Seven Effective uses of Technology in Business

This is Part 2 in a series about the role of technology in business improvement. In Part 1 we explored Five Ways to Incorrectly Use Technology.

Organizations can experience significant benefits applying technology in scenarios where:

• technology can be a catalyst for innovating around a process.
• the majority of the perceived process waste has been removed.
• the ability to improve the process without technology has reached its threshold.
• technology is better suited for poka-yoke, such as eliminating math errors or guiding complicated work flows.
• the risks of injury or danger to employees can be reduced or eliminated. Examples are un-manned military drones replacing pilots in hostile areas or using robots in automotive paint spray booths.
• the mechanical burden of maintaining the process using manual methods becomes a hindrance to productivity.
• information or collaboration needs to be shared across geographic boundaries.

photo credit: jurvetson / CC BY 2.0

Transforming Tribal Knowledge to Standard Process

Organizations lament over the risky dependence on Tribal Knowledge to run their business. Extracting the knowledge from the key individuals is not as simple as asking them to write down everything they know about a process. People holding the Keys to the Kingdom are frequently making heavy use of intuition and hard won experience that can’t be dumped to documentation immediately upon request.

A deliberate structured iterative process is needed to reveal, define, and understand the processes and criteria that people use to solve daily problems, make decisions, and manage in their specific operational areas.

Here is one generalized variation of a method to extract and structure tribal knowledge into a repeatable process complete with decision logic.

1. Following the 80/20 rule, identify and document the 20% of the process that represents 80% of the normal conditions and decisions of the typical happy path.
2. Create a visual holding place, if one doesn’t already exist, for the data (actions, issues, and decisions) associated with the process - probably in time sequence. This can be as simple as a spreadsheet.
3. The objective of the visual system is to have a wider  perspective of the norm so that the exceptions and non-standard conditions are more readily exposed for investigation and clarification.
4. Apply what I call pattern-based process improvement and creative slicing and dicing of the data to begin to fill in the missing pieces that are currently only understood by the people with the “keys to the kingdom”.

This method is best executed with participation between the mentor (process expert) and at least one other person with “outside the process” eyes to distinguish between the intuitive knowledge and explicit knowledge. The additional participants are part of the audit process to verify if the process is being standardized in a form that can be operated by other non-experts.

 

photo credit: ben.fitzgerald / CC BY 2.0

Design of Experiments for Web Analytics

After recently participating in a discussion with leading Search Engine Optimization (SEO) experts, I realized that there is an under-utilized market for using Six Sigma tools, such as Design of Experiments (DOE) to increase the value of web analytics for increasing sales, conversion rates, and Search Engine Optimization.

OFAT – One Factor at a Time

Most experts in marketing and SEO are familiar with the tactic of using A-B testing to improve traffic, goal conversion, and other website metrics. They may not realize that by using a well designed DOE, they could do multiple A-B tests simultaneously with a minimal amount of confounding while accelerating learning and results.

All Factors at Once

I found little evidence that Six Sigma tools like DOE are commonly being used in the SEO industry. One of the few examples of a case study using Six Sigma Methodology for SEO was to increase the conversion rate of song downloads from a music download website. The author was very open about the process and metrics that were used in the study. They demonstrated the use of the Six Sigma DMAIC (design, measure, analyze, improve, control) approach. From the study it appears they applied all the changes at once and measured the month end results. Applying all the proposed changes at once, while fast, sometimes provides misleading results.

For example (hypothetically), one or more of the changes could have had a negative individual effect of reducing the conversion ratio, while the net affect of all the changes could have still been positive. Reversing or adjusting the changes having a negative impact could have yielded an even higher net improvement, if they were individually quantified, which is not possible when making all the changes at once.

Multi-factorial Design of Experiments

Another option would have been to use a DOE to measure the effects of the individual factors and also interactions between the factors (proposed changes) on the results. Using the referenced study as an example, an experiment could be designed using four factors with two levels each:

Factor	+ High Level (current)	- Low Level (proposed)
Sample length of song	part of song (+)	whole song (-)
Button text	“buy now” (+)	“click here for free downloads” (-)
“downloading fees” text	displayed on website pages (+)	not displayed on website pages (-)
sales funnel process	8 steps (+)	3 steps (-)

Testing all of the 16 possible combinations (full factorial) of the factor levels would yield the most information about the individual effects and their interactions with each other. A full factorial experiment in this case is probably overkill.

Another option would be to run an 8 run fractional factorial experiment which will still provide useful insights to the individual main effects and some information on two factor interactions.

An example recipe for running the experiment follows. Each run is made one at a time, measuring the analytics results for a period of time of time under the conditions described by the run. For example, run 4 would have the following factor levels set:

• sample length of song = part of the song (represented by the + sign)
• button text = “buy now” (represented by the + sign)
• “downloading fees” text = not displayed on the web pages (represented by the – sign)
• sales funnel process = 3 steps (represented by the – sign)

Run #	Sample length of song	Button text	“downloading fees” text	sales funnel process
1	-	-	-	-
2	+	-	-	+
3	-	+	-	+
4	+	+	-	-
5	-	-	+	+
6	+	-	+	-
7	-	+	+	-
8	+	+	+	+

After completing the eight run experiment and collecting the analytic data (as recorded by analytics software, such as Google Analytics), the data would typically be analyzed with the help of JMP or MiniTab software.

The analysis should reveal the optimal combination of the factors studied to maximize the goal conversion rate. Additionally it should provide insight about which of the factors has the highest contribution to the improvement, information that can be used to hone in on additional related ideas to consider for future improvements.

In a market segment like Search Engine Optimization and website goal conversion, it is likely that the information learned from one experiment can be transferrable to other areas immediately.

Summary

Running Design of Experiments like the multifactorial one described above can provide valuable quantitative information about improvements that one can’t get otherwise, but it is not without a cost. DOE’s take time to set up, run, and analyze. They also require the use of experienced Six Sigma practitioners to effectively analyze and interpret the results.

In order to maximize the return on investment from this process, it is better suited for complex challenges where an organization might spend months making dozens to hundreds of individual changes to try to improve their results while not fully understanding the potential effect of the changes at the outset. The additional understanding gained about the contribution of individual changes and interactions can efficiently pinpoint the areas that have the most opportunity to yield the highest improvement.

photo credit: Alex E. Proimos / CC BY 2.0

Technorati Tags: SEO,Analytics,Six Sigma,Business Intelligence,Search Engine Optimization,DOE,Design of Experiments

Operational Excellence doesn’t have to be an Either-Or Decision

Six Sigma vs. Lean; Shingo Prize vs. Malcolm Baldrige

Lean, Six Sigma, and other methodologies and programs are great, but none of them solve all the problems all organizations experience. As an example, Lean doesn’t solve difficult scientific problems with complex interactions. I am a Lean practitioner and certified Six Sigma Black Belt and have used both of them to solve difficult problems, but I don’t wedge my experience with either into every situation or issue I encounter.

Possibly organizations could be better served by the technical community if instead of focusing on a single cookie cutter strategy for improvement for the entire enterprise, they used the one(s) or a blend that best matched their needs, current conditions, and vision for the future. All environments, cultures, and challenges are unique, why should we expect a “one size fits all” program to be the silver bullet?

Mocking Change

In software development mocking is a deliberate effort to simulate other system elements, such as a database, with a representation of the element in order to test a portion of the software without interacting with the actual database. Mocking is a tactic to make sure that software works as expected throughout the development process and when changes are introduced.

When facing the implementation of a big change in a business process or initiative, why not mock the elements of the change that might be complex or difficult in order to solicit as much feedback as necessary about what might go wrong or isn’t getting adequate consideration to ensure a positive experience for all the participants and stakeholders?

 

photo credit: Teddybear Junction / CC BY 2.0

Closed Data Systems Limit Learning and Improvement Opportunities

Try taking data from a process you are working to improve out of the system you normally use and look at it in other ways. If it is in a proprietary spreadsheet or reporting system that has fixed standard reports and charts, take the raw data out and put it in a clean spreadsheet or database and look at the data from other perspectives.

Slice and Dice the data:

• Filter
• Sort
• Aggregate
• Graph
• SPC chart
• Pivot

Using fixed systems, while good for standardized daily analysis routines, can close our minds to opportunities, exceptions, patterns and trends that can lead to quick improvements and unexpected systemic breakthroughs.

photo credit: brian.chu / CC BY-ND 2.0

Using Lighting Systems to Guide Standard Work

Several years ago I was working with a supplier to help them reduce the rate of defects to their customer. One of the specific defects was the parts packed on the pallet out of sequence. Their customer assembles products on a line where each product on the line is a different part number. The supplier’s objective was to pack the subassemblies on pallets in a sequence synchronized with the order their customer was building their product.

To make matters worse, each of the supplier’s customers worked in a different sequenced order when taking the components out of the pallets. Some customers took the subassemblies off the pallet in a counter-clockwise direction, others clockwise, or in a z-pattern. This made it too easy for the supplier line workers to accidentally pack the parts out of sequence. One misplaced part could cause a lot of expensive downtime to investigate and resolve.

I proposed a process at the supplier’s packing station that projected light into the correct position in the pallet to place the next subassembly (based each customer’s specifications) in the correct sequence order. It was a system similar to the one in the video - but they weren’t making mixed drinks.

Motivating Metrics

If your employees are are not motivated to stay committed to contributing to the long term execution of a strategy that promises to have significant long term benefits, maybe they are looking at the wrong metrics.

Often the charts and dashboards that are displayed or presented publically are the ones the executive wants to see, however sometimes those are final output measures or lagging indicators. Lagging indicators often don’t work well as a motivating force. We are a society that favors instant gratification so motivation to continue on a given path is more likely to be positive when looking at leading indicators. Leading indicators are measures that are generally (and hopefully statistically) a short term predictor of the end result.

 

photo attribution http://www.flickr.com/photos/emi_photoart/3434442477/ / CC BY-ND 2.0

Right-sizing the Vacuum – a Lean Machine

Floors and carpets don’t wait to get dirty until the day you vacuum. They accumulate dirt, lint, and other debris every day at a reasonably constant rate. If you ran the vacuum daily the vacuum wouldn’t need to be as powerful or have a reservoir that holds a gallon of gunk.

But who has the time to vacuum every day? If the sweeping was automated by using a device like the Roomba, daily cleaning can become a reality.

Examples of Lean can be found in the most unusual places, like cleaning machines and processes.

5S Concepts

• keep the most frequently used tools closest to the work
• keep the area clean and free of slip and trip hazards – frequent sweeping and keeping wires and trip hazards off the floor
• everything has a place – the charging station is like a shadow board

Lean Concepts

• Quick changeover – traditional vacuums tend to be heavy and take up space so they are often put away in a closet or laundry room and require dragging out and winding/unwinding of long cords; smaller size can get in tight spaces without using optional attachments or moving furniture
• right-sizing: enclosure, motor, debris reservoir, power source (battery) sized for the more frequent, but lighter workload
• poka yoke – sensors to protect from injuring pets and children, tumbling off the stairs; virtual walls to restrict the cleaning area; works in the dark; dirt sensing; auto-charging of the battery
• standardized work – Roomba follows a navigational algorithm; standard method to determine the necessity of special spot cleaning mode; some models have automatic schedulers
• no defects passed to upstream processes – special spot cleaning mode enabled immediately when excessive dirt is detected

If the floors are vacuumed/swept daily, there is no worry about dust bunnies when a friend or neighbor stops by unannounced.

As the path highlighted in the above image shows, the Roomba might not be as efficient in the travelling path as a human operator, but the important thing is that all the surfaces are effortlessly covered at an acceptable quality within the Takt time.

Automated vacuum robots are not for everyone or everywhere, but they present a compelling argument for consideration. If nothing else, it might give you an excuse to justify buying that nifty robot you’ve had your eyes on.

Automated robots are gaining in popularity for other tasks as well:

• mopping
• garage sweeping
• gutter cleaning
• lawn mowing

Additional Benefit

They can keep the family pet company while you’re away.

Where do you see other interesting or unconventional examples of Lean concepts being applied? Comments welcome.

Disclaimer: I don’t own any iRobot products or receive any financial or other benefits from them.

Photo attribution

http://www.flickr.com/photos/13963375@N00 / CC BY-SA 2.0

Teaching through Demonstration on Kitchen Nightmares

A frequent tactic for improving restaurant quality on the TV show Kitchen Nightmares is to reduce the number of items on the menu. On the Anna Vincenzo’s episode the restaurant had an overwhelming 180 items. It might seem obvious that if you simply explained that to the owner the the point would be made, but often that isn’t the case. Gordon Ramsey went to the effort of having the kitchen staff prepare just one order of each item on the menu before the owner arrived for the day. When she showed up, every table and flat surface in the restaurant was completely covered with different entrees on it. There were dishes with food from wall to wall. It became immediately apparent to her that they had too many choices on the menu to be able to do an exceptional job for every customer order. No explanation necessary.

Keys to the Kingdom? No Thank You

Who really wants the keys to the kingdom? Management often thinks the person that has them does so for the wrong reasons. That they want to hold the company hostage for selfish reasons. There are exceptions, but I generally believe they are victims of circumstance.

Why do they have the Keys in the first place?

It is not as common in processes that are widely understood. Typically it occurs in areas where one or more of the following are present:

• complicated processes
• process outputs have implications or dependencies in other areas or processes
• process is not well defined
• exception handling responses are non-existent or not well understood
• long duration between repeat occurrences of an issue
• many different issues - few obvious similarities
• minimal direct control over inputs
• lack appropriate preventative signals or controls

Sink or Swim Syndrome

One common reason a single person has all the information and control over a critical process is they were tasked with solving a complicated problem or cluster of problems in the area which required extensive research, experimentation, trials, and hard won learning.

Process Grandfathering

Some complicated processes are passed down from one person to the next via long term on-the-job training and mentoring that is time consuming and impractical to include multiple individuals.

If they are the experts, why don’t they fix the process?

The process roles people play can be generally characterized by the following:

• problem solvers
• designers
• operators
• protectors

All the roles are important to successful, repeatable processes, but might not be applied in the appropriate proportions. People often have the skills and play multiple roles, but depending on specifically which roles are in highest concentration, processes can lack the necessary detail and structure to prevent someone from having the Keys to the Kingdom.

High profile processes are frequently high profile because when a problem surfaces it has serious negative consequences that require quick resolution. The problem solvers are thrown at the problem to protect the organization. Problem solvers are valuable to the organization for their ability to root out causes and put interim corrective actions or workarounds in place. But, if the problem solvers are not also process designers, they may not have the skills or the time to put the necessary long term corrective actions, preventative process controls, and documentation in place.

How does your organization prevent Keys to the Kingdom? Thoughts?

Photo attribution: http://www.flickr.com/photos/memestate/ / CC BY-SA 2.0

Successfully Working in a Role Outside of your Expertise

In the current economic conditions (actually for the last couple of decades), organizations are trying to get more done with less resources. A common strategy is to assign additional responsibilities to their current workforce, often in a role that is unfamiliar to them. Some examples:

• Engineers acting as Project Managers
• Accountants with IT responsibilities
• Students on their first job
• [insert your occupation and extra roles here]

I once worked with a company with the mission statement of

What’s Required, What’s Expected, “And then some”

I think that is a practical sequential approach to developing an increasing understanding and proficiency in a new role. That approach has served me well in my transition through too many roles to list - while keeping stress at a manageable level. Most of the time you won’t be expected to be the Rockstar of the new role immediately, but you will likely be expected to show ongoing improvement on the road to mastery. You can effectively apply the following simple process to most objectives, roles, or projects*.

1. Gain some basic understanding of the subject matter or responsibilities through research, asking questions, observing others, benchmarking, or other methods.
2. Look for or create an opportunity you are comfortable with to incorporate some of what you learned into the daily work or activity.
3. Review what worked and didn’t and plan action steps to increase the understanding or improve on the process.
4. Wash, rinse, repeat indefinitely.

I liberally and deliberately used the word “some” in the steps above. You will maximize your learning and execution if you don’t bite off more than you can chew. Each application of a process-based approach to improvement will increase your effectiveness and confidence in making your next transition.

 

* Disclaimer: This approach may not be feasible for certain conditions where human safety could be at risk (directly or indirectly).

Information Transparency: is there a Wrong Time?

This is Part 1 of a multi-part series on transparency of information. There are probably two strong camps that would argue for or against it. I am squarely in the middle as I have found from experience there is both a right time and a wrong time for it. The first part explores the reasons why transparency can hinder productivity.

What might be some of the wrong times for transparency?

1. when first developing a process and working out the kinks
2. when the information is a poor measure of performance
3. when one doesn’t fully comprehend the implications of having the information freely available
4. when trying to “motivate” (i.e. bully) a team or person to do their job better by exposing information
5. when information can be misinterpreted

Depending on the process, you may be trying to discover which measures are good metrics to use to understand a cause and effect relationship. Many practitioners like myself will have seen occasions where the management and front-line employees alike have criticized the repeated changes in metrics as poor leadership – the “they don’t know what they are doing” syndrome. In reality, it is often best not to stick with metrics just because they were included in the original project plan or specification. If you take on an outcome based approach instead of a metric based approach, you will likely experience a more successful project or initiative overall.

Exposing information to the broadest audience too early can lead to the cancellation of a good project for political reasons or simply because the wrong data was used in the justification analysis.

Depending on the organizational culture early transparency of an evolving process can also cause a dramatic increase in resistance to change and project participation because of negative press. Or worse, if the management realizes the problem is worse than they expected, they may intervene in an unproductive way squashing a working PDCA process driven approach with a more command and control method.

Workarounds – Dreaded or Welcomed?

An associate was telling me about his friend being surprised when he referred to workarounds as waste. His friend had a positive perception of the term workaround. Why?

I can see why, for many, it could be considered positive. It is generally the last option before “impossible”, “failure”, or “no can do”. Anything better than failure is positive, at least in some light.

What image does workaround convey to me?

More than twenty four hours of consecutive problem solving under the intense pressure that tomorrow the customer will start charging $10,000/hour for downtime on their line because they are out of parts. The closer you get to the crisis the more likely you stray from looking for the solution to looking for a workaround. At 11:00am the next day that workaround looks pretty good – finally some sleep. But even with that comfort in hand you know it will be short-lived and others will have to deal with the extra effort it almost always requires to manage and operate a workaround.

Not all problems end in crisis as described above, but if you don’t think of them that way, it can limit your perception that things can be better. Workarounds are wasteful of time, money, and resources because they are either unreliable, inefficient, or unsafe. At best they should be considered temporary.

Below is the famous Rube Goldberg style Honda commercial. There’s got to be an easier way to close your trunk.

Even Subject Matter Experts don’t have all the Answers

Don’t underestimate the value of asking questions of the people that operate a process on a daily basis, even if you are a Subject Matter Expert (SME). Countless times I would go out to the factory floor and find technicians and operators violating fundamental rules while trying to keep a process running. The initial reaction is to immediately stop them. In reality, they are keeping the process running daily even while breaking widely understood industry standards and practices.

Before I set to tell them everything they are doing is wrong (I don’t really do that), I ask a lot of questions about the situation:

• what are they doing?
• why are they doing it?
• what symptoms exist at the time that “require” their action?
• are the symptoms always the same?
• how often does this happen?
• do they do the same thing every time to correct the situation?
• do the other technicians and other shifts do the same thing?
• are there other industry accepted alternatives?
• have they been made aware of alternatives and are they comfortable with them?
• does the “accepted” practice even work?
• what is the result when the “correct” process is used?

Most of the time they know what they are doing is wrong, at least on some level. Odds are they are doing it because it’s a recurring problem, and the practice keeps production going. It is all to easy for a SME or engineer to say a practice is unacceptable and walk away without working with the front line people to find an acceptable alternative that works both theoretically and under the less-than-ideal real world conditions they are working under.

Often the answers to the questions provide valuable information about the root cause of the problem they are trying to work around. See my related post about Questions Lead – Answers Follow for more information. Theory is great in the classroom, but in the real world there are many other factors that have to be considered to derive the true solution to a long standing problem. Questions are an often overlooked problem solving tool, especially when it must be administered by someone who is supposed to be “the expert”. Don’t let your expertise get in the way of your ability to effectively solve problems. With that different perspective and the help of the regular process “operators”, I have witnessed significant long-term improvements even in areas where I had no prior knowledge or expertise.

Business Improvement – Put on Your 3D Glasses

Many CIO’s from top performing organizations say their  ability to impact the success of the business hinged on their having personal experience in Operations in addition to their knowledge of Information Technology.

It is not enough to just have IT and Operations people on the team. They also need to be able to see and understand things from each other’s perspective in order to maximize each other’s strengths.

Make sure everyone has their business and technology glasses on to see the clearest path to improvement.

Project Failure - Just Set It and Forget It

Improvement projects are always at risk for project slip and subsequent failure. It is necessary to be tenacious about communication and countermeasures to prevent. One of the most dangerous times is after initial release of new tools, software, or processes. Communication and feedback are most critical here. It is often easier for people to slip back to the old way than pick up something new – even if you perceive the new way as being easier. Don’t just walk away, even if it looks like a slam dunk.

There are two ways that resistance to the new process show up:

1. Vocal communication
2. Silent death

In the case of vocal communication, make sure to pay close attention to the concerns being voiced. They may sound like complaints, but they are really the ticket to success. If you can address their legitimate concerns, people will hop on board and bring others with them.

If all things are quiet with a lack of feedback or communication, proactively look closely for the presence of warning signs. Hesitating to uncover silent concerns and put countermeasures in place quickly will drastically reduce the momentum needed to get the best result. That is how so many corporate initiatives become “just another corporate initiative”.

Group Agreement vs. Executive Order in Moving Initiatives Forward

Executives have the job of setting the strategies and objectives for an organization to meet/exceed their corporate goals. The managers and front line people further down the organizational hierarchy are responsible for making it actually happen.

• Can an organization move forward with only an executive directive? Sure, some can.
• Will it be as effective without group agreement? Not likely.

The less group agreement you have, the more likely the initiative will be point optimized in each of the organization’s vertical silos. The maximum effectiveness is achieved when the optimization takes place horizontally across departmental or functional boundaries. Group agreement is fundamental to that process.

You Might Have the Wrong Plan If…

You might have the wrong plan or approach to solving a problem if:

• The leader or project owner comes into the problem solving meeting with a list of action items already formulated and starts delegating them to the “participants” in the meeting.
• People are talking negatively about the plan in their cubicles or around the water cooler and no one is stepping out as a spokesperson for why it is the right plan/approach.
• Groups of people are openly showing resistance to change.
• The attendance at the status meetings declines every time the group meets.

You are on the right track to a good plan if:

• People eagerly start listing activities that need to be accomplished and volunteer to take care of them (following through).
• People in the participant group are heading off resistance from others without escalation to the project owner or leadership.
• People have a sense of pride and ownership of the process they have a hand in crafting.

This is most applicable when the problem at hand crosses departmental and/or geographic boundaries and would be best solved using true employee involvement from a cross-disciplinary team.

* I’m obviously not an artist so please cut me some slack on the cartoon.

Using Data to Refine Perception

If you find yourself saying the following:

I don’t need to spend time putting a measurement system in place to tell me what I already know. I’m living the issues every day. I know where the problems are and what to do to fix them.

You might be in a situation where perhaps you should reconsider your position. Sometimes it is necessary to collect data for other reasons - like convincing others.

Three indicators that investing time collecting data might be worth the investment:

1. People say they agree with you about what the problems are and what needs to be done to fix them, but their actions are to the contrary. [persuasion via demonstration]
2. When the same problems keep recurring despite having a process or countermeasures in place to prevent them. [verification]
3. Other problems keep getting all the attention and resources from the leaders and your peers, despite your recommendations or insistence otherwise. [proportional prioritization – magnitude/scale]

Perception is reality. Data is an effective tool to influence perception in order to provide an opportunity to improve the reality.

* Note: Statistics can be [mis]used or misunderstood to support almost any theory like the relationship between shark bites and ice cream sales. I don’t mean for you to use data in a deceptive way just to influence others to support your position. Make sure the data and your understanding of the situation match - checks and balances.