“SKIN in the Game”…

“Most people you run into in real life…plumbers, taxi drivers, accountants, tax advisors, garbage collectors…pay a price for their mistakes”. – Nassim Taleb Taleb is talking about people having “skin in the game”, and paying for their own mistakes. I think of “skin in the game” as someone having a real and meaningful stake in the activity they are involved in. Why is it important to have a stake in things and to pay for mistakes? One thing it really helps with is alignment, making sure everybody is pulling in the same direction. If everybody has a stake in a project, they will all (ideally!) have to help the project succeed. This helps with resources: both funding and people. An impressive and real example of “skin in the game” from nearly 4,000 years ago is Hammurabi’s Code: “If a builder builds a house for a man and does not make its construction firm, and the house which he has built collapses and causes the death of the owner of the house, that builder shall be put to death.” Wow, how crazy this seems now! But, this ensured that builders would not build rickety houses that would endanger the people living there! Fortunately, we do not need to go that far to build Great Manufacturing Processes! What are some “skin in the game” ideas for Process Builders? Let’s think about it from The Process Perspective… Research…”Skin in the Game” Ideas

• Identify and selectively fund researchers who care about having commercial and business impact.

• Find or create a Champion who will benefit from the research. An effective Champion should ideally have “skin in the game”, such as being a financial sponsor.

• Minimize “spectators”: they will not meaningfully participate in difficult process building efforts.

Development…”Skin in the Game” Ideas

• Operate the process yourself, many many times. This will help ensure you personally feel the pain of things not working smoothly.

• The equipment group must be fully committed to having repeatable and strong processes. The equipment must serve the needs of the process, period. Look for ways to create “skin in the game”.

• Evaluating manufacturability ruthlessly: this is a very big deal and of vital importance to everyone involved. All players should have a real, measurable, and documented stake in this.

Production…”Skin in the Game” Ideas

• The operators are the ultimate receivers and customers: they certainly have “skin in the game”. Use their suggestions and efforts to make the process better.

• Have managers work/observe for a half-shift in production, to see what is really going on. There is no substitute for seeing the reality of the production environment.

• How could you improve your product, from your customer’s vantage point? Is there something you can do with your process to produce meaningful progress for your customers?

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My main learning has been that the concept of “skin in the game” is very similar to “thinking like an owner”. This is also called the “founder’s mentality”. Founders certainly have real and substantial “skin in the game”. Motivated process builders also have the “founder’s mentality”: they will do whatever it takes to build a great manufacturing process. An acknowledgement…more information on Hammurabi’s code and NN Taleb’s thinking about it can be found at: https://thereformedbroker.com/2011/11/08/taleb-invoke-hammurabis-code-on-the-banks/

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CHALLENGE TO READERS

Please think about you and your organization’s key efforts building Great Manufacturing Processes…

• Who (by name) has “skin in the game” for these projects? A discussion with key players can increase alignment and velocity…do they need help?

• The Equipment Group must be judged on BOTH if the process works and if the equipment works. BEWARE: unworkable equipment can very quickly become an expensive boat anchor!

I’d like to know what you think about “skin in the game”. Can you relate to it? Do your process builders have it? If you email us, we will get back to you promptly. Thanks!

All the Best,

Marty

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