Lean decision making

Every day, each of us has to make decisions. Countless decisions, in fact – from what we are going to eat for breakfast to how we should relate to the people around us, what time we should leave for the office and how we are going to spend our free time. Our daily lives are continuously, significantly and directly influenced by the choices we make, which is why the way we make decisions has always been a topic of great interest to neuroscientists, psychologists, sociologists and so on.

In the business world, decisions are also expected of people at every level of an organization, and it is the combination of these decisions that ultimately determines whether a company will succeed. Do people on the front line expose problems or hide them? Do managers strive to improve the system or blame people? Do senior executives think long term when setting strategy, or do they choose to focus only on making money now?

In the lean world, we often say that people should be given the tools and autonomy they need to make decisions and thus solve problems, but I believe the focus of our attention has traditionally been on problem solving at the expense of decision-making. Yet, without decision-making, we cannot expect problems to be solved.

So why not pay attention to how we make our decisions and see how the lean way of thinking and acting can help us ensure they are the best they can be?

Five stages of decision-making

As mentioned above, there are many theories about decision-making. It is generally described as the cognitive process that results in the selection of a course of action among several possible options (which may be rational or irrational). According to Herbert Alexander Simon, decision-making is a reasoning process based on the decision-maker's assumptions of values, preferences and beliefs. Every decision-making process produces a final choice, which may or may not lead to action.

If we try to look at this cognitive process from a lean perspective and break it down into smaller steps, we can say that there are five main stages in the decision-making process:

• Perception – how good and trained we are at seeing the reality around us and recognizing certain stimuli, such as problems that require our attention;
• Intention – based on what we perceive, how willing and determined we are to act and do something about a given problem;
• Evaluation – how I will assess the risks and benefits of acting on the problem. Is it worth acting on this at this stage? Do I have what I need to succeed? At this stage, we are putting forward hypotheses.
• Action – based on our evaluation, we decide to act (or not) and use the tools at our disposal (in the case of lean, things like daily management, huddles, kaizen or hoshin) to bring our vision to life.
• Reflection – are we good at extracting lessons from our experience? Was our intervention worthwhile? What did we learn from it? What impact did it have on the system?
  
  

Lean and decision-making

The five elements highlighted above describe how decisions are made and the thought process that makes us see reality one way or another, choose a particular course of action, and draw conclusions about something that happens. Because lean is so closely connected with the way we think, I believe it can help us ensure that our decisions are the right ones.

Applied across these five elements, lean can truly turn decision-making into a powerful driver of a transformation. Its scientific approach gives us a structured way to make decisions, even when they happen almost unconsciously (which is why it is so important to make lean second nature, the way people see the world around them).

Lean practices and principles can make the decision-making process more effective. How?

When it comes to perception, with lean we learn to see. This means developing our ability to visualize problems, to separate value-added work from waste. Because we get our information directly from the gemba – rather than from a report or a presentation – we have a much more accurate understanding of the reality around us, of the problems we experience, of the decisions we need to make. This is where it becomes clear that decision-making is a much broader concept than problem solving – if our perception is wrong and we focus on the wrong problem, even if we are the best problem solvers in the world, it will not mean much.

As far as intention is concerned, as lean thinkers we are motivated to make daily improvements to deliver more value to our customers, such as serving the best food we can in a restaurant or giving patients the best possible care. This focus on improvement comes from two sources: the motivation I receive and the knowledge I receive. Together, these two elements empower me, giving me the will – and the means – to act. In this way, every problem I observe becomes a trigger that awakens my intention to “do something about it”.

It is one thing to have the right intention, but what about evaluating the problem and the situation around it to understand whether my intervention has the potential to succeed? It is at this stage that we decide whether or not to act. After all, solving a problem when we do not have the knowledge or support we need is a waste. This makes the evaluation stage critical. Lean can help us assess the situation by encouraging us to ask questions such as “Do I have the support I need from leadership? Are my people with me? Is this the right time to tackle this? Do I have the means I need to make an impact on the situation? Is it worth focusing on this problem right now?”. Developing our evaluation capabilities is as important as sharpening our perception and our problem-solving skills.

If we decide to act, lean gives us a wide range of tools, techniques and behaviors that can help us attack a problem – from its definition to its solution. The “action” stage is the problem solving we usually talk about in the lean community. A3 thinking, kaizen, engaging cross-functional teams, gemba walks, 5 whys – you could say that everything lean teaches us aims to make the problem-solving process smoother and more effective.

Finally, we cannot forget the reflection stage. Doing hansei is also a decision. Many neglect this critical step and discover what a big obstacle this is to our ability to transform organizations. Reflecting on the decisions we make, on the problems we solve and how we solve them, and on the impact this has had on the whole, means we will be better equipped to solve future problems of a similar nature. The more problems we solve, and the more we learn from them, the better we will be at solving future problems – this is the virtuous cycle of lean thinking and acting. Without learning from each cycle, we will not achieve sustainable progress.

Two examples

Let's try to imagine two real-life scenarios to bring these ideas to life. In both cases, a patient in a hospital receives the wrong medication. This is how a non-lean decision-making process and a lean decision-making process can differ...

In the first case, a manager learns about the incident. He is an old-fashioned person, working in an old-fashioned environment. On realizing what has happened – in fact, medication errors are not so rare in hospitals – he immediately downplays the situation and says: “This happens all the time. No one has ever died. We always catch it in time”. This flawed perception of reality (which leads the manager to believe this is not even a problem) results in a complete lack of intention to do anything about it. His evaluation of the problem convinces the manager that the best course of action is to make sure news of the incident does not spread. “We'll do something about it next time. We already have a lot on our plate,” he thinks. No problem has been solved, and therefore there is no learning that can be drawn from the experience. A few months later, another patient receives the wrong medication. This time, however, she develops a skin rash all over her body, and the hospital ends up with a lawsuit on its hands.

In the second case, the manager is a lean thinker. Someone tells her about the medication error and she immediately sees it as a problem that the whole team needs to examine. The manager knows this is a common problem in hospitals. In fact, she had imagined this could happen during a recent visit to the gemba – she remembers asking how the pharmacists were able to tell medications apart when many came in similar containers. Her experience studying the work at the gemba changed her perception and immediately alerted her that the medication error would be a big problem. As a lean thinker, her first instinct – or intention – is to solve it. For her evaluation, she goes to the gemba and talks to as many people as she can, really trying to understand the situation and whether an intervention can have the desired result. Once she determines that this is indeed the case, she decides to act. She forms a small team to analyze the problem in depth and uses A3 thinking to solve the problem once and for all through a simple but clever system of colored labels and poka-yoke. As the team gathers to reflect on its learning, the success of their kaizen inspires them to share their experience with the rest of the hospital so that other areas can also avoid medication errors. A year later, the hospital records zero medication errors for six consecutive months (and counting).

Why not just solve problems?

So far, we have discussed why applying lean to the five dimensions of decision-making makes a lot of sense. But the same positive results can be seen if we look at it from another angle: decision-making gives us a much more complete view of our lean transformations than problem solving alone. It forces us to ask questions that would otherwise go unanswered: which problems do we choose? Why? Based on what evidence? Why did I decide to go ahead and solve that problem?

Looking at the five elements of decision-making can make us better at lean, because it can add a new dimension to our discussions and give us a new way of looking at the challenges ahead of us. For those who are on a lean journey and sometimes feel “stuck”, this perspective can help them see things differently, finding new doors to open. Decision-making lies behind every dimension of a lean transformation; that is why it is so important for us to look at it and connect it better to our transformation efforts.

As we study lean transformations, our focus so far has been almost exclusively on problem solving. Although this is fundamental (it is at the heart of the lean system), problem solving without sound decision-making leads nowhere. I think we are missing an opportunity by ignoring the role of decision-making in our lean journeys. If we believe that decision-making constantly comes into play in our daily lives, why don't we discuss it more? Why don't we treat it as the driver of transformation, which is what it really is?