Knowledge Fulcrum

This was given to me last week by my good friend Jim Basile – one of the smartest guys I know.  I thought you might enjoy it as well!

Few entrepreneurs are born.  Instead they arise from the ranks of the independent minded, odd balls, geeks, hyperactive, subject matter experts, engineers, dreamers and/or professionals who are not smart enough to know better.  What sets them apart is the power to avoid thinking about all the things that can go wrong.  They are incurable optimists.

Why do entrepreneurs deserve respect?  Because they:

• Generate great ideas
• Work hard
• Drive hard
• Pave the way for new industries
• Create new jobs
• keep competitors on their toes
• represent the artists and poets of the business world
• Exude indomitable self-confidence
• Are in a word “wonderful”

Now, some reasons why we fail:

• Allow great ideas to be followed by ordinary execution
• fly by the seat of our pants
• Jump around too much, and struggle focusing on task at hand (a.k.a.  A.D.D.)
• Fail to focus, chase after lots of ideas and run in circles
• Fail to attend to or manage the details
• Good at starting business, but bad at running them
• Exaggerate due to unyielding optimism
• Allow Chaos to reign
• Fail to do necessary pre-work before jumping in
• Cannot let go of control
• Lack patience due to unrealistic expectations
• Fail to see or acknowledge risk

(I’m stopping here.  This is only the first half of the list and I if you can’t see any of yourself in this list so far then you are truly an extraordinarily above average entrepreneur.)

Bottom line?  Top three reasons for entrepreneurial failures:

1. Failure to understand why everyone working for you is not as hard working, bought-in or motivated as you.

2. Envisioning, starting and running a business is like having a child.  As such, it is difficult to see the flaws that are so apparent to others.

3. Too few entrepreneurs seek coaching to leverage their strengths, identify their gaps, and invest in personal development.  They do not modify their problem behaviors.

End Note:  If you are interested in learning more about how Jim helps entrepreneurs overcome these challenges (including myself) you may contact him directly at jbasile@talentquest.com.  The world needs us now more than ever so we owe it to the world (and more importantly to ourselves) to be the best we possibly can be.

It always seemed that change never happens as quickly as we would like.  In fact, I would say that most of the people I know or associate with are all people I would consider to be open to change.  Yet, I would also say they struggle with how slowly change actually happens.  Does this mean we all, in fact, are not open to change?

Here are a few things I’ve learned over the years about change – specifically in the context of organizational change:

• Change is slow and tends to be frustrating for most people involved.
• It’s often hard to tell how “change” is going.
• There seems to always be more people against change than are for it.
• Factions in the organization try to kill change before it takes hold.
• Feedback frequently comes from why “change” won’t work.
• It always feels like the change is failing right up to the point when it starts to take hold.

I would imagine that this list seems quite familiar to many of you.  So, what?  Maybe these ideas will help everyone embrace change:

• It’s the journey not the destination that counts.  There will always be opportunities for change.
• We all are responsible for making improvements.
• Before coming up with solutions try asking “why” five or more times.  You are likely to be surprised as to what the root cause actually might be.
• Encourage involvement from everyone when brainstorming solutions.
• Don’t waste time explaining why an improvement won’t work.
• Focus on improving existing processes without “buying” solutions (if we just had this software, this tool, this…).
• Don’t waste time trying to implement “prefect” solutions, just make incremental improvements.
• Think immediate implementation – if it will take a year to implement it’s less likely to happen.

Now more than ever our orgainzations are in need of change.  In many cases it’s a matter of survival.  Share these ideas with the people you work with and start making improvements today.

It’s Sunday.  Sunday was the day you would always call me.  Every week – just like clockwork.   I tried to get as far away as I could but you didn’t let that stop you.  At the time, I just didn’t realize how much I’d miss those calls, how much they meant to me.  And, today I can’t call you – because it’s too late.

You have been such an important influence on my life.  You were my inspiration.  You challenged me, cared for me, and loved me – you showed me that with enough will power you can accomplish anything.   I never thought we would run out of time so fast.  But your memory is with me always – I miss you and love you more than ever.  Happy Mother’s day Mom.

Over the years, I’ve discovered that what makes LEAN so illusive isn’t that it’s a complex idea, but that it’s a simple idea that happens to be hard to implement.

LEAN – the name commonly used to describe the Toyota Production System -  is the systematic removal of waste from any system on a constant and never ending basis.   When I first started to study the Toyota philosophy, I struggled to see where I could find the kind of improvements that would generate the kinds of results I had read about.  That’s where I went wrong.  LEAN is about creating a rhythm where everyone in the organization is trained to see the small things.  Small things, when observed alone, seem insignificant – but when compounded over time and across many people — small things add up fast.

Here’s a a perfect “real world” example:

In my last company, we operated call centers where we conducted primary research studies for organizations.  On any given shift, an agent would work on an average of 3 different projects.  Because of how the software was originally developed, in order to change to another project, an agent would need to alert a floor supervisor to be “moved” to the next program.   This required the agent to get up and walk to the end of the floor to alert the supervisor.   For 12 years this was “standard procedure.”  No one ever stopped to think about what the cumulative “cost” of having the agent get up and request a change actually was.

When we started our LEAN journey, we began to look for small things that were simple to correct.  We started to measure everything we could.  Eventually someone decided to measure the average time it took an agent to “change” projects.   It was an average of 1.2 minutes.  Not all that significant, right?  But when seen in the context of the entire organization and over the entire year, the numbers began to add up very fast.

Average # of Agents per Day – 250

Average # of Study Changes – 3

Number of Working Days per Year – 350

Average Time per Study Change – 1.2 min

Average Cost per Agent ($11.20 loaded) – $0.1867/min

Total Cost to Change Studies each Year = 250 X 3 X 350 X 1.2 X $0.1867 = $58,810.50

The solution was simple.  We made cardboard “signals” that agents would raise when ready to change studies.  These “signals” alerted the floor supervisor, who then changed them over on the system.   In 24 hours, we were able to reduce the average change over time from 1.2 minutes to just .23 minutes.   That simple solution resulted in a net savings of $47,538 a year.  It only cost us a few dollars in card stock and a 15 minute training for every employee.

LEAN is not about BIG improvements.  LEAN is about seeing the business in a different way and constantly making small changes that overtime create significant savings for the business.   Now more than ever, we all should be thinking LEAN.

Perhaps the best book I’ve read for anyone who uninspired in their work or is looking for work.  Innovative, on point, and best of all you can read it in less than an hour.  I’m buying extra copies so I can give them to people I know who are lost.

At least watch the trailer…brilliant a trailer for a book.

In Ithaca We Trust.  If this is not a clear message of how confident we are, I don’t know what is.   Ithaca Hours is a local currency system that promotes local economic strength and community self-reliance in ways to support economic and social justice, ecology, community participation and human aspirations in and around Ithaca, New York.

Ithaca Hours helps to keep money local, thus building the Ithaca economy. It also builds community pride and connections. Over 900 participants publicly accept Ithaca HOURS for goods and services. Additionally, some local employers and employees have agreed to pay or receive partial wages in Ithaca Hours, further continuing their goal of keeping money local.

I met another person who many of you may know — Simon Sinek — who also has his own currency.  Simon issues Tokens of Inspiration to people who inspire him or others. I keep my token in my pocket to remind me that there are better ways to measure success than how much money we have in our wallets.  What keeps crossing my mind is that fact that, now more than ever, get the opportunity to build a society the way we want…all it takes is creativity combined with thought.  I imagine that we will see a lot more people exchanging new types of currency in the future.

Now I want to walk you through the process we used to document our value stream, and what we were interested in measuring.

Generally it’s good to start your process mapping by looking at the job function level.  Depending on the complexity of your business, you may want to do this by individual department.  You will know if you need to break it down.  Map the current state first.

Use post-its to define each discrete job function in order.  You can use swimming lanes if there are concurrent processes you’d like to map.  Ideally, you’d also be gathering accurate information on the following metrics – to start you may just want to use your best estimates:

• Cycle Time – this is the average time it takes to do the task.
• Process Time – this is the average time it takes including any waiting before or after the task.
• Percent Complete & Accurate - an estimate of what % of the time the task is received complete & accurate.
• Percent Exceptions – this is a measure of how frequently there are exceptions which require special handling.
• Number of Hand-offs – how many times does the work change hands (don’t forget figuratively, if information is emailed around the company).

Now you can start to see how much time is spent on activities other than doing the necessary work.  Be sure to include documents or reports that are built into certain job functions.  For those who are more detailed oriented, you may continue to break job functions down into discrete tasks.

I would start broad until you get a feel for how this works.  If possible, remember to include people from every job function and department.

Now you can add up each type of time.  The total Cycle Time is the actual time spent doing the work to produce your product or service.  The total Process Time is how long it takes you to get the product or service out the door and into the hands of the customer.  Usually the Cycle to Process ratio is VERY low.  But now you should start to see where there’s opportunity to take waste out.

Now that the layoffs have happened – you’ve re-organized the work as best you can, you’ve cut all non-essential expenses from your business, and it’s clear that your remaining work force is working harder than ever.  Now what?

Ironically, I’ve discovered that the best time to implement a Continuous Improvement (CI) Program is during a time of crisis.  A significant amount of time and energy is usually spent demonstrating why CI Programs are important and why everyone needs to be on board.  During a time of crisis the need is already clear to everyone.

When you begin to implement your own CI Program, you will not just be developing habits that will reap benefits for years and years to come – you will provide your staff with what might be a new found sense of control and hope.  It’s already clear to everyone in your organization that what has worked before may not necessarily work in the future.

For the purposes of this blog – I am defining a CI Program as any formal performance improvement initiative that is being led by a team of people in your organization to identify and remove unneeded waste.  Think of it more as a way of thinking rather than a state you are trying to achieve.

The first step will be to start to “see” together.  By this I mean that it’s important that everyone recognizes the types of waste that exist in your organizations (don’t worry — it’s in every organization) and be able to remove the waste and re-establish the standard of work from that point on.

Now, the word waste is where it gets a little difficult.  Waste refers to any activity that does not add value to the customer.  In other words, if it’s a task that the customer is NOT willing to pay for, then it’s a possible source of waste.  This includes things like overproduction, wasted movement, transportation of information or material, repair or rejects, inventory, over processing, and missed opportunities.

A great place to start is to hold a company meeting.  Identify a group of “subject matter experts” who can clearly define the current method for doing all major parts of the job – from the beginning of the customer stream (Marketing and Sales), to Operations, through Customer Service, to Billing or cash collections.  Have the “experts” walk through each step of the process – to identify when something needs to happen, who would interact with the task, and how long it takes to complete.  All you need is a big blank wall, and some post-its.

This is a picture of the first value mapping session I was part of.  As the founder and CEO, it was a painful experience.  But, I would say that it only made visible what everyone already knew – we had some pretty screwed up processes that were causing us to be incredibly inefficient.  When you put it all down and try to measure how much time you actually spend adding value along the way, it’s a very sobering experience.  It isn’t until you can see together that you can start to improve together.

In my next installment, I will walk you through in more detail how we documented our work and what we were interested in seeing.

In a recent Nielsen study, “member communities” like Linked in are now used more (67%) than email (65%).  The social network landscape is changing quickly.

In my former survey research business, we were fighting the fact that American households were cutting off their phones in droves.  At last count, 17% of households have no land-line telephone.  Technology is re-shaping our world right in front of our eyes.

How is your organization using new tools to better connect your employees, and customers to increase collaboration — and ultimately performance?  I’ve heard a number of entrepreneurs complain that applications like Facebook are a time sink and have limited access by employees from their network.

I would propose that social networks and other cutting edge applications are merely tools that, if used in the right way, can help your organization better compete by providing your people with better access to information.

Social Networks – using applications within your company can help increase visibility among your staff around critical functions such as product expertise, specialized knowledge or special interests.  Using these applications increases collaboration and communication — particularly if your organization has locations across multiple geographic areas.  In addition, if you have virtual staff - this is the perfect application to keep everyone connected.

Wiki- using wikis is a great way to share standards and knowledge across the organization.  By building wiki platforms around problem identification and problem solving, you will increase your organization’s ability to adapt to the ever changing business environment.

Podcast – when you place training programs online, you insure that when a staffer is trained on a procedure or standard that everyone gets the same information, delivered in the same manner.  This results in more consistency.

Organizations can either resist the changes that are happening around us or embrace the new technology and find the best way to use it for every one’s benefit.  Please share your examples of how you’ve used web 2.0 technology in your business successfully.

I’m just sick.

As I watch the Liddy hearings on Capitol Hill,   I try to calculate how much time and energy has been expended over the last few days.  Think of all the news sources, the congress, the executive branch – how many people like me who are disgusted to see this not just happen — but now to be dragged through the mud.

I used to do polls for a living.  I would bet that nearly 99% of people like you and me think there’s a simple solution…just do the right thing — give the money back, and invest this time, energy and money on trying to put people to work and getting our economy back on track.