Wednesday, October 12, 2016

Innovate or Perish

By Len Ferman

Innovating for Your Company's Future - November 1, 2016
Change is the one constant that we can always count on.  And as part of the process, you can either be a change-agent or you can be on the receiving end of that change.  For businesses, this often means the difference between life and death. Don’t believe me?  Run down to your local Blockbuster and grab a movie?  Go for a run on the beach and take your state-of-the-art Kodak camera. Once you find a way to do either of those things…give me a call on your Blackberry.

The truth is the struggle for survival in the business world is real. The average corporate lifespan of an S&P 500 company is only 18 years, that’s down from 61 a half-century ago. It’s hard to fathom that companies of such magnitude can come and go so quickly. The message is clear – companies must innovate in order to position themselves to continue winning customers in the future. The rapid pace of technological progress now impacting all markets is shortening the window for existing business models to operate profitably. Simply put, how you make money today, and your existing customer value propositions, will not work forever. They may not even work two years from now. Only the companies that are working now to develop their next business model in their industry will survive. While companies that focus all of their energy and resources on current business models, will eventually find their customers will have gone elsewhere. It generally happens quicker than they ever thought possible.

A great example of rapidly changing business models happened in the DVD rental market. Just a few short years ago, most consumers rented videos by driving to a local Blockbuster retail store.  Blockbuster was one of the great startup success stories in American history, growing from scratch in the mid-1980s and topping out at more than 9,000 retail stores in the last decade. Netflix, however, usurped Blockbuster by introducing a superior business model based on renting DVDs by mail. Blockbuster initially saw Netflix as a tiny startup with no potential to make a significant dent in their market share. As a result, Blockbuster chose not to invest in the mail rental business. Netflix continued to grow and refine the mail rental business in ways that Blockbuster never anticipated. When Blockbuster finally realized they needed to compete in the mail rental business, it was too late. Netflix had perfected that business model and was already working on the next generation business model – streaming video. Today, Blockbuster is gone by way of bankruptcy. Meanwhile, Netflix has a market cap of more than $40 billion – or five times higher – than Blockbuster at their peak. Netflix is an unusual success story, not only did they dethrone an industry giant, they are one of the few large companies that have been nimble enough to migrate from one successful business model (DVDs by mail) to a completely different business model (streaming video). In doing so, they retained the dominant #1 market share. As a result, Netflix stands up as one of the greatest innovation success stories.

Companies that want to thrive - not just survive - must learn how to have the nimbleness of Netflix. They must learn to become great innovators. That means they must have the foresight to invest some of their resources today, to identifying and testing future business models. They must constantly monitor the market they serve, to understand changing customer needs and new industry best practices. Then generate ideas that satisfy those needs and go a step beyond those best practices. They need to shape those ideas into prototypes that can be tested with their customers. By doing so, they are constantly designing their future and forecasting the direction of the market. When they notice the market condition changing, they’re ready to seize the opportunity by launching their prototypes. Companies like Netflix are excellent examples of this today.

On November 1, Len will teach a one-day, class at UNF Continuing Education, Innovating for Your Company’s Future. This interactive class will feature a combination of classroom learning and hands on skill development.  The class is designed to provide mid and senior level managers and business leaders with the tool set and skills necessary to enable their companies to innovate and grow.

About Len Ferman

As a teacher, speaker and consultant, Len Ferman helps organizations in the area of business innovation.

Ferman has 28 years of experience in innovation with some of the world’s largest companies.  Prior to founding Ferman Innovation, he led the front end of innovation and was head of ideation at Bank of America. He is a frequent speaker at conferences, including:
  •  2012 World Future Trends Summit
  •  2013 Market Research Event
  •  2014 Customer Experience Leaders’ Summit -  keynote speaker
  •  2015 Corporate Researcher’s Conference
  •  2016 CSX Fusion Conference
Len holds two master's degrees from Duke University (M.B.A. in marketing and a master’s in economics). Len has also been an adjunct professor of marketing at the University of North Florida, where he developed a course on business innovation.

Monday, October 3, 2016

Maximizing Lean Six Sigma Financial Returns

By Keith Gardner

Many organizations fail to get the most out of their Lean Six Sigma Programs because they fail to lay the proper foundation for success. Before training green belts and black belts, organizations need to create a framework that will empower and enable the Lean Six Sigma program participants to maximize the financial return to the company. Failure to follow the framework will result in a failure to maximize financial returns on the program. Specifically, there are seven key phases that the program champion needs to lead the company through.

Engage the Leadership
Before doing anything else, it is imperative that the organization’s leadership be aligned in terms of the vision for productivity and quality improvement, as well as the goals and objectives of the Lean Six Sigma program and the resource commitment that will be required.

Create Deployment Plans
As with anything else, “a failure to plan is a plan for failure.” Detailed deployment planning that lays out the tasks that must be undertaken, along with timing and responsibility, is key. This ensures that all necessary tasks are identified and provides a roadmap to measure implementation success.

Establish Project-related Processes
It is through the successful selection and completion of projects that an organization derives the financial benefits of Lean Six Sigma. Ensuring that a robust process is in place to select, support and track projects is key to maximizing financial returns.

Create Supporting Infrastructure
The degree of infrastructure required depends upon the size and complexity of the organization. For larger organizations, setting up IT infrastructure for things such as project tracking, communication, knowledge management and program reporting may be required.

Deploy Resources
This involves not only training the champions (black belts and green belts) but also ensuring that the right people are selected for the training. Concurrently, mentoring and coaching systems need to be set up to ensure adequate technical support for people leading project teams.

Institutionalize the Program
Integrating Lean Six Sigma into existing systems is a key for program sustainment. Weaving the Lean Six Sigma program into systems such as employee reviews, communication tools, etc. is critical for making the program an integral part of the way the company does business rather than “just another program.”

Continuous Improvement
As the saying goes, “Eat your own cooking.” A robust “things gone right/things gone wrong” analysis with every project needs to be combined with management feedback and other information sources in order to drive continuous improvement activities. Over time, additional activities such as extending the value chain to customers and suppliers need to be undertaken.

If organizational leadership simply trains a group of green belts and black belts without consideration to the above areas, success will be limited. In this case, the shortcoming is not with the ability of Lean Six Sigma to transform the organization, but rather with organizational leadership that is looking for a quick or easy fix. There is no free lunch. The organization will get out of Lean Six Sigma what it puts into Lean Six Sigma. 

Course Schedule (Click titles for details.)

The Center for Quality & Process Improvement at the University of North Florida offers a combination of training, consulting and facilitation designed to meet each client’s unique needs. UNF offers online and instructor-led courses, as well as contract classes, consulting and facilitation in in more than 40 topics all related to continuous improvement and enhanced organizational performance. Visit for more information.

Keith Gardner has been consulting and training in the area of quality and productivity improvement for the past fifteen years. As the lead instructor, his primary focus at UNF is Lean Six Sigma. He regularly consults with managers and senior executives in the implementation and enhancement of organizational Lean Six Sigma programs.

Gardner has worked with hundreds of clients in 24 countries in telecommunications, logistics, health care, call centers, staffing services, governmental agencies, the military, engineering services, food, automotive, metals, electronics, chemicals and furniture. He has a degree in chemical engineering from Carnegie-Mellon University, an MBA from the University of Michigan and is an ASQ-certified Black Belt.

Tuesday, August 2, 2016

The Need for Lean Six Sigma in Healthcare

By Keith Gardner

In most manufacturing companies, when a defect occurs, the manufacturer has to scrap out or rework the defective part. In most of the service world, when an error or mistake is made, they have to redo the work or, perhaps, placate an upset customer. However, in the healthcare world, when a mistake or error is made, the results can be much more serious; in fact, frighteningly so. 

Because of this, the healthcare industry (hospitals, medical device manufacturers, large medical practices, etc.) have recognized the need for process improvement to reduce the frequency of adverse patient outcomes resulting from process shortcomings. 

Many of these organizations have begun to embrace the use of Lean Six Sigma. Lean Six Sigma allows a service provider to proactively reduce, or in some cases, eliminate, the potential for a mistake or error, opposed to solely relying on redundant checks to try to inspect in quality. It also allows organizations to reduce the waste (non-value-added) activity in their processes to not only lower costs, but to allow a greater focus on the value-added steps associated with caring for patients. Thus, Lean Six Sigma enables improvements in quality, productivity and customer satisfaction.  It also enables improvements in employee satisfaction by reducing non-value-added activity and time. 

The challenge, for most healthcare organizations, is that Lean Six Sigma is viewed by many as a manufacturing program and that is requires standardization of processes that inherently need to be flexible and allow for a human element.  If implemented properly, this is just not true. The key is to ensure that Lean Six Sigma is employed on the right processes with the desire of reducing non-value-added time and non-value-added work, so that healthcare professionals can focus on the value-added work that they do.  For example, how do we reduce the time that needs to be spent on billing?  No one in healthcare would object to that.  An actual example of how Lean Six Sigma helps reduce problems and waste comes from a hospital and its operating rooms.  Each surgeon has specific needs and preferences in terms of equipment and instruments and how they are located and arranged for surgery.  Routinely, the operating room was not set up to the surgeon’s needs.  Often this was discovered after surgery had begun, necessitating a rush to remediate in the midst of a (often complex) surgical procedure. Using the tools and methods of Lean Six Sigma, a Green Belt undertook a project to reduce the frequency of this problem from occurring.  She was able to reduce the frequency of occurrence by more than 80%, improving quality of outcomes and also enhancing customer satisfaction from both the patient’s and surgeon’s perspective. 

In today’s rapidly changing healthcare market, it is imperative that healthcare organizations become both more cost effective and more quality conscious with the goal of ever increasing patient outcomes. Lean Six Sigma offers a roadmap to enabling improvements in productivity, quality, customer satisfaction, and ultimately profitability.

Contact John Yancey or Edythe Abdullah to learn how Lean Six Sigma can help you and your organization. 

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