I probably shouldn’t, but I often find myself having to smile when talking to people working within ‘lean’ organizations. Especially when they start telling me how they’re now x years into the journey and they’re finding it more and more difficult to identify bits of waste that can be eliminated from the systems they’re responsible for. Part of the reason for the smile is that I’m already suspecting the reason for the problem is that they’ve hit the ‘lean with consequences’ phase. Meaning that every time they strip out what they think is a bit of ‘waste’, because it was connected to something else in the system, it came back and bit them with a different bit of waste somewhere else.
The main reason for my smile, though, is for the 800lb gorilla waving at us from the corner of the room. This is the 800lb gorilla waving a flag with the words ‘what about all the intangible stuff, dummy?’
Take a look at the various different categories of ‘waste’ that organizations tend to use as a check-list to make sure they haven’t forgotten anything, and you’ll quickly see the gorilla has a point.
Here’s a compilation of the various different lists we’ve seen Lean teams use:
waste – process, business (employees, managers suppliers, etc), pure
waste of over-production
waste of waiting (internal and external)
waste of transporting (internal and external)
waste of inappropriate processing (using a hammer to crack a nut)
waste of unnecessary inventory
waste of unnecessary motions
waste of defects
waste of untapped human potential (empowerment)
waste of inappropriate systems (over-specified computers, machines, etc)
waste of energy and water
service and office wastes (excess meetings, food, photocopying, etc)
waste of customer time
waste of defecting customers
waste of un-captured/misunderstood customer needs
All in all, it represents a great start point from which organizations can begin to reframe their view of what is waste and what isn’t. Start points are great. Or at least they are if they evolve into all the stuff that needs to happen after the start has finished. And that’s the problem for a lot of organizations right now. The list has remained static. And, back to our gorilla, it hasn’t evolved to encompass the missing half of the real Lean story.
A useful way to help see the bigger picture is to construct a simple alternative model of the world. A modified version of our Outcome Mapping template seemed to me to present a good way to try and cover everything in a 2×2 matrix. Here’s what it looks like with the ‘usual suspect’ sources of waste mapped onto the relevant segments:
What the picture in effect says is that the Lean world has been really good at identifying the tangible – i.e. easy to measure – sources of waste inside and outside the boundaries of an organization, but that it has completely failed to tap in to all of the intangible – i.e. difficult to measure – things. Things like trust, loyalty, engagement and fear. In other words, the things that fall into the ‘unknowable’ category in W.Edwards Deming’s famous aphorism, ‘the most important numbers are unknown and unknowable’.
I like W.Edwards a lot, and I still find myself agreeing with the large majority of the legacy that he’s left behind. But I also like impossible challenges, and the moment someone tells me something is ‘unknowable’ or ‘irretrievable’ or ‘unbreakable’, my instinct tells me that I’ll prove them wrong one day.
Take intangibles like engagement. Either of your employees or your customers. It might be crude, but you could go and ask people how engaged they are. They might not tell you the truth, whole truth and nothing but the truth, but I know I’d rather have the information than not have it.
A recent study by Gallup suggested hack clash royale that on average, somewhere around 25% of employees are ‘fully engaged’ in their jobs. Over half – on average again – are not engaged, and the last quarter 20% are ‘actively dis-engaged’. Which basically equates to paying a fifth of your employees to come and play on their iPhones, manicure their nails and watch the others work. Which in turn strikes me as quite a large source of waste.
Extrapolate that kind of non- or dis-engagement outside the four walls of your organization and start looking at the amount of ‘waste’ associated with all of your bored, promiscuous, over-served, underwhelmed customers and suddenly the numbers head in the direction of close on $1T globally every year.
One of the things we’ve been working to achieve for the last decade is help organizations to build tools to enable them to tap in to the ‘intangible’ half of the Lean waste picture. The rationale has been very simple: we can’t manage what can’t be measured. Until we’re able to meaningfully measure things like trust, engagement, and loyalty there’s not a lot we can hope to do to improve them and start recovering some of the waste they produce.
No measure is perfect, of course, so a part of the deployment strategy for these tools – something we’re just starting to do through what we’re now calling PanSensics – involves, first taking on board all of terabytes of data that exists in most organizations these days and ‘reading between the lines’, to tap in to all of the stuff that traditionally gets ignored (oh, sweet irony), thus getting a first cut at the intangibles. Once we’ve done that, we can then start implementing tools and measures that will allow us to tap into the rich seams of intangibles that emerge when we’re able to listen to the real, metaphor-rich narrative content.
Now it’s the 800lb gorilla’s turn to smile, as he puts down the flag he’s been waving and starts to think about all those previously invisible waste-elimination opportunities you’re about to see for the first time.