Subscribe: http://www.ksmartin.com/subscribe Dowload your FREE assessment: http://www.ksmartin.com/too-self-assessment/ To purchase the book: http://bit.ly/TOObk In Lean conversations, we often hear “it’s 10% tools and 90% people,” “we need to change the culture,” and “they just don’t get it.” While each of these statements may be true, they all reflect that something is missing in our problem-solving and transformation attempts—and that missing element is helping people change their behaviors. In reality if we don’t change the way the organization thinks and behaves, on a day-to-day basis, we won’t significantly impact performance levels. This workshop includes both theory and practical application around the behaviors of excellence: organizational clarity, focus, discipline, and widespread employee engagement. Activities include class discussions and four major activities representing each of the dimensions. The clarity activity centers on the words we use and how ambiguity and "softened" language hinders performance. The focus activity is a timed simulation that demonstrates how working on fewer projects at a time increases the total number of projects completed in a comparable given time period. Participants learn metrics-based process mapping, a highly disciplined process for standardizing work. In the final activity, participants practice techniques that lead to engagement and disengagement.

1. Lean Mindsets & Behaviors
Creating a High-Performance Climate for
Sustained Transformation
Mike Osterling & Karen Martin
AMEChicago2012
October 15, 2012

2. Learning Objectives
• The macro‐ and micro‐behaviors that are at the core of
excellence.
• How to identify the gaps between “what is” and “what
needs to be.”
• How to create an operational climate that enables
people to grow and succeed.
• How to develop Lean mindsets and behaviors
throughout your organization.
• How to instill and reinforce the new ways of operating.
2

3. Success with Improvement
2001 – The Economist
70%
63%
60%
50%
40%
30%
20% 17% 20%
10%
0%
None Temporary Lasting
3

4. …A Decade Later
2010 – Accenture
80%
70% 69%
60% 58%
50%
40%
33%
30%
20%
10%
0%
“Mixed” to Minimal Needs re‐evaluation,
“disappointing” financial restart or complete
results impact makeover 4

5. To Err is Human
Institute of Medicine, 1999
98,000 lives lost
Improvement Goal:
Reduce by 50%
in 5 years.
5

6. 6

7. Something Is Terribly Wrong…
Up to 98,000 people 180,000 Medicare
die from medical patients die annually
errors. from medical errors.
To Error is Human, Office of the Inspector
Institute of Medicine 2005 General 2011
1999 Progress has been 2010 33% hospitalized
slow. patients are harmed;
7% result in permanent
Journal of the American
Medical Association injury or death.
Health Affairs
7

8. We need to
improve
how we improve.
8

9. Self‐inflicted
9

10. A Chaos‐Cracked Foundation
Can’t Support Excellence
10

11. 11
Resilience
Agility
Business Results
Innovation
Continuous
Improvement
Problem Solving
that Reduce
Mindsets &
Behaviors
Chaos

12. Clarity
Engagement Focus
Discipline
12

13. “Effectiveness is a
habit.”
— Peter Drucker
13

14. Group Discussion
1. Clarity
2. Focus
3. Discipline
4. Engagement
14

15. Group Activity ‐ Behavioral Gaps
• Part 1 – Rate your organization (company, facility,
department, etc.). 2 minutes
– Which of the four behaviors is it weakest in?
• Part 2 – Move to the appropriate corner for your
weakest org behavior. 15 minutes
– Give examples of the lack of that behavior
– Which metric(s) do they affect (hard impact)?
– How do they affect customers, employees and/or
suppliers (soft impact)?
– Select one example & its impact to share with the full
group.
• Part 3 – Report out. 10 minutes
15

16. Activity: Behavioral Gaps
Hard Costs Soft Costs
Lack of Clarity
Lack of Focus
Lack of Discipline
Lack of Engagement
16

17. 17
Resilience
Agility
Business Results
Innovation
Continuous
Improvement
Problem Solving

18. 18

19. Junk Words* (10 mins)
• The line at Starbucks is long. _________________
• That car is expensive. ______________________
• That would be a long commute. ______________
* Conceptualized by Sammy Obara, Toyota by Toyota
19

20. Seek Unbridled Clarity Around…
1. The direction your organization is heading in.
2. Who your customers truly are and what needs
they have.
3. What value you deliver.
4. How specifically you deliver and support the
delivery of value.
5. Who delivers and supports the delivery of
value.
6. How you’re performing.
7. The language you use.
20

21. “Going to the gemba
has been life changing
for me as a leader.”
‐ Ginny Cattaneo, Sr. VP, Franklin
Templeton Investor Services
21

22. Lean Management System
Plant Manager
Standard Work
Value Stream Manager
Standard Work
Supervisor Standard Work
Team Leader Standard Work
Standardized Processes 22

23. Truth
Truth
Truth
Truth
Truth
Truth
Truth
Truth
Truth 23

24. 24
Resilience
Agility
Business Results
Innovation
Continuous
Improvement
Problem Solving

25. Distraction Kills
25

26. Focus Needs
1. Priorities – What are you striving for? What’s
important to accomplish THIS year?
– Products
– Processes
– Marketplace
– Margins
– People
2. Meetings – What’s the purpose of the
meeting?
26

27. Booz & Company Findings
90%
82%
80%
70%
64%
60%
49%
50%
40%
30%
20%
10%
0%
No written Conflicting Competing
priorities priorities demands
27

28. There is no such thing
as multitasking.*
* For cognitive tasks.
28

29. The Myth of Multi‐tasking
• It’s not possible to do two conscious activities at
once.
• You are “switch‐tasking.”
• David Meyer – University of Michigan
– Engineers switched between projects 5‐8 times per
day
– Each switch added 20 minutes of process time
– If switch only 5x per day, adds 1.7 hrs per day or 407
hours (10 weeks) of process time per engineer
– In company w/ 15 engineers = 3 FTEs* worth of labor.
* FTE = Full Time Equivalent
29

30. A Key to Apple’s Success?
“…saying no to 1,000
things to make sure we don’t
get on the wrong track or try to
do too much. We’re always
thinking about new markets we
could enter, but it’s only by
saying no that you can
concentrate on the things that
are really important.”
— Steve Jobs
30

31. Round 1
Task 1: Lack of focus causes chaos
Task 2: 1 2 3 4 5 6 7 8 9 10 11
12 13 14 15 16 17 18 19 20 21 22
Round 1 – Letter, number, letter, number: L, 1, A, 2, C, 3, etc.
_________________________________________________
_________________________________________________
31

32. Round 2
Task 1: Lack of focus causes chaos
Task 2: 1 2 3 4 5 6 7 8 9 10 11
12 13 14 15 16 17 18 19 20 21 22
Round 2 – full sentence, followed by numbers 1‐22.
_________________________________________________
_________________________________________________
32

33. The Countermeasure: Strategy Deployment
 Aka Hoshin kanri; policy deployment
 Hoshin – Direction; compass; shining needle
 Kanri – Management
 Two key parts: Creating the plan itself &
and fanatic management to that plan.
 Purpose: Organizational focus &
alignment
 Aligns everyone toward a few high impact
objectives while also keeping them
accountable for their commitments through
visual management and review.
33

34. Strategy Deployment Key Feature:
Catchball
What?
How? Executive
Who? Team
When?
What?
How? Senior
Who? Mgmt
When?
What?
How? Middle
Who? Mgmt
When?
What?
How? Frontlines
Who?
When?
34

35. Improve Productivity through Greater Focus
Productivity (Pounds Produced / Hr Worked)
115.0
Pactiv
108.0
Implements
Strategy 105.9
Deployment
101.0
95.2
94.0 93.0
90.6
87.0 86.3
84.8
80.0
FY '06 FY '07 FY '08 FY '09 FY '10 YTD '11
35

36. Activity: Achieving Focus
List Potential Projects
Lean Mindsets & Behaviors
Achieving Focus: Project Prioritization
Project / Priority
36

37. “Hoshin‐Lite” Annual Work Plan
PRE ‐ Gain clarity around overarching business needs.
1. List everything you could do (and that you are doing and
you plan to do).
2. Categorize into:
– Must‐do, can’t fail
– Maybe
– Eliminate
– Delay (next fiscal year)
3. Decide what you will do; gain consensus.
4. Prioritize and create plan.
POST ‐ Manage plan via weekly updates (may be able to reduce
to monthly reviews – but be careful!).
37

38. Achieving Focus
Categorize project list
Lean Mindsets & Behaviors
Achieving Focus: Project Prioritization
Project / Priority Must Do Eliminate Delay Maybe
Project A X
Project B X
Project C X
Project D X
Project E X
Project F X
Project G X
Project H X
Project I X
38

39. To create new
ideas is a gift, but
to choose
wisely is a skill.
‐ Ryan Morgan
39

40. Achieving Focus
Move “Maybe’s” into Other Categories
Lean Mindsets & Behaviors
Achieving Focus: Project Prioritization
Project / Priority Must Do Eliminate Delay Maybe
Project A X
Project B X
Project C X
Project D X
Project E X
Project F X
Project G X
Project H X
Project I X
40

41. Label Four Flip Chart Pages & Hang on Wall
Must do Maybe
1. List what you could do on
3x6” post‐its (active or
planned initiatives,
projects & improvement
activities). Gain consensus.
2. Categorize them (place
post‐it on appropriate
page. Gain consensus.
Delay Eliminate
3. Decide what you will do.
(Move “maybe’s” onto one
of the other three pages.)
Gain consensus.
41

42. Must do Maybe
Step 4
Prioritize
must‐do’s;
Create Plan
Delay Eliminate
42

43. PACE Improvement Prioritization Grid
9 22 17
23
8 3 21
Easy
10 4
13
5
15
Ease of Implementation
20 14
19 1
16
7 6
2 11 18
12
Difficult
Low High
Anticipated Benefit 43

44. Achieving Focus
Prioritize Must‐Do’s
Easy
Ease of Implementation
Difficult
Low High
Anticipated Benefit 44

45. Annual Improvement Plan
Company ABC
Priorities
FY 2012 FY 2013 Exec Tactical
Priority Others
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Owner Owner
MS‐2
MS‐1
Integrate DHR Begin Acct Brad P
Ops
Complete
Complete New
Travel Program Begin Complete Scott R Fred S
Roll‐out
Roll‐out Tablets to Begin &
Brad P
Installation Complete
Lisa D,
Complete 360 Marina,
Begin Complete Justin C Steve R
Roll‐out SM, Tech,
Hal, Doug
Create Line‐item
Begin Complete Lisa B Mark C
P.O.s
Refinance credit
Begin Scott R
facility
Complete ADP
Begin Complete Gary O
Roll‐out
Not
Develop & Roll‐out MS‐1 MS‐2 MS‐3
Begin complete Steve C TBD
Handheld 2.2 Clean Code Pilot Go live
until 2013
Complete GPS RDs Cons.,
Begin Complete Steve C
Roll‐out HR, Fleet
Complete "River"
(One Soft) Begin Complete Lisa B
Roll‐out
Develop Safety
Begin Complete Gary O
Program
45

46. Annual Improvement Plan
Tier 1 Priority: Executive Owner: Date Created:
Tier 2 Priority: Tactical Owner:
Background/Scope: Next Review:
Measurable Objective(s):
Core work team: Input/Review needed by:
Relationship to Annual Business Goal(s): Timeline
Status
= Original Plan X = Complete % (Red,
Due Complete Yellow,
2012
Date Green)
# Action Item Owner Deliverable Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
46

47. Frequent Status
Meetings Assure
Ongoing Alignment &
Distraction Avoidance
47

48. Sporting Goods Manufacturer
Product Launches Per Year
80
73
70
60 No additional
resources;
50 higher quality
40 products
launched
30
24
20
10
0
Pre‐Focus Post‐Focus
48

49. Rockwell Automation
25
20
20 Projects
15 Started
12 12
10 Projects
5 Completed
3
0
Pre‐Focus Post‐Focus
49

50. Avoiding the Shiny Ball Syndrome
(Organizational ADD) Requires…
• Clarity – about what really
matters & organizational
direction.
• Consensus – about how best
to get there.
• Courage – to actively choose
to “not do” or “not do now.”
• Commitment – to stick with
the plan.
From The Outstanding Organization, Karen Martin
50

51. 51
Resilience
Agility
Business Results
Innovation
Continuous
Improvement
Problem Solving

52. Greatness results from
Disciplined people engaged in disciplined
thinking that leads to disciplined
action.
— Jim Collins, Good to Great
52

53. Building Mastery Requires Deliberate Practice
53

54. How much deliberate practice?
10,000 hours Tied deliberate practice
(10 Years) to myelin development
54

55. Practice vs. Performance
Perform
Train 99%
100% 90%
90%
80%
70%
60% Train
50% Perform
40%
30% Perform
20% 10% Train
1%
10%
0%
Athletes Businesses
Jim Loehr & Tony Schwartz,
The Power of Full Engagement
55

56. Building Mastery
© 2012 Karen Martin & Associates, LLC 56

57. MASTERY
57

58. Discipline is Needed…
• Planning
• Decision making
• Executing
• Problem Solving & Improving
• Managing processes
58

59. “It takes a different kind of thinking to
solve a problem than the kind of thinking
that produced the problem.”
— Albert Einstein
59

60. “Most people spend more time and
energy going around problems
than in trying to solve them. ”
— Henry Ford
60

61. The Scientific Method for Problem Solving
and Improving
61

62. Clarifying the PDSA Cycle
Phase Detailed Steps
New
1. Define and break down the problem.
Problem
50‐80% 2. Grasp the current condition.
of the Develop
Plan 3. Set a target condition.
total Hypothesis
4. Conduct root cause & gap analysis.
time
Continuous
5. Identify potential countermeasures. Improvement
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. Reflect & share learning.
62

63. Developing PDSA Capabilities
Complex • A3 Management
• Kaizen Events
Simple • Daily Kaizen
63

64. Group Discussion
• How many of you are familiar with A3
Management?
• How many of you have a disciplined A3
development program across your organization
(including coach development)?
• If it’s a good idea, why aren’t more
organizations doing it?
• What can you do about it?
64

65. Discipline is Needed…
• Planning
• Decision making
• Executing
• Problem Solving & Improving
• Managing Processes
65

66. Every key process…
Clearly documented
2‐5 Key Performance Indicators
Continually
monitored & improved
66

67. How are you performing?
Gray – Highest industry quality scores
Purple – Median industry quality scores
Blue – Our quality scores
67

68. Value Stream Maps:
Gaining Clarity around Process Performance

69. Processes MUST be Clearly Documented,
Monitored & Improved
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
69

70. We need to shift our focus from
managing people
to managing processes.
70

71. Non‐standard Processes Yield Inconsistent Results
R1
R2
Inconsistent
People R3 Results
R4
Inconsistent
Processes
Standard Processes Yield Predictable Results
Desired
People Results
Standardized
Processes
71

72. Process Ownership:
Working On The Business
• All processes MUST have a process owner.
– Closer than farther from the work.
– Recognized as having the authority to lead
improvement.
• Accountable for process performance.
– Frequent measurement and review.
– Lead/organize cross‐functional problem solving.
72

73. Don’t Look Away. Ever.
73

74. Before improving a process,
understand –
really understand –
how it is being performed
today.
74

75. Traditional Mapping Method:
Process Flow Chart
How long does the process take?
How well is the process performing?
Where are the problems? 75

76. The Genesis of MBPM
Second Edition
August 2008 October 2012
76

77. What is Metrics‐Based Process Mapping (MBPM)?
• A visual process analysis tool, which integrates:
– Functional orientation of traditional swim lane
process maps
– Key Lean metrics:
• Lead Time
• Process Time
• Quality (Percent Complete and Accurate)
77

78. Metrics‐Based Process Mapping (MBPM)

79. Why Create an MBPM?
• To map admin / office processes
• Understand the steps, disconnects, waste, and
delays – at a micro level
• Measure process performance in terms of:
– Time (lead time and process time)
– Quality
• Visualizes the steps and flow
• Use as standard work for training and process
monitoring
79

80. Typical Current State Findings
Islands of value‐adding activities.
Shift the focus to the NVA elements.
Rework
First Step Last Step
Adding Value
Lead Time
80

81. MBPM Results
%
Process Before After
Improvement
New Hire
LT = 25.75 days LT = 17.5 days 32%
Logistics
Purchase
LT = 21 days LT = 8 days 62%
Requisition
Sales Order
PT = 2.7 hours PT = 1.3 hours 52%
Change
Supplies
17 steps 11 steps 35%
replenishment
Product Demo %C&A = 2% %C&A = 20% 900%
81

82. MBPM – Getting Started
• Define a clear scope – narrow and deep
– Define the first and last steps for the process to be improved
– Lay out the specific conditions for the process to be mapped
Metrics-Based Process Mapping Charter
Improvement Scope Leadership Mapping Schedule
Value Stream Executive
Date(s)
Process Name Sponsor
Specific Start/End
Process Owner
Conditions Times
Customer Demand
Facilitator Location
Trigger
First Step Mapping Team Food
Last Step Lead Provided
Boundaries & Briefing
Limitations Dates/Times
Required Briefing
Attendees
FS Implementation Logistics
Timeframe Coordinator
Improvement Drivers / Current State Issues Mapping Team
1 Function Name
2 1
3 2
4 3
5 4
Improvement Goals & Measurable Objectives 5
1 6
2 7
3 8
4 9
5 10
Potential Deliverables On-Call Support
1 Function Name Contact Information
2 1
3 2
4 3
5 4
Possible Obstacles Approvals
1 Executive Sponsor Value Stream Champion Facilitator
2
3 Signature: Signature: Signature:
4 Date: Date: Date:
82

83. Scope: Refining the Focus
Units
Domestic Consumables
Warranty
Service Parts
Order Non‐
Fulfillment Warranty
Units
International Consumables
Warranty
Service Parts
Non‐
Warranty
83

84. MBPM – Getting Started (continued)
• Select the team (most effective within a kaizen event)
– Highly cross‐functional – workers, upstream suppliers,
downstream customers, outside eyes, etc.
• Those who currently do the job
– No more than 10 individuals
– Don’t avoid the “difficult” people
– Include “outside eyes” if possible
• Use a skilled, objective facilitator
• Have a room with (long) wall space for 36” wide
butcher paper
• Map on consecutive days
84

85. Steps in Creating the Current State MBPM
1. Label the map (process, date, team or facilitator)
2. List the functions involved
3. Document all activities / steps
4. Review the map for completeness
5. Number the activities
6. Add activity‐specific information (metrics, etc.)
7. Determine the timeline critical path
8. Create the timeline
9. Calculate the summary metrics
10. Identify value‐adding (VA) and necessary non‐value‐adding
(N) activities
85

86. Documenting the Current State
Step 1 – Label the map in the upper right hand
corner.
– Include process name, conditions mapped, date,
and facilitator name and/or team members.
86

87. Document the Current State
Step 2 – Label the swim lanes with the functions
involved.
– Include external functions, if appropriate (e.g.
customers, suppliers/contractors, etc.)
– Sequence in which functions are listed is not
important
87

88. Document the Current State
Step 3 – Document all activities/steps on 3” x 6”
post‐its. Don’t include metrics yet!
– Use verb/noun format; clear and concise
– Include function.
– Separate tasks that have different quality outputs
or timeframes; combine tasks otherwise.
– Place post‐its in appropriate swim lane,
sequentially.
88

89. Document Each Activity
Activity
(Verb / Noun) Function that
performs the
task
Best to use
3 x 6” Post‐its
89

90. Step Step Concurrent
1 2 Activities
Ticking clock
90

91. Document the Current State
Step 4 – Review map for completeness
(someone other than the facilitator)
– Walk through the map, reading aloud.
– Verify sequence
– Add missing steps and barriers to flow (“flow‐
stoppers”) if any.
91

92. Document the Current State
Step 5 ‐ Number the activities
– Number the activities sequentially from left to right.
– For parallel (concurrent) activities, add “A,” “B,” etc.
• Example: Step 8A, Step 8B, etc.
– Don’t number the post‐its until the map is “final.”
92

93. Document the Current State
Step 6 – Add activity‐specific information
– LT – Lead time
– PT – Process time
– %C&A – Percent Complete & Accurate
– Number of people who perform the work
– Barriers to flow
• Batches
• Equipment downtime
• Shared resources, etc.
93

94. Key Metrics: Time
• Process time (PT)
– The time it takes to actually perform the work to
complete one item, if it could be worked on
uninterrupted.
• Lead time (LT)
– The elapsed time from when work is available to be
worked on until it’s completed and made available to
the next person or department in the process
94

95. Key Metrics: Quality
• %Complete and Accurate (%C&A)
– % of the time the downstream customer can
perform task without having to “CAC”:
• Correct information or material that was
supplied
• Add missing information that should have been
supplied
• Clarify information provided that should have
been clear
95

96. Add Activity‐Specific Information
Additional Information
# Staff
(if relevant)
Barriers to flow
(if relevant)
% Complete & PT
Accurate LT
96

97. Adding Metrics: Tips
• LT, PT and %C&A are typically acquired via
interviews – ask high‐quality questions.
• Usually looking for the “typical” LT and PT;
what happens 80% of the time?
• Select units of measure that are easiest to
comprehend (e.g. 6 hours instead of 360
minutes).
• PT is the time required to complete one “thing”
• If your LT is 4 hours, don’t debate a PT of 5 vs.
7 minutes.
97

98. Adding Metrics: Tips (continued)
• May be OK to group the LT for a series of
activities performed by the same function
(rather than each individual step).
• Place %C&A value on the post‐it of the source
step.
– If %C&A issues are identified by multiple
downstream customers, record each of the
%C&As on the Post‐it of the source step (can also
indicate on the Post‐it which step reported the
problem).
– 0% C&A is not uncommon
98

99. Barriers to Flow
• Look at the process from “the thing’s”
perspective
• Identify issues that prevent one‐piece‐flow of
the work
– Batching / periodic processing
– Rework
– Bottlenecks
– Handoffs
– Inventory
– Setup / changeover
– Physical layout
99

100. Document the Current State
Step 7 – Determine the “timeline critical
path” of the process
– For parallel activities:
• Don’t include “dead end activities”
– Steps / path which don’t move the process forward
(e.g. filing a document)
• If both paths are required to move forward,
select the path with the longest total lead time
100

101. Timeline Critical Path
Critical
Path
101

102. Document the Current State
Step 8 – Create the timeline
– Bring down the PT & LT from the critical path steps.
Timeline
102

103. Document the Current State
Step 9 ‐ Calculate Summary Metrics
– Critical Path PT
– Critical Path LT
– Activity Ratio (AR)
– Rolled Percent Complete and Accurate
(R%C&A)
– Total PT
– Labor Requirements
– Number of Activities
103

104. Summary Metrics: Time
• Timeline Critical Path PT
– Quantifies how much of the response time (LT) is
spent actually working on the “thing”
• Timeline Critical Path LT
– Measures speed of delivery to customer & an
indicator of cash flow
• Activity Ratio (AR)
– The percentage of time work is being done to the
patient/item/data passing through the process
– AR = (Σ PT ÷ Σ LT) × 100
– 100 – AR = Idle time
104

105. Summary Metrics: Quality
• Rolled Percent Complete and Accurate
(R%C&A) =
– %C&A × %C&A × %C&A × …
– Out of 100 occurrences, the number of times the
data/material/people pass through the entire
process with no rework required (expressed as a
percentage).
105

106. Summary Metrics: Labor Requirements
• Total PT
– Sum of all activities, not just critical path
– Factor in determining labor requirements
• # FTEs* Required (Total Labor Effort)
# FTEs Total PT (in hrs) X # occurrences/year
Required =
Available work hrs/year
* FTE = Full‐time Equivalent
(2 half time employees = 1 FTE)
106

107. Summary Metrics: Labor Effort
• Total PT
– Sum of all activities, not just timeline
• Labor Effort
Time = Total PT (in hrs) x # occurrences/year
Total PT (in hrs) x # occurrences/year
# FTEs* =
Available work hrs/year/employee**
Freed
= Current State FTEs – Future State FTEs
Capacity
* FTE = Full‐time Equivalent (2 half time employees = 1 FTE)
** Available work hrs/year = 2,080 ‐ paid holidays and vacations
107

108. Documenting the Current State
Step 10 – Identify Value‐adding (VA) &
Necessary Non‐value‐adding (N) activities
– Use small post‐its in different colors to
differentiate VA and N
– Monitor time allowed for debate
– Unlabelled activities = waste
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109. Value‐adding activity
Necessary non‐value‐adding activities

110. Metrics‐Based Process
Mapping (MBPM)
Simulation
Order Fulfillment Process:
Demand = 2,500 orders per year
Available work hours per employee per year = 1,800
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111. Create the Current State MBPM
Phase I
1. Label the map in upper right corner.
• Process name, date, facilitator and/or team members
2. List the functions involved in left column.
3. Document all activities/steps. No metrics yet!
• Verb/noun; concise language; include function as well.
4. Review the map for completeness.
5. Number the activities.
 One number per column; concurrent activities are labeled A, B, C, etc.
6. Add activity‐specific metrics (PT, LT, %C&A). (We are not
considering number of workers and barriers to flow in
this simulation.)
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112. Create the Current State MBPM
Phase II
7. Define the critical timeline path.
• Longest LT unless “dead‐end” step; use colored marker
8. Create the timeline.
9. Calculate the summary metrics
• CP PT Sum, CP LT Sum, AR, R%C&A, Total PT, Labor Required
10. Identify the VA and necessary NVA activities
• Use small colored post‐it labeled with “VA” and “N.”
11. Circle the step‐specific metrics that indicate the greatest
opportunity for improvement.
• Use red marker.
• Long LTs, low %C&As, high PTs, low step‐specific ARs
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113. Document Summary Metrics
Projected Projected %
Metric Current State Future State Improvement
Timeline
Critical Path PT
Timeline
Critical Path LT
Activity Ratio
Rolled %C&A
Total
Process Time
Freed capacity

114. Future State Design
• Goals
– Reduce overall LT & PT
– Improve quality (increase RFPY)
– Increase % activity
– Improve LT, PT, and %C&A at individual steps
• May need to perform root cause analysis before
determining countermeasures to realize the future
state
• Mapping steps
– Clean sheet or modify current state map
– Same steps as current state
– Calculate projected metrics
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115. Future State Design Considerations
• Eliminate steps / handoffs • Eliminate motion &
• Combine steps transportation
• Create parallel paths • Standardize work
• Alter task sequencing and/or • Eliminate unnecessary
timing approvals / authorizations
• Implement pull • Stop performing non‐value
• Reduce / eliminate batches adding (NVA) tasks
• Improve quality • Co‐locate functions based
on flow; create cells
• Create an organized, visual (teams of cross‐functional
workplace staff)
• Reduce changeover • Balance work to meet takt
time requirements
115

116. 116
Resilience
Agility
Business Results
Innovation
Continuous
Improvement
Problem Solving

117. Energy Crisis: Widespread Disengagement
11
7

118. Engagement Drivers: The Three C’s
Connection
Creativity Control
118

119. Engagement Drivers
• Connection ‐ to mission, annual goals,
immediate supervisor, people within the
organization, customers.
• Control – heavy involvement in decisions that
influence their work life.
• Creativity – Full use of talents, capacities,
potentialities, and skills
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120. It’s disrespectful to…
1. Not engage employees in work design and
improvement.
2. First blame people instead of systems and processes.
3. Not help employees develop skills.
4. Not coach employees through problem solving – on an
ongoing basis.
5. Have poorly designed processes which inhibit
performance.
6. Fail to create and clearly communicate organizational
goals and priorities.
7. Lack honesty and omit relevant information.
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121. Group Activity – Driving Engagement
• Three groups:
– Connection
– Control
– Creativity
• Each group:
– Identify activities and practices within your
organization that engage or disengage employees in
that area.
• Report out
121

122. Activity: Engage or Disengage?
Engage Disengage
Connection
Control
Creativity
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123. Reducing Self‐Inflicted Chaos:
Where Should You Start?
123

124. Places to Start…
1. Develop an intolerance for ambiguity.
2. Prioritize your work; reduce the number of
active projects at once.
3. Ban electronic devices from meetings.
4. Adopt a problem‐solving methodology and
deploy it broadly; get a coach!
5. Document, standardize and improve all major
processes with significant involvement of the
workers themselves.
6. Identify process owners and KPIs for each.
124

125. Group Activity – Closing the Gap
• Go back to your “weakest corner” (Clarity, Focus,
Discipline or Engagement)
– List the lean practices/methods/tools that can be used
to improve your organizations’ behaviors
– Report out to the class
• Next, look at your “self‐assessment” notecard,
select one of your organization’s weakest areas,
and begin creating a plan for how to start moving
the needle (what’s the problem, what are
potential root causes, what are potential
countermeasures, who needs to be involved, etc.)
125

126. As Outstanding as They Come…
Discipline
12
6

127. Mike Osterling, President Karen Martin, Principal
4320 Woodland Drive 7770 Regents Road #635
La Mesa, CA 91941 San Diego, CA 92122
619.572.3632 858.677.6799
mike@mosterling.com ksm@ksmartin.com
Twitter: @karenmartinopex
Subscribe: www.ksmartin.com/subscribe
127

128. Our
Books
October 2012
Just released Contributing Author
128