Monthly Archives: January 2014

Pick a Winning Number for Your Next LSS Project!

Lottery-BallsIn my first installment of this series I wrote about writing a great problem statement, which is arguably the foundation of all Lean Six Sigma (LSS) projects.  With a great problem statement developed, the next step is determining how best to measure the problem; what I characterize as a “winning” number.  In this post I’ll discuss how to pick a winning number for your LSS project, which begins with a question-how can I determine the right metric to use for my project?

Before getting into how to pick a winning number I want to share my thoughts on some of the problems the process of picking the right metrics creates when not done properly.  Most often the problem I encounter with LSS professionals is that we try to measure too many things in a project.

We often believe the more charts and graphs we can use the better the project; in some ways the more complicated we can make a project the more we tend to feel we are worthy of calling ourselves Black Belts, Master Black Belts, etc.  There’s nothing wrong with getting excited about data, in fact that is one way to select great belt candidates, but most of the world doesn’t run to data and statistics, they run from them!

Another challenge faced with metrics is that it is often times hard to get the data.  Rarely do I work on projects where the data is readily available.  Usually the data has to be collected, or at a minimum, mined from a data source, which in many cases means getting people to do something new, and any time we ask for a change in behavior (i.e. collecting or mining data) we can expect a challenge if we don’t consider the “what’s in it for me” (WIIFM) factor.

Additional challenges I frequently encounter include converting process data to dollars, getting adequate sample sizes, and having a tight link between the problem statement and the primary metric.

What is a “winning” number?

Before getting into the process of how to pick a winning number it’s important to understand what characteristics describe a winning number (aka primary metric).  A winning number should be:

  1. Linked to the problem statement
  2. The number that best represents the magnitude of the problem
  3. “Normalized” to avoid misinterpretation of ups and downs that mean nothing
  4. The number, that if it goes up / down significantly, will confirm the solutions have had a positive impact on the problem
  5. Easy to convert from process measures into financial performance

First and foremost, a winning number has to be tightly linked to the problem statement.  For example, if you are focused on an efficiency problem your winning number should not be a measure of defects.  This seems like a no-brainer, but it never ceases to amaze me how often the numbers we come up with don’t link to the heart of the problem we are trying to solve.  Sure, quality will no doubt impact efficiency, but it’s not how we best measure it.

The number also has to provide a sense of  how big the problem is.  In other words, how best can the problem be converted into a number that quantitatively illustrates to size of the issue?

Normalization can be confusing so an illustration works best to describe this idea.  Look at the charts illustrated below.  Do you see any differences between them?

chart1chart2Looking deeper into the data both charts illustrate the same data.  Chart 1 shows the number accepted and chart 2 illustrates the percentage accepted.

Based solely on chart 1 we may assume the process has a lot of variation, but put into perspective by looking at the data in chart 2 we see there is virtually no variation in the process.  Essentially, normalizing the data keeps us from reacting to ups and downs that have no meaning.

Another way to pick a winning number is to ensure the number we have selected gives us the best answer to the question leading to determining if the solutions have indeed led to a quantifiable improvement.  In other words, if this number goes up / down is that a good indication the problem is now less of an issue?

Finally, none of the improvements mean much to leadership if they don’t lead to financial gains.  Converting process data into dollars can be tricky, but it’s not impossible if we start with the end in mind.

A winning number should be easily convertible from process performance to financial performance.  For example, if the process is measured in time what is the time worth?  Another common example is defects and determining what a defect is worth.  Sad but true, if we can’t make the connection to dollars you are unlikely to see long term engagement in the LSS process by senior leadership.  Business performance (for-profit) is ultimately based on financial performance not process metrics.

How to Pick a Winning Number

Picking a winning number can be done in a number of ways from simple brainstorming to a more structured approach using evaluation matrices and scoring mechanisms.  I propose a hybrid approach that goes beyond brainstorming, but doesn’t become overly complicated with unnecessary rigor.

1. Start with a simple individual brainstorming session using post-it notes to capture ideas.  I like to initiate the session by asking a simple question such as, “how could we measure our problem?”

2. Group the ideas into categories based on what they would measure.  Typically, all LSS projects fall into one of four categories such as a) productivity, efficiency, and speed, b) quality, customer service, and reliability, c) cost, revenue, and profitability, and d) safety, environmental, and health.

3. Determine which of the aforementioned categories the problem statement falls into and zoom in on those ideas.  Affinitize (group together) similar ideas within the focus category.

You could also start with evaluating the problem statement and “forcing” the group to only brainstorm in that space (i.e. productivity, efficiency, and speed), but I find that opening the process up to all ideas leads to a better outcome and more ideas, and by doing so you can also create a teaching moment on other types of metrics for problems in the other categories.  Remember more is better when it comes to brainstorming!

4. Use the following questions to find a potential winning number:

  • Does this data already exists*?
  • Assuming the data exists, is it accurate and reliable, and do people trust the numbers?
  • Are enough samples available?
  • Can the data be easily converted into dollars?

*If the data does not exists I deeply discount it as a winning number because of the challenges of getting the data.  I find that it is far better to use “good enough” existing data than it is to collect “perfect” non-existent data.

From these answers the best number(s) is the generally one that already exists, and is both accurate, reliable, and is trusted by others.  I have found that even though data is accurate and reliable if people in the organization find the numbers to be “funny” numbers no amount of accuracy and / or reliability will get them to buy into the data.

Sample size can also be a challenge, especially for transactional processes.  You will need to determine how to define an adequate sample size, but in general I’m satisfied if I can get 20-30 data points evenly distributed between the Measure and Improve phase.

Finally, if the number can be converted into dollars you may have found a winning number to measure your project!

Parting Thoughts

Picking a winning number can be challenging, but it doesn’t have to be overly complicated if you follow the steps outlined in this post.  Some additional thoughts on what makes a winning number include focusing on the positive aspect of the metric such as whether to measure defects or accepted products, transactions, etc.

I highly recommend always focusing on the positive side of the number simply because it makes for easier positive reinforcement of the behavior that leads to a higher number.  How rewarding does it feel if your boss comes around after a solution has been implemented and says, “great job keeping your screw ups to less than 5%”.  I’m sure you’d much rather hear, “great job keeping the acceptance rate at 95%!”.

Another consideration is when having to collect data get those who will be involved in doing the long term collection doing the data collection in the Measure phase so that when you get to Control there is no hand-off to be made.  Those who were collecting the data in the beginning simply continue doing so for as long as needed.  This will minimize the probability of failure after your team steps away from the project.  For more about the behavioral side of process improvement read about the ABC’s in a previous post here.

What’s your problem?

writing bwThis post is the first in a four part series about what I consider the most critical elements in starting a new Lean Six Sigma (LSS) project.  The elements include:

  1. Writing a “great” problem statement.
  2. Identifying a primary metric that best measures the problem.
  3. Establishing a business case for why a LSS team should be used to fix the problem.
  4. Defining what “success” means.

So with that introduction to the first installment of the series, my first question is-what’s your problem?

This question seems simple enough, but from my experience over the past decade of working with LSS professionals it never fails that both inexperienced and even seasoned veterans often struggle with writing a good problem statement.

Why is this an issue?  Often times project struggles such as scope creep, lack of focus (i.e. too many problems, vague problem descriptions, etc.), and long project cycle times are a direct result of not starting with a “great” problem statement.

What exactly is a “great” problem statement?  I would argue that a great problem statement includes 1) what the problem is, 2) where the problem is happening, 3) when the problem is happening, 4) the magnitude or size of the problem, and 5) why it matters.

What’s the problem?

I would argue that 90% of LSS projects focus on one of three issues that include quality, productivity, and / or cost.  Sure, one could argue these are all related, but in most cases one of the aforementioned is going to stand out as the most critical to success, so my advice is to pick one and move on.  In part two we’ll discuss another potential failure mode to LSS projects-too many metrics, which we can head off at this stage of the project by zeroing in on one focus area.

In a general sense, and that’s good enough for writing a great problem statement, we are trying to improve quality, increase productivity, or reduce costs.  Pick one and move on.

Where is the problem most likely originating from?

Identifying where the problem is most likely coming from helps with not only writing a great problem statement it also confirms who owns the project (i.e. project champion).  Don’t over complicate this step; just identify the process in 1-3 words then ask whether or not your project owner has the authority to change what happens within the process.  If not, you may need to identify a new project owner.

When is the problem happening?

This aspect of the problem statement is sometimes relevant and not always a requirement, but if you know when the problem is happening (i.e. time of day, shift, process step, etc.) it can add significant value, especially in the Analyze phase when identifying root causes.

How big is the problem?

The answer to this question leads to how you will measure the problem (more on this in part two on primary metrics).  If you can’t measure the problem how will you know it has been made less of a problem or completely solved after solutions have been put in place?  Another way of answering this question is to quantify the gap between the current state versus the goal of the process.

This is often the most challenging part of writing a great problem statement, but without some estimation on the size of the issue it’s hard to answer the next question, which is arguably the most important.

The “so what?” Factor

Why should a team be working on this project and not something else?  Why does the problem matter to the business?  Why does the problem matter to your customers?  If you can’t answer these questions it’s time to reevaluate whether the project is worth pursuing.

This is also when a team should be establishing the financial justification for taking on the project.  Will the project have a positive financial impact?  If so, how will the dollars be quantified?  While it’s not an absolute must to have a specific dollar amount at this point in the process, at a minimum the team should be able to describe in words what the project means financially (i.e. decreased operating expenses, reduction in overtime, etc.).

Writing a Problem Statement: Keep it short and sweet!

Another common issue I often see are problem statements that try to tell a long and detailed story about the history of the issue, what’s been done before to fix the issue, causes to the problem, and even solutions to solve the problem!  If we know the causes and solutions don’t waste the time with LSS and over complicate the situation, just implement and count the money!  There’s a place and time for historical information (i.e. final project report, A3, etc.), but it’s not in the problem statement.

My suggestion, or perhaps this can also be viewed as a challenge, is to write your problem statement in two to three sentences.  Start with the first sentence focused on what, where, when, and how big, then use the second sentence to describe why it matters.

Working on “filling in the blanks” is one approach I’ve had success with in writing great problem statements.  Fill in the blanks and then piece the words together to form your statement.  Here’s an example of a great problem statement and the process of piecing together to five key elements.

What is the problem?  There are too many errors in data entry.

Where is the problem most likely happening?  The new patient registration process.

When is the problem happening?  When transferring the patient insurance information to the electronic billing system.

How big is the problem?  30% of patient records have errors not meeting our goal of 99% accuracy.

Why does it matter to the business and / or patients?  Inaccurate insurance information leads to rejected claims that creates both delays in payments, and in some cases, no payment for services in addition to incorrectly billing patients directly who then become less likely to return for future services.

Putting it all together looks something like this with some minor wordsmithing:

In the new patient registration process when transferring patient insurance information to the electronic billing system 30% of patient records have errors not meeting our goal of 99% accuracy. 

This inaccurate insurance information leads to rejected claims that create both delays in payments, and in some cases no payment for services, in addition to incorrectly billing patients directly who then become less likely to return for future services.

Writing a good problem statement doesn’t have to be a pain.  Start by identifying the key elements outlined in this post, then work with your team to put the pieces together into a succinct statement that is short and sweet!

 

What are you doing with your dash?

dashTwo months ago I awoke to problems breathing and swallowing, which was a direct result of having an auto immune disease, myasthenia gravis (MG), that I was diagnosed with in 2012.  You’ve probably never heard of MG since it is an incredibly rare disease with no cure that affects around 10 in 100,000 people in the US.

Essentially, the disease attacks the connection between the nerves and muscles, which for me means that I have trouble using my eyes, arms, legs, neck, talking, breathing, swallowing, and chewing just to name a few:-)

For the weeks preceding this event I had what mysthenics call a “flare up” of symptoms that eventually led to working from home while my neurologist and I worked to control the problem after a 7 day visit to the ICU.  I’m glad to report that at the moment I have the symptoms under control and I’m mostly back to “normal”.

The one “good” thing about being sick, however, this could also be bad, is that it gives you a lot of time to think about life in general.  For me it prompted the age old question of, “am I living a life I can be proud of?”, and “am I living up to my God-given talents?”.

I believe God controls when we are born and when we die, but the “dash” in between is partially in our own control.  How we choose to live is up to us.

With the new year upon us, my challenge to you is to answer the question-what are you doing with your dash?

To help answer the question and build a “plan” to help you maximize on your dash I believe there are 6 key areas that lead to living a “good” life.  These areas include:

  1. Growing spiritually in your relationship with God
  2. Helping others
  3. Nurturing healthy relationships with those you love
  4. Taking care of your body
  5. Managing your financial resources responsibly
  6. Development of your career / work life

Building Your Plan

Some may say that building a formal plan is a bit overkill, but without a written plan you are not likely to go beyond thinking about your goals.  Research also shows that those who write a plan out and share it with others are far more likely to succeed.

My wife and I recently created our plan over the course of a few weeks.  I’d suggest budgeting 5-10 hours for this exercise.  Breaking the process up into 60 minute sessions will make the activity less stressful and also allows for time to reflect.

Building a plan is a three step process that starts with 1) defining values and passions, 2) setting long and short term goals, and 3) establishing key metrics and measuring progress.

Values and Passions

Values are at the core of who you and your family are.  Values are simply words that are used to describe your family.  Typically, these are 3-5 characteristics that others would use to describe  your family.

  1. Brainstorm as many values as you can come up with.  Ask family and friend to contribute as well.
  2. Combine similar values, and determine which to keep or get rid of.
  3. Great values also have stories that go along with them.

Passions are characteristics of those things your family gets “fired up” about.  These are the activities that you could do day in-and-out and never grow tired of.  Like values, you should focus on 3-5 passions that define what your family is most passionate about.

  1. Look back on the past year or two and identify times when you were the most happy or felt like you were “in the zone”.
  2. What was your family doing during these times?

With values and passions defined you can now begin the process of setting goals based on both.

Setting Goals

Setting goals is a process that begins with the end in mind.  Start with defining what “long-term” means to you.  For my family we decided that 10 years is long-term.  With the end in mind, set your goals and then work back to a short-term goal(s) that will get you one step closer to the long-term goal.

Most of us lose focus after 90 days so that is where I suggest you set short-term goals.  In between short and long-term add some mid-range time frame goals.  My family decided to work from 90 days-1 year-3 year-10 year.

Next, every 90 days review where you’ve been and what you need to do in order to take the next step toward the long-term goals.  Annually you should also review your long-term goals and modify as needed.

Measuring Progress

The final step is to determine what are the critical few measures of performance you can track weekly and / or monthly to know you are making progress, and when you are not making progress you can react to by modifying what you are doing.

I’d suggest sticking to fewer than 7 metrics that are tied directly to your 90 day or 1 year goals.  Post this data where you and your family can keep it in sight every day.  Another suggestion is to use the family dinner once a week to review your performance.  Whatever you do don’t wait until the 90 days are up and then ask whether you were successful-it’s too late to do anything at that point!

So now it’s up to you.  What are you going to do with your dash?  Don’t let another year go by living an unfocused life!  Take charge and 2014 will be the start of something great!

Feel free to use this template to get started: Family Plan Template.xlsx