Monday, 26 March 2012

A lesson in how not to communicate.....

Over the past few months my colleagues in the CSI team and I have been working alongside external consultants on a department wide review of processes. I've taken the lead in a key service area -I'm its "champion". This has involved facilitating the redesign of the existing process to remove the waste, aligning it to meeting customers' needs and reducing frustration for staff.


Post redesign an action plan was compiled to map the route from the existing process to the new and improved one. The aim is to initially work through the action plan in one region only. Once the new process is stabilised there it will be rolled out to the others.


In my eagerness to get things moving I handed this action plan over to the staff in the region so they would take ownership for it and begin working through. No problem there, except I failed to place myself in their shoes and anticipate how such a massive amount of work seemingly being dumped on them in one go would make them feel.


I returned to the region today to see how things were progressing and the daily meetings seemed a little flat. At the end of the day it became clear why: people were overwhelmed with the scale of the work required for the action plan and simply did not know where to start (I referred to it colloquially as a monster, and they agreed it was!)


The action plan currently extends to four pages of excel spreadsheet with all likelihood that this will expand further as more things are added or existing actions are broken down into more detail. The issue is, faced with such a mountain to climb, where do we start? I admit this was something that I had wanted to talk to the teams about before. It was certainly not my intention to hand it over then walk away without further input, although that seems to be the impression I gave.


All is not lost though. I had a lengthy chat with the regional director about the action plan (and other changes) and we have resolved a way forward to tackle this monster! I feel happier now afterwards for two reasons:


1. This was the engagement with the teams I had hoped for - a positivity and commitment to working through the plan earnestly; and
2. That honesty helped me understand where they were struggling and show what more I could do to support them through it.


My failure to clearly explain the next steps confused and possibly demotivated the teams, but from that I can take a valuable lesson in communication. And today has now paved the way to progressing the action plan by breaking it down further, focussing initial efforts on a few key changes.


I hope they feel as positively now as I do!

Book Review - The Machine that Changed the World

The Machine that Changed the World
Womack J, Jones D, Roos D
Free Press (1990)

The story of lean production – Toyota’s secret weapon in the global car wars that is revolutionizing world industry

If, like me, you are only just beginning your journey in understanding lean then this book is a great place to start. It sets out the background for the emergence and development of lean production, moving away from mass production that dominated for most of the 19th and 20th centuries, and which evolved from craft production before that. This book has been called previously a “management classic”, explaining and stimulating “world changing transformation in management thinking”.

This book does not set out to examine how lean succeeds in Japan because of its society’s unique features. These are considered to be of secondary importance. It is not a book about what is right with Japan and wrong with the rest of the world, but rather what is right with lean production.

Whilst the book focusses on car production it is not difficult to see how the principles of lean could be applied to service industries as well. The story this book tells is about so much more than just the technicalities of a method of production. It looks in depth at two very different ways of thinking and how humans work together. There are many colourful examples throughout the book about how Americans tried to understand what the Japanese were doing in their factories, and jumped to hasty conclusions that bore no resemblance to what actually went on. This is because they lacked a more fundamental understanding of the lean system of work: It is one thing to use the tools from the “lean toolkit” to effect some change, but without addressing the system as a whole (and the resulting culture) then continuous improvement will not thrive.

Another point that struck me when reading this was how slow the rest of the world was to react to such a radical change in production method, even when the results were plain to see. Toyota began using lean in earnest in the 1950’s-60’s, with other Japanese firms following suit shortly after (to varying degrees of success). The US and Europe followed much later in the 1990’s-2000’s, and consequently are playing catch up. The Japanese companies’ success with lean production may be due to the establishment of vertical and horizontal keiretsu – groups of companies with common business interests, such as banks, investors and suppliers. Machine makes reference to these as if they were infallible – one of the keys to success - but the Japanese recession in the early 1990’s showed that these conglomerates were not invincible after all as many collapsed, leaving a big dent in Japanese production.

Machine paved the way for a whole industry of books to be written on lean, since its initial publication in 1990. One of my most burning questions is what happened to lean production in the intervening two decades?  Thankfully, there is an Afterword that attempts to answer that very question. The reader is also directed to two other books written since for more information – Lean Thinking (1996) and Lean Solutions (2005).

So what else have I learned from reading this book? In short – I know I will never buy another GM or Ford motor car again! 

Sunday, 25 March 2012

Some thoughts on the "yoof" of today #1

This entry is slightly off-topic, but I felt strongly riled enough to write it so here you go!

Theresa May appeared on BBC Breakfast on Friday morning, defending the government's plans to increase the sale price of alcohol announced in Wednesday's budget. This is all in an attempt to tackle "binge drinking", with the finger firmly pointed in the direction of young adults.

Spin doctors have cleverly devised a label for the ritual of buying cheap booze in the shops beforehand, with the intention of getting drunk cheaply at home (at least cheaper than buying it in pubs and clubs) as pre-loading. *Sigh* It seems like nowadays every behaviour must have a label, you know. That way we can easily identify it as a Problem and attribute blame to somebody!

Anyway, this whole piece of journalism was farcical, for two reasons:
1. That binge drinking is a Problem associated with the youth of today and nobody else, and that raising the price of alcohol will combat this
2.That Theresa refused to admit her drinking habits. If she herself did not have a Problem then there would be no shame in admitting her consumption, surely?

The main argument is complete and utter BS. (We all know the truth about MPs drinking in the House of Commons bar thanks to the Telegraph.)

"Binge" drinking is as much a rite of passage as the first kiss or rebelling against parents - it's probably integral to both! It’s about exploring life and its boundaries, developing values and the self into a normal, functioning member of society.  It is unfortunate that the media have latched onto binge drinking as the scapegoat of most causes of social degeneration. “Binge drinking” brings to mind word associations of hoodies, riots, teenage pregnancies, and other general anarchy.

And this is, of course, on the assumption that it only affects young adults and not any other demographic of society. Let’s all be honest here, binge drinking happens irrespective of age or gender. It is part of the culture of many sports (I recall heavy drinking sessions from early afternoon to early hours of the following morning over a weekend, during my rugby-playing days…..) And if there’s a party – be it birthday, wedding, divorce, and so on – then we could all be guilty of drinking to excess and regretting it the following day. But this is conveniently forgotten about when we’re talking about what’s wrong with society…..

So the Problem is binge drinking, and the solution is higher sale price. Never mind that this will also penalise responsible drinkers. Why, oh why, I keep asking myself, does nobody ever look deeper to the real, fundamental causes of the Problems? Perhaps because that involves too many uncomfortable truths, or too much change to put things right, that may be beyond the scope of a single term in government?

Wednesday, 14 March 2012

Do you treat your employees like rabbits?


For tonight's entry I drew inspiration from my little white rabbit, Magic. 


Do you treat your employees like rabbits?


Thursday, 8 March 2012

The Client's role in Lean Construction

This blog has been adapted from a piece of coursework set in the "Construction Planning, Tendering and Finance" module I'm studying in my undergraduate degree in Quantity Surveying. The original question was framed around the complete refurbishment of a pharmaceutical manufacturing premises within a programme of no more than 42 days. The question asked you to provide advice as if you were the Commercial Manager within a construction firm that was preparing a tender for submission as part of a framework agreement.


Pfizer, East Kent
In answering this question we had to devise various iterations of a project network analysis detailing the shortest time, optimum time and associated costs, before recommending to our Managing Director which would be the best to base our bid on. I couldn't decide which way to go at first because there was insufficient information provided about the Client's requirements, so I went with the systems thinking view - and recommended further discussions with the Client first before deciding. *D'oh!* Well, it got me thinking more about what clients (note the small "c" now) need to do if they really want to implement lean into their construction projects. I will draw on my own experience here too, as an "intelligent client" in the development department of a housing association.






Since the days of Latham (1994) and Egan (2002), the construction industry has - to varying degrees and levels of success - drawn lessons from lean in manufacturing and implemented them. One of the key things recommended from both government-commissioned reviews was how partnering can improve the construction process by reducing costs and time and improving quality.


Partnering comes in two forms: project partnering and strategic partnering. The first is more transient as it exists solely for the life of the project, but with repeat business over several projects can lead to the latter. Framework agreements have been set up by many public-sector organisations, in part to counter the OJEU requirements, but also to build relationships with a select number of contractors/suppliers with a view to forming a strategic partnership. However, what clients have mostly failed to realise is how simply forming a framework and working with the same contractor(s) over a series of projects does not constitute "partnering" let alone the lean construction approach advocated by Latham et al, if they still follow the old entrenched adversarial practices.


By old entrenched adversarial practices I mean the following:




1) Providing little real information up front about their (clients) expectations. Many questions arise as a contractor prepares a tender: How soon do they want the building(s) completed? What is their budget for construction costs? What standard of quality do they want/need to achieve? Most importantly, which takes precedence if there has to be a compromise?




2) Following on from above, clients send out invitations to tender with incomplete design information, usually because of time pressures (in housing circles, the usual cause is HCA grant-funding deadlines), sometimes through lack of expertise or detail in the Employer's Requirements. This inevitably leads to variations once work has commenced.




3) Clients prefer using adversarial standard forms of contract. Two-party agreements mean that any risk passed to the contractor will be forced down every link in the supply chain until it finally falls on somebody at the bottom, who may not be best placed to accept that risk. This is irresponsible, and likely to cause problems when it goes wrong (if anything, just by delaying the project's completion).


4) The supply chain bears the cost of the contractor going bust. The client may come out a little burnt, but by and large can depend on bonds, Parent Company Guarantees or warranties to protect their interests. The contractor might go bust for a number of reasons but the most common is poor cash flow. If the contractor goes under then the subbies don't get paid.




5) Risks are handed off so far as possible onto the contractor, even those it would be fair for the client to retain. Liquidated and Ascertained Damages (LADs) are written into contracts as a calculation to protect clients from the loss of revenue through delayed project completion. They do not represent a penalty - such clauses are outlawed in the UK - but they are there as an almighty stick if the programme gets a little shaky.








So what should clients be doing if they want to follow lean principles?


1) Clients should provide as much information as possible about their expectations from the project, including what they consider their "Key Success Indicators" are (I've avoided using the term "Key Performance Indicators" here because it's so annoyingly linked to targets in people's minds - see my previous entry on the absurdity of targets!) During construction they should be continuously measuring output performance against the KSI's.
Also, it's o.k. for contractors to ask questions if something isn't clear during the tender stage, so long as the client is fair in their answers and provides the additional information to all contractors involved in the exercise. So contractors, don't assume what the client wants (because you make an ass out of you and me...)


2) The problems with variations fall into two camps: those instigated by the clients and those instigated by the contractors. The first is due to a lack of the client's understanding of just how disruptive variations can be. They think "wouldn't it be nice if we had gold taps instead of chrome, I wonder how much that will cost?", so they ask the contractor and he tells them and they agree to the additional price. For clients it's as simple as asking a question and getting a response, but in order to provide that response the contractor has to source a suitable product, maybe price it from different vendors, throw in a bit of negotiation to weedle the price down, omit the original sum from their contract calculations and add in the new one, work out the difference and then inform the client. And all that work for an answer that might be "no, that's just too much money - what about silver ones?" And all the while the clock is ticking on the programme..... The way to overcome this variation problem is to freeze the design before construction commences (locking in the standardisation chock).
Usually the latter is caused by Employer's Requirements that are drafted as product-based specifications. In the current downturn there have been many suppliers/manufacturers that have gone out of business and so their products no longer exist. This leaves contractors having to establish what it was performance wise that the client wanted from that particular product by using a substitute, and that throws up questions of comparable quality. I would therefore advocate the use of performance-based specifications instead of product-based ones.


3) Clients could opt to use a multi-party contract, such as PPC2000 (the first of its kind and developed by Trowers & Hamlin), which supports various forms of risk allocation. Unfortunately its use (certainly in my experience) has been next to non-existent, because clients like the safety of tried-and-tested methods. They feel protected hiding behind a contract bound to litigious forms of dispute resolution, much like children run to their mother expecting her to wave a magic wand to make it better, rather than resolving contractual issues themselves ultra-atriis (as adults.....)


4) The supply chain needs to be fully integrated and this is where the multi-party contract comes into its own. Not only is there a direct contractual link (very usefully!) between subcontractors, suppliers, main contractors and client, risk can also be distributed to those who are best able to take it. So no warranties, no heavy risk loading.
A progression from this would be the establishment of a project trust, into which the client places the contract sum, and the (sub)contractors draw down from as work is completed and agreed. This means if one party is removed from the equation the others can be reassured they will still be paid.


5) As mentioned above already, risk should be evenly distributed between the client and the winning contractor and its allocation decided early on in the tender process. All contractors tendering will include a premium for accepting risk, as an element of their profit make up. As a client, if you pass more risk onto the contractor you may think you are getting a better deal but really you're just pushing up the tenders. Of course, a contractor that is desperate to win work may reduce their profit, even running the project at cost, but that will only backfire on the client when they go belly up due to cash flow issues (a MAJOR risk).
As a rule of thumb, time risks are best allocated to the contractor whilst cost risks should stay with the client. Quality risks belong to both parties ("quality is everyone's responsibility" - W.E. Deming, the great systems thinking master).
To that end, I don't believe that clients will want to drop LADs from contracts (unless they are very trusting of their partnering contractor - or stupid, you decide!) but they should be very realistic. There is a fall back formula the courts or adjudicators will use if one is not explicitly written into the contract, so it would be wise to take the opportunity to calculate the actual business loss a late completion would cause and insert that in the contract.




A final point about strategic partnering is that it offers a real opportunity to implement continuous improvement, by sharing the learning from project to project. Reviews of what went well and what could be done better next time are a valuable tool, particularly if all the project team are involved in those discussions. Mistakes will happen, specification items will become outdated and things will change in the external economy, but through strategic partnering we can learn, we can grow and we can get better. Together.




Wednesday, 7 March 2012

The Absurdity of Targets

I've been meaning to write this entry for a while, as it's a particular aspect of systems thinking I feel passionate about. The theme today is how setting targets does not drive improved performance and can instead create perverse behaviours in the attempts to achieve them. I've chosen to use a personal example here to illustrate my point, rather than a work-based one.


A few years ago I joined Slimming World in an attempt to lose some weight. I went along to the first meeting full of trepidation at what this plan would involve, but after hearing so many success stories and picking up the cheery vibes I was convinced of its reputation and made the commitment to give it a go.




I won't liken my body to a temple (unless you want to compare it to the ruins of Greece or Mayan culture!) but rather a complex organic system involving thousands of biochemical processes. My purpose in joining SW was to lose weight and to do that it advocated a radical change in diet towards eating healthily. My processes of consumption were "redesigned" - shopping habits altered from a mad dash around the supermarket, avoiding temptation from aisle-offers, to planning all the meals for the week in advance, writing a shopping list accordingly and sticking to it! Cooking methods also changed: olive oil was swapped for fry-lite and weekend breakfasts were grill-ups instead of fry-ups.


These "new" processes interacted in combination to change the output of the system. On my first weigh-in I was delighted to learn I'd lost half a stone that week. Motivated by my achievement I stayed on for the round circle group session, also known as "image therapy". This involved the consultant reading out your weight loss that week followed by a discussion of how you felt it went, concluding with setting yourself a target weight loss for the coming week.


I noticed whilst staying to this session there were mixed successes: some people gained weight, some people stayed the same but the majority did actually lose weight - I'd have been discouraged if that were not the case! The people who stayed the same or gained usually knew the reasons why. I amounted this to variation from the standard process - they hadn't followed the plan 100% because it had been someone's birthday and there was cake, or their husband had left them so they had drunk a bit too much at the weekend (to celebrate, of course).


Over the next few weeks I was fortunate to lose more weight, but soon I became bored with the rigidity of the plan and consequently strayed on occasions. This inevitably led to a weight gain, but I philosophised this was part of the weight loss "journey" - instead of going straight to my destination I was taking the scenic route!


Now the really interesting observation from all this was not how I reacted to the weight gain (or loss) in itself, but rather how that compared to the target set the week before at the inquiry of the consultant. I noticed myself feeling the same pattern of emotions depending on the outcome of the week's weigh in:


  • If I had gained weight and so not met my target it made me feel like a failure. I questioned the success of the plan, my commitment to it and failed to take into account the success of the journey so far. Many times I would have thrown away all my hard work based on missing just one target!
  • If I had lost weight but not met my target then I felt a mixture of disappointment at not achieving it. This distracted me from the fact that I had lost weight that week and undermined that achievement. I then felt guilty for feeling bad instead of celebrating, particularly when the group congratulated me.
  • If I had lost weight and met my target then I felt infused with a renewed enthusiasm, a euphoria and a confidence that I could achieve anything. It either led to cockiness as I set myself a higher than normal target (possibly even unrealistic) as a challenge, or if there were lots of weight gains then I played down the achievement, again undermining it.


Because of the negative feelings of failure, disappointment, guilt, wavering commitment, I began to alter my behaviour in the days between meetings. Firstly, I committed the cardinal sin when trying to lose weight as I became obsessed with the scales and weighed myself every day and at different times of the day to try to understand what affected my weight. This meant instead of following the standard processes of healthy eating, I could cheat! So if I had a "bad" day then the next one I ate very little by way of restitution. I also chose lighter clothes for my weigh in after a bad week, heavier clothes if I thought I could get away with it without showing a gain. (There are many more examples.....)


In this way it made a mockery of what the scales were really measuring, and consequently whether I had truly met my target or not. But the cycle continued week in, week out.


Eventually I plucked up the courage to take a stand and said to the consultant that I no longer wanted to set a target. She seemed a little taken aback but conferred it was my prerogative to do so. The reason I stopped setting myself interim targets was because it was distracting me from the end goal: a weekly target of losing 1-2lbs compared to a *however-long-it-took* goal of c. 6 stone: the latter goal was my idea of "perfection", when I would be happy with my weight.


As a result of removing the targets I stopped beating myself up on weeks when I gained. I left meetings feeling as if a line had been drawn in the sand, and that the next day was a new beginning. I placed my overall end goal in sight instead of arbitrary interim targets. My positivity made it easier to stick to the plan, by being kinder to myself and more realistic.


In a future blog entry I will explore how understanding the capability of the system by measuring what is really happening is a much better way of understanding processes and facilitating change accordingly, rather than setting arbitrary targets.