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THE POWER OF LEO
THE REVOLUTIONARY PROCESS FOR ACHIEVING EXTRAORDINARY RESULTS
By SUBIR CHOWDHURY
The McGraw-Hill Companies, Inc.Copyright © 2012Subir Chowdhury
All rights reserved.
Back in 2003, the chief executive of a large East Coast hospital invited me to an 11 a.m. meeting with him and his leadership team. "We have a problem," he began. The organization had gone through weeks of training in Six Sigma with the goal of trimming waste and boosting efficiency. But six months later, the results were meager. He wanted to know if I could help.
In the course of our talk, I asked each of the six executives what I thought was a simple question: "You learned a lot of tool sets during your training, so tell me what percentage of them you've been able to apply in your work." The answers shook me. "Fifty percent," said the chief medical officer. "Thirty percent," said the CFO. All six of them had the same basic response: a huge chunk of the Six Sigma tools they had spent so much time learning was simply inappropriate to their needs.
It's ironic in a way. At a time in history when we have, more than ever, an abundance of impressive management tools to help us seriously ratchet up performance, most of us have made only marginal gains. Lean manufacturing, reengineering, Total Quality Management, Six Sigma: on and on the list goes. A handful of inspired leaders—Jack Welch of General Electric comes to mind—have made the most of these tools. But many companies have invested huge amounts of time, energy, and cash in them without significantly improving the quality of their operations.
After the meeting with the hospital leaders, I called my own team together. Now I was the one saying, "We have a problem." Like the rest of the management community, we had been automatically introducing the whole gamut of Six Sigma and the other management tools into companies without having an in-depth understanding of the companies' goals, their cultures, or their core strengths and weaknesses. "We have to change," I said. "We have to start tailoring the tools to fit each company's circumstances." No more cookie-cutter presentations for us.
That was when we began to develop the management approach that we now call LEO, for Listen, Enrich, and Optimize, and we have spent all the years since then putting it to the test in one organization after another. It has passed with flying colors, because LEO is not simply another management tool; rather, it is an overall methodology that makes it possible to apply management tools to maximum advantage. In other words, LEO represents a new mindset, a transformational way to think about the decisions that managers on every level make and the actions that they take. It is a system devised to help companies dramatically improve their performance, to make quality part of their corporate DNA.
When I go to visit a company today, I explain the LEO strategy. I assure the leaders that whatever suggestions we make, and whatever management tools we employ, will be geared precisely to their company's special needs and particular makeup. If they follow the LEO methodology, they will achieve a major, measurable increase in the quality of their operations, their products, and their bottom line.
In the chapters ahead, I explain the various aspects of LEO in detail. I also show through case histories how it has actually been implemented, although the names of the companies described and sometimes the products or services that they provide have been altered to protect their confidentiality. Right now, though, I would like to introduce you to the basic elements of the LEO strategy:
LISTEN: Observe and Understand. To obtain a deep comprehension of the issue at hand, put aside past assumptions and interact directly with all relevant parties—specifically including customers, suppliers, and employees. Add to your findings whatever relevant data can be uncovered.
One of a company's two call centers was experiencing many more database- entry errors than the other. Company managers suspected that it was a training problem, assuming that the errors were concentrated in the third shift, where most new hires were assigned. We began the Listen process with intense data mining of the center's records. When we analyzed the figures, we discovered that most of the errors were in fact committed during the first shift and were clustered in a single row of 20 workstations—a row that was next to the windows. The glare from the windows was making it difficult for workers to see their screens clearly. Our suggestion that the company cover the windows was vetoed by the public relations department, which led frequent tours through the center. Instead, tinted window glass was installed and glare filters were added to each workstation. Entry errors were reduced by 95 percent.
ENRICH: Explore and Discover. Based upon the information you have gathered, reach out to all relevant parties for ideas and possible solutions. The wider you cast your net, the more likely it is that you will move beyond the usual suspects to discover new and better answers.
At a hospital division serving the elderly with neurological problems such as Parkinson's or dementia, we discovered in the Listen process that many patients had to go through three to six weeks of tests and waiting for results before a diagnosis could be delivered. If a patient arrived complaining of dizziness, say, she might be tested for an inner ear infection; if the results were negative, she would be tested in the next day or two for another possible cause; and so it went as the weeks passed. Based on our observations and numerous interviews with patients and staff members, we created a detailed map of the existing process, identifying areas of waste and inefficiency. With that laid out in front of us, we entered the Enrich phase of LEO, using analytical tools to develop new and improved patient flow.
Today, after an in-depth interview with a geriatrician, patients are given a series of basic tests on the first day that cover most conditions. Then all of their doctors get together to consider the results and jointly arrive at a diagnosis and treatment plan. Their conclusions are passed on to the patients by a neurologist or geriatrician. The whole process can take as little as two days.
OPTIMIZE: Improve and Perfect. Examine the solutions you have found and select the best. Subject it to every kind of challenge it might conceivably encounter, and correct any and all possible shortcomings.
When a new application was found for its electric motor, a company's engineers would come up with a design and put the result through a 12-week process to make sure it worked properly. If it failed the evaluation, they would come up with another design and go through the whole process again. We suggested another approach that is part of LEO's Optimize phase. Instead of focusing on the nuts and bolts of a particular design, we turned our attention to the essential purpose of the motor—to transform electricity into torque, causing a shaft to turn. We eventually found that by closely measuring the efficiency of that transformation under various conditions, we could accurately predict whether a new design would pass the evaluation process. Now, rather than putting a new design through a dozen weeks of testing, the engineers can determine its quality in all of 10 minutes.
By rigorously and consistently using one or all of the LEO guidelines, these three companies achieved far higher levels of performance, thereby measurably enhancing their products, services, and finances. That's because LEO can find answers to the questions that plague managers everywhere: Why are my sales dropping off? What can I do about my excessive scrap? How do I reduce high turnover? How can I match my competitor's price? Wh
Excerpted from THE POWER OF LEO by SUBIR CHOWDHURY. Copyright © 2012 by Subir Chowdhury. Excerpted by permission of The McGraw-Hill Companies, Inc..
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