The prior entry in these three columns left us looking for clues about where to find long queues and large batches. We justified this search by exemplifying they are far from ideal. They hold back success and growth because long queues and large batches hoard performance data until it’s no longer useful. This delays feedback about business performance.
Reluctant to change how their business is planned or operated based solely on negatives, business leaders look for the “upside” to something to justify any changes. Conveniently enough, smaller batches and shorter queues go hand-in-hand to deliver a veritable plethora of benefits that ought to convince even the most skeptical business leader to take a deeper look at how this might affect their companies.
Feedback vs. Uncertainty
We first start with just a top-level list of benefits derived from getting feedback faster and then switch to the underlying contributions of small batches to attaining this feedback.
Before that, let’s take a moment to ponder a fundamental truth about operating a business. This truth is so fundamental that many executives skip over it and dive into tackling more immediately concrete matters. But ask yourself, “What’s the one thing keeping executives up at night that every other thing comes down to?”
Try “uncertainty.” Doesn’t uncertainty underlie every question that worries executives? Assuming so, anything that reduces uncertainties contributes to overall better performance by increasing the confidence in executives’ decision-making.
Uncertainty vs. Flow
There is no single characteristic more powerful to lower uncertainty and increase confidence than “feedback.” We use “feedback” as a catch-all for quantitative and qualitative understanding of the actual current state of affairs -- not just any and all quantitative and qualitative data, but usable data. The signal from within the noise. The real leading indicators. How? In the absence of feedback there’s variation. All sorts of things go on unbeknownst to those who ought to be “in the know.” Don’t take our word for it. Just ask yourself what tells you what’s going on when you don’t have data? You literally and figuratively don’t
know: Uncertainty = Variation. The longer between feedback, the more accumulated variation.
With this concept established. we describe a virtuous cycle of how feedback improves results. In fact, the faster, the better. Faster feedback leads to lower variation. Lower variation leads to less work padding (taking on work to make sure you don’t run out—but adding to commitments and capacity consumption). Less capacity consumption leads to smoother flow of work delivered (staff can focus on work at hand and not be pulled to other work). Smoother flow of work delivered leads back to faster feedback. Essentially, the objective is higher flow rates of completed work because completed work is revenue (not sales—sorry not sorry). Want higher flow rates? Seek faster feedback on work underway.
Flow vs. Batches
Having established that feedback reduces uncertainty, which increases delivery flow, we close out today’s column by describing the benefits of smaller batches. Again, smaller batches universally result in shorter queues. (“Batch” is the term we’re using for a “parcel of work” whether delivered internally or to a customer.)
Smaller batches mean any changes required to the batch as a result of feedback will be less complex to carry out and less exposed to introducing additional errors. Similarly, smaller batches mean fewer errors found in the first place and therefore faster to fix. Both of these benefits directly result in lower cost to complete and faster completion. Keep in mind, the longer a parcel of work remains incomplete, even if it’s just sitting around, the more it’s costing you.
Smaller batches also directly translate into less time spent working on the parcel. Less time working on the parcel clearly results in delivering faster which directly ties-into the feedback loops above. It’s worth pointing out that time spent working on the parcel isn’t just the actual “hands-on” efforts. It includes reviews, corrections, moving the work from place to place, as well as work merely waiting for others to become available to do their part.
Reviewing and reporting the status of work also takes time. We’ve all experienced situations where our work was done but it then sat idling for someone else to look at it. Even waiting for a status report to filter its way to whomever decides that the work can continue takes time. Smaller batches improve all of this. While we can’t always eliminate steps, we can certainly make each one consume less time and reduce overall costs.
Certain reviews are absolutely necessary to ensure quality and conformity, etc. But certain steps in many operations are purely administrative. They’re not part of the delivery “value stream.” Executives are often pleasantly surprised when these nonvalue- added steps can be sped up or entirely eliminated thanks to smaller batches.
If an objective is smaller batches, perhaps one step in shrinking them is to look internally at the steps the work goes through, and also the number of pieces to the work. Whether the work passes through different departments, goes through a number of reviews, or is made up of many chapters, sections, or components, breaking it down results in smaller batches.
By now it’s hopefully obvious that smaller batches and faster feedback don’t just lower variation and uncertainty, but that they directly result in improved economics. These are also the ingredients for growth, scalability, and innovation -- the foundation on which Eric Reis based his book, “The Lean Startup.” But it doesn’t just apply to startups.
So, what’s with the elephants at the waterhole?
Picture elephants at the watering hole. There are many of them. They’ve all stopped. Some are lining up. Waiting. Their predators could have a field day and frequently do. Your operation is not on the nature channel. You can decide not to queue at the waterhole. You don’t have to be vulnerable.