If it can happen to Target

It can happen to you.

Joe Castaldo tells the tale of Target’s expansion to Canada. Less than two years after opening its first store, Target Canada filed for bankruptcy and closed. The episode cost the parent company some $2 billion, not counting the damage it did to its reputation.

Why?  Read the article and you’ll have no problem finding the reasons. Lots of them.  But what struck me is that the most critical problems were clear not just in retrospect but to many of the participants at the time. Continue reading

Systems thinking—still in short supply

By Hans Norden
Special to Slightly East of New

I’m observing how there is, at least within management education, a dichotomy between two paradigms; one that builds decisions on the belief that money is the highest value (see Small is Beautiful by Fritz Schumacher) and another that builds decisions on systems thinking, or quality; improving the capability of a system. It’s interesting how Boyd described Orientation as the Schwerpunkt of his thinking; the paradigm through which to observe one’s environment, including new and unforeseen circumstances as they unfold.

It seems to me that people have a hard time even opening their minds to beliefs that are in conflict with their mental programming; they even reject the idea of just trying it on for size, so to speak. It was an intelligent investment banker who explained to me why Deming was not widely used, not because his ideas were too complicated but because people simply do not believe that they are true!!!??? They experience a ‘short-between-the-ears’ when their Orientation fails to make sense out of their Observation of Deming’s System of Profound Knowledge. Subsequently, their lack of Fingerspitzengefühl suppresses their curiosity. (After Chet’s presentation, why was there neither a single question nor any opposition? In other words, a dialogue in which they engage the messenger.) Continue reading

Presentation slides from LKCE15

The slides from my keynote at LeanKanban Central Europe 2015 are now available from the Articles page.

ABOCoverThe originals were done in Apple Keynote and had quite a lot of animation. It is possible to export as a PDF with each stage of a build saved as a separate slide.  This only works, however, for simple builds, like “Appear,” and it makes for a very large file.

Instead, I’ve reformatted a few of the charts and exported as a regular PDF.  Even with all that, it still comes in at 6.5 MB.

You can watch the keynote address itself from Munich at https://vimeo.com/146524156.

 

All about agility in 400 sec.

At a special event midway through the first day, five of the presenters at LeanKanban 2015 gave short presentations on various topics.  The trick was that you had to have an intro slide, an outro slide, and 20 content slides, each of which was timed to display for 20 seconds.  In the video below, you can see the timing ball moving inexorably across the bottoms of the screens.

Mine was modestly entitled “Agility: The Power and the Glory.”  The software development community has a concept of agility, and if you search on “SCRUM” you can get an idea of how it works.  Apparently it works well because lots of development teams use it.  The way the developers use the term is the same as Musashi’s chapters 2 and 3, where he discusses tactics and techniques. This is important stuff because poor technique can ruin an otherwise brilliant strategy.20x20.001

But like Sun Tzu, Musashi goes on to insist that the real purpose of agility is to drive the terms of the conflict, to ensure, for example, that what you develop succeeds in the marketplace. Nokia, for example, didn’t go out of the phone business because of poor technique in building feature phones.  Agility should govern strategy — what to develop — as well as tactics and technique — how to develop it.

As I explain in this 20-slide talk, one of the really cool things Boyd did was to extract the essence of agility from something like “super maneuverability,” that is, a hardware concept, and move it into the pilot’s mind.  My little talk shows that this proceeded in stages first by noting the ability to handle change, then in the idea of “operating inside the OODA loop,” and finally to the concept of orientation.  This progression is critical to the concept of agility because otherwise you have a big problem explaining why the Red Baron’s Fokker Triplane from WWI, which was among the most agile aircraft ever built, didn’t even stay a front-line fighter for the whole war.

As an added bonus, I deconstruct the OODA “loop,” the big one from The Essence of Winning and Losing, in 60 seconds.

All of the little talks are worth watching, and mine begins at about 35:40.  You’ll occasionally hear voices in the background. To reduce the times needed for changeovers, we were all miked and in the excitement, we sometimes forgot this simple fact.  The MC is Markus Andrezak of the German company Überproduct in Potsdam.

20 by 20 with Pawel Brodzinski, Chet Richards, Nadja Schnetzler, Karl Scotland and Dominica DeGrandis at LKCE15 from Lean Kanban Central Europe on Vimeo.

Gators, by the way, are extremely agile.  Don’t be fooled into thinking they are just sluggish, belly-dragging lizards: They do the cheng / chi maneuver (abrupt transition from expected to unexpected) better than any human I’ve run across.

Maneuver breaks out

Fokker Dr.1

Replica of a Fokker Dr.1 Triplane in the Deutsches Museum, Munich. A very agile airplane, but not very fast, so by the end of the war, no longer capable of operating inside opponents’ OODA loops.

If you look down through the sweep of history, you might see two broad trends in the concept we call “agility” or “maneuver.” In the military, including the martial arts, people have known that certain practices could disorient opponents, making the physical act of combat much easier to win.  Among these were deception, ambiguity (the “fog of war”), the ability to operate at a rapid tempo, and especially a rapid shift between what the opponent expects and what they experience. The oldest known documentation of these ideas comes from the Sun Tzu text, fragments of which date back to 300 BCE, and they flow like a stream through later Chinese commentators, the Japanese samurai, various schools of the martial arts, the campaigns of Genghis Khan, the German “blitzkrieg,” and on to our day via the works of John Boyd and the US Marine Corps doctrine of maneuver warfare.

Sometime after World War II, in Japan, they jumped the military track and into, of all things, automobile manufacturing.  Known today as “lean manufacturing,” the philosophy and set of practices that began as the Toyota Production System broke longstanding tradeoffs between cost, delivery time, and quality.  Before the TPS, and in US auto manufacturing up until the 1990s, higher quality meant higher costs. The TPS showed that it was possible to build better cars cheaper.

Why is the TPS another manifestation of the principles that underlie maneuver warfare?  For one thing, they both accord a central role to time. Sun Tzu wrote that quickness is the essence of war. Similarly, the TPS stresses the continuous reduction in the time between when a customer places an order and when they receive the vehicle. And as this chart from my keynote illustrates, they both rest on a philosophy that stresses human creativity and initiative:

Final Brothers illustrations.001

Both maneuver warfare and lean are mature concepts.  One could argue that all the elements that define maneuver warfare were identified and in place no later than the early 1940s and might even make a case for 1936, when the German Army issued its doctrine for command of troops, the Truppenführung. If you’re interested in the details, Martin van Creveld provides an extensive analysis of the Truppenführung in his book Fighting Power.  These concepts were refined by John Boyd, Bill Lind, and a group of young officers in the Marine Corps beginning in the early 1980s and reached what is essentially their current state with the publication of Marine Corps Doctrine Publication 1, Warfighting in 1989.

Similarly, Taiichi Ohno, one of the prime creators of the system at Toyota, maintained in his book Toyota Production System that the basics of the system were in place by 1973.  In 1979, in response to claims that the Japanese were dumping cars at below cost (nobody could sell a car that good for so little!), MIT began the International Motor Vehicle Program, which documented the system and compiled data that demonstrated its effectiveness. Their results were presented in a number of articles principally in the Harvard Business Review and Sloan Management Review and popularized in the 1990 book, The Machine that Changed the World.  Two of the authors of that work continued to develop the ideas into a more general theory of lean and published them in Lean Thinking (1996).  At about the same time, Allen Ward and his colleagues at the University of Michigan were researching the Toyota Vehicle Development System, which applies the same underlying principles but in quite novel ways. This may be evident from the subtitle of their 1995 paper, “How Delaying Decisions Can Make Better Cars Faster.”

It’s been 20 years since anything significant developed in the world of maneuver, agile, and lean.  My 2004 book, Certain to Win, looked more at the relationships between maneuver and lean. It was the first to point out the common foundation of maneuver and lean, particularly the “human” factors that underly both (by “pumping up creativity …”). It noted that in business, the military concept of grand strategy reduces to “ordinary” strategy. It offered an interpretation of the maneuver concept of cheng / chi that, by focusing on the customer, not the competitor, works for business, too.  Good foundational stuff, but it wasn’t written to divert the lean / maneuver pattern into a new field of application.

So it’s about time that the maneuver stream found a new channel, that it broke out of the worlds of manufacturing and war and over into what we might call “white collar” occupations.  From the quality and intensity of the discussions at LKCE15, building on what I first observed at Lean Software & Systems 2011 in Long Beach, we may be seeing the power of these ideas manifesting in an entirely new area:

Final Brothers illustrations.002

 

Lean kanban incorporates many of the practices associated with classical maneuver / lean theory: managing flow, limiting work-in-process inventory (which can hide problems and distort orientation), and employing an hypothesis-test methodology for learning.  According to the web site of one of its founders (and a keynote speaker at this conference), David Anderson, it also “encourages acts of leadership at all levels.” Depending on how they implement this idea, it could be in harmony with “Pump up the creativity and initiative of everybody …” Because this concept is the real foundation of classical lean and maneuver, I’d need to know more before pronouncing a final judgment.  Looks promising, though.

For more information, check out the conference’s sponsors — there are links down at the bottom of the conference’s home page.

“All by Ourselves” – Now a Major Motion Picture!

Or at least a video of my keynote at LeanKanban Central Europe 2015 in Munich on November 17:

All by Ourselves (Keynote) – Chet Richards at LKCE15 from Lean Kanban Central Europe on Vimeo.

Many thanks to the folks at it-agile for a superb conference! Ran like clock work, too many great presentations to catch them all, rocking late Oktoberfest, and somehow they arranged for record high temperatures in Munich.

This Boyd Stuff Works!

Starting in around 2000, Dean Lenane, the CEO of a German-owned auto-systems supplier, CRH of North America, began applying Boyd’s concepts. The results were spectacular. As he told me once,

I asked my staff to read 4 books: Certain to Win, Boyd by Robert Coram, Maneuver Warfare Handbook by Bill Lind and Warfighting by the USMC. Although my people were sometimes puzzled by this curriculum, I was able to get most of what we were trying to get across stuffed into the assembled noggins.

Between 2000 and 2010, CRH North America went from no presence whatsoever to the largest supplier in its market sector in the NAFTA region. If anyone thinks this is easy, then I suggest they try it.

A couple of years ago, Dean began writing the story of how he did it. You can download the result, The Turnaround, from our Articles page. Last year, he put the essence of his experience in to a briefing slide show that I first saw out in San Diego in February and which he polished and gave at the 2014 Boyd and Beyond Conference back in October. With his kind permission, I’ve also uploaded the October edition to our Articles page.

RIP Southwest??

I hope not.  Under former CEO Herb Kelleher, Southwest Airlines shone like a beacon through the gloom of top-down cultures managing to next quarter’s bottom line. Although it often produced the best numbers in the industry, Southwest maintained its focus on people — customers as well as members of its organization. As one imitator after another bit the dust, Kelleher would proclaim that “They can copy the details, like fly just one type of airplane, but they can’t copy the culture!”

Well, the latest quality-related numbers aren’t looking too good.  In the Wall St. Journal‘s annual ranking of US airlines, (paywall) Southwest landed at the bottom for mishandled luggage (“On average, at least one passenger ends up missing a bag from every Southwest flight.”), and near the bottom for involuntarily bumped passengers and for on-time arrivals. The once-proud Southwest ranked 5th out of eight overall and scored at the top in only one area, two hour tarmac delays. Ironically, the airline was just fined $1.6 million (WSJ – paywall), the largest such civil penalty ever, for repeated violations of the rule allowing passengers to deplane after a 3-hour delay. Southwest says that it has made substantial investments in the interim to fix the problem. Continue reading

Has Apple caught the Microsoft disease?

My wife keeps getting the following pup-up in Safari on her 2013 iMac running Yosemite:

com.apple.WebKit.Networking.xpc want to sign using key “Apple ID Authentication (date, time) in your keychain

I used to get messages like this all the time from Windows, but it doesn’t seem like something that an operating system billing itself as “It Just Works” should be doing. Turns out that it’s not an obscure problem either, as you can tell from the discussion on Apple’s support site that began about 14 months ago. Here’s a solution:

For some people, it seems that there is a confusion in the keychain between the right certificate and a wrong one, and then Safari tries to sign using the wrong certificate. I my case, after suppressing that unwelcomed certificate, the signing process starts to work as it should… at least for some time. Be careful not to suppress any system or root certificates, which will cause an access problem to their related web sites. The one shown on the top of this discussion is located in “my certificates” in the login or session keychain.

I’ll pass that along to my wife, asking her to be sure “not to suppress any system or root certificates.” Continue reading

Be a cult

Visualize a cult. You probably see:

  • An ideology that seems incredible — even silly — to outsiders but that cult members will defend to their deaths. Data that contradict the ideology will either be interpreted to fit (that is, be explained away), or, if this should prove impossible, will either be ignored or denied.
  • A leader whose pronouncements reveal and interpret the ideology to cult members and whose every utterance, therefore, must be embraced and every command fulfilled, regardless of the cost or outcome.

Why in the world, you ask yourself, would sane human beings belong to cults, much less fashion their organizations in such a way? Cults, like all closed systems, generate entropy/disorder that mounts up inside until it makes them vulnerable to competitors or causes them to rip apart. On the other hand, there’s something successful about this model because down through history, there doesn’t appear to have been any shortage of them.

An article in this month’s The Atlantic, “Turning customers into cultists,” suggests an explanation. Many cults offer their members two things often missing in their lives, identity and community. Prophets and esoteric dogma are means for achieving these, but are not in themselves strictly necessary. As a study of the Unification Church (the “Moonies”) concluded, “The cult inculcated new members through simple techniques: weekend retreats, deep conversations, shared meals, and, most seductive, an environment of love and support.”

Even the Peoples Temple (Jim Jones), Branch Davidians (David Koresh), and Heaven’s Gate (Marshall Applewhite), whose members did demonstrate their loyalty with their lives, provided this strong sense of identity and community.

Descriptions like these should remind you of Einheit, the foundation of Boyd’s organizational climate. Literally translated, it means “one-ness.” Boyd used “mutual trust,” and other connotations include harmony, common outlook, and cohesion. Its importance in military operations cannot be overstated. Einheit is what moves people to climb out of trenches and march in straight lines towards certain death, as 19,000 British soldiers did on the first day of the Battle of the Somme, July 1, 1916.

Discussions of cultism in business inevitably lead to Apple (Disclosure: I’m writing this on my 2008 MacBook, which still works so well that I can’t convince my wife I need to replace it). From a business standpoint, though, it would be a mistake to regard the company itself, Apple, Inc., as a cult, the late Steve Jobs and its famously secretive culture notwithstanding.  Success in business requires attracting millions of customers, that is, people who are not and never will become members of the company itself.

So the genius of Apple was to recognize that the concept of “member of the cult” needed to be broadened to include not only employees of the company but its customers as well.  There’s even a website, The Cult of Mac” (“Breaking news for Apple fans.”) The Atlantic article gives insight into how this was done. In Boyd’s terminology, we might say that they achieved a high degree of Einheit with all those Apple fanboys and fangirls.

As I suggested in chapter 6 of Certain to Win, one way to do this is to play the cheng / chi game: Give them what they want and expect — good performance, reliability, beautiful design, etc. — but then throw in something they don’t, like an intuitive operating systems (with free upgrades), a well-integrated ecosystem, responsive customer service, etc.  Even an Apple decal for your car. And perhaps most important, the feeling that you’ve become a member of a family of similarly enlightened beings.

The challenge for Apple will be to preserve this cult-like relationship with its customers. As a company grows and so loses the advantages of exclusivity, the benefits of being identified as a cult member become diluted. An Apple tag line from years ago was “Think different” (to which an industry commentator once appended “so long as you think like Steve.”) But there’s increasingly less cachet to thinking different if everybody else is thinking the exact same way.  My guess, unfortunately, is that over time Apple will shift its focus to market share and financial results and become just another company.