Jun 16, 2011 | Lean, Operations, Strategy
One of the reasons it is sometimes hard to keep a lean initiative alive, or indeed, get it past first base after the initial adrenalin has worn off is the manner in which the traditional accounting systems monitor performance. Often, accounting is the hardest function to win across, because their whole rationale is brought to account, if I may use such a bad pun.
Lets just consider a few of the more common things accounting does to (unintentionally) frustrate lean:
- Counts inventory as an asset, encouraging a build up of inventory, at best, not discouraging it
- Fails to monitor capacity, so simple improvements such as reducing downtime, reducing changeover time, speeding up throughput, do not get counted until a full bill of materials review is done, and often not then. Therefore, good work is not seen on the bottom line.
- Fails to monitor the performance, other than direct cost ,of individual steps in a value stream to understand the impact one may have on the whole value stream.
- Rarely is there a full value stream costing done, including sales and marketing costs, Accounting simply do not have the tools in their kitbags.
- Customer value is a foreign concept to accounting, “marketing takes care of that” (“by the way, what is it?”) making it easy to ignore anything outside the ledger
- Fails to understand that lean builds capacity, and the benefits start to flow only when the freed up capacity is utilised
- Fails to recognise that value streams are cross functional, and rarely fit comfortably into the common functional responsibilities and performance measures that are applied.
So, perhaps task No.1 in a Lean initiative is to get the “beenies” on board and thinking about how the impact of the initiative can be counted, made transparent, communicated, and improved upon.
Jun 15, 2011 | Innovation
How easy it is to believe that the only thing needed for a successful NPD&C process is assets, money, people, time, capabilities, market position, and so on, but how often is it that the real innovations emerge from places where these benefits are absent.
On those occasions, the element that makes it all possible is insight.
Apple, Google, Amazon, Zappos, Intel, Skype, Hewlett Packard, Cochlear, et al all evolved from a position of great insight by passionate people, and little else.
So which is the most important component, the core of innovation?
Passionate insight, by a mile.
Jun 14, 2011 | Collaboration, Communication, Marketing, Social Media
“Immediacy” is perhaps the watch-word to describe the way in which our society works. Communication is so instant that we expect reaction to the communication to be just as quick, and this expectation of virtually instantaneous reaction can be a death trap for those not adequately prepared for it.
Just think what would have happened last week had the MLA properly prepared for the predictable backlash from the 4 Corners program. Rather than a muted response, David Palmer (MD) and other stakeholders in the industry should have been out there, TV, blogs, twitter, U-Tube, et al, with stories, pictures, and commentary that articulated the facts on a personal level, with emotion, and honesty.
There is an alternative view to the sensationally emotional 4 Corners story. There is a modest number of very good abattoirs that process a substantial majority of the animals sent to Indonesia, many of the smaller works, whilst not perfect, are working towards better standards, the local employment around the feedlots and works in Indonesia adds substantially to the local economy, the success of the investment MLA has made over many years to lift standards, the care Australian farmers and logistics suppliers take, and so on. Had this story been well told, we may not have had the level of knee-jerk we have had, and the attention would have been focused on how to improve the minority of the trade in Indonesia that is substandard, rather than a total ban which throws years of work, an important industry in Indonesia and Australia, and the relationship with the biggest neighbor we have against the wall.
Even better, knowing it was coming, use all the electronic tools of the immediacy generation to get the message out there in front of the 4 Corners program going to air to further mitigate the dumb, emotional knee-jerk we are now seeing in the community. Whilst a bit was done, it is bland, unemotional, scripted stuff with no emotional connection, and clearly sets out to arse-cover, rather than tell the story in a memorable way. It failed at both.
What was delivered to our couches last week was pictures of the worst of the worst, highly effective, emotional shock tactics that achieved their objective. The lesson for the rest of us is to prepare for the worst, while hoping for the best, because when the worst happens, your response has to be convincing and immediate.
Jun 13, 2011 | Leadership
I listened to the Rugby League game yesterday between the Broncos and the Raiders, an extraordinary game that the Broncos had won, almost lost, then won in a golden point “coin toss”
For no particular reason, the term “character” came to mind while listening. It is an overused term in Rugby league, every player doing something a bit good is suddenly a “hero” who showed “extraordinary character”, according to pundits, but this is not what post is about.
This is about the character of leadership, the person who can imbue an organisation with a set of behavioral norms that have a lasting and wide impact.
Wayne Bennett must be such a leader. I have never met the man, no longer follow League with any passion, but Bennett’s leadership record from the Canberra Raiders in their formative years, to the Broncos, and now St George is unmatched. Few would bet against him in his next iteration at Newcastle.
So, what is the character of a leader like Bennett?
Surely it is someone who can overcome the challenges presented by the complicated and multifarious environment we all live in, by developing and articulating a sense of inner moral certainty that impacts those being led. They seem to be able to make the leap necessary to subjugate their own needs and ego to those they are leading, effectively to be their leader by being their servant, getting their kicks from those being led, rather than from observers.
In this context it is about giving a bunch of very aggressive young athletes in a brutal contact sport who largely lack formal education, their own moral compass that makes them better players with reserves of determination and commitment they probably do not even recognise, but more importantly, makes them better people in a lasting way.
In other contexts, the impact of character is the same, it is just the names that change. Perhaps this is why we are so cynical about our political and institutional leadership, every time we wake up there is another example of someone in a leadership position demonstrating the lack of moral and philosophical depth by being “pragmatic”.
Jun 13, 2011 | Collaboration, Lean, Strategy
A basic discipline of Lean Thinking is the quest for the root cause of a problem, enabling a solution to treat the disease, not just the symptoms.
The converse discipline, seeking the root cause of success so that it can be understood, articulated and used to build repeatable processes is far less commonly used, but no less important.
Many years ago as a young product manager, I was on the periphery of the creation of Meadow Lea’s iconic “you ought to be congratulated” advertising. As the success of the advertising which emerged from a brave combination of consumer research and creative insight became evident, a lot of effort was put into assembling a detailed understanding of the dynamics at work that drove the success, so we could ensure it continued whilst being expressed sufficiently differently to remain fresh to consumers .
I have never forgotten the lesson.
Unfortunately, the more recent management of the current owners of the brand, Goodman Fielder, have forgotten the lessons if they ever knew them, proving again the value of corporate memory, and the effort it takes to institutionalise it, turn it into the culture of the place, rather than allowing it remain in peoples heads, only to have them move on.
