Creating a Sustainable Lean Culture

1. Process Creating a Sustainable Lean Culture “Leaders have to be Learners” Tom Shuker People

2. Sustainable Lean Culture What does this mean? What does it look like?

3. Culture Peter M. Senge – The Fifth Discipline Culture can only be grown It can not be copied or transplanted It can only be developed over time Culture lives in the day to day, not in abstract values and feel good slogans Culture is who we are-embodied in what we do when nobody is looking Culture is learned through doing, not through classes, readings, or exhortations

5. The NUMMI Success Story

6. The NUMMI Success Story Results In about one year… Quality Best ever in GM Equal to Takaoka Japan Productivity Best in GM Close to Takaoka Japan

7. The Culture Question WHAT WE DO VALUES - ATTITUDES C U L T U R E Change Culture First Change System First Where Do You Start – Either? Both at once?

8. Training Within Industry course being taught in California in 1985

9. Training Within Industry TWI -The training program instituted to support the U.S. war production effort from 1941 – 1945 Two million Americans trained over four year period. This training is forgotten in the US - now making a comeback! It formed the basis of Toyota’s core training. Toyota still uses much of it to this day!

10. Continuous Improvement (Lean) Today • Now spreading rapidly beyond repetitive manufacturing operations to all functional areas in firms and to new industries • Success stories in many non-manufacturing industries: • Government: EPA, City of Grand Rapids, MI. Jacksonville, Indiana, State of Michigan • Lots of health care examples: Michigan Hospital Association, Mayo, U of Michigan, VM • Capital One ( financial services) • U.S. Military: aerospace, shipbuilding • Starbucks in retail.

11. Discussion Question • Lean is a proven successful business model. • Many have tried to adopt and adapt it, some successfully, some MOST not. • Why?

12. How Lean Implementation is Changing A P PDCA cycle C D NOW PAST 10 YEARS Solving Problems Growing Knowledge and Capability 12

13. Think Different.

14. Why Think Different? “You can’t solve today’s problems at the same level of thinking you were at when you created them.” Albert Einstein Lean includes a change in mindset Organizational Complexity From top down blanket solutions to solving the problems in the way we work Time

15. “What sets the operations of [Toyota] apart is the way they tightly couple the process of doing the work with the process of learning to do it better as it’s being done. Operations are expressly designed to reveal problems as they occur…. And managers constantly develop and encourage their subordinates’ [problem solving] ability to design, improve and deploy such improvements.” Steven Spear HBR, Sep 2005

16. Two Paradigms Problem Solving through rapid small experiments Blanket Solutions Thinking Solution

17. Solutions Thinking vsProblem Solving P DC A P DC A P DC A Learning path to solving business problems Blanket Solutions Model Problem Solving Model Implement Solutions NOW!! Need to direct people Need to control Fragmented/Reductionist Knowers Results Focus Need to engage people Need to build capability Systems/Integrated Learners Means Focus

18. What Strategies Do Companies Use to Continue Growing and Improving? Mergers Reducing headcount across the organization Hiring freezes Reorganizing Moving operations off shore Hiring a new team of leaders Buying IT systems • What problem(s) are we addressing with these solutions?

19. A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D Problem Solving by Level Strategic Problem-Solving Coaching Problem-Solving Value Stream Coaching Problem-Solving Value Added/ Gemba Doing

20. “What sets the operations of [Toyota] apart is the way they Three Significant Points • Tightly couple the process of doing the work with the process of learning to do it better as it’s being done. • Operations are expressly designed to reveal problems as they occur…. • And managers constantly develop and encourage their subordinates’ [problem solving] ability to design, improve and deploy such improvements.” • Steven Spear HBR, Sep 2005 Problem Solving Capability Designed Value Streams Developmental Leadership

21. Solutions Thinking IDEA Problem Solution ACTIONABLE? MAGICAL? Problem Solving FACTS Real Problem Learning Cycles Target Condition Plans Causes Actions Get into the Dirty Details …but not the weeds

22. Problem Solving around Value Streams Cultural Unquestioned Assumptions Address values, policies, and procedures Value Streams PDCA management for continuous improvement Support Systems Suppliers Managers Expose and respond to problems Keep operators in value field

23. What has been your role as a Leader with respect to Learning and Continuous Improvement?

24. Gettin’ Away from the Gemba Interpretations: conclusions about the nature of situations and events and what “really” occurred Impressions: recognition of patterns, trends, types and familiar elements in situations and events Experiences: what is directly seen, heard, sensed, felt and perceived from the actual conditions of a situation or event ASSUMPTIONS: about what actually happened and what it means What We Tend to Report

25. Reason for Going to the Gemba Assumption Interpretation Impression Experience • “I guess I shouldn’t rely on Ben to do the detail design checks for the team” • “Ben’s doesn’t pay attention to the design standards and details the way he should.” • “It looks like he did a quick check and missed two different dimensions” • “We found out that the design standards were from an old design and never updated by the design standards team.”

26. How do we Take Our Organization to a New Level of Performance? Cultural Unquestioned Assumptions Performance Question your own assumptions Galileo Time

27. Key Values of Lean • Mutual respect and long-term prosperity (employees, company, customer, community) • “Customer first” focus • Continuous Improvement (Kaizen) • Never knowingly pass a defect to the next process • Problems are treasures • Genchi Gembutsu (“go see for yourself”)

28. Plan-Do-Check-Act Management Cycle • Creates the culture of: • Problem Solving • Learning • Continuous Improvement

29. You live in a noisy system Environment Leadership is about knowing who you are as an agent of change inside the noisy system Business Self

30. “Grasp the Situation” • Environment • Understanding your external environment, market, customer, enemy, and changing circumstances • Business(Internal) • Understanding the capability and condition of your organization, employees, partners and all members of the organization • Self • Challenge of being passionate, and attaining goals and dispassionate about assesing and determining next steps --- “ A Learner and a Knower in the right balance”

31. The Leader’s Job… Aligning purpose, process, and people is the central task of management. Process Management People Based on John Shook Lean Management Columns, lean.org 2009

32. What to do? IFan effective lean system is equal parts: “Social” - People All the people, thinking, organizational, people, cultural aspects of how your organization engages and aligns its people to accomplish its purpose “Technical” - Process All the process, technical, mechanical, process, ways work is designed to deliver value to the customer and accomplish its purpose Our job as lean leaders is to align those to achieve the purpose of the organization.

33. The Technical Side of Lean Process • The Value Stream Perspective for Alignment and Focus • Managing Primary and Secondary Value Streams • Selecting Value Stream Performance Problems

34. “What sets the operations of [Toyota] apart is the way they Three Significant Points • Tightly couple the process of doing the work with the process of learning to do it better as it’s being done. • Operations are expressly designed to reveal problems as they occur…. • And managers constantly develop and encourage their subordinates’ [problem solving] ability to design, improve and deploy such improvements.” • Steven Spear HBR, Sep 2005 Problem Solving Capability Process Designed Value Streams Developmental Leadership

35. Are the efforts focused on therightproblem? Your Delivery Customer Delivery Value Stream Customer • Measurements • On time delivery • Quality • Lead Time • Cost/Price • Customer satisfaction Problem Solving begins with leaders identifying the business problem.

36. What is the most significant problem of your Primary Value Stream(s)? • Customer? • Customer Needs? • Deliverables? • Most Significant Performance Problem?

37. “What sets the operations of [Toyota] apart is the way they Three Significant Points • Tightly couple the process of doing the work with the process of learning to do it better as it’s being done. • Operations are expressly designed to reveal problems as they occur…. • And managers constantly develop and encourage their subordinates’ [problem solving] ability to design, improve and deploy such improvements.” • Steven Spear HBR, Sep 2005 Problem Solving Capability Process Designed Value Streams Developmental Leadership

38. How is your Value Stream performing? (Functional Support) Personnel Finance Product Development Marketing Sales Purchasing Maintenance Supply Chain Scheduling/Forecasting Technical Support

39. PDCA Management Firmly Grasp The Current Condition

40. You are Need to be Here Here A P C D A P C D A P C D A P C D GAP Target Condition BARRIER CONSTRAINT Remove Overcome Eliminate Current Condition CAUSE

41. Lean/CI Problem Solving by Level Problem SOLVING TOOLS TARGET CONDITION • Engaging Organization Culture • Supporting value stream & systems • Understanding the environment you live in • Management environment & behaviors • Structure, roles and relationships • Policies and practices Senior Leader Value Field Analysis Project Team Value Stream Mapping Capable Value Streams that Flow & Timely Deliver Quality Reliable Work Methods & Technology & Skilled Employees that produce consistent output Team-Created Standard Work Procedures

42. “What sets the operations of [Toyota] apart is the way they Three Significant Points • Tightly couple the process of doing the work with the process of learning to do it better as it’s being done. • Operations are expressly designed to reveal problems as they occur…. • And managers constantly develop and encourage their subordinates’ [problem solving] ability to design, improve and deploy such improvements.” • Steven Spear HBR, Sep 2005 Problem Solving Capability Designed Value Streams Developmental Leadership People

43. The Social Side of Lean(Breakout Session) • Creating the Environment for Problem Solving and Learning • Engagement and Change Through Modeling • Practice of Humble Inquiry for Deployment and Engagement • Grasping the Actual Condition of Process Execution

44. Management by Numbers versus Management by Facts • Management by Facts requires • Management by Thinking: • What are the Facts Saying? • Management by Numbers allows Management at a Glance: Are the Numbers Right?

45. Traditional vs. Lean Management People People

46. Systems Model for Lean Transformation Unquestioned Assumptions Value Streams Patterns Problems 46

47. Unquestioned Assumptions That Drive Complexity • Blanket solutions • Use of CI specialists to solve organizational problems • Not building capability of others • Missing opportunities for learning • Focused on the final result, not on the problem solving process • Fragmented actions • Lack of organization wide strategy • Silos • Failure is not allowed • Employees feel the need to justify their actions • Someone else caused the problem • Rationalization of data • Metrics and status reports are the primary management tool • Deferring to the person of highest rank

48. Assumptions that Drive Continuous Improvement Means-oriented Let’s Identify the problem and solve it together Learners Systems thinking Focused on the means to achieve great results Self Reflection Give Problem Solving Responsibility Processes and people are aligned to achieve organizational goals Environment where it is OK to fail • Go See • Mentor people to develop problem solvers

49. Keys to Making the Transition

50. Discussion Question • Lean is a proven successful business model. • Many have tried to adopt and adapt it, some successfully, some MOST not. • Why? What role does Leadership play? “Leadership vs. knowledge”?