This is the final post of a four part series. You can read the first three posts here:

1. 3 Pillars of Operations Improvement
2. Pillar of Operations Improvement – Business Process
3. Pillar of Operations Improvement – Management Tools

First we thought about how any business department operates on a cycle of activities making up a business process, and noted that the operations of the processes can be improved through elimination of waste and variability and balancing around the constraint.

Next we thought about how even a very well designed business process can fall off track if its managers do lack an accurate and clear portrait of what the process is capable of and what level it is actually performing at. To improve an operation’s set of management tools, often the best gains are made from increasing detail / specificity to daily schedules, and linking those daily schedules to longer term business requirements.

Finally in this post, I’ll talk about my experiences in where the rubber meets the road – how managers behave such that variances to the process are proactively addressed, employees in the process are engaged and prepared, and if / when variances do occur their root cause is identified and resolved as quickly as possible.

First let’s recognize three critical points:

1. Processes – no matter how automated they may be – are controlled by people that are prone to mistakes
2. Management Tools are only tools; they alone will not result in any operational improvements
3. The role of a manager in operations is to prevent / eliminate barriers to success

While I’m happy to hear from anyone who disagrees with one or more of these three points, I’m moving forward focused on operations improvement!

While improving the process or a piece or two of the system of management tools will often lead to incremental operations improvements, efforts really take hold when the managers change their behavior and mindset.

An effective way to control management behavior and mindset is to plan it out. Consider the different activities that a manager performs each day and those activity’s impact on the operations. For example, is a manager really removing the barriers to the success of her operations when she is in the office approving payroll? Is a manager really removing the barriers to the success of her operations when she is sitting in the weekly 3hr TPS report meeting? There is no denying that meetings and payroll administration are requirements of a business, there is also no denying that time spent on these activities is not the optimal behavior of a manager.

Categorize all of a manager’s tasks into one of the following six categories:

1. Strategic Management – Activities where a manager is planning or evaluating ways to grow the business in the longer term. Examples could be evaluating facility expansion options, planning a new sales territory, meeting with a potential business partner.
2. Proactive Operations Management – Time where a manager is giving or following up on proactive direction to an employee regarding the expectations of the process. Examples are when a manager effectively sets an expectation of an employee by Specifically identifying the task required, setting a Measurable outcome, gaining the employees agreement that the expectation is Achievable, communicating to the employee the Results-based reason for the requirement, and setting a Timeline on which the manager can follow up with the employee to verify the outcome. That’s SMART management.
3. Training – Time where a manager is increasing the skills, knowledge, or abilities of the organization. Training need not be scheduled or in a classroom, but does need lead to an improvement in the operations. Training can be a 5 minute demonstration and review or an hour long presentation followed by 2 days of practice. Training should also be measured!
4. Administration – Time where a manager is performing a task required by the business but not leading to an outcome in their area of operations responsibility. Examples include time in meetings where they are not delivering any of the three categories above, payroll, vacation, employee performance evaluations, etc.
5. Direct Work – Time where a manager is performing a task in the normal process. Generally this includes tasks an employee on the manager’s team has the capabilities to perform. Remember, the role of the manager is to remove barriers to success of the operations – not to be the best performer of the operations.
6. Available to Manage – Time where the manager is available – to – manage. This is the catch all category for any time a manager spends that does not qualify for one of the first five categories. This is also where time should be categorized in case of a failed / ineffective attempt at any of the above categories… As a rule of thumb the categories are decreasingly strict from top to bottom, that is you should only “credit” a manager with Proactive Operations Management if she communicates an expectation perfectly including all 5 components of SMART management. A manager that is Available to Manage is NOT necessarily a bad thing.

Using these 6 categories, build a daily schedule for a manager to guide their behavior.

For example, let’s assume we are thinking of a manager of a team of employees.

• The manager usually works 10 hours per day (7:30a – 5:30p).
• The manager takes part in the daily management meeting from 9:00 – 10:00 every day
• The manager approves his team’s time card every day by noon and usually takes about 30 minutes
• The manager otherwise fills his day with responding to various emails and phone calls from stakeholders of the business, dealing with the daily disasters, and building relationships with his team.

We know that this manager then has 10 hours per day to work with, and that about 1.5hrs per day worth of required administration.

Proactive Operations Management

One of the most basic and most impactful behaviors that a manager can do to improve their operations is to increase the frequency of interaction with their employees. Remember, the role of a manager is to remove barriers to success. Seeing as barriers inevitably pop-up throughout the day, ideally a manager identifies the barrier as quickly after the barrier has popped-up as possible. Therefore, by behaving in a manner that increases the frequency of interaction between a manager and their employee is likely to increase the likelihood of the manager identifying the barrier sooner.

Based on this, a powerful operations improvement method is to guide managers to have 1-3 minutes of interaction with each of their employees every hour or two. By planning a manager’s behavior around these frequent interactions with their employees, it increases the likelihood that they will provide the proactive operations management that drives high performance.

Training

Of the hundreds of managers that I have worked with ALL of them – without exception – expressed that they wished they did / should spend more time training their team. A quick and effective way to kick-start a manager’s training routine is to have them list all of the activities that their team is responsible for performing, then have the manager rank each employee on each activity (this is commonly known as a skills matrix). From this matrix, each day the manager should pick one employee and / or one activity and take some planned time to increase the employee’s capability through on the job training and demonstration and observed practice. Even if a manager only spends 15 minutes per day, they will become better in tune with their teams skills and can improve them even if only slightly over time.

Administration

No business will ever be able to rid itself of administration, but many businesses are successful and minimizing the impact it has on taking their managers away from their role – removing the barriers to success. Two easy ways to minimize a manager’s administration requirements include offloading admin tasks to other employees, and planning explicit time for administrative tasks that minimize the impact of the business. For example, can the HR staff take care of payroll approvals? Can the weekly meeting happen before / after normal business hours one day a week? Can the entire organization agree to check / respond to email at 9:00, noon, 4:00 so as to reduce the interruptions it commonly causes?

Direct Work

Depending on the level of the manager, this may be an absolutely ineffective use of time (e.g. an executive), or a perfectly reasonable expectation for the majority of a shift (e.g. shift supervisor). The most important facets of Direct Work is planning an appropriate amount of time for it based on the level of the manager, and planning the most effective times of day for the manager to perform it. For example, if the afternoons are busiest, the supervisor should be taking care of admin in the morning and direct work in the afternoon.

Available to Manage

Most of the managers that I have worked with are surprised at how much “free time” they have when I take them through this behavior planning exercise. As in the example above, the manager only has ~1.5 / 10 hours of explicit commitments. However, every manager knows that usually the remaining 8.5 hours is nowhere near enough to deal with the daily variables. In fact, this is the exact reason for this exercise in the first place, to take control of these daily variables that consume the vast majority of managers’ days. By deliberately setting frequent times for interaction with employees and proactive direction setting will reduce the seemingly endless line of employee questions or problems. However, every smart manager refuses to pack their calendar all the way full, and intentionally leaves wiggle room for the inevitable emergency of the day, and for that matter the casual chat with coworkers by the water cooler that the manager previously described as building employee relations. Important to remember here is that while fighting fires and dealing with problematic issues is considered Available to Manage, it is not a bad thing to plan a manager’s behavior to include this time. In fact, all 5 other categories should be planned first, then Available to Manage fills in all the blanks!

Making the Plan

In excel, enter the manager’s usual start time (e.g. 7:30 am). Then add 15 minutes for each row below the start time (7:45, 8:00, etc.) until the row of the manager’s usual end time (e.g. 5:30 pm). Label the column to the right of the times “Activity” then label each column working to the right with the successive categories (Strategic Management, Proactive Operations Management, Training, Administration, Direct Work, Available to Manage). Save this template! It can be used for all of the managers in the business!

For each manager enter in the required, time specific activities such as daily meetings into the activity column in the row for the matching time of day.

Enter in the frequent interactions with the manager’s team. Hourly is ideal, but depending on the team, some veteran managers are able to be effective with an interaction first thing in the morning, mid day, and mid afternoon. Depending on the size of the team, these interactions could take up 15-30 minutes.

Block an appropriate time for training. Many managers are effective by committing to two separate 15 minute slots, one in the morning and one in the afternoon. Usually the biggest hurdle here is that the manager is hesitant to get out there and do impromptu training with employees as it is a serious shift in culture. Keep the manager focused on a few ideas – employees ALWAYS complain that they do not receive enough training, and if a manager is consistent with daily training for a week or two the employees will get used to it and the short term awkwardness will be well worth it in delivering continuous incremental capability improvements.

Enter in the specific times for administration activities while at the same time searching for ways to minimize them. A powerful tactic here is to create a mandatory or compelling trigger to stop working on administrative activities at a certain time. For example, one Director I worked with set a 1 minute meeting with his manager who was often letting his administration activities chew up his day. When the manager was late for the 1 minute meeting, the Director would go to his office and express the seriousness of focusing on proactive operations management over administration. The one minute meeting was also the Director’s opportunity to provide the manager with proactive operations management as well.

Enter in the specific times for direct work. As noted above, depending on the level of the manager, this could be nonexistent or substantial.

Finally fill in the remaining time slots with “Be available to manage.” Often managers will amend this activity with a location that rotates throughout the day, e.g. “Be available to manage – factory tour” where the manager roams the factory for 15 minutes visible for employees to approach him and in position to proactively identify barriers to success.

Making it Happen

A manager that takes this model to heed and puts themselves constantly in the best possible position to remove barriers of performance for their team will be well on their way toward Operations Improvement.

Read Previous Posts on The 3 Pillars of Operations Improvement:

1. Part 1 – 3 Pillars of Operations Improvement – Introduction
2. Part 2 – Pillar of Operations Improvement – Business Process
3. Part 3 – Pillar of Operations Improvement – Management Tools
4. YOU ARE HERE – Part 4 – Pillar of Operations Improvement – Management Behavior

Looking forward to discussion in comments,

Rick Maher

This is the third of a four post series. You can read the first two posts here:

1. 3 Pillars of Operations Improvement
2. Pillar of Operations Improvement – Business Process

Removing variation and waste from the process and balancing the process to optimize the constraint will improve the operation. However, where many businesses struggle in Operations Improvement is in realizing these improvements. For example if a simple manufacturing line scheduled the line to produce 10 widgets per hour, then some good process improvements were implemented, but the business continued to schedule the line to produce 10 widgets per hour, was the improvement really worth all the effort?

Pillar 2 – Management Tools aims to attack this and a few other key concepts.

In short, management tools are the tools that managers use to plan ahead, track in real time, and measure past performance of the process.

How To Organize Management Tools

The clearest way to think about Management Tools is to consider 7 buckets of tools:

1. Business / Strategic Direction – High level forward looking constraints and plans of the business. These tools typically comes in the form of annual budgets, capital plans,  business objectives, etc. These tools are planning in nature and generally look out a year or more.
2. Forecast – Forward looking estimate of the amount of business that the company expects to achieve. Forecast time frames range from weekly to annually, and vary in specificity and structure. Forecasts can estimate the dollar revenue, the number of units, or the number of operations activities expected to be required based on sales of the company’s products.
3. Performance Plan – Forward looking translation of performance requirements that a company must achieve to accomplish the Forecast within the constraints of the Business Direction. For example if a company forecasts sales of 100 widgets for a month, and the budget (business direction) calls for operations costs of $5,000, the performance plan for the month should plan operations to achieve cost per unit of $50.
4. Schedule – A discrete plan of who, what, and when the business will perform the operations required to achieve the Performance Plan. For example, if the cost per unit expectation is $50, the materials to produce the unit cost $5, and the wage for the staff that produces the unit is $10/hr, the schedule should plan for staff to spend no more than 4.5 hours on a unit. ($50 cost per unit expectation – $5 material cost = $45 per unit available for wages / $10 per hour wage rate = 4.5 hours)
5. Operations Control – This is the intersection of planning ahead and measuring the past – it is the tool that allows a manager to know RIGHT NOW if they are on track to achieve the Schedule (which was built to achieve the Performance Plan… which was based on achieving the Forecast and Business Direction)
6. Results Measurement – Backwards looking measurement of performance. These tools allow managers to identify variances and lend to operations improvements by identifying the parts of the process that are not achieving the Schedule… Performance Plan… Forecast… Business Direction.
7. Continuous Improvement Loop – A set of tools tracking performance variances and linking operational activities to financial outcomes.

I’ve worked with ~60 businesses, and I have yet to find a single one that comes even remotely close to having a full suite of Management Tools that link clearly from top to bottom. For that matter, only a handful of those businesses link more than 2 of the 6 buckets in a manner such that managers are able to use the tools thoroughly.

So you ask, how do we improve operations using Management Tools?

Using Management Tools for Operations Improvement

In my experience, the fastest way to impact operations for the better by using Management Tools takes 3 steps:

1. As a manager, make a specific list of everything that needs to be accomplished for the day (ignoring the business direction / forecast / performance plan for now…)
2. Quadruple the specificity of the list. If you originally wrote down “complete 100 widgets by 5pm,” re-write it as “complete 25 widgets by 11:00, 50 by 1:00, 75 by 3:00, and 100 by 5:00″
3. If you accomplished the 100 by 5pm, reflect on how you did it, and raise today’s expectation drastically. If you did not accomplish the daily target, create a list of the times and reasons that you fell off track, then when you create today’s schedule plan to take deliberate action so as to prevent the same variances from happening today.

Bluntly, the most common and critical flaw in most business’s Management Tools is that they are not specific enough and do not drive action planning.

To continue driving operational improvements, start at 5. Operations Control and work backwards through each bucket of tools. Blindly I can identify opportunities in ANY business’s operations by stating the following:

• The Schedule is not specific enough – does not clearly depict WHO is going to do WHAT by WHEN
• The Schedule is not based on the Performance Plan (e.g. if the business requires 100 widgets and an employee can produce 10 widgets per hour, why are two employees scheduled for 8 hour shifts? (100 / 10 = 10 hours required… 16 hours scheduled… what will the business receive in return for the 6 extra hours being paid?)
• Operations Control tools are not linked to the Schedule – Intra day the manager may perceive that his operations are on track to accomplish the schedule, but at the end of the day the numbers do not reconcile.
• Results Measurement tools are not timely – Managers review performance January performance in mid February, far too late to take action to identify, let alone correct variances.

And so on…

Bottom Line

The bottom line power of management tools in improving business operations is in giving the supervisors on the front line a clear measurable expectation  that is usable by them hour to hour and day to day that will ensure their accomplishing the higher level business goals. That is, give the supervisors an OPERATING metric such as “widgets per hour” as opposed to a monthly FINANCIAL metric such as “cut labor costs 10%.”

Continue Reading 3 Pillars of Operations Management:

1. Part 1 – 3 Pillars of Operations Improvement – Introduction
2. Part 2 – Pillar of Operations Improvement – Business Process
3. YOU ARE HERE – Part 3 – Pillar of Operations Improvement – Management Tools
4. Part 4 – Pillar of Operations Improvement – Management Behavior

Looking forward to discussion in comments,

Rick Maher

This is the second of a four post series. You can read the first introductory post here:

3 Pillars of Operations Improvement

Generally the most obvious pillar of continuous improvement in businesses is that of the business process.

Most large and many smaller companies have some sort of continuous improvement team that use methodologies such as:

• Lean – eliminate waste and create perfect flow through an organization
• Six Sigma – eliminate variation and track business “defects” statistically
• Theory of Constraints – balance and optimize all business activities to match the capacity constraint

There are others, but at a very high level they are all different ways of attacking the steps, or activities, that a business must go through to complete its business cycle. These methodologies generally began exclusively in manufacturing, and an example of a process could be as follows:

1. Cut raw materials to widget shape
2. Assemble widget components
3. Paint widget
4. Package widget for sale

Recent Project Example

However, continuous improvement efforts are easily adaptable to service organizations, sales, and back office / administrative processes as well. For example, on a recent project I worked with the IT department at a major financial services firm. One of the processes that we worked to optimize in their group was as follows:

1. New employee accepts employment offer
2. HR requests computer & phone set-up for new employee
3. IT sources equipment from vendor
4. IT sets up equipment for new employee…

This was an important process for them to improve because the new employees were typically highly paid and were very reliant on their computer being ready to go on day 1.

An example of a Lean principle that was used in this project was when the IT employee set up the new computer they would often load software that was unnecesarry for the new employee. This is an example of waste, and we developed a clear standard for determining what software was to be loaded for any new employee based on their position.

An example of a Six Sigma principle that was used in this project was when the HR team requested the equipment set-up from IT, the request came through variable channels. Sometimes HR would call the IT Tech, sometimes HR would email the new employees manager who would then ask the IT manager, etc… This variation led to confusion in HR, IT, and the rest of the business over who was actually responsible for arranging the new employee’s equipment. We eliminated this problem by mapping a clear process and communicating it throughout the organization.

Common Process Misconception

My clients in the past have often said “this group doesn’t really have a process so I guess this methodology will not work.”

However, I have yet to find a business function that does not operate on a repeatable process. Some of the more common functions that businesses perceive to be process independent are Engineering, R&D, and Project Management. So, let’s have a look at these:

Common Engineering Process:

1. Gather product requirements / limitations
2. Draft product drawings
3. Determine product materials
4. Create prototype…

Common R&D Process:

1. Research market data
2. Identify market opportunity
3. Brainstorm product to capture market opportunity
4. Pass on to engineering…

Common Project Management Process:

1. Identify project need
2. Set project schedule / budget / expectations
3. Project kickoff
4. Project activities
5. Project reporting / checkpoints…

To drive continuous improvement in Business Process, the key is to remember that any business function is made up of a set of activities that need to be completed, and when analyzed there is always opportunity to eliminate waste, reduce variation, and / or balance the workload to improve the overall operations.

Continue Reading 3 Pillars of Operations Management:

1. Part 1 – 3 Pillars of Operations Improvement – Introduction
2. YOU ARE HERE – Part 2 – Pillar of Operations Improvement – Business Process
3. Part 3 – Pillar of Operations Improvement – Management Tools
4. Part 4 – Pillar of Operations Improvement – Management Behavior

Looking forward to discussion in comments,

Rick Maher

The methodology that I have learned inside and out as an operations consultant implementing continuous improvement projects with my two most recent employers is based on improving 3 pillars.

1. Business Process – the steps that any business, or any business department works through to serve their customer, or accomplish their task
2. Management Tools – the tools that the managers of a business use to plan, execute, and measure the performance of their Business Process
3. Management Behavior & Mindset – the way in which managers of a business use their Management Tools to guide the Business Process

By improving and aligning an organization on consistent utilization of these three pillars, that organization can see drastic improvements to nearly any aspect of their business.

A few ways in which my previous clients have enjoyed the benefits are as follows:

• Reduced Costs (reduction of overtime, reduction of indirect costs, reduction of staff)
• Increased Revenue (higher sales conversion rates, increased price per sale)
• Improved Cash Flow (decreased inventory, decreased accounts receivable)
• Improved Customer Service (decreased cycle time, decreased product returns, improved on-time-delivery)
• Improved Employee Morale (decreased employee turn-over, improved management-staff communication, increased training effectiveness)

The list goes on…

Over the next few days I’ll be posting a more in depth explanation of how I have helped clients improve these three pillars of their business, and how I will do the same with my next employer.

UPDATE: The explanation of the first pillar of continuous operations improvement is now available:

Part 2 – Pillar of Continuous Improvement – Business Process

Part 3 – Pillar of Continuous Improvement – Management Tools

Part 4 – Pillar of Continuous Improvement – Management Behavior and Mindset

Thanks for reading,

Rick Maher

My employer calls the changes that it develops for it’s clients ‘Method Changes.’

As I travel every week for my job, I have come to be quite the critic of all the aspects of the travel industry, and lately I have been whipping up some pretty good method changes to address some of the stupidity out there.

1. Airlines, hotels, and rental car agencies should put more functionality behind their frequent customer cards. For example, when checking in at a hotel, I should be able to swipe my card through a reader and get an instantaneous printout saying what room number I have been given. I then go to the room and use that card again to unlock the room door.
2. Rental Car Agencies should have a “directions request” portion of every rental set up online. So, while I reserve my car I also put in the address of the hotel where I will be staying, then when I get into my car there will be a Google Maps printout with directions to from the rental car agency to my hotel… Sure beats the idea of some clueless local trying to tell you that Idaho is southwest of Utah.
3. Hotels – stop cluttering every room with garbage fliers. Most of them have been thrown on the ground so many times that even if I was interested in the crap they are marketing, it looks so poor that I would be turned off anyhow.

That should get them started…

Oh! One thing that the airlines have listened to – dual jetways (one to the front door, one to the back door hanging over the wing)… I’ve been saying this for years, and now everytime through Denver I enjoy quick boarding / deboarding.  Very well done.