The Phoenix Project

by Gene Kim

  Surprised to be the target of the question, Steve considers it for a moment. “The amount of wip in the plant goes down, because work will start leaving the plant as finished goods.”

  “Correct,” Erik says, nodding approvingly. “And what will likely happen to due-date performance?”

  “Due-date performance goes up, because wip went down.” Steve says, looking increasingly suspicious and reluctant about where Erik might be leading him.

  “Yes, very good,” Erik says encouragingly. “But on the other hand, what happens to inventory levels if you allow the plant to continue to accept orders and release new jobs?”

  He says after a moment, “wip goes up.”

  “Excellent,” Erik says. “And what happens to due-date performance?”

  Steve looks like he’s just swallowed something that isn’t agreeing with him, and he says eventually, “Everyone knows that in manufacturing, as wip increases, due-date performance goes down.

  “Wait a minute, here,” he says, squinting at Erik. “You’re not actually suggesting that this applies to it, too? That by halting all work except for Phoenix, we’ll reduce the amount of wip in it, and that this will somehow improve due-date performance? Is that seriously what you’re suggesting?”

  Erik leans back in his chair looking pleased with himself. “Yes.”

  Wes says, “Won’t that leave most of us just twiddling our thumbs with nothing to do? That’s 130 people in it Operations just sitting around. Doesn’t that sound a bit…wasteful?”

  Erik scoffs and says, “I’ll tell you about wasteful. How about over a thousand changes stuck in the system, with no apparent way of ever getting them completed?”

  Wes frowns. Then he nods, saying, “That’s true. The number of cards on Patty’s change board keeps going up. If that’s work in process, it’s definitely spiraling out of control. We’re probably only a couple weeks away from having those cards stacked to the ceiling, too.”

  I nod. He’s right.

  The idea is for it Operations and Development to not accept any new projects for two weeks and to stop all work in it Operations except for work related to Phoenix.

  I look around. “If we single-task on the most important project for two weeks and still aren’t able to make a big dent, then I think we should all find new day jobs.”

  Chris nods. “I think we should give it a shot. We’ll keep working on the other active projects, but we’ll freeze all deployment work except Phoenix. From Bill’s perspective, it will look like that’s the only thing we’re working on. Make no mistake, Phoenix will be everyone’s top priority.”

  Patty and Wes nod in agreement.

  John crosses his arms. “I’m not sure if I can support this insane proposal. First, I’ve never seen any organization do anything even remotely like this before. Second, I’m very concerned that if we do this, we’ll lose our shot at getting all the audit issues fixed. As Steve has already said, those audit findings could kill the company, too.”

  “You know what your problem is?” Erik says, pointing a finger at John. “You never see the end-to-end business process, so I guarantee you that many of the controls you want to put in aren’t even necessary.”

  John says, “What?”

  Again, Erik waves John’s question away. “Don’t worry about it for now. Let the inevitable happen, and we’ll see what we can learn from it.”

  Steve turns to John. “I understand your concerns about security. But the biggest risk to the company is not the unresolved audit findings. The biggest risk to the company is that we don’t survive. We need Phoenix to regain competitive parity.”

  He pauses and says, “Let’s give this project freeze one week and see if it makes a difference in the Phoenix work. If we don’t, we’ll put the remediation work back on the front burner. Okay?”

  John nods reluctantly. He then flips to a page in his three-ring binder, and makes some notes. He’s probably recording Steve’s promise.

  “Steve, we definitely need your help to make this happen,” I say. “My guys are routinely strong-armed into doing pet projects by almost every manager in this company. I think we need an e-mail from you to the entire company, not only explaining why you’re doing this, but what the consequences will be if someone tries to put unauthorized work into the system.”

  Erik makes an encouraging noise.

  “No problem,” Steve quickly replies. “I’ll send you all a draft after this meeting. Revise it and I’ll send it out to all the company managers. Good enough for you?”

  Trying to keep the disbelief out of my voice, I say, “Yes.”

  It’s astonishing what we agree to in the next hour. it Operations will freeze all non-Phoenix work. Development can’t idle the twenty-plus non-Phoenix projects, but will freeze all deployments. In other words, no work will flow from Development to it Operations for another two weeks.

  Furthermore, we will identify the top areas of technical debt, which Development will tackle to decrease the unplanned work being created by problematic applications in production.

  This will all make a huge difference in my team’s workload.

  Furthermore, Chris and Kirsten will review all Phoenix tasks not being worked, and steal resources from other projects to get them in work again.

  Everyone seems energized and excited to put the plan into place—even John.

  Before we all leave, Steve says, “Thank you all for your good thinking today and for sharing something about yourself. I feel like I know all of you better now. And, as unbelievable as I think Bill’s crazy project freeze idea is, I think it could work. I look forward to this being the first of many great decisions this team will make.

  “As I said, one of my goals is that we create a team where we can all trust one another,” he continues. “Hopefully, we made a small step in that direction, and I encourage you to keep demanding honest and truthful communications between you.”

  He looks around the room and asks, “Is there anything that you guys need from me in the meantime?”

  There are no requests, so we adjourn.

  As we all get up to leave, Erik says loudly, “Great work, Bill. Couldn’t have done it better myself.”

  CHAPTER 20

  • Friday, September 26

  Three days later, I’m at my desk, trying to read a report on Phoenix progress from Kirsten on my laptop. As it whirs and wheezes, I wonder how many weeks it’s been since John’s security patch bricked my laptop.

  Getting replacement laptops is like a lottery. It’s tempting to bribe one of the service desk people, as one of the Marketing managers suggested, but I refuse to jump the queue. I have to keep playing by the rules since I’m the person responsible for making and enforcing them. I make a note to talk with Patty about our urgent need to reduce lead times on these laptop replacements.

  Finally, the e-mail comes up:

  From: Kirsten Fingle

  To: Steve Masters,

  Cc: Bill Palmer, Chris Allers, Sarah Moulton

  Date: September 26, 10:33 AM

  Subject: Great news on project front!

  Steve,

  We are finally making headway. The project freeze and the resulting IT focus on Phoenix has broken the logjam. We’ve accomplished more in the previous seven days that we typically get done in an entire month.

  Kudos to everyone on the team!

  On a side note: many project sponsors are very frustrated about their projects being put on hold. In particular, Sarah Moulton believes that her projects are exempt from the freeze. I referred her to you.

  Attached is the formal status report. Please let me know if you have any questions.

  Kirsten

  Although the note about Sarah making trouble again makes my jaw clench, this is absolutely fantastic news.

  We were expecting it, but the good news is welcome, nonetheless, especially after earlier in the week. We had a big setback because of a Sev 1 incident that took out all the internal phone and voicemail systems,
bringing Sales and Manufacturing to its knees on the last day of the quarter.

  Two hours into the outage, we discovered it was caused by one of our networking vendors who accidentally made a change to our production phone system instead of the hot spare.

  The outage will impact our quarterly revenue, but we don’t know how much yet. In order to prevent this from happening again, we’re putting together a project to monitor our critical systems for unauthorized changes.

  This monitoring project is what Wes, Patty, and John are talking about, huddled around Patty’s conference table.

  I say, “Sorry to interrupt, but I wanted to share the good news.” I show them Kirsten’s e-mail.

  Wes leans back and says, “Well, that makes it official. Your project freeze is actually working.”

  Patty looks over at him, appearing surprised. “You actually doubted it? Come on, we’ve both been talking about how we’ve never seen people so focused before. It’s amazing how the project freeze has reduced the priority conflicts and bad multitasking. We know it’s made a huge difference in productivity.”

  Wes shrugs then smiles. “Until Kirsten gives us credit, it’s all just in our heads.”

  He’s got a point. It really is great to have Kirsten acknowledge the progress we’re making.

  “By the way,” Patty says, “She’s is not kidding about the business managers freaking out. I’ve had more and more vps calling me, demanding a waiver for their various pet projects or asking to get some work done off the books. It’s not just Sarah—she’s just the most blatant and vocal.”

  I frown. “Okay, that’s part of our job and we expected this. But, I don’t want this kind of pressure being applied to any of our people. Wes?”

  “I’ve told everyone on my team that they’re to route any complaints to me. And trust me, I call each of those guys back and give them an earful,” he says.

  Patty says, “I’m already getting anxious about what we do after we lift the project freeze. Won’t that be like opening up the floodgates?”

  Once again, she has put her finger on something important. I say, “I’ll call Erik, but before I do, how do we currently prioritize our work? When we commit to work on a project, a change, a service request, or anything else, how does anyone decide what to work on at any given time? What happens if there are competing priorities?”

  “That happens every freaking day!” says Wes, looking incredulous. “That’s what’s so great about freezing all the projects except for one. No one has to decide what they’re working on. No multitasking allowed.”

  “That’s not my question,” I say. “When we have multiple streams of work going on simultaneously, how does anyone decide what needs to get worked on at any given time?”

  “Well,” Wes says, “we trust them to make the right decision, based on the data they have. That’s why we hire smart people.”

  This is not good.

  Recalling my twenty minutes observing Brent before the project freeze, I ask, “And on what data do all our smart people base their prioritization decisions?”

  Wes says defensively, “We all try to juggle the competing priorities as best as we can. That’s life, right? Priorities change.”

  “Let’s be honest,” Patty says. “Priority 1 is whoever is yelling the loudest, with the tie-breaker being who can escalate to the most senior executive. Except when they’re more subtle. I’ve seen a bunch of my staff always prioritizing a certain manager’s requests, because he takes them out to lunch once a month.”

  Oh, great. In addition to some engineers being bullied, I have other engineers who are like Corporal Max Klinger from M*A*S*H, running their own black market of it work.

  “If this is true, there’s no way we can lift the project freeze. Don’t you see that we don’t have any way of releasing work into it and be able to trust that it will get worked on?”

  Trying to keep the resignation out of my voice, I say, “Patty is right. We have a lot to figure out before the project freeze ends. Which is in exactly one week.”

  I decide to take a quick walk outside. I have thirty minutes before my next meeting, and I need to think.

  I’m more unsettled than ever. When we have more than one project in the system at the same time, how do we protect the work from being interrupted or having its priority trumped by almost anyone in the business or someone else in it?

  The sun shines down on me. It’s 11 a.m., and the air smells like autumn. The leaves on the trees are starting to turn orange and brown, and there are piles of them starting to form in the parking lot.

  Despite my fretting, I realize how refreshing it is to be able to think about what work we need to be doing and how to prioritize and release it. For a moment, I marvel at the lack of constant firefighting that dominated so much of my career in it.

  The types of issues we’re having to solve lately are so…cerebral.

  It’s what I thought management was all about when I got my mba.

  I’m convinced that if we do a good job thinking, we can make a real difference. In that moment, I decide to call Erik.

  “Hello?” I hear him say.

  “Hi, it’s Bill. Do you have a couple of minutes to talk? I have some questions about the project freeze.” I pause, and then add, “Or rather, what happens after we lift the project freeze.”

  “Well, it’s about time. I was wondering when you’d figure out that you have a huge, new problem on your hands.”

  I quickly fill him in on the good news from Kirsten. I outline the problems we’ve stumbled upon while we consider the monitoring project and how we protect work in the system.

  “Not bad, junior!” Erik says. “You’ve obviously put our discussion about constraints into practice and are doing everything you can to protect that constraint from being hit by unplanned work. You’re asking some very important questions about the First Way and how you manage your flow of planned work. Until you can do that, you can’t really manage much of anything, can you?

  “You’re confused because you’re realizing you don’t know how work is actually worked,” he continues.

  I suppress an irritated sigh.

  “I think it’s time for another trip to mrp-8. How soon can you get there?” he asks.

  Surprised, I ask, “You’re in town?”

  “Yep” he says. “There’s a meeting with the auditors and the finance guys this afternoon that I wouldn’t miss for the world. Make sure you’re there for it. We’re going to make John’s head fall off.”

  I tell him that I can be at mrp-8 in fifteen minutes.

  Erik’s in the middle of the lobby waiting for me.

  I do a double take. He’s wearing a faded T-shirt and a zippered, hooded sweatshirt with a faded union logo. He already has a visitor badge and is tapping his foot impatiently.

  “I came as fast as I could.” I say.

  Erik merely grunts and gestures for me to follow him. Again, we climb the staircase and stand on the catwalk overlooking the plant floor.

  “So tell me what you see,” he says, gesturing toward the plant floor.

  I look down, confused, not knowing what he wants to hear. Starting with the obvious, I say, “Like last time, I see raw materials coming in from the loading docks on the left. And on the right, I see finished goods leaving the other set of loading docks.”

  Surprisingly, Erik nods approvingly. “Good. And in between?”

  I look down at the scene. Part of me feels foolish, afraid of looking like the Karate Kid being quizzed by Mr. Miyagi. But I asked for this meeting, so I just start talking. “I see materials and work in process, flowing from left to right—but, obviously, moving very slowly.”

  Erik peers over the catwalk, and says, “Oh, really? Like some sort of river?”

  He turns to me, shaking his head with disgust, “What do you think this is, some sort of poetry reading class? Suddenly, wip is like water running over smooth stones? Get serious. How would a plant manager answer the question? From where to
where does the work go, and why?”

  Trying again, I say, “Okay, okay. wip goes from work center to work center, as dictated by the bill of materials and routings. And all that is in the job order, which was released at that desk over there.”

  “That’s better,” Erik says. “And can you find the work centers where the plant constraints are?”

  I know that Erik had told me on that first odd trip to this plant.

  “The heat treat ovens and paint curing booths,” I say suddenly.

  “There,” I say, after scanning the plant floor and finally spotting a set of large machines by the far wall. “And there,” I say, pointing at the large rooms with signs saying, “Paint Booth #30-a” and “Paint Booth #30-b.”

  “Good. Understanding the flow of work is key to achieving the First Way,” Erik says, nodding. More sternly, he asks, “So now, tell me again which work centers you’ve determined to be the constraints in your organization?”

  I smile, answering easily, “Brent. We talked about that before.”

  He scoffs, turning back to look at the plant floor.

  “What?” I nearly shout. “How can it not be Brent? You even congratulated me when I told you it was Brent a couple of weeks ago!”

  “Suddenly Brent is a robotic heat treat oven? You’re telling me your equivalent of that paint curing booth down there is Brent?” he says with mock disbelief. “You know, that might be the dumbest thing I’ve ever heard.”

  He continues, “So, where would that leave your two managers, Chester and Penelope? Let me guess. Maybe they’re equivalent to that drill press station and that stamping machine over there? Or maybe it’s that metal grinder?”

  Erik looks sternly at me, “Get serious. I asked you what work centers are your constraints. Think.”

  Completely confused, I look back down at the plant floor.

  I know that part of the answer is Brent. But when I blurt it out so confidently, Erik all but smacks me on the head. Again.