Friday, 18 March 2011 11:03

Power to the People!

EmpowermentWhile I was pumping my gas the other day, I noticed an advertisement sign sitting on the top of the gas pump.  The sign said that if all Americans would keep their tires inflated to the proper pressure, as recommended by the manufacturer, we could collectively save 700 million gallons of gasoline per year.  The sign was an advertisement for ExxonMobile tire linersthat are intended to help reduce the amount of air lost through the tire.  While I found the concept intriguing, it wasn’t the first thing that popped into my head as I read the sign.

There I was, standing outside of my car waiting for the gas to finish pumping.  I read the sign and was suddenly motivated to make sure that my tires were properly inflated.  I looked around and noticed one small problem; the very moment, at which I was motivated to act, I was not empowered to act.  I looked around and spotted the air compressor, far away on the other side of the parking lot in an area that is not well lit.  My heart sunk.  See, I know myself well enough to know that my likelihood of acting on my impulse goes down considerably with time.  I was stuck there waiting for the gas to finish pumping, with the time to inflate my tires, and couldn’t do it.  So what happened?  I got in my car, drove out of the parking lot and didn’t think about my tire pressure again that day.

You may think I am strange for not taking the time to go over to that air compressor and check my tire pressure, but am I really any different than everyone else?  I’ve never seen a line at the air station.  Actually, the only time I ever see anyone at the air station is when they have an obviously flat tire.  Why is this?  We all know that driving on under inflated tires is bad for fuel economy, tire life, and possibly a safety hazard and yet we rarely if ever check our tire pressure and make sure it is where it is supposed to be.  I believe the problem is just as I described above; at the very moment in time which I was motivated to act and had the time to act, I was not empowered to act.

So what is the solution?  My proposal is simple – make compressed air with a tire gauge available at each fuel pump.  That way, I can check and adjust all of my tire pressures while I am waiting for my gas to finish pumping.  Empower the people to make a change at the exact time and location where they are motivated to do it!

I don’t own a gas station so I can’t say why they don’t do this today but I’d bet if asked, most would point to the underutilization of the one air station they have today as justification for not buying 15 more of them.  Why buy 15 of an item that only gets used 2% of the time?  Maybe we are looking at it all wrong.  Maybe the reason it is only utilized 2% of the time is because we put it in a place that is so inconvenient to use that people will only use it when they absolutely have to (about 2% of the time).  I would be willing to bet if a gas station were to invest in the installation of compressed air at each gas pump, the utilization rate would be much higher.

This post is not just about gas stations and properly inflated tires, but rather about empowering your people to act at the right time and proper location. 

If you own a factory, think of these questions...

How many brooms and dust pans are in your factory?

How far does the average worker have to walk to get a broom and dust pan? 

How much cleaner could your factory be if every place where a worker ran into a mess on the floor, magically there was a broom and dust pan within arm’s reach? 

How much cleaner would your factory be if you empowered your people to clean at the very moment when they felt motivated to do so?

Think of how many times we do this in our own lives.  How many times do we walk over some mess because there isn’t a convenient vacuum around to clean it up?  How many times do we drive on underinflated tires because there isn’t a convenient air station to use?  How many times do you improvise and try to pry open a can of paint with a screw driver because there isn’t a convenient can opener within reach?  How many times do we not do what we are motivated to do, because we are not empowered to do it at that very moment?

Too many times!

It’s time to start making a difference in our own lives.  Empower ourselves and our people to act.  Next time you are out buying a broom, buy two or three.  Place them in strategic locations that are likely to have a mess.  If you own a gas station, invest in more air compressors and see if they get used more (you would not only be helping the American people save fuel but would also be setting your gas station apart from all of the other gas stations around).  If you are in the customer service industry, empower your employees to go above and beyond for your customers whenever they feel motivated to do so.  This small investment in resources will create huge returns in customer satisfaction. 

Let’s all start making a difference by empowering our people to act when they are motivated to do so.

Good luck and feel free to share your story if you have experienced a change in behavior due to empowerment.

Wednesday, 06 April 2011 11:01

Service Quality

Seth Godin hits the nail on the head. http://bit.ly/fD47JR

But great service designs require more than designers signing their work. Great service designs require a process.

Listen – Observe and understand the customer. Take the time to really understand what the customer wants. Understand the why behind the what. Stop talking. Start listening. Designers must experience their customers first-hand. (No, reading tweets is not first-hand experience!) Empathize with the customer who gets a blast of cold water from the hotel’s shower head.

Enrich – Explore and discover the best alternative. Once you have a rock solid, visceral understanding of customer needs, don’t rush to the first concept that comes to mind. Take the time to explore all the concepts. Invent some new ones! Select (discover) the best design - the best design for your customer at a cost the customer is more than willing to pay.

Optimize – Improve and perfect the discovered design. Once the best design is discovered, improve that design. Break it down to the details. Combine and re-combine until you are certain that you’ve found the best version of the design. Then, take that best version of the best design and sweat every detail. What can go wrong? Play the “what-if” game. Then create a solid counteraction for every problem. Replay the “what-if” game. You’re done when you’re certain the customer will never have a bad experience.

Test your final service design and then provide it to your happy customers.

A few weeks ago Obama began his bid for re-election in 2012. Don’t worry; this won’t turn into a political blog… But when I heard this, it got me thinking. I was reminded of the last elections in 2010. I remember telling my wife during campaign/election season that it was tough to figure out how I wanted to vote in most cases because I didn’t hear much from any candidate on why they should get my vote. Instead I heard a lot about why ‘the other guy’ should not get my vote.

The reasons why I should not vote for ‘the other guy’ ranged from some that were very reasonable to some that could make you think ‘how-could-this-person-even-be-running-for-office?’ In fact, if you go to youTube and search negative campaign ads you can see for yourself. Chances are you’ll see some ads that seem quite absurd. Some are so ridiculous they’ll make you laugh. It’s sad really. The ads are full of partial truths and bits and pieces of someone’s record taken out of context. Most people, I hope, are smart enough to see through this but the ads somehow still work. If they didn’t, they wouldn’t be run so often by so many candidates. What does it say about us as the electing population if this is what we respond to?

That question then led me to think what would happen if the same approach was taken in other aspects of our lives. What if companies all treated each other as ruthlessly as these politicians running for office? Can you imagine if some of the auto companies like Ford and Honda played ads featuring a dramatization of speeding, run-a-way Toyotas crashing as accelerator pedals got stuck as it had happened leading up to the 2009 Toyota brake defect/recall? The auto industry is one of the most competitive industries in the world, and even though the other companies tried to capitalize on Toyota’s mistakes and misfortune, an approach like this would not be taken. Think about why that is...

Let’s try another scenario. Let’s say you have an upcoming job interview for a position you really want. And in this case, you even know who else is being considered for the job. What do you think would happen if, when you sit for the interview, you spend 90% of the time telling the panel of interviewers why the other candidates should not be hired? Chances are you wouldn’t get the job. I think the interviewers would even be shocked and appalled by your behavior and they wouldn’t have much respect for you afterward. If you think about it, the campaign season is basically a long, drawn-out job interview. We, the voters, are the panel. Yet, we accept this behavior from people who are running for office, who are up for a job that can impact so many lives. Again, what does this say about us if this is what we respond to?

Whether we’re making decisions about what products to buy or who we should hire for a new position at work, we have a higher standard. We don’t let companies or people get away with insulting our intelligence or treating us (consumers, interviewers, etc) or each other in a disrespectful manner. Why in campaign season does that change? What would it be like if we maintained this higher standard during our elections? Would society be better off?

Wednesday, 20 April 2011 10:54

Be Wrong to Be Right

Wrong is in vogue. A song by Depeche Mode is named “Wrong.” Seth Godin blogged about failure:http://bit.ly/fGNB1kKathryn Schultz presented at a TED Conference about the importance of being wrong. http://bit.ly/gD0kPm

Kathryn said being wrong is the source of our creativity.

In the Optimize Phase of LEO, we try to be wrong. We test variations of our best design concept from the Enrich Phase. We test the variants we expect to be good.  We test other variants we expect to be bad. If the expected good are really bad or if the expected bad are really good – we learn. We even learn if the good are good or the bad are bad in a manner different than what we expected. We learn as long as we’re wrong aboutsomething.

Tom Kelly, the founder of IDEO, once said “Fail early and fail often.”

Failure is the key to creativity.

Design failure into you development process. Assure that many low-cost failures occur before you send your products or services to your customers.

Reward failures during the design & development process.

“Great job, Jim,” say to your employee, “that idea of yours was one huge failure!”

The worst result in the Optimize Phase is to be right. Don’t fear being wrong. Don’t avoid it. Being right is the most dangerous result. We gain no knowledge. We remain ignorant. We happily avoid creativity, invention and insight.

Be wrong to be right.

Friday, 16 December 2011 10:51

What is LEO?

It’s not just the processes or methodologies that a company works with that can make them more or less successful. What is the reason that some succeed and some don’t when implementing the same initiatives and methodologies (i.e. Six Sigma, DFSS, Lean, etc.)? There are always plenty of variables, but one of the most critical factors in answering this question is the company culture and mindset of its people. Most companies implement some type of quality initiative and expect the culture change to happen as the company gains experience. This can work, but it often takes more time than most are willing to spend.

This is where LEO is different. It is about that mindset needed to be successful. It is a fundamental business philosophy that if followed can lead to extraordinary results with an emphasis in 1. Developing Products, 2. Solving Problems, and 3. Improving Processes. If there is focus on the mindset and philosophy behind some of the proven methodologies, the effectiveness of the methods and the people learning and using the methods is far, far greater for your business.

The thinking is that this needed focus on the philosophy can facilitate the culture change  by focusing on Listen, Enrich, Optimize rather than on a ‘tool’ or ‘toolset’.

Wednesday, 18 May 2011 10:46

A Tale of Two Phone Calls

Recently my family decided to start a garden in our backyard with some friends of ours. Last fall we sat down and collectively decided what and how much we wanted to grow. Then, each family went on-line and researched the best places to buy the vegetables that we were interested in growing. We both decided that we would order most of our seeds and starter plants from a large national company, figuring that they would be the most reputable. So, when the time came, both of our families called and separately placed our orders.

One nice selling feature that drew us to this company is that they would ship us our starter plants at the time when it is appropriate for them to be planted in our area, which happens to be late May. This means that we wouldn’t have to keep the plants inside our house for three or four weeks, constantly moving them inside and outside depending on the weather, until it is time to put them in the ground.  This seems like a little thing but it can be harder than it sounds to keep plants alive for that amount of time.

You can imagine our surprise when all of our tomato plants showed up on our doorstep the first week of April, eight weeks early! We were confused to say the least.Immediately, my wife called our friends to tell them what had happened and found out that their tomato plants had arrived that day too.

After a brief discussion about what to do, both of them decided to call the company and explain to them the error that had obviously occurred.

My wife called the customer service number that was listed on the website and explained to the person that there was obviously a mix-up and that our tomato plants got shipped eight weeks early for our zone. The customer service representative (CSR) on the other end of the phone stated, as if reading from a paper, "Mam, we ship our plants on the date that is appropriate for your zone."My wife was slightly confused but continued to explain to the person what zone we lived in and that according to their own website, we shouldn’t have gotten our plants for another eight weeks.The response that came back was, “Mam, we ship our plants on the date that is appropriate for your zone.” After much discussion back and forth with the same response coming from the CSR every time, my wife got frustrated and asked for a refund for our plants. The CSR agreed to refund our money. My wife hung up the phone completely frustrated and refusing to ever buy products from that company again.

Meanwhile, our friend called the same customer service line and talked with another CSR. She also explained the situation and described how there must have been an error in the ordering system because she wasn’t supposed to receive her tomatoes for another eight weeks. This CSR was immediately apologetic and asked what she could do to fix the situation. When our friend asked if she could just get tomatoes delivered at the appropriate time, the CSR arranged for her name to go to the top of the list of people to have plants delivered to in late May. Then the CSR continued and asked if there was anything else that she could do to make up for the error.  Our friend declined anything additional and hung up the phone completely satisfied.

Image the surprise when my wife called our friend later that day to discuss how her phone call went.The two conversations couldn’t have been more different.

Now this blog isn’t about buying tomatoes or whether or not to buy stuff from large national companies, it’s about true customer service. True customer service happens when you help a customer accomplish the task that they are trying to do. Both my wife and our friend were trying to get tomato plants delivered at the end of May. Only one of the two “customer service representatives” helped the customer on the other end of the phone accomplish that task.

Being a very large national corporation, I’m sure that this company has many processes and procedures in place to help their customer service representatives handle any number of different situations that may arise when the phone rings. For all I know, they may have even gone through one of those fancy initiatives where they brought in a high priced consulting company to help them standardize their work flows. Based on my wife’s experience, they obviously have a set of canned answers for some of the more common questions that they face. This is an obvious case where the company has implemented a set of tools that they perceive bring value just because they were implemented.The sad reality is that the tools didn’t work because they missed the heart of the issue. The heart of the issue is implementing a mindset, a way of thinking, not a bunch of tools.

Many people concentrate on using tools in a set order to produce an output that they desire. What they forget about, or never even think about, is how key the mindset is while utilizing the tools. The CSR that talked with our friend had a mindset of pleasing the customer. The tools utilized by that CSR were empathy, apology and making amends for a wrong doing. The CSR that talked with my wife had a mindset of using the tools. The tools utilized by that CSR were the process flow and work instructions that were standardized within the department.The later CSR never deviated from the paper that had the work instructions. That CSR read the “correct” response straight from the paper, just like she had been taught to do.

The sad reality is that on paper, in the eyes of the accounting department, the outcome of both conversations will look identical. Both conversations gave away the cost of one order of tomatoes. The monetary loss to the company looks identical. However, the real reality is that the company also lost one customer. That monetary value will not get captured on this year’s balance sheet, but itwill show up over time.

So what is the moral of this story? Focus on the mindset, not just the tools. That is the power of LEO.

Thursday, 26 May 2011 10:44

A Quality Mindset

Last week Brad Feiler posted a blog on this website about the mindset of an organization and a few days later Mike Westra blogged about how two different customer service representatives addressed the exact same problem, but with different mindsets. These blogs got me thinking about how companies can truly change the mindset of its people.

I have found training and implementing tools like those used in Six Sigma, Design for Sigma, TQM, and etc. do improve a company’s bottom line, but to truly get breakthrough results, the mindset of the entire organization must be changed. Transforming the entire organization’s mindset requires changes to business processes inside and outside of engineering, as highlighted by Mike’s customer service reps. LEO customizes improvements based on each company’s needs, not a rigorous step-by-step methodology. This is very critical! LEO involves all the people, all the time. LEO redefines and expands our definition of quality to include the quality of people and the organization’s social responsibilities.

With DMAIC and DFSS, there were different approaches depending on whether a new product was being designed or an existing process being improved. In addition the approach varied depending on whether it was a manufacturing or transactional process.

Regardless of the situation, the Listen, Enrich and Optimize phases of LEO can be applied. Tools may differ, but the three steps remain the same. The common underlying structure of LEO helps simplify the confusion many companies have faced when implementing multiple improvement initiatives.

LEO is a two pronged enterprise wide execution plan involving CULTURE and PROCESSES. LEO is a business transformation methodology that incorporates “people power” and “process power” and affects both culture and processes. To change an organization, it is important to affect both culture and processes. Most organizations however only concentrate on the process side of the equation which involves actions and results. They do not address the culture side which involves the beliefs and experiences.

Affecting both is the key to deep rooted and sustainable change.

CULTURE (People Power): To positively affect culture within your company, new positive ‘Experiences’ must drive changed ‘Beliefs’. In order for this happen, 5 elements or pieces come together to form the basis of cultural change:

1. Understand: Understand the resistance to cultural change – there is individual fear such as fear of the unknown, self-interest, habits, and dependence; and there is group level fear such as threats to power or influence, varying perceptions of goals and standards, and resource limitations. Different departments within regional offices and different regional offices will have different resistance to the changes. These must be identified and understood so effective counter-measures can be implemented. Also, ongoing cultural analysis must be done to measure sustained culture change.

• Voice of the Customer (VOC) analysis for employees
• Counter-measures to change resistance identified and implemented
• Ongoing VOC analysis to insure cultural changes are positively affecting the entire organization

2. Teach: Teach all employees the basics of the LEO methodology and tools – based on the VOC analysis — so that everyone (all the people, all the time) plays a role in the change process and fully understands. This lays the foundation for cultural change by teaching the principles and behavior changes necessary for rapid process improvement.

• LEO Management Training
• LEO Project Leader Training
• LEO Team member Training

3. Apply: LEO tools applied correctly within any organization will allow any employee to identify problems, find the root causes, make the needed changes and positively affect those products and processes that are studied. By doing this, they will be creating new ‘Experiences’ and ‘Beliefs’ that will be communicated throughout the organization to change ‘Beliefs’ and ‘Experiences’ of other employees – first hand accounts of changes that have been made.

• Completion of projects to generate results
• Communication ‘bytes’ that strengthen ‘Experiences’ and ‘Beliefs’

4. Communicate: Keeping all employees informed by telling them what is expected of them regarding organizational change process and the progress status helps to ensure commitment and is critical to the success of the change. It also will continue to provide new ‘Experiences’ which will change ‘Beliefs’. In order to achieve a quality mindset for the entire organization, all employees must be headed in the same direction, especially since a lot of these changes will be incremental, so communication will need to be almost continuous.

• Communication plan
• Expectation ‘bytes’
• Status update ‘bytes’

5. Revise: Make revisions where necessary to management practices such as employee promotions, pay practices, performance management, rewards/recognition and employee selection to make sure they are aligned with the desired culture

• Analysis and alignment of Human Resource Systems to reward and promote new behaviors that align with process improvement changes

Once a company successfully transforms its culture, the full potential of the workforce can be leveraged to achieve incredible results.  I often talk about the “art vs science” of applying many of these quality improvement tools, but I think there is no larger aspect of the entire process more obviously “art vs science” than culture transformation.

In general, it is not easy for companies to apply these simple ideas. However, the attempt must be given every effort if they are to have any hope of a achieving a quality mindset.

Thursday, 16 June 2011 10:40

Them's the Breaks

Kano Model

The Kano Model is a tool commonly used in the product development process to help classify customer wants and needs into one of three main categories.

The first category is called Basic Needs.  Basic Needs are customer needs that are usually unspoken unless they are violated.  These types of needs don’t add to the overall customer satisfaction of the product, but they can take away from the satisfaction level if they are not met.  An example of a Basic Need in an automobile is its ability to keep water from entering the inside of the car and getting the driver wet.  A car owner never runs over to his neighbor and brags about how well his new car keeps water out; this is because it is expected.  However, if his new car leaked water on him when he went through the car wash, you bet he would complain to his neighbor about that!

The second category is called Performance Needs.  Performance Needs are things that the
customer will most likely talk about in everyday conversation.  These types of needs add to the customers overall satisfaction when delivered well and detract from their overall satisfaction when done poorly.  An example of a Performance Need in the hotel industry would be the quality of the view from your hotel room.  If the view is terrible, say looking straight at a brick wall two feet away, the customer would most likely complain about it and be upset.  However, if the view is overlooking a beautiful bluff with a view of the ocean, then the customer will be very satisfied.

The third category is called Excitement Needs.  Excitement Needs are customer needs that are usually unspoken because the customer doesn’t even know that they are possible.  These needs don’t detract from the overall customer satisfaction level because the customer doesn’t even know it is possible but, if they discover it in their product they are excited and feel like they got something extra.

I recently discovered that the brake system in my wife’s car is a great example of all three types of customer needs.  First, it has a break system that stops the car every time we hit the brake pedal; obviously this is a Basic Need.  Up until now, I have never mentioned this feature to anyone because it met my expectations.  Second, the original brake pads have lasted 95K miles; this is a Performance Need.  Brake pad life is a Performance Need because if it is too short, say 8K miles, the customer would be very upset.  However, delivering 95K miles on the original pads is something that I am very pleased with.  Third, at 95K miles the car actually flashed a message on the gauge cluster asking my wife to please check the brake pads; this is an Excitement Need!  The car knows when it needs the brake pads changed and it quietly informs the driver!  I say quietly because we’ve probably all experienced the alternative method of informing the driver of worn brake pads, squealing.  Squealing is an effective method of informing the driver but, can also embarrass them every time they slow down.  My wife’s car informs only the driver so that she can rectify the situation without any undue embarrassment; now I’m excited!  Previously, I would have never talked about this feature because I didn’t even know that such a thing was possible.  From now on I will be looking for it in every future vehicle that we purchase and I will be disappointed if it doesn’t have it.

In order to really win in the market place, your products need to deliver on all three types of needs.  Basic Needs are met by everyone, so these won’t differentiate your product from your competition.  You can choose to beat your competition in Performance Needs as a way to differentiate yourself but someone else can always come along and one-up you too.  Excitement Needs are a way to truly differentiate your products and make sure your customers come back to you looking for more.  Make sure you deliver them all so that you are giving your customer the full package!

Sunday, 26 June 2011 10:39

McPeeved

I don’t normally complain about customer service. If service is bad, I just don’t tip as well as I normally would, or don’t go back. But recently I have become so irritated by an issue that I have complained twice. And both times I got the same excuse, “…we don’t like it either, but it is corporate policy”.

After hearing that excuse for the second time within a couple of months, I was fired-up. I decided I was ready to go on-line and find a number or email address so I could contact the corporate office. It was time I let them know how much their policy is making customers upset.

Now, 24 hours later, I am wondering why should I waste my time to try and help them realize how their policy stifles their store’s ability to deliver customer satisfaction. Then I realized how timely this was considering that Brad Feiler, Mike Westra and I have all blogged about very similar issues in the past few weeks.

When it gets late, or I am in a hurry, I go through the drive-thru at the local fast food restaurant. (Hopefully my doctor doesn’t read this, because he has been on me to lose weight for a long time, and fast food is strictly forbidden.) I know I shouldn’t do it, but sometimes I have to and I feel guilty about it. I imagine many of their other customers feel this way too. So why would they do anything that makes the experience less than pleasing on purpose?

Several weeks ago I drove up to the menu/speaker to hear “Welcome! Would you like to try a fruit and maple oatmeal? Please order when you are ready”. So I start to order, and then I hear “Sorry I didn’t get any of that can you please repeat your order”.

At this point I asked the person why had they told me to ‘order when ready’ if they weren’t ready to receive an order. They informed me that it was corporate policy to play that recording… even though they are often not ready. I thought it was a stupid policy, but let it pass, and repeated my order. A couple of weeks later I returned, and remembering the problems from my previous visit, I paused for a minute or so when the recording finished. Then I asked if they were ready to hear my order.

Last night I returned for the third time. We were in a hurry trying to get food and get back home in time to watch a TV show that was about to start. As soon as the recording finished I gave my order, and when done I hear, “I am sorry can you please repeat the order I didn’t hear it”, I said “This really makes me (cleaned up here for the blog) angry. Every time I come here, you ask me to order when I am ready, but you are never ready”.

When I got around to the second window, a manager handed me my food and said she had heard the exchange over her headset and wanted to explain that it was corporate policy to play that recording even though they are usually not ready to take the order at that time. She said, “Myself and many of the other employees hate that and know how frustrating it is for the customer, but it is corporate policy, and they make us play that message”.

In the competitive market of fast food business, I cannot image any corporation would set a policy to possibly annoy so many customers. I don’t know the true root cause of the problem, and I don’t know if it is a corporate policy or an internal store issue, but I was not happy. Not knowing if this really was a corporate policy, I called the 1-800 number from their website and talked to someone who verified that she gets this complaint almost every day, I suggested to just remove the ‘order when ready’ phase and have them say that part live. She seemed to think it was much more complicated than that and there was a hardware type issue with the system (I don’t even want to go there).

I could see the manager truly wanted to fix the problem, but felt her hands were tied. I understand the importance of standardization to ensure the quality of the food that is prepared and served, but to standardize things that are obviously an annoyance to the customer is wrong.

I think that manager would have gladly given me a number to the corporate office with the hope that my complaint could get the policy changed. To me the sad issue was the reality of her fear of doing it herself. Or her fear of incurring corporate wrath by just ignoring the policy for her store. Why is she afraid to step up and get the policy changed?

If their corporate culture was customer focused, don’t you think suggestions to fix these types of problems would be eagerly accepted? Fear or perceived fear is a characteristic that unfortunately affects too many companies. I remember Jack Nicholson’s line, “You can’t handle the truth!” and how fitting that line can be when used to describe many in leadership roles.

For a customer centered culture, you must learn to see the truth and correct any issues that you find, not bury your head in the sand and ignore it. Every employee must feel empowered to make suggestions and raise issues without fear of repercussions. In fact, they should be rewarded and encouraged to do so. Then, maybe someday, I can get a quick meal without becoming upset.

Friday, 29 July 2011 10:29

Learning to "See"

A friend of mine told me a story the other day that got me thinking about people’s inability to “see” waste.  The story goes like this…

My friend currently owns two houses; one he lives in and one he leases out through a property management company (we’ll call Company X).  Periodically Company X needs to go into the rented property for one reason or another.  Before going into the rented property, Company X contacts my friend to let them know why and when they are going to need to enter the property.  Each time this happens, my friend politely reminds them that they will need all three keys in order to gain access.  My friend doesn’t have to remind them of this but does so out of consideration.

So, the other day, a representative from Company X showed up at the rental property with only one key, and then called my friend wondering why they couldn’t get in!  Now, Company X is a nationwide property management company, not some fly-by-night outfit run by Joe Shmo out of his basement.  It seems reasonable to expect that Company X would have processes in place to prevent this sort of error from occurring.

Let’s assume for a minute that the representative from Company X had to drive 40 miles round trip – 20 miles to the rental property and then 20 miles back to the office to pick up the rest of the keys.  Let’s also assume that the representative was driving a car that gets 20 mpg.  Under these assumptions, the representative wasted 2 gallons of gas due to that error.  At the current price of $4.00 per gallon, that would equal $8.00 in wasted fuel.  Now, let’s also assume that the representative makes $15.00 per hour and the wasted trip took him one hour.  The total paper cost to Company X for forgetting the keys would be $23.00.  That is $23.00 that comes out of Company X’s bottom line profit.  This is pure waste and lost profit all because Company X doesn’t have a system in place (or the system they have doesn’t work) to make sure that small errors like this don’t happen.   However, the reality is likely that Company X has very few systems in place to even recognize that this was waste in the first place, let alone measure it, track it, and fix it.

In other words, Company X can’t even “see” the waste, no wonder they don’t fix it.  I don’t believe that any company would purposefully waste money if they knew that it was happening.  If someone from Company X accidentally dropped $23.00 out of the cash register, I’m sure they would pick it up.  I just believe that many companies don’t know how to “see” waste when it is not as obvious as “green-backs” on the ground.  I think that most companies could be improved if they just learned to “see” waste.

When first starting to work with a company, I often hear people say things like, “It’s just $23.00, what’s the big deal?”  or , “Yeah, but that is just a one-time thing.”  These viewpoints come because people can’t see waste.  When someone comes in and points out one thing, it seems obvious to them at that point.  However, because they haven’t learned to see waste, they believe that it is an isolated incident that doesn’t happen anywhere else.  Over time however, these same skeptics marvel at how much waste has been right in front of them the whole time but they couldn’t even see it!

Learning to “see” waste is one of the key differentiators between the LEO methodology and the traditional process improvement techniques.  Most techniques just teach tools and how to use them (which is necessary and useful).  However, tools are better utilized by a person who can also “see” the need for the application of a specific tool at a specific time.  Without being able to see the specific need, people will miss apply tools or worse yet, not apply any tools at all!  We’ve all heard of the old saying, “When all you have is a hammer, everything looks like a nail.”

pry looking around and spotting waste.  You will soon realize that waste is everywhere once you learn to recognize it.  If you can’t see it, give us a call, we’d be more than happy to teach you how to “see.”

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