GA 146 | How to Innovate with Geoff Cox

You're listening to episode 146 with Jeff Cox. Welcome to the Gemba Academy podcast, the show that's focused on helping individuals and companies achieve breakthrough results using the same continuous improvement principles leveraged by companies such as Toyota Del Monte and the U.S. department of Defense. And now, here's your host, Ron Pereira.

Hey there.

This is Ron Pereira with Gemba Academy, and I'd like to welcome you to another edition of the Gemba Academy podcast. As always, thank you so much for taking time out of your day and your week to listen to the show and for watching our Lean and Six Sigma training videos over at Gembacademy.com we definitely appreciate each and every one of you. Now today, I'm excited to welcome Jeff Cox to the show. Now, Jeff is a production manager for a high tech company that makes laser measurement systems. So some pretty high tech stuff. And the topic that Jeff and I kind of explore today is innovation, coming up with ideas, whether those ideas be for new products or probably our process related ideas. So we really just walk through a specific process that Jeff and the folks at his company follow to, to make this all happen. So we go into quite a bit of detail. We've actually talked, we talked after we did the podcast about doing a webinar where we go into maybe even more detail. So I think that might be coming down the road as well. So I really enjoyed it. I think you're gonna like it. Show notes for this particular episode can be found over@gembapodcast.com just look for episod again gembapodcast.com and look for episode 146. Okay, enough for me. Let's get to the show. All right, Jeff, well, thanks so much for coming onto the show. Where are you calling in from?

I'm calling in from Logan, Utah.

Nice. Where's Logan? In like Salt Lake City. That area is it somewhere 20 miles.

From the Idaho border. We're in extreme northern Utah.

Oh, okay. Okay. I was going to say like BYU Utah fan or.

I don't know, Actually, I went to both schools, graduated, but now Utah State is right around the corner. So there you go. I'm now an Aggie, I think.

All right, that's good, that's good. All right, well, thanks for coming on to the show. Let's kind of just get started with you telling us a little bit about your background and maybe about your company and how you first came to learn about continuous improvement.

We at Ophir Spiricon build laser measurement systems and I came here about 12 years ago and started in accounting of all things and worked into a production management role. Continuous improvement was brought to Ophir Spirecon by my boss, Mike Jensen, and he started us on our Lean journey when he joined the company. So we've been earnest in our Lean Journey probably eight years now and it's been a lot of fun. In our industry, we make high tech laser measurement systems. If you have a laser beam of sufficient power, you can cut an inch thick piece of steel. But you can only do that if the shape of your beam is correct. And our hardware and software will tell you how your power of your beam is distributed across the face. So we make these high tech instruments and send them all over the world. Through our Lean Journey, we have increased revenue 300 plus percent and only added 52% more employees. And that's due to the lean and the continuous improvement improvement efforts that we're doing. Last couple years we've actually reduced the number of work days to deliver new product by 70% and our calibration business sometimes measures their turnaround time in hours. So it's been a lot of fun.

Wow. So you said you increased revenue by 300% and increased by only increasing employee count by what was it, 50, 50%?

Yeah.

Wow. That's pretty staggering.

It's a lot of fun and it requires a lot of creativity to do that.

Yeah, well that's going to be kind of genesis of our talk today, so that's going to be kind of cool. So. Well, as you know, Jeff, like towards the beginning of the shows, we like to get our guests to share a quote or two of something that possibly inspires them. So do you have one?

I do. And several of your guests before have used this quote. Taiichi Ohno, build people, then cars. It's short, sweet, to the point and it really describes what Toyota has achieved. As you look at their system, I think more of the Toyota production system is respect for people. And the tools that they use show the respect for people. They eliminate waste. The Muda is gone. Why? Because people don't want to waste time doing their job. They eliminate the Miura, the unevenness in the flow. Why? Because we don't want to disrespect people by asking them to build more than they should. The Muri, the difficult, the burden stuff, we show our respect for people by eliminating that. And I think more of Toyota is about people than it is about high Junka or Kanban or anything like that. I love this quote because it really describes what we should be doing as leaders in Our business. We take care of our people, then they take care of their customers. We take care of our customers, they buy more, and we can take care of our shareholders and our stakeholders.

I don't want to put you on a spot, but how do you guys feel like you're doing at your company with this?

Sometimes if you take a look at yourself, it can be discouraging because there's always things you can improve on. I try to remind people, think about where we were five years ago or even 10 years ago. Look at us now and see where we've been. And that gives you a little feel. Good to say we're not as bad as we think we are.

So before we came on, we were sharing some notes back and forth. And I understand that kind of early on, and I think relatively early on in your journey, you guys kind of were taught an innovation system. Is that right?

It is. Our quality manager a couple years ago said that we ought to go see Doug hall of Eureka Ranch's innovation system. We're a technology company, meaning if you don't innovate, you die. And so we went off to Doug's seminar, and he taught us that if your company strategy that you claim is innovation versus cost cutting, you will double your profit margin compared to the cost cutters. So we like the sound of that, and let's see what we can learn. And so we went off to his seminar. Our whole management team went, and four days out of the office, and it's a big investment. Doug says that if you want to generate ideas for new products, you need stimulus raised to the power of diversity divided by fear. That's the Doug hall formula for generating ideas.

All right, hold on. Let me make sure I got it. So you need stimulus raised to the power of diversity divided by fear.

Correct. So what do those terms mean, and how did we apply those at Spiricon? Stimulus is how you feed your brain. And we view lean principles and tools as stimulus. As we as a company look at our flow and our operations, the lean principles stimulate our brains to think about a different way of doing things. So you have an idea. Now you raise that to the power of diversity. Diversity is the number of stimulated brains working on the idea. And whenever anybody in this company has an idea, you present it at your team meeting, where your team can listen, ask questions, make suggestions, and improve the idea. The more stimulated brains, the better the ideas progress. The denominator is fear. If your company culture does not allow people to speak and provide ideas, if they fear being criticized or made fun of or whatever it is, you don't get ideas. And so as managers, leaders, we can influence those three parameters in that formula. Leaders can help employees get stimulated through training. The diversity we ensure through our team huddles and driving out fear comes from leaders saying, how can I help you with your idea?

And I think we also spend a lot of time within the lean world talking about trust. I think that trust and the FE are very close. Right. Or closely related if you lack trust. Right. I guess it's really the same thing as having a lot of fear.

If you put an idea and you don't believe that you'll get listened to, you're probably not going to propose the idea. If you propose an idea and you think you're going to get made fun of or ridiculed or you think the idea is not going to go anywhere, you're not going to bring forth the idea. So that fear thing is important. Another part of fear is of failure. How does your organization view failure when you try something, Doug says, fail fast, fail cheap, get smart, repeat. In our company culture, we believe that failure means you learn something, not that you blew it. And I'm not going to approve your next idea because that last one, you screwed that up. Failure is just a learning experience, and we want to fail fast. I think that's an Edison quote. We're not failing fast enough around here.

Go back to that class, though. Like, you guys are sitting around and having dinner. The night you first learned about this. What were you guys thinking at that moment? You're still learning it, still digesting it. I want to get to, okay, you're back at the shop now. Now we're going to put this stuff into action. But what were you thinking when you first learned it?

The great thing about Doug's class is he teaches you thinking methods of generating new product and service ideas. And so you'd go and you'd listen to him teach these tools, and then you'd go off to dinner and we'd say, okay, our homework tonight is to come up with five new product ideas to bring to class tomorrow. And you have to have the courage to say, I'm going to try this and see if I can generate some ideas with the stimulus tools that Doug taught us. And it's a little intimidating because you're saying, okay, let's come up with another product that's going to make the company money and you have to do it.

Yeah, okay. So you go to this class, guys all bought in that this is a good idea. You want to Try to implement them in your business. How did you do it? What did you do?

So we came back, we reviewed what we learned and we said, okay, we're going to do this. We designed a training class to take Doug's three day training and bring it out to our employees into a three hour training. So we designed that and we got all of our employees through the training so they know what we're trying to do. We teach them how to use the tools. And then what we did is we said, okay, everybody gets an hour a week to do innovation. Well, what do I do in my hour? Well, you can read a book, you can collaborate with other employees, you can make a prototype of a new product or try some quality improvement idea and see if it works and we're going to turn you loose. We turned that system on and we then assigned everyone to a cross functional innovation team. And we picked seven coaches from each department and put them on a team of about seven people. My team had someone from Engineering, Software, Accounting, Service, Warehouse, and that was our innovation team. We would meet a couple of times a month together to talk about ideas and bring that diversity exponent into range and improve the ideas and extend them and research them. We turn this thing on and we start generating new product and service ideas. The other part of this system is time and cost saving ideas. Doug taught us how to generate new products and he also taught us on the time and cost side. We have two different tools there. We have what we call the yellow card, which is new products and services. We have a blue card, which is time and cost. We give people the opportunity to improve just about anything they can touch in their system.

Okay, so you've got this system in place or you're going to try this system? I suppose in the beginning, how did you vet ideas? All ideas, I guess, aren't created equal. Right.

The diversity part of this equation is really important there. We actually have a goal for every employee to do two ideas a month. And that's part of our employee review process. So we pay attention to it. It's a goal that everybody has. And, well, what happens if you're running out of ideas? Do you start bringing ideas that are not as good as other ideas? The diversity part of the equation, I think makes it harder to bring dumber ideas or bad ideas or things like that. You have to go and present this to your team. So you always want to come with a good idea that acts as a filter to make sure you don't get lower quality ideas.

What's the proportion of new product versus process related innovative ideas. What's that mix?

It's probably 10 to 1. The new product ideas are a little harder because they involve our technology. We have to look at our existing products. You have to try it out. Whereas a time or cost savings, you can implement that the same day you come up with the idea.

Okay, Are you allowed to give me some examples of.

I'd be delighted. Okay, these are kind of fun. I'll tell you one that I did. We have a product that measures the light of a laser beam in slices. We have a rotating hub that has a five micron slit on it. And that hub rotates and it slices through the light many times a minute. We mount a piece of foil that has a slit. We mount this on a hub, and 5 microns isn't very wide. And in fact, if you get some dust in there, the slit doesn't work anymore and you have to pull it off and start over. And they're not cheap. So one of my guys comes to me and says, hey, Jeff, I got an idea for a way to clean these slits. He says, I'd like to buy a water pick. Okay, so you want to buy a dental hygiene tool to help us in our laser measurement manufacturing process. And I was kind of skeptical, didn't think that was worth spending the money on. Well, as gravity took hold, I said, it's a hundred bucks. If it doesn't work, you're out 100 bucks.

Put it in a breaker in the bathroom, clean your teeth or whatever. Right, Good.

You may not want to because we run methanol through it.

Oh, okay.

So we bought the water pick and it works. And it saves us time. It means I can build something, and if I do happen to get a piece of dust in there, I can squirt that out. It also allowed us to service our customers better when they send their units back. I don't have to replace the slit, I can just clean it. So instead of a couple hundred dollar bill, they get a $20 bill. So our service revenue went down, our customers got better service, and the company's out 100 bucks. It's an important story because I was skeptical and almost didn't approve it. And that would have been a mistake. The hundred bucks is a very small price to pay to say to an employee, I believe in your idea and we're going to back your idea. And if it doesn't work, that's okay because we're moving forward and trying to get better. The 100 bucks is money well spent. And I Learned from that. And we also had a good outcome.

Talk about that employee who came up with that idea. What was their reaction to, I know you saying, okay? And then that employee seeing his idea.

Or her idea work, you build momentum. And Justin, who proposed that is one of our more innovative team members. And you get that flywheel moving and the cards, the ideas start to flow. There's a great story in lean hospitals where somebody proposed an idea to put in an automatic paper towel dispenser in the newborn icu. And they did it and they found that it was too noisy and the babies didn't like it, so they took it out and put the old one back in. And when the person who suggested that didn't get disciplined, all the other employees said, aha, I can do this and I won't get in trouble. The fact that it didn't work, but there were no negative consequences made their innovation system work with us. That experience taught us what to do and how to do it and gave other employees the idea that, hey, wait a minute, these guys are serious about listening to us. Let me try something. And that momentum builds and it's pretty cool to watch.

What about, okay, so that was kind of a process related idea. Can you share any product innovations that have come out of this?

Yeah. One of our innovation teams came up with an idea. I'll back up a second. We sell a product that you shoot a laser at, that is a sensor that will then provide information to a meter that gives you a power reading on how much power you're hitting the sensor with. And you like to be in the center of the sensor. And somebody said, you know, when we go out and do a demonstration of our products, we pull out our business card and we put it in front of the laser so that we can place the sensor in the proper position. Well, you shoot energy at a business card, you're causing ash and you're generating smoke. And we didn't think that was the best idea. So somebody said, let's see if we can build some software that will provide a tone that will tell you how close you are to the center of the sensor. And on that innovation team was a software engineer. And he said, okay, on my next improvement hour, I'm going to throw some code at this and we'll prototype this. Two weeks later, they had a prototype that they could show the management team, this is our new product. We can make this thing work. It's really fun to watch when people have the light in their eyes and they can start going after things because they have the confidence that they can get backed up by the management team.

This was just done during their one hour segments.

Yeah, they would work on it an hour this week and this is how far we got. So we'll keep working on it on our next one. And they just work through the problem.

So what about just ideas that aren't implemented for whatever reason? How do you handle that with the person coming up with the idea? They could get frustrated or whatever. How do you deal with that?

That's a little more difficult. Our success ratio with time and cost saving ideas in my department, we're probably at 80% approval.

Wow.

Sometimes you do get ideas and we don't say you can't do that idea. We say maybe it's not time now for that idea. So I have a stack of cards out on our production metric board. I have the successful cards and then I have another time. And believe it or not, those cards become stimulus for future ideas. We bring in a new employee and we'll say, hey, why don't you just go through that pile of ideas so you can see what we're doing and you can maybe riff off of some of those ideas and come up with your own. So we try not to say no. We try to say maybe not right now. And that idea stays in the potential hopper.

Now earlier you mentioned the difference between a blue card and a yellow card. I think the blue card was a time and cost savings cards and the yellow cards were new product ideas. Talk a little bit about these cards. Like is it kind of like TWI and stuff's written on them or what?

Yeah, the card is simply a mechanism to help you mature your idea. So it's almost pdca, the blue card, identify the problem. What's the proposed solution? Cost benefit. What are the obstacles? What are you going to do to overcome those obstacles and what are the next actions and when are you going to get it done? That's a quick summary of what the blue card is. It's a way to guide you through the maturing process.

I mean it sounds a lot like what we would call a three thinking or something. Right. Problem solving. Yeah.

Yep. And we have cars, corrective action requests and we have blue cards. And one day I said, what's the difference between a car and a blue card? Because it's almost the same concept. We're trying to improve something.

And what is the difference?

I don't see one.

Okay. I was going to say maybe. I thought you maybe were going to come up with something.

No, but we have different departments and different responsibilities and they have their different tools. But an A3 versus a car versus a blue card, we're essentially trying to follow PDCA and make the idea happen.

What about yellow cards, the.

Major headings there?

And a yellow card is for product ideas, right?

Right. So we say, give us the news headline. If I saw an announcement in the newspaper, explain your idea in one sentence. Tell me who the customer is and what problem you're trying to solve. Write out the benefit promise if you do this, this will happen. And then obstacles. What are you going to do to overcome them? And who has the next action? And when's it going to happen?

And when are you going to go Google your idea to make sure it hasn't already been done? Because it probably has, right?

Yes. Yes.

Yeah, I had my own unfortunate. I had a brilliant idea this past weekend. I was raking leaves with my. And we have these huge piles and, you know, putting the leaves into the bag is the pain. Right. And I'm like, man, I'm gonna just develop a handheld deal and it's gonna shoot leaves straight into the bag. And I was telling my buddies, like, it's already a thing, dude. I'm like, what? I didn't know that. But yeah, that's the problem. Right. If you could think it, it's probably been done in some world. So. Yep. Yeah, good stuff, man. Well, golly, I mean, I could talk all day on. On this, I guess. Maybe. One last question. Do you have any sort of, I don't know, reward system for these suggestions or how do you handle that?

We have no formal reward system at all. We don't pay money for suggestions. This is about contribution to the team and the business. I believe that my company is paying me to be here and they want all that I can bring. And so bring your brain to work and let's start using it. Our system really is about just saying to everybody, we want you to innovate and make this company better. And we are listening. There are some people in our company that generate more cards than the rest of people. And I can tell you that when we're in management meeting talking about a problem that we need solved, the innovation stars are the people whose names come up in the meeting as to who we can trust with this problem. That really is the reward system is just the respect that people generate by coming up with good ideas.

Yeah, I don't want to put you on the spot, but I can't imagine thinking about succession planning and things like that. The folks that are out There, making things happen, given their best effort, I would think are going to be in a good position there.

Those are the people we're paying attention to because they're making the effort to help the company get better.

Beautiful. Awesome. All right, well, let's go ahead and transition into the reflection section. Jeff. So this first one is oldie but goodie. We spend a lot of time talking about the difference between the two pillars that are continuous improvement and respect for people. So. So I'm curious, what does respect for people mean to you?

If I respect the people I work with, I listen to their ideas, and that's what respect is. I'm listening to you. I'm hearing you. I want to help you. My job as the production manager is to help them move forward with what they're trying to do. That's what I do here. And going back to the quote where we started, build people, then cars, we spend a lot of time and effort helping people understand that they're a valued member of the team, and that's what.

Respect means, you know, and we spend a lot of time talking about the importance of listening. And people have heard it before, but, man, we still stink at it, many of us. And, you know, this stupid phone that I'm have it right in front of me, you know, in our computers or whatever it is, these distractions are just. They keep us from really engaging. Right. They distract us from listening. And so I think that maybe that's my resolution is to really try to do it, you know, and not just at work with your kids, your spouse, or your, you know, friends. And are you listening to them when they talk to you? Because so many times we're not.

Yep.

What's the best advice you've ever received?

Ron? My uncle died recently, and I was thinking about what he taught me during his life. And this is kind of odd, but he said, jeff, there are two things in life that you spend top dollar on. One is a pair of shoes because you spend all day walking in them. And the second is a good mattress, because if you're not in your shoes, you're laying on the mattress. Those are the two things that you spend top dollar on. I have applied that in my life to say, where do I focus? What is my constraint? What is my competitive advantage? What are the things that really are the leverage points to what I'm trying to achieve? So I'm just thinking about what he taught me, and it's an interesting way of looking at the world. Wow.

That's pretty powerful. So is there anything over this, let's say 2016, as we're now in 2017. But last year, that surprised you as you were practicing any aspect of continuous.

Improvement throughout the lean journey? I always come back to the simple things. I don't think lean is that hard. I've learned that 5S is a very fundamental principle, and we keep going back to 5s and making sure that we're doing the sustain part. Sustain is hard. And that's kind of what I've learned over the last little while.

Yeah, I'm almost convinced I said it on a podcast before. I think we've got it in some videos. But I'm almost of the opinion now that it's really impossible to sustain anything, whether it's the stock market going, because it never goes perfectly sideways. Right. It's either going up or it's going down. So I'm almost of the opinion now that we just need to keep making it a little bit better. Right. If you want it to go.

Because if you don't try that, the system will degrade.

Right. Entropy. Right?

Entropy. Sustain is hard and it requires a lot of effort.

That's right.

That's right.

Hey, is there a knowledge or skill area that you feel you need to improve on in order to become a better Lean thinker?

This may sound like the last answer, but it's the basic principles applied well that drive the improvement. The first book I ever read in the lean improvement area was Lean Production Simplified, Dennis Pascal. And my goal is to read that book every year. It's a simple read. It's 150 pages, a lot of definitions, very clean, very solid book. And I try to focus on the simple core principles of Lean. And that's. I'm rereading the basic stuff to get better.

Lean Production Simplified by Pascal Dennett. So what about other books that you maybe have read over the last year or so? Any suggestions?

I'm working on my Lean Silver certification from the Society of Manufacturing Engineers. So I'm working through the Toyota Way Practical Lean Accounting Office, Kaizen, Real Numbers. Those are the books on the Lean Silver reading list. And so that's where my focus is right now.

Nice, nice, nice. All right, so last question. If. If, say, you're having a bad day or a bad week and you need to recharge and refocus, how do you go about that?

I find that learning is intoxicating and learning just gets your juices flowing. So pick up a book, read a blog, have a conversation with somebody about a question that you have. I go back to Doug Hall's formula. What you're asking me, what is going to stimulate me? Right. And reading and learning is how you stimulate the brain to new ideas.

Beautiful. Listen to Gemba Academy podcast. Right.

146 episodes of awesomeness.

Yeah. Thank you. Well, this one especially, right?

Yes. I hope.

I hope it's been great. All right, Jeff. Well, golly, I really enjoyed talking to you. I think we need to think about doing a webinar because I know you got a lot more detail you can get into, and that might be a pretty fantastic way to spend 45 minutes or something like one day for you to get on and really go through your system.

I would love to do that and share what we have all achieved at Ophir Spiricon throughout the years. It's been a real fun thing to do while we're being successful as a company. There's nothing more fun than success. And these principles really do work.

Beautiful. How can people connect with you?

That is a very good question.

You a LinkedIn guy?

I'm on LinkedIn, Twitter.

I'm not Snapchatting and all this.

My kids are Snapchat.

Yeah, mine too.

I'd have to go ask them how to do that.

Yeah, I just can't get it. I don't understand Snapchat. What is it? It's just like putting little bunny ears on your head or something.

Yeah, LinkedIn is probably the best place for me. Or you can hit me at my email. G E O F F Cox S dot OP H I R O P T dot com.

Okay. And we'll spell that all out in the show notes. People can find that at. What were you on episode 146? So go to GembaPodcast.com and look for episode 146 and we'll link to everything. Are you a conference guy, Jeff? You get out to any of the.

Conferences or anything like that? Occasionally. Our. Our parent company just did a Lean Manufacturing conference back in Massachusetts, and we got to share some of our idea creation system with them. And we talked about the people side of Lean and really did a deep dive into supply chain and a lot of fun. So attended the Shingo conference a couple times. That's always very valuable.

Yeah. Well, we're plugging the Toyota kata Conference and TWI Summit here, and it's coming up in San Diego February 21st through 22nd. That's a great one. And then the big one is Ame, if you can make it out to. Well, I think it's in Boston this year. It's going to. That's incredible.

So can't wait.

Great one. All right, well, hey, great chatting with you. Thanks again and look forward to being in touch with you soon.

Thank you very much, Ron.

All right, take care. Thanks for listening to the Gemba Academy podcast. Now it's time to take a free, no strings attached, fully functional test drive of Gemba Academy's School of Lean and Six Sigma. Over@gembacademy.com gain immediate access to more than 500 Lean and Six Sigma training videos free of charge@gembaacademy.com.