he started preaching about how terrible it was that a company of this size tolerated such complaints and the leaders didn’t “do anything about it”. He concluded by saying that such leaders would have been shown the door in his previous company. One could see red-faces leaving the room.

Ronny believed that by creating a bit of sensationalism he would get engagement. How wrong he was.

Ronny should have practiced humility.

While his effort to get the Voice of Customer from social-networking sites was laudable, by levelling accusations at the executives, Ronny alienated his audience, which meant that nobody would give him the help he needed in establishing the organizational processes that had caused the problems in the first place.

So what happened later? Did the business unit approach Ronny for solving their problem? Of course not.

One leader said that individuals like Ronnie could be detrimental to the organizational DNA of “collaboration”. Another said that it was a mistake to recruit a person from copper industry into a service company.

After such a rocky start, Ronny found it almost impossible to get time for subsequent engagements.

Unfortunately, this is what happens when we do not understand the nuances of engaging a business to adopt any improvement practice for improvement. A person could be a tool maestro but if he/she does not know the softer side of change management he can never graduate to become an Improvement Change Leader. It’s imperative to understand what the business wants instead of dumping all that we know, no matter how successful you’ve been in the past. One needs to understand industry nuances before passing judgement.

The most important thing to remember is that improvement professionals exist for the success of the business and not vice-versa.

How to lose friends and alienate staff – a lean sponsor’s guide

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What happens when management is not properly equipped to undertake a Lean Transformation? In the first of his series on project missteps, pitfalls and faux pas, columnist Debashis Sarkar, author and Asia’s service Lean pioneer, argues that things can go very wrong indeed.

Every text book you read on carrying out a Lean Six Sigma transformation talks about the importance of getting “top down” support. Management must be fully on board, understand the basic tools and techniques, and help to ensure buy-in at lower levels in the organization.

In reality, however, we often deal with less than ideal circumstances.

One particular piece of work springs to mind….

Our task was to catalyze a lean transformation event in the process-shop of a services organization. The objective was to look at opportunities for enhancing productivity and streamlining process efficiencies. The sponsor of the intervention was a leader who claimed to be passionate about improvements; during my pre-engagement discussion with her I realized that she understood some of the basic six sigma tools. She was quite proud of how she was a part of a few quality projects in her previous company that had delivered huge financial returns.

She assured me that she would provide all the necessary support to make sure that impediments were removed during the execution.

The words were what I wanted to hear, but I finished the meeting with a mixed view. Was she a real “performance- improvement-convert” or a “glib-talker”? We shall call her Ms. Viola John (not the real name).

The lean breakthrough event started on the scheduled date and Viola was there to set the context and communicated to all how important the project was and what it meant for her business. I was quite happy with the way the event got launched. The team began work as per the pre-defined schedule, going through the typical due-diligence of comprising value stream walk, detailed process dissection, takt time calculation, etc.

But then things started to go awry at the end of the second day when Viola made a sudden un-announced visit to the war-room.

At first, she seemed pleased with the maps, colored post-its, easel chart papers etc. adorning the walls all over. However, her eye went to the value stream map and the detailed process dissection comprising value-add / non-value-add analysis and that’s when it all started go wrong.

Viola didn’t understand why “electronic-inventory” showed in the value stream map and was keen to challenge us on it. She argued was that “service requests” were not inventory as they were not tangible. She went on to imply that this was not usual practice as her previous employer had not included “electronic inventory” in the value stream map.

Patiently, we explained the concept of inventory in lean thinking and seemed to win her round to our thinking. But not without a fight.

Next, she shifted her focus to data accuracy. She kept on questioning on source of data and who had provided them. We finally had to call the person in her team who had provided the data to reassure her that they were correct.

Her next focus was on the detailed process dissection comprising “VA-NVA” analysis and the identified eight wastes.

In total, the interrogation went on for four hours.

The team was able to successfully address all her concerns, but the problem is that they shouldn’t have had to.

This is a very good example of unconstructive micro management. Certainly, as the process improvement sponsor she had every right to challenge us on our work, but the problem is that she clearly didn’t have as much Six Sigma experience as she thought she did. She wasn’t challenging us on the work we were doing as much as questioning the very basic tenets of Lean and Six Sigma.

Her intervention distracted our project team from focussing on the task at hand, and left everyone feeling frustrated.

But then it got worse.

She was back at the end of the fourth day. This time she wanted to understand the “opportunities” that had been identified for improvement and was told that our intervention had freed-up around 21 people.

She wasn’t happy.

She called the process owner and gave him an earful, rebuking him for how in-efficient he had been in holding so many un-productive team members, and warning him that his year-end performance rating would be impacted.

This was the worst thing that could happen.

On hearing this I realized that I couldn’t be a bystander any longer. I led her out of the room and talked her through the leadership behaviors required for building an improvement culture.

Viola’s behavior in this instance was exactly what you shouldn’t do to create an environment conducive to performance improvement. The rebuke to the process owner, and threats to undermine his year-end performance rating, would only lead to staff hiding problems and inefficiencies. Instead, she should encourage teams to report problems and process deficiencies.

So what do we learn from all this?

I don’t want to disparage Viola John’s character as I believe she thought she was acting in the best interest of the business. I think what this example highlights, though, is how important it is that business leaders are properly equipped with the right tools and necessary understanding of six sigma and lean to be an effective manager.

I think there are four main ways the pitfalls that I’ve described could be avoided:

1. Before embarking on lean transformation make sure that business leaders have undergone a session lean fundamentals– I should have ensured that Viola had undergone a proper training session. So many of the problems we encountered with her during the transformation would have been covered during the leadership alignment session and would have helped us avoid them in the first place.

2. A Lean Performance Improvement coach should spend time to coach leaders– even the best athletes in the world rely on coaches to improve their performance and understanding of the game; why should it be any different in business? I think that a coach can help business leaders understand the best way for them to contribute to process improvement.

3. Let leaders experience a lean performance improvement before they sponsor a project – I think we learn best by doing and I think that in an ideal world, all project sponsors would have participated in a lean improvement before taking charge of their own.

4. Encourage teams to report problems & reward them for taking the initiative to solve them – probably the single most important takeaway from all this! If we wish to foster a culture of continuous improvement then we must ensure that people are not put on the defensive. We want to foster an open environment that rewards staff for flagging up problems and then having the gumption to solve them.

As for the project, the Lean event got over as scheduled on the seventh day and all the counter-measures had been implemented as planned. The results spoke for themselves. And Viola? Her closing remarks were: “Good job but we have just scratched the surface”.

Make Your Organization More Customer-Centric with the Kano Model

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Looking at products and processes from a consumer’s point of view is critical for building a successful business. I have seen employees work to improve processes without really knowing the customer they are serving or even the features of the product or service being offered to the customer.

I’m also often astonished when people who are involved in service processes are unaware of the implicit and explicit product features. What most service processors would tell us are the product features that the product team has only alerted them to along the way.This is fine, but organizations serious about differentiating themselves through their services need to tell all their employees both the obvious and not-so obvious features of the organizations’ product. My belief is employees involved directly or indirectly with serving customers need to know both the product’s essential and differentiating features. This is an issue which is not discussed nearly enough.

Enhancing Customer Loyalty with the Kano Model

Thanks to the work of Noriako Kano, professor emeritus of Tokyo University of Sciences, we have the Kano model, which today is widely used by product developers and employees keen on enhancing customer loyalty. Kano surveys are broadly used for:

  1. Improving existing products/services/processes (level A surveys),
  2. Creating new features of products/surveys/processes (level B surveys),
  3. And inventing new products/services/processes (level C surveys).

However, beyond product development and receiving consumer feedback through Voice of the Customer, the principles of the Kano model can be used to communicate to all associates the basic and differentiating features of products or services that are offered to customers.

Let’s look at the Kano model, which is made up of the following categories of customer preference (refer to figure 1 for the model’s visual representation; click on the image to enlarge).

  • Basic features (aka “must-be’s”) – Attributes that the customer takes for granted. Even though customers are indifferent to the high performance of these features, if these must-be’s are not present in the product or service, the customer will become greatly dissatisfied.
  • Performance features (aka “one dimensional”) – Attributes that result in satisfaction when fulfilled and dissatisfaction when unfulfilled. These attributes are explicitly stated and companies use these performance features to distinguish their products and services from the competition. Customer satisfaction is proportional to the performance of these features.
  • Excitement features (aka “attractive”) – Attributes that are not normally expected by the customer. Customers will be indifferent to the low performance of these attributes but will become delighted when these features are high performing.
  • Indifferent – The user is indifferent to the features of the product or service, meaning neither satisfied nor dissatisfied. Companies that operate in this zone could be putting themselves in a death spiral.

Figure 1 (Click on image to enlarge)

In the table below, we can see how certain industry-specific product and service features may appear under the different categories of the Kano model.

BasicsPerformanceExcitement
Air FlightsSafetySecurityOn time departureOn time arrivalFashion show on the flight
Savings Account Opening ProcessSafetySecurityError free account opening within stipulated lead timeOver the counter
HotelHygieneSafetySecurityTimely check inCourteous staffComfortable bedPrompt serviceWi-FiToiletriesDinner on the houseFree tour of the cityBottle of champagne in the roomFolder with guest’s name printed on it
Private BankingSafetySecurityFinancial planningDedicated relationship managerCustomized financial merchandiseGreen channel processingExclusive lounge membershipConcierge serviceParty with celebrities

My Conclusion

Employing the Kano model is a small but effective step towards embedding customer-centricity within a company. I believe that a company that uses this model will be able to:

  • Communicate the expected and differentiating features of its product/service process,
  • Enable its work force to understand both the implicit and explicit elements of customer quality,
  • Ensure that its work force knows how to provide more than what is expected by customers,
  • And reduce mis-selling that often happens in service industries such as banking, insurance, and telecom.

The ABC’s of A3 Performance Improvement

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Having introduced the basics of A3 problem solving over my last two columns, I thought it was appropriate to go over the key issues that you must be wary of while ingraining this problem solving culture into your service company. Many of these key issues are universal in nature and relevant to any team-based problem solving process.

You need to remember that adopting an A3 structure for problem resolution (please see my two earlier columns, The A3 Problem Solving Way: An Introduction and The Seven A3 Problem Solving Steps in Detail) is not as simple as it looks. You and your company’s leaders will need to be determined and tenacious in driving its adoption to ensure that it becomes a way of life for your organization.

The Key Issues of A3 Problem Solving Adoption

I call these key issues the ABC’s of A3 performance improvement. The letter A stands for Alignment, B for Brigade, and C for Course. To understand what each letter means in detail, please refer to Table 1.

Table 1

AAlignmentThe alignment of the problem with organizational priorities and business imperatives.
BBrigadeThe way the team functions. It includes leadership and team behaviors that the team must demonstrate throughout the problem solving process.
CCourseThe course of action that a team needs to take while facilitating problem resolution. It includes the methods and approach that the team must adopt in order for problem resolution to be successful.

I have worked out a check-list (refer to Table 2) that outlines what measures (attributes) need to be in place under each key issue in order for the problem resolution process to be successful. Being able to check off “Yes” by each item is a sign that your team has a good problem solving process in place.

Table 2

AttributesYes/No
A = Alignment
The problem directly or indirectly impacts the business priorities/business imperatives
The problem’s resolution is well supported by the organization’s leaders
The problem’s resolution has buy-in from all relevant people both internally and externally (i.e. process owner, etc.)
The problem is not tied to a business, location, process, etc. that is in transition
The problem’s solution will have a desired impact on customers, processes, employees, suppliers, regulators, or other stakeholders
B = Brigade
The team has representatives from all relevant stakeholders who are either directly or indirectly impacted by the problem
Team members have clearly defined roles and responsibilities
Leaders spend time reviewing the progress of the problem’s resolution; they also mentor team members in developing problem solving skills
Team members have received adequate training around tools, team functioning, etc.
Team members generate adequate ideas and listen to each others’ views in order to reach consensus on the solution to the problem
All team members are treated with respect; their capabilities are leveraged to the fullest extent regardless of their hierarchy in the company
Throughout the problem solving process, the team has engaged all relevant departments/functions/teams that will be impacted by the improvements
Team members regularly visit the gemba (workplace) to get issues clarified around the current problem, the problem’s counter-measures, and the final results of the problem solving efforts
C = Course
The problem has been clearly defined and lacks any ambiguity
The problem solving steps have been followed to a tee so that no shortcuts have been taken
The team is clear on how it will measure success after the project is completed
A few of the team members have experience managing change and associated resistance
The A3 sheet is displayed in the gemba to assist the team in following the A3 problem solving process and in charting the team’s progress of the problem’s resolution
The team is using relevant tools that are making a visible impact to the problem’s resolution
The team uses root cause analysis to come up with counter-measures and does not rely on apparent causes for solving the problem
Once the team comes up with the problem’s counter-measures, the team religiously tracks the progress of their implementation to guarantee a timely deployment
The team has put in place an adequate organizational regime that will ensure that the outcome from the problem solving effort is sustainable
All learning is captured and communicated to all concerned

A3 Problem Solving Conclusion

Successful A3 problem solving requires many little things to work in tandem with one other so that the right environment is created to enable a team to use this business improvement tool effectively. As I mentioned previously, the A3 problem solving tool is not that simple to deploy. It’s critical that your team not only rigorously follow the seven steps of A3 problem solving, but that it also adheres to the ABC’s of A3 performance improvement. This proper procedure will make all the difference in arriving at a sound solution to your problem.

The Seven A3 Problem Solving Steps in Detail

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As I introduced A3 problem solving in my last column, I will now discuss in detail the steps involved with this problem solving approach.

Background of A3 Problem Solving

A3 problem solving is quite similar to other problem solving approaches which mirror Deming’s Plan-Do-Check-Act (PDCA) cycle. The comparison between A3 problem solving and PDCA is depicted in Table 1.

Table 1

A3 StepsPDCA Cycle
BackgroundPlan
Problem Statement
Goal Statement
Root Cause Analysis
CountermeasuresDo
Effect ConfirmationCheck
Follow Up ActionsAct

A3 Problem Solving Steps

Using a very simple approach, A3 problem solving is composed of the following seven steps shown below.

Step 1: Background
In this step, you make the business case for selecting a particular problem for resolution. Upon your selection, clearly state how the problem impacts the strategic business objectives around customers, process, financials, new products, etc.

Step 2: Problem Statement 
Detail the specifics of the problem. These may include the magnitude of the problem, where and when the problem occurred, and the problem’s impact on the business. By defining these specifics on a quantitative scale, you help to bring the problem to life for your organization.

Step 3: Goal Statement 
In this step, state what you are trying to accomplish by initiating the A3 problem solving project. Map out what goals you are trying to achieve and set a timeframe for completing these goals.

Step 4: Root Cause Analysis 
Having fully defined the problem, carry out a root cause analysis to determine the most basic reasons of your problem. Be as thorough as possible. 

Step 5: Countermeasures 
With the root causes in place, come up with the countermeasures that you will use to reach your objective in solving the problem. Draw up a detailed plan that outlines who will deploy the countermeasures and when this deployment will be completed. Following the 5WIH structure helps in this step.

Step 6: Effect Confirmation 
Having implemented the countermeasures, look at the results. Determine whether the results indicate that your countermeasures were effective in meeting your objective.

Step 7: Follow Up Action 
Having achieved your results, deploy the infrastructure for sustaining the gains (such as standardization, audits, dashboards and reviews). Make sure that you roll out your findings across the organization, which in Japanese is called yoko-narabi-tenkai, meaning “lateral deployment of findings to other groups.” (Click on image to enlarge.)

Figure 1: A3 Problem Solving Template and Flow

Conclusion 
A3 problem solving may appear to be a simple seven step approach which helps in solving business problems. However, it is not that simple. It requires the right context and conditions. In a subsequent column, I will share the Dos and Don’ts of A3 problem solving and will show how you can apply its tools to service processes.

The A3 Problem Solving Way: An Introduction

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As service companies dabble with various methods for addressing their business issues, I would urge them to try A3 problem solving. Developed by Toyota, this simple yet rigorous approach not only provides a systematic structure for tackling a problem, but it also has the potential to transform a company by embedding a robust business problem solving culture. Its simplicity and construct proves useful to both people on the shop-floor and top management of a firm.

There are ill-informed individuals who may tell you that the A3 structure only works in manufacturing. This is a completely wrong assumption. The A3 problem solving approach works for all sorts of problems faced by companies across industries. I know because I played an instrumental part in deploying the A3 problem solving approach throughout ICICI Bank — probably the first service company (and more specifically the first financial services company) in Asia to adopt such an approach for resolving business problems. Within a financial services context, ICICI successfully deployed A3 problem solving enterprise-wide in various functions, which included retail branches, operations, legal, treasury, sales, and phone banking. This experience proved to me that the A3 problem solving approach is capable of being fully utilized within a service environment.

So, what is A3 problem solving?

Based on the principles of PDCA (Plan-Do-Check-Act), A3 Problem solving is a simple yet systematic approach for solving problems on a single piece of paper. This one-pager of A3 size, which is dimensionally equal to 11 by 17 inches or 297 millimeters by 420, gives A3 problem solving its name.

So what does A3 problem solving bring to the table?

The A3 problem solving approach:

  • Provides a consistent and common approach to solving a problem in an organization
  • Allows for equal usage of right brained thinking and left brained thinking. While the right brain is used for the visualization of the problem, the left brain is used for analyzing the problem’s root cause
  • Shuns long PowerPoint presentations and summarizes the entire project on a single sheet of paper
  • Allows everyone impacted by the issue to see the business problem in the same light
  • Facilitates easy cross-functional and vertical alignment of countermeasures
  • Provides a visual depiction of data and information that allows for easy communication amongst all concerned
  • Forces teams to solve problems in the workplace
  • Ensures that no short-cuts are taken while solving the problem — the process of solving problems is as important as the final result
  • Promotes a systems thinking approach, which considers how the actions taken during the problem solving process impact the other parts of the company

In my next column I shall delve into the steps of A3 problem solving in detail.

Despite the Recalls, Service Businesses Can Still Benefit from Adopting Toyota Practices

Posted on by DS_admin

A lot has being written about Toyota and its ability to wade through the current crisis. We all know about the range of complaints, from unintended acceleration to brake-failure resulting in the company having to recall 8 million cars, forcing Toyota to suspend its North American sales and production of eight models, including its best-selling Camry, after regulatory pressure. It has also been discovered that these problems have occurred in China, Europe, the Middle East and Latin America. All this led to Akio Toyoda, President of Toyota Motor Corporation, having to testify before Congress on February 24, 2010.

Analysts are already talking about the time frame it will take for Toyota to recover from the repercussions of the recall. Some are comparing Toyota’s ordeal to that of Volkswagen’s back in the mid-1980s when the Volkswagen Audi was linked to around 700 accidents and a few deaths. It took almost a decade and half for Volkswagen to get up to the same level of sales volume as it did in 1985 when the company sold about 74,061 cars; Volkswagen more precisely reached this mark in 2000 when it touched a sales volume of 80,372 cars.

The objective of this column is not to elaborate on the reasons why these problems happened but to assess how the adoption of Toyota practices will likely impact service companies. Some business leaders are already starting to tell me, in muffled voices, that is, that we need to be careful about implementing Toyota practices within a service business environment. As I am a great believer of Toyota’s quality practices, these comments disappoint me, and I fear that these remarks have cast a shadow on the power of Toyota practices for service businesses.

Lean is Here to Stay

My response to all these leaders is that you can have your views on the latest Toyota product recalls, but it would be myopic to abandon Toyota practices within your service businesses. Lean has a lot to provide to service companies, and we have just started to scratch the surface. Whatever time it may take for Toyota to recover, Lean is here to stay and its implementation is a must for service businesses keen to create a continuous improvement culture and create efficient performance-based processes that are in sync with results that customers value.

I can say with confidence that Toyota practices will be adopted by service companies knowingly or unknowingly to make their businesses better. Service companies may call these practices “Lean” or something else, and their need to adopt such practices may not necessarily arise from a love for Toyota or because of the practices’ Japanese lineage, but arise from a business compulsion to be trim, agile and fit.

Toyota Practices in Brief

So, what are these Toyota practices that service businesses are adopting in pursuit of operational excellence? While the list is large, I am highlighting a few of them:

  • Culture of continuous improvement: A culture that champions employees to improve processes everyday rather than just solely focusing on conducting formalized improvement projects in some parts of the company.
  • Wastes: Refers to the seen and unseen activities in a process that do not add value to the customer. Toyota has taught us to categorize wastes into eight types that can be very successfully applied to service businesses. Educating employees at all levels of the company to identify and appreciate the hidden wastes of Lean, in addition to encouraging employees to proactively report problems/abnormalities, is a key tenet of a Lean system.
  • 5S: A five step approach that targets workplace organization and creates an efficient and productive workplace. 5S is foundational to building a continuous improvement culture.
  • Standardized Work: Refers to the best-known method of doing a job that describes how an individual should carry out his/her work. Standard work helps to sustain the improvements that have been carried out and to also proactively improve them going forward. A standard work comprises a specific work sequence, takt time and standard work-in progress.
  • Value Stream Thinking: A philosophy of casting a business around product families and embedding systems thinking within the company.
  • Genichi Gembutsu: As mentioned in The Toyota Way, Genichi Gembutsu is about “going to the source to find the facts to make correct decisions, build consensus, and goals at our best speed.”
  • Kaizen Events/Lean Breakthrough: A vehicle for carrying out improvements on a focused work-area by a dedicated team with an objective to achieve a spectacular improvement within a period of five-six days.
  • Continuous Flow: An approach to creating flawless processes that ensures customer requirements get met within the shortest lead time. The “flow” concepts of cycle time, takt time, multi-skilling, pitch, small batches (since single-piece-flow is often not possible in services), load balancing, cell-based layout, etc., are used to reduce lead times, improve productivity and weed out inefficiencies.
  • Pull: A system designed to provide the customer with what is needed, when the product/service is needed and in the right quantity using a signal from a customer process.
  • Management by A3: An approach of using an A3 sheet (297mm by 420mm) to summarize problem solving, strategic planning, proposal writing and status reporting. It should just not be thought of as a tool for visual depiction but as an approach for problem solving and team engagement. It’s also a brilliant invention for PDCA (plan-do-check-act) management.
  • Visual Management: A technique of managing the performance of the workplace through visual tools and depiction that allows “continuous flow” and helps team to know the health of the Lean system. In a service context, visual management may require usage of technology.
  • Jidoka: A philosophy that encourages teams to stop a process (in a services context) during an abnormality and take countermeasures and separate man and machine’s work. Application of Jidoka may not be possible in customer facing processes but can be tried in back-office processes. In a services context, Jidoka is also about automating processes and letting employees do more efficient work.
  • Level Processing: A principle that endeavors to make sure that “types” and “quantities” of processing are leveled in a stipulated time frame. It can be very effectively used in back-office processes in a service context.
  • Level Selling: A principle that endeavors to smooth the sales spikes over a time period such as month, journey-cycle, etc. The skewing often happens at the end of a reporting period and is influenced by incentives, bonuses, promotions, etc. The Lean intervention is targeted towards smoothening these spikes and stopping the artificial demands that get created. This is just not a problem in manufacturing companies but also a problem faced by services companies.

As this is just a partial list, I look forward to hearing from the readers on practices and principles of Toyota that can enhance the performance of service businesses.

My Final Thoughts on Toyota Practices

Please do not shun Toyota practices because of the latest recalls. Toyota’s commitment to quality can be gauged from the fact that they have stopped production in the United States to make sure things are set right. I am confident that the company will rise like a phoenix only because of these practices that it has built over all these years.

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