Tips on Using Lean to Reduce Variation In People and Processes

When we think about variation, most of the time we think about our processes. You know, the equipment that goes around and around, what we manage every day, and the things that make us money. We create process control charts for our systems and quality parameters. We go through the project stages. But, how often do we look at the more general people effects on limiting variation?

In our rush for results fueled by the current economic downturn, it will do us good to apply some lean thinking to ourselves and those we lead or follow. Many of the lean tools can help us to work through and eliminate general variation in the process caused by people. For this to make sense, we’ll have to open up the discussion to the lean roots that are deep in the Toyota Production System and Deming’s Profound Knowledge (14 Management Points).

In the end, it is the people who execute. We gather data to define new systems and at times overlook the people involved. Somehow we think the “people stuff” comes with the package and then, after the project is done, we wonder why things didn’t end up exactly the way we wanted them to; the results weren’t quite as good as we thought they were going to be.

Now I hear some of you protesting: “That may be happening at other companies, but not mine.” And you may be right, if you purposefully direct your attention to the issues affecting the people in the processes that you are trying to reduce variation in, and then you intentionally design in the actions required to achieve and sustain them.

We often say that the people are the most important assets – but are they treated that way? Do our actions match our words? What is the first thing your organization does when something goes wrong? Is “blame” the reaction? If it is, then you are building people variation into the process. When you are value stream mapping, how accurate are the results? Is there some holding back of information? Are there some topics that are taboo? Is your organization “trusting”?

There’s a good book out by Stephen Covey called “The Speed of Trust.” In it, the author makes the point that when trust is present, the speed of accomplishment increases and the cost to get it done goes down. He further makes the point that when you have trust, there is a factor that acts as a dividend and gives results higher than you expected. The reverse also applies and the results are often much less than what you expected to get “just doing the math.”

To limit people variation, start by looking at the culture of your company and establish trusting partnerships between the teams running your operations. By the way, the best way to limit people variation is not through mandating the movements and activities of people within a narrowly defined set of operating parameters.

The way to accomplish the most through the man-machine interface is to allow the freedom to continually discover new ways to accomplish results faster, better, cheaper … then to teach the whole organization, lifting it to a higher level of performance, and then keeping the improvement cycle going.

Standardization is not “my way or the high way” or requiring people to be mind-numb robots. People have to see demonstrated value in conforming to a new way of doing something; they need leaders they can trust to help them get what they need.

Most organizations are far from being maxed out on value-adding activities, and yet why do the folks who work there think that they are overworked? And, by the way, the statistics are probably on their side. How much overtime do you have? How many meetings do you have? How often do you execute the plan on-schedule and with the results expected?

Those who consider themselves management have to determine if they are leading in a way that is so unstable that people never can get stable enough to improve. Those who are not management have to determine if they are acting in a way that stabilizes their piece of the world.

There are no silver bullets here – just old-fashioned hard work and doing value-adding work while paying attention to the people directly involved. The soft skills are always the hardest to master and yet get the biggest results. Committed and competent employees will get consistent results when they aren’t focused on emergencies and instead are focused on planned activities that are value added.

Being flexible and nimble in this tough economic climate is essential. It’s important that speed and quality of decision making and execution aren’t compromised. Here are a few key points that reflect lean thinking with people variation in mind:

• Have a long-term philosophy toward those you work with and manage; ensure they are well connected to the voice of the customer.

• Implement processes that reflect the importance of people and provide solid direction for their decisions. Process determines output.

• Develop people in key areas of business need. Cultivate partnerships within the organization and with those key suppliers with whom you have a shared interest and are equally vested in success.

• Encourage people to be vigilant to find and fix problems rapidly.

Many companies are discovering that there are disconnects between their people and their executive leadership. For example, one study showed that people are much more aligned with their immediate supervisor than they are with the overall company objective and leaders.

Maybe this is common sense, but isn’t the desired behavior to first support the whole company and then to establish how each individual supports that mission? An employee survey could help identify what barriers are in place culturally that impede the progress toward a high-performance environment. Deming put it this way: “Profound knowledge comes from the outside, and by invitation. A system cannot know itself.”

In the search for answers to the question of inconsistent performance of people and organizations, we can also go back to Deming: “The most important things cannot be measured.” This quote couldn’t be more appropriate than in this discussion. The system of Profound Knowledge has four parts, all of which revolve around people and the potential for variation:

• Appreciation of a system: understanding the overall processes involving suppliers, producers and customers (or recipients) of goods and services

• Knowledge of variation: the range and causes of variation in quality, and use of statistical sampling in measurements

• Theory of knowledge: the concepts explaining knowledge and the limits of what can be known

• Knowledge of psychology: concepts of human nature

Whatever your culture, you will get the results (people variation) the system delivers (good or bad) and not necessarily what is desired or expected. People variation, just as in process variation, requires data and root cause analysis to discover solutions and increase process conformity. If you want to address people variation, “There is no substitute for knowledge” (W. Edwards Deming), and you have to go look for the truth.

At a minimum, there must be an effective Performance Management Plan (PMP) that serves to align activities against business vision and strategy. James Womack and Daniel Jones report in “Lean Thinking” several reasons why people perform best when they feel good about what they are doing:

• There are clear objectives

• Concentration is so intense that there is no attention left over

• There is clear and immediate feedback on progress toward the objective

• There is a sense of challenge where skills are adequate, but just adequate, to cope with the task at hand

For people to perform at high levels as participants and as team members, they must have clear objectives and good information. In lean terms, they eliminate waste and increase “flow”. How do we make people less dependable than they could be (variation)? Let’s consider the eight wastes/muda (with people emphasis) and flow (taken from “The Toyota Way”):

In their book, “Toyota Culture”, Jeffrey Liker and Michael Hoseus recognize that variation is always present and, most generally, people are more variable than machines. They assert that all activities and decisions should be driven by company philosophy and principles.

Then people variation can be addressed in a blame-free, problem-solving manner. This will create a clear and consistent message that will help to limit people variation and provide consistent results. Margaret J. Wheatley put it this way: “Enumerate a few basic principles and then permit great amounts of autonomy. People support what they create.” Here are a few ways to limit variation:

• Have engaged leadership that is on the floor articulating the voice of the customer and encouraging people by providing support and resources

• Create a passion for success

• Eliminate blame (not discipline); drive out fear and entitlement

• Add value to the organization by developing people through knowledge and skills

• Foster collaboration inside and outside the organization

• Continuously solve root problems and reinforce positive behaviors

It’s good to look at tools to help us solve problems. It’s better if we have a firm and stable foundation on which to use the lean tools. It’s best if we invest the effort in philosophy and culture that support those tools to obtain reliability and operational excellence that puts us with the best of the best.

About the author:
As an operational excellence subject matter expert for Life Cycle Engineering (LCE), Chuck Nickerson helps clients achieve their technical, financial and culture-based goals. Chuck works directly with client sites in the areas of operational excellence education, assessment and implementation. Prior to working with LCE, Chuck’s recent experience focused on project management of manufacturing and information systems initiatives including the implementation of a company-wide (global) ERP/MES project. In addition to his role as subject matter expert, Chuck also leads LCE’s Operational Excellence Community of Practice. Chuck can be reached at cnickerson@LCE.com.