culture clash

2

how we think

▲ Fast:▲ Enumerativ

e▲ Heuristics▲ Surface

▲ Slow:▲ Analytic▲ Understanding▲ Under the

surface

Hard wired to operate here.

Science /C.I. operates here

3

thinking about things Political / Enumerative

Scientific / Analytic

describe population focus / inference

analyze process

static frame of reference dynamic

fast mode of thinking slow

theory over data truthdata over

theory

command and control

management model leadership

4

enumerative / analytic thinking

5

cultural dimension

CEO

Vice-President Vice-president Vice-President Vice-President

Manager Manager Manager ManagerManagerManagerManagerManagerManager Manager

Staff StaffStaffStaffStaffStaffStaffStaffStaffStaff

ConsumerResearch

CONSUMERS

Design &Redesign

Receipt ofInputsA

B

C

Systems of Production & Service

Tests of Processes

6

Organizational ExpressionCharacteristic Professional

ManagementPracticing Management

Management Model/Thinking

Hierarchical Command and Control

Systems Thinking and Leadership

Ethos Dogmatic, ideological, rules, control

Pragmatic, scientific, experiments, learning

Location Executive Suite, 42th floor of head office

Gemba, the heart and soul of the operation

Information processing / understanding

Enumerative, descriptive/inspection

Analytic, explanatory/predictive

Primary activity Reading reports and writing directions

Running the business and providing leadership

hierarchy and positions organizational model systems and processes

7

Systems Thinking: Complexity & Variation

T HREE E LEMENT S YSTEM S EVEN E LEMENT S YSTEM

S YSTEM S TATES = 64 S YSTEM S TATES = 4,398,046,511,104

8

the challenge: improvement & innovation

▲ The boss and the business are hardwired against change (despite endless talk to the contrary).

▲ Further, they are hardwired against analysis and evidence-based arguments (despite endless claims to the contrary).

▲ Make improvements. Just don’t change anything.

PRACTICAL TOOLS TO CHALLENGE THE STATUS QUO THINKING

1. Kahneman’s Human Psychology2. Systems Map3. Capacity/Little’s Law4. Control Chart/Performance

Measurement5. Taguchi Nominal Targets

10

1. Kahneman Heuristics

Heuristics▲ Representativeness

▲ Anchoring & Adjustment

▲ Availability

Strategies▲ Metaphors,

Comparative Similes, Stories

▲ Accurate Baselining, Detailing the Variation, Models.

▲ Broaden the Search Field, Provide Context, Use ModelsEnough doubt must be raised to convince people

to give up their evolutionary tendencies and expend energy in thinking slow about the problem and solution.

11

2. Systems Diagram

Source: revised from Vanguard Consulting Group, with permission

Process StepProcess Step

Customer Touch/Interaction Point

Process StepProcess StepProcess Step

Process StepCustomer Touch/Interaction Point

Process StepCustomer Touch/Interaction Point

Process StepCustomer Touch/Interaction Point

CUSTOMER

system conditions

management thinking

process efficiency & flexibility

what matters to customers

demand/response capability

purpose of the system1

2

3

4

5

6

12

3. Understand Capacity/Little’s Law

▲ Capacity is dynamic concept

▲ Metaphor spirit, let’s talk about pipes

▲ Little’s Law: TH = WIP / CT

13

3. Understand Capacity:Process Dynamics

ProcessBacklogQueue

Arriving Work/Inputs

Work (Uin)

CompletedWork

Finished Product/Services

TH =WIP

CT

Rework or Failure Demand (Urwrk)

Scrap (Uscrp)

Uout =

First Time Yield = (Uin – Uscrp – Urwrk) / Uin

Failure Demand may represent the largest source of demand in the

system

Yield = (Uin – Uscrp) / Uin

CTq CTe

CT = (CTq + CT e)

WIP = (WIPq + WIPe)

WIPq WIPe

WIP: Total number of people or units of work in the system

WIPe: how many people/units are in-process.

WIPq: how many units/people are waiting for

service.

CT: Total time it takes one unit to traverse the system, time from order to delivery CTe: processing time per

person or unit of work.

CTq: waiting time per person of unit of work.

Little's Law; The fundamental law governing the performance behaviour of all processes

TH will equal for a system that is in balance.

14

3. Understanding Capacity: Variation & Congestion

Cyc

le T

ime

CapacityUtilization

100%

Non

Fea

sibl

e R

egio

n

Cyc

le T

ime

CapacityUtilization

100%

15

3. Understanding Capacity: Variation & Congestion

U U

Term

Processing time in hours

(te)

Wait Time in hours

(CTq)

Total Cycle Time in hours

70% 2.33 2.4 5.6 8.0 80% 4.0 2.4 9.6 12.090% 9.0 2.4 21.6 24.095% 19.0 2.4 45.6 48.0100% infinite 2.4 infinite infinite

16

4. Performance Measurement

What gets measured gets done.--Current Management Insight

If you cant measure it, you can’t manage it. --Current Management Wisdom

Measure the meaningless and misinterpret what is measured.--Current Management Practice

17

4. AHS Performance Dashboard

YTD Target compared to Actual

This Qtr. compared to previous Qtr.

YTD compared to YTD last year

18

4. Executive Trends . . .

any two data points

(-)

per

form

ance

(+

)

time(-

) p

erfo

rman

ce

(+)

time

(-)

per

form

ance

(+

)

time

performance is increasing(positive trend)

performance is flat(neutral trend)

performance is decreasing(negative trend)

19

4. Hospital ScorecardPerformanc

e RankLOS

Comparison to

System Average

Target

Comparison to Target

Hospital 1 1 3.03 2.5 Hospital 2 3 3.07 2.5 Hospital 3 4 3.12 2.5 Hospital 4 2 3.03 2.5 Hospital 5 5 3.15 2.5

Overall System Average

3.08 2.5

Legend: Better than

expected Within +/- 5% Worse than

expected

20

4. PM Hospital ANOVA

Minitab Output:No significant differences among the 5 hospitals

21

4. PM: No Difference?

Highlights and Conclusions

LOS1: rising trend

LOS2: Likely two shifts at periods 16 and 24.

LOS3: reliable performance, high random variation

LOS4: reliable performance

LOS5: multiple special causes

28252219161310741

8

7

6

5

4

3

2

1

0

Period

Indiv

idual V

alu

e

_X=3.027UCL=3.595

LCL=2.458

111

1111

111

1

2222

2222

13

1111

11

1

I Chart of LOS1

Converge Consulting Group Inc.

28252219161310741

8

7

6

5

4

3

2

1

0

Period

Indiv

idual V

alu

e

_X=3.073

UCL=4.119

LCL=2.028

11

111

I Chart of LOS2

Converge Consulting Group Inc.

28252219161310741

8

7

6

5

4

3

2

1

0

Period

Indiv

idual V

alu

e_X=3.127

UCL=6.016

LCL=0.238

I Chart of LOS3

Converge Consulting Group Inc.

28252219161310741

8

7

6

5

4

3

2

1

0

Period

Indiv

idual V

alu

e

_X=3.033

UCL=4.794

LCL=1.273

I Chart of LOS 4

Converge Consulting Group Inc.

28252219161310741

8

7

6

5

4

3

2

1

0

Period

Indiv

idual V

alu

e

_X=3.15

UCL=6.433

LCL=-0.133

11

2

1

I Chart of LOS 5

Converge Consulting Group Inc.

Run and Control charts are the only ways of communicating any performance metric.

22

5. Taguchi / Nominal Targets

23

5. Performance TargetsWhere did this come from?

Nominal is the place to be.

24

5. Taguchi Nominal

▲ Provides the cost at any target distance from nominal.

▲ EL(x) = k(s2 + barx2) smaller is better

▲ k is a constant = cost(scrap) /(xscrap-T)2

25

5. Emergency Service

▲ k = cost(scrap) /(xscrap-T)2 = .007▲ cost(scrap) = 1 life

▲ Xscrap = 20 minutes▲ T = 8 minutes

▲ EL(x) = .007 (s2 + barx2) = 0.28▲ s = 2▲ Barx = 6

26

5. Taguchi ImplicationsThis target builds in a 28% death rate arising from slow ambulance response rates.

CONCLUSIONS

Understand that you are coming from a whole different perspective .

People are hardwired to reject your approach and your reasoning

To shift people from Fast to Slow, use facts to address their operating heuristics

Many Lean, Lean Six Sigma, Continuous Improvement tools are designed to do just that.