Denver Blizzard Snow Shoveling Stupidity

Denver decided to plow the local streets during today’s storm. When I got up this morning, the snow was plowed up over my sidewalk (which I’m required by law to clear).

Some of my neighbors were busy shoveling the snow from their sidewalks back into the street instead of into their yard where it could benefit both their yard and local drivers. Does the phrase “waste and rework” come to mind?

I see this in lots of businesses as well. One group cleans up something on their “street” and another group shovels it back. All of this waste and rework eats profits and productivity that could be used elsewhere.

What are you shoveling and where are you shoveling it to?

Reducing Variation in Income

In the State of the Union address, President Obama spoke of the widening gap between the rich and the poor. Let’s call this by it’s Six Sigma name: variation.

When trying to improve the capability of any system, we think about the  specification limits. The American Dream is “the sky’s the limit”, so there is no upper specification limit.

President Obama wants the rich to do more, but if we want to reduce the variation in income, wouldn’t a better idea be raise the poor? Create a rising tide that lifts all of the boats?

When I was growing up, I don’t remember anyone teaching me how to make more money, invest the excess and grow wealth. It wasn’t until I was 35 that a couple of college friends recommended that I read The Richest Man in Babylon. The solution was so simple that most people wouldn’t even give it much value:

1. Invest 10% of your income.
2. Use 10% to pay down your debt.
3. Give away 10% of your income.
4. Live off the rest.

Sounds tough doesn’t it? But I put it to work and I went from broke to what President Obama would consider “rich” in 25 years.

Maybe we should teach poor people how not to be poor. Maybe we should address the limiting beliefs that plague Democrats and Republicans about the income gap. It’s not a problem to be solved by “fixing” the rich, but perhaps by educating the poor on how to become wealthy.

Why don’t we teach this in schools instead of geometry or algrebra. It would be a lot more helpful to everyone.

High School Dropouts are Defects

Denver Public Schools recently announced a graduation rate of 51.8% for 2009-2010 and a dropout rate of 6.4%. Somehow those numbers don’t add up. The total completion rate is 65.4%, which still means that 34.6% still don’t graduate.

Regardless, if you look at the dropout rate of 6.4% (about 3 sigma) or non-graduates (34.6% is about 1 sigma), the graduation rate is still dismal. In last night’s state of the union address, President Obama asked that we require students to graduate from high school. Maybe if today’s high school curriculum matched the needs of the students that would be possible. Or to periphrase Yogi Berra: “If they don’t want to come to school, how you going to stop them.”

Growing up in the 1950s, I felt like school was trying to prepare me to work on an assembly line. In this century, only a few people work on assembly lines or in agriculture. The rest are knowledge workers who have to think for a living.

Blaming students for dropping out isn’t the answer. If a business loses a customer, it’s because they stopped meeting the customer’s needs. Consider the idea that high school has stopped meetings the customer’s (i.e., student’s) needs.

If we think of students as customers and not inmates that we have to control, we’d realize that education needs to become more student-centric and less prepare-students-for-tests-that-ensure-next-year’s-funding oriented. If we think of families and society as customers, we might approach education quite differently.

Paul Simon’s lyrics still speak to the state of education: “When I think back on all the crap I learned in high school, it’s a wonder I can think at all.”

Let’s consider dropouts and non-graduates as “defects” produced by the education system and then do some root cause analysis on the why-why-why-why-why and then implement countermeasures to raise the graduation rate. Let’s not try to blame teachers or students or parents; it’s not their fault. As Deming would say: “It’s the system.”  It might be what students are learning or how it’s taught or cultural issues that vary from location to location, but the Five Whys will help figure it out and solve the problem locally and nationally.

It’s Six Sigma for K-12 schools. A little bit of analysis could go a long way.

Magazine in a Body Bag

The cover of my wife’s People magazine arrived in a “body bag” from the USPS. Nice cover, no magazine.

Did the USPS contact People magazine to order us another one? No, that’s our problem.

Are you creating more solutions or problems for your customers?

Why Retailers Lose Money

My wife ordered a set of monogrammed bath robes for our daughter and son-in-law from RedEnvelope. When they arrived, she checked them (unnecessaryinspection)…no monograms.

So she called (rework) and they told her to keep the two unmonogrammed ones (waste) and they would send two monogrammed ones.

A couple of days later, we did get two monogrammed bath robes (rework). The next day we got two more and the day after that we got two more (waste and rework). When we called (rework), they said, don’t return them because they’ve been monogrammed already.

So now, we have eight robes for the price of two. It probably cost RedEnvelope more than the order to replace them so many times.

This is what happens when the initial order goes wrong; sometimes the Fix-It Factory makes mistakes correcting the problem leading to more waste and rework.

Is your Fix-It Factory broken?

Christmas Ad Error

Newspapers seem to be in trouble these days, so can they really allow their advertisers to make this kind of error–running an ad for a sale that was last weekend?

Lean Six Sigma in Government

Every business, government included, suffers from unnecessary delays, defects and deviation that consume one-third of the total budget. Lean Six Sigma can eliminate these problems which could either reduce taxes or pay for healthcare, education and a host of other needed services.

The Army has used Six Sigma to save $17 Billion. The Veterans Administration has used Six Sigma to improve outcomes and reduce costs for healthcare.

As a small business having spent 10 months and thousands of dollars to get on the GSA schedule, I can tell you that there was 9 months and 29 days of delay in the burdensome bureaucratic process that could have been eliminated. And there were so many mistakes and errors in the handling of our submission that it’s a wonder we made it through the maze. And this is just a snowflake on the the tip of the iceberg in government waste.

Regardless of which party is in power, the ongoing systems of everyday government are sluggish and error-prone costing taxpayers trillions. Lean Six Sigma can change all that, but it has to be done using just a few key tools in the right order.

Jay Arthur, author of Free, Perfect and Now.

Case Study in Six Sigma Tool Foolishness

I got a call from a small manufacturing company about the QI Macros. They had just trained 16 Green Belts at a cost of over $3,000 per person. Each employee was in class for two weeks, so let’s call that 80 hours at a loaded rate of $50/hour = $4,000. So that’s $7,000 per person or roughly $112,000 total. And that doesn’t count the lost opportunity cost of employees not being on their jobs for two weeks which might be at least another $4,000 per person or $64,000 additional.

The caller asked how much it would be to put the QI Macros on a single PC that all 16 could share.

Seriously? After spending $7,000-$11,000 per person for training, you can’t spend $200 per person to make them productive?

And what about the training company that didn’t include software with their training? Teaching Six Sigma methods without providing the tools to be productive should be considered malpractice.

This is just one of the many calls I get every week where some purchasing department is trying to skrimp on software at the expense of productivity. Mega waste! So I don’t care if you buy the QI Macros or some other Six Sigma toolkit, but stop wasting money on training if you aren’t willing to back it up with tools to make people productive. It’s foolish.

Lean Insurance

In Jim Collins new book, Great by Choice, he describes the rise of Progressive Insurance. In 1988, California voters passed Proposition 103 which mandated a 20% reduction in fees and refunds to customers. The message was loud and clear: “We hate insurance companies.”

Peter Lewis, CEO of Progressive, created an “Immediate Response” claims service that operated 24/7/365. By 1995, Progressive could resolve a claim 80 percent of the time within 24 hours. As a result, Progressive grew from the #13 to the #4 largest insurer between 1995 and 2002. Lewis called Proposition 13 “the best thing that ever happened to this company.”

Lessons?

• Fast is free; slow is expensive.
• Fast grows your business; slow kills it.

What are you doing to approach the new market demand for Free, Perfect and Now?

Sunglass Buying App from Nordstroms

Eric Ries’ Lean Startup ezine turned me on to Nordstrom’s Innovation Lab. Check it out–a full iPad app built in a retail store in a week to assist customers with their purchase.
http://nordstrominnovationlab.com/