Ron Crabtree – Introduction

Ron Crabtree

INTRODUCTION:
A Personal Journey into Excellence

What do you get when you bring together 24 Lean Six Sigma (LSS), Operational Excellence (OpEx) and other Continuous Improvement experts and consultants?

A book – this book. Along with a lot of great, cutting-edge ideas about how to create sustainable improvement programs that actually impact a business’s bottom line.

As you might expect from a group of experts in the field, we decided to start this project by getting the voice of potential customers for our new book. We reached out to over 1,000 people we knew to ask for help with our book. Over 350 people responded. They represented a diverse group with 42% being business owners and executives, 44% in management and supervision, and the remainder being individual contributors and consultants. This group came from both large and small companies, with more than 20 industries represented.

We asked our respondents to score their knowledge and skills on OpEx/LSS on a scale of 1 to 5, with 5 being ‘expert.’ Fifty-five percent of the respondents saw themselves as a level three or lower – ranging from ‘no knowledge’ to ‘knowing something about it’ to ‘I’ve been involved and have a LOT more to learn.’ A large portion (32%) felt they ‘know a great deal,’ and the balance consider themselves as experts. To be fair, this data is a bit skewed to the high side for expertise compared to the general population of professionals. This is mainly due to the fact that we only reached out to those we knew personally and to those who subscribe to my e-zine, Operational Excellence Edge.

We next asked about how far along each respondent’s organization is in implementing OpEx/LSS on a scale of 1 to 5, with 5 being, ‘We have mastered it.’ I was quite surprised with what we learned from this section of the survey. It turns out that a whopping 75% of respondents rated themselves at a level 3 or lower: 18% were ‘doing nothing yet,’ 25% ‘have some activities going on,’ and 32% said they were ‘implementing – but have much more work to do.’ Only 13% ranked their organizations as ‘proficient – but not yet expert,’ and the balance of 11% indicated they had ‘mastered’ it.

Given the fact that the vast majority of organizations have attempted some form of implementation of ‘improvement’ programs in the last 20 years, this data suggests my hypothesis is not very far off, with almost 90% of organizations reporting they ‘have a ways to go’ in mastering OpEx/LSS.

We then turned to isolating the important topics revolving around continuous improvement. The results were as follows:

  • Providing better quality – 91.8%,
  • Improving customer service – 90.2%,
  • Managing change more effectively – 89.6%,
  • Reducing cost of operations – 86.6%,
  • Getting employees more engaged – 85.7%,
  • Getting better high-performing teams and culture – 81.4%,
  • Educating the workforce – 81.4%, and
  • Developing better metrics – 80.7%.

Not surprisingly, half of the topics relate to managing change and people-centered issues. This reflects what many of us see in the field: The biggest challenge we face in implementing improvement programs is obtaining buy-in from all levels of the corporate structure, from the executives all the way down to the entry-level worker.

Our survey also dug down into the main reasons for program failures, as seen by our respondents. The top five choices, in descending order, are: 1) ineffective communications, 2) poor metrics and unclear goals (accounting and management measurement does not support needed change), 3) not considering the entire organization as a system, 4) lacking buy-in and understanding of the workforce/middle management,
and 5) failing to achieve high levels of teamwork and cooperation across the board.

With this information in mind, we, as a group, set out to answer some of the most pressing questions on the minds of our audience. The goal of this book is to answer the following questions:

  1. What is Lean and what can it do for my organization?
  2. Why are my improvement projects failing? Why can’t I see improvement to my bottom line?
  3. Which LSS or Op Ex tools can give me the most bang for my buck?

Continuous Improvement is a Never-ending Journey

Toyota failed. Toyota’s quality train wrecked in 2009.

It was a shock wave that hit many Lean fanatics like an atomic bomb. For decades, Toyota has represented everything that was right about continuous improvement programs. Toyota Production System (TPS) was the epitome of Lean Six Sigma methodology: success, leading to an ever-expanding market share and profits.

But something happened. In Toyota’s journey to become and remain the number one car maker in the world, there was a disconnect somewhere along the line. Experts have varied in their explanations for how and why Toyota Production System failed. Some blame Japanese culture and it’s reticence to deliver bad news; some blame the corporate culture Toyota has developed, which they claim instills a huge gap in communications between the worker (who knows what is going on) and upper management. Akio Toyoda himself stated that the company failed to
“connect the dots” between problems in Europe and those in North America.1 I think it can be best summarized in one simple analogy: Toyota’s Board of Directors set the objective of being the world’s largest car maker. They forgot one little thing: did their customers care about that? Obviously, they did not. In the quest to be the biggest, Toyota outgrew their ability to sustainably execute.

The 64,000-dollar question circulating around the industry has become: Did Toyota fail its own system, or did the system fail Toyota?

Everyone wants an easy answer. People have picked sides and are staunchly defending their positions. The majority of the current literature falls under the opinion that Toyoda and the upper management team failed to listen to the metrics coming out of the system, choosing to live in a state of denial. Contrary to the way TPS is designed to work, they ignored the evidence coming in for decades and chose a firefighting approach to small batches of accelerator and brake problems: a recall here, a recall there, but no overall systemic fix to the problem.

Yet, there is a growing belief in the industry that perhaps it is the system that should be blamed. One argument is that continuous improvement methodologies inherently fail under recessionary periods because there is pressure throughout the enterprise to remain employed: No one wants to be the message bearer that gets shot for delivering bad news. Another argument arising within the industry is that TPS and other continuous improvement systems are incapable of sustaining the massive global enterprise Toyota is trying to forge. In such an organizational system, the theory goes, there are too many places for communication to fail. This, does, in fact seem to fit the facts of the Toyota case. Huge communication disconnects over a long period are evident in hindsight.

Unfortunately, all of these explanations fail to acknowledge the interrelation between people and the system within which they work. There is no denying that Toyota management was deaf and blind to the overwhelming evidence coming in. However, the system was built around the assumption that large, systemic problems could not occur because TPS was designed and built specifically to prevent, diagnose and
fix defects long before they became massive problems like those Toyota has experienced. The system simply was not designed to cope with largescope
defects that actually reach the consumer. TPS failed in this situation because it was incapable of expecting and dealing with the unexpected events that rolled over them like a tsunami.

Toyoda has been lambasted by US government officials and the media for his lack of response and his denial. In his defense, I must again say that the system around which Toyota built its empire was simply incapable of producing a response to this situation. No one at Toyota had the tools in place to respond – the system had not created the right tools to that point.

Of course, we can analyze the Toyota situation to death and point to a myriad of disconnects and failures within their systems, but this ignores the most important question of all: How do we all avoid becoming like Toyota and refrain from falling into the same traps? Some think we need to rid ourselves of all current continuous improvement systems and start over from scratch with something new. This is foolhardy at worst and ill-advised at best.

Instead, we need to build upon what’s good about our systems and shore up failure points in how we use OpEx/LSS thinking. For instance, two missing links in current management school teachings are a) valuing the importance of immediate, practical application of new skills, and b) knowing where to focus the organization’s people in applying the new skills to get maximum results. For more details on these issues, please visit my blog at www.AskRonCrabtree.com.

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