Category Archives: LEAN

The Hidden Cost of Waiting

The Hidden Cost of Waiting

GUEST POST from Mike Shipulski

If you want to do a task, but you don’t have what you need, that’s waiting for a support resource. If you need a tool, but you don’t have it, you wait for a tool. If you need someone to do the task, but you don’t have anyone, you wait for people. If you need some information to make a decision, but you don’t have it, you wait for information.

If a tool is expensive, usually you have to wait for it. The thinking goes like this – the tool is expensive, so let’s share the cost over too many projects and too many teams. Sure, less work will get done, but when we run the numbers, the tool will look less expensive because it’s used by many people. If you see a long line of people (waiting) or a signup list (people waiting at their desks), what they are waiting for is usually an expensive tool or resource. In that way, to find the cause of waiting, stand at the front of the line and look around. What you see is the cause of the waiting.

If the tool isn’t expensive, buy another one and reduce the waiting. If the tool is expensive, calculate the cost of delay. Cost of delay is commonly used with product development projects. If the project is delayed by a month, the incremental revenue from the product launch is also delayed by a month. That incremental revenue is the cost of delaying the project by a month. When the cost of delay is larger than the cost of an expensive tool, it makes sense to buy another expensive tool. But, to purchase that expensive tool requires multiple levels of approvals. So, the waiting caused by the tool results in waiting for approval for the new tool. I guess there’s a cost of delay for the approval process, but let’s not go there.

Most companies have more projects than people, and that’s why projects wait. And when projects wait, projects are late. Adding people is like getting another expensive tool. They are spread over too many projects, and too little gets done. And like with expensive tools, getting more people doesn’t come easy. New hires can be justified (more waiting in the approval queue), but that takes time to find them, hire them, and train them. Hiring temporary people is a good option, though that can seem too expensive (higher hourly rate), it requires approval, and it takes time to train them. Moving people from one project to another is often the best way because it’s quick and the training requirement is less. But, when one project gains a person, another project loses one. And that’s often the rub.

When it’s time to make an important decision and the team has to wait for missing information, the project waits. And when projects wait, projects are late. It’s difficult to see the waiting caused by missing or un-communicated information, but it can be done. The easiest to see when the information itself is a project deliverable. If a milestone review requires a formal presentation of the information, the review cannot be held without it. The delay of the milestone review (waiting) is objective evidence of missing information.

Information-based waiting is relatively easy to see when the missing information violates a precedent for decision making. For example, if the decision is always made with a defined set of data or information, and that information is missing, the precedent is violated and everyone knows the decision cannot be made. In this case, everyone’s clear why the decision cannot be made, everyone’s clear on what information is missing, and everyone’s clear on who dropped the ball.

It’s most difficult to recognize information-based waiting when the decision is new or different and requires judgment because there’s no requirement for the data and there’s no precedent to fall back on. If the information was formally requested and linked to the decision, it’s clear the information is missing and the decision will be delayed. But if it’s a new situation and there’s no agreement on what information is required for the decision, it’s almost impossible to discern if the information is missing. In this situation, it comes down to trust in the decision-maker. If you trust the decision-maker and they say there’s information missing, then there’s information missing. If you trust the decision-maker and they say there’s no information missing, they should make the decision. But if you don’t trust the decision-maker, then all bets are off.

In general, waiting is bad. And it’s helpful if you can recognize when projects are waiting. Waiting is especially bad went the delayed task is on the critical path because when the project is waiting on a task that’s on the critical path, there’s a day-for-day slip in the completion date. Hint: it’s important to know which tasks and decisions are on the critical path.

Image credit: Pexels

Subscribe to Human-Centered Change & Innovation WeeklySign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

Get More Done

Get More Done

What Matters Most Management (WMMM) is the Key to Success

Most times you’ll see this posed as a question “What matters most?” as people grapple with finding the meaning of life. That is not the case here…

Instead I would like to share with you my simple management philosophy that will help you be more successful in today’s sometimes overwhelming, chaotic world of too many competing demands on your time.

I will help you succeed on a whim! (well, okay a WMMM)

Your success in this case comes from following the whim (or WMMM) of What Matters Most Management. It can be tailored for use in managing your time, a project, etc. For simplicity we’ll look at time management today by popular request (people ask me all the time how I manage to get so much done).

It involves quite simply making a quick inventory of all of the things that you could focus on today, or that you’re being asked to focus on, and identifying three key things:

1. How big of an impact will completing this task have (Hi/Med/Lo)

2. How big of an effort will it take to complete this task (Hi/Med/Lo)

3. When will my energy be the best for completing this task (Morning/Afternoon/Evening)

This daily inventory of tasks can be done in your head, or on paper, depending on how detail oriented you are. After you have your mental or written list, then plan your day, prioritizing of course any tasks with a low effort/high impact combination (often very rare).

You will also want to prioritize any tasks that involve getting others to do work. Getting others started on their work sooner rather than later, will lead to those tasks getting done faster because they are not sitting in your inbox.

Consider also whether it makes sense to start a task you can’t finish today or not. Sometimes there is no advantage to starting something today instead of tomorrow if you’ll end up finishing it tomorrow either way. Other times there will be tasks you need to finish tomorrow that you’ll have to start today to make it work. Going through this exercise is how you’ll identify What Matters Most (WMM).

I find this method to suit an organic person like me much more than a rigid system like Franklin Covey, plus systems like that don’t take into account when the ideal time might be to do a certain type of work based on the composition of your day and personal energy patterns. Save up somewhat mindless, administrative type work for when you’re brain is tired and do your more creative, intense work when your mind is fresh.

It’s also amazing how frequently the Pareto Principle proves out (where the items that deliver 80% of the value only require 20% of your effort, and vice versa). Focus on that 20% that will drive the 80% of your potential positive perception in the minds of others and in tangible impact in your life.

The WMMM approach works the same on projects, and can be super powerful when a family, project team, etc. all follow a similar philosophy.

The WMMM approach can also be used by product managers and entrepreneurs to create more successful products and services!

Go ahead! Try it! I think you’ll find that you’ll get more done, and sometimes more importantly, people will notice.

Image credit: earningmoneytoday.com

This article originally appeared on Linkedin


Accelerate your change and transformation success

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Announcing a New Lean Innovation Series

Announcing a New Lean Innovation SeriesI’ve started working with a local healthcare insurance company in a role focused on driving improvement and innovation in its membership and billing operations. The company has a big focus on LEAN throughout the company and always has some sort of value stream mapping (VSM) or rapid process improvement workshop (RPIW) going on through the Kaizen Promotion Office (KPO). Despite this only being my second week on the job, I have already been involved in the company’s LEAN efforts. Having gone through Six Sigma Green Belt training and with my focus on innovation, this of course has been very interesting so far.

Some of you may recall my popular DMAIC for Innovation article for iSixSigma magazine.

In the spirit of the linkage I made between Six Sigma and Innovation in this article, I thought I would create a series of articles looking at the relationship and connections between LEAN and Innovation.

To anchor us all in the same frame of mind about what innovation is, my definition of the word is:

“Innovation transforms the useful seeds of invention into widely adopted solutions valued above every existing alternative.”

One of the key intersection points between LEAN and Innovation is that both are focused on value. LEAN focuses on activities in a process that add value and removing those that introduce waste, while innovation is focused on value creation, value access, and value translation. This I introduced in my often referenced article – Innovation is All About Value.

Innovation = Value Creation (x) Value Access (x) Value Translation

Now you will notice that the components are multiplicative not additive. Do one or two well and one poorly and it doesn’t necessarily add up to a positive result. Doing one poorly and two well can still doom your innovation investment to failure. Let’s look at the three equation components in brief:

Value Creation is pretty self-explanatory. Your innovation investment must create incremental or completely new value large enough to overcome the switching costs of moving to your new solution from the old solution (including the ‘Do Nothing Solution’). New value can be created by making something more efficient, more effective, possible that wasn’t possible before, or create new psychological or emotional benefits.

Value Access could also be thought of as friction reduction. How easy do you make it for customers and consumers to access the value you’ve created. How well has the product or service been designed to allow people to access the value easily? How easy is it for the solution to be created? How easy is it for people to do business with you?

Value Translation is all about helping people understand the value you’ve created and how it fits into their lives. Value translation is also about understanding where on a continuum between the need for explanation and education that your solution falls. Incremental innovations can usually just be explained to people because they anchor to something they already understand, but radical or disruptive innovations inevitably require some level of education (often far in advance of the launch).

Done really well, value translation also helps to communicate how easy it will be for customers and consumers to exchange their old solution for the new solution. My favorite example of poor value translation and brilliant value translation come from the same company and the same product launch – The Apple iPad. It’s hard to believe, but Apple actually announced the iPad with the following statement:

“Our most advanced technology in a magical and revolutionary device at an unbelievable price.”

iPad BillboardThis set off a firestorm of criticism and put the launch at risk of failure. But amazingly Apple managed to come up with the Out of Home (OOH) advertisements with a person with their feet up on a couch and the iPad on their lap (see above) by the time the product shipping. If a picture is worth a thousand words, this particular picture will probably end up being worth billions of dollars to Apple.

Never Forget!

Value Creation is important, but you can’t succeed without equal attention being paid to both Value Access and Value Translation…

Because innovation is all about value…

Value Creation (x) Value Access (x) Value Translation = Success!

Lean versus Innovation

The graphic above highlights that LEAN and Innovation intersect on Value Access. Now let’s have a quick look at some of the key principles of LEAN from the web site of the Lean Enterprise Institute:

PRINCIPLES OF LEAN

The five-step thought process for guiding the implementation of lean techniques is easy to remember, but not always easy to achieve:

  • Specify value from the standpoint of the end customer by product family.
  • Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.
  • Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
  • As flow is introduced, let customers pull value from the next upstream activity.
  • As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

Key LEAN Principles

The second part of the above graphic highlights the seven sources of waste:

  • Inventory
  • Motion
  • Defects
  • Transportation
  • Processing
  • Overproduction
  • Time

While developed for the manufacturing context, LEAN can be (and is) used in service industries like health insurance as well. As you can see, LEAN is really focused on improvement and optimization of the status quo, while innovation in contrast is focused on the introduction of something new that disrupts the status quo. As a result, one is not better than the other, but instead both methodologies can be used side by side, and in future articles I will share more of my musings on how innovation and LEAN can be used together.

Stay tuned!


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.