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Making Operational Excellence a Way of Life #01 OE Newsletter

In October, Hewlett-Packard’s six-year run as the dominant maker of personal computers ended when China’s Lenovo group (owner of the former IBM PC unit) edged out HP in shipments of PCs for the previous quarter.

Was the shift for HP inevitable? Perhaps it was a matter of time. PC sales are down overall as people move from laptops to other types of personal devices such as smartphones and tablets. HP has also suffered from acquisitions missteps, notably the Palm fiasco in 2010. And Lenovo has been gaining on HP, partly because of its acquisitions but also because it is better positioned in emerging markets.

Here’s another crucial point: As HP’s chief executive Meg Whitman put it during the company’s annual meeting with Wall Street analysts in early October, “Operational excellence should have become a way of life” at HP. “I’ve learned at HP that you do not get what you expect, you get what you inspect.” These are telling remarks from a CEO about the criticality of operational excellence.

In an interview with the Wall Street Journal, Whitman also commented that

HP has diminished its capabilities for building talent internally over the past 10 years. Hewlett-Packard was long known for excellent talent development, and was a pioneer of practices such as MBWA (management by walking around—a management style in the same spirit of lean practices such as going to the gemba and leader standard work). But the last four HP CEOs have come from outside the company, and HP is in chaos (more or less) with problems in internal communications and ineffective management systems.

Two key takeaways here:

  1. It’s virtually impossible for operational excellence to take hold and be sustained in an organization unless its top leaders are actively and consistently engaged.
  2. Instilling operational excellence in the corporate culture is essential for long-term success.

As Art Byrne says in his new book The Lean Turnaround:

Improving your operations (i.e., your value-adding activities) by relentlessly trying to find and eliminate the waste should be your primary, all-consuming strategic focus. … Most people see Lean as some “manufacturing thing,” and so they simply make it one element (usually a minor one) of their overall strategy. Lean gets delegated to operations and gets an increasingly narrow focus on cost or inventory reduction. ….

It can’t just be delegated down. The CEO must lead it in a hands-on, out-front, in-the-gemba (workplace) way. If the CEO won’t change his ways and become totally engaged …, then there is little, if any, chance of turning any company around using the Lean principles. The focus has to be on creating value, not on cutting costs.*

To be effective leaders must lead by example. In a recent article, Productivity consultant Eric Whitley draws out some fundamental points about good leadership that can be learned from history:

  • All organizational problems are ultimately leadership problems.
  • Leaders lead from the front, not from the rear.
  • Leadership means anticipating, identifying, and solving the systemic problems encountered by those you lead.
  • Your leadership is always on display.
  • Trust must be earned through daily actions over time, not just in moments of crisis.

How are these principles at work in your company? And what else does it take to make operational excellence a way of life? It’s worth making that an ongoing conversation in your organization and on your teams.

*The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company by Art Byrne (McGraw-Hill, 2013), pp. xii & xx-xxi. Art Byrne, Operating Partner at J.W. Childs Associates, has been implementing Lean in various companies for more than 30 years. He was Group Executive at The Danaher Corporation and the former CEO of The Wiremold Company.


IN THE NEWS

Lean Principles Benefit Stroke Patients

It’s not news to experienced lean practitioners that the principles can be applied effectively in healthcare, but it is gratifying to see results continuing to accumulate. Recent findings published in the journal Stroke showed that the application of lean principles helped identify wasteful steps in the process for moving stroke patients from arrival to treatment at the BarnesJewish Hospital in St. Louis, Missouri. Time to treatment is critical in improving outcomes for stroke patients; lives depend on lead time. Doctors at Barnes-Jewish have reduced that “door-to-needle” time by 36% (from 58 to 37 minutes), and increased the percentage of patients that are treated within the critical first hour from 52 to 78%.


ASK THE CONSULTANTS

Q. How can I convince people who are resistant to lean to get on board?

A. People who resist change can threaten the success of operational excellence initiatives. What can be done to get everyone on board? It’s important to evaluate individual mindsets and understand the limits. In the end, not everyone can be convinced, and focusing on those who have no interest in changing can actually be detrimental. Read Glade Nielson’s experienced advice in Convincing the Unconvinced.

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