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Lean Thinking… in all its forms

Lean

Lean ThinkingLean is an addictive drug.

But I’m not talking about the nasty mixture of cough syrup and soda that is hooking young Americans on codeine and promethazine.

I’m talking about the current favourite method for reducing corporate corpulence, which has been popular for nearly twenty years.

But don’t for one moment think Lean is a passing fad. Its day will come, for sure. But its pedigree is a rich one. And whatever will replace it must share many of its aspirations and principles, just as Lean shares much with TQM*, BPR* and much that has gone before.

Continue reading Lean Thinking… in all its forms

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Kaizen | Continuous Improvement

Kaizen | Continuous Improvement

Kaizen | Continuous ImprovementKaizen should be at the heart of every business and organisation’s operating model. After all, who could deny the appeal of Émile Coué’s* affirmation:

‘Every day, in every way, I’m getting better and better.’

But personal affirmations on their own, they don’t create change.

Kaizen does. It translates from the Japanese as change (kai) for the good (zen). And it comes with action. So, what is the origin of this big idea, and how can you implement Kaizen in your organisation?

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Monkey Management – William Oncken Jr’s Great Insight

Monkey Management - William Oncken Jr's great insight
Monkey Management - William Oncken Jr's great insight
Monkey Management – William Oncken Jr’s great insight

When the idea of Monkey Management first appeared in 1974, it was a big hit. And, rightly so. It clarifies how managers easily get drawn into over-work, and sets out rules for how they can avoid it.

The Monkey Management idea comes from William Oncken Jr. It first emerged in one of the most-requested Harvard Business Review articles. He then revised the details when it became the subject of one of the best-selling One Minute Manager books.

No self-respecting manager can afford to be unaware of the principles of Monkey Management. So, let’s take a look at it.

Continue reading Monkey Management – William Oncken Jr’s Great Insight

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Muda: The 7 Wastes of Lean

The 7 Wastes
The 7 Wastes
The 7 Wastes

Waste is a bad thing. So, any wise manager will do well to eliminate it. You just need to know where to look. One of the many contributions of Taiichi Ohno and his Toyota Production System (TPS) was to catalogue 7 Wastes that we need to eliminate.

The 7 Wastes are now a fundamental part of the concept of lean thinking; whether applied to manufacturing, services, or public administration. By understanding them, you can make just about any process more efficient.

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ERP: Enterprise Resource Planning

ERP: Enterprise Resource Planning
ERP: Enterprise Resource Planning
ERP: Enterprise Resource Planning

ERP, or Enterprise Resource Planning is nothing more than a big piece of software. It sits at the centre of big organisations, handling lots of important tasks.

More recently, smaller scale ERP applications have come onto the market. These allow new and small businesses to get the benefits of  linked back office functions. This is due, in large part, to the availability of managed, cloud-based software.

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Michael Hammer & James Champy: Business Process Reengineering

Continuous improvement had been around for a long time. And that simply built on generations of work to improve the way businesses do things, going back to the Gilbreths and Taylor. But in 1990, a Harvard Business Review article exploded the idea of incremental change, with its provocative title: Reengineering Work: Don’t Automate, Obliterate. It was written by an MIT engineer called Michael Hammer.

And three years later, the revolution was well underway, with a book he wrote with top management consultant, James Champy. Reengineering the Corporation: A Manifesto for Business Revolution was as much a rallying cry for the consulting industry as anything else. But in the few years that followed, hundreds of companies employed thousands of consultants to reengineer their processes and, in so-doing, remove tens of thousands from their workforces.

Michael Hammer & James Champy
Michael Hammer & James Champy

Michael Hammer

Michael Hammer was born in 1948 and grew up in Maryland. He went to MIT to study maths, receiving his BS in 1968. He then took an MS in Electrical Engineering in 1970, followed by a PhD in Computer Science, that he was awarded in 1973.

He remained at MIT becoming a professor in the Computer Science department and also a lecturer at the MIT Sloane School of Management. From there, he formed links with a Boston-based consulting firm, Index, led by founder, James Champy.

In 1990, he authored one of the most influential Harvard Business Review articles,  Reengineering Work: Don’t Automate, Obliterate. This called for a radical approach to creating competitive advantage. It built on thinking that was already around among consulting firms like Index and Boston Consulting Group.

It was so successful that Hammer and Champy collaborated on a follow-up book that was hailed as one of the most important business books of its time: Reengineering the Corporation: A Manifesto for Business Revolution.

Other books followed, along with his own consultancy, and a commentary on the reengineering story as it grew, reached its peak, and then diminished amidst a certain sense of distaste. Hammer confessed to having been naive about the impact his ideas would have on people’s lives, once in the hands of corporations motivated primarily by profit for their shareholders.

Michael Hammer died unexpectedly in 2008, from a brain haemorrhage.

James Champy

James Champy was born in 1942 and studied Civil Engineering, also at MIT. He gained his BS in 1963 and his MS in 1965. He then went to Boston College Law School and received his JD in 1968. From there, he went on to found the consulting firm Index .

In 1988, Index was bought by computer systems giant Computer Sciences Corporation, and became known as CSC Index. Champy stayed on as Chairman and CEO until 1996.  He then went to lead another giant IT consultancy, Perot Systems, until 2009, when it was acquired by Dell.

Champy currently has a wide range of corporate roles, is an independent consultant, and research fellow at the Harvard Advanced Leadership Institute.

Business Process Reengineering (BPR)

A company can get competitive advantage if it can improve its customer service or reduce its operating costs. Continuous improvement methodologies like time and motion studies, and the Japanese Kaizen, had done this for years. But reengineering is a methodology for rebuilding the way a company does things – its business processes – from scratch.

In particular, it emphasises removing whole processes that do not deliver value. The result of this radicalism was obvious in hindsight, though not what Hammer and Champy intended. Companies not only reduced the scope of processes and found significant shortcuts; they removed whole cadres of staff who had previously carried out the tasks that were no longer needed.

The two principle effects of the 1990s’ obsession with reengineering were substantial layoffs and redundancies (described by the now-infamous euphemism ‘downsizing’) and a bean-feast of highly paid work for armies of recently graduated consulting analysts at all of the big consultancies.

By the end of the 1990s, the reengineering bubble had burst, to be replaced by a second wave of technology enhanced cost-saving under the guise of another three letter acronym (TLA): Enterprise Resource Planning, or ERP.

Business Process Reengineering - Michael Hammer & James Champy
Business Process Reengineering – Michael Hammer & James Champy

Some of the Principles of BPR

We can get a sense of some of the principles of Business Process Reengineering from Hammer’s original HBR article. There, he said:

‘At the heart of reengineering is the notion of discontinuous thinking—of recognizing and breaking away from the outdated rules and fundamental assumptions that underlie operations. Unless we change these rules, we are merely rearranging the deck chairs on the Titanic. We cannot achieve breakthroughs in performance by cutting fat or automating existing processes. Rather, we must challenge old assumptions and shed the old rules that made the business underperform in the first place.’

The principles Hammer and Champy articulated included:

  • Organize around outcomes, not tasks.
  • Have those who use the output of the process perform the process.
  • Subsume information-processing work into the real work that produces the information.
  • Treat geographically dispersed resources as though they were centralized.
  • Link parallel activities instead of integrating their results.
  • Put the decision point where the work is performed, and build control into the process.
  • Capture information once and at the source.

What was clearly missing was a recognition that some changes were always going to be more impactful than others. If you fail to address the principal workflow constraints, or make too many changes, then the resulting corporate carnage can be detrimental. This is something Eli Goldratt had realised ten years earlier.

And whenever I think back to my times at a major international consultancy* in the late 1990s, I cannot help but be reminded of something another friend and colleague (Tony Quigley) used to say:

‘The alternative to incremental development is excremental development’

 


* I was involved in Programme Management, not BPR

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Frank & Lillian Gilbreth: Time and Motion

In the modern world, we often wonder how we maximise our productivity, so we can have a successful work life and also a thriving family life. Two people who could have told us about that  were Frank and Lillian Gilbreth. They did not just, together and separately, make significant contributions to management theory.

They also had (together) 12 children. Cheaper by the dozen, Frank Gilbreth was once reported to have said. But it was Lillian’s work that continued after Frank’s early death after only 20 years  of marriage. And she continued as a researcher, as well as being a single mum!

Frank Gilbreth & Lillian Gilbreth
Frank Gilbreth & Lillian Gilbreth

Frank Gilbreth

Frank Gilbreth was born in Maine, in 1868. Passing up on the opportunity to study at MIT because he wanted to support his mum, he became a bricklayer. But his intelligence meant that, by the age of 27, he had his own engineering consultancy, Gilbreth Inc.

He had been watching how bricklayers laid bricks, observing as many as 18 independent movements. Gilbreth would later label these motions ‘therbligs’ (see below). By deploying unskilled labourers, Gilbreth radically reduced the number of motions and increased bricklaying rates from 1,000 per hour, to 2,700. It is the same principle that means surgeons no longer riffle through a tray to find the implement they need: now nurses find and pass the instruments.

In 1903, Gilbreth met Lillian Moller in Boston, and they married the following year. Gilbreth soon got his wife interested in the new ideas of Scientific Management and Taylorism – the scientific management principles set out by FW Taylor. They met Taylor in 1907 and were in Henry Gantt’s apartment when the term ‘scientific management’ was coined.

Gilbreth believed that companies which gained from his time-saving advice should share the benefits with employees, rather that use the gain only to increase profits. So he only contracted with companies that promised to increase wages where his methods brought results. Among his clients were Eastman Kodak, U.S. Rubber, and Pierce Arrow. When the United States entered the First World War, Gilbreth enlisted and was commissioned into the Engineers Officers Reserve Corps.

While his focus was on the time and motion aspects of work efficiency, Lillian would come to focus on the human aspect. They complemented one another well, and also adopted the Gantt Chart in the work, extending the idea to develop  the first flow charts. They were convinced that there was a best way to do anything and in timing everything and tracking processes to reduce steps, they pre-empted the late 20th and early 21st century fashions for continuous improvement, process re-engineering, and lean management.

Frank Gilbreth died in 1924, of a heart attack.

Lillian Moller Gilbreth

Lillian Moller was born in 1878, in California. After a period of home schooling and then high school, Moller commuted to the University of California, Berkeley. There, she achieved her BA in English literature. after a short time at Columbia, where she first studied psychology, she returned to UC Berkeley to complete an MA in English Lit in 1902 and then studied there for her PhD. Denied it on a technicality, she went travelling and met Frank Gilbreth in Boston.

Continuing her travels, the Gilbreths were married in 1904, after she returned, and moved to Rhode Island in 1910. She resumed doctoral studies at Brown University, starting again, and achieving her PhD in psychology, in 1915. Her focus was far more on the human side of workplace efficiency.

After Frank Gilbreth died, Lillian continued their joint work, accepting consulting work through Gilbreth, Inc. In 1935, she became the first female professor in the engineering school at Purdue University, becoming known as ‘The First Lady of Management’. She was, without doubt, a pioneer of industrial psychology. Lilian Gilbreth died in 1972.

Time and Motion

The Gilbreths took a rigorously scientific approach to understanding the way employees carried out work, sometimes measuring time and motion to 1/2000 of a second, using photography and  a ‘microchronometer’ that they devised. With flow charts and therbligs, they analysed to a fine degree.

Therbligs

In many languages, the ‘th’ sound is one letter (theta in Greek, for example). Replace the th in Gilbreth with a single phoneme and reverse the word, and you get ‘therblig’. This is a coinage by Frank Gilbreth that never made it to the mainstream. But the idea is ingenious.

Each therblig is a distinct motion that a worker makes. it is a fundamental element of work and there are 18 of these basic motions. Today we’d no doubt add moving a mouse and hitting return. Ever since I heard the ugly word and looked it up, I’ve loved the concept and the list of movements. Look up therblig on Wikipedia to see the list of 18, and their symbols.

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Hirotaka Takeuchi & Ikujiro Nonaka: Scrum Development

Hirotaka Takeuchi and Ikujiro Nonaka have featured in an earlier Pocketblog, which was focused on Nonaka and the work  he led on how knowledge can transform organisations.

Arguably, it is how Nonaka and Takeuchi took some of their thinking forward that has led to a far bigger transformation. In 1985, they co-wrote an article for the January 1986 edition of Harvard Business Review. Called ‘The New New Product Development Game’, this article was instrumental in revolutionising the discipline of Project Management.

Takeuchi and Nonaka gave us a new way of thinking about how to develop products and deliver projects. And they coined an evocative sporting metaphor for their process, which has stuck: Scrum.

Hirotaka Takeuchi & Ikujiro Nonaka
Hirotaka Takeuchi & Ikujiro Nonaka

Ikujiro Nonaka

Born in 1935, Ikujiro Nonaka gained a BS in political science at Waseda University, then started work at Fuji Electric, where he created their management programme. Nonaka left Fuji in 1967, to study at the University of California, Berkeley. He was awarded his MBA in 1968, and his PhD in Business Administration, in 1972. He took posts at US universities, before returning to Japan, as a professor at the Graduate School of International Corporate Strategy, Hitotsubashi University.

Hirotaka Takeushi

Born in 1946, Hirotaka Takeuchi got his BA from the International Christian University, Tokyo. After a short spell working at McCann-Erickson, he went to the University of California, Berkeley, where he got his MBA in 1971, and his PhD in 1977. During his time at Berkeley, he also worked summers for McKinsey & Company in Tokyo and, more important, met Nonaka.

Takeushi took a lectureship at Harvard in 1976 until 1983, when he joined Hitotsubashi University School of Commerce, where he became a full professor and Dean of the Graduate School of International Corporate Strategy. He stayed until 2010, when he returned to Harvard, as Professor of Management Practice, where he is now.

The New New Product Development Game.

In January 1986, Harvard Business Review published ‘The New New Product Development Game‘ by Takeuchi and Nonaka. This was about a new way to do New Product Development, or NPD. They drew on the idea of ‘ba’ – a Japanese coinage of Nonaka’s, meaning a meeting place for minds and the energy that draws out knowledge and creates new ideas.

They also took a look at the Toyota idea of teams coming together to solve problems. They introduced a sporting metaphor from the game of Rugby; that of the scrum. They used scrum to denote the way teams work together intensively when the ball goes out of play. In a work environment that demands creativity and innovative problem solving, this is just what is needed.

They followed this article up with a 1995 book, ‘The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation‘. This looks at the way Japan became a major economic power, especially in the automotive and electronics industries. they argue that Japanese firms are successful because they create new knowledge to produce successful products and technologies.

Scrum Teams

The model they created for Scrum Teams is of a cross functional group that can work autonomously to resolve its own problems. Their organisation is ’emergent’ meaning there is no assigned leadership or structure; it just emerges from the effective collaboration of its members.

To work best, a Scrum Team needs to be co-located, and work together full-time. This allows a high level of cross-fertilisation of ideas, and a dedication to working on their shared problems, tasks, and initiatives.

Scrum as an Agile Project Management Methodology

Agile project management seeks to avoid the all-or-nothing approach to projects that used to characterise traditional approaches – especially when done in a way that slavishly follows a set of ‘rules’. Although good project managers have always incorporated a lot of plan-do-review (the Deming Cycle), the growth of software development projects demanded an increase focus on agility and incrementalism.

This was the basis of the Agile movement and today the single most widely used Agile methodology takes its name and guiding principles from Takeuchi and Nonaka’s metaphor: Scrum.

In Scrum projects, a Product Owner is responsible for detailing the business requirements and ensuring that the business gets a good return on its product development investment (RoI). The Scrum Team, led by a Scrum Master, selects one subset of functionality from a product backlog of undeveloped functions, divides it into tasks, and works intensively on developing the outputs for a fixed time, known as a Sprint, which is usually 30 days.

Each day, the team gets together for a daily Scrum Meeting to share learning, report progress, discuss challenges, and solve problems. At the end of the sprint, the team should produce a working product that is stable and useful. After a reflection and learning process, the team then works with the product owner to define the subset of functionality it will work on in the next sprint.

The team continues like this until the Product Owner concludes that the next sprint would not create enough additional value to justify the incremental cost.

The Scrum Project Management Lifecycle
The Scrum Project Management Lifecycle

 

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Karol Adamiecki: Management Harmony

We tend to think of leading management theorists as coming from the United States. This seems especially so of Scientific Management. But when the privilege of naming things for the world’s largest audience goes to those who write in English, history creates a bias. And because that audience largely reads only one language, that bias gets amplified.

One of many losers from the Anglo-centric nature of management and business thinking was Karol Adamiecki. He was a Polish engineer, turned economist and management thinker, who can claim to have invented the Gantt Chart before Henry Gantt, PERT before the US Navy, the Theory of Constraints before Eliyahu Goldratt, and much of Scientific Management before FW Taylor.

Karol Adamiecki 1866-1933
Karol Adamiecki 1866-1933

Short Biography

Karol Adamiecki was born in southern Poland, in 1866. He studied engineering at the Institute of Technology in St Petersburg, graduating in 1891. He then returned to his home town, where he took charge of a steel mill. He stayed for nearly 30 years, during which time, he formed his ideas about management.

In 1919, he left the mill, and became a lecturer at the Warsaw Polytechnic, becoming a professor in 1922. There, he further codified and published his ideas. In 1925, he founded the Institute of Scientific Management in Warsaw, becoming its Director and remaining until his death in 1933.

Adamiecki’s  Law of Harmony in Management

While running the steel rolling mill, Karol Adamiecki developed sophisticated thinking around management that was, from our perspective, ahead of its time. The three principal components were:

  1. Harmony of Choice
    Management should select and supply production tools that are mutually compatible. He went on to argue that this should be especially so in terms of their output production speed. This anticipated the Theory of Constraints, and the ideas of Eliyahu Goldratt by 75 years or more.
  2. Harmony of Doing
    Sequencing and scheduling of activities need to be fully co-ordinated to optimise production efficiency. Here, he not only developed a tool that looks very similar to the Gantt Chart, well before Gantt published. His approach also anticipated the US Navy’s Program Evaluation and Review Technique (PERT) and du Pont’s Critical Path Method (CPM) by over 50 years.
  3. Harmony of Spirit
    I imagine the Pharaohs’ overseers were constantly emphasising the importance of creating a good team. But this is another theme that feels very modern – perhaps even more so than the other two. Let’s not forget that Taylor’s view of Scientific Management was mechanistic and process-oriented. It took Mayo to bring humanism to the fore, and ideas of team working in management only started to dominate from the 1970s.

Adamiecki started to publish in 1898, several years before Taylor did so.

Harmony of Doing:
The Harmonograph or Harmonogram (or Harmonograf)

In 1896, Adamiecki solved the problem of sequencing and scheduling in production and published, in1903, his solution. He called it a Harmonograf. And it looks very much like what we now call a Gantt Chart. However, Henry Gantt did not publish until 1910. There is no evidence to suggest Gantt copied Adamiecki’s idea.

In constructing the Harmonograf, however, Adamiecki describes a process that is pretty similar to the PERT and CPM methods. He certainly is able to include critical path and float. These are two concepts Gantt did not consider at all.

As Adamiecki described his methods, he was able to optimise production schedules by sliding paper tabs and arranging paper strips. In a very real sense, he developed an analog scheduling computer.

Assessment

Without a doubt, Adamiecki’s thinking was of its time, but way ahead of its rediscovery. He possibly failed to realise just how valuable it was. But more likely, he simply suffered from an Anglophone bias in scholarship and manufacturing. Publishing in Polish simply did not get him recognition far beyond the borders of his home country. Even now, it is only in the Karol Adamiecki University of Economics in Katowice, that his name is celebrated.

And I have to ask, could this happen again? Yes. I think it can, will and probably is happening now. Last week, we met Vlatka Hlupic. Arguably, her work is known despite her Croatian origin, because she lives and works in London. With the US and the UK increasingly looking to close their borders for differing but related reasons, the next Karol Adamiecki’s work could well lay undiscovered for just as long as that of the first.

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Robert Owen: Fair Management

Robert Owen is often referred to as a social reformer. So what is he doing in a blog about management?

In fact, in his espousal of management over pure command and control, we can see in Owen the first shining of the light of humanistic management, that was not to become the norm in his home country of the UK for nearly two centuries.

Robert Owen

Short Biography

Robert Owen was born in 1771, in Newtown, in Wales. After working in several drapery businesses around England, in 1790, he became the joint owner of a textile factory in Manchester. Because he had little experience of manufacturing, he started off wth a rigorous regime of intense observation of how his employees worked. Through this, he said, ‘I maintained order and regularity throughout the establishment’. Could this be an early variant on ‘Management by Walking About’: Management by Observation?

Along with other investors, Owen bought a Mill in New Lanark in 1799. The realities of what was then regarded as enlightened mill ownership were that he inherited a workforce where 5 and 6 year olds were expected to work up to 15 hours a day. His first act was to stop taking children from the local poorhouse, to raise the minimum age of children he employed to 10, and to ban the use of corporal punishment.

This was the start of a series of reforms that led to Owen being labelled variously as a social reformer, a socialist, an educational reformer, and a utopian (by Marx and Engels!) But at this time, certainly, Owen justified all of his changes on purely economic grounds. He used profits to fund social improvements for his workers and found that productivity subsequently increased. Eventually, the New Lanark Mill showed a 50% Return on Investment (ROI).

Eventually, his reforms were to include taking no children into the mill, creating the first night school in the world, for his workers,  starting what became the basis of the British Co-operative movement, and founding the Grand National Consolidated Trades Union in 1834 – sadly, it did not survive the year. He also tried in 1815 and failed to introduce new legislation to improve working conditions nationally.

It may shock us now that his aim of increasing the minimum working age to 10, reducing the maximum daily working hours to 10½, and requiring a minimum of half an hour a day of education for all children was seen as a serious risk to the wellbeing of business. Lesser legislation was passed in 1819 and we still hear the same arguments about potential legislation around worker’s rights today.

Consult other sources…

If you want to learn more about his social reforms, educational work, or attempts to create trades unions and co-operatives, there is plenty of good material. I would like to focus on the things Owen did in management, that were almost a century ahead of his time, to only really be formalised by the likes of Mary Parker Follett and George Eastman, and the later humanistic management leaders, like Elton Mayo and Douglas McGregor.

Five Visionary Approaches

Humanistic Management
Owen recognised that, in his rapidly mechanising industry, machines would never attain a greater importance than the people who worked them

Abandoning Command and Control
Owen preferred to manage his workers, rather than issue commands. And to help him, he started selecting his managers on merit and giving them training.

Empowerment
Okay, so he would never have used this modern buzzword, but he firmly believed in the value of giving his managers real autonomy.

Change Management
Not only did Owen understand the value of winning trust from his workers before trying to impose change; he actively sought out influential individuals among them to help build and disseminate his case: what we call ‘change champions’.

Performance Monitoring
Every day, supervisors would assess the work of their workers, and award a colour code (from poor, black to blue to yellow to white – best), which would be displayed on a wooden block (his ‘silent monitor’) for all to see. Peer pressure and pride are powerful motivators!

 

 

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