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The Outstanding Organization:
      The Power of Clarity

       Presenter: Karen Martin



            March 22, 2012
 Founder of Karen Martin & Associates
(1993)
 Thought leader in applying Lean to
the service sector and office areas
within manufacturing
 Teaches at University of California,
San Diego’s Lean Enterprise program
 Email: karen@ksmartin.com
 Twitter: @karenmartinopex

                                         Karen Martin,
                                           Principal
2012 Webinars
    Date                            Topic
March 22   The Outstanding Organization: The Power of Clarity
April 5    The Outstanding Organization: The Power of Focus
May 3      The Outstanding Organization: The Power of Discipline
May 17     The Outstanding Organization: The Power of Engagement



                                 Release Date: July 8, 2012
                                       (McGraw-Hill)

                                  Available for Preorder:
                                    www.bit.ly/km-too




                                                                   3
Success with Improvement
          2001 – The Economist
70%
                   63%
60%

50%

40%

30%

20%       17%                 20%

10%

0%
          None   Temporary   Lasting
                                       4
…A Decade Later

             2010 – Accenture
80%

70%
           69%
60%                            58%
50%

40%
                                              33%
30%

20%

10%

0%
      Needs re‐evaluation,    Minimal        “Mixed” to 
      restart or complete     financial    “disappointing” 
           makeover            impact           results
                                                              5
To Err is Human
Institute of Medicine, 1999

Up to 98,000 deaths
annually due to
medical errors.

8th leading cause of
death in U.S.

                              6
Southwest Airlines’ Boeing 737 has 
      137 passenger seats. 


                                      7
8
To Err is Human
 Institute of Medicine, 1999

98,000 lives lost

Improvement Goal:
Reduce by 50%
in 5 years.

                               9
Not. Even. Close.



                    10
Something Is Terribly Wrong…

                                                                                 33% hospitalized
                                          180,000 Medicare
                                                                               patients are harmed;
                                            patients die
                                                                                    7% result in
  Progress has                             annually from
                                                                               permanent injury or
   been slow.                              medical errors.
                                                                                      death.
Journal of the American                       Office of the
                                                                                        Health Affairs
  Medical Association       2009           Inspector General          2010



       2005          Annual death               2010            No significant              2011
                        toll from                              change in rate of
                     medical errors                              preventable
                      is closer to                                 errors.
                        200,000.                               New England Journal of
                       Dead by Mistake                               Medicine
                      Hearst Newspapers
                        Special Report


                                                                                                         11
What are we missing?




                       12
We need to
  improve
     how we improve.


                       13
Mindsets & Behaviors


                       14
Lack of Clarity
    Lack of Focus
       Lack of Discipline
            Lack of Engagement
                                 15
The Outstanding Organization


                                 Business Results

               Problem Solving




                                        Improvement
                                         Continuous 




                                                        Resilience
   Core 
Capabilities


                                        CHOS

                             April 5      May 3        May 17


                                                                     16
Lack of Clarity
    Lack of Focus
       Lack of Discipline
            Lack of Engagement
                                 17
Truth
    Truth
        Truth
            Truth
                Truth
                    Truth
                        Truth
                            Truth
                                Truth   18
19
Ambiguity Abounds…
•   Organization purpose & vision
•   Customers & products
•   Business goals & priorities
•   Policies & procedures
•   Roles & responsibilities
•   Process performance
•   Problem solving & decision making
•   Communication

                                        20
Who are your customers?
What problem does your good
      or service solve?




                              21
What value do these consumer goods
companies provide to their customers?




                                        22
You must indoctrinate
all new hires into who the 
organization’s customers 
are and what they value.


                              23
What is Your Improvement Strategy?




                                 24
25
How does work get accomplished? 
             And well how are we doing at it?

                                   Customer



      Process             Process          Process        Process
         1                   2                3              4

LT                   LT               LT             LT
          PT                  PT              PT            PT

LT = Lead (Throughput) Time
PT = Process (Touch) Time                                           26
Key Lean Metrics: Quality

• %Complete and Accurate (%C&A)
     – % time downstream customer can
       perform task without having to “CAC” the
       incoming work:
       • Correct information or material that was
         supplied
       • Add information that should have been
         supplied
       • Clarify information that should or could have
         been clear
27
Processes MUST be Clearly Documented
                                                                       Current State Metrics-Based Process Map
     PT Units                                       Process Details                                                                                    Mapping Team
   Seconds      Hours           Process Name Order Fulfillment                                        Dianne O'Shea                           Ryan Austin
   Minutes      Days       Specific Conditions Domestic orders through sales force                    Sean Michaels                           Mary Townsend
     LT Units            Occurrences per Year 37,500                                                  Sam Parks
   Seconds      Hours    Hours Worked per Day 8                                                       Paul Dampier
   Minutes      Days             Date Mapped 26-Nov-07                                                Michael Prichard
              Step # ?                   6                                       7                                       8                                       9
      Function /
     Department            Activity       PT      LT    %C&A       Activity          PT   LT   %C&A       Activity       PT      LT    %C&A      Activity        PT   LT




Customer




                                                                                                       Notify customer
                                                                  Fax PO to
Sales Rep                 Approve PO      15      240   100%                         5    20   100%    when they can     15      300   95%
                                                               Account Manager
                                                                                                       expect delivery




                                                                                                         Review and
Account Manager                                                                                       approve PO; send       5   240   100%
                                                                                                        to Order Entry




                                                                                                                                              Enter order into
Order Entry                                                                                                                                                      10   240
                                                                                                                                                   SAP




Finance / Credit
Every key process…
   2-5 Key Performance Indicators

       Monitored Continually




                                    29
Gaining Clarity via Visual Management




                                        30
“Going to the 
gemba has been 
life changing for 
me as a leader.” 




                     31
What problem are you trying to solve?




                                        32
Clarifying the PDSA Cycle

         Phase                             Detailed Steps

                          1.  Define and break down the  problem.

                         2.  Grasp the current condition.

             Develop 
 Plan                     3.  Set a target condition.
            Hypothesis

                          4.  Conduct root cause & gap analysis.

                          5.  Identify potential countermeasures.

                          6.  Develop & test countermeasure(s)

              Conduct 
 Do                     7.  Refine and finalize countermeasure(s).
            Experiment

                          8.  Implement countermeasure(s).

             Evaluate 
Study                     9.  Measure process performance.
              Results

                         10. Refine, standardize, & stabilize the process.
               Refine 
Adjust      Standardize  11. Monitor process performance.
              Stabilize
                         12.  Assess results.                                33
Learning How to Clarify: A3 Management

                             A3 
                           Report




      The vital role of 
     the coach/mentor

                                     34
Progressive Learning




                       35
Gaining Clarity: Avoid “Fuzzy” Words

•   Near / close / far   •   High / low
•   Short / long         •   Significant
•   A lot / a little     •   Fast / slow
•   Many / few / much    •   Young / new / old 
•   Bad / good           •   Expensive / cheap
•   Heavy / light        •   Long / short
•   Seems                •   “I think…”

                                                  36
Release Date: July 8, 2012 
     (McGraw‐Hill)

 Available for Preorder: 
  www.bit.ly/km‐too




                        37
For Further Questions


        Karen Martin, Principal
       7770 Regents Road #635
         San Diego, CA 92122
            858.677.6799

        ksm@ksmartin.com
     Twitter: @karenmartinopex

Monthly newsletter: www.ksmartin.com/subscribe




                                                 38

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The Outstanding Organization: The Power of Clarity

  • 1. The Outstanding Organization: The Power of Clarity Presenter: Karen Martin March 22, 2012
  • 2.  Founder of Karen Martin & Associates (1993)  Thought leader in applying Lean to the service sector and office areas within manufacturing  Teaches at University of California, San Diego’s Lean Enterprise program  Email: karen@ksmartin.com  Twitter: @karenmartinopex Karen Martin, Principal
  • 3. 2012 Webinars Date Topic March 22 The Outstanding Organization: The Power of Clarity April 5 The Outstanding Organization: The Power of Focus May 3 The Outstanding Organization: The Power of Discipline May 17 The Outstanding Organization: The Power of Engagement Release Date: July 8, 2012 (McGraw-Hill) Available for Preorder: www.bit.ly/km-too 3
  • 4. Success with Improvement 2001 – The Economist 70% 63% 60% 50% 40% 30% 20% 17% 20% 10% 0% None Temporary Lasting 4
  • 5. …A Decade Later 2010 – Accenture 80% 70% 69% 60% 58% 50% 40% 33% 30% 20% 10% 0% Needs re‐evaluation,  Minimal  “Mixed” to  restart or complete  financial  “disappointing”  makeover impact results 5
  • 6. To Err is Human Institute of Medicine, 1999 Up to 98,000 deaths annually due to medical errors. 8th leading cause of death in U.S. 6
  • 7. Southwest Airlines’ Boeing 737 has  137 passenger seats.  7
  • 8. 8
  • 9. To Err is Human Institute of Medicine, 1999 98,000 lives lost Improvement Goal: Reduce by 50% in 5 years. 9
  • 11. Something Is Terribly Wrong… 33% hospitalized 180,000 Medicare patients are harmed; patients die 7% result in Progress has annually from permanent injury or been slow. medical errors. death. Journal of the American Office of the Health Affairs Medical Association 2009 Inspector General 2010 2005 Annual death 2010 No significant 2011 toll from change in rate of medical errors preventable is closer to errors. 200,000. New England Journal of Dead by Mistake Medicine Hearst Newspapers Special Report 11
  • 12. What are we missing? 12
  • 13. We need to improve how we improve. 13
  • 15. Lack of Clarity Lack of Focus Lack of Discipline Lack of Engagement 15
  • 16. The Outstanding Organization Business Results Problem Solving Improvement Continuous  Resilience Core  Capabilities CHOS April 5  May 3 May 17 16
  • 17. Lack of Clarity Lack of Focus Lack of Discipline Lack of Engagement 17
  • 18. Truth Truth Truth Truth Truth Truth Truth Truth Truth 18
  • 19. 19
  • 20. Ambiguity Abounds… • Organization purpose & vision • Customers & products • Business goals & priorities • Policies & procedures • Roles & responsibilities • Process performance • Problem solving & decision making • Communication 20
  • 21. Who are your customers? What problem does your good or service solve? 21
  • 22. What value do these consumer goods companies provide to their customers? 22
  • 24. What is Your Improvement Strategy? 24
  • 25. 25
  • 26. How does work get accomplished?  And well how are we doing at it? Customer Process Process Process Process 1 2 3 4 LT LT LT LT PT PT PT PT LT = Lead (Throughput) Time PT = Process (Touch) Time 26
  • 27. Key Lean Metrics: Quality • %Complete and Accurate (%C&A) – % time downstream customer can perform task without having to “CAC” the incoming work: • Correct information or material that was supplied • Add information that should have been supplied • Clarify information that should or could have been clear 27
  • 28. Processes MUST be Clearly Documented Current State Metrics-Based Process Map PT Units Process Details Mapping Team Seconds Hours Process Name Order Fulfillment Dianne O'Shea Ryan Austin Minutes Days Specific Conditions Domestic orders through sales force Sean Michaels Mary Townsend LT Units Occurrences per Year 37,500 Sam Parks Seconds Hours Hours Worked per Day 8 Paul Dampier Minutes Days Date Mapped 26-Nov-07 Michael Prichard Step # ? 6 7 8 9 Function / Department Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT Customer Notify customer Fax PO to Sales Rep Approve PO 15 240 100% 5 20 100% when they can 15 300 95% Account Manager expect delivery Review and Account Manager approve PO; send 5 240 100% to Order Entry Enter order into Order Entry 10 240 SAP Finance / Credit
  • 29. Every key process… 2-5 Key Performance Indicators Monitored Continually 29
  • 32. What problem are you trying to solve? 32
  • 33. Clarifying the PDSA Cycle Phase Detailed Steps  1.  Define and break down the  problem. 2.  Grasp the current condition. Develop  Plan  3.  Set a target condition. Hypothesis  4.  Conduct root cause & gap analysis.  5.  Identify potential countermeasures.  6.  Develop & test countermeasure(s) Conduct  Do  7.  Refine and finalize countermeasure(s). Experiment  8.  Implement countermeasure(s). Evaluate  Study  9.  Measure process performance. Results 10. Refine, standardize, & stabilize the process. Refine  Adjust Standardize  11. Monitor process performance. Stabilize 12.  Assess results. 33
  • 34. Learning How to Clarify: A3 Management A3  Report The vital role of  the coach/mentor 34
  • 36. Gaining Clarity: Avoid “Fuzzy” Words • Near / close / far • High / low • Short / long • Significant • A lot / a little • Fast / slow • Many / few / much • Young / new / old  • Bad / good  • Expensive / cheap • Heavy / light • Long / short • Seems • “I think…” 36
  • 37. Release Date: July 8, 2012  (McGraw‐Hill) Available for Preorder:  www.bit.ly/km‐too 37
  • 38. For Further Questions Karen Martin, Principal 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com Twitter: @karenmartinopex Monthly newsletter: www.ksmartin.com/subscribe 38