The Lean Entrepreneur

A blog for Entrepreneurs...and especially Lean Entrepreneurs.

I've been thinking about Michael Gerber's book, E-Myth Revisited. I also listened to him speak in St. John's, Newfoundland, last week. His overriding message is "work on the business, not for the business".

In other words, work on developing the business, do not immerse yourself in the day-to-day activities of the business. The bottom line is that every successful business contains as much value in the process as in the people. As the entrepreneur, you create the team, you lead the team, and you guide the team to create the process.

Of course without the right people, it is next to impossible to accomplish this. The staff and the culture play as important a role as any other aspect of the company's personality. In the end, the team owns the process as much as anybody. So we are not robots....but...

The truly successful business is defined by the ability for any staff member to be able to do their job exactly the same way that the previous staff member completed the same job...same as the person on holiday, or the person out sick, or the person on the other shift. Who completes the work and when should be of no consequence or concern to the customer.

So according to Michael Gerber, a successful entrepreneur is one who creates a business and creates a process for the business to run predictably, in a repeatable and reliable fashion. The successful entrepreneur is one who will spend the majority of time developing the system, and less time working within the system.

Well I say that the successful entrepreneur is a Lean Entrepreneur. And I do not necessarily mean that a successful entrepreneur uses Lean techniques throughout their day....I mean that the successful entrepreneur is focused on Lean. A successful entrepreneur creates a business that lives and breathes the 5 principles of Lean.
1. Identify the value.
2. Map the value (process).
3. Create flow (smooth and reliable, predictable, repeatable).
4. Create pull (don't over-produce).
5. Continually improve.

Any great Lean company does excactly what Michael Gerber recommends...and more...but let's keep to what Michael Gerber is talking about.

Let's think about what Mr. Gerber says to focus on. Focus on process. Focus on repeatability, predictability, reliability. Do not work within the system, work on the system. Yes...go to Gemba...but give the "doers" the power to help create, control and maintain the system.

Everything within Genoa Design, my company, is centered around an engineering process. All designers doing the engineering tasks exactly the same way every time. Sit two people side-by-side and what will you see? Identical process.

This is what makes a company valuable from an entrepreneur's perspective. Once you know the staff are doing their jobs every time, exactly the way they said they would do it, then you, as the entrepreneur, have the freedom to focus your energy on other things business.

Like getting more business, like continually improving, like creating more processes, like growing the business, like planning the next party for the staff!

What can separate you from the competition? How about the other 4 Lean principles?

Is there much difference between Michael Gerber's smart entrepreneur (one who get's it) compared to a Lean Entrepreneur? Well... the Lean Enterpreneur has another toolbox full of tools that can be used to continually improve the business. But the start point is the same.

Funny how all these cutting-edge thinkers are all singing the same song....maybe it is because they are right?

If you are an entrepreneur, visit Michael Gerber's website http://www.e-myth.com/

If you are further interested in Lean, start with http://www.lean.org/

Hoshin Kanri vs. Leverage Your Best

I just finished reading "Leverage Your Best, Ditch The Rest" by Scott Blanchard and Madeleine Homan. The book is subtitled "The Coaching Secrets Top Executives Depend On". What I found was a Hoshin Kanri approach to personal coaching. This is not a negative comment in any way...this is a very positive remark. I think the application is perfect for us Lean Champions.

The authors use a system we have been using at Genoa to monitor and move our Lean transformation forward. At Genoa, we use a Lean diagnostic to evaluate our progress within 16 categories of Lean implementation. We use the results to guide us and tell us where we need improvement...in which categories. We use the items on the diagnostic, which we have not completed, as an indication what needs to be done next. We prioritize according to our business goals, and then proceed.

This is exactly what the authors of the book have done for a personal coaching approach. The authors encourage the reader to complete a self-analysis that covers what they call "The Seven Leverage Points". These seven points outline areas of self-discipline and personal management, that if you master two or three of then at least, your life will improve drastically. As you analyze yourself according to these points, you focus in on specific ways to master elements within each area, and understand the benefits that you will realize once you have mastered an area, or gotten it under control.

They use the Hoshin Kanri method of getting life under control. Strategic Planning for your life. Strategic Management for your life. If you are inclined toward Lean Principles in your work-life, you will be inclined toward this approach toward personal life. Get the book and read it. www.leverageyourbest.com.

Lean Engineering on the Shipyard Production Floor

A brief discussion with a shipyard today. Their vision is to have a virtual product model of the vessel available for the fitters, welders and shipwrights on the floor so that they can rotate, zoom in, zoom out, pan and analyze areas of the product model that will help them assemble the vessel. This will be combined with isometric assembly drawings with minimal annotation and dimensions. Makes for clean and low effort production drawings, increases the responsibility on the production floor to look carefully at the product model and see what the intent to build is. The care and guidance is focused on the sequence and Lean process. The waste in this case is the duplication of providing dimensions on coded and computer-cut parts.
The product model can be started at concept, and matured throughout the design spiral.
This is the way of the future as I see it.

Canadian Conference on Modern Shipbuildng

There were approximately 160 attendees at this week's conference in Ottawa. Many presentations on different aspects of the state of Canada's shipbuilding state.
I was asked to present my take on success.
Of course I talked about Lean.
It was a very broad overview on how Genoa Design tackled the transformation from a normally successful technological company, to a more successful company who embraces the principles of Lean Manufacturing to achieve continual improvement on the road to perfection.
I had a captive audience. They had to listen. Some did. Some slept.
I know many thought that my company was small potatoes...and reflected on how easy it is to apply change in a small organization.
So all you small organizations out there.... there is no excuse why you cannot embrace change, seek innovation, and employ a philosophy of continual improvement.
All you big organizations...you should still pay attention. Even though you think the answer lies in size and new equipment, and expanded capability...you have to start by looking at the floor.
We all need to pick ourselves up by the suspenders and start looking at the basics, and why we may not be able to compete on a global level, before we start purchasing equipment and increasing capability. Because all we will end up with is a capability to build bigger things and many more types of things just as ineffectively and just as expensively, as we do presently.
There is no excuse why we should not all start with the basics.
I believe that Health Care organizations in Canada would do well to follow suit. State of the art equipment can be operated with as much inefficiency as older equipment.
When the shipbuilding conference was presented with examples of successful shipyards in Malaysia, and China, who employ low-level technology to build a ship, we should have noted that the quality of vessel rolling down the slipway was comparable to any vessel built in North America. Yes, the labour was less expensive, but the overall quality was comparable. But what about schedule?
Herein lies an opportunity for competitive advantage. Build faster. Less mistakes the first time. Reduced inventory. The launchway pulls the vessel through the panel line, through the paint shop, through pre-outfit, into the erection area, and finally into the water.
Yes...we have some lean lessons to learn.
We had better start paying attention.
Efficiency does not lie in someone else's equipment.

Teamwork

First entry in over a year. Lets try again.
This entry focuses on teamwork. I'm trying to build our management team. Its going to be a long and hard and difficult process....but amazingly simple too. I started by asking everyone in the management team to read Pat Lencioni's "Five Dysfunctions of a Team". Good start to a long process.
Pat bases his theories on a set of five dysfunctions, starting with an absense of trust, which spawns a fear of conflict in the team. Since there is no conflict, and people do not voice their concerns, they cannot commit to any given resolution, and if they are not committed, they are certainly not accountable. Failure to bring accountability to a team leads to inattention to results. So quite simply, it all starts with an absense of trust, and leads right up the ladder to lack of results.
This is where we are going to start. We are going to start by building trust within the team.
We're going to need help.
We're going to need time.
We're going to make mistakes and we're going to fall apart, but hopefully only to come together stronger in the end.
After all, the only true competitive advantage is the team.

Leadership and Project Management - according to Leonard Cohen

Last night I attended the Leonard Cohen concert at Holy Heart auditorium, in St. John's. Small intimate setting for the concert. Leonard was humble, gracious and a true entertainer. This was without question the best concert I have ever seen in my entire life. His words impacted me like no other live performance has. The only other live performance which runs a close second is the performance I have th chance to see each year when I visit Preservation Hall, in New Orleans.

Leonard Cohen's lines I remember most from last night:

Ring the bells that still can ring
Forget your perfect offering
There is a crack in everything
That's how the light gets in

I had to present at the CME Leadership convention this morning. At 5 this morning, I threw out the notes I had prepared and wrote new notes on Leadership according to Leonard Cohen.

According to the Canadian military when I undertook officer training camp in 1987, leadership is "the art of influencing human behaviour so as to accomplish a mission or a task".

The bells you ring are the resources, the team, and the skills you have at your disposal to get the job done. Use them with all your heart. Use them sincerely. Honesty is the key, and when you are honest, you open yourself as necessary to build the relationship.

Your perfect offering is the perfect solution. It is the data you must collect, the research you must complete, the work that must be done before you make your decision. Forget it. Make your decision. Take the risk. The risk of inaction is paralysis.

There is a crack in everything. You will make mistakes. You will find them, and others will find them. Through these cracks, you will build trust and respect, as long as you hold yourself accountable.

That's how the light gets in.

One must open themselves to looking at project management in a new light. Standardize the process where you can, and schedule a self-monitoring process.

VSM the project management process.

Break your meetings into manageable categories, such as daily technical, weekly tactical, and monthly strategic. Keep the subject matter narrow in each meeting.

Stage some schedule freezes. Make the stakeholder take notice and get involved. Make them notice and approve, before the project proceeds any further.

Standardize all work possible that must be scheduled. Free your time to manage what's going wrong, or changes, or risks.

Project management has a crack. It needs to be looked at and analyzed. It needs to be critically shortened and tested for value.

Ring the bells that still can ring
Forget your perfect offering
There is a crack in everything
That's how the light gets in

The Quality Cycle

We’ve been away from the blog for a while but still working away on the lean projects discussed last time. Our designers have been very busy with production design project work and we’ve had some growth in the last months adding new staff and projects.

We’ve added another initiative to our lean work that ties together existing lean projects and complements our human resources plan.

The Quality Cycle Project, which I’m leading, links standard operating procedures, employee expectations, quality checks, error tracking, employee communication, training and development, and performance management.

The current state of quality control is not clearly defined and checking of work before release to clients is performed but not to any particular set of standards. Reliance on the expertise of project managers and senior designers is now the cornerstone of the quality process. It works but project managers needed a way to ensure consistency in the process and streamline it to reduce rework and ensure errors are not missed during our period of business and employee growth.

We met with project managers and decided that the whole cycle needed to be addressed and not just the quality check piece. There needed to be standard operating procedure for design and quality checks, error tracking for improvement purposes, an understanding by employees of what was being checked, and a feedback loop including, training and best practices. All of this is linked then to human performance management, which includes the training and development piece, coaching, and performance improvement.

It’s important to note that all of this is to be achieved with the lean principles in mind. Foremost in these principles is that the view of this process is from the customer’s perspective. The quality cycle objective is to deliver quicker with higher quality. It’s also about improving the performance of the value stream and that can only be achieved with employee involvement and participation in the process. The quality cycle is not about individualizing and tracking employee performance. It is designed to improve overall company performance.

It is about individual accountability though. Managers will review through feedback, coaching, and documented training objectives how employees develop skills to improve performance. If a skill deficiency exists, a training plan is established and employees are accountable to improve the skill. In relation to what is measured, the process is very open and employees will be provided the list of deliverables that will be reviewed during the quality check process.

We are now at the check stage where we will run a trial of the future state starting the end of this month and then review and adapt before implementation company wide.

Go Montreal!!

Ken Hogan
Lean Guy at Genoa