Lean Management vs Convolution Theory

 Lean Management or Convolution Theory?

Convolution Theory

Everybody has heard of Lean Manufacturing but not so many about Convolution Theory. I use the term Convolution Theory in reference to the way most large businesses operate. There is no organization more saddled with Convolution Theory however than the US Government. Convolution theory dictates that in order to show you are good at your job you need to add intelligent complexity to your job and function. One glaring example of Convolution Theory at it’s worst from my own experience is:

Case Study #1:

When I was running a Manufacturing Company in the Los Angeles, CA market one of my customers was Neutrogena which is owned by Johnson & Johnson. We had been doing business with Neutrogena for a few years and then all of a sudden we are told that we need to submit a Nationwide Johnson & Johnson bid proposal for the upcoming year or we would lose all of the business, regardless of how happy our customer was with our products and service. Not wanting to lose a good customer I agreed to go through the bidding process to keep the account. Johnson & Johnson sent me an 87 page questionnaire to fill out and 42 spreadsheets to fill out. If I didn’t fill all of them out then I could lose the business. When I filled in the answers to the questionnaire it was 127 pages long. I filled out most of the spreadsheets (some required confidential information that I was not going to disclose). Think about this. If for every business unit of a company like J&J there are 10 people bidding on the box portion of the business and each submitting over 150 pages of information, that would be over 1500 pages per business unit. How many business units does J&J have? How many other raw materials went into their products? That would amount to millions of pages of nonsense.

I can tell you right now that no purchasing manager in their right mind is going to read all 150 pages of complex information and data, memorize it and compare it to the other 9 companies that are all bidding for the process. The answers were not Yes or No and not a grading scale that could be graded by a computer. Someone (a whole army of people I would imagine) would have to read all of them and try to make a fair assessment about which supplier would be the best based on all of that information. This is CRAZY!!! NOBODY is going to read all of that information for all vendors and be able to make an intelligent decision. It is impossible. If they had a team of 5 people they would all have to understand all data for all suppliers in that product. How many hours did J&J put into this analysis? I am sure enough that they could have fired 20 people instead of engaging in such a wasteful exercise.

So why would they do such a thing. I would say one of two things were to blame (or a combination of the two). Either some egotistical purchasing GURU wanted to show how smart he was by creating a comprehensive analysis process to cover every possible base or they hired a consultant that didn’t know his @$$ from a hole in the ground and used this as a reason to rack up a huge amount of billable hours. If it was the latter, then they are a disgrace to the profession. If it is the former, somebody at the top of the food chain needs to use some common sense and say “NO!” we are not going to do this.

If they had used the Lean Management way of doing things the top 5 or so things that added the most value to J&J would have been included in the bid and the past performance of the current vendors and reference checks on prospective vendors would have been used to make the best decision. That could have been done by one person in just a handful of hours and I would bet to a better conclusion.

At the end of the process we retained the business with Neutrogena which really means that they spent countless hours reviewing thousands of pages of data, charts and written responses and did NOTHING with the information. In hindsight they could have saved a fortune in management costs, and wasted time on both ends and avoided the whole process. How a great company like J&J would get so caught up in the forest as to lose sight of the trees is mind boggling but it is only one example in one department in one company of the millions of companies out there doing the same thing.

Last Friday they were going to shut down the Government due to lack of funds. They did that once before quite a number of years ago. They shut down “All Non-Essential Operations” for a period of time. My big question is… If they were non-essential, then why did they start them back up when the crisis was over? Why? Politics. No politician wants to put people out of work even if they accomplish nothing all day but pushing papers that no one will ever read.

Lean Management

I use the term Lean Management to refer to the use of Lean Manufacturing techniques in an entire organization. The same philosophies that work so well in manufacturing work equally as well in an office, call center, service business, etc.

The theories behind the Lean Management approach have been around for decades before they were ever called lean. The idea behind Lean processes is to remove everything that is not value added. If it doesn’t add value then it must be waste. This challenges the traditional wisdom practiced in most companies today, even including fortune 500 corporations. Leaner flatter organizations respond much quicker and operate much more efficiently than other organizations. The idea is to eliminate everything you can and make it simple.

This can be taken too far as well. When visiting a Lean Managed Company (name withheld) it was apparent that they had some very ineffective employees working there. I asked how they could possibly consider themselves a lean company if they were not efficient. They went on to tell me how they had eliminated most of their documented processes and reduced their staff to the point that people were overworked (Lean at it’s worst) and because they didn’t have documented procedures and job descriptions they couldn’t effectively hold people accountable for their performance.

This company was so Lean they were Fat. When people are starving and malnutritioned their bellys can expand from malnutrition instead of fat. That is what happened to this company. They were so focused on the Lean Process that they lost all sight of the purpose of Lean to begin with.

The Balance of Lean Management vs Convolution Theory

The goal of Lean Management or Lean Manufacturing is to eliminate all forms of waste, from wasted time, effort, people, processes, paperwork, etc. and make it simple and manageable. Many convoluted processes are to protect us from ourselves. Ninety percent of the rules in an operation are to deal with the ten percent that cause ninety percent of the problems. The first thing you should do is get rid of those ten percent right now. Then simplify your processes utilizing the many Lean Manufacturing and Lean Management techniques to improve efficiency, sales, profit, cost and happiness of the entire team.

Put your ego in your pocket and don’t complicate a process that doesn’t need to be complicated. Simple is better.

Randy “Dr. Box” Phares is an award winning globally recognized consultant and Keynote Speaker on Organizational Improvement. His company Dr. Box Consulting helps companies around the world improve their processes, productivity and most of all Profit. If your company needs the cure then call the Doctor. (www.askdrbox.com)

Leadership – Hire the Best! Forget the Rest!

Look for Leadership

In order to build a World Class team you have to have a great leader and a great team. A great employee is worth more than twice that of a good employee. A good employee is a person that comes into work and does their best every day. They take on additional projects with gusto and have great attitudes. A great employee is one that sees solutions that others do not see. A great employee finds new ways to create value and makes the company better every day. These rare people can help improve your company from worst to first. It takes great leadership to build great companies and inspire teams to reach uncommon goals.

Leadership Pays For Itself

When I was a General Manager and wanted to hire a World Class Production Manager to report to me, he wanted more money than I was making. I told my boss he was a great leader and to hire him at that salary and he refused. He said he would not pay a Production Manager that much. He would have saved the company many times that amount if he had made the investment. When you hire some people it is an expense, when you hire others, it is an investment. People that demonstrate great leadership can lead departments to greatness if you lead them well. I had a salesperson working for me that was on a track to make $700,000 one year. The company cut his pay substantially because they “are not going to pay a salesperson that much money”. If their commission structure is fair then this person is bringing much more than $700,000 of value to the company and is well worth the investment. If he/she is not bringing sufficient value, then the commission structure is not designed well and needs to be changed equally for ALL employees and not just one person in order to be fair. Treating a great employee unfairly is a good way to get them to leave. When I am hiring managers, I don’t want to hire a person that came in and did a good job every day. I want a person that made the company better every day, that has real impact to the companies he/she works for. Those people rarely have trouble finding jobs. Don’t get stuck on salary. You need to hire your team based on a Cost-Benefits ratio and if they don’t perform up to expectations, let them go. You need to hire the best people you can afford in the most key positions. If the position is not critical to the performance of your organization then a good employee will be fine.

Improve Your Leadership and Skills

You as a leader or manager need to reanalyze your job starting today. Do you have strong leadership flowing within your veins. Do you seek out problems and turn them into opportunities. Walls in the path of the average become steps in the path of the great. What can you do each day to make your company better? Every company has areas that need improving. Take one as your own personal mission and fix it. Then find another one. It doesn’t matter what your job function is, if you use your creativity you will be able to come up with a way to make your job, department, or company better. As you build these many accomplishments you are also building bullet points on your resume and building your value to both your current company and others out there that need people that do what you do.

You can become great today! I know it may sound impossible but it is not. Greatness starts with deciding not to do less than world class work and keeping it up day after day, year after year. It begins ‘one day’ with a decision to be the best in leadership and to do whatever it takes to become the best. You could learn how to perform minor surgery without being a doctor. How? All you need to do is go buy all of the text books at the local University that they use in the classes to train their Doctors and Surgeons. That is a little simplistic but there is more truth to it than fiction. Here in the information age you can learn to do almost anything if you are willing to put in the hours to learn and prepare for greatness. For many years after the kids go to bed, I spend hours learning and working on my projects so I can become better every day and add more value to the organizations I serve ever day. If you are determined to learn everything you need to learn, in all aspects of what you do then you can become a Great Employee instead of a good one. The difference is subtle but the great ones make much more money in the long run than the good ones. You may need to take on much more responsibility without getting paid for it. That is OK. You are adding value. As you continue to add more and more value through your improvements,either your current company will start promoting and paying you more, or another company will be willing to.

We only have one life and we should make the most of it that we can. Why settle for ordinary when extraordinary is possible. Make a decision today to take your area, department or company to the next level using leadership. Happy leading.

Randy “Dr. Box” Phares is President of Dr. Box Consulting (http://www.askdrbox.com)  and Packaging Recruiters (http://www.packagingrecruiters.com). He is a leading keynote speaker and consultant in Organizational Improvement as well as in Packaging and winner of the Best Achievement of Organizational Improvement in Manufacturing Award, given at the Global Six-Sigma and Business Improvement Awards for 2009.  He improved ROI at his plants in 2009 by over 90% in one year, while improving many key indicators of performance and safety. If your company needs performance or leadership improvement, you need to “Call the Doctor”.