My wife recently went to Michael’s Arts and Crafts store to buy some art supplies. She a wonderful artist and is just now getting back into art after a long hiatus. There she bought some art supplies and other arts and crafts items. Knowing that I enjoy survey design, when my wife returned home, she gave me her receipt and asked me to complete the survey. To my surprise, 3 of the 10 questions had to do with the condition of the Bathroom and Restroom.

At about question 6, I was asked: Did you use the restroom?

Even though I didn’t even visit the Michaels store, I was curious to see what the next questions would be, so I decided to select Yes to the “Did you use the restroom?” question. That question was followed by the following question: Please rate the cleanliness of the restroom on a scale of 1 – 5, where 1 is the lowest and 5 is the highest.

I had no idea, so I selected an average score of “3″. The next question was the following: Using a scale from 1 to 5 where “1″ means “not at all likely” and “5″ means “extremely likely”, how likely are you to recommend this store to a family member or friend?

Most of us would recognize this question as a Net Promoter Score question, or NPS.

What is interesting is that this Net Promoter Score question came immediately after the bathroom and restroom questions. Is that a coincidence?

I don’t believe so. We know that bathroom cleanliness is a sign of the overall health of a company. So, it makes sense that the “recommend to a friend” questions would come after the bathroom questions.

What else is curious is that more and more companies are recognizing this fact. It would be interesting to see how their behavior changes as they recognize this more.

Keep Restroom Clean and Other Signs of Company Health is a post from: Lean Six Sigma Consulting

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As the world mourns the passing of Steve Jobs, I’m reminded of my brief experience with him.

In 2007, one of the posts I had written on the iPhone Supply Chain became quite popular and remains one of my most visited articles – 4 years later. Well, out of impulse, my brother wrote Steve Jobs the following:

From Harry
To sjobs@apple.com
Mon, Mar 16, 2009 at 8:59 PM

Dear Steve,

I hope this finds you in good health. Here is my brother’s (Pete Abilla) article about the iPhone on his blog. Interesting reading.

My young brother Pete is a University of Chicago PhD (write that dissertation already) Graduate in Operations Research. Check him out.

Sincerely,

Harry

While my brother’s intentions were good and sincere, I was a bit embarrased. I’m not one to seek out notoriety or attention. I thanked my brother and didn’t think much of it after that. After all, Steve Jobs is incredibly popular and probably receives thousands of emails daily.

Then, my brother received an actual response from Apple:

Harry,

Thanks for sending the iPhone Supply Chain article to the attention of Steve Jobs and mentioning your brother Pete.

I will reach out to him.

Regards,

Gary Rockow

Apple, Inc.

Shortly after Apple wrote my brother, they wrote me, asking for my resume:

From: Gary Rockow
Date: 3/18/2009
Subject: Apple, Inc.

Pete,

Your brother Harry sent an e-mail to Steve Jobs regarding an iPhone Supply Chain Article you wrote in your blog.

Can you send me a copy of your resume? We’re very much looking forward to speaking with supply chain thought leaders like you.

Regards.

Gary Rockow
Apple, Inc.

Within the span of 2 days, my brother wrote Steve Jobs, then Steve Jobs probably forwarded the email to Gary Rockow, and then I was contacted by Gary. I’d think people at the level of Steve Jobs would have just ignored and deleted my brother’s email, but not Steve. He was very human and took the time to probably read my article and asked Gary Rockow to contact me after what he read.

Steve Jobs and Quality

Steve is known for his relentless pursuit of human centered design. What is less known about him is his deep respect and interest in Quality. In fact, he had a deep respect for Joseph Juran and his approach toward quality.

In a television tribute to Joseph Juran entitled “AN IMMIGRANT’S GIFT The Life of Quality Pioneer, Joseph M. Juran“, several well known business leaders were interviewed and asked to share their thoughts on Joseph Juran. Among those interviewed in the article is Steve Jobs. This is what he said:

STEVE JOBS: Joe Juran found his great subject early in life, and he pursued it over decades. And he’s made a deep, deep, deep contribution that will last well beyond his physical years.

And later, he said:

STEVE JOBS: There is clearly something in his heart that’s propelling him. His pocketbook’s not what’s propelling him. His heart is propelling him.

Steve, You Will Be Missed

Thanks for all the inspiration. You’ll be missed Steve.

Remembering Steve Jobs is a post from: Lean Six Sigma Consulting

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It is September 11, 2011. It’s been 10 years since the attack on the World Trade Center and America. Nearly 3000 were killed on 9/11. Here are other September 11 statistics by the numbers:

• 8:46 a.m. and 9:02 a.m.
• Time the burning towers stood: 56 minutes and 102 minutes.
• Time they took to fall: 12 seconds.
• Total number killed in attacks (official figure as of 9/5/02): 2,819
• Number of firefighters and paramedics killed: 343
• Number of NYPD officers: 23
• Number of Port Authority police officers: 37
• Number of WTC companies that lost people: 60
• Number of employees who died in Tower One: 1,402
• Number of employees who died in Tower Two: 614
• Number of employees lost at Cantor Fitzgerald: 658
• Number of U.S. troops killed in Operation Enduring Freedom: 22
• Number of nations whose citizens were killed in attacks: 115
• Ratio of men to women who died: 3:1
• Age of the greatest number who died: between 35 and 39
• Bodies found “intact”: 289
• Body parts found: 19,858
• Number of families who got no remains: 1,717
• Estimated units of blood donated to the New York Blood Center:36,000
• Total units of donated blood actually used: 258
• Number of people who lost a spouse or partner in the attacks:1,609
• Estimated number of children who lost a parent: 3,051
• Percentage of Americans who knew someone hurt or killed in the attacks: 20
• FDNY retirements, January–July 2001: 274
• FDNY retirements, January–July 2002: 661
• Number of firefighters on leave for respiratory problems by January 2002: 300
• Number of funerals attended by Rudy Giuliani in 2001: 200
• Number of FDNY vehicles destroyed: 98
• Tons of debris removed from site: 1,506,124
• Days fires continued to burn after the attack: 99
• Jobs lost in New York owing to the attacks: 146,100
• Days the New York Stock Exchange was closed: 6
• Point drop in the Dow Jones industrial average when the NYSE reopened: 684.81
• Days after 9/11 that the U.S. began bombing Afghanistan: 26
• Total number of hate crimes reported to the Council on American-Islamic Relations nationwide since 9/11: 1,714
• Economic loss to New York in month following the attacks: $105 billion
• Estimated cost of cleanup: $600 million
• Total FEMA money spent on the emergency: $970 million
• Estimated amount donated to 9/11 charities: $1.4 billion
• Estimated amount of insurance paid worldwide related to 9/11:$40.2 billion
• Estimated amount of money needed to overhaul lower-Manhattan subways: $7.5 billion
• Amount of money recently granted by U.S. government to overhaul lower-Manhattan subways: $4.55 billion
• Estimated amount of money raised for funds dedicated to NYPD and FDNY families: $500 million
• Percentage of total charity money raised going to FDNY and NYPD families: 25
• Average benefit already received by each FDNY and NYPD widow:$1 million
• Percentage increase in law-school applications from 2001 to 2002: 17.9
• Percentage increase in Peace Corps applications from 2001 to 2002: 40
• Percentage increase in CIA applications from 2001 to 2002: 50
• Number of songs Clear Channel Radio considered “inappropriate” to play after 9/11: 150
• Number of mentions of 9/11 at the Oscars: 26
• Apartments in lower Manhattan eligible for asbestos cleanup:30,000
• Number of apartments whose residents have requested cleanup and testing: 4,110
• Number of Americans who changed their 2001 holiday-travel plans from plane to train or car: 1.4 million
• Estimated number of New Yorkers suffering from post-traumatic-stress disorder as a result of 9/11: 422,000

Here is a link to the official 9/11 Commission Report.

Remember.

September 11: Remember 9/11 Today is a post from: Lean Six Sigma Consulting

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Organizations, generally speaking, are strange in a sense that they can be schizophrenic – not really knowing what it wants or who it wants to be. Maybe schizophrenic isn’t the right characterization, but there’s something strange there. One example of this is the phenomena of Invented Here or Proudly Found Elsewhere.

This topic matters because Underutilized People is a form of waste in the Toyota Production System and is the direct result of the subject matter below.

Invented Here and Proudly Found Elsewhere

Have you ever been in a situation where a good idea or innovation was generated by someone within the company and was summarily dismissed for no reason? But, when the same idea is presented by someone outside the company, executive management are amazed and want to adopt it right away?

That’s the situation that we call Proudly Found Elsewhere, denoting the fact that ideas and innovation outside the company are more worthwhile than expertise and ideas from within the company.

Of course Wikipedia has a definitions for Invented Here:

. . .that occurs when management of an organization is uncomfortable with innovation or development conducted in-house. Reasons why this might be the case are varied, and range from a lack of confidence in the staff within the organisation to a desire to have a third party to blame in the event that a project fails. One effect of this version of “Invented Here” is that detailed knowledge of the innovation or development never passes to permanent employees, resulting in recurring additional expenditure and a lack of goodwill and bankable experience by employees.
One quotation that sums up the philosophy of Invented Here is “Gee, it can’t be worth much if someone local thought of it first.

Here’s a few situations that describe the Invented Here phenomena:

1. You’ve been trying to practice lean at your company for a while, with some success. Then, upper management catches a hold of the promise of lean and hires outside consultants. You are left to take a backseat and your ideas are seen as less than the ideas that come from the consultants.
2. You are the resident expert at some xyz topic. But, your out of luck because you work for a company that know you’re an expert at xyz, but they’d rather hire someone outside the company to help them with xyz.

This phenomena is especially damaging if the ideas and thoughts that are dismissed are ideas and thoughts from people that rank lower in the company.

There is a similar but opposite corporate and social phenomena call Not Invented Here.

Not Invented Here

Similar to Invented Here, the opposite is also true: a situation where outside innovation or ideas are not as worthy as those developed within a company. Here are a few examples:

• You network with other lean practitioners and supply chain executives and tell each other about the internal lean programs at your respective companies. Instead of listening with the goal to learn, your chances for learning are cut-off at the start because you’ve made up your mind that your way is better than others’.

Conclusion

At your company, how do these two social and organizational phenomena rear it’s ugly head?

A Bias: Invented Here and Proudly Found Elsewhere is a post from: Lean Six Sigma Consulting

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In business and in life, resistance to change is expected and is quite common. But, resistance is an especially germane topic for those in the process improvement space or are aiming to change for the better our organizations. Resistance is a fact of life. But, resistance is also a pattern that is quite predictable. From my experience, I’ve been able to catalog patterns of resistance and also potential root causes and their countermeasures. Below is a table of common forms of resistance to change that can either make or break your change management efforts.

One word of caution: as in most things, it’s not so much about persuading the “head” or intellectually convincing someone. It’s more about persuading the heart and emotions. Data is interesting and can be helpful, but the heart and emotion is what truly converts people and makes them champions for your cause. Remember this and behave accordingly.

Resistance to Change is a post from: Lean Six Sigma Consulting

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A organization that has adopted lean will often reorganize their conventional silo departments into value streams. For example, instead of “Accounting”, “Marketing”, “Operations” – which are vertical, a value stream approach is horizontal, which cuts across several verticals. An example is to take a horizontal by product family, which usually cuts across several verticals. The challenge with the value stream approach is that it requires an owner. Typically, this is called a value stream manager or sometimes it is called a process owner.

A process owner is the person who has the authority to determine how a process operates, and the responsibility to make sure it continues to meet customer and business needs today and into the future. This is a role that no company can afford to overlook if it wants to be world class.

Process Owner Responsibilities

A good process owner knows his or her process like an auto mechanic knows cars. A process owner:

1. Knows what is critical about the process. The process owner must understand what about the output is important to customers of the process and to the business, and must have a thorough understanding of how his or her process fits into the overall scheme of the business:

• What processes feed into this process?
• What processes rely on output from this process?
• What is strategically important about this process? Does it contribute to or support a particular product or service? Does it affect overall operational effectiveness?

2. Monitors process performance with data. This must include both input/process metrics (because they are early predictors of performance) and output measures. In many cases, the process owner is monitoring data compiled by process operators and summarized into a dashboard, an example of which is shown below:

3. Makes sure the process is documented, and that the documentation is used and updated regularly. Some organizations have run into trouble by allowing too much variation in how a process 1s performed – each employee having their own particular way of doing business. It is up to the process owner to champion an effort to identify the best-known process methods, particularly what parts of the process must be standardized so that output quality and service to customers do not suffer. Those best-known methods must be documented (with flowcharts and other visual displays) and referenced constantly. (Work groups that do not refer to process documentation usually show more erratic performance than those that do.) If the process changes for good reason, the documentation must change as well.

4. Makes sure a process management (or control) plan is in place. (Figure 2)

• Everyone in the work area knows how the process should operate.
• Everyone knows how to detect signs of trouble and what to do if a problem appears (often called a response plan).
• Process data is charted and posted in the work area, visible to all.

5. Holds regular reviews. There are two levels of review that the process owner must lead:

A process review – Is the process performing as required by customers and the business? Are the input and output metrics “in control” and “capable”? If not, what are the biggest issues? Who should be assigned to a project team to attack those problems? A process management review – Is the method of reviewing, monitoring, and managing the process working? If not, what needs to be improved?

6. Makes sure that any improvements identified through projects are incorporated and maintained in the process.

7. Provides linkage to customers, suppliers and other processes. A process owner is the critical link between a process and the rest of the world – both inside and outside the company. More so than any other individual working on the process, the process owner needs to maintain connections in all directions – with supplier processes, with customer processes, with processes above and below in the corporate hierarchy.

8. Makes sure that process operators have the training and resources to do their jobs well. A good process owner is in many ways a servant to the process operators. It is his or her job to figure out what the operators need in order to do their jobs well, and to keep getting better. Those needs can include appropriate training, materials and information.

What is your experience with Process Owners? Does the role of Value Stream Manager at your organization have the same responsibilities?

Process Owner Roles and Responsibilities is a post from: Lean Six Sigma Consulting

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Some of you are familiar with Clayton Christensen. He’s a Harvard Business School professor and is well known for his research on disruptive innovation. He recently published a new book called The Innovator’s DNA and in that book he quotes me.

The book argues that there are five discovery skills that seperates ordinary managers from exceptional innovative leaders. Those five skills are:

• Associating—drawing connections between questions, problems, or ideas from unrelated fields
• Questioning—posing queries that challenge common wisdom
• Observing—scrutinizing the behavior of customers, suppliers, and competitors to identify new ways of doing things
• Networking—meeting people with different ideas and perspectives
• Experimenting—constructing interactive experiences and provoking unorthodox responses to see what insights emerge

Go check out the book – I hear it’s good.

Here’s a little information about his new book:

Are you the next Steve Jobs?

You could be as innovative and impactful—if you can change your behaviors to improve your creative impact.

In The Innovator’s DNA, authors Jeffrey Dyer, Hal Gregersen, and bestselling author Clayton Christensen (The Innovator’s Dilemma, The Innovator’s Solution) build on what we know about disruptive innovation to show how individuals can develop the skills necessary to move progressively from idea to impact.

By identifying behaviors of the world’s best innovators—from leaders at Amazon and Apple to those at Google, Skype, and Virgin Group—the authors outline five discovery skills that distinguish innovative entrepreneurs and executives from ordinary managers: Associating, Questioning, Observing, Networking, and Experimenting.

Once you master these competencies (the authors provide a self assessment for rating your own innovator’s DNA), the authors explain how you can generate ideas, collaborate with colleagues to implement them, and build innovation skills throughout your organization to sharpen its competitive edge. That innovation advantage can translate into a premium in your company’s stock price—an innovation premium—which is possible only by building the code for innovation right into your organization’s people, processes, and guiding philosophies.

Practical and provocative, The Innovator’s DNA is an essential resource for individuals and teams who want to strengthen their innovative prowess.

Here is some information about Clayton Christensen:

Clayton M. Christensen is the architect of and the world’s foremost authority on disruptive innovation, a framework which describes the process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors. Consistently acknowledged in rankings and surveys as one of the world’s leading thinkers on innovation, Christensen is widely sought after as a speaker, advisor and board member. His research has been applied to national economies, start-up and Fortune 50 companies, as well as to early and late stage investing.

His seminal book The Innovator’s Dilemma (1997), which first outlined his disruptive innovation frameworks, received the Global Business Book Award for the Best Business Book of the Year in 1997, was a New York Times bestseller, has been translated into over 10 languages, and is sold in over 25 countries. He is also a four-time recipient of the McKinsey Award for the Harvard Business Reviews’s best article and received a Lifetime Achievement Award from the Tribeca Film Festival in 2010.

Christensen has recently focused his innovation lens on two of our most vexing social issues, education and health care. Disrupting Class which looks at the root causes of why schools struggle and offers solutions was named one of the “10 Best Innovation and Design Books in 2008” by BusinessWeek and the best Human Capital book of the year in the Strategy + Business Best Books of 2008. The Innovator’s Prescription (2009) examines how to fix the problems facing healthcare. So as to further examine and apply his frameworks to the social sector, Christensen founded Innosight Institute, a non-profit think tank, in 2008.

An advisor to numerous countries and companies, including the government of Singapore, he is currently a board member at India’s Tata Consultancy Services (NYSE: TCS), Franklin Covey (NYSE: FC), W.R. Hambrecht, and Vanu. Christensen also applies his frameworks via management consultancy Innosight which he co-founded in 2000, and Rose Park Advisors, an investment firm he founded in 2007.

Christensen was born in Salt Lake City, Utah in 1952. He graduated with highest honors in economics from Brigham Young University in 1975. Later, he received an M.Phil. in applied econometrics and the economics of less-developed countries from Oxford University in 1977, where he studied as a Rhodes Scholar. He received an MBA with High Distinction from the Harvard Business School in 1979, graduating as a George F. Baker Scholar. In 1982-1983 he was a White House fellow, serving as an assistant to U.S. Transportation Secretaries Drew Lewis and Elizabeth Dole. In 1992, he was awarded a DBA from the Harvard Business School, receiving the Best Dissertation Award from the Institute of Management Sciences for his doctoral thesis on technology development in the disk drive industry. He is currently the Robert and Jane Cizik Professor of Business Administration at the Harvard Business School.

Professor Christensen is committed to both community and church. In addition to his stint as a White House Fellow, he was an elected member of the Belmont Town Council for 8 years, and has served the Boy Scouts of America for 25 years as a scoutmaster, cub master, den leader and troop and pack committee chairman. He also worked as a missionary for the Church of Jesus Christ of Latter-day Saints in the Republic of Korea from 1971 to 1973, speaks fluent Korean, and is currently a leader in his church. He and his wife Christine live in Belmont, MA. They are the parents of five children, and have three grandchildren.

I’m In Clayton Christensen’s New Book: The Innovator’s DNA is a post from: Lean Six Sigma Consulting

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In a recent Fortune Magazine article, Geoff Colvin shares his recent experience with Zhang Ruimin, a Chinese executive, CEO of Qingdao Refrigerator Factory and Haier Group. Zhang Ruimin leads an enterprise company with over $20 Billion in revenue. Perhaps it’s the biggest company we’ve never heard.

When Zhang Ruimin first became CEO, he demonstrated the principle of Disclosing all Mistakes as Taiichi Ohno used to say.

When he first became CEO in 1984, he quickly realized that Qingdao was producing defective refrigerators. So,

he had 76 defective [refrigerators] pulled from the rest, gave the staff sledghammers, and ordered them to destroy every one. The message: poor quality is no longer tolerated.

This dramatic move is admirable. To further support this example, he put in place a program by which errors made by an employee were published and that employee would have to explain to his team what the error was and why it happened.

Another change Ruimin made was customer feedback. After noticing that sales of his company’s were poor in Sichuan province, he discovered the reason was that villagers were using the machines to wash sweet potatoes, clogging the drains in the washers. In response, Zhang had his company redesign the product to wash produce in addition to clothing.

Shine a light on defects. Listen to your customers. Those are wise words to run a company by.

Shine a Light on Defects is a post from: Lean Six Sigma Consulting

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We know that Lean is both a systematic method for improving an organization, but it’s also a wordview – the lens by which we see and understand the world. I want to highlight a phrase that describes one aspect of the Lean worldview quite well: Zen Wa Isoge.

Zen Wa Isoge (善は急げ). In other words, if It’s Worth Doing, It’s Worth Doing Promptly.

Even more, the phrase in kanji (read zen) means “good, goodness, right, virtue” and (read isoge) which is the imperative form of the verb (read isogu) meaning “to hurry, to rush, to hasten, to make something happen sooner”.

Yes, Hurry and do the good thing.

This is not unlike Hoshin Kanri, where the organization deliberates carefully, but then executes very quickly.

Additionally, according to Japanese linguist, Zen Wa Isoge comes from the old saying, “Zen Wa Isoge, Aku Wa Nobeyo” which means, “Hurry and do the good, put off doing the bad.”

The second part of this saying is usually omitted nowadays, and the first part is used to mean, “Hurry up and do what you have to do.” “Strike while the iron is hot” is another way to think of the phrase.

From the perspective of Lean, we have a bias for action, learning, and experimentation. For us, Zen Wa Isoge describes our bias for doing.

If It is Good, Do it Quickly is a post from: Lean Six Sigma Consulting

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Continuing our series on the leaders that have made a significant impact to the quality movement, lean manufacturing, and six sigma, we’ve featured Sakichi Toyoda, Walter Shewhart, and Armand Feigenbaum, and today we feature Genichi Taguchi.

Perhaps Taguchi is best known for his influence on modern day website optimization, better known as A/B Testing or Multivariate Testing, which we’ll discuss shortly. Overall, his application of statistics for business specific problems is his greatest contribution with broad influence.

Genichi Taguchi History

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Genichi Taguchi stressed quality right from the design stage and not just as an inspection. In short, he believed quality was related to process design. Dr Genichi Taguchi was born in 1924 in Japan. Initially, he served the Astronomical Department of the Navigation Institute of the Imperial Japanese Navy during the Second World War. Later, he joined the Ministry of Public Health and Welfare and the Institute of Statistical Mathematics. It was here that he worked with the eminent Japanese statistician Matosaburo Masuyama and gained vital insights into statistical analysis.

His expertise in statistics garnered him an opportunity to work with reputed pharmaceutical company Morinaga Seika and its sister company, Morinaga Pharmaceuticals. Taguchi then joined the Nippon Telegraph Electrical Communications Laboratory. Here, he was entrusted with the task of enhancing the productivity of the Research and Development (R & D) department. To achieve this objective, Taguchi trained the engineers to improve productivity through effective and simple techniques. Initially, Taguchi visited many Japanese companies to study different operating procedures. He would later educate the engineers on what he had learned. Eventually, he developed his own techniques, and his visits to companies helped him propagate his techniques. He stayed at the Nippon Telegraph Electrical Communications Laboratory for over 12 years

Soon, Japanese companies like Toyota adopted Taguchi’s techniques because they foresaw its great advantages. In 1951, he published a book that introduced the concept of orthogonal arrays. In his quest for a methodology for high quality, he met two legendary statisticians at the Indian Statistical Institute – R. A. Fisher and Walter A. Shewhart. After his interactions with them, he published a book on Design of Experiments in 1957.

Genichi Taguchi Contributions

Taguchi’s contributions have made its way into almost every facet of business. Unfortunately, few know about them while actively practicing what he either invented or had a large influence on. Here are a few of Taguchi’s contributions.

Taguchi Quality Loss Function

In 1970, Taguchi devised a new concept in quality called the Quality Loss Function. He published two more books this year, along with the third edition of Design of Experiments.

Unlike the western definition of quality, Taguchi defined quality loss, as “loss imparted by the product to society from the time the product is shipped.” The loss factor encompasses two losses:

1. Loss at the company end due to financial set-up, time, man-hours, productivity, rework, scrap, warranty cost, equipment downtime cost and loss of customer trust.
2. Loss at the customer end due to substandard product delivery, financial setbacks, distrust of customers, shared value deprecation, wasted time and project delays.

Taguchi Loss Function was developed on the premise that the greater the variation of a value from the standard, the greater the costs incurred. Taguchi Loss Function suggests that organizations must settle for options that cost the least. Organizations should thus make decisions after conducting a cost analysis and understanding all implications. It also
suggests that the lowest cost decision is not always the best one for the organization. This decision depends on organizational priorities

In its most basic form, Taguchi Loss Functions shows us the cost to the firm when we deviate from the standard. Below is an image of the Taguchi Loss Function:

Take a simple example of a tire manufacturer. This firm produces tires and a key component of high quality tires is the thickness of the rubber, for it induces safety and comfort and stability. The firm has statistically arrived at a “standard” tire thickness.

To apply the Taguchi Loss Function, suppose the firm produces tires whose thickness are less than standard or tires whose thickness is more than standard. In either case, there is a cost as indicated by the function above.

Design of Experiments (DOE)

Taguchi is also known for his contribution to multivariate testing, otherwise known as Design of Experiments or DOE. In a Design of Experiment, the central question is this:

How many different conditions do you need to experience to be able to reliably ascertain whether “A” is better than “B” or not?

As such, a Design of Experiment is centered around Factors, Responses, and Runs. We are interested in how a Factor affects a Response and we do in several Levels or Runs.

Here are 2 examples where Design of Experiments can be applied:

Taguchi Experiment: Microwave Popcorn

What is the best method to prepare microwave popcorn? The Response you want is this: the best outcome is the bag with the most popped corn kernels.

Below are the Factors:

• How long to cook the popcorn (between 3 and 5 minutes)
• What level of power to use on the microwave oven (between settings 5 and 10)
• Which brand of popcorn to use (Top Secret or Orville Redenbacher)

A/B Testing (Multivariate Testing)

Another application of Taguchi’s Design of Experiments is for testing elements of a website landing page that lead to the desired outcome, whether the outcome or conversion is defined as a sale, email sign-up, click through to the next page, etc.

In general, the steps to test the elements of a landing page are similar to the steps above:

1. Select elements on the landing page that we believe will influence sign-up
2. Create alternatives for each element
3. Create test “recipes” that combine these elements according to the Taguchi Methodology
4. Set up and run a concurrent multi variable test.

Here’s an example experiment:

• Headline Graphic on left, right, top of page Font selections in Body text, and varying sizes Color schemes in the footer and header Validation logos like Truste, BBB, Visa, Mastercard, American Express, Discover Card, etc.

The elements on a landing page are Factors. The number of times and variations you run a Taguchi Test are the Runs. And, the outcome or Response is Conversion.

Conclusion

We owe much to Genichi Taguchi. Without knowing it, much of what we do today in terms of our statistical approach to “what is better a or b or c or d” can be credited to Genichi Taguchi.

Genichi Taguchi is a post from: Lean Six Sigma Consulting

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Today, we’ll hear from Ronald Rudzin, CEO of Saatva Mattress, an efficient manufacturer of Luxury Mattresses; their current business model is disrupting the luxury mattress market, and Lean Manufacturing principles are at the heart of their innovation.

What is Saatva Luxury Mattress?

Saatva is a manufacturer of luxury mattresses and sell direct to the customer online. Of the luxury mattress brands, Saatva is the disruptor in the market, changing a very traditional business and innovating on behalf of the customer.

Saatva manufactures Luxury Beds, Luxury Mattress, and Chiropractic Mattress.

In short,

Saatva takes the confusion and expense out of mattress shopping. By combining all the best features found in luxury bedding and eliminating store front overhead, we are able to sell our mattresses at a fraction of the cost.

In practice, this means that Saatva employs efficient manufacturing operations, managing just a few SKUs (Stock Keeping Units), and effectively selling Luxury Mattresses direct to the customer. In contrast, between the manufacturer and the customer, most Mattress manufacturers have several layers in between.

Saatva has shortened the path between the manufacturer to the customer, a principle aligned with Lean Manufacturing principles.

1. Please tell us a little about yourself and what you’re up to.

My father taught me never to boast, so I’m always a bit uncomfortable talking about myself. In short, I have been an investor and I have helped manage businesses in the home furnishings industry. For the last 10 years or so I have managed my own money while looking for an Internet driven business.

As I studied what the changing environment as it relates to shopping habits, I knew this was the right approach. The luxury mattress market was perfect. I knew I could cut out all the middle players that drive prices up at retail stores and send my customers a product that exceeds expectation on the day of delivery. Remember, online businesses have to offer stronger return policies. This means we have to give better service and an incredible value.

2. What is Saatva Mattress and the unique value you provide the customer?

Our unique organization was built on the basic principle that a person can make an intelligent purchasing decision without high pressure or a phony sale. As you know we have eliminated all the wasteful costs “brick and mortar” retailers are burdened with, such as commercial rent, utility bills, excessive commission and store maintenance so that we can bring our customers the highest quality mattress at the lowest possible price. The bulk of our money goes into our extraordinary product!

There is no way a brick and mortar retailer can operate that efficiently. Their customers are undoubtedly paying into their excessive monthly expenses that have nothing to do with the product the customer is purchasing.

Additionally, we would never presume to know what is important to any one individual, but by purchasing with Saatva a customer is helping maintain a very low carbon footprint through our green initiative in an industry that normally lends no hand to that cause.

3. From a supply chain perspective, what does the luxury mattress supply chain look like?

From a supply chain standpoint we are clearly as efficient as you can be in this industry. First, our line of mattresses are built with the finest materials used in luxury bedding today. Second, our philosophy from the start was to eliminate the confusion consumers feel when they shop at a brick and mortar retailer. We’ve simplified the process by not having an over abundance of sku’s, which affords us a tremendous amount of efficiencies on our manufacturing side. This makes keeping our stock materials on hand extremely cost efficient and easy to manage.

4. Why is your Supply Chain model a competitive advantage, versus traditional luxury mattress companies in the market?

We are in stock most of the time. If not, we still deliver within 8 business days. The point of streamlining is that because we have a limited amount of sku’s it safe for continued replenishment of stock because we know that product will sell on a consistent basis [also known as Takt Time in Lean Manufacturing - we know the customer demand and pace our operations to that drum beat]. Everything we stock we sell. If a company tries to keep 200 sku’s in stock, something isn’t getting sold in an efficient time frame.

I don’t really want to knock companies that keep excessive amounts of inventory in warehouses and / or in the basement of stores. There simply has to be beds that are sold that have been sitting there for a while.

5. Saatva, unlike traditional mattress retailers, is an online-only seller of luxury mattresses. Can you explain how Saatva’s approach acts like a Kanban (pull) to reduce the waste of inventory (or overinventory)?

Based on our business model, we are able to easily streamline the flow of merchandise where nothing sits in a warehouse for a long period of time. Our stock turns quickly and our customer receive a freshly made product on a regular basis.

I don’t suggest we are a low cost producer of luxury mattresses. We are a low cost seller of luxury mattresses. Our overall business model allows us to sell at retail lower then our competitors. Again, we’ve eliminated all the costs that the brick and mortar retailers incur, coupled with streamlining our stock materials and product line, puts us in the strongest competitive position possible.

6. You’ve mentioned some similarities between Zappos and Saatva – can you explain your philosophy on the customer experience?

I love the Zappos tag line – “Delivering happiness”. At Saatva “We deliver comfort and happiness everyday”. Today, in this new world of sharing information, companies can not afford to disappoint any customer. To me, this is not a debatable ideology, it is a cost of doing business. If you truly believe you’re exceeding your customers expectations from both a product and service standpoint, your company will ultimately benefit even if you lose something along the way.

7. Is it possible to buy a Luxury Mattress online? Wouldn’t customers want to lay on the bed first?

Additionally, and just as important, is the fact that 10 years ago who would of thought that so many people would be buying shoes without trying them on first. This was all about having vision. For us, this conclusion was even easier. After all, has anyone ever left a mattress store without being totally confused and uncertain even after purchasing? You question your own intelligence trying to absorb information that seems so complicated for what should be an easy purchase. Everyone is confused because the deck is stacked against them. This is the reason for our success. At Saatva, we take the confusion and expense out of mattress shopping.

8. What is the customer profile for a Saatva Luxury Mattress?

Internet savvy, fiscally responsible, modern thinking, hip and most of all…they hate to be pressured…Our customers love shopping at their leisure in an intelligent, comfortable way. Bottom line, there are people who don’t need a phony sale or a high pressure salesperson for them to make an intelligent purchasing decision.

9. Which markets is Saatva Luxury Mattress in?

Los Angeles, Fresno and San Francisco in February; Texas by the late spring. Once these territories are set up, we will move as quickly as possible to expand throughout the country. We are also continuing to grow our online affiliate programs.

We will become a national brand within 2 years.

10. Why buy a Saatva mattress?

Saatva takes the confusion and expense out of mattress shopping. We will always be kind, honest and passionate when serving our customers – guaranteed.

Lean Logistics in Luxury Mattress Industry: An Interview is a post from: Lean Six Sigma Consulting

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On Friday March 25, 2011, I had an opportunity to hear Mark Zuckerberg, Founder and CEO of Facebook and Senator Orrin Hatch speak to a group at Brigham Young University. The event was held at the Marriott Center and was Mark Zuckerberg’s first time speaking to a University audience that large. There were about 10,000 students there.

Zuckerberg spoke about technology, innovation, public policy and took questions from the crowd. He brought 10 other Facebook employees with him, 3 of whom were BYU Alumni.

During the event, he hit on several points that are relevant for change agents and for those leading implementations of excellence within their organizations – whether it be a Lean Deployment or Six Sigma or Process Improvement or Continuous Improvement – whatever. I thought you might be interested in his comments and how they might be relevant for you.

No Heroes, Just the Team

Regarding the success of Facebook, Mark Zuckerberg said the following:

One thing that gets blown out of proportion in our culture is the emphasis on the single person or the couple of people who are running something. A lot of people might know who I am, but the success of Facebook is really all about the team that we built. I think in any company that’s going to be true.

This is relevant for any change agent involved in changing the culture of a company or in introducing new ways of thinking or new ways of working in an organization. Often, the leaders and change agents are the ones in the spotlight, but the team and the broader work force should be recognized as well – indeed, probably more so.

Believe The Company is Broken

[ad#Chitika-1]One of the questions from the audience was about the qualities Mark Zuckerberg looks for in potential employees hoping to work at Facebook. He said something quite relevant and refreshing to hear. I paraphrase,

I don’t want people to join Facebook for what it is, but for what it can be with their help. I almost want people to think it’s broken and then they join to help us fix the company.

This was quite refreshing to hear. I often hear the opposite, from those dedicated to uphold the facade that everything is perfect in their organization, department, or company. Zuckerberg has no false misconceptions and doesn’t take offense to those calling “his baby ugly”. Instead, as a true leader should, he wants help on improving his company, Facebook.

I felt that this message was very good and relevant. It was also very refreshing to hear. If I didn’t know better, I’d say that Mark Zuckerberg might even be a student of the Toyota Production System. His comment and tone above aligns perfectly to the central message of lean.

All Problems are Human Problems

When Mark Zuckerberg was asked about what students should study in college or university to be competitive for employment at Facebook, he provided and answer that I think was a big surprise to many in attendance. He said,

All of these problems at the end of the day are human problems . . .

The things that people are really most interested in are what’s going on with the people they care about. It’s all about giving people the tools and the controls that they need to be comfortable sharing the information that they want. If you do that, then you can create a very valuable service.

A lot of what we’re doing is as much psychology and sociology as it is technology.

He then said that was actually a Psychology and Computer Science double major during the short time he spent at Harvard before he dropped out to start Facebook.

This is quite relevant: amidst the tools, Lean Manufacturing, Six Sigma, or whatever flavor of Process Improvement you’re involved in, we’re really dealing with human problems. They might first appear as problems in process, but they eventually boil down to people problems.

My Thoughts on the Event

I was quite impressed with Mark Zuckerberg. The glamorized and dramatized person on the movie The Social Network and the Mark Zuckerberg on stage were two very different people. The Mark Zuckerberg on stage seemed thoughtful, sincere, caring, warm – heck, just a good down to earth guy. I’m glad I went; I learned something new for having attended.

Below are a few pictures of Mark Zuckerberg and videos from the event, courtesy of BYU.

Mark Zuckerberg: I’d Rather Them Believe the Company Was Broken is a post from: Lean Six Sigma Consulting

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I’ve written about the Myth of Multitasking before; but despite knowing that Multitasking often doesn’t lead to good outcomes, I find it difficult to stop. So, instead of reprimanding myself too harshly, I thought I’d document the 5 Life Lessons I’ve Learned from Multitasking.

1. Multitasking Means That Things Will Take Longer

I wrote about this in 2007, even showing how Multitasking and some knowledge on Queueing and Little’s Law can help us see quantitatively that tasks will take longer. Despite that, I still multi-task and reap the consequences of tasks taking longer than they should.

2. Multitasking Means More Mistakes and Errors

FREE Download: Myth of Multitasking!

One outcome I’ve learned from Multitasking is that when I switch from one task to another, I usually forget what I was doing, how I was doing it, and so I have to try to remember, which often results in having to learn the task over again. And, when I switch back to the task I just switched from, I go through the same re-learning process.

All of this re-learning and remembering elements and steps of the tasks usually results in me making errors – indeed, these errors are probably normal in the learning curve cycle but also completely avoidable if I had chosen to start a task and finish a task before beginning a new one.

3. Multitasking Leads to Stress and Anxiety

As much as I hate to admit it, some jobs require Multitasking. As a father of 9 kids, ages 13 and under (we’ve adopted children), I often have to Multi-task. Here are some common task switching activities I’ve done as a dad:

• While changing a diaper, I’ve also stopped other kids from fighting over a toy.
• While making lunch for the kids, I have to comfort a child that just got hurt from wrestling his big brother.
• While tucking the little kids into bed, I have to remind the big kids that we don’t always need to have dessert after dinner.

You get my point.

All the while, Multitasking adds stress and anxiety to a job that is already full of stress and anxiety.

4. Multitasking Leads to Tasks Left Undone

While I might not be old in age, I sure feel very old in years. As a consequence, I sometimes forget what I was doing. So, when I switch tasks, I usually forget what I was doing and sometimes the task I just switched from doesn’t get done.

5. Multitasking Leads to Damaged Relationships

I’ve learned that when my mind and attention is on something else other than on the person I’m currently with, they don’t feel loved, listened to, or appreciated. This is one that I’ve really tried to do less of, because when people and feelings are concerned, it’s important to me that I maintain those and do less of the behaviors that harm important relationships.

Conclusion

The negative results I highlight above are very real and logical outcomes from Multitasking. Each day, I aim to do better by doing less and less Multitasking. As in all things business, continuous improvement also applies to ones personal life.

5 Life Lessons Learned from Multitasking is a post from: Lean Six Sigma Consulting

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In keeping with our series of honoring those that came before us and,  on which shoulders we stand, today we’ll revisit the life of Sakichi Toyoda, the founder of the eventual Toyota Motor Corporation.

We are indebted to Sakichi Toyoda primarily for his invention of the Toyota Automatic Loom and, specifically, one piece that, at the time, was ingenious.

When the needle broke, the machine stopped.

Sakichi Toyoda created an innovation that would later become one of the pillars in the Toyota Production System (Lean). That pillar we now call Jidoka, sometimes called “smart automation with a human touch” or “autonomation”. Andon is also another way we see Jidoka manifested in real work.

Sakichi Toyoda’s contribution to the Toyota History is undisputed. Below is his history.

The information below is from the Toyota Boshuku website (http://www.toyota-boshoku.co.jp).

In the spring of his twentieth year, Sakichi made the huge decision to leave the familiarity of his village and travel to Tokyo. There, Sakichi saw modern factories and the latest machinery. These fascinated Sakichi, and awoke in him a passion for machines and motors. Returning to his village, Sakichi began to conduct his own research, starting with the familiar objects around him. He devoted himself to improving the hand loom, which at the time was a clumsy and inconvenient device.

In 1890, Sakichi completed his first invention: the Toyota Wooden Hand Loom. Although he found buyers for the cloth woven by his looms, he sold almost none of the looms themselves. Sakichi next turned his attention to researching a power loom, and in November 1896 he invented the Toyoda Power Loom. This steam-driven loom, made of a combination of wood and iron, was Japan’s first power loom. The Toyoda Power Loom was the first step toward the full-scale development of power looms.

Sakichi’s looms won great acclaim, and he continued to invent new automated-loom technologies amidst repeated partnerships and breakups between companies like Mitsui & Co. and the textile industry. The economic crash caused by the Russo-Japanese War, however, struck a hard blow to the textile industry, and Sakichi was forced to give up his research and development efforts. In 1910, Sakichi quit his job at Toyoda Loom Works Ltd. and traveled to the USA and Europe to observe the loom industry there.

Seeing the well equipped laboratories there steeled Sakichi’s resolve, and the following year he completed Toyoda Automatic Loom Works, with 200 looms. He left the management of the company to his family, however, while he dedicated himself to the research and development of automated looms.

Almost immediately, Sakichi ran into a new problem: thread. If the quality of the thread is not reliable, then if the thread breaks, it is not possible to tell whether the fault lies with the loom or the thread. Sakichi thus decided to operate his own spinning mill, in order to ensure that he had a supply of higher-quality thread.

When World War I broke out in 1914, Japan’s industry was boosted by the wartime economy, and Toyoda Automatic Loom Works grew too large for one person to manage. On January 30, 1918, Sakichi incorporated his company, forming Toyoda Boshoku Corporation.

Although Toyota traces its roots back to Toyoda Boshoku, Sakichi’s death put the company’s continued existence in grave doubt. Under the wartime command economy, private companies were consolidated. Toyoda Boshoku was merged with an affiliate to form Chuo Spinning Company. Unable, however, to meet the demands of a final restructuring plan, it was then merged with Toyota Motor Co., Ltd. (now the Toyota Motor Corporation) — a former spin-off of Toyoda Automatic Loom Works (now Toyota Industries Corporation) — and spinning and weaving operations were suspended.

After war’s end in August 1945, the former employees of Toyoda Boshoku began working to resume spinning and weaving operations. After protracted negotiations with the central authorities, they were granted permission to restore the weaving and spinning works — albeit with some restrictions — and immediately formed a weaving and spinning department within the company. During the war, the government had requisitioned the majority of the spinning machines for scrap metal, but the employees repaired the remaining machines, and on May 15, 1950, Minsei Spinning Co., Ltd. was spun off from Toyota, making the company independent once more. The word “minsei” is Japanese for “private sector”; Risaburo Toyoda so named the company to avoid the dismantling of Japan’s old zaibatsu system, being carried out by the Allied Forces in order to privatize the economy.

The textile industry had prospered under Japan’s wartime “special procurement” boom, but after the boom ended the industry fell on hard times. In order to weather the downturn in the cotton trade, Minsei Spinning tried diversifying, first to wool and woolen goods, then to synthetics, and finally to non-fibers, but it continued to struggle to extract itself from this protracted difficult period.

The Toyota Group decided to support the company, and Toyota Motor chairman Taizo Ishida was appointed chairman of Minsei Spinning. Ishida’s plan for rebuilding the company was to: (1) replace the company’s management with new blood; (2) specialize in spinning and weaving; (3) merge the company with spinning and weaving affiliates; (4) change the company’s name to Toyoda Boshoku; and (5) build a state-of-the-art factory.

Ishida was appointed as chairman in June 1967, at the company’s 34th general shareholders’ meeting. At this meeting, he changed the name from Minsei Spinning to Toyoda Boshoku. Bound up in this name change was Ishida’s desire to carry on the heritage of the name given the company by Sakichi Toyoda, and give the company a prominent place on the world stage as part of the Toyota Group.

As the restructuring of the company proceeded apace, Japan was at the height of the Izanagi boom (a period of prosperity and economic development in the late 1960s). Seeing this as the perfect opportunity, Toyoda Boshoku focused on moving away from its traditional market-driven thread sales, and developing products that could ensure stable revenues not affected by the whims of the market. The company began full-scale production of pure-cotton knit combers (snipes), and luxury combers made from Egyptian cotton and targeting high-end customers. Recognizing the opportunities in industrial materials, the company also began producing fabrics for automobiles, and began supplying base material for car seats to Toyota.

In the early 1970s, Japan was hit by what it called the “Nixon Shock”: the rapid increase in exports from developing countries, coupled with a temporary halt on conversion between gold and the dollar by the US. The Nixon Shock pushed not just the textile industry but the entire Japanese economy into a severe recession. Toyoda Boshoku took drastic measures to stop the flow of red ink from its chronically unprofitable weaving division, stopping all in-house production; in 1973, it began production of automotive ignition coils, which had been transferred to it by Toyota and Nippondenso (now Denso).

This was the company’s first step toward the production of automotive components. The location was the company’s Kariya Plant. Employees were sent to Denso’s Anjo Works to learn the necessary skills.
Subsequently, the unique textile technologies that Toyoda Boshoku had cultivated were applied to automotive seat fabric. After strict testing for elasticity, contraction, and other features, the fabric was officially selected for use in the Celica and Sprinter. Toyoda Boshoku began delivering fabric to Arakawa Auto Body, Takashimaya Nippatsu Industries, and other seat manufacturers. The company had hit its stride in the production and sales of seat fabric, and its development expertise enabled it to diversify into the car interior field, including carpets and seatbelts.

Shoulders of Giants: Sakichi Toyoda is a post from: Lean Six Sigma Consulting

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In my experience, companies seem to enjoy comparing themselves to other companies, often in the spirit of “grass is greener on the other side”. The term “Benchmarking” is often invoked within the context of learning about how so-and-so company is doing, how they are doing it, and why they are doing it. But, less often invoked is the question:

Should we even Benchmark at all?

Benchmarking Definition

Below is a standard definition and history of the term “Benchmarking”:

Benchmarking is the process of comparing one’s business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time, and cost. Improvements from learning mean doing things better, faster, and cheaper.

Benchmarking involves management identifying the best firms in their industry, or any other industry where similar processes exist, and comparing the results and processes of those studied (the “targets”) to one’s own results and processes to learn how well the targets perform and, more importantly, how they do it.

The term benchmarking was first used by cobblers to measure people’s feet for shoes. They would place someone’s foot on a “bench” and mark it out to make the pattern for the shoes. Benchmarking is most used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others.

Also referred to as “best practice benchmarking” or “process benchmarking”, it is a process used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice companies’ processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.

What’s Right with Benchmarking:

There are certain things that make sense to Benchmark. Here are a few:

1. Broad Industry Benchmarking
2. Salary Benchmarking (HR Benchmarking, Human Resources Benchmarking)
3. Competitive Bid Benchmarking
4. Software Benchmarking (speed of web browsers: Firefox versus Chrome versus Internet Explorer versus Opera versus Safari)

The above cases make sense to benchmark because that crucial information gives us a better sense of the competitive landscape – broadly. Where it doesn’t make sense to Benchmark, I believe, are in the following areas:

1. Process Benchmarking
2. Quality Benchmarking
3. Customer Loyalty Benchmarking

I believe that the areas above – which are very popular areas in which to Benchmark – often lead to misguided behavior, stemming from good intentions. Here’s why:

What’s Wrong with Benchmarking?

1. Benchmarking is often conducted by followers in an industry, aiming to Benchmark the Leader in the industry: This behavior leads to more following than it does to eventually leading. This vicious cycle then leads to continued Benchmarking of the leader, creating a deeper sense of followership for the Benchmarking firm toward the Benchmarked firm.
2. Benchmarked practices don’t transfer well: When an industry leader’s business practices are Benchmarked, that often creates many follower companies that blindly copy the industry leader’s business practices without regard for context. Without context, business practices don’t transfer well. For example, The Toyota Production System works very well for Toyota and its practices has also been adopted successfully by many outside of manufacturing. But, if Toyota’s success is blindly copied without regard for the unique needs of your business and without regard for the differences in your business versus that of manufacturing, blindly copying will lead to failure.
3. Often, not always, Benchmarking is conducted by companies that have no performance improvement plan – or an idea of how to improve performance: yes, this is a broad generalization; but, from my experience, Company X will notice that Company Y is doing really well, then the logic follows: “Hey, Company Y is doing well, let’s find out what they’re doing and let’s do that too”. This fallacy is related to the previous Benchmarking Fallacy, but the difference is that the company aiming to copy the industry leader’s business practice has no plan in place to improve, so they seek that plan from the leader.

Okay, it’s your turn:

What are your thoughts on Benchmarking?

Benchmarking: Best Practice, Pros, and Cons is a post from: Lean Six Sigma Consulting

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On this episode of “Shoulders of Giants”, we remember Walter Shewhart.

Walter Andrew Shewhart (pronounced like “shoe-heart”, March 18, 1891 – March 11, 1967) was an American physicist, engineer and statistician, sometimes known as the father of statistical quality control and the person who developed the Control Chart.

From the late 1930s onwards, Shewhart’s interests expanded out from industrial quality to wider concerns in science and statistical inference. The title of his second book Statistical Method from the Viewpoint of Quality Control (1939) asks the audacious question: What can statistical practice, and science in general, learn from the experience of industrial quality control?

Shewhart’s approach to statistics was radically different from that of many of his contemporaries. He possessed a strong operationalist outlook, largely absorbed from the writings of pragmatist philosopher C. I. Lewis, and this influenced his statistical practice. In particular, he had read Lewis’s Mind and the World Order many times. Though he lectured in England in 1932 under the sponsorship of Karl Pearson (another committed operationalist) his ideas attracted little enthusiasm within the English statistical tradition. The British Standards nominally based on his work, in fact, diverge on serious philosophical and methodological issues from his practice.

His more conventional work led him to formulate the statistical idea of tolerance intervals and to propose his data presentation rules, which are listed below:

1. Data have no meaning apart from their context (which is also a key concept of Genchi Genbutsu)
2. Data contain both signal and noise. To be able to extract information, one must separate the signal from the noise within the data.

Walter Shewhart: Influence

In 1938 his work came to the attention of physicists W. Edwards Deming and Raymond T. Birge. The two had been deeply intrigued by the issue of measurement error in science and had published a landmark paper in Reviews of Modern Physics in 1934. On reading of Shewhart’s insights, they wrote to the journal to wholly recast their approach in the terms that Shewhart advocated.

The encounter began a long collaboration between Shewhart and Deming that involved work on productivity during World War II and Deming’s championing of Shewhart’s ideas in Japan from 1950 onwards. Deming developed some of Shewhart’s methodological proposals around scientific inference and named his synthesis the Shewhart cycle (also know as the PDSA Cycle, PDCA Cycle and Deming Cycle).

During the 1990s, Shewhart’s ideas was put to use by a third generation of industrial managers as they adopt the Six Sigma approach to management. Shewart’s ideas form the basis for a significant portion of Six Sigma statistical methodology.

He died at Troy Hills, New Jersey in 1967.

source: Wikipedia, John Hunter

Shoulders of Giants: Walter Shewhart is a post from: Lean Six Sigma Consulting

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To be an effective Lean trainer, coach, teacher, sensei, and mentor, one needs a lot of energy.

As Lean trainers, teachers, or coaches, we need a ton of energy because the work we do is very energy draining. For me, I know that after a Kaizen event, I feel exhausted. For help, I’ve turned to caffeinated drinks in the past. I don’t drink caffeine anymore, but I still find myself wanting something to help pick me up during the day. Ideally, I need to have my diet and food intake such that I get all my energy from what I normally consume.

In a recent Dr. Oz Show¹, he posted a list of 5 Superfoods that you might want to incorporate into your lifestyle and food choices. Rather than relying on energy drinks and supplements, changing what we eat will most likely lead to greater energy and help you (and me) become more effective teachers.

Below is his suggested list:

Sweet Potato

The women of Okinawa, Japan (who also happen to be the world’s longest living ladies) enjoy a purple sweet potato they call Imo every day for breakfast, lunch and dinner. Rich in beta-carotene and boasting 150% more antioxidants than blueberries, this easy-to-make treat can be simply incorporated into an American diet. And, if you can’t find Imo specifically, our orange sweet potatoes pack a similarly healthful wallop.

Turmeric Tea

You usually see the yellow spice turmeric in Indian curries, giving them their characteristic color. But those long-lived ladies of Okinawa slurp this spice in tea daily (and they have one-fifth the rate of breast cancer than their American counterparts). Studies have shown that turmeric is a powerful anti-inflammatory and antioxidant that can help fight cancer.

Mangosteen

fast appetite suppressant Superfoods, Superfruit, Healthy ListThis sweet, tropical fruit originally from Indonesia has made its way onto supermarket shelves in the United States. Hidden inside a thick purple rind that you cut open, is a white, creamy flesh full of vitamins A and C as well as cancer-fighting antioxidants. If you can’t find the fruit, the juice of the mangosteen, which is more widely available, is the next best thing. This is also available in tea form.

Mustard Greens

In Icaria, Greece, 1 in 3 people lives to the age of 90, making the Greek island one of the areas designated as a “blue zone,” where people enjoy superior longevity. There are also no cases Alzheimer’s disease reported there despite many people living to a ripe old age. One of the nourishing foods they enjoy are mustard greens. High in vitamin K (most Americans are deficient in this nutrient), the spicy greens are good for your blood and bone strength. Try them as the Icarians do: boil and then toss with a little virgin olive oil and lemon.

Barramundi Fish

If the Barramundi fish were a human, he would be a tree-hugging, salad-loving vegetarian. The Barramundi, hailing from the coast of Australia, eschews his fellow fish, dining on plankton instead. That means he doesn’t load up on mercury-packed smaller fish and has extremely low levels of the toxin, which is especially important for pregnant women. Free of mercury, but full of heart- and brain-healthy omega-3s, the Barramundi, which is becoming more popular in the US, is a shoe-in for one of the top 5 superfoods. Bonus: the white meat is light, flaky and delicious.

Back to Energy Drinks

Have you ever wondered what is truly in those energy drinks?

Below is a very general breakdown of energy drink products, their main ingredients, and then followed by a really helpful infographic ².

Active Ingredients in Energy Drinks

• Caffeine
  • Product Examples: Red Bull, Monster, Spike Shooter, 5 Hour Energy, and most energy drinks.
• Taurine
  • Product Examples: Arizona Caution Extreme, Red Bull, Rockstar, Zipfizz, 5 Hour Energy.
• Guarana
  • Product Examples: Monster, Kronik, Sobe No Fear
• Ginseng
  • Product Examples: Rockstar, Sobe, Monster, Full Throttle, Zipfizz
• B Vitamins
  • Product Examples: Vitamin Water, Nutrisoda, Pit Bull, Zipfizz, 5 Hour Energy

The Effective Teacher: Superfruits, Superfoods, Energy Drinks is a post from: Lean Six Sigma Consulting

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Sometime last week, my daughter asked what we were having for dinner. I said,

“roast and potatoes”.

Much later, she came to me and asked,

“Dad, what is roast?”

I had to tell her the hard truth.

“Honey”, I said, “roast is really called ‘rump roast’. Do you know what ‘rump’ is?”

With a shocked look on her face, she answered:

“Is roast a cow’s butt?”

I had to tell her the truth.

“Yes, it is.”

What we Sugar Coat

Sugar Coating is a saying that means the following:

To cause to seem more appealing or pleasant: a sentimental treatment that sugercoats a harsh reality.

If you think about your own life, there are probably instances where you have unknowingly covered-up a fact with words that make it sound better or prettier than is true.

Going back to my daughter’s example. What if we substituted “butt” for “roast”. We get the following results:

• “Is the roast ready?” becomes “Is the butt ready?”
• “Are we eating roast and potatoes?” becomes “Are we eating butt and potatoes?”
• “This roast is so soft and tender” becomes “This butt is so soft and tender”.
• “Can I have gravy with my roast” becomes “Can I have gravy with my butt”.

It’s really about Leadership – a leader is optimistic, but uses words that don’t pacify his or her followers. He is frank and honest, but aims to grow, teach, stretch, and receive input and contribution from those he leads.

Today, beware of any sugar coating that you might be doing. Substitute any “pretty” words with the real words and notice the difference.

If we see problems for what they truly are, not for what we falsely describe them to be, then we’ll be closer to attacking the root causes of what cripples companies. – shmula

The Things we Sugar Coat is a post from: Lean Six Sigma Consulting

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With any type of organizational change, resistance is often a barrier that creeps into the dynamic. The antidote to resistance is trust. Trust comes from your character, how you present yourself, and what you do – people will have a sense and perception of who you are that either builds trust or not.

But, our face also plays a part in whether others perceive us to be trustworthy or not.

Princeton University¹ psychologists conducted research on the facial features that build trust and which facial features don’t build trust.

Below is their facial-trust scale (my term).  Where do you fit in the scale?

According to the study, these are the facial features that are not perceived as trustworthy:

• Low inner eyebrows
• Deep indentation above nose, between eyes
• Shallow cheekbones
• Thin chin

On the other hand, here are the facial featured perceived to be trustworthy:

• High inner eyebrows
• Shallow indentation between eyes and above nose
• Pronounced cheekbones
• Wide chin

What does your face say about you?

How to Build Trust with Your Face is a post from: Lean Six Sigma Consulting

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Matt May was kind enough to send me a pre-release copy of his new book, The Shibumi Strategy. I liked what I’ve read so far and I think you would too.

Matt May’s new book, The Shibumi Strategy: A Powerful Way to Create Meaningful Change, will be released on November 16. But, you can pre-order The Shibumi Strategy here.

About the Shibumi Strategy

Here’s the product description on Amazon:

A personal leadership fable on applying principles of Zen to work & life choices. The Shibumi Strategy is a little book about a big breakthrough. It tells the story of a hardworking family man who finds himself in crisis when his company closes. Through his struggle, and guidance from unlikely sources, he learns subtle lessons in the form of “personal zen” principles, coming to understand that it is often the involuntary challenge, the setbacks, that harbor the power to transform. When approached as an opportunity — no easy task when simple survival is the first order of business—unforeseen trials can sometimes result in an altogether new lease on life.

Shows how “personal leadership” can lead to real (and not always easy) breakthroughs Includes key lessons on commitment, preparation, struggle, breakthrough, and transformation Is based on Shibumi, a Japanese word without literal definition that describes the height of personal excellence, elegant performance, and effortless effectiveness.

For those struggling with personal breakthroughs, The Shubimi Strategy offers a new way to face work and life challenges for balanced solutions.

Shibumi Strategy: Editorial Reviews

Matt May’s The Shibumi Strategy has received some very impressive reviews. Below are several from Amazon:

With this short, simple fable, Matthew May manages to illuminate an all-too-common career crisis with Zen insights and concepts that not only provoke thought but also give readers powerful strategies to tackle change, challenge, and opportunity.” — Gretchen Rubin, author, The Happiness Project

“Matt May has written a little book full of big ideas. Drawing from ancient Zen practice and applying those principles to modern life, he shows how you can turn the obstacles in your path into opportunities to transform your career, perhaps even your life.” — Daniel H. Pink, author, Drive and A Whole New Mind

“Matt’s done it again: shown us how to break out of constraints and get the job done. He’s also proven how Japanese practices and Zen principles that are difficult to translate can explain everything.”
— Guy Kawasaki, co-founder, Alltop.com and author, Reality Check

“The holy grail for any leader is to reach a state of clarity and peak performance. Through the power of story, The Shibumi Strategy shows us how, and sheds an invaluable light on the role (and potential) of the everyday struggles we face.” — Scott Belsky, founder & CEO, Behance and author, Making Ideas Happen

“What an exquisite story! Matt May deftly weaves ancient wisdom with modern realities, revealing how each of us can embrace the struggle inherent in any meaningful breakthrough—and use it to transform our own potential in work and life.” — Sally Hogshead, author, Fascinate: Your 7 Triggers to Persuasion and Captivation

“This is a treasure of a book, and just the kind of uplifting medicine that’s needed right now. It’s about something that in the west we don’t even have a name for, and yet it holds the key to finding our way in challenging times. When you know how to look at the events of your life, everything is there to show you what you can’t see on your own, and offer you opportunities that you normally walk right by. No matter your life circumstances, this is the kind of book that can (and almost certainly will) change your life.”
— Sarah Susanka, author, The Not So Big Life and The Not So Big House series

“The Shibumi Strategy is a simple but affecting tale—a must-read for anyone looking to make sense of breakthrough change at work and in life.” — Ori Brafman, coauthor, Click: The Magic of Instant Connections

“The Shibumi Strategy tells a touching story with a universally resonant message you’ll want to keep close to your heart and share with others.”
— Maddy Dychtwald, author, Influence: HowWomen’s Soaring Economic Power Will Transform Our World for the Better

“This exceptional book is a game-changer. Read it. Apply it (fast). And step into your next level.”
— Robin Sharma, author, The Leader Who Had No Title and The Monk Who Sold His Ferrari

Other Books by Matthew May

In Pursuit of Elegance: Why the Best Ideas have Something Missing:

What made the Sopranos finale one of the most-talked-about events in television history?

Why is sudoku so addictive and the iPhone so darn irresistible?

What do Jackson Pollock and Lance Armstrong have in common with theoretical physicists and Buddhist monks?

Elegance.

In this thought-provoking exploration of why certain events, products, and people capture our attention and imaginations, Matthew E. May examines the elusive element behind so many innovative breakthroughs in fields ranging from physics and marketing to design and popular culture. Combining unusual simplicity and surprising power, elegance is characterized by four key elements—seduction, subtraction, symmetry, and sustainability. In a compelling, story-driven narrative that sheds light on the need for elegance in design, engineering, art, urban planning, sports, and work, May offers surprising evidence that what’s “not there” often trumps what is.

In the bestselling tradition of The Tipping Point, Made to Stick, and The Black Swan, In Pursuit of Elegance will change the way you think about the world.

The Elegant Solution: Toyota’s Formula for Mastering Innovation:

Toyota is now one of the top three car companies in the U.S. according to the New York Times–a fact that would have been unthinkable just a decade ago. May, a senior advisor with the University of Toyota, reveals how Toyota’s philosophy of team-based innovation and creative business practices has made this post-industrial manufacturing company a winner. A formula of three principles and 10 practices drives Toyota’s creativity, with a reported one million ideas from its employees being implemented each year. May was challenged to translate the Toyota Production System into a company-wide process to cultivate creative ideas at every level of the company and convert those ideas to solid value for customers buying a Toyota automobile. May outlines his journey with dozens of compelling real-life examples of creative thinking while weaving in the history and Japanese culture that has made Toyota the well-respected and profitable company it is today.

Shibumi Strategy, Matt May is a post from: Lean Six Sigma Consulting

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Dogs want more than anything to please their owners. As such, they respond to positive reinforcement: if the dog does something good and the owner responds with affection, treats, and joy, then the dog will remember that and will eventually learn to do those things that make the dog owner happy.

A recent article on canine psychology reveals some interesting things that most average dog owners don’t know:

The average person who does not have an expert understanding of canine behavior, might scold their dog harshly or punish them and wonder why it does not seem to have an effect on the dog’s behavior. They remain puzzled as to why their dog continues to chew their shoes while they are away or why they have yet to understand the concept of potty training. It often has to do with the owner’s approach to training. Punishment is not an effective training method with dogs and therefore it will not do anything to stop bad behavior, and in some cases it actually makes the behavior worse.

Dogs live to please their owners. It is the foundation upon which the entire relationship is based. Dogs want to make the owner happy more than anything, so when a positive training method like treats or verbal praise and affection are used, the idea is cemented. The dog wants to make you happy so it learns what to do to make that happen. However, the recipe does not work in reverse.

Punishment is a concept that does not make sense to the dog. They do not have logic. They are unable to connect the undesirable behavior to the punishment through cause and effect. It only confuses them and makes them fear their owner, which damages the bond that is the foundation of the relationship. ¹

Humans are not Dogs

For humans, motivation doesn’t work the same way. Positive reinforcement works well as a child, but as an adult, it works less so. According to Daniel Pink, author of Drive: The Surprising Truth of what Motivates Us, he explains that his decade-long research shows that humans are more motivated by intrinsic items such as autonomy, desire for mastery, and happiness. External measures are motivational in the short-term, but not the long-term.

Motivation and Your Lean Six Sigma Implementation

This has implications for lean and six sigma practitioners. In coaching the front-lines or as a sensei to others, we need to remember that those we teach and mentor wish to have autonomy and mastery. Those are what truly motivates.

Daniel Pink explains more in the videos below.

Daniel Pink, Leading@Google

Daniel Pink, Part 1:

Daniel Pink, Part 2:

Daniel Pink, Part 3:

Daniel Pink, Part 4:

Daniel Pink, Part 5:

Daniel Pink, Part 6:

Dog Psychology and Human Motivation: Daniel Pink on What Motivates Us is a post from: Lean Six Sigma Consulting

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Yes, we can learn from everybody – no matter who it is, if we are aware and have enough humility, we can learn, but we must look and be open. I learned something from a very unlikely source: Sylvester Stallone.

A few weeks ago on twitter, Sylvester Stallone sent out a tweet that is a good reminder of what type of leader we can be and what is required to get there. He said:

Diamonds is the hardest material. Graphite is the weakest material. Yet both contain the same carbon atoms. What makes the difference? PRESSURE. Same as life, yes?

I’m not a geologist and know almost nothing about diamonds and graphite, so I can’t validate what Sylvester Stallone says. But, it makes sense.

What do you think? Have you found yourself maturing and getting stronger through the pressure you’ve felt in your personal and professional life?

Leadership Lessons from Rocky Balboa is a post from: Lean Six Sigma Consulting

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In your change management efforts, as difficult as they are at times, it’s important to always remain positive. As you know, people are are always watching and, what you say, do, or not do is a signal to them of how to behave, believe, and do.

Indeed, remaining positive during tough times and having an attitude of hope and encouragement is a mark of mature leadership.

From time to time, those in the middle of change management efforts, need some help ourselves – we need help in staying positive, especially when things become difficult.

In those times, I’ve turned to music to help me. Recently, I’ve found Jack Johnson’s song “Upside Down” to really buoy me up. Here are the lyrics, followed by a live performance of “Upside Down”. I hope you enjoy it.

Who’s to say
What’s impossible
Well they forgot
This world keeps spinning
And with each new day
I can feel a change in everything
And as the surface breaks reflections fade
But in some ways they remain the same
And as my mind begins to spread its wings
There’s no stopping curiosity

I want to turn the whole thing upside down
I’ll find the things they say just can’t be found
I’ll share this love I find with everyone
We’ll sing and dance to Mother Nature’s songs
I don’t want this feeling to go away

Who’s to say
I can’t do everything
Well I can try
And as I roll along I begin to find
Things aren’t always just what they seem

I want to turn the whole thing upside down
I’ll find the things they say just can’t be found
I’ll share this love I find with everyone
We’ll sing and dance to Mother Nature’s songs
This world keeps spinning and there’s no time to waste
Well it all keeps spinning spinning round and round and

Upside down
Who’s to say what’s impossible and can’t be found
I don’t want this feeling to go away

Lean Six Sigma: A Dose of Positivity is a post from: Lean Six Sigma Consulting

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It rains on all of us.

At some point, each of us will face adversity – whether it be in our personal life or in our professional life – none of us are immune to hardship or adversity.

The question for each of us today is this:

How will I respond when things get hard?

Put another way,

1. Will you become bitter and angry at your circumstances?
2. or, Will you choose the better part, maintaining a healthy attitude, positivity, and a clear mind?

What are you going to choose?

One of my favorite poems is from General Douglas MacArthur. His poem, “Build me a Son”, is one that I turn to from time to time. I hope it helps you too.

Build me a son, O Lord,
who will be strong enough to know when he is weak,
and brave enough to face him self when he is afraid;
one who will be proud and unbending in honest defeat,
and humble and gentle in victory.

Build me a son whose wishbone will not be
where his backbone should be;
a son who will know Thee- and that
to know himself is the foundation stone of knowledge.

Lead him, I pray, not in the path of ease and comfort,
but under the stress and spur of difficulties and challenge.
Here, let him learn to stand up in the storm;
here, let him team compassion for those who fall.

Build me a son whose heart will be clear, whose goals will be high;
a son who will master himself before he seeks to master other men;
one who will learn to laugh, yet never forget how to weep;
one who will reach into the future, yet never forget the past.

And after all these things are his,
add, I pray, enough of a sense of humor,
so that he may always be serious,
yet never take himself too seriously.

Give him humility, so that he may always remember
the simplicity of true greatness,
the open mind of true wisdom,
the meekness of true strength.

Bitter Part or Better Part is a post from: Lean Six Sigma Consulting

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Are you in need of a boost of creativity? On a Monday afternoon, would’nt you rather be taking a nap than sit in a long-winded meeting, tired, and ready to go home?

Well, I did some research on what we can do to boost creativity – easy things we can do. Here’s what I found.

Try these tips on how we can get  better in small ways, everyday:

1. Drink Water: Brain researchers have found that within 5 minutes of drinking water, we experience a marked decline in elevated stress. Our brain is 85% water, which means that even the slightest dehydration drains mental energy, which can cause headaches, stress, and lack of creativity.
2. Go To Sleep: When the brain is in sleep mode (theta and delta), it is also active in immune regeneration and storage of the learning obtained that day. It takes 8-10 hours to complete all cycles. If not completed, the brain compensates by shutting down during the day to “catch-up”.
3. Look at the Sky: Look at the blue sky for 20 minutes. Looking at the blue end of the spectrum stimulates the brain stem and thalmus, giving us a natural shot of mental alertness.
4. Sleep in a Totally Dark Room: The pineal gland in your brain must have total darkness in order to produce malatonin, the sleep hormone and potent antioxidant.
5. Don’t Try too Hard: To achieve more breakthrough moments, we need to relax and play. Too much effort produces gamma brainwaves, which drives anxiety. “Mental Block” is a sign that you need to take a break because you are becoming unhealthily anxious.
6. Break Routine: On your way to work, try a different route; rather than parking in “your” spot, try parking somewhere else. Changing things up stimulates your mind and can help you be more creative.
7. Draw with your Opposite Hand: If you’re right handed, try writing and using your left hand for daily activities. By doing this, you’ll be waking up the parts of your brain that have grown accustomed to routine. Now, you actually have to think and try.
8. Learn a New Language: Go ahead and try it; learning a new language forces you to think differently. In fact, try speaking the new language for hours at a time – you’ll soon move beyond frustration and you’ll eventually be waking up the innovation portions of your brain.
9. Eat Essential Fatty Acids: Your brain needs Essential Fatty Acids (EFAs). This is Omega 3, which comes from fish oil, olive oil and Omega 6, which comes from corn, soy, and canola oil. These essential fatty acids promote growth of the cerebral cortex – our bodies cannot produce essential fatty acids, so we must get it from a different source.
10. Breathe: When you have oxygen shortage, the first brain cells that die are the ones responsible for recording your most recent experience or what you read most recently. So, breathe – deeply, expanding your stomach, not your chest – don’t try to be macho.

Give these a shot – don’t ignore your skepticism, but test these and see if these ten suggestions will help you become more creative.

Ten Ways to Boost Your Creativity is a post from: Lean Six Sigma Consulting

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Jeff Bezos gave a wonderful commencement  address to the Princeton University 2010 Baccalaureate class. In that speech, he shares some wisdom he learned from his grandfather that has stayed with him all throughout his life.

Here’s that video, followed by the speech in text:


“We are What We Choose”
Remarks by Jeff Bezos, as delivered to the Class of 2010
Baccalaureate
May 30, 2010

As a kid, I spent my summers with my grandparents on their ranch in Texas. I helped fix windmills, vaccinate cattle, and do other chores. We also watched soap operas every afternoon, especially “Days of our Lives.” My grandparents belonged to a Caravan Club, a group of Airstream trailer owners who travel together around the U.S. and Canada. And every few summers, we’d join the caravan. We’d hitch up the Airstream trailer to my grandfather’s car, and off we’d go, in a line with 300 other Airstream adventurers. I loved and worshipped my grandparents and I really looked forward to these trips. On one particular trip, I was about 10 years old. I was rolling around in the big bench seat in the back of the car. My grandfather was driving. And my grandmother had the passenger seat. She smoked throughout these trips, and I hated the smell.

At that age, I’d take any excuse to make estimates and do minor arithmetic. I’d calculate our gas mileage — figure out useless statistics on things like grocery spending. I’d been hearing an ad campaign about smoking. I can’t remember the details, but basically the ad said, every puff of a cigarette takes some number of minutes off of your life: I think it might have been two minutes per puff. At any rate, I decided to do the math for my grandmother. I estimated the number of cigarettes per days, estimated the number of puffs per cigarette and so on. When I was satisfied that I’d come up with a reasonable number, I poked my head into the front of the car, tapped my grandmother on the shoulder, and proudly proclaimed, “At two minutes per puff, you’ve taken nine years off your life!”

I have a vivid memory of what happened, and it was not what I expected. I expected to be applauded for my cleverness and arithmetic skills. “Jeff, you’re so smart. You had to have made some tricky estimates, figure out the number of minutes in a year and do some division.” That’s not what happened. Instead, my grandmother burst into tears. I sat in the backseat and did not know what to do. While my grandmother sat crying, my grandfather, who had been driving in silence, pulled over onto the shoulder of the highway. He got out of the car and came around and opened my door and waited for me to follow. Was I in trouble? My grandfather was a highly intelligent, quiet man. He had never said a harsh word to me, and maybe this was to be the first time? Or maybe he would ask that I get back in the car and apologize to my grandmother. I had no experience in this realm with my grandparents and no way to gauge what the consequences might be. We stopped beside the trailer. My grandfather looked at me, and after a bit of silence, he gently and calmly said, “Jeff, one day you’ll understand that it’s harder to be kind than clever.”

What I want to talk to you about today is the difference between gifts and choices. Cleverness is a gift, kindness is a choice. Gifts are easy — they’re given after all. Choices can be hard. You can seduce yourself with your gifts if you’re not careful, and if you do, it’ll probably be to the detriment of your choices.

This is a group with many gifts. I’m sure one of your gifts is the gift of a smart and capable brain. I’m confident that’s the case because admission is competitive and if there weren’t some signs that you’re clever, the dean of admission wouldn’t have let you in.

Your smarts will come in handy because you will travel in a land of marvels. We humans — plodding as we are — will astonish ourselves. We’ll invent ways to generate clean energy and a lot of it. Atom by atom, we’ll assemble tiny machines that will enter cell walls and make repairs. This month comes the extraordinary but also inevitable news that we’ve synthesized life. In the coming years, we’ll not only synthesize it, but we’ll engineer it to specifications. I believe you’ll even see us understand the human brain. Jules Verne, Mark Twain, Galileo, Newton — all the curious from the ages would have wanted to be alive most of all right now. As a civilization, we will have so many gifts, just as you as individuals have so many individual gifts as you sit before me.

How will you use these gifts? And will you take pride in your gifts or pride in your choices?

I got the idea to start Amazon 16 years ago. I came across the fact that Web usage was growing at 2,300 percent per year. I’d never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles — something that simply couldn’t exist in the physical world — was very exciting to me. I had just turned 30 years old, and I’d been married for a year. I told my wife MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn’t work since most startups don’t, and I wasn’t sure what would happen after that. MacKenzie (also a Princeton grad and sitting here in the second row) told me I should go for it. As a young boy, I’d been a garage inventor. I’d invented an automatic gate closer out of cement-filled tires, a solar cooker that didn’t work very well out of an umbrella and tinfoil, baking-pan alarms to entrap my siblings. I’d always wanted to be an inventor, and she wanted me to follow my passion.

I was working at a financial firm in New York City with a bunch of very smart people, and I had a brilliant boss that I much admired. I went to my boss and told him I wanted to start a company selling books on the Internet. He took me on a long walk in Central Park, listened carefully to me, and finally said, “That sounds like a really good idea, but it would be an even better idea for someone who didn’t already have a good job.” That logic made some sense to me, and he convinced me to think about it for 48 hours before making a final decision. Seen in that light, it really was a difficult choice, but ultimately, I decided I had to give it a shot. I didn’t think I’d regret trying and failing. And I suspected I would always be haunted by a decision to not try at all. After much consideration, I took the less safe path to follow my passion, and I’m proud of that choice.

Tomorrow, in a very real sense, your life — the life you author from scratch on your own — begins.

How will you use your gifts? What choices will you make?

Will inertia be your guide, or will you follow your passions?

Will you follow dogma, or will you be original?

Will you choose a life of ease, or a life of service and adventure?

Will you wilt under criticism, or will you follow your convictions?

Will you bluff it out when you’re wrong, or will you apologize?

Will you guard your heart against rejection, or will you act when you fall in love?

Will you play it safe, or will you be a little bit swashbuckling?

When it’s tough, will you give up, or will you be relentless?

Will you be a cynic, or will you be a builder?

Will you be clever at the expense of others, or will you be kind?

I will hazard a prediction. When you are 80 years old, and in a quiet moment of reflection narrating for only yourself the most personal version of your life story, the telling that will be most compact and meaningful will be the series of choices you have made. In the end, we are our choices. Build yourself a great story. Thank you and good luck!

Jeff Bezos: It is Harder to be Kind than Clever is a post from: Lean Six Sigma Consulting

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In the April 2010 Letter to Shareholders, Jeff Bezos tells Amazon.com shareholders about their focus on inputs, the customer, and their purposeful lack of discussion around financial metrics:

Senior leaders that are new to Amazon are often surprised by how little time we spend discussing actual financial results or debating projected financial outputs. To be clear, we take these financial outputs seriously, but we believe that focusing our energy on the controllable inputs to our business is the most effective way to maximize financial outputs over time. Our annual goal setting process begins in the fall, and concludes early in the new year after we’ve completed our peak holiday quarter. Our goal setting sessions are lengthy, spirited, and detailoriented. We have a high bar for the experience our customers deserve and a sense of urgency to improve that experience.

We’ve been using this same annual process for many years. For 2010, we have 452 detailed goals with owners, deliverables, and targeted completion dates. These are not the only goals our teams set for themselves, but they are the ones we feel are most important to monitor. None of these goals are easy and many will not be achieved without invention. We review the status of each of these goals several times per year among our senior leadership team and add, remove, and modify goals as we proceed.

A review of our current goals reveals some interesting statistics:

• 360 of the 452 goals will have a direct impact on customer experience.
• The word revenue is used eight times and free cash flow is used only four times.
• In the 452 goals, the terms net income, gross profit or margin, and operating profit are not used once.

Taken as a whole, the set of goals is indicative of our fundamental approach. Start with customers, and work
backwards. Listen to customers, but don’t just listen to customers – also invent on their behalf. We can’t assure you that we’ll meet all of this year’s goals. We haven’t in past years. However, we can assure you that we’ll continue to obsess over customers. We have strong conviction that that approach – in the long term – is every bit as good for owners as it is for customers.

In a world where there is much talk of gross margin, etc., Bezos and Amazon focus on the long-term health of the company and the customer experience.

A key lesson here is this: focus on the controllable inputs – this is a key tenet in Lean Thinking. When we focus on the controllable inputs, then the outcome will follow.

Such a simple and clear lesson, yet so many people and organizations fail to see.

Below is Jeff Bezos speaking about their acquisition of Zappos, where he shares some of the lessons as described in the April 2010 Letter to Shareholders.

Focus on the Inputs is a post from: Lean Six Sigma Consulting

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As Lean Thinkers, we know that small changes can make a big difference. In other words, with pun intended, small steps make a big difference. So, today, when you go to work, take the stairs.

Here are the big benefits from a small thing, such as taking the stairs instead of the elevator:

1. People spend an estimated two-thirds of their lives at their place of employment. In order to stay healthy, we need to find ways to incorporate physical activity into our workday.
2. Daily living activities like climbing the stairs can make a significant contribution to the 30 minutes of exercise we all need – everyday.
3. The 30 minutes of physical activity we need for our health can be accumulated a bit at a time, or one stairway at a time, spread at intervals throughout the day (single piece flow for your health).
4. Physical activities like stair climbing are a great way to cope with job-related stress
5. Climbing just two flights of stairs everyday could result a loss of 2.7kg or 6lbs per year. Six flights a day could help you trim nearly 18 lbs., which is an easy way to lose weight.
6. Adding stairs to your day can add years to your life. Studies show that risk of cardiovascular disease and death is lower among those who are regular Stair climbers.
7. Stair climbing can also add life to your years. Those who climb stairs on a daily basis have greater leg strength and aerobic capacity, allowing them to participate more fully in a wide range of daily activities.
8. Taking the stairs is often faster than waiting for an elevator during peak usage times. Take the test and time your trip. Often for trips of 7 floors or less, the stairs are the quickest way to your destination.
9. Using the stairs requires no special skill, equipment or clothing and it burns twice as many calories as walking.
10. Stair climbing is a ‘green’ activity, the only energy source used is what is stored in our bodies – good for you and the environment!

So what are you waiting for? Aren’t you worth it?

Take The Stairs is a post from: Lean Six Sigma Consulting

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We stand on the shoulders of giants. In other words, what we enjoy today – by and large – come from those that came before us. So, today I’m starting a new series I’m calling “Shoulders of Giants” to signify the gratitude we can show to those that have greatly influenced our current practice of continuous improvement.

Today, we’ll be remembering the Automatic Loom.

In 1896, Sakichi Toyoda invented Japan’s first power loom called “the Toyoda Steam power loom”. This development increased productivity by twenty times and the quality of the textiles improved and caused a revolution in the textile industry in Japan. But here’s the subtle but very important discovery and principle:

when the needle broke, the machine stopped

Sakichi Toyoda created an innovation to the Loom that would later become one of the pillars in the Toyota Production System (Lean). That pillar we now call Jidoka, sometimes called “smart automation with a human touch” or “autonomation”.

In large part, Andon (“stop at first defect”) and (“Poka-Yoke”) are later developments that find their influence from the Loom.

So, when we:

1. Determine “normal” from “abnormal” conditions
2. Stop at First Defect (Andon)
3. Conduct Root Cause Analysis (5 Whys)
4. Implement Countermeasures
5. Reflect to see if the Countermeasures accomplished what we expected

We can thank the loom for its influence on current practices of Lean (PDCA for example) that find their roots back to an obscure invention – a sawing machine, the automatic loom.

Shoulders of Giants: The Automatic Loom is a post from: Lean Six Sigma Consulting

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While most Lean efforts are often bottom-up (some middle) and few are top-down, the CEO drives the brand and the overall culture of the company.

Put another way, how the CEO is (their being, not just outward behavior – but who they are) – in large part, describes what the rest of the company is like.

How does this apply to Lean Thinking?

Well, since Lean Management is both a method and a mindset, the Lean Thinking mindset needs to be embodied in the CEO. So, if the CEO exhibits behaviors that are aligned to the philosophy and practice of Lean, then most likely the rest of the company will embody that also.

If you are a leader, know that people are watching your every move and processing every word. Set a good example, because individual employees will emulate you – indeed, the whole company will emulate who you are.

A great example of how a CEO drives both the brand and the culture is Matt Rutledge, the CEO of Woot.com, which was acquired yesterday by Amazon. In Matt Rutledge’s email to his employees, you get a sense immediately of how the Woot culture is like and how their interactions with each other is like.

Go ahead and read. You’ll laugh. But, pay attention to how this one email describes what the culture and what the brand is like. Just one email can do it.

Oh, and how much do you want to bet that the first order of business post-acquisition is fulfillment and order management integration – in other words, if you buy from Woot.com, that order will drop into the Amazon Dallas Fulfillment Center and fulfilled from there. And, the Amazon Dallas Fulfillment Center will now hold all of Woot’s inventory. My guess.

Enjoy the letter below:

Date: Weds, 30 June 2010

From: Matt Rutledge (CEO – Woot.com)

To: All Woot Employees

Subject: Woot and Amazon

I know I say this every time I find a picture of an adorable kitten, but please set aside 20 minutes to carefully read this entire email. Today is a big day in Woot history. This morning, I woke up to find Jeff Bezos the Mighty had seized our magic sword. Using the Arthurian model as a corporate structure was something our CFO had warned against from the very beginning, but now that’s water under the bridge. What is important is that our company is on the verge of becoming a part of the Amazon.com dynasty. And our plans for Grail.Woot are on indefinite hold.

Over the next few days, you will probably read headlines that say “Matt Rutledge revealed to be monstrous pseudo-human creation of Jeff Bezos.” You might even see this photo making the rounds. Rest assured that these rumors have nothing to do with our final decision. We think now is the right time to join with Amazon because, quite simply, every company that becomes a subsidiary gets two free downloads until the end of July, and we very much need that new thing with Trent Reznor’s wife on our iPods.

Other than that, we plan to continue to run Woot the way we have always run Woot – with a wall of ideas and a dartboard. From a practical point of view, it will be as if we are simply adding one person to the organizational hierarchy, except that one person will just happen to be a billion-dollar company that could buy and sell each and every one of you like you were office furniture. Nevertheless, don’t worry that our culture will suddenly take a leap forward and become cutting-edge. We’re still going to be the same old bottom-feeders our customers and readers have come to know and love, and each and every one of their pre-written insult macros will still be just as valid in a week, two weeks, or even next year. For Woot, our vision remains the same: somehow earning a living on snarky commentary and junk.

We are excited about doing this for all sorts of reasons. One, our business model is so vague that there’s no way Amazon can possibly change what it is we’re truly doing: preparing the way for the rise of the Lava Men in 2012. Also, our deal means that Jason Toon will finally be released from that Mexican jail owned by Zappos honcho Tony Hsieh. No, don’t lie, Tony, we’ve seen the paperwork. And we need a powerful ally in case Steve Jobs finally breaks down and comes after us for all our Apple jokes over the years. Don’t think of it as a buyout; think of it as NATO!

I will go through each of the above points in more detail later, but first, let me get to the top 5 burning questions that I’m guessing many of you will have.

TOP 5 BURNING QUESTIONS:

Q: F1RST!!!!

A: Okay, that’s not a question, but it is a good place to mention that our forums will still be policed by a team of moderators, as before. And also, Woot’s previous and always-in-effect privacy policy will still be just as always-in-effect, so don’t worry, there are no plans to suddenly give up or merge your forum data.

Q: Is Snapster leaving?

A: Are you kidding? He’s out the door about ten seconds after that check clea- that is to say, Snapster will continue as Woot.com CEO, just like before, and the rest of our staff’s not going anywhere either. Woot and all our various sites will continue to be an independently operated company full of horrible, useless products and an untalented jerkface writing staff, same as it ever was.

Q: Will the Woot culture change?

A: Amazon is interested in us because they recognize the value of our people, our brand, and our unique style of deep-tissue, toxin-releasing massage. And they don’t want to start changing things now. Amazon’s hoping our nutty Woot steez continues to grow and develop (and perhaps even rubs off on them a little). They’re not looking to have their folks come in and run Woot unless we ask them to, which incidentally you can do by turning off the bathroom lights and saying the word “Kindle” three times; a helpful Amazon employee will appear in the mirror. That said, Amazon clearly knows what they’re doing in a lot of areas, so we’re geeked about the opportunities to tap into that knowledge and those resources, especially on the technology side. This is about making the Woot brand, culture, and business even stronger than it is today, and we expect that any changes will be for the better or we wouldn’t bother with this endless paperwork.

Q: Where can I get one of those vuvuzelas?

A: Are you even paying attention?

Several months ago, when we were all sitting on Jeff Bezos’s bumper drinking orange Mad Dog and trying not to be noticed, we heard a voice in the distance yelling “You kids better not scratch my Mercedes or I’m calling the cops!” We ran. It was later that night when Amazon came by the house and said they liked our style and also wanted to get that money we owed them for messing up the chrome. We like to think that our relationship with Amazon will continue at this level for many, many, many years to come.

But we here at Woot are still a thoughtful company, so, at the end of the day, I watched the sunset, and its golden-hued glory made me think about two questions:

1) Is there really a universal deity?

2) Does such a thing preclude free will or are we humans in control of our own destiny?

After spending a lot of time falling asleep at the library while facing the philosophy books, I determined that the concept of destiny is a construct that allows man a gentle release from facing the terror of his existence, and that a Hyundai full of twenties would pretty much offer the same benefits. And so, I ultimately said YES!

This is definitely an emotional day for me. The feelings I’m experiencing are similar to what I felt in college on graduation day: excitement about getting a check from my folks combined with nausea from a hellacious bender the night before. I remember fondly that time when an RA turned on the lights and yelled “WHO OWNS THESE PANTS?” Except this time, the pants are a company, and the RA is you, and the sixty five hours of community service is a deal that will ensure the Woot.com experience can continue to grow for years and years and years, like a black mold behind the Gold Box. Join us, because together, we can rule the galaxy as father and son. Also, there will be six muffins waiting in the company break room, courtesy of the nice folks at Amazon.com. Welcome to the family!

Matt Rutledge

CEO, Woot

The CEO Drives the Brand and the Culture is a post from: Lean Six Sigma Consulting

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