Improvement Facilitation & Coaching: An
Open Forum Webinar October 29, 2013

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Q1: Any key tips on
facilitating "out of the box" thinking? Often times participants brainstorm solutions that can be a little too basic. 3

Facilitating “Out of the Box”
Thinking • Executive sponsor – Clear expectations – Permission to be bold • Use of a proper charter (and properly socialized)—or A3 – Clear problem – Measurable targets • • • • Safe environment Permission to be bold Skill set (yours and theirs) The New Business of Paradigms video – http://www.youtube.com/watch? v=ujv_B1PGx8Q – www.crmlearning.com © 2013 The Karen Martin Group, Inc. 4

Value Stream Mapping Charter Scope
Accountable Parties Logistics Executive Allen Ward Sponsor Value Stream Capital equipment Engineer to order, requires both hardware & Specific Conditions software Event Dates July 24-26, 2013 & Times Value Stream Nancy Little Champion Demand Rate 1,000 per year Base-camp Surf's Up - Room A Location Facilitator Dave Parks Trigger Customer submits RFQ First Step Sales reviews the RFQ Logistics Dave Parks Coordinator Last Step Production ships product Boundaries & No new software; only minor changes to existing IT Limitations systems; no additional staff; no budget changes Meals Continential breakfast & lunch Provided Briefing ** Joe M (CIO), Sal T (VP Sales) Attendees * Bruce R (VP Ops), Carlos P ** required (HR), Su T (CFO), Bill M (VP CS) *optional Improvement Time Future state design is fully realized by Frame December 31, 2013. Current State Problems & Business Needs Briefing July 24, 25, & 26 Dates & 4:00-5:00 pm Times Mapping Team 1 Desire to stay ahead of the competition & deepen customer loyalty. Function / Title Name 2 Forecasted growth of 15% for next fiscal year. 1 Sales, Director 3 Unclear & incorrect information flowing through value stream. 2 IT, Director Diana Marie 4 Lead time for RFQ turnaround = 2 weeks; PO to SW dev = 5 weeks 3 Finance, Controller Dave Gerald 5 4 Scrum Master Ryan Austin 5 Engineering, Vice President Michael O'Shea 1 Reduce RFQ lead time by a minimum of 50%. 6 Manufacturing, Director Ambreen Motiwala 2 Reduce PO to SW dev completion by a minimum of 50%. 7 Customer Service, Manager Danny Tran 3 Improve quality of information flowing throughout value stream. 8 Customer (contract manufacturer) Contact Information Sean Michaels JR Hunt Goals & Measurable Target Conditions 4 9 5 10 Benefits to Customers On-Call Support 1 Faster delivery. Function Name 2 Less hassle (back and forth re: RFQ, design and code). 1 Planning / Purchasing, Planner Lourdes Dwyer 3 Higher confidence in Golden State's products and staff. 2 Production Supervisor 4 Contact Information 3 5 Tom St. James 4 Benefits to Business 1 Higher margins. Agreement Executive Sponsor Value Stream Champion Facilitator 2 Better working relationships between sales, estimating & engineering. 3 Freed capacity to absorb additional business w/o increasing staff. 4 © 2013 The Karen Martin Group, Inc. Signature: Date: Signature: Date: Signature: Date: 5

Q2: How would you talk
a site manager into using a Strategy Deployment X-Matrix or Hoshin Kanri plan to prioritize improvements? I am two levels down in his chain of command, and my boss is all for it. 6

The Cost of Switch Tasking
– Timed Activity Task #1: Focus Reduces Chaos Task #2: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Round 1 – Alternate between tasks : letter, number, letter, number, etc. Sentence: Numbers: Round 2 – Complete one task before beginning the next. Sentence: Numbers: © 2013 The Karen Martin Group, Inc. – www.ksmartin.com 7

You need an improvement strategy
that’s aligned with overarching business goals 8

Hoshin Kanri X-Matrix
9

Tie Improvement to Annual Strategy
Deployment Plan < Company Name > ABC Company 2013 Priorities 2013 Goals & Objectives 1. Increase sales 5%. 3. Achieve 10% profit. 2. Achieve 50% gross margin. 4. Improve morale (metric TBD). X = Planned Priority Goal or Measurable Objective Jan Feb Created: 01-14-13 Revised: ● = Actual Mar Apr May Jun Jul Aug Sep Oct Nov Dec Exec Owner Plan review dates: Level of Effort/Involvement Required Tactical Owner IT 2 3,500 uni ts s ol d by 12/31/2013 through a l l cha nnel s (a pprox. $700K) X X X X X X Bob Da na 11 Devel op & del i ver tra i ni ng to top 50 Dea l ers X X X X X X Bob X X X Bob Jos h R? HR 21 5 8 9 17 29 32 33 10 30 31 25 26 15 20 22 Revi s ed cours e ma teri a l s by 6/30/2013 Educa ti on: 1 s chool di s tri ct s pec'd/underperformi ng COM di s tri butor (25) by 12/31 va l ued a t mi n $35K ea ch 10 new dea l ers on boa rd (net) ($500K per dea l er thi s yea r) 5 new di s tri butors bri ngi ng $200K a nnua l rev (& 5 termi na ted) X X X 2 1 3 2 3 X X X X X X X Howa rd Mi cha el S X X X X X X X X Howa rd Mi ke B X X X X X X X X X X X X Howa rd Howa rd 2 X X X X X X X X X Howa rd Da na 1 3 3 X X X X X X X X X Howa rd Ma rk H 2 Ra nda l l Ji m Jos h 2 Howa rd Ji m 3 Howa rd Howa rd 3 3 3 Howa rd TBD X Us eful reporti ng a nd metri cs a re es ta bl i s hed a nd i n pl a ce X X X X X X X X X X X TBD X TBD X X X X X X X X X 1 3 X X X X X X X X X X 1 Ji m Ra nda l l 1 X X 3 X X X X 1 Phyl l i s 1 Mi cha el M 2 3 X X 3 3 1 1 1 1 1 Ma tt D 3 1 Da na 1 1 1 1 1 1 1 1 1 3 1 1 1 1 1 2 1 1 3 3 2 Da vi d R 3 Sus a n Sha nnon 3 X X X Sus a n Sha nnon X X Sus a n Da vi d R 3 2 2 3 3 2 3 3 3 3 2 3 3 2 3 X 3 3 1 2 Sus a n X 3 2 Nea l l X 3 1 3 Nea l l X X X Jos h Sha nnon Jos h X 1 1 Mi cha el M X X X 1 3 Ji m Sys tem 7.0's i n pl a ce 3 2 Ji m TBD 2 1 3 X X 3 3 X X 1 3 X X © 2013 The Karen Martin Group, Inc. 1 X X La y out compl ete; equi pment i ns ta l l ed 3 3 3 3 X X 30 pa rts s ourced i n U.S.; compl eted pl a n for ma na gi ng Chi na -s ourced pa rts Wa rehous e l a i d out; ka nba n revi s ed; Sys pro i mpl emented 2 PD PD BMD SWS Rec Mgmt 3 X X Des i gn cha nged to s ol ve del a m i s s ue l ong-term 3 X TBD 100% a ccura te pa yrol l ; 100% ma na gement s a ti s fa cti on a t Apri l mgmt. meeti ng Internet ta s k l i s t i s s i mpl i fi ed a nd s trea ml i ned for PDs then pl a n i s rol l ed out to PDs Des i gn Ca l cul a tor i s upda ted s ucces s ful l y a nd rol l ed out 3 COM CDs / Direct AMs X 20 by yea r-end 1 14 X PE Pario X Competi ti ve Ana l ys i s compl ete a nd di s tri buted for us e 13 X Fin X 10 projects s pec'd by 12/31; $300K rev by 12/31 24 12 X Bob 3 Rex/Ti m Content removed for confidentiality 2 Mktg Ops 3 10

Strategy Deployment Key Feature: Catchball
What? How? Who? When? Executive Team What? How? Who? When? Senior Mgmt What? How? Who? When? Middle Mgmt What? How? Who? When? Frontlines 11

Selling Strategy Deployment • Education:
David Meyer’s research re: engineers • Demonstration of the cost of switch tasking (next slide) • The Outstanding Organization – Chapter 3 (Focus) • Getting the Right Things Done – Pascal Dennis • Why isn’t your boss selling it????? © 2013 The Karen Martin Group, Inc. 12

Strategy Deployment Books Modified strategy
deployment Chapter 3 - Focus

Q3: Our corporate, division &
plant management teams only think of quarterly results and want to implement lean. Management team expects higher efficiency should result in reduced head count. How can I engage employees in such an environment and change thinking from short term to long-term benefits? 14

Q4: How do you usually
select a product family? 15

Selecting Product Families for Improvement
1. What are the business goals? – Strategy deployment helps – What problem are you trying to solve or opportunity do you need to leverage? 2. Where do you have supportive leadership? 3. What’s an “easy” one to tackle first? © 2013 The Karen Martin Group, Inc. 16

Traditional vs. Value Stream Thinking
Function Function Function Function Support Value Stream Value stream segment Core Value Stream Value stream segment Support Value Stream ©© 2013 Karen Martin & Mike Osterling 2013 The Karen Martin Group, Inc. 17

Value Stream Scoping Diagram Defining
Specific Conditions Catalog Configure to order Custom hardware Engineer to order Custom software New Product Development Both Capital Equipment Golden State Equipment, Inc. Catalog Spares & subassemblies Engineer to order 18

Refining the Scope: Hiring Process
Salaried Employee Office Existing Position Hourly Employee Field Contractor Hiring Requisition Salaried Employee Office New Position Hourly Employee Field Contractor 19

Q5: Have you found an
effective, scalable method for introducing the PDCA (e.g., kata) methodology into a multi-facility enterprise? How should we introduce PDCA when people have been using trial/error all their lives and in some cases getting good results? 20

Developing PDSA (PDCA) Skills •
Develop execs first (using A3). • If that’s not possible, develop managers first. – Try this: - Use A3 initially, then move to kata. • All managers must be highly proficient in Lean philosophy, PDSA/PDCA, analysis tools, countermeasures, and coaching! © 2013 The Karen Martin Group, Inc. 21

Attaining Mastery © 2013 The
Karen Martin Group, Inc. From The Outstanding Organization, p. 115 22

Q6: How can we best
get nonemployed physicians to engage in our Lean improvement efforts? 23

How to Engage Non-employed Physicians
• Establish organization-wide priorities via strategy deployment. • Pay them. © 2013 The Karen Martin Group, Inc. 24

Q7: How do you keep
your teams small and yet ensure buy-in from large communities of people involved in the process? 25

Value Stream Mapping Charter Scope
Accountable Parties Logistics Executive Allen Ward Sponsor Value Stream Capital equipment Engineer to order, requires both hardware & Specific Conditions software Event Dates July 24-26, 2013 & Times Value Stream Nancy Little Champion Demand Rate 1,000 per year Base-camp Surf's Up - Room A Location Facilitator Dave Parks Trigger Customer submits RFQ First Step Sales reviews the RFQ Logistics Dave Parks Coordinator Last Step Production ships product Boundaries & No new software; only minor changes to existing IT Limitations systems; no additional staff; no budget changes Meals Continential breakfast & lunch Provided Briefing ** Joe M (CIO), Sal T (VP Sales) Attendees * Bruce R (VP Ops), Carlos P ** required (HR), Su T (CFO), Bill M (VP CS) *optional Improvement Time Future state design is fully realized by Frame December 31, 2013. Current State Problems & Business Needs Briefing July 24, 25, & 26 Dates & 4:00-5:00 pm Times Mapping Team 1 Desire to stay ahead of the competition & deepen customer loyalty. Function / Title Name 2 Forecasted growth of 15% for next fiscal year. 1 Sales, Director 3 Unclear & incorrect information flowing through value stream. 2 IT, Director Diana Marie 4 Lead time for RFQ turnaround = 2 weeks; PO to SW dev = 5 weeks 3 Finance, Controller Dave Gerald 5 4 Scrum Master Ryan Austin 5 Engineering, Vice President Michael O'Shea 1 Reduce RFQ lead time by a minimum of 50%. 6 Manufacturing, Director Ambreen Motiwala 2 Reduce PO to SW dev completion by a minimum of 50%. 7 Customer Service, Manager Danny Tran 3 Improve quality of information flowing throughout value stream. 8 Customer (contract manufacturer) Contact Information Sean Michaels JR Hunt Goals & Measurable Target Conditions 4 9 5 10 Benefits to Customers On-Call Support 1 Faster delivery. Function Name 2 Less hassle (back and forth re: RFQ, design and code). 1 Planning / Purchasing, Planner Lourdes Dwyer 3 Higher confidence in Golden State's products and staff. 2 Production Supervisor 4 Contact Information 3 5 Tom St. James 4 Benefits to Business 1 Higher margins. Agreement Executive Sponsor Value Stream Champion Facilitator 2 Better working relationships between sales, estimating & engineering. 3 Freed capacity to absorb additional business w/o increasing staff. 4 © 2013 The Karen Martin Group, Inc. Signature: Date: Signature: Date: Signature: Date: 26

Q8: What are some tools
to keep Coaches/Facilitators engaged after they had their training? How do you get teams to focus on data when they are more concerned with their own routine? 27

Q9: PDCA vs. DMAIC? PDCA
= Plan, Do, Check, Act DMAIC = Define, Measure, Analyze, Improve, Control 28

Strategy Deployment (Hoshin Kanri) or
A3 Value Stream Mapping Projects, Kaizen Events, Kata © 2013 Karen Martin & Mike Osterling 29

Q10: How can I best
coach / facilitate a senior leadership group that is unwilling to see things in ways other than their own? Are there specific 'go to' questions that could be considered 'never fail'? Sometimes it's difficult to assess if a question is too edgy and might cost me my job. Any guidelines? 30

Improvement Roles Strategic Who? Accountability
Tool Leadership “What has to happen” Value Stream Mapping “How it will happen” Kaizen Events, Just-do-its, and Projects Tactical Middle Management Workforce © 2013 The Karen Martin Group, Inc. 31 31

Helping Shift “My Way” Thinking
• Lean leadership behavior development – Gemba orientation – Humility – Curiosity – Scientific thinking/doing (PDSA/PDCA) – Authorizing the people who do the work • Education / observation / simulation / data • “How’s that workin’ for ya?” © 2013 The Karen Martin Group, Inc. 32

Q11: Recommended books that are
worth my time? A17: Visit www.ksmartin.com/reading-list 33

Q12: Problem with blending Value
Stream Mapping and Kaizen Events (on the same week). 34

Improvement Roles Strategic Who? Accountability
Tool Leadership “What has to happen” Value Stream Mapping “How it will happen” Kaizen Events, Just-do-its, and Projects Tactical Middle Management Workforce © 2013 The Karen Martin Group, Inc. 35 35

Strategy Deployment (Hoshin Kanri) or
A3 Value Stream Mapping Projects, Kaizen Events, Kata © 2013 Karen Martin & Mike Osterling 36

Value Stream Transformation Plan Value
Stream Outpatient Imaging Executive Sponsor Allen Ward Value Stream Champion Paul Scanner Value Stream Mapping Facilitator Dave Parks Date Created 10/18/2012 FS VSM Block # Measurable Target Scheduled Review Dates 1-Nov-12 21-Nov-12 13-Dec-12 10-Jan-13 Proposed Countermeasure Exec. Method* Owner Planned Timeline for Execution 1 2 3 4 5 6 7 8 9 10 11 12 Status Improve quality of referral to 85% Implement standard work for referral process KE Sean Michaels 100% Reduce lead time between scheduling and preregistration step to 45 minutes Cross-train and co-locate work teams Proj Dianne Marie 75% 4 Only one check in per patient Collect copays in Imaging KE Ryan Austin 50% 4 Reduce wait time in waiting area by 50% Balance work / level demand KE Dianne Marie 50% 6 Eliminate 6 hour lead time associated with transcription step Implement voice recognition technology Proj Dave Gerald 50% 7 Eliminate redundant data entry Auto populate between PACS and Meditech Proj Dave Gerald 25% 5 Visually managed inventory; no outages 5S CT supplies area; implement kanban or expired items KE Michael O'Shea 100% 6 Reduce imaging LT to one hour Value-stream specific radiologists Proj Martha Allen 25% 8 Reduce report delivery LT to 30 minutes Increase % of physicians receiving electronic delivery Proj Martha Allen 0% 7 Reduce LT at image review to 1 day Visual metrics and indicators JDI Dave Gerald 100% 2 3,4 Agreement Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Signature: Signature: Signature: Date: Date: Date: * Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project) © 2013 Karen Martin & Mike Osterling 37

Q13: In the organization where
I work we had a lot of Kaizen events. We had a lot of cost saving but today we are not able to do additional Kaizen. How can we start again? What are the activities we have to do to avoid a fatal end to lean implementation? 38

Q14: How do you get
teams to focus on data when they are more concerned with their own routine? CLARIFICATION: I run into a lot of people that collect data for their areas as a daily routine but do nothing with the data. How do you get someone to go from being a bean counter to analyzing data and make improvements from that data? 39

Q15: What have you done
when you have a group of Kaizen participants who are trained, but do not "believe" in Continuous Improvement? 40

Q16: What are some tools
to keep Coaches/Facilitators engaged after they had their training? 41

Q17: How do you ensure
you get the right team leader? 42

Q18: How can continuous improvement
teams be engaged through the use of appropriate improvement tools? 43

For Further Questions Karen Martin,
President 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com Blog & newsletter: www.ksmartin.com/subscribe © 2013 The Karen Martin Group, Inc. 44