Under Pressure: Manufacturer WillowWood Survives, Thrives in Wake of Court Setback

ryan arbogast willow wood
Ryan Arbogast is the fourth-generation leader of COE member WillowWood, which joined the center in 2006.

Looking back at a storied history that stretches back more than a century, Ryan Arbogast remembers Nov. 1, 2013, as a low point for the company his great-grandfather founded in 1907.

Arbogast, fourth-generation president at prosthetic product manufacturer WillowWood, sat anxiously in a Florida courtroom and listened to a judge deliver the most devastating blow yet in a legal battle that spanned nearly a decade – and, up until recent years, seemed to be moving in their favor. WillowWood, the judge said, was blocked from selling its Alpha® Classic and Hybrid Liners and sleeves because a key ingredient was found to infringe on a competitor’s patent.

Arbogast remembers picking up the phone and calling company headquarters, tucked away in a village southwest of Columbus, Ohio, to deliver the news.

“I was totally blindsided,” he said. “I hadn’t foreseen any possibility we’d have this product taken away from us.”

Calling the now-halted Alpha Liner merely a product is an understatement. In the 17 years since its introduction to the market, the sock-like sleeve that slides over a residual limb to make amputees’ prosthetics fit comfortably had become WillowWood’s lifeblood, composing nearly three-quarters of the annual revenue for a company at the lower end of middle-market range.

The product that helped triple WillowWood’s revenue and work force in just a generation was packed up and bound for a storage facility. What remained were nearly 200 employees wondering what might happen to their jobs come Monday and a cavernous company warehouse that had been bursting at the seams just hours before.

“You could hear your voice echo in that room,” Development Engineer Chris Kelley said.

Almost instantly, WillowWood was left with a gaping, multimillion-dollar hole in its top line that wouldn’t be plugged by legal appeals or going on record to “respectfully disagree” with the decision.

Arbogast and his team needed to act, and the next steps they took charted a path that helped WillowWood survive, thrive and innovate without a pink slip in the process.

A century of growth

William Arbogast, WillowWood
Company founder William Arbogast

WillowWood itself sprang from an act of innovation in the face of adversity. Ryan Arbogast’s great-grandfather, William, survived a railroad accident but emerged a double amputee, albeit one unwilling to settle for the poor prosthetic options before him. He took it upon himself to carve prosthetic legs that best met his needs using wood from willow trees on his farm, giving the company its name and first burst of inspiration.

A direct precursor to the Alpha Liner WillowWood would introduce at the end of the century came in 1921 with the rollout of the Sterling Stump Sock, a wool prosthetic sock the company says quickly became the industry standard.

The next 70 years of growth for WillowWood, then named Ohio Willow Wood, weren’t without pivots and setbacks. The company turned to making polo mallets and balls at the height of the Great Depression in order to survive, and a decade later made parts for airplanes and boats during World War II. Major innovations came from the 1950s through the 1980s as William Arbogast’s children and grandchildren introduced new prosthetic feet and knee-shin units to the industry.

The last drastic change for WillowWood came in 1996 with the introduction of the Alpha Liner, which prompted the company to shed its profit-leading wool sock department and focus the bulk of its research and development resources on the product. The comfort and performance of the Alpha products hit the market 10 times more expensive than its wool-sock predecessor – not that the industry minded.

“That changed the company entirely,” Arbogast said. “Demand was so huge we threw everything into production capacity and maintaining quality.”

Payroll more than doubled in several headcount increases, and sales followed right along. This secured for WillowWood a market niche ahead of very small, mom-and-pop operations but still a fraction the size of some overseas manufacturers.

“We had the innovation and the engineering technique to command a price that keeps a small company like us profitable,” Arbogast said.

On the heels of its product successes and growing intellectual property portfolio, WillowWood made a formal commitment to process improvement in 2006, when it joined the Fisher College of Business Center for Operational Excellence at The Ohio State University.

Amid this growth, small licensing skirmishes weren’t uncommon for WillowWood, but it was a pair of patent-related lawsuits the company filed in 2004 and 2005, respectively, against St. Petersburg, Fla.-based competitor ALPS South that set its future troubles in motion. Leaders say the lawsuits created few ripples at the company in the ensuing years, but that was before the tables turned.

WillowWood eventually found itself on the defensive, losing a 2012 jury trial sparked by a lawsuit ALPS filed and, in March 2013, facing a court order to halt selling Alpha® products containing a specific formula whose ownership was in dispute. That ruling marked the first true disruption to WillowWood’s day-to-day operations, but paled in comparison to the broader November order that pulled the plug on all Alpha Liner products containing the formula in question.

“I called a group of people into a big conference room and told them to shut everything down,” Operations Manager Mark Alter said. “We’re done.”

Decision time

For front-line employees, the ongoing legal battle to which they paid little notice over the years was very much on their minds.

“The biggest question on the floor at the time was, ‘Are we gonna survive this?’” Chief Financial Officer David Pierson said.

Of the options before WillowWood, leaders immediately took the quickest, easiest route off the table: Layoffs.

“We said right off, ‘We’ll do everything possible not to lay people off,’” said COO John Matera. “It’s not part of our culture. We don’t do it.”

WillowWood instead turned to triage on its revenue side, its next steps a blend of survivalist-minded innovation and a determined effort to continue holding fast to the customer-centric values its founders established a century ago.

That determination was at once noble and pragmatic: The Alpha Liners contained what’s called a thermoplastic elastomer gel that gained traction among customers for the soft, comfortable barrier it created for a residual limb against the prosthetic. That wasn’t the case with silicone-coated liners, another WillowWood offering that contributed but a fraction of Alpha’s haul to the top line and appealed to the minority of customers seeking a sturdier, harder material.

Silicone liners weren’t seemingly the answer to WillowWood’s very big revenue problem, but its R&D team saw in them a lingering possibility: Was it possible to align one to customer demand and save sales in the process?

An under-development silicone liner that featured a softer-grade silicone proved to be the answer. One problem still, however, stood in the way: That liner didn’t make it far enough through the R&D pipeline to have shop floor-level tooling designed, and WillowWood lacked the production capacity to install new equipment. Luckily, the company had plenty of very concerned employees ready to save their jobs and their company. Within a few weeks of the court ruling, company leaders sought volunteers for a second shift and had it up and running, employees more than willing to overhaul their own schedules to help WillowWood through the tough stretch ahead.

That launched the fastest, most fraught R&D project in WillowWood history.

All hands on deck

Call it semi-organized chaos.

WillowWood employees plunged themselves headlong into development of a soft, silicone-based liner and designing – virtually from scratch – the proper tooling for a notoriously complex process. Employees turned out one newly designed production tool a week, scavenging equipment originally purchased for other products and retrofitting shop-floor tools.

“It was a full-court press with everyone involved in designing the tools and making them,” Kelley said.

What was once guided by written documentation and established processes was being determined on the fly, problems in the morning shift becoming solutions in the early hours of the afternoon.

“There was a lot of waking (R&D) people up in the middle of the night,” said Randy Elzey, supervisor of the Alpha line.

Elsewhere in WillowWood’s headquarters, silos were falling out of necessity. The company’s custom fabrication and Design group moved into production on newly formulated liners. Front-office staffers pitched in on the production floor.. Arbogast himself spent time on the factory floor running electrical wires.

“Everybody pulled down their own piece of the action,” Chief Marketing Officer Doug Kreitzer said. “We moved a lot of people around and there was a real sense of camaraderie.”

WillowWood
WillowWood’s Express Liner, the product of the company’s efforts in early 2014

It paid off. Within a few weeks, WillowWood successfully developed the soft-silicone Express Liner with a limited supply set to leave the building on Dec. 1, exactly a month after the court decision. The company strategically designed liner profiles that matched the largest swath of customer demand and, in the following weeks, moved on to other configurations to align supply with as much of the market as possible.

Wasting no time, WillowWood in December began developing a different kind of thermoplastic elastomer gel that stayed outside the restrictions of the patent ruling but would be attractive to Alpha customers as well. This brought two potential new products into the R&D pipeline, but one very big challenge to the shop floor: Liners with different fabrication methods that literally clashed like oil and water.

Among many other differences, silicone liners cured by a drastically different process than the in-development thermoplastic elastomer liners, dubbed K12 and K27. In the frenzy to turn out the Express Liner, engineers cleverly retrofitted production equipment production equipment to have both in process on the floor.

The company’s decision to run development of two similar thermoplastic elastomer liners at roughly the same time eventually became fortuitous. The K12 Liner made it to the customer testing phase by early in 2014, but initial feedback pointed to durability problems, prompting the company to scrap it and pivot to K27, losing little time in the process.

“Had we not identified the K12 problems through testing, we would have been in trouble,” said Jeff Doddroe, the company’s new products director. “We were very fortunate to be able to do that switch in a very small time window.”

WillowWood may not have batted 1,000, but the upheaval to its long-established R&D processes was unprecedented and transformational. The company typically begins with a New Product Development department feasibility study and moves to finding materials, shaping processes and developing prototypes for internal validation, before creating several iterations and eventually involving all WillowWood departments as market arrival nears. From the first stirrings of a new product through training, manufacturing and shipping, the process can take anywhere from nine months to two years.

It’s a tried-and-true approach, Doddroe, “but it’s also mundane.” The more software development-like approach to WillowWood’s rapid-fire Express Liner rollout, in fact, wasn’t entirely unwelcome.

“If we say we’re going to make a silicone liner,” Doddroe said, “we’re talking a high 90th-percentile that it goes to market. If we were to work the way we did on this project, we’d have a higher percent fail, but this really worked out for us.”

WillowWood leaders acknowledge this drastically sped-up process didn’t merely involve working faster. While entirely confident in the safety and quality of the finished product, they say risk-taking – heretofore an under-exercised muscle inside WillowWood’s walls – played a key part.

“As far as I’m concerned, though, we had no choice,” CMO Kreitzer said.

Voice of the customer

Customers responded as well as – or better than – WillowWood could have expected in light of its troubles.

Sales initially were decimated but climbed to hover about 50 percent below prior-year revenue through the quarter following the court decision. A prosthetic foot product whose sales soared beyond expectations, also helped cushion the blow.

Linda Wise, WillowWood’s sales and marketing manager, credits much of the company’s survival in those days to the relationships it has built over the years with its 19 distributors in 18 countries across the globe.

“There’s a lot of history, a lot of trust, between us and these companies,” she said.

Still, it required some difficult conversations with distributors and end customers, Wise said.

“They stuck with us, but we didn’t sugar-coat it,” she said. “We continued to try and partner with them and find solutions for patients, whether they involved us or not.”

WillowWood
WillowWood employee Paul Davis, inspecting a recently manufactured liner.

WillowWood’s sales in the spring of 2014 indicate patients’ solutions very much involved them. The April 2014 release of the company’s innovative, heat-absorbing Alpha SmartTemp Liner and the K27 formula liners buoyed sales right back to year-ago levels – even beyond.

“Our reputation, and that relationship base we built, saved our business,” Arbogast said.

The company’s remarkable customer retention speaks to a bond, the effect of which extends well beyond the walls of WillowWood’s sales and marketing department. In fact, leaders say, it contributed to the all-hands-on-deck attitude seen throughout in the roughest days. Many prosthetic businesses began just like WillowWood, driven by a tragedy or disability that lends immense personal significance to the work at hand and the customers whose lives it impacts. WillowWood’s slogan calls its work nothing short of “freeing the bodies and spirits of amputees.”

“There’s a personal investment in what we make here that our folks believe in,” Chief Administrative Officer Dave Curtis said. “We’ll have amputees come here, we have test patients running all over the place. It’s very easy to know you make a difference in what you do.”

Looking back

A year out from that game-changing court decision, sales have leveled off to a predictable pace unheard of in the dead of last winter, though they’ve retreated from the highs seen in the wake of the Alpha SmartTemp Liner’s rollout.

“We introduced new products, made a lot of changes and a lot of additions,” Product Release Director Pat Thomas said. “We’re kind of on clean-up duty now to get our product line back in shape.”

Meanwhile, at least one major unknown in the wake of the case has come to a conclusion. The WillowWood competitor’s liner gel formula patent expired in August, clearing the way for the company to once again legally make the liner once so popular with customers. The company went back into production on the liners in late September, while sales began in early October.

Now, the company is left with a full production schedule and many lessons learned.

One of the most transformative effects of the court decision was the collaborative environment that developed among employees, many of whom found themselves at least temporarily in new departments and roles. That exposed an opportunity and a flaw, Thomas said.

“We need to emphasize cross-training more,” he said. “This really exposed a lot of holes in our processes, especially ones that overlapped.”

The events of the last year also have Arbogast completely reevaluating the company’s approach to developing and protecting products.

“We can’t rely on intellectual property like we did,” he said. “There are a lot of loopholes in the U.S. legal system, and it’s not one that’s going to protect us. We just need to stay ahead of the competition by a generation or two.”

To do so, leaders agree a new approach to R&D is in store. In the years WillowWood turned out the liners at a breakneck pace, the company added more and more testing to the R&D process. This was by no means required by federal safety standards – as an externally worn medical device, prosthetics are comparably low-regulated – but rather an effort to keep aligning with the product quality the market appeared to demand.

“We discovered we can move a lot quicker than we ever thought we could,” Operations Manager Alter said.

Not that the pace seen amid the frenzied days of silicone Express development is where WillowWood wants to be.

“We don’t want to stay where we are or go back to where we were – but we do need to pick a point in between,” Arbogast said.

Looking ahead

WillowWood
COE Executive Director Peg Pennington, left, running an operational excellence training session for WillowWood staffers.

The future for WillowWood, leaders say, will bring changes inside and outside the company’s four walls. Not the least of them is a much-needed culture change Arbogast said he was rolling up his sleeves to lead just as the company’s legal troubles peaked.

“I took over in 2010 and spent two years positioning the culture and the employee base to be more strategic in our planning, to think further out, and November (2013) hit just as that machine was starting to run,” Arbogast said. “We had a hundred-year-old company with an ‘If it’s not broke, don’t fix it’ mentality, and now that’s completely gone.”

One crucial area of future change for WillowWood is its product spread, which leaders admit relied entirely too heavily on liners. Arbogast says he hopes to diversify product mix through a number of new opportunities, which range from a high-potential software package for patient care to its LimbLogic vacuum system that helps amputees ensure their prostheses don’t come off.

“We want to pick those niche problems and attack them,” Arbogast said.

A natural progression from a broader product mix is a broader sales footprint, which the company is pursuing as well. Plans are in the works for an expansion to the South American market this year.

“The more sales we have internationally, the better off we are,” CMO Kreitzer said.

Wherever these paths take the company, leaders say they hope WillowWood can maintain the urgency and energy that carried them through those unprecedented rough waters – with growth and innovation, not survival, as the driver.

“It made for some exciting days, to be sure,” Thomas said. “I just don’t know I’d want to do that again.”

Several COE members earn perfect score for LGBT equality

Coming off two recent conferences that repeatedly emphasized the importance of “people over process,” I’m reminded again of some words shared by Helen Turnbull, one of the keynote speakers at COE’s spring Leading Through Excellence summit.

Turnbull reminded us that “we’re all looking at the world through the eyes of our expertise, but the problem is we don’t know what we’re not seeing.”

These so-called unconscious biases that arise innocently can, in extreme cases, create an unsafe workplace, but one a day-to-day operations level simply make decision-making more difficult as those who are different than the norm – be it age, race, gender, sexual orientation – find ways to fit in and resist speaking up.

hrc
The Human Rights Campaign releases its Corporate Equality Index once a year.

With a growing recognition that diversity and inclusion is an important aspect of business success, it’s encouraging to see several COE member companies score a perfect 100 on the Human Rights Campaign’s annual ranking of the best businesses for lesbian, gay, bisexual and transgender equality. Those perfect-scoring members are:

  • Boehringer-Ingelheim Roxane
  • Cardinal Health Inc.
  • Capital One Financial Corp.
  • Huntington National Bank
  • Nordstrom Inc.
  • Nationwide
  • Owens Corning
  • Target Corp.

These companies were among nearly 400 nationwide that notched perfect scores for factors including: Featuring sexual orientation / gender identity in equal employment opportunity policy; providing equivalent employment benefits to same-sex partners; having transgender-inclusive health-insurance coverage policies; having an “organizational LGBT competency” that includes training and employee resource groups; and having a public commitment to the LGBT community.

Click here to read the full report.

November conference in Columbus explores intersection of Lean, Agile in IT

For two methodologies that can drive efficiency and change inside an organization’s information technology ecosystem, Lean and Agile seem to raise a lot of questions as well.

Is it an either-or proposition? (No.)

Are they one and the same? (No.)

Is there a way to leverage both to improve IT effectiveness? (Absolutely.)

leanintoagileThe Center for Operational Excellence is teaming up with the Central Ohio Agile Association to explore the intersection between both with the first-ever Lean Into Agile conference, set for Friday, Nov. 7, at the Fawcett Center on Ohio State University’s campus. Lean Into Agile will bring together a mix of industry leaders, sought-after speakers and faculty to highlight how lean and agile principles can be applied in the IT setting. Featured keynotes include Michael Sahota, author of An Agile Adoption and Transformation Survival Guide; Mike Orzen, co-author of Lean IT; and Michael Keller, executive vice president and CIO at Columbus-based insurer Nationwide.

In addition to the trio of keynotes, Lean Into Agile will feature three rounds of breakout sessions throughout the day, a mix of consultants, coaches and business leaders specializing in Lean IT, Agile or the successful combination of the two in an organization. This diversity enables attendees to “choose your own adventure” throughout the conference, filling in knowledge gaps and gaining a clearer, broader picture of the underlying process improvement principles that drive IT success.

Many companies today simply equate Lean IT and Agile, a common misconception but one that can lead to crucial missed opportunities, said Tom Paider, associate vice president for IT Build Capability at Nationwide and champion of COE’s IT Leadership Network.

“It’s not enough to focus on the creation of Agile teams,” Paider said. “In order to scale agile, there are so many other aspects that come into play: The management system, development of people, problem solving capability, and setting the correct expectations. Lean gives us an avenue to create the whole system, from purpose to process to people.”

Featured breakout session speakers throughout the day come from organizations including Fortune 20 health-care distributor Cardinal Health, software developer CI&T, Columbus IT solutions firm Pillar, Ohio State, Lean/Agile consultancy LitheSpeed LLC, and the State of Ohio Department of Administrative Services, among others.

Check out the list of keynote and breakout speakers at leanintoagile.org, where registration is open as well. Conference admission, which includes breakfast, lunch and a post-event networking happy hour, is $224. Group sign-ups of five or more people receive a discount of $45 per person.

Register for the event here.

Cardinal Health’s Click honored with prestigious Founder’s Award

A longtime Cardinal Heath employee who’s a familiar face at Center for Operational Excellence events has been presented with the company’s highest honor.

click, charlotteDublin, Ohio-based Cardinal Health, a COE member since 2006, this spring announced that Charlotte Click, manager of manufacturing planning, was one of four winners of the Robert D. Walter Founder’s Award. The honor, named after the health-care distribution giant’s founder, is given to employees who exemplify Cardinal’s values and inspire others.

Click was one of four winners of the Founder’s Award, which also went to Daniel Bishop, director, Financial Planning and Analysis in Cardinal’s Houston office; Dianne Radigan, VP, Community Relations; and Michael Scrase, VP, IT Management. Winners came from a pool of more than 250 nominations and 15 finalists.

Click has spent a decade at Cardinal, which she joined after working for Constellation Energy Group in Baltimore for 13 years. At Cardinal, she has held a wide range of roles, including a two-year stint as a Black Belt with the company’s Operational Excellence team. She’s heavily involved in the company’s Employee Resource Groups and says she has a special passion for the Equality Network, a group for LGBT employees and their allies. A Pittsburgh native, Click and her husband, Brian, have five children in their blended family.

“I feel like my time here has mattered and I have been able to enrich lives,” Click said upon receiving the honor. “To me, that is the ultimate achievement.”

Leadership development, innovation lead roster of April summit’s breakout sessions

With less than four weeks to go before we kick off our second-annual Leading Through Excellence summit, we’ve unveiled the full list of breakout sessions you’ll have the chance to experience throughout the day on Thursday, April 10, and Friday, April 11, in Columbus, Ohio.

The full list is available at our website, but here’s a quick look at some of the sessions available:

leading through excellence logoBehind the scenes at GE Aviation – It’s tough for many organizations to keep a fresh pipeline of leaders with the right problem-solving skills and cross-functional capabilities. Rick Guba, a Master Black Belt at GE Aviation, will offer an inside look at the company’s successful accelerated development process, which links skills and hands-on experience for a best-in-class learning model.

Kaizen 101 – Looking for a crash course in hosting a kaizen event week? Whitney Mantonya, owner of Collaborative Lean Solutions, will walk attendees through the purpose, flow, and structure of one, offering up a primer on basic tools and concepts applicable to all such events.

Leading from the middle – True lean success needs support from the top, but few organizations start out with this luxury. Ted Stiles, a partner with lean executive recruiting firm Stiles Associates, examines how creative mid-level leaders can navigate this landscape and the skills they must employ along the way to boost leadership engagement and influence without authority.

‘Buying’ a lean culture – Harvard University’s Beth Israel Deaconess Medical Center was showered with 90,000 employment applications annually, but they needed a new, efficient way to determine which potential hires would thrive in a lean environment and be an integral part to its ongoing success. Alice Lee, vice president of business transformation at Beth Israel, will share the pre-employment assessment tool that was developed and implemented.

Innovation and the element of surprise – Award-winning Fisher professor and researcher Aravind Chandrasekaran will share his research with more than 30 high-tech organizations into the “disruptive innovation” that has dealt a blow to some companies (Polaroid) and, with the right strategy, allowed others (IBM) to thrive.

Paper or plastic? – Through an interactive game that challenges preconceived notions about the environmental sustainability of products in our everyday lives, Fisher Asisstant Prof. Gökçe Esenduran will introduce the concept of the life-cycle assessment (LCA), a powerful tool to evaluate a product from the cradle to the grave.

And there are a dozen more where that came from. Register now before pricing increases April 1!

Giant Eagle, Marathon Petroleum leaders: To get better, learn from the best

The two speakers for the Center for Operational Excellence’s Feb. 14 seminars couldn’t have been from two more different companies, but both emphasized a crucial truth about the journey of process improvement: You’re never too good to learn – or borrow – from others.

John Lucot
John Lucot

Take Pittsburgh-based grocery chain and COE member Giant Eagle Inc., whose President and COO, John Lucot, spoke to our crowd of more than 100 members and guests. The company has been in existence for more than three-quarters of a century, but Lucot said recent years have marked “the most exciting time in the history of our company.”

Emerging from an economic downturn in which consumers tightened the purse strings, Giant Eagle has developed new formats and transformed the customer experience. For proof, look no further than its Market District location a few miles from Ohio State University, which has become the unofficial epicenter of its neighborhood in a few short years. This has happened all while the company has aggressively maintained focus on health and safety and implemented lean principles throughout the supply chain. Lucot told the crowd that Giant Eagle has drawn inspiration from organizations ranging from the Cleveland Clinic – a gold standard in patient experience – to Alcoa, a fellow Pittsburgh company whose safety centric turnaround under former CEO Paul O’Neill is the stuff of legend.

And while Giant Eagle started down its road to operational excellence with an eye on removing cost and boosting efficiency, the balance sheet doesn’t rule the day, Lucot said.

“We never, ever talk about the financial impact of the things we do,” he said. “We are unwavering in our commitment to health and safety, and no one in our organization has the right to put money or anything else above those efforts.”

It’s that same focus on Giant Eagle’s employees and its customers that underlies a comment Lucot made that’s destined for the whiteboard: “We have no right to ask people to do things that don’t add value.”

George McAfee
George McAfee

Speaking later in the day, George McAfee, marine logistics manager at Findlay, Ohio-based Marathon Petroleum, shared the challenges posed to knowledge management and transfer in a work force with a widening generation gap and a growing share of over-55 workers.

With those dynamics, McAfee said, it’s even more crucial to develop standard procedures to capture and communicate processes so a company’s mission, vision and values don’t get muddled over time.

And echoing Lucot, McAfee said benchmarking – even outside one’s industry – is key to finding the right path.

“You must be willing to admit someone else might be better at what you’re doing,” he said.

This article appears in the March 2014 edition of COE’s Current State e-newsletter. Have a colleague who should be receiving this e-newsletter? Contact Matt at burns.701@osu.edu.

Chrysler exec, Cardinal CEO headline COE’s Nov. 22 seminar

Time and time again, we see evidence that the companies most successful in driving real, lasting change throughout their organizations are the ones that don’t treat operational excellence as a project – they treat it as a large-scale culture change that’s always a work in progress. We’re thrilled to be featuring for our final quarterly seminar of the year two fascinating examples of this: Chrysler Group LLC and Cardinal Health, the latter a member of our center since 2013.

Opening the seminar from Chrysler is Mauro Pino, who leads the NAFTA Manufacturing and World Class Manufacturing arms of the automaker. Since its 2009 alliance with Fiat, Chrysler has made huge strides in financial performance and industry market share – and part of the credit for that goes to its own renewed commitment to cutting waste while improving safety and quality. The operational excellence system it has deployed, dubbed World Class Manufacturing, focuses on giving workers hands-on experience in problem solving that they can take back to the company’s plants and apply immediately.

As it continues to roll out WCM, Chrysler means serious business. The company last year opened up a 25,000 WCM Academy in Michigan where more than 3,000 workers across North America were trained in 2012 alone.

Our featured afternoon presenter is George Barrett, chairman and CEO of Dublin-based pharmaceutical and medical supply distribution giant Cardinal, a more than $100 billion-a-year operation that ranks in the Fortune 20. Over the past four years, the company has increased its position in hospitals, clinics, surgery centers and specialty practices, doctor’s offices, and the home. Its journey to make health care more cost-effective and simultaneously drive balance and growth has included operational excellence as a key component of cultural transformation and a foundational capability of its go-to-market strategy.

Barrett will discuss the company’s approach to creating a culture of excellence and creative value across the health-care continuum in what is a rapidly changing landscape.

As always, the morning session of our seminar is open only to employees of our COE member companies, while the afternoon session is open to members and guests.

Join us!

Health care: Too much on the plate?

Earlier this month, Shingo Prize-winning author and Master of Business Operational Excellence instructor Beau Keyte wrote a fascinating article on the Huffington Post titled “The Silent Killer of Health Care Transformation: Being Overburdened by Too Many Choices.” This addresses a key concept in lean called “muri,” or overburdening.

Keyte defines overburden a phenomenon where equipment or people are pushed to run at a harder pace and with more effort than is appropriate.  Using the analogy of going to a Brazilian steakhouse faced with multiple choices, with an eager waiter waiting for a signal from you to bring more varieties of meat, Keyte makes the point of how health-care organizations are laden with a vast range of priorities. As a customer at the steakhouse you can choose what you want to have on your plate but leaders in health-care organizations do not have the choice. Multiple stakeholders, internal and external bombard the leadership with ideas that are important to them with a very restricted timeline. The executives take on the burden of execution of these great ideas to the employees in the organization that are already overburdened with a previous task list.

Similar to the customer in the steakhouse who leaves half-eaten good food on the plate to try the new kind of meat, the employees leave projects halfway to bite on the new initiatives. Due to lack of time and resources, the new initiatives do not get the kind of attention they need and this nips the possibility of transformation in the bud. How do you address this problem? Keyte emphasizes that it is the leaders in the organization who can LEAD the organization on a path that reduces the burden – but how?

The first thing is to focus on the real stakeholder, the patient. Think about how the initiatives suggested by the other stakeholders impact the patient. Would the initiative result in the right outcome for the right patient at the right time? Do the initiatives align with the strategic goals? Do you have the human resources to work on these initiatives? Do you need to do all the initiatives? What are the few things that you NEED to get done to meet the three to five most critical goals this year? Could you drop or delay some? By answering these questions, leaders can dedicate the available resources to only the critical projects. This way, employees can spend their time wisely while providing patient-centered care.

The second thing the leaders can do is to think long term instead of saying yes to all the projects and trying to instantly gratify the stakeholders.  However, it is important to think forward and pick three to five strategic initiatives to work on in future and plan on carving out capacity to take these on.

Keyte puts it well in the last paragraph: “Like all silent killers, overburden sneaks up on you and your organization. Learn to sense it, see it, analyze it, and deal with it to help your organization not only survive, but thrive.”

Toyota presentation highlights lasting impact of lean transformations

Electrified.

That’s the best way to describe how our Center for Operational Excellence members and guests left our seminar this past Friday following a rousing, inspiring presentation from Jamie Bonini, general manager of the Toyota Production System Support Center.

Bonini, speaking at the Sept. 13, 2013, seminar.

Bonini powerfully made the case to a crowd of nearly 150 that the guiding principles of operational excellence can make a lasting impact anywhere – and at COE, that’s what we’re all about.

Bonini illustrated the Toyota Production System implementation strategy TSSC has thus far used with more than 200 organizations, which range from manufacturing – a classic setting for lean implementation – to the more unusual nonprofit realm. Roughly 40 of these projects are under way in a normal year for TSSC, which has been around since 1992.

A deeply compelling case study that attracted attention earlier this year in the New York Times involves TSSC’s work with the Food Bank for New York City, where wait times for meals have plummeted and efficiency at the food pantry has skyrocketed. Check out a video of TSSC’s work with the food bank here.

What resonates from this, and other videos from TSSC, is not only the success of the transformations but the passion that spreads like wildfire throughout the organizations they work with. My favorite part of the Food Bank video comes about 11 minutes in, when Teisha Diallo, program director Project Hospitality unguardedly voices the thrill of seeing the food pantry line running much more efficiently.

“When I come around that corner, the line is gone, and I’m like, ‘Yes!’” she exclaims.

Not that getting there is easy – and that’s where Bonini imparted some valuable takeaways on starting a transformation at the right time, in the right way, and with the right leaders on board. His most compelling advice came when he said it’s not a crime to reschedule a lean rollout if the time isn’t right. Often, Bonini said, the lack of an underlying drive to have a problem-solving culture can be a holdup – or a deal-breaker if it isn’t resolved.

“If you’re not willing to build an organizational problem-solving capability, then don’t bother (with an implementation),” Bonini said. “It’s often a very difficult missing element from what I see (with organizations).”

Check out more photos from Friday’s seminar here.

Are your meetings a waste of valuable time?

itln crowd

McKinsey & Co. Partner Krish Krishnakanthan shared a number of sharp insights about the application of lean principles to the world of information technology, but what seemed to resonate the most were his thoughts on how we view two very important features of any organization: Meetings and managers.

krishnakanthan mckinseyMeetings, Krishnakanthan (pictured) told a crowd of 80 at last week’s IT Leadership Network forum, often serve the function of an all-hands-on-deck “firefighting” session. Here, issues that could be resolved on individual team members’ time instead are tackled en masse, contributing very little value or eroding what value there is.

“Staff meetings truly have become problem-solving meetings, not status-reporting meetings,” Krishnakanthan said.

Check out photos from the event here.

Where organizations often fail to contain much-dreaded waste in processes, he said, is in firmly establishing objectives among individual team members and leveraging “huddles” or meetings for valuable communication – not triage.

This same attraction to firefighting, Krishnakthanthan said, has seeped into the role of managers. These leaders, he said, should find themselves coaching their teams to develop the skills they need to solve problems – not solve the problems themselves.

“Most managers, though, would love to just solve the problem,” Krishnakanthan said, “and they get rewarded for this. A reward system must be built to reward really good problem solvers, not crisis managers.”

The key, he said, is to be a leader who knows how to ask the right questions, not jump to provide the answer.

Krishnakanthan was the featured speaker at COE’s sixth forum in its IT Leadership Network series, which began with a visit from Lean IT co-author Mike Orzen in April 2012. Check out go.osu.edu/ITLN for a look at past speakers and our upcoming events.