A look at how Visual Management creates value for organizations
The rain started pouring again as Lord Smith rode his horse hastily along the narrow streets of South London. “Exactly what I needed on this troubling night,” he muttered under his breath. Could this be the end of the empire? The other Lords were already at the meeting waiting for him to arrive.
Lord Smith finally arrived at the dimly lit hall where heated discussion was well underway about the new, unpleasant developments in the empire. Some at the meeting were in favor of extreme, aggressive action, while others for patience and a more passive response. After a while the discussion came to a halt. Governor Jones looked up at Lord Smith and said in his deep, stern voice, “Lord Smith, a penny for your thoughts.”
It was at those times, around the 1500s, when people began to realize that there was value in what was happening inside other people’s heads. They were willing to “pay money” to find out what others were thinking. Today, you may think a penny is worth very little, but in the 16th century things were different.
In the same way thinking developed a perceived value, the concept of Lean and Visual Management became more highly regarded after the Second World War. It was during this time that people in the U.S. began to realize the power of making information visible, which changed their way of operating.
Adopting Visual Management
Many companies have adopted Visual Management as a way to create more transparency within the organization. There is nuclear power plant in France that is arguably the best example for achieving Visual Management.
In this plant, Visual Management had been deployed on the highest standard. Pathways were signposted, clearly marked and painted to signify safe and dangerous areas, dials were clean and visible near the machines with color-coded marks (safe operation/critical operation) and Visual Management boards were setup. These boards included information in the form of KPI graphs, documents or lists of actions taken to resolve problems.
In another production facility I worked for in the UK, we came to the realisation that we were missing information and we were not capturing knowledge, especially when it came to facing challenging situations. Machines on the line used to break down more often than we would have expected and problems appeared all the time.
We embarked on the journey of Visual Management and started documenting what the steps in our problem solving approach were, what data we used and how we analyzed it, and what conclusions we reached.
This allowed us to increase our knowledge by understanding how things worked and it helped us achieve the goal of “Right First Time” problem solving (fixing things for good from the first attempt). It took a whiteboard, a lot of markers and the change in our behavior to start documenting what we were thinking and doing to solve problems.
Benchmark performance was measured by an experiment. They took a person from the finance department of the business, someone who knew less than the basics of running a nuclear plant, and they told him to wander around the plant and identify the problem areas.
The finance person managed to perform the experiment safely and by the end of it he had flagged about four areas of concern. He used the data from the Visual Management boards to understand what was not working as expected, what was being actioned, what the latest status was, what issues had already been addressed and what the outcome was. With limited knowledge of the operation and without having to spend even a penny, he could manage the plant just by closely observing all the available information.
Similarly, when it came to Lord Smith, as the story goes, he calmly stood up and approached the main table. He unrolled a map and started demonstrating how each of the suggestions would impact the Royal Navy’s position on this battle, what the tactics were, what the required resources were and what the risks on each of the actions taken were. The solution was clear to the group, the situation was critical indeed, but the cause was not lost yet. He didn’t take the penny for his thoughts, but in case you are wondering, that penny would have been around $43 today.
That is the value of clear thinking!