Boeing Internship: Thoughts and Lessons Learned

The posts have been a bit light for me the last week or so because I was in Mesa Arizona doing an internship at Boeing. Not only has it been difficult to carve out time to write, but the Internet connection at the hotel was $9.99 for a 24 hour period! Ouch. As part of my lean journey within the Air Force, I have been lucky enough to attend the University of Tennessee and now to do an education with industry program with Boeing. Besides the amazing weather in Arizona it was an incredible opportunity to embed myself within a major defense contractor and see how they are implementing and benefiting from lean within their organization. It proved even more valuable than I originally thought because learned a lot about how they run their business and what the other side of the fence in the acquisition world is like so to speak. Since I am behind the desk in the Air Force purchasing large weapon systems and systems support it was great to see how the company brings the government requirements to fruition. But beyond the lessons that just apply to lean or government acquisition are the lessons apply to more broad topics. Great experience that will be one I remember and use forever. Here are a few things I took away from my time spent in Mesa as well as some cool pictures.

1. Internships/Education Within Industry Is Extremely Valuable - I have written about benchmarking before here on BadskiBlog. Every time I partake in these pseudo field trips I am amazed at the nuggets of knowledge I pull from the experience. They teach us in kindergarten that getting outside your element is valuable, but as we grow older we seem to forget that lesson. The military as a whole is especially resistant to learning from outside organizations. Its a culture that believes that what we do is unique and so different that lessons cannot be gleaned from other industries. This outlook builds complacency and stymies creativity. At Boeing I have learned that we share very similar challenges and often come to similar solutions. With regard to implementing lean within the culture of the organization Boeing struggles from the same resistance from naysayers. Boeing struggles with bureaucracy. They struggle with bridging the communication gap between leadership and lower level workers. Some times it takes looking in someone elses kitchen to be able to see how your organization really is. When you see their issues and challenges you can look back to your organization and begin to see how they may affect you as well. Luckily you can do the same with successes. Nothing is ever directly transferable to your organization from another, but you can take winning ideas from one organization and morph them into a success within your organization.

a selfish standpoint the trip was a great experience as well. The trip shrunk the sea for me. When you are in your own little routine and day to day life you think that there is so much out there and that other organizations are so different. The trip helped me to realize that people are people everywhere. Whether in Boeing, the Air Force, or on a pro sports team the dynamics of social interactions are the same everywhere. The trip helped to take Corporate America off a pedestal for me. Its similar to the grass is always greener on the other side mentality. You see how messed up your own organization is some times and you get to thinking that other organizations are heads and tails above you. The truth is they probably aren't. My old coach used to always say "when you win you are never as good as you thought you were, and when you lose you are probably better than you thought you were." Its easy to get frustrated with your own struggles and begin to think that the other team, in this case Corporate America, is utopia. It's not. I think it was healthy for me to see that and it helps to ingrain within me that I can and will be successful in any organization if I put in the effort and passion. Bottom line: get out of your comfort zone and experience new things. There are always lessons to be learned.

2. You Can't Optimize A Part At The Expense Of The Whole - Basically this means that you can't try and improve one area of the business and expect it to boost results for the business as a whole. Our organizations are often broken up functionally, regionally, or a million other ways. Although it may help with chains of communication or with allocating resources it often creates a stovepipe mentality where people are only concerned with their narrow view of the overall business. We all fall into this trap. However, optimizing one area will not necessarily benefit the business as a whole, in fact it often harms other functions and the company's bottom line. If your doctor tells you that you need to start working out to lose weight and all you do is bicep curls would you necessarily say you are healthier? A systemic approach must be used to truly improve an organization.

3. What Gets Measured Gets Done - Leaders can use this to their advantage, but often the metrics within a company are not aligned with the strategy. People will work hard and in a way that exploits the metrics that are being used to measure them. There is nothing wrong with this, in fact when you look at providing for your livelihood and your family you would expect nothing less. With a lean strategy the customer should always be the focus. What are your customers expectations and how are you meeting them? Is there a gap in your satisfaction of customer requirements? If so, that is where your efforts should be focused. However, what often happens is the company or organization measures things that do not matter to the customer at all. In turn, employees work to those metrics instead of satisfying the customer.

An example at Boeing, and at manufacturing plants across the world I am sure, is the productivity measures of individual employees. There are time standards for parts and how fast they complete the parts as compared to those standards is how the craftsmen are measured. Does the customer care how fast Joe Metalworker finishes part X? You might find yourself saying well yeah kind of. From a lean perspective that is a tell tale sign the answer is no. The customer, who in this case is the Army, wants an affordable, capable, and available helicopter. They don't care how fast Joe makes part X of the helicopter. They want the entire copter when they need it, they want it to work, and they want it for a fair and reasonable price. You might be thinking that if the chopper doesn't have part X then it can't fly. That is true. But what if there are twenty part X's in the warehouse? What if the only reason you can't get a helicopter out faster and cheaper is due to the availability of part Y? Then you are pumping out extra part X's because Joe Metalworker is measured on his productivity rate, even if making more of those parts is costing the company thousands of dollars in inventory. Multiply examples like that across the company and you can see very quickly how much what you are measuring can negatively affect your overall business strategy.

4. Real Leaders Think Big - Real leaders don't think big in the sense that they can cure world hunger. They think big in that they see all the pieces of the puzzle and how they are interconnected and interrelated. Great leaders drive that large vision scope down to the lowest level and inculcate it into the culture and lifeblood of the organization. They constantly asking "does this benefit the company as a whole or more importantly the customer." As I have preached before the two are inextricably linked. Much of the value of my Boeing experience was shadowing the lowest shop floor workers and feeling their struggles and delving into their daily realities and how they affect the company culture, and then shadowing upper management and seeing their struggles to take a strategy and actually have it come to fruition throughout the lowest levels of the company. Great leaders bridge the gap between creating a vision in the boardroom and having the average worker actually live it.

5. Labor Is Cheap - Everyone focuses on labor. Every day in any newspaper across the country you can read about company X and how they are laying off X number of workers. Labor should be the last to go. Plain and simple. Those who get lean realize it is a growth strategy (see my post here). What happens when you grow and you are thin on bodies? You cannot meet or more importantly exceed customer demand; it is only a matter of time until you are dead. Boeing nailed this point home for me and I will never forget it. We were doing some time and motion studies at Boeing, which are pretty brutal. They basically time a worker on how long it takes to do a given process and how much motion in the form of walking, set up, etc. they are doing per job. Then you take the data you collected and you see how you can lean out some of the process, or reorganize the workplace to speed up the time it takes to do X process. Most of the sexy tools in lean are used to focus on processes that involve people (labor), because they are the most visible and you can interact with the people and get feedback. But that is not where your money is. At Boeing we found a way to speed up some part making processes through workplace reorganization. But does that savings necessarily translate into a monetary savings or better yet increased throughput of the product as a whole? No. Not necessarily. In this case a production manager who was performing roughly three job descriptions was forced to batch parts to be delivered over to the paint shop. He did so, because he didn't have time to deliver the parts as they were produced. He would always deliver them at the end of the day. So even if we cut time off the part making process the parts would sit until the end of the day to be delivered anyways. See number 2 above! Well what should Boeing do instead? Studies have shown that industry averages of costs are typically broken down as follows:

Overhead Costs - 34%-36%
Material Costs - 60%
Labor - 4%-6%

Material makes up the majority of the costs. This is especially true in a giant defense contractor like Boeing. So why would you waste your time trying to get Joe Metalworker to go faster when you can focus on inventory which is your largest cost. What is more enlightening is tying the concepts to actual numbers. Here are some of the rough numbers we ran at Boeing. We said that the burn rate for an employee on the shop floor is roughly $200/hr. That includes their salary, benefits, cost to operate the plant/employee, etc. There were 10 employees working 8 hrs/day. This means the company spends roughly $16K on this backshop's labor for a given day. Lets say we lean their process and get a 10% reduction in cost. We would be roughly saving $1,600 per day. We focused on one of the 271 parts that are made in the backshop and found numerous bottlenecks, broken processes, and lack of visibility as to how many parts were in the system. The cost to the company was roughly $4000 per piece. We found 20 pieces within their process (WIP), which equates to about $80K in inventory costs. If we leaned that process and made a 10% reduction in inventory on that one part along we would save $8,000. That is half a day's labor for every employee in the shop! Not to mention that Boeing sells the part to the government for $9,500 which brings the inventory cost up closer to $200K. You can see that this strategy applied to all the parts made in that back shop would dwarf any improvement effort geared towards labor, or more importantly and layoff strategy you could implement. Labor is cheap!

6. Just Because Something Is Simple Doesn't Mean Its Easy - Concepts are easy. Implementation is difficult. Creating/changing a culture is extremely difficult.

What You Can Learn From A Homeless Guy, A Crowded Italian Restaurant, And Some Red Wine

For those thinking that you are diving head first into the depths of a story detailing drunken debauchery involving a homeless transgendered prostitute named Colombia, I am sorry to disappoint. You are wrong. Even without shock value and Hollywood story lines there are plenty of day to day experiences we can learn from, and I am making an effort to do a better job of being aware of my surroundings and committed to learning from my experiences and others. Last night was my wife's birthday so we thought it fitting to head into the North End of Boston to indulge in some authentic Italian food, drink some wine, and celebrate.

On the way down we were stopped at a busy intersection of Mass Ave and 16. There was a homeless guy with a sign trying to collect change from the windows of the cars. In Portland, Oregon these homeless guys typically sit on the corner with signs awaiting to be flagged over. In Philly these guys walk up and down the different lanes providing a guilt inducing death stare in hopes of some change. I guess it has something to do with the social demeanor of the state or city at large. People in Portland are generally less confrontational and edgy than people in Philly. This homeless guy was more on the Philly end of the spectrum and was weaving in and out of traffic as cars edged their way through the busy intersection. But this guy was different than most homeless guys I have seen. He held a sign like most other homeless guys but it told a different story, it had a different angle to it. Most homeless guys go for the standard "Will work for food" or the "Need change to feed my children" lines. Or if you are lucky you might run into the token brutally honest homeless guy who writes something along the lines of "Need money for beer. Hey at least I'm honest." Good for a laugh but not terribly inspiring. Mass Ave homeless guy had a sign that simply read "If you have no change, JUST SMILE!" Wow. That's awesome. If I was homeless that would definitely be one of those 'why didn't I think of that' moments. And it wasn't just the sign, this dude lived it. He was smiling wide as can be and dancing with his sign as a badge of honor over his chest. One of my friends rolled down the window and yelled to the guy to come over for some change. As he approached he continued grinning and asked us to turn up the tunes. As my other buddy stumbled through country radio stations and random talk shows to eventually land on Jack Johnson (not exactly the most danceable music I can think of) the guy just kept on laughing and dancing for the rest of the traffic/audience. It was pretty hilarious. As we drove off and rolled up the window my buddy said his breath smelled like "10 gallons of stale beer," or something to that effect.

We drove into the North End and jumped to the front of the line at the restaurant called Giacomo's. My friend's wife was waiting for us there and had been there for a little while. Yes, there is a line outside. And yes we waited to get in. Yes it was a Wednesday night at 6 pm in a neighborhood with probably a hundred other authentic Italian restaurants. Why? Well because our friends said that is what you do when it comes to Giacomo's. For those of you who don’t know what Giacomo’s is all about (like me until yesterday), it is basically a restaurant in the North End of Boston that is about the size of your kitchen. It has a reputation as being one of the better Italian restaurants in the area, which is saying a lot given the concentration of Italian restaurants. And there is consistently a line waiting to get in that often wraps around the corner onto the next block. We got in and got seated, and one of the first things I noticed was how easily my chair slid across the olive oil soaked wood floors. We sat down and honestly I must say it was some of the best service I had ever had. Everything was full speed ahead but it was personable and friendly at the same time. We had bread in seconds, the guy came back and mixed up some fresh ground Parmesan and garlic in the back for our oil. The plate of calamari was there in what seemed like minutes, steaming hot. It was great. What was surprising from a place that has such a solid reputation and a constant line to get in, was that it was very reasonably priced. The majority of the generous sized entrees range from 12 to 16 bucks and the bottles of wine are about $15. Most restaurants, especially those deemed as nice trendy ones, charge almost that much for a glass of wine. I had the shrimp and scallop linguine in a giacomo sauce which was a lobster red sauce. It was delicious and my water and wine glass never stayed empty for long. As soon as a plate was done it was gone. When all the plates were gone the bill was on the table. It was fast. They were churning and burning people through that place. But you didn’t feel rushed. Our waiter told us to take our time finishing our wine and we did. It was a beauty place.

Why I am recounting these stories on BadskiBlog? Well truthfully I want to immortalize my experiences in cyberspace so my grandkids can know what I did when I was drunk at 27….just kidding. I am setting the scene to describe what I learned from theses events.

1. Differentiation is a powerful thing – In order to be successful you must be different. I mean I guess you can be successful by your own standards and live a fairly uneventful content life, but I don't live my life that way. The Mass Ave homeless guy was different than other homeless guys. He told a story that made you want to give him money. He could have been like everyone else or even pulled the honest homeless guy approach judging by the smell of his breath, but he didn't. And I would venture to say he benefits greatly from being different. My friends remembered him and talked about him like he was more of a landmark than a mark on the neighborhood, and I am talking about him on my blog so he is obviously doing something right. Giacomo's follows a similar path. It would be quite easy to be just one of the many good Italian restaurants in the neighborhood. All those good Italian restaurants probably make a pretty good living just by being a good Italian restaurant in that neighborhood. But Giacomo's is different. They are a great restaurant in that neighborhood and they have established a demand for what they have to offer that consistently has people lined up down the street every day of the week. Whether you are starting a business or applying for a job it pays to differentiate yourself from the crowd.

2. If you believe in your strategy stick to it no matter what conventional wisdom says – This kind of goes hand in hand with differentiation but its a little different. I may be way off on this, but I imagine Mass Ave homeless guy chatting with some of his buddies and describing his new sign. I imagine them making fun of his approach and telling him how it won't work and that the best way get change is "strategy X". Judging by how this guy put on a show in the middle of a busy Boston street, he believed in his message. Like I said I could be way off and none of that was remotely close to ever taking place but you get the idea. Where this concept really manifests itself is with Giacomo's. Conventional wisdom would say that if you have a restaurant that has built a reputation for having great food and people are waiting outside you should either expand to allow supply to meet demand or you should raise your prices to maximize profits with the existing amount of people you can serve. However, Giacomo's didn't and doesn't do that. In fact by most standards their food is actually cheap. They have not expanded, and it seems like the line out front is almost part of the experience. What Giacomo's has done is create scarcity. They let their reputation for great food and great prices spread their message. Then they go for an increased throughput approach combined with great service. Their place of business seems like a collection of contradictions, but they believe in it and they have created an experience worth talking about which in turn has differentiated them from the masses. If they listened to conventional wisdom who knows where they would be right now. With the competitive nature of the restaurant business quite possibly out of business.

3. Create an ethos around your business and love what you are doing- Tell your story and live it. Both the homeless guy and Giacomo's created a living concept that embodies what they are all about. Those who come into contact with both entities know instantly that this isn't just an average corporate mission statement. They believed in it. Mission statements are boring. Living out an ethos is more exciting. Mission statements feel bureaucratic and structured. An ethos feels alive and carries an aura of what you or your company is all about. You can't fake an ethos, because if you fake it then it really isn't an ethos, its just a marketing strategy that you are doing a horseshit job of selling. Customers, employers, co workers, friends, people, etc. all instantly sense insincerity and inevitably will gravitate towards another entity that lives it.

I am sure I could probably dig for a few more lessons from the night, but I am trying to become naturally observant of the lessons surrounding me. If you have any other lessons based on my tales or life education lessons of your own please post them up!

General Motors, Bankruptcy, And Lean

This is a very interesting article at the new challenges at GM. During my two weeks at the University of Tennessee Center For Executive Education we spent a lot of time talking about many of these issues and how continuous process improvement and developing a lean strategy can counteract many of these issues.

The article talks about how there is a culture of fear and bureaucracy. I can relate as I see many of the same issues in the bureaucracy known as the US Air Force. Lean can help to break the culture of fear as it empowers teams to make rapid change and engage in a culture that is focused on creative problem solving instead of the ‘status quo’ approach.

In the meantime, Henderson is tackling GM's glacial decision-making process. A couple of four-hour meetings have been cut in half. Gone are the "premeetings," when the agenda for the real meeting was set. "I don't have time for that," Henderson says. Delegation, never GM's strong suit, is now an imperative. In early April, just after Treasury made him CEO, Henderson and several executives were discussing whether to add some pricey features to a future Buick model. Some wanted to save a few bucks while others figured they needed to step out and show consumers that the brand is truly upscale. After some debate, Henderson turned to Buick-GMC boss Susan Docherty. "You're the vice-president of Buick," Docherty recalls him saying. "Make the call." She opted to spend the money, and that was fine with the CEO. "Fritz is creating a culture where we don't need 17 meetings," Docherty says. "In the old GM, we would have to hear from everybody."

In the AF we have meeting after meeting to prepare for a meeting that is a month away. It gets pretty ridiculous. Part of our class at U of T was centered around applying lean to business and administrative processes. Many companies and organizations disconnect their administrative inefficiencies from their company’s bottom line and in this case manufacturing throughput. They are inextricably linked in all cases. It is easy to point to labor and other cost cutting techniques as a solution to your problems but where does that lead. You can only cut costs a finite amount. Read my lean as a growth strategy rant here for more on cost cutting versus a throughput strategy.

Henderson has been careful not to criticize Wagoner. But he has begun dismantling some of his mentor's initiatives. Wagoner was a data geek who used nearly 10 metrics to measure his executives' performance. Not all were particularly relevant. Henderson says he has boiled those down to the five most vital for each department, with a much bigger emphasis on sales and profits. Under Wagoner, people were focused on minute details that meant more to their own departments than the overall company. "We got a little crazy with metrics," says Chris Oster, GM's organizational czar.

This paragraph is encouraging. So many times we optimize functional silos at the expense of the whole organization. If GM is looking at steering wheel metrics and sees that the steering wheel department is manufacturing wheels at 95% utilization and is pumping out 1000 a day what does that mean? Well I can tell you what it doesn’t mean. It doesn’t mean that the company has the capability to produce any more cars. It is that fractioned way of thinking that leads so many large companies down a path that opens the door for creative destruction. The different departments must be aligned to the company’s strategy.

The feds want Henderson and Whitacre to lure the kind of talent that will help GM reach consumers the way it did when legendary Chairman Alfred P. Sloan Jr. turned the company into one of the best carmakers in the world.

I think this quote illustrates a fundamental flaw in the government way of thinking. They want GM to make cars that people want and to do so profitably. However Sloan was famous for his quote "A car for every purse and purpose". A quote that is less applicable now to GM than it has ever been. Given the problems discussed above and their lack of a problem solving lean culture, trying to be everything to everyone is a strategy that is doomed to fail. I am not trying to infer that there is an easy answer all of GM's problems because there is not, and there will likely be many job casualties along the way regardless of how many people/interest groups try to fight it. I am just saying that there is an obvious culture shift that must take place and thinking that bankruptcy is going to solve all that is crazy. Toyota has been going down a journey of continuous improvement and lean problem solving techniques for half a century or more and they are the best in the world at doing it, and they still struggle with it every day. A bankruptcy, a new CEO, and a few years are not likely to turn GM around very quickly, although they do have one hell of a burning platform.

Sales Vs. Marketing - Checking For Charity

As the Checking For Charity Movement begins to stand up it's website it is articles like this one that get me thinking of the best way to strategically roll out our marketing push. I got this post of Seth Godin's blog and it really hit home to me when I read it.

The difference between marketing and sales
Marketing tells a story that spreads.
Sales overcomes the natural resistance to say yes.

If you don't pay the sales force (because you go direct, or you go free), then who is going to do that for you? The only answer that occurs to me is, "your users/fans/customers."

This means that a critical element of any strategy that ditches the sales force is to figure out how you will empower and encourage your customers to take their place. Easier said than done.

Hopefully the nature of Checking for Charity doesn't require our movement to persuade others to say yes. Hopefully people are inspired by the inherently good nature of our corporations existence so much so that they truly want to make a difference whether that difference is donating monetarily or spreading our story to others who are empowered to grow our movement. If you are at all interested in the Checking for Charity movement leave a comment below or email me at truecore27@aol.com.

Strategic Life Focus

I have been thinking a bit more about the Post For The Optimists and how we as humans react to adversity. It is not easy to stay positive. I think most people would describe me as a positive person, however those who know me also know that I am extremely emotional and in the short term I can get very discouraged and sometimes a little negative. Typically after I get the heart pumping, I settle down and try to analyze the situation and move forward. I have been trying to figure out my reactionary paradox and I think it is all in the way you view the cards you are dealt. I am trying to view things through a strategic life focus. What I mean by that phrase is that you should look at the grand scheme of things. Try to see how the circumstances you are in will affect your life as a whole, given that it plays out how you envision. Will this moment matter in 10 years, a year, a month, a week? In short, think long term. I think that if you view a tough scenario through this lens it can temper some of the childish reactions that we as humans naturally revert to. Just a theory but I am going to give it a shot.