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Are You Qualified to Drive the Boat?

Randy Nelson, author of The Second Decision, is a speaker, a coach, a Qualified Entrepreneur, and a former nuclear submarine officer in the U.S. Navy. He co-founded and later sold two market-leading, Randy Nelsonmultimillion dollar companies–Orion International and NSTAR Global Services. Randy now runs Gold Dolphins LLC, a coaching and mentoring firm to help entrepreneurial leaders and CEOs become Qualified Entrepreneurs and achieve their maximum potential.

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Have you played Mouse Trap?

You talk about the different numbers of simulations you have, and one of them is the Mouse Trap game, which is probably one of your more popular ones I would think. Can you briefly describe it? I know it’s on your website, and someone can read about it, but just tell me what it is and what’s the benefit from an instructional standpoint to go through it? -jd

Jamie:  Sure. Well, the Mouse Trap experience, it is one of our more popular simulations. It’s based on the long-standing board game Mouse Trap. So we leverage this three-dimensional contraption that makes Mouse Trap what it is as a platform for experimentation, and the way we run it, it’s nice and short. It’s about 90 minutes, and it’s not a manufacturing process. It’s not a business process. It’s a board game. So the folks that sit in manufacturing simulation and say, well I am in the business process, and so that doesn’t apply to me and vice versa. Well, this is Mouse Trap. So it doesn’t apply to anybody so get over it and just focus on the learning.

It’s pretty easy to immerse yourself in, but the idea is we run people through a process where we get to some…without getting into any tools, some basic fundamentals of improvement: the idea, like understanding current state first, the idea of small step experimentation, changing one thing at a time, standardization, and the ability to structure the work.

These are some basic fundamentals that regardless of what tools you have, apply for continuous improvement, and so we basically try to weave some of those fundamentals into a short, high energy, fun learning process that applies…we’ve had it with doctors and brain surgeons and engineers and high school students.

So, all sorts of different folks because again, it’s based on the board game Mouse Trap, so the learning can apply to anybody.

Related Podcast and Transcription: Lean Training Tips

Jamie Flinchbaugh is a co-founder and partner of the Lean Learning Center in Novi, Mich., and brings successful and varied experiences of lean transformation as a leader, practitioner and facilitator. Under Jamie’s leadership, the Lean Learning Center has become one of the most recognized and premiere lean providers in the world.

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Starting a Collaborative In Any Field

  If someone was looking at starting a collaborative in any field, Healthcare, Manufacturing, could  you give them a little of advice on where they might go or how they would start. -jd

Dean Bliss:      I wasn’t part of the beginning of the Iowa Healthcare Collaborative, so I can talk about the Lean Consortium a little that we did start several years ago, and one of the things that we got together and kind of had a “what should this be” session where we rounded up a bunch of the people we knew and had a consultant come in and help us conduct a session. So really, it’s kind of a 3P in a way because we were looking at “Well, what should we do and how should we structure it, and what kind of things should we offer?” and all those kind of things and we wanted to do that in advance and not just say “Let’s have a consortium. Let’s all get together and do some stuff.” collaboration

Well, let’s figure out what that stuff is. Let’s figure out what the value is. Let’s figure out what it would mean to be a member, what are the things if I was a member I would expect, what are the things that we can provide that are going to give value to those members? How are we going to deliver it? You know, what are the delivery methods? Is it live? Is it online? Is it podcast? Is it webcast? All those kind of things we wanted to work out in advance before we started taking people’s money essentially because we wanted to make sure that we were going to give something with value.

Again, back to our Lean thinking days; it all starts from value. From there, we said, “All right, should we be a single industry thing? Should we be a multi-industry thing? Is this something that beginners can be part of as well as experienced people can be part of?” We were really kind of setting the framework for what we wanted to be.

Around the country I know, there’re manufacturing-only ones, and there’re multi-industry ones and it really kind of depends on what their area is and what is available in their area. Make sure people don’t have to travel too far to get there, those kinds of things. So all those things were factors as we put the Lean Consortium together, really trying to understand how it’s going to be used, how it’s going to be deployed and what are the things that people are going to get out of it?

Related Podcast and Transcription: A Blissful Conversation

Dean Bliss is a Lean Healthcare Coach for the Iowa Healthcare Collaborative (IHC). He assists Healthcare organizations in learning and applying continuous improvement activities and philosophy.

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What is Peter Drucker’s Legacy?

The Business Development Director of the Drucker Institute, Peter Gondolfo, joins me next week on the podcast to discuss Peter Drucker and the future of the institute. I think you will be quite surprised at how Peter Drucker’s Legacy is evolving.

An excerpt from the podcast:

To give you a little bit of background about the Drucker Institute, in 2006, following the 2005 passing of Peter Drucker, more than a hundred Drucker-like thinkers gathered in Claremont and they wanted to answer the question, ‘What is Peter Drucker’s legacy?’ In the end, they decided that it is a collection of ideas and ideals that should be acted upon for future generations of leaders responsible for companies and communities in which we work and live. And as a result of that, the Drucker family and the board of the Drucker archives decided that the best way to keep his legacy alive was not simply to look backward, referring to his writing and books, but to look forward by building on his wisdom and applying it to important contemporary issues.

Joe: Did Peter Drucker have a vision on how his legacy was going to play out or anything? Did he ever lay any groundwork for that?

Peter:    He helped create the archives, and he was intentional in that creating them, he did not set aside any financial resources for us. He believed strongly that if this was going to survive, it wasn’t going to be just be based on him setting up some legacy project that would pay homage to him. He gave them access to the intellectual property let’s say for using consulting services and working with different organizations. As he would like to say, he wanted the organization to fight for its like, just like any business or idea that his clients were working on.

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How to Think Simple

Is there a way that I can get started and gear myself towards thinking that way and trying to simplify things? – jd

Don Sull: Absolutely, I mean my advice would be to try it. I’ll just give you a concrete example. I’ve used simple rules many times in my life but I’ll give you a concrete example. About a year and a half ago I ordered a bunch of shirts and they were the same size as the shirts I had always worn and I get them and I’m a cheapskate so I ordered a lot of them because they were cheaper if you ordered a lot. And, I get them and they’re all too tight. I’m like “Oh, this is terrible.” I tried to send it back, they wouldn’t accept them back. I had a very concrete problem which is I wanted to fit inside these shirts. To do so, I need to lose about 15 pounds. The first step is to have clarity on the objectives. On that case, it’s pretty straight forward. I wanted to lose about 15 pounds.

The second step is identify a bottleneck, a critical activity or decision that keeps you from hitting that objective. So, in this case, the way I did it was for about a week I got an app on my iPhone. I got an app and I tracked how much I exercised and how much I ate and when I ate it. You know, it’s trivial now. Ten years ago it might have been a pain in the neck to do that. Today it’s trivial. There’re probably a dozen apps to help you do that. What I found was interesting because what I wanted to find was, should I focus on exercise, should I focus on how often I walk, should I focus on eating, what should I do? Complicated Problems

What I found was the following, exercise was okay. I was exercising, reasonably enough, probably didn’t have time to do much more. Eating during the day was okay. The real problem was after dinner, snacking after dinner and that’s when all hell broke loose. Basically discovered once I collected data for a week that I was eating the equivalent of a lunch or two every day after dinner in snacks. I said “Okay, great. My bottleneck wasn’t all these activities, it wasn’t exercise, it wasn’t even eating, it was after dinner snacking.” That’s a nice specific bottleneck and that allows you to develop concrete rules. Then, you go to the third step. You’ve clarified the objective, lose 15 pounds. You’ve identified the bottleneck, specific bottleneck, after dinner snacking. You develop the rules. And, here again, we come to this point, there’s not, you don’t take the rules off the shelf, you don’t read, you know, some book that says ‘this is the right diet’, instead you follow a process of, you know, talk to some people, look on the internet a little bit, play around with it and the rules are your rules. You develop them and they’re appropriate to your situation.

In my case, my rules were, well, initially I said, “I’m never going to eat dessert again.” Well, that’s not going to work. I came and said, “I’ll only eat desserts on the weekend.” Another one was I read some research done by a guy named Brian Wansink who has done a lot of work on portion control and what he finds is that if you eat snacks out of a bowl rather than out of a bag, you can cut your calorie consumption by half or more. So, I said, “Okay, I’ll eat snack, I’ll eat the chips out of a bag, sorry, out of a bowl rather than the bag.” Another rule is not to stockpile snacks. If you buy a case of Snicker bars, you’ll eat all the Snicker bars. If you buy one Snicker bar, you can only eat one unless you got out to the store again. Very simple rules from multiple sources but they were right for me and, you know, in that case it worked. I lost 15 pounds, so. It took me a couple of months but I did it.

Related Podcast and Transcription: Creating Simple Rules to Handle Complexity

Dr. Donald Sull  is a Senior Lecturer in the Technological Innovation, Entrepreneurship, and Strategic Management group at the MIT Sloan School of Management, where he teaches courses on Competitive Strategy and Strategy Execution in Volatile Markets. His recent book, Simple Rules: How to Thrive in a Complex World offers some great thoughts on reducing complexity.

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How do you Introduce Job Instructions?

 I want to jump back to TWI and dig a little deeper. You had mentioned to me that Job Relations is really two programs instead of just one. What are they and how is Job Relations introduced in your thinking? – jd

Mark Warren:      If you take the original Job Relations pocket card and they had pocket cards for each one of the programs so you could follow them, it’s kind of an outline, on one side you have basically problem solving. So what do you do when you have a major people problem? Well, step one, you go get the facts. On the other side you have, what do you do — it’s more of a proactive side, what do you do to kind of minimize having people problems? And if we put this into context, this program was actually created in Harvard University, so they used case studies. The trap we have gotten into in following this traditional piece is we just approach it and use all of our examples of management disasters, where somebody has really overstepped their bounds and the supervisor has just been a terrible boss. And so we go about well, we think about the steps that he went through, and what did he do, and why did he do it, and maybe it’s not the right way to behave, but if you really look at it, this problem solving is a very generic sort of tool and it’s almost the scientific method of just go get the facts, wait in the side, think of multiple solutions, and you also try to think ahead and maybe what will happen if I do this. Job Instruction

We’re trying to get people to think strategically as well and this is one of the things in the integrated program that we begin to put together is originally the first two groups that we worked with, we did the traditional Job Instruction, then Job Relations, then Job Methods. So when we got to the Job Relations point, we asked the group to define a generic problem and of course everybody tries to come up with the largest, most difficult problem they have that’s kind of ‘save the world from world hunger’ kind of thing. But when we begin to peel it back, we find there’re lots of little details and as we use basically the 5 Whys and actually validate the answers, we use a process called FOG- fact, opinion, or guess. We assume that every first answer isn’t just a guess; at best, it’s an opinion, so we try to push people to go get facts. Once we begin to get the facts, then we ask better questions for the next level and almost everyone of the examples people brought is being added to you in people problems turned out to either be Job Instruction where one, we hadn’t taught the people well or two, we hadn’t communicated our expectations well – now, that’s sad. Or on the Job Methods or process side, we had really lousy processes, and we were still expecting people to make daily production. And that’s why the people have kind of an attitude. It’s more we’re the management, we’re holding the steering wheel, and yet we’re not really doing our job well.

On the proactive side, what we find is it talks about respecting people. I mean this is where the respect for people came from was from the proactive side of the Job Relations program. What we began to found is we looked at it and also with an internal program that TWI had – Follow-Through and later renamed Follow-Up, this was the critical coaching piece that the manager needs to do and during the managing of the coaching session, you actually begin to build a personal relationship, managers to supervisors, and if you can do this between managers Mark warrenand supervisors, the supervisors have a pattern that they can do with their behaviors between them and the workers. Part of it was we set up the expectations – it’s kind of a joint coaching operation.

Mark Warren, of Tesla2 Inc. has decades years of experience working with Tier 1 and 2 suppliers to improve their manufacturing productivity and quality. He travels the world to learn and teach about Lean and most specifically TWI.

Related Podcasts and Transcription: Implementing TWI into Daily Routines

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Losing 1M a Day, Improve Your Process

Joe: I don’t think a lot of people realize the trouble that Caterpillar was in the early 1980s. I would think that time period is correct. They were losing a million dollars a day or something?

Craig Bouchard: A million dollars a day for three years and in that third year which was 1984 where they lost a $150 million. That was the year that Schaefer said, “We’re turning the place around. We’re turning to start, in fact, to compete with the Japanese, Komatsu, etc.” They entered the first of the six big decisions which was the plant for the future. Schaefer committed $1.8 billion dollars to upgrade 37 of their main plants and make them the most modern plants in the world. They did that after losing a million dollars a day. Imagine that decision at that time, which is staggering – nobody could believe it – Wall St, the New York Times, everybody called it their last stab at avoiding bankruptcy to make such a big change. It was a survival decision by the estimate of most people at that time. As it turned out, it set the stage for successful Six Sigma, Lean set of programs for the company over the coming years.

Joe: I think there’s a lot to be said about that. There’s a whole chapter on Lean and Six Sigma in the book and, of course, my listeners are familiar with this. So is that an important part of the Caterpillar story?

Craig: It’s a huge part. It’s one of the six major decisions, and it’s probably the biggest one in its definite scope. So in the year 2000, Glen Barton had taken over as Chief Executive Officer and him on the board, and he called and described in the book – fascinating interviews backing all these material and some consulting with – so he called all the senior executives around the world into the auditorium in Peoria. They did some planning all day long; they had all kinds of things going on. Barton was scheduled to appear at the end of the day, late in the day. Everybody’s going, “Where the heck is Barton?” At that time, everybody at Caterpillar wore suits – they were sitting there in ties and the suits whole day – imagine that being said. Towards the end of the afternoon, everybody started to check their cellphones for text and messages – back in 2000 that was a new innovation basically – and a gong sounds in the auditorium and they all jumped up.

Here comes Barton in a black-belt karate uniform with four people behind him and people were astounded. Barton basically said, “Look, we’re here today for a very important reason. We’re going to change the company, and you’re all going to help with it.” He then explained that something that was true, there is$20 billion dollar revenue sphering that exists out there, so it’s like a legendary elephant graveyard of a library. A lot of companies have hit that level of revenue, people that have successfully reached $20 billion; it’s very hard to scale and grow beyond that because you’re doing big that you start to screw up a lot of things. Barton had realized that there’s one key cost that’s rising dramatically in the equipment out in the field, and that was a big red flag for him and he was smart enough to get it. He said, “We’ve have a quality problem and secondly, we stagnated. Our revenue has been consistent about $20 billion dollars for three-year, we’ve hit the ceiling and we got to fix that. I’m here today to give you your objectives as a company.” He got a lot of attention because of this, of course. He said, “We’re going to grow $20 billion of revenue to $30 billion of revenue in the next five years.” That caught everybody’s attention. And then he said, “While you’re doing it, we’re going take a billion dollars of expense out of our cost phase. So we are going to grow at that amount, and we’re going to take a 10% of a billion dollars out of our operating expense. And finally, you’re going to be accretive – the cost of this program that you’re going to enter into, which is Six Sigma, we’re going to pay in revenue-enhancement in cost reduction” and everybody is wondering “What the hell is accretive”. He said, “Here’s what it means; we’re going to revenue increase this year and cost reduction this year; we’re going to pay for this program. We’re paying for it ourselves in the first year.”

Barton set out that very aggressive schedule, he’s walking around the room with hundreds of people in the auditorium going up to the ceiling, and he could see faces going “Ngggnh, I have heard about this Six Sigma, I heard about this; G.E. and 3M did it recently. Sounds good, those other guys can do it.” You could see it in their faces. And so Barton said, “I can see it. The train is leaving the station; you’re all going to be on this train, or you’re going elsewhere. And right now we’re going to start and have every person in this room walk down the stage, look him in the eye, shake my hand and promise him to fully support the Six Sigma program. Every single person and that’s how they started. They took 750 of the top employees of the company out of their jobs in the next 30 days and put them in black-belt training and if that wasn’t enough, think about that investment – 750 of your best people out of their jobs, in their black-belt training full-time. Then they took 3,500 people and put them into green-belt training to support these 750 guys. In the next two years, then they did what they called ‘The Tsunami Change’ inside CAT. G.E and 3M are two great examples of big companies who’re successful in Six Sigma. They rolled it out division by division across the globe – it took them years investing in Six Sigma. And he said, “We’re all going to do this year.” Nobody believed that. And he had his 750 people right away, and he had 3,500 to support them. By the time, the program was two years in, he had 30,000 employees involved in Six Sigma program. Never before and never again has anyone committed that many resources in that period of time.

They made their $10 billion in revenue one year early, four years later. They got their billion dollar cost reduction and they shattered the $20 billion dollar ivory elephant graveyard ceiling, went on to $40 billion, went on to $50 billion, and they went on to $60 billion in recent years, and in the next couple of years it’ll go over $70 billion. Glen Barton gets a lot of credit, and that’s the commitment it took the tsunami of change that made it all happened otherwise people may have lost interest and that all happened in that first year.

Craig Bouchard, author of the book, The Caterpillar Way: Lessons in Leadership, Growth, and Shareholder Value, discussed how CAT got it right in a Business901 podcast

Related Podcast and Transcription: How Cat Got it Right

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