Below the equator, a classic process problem

The next time you think your organization’s process problems are so singular they couldn’t be happening anywhere else, ask Joe Langlitz and his colleagues how they spent the first month of their summer this year.

botswana students
From left: Bi, Langlitz, Goetter

Langlitz and fellow Fisher College of Business MBA students James Goetter and Wenzhao Bi closed out their first year in the program with an 8,000-mile trip below the equator to Gaborone, Botswana. They were one of eight groups of students sent overseas through Fisher’s Global Applied Projects (GAP) program to work up-close with a corporation to solve a business challenge. Sponsoring the students’ gap team was the Botswana arm of British banking giant Barclays, where Fisher alumnus Jeff Davis serves as Chief Risk Officer.

Looking back at the work Langlitz and his team completed, Davis says they’ve helped lay the groundwork for some major improvements in Barclays’ business loan approval process. Getting there, however, entailed a frenzied three-week mission to hunt down process waste that put to work what each team member brought from the classroom and enlisted the help of a few Center for Operational Excellence members, too.

‘I wanted a revolution’

Davis cut his teeth in the birthplace of lean manufacturing, working with automakers and suppliers as they applied lean/Six Sigma principles. Today he’s a top officer at Barclays Botswana, which employs 1,200 at its corporate office and 42 branches and ranks as the second-largest bank in the market.

“When I got into financial services later in life, I would see our processes through the lens of the learnings I had in the automotive industry and would get frustrated at our inability to do true lessons and root-cause analysis in our pursuit of simple, repeatable processes.”

A particular target of Davis’ frustration was the corporate loan approval process at Barclays Botswana, which could – and often did – take as few as two days but also could stretch past six months in some instances, putting average turnaround just shy of four months.

“I wanted a revolution,” Davis said. “I wanted 500 percent better.”

Project Firefly

Davis took his first steps toward a solution by connecting with the GAP program at his alma mater, eventually bringing the trio from Fisher to Gaborone and pairing them with two MBA students from the University of Botswana. The project team had zero formal corporate banking experience – and that’s exactly what Davis wanted.

“We wanted an injection of new ideas,” he said.

(From left) Langlitz, Bi and Goetter taking a break from the office at Botswana's Mokolidi Nature Reserve
(From left) Langlitz, Bi and Goetter taking a break from the office at Botswana’s Mokolidi Nature Reserve

Langlitz admits to a dose of culture shock upon arrival. Gaborone is the governmental and economic capital of a country with a fast-growing economy, but one that also still relies heavily upon mining and the cattle trade. It’s the latter – particularly their penchant for wandering onto busy roads in Gaborone – that struck the team in their early days.

“The first week we were there, it really sunk in: ‘We’re on the opposite side of the equator,’” he said.

The more time the team spent in country, however, the more familiar it became – and the more Langlitz and others saw how universal challenges such as those at Barclays are.

“They’re just like any institution,” he said. “They’re trying to figure out better ways to serve the customer.”

The GAP team and their University of Botswana colleagues took on what Barclays dubbed “Project Firefly,” an extensive effort to visualize the loan approval process flow in the form of a value stream map and, importantly, flag non-value-added elements therein. The long-term goal is to slash average loan-processing time a staggering 90 percent to only 10 days.

Mapping the process required interviewing numerous stakeholders across different offices and navigating at-times fraught situations.

“With the overall process so fragmented, teams tend to be myopic when dissecting which processes are adding to uncompetitive turnaround times,” Davis said. “We asked the team to hold a mirror up and tell our people what’s going on without placing blame, and they did a nice job of lowering defenses.”

Enlisting help

In addition to receiving regular coaching from COE Executive Director Peg Pennington, the Project Firefly team also sought insights on the challenge at hand from two member companies: Huntington National Bank and KeyCorp.

“A lot of the pain points they had,” Langlitz said, “were pain points Barclays has been dealing with.”

Jeremy Winstel, a senior manager of enterprise lean/Six Sigma for Key, said reducing customer hassle has been a regular focus for the bank in its process improvement efforts. His insights served as a key early benchmarking opportunity for the project team before and during their stint in Gaborone.

“Providing this knowledge transfer assistance has been a great way to get plugged in to Fisher and try to help out,” Winstel said. “That’s what the COE’s about, holistically.”

Kevin Plaugher, senior vice president and business banking credit manager at Huntington, also spent time walking the team through the credit approval process and imparting a key bit of wisdom:

“It’s like physics,” Plaugher said. “If you want to extend credit to the customer, there are certain things you have to do, and you can’t pretend steps in the process can be skipped or eliminated. Still, even with the most manual processes, there are tools to make it faster, simpler, and clearer.”

Langlitz said benchmarking with Huntington and Key “sent us down the right path” to ultimately making this key discovery: More than half of the time Barclays Botswana spent processing loans was non-value-added. This opened the door to substantial improvements.

Just the beginning

The Project Firefly team capped their nearly three-week stint with Barclays Botswana by reporting out their findings and recommendations to the bank’s executive leadership team and its Managing Director, the region’s top-ranking official. Langlitz said the team took particular pride in the fact that none of its recommendations came strictly from qualitative information.

“All our recommendations were data-driven,” Langlitz said. “These weren’t just because we heard someone say it was a good idea.”

The results and recommendations provided major clarity for Barclays going forward, even if Davis and his colleagues already knew process waste was a problem.

“We knew there was a lot of waste in the system, but we’d never been able to measure it,” he said. “They did a great job of taking a complicated set of data from a lot of locations and distilling it down to a very clear story to tell.”

Through the summer, Barclays Botswana began hiring additional associates and making its first strides in implementing some of the Project Firefly recommendations. Improvement efforts are set to ramp up through the fall, Davis said, for what is expected to be an ongoing process.

As for the students, Langlitz said he and his colleagues gained invaluable process improvement skills, through an unforgettable experience, no less.

“Being able to say I’ve been there, done business in a different culture, I’m a lot more comfortable now.”

For more behind-the-scenes details on Project Firefly, check out the blog the students maintained for the trip. For more details on the GAP Program, click here or play the video below:

Fisher collaboration brings op-ex tools to realm of education

An unconventional effort to reform Ohio’s K-12 education system is sending a new pack of leaders out with more than an MBA from Fisher College of Business and a certification to serve as a principal.

They can wield some foundational operational excellence tools, as well.

bright student fisher mba
BRIGHT fellow Shaun Mitchell, right, shares the results of his A3 problem-solving project.

Fisher this summer graduated 30 students as part of the BRIGHT New Leaders for Ohio Schools program after they spent nearly a year working as administrators in high-poverty schools around the state and completed an accelerated MBA program at Fisher. The program, launched in 2015 with $3.5 million in state funding and help from Fisher and the Ohio Business Roundtable, takes business professionals from a variety of backgrounds – largely non-education – and deploys them throughout the state as principals. BRIGHT fellows, as they’re called, must serve as a school administrator for at least three years after graduation.

At a presentation prior to graduation, a number of BRIGHT fellows showed the results of their work tackling the A3 problem-solving methodology, one of a few tools Center for Operational Excellence Executive Director and BRIGHT educator Peg Pennington introduced to the curriculum.

“The BRIGHT program itself is an experiment, so I thought to myself, ‘Why not do an experiment of our own here?’” Pennington said. “These problem-solving skills – A3s, root-cause analysis – are powerful tools anywhere, and I think they can really help cut to the heart of some of issues that plague our education system.”

For the BRIGHT fellows, those issues included lagging math and reading scores, a lack of collaboration between upper- and lower-grade students and educators, truancy, and discipline referrals, among others. Pennington in her classes with the BRIGHT fellows showed how the A3 and root-cause analysis can properly define the problem and, medically speaking, move past managing symptoms to truly treat the underlying ailment.

David Maile, a longtime plant farm owner who transitioned out of the business two years ago, signed onto the BRIGHT program and found himself as an administrator at Highview 6th Grade Center in the Cincinnati suburb of Middletown, where the poverty rate has jumped from 9 percent to nearly 14 percent in about 15 years. Maile leveraged root-cause analysis and A3 problem-solving to improve math scores in the school, where he said much of the challenge was in bringing a level of consistency and precision to data collection.

Other process-improvement projects were of a more qualitative nature. Jeff Greenley, a lawyer by training, worked in the Switzerland of Ohio School District in Appalachian Ohio, the highest-poverty region in the Buckeye State. Greenley’s school housed a wide age range of students that rarely interacted, in large part because they didn’t see the value in it. Greenley did.

After defining the problem via an A3 and enacting countermeasures, Greenley finished the school year with more than four in five upper-grade students helping out and interacting with elementary-age students. The A3 process, he said, was eye-opening.

“There are not a lot of tools at our disposal in education to think about operational problems,” he said. “This is a hammer we can use to hit the nail.”

Regardless of the challenge, the BRIGHT fellows discovered very quickly that data was a crucial asset in their problem-solving journey – even if it wasn’t used as such in their schools. Astrid Arca, an economist for the state of Ohio, served in the same Appalachian school district as Greenley and took on the challenge of improving reading and math schools in a student population with a high percentage on so-called individual education plans. The data needed to cut to the heart of the problem, Arca found, existed – but weren’t being analyzed to inform instructional practices.

“There was almost a fear of the data,” she said, “and most of my job was removing those barriers.”

BRIGHT leaders are hoping that spirit has a transformative effect in the schools where its graduates are heading this fall and beyond, even if the difference in background for many fellows hasn’t gone unnoticed. Deborah Copeland, a BRIGHT principal coach with a nearly 30-year background as an elementary school principal, acknowledged a level of skepticism around “outside” people taking a leadership role in education. Often, she said, it just takes spending time alongside the fellows to see that they have the skills and capability to drive change.

“It’s been a joy watching these fellows coming in with a different perspective, full of hope and promise and not weighted down by the barriers that those of us who’ve been in the trenches often get blinded by,” Copeland said.

The BRIGHT fellows themselves are the source of a telling data point: About 90 percent had K-12 principal or assistant principal jobs locked in at the start of the school year.

COE summit highlighted on ‘Manufacturing Tomorrow’ podcast

manufacturing tomorrow
Have five minutes to spare?

The Ohio Manufacturing Institute just released the latest edition of its semi-monthly Manufacturing Tomorrow podcast, which they recorded at the Center for Operational Excellence’s Leading Through Excellence summit just last month.

Podcast Executive Producer Kathryn Kelley in this edition interviews a trio of COE members – Agrana Fruit’s John Labrador, Crown Equipment’s Craig Wreede and WillowWood’s John Matera – on what operational excellence means for them. Listen here, and check out the podcast’s website here.

COE regularly partners with OMI to bring speakers to Manufacturing Tomorrow. Past COE collaborations have resulted in podcasts interviewing Goodyear’s Norbert Majerus, COE Executive Director Peg Pennington, Snap-On Inc. CEO Nick Pinchuk and more. They’re all on the podcast archive.

Special thanks to Kathryn Kelley and the OMI team for visiting the summit and featuring our members.


‘Joy Inc.’ author, former summit keynote Sheridan returning in May

Miss last year’s Leading Through Excellence summit? Looking to revisit one of our most popular keynotes?

Rich Sheridan during his keynote at Leading Through Excellence 2015
Rich Sheridan during his keynote at Leading Through Excellence 2015

The Center for Operational Excellence is partnering with Fisher College of Business’ Master of Business Operational Excellence program to bring to campus Rich Sheridan, CEO of award-winning software developer Menlo Innovations LLC and author of Joy Inc. Employees of COE member companies are invited to join MBOE program alumni the morning of Friday, May 13, for a keynote by Sheridan, who kicked off the 2015 Leading Through Excellence summit and led a half-day workshop.

A programmer by trade, Sheridan entered the corporate world and found at the midpoint of his career that he no longer experienced the joy that had drawn him to the industry. After losing his job as a software development executive when the dot-com bubble burst, he founded Menlo Innovations in 2001, saying the company’s purpose was to “bring joy to the world through software.” Menlo has gone on to win the Alfred P. Sloan award for Business Excellence in Workplace Flexibility for eight straight years and has earned five revenue awards from Inc. magazine.

In his keynote, based on Joy Inc., Sheridan will offer an inside look at the culture that’s flourished at Menlo over the last 15 years that leverages visual management, an open and collaborative workspace, and a “fail fast” ethos that has garnered attention nationwide. All attendees will receive a complimentary copy of Sheridan’s book, Joy Inc.

Click here to register for this limited-capacity event.

Team building, problem solving take center stage at 2016 COE summit

The Center for Operational Excellence’s flagship annual event has more than a few things in common with the fast-paced racing world featured in the kickoff to the fourth-annual Leading Through Excellence summit.

In the span of three years, COE’s April Leading Through Excellence summit has grown to a gathering of nearly 400 process excellence leaders from around the world: 50 companies, a dozen workshops and tours, 20 breakout sessions, four dynamic keynote addresses, and countless insights across three days aimed at helping organizations harness the power of process improvement.

Here’s a look back at the event:

PIT action

Leading Through Excellence began with a bang as nearly 100 attendees plunged into the high-paced world of pit crew racing, guided by Mooresville, N.C.-based training ground Performance Instruction & Training (PIT). The session’s focus on handoffs, coordination and standard work drove home the importance of having a high-functioning team for Cheryl Cole of KeyBank, which sent 17 employees to the conference. “We can all benefit from what we experienced from PIT,” she said. “Teams tend not to be aware of the significance of being in sync.”

PIT team
Team-building emerged as the heart of Leading Through Excellence, where a number of companies brought upwards of 15 employees. “Getting a team together, you start bouncing ideas off each other,” said attendee Linda Schaefer of COE member Clopay. “You get more people involved, the excitement builds, and great things always come of that.”


Operational excellence isn’t bound by the Japanese words that make the foundations of lean. Author Dan Markovitz (A Factory of One, Building the Fit Organization) in his workshop offered a jargon-free look at continuous improvement that’s at the heart of his own passion to break down barriers to understanding. “If we could speak to them using analogies and metaphors that make sense to them, all the sudden we don’t have to go uphill,” Markovitz told COE in a pre-summit interview.


Longtime COE member Cardinal Health Inc. hosted a “train the trainer” workshop hosted by Luis Loya (pictured, middle) that modeled the health-care company’s own best practices in teaching lean practices.

Off-site tours during Leading Through Excellence ranged from a trip to Anheuser-Busch InBev’s massive Columbus brewing facility to a trip through the production line at COE member Abbott Nutrition. Here, Ohio State’s own Spine Research Institute demonstrates its trailblazing work in studying back problems, a hugely costly yet widely misunderstood workplace ailment.

Ben Cook
After hosting two high-paced rounds of pit crew training simulations on the first day of Leading Through Excellence, Performance Instruction & Training’s Ben Cook took to the stage to kick off a full day of breakout sessions. Before a crowd of nearly 400 people from 50 companies, Cook illustrated PIT’s “think inside the box” philosophy, that’s hinged on driving precision from a highly functioning team and reducing human error as much as possible. “The problem is the human element – that’s what happened with us as pit crew members. If we break down, then we lose the race; the car’s not gonna lose the race for us anymore.”

True leaders don’t bark answers – they ask questions that help dig to the root of the problem. Attendees practiced asking effective questions in a packed session hosted by lean expert Margie Hagene.

More than half of all breakout sessions at Leading Through Excellence are hosted by industry leaders, sharing stories of what worked, what didn’t – and how we can all learn from it. Pictured is Guru Vasudeva, SVP and Enterprise CTO at COE member and summit sponsor Nationwide, who shared his own “day in the life of a lean leader.”

The balance of the breakout sessions at Leading Through Excellence are hosted by Fisher College of Business faculty members sharing their own research. Pictured is Prof. Aravind Chandrasekaran, who offered insights he gleaned from working with high-tech manufacturers facing sudden – and potentially cataclysmic – shifts in project scope.

Matt Dumas (pictured, above) of COE member Honda R&D said the summit is “a great event for a team. To have more of the organization thinking about lean and understanding these principles makes it that much easier to take it back and work together to apply it.”

Lead summit sponsor gave attendees a hands-on taste of process design principles with a catapult workshop that had participants taking a “MacGuyver” approach and facing off in friendly competition.

Longtime lean leader Joe Murli in his keynote address offered his decades-in-the-making perspective on the lean management system. Of the summit, he said “this isn’t just leading-edge thought, but edge of the envelope thinking here. It’s little things that we can pluck off the tree and bring back to put into what we’re already doing. That makes it much more powerful.”

Connecting an organization’s purpose and mission down to day-to-day work can be a formidable challenge for any company. David Kalman of Root Inc. in his popular breakout session showed attendees how visuals can help close that gap.

Harvard Business School researcher and professor Francesca Gino, author of the book Sidetracked, guided attendees through the wild world of decision making, where our hard-wired instincts often stand in the way of the right calls. “We are human beings,” Gino said. “Often we start with a plan, a clear goal, and we take the time to come up with a clear action plan. When we look at the outcome, we’re often a little bit off target.” Knowing how to counteract the unconscious biases and instincts we possess, Gino said, can lead us to better decision making, she said.

The behind-the-scenes action at Leading Through Excellence was fueled by more than three-dozen Fisher College of Business undergraduate students, graduate students and staff members, who served as volunteers and introduced speakers throughout the event.

Accidental Creative founder and acclaimed author Todd Henry closed out Leading Through Excellence, urging the audience to ask: “How are you bringing yourself to the table every day as a leader? A brilliant idea is not enough – in order to succeed, you have to develop your voice as a leader and you have to help your team develop its voice.”

Want to see more? Check out the full album of summit photos on our Flickr site. And mark your calendar for Leading Through Excellence 2017, April 11-13.

Do we really understand lean deployment in health care?

by guest author Aravind Chandrasekaran, associate professor of management sciences, Fisher College of Business

Anyone who has taught lean principles grounded in the famous Toyota Production System (TPS) to organizations outside the manufacturing industry has – at least once – heard this common refrain: “(Insert industry here) isn’t cars on an assembly line. This doesn’t apply to my work.”

A. Chandrasekaran
A. Chandrasekaran

Leading lean thinkers, of course, have learned how to work with individuals and teams to move past this roadblock and garner buy-in – that’s why the practices and tools intrinsic to TPS have made their way into countless industries. Lean still can be a target for criticism, though, and one need look no further for proof than an article published earlier this year in the New England Journal of Medicine – and the debate it ignited.

The January issue of NEJM featured an article called “Medical Taylorism” where authors and physicians Pamela Hartzband and Jerome Groopman assert that lean principles “cannot be applied to many vital aspects of medicine. If patients were cars, we would all be used cars of different years and models …” This tipped off a flurry of rebuttals, including one from Lean Enterprise Institute CEO John Shook boldly titled “Malpractice in the New England Journal of Medicine.” In his piece, which itself attracted widespread attention, Shook writes that the foundational lean principles of continuous improvement and respect for people are critically important in the health-care system.

Shook is right, but I’d like to approach this discussion from a different angle, namely that this line of criticism has emerged elsewhere – and it’s rooted in a lack of understanding of lean deployment.

One of my initial research areas sought to understand how standardization and “smart application” of Six Sigma principles can aid R&D and innovation efforts. I pursued this as a number of business press publications and industry practitioner blogs lamented the damage Six Sigma does to creativity and praised the need for variation for innovation. Several years of research with my colleagues in Fortune 500 companies made us realize such sentiments don’t hold much water. We found, in fact, that principles of Six Sigma – when applied to the innovation process correctly (hence the “smart” in “smart application’) – can help reduce unnecessary variation and stop worthless innovation activities that consume R&D funding.


I’ve more recently collaborated with researchers and physicians to tackle similar questions in health care. Once again, the findings – published in several academic and practitioner outlets – are very similar: The smart application of lean and continuous improvement principles can help develop a safe and patient-centered health-care system.

In arguing that patients aren’t cars, the NEJM’s authors are absolutely right – but they’re dead-wrong in concluding there’s no place for lean in “many vital aspects of medicine.” As with our R&D research, we’ve found that lean deployment in hospital settings minimizes unnecessary variation that comes from care providers, not patients. In fact, it frees up time and effort to cater to the necessary variability in a population diverse in its illnesses, economic backgrounds, languages and more.

As an example, I spent years with other researchers – including some physicians – looking at Ohio State University’s Wexner Medical Center, specifically a lean deployment effort in its kidney transplant discharge process. Medical research has found that transplant recipients after discharge must drink at least three liters of fluid a day – failure to do so can spike creatine levels, elevating blood pressure and increasing the likelihood of readmission. In our study, we found variations in how nurses delivered these instructions to patients: One nurse, for example, recommended drinking “a lot of fluids” while another suggested 100 ounces. Interestingly, nurses varied their wording across patients, while one patient would receive different instructions from more than one nurse. This wasn’t a matter of intentional deception, but the inconsistencies confused patients as they took in a tremendous overload of instructions.

Overhauled through the lean deployment via standard work design, nurses in our medical center now clearly explain the specific volume of fluid, use a jug to visually illustrate, and discuss the consequences of not following the instructions. Preliminary findings show this approach soothes patients’ anxiety levels and has reduced the chances of readmissions in the first month after transplant.

This isn’t just a lean approach to a problem – it’s a smart lean approach. And in an environment that, yes, isn’t cars on an assembly line, that matters more than ever.

COE leader’s podcast appearance offers crash course on center

Looking for a crash course in the Center for Operational Excellence and how we’re partnering with our member companies?

peg penningtonExecutive Director Peg Pennington recently visited the Ohio Manufacturing Institute to talk COE on its Manufacturing Tomorrow podcast, a twice-monthly sit-down with leaders in the trade.

Pennington’s wide-ranging chat with host Kathryn Kelley touches on COE’s philosophy and its mission in the context of the needs of today’s business world.

“If you ask most leaders today what they want in their people, they want problem solvers and they want people that are going to learn and adapt quickly and build problem-solving processes,” Pennington said.

Pennington also explores where some companies go wrong in their efforts to drive continuous improvement: A lack of shared purpose.

“Companies sometimes come at this by picking a tool, saying, ‘Oh, we have to standardize work.’ All of those (tools) are great but they have to be nested together in this complex organization, and associates in that system have to understand the ‘why.’”

Pennington’s visit to Manufacturing Tomorrow, which you can stream in full here, was followed by another COE-affiliated leader, Norbert Majerus of Goodyear Tire & Rubber Co. Majerus and Pennington are among seven COE-affiliated podcast guests who have appeared since the show launched last year. To visit the full back catalog, including Majerus’ appearance, click here.

Management Sciences staffer Spadaro given top OSU service award

A longtime staffer in Fisher College of Business’ Management Sciences department was honored this week with a top service award from The Ohio State University.

Spadaro, front row, middle, with Management Sciences faculty and Fisher Dean Anil Makhija (front row, far right).
Spadaro, front row, middle, with Management Sciences faculty and Fisher Dean Anil Makhija (front row, far right).

Laurie Spadaro, assistant to the department chair in Management Sciences, received the Distinguished Staff Award, given to only a dozen staff members each year who have served the university for at least five years. Spadaro joined Ohio State nearly 18 years ago and has been with Fisher for 11 years.

Staff are nominated for their work in making a significant difference for colleagues or customers, providing outstanding and ongoing excellence in service, and developing creative solutions to problems that ultimately make their department more efficient and effective.

Department Chair Kenneth Boyer in his nomination called her the “heart of the Management Sciences department” who’s never afraid to problem solve and innovate. Associate Professor James Hill, meanwhile, said Spadaro’s “willingness to contribute to the team, her positive attitude and her selfless approach to her job have assisted in building a department faculty, staff and students can be proud to be a part of.”

Spadaro also has maintained a commitment to continuing education, attaining her bachelor’s in business administration in 2013 from Mount Vernon Nazarene University and earning a Lean Six Sigma Yellow Belt through this year.

COE summit inspires crowd to fight ‘ground war’ of scaling excellence

For an event that grows in scope and diversity each year, uniting hundreds of process improvement leaders from around the globe, it’s no coincidence one of the keynote speakers for the Center for Operational Excellence’s spring summit is co-author of a book called Scaling Up Excellence.

COE’s third-annual Leading Through Excellence summit in April was an act of scaling itself, drawing a record more than 300 attendees from more than 40 companies seeking the latest insights on leadership, problem solving, demand planning, product development, supply chain forecasting and big data, among many others.

Amid a diverse range of perspectives from two-dozen industry leaders and Fisher College of business researchers, the message at the core of Leading Through Excellence emerged by linking the stories told by the trio of keynote speakers: Culture builds the foundation, leaders enable their teams to drive change, and the right mindset scales it to the heights of excellence.

‘You don’t have to boil the ocean’

sheridan, richLeading Through Excellence kicked off with a keynote address by Rich Sheridan (pictured), the CEO of software developer Menlo Innovations, an Ann Arbor, Mich.-based firm whose unorthodox approaches to company culture and process have made its headquarters a must-see benchmark.

Menlo, Sheridan said, eschews e-mail and other high-dollars, instead turning to face-to-face interaction and the ultimate in “low-tech” solutions: Paper. Menlo’s offices have no interior walls, no offices, no cubicles and no doors. It’s what he calls an “open, collaborative culture” that designs its processes around creating more joy for employees and customers.

“Too often processes and methods tend to boil the humanity out of a team,” Sheridan said. “Rather than going with human nature, they fight against human nature – and we end up with processes that, when times get tough, we flee from them instead of toward them.”

Sheridan, whose book on Menlo’s rise as a paradigm of company culture is dubbed Joy Inc., said the kind of change he’s achieved is far from easy, but it’s nonetheless possible even in small pockets of people committed to becoming change agents.

“You don’t have to boil the ocean,” he said. “You can create a microcosm and, quite frankly, become a microcosm people can come and visit.”

‘I stopped giving orders’

marquet, davidLike Sheridan, who found himself a casualty of the dot-com bubble before founding Menlo, keynote David Marquet (pictured) emerged as a model of inclusive leadership when circumstances turned rough. Really rough.

As detailed in Marquet’s much-lauded book Turn the Ship Around!, the retired U.S. Navy captain told of finding himself placed in charge of the USS Santa Fe nuclear submarine, notorious in the fleet for its poor performance and low staff retention.

By turning his traditional notions of leadership on their ear and leading with respect and trust – what he dubbed “intent-based leadership” – Marquet forged a new culture that vaulted the Santa Fe to the top of the ranks.

“I stopped giving orders,” he said. “Instead, I released the passion of everybody in the crew.”

Marquet’s leadership style has been chronicled by business-writing icon Stephen Covey and backed by a slew of hard statistics, but it’s one key measure that he said means the most: Whether you as a leader help create more leaders.

“You can be smart and bark orders and get a turnaround,” he said. “It’s this creating of other leaders that’s truly powerful.”

‘It’s a ground war’

rao, huggyWith the right culture and leaders in place, how can companies sustain and scale the progress they’ve made?

Renowned Stanford University Prof. Huggy Rao (pictured) has spent years studying this question, which he tackled in his closing keynote for Leading Through Excellence with lessons from the bestselling work he co-authored: Scaling Up Excellence.

Rao defined an “excellent organization” as one “where people do the right thing even when no one is watching over your shoulder,” arguing that many companies fail to reach those heights as they grow.

“As organizations get bigger, the smart people can become dumber – and by that I mean silent,” Rao said.

Rao described successful efforts to drive change across organizations as a “ground war,” not an “air war,” moving beyond impersonal PowerPoint presentations and endless value-less meetings to enter a truly implementation-driven mindset.

“It’s not about moving one person 1,000 feet forward – it’s about moving 1,000 people one foot forward,” Rao said.

Absorbing the energy

The messages from the keynotes, industry leaders and researchers are only part of the value attendees say they get by coming each year.

“This summit is so fantastic because we get to collaborate with people who think like us, we get to absorb the energy of people interested in operational excellence, and we get to learn from some of the best in the world,” said Tom Paider, AVP of IT Build Capability at COE member Nationwide.

It’s this mix of sharing, networking and learning that has created such a high-energy, high-value event for three consecutive years, COE Executive Director Peg Pennington said.

“Seeing these teams from around the globe really challenging themselves to be better problem solvers and leaders never fails to be inspiring,” she said. “I can’t wait to see what strides these companies make in the coming months.”

Leading Through Excellence 2016 is set for April 12-14 in Columbus, Ohio.

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’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 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

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.”