Category: Risk Management

Don’t Panic – When Bad Things Happen

WordPress dashboard interface
WordPress dashboard interface (Photo credit: Wikipedia)

Don’t Panic

Although the situation I am about to describe was successfully resolved, I felt compelled to share this event with you. Times like this expose our vulnerabilities and reinforce the adage to “expect the unexpected”.

The Situation

Imagine the shock and surprise followed by the deep, sinking feeling that set in when an unexpected notice suddenly appeared on my screen stating that our site was suspended effective immediately for failing to comply with WordPress.com’s terms and conditions. An attempt to visit our site from another computer confirmed it.

While you may not have noticed, I’m quite certain many others were wondering what was going on – especially first time visitors or recent subscribers. As our site often appears at the top of most Google searches – depending on the search term used – I can only imagine what was going through the minds of those who were attempting to visit.

After contacting WordPress, we learned that our site was subject to a spam detection error and suspended by the “system” in error. The fact that you’re reading this means the problem was successfully resolved by the great people at WordPress – apologies for the inconvenience included.

Expect the Best, Prepare for the Worst

While I am more than happy to have our site restored to full service, we needed more than just a simple backup of our data to preserve our blogging ecosystem. Our contingency plan included setting up a self hosted site and this event served as the trigger to make it a reality.

1617 A. SWETNAM School of Defence 56 He is a fool which will adventure all his goods in one ship.

Fortunately, WordPress.com provides several means for transferring or downloading a copy of your pages and posts. The suspension notice advised that the data for “your site” will only be available for a limited period of time.  Eventually all data will be completely removed from the system.

In other words, act quickly and methodically because the clock is ticking. Unless you’ve done this for yourself, there are a few items worth noting.

  • Although it’s possible to export the  entire site in a single XML file, the size of the file may exceed the import capacity of the new host.  Free XML import tools seem to have a limit of 1MB.   Our file exceeded this limitation.
  • The XML file does not include current subscribers or any of the data in your media gallery.
  • The current theme may not be available at the new host site and some of the functionality you may have expected has been lost.
  • Conversely, some themes offer more and better features than you may have expected.
  • Six (6) years of blogging creates a relatively large digital ecosystem with roots deeper than we first thought possible.

Corrective Actions

Setting up a self-hosted site may seem like an over-reaction to this situation, however, this event was very disturbing and quite unsettling, especially when we consider the number of visitors we receive over the course of a given day. Fortunately, this event occurred on a weekend when traffic volume is typically lower.

Since we already own several top-level domains, finding a hosting service was our next challenge.  We purchased our top-level domains from NameCheap.com and decided to pursue our hosting services through them as well.

We found two (2) excellent services that offer a variety of WordPress themes, set up our domains, and began the process of transferring a copy of our blog over to the new sites.  It is possible to upload themes directly and there a numerous themes to choose from.

Although we found a site that offers the same “Inove” theme we are using here, we noted that this theme has not been updated for the past two (2) years. We selected the Responsive theme for our new site as it offers new functionality and features that includes mobile platforms.

Lessons Learned

WordPress.com supports millions of bloggers and losing one – for whatever reason – is not going to have a significant impact on their continued and ever-growing success. This experience helped us to realize just how vulnerable we are when we trust our property, intellectual or otherwise, to an independent entity.  To circumvent the possibility of yet another catastrophic blogging event:

Statues of Don Quixote (left) and Sancho Panza...
Statues of Don Quixote (left) and Sancho Panza (right) (Photo credit: Wikipedia)

“It is the part of a wise man to keep himself today for tomorrow, and not venture all his eggs in one basket.”—Sancho Panza—Don Quixote (Part I, Book III, Chapter 9) by Miguel de Cervantes [1547-1616].

In simpler terms:  “Don’t put all your eggs in one basket!”

  • Have a contingency plan that includes creating a second, self-hosted site.  Note that it is possible to transfer your blog to a number of venues.  We successfully uploaded our XML data to several different platforms.
  • Prepare and Execute your contingency plan to determine and mitigate any risks or other consequential losses.
  • If you are presently blogging on WordPress.com, be aware that a complete XML copy of your site data may exceed the import limits of the receiving host – at least for the tools that are offered free of charge.
  • To minimize the size of the XML file, Pages and Posts can be exported separately.  You can also specify a date based range of posts to export. As such, you can create several smaller files that will contain all of your posts for a given period of time.
  • Perform regular exports of recent posts for importing to your self-hosted site and to serve as a local back up.
  • Transferring your site is not that difficult, however, WordPress.com will transfer your site for you for a fee.
  • Don’t be too naive. You are the only one who really cares about YOUR property – intellectual or otherwise. Although your subscribers and followers will be devastated, chances are you won’t be missed by the WordPress.com team unless you’re as big as the Huffington Post or some other notable blog venue.
  • When forced to look for options, there are better, feature filled alternative WordPress themes and options to be found. As we’ve said many times before, “There’s always a better way and more than one solution!”

Going Forward:

We recently celebrated six years of blogging on WordPress.com and plan to do so for many years to come.  While this experience has cast a shadow on our overall experience, we have learned yet again that we need to preserve and protect our own interests.

With over 218,000 page views from virtually every country around the world, we are doing something right. Our visitors and views continue to grow with each passing year. The top five countries that contributed to our Top Views this year are:

  1. United States
  2. India
  3. United Kingdom
  4. Canada
  5. Australia

On behalf of the Lean Execution Strategy Team, I appreciate and thank you for the privilege of serving you – our clients, subscribers, and visitors.  We wish each of you a happy holiday season and look forward to serving you in the new year with the best of successes in 2015.

Until Next Time – STAY lean!

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VersAlytics

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Microsoft – Scratching the Surface

Microsoft Surface
Microsoft Surface (Photo credit: Wikipedia)

There is always a better way and more than one solution

This certainly seems to be true in the tablet world as Microsoft unveils one of its own – the Surface. Taking a note from Apple, Microsoft has integrated hardware and software into a unique solution that is sure to compete directly with the iPad.

From a lean perspective, I can’t help but admire the evolution of electronics to become ever smaller and ever faster than the generations that precede them. While the Surface is Microsoft’s debut into the tablet market, it has much to offer as a strong contender to Apple’s iPad. Microsoft may be a little late coming into the tablet game but perhaps their timing is appropriate. Apple has played their cards giving Microsoft the opportunity to be “second but better”.

Although reviews are mixed, I’m encouraged by the initial product offering from Microsoft.  From the outset, there are a number of physical features that immediately set the Surface apart from the iPad such as an integrated keyboard and cover, a pop out “kick stand”, and included stylus. Windows 8 appears to be the operating system that will dominate both the Surface and the PC desktop / laptop environment in the near future. This pairing offers a much more flexible data storage and transfer solution than is available in competitor products.

You be the judge

Rather than describe the Surface, you can judge the Surface for  yourself as presented in this “teaser” preview video:

The full keynote presentation by Microsoft appears in the video below:

The Price of Ownership

Although pricing has not been stated explicitly, Microsoft suggests that it should be in line with other tablets and netbooks already available on the market.  Hopefully it will be cheaper than it’s intended competitors. In Ontario, Canada, Apple’s 64GB iPad retails at $895.00 and, after buying your case, keyboard, and stylus, the cost to “start-up” your iPad can easily swell to over $1,100.00 after taxes and the purchase of a few “useful apps”. The price of an iPad is not all-inclusive. It is worth noting that the iPad requires an additional line (phone number) on your cellular plan and, since data is all “in the cloud”, your monthly data usage rate is sure to rise as well. Even RIM‘s (Research in Motion) PlayBook tether option is admirable as a cost-effective solution as it “co-exists” with your BlackBerry SmartPhone.

The need for dominance – “apps”

Apple boasts that over 500,000 apps are available for the iPhone and the iPad. From a consumer perspective it is virtually impossible to evaluate all of the “apps” that are available and finding the one that will do what you want is even more daunting. Most reviews are brief or there is insufficient data collected to provide an effective rating. It could be argued that apps are relatively inexpensive so the financial risks or exposure for an error in judgement is minimized when choosing an app.

Apps for other platforms are growing in number, however, they are still far from approaching the scope of Apple’s app store. Now that Microsoft’s Surface has been introduced, app developers are sure to find themselves wondering which platform is deserving of their time and effort.

I suggest that a need for core dominant apps exists – much like the wars that ensued between spreadsheet and word processor developers of years past. Today, anyone with a computer, time, and a desire to code can develop an app. Apple certainly makes it easy by providing all the tools you need to get started including a fully integrated programming environment. With tools at everyone’s disposal and a small price for admission, it is no wonder that so many apps are available.

Microsoft may very well be the contender to develop real “useful” apps that will truly make tablets even more relevant for business just as they did with Office 2010 for the desktop. Microsoft Office can be found on virtually every computer I’ve seen in business and there are very few exceptions.

The Wait Begins

We’ll have to wait and see what happens in the tablet market. For now, it appears that Apple finally has a true competitor that may be cause to stimulate even more innovation going forward. It is also worth noting that Google just released the Nexus Android based tablet to compete with Amazon’s Kindle. All of this is happening as RIM (Research In Motion) is struggling to stay afloat. Some may even say, “It can only get better.”

Until Next Time – STAY lean!

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Vergence Analytics

Toyota #1 for a Reason

Experience is often gained by making mistakes, however, we don’t have to repeat them for the sake of experience.  This is one of the reasons I decided to read “Toyota Under Fire” by Jeffrey K. Liker and Timothy N. Ogden.  Aside from the many positive reviews this book has already received, it claims to present “The definitive inside account of Toyota’s greatest crisis – and lesson you can apply to your own company.”

Just as interesting though are two very strong statements or “subtitles” that appear on the front cover.  At first I thought these statements were quite bold considering that Toyota’s most troubling times are not that far behind us:

  1. Lessons For Turning Crisis Into Opportunity, and
  2. How Toyota Faced the Challenges of the Recall and the Recession to Come Out Stronger

I don’t think any company would savor the opportunity to experience the crises that Toyota has been subjected to over the past few years.  It is certainly easier and much cheaper to learn from the experiences and “mistakes” of others.  Each crisis that Toyota faced was compounded by the presence of new ones,  namely,

  1. Sudden Acceleration concerns and the recall of over 10 million vehicles,
  2. Enduring significant media and government scrutiny while being subject to the most intensive investigation in many years,
  3. Defamation of the Toyota brand and loss of consumer confidence in the company and it’s products, and
  4. An economic downturn that affected every manufacturer around the world.

These were certainly very difficult times and the lessons to be learned from them are sure to be of value to every business.  In the typical Toyota style, they once again have opened the doors to share their lessons learned – an opportunity that few companies dare to offer.

Endorsements

The statements supporting this book imply that successes have already been realized.  I, like you, would be more than a little concerned if these were Self-Proclaimed statements issued by Toyota’s leadership.  The good news is they aren’t.

An article published in the Toronto Star, “Toyota Bags 3rd Consecutive Reader’s Digest ‘Most Trusted Brand’ Award“, presents the best endorsement of all – it’s from us – the consumer.  The Reader’s Digest Trusted Brands program awarded Toyota ‘Most Trusted Passenger Car Brand” for the third year in a row and the 2011 Most Trusted Hybrid Brand.

Toyota is the number selling car brand in Canada and is recognized for having the most fuel-efficient car fleet and providing the greatest value to customers.  I was surprised to learn that 80% of Toyota’s sold in the past 20 years are still on the road.

Respect is Earned

As the expression goes, “Respect is Earned”.  I contend that the same is true for Trust.  Perhaps the realization that Toyota is as concerned about people, employees and customers alike, that the very culture that defines the company has extended to its customers as well.

As such, Toyota’s resilience and sustainability through these crises is further evidence of the unique and powerful culture upon which the company itself was founded.  I’m excited by the opportunity to learn more about this amazing company.  Toyota Under Fire will certainly prove to be a good read.

Until Next Time – STAY lean!

Vergence Analytics
Twitter:  @Versalytics

Remembering the Space Shuttle Challenger

Camera captures grey smoke emitting from the r...
Image via Wikipedia

Although this event happened twenty-five years ago today (28-Jan-1986), it seems like only yesterday.  This tragic event serves to remind us that humans can make mistakes and errors in judgment do occur.  In this case, history is our greatest teacher.

Follow this link to CNN’s “Challenger disaster remembered“.  CNN was the only network covering this event as this would be just another “routine” flight.  If the above link doesn’t work copy the link below into your browser:  http://www.cnn.com/video/#/video/us/2011/01/27/natpkg.challenger.1986.cnn?hpt=C2

If we have learned anything, it is this:  “Nothing in this world is routine.”

Until Next Time – STAY lean!

Vergence Analytics

Twitter:  @Versalytics

A Paradigm Shift To Profitability

Is the “Automotive Industry On the Rebound” or just the companies that make them?  Our local paper, The Toronto Star, reported some very encouraging news today regarding the state of General Motors.  The headline that caught my eye was “A slimmer GM prospers”.  What is more encouraging though is that GM’s recovery is based on a fundamentally new paradigm shift:  Profit Driven rather than Volume Driven thinking.  I could only smile as I recall stating in yesterday’s post, “Sustainability Through Integration“, that some companies are now pursuing a “back to basics” strategy.  Nothing could be more “back to basics” or fundamental to a business than making a profit.

Why the change?  Although profitability is the most fundamental aspiration and measure for success of every business, it is not unreasonable to think that profitability was a given.  After all, what company would launch a product that was designed to lose money?  Becoming the largest producer of automobiles in the world somehow seems to a reasonable objective if all vehicles are indeed profitable.  It is clear that GM became blinded in its pursuit to be the largest automaker on the globe.  Pardigms are certain to have an effect on the culture and policy of the company, however, the lesson learned by GM is that they cannot be pursued in isolation.

To summarize the content of the article, GM has shifted it’s focus from volume to profitability and as such has changed it’s way of thinking.  Having shed almost half of it’s (and losing) brands and focusing on profitability across the fleet of vehicles, GM is now in a position to post its first full-year profit since 2004.  A mere 6% increase in sales between 2010 and 2011 suggests that future profitability will jump 46%.

As we also discussed briefly yesterday’s post, sustainability is a concern for anyone looking to invest in a company’s future.  The article suggests that GM’s profitability is sustainable as the plan is based on significantly reduced volume projections.  In the same article, Ford Motor Company is also expected report a profit of $8 Billion for 2010.

Secondly, GM also intends to use the Chevrolet Volt hybrid drive-train technology across several models.  I can certainly appreciate that sharing the costs of developing this technology across a much larger vehicle / sales base is a smart business decision.

Finally, GM also managed to increase it’s overall global footprint, exceeding that of Toyota.  The article states that “China has overtaken the U.S. as the world’s largest market.  And GM has led all other world automakers in Chinese sales for the  past six years.”  The article further states that GM has outsold Toyota more than three to one in China.  Certainly this is positive news for the investment community and GM employees alike.

The change in GM’s leadership is also evident in the final few paragraphs of the article.  GM’s business model is obsolete and as Roger Enrico was quoted saying, when he was CEO of PepsiCo, “Managing market share without profit is like breathing air without oxygen.”  David Cole, chairman emeritus of the Center for Auto Research in Ann Arbor, Michigan, also had these words of reflection for GM’s CEO, Daniel Ackerman, “If he accelerates things without the right level of execution – well, you’ve got to be careful not to drive into things too quickly.”  I am reminded of our post Lean Execution:  Competing with Giants – It’s all about Speed, featuring Dominic Orr, CEO of Aruba Networks and the videos we posted where he speaks to this topic.

In an unrelated article, I also learned that Magna’s Don Walker also announced that a new plant will be launched in Mexico.  It is interesting to note that Magna Mexico employs 16,000 people versus Canada where the number is approximately 17,000.

Although the Automotive Industry may not be recovering as quickly as we would all like to see, it sounds like the companies themselves are.  It certainly seems that GM has acknowledged past ill’s and has discovered a cure that seems to be working.  For now I am content that this time we may actually have learned a few lessons, did something about, and, best of all, it seems to be working.

Until Next Time – STAY lean!

Vergence Analytics

Twitter:  @Versalytics

Toyota recalling 1.7 million vehicles

Toyota is tasked once again to deal with another recall.  The details of the recall can be found at the following link:  http://www.google.com/hostednews/canadianpress/article/ALeqM5iF7PDtO3qyJdQuqtpwz7rBTXyu7w?docId=5764670

Many people are quick to assume that resolving one recall issue somehow sterilizes or immunizes the full line up of vehicles from having other unrelated defects.  History tells us that this is simply not possible.

Although the number is high, there are relatively few vehicles affected by the recall in Canada.

Until Next Time – STAY lean!

Vergence Analytics

OEE and Human Effort

A girl riveting machine operator at the Dougla...
Image by The Library of Congress via Flickr

I was recently asked to consider a modification to the OEE formula to calculate labour versus equipment effectiveness.  This request stemmed from the observation that some processes, like assembly or packing operations, may be completely dependent on human effort.  In other words, the people performing the work ARE the machine.

I have observed situations where an extra person was stationed at a process to assist with loading and packing of parts so the primary operator could focus on assembly alone.  In contrast, I have also observed processes running with fewer operators than required by the standard due to absenteeism.

In other situations, personnel have been assigned to perform additional rework or sorting operations to keep the primary process running.  It is also common for someone to be assigned to a machine temporarily while another machine is down for repairs.  In these instances, the ideal number of operators required to run the process may not always be available.

Although the OEE Performance factor may reflect the changes in throughput, the OEE formula does not offer the ability to discern the effect of labour.  It may be easy to recognize where people have been added to an operation because performance exceeds 100%.  But what happens when fewer people have been assigned to an operation or when processes have been altered to accommodate additional tasks that are not reflected in the standard?

Based on our discussion above, it seems reasonable to consider a formula that is based on Labour Effort.  Of the OEE factors that help us to identify where variances to standard exist, the number of direct labour employees should be one of them. At a minimum, a new cycle time should be established based on the number of people present.

OEE versus Financial Measurement

Standard Cost Systems are driven by a defined method or process and rate for producing a given product. Variances in labour, material, and / or process will also become variances to the standard cost and reflected as such in the financial statements. For this reason, OEE data must reflect the “real” state of the process.

If labour is added (over standard) to an operation to increase throughput, the process has changed. Unless the standard is revised, OEE results will be reportedly higher while the costs associated with production may only reflect a minimal variance because they are based on the standard cost. We have now lost our ability to correlate OEE data with some of our key financial performance indicators.

Until Next Time – STAY lean!

Vergence Analytics

The High-Velocity Edge Is Here!

Update:  Steven J. Spear has been awarded the Philip Crosby Medal for his book “The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition” according to a Press release from ASQ—the world’s largest network of quality resources and experts (Milwaukee, WI March 2, 2011).

We have raved about the book “Chasing the Rabbit” written by Steven J. Spear and have just learned that the book has been re-released under a new a title, The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition.  Recognizing that your time is a valuable commodity, we aim to provide information that is relevant to our readers and visitors.  This book provides much more information on certain topics than one could ever hope to achieve through a website or blog – hence our recommendation.

This is perhaps an unprecedented marketing strategy for what was an already very successful book.  In one respect this reflects the wisdom of Peter Drucker who suggested that there is a time to abandon the old (even if it is considered an award winning success) in lieu of the fresh and new.  The following are excerpts from the e-mail we received from Steve that explain the reasons for this change:

Dear Friends and Colleagues,

The High Velocity Edge shows the particular skills and capabilities that lead to broad-based, high-speed, non-stop improvement and innovation.  Master these and you achieve exceptional, rival-beating performance, even if facing intense competition. If you don’t, you watch as someone else wins

The book (and the website supporting it) are replete with examples of how these capabilities are developed and deployed in high tech and heavy industry, in design and production, in services like health care and in manufacturing.

There is Pratt and Whitney’s compression in time and cost of jet engine design, the Navy’s creation of nuclear propulsion  with breath taking speed, Alcoa’s achieving near perfect workplace safety, and the exceptional improvement of care in medical institutions.

Toyota features prominently as an example, both in showing how  successfully cultivating the capabilities introduced and illustrated in The High Velocity Edgeare the source of  tremendous competitive strength and also in showing how the capacity to develop such capabilities can be overburdened.

With the release of The High Velocity Edge, I’m testing new media approaches, being released on its website, to bring the book’s ideas into broader practice more quickly than traditional means alone allow.

Here’s a closer look at what is new.

New Title and Cover: Why a  new name and cover after three awards, versions in four languages, and flattering reviews?  Well, people do judge a book by its cover, and those who didn’t read the reviews or learn of the awards were too often left  wondering what was inside.  Not so with the new.

New material:  You’ll find a new preface and epilogue, drawing lessons about leadership, innovation, and operational excellence from  Toyota’s recent  struggles.

New media: I’m testing ways to  help  people master more quickly and reliably the skills that allow individuals and organizations to achieve broad-based, high-speed improvement and innovation.

On the way are an interactive web-based case study, an ‘open school’ course for those in health care professions, and a series of short tutorials to help people review what they’ve read and to help them teach what they’ve learned to their own students and colleagues. The results will be introduced on the book’s website.

Of course, there will still be postings, applying the principles of leadership, innovation, and operational excellence to current topics.

I certainly hope you find the new look, content, and format useful in pursuing perfection.

Please share your feedback, and let’s talk about how I can help you put these ideas  to use in your own organization.

Thanks!

Steve Spear

A high velocity organization is, in our opinion, a step above and beyond the traditional lean principles that are typical of most text books and seminars on this topic.  The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition will prove to be a worthwhile read and we highly recommend this to any company seriously seeking to take their organization to the next level.  We have also added this book to our recommended reading list.

Until Next Time – STAY lean!

Vergence Business Analytics

Foundations of Failure

The problem with many of the problems we find ourselves having to contend with at any given time is that we learn of their existence after the fact (when the damage is done) or after discovering that the results we were looking for simply didn’t materialize.  As we learned from Michael A. Roberto’s book, “Know What You Don’t Know“, there are a number of reasons why problems don’t surface until after the fact.  I highly recommend reading “Know What You Don’t Know” as well Steven J. Spear’s “Chasing the Rabbit” as both books present numerous examples and extensive research that span across a wide variety manufacturing and service industries.

In many cases, the pathology of a given problem reveals that much of the information surrounding a given failure, or series of failures, is “common” knowledge.  In isolation, many of the contributing factors appear to be insignificant or irrelevant.  However, when we review all of the “insignificant” bits and pieces of evidence as part of the whole, we discover that it is these “pieces” that make the puzzle complete.  This was certainly the case with 9-11, Three Mile Island, The Challenger, and perhaps even the most recent economic collapse.

The expression, “If it ain’t broke, don’t fix it”, comes to mind as I think of problem solving in the general sense.  Even today, we find this philosophy is embedded deep within the culture of many corporations.  In some cases, the designs are so fragile, that any deviation from normal or intended use may result in failure.  Broken plates and glasses remind us that they are not intended to be dropped – either intentionally or by accident.  We are also painfully aware that the absence of past failures does not automatically exclude or make the process or product immune from future failure.  There are too many examples of failure where past successes are suddenly shattered by a catastrophic failure.

Of course, many products are subject to numerous hours of testing in varying degrees of severity and exposure limits.  Yet somehow, these tests still do not capture all of the possible failure modes that are observed in practice.  Too many product recalls are evidence of our inability to anticipate the vast array of problems that continue to haunt manufacturer’s around the globe.  Just maybe the the “If it ain’t broke” expression needs a little rework itself.  If it ain’t broke please break it – or at least try!  Computer hackers around the world having been giving Microsoft and other major corporations their fair share of problems as they continually find and develop “new” ways to break into very sophisticated and high tech systems.

Our Foundations of Failure model is based on the premise that every failure has a known and identifiable root cause.  The challenge for today’s companies is to learn how to identify problems before the product makes it to market or the process is released to manufacturing for production.  The objective is to instill an innate ability to constructively critique your concepts and designs to identify and anticipate the “What if …” scenarios that your product or service may be subject to.

Perhaps an even greater skill to be learned is to identify and anticipate how the product or process may be used or abused – with or without intent or malice.  From this perspective, lean manufacturing principles and standardized work can certainly help us to map our road to success.  Technically, if the ideal process and it’s inherent steps are performed as specified, then any deviations from the prescribed process or design are subject to a system breakdown or product failure.  As discussed in “Chasing the Rabbit“, this was (and is) certainly the case for the US Nuclear Submarines.

Are your system, process, and product specifications documented to the extent that deviations from their intended purpose or function can be, or are, readily identified?  Is it even possible to forecast or anticipate every possible failure mode?  Is it fair to suggest that prescribing a solution to a problem suggests that the original scope of the problem was or is fully understood?

As we have learned from the numerous failures in our financial markets and the collapse of many high profile businesses and companies around the globe, common symptoms and effects of failure may be the result of radically different root causes:  ignorance, negligence, willful misconduct, and even fraud.  We need to implement systems and processes that are robust and assure our future successes are built on solid fundamental business practices.  When the foundation is faulty, the entire business enterprise is at risk.

In summary, the first step is the most critical step.  The first few steps of any new initiative, process, product, or service, form the foundation of all decisions that follow.  Just as a building requires a solid foundation, so do our future successes.  I recall a little sign that was posted in a retail store that read as follows:

Lovely to look at,
Lovely to Hold,
But if you drop it …
Consider it Sold!

Until Next Time – STAY lean!

Lean Recalls – Compromising Safety?

Is there ever a time when risk outweighs the real fix?   As we are quickly learning from the latest news regarding Toyota’s proclaimed “savings” through limited safety recalls, the answer is “NO”.  The details of the story surrounding Toyota’s knowledge of the mounting safety concerns and the Toyota’s defense is very disturbing.  Toyota has responded by stating “Our first priority is the safety of our customers, and to conclude otherwise on the basis of one internal presentation is wrong.”

Are Toyota’s actions aligned with this statement? According to the news we’ve been reading, the answer again is “NO”.  We would suggest that Toyota’s attempt to downplay “one” internal presentation is extremely weak.  Why?  Simply because that one internal document happened to be presented by Yoshimi Inaba, Toyota’s top North American executive, and as such the content becomes much more significant and relevant.  An executive presentation is expected to be factual and with purpose.  To suggest otherwise and relegate this to the category of ‘discussion topics” and one person’s opinion is a real stretch.  If this is indeed the case, then there are real concerns within the leadership ranks of Toyota.  When the president speaks, people listen for a reason.  What they say affects in some way – good or bad.

Akio Toyoda, president of Toyota, and other executives are on the firing line as they present their case in the US congressional hearings.  In Akio Toyoda’s own words, “We pursued growth over the speed at which we were able to develop our people and our organization.”  As we have mentioned in previous posts, Toyota’s communication strategy has been lacking as this crisis continues to unfold.  We would suggest that this is indicative of the underlying problems that Toyota is experiencing.  Effective communication was once at the core of Toyota’s culture and to this end, we would agree that Toyota’s culture has been compromised.  What is debatable is whether this is strictly due to growth.  Is this a factor that is attributable to the sheer size of the company?  Is this the result of an evolution in culture that lost it’s roots?

As size increases, so do layers of management and the number of “gatekeepers” that attempt to filter out the critical information.  Whether or not the original message remains intact is one the faults of bureaucracy.  While Toyota traditionally has managed to “keep it real” and encouraged forward thinking and free dialogue, layers of management may have eroded this once highly characteristic trait of the Toyota culture.

Is Toyota solely to blame?  It appears that the government Safety Regulators have some explaining to do as well.  Surprisingly, the scope and extent of recalls can actually be negotiated.  The short lesson learned is that we cannot knowingly compromise human safety in our products and services.  In simpler terms, when human lives are at risk, there is no such thing as a LEAN Recall.

As we have emphasized through our many pages and posts, the culture is the company.  In our post, “Lean Execution:  Competing with Giants – It’s all about speed“, we featured two video clips of Domenic Orr, CEO of Aruba Networks, who discusses the rapid growth of his company.  “Thoughtful Speed of Execution” and learning to recognize Boulders, Rocks, and Pebbles, and teaching our gate keepers to do the same are two steps more than may have been taken already.

Related links:  Toyota vows shake-up, lawmakers seek more reform (Reuters), Toyota’s latest apology, Toyota apologizes for handling of safety issues,

Until Next Time – STAY lean!