Jay Arthur, President KnowWare International, “The Knowware Man” using lean six sigma to solve problems of delays, defects, and deviation
Jay Arthur, President of KnowWare International, has 21 years of experience helping companies solve problems of delays, defects, and deviation using Lean Six Sigma. Jay shares it’s a journey of learning how to make improvements. To take your business to the next level, you’re going to need some data about defects, delays and deviation, which are the silent killers of productivity and profitability. Once you start to analyze and start to be able to pinpoint exactly what’s broken and where to fix it, your business smooths out and gets better.
Using Lean Six Sigma To Solve Problems Of Delays, Defects And Deviation with “The KnowWare Man” Jay Arthur
We’re here with Jay Arthur known as the KnowWare Man in Denver, Colorado. He’s the President of KnowWare, a Denver, Colorado-based company with 21 years of experience helping companies solve problems of delays, defects, and deviation using Lean Six Sigma. He’s the author of Lean Six Sigma Demystified, Lean Six Sigma for Hospitals and QI Macros Lean Six Sigma SPC Software for Excel. Jay, it’s a pleasure to have you on Business Leaders Podcast.
Thanks for having me.
How did you get started?
I spent 21 years in the phone company building software and everything from mainframes to mini computers to microcomputers. About 1989, our VP of Technology decided that he wanted to get involved with Total Quality Management, which was the early version of Six Sigma, so that’s what we did. It turned out it was a journey of learning how to make improvements. Most people think of Six Sigma as performance improvement. It’s really what it is. The “Six Sigma” word came out of Motorola. They invented that term. Over at Motorola University, it says, “In God we trust. All others must bring data.” Most people get successful in business through gut feel, common sense, trial and error. Consequently, they get good at it through just nuts and bolts stuff, but to take your business to the next level, you’re going to need some data about defects, delays, and deviation, which I call the three silent killers of productivity and profitability. Once you start to analyze and start to be able to pinpoint exactly what’s broken and where to fix it, your business smoothens out and it gets better.
Lean Six Sigma: Combining Six Sigma Quality with Lean Production Speed
In the phone company, the odd thing was Six Sigma was always considered to be about the manufacturing, not about service industries like telephony or healthcare, whatever it is. One of the biggest complaints I get from people is they say, “Six Sigma, isn’t that just for manufacturing?” I go, “No.” “Do you have a process? Does it do things? Do you have errors and mistakes and stuff?” “We can fix all that with a little bit of data.” I got involved with that and we learned how to not successfully implement Total Quality because after five years in the quality department, they shut down the quality department because most of them weren’t delivering any returns. I’ve been working with the head of finance and she had this problem. All of a sudden postage costs went up $20 million in one year. I got a little bit of data and started to do some analysis. I don’t know if you remember back in the ’90s, everybody was putting up their own little mom-and-pop long distance company, and we offered to put that on our bill. If you put enough mom-and-pop things on a bill, the bill increases in price by $0.23 or whatever it was back then.
Those $0.23 and three-ounce rates added up to $20 million in a given year because we send out like 20 million bills a month. We’ve got 150,000 of them back because they had the wrong address. That’s a different problem. That’s a type of waste and rework. Even in my little company, we have things that come back because we don’t have the right address. All of these things start to add up and they devour profits. I helped her figure out exactly what was going on over there, and we redesigned the bill so it was lighter weight and fixed some of those things. We were doing adjustments on customer’s bills for $1 or $2 or whatever. For $1 or $2, we had this thing where we wouldn’t let a service rep issue out a $1 credit to a customer. You had to write it all up and that had to go through a whole process, a rigmarole and then it had to be taken care of. That costs $25, $50, $100 to do one $1-credit. They said, “Maybe we can let the service reps go up to a $25-credit, and if they start doing nefarious things like issuing it to family and friends, we go slap them but let’s not torture customers.
The other thing that happened was those customers would wait a month and their bill would not show their credit, so they’d call us back, which was another $9, $10 or $12 for the phone call. It cascades and it’s hard to tell how much your little mistake and error costs you in total, and then you lose customers and things of that nature. I got involved in all of that, but then in 1995, because most of us hadn’t delivered any return on investment, they shut down the quality department. I had the chance to either stay and work for the VP of Finance or go out on my own, and so I did.
When people hear that and let’s say that they’re in a circumstance and they go, “I’m trying to figure out whether I want to stay or leave,” what was that decision process like for you?
For me, the last two years I was there was just painful to walk in the building.
So it’s easy?
No, it was hard. It was impossible. They have a saying for a company. “Hire when it hurts.” You know it’s time to leave when it hurts too much to walk into the building. I was pretty ruthless because I knew that at some point they’d offer a management buyout and I’d get some real money to leave, and so I waited for the management buyout. I had a friend of mine who worked at AT&T in New York and she told me, “I know how much the price of my soul is worth.” She said, “Five more years.” If you feel like you’re paying with your soul, then it’s time to leave. Some part of you is nagging you to go out and try and reinvent yourself, which I decided I had to go do. I had to go see if I could make it happen. For the next year after that, the VP of Finance loved me so much, she brought me on as a consultant and paid me more money than I was paid in salary to help her solve other problems throughout finance and throughout the company.
You know it’s time to leave when it hurts too much to walk into the building.
Were you known as KnowWare Man then?
No. I went out and I worked for her for a year. Then I had to go figure it out on my own. The next year, my income fell and I started thinking about it. This was 1997, so as a programmer, I knew that Microsoft Excel could start to draw some of the charts and graphs that I needed to do this Total Quality Management stuff. It wasn’t until about that time that Six Sigma started to find its way out of Motorola, 1988.
Was that the Jack Welch?
Jack Welch picked this up. This started at Motorola. The head honcho, he said we produce a million phones and twelve of them are defective. He had all those twelve phones shipped back so they could figure out why they made twelve defective phones. He wanted to know how to produce a million phones that always work. Zero mistakes, zero waste, zero rework, zero harm, zero. Crosby had that whole book about zero defects and everybody thought he was out of his mind, but I don’t think he is. That’s the new standard in America.
One of the things I’ve observed when I first started doing this quality improvement training was people said at the phone company, and I told my boss, “We want to be better, faster and cheaper.” He said, “I can give you any two of the three. I can give you better and faster, but not cheaper. I could give you cheaper and faster, but not better.” “I’m sorry. That’s no longer acceptable.” Amazon, Apple and Google have taught us we can get whatever we want right now for free often. You want to know something? Google. If you want to make a phone call, make a phone call. If you want to listen to any kind of music that you’ve ever owned on your iPhone or iPod, go for it. You can download that right now off of the iTunes store.
It’s the same thing with Amazon. Do you want to read a book? I can download that right now and I pay whatever a cheaper cost than buying a printed book. I can get it right now and I can start reading it right now. I want it now. The new expectation is free, perfect, and now. That’s what everybody wants. If you can’t deliver that, you’re coming in second. You can’t get there on gut feel, trial and error, and common sense alone. You have to start to use some data to figure out exactly where those little mistakes and errors are and eliminate them from your diet, eliminate them from your customers’ experience.
In the consulting space, you’ve left AT&T, you dropped off US West. You were now off the favorites list. Now you had to make a run at your business and make it work. What was the biggest impediment or misconception about your business that kept you from getting fired off?
I don’t know if there was a misconception, but when you’re an employee in a company, somebody tells you what to do. When you own your own company and you’re a sole proprietor like I was when I started, you have to tell yourself what to do and then you have to make yourself sit down and do it. I’ve written twenty odd books and people ask me, “How do you do that?” I say, “It’s BIC. It’s button share. You have to sit down and you have to write the book. Then you have to edit the book until it’s readable. Then you have to find somebody to publish the book.” When I started, first of all, I had to learn how to lead myself or manage myself. At the time, Excel, Windows 95 was out.
I remember when Excel didn’t charge.
We had Windows 95 which Job always says was Mackintosh 84, and he wasn’t wrong. Then Excel 97 came out and I said, “I can start to program Excel to do some of these charts.” I started going out and doing consulting work with clients about quality improvement. That was the early days and not everybody was a quality consultant. I would sit there with my little laptop. Laptops were very expensive back then, but I had to have one. I would draw a little chart and people go, “That’s cool. How did you do that? Where can I get that?”
It’s what they call BFO, blinding flash of obvious.
I go with “brilliant” just because “blinding” is a bad metaphor. It’s a brilliant flash of the obvious. I said, “I got to turn that into a product.” I made my crappy first draft of this software. Now I have to figure out how to sell it. There’s the American Society for Quality. They have so you could buy their mailing list. I bought like 5,000 names and I started having to study direct mail because there was no internet. All this internet stuff that we all take for granted now, that didn’t really exist in 1995, 1996. It was in its infancy. I would hate to show you my original crappy website. It was awful. A friend of mine nagged me into building a website. It was awful, but I had a website and then I started learning direct mail. I read every book I could find on direct mail. In direct mail, the simple answer is the headline determines 80% of your readership. If you get a good headline, they’ll read the next line and everything below that. I remember I sent out 100 pieces first. I printed them and folded them up on my kitchen table, licked them and put a stamp on them and sent out 100. Crickets. Mom didn’t even call.
Out of that, I kept iterating until I found a headline that worked for quality people, Control Charts for Excel or something, but whatever, they want it. Then I got an order. One out of 100, I was rocking. I started to do that and I started to ship this out on little 3.5-inch floppies. I actually duplicated those on my home computer. It’s this whole journey of discovery. You just have to keep learning. It’s just like a flood of learning and discovery. Some people hesitate to send stuff out, but if you don’t do 100,000 pieces because you think your first mail piece is great, I sent out 100 and didn’t work, but I learned something and sent out some more. Eventually, I found things that really did work. It started to scale up, and then the people who are using the product gave me feedback, “You need to have a menu, not just control keys to run these tons.” How do I make a menu? I had to go figure out how to make a menu that would drop down on Excel. There’s a way to do that. Who knew that? I had to go learn all these things. Out of that progression, iterating the product, iterating my marketing, I slowly ramped it up. In 1999, I sent out a quarter of a million pieces of mail and did almost $750,000 in business to cover postage and then some. I have outsourcing people who actually did the fulfillment for me.
Then it started to grow a little bit too big to manage all of that stuff all by my lonesome with just one outsourcer. In 2001, I hired my first employee. I got a call from Adrianne who’s our COO. She left the phone company and she wanted to know if I knew anybody that had a job. I said, “I might.” It was painful to decide to hire that first employee. That was the starting point. We’ve got an office and moved the furniture in September 1, 2001. Then 9/11 happened and the whole country froze up solid for a period of time. I just kept marching forward and eventually America woke back up. It’s been an endless churn. Way back in ’97 and ’98, Excel for the Macintosh, Excel 98, I actually built the original version of the software. The Mac was where Excel was developed originally. I built it there, ported it to the PC and then started selling both versions, although the PC outsold the Macintosh 99 to 1 for the last fifteen years. The last few years, the Mac has risen, so it’s about 10% of the business now, which is a testimony to whatever’s going on out there in terms of people using the Mac.
The Macintosh is also starting to have its little glitches. When you go in and they file an insurance claim, it has to go out to an insurance company. When it goes out the insurance companies, sometimes it bounces right off because you haven’t filled in all the blanks. That’s an IT problem. We ought to be able to fix that. Then it gets in there and sometimes it’s fine and it goes right through. At other times it goes into some analysis, and then you have to respond to their analysis. If you don’t respond in a period of time, then it gets rejected, and so you end up with a loss of money. They were losing about $12 million a year and denied insurance claims. I sat down and we started doing some data analysis on denied insurance claim, some 47,000 different kinds of rejected for this or that, or the other thing, or they bounced off. We did an analysis on all that and it turned out that one insurance company decided to drill down.
Lean Six Sigma: 20% of what you do causes 80% of your mistakes, errors, waste, rework and loss of profit.
We used what’s called a Pareto chart. A Pareto chart helps you narrow your focus on the one thing you wanted. Most people have probably heard of the Pareto Principle of Vilfredo Pareto that 20% of what you do causes 80% of your mistakes, errors, waste, rework, and loss of profit. It’s the same thing on the other side, 20% of your customers account for 80% of your revenue. You spend more time with those 20%. I also found that Pareto’s loss is also a power loss. It applies within the 20%. As little as 4% of what you do produces over half the mistakes, waste, rework, loss of profit.20% of the 20%, 80% of the 80%, 64. The 450 Rule just sounds bad. If we can use data to narrow down and pick that one thing that’s really going wrong, we can fix that. In their case, we had this nice chart of $1 million a month going down the toilet. Then we looked and we split that up. Why is it going down the toilet? About two-thirds of it was for timely filing. We’re just not getting it filed in a reasonable length of time. Then we drilled down into timely filing. It turns out one insurance company was two-thirds of the timely filing denials. It was a function of they weren’t living up to the contract and censure wasn’t doing everything it could do to make sure all that stuff went through. I did the data analysis in a few days. I’ve actually changed the software so I could do the same thing I used to do in 30 seconds instead of two to three days because I was still figuring out how it all works.
I figured that out. We got a team together. The team looked at that and said, “Number one, we need to go fix the contract. Number two, we can change how we do all this stuff.” They figured out how to fix it on a Friday afternoon, started that the manual change on Monday, save $5 million a year. Then we found some other ones where they had misread it. There was another $24 million that had been miscoded that’s not paid. We figured out we need to code it correctly so that we know that we got paid for it. Then we started working through some of the other things. I helped them find the money, but if you think about it, just like the phone company with a 150,000 bills returned. While we fixed all of that, they’ll stop coming back. We’ll stop issuing things to chase down non-payment, and all of this churn will stop. The same thing would happen with the healthcare system if we could just get those transactions, those things to go through first time. If they just slid right in, if we changed all this
Will this also apply to individual physician practices?
Sure. Physicians have the same problem or they don’t actually bill for the things they’ve given a patient. If you look at the amount of all these drugs that we buy, we’re only billing for about two-thirds of the drugs. Other hospitals have seen things where they had all these cardiologists and they had four or five different kinds of stents. Some of them are very expensive, some of them not so expensive, some of them were better in terms of how they perform than others. For a lot of these hospitals, they just said, “I’m going to narrow it down to these two because they’re affordable and they work better.” You should hear the physicians and the doctors scream, but we have data that proves. Every year we go to this improvement conference, the Institute for Healthcare Improvement in Orlando in December.
You and one other guy go.
Lots of them. These are all chief medical and chief nursing officers of all the hospitals in America that want to improve things. They’ve been meeting for 28 years. I will offend a lot of people here, but healthcare has been admiring the problem. When you don’t have any real competition because you’re not really competing too much with other hospitals or whatever, you can be sloppy. Here’s some bad news and these are the numbers that we know. In 1999, “To err is human” came out, and we said we kill 100,000 people a year unnecessarily in the United States. We’ve gotten much better at measuring, so it’s somewhere between 250,000 and 500,000 people a year killed unnecessarily through healthcare. That makes it the third leading cause of death in America behind heart disease and cancer. This is massive. It’s like three 747s a day crashing full of patients because it happens here and there and everywhere throughout 6,000 hospitals and thousands of individual surgical centers. You see things like one of my favorite comedians, Joan Rivers, died due to a medical mistake. You keep hearing these things but nobody steps up to the fact that this has got to stop.
It’s not necessarily that the physicians incompetent, but the process.
It’s always the system. The system allows them to fail. We have certain exemplary hospitals like Virginia Mason up in Seattle. They have patient safety alerts and anybody can call one. When they initiated this ten years ago, this one nurse said, “You cannot do this oncology treatment without doing this other stuff first.” This physician went out of his mind and she called him on it. The leadership team came down and said, “No, you’re wrong. You have to do these things in this order before you give them this oncology medicine.” End of story. The leadership team supporting the nurse over the doctor was a massive brain shift. The KnowWare Man thinks about how do we change the software in here to get the outcome out there?
When you don’t have any real competition, you can be sloppy.
Before we go too far, what is the genesis of the KnowWare Man?
Back in 1990, 1991, besides Total Quality Management, I studied neuro-linguistic programming with Steve and Connie Ray Andreas who are up in Boulder, just learning how to run this thing and clean up the limiting beliefs. One of the things that was probably most helpful for me was, at that time, to go in and get rid of all the limiting beliefs I had about things. It could be starting businesses, marriage. “That wife of mine,” and then you’ve discovered, “No, that was me.” “That boss of mine.” “No, that’s how I think about it.” When I changed how I think, then all these people respond to me differently. NLP was about neuro-linguistic, or what we say to each other, programming. It’s software for your mind. Out of that came the whole idea of knowledge-ware or know-ware.
One of the things that concerns me a lot in the Lean Six Sigma world is we have these two-week and four-week trainings to become a green belt or black belt. I talked a lot of people and some of these belts had been trained but they don’t know what to do. They got the certificate but they don’t have the how-to. I don’t know how they missed it, but part of it is we teach them way too much stuff. Again, I found that the 450 Rule as I call it, Pareto’s rule applies in knowledge. You do not have to know everything to do anything. You only need to know a little bit of stuff. You don’t need stuff to teach you crazy things.
My dad was out one day when I was a kid and he was hammering something together, and I wanted to learn how to hammer something together. He did not go into a discussion of physics and Force = Mass x Acceleration, and diagrams and formulas; he didn’t do all that. He just gave me a couple of pieces of wood and a nail and taught me how to do this. If it bent, he pulled it out and started again. Very quickly, I learned how to hammer two things together. I would watch him change plumbing, and watch him do this or watch them do that, and then he’d have me do it and I’d be pretty good at it. I didn’t know everything there was to know, but I knew how a hammer worked.
Minimum viable product gets something done.
We teach too much about that. That’s why I talk about the magnificent seven tools of Lean and Six Sigma. Here’s the advanced technology for Lean.
For those at home, it’s a post-it note about a quarter inch so you can get a few thoughts down. If you were to look around the office, it’s like a blizzard. There are post-it notes everywhere.
That’s a very powerful way to organize things and to figure out the flow through your process, if that makes any sense. When you figured out the flow through your process, most people make the mistake where they look at their employees and go, “So and so is lazy, not a chance.” The thing going through the process, the product, the patient, is lazy. If you watch the thing going through the process, it sits around for a while, twiddling his thumbs, goes out to lunch, goes out for coffee, it’s waiting for the next step in this process. When you collapse all the delays in between things, all of a sudden you don’t pick things up and put them down, and pick them up and put them down. You can’t make a mistake. You can’t get things out of order. You can’t miss a step. When you get all that delay out of the process, you become infinitely faster. I have never failed to have a team diagram a process and not cut 70% or 80% of the cycle time out of it. I worked with one aircraft manufacturer and their cycle time for a part to do a request for proposal was, industry standard, 1.9 years. I got them down to 40 days. This is the thing. You don’t need to know everything there is to know about value stream mapping. You just need to know the essential tools.
You can you write it down on a sticky note and organize it.
It doesn’t take people centuries to do this weeks at a time. You get them together for an hour and they can come up with the current state and future state and go, “Why didn’t we think of that?” You haven’t bothered to look at your process for a while. We’ve made the mistake of making it too hard. That’s why I built this Lean Six Sigma Yellow Belt Training which is this eight hours of quick videos about how to do the basic improvement tools, the magnificent seven tools. For anybody who’s listening, it’s LSSYB.com for LeanSixSigmaYellowBelt.com. It’s free. If you want to take the test and get a certificate, I’ll charge for that. Back in 2011, I set this big hairy audacious goal. We have green belts and black belts and master black belts. The one thing I didn’t notice where money belts, people who could actually use the tools to save money. Because of the QI Macros, I sit at this weird confluence where I talk to a lot of people, and the more things they told me about all the little letters after their name, the more I knew the next question was going to be silly. They just didn’t know where to start because we teach them too much stuff and then they get cluttered and they don’t know where to start.
Lean Six Sigma: You don’t need to know everything there is to know. You just need to know the essential tools.
I set this big hairy audacious goal. I’d like to have 100 million money belts worldwide using the tools of quality. How do I do that? I can’t give away the software but I have to give away the training. You can try this software for free for 30 days from the website. That’s one of my goals. Why would I want to do that? I would like to create a hassle-free America. I don’t know about the rest of you, but every time I go out to eat, I have to check my bill, or every time I go through a drive-through window at a restaurant, I have to check and make sure I got all the Tacos I ordered. What is that all about? Why does my Apple phone have to update its operating system every 24 seconds and waste a day of my time? I’m a very slow follower of technology. I firmly believe that software does not release. It escapes. When they went from IOS 9 to IOS 10, it nags me all the time to update my iPhone. I said, “You just jumped from 9 to 10, that’s a big jump. I bet it’s crap.” They’re telling me about 10.1. Maybe about 10.2 I’ll think about wasting the time and energy.
They nag you to update. That just makes me nuts. Let’s say I’m a prototypical company, whatever that is, and I’m thinking, “I got some data, I got some stuff on a spreadsheet, and I’ve got a hole in my bucket and I can’t quite figure out the hole in the bucket. How would I know that I would qualify to be a potential client of yours?”
On the wider scale, everybody tends to keep a lot of data about how they perform, but nobody does any analysis of how they perform. Tons of data, no analysis. Rudyard Kipling had this saying, “I had six serving men. They taught me all I knew. Their names are what and where and when and how and why and who.” If you keep track of the type of defects you’re making, you go, “When did that happen? What happened? Where did it happen? How did it happen? How much did it cost to do that? Who was involved?” If you keep that transactional data about mistakes and errors, then I added this to the software, the data mining wizard will take that and turn that into Pareto Charts and drill down and say, “It’s over here, this is where it is.”
I used to spend hours and sometimes days doing that, and then I said, “I can make the software do this.” I’m lazy. I don’t want to have to do that. I don’t want people out there to have to do it. I used to spend a long time trying to teach people how to do this, but not if I can build it into the software. We’re the only software that does this because we think about things a little differently than everyone else. The idea is if a defect happens often enough, your five senses will notice it. If it only happens once in a while, if you think about the typical batter in baseball, if they’re batting over 270 or something, they get a hit once every two weeks or something. It’s some ridiculously high number, and so if you don’t track when they got a hit and when they didn’t get a hit, you wouldn’t even notice that they were batting 270 and somebody else is batting 230. You didn’t want to hire them for your team.
The whole book, Moneyball, was about that whole idea of these people to have a tendency to get on base. That’s what matters, not hits, on bases. If this guy can walk every time he gets up to the plate, you’re in. That’s how the Oakland A’s developed such a successful team for several years, until everybody else figured out they could do the same statistical analysis. It’s very interesting. In sports, we track all these things, defects, mistakes, errors, fumbles, pass interceptions, penalties, and yet in business, people don’t want to think about that too much. They’re a little afraid of it.
We were talking about some of the things that you’ve got going on. It segues into what you’re talking about. It was turning data into dollars, which is what the A’s did. Let’s jump down that road.
There’s been all this hype about big data. I always think you can get big profits from small data. In my experience, it doesn’t take a billion records to figure out that I’ve got a problem somewhere. In software, I came up with a concept I called the Dirty 30 Process for Six Sigma Software. If you take 30 of the worst of a certain type of transaction that’s always airing and failing, and you figure out going and reverse engineer how it got there, a Pareto pattern will leap out of it in 30 to 50 records. I don’t need all the data on the planet.
If a defect happens often enough, your five senses will notice it.
30 statistically representative?
Yeah. With Centura, we had 47,000 records which went into a lot of different buckets, but we were able to pinpoint exactly what to fix. You don’t need the big; you need a small and a sample. The Pareto pattern will show up in the small sample as well as the big. The thing about big data is most companies were looking at how to figure out how to sell more nuanced niche things to more niche audiences. It was all about sales. There’s a TED Talk where this woman talked about in 2015, Americans spent $122 billion on big data, but only about a quarter of that actually had some return on investment. From a Six Sigma standpoint, that’s a One Sigma performance level and you should be shot, fired for malpractice, drawn and quartered.
If you have data about mistakes, errors, waste, and rework, if you feel like you have too much crisis management, if you feel like you do too much fire-fighting, it’s a symptom. When I go into training a company somewhere, I can tell where they are just by how many times the people in the room have to get up and leave to answer some fire during the course of a one-day training. Some places it’s pretty calm and other places it’s like boom, boom, boom. I just tell them that. Juran, one of the godfathers of quality, said that if you aren’t doing anything to manage this, you’re probably throwing away a third of your total expenses fixing stuff that shouldn’t be broken and trashing stuff that you can’t fix. If you could cut your cost by a third, what would that do to your profit margin? What would that do to your customer satisfaction? What would that do to your ability to attract new clients?
We’re just better than they are, even I see this. Everybody love Apple products over PC products because PCs were hacked more often, but Apple has gotten a lot looser since Jobs left. Each new release of their stuff seems to be a little bit more iffy than it used to be. I’m not sure that the quality of what you see in an Apple product is staying up as it seems to be falling. Even Excel, Excel used to come out with three-point releases over three years. Now they’re doing an update about once a month or once every two weeks. You never can tell if the thing that comes out this week is going to work. It just drives me crazy.
Going back to that, the folks who are interested in turning data into dollars, which is TurningDataIntoDollars.com, what should they expect to see there and what’s the benefit to them?
If you go out to the website, you can download my free special reports called If It Wasn’t On Fire, You Wouldn’t Have To Put It Out. You get that report for free and then there’s a series of three videos that talk to you about how this all works. If you want to, you can sign up for our learning management system and get our new edition of the software, which we call Chart Smart Excel, which will help you do all this data mining automatically. I don’t want to train people on how to do this if the software can do it for you. That would be a place to go learn more about this concept.
One of my big concerns is Six Sigma is moving so slowly that it’s never going to catch fire. What we have to do is scale down what we’re teaching to the things that will solve most business problems. If you look back at when the American Society for Quality was implemented, about a third of the nation were manufacturing a third were service industries. It turned out that the quality community focused on the manufacturing side. Manufacturing employment is 11%. Service employment is 80% percent. Where’s the opportunity for improvement? It’s in the service industries. Service industries often say, “I’m not sure. Isn’t that Six Sigma stuff just for manufacturing?” No. Business processes are universal. The thing going through the process is different. It might be a patient, a carburetor, a piece of software, a telephone service, but the thing going through the process is the same.
As we’ve been going here, I’ve been remiss. Folks that are like, “I’m in. I need to talk to him,” how do they find you? How do they reach out to you on social media?
I’m on LinkedIn, Jay Arthur, the KnowWare Man. We have Twitter feeds for @QIMacros and for Turning Data Into Dollars. All of those things exist out there so you can go find us. You can come to the website. It’s actually QIMacros.com which is where the existing software is. The whole new thing I’m coming up for the average Joe or Susie, we have all the green belts and black belts. I want no belts to be able to do this. I want no belts to become money belts. Every business wants people who can solve problems with data. If you become one of those people, you become indispensable, a lynchpin, if you will, in your company. People will come to you and go, “What do I do here?” You want that because that will always be something that’s invaluable in a company, to find those insights. You talked earlier about insights for action. There’s a lot of data analysis going on, but most of them don’t have the insight. What this process will do is give you the insight, “What do I go fix to cut my costs to boost my profits and increase customer, employee, and everybody else’s satisfaction?” That’s what we want.
Lean Six Sigma: Every business wants people who can solve problems with data.
The entire world is out there either getting emailed or texted or something and a marketing piece comes into your inbox. I think about the generators of that kind of information. In my mind, many of those guys are looking for a clue. As a hypothetical, how would you see your software fitting into that arena in the marketing space or social media space?
If you’re using a Google AdWords account, we have this thing where you’re going along doing pretty good in Google AdWords in terms of sales and revenue, and then they release some change of their algorithm and Penguin. When Google decided to drop their sidebar ads and just go to mobile-friendly ads in the front, then our web listing of things and ads at the bottom, our traffic went kachunka. We noticed that just because we were tracking it using what’s called a control chart. We can track that, now can we start to see other trends? We actually looked at other trends like SPC software has been trending downward; Six Sigma has been trending downward. We can watch what’s trending through Google Analytics, through all these different things, and start to do some Pareto analysis. It’s the same thing with a keyword search. If you just go into Google and you start typing “Six Sigma software,” it will keep giving you listings of top things that people are searching for. You can go out and start to figure out, “Maybe they’re not searching for this, they’re looking for a way to do that.”
I have a friend who teaches decision making. I said, “Have you tried using a keyword like ‘my boss is an idiot?’” We typed that into Google, and Google came up with all the same things. We figured out how many times people were searching for that. “My employees are idiots.” I can help you with that because we teach decision making. The idiocy factor seems like a thing like that. You can start to do the same analysis on all of your website traffic because it’s a thing going through your process. You can start to notice when it’s going up or going down. Is it varying too much? Is it varying too little? The when you plug in a new keyword, does it do anything?
You have a lot of experience in mileage. A parting piece of advice you might offer?
People tend to focus on increasing profits by increasing sales. If you look at how much money we spent on sales training every year, it’s $160 billion or something on sales training every year. How much money do you spend on figuring out how to analyze and reduce your costs? If you spend a little more time over on the cost side, by reducing those costs, the fire-fighting, the overtime, the complaints, and the credits and adjustments and things that you have to give your customers because your process stinks, you free up more time and you start to be more innovative. You can come up with better ideas and better solutions.
Focus on the business, dive in the business.
When you’re firefighting, you can’t think creatively. You’re problem solving all the time. Let’s narrow that problem-solving down to the four things out of a hundred that are producing over half of your waste, rework, lost profit, and anxiety. Once you do that, your business will smooth out. You’ll sleep at night. As a small business owner, you don’t sleep a lot of nights because you’re worried about something. I like to sleep at night.
People tend to focus on increasing profits by increasing sales.
You have the website for free.
That helps. You can go through and check it out. I’m sure there’s a lot I failed to ask.
Seth Godin gave me that idea which was when he released the book, Unleashing the Ideavirus, which I recommend to anybody to read because that is probably the best book on marketing I’ve ever read. He gave it away for free online. If you can figure out how to have something for free that leads you to fee, that leads you to higher fees, that leads you to more stuff, that leads you to more exotic things, that’s my model. I give away the training very often for free online, but I sell you software to help you do it because you can’t do it without the software. It’s a different model. There’s a book called Free. The whole idea is that the world is going to free, like bandwidth going to free, computers. My son in law works for IBM for a while then he got out of it because you just can’t sell hardware big enough because every year it doubles in power and halves in cost. I can’t keep my sales numbers up if it’s doing that every eighteen months. It’s very difficult. How can you figure out what game you want to be in and how can I help people step into this new process, this new idea, this new way of thinking, this new whatever? Is there something I can get them for free that will get them started? I can sell them the rest of the stuff.
Jay, this has been fun. I’ve enjoyed it. I appreciate you taking the time.
Thank you so much.
I appreciate it.
Thank you so much.
About Jay Arthur
Jay is the shortcut to results with Lean Six Sigma. Jay is the only resultant that teaches people how to solve operational problems involving delay, defects and deviation in one day using Excel and the Magnificent Seven Tools of Lean Six Sigma.
Jay was trained in the Deming Award Winning Florida Power and Light improvement process in 1990. He has worked as both a quality and process manager within a Fortune 50 company and on his own as a Six Sigma resultant. Jay applies the 4/50 rule to the discipline of Lean Six Sigma and excels at finding the 4% of the knowledge and tools that are needed to deliver over 50% of the results.
- Lean Six Sigma Demystified
- Lean Six Sigma for Hospitals
- QI Macros Lean Six Sigma SPC Software for Excel
- American Society for Quality
- Institute for Healthcare Improvement
- Lean Six Sigma Yellow Belt Training
- If It Wasn’t On Fire, You Wouldn’t Have To Put It Out
- Jay Arthur – LinkedIn
- @QIMacros – Twitter
- Turning Data Into Dollars – Twitter
- Unleashing the Ideavirus
Love the show? Subscribe, rate, review, and share!
Join the Business Leaders Podcast Community today:
- Business Leaders Facebook
- Business Leaders Twitter
- Business Leader LinkedIn
- Business Leaders YouTube
The post Jay Arthur, President KnowWare International, “The Knowware Man” using lean six sigma to solve problems of delays, defects, and deviation appeared first on My podcast website.