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Don’t Raise the Bar—Reduce the Variation

Most everyone cares about the fuel economy of their vehicle, whether you are an environmentally friendly person driving the latest battery-powered vehicle, or a driver of a powerful pickup truck. Recently, the president unilaterally approved the Paris Agreement that will put us on a path to reduce CO2 and GreenHouse Gas emissions. The two are closely related, as emissions from transportation are a significant factor that is controllable by technology and human behavior. To a large extent, this involves raising the bar on production of new vehicles and new power plants, requiring them to be cleaner. Alas, we often overlook another approach that applies to everything in business.fuel-economy-box-chart

This chart was just released by ATRI, the American Transportation Research Institute, in “A Survey of Fuel Economy and Fuel Usage by Heavy-Duty Truck Fleets.” Using what is called a box chart to show the data on fuel economy reminded me of the basics of lean management and statistical process control. The basics that were preached by W. Edwards Deming for years. Deming is quoted as,

If I had to reduce my  message for management to just a few words, Id say it all had to do with reducing variation.

It also reminds me of the story of crabs in a bucket. It’s difficult for a crab to climb out of the bucket because all the other crabs keep grabbing and pulling down. And, it reminds me of the bottleneck described in manufacturing in The Goal by David Whitford, Jeff Cox, and Eliyahu M. Goldratt.

Everything works better when things are done in a consistent and defined cadence. A bicycle peloton is more efficient when bunched together than when it stretches out. Production lines work well when there is no waiting time between process steps. Traffic flows better when moving at a consistent speed than when people are speeding then jamming on the brakes.

As a society, we continue to raise the bar for transportation by raising the requirements of the emissions regulations around the world. Some effort also goes into providing financial incentives to people at the bottom to trade in their old equipment for new, more fuel-efficient vehicles. We need to make sure we are not raising the variation between the best and the worst, but closing this gap.

Big and small business

Lend a Hand

The same applies in all aspects of business. We often laud the stellar performance of our best and brightest. We may make efforts to eliminate the poor performers, in an effort to raise the average and reduce the gap between the best and the worst. There is another approach that needs to be used as well. That’s to have some of the best mentor the people below the average—to have team success be important as well as individual success. To benchmark against the best and raise the bar from the bottom, closing the gap between the best performers and the worst performers. Reach down and lend a hand.