The Language of Metrics: Lean Muppets Series Post 4

It’s like a really heavy iPhone.

muppet brrrring scale

Silly aliens!In business, we mistake inanimate objects for our customers, our employees, our teams, and everyone else. Our inanimate objects are metrics. Just like the telephone, they are things we make to convey information, but we make a key mistake: we believe that metrics are in some way arbiters of reality.But just as we are what we eat, we become what we measure.The aliens here are vice presidents coming down to talk to the workers.They descend in their ship and approach the area in which their intelligence tells us the workers reside.In lean parlance, they are going to the gemba.Now, here's the really funny bit: the telephone really isn't the metric. The worker is the worker.These are workers who have been supplying management with meaningless statistics that measure output on a dual axised BRRRRRRRING scale. The longer and louder the BRRRRRRRING the better.The managers approach the worker who, after getting three consecutive raises for BRRRRINGing like there's no tomorrow, is on the fast track to becoming an alien.  That worker, after a time, does everything to satisfy the metric - to the point that it becomes the only way he can conceive of doing his job.Initially, the managers approach the worker and try to discuss things in English, then hunt around for other languages, only to learn that BRRRRING is all anyone can say.And the scary part is the end, where they are happily BRRRINGing along with the employee, because now it's the only thing the company can say.In his 14 Points, Deming said "Eliminate management by numbers and numerical goals. Instead substitute with leadership."  The more we rely on metrics to tell us what happened, the more we distance ourselves from the actual work being done. We lose sight of changes in context and cannot deftly react when necessary. Further, we build games and systems that reward paying attention to the metric and not the success of the company.People will care about what the system cares about. If your company has reams of reports generated daily or weekly, you are not "managing by the number" you are building a culture of BRRRRRRING.This is fourth in a series of Lean Muppet posts. For a list of Lean Muppet posts and an explanation of why we did this, look here. -> Lean Muppets Introduction

Sunk Cost, Loss Aversion, and Cannibalism: Lean Muppet Series Post 3

After losing an “I” and his tie, this New York baker is ready for Cookie to leave.

I cannot count the number of times I, as a consultant, have been called in to diagnose an obvious problem.Cookie Monster...now he has an obvious problem.While we would all like to see many of our current television hosts eaten by monsters, it's clear to even little kids that Cookie Monster would be better served by eating pie than Guy Smiley.Pie is the optimal solution. But at least as far as we see, Cookie Monster has chosen Smileycide as the solution to his problem, and is committed to it.We often identify a solution, create a plan, then commit to a number of actions to achieve that plan. With each action we take, alternatives psychologically become more unpallatable.You can see in the future, Cookie Monster catching up and actually eating Guy Smiley and then saying, "Hmmmm, me no like eat Guy Smiley after all." But each time Cookie Monster chases Guy, he finds that he's invested more of his time and energy into Project EatGuy and is less likely to stop.Psychologists and economists call this the "sunk cost fallacy," and even though every MBA student in the world learns about it, we still see it happen.In lean manufacturing this is a specific type of waste called "muda," work that we do that adds no value.  In this case, chasing something considered inedible is not going to result in a delicious snack.But I'd like to focus on a different lesson - one more fudamental that, if we strive to solve it, we'll eliminate muda anyway.Lean teaches us to avoid inventory. Inventory is the stuff we create, are in the process of creating, or are the parts for the things we anticipate creating.I remember in 1979 my father was involved in creating a business incubator in our hometown called Triangle East. It was in the abandoned Geer Mobile Home plant. All my father's projects were family projects and so at one point I found myself going through the old plant cleaning up. The was inventory everywhere - desks, chairs, doors, bolts, and so forth. Tons of inventory that we either recycled (such that we could in 1979), threw away, or served as fascination for a 14 year old boy. All of it constituted waste because it would never be used to biuld a mobile home.In knowledge work we build up conceptual tons of inventory. Reports, files, software code, policies, processes, procedures, half explored ideas, concurrent tasks... all these things decrease our ability to complete work or to ship products.But the more conceptual inventory we create, the more sunk costs we perceive. The more sunk costs there are, the less likely we are to improve. Psychologists call this tendency "loss aversion."We can illustrate this idea with this ridiculous equation:

Y = Cookie Monster's hungerG = the perceived value of eating Guy SmileyCx = the number of times Cookie Monster chases Guy around the counter

Cx * Y = G

Note that while the actual value of eating Guy Smiley will be zero, the perceived value of eating him increases with every iteration.What's worse is that if Cookie's goal is partially achieved, he is unlikely to learn from it, but will actually become more entrenched. So, say he catches Guy Smiley and eats an arm (who knew the Muppets could be so dark?), he will work harder because loss aversion is telling him "you missed the tasty part."Our stakes may be higher in the non-felt world, but the scenarios are no less ridiculous. Pets.com is the classic example where free shipping of discounted cat litter attracted tens of millions in VC money and much more at IPO. Anyone not caught up in dot com fever could see that building a business model around shipping bags of clay (maybe the only thing worse would be bags of lead) was not likely to produce profits.Another quick point here is that while Cookie Monster was never the brightest bulb in the Muppet marquee, he was and remains a nice guy. By nature he does not cannibalize other muppets. He had simply bought into an idea and found himself in a sunk cost spiral.Always look for the pie.This is third in a series of Lean Muppet Posts: For a list of Lean Muppet posts and an explanation of why we did this... look here -> Lean Muppets Introduction

Failure Demand and Unthoughtful Production: Lean Muppet Series Post 2

The Ernie Production Unit and the Bert Client Clash Over Delivered Value

simon marcus

Ernie and Bert have issues. Because Ernie and Bert are archetypes. They represent the Yin and Yang of the Human condition.It is reasonable to expect that anyone reading this is human.In this video, Ernie is a standard production unit. At times he is painting (development), other times he is reassuring Bert that the product will be done on time and to spec (product manager or sales), at one point he presents the finished product for use (installation or delivery).Bert goes through some stages in his position as the customer: thanking Ernie for his services, then becoming antsy when the schedule might overrun, then frustrated when the product is defective.As Bert goes through these stages, he places pressure on the production unit. When the delivery of the defective unit is made however, the customer's understandably righteous indignation  "ERNIE! THAT DOESN'T LOOK ANYTHING LIKE ME!!!!"  is met with surprise by production "It doesn't, Bert?"Development built a product for their idea of Bert, and not the actual Bert. "I must say that it looks exactly like you Bert, I did a fantastic job," Ernie says on delivery.(Apparently, they thought Bert was my good friend Simon Marcus...who looks a lot like the picture on the right).Not showing the product to the client while it was in production coupled with the high cost of change leads to the only conclusion - production must physically change the client to conform to the product. In this case, turning Bert the Muppet into Simon the COO.This radical alteration of Bert is funny and it even makes adults laugh, but we do it all the time in business. We give people what they don't want and then we spend money in support or training or advertising to counteract our shoddy or unthoughtful work. This is what John Seddon calls "failure demand" - the spending of resources we engage in to make up for the failures we build in to our own products.When we build shoddy or unthoughtful products, they cost us - in money, time, and consumer good will.

Variation Can Help: Lean Muppet Post 1

Okay, so there's nothing about this video that isn't cute. And that's fine. But what does it have to do with Lean?One of the most important lessons that Lean can teach us is how to appreciate variation and make the most of it.When Jim Henson and this little girl went on set, it was to create a product - an item of value. The task, as originally written, was to create a short video where Kermit and the little girl sang the English alphabet. A simple progression of 26 letters. So simple that variation was inconceivable and no other product was possible.But little girls do not have SixSigma Black Belts or PMI certification (thank heavens!).So the cameras roll and the little girl suddenly becomes a point source in variation, undermining the original scope of work and putting the project in danger. She keeps injecting "Cookie Monster" in the alphabet, as if he were a letter in the English Alphabet.Cookie Monster is not a letter in the English Alphabet.The little girl thinks this is very funny. Kermit does not, because Kermit is a project manager locked into one irreversible type of value.Jim Henson, operating Kermit, knows that he can use rewards and penalties to get the product he wants. He knows that the little girl is really excited to be there with Kermit and that taking Kermit away will get her to settle down and sing the alphabet. So Kermit storms off.But rather than saying "Kermit, come back, I will sing the alphabet!" this little girl finds the true value - the honest value - and says with a sincerity that anyone can admire:"I love you!"And, even in the video, you can actually feel the impact this had on Jim Henson. Another day at the office turned into a beautiful gift.All because of variation.The real beauty here is that even though this product was fundamentally broken -  fundamentally it did not achieve its initial goal - Jim and the people at Children's Television Workshop thought this lesson was worth sharing. They saw that through variation in their youngest of knowledge workers, there was innovation and inspiration.There was value in variation.

The Lean Muppet Series: Introduction

I am 46 years old (at the time if this writing, it would be kind of nice to just keep on being a healthy active 46 year old, though).Being 46 year old and American, I was raised by three parents: Don and Jennifer Benson...and Jim Henson.Like most kids when I was growing up, I lived with Muppets. On Sesame Street, on the Muppet Show, in the Muppet Movie, even on Saturday Night Live a few times. Muppets like Kermit, Ernie, Bert, and later Yoda are as much a part of my generation's psyche as anything can be.But as we've aged, we seem to have lost sight of Jim Henson's vision, his message, and his passion. In this Lean Muppets series, I hope to re-introduce a lot of us to Jim's message and show how we might either learn from or be actually living out some classic Muppet skits every day.This series is for everyone who works in an office, has an idea, follows Lean / SixSigma / 5s / Lean Startup / Personal Kanban / Kanban for software development / Lean medicine / Lean government...you see how adults complicate things?This series is for everyone who feels dissatisfied, but would rather not.This series is for people wondering why their business is broken, and who are tired of non-Muppets telling them why.In a recent (April 2012) interview with iSixSigma magazine, I was asked what I thought Lean was all about. I talked about Deming's Theory of Profound Knowledge. (I will post a link when it is published).When I thought about this a few days later while enjoying a bout of jetlag in a Swedish Hotel, I realized that Deming's vision was Jim Henson's vision...and it's a vision I too share.To engage my hubris muscle, I will now say what I believe that distilled shared vision is:

If we care, we create.

If we create, we improve.

If we improve, we live.

That is my vision. That is Lean. That is Muppets.How to implement the vision? Here come the guides (updated as they come out over the next month):

1. Variation Can Help: Lean Muppets Post 1

2. Failure Demand and Unthoughtful Production:Lean Muppets Post 2

3. Sunk Cost, Loss Aversion, and Cannibalism: Lean Muppets Post 3

4. The Language of Metrics: Lean Muppets Post 4

5. You Are in My System: Lean Muppets Post 5

6. Root Cause Analysis: Lean Muppets Post 6

7. Flow, Cadence, and Slack: Lean Muppets Post 7

8. Practice, Practice, Practice: Lean Muppets Post 8

9. Customers, Respect, and Value: Lean Muppets Post 9

10. Rules, Motivation & System Thinking: Lean Muppets Post 10

Disclaimer: Jim Henson and the Muppets are a global treasure that we all share in the legacy of. We learned to count, spell, cooperate, and respect each other through Jim's work. Modus Cooperandi and Personal Kanban have no legal relationship with the Muppets, but we sure were influenced by their wisdom.