Business Transformation 101

Thirty weeks and 29 articles/podcasts ago I started this series on LinkedIn. The objective of the weekly series was to provide you with ideas, thoughts, best practices, and real-world examples of transformational actions that will help you achieve meaningful improvements and take your business to the next level. These actions were intended to be building blocks to utilize to construct a unique, holistic business system that would support the culture you and your team were working to create and fit the vision and strategy of your business. Alternately, the building blocks could be used to make incremental improvements to your existing business and strategy.Hopefully you found useful, actionable information from many, if not all of the podcasts in the series. Ultimately, effective Business Transformation comes down to Leadership by you and your team. It is incumbent upon you and your team to establish the culture and strategy of the business. Ensure your team has the right players and appropriate tools to execute the strategy and produce results. The Leadership team needs to "walk the talk" and lead the transformation by their actions.

Total Productive Maintenance or TPM is a process designed to maximize the effectiveness of the company's equipment through its entire life-cycle. It requires the commitment and discipline of the entire organization to be successful. Success is: zero accidents, zero unplanned failures, and zero product defects.Tom Harada, who spent 35 years with Toyota in various leadership positions, summarized the importance of TPM in an interview with Art Smalley (Art of Lean Website); “Equipment maintenance is one of the hidden strengths of Toyota but it does not get a lot of attention. However, try to run a pull system or achieve standardized work if the machine is breaking down and kicking out bad parts all day long…you won't get very far.”Implementation of TPM is built around a cross-functional team consisting of resources from production, maintenance, and engineering. This team works together to understand the products, processes, and equipment and ensure the equipment is kept in good running order.

The Production Preparation Process or 3P is the process of developing an integrated product and production system that will meet the requirements of product design quality at the necessary production volume at the target cost by the target date. Unlike kaizens which are generally aimed at improving existing processes, a 3P event is essentially starting with a clean sheet of paper and utilizing lean principles from the inception of the project. Note that 3P can also be focused on just a process or product design but is more powerful when the 3P event couples the product and process from the start.The 3P team members link the process hardware e.g., fixtures, materials, equipment, tooling, and tools to the process software e.g., material flow, information flow, standard work, and inspection, to provide an effective production system. The team incorporates lean concepts such as one-piece flow, Takt time, Poka-Yoke (mistake-proofing), Chaku-Chaku (Load-Load), auto-eject, ergonomics, quick-changeover, pull systems, TPM (Total Productive Maintenance), and avoidance of monuments. 3P can provide a sustainable, competitive advantage through a differentiated product design coupled with a differentiated production process. While competitors can buy a product and reverse engineer it to close a differentiation gap, it is much more difficult to reverse engineer the process that produced the product since it is hidden away in the company's facility and production processes.The 3P process should be used when:● A new product is being developed● An existing product is undergoing a significant re-design● There is a significant uptick in demand● A new plant is being built● There are significant barriers in the existing product process that are limiting the company's ability to meet customer demand effectively and profitably● There is a need to create additional space in a facilityThe 3P process should address Safety, Quality, Delivery (lead time intro to market date as well as lead time for serial production delivery to customers), Cost (product expense, capex, and working capital), and Growth.

Structure, organization, and discipline are important characteristics to operate any business successfully. The 5S methodology is about having a designated place for every necessary item and ensuring that each item is in its proper place. It is about being organized. This approach ensures that the work-space is conducive to effectiveness and efficiency.A good 5S environment will:● Improve Safety by reducing OSHA recordable incidents and injuries● Improve Quality by eliminating defects due to the use of improper tools or non-compliant materials and eliminating FOD (Foreign Object Debris) or contamination● Improve Delivery by improving Safety and Quality and eliminating the need to look for the appropriate tools or materials● Improve Cost by improving Safety and Quality while also improving productivity of operators through the elimination of searching for tools or materials and improving machine up-time through periodic inspection, maintenance, and cleaning.While 5S can be applied as a stand-alone tool, its real power is as part of all the lean tools e.g., standard work, SMED, Kanban, TPM, 3P, etc. Being organized is a key part of all the lean tools.

When a business implements lean processes and is traveling on a successful journey of endless, continuous improvement, the culture and approach to business is completely transformed. To truly achieve success in a lean transformation, the business also needs to transform how it measures the financial performance of the business. This is necessary since traditional standard-cost accounting does not provide the “right” information in a timely fashion to operate the business in a lean environment and can obscure the improvements made by a lean implementation. The accounting must be aligned with the lean processes. This “new” approach to measure financial performance in a lean business is called “Lean Accounting” and is often described as plain English accounting.In general, lean accounting is not widely understood and deployed when lean processes are implemented in manufacturing and the transactional areas of a business. Transforming a business from traditional standard-cost accounting to lean accounting is a significant task that should be done in parallel with the operational transformation. There will likely be strong push-back from the auditors and financial organization due to the significant change in the accounting approach. The resistance to change in accounting processes is no different than the resistance that was undoubtedly present in the manufacturing organization when lean forced a change from the traditional batch and queue system to a one-piece flow system.This podcast will provide a high-level comparison between traditional and lean accounting to provide some insight on the rationale for making this transformation. To get more detailed insight, explore the references listed at the end of the LinkedIn article on this topic at https://www.linkedin.com/posts/williamfejes_leadership-continuousimprovement-leantransformation-activity-6798073967950348288-ABg6.

Long-Term Planning was the topic in Episode 9 of this series and discussed the three components that make up an effective Long-Term or Strategic Planning process: Strategy Creation, Strategic Planning, and Strategy Execution or Strategy Deployment. These are difficult, complex processes to implement effectively and have a significant impact on the long-term success of the business. This podcast highlights some of the potential pitfalls that teams can fall into while creating and deploying strategic plans. Hopefully, your team can learn from the experiences summarized in this podcast and avoid some, if not all these pitfalls when developing and implementing your strategic plan.

In many businesses, machine changeover times can have a significant unfavorable impact on productivity. It is not unusual to find machines that can take up to a full 8-hour shift to change from producing one product to producing the next product. Long changeover times lead to several of the wastes listed in Volume 16 of this series, A Primer on Lean. Specifically, these long times contribute to excess inventory, waiting, overproduction, and defects.The SMED (Single-Minute Exchange of Dies) process is designed to reduce changeover time. The focus is to move internal set-up (set-up that occurs while the machine is stopped) to external set-up (set-up that can occur while the machine is running) and eliminate transportation, motion, waiting, and defects. Changeover time is defined as the time it takes to go from the last good part produced prior to changeover to the first good part after the changeover is completed.

As noted in podcast 16 of this series, A Primer on Lean, 80/20 analysis refers to the Pareto Principle and is used to determine the significant few items that drive outcomes. The 80/20 name arises from the fact that for many outcomes 80% of the results are produced by 20% of the inputs. For example, in many businesses 20% of the products sold account for 80% of the profit. This tool is used by the team to simplify the business, remove complexity and variance, and identify the best improvement opportunities.The Pareto Principle was developed in the 1897 by Italian economist Vilfredo Pareto. Pareto discovered a pattern of imbalance when analyzing the distribution of wealth and income in 19th century England. More importantly he found that this imbalance was consistent across different countries and different time periods. George Zipf in 1949 discovered that the pattern of imbalance extended beyond wealth and income distribution to a wide range of data sets. In 1951, Joseph Juran, who many consider the “father of quality management”, published his book “Juran's Quality Control Handbook” which utilized the Pareto Principle as one of its guiding principles.

Material can be moved through a process by pushing it or by pulling it. A chain provides a good, visual illustration of pull versus push. If a chain is stretched out on the ground and then pushed from one end, the links of the chain tend to pile up in a heap instead of moving smoothly forward. However, if the chain is stretched out and pulled from one end rather than pushed, the chain moves forward very easily and there is no piling up of the links. In the push case, the links piling up are analogous to inventory building up in the flow of material.

In Volume 1 of this series, we stated that to ensure the business provides consistent, sustainable, improving performance you need to deploy robust processes in all aspects of the business. We also noted that Lean applies to any process anud therefore is applicable across the business and must be deployed across the enterprise. For today's podcast, we have with us Mark DeLuzio. Mark is the founder and CEO of Lean Horizons Consulting. Mark and his team teach companies how to implement Lean through an enterprise-wide vision, to align Lean activities with the organization's breakthrough imperatives, and to design a culture for long-term success.Mark will provide his thoughts and insights on why companies fail to effectively implement a lean approach, what he has learned from studying, and in some cases, living those failures, and what leaders can do to avoid repeating the mistakes that could lead to doom their lean transformation.

The monuments mentioned in the title of this podcast are not what most people would think of when they hear the word monument. The monuments in this podcast are not the Lincoln Memorial, the Martin Luther King Jr. Memorial, the Statue of Liberty, Mount Rushmore, the Vietnam Veterans Memorial, or other similar commemorative structures. Rather the monuments discussed in this podcast are big, expensive, inflexible pieces of equipment or structures found in a process. The reason to hate, or at the very least strongly dislike these monuments, is they impede one-piece flow, flexibility, and agility. They effectively tie one-hand behind your team's back when they are attempting to make transformational improvements.

In Volume 1, we stated that to ensure the business provides consistent, sustainable, improving performance you need to deploy robust processes in all aspects of the business. We also noted that Lean applies to any process and therefore is applicable across the business and must be deployed across the enterprise. Earlier in my career, I was part of the leadership team at Pacific Scientific or PacSci that had the good fortune of learning about lean implementation when the company was acquired by Danaher. Our team had never heard of Danaher or Lean prior to the acquisition but we embraced the lean philosophy and successfully utilized it to make significant improvements in the company's performance.Today's podcast is focused on a transformational improvement made in the customer service department at PacSci. This department consisted of 18 Customer Service Representatives (CSRs), 6 Application Engineers (AEs), and a Customer Service Manager.

Standard work is a tool used to design processes which optimize the flow of material, eliminate non-value-add work, properly load the work to the operators, and create flow. It provides a structured playbook that describes in detail the way a value stream, cell, or process should operate under different levels of demand.

Once the leadership team of the business has made the commitment to embrace Lean as their philosophy and strategy for driving execution of their business strategy, they need to obtain a sensei (an experienced practitioner of Lean who has been there and done that) to teach and facilitate the beginning of the Lean journey. Note that this sensei could be a member or members of the leadership team that fit the sensei requirements.The next step for the business is to identify and map the full value streams for the portfolio of products and/or services offered. Value Stream Mapping or VSM is the tool for mapping the material flow and information flow through an entire value stream. The map covers the value stream starting at suppliers and ending with customers. It shows the total value-add time and total lead-time through the process.

The Business Transformation 101 series is built around People, Plans, and Processes. Prior podcasts in this series focused on People and Plans. The third component, Processes, focuses on the Lean Processes that are utilized to execute the business plans, both short-term and long-term, and deliver results for the customers and shareholders.This podcast provides a Primer on Lean and the philosophy of Lean. Many people think of manufacturing when the topic of Lean is brought up but Lean applies to any process and therefore should be applied across the entire enterprise. It applies in the office as well as in manufacturing. It applies to product businesses as well as service businesses – “service” can be substituted for “product” anywhere in this discussion. Ensure that the application of Lean is embraced in all aspects of the business – if there is a process lean it out, if there is not a process, create a lean one.

In 2020, the level of serious discussions going on about Diversity, Equity, and Inclusion in the US has exploded. This podcast delves into this topic with a focus on diversity in today's businesses and more specifically Diversity of business leadership teams. Change starts at the top so transforming Diversity in the leadership ranks will drive transformation down through the entire organization.

In last week's podcast, we provided an overview of New Product Blueprinting which is one potential new product development process. This week's podcast explores another potential new product development process, Rapid Innovation, with Dr. Phil Samuel of the Lean Methods Group.

In last week's podcast, we provided an overview of Product Life Cycles and a typical New Product Development or NPD process. This week we do a deeper dive on one well-designed NPD process called New Product Blueprinting. This process was developed by Dan Adams and his team at The AIM Institute.

In prior podcasts, we have discussed building a team of A-Players and turning those A-Players loose to build a solid Short-Term Annual Operating Plan and a Long-Term Strategic Plan. Executing on those plans to drive strong results will require the deployment of robust, lean processes. We will cover a vast array of lean processes in the future starting with New Product Development (NPD) processes since they are critical to achieving above market, profitable, growth.This podcastwill provide an overview of the NPD process. Note that many of the same ideas and concepts for new product development also apply to developing new services. We will use the word “product” in this podcast but feel free to substitute the word “service” to apply these processes to the development of new service offerings. We will do a deeper dive on two specific NPD process approaches, New Product Blueprinting and Rapid Innovation, in the next two podcasts.

In our podcast two weeks ago, we provided an overview of Long-Term or Strategic Planning. Last week we did a deep dive on the Strategy Creation process with Dr. Phil Samuel of the Lean Methods Group which is one of the components of Strategic Planning. This week we are going to do a deep dive on the Strategy Execution component which is implemented using the Strategy Deployment or SD process. I have successfully utilized this process over the past 20+ years in more than 15 businesses ranging in size from $20M to $450M in revenue.

In last week's podcast, we provided an overview of Long-Term or Strategic Planning and noted it was composed of two components, Strategy Creation and Strategy Execution. This week we will do a deeper dive on the Strategy Creation component with Dr. Phil Samuel of the Lean Methods Group.

This week's podcast is Long-Term Planning which typically takes the form of Strategic Planning. As we noted last week, short-term planning provides a road map for daily management and incremental improvement of the business to ensure maintaining a solid foundation. Long-term or Strategic Planning provides a path for the business to build upon the solid foundation by utilizing breakthrough thinking to drive strong, profitable growth.

For the past seven weeks, we have discussed people and building talent in your business. Now that a great team of A-Players has been assembled, it is time to transform the business. The team's first task is to develop plans, both short-term and long-term, to align the organization to a common direction and set expectations on performance. It is impossible for the team to hit the company goals if everyone does not know the goals.Short-term plans provide a road map for daily management and incremental improvement of the business to ensure maintaining a solid foundation. Long-term plans provide a path for the business to utilize breakthrough thinking to drive aggressive, profitable growth on top of the solid foundation. In this volume, the focus is on short-term planning. The short-term plan covers the next annual fiscal calendar period and sometimes is referred to as the Annual Operating Plan or AOP.

A new A-Player leader is starting in your organization. To ensure this leader hits the ground running and the team is highly productive immediately, I strongly recommend implementing a one-day New Leader Assimilation session within the first week of the new leader's start date. The sooner the session is held the better. This session should be part of the “On-board Candidate” step of the Talent Acquisition Process that was outlined in the Vol. 4 podcast.

You have done all the right things in your talent acquisition process and you have built a great team of A-Players. Now you must protect that investment and ensure the A-Players stay on board.What are the key retention factors that A-Players consider when determining whether to stay or move on? There has been a great deal of research done on this subject. I would recommend reviewing this topic with your team and your HR professionals to determine your specific approach to retaining your A-Players.

In prior postings, we discussed what makes an A-Player, how to interview for A-Players, and creating a robust talent acquisition process. For today's podcast, we have with us Dr. Patrick Hopp who is a Partner with Leadership Development Worldwide, LLC.Patrick will provide his thoughts and insights on talent acquisition including:• Key elements necessary to identify and hire A-Players• Key things to avoid in your hiring processes• Pros and Cons of testing utilizing Predictive Index, Myers-Briggs, Wonderlic, etc.

Interviewing, as we discussed in Vol. 3, is just one part of the Talent Acquisition Process. In this podcast, we will discuss a comprehensive process that can be used to ensure getting A-Players on board in an efficient and timely manner. Remember, robust processes provide sustainable, consistent performance.

In this podcast, we will discuss How to hire A-Players. While the prior post focused on the People aspect of Talent, this post will focus on the Process aspect of Talent. As noted in the Vol. 1 posting, we need to deploy processes in all aspects of the business to ensure sustainable and improving performance. A robust interviewing process will ensure hiring A-Players.

How do we ensure we are building a winning team? Are we getting the right people on the bus and the wrong people off the bus? As noted in the Volume 1 podcast, people are the key to a successful business.We want A-Players on our team so our first task is to define what constitutes an A-Player and then communicate this definition to your team. A-Players exhibit a set of required “hard” side traits i.e. performance attributes as well as a set of required “soft” side traits i.e. behavioral attributes. If the candidate for the position does not fit the required traits for both sides, they will not be the A-player you need in that position.

Welcome to the inaugural edition of Business Transformation 101. The objective of this weekly podcast series is to provide you with ideas, thoughts, best practices, and real-world examples of transformational actions that will help you achieve meaningful improvements and take your business to the next level. These actions represent building blocks that you can utilize to construct a unique, holistic business system that support the culture you and your team are working to create and fits the vision and strategy of your business. Alternately, use these building blocks to make incremental improvements to your existing business and strategy.