Evolving Excellence

Those Disposable People

By Kevin Meyer

Several articles over the past week have once again raised my hackles on the oft-forgotten second pillar of lean: respect for people.

Two weeks ago Yahoo CEO Marissa Mayer made the news by mandating that Yahoo employees can no longer work from home.  This raised the hackles of many, especially those of us that do work from home.  Dan Markovitz admonished us as bit, but appropriately, reminding us that since we're not in her shoes we should respect her - and her decision.

I have my own opinions about her decision, but in the absence of observable fact, my opinions are based on preconceptions, personal biases, and assumptions. It would be both foolish to judge her decision without knowing what’s really going on.

Before we condemn Mayer’s new policy as showing a lack of respect for her employees, we should show *her* some respect by going to the gemba and seeing first-hand what’s happening at Yahoo. Until then, we have no right to opine on her new policy.

Ok, I still don't like it, but Dan has a point that I am not intimately familiar with the innards of Yahoo.

And then Best Buy followed suit.  This time the CEO, Hubert Joly, gave a reason that presumably even Marissa Mayer would get livid at:

“In a turnaround transformation, direction needs to come from the top. I make sure it gets to a conclusion based on fact," Joly said. "You need to feel disposable as opposed to indispensable.”

Employees need to feel disposable?  Now there's some leadership - to the extent that I bet there are some fine Best Buy employees willing to jump ship right about now.  Some knowledgeable folks have correctly criticized this rollback of ROWE - the Results Only Work Environment.

Erin Kelly, an associate professor at the University of Minnesota who has authored studies on ROWE, said companies are unfairly scapegoating flexible work programs for their subpar performances.  “I’m concerned that these flexibility initiatives and telework initiatives are getting blamed for what may be other problems those organizations are facing in the broader market,” Kelly said.

Exactly.  Subpar products, service, and leadership come to mind.

Whether it's a result of traditional accounting methods recording the "cost" of employees without understanding the "value" side, or if it's simply a lack of understanding of human psychology and potential, people are the kneejerk reaction.  How about another example, coincidentally from my very first post-college employer.

German light bulb maker Osram, soon to be spun off by its parent company, engineering giant Siemens, said on Thursday it was selling a factory in China as part of a drive to slash 8,000 jobs worldwide.

"With the planned disposal of Shaoxing, Osram has achieved half of its planned cuts of 8,000 jobs by 2014 worldwide in our traditional business activity," the firm said in its statement.

Now granted the article probably doesn't give the whole story, but it sure seems like the goal is to slash 8,000 jobs, period.  Really?  I sure hope it's part of a product rationalization and longer-term growth strategy - not just a goal to reduce headcount.  Although it is interesting that they chose probably the "cheapest" 4,000 people they could find.

Finally Eleanor Bloxham had the cohones to really nail the underlying issue that drives most layoffs: the failure of management.  Actually she calls them lazy, in addition to incompetent.

Probably every worker today has experienced -- or known someone who has experienced -- at least one layoff. Layoffs are an abomination -- for the pain they cause innocent victims -- and the lack of accountability they often represent.

She echoed John Hunter's sentiments of five years ago.

Layoffs are a failure of management. If the company has not been executing a long term strategy to respect people and manage the system to continually improve, manage for the long term, working with suppliers… it might be they have created an impossibly failed organization that cannot succeed in its current form.

Yes there are always exceptions, but they are rare.  The inability to develop a strategy, execute the strategy, and grow is a failure of management, let alone leadership.  Believing that employees are purely a cost, not understanding that just because the value of employees is not explicitly stated on a P&L and balance sheet doesn't mean that there is no offsetting value to the "cost," is a faiure of management.

By not leveraging the potential of his employees to help turn around Best Buy, I'm betting that Hubert Joly will soon personally understand exactly what "disposable" means.  Those employees - and sharehoders and customers - deserve better.

This is your brain...

By Kevin Meyer

The other day I was talking to a couple execs at a local manufacturing company, and the usual topic of the evils of doing business in California came up.   I responded that yes, it is difficult, but if you used some brains it was possible to out-compete even Asian sweatshops even from the state that does everything possible to bite the hand that feeds it.  And as usual, since this conversation is unfortunately rather common, they looked at me with an expression asking if I was already taking advantage of the “medical” marijuana dispensary nearby.

One of them then said, in a bit of a huff, “I do use my brain, and we can’t compete.”   To which I said “It’s not your brain that I’m referring to.”

You see, these guys still thought of the hundred or so folks in their factory like this: 

As those of us in the lean community know, that’s an incomplete picture.  Those folks really look like this:

That funny-looking attachment, unrecognizable by many executives, is a brain.  The brain has a bunch of functions, detailed here:

Now, to be fair, I’m sure many execs do realize there’s some mysterious blob attached to the hands, especially since OSHA requires them to put safety glasses or a hard hat on it.  But I’m guessing they think the only valuable component of that brain is this:

Obviously something has to control that pair of hands - so they do value a part of the motor control area!  How enlightened!  However lean types, especially real lean types that fully understand, embrace, and leverage the respect for people pillar of lean, know that the rest of the brain is a beautiful thing:

It is fairly easy to distinguish which executives, especially CFOs, understand this.  Ask them two simple questions:

1. How much will it cost me to hire a person (I dare you to say “a brain”)?
2. How much will I save if I can reduce my headcount (uh, “braintrust”?) by one?

Typically the answer to the first question will be “well, add up the wage dollars, then tack on benefits, then tack on an overhead "costs", and it’s about $100 per hour.”

If that was the answer to the first question, then almost invariably the answer to the second question will be “add up the wage dollars, and a portion of the benefits, so about $25 an hour.”

Hmmm… something doesn’t add up.  Why does it cost more to bring someone on than can be “saved” if the person goes away?  I won’t get into that particular insanity here, but most of us have experienced it.

Funny, there’s a particular anatomical entity that isn’t even considered.  Where is the value of the brain?  The ideas that lead to improvements that lead to increased productivity, improved processes, and increased customer value?  Somehow that’s not “real” because it’s not on a P&L or balance sheet.

But I bet that company still has a slogan on a wall somewhere that says “Employees are our most valuable asset.”  Really?  Show me.

And that’s why those kinds of companies chase “cheap” labor around the world.  Perhaps to China, then now to Vietnam or Burma or someplace.  They look at a P&L and balance sheet sort of like this:

Now a few people are lucky enough to work for organizations where the answer to those two questions would be:

“How will that person help us create customer value?  Are we paying enough to respect the knowledge and experience she’ll bring to our team?”

“Are you really sure we can afford to lose his experience and knowledge? Could he add value in another area? How will losing his ideas impact our productivity?”

Yes, you sometimes have to dream a bit.  But I’ve known a couple CFOs that really talk like that.  A rare breed.  And they look at a P&L and balance sheet analysis of a potential offshore move this way:

Those execs, and even CFOs, realize that traditional financial statements are flawed.  The value of the brain - the experience and knowledge that drives creativitity and ideas - isn't represented.  Therefore there isn't an offsetting brain value to the "cost" of the pair of hands.  Not realizing this is why some companies do crazy things like whack a couple thousand highly experienced people, move overseas, and hire a couple thousand replacement unexperienced people.  And claim it adds value.

I've seen some of those enlightened CFOs even try to find ways around a traditional P&L and balance sheet.  One capitalized all the training time applied to people, so if a person left they then had to expense a portion of that capitalized cost.  It's stretching a few concepts and even GAAP, but at least she understood reality.

More and more companies and organizations are beginning to understand the value of the brain - which is why more and more companies are returning to North America.  They leverage their brains to be agile, create custom solutions, and find innovative ways to add value to their customers.  Even in California.

Sometimes it takes a brain to know one...

Congratulations, David Hogg

By Kevin Meyer

I just learned that Dave Hogg, one of my oldest friends and mentors in the lean world, has received the Queen's Diamond Jubilee Medal for his work in promoting lean manufacturing.  A remarkable, and well-deserved, achievement for a remarkable person.

I first met Dave in the mid-90s when I was struggling with trying to figure out how to turn around a large medical device manufacturing facility and I discovered The Association for Manufacturing Excellence - and lean.  Through AME I almost immediately met Dave, and over the years he has instilled in me a passion for the human side of lean - the power of the oft-forgotten respect for people pillar.  I've asked him to help train some of the organizations I've been fortunate enough to lead, and has always been available to offer advice.  Dave is the person that encouraged me to start sharing my own lean experiences and knowledge, first through Superfactory and then through Lean CEO, Evolving Excellence, and more.

Dave Hogg is well known for the lean consortium model he created and implemented at the High Performance Manufacturing Consortium, which in 1998 was described by MIT's Sloan Management Review as a "leveraged learning network."  This model spawned dozens of other successful consortia in Canada and throughout the rest of the world.  In 2011 he was inducted into AME's Hall of Fame.

Congratulations Dave.

And Now a Few Words from Mike

By Kevin Meyer

It's college graduation season, so once again we get to listen to a bunch of commencement addresses by supposed dignitaries launching kids still recovering from their latest hangovers out into the real world.  God help us.

One of those guys was Michael Bloomberg.  As a recovering partisan hack, now deeply independent yet stuck in the conundrum of being a fiscal conservative, a social liberal, and a fairly but not completely libertarian in today's increasingly polarized environment, I like Mike.  I don't like all Mike, such as his desire to dictate what goes into my food when I dine in New York City, but unlike a lot of folks I don't have some narrow-minded litmus test.  You have to be pragmatic, and compromising, to make progress.  Imagine that.

I've described his leadership style before - glass-walled offices for visual management, rotating positions for cross-training even at executive levels, and the like.  Those of you that know him know he's also fiercely independent, tells it like it is, and focuses on the human potential side of leadership.

Mike's style found its way into the two commencement addresses he gave this past weekend.  Sure there's the occasional political overtone, but try to ignore that (and I will too) as you think about his words from an organizational perspective.

From his address to Franklin & Marshall:

Let me begin with independence – which is so fundamental to our identity as Americans. It’s the conviction behind our nation’s founding and the driving force behind its success. And yet, I look at Washington today and I see a serious challenge to our spirit of independence. It’s standard operating procedure when Democrats propose an idea, for Republicans to oppose it – and vice versa – just because it’s not their idea.

Both groups believe passionately that they are right and the other is wrong – because neither group questions the assumptions underlying their own party’s positions. When you belong to a group – whether it’s a company, or a nonprofit, or a political party – you tend to accept their way of doing things.

Be an independent thinker. Turn ideas on their head. Look at them from different perspectives. It may be lonely at times; it may make you unpopular at times; it may be dangerous to your career. But independence lies at the heart of innovation – and progress.

Forget government - I bet most of us could see that situation in basic office politics.  Be independent and question underlying assumptions.  Why why why why why?  What is really the best path forward or the best solution?  What is really the problem?  What is really the appropriate tool?

The thrills that really stay with you forever – I’m sure many of you know – are the ones you get from giving back to your community. 

True.  No real comment, it's self-evident, but I wanted to throw that in here.  It's important.

From his address to the University of North Carolina:

Don’t be afraid to shoot the long ball. Take the risk. Life is too short to spend your time avoiding failure. If I had worried about failure – or listened to those who do – I would never have started my company, and never run for mayor. I can’t imagine my life if I hadn’t taken those risks. Not every risk will work out, but that’s ok. Failure is the world’s best teacher.

A bit cheesy, and probably some variation of this is in every commencement address, but a concept that most people forget as soon as they get suckered into their first salaried job.  Just go for it!  Before it's too late.  I quit my first company after 5 years because I wanted to manufacture something more meaningful.  I left an accelerating career at a Fortune-50 after 10 years to try something different.  I did a startup or two.  Now, in the best job of my life, I'm shifting gears again.  Looking back, at any of those junctures I could have easily found myself living in a cardboard box.  But it didn't work out that way - luckily - and I'm better for each of those decisions.

Never stop learning. Education is a lifetime journey. When you leave these walls, keep asking questions. Keep acquiring knowledge. Keep seeking truth.

As I described just a week or two ago, I've found the best indicator of both personal and professional leadership success is an ability and propensity to seek out, consume, distill, implement, and teach new knowledge.  Kinda makes you look at your succession plan (you have one, right?) a bit differently.

No party has a monopoly on truth, or God on its side. And I should know: I was a Democrat before I was a Republican before I became an independent – and I never changed my principles. I hope all of you will do that too. Think for yourself – and decide for yourself, even if it’s not popular, or if it runs counter to the party line. If everyone in Washington did that, our country would be a whole lot better off.

That independent thinking thing again.  And principle-based leadership.

In the game of life, when the final buzzer sounds, the only stat you carry with you is the number of assists you made. So help other people put some points on the board. Or as Dickie V might say: don’t be slow to dish the rock.

And that service thing again, with a servant leadership twist.  Help other people put some points on the board - great thought.

Now, I know you remembered every word of that, but just in case, here’s a summary of the seven, in no particular order: Teamwork is everything. Assist others. Risks are necessary. Hmmmm, the first three letters of those words are T-A-R – I wonder where this is going. Hustle, always. Elbows occasionally have to be used. Education is a lifelong journey. Love what you do. And if you put that list together, it of course spells Tar – heel.

Leadership, T-A-R-H-E-E-L style.  I think UNC got the best of Mike this time.

Missing the Point on People

By Kevin Meyer

It started off well.  I had high hopes.  An article in the April 21st The Economist (wow... reading the future!) on manufacturing in the future.

BACK IN THE 1980s, when America’s carmakers feared they might be overwhelmed by Japanese competitors, many in Detroit had a vision of beating their rivals with “lights-out” manufacturing. The idea was that factories would become so highly automated that the lights could be turned off and the robots left to build cars on their own. It never happened. Japan’s advantage, it turned out, lay not in automation but in lean-production techniques, which are mostly people-based.

Yes! This is going to be great!  Finally an article about the fallacious thinking that factories filled with robots are somehow more efficient than those filled with humans.  We've been preaching for a long time how traditional accounting measures the "cost" of the pair of hands but doesn't assign a value to the creativity, experience, and ideas in the brain.  Therefore crazy decisions are made, such as shedding thousands of workers in the U.S. to chase "cheaper" labor overseas... new folks with no experience.

I saw this first hand when touring Toyota's factory in Kyushu, Japan.  At the time at least it was their most efficient factory - and the only robots were in areas with safety issues, such as plating.  I could also tell you about how there were virtually no computers on the shop floor, how a manual kanban was used for completely random mixed model production, etc.  But you can read all about it here.  That factory's efficiency and productivity came from improvement ideas, something only humans can create.

Back to the article in The Economist.  Unfortunately after making such a bold statement on people and robotics, the authors dives straight into the glories of robotics.

Many of the new production methods in this next revolution will require fewer people working on the factory floor. Thanks to smarter and more dexterous robots, some lights-out manufacturing is now possible.

Uh - didn't you just tell us that people were the key?  Ok robots can help people - and perhaps I was being a bit unfair and mistakenly gave the perception that I was against all robots - I'm not.  They have their place as aids and efficiency multipliers, and can be very valuable.  Just don't expect them to deliver year-over-year 5% productivity improvements like people-filled factories can. 

Eventually we come right back around to where we started, bracketing the long robot worship.

As Toyota discovered with lean manufacturing, production-line workers, given the chance, can come up with plenty of good ideas to improve productivity.

Yes they can, given the chance.  There's value in them there brains.

The Importance of the Knowledge Distillery

By Kevin Meyer

Over the last several years I've become fascinated with learning systems inside organizations.  I've also found that the best leaders are generally those that voraciously seek out and consume knowledge, then distill, implement appropriate new concepts, and especially teach.  In fact, an effective "knowledge distillery" is now the number one characteristic I look for in leaders.  Far more important than direct experience in a field or function.

The Wall Street Journal touches on this in a recent article on how our education system is failing to teach an ability to process new knowledge. A key component of creating knowledge is leveraging failure.

In most high-school and college classes, failure is penalized. But without trial and error, there is no innovation.  "One of the most important things I have to teach my students is that when you fail, you are learning." Students gain lasting self-confidence not by being protected from failure but by learning that they can survive it.

Unfortunately the tendency of society, and schools, is to protect people from failure.  Failure is seen as a negative instead of a potential positive.  Grade inflation or no grades at all, games with no winners and losers, science experiments designed with a range of positive outcomes instead of the potential to simply blow up.  Failure is important.  Teaching kids to learn from failure even more so.  Maybe you're simply not cut out to be a dodge ball athlete.  Best if you learn that early.

Modern society generally moves in the same direction.  Instead of trying to just create equal opportunity, there is a tendency to want to create equal outcomes - to cushion or even eliminate the impact of difference, or even failure.  It seems like nearly every successful executive, passionate community activist, brilliant scientist or whatever has some key hardship story in their past.  Perhaps early on during their childhood or later in their professional career.  Those difficulties - not necessarily failures in the traditional sense - can be powerful teaching moments. 

Many, many years ago I was involved with a startup company that didn't perform as expected (that's being generous).  One of the best, and most important, experiences of my life - I learned about the criticality of sales and marketing, how cash flow is far more important than sales and even profits, and how people can be far more valuable than what you pay them.  Those lessons have stuck with me, and have radically changed my career.  Without that failure I would have been in a completely different place.  Thankfully I wasn't protected from that failure.

What types of functions do you have in your organization?  Do you have someone that is specialized in materials science, or someone that has a materials science background but can leverage the thinking process to solve problems?  There is a difference, and our schools may skew candidates toward one side.

The university system today demands and rewards specialization. Professors earn tenure based on research in narrow academic fields, and students are required to declare a major in a subject area. Though expertise is important, Google's director of talent, Judy Gilbert, told me that the most important thing educators can do to prepare students for work in companies like hers is to teach them that problems can never be understood or solved in the context of a single academic discipline.

A friend of mine, a guy who sometimes regretted getting his PhD in a narrow field, used to tell me how in his opinion the higher you went in advanced schooling, "you learn more and more about less and less."  That's stuck with me.  Yes knowing a lot is important to the progression of a field of knowledge, but it is also important to recognize that unless overtly challenged the prism through which knowledge is obtained and processed becomes narrower and narrower.

It's not just a product of advanced knowledge, but sometimes a self-imposed perspective - a form of confirmation bias.  How many folks in the U.S. only receive news via U.S. outlets such as CNN or Fox?  How many politically-passionate folks, on the left and right, only read articles from journals and sources on their side of the spectrum?  How many of us really seek out opinions contrary to ours, and then truly think about them as opposed to simply discarding as "whacko"?

Steve Jobs (oh boy, here we go...) is considered by many to be a great innovator.  Some believe that, some don't, but that's not my point.  He considered the key to Apple's innovations to be "design at the nexus of technology and liberal arts."  Thinking not just about neato keen technology - as most tech companies do - but a much wider perspective of the application of technology to solve problems.  That requires people that can process a wide base of knowledge.

To do that requires a passion for knowledge.  To consume knowledge across a wide spectrum of topics.  The recognition that knowledge comes not just from words, but from experiences.  The ability to tie it all together.  The passion to do something with it, directly or indirectly.

So take another look at the folks in your organization, especially those in critical leadership roles or on the track for such positions.  Are they just good in function or experience?  Is that really enough to move forward and take your organization to new levels?  Who among them read everything in sight, from a wide range of business and non-business topics, and can tie disparate concepts together into new ideas?  How many distill a wide funnel of knowledge into important disruptors - that can become a competitive advantage?  How many can effectively implement such ideas - and learn when they don't work out as planned?  And finally, how many can teach others?

Those will be your most important leaders.  How do you leverage them?  How do you create more of them?

The Shame of "Great" CEOs

By Kevin Meyer

What a couple weeks here at Evolving Excellence.  Discovering that Amazon's worker abuse is on par with Apple's, and even Bill's recent post on how we (mis)treated workers from the Barbados when they did the hard work of building the Panama Canal - but really paid them more than Apple pays the Chinese.  I'm somewhat surprised that the AFL-CIO hasn't contacted us about being an official spokesman for labor.  Perhaps they should.  Companies that treat people that poorly deserve unions - and all the other consequences of unions that destroy productivity and agility.

So here I am trying to work today when someone (cough, Bill George, cough) tweets an article from Forbes titled "Jeff Bezos' Top 10 Leadership Lessons."  Really - Jeff Bezos of Amazon?  Normally I like Bill George, and his concept of "true north" is very much aligned with lean.  This time he's off base.  Leadership lessons?  So like a kid going to see The Texas Chainsaw Massacre for the first time, I had to look.  And it was filled with the usual stuff... obsess over customers, embrace change, be willing to fail... yadda yadda yadda.  Anything about employees?  Not really, unless you somehow read that into #6, "Our culture is intense."

Yep, no kidding.  "Intense" is one word for the worker abuse going on at Amazon's Campbellsville distribution center.  I tweeted back to Mr. George that Bezos must have forgotten to include lesson #11: always keep ambulances outside of overheated distribution centers in case employees collapse.  Otherwise you might need hearses.

But it gets worse.  As I'm reading that, I discover that Forbes had another recent article on Bezos, once again by George Anders.  And this one had a premise that nearly made me toss my cookies.

He’s [Bezos] the number one CEO in America. The passing of Steve Jobs has left him, without question, as the corporate chief that others most want to meet, emulate and deify.

Geesh.  So first we have Steve Jobs who presided over blantant worker abuse at Chinese factories that made his products.  Yes I grant he was a genius in many ways.  But also a guy lauded, indirectly via channeling Tim Cook perhaps, as having created the best supply chain in the world.  Really?  No - just a brilliantly executed traditional supply chain.  The "best" would have figured out how to make products closer to customers without abusing people.  A few bucks from the $100 billion Apple has stashed away could have done that.

And now Jobs is supposedly replaced with Bezos?  A guy who has employees, in the U.S. no less, that are saying "this is a brutal place to work."

I'm guessing Jack Welch (the turkey) was also in this chain of "great CEOs."  Someone who advocated whacking the bottom 5+% of the staff each year, among other brutality.

So they are the corporate chiefs that "others most want to meet, emulate and deify."  How pathetic.  No wonder corporate America has been getting a black eye lately.  With those kinds of "leaders" and people that worship them, a black eye should be the least of our worries.

Where are the folks that truly understand what that oft-forgotten pillar of lean, respect for people, is all about?  Where the leaders that truly believe that people are the greatest asset, and even though they may be represented as a "cost" on a P&L, there really is a huge offsetting value from their brains, ideas, creativity, and experience?

They are out there, and I can name a few of them.  But they are humble and focus on putting their people first to create great companies that deliver real value to customers.  Which is perhaps why they won't get into Forbes.  But unlike Welch and Jobs and Bezos they will get my respect.

More Worker Abuse - Guess Where...

By Kevin Meyer

Take a look at the following quotes from an article on worker abuse.  I've purposely redacted the company and location identifying information.

"As long as my body holds up, I will keep working. But the way it feels, I don't know how long that will be."

... a warehouse safety worker... instructed him to tell emergency workers that his hip injury was not work-related, even though he says it was.

... an investigation of... warehouse operations last year... also found indoor temperatures soared so high that... had ambulances parked outside to take workers to the hospital. [Sorry - I just have to add "ARE YOU FRIGGIN' KIDDING ME??" to this one.]

... pressure to manage injuries so they would not have to be reported, such as attributing workplace injuries to pre-existing conditions or treating wounds in a way that did not trigger reports.

A former warehouse safety official said in-house medical staff were asked to treat wounds, when possible, with bandages rather than refer workers to a doctor for stitches that could trigger reports. And warehouse officials tried to advise doctors on how to treat injured workers.

"This was just a brutal place to work."

"They would have meetings on how we could get rid of people who were hurt. It was horrible."

I could add several more, but I'll stop there.  I'm betting most of you think I'm quoting from yet another report on Apple's Foxconn supplier in China, right?  Or at least some other sweatshop operation deep in Asia or Latin America?

Nope.  It's Amazon, in Campbellsville, Kentucky.  Last time I checked that's in the USA.

How can we rant and rave against working conditions overseas when we allow the same here?  Sure, there aren't suicide nets around the top of worker dormitories and 100 hour weeks probably don't happen.  Still, the similarities are eerie, including that it's another high profile tech company.

It's unacceptable.  And we wonder why unions still exist - once again it's because of pathetic management that gives the rest of us a really bad name.  The rest of us that understand that there's a valuable brain attached to the supposedly costly pair of hands, and that it makes great business sense to take very good care of that brain.

One last quote from the article on the vicious cycle that begins once you start circling the drain of worker abuse:

But over time, said former workers at Campbellsville, production pressure from headquarters intensified amid constant turnover. "There would be phone conferences [with Seattle], and all this screaming, about production numbers. That was always the problem; the production numbers weren't high enough," said a former safety manager with oversight of the warehouse who spoke on condition of anonymity.

If you treat your "most valuable asset" (how much you want to bet that Amazon has that buried in a mission or vision statement somewhere...) like crap, they eventually leave, and you have to figure out how to make up the difference.  Either by working the remaining poor souls harder or by finding even poorer souls willing to work in such a hell.

Of course Evolving Excellence readers know a better way.  Leverage the power of their brains to improve processes which will improve quality and efficiency - value.  And take care of those valuable brains.

Stress Solutions, Not Blame

By Kevin Meyer

Regular readers know that the "respect for people" pillar of lean is particularly important to me - in fact I consider it to be the most critical.  My organization often hears me say that 90% of problems are the result of poor processes, not people, and 9% of the remaining are probably due to poor leadership.

The FAA appears to agree.  A couple years ago I told you how the organization had created a nonpunitive reporting system for air traffic controllers to report incidents.  That led to a dramatic change, which might initially be seen as a scary negative but as most of us immediately realize is a huge positive:

New numbers released by the Federal Aviation Administration show reports of air-traffic errors have nearly doubled in three years. The number of reported incidents in 2007 was 1040, and that number rose to 1887 in 2010, an 81 percent increase.  This cultural change in safety reporting has produced a wealth of information to help the FAA identify potential risks in the system and take swift action to address them.

The FAA was apparently so impressed that they have now expanded the program to other functions.

Federal Aviation Administration officials announced that as part of a new "safety culture" at the agency, they would fully embrace nonpunitive reporting systems, in an effort to generate information that could expose bigger dangers.

The FAA took a half-step in that direction in 2008, creating a nonpunitive reporting system for air traffic controllers. On Wednesday, the FAA said it was expanding the program to employees who maintain radar installations and other systems.

"Make no mistake about it: We don't condone (errors)," said David Grizzle, the FAA's Chief Operating Officer. "However, we presume the good intent of our controllers and are more interested in the free flow of information than we are in punishing for errors."

The FAA's decision also points to a problem many organizations face as they improve - it's easy but very dangerous to rest on positive improvement.

In announcing the new reporting systems, the FAA cast itself as a victim of its success. FAA officials said they used to be able to measure risk by counting accidents. The fewer crashes, the better the agency was doing.

But with the commercial aviation accident rate at historically low levels -- there has not been a fatal commercial crash in three years -- the agency needs to look at other data to identify risky behaviors and incidents, and to address them.

It's analogous to a common misperception.  As a process becomes more stable, the tendency and desire is to measure less and move on to something else.  But in reality the black swans, the long tail events that hide in broad statistical analysis, are the most disruptive and dangerous.  Instead of measuring less frequently, you should measure more frequently to uncover and address the next layer of process variation.

The FAA seems to understand that - and the importance of enabling and ensuring people are part of the data collection process.  With rare exceptions the problems are in the processes, not the people.

Sorry Apple, Not This Time

By Kevin Meyer

The rumors are that Apple will be announcing the new iPad 3 on March 7th.  For the first time in a few years I won't be one of the drooling Apple groupies standing in line for hours - or days - to get the latest Jobsonian creation.

I'm sure it will be great.  The specs are incredible, and presumably just like other Apple devices it will continue to help many people work better.  Bill and I may disagree on whether that's "innovation" but we agree on a fundamental aspect of the company itself.  And this time that will override my desire for their latest product.

You reach a point where your moral compass overrides the desire for a great product.  And that's where I am, and probably should have been sooner.

Apple has known about the problems at its outsourced Chinese factories for years.  It pays lip service to solving the problems by doing audits and and sending out press releases reiterating how they are supposedly concerned about worker safety.  Again and again.  And nothing really changes.

Enough.  As I wrote a couple weeks ago, it is time for something beyond just words, and with nearly $100 billion in the bank Apple could truly change the dynamic - if they wanted to.  At a bare, relatively inexpensive, minimum they could have permanent observers in the factories.  They could set deadlines and requirements for real change after which they would relocate manufacturing.  They could invest a billion - pocket change to them - in innovating manufacturing to a level where the supposed "cost" of workers is no longer a concern.  As if it ever was at their margins.  But they didn't and they probably won't.

To be fair, it's not just Apple.  Not by a long shot.  The same situation exists with almost every company that chases "cheap labor" around the world.  Just by nature of the mindset and traditional financial analysis that considers workers a "cost" rather than an asset, the drive will be to get more from less which inevitably leads to the issues we now see in China and elsewhere.  Nike, Victoria's Secret, toys for the London Olympics, fish from Indonesia, and just today Johnson Controls - again in China.

Lean folks regularly talk about the importance of respect for people.  Moral people talk about the importance of human dignity.  It's time we live it, and really mean it.  Some companies also claim to be lean and conveniently ignore that core component, and some companies that don't necessarily claim to be lean - like Apple - still tout that they are supposedly socially aware.  And then they effectively condone the mistreatment of workers, year after year.  It's time they shape up or ship out, and we let them know that we do consider it important.

For me, Apple sitting on $100 billion and paying Tim Cook $189,000 per hour while not doing anything real about the problem in its factories is just too much.  They just lost a $700 sale.  I realize it's not even a drop in the bucket, but perhaps others will feel the same way.