Inside Look: Nationwide’s lean IT management (cont’d)

This edition of Think OpEx features a guest blogger: Tom Paider, an AVP and build capacity leader at COE member Nationwide Insurance. Paider, also a graduate of Fisher’s MBOE program, gives an inside look at the lean transformation that took place in Nationwide’s IT division.

In part one of my blog about Nationwide’s Lean IT Management system we discussed the needs for management to change during a lean transformation. That’s sometimes much easier said than done, so what were our steps in making this a reality?

When we first started our management system transformation in the Application Development Center we began with the definition of leader standard work, first attempting to understand the current state and then moving into a definition of the future state. Very quickly, we realized we had a problem: We couldn’t even agree on the current state of management processes, let alone how the future should look. Taking a step back we instead went through a brief lean 101 education for all our managers and defined champions for different aspects of the transformation such as visual management, coaching, sustainability, etc. With all the managers at least talking the same language we began again in earnest.

Nationwide visual management
Our first implementation of a visual system for management quickly was replaced with a more sophisticated model, but the act of just making things visual quickly allowed us to move forward. Getting hung up on making visuals perfect is a trap to avoid.

This time we didn’t start with leader standard work, opting instead for making the work of management visible. This proved to be a wise decision for us as it quickly eliminated the arguments about what current state looked like. Our first attempts were rudimentary but provided us the context we needed to move forward. Elements of the visual management system included an accountability board, transformation items, and any special assignments.

Once the work was visual we were quickly able to see all the waste in the system and create leader standard work that emphasized the value-adding activities that lean managers should do every day. Successive layers of standard work were created up and down the management chain that reinforced the desired behaviors through cadenced gemba walks, auditing mechanisms, and a focus on process excellence as a leading indicator instead of the typical focus on results.

This series of three stand-up meetings that occur daily allow very fast escalations as well as deployment of process improvements.

The next step for us in the transformation included a more robust accountability system. While leader standard work, including gemba walks and visual management, went a long way for us, there was still something missing. Following the patterns David Mann outlines in his book Creating a Lean Culture, we implemented a three tier accountability system. This consisted of three daily stand-up meetings all held at their respective visual management boards.

The implementation of the accountability processes ended what we considered to be phase one of our transformation. We still had a long way to go and lots of improvements to be made, but at this point we were all at least moving in a common direction and had an understanding of our true north. Our journey will never be complete, but with the basics of a lean management system we were finally able to truly support our associates in delivering ever higher value to our customers.

MBOE recap: Advice from the experts

Fisher Senior Lecturer Mrinalini Gadkari is breaking down a recent week in the life of Fisher’s Master of Business Operational Excellence program. Today is the final installment.

The Fisher College of Business adds to its already stellar slate of instructors for the MBOE program with major players in the lean world. Here’s a snapshot of advice from a pair who worked with our students at the session I’ve been chronicling all week: Lean Enterprise Institute CEO John Shook and author Jean Cunningham, both winners of the prestigious Shingo Prize.

John Shook LEI
John Shook, at a 2011 MBOE session.

Ask the right questions

Shook, a highly experienced sensei focused on the importance of teaching and coaching others, told students that trait is highly important in successful lean implementations and efforts to sustain them. Shook used the same format as his landmark book, Managing to Learn, to describe a scenario in which a supervisor is helping a manager translate technical documents from Japanese to English with help from the A3 problem-solving method. Although the supervisor has a lot to do and it might simply be easier to take the problem into his own hands to solve, he steps back and patiently provides support by asking the right questions. That tactic, Shook said, helps your mentee find the root causes of the problem and come up with the appropriate countermeasures.

Lean works for accounting, too

Cunningham, author of the book Real Numbers, walked students through a simulation to stress how pull and one-piece flow concepts help drive down inventory. She also illuminated the differences between traditional and lean accounting. Lean accounting, she said, involves modifying traditional financial statements to provide “Plain English Financial Statements.” These must:

  • Be usable by non-accountants
  • Eliminate complexity (a big theme this week)
  • Comply with General Accepted Accounting Principles (GAAP)

Thanks for joining us this week and check back for more updates on the MBOE program, the next cohort
of which begins in just a month.

MBOE recap: Simplicity doesn’t have to be complex

Fisher Senior Lecturer Mrinalini Gadkari is breaking down a recent week in the life of Fisher’s Master of Business Operational Excellence program. Stay tuned this week for more. 

Lynn Kelley, VP of continuous improvement at Union Pacific, recently challenged students with two really interesting questions:

  • If complexity is so bad from a lean perspective, why is it prevalent in our organizations?
  • And why is simplicity resisted?
Lynn Kelley Union Pacific
Lynn Kelley, at a recent COE women’s leadership forum.

Lynn’s presentation to our MBOE students focused on the criteria behind the success and failure of lean implementations. From her current position and previous role as process improvement VP for Textron, Kelley offered up suggestions on how to develop, execute and sustain strategy.

But back to those questions. Kelley offered up this explanation: The tools we learn in continuous improvement can help us simplify processes. But continuous improvement is fraught with pitfalls. I’ll close with a few of those she listed:

  • We make continuous improvement overly complicated. In other words, “Just do it” becomes a long project.
  • Our solution might end up adding complexity or bureaucracy.
  • Our measurement of the initiative’s process might add complexity or bureaucracy.

Beyond being a great process improvement coach, Kelley has worked regularly with COE in the past through its women’s forums, helping our members fight the unproductive competition that often arises among women in the workplace. She’s pictured in this post at a recent COE forum.

MBOE recap: What makes a great lean leader?

Fisher Senior Lecturer Mrinalini Gadkari is breaking down a recent week in the life of Fisher’s Master of Business Operational Excellence program. Stay tuned this week for more. 

Peter Ward Master of Business Operational Excellence MBOE
Dr. Ward, at a recent MBOE session.

You’ll hear time and time again that no truly successful lean transformation can take place without leadership that’s on the same page. So what kinds of leaders are successful at sustaining lean operations?

Here’s an eight-attribute list from Dr. Peter Ward, which he highlighted at our recent MBOE session:

  1. Engaged: They learn and teach, they don’t delegate systems thinking, they constantly spread the word and are constant even when things go wrong.
  2. Persuasive: They pose a simple and clear argument and use data and stories to support the change, relevant to the type of audience they are addressing.
  3. Process-obsessed: A good lean leader knows that results are a consequence of good processes.
  4. Good manager: Go to the gemba regularly, establish accountability for maintaining processes and apply visual controls
  5. Ask questions: “What do you think the problem is?” rather than “Why do we have a problem and who is responsible?”
  6. Deliberate: They start with the problem and pursue several potential countermeasures in parallel
  7. Persevere: They have a constancy of purpose, even when things go wrong they stick to the lean way of doing things
  8. Experiment: Problems are the fuel for the improvement engine and countermeasures are hypotheses. The only failed experiment is when we don’t learn.

MBOE recap: Tying it back to principles

Fisher Senior Lecturer Mrinalini Gadkari is breaking down a recent week in the life of Fisher’s Master of Business Operational Excellence program. Stay tuned this week for more. 

Prof. Gary Butler at a recent MBOE session

Prof. Gary Butler emphasized the importance of creating a link with lean tools, systems and principles in creating and sustaining culture change. Most companies, he said, are great at implementing lean tools, but unless they’re tied to strategic company goals and a system exists that nurtures those changes, it’s impossible to sustain lean change – or any change, for that matter.

As an example, a company might implement 5S to organize multiple work areas to improve workflow and create a safe environment for the operators. In a few weeks, however, things tend to go back to how they were. This is often because the 5S process wasn’t tied to a deeper strategic goal. Often there’s a lack of a system where operators and managers can have first- and second-level daily meetings where problems, if any, are signaled to upstream operations. Managers who don’t go to the gemba to see the actual state of the flow are unlikely to have a sustained 5S environment as well.

Here are some key takeaways from Butler’s lecture:

  • Operational Excellence requires a vision of the future state
  • It requires a plan for gap closure between the current and future state
  • No strategy can be executed successfully without communication throughout the organization
  • Day-by-day perseverance is required to take small steps toward the future state vision.

Inside look: Nationwide’s lean IT management

This edition of Think OpEx features a guest blogger: Tom Paider, an AVP and build capacity leader at COE member Nationwide Insurance. Paider, also a graduate of Fisher’s MBOE program, will give an inside look at the lean transformation that took place in Nationwide’s IT division.

You’ve probably heard talk about the need for management to change when undergoing a lean transformation. The principle is simple: How can we expect our staff to change if we as managers don’t change as well? While the principle is simple, the implementation of the principle isn’t so simple. Many managers believe they’re where they are because they know best how to direct their subordinates They believe their role is to assign tasks, monitor progress and assess performance.

Culture, Values and attitudes, What we do
Focus on what behaviors you want people to exhibit, then design processes around those behaviors. It’s much easier for people to act their way into thinking than think their way into acting.

How, then, do we transform these managers to a lean mindset focused on coaching, problem-solving and empowerment?

In my experience at Nationwide, this management transformation follows the same general pattern as staff in lean transformations: Changes to daily behavior used to change thinking over time. It follows the pattern outlined in John Shook’s MIT Sloan article “How to Change a Culture: Lessons from NUMMI”. Shook surmises it’s much more difficult for an organization to think its way into acting than to act its way into thinking. By approaching transformation from a daily behavior standpoint, the change is baked directly into the DNA of the organization and backslides are much less likely.

When we first deployed a lean framework to Nationwide’s Application Development Center, our managers were supporters but ultimately didn’t change the way they worked. This caused confusion within our teams as staff moved toward collaboration, empowerment and problem-solving while the management team still operated in a command-and-control hierarchical style. A management team that didn’t understand how to channel the enthusiasm of the staff quickly snuffed out the initiative of our associates.

So how did we do it? We put in place processes that reinforced the behaviors desired: A focus on coaching staff instead of directing them, building problem-solving muscle throughout the organization, and getting them out of their offices and to the gemba.  We focused on daily accountability through tiered standups, visual controls and visual workflow for the work of management, and leader standard work that governed the expected behaviors.

In a subsequent blog post, learn what each of these looked like and how we implemented them. Stay tuned…

Taco Bell COO hosting exclusive chat with students Friday

When the Center for Operational Excellence hosted Taco Bell COO Rob Savage on campus last month, he told the crowd it’s important to never feel stitched into one line of work.

“You have a lot of skills you can apply to different industries in different situations,” Savage said.

Taco Bell COO Rob Savage
Taco Bell COO Rob Savage spoke at a COE seminar last month.

He would know. A graduate of Ohio State University’s engineering program, he got his start in the world of manufacturing, working as a production supervisor for General Motors. Two decades ago, he joined Taco Bell as a market manager and has risen through the ranks to oversee the operations of a chain that serves 35 million customers a week.

Savage’s undying love for Ohio State (and its undefeated Buckeyes) is bringing him back to Fisher this Friday at 9 a.m. in Pfahl Hall 202 in an exclusive chat with students, hosted by COE. Fisher offers students a wealth of opportunities to interact with successful people in the world of business – but not every chance will be as intimate as this one.

The smashing success of Taco Bell in recent years (Doritos Locos Taco, anyone?) says plenty about Savage’s skills as an executive, but his passions extend well beyond expanding the brand and driving financial success. Savage is passionate about the success of students at all levels of education – and he’s here this week because he wants to be.

Don’t miss out on this opportunity. E-mail Jackie McClure at to reserve a spot.

The waste in your walk

Hospital administrators do a lot of hang-wringing over long turnaround times for procedure and operation rooms. They not only can’t get enough procedures done, but they have surgeons waiting around, twiddling their thumbs while rooms are getting prepared for the next patient. If several procedures in a 12-hour shift are scheduled and each one takes 15 minutes to set up, hours are wasted each day. Such an organization might boast of patient-focused care, but metrics indicate quite the opposite. Not being in a position to meet customer needs can hurt all the way to the bottom line.

A spaghetti diagram can illuminate wasteful steps – actual steps – in process flow.

So how do you create the ideal flow? To start, I’ve written before about how it’s extremely important – this can’t be stressed enough – to go to the gemba and seek out the so-called motion waste. This can be done on an intricate level with what’s called a Spaghetti Diagram, a title that should be apparent by this picture.

A Spaghetti Diagram is a graphical tool that helps understand the activities involved in any process with details of the actual physical flow, or lack thereof, and the amount of traveling involved. It also highlights the flaws in the process, especially when you see how your staff is spending time in order to provide the best service or care to the customer. Unnecessary motion occurs when the operator doesn’t have everything he or she needs where needed and in the necessary amounts. This also occurs with poorly maintained equipment, a lack of standardized processes, the right metrics or no accountability. Many causes could exist, but the key is to use the diagram to work on those issues.

Here’s how to make one:

–          Before you do anything, explain to your staff why you’re there and what you’ll be doing. Address any apprehensions they might have.

–          Draw a layout of the work area you are trying study. Contact the facilities department if you want.

–          Note important landmarks where staff members move to retrieve materials or equipment and use numbers for each station or work area.

–          With a pencil, draw this movement as they go about their work from the start to the end of the process. Use different colors if more than one staff involved.

–          See patterns? Dig deeper, pull out a stopwatch and even get a measuring wheel from a hardware store to note the time and distance. Follow the worker around if need be.

–          Take those results and share your findings. Shared information helps with shared responsibility.

Now grab your pencils and get to work!

Oct. 10 webinar shows lean answer to ‘What’s the ROI?’

It’s a term I use, sometimes frivolously, in my marketing and communications strategy. It’s a pillar of business-speak. It’s at the heart of the question that could kill the next proposal you put before your boss:

“What’s the ROI?”

Courtesy VMGCinematic

In lean transformations, many of you know this question is tougher to answer. Real, sustainable change doesn’t happen in a day and it pays off in ways both visible on the bottom line and extremely difficult to quantify, such as culture.

So how do you answer the question when your impassioned case for a lean implementation is punctuated with it? Author and frequent Lean Enterprise Institute contributor Michael Ballé says the completely wrong way to do so is to say or even imply that it’s the wrong kind of question. In fact, answers exist – but you have to know where to dig for them and how to look.

Get tips on all of this on Wednesday, Oct. 10, at 2 p.m. EST via a free hour-long webinar run by Ballé. He’ll cover everything from couching lean initiatives in business terms to building teamwork on different levels of management.

LEI says interest in this one is high and we’re looking forward to discussing this topic in the future. So block off an hour on Wednesday. It is free, after all – not too shabby from an ROI perspective.

Click here to learn more and to register.

A tale of two solutions

Making the effort to understand and better serve your customer is the first step in the right direction. From there, it’s very easy to go wrong. I’d like to share a few examples of how lean thinking works – and where it can go off the rails.

A hospital I recently visited had conducted a patient survey to address difficulties they face while maneuvering the health system.  A chief complaint was difficulty finding one’s way through the hospital. This hospital’s “solution:” Hiring a concierge and using many volunteers to help patients navigate. Did this address the issue? Sure. But has the hospital addressed the crux of the problem? I don’t think so. Many organizations come up with temporary solutions to big problems that seem to correct it but really just neglect the needed fix. 

Sure, older facilities weren’t built based on how the process flows and it isn’t always possible to change design without much time, money and effort – but hiring more people doesn’t solve the problem either. I’m reminded of a story Taco Bell COO Rob Savage told in a recent visit to the Fisher College of Business for our Center for Operational Excellence. In a customer survey a few years back, the company discovered a key gripe with its food that was driving people to competitors: Its food wasn’t easy to eat on the go. Did they hire more workers to hold the food tray while customers ate their burritos? No! They developed new products, such as wraps and quesadillas, that gave a new ease to eating on the go.

Seattle Children’s Hospital used a methodology called 3P (stands for “production,” “preparation” and “process”) at its Bellevue outpatient facility to reduce patient and provider walking and wait time. This involved everyone who touched the workflow in any capacity designing a new building using paper and cardboard cutouts. In a 3P process, participants are challenged to come up with up to seven different ways of doing work, then each is scored and the winner is chosen. In Seattle Children’s case, the result was an efficient self-directing visual layout with almost no wait time, little walking, better communication among providers and staff, an airtight inventory system and very proud employees. 

Seattle Children's Hospital
Seattle Children’s Hospital completely revamped its process for patients to create virtually no waiting time

Meeting you customers’ needs doesn’t mean bulldozing the building and starting all over. Start on a smaller scale by focusing on just one department or area. Understand that workflow and pinpoint the waste. Use a spaghetti diagram to highlight the movement waste. Head to a conference room or empty parking lot and get teams to brainstorm multiple options with paper or cardboard. This is a highly charged and very involved process that’s invigorating for all participants. And most importantly, it creates that sense of process ownership that fuels the motivation to keep things running smoothly. That’s lean.