Corporate Anorexia

I spend a fairly large proportion of my time these days feeling embarrassed to be British. Trying to get home before Christmas to find that the biggest airport in the country was ‘closed', leaving tens of thousands of people stranded probably didn't help my mood. Watching the news over the Christmas period didn't help much either. It seems like wherever I look our systems don't work anymore.

(Figure 1: Failing (British) Systems In The News)

Or rather, they don't when something out of the ordinary happens. Like a large amount of snow falls in a short space of time, or the ambient temperature stays below ambient for a long period of time. But, hold on a minute, didn't we used to be able to cope with such things? 30 centimetres of snow might have closed Heathrow for a few hours in the past, but suddenly travelers are expected to endure five days of ‘flight cancelled'? People have found themselves with no water for a few hours following a freezing spell, but (as in Northern Ireland right now) surely not for over a week?

I believe that all of these instances are symptomatic not of a bit of extreme weather (Helsinki airport has been closed due to weather for approximately 3 hours in the last twenty years), but of something rather more sinister. My hypothesis? Lean.

Not Lean as it was originally conceived, however, but rather the crude bastardisation of the original thinking that has occurred in a rather large proportion of organizations.

Like a lot of things, some very smart initial thinking often gets diluted to the point where the smart thinking ceases to be smart any more. The big idea underpinning Lean is ‘waste is bad and so should be eliminated'. A statement that few would argue with. Indeed it is a statement that has passed through ‘common sense' to become accepted dogma. It would take a very brave person inside any organisation these days to argue against adopting Lean principles.

But let's have a look at what we actually mean when we say ‘waste'. Depending on which author you're reading, there are a host of different ways and means of classifying the different types of waste. Figure 2 lists 15 types of waste as may be collated when looking across all of the different classification methods.

• waste – process, business (employees, managers suppliers, etc), pure
• waste of over-production
• waste of waiting
• waste of transporting
• waste of inappropriate processing (using a hammer to crack a nut)
• waste of unnecessary inventory
• waste of unnecessary motions
• waste of defects
• waste of untapped human potential (empowerment)
• waste of inappropriate systems (over-specified computers, machines, etc)
• waste of energy and water
• wasted materials
• service and office wastes (excess meetings, food, photocopying, etc)
• waste of customer time
• waste of defecting customers

(Figure 2: Different Types Of ‘Waste')

Now, an important question. Take a couple of minutes. Which one is the odd one out from Figure 2: Different Types Of ‘Waste'?

Found it?

Probably not.

Before revealing the answer, let's take a moment to work out why the question is a difficult one: Like a lot of ‘improvement' initiatives inside organizations, the initial big idea has to be communicated from the Board down the food chain so that everyone understands what is trying to be achieved. The moment we get below CEO level, however, and people are immediately forced to look through the list at those things they are able to do something about. Inevitably, someone working in the HR department, or on the shop-floor of a production line, or cleaning the desks at night is able to do something about a relatively small proportion of the available menu. Everyone below CEO in fact can only do something about a proportion of the total list.

And which is the one that almost no-one has any direct control over (probably including the CEO)?

Answer: the last one in the list -"waste of defecting customers".

All the others are very tangible, measurable wastes. Wastes that people have the authority to do something about within their silo of the business. But ‘defecting customers' has nothing to do with what happens inside either your silo or indeed inside the organization. A defecting  customer is a waste that occurs outside the system. It is therefore a difficult one for anyone to do anything about…

…and as a consequence, it usually gets left off the list (in fact, in many organizations, it never makes it onto the list in the first place). And the moment that happens, the original philosophy has been corrupted and the organization is well on the way to the sort of failure shown in Figure 1.

It is very easy to strip out ‘waste' when you're only looking within your bit of the system. So, to take one of the Figure 1 examples, Northern Ireland Water chopped 500 jobs in 2007 in order to ‘strip out waste'. Part of which turned out to be a substantial chunk of their emergency response engineering team. An easy target when everything is working fine (‘look at those guys doing nothing in that office over there'). Not so great when something unexpected happens… and suddenly the desire to be lean has turned into anorexia. A ‘waste' was stripped out of the system without realizing, until it was too late, that it wasn't waste at all from the bigger picture perspective.

As the National Health Service, BP, Rolls-Royce, Heathrow airport and Northern Ireland Water have already found to their cost, and no doubt a thousand others still to experience their ‘bigger picture perspective' problem will find in the coming months and years, Lean demands a holistic view. Lean within a silo leads to a lean silo and a dysfunctional – anorexic – system. Lean within a silo is folly.

So What?

You might rightly ask. Is this just a post-Christmas rant, or is there a point to this discussion? Hopefully, the latter.

And it is this. Everyone recognizes that when a system approaches maturity, it starts hitting some fundamental limits. The limits stay fixed, but the pressure to ‘do better' (‘eliminate waste') if anything only increases…

…and a contradiction emerges…

…which we know dictates that we either resolve it or accept that we are bound to create an inevitable failure.

It is expensive to run an airport like Heathrow. Especially following a recession which has seen a fall in passenger numbers and therefore revenues. The trade-off way of resolving this conflict is to not invest in snow-clearing equipment and pray for fine weather. The contradiction solving method says we have to change the system. Which in turn means identifying some resources that can help. Preferably free ones, that want to help because a win-win solution is produced.

On the fifth toe-curlingly embarrassing day of the BAA's inability to get the second runway at Heathrow open, the company's COO appeared on the national news to thank the Government for their offer to bring in the Army to help clear the 30cm of snow from the runways, but to say that the help was not needed. Fair enough that he didn't want to (or couldn't) invest in more snow-clearing equipment before the snow fell; but bordering on the criminal that he hadn't been on the phone to the local Army base to request their help five minutes after the (correctly predicted by the forecasters) snow started falling and the impending disaster began, never mind five days later.

The Army would've won – public goodwill, the opportunity to train on a ‘real' mission, etc – BAA would've won and sure as damnit the poor stranded passengers would've won. Only problem: it was a solution that required someone to step outside their cosy silo.

Be warned, these incidents aren't a one off caused by some slightly worse than normal weather, they're the first signs of a corporate anorexia pandemic. The only cure for which is to start solving contradictions and transcending a host of artificially created and usually mis-conceived silos.