Archive for July 10th, 2011

It’s the mindset, then the measurement!

Mark Graban @leanblog  recently tweeted several articles about the Atlanta School district’s recent cheating scandal.  Here is the latest reference article

The report details a “culture of fear, intimidation and retaliation” that pushed teachers to cross ethical lines and cover up their involvement when confronted.

This situation clearly demonstrates that what is valued by an organization drives what gets measured.   However, values when not anchored to guiding principles can create systems that drive good people to exhibit inappropriate, even illegal behaviors.  Apparently, the educators in Atlanta and in other school districts have been driven by a “results at any cost” culture that led them to forget that their purpose is to educate the children, not just pass them.  Misaligned measurement, recognition and compensation systems drive the wrong behaviors in employees.

The Shingo Prize transformation model illustrates this relationship between Guiding Principles, Values, Systems, Tools and Results.  

Nearly 20 years ago, I was a new cost analyst at Ford’s Cleveland Engine Plant 2.  I was completing my MBA and writing my research paper on the implementation of a team based approach to manufacturing at Ford using lean manufacturing. 

Our plant manager, Gifford Brown, told me that the biggest barriers to our success would be our labor and overhead reporting system and our recognition and compensation systems.  Labor and Overhead budgets drove managers to produce at any cost and put the emphasis on building inventory and accepting poor quality – the biggest forms of wastes in a lean world.  Our compensation systems were built to reward managers for meeting their budgets, so when they were asked to support a team-based system, they were wary of changing the behaviors that had resulted in annual raises in the past.  We couldn’t expect behaviors to change, until we changed our systems.

Our finance team benchmarked other Ford plants that had met their budgets over the past 5 years, including an annual task, and found that although they had met their budgets; their actual costs had continued to rise year over year.  They were good at generating authorization, not so good at reducing costs.

We formed a cross-functional team of managers from production, quality, finance, maintenance, and engineering to develop a new measurement system that took the emphasis off of labor and overhead budget results and placed the emphasis on input and process measures of Safety, Quality, Delivery, Cost, and Morale.  We were still required to report our plant’s labor and overhead performance to Dearborn; however, we took the emphasis off of departmental budgets.

Gifford invited Carl Thor, a well-known author and authority on measurements to come to our plant to review our work and offer his insights.  During our discussion, our Controller seemed uncomfortable with the discussion.  He knew labor and overhead budgets-he “controlled” them, he wasn’t as sure that tracking planned maintenance vs. crisis maintenance, or first-time through, or the most difficult to understand – Employee morale would lead to better financial results.  I remember him asking, “but how will we measure it?”  It was then that I first understood that “It’s the mindset, then the measurement.”  If we could get people focused on the right things, we could find a way to measure it. 

One of my favorite questions to ask employees is “were you successful yesterday?”, then following up with “How do you know?” Creating the right vision of success must come before you attempt to measure it, however, once success is defined and understood by all, you must be able to measure it.

CEP 2 developed our new measurement system.  We successfully implemented a team-based structure, created a behavior-based recognition system and the plant earned the Shingo Prize.  

When teachers start cheating, the system is broke.  There needs to be a re-alignment of our expectations of our public schools and teachers, how we measure success and a re-thinking of how teachers are recognized and rewarded for their work.  It will not be easy, but it is required if a measure of our success as a country is the education of our children!

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Values Stream Alignment

Welcome to Values Stream Alignment.  My name is Tim Pettry.  I work at the Cleveland Clinic, implementing and facilitating continuous improvement activities within the Neurological Institute.  For the past 20 years, I’ve been a student and teacher of Lean and have finally decided to take the plunge, and start sharing my thoughts on lean and organizational development. 

My blog’s name, Values Stream Alignment comes from an observation I had while working at Ford.  Lean practitioners use value stream mapping to identify where products and information stop flowing, thus exposing waste.  I recognized that where an organization’s VALUES stop flowing, there is greater waste.  The waste of human potential.  Thus the need for mapping the flow of Values in an organization to see where they are mis-aligned and implement organizational development mechanisms to align the thoughts and actions of everyone in the organization.  This application of a basic lean principle of flow to the world of organizational development has been a focus of mine since 1997 that I have continued to develop and refine.

 I have been a Shingo Prize examiner since 1996 when I helped lead Ford‘s Cleveland Engine Plant 2’s successful challenge for the Shingo Prize.   For the past 5 years, I’ve been involved with the SME / AME / Shingo Prize / ASQ Lean Certification program.  First as a writer of exam questions, then as an appointed member of the Oversight and Appeals Committee,  representing the Shingo Prize organization.  In 2010, I served as the elected Chairman of this committee. 

In late 2009, I became involved with the Healthcare Value Network as a member of the Assessment development team, where we are using the Shingo Prize model to help healthcare organizations focus their continuous improvement activities.  This alignment of my participation in outside organizations and their objectives serves as my model for Values Stream Alignment.

My posts will draw on my struggles and successes with aligning people and organizations around the principles of lean as outlined in the Shingo Model.

I’m looking forward to the exchange of ideas!

Blog contents copyright © 2011 Values Stream Alignment.  The views expressed here are solely my own personal views and not those of my past or present employers.

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