Quality through the decades has been an adventurous evolution for those who’ve lived through it … not for the faint of heart, the action adverse or those afraid of culture and business change.  These changes have affected what we expect, what we buy, and even what we tell our friends, family and extended social networks.

Today’s global economy and technology explosion create even more challenges to be addressed: increased expectations, increasingly complex products, shorter timescales, while making the consequences of failure much more severe.  In addition, there are new challenges : labor/social laws, green/environmental sustainability, banned substance and counterfeit vigilance and reputations that can change in minutes due to Internet viral communication.

Let’s take a quick journey at the changes in Quality over the pivotal decades of the 1980’s to 2010:

(Note:  While some industries and some geographic locations were more advanced during this time, the following represents the journey of most industrial manufacturing segments outside of Japan.  Foundations of Lean and Six Sigma have been part of the Toyota Production System since the 1950’s.)

1980’s

“World Class Manufacturing” was the 1980’s keyword, and companies were attending workshops on the Toyota Production System (TPS) and Total Quality Management (TQM).  Just-in-time, waste reduction and process mapping had just begun.

While Deming’s SPC tools and Points for Management had been around since the 1950’s, they had largely been ignored.  However, with the success of his work in Japan and his book “Out of the Crisis” in 1982, companies were trying to implement Quality Circles, control charts and SPC.  Internal First Time Quality levels (FTQ) were either not measured or poorly measured, and external quality measures were usually 4 digits or more in Parts Per Million (PPM) or DPMO – (although normally measured in percent, as PPM was just too mind-boggling).  While Six Sigma was being initiated in Motorola, it would be another decade before it became a culture-changing tool in most other companies.

Manufacturing plants weren’t very good at knowing the real quality levels they were receiving from their suppliers, and long-term contracts made them slow to demand improvement and slower to remove business.

Consumer product quality was unreliable.  Frustrated consumers didn’t expect their products to last much beyond the warranty period, and producers weren’t very responsive in resolving problems even during the warranty period.  However, Consumer reporting agencies were beginning to compare and print failure rates, complaints and customer satisfaction … awakening consumer awareness and influencing purchase decisions.

1990’s

In the 1990’s, the keyword changed to “Lean Manufacturing”, with the introduction of Tom Womack’s book “The Machine That Changed the World.”  Likewise, Jack Welch brought Six Sigma into GE in 1995, and into mainstream thinking.

While new concepts were being implemented, change takes time – especially culture change – and real performance changed gradually.  External quality measures were usually still in 3 digit PPM, but companies were beginning to make the mental change from percent to PPM.

Manufacturing plants increased expectations for their suppliers, but their tolerance was still long, often giving a troublesome supplier a year or more to turn around results.  Consumer expectations were increasing and producers were beginning to feel the pressure of consumer report comparisons.

2000’s

In the 2000’s, Six Sigma was common terminology, enhanced by Jack Welch’s book “Jack: Straight from the Gut” in 2001.  Now companies struggled with a new dilemma – deciding whether to implement Lean or Six Sigma – mistaking them as mutually exclusive concepts.  By 2004, Mike George coined the term “Lean Six Sigma”, integrating the two tools.

In addition, Design for Six Sigma (DFSS) and Robust Engineering were being introduced as techniques to optimize the design during development, rather than improving after production.  Indeed, with the fast evolution of new electronics features, the first run might be the only run before the product changed again – and profitability could depend completely on initial quality with no possibility of later improvement.

Inspired companies were now producing in 2 digit or single digit PPM, with a growing focus on Cpk as a measure of process capability to prevent defects from occurring, and dedicated programs to move distributions from 1.33 (4 sigma) to 1.67 (5 sigma) to 2.0 (6 sigma).

Manufacturing plant tolerance of poor supplier quality had significantly decreased; with 6 month or 3 month improvement horizons before financial penalties or business re-sourcing were initiated.  In addition, annual price reductions and global outsourcing became the norm.

Consumers had enhanced expectations of their products working well beyond the legal warranty period, and companies who offered free extended warranties enjoyed a marketing advantage over their competition.

Global service and customer satisfaction and environmental awareness were also expanding.  In 2000, ISO-9001 Quality Management System was revised to include customer satisfaction elements for both manufacturing and service industries, and became a universally accepted quality system certification.  Likewise, ISO-14001 was revised in 2004 to further define the standards of an Environment Management System to operate in an environmentally sustainable manner.

So Where does that Leave us Today?

We’ve come a long way … and hopefully you’ve kept pace with the changes.  However, in today’s competitive environment, it isn’t enough to just keep pace – you need to be remarkable:

• Manufactured quality needs to be at or near Six Sigma levels in order to remain cost competitive in a global economy.
• Lean principles should already be well implemented – because they not only reduce throughput time and eliminate waste – they also facilitate quality improvement and allow abnormal conditions to be easily detected.
• Not only do consumers expect perfect quality out of the box, they also expect it to last.  Extended warranties are assumed.  Design for Six Sigma and Robust Engineering applied at the development phase are critical to assuring the product will endure the stresses of use – under more and more varied conditions.
• Product users also want faster response and better service when there are issues, and on-line help and manuals.  Moreover, if they don’t get it, they are prepared to tell not just 10 friends, but also the entire world.
• Consumers also expect that even though products have more features, options and complexity, they should be user friendly and nearly intuitive in use.  In addition, Consumers expect that products can be modified or upgraded to new software versions or product generations.  Flexible, adaptable, expandable and serviceable are key words – as well as “common” for mating part interfaces.
• Extended supply chains cross continental borders.  As product complexity and cost pressures increase, product design, software creation, assembly tooling, test equipment and manufacturing may all occur in separate locations.  Program Management has never been so critical. Clear and agreed expectations, program milestones and performance requirements, and communication format and frequency are essential – as well as what will happen when they aren’t met.  Companies are responsible not just for Quality and durability, but also vigilance to:

–  Social and labor laws,
–  Environmental and recycling requirements,
–  No usage of banned substances, or counterfeit parts or materials, and
–  No infringement of intellectual property.

Any violation will be costly – in both damaged reputation and financial penalties.

The world is moving fast.  If you are left behind, it gets harder to catch up, is more costly to produce and leads to eventual loss of market as your competitors run faster.  If you aren’t where you want to be today … give us a call … we’ll get you back on the road.

As the ever present headaches of…
- trying to balance focus on maximising profit and margin v investing for growth
- implementing short term high impact initiatives v long term strategic thinking and planning
- focusing on a business as a whole (“corporate think” and control) or on its constituent parts (functional, geographical, product/service streams)
…cause CEOs and their senior executives to consistently strive for the next big thing or the next big idea, all too often the obvious is overlooked.

What is so obvious? Leveraging the talent already within their organisations.

As options such as outsourcing have become commonplace as a means to cost cutting and handing over “non-core” activities to other specialists, the core value of what is left, people, processes and resources, is not always improved or optimised for future benefit.

When organisations downsize, restructure or reorganise again the main focus is often cost cutting and again this leaves fewer people and/or the “wrong” people to create for, deliver for and service customers.

With fewer of the “right” people, (right being of the right cultural fit, appropriately skilled and with the right “organisational DNA” to fit an organisation’s stated mission and deliver its objectives successfully) there may be a need to lead people through a transition programme to make clear what the future now looks like and/or to recruit more people to complement existing capability and acquire new capability.

Key to making the organisational choices work will be the behaviour and attitude of the people who choose to play their part. The cultural mindset – an organisation’s core values and principles – needs to be defined and recruited for; it cannot be trained and as fitting in with an organisational culture or not causes so many problems it is almost more important than skill – which can be trained.

This is an opportunity to create a culture where an “entrepreneurial spirit” is a core value. This is an opportunity to create a culture of “intrapreneurship”.

Should this be a chosen course of action there are 3 key elements to consider

1. What are the core attributes of intrapreneurs?
2. What kind of environment will enable intrapreneurs to flourish and create value?
3. How can individuals develop and be recognised as an intrapreneur?

In part 2 I will address these questions.

Warren Buffet has been quoted as saying “Price is what you pay, value is what you get”

Both suggest value is in the eye of the receiver.

If that’s true and we apply it to a consulting relationship, what would clients probably NOT value?

* Egomaniacs pushing their off the shelf models of everything and anything
* Long reports that tell them what they already know but in a condescending know it all manner and to pay for the privilege
* To be charged fees that are in no way commensurate with the delivery of results
* Senior contract winners followed by schoolboy deliverers

Or is this too harsh? Surely there aren’t consultants that do that!

So what might clients actually value from a consulting relationship?

Well value can come in different guises.

It can be in the products or services that you offer e.g. workshops, training programmes or coaching. It can be in the skills, knowledge and attitudes of the people that work with them. It might even be in the alignment of a common set of principles and values.

Core value is what a client contracts with you to deliver. It is the delivery of the objectives set out in the contract as specified. Getting this right is pretty basic. Deliver what you said you would deliver exactly as you said you would (at the very least)

In addition to the delivery of core value you can also deliver unexpected value. This is when you help your clients improve their business or themselves in unexpected ways. For example,

Discovery: Helping them to see what they would have not seen or discovered by themselves.
Hidden Gems: Highlighting issues, problems or opportunities which would have gone undetected if you had simply stuck to your brief
Connection: Enabling connections for your clients to people, networks and information.
Reflection: Offering an objective ear as a sounding board or a fresh pair of eyes for an idea or problem.
Education: Enabling the transference of skills and knowledge to improve their organisational capability.
Facilitation: Acting as a guide and giving structure to problem solving, decision making and innovation
Change Management: Helping to align and engage people to changes in structure, process, or behaviours. Supporting clients to influence and communicate positive change.
Emotional Value: This might include having fun while working with you, getting promoted as a result of your joint work, feeling recognised and validated.

So when working with clients, strive to meet Einstein’s quote – “Try not to become a man of success but rather to become a man of value.”

At Total Flow we passionately believe unexpected value is part of our core value.

The principles of Lean thinking are

* Define value from the customer’s perspective
* Define the value stream activities for the waste free delivery of each product/service
* Align the value stream for continuous flow
* Manage demand at the pull of the customer
* Seek to continually perfect what you have created

However, Leanership™ goes further. It is about
* Creating and communicating a vision and strategic direction that highlights customer value, fosters profitable, enterprise wide growth and innovation
* Aligning the organisational stakeholders (internal and external to the enterprise) to deliver customer value
* Engaging with and inspiring all stakeholders (internal and external to the enterprise) to be accountable for delivering customer value
* Being sufficiently agile to thrive in and through times of uncertainty and change

The purpose of any business is the
1. Continuous delivery of customer centric value
2. Continuous delivery of innovative and profitable products and services appropriate to a chosen customer base
3. Continuous engagement of capable and accountable people in worthwhile work to deliver and improve the flow of value to the customer

If this is true then the purpose of the people within a business is to imagine, design, deploy and leverage structures, systems, processes, skills, knowledge and talent for the benefit of their customers and themselves.

To enable people to sustainably engage in this purpose is the rationale for Leanership™

The foundations of Leanership™ are outlined above and are applied through the following principles

* Always Start with the Customer
* Always Be True to Your Guiding Values and Principles
* Always Integrate Structure, Process, Systems
* Always Attract the Right People at the Right Time with the Right Skills, Knowledge, Talents and Behaviours
* Always Strive to Deliver Better Value for Your Customers

In part 3, I will discuss in more detail each of the princples of Leanership™

Do you have a view on Leanership™? Let us know by lwriting a comment we would like to hear your views

Much has been written about lean thinking; what it is, how it works, what the tools, techniques and concepts are and how different companies can translate those concepts into working models for their business.

Both leadership and lean thinking are seen as enablers for organisational success and yet…

– Many organisations still struggle to deliver sustainable profits and growth
– Many organisations still struggle to effectively attract, deliver for and retain their ideal customers
– Many organisations still struggle to be sufficiently agile to innovate and create remarkable products and services to compete in or lead their market
– Many organisations still struggle with the internal conflict of function/division v the business as a whole
– Many organisations still struggle to recruit, develop, retain and engage inspired employees who are capable and motivated to deliver for their customers

Perhaps it’s time for a different approach?

If the answer is yes, could that approach be Leanership™ – the art of leadership combined with the science of lean thinking applied by people to create lean enterprise.

In part 2 I will talk about what Leanership™ is and why it may be just that different approach to deliver real transformation.

COMPATIBILITY

Sales managers or directors need their teams to deliver for their company and their customers. They need their teams to collaborate effectively. Often this is interpreted, as we need people who are XYZ and who can do ABC i.e. a team of like minded individuals equally capable and equipped. Great managers say, “excellent teams are built around individual excellence. The manager’s role is to make sure that each individual is positioned in the right role…to balance the strengths and weaknesses of each individual so that they complement each other” (2)

Having a team with diverse skills and talents adds strength, as there are opportunities for flexibility and adaptability. As markets change, a company’s speed of reaction becomes paramount to maintaining competitive advantage. This may mean creating ad hoc teams or to use a military term “rapid reaction forces”.

These teams may consist of people who don’t know each other, aren’t located together and have no experience of the task/market or product they are being asked to deliver. However, through their diverse capabilities, talents, nationality and cultural awareness, as a compatible team, they can collaboratively determine their goal, plan and implement a strategy to deliver successfully much quicker and effectively than could a like minded group, who all think and act the same. Imagine a soccer team with 11 goalkeepers!

CONNECTIVITY

“…the reason for virtual team failure is directly related to the difficulties of building trusting, positive relationships across the three boundaries of geographical distance, time zones and cultural differences.” (3)

Where a company is a global player, the nature of its commercial teams is different. A salesperson may have to manage a multi-site and/or multi-country customer and become a global account manager. They need to manage a global strategy in local markets and deal with the differences of time, location and culture. They need to think and communicate differently to ensure their customer, their team, their manager and their HQ and support areas are kept informed and aware of what they are doing for and with their customers. Providing and using appropriate resources to manage this connectivity issue will often be a key factor in effectiveness. To truly share information and learn from it to benefit the customer e.g. develop new products, takes well developed communication structure and processes.

“If one part of the company learns something important about a process or market or customer, it has to be communicate to all…Sharing knowledge avoids re-inventing the wheel and with all players up to speed, less explanation is required to make changes and become more nimble in the market. That is the core of a learning organisation” (1)

As such sales managers will take the role of conductor and orchestrator ensuring that all the players keep in time, play the same tune and complete on cue together to give an unforgettable performance for their audience.

CREATIVITY

“Inside the successful organisations of the future, product developers must translate the customer’s changing needs into new products and services. Tomorrow’s corporate leaders will have to discover new ways to make sure that everyone in the organisation… keep their eyes on one thing; the customer” (1) If they don’t their competitors will.

If a more intimate relationship between company/salesperson and the customer is needed, the traditional selling methods of “selling” features and benefits won’t work. A more consultative/partnership approach needs to be adopted. This will involve people being industry, market and customer specialists. Only then can innovative or creative solutions be discovered. Maintaining the edge is crucial to success. Taking this one step further, means that companies need to create processes for dealing with change and having the will, resources and structure to exploit it ahead of their rivals.

Delivering global value to customers has a variety of implications for salesforces. To keep ahead of the competition requires capable people, compatible teams, connectivity networks and creative solutions. The task for company leaders is to provide the structure and resources for managers to deliver these for their people so they can deliver the value to their customers.

1 – The Great Business Challenges of the New Millennium – HR Chally 2002
2 – First Break All The Rules – Marcus Buckingham and Curt Coffman
3 – Grovewell.LLC www.grovewell.com

Capability

“Skills, knowledge and talents are distinct elements of a person’s performance. The distinction being, that skills and knowledge can be taught whereas talents cannot… Talents are recurring patterns of thought, feeling or behaviour that can be productively applied… They are a person’s mental filters.”

This has implications when recruiting and developing people for any part of your organisation where customer advocacy is required; and of course you could say that that should be everyone!

In order to identify the skills and knowledge a customer advocate needs may mean approaching recruitment and training in a different way. If you can’t train talents e.g. being proactive, building rapport, you need to select for it. Assuming you have selected people with talent and potential how do you determine the training, and development that will optimise their talents and uncover their potential?

Firstly identify the business outcomes you need your people to achieve; without business orientated outcomes training and development becomes a “so what?” activity adding no value to the individual, the company or the customer.

Secondly, create individual learning paths to optimise current skill and knowledge strengths, minimise weaknesses, develop potential and utilise talent. This may mean no more “sheep dip” training programmes. This may mean no more performance reviews constantly telling someone they need to be more proactive.

The insight of great managers is that “People don’t change that much. Don’t waste time trying to put in what was left out. Try to draw out what was left in. That is hard enough”**

** Both quotes are from First Break All the Rules by Marcus Buckingham and Curt Coffman

What if a company’s talent strategy was such that the right people were attracted to rather than fought for?

At the frontline of any company is its salesforce. The salesforce of the future will need to reconsider the way it “sells”.

“Tomorrow’s customers won’t just be looking for products they’ll be looking for solutions and services. In order to deliver them, companies will have to know everything about their customer’s organisation and how their products and services touch them… not only will companies have to figure out their customer’s current needs but they will have to work hard to anticipate their future needs as well….it will mean changing people’s mindsets from product centric to customer – service-centric” HR Chally

Building relationships to sell products is no longer enough. The salesperson of the 21 century needs to be a solutions provider, a business partner and a value creator for their customer. The increasing availability and usability of technology by companies means that there is greater transparency of price and product, so companies looking to develop and maintain long term customer loyalty need to transform their saleforces into customer advocates.

Traditional selling methods and their associated skills, will be less relevant, and more emphasis on building trust and rapport, creative thinking, needs analysis and partnership management will deliver the value customers expect. In a global context, these skills are even more critical as there are added dimensions of managing global strategies in local markets, understanding cultural differences and dealing with location, time and technological variations.

One person may live in UK, have their HQ in Germany and their client base in EMEA, another may live in USA have their HQ in France and their client base in Asia. Effectively managing people and strategies in this context increases the need for having the right people in the right jobs to best serve those differently located customer bases. “Companies will have to burst out of their traditional habits to become true learning organisations.” HR Chally 2002

To prepare customer advocates of the future and evolve current salespeople into customer advocates, there are 4 key areas that companies should focus on

CAPABILITY, COMPATIBILITY, CONNECTIVITY AND CREATIVITY.

Check back for part 3 when I’ll look at the first of the 4Cs – Capability

Many of you have probably been victims of initiative overload or on the receiving end of your executive teams need for “the next big thing to transform our business!”

* Why is it that the application of a total system is so rare?
* Why is it that taking a whole system approach to applying the principles of lean is the exception rather than the rule?
* Why are so many organisations creating more waste rather than eliminating it altogether
* Why is that the difficult decisions are ignored or avoided?

The trite answer is because they don’t get it or it falls into the all too difficult box.
However, in reality it can be difficult, it can be scary and it can be very complex and yet…. aren’t the benefits of doing it right first time far outweighed by the fantastic results that could be achieved?

What do you think