Are you getting enough x? As I ask around – it seems like many people are not. In fact, some people don't even realise that that they are missing out. If you are not getting enough x and you want more .. then read on….
One of the common problems seems to be, too much focus on Big Y. If you want to make your business efficient and effective you need to pay more attention to Little x and less to Big Y. I still see a lot of focus on ‘output’ metrics for business and functions. People talk about ‘Productivity’ for example, “number of widgets produced per production employee” or “number of customers served per service support agent”. These are 'Big Y' (output) variables. Are they important? For sure, they have their place. The CEO can get a measure of how well the function did in the last month or the last quarter. But in terms of running the operations of the business? Not much!
The types of measures have some significant weaknesses, namely:
- They are lagging measures: They tell you how you did last month or last quarter but not how you are doing at this moment.
- They are not diagnostic: They don’t help you find and fix problems as they arise
- They are not based on any theory of your firm: They don’t explain what is going on and give you a route to remediation.
That is, these variables are like a light on the dashboard of an aircraft that lights up and tells the pilot “You just crashed the plan”. Interesting – but not useful!
The measures that pilots seem to prefer are things like air-speed and altitude. The pilot has a theory – that she needs to maintain air-speed within certain limits to keep the aircraft flying. That is, she has a theory which relates these instantaneous measures with the health and well-being of the aircraft. The air-speed variable is also diagnostic. If the air-speed is too low, then she knows that she needs to open up the throttle and get the aircraft moving a bit faster. (I would say that this is not rocket science – but it sort of is). Air-speed is a great ‘Little x’ (cause) measure. Aircraft crashing into the ground is a worrying “Big Y” (consequence) measure.
We hope that the CEOs of airline companies don’t call meetings of their senior people at the end of the year and say things like “Guy’s – we had 14 aircraft fall out of the sky this year. We need to get those numbers down. Anybody got any ideas?”, with the hesitant answer “Well, gee boss.. maybe we could ask the pilots to fly a bit faster?”
So an important question must be – how do we find those ‘Little x’ measures that are fast, diagnostic and tied into some theory we have about how the business should run?
The great news is that you go and ask your local Lean Six Sigma expert – they know the answer.
First of all, Lean Six Sigma has a variety of tools specifically intended to find those Little x’s (it also has some great ways of identifying excellent Big Y’s – but that is for another blog post). Quite a large focus for Lean Six Sigma is that of considering cause and consequence. So there are a variety of methods in the Lean Six Sigma toolbox that can help.
In the first instance, this might just be a matter of getting some of your staff, who understand your business processes and live with them day to day to make some educated guesses. (Of course, if you want to impress people with your Lean Six Sigma credentials and how scientific your methods are you will call these “Hypotheses”). You might map these graphically in a workshop situation – drawing on the wisdom of the crowd to get deep knowledge of what is going on in your business process.
The following illustration gives a typical example of one of those graphic methods – a “Fishbone Diagram” (Although again, us Lean Six Sigma geeks will call this an ‘Ishikawa Diagram’).
Each of these sources of delay is capable of measurement. We can work out which one is hurting us the most, fix it, and then monitor it to make sure it does not break again. Make a positive impact on these small things (Little x's) that are hurting the business and the big thing that we want to achieve (Big Y's) will follow along nicely.
This is just one method of many. And they are not all graphical – I just selected this one because it makes a nice illustration on a blog page. There are plenty of methods involving spread-sheets and numbers, statistics and what-not – things that your local, friendly Lean Six Sigma person will be delighted to explore with you in some detail!
There is a theory that has proven to be remarkably useful and robust in all sorts of situations - from vehicle manufacturing to health care to financial services.
But here is the second way that the Lean part of Lean Six Sigma can really help. Lean comes with a particular theory about how those ‘microscopic’ Little x variables are related to some really important big Y variables. In fact, it is a theory that has proven to be remarkably useful and robust in all sorts of situations - from vehicle manufacturing to health care to financial services.
The idea is that ‘flow’ is extremely important. ‘Flow’ meaning the speed with which product or customers move through your business. It is about the ‘smoothness’ of that flow – how free of lumps, and bumps and hold-ups. A key bit of Lean theory would be understood by the pilots of those aircraft I mentioned earlier; if the air flowing over the wing is fast enough and smooth enough then the aircraft will stay in the air. If there is low turbulence then the ride is smooth and fast and the customers remain happy.
And Lean would say that this theory is true of your business too. If you can make products and customers flow smoothly and quickly through your business then you stand a much better chance of staying aloft!
So a good place to start looking for Little x variables are things that measure speed of flow - delays, waiting and detours.
The good news is that you don’t need a PhD in aerodynamics to get your business off the ground. But you do need to keep an eye on those Little x’s if you want to soar with the eagles.