The LMJ September 2016

Technically Lean Exploring the technical sides of lean, discussing buzzwords, best practice and the bits that are bunk.

Organisations and interviews in this issue include:

In this issue: Matrix Organisations; More buzzwords or a real solution?

Cutting through the terms to see what actually works.

Does Agile Software Development Make You Lean?

So your software is lean, does that mean your organisation is?

Creating a High Reliability Culture A chat with a marine to see what it means to have a culture you can rely on.

the-lmj.com September 2016

EDITOR’S LETTER

Dear Reader... improvement techniques are the best way to find that extra effort and cut that unnecessary waste.

That is why in this month’s issue, we are looking at the technical details of these subjects to see where those ever so important marginal gains.

We look to establish whether it’s a buzzword or brilliant. Whether it is new best practice or a waste of time.

Editor

Fred Tongue

We have an article from Ben Salder who writes about what a Matrix Organisation is and whether or not it is the next big thing when it comes to optimising your organisation.

f.tongue@hennikgroup.com

Managing Editor Victoria Fitzgerald

v.fitzgerald@hennikgroup.com

Creative Director Jamie Rector

Gustavo Gomez makes sure that as an organisation, you are making sure your processes are aimed at the right people and to make sure that your focus is in the right area.

j.rector@hennikgroup.com

September marks the end of the summer and the start of the run up to Christmas in the world of business (I apologise for mentioning Christmas so early). At this point of the year things tend to ramp up, whether it is production, output or orders being made it tends to get busier.

At this point of the year, with everything picking up pace now is the time to try and eek out any savings, find any efficiencies and cut any waste you can.

With organisations approaching capacity lean, operational excellence and continuous

We also have a question and answer section with Bob Koonce where he talks about high reliability cultures, as a preview to what he will be speaking about at the Operational Excellence in Oil and Gas Conference that will be taking place in November.

These articles raise some great points about the technical side of lean and similar topics.

not seem like the most business critical process, but if these things lead to miscommunications, misunderstandings and time wasted then it could be costing your organisation over the course of weeks, months and years.

Whether it is technical knowledge of a certain topic, how something is worded or even the equipment that you use, it can all create bottlenecks and interruptions to the workflow.

This issue of The LMJ hopes to try and make it easier for you to distinguish where your organisation is losing time and wasting resources by combing through the technicalities that could be holding you back.

It may not seem like a big issue, but if it takes an employee 30 seconds to move an item everyday, over the course of a year it will add up. It is these time savings that can unlock hidden potential. It pays to look at the technical and details so you can get a serious wrangle on how your organisation operates.

I hope this issue gives you some food for thought and helps you to make those all-important marginal gains.

Happy reading

With lean, continuous improvement and operational excellence the devil is in the details and consistent, marginal gains are some of the most important that there are.

The location of equipment and the wording of instructions may

Fred Tongue Editor

In order to receive your copy of The LMJ kindly email lmj@hennikgroup.com or telephone 0207 401 6033. Neither The LMJ nor Hennik Group can accept responsibilty for omissions or errors.

Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

CONTENTS

4 - - - - - - -

MEET THE EDITORS

5 - - - - - - -

NEWS PRINCIPLES AND PURPOSE

8- - - - - - -

Matrix Organisations; More buzzwords or a real solution?

Ben Salder talks us through what there is to gain by changing your organisations mindset, rethiking processes and becoming a matrix organisation.

14- - - - - - -

Does Agile Software Development Make you Lean?

20- - - - - - -

How to be customer led and why there isn’t any other option

22- - - - - - -

When Employees Create their own High Performance Culture - The Rapid, Mass Engagement Process

Francis Miers, gives us the lowdown on the different software development tools, what they do and which is the best for lean organisations.

Gustavo Gomez discusses how to make sure your organisation is customer focused and that the end user feels valued.

Frank Devine outlines what Rapid, Mass Engagement Process is and shares with us some of the results that this way of thinking has produced.

Q+A 30- - - - - - -

Creating a High Reliability Culture

Laura Methot of CLG Canada speaks to Bob Koonce, former commanding officer of a nuclear submarine about how the skills necessary in the Navy can be translated to business and operational excellence.

36- - - - - - - LEAN ONLINE 37- - - - - - - LEAN EVENTS 38- - - - - - - SUBSCRIPTION FORM

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MEET THE EDITORS

Our experienced editorial board members contribute to the journal providing comment against articles and guiding the coverage of subject matter.

John Bicheno

Rene Aagaard

Jacob Austad

Novo Nordisk, Denmark

LeanTeam, Denmark

Lean Enterprise Research Centre, Cardiff Business School

Bill Bellows

Brenton Harder

David Ben-Tovim

President, In2:InThinking Network

Commonwealth Bank of Australia

Flinders Medical Centre, Australia

Gwendolyn Galsworth

Joseph Paris

Sarah Lethbridge

Visual Thinking Inc., USA

Operational Excellence Society

Cardiff Business School, UK

Malcolm Jones

Torbjorn Netland

Dr Nick Rich

Industry Forum, UK

Nowegian University of Science and Technology, Norway

Swansea University, UK

More information about our editorial board. their experience, and views on lean is available on the LMJ website:

Steve Yorkstone Edinburgh Napier University, UK

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NEWS

Siemens continuously improve their paperless manufacturing system Siemens is launching Version 6.1 of its Simatic IT eBR software, which is at the heart of its Manufacturing Operation Management for the life science industries. The new version of the software enables users to easily implement paperless manufacturing solutions by offering two main features: A new web-based MBR (Master Batch Record) module which helps the management of key process parameters, and native integration

with the Siemens automation layer (Simatic PCS 7 process control system and HMI systems). The new version reduces the work involved in engineering and operation, helps users to enforce standardization and makes for a more transparent production process, so shortening the time-to-market.

Siemens offers a paperless manufacturing solution for enhancing both efficiency

and product quality, while at the same time bringing down risk and costs. Fully integrated communication is established between the automation level and manufacturing IT. This enables complete electronic recording and documentation of quality-related production data, while eliminating time-consuming manual procedures and paperbased batch reports.

Florida electronics manufacturer flicks the lean switch MC Assembly, a mid-tier electronics manufacturing services (EMS) provider, is introducing the lean management training of the Incito Consulting Group across its three North American manufacturing facilities.

Incito Consulting Group is introducing its five-step deployment model to MC Assembly’s manufacturing plants located in Florida, Massachusetts and Mexico. The five-step

plan highlights vision, analysis, knowledge, deployment and sustainment.

“As we continue to expand our capabilities and roster of customers, our focus on lean manufacturing principles needs to remain laser focused,” said Luis Ramirez, chief operating officer for MC Assembly. “Incito and its unique training deployment give us that focus.”

“Our team came away from the training with not only a successful approach to real-work challenges but also an increased focus on applying the lessons to our organization on a daily basis,” said Ramirez, who scheduled a second session for Zacatecas as well as a rollout in the company’s North American headquarters in Florida.

In August. “We’re excited to see where the training takes us.”

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NEWS

Lean leader recognised in global who’s who of business May-Leng Yau-Patterson has been recognised by Continental Who’s Who as a Pinnacle Professional in the automotive industry for 2016.

May-Leng is the head of world class manufacturing Mexico operations for what used to be Chrysler Group LLC. While holdig

this position she leads in coaching plat managers and leadership teams in the implementation of World Class Manufacturing (WCM) methodology. She has seen the development and engagement of the workforce in applying WCM tools and methodologies.

“it is imperative to adopt best manufacturing practices like lean manufacturing to achieve the productivity and enhance the quality of the product.”

Indian looks to boost manufacturing sector by looking to lean Director of the National Productivity Council, K.P Ashwin recently said the Union Ministry of Micro, Small and Medium Enterprises (MSME) has launched the ‘Lean Manufacturing Competitiveness Programme for MSME’s to help improve the competiveness of manufacturing.

Originally launched in 2009 covering 100 clusters across india, the scheme has now been upgraded due to the success and will include 500 more clusters. Lean Manufacturing Consultants (LMC) will work with selected MSMEs in designated clusters, funded by the government.

The programme will look to help MSMEs reduce costs by managing space better, scientific inventory management, improved process flows, reduced engineering times and proper personnel management, Ashwin said.

Up to 80 per cent of the project cost for each cluster will be paid for by the government. Ashwin welcomed MSMEs to make full use of the scheme and assured full support in implementing the scheme.

N. Muthukumar, Chairman, CII Mysuru, said, “it is imperative to adopt best manufacturing practices like lean manufacturing to achieve the productivity and enhance the quality of the product.

“Thousands of companies worldwide have achieved tremendous productivity and return on investments through these techniques and in automotive sector, we have witnessed many success stories.”

New lean base for New York manufacturer Centrotherm Eco Systems, an international advanced energy technology company, moved into its new, expanded manufacturing facility in Albany,New York.

With this larger location and expanded operations, the company will now manufacture polypropylene vent systems in New York State. Centrotherm

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has made a number of facility improvements at its new location, including electrical upgrades, a production layout more conducive to lean manufacturing practices, the purchase of a new belling machine, and the installation of permanent racking.

Centrotherm recently invested an additional $1.2 million in

capital equipment to support workforce training and prepare for increased production of polypropylene piping at the Albany manufacturing facility.

The new facility is over 47,800 square-feet, which enables Centrotherm to continue operating in the Capital Region by expanding its national and international business.

NEWS

Accolade inbound for Ryder Ryder System Inc, a provider of commercial fleet management, dedicated transportation, and supply chain solutions, has been included in Inbound Logistics Top Third-Party Logistics Providers 2016 thanks in part, to its use of lean operating systems.

“Ryder is trusted to operate behind the scenes of some of the best run supply chains in the world because of our experienced people, deep industry expertise, and lean operating systems,” said Steve Sensing, President for Global Supply Chain Solutions, Ryder.

Lean project management startup manages strong numbers

Clean bill of health in lean Tanzania

LiquidPlanner, a Seattle based online project management software company recently completed its biggest deal ever, after releasing figures that show year-on-year growth of around 40 per cent over the last four years. The firm is also on track to hit $10m in annual recurring revenue and break even in cash flow this year. This is all on the back of the announcement that is has released a new version of its software specifically designed for small businesses.

She went on to describe the product, “We’ve created a platform that is much more fluid and flexible and can actually adapt to the changes happening every hour of the day and still give you really good predictability into what you can do with the team you have.”

The Japan International Cooperation Agency (JICA) is visiting 27 regional hospitals in Tanzania to improve health services and their delivery.

LiquidPlanner currently has around 1,800 organisations using its software.

“Can we receive better services continuously from hospitals? For continuous improvement of service delivery in the hospitals, 27 heads of Regional Referral Hospitals (RRHs) from 25 regions gathered from July 19to 21 to report progress of their kaizen activities for improvement of health resource management,” said JICA Chief Representative, Toshio Nagase.

Liz Pearce, the company’s CEO says that the company is focused on creating a product that has a lean business model and stands out from the crowd. “Because we have an offering that is really different in the market, it allows us to compete more efficiently with other competitors that are all essentially one in the same with different trimmings,” Pearce said.

“It allows us to compete more efficiently with other competitors that are all essentially one in the same.”

JICA has said that it will be using kaizen to help ensure that clients get the best care possible while also enjoying clean and comfortable hospitals.

At an annual meeting the progress of the project was shown at these regional hospitals and demonstrated that best practices were emerging and that management strength is also growing in these hospitals.

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Matrix Organisations; More buzzwords or a real solution?

Ben Salder talks us through what there is to gain by changing your organisations mindset, rethiking processes and becoming a matrix organisation.

Lean in the Product Development world is being seen more and more by industry as key to gaining a competitive advantage but as with so many Lean concepts, the tools are being adopted without due consideration being given to how the organisation will respond and indeed thrive in this new world.

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Lean Product Development relies heavily on cross-functional working with various people leading at different times throughout the development cycle. It also relies on turning the principle of Design for “X”, where “X” can be Manufacture, Assembly, operability, through life

Ben Salder Guest lecturer, Warwick University

PRINCIPLES AND PURPOSE

support, into an organisational construct to enable teams to effectively operate within this environment; something which is often missed.

I’d like to share some of the experiences and lessons learnt and experience gained by moving from a Prime Contractor environment, into a truly collaborative environment, through a new product

requirement to cope with multiple complex projects at the same time and reflect the complexities placed on an organisation in the internal organisational structure.

Never has this been truer than the environment in which many companies today operate due to geographical diversity, eternally shifting customer and consumer requirements, constant evolution and revolution within technology and the changing barriers for entry into markets.

design process would lead to a better design and also improved ownership of the design. This was also referred to as concurrent or simultaneous engineering.

Naturally as the Design for “X” concept developed, the fit of the matrix organisation has overlapped with it and organisations have adopted the matrix approach to fit with the design, manufacture and through life service of products.

The benefits of this approach, as defined by Morgan and Liker (2006), are; •

Align the different functions around common goals and objectives that are needed for creating products that satisfy customers.

Communicate and coordinate effectively to reduce lead times Make well-informed product and process decisions from multiple perspectives to increase product quality Create self-managing teams to be flexible and adaptable to changes in the environment

•

• The construct of the matrix organisation

development cycle, and the challenges associated.

The behaviours required by everyone within this environment are significantly different from those expected within a functional organisation as the relative clarity of the reporting lines within the hierarchy are replaced by multiple reporting lines for the individual.

So where does the idea of the Matrix Organisation come from?

The origins of the matrix organisation date back to the Aerospace industry in the 1950’s when there was an emerging

• A matrix organisation deliberately trades some clarity in terms of organisational construct and role in return for increased agility. This in turn allows the organisation to respond more quickly and balance priorities on a daily basis.

Design for “X” is a concept, which first began in the 1980’s with the introduction of Design for Manufacture whereby the design teams started to consider how the products being designed were to be turned into finished goods. Originally the concept focussed purely on the design team operating in isolation but as organisations adopted this principle there was a realisation that involving the manufacturing team in the

The Principles of the Design for “X” Construct There are a number of key principles on which the Design for “X” construct is based.

1.

Shift effort to the left -By increasing the effort in the early stages of the programme, the effort required further downstream

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in text and on courses over the past 20 years and leaders see the value in this; however this is not enough to guide people through such a significant shift in mind-set and operating model. Everyone has to feel engaged, to understand the reasons for the change, to understand the impact on them as an individual and to feel that they are a stakeholder in this new organisation. By simply telling people what is going to change and give them a chance to feedback through a website or in a mass meeting is not enough to build the emotional link required.

is reduced. Including representation from the downstream elements of the programme such as Manufacturing, end users and through life support staff, the design will be more robust and will fulfil the maximum number of requirements.

This supports the concept of set based concurrent engineering.

2.

3.

4.

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Conflict is healthy - Within a matrix organisation, conflict is natural due to the conflicting requirements of the 2 sides of the matrix. This can provide hugely positive tension providing that those operating within the matrix appreciate this, have the tools to deal with this and have the support from the leadership team to resolve conflict appropriately to achieve truly collaborative solutions.

Lead by example - In an environment where uncertainty will be natural in the beginning, the role of the leader is vital. Each leader will be looked to for the right behaviours and alignment between their actions and their words. The moment that there is a disconnect, either between the individual leader’s actions and words or between leaders, confusion will start to occur and the focus on strong leadership will be greater. At this point the shadow that the leader casts in terms of actions and words will be vital for success.

Engagement and Communication Communication is a subject which has been well covered

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5.

6.

Effectiveness over efficiency - In traditional hierarchical organisations, becoming more efficient as a function is seen as a positive however this is sometimes achieved at the expense of being effective across the organisation. Within a matrix organisation the overall effectiveness of the organisation must be the primary focus in order to ensure that all elements of the design are integrated and the best solution is achieved.

Define the culture by the habits - Culture change is a huge subject in its own right and has formed a huge part of the work done in embedding the organisation however the principle used is quite simple. The culture of any organisation, family or social group is defined by its habits (Duhigg 2012). In order to change the culture

of a group, the behaviours need to change. In order to change the behaviours, the actions need to change and in order to change the actions, the habits need to change. There is therefore a direct correlation between habits and culture.

The impact of habits on culture

• • •

•

An example of this is where a team were asked the 4 key questions across Safety, Quality, Cost, Delivery & People (SQCDP) by the leader of the team.

What is your plan?

How did you perform against this plan?

What are you doing to close the gap (between plan and actual)?

What support do you need (to achieve the plan)?

By asking these same 4 questions every morning across SQCDP the team quickly came to understand what was required of them.

The culture became one where the leader was more supportive of the team, the team itself was comfortable in reporting a red status as long as they could articulate what they

PRINCIPLES AND PURPOSE

were doing to recover the gap and most importantly a daily conversation became the norm, allowing other issues to be raised in a safe environment.

7.

Build the Understanding of the Organisation first Traditionally business focus on building the technical capability and the product knowledge of the individuals within their organisation however by focussing on building an understanding of the organisation structure and how to work within that organisation structure, solid foundations are built on which to maximise the technical and product knowledge of the team. The Organisation Development temple below shows that traditionally the focus is placed in the pillars of the temple; not the foundations!

Great theory- What about the reality?

There are a number of challenges and opportunities to implementing a matrix organisation, below are some of the key points.

Challenges As with most changes, there is a desire to minimise the impact on the individual by trying to make the new organisation feel the same as the previous organisation. This is done by forcing existing roles and behaviours into the new organisational construct but this has the reverse impact and makes the move to the new organisation more difficult.

It is vital to align the processes and systems to the new way of working so that they are

supportive of the new structure.

This makes it easier for individuals and teams to operate within the new organisation as the behaviours are systemically embedded within the organisation.

Mobilising the leadership population to ensure that they are aligned and supportive of the change is critical in order to lead the teams effectively. It is also critical to increase the capability of the leadership team to be able to articulate the vision, the future state and the journey to move from one to the other.

Opportunities For the individual there is increased ownership & job satisfaction as they are seen to be trusted to operate within the framework of the organisation rather than feeling that they are being more controlled within the functional organisation.

For the business there will be increased agility & responsiveness as the right people start working together in a more natural manner.

For the wider collaboration there will be a systemic dismantling of silos due to organisational construct driving people to work across multiple teams, multiple functions and even across different businesses. This is done through the integration of multiple parties, be they functions or organisations, around common goals thus moving to a more working group style as the relationship builds and then on to true team working.

The Organisation Development temple

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From John Fisher’s Transition Curve, Fisher (2005)

So what did we learn when we did this?

Get people involved in the definition of their organisation; rather than making the change for the organisation, success was increased when the team were involved in the definition of how they would operate within the new matrix construct and how they could apply the capability given to them during the training.

Role clarity and goal clarity; while, by its nature, the matrix organisation trades clarity for agility, it is vital for the individual to understand the remit of their role and what their purpose / objectives

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are so that they are empowered to make decisions within the framework of the organisation.

This empowers the individual and makes decision making more effective as these decisions are made locally by those best placed to make the decision.

Plan Do Check Act – regularly review with honesty; spend time really understanding what the issues are and ensure that the right people are involved in this cycle to get the maximum from it.

Spend time working with people to understand what’s in it for them; the people within the organisation will only adopt the new organisational construct if they understand the reasons for

the change, what the benefits for the business are and what the benefits for them as an individual are. Telling people won’t work, they need to be engaged in the changes and have an opportunity to go through the change curve.

The focus should be on moving everyone through their own personal change / transition curve so that they are bought into moving forward with the change.

Consistency in leading by example; the leadership team have to go the extra mile to set the standard, after all the highest standard that can be expected from the team is the lowest standard demonstrated by the leader! The leadership team need to not only coach

PRINCIPLES AND PURPOSE

“Get people involved in the definition of their organisation; rather than making the change for the organisation, success was increased when the team were involved in the definition of how they would operate within the new matrix construct and how they could apply the capability given to them during the training.”

Building capability curve, (Salder 2010)

the team through the change, they need to set the expectations and demonstrate the behaviours required at all times. This is what really differentiates companies such as Toyota.

Give people the skills and capability to shape their own future; spend time ensuring that people believe in the value of the organisational construct, gain an understanding of the

methods of operation, obtain the skills required to operate within the organisational construct and then coach them to develop the capability to maximise the benefits of the matrix.

REFERENCES Duhigg, C. 2012. The Power of Habit, 124-125. London, William Heinemann Fisher J M, 2005, A Time for change, Human Resource Development International vol 8:2, 257 – 264, Taylor & Francis Kotter, J.P. The Big Idea – Accelerate! 46 – 58 Harvard Business Review November 2012 Morgan, J.M and Liker, J.K. 2006, The Toyota Product Development System, 140 – 141, New York, Productivity Press Salder, B.J. Lean Learning, The Lean Management Journal, September / October 2010, 21 – 25, Hennik Research

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Does Agile Software Development Make you Lean?

Director of Automation Consultant Francis Miers, gives us the lowdown on the different software development tools, what they do and which is the best for lean organisations.

Lean methodologies and Agile methodologies are often compared, but how much do they really have in common?

Lean methodologies originated at Toyota in the late 1940s and early 1950s. The emphasis was on eliminating waste and continuous improvement in the manufacture of cars. Toyota’s methods contrasted with the received wisdom of the day, which held

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that economies of scale were the key to manufacturing efficiency.

Large inventories of parts would be built up because it was cheaper to make them in bulk, and the production line would be kept going at all costs, because every hour of lost production was expensive. Any defects which crept into the cars in production would be rectified in post

Francis Miers Director of Automation Consultants

PRINCIPLES AND PURPOSE

production processes outside the main production area. Toyota’s way was very different.

If any defects were spotted in the components entering the production line or the methods used in the line, production would be stopped immediately until the problems were resolved.

Inventory was kept to an absolute minimum. One of the ways this was done was through the use of Kanban, meaning board or sign in Japanese. When a certain process was running low on components, it would send an empty trolley with a Kanban (a board) to the part of the factory which made the components (or via goods inward to an external supplier), and the trolley would then be filled with the component and sent back. Components would only be supplied on receipt of the Kanban, which ensured that they were only produced to fulfil real demand, greatly reducing waste.

Toyota placed waste reduction and continuous improvement at the centre of everything it did, and strove to train all its employees in these principles and empower them to apply them.

These methods led to Toyota’s great success and have been widely admired and adapted, as “Lean” management methods, to processes beyond car manufacturing, such as project management and software development.

How did Agile get started?

Agile software development was born of the failure of many software projects which had used traditional waterfall methods.

In traditional waterfall methods the steps of a project are done in strict sequence, with each step carefully documented and approved. No phase is started without documented completion and approval of the previous one. The main weaknesses of waterfall methods are that they

are poorly adapted to changes in customer requirements, and any defects in the software tended to be discovered only towards the end of the project. Changes in customer requirements cause problems because the customer requirements are extensively documented, and a whole hierarchy of other documents is based on the requirements documents, such as functional and non-functional specifications, specifications, design documents, development plans, budgets and test plans. A change to a customer requirement may flow through to dozens of other documents which must in theory all be revised and re-approved. In large projects, these documents may run to thousands of pages, and have dozens of approvers.

Obtaining sign-off can take months. If changes to the requirements occur (which they do in most projects) the project either takes on major delay and cost overrun, or the strict adherence to the documentation and sign-off requirements is abandoned in order to make progress. To make matters worse, all too often customers only notice that changes are needed to the requirements at the end of the development phase when they get their first glimpse of the software in action. The redesign, rework and loss of time are thus much greater than they would have been if the changes to the requirements had been made in the early stages of the development phase. Many important projects failed or had huge delays and cost overruns as a result of these issues. Examples in the UK include the Taurus trading system of the London Stock Exchange, which was cancelled after ten years and £75 million spent; and NERC, the National Air Traffic Services’ air traffic control system, which did go live, but only after six years’ delay and £500 million of overspend on an original budget of about £200 million.

In both cases, shifting customer requirements were a major factor in the delays. The experience of Taurus and NERC were widely repeated on a smaller scale across the IT industry. This was the context which led to Agile, and the term Agile was coined to contrast with the supertanker-like unsteerability of a large waterfall project.

Agile methods originated as a number of different software project management disciplines which had in common an emphasis on developing working code early on in the project, obtaining early and frequent feedback from the customer and less emphasis on formal documentation as a prerequisite for progress. These methods included Scrum, Extreme Programming (XP), Feature-driven development (FDD) and the Unified Process (best known as the Rational Unified Process).

In 2001, representatives of these methodologies came together and published the Agile Manifesto, which sets out twelve principles which capture the essence of Agile. At the time of the publication of the Agile manifesto, Agile was regarded with suspicion by many organisations, especially large ones with well established rules. There was suspicion the Agile did not produce enough documentation for complex IT systems, and there was a suspicion that Agile did not lend itself to planning to meet deadlines. Since then, however, Agile has shown itself to deliver better results than waterfall for most types of software development project, and it has gradually become the preferred method of software development across the industry.

Agile and Lean do not have the same origins. One came out of a need to improve on software development method; the other from vehicle manufacturing. They

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do, however, share a remarkable amount in common. Common traits include the following:

•

•

Emphasis on short work cycles: in Agile, the customer is consulted frequently – in Scrum after every sprint. This reduces the risk of code being developed which the customer does not want.

In Lean, small batches of components reduce the risk of components being produced and not used.

Emphasis on quality: in Agile, testing is done often and early, with every sprint or even as code is written. Defects are fixed early, at the latest in the next sprint. In Lean, the production line is stopped if defects are detected. The idea is to get it right first time

•

•

Once an organisation decides to adopt Agile, what is the best way to do it? Unfortunately, Agile cannot simply be mandated by top management and adopted overnight. A major cultural change

Tool

is necessary at all levels of the organisation concerned with software development. The twelve principles of the Agile Manifesto give an idea of the mindset required: frequent customer consultation, short delivery cycles of working software, placing trust in the members of the develop ment team. Another important element of the Agile Manifesto is “we value individuals and interactions over processes and tools”. An important starting point, therefore, is to bring in expertise, whether by using consultants, training existing staff in Agile methods or hiring new staff with Agile expertise. From here, pilot projects can be set up in preparation for a wider roll-out.

In any case, it will take time for the culture of Agile to bed down the organisation, and the primary focus should be on the people,

Pros

Cons

JIRA Software

Integrates with rest of Atlassian suite.

Some features depend on addons which are not available in the cloud.

VersionOne

Good for larger organisations.

Has integral portfolio management.

More complex product, harder to learn.

LeanKit

Good for Kanban.

Does not support Scrum.

CA (formerly Rally) Agile Project Management

Has integral portfolio management.

Complex user interface, lack configurable reporting.

Microsoft Visual Studio Team Service

Integrates with rest of Microsoft technologies.

Weak for non-Microsoft projects.

Pivotal Tracker

Slick visual interface.

Weak at scale, less well adapted to large organisations.

Figure 1

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and avoid the waste that comes with rework.

Emphasis on training and empowerment. In Agile, teams are encouraged to “self-organise” and find their own solutions to problems they encounter. In Lean, there is an emphasis on training and on decisions being taken at the lowest practical level.

The production line can be stopped on quality grounds by very junior people.

The idea of the Kanban board has made it directly into Agile.

One of the leading Agile methods is Kanban.

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PRINCIPLES AND PURPOSE

“Agile was regarded with suspicion by many organisations, especially large ones with well established rules.”

and imbuing them with the Agile ethos. If this is done successfully, the people will decide on which flavour of Agile and which tools are best for them.

The team is likely to choose a tool from one of the leading ones summarised in the table below.

There are, however, hundreds of Agile project management tools available and those listed below is just a small selection.

Even before choosing a tool, the Agile leaders in the organisation will most likely choose an Agile methodology. The leading methodologies can be seen in figure 2.

Scrum is the most popular method.

In a recent survey, 58% of the teams surveyed used it, compared to 10% of the teams using the next most popular methodology, a hybrid of Scrum and XP. Scrum is designed for software development projects. Activity is organised into “sprints” of 2-4 weeks, during which the aim is to produce working software.

The customer is consulted at the end of each sprint and shown the progress of the sprint. Scrum specifies a number of other procedures, such as a short daily meeting of the team, a “standup”, and a retrospective at the end of each sprint.

XP is similar to Scrum, but has

shorter iterations and is more prescriptive about how the software is developed. For example, it advocates performing a lot of testing, and this has evolved into what most now see as a separate methodology, Test Driven Development (TDD). In TDD, tests are written for each piece of code before the code itself is written.

Kanban takes a slightly different approach to Scrum. Unlike Scrum it does not mandate sprints, retrospectives or daily stand-ups, although they can be added to a Kanban team. Kanban does, however, limit the amount of work in progress by inhibiting the starting of new tasks before those in progress are finished, i.e. it limits work in progress. This is a direct use of the methods pioneered by Toyota in vehicle manufacturing. Kanban lends itself well to work which is not easily divided into sprints, such as IT helpdesk work or major change projects with hard deadlines.

Iterative development is one of the contributory methodologies to Agile and influenced the Agile Manifesto. It stemmed from the fact that many software engineers realised that several cycles of development would be needed to achieve a project’s goals.

They adapted the traditional waterfall techniques to include several pre-planned iterations of the development phase. Several NASA projects used iterative

development well before the Agile Manifesto including the Mercury programme of the 1960s and the Space Shuttle programme of the 1970s and 1980s. Unlike Scrum, there is no set way to do iterative development.

Any project management method in which there are several cycles of development and testing can be termed iterative.

Iterative development is perhaps best suited to teams which have evolved an effective project management methodology over time. That evolution can be steered in a more iterative (and thus Agile) direction without losing the successful aspects of the existing methodology. For new teams seeking to adopt Agile, it is perhaps less well suited, because there is no set way to do it, and there is much scope for different team members to adopt different interpretations on the details of the new practices to be adopted.

Lean software development is a direct application of Lean management practices to software development. It originated in a book, Lean Software Development by Mary and Tom Poppendieck, published in 2003. As mentioned above, many of the concepts of Lean, when applied to software development, correspond closely with those of Agile. Lean software development is perhaps best suited to organisations which already use Lean methods in other types of management.

It will be easier for staff who already know Lean, simply to apply the principles to software development, rather than having to learn a new vocabulary and set of habits that would come with, say Scrum or XP. For organisations in which Lean methods are not already wellknown, Lean is perhaps not the best method, because the user September 2016 | the-lmj.com

17

PRINCIPLES AND PURPOSE

community in software is smaller, and there are greater resources available for individuals and teams to learn Scrum: more books, more outside experts, more tools which support it etc.

In summary, Lean and Agile are an example of convergent evolution.

They have different origins, but many goals in common, and when their key concepts are analysed, they turn out to be remarkably similar. An organisation which has adopted Agile successfully

Method Scrum

Extreme Programming (XP)

As regards methods, Scrum is by far the most popular for software development, and is the best method for teams adopting Agile for the first time, because it is a good method and it has

Remarks By far the most popular type of Agile.

Often combined with Scrum. Closely related to test-driven development (TDD).

Kanban

Inspired by Lean management and justin-time manufacturing as at Toyota.

Iterative Development

A forerunner of Agile.

Lean Development

A direct application of Lean principles to software development.

Figure 2

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will most likely fulfil many of the criteria needed to be seen as Lean. In the adoption of Agile, the most important place to start is with the people. Once they have grasped the key concepts and are motivated, they will make it happen.

September 2016 | the-lmj.com

Pros

a wealth of resources to help the team learn. Kanban is great for work other than software development such as helpdesks and transformation programmes.

Other methods such as XP, Iterative and Lean are best where there is pre-existing knowledge or preexisting success which could be utilised and developed.

Cons

Good for software projects.

Does not normally put specific deadlines on tasks.

Engineering-style disciplines are applied to different parts of software development, which can yield improvements in quality.

Requirements are expressed as tests. Limited scalability.

Allows specific deadlines. Well suited to IT projects outside software development.

Evolved from waterfall, easy to combine with aspects of waterfall.

Easy to adopt in workplaces which are already using Lean management techniques.

Limits capacity to perform retrospectives.

There is no set way to do it. Not ideal for inexperienced teams.

Relatively small community in the world of software.

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PRINCIPLES AND PURPOSE

How to be customer led and why there isn’t any other option CEO of Bizagi, Gustavo Gomez discusses how to make sure your organisation is customer focused and that the end user feels valued.

Digital innovations have repeatedly revolutionised industries since the inception of the Internet two decades ago. From its impact on the travel industry, allowing consumers to book their own flights and hotels online, to the recent digitalisation of government services like filling in tax returns.

The growing shift towards digital transformation is no different.

Bizagi’s recent research, The Agility Trap Report, reveals that changing customer expectations

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are at the heart of enterprises’ decisions to go digital. Forrester’s own research, a four-year analysis into five industries prioritising revenue growth (cable, retail, airlines, wealth management and healthcare) revealed that forerunners in customer experience crush the digital laggards on revenue growth, confirming that customer experience correlates strongly to increases in revenue.

Bizagi’s study of more than 1,000 global enterprises found that more

Gustavo Gomez CEO, Bizagi

PRINCIPLES AND PURPOSE

than four in five (81%) believe shifts in customer expectation are increasing the pace of change in their industry. Furthermore, three quarters (75%) revealed that providing an experience that understands the immediate needs and situation of the individual is the key driver of digital change.

Understanding, customising and delivering the right services is the reality of how businesses must approach customer service today.

In Ernest & Young’s customer survey, customers selected “the way I am treated” as the second most important reason for trusting their banking provider and this is the most common reason for opening and closing accounts. This insight has helped banks segment their customers, allowing them to provide tailored experiences based on each group’s specific needs.

The need to meet customer expectations becomes even more important for enterprises that already have high levels of digital change in progress. Of these companies, 79% identified higher levels of customer expectation around service, value and experience as the key driver of digital transformation.

This was substantially higher than any other driver, such as the need for operational agility (55%) and driving change across the employee base (51%).

Getting customer experience right first time is therefore essential, as proven by high-profile cases of getting it wrong – including embarrassing security breaches, online shopping site crashes and mobile banking services that lock consumers out of their accounts.

The key to success is for enterprises to really understand what customers want, why they want it, and build a business strategy based on this understanding. They can then begin to ignite digital

transformation by considering three essential elements: Personalise your customer service End users now expect personalised experiences in all aspects of their lives. By utilising big data, enterprises can provide the content that customers, employees and stakeholders demand based on their preferences, in turn driving sales and loyalty.

In the same way that bar staff might call out a greeting and serve your favourite drink when you walk through the door, users that create an account and buy something from a website will be enthused by smart brands that notify them when similar items or services become available.

The personalised offerings from digital leaders like Netflix, Amazon and eBay should now be reflected in workplace systems and processes – enabling organisations and their staff to meet the ever-increasing expectations of today’s customer.

Contextualise the customer experience Relevant, tailored and adaptive digital experiences are now expected by consumers, so businesses must deliver relevant content, ads and services on the right device based on where the user is and what the user is doing.

The key to delivering this is finding technologies that use location, interests, buying habits and other contextual information to deliver real-time, in-context experiences.

Despite the obvious advantages of delivering this kind of experience pioneered by businesses like Uber, Tinder, Amazon and Twitter, the challenges on the road to this journey are clear.

Delivering a real-time service, such as serving up a contextual ad or responding to what’s trending on social media to deliver a personalised message to a customer, necessitates that businesses need to act quickly.

Accessing the right data in an instant can also be problematic given the sheer volume of data, requiring an agile business process and IT infrastructure, one that makes this information available across the enterprise, and surfaces it at just the right time.

Stay agile and connected Business agility is vital to meeting the needs and expectations of your customers, and retaining those customers. This was confirmed in our research as more than four in five enterprises (82%) stated that business agility was critical to delivering the transformation that will improve customer experience. However, our research also found that businesses’ existing systems show considerable room for improvement, with just 25% of enterprises globally claiming high levels of agility across customers, employees and operational systems.

Making business agility a reality means that every part of the enterprise must be connected, allowing data to flow between systems and departments and be made available whenever and wherever it’s needed. Beyond a beautiful app or a nice new homepage, the challenge of true digital transformation is joining the dots and smoothing the cracks across the many touchpoints that customers have with your business.

In practice this requires the breaking down of organisational barriers and silos to ensure data flows freely across systems to every place it’s needed.

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When Employees Create their own High Performance Culture - The Rapid, Mass Engagement Process In the first of two articles, Frank Devine outlines what Rapid, Mass Engagement Process is and shares with us some of the results that this way of thinking has produced. His second article will examine the practical issues of implementing it, so stay tuned next month.

The Rapid, Mass Engagement story began in a factory in Walkinstown, Dublin in 1973. From my position as the most junior employee I noticed a contrast between the non-hierarchical and powerful teamwork I experienced playing competitive sport, and the way in which management and

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employees interacted. I also listened with incredulity to the negative assumptions different groups made about each other.

I moved to the UK in 1974 and I experienced the wave of strikes that gave the UK the title of ‘the sick man of Europe’. This reinforced my conviction that there had to

Frank Devine Managing Director, Accelerated Improvement Ltd

be a better way of organising the way management and employees treated each other.

Those formative experiences changed my life; I wanted to understand how individuals and groups developed their beliefs, especially negative and restrictive assumptions, and I wanted to create a better way. The Rapid, Mass Engagement Process is the result. Let’s fast forward 43 years...

What External Bodies Say About the Process: When Toyota audited DePuy’s Shingo Prize-winning Ringaskiddy plant in 2014 they found: “The best example we have seen of an organisation that truly embraces the cultural aspects of The Toyota Way to deliver sustainable results”.

When Investors in People surveyed Coca Cola employee attitudes in 2001 they reported:

• • •

• •

down’ or ‘bottom up’?

Why the process is Rapid and Mass The difference between the width and the depth of engagement and why both need to leverage each other How the culture changes in advance of the explicit processes designed to change it, what I call the bow wave effect The necessity to optimise both the Social and the Technical aspects of a system (Trist 1981) Why engagement alone is not enough

performance culture let’s look at typical mistakes organisations make when they try to engage employees.

Typical Mistakes: When seeking to engage employees, two frequent but opposite mistakes are common: Mistake No 1 - Naïve Engagement.

This occurs when organisations tell themselves something like this:“No-one wants to do a bad job, so if we simply get out of the way and empower them, our employees will be high performing”

Overview The Rapid, Mass Engagement Process is Phase 1 of a 6 Phase approach depicted below. This article explains Phase 1, and a forthcoming article will explore the 6 Phases as a system.

With the above logic, two heroic assumptions are made, namely that:

• •

Merely removing first line leadership will create selfdirection and That this self-direction would create high performing teams

Before exploring how employees have created their own high

“The greatest transformation in employee attitudes ever witnessed.”

How are these kind of cultural transformations achieved?

Key Themes: Critical to achieving these transformations are the following key themes which will be explored below:

• •

• •

Typical mistakes that organisations make when they attempt to engage their workforces The concept of ‘motivation towards’ in contrast to ‘motivation away from’, which explains why a burning platform is not essential What engagement means and why it is not the same as involvement, participation or consultation Culture change options: ‘top

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23

Both assumptions are dubious; the only guaranteed outcome of a power vacuum is that someone will fill it. If what fills the power vacuum is random the results will be equally random and sometimes catastrophic. There are successes but only when the self-directed teams have been thoroughly trained including knowing exactly what is expected from them to align with other teams and the wider organisation.

Sharing power can create engagement; merely removing power does not create engagement and it can facilitate bullying, systematic restriction of output and worse.

Issue

Involvement or Consultation

Rapid, Mass Engagement Process

Role of employees

To provide input (often child-parent) or sometimes to meet regulatory/legislative requirements

To make decisions and joint decisions (always adultadult)

Decision-making

Employee input leads to random and partial follow up

Joint decisions are made in real-time on a specific decision-making event called Consensus Day - see below, and with large solution space by design

How quickly are decisions made?

Employees often say “never”!

Implementation begins within 48 hours of Consensus Day see below

Who decides the agenda? (within the given strategy/ vision/purpose)

Leadership

Employees

Who decides the agenda? (within the given strategy/ vision/purpose)

Usually not addressed

Explicitly identified with employees provided with antidotes for immediate deployment!

Mistake No 2 - Timid Engagement This happens when organisations aim for high levels of engagement but do not facilitate sufficiently meaningful changes to employees’ work experience necessary to achieve it. To be successful, if you wish the ends (high levels of engagement) you must wish the means; this alignment of ends and means is addressed by the Diagnostic Day part of the process covered in the second part of this article to be published next month.

Engagement is achieved when the solution space available for employee decisions is wide enough to inspire meaningful changes in employees’ day-today work experience.

The level of engagement discussed here is not possible if organisations have restrictive assumptions about what is possible and are unwilling to take calculated risks. As a rough guide, unless employees come home and say, excitedly, to their partners “you would never believe what happened today”… your design is not radical enough to significantly move the culture!

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Table 1 Let’s examine how this process differs from a key aspect of change management thinking.

Motivation Towards not just Motivation Away From - no need for a “burning platform” Many corporate leaders argue that to have the urgency needed to drive significant change it is necessary to have, or create, a ‘burning platform’.

The issue with burning platformtype approaches is what happens as the fear of negative consequences reduces?

If we can create a situation where employees can be motivated

towards a vision or Higher Purpose, then such a motivation will be sustained better than motivation by fear. The effect of a burning platform approach tends to diminish when the threat does not materialise or when new threats emerge and employees become increasingly distrustful of being manipulated. This also undermines the values on which the whole approach is based (see Brophy 2012, Devine 2016, Garvey 2016 and Twomey 2011) NB: This concept is not to be confused with Bandler’s “Motivation Strategies” concept of altering one’s language to influence individuals who are motivated differently (Bandler 2010).

To do this requires an understanding of the difference between the type of engagement discussed here, and involvement or consultation.

Why is the nature of this process bottom-up?

disillusionment with the very concept of ‘culture’.

Top Down or Bottom Up: rapid design or rapid implementation?

Engagement not Involvement: Moving from Child-Parent to AdultAdult (Berne 1996)

Most attempts to align employee behaviours and create a high performance culture produce disappointing results.

The design must be genuinely owned by employees and any attempt at manipulation will destroy the values base on which this whole approach is founded.

The difference between the Rapid, Mass Engagement Process and a typical involvement or consultation process is summarised in table 1 overleaf.

The conventional approach is that organisations try to sell their corporate culture to their employees; in the process outlined here employees create and own their own culture.

Traditionally, employees ‘have a say’ or are involved or consulted, but the power to make the final decisions remains with management alone. Throughout this process employees are involved in challenging adultadult conversations and decisions, they never ‘ask management’ or ‘make representations’, they make decisions and actively prioritise, they are never in a childparent relationship.

As a result, employees are not the passive recipients of ‘engagement’: rather they act on their system of work in such a way that they become actively engaged.

In this sense, management doesn’t engage employees; management create a process whereby employees become engaged and then work to sustain the new system created.

As an analogy, the process creates a tiger, management has to feed and sustain the tiger and ensure it bites the right things!

To see how this compares to other approaches to engagement see Shuck (2010 and 2011).

As we saw above, leadership typically design the new culture and subsequently attempt to ‘sell’ this approach to employees. This is quick in design but slow, often unsuccessful, in implementation; Corporate Values are repeatedly relaunched with similar frustrating results including employee

Issue

A comparison of Top Down and Bottom Up Culture Change options is summarised in table 2.

Why is this form of engagement best achieved rapidly and by engaging all employees?

Top Down

Bottom Up

Usually slow

Can create rapid employee ownership e.g within days in small organisations using direct versions of the appraoch

Negative and limiting assumptions and filters

Negative assumptions ‘attack’ the top down messages

Assumptions and Filters are systematically undermined by achieving outcomes seen as ‘impossible’ to the sceptical and cynical and creating employee curiosity

Accoutability of leaders

Difficult due to ability to interpret corporate values and the small number of people holding leaders accountable from above

Strong because: 1. Leaders held accountable both from below and above 2. Behavioural Standards much harder to interpret politically thus undermining political (pejorative sense) behaviour

Applicability

Suitable when uncertainty prevents long-term planning or when change in senior leadership is expected

Ideal when: 1. Competitive advantage is sought or increased 2 Survival demands rapid and radical change

Pace

Table 2

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Why Rapid, Mass Engagement?

1 - Rapid When I ask employees how long they have to wait for an answer after making a suggestion I often get answers like “months” or “never”.

Imagine the contrast and symbolism of employees themselves identifying the major issues preventing their engagement and starting to resolve them, together with codifying a new culture, within 2 working weeks (DePuy for 650 employees) or within 6 working weeks (Boston Scientific for nearly 3000 employees)?

The Rapid and Mass nature of the process also has other effects on the culture change.

The Bow Wave Effect

The speed also signals powerful leadership intent and seriousness.

“My staff have asked me to tell you that whatever you are doing in those workshops please keep doing it because people are treating us better”.

Mass means engaging all employees not a sub-set of them.

Making change via selecting a pilot process to test if an approach works often creates:

• •

‘Not invented here’ attitudes leading to a rejection of the ‘foreign body’ in other locations The impossibility of giving as much emotional support from senior leaders and other resources to the non-pilot processes and locations

With the Mass approach, all employees are included in creating their new reality including their local culture. This also ensures the width of ownership necessary for a new culture to withstand the kind of early challenges that can undermine it before it grows strong

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•

For an alternative approach to mass engagement see the Search Conference method (Weisbord, 1993).

Remember that engagement has to be meaningful and the speed with which action is taken is extremely meaningful to employees, partly because of the powerful contrast to their normal experience.

2 – Mass

26

enough to sustain itself. Depth of ownership is achieved by the more intense experience of collective, joint decision making (known as Consensus Day) which will be explained in next month’s article.

Both width and depth are sustained and leveraged by the continuous improvement outputs from this collective, joint decision-making and by on-going improvements.

During the first few weeks of the process in Boston Scientific, the canteen manager approached me and said:

This was after the initial workshops covering the first 300 of nearly 3,000 employees. As will be explained in next month’s article, the initial workshops are explicitly purely diagnostic, yet the facilitation of the workshops has deliberately implicit effects and sensitises participants to think about how they behave towards each other. This was what the canteen staff had noticed.

These implicit effects are designed into the process at all stages and have a cumulative impact on the culture; they are one reason why the experience of the facilitator in managing such a radical process is so important for success.

Other examples of this effect include:

•

Non mandated changes in the way 360 degree feedback is given, whereby individuals internalising the values explicit within the Cathedral/Higher Purpose Model of Leadership (Devine 2016), began giving feedback to individuals before completing the corporate electronic 360 degree inputs. This changed the quality of individuals’ experiences from receiving anonymous and out of context comments to two individuals openly exploring the issues and working together to overcome them.

Informal changes to the way progress is reviewed whereby the values base of the overall approach led to more focus on what had been done well including appreciating preventative interventions. This creates a more developmental rather than blame-oriented experience for employees.

See the Managing on Green section in ‘Demystifying Leadership’ Devine 2016.

Let’s examine the Systems Thinking aspects of this process.

Optimising a Whole System: Socio-Technical System Design Throughout the process, including the leadership development and continuous improvement aspects, systems are examined to optimise the whole system i.e. both the social and the technical aspects (Trist 1981). This is much wider than ergonomics and involves issues such as the effect of changes on employees’ social standing, self-image and related issues which are often missed even when employees are deeply involved in the changes by improvement events.

The crucial interrelationships are between:

Social Lack of behavioural standards and leadership skills training (Cathedral/Higher Purpose Model)

Under checking

Random Outcomes/High Variability

1. The Rapid, Mass Engagement Process

Technical

No integration therefore no optimisation of the whole system

2. An approach to Leadership Development systematically designed to sustain the culture created by it (see Brophy, 2012 and Devine, 2016)

Over checking

Over preperation for checks

3. The specific approach to Continuous Improvement which sustains it.

Managing upwards Perverse treatment of high performers/assumption of infinite capacity

Sub Optimised i.e. too little

Sub Optimised i.e. too much

Table 3 In this process, all employees participate in diagnostic workshops to identify the key obstacles to achieving the organisation’s vision and the nature of the new culture needed to overcome these and all subsequent issues.

An example of a systems thinking analysis from the diagnosis done by employees in the early diagnostic workshops is represented in table 3.

Effects of this sub-optimisation on the organisation:

•

Short term thinking drove repeated fire-fighting of the same issues with no time for root cause fixes - but time for fixing the same things again and again! This prevented continuous improvement and innovation and demoralised those employees most keen

•

•

to make improvements.

Continuous improvement data gathering tools were seen by employees as repressive rather than signals to help employees do their work.

Continuous Improvement done to Operators by Engineers thus frustrating the higher performing operators with systematic loss of potential improvement opportunities.

The Systems Thinking aspects of the Rapid Mass Engagement Process are examined in detail by Garvey (Garvey 2015).

Engagement Alone is not Enough: Even if the engagement process is implemented in a systematically excellent way the new culture will not sustain unless two other processes are leveraged.

The leverage created by these three areas of focus is crucial to the long-term success of any High Performance and continuously improving culture.

Diagram 2 gives an overview of the leverage achieved.

This article explains the first circle, engagement; the leadership aspect is explained in Devine 2016.

How the continuous improvement aspects have been implemented are addressed in Brophy (2012), Garvey (2016), Twomey (2011) and Whyte (2011).

In next month’s LMJ we will explore:

• •

•

• •

The consequences of selectively implementing one or two of the above three focus areas Why relying solely on a valuesbased approach is insufficient to create the powerful and rapid impact possible with this approach - the conventional method is to rely on integrated Corporate Values.

The detailed process required to achieve the powerful levels of employee engagement that produced results such as those above Why diagnosis is separated from problem-solving in the process Risks and examples of when the process has not achieved its objectives - this will provide

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27

•

practical help for any organisation serious about achieving such high levels of engagement The need for leadership development specifically designed to sustain the High Performance culture created by the employees, and to systematically reinforce the quality of continuous improvement explicit in the process

Conclusion This article has demonstrated that a more radical approach to the engagement of employees has produced results which many commentators thought impossible.

An example being Bacardi’s employee majority Pay Working Party recommending a new pay system that froze most of the Working Party members’ pay until the lowest paid caught up.

Next month’s article will outline the practical challenges facing any senior team serious about achieving these kind of results.

It will also outline the detailed processes and interdependencies that enabled these radical and rapid culture changes to be achieved.

References: Bandler, R. (2010) Richard Bandler’s Guide to Trance-Formation: Make Your Life Great.

HarperCollins Berne, E. (1996) Games People Play: The Psychology of Human Relationships.

Ballantine Press Bacardi-Martini Pay Working Party Report 2001 (company source) Brophy, A (2012) FT Guide to Lean: How to Streamline Your Organisation, Engage Employees and Create a Competitive Edge (Financial Times Series) Devine, F (2016) Demystifying Leadership-Setting Leaders Up for Success. Lean Management Journal.

Garvey, P (2015) Engaging an Organisation in Operational Excellence: A Case Study in Mass Engagement. MSc Dissertation, University of Buckingham Lawrence, P.R. and Lorsch J. W., (1986) Organization and Environment: Managing Differentiation and Integration Harvard Business School Classics Mackey, J., Risodia, R., (2013) Conscious Capitalism: Liberating the heroic spirit of business. Harvard Business School Publishing Corporation, USA. Seddon, J. (2003). Freedom from Command & Control: The Toyota System for service organisations, Vanguard Press Shuck, M. B., (2011) Four Emerging Perspectives of Employee Engagement: An Integrative Literature Review. Human Resource Development Review 10(3) 304–328 Shuck, M.B., Rocco, T.S., Albornoz, C.A., (2010) Exploring employee engagement from the employee perspective: implications for HRD. Journal of European Industrial Training, Vol. 35 No. 4 Trist, E. (1981) The evolution of socio-technical systems: a conceptual framework and an action research program. Ontario Ministry of Labour Twomey, W (2011) Beneath the Waterline - A Study of the Effect of Applying Leader Standard Work to the Social Aspects of a Manufacturing System on the Performance of the System. MSc Dissertation Lean Enterprise Research Centre, Cardiff University Weisbord, M. A (1993) Discovering Common Ground. Berrett-Koehler Publishers Whyte, P (2011) Exploring the Use of Systems Thinking to Understand and Plan Change.

MSc Dissertation Lean Enterprise Research Centre, Cardiff University

Make sure to pick up next month’s issue to read how to practically embed this in your organisation and the conclusion to this piece.

Diagram 2

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Q+A

Creating a High Reliability Culture Laura Methot of CLG Canada speaks to Bob Koonce, former commanding officer of a nuclear submarine about how the skills necessary in the Navy can be translated to business and operational excellence.

The dip in oil prices of more than 70 per cent in the past 18 months has put palpable strain on oil and gas companies to make ends meet while still maintaining standards in productivity and safety.

In this interview, we speak with the former commanding officer of a US Navy Los Angeles-class nuclear submarine about how the unwritten skills he learned in his years of military service can be perfectly applied to create a high reliability organisation in the business world.

L: Good morning Bob and thanks for joining us in this discussion about operational excellence and high reliability cultures. The nuclear

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Bob Koonce

Laura Methot

Former Navy Submarine Commanding Officer, US Nuclear Navy

Senior Partner & Managing Director CLG Canada

Q+A

navy is one of the oldest and largest nuclear organisations in the world and it has a tremendous safety record. So let’s get started with a little background. Could you give us a thumbnail sketch of your career and how you came to be here today?

Sure. Well, I started out as an electrical engineering student and found out pretty quickly I was not a design engineer type. So I was looking for some adventure and some excitement and the nuclear navy recruits pretty heavily for engineers. So I met a recruiter, and next thing I knew, I was a young naval officer on my way to a submarine.

B: Over the course of about 20 years, I served on five different nuclear submarines and climbed through the ranks of the nuclear navy’s hierarchy to the Commanding Officer position of Los Angeles-class nuclear submarine out of Pearl Harbour, Hawaii. It was the USS Key West (SSN 722).

On the way, I did get an MBA from Northwestern University in Organisational Behaviour which, kind of, sparked some of my interest in culture and organisations and organisational models and leadership. In 2011, I retired from the military and I have been working in the power industry, for the most part. I hope that gives you a little background on me.

L: Yes, it sure does. And it does sounds like an adventure that you’ve been on throughout your career and your journey from being an electrical engineer into the nuclear navy and into senior leadership, then layering on the MBA and the Organisational Behaviour components to it.

I think it’s something that our participants in the OPEX summit would find very interesting.

OPEX is largely about high reliability organisations. What makes the nuclear navy, with its impeccable history of reliability, different from civilian organisations or other military operations?

B: I think when you look at the US nuclear navy, the culture is very strong and you can distil it down into about five principles or five pillars.

Those pillars are, firstly, a high level of knowledge and secondly, a high level of formality and professionalism, which manifests itself in communications and procedural compliance.

The third pillar is a questioning attitude which is actually when you understand your equipment and you understand how to do your job and you’re communicating, so you can take a critical thinking perspective.

The fourth pillar is what we call “forceful watch team backup” in the Navy, but that really translates to engagement. We’re looking for our employees or our team partners, or sailors and officers, to be engaged in everything around them, not to just be part of a silo and work in their own role, but looking outside their role for ways that they can interject themselves and their knowledge. We don’t want passive employees.

When you’re in a nuclear submarine 800 feet underneath the water, you can’t afford to have somebody making a bad decision and not having someone else speak up.

The final pillar is integrity - the concept of doing the right thing when no one’s looking. And it goes even further than that. In the navy, it’s somewhat of a technical integrity – doing the right thing to make sure the reactor is safe, the submarine is safe.

That culture is very, very strong and it’s not a programme in the Navy, like a corporate programme; it’s just the way people live. I didn’t even know those five pillars were the five pillars until I actually retired and a consultant told me those were the pillars. There were no posters, there were no programmes. I just got taught that’s how we do things.

I’ve seen other organisations that have similar things but I’ve also seen organisations that have a weak culture or maybe they don’t know what kind of culture they want and so they have a mixed culture where people are going in different directions.

L: Terrific. Many organisations talk about culture and I hear leaders discussing the gap between the kind of culture we have and the kind of culture we want and it seems that often the difficulty is that starting point – how do we operationally define the kind of culture that we want and need in order to get the types of engagement and results that we’re driving for? You’ve articulated very clearly the five pillars of the nuclear navy culture.

Are there other special things that operators need to know and do, their mind-sets and behaviours, things they do on the job everyday to ensure constant reactor safety?

And when you think about the knowledge and behaviours associated with the cultural values, and the special operator behaviours that are directly reliability-based, are these things that the navy selects for, or can they be learned? Can they be trained?

B: Yes, it’s an interesting question.

And I think that I would tend to say that they are definitely learned and not selected for it.

In the military we bring people

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Q+A

“Operational excellence to me is getting alignment within your organisation to achieve what you’re trying to achieve, and so that can be very different.”

out of high school or right out of college, and we have an in-at-thebottom and up-through-the-top organisation. You don’t bring in a midlevel or a senior level executive into the military.

In a corporate setting, you have to look for character traits and background that would fit into the culture that you want to establish or that you have established. I think cultural fit is important. I think it really depends on what kind of situation you’re in. I think if you’re bringing in new employees that are fresh out of college or fresh out of high school, they can certainly learn the culture and there should be an element of that.

If you’re bringing in senior leadership into positions of influence and importance in your organisation, then I think you must evaluate for their cultural fit.

L: The US military in general, and the Navy, are known for very, very deep and well done research with respect to personal selection and placement. So we can probably make the assumption that there is some selection but what I’m hearing is that the behaviours that are required are really shaped over time and enabled by this overall culture that has been developed in the nuclear navy over the years.

Given that strong culture and the well-defined performance requirements for both operators and leadership – something went sideways in 2005 when the USS

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Philadelphia was in the Gulf. Tell us that story and what leadership and cultural issues you believe contributed to it.

B: Sure. Just a little background on the story. The USS Philadelphia, hull number 690, is a Los Angeles-class submarine that was operating and fully-deployed in and around the Arabian Gulf area. This is a talented ship with talented leadership. I know the people personally.

On the night of September 5th, 2005, they were on the surface after coming through the Strait of Hormuz which is a very challenging navigational operation. Very dangerous, very complex – you’re travelling submerged with significant shipping in rather dangerous water. And they very safely navigated through that passage and they were surfaced at one o’clock in the morning, local time.

It was a fairly clear night and really no reason for any danger, other than the normal dangers of navigating at sea.

Essentially, the ship was heading west, on a westerly direction, at about eight knots and a Turkish freighter was coming north from Bahrain and it was heading up through the Arabian Gulf. And the two collided. It’s really very difficult at first glance to say, well, how could that possibly happen with all the technology and the training and the knowledge of the operators and sailors, the officers?

.... But when you get deeper into the story, the Commanding Officer was asleep in his rack, resting for the next day, as would be expected because pulling into port, which they were headed for the Port of Manama, Bahrain. And so you would expect him to be asleep because he needs to rest.

And he had assigned his second in command, the executive officer, in a role called the command duty officer which essentially is overlooking all the safe operations of the ship. That Executive Officer was not up on the bridge of the ship and the officer on deck was trying to get his attention.

I also realised that I needed a way to measure the culture.

And I didn’t really even have the language or the tools in my toolbox, to really quantify or measure the culture that I wanted.

The third lesson that I took away from that was that you need an outside perspective. You know, there were people in that organisation and too close to that organisation that couldn’t see what I was seeing. I was an outsider, for the most part, even though I was brought in to be the second in command I was really still an outsider and I wasn’t planned, scheduled to be there more than a few months.

Everybody, kind of, knew I was coming in just to help get things going back in the right direction, but I wasn’t scheduled to be there for years. And I think I felt like an outsider and I also looked at things like an outsider. And as an outsider, I was able to perceive things and observe behaviours that others would maybe filter out or not recognise.

Those are my three things that I put in my pocket at the time and I went on and took command of the USS Key West. I applied some of those lessons learned.

And at times I had to actually identify and then eradicate some

Q+A

behaviour that was heading in the wrong direction.

Had I not had that experience of USS Philadelphia, I would not have been able to stop something from going much worse on my own ship when I was in command.

L: Very interesting story, Bob. There’s something that rises to the top for me as I look into your story. As a person who consults to organisations on leadership and behaviour, I often talk about the notion that all behaviour is rational, if you understand the drivers. So when we point to issues of operational discipline by the operators themselves, that’s not to say that the operators are intentionally doing something wrong or being poor performers.

Looking at root cause analyses for many of the world’s biggest process, safety and environmental disasters over the years, including as far back as Three Mile Island, Love Canal, Chernobyl in the 80s, and more recently Horizon in the Gulf of Mexico, the RCA’s identified multiple causal factors in all of the situations which included leadership, culture and behaviours related to operational discipline very similar to what you’ve just described.

Do you think that the requirements for leadership excellence are different under nuclear conditions as opposed to other operational situations?

B: I tend to think of leadership separately from operational excellence. And not that they’re not interrelated, but maybe we have to agree on the terminology.

Operational excellence, I think, has something unique to the industry, unique to the company, unique to the process that is part of the operations that you have to really look at. I work in both the nuclear and non-nuclear sides of the power industry, for example,

and there are subtle differences in the way that you have to operate a nuclear reactor from the way you operate a gas turbine-based power plant, and even the way you engineer and design it.

I think that you have to really look at what you’re trying to achieve and what the operation is in order to define what operational excellence is, and then you go about putting together a culture that achieves your own strategy that you want to achieve excellence with.

So, operational excellence to me is getting alignment within your organisation to achieve what you’re trying to achieve, and so that can be very different.

You know, if I’m running a retail organisation or I’m running a pharmaceutical manufacturing plant or maybe I’m in the creative arts, then I set up a different culture and I set up a different, operational excellence model.... ...But when it comes to leadership, I believe that there are some principles of leadership that apply almost universally.

And not everyone agrees on those types of leadership. I mean, Admiral Rickover, who was known as the father of the nuclear navy, had a leadership style that many would not embrace. He was pretty tough to deal with.

But people loved him and the culture that he set up, or at least in what they were able to produce. So, leadership to me is just very different and I think it takes very strong leadership to achieve operational excellence and to establish a strong culture.

L: The topic of leadership, culture and behaviour is really becoming predominant in many of the discussions around what drives a high reliability organisation.

You’ve talked about how the values are articulated for the nuclear navy and issues around operational discipline.

What are the best practices that you can recommend for developing or changing organisational culture? What are the fundamental and the universal practices that you believe are necessary to drive culture and specifically a high reliability culture?

B: I think you really do, as a leader or leadership group, have to define the culture very clearly. It’s much easier with a group of 12 people than it is with 1,200 or 12,000 but it does take a clear definition of the culture that you want to establish, the behaviours of your people throughout the organisation.

“The only way you can be excellent, is to look for little things, to prevent them from becoming big things, and drive a culture of the behaviours that we want. And that comes through daily interaction, it comes through these critiques, and then sharing those lessons.”

The bigger the organisation, the more challenging that’s going to become. Secondly, you have to communicate. The leadership has to consistently communicate to the people that are part of the team what their role is and how their role should behave under this culture.

Especially if you’re instituting cultural change, it’s very difficult, and those behaviours are daily within the people and a part of your organisation. As commanding officer, it was almost daily I was on an announcing circuit or in front

Q+A

of my men and speaking to them about the behaviours.

That’s part of leadership but it’s an important part of communicating the culture so that everybody understands. If you have a large organisation, clearly that has to happen throughout the levels of organisation because it can definitely get lost in large organisations as you move through the levels. So you have to consistently and clearly communicate the culture.

And then the third piece is what I call my “secret sauce”. This is really what sets apart the nuclear navy and it’s very difficult to summarise.

It’s what we call in the navy, a critique process. We critique what the event was. You already talked about root cause analysis and corrective actions and there are various programmes out there that do that, in process safety especially.

If you go into the nuclear navy, they have a very well-defined critique process where if something happens that violates one of the behaviours, whether or not somebody didn’t know what they were supposed to do or they didn’t follow a procedure or their integrity was lacking, we went through this critique process. And, you know, it sounds simple. it’s just gathering the facts, gathering a timeline, putting together that timeline as a group and then really very quickly sitting down with all the people that were part of that event.

You don’t exclude people and just corner off in some organisational development group and have them look at it. That’s, I think, a mistake that many organisations make.

This has to be the line officers, if you will, the people that are responsible for the operations.

Gather your team, sit around the table, go through the timeline.

Sometimes you’re going to argue

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September 2016 | the-lmj.com

“You have to really look at what you’re trying to achieve and what the operation is in order to define what operational excellence is, and then you go about putting together a culture that achieves your own strategy.” about that timeline because humans tend to remember things differently. I’ve seen a similar process throughout the oil and gas industry. But, what I’ve seen is that many organisations don’t really apply it properly. It really takes the leaders sitting down and saying, that’s not a behaviour that is in line with our culture. We don’t accept that behaviour here. And that’s hard. I mean, this is really probably the most difficult thing that I’ve observed that’s different from the military specifically.

The only way you can be excellent, at least from the nuclear navy’s perspective, is to look for little things, to prevent them from becoming big things, and drive a culture of the behaviours that we want. And that comes through daily interaction, it comes through these critiques, and then sharing those lessons.

L: So, in terms of the best practices, when an event happens, you’re bringing the root cause analysis down to a very behavioural level which brings it back once again to leadership as the engine that drives it. What should leaders be looking at in terms of their own behaviours, what they’re saying or doing, to know how well they are responding to incidents and shaping new behaviours consistent with cultural norms? How do leaders gauge their own effectiveness?

B: Oh, that’s an interesting question. You know, this goes to the integrity piece. I found that coming out of the navy I was much more willing to blame

myself first for anything that went wrong under my team or any organisation I was a part of or responsible for.

In the case of the Philadelphia, the commanding officer had to be removed even though he was asleep. A lot of people would say, well, he was asleep – it wasn’t his fault. But, you know, anything that happened under my command – any behaviour that happened, any problem, event that occurred that was untoward, I was accountable for that as if I had made the decision myself.

And that level of accountability and responsibility – you live that in front of your people, you walk that walk.

In a lot of organisations, if something goes wrong, they want to look for what the root cause was and it’s never on account of something they have done wrong themselves.

I remember many times admirals calling me into their office and saying, okay, Bob, Sailor Jones did this, he was drinking and driving –why did you let him do that? And my reaction, my human behaviour reaction was, I didn’t do that. But it was under my leadership.

And so I have to think hard about what environment am I establishing as a leader? What example am I setting? What things am I promoting? How am I behaving? And am I always reflecting the culture that I want to my staff? And am I taking responsibility in finding out, when things go wrong, what can we do to fix it?

Q+A

L: The word accountability is often used in leadership circles, when senior leadership teams talk about driving accountability through the organisation. But similar to culture, the definition of accountability is often pushed around. What do we mean by that? What does it look like? What does it feel like? And so once again you provided an operational definition that gets to the heart of accountability as a set of leadership actions and values, the things that the leaders do to live and model and drive and own performance in the organisation.

The idea of the captain being let go, even though he was asleep – that is a great example, a metaphor, for what absolute accountability looks like.

I want to recap with some of my key takeaways that I think will really be of interest to the participants. You shared with us your journey from an engineer to a leader of the nuclear navy and beyond; I’ve met several executive leaders in corporate environments who come from the nuclear navy. You’re recruited heavily for your knowledge and your talent –I’ve seen it so many times – the ability that you and others like you have had in

transferring your experience into the corporate role.

I think this is a real valuable add to the Operation Excellence in Oil & Gas summit. You described taking it right up to the cultural level; define your culture clearly, define the behaviours of all of the people involved; the leadership then must consistently communicate requirements and expectations.

Finally you talked about being on the circuit daily and talking about behaviours.

I learned a term from an excellent leader I got to know in the mining industry and he called it face- time with intent. He worked with his leaders to describe, what does this look like? When you’re being out on the circuit every day, what are the things you talk about?

What are you looking for? What data-based dialogue will you be having with your performers? That provides the fundamentals for being able to do a good critique process – which you described as a well-defined process to understand why a performer has behaved outside of standard. So you’re talking about behaviours and conditions rather than

making it a personal issue. And again you brought it back to line officers with the leadership, with the team, gathering the data, understanding the timeline, identifying the behaviours and the problem.

Many organisations do afteraction reviews but I’ve heard of very few that effectively get to the behavioural level in ways that enable leadership to take action; many will get to the technical and process issues, but not to the behavioural and cultural level.

So I’m thinking, Bob, that this is something that will be a very, very valuable discussion for our participants in the summit.

And in closing, I’m sure I can speak for the participants in saying that we’re really looking forward to seeing you in Houston this November, hearing more in your summit presentation and hopefully lots of engagement in informal discussions outside of the presentation. Thanks so much for joining us and we’ll see you in Houston.

B: All right. Sounds good. I’m looking forward to it. Thanks Laura.

Join Bob Koonce and over 250 Oil & Gas Operations Leaders at the 7th Annual Operational Excellence in Oil and Gas Summit (November 7-9, Houston, TX) where you’ll learn how to move past cost cutting in order to generate the productivity and production gains necessary to win in this volatile market.

To find out more about the event and download the official agenda visit www. opexinoilandgas.com or email enquire@iqpc.co.uk .

7th Annual Summit 2-Day Conference: November 8th – 9th, 2016 Workshop Day: November 7th, 2016 Venue: Norris Convention Center Houston, TX www.opexinoilandgas.com • enquire@iqpc.co.uk • 705.707.1301

September 2016 | the-lmj.com

35

LEAN ONLINE

Lean Online We stumbled across an article from a website called Shmula which looks at what the queueing theory is and takes an in depth look at output: http://bit.ly/292Frfi

Chris Burnham reminds us that investing in people is important, but that you time is the best teacher. @RealBurnham

Peter Sherman writing for Quality Digest looks at the reasons what big organisations often neglect that lean startups do well: http://bit.ly/2bCn2s6h

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September 2016 | the-lmj.com

LEAN EVENTS

Lean Agile Scotland 5th-7th October, Edinburgh, Scotland Lean Agile Scotland returns for it’s fifth year in October 5th, 6th & 7th 2016. There are 67 speakers with four tracks of workshops and presentations. The conference will cover the usual broad range of topics while taking a holistic view of what it takes to make great software products. There will be sessions that will stretch your thinking, introducing you to new ideas as well as sessions geared to help those new to Lean & Agile to start the journey.

If you’d like to know more visit: www.leanagile.scot/

The 2016 Northeast L.E.A.N. Conference 4th-5th October, Worcester, Massachusetts The Northeast L.E.A.N Conference provides information and inspiration to lean practitioners all calibres, whether you are just

starting out or whether you’ve been practising lean for years.

Keynote presenters include Art Byrne, John Shook, Dr Eric Dickson and Steven Spear.

To find out more and to book on visit: www.northeastleanconference.org/

Lean Kanban India 19th October, Auckland, New Zealand This practical course focuses on a 6-Level model to achieve excellence in the office and in the service sector.

Learn about identifying various “losses” in the service industry and in administration and how standards can assist in becoming more efficient.

The course aims to give attendees a good understanding of practical lean office concepts.

It also looks to create skilled individuals in various lean techniques to start immediately with improvements as well a fulfil part of the requirements towards the globally recognised KAIZEN Practitioner certification.

For more head to: http://bit.ly/2a5pQzz

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This master class examines what makes that 2% of successful innovation projects work and how the ways we can learn from them.

To learn more visit: http://bit.ly/29BOrYP

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