In the Lean Business System group on Linked In this month, Paul Lowe of Brush Transformers Ltd., Nottingham, UK, asked, “Do SOPs hinder creative thinking which can ultimately stifle innovation?” The short answer is “No.” Standard work, creative thinking, and innovation are three separate concepts, all necessary in any healthy organization. Let’s look at how they relate to one another in an example at Bizmanualz:

Sometimes customers call Bizmanualz inquiring about our policies and procedures for sale, saying that their companies need documentation to increase their quality and gain compliance. Of course, we’re able to provide them with policy and procedure templates. We also suggest that quality is the result of teams working out the best way to do something, and quality is supported by documentation. Sometimes we hear, “We don’t have time to develop our own processes or documentation.” So, they start their project with our templates and we make it a point to check back with them later.

Focus on a small number of SOP’s. If it seems that your teams don’t have time to develop or even customize SOPs, they’re probably trying to document way too much. Only the work that repeats and is subject to continual improvement benefits from standardized documentation. Work groups can be overwhelmed by more than a handful of SOPs; anything more than that will be referenced rarely, if ever.

Developing SOP’s is creative. Developing SOP’s requires a clear sense of what activity is essential and what is nonessential, or “non-value added”.  With that understanding, you can create a focused procedure. Improving an SOP is also creative, in that a refinement must be conceived that drives out even more nonessential activity. The revision has to be drafted, reviewed, and released. It’s an iterative, creative process.

Process improvement will buy you incremental improvement. You might pass along single-digit cost reductions to your customers, or response times might improve by double-digit percentages. But even if your customers love every improvement, incremental approaches will only get you so far when customer’s expectations fundamentally change.

When your competitor delivers in seconds what takes you days, or sells for $100 when the going price is $1,000, the customer’s expectations shift and the rules change.

Like it or not, game-changing innovation must be on your agenda. Incremental improvements won’t get you there. So don’t confuse creativity applied to incremental improvement with innovation, another form of creativity entirely.

At Bizmanualz, we’ve applied incremental improvement to our policies and procedures business, improving for years. But now customers want tools to manage their SOP’s, policies and procedures. So we had to innovate and find a way to deliver what customers want.

Focus your innovation by asking your customers why they buy your products

We focused our innovation by asking our customers why they purchased our policies and procedures. As mentioned earlier, one reason is that they don’t have time to develop their own. But more often customers cite organizational improvement as their main reason. From many conversations we have gleaned that customers want to implement a system for continuous improvement and compliance.

Policies and procedures documents, per se, are not a system of continuous improvement. In a system, procedures are continuously reviewed, revised, and updated. New issues need to be identified, now procedures written. Old procedures need to be replaced by new procedures. With a deeper understanding of our customer’s needs, we came to understand the direction that our innovation must take.

Customer needs bound our innovation

Our customers told us they wanted a system for managing policies and procedures, so Bizmanualz is currently testing an on-line document management software for driving compliance, among other things. Looking carefully at customers’ purchase behavior and listening to what customers have told us has provided important boundaries for our creativity so that resources can be applied effectively. No amount of creativity will compensate for a lack of focus.

Our initial software release focuses on the document management features that will help our customers transform their static policies and procedures into a dynamic management system. For a discussion of features, please see our Bizmasterz web site. Also, see our frequently asked questions (FAQ), or call us at (314) 863-5079.

Incremental improvement helps you do a better job in your current business, but it won’t help you when the rules of the game change and innovation is your only option.  Creativity is a skill that you bring to work every day whether you’re taking small steps of making big leaps.

Remember when Ford’s tagline was “Quality Is Job 1″? No? Well, maybe this will jog your memory.

Back in the 1980’s, Ford, GM, Chrysler, and AMC¹ were quickly losing ground to Japanese automakers². Rumors that U.S. auto workers were deliberately sabotaging cars on assembly lines gained traction; these rumors were alleged to have been started to divert attention from the obvious and growing inequities between American and Japanese vehicles.

Fact is, American car buyers were turning away from domestic cars simply because their Asiatic counterparts were cheaper to buy and much cheaper to operate. The bad reputation American cars were saddled with then — a consumer perception of poor quality — persists to this day, even though Toyota — which leapfrogged all American automakers in 2007 to become the world’s #1 vehicle producer precisely because of its reputation for quality — has turned out to be the modern-day emperor with no clothes.  It looks as though quality took a back seat to profits.

Then there’s BP, whose failed wellhead in the Gulf of Mexico “will live in infamy”³, mainly because it appears the company would not spend a little on safety because that might eat into profits. This story has been thoroughly covered in the news, on blogs (including ours), and in company emails.

Now add the computer maker Dell to the list. Dell is now in court for allegedly selling millions of defective computers from 2003-2005 — computers that it supposedly knew were defective — hurting companies that relied on its reputation for quality manufacturing and customer service.

What’s the common thread running through all of these cases? Corporate hubris? Maybe.  A message running throughout these companies that “quality be damned — just get it out fast and make a big profit”? Quite possibly. Is their profit more important to you — the consumer – than a quality product and your satisfaction?

When do we, as consumers, demand that quality be placed before price? It catches up with the producer — eventually — but why wait for the inevitable? Why chase the elusive promise of “newer and better”? (Look at what Apple’s going through with the iPhone 4.)^{4, 5} Also, when do we, as corporate citizens, begin to see that our responsibility to give our customers quality isn’t incompatible with healthy profits?

It’s often said that we get what we deserve. If you think you deserve better, demand — and hold out for — quality.

Notes:

¹ Yes, they were still around, though not for long. AMC was put down for good in 1988.

² Except for body rust; that problem plagued Japanese auto makers for decades. My first two new vehicles were Japanese-made and I logged 18 years and several hundred thousand miles between them. If not for the severe case of “car cancer” they both caught, I believe they would’ve given me 20 or more years, combined.

³ My apologies to the late Franklin D. Roosevelt only.

⁴ http://abcnews.go.com/Technology/apple-iphone-hit-class-action-suit/story?id=11066239.

⁵ http://news.cnet.com/8301-30677_3-20008919-244.html.

Further Reading/Viewing:

1. Enderle, Rob, “Dell and the Cost of Cover-Ups“, IT Business Edge post, 30 Jun 2010.
2. Evans, Joel, “Is Apple Covering Up the Real Problem with Its iPhone?“, ZDNet blog post, 4 July 2010.
3. “Product Recalls“, Back in Black, The Daily Show, 6 July 2010.

One way to be sure to eliminate a problem for good is to identify the root cause and eliminate it. In the world of quality, we have this easy to use tool for getting to the root cause of a problem.

The “Five Whys”, simply put, means you state the problem and keep asking why until you’ve identified the root cause. However, using the Five Whys means the problem has occurred. Isn’t it better to prevent the problem from happening than correct it after the fact? Preventive action is infinitely preferable to corrective action.

I’ll give you a “for instance”. Someone I know recently left a wireless provider she’d been with for several years. What upset her most was that when she canceled, the customer service rep (CSR) didn’t ask why she was leaving. She might have reacted positively if the CSR had offered her an incentive to stay but he didn’t, and she’d pretty much made up her mind by then that they weren’t worthy.

If you can’t give somebody a reason to stay all along, your problems aren’t going to be magically solved by root cause analysis or any other corrective action tools. A root cause analysis may help you solve your problem, but why let the problem happen in the first place? Why not head off the problem? Take an active interest in your customers, rather than sit back and wait for things to happen.

Most customers will walk away from you without complaining. They don’t announce that they’re taking their business elsewhere: they just do it. They don’t give you a chance to explain yourself because they feel like they’ve been let down all along.

Dissatisfaction isn’t the result of a one-time occurrence. It happens over a period of time.  If, from the outset, communication is poor or nonexistent, the foundation for customer dissatisfaction is being laid. If you don’t continue to make your customer feel valued and welcome, the relationship that might have been never is.

Next, I’ll be looking for an answer to the question, “Why don’t customers complain?”, and I’m asking for your help. Are you more likely to complain to your vendors, or do you keep quiet and look for an alternative right away? What if you don’t have an alternative? What do you do then?

Thanks for your insights, and best wishes.

We had a customer ask us this week about obtaining “ASO certification”. Here, in a nutshell, is what we said in reply:

“We’re unfamiliar with ‘ASO’ certification (one of my cohorts “googled” the acronym and didn’t think any of the results fit, so we assumed they meant “ISO” - if we’re wrong, we’ll hear about it). However, if a company wants to obtain ‘ISO’ certification, it has to do the following:

1. Develop a quality management system (QMS);
2. Implement the QMS and collect data;
3. Review the data collected and use it to drive improvement;
4. After several cycles of the QMS, you should have an indication of whether it’s working. When you’re sure it is…
5. Apply for a certification audit.  Your country’s ISO member body should have information on certifying bodies, registrars, etc.;
6. A few weeks after you’ve been through the audit, the certication auditor will tell you if you passed (or if you didn’t, where you were weak and need improvement). If you passed, ring the bell! Have a party! Tell all your friends (Facebook and real), family, and business associates! Your Quality Management System is now ISO certified! And…
7. In the event you didn’t pass, make the necessary changes (at the bare minimum) and reapply for a certification audit.

One thing we didn’t tell the customer initially is, “Don’t have unrealistic expectations.” Developing and utilizing the QMS — as well as the subsequent audit — are going to take time and effort.

If you’re doing it purely for marketing’s sake, if you think you can knock out a QMS and pass a certification audit in a matter of months…you’re in for a load of grief. You’ll never get a solid QMS under you AND you’ll never make deadlines, because they’re unrealistic.

If you build a QMS because you want to provide your customers with the best everything — if customers are the reason for everything you do, including the QMS – you’ll take the time you need to get it right, you won’t set unrealistic goals and deadlines, and you won’t drive yourself crazy trying to figure out why you never meet expectations.

OK, so they’re not really easy steps…but the concept itself isn’t at all complicated. Each of the steps above is broken down into successively smaller pieces (things, activities, people, etc.) but if you start with the “big picture” and keep the big picture handy, you’ll do fine. Refer to it continually as you build. That’s where a lot of companies go wrong — they focus on just one part of the whole story as if that were the whole story, like the blind men and the elephant.

Keep your perspective. Remember — you’re in it for the long haul.  Best of luck in your QMS journey, and let us know if you’d like our help.

Let’s face facts. Most companies are never going to be innovators, and that’s fine. Most would rather lead their respective categories, anyway, and they lead by doing most of the important things — all coming under the heading of “customer needs and wants” — consistently better than their competitors.

What are the important things? Give your customers what they want (which varies from one customer to the next but can be lumped into one category, “value”). Give it to them when they want it and don’t make excuses.

Value translates to “quality”, which you can give a customer from the outset if you’re lucky. Anyone can get it right at least once but what most of us call “quality” comes about only through establishing consistency in a process. And consistency can only be determined over time.

So, how do you ensure consistency? Keep working at the process. Keep refining it. Implement “best practices”.  This will, at best, let you “keep up with the Joneses” (and Toyodas and Fords, etc.).

What if keeping up isn’t good enough? Yes, the silver medal is nice but wouldn’t gold…or platinum…be even better? How do you get ahead of the pack? How do you differentiate yourself in a way that really matters?

Well, what’s the difference between a company that successfully meets or exceeds most stated customer requirements — again, not a bad place to be — and companies that go beyond the known and measurable? The difference is marked by a willingness not to be defined — or confined — by conventional thinking. Innovators don’t think a subject to death: they act decisively.

Of course, they get it wrong a lot of the time but they don’t fret about their mistakes. They learn from them, and they keep moving.

Sure, “mistake-proofing” has its rewards. Mistake-proofed organizations are more certain, they’re more measurable, and they’re often profitable. Innovative companies aren’t afraid of mistakes, because they know that’s how we learn best, as companies and as individuals.

In fact, it’s when we get into a “rut” of consistency that we often lose our gift for innovating. Consistency is not necessarily better than creativity, and vice versa. Consistency and creativity need not be mutually exclusive, either…so we’d like to think. After all, innovation and change can go hand in hand. What do you think?

Can innovation and “best practices” coexist?

* * * * * * *

For More On This Subject…

• “How to Kill Innovation: Keep Asking Questions”, by Scott Anthony, HBR Blog Network (25 Feb 2010) - http://blogs.hbr.org/anthony/2010/02/want_to_kill_innovation_keep_a.html
• “Does Repeat Collaboration Really Kill Creativity?”, by Andrew O’Connell, HBR Blog Network (1 Mar 2010) - http://blogs.hbr.org/research/2010/03/if-repeat-collaboration-kills.html

Thanks to recent reports across all media (ex., “Toyota’s Slow Awakening to a Deadly Problem“, 1 Feb 2010), we’re beginning to see the enormous scope of the acceleration error that has prompted the recall of millions of Toyota vehicles.

Toyota, a company long considered a paragon of lean manufacturing virtue (hence, its assuming the mantle of “World’s Largest Car Maker” from GM), appears to have a serious defect in many of its highest-selling products. “Unintended acceleration” has resulted in hundreds of accidents (reported so far) and the loss of untold lives. In the last two weeks, Toyota shut down the production lines of some of its most popular vehicles to address the situation.

Could it be, as some have suggested, that Toyota has been “hoist with (its) own petard”? Or, to put it another way, was Toyota done in by the very system designed to make it efficient and prosperous?

Just today (1 Feb 2010), Toyota “officially” announced it had found a way to correct the problem (one that goes beyond replacing or doctoring floor mats), but many people aren’t satisfied the manufacturing giant has found the real solution. And even if it has, it will be a long, long time before Toyota recovers from the damage it has done to its reputation.

Questions abound, including “Why didn’t Toyota conduct a thorough investigation when it first learned of the problem (back in 2007?)”, “Why did the company stay with the ‘floor mat’ explanation for so long?”, and “Why didn’t safety bodies (like the NHTSA) do more when they realized there was a problem?”

Toyota’s TPS system appears to be in need of a corrective action — the question is, “Where?” Is the problem in manufacturing only? Customer service? Marketing? Design & development? Outsourcing? Or, did Toyota get too big for its own good?

Toyota’s not the only organization incriminated in this scenario. The National Highway Traffic Safety Administration doesn’t come out of this situation unbloodied and unbowed. There are allegations that it could have and should have done more to keep the defect, whatever its root cause, from getting out of control.

In a half-hearted defense of NHTSA, they appear to have been ahead of many of their counterparts around the globe. Recalls in Europe and elsewhere followed the recalls in the US. Furthermore, every government body is hurting. There isn’t anything they don’t need — the authority to inspect and recall, or enforce laws; more people; more training; and a degree of autonomy, so they’re not called on the carpet (truly, no pun intended) for doing their job.

No amount of corrective action, though, can begin to make up for the people who’ve already lost their lives. (Interesting how in a situation like this, we tend to say, “Lives were lost needlessly“, when the opposite is true. Too many times, lives have to be lost — often in numbers — before action is taken.)

Lessons we might take from this at this “early” stage? One: corporate management is increasingly susceptible to hubris as a company grows.   Maybe Toyota was afflicted with the same disease financial services caught — we haven’t seen a problem in so long, they must all be licked. Not that corporate “attitude” is the root cause of Toyota’s problem, or even a proximate cause, but the “floor mat” story should have given us all pause to reflect.

Two: nothing can completely take the place of testing and inspection. We have safety standards, regulations, etc., in place in the aerospace and food businesses. For better or worse, more is on the way. Why not make the automotive world jump similar hurdles (i.e., make safety mandatory)?

Three: the best designed, most rigorous systems eventually come apart when they’re not paid attention. CAPAs, like anything else in your Quality Management System, have to be applied continually in order for your company and your system to improve. Toyota has said it in so many ways: “Satisfactory” isn’t.

So, what happened? Your ideas?

(P.S. - Not like Toyota needed more bad news, but now they have a braking problem on the newest Prius. What do you think of that?)

This week, I responded to an e-mail from a Bizmanualz reader who asked the simple question: How do we get to best practices faster? They wanted to know how best to use our products and services to address feedback from their sales department — that their processes are too long and, therefore, hamper sales. Bizmanualz will engage to whatever extent suits a customer’s need and budget. There are three options to choose from:

1. Buy whatever of our published products that you think you need or that we might recommend;
2. Start with our introductory process optimization services (outlined below); or
3. Buy the CEO series and contact me to buy two days of training to help you get started on your own.

Get coaching and personal service with our process review (option #2). Current pricing is shown in our shopping cart. Contact me for this service:

Review your current process. What are you doing now, and what do you want to improve? Here, we clarify your current work process so that we can measure improvement.

Compare your current process to Bizmanualz best-practice processes. No need to re-create processes when we already have them. We will update your processes to our best practices, saving you the trouble and expense of doing it yourself. Streamlined process maps are simple to understand and easy to implement.

Define the goals of your improvement and provide a roadmap for implementing change. Some example improvement goals:

1. Simplify the process so that they will be used by employees;
2. Increase the number of sales leads from the level identified in the current state; and/or
3. Increase the number of leads converting to sales or other desirable actions, such as signing up for a newsletter, obtaining a sample product, or requesting contact.

When you employ Bizmanualz to lead your improvement project, we customize a process for you from our extensive library of best-practice processes. Best practices are included. This saves you time and money on research and development. Our approach is to identify incremental improvements that involve and can be sustained by your current staff. Improvements are realistic, achievable, and sustainable so they’re achieved consistently and benefits add up fast.

Process Implementation Phase

I’ve described the process review engagement where the scope and pace of improvement is set.  Implementing the improvements is the next phase.

In the follow-on process implementation phase, Bizmanualz processes are delivered in all the formats — with the checklists and forms — that your people will use to follow through and practice the improvement. For the do-it-yourself-er, most of the process map formats and examples discussed here are described in a recent Bizmanualz article and commentary series, starting with “What is a Process Map?“.

A Bizmanualz quality consultant, with supporting quality engineers, writers, and communications professionals, will customize maps, job aids, and other tools for your project.  Read about the types of process maps and other tools we deliver on our site. The do-it-yourself-er can also read about project management tools and use them to manage their own project.

Anyone can comb through our manuals-product web site and select individual policies, procedures, and forms manuals or they can choose collections such as the CEO Company Policies and Procedures set.  Most CEO Series customers will benefit from a day or two of training and review, where we’ll introduce your employees to the books and tools in the CEO series and show them how to get started.

Contact me, Dan Davison, for more information about training to use the CEO series product.  Do you have comments? How can we help? Please write to me directly, or leave your comments below.

Thank you.

In a blog post I recently read, the writer said that in America, when someone says “our policy is…”, the policy is stated and adhered to but in his country, “not so much”. He went on to say that the cultural signals are different between the two countries.

The writer goes on to suggest that in his homeland, they seem to operate on the premise that if most people are told, “We can’t do that…it’s against our policy”, they will not question the assertion and will just walk away. But, if you argue forcefully and with conviction, they will comply. In America, you don’t have to argue - they do what they say.

I’m happy he’s satisfied with the way things are here. I would argue, though, based on my many and varied experiences, that policy as written and policy as executed are two distinct branches on the same tree here, there, and everywhere else. And the wrong branch is dying.

I’ll give you an example: I once did business with a certain purveyor of wireless products and services before I became an employee. Once I became an employee, I naturally enjoyed a sizeable discount on everything wireless.  The service wasn’t that great but for the price, I felt I could bear some pain. A few years down the road, the company ”rightsized” and I became an ex-employee.

The way to gain a good reputation is to endeavor to be what you desire to appear.
Socrates

At the end of my wireless contract, I looked at what the now ex-employer wanted to charge me for its goods and services (retail prices had gone up quite a bit).  I asked at a local office if my being a steady-paying customer for over eight years counted for something. What would they do to keep a good customer?

They said they were powerless to do anything - it was driven “by corporate”. I asked them to check with A/R and even offered to get my credit report to show I was a customer worth hanging onto. They wouldn’t deal, though.

I decided to take it to the corporate office. Sure enough, they were as indifferent to my “plight” as the local office. They said, ”If we do it for you, we have to do it for everybody.”

Their stated policy is to “give customers exceptional service” but what their actions say is “…as long as it doesn’t cost us up front.”  Their implicit policy is to treat customer service (or customer satisfaction) as a necessary evil.

The time-honored maxim — that it’s cheaper to keep customers than it is to replace them — seems to have lost its meaning. Perhaps, too, the concept of “cost control” has become the top priority…to the exclusion of everything else.

What do you think? More importantly, what do you tell your customers, and what do you do?

We have heard from several customers about the need for implementing ISO in their unique organizational settings.  Based on this feedback, we are currently developing an ISO QMS implementation guide with tools applicable in different business settings, including service organizations. It will augment our existing ISO 9001 QMS Procedures Manual, and will help answer questions like  ‘How do I get started?’ and ‘How do I roll out ISO in my company?’

As a publisher and professional services firm (not a manufacturer), we have seen benefits from implementing quality methods. We have clear metrics that we measure regularly and are always looking to improve our measurements or come up with better metrics. It is our belief that an implementation guide will provide practical implementation steps to organizations that want to work on their own with little or no help from consultants.

The initial release of the implementation guide, scheduled to be released in the first quarter of 2010, will include the planning, design and implementation tools we have used for our clients–and for ourselves–to become ISO-certified. We are also adding some additional tools and explanatory materials prepared specially for the implementation kit. The tool sets incorporate knowledge amassed over almost ten years of research, use, deployment at client sites, and publication of quality policies and procedures. Check out our recent article & blog series on process maps and current series on project management for more insights into what will be included in the implementation kit.

More companies will benefit from continuous improvement

ISO has helped Bizmanualz cultivate the belief and practice of continuous improvement. By using the “Plan - Do - Check - Act” methods on which most quality systems are built, we have focused on improving underlying processes and avoiding problems in the future. Our process orientation reinforces teamwork: we’re all in this together to improve the process that will create ever-better, sustainable results not only for our customers. By releasing the tools that we ourselves use  internally and for clients, we aim to help other organizations implement quality systems with equal structural support.

The ISO implementation kit will be as easy-to-use and self-explanatory as possible. To support this goal, we are developing a test program in which we will work with selected companies to test and use our implementation kit. If your organization has immediate plans to implement or improve its ISO or related quality system, please contact us through the Bizmanualz website or by commenting below this post. We will provide the implementation product at no charge for test customers in exchange for regular phone reports and occasional access to your facility so that we can learn from your use of the product.

For now I can recommend our ISO 9001 QMS Manual. While it is written from a manufacturing perspective, the principles, as well as many of the specific policies, procedures and forms, can be generalized for a service business. And it has been recently updated to conform with the ISO 9001:2008 standard.

Are you implementing a quality program at your organization? What will be your first step? How will you get started? What do you think should be in our implementation guide? Would you like to try the guide and let us know how to make it better? Leave a comment below or contact me directly at  dan@bizmanualz.com .

Recently, the Bizmanualz sales team used a “swim lane” map to agree on the use and timing of its new sales tools.  Before that, though, we collected all of our sales presentations, product descriptions, proposals, and contracts and used them to update our sales implementation binder.  We not only created this physical “home” for the information but we duplicated it on our network.  This binder was designed to help us standardize how we talk about our services.

Even with the sales tools collected and standardized in this way, we were getting more variance than we were willing to accept in terms of the length of the sales process, final configuration of the service, and the customer’s expectations.

Looking for root causes, we determined that the sales tools we had created were being deployed at different stages in the sales process by different people.  Though we had information on when was the best time to use each tool — for example, we knew it was counterproductive to send a written proposal before confirming a shared understanding with the prospective customer, and we’d developed one-page illustrations and short slide decks to help with that – the issue of correct timing had not been adequately communicated to everyone.

Bizmanualz’ sales team worked together on this swim lane map to arrive at a consensus on when to deploy proposals and other sales tools (click graphic to enlarge).

Timing is Everything

We had not clarified when to use each tool, so in practice our sales process had not been fully implemented.  Getting the sales team in on creation of a swim lane map helped us hash out the best timing and implementation of each tool. We agreed that implementation would be based on customer behaviors that we could observe and document.

 

Our swim lane map shows us establishing a shared understanding with the customer using a visual presentation, and also gaining acceptance to configuration and price. Only then do we propose terms and conditions.  Has a shared understanding been established? What have we observed that confirms our perception? Have we received a written correspondence? Yes: issue proposal.

By mapping it out, we could visualize the implications of using the wrong tool at the wrong time. We could see that offering a formal proposal too early could throw us into a loop of confusion, delays, and revisions. By confirming expectations one step at a time, we could literally see on the map that we would be driving up customer satisfaction, one of the key metrics we use to run the company.