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…

A lean, mean, car-making machine

I’ve heard and read so much about automobile manufacturing facilities and assembly lines but never had a chance to actually see one until last Friday, when I got a chance to visit Honda’s factory in Marysville.

In the remarkable facility I saw, what used to be a hub for manufacturing motorcycles has been converted into a car-making operation – and despite all of the intricate work going on, its cleanliness was astonishing. Hallways and storage areas were clearly demarcated, while yellow stripes separated pedestrian areas from space for forklifts and trains. Raw materials are supplied in totes in the same way they’re used in the assembly lines, leaving no need for boxes or wrappers. Once used, they’re sent back for a refill. How lean is that?

Material handler
A material handler whirs past in Honda’s Marysville manufacturing facility

At the Marysville facility, workers in both shifts turn out a car every minute. In my mind, that seems like a lot of rushing, but I was surprised by how calm the assembly line really was. Every operator or group of them has a designated area on the assembly line. Every minute, as a car arrives in that area, they perform up to five activities. The car moves on to the next area, getting built bit by bit by multiple operators. A few notable characteristics:

  • Operators had all the tools that they needed right where they needed it. 
  • Parts were lined up in the same sequence as the cars arrived, i.e. red-colored door handles were ready for red cars, silver for silver cars, placed within arm’s reach.  
  • A material handler, or “water spider,” went around every 90 minutes to check on what was used up and deliver what was needed. I didn’t see a single operator searching for supplies.
  • The team leader stays in the vicinity so that if the operators need help, they are right there to assist.
  • Electronic visual boards indicated what was the expected and actual production. This gave real-time feedback to the operators and managers. If actual production was slower, the manager could start calculating and planning the number of hours and staff for overtime.
  • To break the monotony of repetitive tasks, operators switched areas in regular time intervals.
  • Changeover time on the assembly line: Zero minutes. It didn’t matter what vehicle was being made at any given moment.

 Buried in these observations are hallmarks of lean thinking that could translate in their own way to your organization.

 

Aggreko runs into face of disaster while others flee

An interview I conducted a few weeks ago with an executive at British temporary power generation company Aggreko was a little more complicated than your standard call. David Campbell, who worked with a team on a remarkable project you’ll read about soon in our newsletter, was on assignment in Africa for Aggreko, a Center for Operational Excellence member. After arranging a time that split the time-zone difference and setting up the conference call, I was horrified when the signal dropped mid-conversation.

Reconnected again, I told David I wasn’t sure what happened. Had I pressed a button? Had the signal faded?

“Africa happened,” he said.

Aggreko, at any given time, is at work providing generator power all over the world, ranging from major sporting events to mines and in the wake of devastating natural disasters. In a fantastic interview with CEO Rupert Soames in the U.K.’s Telegraph, he recounts his team’s arrival in Japan three days after the tsunami. The reporter also poses a provocative question: When disaster hits the news, “does a little cash till ring in his head?”

“No. Naturally my thoughts go out to the full horror of the event,” Soames tells the reporter. “And the next thing is we book a ticket.”

One thing Aggreko can’t complain about is having a boring CEO. Winston Churchill’s grandson, Soames recounts once having DJ’d the engagement party for Prince Charles and Lady Diana and tells the reporter his plans for the evening: “Take my ferrets to Hyde Park and see if I can catch a rabbit.”

Aggreko’s next big gig is the London Olympics this summer. The company will be providing all the power that isn’t taken from the nation’s grid. That’s a giant leap for a company that only several years ago had its stock trading on the London stock exchange for the equivalent of a few dollars. Its stock today converts to nearly $40.

We’re confident at least a small debt is owed to Aggreko’s relentless pursuit of operational excellence – and we’re happy to help.

Akron Children’s cardboard ward makes headlines

How many times have all of us gotten that bright idea, mapped it out in our minds or on paper and then watched in horror as its real-life execution goes terribly wrong?

When it’s a romantic dinner or a driving shortcut, all that’s lost in the process is a little dignity. When it’s an entire ward in a pediatric hospital, the stakes are higher and the cost could be lives. I’m entirely unashamed to brag, then, that some of our Master of Business Operational Excellence graduates demonstrated their panache for avoiding a situation like that with such innovative aplomb that it garnered them ink in the Akron Beacon Journal.

ACH LogoThe article details an effort by MBOE grad Sherry Valentine and others to revamp the NeuroDevelopmental Science Center at ACH to handle more workers and cut down on patient wait times. Instead of taking plans from the blueprint to the contractor, though, Valentine marshaled a cardboard recreation of the proposed overhaul to allow employees to try it out.

A key facet of the revamp was reducing travel time as samples were moved for testing. “When lab staff tried out their initial attempts to renovate the department,” according to the article, “they discovered the changes left too little space in their work areas.”

“Sometimes, the teams have found what looks good on paper doesn’t work in real life,” according to the article.

From a lean perspective, a couple of teachable moments are at work here. In its own creative way, this mock-up operation is a kind of gemba, where management and workers can immerse themselves on the ground floor instead of a bird’s-eye view. The article also mentions that the simulation “allows the team members who will be doing to the work to be involved with designing their workplace.” Is there a better example of a no-blame, shared-responsibility culture than that?

Valentine tells the paper it’s unusual in the health-care sector for an entire mock-up to be created before construction begins. With change agents like her applying what they’ve learned at Fisher, that might not be for long.

COE member Cardinal Health gets supply chain honors

Sometimes the scope of the machine can obscure the beauty in the little cogs that make it all work. Take Center for Operational Excellence member Cardinal Health Inc. for example: It’s a $100 billion-plus company, highly profitable, one of the largest employers in the Columbus area and manager of a network of distribution centers so vast its products can reach a staggering share of hospitals nationwide in no time flat.

It’s also an extraordinarily efficient and nimble enterprise, having navigated through the recession with few bruises, shed a piece of itself to create a new West Coast entity and plotted an ambitious expansion into Asia that could pay untold dividends in the future. It’s the efficiency and its translation into high-quality service to customers that has captured the attention of the number-crunchers at research firm Gartner, which recently named the Dublin-based company the No. 1 health-care supply chain in the nation.

To reach No. 1, Cardinal moved past last year’s holder of the top spot, Owens & Minor, which slipped to No. 5 this year. Nos. 2-4, in order, were Mercy, BD and the Mayo Clinic.

It’s reasons quantitative and qualitative that got Cardinal the honors. Gartner perused data on financials and inventory levels, combining that with other survey data and peer opinions (Cardinal’s top-notch there, in specific). The company in bestowing the honor called Cardinal “a complex combination of well-connected businesses … (that) combines the varied strengths of a medical-surgical distributor, a pharmaceutical wholesaler and a large manufacturer.”

So why all the hoopla over a health-care supply chain? Gartner gets at a key distinction that strikes at the heart of why operational excellence in the health-care realm is so important: “Losing sight of the customer, in most industries, results in frustrated tweets and blog posts about a product or service that may lead to lost sales opportunities. Losing sight of the patient, however, can reduce the quality of life for particular patients and, in the worst case, can lead to the loss of life.”

So congratulations to Cardinal, an all-star on COE’s roster that recently came to Fisher to share its lean story at our Dec. 2 quarterly seminar.

A congratulations by proxy goes to fellow COE member Abbott Nutrition, whose sister pharmaceutical operation made Gartner’s top 10.

Stepping outside the COE box

Attendees of last Friday’s professional development meeting hosted by the Center for Operational Excellence can thank the executives from Cardinal Health Inc. and Starbucks Corp. for the insights they carried into the office Monday. Those of us at COE owe them gratitude for a pair of touches outside the norm for our programming that proved wildly successful.

T-shirt folding activity led by Starbucks
Seminar attendees participated in a T-shirt folding activity led by Starbucks

In the morning session, at the suggestion of lead speaker and Cardinal executive Whitney Mantonya, we devoted the entire second half of her time to a panel discussion featuring her colleagues who have helped with the Dublin company’s lean transformation. A panel on a topic featuring all employees from the same company? It isn’t something we’ve tried before and it’s not even the traditional form of a panel.  What transpired, however, was a detailed dissection of the bird’s-eye view Mantonya provided in the first half, the exact kind of sleeves-rolled-up scrutiny our knowledge-hungry members want. It seems the group’s favorite part of the morning session was the very section we didn’t originally plan.

Sometimes it doesn’t hurt to step outside the box.

That’s exactly what we did in the second half of our afternoon session as well, when we escorted the entire crowd of attendees from Pfahl Hall to the Blackwell Hotel for a hands-on T-shirt folding activity suggested and led by Starbucks that taught the basics of standard work. We’ve been hands-off with hands-on activities at our seminars before, but the overwhelmingly positive feedback (and happy faces on our Flickr page) indicate it was exactly what the doctor – err, barista ordered.

When opportunity knocks

Any time I see a great lean process at a company or in real life, it looks so natural I’m shocked it wasn’t always that way. That’s probably why I had to read a recent Akron Beacon Journal article featuring Center for Operational Excellence member Akron Children’s Hospital twice before I saw the lean thinking behind the innovation.

Akron Children's Hospital

The Oct. 30 piece by medical writer Cheryl Powell focuses on the growing importance of so-called advanced-practice providers – you know them as nurse practitioners and physician assistants – at Akron Children’s and other hospitals. This is taking place because of restrictions on resident work hours and growing demand for service. Akron Children’s, however, is using that situation to create a lean environment where ownership is shared and the blame game isn’t played. Think about that when you read the anecdotes that open the piece:

“When the medical staff executive committee helps chart the future of Akron Children’s Hospital, nurse practitioners sit side by side with doctors as peers. As the hospital’s pediatric neurosurgeon finishes a complex brain operation, he usually steps back and lets a physician assistant close the child’s head. And if a cancer patient has a problem in the middle of the night, an advanced-practice nurse or physician assistant often provides the care.”

Much of the article focuses on the promising salaries of those advanced-practitioner careers, but what struck me were anecdotes about the Cleveland Clinic, which is using those workers to help patients with less-serious problems, “which frees up doctors’ time to spend with people who have complex problems.” Sounds like standard work to me.

The results, by the way, are the true goal of any standard work implementation: Smooth flow and more time for innovation. The clinic also boasts of higher patient satisfaction and quality scores coupled with lower average stay length and readmissions.

As in any industry, sometimes a problem becomes an opportunity.