On the Efficiencies of Business

So, I’ve been going to therapy for a few months now to deal with depression. One of thing that has come up is how I don’t really release a lot of the emotions that I am feeling and one of them is anger. I typically swallow that to stay diplomatic and deal with whatever situation as well as I can. I think that I’ve been stewing about this for a while and mentioning it to my friends periodically. I don’t feel that business leaders respect my career path and don’t understand how to actually make their businesses more efficient.

Excluding the past two years, the majority of my career has been focused on Lean, Six Sigma, or Lean Six Sigma (yes all of them are different in terms of how you approach continuous improvement). I have run projects, developed courses, facilitated strategic planning events for companies like AMD, but the entire time, I never truly felt secure in my role. At Samsung, we had lay-offs and last some employees, at AMD, we definitely lost some and my Director actually decided to be let go to save a number of my coworkers. This is in spite of the fact that our group had saved the company measurably millions of dollars over the 1.5 years I worked at AMD. We were always on the chopping block. Then while working at Cambia (Regence Blue Cross Blue Shield) I was laid off, even though the result of my training program included winning a national Blues award and saved the company a lot of time and money. My team easily paid for itself more than once over while we were there (my team was me and my employee Phil).

As we all know Insurance companies are always raising premiums. The underlying assumption is that these businesses are actually working to continually drive down their financial overhead, but those damn regulations keep getting in the way to drive up cost. This is just flat out wrong. These businesses don’t actually know how to drive improvement in their organizations. The only way they can even imaging improving their business is to hire an organization like McKinsey or BCG which costs millions and gets little to no result. The results they do provide are typically brought about by recommendations internally to the organization that leadership is unwilling to implement unless told about them by an expensive consulting group.

This is problematic because it doesn’t actually change the culture of the organization to drive continual improvement and innovation. As I’ve written in the past Innovation and Improvement are positively correlated. Furthermore, these training classes help expand people’s networks, which also significantly improve innovation as well.

So, first of all, I’m pissed off at corporate leaderships for not understanding the value of continuous improvement. Second, I’m pissed off that it’s just accepted that businesses always figure out ways to be more efficient. This isn’t true. If it was true there wouldn’t be a large number of people in their mid-50’s looking for work after a very successful career in continuous improvement. If these businesses didn’t think that the best way to improve efficiencies was to cut costs and then have someone else do two people’s work, this wouldn’t be a problem.

You can reduce headcount and drive up efficiencies, but only if you provide your people with the right tools and the requires true investment in the business. Although, all continuous improvement efforts pay for themselves if you aren’t just looking at how much a few people cost that are part of the team. You need to weight that against the positive gains they are making for the organization.

I’m pissed off about this because I feel like Michael Bolton from Office Space “I shouldn’t have to change, he’s the one who sucks.” I have had to completely change my career, which I was really passionate about because I don’t trust corporate leaders to try invest and buy in to continuous improvement. Maybe this is short sighted and I just need to find the right company. But I’ve looked I’ve been at a number of them and I’ve heard stories from other people that have been laid off (while i was interviewing for the position Phil filled) for exactly what I’m talking about here. So as a response I’ve tried to protect myself from that by avoiding applying for those jobs.

I loved doing that work because I knew at the end of each day and each project, I made someone’s work life better. Which is awesome. You listen to their problems, which helps them, but then you provide them with the tools to make change and to fix their current situation. When they look at how that aspect of their job is going to work after you finish the project, you can just see how much happier they are. You can see that it allows them to focus on the thing they were hired to do, not deal with some bullshit that was there because it’s always been there.

Businesses need more of this. The culture needs to change from top to bottom. It’s the role of the Lean Manager to change the culture so that people want to do continuous improvement. It’s the role of the business leader to provide the right incentives to do this as well.

An Election Reflection

I’ve been pretty disappointed with the entire election process this go around. I haven’t blogged at all during it because I’ve been so disheartened by all the candidates excepting Bernie Sanders. I felt betrayed by the Democratic party, which I even decided to join, shedding my proud independent classification to actually vote in the primary. He struck a cord with me that I think a lot of people that have lost their jobs and had hard times could relate to. Apparently, some people felt that with him out of the race the next logical person was Trump. He was speaking to the same people.

One thing that we have to keep in mind about this, and if you travel around the US you’ll see this, is that most of America is really suffering. I used to drive between Austin and Santa Fe, New Mexico on a really regular basis. This was a super depressing drive. There were entire towns that were essentially abandoned. Boarded up homes, empty shops with shattered windows, and rusted out cars on the side of the road. It was depressing. With my current job, I frequently travel to other cities for work. Most of these cities have a lot of money, but every time I’ve had to go near the part of the town that’s really depressed. That is hurting, that needs saving.

These are the people that voted for Trump. The people that have no hope. My home town most certainly went to Trump, the county did as well. Except for a few areas that part of the country is pretty depressed. In a small town like Grove City, there are only one or two major suppliers of jobs and if one of them closes down due to a loss of contract or moving a plant somewhere else, the entire town and surrounding area will suffer. Trump’s goal is to make it more difficult for that to happen.

States like PA were hit super hard by the shifting of economics away from manufacturing in the United States. Yes we’re still one of the largest manufactures in the world, but at most of those facilities, they are heavily automated and the jobs that require more and more skills are fewer and fewer. For example, in a semiconductor fab, there are two types, fully autonomous where the only labor are engineers or equipment maintenance people or manually loaded fabs, where you toss in a handful of operators to load the tools. The goal of every fab out there is to drive down the cost of the operators loading the tools but using systems that will do their thinking for them.

This is just business. This is only going to get worse over the next 5-10 years. In fact, news outlets are already calling that automation is going to prevent Trump from meeting his job goals, even if he pulls back large amounts of manufacturing to the US. Elon Musk is calling for a Universal Income because automation is going to take our jobs. It’s not just going to be low paying jobs, this is going to move up the food chain and will probably take out jobs like Paralegals, reduce the number of doctors, etc.

This is why Trump won. The folks that voted for him voted for him in spite of everything else he stood for. They were able to look past that because he was promising them something that Clinton couldn’t. He selling them the idea of real job creation. He was telling them that his business experience would translate to getting the best deal for US workers, because he’d done it before. This is what they heard. Even when presented with (faked) behavior worse than “Grab them by the Pussy” his supporters looked past it (Clinton supports did the same).

What we need to do now is to organize. Create long lasting groups that will change the way the US does politics. This needs to start at the local level and move up to the larger stages. It will take time. The first step to righting many issues within the country is to get rid of various forms of Gerrymandering and eliminate corruption through campaign finance reform. I believe this has to be the first place to start, because as Trump says, you can buy access to any politician if you give them money.

Government Policy and Technology Innovation

In a way that mirrors yesterday’s court ruling, the FCC announce they were going to investigate and likely force serious changes in the world of set top boxes. The FCC, at one point, forced and supported the cable industry in controlling the types of set top boxes (Set top boxes are cable boxes – Roku and AppleTV are cableless competitors) available to consumers. Since then, we’ve suffered with mediocre and extremely expensive boxes. Boxes that cost $16/month and over time you end up paying for a box 10 times over. The gist of this issue is whether or not to allow companies to make “soft” cable cards. Right now, if you want to decode any video from a coax cable from Comcast, you must have a physical card to do the decoding. There’s nothing preventing this from being accomplished entirely using software once you get the signal into the box and that’s what this is trying to encourage.

Granted, this has taken a while for the FCC to wake up and look at the competitive landscape and see that this isn’t in the public interest. Defining exactly what is in the public interest is a difficult because everyone sees this in a different light. However, it’s pretty obvious that something that you end up paying $1,920 over span of ten years isn’t in the public interest. The competition, Roku and AppleTV, each cost between 100-200 one time and you can use it until it dies which will probably be something like 10 years. I’ve had my Roku HD for 5 years now and it still works great. It would make perfect sense for me to buy a version, assuming I had cable at all, that would allow me to watch cable through it. Everything all in one place.

This is the type of regulation that government should be celebrated for encouraging. Granted they screwed it up to begin with and they are only righting a wrong now, but they’re on the right path. Regulation like Net Neutrality is a similar decision that can spur innovation. Looking at T-Mobile’s binge on plan, you can see why we need this. If I’m a small streaming company or, ya know, YouTube, I look at this platform and see how it’s slanted against me and limits what I’m capable of delivering on T-Mobile’s network.

in the case of the FBI and forcing technology companies to change their technology to reduce security, it’s nice to see an organization that’s willing to at least consider improving opportunities for innovators. Sure it may look like picking winners and losers – but when most policy is driven by current winners picking them to lose sure looks more like balancing the playing field to me.

Privacy, Government, and Business

This week there were two big moments for privacy. First, was a ruling by a court that Apple had to unlock in some manner, call it decrypt or creating a backdoor into this specific phone. Second, was the fact that Apple, and now Google, has given the state a big middle finger saying “No!” These are important because of the gravity of both of these. The FBI is using “The All Writs Act” something from the 18th century and definitely not written to support dealing with difficult technological issues on technology that would appear to be magic to the author’s of the act. This is definitely stretching this law to its limits and likely beyond what is realistic, but it sets a precedence which is dangerous. The second part is important as both of these companies have been working with the government to provide data to them in the past.

While both of these companies are standing up to the government is great, it’s not enough. With a limited number of powerful players, it’s only a matter of time before they lose to the government or be threatened in some way that will require them to play ball with the government. On the other hand, smaller companies won’t have the money to fight the government, so even if you want to support a smaller company with privacy as its core values, there is no guarantee that they will be able to follow through. Furthermore, if the government forces the company to re-write its operating system, like Apple effectively has to do, the company might go bankrupt. With a precedence set by the Apple decision, a small phone company like Silent Circle and their Blackphone, would be forced to capitulate unless they were able to show that this was unduly burdensome.

The other issues with this case is that businesses are only fighting for what is “right” here because it will help them improve their bottom line. Of course, they are also fighting for their own personal privacy as an employee of the company and consumer of its products, but the goal is to improve profitability. Across the world it has been shown that privacy and protection from agencies like the NSA (US) and GCHQ (UK) is something that people are willing to pay for. Apple learned this from Blackberry during the Arab Spring – they emulated the encryption of the Blackberry Messenger with their iMessage application. This help transition some of the last hold-outs to Apple and eventually spurred other similar apps.

I believe it is likely that the Electric Frontier Foundation will be a strong advocate for Apple, so if you want to support Apple in their battle with the government I recommend donating to the EFF, especially if you don’t support Apple for its other business practices. I know I will.

Economics are Tools

I read an interesting article on The Atlantic the other day, probably read it in the past as it was an OpEd written in 2013, but is still as important as ever. The article’s premise is that there are no Economic Laws.

This of course is obvious, as in hard science we never refer to anything as “Laws” any more, other than antiquated theories that represent paradigmal thinking from great minds of the past. For example, the Law of Gravity has been significantly modified with the Theory of Relativity. Sure, the underlying math of the “Law” works for the most part, but breaks down under certain conditions. Meaning that it’s not actually an unbreakable law.

Even in Mathematics there are no true laws, there are theorems that are true, however not all those theorems can be proven to be true, according to Godel’s Incompleteness Theorem.

If we are unwilling to say that there are no laws in Mathematics and Physics, how can we so willingly say there are laws in Economics? This is foolish as it pushes us to think that the Economics is unchangeable and thus works consistently across all conditions and times. Recently the IMF released a report essentially arguing that the trickle down effect doesn’t work as it truly doesn’t “raise all boats”.

We must instead look at Economics as a tool, one that is imperfect and should not be used to moralize. However, it can be used in policy as long as we are willing to abandon the tool once we see that it does not work. Furthermore, tools that worked once don’t always work in every situation. There are tools that are more flexible and likely to work than others, similarly to specific frameworks. This is true in Process Improvement as it is in Development and Economics.

We need to seriously look at our policy tools and think about abandoning some of our economic frameworks as they are hurting the economy.

Starting with Lean

I had a great conversation with a new friend yesterday. He’s a dentist and is looking to drive continuous improvement within his small organization. He’s feeling overwhelmed, since he’s busy with being a dentist, running an office, and managing a small team adding any extra responsibility seems like it’d put him over the top. He wants to do process improvement because he things that there’s a lot of waste in his small organization but he is terrified of starting because it seems like more work that he doesn’t have time for.

This isn’t the first time I’ve heard of a Dentist wanting to improve processes or go Lean. While working at Samsung I watched a Webinar about the Lean Dentist, Sami Bahri, who several years ago began to implement Lean at his dental practice. He’s since gone on to write two book, one of specific importance to both Healthcare and Dentistry: Single Patient Flow. This really turns the concept of provider centric care on its head. The goal of Single Patient Flow is to maximize the “utilization” of the patient. No, this doesn’t mean treat patients with unneeded tests to keep them “busy.”

No it means that we need to measure the value added component of their time in the clinic and set a goal of that as close to 100% as possible. This means warm hand-offs between any assistants and the doctor, it means no waiting in the waiting room. No waiting in the office for people to come. None of this is something that we’re willing to pay for, yet we must pay for it. Actually in most cases our employers are paying for it through lost productivity at our jobs.

Moving towards patient centric offices also changes the how the patient expects to interact with you. They will know more because they did some research coming in, this information could be wrong so it will take more time to explain to them the correct diagnosis. People using WebMD is a result of dissatisfaction with existing doctor offices.

Becoming more patient centric is a big deal and takes a lot of work. Where do you start? With anything. Yes that’s a bit of a cop out statement, but it’s also true. Pick anything that is causing pain for either your staff or your patients and map it out. Figure out what the process currently and where the wastes are. Work to eliminate them. Start with something small like how you answer the phone or greet the patient when they walk in the door. Figure out who should be doing this and how to ensure it’s the right person doing this work.

Start somewhere. Start where you can have a quick win. Start where you think it will help the patient quickest first.

Enabling Innovation Through Lean Improvement

This is part of my ongoing Lean Disruption series where I write about how to combine Innovation Theory, Lean, Lean Startup, Agile, and Lean product development.

Since values and metrics drive processes how can you enable innovation in an organization that isn’t completely willing to support innovation? As I mentioned before Skunkworks are a key component in this process. Using emergent strategies with Lean Startup tools such as the Lean Canvas are another key method to enable innovation with the skunkworks approach. However, not every organization can or will truly allow this approach.

In organization that cannot or will not support a skunk works approach to innovation what options are available? In the case where you are a manager of more than yourself you have the ability to implement Lean within your small organization. Owning the processes within your organization and becoming a coach to your employees, can begin enabling metrics that drive customer centric focus.

This is possible by taking a single step and picking a metric that will move the metrics that your bosses care about. Focus on improving one process at a time. Start with something that is completely in your control, such as how you hand off material within your group that goes to other groups. Measure the number of errors your group introduces, however do not blame people. If things are wrong investigate the root cause of the problem rather than accusing your people of causing the problems. Problems can come from the group that handed off the work. In those cases, create a process to review the work looking for errors and then work with the team supplying that work to eliminate those errors where you can.

In the case where there are errors within your team, you work together to uncover each source of the problem. As a manager you own the processes as much as the result of the work your team does. The final output of your work is 100% dependant on the processes that lead to those output. Another important step is to work on converting your daily meeting, assuming you have one, into a daily standup rather than a typical beat and greet. These meetings instead must cover the goals for the day, issues from the day before, and follow up to address those issues. In the case where the team has projects they are working on, this can become an opportunity to being pulling in some agile stand up practices, such as “What did you work on yesterday, what do you plan on working today, and do you have any impediments?” These questions can help change the way projects are run within your group.

To improve processes within your group, the best way to do this is to go to where work is being done. You must actually watch as work is being done, while keeping in mind that the way work is being done will change as you watch people work. Make sure they are aware that you are not going to be critical or even record who is doing the work at the time. Record the information and move on. You should not use this information in their next 1 on 1 or review. The goal is to learn how people are doing work especially across work types and workers. After you map the process review the results in your daily stand up to discuss potential issues. Partner with your team to find the root cause of the problem and empower them to make changes to their processes.

Before you change the process it is important to measure current state and measure the impact of those changes on the metrics that matter to you. Keeping in mind that you must make all changes from a customer’s perspective. These are the easier things to implement. However, making changes and getting support in this change from your leadership isn’t going to be easy, so you must show that you’re making wins and improving the result of your work. That’s all leaders care about.

Successful process improvement opens the way to broader innovations. Start small and then move into larger projects as you have a better understanding of what you are trying to do.