01 November 2009

In most modern countries, as much as we complain about our leaders, we can trust that the system works. In the US, we the citizens, can trust that most of the laws and regulations are designed to give us a level of protection from corporate and government predators. (Yes it’s not perfect, but I’ll illustrate just how well we collectively trust our industries, government and leaders – even though we refuse to acknowledge it.)

Take for example NHTSA. It regulates vehicle safety in the US. Because of their requirements, we can trust that any vehicle we buy has been tested and validated to meet the most stringent safety standards. We know that if a manufacturer fails to meet these standards, the system will place incredible pressure on them in the way of lawsuits and hearing on Capitol Hill.

When is the last time you bought a car and had to think… “gee, I wonder if the airbag in here actually works?” You trust the safety systems, and that is a direct result of the overall system put in place by NHTSA.

When a system is not trust worthy, when citizens can’t trust their leaders you can quickly see indicators. Most indicators are verbal. Call it marketing spin. When actions fail, most failed leaders and systems try to mask their failures by trying to cover our eyes. In most dictatorships, masked democracies, or even companies with leaders that can’t be trusted, there is great emphasis on marketing. In fact, as the old communist rule goes… tell a lie 1000 times and it becomes the truth.

The following example would be funny if it weren’t for the fact that it’s the likely result of many deaths due to failed airbags. I pulled this out of Iranian auto manufacturing company ICKO

  • “Samand Soren is a new family saloon created by Iran Khodro Industrial Group in 2007. The car enjoys latest automotive technologies which provide high levels of comfort, passive and active safety, and driving pleasure. Soren is equipped with a standard airbag to protect the driver against injuries resulted from severe collisions. The system has been tested in a reputable laboratory and its proper function has been approved.” - reference
If you read through it, they are trying to convince the weary Iranian buyer that the airbag has been tested by a reputable laboratory. (In my opinion, Iranians distrust airbags, laboratories, and the entire regulatory system in their country).

The other example comes from the very recent Sukhoi Superjet crash. Reading through the text you see statements that smell of distrust… and with good reason.

  • The agency also cited an unidentified spokesman for the Russian Transportation Ministry saying a preflight check had turned up nothing suspicious, a standard assurance offered by Russian transportation authorities after mishaps. “The plane was absolutely flight worthy,” the spokesman said. 
There is a reason why Russian jetliners are not sold outside of countries like Iran, Cuba, and parts of Africa. They can’t be trusted.

Managers and leaders are resourceful. They will spin the facts to their advantage when trust has been broken. When you spot some twisting or bending of facts, it is very likely the leader or organization is trying to hide its trustworthiness. When an organization or leader ‘begs you to trust them’ it probably means you shouldn’t. 

.. and this brings me to my initial statement... Trust is the pillar anchoring the success of any person, manager, organization, or government. Trust is the cornerstone of performance.

If you have examples of broken trust feel free to share them.

Posted on Sunday, November 01, 2009 by George R.

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I could write an entire book about this topic, because trust is the cornerstone of performance. Toyota’s House of Lean has foundations and pillars supporting a roof that houses one thing - the most important thing in the organization – its PEOPLE… its TEAM. This blog post will likely my longest in a while, but after growing many gray hairs (not from stress, but from experience), I have the wisdom to say that without trust NOTHING works well, but with trust organizations can bounce back from the brink of disaster. Case in point, Toyota handled the recent triple-witching (economic crisis, brake issues, and the tsunami) like it somehow had always planned for a doomsday scenario. This was possible only because its team could trust its leaders and its leaders could trust its team.  (I ask anyone who can name a non-Japanese company that could weather a triple witching like this without a major government intervention to please post it in the comments section.)

Trust is something earned, not given. This is true for management, systems, organizations, and even individuals. Trust is built on doing the right thing, consistently. When trust is broken, performance is affected. The effect can be subtle or long lasting, and can even have life and death implications. Organizations struggle when their leaders cannot be trusted, and unless CEOs resign or are replaced, they normally head to bankruptcy. In similar situations, governments are forced to take up arms against disgruntled citizens that have lost all trust and confidence in their leaders. In this scenario, the lack of a ‘board’ that can ask for a leaders resignation, citizens are forced to take matters in their own hands.

Leaders must layout systems with fair and consistent rules and procedures. They must not play favorites, and they must reward and/or recognize those who consistently work hard and show passion for the common organization. For example, Toyota’s idea management system (their continuous improvement and innovation initiatives) consistently guarantees that its team members’ ideas will be heard and acted upon and the TMs will be recognized. This overall approach yields tens of thousands of actionable ideas, and further more guarantees that team members will not ‘sit’ on any good ideas. Toyota employees trust the system!

What happens when trust is broken? Let me illustrate this with a baseball analogy. Players want to win, and they know they must do it as a team. However, they also want to have fun. This means they want to hit the ball and they want to be the ones making the outs. They too want some recognition… and in baseball, as in all of sports, that recognition comes from the fans.

A manager or coach needs to properly manage a team, with multiple characters, egos, and skills to ensure the team can win. He must trust his players to do the right thing to the best of their abilities, but more importantly he must acknowledge their good plays, and give them his support and tools to help them improve their areas of weakness. Managers must treat ALL their team equally, and reward them equally (these are all things inherent in the Toyota Production System)

A coach needs to be trusted by his players.  There are times when a coach may need a player to hit a SACRIFICE fly or bunt, to help runners score. A skilled player may also be asked to play a position he doesn’t particularly like (i.e.: left field) where the odds of being in the ‘action’ at any given time are greatly reduced.

Just like asking workers to work overtime, or on weekends, this requires the workers to trust that the decision is the best for the team. A manager who calls in his workers on Saturday because he needs them to cover for him while he goes golfing risks losing their trust... and that of his peers.  But in reality it only takes a manager to ‘cross’ or lose the trust of one team member in order to see the ripple effects on the team’s ability to perform.

So what happens in baseball when players lose trust in their coach? When a skilled player is sent to the outfield, or a good hitter is made to bat last? In most cases, if the team is winning, they will continue to trust the coach. But what happens when that same player watches his teammates make error after error in the infield while he's tucked away in the outfield? What happens when the player who is batting last hits better than those at the start of the lineup? What happens when the team continues to lose? What happens when he isn’t given equal opportunity to listen to the fans cheer at his actions (recognition)? The answer is simple. The player will do what is best for him. Just like an employee looking for work elsewhere and recognition elsewhere, a player will swing for the fences when asked to bunt the ball. He will try to make the low percentage heroic play from the outfield (i.e. throwing the ball home hoping to get a runner out, and thus allowing other base runners to advance). Chaos can ensue when members of a team start putting themselves ahead of the team effort, and that is usually the result of managers and coaches putting their interests ahead of the team’s interest. Teams lose trust in their leaders when they fail to show trust and respect in their teams. This is the key to Toyota’s success!

Posted on Sunday, November 01, 2009 by George R.

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22 October 2009

idea management software
I came across this article in the New Yorker and thought it to be a great collection of examples illustrating the benefits of collaboration.

The point of this article is that inventors stumble upon great inventions not because they are geniuses, but because they’ve been exposed to certain events and information that when tied together yield the Eureka moment. It illustrates this by reminding us about the multiple inventors of Calculus, the thermometer, but more interestingly, the inventors of the telephone.

Mr. Bell had filed his patent not years, months, or days before Mr. Gray, but rather a few hours before. It turns out both of these inventors were exposed to similar concepts and information and both came upon the Eureka moment at the same time. This pattern of multiple inventors is seen throughout history and is a reinforcement of the theory that inventors are normally not geniuses, but rather people who have the right collection of information at the right time.

The article uses the example of a company called Intellectual Ventures founded by Nathan Myhrvold from Microsoft and funded heavily by Bill Gates. This company was created to invent. The formula was to form a discussion group of individuals with multiple backgrounds; doctors, engineers, lawyers, and businessmen which collectively held different sets of information and thus could collaborate on different subjects. The result: IV generates hundreds of patents each year.

The moral of the story is that unless you have a genius amongst your R&D staff, the best bet you have at succeeding in innovation is gathering individuals with different backgrounds and have them discuss a topic or challenge. This will give you the multiplier effect and you will be guaranteed to find the Eureka moments much quicker and more frequently.

Link to the article:

In The Air: Who says big ideas are rare? By Malcolm Gladwell

Posted on Thursday, October 22, 2009 by George R.

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25 September 2009

This is perhaps one of the few absolute truths that apply in today’s market place. There is truly and absolutely no value in ideas unless they are implemented. That’s why it’s imperative for organizations to streamline their ideation-to-implementation processes.

Many organizations have realized the value of using idea management software to achieve this. Even though it’s management’s responsibility to lay down the processes that will foster a culture where individuals will openly communicate their ideas, the tools they select to facilitate and guarantee the process transparency can vary by a wide range.

At first glance, idea management software sounds like a tool, which regardless of the version or vendor you choose, will accomplish the same result. This is not the case. Unlike word processors or spreadsheet programs, which all act, feel, and accomplish the same or similar results, Idea Management software has to address many factors that span psychology, corporate culture, markets, business goals, and if implemented correctly should become part of an organization’s fabric.

Although many vendors have developed inexpensive ‘quick-implement’ solutions, experts agree that a truly successful Idea Management Software implementation requires the ability to be customized. Not having the optimized submission forms, not having the right workflow, not having the right evaluation forms, not having optimized reports to show transparency, and not having the right reward concept can all lead to a system that does not maximize the opportunities found in an organization’s collective idea pool.

When IM software is tailored to an organization’s needs, they benefit from a system that matches their culture, addresses their goals, and stands a very good change of blending and becoming part of the organization’s daily activities. When this happens, the foundation is set for success in the ideation-to-implementation process.

Posted on Friday, September 25, 2009 by George R.

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14 August 2009

In Part I of this blog entry I illustrated how the 5-why method helps to narrow a broad problem down to its root cause. This root cause becomes the problem definition.

Industry leaders know that the key to their success is to effectively identify market needs before their competitors do. To do this, they can ill afford to devote their valuable resources on a broad problem (i.e.: How can we do business in the Asian market) because doing so means that the answer will take longer to identify and validate. Instead, they focus on the same question and narrow it down to a more targeted question: “What products can we develop for the Chinese software market?”

So going back to the Locked Key scenario in Part I, over the years, auto manufacturers have realized that locked keys presented opportunities. In a likely scenario of 5-Why problem-solving an auto manufacturer may have approached the innovation behind one of the many locked-key prevention methods in this way:

Initial Problem: People get locked out of their cars.

Why (1)?: People lock their doors without having the keys in their possession.

Why (2)?: People exit the vehicle without removing the key from the ignition.

Why (3)? People are distracted

Why (4)? There are many factors such as radios, phones, children, rolled down windows, open sunroofs, lights, wipers, purses, and briefcases that a driver must interact with when getting ready to exit the car.

Why (5)? Humans try to multi-task, even though they can only do one function at a time?

The 5th question becomes the key to generating the right question because it is clear that people lock their keys because of “function overload”. A properly phrased challenge would be: “How can we prevent drivers from locking their keys if we cannot count on them to consciously remove the keys from the car?” This question is key in that there is a need to prevent drivers from locking their keys in the car, but also a realization that in the solution you cannot count on the driver to consciously participate in removing the keys.

I chose this example because it wasn’t until this last decade that a real fool-proof solution to the locked key dilemma was devised even though for the better part of the last 3 decades auto manufacturers innovated nifty mechanical schemes to force drivers into un-natural motions before locking their doors, or intricate electronic schemes to unlock the doors (some from outer space!... via satellite.) …here is a small sampling of those solutions:

1) Lifting on the door handle while depressing the button
2) Locking the doors only with the remote
3) Forcing the driver to lock the door with the key
4) Providing a call center that you could call from a phone to have a customer service rep send a satellite signal back to the car to unlock it
5) Providing a numeric combination keypad on the door.

These were each good solutions, but what is evident is that the question of how to prevent distracted drivers form locking the keys was addressed many times and in different ways and with obvious financial and technological constraints.

In the case of the locked key, the innovation which is now the trend in the auto market, but most likely not the final solution in a long list of attempts, is the RFID key. This solution allows the car to detect if the key is inside or outside the car before locking it. “Keyless-Entry”, and its close cousin “Keyless-Go” have virtually eliminated locked key situation. ( …unless, of-course, the driver decides to throw the key back through the open sunroof and into the vehicle after it has been locked.)

In conclusion, the real “Key” to innovation is in the problem definition. Don’t lock your organization out of effective innovation by ignoring the root problems.

Part I

Posted on Friday, August 14, 2009 by George R.

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24 July 2009

The key to innovation lies in the problem and not the ideas. In the Lean Manufacturing world, and one of the reasons why companies which live by production systems similar to TPS are successful, is that they systematically use problem solving tools such as the 8-D, the 7-Steps or the 5-Why in order to improve their processes and products. In the scope of innovation, the later is perhaps the most versatile of the tools in that it forces you to ask “Why?” (to the previous Why) multiple times until the problem is narrowed down to a potential root cause. Narrowing the problem down to the root cause allows you to work with only a small set of feasible solutions that can truly address the bigger problem.

Taking a real life (embarrassing) example that most of us have experienced (ok, I’ll admit… not most, but many of us.): Locking our keys in the car!

That in itself is a broad problem, but there may be numerous reasons or combinations of reasons could cause this problem, and for everybody it is a different set of circumstances that will cause it. Things ranging from a phone call at the wrong moment, the radio being on, a beautiful person walking by (yes, we are all guilty of wandering eyes), a malfunctioning door lock, a crying child… and the list can continue to grow… can lead to the problem. It is also true that for each individual the corrective action that will eventually need to take place will be different, and it does not make sense to correct every possible cause when in reality only one or two circumstances will lead to it.

So here is an example to illustrate the 5-why strategy to find the real problem that caused the keys from being locked in the car, and how an individual would use this technique to prevent it from happening again:

Initial Problem: Keys locked in the car

Why (1)?: I was distracted.

Why (2)?: I was talking to a friend on the phone

Why (3)? I was talking on the phone while driving.

Why (4)? I answered the phone.

Why (5)? The phone rang.

The real root cause to the problem of locking the door with the keys in the car was that the phone rang. The solution to the initial problem will be to find ways of keeping the phone from ringing. In essence this is the real problem that needs to be solved. And just to put forth the few ideas that I think can solve it…

1) get rid of the phone.

2) turn the phone off when getting in the car

3) turn the ringer off when getting in the car.

Now, had we tried to find solutions to the initial and broad problem of locking the keys in the car, we may have generated a gigantic list of feasible ideas that would not have effectively solved the problem. For example:

1) get rid of the car

2) don’t drive

3) Remove the locks from the doors

4) tie the keys to my finger with a string

5) hire someone to remain in the car 24/7.

It goes without saying that the key to solving a problem lies in phrasing it correctly. In the case of the locked key the real problem that needed addressing was “How do we keep the phone from ringing while driving?”

The 5-Why tool is a valuable tool that can also be used to define an innovation challenge. By defining the problem correctly, your team will be able to formulate the best ideas to address it.

Part II

Posted on Friday, July 24, 2009 by George R.

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15 May 2009

It’s about time! For years now the healthcare industry in the US has been suffering form a sub-competitive market. Demand for services, medicine, doctors, cures… and the list goes on… has far outpaced the availability of these, and in consequence has led to yearly price increases which double or triple the rate of inflation.

Now, I’m not saying that I agree with the new administration’s ‘socialization’ approach, however, the fact that over regulation has made it nearly impossible for new players to enter the market, and forcing family doctors, who will spend most of their lives prescribing Tylenol and antibiotics, to spend 8 years in school just to do that, it’s about time government take a new approach to make these services, not only more affordable, but more abundant.

Needless to say, whether government starts regulating costs or they open the gates to allow greater competition, the current players will have to find new ways to keep their bottom lines healthy. Not only at the research level, but at the operational level these companies and service providers will have to get better in light of the new rules that will likely impact the industry.

The ‘medicine’ that these players will need heavy doses of will be “innovation”. However, this innovation will have to come with different rules governing the market. The lack of competition has allowed these players to forget what the words ‘frugal’ and ‘efficient’ mean. The entire system will be under cost pressure to meet the new reality, and they will no longer be able to throw unlimited amounts of money and resources to “find the cure”.

All processes in this supply chain will need scrutiny and most providers will come to realize that not only the ideas from their scientists and doctors will have to be taken into account, but the ideas from the nurses, bill collectors, shop floor operators, call centers, ER staff, insurance companies, orderlies, and perhaps even the customers will need to be considered and addressed.

Posted on Friday, May 15, 2009 by George R.


05 May 2009

Occasionally when talking to prospective clients about our idea management software we are asked how many ideas a healthy CI Process should generate. Our answer to them is that a healthy CI process can generate one idea per employee per month.

This normally comes as a surprise to organizations accustomed to receiving one tenth as many. In the mid-1990’s, while working at a major automotive supplier with 10,000 employees distributed across 3 plants, their Employee Suggestion Program (which they inherited from one of the BIG-3) generated a whole 2000 ideas… well short of the 120,000 a healthy CI process should have yielded. (To be fair, most of these ideas were submitted by teams of 5 employees).

These 2000 ideas consumed an enormous amount of resources in non-value added activities. Ideas were being recorded on paper. They were then transcribed by an administrator into a database and an “Idea Folder” was created. This folder was then passed around to the stake-holders (decision makers, evaluators and implementers). Many times these folders would sit on desks for weeks until an administrator came by looking for it because the person who submitted the idea wanted to know the status. Not a pretty picture and one that would spell total chaos if challenged with 120,000 ideas.

Further compounding the problem was that less than 20% of the ideas were implemented. A good reason for this was that the organization didn’t have a good CI culture. All ideas, regardless of how big or small had to be approved prior to implementation. The approval was done by committee… endless meeting hours spent by a team of engineers and managers deciding which ideas had merit and who they needed to be delegated to. Nobody was happy with the system except the few lucky ones who were able to drum-up a few $50,000+ ideas and benefit from several thousand dollars worth of gifts.

The overall program bred mediocrity and little excitement. The clumsiness of the business process associated with this continuous improvement scheme was self-sustaining. The good ideas took too long to implement and often they were rejected with little explanation to the submitters as to why. This all led to low participation and even lower idea quality. It was difficult for this team to effectively process 2000 ideas let alone 120,000.

However, managing your CI process need not be this complicated given modern day technologies. A good, web-based idea management solution will do away with most of the pit-falls and problems found in a manual system. The system is accessible by all, idea routing is automated, and stake-holders are kept informed of the progress of all ideas they are associated with. Should stake-holders take too long on their assigned tasks, they are promptly reminded by the system.

Employees are able to record their ideas via a simple web-form and the system administrator no longer has to transcribe them into the database. Idea delegation is semi-automated. Upon submission, the system automatically routes the idea to the idea champion. In ‘Lean’ parlance this is the idea coach, or mentor. The champion checks the idea for merit and is able to delegate it to others should it require support. No longer are ideas passed around in a folder since relevant attachments can be uploaded to the system. The virtual folder can be delegated and reviewed from any place in the world!

So back to the 120,000 ideas: The reason why companies like Toyota can claim implementation rates greater than 80% is because most ideas are implemented before they are documented in any system. In a truly lean organization, having a committee to evaluate and rule on 120,000 ideas is not necessary. The CI process, when implemented correctly, targets the simple improvements that can be made by individuals in their own areas with little supervisory approval. The process alone distributes the workload of evaluating ideas and confirming their implementation to the idea champions or direct-line supervisors. The more complex ideas are routed by the champions to the necessary resources, and the system ensures the virtual folder does not sit on anyone’s in-box collecting dust.

The greatest winner in the implementation of a web-based idea management solution is not only the whole organization but more importantly the management team. No longer is an employee suggestion program a burden to the management team, but rather an asset. The metrics associated with such solutions give organization leaders easy to get to and valuable live instant statistics regarding the health of their programs. These metrics take the guesswork out and allow managers to quickly identify where the business process can be improved. Ultimately, the benefit of such a system is reflected in the bottom line and most likely in manager bonuses.

Posted on Tuesday, May 05, 2009 by George R.


22 April 2009

Several years ago we were introduced to the buzz phrase "Do more with less". This term signified the need for organizations to trim and better allocate their available resources while doing more and executing more efficiently.

However, this phrase was missing something. How do you do more with less when your resources are all utilized 100%? The answer is the new buzz-word…"Innovation". Innovation will be the word we will all come to accept as the norm for surviving in this market.

As organizations right-size themselves to current economic times, they will lose access to available resources and cash. This will force organizations to embrace the collective creativity of their workforce in order to find innovative ways to keep production facilities running, and new product and services flowing into the market.

Posted on Wednesday, April 22, 2009 by George R.

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