How to Make Better Decisions

Decision making is an essential part of business in all organizations. In traditional companies this power is typically held by few managers at the top of the organizational ladder. Lean companies however strive to empower their employees to make decisions at all levels through access to data, knowledge of evaluation methods, and defined standard processes. Nevertheless, decisions are necessary in all organizations and the following these guidelines can be beneficial.

1. Timing. Neither making snap decisions nor always having to “sleep on it” is the best approach to the time factor involved in making decisions. Make your decisions based upon the circumstance and the time available. Within the realm of practicality, give yourself enough time to take the following decision-making steps.


2. Define the problem. Be careful not to confuse symptoms of the problem with the real problem.


3. Identify the options. Try to get at least four alternatives. Since you may be too close to the situation, seek others’ input.


4. Gather the facts. In order to evaluate your options, you must gather the facts about the ramifications of choosing each option. List both the pros and cons of each option.


5. Evaluate the options. Usually this will include a comparison of costs, time required to implement and the expected end result of each option.


6. Choose and put into effect. Key, and often neglected, aspects of implementing decisions are to communicate the decision to the affected parties, outline why the decision was made, why the particular option was picked, what actions are required on their part and what beneficial results are expected.

There are several common pitfalls in decision making that should be avoided if you want to be effective.

1. Deciding alone. There are many benefits to consulting with others on a decision: gaining different perspectives, more resources to draw upon and more commitment to the decision by those consulted.


2. Every decision a major decision? Not every decision requires a lengthy decision-making process. Don’t get bogged down with minor problems. If they’re minor, make a reasonable decision and move on.


3. “The last time I was wrong was when I thought I made a mistake.” No one is always right. If you’ve made a bad decision, admit it and get started on fixing it. Remember – it’s impossible to force a bad decision into being a good one.


4. “Boy! I sure wish I hadn’t.” Just the opposite of pitfall #3. Because no one can be right all the time, don’t waste your energy regretting bad decisions. Get on to current issues.


5. Failing to use past precedent. Maybe the same problem has come up before and been effectively solved. Perhaps, if it has come up enough, there is a company policy that covers it.

Not every decision will be right but if you avoid these pitfalls and follow these six guidelines you will find you have many more right decisions than wrong decisions. Remember, the only thing worse than a wrong decision is no decision.

Quote of the Day 11/27/09

On Friday’s I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

Watch the little things; a small leak will sink a great ship. ~Benjamin Franklin

Point of Use Storage for Shine

Whether you work in a factory or in an office we all have to clean our work spaces. I am sure many these day contract cleaning services to some degree. Nonetheless cleaning floors is a necessary part of a shine routine.


When mopping floors hopefully you use safe practices and utilize signs to signal the floor is wet. Can you find these signs? Are they centrally located in a cleaning closet? Are they available for spills or do you have to call someone to get a sign? Do you have to stack them up and bring the signs with you to do the cleaning. Only later to come back and re-collect them.

There is a better way. Store your wet floor signs at point of use. The picture below shows an example of this.

The signs are stored on hooks in plain site along the side of walkways and work spaces. This ensures they are available when needed for cleaning tasks or to alert coworkers of a potentially dangerous situations like that of a spill.

Defining the Problem Statement

Einstein is quoted as having said that if he had one hour to save the world he would spend fifty-five minutes defining the problem and only five minutes finding the solution.

This quote illustrates an important point: before jumping right into solving a problem, we should step back and invest time and effort to improve our understanding of it.

The problem statement is a clear and concise statement that describes the symptoms of the problem to be addressed. Defining the problem statement provides three benefits for the team:
creates a sense of ownership for the team
focuses the team on an accepted problem
describes the symptoms in measurable terms

The following four guidelines are effective in creating a problem statement that is clear and concise:
Define the problem - In the problem statement, team members define the problem in specific terms. They present facts such as the product type and the error made.
Identify where the problem is appearing - Identifying where the problem is appearing, or manifesting, as specifically as possible helps the team focus its improvement efforts.
Describe the size of the problem - The size of the problem is described in measurable terms.
Describe the impact the problem is having on the organization - The description of the problem's impact on the organization should be as specific as possible.

The truth of the matter is that the more specific the statement, the better the chance the team has of solving the problem. An inadequate problem statement can lead the team down a dead-end path. When defining the problem statement try to avoid these four common pitfalls:

The problem statement should not address more than one problem.
The problem statement should not assign a cause.
The problem statement should not assign blame.
The problem statement should not offer a solution.

A simple and effective method of defining a problem is a series of questions using the five W’s and one H approach (5W1H: who, what, where, when, why, how).

Who - Who does the problem affect? Specific groups, organizations, customers, etc.
What - What are the boundaries of the problem, e.g. organizational, work flow, geographic, customer, segments, etc. - What is the issue? - What is the impact of the issue? - What impact is the issue causing? - What will happen when it is fixed? - What would happen if we didn’t solve the problem?
When - When does the issue occur? - When does it need to be fixed?
Where - Where is the issue occurring? Only in certain locations, processes, products, etc.
Why - Why is it important that we fix the problem? - What impact does it have on the business or customer? - What impact does it have on all stakeholders, e.g. employees, suppliers, customers, shareholders, etc.
How - How many parts are involved? How are you going to solve the problem? Using what method or techniques?

Each of these answers will help to zero in on the specific issue(s) and define the problem statement. Your problem statement should be solvable. That is, it should take a reasonable amount of time to formulate, try and deploy a potential solution.

A well-stated problem statement speeds a robust corrective action process. It helps identify potential root causes and eliminate bias and noise. Accurate problem statements save time and effort by focusing the team on root cause identification. Continuous improvement happens when root causes are found and permanently eliminated. Defining the problem statement is the first step in this process.

Quote of the Day 11/20/09

On Friday’s I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

“I say an hour lost at a bottleneck is an hour out of the entire system. I say an hour saved at a non-bottleneck is worthless. Bottlenecks govern both throughput and inventory.” - Eliyahu M. Goldratt, The Goal

A Lean Journey Now on Twitter and LinkedIn

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Join the newly created LinkedIn group A Lean Journey LinkedIn Group. All the posts from this blog will feed this group. This allows anyone in the group to post and/or discuss lean news items from any source promoting sharing within the lean community.

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The Key to Upcoming Retention Concerns is Recognition

A WSJ article yesterday talked about a growing concern for businesses to retain top talent. The author indicates that based on historical data workers will look elsewhere as the economy improves. This would pose a significant problem to those employers who may have weeded out weak performers while keeping top performers during this recession. A survey from last winter cites pay and benefits as the most important factors employees' value. Normally I would not concur with this but can understand with this recession why compensation is a top concern for workers.

While some companies struggle with how to financially reward their employees others are finding ways to involve their work force more in the business.

"We will not retain our staff if we can't get them to believe in us," Mr. Stack says. "If you value your employees, their trust will grow and they will not look around for another position."

According to the DOL, employee turnover cost American businesses about $5 trillion each year. Employee recognition is still one of the powerful strategies to combat turnover. A recent HR Daily Advisor Tip covered eight keys to successful retention. The advice includes exuding confidence in employee's ability, including significant others in praise, knowing what motivates and inspires employees, encouraging employees develop new skills, and simply saying thanks. Successful companies learn that you get what you reward.

In Lean retention and recognition come under the respect for people pillar of TPS. Respect for people comes from organizations building employee relationships that are fulfilling for their people as well as for the business.

How does your organization value employees and show appreciation?