Goal Tree: Beware of autumnal colors

A Goal Tree is the logical description of all Necessary Conditions that must be fulfilled in order to achieve the organization’s Goal. A Goal Tree is also the benchmark against which to measure the actual state, thus showing where and onto what focusing improvement efforts.

After building a Goal Tree, I propose to color-code its leaves in order to get a visual indication of the maturity and performance of the organization. The color code is made of the three usual colors : Red, Amber and Green.

In the logic of the Goal Tree, the Goal can only be achieved is all Necessary Conditions are fulfilled or all its leaves are Green.

When building a Goal Tree leaves are usually in autumnal colors, which is quite normal: the Goal Tree makes sense when searching for improvements, thus not being good, aligned or efficient in any required skills or activities.

If the autumnal colors of turning leaves are beautiful sights in nature, it’s a scary sight for an organization’s Goal Tree. The more Red, the worse the state of the assessed Necessary Conditions.

While turning leaves are preparation and protection for winter before the next blooming in spring, turning leaves on a Goal Tree may indicate the end without rebirth.

Red Necessary Conditions need therefore special attention and priority as the color indicates the most critical deviation from the desired benchmark.

Unlikely in nature, leaves on a Goal Tree can turn from Red to Green and Amber to Green. Provided it is not too late.

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Poor problem management: disregarding C customers

I see it quite often this poor problem management in B2B: instead of tackling the problems, companies prefer to serve their A and B customers first, at the expense of the C ones.

A, B and C customers refer to ABC portfolio analysis, a Pareto chart approach of customer base in which customers are sorted according to generated turnover, order quantities, strategic importance or any chosen parameter.

  • A class customers are those, usually few ones, accumulating 80% of the given parameter, let’s say turnover.
  • B class are the next 15%, a range of customers bringing all together 15% of turnover.
  • C class are the reminders, many customers with small orders accumulating 5% of turnover.

According to Pareto law, AKA 20/80, 20% of the customers will account for 80% of turnover and these essential fees are the favored category for obvious financial reasons.

On the other end, the “trivial many” of C category require more attention because of placing numerous small and often specific orders, for a tiny portion of the global turnover.

When companies face problems satisfying all demand, they usually “trim the tail” or ignore some of the least significant customers in order to favor the most significant ones.

Doing that, those companies:

  • Disregard their C customers
  • Make a gift to competition
  • Simplify their problem, not their solution

Disregard their C customers

There seems to be sound rationale behind the choice of trimming the Pareto’s tail, yet some of these sacrificed C customers may be new ones testing their potential new supplier. These Cs could have turned As if not sacrificed a bit hastily, based on (too?) simple, questionable selection process.

It may not hurt ethics beyond not keeping a sales promise when it is about widgets, commodities and the like, but what when the supplies are medical devices or drugs direly needed by every customer?

C customers may be emerging or poor countries with little choice of suppliers but people to treat.

Besides, these C customers have been acquired at some moment, could even have been welcome when sales were needed. It is a kind of unfair to disregard them when unable to supply all customers.

Make a gift to competition

Treating C customers with disdain may make them turn toward competitors, which is a free gift to the latter.

Given the costs of acquisitions, which is not only counted in money, companies in trouble supplying their customers should work out a solution to satisfy each and every one of them instead of just throwing a part into the arms of the opponents.

Simplify their problem, not their solution

Just cutting off supplies to C customers simplifies the supplier’s problem, not the solution.

In other words, it does not address the root cause, it just seem to alleviate the pain but at potential very high (future) cost: the loss of customers.

The only situation where this temporary solution – stopping supplying C customers – is “acceptable” is when it helps stabilizing a chaotic situation in order to work out a solution to supply ALL the customers. It has to be of short duration and preferably prepared and backed-up by adequate communication.

Turning off the tap without notice, hopping customers won’t claim is just unacceptable, unprofessional and unethical.

Yet all this being said, how many managers really care?


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If at least two tell the same

Chris HOHMANN

Chris HOHMANN – Author

This post is a kind of extension to the previous “Solve problems with few, messy data” in which I exposed ways to overcome the lack of solid and sufficient data to start solving problems and improve.

I faced such a case with few, messy and incomplete data where I managed to gather some bits out of different sources. When checking for correlations and pattern similarity, some data from different sources were convergent while others contradict one another.

Instead of losing time searching for the causes of these confirmations / contradictions, Philip (Marris) suggested the simple rule of thumb: if at least two sources tell the same, the information or data is assumed valid, if not we assume the information not trustworthy.

The rationale behind this rule goes back to redundant systems, designed to provide valid information even one of its subsystem fails.

In our case the rule may not withstand a thorough robustness check, but is good enough to allow quick decision with imperfect information.

What’s important during time-constraint process assessments, diagnoses or performance audits or even problem solving is not so much accuracy than sound logic to get things going.
Approximately right is better than precisely false.


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Dr Deming’s symphony

Chris HOHMANN

Chris HOHMANN – Author

Gemba walking or assessing a process without Goal in mind may lead to false conclusions.

This post was inspired by a mention about Dr Deming and inefficiencies in orchestra on a Mark Graban’s podcast (at 34mn).

Let’s take a symphonic orchestra as an organization activating around 100 different resources (musicians) to deliver value to its customers (the audience).

Let’s take some newly Lean-trained but inexperienced people (could be some consultants) and have them gemba-walk the orchestra during a concert.

Chances are the gemba walkers go for a waste walk, not a gemba walk (listen to Mark’s Podcast about this) and may feedback:

  • Some musicians play only a ridiculous part of the time, wasting precious capacity
  • The number of musician can be reduced by combining all non-saturated duplicates: instead of having same instruments playing at the same time the same tune, the just-needed resources will play the parts sequentially, thus filling their unused capacity
  • Most musicians do not play at full sound volume, another kind of waste
  • Playing speed remains under maximum
  • If audience was aware of the wastes, audience would not pay for not-playing musicians neither for those playing below full loudness, full speed or turning pages instead of playing their instrument

Such gemba walkers look for local maximization assuming value for customer is getting the maximum out of every resource. Most probably they walk the organization (orchestra) process by process, or type of musical instruments after musical instruments, e.g. string, brass, woodwind, and percussion, disregarding the cross-functional aspects.

As they do not know the organisation’s Goal – this post’s assumption – neither what really makes value for customers (a common trait in reality), their otherwise valid findings lead to false conclusions.

Now let’s imagine the orchestra following the advice and the next concert with all remaining musicians playing at top speed and full power, all time.

Quite funny, isn’t it?

That’s how successful companies laugh at their ill-advised competitors.

Still funny?

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2014 in review

The WordPress.com stats helper monkeys prepared a 2014 annual report for this blog.

Here’s an excerpt:

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 26,000 times in 2014. If it were a concert at Sydney Opera House, it would take about 10 sold-out performances for that many people to see it.

Click here to see the complete report.

Some thoughts for 2015

In the early days of 2015 I am not thinking about resolutions I won’t stick to, I am thinking about practices I’ve witnessed and evolutions I presume will happen.

These ideas are seeds of the future posts on this blog.

Among the posts to come, the Lean pendulum. It could be thought that after long emphasis about methods and tools, Lean would go for more Lean management, swinging the Lean pendulum from disconnected local usage of tools to a consistent holistic thinking and acting in a Lean philosophy way.

Indeed, some companies stress more Lean management, but looking closer what looks like embracing Lean Management is nothing more than selecting other tools out of the Lean nicely stuffed toolbox, with less results though.

Another post to come (Published!) is about poor problem management, disregarding C customers. Instead of solving problems and preventing them, companies select which customers they’ll satisfy at the expenses of the others.

I also plan a series of posts about 3D printing and business owners unaware of the potential disruptions they’ll face. Maybe these threats will renew interest for strategic analysis?

All new posts will be announced on twitter, so follow me…

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Thermodynamics of Eternity or Current Reality Tree in Hell

Paris, November 2014, Bill Dettmer was guest of Marris Consulting. I was fortunate to be among the guests for videotaping interviews.

In the following video, Bill introduces the Current Reality Tree, first of the Thinking Processes tools, with an uncommon example.

>Previous video: Video interviews with Bill Dettmer: LTP training participant’s testimony


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Starting a new year: 2015

Chris HOHMANN

Chris HOHMANN – Author

The first day of the year 2015 started with a beautiful sunrise, which I saw as a good omen for the 364 days to follow.

The first day of a new year is highly symbolic for a new start, resolutions and hope, even so the same new start, resolutions or hope could happen on any other day in the year.

That’s why my new year started one month earlier, when joining my new company and receiving a lot of kind congratulation messages from my personal / pro network.

Joining this new company brings new exciting perspectives and learning opportunities.

Especially Theory of Constraints, still barely known in France, will be part of my assignments and not only an opportunistic support to Lean and Six Sigma. All three approaches or methodologies combined as TLS synergy are on the ‘regular menu’.

I wish all of you to find your own reasons to get passionate and celebrate successes in 2015!