When I walked into the copy room at Chugachmiut, there were over 30 boxes of copy paper sitting on the floor. I understood why after I went through the six, 4 drawer legal size filing cabinets in the office I inherited. There were also four or five 8 foot high bookcases full of three ring binders with additional paper filed in them. Some of the files had up to 10 copies of the same document in them. I remember finding additional copies throughout the building. When staff cleaned out the common office used by our grant writers, they removed something like 3 truckloads of paper for recycling. Paper was everywhere, and as is fitting for an organization that has a command and control reporting structure, having a large inventory of copy paper was important. The crazy thing was, we still couldn’t find a document that we needed when we needed it. This one fact alone contributed to incredible waste at Chugachmiut.

After about 4 months of looking at the file cabinets in my new office, and the bookcases that supplemented them, I asked staff to remove the documents and cabinets/bookcases. We resolved to create a central document management system that would reduce the volume of copies made and stored to one of each document important to the management of Chugachmiut. By the end of my tenure as Executive Director, the great work of my staff had a records management system that was the envy of those who knew about us. It took years for the culture change to take effect. Employees who depended on paper copies for their work and for their protection objected to having the paper removed from their control. In the end, the result was that they could have access to that document faster than if they had kept their own copy. Document management staff would deliver the document in 5 minutes or less, and more often than not, it was less. 

One of Dr. Deming’s 14 points proved to be somewhat difficult for me to define and implement as a CEO. That point was to “Drive out fear”. Deming sees management by fear as counter-productive in the long term, because it prevents workers from acting in the organization’s best interests.

David Marx, author of “Whack-A-Mole: The Price We Pay For Expecting Perfection,” laid out a conceptual framework that helps to clarify this issue in my mind for the workplace, and also gives a framework for changing our society to more positive terms as well.

Marx is an engineer who worked at Boeing, a Lean Managed company since 1989. He is also an attorney and consultant working on risk management with a wide range of businesses. His concept of a just society fits extremely well in a Lean Managed environment.

Marx speaks about the widespread prevalence of “Human Error.” He says, factually, that we all make errors. It’s the human thing we do. Yet we as a society do not accept errors. Instead, we demand perfection to our detriment. In a Lean workplace, errors need to be acknowledged and corrected. Instead, we punish human error. Dr. Deming felt we should not punish human error, but encourage self-recognition of error so the one making errors will be willing to acknowledge it so they can participate in fixing it.

“Risky Behaviors” are the second category Mr. Marx writes about. We have rules in the workplace, and most of us follow them. But there are some who push those boundaries, thereby encountering additional risk. But taking on additional risk doesn’t mean we are punished. Those who make errors aren’t always punished, and as they observe others are punished, they learn hiding behaviors. They learn how to deflect being responsible or accountable. Accepting risk also encourages hiding behaviors, and discourages being responsible or accountable. But the difference between human error and risky behavior is the assumption of the risk by flaunting the rules. When risky behavior produces negative results, the actor who accepts the risk should expect punishment. And when a manager encounters an employee who takes unwarranted risks should be coached so they understand the consequences of continuing to take risk. If they continue to take risk, their behavior may rise to the level of reckless, and ultimately receive punishment.

Finally, Mr. Marx talks about “Reckless Behavior,” or a conscious disregard of the rules. Reckless behavior cannot be condoned and does need to be punished.

Here is an example regarding on time start of work. If the workday starts at 8 am, then employees need to be there early enough to start work. If an employee fails to set their alarm clock or turn it ahead during daylight savings time, that is human error, and should be a learning process that they can correct, perhaps by setting a second alarm. If an employee stays out late the night before work, and pushes the snooze button a few times, knowing that they are pushing the time limits, then showing up late becomes accepting risk. This employee needs to be coached and if the behavior continues, then punished. Finally, reckless behavior could be as bad as getting drunk the night before and failing to wake up at all.

Mr. Marx’s framework fits Dr. Deming’s point of driving out fear. I like it.

A friend introduced me to a fabulous publication titled “Tribal Leadership.” It’s not about Alaska Native or American Indian tribes and their leadership. It is much more. Written by a trio including Dave Logan, John King and Halee Fischer-Wright, their thesis describes 5 levels of human behavior in the workplace. The levels are described as: Life Sucks, My Life Sucks, My Life’s Great, My Life is Great and Life is Great. I found great wisdom in this particular characterization. What is even more striking to me is the almost exact parallel between organizations and a community. The same levels are in both.

Aspiring to a Life is Great level is hard work, which cannot be be accomplished immediately. Employee’s must move through each level one by one. The dynamics of moving through each level requires bringing individual employees to the next level one by one and letting them help bring others to that level. The members join the “tribe” that is in the process of movement to the next level. Connecting people is critical, and  is the job of leadership.

There are great examples in the book of organizations that have made movement to level 4 and a few about movement to level 5. The concept of tribal leadership has some interesting application to lean workplaces and I recommend it to lean leaders.

I had a wonderful chat with a young man who attended a workshop I put on back in September 2012. Something I generally say in my workshops is that I am not fond of Six Sigma. I don’t typically explain my dislike very well, and this young man brought it up. I do run into a lot of Six Sigma trained green and black belts who are real optimistic about the model, and in my world of thinking, it’s understandable. Management recognizes earning a green or black belt as a promotable event. Employees are selected for the training, and it costs a lot of money to train a green belt. So managers screen who gets to participate in being trained. And they shell out a lot of money to give the employee a certification that improves their value in the marketplace of Six Sigma leaning managers. A green belt can cost as much as $35,000. A black belt may cost as much as $100,000. Then management selects projects to assign belts to. The team is selected to work with the belt, which ultimately responds to the belt as just another manager.

Lean is different. A Lean Executive may authorize positions or an office for promoting lean. Employees are then engaged in learning about lean as a culture of continuous improvement and respect for people. The tools used by lean management practitioners are not designed to boss team participants around through superior knowledge. Instead, the practitioner helps the team as a coach or sensei. Appropriate tools are introduced and the team members are taught how to use them. Team members collectively define the problem, gather the facts, and discover the value stream and brainstorm improvements. They implement the improvements using the scientific method (Plan, Do, Check, Adjust or PDCA). And they document the standard work so new participants in the process can learn quickly and effectively how to maintain the improvements. The employees in the value stream are responsible for maintaining the improved system. And they become accountable for any defects. Accountability means they must recognize when a defect occurs, and fix the root cause to eliminate the potential for the defect occurring again. If you are continuously trying to improve your process, you cannot revert to the previous norm.

The belt? The leave and move on to their next employer assigned project. The system they worked on may or may not improve. But in my opinion, the employees left behind have not been inspired to take charge of their value stream. It is just another mandated by management improvement that starts reverting to the previous norm.

The tools of Six Sigma are, in many respects, the same tools used by Lean Practitioners. My problem is not with the tools, but the philosophy the different tools create.

One of the hardest parts about leaving an organization you have led for many years is a fear of reversion back to the norm. Scientific management is tough to maintain without a lean leader. Most leaders come in, look at their first problem, and dive right in. Their perception that the first problem is fixed doesn’t take into account all of the other problems that may crop up because of the first fix. It’s hard to go through the lean steps. Go to the Gemba and see. Do the root cause analysis through the tools available. Make a process map. Confirm it and estimate the time for each step. Write the problem statement. Identify alternative improvement options through a collaborative process. It’s easier to yell at a couple of employees, and then ride them until it’s “fixed.”

Chugachmiut hired one of the Division Directors as their new Executive Director. With long experience in lean, the culture continues. One project that was nearing completion when I left was our “contracting” process. There are many small jobs that need to be done that doesn’t warrant an employment contract. A team of employees analyzed the process and came up with a fabulous solution. A process owner was identified. Standard work was established. Documents were drafted, reviewed by legal counsel and put into a format that inserted the necessary information. An approval policy was documented and is confirmed as the contract is negotiated, offered and signed. Accounting, the contracting party, the process manager and the chain of approval are all informed and involved.

The contract process addresses a variety of issues similar to the employment process. Independent contractor issues are addressed early. Duties and responsibilities are well defined. A contractor’s manual was prepared to inform contractor about their duties and responsibilities, including the submission of invoices and the presentation of documentation. IRS obligations are also addressed, as are workers compensation and liability issues.

One fact of existence for most organizations is the amount of work left undone. Failure to dot the I’s and cross the t’s occurs in most organizations. They are usually OK for a while because most government’s are equally inefficient and don’t catch many errors. But if they do, and they choose to make you an example, watch out. It’s better to use lean thinking to address issues. The work continue at Chugachmiut because the culture is maturing, and they have a leader who believes in it.

I thought I would write about some of the challenges I faced starting my first day on the job at Chugachmiut. One principle I truly believe in, but wasn’t very conversant with when I started, was going to the Gemba. My first day of work was also the day of the organization’s annual Christmas Party. I was told the Party was at the Sourdough Mining Company off of International Airport road and drove there through fresh show excited for the opportunity to meet some of my new staff and their families. I walked into the restaurant and over to the banquet room. I didn’t recognize anyone there. I went to the front desk and was told that we were in a room in the back, but I would have to go outside to get there. I did. Was I every surprised. There was a large plastic covered wood framed “building” in back. I went inside to a buffet. The tables were actually large wooden spools of the type used for transporting electrical wire for industrial use. Employees wandered in, ate and left. Industrial style propane heaters provided heating. The visqueen room was chilly and employees were wearing their coats inside.

I resolved to have better parties in the future. The next year we started a committee to plan for next year’s party. We divided our Christmas Party into one for kids and one for adults. One year we held it at the Anchorage Hilton Hotel with a live band. We actually had 3 people attending another party in the same area come over to ours because ours was more fun. Another party featured Karaoke, one of my then favorite activities. It’s amazing the number of talented musicians we had at Chugachmiut, including singers.

Our kids’ party featured Santa Claus with gifts for each kid, lunch, a cakewalk, a reading of The Night Before Christmas and other fun activities. We invited our staff from Seward to come up for the party and spend the night.

Building a team requires spending fun time together. After 8 years, we learned how to enjoy Christmas together.

After almost 9 years of introducing, implementing and learning about lean management at Chugachmiut, the experiment has ended. At the request of my board, I tendered my resignation on September 17, 2012 and starting a short vacation while I rest, recharge and look for that new great experiment to pursue.

When I was offered the job 9 years ago, I did not ask for a contract, nor did I want one. As I told many of my friends, I wanted to be able to walk if I felt the board was not supportive of my efforts on their behalf, and I wanted the board to be able to dismiss me if they did not feel I was meeting their needs. In that event, all I wanted was to be treated fairly and with respect. Although the end came quickly, I was treated fairly and with respect.

Leaving a place that I spent 9 years putting my heart and soul in was tough. I admit that. However, during the last 3 years of my tenure I was able to learn valuable lessons about healthy living and healing. Stress is an enemy of health, and while at Chugachmiut I was able to learn 2 therapeutic interventions that help me daily with living a life free of stress. Mindfulness is a miracle within everyone’s reach. Dr. Bob Stahl, who worked with Dr. Jon Kabat-Zinn at the University of Massachusetts, Center for Mindfulness in Medicine, Health Care, and Society, taught me mindfulness. By learning to focus on the present, and not reliving the past or rehearsing the future I stop escalating my stress response and achieve a state of peace. In the days since leaving, I have continued to achieve peace.

What the future holds is still a wonderful mystery. I am blessed to have my education, experience and health to guide me. And I have time to look for, and examine, options that might be available.

In the meantime, I am grateful for many blessings at Chugachmiut. The board gave me an opportunity to serve what my Tlingit protocol refers to, as my father’s people-the people of the Chugach. At one time my board was offended when I said this, but as I explained, it is an expression of honor. We value our father’s people. Much of our Tlingit protocol derives from this relationship. We must not do anything to dishonor our fathers. I pray that my work at Chugachmiut did not dishonor him. (Clifford Stephen Anderson, 1934-2001). The board took a chance on me in 2003, and I appreciate that.

I also appreciate the wonderful staff that worked with me and embraced the Lean Management journey we set for on in May of 2004. Those who stayed with me have a very comfortable and non-threatening work place. Employee satisfaction among employees who embraced service to the people of the region and our lean management was extremely high, and I leave knowing that Chugachmiut is a far better place than when I arrived. I will miss not having an opportunity to say goodbye to them, and since may read this blog, this must serve as my goodbye.

I am also grateful that the board allowed me to experiment with the company and change the culture. The pillars of lean are ingrained in my management style, and I hope I left the company respecting both pillars. Respect for People is, I have learned, the real core of Lean. Continuous Improvement can only be built in an atmosphere of respect for people, but boy oh boy, watch the company prosper if you can figure this out. In the 8 years I served I had the blessing of becoming one of the very few CEO’s in the nation able to transform an organization and its culture into what I hope is a great example of what Lean Management can do. As a non-profit that introduced lean into its core administrative services, health care, language and culture, wild land fire fighting, trust services, Head Start and myriad other parts of the business, we blazed a unique trail. I have written about many of the stories in this blog.

As I move on, I thank the board for respecting my contributions to Chugachmiut over the past 9 years. I thank my Executive Team for the great work they did to learn and implement lean. And thank you to the employees I have had the pleasure of leading for the years of sharing your lives with me. I hope you enjoyed the journey as much as I did.

And a special thank you to the people of the Chugach region, for your hospitality and support for many years. I want you to know that the culture at Chugachmiut changed because we wanted to serve you the best we could.

God Bless You All.

Here & Now, a program on National Public Radio, discussed the controversy in Chicago that led to a teachers strike. One of the key strike points is teacher evaluation. I have not completed all the thinking that I will be doing on this topic, but as a lean management student, I will weigh in anyway.

This exchange was apparently common during the long consulting and teaching career of Dr. W. Edwards Deming. “But if we eliminate performance appraisal, then what will we replace it with?” He would reply, “Try leadership.” So what is wrong with teacher evaluations?

One lesson I learned from Deming over 25 years ago was the problem created by failing to address variation. First, you have to understand what variation is. The plain and simple fact is that one half of all variable actions will be, by definition, above the median. And if one half is above, the other half must be below. We know that teachers come to their organization with a great deal of variation in their performance. All employees do.

A second is that systems are complex, and if you establish performance criteria, which you have to do in a performance appraisal system, it will be human nature to focus on the performance criteria to the exclusion of the rest of the system. I see this every day. Set a performance goal, and most of the resources flow to that goal.

Teachers have to make a living, and they chose to teach both to make a living and to have pride in what they do. A bad appraisal system, and all of them are bad, jeopardizes their living. A bad appraisal can ruin a career, for even a good teacher. All appraisal systems create fear in the employees who are evaluated. And the variation among evaluators also creates fear because of subjectivity. Some of us are not that social or likeable, and many evaluations are subjectively based on likeability.

Evaluations are deemed to be valid. Because they are subjective, their validity is subject to challenge. And the work done by each teacher takes place in an incredibly variable workplace. Some classrooms may be composed of very motivated kids, others of very troubled kids. Teachers and administrators should be working towards reducing the variability in the student levels of knowledge and skills. I don’t ever remember being taught how to achieve in a classroom. Assessment was non-existent. If I missed a core lesson, as I frequently did because of family related absence, there was no method for back filling that lesson. Often it affected all of my future learning.

Teacher evaluation is a terrible idea. Teacher development is a great idea. Teaching standard work doesn’t exist, but it could. Maybe I will write about that in a future blog.

3P is shorthand for Production, Preparation, Process. While developed for the manufacturing side of lean, it has significant application at Chugachmiut. We have been using this planning tool whenever we engage in a substantial remake of new processes. We conducted 3P events for designing a new clinic and integrating our behavioral health and primary care processes. We essentially look at everything involved in the process with a new perspective, and come to the best process design we are able to. Our challenge is to create a “virtual” Gemba that we can apply the 3P process to. We might actually be making some progress.

Our current 3P is selection of our HR software. Quite literally, HR software can improve some of our processes by a reduction in processing time of up to 80%. But, we don’t want to implement software without understanding its impact on our existing processes. Yesterday I sat in on review of one package under consideration. Here are some key points about the process and what we hope it will deliver.

Our HR staff was the core evaluator. Others had been invited but unable to participate. The employees who know our existing system the best were evaluating the software.

Chugachmiut processes were actually modeled during the discussion. Every organization is unique, and staff wanted to see the extent to which the software meshed with our processes. Too often the software does what it does and we have to fit in. We want the software to fit in.

Software deficits were noted and admitted by the vendor. This was helpful because we know that the demonstration is not a sales pitch. A good vendor will not try to minimize software deficits. If they are willing to admit one, they might be willing to fix one. This lives up to one of the two lean pillars: continuous improvement.

Support is critical. This vendor had multiple staff working on introducing us to the software, its capabilities and its deficits. One vendor we were considering really didn’t respond. We don’t want a vendor who cannot live up to one of the principle tenets of lean: “respect your people.” Why would we want to become one of their people if they won’t even come to see us (come to the Gemba)?

Management did not make the decision. HR staff, program manager, division director and executive director were all engaged in the evaluation of the software. We used some lean tools for the evaluation. We hope we made the right selection, but we at least have a factual basis to believe we have.

Years ago a division director made a decision to purchase one particular software package. It was a total disaster. The software did not meet our needs. Staff was ordered to implement it and had no choice in its selection. We paid tens of thousands of dollars for the packaged and abandoned it after a brief period of use. Our current method of software selection is so much better.

Another wonderful book has been added to my Lean Healthcare library. I am fortunate to know Mark and Joe personally, but that doesn’t influence this review of their book. At 361 8 1/2 by 11 inch sized pages, the book is full of lean knowledge, improvement stories and anecdotes about engagement of patients and staff in making a hospital great. As a lean leader in an organization myself, I was curious to see how Mark and Joe would present their story.

It doesn’t take long for the concepts of continuous improvement and respect for people to surface. Kaizen and continuous improvement underscore the first chapter. One cultural concept introduced very early was that failure is actually good for an organization, if they see the failure as a coaching opportunity and use the failure to improve their process. This teaching is contrary to Western management implementation, and as a consequence, many potential improvements are hidden away by employees who don’t want to call attention to failures in their value stream.

The book is also full of small tidbits of wisdom from many famous business leaders. Here’s one: “Most people spend more time and energy going around problems than trying to solve them.” Henry Ford said that, and not many Western style managers know that Ford’s concept of continuous flow is one of the foundations of lean thinking. Eliminate batching and encourage continuous flow. The book recognizes Ford’s contribution, as well as the contributions of Dr. W. Edwards Deming (Mark is a Deming disciple, as I am). I must say that one of my new favorite quotes is from Winston Churchill, who said: “Courage is what it takes to stand up and speak, Courage is also what it takes to sit down and listen.” From personal experience, I can tell you that active listening is one of the best learning tools available to an Executive.

Chapter 9 addresses the role of leaders in Kaizen, and cites one of the well know examples of a leader who learned that it wasn’t enough to accept lean as a management system. Dr. John Toussaint required his managers to participate in 2 kaizen a year, but did not participate himself until his mentor pestered him to become a real leader and learn what it was that he wanted his leaders to learn. He did, and ultimately participated in 14 full-length rapid improvement events. I have also participated in many improvement events, although I know find that we have so few longer events.

As a seasoned lean practitioner, there is one practice that St. Francis still requires, annual performance reviews. Although Dr. Deming’s admonition to eliminate them is discussed in the book, I encourage all lean leaders to learn as much as they can about the detrimental effect of annual performance reviews, and eliminate them. If St, Francis continues on its lean learning path, and the CEO is involved, they will ultimately come to this conclusion. In lean, our employees are who they are, and to compare them to a standard that is evaluated only once a year is not lean. As you develop standard work, and train your employees to that standard work, an amazing thing happens. They become more creative, enthusiastic and focused on their mission instead of trying to survive their workday. Too often, the ones who score well on performance reviews are those who are great at workarounds and at wearing the cape (borrowed from my friends at Virginia Mason as in, you know, “here I come to save the day.”) An annual performance review gives supervisors an excuse to ignore coaching and training. Employees in a performance review system learn quickly not to identify defects or to shift them to other areas where different employees are involved. There is no valid reason I can see for performance review.

This post is getting quite long, but let me add this. Mark told me that they would publish an Executive Guide to their book. Don’t get it. Get the real book. If you are too busy to read the book, then you need it the most. As I have found in my organization, the more lean permeates the organization, the more time you have to lead, instead of pretend to fix. I have worked in organizations where the CEO pretended to fix by yelling at us subordinates to fix it or else. Never worked. Get this book, learn from it, and fix things for real. Then keep improving them, for real.