Re-Think Organizational Learning – The Unexpected Result

Ric Merrifield recently published Re-Think: A Business Manifesto for Cutting Costs and Innovation that introduces new ways to “see” the business and overcome the “How Trap”. What? Read the book. Ric does a good job of walking you through it in a non-technical way.

Unexpected Results. I was fortunate to work with Dennis Stevens, an early collaborator with Ric on this approach, on a major engagement using the Re-Think approach. Sure, we improved efficiency and customer satisfaction, but the company recognized something more, something not expected.

“It has also helped make the approach basic enough to be understood and applied by employees at every level of the company.” You will find this little tid bit buried in the introduction. Wow. Imagine everyone, from executives to performers to administrators, seeing the business essentially the same way. What is most important, what needs to be done better, what needs to be done more efficiently? Then, how can I help? Here are a few comments to illustrate the benefit.

“We don’t need to work on that.” A line manager and IT manager were discussing a list of 22 IT requests. After Re-Thinking his area, they agreed that only three of these requests would really help his department’s performance. And these were not the three at the top of his list before the Re-Think. Focus and prioritization is a great benefit. Imagine how much money, time and wasted effort could be saved with this understanding and clarity of purpose across the organization. What if everyone could work on the three important things and not waste time on the 19 much less important things?

“We agree, these are the top three areas to focus on.” The executives agreed with the results of the initial high-level Re-Think. The mandate was to “Improve Customer Satisfaction”. The expectation was to do something different, not just work harder at the same things. Where do you start to implement a vague strategy like this? This initial high level Re-Think involved directors, senior managers and customers who came to a focused consensus on these three areas. This foundation ensured that the few managers responsible for these areas could count on support from the others.

“These are great requirements.” One IT manager appreciated the clear, focused business requirements. Following the high-level Re-Think, a more detailed Re-Think was performed in the specific areas. A major benefit of Re-Thinking activities in terms of purpose and outcome are the ability to communicate with the technology group. They have to think in these terms. Additionally, the Heat Maps provide a visual tool to facilitate conversations, see how activities connect, and reveal opportunities to apply new technologies.

“We are talking more about improving the business and less about blame.” The sponsoring executive mentioned this unexpected result of the Re-Think engagement. Re-Thinking clarifies what we are doing in terms of purpose so conversations don’t get bogged down in misunderstandings. After a Re-Think, we have a greater foundation of understanding and we can talk about more important things. A business manager can talk to an IT analyst in terms of what we want to do without either having to be technical experts in each other’s area. Same with managers in different areas. And since they agree what activities are most valuable and in need of attention, and they see how the different activities work together, they can focus on performance.

Re-Thinking helped everyone learn about their business and how their work contributed to the bigger picture. With that understanding, they can do their jobs better.

LEAN is More Than Cost Cutting

I read a recent article in the Wall Street Journal recently, Latest Starbucks Buzzword: “Lean” Japanese Techniques.

Why did Starbucks start on a Lean initiative? Cost cutting! Sales down, profits down, growth down. Cost control was necessary. This is a business after all. Lean provides proven techniques to significantly improve efficiency and reduce costs. The article describes some of the efficiency improvements. And “Cost cutting helped Starbucks produce better than expected profits.” Success!

The article focuses on streamlining processes and the financial results. Which is great. It is what most executives see on financial statements. LEAN is more than cost cutting. There were other benefits as well – perhaps even more important benefits because they will drive long lasting results. If you read the article carefully, you will see them. I’ll point out a few that interested me.

“Motion and work are two different things.” I like that phrase from the article. Many of the techniques, like the spaghetti chart, help people see the wasted motion. That’s important. To see the waste. Not just the managers but the performers. Engaging the performers and teaching them to be problem solvers helps develop exceptional people. Improving productivity one time today is good. Teaching people to improve a little bit day after day is the real lesson.

“Now, baristas … grind beans for each batch.” Wouldn’t it be better to grind it all at once at the beginning of the day, or week Or buy it already ground? Not if your value proposition is high quality coffee and ambiance. Grind it fresh. Let your customers smell the coffee aroma, hear the grinding, taste the freshest coffee. Besides, it costs less. This also illustrates one of the counter-intuitive aspects of Lean. Bigger batches mean more waste and higher cost, not efficiency. Baristas have to grind, pack, store, then find the coffee if they do it each morning. This is wasted motion that Lean eliminates. So Starbucks gets some productivity benefit. They also get happier customers which is more important.

Customer satisfaction scores increased significantly, at least at one of the stores in the article. I expect it will increase at many others too. If you are not spending time on wasted motion, you have more time for your customers. And they get their coffee faster and fresher. If you can do it faster and better, customer satisfaction follows. And you get the benefit of lower costs and productivity.

Cost cutting and productivity are great benefits of LEAN. They are the sizzle that sells. You can delight your customers and employees as well as the accountants. This soft stuff, the people stuff, is what makes LEAN truly LEAN.